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                                                                   EXHIBIT 10.3

                   AMENDED AND RESTATED SECURITY AGREEMENT

         THIS AMENDED AND RESTATED SECURITY AGREEMENT (the "SECURITY
AGREEMENT") is executed as of October 31, 2000, by the undersigned Debtor,
whose address is One Digex Plaza, Beltsville, Maryland 20705 (whether doing
business in its own name or in one or more of the tradenames listed on ANNEX A
hereto, "DEBTOR"), and BANK OF AMERICA, N.A., a national banking association,
(in its capacity as "Administrative Agent" for the Lenders (hereafter
defined)), as "SECURED PARTY."

A.       WHEREAS, Intermedia Communications Inc. ("BORROWER"), Bank of
America, N.A., as Administrative Agent (including its permitted successors and
assigns in such capacity, "ADMINISTRATIVE AGENT"), and Lenders now or
hereafter party to the Credit Agreement (including their respective permitted
successors and assigns, "LENDERS") have entered into a Revolving Credit
Agreement, dated as of December 22, 1999 (as amended, modified, supplemented,
or restated from time to time, the "CREDIT AGREEMENT"); and

B.       WHEREAS, Debtor executed a Security Agreement in connection with the
closing of the Credit Agreement which was integral to the transactions
contemplated by the Loan Documents, and the execution and delivery thereof was
a condition precedent to Lenders' continuing obligations to extend credit
under the Loan Documents; and

C.       WHEREAS, Debtor has requested that Lenders amend this Debtor's
Security Agreement to limit the Obligation of Debtor and Secured Party has
consented to such request.

         NOW THEREFORE, for valuable consideration, the receipt and adequacy
of which are hereby acknowledged, Debtor and Secured Party hereby agree as
follows:

         1.       REFERENCE TO CREDIT AGREEMENT. The terms, conditions, and
provisions of the Credit Agreement are incorporated herein by reference, the
same as if set forth herein verbatim, which terms, conditions, and provisions
shall continue to be in full force and effect hereunder so long as Lenders are
obligated to lend under the Credit Agreement and thereafter until the
Obligation is paid and performed in full.

         2.       CERTAIN DEFINITIONS. Unless otherwise defined herein, or the
context hereof otherwise requires, each term defined in either of the Credit
Agreement or in the UCC is used in this Security Agreement with the same
meaning; provided that (a) if the definition given to such term in the Credit
Agreement conflicts with the definition given to such term in the UCC, the
Credit Agreement definition shall control to the extent legally allowable; and
(b) if any definition given to such term in Chapter 9 of the UCC conflicts
with the definition given to such term in any other chapter of the UCC, the
Chapter 9 definition shall prevail. As used herein, the following terms have
the meanings indicated:

                  COLLATERAL has the meaning set forth in PARAGRAPH 4 hereof.

                  DIGEX OBLIGATION means the Obligation (as defined below) to
         the extent of the greater of either (a) $90,000,000 less any amounts
         paid by any Subsidiary of Debtor under any Loan Document, or (b) the
         aggregate amount of all loans, advances, extensions of credit, or
         capital contributions from any Company to Debtor or any of Debtor's
         Subsidiaries on or after the date of this Security Agreement or any
         investments in Debtor or any of Debtor's Subsidiaries on or after the
         date of this Security Agreement by any Company, less (x) any
         repayment of any such loan, advance, extension of credit, or
         investment by Debtor or any of Debtor's Subsidiaries, (y) the amount
         of all dividends and distributions received by any Company by Debtor
         or any of Debtor's Subsidiaries, and (z) any amounts paid by any
         Subsidiary of Debtor under any Loan Document.

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                  FCC LICENSES means all authorizations, licenses, and permits
issued by the FCC to Debtor.

                  LENDER means, individually, or LENDERS means, collectively,
         on any date of determination, the Administrative Agent, the Sole Lead
         Arranger and Book Manager, the Syndication Agent, Documentation
         Agent, Arranging Agents, and the Lenders.

                  OBLIGATION means, collectively, (a) the "Obligation" as
         defined in the Credit Agreement, and (b) all indebtedness,
         liabilities, and obligations of Debtor arising under this Security
         Agreement; it being the intention and contemplation of Debtor and
         Secured Party that future advances will be made by Secured Party or
         one or more Lenders to Borrower for a variety of purposes, that
         Debtor may guarantee (or otherwise become directly or contingently
         obligated with respect to) the obligations of others to Secured Party
         or to one or more Lenders, that from time to time overdrafts of
         Borrower's accounts with Secured Party or with other Lenders may
         occur, and that Secured Party or one or more Lenders may from time to
         time acquire from others obligations of Borrower to such others, and
         that payment and repayment of all of the foregoing are intended to
         and shall be part of the Obligation secured hereby. The Obligation
         shall include, without limitation, future, as well as existing,
         advances, indebtedness, liabilities, and obligations owed by Debtor
         and Borrower to Secured Party or to any Lender arising under the Loan
         Documents or otherwise.

                  OBLIGOR means any Person obligated with respect to any of
         the Collateral, whether as an account debtor, obligor on an
         instrument, issuer of securities, or otherwise.

                  PARTNERSHIP means any partnership issuing a Partnership
         Interest except Financial Place Communications Company to the extent
         it is not a Subsidiary.

                  PLEDGED INTERESTS means, collectively, the Partnership
         Interests (whether or not a security), and any other Collateral
         constituting securities.

                  PUC CERTIFICATES means all authorizations, licenses, and
         permits issued by any state PUC to Debtor.

                  SECURITY INTEREST means the security interest granted and
         the pledge and assignment made under PARAGRAPH 3 hereof.

                  UCC means the Uniform Commercial Code as enacted in the
         State of New York or other applicable jurisdiction, as amended at the
         time in question.

         3.       SECURITY INTEREST. In order to secure the full and complete
payment and performance of the Digex Obligation when due, Debtor hereby grants
to Secured Party a Security Interest in all of Debtor's rights, titles, and
interests in and to the Collateral and pledges, collaterally transfers, and
assigns the Collateral to Secured Party, all upon and subject to the terms and
conditions of this Security Agreement. Such Security Interest is granted and
pledge and assignment are made as security only and shall not subject Secured
Party to, or transfer or in any way affect or modify, any obligation of Debtor
with respect to any of the Collateral or any transaction involving or giving
rise thereto. The grant contained herein is intended to confer upon Secured
Party all rights that a secured creditor may obtain and that may be granted in
the FCC Licenses or PUC Certificates under applicable Law as from time to time
in effect. If the Law is subsequently changed or clarified, or if the FCC's or
PUC's interpretation of existing Law is changed, to permit or further permit
the granting of such security interests in licenses issued by the FCC or PUC,
then Debtor's FCC Licenses and PUC Certificates, whether now held or
hereinafter acquired, shall automatically become subject to the Secured

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Party's Security Interest to the maximum extent permitted by the Law as then
in effect. If the grant, pledge, or collateral transfer or assignment of any
specific item of the Collateral is expressly prohibited by any contract, then
the Security Interest created hereby nonetheless remains effective to the
extent allowed by UCC Section 9-318 or other applicable Law, but is otherwise
limited by that prohibition. Notwithstanding anything to the contrary herein
or in any other Loan Document, the liability of Debtor to the Administrative
Agent and Lenders under any Loan Documents shall not exceed the Digex
Obligation.

         4.       COLLATERAL.  As used herein, the term "COLLATERAL" means the
following items and types of property now owned or in the future acquired by
such Debtor:

                  (a)      All present and future accounts, contract rights,
         general intangibles, chattel paper, documents, instruments,
         inventory, investment property, equipment, fixtures, other goods,
         minerals, and money, wherever located, now owned or hereafter
         acquired by Debtor, and any and all present and future Tax refunds of
         any kind whatsoever to which Debtor is now or shall hereafter become
         entitled.

                  (b)      All rights, titles, and interests of Debtor in and
         to all promissory notes and other instruments payable to such Debtor,
         now or hereafter existing, including, without limitation, any
         inter-company notes listed on ANNEX B (collectively, the "COLLATERAL
         NOTES"), all rights, titles, interests, and Liens Debtor may have,
         be, or become entitled to under all present and future security
         agreements, pledge agreements, deeds of trust, mortgages, guarantees,
         or other documents assuring or securing payment of the Collateral
         Notes (the "COLLATERAL NOTE SECURITY") in, to, and under all other
         loan and collateral documents relating to such instruments.

                  (c)      All present and future rights, titles, interests,
         and Liens (but none of the obligations) now owned or hereafter
         acquired by Debtor in any partnership or joint venture (except
         Financial Place Communications Company to the extent it is not a
         Subsidiary), including, without limitation, the partnerships listed
         on ANNEX B hereof (collectively, the "PARTNERSHIP INTERESTS").

                  (d)      All present and future rights, titles, interests,
         and Liens (but none of the obligations) now owned or hereafter
         acquired by Debtor, as lessee or landlord, in and to each lease
         covering real property or any interest therein, and equipment or
         other personal property or any interest therein (each such lease
         herein called an "ASSIGNED LEASE").

                  (e)      All present and future rights, awards, and
         judgments to which Debtor is entitled under any Litigation (whether
         arising in equity, contract, or tort) now existing or hereafter
         arising.

                  (f)      All present and future rights (including, without
         limitation, the right to sue for past, present, or future
         infringements), titles, and interests of Debtor in and to all
         trademark applications, trademarks, corporate names, company names,
         tradenames, business names, fictitious business names, tradestyles,
         service marks, logos, other source of business identifiers,
         copyrights, designs, rights or licenses to use any trademarks, and
         all registrations and recordings thereof, including, without
         limitation, such Debtor's trademarks listed on ANNEX B hereto
         (collectively, the "TRADEMARKS"), and the goodwill of each business
         to which each Trademark relates.

                  (g)      All present and future rights (including, without
         limitation, the right to sue for past, present, and future
         infringements), titles, and interests of Debtor in and to all
         patents, patent applications, utility models, industrial models,
         designs, and any other forms of industrial intellectual property,
         including all grants, applications, reissues, continuations, and
         divisions with respect thereto

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         and any rights to use, manufacture, or sell any patent, including,
         without limitation, the patents listed on ANNEX B hereto
         (collectively, the "PATENTS").

                  (h)      All Authorizations, licenses, and permits issued by
         the FCC or any PUC, to the extent that the grant of a security
         interest in any such license or permit does not result in the
         forfeiture of, or default under, any such license or permit, and the
         right of Debtor to apply to the FCC or PUC for approval of transfers
         of licenses issued by the FCC or PUC.

                  (i)      All proceeds of any sale or other disposition of
         any Authorization, license, or permit issued by the FCC or any PUC,
         whether or not any such license or permit may lawfully be included as
         Collateral and whether or not the grant of a security interest in any
         such Authorization, license, or permit is otherwise prohibited.

                  (j)      All present and future increases, profits,
         combinations, reclassifications, improvements, and products of,
         accessions, attachments, and other additions to, tools, parts, and
         equipment used in connection with, and substitutes and replacements
         for, all or part of the Collateral heretofore described.

                  (k)      All present and future accounts, contract rights,
         general intangibles, chattel paper, documents, instruments, cash and
         noncash proceeds, and other rights arising from or by virtue of, or
         from the voluntary or involuntary sale or other disposition of, or
         collections with respect to, or insurance proceeds payable with
         respect to, or proceeds payable by virtue of warranty or other claims
         against the manufacturer of, or claims against any other Person with
         respect to, all or any part of the Collateral heretofore described in
         this clause or otherwise.

                  (l)      All present and future security for the payment to
         any Company of any of the Collateral heretofore described and goods
         which gave or will give rise to any of such Collateral or are
         evidenced, identified, or represented therein or thereby.

The description of the Collateral contained in this PARAGRAPH 4 shall not be
deemed to permit any action prohibited by this Security Agreement or by the
terms incorporated in this Security Agreement. Furthermore, notwithstanding
any contrary provision, Debtor agrees that, if, but for the application of
this paragraph, granting a Security Interest in the Collateral would
constitute a fraudulent conveyance under 11 U.S.C. Section 548 or a fraudulent
conveyance or transfer under any state fraudulent conveyance, fraudulent
transfer, or similar Law in effect from time to time (each a "FRAUDULENT
CONVEYANCE"), then the Security Interest remains enforceable to the maximum
extent possible without causing such Security Interest to be a fraudulent
conveyance, and this Security Agreement is automatically amended to carry out
the intent of this paragraph.

         5.       REPRESENTATIONS AND WARRANTIES.  Debtor represents and
warrants to Secured Party that:

                  (a)      Credit Agreement.  Certain representations and
         warranties in the Credit Agreement are applicable to it or its assets
         or operations, and each such representation and warranty is true and
         correct.

                  (b)      Binding Obligation. This Security Agreement creates
         a legal, valid, and binding Lien in and to the Collateral in favor of
         Secured Party and enforceable against Debtor. For Collateral in which
         the Security Interest may be perfected by the filing of Financing
         Statements, once those Financing Statements have been properly filed
         in the jurisdictions described on ANNEX A hereto, the Security
         Interest in that Collateral will be fully perfected. Once perfected
         and, in the case of investment property or instruments, upon
         possession or "control" (within the meaning of Sections 8-

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         106 and 9-115 of the UCC) by Secured Party, the Security Interest
         will constitute a first-priority Lien on the Collateral, subject only
         to Permitted Liens. The creation of the Security Interest does not
         require the consent of any Person that has not been obtained.

                  (c)      Location. Debtor's place of business and chief
         executive office is where Debtor is entitled to receive notices
         hereunder; the present and foreseeable location of Debtor's books and
         records concerning any of the Collateral that is accounts is as set
         forth on ANNEX A hereto, and the location of all other Collateral,
         including, without limitation, Debtor's inventory and equipment, is
         as set forth on ANNEX A hereto (but the failure of such description
         to be accurate or complete shall not impair the Security Interest in
         such Collateral); and, except as noted on ANNEX A hereto, all such
         books, records, and Collateral are in Debtor's possession.

                  (d)      Partnerships and Partnership Interests. Each
         Partnership issuing a Partnership Interest is duly organized,
         currently existing, and in good standing under all applicable Laws;
         there have been no amendments, modifications, or supplements to any
         agreement or certificate creating any Partnership or any material
         contract relating to the Partnerships, of which Secured Party has not
         been advised in writing; no default or potential default has occurred
         under the terms of any material contract relating to any Partnership;
         and no approval or consent of the partners of any Partnership is
         required as a condition to the validity and enforceability of the
         Security Interest created hereby or the consummation of the
         transactions contemplated hereby which has not been duly obtained by
         Debtor. Debtor has good title to the Partnership Interests free and
         clear of all liens and encumbrances (except for the Security Interest
         granted hereby). The Partnership Interests are validly issued, fully
         paid, and nonassessable and are not subject to statutory,
         contractual, or other restrictions governing their transfer,
         ownership, or control, except as set forth in applicable securities
         Laws.

                  (e)      Governmental Authority. No authorization, approval,
         or other action by, and no notice to or filing with, any Governmental
         Authority is required either (i) for the execution, delivery, or
         performance of this Security Agreement by Debtor, or (ii) for the
         exercise by Secured Party of the voting or other rights provided for
         in this Security Agreement or the remedies in respect of the
         Collateral pursuant to this Security Agreement (except as may be
         required in connection with the transfer of control of FCC Licenses
         and PUC Certificates).

                  (f)      Accounts. Except as the same may be incurred in the
         ordinary course of business, all Collateral that is accounts,
         contract rights, chattel paper, instruments, or general intangibles
         is free from any claim for credit, deduction, or allowance of an
         Obligor and free from any defense, dispute, setoff, or counterclaim,
         and there is no extension or indulgence with respect thereto.

                  (g)      Instruments, Chattel Paper, Collateral Notes, and
         Collateral Note Security. All instruments and chattel paper,
         including, without limitation, the Collateral Notes, have been
         delivered to Secured Party, together with corresponding endorsements
         duly executed by Debtor in favor of Secured Party, and such
         endorsements have been duly and validly executed and are binding and
         enforceable against Debtor in accordance with their terms. Each
         Collateral Note and the documents evidencing the Collateral Note
         Security are in full force and effect; there have been no renewals or
         extensions of, or amendments, modifications, or supplements to, any
         thereof about which the Secured Party has not been advised in
         writing; and no default or potential default has occurred and is
         continuing under any such Collateral Note or documents evidencing the
         Collateral Note Security, except as disclosed on ANNEX C hereto and
         except those which could not be or result in a Material Adverse
         Event.

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                  (h)      Assigned Leases. All Collateral that is an Assigned
         Lease is in full force and effect; Debtor is in possession of the
         property covered by each such Assigned Lease; and no default or
         potential default exists under any such Assigned Lease except those
         which could not be or result in a Material Adverse Event.

                  (i)      Maintenance of Collateral.  All tangible Collateral
         is in good repair and condition, ordinary wear and tear excepted.

                  (j)      Liens.  Debtor owns all presently existing
         Collateral, and will acquire all hereafter-acquired Collateral, free
         and clear of all Liens, except Permitted Liens.

The foregoing representations and warranties will be true and correct in all
respects with respect to any additional Collateral or additional specific
descriptions of certain Collateral delivered to Secured Party in the future by
Debtor.

         The failure of any of these representations or warranties to be
accurate and complete does not impair the Security Interest in any Collateral.

         6.       COVENANTS.  So long as Lenders are committed to extend
credit under the Credit Agreement and until the Obligation is paid and
performed in full, Debtor covenants and agrees with Secured Party that Debtor
will:

                  (a)      Credit Agreement. (i) Comply with, perform, and be
         bound by all covenants and agreements in the Credit Agreement that
         are applicable to it, its assets, or its operations, each of which is
         hereby ratified and confirmed (INCLUDING, WITHOUT LIMITATION, THE
         INDEMNIFICATION AND RELATED PROVISIONS IN SECTION 11.12 OF THE CREDIT
         AGREEMENT); AND (II) CONSENT TO AND APPROVE THE VENUE, SERVICE OF
         PROCESS, AND WAIVER OF JURY TRIAL PROVISIONS OF SECTION 13.10 OF THE
         CREDIT AGREEMENT.

                  (b)      Record of Collateral. Maintain, at the place where
         Debtor is entitled to receive notices under the Loan Documents, a
         current record of where all Collateral is located, permit
         representatives of Secured Party at any time during normal business
         hours to inspect and make abstracts from such records, and furnish to
         Secured Party, at such intervals as Secured Party may request, such
         documents, lists, descriptions, certificates, and other information
         as may be necessary or proper to keep Secured Party informed with
         respect to the identity, location, status, condition, and value of
         the Collateral.

                  (c)      Perform Obligations. Fully perform all of Debtor's
         duties under and in connection with each transaction to which the
         Collateral, or any part thereof, relates, so that the amounts thereof
         shall actually become payable in their entirety to Secured Party.

                  (d)      Notices. (i) Promptly notify Secured Party of (A)
         any material change in any fact or circumstances represented or
         warranted by Debtor with respect to any of the Collateral or
         Obligation, and (B) any material claim, action, or proceeding
         affecting title to all or any of the Collateral or the Security
         Interest and, at the request of Secured Party, appear in and defend,
         at Debtor's expense, any such action or proceeding; and (ii) give
         Secured Party thirty (30) days written notice before any proposed (A)
         relocation of its principal place of business or chief executive
         office, (B) change of its name, identity, or corporate structure, (C)
         relocation of the place where its books and records concerning its
         accounts are kept, and (D) relocation of any Collateral (other than
         delivery of inventory

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         in the ordinary course of business to third party contractors for
         processing and sales of inventory in the ordinary course of business
         or as permitted by the Credit Agreement) to a location not described
         on the attached ANNEX A. Prior to making any of the changes
         contemplated in clause (ii) preceding, Secured Party shall execute
         and deliver all such additional documents and perform all additional
         acts as Secured Party, in its sole discretion, may request in order
         to continue or maintain the existence and priority of the Security
         Interests in all of the Collateral.

                  (e)      Collateral in Trust. Hold in trust (and not
         commingle with other assets of Debtor) for Secured Party all
         Collateral that is chattel paper, instruments, Collateral Notes, or
         documents at any time received by Debtor, and promptly deliver same
         to Secured Party, unless Secured Party at its option (which may be
         evidenced only by a writing signed by Secured Party stating that
         Secured Party elects to permit Debtor to so retain) permits Debtor to
         retain the same, but any chattel paper, instruments, Collateral
         Notes, or documents so retained shall be marked to state that they
         are assigned to Secured Party; each such instrument shall be endorsed
         to the order of Secured Party (but the failure of same to be so
         marked or endorsed shall not impair the Security Interest thereon).

                  (f)      Further Assurances. At Debtor's expense and Secured
         Party's request, before or after a Default or Potential Default, (i)
         file or cause to be filed such applications and take such other
         actions as Secured Party may request to obtain the consent or
         approval of any Governmental Authority to Secured Party's rights
         hereunder, including, without limitation, the right to sell all the
         Collateral upon a Default or Potential Default without additional
         consent or approval from such Governmental Authority (and, because
         Debtor agrees that Secured Party's remedies at Law for failure of
         Debtor to comply with this provision would be inadequate and that
         such failure would not be adequately compensable in damages, Debtor
         agrees that its covenants in this provision may be specifically
         enforced); (ii) from time to time promptly execute and deliver to
         Secured Party all such other assignments, certificates, supplemental
         documents, and financing statements, and do all other acts or things
         as Secured Party may reasonably request in order to more fully
         create, evidence, perfect, continue, and preserve the priority of the
         Security Interest; and (iii) pay all filing fees in connection with
         any financing, continuation, or termination statement or other
         instrument with respect to the Security Interests, including, without
         limitation, any filing fee required in connection with any procedure
         hereafter developed for the recordation or registration of liens or
         security interests in FCC Licenses or PUC Certificates.

                  (g)      Estoppel and Other Agreements and Matters. Either
         (upon request of Secured Party in its sole judgment without requiring
         approval of any other Lender) (i) use commercially reasonable efforts
         to cause the landlord or lessor for each location where any of its
         inventory or equipment is maintained to execute and deliver to
         Secured Party an estoppel and subordination agreement in such form as
         may be reasonably acceptable to Secured Party and its counsel, or
         (ii) deliver to Secured Party a legal opinion or other evidence (in
         each case that is reasonably satisfactory to Secured Party and its
         counsel) that neither the applicable lease nor the Laws of the
         jurisdiction in which that location is situated provide for
         contractual, common law, or statutory landlord's Liens that is senior
         to or pari passu with the Security Interest.

                  (h)      Impairment of Collateral. Not use any of the
         Collateral, or permit the same to be used, for any unlawful purpose,
         in any manner that is reasonably likely to adversely impair the value
         or usefulness of the Collateral, or in any manner inconsistent with
         the provisions or requirements of any policy of insurance thereon nor
         affix or install any accessories, equipment, or device on the
         Collateral or on any component thereof if such addition will impair
         the original intended function or use of the Collateral or such
         component.

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                  (i)      Modifications to Agreements. Not modify or
         substitute, or permit the modification or substitution of, any
         Collateral Note or any document evidencing the Collateral Note
         Security or contract to which any of the Collateral which is accounts
         relates, nor extend or grant indulgences regarding any account which
         is Collateral, other than such modifications or indulgences as are
         reasonable and customary in the industry in which Debtor is engaged.

                  (j)      Partnerships and Partnership Interests. (i)
         Promptly perform, observe, and otherwise comply with each and every
         material covenant, agreement, requirement, and condition set forth in
         the contracts and agreements creating or relating to any Partnership;
         (ii) do or cause to be done all things necessary or appropriate to
         keep the Partnerships in full force and effect and the rights of
         Debtor and Secured Party thereunder unimpaired; (iii) not consent to
         any Partnership selling, leasing, or disposing of substantially all
         of its assets in a single transaction or a series of transactions,
         except to Debtor or any other Subsidiary or to Borrower; (iv) notify
         Secured Party of the occurrence of any default under any material
         contract or agreement creating or relating to the Partnerships; and
         not consent to the amendment, modification, surrender, impairment,
         forfeiture, cancellation, dissolution, or termination of any
         Partnership, or material agreement relating thereto; (v) not
         transfer, sell, or assign any of the Partnership Interests or any
         part thereof, except to Debtor or any other Subsidiary or to
         Borrower; (vi) cause each Partnership to refrain from granting any
         partnership interests in addition to or in substitution for the
         Partnership Interests granted by the Partnerships, except to Debtor;
         (vii) pledge hereunder, immediately upon Debtor's acquisition
         (directly or indirectly) thereof, any and all additional Partnership
         Interests of any Partnership granted to Debtor; and (viii) take any
         action necessary, required, or requested by Secured Party to allow
         Secured Party to fully enforce its Security Interest in the
         Partnership Interests, including, without limitation, the filing of
         any claims with any court, liquidator, trustee, custodian, receiver,
         or other like person or party.

         7.       DEFAULT; REMEDIES. If a Default or a Potential Default
exists, Secured Party may, at its election (but subject to the terms and
conditions of the Credit Agreement), exercise any and all rights available to
a secured party under the UCC, in addition to any and all other rights
afforded by the Loan Documents, at Law, in equity, or otherwise, including,
without limitation, (a) requiring Debtor to assemble all or part of the
Collateral and make it available to Secured Party at a place to be designated
by Secured Party which is reasonably convenient to Debtor and Secured Party,
(b) surrendering any policies of insurance on all or part of the Collateral
and receiving and applying the unearned premiums as a credit on the Digex
Obligation, and (c) applying by appropriate judicial proceedings for
appointment of a receiver for all or part of the Collateral (and Debtor hereby
consents to any such appointment), and (d) applying to the Digex Obligation
any cash held by Secured Party under this Security Agreement, including,
without limitation, any cash in the Cash Collateral Account. Notwithstanding
the foregoing, Secured Party will not exercise any remedies against the assets
of Debtor unless it has given at least ten days written notification to Debtor
and to the FCC, to the extent such notice is required under 47 C.F.R.
22.937(f).

                  (a)      Notice. Reasonable notification of the time and
         place of any public sale of the Collateral, or reasonable
         notification of the time after which any private sale or other
         intended disposition of the Collateral is to be made, shall be sent
         to Debtor and to any other Person entitled to notice under the UCC;
         provided, that if any of the Collateral threatens to decline speedily
         in value or is of the type customarily sold on a recognized market,
         Secured Party may sell or otherwise dispose of the Collateral without
         notification, advertisement, or other notice of any kind. It is
         agreed that notice sent or given not less than ten (10) Business Days
         prior to the taking of the action to which the notice relates is
         reasonable notification and notice for the purposes of this
         subparagraph.

                  (b)      Application of Proceeds. Secured Party shall apply
         the proceeds of any sale or other disposition of the Collateral under
         this PARAGRAPH 7 in the following order: first, to the payment of all
         expenses incurred in retaking, holding, and preparing any of the
         Collateral for sale(s) or other

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         disposition, in arranging for such sale(s) or other disposition, and
         in actually selling or disposing of the same (all of which are part
         of the Obligation); and second, toward repayment of amounts expended
         by Secured Party under PARAGRAPH 8. Any surplus remaining shall be
         delivered to Debtor or as a court of competent jurisdiction may
         direct. If the proceeds are insufficient to pay the Digex Obligation
         in full, Debtor shall remain liable for any deficiency.

         8.       OTHER RIGHTS OF SECURED PARTY.

                  (a)      Performance. If Debtor fails to keep the Collateral
         in good repair, working order, and condition, as required in this
         Security Agreement, or fails to pay when due all Taxes on any of the
         Collateral in the manner required by the Loan Documents, or fails to
         preserve the priority of the Security Interest in any of the
         Collateral, or fails to keep the Collateral insured as required by
         this Security Agreement, or otherwise fails to perform any of its
         obligations under the Loan Documents with respect to the Collateral,
         then Secured Party may, at its option, but without being required to
         do so, make such repairs, pay such Taxes, prosecute or defend any
         suits in relation to the Collateral, or insure and keep insured the
         Collateral in any amount deemed appropriate by Secured Party, or take
         all other action which Debtor is required, but has failed or refused,
         to take under the Loan Documents. Any sum which may be expended or
         paid by Secured Party under this subparagraph (including, without
         limitation, court costs and attorneys' fees) shall bear interest from
         the dates of expenditure or payment at the Default Rate until paid
         and, together with such interest, shall be payable by Debtor to
         Secured Party upon demand and shall be part of the Obligation.

                  (b)      Collection. If a Default or Potential Default
         exists and upon notice from Secured Party, each Obligor with respect
         to any payments on any of the Collateral (including, without
         limitation, dividends and other distributions with respect to
         securities, payments on Collateral Notes, or insurance proceeds
         payable by reason of loss or damage to any of the Collateral) is
         hereby authorized and directed by Debtor to make payment directly to
         Secured Party, regardless of whether Debtor was previously making
         collections thereon. Subject to PARAGRAPH 8(e) hereof, until such
         notice is given, Debtor is authorized to retain and expend all
         payments made on Collateral. If a Default or Potential Default
         exists, Secured Party shall have the right in its own name or in the
         name of Debtor to compromise or extend time of payment with respect
         to all or any portion of the Collateral for such amounts and upon
         such terms as Secured Party may determine; to demand, collect,
         receive, receipt for, sue for, compound, and give acquittances for
         any and all amounts due or to become due with respect to Collateral;
         to take control of cash and other proceeds of any Collateral; to
         endorse the name of Debtor on any notes, acceptances, checks, drafts,
         money orders, or other evidences of payment on Collateral that may
         come into the possession of Secured Party; to sign the name of Debtor
         on any invoice or bill of lading relating to any Collateral, on any
         drafts against Obligors or other Persons making payment with respect
         to Collateral, on assignments and verifications of accounts or other
         Collateral and on notices to Obligors making payment with respect to
         Collateral; to send requests for verification of obligations to any
         Obligor; and to do all other acts and things necessary to carry out
         the intent of this Security Agreement. If a Default or Potential
         Default exists and any Obligor fails or refuses to make payment on
         any Collateral when due, Secured Party is authorized, in its sole
         discretion, either in its own name or in the name of Debtor, to take
         such action as Secured Party shall deem appropriate for the
         collection of any amounts owed with respect to Collateral or upon
         which a delinquency exists. Regardless of any other provision hereof,
         however, Secured Party shall never be liable for its failure to
         collect, or for its failure to exercise diligence in the collection
         of, any amounts owed with respect to Collateral, nor shall it be
         under any duty whatsoever to anyone except Debtor to account for
         funds that it shall actually receive hereunder. Without limiting the
         generality of the foregoing, Secured Party shall have no
         responsibility for ascertaining any maturities, calls, conversions,
         exchanges, offers, tenders, or similar matters relating to any
         Collateral, or for informing

                                      9

<PAGE>   10

         Debtor with respect to any of such matters (irrespective of whether
         Secured Party actually has, or may be deemed to have, knowledge
         thereof). The receipt of Secured Party to any Obligor shall be a full
         and complete release, discharge, and acquittance to such Obligor, to
         the extent of any amount so paid to Secured Party.

                  (c)      Use and Operation of Collateral. Should any
         Collateral come into the possession of Secured Party, Secured Party
         may use or operate such Collateral for the purpose of preserving it
         or its value pursuant to the order of a court of appropriate
         jurisdiction or in accordance with any other rights held by Secured
         Party in respect of such Collateral. Debtor covenants to promptly
         reimburse and pay to Secured Party, at Secured Party's request, the
         amount of all reasonable expenses (including, without limitation, the
         cost of any insurance and payment of Taxes or other charges) incurred
         by Secured Party in connection with its custody and preservation of
         Collateral, and all such expenses, costs, Taxes, and other charges
         shall bear interest at the Default Rate until repaid and, together
         with such interest, shall be payable by Debtor to Secured Party upon
         demand and shall become part of the Obligation. However, the risk of
         accidental loss or damage to, or diminution in value of, Collateral
         is on Debtor, and Secured Party shall have no liability whatever for
         failure to obtain or maintain insurance, nor to determine whether any
         insurance ever in force is adequate as to amount or as to the risks
         insured. With respect to Collateral that is in the possession of
         Secured Party, Secured Party shall have no duty to fix or preserve
         rights against prior parties to such Collateral and shall never be
         liable for any failure to use diligence to collect any amount payable
         in respect of such Collateral, but shall be liable only to account to
         Debtor for what it may actually collect or receive thereon. The
         provisions of this subparagraph are applicable whether or not a
         Default exists.

                  (d)      Power of Attorney. Debtor hereby irrevocably
         constitutes and appoints Secured Party as Debtor's attorney-in-fact,
         with full irrevocable power and authority in the place and stead of
         Debtor and in the name of Debtor, Secured Party, Lenders, or
         otherwise, from time to time in Secured Party's discretion, for the
         sole purpose of carrying out the terms of this Security Agreement
         and, to the extent permitted by applicable Law, to take any action
         and to execute any document and instrument which Secured Party may
         deem necessary or advisable to accomplish the following when a
         Default exists:

                           (x)      to receive, endorse, and collect any
                  drafts or other instruments or documents in connection with
                  CLAUSE (b) above and this CLAUSE (d);

                           (y)      to use the Patents and Trademarks or to
                  grant or issue any exclusive or non-exclusive license under
                  the Patents and Trademarks to anyone else, and to perform
                  any act necessary for the Secured Party to assign, pledge,
                  convey, or otherwise transfer title in or dispose of the
                  Patents and Trademarks to any other Person; and

                           (z)      to execute on behalf of Debtor any
                  continuation statement with respect to the Security
                  Interests created hereby, and to do any and all acts and
                  things to protect and preserve the Collateral, including,
                  without limitation, the protection and prosecution of all
                  rights included in the Collateral.

                  (e)      Purchase Money Collateral. To the extent that
         Secured Party or any Lender has advanced or will advance funds to or
         for the account of Debtor to enable Debtor to purchase or otherwise
         acquire rights in Collateral, Secured Party or such Lender, at its
         option, may pay such funds (i) directly to the Person from whom
         Debtor will make such purchase or acquire such rights, or (ii) to
         Debtor, in which case Debtor covenants to promptly pay the same to
         such Person, and forthwith furnish to Secured Party evidence
         satisfactory to Secured Party that such payment has been made from
         the funds so provided.

                                      10

<PAGE>   11

                  (f)      Subrogation. If any of the Obligation is given in
         renewal or extension or applied toward the payment of indebtedness
         secured by any Lien, Secured Party shall be, and is hereby,
         subrogated to all of the rights, titles, interests, and Liens
         securing the indebtedness so renewed, extended, or paid.

                  (g)      Indemnification. Debtor hereby assumes all
         liability for the Collateral, for the Security Interest, and for any
         use, possession, maintenance, and management of, all or any of the
         Collateral, including, without limitation, any Taxes arising as a
         result of, or in connection with, the transactions contemplated
         herein, and agrees to assume liability for, and to indemnify and hold
         Secured Party and each Lender harmless from and against, any and all
         claims, causes of action, or liability, for injuries to or deaths of
         Persons and damage to property, howsoever arising from or incident to
         such use, possession, maintenance, and management, whether such
         Persons be agents or employees of Debtor or of third parties, or such
         damage be to property of Debtor or of others. Debtor agrees to
         indemnify, save, and hold Secured Party and each Lender harmless from
         and against, and covenants to defend Secured Party and each Lender
         against, any and all losses, damages, claims, costs, penalties,
         liabilities, and expenses (collectively, "CLAIMS"), including,
         without limitation, court costs and attorneys' fees, AND ANY OF THE
         FOREGOING ARISING FROM THE NEGLIGENCE OF SECURED PARTY OR ANY LENDER,
         OR ANY OF THEIR RESPECTIVE OFFICERS, EMPLOYEES, AGENTS, ADVISORS,
         EMPLOYEES, OR REPRESENTATIVES, howsoever arising or incurred because
         of, incident to, or with respect to Collateral or any use,
         possession, maintenance, or management thereof; provided, however,
         that the indemnity set forth in this PARAGRAPH 8(g) will not apply to
         Claims caused by the gross negligence or willful misconduct of
         Secured Party or any Lender.

         9.       ACKNOWLEDGMENT OF REGULATORY CONSIDERATIONS

                  (a)      No Prohibited Transfers. It is hereby acknowledged
         that assignment or transfer of control of the FCC Licenses without
         the prior approval of the FCC may constitute a prohibited transfer in
         violation of FCC rules and regulations. Similarly, assignments or
         transfer of control over certifications or authorizations issued by
         state PUC's ("PUC CERTIFICATES") may require approval or
         notification, as may certain other transactions. Secured Party agrees
         that exercise of its rights hereunder, including, but not limited to,
         assignment or transfer of FCC Licenses or PUC Certificates upon the
         occurrence of a Default or Potential Default, shall be effected only
         after obtaining any necessary approvals for such exercise.

                  (b)      Actions by Debtor. If counsel to Secured Party
         reasonably determines that the consent of the FCC or a state PUC is
         required in connection with any of the actions which may be taken by
         Secured Party on behalf of the Lenders in the exercise of their
         rights hereunder or under the Loan Documents, then Debtor, at its
         sole cost and expense, agrees to use its best efforts to secure such
         consent and to cooperate with Secured Party and Lenders in any
         actions commenced by Secured Party to secure such consent. In such
         case Debtor shall retain control of its respective FCC Licenses and
         PUC Certificates until the FCC and each such state PUC's shall have
         granted their consent to the transfer of the FCC Licenses and related
         permits and the PUC Certificates. Upon the occurrence and during the
         continuation of a Default or Potential Default, Debtor shall promptly
         execute or cause the execution of all applications, certificates,
         instruments, and other documents and papers that the Secured Party
         may be required to file in order to obtain any necessary governmental
         consent, approval, or authorization, and if Debtor fails or refuses
         to execute such documents, then, on the order of any court of
         competent jurisdiction, the Clerk of the Court with jurisdiction may
         execute such documents on behalf of Debtor. In addition, Debtor shall
         execute such applications and other documents and will take such
         other action as may be required in order for Secured Party to obtain
         from the FCC consent

                                      11

<PAGE>   12

         to operate the system, through a receiver or otherwise, during the
         time the Secured Party seeks to obtain a purchaser for the System and
         to submit any sale of the System to the FCC or state PUC's for
         approval. Debtor recognizes that FCC Licenses, PUC Certificates,
         franchises, and other similar agreements or authorizations are unique
         assets which (or the control of which) may have to be transferred in
         order for the Lenders adequately to realize the value of their
         Security Interests. Debtor further recognizes that a violation of
         this covenant would result in irreparable harm to Lenders for which
         monetary damages are not readily ascertainable and which might not
         fully compensate such Lenders. Therefore, in addition to any other
         remedy which may be available to the Lenders, at Law or in equity,
         Secured Party on behalf of Lenders shall have the remedy of specific
         performance of the provisions of this subsection.

                  (c)      FCC/PUC Approval. Notwithstanding anything to the
         contrary contained in the Security Agreement, Secured Party will not
         take any action pursuant to this Security Agreement or any of the
         documents executed pursuant hereto which, either because it would
         constitute an assignment or transfer of control of an FCC License or
         PUC Certificate or otherwise, would require under then-existing Law
         (including the written rules and regulations promulgated by the FCC
         or such other regulatory authority with jurisdiction) the prior
         approval of the FCC or such other regulatory authority with
         jurisdiction, without first obtaining such approval. Debtor agrees to
         take or cause to be taken, any action which Secured Party may
         reasonably request in order to obtain and enjoy the full rights and
         benefits granted to Secured Party by this Security Agreement and any
         other instruments or agreements executed pursuant hereto, including,
         without limitation, at Debtor's cost and expense, the exercise of its
         best efforts to cooperate in obtaining FCC and any necessary PUC
         approval of any action or transaction contemplated by this Security
         Agreement or any other instrument or agreement executed pursuant
         hereto which is then required by Law.

                  (d)      Subsequent Actions by Debtor. Debtor agrees that
         if, for any reason, the FCC, state PUC or any such other regulatory
         authority with jurisdiction does not approve within a reasonable
         period of time the initial application for approval of the assignment
         or transfer of control of the FCC Licenses or a PUC Certificate, then
         PARAGRAPHS 9(b) and (c) above hereof shall be applicable to any
         subsequent application for assignment or transfer of the FCC Licenses
         or PUC Certificate pursuant to action taken by Secured Party in the
         exercise of its rights hereunder or under the Loan Documents. With
         respect to each subsequent proposed purchaser(s), Debtor agrees to
         execute all such applications and other documents and take all such
         other action as may be reasonably requested by Secured Party at any
         time and from time to time in order to obtain the approval by the FCC
         or any other regulatory authorities. Exercise by Secured Party of the
         right to such cooperation shall not be exhausted by the initial or
         any subsequent exercise thereof.

         10.      MISCELLANEOUS.

                  (a)      Continuing Security Interest. This Security
         Agreement creates a continuing security interest in the Collateral
         and shall (i) remain in full force and effect until the termination
         of the obligations of the Lenders to fund Borrowings under the Credit
         Agreement, the payment in full of the Obligation, and the expiration
         of all Financial Hedges or until payment in full of the Digex
         Obligation; (ii) be binding upon Debtor, its successors, and assigns;
         and (iii) inure to the benefit of and be enforceable by the Secured
         Party, Lenders, and their respective successors, transferees, and
         assigns. Without limiting the generality of the foregoing CLAUSE
         (iii), the Secured Party and Lenders may assign or otherwise transfer
         any of their respective rights under this agreement to any other
         Person in accordance with the terms and provisions of SECTION 13.13
         of the Credit Agreement, and to the extent of such assignment or
         transfer such Person shall thereupon become vested with all the
         rights and benefits in respect thereof granted herein or otherwise to
         the Secured Party or the Lenders, as the case

                                      12

<PAGE>   13

         may be. Upon payment in full of the Obligation, the termination of
         the commitment of Lenders to extend credit, and the expiration of all
         Financial Hedges or upon payment in full of the Digex Obligation,
         Debtor shall be entitled to the return, upon its request and at its
         expense, of such of the Collateral as shall not have been sold or
         otherwise applied pursuant to the terms hereof.

                  (b)      Reference to Miscellaneous Provisions. This
         Security Agreement is one of the "Loan Documents" referred to in the
         Credit Agreement, and all provisions relating to Loan Documents set
         forth in SECTION 13 of the Credit Agreement, other than the
         provisions set forth in SECTION 13.7, are incorporated herein by
         reference, the same as if set forth herein verbatim.

                  (c)      Term. Upon full and final payment and performance
         of the Obligation or the Digex Obligation, this agreement shall
         thereafter terminate upon receipt by Secured Party of Debtor's
         written notice of such termination; provided that no Obligor, if any,
         on any of the Collateral shall ever be obligated to make inquiry as
         to the termination of this agreement, but shall be fully protected in
         making payment directly to Secured Party until actual notice of such
         total payment of the Obligation is received by such Obligor.

                  (d)      Actions Not Releases. The Security Interest and
         Debtor's obligations and Secured Party's rights hereunder shall not
         be released, diminished, impaired, or adversely affected by the
         occurrence of any one or more of the following events: (i) the taking
         or accepting of any other security or assurance for any or all of the
         Obligation; (ii) any release, surrender, exchange, subordination, or
         loss of any security or assurance at any time existing in connection
         with any or all of the Obligation; (iii) the modification of,
         amendment to, or waiver of compliance with any terms of any of the
         other Loan Documents without the notification or consent of Debtor,
         except as required therein (the right to such notification or consent
         being herein specifically waived by Debtor); (iv) the insolvency,
         bankruptcy, or lack of corporate or trust power of any party at any
         time liable for the payment of any or all of the Obligation, whether
         now existing or hereafter occurring; (v) any renewal, extension, or
         rearrangement of the payment of any or all of the Obligation, either
         with or without notice to or consent of Debtor, or any adjustment,
         indulgence, forbearance, or compromise that may be granted or given
         by Secured Party or any Lender to Debtor; (vi) any neglect, delay,
         omission, failure, or refusal of Secured Party or any Lender to take
         or prosecute any action in connection with any other agreement,
         document, guaranty, or instrument evidencing, securing, or assuring
         the payment of all or any of the Obligation; (vii) any failure of
         Secured Party or any Lender to notify Debtor of any renewal,
         extension, or assignment of the Obligation or any part thereof, or
         the release of any security, or of any other action taken or
         refrained from being taken by Secured Party or any Lender against
         Debtor or any new agreement between or among Secured Party or one or
         more Lenders and Debtor, it being understood that neither Secured
         Party nor any Lender shall be required to give Debtor any notice of
         any kind under any circumstances whatsoever with respect to or in
         connection with the Obligation, including, without limitation, notice
         of acceptance of this Security Agreement or any Collateral ever
         delivered to or for the account of Secured Party hereunder; (viii)
         the illegality, invalidity, or unenforceability of all or any part of
         the Obligation against any party obligated with respect thereto by
         reason of the fact that the Obligation, or the interest paid or
         payable with respect thereto, exceeds the amount permitted by Law,
         the act of creating the Obligation, or any part thereof, is ultra
         vires, or the officers, partners, or trustees creating same acted in
         excess of their authority, or for any other reason; or (ix) if any
         payment by any party obligated with respect thereto is held to
         constitute a preference under applicable Laws or for any other reason
         Secured Party or any Lender is required to refund such payment or pay
         the amount thereof to someone else.

                  (e)      Waivers. Except to the extent expressly otherwise
         provided herein or in other Loan Documents and to the fullest extent
         permitted by applicable Law, Debtor waives (i) any right to

                                      13

<PAGE>   14

         require Secured Party or any Lender to proceed against any other
         Person, to exhaust its rights in Collateral, or to pursue any other
         right which Secured Party or any Lender may have; (ii) with respect
         to the Obligation, presentment and demand for payment, protest,
         notice of protest and nonpayment, and notice of the intention to
         accelerate; and (iii) all rights of marshaling in respect of any and
         all of the Collateral.

                  (f)      Financing Statement. Secured Party shall be
         entitled at any time to file this agreement or a carbon,
         photographic, or other reproduction of this agreement, as a financing
         statement, but the failure of Secured Party to do so shall not impair
         the validity or enforceability of this agreement.

                  (g)      Amendments. This instrument may be amended only by
         an instrument in writing executed jointly by Debtor and Secured
         Party, and supplemented only by documents delivered or to be
         delivered in accordance with the express terms hereof.

                  (h)      Multiple Counterparts. This Security Agreement has
         been executed in a number of identical counterparts, each of which
         shall be deemed an original for all purposes and all of which
         constitute, collectively, one agreement; but, in making proof of this
         Security Agreement, it shall not be necessary to produce or account
         for more than one such counterpart.

                  (i)      Parties Bound; Assignment.  This Security Agreement
         shall be binding on Debtor and Debtor's heirs, legal representatives,
         successors, and assigns and shall inure to the benefit of Secured
         Party and Secured Party's successors and assigns.

                           (i)      Secured Party is the agent for each Lender
                  under the Credit Agreement, the Security Interest and all
                  Rights granted to Secured Party hereunder or in connection
                  herewith are for the ratable benefit of each Lender, and
                  Secured Party may, without the joinder of any Lender,
                  exercise any and all Rights in favor of Secured Party or
                  Lenders hereunder, including, without limitation, conducting
                  any foreclosure sales hereunder, and executing full or
                  partial releases hereof, amendments or modifications hereto,
                  or consents or waivers hereunder. The Rights of each Lender
                  vis-a-vis Secured Party and each other Lender may be subject
                  to one or more separate agreements between or among such
                  parties, but Debtor need not inquire about any such
                  agreement or be subject to any terms thereof unless Debtor
                  specifically joins therein; and consequently, neither Debtor
                  nor Debtor's heirs, personal representatives, successors,
                  and assigns shall be entitled to any benefits or provisions
                  of any such separate agreements or be entitled to rely upon
                  or raise as a defense, in any manner whatsoever, the failure
                  or refusal of any party thereto to comply with the
                  provisions thereof.

                           (ii)     Debtor may not, without the prior written
                  consent of Secured Party, assign any rights, duties, or
                  obligations hereunder.

                  (j)      GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AS
         TO ITS VALIDITY, INTERPRETATION, AND EFFECT IN ACCORDANCE WITH THE
         LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY
         PROVISIONS OF LAW AND EXCEPT IF THE VALIDITY OR PERFECTION OF THE
         SECURITY INTERESTS HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF
         ANY PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAWS OF A JURISDICTION
         OTHER THAN THE STATE OF NEW YORK. UNLESS THE CONTEXT OTHERWISE
         REQUIRES, ALL TERMS USED HEREIN WHICH ARE DEFINED IN THE UNIFORM
         COMMERCIAL CODE AS

                                      14

<PAGE>   15

         ENACTED IN THE STATE OF NEW YORK SHALL HAVE THE MEANINGS THEREIN
         STATED.

                  (k)      Restatement of Existing Security Agreement. The
         parties hereto agree that this Amended and Restated Security
         Agreement is intended to, and hereby does, restate, renew, amend,
         modify, supercede, and replace the existing Security Agreement in its
         entirety, but does not constitute a novation, extinguishment,
         discharge, or release in any way of the security interest granted
         under the existing Security Agreement, which security interest is
         hereby renewed, extended, ratified, and confirmed without lapse or
         interruption of creation, attachment, perfection, or priority.

                    REMAINDER OF PAGE INTENTIONALLY BLANK.
                         SIGNATURE PAGE(S) TO FOLLOW.

                                      15

<PAGE>   16

         EXECUTED as of the day and year first herein set forth.

                         DIGEX, INCORPORATED, as Debtor

                         By       /s/ TIMOTHY M. ADAMS
                                  --------------------------------------------
                                  Name:    Timothy M. Adams
                                           -----------------------------------
                                  Title:   Chief Executive Officer
                                           -----------------------------------

                         BANK OF AMERICA, N.A.,
                         as Secured Party on behalf of Lenders from
                         time to time party to the Credit Agreement

                         By       /s/ CHARLES E. BRINLEY
                                  --------------------------------------------
                                  Name:    Charles E. Brinley
                                           -----------------------------------
                                  Title:   Vice President
                                           -----------------------------------

                                      16

<PAGE>   17

                        ANNEX A TO SECURITY AGREEMENT

                            (Digex, Incorporated)

A.       DEBTOR'S TRADENAMES

         -        Any interest the Debtor may have in the tradenames set out
                  in the Attachment to this Security Agreement marked
                  "Attachment 1".

B.       LOCATION OF BOOKS AND RECORDS

         -        One Digex Plaza, Beltsville, Maryland 20705.

C.       LOCATION OF COLLATERAL

         (i)      One Digex Plaza, Beltsville, MD 20705; and

         (ii)     any locations where the Debtor has an interest in any
                  Collateral in the states listed at "E" below.

D.       LOCATION OF REAL PROPERTY

         -        Any locations where the Debtor has an interest in any leased
                  real estate in California and Maryland.

E.       JURISDICTION FOR FILING FINANCING STATEMENTS

              California                   Maryland
              ----------------------------------------------------
              Florida
              ----------------------------------------------------

                                      17

<PAGE>   18

                        ANNEX B TO SECURITY AGREEMENT

                            (Digex, Incorporated)

A.       INTERCOMPANY PROMISSORY NOTES

         -        None

B.       PARTNERSHIP INTERESTS

         -        None

C.       TRADEMARKS

         -        See "Attachment 2"

D.       PATENTS

         -        None

                                      18

<PAGE>   19

                        ANNEX C TO SECURITY AGREEMENT

                            (Digex, Incorporated)

           DEFAULTS OR EVENTS OF DEFAULT UNDER ANY COLLATERAL NOTE
             OR DOCUMENTS EVIDENCING THE COLLATERAL NOTE SECURITY

                                     None

                                      19

<PAGE>   20

                        ANNEX D TO SECURITY AGREEMENT

                              PLEDGE INSTRUCTION

PARTNERSHIP:
             -------------------------------
                                                     INTEREST OWNER:
                                                                       --------

         BY THIS PLEDGE INSTRUCTION, dated as of __________, 2000, __________
("INTEREST OWNER"), hereby instructs __________ (the "PARTNERSHIP") to register
a pledge in favor of Bank of America, N.A. ("PLEDGEE"), in its capacity as
Administrative Agent for certain Lenders and as Secured Party under that certain
Security Agreement dated as of __________, 2000 (the "SECURITY AGREEMENT"),
against, and a security interest in favor of Pledgee in, all of the Interest
Owner's rights in connection with any partnership interest in the Partnership
now and hereafter owned by the Interest Owner ("PARTNERSHIP INTEREST").

                  -               Pledge Instructions. The Partnership is hereby
                           instructed by the Interest Owner to register all of
                           the Interest Owner's right, title, and interest in
                           and to all of the Interest Owner's Partnership
                           Interest as subject to a pledge and security
                           interest in favor of Pledgee who, upon such
                           registration of pledge, shall become the registered
                           pledgee of the Partnership Interest with all rights
                           incident thereto.

                  -               Initial Transaction Statement. The Partnership
                           is further instructed by the Interest Owner to
                           promptly inform Pledgee of the registration of the
                           pledge by sending the initial transaction statement,
                           in the form attached hereto as EXHIBIT A, to Pledgee
                           at its office located at __________, with a copy to
                           Interest Owner.

                  C.       Partnership Distributions, Accounts, and
Correspondence. The Partnership is further instructed by the Interest Owner to
promptly (i) cause the Partnership to pay and remit to the Pledgee all
proceeds, distributions, and other amounts payable to the Interest Owner upon
demand or otherwise, including, without limitation, upon the termination,
liquidation, and dissolution of the Partnership, (ii) cause the Partnership to
hold all funds in deposit accounts for the benefit of Pledgee, and (iii) cause
the Partnership to provide to the Pledgee all future correspondence,
accountings of distributions, and tax returns of the Partnership.

                  D.       Warranties of the Interest Owner.  The Interest
Owner hereby warrants that (i) the Interest Owner is an appropriate person to
originate this instruction; (ii) the Interest Owner is entitled to effect the
instruction here given; and (iii) the Interest Owner's taxpayer identification
number is ___________________________.

                  IN WITNESS WHEREOF, the Interest Owner has caused this
Pledge Instruction to be duly executed and delivered as of the date first
above written.

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

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

                                      20

<PAGE>   21

                        CONSENT OF THE GENERAL PARTNER

                  The undersigned, __________, in its capacity as general
partner of the Partnership (in such capacity, the "GENERAL PARTNER") hereby
acknowledges and consents to, and agrees to cause to be registered on the books
and records of the Partnership, the Pledge of Partnership Interests, and further
agrees that upon receipt of written notice from the Pledgee, the General Partner
shall (i) cause the Partnership to pay and remit to the Pledgee all
distributions and other amounts payable to the Interest Owner upon demand or
otherwise, including, without limitation, upon the termination, liquidation, and
dissolution of the Partnership, (ii) cause the Partnership to hold all funds in
deposit accounts for the benefit of Pledgee, and (iii) cause the Partnership to
provide to the Pledgee all future correspondence, accountings of distributions,
and tax returns of the Partnership.

                              ------------------------------------------------,
                              as General Partner

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

                                      21

<PAGE>   22

                       EXHIBIT A TO PLEDGE INSTRUCTION

                    FORM OF INITIAL TRANSACTION STATEMENT

         THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEE AS
         OF THE TIME OF ISSUANCE. DELIVERY OF THIS STATEMENT, OF ITSELF,
         CONFERS NO RIGHTS ON THE RECIPIENT.  THIS STATEMENT IS NEITHER A
         NEGOTIABLE INSTRUMENT NOR A SECURITY.

NAME AND ADDRESS OF PLEDGOR
Tax ID or Social Security Number:
                                  ------------------------

Bank of America, N.A.
ADDRESS
Tax ID Number:
              -------------

         On ______________, 2000, the undersigned, ________________________,
in its capacity as managing general partner of ________________________ (in
such capacity, the "MANAGING GENERAL PARTNER") caused the pledge of
________________________ (__________%) of the outstanding partnership
interests in ________________________ ("PARTNERSHIP INTEREST") by
________________________ (the "PLEDGOR"), in favor of Bank of America, N.A. on
behalf of Lenders (the "PLEDGEE") to be registered on the books and records of
the Partnership. Except for the pledge in favor of the Pledgee, to the
knowledge of the undersigned (including, without limitation, any information
which may appear on the undersigned's books and records) there are no liens,
restrictions, or adverse claims to which the Partnership Interest is, or may
be, subject as of the date hereof.

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

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

                                      22<PAGE>   1
                                                                    EXHIBIT 10.4

                         INTERMEDIA COMMUNICATIONS INC.
                               ONE INTERMEDIA WAY
                              TAMPA, FLORIDA 33647

                                                         October 24, 2000

Digex, Incorporated
One Digex Plaza
Beltsville, Maryland  20705

Ladies and Gentlemen:

       Reference is made to the Letter Agreement dated January 24, 2000 (the
"Letter Agreement") regarding the use of the net proceeds of the public offering
("Offering") of Class A common stock of Digex, Incorporated ("Digex") pursuant
to a Registration Statement on Form S-1 (File #333-94857). Capitalized terms
used herein without definition have the meanings set forth for such terms in the
Letter Agreement.

1.     Intermedia Communications Inc. ("Intermedia") and Digex wish to amend
the Letter Agreement by deleting Paragraph 2 of the Letter Agreement and
replacing it with the following:

       (A) From time to time after the date hereof, upon receipt of a request
       from Intermedia, Digex shall deliver to Intermedia the requested portion
       of the net proceeds of the Offering that has not been used by Digex to
       purchase or construct Telecommunications Related Assets (the "Requested
       Amount") in exchange for an equivalent amount of cash of which at least
       70% may be used by Digex for Unrestricted Uses.

       (B) If on October 31, 2000 there remains an amount of the net proceeds of
       the Offering that has not been used by Digex to purchase or construct
       Telecommunications Related Assets and has not been exchanged pursuant to
       the first sentence of this Paragraph 2 (the "Remaining Amount"), Digex
       shall promptly deliver the Remaining Amount to Intermedia in exchange for
       an equivalent amount of cash of which at least 70% may be used by Digex
       for Unrestricted Uses.

       (C) Intermedia shall promptly advise Digex as to the amount of cash
       delivered pursuant to Paragraph 2 which may be used for Unrestricted Uses
       (the "Unrestricted Exchange Cash"), which shall be no less than the
       amounts as provided above.

<PAGE>   2

Digex, Incorporated
Page 2

2.     Additional Representations, Warranties and Covenants of Digex and
Intermedia

       Intermedia represents and warrants to Digex that Digex's use of the
Unrestricted Exchange Cash for Unrestricted Uses will not violate, or result in
a default by Intermedia under, the provisions of the Indenture.

       Digex represents, warrants and covenants to Intermedia that it shall use
the cash received pursuant to Paragraph 2 of the Letter Agreement as amended
hereby, other than the Unrestricted Exchange Cash, only to purchase or construct
Telecommunications Related Assets.

       Except as amended by this letter, the Letter Agreement shall remain in
full force and effect.

       Please confirm your understanding and acceptance of the foregoing by
signing in the space provided below.

                                             Very truly yours,

                                             INTERMEDIA COMMUNICATIONS INC.

                                             By: /s/ DAVID C. RUBERG
                                                 ------------------------------
                                                 Name: David C. Ruberg
                                                 Title: Chairman, President
                                                     & Chief Executive Officer

Agreed and Accepted
this 24th day of October, 2000

DIGEX, INCORPORATED

By: /s/ TIMOTHY M. ADAMS
   -------------------------
   Name: Timothy M. Adams
   Title: Chief Financial Officer

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