Document:

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                                                                 EXHIBIT 10.19.2

                                                                  EXECUTION COPY

                     AMENDED AND RESTATED SECURITY AGREEMENT

                          Dated as of October 29, 2002

                                      from

                         The Grantors referred to herein

                                   as Grantors

                                       to

                        Morgan Stanley & Co. Incorporated

                               as Collateral Agent

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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                         <C>
SECTION 1.  Grant of Security ............................................................   2

SECTION 2.  Security for Obligations .....................................................   8

SECTION 3.  Grantors Remain Liable .......................................................   9

SECTION 4.  Delivery and Control of Security Collateral ..................................   9

SECTION 5.  Delivery and Control of the Account Collateral; Maintaining the Collateral
            Account ......................................................................  10

SECTION 6.  Investing of Amounts in the Collateral Account ...............................  11

SECTION 7.  Release of Amounts ...........................................................  11

SECTION 8.  Representations and Warranties ...............................................  12

SECTION 9.  Further Assurances ...........................................................  16

SECTION 10. As to Equipment and Inventory ................................................  17

SECTION 11. Insurance ....................................................................  18

SECTION 12. Place of Perfection; Records; Collection of Receivables ......................  19

SECTION 13. As to Intellectual Property Collateral .......................................  20

SECTION 14. Voting Rights; Dividends; Etc ................................................  22

SECTION 15. As to the Assigned Agreements ................................................  24

SECTION 16. Payments Under the Assigned Agreements .......................................  25

SECTION 17. Transfers and Other Liens; Additional Shares .................................  25

SECTION 18. Collateral Agent Appointed Attorney-in-Fact ..................................  26

SECTION 19. Collateral Agent May Perform .................................................  26
</TABLE>

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<TABLE>
<S>                                                                                         <C>
SECTION 20. The Collateral Agent's Duties ................................................  26

SECTION 21. Remedies .....................................................................  27

SECTION 22. Indemnity and Expenses .......................................................  31

SECTION 23. Amendments; Waivers; Additional Grantors; Etc ................................  31

SECTION 24. Notices, Etc .................................................................  32

SECTION 25. Continuing Security Interest; Assignments under the Credit Agreement .........  32

SECTION 26. Release; Termination .........................................................  33

SECTION 27. Security Interest Absolute ...................................................  33

SECTION 28. Execution in Counterparts ....................................................  35

SECTION 29. The Mortgage .................................................................  35

SECTION 30. Governing Law ................................................................  35
</TABLE>

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Schedules
Schedule I        -      Pledged Shares and Pledged Debt
Schedule II       -      Assigned Agreements
Schedule III      -      Locations of Equipment and Inventory
Schedule IV       -      Jurisdiction of Organization and Federal Tax
                         Identification Number
Schedule V        -      Patents, Trademarks and Trade Names, Copyrights and
                         Licenses
Schedule VI       -      Securities Accounts

Exhibits

Exhibit A         -      Form of Security Agreement Supplement
Exhibit B         -      Form of Consent and Agreement
Exhibit C         -      Form of Intellectual Property Security Agreement
Exhibit D         -      Form of Intellectual Property Security Agreement
                         Supplement
Exhibit E         -      Form of Securities Account Control Agreement

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                     AMENDED AND RESTATED SECURITY AGREEMENT

          AMENDED AND RESTATED SECURITY AGREEMENT dated as of October 29, 2002,
made by Interstate FiberNet, Inc., a Delaware corporation (the "Borrower"),
ITC/\ Deltacom, Inc. (the "Parent"), the other Persons listed on the signature
pages hereof and the Additional Grantors (as defined in Section 23(b)) (the
Borrower, the Parent, the Persons so listed and the Additional Grantors being,
collectively, the "Grantors") to Morgan Stanley & Co. Incorporated, as
collateral agent (together with any successor collateral agent appointed
pursuant to Article VIII of the Credit Agreement (as hereinafter defined), the
"Collateral Agent") for the Secured Parties (as defined in the Credit
Agreement).

                             PRELIMINARY STATEMENTS:

          1.   The Borrower entered into a Credit Agreement dated as of April 5,
2000 (the "Initial Credit Agreement"), with the Lender Parties and the Agents
named therein, pursuant to which the Grantors executed and delivered to the
Collateral Agent for the Secured Parties a Security Agreement, dated April 5,
2000 (the "Initial Security Agreement").

          2.   In order to restructure, continue, convert and consolidate the
loans advanced to the Borrower by the Lender Parties under the Initial Credit
Agreement, the Lender Parties, the Loan Parties and the Agents have entered into
an Amended and Restated Credit Agreement, dated as of October 29, 2002 (as may
be amended from time to time, the "Credit Agreement"). Any capitalized term used
herein and not otherwise defined has the meaning set forth in the Credit
Agreement.

          3.   Pursuant to the Credit Agreement, each Grantor is entering into
this Agreement in order to grant to the Collateral Agent for the ratable benefit
of the Secured Parties a security interest in all of its personal property and
fixtures now owned or hereafter acquired.

          4.   Each Grantor is the owner of the shares (the "Initial Pledged
Shares") of stock set forth opposite such Grantor's name on and as otherwise
described in Part I of Schedule I hereto and issued by the corporations named
therein and of the indebtedness (the "Initial Pledged Debt") set forth opposite
such Grantors name on and as otherwise described in Part II of Schedule I hereto
and issued by the obligors named therein.

          5.   The Borrower has opened a collateral securities account, Account
No. 27-l701H (the "Collateral Account"), with Morgan Stanley & Co. Incorporated
at its office at 1633 Broadway, 25/th/ Floor, New York, New York 10019, in the
name of the Collateral Agent and

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under the sole control and dominion of the Collateral Agent and subject to the
terms of this Agreement.

          6.   The Parent has security entitlements (the "Pledged Security
Entitlements") with respect to all the financial assets (the "Pledged Financial
Assets") credited from time to time to the Parent's accounts as otherwise
described in Schedule VI (each a "Securities Account" and collectively the
"Securities Accounts").

          7.   It is a condition precedent to the making of Advances by the
Lender Parties under the Credit Agreement and the entry into Secured Hedge
Agreements by the Hedge Banks from time to time that the Grantors shall have
granted the security interest and made the pledge contemplated by this
Agreement.

          8.   Each Grantor will derive substantial direct and indirect benefit
from the transactions contemplated by the Loan Documents.

          9.   Unless otherwise defined in this Agreement or in the Credit
Agreement, terms defined in Article 8 or 9 of the Uniform Commercial Code in
effect in the State of New York ("N.Y. Uniform Commercial Code") and/or in the
Federal Book Entry Regulations (as defined below) are used in this Agreement as
such terms are defined in such Article 8 or 9 and/or the Federal Book Entry
Regulations. The term "Federal Book Entry Regulations" means (a) the federal
regulations contained in Subpart B ("Treasury/Reserve Automated Debt Entry
System (TRADES)") governing book-entry securities consisting of U.S. Treasury
bonds, notes and bills and Subpart D ("Additional Provisions") of 31 C.F.R. Part
357, 31 C.F.R. (S) 357.2, (S) 357.10 through (S) 357.14 and (S) 357.41 through
(S) 357.44 and (b) to the extent substantially identical to the federal
regulations referred to in clause (a) above (as in effect from time to time),
the federal regulations governing other book-entry securities.

          NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender Parties to make Advances and to induce the Hedge Banks to
enter into Secured Hedge Agreements from time to time, each Grantor hereby
agrees with the Collateral Agent for the ratable benefit of the Secured Parties
as follows:

          SECTION 1. Grant of Security. Each Grantor hereby pledges to the
Collateral Agent for the ratable benefit of the Secured Parties (subject to the
terms of this Agreement), and hereby grants to the Collateral Agent for the
ratable benefit of the Secured Parties a security interest in, such Grantor's
right, title and interest in and to the following, in each case as to each type
of property described below, whether now owned or hereafter acquired by such
Grantor, wherever located, and whether now or hereafter existing or arising
(collectively, the "Collateral"):

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          (a)  all equipment in all of its forms, all fixtures and all parts
     thereof and all accessions thereto (any and all such equipment, fixtures,
     parts and accessions being the "Equipment");

          (b)  all inventory in all of its forms including, without limitation,
     (i) all raw materials and work in process therefor, finished goods thereof
     and materials used or consumed in the manufacture, production, preparation
     or shipping thereof, (ii) goods in which such Grantor has an interest in
     mass or a joint or other interest or right of any kind (including, without
     limitation, goods in which such Grantor has an interest or right as
     consignee) and (iii) goods that are returned to or repossessed or stopped
     in transit by such Grantor) and all accessions thereto and products thereof
     and documents therefor (any and all such inventory, accessions, products
     and documents being the "Inventory");

          (c)  all accounts, chattel paper, instruments, deposit accounts,
     general intangibles and other obligations of any kind, whether or not
     arising out of or in connection with the sale or lease of goods or the
     rendering of services and whether or not earned by performance, and all
     rights now or hereafter existing in and to all security agreements, leases
     and other contracts securing or otherwise relating to any such accounts,
     chattel paper, instruments, deposit accounts, general intangibles or
     obligations (any and all such accounts, chattel paper, instruments, deposit
     accounts, general intangibles and obligations, to the extent not referred
     to in clause (d), (e) or (f) below, being the "Receivables");

          (d)  the following (the "Security Collateral"):

               (i)   the Initial Pledged Shares and the certificates, if any,
          representing the Initial Pledged Shares, and all dividends, cash,
          instruments and other property from time to time received, receivable
          or otherwise distributed in respect of or in exchange for any or all
          of the Initial Pledged Shares;

               (ii)  the Initial Pledged Debt and the instruments, if any,
          evidencing the Initial Pledged Debt, and all interest, cash,
          instruments and other property from time to time received, receivable
          or otherwise distributed in respect of or in exchange for any or all
          of the Initial Pledged Debt;

               (iii) all additional shares of stock from time to time acquired
          by such Grantor in any manner (such shares, together with the Initial
          Pledged Shares, being the "Pledged Shares") and the certificates, if
          any, representing such additional shares, and all dividends, cash,
          instruments and other property from

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          time to time received, receivable or otherwise distributed in respect
          of or in exchange for any or all of such shares;

               (iv)  all additional indebtedness from time to time owed to such
          Grantor (such indebtedness, together with the Initial Pledged Debt,
          being the "Pledged Debt") and the instruments, if any, evidencing such
          indebtedness, and all interest, cash, instruments and other property
          from time to time received, receivable or otherwise distributed in
          respect of or in exchange for any or all of such indebtedness;

               (v)   the Securities Accounts, all Pledged Security Entitlements
          with respect to all Pledged Financial Assets from time to time
          credited to the Securities Accounts, and all Pledged Financial Assets,
          and all dividends, interest, cash, instruments and other property from
          time to time received, receivable or otherwise distributed in respect
          of or in exchange for any or all of such Pledged Security Entitlements
          or such Pledged Financial Assets; and

               (vi)  all other investment property (including, without
          limitation, all (A) securities, whether certificated or
          uncertificated, (B) security entitlements, (C) securities accounts,
          (D) commodity contracts and (E) commodity accounts) in which such
          Grantor has now, or acquires from time to time hereafter, any right,
          title or interest in any manner and the certificates or instruments,
          if any, representing or evidencing such investment property, and all
          dividends, interest, distributions, value, cash, instruments and other
          property from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of such
          investment property;

          (e)  each of the agreements listed on Schedule II hereto, each of the
     agreements set forth on the supplemental list of Material Contracts
     delivered by the Parent pursuant to Section 5.01(n)(iii) of the Credit
     Agreement (the "Supplemental List"), and each Hedge Agreement to which such
     Grantor is now or may hereafter become a party, in each case as such
     agreements may be amended, amended and restated, supplemented or otherwise
     modified from time to time (collectively, the "Assigned Agreements"),
     including, without limitation, (i) all rights of such Grantor to receive
     moneys due and to become due under or pursuant to the Assigned Agreements,
     (ii) all rights of such Grantor to receive proceeds of any insurance,
     indemnity, warranty or guaranty with respect to the Assigned Agreements,
     (iii) claims of such Grantor for damages arising out of or for breach of or
     default under the Assigned Agreements and (iv) the right of such Grantor to
     terminate the Assigned Agreements, to perform

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     thereunder and to compel performance and otherwise exercise all remedies
     thereunder (all such Collateral being the "Agreement Collateral");

          (f)  the following (collectively, the "Account Collateral"):

               (i)   the Collateral Account, all financial assets from time to
          time credited to the Collateral Account (including, without
          limitation, all Cash Equivalents from time to time credited to the
          Collateral Account) and all dividends interest, cash, instruments and
          other property from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of such
          financial assets;

               (ii)  all deposit accounts of such Grantor from time to time, all
          funds held therein and all certificates and instruments, if any, from
          time to time representing or evidencing such deposit accounts;

               (iii) all notes, certificates of deposit, deposit accounts,
          checks and other instruments from time to time delivered to or
          otherwise possessed by the Collateral Agent for or on behalf of such
          Grantor, including, without limitation, those delivered or possessed
          in substitution for or in addition to any or all of the then existing
          Account Collateral; and

               (iv)  all interest, dividends, cash, instruments and other
          property from time to time received, receivable or otherwise
          distributed in respect of or in exchange for any or all of the then
          existing Account Collateral; and

          (g)  the following (collectively, the "Intellectual Property
     Collateral"):

               (i)   all United States, international and foreign patents,
          patent applications and statutory invention registrations, including,
          without limitation, the patents and patent applications set forth in
          Schedule V hereto (as such Schedule V may be supplemented from time to
          time by supplements to this Agreement, each such supplement being in
          substantially the form of Exhibit D hereto (an "IP Security Agreement
          Supplement"), executed and delivered by such Grantor to the Collateral
          Agent from time to time), together with all reissues, divisions,
          continuations, continuations-in-part, extensions and reexaminations
          thereof, all inventions therein, all rights therein provided by
          international treaties or conventions and all improvements thereto,
          and all other rights of any kind whatsoever of such Grantor accruing
          thereunder or pertaining thereto (the "Patents");

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               (ii)  all trademarks (including, without limitation, service
          marks), certification marks, collective marks, trade dress, logos,
          domain names, product configurations, trade names, business names,
          corporate names and other source identifiers, whether or not
          registered, whether currently in use or not, including, without
          limitation, all common law rights and registrations and applications
          for registration thereof, including, without limitation, the trademark
          registrations and trademark applications set forth in Schedule V
          hereto (as such Schedule V may be supplemented from time to time by IP
          Security Agreement Supplements executed and delivered by such Grantor
          to the Collateral Agent from time to time), and all other marks
          registered in the U.S. Patent and Trademark Office or in any office or
          agency of any State or Territory of the United States or any foreign
          country (but excluding any United States intent-to-use trademark
          application prior to the filing and acceptance of a Statement of Use
          or an Amendment to allege use in connection therewith to the extent
          that a valid security interest may not be taken in such an
          intent-to-use trademark application under applicable law), and all
          rights therein provided by international treaties or conventions, all
          reissues, extensions and renewals of any of the foregoing, together in
          each case with the goodwill of the business connected therewith and
          symbolized thereby, and all rights corresponding thereto throughout
          the world and all other rights of any kind whatsoever of such Grantor
          accruing thereunder or pertaining thereto (the "Trademarks");

               (iii) all copyrights, copyright applications, copyright
          registrations and like protections in each work of authorship, whether
          statutory or common law, whether published or unpublished, any
          renewals or extensions thereof, all copyrights of works based on,
          incorporated in, derived from, or relating to works covered by such
          copyrights, including, without limitation, the copyright registrations
          and copyright applications set forth in Schedule V hereto (as such
          Schedule V may be supplemented from time to time by IP Security
          Agreement Supplements executed and delivered by such Grantor to the
          Collateral Agent from time to time), together with all rights
          corresponding thereto throughout the world and all other rights of any
          kind whatsoever of such Grantor accruing thereunder or pertaining
          thereto (the "Copyrights");

               (iv)  all confidential and proprietary information, including,
          without limitation, know-how, trade secrets, manufacturing and
          production processes and techniques, inventions, research and
          development information, technical data, financial, marketing and
          business data, pricing and cost information, business and

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          marketing plans and customer and supplier lists and information (the
          "Trade Secrets");

               (v)   all computer software programs and databases (including,
          without limitation, source code, object code and all related
          applications and data files), firmware and documentation and materials
          relating thereto, and all rights with respect to the foregoing,
          together with any and all options, warranties, service contracts,
          program services, test rights, maintenance rights, improvement rights,
          renewal rights and indemnifications and any substitutions,
          replacements, additions or model conversions of any of the foregoing
          (the "Computer Software");

               (vi)  all license agreements, permits, authorizations and
          franchises, whether with respect to the Patents, Trademarks,
          Copyrights, Trade Secrets or Computer Software or with respect to the
          patents, trademarks, copyrights, trade secrets, computer software or
          other proprietary right of any other Person, including, without
          limitation, the license agreements set forth in Schedule V hereto (as
          such Schedule V may be supplemented from time to time by IP Security
          Agreement Supplements executed and delivered by such Grantor to the
          Collateral Agent from time to time), and all income, royalties and
          other payments now or hereafter due and/or payable with respect
          thereto, subject, in each case, to the terms of such license
          agreements, permits, authorizations and franchises (the "Licenses");
          and

               (vii) any and all claims for damages for past, present and future
          infringement, misappropriation or breach with respect to the Patents,
          Trademarks, Copyrights, Trade Secrets, Computer Software or Licenses
          together with the right, but not the obligation, to sue for and
          collect, or otherwise recover, such damages; and

          (h)  all proceeds of any and all of the Collateral (including, without
     limitation, proceeds that constitute property of the types described in
     clauses (a) through (g) of this Section 1 and this clause (h)) and, to the
     extent not otherwise included, all (i) payments under insurance (whether or
     not the Collateral Agent is the loss payee thereof), or any indemnity,
     warranty or guaranty, payable by reason of loss or damage to or otherwise
     with respect to any of the foregoing Collateral and (ii) cash.

          Notwithstanding anything herein to the contrary, the Collateral shall
not include: (i) any general intangibles or other rights arising under any
contracts, instruments, licenses, permits or other documents as to which the
grant of a security interest would constitute a

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violation of a valid and enforceable restriction (whether arising by contract or
under law or governmental regulation) in favor of a third party (including a
governmental authority) on such grant or a violation of law or governmental
regulation, unless and until any required consents shall have been obtained or,
(ii) any equipment and related computer programs, documentation, licenses and
sublicenses, and any additions, attachments and accessions to, and replacements
of, any of the foregoing, any agreements with the supplier of any or all of the
foregoing and purchase orders submitted to such supplier, and any products and
proceeds of any of the foregoing, pledged as collateral to secure the GECC
Capital Lease, the NTFC Capital Lease or any other Capitalized Lease
constituting Surviving Debt as of the Amendment Effective Date.

          SECTION 2. Security for Obligations. This Agreement secures, in the
case of each Grantor, the payment of all Obligations of such Grantor now or
hereafter existing under the Loan Documents, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest, fees, premiums, penalties, indemnifications, contract causes of
action, costs, expenses or otherwise (all such Obligations being the "Secured
Obligations").

          The parties hereto intend to maintain the validity, effectiveness,
enforceability, perfection and priority of the Collateral Documents delivered
under the Initial Credit Agreement (the "Original Security Documents") and this
Agreement is intended, inter alia, to extend the obligations and indebtedness
secured by the security interests and pledges created and affected by the
Original Security Documents, in each case, except as specifically provided
herein including without limitation in the last paragraph of Section 1, without
terminating, limiting, modifying or otherwise affecting the validity,
effectiveness, enforceability, perfection and priority of the security interests
or the pledges created and affected in respect thereof. To the extent that any
security interest or pledge granted pursuant to the Original Security Documents
relates to collateral in which the Grantors have previously granted a security
interest to the Collateral Agent, this Agreement shall, except as specifically
provided herein including without limitation in the last paragraph of Section 1,
confirm the validity, effectiveness, enforceability and continuation of such
security interest or pledge as against the Grantors. All of the terms and
provisions of the Original Security Documents are hereby confirmed and ratified
in all respects, except as specifically modified herein.

          Without limiting the generality of the foregoing, this Agreement
secures, as to each Grantor, the payment of all amounts that constitute part of
the Secured Obligations and would be owed by such Grantor to any Secured Party
under the Loan Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving a Loan Party.

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          SECTION 3. Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor's Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Collateral Agent
of any of the rights hereunder shall not release any Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral and (c) no Secured Party shall have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this
Agreement or any other Loan Document, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.

          SECTION 4. Delivery and Control of Security Collateral

          (a)  All certificates or instruments representing or evidencing
     Security Collateral shall be delivered to and held by or on behalf of the
     Collateral Agent pursuant hereto and shall be in suitable form for transfer
     by delivery, or shall be accompanied by duly executed instruments of
     transfer or assignment in blank, all in form and substance satisfactory to
     the Collateral Agent. The Collateral Agent shall have the right, at any
     time in its discretion and without notice to any Grantor, to transfer to or
     to register in the name of the Collateral Agent or any of its nominees any
     or all of the Security Collateral, subject only to the revocable rights
     specified in Section 14(a). In addition, the Collateral Agent shall have
     the right at any time to exchange certificates or instruments representing
     or evidencing Security Collateral for certificates or instruments of
     smaller or larger denominations. Also, the Collateral Agent shall have the
     right at any time to convert Security Collateral consisting of financial
     assets credited to the securities account to Security Collateral consisting
     of financial assets held directly by the Collateral Agent, and to convert
     Security Collateral consisting of financial assets held directly by the
     Collateral Agent to Security Collateral consisting of financial assets
     credited to the securities account.

          (b)  With respect to any Security Collateral in which any Grantor has
     any right, title or interest and that constitutes an uncertificated
     security, such Grantor will cause the issuer thereof either (i) to register
     the Collateral Agent as the registered owner of such security or (ii) to
     agree in writing with such Grantor and the Collateral Agent that such
     issuer will comply with instructions with respect to such security
     originated by the Collateral Agent without further consent of such Grantor,
     such agreement to be in form and substance satisfactory to the Collateral
     Agent.

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          (c)  With respect to any Security Collateral in which any Grantor has
     any right, title or interest and that constitutes a security entitlement,
     such Grantor will cause the securities intermediary with respect to such
     security entitlement either (i) to identify in its records the Collateral
     Agent as the entitlement holder of such security entitlement against such
     securities intermediary or (ii) to agree in writing with such Grantor and
     the Collateral Agent that such securities intermediary will comply with
     entitlement orders (that is, notifications communicated to such securities
     intermediary directing transfer or redemption of the financial asset to
     which such Grantor has a security entitlement) originated by the Collateral
     Agent without further consent of such Grantor, such agreement to be
     substantially in the form of Exhibit E attached hereto or otherwise in form
     and substance satisfactory to the Collateral Agent (such agreement being a
     "Securities Account Control Agreement").

          (d)  With respect to any Security Collateral in which any Grantor has
     any right, title or interest and that constitutes a commodity contract,
     such Grantor shall cause the commodity intermediary with respect to such
     commodity contract to agree in writing with such Grantor and the Collateral
     Agent that such commodity intermediary will apply any value distributed on
     account of such commodity contract as directed by the Collateral Agent
     without further consent of such Grantor, such agreement to be in form and
     substance satisfactory to the Collateral Agent (such agreement being a
     "Commodity Account Control Agreement", and all such agreements together
     with all Securities Account Control Agreements, being collectively, the
     "Control Agreements").

          (e)  No Grantor will change or add any securities intermediary or
     commodity intermediary that maintains any securities account or commodity
     account in which any of the Collateral is credited or carried, or change or
     add any such securities account or commodity account, in each case without
     first complying with the above provisions of this Section 4 in order to
     perfect the security interest granted hereunder in such Collateral.

          SECTION 5. Delivery and Control of the Account Collateral; Maintaining
the Collateral Account.

          (a)  Promptly after opening an account with a bank or other financial
     institution not subject to an account control agreement, each Grantor shall
     cause the execution and delivery of an account control agreement or cash
     management agreement, as applicable, with such bank or financial
     institution in favor of the Collateral Agent, in form and substance
     reasonably satisfactory to the Collateral Agent.

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          (b)  So long as any Advance or any other Obligation of any Loan Party
     under any Loan Document shall remain unpaid, any Secured Hedge Agreement
     shall be in effect or any Lender shall have any Commitment under the Credit
     Agreement:

               (i)   The Borrower will maintain the Collateral Account with the
          Collateral Agent or another commercial bank acceptable to the
          Collateral Agent and that has entered into a Securities Account
          Control Agreement (the Collateral Agent or any bank with which the
          Collateral Account is maintained being a "Collateral Bank").

               (ii)  It shall be a term and condition of the Collateral Account,
          notwithstanding any term or condition to the contrary in any other
          agreement relating to the Collateral Account, as the case may be, and
          except as otherwise provided by the provisions of Sections 7 and 21,
          that no amount (including interest on Cash Equivalents credited
          thereto) will be paid or released to or for the account of, or
          withdrawn by or for the account of, the Borrower or any other Person
          from the Collateral Account.

               (iii) Each Grantor will deposit in the Collateral Account or pay
          to the Collateral Agent for deposit in the Collateral Account all
          funds contemplated by Section 2.05(b)(ii) of the Credit Agreement in
          accordance with the terms thereof.

          SECTION 6. Investing of Amounts in the Collateral Account. The
Collateral Agent will, subject to the provisions of Sections 7 and 21, from time
to time direct the Collateral Bank to (a) invest amounts received with respect
to the Collateral Account in such Cash Equivalents credited to the Collateral
Account as the Borrower may select and the Collateral Agent may approve and (b)
invest interest paid on the Cash Equivalents referred to in clause (a) above,
and reinvest other proceeds of any such Cash Equivalents that may mature or be
sold, in each case in such Cash Equivalents credited to the Collateral Account
as the Borrower may select and the Collateral Agent may approve. Interest and
proceeds that are not invested or reinvested in Cash Equivalents as provided
above shall be deposited and held in a deposit account with the Collateral Bank
in the name of the Collateral Agent and under the sole control and dominion of
the Collateral Agent, such deposit account to be deemed to constitute part of
the Collateral Account. In addition, the Collateral Agent shall have the right
at any time to direct the Collateral Bank to exchange such Cash Equivalents for
similar Cash Equivalents of smaller or larger determinations, or for other Cash
Equivalents, credited to the Collateral Account.

          SECTION 7. Release of Amounts. So long as no Default shall have
occurred and be continuing, the Collateral Agent will direct the applicable
Collateral Bank to pay and

                                       11

<PAGE>

release to the Borrower or at its order or, at the request of the Borrower, to
the Administrative Agent to be applied to the Obligations of the Borrower under
the Loan Documents, such amount, if any, as is then on deposit in the Collateral
Account, as the case may be, to the extent permitted to be released under the
terms of the Credit Agreement.

          SECTION 8. Representations and Warranties. Each Grantor represents and
warrants as follows:

          (a)  All of the Equipment and Inventory of such Grantor are located at
     the places specified therefor in Schedule III hereto or at such other
     places as such Grantor shall have specified in writing to the Collateral
     Agent (and upon notification to the Collateral Agent of such additional
     places. Schedule III shall be automatically amended to include such other
     places). The jurisdiction of organization of such Grantor is specified in
     Schedule IV hereto, as such Schedule IV may be amended from time to time
     pursuant to Section 12(a). Such Grantor's federal tax identification number
     is set forth opposite such Grantor's name in Schedule IV hereto. All
     Security Collateral consisting of certificated securities and instruments
     has been delivered to the Collateral Agent. None of the Receivables or
     Agreement Collateral is evidenced by a promissory note or other instrument
     that has not been delivered to the Collateral Agent.

          (b)  Such Grantor is the legal and beneficial owner of the Collateral
     of such Grantor free and clear of any Lien, claim, option or right of
     others, except for the security interest created under this Agreement or
     permitted under the Credit Agreement and except for rights of others under
     any License. No effective financing statement or other instrument similar
     in effect covering all or any part of such Collateral or listing such
     Grantor or any trade name of such Grantor as debtor is on file in any
     recording office, except such as may have been filed in favor of the
     Collateral Agent relating to the Loan Documents or as otherwise permitted
     under the Credit Agreement. Such Grantor has the trade names listed on
     Schedule V hereto.

          (c)  Such Grantor has exclusive possession and control of the
     Equipment and Inventory other than Inventory stored at any leased premises
     or warehouse for which a landlord's or warehouseman's agreement, in form
     and substance reasonably satisfactory to the Collateral Agent, is in effect
     and which leased premises or warehouse is so indicated by an asterisk on
     Schedule III hereto, or otherwise specified by such Grantor in writing to
     the Collateral Agent (and upon notification to the Collateral Agent of such
     additional leased premises or warehouse, Schedule III shall be
     automatically amended to include such other leased premises or warehouse
     with an asterix designation).

                                       12

<PAGE>

          (d)  The Pledged Shares pledged by such Grantor hereunder have been
     duly authorized and validly issued and are fully paid and non-assessable.
     The Pledged Debt pledged by such Grantor hereunder has been duly
     authorized, authenticated or issued and delivered, is the legal, valid and
     binding obligation of the issuers thereof, is evidenced by one or more
     promissory notes (which notes have been delivered to the Collateral Agent)
     and is not in default.

          (e)  The Initial Pledged Shares constitute the percentage of the
     issued and outstanding shares of stock of the issuers thereof indicated on
     Schedule I hereto as of the date hereof. The Initial Pledged Debt
     constitutes all of the outstanding indebtedness owed to such Grantor by the
     issuers thereof and is outstanding, as of the date hereof, in the principal
     amount indicated on Schedule I hereto as of the date hereof.

          (f)  All of the investment property owned by such Grantor as of the
     date hereof is listed on Schedule I hereto.

          (g)  The Assigned Agreements to which such Grantor is a party, true
     and complete copies of which (other than the Hedge Agreements) have been
     furnished to each Secured Party, have been duly authorized, executed and
     delivered by all parties thereto, are in full force and effect and are
     binding upon and enforceable against all parties thereto in accordance with
     their terms. There exists no default under any Assigned Agreement to which
     such Grantor is a party by any party thereto. Each Grantor will use its
     best efforts to obtain, (x) on or prior to February 28, 2003, a consent
     from each party to the Assigned Agreements listed on Part A to Schedule II
     hereto to which such Grantor is a party, (y) within thirty days of the
     satisfaction in full of all obligations, if any, of the Loan Parties with
     respect to the Contingent Payments, a consent from each party to the
     Assigned Agreement listed on Part B of Schedule II hereto to which such
     Grantor is a party, and (z) within 120 days of delivery of the Supplemental
     List, a consent from each party to the Assigned Agreements listed therein
     to which such Grantor is a party (provided, that the Collateral Agent may,
     in its sole discretion, waive the requirements of this provision with
     respect to any such Assigned Agreement), all in substantially the form of
     Exhibit B hereto or otherwise in form and substance reasonably satisfactory
     to the Collateral Agent, to the assignment of the Agreement Collateral to
     the Collateral Agent pursuant to this Agreement. Nothing herein shall be
     construed to require any Grantor to give additional consideration of any
     kind under any Assigned Agreement in connection with obtaining of any
     consents under this Section 8(g).

          (h)  All filings and other actions necessary or desirable to perfect
     and protect the security interest in the Collateral of such Grantor created
     under this Agreement have

                                       13

<PAGE>

     been duly made or taken and are in full force and effect, and this
     Agreement creates in favor of the Collateral Agent for the benefit of the
     Secured Parties a valid and, together with such filings and other actions,
     perfected first priority security interest in the Collateral of such
     Grantor, securing the payment of the Secured Obligations.

          (i)  No authorization or approval or other action by, and no notice to
     or filing with, any governmental authority or regulatory body or any other
     third party is required for (i) the grant by such Grantor of the pledge and
     security interest granted hereunder or for the execution, delivery or
     performance of this Agreement by such Grantor, (ii) the perfection or
     maintenance of the pledge and security interest created hereunder
     (including the first priority nature of such pledge or security interest),
     except for the filing of financing statements under the Uniform Commercial
     Code, which financing and continuation statements have been duly filed and
     are in full force and effect, the recordation of the Intellectual Property
     Security Agreements referred to in Section 13(f) with the U.S. Patent and
     Trademark Office and the U.S. Copyright Office, which Agreements have been
     duly recorded and are in full force and effect, and the actions described
     in Section 4 with respect to Security Collateral, which actions have been
     taken and are in full force and effect, or (iii) the exercise by the
     Collateral Agent of its voting or other rights provided for in this
     Agreement or the remedies in respect of the Collateral pursuant to this
     Agreement, except as may be required in connection with the disposition of
     any portion of the Security Collateral by laws affecting the offering and
     sale of securities generally.

          (j)  The Inventory that has been produced or distributed by such
     Grantor has been produced in compliance with all requirements of applicable
     law, including, without limitation, the Fair Labor Standards Act.

          (k)  As to itself and its Intellectual Property Collateral:

               (i)  The rights of such Grantor in or to the Intellectual
          Property Collateral do not conflict with, misappropriate or infringe
          upon the intellectual property rights of any third party, and no claim
          has been asserted that the use of such Intellectual Property
          Collateral does or may infringe upon the intellectual property rights
          of any third party.

               (ii) Such Grantor is the exclusive owner of the entire and
          unencumbered right, title and interest in and to the Intellectual
          Property Collateral and is entitled to use all such Intellectual
          Property Collateral without limitation, subject only to the license
          terns of the Licenses.

                                       14

<PAGE>

               (iii)  The Intellectual Property Collateral set forth on Schedule
          V hereto includes all of the patents, patent applications, trademark
          registrations and applications, copyright registrations and
          applications and Licenses, other than commercial off-the-shelf
          software licenses, owned by such Grantor.

               (iv)   The Intellectual Property Collateral is subsisting and has
          not been adjudged invalid or unenforceable in whole or part and, to
          the best of such Grantor's knowledge, is valid and enforceable. Such
          Grantor is not aware of any uses of any item of Intellectual Property
          Collateral that could be expected to lead to such item becoming
          invalid or unenforceable.

               (v)    Such Grantor has made or performed all commercially
          reasonable filings, recordings and other acts and has paid all
          required fees and taxes to maintain and protect its interest in each
          and every material item of Intellectual Property Collateral in full
          force and effect throughout the world, and to protect and maintain its
          interest therein, including without limitation, any recordation of any
          of its interests in the Patents and Trademarks with the U.S. Patent
          and Trademark Office and in corresponding national and international
          patent offices, and any recordation of any of its interests in the
          Copyrights with the U.S. Copyright Office and in corresponding
          national and international copyright offices. Such Grantor has used
          commercially reasonable statutory notice in connection with its use of
          each material patent, trademark and copyright of the Intellectual
          Property Collateral.

               (vi)   No action, suit, investigation, litigation or proceeding
          has been asserted or is pending or, to such Grantor's knowledge
          threatened against such Grantor (i) based upon or challenging or
          seeking to deny or restrict the use of any of the Intellectual
          Property Collateral or (ii) alleging that any services provided by,
          processes used by, or products manufactured or sold by, such Grantor
          infringe upon or misappropriate any patent, trademark, copyright or
          any other proprietary right of any third party. To the best of such
          Grantor's knowledge, no Person is engaging in any activity that
          infringes upon or misappropriates the Intellectual Property Collateral
          or upon the rights of such Grantor therein. Except as set forth on
          Schedule V hereto, such Grantor has not granted any license, release,
          covenant not to sue, non-assertion assurance or other right to any
          Person with respect to any part of the Intellectual Property
          Collateral. The consummation of the transactions contemplated by the
          Transaction Documents will not result in the termination or impairment
          of any of the Intellectual Property Collateral.

                                       15

<PAGE>

               (vii)   With respect to each License: (A) such License is valid
          and binding and in full force and effect and represents the entire
          agreement between the respective licensor and licensee with respect to
          the subject matter of such License; (B) such License will not cease to
          be valid and binding and in full force and effect on terms identical
          to those currently in effect as a result of the rights and interest
          granted herein, nor will the grant of such rights and interest
          constitute a breach or default under such License or otherwise give
          the licensor or licensee a right to terminate such License; (C) such
          Grantor has not received any notice of termination or cancellation
          under such License; (D) such Grantor has not received any notice of a
          breach or default under such License, which breach or default has not
          been cured; (E) such Grantor has not granted to any other third party
          any rights, adverse or otherwise, under such License (except to the
          extent that sublicensing is permitted); and (F) neither such Grantor
          nor any other party to such License is in breach or default in any
          material respect, and no event has occurred that, with notice or lapse
          of time or both, would constitute such a breach or default or permit
          termination, modification or acceleration under such License.

               (viii)  To the best of such Grantor's acknowledge, (A) none of
          the Trade Secrets of such Grantor has been used, divulged, disclosed
          or appropriated to the detriment of such Grantor for the benefit of
          any other Person other than such Grantor; (B) no employee, independent
          contractor or agent of such Grantor has misappropriated any trade
          secrets of any other Person in the course of the performance of his or
          her duties as an employee, independent contractor or agent of such
          Grantor; and (C) no employee, independent contractor or agent of such
          Grantor is in default or breach of any term of any employment
          agreement, non-disclosure agreement, assignment of inventions
          agreement or similar agreement or contract relating in any way to the
          protection, ownership, development, use or transfer of such Grantor's
          Intellectual Property Collateral.

          SECTION 9. Further Assurances.

          (a)  Each Grantor agrees that from time to time, at the expense of
     such Grantor, such Grantor will promptly execute and deliver all further
     instruments and documents, and take all further action, that may be
     necessary or desirable, or that the Collateral Agent may request, in order
     to perfect and protect any pledge or security interest granted or purported
     to be granted by such Grantor hereunder or to enable the Collateral Agent
     to exercise and enforce its rights and remedies hereunder with respect to
     any Collateral of such Grantor. Without limiting the generality of the
     foregoing, each Grantor will promptly, with respect to Collateral of such
     Grantor: (i) mark conspicuously

                                       16

<PAGE>

     each chattel paper included in Receivables and, at the request of the
     Collateral Agent, each of its records pertaining to such Collateral with a
     legend, in form and substance reasonably satisfactory to the Collateral
     Agent, indicating that such chattel paper or Collateral is subject to the
     security interest granted hereby; (ii) if any such Collateral shall be
     evidenced by a promissory note or other instrument or chattel paper,
     deliver and pledge to the Collateral Agent hereunder such note or
     instrument or chattel paper duly indorsed and accompanied by duly executed
     instruments of transfer or assignment, all in form and substance reasonably
     satisfactory to the Collateral Agent; (iii) file such financing or
     continuation statements, or amendments thereto, and such other instruments
     or notices, as may be necessary or desirable, or as the Collateral Agent
     may request, in order to perfect and preserve the security interest granted
     or purported to be granted by such Grantor hereunder; (iv) deliver and
     pledge to the Collateral Agent for the benefit of the Secured Parties
     certificates representing Security Collateral that constitutes certificated
     securities, accompanied by undated stock or bond powers executed in blank;
     and (v) deliver to the Collateral Agent evidence that all other action that
     the Collateral Agent may deem reasonably necessary or desirable in order to
     perfect and protect the security interest created by such Grantor under
     this Agreement has been taken.

          (b)  Each Grantor hereby authorizes the Collateral Agent to file one
     or more financing or continuation statements, and amendments thereto,
     relating to all or any part of the Collateral of such Grantor. A photocopy
     or other reproduction of this Agreement or any financing statement covering
     the Collateral or any part thereof shall be sufficient as a financing
     statement where permitted by law.

          (c)  Each Grantor will furnish to the Collateral Agent from time to
     time statements and schedules further identifying and describing the
     Collateral of such Grantor and such other reports in connection with such
     Collateral as the Collateral Agent may reasonably request, all in
     reasonable detail.

          SECTION 10. As to Equipment and Inventory.

          (a)  Intentionally omitted.

          (b)  Each Grantor will cause the Equipment of such Grantor to be
     maintained and preserved in good working order and condition, ordinary wear
     and tear excepted, and will forthwith, or in the case of any loss or damage
     to any of such Equipment as soon as practicable after the occurrence
     thereof, make or cause to be made all repairs, replacements and other
     improvements in connection therewith that are necessary or desirable to
     such end. Each Grantor will promptly furnish to the Collateral Agent a

                                       17

<PAGE>

     statement respecting any loss or damage exceeding $500,000 to any of the
     Equipment or Inventory of such Grantor.

          (c)  Each Grantor will pay promptly when due all property and other
     taxes, assessments and governmental charges or levies imposed upon, and all
     claims (including, without limitation, claims for labor, materials and
     supplies) against, the Equipment and Inventory of such Grantor provided,
     however, that such Grantor shall not be required to pay or discharge any
     such tax, assessment, charge or claim that is being contested in good faith
     and by proper proceedings and as to which appropriate reserves are being
     maintained, unless and until any Lien resulting therefrom attaches to its
     property and becomes enforceable against its other creditors.

          SECTION 11. Insurance.

          (a)  Each Grantor will, at its own expense, maintain insurance with
     respect to the Equipment and Inventory (it being understood that Equipment
     and Inventory shall not include fiber optic cables) of such Grantor with
     responsible and reputable insurance companies or associations in such
     amounts, against such risks as is usually carried by companies engaged in
     similar business and owning similar properties in the same general area in
     which such Grantor operates. Each policy of each Grantor for liability
     insurance shall (i) name such Grantor and the Collateral Agent as insured
     parties thereunder (without any representation or warranty by or obligation
     upon the Collateral Agent) as their interests may appear, (ii) contain the
     agreement by the insurer that any loss thereunder shall be payable to the
     Collateral Agent notwithstanding any action, inaction or breach of
     representation or warranty by such Grantor, (iii) provide that there shall
     be no recourse against the Collateral Agent for payment of premiums or
     other amounts with respect thereto and (iv) provide that at least 10 days'
     prior written notice of cancellation or of lapse shall be given to the
     Collateral Agent by the insurer. Each Grantor will, if so requested by the
     Collateral Agent, deliver to the Collateral Agent original or duplicate
     policies of such insurance and, as often as the Collateral Agent may
     reasonably request, a report of a reputable insurance broker with respect
     to such insurance. Further, each Grantor will, at the request of the
     Collateral Agent, duly execute and deliver instruments of assignment of
     such insurance policies to comply with the requirements of Section 10 and
     cause the insurers to acknowledge notice of such assignment.

          (b)  Reimbursement under any liability insurance maintained by any
     Grantor pursuant to this Section 11 may be paid directly to the Person who
     shall have incurred liability covered by such insurance. In case of any
     loss involving damage to Equipment or Inventory when no Event of Default
     shall have occurred and be continuing, the

                                       18

<PAGE>

     applicable Grantor will make or cause to be made the necessary repairs to
     or replacements of such Equipment or Inventory, and any proceeds of
     insurance properly received by or released to such Grantor shall be used by
     such Grantor, except as otherwise required hereunder or by the Credit
     Agreement, to pay or to reimburse for the costs of such repairs or
     replacements.

          (c)  So long as no Event of Default shall have occurred and be
     continuing, all insurance payments received by the Collateral Agent in
     connection with any loss, damage or destruction of any Inventory or
     Equipment will be released, subject to the provisions of Section
     2.05(b)(ii) of the Credit Agreement, by the Collateral Agent to the
     applicable Grantor for the repair, replacement or restoration thereof.

          SECTION 12. Place of Perfection; Records; Collection of Receivables.

          (a)  Each Grantor will keep its jurisdiction of organization, and
     originals of the Assigned Agreements to which such Grantor is a party and
     all originals of all chattel paper that evidence Receivables of such
     Grantor, at the location therefor specified in Section 8(a) or, upon 30
     days' prior written notice to the Collateral Agent, at such other location
     in a jurisdiction where all actions required by Section 9 shall have been
     taken with respect to the Collateral of such Grantor (and, upon the taking
     of such action in such jurisdiction, Schedule IV hereto shall be
     automatically amended to include such other location). Each Grantor will
     hold and preserve its records relating to the Collateral, the Assigned
     Agreements and chattel paper and will permit representatives of the
     Collateral Agent at any time during normal business hours to inspect and
     make abstracts from such records and other documents.

          (b)  Except as otherwise provided in this subsection (b), each Grantor
     will continue to collect, at its own expense, all amounts due or to become
     due to such Grantor under the Receivables. In connection with such
     collections, such Grantor may take such action as such Grantor may deem
     necessary or advisable to enforce collection of the Receivables; provided,
     however, that the Collateral Agent shall have the right at any time, upon
     the occurrence and during the continuance of an Event of Default and upon
     written notice to such Grantor of its intention to do so, to notify the
     Obligors under any Receivables of the assignment of such Receivables to the
     Collateral Agent and to direct such Obligors to make payment of all amounts
     due or to become due to such Grantor thereunder directly to the Collateral
     Agent and, upon such notification and at the expense of such Grantor, to
     enforce collection of any such Receivables, and to adjust, settle or
     compromise the amount or payment thereof, in the same manner and to the
     same extent as such Grantor might have done. After receipt by any Grantor
     of the notice from the

                                       19

<PAGE>

     Collateral Agent referred to in the proviso to the preceding sentence, (i)
     all amounts and proceeds (including instruments) received by such Grantor
     in respect of the Receivables of such Grantor shall be received in trust
     for the benefit of the Collateral Agent hereunder, shall be segregated from
     other funds of such Grantor and shall be forthwith paid over to the
     Collateral Agent in the same form as so received (with any necessary
     indorsement) to be deposited in the Collateral Account and either (A)
     released to such Grantor on the terms set forth in Section 7 so long as no
     Event of Default shall have occurred and be continuing or (B) if any Event
     of Default shall have occurred and be continuing, applied as provided in
     Section 21(b) and (ii) such Grantor will not adjust, settle or compromise
     the amount or payment of any Receivable, release wholly or partly any
     Obligor thereof, or allow any credit or discount thereon. No Grantor will
     permit or consent to the subordination of its right to payment under any of
     the Receivables to any other indebtedness or obligations of the Obligor
     thereof.

          SECTION 13. As to Intellectual Property Collateral.

          (a)  Each Grantor agrees to take, at its expense, all necessary steps
     that such Grantor shall have determined are commercially reasonable in the
     conduct of such Grantor's business with respect to each item of its
     Intellectual Property Collateral, including, without limitation, in the
     U.S. Patent and Trademark Office, the U.S. Copyright Office and any other
     governmental authority, to (i) maintain the validity and enforceability of
     such Intellectual Property Collateral and maintain such Intellectual
     Property Collateral in full force and effect and (ii) pursue the
     registration and maintenance of patent, trademark or copyright registration
     or application now or hereafter included in the Intellectual Property
     Collateral of such Grantor, including, without limitation, the payment of
     required fees and taxes, the filing of responses to office actions issued
     by the U.S. Patent and Trademark Office, the U.S. Copyright Office or other
     governmental authorities, the filing of applications for renewal or
     extension, the filing of affidavits under Sections 8 and 15 of the U.S.
     Trademark Act, the filing of divisional, continuation,
     continuation-in-part, reissue and renewal applications or extensions, the
     payment of maintenance fees and the participation in interference,
     reexamination, opposition, cancellation, infringement and misappropriation
     proceedings. No Grantor shall discontinue use of or otherwise abandon any
     Intellectual Property Collateral, or abandon any right to file an
     application for letters patent, trademark or copyright, unless such Grantor
     shall have previously determined that such use or the pursuit or
     maintenance of such Intellectual Property Collateral is no longer desirable
     in the conduct of such Grantor's business and that the loss thereof would
     not be reasonably likely to have a Material Adverse Effect, in which case,
     with respect to any material item of

                                       20

<PAGE>

     Intellectual Property Collateral so abandoned such Grantor will give
     reasonable notice of any such abandonment to the Collateral Agent.

          (b)  Each Grantor agrees promptly to notify the Collateral Agent if
     such Grantor learns (i) that any material item of the Intellectual Property
     Collateral may have become abandoned, placed in the public domain, invalid
     or unenforceable, or of any adverse determination or development regarding
     such Grantor's ownership of any material item of the Intellectual Property
     Collateral or its right to register the same or to keep and maintain and
     enforce the same, or (ii) of any adverse determination or the institution
     of any proceeding (including, without limitation, the institution of any
     proceeding in the U.S. Patent and Trademark Office or any court) regarding
     any material item of the Intellectual Property Collateral.

          (c)  In the event that any Grantor becomes aware that any material
     item of the Intellectual Property Collateral is being infringed or
     misappropriated by a third party and communicate such awareness to such
     third party, such Grantor shall reasonably notify the Collateral Agent and
     shall take such actions, at its expense, as such Grantor deems reasonable
     and appropriate under the circumstances to protect such Intellectual
     Property Collateral, including, without limitation, suing for infringement
     or misappropriation and for an injunction against such infringement or
     misappropriation.

          (d)  Each Grantor shall use commercially reasonable statutory notice
     in connection with its use of each material item of its Intellectual
     Property Collateral. Except as set forth in Section 13(a), no Grantor shall
     do or permit any act or knowingly omit to do any act whereby any of its
     Intellectual Property Collateral may lapse or become invalid or
     unenforceable or placed in the public domain.

          (e)  Each Grantor shall take all steps which it deems reasonable and
     appropriate under the circumstances to preserve and protect each item of
     its Intellectual Property Collateral, including, without limitation,
     maintaining the quality of any and all products or services offered or
     provided under any of the Trademarks, consistent with the quality of the
     products and services as of the date hereof, and taking all steps necessary
     to ensure that all licensed users of any of the Trademarks use such
     consistent standards of quality.

          (f)  With respect to its Intellectual Property Collateral, each
     Grantor agrees to execute an agreement, in substantially the form set forth
     in Exhibit C hereto (an "Intellectual Property Security Agreement"), for
     recording the security interest granted hereunder to the Collateral Agent
     in such Intellectual Property Collateral with the U.S.

                                       21

<PAGE>

     Patent and Trademark Office, the U.S. Copyright Office and any other
     governmental authorities necessary to perfect the security interest
     hereunder in such Intellectual Property Collateral.

          (g)  Each Grantor agrees that, should it obtain an ownership interest
     in any item of the type set forth in Section 1(g) which is not on the date
     hereof a part of the Intellectual Property Collateral (the "After-Acquired
     Intellectual Property"), (i) the provisions of Section 1 shall
     automatically apply thereto, (ii) any such After-Acquired Intellectual
     Property and, in the case of trademarks, the goodwill of the business
     connected therewith or symbolized thereby, shall automatically become part
     of the Intellectual Property Collateral subject to the terms and conditions
     of this Agreement with respect thereto, (iii) with respect. to only
     material item of After-Acquired Intellectual Property, such Grantor shall
     give written notice thereof to the Collateral Agent in accordance herewith
     every calendar quarter and (iv) with respect to registrations and
     applications for registration of such After-Acquired Intellectual Property
     which are registered or filed with the U.S. Patent and Trademark Office,
     U.S. Copyrights Office or order governmental authorities, such Grantor
     shall execute and deliver to the Collateral Agent an IP Security Agreement
     Supplement covering such After-Acquired Intellectual Property as
     "Additional Collateral" thereunder and as defined therein, and shall record
     such IP Security Agreement Supplement with the U.S. Patent and Trademark
     Office, the U.S. Copyright Office and any other governmental authorities
     necessary to perfect the security interest hereunder in such After-Acquired
     Intellectual Property.

          SECTION 14. Voting Rights; Dividends; Etc.

          (a)  So long as no Event of Default shall have occurred and be
     continuing:

               (i)  Each Grantor shall be entitled to exercise any and all
          voting and other consensual rights pertaining to the Security
          Collateral of such Grantor or any part thereof for any purpose other
          than to originate Entitlement Orders (as defined in any Control
          Agreement) with respect to any securities account or commodity
          account; provided, however, that such Grantor will not exercise or
          refrain from exercising any such right if such action would have a
          material adverse effect on the value of the Security Collateral or any
          part thereof.

               (ii) Each Grantor shall be entitled to receive and retain any and
          all dividends, interest and other distributions paid in respect of the
          Security Collateral of such Grantor if and to the extent that the
          payment thereof is not otherwise

                                       22

<PAGE>

          prohibited by the terms of the Loan Documents; provided, however, that
          any and all:

                     (A)  dividends, interest and other distributions paid or
               payable other than in cash in respect of, and instruments and
               other property received, receivable or otherwise distributed in
               respect of, or in exchange for, any Security Collateral,

                     (B)  dividends and other distributions paid or payable in
               cash in respect of any Security Collateral in connection with a
               partial or total liquidation or dissolution or in connection with
               a reduction of capital, capital surplus or paid-in-surplus, and

                     (C)  cash paid, payable or otherwise distributed in respect
               of principal of, or in redemption of, or in exchange for, any
               Security Collateral,

          shall be, and shall be forthwith delivered to the Collateral Agent to
          hold as Security Collateral and shall, if received by such Grantor, be
          received in trust for the benefit of the Collateral Agent, be
          segregated from the other property or funds of such Grantor and be
          forthwith delivered to the Collateral Agent as Security Collateral in
          the same form as so received (with any necessary indorsement).

               (iii) The Collateral Agent will execute and deliver (or cause to
          be executed and delivered) to each Grantor all such proxies and other
          instruments as such Grantor may reasonably request for the purpose of
          enabling such Grantor to exercise the voting and other rights that it
          is entitled to exercise pursuant to paragraph (i) above and to receive
          the dividends or interest payments that it is authorized to receive
          and-retain pursuant to paragraph (ii) above.

          (b)  Upon the occurrence and during the continuance of an Event of
     Default:

               (i)   All rights of each Grantor (x) to exercise or refrain from
          exercising the voting and other consensual rights that it would
          otherwise be entitled to exercise pursuant to Section 14(a)(i) shall,
          upon notice to such Grantor by the Collateral Agent, cease and (y) to
          receive the dividends, interest and other distributions that it would
          otherwise be authorized to receive and retain pursuant to Section
          14(a)(ii) shall automatically cease, and all such rights shall
          thereupon become vested in the Collateral Agent, which shall thereupon
          have the sole right to exercise or refrain from exercising such voting
          and other consensual rights and

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<PAGE>

          to receive and hold as Security Collateral such dividends, interest
          and other distributions.

               (ii)  All dividends, interest and other distributions that are
          received by any Grantor contrary to the provisions of paragraph (i) of
          this Section 14(b) shall be received in trust for the benefit of the
          Collateral Agent, shall be segregated from other funds of such Grantor
          and shall be forthwith paid over to the Collateral Agent as Security
          Collateral in the same form as so received (with any necessary
          indorsement).

               (iii) The Collateral Agent shall be authorized to send to each
          Securities Intermediary or Commodity Intermediary as defined in and
          under any Control Agreement a Notice of Exclusive Control as defined
          in and under such Control Agreement.

          SECTION 15. As to the Assigned Agreements.

          (a)  Each Grantor will at its expense:

               (i)   perform and observe all terms and provisions of the
          Assigned Agreements to be performed or observed by it, maintain the
          Assigned Agreements to which it is a party in full force and effect,
          enforce the Assigned Agreements to which it is a party in accordance
          with the terms thereof and take all such action to such end as may be
          reasonably requested from time to time by the Collateral Agent except
          where the failure to do so would not have a Material Adverse Effect;
          and

               (ii)  and from time to time (A) furnish to the Collateral Agent
          such information and reports regarding the Assigned Agreements and
          such other Collateral of such Grantor as the Collateral Agent may
          reasonably request and (B) upon request of the Collateral Agent, make
          to each other party to any Assigned Agreement to which it is a party
          such demands and requests for information and reports or for action as
          such Grantor is entitled to make thereunder.

          (b)  Each Grantor agrees that it will not, except to the extent
     otherwise permitted under the Credit Agreement:

               (i)   cancel or terminate any Assigned Agreement to which it is a
          party or consent to or accept any cancellation or termination thereof;

                                       24

<PAGE>

               (ii)  amend, amend and restate, supplement or otherwise modify
          any such Assigned Agreement or give any consent, waiver or approval
          thereunder;

               (iii) waive any default under or breach of any such Assigned
          Agreement; or

               (iv)  take any other action in connection with any such Assigned
          Agreement that would impair the value of the interests or rights of
          such Grantor thereunder or that would impair the interests or rights
          of any Secured Party.

          (c)  Each Grantor hereby consents on its own behalf and on behalf of
     its Subsidiaries to the assignment and pledge to the Collateral Agent for
     benefit of the Secured Parties of each Assigned Agreement to which it is a
     party by any other Grantor hereunder.

          SECTION 16. Payments Under the Assigned Agreements.

          (a)  Each Grantor agrees, and has effectively so instructed each other
     party to each Assigned Agreement to which it is a party, that, upon the
     occurrence and during the continuance of an Event of Default, all payments
     due or to become due under or in connection with such Assigned Agreement
     will be made directly to the Collateral Account.

          (b)  All moneys received or collected pursuant to subsection (a) above
     shall be (i) released to the applicable Grantor so long as no Event of
     Default shall have occurred and be continuing or (ii) if any Event of
     Default shall have occurred and be continuing, applied as provided in
     Section 21(b).

          SECTION 17. Transfers and Other Liens; Additional Shares.

          (a)  Each Grantor agrees that it will not (i) sell, assign or
     otherwise dispose of, or grant any option with respect to, any of the
     Collateral, other than sales, assignments and other dispositions of
     Collateral, non-exclusive licenses granted in the ordinary course of
     business and options relating to Collateral, permitted under the terms of
     the Credit Agreement, or (ii) create or suffer to exist any Lien upon or
     with respect to any of the Collateral of such Grantor except for the
     pledge, assignment and security interest created under this Agreement and
     Liens permitted under the Credit Agreement.

          (b)  Each Grantor agrees that it will (i) cause each issuer of the
     Pledged Shares pledged by such Grantor not to issue any stock or other
     securities in addition to or in

                                       25

<PAGE>

     substitution for the Pledged Shares issued by such issuer, except to such
     Grantor, and (ii) pledge hereunder, immediately upon its acquisition
     (directly or indirectly) thereof, any and all additional shares of stock or
     other securities.

          SECTION 18. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time, upon the occurrence
and during the continuance of an Event of Default, in the Collateral Agent's
discretion, to take any action and to execute any instrument that the Collateral
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation:

          (a)  to obtain and adjust insurance required to be paid to the
     Collateral Agent pursuant to Section 11,

          (b)  to ask for, demand, collect, sue for, recover, compromise,
     receive and give acquittance and receipts for moneys due and to become due
     under or in respect of any of the Collateral,

          (c)  to receive, indorse and collect any drafts or other instruments,
     documents and chattel paper, in connection with clause (a) or (b) above,
     and

          (d)  to file any claims or take any action or institute any
     proceedings that the Collateral Agent may deem necessary or desirable for
     the collection of any of the Collateral or otherwise to enforce compliance
     with the terms and conditions of any Assigned Agreement or the rights of
     the Collateral Agent with respect to any of the Collateral.

          SECTION 19. Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent may, as the
Collateral Agent deems necessary to protect the security interest granted
hereunder in the Collateral or to protect the value thereof, but without any
obligation to do so and without notice, itself perform, or cause performance of,
such agreement, and the expenses of the Collateral Agent incurred in connection
therewith shall be payable by such Grantor under Section 22(b).

          SECTION 20. The Collateral Agent's Duties.

          (a)  The powers conferred on the Collateral Agent hereunder are solely
     to protect the Secured Parties' interest in the Collateral and shall not
     impose any duty upon it to exercise any such powers. Except for the safe
     custody of any Collateral in its

                                       26

<PAGE>

     possession and the accounting for moneys actually received by it hereunder,
     the Collateral Agent shall have no duty as to any Collateral, as to
     ascertaining or taking action with respect to calls, conversions,
     exchanges, maturities, tenders or other matters relative to any Collateral,
     whether or not any Secured Party has or is deemed to have knowledge of such
     matters, or as to the taking of any necessary steps to preserve rights
     against any parties or any other rights pertaining to any Collateral. The
     Collateral Agent shall be deemed to have exercised reasonable care in the
     custody and preservation of any Collateral in its possession if such
     Collateral is accorded treatment substantially equal to that which it
     accords its own property.

          (b)  Anything contained herein to the contrary notwithstanding, the
     Collateral Agent may from time to time, when the Collateral Agent deems it
     to be necessary, appoint one or more subagents (each a "Subagent") for the
     Collateral Agent hereunder with respect to all or any part of the
     Collateral. In the event that the Collateral Agent so appoints any Subagent
     with respect to any Collateral, (i) the assignment and pledge of such
     Collateral and the security interest granted in such Collateral by each
     Grantor hereunder shall be deemed for purposes of this Agreement to have
     been made to such Subagent, in addition to the Collateral Agent, for the
     ratable benefit of the Secured Parties, as security for the Secured
     Obligations of such Grantor, (ii) such Subagent shall automatically be
     vested, in addition to the Collateral Agent, with all rights, powers,
     privileges, interests and remedies of the Collateral Agent hereunder with
     respect to such Collateral, and (iii) the term "Collateral Agent," when
     used herein in relation to any rights, powers, privileges, interests and
     remedies of the Collateral Agent with respect to such Collateral, shall
     include such Subagent; provided, however, that no such Subagent shall be
     authorized to take any action with respect to any such Collateral unless
     and except to the extent expressly authorized in writing by the Collateral
     Agent.

          SECTION 21. Remedies. If any Event of Default shall have occurred and
be continuing:

          (a)  The Collateral Agent may exercise in respect of the Collateral,
     in addition to other rights and remedies provided for herein or otherwise
     available to it, all the rights and remedies of a secured party upon
     default under the N.Y. Uniform Commercial Code (whether or not the N.Y.
     Uniform Commercial Code applies to the affected Collateral) and also may:
     (i) require each Grantor to, and each Grantor hereby agrees that it will at
     its expense and upon request of the Collateral Agent forthwith, assemble
     all or part of the Collateral as directed by the Collateral Agent and make
     it available to the Collateral Agent at a place and time to be designated
     by the Collateral Agent that is reasonably convenient. to both parties;
     (ii) without notice except as specified below, sell the

                                       27

<PAGE>

     Collateral or any part thereof in one or more parcels, at public or private
     sale, at any of the Collateral Agent's offices or elsewhere, for cash, on
     credit or for future delivery, and upon such other terms as the Collateral
     Agent may deem commercially reasonable; (iii) occupy any premises owned or
     leased by any of the Grantors where the Collateral or any part thereof is
     assembled or located for a reasonable period in order to effectuate its
     rights and remedies hereunder or under law, without obligation to such
     Grantor in respect of such occupation; and (iv) exercise any and all rights
     and remedies of any of the Grantors under or in connection with the
     Assigned Agreements, the Receivables or otherwise in respect of the
     Collateral, including, without limitation, any and all rights of such
     Grantor to demand or otherwise require payment of any amount under, or
     performance of any provision of the Assigned Agreements, the Receivables.
     Each Grantor agrees that, to the extent notice of sale shall be required by
     law, at least ten days' notice to such Grantor of the time and place of any
     public sale or the time after which any private sale is to be made shall
     constitute reasonable notification. The Collateral Agent shall not be
     obligated to make any sale of Collateral regardless of notice of sale
     having been given. The Collateral Agent may adjourn any public or private
     sale from time to time by announcement at the time and place fixed
     therefor, and such sale may, without further notice, be made al the time
     and place to which it was so adjourned.

          (b)  Any cash held by or on behalf of the Collateral Agent and all
     cash proceeds received by or on behalf of the Collateral Agent in respect
     of any sale of, collection from, or other realization upon all or any part
     of the Collateral may, in the discretion of the Collateral Agent, be held
     by the Collateral Agent as collateral for, and/or then or at any time
     thereafter applied (after payment of any amounts payable to the Collateral
     Agent pursuant to Section 22), in whole or in part, by the Collateral Agent
     for the ratable benefit of the Secured Parties against, all or any part of
     the Secured Obligations, in the following manner:

               (i)  first, to the Agents for any amounts owing to the Agents
          pursuant to Section 9.04 of the Credit Agreement or otherwise under
          the Loan Documents, ratably in accordance with such respective amounts
          then owing to the Agents; and

               (ii) second, to the Lender Parties and the Hedge Banks,
          respectively, for any amount then owing to them, in their capacities
          as such, under the Loan Documents ratably in accordance with such
          respective amounts then owing to the Lender Parties and the Hedge
          Banks, provided that, for purposes of this Section 21, the amount
          owing to any such Hedge Bank pursuant to any Secured Hedge Agreement
          to which it is a party (other than any amount theretofore accrued and
          unpaid) shall be deemed to be equal to the Agreement Value therefor.

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<PAGE>

          Any surplus of such cash or cash proceeds held by or on the behalf of
the Collateral Agent and remaining after payment in full of all the Secured
Obligations shall be paid over to the applicable Grantor or to whomsoever may be
lawfully entitled to receive such surplus.

          (c)  All payments received by any Grantor under or in connection with
     any Assigned Agreement or otherwise in respect of the Collateral shall be
     (i) received in trust for the benefit of the Collateral Agent, (ii)
     segregated from other funds of such Grantor and (iii) forthwith paid over
     to the Collateral Agent in the same form as so received (with any necessary
     indorsement).

          (d)  The Collateral Agent may, without notice to any Grantor except as
     required by law and at any time or from time to time, charge, set-off and
     otherwise apply all or any part of the Secured Obligations against any
     funds held in the Collateral Account or in any deposit account related
     thereto.

          (e)  In the event of any sale or other disposition of any of the
     Intellectual Property Collateral of any Grantor, the goodwill of the
     business connected with and symbolized by any Trademarks subject to such
     sale or other disposition shall be included therein, and such Grantor shall
     supply to the Collateral Agent or its designee such Grantor's know-how and
     expertise, and documents and things relating to any Intellectual Property
     Collateral subject to such sale or other disposition, and such Grantor's
     customer lists and other records and documents relating to such
     Intellectual Property Collateral and to the manufacture, distribution,
     advertising and sale of products and services of such Grantor.

          (f)  If the Collateral Agent shall determine to exercise its right to
     sell all or any of the Security Collateral of any Grantor pursuant to this
     Section 21, each Grantor agrees that, upon request of the Collateral Agent,
     such Grantor will, at its own expense:

               (i)  execute and deliver, and cause each issuer of such Security
          Collateral contemplated to be sold and the directors and officers
          thereof to execute and deliver, all such instruments and documents,
          and do or cause to be done all such other acts and things, as may be
          necessary or, in the opinion of the Collateral Agent, advisable to
          register such Security Collateral under the provisions of the
          Securities Act of 1933 (as amended from time to time, the "Securities
          Act"), to cause the registration statement relating thereto to become
          effective and to remain effective for such period as prospectuses are
          required by law to be furnished and to make all amendments and
          supplements thereto and to

                                       29

<PAGE>

          the related prospectus that, in the opinion of the Collateral Agent,
          are necessary or advisable, all in conformity with the requirements of
          the Securities Act and the rules and regulations of the Securities and
          Exchange Commission applicable thereto;

               (ii)  use its best efforts to qualify the Security Collateral
          under the state securities or "Blue Sky" laws and to obtain all
          necessary governmental approvals for the sale of such Security
          Collateral, as requested by the Collateral Agent;

               (iii) cause each such issuer of such Security Collateral to make
          available to its security holders, as soon as practicable, an earnings
          statement that will satisfy the provisions of Section 11 (a) of the
          Securities Act;

               (iv)  provide the Collateral Agent with such other information
          and projections as may be necessary or, in the opinion of the
          Collateral Agent, advisable to enable the Collateral Agent to effect
          the sale of such Security Collateral; and

               (v)   do or cause to be done all such other acts and things as
          may be necessary to make such sale of such Security Collateral or any
          part thereof valid and binding and in compliance with applicable law.

          (g)  The Collateral Agent is authorized, in connection with any sale
     of the Security Collateral pursuant to this Section 21, to deliver or
     otherwise disclose to any prospective purchaser of the Security Collateral:
     (i) any registration statement or prospectus, and all supplements and
     amendments thereto, prepared pursuant to subsection (f)(i) above; (ii) any
     information and projections provided to it pursuant to subsection (f)(iv)
     above; and (iii) any other information in its possession relating to such
     Security Collateral.

          (h)  Each Grantor acknowledges the impossibility of ascertaining the
     amount of damages that would be suffered by the Secured Parties by reason
     of the failure by such Grantor to perform any of the covenants contained in
     subsection (f) above and, consequently, agrees that, if such Grantor shall
     fail to perform any of such covenants, it will pay, as liquidated damages
     and not as a penalty, an amount equal to the value of the Security
     Collateral on the date the Collateral Agent shall demand compliance with
     subsection (f) above.

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<PAGE>

          SECTION 22. Indemnity and Expenses.

          (a)  Each Grantor agrees to indemnify, defend, save and hold harmless
     each Secured Party and each of their Affiliates and their respective
     officers, directors, employees, agents and advisors (each, an "Indemnified
     Party") from and against, and shall pay on demand, any and all claims,
     damages, losses, liabilities and expenses (including, without limitation,
     reasonable fees and expenses of counsel) that may be incurred by or
     asserted or awarded against any Indemnified Party, in each case arising out
     of or in connection with or resulting from any claims by third parties
     involving this Agreement (including, without limitation, enforcement of
     this Agreement), except to the extent such claim, damage, loss, liability
     or expense resulted from such Indemnified Party's gross negligence or
     willful misconduct.

          (b)  Each Grantor will upon demand pay to the Collateral Agent the
     amount of any and all reasonable expenses, including, without limitation,
     the reasonable fees and expenses of its counsel and of any experts and
     agents, that the Collateral Agent may incur in connection with (i) the
     administration of this Agreement, (ii) the custody, preservation, use or
     operation of, or the sale of, collection from or other realization upon,
     any of the Collateral of such Grantor, (iii) the exercise or enforcement of
     any of the rights of the Collateral Agent or the other Secured Parties
     hereunder or (iv) the failure by such Grantor to perform or observe any of
     the provisions hereof.

          SECTION 23. Amendments; Waivers; Additional Grantors; Etc.

          (a)  No amendment or waiver of any provision of this Agreement, and no
     consent to any departure by any Grantor herefrom, shall in any event be
     effective unless the same shall be in writing and signed by the Collateral
     Agent, and then such waiver or consent shall be effective only in the
     specific instance and for the specific purpose for which given. No failure
     on the part of the Collateral Agent or any other Secured Party to exercise,
     and no delay in exercising any right hereunder, shall operate as a waiver
     thereof; nor shall any single or partial exercise of any such right
     preclude any other or further exercise thereof or the exercise of any other
     right.

          (b)  Upon the execution and delivery by any Person of a security
     agreement supplement in substantially the form of Exhibit A hereto (each a
     "Security Agreement Supplement"), (i) such Person shall be referred to as
     an "Additional Grantor" and shall be and become a Grantor hereunder and
     each reference in this Agreement and the other Loan Documents to "Grantor"
     shall also mean and be a reference to such Additional Grantor, and (ii) the
     supplemental Schedules I, II, III, IV and V attached to each Security

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<PAGE>

     Agreement Supplement shall be incorporated into and become a part of and
     supplement Schedules I, II, III, IV and V, respectively, hereto, and the
     Collateral Agent may attach such supplemental schedules to such Schedules,
     and each reference to such Schedules shall mean and be a reference to such
     Schedules as supplemented pursuant to each Security Agreement Supplement.

          SECTION 24. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopier or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered
to, in the case of the Borrower or the Collateral Agent, addressed to it at its
address specified in the Credit Agreement and, in the case of each Grantor other
than the Borrower, addressed to it at its address set forth opposite such
Grantor's name on the signature pages hereto or on the signature page to the
Security Agreement Supplement pursuant to which it became a party hereto; or, as
to any party, at such other address as shall be designated by such party in a
written notice to the other parties. All such notices and other communications
shall, when mailed, telegraphed, telecopied or telexed, be effective when
deposited in the mail, delivered to the telegraph company, telecopied or
confirmed by telex answerback, respectively, addressed as aforesaid; except that
notices and other communications to the Collateral Agent shall not be effective
until received by the Collateral Agent. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or of
any Security Agreement Supplement or Schedule hereto shall be effective as
delivery of an original executed counterpart thereof.

          SECTION 25. Continuing Security Interest; Assignments under the Credit
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the latest of (i)
the payment in full in cash of the Secured Obligations, (ii) the Termination
Date and (iii) the termination or expiration of all Secured Hedge Agreements,
(b) be binding upon each Grantor, its successors and assigns and (c) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Secured Parties and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), any Lender
Party may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or
any portion of its Commitment, the Advances owing to it and the Note or Notes,
if any, held by it) to any Eligible Assignee, and such Eligible Assignee shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender Party herein or otherwise, in each case as provided in Section 9.07 of
the Credit Agreement.

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<PAGE>

          SECTION 26. Release; Termination.

          (a)  Upon any sale, lease, transfer or other disposition of any item
     of Collateral of any Grantor in accordance with the terms of the Loan
     Documents (other than sales of Inventory in the ordinary course of
     business), the Collateral Agent will, at such Grantor's expense, execute
     and deliver to such Grantor such documents as such Grantor shall reasonably
     request to evidence the release of such item of Collateral from the
     assignment and security interest granted hereby; provided, however, that
     (i) at the time of such request and such release no Event of Default shall
     have occurred and be continuing, (ii) such Grantor shall have delivered to
     the Collateral Agent, at least ten Business Days prior to the date of the
     proposed release, a written request for release describing the item of
     Collateral and the terms of the sale, lease, transfer or other disposition
     in reasonable detail, including, without limitation, the price thereof and
     any expenses in connection therewith, together with a form of release for
     execution by the Collateral Agent and a certificate of such Grantor to the
     effect that the transaction is in compliance with the Loan Documents and as
     to such other matters as the Collateral Agent may request and (iii) the
     proceeds of any such sale, lease, transferor other disposition required to
     be applied, or any payment to be made in connection therewith, in
     accordance with Section 2.05 of the Credit Agreement shall, to the extent
     so required, be paid or made to the Collateral Agent when and as required
     under Section 2.05 of the Credit Agreement.

          (b)  Upon the latest of (i) the payment in full in cash of the Secured
     Obligations, (ii) the Termination Date and (iii) the termination or
     expiration of all Secured Hedge Agreements, the pledge, assignment and
     security interest granted hereby shall terminate and all rights to the
     Collateral shall revert to the applicable Grantor. Upon any such
     termination, the Collateral Agent will, at the applicable Grantor's
     expense, execute and deliver to such Grantor such documents as such Grantor
     shall reasonably request to evidence such termination.

          SECTION 27. Security Interest Absolute. The obligations of each
Grantor under this Agreement are independent of the Secured Obligations or any
other Obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Grantor to enforce this Agreement, irrespective of whether any
action is brought against such Grantor or any other Loan Party or whether such
Grantor or any other Loan Party is joined in any such action or actions. All
rights of the Collateral Agent and the other Secured Parties and the pledge,
assignment and security interest hereunder, and all obligations of each Grantor
hereunder, shall be irrevocable, absolute and unconditional irrespective of, and
each Grantor hereby irrevocably waives (to the maximum extent permitted

                                       33

<PAGE>

by applicable law) any defenses it may now have or may hereafter acquire in any
way relating to, any or all of the following:

          (a)  any lack of validity or enforceability of any Loan Document or
     any other agreement or instrument relating thereto;

          (b)  any change in the time, manner or place of payment of, or in any
     other term of, all or any of the Secured Obligations or any other
     Obligations of any other Loan Party under or in respect of the Loan
     Documents or any other amendment or waiver of or any consent to any
     departure from any Loan Document, including, without limitation, any
     increase in the Secured Obligations resulting from the extension of
     additional credit to any Loan Party or any of its Subsidiaries or
     otherwise;

          (c)  any taking, exchange, release or non-perfection of any Collateral
     or any other collateral, or any taking, release or amendment or waiver of
     or consent to departure from any guaranty, for all or any of the Secured
     Obligations;

          (d)  any manner of application of any Collateral or any other
     collateral, or proceeds thereof, to all or any of the Secured Obligations,
     or any manner of sale or other disposition of any Collateral or any other
     collateral for all or any of the Secured Obligations or any other
     Obligations of any other Loan Party under or in respect of the Loan
     Documents or any other assets of any Loan Party or any of its Subsidiaries;

          (e)  any change, restructuring or termination of the corporate
     structure or existence of any Loan Party or any of its Subsidiaries;

          (f)  any failure of any Secured Party to disclose to any Loan Party
     any information relating to the business, condition (financial or
     otherwise), operations, performance, assets, nature of assets, liabilities
     or prospects of any other Loan Party now or hereafter known to such Secured
     Party (each Grantor waiving any duty on the part of the Secured Parties to
     disclose such information);

          (g)  the failure of any other Person to execute this Agreement or any
     other Collateral Document, guaranty or agreement or the release or
     reduction of liability of any Grantor or other grantor or surety with
     respect to the Secured Obligations; or

          (h)  any other circumstance (including, without limitation, any
     statute of limitations) or any existence of or reliance on any
     representation by any Secured Party that might otherwise constitute a
     defense available to, or a discharge of, such Grantor or any other Grantor
     or a third party grantor of a security interest.

                                       34

<PAGE>

This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by any Secured Party or by any other Person upon the
insolvency, bankruptcy or reorganization of any Loan Party or otherwise, all as
though such payment had not been made.

          SECTION 28. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.

          SECTION 29. The Mortgage. In the event that any of the Collateral
hereunder is also subject to a valid and enforceable Lien under the terms of any
Mortgage and the terms of such Mortgage are inconsistent with the terms of this
Agreement, then with respect to such Collateral, the terms of such Mortgage
shall be controlling, in the case of fixtures and real estate leases, letting
and licenses of, and contracts and agreements relating to the lease of, real
property, and the terms of this Agreement shall be controlling in the case of
all other Collateral.

          SECTION 30. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

                                       35

<PAGE>

          IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

                                INTERSTATE FIBERNET, INC.

                                By:  /s/ Douglas A. Shumate
                                   --------------------------------------------
                                     Name:      Douglas A. Shumate
                                     Title:     Senior Vice President and Chief
                                                Financial Officer

Address for Notices:            ITC /\DELTACOM, INC.
1791 O.G. Skinner Drive
West Point, GA 31833
Attention: Douglas Shumate      By:  /s/ Douglas A. Shumate
                                   --------------------------------------------
                                     Name:      Douglas A. Shumate
                                     Title:     Senior Vice President and Chief
                                                Financial Officer

Address for Notices:            ITC /\DELTACOM COMMUNICATIONS, INC.
1791 O.G. Skinner Drive
West Point, GA 31833
Attention: Douglas Shumate      By:  /s/ Douglas A. Shumate
                                   --------------------------------------------
                                     Name:      Douglas A. Shumate
                                     Title:     Senior Vice President and Chief
                                                Financial Officer

Address for Notices:            DELTACOM INFORMATION SYSTEMS, INC.
1791 O.G. Skinner Drive
West Point, GA 31833
Attention: Douglas Shumate      By:  /s/ Douglas A. Shumate
                                   --------------------------------------------
                                     Name:      Douglas A. Shumate
                                     Title:     Senior Vice President and Chief
                                                Financial Officer

                                       36

<PAGE>

                                                                Exhibit A to the
                                                              Security Agreement

                      FORM OF SECURITY AGREEMENT SUPPLEMENT

                                         [Date of Security Agreement Supplement]

Morgan Stanley & Co.  Incorporated,
    as the Collateral Agent for the
    Secured Parties referred to in the
    Credit Agreement referred to below

_______________________________________
_______________________________________
Attn:__________________________________

Ladies and Gentlemen:

               Reference is made to (i) the Amended and Restated Credit
Agreement dated as of October 29, 2002 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Interstate FiberNet, Inc., a Delaware corporation, as the Borrower, the
Lender Parties party thereto, Morgan Stanley & Co. Incorporated, as collateral
agent (together with any successor collateral agent appointed pursuant to
Article VIII of the Credit Agreement, the "Collateral Agent"), and Morgan
Stanley Senior Funding, Inc., as administrative agent, and (ii) the Amended and
Restated Security Agreement dated as of October 29, 2002 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the
"Security Agreement") made by the Grantors from time to time party thereto in
favor of the Collateral Agent for the Secured Parties. Terms defined in the
Credit Agreement or the Security Agreement and not otherwise defined herein are
used herein as defined in the Credit Agreement or the Security Agreement.

               SECTION 1. Grant of Security. The undersigned hereby assigns and
pledges to the Collateral Agent for the ratable benefit of the Secured Parties,
and hereby grants to the Collateral Agent for the ratable benefit of the Secured
Parties, a security interest in, all of its right, title and interest in and to
all of the Collateral of the undersigned, whether now owned or hereafter
acquired by the undersigned, wherever located and whether now or hereafter
existing or arising, including, without limitation, the property and assets of
the undersigned set forth on the attached supplemental schedules to the
Schedules to the Security Agreement.

<PAGE>

               SECTION 2. Security for Obligations. The pledge and assignment
of, and the grant of a security interest in, the Collateral by the undersigned
under this Security Agreement Supplement and the Security Agreement secures the
payment of all Obligations of the undersigned now or hereafter existing under or
in respect of the Loan Documents, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest,
premiums, penalties, fees, indemnifications, contract causes of action, costs,
expenses or otherwise.

               Without limiting the generality of the foregoing, this Agreement
secures, as to each Grantor, the payment of all amounts that constitute part of
the Secured Obligations and would be owed by such Grantor to any Secured Party
under the Loan Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving a Loan Party.

               SECTION 3. Supplements to Security Agreement Schedules. The
undersigned has attached hereto supplemental Schedules I, II, III, IV and V to
Schedules I, II, III, IV and V, respectively, to the Security Agreement, and the
undersigned hereby certifies, as of the date first above written, that such
supplemental schedules have been prepared by the undersigned in substantially
the form of the equivalent Schedules to the Security Agreement and are complete
and correct in all material respects.

               SECTION 4. Representations and Warranties. The undersigned hereby
makes each representation and warranty set forth in Section 8 of the Security
Agreement (as supplemented by the attached supplemental schedules) to the same
extent as each other Grantor.

               SECTION 5. Obligations Under the Security Agreement. The
undersigned hereby agrees, as of the date first above written, to be bound as a
Grantor by all of the terms and provisions of the Security Agreement to the same
extent as each of the other Grantors. The undersigned further agrees, as of the
date first above written, that each reference in the Security Agreement to an
"Additional Grantor" or a "Grantor" shall also mean and be a reference to the
undersigned.

               SECTION 6. Jurisdiction, Etc. (a) The undersigned hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Security Agreement Supplement or any of the other Loan Documents to which it is
a party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be

                                       2

<PAGE>

heard and determined in any such New York State court or, to the fullest extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Security Agreement Supplement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Security Agreement Supplement or any of the other Loan
Documents in the courts of any jurisdiction.

               (b) The undersigned hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Security Agreement
Supplement or any of the other Loan Documents to which it is a party in any New
York State or Federal court. The undersigned hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

               SECTION 7. Governing Law. This Security Agreement Supplement
shall be governed by, and construed in accordance with, the laws of the State of
New York.

                                            Very truly yours,

                                            [NAME OF ADDITIONAL GRANTOR]

                                            By__________________________________
                                              Title:

                                            Address for notices:

                                            ____________________________________

                                            ____________________________________

                                            ____________________________________

                                       3

<PAGE>

                                                                Exhibit B to the
                                                              Security Agreement

                          FORM OF CONSENT AND AGREEMENT

          The undersigned hereby (a) acknowledges notice of, and consents to the
terms and provisions of, the Amended and Restated Security Agreement dated as of
October 29, 2002 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Security Agreement", the terms defined therein
being used herein as therein defined) from _______________ (the "Grantor") and
certain other grantors from time to time party thereto to Morgan Stanley & Co.
Incorporated, as Collateral Agent (the "Collateral Agent") for the Secured
Parties referred to therein, (b) consents in all respects to the pledge and
assignment to the Collateral Agent of all of the Grantor's right, title and
interest in, to and under the Assigned Agreement (as defined below) pursuant to
the Security Agreement, (c) acknowledges that the Grantor has provided it with
notice of the right of the Collateral Agent in the exercise of its rights and
remedies under the Security Agreement to make all demands, give all notices,
take all actions and exercise all rights of the Grantor under the Assigned
Agreement, and (d) agrees with the Collateral Agent that:

               (i)   Upon its receipt from the Collateral Agent of a notice
          specifying that an Event of Default under the Credit Agreement has
          occurred and is continuing, the undersigned will make all payments to
          be made by it under or in connection with the _______________
          Agreement dated _______________, ____ (the "Assigned Agreement")
          between the undersigned and the Grantor directly to the Collateral
          Agent or otherwise in accordance with the instructions of the
          Collateral Agent.

               (ii)  All payments referred to in paragraph (i) above shall be
          made by the undersigned irrespective of, and without deduction for,
          any counterclaim, defense, recoupment or set-off and shall be final,
          and the undersigned will not seek to recover from any Secured Party
          for any reason any such payment once made.

               (iii) Upon the occurrence and during the continuance of an Event
          of Default, the Collateral Agent or its designee shall be entitled to
          exercise any and all rights and remedies of the Grantor under the
          Assigned Agreement in accordance with the terms of the Security
          Agreement, and the undersigned shall comply in all respects with such
          exercise.

               (iv)  The undersigned will not, without the prior written consent
          of the Collateral Agent, (A) cancel or terminate the Assigned
          Agreement or consent to or accept any cancellation or termination
          thereof, or (B) amend, amend and restate, supplement or

<PAGE>

     otherwise modify the Assigned Agreement, except, in each case, to the
     extent otherwise permitted under the Credit Agreement referred to in the
     Security Agreement.

               (v)   In the event of a default by the Grantor in the performance
     of any of its obligations under the Assigned Agreement, or upon the
     occurrence or non-occurrence of any event or condition under the Assigned
     Agreement which would immediately or with the passage of any applicable
     grace period or the giving of notice, or both, enable the undersigned to
     terminate or suspend its obligations under the Assigned Agreement, the
     undersigned shall not terminate the Assigned Agreement until it first gives
     written notice thereof to the Collateral Agent and permits the Grantor and
     the Collateral Agent the period of time afforded to the Grantor under the
     Assigned Agreement to cure such default.

               (vi)  The undersigned shall deliver to the Collateral Agent,
     concurrently with the delivery thereof to the Grantor, a copy of each
     notice, request or demand given by the undersigned pursuant to the Assigned
     Agreement.

               (vii) Except as specifically provided in this Consent and
     Agreement, neither the Collateral Agent nor any other Secured Party shall
     have any liability or obligation under the Assigned Agreement as a result
     of this Consent and Agreement, the Security Agreement or otherwise.

          In order to induce the Lender Parties to make Advances and issue
Letters of Credit under the Credit Agreement and the Hedge Banks to enter into
Secured Hedge Agreements from time to time, the undersigned repeats and
reaffirms for the benefit of the Secured Parties the representations and
warranties made by it in the Assigned Agreement.

          This Consent and Agreement shall be binding upon the undersigned and
its successors and assigns, and shall inure, together with the rights and
remedies of the Collateral Agent hereunder, to the benefit of the Secured
Parties and their successors, transferees and assigns. This Consent and
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.

                                       2

<PAGE>

          IN WITNESS WHEREOF, the undersigned has duly executed this Consent and
Agreement as of the date set opposite its name below.

Dated:  _____________, ____                      [NAME OF OBLIGOR]

                                                 By_____________________________

Title:

                                        3

<PAGE>

                                                                Exhibit C to the
                                                              Security Agreement

                FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

          This AMENDED AND RESTATED INTELLECTUAL PROPERTY SECURITY AGREEMENT (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "IP Security Agreement") dated as of October 29, 2002, is made by the
Persons listed on the signature pages hereof (collectively, the "Grantors") in
favor of Morgan Stanley & Co. Incorporated, as collateral agent (the "Collateral
Agent") for the Secured Parties (as defined in the Credit Agreement referred to
below).

          WHEREAS, Interstate FiberNet, Inc., a Delaware corporation, entered
into a Credit Agreement dated as of April 5, 2000 (the "Initial Credit
Agreement") with the Lender Parties and the Agents named therein, pursuant to
which the Grantors executed and delivered to the Collateral Agent for the
Secured Parties a Security Agreement dated April 5, 2000 and an Intellectual
Property Security Agreement dated April, 2000;

          WHEREAS, in order to restructure, continue, convert and consolidate
the loans advanced to the Borrower by the Lender Parties under the Initial
Credit Agreement, the Lender Parties, the Loan Parties and the Agents have
entered into an Amended and Restated Credit Agreement, dated as of October 29,
2002 (as may be amended from time to time, the "Credit Agreement"); any
capitalized term used herein and not otherwise defined has the meaning set forth
in the Credit Agreement;

          WHEREAS, as a condition precedent to the Amendment Effective Date,
each Grantor has executed and delivered that certain Amended and Restated
Security Agreement dated as of October 29, 2002 made by the Grantors to the
Collateral Agent (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Security Agreement"); and

          WHEREAS, under the terms of the Security Agreement, Grantors have
granted a security interest in, among other property, certain intellectual
property of the Grantors to the Collateral Agent for the ratable benefit of the
Secured Parties, and have agreed as a condition thereof to execute this IP
Security Agreement covering such intellectual property for recording with the
U.S. Patent and Trademark Office, the United States Copyright Office and other
governmental authorities;

<PAGE>

          NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor agrees as follows:

          SECTION 1. Grant of Security. Each Grantor hereby grants to the
Collateral Agent for the ratable benefit of the Secured Parties a security
interest in and to all of such Grantor's right, title and interest in and to the
following (the "Collateral"):

          (a)  the United States, international, and foreign patents and patent
     applications set forth in Schedule A hereto (as such Schedule A may be
     supplemented from time to time by supplements to the Security Agreement and
     this IP Security Agreement, each such supplement being in substantially the
     form of Exhibit D to the Security Agreement (an "IP Security Agreement
     Supplement"), executed and delivered by such Grantor to the Collateral
     Agent from time to time), together with all reissues, divisions,
     continuations, continuations-in-part, extensions and reexaminations
     thereof, and all rights therein provided by international treaties or
     conventions (the "Patents");

          (b)  the United States and foreign trademark and service mark
     registrations and applications set forth in Schedule B hereto (as such
     Schedule B may be supplemented from time to time by IP Security Agreement
     Supplements executed and delivered by such Grantor to the Collateral Agent
     from time to time) (the "Trademarks");

          (c)  the United States and foreign copyright registrations and
     applications set forth in Schedule C hereto (as such Schedule C may be
     supplemented from time to time by IP Security Agreement Supplements
     executed and delivered by such Grantor to the Collateral Agent from time to
     time) (the "Copyrights");

          (d)  any and all claims for damages for past, present and future
     infringement, misappropriation or breach with respect to the Patents,
     Trademarks and Copyrights, with the right, but not the obligation, to sue
     for and collect, or otherwise recover, such damages; and

          (e)  any and all proceeds of the foregoing.

          Notwithstanding anything herein to the contrary, the Collateral shall
not include any equipment and related computer programs, documentation, licenses
and sublicenses, and any additions, attachments and accessions to, and
replacements of, any of the foregoing, any agreements with the supplier of any
or all of the foregoing and purchase orders submitted to such supplier, and any
products and proceeds of any of the foregoing, pledged as collateral to secure
the GECC Capital Lease, the NTFC Capital Lease or any other Capitalized Lease
constituting Surviving Debt as of the Amendment Effective Date.

                                       2

<PAGE>

          SECTION 2. Security for Obligations. The pledge and the grant of a
security interest in, the Collateral by each Grantor under this IP Security
Agreement secures the payment of all Obligations of such Grantor now or
hereafter existing under or in respect of the Loan Documents, whether direct or
indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, premiums, penalties, fees, indemnifications, contract
causes of action, costs, expenses or otherwise.

          The parties hereto intend to maintain the validity, effectiveness,
enforceability, perfection and priority of the Collateral Documents delivered
under the Initial Credit Agreement (the "Original Security Documents") and this
IP Security Agreement is intended, inter alia, to extend the obligations and
indebtedness secured by the security interests and pledges created and affected
by the Original Security Documents, in each case, except as specifically
provided herein, including, without limitation, in the last paragraph of Section
1, without terminating, limiting, modifying or otherwise affecting the validity,
effectiveness, enforceability, perfection and priority of the security interests
or the pledges created and affected in respect thereof. To the extent that any
security interest or pledge granted pursuant to the Original Security Documents
relates to collateral in which the Grantors have previously granted a security
interest to the Collateral Agent, this IP Security Agreement shall, except as
specifically provided herein, including, without limitation, in the last
paragraph of Section 1, confirm the validity, effectiveness, enforceability and
continuation of such security interest or pledge as against the Grantors. All of
the terms and provisions of the Original Security Documents are hereby confirmed
and ratified in all respects, except as specifically modified herein.

          Without limiting the generality of the foregoing, this IP Security
Agreement secures, as to each Grantor, the payment of all amounts that
constitute part of the Secured Obligations and would be owed by such Grantor to
any Secured Party under the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Loan Party.

          SECTION 3. Recordation. Each Grantor authorizes and requests that the
Register of Copyrights, the Commissioner of Patents and Trademarks and any other
applicable government officer record this IP Security Agreement.

          SECTION 4. Execution in Counterparts. This IP Security Agreement may
be executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement.

                                       3

<PAGE>

          SECTION 5. Grants, Rights and Remedies. This IP Security Agreement has
been entered into in conjunction with the provisions of the Security Agreement.
Each Grantor does hereby acknowledge and confirm that the grant of the security
interest hereunder to, and the rights and remedies of, the Collateral Agent with
respect to the Collateral are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated herein by reference as if
fully set forth herein.

          SECTION 6. Governing Law. This IP Security Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.

                                       4

<PAGE>

          IN WITNESS WHEREOF, each Grantor has caused this IP Security Agreement
to be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.

                                             INTERSTATE FIBERNET, INC.

                                             By___________________________

                                             Name:
                                             Title:
                                             Address for Notices:
                                             1791 O.G. Skinner Drive
                                             West Point, GA 31833
                                             Attention: Douglas Shumate

                                             ITC/\DELTACOM, INC.

                                             By___________________________

                                             Name:
                                             Title:
                                             Address for Notices:
                                             1791 O.G. Skinner Drive
                                             West Point, GA 31833
                                             Attention: Douglas Shumate

                                             ITC/\DELTACOM COMMUNICATIONS INC.

                                             By___________________________

                                             Name:
                                             Title:
                                             Address for Notices:
                                             1791 O.G. Skinner Drive
                                             West Point, GA 31833
                                             Attention: Douglas Shumate

                                       5

<PAGE>

                                                                Exhibit D to the
                                                              Security Agreement

           FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT

          This INTELLECTUAL PROPERTY SECURITY AGREEMENT SUPPLEMENT (this "IP
Security Agreement Supplement") dated _________, ____, is made by the Person
listed on the signature page hereof (the "Grantor") in favor of Morgan Stanley &
Co. Incorporated, as collateral agent (the "Collateral Agent") for the Secured
Parties (as defined in the Credit Agreement referred to below).

          WHEREAS, Interstate FiberNet, Inc., a Delaware corporation, entered
into a Credit Agreement dated as of April 5, 2000 (the "Initial Credit
Agreement") with the Lender Parties and the Agents named therein, pursuant to
which the Grantors executed and delivered to the Collateral Agent for the
Secured Parties a Security Agreement dated April 5, 2000 and an Intellectual
Property Security Agreement dated April, 2000;

          WHEREAS, in order to restructure, continue, convert and consolidate
the loans advanced to the Borrower by the Lender Parties under the Initial
Credit Agreement, the Lender Parties, the Loan Parties and the Agents have
entered into an Amended and Restated Credit Agreement, dated as of October 29,
2002 (as may be amended from time to time, the "Credit Agreement"); any
capitalized term used herein and not otherwise defined has the meaning set forth
in the Credit Agreement;

          WHEREAS, pursuant to the Credit Agreement, the Grantor and certain
other Persons executed and delivered that certain Amended and Restated Security
Agreement dated as of October 29, 2002 made by the Grantors to the Collateral
Agent (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "Security Agreement"); to create a short form version of the
Security Agreement covering certain intellectual property of the Grantor and
such other Persons for recording with the U.S. Patent and Trademark Office, the
United States Copyright Office and other governmental authorities, the Grantor
and such other Persons have executed and delivered that certain Amended and
Restated Intellectual Property Security Agreement made by the Grantor and such
other Persons to the Collateral Agent dated as of October 29, 2002 (as amended,
amended and restated, supplemented or otherwise modified from time to-time, the
"IP Security Agreement"); and

                                       6

<PAGE>

          WHEREAS, under the terms of the Security Agreement and the IP Security
Agreement, the Grantor has granted a security interest in the Additional
Collateral (as defined in Section 1 below) of the Grantor to the Collateral
Agent for the ratable benefit of the Secured Parties and has agreed as a
condition thereof to execute this IP Security Agreement Supplement for recording
with the U.S. Patent and Trademark Office, the United States Copyright Office
and other governmental authorities;

          NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Grantor agrees as follows:

          SECTION 1. Confirmation of Grant of Security. The Grantor hereby
acknowledges and confirms the grant of a security interest to the Collateral
Agent for the ratable benefit of the Secured Parties under the Security
Agreement and the IP Security Agreement in and to all of the Grantor's right,
title and interest in and to the following (the "Additional Collateral"):

               (i)   the United States, international, and foreign patents and
          patent applications, set forth in Schedule A hereto, together with all
          reissues, divisions, continuations, continuations-in-part, extensions
          and reexaminations thereof, and all rights therein provided by
          international treaties or conventions (the "Patents");

               (ii)  the United States and foreign trademark and service mark
          registrations and applications set forth in Schedule B hereto (the
          "Trademarks");

               (iii) United States and foreign copyright registrations and
          applications set forth in Schedule C hereto (the "Copyrights");

               (iv)  any and all claims for damages for past, present and future
          infringement, misappropriation or breach with respect to the Patents,
          Trademarks and Copyrights, with the right, but not the obligation, to
          sue for and collect, or otherwise recover, such damages; and

               (v)   any and all proceeds of the foregoing.

          SECTION 2. Supplement to Security Agreement and IP Security Agreement.
Schedule V to the Security Agreement and Schedule[s] [A,] [B and] [C] to the IP
Security Agreement are each, effective as of the date hereof, hereby
supplemented to add to such Schedules the Additional Collateral.

                                       7

<PAGE>

          SECTION 3. Recordation. The Grantor authorizes and requests that the
Register of Copyrights, the Commissioner of Patents and Trademarks and any other
applicable government officer to record this IP Security Agreement Supplement.

          SECTION 4. Governing Law. This IP Security Agreement Supplement shall
be governed by, and construed in accordance with, the laws of the State of New
York.

          IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

                                                  [NAME OF GRANTOR]

                                                  By:___________________________
                                                     Name:
                                                     Title:

                                                  Address for Notices:

                                                  _________________________

                                                  _________________________

                                                  _________________________

                       [ADD ACKNOWLEDGMENT FORM IF NEEDED]

                                       8

<PAGE>

                                                                Exhibit E to the
                                                              Security Agreement

                  FORM OF SECURITIES ACCOUNT CONTROL AGREEMENT

          CONTROL AGREEMENT dated as of ________, ______, among _______, a
_____________ (the "Grantor"), Morgan Stanley &Co. Incorporated, as Collateral
Agent (the "Secured Party"), and _________, as securities intermediary (the
"Securities Intermediary").

PRELIMINARY STATEMENTS:

          (1) The Grantor has granted the Secured Party a security interest (the
"Security Interest") in account no. maintained by the Securities Intermediary
for the Grantor (the "Account").

          (2) Terms defined in Article 8 or 9 of the Uniform Commercial Code in
effect in the State of New York ("N.Y. Uniform Commercial Code") are used in
this Agreement as such terms are defined in such Article 8 or 9.

          NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto hereby agree as follows:

          Section 1. The Account. The Securities Intermediary represents and
warrants to, and agrees with, the Secured Party that:

          (a) The Securities Intermediary maintains the Account for the Grantor,
and all property held by the Securities Intermediary for the account of the
Grantor is, and will continue to be, credited to the Account.

          (b) The Account is a securities account. The Securities Intermediary
is the securities intermediary with respect to the property credited from time
to time to the Account. The Grantor is the entitlement holder with respect to
the property credited from time to time to the Account.

          (c) The Securities Intermediary's jurisdiction with respect to the
Account is, and will continue to be for so long as the Security Interest shall
be in effect, the State of New York.

<PAGE>

          (d)  Exhibit A attached hereto is a statement of the property credited
to the Account on the date hereof.

          (e)  The Securities Intermediary does not know of any claim to or
interest in the Account or any property credited to the Account, except for
claims and interests of the parties referred to in this Agreement.

          Section 2. Control by Secured Party. The Securities Intermediary will
comply with all notifications it receives directing it to transfer or redeem any
property in the Account (each an "Entitlement Order") or other directions
concerning the Account (including, without limitation, directions to distribute
to the Secured Party proceeds of any such transfer or redemption or interest or
dividends on property in the Account) originated by the Secured Party without
further consent by the Grantor or any other person.

          Section 3. Grantor's Rights in Account. (a) Except as otherwise
provided in this Section 3, the Securities Intermediary will comply with
Entitlement Orders originated by the Grantor without further consent by the
Secured Party.

          (b)  Until the Securities Intermediary receives a notice from the
Secured Party that the Secured Party will exercise exclusive control over the
Account (a "Notice of Exclusive Control"), the Securities Intermediary may
distribute to the Grantor all funds and other property held in the Account.

          (c)  The Securities Intermediary will not comply with any Entitlement
Order originated by the Grantor that would require the Securities Intermediary
to make a free delivery to the Grantor or any other person.

          (d)  If the Securities Intermediary receives from the Secured Party a
Notice of Exclusive Control, the Securities Intermediary will cease:

          (i)  complying with Entitlement Orders or other directions concerning
the Account originated by the Grantor and

          (ii) distributing to the Grantor any funds or other property held in
the Account.

          Section 4. Priority of Secured Party's Security Interest. (a) The
Securities Intermediary subordinates in favor of the Secured Party any security
interest, lien, or right of set-off it may have, now or in the future, against
the Account or property in the Account, except that

                                       2

<PAGE>

the Securities Intermediary will retain its prior lien on property in the
Account to secure payment for property purchased for the Account and normal
commissions and fees for the Account.

          (b) The Securities Intermediary will not agree with any third party
that the Securities Intermediary will comply with Entitlement Orders originated
by the third party.

          Section 5. Statements, Confirmations, and Notices of Adverse Claims.
(a) The Securities Intermediary will send copies of all statements and
confirmations for the Account simultaneously to the Grantor and the Secured
Party.

          (b) When the Securities Intermediary knows of any claim or interest in
the Account or any property credited to the Account other than the claims and
interests of the parties referred to in this Agreement, the Securities
Intermediary will promptly notify the Secured Party and the Grantor of such
claim or interest.

          Section 6. The Securities Intermediary's Responsibility. (a) Except
for permitting a withdrawal, delivery, or payment in violation of Section 3, the
Securities Intermediary will not be liable to the Secured Party for complying
with Entitlement Orders or other directions concerning the Account from the
Grantor that are received by the Securities Intermediary before the Securities
Intermediary receives and has a reasonable opportunity to act on a Notice of
Exclusive Control.

          (b) The Securities Intermediary will not be liable to the Grantor for
complying with a Notice of Exclusive Control or with an Entitlement Order or
other direction concerning the Account originated by the Secured Party; even if
the Grantor notifies the Securities Intermediary that the Secured Party is not
legally entitled to issue the Notice of Exclusive Control or Entitlement Order
or such other direction unless the Securities Intermediary takes the action
after it is served with an injunction, restraining order, or other legal process
enjoining it from doing so, issued by a court of competent jurisdiction, and had
a reasonable opportunity to act on the injunction, restraining order or other
legal process.

          (c) This Agreement does not create any obligation of the Securities
Intermediary except for those expressly set forth in this Agreement and in Part
5 of Article 8 of the N.Y. Uniform Commercial Code. In particular, the
Securities Intermediary need not investigate whether the Secured Party is
entitled under the Secured Party's agreements with the Grantor to give an
Entitlement Order or other direction concerning the Account or a Notice of
Exclusive Control. The Securities Intermediary may rely on notices and
communications it believes to be given by the appropriate party.

                                       3

<PAGE>

          Section 7.  Indemnity. The Grantor will indemnify the Securities
Intermediary, its officers, directors, employees and agents against claims,
liabilities and expenses arising out of this Agreement (including, without
limitation, reasonable attorney's fees and disbursements), except to the extent
the claims, liabilities or expenses are caused by the Securities Intermediary's
gross negligence or willful misconduct as found by a court of competent
jurisdiction in a final, non-appealable judgment.

          Section 8.  Termination; Survival. (a) The Secured Party may terminate
this Agreement by notice to the Securities Intermediary and the Grantor. If the
Secured Party notifies the Securities Intermediary that the Security Interest
has terminated, this Agreement will immediately terminate.

          (b) The Securities Intermediary may terminate this Agreement on 60
days' prior notice to the Secured Party and the Grantor, provided that before
such termination the Securities Intermediary and the Grantor shall make
arrangements to transfer the property in the Account to another securities
intermediary that shall have executed, together with the Grantor, a control
agreement in favor of the Secured Party in respect of such property in
substantially the form of this Agreement or otherwise in form and substance
satisfactory to the Secured Party.

          (c) Sections 6 and 7 will survive termination of this Agreement.

          Section 9.  Governing Law. This Agreement and the Account will be
governed by the law of the State of New York. The Securities Intermediary and
the Grantor may not change the law governing the Account without the Secured
Party's express prior written agreement.

          Section 10. Entire Agreement. This Agreement is the entire agreement,
and supersedes any prior agreements, and contemporaneous oral agreements, of the
parties concerning its subject matter.

          Section 11. Amendments. No amendment of, or waiver of a right under,
this Agreement will be binding unless it is in writing and signed by the party
to be charged.

          Section 12. Financial Assets. The Securities Intermediary agrees with
the Secured Party and the Grantor that, to the fullest extent permitted by
applicable law, all property credited from time to time to the Account will be
treated as financial assets under Article 8 of the N.Y. Uniform Commercial Code.

          Section 13. Notices. A notice or other communication to a party under
this Agreement will be in writing (except that Entitlement Orders may be given
orally), will be sent

                                       4

<PAGE>

to the party's address set forth under its name below or to such other address
as the party may notify the other parties, and will be effective on receipt.

          Section 14. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Grantor, the Secured Party and the Securities
Intermediary, and thereafter shall be binding upon and inure to the benefit of
the Grantor, the Secured Party and the Securities Intermediary and their
respective successors and assigns.

          Section 15. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of
this Agreement.

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

                                     [NAME OF GRANTOR]

                                     By:________________________________________
                                        Title:

                                        Address:

                                        _________________

                                        _________________

                                        _________________

                                     MORGAN STANLEY & CO.
                                       INCORPORATED, as Collateral Agent

                                     By:________________________________________
                                        Title:

                                        Address:

                                       5

<PAGE>

                                        _________________

                                        _________________

                                        _________________

                                     [NAME OF SECURITIES
                                           INTERMEDIARY]

                                     By:________________________________________
                                        Title:

                                        Address:

                                        _________________

                                        _________________

                                        _________________

                                       6<PAGE>

                                                                 Exhibit 10.20.1

                               ITC/\DELTACOM, INC.
                              STOCK INCENTIVE PLAN

          This is the ITC/\DELTACOM, INC. STOCK INCENTIVE PLAN. This Plan
authorizes our Board, or a Committee appointed by the Board, to grant options to
purchase, and to issue unrestricted and restricted shares of and stock units
relating to, our common stock. References to the Board will include the
Committee, if one is appointed and acting within the authority delegated to it.
The Plan supplies a number of standard terms and conditions for options,
unrestricted stock, restricted stock and stock units that will apply unless the
Board provides otherwise in a particular case. We have provided definitions for
capitalized terms in Section 21 below.

          1.   PURPOSE

          We are adopting the Plan so that we may grant Options, shares of
Unrestricted Stock and Restricted Stock and Stock Units to selected officers,
employees, Directors and consultants who are providing services to us or our
Affiliates. We believe that equity ownership will create strong incentives for
our personnel to produce good business results for us by giving them an
opportunity to acquire or increase a proprietary interest in ITC/\DeltaCom, Inc.
("ITC/\DeltaCom"). We hope that equity ownership will encourage our personnel to
do their best to help us to achieve our long-term corporate objectives and that
our personnel also will be more likely to stay with us instead of pursuing other
employment or business opportunities.

          We intend each Option we grant under the Plan to be a Nonqualified
Option (and not a Incentive Stock Option) for income tax purposes, unless we
specifically designate the Option as an Incentive Stock Option in the Option
Agreement at the time we grant it and the Option satisfies all of the
requirements for that treatment. We may issue shares of Unrestricted Stock,
Restricted Stock and Stock Units in accordance with the provisions of Section 6
below. We refer to Options, Unrestricted Stock, Restricted Stock and Stock Units
as "Incentive Awards."

          2.   ADMINISTRATION

               (a)  Board of Directors. The Board will administer the Plan. The
Board will have the full power and authority to take all actions and to make all
determinations required or permitted under the Plan. If any Incentive Award or
Agreement needs to be interpreted or amended or if any other action by us is
necessary or desirable to implement the Plan or any

<PAGE>

Incentive Award, our Board will have the authority to take those actions, in its
discretion. The Board will take action and make determinations in accordance
with our Certificate of Incorporation and Bylaws by written consent in lieu of a
meeting or by the affirmative vote of a majority of the members of the Board who
are present at a meeting at which any issue relating to the Plan is properly
raised for consideration. The Board's interpretation of the Plan or any
Incentive Award or Agreement will be final and conclusive.

               (b)  Committee.  The Board may appoint a Committee and delegate
all or a portion of the Board's authority for the administration of the Plan to
the Committee. The Committee will take action and make determinations in
accordance with our Certificate of Incorporation and Bylaws by written consent
in lieu of a meeting or by the affirmative vote of a majority of its members who
are present at a meeting at which any issue relating to the Plan is properly
raised for consideration.

               (c)  No Liability.  No member of our Board or the Committee will
be liable for any action or determination made in good faith with respect to the
Plan or any Incentive Award or Agreement.

               (d)  Scope and Effect of Delegation to the Committee. If our
Board delegates to the Committee the power and authority to take an action or
make a determination, the Committee will have the same power and authority, to
the extent delegated, that the Board would have had. When the Board delegates
power and authority to the Committee, the Board may retain the power and
authority to take final actions and make final determinations itself.

          3.   STOCK

          We may issue shares of our Stock under the Plan, either from treasury
shares or from our authorized but unissued shares. We will not issue more than
4,700,000 shares of Stock under the Plan, of which 1,000,000 may be issued
pursuant to awards of Restricted Stock or Stock Units, up to 3,500,000 may be
issued pursuant to the exercise of Options and up to 200,000 may be issued
pursuant to awards of Unrestricted Stock. We will adjust those numbers of shares
as appropriate to reflect changes in our capitalization after the Effective
Date, as provided in Section 17 below. If any Incentive Award expires,
terminates, or is canceled, forfeited or terminated, in whole or any part,
before exercise or vesting in full, the shares of Stock that were subject to the
canceled, forfeited or terminated portion of that Incentive Award will be
available for future grants of the same type

                                      -2-

<PAGE>

(Unrestricted Stock, Restricted Stock, Stock Units or Options, as applicable)
under the Plan.

          4.   ELIGIBILITY

          We may grant Incentive Awards to any employee, officer, Director or
consultant who provides services to ITC/\DeltaCom or any Affiliate. All of those
persons will be Eligible Individuals, but only employees of ITC/\DeltaCom or a
Subsidiary are eligible to receive Incentive Stock Options. The Board will have
discretion to designate the Eligible Individuals who will receive Incentive
Awards.

          5.   EFFECTIVE DATE AND TERM OF THE PLAN

               (a)  Effective Date. The Plan became effective on the Effective
Date, which is the date on which the Board adopted the Plan, but our ability to
grant Incentive Stock Options under the Plan is subject to approval of our
stockholders, in accordance with state law and with our Certificate of
Incorporation and Bylaws, within one year after the Effective Date. Upon
approval of the Plan within that time period by our stockholders, all Incentive
Stock Options that we had previously granted under the Plan will be fully
effective as if the stockholders had approved the Plan on the Effective Date. If
the stockholders do not approve the Plan or if they approve it more than one
year after the Effective Date, all Incentive Stock Options that we have granted
under the Plan will be null and void and of no force or effect. Failure of the
stockholders to approve the Plan will not impair our ability to grant
Nonqualified Options, Unrestricted Stock, Restricted Stock or Stock Units under
the Plan.

               (b)  Term. The Plan will terminate ten years after the Effective
Date. We will not grant any Incentive Awards under the Plan after it terminates.

          6.   GRANT OF OPTIONS, UNRESTRICTED STOCK, RESTRICTED STOCK AND STOCK
               UNITS

               (a)  Options. The Board may grant to an Eligible Individual an
Option to purchase a specified number of shares of Stock at a specified price,
subject to the terms and conditions that are set out in the Plan and to any
additional or permissible alternative terms and conditions that the Board
determines to apply, including, in appropriate cases, terms that are necessary
to qualify an Option as an Incentive Stock Option. The grant date of an Option
will be the date the Board has taken action to

                                      -3-

<PAGE>

approve the grant, unless the Board determines that the Option should have a
later grant date.

               (b)  Unrestricted Stock. The Board may grant to an Eligible
Individual shares of Unrestricted Stock. Shares of Unrestricted Stock will be
free of restrictions other than those required under federal or state securities
laws. The Board may require that an award of Unrestricted Stock be evidenced by
an Unrestricted Stock Agreement.

               (c)  Restricted Stock. The Board may grant to an Eligible
Individual shares of Restricted Stock, subject to payment by the Holder of an
amount not less than the par value of the Stock. The Board will specify
continuous service requirements that the Holder must satisfy before the Stock
will become wholly or partially vested. No Restricted Stock grant will be
effective until the Holder and ITC/\DeltaCom each execute an Agreement setting
out the Conditions of the grant. Upon satisfying the specified Conditions and
any other applicable requirements, the Holder will be entitled to the shares of
Stock covered by the grant.

          If the Holder fails to satisfy the specified Conditions within the
time specified or if the Holder's employment terminates before the Holder has
satisfied the Conditions, subject to any provision to the contrary in an
Agreement or an applicable employment agreement between the Holder and
ITC/\DeltaCom or an Affiliate (whether or not effective before the Effective
Date), the Holder will forfeit the shares of Restricted Stock that are not
vested. The Board may direct that shares of Restricted Stock will be held,
either by ITC/\DeltaCom or in escrow, until they become vested and it may place
a legend on the shares of Restricted Stock disclosing the restrictions, so as to
prevent the Holder from transferring the shares to someone else before the
Holder satisfies the Conditions of the grant.

               (d) Stock Units. The Board may grant Stock Units to an Eligible
Individual. The Board will specify continuous service requirements that the
Holder must satisfy before the Stock Units will become wholly or partially
vested. No Stock Unit grant will be effective until the Holder and ITC/\DeltaCom
each execute an Agreement setting out the Conditions of the grant. Upon
satisfying the specified Conditions and any other applicable requirements, the
Company will deliver to the Holder the shares of Stock covered by the Stock
Units.

          If the Holder fails to satisfy the specified Conditions within the
time specified or if the Holder's employment terminates before the Holder has
satisfied the Conditions, subject to any provision to the contrary in an
Agreement or an applicable employment agreement between the Holder and

                                      -4-

<PAGE>

ITC/\DeltaCom or an Affiliate (whether or not effective before the Effective
Date), the Company will deliver to the Holder the shares of Stock covered by the
Stock Units that are vested and the Holder will forfeit the Stock Units that are
not vested.

               (e)  Vesting of Incentive Awards. Unless otherwise provided by
the Board in an Agreement or an applicable employment agreement between the
Holder or Optionee and ITC/\DeltaCom or an Affiliate (whether or not such
employment agreement is effective before the Effective Date), Incentive Awards
(other than Unrestricted Stock) granted under the Plan will vest at the rate of
one-third (1/3) of the shares of Stock subject to the Incentive Award on each of
the first, second and third anniversary dates of the grant date, subject to the
Optionee's or Holder's continuing to be an employee or service-provider of
ITC/\DeltaCom or its Affiliate.

               (f)  Cancellation and New Grant of Options. Subject to Section 7
below, the Board has the authority, with the consent of the affected Optionee,
to cancel any Option and to substitute a new Option covering the same or a
different number of shares of Stock, with the same or a different exercise price
and vesting schedule.

               (g)  Waiver of Restrictions and Acceleration. By written notice
to the Optionee or Holder, the Board may waive transfer restrictions and may
accelerate the date on which an Option may be exercised or the date on which an
Option, Restricted Stock or Stock Unit award may become vested.

          7.   LIMITATION ON GRANTS

               (a)  Limitations on Incentive Stock Options. There is a $100,000
annual limitation on Incentive Stock Options. The limitation is based on the
fair market value at the time of grant of the shares of Stock that are covered
by an Incentive Stock Option. The limitation relates to the maximum dollar value
of stock for which an Optionee may exercise an Option for the first time in any
calendar year, whether or not the Optionee actually exercises it. An Option will
constitute an Incentive Stock Option only to the extent that the aggregate fair
market value (determined at the time the Option was granted) of the stock with
respect to which the Optionee first has the right to exercise the Option (and
all other Incentive Stock Options granted by us or our Affiliates) in any
calendar year is not more than $100,000. If one or more Options that are
designated as Incentive Stock Options become exercisable in a particular year
and the $100,000 limitation is exceeded, the Options granted most recently will
be disqualified first. If

                                      -5-

<PAGE>

any of the Options exceeds this limitation, the excess portion will be a
Nonqualified Option.

               (b)  Limitation on Shares of Stock Subject to Grants. During any
time when we have a class of equity securities registered under Section 12 of
the Exchange Act, the maximum number of shares of Stock subject to Options that
may be awarded under the Plan to any person is 500,000 shares per year, subject
to adjustment pursuant to Section 17 below.

          8.   OPTION AGREEMENTS

          We will not grant any Options pursuant to oral agreements. All of our
Options will be evidenced by Option Agreements executed by us and the Optionee.
The Board has the discretion to specify the terms of the Option Agreements,
subject to the requirements of the Plan, and the Board may use different
Agreements for different grants. The Board may modify an Option Agreement after
it has been executed, but no amendment or modification will be effective unless
it is in writing, approved by the Board and executed by us and the Optionee,
except that execution by the Optionee is not required if the change is
beneficial to the Optionee, as reasonably determined by us.

          9.   OPTION PRICE

          The Board will determine the purchase price of each share of Stock
that is subject to an Option and will state that price in the Option Agreement.
The Options for 2,000,000 shares of Stock we will grant pursuant to the Plan of
Reorganization will have the Option Prices set forth in the Plan of
Reorganization and will be Nonqualified Options. The Option Price of any other
Option may not be less than 100% of the fair market value of the Stock covered
by the Option on the date of grant (except that, in the case of an Incentive
Stock Option, the Option Price may not be less than 110% of such fair market
value if the Optionee is a 10% Stockholder). In any case, the Option Price may
not be less than the par value, if any, of the Stock.

          The Board will determine the fair market value of the Stock in good
faith. In the event that the Stock is actively traded on an established national
or regional stock exchange or market, the Board will use the closing price of
the Stock on such exchange or market on the most recent trading date before the
date on which an Option is granted to determine fair market value.

                                      -6-

<PAGE>

          10.  TERM AND EXERCISE OF OPTIONS

               (a)  Term. Each Option granted under the Plan will terminate ten
years from the date of grant or on such earlier date as the Board specifies in
the applicable Option Agreement. If the Option is an Incentive Stock Option and
the Optionee is a 10% Stockholder, the maximum term will be five years from the
date of grant. Options may be terminated earlier because of a Corporate
Transaction under Section 17 below.

               (b)  Option Period and Limitations on Exercise. Unless the Board
provides different terms in a particular Option Agreement, each Option will be
exercisable at any time from the date of grant until the expiration or
termination of the Option. The Board may provide that an Optionee may not
exercise all or a part of an Option during any period in which the Option is
outstanding and may condition vesting or exercisability of an Option upon the
Optionee's attainment of performance objectives or service requirements that are
specified in the Option Agreement. The Board also may waive in writing any
limitation or condition on the exercise of an Option that is set out in an
Option Agreement (other than limitations and conditions that are imposed by the
Plan). No Incentive Stock Option may be exercised before the Plan is approved by
our stockholders.

               (c)  Method of Exercise. An Optionee may exercise a vested and
exercisable Option by delivering to the Company (i) a written notice of exercise
specifying the number of the Option shares that the Optionee wishes to purchase
and (ii) payment in full of the Option Price of the shares for which the Option
is being exercised.

          Payment will be made in cash or through the tender to the Company of,
or written attestation by the Optionee that the Optionee holds, whole shares of
Stock valued at their fair market value (determined in the manner described in
Section 9 above) on the date of exercise, plus cash for any remainder, provided
that such tendered or attested shares must have been held by the Optionee for
such period of time, if any, as is necessary to avoid a charge against our
earnings with respect to such exercise. If the attestation procedure is used,
the Company will withhold a number of shares of Stock otherwise issuable to the
Optionee under the Option which is equal to the number of shares to which such
attestation applies.

          Except as otherwise provided in the applicable Option Agreement, and
subject to the limitation provided in the last sentence of this paragraph with
regard to our Executive Officers and Directors, if at the time of exercise the
Stock is publicly traded on an established securities exchange or market, the
Optionee may exercise an Option by delivering a written

                                      -7-

<PAGE>

direction to us that the Option will be exercised pursuant to a "cashless"
exercise/sale procedure (pursuant to which funds to pay for exercise of the
option are delivered to us by a broker upon receipt of stock certificates from
us) or a "cashless exercise"/loan procedure (pursuant to which the Optionee
would obtain a margin loan from a broker to fund the exercise). Such a procedure
will be effected through a licensed broker acceptable to us. The stock
certificate or certificates for the shares of Stock for which the Option is
exercised will be delivered to such broker as the agent for the individual
exercising the Option and the broker will deliver to us cash (or cash
equivalents acceptable to us) equal to the Option Price for the shares of Stock
purchased pursuant to the exercise of the Option, plus the amount (if any) of
federal and other taxes that we may, in our judgment, be required to withhold
with respect to the exercise of the Option. Our Executive Officers and Directors
will not be permitted to use the "cashless" method of exercise described in this
paragraph without the express prior consent of the Board.

          Any attempt to exercise any Option other than as set forth in this
paragraph (c) will be invalid and of no force and effect.

          Within 30 days after an Optionee exercises an Option and pays in full
the Option Price of the shares of Stock purchased, the Optionee will be entitled
to receive a certificate evidencing such shares. Shares purchased under an
Incentive Stock Option will be represented by a separate certificate and will
not be combined with shares purchased under Nonqualified Options, because of the
rules in the Code relating to disqualifying dispositions of Incentive Stock
Options. An individual holding or exercising an Option will have none of the
rights of a stockholder until the shares of Stock are fully paid and issued. We
will put a legend on Stock certificates issued under the Plan to reflect
restrictions on the sale of the Stock and rights that we have under Section 11
below.

          11.  TRANSFERABILITY OF INCENTIVE AWARDS

               (a)  Options. During the Optionee's lifetime, only the Optionee
may exercise an Incentive Stock Option. No Optionee may assign or transfer any
Incentive Stock Option, except that, in the event of the Optionee's death, the
Option may be transferred by will or the laws of descent and distribution. The
same rules concerning transfers will apply to Nonqualified Options, except that,
to the extent authorized in an Option Agreement, an Optionee may transfer not
for value all or part of a Nonqualified Option to a Family member or a Family
Trust, provided that the transferee will enter into a written agreement to be
bound by the terms of the Plan and the Option Agreement and any subsequent
transfer of the Option will be subject to the transfer restrictions set out in
this Plan. A

                                      -8-

<PAGE>

transfer (i) under a domestic relations order in settlement of marital property
rights or (ii) to an entity in which more than 50% of the voting interests are
owned by Family members (or the Optionee) in exchange for an interest in that
entity, will be considered to be "not for value" for this purpose.

               (b)  Restricted Stock and Stock Units. No Holder may assign or
transfer any shares of Restricted Stock or any Stock Units before the Holder
satisfies the applicable Conditions with respect to such Incentive Award, except
that the Holder may transfer such Restricted Stock or Stock Units subject to
such Conditions by gift to one or more Family members or to a Family Trust.

               (c)  Unrestricted Stock. Shares of Unrestricted Stock will not be
subject to any restrictions on transfer other than those required under federal
or state securities laws.

               (d)  Additional Provisions. The Board may include additional
transfer restrictions and other provisions in any Incentive Award granted under
the Plan.

          12.  TERMINATION OF SERVICE OR EMPLOYMENT

               (a)  General. If an Optionee or a Holder ceases to be an employee
or service-provider of ITC/\DeltaCom and its Affiliates other than because of
death or Disability, any Incentive Award held by the Optionee or Holder that is
not vested will terminate immediately, unless the Board determines otherwise or
unless otherwise provided for in an Agreement or in an applicable employment
agreement between the Optionee or Holder and ITC/\DeltaCom or an Affiliate
(whether or not effective before the Effective Date). Except as otherwise
provided in Section 13 below (in the case of death or Disability) or Section
12(b) below with regard to a termination for Cause, any vested Option will
terminate upon the expiration of three months after termination of the
Optionee's employment or service with ITC/\DeltaCom and its Affiliates, unless a
different period is specified in the Option Agreement or any applicable
employment agreement between the Optionee and ITC/\DeltaCom or any Affiliate
(whether or not effective before the Effective Date). The Board has discretion
to determine whether employment or service continues during an Optionee's leave
of absence on military or government service. If an Optionee or Holder transfers
from ITC/\DeltaCom to an Affiliate, from an Affiliate to ITC/\DeltaCom or from
one Affiliate to another, the employment or service of the Optionee or Holder
will not be deemed to have terminated because of the transfer.

                                      -9-

<PAGE>

               (b) Termination for Cause. If an Optionee's employment with the
Company or an Affiliate is terminated for Cause (as defined in this Section
12(b)), all vested and unvested Options held by the Optionee shall terminate
immediately. In addition, upon a termination for Cause, the Optionee or Holder
shall forfeit to the Company an amount equal to the aggregate gain the Optionee
or Holder recognized pursuant to the grant, vesting or exercise of Incentive
Awards during the twelve (12) month period preceding the Optionee's or Holder's
termination of employment (the "Look-back Period"). For this purpose the
aggregate gain recognized by the Optionee or Holder shall be equal to the sum
of: (i) the aggregate spread value of all Options exercised by the Optionee
(including Options exercised by a Family member or Family Trust) during the
Look-back Period, in which spread value is the difference between the fair
market value of the Stock on the date of the Option exercise and the Option
exercise price; (ii) the aggregate value of all shares of Restricted Stock owned
by the Holder that vested during the Look-back Period, less the purchase price,
if any, of such shares of Restricted Stock; and (iii) the aggregate value of all
shares of Stock delivered to the Optionee pursuant to Stock Units or grants of
Unrestricted Stock during the Look-back Period. "Cause" means, as determined by
the Board and unless otherwise provided in an applicable employment agreement
between the Optionee or Holder and the Company or an Affiliate (whether or not
such employment agreement is effective before the Effective Date), (i) the
Optionee's or Holder's gross negligence or willful misconduct in connection with
the performance of the Optionee's or Holder's duties, (ii) the Optionee's or
Holder's conviction of a criminal offense (other than minor traffic offenses) or
(iii) the Optionee's or Holder's material breach of any term of any employment,
consulting or other services, confidentiality, intellectual property or
non-competition agreement between the Optionee or Holder and the Company or an
Affiliate. Any amount required to be paid by the Optionee or Holder to the
Company pursuant to this Section 12(b) shall be reduced by any amount repaid by
the Optionee or Holder to the Company pursuant to Section 304 of the
Sarbanes-Oxley Act of 2002.

          13.  RIGHTS IN THE EVENT OF DEATH OR DISABILITY

               (a) Death of Optionee. If an Optionee dies while employed by, or
providing service to, ITC/\DeltaCom or an Affiliate, each Option held by the
Optionee will become 100% vested upon the Optionee's death. The Optionee's
personal representative or beneficiaries will have the right within one year
after the date of the Optionee's death and before termination of the Option to
exercise, in whole or in part, the portion of the Option held by the deceased
person when the Optionee died, and the Option will terminate if not exercised
within that period, except that the Board has

                                      -10-

<PAGE>

the authority to specify in any Option Agreement different provisions relating
to the vesting and exercise of a deceased person's Options.

               (b)  Disability of Optionee. If an Optionee terminates employment
or service with the Company because of Disability, each Option held by the
Optionee will become 100% vested upon the Optionee's termination. The Optionee
will have the right, within one year after such termination of employment or
service and before termination of the Option, to exercise, in whole or in part,
the portion of the Option held by such person at the date of termination of
employment or service, and the Option will terminate if not exercised within
that period. However, the Board may specify in any Option Agreement different
terms for the vesting or exercise of an Option in the case of Disability.

               (c)  Disability or Death of Holder. Except as otherwise provided
for in an Agreement, upon the termination of employment or service of a Holder
with the Company because of Disability or Death, the shares of Restricted Stock
and Stock Units held by such Holder will be fully vested.

          14.  USE OF PROCEEDS

          The proceeds that ITC/\DeltaCom receives from the issuance of Stock
pursuant to the Plan will constitute its general funds.

          15.  REQUIREMENTS OF LAW

          We will not issue any shares of Stock under the Plan if doing so would
result in a violation by us or anyone else of any law or regulation, including
any federal or state securities law or regulation. Specifically in connection
with the Securities Act and the regulations thereunder, when we grant Restricted
Stock or Unrestricted Stock, when Restricted Stock becomes vested, when Stock
becomes deliverable pursuant to a grant of Stock Units or when someone exercises
an Option, unless a registration statement under the Securities Act is in effect
with respect to the shares of Stock that we are supposed to issue, we will not
be required to issue any shares of Stock unless and until we have receive
evidence satisfactory to us that the such shares may be issued or sold under an
exemption from registration under the Securities Act. The Board's good faith
determination in this connection will be final, binding, and conclusive.

          We may, but will not be obligated to, register any securities covered
by the Plan under the Securities Act. We are not obligated to take any action in
order to allow an Optionee to exercise an Option or to cause shares issued or
sold pursuant to an Option or because of the grant or vesting

                                      -11-

<PAGE>

of Unrestricted Stock, Restricted Stock or Stock Units to comply with any law or
regulation, including the Securities Act and the regulations thereunder. As to
any jurisdiction that expressly imposes the requirement that an Option will not
be exercisable or that we may not issue or sell shares of Stock unless and until
the shares are registered or are subject to an available exemption from
registration, the issuance or sale of shares of Stock under circumstances in
which such laws apply will be deemed conditioned upon the effectiveness of such
registration or the availability of such an exemption.

          16.  AMENDMENT AND TERMINATION OF THE PLAN

          The Board may amend, suspend or terminate the Plan as to any shares of
Stock as to which Incentive Awards have not been granted. Except as permitted
under Section 17 below, no amendment, suspension or termination of the Plan will
alter or impair any rights or obligations under any Incentive Award previously
granted under the Plan. However, with the consent of the Optionee or Holder, the
Board may amend any outstanding Agreement in a manner not inconsistent with the
Plan.

          Amendments to the Plan not requiring stockholder approval will become
effective when the Board adopts them. Unless otherwise determined by the Board,
amendments requiring stockholder approval will become effective when the Board
adopts them, but no Incentive Stock Option issued after the date of any such
amendment may be exercised (unless the Option could have been exercised without
regard to the amendment) unless and until such amendment will have been approved
by our stockholders. If such stockholder approval is not obtained within 12
months after the Board's adoption of such amendment, any Incentive Stock Option
granted on or after the date of such amendment will be cancelled to the extent
that such amendment to the Plan was required to enable ITC/\DeltaCom to grant
the Incentive Stock Option.

          17.  EFFECT OF CHANGES IN CAPITALIZATION

               (a)  Changes in Stock. If the outstanding shares of our Stock are
increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of ITC/\DeltaCom because of a Capitalization
Change, we will adjust the number and kinds of shares for which we may grant
Options or issue Stock, including any limit on the number of shares of Stock
that may be granted to individuals under the Plan.

               In addition, we will adjust the number and kind of shares for
which Stock Units and Options are outstanding and we will use our reasonable
efforts to adjust the Options so that the proportionate interest of

                                      -12-

<PAGE>

the holder of the Option immediately after the Capitalization Change will be
substantially the same as immediately before that event. Any adjustment in
outstanding Options will not change the aggregate Option Price payable with
respect to shares subject to the unexercised portion of the Option outstanding,
but will include a proportionate adjustment in the Option Price per share. In
making adjustments under this Section, we will follow the rules of Code section
424(a) and the regulations under that section (whether or not the Option is an
Incentive Stock Option).

               (b)  Reorganizations in Which ITC/\DeltaCom is the Surviving
Corporation not Involving a Change of Ownership. If the Company is the surviving
corporation in any reorganization, merger or consolidation that is not a
Corporate Transaction, any Option granted under the Plan will apply to the
securities that a holder of the number of shares of Stock subject to the Option
would have been entitled to receive immediately following the transaction if the
Optionee had exercised the Option in full immediately before the transaction,
with an adjustment of the Option Price per share so that the aggregate Option
Price will not change. In making adjustments under this Section 17, we will
follow the rules of Code section 424(a) and the regulations under that section
(whether or not the Option is an Incentive Stock Option). In the event of a
transaction described in this Section 17(b), Stock Units will be adjusted so as
to apply to the securities that a holder of the number of shares of Stock
subject to the Stock Units would have been entitled to receive immediately
following the transaction.

               (c)  Reorganization in Which ITC/\DeltaCom Is Not the Surviving
Corporation or Involving a Change of Ownership; Sale of Assets or Stock. Upon
the occurrence of any Corporate Transaction, the Plan and all outstanding
Options will terminate, unless ITC/\DeltaCom or our Successor agrees in writing
in connection with the Corporate Transaction to continue the Plan and/or to
assume the Options or to substitute new Options covering the capital stock of a
Successor for the Options and to make appropriate equitable adjustments in the
number and kind of shares covered by the Options and the exercise prices of the
Options, in which event the Plan and Options will continue on such basis. If the
Options and the Plan are terminated under this Section 17: (i) the vesting of
all outstanding Options will be accelerated as if each individual holding an
outstanding Option had been employed or provided services for an additional 12
months at the time of such termination; and (ii) each individual holding an
outstanding Option will be entitled to exercise the Option, to the extent the
Option is vested, for at least 30 days before the Option terminates, except that
the Board may impose reasonable limitations on an Optionee's right to exercise
an unvested Option to the extent necessary to avoid the penalty tax that Code
section 4999 imposes on excess parachute payments. The Board may provide for
additional accelerated vesting in the event of a termination under this

                                      -13-

<PAGE>

Section 17 in an Agreement or an applicable employment agreement between the
Optionee and ITC/\DeltaCom or an Affiliate (whether or not such employment
agreement is effective before the Effective Date). The Board will send written
notice of a Corporate Transaction that will result in such a termination to all
individuals who hold Options not later than the time when we give notice of the
proposed transaction to our stockholders. Unvested shares of Restricted Stock
and unvested Stock Units will not become vested or forfeited in the case of a
Corporate Transaction unless otherwise provided in the Agreement with respect to
those shares of Restricted Stock or Stock Units or in an applicable employment
agreement between the Holder and ITC/\DeltaCom or an Affiliate (whether or not
such employment agreement is effective before the Effective Date).

               (d)  Adjustments. The Board will make the adjustments to our
Stock or securities under this Section 17, and the Board's reasonable
determination in that respect will be final, binding and conclusive. Neither we
nor any Successor will be required to issue any fractional shares of Stock or
units of other securities, and any fractions resulting from any adjustment will
be eliminated in each case by rounding upward to the nearest whole share or unit
(except that, in the case of an Incentive Stock Option, such rounding will be
downward).

               (e)  No Limitations on Company. The grant of Incentive Awards
pursuant to the Plan will not affect or limit in any way our right or power to
make adjustments, reclassifications, reorganizations or changes of our capital
or business structure or to merge, consolidate, dissolve or liquidate, or to
sell or transfer all or any part of our business or assets, without the consent
of any Optionee or Holder.

          18.  WITHHOLDING

          The Company or an Affiliate, as the case may be, has the right to
deduct from payments of any kind otherwise due to an Optionee or Holder any
federal, foreign, state or local taxes of any kind required by law to be
withheld with respect to the vesting of or other lapse of restrictions
applicable to an Incentive Award or upon the issuance of any shares of Stock
upon the exercise of an Option or pursuant to an Incentive Award. At the time of
such vesting, lapse, exercise or issuance, the Optionee or Holder will pay to
the Company or the Affiliate, as the case may be, any amount that the Company or
the Affiliate may reasonably determine to be necessary to satisfy such
withholding obligation. Subject to the prior approval of the Company or the
Affiliate, which may be withheld by the Company or the Affiliate, as the case
may be, in its sole discretion, the Optionee or Holder may elect to satisfy such
obligations, in whole or in part, (i) by causing the Company or the

                                      -14-

<PAGE>

Affiliate to withhold shares of Stock otherwise issuable to the Optionee or
Holder or (ii) by delivering to the Company or the Affiliate shares of Stock
already owned by the Optionee or Holder. The shares of Stock so delivered or
withheld will have an aggregate Fair Market Value equal to such withholding
obligations. The Fair Market Value of the shares of Stock used to satisfy such
withholding obligation will be determined by the Company or the Affiliate as of
the date that the amount of tax to be withheld is to be determined. An Optionee
or Holder who has made an election pursuant to this Section 18 may satisfy his
or her withholding obligation only with shares of Stock that are not subject to
any repurchase, forfeiture, unfulfilled vesting or other similar requirements.

          19.  DISCLAIMER OF RIGHTS

          No provision in the Plan or in any Incentive Award granted or
agreement entered into pursuant to the Plan will be construed to confer upon any
individual the right to remain in the employ or service of ITC/\DeltaCom or any
Affiliate, or to interfere in any way with our right and authority to increase
or decrease the compensation of any individual at any time, or to terminate any
employment or other relationship we have with any individual. Our obligation to
pay any amounts or issue any Stock under the Plan is only a contractual
obligation to pay only those amounts, in the manner and under the conditions
prescribed in the Plan and applicable Agreements. We are not required to
transfer any amounts to a third party trustee or otherwise hold any amounts in
trust or escrow for payment to any participant or beneficiary under the Plan.

          20.  NONEXCLUSIVITY OF THE PLAN

          The Plan does not limit in any way the right and authority of the
Board to adopt other incentive compensation arrangements that apply generally or
that are limited to single individuals, including arrangements providing for the
award of unrestricted stock, restricted stock, stock units, stock options or
stock appreciation rights.

          21.  DEFINITIONS

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

          "Affiliate" means any Person that controls, is controlled by or is
under common control with ITC/\DeltaCom within the meaning of Rule 405 of
Regulation C under the Securities Act (as defined herein).

                                      -15-

<PAGE>

          "Agreement" means a written Option Agreement, Unrestricted Stock
Agreement, Restricted Stock Agreement, Stock Unit Agreement or other agreement
between the Company and an Eligible Individual that evidences and sets out the
terms and conditions of an Incentive Award.

          "Board" means the board of directors of the Company.

          "Capitalization Change" means a recapitalization, reclassification,
stock split-up, combination of shares, exchange of shares, stock dividend or
other distribution payable in capital stock, or other increase or decrease in
such shares effected without receipt of consideration by the Company, occurring
after the Effective Date.

          "Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended or the corresponding provision of any subsequently enacted tax
statute.

          "Committee" means a committee of, and designated from time to time by
resolution of, the Board, which will consist of no fewer than two members of the
Board. During any time when the Company has a class of equity securities
registered under Section 12 of the Exchange Act, at least two members of the
Committee will qualify in all respects as (i) "non-employee directors" within
the meaning of Rule 16b-3 under the Exchange Act or any successor rule or
regulation, (ii) "outside directors" for purposes of Code section 162(m) and
(iii) "independent directors" as required by rules, regulations or practices
promulgated by The NASDAQ Stock Market, Inc. or any other stock exchange or
market on which the Stock is traded (to the extent so required), unless the
Board determines that satisfaction of such requirements is impractical or
unnecessary.

          "Company" means ITC/\DeltaCom, Inc., a Delaware corporation, and any
successor or assignee of ITC/\DeltaCom, Inc. that assumes the Plan or Incentive
Awards granted hereunder.

          "Conditions" means the continuous service requirements that must be
met before shares of Restricted Stock or Stock Units become vested.

          "Corporate Transaction" means any of the following: (i) the
dissolution or liquidation of the Company; (ii) a merger, consolidation or
reorganization of the Company in which the Company is not the surviving
corporation; (iii) a sale of all or substantially all of the assets of the
Company to another person; or (iv) any other transaction (including a merger or
reorganization in which the Company is the surviving corporation) that

                                      -16-

<PAGE>

results in any person or entity beneficially owning (within the meaning of Rule
13d-3 under the Exchange Act) more than 50% of the combined voting power of all
classes of voting securities of the Company.

          "Director" means a member of the Board.

          "Disability" means permanent and total disability as defined in Code
section 22(e)(3).

          "Effective Date" means October 29, 2002, which is the date on which
the Board adopted the Plan.

          "Eligible Individual" means any individual who is an employee,
officer, Director or consultant of ITC/\DeltaCom or any Affiliate.

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

          "Executive Officer" means an officer within the meaning of the
Sarbanes-Oxley Act of 2002. For this purpose, and without limiting the
foregoing, Executive Officer will include an "executive officer" of the Company
within the meaning of Rule 3b-7 under the Exchange Act.

          "Family" means the, child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of
the Optionee or Holder, including adoptive relationships, or any person sharing
the Optionee or Holder's household (other than a tenant or employee).

          "Family Trust" means a trust, limited liability company or partnership
in which members of the Family of the Optionee or Holder have more than 50% of
the beneficial interest, a foundation in which members of the Family of the
Optionee or Holder (or the Optionee or Holder) control the management of assets,
and any other entity in which members of the Family of the Optionee or Holder
(or the Optionee or Holder) own more than 50% of the voting interests.

          "Holder" means an individual to whom the Company has granted shares of
Unrestricted Stock, Restricted Stock or Stock Units under the Plan.

                                      -17-

<PAGE>

          "Incentive Award" means an Option, Unrestricted Stock, Restricted
Stock or Stock Units grant.

          "Incentive Stock Option" means an Option that is an "incentive stock
option" within the meaning of Code section 422, or the corresponding provision
of any subsequently enacted tax statute, as amended from time to time.

          "ITC/\DeltaCom" means the Company.

          "Nonqualified Option" means an Option that is not an Incentive Stock
Option.

          "Option" means a written option granted by the Company pursuant to the
Plan under which the Optionee has the right to purchase one or more shares of
Stock at a specified price for a specified period of time.

          "Option Agreement" means a written agreement between the Company and
the Optionee that sets forth terms of an Option.

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

          "Optionee" means an individual to whom the Company has granted an
Option under the Plan, while such Option continues to be outstanding.

          "Person" means any person or group within the meaning of section
13(d)(3) or 14(d)(2) of the Exchange Act.

          "Plan" means this ITC/\DeltaCom, Inc. Stock Incentive Plan.

          "Plan of Reorganization" means our plan of reorganization confirmed by
order of the United States Bankruptcy Court for the District of Delaware entered
on October 17, 2002 in In re ITC/\DeltaCom, Inc. (Case No. 02-11848) (MFW)).

          "Restricted Stock" means shares of Stock awarded pursuant to Section
6(c) of the Plan that may be subject to restrictions and a substantial risk of
forfeiture.

                                      -18-

<PAGE>

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

          "Stock" means the common stock, par value $0.01 per share, of
ITC/\DeltaCom.

          "Stock Unit" means a bookkeeping entry representing the equivalent of
shares of Stock, awarded pursuant to Section 6(d) of the Plan.

          "Subsidiary" means any "subsidiary corporation" or "parent
corporation" of the Company within the meaning of Code section 424(f).

          "Successor" means any corporation that is a successor corporation to
ITC/\DeltaCom in a transaction described in Section 17 of the Plan, and any
parent or subsidiary corporation thereof

          "10% Stockholder" means an individual who owns capital stock
possessing more than 10% of the total combined voting power of all classes of
capital stock of ITC/\DeltaCom or any Subsidiary within the meaning of Code
section 422(b)(6) and 424(d).

          "Unrestricted Stock" means shares of Stock awarded pursuant to Section
6(b) of the Plan.

          "We, us and our" refer to the Company.

                                      * * *

          The Plan was duly adopted and approved by the Board on the 29th day of
October, 2002.

                                               /s/ J. Thomas Mullis
                                               ---------------------------------
                                               Secretary

          The Plan was amended and restated by the Board as of the 5th day of
December, 2002.

                                               /s/ J. Thomas Mullis
                                               --------------------------------
                                               Secretary

                                      -19-

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