8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 31, 2007

ITC^DeltaCom, Inc.

(Exact name of registrant as specified in its charter)

Delaware	0-23253	58-2301135
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

7037 Old Madison Pike Huntsville, Alabama	35806
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (256) 382-5900

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2-(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

On July 31, 2007, ITC^DeltaCom, Inc. (the “Company”) and its subsidiaries entered into and amended various definitive agreements in connection with the consummation of the Company’s previously announced recapitalization and related transactions, as described below. On the same date, the Company completed the recapitalization and other transactions contemplated by the agreements. The effect of the transactions was to refinance or retire substantially all of the Company’s previously outstanding funded debt and to eliminate all series of its previously authorized preferred stock and substantially all related stock warrants. Immediately after the consummation of the transactions, the Company’s outstanding capital stock consisted of approximately 66,970,000 shares of common stock and 412,215 shares of a new issue of preferred stock convertible into a maximum of 13,604,455 shares of common stock. Upon the consummation of the transactions, the Company had outstanding funded debt under new senior secured credit facilities in the aggregate principal amount of $305 million, a $10 million undrawn revolving credit facility and approximately $50 million in unrestricted cash.

Credit Agreements

On July 31, 2007, the Company and its subsidiaries entered into two new credit agreements under which they obtained first lien and second lien senior secured credit facilities.

First Lien Credit Agreement. On July 31, 2007, the Company entered into a First Lien Credit Agreement, dated as of July 31, 2007 (the “First Lien Credit Agreement”), among the Company, Interstate FiberNet, Inc. (“IFN”), which is the Company’s wholly-owned subsidiary and the borrower under the First Lien Credit Agreement, Credit Suisse, as Administrative Agent and Collateral Agent (the “First Lien Agent”), and the lenders from time to time under the First Lien Credit Agreement. Pursuant to the First Lien Credit Agreement, IFN obtained $240 million in aggregate principal amount of first lien secured credit facilities (the “First Lien Credit Facility”), which consist of a term loan facility in an aggregate principal amount of $230 million (the “First Lien Term Loan Facility”) and a revolving credit facility in an aggregate principal amount of $10 million outstanding at any time (the “Revolving Credit Facility”).

All amounts under the First Lien Term Loan Facility were fully drawn on July 31, 2007. The Company and IFN used the proceeds of the First Lien Term Loan Facility along with the proceeds of the other transactions described in this report to refinance or retire substantially all of the previously outstanding funded debt of the Company and its subsidiaries, other than $18.5 million principal amount of 10.5% Senior Notes, which will be repaid in full on August 13, 2007 out of funds escrowed by the Company for such purpose. Amounts available under the Revolving Credit Facility may be drawn from time to time for application to general corporate purposes.

The First Lien Term Loan Facility will mature on July 31, 2013, which is the sixth anniversary of the facility closing date. The Revolving Credit Facility will mature on July 31, 2012.

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Scheduled quarterly principal payments of $575,000 under the First Lien Term Loan Facility will begin in the first quarter of 2008. The Company is required to make principal prepayments under the First Lien Credit Facility from (1) specified excess cash flows from operations and (2) the net proceeds of specified types of asset sales and debt issuances. The Company may prepay borrowings outstanding under the First Lien Credit Facility without premium or penalty.

Interest accrued on borrowings outstanding under the First Lien Credit Facility generally are payable on a quarterly basis. Such borrowings bear interest, at the borrower’s option, at an annual rate equal to either (1) a specified base rate plus 3% or (2) a specified London Inter-Bank Offered Rate (“LIBOR”) plus 4%. Borrowings under the Revolving Credit Facility bear interest, at the borrower’s option, at an annual rate equal to either (a) a specified base rate plus a margin of 2.50% to 3.00% or (b) LIBOR plus a margin of 3.50% to 4.00%. The applicable margin is determined based upon the Company’s consolidated leverage ratio at the specified measurement date. The base rate is equal to a specified prime lending rate or, if higher, the overnight federal funds rate plus .50%.

All of the borrower’s obligations under the First Lien Credit Facility are guaranteed by the Company and the Company’s other subsidiaries pursuant to a First Lien Guarantee and Collateral Agreement (the “First Lien Security Agreement”) among the Company, IFN, the subsidiary guarantors and the First Lien Agent. The First Lien Security Agreement grants a first priority security interest in, and a first priority lien on, substantially all of the assets and property of the Company and the Company’s subsidiaries for the benefit of the First Lien Agent and the secured parties under the First Lien Security Agreement.

The First Lien Credit Facility contains default provisions and affirmative and negative covenants customarily applicable to first lien secured credit facilities. The Company is required to maintain compliance with specified financial ratios based on measures that include levels of indebtedness and earnings before interest, taxes, depreciation, amortization and other specified items.

The Company may elect, subject to pro forma compliance with specified financial covenants and other conditions, to solicit the lenders under the First Lien Credit Facility to increase commitments for borrowings under the First Lien Credit Facility by an aggregate principal amount of up to $25 million.

Second Lien Credit Facility. On July 31, 2007, the Company entered into a Second Lien Credit Agreement, dated as of July 31, 2007 (the “Second Lien Credit Agreement”), among the Company, IFN, which is the borrower under the Second Lien Agreement, Credit Suisse, as Administrative Agent and Collateral Agent (the “Second Lien Agent”), and the lenders from time to time under the Second Lien Agreement, including Special Value Opportunities Fund, LLC, Special Value Expansion Fund, LLC, Special Value Continuation Partners, LP and Tennenbaum Opportunities Partners V, LP. The foregoing investment funds (the “TCP Funds”) are managed by Tennenbaum Capital Partners, LLC (“TCP”), which is an investment firm. Pursuant to the Second Lien Credit Agreement, IFN obtained from the TCP Funds a second lien secured credit facility in an aggregate principal amount of $75 million (the “Second Lien Credit Facility”).

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All amounts under the Second Lien Credit Agreement were fully drawn on July 31, 2007. The Company and IFN applied the proceeds of the Second Lien Credit Facility along with the proceeds of the other transactions described in this report to the payment of the obligations described above under “First Lien Credit Agreement.”

The Second Lien Credit Facility will mature on July 31, 2014, which is the seventh anniversary of the facility closing date.

There are no scheduled principal payments before maturity under the Second Lien Credit Facility. If all amounts under the First Lien Credit Facility have been paid in full, the Company is required to make principal prepayments under the Second Lien Credit Facility from (1) specified excess cash flows from operations and (2) the net proceeds of specified types of asset sales and debt issuances. Prepayment of borrowings outstanding under the Second Lien Credit Facility before July 31, 2009 will require payment of a premium.

Interest accrued on borrowings outstanding under the Second Lien Credit Facility generally are payable on a quarterly basis. Borrowings under the Second Lien Credit Agreement bear interest, at the borrower’s option, at an annual rate equal to either (1) a specified base rate plus 6.50% or (2) LIBOR plus 7.50%. The base rate is equal to a specified prime lending rate or, if higher, the overnight federal funds rate plus .50%. For interest payments covering any interest period ending on or before July 31, 2009, the borrower may elect to pay interest under the facility either entirely in cash or by adding to the principal of outstanding borrowings an amount equal to the amount of interest accrued at an annual rate of up to 4% and by paying the balance of the accrued interest in cash.

All obligations under the Second Lien Credit Facility are guaranteed by the Company and the Company’s other subsidiaries pursuant to a Second Lien Guarantee and Collateral Agreement (the “Second Lien Security Agreement”) among the Company, IFN, the subsidiary guarantors and the Second Lien Agent. The Second Lien Security Agreement grants a second priority security interest in, and a second priority lien on, substantially all of the assets and property of the Company and the Company’s subsidiaries for the benefit of the Second Lien Agent and the secured parties under the Second Lien Credit Agreement.

The Second Lien Credit Facility contains default provisions and affirmative and negative covenants customarily applicable to second lien secured credit facilities. The Company is required to maintain compliance with specified financial ratios based on measures that include levels of indebtedness and earnings before interest, taxes, depreciation, amortization and other specified items.

Certain of the TCP Funds and other investment funds managed by TCP were lenders to the Company under debt arrangements that were repaid or otherwise satisfied as a result of the transactions described in this report. Such investment funds purchased some of IFN’s first lien senior secured notes due 2009 (the “First Lien Notes”) and third lien senior secured notes due 2009 (the “Third Lien Notes”) and related warrants of the Company which were issued in connection with the refinancing of the Company’s secured indebtedness on July 26, 2005. Some of the TCP Funds also were lenders under the Company’s previous $57.2 million second lien credit facility as amended on July 26, 2005. In the transactions described in this report, all of the First Lien Notes were repaid out of the proceeds of the new credit facilities and substantially all of the Third Lien Notes and all of the related warrants held by

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TCP-managed funds were exchanged for the Company’s common stock. Under the Company’s governance agreement referred to below, investment funds managed by TCP have the right to designate two representatives for appointment or nomination for election to the Company’s board of directors. Two of the Company’s current directors were appointed to the board of directors in accordance with the designation rights. Information about these board representation rights and the Company’s transactions with TCP and the investment funds managed by TCP is contained in the Company’s filings with the SEC.

Copies of the First Lien Credit Agreement, the First Lien Security Agreement, the Second Lien Credit Agreement and the Second Lien Security Agreement are filed as exhibits 10.1 through 10.4 to this report. The foregoing summary of the terms of these agreements is qualified in all respects by reference to the text of the agreements, which are incorporated by reference in this Item 1.01.

Recapitalization Agreements

Equity Exchange Agreements. On July 31, 2007, the Company entered into agreements (the “Equity Exchange Agreements”) with various holders of the Company’s 8% Series A Convertible Redeemable Preferred Stock (the “Series A preferred stock”), 8% Series B Convertible Redeemable Preferred Stock (the “Series B preferred stock”), common stock purchase warrants originally issued on October 6, 2003 (the “Series B warrants”), common stock purchase warrants originally issued on March 29, 2005 (the “Series C warrants”) and warrants to purchase common stock and the Company’s 8% Series C Convertible Redeemable Preferred Stock originally issued on July 26, 2005 (the “Series D warrants”). The Equity Exchange Agreements provided for the conversion of 50% of the outstanding Series A preferred stock and all outstanding Series B preferred stock into the Company’s common stock, the redemption for cash of the remaining 50% of the outstanding Series A preferred stock, and the exchange of all outstanding Series B warrants, Series C warrants and Series D warrants for the Company’s common stock. The Company entered into the following Equity Exchange Agreements:

• Series A Preferred Stockholder Agreement, dated as of July 31, 2007, among the Company and holders of the Series A preferred stock, pursuant to which the Company issued 1,747,929 shares of common stock upon the conversion of 50% of the 201,883 outstanding shares of Series A preferred stock and redeemed for cash the remaining 50% of the outstanding shares of Series A preferred stock for an aggregate redemption price of $11,000,425;

• WCAS Exchange Agreement, dated as of July 31, 2007, among the Company and Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS Capital Partners III, L.P. and other securityholders of the Company affiliated or associated with Welsh, Carson, Anderson & Stowe (“WCAS Securityholders”), pursuant to which the Company issued (1) 11,735,080 shares of common stock upon the conversion of all 607,087 outstanding shares of the Series B preferred stock, (2) 5,789 shares of common stock in exchange for all 3,000,000 outstanding Series B warrants (of which 5,306 shares were issued to WCAS Securityholders in exchange for the 2,750,000 outstanding Series B warrants held by WCAS Securityholders), and (3) 4,902,557 shares of common stock in exchange for all 20,000,000 outstanding Series C Warrants; and

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• Series D Warrant Exchange Agreement, dated as of July 31, 2007, among the Company and the non-management holders of the Series D warrants, including investment funds managed by TCP, pursuant to which the Company issued 5,598,649 shares of common stock in exchange for 9,000,000 Series D warrants.

Note Exchange Agreements. On July 31, 2007, the Company and IFN entered into agreements (the “Note Exchange Agreements”) with holders of $52.3 million principal amount of Third Lien Notes. The Note Exchange Agreements provided for the exchange of the foregoing Third Lien Notes, all of which were supported by the Company’s full and unconditional guarantee, for the Company’s common stock. The Company and IFN entered into the following Note Exchange Agreements:

• Exchange Agreement, dated as of July 31, 2007, among the Company, IFN and certain of the WCAS Securityholders, pursuant to which the Company issued 7,757,524 shares of the Company’s common stock in exchange for $23.5 million aggregate principal amount of Third Lien Notes;

• Exchange Agreement, dated as of July 31, 2007, among the Company, IFN and Special Value Absolute Return Fund, LLC, Special Value Bond Fund II, LLC and Special Value Continuation Partners, LP, all of which are investment funds managed by TCP, pursuant to which the Company issued 8,259,193 shares of common stock in exchange for $25.0 million aggregate principal amount of Third Lien Notes; and

• Exchange Agreement, dated as of July 31, 2007, among the Company, IFN and various investment funds managed by Babson Capital Management LLP, pursuant to which the Company issued 1,259,074 shares of common stock in exchange for $3.815 million aggregate principal amount of Third Lien Notes.

On July 31, 2007, upon the conversion and exchange of the foregoing securities pursuant to the Equity Exchange Agreements and the Note Exchange Agreements, the Company issued a total of 41,265,795 shares of common stock to the holders of those securities.

Common Stock Purchase Agreement

On July 31, 2007, the Company entered into a Stock Purchase Agreement, dated as of July 31, 2007 (the “Common Stock Purchase Agreement”), among the Company and certain WCAS Securityholders, pursuant to which the Company issued and sold for cash 6,937,724 shares of common stock at a purchase price of $3.03 per share and at an aggregate purchase price of $21 million.

Amendments to Other Agreements

Governance Agreement. On July 31, 2007, the Company entered into an amendment to the Amended and Restated Governance Agreement, dated as of July 26, 2005, among the Company, certain of the WCAS Securityholders, certain TCP-managed investment funds and other securityholders of the Company to exclude from the equity subscription provisions of the agreement issuances of common stock, preferred stock and other securities pursuant to the transactions described in this report and related transactions.

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WCAS Registration Rights Agreement. On July 31, 2007, the Company entered into an amendment to the Registration Rights Agreement, dated as of October 6, 2003, as amended, among the Company and certain of the WCAS Securityholders to provide that the common stock issued to the WCAS Securityholders in accordance with the agreements described above will be entitled to the benefits of such registration rights agreement.

TCP Registration Rights Agreement. On July 31, 2007, the Company entered into an amendment to the Registration Rights Agreement, dated as of July 26, 2005, among the Company and certain TCP-managed investment funds and other securityholders of the Company to provide that the common stock issued to such securityholders in accordance with the agreements described above will be entitled to the benefits of such registration rights agreement.

The WCAS Securityholders are affiliates or associates of Welsh, Carson, Anderson & Stowe (“WCAS”), which is a private equity firm. The controlling affiliates of the investment funds that constitute WCAS have reported in SEC filings that such affiliates and funds, as a group, beneficially own capital stock of the Company representing a majority of the voting power of the Company’s outstanding capital stock. Pursuant to the exercise of director designation rights contained in the Company’s governance agreement referred to above and the terms of the Series B preferred stock, three of the Company’s nine directors are members of, or affiliated with members of, this group. Information about these board representation rights, the group’s beneficial ownership of the Company’s capital stock, and the Company’s transactions with members of the group is contained in the Company’s filings with the SEC.

Copies of the Equity Exchange Agreements, the Note Exchange Agreements, the Common Stock Purchase Agreement and the other agreements described above are filed as exhibits 10.6 through 10.12 and exhibits 10.16 through 10.18 to this report. The foregoing summary of the terms of these agreements is qualified in all respects to the texts of the agreements, which are incorporated by reference in this Item 1.01.

Item 1.02 Termination of a Material Definitive Agreement

Termination of Debt Agreements

The information set forth under Item 1.01 of this report is incorporated by reference in this Item 1.02.

On July 31, 2007, IFN used the proceeds of the First Lien Credit Facility and the Second Lien Credit Facility and the other transactions described in Item 1.01 of this report to repay in full all amounts outstanding under the following agreements:

• the Note Purchase Agreement, dated as of July 26, 2005, as amended, among the Company, as Parent, IFN, as Issuer, the Subsidiary Guarantors named therein, the Note Purchasers named therein, TCP, as Agent, and TCP Agency Services, LLC, as Collateral Agent, pursuant to which IFN issued the First Lien Notes;

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• the Second Amended and Restated Credit Agreement, dated as of July 26, 2005, as amended, among the Company, as Parent, IFN, as Borrower, the Subsidiary Guarantors named therein, the Lenders named therein and General Electric Capital Corporation, as Administrative Agent and Collateral Agent; and

• the Securities Purchase Agreement, dated as of July 26, 2005, as amended, among the Company, as Parent, IFN, as Issuer, the Subsidiary Guarantors named therein, the Purchasers named therein, TCP, as Agent, and TCP Agency Services, LLC, as Collateral Agent, pursuant to which IFN issued the Third Lien Notes and the Company issued 9,000,000 Series D warrants.

On July 31, 2007, IFN applied a total of approximately $246.1 million to repay all outstanding First Lien Notes and related obligations under the foregoing Note Purchase Agreement, a total of approximately $57.2 million to repay all loans and other obligations outstanding under the foregoing Second Amended and Restated Credit Agreement, and a total of approximately $5.6 million to repay all outstanding Third Lien Notes not exchanged for common stock and related obligations under the foregoing Securities Purchase Agreement. Upon the repayment of the foregoing amounts, and the consummation of the transactions described in Item 1.01 of this report, each of the foregoing agreements and all security arrangements and related rights of the noteholders and lenders thereunder were terminated.

In addition, on July 31, 2007, the Company and its subsidiaries repaid approximately $4.3 million of vendor notes and approximately $1.4 million of capital leases, which obligations terminated upon such repayment.

Termination of Warrant Agreements

On July 31, 2007, the Company and Mellon Investor Services LLC, as Warrant Agent, entered into amendments to the warrant agreements pursuant to which the Company issued the Series B warrants, the Series C warrants and the Series D warrants. The amendments, which are filed as exhibits 10.13 through 10.15 to this report and incorporated by reference in this Item 1.02, provided that the agreements would terminate upon the consummation of the exchange of each series of warrants for common stock pursuant to the Equity Exchange Agreements and related agreements described in this report. Each of the warrant agreements terminated effective on July 31, 2007 in accordance with the terms of the amendments.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information set forth under Item 1.01 of this report is incorporated by reference in this Item 2.03.

On July 31, 2007, upon the closing of the First Lien Credit Facility and the Second Lien Credit Facility as described in Item 1.01 of this report, IFN became obligated as the borrower, and the Company and its other subsidiaries became obligated as guarantors, under the following secured indebtedness:

• $230 million principal amount of first lien secured indebtedness under the First Lien Credit Agreement; and

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• $75 million principal amount of second lien secured indebtedness under the Second Lien Credit Agreement.

Subject to conditions of availability established under the First Lien Credit Agreement, IFN may become obligated as the borrower, and the Company and its other subsidiaries may become obligated as guarantors, under up to an additional $10 million principal amount of first lien secured indebtedness outstanding under the Revolving Credit Facility at any time.

The payment of all outstanding principal, interest and other amounts outstanding from time to time under the First Lien Credit Facility and the Second Lien Credit Facility may be declared immediately due and payable upon the occurrence of an event of default. The credit agreement for each facility contains customary events of default, including an event of default upon a change of control of the Company. An event of default will occur under each such credit agreement if IFN or, in some circumstances, another loan party fails to make payments when due, fails to comply with specific affirmative or negative covenants, makes a material misrepresentation, defaults on other specified indebtedness, fails to discharge specified judgments, becomes subject to specified claims under ERISA, or becomes subject to specified events of bankruptcy, insolvency, reorganization or similar events. If an event of default occurs and is not cured within any applicable grace period or is not waived, the lenders would have the right to accelerate repayment of the indebtedness under the facilities to the extent provided in the credit documents and applicable law.

Item 3.02 Unregistered Sales of Equity Securities

The information set forth under Items 1.01, 3.03 and 5.02 of this report is incorporated by reference in this Item 3.02.

In connection with its issuance of shares of common stock pursuant to the Equity Exchange Agreements and the Note Exchange Agreements, its issuance of units for common stock as described in Item 5.02 of this report and its issuance and sale of shares of common stock pursuant to the Common Stock Purchase Agreement, the Company relied on exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), afforded by Sections 3(a)(9) and 4(2) of the Securities Act and Regulation D thereunder. No commission or other remuneration was paid or given in connection with exchanges of securities with the Company’s existing securityholders effected in reliance on Section 3(a)(9) of the Securities Act. The non-public offering of common stock in reliance on Section 4(2) of the Securities Act and Regulation D thereunder was made exclusively to investors whom the Company reasonably believed are “accredited investors,” as such term is defined in Rule 501(a) under the Securities Act.

On July 31, 2007, the Company closed its previously reported sale of 412,215 shares of a new issue of its 6% Series H Convertible Redeemable Preferred Stock (the “Series H preferred stock”) at a purchase price of $100 per share and at an aggregate purchase price of approximately $41.2 million pursuant to an Equity Purchase and Rights Offering Agreement, dated as of July 16,

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2007, among the Company and the three institutional purchasers of the Series H preferred stock. As reported in its current report on Form 8-K filed on July 20, 2007, the Company made its non-public offering and sale of the Series H preferred stock to the purchasers in reliance on the exemption from registration under the Securities Act afforded by Section 4(2) of the Securities Act and Regulation D thereunder. A copy of the foregoing Equity Purchase and Rights Offering Agreement is filed as exhibit 10.5 to this report and incorporated by reference in this Item 3.02.

Item 3.03 Material Modification to Rights of Security Holders

The information set forth under Items 3.02 and 5.03 of this report is incorporated by reference in this Item 3.03.

On July 31, 2007, upon the consummation of the transactions contemplated by the Equity Exchange Agreements described in Item 1.01 of this report, all outstanding shares of the Series A preferred stock and the Series B preferred stock were either converted into the Company’s common stock or redeemed for cash. In addition, on July 31, 2007, as described in Item 5.03 of this report, the Company amended its restated certificate of incorporation to eliminate all matters set forth in the certificate of designation of the Company’s 8% Series C Convertible Redeemable Preferred Stock (the “Series C preferred stock”), which had been previously authorized solely for issuance upon the exercise of the Series D warrants. As a result of the foregoing transactions, holders of the Company’s common stock ceased to be subject to the actual or potential dividend and liquidation preferences of the Series A, Series B and Series C preferred stock from and after July 31, 2007.

The holders of the Company’s common stock will be subject to the rights and preferences of the Series H preferred stock, which was issued on July 31, 2007. Holders of the Series H preferred stock will be entitled to receive dividends that will have preference over any payment of dividends on the common stock. In addition, the holders of the Series H preferred stock will have claims against the Company’s assets senior to the claim of the holders of the common stock in the event of the Company’s liquidation, dissolution or winding-up. The amount of those senior claims for each outstanding share of Series H preferred stock will be equal to the $100 liquidation preference of such share. The Company is obligated to redeem the outstanding shares of the Series H preferred stock with the proceeds of a public rights offering for its common stock which the Company will conduct following the closing of the transactions described in this report. Any share of Series H preferred stock that is not redeemed from the proceeds of the rights offering will mandatorily and automatically convert into 33 shares of common stock at the earlier of the conclusion of the rights offering or January 31, 2008. If all of the rights are exercised, the Series H preferred stock would be redeemed in full. For a description of the terms of the Series H preferred stock, see the summary of such terms contained in the Company’s current report on Form 8-K filed on July 20, 2007, which summary is incorporated by reference in this Item 3.03.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

The information set forth under Item 1.01 of this report is incorporated by reference in this Item 5.02.

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(e)    Effective as of July 31, 2007, to adjust compensatory equity awards granted in 2005 to the Company’s Chief Executive Officer, Randall E. Curran, and Executive Vice President and Chief Financial Officer, Richard E. Fish, Jr., for the recapitalization transactions described in this report, the Company’s board of directors approved:

• amendments to the ITC^DeltaCom, Inc. Executive Stock Incentive Plan to eliminate plan awards of restricted stock units for Series A preferred stock and Series B preferred stock and to increase to 4,000,000 from 2,000,000 shares the maximum number of shares of common stock issuable pursuant to common stock units awarded under the plan;

• amendments to outstanding stock unit awards for a total of 9,666 shares and 2,417 shares of Series A preferred stock under the plan held by Messrs. Curran and Fish, respectively, to convert those awards into common stock units for a total of 181,008 shares of common stock for Mr. Curran and 45,252 shares of common stock for Mr. Fish;

• amendments to outstanding stock unit awards for a total of 29,061 shares and 7,265 shares of Series B preferred stock under the plan held by Messrs. Curran and Fish, respectively, to convert those awards into common stock units for a total of 608,478 shares of common stock for Mr. Curran and 152,119 shares of common stock for Mr. Fish; and

• amendments to outstanding awards of 485,175 and 121,294 Series D warrants held by Messrs. Curran and Fish, respectively, to convert those awards into common stock units for 296,840 shares of common stock for Mr. Curran and 74,210 shares of common stock for Mr. Fish.

The vesting and share delivery provisions applicable to the foregoing common stock units awarded to Messrs. Curran and Fish are the same as the vesting and share delivery provisions of the awards that were amended, as previously reported by the Company.

Copies of the amended and restated Executive Stock Incentive Plan and the forms of amended award agreements are filed as exhibits 10.19 through 10.22 to this report. The foregoing summary of provisions of the amendments is qualified in its entirety by reference to the text of the amendments, which are incorporated by reference in this Item 5.02.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

The information set forth under Items 1.01 and 3.02 of this report is incorporated by reference in this Item 5.03.

On July 31, 2007, the Company made a number of amendments to its restated certificate of incorporation in connection with the recapitalization and related transactions described in Item 1.01 of this report.

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Amendment to Series A Preferred Stock Certificate of Designation

On July 31, 2007, the Company amended the Series A preferred stock certificate of designation, which forms a part of the Company’s restated certificate of incorporation, to effectuate the conversion of 50% of the outstanding shares of Series A preferred stock into shares of the Company’s common stock and the redemption for cash of the remaining 50% of the outstanding shares of Series A preferred stock, effective as of such date.

Amendment to Series B Preferred Stock Certificate of Designation

On July 31, 2007, the Company amended the Series B preferred stock certificate of designation, which forms a part of the Company’s restated certificate of incorporation, to effectuate the conversion of all of the outstanding shares of Series B preferred stock into shares of the Company’s common stock, effective as of such date.

Series C Preferred Stock Certificate of Elimination

On July 31, 2007, the Company filed with the Delaware Secretary of State a certificate that eliminated from the Company’s restated certificate of incorporation all matters set forth in the certificate of designation of the Company’s Series C preferred stock, which formed a part of the Company’s restated certificate of incorporation. No shares of the Series C preferred stock were outstanding as of July 31, 2007.

Series H Preferred Stock Certificate of Designation

On July 31, 2007, the Company filed the Series H preferred stock certificate of designation with the Delaware Secretary of State. Upon filing, this certificate of designation created the Series H preferred stock and became a part of the Company’s restated certificate of incorporation.

A copy of the Company’s restated certificate of incorporation that includes each of the foregoing amendments is filed as exhibit 3.1 to this report. The foregoing summary of the provisions of such amendments is qualified in all respects by reference to the text of the amendments, which are incorporated by reference in this Item 5.03.

Item 9.01 Financial Statements and Exhibits

(d)    Exhibits

The Company herewith files the following exhibits:

Exhibit No.

Description

3.1

Restated Certificate of Incorporation of ITC^DeltaCom, Inc. (including (a) the Certificate of Amendment to the Second Amended Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series A Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof, (b) the Certificate of Amendment to the Amended Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series B Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof, (c) the Certificate of Elimination of 8% Series C Convertible Redeemable Preferred Stock, and (d) the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 6% Series H Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof ).

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4.1	Specimen representing the 6% Series H Convertible Redeemable Preferred Stock, par value $0.01 per share, of ITC^DeltaCom, Inc.
10.1	First Lien Credit Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc., as Borrower, Credit Suisse, as Administrative Agent and Collateral Agent, and the Lenders from time to time parties thereto.
10.2	First Lien Guarantee and Collateral Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc., as Borrower, the Subsidiaries of ITC^DeltaCom, Inc. from time to time party thereto, and Credit Suisse, as Collateral Agent.
10.3	Second Lien Credit Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc., as Borrower, Credit Suisse, as Administrative Agent and Collateral Agent, and the Lenders from time to time parties thereto.
10.4	Second Lien Guarantee and Collateral Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc., as Borrower, the Subsidiaries of ITC^DeltaCom, Inc. from time to time party thereto, and Credit Suisse, as Collateral Agent.
10.5	Equity Purchase and Rights Offering Agreement, dated as of July 16, 2007, among ITC^DeltaCom, Inc. and the Purchasers listed on the signature pages thereof.
10.6	Exchange Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc. and the persons listed under the heading “WCAS Holders” on the signature pages thereof.
10.7	Exchange Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc. and the persons listed under the heading “TCP Holders” on the signature pages thereof.

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10.8	Exchange Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc. and the persons listed under the heading “Babson Entities” on the signature pages thereof.
10.9	Series A Preferred Stockholder Agreement, dated as of July 31, 2007, among the Company and the persons listed under the heading “Series A Preferred Stockholders” on the signature pages thereof.
10.10	WCAS Exchange Agreement, dated as of July 31, 2007, among the Company and the persons listed under the heading “WCAS Holders” on the signature pages thereof.
10.11	Series D Warrant Exchange Agreement, dated as of July 31, 2007, among the Company and persons listed under the heading “Warrant Holders” on the signature pages thereof.
10.12	Stock Purchase Agreement, dated as of July 31, 2007, among the Company and the persons listed under the heading “WCAS Investors” on the signature pages thereof.
10.13	Amendment No. 3 to Warrant Agreement, dated as of July 31, 2007, between ITC^DeltaCom, Inc. and Mellon Investor Services LLC, as Warrant Agent.
10.14	Amendment No. 2 to Warrant Agreement, dated as of July 31, 2007, between ITC^DeltaCom, Inc. and Mellon Investor Services LL, as Warrant Agent.
10.15	Amendment No. 2 to Warrant Agreement, dated as of July 31, 2007, between ITC^DeltaCom, Inc. and Mellon Investor Services LLC, as Warrant Agent.
10.16	Amendment No. 1 to Amended and Restated Governance Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc. and the persons listed under the headings “WCAS Securityholders” and “TCP Securityholders” on the signature pages thereof.
10.17	Amendment No. 3 to Registration Rights Agreement, dated as of July 31, 2007, as amended, among ITC^DeltaCom, Inc. and the persons listed under the heading “WCAS Securityholders” on the signature pages thereof.
10.18	Amendment No. 1 to Registration Rights Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc. and the persons listed under the heading “TCP Securityholders” on the signature pages thereof.

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10.19	ITC^DeltaCom, Inc. Amended and Restated Executive Stock Incentive Plan.
10.20	Form of Common Stock Unit Agreement (Series A Preferred Stock Unit Agreement, as Amended) under ITC^DeltaCom, Inc. Executive Stock Incentive Plan.
10.21	Form of Common Stock Unit Agreement (Series B Preferred Stock Unit Agreement, as Amended) under ITC^DeltaCom, Inc. Executive Stock Incentive Plan.
10.22	Form of Common Stock Unit Agreement (Deferred Compensation Agreement, as Amended) under ITC^DeltaCom, Inc. Executive Stock Incentive Plan.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ITC^DELTACOM, INC.
Date: August 6, 2007	/s/ J. Thomas Mullis
	J. Thomas Mullis
	Senior Vice President-Legal and Regulatory
	(Duly Authorized Officer)

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EXHIBIT INDEX

Exhibit No.	Description
3.1	Restated Certificate of Incorporation of ITC^DeltaCom, Inc. (including (a) the Certificate of Amendment to the Second Amended Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series A Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof, (b) the Certificate of Amendment to the Amended Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series B Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof, (c) the Certificate of Elimination of 8% Series C Convertible Redeemable Preferred Stock, and (d) the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 6% Series H Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof ).
4.1	Specimen representing the 6% Series H Convertible Redeemable Preferred Stock, par value $0.01 per share, of ITC^DeltaCom, Inc.
10.1	First Lien Credit Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc., as Borrower, Credit Suisse, as Administrative Agent and Collateral Agent, and the Lenders from time to time parties thereto.
10.2	First Lien Guarantee and Collateral Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc., as Borrower, the Subsidiaries of ITC^DeltaCom, Inc. from time to time party thereto, and Credit Suisse, as Collateral Agent.
10.3	Second Lien Credit Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc., as Borrower, Credit Suisse, as Administrative Agent and Collateral Agent, and the Lenders from time to time parties thereto.
10.4	Second Lien Guarantee and Collateral Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc., as Borrower, the Subsidiaries of ITC^DeltaCom, Inc. from time to time party thereto, and Credit Suisse, as Collateral Agent.
10.5	Equity Purchase and Rights Offering Agreement, dated as of July 16, 2007, among ITC^DeltaCom, Inc. and the Purchasers listed on the signature pages thereof.

10.6	Exchange Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc. and the persons listed under the heading “WCAS Holders” on the signature pages thereof.
10.7	Exchange Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc. and the persons listed under the heading “TCP Holders” on the signature pages thereof.
10.8	Exchange Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc., Interstate FiberNet, Inc. and the persons listed under the heading “Babson Entities” on the signature pages thereof.
10.9	Series A Preferred Stockholder Agreement, dated as of July 31, 2007, among the Company and the persons listed under the heading “Series A Preferred Stockholders” on the signature pages thereof.
10.10	WCAS Exchange Agreement, dated as of July 31, 2007, among the Company and the persons listed under the heading “WCAS Holders” on the signature pages thereof.
10.11	Series D Warrant Exchange Agreement, dated as of July 31, 2007, among the Company and persons listed under the heading “Warrant Holders” on the signature pages thereof.
10.12	Stock Purchase Agreement, dated as of July 31, 2007, among the Company and the persons listed under the heading “WCAS Investors” on the signature pages thereof.
10.13	Amendment No. 3 to Warrant Agreement, dated as of July 31, 2007, between ITC^DeltaCom, Inc. and Mellon Investor Services LLC, as Warrant Agent.
10.14	Amendment No. 2 to Warrant Agreement, dated as of July 31, 2007, between ITC^DeltaCom, Inc. and Mellon Investor Services LL, as Warrant Agent.
10.15	Amendment No. 2 to Warrant Agreement, dated as of July 31, 2007, between ITC^DeltaCom, Inc. and Mellon Investor Services LLC, as Warrant Agent.
10.16	Amendment No. 1 to Amended and Restated Governance Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc. and the persons listed under the headings “WCAS Securityholders” and “TCP Securityholders” on the signature pages thereof.

10.17	Amendment No. 3 to Registration Rights Agreement, dated as of July 31, 2007, as amended, among ITC^DeltaCom, Inc. and the persons listed under the heading “WCAS Securityholders” on the signature pages thereof.
10.18	Amendment No. 1 to Registration Rights Agreement, dated as of July 31, 2007, among ITC^DeltaCom, Inc. and the persons listed under the heading “TCP Securityholders” on the signature pages thereof.
10.19	ITC^DeltaCom, Inc. Amended and Restated Executive Stock Incentive Plan.
10.20	Form of Common Stock Unit Agreement (Series A Preferred Stock Unit Agreement, as Amended) under ITC^DeltaCom, Inc. Executive Stock Incentive Plan.
10.21	Form of Common Stock Unit Agreement (Series B Preferred Stock Unit Agreement, as Amended) under ITC^DeltaCom, Inc. Executive Stock Incentive Plan.
10.22	Form of Common Stock Unit Agreement (Deferred Compensation Agreement, as Amended) under ITC^DeltaCom, Inc. Executive Stock Incentive Plan.

EX-3.1

Exhibit 3.1

RESTATED

CERTIFICATE OF INCORPORATION

OF

ITC^DELTACOM, INC.

ITC^DeltaCom, Inc., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

1. The name under which the corporation was originally incorporated is ITC^DeltaCom, Inc., and the original Certificate of Incorporation of the corporation was filed with the Secretary of State of the State of Delaware on March 24, 1997.

2. This Restated Certificate of Incorporation restates and integrates and does not further amend the provisions of the Certificate of Incorporation of the corporation as heretofore amended or supplemented, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

3. This Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of Section 245 of the General Corporation Law of the State of Delaware.

4. The text of the Certificate of Incorporation of the corporation is hereby restated and integrated to read in its entirety as follows:

ARTICLE 1

NAME

The name of the corporation is ITC^DeltaCom, Inc. (the “Corporation”).

ARTICLE 2

REGISTERED OFFICE AND REGISTERED AGENT

The address of the Corporation’s registered office in the State of Delaware is 2711 Centreville Road, Suite 400, Wilmington 19808 in the county of New Castle. The name of the Corporation’s registered agent at such address is Corporation Service Company.

ARTICLE 3

PURPOSE

The purpose or purposes for which the Corporation is organized are to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware, as from time to time amended (the “Delaware General Corporation Law”). The Corporation shall have all powers necessary or convenient to the conduct, promotion or attainment of such acts and activities.

ARTICLE 4

CAPITAL STOCK

The Corporation shall have the authority to issue a total of four hundred million (400,000,000) shares of capital stock, each with a par value of $0.01, consisting of three hundred fifty million (350,000,000) shares of Common Stock (“Common Stock”) and fifty million (50,000,000) shares of Preferred Stock (“Preferred Stock”). The Corporation shall not issue any class of non-voting capital stock. Notwithstanding the provisions of Section 242(b)(2) of the Delaware General Corporation Law, the number of authorized shares of Common Stock and Preferred Stock may, without a class or series vote, be increased or decreased (but not below the number of shares thereof then outstanding) from time to time by the affirmative vote of the holders of a majority in voting power of the outstanding shares entitled to vote, voting together as a single class.

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ARTICLE 5

COMMON STOCK

Except as required by law, all shares of Common Stock shall be identical in all respects and shall entitle the holders thereof to the same rights, powers and privileges, subject to the same qualifications, limitations and restrictions. The Common Stock shall be subject to all of the rights, privileges, preferences and priorities of the Preferred Stock set forth in this Restated Certificate of Incorporation (including any Certificate of Designation filed to establish any series of Preferred Stock).

ARTICLE 6

PREFERRED STOCK

Section A. Preferred Stock. The Corporation is expressly authorized, subject to the rights, if any (fixed in accordance with the provisions of Section A of this Article 6), of the holders of any then outstanding shares of Preferred Stock, to issue shares of Preferred Stock from time to time in one or more series as may from time to time be determined by the Board of Directors of the Corporation (the “Board”), each of such series to be distinctly designated. The voting powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof, if any, of each such series may differ from those of any and all other series of Preferred Stock at any time outstanding, and the Board is hereby expressly granted authority, subject to the rights, if any (fixed in accordance with the provisions of Section A of this Article 6), of the holders of any then outstanding shares of Preferred Stock, to fix or alter, by resolution or resolutions, the designation, number, voting powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of each such series, including, but without limiting the generality of the foregoing, the following:

1. The distinctive designation of, and the number of shares of Preferred Stock that shall constitute, such series, which number (except where otherwise provided by the Board in the resolution or resolutions establishing such series) may be increased (but not above the total number of shares of Preferred Stock) or decreased (but not below the number of shares of such series then outstanding) from time to time by like action of the Board.

2. The rights in respect of dividends, if any, of such series of Preferred Stock, the extent of the preference or relation, if any, of such dividends to the dividends payable on any other class or classes or any other series of the same or other class or classes of capital stock of the Corporation, and whether such dividends shall be cumulative or noncumulative, and the dates at which any such dividends shall be payable.

3. The right, if any, of the holders of such series of Preferred Stock to convert such series into, or to exchange or redeem such series for, shares of any other class or classes or of any other series of the same or any other class or classes of capital stock of the Corporation or any other corporation, and, if so, the specification of such other class or series or such other security, the conversion, exchange or redemption price or prices or rate or rates, any adjustments thereof, the date or dates at which such series shall be convertible, exchangeable or redeemable and all other terms and conditions of such conversion, exchange or redemption.

4. Whether or not shares of such series of Preferred Stock shall be subject to redemption, and the redemption price or prices and the times at which, and the terms and conditions on which, shares of such series of Preferred Stock may be redeemed.

5. The rights, if any, of the holders of such series of Preferred Stock upon the voluntary or involuntary liquidation, dissolution or winding-up of the Corporation or in the event of any merger or consolidation of or sale of assets by the Corporation.

6. The terms and amount of any sinking fund or redemption or purchase account, if any, to be provided for shares of such series of the Preferred Stock.

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7. The voting powers of the holders of any series of Preferred Stock generally or with respect to any particular matter, which may be less than, equal to or greater than one vote per share, and which may, without limiting the generality of the foregoing, include the right, voting as a series by itself or together with the holders of any other series of Preferred Stock or all series of Preferred Stock as a class, to elect one or more directors of the Corporation generally or under such specific circumstances and on such conditions as shall be provided in the resolution or resolutions of the Board adopted pursuant hereto, including, without limitation, in the event there shall have been a default in the payment of dividends on or redemption of any one or more series of Preferred Stock.

8. Any other rights, powers and preferences of shares of such series of Preferred Stock as are permitted by law.

Section B. Rights of Preferred Stock.

1. After the provisions with respect to preferential dividends on any series of Preferred Stock (fixed in accordance with the provisions of Section A of this Article 6), if any, shall have been satisfied and after the Corporation shall have complied with all the requirements, if any, with respect to redemption of, or the setting aside of sums as sinking funds or redemption or purchase accounts with respect to, any series of Preferred Stock (fixed in accordance with the provisions of Section A of this Article 6), and subject further to any other conditions that may be fixed in accordance with the provisions of Section A of this Article 6, then and not otherwise the holders of Common Stock shall be entitled to receive such dividends, as may be declared from time to time by the Board, out of any assets legally available for the payment of dividends thereon.

2. In the event of the voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, after distribution in full of the preferential amounts, if any (fixed in accordance with the provisions of Section A of this Article 6), to be distributed to the holders of Preferred Stock by reason thereof, the holders of Common Stock shall, subject to the additional rights, if any (fixed in accordance with the provisions of Section A of this Article 6), of the holders of any outstanding shares of Preferred Stock, be entitled to receive all of the remaining assets of the Corporation, tangible or intangible, of whatever kind available for distribution to stockholders ratably in proportion to the number of shares of Common Stock held by them respectively.

3. Except as may otherwise be required by law, and subject to the provisions of such resolution or resolutions as may be adopted by the Board pursuant to Section A of this Article 6 granting the holders of one or more series of Preferred Stock exclusive or special voting powers with respect to any matter, each holder of Common Stock shall have one vote in respect to each share of Common Stock held on all matters voted upon by the stockholders, provided, however, that except as otherwise required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Restated Certificate of Incorporation (including any Certificate of Designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either voting separately or together with the holders of one or more other such series, to vote thereon pursuant to this Restated Certificate of Incorporation (including any Certificate of Designation relating to any series of Preferred Stock) or pursuant to the Delaware General Corporation Law.

4. The powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s 8% Series A Convertible Redeemable Preferred Stock are set forth in Appendix A hereto and are incorporated herein by reference.

5. The powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s 8% Series B Convertible Redeemable Preferred Stock are set forth in Appendix B hereto and are incorporated herein by reference.

6. The powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions thereof, of the Corporation’s 8% Series C Convertible Redeemable Preferred Stock are set forth in Appendix C hereto and are incorporated herein by reference.

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ARTICLE 7

BYLAWS

The Board is expressly authorized to adopt, amend or repeal the Bylaws of the Corporation. Any Bylaw adopted by the Board may be amended or repealed by the stockholders, and the stockholders may adopt new Bylaws.

ARTICLE 8

BOARD OF DIRECTORS

Section A. Management of Business and Affairs of the Corporation; Voting. The business and affairs of the Corporation shall be managed by or under the direction of the Board. Except as otherwise provided in this Restated Certificate of Incorporation (including any Certificate of Designation relating to any series of Preferred Stock), each director of the Corporation shall be entitled to one vote per director on all matters voted or acted upon by the Board.

Section B. Election. The directors of the Corporation shall not be required to be elected by written ballots unless the Bylaws of the Corporation so provide. Except as otherwise provided by statute, this Restated Certificate of Incorporation (including any Certificate of Designation relating to any series of Preferred Stock) or the Bylaws of the Corporation, directors shall be elected by a plurality of the votes cast of the shares present in person or represented by proxy at the meeting held for such purposes and entitled to vote thereon. Certain stockholders of the Corporation are entitled to designate directors for nomination for election to the Board pursuant to the Governance Agreement (as defined below).

Section C. Vacancies. Except as otherwise provided by law or in the Corporation’s Bylaws or fixed pursuant to the provisions of Article 6 hereof relating to the rights of the holders of any series of Preferred Stock to elect directors and fill vacancies, any newly created directorship or vacancy on the Board resulting from death, resignation, disqualification, removal or other cause may be filled (i) by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board, or (ii) by the stockholders. Any director elected in accordance with the preceding sentence shall hold office until the expiration of the term of office of the director whom he has replaced or until his successor is duly elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director.

Section D. Directors Elected by Holders of Preferred Stock. Notwithstanding the foregoing, whenever, pursuant to the provisions of Article 6 hereof, the holders of any one or more series of Preferred Stock shall have the right, voting separately as a series or together with holders of other such series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Restated Certificate of Incorporation and any Certificate of Designation applicable thereto.

Section E. Number of Directors Constituting the Board. Except as otherwise provided for or fixed in the Corporation’s Bylaws or pursuant to Article 6 hereof relating to the rights of the holders of any series of Preferred Stock to elect additional directors, the total number of directors constituting the entire Board shall be not less than four (4) nor, prior to October 6, 2006, more than fifteen (15), with the then-authorized number of directors being fixed from time to time by the Board and the initial authorized number of directors constituting the entire Board being fixed at eleven (11).

ARTICLE 9

DIRECTOR LIABILITY

A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or

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which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware General Corporation Law is amended after the filing of this Restated Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended. No modification or repeal of the provisions of this Article 9 shall adversely affect any right or protection of any director of the Corporation existing at the date of such modification or repeal or create any liability or adversely affect any such right or protection for any acts or omissions of such director occurring prior to such modification or repeal.

ARTICLE 10

AMENDMENTS

The Corporation reserves the right to amend this Restated Certificate of Incorporation in any manner permitted by applicable law, and all rights and powers conferred herein on stockholders, directors and officers, if any, are subject to this reserved power.

ARTICLE 11

THE GOVERNANCE AGREEMENT

The Governance Agreement dated as of October 6, 2003 among the Corporation and the other parties thereto, as amended from time to time, is referred to herein as the “Governance Agreement.” Each reference in this Restated Certificate of Incorporation to the Governance Agreement shall be null and void and have no further force and effect following the termination of the Governance Agreement in accordance with its terms.

*    *    *

IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate of Incorporation to be executed by its duly authorized officer this 9th day of November, 2005.

ITC^DELTACOM, INC.
By:	/s/ J. Thomas Mullis
	Name:	J. Thomas Mullis
	Title:	Senior Vice President-Legal and Regulatory

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Appendix A

ITC^DELTACOM, INC.

SECOND AMENDED CERTIFICATE OF DESIGNATION OF THE POWERS,

PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND

OTHER SPECIAL RIGHTS OF 8% SERIES A CONVERTIBLE

REDEEMABLE PREFERRED STOCK AND QUALIFICATIONS,

LIMITATIONS AND RESTRICTIONS THEREOF

Pursuant to Section 242 of the

General Corporation Law of the State of Delaware

ITC^DeltaCom, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, does hereby certify as follows:

1. That by resolution of the Reorganization Committee of the Board of Directors of the Corporation (the “Board of Directors”) dated October 28, 2002, and by a Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series A Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof (this “Certificate of Designation”), filed in the office of the Secretary of State of the State of Delaware on October 29, 2002, the Corporation created, authorized and provided for the issuance of 665,000 shares of 8% Series A Convertible Redeemable Preferred Stock, par value $0.01 per share, of the Corporation and established the powers, preferences and relative, participating, optional and other special rights and the qualifications, limitations or restrictions thereof.

2. Pursuant to the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware, the Corporation duly adopted amendments to the Certificate of Designation and filed the Certificate of Designation as amended and restated in the office of the Secretary of State of the State of Delaware on October 6, 2003.

3. This Amended Certificate of Designation has been duly adopted in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

4. Pursuant to the provisions of Section 242 of the General Corporation Law of the State of Delaware, the Corporation hereby amends and restates this Certificate of Designation in its entirety to read as follows:

1. Designation

1.1 Designation; Liquidation Preference

There is hereby created out of the authorized and unissued shares of preferred stock of the Corporation a series of preferred stock designated as the 8% Series A Convertible Redeemable Preferred Stock (the “Series A Preferred Stock”). The number of shares constituting the Series A Preferred Stock shall be 665,000. The liquidation preference of the Series A Preferred Stock shall be $100.00 per share (the “Liquidation Preference”); provided that the Liquidation Preference shall be subject to equitable adjustment if and whenever there shall occur a stock split, combination, recapitalization, reorganization or reclassification of, or other similar event affecting, the Series A Preferred Stock.

1.2 Capitalized Terms

Certain capitalized terms used in this Certificate of Designation have the meanings assigned to them in Section 8.

2. Dividends

2.1 Payment of Preferred Dividends

(a) The Holders of shares of Series A Preferred Stock shall be entitled to receive with respect to each share of Series A Preferred Stock, when, as and if declared by the Board of Directors, out of funds legally available for the payment of dividends, dividends (the “Preferred Dividends”) in an amount equal to the greater of (x) dividends at the rate of 8% per annum (the “Annual Dividend Rate”) of the sum of the Liquidation Preference plus the amount of any Accumulated Dividends accrued with respect to such share and (y) dividends (other than dividends in Common Stock payable in connection with a stock split, reclassification or subdivision of the Common Stock) that would have accrued with respect to such share of Series A Preferred Stock during the applicable Dividend Period if the Holder of such share had converted such share into Common Stock immediately prior to the record date of any dividend declared on the Common Stock in such Dividend Period. If any dividend declared on the Common Stock and referred to in clause (y) above is in a form other than cash, the value of such dividend for purposes of this Section 2.1(a) shall be determined in good faith by the Board of Directors, whose determination, in the absence of manifest error, but subject to Section 2.1(g), shall be final and binding upon the Corporation and the Holders of the Series A Preferred Stock. Any Preferred Dividend referred to in clause (y) above shall be deemed to have accrued with respect to a share of Series A Preferred Stock as of the last day of the applicable Dividend Period. Preferred Dividends on a share of Series A Preferred Stock shall accrue and shall be cumulative whether or not declared from the date of issue of such share of Series A Preferred Stock and shall be payable quarterly in arrears on April 1, July 1, October 1 and January 1 of each year (unless, solely with respect to Preferred Dividends payable in cash, such day is not a Business Day, in which event such Preferred Dividends shall be payable on the next succeeding

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Business Day) (each such date being a “Dividend Payment Date” and each such quarterly period being a “Dividend Period”), commencing on the Dividend Payment Date for the Dividend Period ending on December 31, 2002. Preferred Dividends declared by the Board of Directors which are paid in shares of Series A Preferred Stock shall be deemed paid as of April 1, July 1, October 1 or January 1, as the case may be, for all purposes of this Certificate of Designation even if any such date is not a Business Day. Preferred Dividends payable on any Dividend Payment Date shall be payable to the Holders of shares of Series A Preferred Stock as they appear on the stock register of the Corporation at the close of business on the corresponding Dividend Payment Record Date. As used herein, the term “Dividend Payment Record Date” means, with respect to the Preferred Dividends payable on April 1, July 1, October 1 and January 1, respectively, of each year, the preceding March 15, June 15, September 15 and December 15 (unless such day is not a Business Day, in which event such Dividend Payment Record Date shall be the next succeeding Business Day), or such other date, not more than 60 days or less than ten days preceding the Dividend Payment Date, as shall be fixed as the record date by the Board of Directors.

(b) The dividend rate for Preferred Dividends payable in the amount specified in and pursuant to clause (x) of Section 2.1(a) with respect to each full Dividend Period shall be computed by dividing the Annual Dividend Rate by four. The dividend rate for such Preferred Dividends payable on the initial Dividend Payment Date and with respect to any other period other than a full Dividend Period shall be computed on the basis of a 365-day year and the actual number of days elapsed in the period with respect to which such Preferred Dividends are payable; provided, however, that if the initial Dividend Period with respect to any share of Series A Preferred Stock is shorter than a full Dividend Period, the dividend rate for a Preferred Dividend payable on such share on the Dividend Payment Date for such initial Dividend Period shall be computed at a rate which shall result in a cumulative dividend on such share for such initial Dividend Period equal to the amount which would have accrued on or been payable with respect to such share if such share been outstanding on the first day of such initial Dividend Period. Except as otherwise provided in this Certificate of Designation, the Series A Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or securities, in addition to the Preferred Dividends as provided in this Section 2.1. No interest or sum of money or other property or securities in lieu of interest shall be payable in respect of any accumulated and unpaid Preferred Dividends.

(c) Accumulated Dividends may be declared and paid on any date, without reference to any regular Dividend Payment Date or Dividend Payment Record Date, to Holders of Series A Preferred Stock as they appear on the stock register of the Corporation at the close of business on the date fixed as the record date for such payment by the Board of Directors.

(d) Any Preferred Dividend payable in the amount specified in and pursuant to clause (x) of Section 2.1(a) may be paid, in the sole discretion of the Corporation, (i) in cash, (ii) in shares of Series A Preferred Stock or (iii) in a combination of cash and shares of Series A Preferred Stock. Any Preferred Dividend payable in the amount specified in and pursuant to clause (y) of Section 2.1(a) shall be payable in the same form as the dividend referred to in such

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clause (y) that has been declared on the Common Stock in the applicable Dividend Period. Each share of Series A Preferred Stock issued in payment of a Preferred Dividend shall be valued, solely for purposes of determining the number of shares of Series A Preferred Stock to be issued as a Preferred Dividend, at the Liquidation Preference thereof and shall, upon issuance, be duly and validly issued, fully paid and non-assessable, free of all Liens and not subject to preemptive rights. If any such Preferred Dividend would result in the issuance of a fractional share of Series A Preferred Stock, the Corporation, in its sole discretion, may either pay such fractional share or round such fractional share up to the nearest whole share of Series A Preferred Stock. Except to the extent otherwise required by the NASDAQ Marketplace Rules (if applicable) or the rules, regulations, interpretations and practices of the Transfer Agent or any securities exchange on which the Common Stock is traded, or by any other applicable law or regulation, (i) fractional shares of Series A Preferred Stock issued in payment of any Preferred Dividend shall be rounded up to the nearest one-ten thousandth (.0001) of a share, and (ii) any Preferred Dividend payable in cash shall be rounded up to the nearest cent.

(e) Payment of a Preferred Dividend in shares of Series A Preferred Stock to a Holder of the Series A Preferred Stock shall be made by delivering a certificate or certificates evidencing such shares, which shall be dated as of the applicable Dividend Payment Date, to such Holder after the applicable Dividend Payment Date at such Holder’s address as it shall appear on the stock register of the Corporation at the close of business on the Dividend Payment Record Date for such Dividend Payment Date.

(f) All Preferred Dividends shall be paid pro rata to the Holders of the Series A Preferred Stock entitled thereto.

(g) So long as the Initial Holders and their Affiliates are the beneficial and record owners of at least a majority of the shares of Series A Preferred Stock then outstanding, the Corporation shall give prompt written notice to the Initial Holders that are Holders on the date of such notice of the determination of the Board of Directors with respect to the value of any dividend declared on the Common Stock referred to in clause (y) of the first sentence of Section 2.1(a) that is in a form other than cash. If the Required Initial Holders object to such determination (whether or not in manifest error) by the Board of Directors of the value of such dividend by giving the Corporation written notice of such objection within ten Business Days after their receipt of the Corporation’s written notice of such determination, and such objection is not withdrawn, the Corporation shall retain, at the Corporation’s sole cost, an Independent Appraiser to determine the value of such dividend. The determination of such Independent Appraiser with respect to the value of such dividend, or, if the Corporation is not required to retain an Independent Appraiser pursuant to this Section 2.1(g), but retains an Independent Appraiser pursuant to the Series B Certificate of Designation or the Series C Certificate of Designation to determine the value of such dividend for purposes of the Series B Certificate of Designation or the Series C Certificate of Designation, as the case may be, the determination of such other Independent Appraiser with respect to the value of such dividend, shall be final and binding upon the Corporation and the Holders of the Series A Preferred Stock. Any written notice required to be given by the Corporation or the Required Initial Holders pursuant to this Section 2.1(g) shall be given in the manner, and with the effect, provided in Section 7.5(b).

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2.2 Declaration of Dividends and Distributions

(a) So long as any shares of the Series A Preferred Stock are outstanding, (i) no dividends, except as provided in Section 2.2(d) and except as described in the last sentence of this Section 2.2(a), shall be declared or paid or set apart for payment and no other distribution shall be declared or made upon any Parity Securities, nor (ii) shall any Parity Securities be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any Parity Securities) by the Corporation or any of its subsidiaries (except by conversion into or exchange for Parity Securities or Junior Securities), unless (x) in the case of clause (i) above, all Accumulated Dividends on the outstanding Series A Preferred Stock have been or contemporaneously are declared and paid or declared and sufficient funds or shares of Series A Preferred Stock for the payment thereof are set apart for such payment on or prior to the date of payment of such dividends or the making of such other distributions on such Parity Securities and (y) in the case of clause (ii) above, the Corporation shall contemporaneously redeem, purchase or otherwise acquire for consideration a pro rata portion of the Series A Preferred Stock then outstanding, which pro rata portion shall be calculated based on the aggregate redemption, purchase or other acquisition price which would be payable to the Holders of the Series A Preferred Stock and the holders of the class or series of Parity Securities being so redeemed, purchased or otherwise acquired to redeem the total number of shares of the Series A Preferred Stock and of each such class or series of Parity Securities then outstanding. Any redemption of Series A Preferred Stock in accordance with the immediately preceding sentence shall be deemed to be a redemption at the option of the Corporation and shall be subject to, and effected in accordance with, Sections 5.1 and 5.3. Notwithstanding the foregoing, if Accumulated Dividends are not paid in full or sufficient funds or shares of Series A Preferred Stock for the payment thereof are not set aside, as aforesaid, the Corporation may declare and pay or set aside sufficient funds or (to the extent authorized in the instrument creating the applicable Parity Securities) Parity Securities for the payment of accrued and unpaid dividends on Parity Securities for past dividend periods if and to the extent that, prior thereto or contemporaneously therewith, the Corporation shall declare and pay or set aside sufficient funds or shares of Series A Preferred Stock for the payment of Accumulated Dividends on the outstanding Series A Preferred Stock ratably in proportion to the respective dollar amounts of all Accumulated Dividends then payable on the outstanding Series A Preferred Stock and all such accrued and unpaid dividends then payable on such Parity Securities.

(b) So long as any shares of the Series A Preferred Stock are outstanding, no dividends, except as provided in Section 2.2(d), shall be declared or paid or set apart for payment and no other distribution shall be declared or made upon Junior Securities, nor shall any Junior Securities be redeemed, purchased or otherwise acquired (any such dividend, distribution, redemption, purchase or other acquisition being hereinafter referred to as a “Junior Securities Distribution”) for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any Junior Securities) by the Corporation or any of its subsidiaries

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(except by conversion into or exchange for Junior Securities), unless in each case (i) all Accumulated Dividends on the outstanding Series A Preferred Stock and all accrued and unpaid dividends on any outstanding Parity Securities for all past dividend periods with respect to such Parity Securities shall have been paid or sufficient funds or, as applicable, shares of Series A Preferred Stock or (to the extent authorized in the instrument creating the applicable Parity Securities) Parity Securities set aside for the payment thereof and (ii) sufficient funds or shares of Series A Preferred Stock shall have been paid or set apart for the payment of Preferred Dividends for the current Dividend Period with respect to the Series A Preferred Stock and sufficient funds or (to the extent authorized in the instrument creating the applicable Parity Securities) Parity Securities shall have been paid or set aside for the payment of any dividends for the current dividend period with respect to such Parity Securities.

(c) No Preferred Dividends may be declared, made or paid or funds set apart for the payment of Preferred Dividends upon any outstanding share of Series A Preferred Stock with respect to any Dividend Period unless all dividends which are accrued and payable with respect to preceding dividend periods upon all outstanding Senior Securities shall have been declared and paid or sufficient funds for the payment thereof shall have been set apart for the payment of such dividends.

(d) Notwithstanding anything in this Section 2.2 or any other provision of this Certificate of Designation to the contrary, the Corporation shall have the power to (i) declare and pay dividends or make distributions on Parity Securities which are payable solely in additional Parity Securities or in Junior Securities and on Junior Securities which are payable solely in additional Junior Securities and (ii) redeem, purchase or otherwise acquire Junior Securities in exchange for Junior Securities and Parity Securities in exchange for Parity Securities or Junior Securities.

3. Ranking

3.1 Ranking

The Series A Preferred Stock shall, with respect to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation, rank as follows:

(a) senior to all classes of Common Stock and each other class of Capital Stock or series of preferred stock issued by the Corporation, which is established after the date of this Certificate of Designation, the terms of which do not expressly provide that such class or series shall rank senior to or on a parity with the Series A Preferred Stock as to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation (each such other class or series, collectively with the Common Stock, referred to as “Junior Securities”);

(b) on a parity with the Series B Preferred Stock and the Series C Preferred Stock and each class of Capital Stock (other than classes of Common Stock) or series of preferred stock issued by the Corporation, which is established after the date of this Certificate of

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Designation, the terms of which expressly provide that such class or series shall rank on a parity with the Series A Preferred Stock as to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation (the Series B Preferred Stock, the Series C Preferred Stock and each such other class or series collectively referred to as “Parity Securities”); and

(c) junior to each class of Capital Stock (other than classes of Common Stock) or series of preferred stock issued by the Corporation, which is established after the date of this Certificate of Designation, the terms of which expressly provide that such class or series shall rank senior to the Series A Preferred Stock as to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation (collectively referred to as “Senior Securities”).

3.2 Reservation of Rights

Except as otherwise expressly provided in this Certificate of Designation, the Corporation shall have the right to amend the Certificate of Incorporation, file certificates of designation and otherwise authorize and issue any Junior Securities, Parity Securities or Senior Securities without restriction at any time and from time to time.

4. Conversion

4.1 Conversion Rights

(a) Each Holder of Series A Preferred Stock shall have the right, at its option, at any time and from time to time to convert, subject to the terms and provisions of this Section 4, any or all of such Holder’s shares of Series A Preferred Stock (including fractional shares) into a whole number of fully paid and non-assessable shares of Common Stock equal to the product of the number of shares of Series A Preferred Stock being so converted multiplied by the quotient of (i) the sum of (x) the Liquidation Preference plus (y) any Accumulated Dividends accrued with respect to such shares plus (z) any Current Period Dividends with respect to such shares accrued to, and not including, the Conversion Date (or such other date as is specified in Section 4.1(c)) divided by (ii) the Conversion Price then in effect, except that with respect to any share of Series A Preferred Stock which shall be called for redemption pursuant to Section 5, such conversion right shall terminate at the close of business on the Business Day immediately prior to the Redemption Date unless the Corporation shall default in making the payment due under Section 5 upon redemption of such share, in which case such right shall be exercisable at any time until the close of business on the Business Day immediately prior to the date on which such payment is made. If a Holder of Series A Preferred Stock shall exercise its conversion right pursuant to this Section 4 in connection with an underwritten offering of securities registered pursuant to the Securities Act of 1933, as amended, such Holder, at its option, may condition the conversion of the Holder’s Series A Preferred Stock upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event such Series A Preferred Stock shall not be deemed to

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have been converted, and the Persons entitled to receive the Common Stock upon the conversion of such Series A Preferred Stock shall not be deemed to have received such Common Stock, until immediately prior to the closing of such sale of securities. Each share of Series A Preferred Stock issued after the Issue Date, including, without limitation, each share of Series A Preferred Stock issued as a Preferred Dividend pursuant to Section 2 and each share of Series A Preferred Stock issued pursuant to or as provided in the Executive Employment Agreements, shall, as of the date of issuance of such share, have the same Conversion Price as each share of Series A Preferred Stock outstanding immediately prior to such issuance.

(b) The conversion right of a Holder of Series A Preferred Stock shall be exercised by the surrender of such Holder’s certificates representing shares of Series A Preferred Stock to be converted, duly endorsed in blank or accompanied by proper instruments of transfer, to the Corporation or to the Transfer Agent accompanied by a Conversion Notice.

(i) Any such conversion shall be deemed to have been consummated immediately prior to the close of business on the Conversion Date (or such other date and time as is specified in Section 4.1(a), this Section 4.1(b)(i) or Section 4.1(c)), and as of such date each Holder converting Series A Preferred Stock shall be deemed to be the Holder of record of Common Stock issuable upon conversion of such Series A Preferred Stock notwithstanding that the share register of the Corporation may then be closed or that certificates representing such Common Stock shall not then be actually delivered to such Person. Notwithstanding the foregoing, and solely for purposes of determining whether any share of Series A Preferred Stock subject to such conversion shall be deemed to be outstanding on any Dividend Payment Record Date and entitled to payment of Preferred Dividends pursuant to Section 2 on the related Dividend Payment Date, if the Corporation or the Transfer Agent receives a Conversion Notice relating to any such conversion on or after such Dividend Payment Record Date, such conversion shall be deemed solely for such purposes to have been consummated immediately prior to the close of business on such Dividend Payment Record Date.

(ii) Immediately prior to the close of business on any Conversion Date (or such other date and time as is specified in Section 4.1(a) or 4.1(c)), all rights with respect to the shares of Series A Preferred Stock so converted, including the rights, if any, to continue to accrue Preferred Dividends and receive notices, shall terminate, except the rights of Holders thereof to (A) receive certificates for the number of shares of Common Stock into which such shares of Series A Preferred Stock have been converted and (B) exercise the rights to which such Holders are entitled as Holders of Common Stock.

(iii) As promptly as reasonably practicable after the Conversion Date, the Corporation shall issue and deliver to the Holder of the shares of Series A Preferred Stock so converted a certificate or certificates representing the number of whole shares of Common Stock into which such shares of Series A Preferred Stock shall have been converted.

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(iv) All shares of Common Stock issuable upon conversion of the Series A Preferred Stock shall, upon issuance, be duly and validly issued, fully paid and non-assessable, free of all Liens and not subject to any preemptive rights.

(c) If the Conversion Date shall not be a Business Day or shall be a date of record referred to in Section 4.2(d), then such conversion right shall be deemed exercised on the next Business Day. Upon delivery of a Conversion Notice to the Corporation by a Holder of Series A Preferred Stock, the right of the Corporation to redeem the shares of Series A Preferred Stock specified in such Conversion Notice shall terminate, regardless of whether a Redemption Notice shall have been given pursuant to Section 5.3.

(d) Except as provided in Sections 4.1(a), 4.2 and 4.3, the Corporation shall make no adjustment or payment for, or have any other obligation with respect to, any Accumulated Dividends or Current Period Dividends accrued with respect to shares of Series A Preferred Stock in connection with or following the conversion of such shares.

(e) In the case of any conversion of fewer than all the shares of Series A Preferred Stock evidenced by a certificate, the Corporation, upon such conversion, shall execute and the Transfer Agent shall authenticate and deliver to the Holder thereof at such address designated by such Holder, at the expense of the Corporation, a new certificate or certificates representing the number of unconverted shares of Series A Preferred Stock. No fractional shares of Common Stock shall be issued upon the conversion of the Series A Preferred Stock. If the conversion of any shares of Series A Preferred Stock would result in the issuance of a fractional share of Common Stock, the Corporation, in its sole discretion, may (i) round such fractional share up to the nearest whole share of Common Stock or (ii) in lieu thereof pay a cash adjustment in respect of such fractional share in an amount equal to such fractional share multiplied by the Closing Price per share of Common Stock on the Business Day next preceding the Conversion Date.

4.2 Adjustment of Conversion Price

In order to prevent dilution of the conversion rights granted under this Section 4, the Conversion Price shall be subject to adjustment from time to time pursuant to this Section 4.2. In the event that any adjustment of the Conversion Price as required herein results in a fraction of a cent, such Conversion Price shall be rounded up to the nearest cent.

(a) Except as otherwise provided in Section 4.2(c), if and whenever during the period beginning on the Issue Date and ending at the close of business on October 29, 2004 the Corporation issues or sells, or in accordance with Section 4.2(b) is deemed to have issued or sold, any shares of Common Stock for no consideration or for a consideration per share (calculated as set forth in Section 4.2(b)) less than the Conversion Price in effect on the date of issuance or sale (or deemed issuance or sale) of such Common Stock (a “Dilutive Issuance”), then immediately upon such Dilutive Issuance, the Conversion Price shall be reduced to a price determined by multiplying the Conversion Price in effect immediately prior to such Dilutive

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Issuance by a fraction, (A) the numerator of which is an amount equal to the sum of (x) the total number of shares of Common Stock Deemed Outstanding immediately prior to such Dilutive Issuance plus (y) the quotient of the aggregate consideration, calculated as set forth in Section 4.2(b), received or receivable by the Corporation upon such Dilutive Issuance divided by the Conversion Price in effect immediately prior to such Dilutive Issuance, and (B) the denominator of which is the total number of shares of Common Stock Deemed Outstanding immediately after such Dilutive Issuance.

(b) For purposes of determining the adjusted Conversion Price pursuant to Section 4.1(a), the following provisions shall be applicable:

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

(ii) If the Corporation in any manner issues or sells any Convertible Securities, whether or not immediately convertible (other than where such Convertible Securities are issuable upon the exercise of Options for which an adjustment of the Conversion Price is made pursuant to Section 4.2(b)(i)) and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price in effect on the date of issuance of such Convertible Securities, then the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities shall, as of the date of the issuance of such Convertible

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Securities, be deemed to be outstanding and to have been issued and sold by the Corporation for such price per share. For the purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (x) the total amount, if any, received or receivable by the Corporation as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (y) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment of the Conversion Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities, and if any such issuance or sale of such Convertible Securities is made upon exercise of any Options for which adjustments of the Conversion Price had been or are to be made pursuant to other provisions of this Section 4.2, no further adjustment of the Conversion Price shall be made by reason of such issuance or sale.

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

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

(v) If any Common Stock, Options or Convertible Securities are issued, granted or sold for cash, the consideration received therefor for purposes of this Section 4.2 shall be the amount received by the Corporation therefor before deduction of commissions, underwriting discounts or allowances or other expenses paid or incurred by the Corporation in connection with such issuance, grant or sale. In case any Common

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Stock, Options or Convertible Securities are issued or sold for a consideration part or all of which shall be other than cash, the amount of the consideration other than cash received by the Corporation shall be the fair value of such consideration. If any Common Stock, Options or Convertible Securities are issued in connection with any acquisition, merger or consolidation in which the Corporation is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity which is attributable to such Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash shall be determined in good faith by the Board of Directors, whose determination, in the absence of manifest error, but subject to the following provisions of this Section 4.2(b)(v), shall be final and binding upon the Corporation and the Holders of the Series A Preferred Stock. So long as the Initial Holders and their Affiliates are the beneficial and record owners of at least a majority of the shares of Series A Preferred Stock then outstanding, the Corporation shall give prompt written notice to the Initial Holders that are Holders on the date of such notice of the determination of the Board of Directors with respect to the fair value of such consideration other than cash. If the Required Initial Holders object to such determination (whether or not in manifest error) by the Board of Directors of the fair value of such consideration by giving the Corporation written notice of such objection within ten Business Days after their receipt of the Corporation’s written notice of such determination, and such objection is not withdrawn, the Corporation shall retain, at the Corporation’s sole cost, an Independent Appraiser to determine the fair value of such consideration. The determination of such Independent Appraiser with respect to the fair value of such consideration, or, if the Corporation is not required to retain an Independent Appraiser pursuant to this Section 4.2(b)(v), but retains an Independent Appraiser pursuant to the Series B Certificate of Designation, the Series A Warrant Agreement or the Series B Warrant Agreement to determine the fair value of such consideration for purposes of the Series B Certificate of Designation, the Series A Warrant Agreement or the Series B Warrant Agreement, as the case may be, the determination of such other Independent Appraiser with respect to the fair value of such consideration, shall be final and binding upon the Corporation and the Holders of the Series A Preferred Stock. Any written notice required to be given by the Corporation or the Required Initial Holders pursuant to this Section 4.2(b)(v) shall be given in the manner, and with the effect, provided in Section 7.5(b).

(c) No adjustment of the Conversion Price shall be made pursuant to Section 4.2(a) or 4.2(b) upon the issuance, sale, grant, exercise, conversion, exchange, reclassification, redemption or other retirement of any of the following securities on or after the Issue Date:

(i) the Reorganization Common Stock;

(ii) the Merger Common Stock;

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(iii) the Series A Preferred Stock, including the Series A Preferred Stock issuable as Preferred Dividends pursuant to Section 2, or any shares of Common Stock or other securities issuable or payable upon conversion of the Series A Preferred Stock;

(iv) any shares of Common Stock, Options or Convertible Securities issuable as a dividend or distribution on the Series A Preferred Stock in accordance with this Certificate of Designation, or any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities;

(v) the Warrants or any shares of Common Stock or other securities issuable or payable upon exercise or conversion of the Warrants;

(vi) the Series B Preferred Stock, including the Series B Preferred Stock issuable as dividends on the Series B Preferred Stock, issuable pursuant to the Series B Certificate of Designation as in effect on the Certificate Amendment Date, or any shares of Common Stock or other securities issuable or payable upon conversion of the Series B Preferred Stock pursuant to the Series B Certificate of Designation as in effect on the Certificate Amendment Date;

(vii) any shares of Common Stock, Options or Convertible Securities issuable as a dividend or distribution on the Series B Preferred Stock in accordance with the Series B Certificate of Designation as in effect on the Certificate Amendment Date, or any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities;

(viii) any shares of Common Stock, Options or Convertible Securities issuable under (A) the Existing Benefit Plan as in effect on the Issue Date or (B) the Existing Benefit Plan as amended after the Issue Date and any Benefit Plan which becomes effective after the Issue Date, provided that any such amendment to the Existing Benefit Plan or the effectiveness of any such Benefit Plan is approved by the Board of Directors or by the compensation committee or other authorized committee of the Board of Directors (in either case with the affirmative vote or consent of the Initial Series A Directors or any directors who are thereafter elected by the Holders of the Series A Preferred Stock or appointed to the Board of Directors pursuant to Section 7.2, in each case whether or not serving on any such committee), or any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities;

(ix) any shares of Common Stock issued or deemed to have been issued in a transaction for which an adjustment of the Conversion Price is required pursuant to Section 4.2(d); or

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(x) any shares of Common Stock, Options or Convertible Securities issued in connection with the acquisition of all or part of another business or company, whether by merger, consolidation or otherwise, which is approved by the Board of Directors or by an authorized committee of the Board of Directors (in either case with the affirmative vote or consent of the Initial Series A Directors or any directors who are thereafter elected by the Holders of the Series A Preferred Stock or appointed to the Board of Directors pursuant to Section 7.2, in each case whether or not serving on any such committee), any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities, or any shares of Common Stock, payment-in-kind securities or other securities issuable as a dividend or distribution on any such shares of Common Stock, Options or Convertible Securities.

(d) If a date of record should be fixed at any time, whether by the Corporation or by operation of law, for the subdivision (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) of the shares of Common Stock acquirable hereunder into a greater number of shares, or for the determination of the holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock, Convertible Securities or Options without payment of any consideration for the additional shares of Common Stock, Convertible Securities or Options (including the additional shares of Common Stock or Convertible Securities issuable upon conversion or exercise of such Options), then, as of such date of record, the Conversion Price in effect immediately prior to such date of record shall be proportionately reduced (with the number of shares of Common Stock or Convertible Securities issuable with respect to Options determined from time to time in the manner provided for deemed issuances or sales of Common Stock in Section 4.2(b)). If such subdivision of the shares of Common Stock or the payment of such dividend or distribution does not thereafter occur, the Conversion Price in effect shall be readjusted to the Conversion Price that would have been in effect if the date of record for such subdivision, dividend or distribution had never been fixed. If a date of record should be fixed at any time, whether by the Corporation or by operation of law, for the combination (by reverse stock split, recapitalization, reorganization, reclassification or otherwise) of the shares of Common Stock acquirable hereunder into a smaller number of shares of Common Stock, then, as of such date of record, the Conversion Price in effect immediately prior to such date of record shall be proportionately increased. If such combination of the shares of Common Stock does not thereafter occur, the Conversion Price then in effect shall be readjusted to the Conversion Price that would have been in effect if the date of record for such combination had never been fixed.

(e) If an adjustment of the Conversion Price pursuant to Section 4.2(a), 4.2(b) or 4.2(d) shall become effective as of the record date or after the record date for the applicable Conversion Price Adjustment Event, but before the occurrence of such Conversion Price Adjustment Event, the Corporation may elect to defer, until after the occurrence of such Conversion Price Adjustment Event, (i) issuance to the Holder of any shares of Series A Preferred Stock converted after such record date and before the occurrence of such Conversion Price Adjustment Event the additional shares of Common Stock issuable upon such conversion

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in excess of the number of shares issuable on the basis of the Conversion Price in effect immediately prior to such record date and (ii) payment to such Holder of any amount in cash in lieu of a fractional share of Common Stock. If the Initial Holders or any of their Affiliates shall be the beneficial and record owners of shares of Series A Preferred Stock as of the date of any such election, the Corporation shall give or cause to be given to the Initial Holders written notice of such election within five Business Days after the date of such election.

(f) After the occurrence of any Conversion Price Adjustment Event requiring adjustment of the Conversion Price, the Corporation shall give written notice thereof to the Holders of Series A Preferred Stock within ten Business Days following the occurrence of such Conversion Price Adjustment Event; provided that if an adjustment of the Conversion Price pursuant to Section 4.2(a), 4.2(b) or 4.2(d) shall become effective as of the record date or after the record date for such Conversion Price Adjustment Event, but before the occurrence of such Conversion Price Adjustment Event, the Corporation shall give such written notice within ten Business Days following such record date or subsequent date. Such notice shall state the Conversion Price and any change in the number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock resulting from such Conversion Price Adjustment Event and shall set forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Such calculation shall be certified by an authorized officer of the Corporation. Notice of any Conversion Price Adjustment Event shall be deemed given to the Holders of Series A Preferred Stock (i) by the Corporation’s inclusion of the information specified in the second sentence of this Section 4.2(f) in the Corporation’s current report or next quarterly or annual report filed with the Securities and Exchange Commission pursuant to the Exchange Act, or (ii) at the option of the Corporation, by the Corporation’s mailing to such Holders of a written notice containing such information, in each case within the period specified in the first sentence of this Section 4.2(f).

(g) Anything in Section 4.2 to the contrary notwithstanding, the Corporation shall not be required to give effect to any adjustment of the Conversion Price unless and until the net effect of one or more adjustments required hereunder (each of which shall be carried forward until counted toward adjustment), determined as provided therein, shall have resulted in a change of the Conversion Price by at least 1%, and when the cumulative net effect of more than one adjustment so determined shall be to change the Conversion Price by at least 1%, such change of the Conversion Price shall thereupon be given effect.

4.3 Fundamental Changes

Upon the occurrence of a Fundamental Change, there shall be no adjustment of the Conversion Price and each share of Series A Preferred Stock then outstanding, without the consent of any Holder of Series A Preferred Stock (except as set forth in the last sentence of this Section 4.3), and subject to the Corporation’s optional redemption rights pursuant to Section 5.1(b), shall become convertible only into the kind and amount of shares of Capital Stock or other securities (of the Corporation or another issuer), cash or other property receivable upon such Fundamental Change by a Holder of the number of shares of Common Stock into

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which such share of Series A Preferred Stock could have been converted immediately prior to the effective date of such Fundamental Change assuming such Holder of Common Stock (x) is not a Person (or a Related Entity of a Person) with which the Corporation consolidated, into which the Corporation merged or which merged into the Corporation, or to or with which the applicable sale, conveyance, lease, exchange, transfer or other transaction constituting such Fundamental Change was effected, and (y) failed to exercise the Holder’s rights of election, if any, as to the kind or amount of Capital Stock or other securities, cash or other property receivable upon such Fundamental Change. In any such event, effective provisions shall be made in the certificate or articles of incorporation of the resulting or surviving corporation, in any contract of sale, conveyance, lease, exchange or transfer, or otherwise so that any resulting or surviving corporation or any Transferee in connection with such Fundamental Change shall expressly assume the obligation to deliver, to the Holders of the Series A Preferred Stock, such shares of Capital Stock or other securities, cash or other property (i) upon conversion of the Series A Preferred Stock, if the Series A Preferred Stock shall remain outstanding following such Fundamental Change, or (ii) upon the consummation of such Fundamental Change or thereafter as provided in such effective provisions, if the Series A Preferred Stock shall not remain outstanding following such Fundamental Change. The provisions of this Section 4.3 similarly shall apply to successive Fundamental Changes. The provisions of this Section 4.3 shall be the sole right of Holders of Series A Preferred Stock in connection with any Fundamental Change, and such Holders shall have (i) no separate right to consent with respect to, and shall have no separate vote on, such Fundamental Change (except as expressly required by applicable law) and (ii) no other vote on such Fundamental Change (except as provided in Section 7.1).

4.4 Reservation of Common Stock

The Corporation at all times shall reserve and keep available for issuance upon the conversion of the Series A Preferred Stock such number of its authorized but unissued shares of Common Stock as shall from time to time be sufficient to permit the conversion of all outstanding shares of Series A Preferred Stock, and shall take all action required to increase the authorized number of shares of Common Stock if at any time there shall be insufficient authorized unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series A Preferred Stock.

4.5 Taxes and Other Charges

The issuance or delivery of certificates for Common Stock upon the conversion of shares of Series A Preferred Stock shall be made without charge to the converting Holder of shares of Series A Preferred Stock for such certificates or for any tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the respective names of, or in such names as may be directed by, the Holders of the shares of Series A Preferred Stock converted; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the Holder of the shares of Series A Preferred Stock converted, and the Corporation shall not be required to issue or

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deliver such certificate unless or until the Person or Persons requesting the issuance or delivery thereof shall have paid to the Corporation the amount of such tax or shall have established to the reasonable satisfaction of the Corporation that such tax has been paid.

5. Redemption of Series A Preferred Stock

5.1 Redemption at Option of the Corporation

(a) Except as provided in Section 5.1(b), shares of the Series A Preferred Stock may not be redeemed by the Corporation prior to the third anniversary of the Issue Date. On or after the third anniversary of the Issue Date, the Series A Preferred Stock may be redeemed for cash by the Corporation, at its option, at any time and from time to time, in whole or in part, at a redemption price per share (the “Optional Redemption Price”) equal to the sum of (x) the Liquidation Preference per share, (y) any Accumulated Dividends accrued with respect to such share and (z) any Current Period Dividends with respect to such share accrued to, but not including, the Redemption Date, without interest.

(b) If a Fundamental Change occurs at any time prior to the third anniversary of the Issue Date, the Series A Preferred Stock may be redeemed for cash by the Corporation, at its option, at any time (including concurrently with the occurrence of such Fundamental Change) and from time to time, in whole or in part, at a redemption price per share (the “Fundamental Change Redemption Price”) equal to 110% of the sum of (x) the Liquidation Preference per share, (y) any Accumulated Dividends accrued with respect to such share and (z) any Current Period Dividends with respect to such share accrued to, but not including, the Redemption Date, without interest.

(c) If fewer than all the outstanding shares of the Series A Preferred Stock shall be redeemed pursuant to Section 5.1(a) or 5.1(b), the number of shares to be redeemed shall be determined by the Board of Directors, consistent with the provisions of Section 5.1(a) or 5.1(b), and the shares to be redeemed shall be selected on a pro rata basis (with any fractional shares being rounded up to the nearest whole share). Notwithstanding the foregoing, consistent with the provisions of Section 5.1(a) or 5.1(b), the Corporation may redeem all, none or any amount greater or less than the pro rata portion of shares held by any Holder of fewer than 100 shares of Series A Preferred Stock as may be determined by the Board of Directors.

(d) Notwithstanding anything in this Section 5.1 to the contrary, for so long as the Initial Holders and their Affiliates are the beneficial and record owners of at least 50% of the shares of Series A Preferred Stock then outstanding, the Corporation shall not redeem or exercise its rights to redeem any shares of Series A Preferred Stock pursuant to this Section 5.1 without the prior written consent of the Initial Holders and their Affiliates owning beneficially and of record at least 50% of the shares of Series A Preferred Stock then outstanding unless the Corporation concurrently redeems, purchases or otherwise acquires a pro rata portion of each other class or series of Parity Securities outstanding at such time, which pro rata portion shall be calculated based on the aggregate redemption, purchase or other acquisition price which would

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be payable to the Holders of the Series A Preferred Stock and the holders of each such class or series of Parity Securities to redeem the total number of shares of the Series A Preferred Stock and each such class or series of Parity Securities then outstanding.

5.2 Mandatory Redemption

(a) Subject to the second sentence of this Section 5.2(a), the Corporation shall redeem for cash all outstanding shares of Series A Preferred Stock, if any, on October 29, 2012, at a redemption price per share (the “Mandatory Redemption Price”) equal to the sum of (x) the Liquidation Preference per share, (y) any Accumulated Dividends accrued with respect to such share and (z) any Current Period Dividends with respect to such share accrued to, but not including, the Redemption Date, without interest. Notwithstanding anything in this Section 5.2 to the contrary, for so long as the Initial Holders and their Affiliates are the beneficial and record owners of at least 50% of the shares of Series A Preferred Stock then outstanding, the Corporation shall not redeem any shares of Series A Preferred Stock pursuant to this Section 5.2 without the prior written consent of the Initial Holders and their Affiliates owning beneficially and of record at least 50% of the shares of Series A Preferred Stock then outstanding unless the Corporation concurrently redeems, purchases or otherwise acquires a pro rata portion of each other class or series of Parity Securities outstanding at such time, which pro rata portion shall be calculated based on the aggregate redemption, purchase or other acquisition price which would be payable to the Holders of the Series A Preferred Stock and the holders of each such class or series of Parity Securities to redeem the total number of shares of the Series A Preferred Stock and each such class or series of Parity Securities then outstanding.

(b) If the funds of the Corporation legally available for redemption of shares on the Redemption Date are insufficient to redeem on such date all outstanding shares of the Series A Preferred Stock pursuant to this Section 5.2, the Series B Preferred Stock pursuant to the Series B Certificate of Designation and the Series C Preferred Stock pursuant to the Series C Certificate of Designation, the Corporation shall use those funds that are legally available therefor to redeem the maximum possible number of such shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock ratably among the Holders of such shares such that each Holder of Series A Preferred Stock, each Holder of Series B Preferred Stock and each Holder of Series C Preferred Stock shall be entitled to receive such Holder’s pro rata share of such legally available funds based on the aggregate redemption price which would be payable to the Holders of the Series A Preferred Stock pursuant to this Section 5.2, to the Holders of the Series B Preferred Stock pursuant to the Series B Certificate of Designation and to the Holders of the Series C Preferred Stock pursuant to the Series C Certificate of Designation to redeem the total number of shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock then outstanding. The shares of Series A Preferred Stock not redeemed shall remain outstanding and entitled to all the rights and preferences provided in this Certificate of Designation. At any time and from time to time after October 29, 2012 when additional funds of the Corporation are legally available for the redemption of shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, the Corporation shall promptly use such funds to redeem the balance of the shares of Series A Preferred Stock, Series B Preferred Stock

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and Series C Preferred Stock, on a pro rata basis as aforesaid, that the Corporation is obligated to redeem pursuant to this Section 5.2, the Series B Certificate of Designation or the Series C Certificate of Designation, as the case may be, but that it has not redeemed. If and for so long as any mandatory redemption obligation with respect to shares of Series A Preferred Stock under this Section 5.2 has not been discharged, the Corporation shall not, and shall cause its subsidiaries not to, (i) redeem, purchase or otherwise acquire for any consideration any Parity Securities or discharge any mandatory or optional redemption, sinking fund or other similar obligation in respect of any Parity Securities, except as provided in this Section 5.2(b), or (ii) declare or make any Junior Securities Distribution (including, without limitation, any redemption, purchase or other acquisition of any Junior Securities for any consideration) or discharge any mandatory or optional redemption, sinking fund or other similar obligation in respect of any Junior Securities.

5.3 Redemption Procedures

(a) If the Corporation shall redeem shares of the Series A Preferred Stock pursuant to Section 5.1 or 5.2:

(i) In the case of a redemption pursuant to Section 5.1(a) or 5.2(a), the Corporation shall send a Redemption Notice to the Holders of Series A Preferred Stock not less than 30 days nor more than 60 days prior to the Redemption Date, and in the case of a redemption pursuant to Section 5.1(b) in connection with a Fundamental Change, not less than 15 days prior to such Fundamental Change. Neither the failure to give a Redemption Notice nor any defect therein shall affect the validity of the giving of notice for the redemption of any share of Series A Preferred Stock to be redeemed, except as to any Holder to whom the Corporation has failed to give such Redemption Notice or except as to any Holder whose Redemption Notice was materially defective.

(ii) On or before any Redemption Date, each Holder of shares of Series A Preferred Stock to be redeemed shall surrender the certificate or certificates representing such shares of Series A Preferred Stock (properly endorsed or assigned, or transferred, if the Corporation shall so require and the Redemption Notice shall so state) to the Corporation or the Redemption Agent (if appointed) in the manner and at the place designated in the Redemption Notice.

(iii) On the Redemption Date, the Corporation or the Redemption Agent, as applicable, shall pay the full Redemption Price in cash to the Holder whose name appears on such certificate or certificates as the owner thereof.

(iv) The shares of Series A Preferred Stock represented by each certificate to be surrendered shall no longer be deemed outstanding and shall be automatically (and without any further action of the Corporation or the Holder) canceled as of the Redemption Date (unless the Corporation shall be in default of the payment of the Redemption Price) whether or not certificates for such shares are returned to the Corporation, and shall be retired as provided in Section 9.1.

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(v) If fewer than all the shares of Series A Preferred Stock represented by any certificate are to be redeemed, a new certificate shall be issued representing the unredeemed shares, without cost to the Holder thereof. Upon such redemption, the Corporation shall execute and the Transfer Agent shall authenticate and deliver such new certificate to the Holder thereof at such address designated by such Holder. If any unredeemed share would be a fractional share, the Corporation, in its sole discretion, may either issue such fractional share to such Holder or in lieu thereof pay to such Holder a cash adjustment for such fractional share based on the Redemption Price.

(b) If a Redemption Notice shall have been given as provided in Section 5.3(a), and except as otherwise expressly provided in this Certificate of Designation, all rights (excluding the right to receive the Redemption Price) of the Holders of shares of Series A Preferred Stock so called for redemption shall cease either (i) from and after the Redemption Date (unless the Corporation shall default in the payment of the Redemption Price, in which case such rights shall not terminate at the Redemption Date) or (ii) if the Corporation shall so elect and state in the Redemption Notice, from and after the time and date (which date shall be the Redemption Date or an earlier date not less than 15 days after the date of mailing of the Redemption Notice) on which the Corporation shall irrevocably deposit in trust for the Holders of the shares to be redeemed with a designated Redemption Agent as paying agent funds in an amount sufficient to pay the Redemption Price at the office of such paying agent on the Redemption Date. Any funds so deposited with such Redemption Agent that shall not be required for such redemption shall be returned to the Corporation forthwith. Subject to applicable escheat laws, any funds so set aside by the Corporation and unclaimed at the end of one year after the Redemption Date shall revert to the general funds of the Corporation, after which reversion the Holders of the shares of Series A Preferred Stock so called for redemption shall look only to the general funds of the Corporation for the payment of the Redemption Price, without interest. Any interest accrued on funds held by the Redemption Agent shall be paid to the Corporation from time to time.

(c) Except as provided in Sections 5.1(a), 5.1(b) and 5.2(a), the Corporation shall make no adjustment or payment for, or have any other obligation with respect to, any Accumulated Dividends or Current Period Dividends accrued with respect to shares of Series A Preferred Stock in connection with or following the redemption of such shares.

(d) No shares of Series A Preferred Stock may be redeemed by the Corporation except with funds legally available for the payment of the Redemption Price.

(e) As provided in Section 4.1(a), and notwithstanding anything in this Certificate of Designation to the contrary, each Holder of shares of Series A Preferred Stock which shall be called for redemption pursuant to this Section 5 shall have the right, which shall be exercisable at any time up to the close of business on the Business Day immediately prior to

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the Redemption Date, to convert all or any portion of such shares into shares of Common Stock pursuant to Section 4, unless the Corporation shall default in making the payment due under this Section 5 upon redemption of such shares, in which case such right shall be exercisable at any time until the close of business on the Business Day immediately prior to the date on which such payment is made.

6. Liquidation Preference

6.1 Liquidation Preference

Upon the occurrence of any Liquidation Event, after payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of Senior Securities, and before any payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of Junior Securities, the Holders of the Series A Preferred Stock shall be entitled to receive an amount per share of Series A Preferred Stock in cash equal to the greater of (x) the sum of (A) the Liquidation Preference per share, (B) any Accumulated Dividends accrued with respect to such share and (C) any Current Period Dividends with respect to such share accrued to, but not including, the date of such Liquidation Event or (y) the aggregate amount that would have been received with respect to the shares of Common Stock such Holders would have received, assuming the shares of Series A Preferred Stock had been converted into Common Stock pursuant to Section 4 immediately prior to the date of such Liquidation Event.

6.2 Distribution on Parity Securities

If, upon any Liquidation Event, the amounts payable with respect to the Series A Preferred Stock pursuant to Section 6.1 and such amounts payable on all other Parity Securities are not paid in full, the Holders of the Series A Preferred Stock and the holders of such Parity Securities shall share pro rata in the assets of the Corporation available for distribution in proportion to the full distribution thereof to which each is entitled.

6.3 Distribution of Remaining Assets

After payment of the full amount to which Holders of the Series A Preferred Stock are entitled pursuant to Section 6.1 upon any Liquidation Event, Holders of the Series A Preferred Stock shall have no right or claim to any of the remaining assets of the Corporation.

6.4 Effect of Certain Transactions

Neither the sale, conveyance, lease, exchange or transfer of all or substantially all of the assets of the Corporation (for Capital Stock or other securities, cash or other consideration) nor the consolidation or merger of the Corporation with or into one or more entities shall be deemed to be a Liquidation Event for purposes of this Certificate of Designation.

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7. Voting Rights

7.1 “As Converted” Voting Rights

The voting rights and related notice rights of Holders of the Series A Preferred Stock set forth in this Section 7.1 are subject to, and qualified to the extent provided by, Section 7.2, applicable law or regulation, and the NASDAQ Marketplace Rules (if applicable) or the rules, regulations, interpretations and practices of any securities exchange on which the Common Stock is traded, as determined by the Board of Directors. The Holders of the Series A Preferred Stock shall be entitled to vote on all matters on which the Holders of Common Stock shall be entitled to vote, in the same manner and with the same effect as the Holders of Common Stock, voting together with the Holders of Common Stock as a single class. For this purpose, the Holders of the Series A Preferred Stock shall be given notice of any meeting of stockholders of which the Holders of Common Stock are given notice in accordance with the bylaws of the Corporation. With respect to any matter on which the Holders of the Series A Preferred Stock shall be entitled to vote together with the Holders of Common Stock as a single class as provided in this Section 7.1, each Holder of the Series A Preferred Stock shall have a number of votes per share of the Series A Preferred Stock held of record by such Holder (on the record date for the meeting of stockholders, if such matter is subject to a vote at a meeting of stockholders, or on the effective date of any consent, if such matter is subject to a consent of the stockholders without a meeting of stockholders), equal to the number of shares of Common Stock into which such share of Series A Preferred Stock is convertible pursuant to Section 4 immediately after the close of business on such record date or effective date, as the case may be.

7.2 Election of Directors

(a) At and after the first annual meeting of the Corporation’s stockholders following the effective date of the Plan, and otherwise in accordance herewith, from the Issue Date until the first record date for determining stockholders entitled to vote upon or consent to the election of directors to the Board of Directors on which less than 66 ²/3% of the shares of Series A Preferred Stock issued by the Corporation (whether sold by the Corporation or issued as a Preferred Dividend or otherwise and subject to adjustment to reflect any subdivision or combination of the Corporation’s outstanding Capital Stock) remain outstanding, the Holders of the Series A Preferred Stock, voting as a separate class, exclusive of all other stockholders, shall be entitled to elect two directors to serve on the Board of Directors. From the first record date for determining stockholders entitled to vote upon or consent to the election of directors to the Board of Directors on which less than 66 ²/3%, but more than 33 ¹/3%, of the shares of Series A Preferred Stock issued by the Corporation (whether sold by the Corporation or issued as a Preferred Dividend and subject to adjustment to reflect any subdivision or combination of the Corporation’s outstanding Capital Stock) remain outstanding, the Holders of the Series A Preferred Stock, voting as a separate class, exclusive of all other stockholders, shall be entitled to elect one director to serve on the Board of Directors. From and after the first record date for determining stockholders entitled to vote upon or consent to the election of directors to the Board of Directors on which 33 ¹/3% or fewer shares of Series A Preferred Stock issued by the

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Corporation (whether sold by the Corporation or issued as a Preferred Dividend and subject to adjustment to reflect any subdivision or combination of the Corporation’s outstanding Capital Stock) remain outstanding (the “Single Class Voting Date”), the Holders of the Series A Preferred Stock shall be entitled to vote on the election of directors, in the same manner and with the same effect as the Holders of Common Stock, voting together with the Holders of Common Stock as a single class in the manner provided in Section 7.1. Except as provided in this Section 7.2(a), the Holders of the Series A Preferred Stock shall not be entitled to vote in the election of any directors to serve on the Board of Directors.

(b) At any meeting held prior to the Single Class Voting Date at which the stockholders of the Corporation are entitled to vote upon the election of directors, the presence in person or by proxy of the Holders of shares representing more than 50% of the voting power of the shares of Series A Preferred Stock outstanding on the record date for such meeting shall be required to constitute a quorum of such class for the election of directors by such class.

(c) Any Initial Series A Director and any director who is thereafter elected to the Board of Directors by the Holders of the Series A Preferred Stock prior to the Single Class Voting Date shall hold office until the earlier of (i) the time which is immediately after the next meeting of stockholders at which directors elected by the Holders of the Series A Preferred Stock, voting as a separate class, exclusive of all other stockholders, are elected and (ii) such time as the Holders of the Series A Preferred Stock shall no longer be entitled hereunder, voting as a separate class, exclusive of all other stockholders, to elect directors to serve on the Board of Directors, and any vacancy in respect of any Initial Series A Director or any such other director that is filled prior to the Single Class Voting Date shall be filled only by vote of the remaining Initial Series A Director or the remaining director so elected by Holders of the Series A Preferred Stock, or if there shall be no such remaining Initial Series A Director or other director, by consent of the Holders of Series A Preferred Stock, or at a special meeting of the Holders of the Series A Preferred Stock duly called, or, if no such special meeting is called, at the next annual meeting of stockholders. Except as otherwise and to the extent provided by applicable law or regulation or by the NASDAQ Marketplace Rules (if applicable) or the rules, regulations, interpretations and practices of any securities exchange on which the Common Stock is traded, in connection with any consent of Holders of Series A Preferred Stock, the consent thereby of Holders of shares representing more than 50% of the voting power of the then outstanding shares of Series A Preferred Stock shall be sufficient to approve or take action upon the matters contained therein.

(d) Prior to the Single Class Voting Date, a proper officer of the Corporation may call a special meeting of the Holders of shares of Series A Preferred Stock and, upon the written request of Holders of shares representing at least 25% of the voting power of the then outstanding shares of Series A Preferred Stock addressed and delivered to the Secretary of the Corporation, shall call a special meeting of the Holders of shares of Series A Preferred Stock or solicit a consent of such Holders. Such consent shall be sent by the Corporation to the Holders of shares of Series A Preferred Stock entitled to vote on the election of directors to the Board of Directors not later than 20 Business Days (or two Business Days, if the Initial Holders and their

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Affiliates are the beneficial and record owners of at least 50% of the shares of Series A Preferred Stock then outstanding) following such written request. Such meeting shall be held at the earliest practicable date upon the notice required for annual meetings of stockholders at the place for holding annual meetings of stockholders of the Corporation, or, if none, at a place designated by the Board of Directors. Notwithstanding the provisions of this Section 7.2(d), if the Initial Holders and their Affiliates are not the beneficial and record owners of at least 50% of the shares of Series A Preferred Stock then outstanding, no consent shall be solicited and no such special meeting shall be called during a period within the 60 days immediately preceding the date fixed for the next annual meeting of stockholders, in which such case the election of directors pursuant to Section 7.2 shall be held at such annual meeting of stockholders. The provisions of the Corporation’s bylaws regarding nominations of directors by stockholders of the Corporation shall not apply to nominations of directors by Holders of Series A Preferred Stock pursuant to this Section 7.2.

(e) Any Initial Series A Director or any director who is thereafter elected to the Board of Directors by the Holders of the Series A Preferred Stock or appointed by any Initial Series A Director or any director or directors elected by the Holders of Series A Preferred Stock, in each case prior to the Single Class Voting Date, may be removed during such director’s term of office, either with or without cause, prior to the Single Class Voting Date by the affirmative vote of Holders of shares representing more than 50% of the voting power of the then outstanding shares of Series A Preferred Stock entitled to vote, given either at a meeting of such Holders duly called for that purpose or pursuant to a consent of such Holders without a meeting, and any vacancy created by such removal that is filled prior to the Single Class Voting Date may be filled only in the manner provided in this Section 7.2.

7.3 Approval of Certain Matters

(a) So long as any shares of Series A Preferred Stock are outstanding, the Corporation shall not (i) amend, alter or repeal any provision of the Certificate of Incorporation or this Certificate of Designation to alter or change the powers, preferences or special rights of shares of Series A Preferred Stock (whether by merger, consolidation, business combination, other extraordinary corporate transaction or otherwise) so as to affect them adversely, or, (ii) other than as provided in Section 2.2(a), 4.1, 4.2, 4.3, 5 or 6.1, change the Series A Preferred Stock into any other securities, cash or other property, in the case of each of clauses (i) and (ii), without the affirmative vote or consent of Holders of the shares representing more than 50% of the voting power of the then outstanding shares of Series A Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series A Preferred Stock called for such purpose; provided that any such amendment of this Certificate of Designation that changes any dividend or other amount payable on, or the liquidation preference of, the Series A Preferred Stock shall require the affirmative vote or consent of Holders of the shares representing at least 66 ²/3% of the voting power of the then outstanding shares of Series A Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by

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means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series A Preferred Stock called for such purpose.

(b) So long as any shares of Series A Preferred Stock are outstanding, the Corporation shall not authorize or issue, or increase the authorized amount of, any Parity Securities, including any additional shares of Series A Preferred Stock (other than (i) shares of Series A Preferred Stock or other securities issuable or payable as Preferred Dividends on the Series A Preferred Stock and shares of Series A Preferred Stock issuable after the Issue Date pursuant to or as provided in the Executive Employment Agreements or in connection with a stock split or similar transaction, in each case pursuant to this Certificate of Designation, (ii) shares of Series B Preferred Stock or other securities issuable or payable as dividends on the Series B Preferred Stock and shares of Series B Preferred Stock issuable after the Issue Date pursuant to or as provided in the Merger Agreement and the Executive Employment Agreements or in connection with a stock split or similar transaction, in each case pursuant to the Series B Certificate of Designation as in effect on the Certificate Amendment Date, and (iii) shares of Series C Preferred Stock issuable after the Issue Date upon the exercise or conversion of the Series D Warrants or in connection with a stock split or similar transaction and shares of Series C Preferred Stock or other securities issuable or payable as dividends on the Series C Preferred Stock, in each case pursuant to the Series C Certificate of Designation), or any Senior Securities, or any security convertible into or exchangeable for any such Parity or Senior Securities (other than the Series D Warrants), without the affirmative vote or consent of Holders of the shares representing more than 50% of the voting power of the then outstanding shares of Series A Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series A Preferred Stock called for such purpose.

(c) The consent or votes required in Sections 7.3(a) and 7.3(b) shall be in addition to any consent or approval of Holders of the Series A Preferred Stock which may be required by law or pursuant to any provision of the Certificate of Incorporation.

7.4 Other Voting Rights

In exercising the voting rights set forth in this Section 7, each share of Series A Preferred Stock shall have one vote per share except as otherwise expressly provided for in this Certificate of Designation. Except as otherwise required by applicable law or as set forth in this Certificate of Designation, the shares of Series A Preferred Stock shall not have any relative, participating, optional or other special voting rights and powers, and the vote or consent of the holders of the Series A Preferred Stock shall not be required for the taking of any corporate action.

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7.5 Notices; Notices of Record Date

(a) So long as the Initial Holders and their Affiliates are the beneficial and record owners of at least 50% of the shares of Series A Preferred Stock then outstanding, in the event of:

(i) any taking by the Corporation of a record of the holders of any class of securities of the Corporation for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of Capital Stock of any class or any other securities or property, or to receive any other right, other than, in each case, (A) a regular quarterly or other periodic dividend publicly announced by the Corporation or provided for in the instrument governing such class of securities (including, without limitation, Preferred Dividends payable on the Series A Preferred Stock pursuant to Section 2, dividends payable on the Series B Preferred Stock pursuant to the Series B Certificate of Designation as in effect on or prior to the Certificate Amendment Date and dividends payable on the Series C Preferred Stock pursuant to the Series C Certificate of Designation), (B) any other issuance of Series A Preferred Stock after the Issue Date pursuant to this Certificate, any other issuance of Series B Preferred Stock after the Issue Date pursuant to the Series B Certificate of Designation as in effect on or prior to the Certificate Amendment Date and any other issuance of Series C Preferred Stock after the Issue Date pursuant to the Series C Certificate of Designation or (C) a regular quarterly or other periodic payment of interest in cash or securities on, or such payment of interest effectuated by an increase in the amount of, any issue of the Corporation’s indebtedness in accordance with the instrument governing such indebtedness, or

(ii) the proposed filing of a certificate of dissolution in connection with any Liquidation Event,

then and in each such event the Corporation shall give or cause to be given to each Holder of the Series A Preferred Stock a written notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right and a description of such dividend, distribution or right or the date on which the filing of such certificate of dissolution is expected to be effected, as the case may be, and (ii) the date, if any, that is to be fixed, on which the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such event. Such notice shall be given at least 20 days prior to the date specified in such notice on which such event, action or record is to be taken or on which the filing of such certificate of dissolution is expected to be effected. Any failure by the Corporation to provide any such notice required by this Section 7.5(a) shall not affect the validity of any event, action or record required to be specified in such notice.

(b) Without limiting the generality of Section 7.5(a), any notice required by Section 7.5(a) to be given to the Holders of shares of Series A Preferred Stock shall be deemed

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delivered (i) upon personal delivery to the Holder to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient and, if not, then on the next Business Day, (iii) five days after having been deposited into the U.S. mails or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All notices required by Section 7.5(a) shall be sent to each Holder at such Holder’s address appearing on the stock register of the Corporation.

7.6 Amendment of Certificate of Designation

So long as the Initial Holders and their Affiliates are the beneficial and record owners of at least a majority of the shares of Series A Preferred Stock then outstanding, in addition to any vote required by law or the Certificate of Incorporation (including this Certificate of Designation), the affirmative vote or consent of Holders of the shares representing more than 50% of the voting power of the then outstanding shares of Series A Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series A Preferred Stock called for such purpose shall be required to amend the Series B Certificate of Designation and the Series C Certificate of Designation; provided that such vote or consent shall not be required with respect to any proposed amendment of the Series B Certificate of Designation or the Series C Certificate of Designation (any such proposed amendment, the “Proposed Amendment”) if the Corporation shall previously have complied with the following provisions of this Section 7.6 with respect to such Proposed Amendment. If the Initial Holders and their Affiliates are the beneficial and record owners of at least a majority of the shares of Series A Preferred Stock then outstanding, and the Board of Directors shall determine that the Corporation will not seek the affirmative vote or consent of the Holders of the Series A Preferred Stock with respect to a Proposed Amendment pursuant to this Section 7.6 prior to submitting such Proposed Amendment to the Holders of the Series B Preferred Stock or the Holders of the Series C Preferred Stock, as the case may be, for approval, the Corporation shall give written notice of such Proposed Amendment (which shall include the text thereof) to the Initial Holders that are Holders on the date of such notice. If, within ten Business Days after the Corporation shall have given such written notice to such Initial Holders, the Required Initial Holders shall give written notice to the Corporation that the Required Initial Holders seek to have this Certificate of Designation amended in a manner substantially similar to such Proposed Amendment, the Board of Directors, in addition to approving such Proposed Amendment, shall approve, declare advisable and submit to the Holders of the Series A Preferred Stock for approval such a substantially similar amendment to this Certificate of Designation. If, within the period of ten Business Days described in the immediately preceding sentence, the Required Initial Holders do not provide such written notice to the Corporation that the Required Initial Holders seek to have this Certificate of Designation so amended, or, if the Required Initial Holders do so notify the Corporation, but the Holders of the Series A Preferred Stock do not approve or consent to such a substantially similar amendment to this Certificate of Designation, the Corporation shall be deemed to have complied with this Section 7.6 with respect to such Proposed Amendment and the Holders of the Series A Preferred Stock shall have no right to vote upon or consent to such Proposed Amendment

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pursuant to this Section 7.6. Any substantially similar amendment to this Certificate of Designation approved or consented to pursuant to this Section 7.6 shall become effective or nearly as practicable concurrently with, or immediately prior to, the effectiveness of the Proposed Amendment. In no event shall the failure of the Required Initial Holders to seek to have this Certificate of Designation amended in a manner substantially similar to any Proposed Amendment affect the applicability of this Section 7.6 with respect to any subsequent Proposed Amendment. Any written notice required to be given by the Corporation or the Required Initial Holders pursuant to this Section 7.6 shall be given in the manner, and with the effect, provided in Section 7.5(b).

8. Certain Definitions

Set forth below are the meanings assigned to certain defined terms used in this Certificate of Designation.

8.1 “Accumulated Dividends,” with respect to a share of Series A Preferred Stock, on any date of determination, means all Preferred Dividends that have accrued with respect of such share pursuant to Section 2.1(a) as of the Dividend Payment Date on or immediately preceding such date of determination, but which have not been paid. The Accumulated Dividends accrued with respect to any share of Series A Preferred Stock shall be reduced by the amount of any Preferred Dividends specified above which are actually paid with respect of such share as provided in Section 2.1(c).

8.2 “Affiliate” has the same meaning as in Rule 12b-2 under the Exchange Act.

8.3 “Annual Dividend Rate” has the meaning specified in Section 2.1(a).

8.4 “Beneficial owner” or “beneficially own” has the same meaning as in Rule 13d-3 under the Exchange Act.

8.5 “Benefit Plan” means any stock option, restricted stock, stock incentive, deferred compensation, profit sharing, defined benefit or other benefit plan of the Corporation or any of its subsidiaries.

8.6 “Board of Directors” means the board of directors of the Corporation.

8.7 “Business Day” means any day other than a Saturday, a Sunday or any day on which banking institutions in The City of New York or the State of Georgia or at a place payment is to be received are authorized by law, regulation or executive order to remain closed. If a payment date is not a Business Day at a place of payment, payment may be made at that place on the next succeeding Business Day, and no interest shall accrue for the intervening period.

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8.8 “Capital Stock” means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock or partnership or membership interests, whether common or preferred.

8.9 “Certificate Amendment Date” means the date on which this Amended Certificate of Designation shall become effective under the General Corporation Law of the State of Delaware.

8.10 “Certificate of Incorporation” means the Restated Certificate of Incorporation of the Corporation, as amended from time to time.

8.11 “Closing Price” means, with respect to the Common Stock, on any date, (i) the last sales price on the NASDAQ National Market, the NASDAQ SmallCap Market or the OTC Bulletin Board or the principal securities exchange or other securities market on which the Common Stock is then traded, or (ii) if the Common Stock is so traded, but not so reported, the average of the last bid and ask prices, as those prices are reported on the NASDAQ National Market, the NASDAQ SmallCap Market or the OTC Bulletin Board or the principal securities exchange or other securities market on which the Common Stock is then traded, or (iii) if the Common Stock is not listed or authorized for trading on the NASDAQ National Market, the NASDAQ SmallCap Market or the OTC Bulletin Board or any securities exchange or comparable securities market, the average of the closing bid and ask prices as furnished by two members of the National Association of Securities Dealers, Inc. selected from time to time by the Board of Directors for that purpose. If the Common Stock is not listed and traded in any manner such that the prices and quotations referred to above are available for the period required hereunder, the Closing Price per share shall be deemed to be the fair value per share of Common Stock as determined by the Board of Directors.

8.12 “Common Stock” means the Corporation’s authorized Common Stock.

8.13 “Common Stock Deemed Outstanding” means, on any date of determination, the number of shares of Common Stock actually outstanding, plus the maximum total number of shares of Common Stock issuable as of such date of determination upon the exercise of any then outstanding Options (including, without limitation, the Warrants and any Options outstanding under the Existing Benefit Plan or any other Benefit Plan) or issuable as of such date of determination upon conversion or exchange of any then outstanding Convertible Securities (including, without limitation, the Series A Preferred Stock and the Series B Preferred Stock), whether or not such Options or Convertible Securities are actually exercisable, convertible or exchangeable at such time, without duplication.

8.14 “Conversion Date” means the date the Corporation or the Transfer Agent receives the Conversion Notice.

8.15 “Conversion Notice” means a written notice given by a Holder of Series A Preferred Stock to the Corporation pursuant to Section 4.1(b) stating that such Holder elects to

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convert all or a portion of such Holder’s shares of Series A Preferred Stock represented by certificates delivered to the Corporation or the Transfer Agent contemporaneously with such written notice. The Conversion Notice shall be in substantially the form of Exhibit A hereto.

8.16 “Conversion Price” means $5.7143 per share of Common Stock as of the Issue Date, subject to adjustment as provided in Section 4.2.

8.17 “Conversion Price Adjustment Event” means any event specified in Section 4.2 resulting in an adjustment of the Conversion Price.

8.18 “Convertible Securities” has the meaning specified in Section 4.2(b).

8.19 “Corporation” means ITC^DeltaCom, Inc., a Delaware corporation organized and existing under the General Corporation Law of the State of Delaware.

8.20 “Current Period Dividends,” with respect to a share of Series A Preferred Stock, on any date of determination, means all Preferred Dividends that have accrued with respect of such share pursuant to Section 2 since the Dividend Payment Date immediately preceding such date of determination, but which have not been paid.

8.21 “Dilutive Issuance” has the meaning specified in Section 4.2(a).

8.22 “Dividend Payment Date” has the meaning specified in Section 2.1(a).

8.23 “Dividend Payment Record Date” has the meaning specified in Section 2.1(a).

8.24 “Dividend Period” has the meaning specified in Section 2.1(a).

8.25 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

8.26 “Executive Employment Agreements” means (i) the Employment Agreement, dated as of February 3, 2005, between the Corporation and Randall E. Curran, as amended from time to time (provided that no amendment to such Employment Agreement after the Certificate Amendment Date shall change the type or increase the amount of securities of the Corporation issuable thereunder), (ii) the Employment Agreement, dated as of February 21, 2005, between the Corporation and Richard E. Fish, Jr., as amended from time to time (provided that no amendment to such Employment Agreement after the Certificate Amendment Date shall change the type or increase of the amount of securities of the Corporation issuable thereunder), and (iii) the Employment Agreement, dated as of February 28, 2005, between the Corporation and James P. O’Brien, as amended from time to time (provided that no amendment to such Employment Agreement after the Certificate Amendment Date shall change the type or increase the amount of securities of the Corporation issuable thereunder).

8.27 “Existing Benefit Plan” means the ITC^DeltaCom, Inc. Stock Incentive Plan.

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8.28 “Fundamental Change” means any transaction or event, including, without limitation, any merger, consolidation, sale, conveyance, lease, exchange or transfer of assets, tender or exchange offer, reclassification (including any such reclassification in connection with a consolidation or merger in which the Corporation is the surviving corporation), capital reorganization, compulsory share exchange or liquidation, in each case in which all or substantially all outstanding shares of the Common Stock, or all or substantially all of the assets or the property of the Corporation, are converted into or exchanged for Capital Stock (of the Corporation or another issuer) or other securities, cash or other property.

8.29 “Fundamental Change Redemption Price” has the meaning specified in Section 5.1(b).

8.30 “Holder” means a Person in whose name shares of Capital Stock are registered on the stock register of the Corporation.

8.31 “Independent Appraiser” means an independent investment banking firm or independent public accounting firm, in each case of nationally recognized standing in the valuation of businesses similar to the business of the Corporation.

8.32 “Initial Holder” means (i) any Holder of shares of Series A Preferred Stock on the Issue Date and (ii) a maximum of one Affiliate of SCANA Communications Holdings, Inc. to which SCANA Communications Holdings, Inc. transfers shares of Series A Preferred Stock, provided that SCANA Communications Holdings, Inc. gives written notice to the Corporation in connection with such transfer that such Affiliate shall be considered an Initial Holder.

8.33 “Initial Series A Directors” means the two directors who are designated by the New Equity Investors for, and approved by, the Board of Directors under the Plan.

8.34 “Issue Date” means October 29, 2002.

8.35 “Junior Securities” has the meaning specified in Section 3.1(a).

8.36 “Junior Securities Distribution” has the meaning specified in Section 2.2(b).

8.37 “Liens” means liens and charges other than liens and charges arising under (i) any Purchase Agreement, (ii) any other agreement entered into between the Corporation and any Holder of the Series A Preferred Stock from time to time or (iii) any other agreement to which the Corporation is not a party.

8.38 “Liquidation Event” means a liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary.

8.39 “Liquidation Preference” has the meaning specified in Section 1.1.

8.40 “Mandatory Redemption Price” has the meaning specified in Section 5.2(a).

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8.41 “Merger Agreement” means the Agreement and Plan of Merger, dated as of July 2, 2003, as amended from time to time, among the Corporation, BTI Telecom, Inc., 8DBC1 Corp., WCAS Capital Partners III, L.P., Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS Information Partners, L.P. and certain individual investors and trusts listed on the signature pages thereto.

8.42 “Merger Common Stock” means the Common Stock issued by the Corporation pursuant to the Merger Agreement, so long as no such amendment after the Certificate Amendment Date shall increase the number of shares of Common Stock issuable pursuant thereto.

8.43 “NASDAQ Marketplace Rules” means the rules, regulations, interpretations and practices of the National Association of Securities Dealers, Inc. and The NASDAQ Stock Market, Inc. in effect from time to time and applicable to the Corporation.

8.44 “New Equity Investors” has the meaning set forth in the Plan.

8.45 “Optional Redemption Price” has the meaning specified in Section 5.1(a).

8.46 “Options” has the meaning specified in Section 4.2(b).

8.47 “Parity Securities” has the meaning specified in Section 3.1(b).

8.48 “Person” means any individual, corporation, partnership, joint venture, association, joint-stock issuer, interest, trust or unincorporated organization (including any subdivision or ongoing business of any such entity or substantially all of the assets of any such entity, subdivision or business).

8.49 “Plan” means the Corporation’s 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)).

8.50 “Preferred Dividends” has the meaning specified in Section 2.1(a).

8.51 “Proposed Amendment” has the meaning specified in Section 7.6.

8.52 “Purchase Agreements” means (i) the Purchase Agreement, dated as of August 22, 2002, as amended from time to time, between the Corporation and SCANA Corporation and (ii) the Purchase Agreement, dated as of August 22, 2002, as amended from time to time, among the Corporation, ITC Holding Company, Inc., Campbell B. Lanier, III and the other Purchasers named therein.

8.53 “Redemption Agent” means that Person, if any, appointed by the Corporation to hold funds deposited by the Corporation in trust to pay to the Holders of shares of Series A Preferred Stock to be redeemed. Any Redemption Agent shall be (i) a national banking

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association or corporation organized and doing business under the laws of the United States of America or of any state or territory thereof or of the District of Columbia, authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal, state, territorial or District of Columbia authority, and having a combined capital and surplus of at least $50 million or (ii) an Affiliate of such a national banking association or corporation that customarily performs the duties of redemption agent for public securities issues.

8.54 “Redemption Date” means the date set forth in the Redemption Notice which is fixed for redemption of the shares of Series A Preferred Stock referred to therein.

8.55 “Redemption Notice” means that notice to be given by the Corporation to the Holders notifying the Holders as to the redemption, in whole or in part, of the Series A Preferred Stock pursuant to Section 5. The Redemption Notice shall include the following information:

(i) the Redemption Date and the time of day on such date;

(ii) the total number of shares of Series A Preferred Stock to be redeemed and, if fewer than all the shares held by such Holder are to be redeemed, the number of such shares to be redeemed from such Holder;

(iii) the Redemption Price;

(iv) the place or places where certificates for such shares are to be surrendered for payment of the Redemption Price;

(v) that dividends on the shares to be redeemed shall cease to accrue on such Redemption Date unless the Corporation defaults in the payment of the Redemption Price; and

(vi) the name of any bank or other financial institution, if any, performing the duties of Redemption Agent.

The Redemption Notice shall be given by first-class mail to each record Holder of the shares to be redeemed, at such Holder’s address as such address appears on the books of the Corporation.

8.56 “Redemption Price” means each of the Optional Redemption Price, the Fundamental Change Redemption Price and the Mandatory Redemption Price, as the case may be.

8.57 “Related Entity” means, with respect to any Person, (i) if such Person is an “ultimate parent entity,” as defined in the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations promulgated thereunder, each direct or indirect subsidiary of such Person and (ii) if such Person is not an “ultimate parent entity,” as defined in such Act and such regulations, each ultimate parent entity (as so defined) of such Person and each other Person which is a direct or indirect subsidiary of any such ultimate parent entity.

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8.58 “Reorganization Common Stock” means the Common Stock issued by the Corporation under or in connection with the Plan, including, without limitation, the Common Stock issued by the Corporation pursuant to the Purchase Agreements on the effective date of the Plan.

8.59 “Required Initial Holders” means, as of any date of determination, Initial Holders and their Affiliates that are the beneficial and record owners, as of such date of determination, of a majority of the shares of Series A Preferred Stock outstanding on such date of determination.

8.60 “Restricted Securities” means (i) the shares of Series A Preferred Stock issued and sold by the Corporation pursuant to or as provided in the Purchase Agreements and the Executive Employment Agreements, (ii) the shares of Series A Preferred Stock and other securities issued by the Corporation as Preferred Dividends on the shares of Series A Preferred Stock referred to in clause (i), and (iii) the shares of Common Stock and other securities issued by the Corporation upon the conversion of the shares of Series A Preferred Stock referred to in clauses (i) and (ii).

8.61 “Restricted Securities Legend” means the following legend:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS AND ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT AND SUCH LAWS. THE SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN A TRANSACTION OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS. THE CORPORATION RESERVES THE RIGHT PRIOR TO ANY SUCH TRANSACTION TO REQUIRE AN OPINION OF COUNSEL TO THE HOLDER OF THE SECURITIES SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE WITH THE FOREGOING RESTRICTIONS.

8.62 “Senior Securities” has the meaning specified in Section 3.1(c).

8.63 “Series A Preferred Stock” means the 8% Series A Convertible Redeemable Preferred Stock of the Corporation authorized in this Certificate of Designation.

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8.64 “Series A Warrant Agreement” means the Warrant Agreement, dated as of October 29, 2002, between the Corporation and Mellon Investor Services LLC, as Warrant Agent, as amended from time to time, so long as no amendment to such Warrant Agreement after the Certificate Amendment Date shall increase the number of warrants issuable pursuant thereto.

8.65 “Series B Certificate of Designation” means the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series B Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof, as amended from time to time unless otherwise specified in this Certificate of Designation.

8.66 “Series B Preferred Stock” means the 8% Series B Convertible Redeemable Preferred Stock of the Corporation authorized in the Series B Certificate of Designation.

8.67 “Series B Warrant Agreement” means the Warrant Agreement, dated as of October 6 2003, between the Corporation and Mellon Investor Services LLC, as Warrant Agent, as amended from time to time, so long as no amendment to such Warrant Agreement after the Certificate Amendment Date shall increase the number of warrants issuable pursuant thereto.

8.68 “Series C Certificate of Designation” means the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series C Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof, as amended from time to time.

8.69 “Series C Preferred Stock” means the 8% Series C Convertible Redeemable Preferred Stock of the Corporation authorized in the Series C Certificate of Designation.

8.70 “Series D Warrant Agreement” means the Warrant Agreement, dated as of July 26, 2005, between the Corporation and Mellon Investor Services LLC, as Warrant Agent, as amended from time to time, so long as no amendment to such Warrant Agreement after the Certificate Amendment Date shall increase the number of warrants issuable pursuant thereto.

8.71 “Series D Warrants” means the warrants to purchase Series C Preferred Stock and Common Stock issued by the Corporation pursuant to the Series D Warrant Agreement.

8.72 “Single Class Voting Date” has the meaning specified in Section 7.2(a).

8.73 “Transfer Agent” means the Person duly appointed by the Corporation in its sole discretion to serve as transfer agent for the Series A Preferred Stock. The Corporation may serve as Transfer Agent.

8.74 “Transferee” means any Person that acquires assets of the Corporation in connection with any sale, conveyance, lease, exchange or transfer of such assets by the Corporation to or with such Person.

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8.75 “Warrants” means (i) the warrants to purchase Common Stock issued by the Corporation pursuant to the Series A Warrant Agreement and (ii) the warrants to purchase Common Stock issued by the Corporation pursuant to the Series B Warrant Agreement; provided that the warrants referred to in each of clauses (i) and (ii) have the same exercise expiration date and (subject to adjustments pursuant to antidilution provisions of the Series A Warrant Agreement or the Series B Warrant Agreement, as the case may be) the same exercise price as the warrants issued pursuant to the Series A Warrant Agreement or the Series B Warrant Agreement, as the case may be, which are outstanding as of the Certificate Amendment Date.

9. Other Provisions

9.1 Status of Reacquired Shares

Shares of Series A Preferred Stock issued and redeemed or otherwise reacquired by the Corporation, including upon the conversion of such shares into Common Stock, shall be retired and canceled promptly after reacquisition thereof and, upon compliance with the applicable requirements of Delaware law, shall have the status of authorized but unissued shares of preferred stock of the Corporation undesignated as to series and may, with any and all other authorized but unissued shares of preferred stock of the Corporation, be designated or redesignated and issued or reissued, as the case may be, as part of any series of preferred stock of the Corporation.

9.2 Book-Entry Registration

Notwithstanding any other provision of this Certificate of Designation, the Corporation shall have the right to have its Series A Preferred Stock registered in book-entry or other electronic form. In the event of such registration, to the extent permitted or required by the rules, regulations and practices of the applicable book-entry or other electronic system, or by other applicable law or regulation, the Series A Preferred Stock shall not be evidenced by physical stock certificates, and any actions required or permitted under this Certificate of Designation to be taken by the Corporation or any Holder of the Series A Preferred Stock with respect to such physical stock certificates shall, notwithstanding any other provision of this Certificate of Designation, be in compliance with this Certificate of Designation if taken in accordance with the rules, regulations and practices of the applicable book-entry or other electronic system and other applicable law or regulation.

9.3 Notices

All notices referred to in this Certificate of Designation shall, except as expressly provided herein, be deemed given in the manner and with the effect provided in the General Corporation Law of the State of Delaware.

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9.4 Transfer Restrictions

Unless the Corporation otherwise instructs the Transfer Agent, (i) all certificates representing the Restricted Securities, and all certificates issued upon division or combination of, or in substitution for, such certificates shall bear a legend substantially in the form of the Restricted Securities Legend and (ii) the Transfer Agent shall not register any attempted transfer of Restricted Securities that is not effected in compliance with the requirements set forth in the Restricted Securities Legend. Whenever the restrictions imposed by this Section 9.4 shall terminate as to any securities, the Holder thereof shall be entitled to receive from the Corporation new certificates representing such securities that do not bear the Restricted Securities Legend.

9.5 Beneficial Ownership

Upon request by the Corporation from time to time, each Initial Holder shall certify to the Corporation the number of shares of Series A Preferred Stock, if any, then beneficially owned by such Initial Holder and such Initial Holder’s Affiliates.

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EXHIBIT A

Form of Conversion Notice

Dated: [            ]

The undersigned is the holder of record of [            ]shares of the 8% Series A Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), of ITC^DeltaCom, Inc. (the “Corporation”). This Conversion Notice is provided pursuant to Section 4.1(b) of the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series A Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof (the “Certificate of Designation”). Capitalized terms not defined herein have the meanings given to such terms in the Certificate of Designation.

The undersigned hereby irrevocably elects to convert [            ]shares of Series A Preferred Stock represented by the enclosed certificate or certificates into shares of Common Stock at the Conversion Price per share of Common Stock provided by the Certificate of Designation. The undersigned requests that certificates representing such Common Stock be registered in the name or names of the Persons set forth below for the number of shares of Common Stock issuable upon conversion of the number of shares of Series A Preferred Stock set forth beside such Person’s name below:

Shares of Series A Preferred Stock Name and Address Taxpayer I.D. No./ Social Security No.

If the number of shares of Series A Preferred Stock that the undersigned is converting is fewer than all of the shares of Series A Preferred Stock represented by the enclosed certificate or certificates representing the Series A Preferred Stock converted hereby, the undersigned requests that new certificates representing the remaining shares of Series A Preferred Stock be registered in the name of the undersigned at the address set forth below:

A-1

Enclosed herewith are (1) written instruments of transfer, duly executed by the undersigned or the undersigned’s duly authorized legal representative, or in blank, and (2) transfer tax stamps or funds thereof, in each case, that are required pursuant to the Certificate of Designation.

Name:

Signature:

Address:

Telephone no.:
Facsimile no.:
Note:	The above signature should correspond exactly with the name on the face of the enclosed Series A Preferred Stock certificates

A-2

Appendix B

ITC^DELTACOM, INC.

AMENDED CERTIFICATE OF DESIGNATION OF THE POWERS,

PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND

OTHER SPECIAL RIGHTS OF 8% SERIES B CONVERTIBLE

REDEEMABLE PREFERRED STOCK AND QUALIFICATIONS,

LIMITATIONS AND RESTRICTIONS THEREOF

Pursuant to Section 242 of the

General Corporation Law of the State of Delaware

ITC^DeltaCom, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, does hereby certify as follows:

1. That by resolution of the Board of Directors of the Corporation (the “Board of Directors”) adopted on July 2, 2003, and by a Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series B Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof (this “Certificate of Designation”), filed in the office of the Secretary of State of the State of Delaware on October 6, 2003, the Corporation created, authorized and provided for the issuance of 1,200,000 shares of 8% Series B Convertible Redeemable Preferred Stock, par value $0.01 per share, of the Corporation and established the powers, preferences and relative, participating, optional and other special rights and the qualifications, limitations or restrictions thereof.

2. This Amended Certificate of Designation has been duly adopted in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

3. Pursuant to the provisions of Section 242 of the General Corporation Law of the State of Delaware, the Corporation hereby amends and restates this Certificate of Designation in its entirety to read as follows:

1. Designation

1.1 Designation; Liquidation Preference

There is hereby created out of the authorized and unissued shares of preferred stock of the Corporation a series of preferred stock designated as the 8% Series B Convertible Redeemable Preferred Stock (the “Series B Preferred Stock”). The number of shares constituting the Series B Preferred Stock shall be 1,200,000. The liquidation preference of the Series B Preferred Stock shall be $100.00 per share (the “Liquidation Preference”); provided that the Liquidation Preference shall be subject to equitable adjustment if and whenever there shall occur a stock split, combination, recapitalization, reorganization or reclassification of, or other similar event affecting, the Series B Preferred Stock.

1.2 Capitalized Terms

Certain capitalized terms used in this Certificate of Designation have the meanings assigned to them in Section 8.

2. Dividends

2.1 Payment of Preferred Dividends

(a) The Holders of shares of Series B Preferred Stock shall be entitled to receive with respect to each share of Series B Preferred Stock, when, as and if declared by the Board of Directors, out of funds legally available for the payment of dividends, dividends (the “Preferred Dividends”) in an amount equal to the greater of (x) dividends at the rate of 8% per annum (the “Annual Dividend Rate”) of the sum of the Liquidation Preference plus the amount of any Accumulated Dividends accrued with respect to such share and (y) dividends (other than dividends in Common Stock payable in connection with a stock split, reclassification or subdivision of the Common Stock) that would have accrued with respect to such share of Series B Preferred Stock during the applicable Dividend Period if the Holder of such share had converted such share into Common Stock immediately prior to the record date of any dividend declared on the Common Stock in such Dividend Period. If any dividend declared on the Common Stock and referred to in clause (y) above is in a form other than cash, the value of such dividend for purposes of this Section 2.1(a) shall be determined in good faith by the Board of Directors, whose determination, in the absence of manifest error, but subject to Section 2.1(g), shall be final and binding upon the Corporation and the Holders of the Series B Preferred Stock. Any Preferred Dividend referred to in clause (y) above shall be deemed to have accrued with respect to a share of Series B Preferred Stock as of the last day of the applicable Dividend Period. Preferred Dividends on a share of Series B Preferred Stock shall accrue and shall be cumulative whether or not declared from the date of issue of such share of Series B Preferred Stock and shall be payable quarterly in arrears on April 1, July 1, October 1 and January 1 of each year (unless, solely with respect to Preferred Dividends payable in cash, such day is not a Business Day, in which event such Preferred Dividends shall be payable on the next succeeding Business Day) (each such date being a “Dividend Payment Date” and each such quarterly period being a “Dividend Period”), commencing on the Dividend Payment Date for the Dividend Period ending on December 31, 2003. Preferred Dividends declared by the Board of Directors which are paid in shares of Series B Preferred Stock shall be deemed paid as of April 1, July 1, October 1 or January 1, as the case may be, for all purposes of this Certificate of Designation even if any such date is not a Business Day. Preferred Dividends payable on any Dividend Payment Date shall be payable to the Holders of shares of Series B Preferred Stock as they appear on the stock register of the Corporation at the close of business on the corresponding Dividend Payment Record Date. As used herein, the term “Dividend Payment Record Date”

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means, with respect to the Preferred Dividends payable on April 1, July 1, October 1 and January 1, respectively, of each year, the preceding March 15, June 15, September 15 and December 15 (unless such day is not a Business Day, in which event such Dividend Payment Record Date shall be the next succeeding Business Day), or such other date, not more than 60 days or less than ten days preceding the Dividend Payment Date, as shall be fixed as the record date by the Board of Directors.

(b) The dividend rate for Preferred Dividends payable in the amount specified in and pursuant to clause (x) of Section 2.1(a) with respect to each full Dividend Period shall be computed by dividing the Annual Dividend Rate by four. The dividend rate for such Preferred Dividends payable on the initial Dividend Payment Date after the Issue Date and with respect to any other period other than a full Dividend Period shall be computed on the basis of a 365-day year and the actual number of days elapsed in the period with respect to which such Preferred Dividends are payable; provided, however, that if the initial Dividend Period with respect to any share of Series B Preferred Stock is shorter than a full Dividend Period, the dividend rate for a Preferred Dividend payable on such share on the Dividend Payment Date for such initial Dividend Period shall be computed at a rate which shall result in a cumulative dividend on such share for such initial Dividend Period equal to the amount which would have accrued on or been payable with respect to such share if such share had been outstanding on the first day of such initial Dividend Period. Except as otherwise provided in this Certificate of Designation, the Series B Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or securities, in addition to the Preferred Dividends as provided in this Section 2.1. No interest or sum of money or other property or securities in lieu of interest shall be payable in respect of any accumulated and unpaid Preferred Dividends.

(c) Accumulated Dividends may be declared and paid on any date, without reference to any regular Dividend Payment Date or Dividend Payment Record Date, to Holders of Series B Preferred Stock as they appear on the stock register of the Corporation at the close of business on the date fixed as the record date for such payment by the Board of Directors.

(d) Any Preferred Dividend payable in the amount specified in and pursuant to clause (x) of Section 2.1(a) may be paid, in the sole discretion of the Corporation, (i) in cash, (ii) in shares of Series B Preferred Stock or (iii) in a combination of cash and shares of Series B Preferred Stock. Any Preferred Dividend payable in the amount specified in and pursuant to clause (y) of Section 2.1(a) shall be payable in the same form as the dividend referred to in such clause (y) that has been declared on the Common Stock in the applicable Dividend Period. Each share of Series B Preferred Stock issued in payment of a Preferred Dividend shall be valued, solely for purposes of determining the number of shares of Series B Preferred Stock to be issued as a Preferred Dividend, at the Liquidation Preference thereof and shall, upon issuance, be duly and validly issued, fully paid and non-assessable, free of all Liens and not subject to preemptive rights. If any such Preferred Dividend would result in the issuance of a fractional share of Series B Preferred Stock, the Corporation, in its sole discretion, may either pay such fractional share or round such fractional share up to the nearest whole share of Series B Preferred Stock. Except to

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the extent otherwise required by the NASDAQ Marketplace Rules (if applicable) or the rules, regulations, interpretations and practices of the Transfer Agent or any securities exchange on which the Common Stock is traded, or by any other applicable law or regulation, (i) fractional shares of Series B Preferred Stock issued in payment of any Preferred Dividend shall be rounded up to the nearest one-ten thousandth (.0001) of a share, and (ii) any Preferred Dividend payable in cash shall be rounded up to the nearest cent.

(e) Payment of a Preferred Dividend in shares of Series B Preferred Stock to a Holder of the Series B Preferred Stock shall be made by delivering a certificate or certificates evidencing such shares, which shall be dated as of the applicable Dividend Payment Date, to such Holder after the applicable Dividend Payment Date at such Holder’s address as it shall appear on the stock register of the Corporation at the close of business on the Dividend Payment Record Date for such Dividend Payment Date.

(f) All Preferred Dividends shall be paid pro rata to the Holders of the Series B Preferred Stock entitled thereto.

(g) The Corporation shall give prompt written notice to the Required Initial Holders of the determination of the Board of Directors with respect to the value of any dividend declared on the Common Stock referred to in clause (y) of the first sentence of Section 2.1(a) that is in a form other than cash. If the Required Initial Holders object to such determination (whether or not in manifest error) by the Board of Directors of the value of such dividend by giving the Corporation written notice of such objection within ten Business Days after their receipt of the Corporation’s written notice of such determination, and such objection is not withdrawn, the Corporation shall retain, at the Corporation’s sole cost, an Independent Appraiser to determine the value of such dividend. The determination of such Independent Appraiser with respect to the value of such dividend, or, if the Corporation is not required to retain an Independent Appraiser pursuant to this Section 2.1(g), but retains an Independent Appraiser pursuant to the Series A Certificate of Designation or the Series C Certificate of Designation to determine the value of such dividend for purposes of the Series A Certificate of Designation or the Series C Certificate of Designation, as the case may be, the determination of such other Independent Appraiser with respect to the value of such dividend, shall be final and binding upon the Corporation and the Holders of the Series B Preferred Stock. Any written notice required to be given by the Corporation or the Required Initial Holders pursuant to this Section 2.1(g) shall be given in the manner, and with the effect, provided in Section 7.5(b).

2.2 Declaration of Dividends and Distributions

(a) So long as any shares of the Series B Preferred Stock are outstanding, (i) no dividends, except as provided in Section 2.2(d) and except as described in the last sentence of this Section 2.2(a), shall be declared or paid or set apart for payment and no other distribution shall be declared or made upon any Parity Securities, nor (ii) shall any Parity Securities be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or

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made available for a sinking fund for the redemption of any Parity Securities) by the Corporation or any of its subsidiaries (except by conversion into or exchange for Parity Securities or Junior Securities), unless (x) in the case of clause (i) above, all Accumulated Dividends on the outstanding Series B Preferred Stock have been or contemporaneously are declared and paid or declared and sufficient funds or shares of Series B Preferred Stock for the payment thereof are set apart for such payment on or prior to the date of payment of such dividends or the making of such other distributions on such Parity Securities and (y) in the case of clause (ii) above, the Corporation shall contemporaneously redeem, purchase or otherwise acquire for consideration a pro rata portion of the Series B Preferred Stock then outstanding, which pro rata portion shall be calculated based on the aggregate redemption, purchase or other acquisition price which would be payable to the Holders of the Series B Preferred Stock and the holders of the class or series of Parity Securities being so redeemed, purchased or otherwise acquired to redeem the total number of shares of the Series B Preferred Stock and of each such class or series of Parity Securities then outstanding. Any redemption of Series B Preferred Stock in accordance with the immediately preceding sentence shall be deemed to be a redemption at the option of the Corporation and shall be subject to, and effected in accordance with, Sections 5.1 and 5.3. Notwithstanding the foregoing, if Accumulated Dividends are not paid in full or sufficient funds or shares of Series B Preferred Stock for the payment thereof are not set aside, as aforesaid, the Corporation may declare and pay or set aside sufficient funds or (to the extent authorized in the instrument creating the applicable Parity Securities) Parity Securities for the payment of accrued and unpaid dividends on Parity Securities for past dividend periods if and to the extent that, prior thereto or contemporaneously therewith, the Corporation shall declare and pay or set aside sufficient funds or shares of Series B Preferred Stock for the payment of Accumulated Dividends on the outstanding Series B Preferred Stock ratably in proportion to the respective dollar amounts of all Accumulated Dividends then payable on the outstanding Series B Preferred Stock and all such accrued and unpaid dividends then payable on such Parity Securities.

(b) So long as any shares of the Series B Preferred Stock are outstanding, no dividends, except as provided in Section 2.2(d), shall be declared or paid or set apart for payment and no other distribution shall be declared or made upon Junior Securities, nor shall any Junior Securities be redeemed, purchased or otherwise acquired (any such dividend, distribution, redemption, purchase or other acquisition being hereinafter referred to as a “Junior Securities Distribution”) for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any Junior Securities) by the Corporation or any of its subsidiaries (except by conversion into or exchange for Junior Securities), unless in each case (i) all Accumulated Dividends on the outstanding Series B Preferred Stock and all accrued and unpaid dividends on any outstanding Parity Securities for all past dividend periods with respect to such Parity Securities shall have been paid or sufficient funds or, as applicable, shares of Series B Preferred Stock or (to the extent authorized in the instrument creating the applicable Parity Securities) Parity Securities set aside for the payment thereof and (ii) sufficient funds or shares of Series B Preferred Stock shall have been paid or set apart for the payment of Preferred Dividends for the current Dividend Period with respect to the Series B Preferred Stock and sufficient funds or (to the extent authorized in the instrument creating the applicable Parity

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Securities) Parity Securities shall have been paid or set aside for the payment of any dividends for the current dividend period with respect to such Parity Securities; provided that no Junior Securities other than Excluded Junior Securities shall be redeemed, purchased or otherwise acquired without the prior written consent of the Required Initial Holders.

(c) No Preferred Dividends may be declared, made or paid or funds set apart for the payment of Preferred Dividends upon any outstanding share of Series B Preferred Stock with respect to any Dividend Period unless all dividends which are accrued and payable with respect to preceding dividend periods upon all outstanding Senior Securities shall have been declared and paid or sufficient funds for the payment thereof shall have been set apart for the payment of such dividends.

(d) Notwithstanding anything in this Section 2.2 or any other provision of this Certificate of Designation to the contrary, the Corporation shall have the power to (i) declare and pay dividends or make distributions on Parity Securities which are payable solely in additional Parity Securities or in Junior Securities and on Junior Securities which are payable solely in additional Junior Securities and (ii) redeem, purchase or otherwise acquire Junior Securities in exchange for Junior Securities and Parity Securities in exchange for Parity Securities or Junior Securities.

3. Ranking

3.1 Ranking

The Series B Preferred Stock shall, with respect to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation, rank as follows:

(a) senior to all classes of Common Stock and each other class of Capital Stock or series of preferred stock issued by the Corporation, which is established after the date of this Certificate of Designation, the terms of which do not expressly provide that such class or series shall rank senior to or on a parity with the Series B Preferred Stock as to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation (each such other class or series, collectively with the Common Stock, referred to as “Junior Securities”);

(b) on a parity with the Series A Preferred Stock and the Series C Preferred Stock and each class of Capital Stock (other than classes of Common Stock) or series of preferred stock issued by the Corporation, which is established after the date of this Certificate of Designation, the terms of which expressly provide that such class or series shall rank on a parity with the Series B Preferred Stock as to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation (the Series A Preferred Stock, the Series C Preferred Stock and each such other class or series collectively referred to as “Parity Securities”); and

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(c) junior to each class of Capital Stock (other than classes of Common Stock) or series of preferred stock issued by the Corporation, which is established after the date of this Certificate of Designation, the terms of which expressly provide that such class or series shall rank senior to the Series B Preferred Stock as to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation (collectively referred to as “Senior Securities”).

3.2 Reservation of Rights

Except as otherwise expressly provided in this Certificate of Designation, the Corporation shall have the right to amend the Certificate of Incorporation, file certificates of designation and otherwise authorize and issue any Junior Securities, Parity Securities or Senior Securities without restriction at any time and from time to time.

4. Conversion

4.1 Conversion Rights

(a) Each Holder of Series B Preferred Stock shall have the right, at its option, at any time and from time to time to convert, subject to the terms and provisions of this Section 4, any or all of such Holder’s shares of Series B Preferred Stock (including fractional shares) into a whole number of fully paid and non-assessable shares of Common Stock equal to the product of the number of shares of Series B Preferred Stock being so converted multiplied by the quotient of (i) the sum of (x) the Liquidation Preference plus (y) any Accumulated Dividends accrued with respect to such shares plus (z) any Current Period Dividends with respect to such shares accrued to, and not including, the Conversion Date (or such other date as is specified in Section 4.1(c)) divided by (ii) the Conversion Price then in effect, except that with respect to any share of Series B Preferred Stock which shall be called for redemption pursuant to Section 5, such conversion right shall terminate at the close of business on the Business Day immediately prior to the Redemption Date unless the Corporation shall default in making the payment due under Section 5 upon redemption of such share, in which case such right shall be exercisable at any time until the close of business on the Business Day immediately prior to the date on which such payment is made. If a Holder of Series B Preferred Stock shall exercise its conversion right pursuant to this Section 4 in connection with an underwritten offering of securities registered pursuant to the Securities Act of 1933, as amended, such Holder, at its option, may condition the conversion of the Holder’s Series B Preferred Stock upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event such Series B Preferred Stock shall not be deemed to have been converted, and the Persons entitled to receive the Common Stock upon the conversion of such Series B Preferred Stock shall not be deemed to have received such Common Stock, until immediately prior to the closing of such sale of securities. Each share of Series B Preferred Stock issued after the Issue Date, including, without limitation, each share of Series B Preferred Stock issued as a Preferred Dividend pursuant to Section 2 and each

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share of Series B Preferred Stock issued pursuant to or as provided in the Executive Employment Agreements, shall, as of the date of issuance of such share, have the same Conversion Price as each share of Series B Preferred Stock outstanding immediately prior to such issuance.

(b) The conversion right of a Holder of Series B Preferred Stock shall be exercised by the surrender of such Holder’s certificates representing shares of Series B Preferred Stock to be converted, duly endorsed in blank or accompanied by proper instruments of transfer, to the Corporation or to the Transfer Agent accompanied by a Conversion Notice.

(i) Any such conversion shall be deemed to have been consummated immediately prior to the close of business on the Conversion Date (or such other date and time as is specified in Section 4.1(a), this Section 4.1(b)(i) or Section 4.1(c)), and as of such date each Holder converting Series B Preferred Stock shall be deemed to be the Holder of record of Common Stock issuable upon conversion of such Series B Preferred Stock notwithstanding that the share register of the Corporation may then be closed or that certificates representing such Common Stock shall not then be actually delivered to such Person. Notwithstanding the foregoing, and solely for purposes of determining whether any share of Series B Preferred Stock subject to such conversion shall be deemed to be outstanding on any Dividend Payment Record Date and entitled to payment of Preferred Dividends pursuant to Section 2 on the related Dividend Payment Date, if the Corporation or the Transfer Agent receives a Conversion Notice relating to any such conversion on or after such Dividend Payment Record Date, such conversion shall be deemed solely for such purposes to have been consummated immediately prior to the close of business on such Dividend Payment Record Date.

(ii) Immediately prior to the close of business on any Conversion Date (or such other date and time as is specified in Section 4.1(a) or 4.1(c)), all rights with respect to the shares of Series B Preferred Stock so converted, including the rights, if any, to continue to accrue Preferred Dividends and receive notices, shall terminate, except the rights of Holders thereof to (A) receive certificates for the number of shares of Common Stock into which such shares of Series B Preferred Stock have been converted and (B) exercise the rights to which such Holders are entitled as Holders of Common Stock.

(iii) As promptly as reasonably practicable after the Conversion Date, the Corporation shall issue and deliver to the Holder of the shares of Series B Preferred Stock so converted a certificate or certificates representing the number of whole shares of Common Stock into which such shares of Series B Preferred Stock shall have been converted.

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(iv) All shares of Common Stock issuable upon conversion of the Series B Preferred Stock shall, upon issuance, be duly and validly issued, fully paid and non-assessable, free of all Liens and not subject to any preemptive rights.

(c) If the Conversion Date shall not be a Business Day or shall be a date of record referred to in Section 4.2(d), then such conversion right shall be deemed exercised on the next Business Day. Upon delivery of a Conversion Notice to the Corporation by a Holder of Series B Preferred Stock, the right of the Corporation to redeem the shares of Series B Preferred Stock specified in such Conversion Notice shall terminate, regardless of whether a Redemption Notice shall have been given pursuant to Section 5.3.

(d) Except as provided in Sections 4.1(a), 4.2 and 4.3, the Corporation shall make no adjustment or payment for, or have any other obligation with respect to, any Accumulated Dividends or Current Period Dividends accrued with respect to shares of Series B Preferred Stock in connection with or following the conversion of such shares.

(e) In the case of any conversion of fewer than all the shares of Series B Preferred Stock evidenced by a certificate, the Corporation, upon such conversion, shall execute and the Transfer Agent shall authenticate and deliver to the Holder thereof at such address designated by such Holder, at the expense of the Corporation, a new certificate or certificates representing the number of unconverted shares of Series B Preferred Stock. No fractional shares of Common Stock shall be issued upon the conversion of the Series B Preferred Stock. If the conversion of any shares of Series B Preferred Stock would result in the issuance of a fractional share of Common Stock, the Corporation, in its sole discretion, may (i) round such fractional share up to the nearest whole share of Common Stock or (ii) in lieu thereof pay a cash adjustment in respect of such fractional share in an amount equal to such fractional share multiplied by the Closing Price per share of Common Stock on the Business Day next preceding the Conversion Date.

4.2 Adjustment of Conversion Price

In order to prevent dilution of the conversion rights granted under this Section 4, the Conversion Price shall be subject to adjustment from time to time pursuant to this Section 4.2. In the event that any adjustment of the Conversion Price as required herein results in a fraction of a cent, such Conversion Price shall be rounded up to the nearest cent.

(a) Except as otherwise provided in Section 4.2(c), if and whenever during the period beginning on the Issue Date and ending at the close of business on the second anniversary of the Issue Date the Corporation issues or sells, or in accordance with Section 4.2(b) is deemed to have issued or sold, any shares of Common Stock for no consideration or for a consideration per share (calculated as set forth in Section 4.2(b)) less than the Conversion Price in effect on the date of issuance or sale (or deemed issuance or sale) of such Common Stock (a “Dilutive Issuance”), then immediately upon such Dilutive Issuance, the Conversion Price shall be

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reduced to a price determined by multiplying the Conversion Price in effect immediately prior to such Dilutive Issuance by a fraction, (A) the numerator of which is an amount equal to the sum of (x) the total number of shares of Common Stock Deemed Outstanding immediately prior to such Dilutive Issuance plus (y) the quotient of the aggregate consideration, calculated as set forth in Section 4.2(b), received or receivable by the Corporation upon such Dilutive Issuance divided by the Conversion Price in effect immediately prior to such Dilutive Issuance, and (B) the denominator of which is the total number of shares of Common Stock Deemed Outstanding immediately after such Dilutive Issuance.

(b) For purposes of determining the adjusted Conversion Price pursuant to Section 4.1(a), the following provisions shall be applicable:

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

(ii) If the Corporation in any manner issues or sells any Convertible Securities, whether or not immediately convertible (other than where such Convertible Securities are issuable upon the exercise of Options for which an adjustment of the Conversion Price is made pursuant to Section 4.2(b)(i)) and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price in effect on the date of issuance of such Convertible Securities, then the maximum

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total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities shall, as of the date of the issuance of such Convertible Securities, be deemed to be outstanding and to have been issued and sold by the Corporation for such price per share. For the purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (x) the total amount, if any, received or receivable by the Corporation as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (y) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment of the Conversion Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities, and if any such issuance or sale of such Convertible Securities is made upon exercise of any Options for which adjustments of the Conversion Price had been or are to be made pursuant to other provisions of this Section 4.2, no further adjustment of the Conversion Price shall be made by reason of such issuance or sale.

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

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

(v) If any Common Stock, Options or Convertible Securities are issued, granted or sold for cash, the consideration received therefor for purposes of this

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Section 4.2 shall be the amount received by the Corporation therefor before deduction of commissions, underwriting discounts or allowances or other expenses paid or incurred by the Corporation in connection with such issuance, grant or sale. In case any Common Stock, Options or Convertible Securities are issued or sold for a consideration part or all of which shall be other than cash, the amount of the consideration other than cash received by the Corporation shall be the fair value of such consideration. If any Common Stock, Options or Convertible Securities are issued in connection with any acquisition, merger or consolidation in which the Corporation is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity which is attributable to such Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash shall be determined in good faith by the Board of Directors, whose determination, in the absence of manifest error, but subject to the following provisions of this Section 4.2(b)(v), shall be final and binding upon the Corporation and the Holders of the Series B Preferred Stock. The Corporation shall give prompt written notice to the Required Initial Holders of the determination of the Board of Directors with respect to the fair value of such consideration other than cash. If the Required Initial Holders object to such determination (whether or not in manifest error) by the Board of Directors of the fair value of such consideration by giving the Corporation written notice of such objection within ten Business Days after their receipt of the Corporation’s written notice of such determination, and such objection is not withdrawn, the Corporation shall retain, at the Corporation’s sole cost, an Independent Appraiser to determine the fair value of such consideration. The determination of such Independent Appraiser with respect to the fair value of such consideration, or, if the Corporation is not required to retain an Independent Appraiser pursuant to this Section 4.2(b)(v), but retains an Independent Appraiser pursuant to the Series A Certificate of Designation, the Series C Certificate of Designation or any Warrant Agreement to determine the fair value of such consideration for purposes of the Series A Certificate of Designation, the Series C Certificate of Designation or such Warrant Agreement, as the case may be, the determination of such other Independent Appraiser with respect to the fair value of such consideration shall be final and binding upon the Corporation and the Holders of the Series B Preferred Stock. Any written notice required to be given by the Corporation or the Required Initial Holders pursuant to this Section 4.2(b)(v) shall be given in the manner, and with the effect, provided in Section 7.5(b).

(c) No adjustment of the Conversion Price shall be made pursuant to Section 4.2(a) or 4.2(b) upon the issuance, sale, grant, exercise, conversion, exchange, reclassification, redemption or other retirement of any of the following securities on or after the Issue Date:

(i) the Merger Common Stock;

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(ii) the Series B Preferred Stock, including the Series B Preferred Stock issuable as Preferred Dividends pursuant to Section 2 or otherwise issuable after the Issue Date, issuable pursuant to this Certificate of Designation, or any shares of Common Stock or other securities issuable or payable upon conversion of the Series B Preferred Stock;

(iii) any shares of Common Stock, Options or Convertible Securities issuable as a dividend or distribution on the Series B Preferred Stock in accordance with this Certificate of Designation or any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities;

(iv) the Warrants or any shares of Common Stock or Series C Preferred Stock or other securities issuable or payable upon exercise or conversion of the Warrants;

(v) the Series A Preferred Stock, including the Series A Preferred Stock issuable as dividends on the Series A Preferred Stock or otherwise issuable after the Issue Date, issuable pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Amendment Date, or any shares of Common Stock or other securities issuable or payable upon conversion of the Series A Preferred Stock pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Amendment Date;

(vi) any shares of Common Stock, Options or Convertible Securities issuable as a dividend or distribution on the Series A Preferred Stock in accordance with the Series A Certificate of Designation as in effect on or prior to the Certificate Amendment Date, or any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities;

(vii) the Series C Preferred Stock, including the Series C Preferred Stock issuable as dividends on the Series C Preferred Stock or otherwise issuable after the Issue Date, issuable pursuant to the Series C Certificate of Designation, or any shares of Common Stock or other securities issuable or payable upon conversion of the Series C Preferred Stock pursuant to the Series C Certificate of Designation;

(viii) any shares of Common Stock, Options or Convertible Securities issuable as a dividend or distribution on the Series C Preferred Stock in accordance with the Series C Certificate of Designation, or any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities;

(ix) any shares of Common Stock, Options or Convertible Securities issuable under (A) the Existing Benefit Plan as in effect on the Certificate Amendment Date or (B) the Existing Benefit Plan as amended after the Certificate Amendment Date

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and any Benefit Plan which becomes effective after the Certificate Amendment Date, provided that any such amendment to the Existing Benefit Plan or the effectiveness of any such Benefit Plan is approved by the Board of Directors or by the compensation committee or other authorized committee of the Board of Directors (in either case with the affirmative vote or consent of the Initial Series B Directors or any directors who are thereafter elected by the Holders of the Series B Preferred Stock or appointed to the Board of Directors pursuant to Section 7.2, in each case whether or not serving on any such committee, for so long as such directors are so elected or appointed), or any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities;

(x) any shares of Common Stock issued or deemed to have been issued in a transaction for which an adjustment of the Conversion Price is required pursuant to Section 4.2(d);

(xi) any shares of Common Stock, Options or Convertible Securities issued in connection with the acquisition of all or part of another business or company, whether by merger, consolidation or otherwise, which is approved by the Board of Directors or by an authorized committee of the Board of Directors (in either case with the affirmative vote or consent of the Initial Series B Directors or any directors who are thereafter elected by the Holders of the Series B Preferred Stock or appointed to the Board of Directors pursuant to Section 7.2, in each case whether or not serving on any such committee, for so long as such directors are so elected or appointed), any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities, or any shares of Common Stock, payment-in-kind securities or other securities issuable as a dividend or distribution on any such shares of Common Stock, Options or Convertible Securities;

(xii) any shares of Common Stock, Options or Convertible Securities issued pursuant to or as provided in the Executive Employment Agreements, or any shares of Common Stock or other securities issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities; or

(xiii) any shares of Common Stock, Options or Convertible Securities issued or deemed to have been issued in any transaction not referred to in any of subparagraphs (i) through (xii) of this Section 4.2(c), with the affirmative vote or consent of Holders of the shares of Series B Preferred Stock representing more than 50% of the voting power of the then outstanding shares of Series B Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series B Preferred Stock called for such purpose.

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(d) If a date of record should be fixed at any time, whether by the Corporation or by operation of law, for the subdivision (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) of the shares of Common Stock acquirable hereunder into a greater number of shares, or for the determination of the holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock, Convertible Securities or Options without payment of any consideration for the additional shares of Common Stock, Convertible Securities or Options (including the additional shares of Common Stock or Convertible Securities issuable upon conversion or exercise of such Options), then, as of such date of record, the Conversion Price in effect immediately prior to such date of record shall be proportionately reduced (with the number of shares of Common Stock or Convertible Securities issuable with respect to Options determined from time to time in the manner provided for deemed issuances or sales of Common Stock in Section 4.2(b)). If such subdivision of the shares of Common Stock or the payment of such dividend or distribution does not thereafter occur, the Conversion Price in effect shall be readjusted to the Conversion Price that would have been in effect if the date of record for such subdivision, dividend or distribution had never been fixed. If a date of record should be fixed at any time, whether by the Corporation or by operation of law, for the combination (by reverse stock split, recapitalization, reorganization, reclassification or otherwise) of the shares of Common Stock acquirable hereunder into a smaller number of shares of Common Stock, then, as of such date of record, the Conversion Price in effect immediately prior to such date of record shall be proportionately increased. If such combination of the shares of Common Stock does not thereafter occur, the Conversion Price then in effect shall be readjusted to the Conversion Price that would have been in effect if the date of record for such combination had never been fixed.

(e) If an adjustment of the Conversion Price pursuant to Section 4.2(a), 4.2(b) or 4.2(d) shall become effective as of the record date or after the record date for the applicable Conversion Price Adjustment Event, but before the occurrence of such Conversion Price Adjustment Event, the Corporation may elect to defer, until after the occurrence of such Conversion Price Adjustment Event, (i) issuance to the Holder of any shares of Series B Preferred Stock converted after such record date and before the occurrence of such Conversion Price Adjustment Event the additional shares of Common Stock issuable upon such conversion in excess of the number of shares issuable on the basis of the Conversion Price in effect immediately prior to such record date and (ii) payment to such Holder of any amount in cash in lieu of a fractional share of Common Stock. If the Initial Holders or any of their Affiliates shall be the beneficial and record owners of shares of Series B Preferred Stock as of the date of any such election, the Corporation shall give or cause to be given to the Initial Holders written notice of such election within five Business Days after the date of such election.

(f) After the occurrence of any Conversion Price Adjustment Event requiring adjustment of the Conversion Price, the Corporation shall give written notice thereof to the Holders of Series B Preferred Stock within ten Business Days following the occurrence of such Conversion Price Adjustment Event; provided that if an adjustment of the Conversion Price pursuant to Section 4.2(a), 4.2(b) or 4.2(d) shall become effective as of the record date or after

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the record date for such Conversion Price Adjustment Event, but before the occurrence of such Conversion Price Adjustment Event, the Corporation shall give such written notice within ten Business Days following such record date or subsequent date. Such notice shall state the Conversion Price and any change in the number of shares of Common Stock issuable upon conversion of the Series B Preferred Stock resulting from such Conversion Price Adjustment Event and shall set forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Such calculation shall be certified by an authorized officer of the Corporation. Notice of any Conversion Price Adjustment Event shall be deemed given to the Holders of Series B Preferred Stock (i) by the Corporation’s inclusion of the information specified in the second sentence of this Section 4.2(f) in the Corporation’s current report or next quarterly or annual report filed with the Securities and Exchange Commission pursuant to the Exchange Act or (ii) at the option of the Corporation, by the Corporation’s mailing to such Holders of a written notice containing such information, in each case within the period specified in the first sentence of this Section 4.2(f).

(g) Anything in Section 4.2 to the contrary notwithstanding, the Corporation shall not be required to give effect to any adjustment of the Conversion Price unless and until the net effect of one or more adjustments required hereunder (each of which shall be carried forward until counted toward adjustment), determined as provided therein, shall have resulted in a change of the Conversion Price by at least 1%, and when the cumulative net effect of more than one adjustment so determined shall be to change the Conversion Price by at least 1%, such change of the Conversion Price shall thereupon be given effect.

4.3 Fundamental Changes

Upon the occurrence of a Fundamental Change, there shall be no adjustment of the Conversion Price and each share of Series B Preferred Stock then outstanding, without the consent of any Holder of Series B Preferred Stock (except as set forth in the last sentence of this Section 4.3), and subject to the Corporation’s optional redemption rights pursuant to Section 5.1(b), shall become convertible only into the kind and amount of shares of Capital Stock or other securities (of the Corporation or another issuer), cash or other property receivable upon such Fundamental Change by a Holder of the number of shares of Common Stock into which such share of Series B Preferred Stock could have been converted immediately prior to the effective date of such Fundamental Change assuming such Holder of Common Stock (x) is not a Person (or a Related Entity of a Person) with which the Corporation consolidated, into which the Corporation merged or which merged into the Corporation, or to or with which the applicable sale, conveyance, lease, exchange, transfer or other transaction constituting such Fundamental Change was effected, and (y) failed to exercise the Holder’s rights of election, if any, as to the kind of amount of Capital Stock or other securities, cash or other property receivable upon such Fundamental Change. In any such event, effective provisions shall be made in the certificate or articles of incorporation of the resulting or surviving corporation, in any contract of sale, conveyance, lease, exchange or transfer, or otherwise so that any resulting or surviving corporation or any Transferee in connection with such Fundamental Change shall expressly

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assume the obligation to deliver, to the Holders of the Series B Preferred Stock, such shares of Capital Stock or other securities, cash or other property (i) upon conversion of the Series B Preferred Stock, if the Series B Preferred Stock shall remain outstanding following such Fundamental Change, or (ii) upon the consummation of such Fundamental Change or thereafter as provided in such effective provisions, if the Series B Preferred Stock shall not remain outstanding following such Fundamental Change. The provisions of this Section 4.3 similarly shall apply to successive Fundamental Changes. The provisions of this Section 4.3 shall be the sole right of Holders of Series B Preferred Stock in connection with any Fundamental Change, and such Holders shall have (i) no separate right to consent with respect to, and shall have no separate vote on, such Fundamental Change (except as expressly required by applicable law) and (ii) no other vote on such Fundamental Change (except as provided in Section 7.1).

4.4 Reservation of Common Stock

The Corporation at all times shall reserve and keep available for issuance upon the conversion of the Series B Preferred Stock such number of its authorized but unissued shares of Common Stock as shall from time to time be sufficient to permit the conversion of all outstanding shares of Series B Preferred Stock, and shall take all action required to increase the authorized number of shares of Common Stock if at any time there shall be insufficient authorized unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series B Preferred Stock.

4.5 Taxes and Other Charges

The issuance or delivery of certificates for Common Stock upon the conversion of shares of Series B Preferred Stock shall be made without charge to the converting Holder of shares of Series B Preferred Stock for such certificates or for any tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the respective names of, or in such names as may be directed by, the Holders of the shares of Series B Preferred Stock converted; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the Holder of the shares of Series B Preferred Stock converted, and the Corporation shall not be required to issue or deliver such certificate unless or until the Person or Persons requesting the issuance or delivery thereof shall have paid to the Corporation the amount of such tax or shall have established to the reasonable satisfaction of the Corporation that such tax has been paid.

5. Redemption of Series B Preferred Stock

5.1 Redemption at Option of the Corporation

(a) Except as provided in Section 5.1(b), shares of the Series B Preferred Stock may not be redeemed by the Corporation prior to the third anniversary of the Issue Date. On or after the third anniversary of the Issue Date, the Series B Preferred Stock may be

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redeemed for cash by the Corporation, at its option, at any time and from time to time, in whole or in part, at a redemption price per share (the “Optional Redemption Price”) equal to the sum of (x) the Liquidation Preference per share, (y) any Accumulated Dividends accrued with respect to such share and (z) any Current Period Dividends with respect to such share accrued to, but not including, the Redemption Date, without interest; provided that the Corporation shall not exercise its redemption rights pursuant to this Section 5.1(a) for a number of shares of Series B Preferred Stock having an aggregate Redemption Price of less than $5 million unless the aggregate Redemption Price of all shares of Series B Preferred Stock then outstanding is less than $5 million.

(b) If a Fundamental Change occurs at any time prior to the third anniversary of the Issue Date, the Series B Preferred Stock may be redeemed for cash by the Corporation, at its option, at any time (including concurrently with the occurrence of such Fundamental Change) and from time to time, in whole or in part, at a redemption price per share (the “Fundamental Change Redemption Price”) equal to 110% of the sum of (x) the Liquidation Preference per share, (y) any Accumulated Dividends accrued with respect to such share and (z) any Current Period Dividends with respect to such share accrued to, but not including, the Redemption Date, without interest; provided that the Corporation shall not exercise its redemption rights pursuant to this Section 5.1(b) for a number of shares of Series B Preferred Stock having an aggregate Redemption Price of less than $5 million unless the aggregate Redemption Price of all shares of Series B Preferred Stock then outstanding is less than $5 million.

(c) If fewer than all the outstanding shares of the Series B Preferred Stock shall be redeemed pursuant to Section 5.1(a) or 5.1(b), the number of shares to be redeemed shall be determined by the Board of Directors, consistent with the provisions of Section 5.1(a) or 5.1(b), and the shares to be redeemed shall be selected on a pro rata basis (with any fractional shares being rounded up to the nearest whole share). Notwithstanding the foregoing, consistent with the provisions of Section 5.1(a) or 5.1(b), the Corporation may redeem all, none or any amount greater or less than the pro rata portion of shares held by any Holder of fewer than 100 shares of Series B Preferred Stock as may be determined by the Board of Directors.

(d) Notwithstanding anything in this Section 5.1 to the contrary, for so long as the Initial Holders and their Affiliates are the beneficial and record owners of at least 50% of the shares of Series B Preferred Stock then outstanding, the Corporation shall not redeem or exercise its rights to redeem any shares of Series B Preferred Stock pursuant to this Section 5.1 without the prior written consent of the Initial Holders and their Affiliates owning beneficially and of record at least 50% of the shares of Series B Preferred Stock then outstanding unless the Corporation concurrently redeems, purchases or otherwise acquires a pro rata portion of each other class or series of Parity Securities outstanding at such time, which pro rata portion shall be calculated based on the aggregate redemption, purchase or other acquisition price which would be payable to the Holders of the Series B Preferred Stock and the holders of each such class or series of Parity Securities to redeem the total number of shares of the Series B Preferred Stock and each such class or series of Parity Securities then outstanding.

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5.2 Mandatory Redemption

(a) Subject to the second sentence of this Section 5.2(a), the Corporation shall redeem for cash all outstanding shares of Series B Preferred Stock, if any, on October 29, 2012, at a redemption price per share (the “Mandatory Redemption Price”) equal to the sum of (x) the Liquidation Preference per share, (y) any Accumulated Dividends accrued with respect to such share and (z) any Current Period Dividends with respect to such share accrued to, but not including, the Redemption Date, without interest. Notwithstanding anything in this Section 5.2. to the contrary, for so long as the Initial Holders and their Affiliates are the beneficial and record owners of at least 50% of the shares of Series B Preferred Stock then outstanding, the Corporation shall not redeem any shares of Series B Preferred Stock pursuant to this Section 5.2 without the prior written consent of the Initial Holders and their Affiliates owning beneficially and of record at least 50% of the shares of Series B Preferred Stock then outstanding unless the Corporation concurrently redeems, purchases or otherwise acquires a pro rata portion of each other class or series of Parity Securities outstanding at such time, which pro rata portion shall be calculated based on the aggregate redemption, purchase or other acquisition price which would be payable to the Holders of the Series B Preferred Stock and the holders of each such class or series of Parity Securities to redeem the total number of shares of the Series B Preferred Stock and each such class or series of Parity Securities then outstanding.

(b) If the funds of the Corporation legally available for redemption of shares on the Redemption Date are insufficient to redeem on such date all outstanding shares of the Series A Preferred Stock pursuant to the Series A Certificate of Designation, the Series B Preferred Stock pursuant to this Section 5.2 and the Series C Preferred Stock pursuant to the Series C Certificate of Designation, the Corporation shall use those funds that are legally available therefor to redeem the maximum possible number of such shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock ratably among the Holders of such shares such that each Holder of Series A Preferred Stock, each Holder of Series B Preferred Stock and each Holder of Series C Preferred Stock shall be entitled to receive such Holder’s pro rata share of such legally available funds based on the aggregate redemption price which would be payable to the Holders of the Series A Preferred Stock pursuant to the Series A Certificate of Designation, to the Holders of the Series B Preferred Stock pursuant to this Section 5.2 and to the Holders of the Series C Preferred Stock pursuant to the Series C Certificate of Designation to redeem the total number of shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock then outstanding. The shares of Series B Preferred Stock not redeemed shall remain outstanding and entitled to all the rights and preferences provided in this Certificate of Designation. At any time and from time to time after October 29, 2012 when additional funds of the Corporation are legally available for the redemption of shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, the Corporation shall promptly use such funds to redeem the balance of the shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, on a pro rata basis as aforesaid, that the Corporation is obligated to redeem pursuant to the Series A Certificate of Designation, this Section 5.2 or the Series C Certificate of Designation, as the case may be, but that it has not redeemed. If and for so long as

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any mandatory redemption obligation with respect to shares of Series B Preferred Stock under this Section 5.2 has not been discharged, the Corporation shall not, and shall cause its subsidiaries not to, (i) redeem, purchase or otherwise acquire for any consideration any Parity Securities or discharge any mandatory or optional redemption, sinking fund or other similar obligation in respect of any Parity Securities, except as provided in this Section 5.2(b), or (ii) declare or make any Junior Securities Distribution (including, without limitation, any redemption, purchase or other acquisition of any Junior Securities for any consideration) or discharge any mandatory or optional redemption, sinking fund or other similar obligation in respect of any Junior Securities.

5.3 Redemption Procedures

(a) If the Corporation shall redeem shares of the Series B Preferred Stock pursuant to Section 5.1 or 5.2:

(i) In the case of a redemption pursuant to Section 5.1(a) or 5.2(a), the Corporation shall send a Redemption Notice to the Holders of Series B Preferred Stock not less than 30 days nor more than 60 days prior to the Redemption Date, and in the case of a redemption pursuant to Section 5.1(b) in connection with a Fundamental Change, not less than 15 days prior to such Fundamental Change. Neither the failure to give a Redemption Notice nor any defect therein shall affect the validity of the giving of notice for the redemption of any share of Series B Preferred Stock to be redeemed, except as to any Holder to whom the Corporation has failed to give such Redemption Notice or except as to any Holder whose Redemption Notice was materially defective.

(ii) On or before any Redemption Date, each Holder of shares of Series B Preferred Stock to be redeemed shall surrender the certificate or certificates representing such shares of Series B Preferred Stock (properly endorsed or assigned, or transferred, if the Corporation shall so require and the Redemption Notice shall so state) to the Corporation or the Redemption Agent (if appointed) in the manner and at the place designated in the Redemption Notice.

(iii) On the Redemption Date, the Corporation or the Redemption Agent, as applicable, shall pay the full Redemption Price in cash to the Holder whose name appears on such certificate or certificates as the owner thereof.

(iv) The shares of Series B Preferred Stock represented by each certificate to be surrendered shall no longer be deemed outstanding and shall be automatically (and without any further action of the Corporation or the Holder) canceled as of the Redemption Date (unless the Corporation shall be in default of the payment of the Redemption Price) whether or not certificates for such shares are returned to the Corporation, and shall be retired as provided in Section 9.1.

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(v) If fewer than all the shares of Series B Preferred Stock represented by any certificate are to be redeemed, a new certificate shall be issued representing the unredeemed shares, without cost to the Holder thereof. Upon such redemption, the Corporation shall execute and the Transfer Agent shall authenticate and deliver such new certificate to the Holder thereof at such address designated by such Holder. If any unredeemed share would be a fractional share, the Corporation, in its sole discretion, may either issue such fractional share to such Holder or in lieu thereof pay to such Holder a cash adjustment for such fractional share based on the Redemption Price.

(b) If a Redemption Notice shall have been given as provided in Section 5.3(a), and except as otherwise expressly provided in this Certificate of Designation, all rights (excluding the right to receive the Redemption Price) of the Holders of shares of Series B Preferred Stock so called for redemption shall cease either (i) from and after the Redemption Date (unless the Corporation shall default in the payment of the Redemption Price, in which case such rights shall not terminate at the Redemption Date) or (ii) if the Corporation shall so elect and state in the Redemption Notice, from and after the time and date (which date shall be the Redemption Date or an earlier date not less than 15 days after the date of mailing of the Redemption Notice) on which the Corporation shall irrevocably deposit in trust for the Holders of the shares to be redeemed with a designated Redemption Agent as paying agent funds in an amount sufficient to pay the Redemption Price at the office of such paying agent on the Redemption Date. Any funds so deposited with such Redemption Agent that shall not be required for such redemption shall be returned to the Corporation forthwith. Subject to applicable escheat laws, any funds so set aside by the Corporation and unclaimed at the end of one year after the Redemption Date shall revert to the general funds of the Corporation, after which reversion the Holders of the shares of Series B Preferred Stock so called for redemption shall look only to the general funds of the Corporation for the payment of the Redemption Price, without interest. Any interest accrued on funds held by the Redemption Agent shall be paid to the Corporation from time to time.

(c) Except as provided in Sections 5.1(a), 5.1(b) and 5.2(a), the Corporation shall make no adjustment or payment for, or have any other obligation with respect to, any Accumulated Dividends or Current Period Dividends accrued with respect to shares of Series B Preferred Stock in connection with or following the redemption of such shares.

(d) No shares of Series B Preferred Stock may be redeemed by the Corporation except with funds legally available for the payment of the Redemption Price.

(e) As provided in Section 4.1(a), and notwithstanding anything in this Certificate of Designation to the contrary, each Holder of shares of Series B Preferred Stock which shall be called for redemption pursuant to this Section 5 shall have the right, which shall be exercisable at any time up to the close of business on the Business Day immediately prior to the Redemption Date, to convert all or any portion of such shares into shares of Common Stock pursuant to Section 4, unless the Corporation shall default in making the payment due under this

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Section 5 upon redemption of such shares, in which case such right shall be exercisable at any time until the close of business on the Business Day immediately prior to the date on which such payment is made.

6. Liquidation Preference

6.1 Liquidation Preference

Upon the occurrence of any Liquidation Event, after payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of Senior Securities, and before any payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of Junior Securities, the Holders of the Series B Preferred Stock shall be entitled to receive an amount per share of Series B Preferred Stock in cash equal to the greater of (x) the sum of (A) the Liquidation Preference per share, (B) any Accumulated Dividends accrued with respect to such share and (C) any Current Period Dividends with respect to such share accrued to, but not including, the date of such Liquidation Event or (y) the aggregate amount that would have been received with respect to the shares of Common Stock such Holders would have received, assuming the shares of Series B Preferred Stock had been converted into Common Stock pursuant to Section 4 immediately prior to the date of such Liquidation Event.

6.2 Distribution on Parity Securities

If, upon any Liquidation Event, the amounts payable with respect to the Series B Preferred Stock pursuant to Section 6.1 and such amounts payable on all other Parity Securities are not paid in full, the Holders of the Series B Preferred Stock and the holders of such Parity Securities shall share pro rata in the assets of the Corporation available for distribution in proportion to the full distribution thereof to which each is entitled.

6.3 Distribution of Remaining Assets

After payment of the full amount to which Holders of the Series B Preferred Stock are entitled pursuant to Section 6.1 upon any Liquidation Event, Holders of the Series B Preferred Stock shall have no right or claim to any of the remaining assets of the Corporation.

6.4 Effect of Certain Transactions

Neither the sale, conveyance, lease, exchange or transfer of all or substantially all of the assets of the Corporation (for Capital Stock or other securities, cash or other consideration) nor the consolidation or merger of the Corporation with or into one or more entities shall be deemed to be a Liquidation Event for purposes of this Certificate of Designation.

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7. Voting Rights

7.1 “As Converted” Voting Rights

The voting rights and related notice rights of Holders of the Series B Preferred Stock set forth in this Section 7.1 are subject to, and qualified to the extent provided by, Section 7.2, applicable law or regulation, and the NASDAQ Marketplace Rules (if applicable) or the rules, regulations, interpretations and practices of any securities exchange on which the Common Stock is traded, as determined by the Board of Directors. The Holders of the Series B Preferred Stock shall be entitled to vote on all matters on which the Holders of Common Stock shall be entitled to vote, in the same manner and with the same effect as the Holders of Common Stock, voting together with the Holders of Common Stock as a single class. For this purpose, the Holders of the Series B Preferred Stock shall be given notice of any meeting of stockholders of which the Holders of Common Stock are given notice in accordance with the bylaws of the Corporation. With respect to any matter on which the Holders of the Series B Preferred Stock shall be entitled to vote together with the Holders of Common Stock as a single class as provided in this Section 7.1, each Holder of the Series B Preferred Stock shall have a number of votes per share of the Series B Preferred Stock held of record by such Holder (on the record date for the meeting of stockholders, if such matter is subject to a vote at a meeting of stockholders, or on the effective date of any consent, if such matter is subject to a consent of the stockholders without a meeting of stockholders), equal to the number of shares of Common Stock into which such share of Series B Preferred Stock is convertible pursuant to Section 4 immediately after the close of business on such record date or effective date, as the case may be.

7.2 Election of Directors

(a) From the Issue Date until the first record date for determining stockholders entitled to vote upon or consent to the election of directors to the Board of Directors on which less than 66 ²/3% of the shares of Series B Preferred Stock issued by the Corporation (whether issued by the Corporation pursuant to the Merger Agreement or issued as a Preferred Dividend or otherwise and subject to adjustment to reflect any subdivision or combination of the Corporation’s outstanding Capital Stock) remain outstanding, the Holders of the Series B Preferred Stock, voting as a separate class, exclusive of all other stockholders, shall be entitled to elect two directors to serve on the Board of Directors. From the first record date for determining stockholders entitled to vote upon or consent to the election of directors to the Board of Directors on which less than 66 ²/3%, but more than 33 ¹/3%, of the shares of Series B Preferred Stock issued by the Corporation (whether issued by the Corporation pursuant to the Merger Agreement or issued as a Preferred Dividend and subject to adjustment to reflect any subdivision or combination of the Corporation’s outstanding Capital Stock) remain outstanding, the Holders of the Series B Preferred Stock, voting as a separate class, exclusive of all other stockholders, shall be entitled to elect one director to serve on the Board of Directors. From and after the first record date for determining stockholders entitled to vote upon or consent to the election of directors to the Board of Directors on which 33 ¹/3% or fewer shares of Series B Preferred Stock issued by the

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Corporation (whether sold by the Corporation or issued as a Preferred Dividend and subject to adjustment to reflect any subdivision or combination of the Corporation’s outstanding Capital Stock) remain outstanding (the “Single Class Voting Date”), the Holders of the Series B Preferred Stock shall be entitled to vote on the election of directors, in the same manner and with the same effect as the Holders of Common Stock, voting together with the Holders of Common Stock as a single class in the manner provided in Section 7.1. Except as provided in this Section 7.2(a), the Holders of the Series B Preferred Stock shall not be entitled to vote in the election of any directors to serve on the Board of Directors.

(b) At any meeting held prior to the Single Class Voting Date at which the stockholders of the Corporation are entitled to vote upon the election of directors, the presence in person or by proxy of the Holders of shares representing more than 50% of the voting power of the shares of Series B Preferred Stock outstanding on the record date for such meeting shall be required to constitute a quorum of such class for the election of directors by such class.

(c) Any Initial Series B Director and any director who is thereafter elected to the Board of Directors by the Holders of the Series B Preferred Stock prior to the Single Class Voting Date shall hold office until the earlier of (i) the time which is immediately after the next meeting of stockholders at which directors elected by the Holders of the Series B Preferred Stock, voting as a separate class, exclusive of all other stockholders, are elected and (ii) such time as the Holders of the Series B Preferred Stock shall no longer be entitled hereunder, voting as a separate class, exclusive of all other stockholders, to elect directors to serve on the Board of Directors, and any vacancy in respect of any Initial Series B Director or any such other director that is filled prior to the Single Class Voting Date shall be filled only by vote of the remaining Initial Series B Director or the remaining director so elected by Holders of the Series B Preferred Stock, or if there shall be no such remaining Initial Series B Director or other director, by consent of the Holders of Series B Preferred Stock, or at a special meeting of the Holders of the Series B Preferred Stock duly called, or, if no such special meeting is called, at the next annual meeting of stockholders. Except as otherwise and to the extent provided by applicable law or regulation or by the NASDAQ Marketplace Rules (if applicable) or the rules, regulations, interpretations and practices of any securities exchange on which the Common Stock is traded, in connection with any consent of Holders of Series B Preferred Stock, the consent thereby of Holders of shares representing more than 50% of the voting power of the then outstanding shares of Series B Preferred Stock shall be sufficient to approve or take action upon the matters contained therein.

(d) Prior to the Single Class Voting Date, a proper officer of the Corporation may call a special meeting of the Holders of shares of Series B Preferred Stock and, upon the written request of Holders of shares representing at least 25% of the voting power of the then outstanding shares of Series B Preferred Stock addressed and delivered to the Secretary of the Corporation, shall call a special meeting of the Holders of shares of Series B Preferred Stock or solicit a consent of such Holders. Such consent shall be sent by the Corporation to the Holders of shares of Series B Preferred Stock entitled to vote on the election of directors to the Board of

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Directors not later than 20 Business Days (or two Business Days, if the Initial Holders and their Affiliates are the beneficial and record owners of at least 50% of the shares of Series B Preferred Stock then outstanding) following such written request. Such meeting shall be held at the earliest practicable date upon the notice required for annual meetings of stockholders at the place for holding annual meetings of stockholders of the Corporation, or, if none, at a place designated by the Board of Directors. Notwithstanding the provisions of this Section 7.2(d), if the Initial Holders and their Affiliates are not the beneficial and record owners of at least 50% of the shares of Series B Preferred Stock then outstanding, no consent shall be solicited and no such special meeting shall be called during a period within the 60 days immediately preceding the date fixed for the next annual meeting of stockholders, in which such case the election of directors pursuant to Section 7.2 shall be held at such annual meeting of stockholders. The provisions of the Corporation’s bylaws regarding nominations of directors by stockholders of the Corporation shall not apply to nominations of directors by Holders of Series B Preferred Stock pursuant to this Section 7.2.

(e) Any Initial Series B Director or any director who is thereafter elected to the Board of Directors by the Holders of the Series B Preferred Stock or appointed by any Initial Series B Director or any director or directors elected by the Holders of Series B Preferred Stock, in each case prior to the Single Class Voting Date, may be removed during such director’s term of office, either with or without cause, prior to the Single Class Voting Date by the affirmative vote of Holders of shares representing more than 50% of the voting power of the then outstanding shares of Series B Preferred Stock entitled to vote, given either at a meeting of such Holders duly called for that purpose or pursuant to a consent of such Holders without a meeting, and any vacancy created by such removal that is filled prior to the Single Class Voting Date may be filled only in the manner provided in this Section 7.2.

7.3 Approval of Certain Matters

(a) So long as any shares of Series B Preferred Stock are outstanding, the Corporation shall not (i) amend, alter or repeal any provision of the Certificate of Incorporation or this Certificate of Designation to alter or change the powers, preferences or special rights of shares of Series B Preferred Stock (whether by merger, consolidation, business combination, other extraordinary corporate transaction or otherwise) so as to affect them adversely, or, (ii) other than as provided in Section 2.2(a), 4.1, 4.2, 4.3, 5 or 6.1, change the Series B Preferred Stock into any other securities, cash or other property, in the case of each of clauses (i) and (ii), without the affirmative vote or consent of Holders of the shares representing more than 50% of the voting power of the then outstanding shares of Series B Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series B Preferred Stock called for such purpose; provided that any such amendment of this Certificate of Designation that changes any dividend or other amount payable on, or the liquidation preference of, the Series B Preferred Stock shall require the affirmative vote or consent of Holders of the shares representing at least

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66 ²/3% of the voting power of the then outstanding shares of Series B Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series B Preferred Stock called for such purpose.

(b) So long as any shares of Series B Preferred Stock are outstanding, the Corporation shall not authorize or issue, or increase the authorized amount of, any Parity Securities, including any additional shares of Series B Preferred Stock (other than (i) shares of Series A Preferred Stock or other securities issuable or payable as dividends on the Series A Preferred Stock and shares of Series A Preferred Stock issuable after the Issue Date pursuant to or as provided in the Executive Employment Agreements or in connection with a stock split or similar transaction, in each case pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Amendment Date, (ii) shares of Series B Preferred Stock or other securities issuable or payable as Preferred Dividends on the Series B Preferred Stock and shares of Series B Preferred Stock issuable after the Issue Date pursuant to or as provided in the Merger Agreement and the Executive Employment Agreements or in connection with a stock split or similar transaction, in each case pursuant to this Certificate of Designation, and (iii) shares of Series C Preferred Stock issuable after the Issue Date upon the exercise or conversion of the Series D Warrants or in connection with a stock split or similar transaction and shares of Series C Preferred Stock issuable or payable as dividends on the Series C Preferred Stock, in each case pursuant to the Series C Certificate of Designation), or any Senior Securities, or any security convertible into or exchangeable for any such Parity or Senior Securities (other than the Series D Warrants), without the affirmative vote or consent of Holders of the shares representing more than 50% of the voting power of the then outstanding shares of Series B Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series B Preferred Stock called for such purpose.

(c) The consent or votes required in Sections 7.3(a) and 7.3(b) shall be in addition to any consent or approval of Holders of the Series B Preferred Stock which may be required by law or pursuant to any provision of the Certificate of Incorporation.

7.4 Other Voting Rights

In exercising the voting rights set forth in this Section 7, each share of Series B Preferred Stock shall have one vote per share except as otherwise expressly provided for in this Certificate of Designation. Except as otherwise required by applicable law or as set forth in this Certificate of Designation, the shares of Series B Preferred Stock shall not have any relative, participating, optional or other special voting rights and powers, and the vote or consent of the holders of the Series B Preferred Stock shall not be required for the taking of any corporate action.

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7.5 Notices; Notices of Record Date

(a) So long as the Initial Holders and their Affiliates are the beneficial and record owners of at least 50% of the shares of Series B Preferred Stock then outstanding, in the event of:

(i) any taking by the Corporation of a record of the holders of any class of securities of the Corporation for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of Capital Stock of any class or any other securities or property, or to receive any other right, other than, in each case, (A) a regular quarterly or other periodic dividend publicly announced by the Corporation or provided for in the instrument governing such class of securities (including, without limitation, dividends payable on the Series A Preferred Stock pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Amendment Date, Preferred Dividends payable on the Series B Preferred Stock pursuant to Section 2 and dividends payable on the Series C Preferred Stock pursuant to the Series C Certificate of Designation), (B) any other issuance of Series A Preferred Stock after the Issue Date pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Amendment Date, any other issuance of Series B Preferred Stock after the Issue Date pursuant to this Certificate of Designation and any other issuance of Series C Preferred Stock after the Issue Date pursuant to the Series C Certificate of Designation or (C) a regular quarterly or other periodic payment of interest in cash or securities on, or such payment of interest effectuated by an increase in the amount of, any issue of the Corporation’s indebtedness in accordance with the instrument governing such indebtedness, or

(ii) the proposed filing of a certificate of dissolution in connection with any Liquidation Event,

then and in each such event the Corporation shall give or cause to be given to each Holder of the Series B Preferred Stock a written notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right and a description of such dividend, distribution or right or the date on which the filing of such certificate of dissolution is expected to be effected, as the case may be, and (ii) the date, if any, that is to be fixed, on which the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such event. Such notice shall be given at least 20 days prior to the date specified in such notice on which such event, action or record is to be taken or on which the filing of such certificate of dissolution is expected to be effected. Any failure by the Corporation to provide any such notice required by this Section 7.5(a) shall not affect the validity of any event, action or record required to be specified in such notice.

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(b) Without limiting the generality of Section 7.5(a), any notice required by Section 7.5(a) to be given to the Holders of shares of Series B Preferred Stock shall be deemed delivered (i) upon personal delivery to the Holder to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient and, if not, then on the next Business Day, (iii) five days after having been deposited into the U.S. mails or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All notices required by Section 7.5(a) shall be sent to each Holder at such Holder’s address appearing on the stock register of the Corporation.

7.6 Amendment of Certificate of Designation

So long as any shares of Series B Preferred Stock are outstanding and held by the Required Initial Holders, in addition to any vote required by law or the Certificate of Incorporation (including this Certificate of Designation), the affirmative vote or consent of Holders of the shares representing more than 50% of the voting power of the then outstanding shares of Series B Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series B Preferred Stock called for such purpose shall be required to amend the Series A Certificate of Designation and the Series C Certificate of Designation; provided that such vote or consent shall not be required with respect to any proposed amendment of the Series A Certificate of Designation or the Series C Certificate of Designation (any such proposed amendment, the “Proposed Amendment”) if the Corporation shall previously have complied with the following provisions of this Section 7.6 with respect to such Proposed Amendment. If shares of Series B Preferred Stock are held by the Required Initial Holders and the Board of Directors shall determine that the Corporation will not seek the affirmative vote or consent of the Holders of the Series B Preferred Stock with respect to a Proposed Amendment pursuant to this Section 7.6 prior to submitting such Proposed Amendment to the Holders of the Series A Preferred Stock or the Holders of the Series C Preferred Stock, as the case may be, for approval, the Corporation shall give written notice of such Proposed Amendment (which shall include the text thereof) to the Required Initial Holders. If, within ten Business Days after the Corporation shall have given such written notice to the Required Initial Holders, the Required Initial Holders shall give written notice to the Corporation that the Required Initial Holders seek to have this Certificate of Designation amended in a manner substantially similar to such Proposed Amendment, the Board of Directors, in addition to approving such Proposed Amendment, shall approve, declare advisable and submit to the Holders of the Series B Preferred Stock for approval such a substantially similar amendment to this Certificate of Designation. If, within the period of ten Business Days described in the immediately preceding sentence, the Required Initial Holders do not provide such written notice to the Corporation that the Required Initial Holders seek to have this Certificate of Designation so amended, or, if the Required Initial Holders do so notify the Corporation, but the Holders of the Series B Preferred Stock do not approve or consent to such a substantially similar amendment to this Certificate of Designation, the Corporation shall be deemed to have complied with this Section 7.6 with respect to such Proposed Amendment and

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the Holders of the Series B Preferred Stock shall have no right to vote upon or consent to such Proposed Amendment pursuant to this Section 7.6. Any substantially similar amendment to this Certificate of Designation approved or consented to pursuant to this Section 7.6 shall become effective as nearly as practicable concurrently with, or immediately prior to, the effectiveness of the Proposed Amendment. In no event shall the failure of the Required Initial Holders to seek to have this Certificate of Designation amended in a manner substantially similar to any Proposed Amendment affect the applicability of this Section 7.6 with respect to any subsequent Proposed Amendment. Any written notice required to be given by the Corporation or the Required Initial Holders pursuant to this Section 7.6 shall be given in the manner, and with the effect, provided in Section 7.5(b).

8. Certain Definitions

Set forth below are the meanings assigned to certain defined terms used in this Certificate of Designation.

8.1 “Accumulated Dividends,” with respect to a share of Series B Preferred Stock, on any date of determination, means all Preferred Dividends that have accrued with respect of such share pursuant to Section 2.1(a) as of the Dividend Payment Date on or immediately preceding such date of determination, but which have not been paid. The Accumulated Dividends accrued with respect to any share of Series B Preferred Stock shall be reduced by the amount of any Preferred Dividends specified above which are actually paid with respect of such share as provided in Section 2.1(c).

8.2 “Affiliate” has the same meaning as in Rule 12b-2 under the Exchange Act.

8.3 “Annual Dividend Rate” has the meaning specified in Section 2.1(a).

8.4 “Beneficial owner” or “beneficially own” has the same meaning as in Rule 13d-3 under the Exchange Act.

8.5 “Benefit Plan” means any stock option, restricted stock, stock incentive, deferred compensation, profit sharing, defined benefit or other benefit plan of the Corporation or any of its subsidiaries.

8.6 “Board of Directors” means the board of directors of the Corporation.

8.7 “Business Day” means any day other than a Saturday, a Sunday or any day on which banking institutions in The City of New York or the State of Georgia or at a place payment is to be received are authorized by law, regulation or executive order to remain closed. If a payment date is not a Business Day at a place of payment, payment may be made at that place on the next succeeding Business Day, and no interest shall accrue for the intervening period.

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8.8 “Capital Stock” means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock or partnership or membership interests, whether common or preferred.

8.9 “Certificate Amendment Date” means the date on which this Amended Certificate of Designation shall become effective under the General Corporation Law of the State of Delaware.

8.10 “Certificate of Incorporation” means the Restated Certificate of Incorporation of the Corporation, as amended from time to time.

8.11 “Closing Price” means, with respect to the Common Stock, on any date, (i) the last sales price on the NASDAQ National Market, the NASDAQ SmallCap Market or the OTC Bulletin Board or the principal securities exchange or other securities market on which the Common Stock is then traded, or (ii) if the Common Stock is so traded, but not so reported, the average of the last bid and ask prices, as those prices are reported on the NASDAQ National Market, the NASDAQ SmallCap Market or the OTC Bulletin Board or the principal securities exchange or other securities market on which the Common Stock is then traded, or (iii) if the Common Stock is not listed or authorized for trading on the NASDAQ National Market, the NASDAQ SmallCap Market or the OTC Bulletin Board or any securities exchange or comparable securities market, the average of the closing bid and ask prices as furnished by two members of the National Association of Securities Dealers, Inc. selected from time to time by the Board of Directors for that purpose. If the Common Stock is not listed and traded in any manner such that the prices and quotations referred to above are available for the period required hereunder, the Closing Price per share shall be deemed to be the fair value per share of Common Stock as determined by the Board of Directors.

8.12 “Common Stock” means the Corporation’s authorized Common Stock.

8.13 “Common Stock Deemed Outstanding” means, on any date of determination, the number of shares of Common Stock actually outstanding, plus the maximum total number of shares of Common Stock issuable as of such date of determination upon the exercise of any then outstanding Options (including, without limitation, the Warrants and any Options outstanding under the Existing Benefit Plan or any other Benefit Plan) or issuable as of such date of determination upon conversion or exchange of any then outstanding Convertible Securities (including, without limitation, the Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock), whether or not such Options or Convertible Securities are actually exercisable, convertible or exchangeable at such time, without duplication.

8.14 “Conversion Date” means the date the Corporation or the Transfer Agent receives the Conversion Notice.

8.15 “Conversion Notice” means a written notice given by a Holder of Series B Preferred Stock to the Corporation pursuant to Section 4.1(b) stating that such Holder elects to

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convert all or a portion of such Holder’s shares of Series B Preferred Stock represented by certificates delivered to the Corporation or the Transfer Agent contemporaneously with such written notice. The Conversion Notice shall be in substantially the form of Exhibit A hereto.

8.16 “Conversion Price” means $3.00 per share of Common Stock, subject to adjustment as provided in Section 4.2.

8.17 “Conversion Price Adjustment Event” means any event specified in Section 4.2 resulting in an adjustment of the Conversion Price.

8.18 “Convertible Securities” has the meaning specified in Section 4.2(b).

8.19 “Corporation” means ITC^DeltaCom, Inc., a Delaware corporation organized and existing under the General Corporation Law of the State of Delaware.

8.20 “Current Period Dividends,” with respect to a share of Series B Preferred Stock, on any date of determination, means all Preferred Dividends that have accrued with respect of such share pursuant to Section 2 since the Dividend Payment Date immediately preceding such date of determination, but which have not been paid.

8.21 “Dilutive Issuance” has the meaning specified in Section 4.2(a).

8.22 “Dividend Payment Date” has the meaning specified in Section 2.1(a).

8.23 “Dividend Payment Record Date” has the meaning specified in Section 2.1(a).

8.24 “Dividend Period” has the meaning specified in Section 2.1(a).

8.25 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

8.26 “Excluded Junior Securities” means any Junior Securities redeemed, purchased or otherwise acquired pursuant to (i) any agreement by the Corporation to pay cash in lieu of fractional shares (A) in connection with a business combination or other transaction approved by the Board of Directors, (B) pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Amendment Date, this Certificate of Designation or the Series C Certificate of Designation or (C) pursuant to any Warrant Agreement, (ii) any Benefit Plan under which, in accordance with clause (ix) of Section 4.2(c), issuances or deemed issuances of Common Stock, Options or Convertible Securities shall not result in adjustments of the Conversion Price, (iii) any transaction for which an adjustment of the Conversion Price is required pursuant to Section 4.2(d), (iv) any Executive Employment Agreement and (v) any Transaction Document or any other agreement or document to which the Corporation or any subsidiary thereof is a party on the Issue Date and which is listed on a schedule to the Merger Agreement, as any such other agreement or document is in effect on the Issue Date.

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8.27 “Executive Employment Agreements” means (i) the Employment Agreement, dated as of February 3, 2005, between the Corporation and Randall E. Curran, as amended from time to time (provided that no amendment to such Employment Agreement after the Certificate Amendment Date shall change the type or increase the amount of securities of the Corporation issuable thereunder), (ii) the Employment Agreement, dated as of February 21, 2005, between the Corporation and Richard E. Fish, Jr., as amended from time to time (provided that no amendment to such Employment Agreement after the Certificate Amendment Date shall change the type or increase of the amount of securities of the Corporation issuable thereunder), and (iii) the Employment Agreement, dated as of February 28, 2005, between the Corporation and James P. O’Brien, as amended from time to time (provided that no amendment to such Employment Agreement after the Certificate Amendment Date shall change the type or increase the amount of securities of the Corporation issuable thereunder).

8.28 “Existing Benefit Plan” means each of the ITC^DeltaCom, Inc. Amended and Restated Stock Incentive Plan and the ITC^DeltaCom, Inc. Executive Stock Incentive Plan.

8.29 “Fundamental Change” means any transaction or event, including, without limitation, any merger, consolidation, sale, conveyance, lease, exchange or transfer of assets, tender or exchange offer, reclassification (including any such reclassification in connection with a consolidation or merger in which the Corporation is the surviving corporation), capital reorganization, compulsory share exchange or liquidation, in each case in which all or substantially all outstanding shares of the Common Stock, or all or substantially all of the assets or the property of the Corporation, are converted into or exchanged for Capital Stock (of the Corporation or another issuer) or other securities, cash or other property.

8.30 “Fundamental Change Redemption Price” has the meaning specified in Section 5.1(b).

8.31 “Governance Agreement” means the Governance Agreement, dated as of October 6, 2003, as amended from time to time, among the Corporation, WCAS Capital Partners III, L.P., Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS Information Partners, L.P. and certain individual investors and trusts listed on the signature pages thereto.

8.32 “Holder” means a Person in whose name shares of Capital Stock are registered on the stock register of the Corporation.

8.33 “Independent Appraiser” means an independent investment banking firm or independent public accounting firm, in each case of nationally recognized standing in the valuation of businesses similar to the business of the Corporation.

8.34 “Initial Holder” means any Holder of shares of Series B Preferred Stock on the Issue Date.

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8.35 “Initial Series B Directors” means the two directors who are appointed to the Board of Directors pursuant to this Certificate of Designation as the Initial Series B Directors as of the Issue Date.

8.36 “Issue Date” means October 6, 2003.

8.37 “Junior Securities” has the meaning specified in Section 3.1(a).

8.38 “Junior Securities Distribution” has the meaning specified in Section 2.2(b).

8.39 “Liens” means liens and charges other than liens and charges arising under (i) any Transaction Document, (ii) any other agreement entered into between the Corporation and any Holder of the Series B Preferred Stock from time to time or (iii) any other agreement to which the Corporation is not a party.

8.40 “Liquidation Event” means a liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary.

8.41 “Liquidation Preference” has the meaning specified in Section 1.1.

8.42 “Mandatory Redemption Price” has the meaning specified in Section 5.2(a).

8.43 “Merger Agreement” means the Agreement and Plan of Merger, dated as of July 2, 2003, as amended from time to time, among the Corporation, BTI Telecom, Inc., 8DBC1 Corp., WCAS Capital Partners III, L.P., Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS Information Partners, L.P. and certain individual investors and trusts listed on the signature pages thereto.

8.44 “Merger Common Stock” means the Common Stock issued by the Corporation pursuant to the Merger Agreement.

8.45 “NASDAQ Marketplace Rules” means the rules, regulations, interpretations and practices of the National Association of Securities Dealers, Inc. and The NASDAQ Stock Market, Inc. in effect from time to time and applicable to the Corporation.

8.46 “Optional Redemption Price” has the meaning specified in Section 5.1(a).

8.47 “Options” has the meaning specified in Section 4.2(b).

8.48 “Parity Securities” has the meaning specified in Section 3.1(b).

8.49 “Person” means any individual, corporation, partnership, joint venture, association, joint-stock issuer, interest, trust or unincorporated organization (including any subdivision or ongoing business of any such entity or substantially all of the assets of any such entity, subdivision or business).

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8.50 “Preferred Dividends” has the meaning specified in Section 2.1(a).

8.51 “Proposed Amendment” has the meaning specified in Section 7.6.

8.52 “Redemption Agent” means that Person, if any, appointed by the Corporation to hold funds deposited by the Corporation in trust to pay to the Holders of shares of Series B Preferred Stock to be redeemed. Any Redemption Agent shall be (i) a national banking association or corporation organized and doing business under the laws of the United States of America or of any state or territory thereof or of the District of Columbia, authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal, state, territorial or District of Columbia authority, and having a combined capital and surplus of at least $50 million or (ii) an Affiliate of such a national banking association or corporation that customarily performs the duties of redemption agent for public securities issues.

8.53 “Redemption Date” means the date set forth in the Redemption Notice which is fixed for redemption of the shares of Series B Preferred Stock referred to therein.

8.54 “Redemption Notice” means that notice to be given by the Corporation to the Holders notifying the Holders as to the redemption, in whole or in part, of the Series B Preferred Stock pursuant to Section 5. The Redemption Notice shall include the following information:

(i) the Redemption Date and the time of day on such date;

(ii) the total number of shares of Series B Preferred Stock to be redeemed and, if fewer than all the shares held by such Holder are to be redeemed, the number of such shares to be redeemed from such Holder;

(iii) the Redemption Price;

(iv) the place or places where certificates for such shares are to be surrendered for payment of the Redemption Price;

(v) that dividends on the shares to be redeemed shall cease to accrue on such Redemption Date unless the Corporation defaults in the payment of the Redemption Price; and

(vi) the name of any bank or other financial institution, if any, performing the duties of Redemption Agent.

The Redemption Notice shall be given by first-class mail to each record Holder of the shares to be redeemed, at such Holder’s address as such address appears on the books of the Corporation.

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8.55 “Redemption Price” means each of the Optional Redemption Price, the Fundamental Change Redemption Price and the Mandatory Redemption Price, as the case may be.

8.56 “Related Entity” means, with respect to any Person, (i) if such Person is an “ultimate parent entity,” as defined in the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations promulgated thereunder, each direct or indirect subsidiary of such Person and (ii) if such Person is not an “ultimate parent entity,” as defined in such Act and such regulations, each ultimate parent entity (as so defined) of such Person and each other Person which is a direct or indirect subsidiary of any such ultimate parent entity.

8.57 “Required Initial Holders” means, as of any date of determination, WCAS Capital Partners III, L.P. and Welsh, Carson, Anderson & Stowe VIII, L.P., so long as such Initial Holders and their Affiliates are the beneficial and record owners, as of such date of determination, of a majority of the shares of Series B Preferred Stock outstanding on such date of determination.

8.58 “Restricted Securities” means (i) the shares of Series B Preferred Stock issued by the Corporation pursuant to or as provided in the Merger Agreement and the Executive Employment Agreements, (ii) the shares of Series B Preferred Stock and other securities issued by the Corporation as Preferred Dividends on the shares of Series B Preferred Stock referred to in clause (i), and (iii) the shares of Common Stock and other securities issued by the Corporation upon the conversion of the shares of Series B Preferred Stock referred to in clauses (i) and (ii).

8.59 “Restricted Securities Legend” means the following legend:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS AND ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT AND SUCH LAWS. THE SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN A TRANSACTION OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS. THE CORPORATION RESERVES THE RIGHT PRIOR TO ANY SUCH TRANSACTION TO REQUIRE AN OPINION OF COUNSEL TO THE HOLDER OF THE SECURITIES SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE WITH THE FOREGOING RESTRICTIONS.

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8.60 “Senior Securities” has the meaning specified in Section 3.1(c).

8.61 “Series A Certificate of Designation” means the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series A Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof, as amended from time to time unless otherwise specified in this Certificate of Designation.

8.62 “Series A Preferred Stock” means the 8% Series A Convertible Redeemable Preferred Stock of the Corporation authorized in the Series A Certificate of Designation.

8.63 “Series A Warrant Agreement” means the Warrant Agreement, dated as of October 29, 2002, between the Corporation and Mellon Investor Services LLC, as Warrant Agent, as amended from time to time, so long as no amendment to such Warrant Agreement after the Issue Date shall increase the number of warrants issuable pursuant thereto.

8.64 “Series B Preferred Stock” means the 8% Series B Convertible Redeemable Preferred Stock of the Corporation authorized in this Certificate of Designation.

8.65 “Series B Warrant Agreement” means the Warrant Agreement, dated as of October 6, 2003, between the Corporation and Mellon Investor Services LLC, as Warrant Agent, as amended from time to time, so long as no amendment to such Warrant Agreement after the Certificate Amendment Date shall increase the number of warrants issuable pursuant thereto.

8.66 “Series C Certificate of Designation” means the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series C Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof, as amended from time to time.

8.67 “Series C Preferred Stock” means the 8% Series C Convertible Redeemable Preferred Stock of the Corporation authorized in the Series C Certificate of Designation.

8.68 “Series C Warrant Agreement” means the Warrant Agreement, dated as of March 29, 2005, between the Corporation and Mellon Investor Services LLC, as Warrant Agent, as amended from time to time, so long as no amendment to such Warrant Agreement after the Certificate Amendment Date shall increase the number of warrants issuable pursuant thereto.

8.69 “Series D Warrant Agreement” means the Warrant Agreement, dated as of July 26, 2005, between the Corporation and Mellon Investor Services LLC, as Warrant Agent, as amended from time to time, so long as no amendment to such Warrant Agreement after the Certificate Amendment Date shall increase the number of warrants issuable pursuant thereto.

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8.70 “Series D Warrants” means the warrants to purchase Series C Preferred Stock and Common Stock issued by the Corporation pursuant to the Series D Warrant Agreement.

8.71 “Single Class Voting Date” has the meaning specified in Section 7.2(a).

8.72 “Transaction Documents” means (i) the Merger Agreement, (ii) the Series B Warrant Agreement, (iii) the Governance Agreement and (iv) the Registration Rights Agreement, dated as of October 6, 2003, as amended from time to time, among the Corporation and the securityholders of the Corporation identified therein.

8.73 “Transfer Agent” means the Person duly appointed by the Corporation in its sole discretion to serve as transfer agent for the Series B Preferred Stock. The Corporation may serve as Transfer Agent.

8.74 “Transferee” means any Person that acquires assets of the Corporation in connection with any sale, conveyance, lease, exchange or transfer of such assets by the Corporation to or with such Person.

8.75 “Warrant Agreement” means any of (i) the Series A Warrant Agreement, (ii) the Series B Warrant Agreement, (iii) the Series C Warrant Agreement or (iv) the Series D Warrant Agreement.

8.76 “Warrants” means (i) the warrants to purchase Common Stock issued by the Corporation pursuant to the Series A Warrant Agreement, (ii) the warrants to purchase Common Stock issued by the Corporation pursuant to the Series B Warrant Agreement, (iii) the warrants to purchase Common Stock issued by the Corporation pursuant to the Series C Warrant Agreement and (iv) the Series D Warrants; provided that (A) the warrants referred to in each of clauses (i) and (ii) have the same exercise expiration date and (subject to adjustments pursuant to antidilution provisions of the Series A Warrant Agreement or the Series B Warrant Agreement, as the case may be) the same exercise price as the warrants issued pursuant to the Series A Warrant Agreement or the Series B Warrant Agreement, as the case may be, which are outstanding as of the Issue Date, (B) the warrants referred to in clause (iii) have the same exercise expiration date and (subject to adjustments pursuant to antidilution provisions of the Series C Warrant Agreement) the same exercise price as the warrants issued pursuant to the Series C Warrant Agreement which are outstanding as of the Certificate Amendment Date and (C) the Series D Warrants have the same exercise expiration date and (subject to adjustments pursuant to antidilution provisions and other exercise price adjustment provisions of the Series D Warrant Agreement) the same exercise price as the Series D Warrants issued on the initial issue date of the Series D Warrants.

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9. Other Provisions

9.1 Status of Reacquired Shares

Shares of Series B Preferred Stock issued and redeemed or otherwise reacquired by the Corporation, including upon the conversion of such shares into Common Stock, shall be retired and canceled promptly after reacquisition thereof and, upon compliance with the applicable requirements of Delaware law, shall have the status of authorized but unissued shares of preferred stock of the Corporation undesignated as to series and may, with any and all other authorized but unissued shares of preferred stock of the Corporation, be designated or redesignated and issued or reissued, as the case may be, as part of any series of preferred stock of the Corporation.

9.2 Book-Entry Registration

Notwithstanding any other provision of this Certificate of Designation, the Corporation shall have the right to have its Series B Preferred Stock registered in book-entry or other electronic form. In the event of such registration, to the extent permitted or required by the rules, regulations and practices of the applicable book-entry or other electronic system, or by other applicable law or regulation, the Series B Preferred Stock shall not be evidenced by physical stock certificates, and any actions required or permitted under this Certificate of Designation to be taken by the Corporation or any Holder of the Series B Preferred Stock with respect to such physical stock certificates shall, notwithstanding any other provision of this Certificate of Designation, be in compliance with this Certificate of Designation if taken in accordance with the rules, regulations and practices of the applicable book-entry or other electronic system and other applicable law or regulation.

9.3 Notices

All notices referred to in this Certificate of Designation shall, except as expressly provided herein, be deemed given in the manner and with the effect provided in the General Corporation Law of the State of Delaware.

9.4 Transfer Restrictions

Unless the Corporation otherwise instructs the Transfer Agent, (i) all certificates representing the Restricted Securities, and all certificates issued upon division or combination of, or in substitution for, such certificates shall bear a legend substantially in the form of the Restricted Securities Legend and (ii) the Transfer Agent shall not register any attempted transfer of Restricted Securities that is not effected in compliance with the requirements set forth in the Restricted Securities Legend. Whenever the restrictions imposed by this Section 9.4 shall terminate as to any securities, the Holder thereof shall be entitled to receive from the Corporation new certificates representing such securities that do not bear the Restricted Securities Legend.

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9.5 Beneficial Ownership

Upon request by the Corporation from time to time, each Initial Holder shall certify to the Corporation the number of shares of Series B Preferred Stock, if any, then beneficially owned by such Initial Holder and such Initial Holder’s Affiliates.

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EXHIBIT A

Form of Conversion Notice

Dated: [            ]

The undersigned is the holder of record of [            ] shares of the 8% Series B Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock”), of ITC^DeltaCom, Inc. (the “Corporation”). This Conversion Notice is provided pursuant to Section 4.1(b) of the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series B Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof (the “Certificate of Designation”). Capitalized terms not defined herein have the meanings given to such terms in the Certificate of Designation.

The undersigned hereby irrevocably elects to convert [            ] shares of Series B Preferred Stock represented by the enclosed certificate or certificates into shares of Common Stock at the Conversion Price per share of Common Stock provided by the Certificate of Designation. The undersigned requests that certificates representing such Common Stock be registered in the name or names of the Persons set forth below for the number of shares of Common Stock issuable upon conversion of the number of shares of Series B Preferred Stock set forth beside such Person’s name below:

Shares of Series B Preferred Stock Name and Address Taxpayer I.D. No./ Social Security No.

If the number of shares of Series B Preferred Stock that the undersigned is converting is fewer than all of the shares of Series B Preferred Stock represented by the enclosed certificate or certificates representing the Series B Preferred Stock converted hereby, the undersigned requests that new certificates representing the remaining shares of Series B Preferred Stock be registered in the name of the undersigned at the address set forth below:

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Enclosed herewith are (1) written instruments of transfer, duly executed by the undersigned or the undersigned’s duly authorized legal representative, or in blank, and (2) transfer tax stamps or funds thereof, in each case, that are required pursuant to the Certificate of Designation.

Name:

Signature:

Address:

Telephone no.:
Facsimile no.:
Note:	The above signature should correspond exactly with the name on the face of the enclosed Series B Preferred Stock certificates

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Appendix C

ITC^DELTACOM, INC.

CERTIFICATE OF DESIGNATION OF THE POWERS,

PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND

OTHER SPECIAL RIGHTS OF 8% SERIES C CONVERTIBLE

REDEEMABLE PREFERRED STOCK AND QUALIFICATIONS,

LIMITATIONS AND RESTRICTIONS THEREOF

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

ITC^DeltaCom, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify that, pursuant to authority conferred upon the board of directors of the Corporation (the “Board of Directors”) by the Corporation’s Restated Certificate of Incorporation, and pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors is authorized to issue preferred stock of the Corporation in one or more series, and the Transaction Committee of the Board of Directors has duly approved and adopted the following resolution on July 22, 2005:

RESOLVED, that, pursuant to the authority vested in the Board of Directors by the Restated Certificate of Incorporation of the Corporation, and pursuant to Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors hereby creates, authorizes and provides for the issuance of 8% Series C Convertible Redeemable Preferred Stock, par value $0.01 per share, with a liquidation preference of $1.00 per share, consisting of 28,000,000 shares and having the powers, preferences and relative, participating, optional and other special rights and the qualifications, limitations and restrictions thereof that are set forth in the Restated Certificate of Incorporation and in this resolution as follows:

1. Designation

1.1 Designation; Liquidation Preference

There is hereby created out of the authorized and unissued shares of preferred stock of the Corporation a series of preferred stock designated as the 8% Series C Convertible Redeemable Preferred Stock (the “Series C Preferred Stock”). The number of shares constituting the Series C Preferred Stock shall be 28,000,000. The liquidation preference of the Series C Preferred Stock shall be $1.00 per share (the “Liquidation Preference”); provided that the Liquidation Preference shall be subject to equitable adjustment if and whenever there shall occur a stock split, combination, recapitalization, reorganization or reclassification of, or other similar event affecting, the Series C Preferred Stock.

1.2 Capitalized Terms

Certain capitalized terms used in this Certificate of Designation have the meanings assigned to them in Section 8.

2. Dividends

2.1 Payment of Preferred Dividends

(a) The Holders of shares of Series C Preferred Stock shall be entitled to receive with respect to each share of Series C Preferred Stock, when, as and if declared by the Board of Directors, out of funds legally available for the payment of dividends, dividends (the “Preferred Dividends”) in an amount equal to the greater of (x) dividends at the rate of 8% per annum (the “Annual Dividend Rate”) of the sum of the Liquidation Preference plus the amount of any Accumulated Dividends accrued with respect to such share and (y) dividends (other than dividends in Common Stock payable in connection with a stock split, reclassification or subdivision of the Common Stock) that would have accrued with respect to such share of Series C Preferred Stock during the applicable Dividend Period if the Holder of such share had converted such share into Common Stock immediately prior to the record date of any dividend declared on the Common Stock in such Dividend Period. If any dividend declared on the Common Stock and referred to in clause (y) above is in a form other than cash, the value of such dividend for purposes of this Section 2.1(a) shall be determined in good faith by the Board of Directors, whose determination, in the absence of manifest error, but subject to Section 2.1(g), shall be final and binding upon the Corporation and the Holders of the Series C Preferred Stock. Any Preferred Dividend referred to in clause (y) above shall be deemed to have accrued with respect to a share of Series C Preferred Stock as of the last day of the applicable Dividend Period. Preferred Dividends with respect to a share of Series C Preferred Stock shall accrue and shall be cumulative whether or not declared from the date of issue of such share of Series C Preferred Stock; provided that Preferred Dividends with respect to any share of Post-Record Date Series C Preferred Stock shall accrue and shall be cumulative whether or not declared from the first Dividend Payment Date following the date of issue of such share of Post-Record Date Series C Preferred Stock. Preferred Dividends on the Series C Preferred Stock shall be payable quarterly in arrears on April 1, July 1, October 1 and January 1 of each year (unless, solely with respect to Preferred Dividends payable in cash, such day is not a Business Day, in which event such Preferred Dividends shall be payable on the next succeeding Business Day) (each such date being a “Dividend Payment Date” and each such quarterly period being a “Dividend Period”). Preferred Dividends declared by the Board of Directors which are paid in shares of Series C Preferred Stock shall be deemed paid as of April 1, July 1, October 1 or January 1, as the case may be, for all purposes of this Certificate of Designation even if any such date is not a Business Day. Preferred Dividends payable on any Dividend Payment Date shall be payable to the Holders of shares of Series C Preferred Stock as they appear on the stock register of the Corporation at the close of business on the corresponding Dividend Payment Record Date. As used herein, the term “Dividend Payment Record Date” means, with respect to the Preferred Dividends payable on April 1, July 1,

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October 1 and January 1, respectively, of each year, the preceding March 15, June 15, September 15 and December 15 (unless such day is not a Business Day, in which event such Dividend Payment Record Date shall be the next succeeding Business Day), or such other date, not more than 60 days or less than ten days preceding the Dividend Payment Date, as shall be fixed as the record date by the Board of Directors.

(b) The dividend rate for Preferred Dividends payable in the amount specified in and pursuant to clause (x) of Section 2.1(a) with respect to each full Dividend Period shall be computed by dividing the Annual Dividend Rate by four. The dividend rate for such Preferred Dividends payable on the initial Dividend Payment Date after the Issue Date and with respect to any other period other than a full Dividend Period shall be computed on the basis of a 365-day year and the actual number of days elapsed in the period with respect to which such Preferred Dividends are payable; provided that if the initial Dividend Period with respect to any share of Series C Preferred Stock which (i) is not a share of Post-Record Date Series C Preferred Stock and (ii) is issued after the Issue Date is shorter than a full Dividend Period, the dividend rate for a Preferred Dividend payable on such share on the Dividend Payment Date for such initial Dividend Period shall be computed at a rate which shall result in a cumulative dividend on such share for such initial Dividend Period equal to the amount which would have accrued on or been payable with respect to such share if such share been outstanding on the first day of such initial Dividend Period. Except as otherwise provided in this Certificate of Designation, the Series C Preferred Stock shall not be entitled to any dividends, whether payable in cash, property or securities, in addition to the Preferred Dividends as provided in this Section 2.1. No interest or sum of money or other property or securities in lieu of interest shall be payable in respect of any accumulated and unpaid Preferred Dividends.

(c) Accumulated Dividends may be declared and paid on any date, without reference to any regular Dividend Payment Date or Dividend Payment Record Date, to Holders of Series C Preferred Stock as they appear on the stock register of the Corporation at the close of business on the date fixed as the record date for such payment by the Board of Directors.

(d) Any Preferred Dividend payable in the amount specified in and pursuant to clause (x) of Section 2.1(a) may be paid, in the sole discretion of the Corporation, (i) in cash, (ii) in shares of Series C Preferred Stock or (iii) in a combination of cash and shares of Series C Preferred Stock. Any Preferred Dividend payable in the amount specified in and pursuant to clause (y) of Section 2.1(a) shall be payable in the same form as the dividend referred to in such clause (y) that has been declared on the Common Stock in the applicable Dividend Period. Each share of Series C Preferred Stock issued in payment of a Preferred Dividend shall be valued, solely for purposes of determining the number of shares of Series C Preferred Stock to be issued as a Preferred Dividend, at the Liquidation Preference thereof and shall, upon issuance, be duly and validly issued, fully paid and non-assessable, free of all Liens and not subject to preemptive rights. If any such Preferred Dividend would result in the issuance of a fractional share of Series C Preferred Stock, the Corporation, in its sole discretion, may either pay such fractional share or round such fractional share up to the nearest whole share of Series C

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Preferred Stock. Except to the extent otherwise required by the NASDAQ Marketplace Rules (if applicable) or the rules, regulations, interpretations and practices of the Transfer Agent or any securities exchange on which the Common Stock is traded, or by any other applicable law or regulation, (i) fractional shares of Series C Preferred Stock issued in payment of any Preferred Dividend shall be rounded up to the nearest one-ten thousandth (.0001) of a share, and (ii) any Preferred Dividend payable in cash shall be rounded up to the nearest cent.

(e) Payment of a Preferred Dividend in shares of Series C Preferred Stock to a Holder of the Series C Preferred Stock shall be made by delivering a certificate or certificates evidencing such shares, which shall be dated as of the applicable Dividend Payment Date, to such Holder after the applicable Dividend Payment Date at such Holder’s address as it shall appear on the stock register of the Corporation at the close of business on the Dividend Payment Record Date for such Dividend Payment Date.

(f) All Preferred Dividends shall be paid pro rata to the Holders of the Series C Preferred Stock entitled thereto.

(g) The Corporation shall give prompt written notice to the Required Initial Holders of the determination of the Board of Directors with respect to the value of any dividend declared on the Common Stock referred to in clause (y) of the first sentence of Section 2.1(a) that is in a form other than cash. If the Required Initial Holders object to such determination (whether or not in manifest error) by the Board of Directors of the value of such dividend by giving the Corporation written notice of such objection within ten Business Days after their receipt of the Corporation’s written notice of such determination, and such objection is not withdrawn, the Corporation shall retain, at the Corporation’s sole cost, an Independent Appraiser to determine the value of such dividend. The determination of such Independent Appraiser with respect to the value of such dividend, or, if the Corporation is not required to retain an Independent Appraiser pursuant to this Section 2.1(g), but retains an Independent Appraiser pursuant to the Series A Certificate of Designation or the Series B Certificate of Designation to determine the value of such dividend for purposes of the Series A Certificate of Designation or the Series B Certificate of Designation, as the case may be, the determination of such other Independent Appraiser with respect to the value of such dividend, shall be final and binding upon the Corporation and the Holders of the Series C Preferred Stock. Any written notice required to be given by the Corporation or the Required Initial Holders pursuant to this Section 2.1(g) shall be given in the manner, and with the effect, provided in Section 7.4(b).

2.2 Declaration of Dividends and Distributions

(a) So long as any shares of the Series C Preferred Stock are outstanding, (i) no dividends, except as provided in Section 2.2(d) and except as described in the last sentence of this Section 2.2(a), shall be declared or paid or set apart for payment and no other distribution shall be declared or made upon any Parity Securities, nor (ii) shall any Parity Securities be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any Parity Securities) by

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the Corporation or any of its subsidiaries (except by conversion into or exchange for Parity Securities or Junior Securities), unless (x) in the case of clause (i) above, all Accumulated Dividends on the outstanding Series C Preferred Stock have been or contemporaneously are declared and paid or declared and sufficient funds or shares of Series C Preferred Stock for the payment thereof are set apart for such payment on or prior to the date of payment of such dividends or the making of such other distributions on such Parity Securities and (y) in the case of clause (ii) above, the Corporation shall contemporaneously redeem, purchase or otherwise acquire for consideration a pro rata portion of the Series C Preferred Stock then outstanding, which pro rata portion shall be calculated based on the aggregate redemption, purchase or other acquisition price which would be payable to the Holders of the Series C Preferred Stock and the holders of the class or series of Parity Securities being so redeemed, purchased or otherwise acquired to redeem the total number of shares of the Series C Preferred Stock and of each such class or series of Parity Securities then outstanding. Any redemption of Series C Preferred Stock in accordance with the immediately preceding sentence shall be deemed to be a redemption at the option of the Corporation and shall be subject to, and effected in accordance with, Sections 5.1 and 5.3. Notwithstanding the foregoing, if Accumulated Dividends are not paid in full or sufficient funds or shares of Series C Preferred Stock for the payment thereof are not set aside, as aforesaid, the Corporation may declare and pay or set aside sufficient funds or (to the extent authorized in the instrument creating the applicable Parity Securities) Parity Securities for the payment of accrued and unpaid dividends on Parity Securities for past dividend periods if and to the extent that, prior thereto or contemporaneously therewith, the Corporation shall declare and pay or set aside sufficient funds or shares of Series C Preferred Stock for the payment of Accumulated Dividends on the outstanding Series C Preferred Stock ratably in proportion to the respective dollar amounts of all Accumulated Dividends then payable on the outstanding Series C Preferred Stock and all such accrued and unpaid dividends then payable on such Parity Securities.

(b) So long as any shares of the Series C Preferred Stock are outstanding, no dividends, except as provided in Section 2.2(d), shall be declared or paid or set apart for payment and no other distribution shall be declared or made upon Junior Securities, nor shall any Junior Securities be redeemed, purchased or otherwise acquired (any such dividend, distribution, redemption, purchase or other acquisition being hereinafter referred to as a “Junior Securities Distribution”) for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any Junior Securities) by the Corporation or any of its subsidiaries (except by conversion into or exchange for Junior Securities), unless in each case (i) all Accumulated Dividends on the outstanding Series C Preferred Stock and all accrued and unpaid dividends on any outstanding Parity Securities for all past dividend periods with respect to such Parity Securities shall have been paid or sufficient funds or, as applicable, shares of Series C Preferred Stock or (to the extent authorized in the instrument creating the applicable Parity Securities) Parity Securities set aside for the payment thereof and (ii) sufficient funds or shares of Series C Preferred Stock shall have been paid or set apart for the payment of Preferred Dividends for the current Dividend Period with respect to the Series C Preferred Stock and sufficient funds or (to the extent authorized in the instrument creating the

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applicable Parity Securities) Parity Securities shall have been paid or set aside for the payment of any dividends for the current dividend period with respect to such Parity Securities; provided that no Junior Securities other than Excluded Junior Securities shall be redeemed, purchased or otherwise acquired without the prior written consent of the Required Initial Holders.

(c) No Preferred Dividends may be declared, made or paid or funds set apart for the payment of Preferred Dividends upon any outstanding share of Series C Preferred Stock with respect to any Dividend Period unless all dividends which are accrued and payable with respect to preceding dividend periods upon all outstanding Senior Securities shall have been declared and paid or sufficient funds for the payment thereof shall have been set apart for the payment of such dividends.

(d) Notwithstanding anything in this Section 2.2 or any other provision of this Certificate of Designation to the contrary, the Corporation shall have the power to (i) declare and pay dividends or make distributions on Parity Securities which are payable solely in additional Parity Securities or in Junior Securities and on Junior Securities which are payable solely in additional Junior Securities and (ii) redeem, purchase or otherwise acquire Junior Securities in exchange for Junior Securities and Parity Securities in exchange for Parity Securities or Junior Securities.

3. Ranking

3.1 Ranking

The Series C Preferred Stock shall, with respect to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation, rank as follows:

(a) senior to all classes of Common Stock and each other class of Capital Stock or series of preferred stock issued by the Corporation, which is established after the Certificate Date, the terms of which do not expressly provide that such class or series shall rank senior to or on a parity with the Series C Preferred Stock as to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation (each such other class or series, collectively with the Common Stock, referred to as “Junior Securities”);

(b) on a parity with the Series A Preferred Stock and the Series B Preferred Stock and each class of Capital Stock (other than classes of Common Stock) or series of preferred stock issued by the Corporation, which is established after the Certificate Date, the terms of which expressly provide that such class or series shall rank on a parity with the Series C Preferred Stock as to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation (the Series A Preferred Stock, the Series B Preferred Stock and each such other class or series collectively referred to as “Parity Securities”); and

(c) junior to each class of Capital Stock (other than classes of Common Stock) or series of preferred stock issued by the Corporation, which is established after the

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Certificate Date, the terms of which expressly provide that such class or series shall rank senior to the Series C Preferred Stock as to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation (collectively referred to as “Senior Securities”).

3.2 Reservation of Rights

Except as otherwise expressly provided in this Certificate of Designation, the Corporation shall have the right to amend the Certificate of Incorporation, file certificates of designation and otherwise authorize and issue any Junior Securities, Parity Securities or Senior Securities without restriction at any time and from time to time.

4. Conversion

4.1 Conversion Rights

(a) Each Holder of Series C Preferred Stock shall have the right, at its option, at any time and from time to time to convert, subject to the terms and provisions of this Section 4, any or all of such Holder’s shares of Series C Preferred Stock (including fractional shares) into a whole number of fully paid and non-assessable shares of Common Stock equal to the product of the Conversion Rate then in effect times the sum of (x) the number of shares of Series C Preferred Stock being so converted plus (y) the number of shares of Series C Preferred Stock then issuable in payment of any Accumulated Dividends accrued with respect to such shares being so converted plus (z) the number of shares of Series C Preferred Stock then issuable in payment of any Current Period Dividends with respect to such shares being so converted accrued to, and not including, the Conversion Date (or such other date as is specified in Section 4.1(c)), except that with respect to any share of Series C Preferred Stock which shall be called for redemption pursuant to Section 5, such conversion right shall terminate at the close of business on the Business Day immediately prior to the Redemption Date unless the Corporation shall default in making the payment due under Section 5 upon redemption of such share, in which case such right shall be exercisable at any time until the close of business on the Business Day immediately prior to the date on which such payment is made. If a Holder of Series C Preferred Stock shall exercise its conversion right pursuant to this Section 4 in connection with an underwritten offering of securities registered pursuant to the Securities Act of 1933, as amended, such Holder, at its option, may condition the conversion of the Holder’s Series C Preferred Stock upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event such Series C Preferred Stock shall not be deemed to have been converted, and the Persons entitled to receive the Common Stock upon the conversion of such Series C Preferred Stock shall not be deemed to have received such Common Stock, until immediately prior to the closing of such sale of securities. Each share of Series C Preferred Stock issued after the Issue Date, including, without limitation, each share of Series C Preferred Stock issued upon the exercise or conversion of the Series D Warrants and each share of Series C Preferred Stock issued as a Preferred Dividend pursuant to Section 2, shall, as of the date of issuance of such share, have the same Conversion Rate as each share of Series C Preferred Stock outstanding immediately prior to such issuance.

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(b) The conversion right of a Holder of Series C Preferred Stock shall be exercised by the surrender of such Holder’s certificates representing shares of Series C Preferred Stock to be converted, duly endorsed in blank or accompanied by proper instruments of transfer, to the Corporation or to the Transfer Agent accompanied by a Conversion Notice.

(i) Any such conversion shall be deemed to have been consummated immediately prior to the close of business on the Conversion Date (or such other date and time as is specified in Section 4.1(a), this Section 4.1(b)(i) or Section 4.1(c)), and as of such date each Holder converting Series C Preferred Stock shall be deemed to be the Holder of record of Common Stock issuable upon conversion of such Series C Preferred Stock notwithstanding that the share register of the Corporation may then be closed or that certificates representing such Common Stock shall not then be actually delivered to such Person. Notwithstanding the foregoing, and solely for purposes of determining whether any share of Series C Preferred Stock subject to such conversion shall be outstanding on any Dividend Payment Record Date and entitled to payment of Preferred Dividends pursuant to Section 2, if the Corporation or the Transfer Agent receives a Conversion Notice relating to any such conversion on or after any Dividend Payment Record Date but before the Dividend Payment Date to which such Dividend Payment Record Date relates, such conversion shall be deemed solely for such purposes to have been consummated immediately prior to the close of business on such Dividend Payment Record Date.

(ii) Immediately prior to the close of business on any Conversion Date (or such other date and time as is specified in Section 4.1(a) or 4.1(c)), all rights with respect to the shares of Series C Preferred Stock so converted, including the rights, if any, to continue to accrue Preferred Dividends and receive notices, shall terminate, except the rights of Holders thereof to (A) receive certificates for the number of shares of Common Stock into which such shares of Series C Preferred Stock have been converted and (B) exercise the rights to which such Holders are entitled as Holders of Common Stock.

(iii) As promptly as reasonably practicable after the Conversion Date, the Corporation shall issue and deliver to the Holder of the shares of Series C Preferred Stock so converted a certificate or certificates representing the number of whole shares of Common Stock into which such shares of Series C Preferred Stock shall have been converted.

(iv) All shares of Common Stock issuable upon conversion of the Series C Preferred Stock shall, upon issuance, be duly and validly issued, fully paid and non-assessable, free of all Liens and not subject to any preemptive rights.

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(c) If the Conversion Date shall not be a Business Day or shall be a date of record referred to in Section 4.2(d), then such conversion right shall be deemed exercised on the next Business Day. Upon delivery of a Conversion Notice to the Corporation by a Holder of Series C Preferred Stock, the right of the Corporation to redeem the shares of Series C Preferred Stock specified in such Conversion Notice shall terminate, regardless of whether a Redemption Notice shall have been given pursuant to Section 5.3.

(d) Except as provided in Sections 4.1(a), 4.2 and 4.3, the Corporation shall make no adjustment or payment for, or have any other obligation with respect to, any Accumulated Dividends or Current Period Dividends accrued with respect to shares of Series C Preferred Stock in connection with or following the conversion of such shares.

(e) In the case of any conversion of fewer than all the shares of Series C Preferred Stock evidenced by a certificate, the Corporation, upon such conversion, shall execute and the Transfer Agent shall authenticate and deliver to the Holder thereof at such address designated by such Holder, at the expense of the Corporation, a new certificate or certificates representing the number of unconverted shares of Series C Preferred Stock. No fractional shares of Common Stock shall be issued upon the conversion of the Series C Preferred Stock. If the conversion of any shares of Series C Preferred Stock would result in the issuance of a fractional share of Common Stock, the Corporation, in its sole discretion, may (i) round such fractional share up to the nearest whole share of Common Stock or (ii) in lieu thereof pay a cash adjustment in respect of such fractional share in an amount equal to such fractional share multiplied by the Closing Price per share of Common Stock on the Business Day next preceding the Conversion Date.

4.2 Adjustment of Conversion Rate

In order to prevent dilution of the conversion rights granted under this Section 4, the Conversion Rate shall be subject to adjustment from time to time pursuant to this Section 4.2.

(a) Except as otherwise provided in Section 4.2(c), if and whenever during the period beginning on the Certificate Date and ending on the close of business on the fourth anniversary of the Certificate Date, the Corporation issues or sells, or in accordance with Section 4.2(b) is deemed to have issued or sold, any shares of Common Stock for no consideration or for a consideration per share (calculated as set forth in Section 4.2(b)) less than the Trigger Price in effect on the date of issuance or sale (or deemed issuance or sale) of such Common Stock (a “Dilutive Issuance”), then in the event of any Dilutive Issuance prior to the Issue Date, as of the Issue Date for each such Dilutive Issuance, and in the event of any Dilutive Issuance from and after the Issue Date, immediately upon each such Dilutive Issuance, the Conversion Rate in effect on the date of issuance or sale (or deemed issuance or sale) of such Common Stock shall be increased by dividing such Conversion Rate by a fraction, (A) the numerator of which is the total number of shares of Common Stock Deemed Outstanding immediately before such Dilutive Issuance plus the number of shares of Common Stock that could be purchased at the Trigger Price at the time of such Dilutive Issuance for the aggregate

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consideration, calculated as set forth in Section 4.2(b), received or receivable by the Corporation upon such Dilutive Issuance and (B) the denominator of which is the total number of shares of Common Stock Deemed Outstanding immediately after such Dilutive Issuance. For purposes of adjusting the Conversion Rate for any Dilutive Issuance prior to the Issue Date, the Conversion Rate in effect immediately prior to such Dilutive Issuance shall be the Conversion Rate that would then have been in effect after adjusting the Conversion Rate for each prior Dilutive Issuance and the Trigger Price in effect on the date of such Dilutive Issuance shall be the Trigger Price that would have been in effect as of the Issue Date adjusted, as applicable, as set forth in the definition of Trigger Price in this Certificate of Designation.

(b) For purposes of determining the adjusted Conversion Rate pursuant to Section 4.1(a), the following provisions shall be applicable:

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

(ii) If the Corporation in any manner issues or sells any Convertible Securities, whether or not immediately convertible (other than where such Convertible Securities are issuable upon the exercise of Options for which an adjustment of the Conversion Rate is made pursuant to Section 4.2(b)(i)) and the price per share for which Common Stock is issuable upon such conversion or exchange is less than the Trigger Price in effect on the date of issuance of such Convertible Securities, then the maximum

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total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities shall, as of the date of the issuance of such Convertible Securities, be deemed to be outstanding and to have been issued and sold by the Corporation for such price per share. For the purposes of the preceding sentence, the “price per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (x) the total amount, if any, received or receivable by the Corporation as consideration for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Corporation upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (y) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment of the Conversion Rate shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities, and if any such issuance or sale of such Convertible Securities is made upon exercise of any Options for which adjustments of the Conversion Rate had been or are to be made pursuant to other provisions of this Section 4.2, no further adjustment of the Conversion Rate shall be made by reason of such issuance or sale.

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

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

(v) If any Common Stock, Options or Convertible Securities are issued, granted or sold for cash, the consideration received therefor for purposes of this

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Section 4.2 shall be the amount received by the Corporation therefor before deduction of commissions, underwriting discounts or allowances or other expenses paid or incurred by the Corporation in connection with such issuance, grant or sale. In case any Common Stock, Options or Convertible Securities are issued or sold for a consideration part or all of which shall be other than cash, the amount of the consideration other than cash received by the Corporation shall be the fair value of such consideration. If any Common Stock, Options or Convertible Securities are issued in connection with any acquisition, merger or consolidation in which the Corporation is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity which is attributable to such Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other than cash shall be determined in good faith by the Board of Directors, whose determination, in the absence of manifest error, but subject to the following provisions of this Section 4.2(b)(v), shall be final and binding upon the Corporation and the Holders of the Series C Preferred Stock. The Corporation shall give prompt written notice of the determination of the Board of Directors with respect to the fair value of such consideration other than cash to (i) the TCP Directors, if any, with respect to any such determination occurring prior to the Issue Date, and (ii) the Required Initial Holders, with respect to any such determination occurring from and after the Issue Date. If the TCP Directors or the Required Initial Holders, as the case may be, object to such determination (whether or not in manifest error) by the Board of Directors of the fair value of such consideration by giving the Corporation written notice of such objection within ten Business Days after their receipt of the Corporation’s written notice of such determination, and such objection is not withdrawn, the Corporation shall retain, at the Corporation’s sole cost, an Independent Appraiser to determine the fair value of such consideration. The determination of such Independent Appraiser with respect to the fair value of such consideration, or, if the Corporation is not required to retain an Independent Appraiser pursuant to this Section 4.2(b)(v), but retains an Independent Appraiser pursuant to the Series A Certificate of Designation, the Series B Certificate of Designation or any Warrant Agreement to determine the fair value of such consideration for purposes of the Series A Certificate of Designation, the Series B Certificate of Designation or such Warrant Agreement, as the case may be, the determination of such other Independent Appraiser with respect to the fair value of such consideration, shall be final and binding upon the Corporation and the Holders of the Series C Preferred Stock. Any written notice required to be given by the Corporation, the TCP Directors or the Required Initial Holders pursuant to this Section 4.2(b)(v) shall be given in the manner, and with the effect, provided in Section 7.4(b).

(c) No adjustment of the Conversion Rate shall be made pursuant to Section 4.2(a) or 4.2(b) upon the issuance, sale, grant, exercise, conversion, exchange, reclassification, redemption or other retirement of any of the following securities on or after the Certificate Date:

(i) the Merger Common Stock;

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(ii) the Series C Preferred Stock, including the Series C Preferred Stock issuable as Preferred Dividends pursuant to Section 2 or otherwise issuable after the Certificate Date, issuable pursuant to this Certificate of Designation, or any shares of Common Stock or other securities issuable or payable upon conversion of the Series C Preferred Stock;

(iii) any shares of Common Stock, Options or Convertible Securities issuable as a dividend or distribution on the Series C Preferred Stock in accordance with this Certificate of Designation or any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities;

(iv) the Warrants or any shares of Common Stock or Series C Preferred Stock or other securities issuable or payable upon exercise or conversion of the Warrants;

(v) the Series A Preferred Stock, including the Series A Preferred Stock issuable as dividends on the Series A Preferred Stock or otherwise issuable after the Certificate Date, issuable pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Date, or any shares of Common Stock or other securities issuable or payable upon conversion of the Series A Preferred Stock pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Date;

(vi) any shares of Common Stock, Options or Convertible Securities issuable as a dividend or distribution on the Series A Preferred Stock in accordance with the Series A Certificate of Designation as in effect on or prior to the Certificate Date, or any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities;

(vii) the Series B Preferred Stock, including the Series B Preferred Stock issuable as dividends on the Series B Preferred Stock or otherwise issuable after the Certificate Date, issuable pursuant to the Series B Certificate of Designation as in effect on or prior to the Certificate Date, or any shares of Common Stock or other securities issuable or payable upon conversion of the Series B Preferred Stock pursuant to the Series B Certificate of Designation as in effect on or prior to the Certificate Date;

(viii) any shares of Common Stock, Options or Convertible Securities issuable as a dividend or distribution on the Series B Preferred Stock in accordance with the Series B Certificate of Designation as in effect on or prior to the Certificate Date, or any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities;

(ix) any shares of Common Stock, Options or Convertible Securities issuable under (A) the Existing Benefit Plan as in effect on the Certificate Date or (B)

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the Existing Benefit Plan as amended after the Certificate Date and any Benefit Plan which becomes effective after the Certificate Date, provided that any such amendment to the Existing Benefit Plan or the effectiveness of any such Benefit Plan is approved by the Board of Directors or by the compensation committee or other authorized committee of the Board of Directors, or any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities;

(x) any shares of Common Stock issued or deemed to have been issued in a transaction for which an adjustment of the Conversion Rate is required pursuant to Section 4.2(d);

(xi) any shares of Common Stock, Options or Convertible Securities issued in connection with the acquisition of all or part of another business or company, whether by merger, consolidation or otherwise, which is approved by the Board of Directors or by an authorized committee of the Board of Directors, any shares of Common Stock issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities, or any shares of Common Stock, payment-in-kind securities or other securities issuable as a dividend or distribution on any such shares of Common Stock, Options or Convertible Securities;

(xii) any shares of Common Stock, Options or Convertible Securities issued pursuant to or as provided in the Executive Employment Agreements, or any shares of Common Stock or other securities issuable or payable upon exercise of any such Options or upon conversion or exchange of any such Convertible Securities; or

(xiii) any shares of Common Stock, Options or Convertible Securities issued or deemed to have been issued in any transaction not referred to in any of subparagraphs (i) through (xii) of this Section 4.2(c), (A) prior to the Issue Date, with the affirmative vote or consent of the TCP Directors, if any, or (B) from and after the Issue Date, with the affirmative vote or consent of Holders of the shares of Series C Preferred Stock representing more than 50% of the voting power of the then outstanding shares of Series C Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series C Preferred Stock called for such purpose.

(d) If a date of record should be fixed at any time, whether by the Corporation or by operation of law, from and after the Certificate Date for the subdivision (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) of the shares of Common Stock acquirable hereunder into a greater number of shares, or for the determination of the holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock, Convertible Securities or Options without payment of any consideration for the additional shares of Common Stock, Convertible

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Securities or Options (including the additional shares of Common Stock or Convertible Securities issuable upon conversion or exercise of such Options), then, as of such date of record, the Conversion Rate in effect immediately prior to such date of record shall be proportionately increased (with the number of shares of Common Stock or Convertible Securities issuable with respect to Options determined from time to time in the manner provided for deemed issuances or sales of Common Stock in Section 4.2(b)). If such subdivision of the shares of Common Stock or the payment of such dividend or distribution does not thereafter occur, the Conversion Rate in effect shall be readjusted to the Conversion Rate that would have been in effect if the date of record for such subdivision, dividend or distribution had never been fixed. If a date of record should be fixed at any time, whether by the Corporation or by operation of law, from and after the Certificate Date for the combination (by reverse stock split, recapitalization, reorganization, reclassification or otherwise) of the shares of Common Stock acquirable hereunder into a smaller number of shares of Common Stock, then, as of such date of record, the Conversion Rate in effect immediately prior to such date of record shall be proportionately reduced. If such combination of the shares of Common Stock does not thereafter occur, the Conversion Rate then in effect shall be readjusted to the Conversion Rate that would have been in effect if the date of record for such combination had never been fixed.

(e) If an adjustment of the Conversion Rate pursuant to Section 4.2(a), 4.2(b) or 4.2(d) shall become effective as of the record date or after the record date for the applicable Conversion Rate Adjustment Event, but before the occurrence of such Conversion Rate Adjustment Event, the Corporation may elect to defer, until after the occurrence of such Conversion Rate Adjustment Event, (i) issuance to the Holder of any shares of Series C Preferred Stock converted after such record date and before the occurrence of such Conversion Rate Adjustment Event the additional shares of Common Stock issuable upon such conversion in excess of the number of shares issuable on the basis of the Conversion Rate in effect immediately prior to such record date and (ii) payment to such Holder of any amount in cash in lieu of a fractional share of Common Stock. If the Initial Holders or any of their Affiliates shall be the beneficial and record owners of shares of Series C Preferred Stock as of the date of any such election, the Corporation shall give or cause to be given to the Initial Holders written notice of such election within five Business Days after the date of such election.

(f) After the occurrence of any Conversion Rate Adjustment Event requiring adjustment of the Conversion Rate, the Corporation shall give written notice thereof to the Holders of Series C Preferred Stock within ten Business Days following the occurrence of such Conversion Rate Adjustment Event; provided that if an adjustment of the Conversion Rate pursuant to Section 4.2(a), 4.2(b) or 4.2(d) shall become effective as of the record date or after the record date for such Conversion Rate Adjustment Event, but before the occurrence of such Conversion Rate Adjustment Event, the Corporation shall give such written notice within ten Business Days following such record date or subsequent date. Such notice shall state the Conversion Rate and any change in the number of shares of Common Stock issuable upon conversion of the Series C Preferred Stock resulting from such Conversion Rate Adjustment Event and shall set forth in reasonable detail the method of calculation and the facts upon which

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such calculation is based. Such calculation shall be certified by an authorized officer of the Corporation. Notice of any Conversion Rate Adjustment Event shall be deemed given to the Holders of Series C Preferred Stock (i) by the Corporation’s inclusion of the information specified in the second sentence of this Section 4.2(f) in the Corporation’s current report or next quarterly or annual report filed with the Securities and Exchange Commission pursuant to the Exchange Act or (ii) at the option of the Corporation, by the Corporation’s mailing to such Holders of a written notice containing such information, in each case within the period specified in the first sentence of this Section 4.2(f). Anything in Section 4.2 to the contrary notwithstanding, the Corporation shall give written notice to the Holders of Series C Preferred Stock within ten Business Days after the Issue Date of any adjustment of the Conversion Rate pursuant to Section 4.2(a) or 4.2(b) for Dilutive Issuances prior to the Issue Date.

(g) Anything in Section 4.2 to the contrary notwithstanding, the Corporation shall not be required to give effect to any adjustment of the Conversion Rate unless and until the net effect of one or more adjustments required hereunder (each of which shall be carried forward until counted toward adjustment), determined as provided therein, shall have resulted in a change of the Conversion Rate by at least 1%, and when the cumulative net effect of more than one adjustment so determined shall be to change the Conversion Rate by at least 1%, such change of the Conversion Rate shall thereupon be given effect.

4.3 Fundamental Changes

Upon the occurrence of a Fundamental Change, there shall be no adjustment of the Conversion Rate and each share of Series C Preferred Stock then outstanding, without the consent of any Holder of Series C Preferred Stock (except as set forth in the last sentence of this Section 4.3), and subject to the Corporation’s optional redemption rights pursuant to Section 5.1(b), shall become convertible only into the kind and amount of shares of Capital Stock or other securities (of the Corporation or another issuer), cash or other property receivable upon such Fundamental Change by a Holder of the number of shares of Common Stock into which such share of Series C Preferred Stock could have been converted immediately prior to the effective date of such Fundamental Change assuming such Holder of Common Stock (x) is not a Person (or a Related Entity of a Person) with which the Corporation consolidated, into which the Corporation merged or which merged into the Corporation, or to or with which the applicable sale, conveyance, lease, exchange, transfer or other transaction constituting such Fundamental Change was effected, and (y) failed to exercise the Holder’s rights of election, if any, as to the kind of amount of Capital Stock or other securities, cash or other property receivable upon such Fundamental Change. In any such event, effective provisions shall be made in the certificate or articles of incorporation of the resulting or surviving corporation, in any contract of sale, conveyance, lease, exchange or transfer, or otherwise so that any resulting or surviving corporation or any Transferee in connection with such Fundamental Change shall expressly assume the obligation to deliver, to the Holders of the Series C Preferred Stock, such shares of Capital Stock or other securities, cash or other property (i) upon conversion of the Series C Preferred Stock, if the Series C Preferred Stock shall remain outstanding following such Fundamental Change, or (ii) upon the consummation of such

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Fundamental Change or thereafter as provided in such effective provisions, if the Series C Preferred Stock shall not remain outstanding following such Fundamental Change. The provisions of this Section 4.3 similarly shall apply to successive Fundamental Changes. The provisions of this Section 4.3 shall be the sole right of Holders of Series C Preferred Stock in connection with any Fundamental Change, and such Holders shall have (i) no separate right to consent with respect to, and shall have no separate vote on, such Fundamental Change (except as expressly required by applicable law) and (ii) no other vote on such Fundamental Change (except as provided in Section 7.1).

4.4 Reservation of Common Stock

The Corporation at all times shall reserve and keep available for issuance upon the conversion of the Series C Preferred Stock such number of its authorized but unissued shares of Common Stock as shall from time to time be sufficient to permit the conversion of all outstanding shares of Series C Preferred Stock, and shall take all action required to increase the authorized number of shares of Common Stock if at any time there shall be insufficient authorized unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series C Preferred Stock.

4.5 Taxes and Other Charges

The issuance or delivery of certificates for Common Stock upon the conversion of shares of Series C Preferred Stock shall be made without charge to the converting Holder of shares of Series C Preferred Stock for such certificates or for any tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the respective names of, or in such names as may be directed by, the Holders of the shares of Series C Preferred Stock converted; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the Holder of the shares of Series C Preferred Stock converted, and the Corporation shall not be required to issue or deliver such certificate unless or until the Person or Persons requesting the issuance or delivery thereof shall have paid to the Corporation the amount of such tax or shall have established to the reasonable satisfaction of the Corporation that such tax has been paid.

5. Redemption of Series C Preferred Stock

5.1 Redemption at Option of the Corporation

(a) Except as provided in Section 5.1(b), shares of the Series C Preferred Stock may not be redeemed by the Corporation prior to the third anniversary of the Issue Date. On or after the third anniversary of the Issue Date, the Series C Preferred Stock may be redeemed for cash by the Corporation, at its option, at any time and from time to time, in whole or in part, at a redemption price per share (the “Optional Redemption Price”) equal to the sum of (x) the Liquidation Preference per share, (y) any Accumulated Dividends accrued with

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respect to such share and (z) any Current Period Dividends with respect to such share accrued to, but not including, the Redemption Date, without interest; provided that the Corporation shall not exercise its redemption rights pursuant to this Section 5.1(a) for a number of shares of Series C Preferred Stock having an aggregate Redemption Price of less than $5 million unless the aggregate Redemption Price of all shares of Series C Preferred Stock then outstanding is less than $5 million.

(b) If a Fundamental Change occurs at any time prior to the third anniversary of the Issue Date, the Series C Preferred Stock may be redeemed for cash by the Corporation, at its option, at any time (including concurrently with the occurrence of such Fundamental Change) and from time to time, in whole or in part, at a redemption price per share (the “Fundamental Change Redemption Price”) equal to 110% of the sum of (x) the Liquidation Preference per share, (y) any Accumulated Dividends accrued with respect to such share and (z) any Current Period Dividends with respect to such share accrued to, but not including, the Redemption Date, without interest; provided that the Corporation shall not exercise its redemption rights pursuant to this Section 5.1(b) for a number of shares of Series C Preferred Stock having an aggregate Redemption Price of less than $5 million unless the aggregate Redemption Price of all shares of Series C Preferred Stock then outstanding is less than $5 million.

(c) If fewer than all the outstanding shares of the Series C Preferred Stock shall be redeemed pursuant to Section 5.1(a) or 5.1(b), the number of shares to be redeemed shall be determined by the Board of Directors, consistent with the provisions of Section 5.1(a) or 5.1(b), and the shares to be redeemed shall be selected on a pro rata basis (with any fractional shares being rounded up to the nearest whole share). Notwithstanding the foregoing, consistent with the provisions of Section 5.1(a) or 5.1(b), the Corporation may redeem all, none or any amount greater or less than the pro rata portion of shares held by any Holder of fewer than 10,000 shares of Series C Preferred Stock as may be determined by the Board of Directors.

(d) Notwithstanding anything in this Section 5.1 to the contrary, for so long as the Initial Holders and their Affiliates are the beneficial and record owners of at least 50% of the shares of Series C Preferred Stock then outstanding, the Corporation shall not redeem or exercise its rights to redeem any shares of Series C Preferred Stock pursuant to this Section 5.1 without the prior written consent of the Initial Holders and their Affiliates owning beneficially and of record at least 50% of the shares of Series C Preferred Stock then outstanding unless the Corporation concurrently redeems, purchases or otherwise acquires a pro rata portion of each other class or series of Parity Securities outstanding at such time, which pro rata portion shall be calculated based on the aggregate redemption, purchase or other acquisition price which would be payable to the Holders of the Series C Preferred Stock and the holders of each such class or series of Parity Securities to redeem the total number of shares of the Series C Preferred Stock and each such class or series of Parity Securities then outstanding.

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5.2 Mandatory Redemption

(a) Subject to the second sentence of this Section 5.2(a), the Corporation shall redeem for cash all outstanding shares of Series C Preferred Stock, if any, on October 29, 2012, at a redemption price per share (the “Mandatory Redemption Price”) equal to the sum of (x) the Liquidation Preference per share, (y) any Accumulated Dividends accrued with respect to such share and (z) any Current Period Dividends with respect to such share accrued to, but not including, the Redemption Date, without interest. Notwithstanding anything in this Section 5.2. to the contrary, for so long as the Initial Holders and their Affiliates are the beneficial and record owners of at least 50% of the shares of Series C Preferred Stock then outstanding, the Corporation shall not redeem any shares of Series C Preferred Stock pursuant to this Section 5.2 without the prior written consent of the Initial Holders and their Affiliates owning beneficially and of record at least 50% of the shares of Series C Preferred Stock then outstanding unless the Corporation concurrently redeems, purchases or otherwise acquires a pro rata portion of each other class or series of Parity Securities outstanding at such time, which pro rata portion shall be calculated based on the aggregate redemption, purchase or other acquisition price which would be payable to the Holders of the Series C Preferred Stock and the holders of each such class or series of Parity Securities to redeem the total number of shares of the Series C Preferred Stock and each such class or series of Parity Securities then outstanding.

(b) If the funds of the Corporation legally available for redemption of shares on the Redemption Date are insufficient to redeem on such date all outstanding shares of the Series A Preferred Stock pursuant to the Series A Certificate of Designation, the Series B Preferred Stock pursuant to the Series B Certificate of Designation and the Series C Preferred Stock pursuant to this Section 5.2, the Corporation shall use those funds that are legally available therefor to redeem the maximum possible number of such shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock ratably among the Holders of such shares such that each Holder of Series A Preferred Stock, each Holder of Series B Preferred Stock and each Holder of Series C Preferred Stock shall be entitled to receive such Holder’s pro rata share of such legally available funds based on the aggregate redemption price which would be payable to the Holders of the Series A Preferred Stock pursuant to the Series A Certificate of Designation, to the Holders of the Series B Preferred Stock pursuant to the Series B Certificate of Designation and to the Holders of the Series C Preferred Stock pursuant to this Section 5.2 to redeem the total number of shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock then outstanding. The shares of Series C Preferred Stock not redeemed shall remain outstanding and entitled to all the rights and preferences provided in this Certificate of Designation. At any time and from time to time after October 29, 2012 when additional funds of the Corporation are legally available for the redemption of shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, the Corporation shall promptly use such funds to redeem the balance of the shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, on a pro rata basis as aforesaid, that the Corporation is obligated to redeem pursuant to the Series A Certificate of Designation, the Series B Certificate of Designation or this Section 5.2, as the case may be, but that it has not redeemed. If and for so long as any mandatory redemption obligation with respect to shares of

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Series C Preferred Stock under this Section 5.2 has not been discharged, the Corporation shall not, and shall cause its subsidiaries not to, (i) redeem, purchase or otherwise acquire for any consideration any Parity Securities or discharge any mandatory or optional redemption, sinking fund or other similar obligation in respect of any Parity Securities, except as provided in this Section 5.2(b), or (ii) declare or make any Junior Securities Distribution (including, without limitation, any redemption, purchase or other acquisition of any Junior Securities for any consideration) or discharge any mandatory or optional redemption, sinking fund or other similar obligation in respect of any Junior Securities.

5.3 Redemption Procedures

(a) If the Corporation shall redeem shares of the Series C Preferred Stock pursuant to Section 5.1 or 5.2:

(i) In the case of a redemption pursuant to Section 5.1(a) or 5.2(a), the Corporation shall send a Redemption Notice to the Holders of Series C Preferred Stock not less than 30 days nor more than 60 days prior to the Redemption Date, and in the case of a redemption pursuant to Section 5.1(b) in connection with a Fundamental Change, not less than 15 days prior to such Fundamental Change. Neither the failure to give a Redemption Notice nor any defect therein shall affect the validity of the giving of notice for the redemption of any share of Series C Preferred Stock to be redeemed, except as to any Holder to whom the Corporation has failed to give such Redemption Notice or except as to any Holder whose Redemption Notice was materially defective.

(ii) On or before any Redemption Date, each Holder of shares of Series C Preferred Stock to be redeemed shall surrender the certificate or certificates representing such shares of Series C Preferred Stock (properly endorsed or assigned, or transferred, if the Corporation shall so require and the Redemption Notice shall so state) to the Corporation or the Redemption Agent (if appointed) in the manner and at the place designated in the Redemption Notice.

(iii) On the Redemption Date, the Corporation or the Redemption Agent, as applicable, shall pay the full Redemption Price in cash to the Holder whose name appears on such certificate or certificates as the owner thereof.

(iv) The shares of Series C Preferred Stock represented by each certificate to be surrendered shall no longer be deemed outstanding and shall be automatically (and without any further action of the Corporation or the Holder) canceled as of the Redemption Date (unless the Corporation shall be in default of the payment of the Redemption Price) whether or not certificates for such shares are returned to the Corporation, and shall be retired as provided in Section 9.1.

(v) If fewer than all the shares of Series C Preferred Stock represented by any certificate are to be redeemed, a new certificate shall be issued

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representing the unredeemed shares, without cost to the Holder thereof. Upon such redemption, the Corporation shall execute and the Transfer Agent shall authenticate and deliver such new certificate to the Holder thereof at such address designated by such Holder. If any unredeemed share would be a fractional share, the Corporation, in its sole discretion, may either issue such fractional share to such Holder or in lieu thereof pay to such Holder a cash adjustment for such fractional share based on the Redemption Price.

(b) If a Redemption Notice shall have been given as provided in Section 5.3(a), and except as otherwise expressly provided in this Certificate of Designation, all rights (excluding the right to receive the Redemption Price) of the Holders of shares of Series C Preferred Stock so called for redemption shall cease either (i) from and after the Redemption Date (unless the Corporation shall default in the payment of the Redemption Price, in which case such rights shall not terminate at the Redemption Date) or (ii) if the Corporation shall so elect and state in the Redemption Notice, from and after the time and date (which date shall be the Redemption Date or an earlier date not less than 15 days after the date of mailing of the Redemption Notice) on which the Corporation shall irrevocably deposit in trust for the Holders of the shares to be redeemed with a designated Redemption Agent as paying agent funds in an amount sufficient to pay the Redemption Price at the office of such paying agent on the Redemption Date. Any funds so deposited with such Redemption Agent that shall not be required for such redemption shall be returned to the Corporation forthwith. Subject to applicable escheat laws, any funds so set aside by the Corporation and unclaimed at the end of one year after the Redemption Date shall revert to the general funds of the Corporation, after which reversion the Holders of the shares of Series C Preferred Stock so called for redemption shall look only to the general funds of the Corporation for the payment of the Redemption Price, without interest. Any interest accrued on funds held by the Redemption Agent shall be paid to the Corporation from time to time.

(c) Except as provided in Sections 5.1(a), 5.1(b) and 5.2(a), the Corporation shall make no adjustment or payment for, or have any other obligation with respect to, any Accumulated Dividends or Current Period Dividends accrued with respect to shares of Series C Preferred Stock in connection with or following the redemption of such shares.

(d) No shares of Series C Preferred Stock may be redeemed by the Corporation except with funds legally available for the payment of the Redemption Price.

(e) As provided in Section 4.1(a), and notwithstanding anything in this Certificate of Designation to the contrary, each Holder of shares of Series C Preferred Stock which shall be called for redemption pursuant to this Section 5 shall have the right, which shall be exercisable at any time up to the close of business on the Business Day immediately prior to the Redemption Date, to convert all or any portion of such shares into shares of Common Stock pursuant to Section 4, unless the Corporation shall default in making the payment due under this Section 5 upon redemption of such shares, in which case such right shall be exercisable at any time until the close of business on the Business Day immediately prior to the date on which such payment is made.

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6. Liquidation Preference

6.1 Liquidation Preference

Upon the occurrence of any Liquidation Event, after payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of Senior Securities, and before any payment or distribution of the assets of the Corporation (whether capital or surplus) shall be made to or set apart for the holders of Junior Securities, the Holders of the Series C Preferred Stock shall be entitled to receive an amount per share of Series C Preferred Stock in cash equal to the greater of (x) the sum of (A) the Liquidation Preference per share, (B) any Accumulated Dividends accrued with respect to such share and (C) any Current Period Dividends with respect to such share accrued to, but not including, the date of such Liquidation Event or (y) the aggregate amount that would have been received with respect to the shares of Common Stock such Holders would have received, assuming the shares of Series C Preferred Stock had been converted into Common Stock pursuant to Section 4 immediately prior to the date of such Liquidation Event.

6.2 Distribution on Parity Securities

If, upon any Liquidation Event, the amounts payable with respect to the Series C Preferred Stock pursuant to Section 6.1 and such amounts payable on all other Parity Securities are not paid in full, the Holders of the Series C Preferred Stock and the holders of such Parity Securities shall share pro rata in the assets of the Corporation available for distribution in proportion to the full distribution thereof to which each is entitled.

6.3 Distribution of Remaining Assets

After payment of the full amount to which Holders of the Series C Preferred Stock are entitled pursuant to Section 6.1 upon any Liquidation Event, Holders of the Series C Preferred Stock shall have no right or claim to any of the remaining assets of the Corporation.

6.4 Effect of Certain Transactions

Neither the sale, conveyance, lease, exchange or transfer of all or substantially all of the assets of the Corporation (for Capital Stock or other securities, cash or other consideration) nor the consolidation or merger of the Corporation with or into one or more entities shall be deemed to be a Liquidation Event for purposes of this Certificate of Designation.

7. Voting Rights

7.1 Voting Rights

The voting rights and related notice rights of Holders of the Series C Preferred Stock set forth in this Section 7.1 are subject to, and qualified to the extent provided by, applicable law or regulation, and the NASDAQ Marketplace Rules. The Holders of the Series C Preferred Stock

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shall be entitled to vote on all matters on which the Holders of Common Stock shall be entitled to vote, in the same manner and with the same effect as the Holders of Common Stock, voting together with the Holders of Common Stock as a single class. For this purpose, the Holders of the Series C Preferred Stock shall be given notice of any meeting of stockholders of which the Holders of Common Stock are given notice in accordance with the bylaws of the Corporation. With respect to any matter on which the Holders of the Series C Preferred Stock shall be entitled to vote together with the Holders of Common Stock as a single class as provided in this Section 7.1, each Holder of the Series C Preferred Stock shall have a number of votes per share of the Series C Preferred Stock held of record by such Holder (on the record date for the meeting of stockholders, if such matter is subject to a vote at a meeting of stockholders, or on the effective date of any consent, if such matter is subject to a consent of the stockholders without a meeting of stockholders), equal to the quotient of the following, rounded up to the nearest one-ten thousandth (.0001) of a whole vote (as determined by the Board of Directors in good faith): (x) the Adjusted Series D Warrant Exercise Price divided by (y) $0.87, which was the Closing Bid Price on the Business Day immediately preceding the Series D Warrant Issue Date; provided that, if and whenever, from and after the Series D Warrant Issue Date, (i) the shares of Common Stock shall have been subdivided (by any stock split, stock dividend, recapitalization, reorganization, reclassification or otherwise) into a greater number of shares, such number of votes per share of Series C Preferred Stock shall be proportionately increased, or (ii) the shares of Common Stock shall have been combined (by reverse stock split, recapitalization, reorganization, reclassification or otherwise) into a smaller number of shares of Common Stock, such number of votes per share of Series C Preferred Stock shall be proportionately reduced.

7.2 Approval of Certain Matters

(a) So long as any shares of Series C Preferred Stock are outstanding, the Corporation shall not (i) amend, alter or repeal any provision of the Certificate of Incorporation or this Certificate of Designation to alter or change the powers, preferences or special rights of shares of Series C Preferred Stock (whether by merger, consolidation, business combination, other extraordinary corporate transaction or otherwise) so as to affect them adversely, or, (ii) other than as provided in Section 2.2(a), 4.1, 4.2, 4.3, 5 or 6.1, change the Series C Preferred Stock into any other securities, cash or other property, in the case of each of clauses (i) and (ii), without the affirmative vote or consent of Holders of the shares representing more than 50% of the voting power of the then outstanding shares of Series C Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series C Preferred Stock called for such purpose; provided that any such amendment of this Certificate of Designation that changes any dividend or other amount payable on, or the liquidation preference of, the Series C Preferred Stock shall require the affirmative vote or consent of Holders of the shares representing at least 66 ²/3% of the voting power of the then outstanding shares of Series C Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series C Preferred Stock called for such purpose.

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(b) So long as any shares of Series C Preferred Stock are outstanding, the Corporation shall not authorize or issue, or increase the authorized amount of, any Parity Securities, including any additional shares of Series C Preferred Stock (other than (i) shares of Series A Preferred Stock or other securities issuable or payable as dividends on the Series A Preferred Stock and shares of Series A Preferred Stock issuable after the Issue Date pursuant to or as provided in the Executive Employment Agreements or in connection with a stock split or similar transaction, in each case pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Date, (ii) shares of Series B Preferred Stock or other securities issuable or payable as dividends on the Series B Preferred Stock and shares of Series B Preferred Stock issuable after the Issue Date pursuant to or as provided in the Merger Agreement and the Executive Employment Agreements or in connection with a stock split or similar transaction, in each case pursuant to the Series B Certificate of Designation as in effect on or prior to the Certificate Date, and (iii) shares of Series C Preferred Stock issuable after the Issue Date upon the exercise or conversion of the Series D Warrants or in connection with a stock split or similar transaction and shares of Series C Preferred Stock issuable or payable as dividends on the Series C Preferred Stock, in each case pursuant to this Certificate of Designation), or any Senior Securities, or any security convertible into or exchangeable for any such Parity or Senior Securities (other than the Series D Warrants), without the affirmative vote or consent of Holders of the shares representing more than 50% of the voting power of the then outstanding shares of Series C Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series C Preferred Stock called for such purpose.

(c) The consent or votes required in Sections 7.2(a) and 7.2(b) shall be in addition to any consent or approval of Holders of the Series C Preferred Stock which may be required by law or pursuant to any provision of the Certificate of Incorporation.

7.3 Other Voting Rights

In exercising the voting rights set forth in this Section 7, each share of Series C Preferred Stock shall have one vote per share except as otherwise expressly provided for in this Certificate of Designation. Except as otherwise required by applicable law or as set forth in this Certificate of Designation, the shares of Series C Preferred Stock shall not have any relative, participating, optional or other special voting rights and powers, and the vote or consent of the holders of the Series C Preferred Stock shall not be required for the taking of any corporate action.

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7.4 Notices; Notices of Record Date

(a) So long as the Initial Holders and their Affiliates are the beneficial and record owners of at least 50% of the shares of Series C Preferred Stock then outstanding, in the event of:

(i) any taking by the Corporation of a record of the holders of any class of securities of the Corporation for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of Capital Stock of any class or any other securities or property, or to receive any other right, other than, in each case, (A) a regular quarterly or other periodic dividend publicly announced by the Corporation or provided for in the instrument governing such class of securities (including, without limitation, dividends payable on the Series A Preferred Stock pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Date, dividends payable on the Series B Preferred Stock pursuant to the Series B Certificate of Designation as in effect on or prior to the Certificate Date and Preferred Dividends payable on the Series C Preferred Stock pursuant to Section 2), (B) any other issuance of the Series A Preferred Stock after the Issue Date pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Date, any other issuance of Series B Preferred Stock after the Issue Date pursuant to the Series B Certificate of Designation as in effect on or prior to the Certificate Date, and any other issuance of the Series C Preferred Stock after the Issue Date pursuant to this Certificate of Designation or (C) a regular quarterly or other periodic payment of interest in cash or securities on, or such payment of interest effectuated by an increase in the amount of, any issue of the Corporation’s indebtedness in accordance with the instrument governing such indebtedness, or

(ii) the proposed filing of a certificate of dissolution in connection with any Liquidation Event,

then and in each such event the Corporation shall give or cause to be given to each Holder of the Series C Preferred Stock a written notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right and a description of such dividend, distribution or right or the date on which the filing of such certificate of dissolution is expected to be effected, as the case may be, and (ii) the date, if any, that is to be fixed, on which the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for securities or other property deliverable upon such event. Such notice shall be given at least 20 days prior to the date specified in such notice on which such event, action or record is to be taken or on which the filing of such certificate of dissolution is expected to be effected. Any failure by the Corporation to provide any such notice required by this Section 7.4(a) shall not affect the validity of any event, action or record required to be specified in such notice.

(b) Without limiting the generality of Section 7.4(a), any notice required by Section 7.4(a) to be given to the Holders of shares of Series C Preferred Stock shall be deemed

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delivered (i) upon personal delivery to the Holder to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient and, if not, then on the next Business Day, (iii) five days after having been deposited into the U.S. mails or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All notices required by Section 7.4(a) shall be sent to each Holder at such Holder’s address appearing on the stock register of the Corporation.

7.5 Amendment of Certificate of Designation

So long as any shares of Series C Preferred Stock are outstanding and held by the Required Initial Holders, in addition to any vote required by law or the Certificate of Incorporation (including this Certificate of Designation), the affirmative vote or consent of Holders of the shares representing more than 50% of the voting power of the then outstanding shares of Series C Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series C Preferred Stock called for such purpose shall be required to amend the Series A Certificate of Designation and the Series B Certificate of Designation; provided that such vote or consent shall not be required with respect to any proposed amendment of the Series A Certificate of Designation or the Series B Certificate of Designation (any such proposed amendment, the “Proposed Amendment”) if the Corporation shall previously have complied with the following provisions of this Section 7.5 with respect to such Proposed Amendment. If shares of Series C Preferred Stock are held by the Required Initial Holders and the Board of Directors shall determine that the Corporation will not seek the affirmative vote or consent of the Holders of the Series C Preferred Stock with respect to a Proposed Amendment pursuant to this Section 7.5 prior to submitting such Proposed Amendment to the Holders of the Series A Preferred Stock or the Holders of the Series B Preferred Stock, as the case may be, for approval, the Corporation shall give written notice of such Proposed Amendment (which shall include the text thereof) to the Required Initial Holders. If, within ten Business Days after the Corporation shall have given such written notice to the Required Initial Holders, the Required Initial Holders shall give written notice to the Corporation that the Required Initial Holders seek to have this Certificate of Designation amended in a manner substantially similar to such Proposed Amendment, the Board of Directors, in addition to approving such Proposed Amendment, shall approve, declare advisable and submit to the Holders of the Series C Preferred Stock for approval such a substantially similar amendment to this Certificate of Designation. If, within the period of ten Business Days described in the immediately preceding sentence, the Required Initial Holders do not provide such written notice to the Corporation that the Required Initial Holders seek to have this Certificate of Designation so amended, or, if the Required Initial Holders do so notify the Corporation, but the Holders of the Series C Preferred Stock do not approve or consent to such a substantially similar amendment to this Certificate of Designation, the Corporation shall be deemed to have complied with this Section 7.5 with respect to such Proposed Amendment and the Holders of the Series C Preferred Stock shall have no right to vote upon or consent to such Proposed Amendment pursuant to this Section 7.5. Any substantially similar amendment to this Certificate of Designation approved or consented to

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pursuant to this Section 7.5 shall become effective as nearly as practicable concurrently with, or immediately prior to, the effectiveness of the Proposed Amendment. In no event shall the failure of the Required Initial Holders to seek to have this Certificate of Designation amended in a manner substantially similar to any Proposed Amendment affect the applicability of this Section 7.5 with respect to any subsequent Proposed Amendment. Any written notice required to be given by the Corporation or the Required Initial Holders pursuant to this Section 7.5 shall be given in the manner, and with the effect, provided in Section 7.4(b).

8. Certain Definitions

Set forth below are the meanings assigned to certain defined terms used in this Certificate of Designation.

8.1 “Accumulated Dividends,” with respect to a share of Series C Preferred Stock, on any date of determination, means all Preferred Dividends that have accrued with respect of such share pursuant to Section 2.1(a) as of the Dividend Payment Date on or immediately preceding such date of determination, but which have not been paid. The Accumulated Dividends accrued with respect to any share of Series C Preferred Stock shall be reduced by the amount of any Preferred Dividends specified above which are actually paid with respect of such share as provided in Section 2.1(c).

8.2 “Adjusted Series D Warrant Exercise Price” means, as of any date of determination, the price, rounded down to the nearest one one-hundredth (0.01) of a cent, equal to the quotient obtained by dividing (x) the Series D Warrant Exercise Price by (y) 1.3333.

8.3 “Affiliate” has the same meaning as in Rule 12b-2 under the Exchange Act.

8.4 “Annual Dividend Rate” has the meaning specified in Section 2.1(a).

8.5 “Beneficial owner” or “beneficially own” has the same meaning as in Rule 13d-3 under the Exchange Act.

8.6 “Benefit Plan” means any stock option, restricted stock, stock incentive, deferred compensation, profit sharing, defined benefit or other benefit plan of the Corporation or any of its subsidiaries.

8.7 “Board of Directors” means the board of directors of the Corporation.

8.8 “Business Day” means any day other than a Saturday, a Sunday or any day on which banking institutions in The City of New York or the State of Georgia or at a place payment is to be received are authorized by law, regulation or executive order to remain closed. If a payment date is not a Business Day at a place of payment, payment may be made at that place on the next succeeding Business Day, and no interest shall accrue for the intervening period.

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8.9 “Capital Stock” means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock or partnership or membership interests, whether common or preferred.

8.10 “Certificate Date” means the date on which this Certificate of Designation shall become effective under the General Corporation Law of the State of Delaware.

8.11 “Certificate of Incorporation” means the Restated Certificate of Incorporation of the Corporation, as amended from time to time.

8.12 “Closing Bid Price” means, on any date of determination, the closing bid price of the Common Stock on the NASDAQ National Market.

8.13 “Closing Price” means, with respect to the Common Stock, on any date, (i) the last sales price on the NASDAQ National Market, the NASDAQ SmallCap Market or the OTC Bulletin Board or the principal securities exchange or other securities market on which the Common Stock is then traded, or (ii) if the Common Stock is so traded, but not so reported, the average of the last bid and ask prices, as those prices are reported on the NASDAQ National Market, the NASDAQ SmallCap Market or the OTC Bulletin Board or the principal securities exchange or other securities market on which the Common Stock is then traded, or (iii) if the Common Stock is not listed or authorized for trading on the NASDAQ National Market, the NASDAQ SmallCap Market or the OTC Bulletin Board or any securities exchange or comparable securities market, the average of the closing bid and ask prices as furnished by two members of the National Association of Securities Dealers, Inc. selected from time to time by the Board of Directors for that purpose. If the Common Stock is not listed and traded in any manner such that the prices and quotations referred to above are available for the period required hereunder, the Closing Price per share shall be deemed to be the fair value per share of Common Stock as determined by the Board of Directors.

8.14 “Common Stock” means the Corporation’s authorized Common Stock.

8.15 “Common Stock Deemed Outstanding” means, on any date of determination, the number of shares of Common Stock actually outstanding, plus the maximum total number of shares of Common Stock issuable as of such date of determination upon the exercise of any then outstanding Options (including, without limitation, the Warrants and any Options outstanding under the Existing Benefit Plan or any other Benefit Plan) or issuable as of such date of determination upon conversion or exchange of any then outstanding Convertible Securities (including, without limitation, the Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock), whether or not such Options or Convertible Securities are actually exercisable, convertible or exchangeable at such time, without duplication.

8.16 “Conversion Date” means the date the Corporation or the Transfer Agent receives the Conversion Notice.

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8.17 “Conversion Notice” means a written notice given by a Holder of Series C Preferred Stock to the Corporation pursuant to Section 4.1(b) stating that such Holder elects to convert all or a portion of such Holder’s shares of Series C Preferred Stock represented by certificates delivered to the Corporation or the Transfer Agent contemporaneously with such written notice. The Conversion Notice shall be in substantially the form of Exhibit A hereto.

8.18 “Conversion Rate” means the number of shares of Common Stock, rounded up to the nearest one-ten thousandth (.0001) of a share of Common Stock, that shall be issuable upon conversion of one share of Series C Preferred Stock. The Conversion Rate, which is subject to adjustment from and after the Certificate Date as provided in Section 4.2, shall be 1.3333; provided that, if there shall have occurred after the Series D Warrant Issue Date and before the Certificate Date any event of the type described in Section 4.2(d) that would have resulted in an adjustment of the Conversion Rate if such event had occurred from and after the Certificate Date, then the Conversion Rate to be in effect in this Certificate of Designation as of the Certificate Date shall be (i) proportionately increased from 1.3333, if such event would have resulted in an increase in the Conversion Rate pursuant to Section 4.2(d), or (ii) proportionately reduced from 1.3333, if such event would have resulted in a reduction of the Conversion Rate pursuant to Section 4.2(d).

8.19 “Conversion Rate Adjustment Event” means any event specified in Section 4.2 resulting in an adjustment of the Conversion Rate.

8.20 “Convertible Securities” has the meaning specified in Section 4.2(b).

8.21 “Corporation” means ITC^DeltaCom, Inc., a Delaware corporation organized and existing under the General Corporation Law of the State of Delaware.

8.22 “Current Period Dividends,” with respect to a share of Series C Preferred Stock, on any date of determination, means all Preferred Dividends that have accrued with respect of such share pursuant to Section 2 since the Dividend Payment Date immediately preceding such date of determination, but which have not been paid.

8.23 “Dilutive Issuance” has the meaning specified in Section 4.2(a).

8.24 “Dividend Payment Date” has the meaning specified in Section 2.1(a).

8.25 “Dividend Payment Record Date” has the meaning specified in Section 2.1(a).

8.26 “Dividend Period” has the meaning specified in Section 2.1(a).

8.27 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

8.28 “Excluded Junior Securities” means any Junior Securities redeemed, purchased or otherwise acquired pursuant to (i) any agreement by the Corporation to pay cash in lieu of fractional shares (A) in connection with a business combination or other transaction

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approved by the Board of Directors, (B) pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Date, the Series B Certificate of Designation as in effect on or prior to the Certificate Date or this Certificate of Designation or (C) pursuant to any Warrant Agreement, (ii) any Benefit Plan under which, in accordance with clause (ix) of Section 4.2(c), issuances or deemed issuances of Common Stock, Options or Convertible Securities shall not result in adjustments of the Conversion Rate, (iii) any transaction for which an adjustment of the Conversion Rate is required pursuant to Section 4.2(d), (iv) any Executive Employment Agreement, (v) any Warrant Agreement, (vi) the Merger Agreement or (vii) any Transaction Document.

8.29 “Executive Employment Agreements” means (i) the Employment Agreement, dated as of February 3, 2005, between the Corporation and Randall E. Curran, as amended from time to time (provided that no amendment to such Employment Agreement after the Certificate Date shall change the type or increase the amount of securities of the Corporation issuable thereunder), (ii) the Employment Agreement, dated as of February 21, 2005, between the Corporation and Richard E. Fish, Jr., as amended from time to time (provided that no amendment to such Employment Agreement after the Certificate Date shall change the type or increase of the amount of securities of the Corporation issuable thereunder), and (iii) the Employment Agreement, dated as of February 28, 2005, between the Corporation and James P. O’Brien, as amended from time to time (provided that no amendment to such Employment Agreement after the Certificate Date shall change the type or increase the amount of securities of the Corporation issuable thereunder).

8.30 “Existing Benefit Plan” means each of the ITC^DeltaCom, Inc. Stock Incentive Plan and the ITC^DeltaCom, Inc. Executive Stock Incentive Plan.

8.31 “Fundamental Change” means any transaction or event, including, without limitation, any merger, consolidation, sale, conveyance, lease, exchange or transfer of assets, tender or exchange offer, reclassification (including any such reclassification in connection with a consolidation or merger in which the Corporation is the surviving corporation), capital reorganization, compulsory share exchange or liquidation, in each case in which all or substantially all outstanding shares of the Common Stock, or all or substantially all of the assets or the property of the Corporation, are converted into or exchanged for Capital Stock (of the Corporation or another issuer) or other securities, cash or other property.

8.32 “Fundamental Change Redemption Price” has the meaning specified in Section 5.1(b).

8.33 “Governance Agreement” means the Amended and Restated Governance Agreement, dated as of July 26, 2005 and as it may be amended from time to time, among the Corporation and the securityholders of the Corporation identified therein

8.34 “Holder” means a Person in whose name shares of Capital Stock are registered on the stock register of the Corporation.

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8.35 “Independent Appraiser” means an independent investment banking firm or independent public accounting firm, in each case of nationally recognized standing in the valuation of businesses similar to the business of the Corporation.

8.36 “Initial Exercise Date” has the meaning specified in the Series D Warrant Agreement.

8.37 “Initial Holder” means each TCP Securityholder (as such term is defined in the Governance Agreement) as of the Certificate Date that holds Series D Warrants as of the Certificate Date and that is a Holder of Series C Preferred Stock from time to time.

8.38 “Issue Date” means the first date on which the Series C Preferred Stock is issued.

8.39 “Junior Securities” has the meaning specified in Section 3.1(a).

8.40 “Junior Securities Distribution” has the meaning specified in Section 2.2(b).

8.41 “Liens” means liens and charges other than liens and charges arising under (i) any Transaction Document, (ii) any other agreement entered into between the Corporation and any Holder of the Series C Preferred Stock from time to time or (iii) any other agreement to which the Corporation is not a party.

8.42 “Liquidation Event” means a liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary.

8.43 “Liquidation Preference” has the meaning specified in Section 1.1.

8.44 “Mandatory Redemption Price” has the meaning specified in Section 5.2(a).

8.45 “Merger Agreement” means the Agreement and Plan of Merger, dated as of July 2, 2003, as amended from time to time, among the Corporation, BTI Telecom, Inc., 8DBC1 Corp., WCAS Capital Partners III, L.P., Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS Information Partners, L.P. and certain individual investors and trusts listed on the signature pages thereto.

8.46 “Merger Common Stock” means the Common Stock issued by the Corporation pursuant to the Merger Agreement.

8.47 “NASDAQ Marketplace Rules” means the rules, regulations, interpretations, policies and practices of the National Association of Securities Dealers, Inc. and The NASDAQ Stock Market, Inc. in effect from time to time and applicable to the Corporation.

8.48 “Optional Redemption Price” has the meaning specified in Section 5.1(a).

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8.49 “Options” has the meaning specified in Section 4.2(b).

8.50 “Parity Securities” has the meaning specified in Section 3.1(b).

8.51 “Person” means any individual, corporation, partnership, joint venture, association, joint-stock issuer, interest, trust or unincorporated organization (including any subdivision or ongoing business of any such entity or substantially all of the assets of any such entity, subdivision or business).

8.52 “Post-Record Date Series C Preferred Stock” means any share of Series C Preferred Stock that is issued (i) after the Issue Date and (ii) after the Dividend Payment Record Date for any Dividend Period but before the Dividend Payment Date for such Dividend Period.

8.53 “Preferred Dividends” has the meaning specified in Section 2.1(a).

8.54 “Proposed Amendment” has the meaning specified in Section 7.5.

8.55 “Redemption Agent” means that Person, if any, appointed by the Corporation to hold funds deposited by the Corporation in trust to pay to the Holders of shares of Series C Preferred Stock to be redeemed. Any Redemption Agent shall be (i) a national banking association or corporation organized and doing business under the laws of the United States of America or of any state or territory thereof or of the District of Columbia, authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal, state, territorial or District of Columbia authority, and having a combined capital and surplus of at least $50 million or (ii) an Affiliate of such a national banking association or corporation that customarily performs the duties of redemption agent for public securities issues.

8.56 “Redemption Date” means the date set forth in the Redemption Notice which is fixed for redemption of the shares of Series C Preferred Stock referred to therein.

8.57 “Redemption Notice” means that notice to be given by the Corporation to the Holders notifying the Holders as to the redemption, in whole or in part, of the Series C Preferred Stock pursuant to Section 5. The Redemption Notice shall include the following information:

(i) the Redemption Date and the time of day on such date;

(ii) the total number of shares of Series C Preferred Stock to be redeemed and, if fewer than all the shares held by such Holder are to be redeemed, the number of such shares to be redeemed from such Holder;

(iii) the Redemption Price;

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(iv) the place or places where certificates for such shares are to be surrendered for payment of the Redemption Price;

(v) that dividends on the shares to be redeemed shall cease to accrue on such Redemption Date unless the Corporation defaults in the payment of the Redemption Price; and

(vi) the name of any bank or other financial institution, if any, performing the duties of Redemption Agent.

The Redemption Notice shall be given by first-class mail to each record Holder of the shares to be redeemed, at such Holder’s address as such address appears on the books of the Corporation.

8.58 “Redemption Price” means each of the Optional Redemption Price, the Fundamental Change Redemption Price and the Mandatory Redemption Price, as the case may be.

8.59 “Related Entity” means, with respect to any Person, (i) if such Person is an “ultimate parent entity,” as defined in the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations promulgated thereunder, each direct or indirect subsidiary of such Person and (ii) if such Person is not an “ultimate parent entity,” as defined in such Act and such regulations, each ultimate parent entity (as so defined) of such Person and each other Person which is a direct or indirect subsidiary of any such ultimate parent entity.

8.60 “Required Initial Holders” means the TCP Securityholders (as such term is defined in the Governance Agreement) as of the Certificate Date that hold Series D Warrants as of the Certificate Date, so long as such TCP Securityholders are the beneficial and record owners, as of any date of determination, of a majority of the shares of Series C Preferred Stock outstanding on such date of determination.

8.61 “Restricted Securities” means (i) the shares of Series C Preferred Stock issued by the Corporation on or after the Issue Date other than as Preferred Dividends, (ii) the shares of Series C Preferred Stock and other securities issued by the Corporation as Preferred Dividends on the shares of Series C Preferred Stock referred to in clause (i), and (iii) the shares of Common Stock and other securities issued by the Corporation upon the conversion of the shares of Series C Preferred Stock referred to in clauses (i) and (ii).

8.62 “Restricted Securities Legend” means the following legend:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS AND ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT

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AND SUCH LAWS. THE SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN A TRANSACTION OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS.

8.63 “Senior Securities” has the meaning specified in Section 3.1(c).

8.64 “Series A Certificate of Designation” means the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series A Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof, as amended from time to time unless otherwise specified in this Certificate of Designation.

8.65 “Series A Preferred Stock” means the 8% Series A Convertible Redeemable Preferred Stock of the Corporation authorized in the Series A Certificate of Designation.

8.66 “Series A Warrant Agreement” means the Warrant Agreement, dated as of October 29, 2002, between the Corporation and Mellon Investor Services LLC, as Warrant Agent, as amended from time to time, so long as no amendment to such Warrant Agreement after the Certificate Date shall increase the number of warrants issuable pursuant thereto.

8.67 “Series B Certificate of Designation” means the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series B Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof, as amended from time to time unless otherwise specified in this Certificate of Designation.

8.68 “Series B Preferred Stock” means the 8% Series B Convertible Redeemable Preferred Stock of the Corporation authorized in the Series B Certificate of Designation.

8.69 “Series B Warrant Agreement” means the Warrant Agreement, dated as of October 6, 2003, between the Corporation and Mellon Investor Services LLC, as Warrant Agent, as amended from time to time, so long as no amendment to such Warrant Agreement after the Certificate Date shall increase the number of warrants issuable pursuant thereto.

8.70 “Series C Preferred Stock” means the 8% Series C Convertible Redeemable Preferred Stock of the Corporation authorized in this Certificate of Designation.

8.71 “Series C Warrant Agreement” means the Warrant Agreement, dated as of March 29, 2005, between the Corporation and Mellon Investor Services LLC, as Warrant

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Agent, as amended from time to time, so long as no amendment to such Warrant Agreement after the Certificate Date shall increase the number of warrants issuable pursuant thereto.

8.72 “Series D Warrant Agreement” means the Warrant Agreement, dated as of July 26, 2005, between the Corporation and Mellon Investor Services LLC, as Warrant Agent, as amended from time to time, so long as no amendment to such Warrant Agreement after the Certificate Date shall increase the number of warrants issuable pursuant thereto.

8.73 “Series D Warrant Exercise Price” means the Exercise Price as defined in, and in effect under, the Series D Warrant Agreement as of the Initial Exercise Date.

8.74 “Series D Warrant Issue Date” means the first date on which the Series D Warrants are issued.

8.75 “Series D Warrants” means the warrants to purchase Series C Preferred Stock and Common Stock issued by the Corporation pursuant to the Series D Warrant Agreement.

8.76 “TCP Directors” means, as of any date, the directors serving on the Board of Directors on such date pursuant to a designation made under the Governance Agreement by any one or more of the TCP Securityholders (as such term is defined in the Governance Agreement) or, if no such directors shall be so serving, the individuals who shall be designated by any one or more of the TCP Securityholders under the Governance Agreement to exercise observer rights with respect to meetings and actions of the Board of Directors and who shall be exercising such observer rights.

8.77 “Transaction Documents” means (i) the Governance Agreement, (ii) the Securities Purchase Agreement, dated as of July 26, 2005, as amended from time to time, among the Corporation and the other parties identified therein, (iii) the Series D Warrant Agreement and (iv) the Registration Rights Agreement, dated as of July 26, 2005, as amended from time to time, among the Corporation and the securityholders of the Corporation identified therein.

8.78 “Transfer Agent” means the Person duly appointed by the Corporation in its sole discretion to serve as transfer agent for the Series C Preferred Stock. The Corporation may serve as Transfer Agent.

8.79 “Transferee” means any Person that acquires assets of the Corporation in connection with any sale, conveyance, lease, exchange or transfer of such assets by the Corporation to or with such Person.

8.80 “Trigger Price” means, the price, rounded down to the nearest one one-hundredth (0.01) of a cent, equal to the quotient obtained by dividing (x) the Series D Warrant Exercise Price by (y) the Conversion Rate as of the Certificate Date; provided that if and whenever, from and after the Certificate Date, (i) the Conversion Rate shall be increased

35

pursuant to Section 4.2(d), the Trigger Price then in effect or then deemed to be in effect shall be proportionately reduced or (ii) the Conversion Rate shall be reduced pursuant to Section 4.2(d), the Trigger Price then in effect or then deemed to be in effect shall be proportionately increased.

8.81 “Warrant Agreement” means any of (i) the Series A Warrant Agreement, (ii) the Series B Warrant Agreement, (iii) the Series C Warrant Agreement or (iv) the Series D Warrant Agreement.

8.82 “Warrants” means (i) the warrants to purchase Common Stock issued by the Corporation pursuant to the Series A Warrant Agreement, (ii) the warrants to purchase Common Stock issued by the Corporation pursuant to the Series B Warrant Agreement, (iii) the warrants to purchase Common Stock issued by the Corporation pursuant to the Series C Warrant Agreement and (iv) the Series D Warrants; provided that (A) the warrants referred to in each of clauses (i) and (ii) have the same exercise expiration date and (subject to adjustments pursuant to antidilution provisions of the Series A Warrant Agreement or the Series B Warrant Agreement, as the case may be) the same exercise price as the warrants issued pursuant to the Series A Warrant Agreement or the Series B Warrant Agreement, as the case may be, which are outstanding as of the Certificate Date, (B) the warrants referred to in clause (iii) have the same exercise expiration date and (subject to adjustments pursuant to antidilution provisions of the Series C Warrant Agreement) the same exercise price as the warrants issued pursuant to the Series C Warrant Agreement which are outstanding as of the Certificate Date and (C) the Series D Warrants have the same exercise expiration date and (subject to adjustments pursuant to antidilution provisions and other exercise price adjustment provisions of the Series D Warrant Agreement) the same exercise price as the Series D Warrants which are outstanding on the Series D Warrant Issue Date.

9. Other Provisions

9.1 Status of Reacquired Shares

Shares of Series C Preferred Stock issued and redeemed or otherwise reacquired by the Corporation, including upon the conversion of such shares into Common Stock, shall be retired and canceled promptly after reacquisition thereof and, upon compliance with the applicable requirements of Delaware law, shall have the status of authorized but unissued shares of preferred stock of the Corporation undesignated as to series and may, with any and all other authorized but unissued shares of preferred stock of the Corporation, be designated or redesignated and issued or reissued, as the case may be, as part of any series of preferred stock of the Corporation.

9.2 Book-Entry Registration

Notwithstanding any other provision of this Certificate of Designation, the Corporation shall have the right to have its Series C Preferred Stock registered in book-entry or other

36

electronic form. In the event of such registration, to the extent permitted or required by the rules, regulations and practices of the applicable book-entry or other electronic system, or by other applicable law or regulation, the Series C Preferred Stock shall not be evidenced by physical stock certificates, and any actions required or permitted under this Certificate of Designation to be taken by the Corporation or any Holder of the Series C Preferred Stock with respect to such physical stock certificates shall, notwithstanding any other provision of this Certificate of Designation, be in compliance with this Certificate of Designation if taken in accordance with the rules, regulations and practices of the applicable book-entry or other electronic system and other applicable law or regulation.

9.3 Notices

All notices referred to in this Certificate of Designation shall, except as expressly provided herein, be deemed given in the manner and with the effect provided in the General Corporation Law of the State of Delaware.

9.4 Transfer Restrictions

Unless the Corporation otherwise instructs the Transfer Agent, (i) all certificates representing the Restricted Securities, and all certificates issued upon division or combination of, or in substitution for, such certificates shall bear a legend substantially in the form of the Restricted Securities Legend and (ii) the Transfer Agent shall not register any attempted transfer of Restricted Securities that is not effected in compliance with the requirements set forth in the Restricted Securities Legend. Whenever the restrictions imposed by this Section 9.4 shall terminate as to any securities, the Holder thereof shall be entitled to receive from the Corporation new certificates representing such securities that do not bear the Restricted Securities Legend.

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9.5 Beneficial Ownership

Upon request by the Corporation from time to time, each Initial Holder shall certify to the Corporation the number of shares of Series C Preferred Stock, if any, then beneficially owned by such Initial Holder and such Initial Holder’s Affiliates.

38

EXHIBIT A

Form of Conversion Notice

Dated: [            ]

The undersigned is the holder of record of [            ] shares of the 8% Series C Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”), of ITC^DeltaCom, Inc. (the “Corporation”). This Conversion Notice is provided pursuant to Section 4.1(b) of the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series C Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof (the “Certificate of Designation”). Capitalized terms not defined herein have the meanings given to such terms in the Certificate of Designation.

The undersigned hereby irrevocably elects to convert [            ] shares of Series C Preferred Stock represented by the enclosed certificate or certificates into shares of Common Stock at the Conversion Rate provided by the Certificate of Designation. The undersigned requests that certificates representing such Common Stock be registered in the name or names of the Persons set forth below for the number of shares of Common Stock issuable upon conversion of the number of shares of Series C Preferred Stock set forth beside such Person’s name below:

Shares of Series C
Preferred Stock
Name and Address
Taxpayer I.D. No./
Social Security No.

A-1

If the number of shares of Series C Preferred Stock that the undersigned is converting is fewer than all of the shares of Series C Preferred Stock represented by the enclosed certificate or certificates representing the Series C Preferred Stock converted hereby, the undersigned requests that new certificates representing the remaining shares of Series C Preferred Stock be registered in the name of the undersigned at the address set forth below:

Enclosed herewith are (1) written instruments of transfer, duly executed by the undersigned or the undersigned’s duly authorized legal representative, or in blank, and (2) transfer tax stamps or funds thereof, in each case, that are required pursuant to the Certificate of Designation.

Name: 

Signature: 

Address: 

Telephone no.:
Facsimile no.:
Note:	The above signature should correspond exactly with the name on the face of the enclosed Series C Preferred Stock certificates

A-2

ITC^DELTACOM, INC.

CERTIFICATE OF AMENDMENT

TO

CERTIFICATE OF DESIGNATION OF THE POWERS,

PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND

OTHER SPECIAL RIGHTS OF 8% SERIES C CONVERTIBLE

REDEEMABLE PREFERRED STOCK AND QUALIFICATIONS,

LIMITATIONS AND RESTRICTIONS THEREOF

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

ITC^DeltaCom, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, does hereby certify as follows:

1. That by resolution of the Transaction Committee of the Board of Directors of the Corporation (the “Board of Directors”) adopted on July 22, 2005, and by a Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series C Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof (the “Certificate of Designation”), filed in the office of the Secretary of State of the State of Delaware on October 24, 2005, the Corporation created, authorized and provided for the issuance of 28,000,000 shares of 8% Series C Convertible Redeemable Preferred Stock, par value $0.01 per share, of the Corporation (the “Series C Preferred Stock”) and established the powers, preferences and relative, participating, optional and other special rights and the qualifications, limitations or restrictions thereof.

2. No shares of the Series C Preferred Stock have been issued.

3. The Board of Directors has duly adopted the following resolutions in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware:

RESOLVED, that the following amendments to the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series C Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof (the “Certificate of Designation”) are hereby declared advisable and approved in all respects:

(1) Section 7.2(b) of the Certificate of Designation shall be amended by deleting the existing Section 7.2(b) thereof and inserting in lieu thereof a new Section 7.2(b), which shall read in its entirety as follows:

(b) The Corporation shall not authorize or issue, or increase the authorized amount of, any Parity Securities, including any additional shares of Series C Preferred Stock (other than (i) shares of Series A Preferred Stock or other securities issuable or payable as dividends on the Series A Preferred Stock and shares of Series A Preferred Stock issuable on or after the Certificate Date pursuant to or as provided in the Executive Employment Agreements and the Executive Benefit Plan or in connection with a stock split or similar transaction, in each case pursuant to the Series A Certificate of Designation as in effect on or prior to the Certificate Date, (ii) shares of Series B Preferred Stock or other securities issuable or payable as dividends on the Series B Preferred Stock and shares of Series B Preferred Stock issuable on or after the Certificate Date pursuant to or as provided in the Merger Agreement and the Executive Employment Agreements and the Executive Benefit Plan or in connection with a stock split or similar transaction, in each case pursuant to the Series B Certificate of Designation as in effect on or prior to the Certificate Date, and (iii) shares of Series C Preferred Stock issuable on or after the Issue Date upon the exercise or conversion of the Series D Warrants or in connection with a stock split or similar transaction and shares of Series C Preferred Stock issuable or payable as dividends on the Series C Preferred Stock, in each case pursuant to this Certificate of Designation), or any Senior Securities, or any security convertible into or exchangeable for any such Parity or Senior Securities (other than the Series D Warrants and the Preferred Stock Units), without (A) the affirmative vote or consent of the TCP Directors, if any, with respect to any such authorizations, issuances or increases referred to in this Section 7.2(b) that shall occur prior to the Issue Date, or (B) the affirmative vote or consent of Holders of the shares representing more than 50% of the voting power of the then outstanding shares of Series C Preferred Stock, voting or consenting, as the case may be, as one class, given in person or by proxy, either in writing or by means of electronic transmission, by resolutions adopted by consent or at an annual meeting of stockholders or at a special meeting of Holders of Series C Preferred Stock called for such purpose, with respect to any such authorizations, issuances or increases referred to in this Section 7.2(b) that shall occur from and after the Issue Date for so long as any shares of Series C Preferred Stock are outstanding.

(2) Section 8 of the Certificate of Designation shall be amended by adding thereto a new Section 8.28.1, which shall immediately follow Section 8.28 thereof and shall read in its entirety as follows:

8.28.1 “Executive Benefit Plan” means the ITC^DeltaCom, Inc. Executive Stock Incentive Plan, including the stock unit agreements evidencing grants thereunder, as amended as of December 20, 2005 and as further amended from time to time (provided that no such further amendment to such plan shall change the type or increase the amount of securities of the Corporation issuable thereunder without the affirmative vote or consent of the TCP Directors, if any, or, if there is then no TCP Director, the affirmative vote or consent of a majority of the authorized members of the Board of Directors who are not employees of the Corporation or any subsidiary thereof).

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(3) Section 8 of the Certificate of Designation shall be amended by deleting existing Section 8.29 thereof and inserting in lieu thereof a new Section 8.29, which shall read in its entirety as follows:

8.29 “Executive Employment Agreements” means (i) the Employment Agreement, dated as of February 3, 2005, between the Corporation and Randall E. Curran, as amended as of December 20, 2005 and as further amended from time to time (provided that no such further amendment to such Employment Agreement after December 20, 2005 shall change the type or increase the amount of securities of the Corporation issuable thereunder without the affirmative vote or consent of the TCP Directors, if any, or, if there is then no TCP Director, the affirmative vote or consent of a majority of the authorized members of the Board of Directors who are not employees of the Corporation or any subsidiary thereof), (ii) the Employment Agreement, dated as of February 21, 2005, between the Corporation and Richard E. Fish, Jr., as amended as of December 20, 2005 and as further amended from time to time (provided that no such further amendment to such Employment Agreement after December 20, 2005 shall change the type or increase the amount of securities of the Corporation issuable thereunder without the affirmative vote or consent of the TCP Directors, if any, or, if there is then no TCP Director, the affirmative vote or consent of a majority of the authorized members of the Board of Directors who are not employees of the Corporation or any subsidiary thereof), and (iii) the Employment Agreement, dated as of February 28, 2005, between the Corporation and James P. O’Brien as amended as of December 20, 2005 and as further amended from time to time (provided that no such further amendment to such Employment Agreement after December 20, 2005 shall change the type or increase the amount of securities of the Corporation issuable thereunder without the affirmative vote or consent of the TCP Directors, if any, or, if there is then no TCP Director, the affirmative vote or consent of a majority of the authorized members of the Board of Directors who are not employees of the Corporation or any subsidiary thereof).

(4) Section 8 of the Certificate of Designation shall be amended by adding thereto a new Section 8.53.1, which shall immediately follow Section 8.53 thereof and shall read in its entirety as follows:

8.53.1 “Preferred Stock Units” means the stock units that are issued pursuant to and as provided in the Executive Employment Agreements and the Executive Benefit Plan and that represent shares of the Series A Preferred Stock or shares of the Series B Preferred Stock.

[signature page follows]

3

IN WITNESS WHEREOF, this Certificate of Amendment to Certificate of Designation has been executed by the Corporation’s duly authorized officer this 22^nd day of December, 2005.

ITC^DELTACOM, INC.
By:	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Senior Vice President- Legal and Regulatory

ITC^DELTACOM, INC.

CERTIFICATE OF AMENDMENT

TO

SECOND AMENDED CERTIFICATE OF DESIGNATION OF THE POWERS,

PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND

OTHER SPECIAL RIGHTS OF 8% SERIES A CONVERTIBLE

REDEEMABLE PREFERRED STOCK AND QUALIFICATIONS,

LIMITATIONS AND RESTRICTIONS THEREOF

Pursuant to Section 242 of the

General Corporation Law of the State of Delaware

ITC^DeltaCom, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 242 thereof, does hereby certify as follows:

1. That by resolution of the Reorganization Committee of the Board of Directors of the Corporation (the “Board of Directors”) dated October 28, 2002, and by a Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series A Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof (this “Certificate of Designation”), filed in the office of the Secretary of State of the State of Delaware on October 29, 2002, the Corporation created, authorized and provided for the issuance of 665,000 shares of 8% Series A Convertible Redeemable Preferred Stock, par value $0.01 per share, of the Corporation and established the powers, preferences and relative, participating, optional and other special rights and the qualifications, limitations or restrictions thereof.

2. Pursuant to the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware, the Corporation duly adopted amendments to the Certificate of Designation and filed the Certificate of Designation as amended and restated in the office of the Secretary of State of the State of Delaware on October 6, 2003 and July 26, 2005.

3. The following amendments to the Certificate of Designation have been duly adopted in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

1. Amendment to Section 1.1. Section 1.1 of the Certificate of Designation shall be amended by deleting the third sentence thereof and inserting in lieu thereof a new sentence, which shall read in its entirety as follows:

The liquidation preference of the Series A Preferred Stock shall be $100.00 per share (the “Liquidation Preference”).

2. Amendment to Section 4.1. Section 4.1 of the Certificate of Designation shall be amended by deleting the existing Section 4.1 thereof and inserting in lieu thereof a new Section 4.1, which shall read in its entirety as follows:

4.1 Conversion Rights

(a) Immediately following the time at which this Certificate of Amendment shall become effective under the General Corporation Law of the State of Delaware, and subject to the other terms and conditions of this Section 4, 50.0% of the outstanding shares of Series A Preferred Stock (including fractional shares) held by each Holder of Series A Preferred Stock at such time shall be converted, without any action by the Corporation or such Holder, into that number of fully paid and non-assessable shares of Common Stock equal to the product of the number of shares of Series A Preferred Stock being so converted multiplied by the quotient of (i) the Liquidation Preference divided by (ii) the Conversion Price. The date and time of such conversion is hereinafter referred to as the “Conversion Time.”

(b) The conversion of the Series A Preferred Stock of a Holder into Common Stock pursuant to this Section 4.1 shall be subject to the following terms and conditions:

(i) As of the Conversion Time, each Holder of Series A Preferred Stock converted pursuant to this Section 4.1 shall be deemed to be the Holder of record of Common Stock issuable upon such conversion of such Series A Preferred Stock notwithstanding that the share register of the Corporation may then be closed or that certificates representing such Common Stock shall not then or thereafter be actually delivered to such Holder. From and after the Conversion Time, certificates which prior to the Conversion Time represented the shares of Series A Preferred Stock so converted shall represent the shares of Common Stock into which such shares of Series A Preferred Stock have been converted.

(ii) As of the Conversion Time, all rights with respect to the shares of Series A Preferred Stock so converted, including the rights, if any, to continue to accrue Preferred Dividends and receive notices, shall terminate, except the rights of Holders thereof to (A) receive certificates for the number of shares of Common Stock into which such shares of Series A Preferred Stock have been converted and (B) exercise the rights to which such Holders are entitled as Holders of Common Stock.

(iii) As promptly as reasonably practicable after the Conversion Time, the Corporation shall issue and deliver to each Holder of the shares of Series A Preferred Stock so converted a certificate or certificates representing the number of whole shares of Common Stock into which such shares of Series A Preferred Stock shall have been converted. The Corporation shall have the right to condition the delivery of such certificate or certificates to any Holder on such Holder’s compliance with clause (iv) of this Section 4.1(b).

(iv) As promptly as reasonably practicable after the Conversion Time, each Holder converting Series A Preferred Stock shall surrender to the Company such Holder’s certificates representing such converted Series A Preferred Stock, duly endorsed in blank or accompanied by proper instruments of transfer.

2

(v) All shares of Common Stock issuable upon conversion of the Series A Preferred Stock shall, upon issuance, be duly and validly issued, fully paid and non-assessable, free of all Liens and not subject to any preemptive rights.

(c) The Corporation shall make no adjustment or payment for, or have any other obligation with respect to, any Accumulated Dividends or Current Period Dividends accrued with respect to shares of Series A Preferred Stock in connection with or following the conversion of such shares.

(d) If the conversion of any shares of Series A Preferred Stock would result in the issuance of a fractional share of Common Stock, the Corporation, in its sole discretion, may (i) round such fractional share up to the nearest whole share of Common Stock or (ii) in lieu thereof pay a cash adjustment in respect of such fractional share in an amount equal to such fractional share multiplied by the Closing Price per share of Common Stock on the Business Day next preceding the date on which the Conversion Time occurs.

3. Amendment to Section 5. Section 5.3 of the Certificate of Designation shall be amended as follows:

(a) Existing Section 5.3(a)(i) thereof shall be amended by deleting such Section 5.3(a)(i) and inserting in lieu thereof a new Section 5.3(a)(i), which shall read in its entirety as follows:

(i) Notwithstanding anything in this Certificate of Designation to the contrary, in connection with the redemption of shares of Series A Preferred Stock contemplated by Article II to that certain Series A Preferred Stockholder Agreement, dated as of July 31, 2007, among the Corporation and each of the persons listed on the signature pages thereto (the “Stockholder Agreement”), shares of Series A Preferred Stock may be redeemed pursuant to Section 5.1(a) hereof without any advance notice to any Holder of such shares, and such redemption shall be at such time as the Board of Directors, or any duly authorized committee thereof, shall determine in accordance with the Stockholder Agreement, as may be amended from time to time. The provisions of Section 5.1(d) hereof shall not apply to any such redemption.

(b) Existing Section 5.3(a)(ii) thereof shall be amended by deleting such Section 5.3(a)(ii) and inserting in lieu thereof a new Section 5.3(a)(ii), which shall read in its entirety as follows:

(ii) The Corporation may require, by written notice, that on or before any Redemption Date, each Holder of shares of Series A Preferred Stock to be redeemed shall surrender the certificate or certificates representing such shares of Series A Preferred Stock (properly endorsed or assigned, or transferred, if the Corporation shall so require) to the Corporation or the Redemption Agent (if appointed) in the manner and at the place designated by the Corporation.

3

(c) Existing Section 5.3(a)(iii) thereof shall be amended by deleting such Section 5.3(a)(iii) and inserting in lieu thereof a new Section 5.3(a)(iii), which shall read in its entirety as follows:

(iii) On the Redemption Date or on the next Business Day thereafter, the Corporation or the Redemption Agent, as applicable, shall pay the full Redemption Price in cash to the Holder whose name appears on such certificate or certificates as the owner thereof.

(d) Existing Section 5.3(b) thereof shall be amended by deleting such Section 5.3(b) and inserting in lieu thereof a new Section 5.3(b), which shall read in its entirety as follows:

(b) Except as otherwise expressly provided in this Certificate of Designation, all rights (excluding the right to receive the Redemption Price) of the Holders of shares of Series A Preferred Stock so called for redemption shall cease from and after the Redemption Date (unless the Corporation shall fail to deliver the Redemption Price within one Business Day after the Redemption Date, in which case such rights shall not terminate at the Redemption Date).

(e) Existing Section 5.3(e) thereof shall be amended by deleting such Section 5.3(e) in its entirety.

4. Amendment to Section 8. Section 8 of the Certificate of Designation shall be amended by deleting existing Section 8.16 thereof and inserting in lieu thereof a new Section 8.16, which shall read in its entirety as follows:

8.16 “Conversion Price” means $5.77484278752148 per share of Common Stock.

[signature page follows]

4

IN WITNESS WHEREOF, this Certificate of Amendment to Certificate of Designation has been executed by the Corporation’s duly authorized officer this 31st day of July, 2007.

ITC^DELTACOM, INC.
By:	/s/ J. Thomas Mullis
	Name:	J. Thomas Mullis
	Title:	Senior Vice President-Legal and Regulatory

ITC^DELTACOM, INC.

CERTIFICATE OF AMENDMENT

TO

AMENDED CERTIFICATE OF DESIGNATION OF THE POWERS,

PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND

OTHER SPECIAL RIGHTS OF 8% SERIES B CONVERTIBLE

REDEEMABLE PREFERRED STOCK AND QUALIFICATIONS,

LIMITATIONS AND RESTRICTIONS THEREOF

Pursuant to Section 242 of the

General Corporation Law of the State of Delaware

ITC^DeltaCom, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 242 thereof, does hereby certify as follows:

1. That by resolution of the Board of Directors of the Corporation (the “Board of Directors”) adopted on July 3, 2003, and by a Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 8% Series B Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof (this “Certificate of Designation”), filed in the office of the Secretary of State of the State of Delaware on October 6, 2003, the Corporation created, authorized and provided for the issuance of 1,200,000 shares of 8% Series B Convertible Redeemable Preferred Stock, par value $0.01 per share, of the Corporation and established the powers, preferences and relative, participating, optional and other special rights and the qualifications, limitations or restrictions thereof.

2. Pursuant to the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware, the Corporation duly adopted amendments to the Certificate of Designation and filed the Certificate of Designation as amended and restated in the office of the Secretary of State of the State of Delaware on July 26, 2005.

3. The following amendments to the Certificate of Designation have been duly adopted in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

1. Amendment to Section 1.1. Section 1.1 of the Certificate of Designation shall be amended by deleting the third sentence thereof and inserting in lieu thereof a new sentence, which shall read in its entirety as follows:

The liquidation preference of the Series B Preferred Stock shall be $100.00 per share (the “Liquidation Preference”).

2. Amendment to Section 4.1. Section 4.1 of the Certificate of Designation shall be amended by deleting the existing Section 4.1 thereof and inserting in lieu thereof a new Section 4.1, which shall read in its entirety as follows:

4.1 Conversion Rights

(a) Immediately following the time at which this Certificate of Amendment shall become effective under the General Corporation Law of the State of Delaware, and subject to the other terms and conditions of this Section 4, all of the shares of Series B Preferred Stock (including fractional shares) of each Holder of Series B Preferred Stock shall be converted, without any action by the Corporation or such Holder, into that number of fully paid and non-assessable shares of Common Stock equal to the product of the number of shares of Series B Preferred Stock being so converted multiplied by the quotient of (i) the Liquidation Preference divided by (ii) the Conversion Price. The date and time of such conversion is hereinafter referred to as the “Conversion Time.”

(b) The conversion of the Series B Preferred Stock of a Holder into Common Stock pursuant to this Section 4.1 shall be subject to the following terms and conditions:

(i) As of the Conversion Time, each Holder of Series B Preferred Stock converted pursuant to this Section 4.1 shall be deemed to be the Holder of record of Common Stock issuable upon such conversion of such Series B Preferred Stock notwithstanding that the share register of the Corporation may then be closed or that certificates representing such Common Stock shall not then or thereafter be actually delivered to such Holder. From and after the Conversion Time, certificates which prior to the Conversion Time represented shares of Series B Preferred Stock shall represent the shares of Common Stock into which such shares of Series B Preferred Stock have been converted.

(ii) As of the Conversion Time, all rights with respect to the shares of Series B Preferred Stock so converted, including the rights, if any, to continue to accrue Preferred Dividends and receive notices, shall terminate, except the rights of Holders thereof to (A) receive certificates for the number of shares of Common Stock into which such shares of Series B Preferred Stock have been converted and (B) exercise the rights to which such Holders are entitled as Holders of Common Stock.

(iii) As promptly as reasonably practicable after the Conversion Time, the Corporation shall issue and deliver to each Holder of the shares of Series B Preferred Stock so converted a certificate or certificates representing the number of whole shares of Common Stock into which such shares of Series B Preferred Stock shall have been converted. The Corporation shall have the right to condition the delivery of such certificate or certificates to any Holder on such Holder’s compliance with clause (iv) of this Section 4.1(b).

(iv) As promptly as reasonably practicable after the Conversion Time, each Holder converting Series B Preferred Stock shall surrender to the Company such Holder’s certificates representing such converted Series B Preferred Stock, duly endorsed in blank or accompanied by proper instruments of transfer.

2

(v) All shares of Common Stock issuable upon conversion of the Series B Preferred Stock shall, upon issuance, be duly and validly issued, fully paid and non-assessable, free of all Liens and not subject to any preemptive rights.

(c) As of the Conversion Time, the right of the Corporation to redeem shares of Series B Preferred Stock shall terminate.

(d) The Corporation shall make no adjustment or payment for, or have any other obligation with respect to, any Accumulated Dividends or Current Period Dividends accrued with respect to shares of Series B Preferred Stock in connection with or following the conversion of such shares.

(e) If the conversion of any shares of Series B Preferred Stock would result in the issuance of a fractional share of Common Stock, the Corporation, in its sole discretion, may (i) round such fractional share up to the nearest whole share of Common Stock or (ii) in lieu thereof pay a cash adjustment in respect of such fractional share in an amount equal to such fractional share multiplied by the Closing Price per share of Common Stock on the Business Day next preceding the date on which the Conversion Time occurs.

3. Amendment to Section 8. Section 8 of the Certificate of Designation shall be amended by deleting existing Section 8.16 thereof and inserting in lieu thereof a new Section 8.16, which shall read in its entirety as follows:

8.16 “Conversion Price” means $5.17325725978605 per share of Common Stock.

[signature page follows]

3

IN WITNESS WHEREOF, this Certificate of Amendment to Certificate of Designation has been executed by the Corporation’s duly authorized officer this 31st day of July, 2007.

ITC^DELTACOM, INC.
By:	/s/ J. Thomas Mullis
	Name:	J. Thomas Mullis
	Title:	Senior Vice President-Legal and Regulatory

CERTIFICATE OF ELIMINATION

OF

8% SERIES C CONVERTIBLE REDEEMABLE PREFERRED STOCK

OF

ITC^DELTACOM, INC.

Pursuant to Section 151(g)

of the General Corporation Law

of the State of Delaware

ITC^DeltaCom, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), in accordance with the provisions of Section 151(g) of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies as follows:

1. That, pursuant to Section 151 of the DGCL and the authority granted in the Restated Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”), the Board of Directors of the Corporation (the “Board”), by resolution duly adopted, authorized the issuance of a series of 28,000,000 shares of 8% Series C Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”), and established the powers, designations, preferences and relative, participating and other rights, and the qualifications, limitations or restrictions thereof, and, on October 24, 2005, filed a Certificate of Designation (the “Certificate of Designation”) with respect to such Series C Preferred Stock in the office of the Secretary of State of the State of Delaware and, on December 22, 2005, filed a Certificate of Amendment to the Certificate of Designation in the office of the Secretary of State of the State of Delaware.

2. That no shares of the Series C Preferred Stock are outstanding and no shares thereof will be issued.

3. That the Board has adopted the following resolutions:

WHEREAS, by resolution of the Board and by a Certificate of Designation (the “Certificate of Designation”) filed in the office of the Secretary of State of the State of Delaware on October 24, 2005, the Corporation authorized the issuance of a series of 28,000,000 shares of 8% Series C Convertible Redeemable Preferred Stock, par value $0.01 per share, of the Corporation (the “Series C Preferred Stock”) and established the voting powers, designations, preferences and relative, participating and other rights, and the qualifications, limitations or restrictions thereof;

WHEREAS, no shares of such Series C Preferred Stock were issued by the Corporation;

WHEREAS, as of the date hereof, no shares of such Series C Preferred Stock are outstanding and no shares of such Series C Preferred Stock will be issued subject to the Certificate of Designation; and

WHEREAS, it is desirable that all matters set forth in the Certificate of Designation with respect to such Series C Preferred Stock be eliminated from the Restated Certificate of Incorporation, as heretofore amended and restated, of the Corporation (the “Certificate of Incorporation”);

NOW, THEREFORE, BE IT AND IT HEREBY IS

RESOLVED, that all matters set forth in the Certificate of Designation with respect to such Series C Preferred Stock be eliminated from the Certificate of Incorporation; and it is further

RESOLVED, that the officers of the Corporation be, and each of them hereby is, authorized and directed to file a Certificate with the office of the Secretary of State of the State of Delaware setting forth a copy of these resolutions whereupon all matters set forth in the Certificate of Designation with respect to such Series C Preferred Stock shall be eliminated from the Certificate of Incorporation.

4. That, accordingly, all matters set forth in the Certificate of Designation with respect to such Series C Preferred Stock be, and hereby are, eliminated from the Certificate of Incorporation.

[signature page follows]

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IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by its duly authorized officer as of this 31st day of July, 2007.

ITC^DELTACOM, INC.
By:	/s/ J. Thomas Mullis
	Name:	J. Thomas Mullis
	Title:	Senior Vice President-Legal and Regulatory

ITC^DELTACOM, INC.

CERTIFICATE OF DESIGNATION OF THE POWERS, PREFERENCES AND

RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF 6%

SERIES H CONVERTIBLE REDEEMABLE PREFERRED STOCK AND

QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

ITC^DeltaCom, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify that, pursuant to the authority conferred upon the board of directors of the Corporation (the “Board of Directors”) by the Corporation’s Restated Certificate of Incorporation, and pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors is authorized to issue preferred stock of the Corporation in one or more series, and that a duly authorized committee of the Board of Directors has duly approved and adopted the following resolution on July 30, 2007:

RESOLVED, that, pursuant to the authority vested in the Board of Directors by the Restated Certificate of Incorporation of the Corporation and in the Committee of Independent Directors (the “Committee”) by the Board of Directors, and pursuant to Section 151 of the General Corporation Law of the State of Delaware, the Committee hereby creates, authorizes and provides for the issuance of 6% Series H Convertible Redeemable Preferred Stock, par value $0.01 per share, consisting of 412,215 shares and having the powers, preferences and relative, participating, optional and other special rights and the qualifications, limitations and restrictions thereof that are set forth in the Restated Certificate of Incorporation and in this resolution as follows:

Section 1 Designation and Amount. There is hereby created out of the authorized and unissued shares of the preferred stock of the Corporation a series of preferred stock designated as the 6% Series H Convertible Redeemable Preferred Stock (the “Series H Preferred Stock”). The number of shares constituting the Series H Preferred Stock shall be 412,215, with a liquidation preference of $100.00 per share (the “Liquidation Preference”).

Section 2 Dividends and Distributions.

(a) Each share of Series H Preferred Stock shall be entitled to receive cash dividends in an amount equal to 6% per annum of the Liquidation Preference. Dividends with respect to each share of Series H Preferred Stock shall accrue and shall be cumulative, whether or not declared, from the date of issue of such share. In addition, each share of Series H Preferred Stock shall be entitled to receive any dividend or distribution of other property, if any, declared

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and paid by the Corporation on shares of the Corporation’s common stock, par value $0.01 per share (the “Common Stock”) during the applicable dividend period multiplied by the number equal to the number of shares of Common Stock into which each share of Series H Preferred Stock will be convertible in accordance with the conversion provisions set forth in Section 7(b) herein; provided, however, that no distribution shall be made to the holders of the Series H Preferred Stock in connection with the rights offering to holders of Common Stock to subscribe for additional shares of Common Stock for $3.03 per share (the “Rights Offering”) contemplated by the recapitalization transactions consummated on the date of the initial issuance of shares of Series H Preferred Stock.

(b) An amount equal to any accrued cash dividends with respect to a share of Series H Preferred Stock shall be paid to the holder of such share on the date such share is redeemed pursuant to Section 5 or converted into Common Stock pursuant to Section 7.

(c) Nothing herein contained shall in any way or under any circumstances be construed or deemed to require the Board of Directors to declare, or the Corporation to pay or set apart for payment, any dividends on shares of Series H Preferred Stock at any time, except to the extent of funds legally available therefor.

Section 3 Ranking. The Series H Preferred Stock shall, with respect to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation, rank senior to all classes of Common Stock and each other class of capital stock or series of preferred stock issued by the Corporation.

Section 4 Voting Rights. From and after the date of the initial issuance of the Series H Preferred Stock, for all matters submitted to a vote of the stockholders of the Corporation, the holders of each share of Series H Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such share of Series H Preferred Stock will be convertible in accordance with the conversion provisions set forth in Section 7(b) herein. The holders of the Series H Preferred Stock shall be given notice of any meeting of stockholders of which the holders of Common Stock are given notice in accordance with the bylaws of the Corporation. The holders of Series H Preferred Stock and the holders of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation, except as required by law or as provided in Sections 8 and 9 herein. Holders of Series H Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action, except as provided in Sections 8 and 9 herein. The holders of the Series H Preferred Stock shall be entitled to act by written consent.

Section 5 Redemption.

(a) Between the initial date of issuance of the shares of Series H Preferred Stock and the consummation of the Rights Offering if it occurs, shares of Series H Preferred Stock shall not be redeemable by the Corporation.

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(b) Four Business Days after the expiration of the Rights Offering (the “Rights Offering Redemption Date”), the Corporation, without further notice, shall use the entire cash proceeds received from subscribers for Common Stock in the Rights Offering (the “Redemption Proceeds”) to redeem outstanding shares of Series H Preferred Stock at a per share redemption price equal to the Liquidation Preference. In the event that fewer than all the outstanding shares of Series H Preferred Stock are able to be redeemed using the Redemption Proceeds, the shares to be redeemed shall be selected pro rata among the holders of outstanding shares. Notwithstanding anything to the contrary contained herein, shares of Series H Preferred Stock shall be redeemed only out of the Redemption Proceeds and the Corporation shall have no obligation to redeem any shares of Series H Preferred Stock out of any other corporate funds. Once a share of Series H Preferred Stock is redeemed, dividends will cease to accrue with respect to such share and all rights of the stockholder as a holder thereof, including the right to receive Common Stock upon conversion, shall cease. “Business Day” means any day other than a Saturday, a Sunday or any day on which the banking institutions in the City of New York or at a place payment is to be received are authorized by law, regulation or executive order to remain closed.

(c) From and after the Rights Offering Redemption Date, each share of Series H Preferred Stock redeemed shall represent only the right to receive its pro rata share of the Redemption Proceeds plus an amount equal to accrued dividends through the Rights Offering Redemption Date, which the Corporation shall deliver to the holder upon surrender of certificates for shares of Series H Preferred Stock.

Section 6 Reacquired Shares. Shares of Series H Preferred Stock purchased, redeemed or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares of Series H Preferred Stock upon their retirement and cancellation shall not be reissued as shares of Series H Preferred Stock and shall become authorized but unissued shares of preferred stock undesignated to a series and may be reissued as part of a new series of preferred stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.

Section 7 Conversion.

(a) Between the initial date of issuance of the Series H Preferred Stock and the earlier of (i) the Rights Offering Redemption Date, and (ii) January 31, 2008, the shares of Series H Preferred Stock shall not be convertible.

(b) On the Rights Offering Redemption Date each share of Series H Preferred Stock which is not redeemed on such date automatically and without the need for any further action by the holder or the Corporation shall be converted into 33 shares of Common Stock. If the Rights Offering Redemption Date has not occurred on or before January 31, 2008, each outstanding share of Series H Preferred Stock on January 31, 2008 automatically and without the need for any further action by the holder or the Corporation shall be converted into 33 shares of Common Stock, unless such date is extended by mutual agreement between the Corporation and a majority of the outstanding shares of the Series H Preferred Stock, in which event, such share of Series H

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Preferred Stock shall be converted into Common Stock on such extended date. Upon conversion of any share of Series H Preferred Stock, the certificate representing such share of Series H Preferred Stock shall automatically represent the number of shares of Common Stock into which such share of Series H Preferred Stock was converted.

(c) Upon conversion of a share of Series H Preferred Stock into Common Stock, the Corporation shall pay to the holder an amount equal to all accrued dividends with respect to that share.

(d) The Corporation at all times shall reserve and keep available for issuance upon the conversion of the Series H Preferred Stock such number of its authorized but unissued shares of Common Stock as shall from time to time be sufficient to permit the conversion of all outstanding shares of Series H Preferred Stock, and shall take all action required to increase the authorized number of shares of Common Stock if at any time there shall be insufficient authorized unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series H Preferred Stock.

(e) The issuance or delivery of certificates for Common Stock upon the conversion of shares of Series H Preferred Stock shall be made without charge to the converting holder of such shares for such certificates or for any tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the respective names of, or in such names as may be directed by, the holders of the shares converted; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the holder of the shares of Series H Preferred Stock converted, and the Corporation shall not be required to issue or deliver such certificate unless or until the person or persons requesting the issuance or delivery thereof shall have paid to the Corporation the amount of such tax or shall have established to the reasonable satisfaction of the Corporation that such tax has been paid.

Section 8 Amendment of the Certificate of Designation. So long as any shares of Series H Preferred Stock are outstanding, neither (a) this Certificate of Designation nor (b) the terms of the Common Stock purchase warrants initially issued on October 29, 2002 shall be amended in any manner without, in addition to any other vote required by law, the affirmative vote of the holders of a majority of the outstanding shares of Series H Preferred Stock, voting separately as a class.

Section 9 Special Voting Rights. In addition to any other vote required by law, the affirmative vote of the holders of a majority of the outstanding shares of Series H Preferred Stock, voting separately as a class, shall be required to authorize the Corporation to (a) declare, make, pay or set aside funds for the payment of dividends upon any other class of shares of the capital stock of the Corporation or (b) purchase or otherwise redeem any shares of any other class of shares of the capital stock of the Corporation; except, with respect to (a) and (b) above, pursuant to stock incentive plans of the Corporation existing on the date of the initial issuance of the shares of Series H Preferred Stock; provided, however, that the provisions of this Section 9

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shall not apply in respect of (i) the redemption of shares of the Corporation’s 8% Series A Convertible Redeemable Preferred Stock or (ii) the authorization or payment of any rights to acquire shares of Common Stock, both (i) and (ii) as contemplated by the Equity Purchase and Rights Offering Agreement dated July 16, 2007 by and among the Corporation and the purchasers listed on the signature pages thereto, as may be amended from time to time, and the transactions contemplated thereby.

IN WITNESS WHEREOF, this Certificate of Designation has been duly executed by the Corporation’s authorized Officer this 31st day of July, 2007.

ITC^DeltaCom, Inc.
By:	/s/ J. Thomas Mullis
	Name:	J. Thomas Mullis
	Title:	Senior Vice President – Legal and Regulatory

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EX-4.1

Exhibit 4.1

EX-10.1

Exhibit 10.1

FIRST LIEN CREDIT AGREEMENT

dated as of

July 31, 2007

among

INTERSTATE FIBERNET, INC.,

ITC^DELTACOM, INC.,

THE LENDERS PARTY HERETO

and

CREDIT SUISSE,

as Administrative Agent and Collateral Agent

CREDIT SUISSE SECURITIES (USA) LLC,

as Bookrunner and Lead Arranger

Table of Contents

	Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms	1
SECTION 1.02. Terms Generally	28
SECTION 1.03. Pro Forma Calculations	28
SECTION 1.04. Classification of Loans and Borrowings	29
ARTICLE II
The Credits
SECTION 2.01. Commitments	29
SECTION 2.02. Loans	29
SECTION 2.03. Borrowing Procedure	31
SECTION 2.04. Evidence of Debt; Repayment of Loans	32
SECTION 2.05. Fees	33
SECTION 2.06. Interest on Loans	34
SECTION 2.07. Default Interest	34
SECTION 2.08. Alternate Rate of Interest	35
SECTION 2.09. Termination and Reduction of Commitments	35
SECTION 2.10. Conversion and Continuation of Borrowings	35
SECTION 2.11. Repayment of Term Borrowings	37
SECTION 2.12. Optional Prepayment	38
SECTION 2.13. Mandatory Prepayments	39
SECTION 2.14. Reserve Requirements; Change in Circumstances	41
SECTION 2.15. Change in Legality	42
SECTION 2.16. Indemnity	43
SECTION 2.17. Pro Rata Treatment	43
SECTION 2.18. Sharing of Setoffs	43
SECTION 2.19. Payments	44
SECTION 2.20. Taxes	45
SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty to Mitigate	47
SECTION 2.22. Swingline Loans	48
SECTION 2.23. Letters of Credit	50
SECTION 2.24. Incremental Term Loans	54
SECTION 2.25. Increase in Revolving Credit Commitments	56

i

Table of Contents

(continued)

	Page
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers	57
SECTION 3.02. Authorization	58
SECTION 3.03. Enforceability	58
SECTION 3.04. Governmental Approvals	58
SECTION 3.05. Financial Statements	58
SECTION 3.06. No Material Adverse Change	59
SECTION 3.07. Title to Properties; Possession Under Leases	59
SECTION 3.08. Subsidiaries	60
SECTION 3.09. Litigation; Compliance with Laws	60
SECTION 3.10. Agreements	60
SECTION 3.11. Federal Reserve Regulations	60
SECTION 3.12. Investment Company Act	61
SECTION 3.13. Use of Proceeds	61
SECTION 3.14. Tax Returns	61
SECTION 3.15. No Material Misstatements	61
SECTION 3.16. Employee Benefit Plans	61
SECTION 3.17. Environmental Matters	62
SECTION 3.18. Insurance	62
SECTION 3.19. Security Documents	62
SECTION 3.20. Location of Real Property and Leased Premises	63
SECTION 3.21. Labor Matters	64
SECTION 3.22. Solvency	64
SECTION 3.23. Sanctioned Persons	64
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events	65
SECTION 4.02. First Credit Event	65
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Compliance with Laws; Businesses and Properties	69
SECTION 5.02. Insurance	69
SECTION 5.03. Taxes and Claims	70
SECTION 5.04. Financial Statements, Reports, etc	71
SECTION 5.05. Litigation and Other Notices	72
SECTION 5.06. Information Regarding Collateral	73

ii

Table of Contents

(continued)

	Page
SECTION 5.07. Maintaining Records; Access to Properties and Inspections; Maintenance of Ratings	73
SECTION 5.08. Use of Proceeds	74
SECTION 5.09. Employee Benefits	74
SECTION 5.10. Compliance with Environmental Laws	74
SECTION 5.11. Preparation of Environmental Reports	74
SECTION 5.12. Further Assurances	75
SECTION 5.13. Interest Rate Protection	75
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness	76
SECTION 6.02. Liens	78
SECTION 6.03. Sale and Lease-Back Transactions	80
SECTION 6.04. Investments, Loans and Advances	80
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions	82
SECTION 6.06. Restricted Payments; Restrictive Agreements	84
SECTION 6.07. Transactions with Affiliates	85
SECTION 6.08. Business of Holdings, Borrower and Subsidiaries	86
SECTION 6.09. Other Indebtedness and Agreements	86
SECTION 6.10. Capital Expenditures	87
SECTION 6.11. Interest Coverage Ratio	88
SECTION 6.12. Maximum Leverage Ratio	88
SECTION 6.13. Maximum First Lien Leverage Ratio	88
SECTION 6.14. Fiscal Year	89
SECTION 6.15. Certain Equity Securities	89
ARTICLE VII
Events of Default	89
ARTICLE VIII
The Administrative Agent and the Collateral Agent	92
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices	94
SECTION 9.02. Survival of Agreement	95

iii

Table of Contents

(continued)

	Page
SECTION 9.03. Binding Effect	95
SECTION 9.04. Successors and Assigns	95
SECTION 9.05. Expenses; Indemnity	100
SECTION 9.06. Right of Setoff	101
SECTION 9.07. Applicable Law	101
SECTION 9.08. Waivers; Amendment	102
SECTION 9.09. Interest Rate Limitation	103
SECTION 9.10. Entire Agreement	103
SECTION 9.11. WAIVER OF JURY TRIAL	103
SECTION 9.12. Severability	104
SECTION 9.13. Counterparts	104
SECTION 9.14. Headings	104
SECTION 9.15. Jurisdiction; Consent to Service of Process	104
SECTION 9.16. Confidentiality	105
SECTION 9.17. USA PATRIOT Act Notice	106
SECTION 9.18. Effect of Certain Inaccuracies	106

iv

Table of Contents

(continued)

			Page
SCHEDULES
Schedule 1.01(a)	-	Subsidiary Guarantors
Schedule 1.01(b)	-	Mortgaged Property
Schedule 1.01(c)	-	Competitors
Schedule 1.01(d)	-	Southern Assets
Schedule 2.01	-	Lenders and Commitments
Schedule 3.04	-	Governmental Approvals
Schedule 3.06	-	Disclosed Matters
Schedule 3.08	-	Subsidiaries
Schedule 3.09	-	Litigation
Schedule 3.14	-	Tax Returns
Schedule 3.17	-	Environmental Matters
Schedule 3.18	-	Insurance
Schedule 3.19(a)	-	UCC Filing Offices
Schedule 3.19(c)	-	Mortgage Filing Offices
Schedule 3.20(a)	-	Owned Real Property
Schedule 3.20(b)	-	Leased Real Property
Schedule 4.02(a)	-	Local Counsel
Schedule 6.01	-	Existing Indebtedness
Schedule 6.02	-	Existing Liens
Schedule 6.04	-	Existing Investments
Schedule 6.05	-	Asset Sales
Schedule 6.07	-	Affiliate Transactions
EXHIBITS
Exhibit A	-	Form of Administrative Questionnaire
Exhibit B	-	Form of Assignment and Acceptance
Exhibit C	-	Form of Borrowing Request
Exhibit D	-	Form of Guarantee and Collateral Agreement
Exhibit E	-	Form of Intercreditor Agreement
Exhibit F	-	Form of Mortgage
Exhibit G-1	-	Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
Exhibit G-2	-	Form of Local Counsel Opinion

v

FIRST LIEN CREDIT AGREEMENT dated as of July 31, 2007, among INTERSTATE FIBERNET, INC., a Delaware corporation (the “Borrower”), ITC^DELTACOM, INC., a Delaware corporation (“Holdings”), the Lenders (as defined in Article I), and CREDIT SUISSE, as administrative agent (in such capacity, the “Administrative Agent”) and as collateral agent (in such capacity, the “Collateral Agent”) for the Lenders.

The Borrower has requested the Lenders to extend credit in the form of (a) Term Loans (such term and each other capitalized term used but not defined in this introductory statement having the meaning given it in Article I) on the Closing Date, in an aggregate principal amount not in excess of $230,000,000, and (b) Revolving Loans at any time and from time to time prior to the Revolving Credit Maturity Date, in an aggregate principal amount at any time outstanding not in excess of $10,000,000. The Borrower has requested the Swingline Lender to extend credit, at any time and from time to time prior to the Revolving Credit Maturity Date, in the form of Swingline Loans, in an aggregate principal amount at any time outstanding not in excess of $2,500,000. The Borrower has requested the Issuing Bank to issue Letters of Credit, in an aggregate face amount at any time outstanding not in excess of $5,000,000, to support payment obligations incurred in the ordinary course of business by Holdings and its Subsidiaries. The proceeds of the Term Loans are to be used, together with the proceeds of term loans under the Second Lien Credit Agreement, the Equity Contributions and cash on hand at Holdings, solely (a) to consummate the Existing Debt Refinancing and (b) to pay fees and expenses in respect of the Transactions. The proceeds of the Revolving Loans and the Swingline Loans are to be used solely for general corporate purposes of the Borrower and its Subsidiaries.

The Lenders are willing to extend such credit to the Borrower, and the Issuing Bank is willing to issue Letters of Credit for the account of the Borrower, in each case on the terms and subject to the conditions set forth herein and in accordance with the terms of the Intercreditor Agreement. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms shall have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

“Adjusted LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum equal to the product of (a) the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.

“Administrative Agent Fees” shall have the meaning assigned to such term in Section 2.05(b).

“Administrative Questionnaire” shall mean an Administrative Questionnaire in the form of Exhibit A, or such other form as may be supplied from time to time by the Administrative Agent.

“Affiliate” shall mean, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified; provided, however, that, for purposes of Section 6.07, the term “Affiliate” shall also include any person that directly or indirectly owns 10% or more of the Voting Stock of the person specified. Without limiting the generality of the foregoing, (a) Affiliates of Welsh, Carson, Anderson & Stowe shall include Welsh, Carson, Anderson & Stowe VIII, L.P. and WCAS Capital Partners III, L.P. and (b) Affiliates of Tennenbaum Capital Partners, LLC shall include Special Value Opportunities Fund, LLC, Special Value Expansion Fund, LLC, Special Value Continuation Partners, LP, Special Value Absolute Return Fund, LLC, Special Value Bond Fund II, LLC and Tennenbaum Opportunities Partners, LP.

“Aggregate Consideration” shall mean, with respect to any Permitted Acquisition, the sum (without duplication) of (a) the aggregate amount of all cash paid (or to be paid) by Holdings, the Borrower or any of the Subsidiaries in connection with such Permitted Acquisition (excluding payments of fees and costs and expenses in connection therewith and the Net Equity Proceeds of a substantially concurrent issuance of Qualified Capital Stock of, or capital contribution to, Holdings used to fund such Permitted Acquisition) and all contingent cash purchase price, earn-out, non-compete and other similar cash obligations of Holdings, the Borrower and any of the Subsidiaries incurred and reasonably expected to be incurred in connection therewith (as determined by the board of directors of Holdings), (b) the aggregate principal amount of all Indebtedness assumed, incurred, refinanced and/or issued in connection with such Permitted Acquisition and (c) the fair market value (as determined by the board of directors of Holdings) of all other consideration paid or payable in connection with such Permitted Acquisition (excluding, for purposes of this clause (c), the fair market value of any Equity Interests of Holdings issued (or to be issued) as consideration in connection with such Permitted Acquisition).

“Aggregate Revolving Credit Exposure” shall mean the aggregate amount of the Lenders’ Revolving Credit Exposures.

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. If the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the Alternate Base Rate shall be determined without regard to clause (b) of the preceding sentence until the circumstances

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giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, as the case may be.

“Applicable Percentage” shall mean, for any day (a) with respect to any Eurodollar Term Loan, 4.00% per annum, (b) with respect to any ABR Term Loan, 3.00% per annum, (c) with respect to any Eurodollar Revolving Loan or ABR Revolving Loan, the applicable percentage set forth below under the caption “Eurodollar Spread—Revolving Loans” or “ABR Spread—Revolving Loans”, as the case may be, and (d) with respect to the Commitment Fee, the applicable percentage set forth below under the caption “Commitment Fee Percentage”, in each case under clauses (c) and (d) above based upon the Leverage Ratio as of the relevant date of determination:

Leverage Ratio	Eurodollar Spread-- Revolving Loans		ABR Spread--Revolving Loans		Commitment Fee Percentage
Category 1 (Leverage Ratio > 3.00:1.00)	4.00	%	3.00	%	0.50	%
Category 2 (Leverage Ratio >2.50:1.00 but £ 3.00:1.00)	3.75	%	2.75	%	0.50	%
Category 3 (Leverage Ratio £ 2.50:1.00)	3.50	%	2.50	%	0.50	%

Each change in the Applicable Percentage resulting from a change in the Leverage Ratio shall be effective with respect to all Loans and Letters of Credit outstanding on and after the date of delivery to the Administrative Agent of the financial statements and certificates required by Section 5.04(a) or (b) and Section 5.04(c), respectively, indicating such change until the date immediately preceding the next date of delivery of such financial statements and certificates indicating another such change. Notwithstanding the foregoing, until the Borrower shall have delivered the financial statements and certificates required by Section 5.04(a) or (b) and Section 5.04(c), respectively, covering a period of at least six full months after the Closing Date, the Leverage Ratio shall be deemed to be in Category 1 for purposes of determining the Applicable Percentage. In addition, (a) at any time during which the Borrower has failed to deliver the financial statements and certificates required by Section 5.04(a) or (b) and Section 5.04(c), respectively, or (b) at any time after the occurrence and during the continuance of an Event of Default, the Leverage Ratio shall be deemed to be in Category 1 for purposes of determining the Applicable Percentage.

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“Asset Sale” shall mean the sale, transfer or other disposition (by way of merger, casualty, condemnation or otherwise) by Holdings, the Borrower or any of the Subsidiaries to any person other than the Borrower or any Subsidiary Guarantor of (a) any Equity Interests of any of the Subsidiaries (other than (i) directors’ qualifying shares or (ii) issuances of Equity Interests by the Borrower to Holdings) or (b) any other assets of the Borrower or any of the Subsidiaries (other than (i) inventory or other operating assets (such as fiber or ducts) sold, leased or exchanged in the ordinary course of business, (ii) assets that are damaged, obsolete or worn out or scrap, (iii) leasehold interests that are no longer used or useful in the business of Holdings or any of its Subsidiaries, (iv) dispositions by means of trade-in of equipment used in the ordinary course of business, so long as such equipment is replaced, substantially concurrently, by like-kind equipment, (v) cash and Permitted Investments, in each case disposed of in the ordinary course of business, (vi) dispositions between or among Foreign Subsidiaries, (vii) Southern Assets and (viii) sales, transfers or other dispositions having a value not in excess of $1,000,000 in the aggregate in any fiscal year (provided, that, for purposes of calculating the amounts set forth in this clause (viii), any transaction or series of related transactions involving aggregate consideration of $50,000 or less may be excluded)).

“Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender and an assignee, and accepted by the Administrative Agent, in the form of Exhibit B or such other form as shall be approved by the Administrative Agent.

“Benefit Plan Exchange Offer” shall mean any transaction in which Holdings acquires and/or retires Equity Plan Securities in exchange for other Equity Plan Securities.

“Board” shall mean the Board of Governors of the Federal Reserve System of the United States of America.

“Board Designees” shall mean individuals whose nomination for election, appointment or election as directors of Holdings is effectuated pursuant to the Governance Agreement.

“Borrowing” shall mean (a) Loans of the same Class and Type made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect, or (b) a Swingline Loan.

“Borrowing Request” shall mean a request by the Borrower in accordance with the terms of Section 2.03 and substantially in the form of Exhibit C, or such other form as shall be approved by the Administrative Agent.

“BTI Telecom Notes” shall mean all obligations due or outstanding under or in connection with BTI Telecom Corp.’s 10.5% senior unsecured notes due 2007.

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“Business Day” shall mean any day other than a Saturday, Sunday or day on which banks in New York City are authorized or required by law to close; provided, however, that when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“Capital Expenditures” shall mean, for any period, the additions to property, plant and equipment and other capital expenditures of Holdings and its consolidated Subsidiaries that are (or should be) set forth in a consolidated statement of cash flows of Holdings for such period prepared in accordance with GAAP, whether such additions or expenditures are paid in cash or financed, but excluding (i) any such expenditure made to restore, replace or rebuild property to the condition of such property immediately prior to any damage, loss, destruction or condemnation of such property, to the extent such expenditure is made with insurance proceeds, condemnation awards or damage recovery proceeds relating to any such damage, loss, destruction or condemnation, (ii) expenditures for transactions permitted pursuant to Section 6.04 (other than Section 6.04(i)) and (iii) amounts reinvested in accordance with the definition of Net Cash Proceeds. For purposes of this definition, the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment or with insurance proceeds shall be included in Capital Expenditures only to the extent of the gross amount of such purchase price less the credit granted by the seller of such equipment for the equipment being traded in at such time or the amount of such proceeds, as the case may be.

“Capital Lease Obligations” of any person shall mean the obligations of such person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

A “Change in Control” shall be deemed to have occurred on any date if (a) a “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) other than the Permitted Investors becomes the “beneficial owner” (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act) of more than 35% of the total voting power of the Voting Stock of Holdings on a Fully Diluted Basis and such ownership represents a greater percentage of the total voting power of the Voting Stock of Holdings, on a Fully Diluted Basis, than the percentage of the total voting power of the Voting Stock of Holdings, on a Fully Diluted Basis, beneficially owned (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act) by the Permitted Investors on such date, (b) individuals who on the Closing Date constitute the board of directors of Holdings (together with any new directors whose appointment by the board of directors of Holdings or whose nomination by the board of directors of Holdings for election by the stockholders of Holdings was approved by a vote of at least a majority of the members of the board of directors then in office who either were members of the board of directors on the Closing Date or whose appointment or nomination for election was previously so

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approved) cease for any reason to constitute a majority of the members of the board of directors of Holdings then in office, (c) any change in control (or similar event, however denominated) with respect to Holdings or the Borrower shall occur under and as defined in any indenture or agreement in respect of Material Indebtedness to which Holdings or the Borrower is a party, or (d) Holdings shall cease to directly own, beneficially (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act) and of record, 100% of the issued and outstanding Equity Interests of the Borrower. For purposes of clause (b) of this definition, all Board Designees shall be deemed to be members of the board of directors of Holdings whose appointment or nomination for election was approved in the manner specified in such clause (b).

“Change in Law” shall mean (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.14, by any lending office of such Lender or by such Lender’s or Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term Loans, Other Term Loans or Swingline Loans and, when used in reference to any Commitment, refers to whether such Commitment is a Revolving Credit Commitment, Term Loan Commitment, Incremental Term Loan Commitment or Swingline Commitment.

“Closing Date” shall mean July 31, 2007.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

“Collateral” shall mean all the “Collateral” as defined in any Security Document and shall also include the Mortgaged Properties.

“Commitment” shall mean, with respect to any Lender, such Lender’s Revolving Credit Commitment, Term Loan Commitment, Incremental Term Loan Commitment and Swingline Commitment.

“Commitment Fee” shall have the meaning assigned to such term in Section 2.05(a).

“Common Stock” shall mean the common stock, par value $0.01 per share, of Holdings.

“Competitor” shall mean any person identified on Schedule 1.01(c) (or any Affiliate thereof) and any other person (or any Affiliate thereof) that engages primarily, or as one of its principal activities, in the business of providing competitive local exchange telecommunications services to business customers.

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“Confidential Information Memorandum” shall mean the Confidential Information Memorandum of the Borrower dated June 2007.

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such period (without giving effect to Net Transaction Costs or any extraordinary gains or losses) plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated interest expense for such period (including amortization of deferred financing fees and other original issue discount and banking fees, charges and commissions, including letter of credit fees and commitment fees), (ii) consolidated income tax expense for such period (including state single business unitary and similar taxes imposed in lieu of income taxes), (iii) all amounts attributable to depreciation and amortization for such period, (iv) non-cash charges for such period for asset impairment charges and other similar write-offs of long-term assets, restructuring charges, costs of exiting a facility and charges associated with equity compensation, and (v) any cash received in the current period associated with any amounts previously excluded from Consolidated EBITDA pursuant to clause (b)(ii) below, and minus (b) without duplication (i) cash payments made during such period on account of non-cash charges added to Consolidated Net Income pursuant to clause (a)(iv) above in a previous period (excluding cash payments made for non-cash charges incurred prior to the Closing Date) and (ii) to the extent included in determining such Consolidated Net Income, non-cash gains on sales or other dispositions of assets for such period, all determined on a consolidated basis in accordance with GAAP; provided that Consolidated EBITDA for the fiscal quarter ended (i) December 31, 2006, shall be deemed to be $16,358,100, (ii) March 31, 2007, shall be deemed to be $17,481,900 and (iii) June 30, 2007, shall be deemed to be $19,467,700.

“Consolidated Interest Expense” shall mean, for any period, the sum of (a) the interest expense (including imputed interest expense in respect of Capital Lease Obligations and Synthetic Lease Obligations) of Holdings and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, plus (b) any interest accrued during such period in respect of Indebtedness of Holdings or any Subsidiary that is required to be capitalized rather than included in consolidated interest expense for such period in accordance with GAAP; provided that Consolidated Interest Expense shall not include expenses for amortization of deferred financing or debt issuance costs or original issue discount. For purposes of the foregoing, interest expense shall be determined after giving effect to any net payments made or received by Holdings or any Subsidiary with respect to interest rate Hedging Agreements. For purposes of determining the Interest Coverage Ratio for the period of four consecutive quarters ended September 30, 2007, December 31, 2007, March 31, 2008, and June 30, 2008, Consolidated Interest Expense shall be deemed to be equal to (a) for the period ending September 30, 2007, the Consolidated Interest Expense for the two calendar months ended September 30, 2007, multiplied by six, (b) for the period ending December 31, 2007, the Consolidated Interest Expense for the two calendar months ended September 30, 2007 plus the fiscal quarter ended December 31, 2007, multiplied by 12/5, (c) for the period ending March 31, 2008, the Consolidated Interest Expense for the two calendar months ended September 30, 2007 plus the two consecutive fiscal quarters ended March 31, 2008 multiplied by 12/8 and (d) for the period ending June 30, 2008, the

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Consolidated Interest Expense for the two calendar months ended September 30, 2007 plus the three consecutive fiscal quarters ended June 30, 2008 multiplied by 12/11, respectively.

“Consolidated Net Income” shall mean, for any period, the net income or loss of Holdings and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by the Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or governmental regulation applicable to such Subsidiary, (b) the income of any person in which any other person (other than Holdings or a wholly owned Subsidiary or any director holding qualifying shares in accordance with applicable law) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to Holdings or a wholly owned Subsidiary by such person during such period, and (c) any gains attributable to sales of assets out of the ordinary course of business.

“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.

“Credit Event” shall have the meaning assigned to such term in Section 4.01.

“Credit Facilities” shall mean the revolving credit, swingline, letter of credit and term loan facilities provided for by this Agreement.

“Current Assets” shall mean, at any time, the consolidated current assets (other than cash and Permitted Investments) of Holdings and its Subsidiaries, determined in accordance with GAAP.

“Current Liabilities” shall mean, at any time, the consolidated current liabilities of Holdings and its Subsidiaries at such time, determined in accordance with GAAP, but excluding, without duplication, (a) the current portion of any long-term Indebtedness and (b) outstanding Revolving Loans and Swingline Loans.

“Default” shall mean any event or condition which upon notice, lapse of time or both would constitute an Event of Default.

“Defaulting Lender” shall mean any Revolving Credit Lender that has (a) defaulted in its obligation to make a Revolving Loan or to fund its participation in a Letter of Credit or Swingline Loan required to be made or funded by it hereunder, (b) notified the Administrative Agent or a Loan Party in writing that it does not intend to satisfy any such obligation or (c) become insolvent or the assets or management of which has been taken over by any Governmental Authority.

“Disclosed Matter” shall mean the existence or occurrence of any matter which has been disclosed by Holdings (a) on Schedule 3.06 hereto, (b) in any filing on Form 10-K, 10-Q or 8-K made with the Securities and Exchange Commission prior to July 31, 2007, or (c) in the Confidential Information Memorandum.

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“Disqualified Stock” shall mean any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable (other than for Qualified Capital Stock), pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than for Qualified Capital Stock), in whole or in part, or requires the payment of any cash dividend or any other scheduled cash payment constituting a return of capital, in each case at any time on or prior to the date that is 91 days after the Term Loan Maturity Date, or (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Equity Interest referred to in clause (a) above, in each case at any time prior to the date that is 91 days after the Term Loan Maturity Date.

“dollars” or “$” shall mean lawful money of the United States of America.

“Domestic Subsidiaries” shall mean all Subsidiaries incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia.

“Eligible Assignee” shall mean any commercial bank, insurance company, investment or mutual fund or other entity (but not any natural person) that is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as amended) that extends credit or invests in bank loans as one of its businesses; provided that (a) neither the Borrower nor any of its Affiliates nor (b) any Competitor shall be an Eligible Assignee.

“Environmental Laws” shall mean all former, current and future Federal, state, local and foreign laws (including common law), treaties, regulations, rules, ordinances, codes, decrees, judgments, legally binding directives and orders (including consent orders), in each case, relating to protection of the environment, natural resources, human health and safety or the presence, Release of, or exposure to, Hazardous Materials, or the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling or handling of, or the arrangement for such activities with respect to, Hazardous Materials.

“Environmental Liability” shall mean all liabilities, obligations, damages, losses, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including administrative oversight costs, natural resource damages and remediation costs), whether contingent or otherwise, arising out of or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release of any Hazardous Materials or (e) any contract or agreement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

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“Equity Contributions” shall mean, collectively, the issuance by Holdings of (a) Common Stock to investment funds constituting, Affiliated with or managed by Welsh, Carson, Anderson & Stowe, generating gross cash proceeds of not less than $21,000,000 and (b) 6% Series H Convertible Redeemable Preferred Stock to existing institutional shareholders (including H Partners, LP, Joshua Tree Capital Partners, LP, Trace Partners, LP and, if applicable, certain other purchasers), generating gross cash proceeds of not less than $41,200,000, in each case on the Closing Date.

“Equity Interests” shall mean shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any person, and any option, warrant or other right entitling the holder thereof to purchase or otherwise acquire any such equity interest.

“Equity Plan” shall mean any stock option, restricted stock, stock incentive, employee stock purchase, deferred compensation, profit sharing, defined benefit, defined contribution or other benefit plan of Holdings or any of its Subsidiaries and the related award agreements under each such plan.

“Equity Plan Securities” shall mean any Equity Interests of Holdings awarded, granted, sold or issued pursuant to any Equity Plan.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that, together with Holdings, is treated as a single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived), (b) prior to the effectiveness of the applicable provisions of the Pension Act, the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA) or, on and after the effectiveness of the applicable provisions of the Pension Act, any failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, in each case whether or not waived, (c) the filing pursuant to prior to, the effectiveness of the applicable provisions of the Pension Act, Section 412(d) of the Code or Section 303(d) of ERISA or, on and after the effectiveness of the applicable provisions of the Pension Act, Section 412(c) of the Code or Section 302(c) of ERISA, of an application for a waiver of the minimum funding standard with respect to any Plan, (d) on and after the effectiveness of the applicable provisions of the Pension Act, a determination that any Plan is, or is expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code), (e) the incurrence by Holdings or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan or the withdrawal or partial withdrawal of Holdings

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or any of its ERISA Affiliates from any Plan or Multiemployer Plan, (f) the receipt by Holdings or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (g) prior to the effectiveness of the applicable provisions of the Pension Act, the adoption of any amendment to a Plan that would require the provision of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, (h) the receipt by Holdings or any of its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from Holdings or any of its ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA or, on and after the effectiveness of the applicable provisions of the Pension Act, in endangered or critical status, within the meaning of Section 305 of ERISA, (i) the occurrence of a “prohibited transaction” with respect to which Holdings or any of the Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of the Code) or with respect to which the Borrower or any such Subsidiary could otherwise be liable or (j) any other event or condition with respect to a Plan or Multiemployer Plan that could result in liability of Holdings or any Subsidiary.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” shall have the meaning assigned to such term in Article VII.

“Excess Cash Flow” shall mean, for any fiscal year of Holdings, the excess of (a) the sum, without duplication, of (i) Consolidated EBITDA for such fiscal year and (ii) reductions to noncash working capital of Holdings and the Subsidiaries for such fiscal year (i.e., the decrease, if any, in Current Assets minus Current Liabilities from the beginning to the end of such fiscal year) over (b) the sum, without duplication, of (i) the amount of any Taxes payable in cash by Holdings and the Subsidiaries with respect to such fiscal year, (ii) Consolidated Interest Expense for such fiscal year paid in cash, (iii) Capital Expenditures made in cash in accordance with Section 6.10 during such fiscal year, except to the extent financed with the proceeds of Indebtedness, equity issuances, casualty proceeds, condemnation proceeds or other proceeds that would not be included in Consolidated EBITDA, (iv) permanent repayments of Indebtedness (other than mandatory prepayments of Loans under Section 2.13 and Voluntary Prepayments) made in cash by Holdings and the Subsidiaries during such fiscal year, but only to the extent that the Indebtedness so prepaid by its terms cannot be reborrowed or redrawn and such prepayments do not occur in connection with a refinancing of all or any portion of such Indebtedness, (v) additions to noncash working capital for such fiscal year (i.e., the increase, if any, in Current Assets minus Current Liabilities from the beginning to the end of such fiscal year), (vi) cash expenditures for investments, loans or advances made pursuant to Section 6.04(a) (in respect of investments in, and loans and advances to, Foreign Subsidiaries) or (f), in each case, except to the extent financed with the proceeds of Indebtedness, equity issuances, casualty proceeds, condemnation proceeds or other proceeds that would not be included in Consolidated EBITDA, (vii) cash expenses incurred in respect of Hedging Agreements, and (viii) cash expenditures and cash deposits made in connection with the Transactions.

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, as in effect on the date hereof.

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (a) above and (c) in the case of a Lender (other than an assignee pursuant to a request by the Borrower under Section 2.21(a)), any withholding tax that is imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Lender’s failure to comply with Sections 2.20(e) and 2.20(f), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.20(a).

“Existing Debt” shall mean, collectively, all obligations due or outstanding under or in connection with (a) the Borrower’s first lien senior secured notes due 2009, (b) the Borrower’s Second Amended and Restated Credit Agreement dated as of July 26, 2005, as amended through the Closing Date, (c) the Existing Third Lien Notes, (d) Business Telecom, Inc.’s 10% unsecured vendor notes due 2009 and (e) Holdings’ existing capital leases (except for capital leases identified on Schedule 6.01), in each case as in the effect immediately prior to the Transactions to occur on the Closing Date.

“Existing Debt Refinancing” shall mean the repayment in full of the Existing Debt (other than the Existing Third Lien Notes to be converted into Common Stock pursuant to the Transaction) and the irrevocable release of all Guarantees (if any) thereof and security (if any) therefor.

“Existing Third Lien Notes” shall mean the Borrower’s third lien senior secured notes due 2009.

“Federal Funds Effective Rate” shall mean, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

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“Fee Letter” shall mean the Fee Letter dated June 8, 2007, between Holdings, the Administrative Agent and Credit Suisse Securities (USA) LLC.

“Fees” shall mean the Commitment Fees, the Administrative Agent Fees, the L/C Participation Fees and the Issuing Bank Fees.

“Financial Officer” of any person shall mean the chief financial officer, principal accounting officer, treasurer or controller of such person.

“First Lien Debt” shall mean, at any date of determination, the outstanding Loans plus L/C Exposure (only to the extent drawn and not reimbursed).

“First Lien Leverage Ratio” shall mean, at any date of determination, the ratio of First Lien Debt on such date to Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended on or prior to such date. In any period of four consecutive fiscal quarters in which a Permitted Acquisition or Significant Asset Sale occurs, the First Lien Leverage Ratio shall be determined on a pro forma basis in accordance with Section 1.03.

“Foreign Lender” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.

“Fully Diluted Basis” shall mean, as of any date of determination, the sum of (a) the number of shares of Voting Stock outstanding as of such date of determination plus (b) the number of shares of Voting Stock issuable upon the exercise, conversion or exchange of all then-outstanding warrants, options, convertible capital stock or indebtedness, exchangeable capital stock or indebtedness, or other rights exercisable for or convertible or exchangeable into, directly or indirectly, shares of Voting Stock, whether at the time of issue or upon the passage of time or upon the occurrence of some future event, and whether or not in the money as of such date of determination.

“GAAP” shall mean United States generally accepted accounting principles applied on a consistent basis.

“Governance Agreement” shall mean the Amended and Restated Governance Agreement, dated as of July 26, 2005, among Holdings, WCAS Capital Partners III, L.P., Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS Information Partners, L.P., Special Value Absolute Bond Fund II, LLC, Special Value Absolute Return Fund, LLC, and the other parties thereto, from time to time, as amended.

“Governmental Authority” shall mean any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body.

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“Granting Lender” shall have the meaning assigned to such term in Section 9.04(i).

“Guarantee” of or by any person shall mean any obligation, contingent or otherwise, of such person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment of such Indebtedness or (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness; provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made (or, if less, the maximum amount of such primary obligation for which such person may be liable pursuant to the terms of the instrument evidencing such Guarantee) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such person is required to perform thereunder), as determined by such person in good faith.

“Guarantee and Collateral Agreement” shall mean the First Lien Guarantee and Collateral Agreement, substantially in the form of Exhibit D, among the Borrower, Holdings, the Subsidiaries party thereto and the Collateral Agent for the benefit of the Secured Parties.

“Guarantors” shall mean Holdings and the Subsidiary Guarantors.

“Hazardous Materials” shall mean (a) any petroleum products or byproducts and all other hydrocarbons, radon gas, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting substances and (b) any chemical, material, substance or waste that is prohibited, limited or regulated by or pursuant to any Environmental Law.

“Hedging Agreement” shall mean any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“Incremental Revolving Facility Amount” shall mean, at any time, the excess, if any, of (a) $25,000,000 over (b) the sum of (i) the aggregate increase in the Revolving Credit Commitments established prior to such time pursuant to Section 2.25 and (ii) the aggregate amount of all Incremental Term Loan Commitments established prior to such time pursuant to Section 2.24.

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“Incremental Term Borrowing” shall mean a Borrowing comprised of Incremental Term Loans.

“Incremental Term Lender” shall mean a Lender with an Incremental Term Loan Commitment or an outstanding Incremental Term Loan.

“Incremental Term Loan Amount” shall mean, at any time, the excess, if any, of (a) $25,000,000 over (b) the sum of (i) the aggregate amount of all Incremental Term Loan Commitments established prior to such time pursuant to Section 2.24 and (ii) the aggregate increase in Revolving Credit Commitments established prior to such time pursuant to Section 2.25.

“Incremental Term Loan Assumption Agreement” shall mean an Incremental Term Loan Assumption Agreement among, and in form and substance reasonably satisfactory to, the Borrower, the Administrative Agent and one or more Incremental Term Lenders.

“Incremental Term Loan Commitment” shall mean the commitment of any Lender, established pursuant to Section 2.24, to make Incremental Term Loans to the Borrower.

“Incremental Term Loan Maturity Date” shall mean the final maturity date of any Incremental Term Loan, as set forth in the applicable Incremental Term Loan Assumption Agreement.

“Incremental Term Loan Repayment Dates” shall mean the dates scheduled for the repayment of principal of any Incremental Term Loan, as set forth in the applicable Incremental Term Loan Assumption Agreement.

“Incremental Term Loans” shall mean Term Loans made by one or more Lenders to the Borrower pursuant to Section 2.01(b). Incremental Term Loans may be made in the form of additional Term Loans or, to the extent permitted by Section 2.24 and provided for in the relevant Incremental Term Loan Assumption Agreement, Other Term Loans.

“Indebtedness” of any person shall mean, without duplication, (a) all obligations of such person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such person upon which interest charges are customarily paid, (d) all obligations of such person under conditional sale or other title retention agreements relating to property or assets purchased by such person, (e) all obligations of such person issued or assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned by such person, whether or not the obligations secured thereby have been assumed, (g) all Guarantees by such person of Indebtedness of others, (h) all Capital Lease Obligations and Synthetic Lease Obligations of such person, (i) all

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reimbursement obligations of such person as an account party in respect of letters of credit and (j) all reimbursement obligations of such person in respect of bankers’ acceptances. The Indebtedness of any person shall include the Indebtedness of any partnership in which such person is a general partner, except to the extent that contractual provisions binding on the holder of such Indebtedness provide that such person is not liable therefor. Notwithstanding the foregoing, the Indebtedness of Southern shall be deemed not to be Indebtedness of Holdings or any of its Subsidiaries solely by virtue of the existence of the Southern Liens.

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

“Intercreditor Agreement” shall mean the Intercreditor Agreement, substantially in the form of Exhibit E, among the Borrower, Holdings and Credit Suisse, as Collateral Agent and as the Second Lien Collateral Agent (as defined therein).

“Interest Coverage Ratio” shall mean, at any date of determination, for any period of four consecutive fiscal quarters, in each case taken as one accounting period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for such period.

“Interest Payment Date” shall mean (a) with respect to any ABR Loan (including any Swingline Loan), the last Business Day of each March, June, September and December, and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day that would have been an Interest Payment Date had successive Interest Periods of three months’ duration been applicable to such Borrowing.

“Interest Period” shall mean, with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the Borrower may elect; provided, however, that if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day. Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“Issuing Bank” shall mean, as the context may require, (a) Credit Suisse, acting through any of its Affiliates or branches, in its capacity as the issuer of Letters of Credit hereunder, and (b) any other Lender that may become an Issuing Bank pursuant to Section 2.23(i) or 2.23(k), with respect to Letters of Credit issued by such Lender. The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates or branches of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate or branch with respect to Letters of Credit issued by such Affiliate or branch.

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“Issuing Bank Fees” shall have the meaning assigned to such term in Section 2.05(c).

“L/C Commitment” shall mean the commitment of the Issuing Bank to issue Letters of Credit pursuant to Section 2.23.

“L/C Disbursement” shall mean a payment or disbursement made by the Issuing Bank pursuant to a Letter of Credit.

“L/C Exposure” shall mean at any time the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time and (b) the aggregate amount of all L/C Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The L/C Exposure of any Revolving Credit Lender at any time shall equal its Pro Rata Percentage of the aggregate L/C Exposure at such time.

“L/C Participation Fee” shall have the meaning assigned to such term in Section 2.05(c).

“Lenders” shall mean (a) the persons listed on Schedule 2.01 (other than any such person that has ceased to be a party hereto pursuant to an Assignment and Acceptance) and (b) any person that has become a party hereto pursuant to an Assignment and Acceptance. Unless the context clearly indicates otherwise, the term “Lenders” shall include the Swingline Lender.

“Letter of Credit” shall mean any letter of credit issued pursuant to Section 2.23.

“Leverage Ratio” shall mean, at any date of determination, the ratio of Total Debt on such date to Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended on or prior to such date. In any period of four consecutive fiscal quarters in which a Permitted Acquisition or Significant Asset Sale occurs, the Leverage Ratio shall be determined on a pro forma basis in accordance with Section 1.03.

“LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any Interest Period, the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the commencement of such Interest Period by reference to the British Bankers’ Association Interest Settlement Rates for deposits in dollars (as set forth by any service selected by the Administrative Agent that has been nominated by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rates) for a period equal to such Interest Period; provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the “LIBO Rate” shall be the interest rate per annum determined by the Administrative Agent to be the average of the rates per annum at which deposits in dollars are offered for such relevant Interest Period to major banks in the London interbank market in London, England by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the beginning of such Interest Period.

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“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Loan Documents” shall mean this Agreement, the Letters of Credit, the Security Documents, each Incremental Term Loan Assumption Agreement and the promissory notes, if any, executed and delivered pursuant to Section 2.04(e).

“Loan Parties” shall mean the Borrower and the Guarantors.

“Loans” shall mean the Revolving Loans, the Term Loans and the Swingline Loans.

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

“Material Adverse Effect” shall mean a materially adverse effect on (a) the business, assets, liabilities, operations, condition (financial or otherwise) or operating results of Holdings and the Subsidiaries, taken as a whole, (b) the ability of the Borrower or any other Loan Party to perform any of its obligations under any Loan Document to which it is or will be a party or (c) the rights and remedies of or benefits available to the Lenders under any Loan Document; provided that no Disclosed Matter shall constitute a Material Adverse Effect.

“Material Indebtedness” shall mean Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Hedging Agreements, of any one or more of Holdings, the Borrower or any Subsidiary in an aggregate principal amount exceeding $5,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of Holdings, the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that Holdings, the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.

“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.

“Mortgaged Properties” shall mean, initially, the owned real properties and leasehold and subleasehold interests of the Loan Parties specified on Schedule 1.01(b), and shall include each other parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.12.

“Mortgages” shall mean the mortgages, deeds of trust, leasehold mortgages, assignments of leases and rents, modifications and other security documents delivered pursuant to clause (i) of Section 4.02(h) or pursuant to Section 5.12, each substantially in the form of Exhibit F.

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“Multiemployer Plan” shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Cash Proceeds” shall mean (a) with respect to any Asset Sale, the cash proceeds (including cash proceeds subsequently received (as and when received) in respect of noncash consideration initially received), net of (i) selling expenses (including reasonable broker’s fees or commissions, legal fees, transfer and similar taxes and the Borrower’s good faith estimate of income taxes paid or payable in connection with such sale), (ii) amounts provided as a reserve, in accordance with GAAP, against any liabilities under any indemnification obligations or purchase price adjustment associated with such Asset Sale (provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Cash Proceeds) and (iii) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness for borrowed money which is secured by the asset sold in such Asset Sale and which is required to be repaid with such proceeds (other than any such Indebtedness assumed by the purchaser of such asset); provided, however, that, if (x) the Borrower shall deliver a certificate of a Financial Officer to the Administrative Agent at the time of receipt thereof setting forth the Borrower’s intent to reinvest such proceeds in productive assets of a kind then used or usable in the business of the Borrower and its Subsidiaries or to make capital expenditures in connection with the improvement of the capital assets of Holdings or any of its Subsidiaries within 180 days of receipt of such proceeds and (y) no Default or Event of Default shall have occurred and shall be continuing at the time of such certificate or at the proposed time of the application of such proceeds, such proceeds shall not constitute Net Cash Proceeds except to the extent not so used at the end of such 180-day period, at which time such proceeds shall be deemed to be Net Cash Proceeds; and (b) with respect to any issuance or incurrence of Indebtedness, the cash proceeds thereof, net of all taxes and customary fees, commissions, costs and other expenses incurred in connection therewith.

“Net Equity Proceeds” shall mean, with respect to each issuance or sale of any Qualified Capital Stock of Holdings or any capital contribution to Holdings, the cash proceeds (net of underwriting discounts and commissions and other costs associated therewith; including those of attorneys, accountants and other professionals) received by Holdings from the sale or issuance of such Qualified Capital Stock or from such capital contribution.

“Net Transaction Costs” shall mean (i) any income or expense amounts recorded in connection with or required to be recorded to give effect to the Transactions, the Rights Offering and the redemption, repayment or conversion of Holdings’ 6% Series H Convertible Redeemable Preferred Stock or (ii) any cash proceeds or expenditures related to the Transactions, the Rights Offering and the redemption, repayment or conversion of Holdings’ 6% Series H Convertible Redeemable Preferred Stock, whether such amounts pursuant to (i) or (ii) occurred prior to, on, or after the Closing Date.

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“Obligations” shall mean all obligations defined as “Obligations” in the Guarantee and Collateral Agreement and the other Security Documents.

“Other Taxes” shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.

“Other Term Loans” shall have the meaning assigned to such term in Section 2.24(a).

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

“Pension Act” shall mean the Pension Protection Act of 2006, as amended from time to time.

“Perfection Certificate” shall mean the Perfection Certificate substantially in the form of Exhibit B to the Guarantee and Collateral Agreement.

“Permitted Acquisition” shall have the meaning assigned to such term in Section 6.04(h).

“Permitted Investments” shall mean:

(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b) obligations issued by any state of the United States of America or any municipality or other political subdivision of any such state or any public instrumentality thereof having, at the time of acquisition, the highest rating obtainable from any of S&P, Moody’s or Fitch Ratings, Inc.;

(c) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, a credit rating of at least “A-1” (or the then equivalent grade) from S&P or at least “P-1” (or the then equivalent grade) from Moody’s;

(d) investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, the Administrative Agent or any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

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(e) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria of clause (d) above;

(f) investments in “money market funds” within the meaning of Rule 2a-7 of the Investment Company Act of 1940, as amended, substantially all of whose assets are invested in investments of the type described in clauses (a) through (e) above;

(g) investments in so-called “auction rate” securities rated AAA or higher by S&P or Aaa or higher by Moody’s and which have a reset date not more than 90 days from the date of acquisition thereof; and

(h) other short-term investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in investments of a type analogous to the foregoing.

“Permitted Investors” shall mean Tennenbaum Capital Partners, LLC, Welsh, Carson, Anderson & Stowe, Credit Suisse Securities (Europe) Limited, and any of their respective Affiliates.

“Permitted Reorganizations” shall mean a corporate reorganization transaction or series of transactions approved by the Administrative Agent in its reasonable discretion pursuant to which certain business operations of BTI Telecom Corp. and its subsidiaries are combined with certain business operations of the Borrower, DeltaCom, Inc. and DeltaCom Information Systems, Inc. (whether accomplished by merger, share exchange, stock transfer, asset transfer or otherwise) for purposes of avoiding overlapping of certain interconnection agreements, certain duplicative fees and expenses, and otherwise streamlining the business and operations of Holdings and its Subsidiaries; provided, that, in addition to other reasonable conditions the Administrative Agent may require, (a) in the case of any merger or consolidation involving the Borrower, the Borrower shall be the surviving person, (b) the person formed by or surviving such merger or consolidation (if not Holdings) shall be a direct or indirect wholly owned Subsidiary of Holdings and if a Subsidiary Guarantor is a party thereto, the person formed by or surviving such merger or consolidation (if not Holdings or the Borrower) shall be a direct or indirect wholly owned Subsidiary Guarantor, (c) immediately after giving effect to such reorganization, on a pro forma basis, Holdings and its Subsidiaries, taken as a whole, shall have a net worth equal to or greater than the consolidated net worth of Holdings and its Subsidiaries, taken as a whole, immediately prior to such reorganization, and (d) such reorganization does not result in the Borrower or any of the Subsidiaries no longer being wholly owned, directly or indirectly, by Holdings.

“person” shall mean any natural person, corporation, business trust, joint venture, association, company, limited liability company, partnership, Governmental Authority or other entity.

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the

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Code or Section 302 of ERISA, and in respect of which Holdings or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Prime Rate” shall mean the rate of interest per annum determined from time to time by Credit Suisse as its prime rate in effect at its principal office in New York City and notified to the Borrower.

“Pro Rata Percentage” of any Revolving Credit Lender at any time shall mean the percentage of the Total Revolving Credit Commitment represented by such Lender’s Revolving Credit Commitment. In the event the Revolving Credit Commitments shall have expired or been terminated, the Pro Rata Percentages shall be determined on the basis of the Revolving Credit Commitments most recently in effect, giving effect to any subsequent assignments.

“Qualified Capital Stock” of any person shall mean any Equity Interest of such person that is not Disqualified Stock.

“Register” shall have the meaning assigned to such term in Section 9.04(d).

“Regulation T” shall mean Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“Regulation U” shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“Regulation X” shall mean Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“Related Fund” shall mean, with respect to any Lender that is a fund or commingled investment vehicle that invests in bank loans, any other fund that invests in bank loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“Related Parties” shall mean, with respect to any specified person, such person’s Affiliates and the respective directors, trustees, officers, employees, agents and advisors of such person and such person’s Affiliates.

“Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within or upon any building, structure, facility or fixture.

“Repayment Date” shall have the meaning assigned to such term in Section 2.11.

“Required Lenders” shall mean, at any time, Lenders having Loans (excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused Revolving Credit Commitments and Term Loan Commitments representing more than 50% of the sum of all Loans outstanding (excluding Swingline Loans), L/C Exposure, Swingline Exposure

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and unused Revolving Credit Commitments and Term Loan Commitments at such time; provided that the Revolving Loans, L/C Exposure, Swingline Exposure and unused Revolving Credit Commitments of any Defaulting Lender shall be disregarded in the determination of the Required Lenders at any time.

“Responsible Officer” of any person shall mean any executive officer or Financial Officer of such person and any other officer or similar official thereof responsible for the administration of the obligations of such person in respect of this Agreement.

“Restricted Indebtedness” shall mean Indebtedness of Holdings, the Borrower or any Subsidiary, the payment, prepayment, repurchase or defeasance of which is restricted under Section 6.09(b).

“Restricted Payment” shall mean any dividend or other distribution (whether in cash, securities or other property (other than Qualified Capital Stock)) with respect to any Equity Interests in Holdings, the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property (other than Qualified Capital Stock)), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in Holdings, the Borrower or any Subsidiary.

“Revolving Credit Borrowing” shall mean a Borrowing comprised of Revolving Loans.

“Revolving Credit Commitment” shall mean, with respect to each Lender, the commitment of such Lender to make Revolving Loans hereunder (and to acquire participations in Swingline Loans and Letters of Credit as provided for herein) as set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed its Revolving Credit Commitment, as applicable, as the same may be (a) reduced from time to time pursuant to Section 2.09, (b) increased from time to time pursuant to Section 2.25 and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.

“Revolving Credit Exposure” shall mean, with respect to any Lender at any time, the aggregate principal amount at such time of all outstanding Revolving Loans of such Lender, plus the aggregate amount at such time of such Lender’s L/C Exposure, plus the aggregate amount at such time of such Lender’s Swingline Exposure.

“Revolving Credit Lender” shall mean a Lender with a Revolving Credit Commitment or an outstanding Revolving Loan.

“Revolving Credit Maturity Date” shall mean July 31, 2012.

“Revolving Loans” shall mean the revolving loans made by the Lenders to the Borrower pursuant to clause (b) of Section 2.01.

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“Rights Offering” shall mean the distribution of rights to purchase Common Stock to existing stockholders of Common Stock and other transactions described in that certain Equity Purchase and Rights Offering Agreement, dated as of July 31, 2007, by and among the purchasers party thereto and Holdings, and in amendments modifications or supplements thereto which are not materially adverse to the interests of the Lenders.

“Second Lien Credit Agreement” shall mean the Second Lien Credit Agreement dated as of the date hereof (as amended, supplemented or otherwise modified from time to time), among the Borrower, Holdings, the lenders from time to time party thereto, and Credit Suisse, as administrative agent and as collateral agent.

“Second Lien Loan Documents” shall have the meaning assigned to the term “Loan Documents” in the Second Lien Credit Agreement.

“Second Priority Liens” shall have the meaning assigned to such term in the Intercreditor Agreement.

“Secured Parties” shall have the meaning assigned to such term in the Guarantee and Collateral Agreement.

“Security Documents” shall mean the Mortgages, the Guarantee and Collateral Agreement, the Intercreditor Agreement and each of the security agreements, mortgages and other instruments and documents executed and delivered pursuant to any of the foregoing or pursuant to Section 5.09.

“Significant Asset Sale” shall mean the sale, transfer, lease or other disposition by Holdings or any Subsidiary to any person other than the Borrower or a Subsidiary Guarantor of all or substantially all of the assets of, or a majority of the Equity Interests in, a person, or a division or line of business or other business unit of a person.

“Southern” shall mean Southern Telecom Inc. and its affiliates described on Schedule 1.01(d).

“Southern Assets” shall mean the fiber and related rights and assets owned or to be owned by Southern or in which Southern has a security interest described on Schedule 1.01(d), in each case, pursuant to the Southern Company Agreement.

“Southern Company Agreement” shall mean the Revised and Restated Fiber Optic Facilities and Services Agreement, dated as of June 9, 1995 (as amended, supplemented, renewed, replaced, or otherwise modified from time to time), among Southern Development and Investment Group, Inc., on behalf of itself and as agent for Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Electric Generating Company and Southern Company Services, Inc., and MPX Systems, Inc., which was assigned in part by MPX Systems, Inc. to Gulf States FiberNet pursuant to an assignment dated as of July 25, 1995.

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“Southern Lien” shall mean the Lien or Liens on the Southern Assets described on Schedule 1.01(d).

“SPC” shall have the meaning assigned to such term in Section 9.04(i).

“S&P” shall mean Standard & Poor’s Ratings Service, or any successor thereto.

“Statutory Reserves” shall mean a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board and any other banking authority, domestic or foreign, to which the Administrative Agent or any Lender (including any branch, Affiliate or other fronting office making or holding a Loan) is subject for Eurocurrency Liabilities (as defined in Regulation D of the Board). Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities (as defined in Regulation D of the Board) and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“subsidiary” shall mean, with respect to any person (herein referred to as the “parent”), any corporation, partnership, limited liability company, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interests are, at the time any determination is being made, owned, Controlled or held, or (b) that is, at the time any determination is made, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“Subsidiary” shall mean any subsidiary of the Borrower or Holdings.

“Subsidiary Guarantor” shall mean each Subsidiary listed on Schedule 1.01(a), and each other Subsidiary that is or becomes a party to the Guarantee and Collateral Agreement.

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make loans pursuant to Section 2.22, as the same may be reduced from time to time pursuant to Section 2.09.

“Swingline Exposure” shall mean at any time the aggregate principal amount at such time of all outstanding Swingline Loans. The Swingline Exposure of any Revolving Credit Lender at any time shall equal its Pro Rata Percentage of the aggregate Swingline Exposure at such time.

“Swingline Lender” shall mean Credit Suisse, acting through any of its Affiliates or branches, in its capacity as lender of Swingline Loans hereunder.

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“Swingline Loan” shall mean any loan made by the Swingline Lender pursuant to Section 2.22.

“Synthetic Lease” shall mean, as to any person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) (a) that is accounted for as an operating lease under GAAP and (b) in respect of which the lessee retains or obtains ownership of the property so leased for U.S. federal income tax purposes, other than any such lease under which such person is the lessor.

“Synthetic Lease Obligations” shall mean, as to any person, an amount equal to the capitalized amount of the remaining lease payments under any Synthetic Lease that would appear on a balance sheet of such person in accordance with GAAP if such obligations were accounted for as Capital Lease Obligations.

“Synthetic Purchase Agreement” shall mean any swap, derivative or other agreement or combination of agreements pursuant to which Holdings, the Borrower or any Subsidiary is or may become obligated to make (a) any payment in connection with a purchase by any third party from a person other than Holdings, the Borrower or any Subsidiary of any Equity Interest or Restricted Indebtedness or (b) any payment (other than on account of a permitted purchase by it of any Equity Interest or Restricted Indebtedness) the amount of which is determined by reference to the price or value at any time of any Equity Interest or Restricted Indebtedness; provided that no phantom stock or similar plan or any Equity Plan providing for payments only to current or former directors, officers or employees of Holdings, the Borrower or the Subsidiaries (or to their heirs or estates) shall be deemed to be a Synthetic Purchase Agreement.

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

“Term Borrowing” shall mean a Borrowing comprised of Term Loans.

“Term Lender” shall mean a Lender with a Term Loan Commitment or an outstanding Term Loan.

“Term Loan Commitment” shall mean, with respect to each Lender, the commitment of such Lender to make Term Loans hereunder as set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed its Term Loan Commitment, as applicable, as the same may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The aggregate amount of the Term Loan Commitments as of the Closing Date is $230,000,000. Unless the context shall otherwise require, the term “Term Loan Commitments” shall include the Incremental Term Commitments.

“Term Loan Maturity Date” shall mean July 31, 2013.

“Term Loan Repayment Dates” shall mean the Repayment Dates and the Incremental Term Loan Repayment Dates.

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“Term Loans” shall mean the term loans made by the Lenders to the Borrower pursuant to clause (a) of Section 2.01. Unless the context shall otherwise require, the term “Term Loans” shall include any Incremental Term Loans.

“Total Debt” shall mean, at any time, the total Indebtedness of the Borrower and the Subsidiaries at such time (excluding (a) Indebtedness of the type described in clause (i) of the definition of such term, except to the extent of any unreimbursed drawings thereunder, and (b) intercompany Indebtedness).

“Total Revolving Credit Commitment” shall mean, at any time, the aggregate amount of the Revolving Credit Commitments, as in effect at such time. The initial Total Revolving Credit Commitment is $10,000,000.

“Transactions” shall mean, collectively, (a) the Equity Contributions, (b) the Existing Debt Refinancing, (c) the issuance of Common Stock to the holders of Holdings’ outstanding warrants originally issued on October 6, 2003 (the “Series B Warrants”) and warrants originally issued on March 29, 2005 (the “Series C Warrants”) in exchange for such Series B Warrants and Series C Warrants, (d) the issuance by Holdings of Common Stock or its 8% Series C Convertible Redeemable Preferred Stock to the holders of Holdings’ outstanding Series D Warrants (the “D Warrant Exercise”) pursuant to the exercise thereof, (e) the conversion into, or exchange for, shares of Common Stock of all the outstanding shares of Holdings’ 8% Series A Convertible Redeemable Preferred Stock, 8% Series B Convertible Redeemable Preferred Stock and, to the extent outstanding, 8% Series C Convertible Redeemable Preferred Stock (including the shares issued upon the D Warrant Exercise), (f) the conversion of approximately $48,500,000 in aggregate principal amount of Existing Third Lien Notes into shares of Common Stock (and all outstanding obligations in respect thereof, including all principal, premium and accrued and unpaid interest, fees and other amounts with respect thereto, being extinguished and all guarantees and security with respect thereto being released), (g) the execution, delivery and performance by the Loan Parties of the Loan Documents to which they are a party and the making of the Borrowings hereunder, (h) the execution, delivery and performance by the Loan Parties (as defined in the Second Lien Credit Agreement) of the Second Lien Loan Documents to which they are a party and the making of the Borrowings (as defined in the Second Lien Credit Agreement) thereunder, and (i) the payment of related fees and expenses.

“Type”, when used in respect of any Loan or Borrowing, shall refer to the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, the term “Rate” shall mean the Adjusted LIBO Rate and the Alternate Base Rate.

“USA PATRIOT Act” shall mean The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

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“Voluntary Prepayment” shall mean a prepayment of principal of Term Loans pursuant to Section 2.12 in any year to the extent that such prepayment reduces the scheduled installments of principal due in respect of Term Loans in any subsequent year.

“Voting Stock” shall mean, with respect to any person, Equity Interests of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such person.

“wholly owned Subsidiary” of any person shall mean a subsidiary of such person of which securities (except for directors’ qualifying shares) or other ownership interests representing 100% of the Equity Interests are, at the time any determination is being made, owned, Controlled or held by such person or one or more wholly owned Subsidiaries of such person or by such person and one or more wholly owned Subsidiaries of such person.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”; and the words “asset” and “property” shall be construed as having the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Except as otherwise expressly provided herein, (a) any reference in this Agreement to any Loan Document shall mean such document as amended, restated, supplemented or otherwise modified from time to time and (b) all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided, however, that if the Borrower notifies the Administrative Agent that the Borrower wishes to amend any covenant in Article VI or any related definition to eliminate the effect of any change in GAAP occurring after the date of this Agreement on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Article VI or any related definition for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders.

SECTION 1.03. Pro Forma Calculations. With respect to any period of four consecutive fiscal quarters during which any Permitted Acquisition or Significant Asset Sale occurs (and for purposes of determining whether an acquisition is a Permitted Acquisition under Section 6.04(h) or would result in a Default or an Event of Default),

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the Leverage Ratio and First Lien Leverage Ratio shall be calculated with respect to such period on a pro forma basis after giving effect to such Permitted Acquisition or Significant Asset Sale (including all pro forma adjustments permitted or required by Article 11 of Regulation S-X under the Securities Act of 1933, as amended; provided that all such adjustments shall be set forth in a reasonably detailed certificate of a Financial Officer of the Borrower), using, for purposes of making such calculations, the historical financial statements of the Borrower and the Subsidiaries which shall be reformulated as if such Permitted Acquisition or Significant Asset Sale, and any other Permitted Acquisitions and Significant Asset Sales that have been consummated during the period, had been consummated on the first day of such period.

SECTION 1.04. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a “Eurocurrency Revolving Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurocurrency Borrowing”) or by Class and Type (e.g., a “Eurocurrency Revolving Borrowing”).

ARTICLE II

The Credits

SECTION 2.01. Commitments. (a) Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, (i) to make a Term Loan to the Borrower on the Closing Date in a principal amount not to exceed its Term Loan Commitment, and (ii) to make Revolving Loans to the Borrower, at any time and from time to time after the date hereof, and until the earlier of the Revolving Credit Maturity Date and the termination of the Revolving Credit Commitment of such Lender in accordance with the terms hereof, in an aggregate principal amount at any time outstanding that will not result in such Lender’s Revolving Credit Exposure exceeding such Lender’s Revolving Credit Commitment. Within the limits set forth in clause (ii) of the preceding sentence and subject to the terms, conditions and limitations set forth herein, the Borrower may borrow, pay or prepay and reborrow Revolving Loans. Amounts paid or prepaid in respect of Term Loans may not be reborrowed.

(b) Each Lender having an Incremental Term Loan Commitment, severally and not jointly, hereby agrees, subject to the terms and conditions and relying upon the representations and warranties set forth herein and in the applicable Incremental Term Loan Assumption Agreement, to make Incremental Term Loans to the Borrower, in an aggregate principal amount not to exceed its Incremental Term Loan Commitment. Amounts paid or prepaid in respect of Incremental Term Loans may not be reborrowed.

SECTION 2.02. Loans. (a) Each Loan (other than Swingline Loans) shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their applicable Commitments; provided, however, that the failure of any Lender to make any Loan shall not in itself relieve any other Lender of its obligation to

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lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Loan required to be made by such other Lender). Except for Loans deemed made pursuant to Section 2.02(f), the Loans comprising any Borrowing shall be in an aggregate principal amount that is (i) an integral multiple of $100,000 and not less than $500,000 (except, with respect to any Incremental Term Borrowing, to the extent otherwise provided in the related Incremental Term Loan Assumption Agreement) or (ii) equal to the remaining available balance of the applicable Commitments.

(b) Subject to Sections 2.02(f), 2.08 and 2.15, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement. Borrowings of more than one Type may be outstanding at the same time; provided, however, that the Borrower shall not be entitled to request any Borrowing that, if made, would result in more than eight Eurodollar Borrowings outstanding hereunder at any time. For purposes of the foregoing, Borrowings having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Borrowings.

(c) Except with respect to Loans made pursuant to Section 2.02(f), each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds to such account in New York City as the Administrative Agent may designate not later than 1:00 p.m., New York City time, and the Administrative Agent shall promptly credit the amounts so received to an account designated by the Borrower in the applicable Borrowing Request or, if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Lenders.

(d) Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with paragraph (c) above and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If the Administrative Agent shall have so made funds available then, to the extent that such Lender shall not have made such portion available to the Administrative Agent, such Lender and the Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower to but excluding the date such amount is repaid to the Administrative Agent at (i) in the case of the Borrower, a rate per annum equal to the interest rate applicable at the time to the Loans comprising such Borrowing and (ii) in the case of such Lender, a rate determined by the Administrative Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error). If such Lender shall repay to the Administrative Agent such

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corresponding amount, such amount shall constitute such Lender’s Loan as part of such Borrowing for purposes of this Agreement, and the Borrower’s obligation to repay the Administrative Agent such corresponding amount pursuant to this Section 2.02(d) shall cease.

(e) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request any Revolving Credit Borrowing if the Interest Period requested with respect thereto would end after the Revolving Credit Maturity Date.

(f) If the Issuing Bank shall not have received from the Borrower the payment required to be made by Section 2.23(e) within the time specified in such Section, the Issuing Bank will promptly notify the Administrative Agent of the L/C Disbursement and the Administrative Agent will promptly notify each Revolving Credit Lender of such L/C Disbursement and its Pro Rata Percentage thereof. Each Revolving Credit Lender shall pay by wire transfer of immediately available funds to the Administrative Agent not later than 2:00 p.m., New York City time, on such date (or, if such Revolving Credit Lender shall have received such notice later than 12:00 (noon), New York City time, on any day, not later than 10:00 a.m., New York City time, on the immediately following Business Day), an amount equal to such Lender’s Pro Rata Percentage of such L/C Disbursement (it being understood that (i) if the conditions precedent to borrowing set forth in Sections 4.01(b) and (c) have been satisfied, such amount shall be deemed to constitute an ABR Revolving Loan of such Lender and, to the extent of such payment, the obligations of the Borrower in respect of such L/C Disbursement shall be discharged and replaced with the resulting ABR Revolving Credit Borrowing, and (ii) if such conditions precedent to borrowing have not been satisfied, then any such amount paid by any Revolving Credit Lender shall not constitute a Loan and shall not relieve the Borrower from its obligation to reimburse such L/C Disbursement), and the Administrative Agent will promptly pay to the Issuing Bank amounts so received by it from the Revolving Credit Lenders. The Administrative Agent will promptly pay to the Issuing Bank any amounts received by it from the Borrower pursuant to Section 2.23(e) prior to the time that any Revolving Credit Lender makes any payment pursuant to this paragraph (f); any such amounts received by the Administrative Agent thereafter will be promptly remitted by the Administrative Agent to the Revolving Credit Lenders that shall have made such payments and to the Issuing Bank, as their interests may appear. If any Revolving Credit Lender shall not have made its Pro Rata Percentage of such L/C Disbursement available to the Administrative Agent as provided above, such Lender and the Borrower severally agree to pay interest on such amount, for each day from and including the date such amount is required to be paid in accordance with this paragraph to but excluding the date such amount is paid, to the Administrative Agent for the account of the Issuing Bank at (i) in the case of the Borrower, a rate per annum equal to the interest rate applicable to Revolving Loans pursuant to Section 2.06(a), and (ii) in the case of such Lender, for the first such day, the Federal Funds Effective Rate, and for each day thereafter, the Alternate Base Rate.

SECTION 2.03. Borrowing Procedure. In order to request a Borrowing (other than a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f), as to which this Section 2.03 shall not apply), the Borrower shall notify the Administrative Agent of

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such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City time, three Business Days before a proposed Borrowing, and (b) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before a proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable, and shall be confirmed promptly by hand delivery or fax to the Administrative Agent of a written Borrowing Request and shall specify the following information: (i) whether the Borrowing then being requested is to be a Term Borrowing, an Incremental Term Borrowing or a Revolving Credit Borrowing, and whether such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing (provided that, until the Administrative Agent shall have notified the Borrower that the primary syndication of the Commitments has been completed (which notice shall be given as promptly as practicable and, in any event, within 30 days after the Closing Date), the Borrower shall not be permitted to request a Eurodollar Borrowing with an Interest Period other than one month); (ii) the date of such Borrowing (which shall be a Business Day); (iii) the number and location of the account to which funds are to be disbursed; (iv) the amount of such Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect thereto; provided, however, that, notwithstanding any contrary specification in any Borrowing Request, each requested Borrowing shall comply with the requirements set forth in Section 2.02. If no election as to the Type of Borrowing is specified in any such notice, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period with respect to any Eurodollar Borrowing is specified in any such notice, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. The Administrative Agent shall promptly advise the applicable Lenders of any notice given pursuant to this Section 2.03 (and the contents thereof), and of each Lender’s portion of the requested Borrowing.

SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender (i) the principal amount of each Term Loan of such Lender as provided in Section 2.11 and (ii) the then unpaid principal amount of each Revolving Loan of such Lender on the Revolving Credit Maturity Date. The Borrower hereby promises to pay to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the Revolving Credit Maturity Date.

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

(c) The Administrative Agent shall maintain accounts in which it will record (i) the amount of each Loan made hereunder, the Class and Type thereof and, if applicable, the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from the Borrower or any Guarantor and each Lender’s share thereof.

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(d) The entries made in the accounts maintained pursuant to paragraphs (b) and (c) above shall be prima facie evidence of the existence and amounts of the obligations therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrower to repay the Loans in accordance with their terms.

(e) Any Lender may request that Loans made by it hereunder be evidenced by a promissory note. In such event, the Borrower shall execute and deliver to such Lender a promissory note payable to such Lender and its registered assigns and in a form and substance reasonably acceptable to the Administrative Agent and the Borrower. Notwithstanding any other provision of this Agreement, in the event any Lender shall request and receive such a promissory note, the interests represented by such note shall at all times (including after any assignment of all or part of such interests pursuant to Section 9.04) be represented by one or more promissory notes payable to the payee named therein or its registered assigns.

SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Revolving Credit Lender (other than a Defaulting Lender for so long as, and with respect to the period during which, such Revolving Credit Lender is a Defaulting Lender), through the Administrative Agent, on the last Business Day of March, June, September and December in each year and on each date on which any Revolving Credit Commitment of such Lender shall expire or be terminated as provided herein, a commitment fee (a “Commitment Fee”) equal to the Applicable Percentage per annum on the daily unused amount of the Revolving Credit Commitment of such Lender during the preceding quarter (or other period commencing with the date hereof or ending with the Revolving Credit Maturity Date or the date on which the Revolving Credit Commitments of such Lender shall expire or be terminated). All Commitment Fees shall be computed on the basis of the actual number of days elapsed in a year of 360 days. For purposes of calculating Commitment Fees only, no portion of the Revolving Credit Commitments shall be deemed utilized as a result of outstanding Swingline Loans.

(b) The Borrower agrees to pay to the Administrative Agent, for its own account, the administrative fees set forth in the Fee Letter at the times and in the amounts specified therein (the “Administrative Agent Fees”).

(c) The Borrower agrees to pay (i) to each Revolving Credit Lender, through the Administrative Agent, on the last Business Day of March, June, September and December of each year and on the date on which the Revolving Credit Commitment of such Lender shall be terminated as provided herein, a fee (an “L/C Participation Fee”) calculated on such Lender’s Pro Rata Percentage of the daily aggregate L/C Exposure (excluding the portion thereof attributable to unreimbursed L/C Disbursements) during the preceding quarter (or shorter period commencing with the date hereof or ending with the Revolving Credit Maturity Date or the date on which all Letters of Credit have been canceled or have expired and the Revolving Credit Commitments of all Lenders shall have been terminated) at a rate per annum equal to the Applicable Percentage from time to time used to determine the interest rate on Revolving Credit Borrowings comprised of

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Eurodollar Loans pursuant to Section 2.06, and (ii) to the Issuing Bank with respect to each Letter of Credit (x) a fronting fee no greater than 0.25% per annum of the face amount of each Letter of Credit and (y) the standard issuance and drawing fees specified from time to time by the Issuing Bank (all fees in this clause (ii), collectively, the “Issuing Bank Fees”). All L/C Participation Fees and the Issuing Bank Fees referred to in clause (ii)(x) above shall be computed on the basis of the actual number of days elapsed in a year of 360 days.

(d) All Fees shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, if and as appropriate, among the Lenders, except that the Issuing Bank Fees shall be paid directly to the Issuing Bank. Once paid, none of the Fees shall be refundable under any circumstances unless an error was made in calculating any such Fees (as determined by, or demonstrated to the reasonable satisfaction of, the Administrative Agent).

SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section 2.07, the Loans comprising each ABR Borrowing, including each Swingline Loan, shall bear interest (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be, when the Alternate Base Rate is determined by reference to the Prime Rate and over a year of 360 days at all other times and calculated from and including the date of such Borrowing to but excluding the date of repayment thereof) at a rate per annum equal to the Alternate Base Rate plus the Applicable Percentage in effect from time to time.

(b) Subject to the provisions of Section 2.07, the Loans comprising each Eurodollar Borrowing shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Percentage in effect from time to time.

(c) Interest on each Loan shall be payable on the Interest Payment Dates applicable to such Loan except as otherwise provided in this Agreement. The applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or day within an Interest Period, as the case may be, shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.07. Default Interest. If the Borrower shall default in the payment of any principal of or interest on any Loan or any other amount due hereunder, by acceleration or otherwise, or under any other Loan Document, then, until such defaulted amount shall have been paid in full, to the extent permitted by law, all amounts outstanding under this Agreement and the other Loan Documents shall bear interest (after as well as before judgment), payable on demand, (a) in the case of principal, at the rate otherwise applicable to such Loan pursuant to Section 2.06 plus 2.00% per annum and (b) in all other cases, at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be, when determined by reference to the Prime Rate and over a year of 360 days at all other times) equal to the rate that would be applicable to an ABR Term Loan plus 2.00% per annum.

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SECTION 2.08. Alternate Rate of Interest. In the event, and on each occasion, that on the day two Business Days prior to the commencement of any Interest Period for a Eurodollar Borrowing the Administrative Agent shall have determined that dollar deposits in the principal amounts of the Loans comprising such Borrowing are not generally available in the London interbank market, or that the rates at which such dollar deposits are being offered will not adequately and fairly reflect the cost to any Lender of making or maintaining its Eurodollar Loan during such Interest Period, or that reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall, as soon as practicable thereafter, give written or fax notice of such determination to the Borrower and the Lenders. In the event of any such determination, until the Administrative Agent shall have advised the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, any request by the Borrower for a Eurodollar Borrowing pursuant to Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing. Each determination by the Administrative Agent under this Section 2.08 shall be conclusive absent manifest error.

SECTION 2.09. Termination and Reduction of Commitments. (a) The Term Loan Commitments (other than any Incremental Term Loan Commitments, which shall terminate as provided in the related Incremental Term Loan Assumption Agreement) shall automatically terminate upon the making of the Term Loans on the Closing Date. The Revolving Credit Commitments and the Swingline Commitment shall automatically terminate on the Revolving Credit Maturity Date. The L/C Commitment shall automatically terminate on the earlier to occur of (i) the termination of the Revolving Credit Commitments and (ii) the date 30 days prior to the Revolving Credit Maturity Date. Notwithstanding the foregoing, all the Commitments shall automatically terminate at 5:00 p.m., New York City time, on August 31, 2007, if the initial Credit Event shall not have occurred by such time.

(b) Upon at least three Business Days’ prior irrevocable written or fax notice to the Administrative Agent, the Borrower may at any time in whole permanently terminate, or from time to time in part permanently reduce, the Term Loan Commitments, the Revolving Credit Commitments or the Swingline Commitment; provided, however, that (i) each partial reduction of the Term Loan Commitments or the Revolving Credit Commitments shall be in an integral multiple of $500,000, (ii) each partial reduction of the Swingline Commitment shall be in an integral multiple of $100,000 and (iii) the Total Revolving Credit Commitment shall not be reduced to an amount that is less than the Aggregate Revolving Credit Exposure at the time.

(c) Each reduction in the Term Loan Commitments or the Revolving Credit Commitments hereunder shall be made ratably among the Lenders in accordance with their respective applicable Commitments. The Borrower shall pay to the Administrative Agent for the account of the applicable Lenders, on the date of each termination or reduction, the Commitment Fees on the amount of the Commitments so terminated or reduced accrued to but excluding the date of such termination or reduction.

SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower shall have the right at any time upon prior irrevocable notice to the Administrative Agent

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(a) not later than 12:00 (noon), New York City time, one Business Day prior to conversion, to convert any Eurodollar Borrowing into an ABR Borrowing, (b) not later than 12:00 (noon), New York City time, three Business Days prior to conversion or continuation, to convert any ABR Borrowing into a Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar Borrowing for an additional Interest Period, and (c) not later than 12:00 (noon), New York City time, three Business Days prior to conversion, to convert the Interest Period with respect to any Eurodollar Borrowing to another permissible Interest Period, subject in each case to the following:

(i) until the Administrative Agent shall have notified the Borrower that the primary syndication of the Commitments has been completed (which notice shall be given as promptly as practicable and, in any event, within 30 days after the Closing Date), no ABR Borrowing may be converted into a Eurodollar Borrowing with an Interest Period in excess of one month;

(ii) each conversion or continuation shall be made pro rata among the Lenders in accordance with the respective principal amounts of the Loans comprising the converted or continued Borrowing;

(iii) if less than all the outstanding principal amount of any Borrowing shall be converted or continued, then each resulting Borrowing shall satisfy the limitations specified in Sections 2.02(a) and 2.02(b) regarding the principal amount and maximum number of Borrowings of the relevant Type;

(iv) each conversion shall be effected by each Lender and the Administrative Agent by recording for the account of such Lender the new Loan of such Lender resulting from such conversion and reducing the Loan (or portion thereof) of such Lender being converted by an equivalent principal amount; accrued interest on any Eurodollar Loan (or portion thereof) being converted shall be paid by the Borrower at the time of conversion;

(v) if any Eurodollar Borrowing is converted at a time other than the end of the Interest Period applicable thereto, the Borrower shall pay, upon demand, any amounts due to the Lenders pursuant to Section 2.16;

(vi) any portion of a Borrowing maturing or required to be repaid in less than one month may not be converted into or continued as a Eurodollar Borrowing;

(vii) any portion of a Eurodollar Borrowing that cannot be converted into or continued as a Eurodollar Borrowing by reason of the immediately preceding clause shall be automatically converted at the end of the Interest Period in effect for such Borrowing into an ABR Borrowing;

(viii) no Interest Period may be selected for any Eurodollar Term Borrowing that would end later than a Term Loan Repayment Date occurring on or after the first day of such Interest Period if, after giving effect to such selection, the aggregate outstanding amount of (A) the Eurodollar Term Borrowings

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comprised of Term Loans or Other Term Loans, as applicable, with Interest Periods ending on or prior to such Term Loan Repayment Date and (B) the ABR Term Borrowings comprised of Term Loans or Other Term Loans, as applicable, would not be at least equal to the principal amount of Term Borrowings to be paid on such Term Loan Repayment Date; and

(ix) upon notice to the Borrower from the Administrative Agent given at the request of the Required Lenders, after the occurrence and during the continuance of a Default or Event of Default, no outstanding Loan may be converted into, or continued as, a Eurodollar Loan.

Each notice pursuant to this Section 2.10 shall be irrevocable and shall refer to this Agreement and specify (i) the identity and amount of the Borrowing that the Borrower requests be converted or continued, (ii) whether such Borrowing is to be converted to or continued as a Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice requests a conversion, the date of such conversion (which shall be a Business Day) and (iv) if such Borrowing is to be converted to or continued as a Eurodollar Borrowing, the Interest Period with respect thereto. If no Interest Period is specified in any such notice with respect to any conversion to or continuation as a Eurodollar Borrowing, the Borrower shall be deemed to have selected an Interest Period of one month’s duration. The Administrative Agent shall advise the Lenders of any notice given pursuant to this Section 2.10 and of each Lender’s portion of any converted or continued Borrowing. If the Borrower shall not have given notice in accordance with this Section 2.10 to continue any Borrowing into a subsequent Interest Period (and shall not otherwise have given notice in accordance with this Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the Interest Period applicable thereto (unless repaid pursuant to the terms hereof), automatically be continued into an ABR Borrowing.

SECTION 2.11. Repayment of Term Borrowings. (a) (i) The Borrower shall pay to the Administrative Agent, for the account of the Lenders, on the dates set forth below, or if any such date is not a Business Day, on the next preceding Business Day (each such date being called a “Repayment Date”), a principal amount of the Term Loans other than Other Term Loans (as adjusted from time to time pursuant to Sections 2.11(b), 2.12, 2.13(e) and 2.24(d)) equal to the amount set forth below for such date, together in each case with accrued and unpaid interest on the principal amount to be paid to but excluding the date of such payment:

Repayment Date	Amount
March 31, 2008	$       575,000.00
June 30, 2008	$       575,000.00
September 30, 2008	$       575,000.00
December 31, 2008	$       575,000.00
March 31, 2009	$       575,000.00
June 30, 2009	$       575,000.00
September 30, 2009	$       575,000.00
December 31, 2009	$       575,000.00

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March 31, 2010	$       575,000.00
June 30, 2010	$       575,000.00
September 30, 2010	$       575,000.00
December 31, 2010	$       575,000.00
March 31, 2011	$       575,000.00
June 30, 2011	$       575,000.00
September 30, 2011	$       575,000.00
December 31, 2011	$       575,000.00
March 31, 2012	$       575,000.00
June 30, 2012	$       575,000.00
September 30, 2012	$       575,000.00
December 31, 2012	$       575,000.00
March 31, 2013	$       575,000.00
June 30, 2013	$       575,000.00
Term Loan Maturity Date	$217,350,000.00

(ii) The Borrower shall pay to the Administrative Agent, for the account of the Incremental Term Lenders, on each Incremental Term Loan Repayment Date, a principal amount of the Other Term Loans (as adjusted from time to time pursuant to Sections 2.11(b), 2.12 and 2.13(f)) equal to the amount set forth for such date in the applicable Incremental Term Loan Assumption Agreement, together in each case with accrued and unpaid interest on the principal amount to be paid to but excluding the date of such payment.

(b) In the event and on each occasion that the Term Loan Commitments shall be reduced or shall expire or terminate other than as a result of the making of a Term Loan, the installments payable on each Repayment Date shall be reduced pro rata by an aggregate amount equal to the amount of such reduction, expiration or termination.

(c) To the extent not previously paid, all Term Loans and Other Term Loans shall be due and payable on the Term Loan Maturity Date and the Incremental Term Loan Maturity Date, respectively, together with accrued and unpaid interest on the principal amount to be paid to but excluding the date of payment.

(d) All repayments pursuant to this Section 2.11 shall be subject to Section 2.16, but shall otherwise be without premium or penalty.

SECTION 2.12. Optional Prepayment. (a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, upon at least three Business Days’ prior written or fax notice (or telephone notice promptly confirmed by written or fax notice) in the case of Eurodollar Loans, or written or fax notice (or telephone notice promptly confirmed by written or fax notice) on the Business Day of prepayment in the case of ABR Loans, to the Administrative Agent before 12:00 (noon), New York City time; provided, however, that each partial prepayment of (i) a Term Borrowing shall be in an amount that is an integral multiple of $500,000 and not less than $1,000,000 or (ii) a Revolving Credit Borrowing shall be in an amount that is an integral multiple of $100,000 and not less than $500,000.

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(b) Optional prepayments of Term Loans shall be applied pro rata against the remaining scheduled installments of principal due in respect of the Term Loans under Section 2.11.

(c) Each notice of prepayment shall specify the prepayment date and the principal amount of each Borrowing (or portion thereof) to be prepaid, shall be irrevocable unless conditioned upon a refinancing and shall commit the Borrower to prepay such Borrowing by the amount stated therein on the date stated therein. All prepayments under this Section 2.12 shall be subject to Section 2.16 but otherwise without premium or penalty. All prepayments under this Section 2.12 (other than prepayments of ABR Revolving Loans that are not made in connection with the termination or permanent reduction of the Revolving Credit Commitments) shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of payment.

SECTION 2.13. Mandatory Prepayments. (a) In the event of any termination of all the Revolving Credit Commitments, the Borrower shall, on the date of such termination, repay or prepay all its outstanding Revolving Credit Borrowings and all outstanding Swingline Loans and replace or cause to be canceled (or make other arrangements satisfactory to the Administrative Agent and the Issuing Bank with respect to) all outstanding Letters of Credit. If, after giving effect to any partial reduction of the Revolving Credit Commitments or at any other time, the Aggregate Revolving Credit Exposure would exceed the Total Revolving Credit Commitment, then the Borrower shall, on the date of such reduction or at such other time, repay or prepay Revolving Credit Borrowings or Swingline Loans (or a combination thereof) and, after the Revolving Credit Borrowings and Swingline Loans shall have been repaid or prepaid in full, replace or cause to be canceled (or make other arrangements satisfactory to the Administrative Agent and the Issuing Bank with respect to) Letters of Credit in an amount sufficient to eliminate such excess.

(b) Not later than the fifth Business Day following the receipt of Net Cash Proceeds in respect of any Asset Sale, the Borrower shall apply 100% of the Net Cash Proceeds received with respect thereto to prepay outstanding Term Loans in accordance with Section 2.13(g).

(c) Commencing with the fiscal year ending on December 31, 2008, no later than the earlier of (i) 100 days after the end of each fiscal year of the Borrower and (ii) 10 days following the date on which the financial statements with respect to such period are delivered pursuant to Section 5.04(a), the Borrower shall prepay outstanding Term Loans in accordance with Section 2.13(g) in an aggregate principal amount equal to (x) 50% of Excess Cash Flow for the fiscal year then ended minus (y) Voluntary Prepayments and voluntary prepayments of loans under the Second Lien Credit Agreement pursuant to Section 2.12 thereof made during such fiscal year (provided that such percentage shall be reduced to 25% if the Leverage Ratio at the end of such fiscal year was less than 2.75 to 1.0).

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(d) In the event that any Loan Party or any subsidiary of a Loan Party shall receive Net Cash Proceeds from the issuance or incurrence of Indebtedness for money borrowed of any Loan Party or any subsidiary of a Loan Party (other than any cash proceeds from the issuance of Indebtedness for money borrowed permitted pursuant to Section 6.01), the Borrower shall, not later than the fifth Business Day following the receipt of such Net Cash Proceeds by such Loan Party or such subsidiary, apply an amount equal to 100% of such Net Cash Proceeds to prepay outstanding Term Loans in accordance with Section 2.13(g).

(e) So long as any Term Loans are outstanding, mandatory prepayments of outstanding Loans under this Agreement shall be allocated ratably among the Term Lenders that accept the same and applied pro rata against the remaining scheduled installments of principal due in respect of the Term Loans of such Lenders under Section 2.11. Any Term Lender may elect, by notice to the Administrative Agent at or prior to the time and in the manner specified by the Administrative Agent, prior to any prepayment of Term Loans required to be made by the Borrower pursuant to this Section, to decline all (but not a portion) of its pro rata share of such prepayment (such declined amounts, the “Declined Proceeds”). Any Declined Proceeds shall be offered to the Term Lenders not so declining such prepayment (with such Term Lenders having the right to decline any prepayment with Declined Proceeds at the time and in the manner specified by the Administrative Agent). Any remaining Declined Proceeds (and, after the repayment in full of all outstanding Term Loans, any other amounts referred to in paragraph (b), (c) or (d) above that is required to be used to prepay Term Loans hereunder) shall be used first, to prepay Revolving Loans and Swingline Loans (without any mandatory reduction in the Revolving Credit Commitments), second, as may be required pursuant to the mandatory prepayment provisions of the Second Lien Credit Agreement and third, as determined by the Borrower.

(f) If no Term Lenders exercise the right to waive a given mandatory prepayment of the Term Loans pursuant to Section 2.13(e), then, with respect to such mandatory prepayment, the amount of such mandatory prepayment shall be applied first to Term Loans that are ABR Loans to the full extent thereof before application to Term Loans that are Eurodollar Loans in a manner that minimizes the amount of any payments required to be made by the Borrower pursuant to Section 2.16; provided, however, that, if at the time of any prepayment pursuant to this Section 2.13 there shall be Term Borrowings of different Types or Eurodollar Term Borrowings with different Interest Periods, and if some but not all Term Lenders shall have accepted such mandatory prepayment, then the aggregate amount of such mandatory prepayment shall be allocated ratably to each outstanding Term Borrowing of the accepting Term Lenders.

(g) The Borrower shall deliver to the Administrative Agent, at the time of each prepayment required under this Section 2.13, (i) a certificate signed by a Financial Officer of the Borrower setting forth in reasonable detail the calculation of the amount of such prepayment and (ii) to the extent practicable, at least three days prior written notice

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of such prepayment. Each notice of prepayment shall specify the prepayment date, the Type of each Loan being prepaid and the principal amount of each Loan (or portion thereof) to be prepaid. All prepayments of Borrowings under this Section 2.13 shall be subject to Section 2.16, but shall otherwise be without premium or penalty, and shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of payment.

SECTION 2.14. Reserve Requirements; Change in Circumstances. (a) Notwithstanding any other provision of this Agreement, if any Change in Law shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of or credit extended by any Lender or the Issuing Bank (except any such reserve requirement which is reflected in the Adjusted LIBO Rate) or shall impose on such Lender or the Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein, and the result of any of the foregoing shall be to increase the cost to such Lender or the Issuing Bank of making or maintaining any Eurodollar Loan or increase the cost to any Lender of issuing or maintaining any Letter of Credit or purchasing or maintaining a participation therein or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise) by an amount deemed by such Lender or the Issuing Bank to be material, then the Borrower will pay to such Lender or the Issuing Bank, as the case may be, upon demand such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

(b) If any Lender or the Issuing Bank shall have determined that any Change in Law regarding capital adequacy has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made or participations in Letters of Credit purchased by such Lender pursuant hereto or the Letters of Credit issued by the Issuing Bank pursuant hereto to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy) by an amount deemed by such Lender or the Issuing Bank to be material, then from time to time the Borrower shall pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as applicable, as specified in paragraph (a) or (b) above shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank the amount shown as due on any such certificate delivered by it within 10 days after its receipt of the same.

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(d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be under any obligation to compensate any Lender or the Issuing Bank under paragraph (a) or (b) above with respect to increased costs or reductions with respect to any period prior to the date that is 120 days prior to such request if such Lender or the Issuing Bank knew or could reasonably have been expected to know of the circumstances giving rise to such increased costs or reductions and of the fact that such circumstances would result in a claim for increased compensation by reason of such increased costs or reductions; provided further that the foregoing limitation shall not apply to any increased costs or reductions arising out of the retroactive application of any Change in Law within such 120-day period. The protection of this Section shall be available to each Lender and the Issuing Bank regardless of any possible contention of the invalidity or inapplicability of the Change in Law that shall have occurred or been imposed.

SECTION 2.15. Change in Legality. (a) Notwithstanding any other provision of this Agreement, if any Change in Law shall make it unlawful for any Lender to make or maintain any Eurodollar Loan or to give effect to its obligations as contemplated hereby with respect to any Eurodollar Loan, then, by written notice to the Borrower and to the Administrative Agent:

(i) such Lender may declare that Eurodollar Loans will not thereafter (for the duration of such unlawfulness) be made by such Lender hereunder (or be continued for additional Interest Periods) and ABR Loans will not thereafter (for such duration) be converted into Eurodollar Loans, whereupon any request for a Eurodollar Borrowing (or to convert an ABR Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing for an additional Interest Period) shall, as to such Lender only, be deemed a request for an ABR Loan (or a request to continue an ABR Loan as such for an additional Interest Period or to convert a Eurodollar Loan into an ABR Loan, as the case may be), unless such declaration shall be subsequently withdrawn; and

(ii) such Lender may require that all outstanding Eurodollar Loans made by it be converted to ABR Loans, in which event all such Eurodollar Loans shall be automatically converted to ABR Loans as of the effective date of such notice as provided in paragraph (b) below.

In the event any Lender shall exercise its rights under (i) or (ii) above, all payments and prepayments of principal that would otherwise have been applied to repay the Eurodollar Loans that would have been made by such Lender or the converted Eurodollar Loans of such Lender shall instead be applied to repay the ABR Loans made by such Lender in lieu of, or resulting from the conversion of, such Eurodollar Loans.

(b) For purposes of this Section 2.15, a notice to the Borrower by any Lender shall be effective as to each Eurodollar Loan made by such Lender, if lawful, on the last day of the Interest Period then applicable to such Eurodollar Loan; in all other cases such notice shall be effective on the date of receipt by the Borrower.

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SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender against any loss or expense that such Lender may sustain or incur as a consequence of (a) any event, other than a default by such Lender in the performance of its obligations hereunder, which results in (i) such Lender receiving or being deemed to receive any amount on account of the principal of any Eurodollar Loan prior to the end of the Interest Period in effect therefor, (ii) the conversion of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period with respect to any Eurodollar Loan, in each case other than on the last day of the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be made by such Lender (including any Eurodollar Loan to be made pursuant to a conversion or continuation under Section 2.10) not being made after notice of such Loan shall have been given by the Borrower hereunder (any of the events referred to in this clause (a) being called a “Breakage Event”) or (b) any default in the making of any payment or prepayment required to be made hereunder. In the case of any Breakage Event, such loss shall include an amount equal to the excess, as reasonably determined by such Lender, of (i) its cost of obtaining funds for the Eurodollar Loan that is the subject of such Breakage Event for the period from the date of such Breakage Event to the last day of the Interest Period in effect (or that would have been in effect) for such Loan over (ii) the amount of interest likely to be realized by such Lender in redeploying the funds released or not utilized by reason of such Breakage Event for such period. A certificate of any Lender setting forth any amount or amounts which such Lender is entitled to receive pursuant to this Section 2.16 shall be delivered to the Borrower and shall be conclusive absent manifest error.

SECTION 2.17. Pro Rata Treatment. Except as provided below in this Section 2.17 with respect to Swingline Loans and as required under Section 2.13(e) or 2.15, each Borrowing, each payment or prepayment of principal of any Borrowing, each payment of interest on the Loans, each payment of the Commitment Fees, each reduction of the Term Loan Commitments or the Revolving Credit Commitments and each conversion of any Borrowing to or continuation of any Borrowing as a Borrowing of any Type shall be allocated pro rata among the Lenders in accordance with their respective applicable Commitments (or, if such Commitments shall have expired or been terminated, in accordance with the respective principal amounts of their outstanding Loans). For purposes of determining the available Revolving Credit Commitments of the Lenders at any time, each outstanding Swingline Loan shall be deemed to have utilized the Revolving Credit Commitments of the Lenders (including those Lenders which shall not have made Swingline Loans) pro rata in accordance with such respective Revolving Credit Commitments. Each Lender agrees that in computing such Lender’s portion of any Borrowing to be made hereunder, the Administrative Agent may, in its discretion, round each Lender’s percentage of such Borrowing to the next higher or lower whole dollar amount.

SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall, through the exercise of a right of banker’s lien, setoff or counterclaim against the Borrower or any other Loan Party, or pursuant to a secured claim under Section 506 of Title 11 of the

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United States Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, obtain payment (voluntary or involuntary) in respect of any Loan or Loans or L/C Disbursement as a result of which the unpaid principal portion of its Loans and participations in L/C Disbursements shall be proportionately less than the unpaid principal portion of the Loans and participations in L/C Disbursements of any other Lender, it shall be deemed simultaneously to have purchased from such other Lender at face value, and shall promptly pay to such other Lender the purchase price for, a participation in the Loans and L/C Exposure of such other Lender, so that the aggregate unpaid principal amount of the Loans and L/C Exposure and participations in Loans and L/C Exposure held by each Lender shall be in the same proportion to the aggregate unpaid principal amount of all Loans and L/C Exposure then outstanding as the principal amount of its Loans and L/C Exposure prior to such exercise of banker’s lien, setoff or counterclaim or other event was to the principal amount of all Loans and L/C Exposure outstanding prior to such exercise of banker’s lien, setoff or counterclaim or other event; provided, however, that if any such purchase or purchases or adjustments shall be made pursuant to this Section 2.18 and the payment giving rise thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded to the extent of such recovery and the purchase price or prices or adjustment restored without interest. The Borrower and Holdings expressly consent to the foregoing arrangements and agree that any Lender holding a participation in a Loan or L/C Disbursement deemed to have been so purchased may exercise any and all rights of banker’s lien, setoff or counterclaim with respect to any and all moneys owing by the Borrower and Holdings to such Lender by reason thereof as fully as if such Lender had made a Loan directly to the Borrower in the amount of such participation.

SECTION 2.19. Payments. (a) The Borrower shall make each payment (including principal of or interest on any Borrowing or any L/C Disbursement or any Fees or other amounts) hereunder and under any other Loan Document not later than 12:00 (noon), New York City time, on the date when due in immediately available dollars, without setoff, defense or counterclaim. Each such payment (other than (i) Issuing Bank Fees, which shall be paid directly to the Issuing Bank, and (ii) principal of and interest on Swingline Loans, which shall be paid directly to the Swingline Lender except as otherwise provided in Section 2.22(e)) shall be made to the Administrative Agent at its offices at Eleven Madison Avenue, New York, NY 10010. The Administrative Agent shall promptly distribute to each Lender any payments received by the Administrative Agent on behalf of such Lender.

(b) Except as otherwise expressly provided herein, whenever any payment (including principal of or interest on any Borrowing or any Fees or other amounts) hereunder or under any other Loan Document shall become due, or otherwise would occur, on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or Fees, if applicable.

(c) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for

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the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower does not in fact make such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, and to pay interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at a rate determined by the Administrative Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error).

SECTION 2.20. Taxes. (a) Any and all payments by or on account of any obligation of the Borrower or any other Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that, if the Borrower or any other Loan Party shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower or such Loan Party shall make such deductions and (iii) the Borrower or such Loan Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within 10 days after written demand therefor specifying in reasonable detail the nature and amount of Indemnified Taxes or Other Taxes, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower or any other Loan Party hereunder or under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on behalf of itself, a Lender or the Issuing Bank, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower or any other Loan Party to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

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(e) Each Foreign Lender hereby agrees that it shall, no later than the July 31, 2007 or, in the case of a Lender that becomes a party hereto pursuant to an Assignment and Acceptance after July 31, 2007, within 10 days after such Foreign Lender becomes a party hereto, or, in the case where a Foreign Lender changes its applicable lending office by designating a different lending office (a “New Lending Office”), within 10 days after such Lender designates the New Lending Office, and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally able to do so, deliver to the Borrower and the Administrative Agent either (i) two accurate, complete and signed copies of either (x) U.S. Internal Revenue Service Form W-8ECI or successor form, or (y) U.S. Internal Revenue Service Form W-8BEN or successor form, in each case, indicating that such Foreign Lender is on the date of delivery thereof entitled to receive payments of interest hereunder free from, or subject to a reduced rate of, withholding of United States Federal income tax or (ii) in the case of such a Lender that is entitled to claim exemption from withholding of United States Federal income tax under Section 871(h) or Section 881(c) of the Code, (x) a certificate to the effect that such Lender is (A) not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) not a “10 percent shareholder” within the meaning of Section 881(c)(3)(B) of the Code and (C) not a controlled foreign corporation described in Section 881(c)(3)(C) of the Code and (y) two accurate, complete and signed copies of U.S. Internal Revenue Service Form W-8BEN or successor form. In addition, each Foreign Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Foreign Lender and shall deliver such forms within 20 days after receipt of a written request therefor from the Borrower or the Administrative Agent.

(f) Each Lender and Administrative Agent that is a U.S. person as that term is defined in Section 7701(a)(30) of the Code, other than a Lender or Administrative Agent that may be treated as an exempt recipient based on the indicators described in Treasury Regulation Section 1.6049-4(c)(1)(ii), hereby agrees that it shall, no later than the July 31, 2007]or, in the case of a Lender that becomes a party hereto pursuant to an Assignment and Acceptance after July 31, 2007, within 10 days after such Lender becomes a party hereto, deliver to the Administrative Agent two accurate, complete and signed copies of U.S. Internal Revenue Service Form W-9 or successor form, certifying that such Lender or Administrative Agent, as the case may be, is on the date of delivery thereof entitled to an exemption from United States backup withholding tax. Unless the Administrative Agent has received such forms or other documents required by this Section 2.20(f), the Borrower or the Administrative Agent, as applicable, shall withhold amounts as required by applicable requirements of law from such payments at the applicable statutory rate.

(g) If a Lender determines that it has received a refund in respect of any Indemnified Taxes or Other Taxes with respect to which the Borrower has paid additional amounts pursuant to Section 2.20(a) or made an indemnity payment, pursuant to this Section 2.20(c), it shall within 30 days from the date of such receipt pay over such refund

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to the Borrower, net of all out-of-pocket expenses of such Lender; provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other person.

SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty to Mitigate. (a) In the event (i) any Lender or the Issuing Bank delivers a certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice described in Section 2.15, (iii) the Borrower is required to pay any additional amount to any Lender or the Issuing Bank or any Governmental Authority on account of any Lender or the Issuing Bank pursuant to Section 2.20, (iv) any Lender becomes a Defaulting Lender or (v) any Lender refuses to consent to any amendment, waiver or other modification of any Loan Document requested by the Borrower that requires the consent of a greater percentage of the Lenders than the Required Lenders and such amendment, waiver or other modification is consented to by the Required Lenders, the Borrower may, at its sole expense and effort (including with respect to the processing and recordation fee referred to in Section 9.04(b)), upon notice to such Lender or the Issuing Bank, as the case may be, and the Administrative Agent, require such Lender or the Issuing Bank to transfer and assign, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all of its interests, rights and obligations under this Agreement (or, in the case of clause (v) above, all of its interests, rights and obligation with respect to the Class of Loans or Commitments that is the subject of the related consent, amendment, waiver or other modification) to an Eligible Assignee that shall assume such assigned obligations and, with respect to clause (v) above, shall consent to such requested amendment, waiver or other modification of any Loan Document (which Eligible Assignee may be another Lender, if a Lender accepts such assignment); provided that (x) such assignment shall not conflict with any law, rule or regulation or order of any court or other Governmental Authority having jurisdiction, (y) the Borrower shall have received the prior written consent of the Administrative Agent (and, if a Revolving Credit Commitment is being assigned, of the Issuing Bank and the Swingline Lender), which consents shall not unreasonably be withheld or delayed, and (z) the Borrower or such Eligible Assignee shall have paid to the affected Lender or the Issuing Bank in immediately available funds an amount equal to the sum of the principal of and interest accrued to the date of such payment on the outstanding Loans or L/C Disbursements of such Lender or the Issuing Bank, respectively, plus all Fees and other amounts accrued for the account of such Lender or the Issuing Bank hereunder with respect thereto (including any amounts under Sections 2.14 and 2.16); provided further that, if prior to any such transfer and assignment the circumstances or event that resulted in such Lender’s or the Issuing Bank’s claim for compensation under Section 2.14, notice under Section 2.15 or the amounts paid pursuant to Section 2.20, as the case may be, cease to cause such Lender or the Issuing Bank to suffer increased costs or reductions in amounts received or receivable

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or reduction in return on capital, or cease to have the consequences specified in Section 2.15, or cease to result in amounts being payable under Section 2.20, as the case may be (including as a result of any action taken by such Lender or the Issuing Bank pursuant to paragraph (b) below), or if such Lender or the Issuing Bank shall waive its right to claim further compensation under Section 2.14 in respect of such circumstances or event or shall withdraw its notice under Section 2.15 or shall waive its right to further payments under Section 2.20 in respect of such circumstances or event or shall consent to the proposed amendment, waiver, consent or other modification, as the case may be, then such Lender or the Issuing Bank shall not thereafter be required to make any such transfer and assignment hereunder. Each Lender hereby grants to the Administrative Agent an irrevocable power of attorney (which power is coupled with an interest) to execute and deliver, on behalf of such Lender as assignor, any Assignment and Acceptance necessary to effectuate any assignment of such Lender’s interests hereunder in the circumstances contemplated by this Section 2.21(a).

(b) If (i) any Lender or the Issuing Bank shall request compensation under Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice described in Section 2.15 or (iii) the Borrower is required to pay any additional amount to any Lender or the Issuing Bank or any Governmental Authority on account of any Lender or the Issuing Bank, pursuant to Section 2.20, then such Lender or the Issuing Bank shall use reasonable efforts (which shall not require such Lender or the Issuing Bank to incur an unreimbursed loss or unreimbursed cost or expense or otherwise take any action inconsistent with its internal policies or legal or regulatory restrictions or suffer any disadvantage or burden deemed by it to be significant) (x) to file any certificate or document reasonably requested in writing by the Borrower or (y) to assign its rights and delegate and transfer its obligations hereunder to another of its offices, branches or affiliates, if such filing or assignment would reduce its claims for compensation under Section 2.14 or enable it to withdraw its notice pursuant to Section 2.15 or would reduce amounts payable pursuant to Section 2.20, as the case may be, in the future. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender or the Issuing Bank in connection with any such filing or assignment, delegation and transfer.

SECTION 2.22. Swingline Loans. (a) Swingline Commitment. Subject to the terms and conditions and relying upon the representations and warranties herein set forth, the Swingline Lender agrees to make loans to the Borrower at any time and from time to time on and after the Closing Date and until the earlier of the Revolving Credit Maturity Date and the termination of the Revolving Credit Commitments, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of all Swingline Loans exceeding $2,500,000 in the aggregate or (ii) the Aggregate Revolving Credit Exposure, after giving effect to any Swingline Loan, exceeding the Total Revolving Credit Commitment. Each Swingline Loan shall be in a principal amount that is an integral multiple of $100,000. The Swingline Commitment may be terminated or reduced from time to time as provided herein. Within the foregoing limits, the Borrower may borrow, pay or prepay and reborrow Swingline Loans hereunder, subject to the terms, conditions and limitations set forth herein.

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(b) Swingline Loans. The Borrower shall notify the Swingline Lender by fax, or by telephone (promptly confirmed by fax), not later than 12:00 (noon), New York City time, on the day of a proposed Swingline Loan. Such notice shall be delivered on a Business Day, shall be irrevocable and shall refer to this Agreement and shall specify the requested date (which shall be a Business Day) and amount of such Swingline Loan and the wire transfer instructions for the account of the Borrower to which the proceeds of the Swingline Loan should be disbursed. The Swingline Lender shall make each Swingline Loan by wire transfer to the account specified in such request.

(c) Prepayment. The Borrower shall have the right at any time and from time to time to prepay any Swingline Loan, in whole or in part, upon giving written or fax notice (or telephone notice promptly confirmed by written, or fax notice) to the Swingline Lender before 12:00 (noon), New York City time, on the date of prepayment at the Swingline Lender’s address for notices specified in Section 9.01.

(d) Interest. Each Swingline Loan shall be an ABR Loan and, subject to the provisions of Section 2.07, shall bear interest as provided in Section 2.06(a).

(e) Participations. The Swingline Lender may by written notice given to the Administrative Agent not later than 1:00 p.m., New York City time, on any Business Day require the Revolving Credit Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Revolving Credit Lenders will participate. The Administrative Agent will, promptly upon receipt of such notice, give notice to each Revolving Credit Lender, specifying in such notice such Lender’s Pro Rata Percentage of such Swingline Loan or Loans. In furtherance of the foregoing, each Revolving Credit Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Revolving Credit Lender’s Pro Rata Percentage of such Swingline Loan or Loans. Each Revolving Credit Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Revolving Credit Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.02(c) with respect to Loans made by such Lender (and Section 2.02(c) shall apply, mutatis mutandis, to the payment obligations of the Lenders) and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other person on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the

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Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower (or other person liable for obligations of the Borrower) of any default in the payment thereof.

SECTION 2.23. Letters of Credit. (a) General. The Borrower may request the issuance of a Letter of Credit for its own account or for the account of any of its Subsidiaries (in which case the Borrower and such Subsidiary shall be co-applicants with respect to such Letter of Credit), in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time while the L/C Commitment remains in effect. This Section shall not be construed to impose an obligation upon the Issuing Bank to issue any Letter of Credit that is inconsistent with the terms and conditions of this Agreement.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. In order to request the issuance of a Letter of Credit (or to amend, renew or extend an existing Letter of Credit), the Borrower shall hand deliver or fax to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, the date of issuance, amendment, renewal or extension, the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) below), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare such Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if, and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that, after giving effect to such issuance, amendment, renewal or extension (i) the L/C Exposure shall not exceed $5,000,000 and (ii) the Aggregate Revolving Credit Exposure shall not exceed the Total Revolving Credit Commitment.

(c) Expiration Date. Each Letter of Credit shall expire at the close of business on the earlier of the date one year after the date of the issuance of such Letter of Credit and the date that is five Business Days prior to the Revolving Credit Maturity Date, unless such Letter of Credit expires by its terms on an earlier date; provided, however, that a Letter of Credit may, upon the request of the Borrower, include a provision whereby such Letter of Credit shall be renewed automatically for additional consecutive periods of 12 months or less (but not beyond the date that is five Business Days prior to the Revolving Credit Maturity Date) unless the Issuing Bank notifies the beneficiary thereof at least 30 days (or such longer period as may be specified in such Letter of Credit) prior to the then-applicable expiration date that such Letter of Credit will not be renewed.

(d) Participations. By the issuance of a Letter of Credit and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Revolving Credit Lender, and each such Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Pro Rata Percentage

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of the aggregate amount available to be drawn under such Letter of Credit, effective upon the issuance of such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Credit Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Pro Rata Percentage of each L/C Disbursement made by the Issuing Bank and not reimbursed by the Borrower (or, if applicable, another party pursuant to its obligations under any other Loan Document) forthwith on the date due as provided in Section 2.02(f). Each Revolving Credit Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or an Event of Default, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

(e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement in respect of a Letter of Credit, the Borrower shall pay to the Administrative Agent an amount equal to such L/C Disbursement not later than 3:00 p.m., New York City time, if the Borrower shall have received notice from the Issuing Bank on or prior to 10:00 a.m., New York City time, on any Business Day, that payment of such draft will be made on such Business Day, or, if the Borrower shall have received such notice later than 10:00 a.m., New York City time, on any Business Day, not later than 3:00 p.m., New York City time, on the immediately following Business Day.

(f) Obligations Absolute. The Borrower’s obligations to reimburse L/C Disbursements as provided in paragraph (e) above shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under any and all circumstances whatsoever, and irrespective of:

(i) any lack of validity or enforceability of any Letter of Credit or any Loan Document, or any term or provision therein;

(ii) any amendment or waiver of or any consent to departure from all or any of the provisions of any Letter of Credit or any Loan Document;

(iii) the existence of any claim, setoff, defense or other right that the Borrower, any other party guaranteeing, or otherwise obligated with, the Borrower, any Subsidiary or other Affiliate thereof or any other person may at any time have against the beneficiary under any Letter of Credit, the Issuing Bank, the Administrative Agent or any Lender or any other person, whether in connection with this Agreement, any other Loan Document or any other related or unrelated agreement or transaction;

(iv) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

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(v) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit; and

(vi) any other act or omission to act or delay of any kind of the Issuing Bank, the Lenders, the Administrative Agent or any other person or any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of the Borrower’s obligations hereunder.

Without limiting the generality of the foregoing, it is expressly understood and agreed that the absolute and unconditional obligation of the Borrower hereunder to reimburse L/C Disbursements will not be excused by the gross negligence or wilful misconduct of the Issuing Bank. However, the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s gross negligence or wilful misconduct in determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. It is further understood and agreed that the Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary and, in making any payment under any Letter of Credit (i) the Issuing Bank’s exclusive reliance on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including reliance on the amount of any draft presented under such Letter of Credit, whether or not the amount due to the beneficiary thereunder equals the amount of such draft and whether or not any document presented pursuant to such Letter of Credit proves to be insufficient in any respect, if such document on its face appears to be in order, and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in each case, be deemed not to constitute gross negligence or wilful misconduct of the Issuing Bank.

(g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall as promptly as possible give telephonic notification, confirmed by fax, to the Administrative Agent and the Borrower of such demand for payment and whether the Issuing Bank has made or will make an L/C Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Revolving Credit Lenders with respect to any such L/C Disbursement.

(h) Interim Interest. If the Issuing Bank shall make any L/C Disbursement in respect of a Letter of Credit, then, unless the Borrower shall reimburse such L/C Disbursement in full on such date, the unpaid amount thereof shall bear interest for the

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account of the Issuing Bank, for each day from and including the date of such L/C Disbursement, to but excluding the earlier of the date of payment by the Borrower or the date on which interest shall commence to accrue thereon as provided in Section 2.02(f), at the rate per annum that would apply to such amount if such amount were an ABR Revolving Loan.

(i) Resignation or Removal of the Issuing Bank. The Issuing Bank may resign at any time by giving 30 days’ prior written notice to the Administrative Agent, the Lenders and the Borrower, and may be removed at any time by the Borrower by notice to the Issuing Bank, the Administrative Agent and the Lenders. Upon the acceptance of any appointment as the Issuing Bank hereunder by a Lender that shall agree to serve as successor Issuing Bank, such successor shall succeed to and become vested with all the interests, rights and obligations of the retiring Issuing Bank. At the time such removal or resignation shall become effective, the Borrower shall pay all accrued and unpaid fees pursuant to Section 2.05(c)(ii). The acceptance of any appointment as the Issuing Bank hereunder by a successor Lender shall be evidenced by an agreement entered into by such successor, in a form satisfactory to the Borrower and the Administrative Agent, and, from and after the effective date of such agreement, (i) such successor Lender shall have all the rights and obligations of the previous Issuing Bank under this Agreement and the other Loan Documents and (ii) references herein and in the other Loan Documents to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the resignation or removal of the Issuing Bank hereunder, the retiring Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such resignation or removal, but shall not be required to issue additional Letters of Credit.

(j) Cash Collateralization. If any Event of Default shall occur and be continuing, the Borrower shall, on the Business Day it receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving Credit Lenders holding participations in outstanding Letters of Credit representing greater than 50% of the aggregate undrawn amount of all outstanding Letters of Credit) thereof and of the amount to be deposited, deposit in an account with the Collateral Agent, for the benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C Exposure as of such date. Such deposit shall be held by the Collateral Agent as collateral for the payment and performance of the Obligations. The Collateral Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits in Permitted Investments, which investments shall be made at the option and sole discretion of the Collateral Agent, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall (i) automatically be applied by the Administrative Agent to reimburse the Issuing Bank for L/C Disbursements for which it has not been reimbursed, (ii) be held for the satisfaction of the reimbursement obligations of the Borrower for the L/C Exposure at such time and (iii) if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Credit Lenders holding participations in outstanding Letters of

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Credit representing greater than 50% of the aggregate undrawn amount of all outstanding Letters of Credit), be applied to satisfy the Obligations. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.

(k) Additional Issuing Banks. The Borrower may, at any time and from time to time with the consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed) and such Lender, designate one or more additional Lenders to act as an issuing bank under the terms of this Agreement. Any Lender designated as an issuing bank pursuant to this paragraph (k) shall be deemed to be an “Issuing Bank” (in addition to being a Lender) in respect of Letters of Credit issued or to be issued by such Lender, and, with respect to such Letters of Credit, such term shall thereafter apply to the other Issuing Bank and such Lender.

SECTION 2.24. Incremental Term Loans. (a) The Borrower may, by written notice to the Administrative Agent from time to time, request Incremental Term Loan Commitments in an amount not to exceed the Incremental Term Loan Amount from the Lenders. Each Lender, in its sole discretion, shall determine whether it will commit to provide any Incremental Term Loan Commitments requested by the Borrower on the terms then proposed. The failure of a Lender to respond within 10 days of any request for Incremental Term Loan Commitments shall be deemed a rejection of such request. No Lender shall have any obligation to make any Incremental Term Loans under the terms of this Section 2.24. If a Lender commits to provide any portion of any Incremental Term Loans as so proposed by the Borrower, such Lender’s allocated commitment for such Incremental Term Loans shall be no less than the lesser of: (x) the amount of such Incremental Term Loan Commitments that such Lender shall have committed to provide and (y) its pro rata share (determined as the quotient of (A) the sum of such Lender’s Term Loans, Revolving Credit Exposure and unused Revolving Credit Commitments divided by (B) the sum of the aggregate amount of all Term Loans, Revolving Credit Exposure and all unused Revolving Credit Commitments, in each case of all Lenders agreeing to provide such Incremental Term Loan Commitments) of the amount of the Incremental Term Loan Commitments requested. If one or more of the Lenders will not be providing the Incremental Term Loan Commitments requested, then, Incremental Term Lenders that are not current Lenders may commit to provide an amount equal to the aggregate amount of the requested Incremental Term Loan Commitments that will not be provided by the existing Lenders; provided that each Incremental Term Lender, if not already a Lender hereunder, shall be subject to the approval of the Administrative Agent (which approval shall not be unreasonably withheld or delayed). Such notice shall set forth (i) the amount of the Incremental Term Loan Commitments being requested (which shall be in minimum increments of $1,000,000 and a minimum amount of $5,000,000 or such lesser amount equal to the remaining Incremental Term Loan Amount), (ii) the date on which such Incremental Term Loan Commitments are requested to become effective (which shall not be less than 10 Business Days nor more than 60 days after the date of such notice), and (iii) whether such Incremental Term Loan Commitments are commitments to make additional Term Loans or commitments to make term loans with terms different from the Term Loans (“Other Term Loans”).

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(b) The Borrower and each Incremental Term Lender shall execute and deliver to the Administrative Agent an Incremental Term Loan Assumption Agreement and such other documentation as the Administrative Agent shall reasonably specify to evidence the Incremental Term Loan Commitment of each Incremental Term Lender. Each Incremental Term Loan Assumption Agreement shall specify the terms of the Incremental Term Loans to be made thereunder; provided that the terms of any Other Term Loans must be reasonably satisfactory to the Administrative Agent; provided further, without the prior written consent of the Required Lenders, (i) the final maturity date of any Other Term Loans shall be no earlier than the Term Loan Maturity Date, (ii) the average life to maturity of the Other Term Loans shall be no shorter than the average life to maturity of the Term Loans and (iii) if the initial yield on such Other Term Loans (as determined by the Administrative Agent to be equal to the sum of (x) the margin above the Adjusted LIBO Rate on such Other Term Loans and (y) if such Other Term Loans are initially made at a discount or the Lenders making the same receive a fee directly or indirectly from Holdings, the Borrower or any Subsidiary for doing so (the amount of such discount or fee, expressed as a percentage of the Other Term Loans, being referred to herein as “OID”), the amount of such OID divided by the lesser of (A) the average life to maturity of such Other Term Loans and (B) four) exceeds by more than 50 basis points (the amount of such excess above 50 basis points being referred to herein as the “Yield Differential”) the Applicable Percentage then in effect for Eurodollar Term Loans, then the Applicable Percentage then in effect for Term Loans shall automatically be increased by the Yield Differential, effective upon the making of the Other Term Loans. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Incremental Term Loan Assumption Agreement. Each of the parties hereto hereby agrees that, upon the effectiveness of any Incremental Term Loan Assumption Agreement, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Incremental Term Loan Commitment and the Incremental Term Loans evidenced thereby.

(c) Notwithstanding the foregoing, no Incremental Term Loan Commitment shall become effective under this Section 2.24 unless (i) on the date of such effectiveness, the conditions set forth in paragraphs (b) and (c) of Section 4.01 shall be satisfied and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer of the Borrower, which certificate shall include reasonably detailed calculations demonstrating compliance by the Borrower with the covenants set forth in Sections 6.11, 6.12 and 6.13 on a pro forma basis after giving effect to the incurrence of such Incremental Term Loans and (ii) the Administrative Agent shall have received (with sufficient copies for each of the Incremental Term Lenders) legal opinions, board resolutions and other closing certificates reasonably requested by the Administrative Agent and consistent with those delivered on the Closing Date under Section 4.02.

(d) Each of the parties hereto hereby agrees that the Administrative Agent may, in consultation with the Borrower, take any and all action as may be reasonably necessary

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to ensure that all Incremental Term Loans (other than Other Term Loans), when originally made, are included in each Borrowing of outstanding Term Loans on a pro rata basis. This may be accomplished by requiring each outstanding Eurodollar Term Borrowing to be converted into an ABR Term Borrowing on the date of each Incremental Term Loan, or by allocating a portion of each Incremental Term Loan to each outstanding Eurodollar Term Borrowing on a pro rata basis. Any conversion of Eurodollar Term Loans to ABR Term Loans required by the preceding sentence shall be subject to Section 2.16. If any Incremental Term Loan is to be allocated to an existing Interest Period for a Eurodollar Term Borrowing, then the interest rate thereon for such Interest Period and the other economic consequences thereof shall be as set forth in the applicable Incremental Term Loan Assumption Agreement. In addition, to the extent any Incremental Term Loans are not Other Term Loans, the scheduled amortization payments under Section 2.11(a)(i) required to be made after the making of such Incremental Term Loans shall be ratably increased by the aggregate principal amount of such Incremental Term Loans.

SECTION 2.25. Increase in Revolving Credit Commitments. (a) The Borrower may, by written notice to the Administrative Agent from time to time, request that the Total Revolving Credit Commitment be increased by an aggregate amount not to exceed the Incremental Revolving Facility Amount at such time. Upon the receipt of such request by the Administrative Agent, the Administrative Agent shall deliver a copy thereof to each Revolving Credit Lender. Such notice shall set forth the amount of the requested increase (which shall be in minimum increments of $1,000,000 or equal to the remaining Incremental Revolving Facility Amount) and the date on which such increase is requested to become effective (which shall be not less than 10 Business Days nor more than 60 days after the date of such notice and which, in any event, must be prior to the Revolving Credit Maturity Date), and shall offer each Revolving Credit Lender the opportunity to increase its Revolving Credit Commitment by its Pro Rata Percentage of the proposed increased amount. Each Revolving Credit Lender shall, by notice to the Borrower and the Administrative Agent given not more than 10 Business Days after the date of the Administrative Agent’s notice, either agree to increase its Revolving Credit Commitment by all or a portion of the offered amount (each Revolving Credit Lender so agreeing being an “Increasing Revolving Lender”) or decline to increase its Revolving Credit Commitment (and any Revolving Credit Lender that does not deliver such a notice within such period of 10 Business Days shall be deemed to have declined to increase its Revolving Credit Commitment) (each Revolving Credit Lender so declining or being deemed to have declined being a “Non-Increasing Revolving Lender”). In the event that, on the 10th Business Day after the Administrative Agent shall have delivered a notice pursuant to the second sentence of this paragraph, the Increasing Revolving Lenders shall have agreed pursuant to the preceding sentence to increase their Revolving Credit Commitments by an aggregate amount less than the increase requested by the Borrower, the Borrower may arrange for one or more banks or other entities (any such bank or other entity being called an “Augmenting Revolving Lender” and, together with the Increasing Revolving Lenders, the “Incremental Revolving Lenders”), which may include any Lender, to extend Revolving Credit Commitments or increase their existing Revolving Credit Commitments in an aggregate amount equal to the unsubscribed amount; provided, however, that each Augmenting Revolving Lender shall be subject to

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the prior written approval of the Administrative Agent, the Swingline Lender and the Issuing Bank (which approvals shall not be unreasonably withheld or delayed), and the Borrower and each Augmenting Revolving Lender shall execute all such documentation as the Administrative Agent shall reasonably specify to evidence its Revolving Credit Commitment and/or its status as a Revolving Credit Lender hereunder. Any such increase may be made in an amount that is less than the increase requested by the Borrower if such Borrower is unable to arrange for, or chooses not to arrange for, Augmenting Revolving Lenders.

(b) Each of the parties hereto hereby agrees that the Administrative Agent may, in consultation with the Borrower, take any and all action as may be reasonably necessary to ensure that after giving effect to any increase pursuant to this Section 2.25, the outstanding Revolving Loans (if any) are held by the Revolving Credit Lenders in accordance with their new Pro Rata Percentages. This may be accomplished at the discretion of the Administrative Agent, following consultation with the Borrower, (i) by requiring the outstanding Revolving Loans to be prepaid with the proceeds of a new Revolving Credit Borrowing, (ii) by causing Non-Increasing Revolving Lenders to assign portions of their outstanding Revolving Loans to Increasing Revolving Lenders and/or Augmenting Revolving Lenders, or (iii) by any combination of the foregoing. Any prepayment or assignment described in this paragraph (b) shall be subject to Section 2.16, but shall otherwise be without premium or penalty.

(c) Notwithstanding the foregoing, no increase in the Revolving Credit Commitments shall become effective under this Section 2.25 unless (i) on the date of such effectiveness, the conditions set forth in paragraphs (b) and (c) of Section 4.01 shall be satisfied (treating the effectiveness of the increase in the Revolving Credit Commitments as a “Credit Event” for such purposes) and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer of the Borrower, and (ii) the Administrative Agent shall have received (with sufficient copies for each of the Incremental Revolving Lenders) legal opinions, board resolutions and other closing certificates reasonably requested by the Administrative Agent and consistent with those delivered on the Closing Date under Section 4.02.

ARTICLE III

Representations and Warranties

Each of Holdings and the Borrower represents and warrants to the Administrative Agent, the Collateral Agent, the Issuing Bank and each of the Lenders that:

SECTION 3.01. Organization; Powers. Holdings, the Borrower and each of the Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has all requisite power and authority to own its property and assets and to carry on its business as now conducted and as proposed to be conducted, (c) is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required, except where the failure so to qualify could not reasonably be expected to result in a Material Adverse Effect, and (d) has the power and

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authority to execute, deliver and perform its obligations under each of the Loan Documents and each other agreement or instrument contemplated thereby to which it is or will be a party and, in the case of the Borrower, to borrow hereunder.

SECTION 3.02. Authorization. The Transactions (a) have been duly authorized by all requisite corporate and, if required, stockholder action and (b) will not (i) violate (A) any provision of law, statute, rule or regulation, or of the certificate or articles of incorporation or other constitutive documents or by-laws of Holdings, the Borrower or any Subsidiary or (B) any order of any Governmental Authority except to the extent such violation could not reasonably be expected to have a Material Adverse Effect, (ii) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under, or give rise to any right to accelerate or to require the prepayment, repurchase or redemption of any obligation under any indenture, agreement or other instrument to which Holdings, the Borrower or any Subsidiary is a party, except to the extent such conflict, breach, default or other violation could not reasonably be expected to have a Material Adverse Effect or (iii) result in the creation or imposition of any Lien upon or with respect to any property or assets now owned or hereafter acquired by Holdings, the Borrower or any Subsidiary (other than the Second Priority Liens or any Lien created hereunder or under the Security Documents).

SECTION 3.03. Enforceability. This Agreement has been duly executed and delivered by Holdings and the Borrower and constitutes, and each other Loan Document when executed and delivered by each Loan Party party thereto will constitute, a legal, valid and binding obligation of such Loan Party enforceable against such Loan Party in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

SECTION 3.04. Governmental Approvals. No action, consent or approval of, registration or filing with or any other action by any Governmental Authority is or will be required in connection with the Transactions, except for (a) filings and recordings with respect to the Collateral to be made, or otherwise delivered to Collateral Agent for filing and/or recordation, as of the Closing Date (including the filing of Uniform Commercial Code financing statements, filings with the United States Patent and Trademark Office and the United States Copyright Office, and recordation of the Mortgages, (b) such as have been made or obtained and are in full force and effect and (c) authorizations, approvals, actions, notices and filings identified on Schedule 3.04 or which would not have a Material Adverse Effect if not made or obtained.

SECTION 3.05. Financial Statements. (a) Holdings has heretofore furnished to the Administrative Agent its consolidated balance sheets and related statements of income, stockholder’s equity and cash flows (i) as of and for the fiscal year ended December 31, 2006, audited by and accompanied by the opinion of BDO Seidman, LLP, independent public accountants, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended March 31, 2007, certified by its chief financial officer. Such financial statements present fairly the financial condition and results of operations and cash flows of Holdings and its consolidated Subsidiaries as of such dates and for such

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periods. Such balance sheets and the notes thereto disclose all material liabilities, direct or contingent, of the Borrower and its consolidated Subsidiaries as of the dates thereof. Such financial statements were prepared in accordance with GAAP applied on a consistent basis, subject, in the case of unaudited financial statements, to year-end audit adjustments and the absence of footnotes.

(b) Holdings has heretofore delivered to the Administrative Agent its unaudited pro forma consolidated balance sheet and related pro forma statements of income, stockholder’s equity and cash flows as of March 31, 2007, prepared giving effect to the Transactions as if they had occurred, with respect to such balance sheet, on such date and, with respect to such other financial statements, on the first day of the 12-month period ending on such date. Such pro forma financial statements have been prepared in good faith by the Borrower, based on the assumptions stated therein (which assumptions are believed by the Borrower on the date hereof and on the Closing Date to be reasonable), are based on the best information available to the Borrower as of the date of delivery thereof, accurately reflect all adjustments required to be made to give effect to the Transactions and present fairly in all material respects on a pro forma basis the estimated consolidated financial position of the Borrower and its consolidated Subsidiaries as of such date and for such period, assuming that the Transactions had actually occurred at such date or at the beginning of such period, as the case may be.

SECTION 3.06. No Material Adverse Change. Except for any Disclosed Matter, no event, change or condition has occurred that has had, or would reasonably be expected to have, a material adverse effect on the business, assets, liabilities, operations, condition (financial or otherwise) or operating results of Holdings, the Borrower and the Subsidiaries, taken as a whole, since December 31, 2006. It is understood that downgrades or negative pronouncements by rating agencies and volatility in the capital markets generally shall not in and of themselves be considered material adverse changes, but that the antecedents or consequences thereof may constitute such changes (except to the extent the same constitute Disclosed Matters).

SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of Holdings, the Borrower and the Subsidiaries has good and marketable title to, valid leasehold interests in, or valid licensed rights in, as the case may be, all its material properties and assets (including all Mortgaged Property), except (i) for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties and assets for their intended purposes or (ii) as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. All such material properties and assets are free and clear of Liens, other than Liens expressly permitted by Section 6.02.

(b) Each of Holdings, the Borrower and the Subsidiaries has complied in all material respects with all obligations under all material leases to which it is a party and all such leases are in full force and effect, and each of Holdings, the Borrower and the Subsidiaries enjoys peaceful and undisturbed possession under all such material leases, except, in each case, as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

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(c) As of the Closing Date, neither Holdings nor the Borrower has received any notice of, nor has any knowledge of, any pending or contemplated condemnation proceeding affecting the Mortgaged Properties or any sale or disposition thereof in lieu of condemnation.

(d) As of the Closing Date, none of Holdings, the Borrower or any of the Subsidiaries is obligated under any right of first refusal, option or other contractual right to sell, assign or otherwise dispose of any Mortgaged Property or any interest therein.

SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing Date a list of all Subsidiaries and the percentage ownership interest of Holdings and its Subsidiaries therein. The shares of capital stock or other ownership interests so indicated on Schedule 3.08 are fully paid and non-assessable and are owned by Holdings or the Borrower, directly or indirectly, free and clear of all Liens other than Liens expressly permitted by Section 6.02.

SECTION 3.09. Litigation; Compliance with Laws. (a) Except for the Disclosed Matters, there are no actions, suits or proceedings at law or in equity or by or before any Governmental Authority now pending or, to the knowledge of Holdings or the Borrower, threatened against or affecting Holdings or the Borrower or any Subsidiary or any business, property or rights of any such person as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

(b) None of Holdings, the Borrower or any of the Subsidiaries or any of their respective material properties or assets is in violation of, nor will the continued operation of their material properties and assets as currently conducted violate, any law, rule or regulation (including any zoning, building, ordinance, code or approval or any building permits) or any restrictions of record or agreements affecting the Mortgaged Property, or is in default with respect to any judgment, writ, injunction, decree or order of any Governmental Authority, in each case where such violation or default could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.10. Agreements. None of Holdings, the Borrower or any of the Subsidiaries is in default in any manner under any provision of any indenture or other agreement or instrument evidencing Indebtedness, or any other material agreement or instrument to which it is a party or by which it or any of its properties or assets are or may be bound, in each case where such default could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.11. Federal Reserve Regulations. (a) None of Holdings, the Borrower or any of the Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.

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(b) No part of the proceeds of any Loan or any Letter of Credit will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of, or that is inconsistent with, the provisions of the Regulations of the Board, including Regulation T, U or X.

SECTION 3.12. Investment Company Act. None of Holdings, the Borrower or any Subsidiary is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.13. Use of Proceeds. The Borrower will (a) use the proceeds of the Loans and will request the issuance of Letters of Credit only for the purposes specified in the introductory statement to this Agreement and (b) use the proceeds of Incremental Term Loans only for general corporate purposes of the Borrower and its Subsidiaries and for the purposes specified in the applicable Incremental Term Loan Assumption Agreement.

SECTION 3.14. Tax Returns. Except as set forth on Schedule 3.14, each of Holdings, the Borrower and the Subsidiaries has filed or caused to be filed all Federal tax returns, and all material state, local and foreign tax returns or materials required to have been filed by it and has paid or caused to be paid all taxes due and payable under such returns by it and all assessments received by it, except taxes that are being contested in good faith by appropriate proceedings and for which Holdings, the Borrower or such Subsidiary, as applicable, shall have set aside on its books adequate reserves in accordance with GAAP.

SECTION 3.15. No Material Misstatements. None of (a) the Confidential Information Memorandum or (b) any other written information, report, financial statement, exhibit or schedule furnished by or on behalf of Holdings or the Borrower to the Administrative Agent or any Lender in connection with the negotiation of any Loan Document or included therein or delivered pursuant thereto, taken as a whole, contained or contains any material misstatement of fact or omitted or omits to state any material fact (known to Holdings or Borrower, in the case of any document not furnished by it) necessary to make the statements therein, in the light of the circumstances under which they were or are made, not misleading; provided that to the extent any such written information, report, financial statement, exhibit or schedule was based upon or constitutes a forecast or projection, each of Holdings and the Borrower represents only that it acted in good faith and utilized reasonable assumptions and due care in the preparation of such written information, report, financial statement, exhibit or schedule (it being recognized by the Agents, Issuing Bank and Lenders that such forecasts or projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such forecasts or projections may differ materially and adversely from the forecasted or projected results).

SECTION 3.16. Employee Benefit Plans. Each of the Borrower and its ERISA Affiliates is in compliance in all material respects with the applicable provisions of ERISA and the Code and the regulations and published interpretations thereunder. No ERISA Event has occurred or is reasonably expected to occur that, when taken together

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with all other such ERISA Events, could reasonably be expected to result in material liability of the Borrower or any of its ERISA Affiliates. The present value of all benefit liabilities under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the last annual valuation date applicable thereto, exceed by more than $ 1,000,000 the fair market value of the assets of such Plan, and the present value of all benefit liabilities of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the last annual valuation dates applicable thereto, exceed by more than $ 1,000,000 the fair market value of the assets of all such underfunded Plans.

SECTION 3.17. Environmental Matters. (a) Except as set forth in Schedule 3.17 and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, none of Holdings, the Borrower or any of the Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

(b) Since the date of this Agreement, there has been no change in the status of the matters disclosed on Schedule 3.17 that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and correct description of all insurance maintained by the Borrower or by the Borrower for its Subsidiaries as of the date hereof and the Closing Date. As of each such date, such insurance is in full force and effect and all premiums have been duly paid. The Borrower and its Subsidiaries have insurance in such amounts and covering such risks and liabilities as are in accordance with normal industry practice.

SECTION 3.19. Security Documents. (a) The Guarantee and Collateral Agreement, upon execution and delivery thereof by the parties thereto, will create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral (as defined in the Guarantee and Collateral Agreement) and the proceeds thereof and (i) when the Pledged Collateral (as defined in the Guarantee and Collateral Agreement) is delivered to the Collateral Agent, and upon the Collateral Agent taking possession or control of such Pledged Collateral with respect to which a security interest may be perfected by possession or control (which possession or control shall be given to the Collateral Agent to the extent possession or control by the Collateral Agent is required by the Guarantee and Collateral Agreement and the Intercreditor Agreement), the Lien created under the Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Pledged Collateral, in each case prior and superior in right to any other person, other than with respect to Liens expressly permitted by Section 6.02, and (ii) when financing statements or other filings in appropriate form are filed in the offices specified on Schedule 3.19(a) (or, in the case of Collateral delivered after the date hereof in accordance with the provisions of Section 5.12, in the

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appropriate filing offices), the Lien created under the Guarantee and Collateral Agreement will constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral (other than such Collateral in which a security interest cannot be perfected under the Uniform Commercial Code as in effect at the relevant time in the relevant jurisdiction), in each case prior and superior in right to any other person, other than with respect to Liens expressly permitted by Section 6.02.

(b) Upon the recordation of the Guarantee and Collateral Agreement (or a short-form security agreement in form and substance reasonably satisfactory to the Borrower and the Collateral Agent) with the United States Patent and Trademark Office and the United States Copyright Office, together with the financing statements or such other filings in appropriate form filed in the offices specified on Schedule 3.19(a) (or, in the case of Collateral delivered after the date hereof in accordance with the provisions of Section 5.12, in the appropriate filing offices), the Lien created under the Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in Patents and Trademarks (as each term is defined in the Guarantee and Collateral Agreement) registered or applied for with the United States Patent and Trademark Office or Copyrights (as defined in such Guarantee and Collateral Agreement) registered or applied for with the United States Copyright Office, as the case may be, in each case prior and superior in right to any other person, other than with respect to Liens expressly permitted by Section 6.02 (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to perfect a Lien on registered or applied for Patents, Trademarks, or Copyrights, acquired by the Loan Parties after the date hereof).

(c) The Mortgages are effective to create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the Loan Parties’ right, title and interest in and to the Mortgaged Property thereunder and the proceeds thereof, and when the Mortgages are filed in the offices specified on Schedule 3.19(c) (or, in the case of any Mortgage executed and delivered after the date hereof in accordance with the provisions of Section 5.12, when such Mortgage is filed in the offices specified in the local counsel opinion delivered with respect thereto), the Mortgages shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Mortgaged Property and the proceeds thereof, in each case prior and superior in right to any other person, other than with respect to the rights of persons pursuant to Liens expressly permitted by Section 6.02 or by such Mortgage.

SECTION 3.20. Location of Real Property and Leased Premises. (a) Schedule 3.20(a) lists completely and correctly as of the Closing Date all material real property owned by the Borrower and the Subsidiaries and the addresses thereof. As of the Closing Date, the Borrower and the Subsidiaries own in fee all the real property set forth on Schedule 3.20(a), except (i) for minor defects in title and other encumbrances that constitute Liens permitted by Section 6.02 that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and (ii) as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

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(b) Schedule 3.20(b) lists completely and correctly as of the Closing Date all material real property leased by the Borrower and the Subsidiaries and the addresses thereof. As of the Closing Date, the Borrower and the Subsidiaries have valid leases in all the real property set forth on Schedule 3.20(b), except (i) for minor defects in title and other encumbrances that constitute Liens permitted by Section 6.02 that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and (ii) as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

SECTION 3.21. Labor Matters. As of the date hereof and the Closing Date, there are no strikes, lockouts or slowdowns against Holdings, the Borrower or any Subsidiary pending or, to the knowledge of Holdings or the Borrower, threatened. The hours worked by and payments made to employees of Holdings, the Borrower and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters in any manner which could reasonably be expected to result in a Material Adverse Effect. All payments due from Holdings, the Borrower or any Subsidiary, or for which any claim may be made against Holdings, the Borrower or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of Holdings, the Borrower or such Subsidiary except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which Holdings, the Borrower or any Subsidiary is bound.

SECTION 3.22. Solvency. Immediately after the consummation of the Transactions to occur on the Closing Date and immediately following the making of each Loan and after giving effect to the application of the proceeds of each Loan on the Closing Date, (a) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) each Loan Party will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Closing Date.

SECTION 3.23. Sanctioned Persons. None of Holdings, the Borrower or any Subsidiary nor, to the knowledge of the Borrower, any director, officer, agent, employee or Affiliate of Holdings, the Borrower or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Borrower will not directly or indirectly use the proceeds

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of the Loans or the Letters of Credit or otherwise make available such proceeds to any person, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

ARTICLE IV

Conditions of Lending

The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder are subject to the satisfaction of the following conditions:

SECTION 4.01. All Credit Events. On the date of each Borrowing (other than a conversion or a continuation of a Borrowing), including each Borrowing of a Swingline Loan and on the date of each issuance, amendment, extension or renewal of a Letter of Credit (each such event being called a “Credit Event”):

(a) The Administrative Agent shall have received a notice of such Borrowing as required by Section 2.03 (or such notice shall have been deemed given in accordance with Section 2.02) or, in the case of the issuance, amendment, extension or renewal of a Letter of Credit, the Issuing Bank and the Administrative Agent shall have received a notice requesting the issuance, amendment, extension or renewal of such Letter of Credit as required by Section 2.23(b) or, in the case of the Borrowing of a Swingline Loan, the Swingline Lender and the Administrative Agent shall have received a notice requesting such Swingline Loan as required by Section 2.22(b).

(b) The representations and warranties set forth in Article III and in each other Loan Document shall be true and correct in all material respects on and as of the date of such Credit Event with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date.

(c) At the time of and immediately after such Credit Event, no Default or Event of Default shall have occurred and be continuing.

Each Credit Event shall be deemed to constitute a representation and warranty by the Borrower and Holdings on the date of such Credit Event as to the matters specified in paragraphs (b) and (c) of this Section 4.01.

SECTION 4.02. First Credit Event. On the Closing Date:

(a) The Administrative Agent shall have received, on behalf of itself, the Lenders and the Issuing Bank, a favorable written opinion of (i) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for Holdings and the Borrower, substantially to the effect set forth in Exhibit G-1, and (ii) each local counsel listed on Schedule 4.02(a), substantially to the effect set forth in Exhibit G-2, in each case (A) dated the Closing Date, (B) addressed to the Issuing Bank, the Administrative Agent and the Lenders, and (C) covering such other matters relating to the Loan Documents and the Transactions as the Administrative Agent shall reasonably request, and Holdings and the Borrower hereby request such counsel to deliver such opinions.

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(b) All legal matters incident to this Agreement, the Borrowings and extensions of credit hereunder and the other Loan Documents shall be satisfactory to the Lenders, to the Issuing Bank and to the Administrative Agent.

(c) The Administrative Agent shall have received (i) a copy of the certificate or articles of incorporation, including all amendments thereto, of each Loan Party, certified as of a recent date by the Secretary of State of the state of its organization, and a certificate as to the good standing of each Loan Party as of a recent date, from such Secretary of State; (ii) a certificate of the Secretary or Assistant Secretary of each Loan Party dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws of such Loan Party as in effect on the Closing Date and at all times since, or prior to, the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such person is a party and, in the case of the Borrower, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate or articles of incorporation of such Loan Party have not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (i) above or reflected in the certified documents furnished by such Secretary of State, and (D) as to the incumbency and specimen signature of each officer executing any Loan Document or any other document delivered in connection herewith on behalf of such Loan Party; (iii) a certificate of another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant to clause (ii) above; and (iv) such other documents as the Lenders, the Issuing Bank or the Administrative Agent may reasonably request.

(d) The Administrative Agent shall have received a certificate, dated the Closing Date and signed by a Financial Officer of the Borrower, confirming compliance with the conditions precedent set forth in paragraphs (b) and (c) of Section 4.01.

(e) The Administrative Agent shall have received all Fees and other amounts due and payable on or prior to the Closing Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder or under any other Loan Document.

(f) The Security Documents shall have been duly executed by each Loan Party that is to be a party thereto and shall be in full force and effect on the Closing Date. The Collateral Agent on behalf of the Secured Parties shall have a security interest in the Collateral of the type and priority described in each Security Document.

(g) The Collateral Agent shall have received a Perfection Certificate with respect to the Loan Parties dated the Closing Date and duly executed by a Responsible Officer of Holdings and the Borrower, and shall have received the results of a search of the Uniform

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Commercial Code filings (or equivalent filings) made with respect to the Loan Parties in the states (or other jurisdictions) of formation of such persons, and, to the extent required by the Collateral Agent, in which the chief executive office of each such person is located and in the other jurisdictions in which such persons maintain property, in each case as indicated on such Perfection Certificate, together with copies of the financing statements (or similar documents) disclosed by such search, and accompanied by evidence satisfactory to the Collateral Agent that the Liens indicated in any such financing statement (or similar document) would be permitted under Section 6.02 or have been or will be contemporaneously released or terminated.

(h) (i) Each of the Security Documents, in form and substance satisfactory to the Lenders, relating to each of the Mortgaged Properties shall have been duly executed by the parties thereto and delivered to the Collateral Agent and shall be in full force and effect, (ii) each of such Mortgaged Properties shall not be subject to any Lien other than those permitted under Section 6.02, (iii) each of such Security Documents shall have been filed and recorded in the recording office as specified on Schedule 3.19(c) (or a lender’s title insurance policy, in form and substance reasonably acceptable to the Collateral Agent, insuring such Security Document as a first lien on such Mortgaged Property (subject to any Lien permitted by Section 6.02 or such Mortgage) shall have been received by the Collateral Agent) and, in connection therewith, the Collateral Agent shall have received evidence satisfactory to it of each such filing and recordation and (iv) the Collateral Agent shall have received such other documents, including a policy or policies of title insurance issued by a nationally recognized title insurance company, together with such endorsements, coinsurance and reinsurance as may be reasonably requested by the Collateral Agent, insuring the Mortgages as valid first liens on the Mortgaged Properties, free of Liens other than those permitted under Section 6.02 or such Mortgage, together with such surveys, abstracts, appraisals and legal opinions required to be furnished pursuant to the terms of the Mortgages or as reasonably requested by the Collateral Agent.

(i) The Administrative Agent shall have received a copy of, or a certificate as to coverage under, the insurance policies required by Section 5.02 and the applicable provisions of the Security Documents, each of which shall be endorsed or otherwise amended to include a customary lender’s loss payable endorsement and to name the Collateral Agent as additional insured, in form and substance reasonably satisfactory to the Administrative Agent.

(j) Holdings shall have received gross cash proceeds of not less than $62,200,000 from the Equity Contributions.

(k) The Borrower shall have received gross cash proceeds of not less than $75,000,000 from the borrowing of term loans pursuant to the Second Lien Credit Agreement. The terms and conditions of the Second Lien Loan Documents (including the Intercreditor Agreement) shall be satisfactory to the Administrative Agent. The Administrative Agent shall have received copies of the Second Lien Loan Documents fully executed by all parties thereto.

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(l) All principal, premium, if any, interest, fees and other amounts due or outstanding under the Existing Debt shall have been paid in full, the commitments thereunder terminated and all guarantees and security in support thereof discharged and released, and the Administrative Agent shall have received reasonably satisfactory evidence thereof. Immediately after giving effect to the Transactions and the other transactions contemplated hereby, Holdings, the Borrower and the Subsidiaries shall have outstanding no Indebtedness or preferred stock other than (a) Indebtedness outstanding under this Agreement, (b) Indebtedness set forth on Schedule 6.01, (c) Indebtedness outstanding under the Second Lien Credit Agreement and (d) other Indebtedness permitted to be incurred under this Agreement in an aggregate outstanding principal amount not in excess of $1,000,000.

(m) BTI Telecom Corp., a Subsidiary Guarantor, shall have given an irrevocable notice of redemption for all the outstanding BTI Telecom Notes, and the Borrower shall have deposited $19,340,872 in an account in which the Collateral Agent has exclusive dominion and control, including the exclusive right of withdrawal, over such account until all indentures covering the BTI Telecom Notes have been discharged.

(n) The Lenders shall have received the financial statements and opinion referred to in Section 3.05, none of which shall demonstrate a material adverse change in the financial condition of the Borrower from (and shall not otherwise be materially inconsistent with) the financial statements or forecasts previously provided to the Lenders.

(o) The Administrative Agent shall have received a certificate from a Financial Officer of Holdings certifying that Holdings and its subsidiaries, on a consolidated basis after giving effect to the Transactions to occur on the Closing Date, are solvent (determined in a manner consistent with the representation in Section 3.22).

(p) All requisite Governmental Authorities and third parties set forth on Schedule 3.04 shall have approved or consented to the Transactions and the other transactions contemplated hereby to the extent required, all applicable appeal periods shall have expired and there shall not be any pending or threatened litigation, governmental, administrative or judicial action that could reasonably be expected to restrain, prevent or impose materially burdensome conditions on the Transactions or the other transactions contemplated hereby, except as identified on Schedule 3.04.

(q) The Lenders shall have received, to the extent requested, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act.

(r) Except for the Disclosed Matters, there shall be no actions, suits or proceedings at law or in equity or by or before any Governmental Authority now pending or threatened against or affecting Holdings or the Borrower or any Subsidiary or any business, property or rights of any such person that involve any Loan Document or the Transactions.

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ARTICLE V

Affirmative Covenants

Each of Holdings and the Borrower covenants and agrees with each Lender that so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan, all Fees and all other expenses or amounts payable under any Loan Document shall have been paid in full and all outstanding Letters of Credit have been canceled or have expired (or other arrangements satisfactory to the Administrative Agent and the Issuing Bank shall have been made with respect thereto) and all amounts drawn thereunder have been reimbursed in full, unless the Required Lenders shall otherwise consent in writing, each of Holdings and the Borrower will, and will cause each of the Subsidiaries to:

SECTION 5.01. Existence; Compliance with Laws; Businesses and Properties. (a) Do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence, except as otherwise expressly permitted under Section 6.05.

(b) Do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, permits, franchises, authorizations, patents, copyrights, trademarks and trade names material to the conduct of its business; maintain and operate such business in substantially the manner in which it is presently conducted and operated; comply in all material respects with all applicable laws, rules, regulations and decrees and orders of any Governmental Authority, whether now in effect or hereafter enacted, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; and at all times maintain and preserve all property material to the conduct of such business and keep such property in good repair, working order and condition (other than wear and tear occurring in the ordinary course of business) and from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times; provided that nothing in this Section 5.01 shall prevent (i) sales of property, consolidations or mergers in accordance with Section 6.05; (ii) the withdrawal by Holdings, the Borrower or any of the Subsidiaries of its qualification as a foreign corporation in any jurisdiction where such withdrawal, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; or (iii) the abandonment by Holdings, the Borrower or any of the Subsidiaries of any rights, licenses, permits, franchises, authorizations, patents, copyrights, trademarks and trade names that such person reasonably determines are not useful to its business or no longer commercially desirable.

SECTION 5.02. Insurance. (a) Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which Holdings, the Borrower or such Subsidiary operates. Without limiting the generality of the foregoing, the Loan Parties shall maintain or cause to be maintained replacement

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value casualty insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts, with such deductibles, and covering such risks as are at all times satisfactory to the Administrative Agent in its commercially reasonable judgment. Each such policy of insurance shall (i) name the Collateral Agent for the benefit of the Secured Parties as an additional insured thereunder as its interests may appear and (ii) in the case of each business interruption and casualty insurance policy, contain a loss payable clause or endorsement, satisfactory in form and substance to the Administrative Agent, that names the Collateral Agent for the benefit of the Secured Parties as the loss payee thereunder for any covered loss in excess of $500,000 and provides for at least 10 days’ prior written notice to the Administrative Agent of any cancellation of such policy.

(b) If at any time the area in which the Premises (as defined in the Mortgages) are located is designated (i) a “flood hazard area” with an assigned “Federal Flood Zone” designation in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), obtain flood insurance in such total amount as the Administrative Agent or the Collateral Agent may from time to time require, and otherwise comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as it may be amended from time to time, or (ii) a “Zone 1” area, obtain earthquake insurance in such total amount as the Administrative Agent or the Collateral Agent may from time to time require.

(c) With respect to any Mortgaged Property, carry and maintain comprehensive general liability insurance including the “Technology General Liability Extension Endorsement” and coverage on an occurrence basis against claims made for personal injury (including bodily injury, death and property damage) with a per occurrence limit of $1,000,000 and $2,000,000 in the aggregate and umbrella liability insurance for a combined single limit of no less than $35,000,000, naming the Collateral Agent as an additional insured, on forms satisfactory to the Collateral Agent.

(d) Notify the Administrative Agent and the Collateral Agent promptly whenever any separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 5.02 is taken out by any Loan Party; and promptly deliver to the Administrative Agent and the Collateral Agent a duplicate original copy of such policy or policies.

SECTION 5.03. Taxes and Claims. Pay and discharge promptly when due all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, as well as all lawful claims for labor, materials and supplies or otherwise, before the same shall become delinquent or in default, that, if unpaid, might give rise to a Lien upon such properties or any part thereof; provided, however, that such payment and discharge shall not be required with respect to any such tax, assessment, charge, levy or claim so long as (i) such tax or claim (including any interest, penalties and additions thereto), together with all other taxes or claims (including any interest, penalties and additions thereto) then remaining unpaid, does not exceed $500,000 in the aggregate or (ii) the validity or amount thereof shall be contested in good faith by appropriate proceedings and the Borrower shall have set aside on its

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books adequate reserves with respect thereto in accordance with GAAP and such contest operates to suspend collection of the contested obligation, tax, assessment or charge and enforcement of a Lien and, in the case of a Mortgaged Property, there is no risk of forfeiture of such property.

SECTION 5.04. Financial Statements, Reports, etc. In the case of Holdings, furnish to the Administrative Agent, which shall furnish to each Lender:

(a) within 90 days after the end of each fiscal year, beginning with the fiscal year ending December 31, 2007, its consolidated balance sheet and related statements of income, stockholders’ equity and cash flows showing the financial condition of Holdings and its consolidated Subsidiaries as of the close of such fiscal year and the results of its operations and the operations of such Subsidiaries during such year, together with comparative figures for the immediately preceding fiscal year, all audited by BDO Seidman, LLP or other independent public accountants of recognized national standing and accompanied by an opinion of such accountants (which opinion shall be without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements fairly present the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;

(b) within 45 days after the end of each of the first three fiscal quarters of each fiscal year, beginning with the fiscal quarter ending September 30, 2007, its consolidated balance sheet and related statements of income, stockholders’ equity and cash flows showing the financial condition of Holdings and its consolidated Subsidiaries as of the close of such fiscal quarter and the results of its operations and the operations of such Subsidiaries during such fiscal quarter and the then elapsed portion of the fiscal year, and comparative figures for the same periods in the immediately preceding fiscal year, all certified by one of its Financial Officers as fairly presenting the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments;

(c) concurrently with any delivery of financial statements under paragraph (a), or (b) above, a certificate of the accounting firm (in the case of paragraph (a)) or Financial Officer (in the case of paragraph (a), to the extent not included in a certificate of the accounting firm, and paragraph (b)) opining on or certifying such statements (which certificate, when furnished by an accounting firm, may be limited to accounting matters and/or compliance with the financial covenants hereunder and disclaim responsibility for legal interpretations) (i) certifying that no Event of Default or Default has occurred or, if such an Event of Default or Default has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto and (ii) setting forth computations in reasonable detail satisfactory to the Administrative Agent demonstrating compliance with the covenants contained in Sections 6.10, 6.11, 6.12 and 6.13 and, in the case of a certificate delivered with the financial statements required by paragraph (a) above, setting forth Holdings’ calculation of Excess Cash Flow;

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(d) within 90 days after the beginning of each fiscal year of Holdings, a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and related statements of projected operations and cash flows as of the end of and for such fiscal year and setting forth the assumptions used for purposes of preparing such budget) and, promptly when available, any significant revisions of such budget;

(e) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by Holdings, the Borrower or any Subsidiary with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed to its shareholders generally, as the case may be;

(f) promptly after the receipt thereof by Holdings or the Borrower or any of their respective subsidiaries, a copy of any final “management letter” received by any such person from its certified public accountants and the management’s response thereto;

(g) promptly after the request by any Lender, all documentation and other information that such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act;

(h) promptly after the request by the Administrative Agent or any Lender, on and after the effectiveness of the applicable provisions of the Pension Act, copies of (i) any documents described in Section 101(k)(1) of ERISA that the Borrower or any of its ERISA Affiliates may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA that the Borrower or any of its ERISA Affiliates may request with respect to any Multiemployer Plan; provided that if the Borrower or any of its ERISA Affiliates has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, the Borrower or the applicable ERISA Affiliate shall promptly make a request for such documents or notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof; and

(i) promptly, from time to time, such other information regarding the operations, business affairs and financial condition of Holdings, the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.

SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative Agent, the Issuing Bank and each Lender prompt written notice of the following:

(a) any Event of Default or Default, specifying the nature and extent thereof and the corrective action (if any) taken or proposed to be taken with respect thereto;

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(b) the filing or commencement of, or any written non-frivolous (as reasonably determined in good faith by a Responsible Officer of Holdings or the Borrower) threat or written non-frivolous (as reasonably determined in good faith by a Responsible Officer of Holdings or the Borrower) notice of intention of any person to file or commence (in each case, that is actually received by a Responsible Officer of Holdings or the Borrower), any action, suit or proceeding, whether at law or in equity or by or before any Governmental Authority, against the Borrower or any Affiliate thereof that could reasonably be expected to result in a Material Adverse Effect;

(c) any development that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect; and

(d) any change in Holdings’ corporate rating by S&P, in Holdings’ corporate family rating by Moody’s or in the ratings of the Credit Facilities by S&P or Moody’s, or any written notice actually received from either such agency indicating its intent to effect such a change or to place Holdings or the Credit Facilities on a “CreditWatch” or “WatchList” or any substantially similar list maintained by S&P or Moody’s, in each case with negative implications, or its cessation of, or its intent to cease, rating Holdings or the Credit Facilities.

SECTION 5.06. Information Regarding Collateral. (a) Except in connection with a transaction permitted by Section 6.05 following which any Loan Party shall cease to be a Loan Party, furnish to the Administrative Agent prompt written notice of any change (i) in any Loan Party’s corporate name, (ii) in the jurisdiction of organization or formation of any Loan Party, (iii) in any Loan Party’s identity or corporate structure or (iv) in any Loan Party’s Federal Taxpayer Identification Number. Holdings and the Borrower agree not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral as contemplated hereunder and by the Security Documents. Holdings and the Borrower also agree promptly to notify the Administrative Agent if any material portion of the Collateral is damaged or destroyed.

(b) In the case of the Borrower, each year, at the time of delivery of the annual financial statements with respect to the preceding fiscal year pursuant to Section 5.04(a), deliver to the Administrative Agent a certificate of a Financial Officer setting forth the information required pursuant to Section 2 of the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Closing Date or the date of the most recent certificate delivered pursuant to this Section 5.06.

SECTION 5.07. Maintaining Records; Access to Properties and Inspections; Maintenance of Ratings. (a) Keep proper books of record and account in which full, true and correct entries in conformity with GAAP and all requirements of law are made of all dealings and transactions in relation to its business and activities. Each Loan Party will, and will cause each of its subsidiaries to, permit any representatives designated by

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the Administrative Agent (for itself and the Lenders) to visit and inspect the financial records and the properties of such person not more than once each fiscal year prior to an Event of Default at reasonable times and as often as reasonably requested during the continuance of an Event of Default and to make extracts from and copies of such financial records, and permit any representatives designated by the Administrative Agent (for itself and the Lenders) to discuss the affairs, finances and condition of such person with the officers thereof and independent accountants therefor.

(b) In the case of Holdings and the Borrower, use commercially reasonable efforts to cause the Credit Facilities to be continuously rated by S&P and Moody’s, and in the case of Holdings, use commercially reasonable efforts to maintain a corporate rating from S&P and a corporate family rating from Moody’s, in each case in respect of Holdings.

SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and request the issuance of Letters of Credit only for the purposes specified in the introductory statement to this Agreement.

SECTION 5.09. Employee Benefits. (a) Comply in all material respects with the applicable provisions of ERISA and the Code and (b) furnish to the Administrative Agent as soon as possible after, and in any event within ten days after any responsible officer of Holdings, the Borrower or any ERISA Affiliate knows or has reason to know that, any ERISA Event has occurred that, alone or together with any other ERISA Event could reasonably be expected to result in liability of the Borrower or any ERISA Affiliate in an aggregate amount exceeding $1,000,000, a statement of a Financial Officer of Holdings or the Borrower setting forth details as to such ERISA Event and the action, if any, that Holdings or the Borrower proposes to take with respect thereto.

SECTION 5.10. Compliance with Environmental Laws. Comply, and use commercially reasonable efforts to cause all lessees and other persons occupying its properties to comply, in all material respects with all Environmental Laws applicable to its operations and properties; obtain and renew all material environmental permits necessary for its operations and properties; and conduct any remedial action required by and in accordance with Environmental Laws; provided, however, that none of Holdings, the Borrower or any Subsidiary shall be required to undertake any remedial action required by Environmental Laws to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.

SECTION 5.11. Preparation of Environmental Reports. If a Default caused by reason of a breach of Section 3.17 or Section 5.10 shall have occurred and be continuing for more than 20 Business Days without Holdings, the Borrower or any Subsidiary commencing activities reasonably likely to cure such Default, at the written request of the Required Lenders through the Administrative Agent, provide to the Lenders within 45 days after such request, at the expense of the Loan Parties, an environmental site assessment report regarding the matters which are the subject of such Default prepared by an environmental consulting firm reasonably acceptable to the Administrative Agent and indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance or remedial action in connection with such Default.

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SECTION 5.12. Further Assurances. Execute any and all further documents, financing statements, agreements and instruments, and take all further action (including filing Uniform Commercial Code and other financing statements, mortgages and deeds of trust) that may be required under applicable law, or that the Required Lenders, the Administrative Agent or the Collateral Agent may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority of the security interests created or intended to be created hereunder and by the Security Documents. The Borrower will cause any subsequently acquired or organized Domestic Subsidiary (and, to the extent no adverse tax consequences to Holdings or any of its Subsidiaries would result therefrom, Foreign Subsidiary) to become a Loan Party by executing or joining the Guarantee and Collateral Agreement and each applicable Security Document in favor of the Collateral Agent. In addition, from time to time, each Loan Party will, at its cost and expense, promptly secure the Obligations by pledging or creating, or causing to be pledged or created, in accordance hereunder and with the applicable Security Documents, perfected security interests with respect to such of its assets and properties intended to comprise Collateral hereunder and under the Security Documents as the Administrative Agent or the Required Lenders shall designate (it being understood that it is the intent of the parties that the Obligations shall be secured by substantially all the assets of the Borrower and its Subsidiaries (including real and other properties acquired subsequent to the Closing Date but subject to the exceptions described herein and in the Security Documents)). Such security interests and Liens on the Collateral will be created under the Security Documents and other security agreements, mortgages, deeds of trust and other instruments and documents in form and substance reasonably satisfactory to the Collateral Agent, and the relevant Loan Party shall deliver or cause to be delivered to the Lenders all such instruments and documents (including legal opinions, title insurance policies and lien searches) as the Collateral Agent shall reasonably request to evidence compliance with this Section; provided, that Mortgages and related documents reasonably requested by the Collateral Agent shall be provided only in respect of fee owned property promptly following the request of the Collateral Agent and only in respect of such property having a book value in excess of $250,000 individually (and in furtherance of the foregoing, the Borrower will give prompt notice to the Administrative Agent of the acquisition by any Loan Party of any such real property interests). Each of the Loan Parties agrees to provide such evidence as the Collateral Agent shall reasonably request as to the perfection and priority status of each such security interest and Lien.

SECTION 5.13. Interest Rate Protection. No later than the 90th day after the Closing Date, the Borrower shall enter into, and for a minimum of two years thereafter maintain, Hedging Agreements reasonably acceptable to the Administrative Agent that result in at least 50% of the aggregate principal amount of the sum of (a) the Term Loans and (b) the term loans under the Second Lien Credit Agreement being effectively subject to a fixed or maximum interest rate reasonably acceptable to the Administrative Agent.

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ARTICLE VI

Negative Covenants

Each of Holdings and the Borrower covenants and agrees with each Lender that, so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan, all Fees and all other expenses or amounts payable under any Loan Document have been paid in full and all outstanding Letters of Credit have been cancelled or have expired (or other arrangements satisfactory to the Administrative Agent and the Issuing Bank have been made with respect thereto) and all amounts drawn thereunder have been reimbursed in full, unless the Required Lenders shall otherwise consent in writing, neither Holdings nor the Borrower will, nor will they cause or permit any of the Subsidiaries to:

SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any Indebtedness, except:

(a) Indebtedness created hereunder and under the other Loan Documents;

(b) intercompany Indebtedness of Holdings and the Subsidiaries to the extent permitted by Section 6.04(c);

(c) Indebtedness of Holdings or any Subsidiary incurred to finance the acquisition, construction, improvement or lease of any equipment, fixed or capital assets, and extensions, renewals, refinancings and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness is incurred prior to or within 120 days after such acquisition or lease or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this Section 6.01(c), when combined with the aggregate principal amount of all Capital Lease Obligations and Synthetic Lease Obligations incurred pursuant to Section 6.01(d), shall not exceed $10,000,000 at any time outstanding;

(d) Capital Lease Obligations and Synthetic Lease Obligations (including those arising in connection with any sale and lease-back transaction permitted pursuant to Section 6.03) in an aggregate principal amount, when combined with the aggregate principal amount of all Indebtedness incurred pursuant to Section 6.01(c), not in excess of $10,000,000 at any time outstanding;

(e) Indebtedness under statutory or regulatory obligations, bankers’ acceptances, governmental contracts, or with respect to workers’ compensation claims, and Indebtedness (other than Indebtedness for borrowed money) pursuant to any guaranties, performance bonds, letters of credit, surety bonds, pledges, deposits, return of money bonds or other arrangements made to secure the performance of tenders, bids, contracts, leases, franchises, surety, statutory, regulatory or other similar governmental obligations, appeal bonds, or similar obligations incurred in the ordinary course of business;

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(f) Indebtedness incurred under the Second Lien Credit Agreement and the other Second Lien Loan Documents in an aggregate principal amount not exceeding $75,000,000 at any time outstanding plus the amount of any “PIK Increase” (under and as defined in the Second Lien Credit Agreement) added to the principal amount thereunder in accordance with the terms of the Second Lien Credit Agreement, and subject to the terms of the Intercreditor Agreement, Indebtedness incurred to extend, refinance, renew or replace such Indebtedness;

(g) Indebtedness incurred by Holdings or any of its Subsidiaries arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guaranties or letters of credit, surety bonds or performance bonds securing the performance of Holdings or any such Subsidiary pursuant to such agreements, in connection with Permitted Acquisitions or permitted dispositions of any business, assets or Subsidiary of Holdings or any of its Subsidiaries;

(h) Indebtedness in respect of netting services, overdraft protections and otherwise in connection with deposit accounts;

(i) Guarantees (other than in respect of Indebtedness for borrowed money) in the ordinary course of business of the obligations of suppliers, customers, franchisees and licensees of Holdings and its Subsidiaries;

(j) Guarantees of Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01; provided, that if the Indebtedness that is being Guaranteed is unsecured and/or subordinated to the Obligations, the Guarantee shall also be unsecured and/or subordinated to the Obligations;

(k) Indebtedness existing on the Closing Date and described in Schedule 6.01, but not any extensions, renewals, refinancings or replacements of such Indebtedness except (i) extensions, renewals, refinancings and replacements expressly provided for in the agreements evidencing any such Indebtedness as the same are in effect on the date of this Agreement and (ii) extensions, renewals, refinancings and replacements of any such Indebtedness if the terms and conditions thereof are not less favorable to the obligor thereon or to the Lenders than the Indebtedness being extended, renewed, refinanced or replaced, and the average life to maturity thereof is greater than or equal to that of the Indebtedness being extended, renewed, refinanced or replaced; provided, such Indebtedness permitted under the immediately preceding clause (i) or (ii) above shall not (A) include Indebtedness of an obligor that was not an obligor with respect to the Indebtedness being extended, renewed or refinanced, (B) exceed in a principal amount the Indebtedness being extended, renewed, refinanced or replaced plus the amount of any interest, premium, or penalties required to be paid thereon plus fees and expenses associated therewith or (C) be incurred, created or assumed if any Default or Event of Default has occurred and is continuing or would result therefrom;

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(l) (i) Indebtedness of a person or Indebtedness attaching to assets of a person that, in either case, becomes a Subsidiary or Indebtedness attaching to assets that are acquired by Holdings or any of the Subsidiaries, in each case after the Closing Date (including pursuant to a Permitted Acquisition), in an aggregate amount not to exceed $10,000,000 at any one time outstanding, provided that (x) such Indebtedness existed at the time such person became a Subsidiary or at the time such assets were acquired and, in each case, was not created in anticipation thereof and (y) such Indebtedness is not Guaranteed in any respect by Holdings or any Subsidiary (other than by any such person that so becomes a Subsidiary), and (ii) any extensions, renewals, refinancings and replacements of any Indebtedness specified in subclause (i) above, provided, that (1) the principal amount of any such Indebtedness is not increased above the principal amount thereof outstanding immediately prior to such extension, renewal, refinancing or replacement plus the amount of any interest, premium or penalties required to be paid thereon plus fees and expenses associated therewith, (2) the direct and contingent obligors with respect to such Indebtedness are not changed and (3) such Indebtedness shall not be secured by any assets other than the assets securing the Indebtedness being renewed, extended or refinanced;

(m) Indebtedness in respect of Hedging Agreements permitted pursuant to Section 6.04; and

(n) other Indebtedness of Holdings or the Subsidiaries in an aggregate principal amount not exceeding $10,000,000 at any time outstanding; provided that, except as permitted by Section 6.02(r) or (s), such Indebtedness shall be unsecured.

SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on any property or assets (including Equity Interests or other securities of any person, including the Borrower or any Subsidiary) now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except:

(a) Liens on property or assets of Holdings and its Subsidiaries existing on the date hereof and set forth in Schedule 6.02 or on a title report delivered pursuant to Section 4.02(h) or Section 5.12; provided that such Liens shall secure only those obligations which they secure on the date hereof and extensions, renewals, refinancings and replacements thereof permitted hereunder;

(b) any Lien created under the Loan Documents;

(c) any Lien existing on any property or asset prior to the acquisition thereof by Holdings or any Subsidiary or existing on any property or assets of any person that becomes a Subsidiary after the date hereof prior to the time such person becomes a Subsidiary (including pursuant to a Permitted Acquisition), and Liens securing Indebtedness permitted pursuant to Section 6.01(m) above, as the case may be; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such person becoming a Subsidiary, (ii) such

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Lien does not apply to any other property or assets of Holdings, the Borrower or any Subsidiary and (iii) such Lien secures only those obligations which it secures on the date of such acquisition or the date such person becomes a Subsidiary (and extensions, renewals, refinancings and replacements thereof), as the case may be;

(d) any Second Priority Lien;

(e) Liens for taxes not yet due or which are being contested in compliance with Section 5.03;

(f) carriers’, warehousemen’s, landlords’ mechanics’, materialmen’s, repairmen’s, banks’ (including rights of set-off) or other like Liens arising in the ordinary course of business or imposed by law and securing obligations that are not due and payable or which are being contested in compliance with Section 5.03;

(g) pledges and deposits made (including in respect of letters of credit) and letters of credit provided in the ordinary course of business in compliance with workmen’s compensation, unemployment insurance and other social security laws or regulations;

(h) deposits to secure the performance of bids, tenders, contracts (other than for Indebtedness), leases (other than Capital Lease Obligations), statutory, regulatory or other similar governmental obligations, surety and appeal bonds, performance bonds, return of money bonds, bankers’ acceptances, government contracts, and letters of credit provided (and deposits to secure such letters of credit) in connection with any of the foregoing, and other obligations of a like nature incurred in the ordinary course of business;

(i) zoning (or similar) restrictions, easements, rights-of-way, restrictions on use of real property and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and do not materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of Holdings or any of its Subsidiaries;

(j) Liens securing Indebtedness permitted pursuant to Section 6.01(c) and Section 6.01(d); provided that (i) with respect to Indebtedness under Section 6.01(c), such security interests are incurred, and the Indebtedness secured thereby is created, within 120 days after such acquisition or lease or the completion of such construction or improvement, (ii) the Indebtedness secured thereby does not exceed 100% of the lesser of the cost or the fair market value of such fixed or capital assets, improvements or equipment at the time of such acquisition, improvement, construction or lease and (iii) such security interests do not apply to any other property or assets of the Borrower or any Subsidiary;

(k) Liens arising out of judgments or awards in connection with court proceedings which do not constitute an Event of Default;

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(l) any interest or title of a lessor or sublessor under any lease of real estate permitted hereunder;

(m) Liens solely on any cash earnest money deposits made by Holdings or any of the Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder;

(n) purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property entered into in the ordinary course of business;

(o) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(p) non-exclusive outbound licenses of patents, copyrights, trademarks and other intellectual property rights granted by Holdings or any of the Subsidiaries in the ordinary course of business and not interfering in any respect with the ordinary conduct of or materially detracting from the value of the business of Holdings or such Subsidiary;

(q) Southern Liens;

(r) Liens on the assets of Foreign Subsidiaries (other than the Collateral) securing Indebtedness permitted to be incurred pursuant to Section 6.01(b) or (n); and

(s) other Liens that do not, individually or in the aggregate, secure obligations (or encumber property with a fair market value) in excess of $2,500,000 at any one time.

SECTION 6.03. Sale and Lease-Back Transactions. Enter into any arrangement, directly or indirectly, with any person whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred unless (a) the sale or transfer of such property is permitted by Section 6.05 and (b) any Capital Lease Obligations, Synthetic Lease Obligations or Liens arising in connection therewith are permitted by Sections 6.01 and 6.02, as the case may be.

SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire any Equity Interests, evidences of indebtedness or other securities of, make or permit to exist any loans or advances to, or make or permit to exist any investment or any other interest in, any other person, except:

(a) (i) investments by Holdings, the Borrower and the Subsidiaries existing on the date hereof in the Equity Interests of the Borrower and the Subsidiaries and other investments set forth on Schedule 6.04 and (ii) additional

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investments by Holdings, the Borrower and the Subsidiaries in the Equity Interests of the Borrower and the Subsidiaries; provided that (A) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Guarantee and Collateral Agreement (subject to the limitations applicable to voting stock of a Foreign Subsidiary referred to therein and other limitations permitted pursuant to Section 6.06(b)) and (B) the aggregate amount of investments made after the Closing Date by Loan Parties in, and loans and advances made after the Closing Date by Loan Parties to, Subsidiaries that are not Loan Parties (determined without regard to any write-downs or write-offs of such investments, loans and advances) shall not exceed $10,000,000 at any time outstanding;

(b) Permitted Investments;

(c) loans or advances made by Holdings or the Borrower to any Subsidiary and made by any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged to the Collateral Agent for the ratable benefit of the Secured Parties pursuant to the Guarantee and Collateral Agreement and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in clause (a) above;

(d) investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

(e) accounts receivable arising, and trade credit granted, in the ordinary course of business, and investments in any Equity Interests or other securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors, and any deposits, prepayments and other credits to suppliers made in the ordinary course of business;

(f) the Borrower and the Subsidiaries may make loans and advances in the ordinary course of business to their respective employees so long as the aggregate principal amount thereof at any time outstanding (determined without regard to any write-downs or write-offs of such loans and advances) shall not exceed $5,000,000;

(g) the Borrower and the Subsidiaries may enter into Hedging Agreements that (i) are required by Section 5.13 or (ii) are not speculative in nature;

(h) the Borrower or any Subsidiary may acquire all or substantially all the assets of a person or line of business of such person, or Holdings, the Borrower or any Subsidiary may acquire not less than 100% of the Equity Interests (other than directors’ qualifying shares) of a person (referred to herein as the “Acquired Entity”); provided that (i) such acquisition was not preceded by an unsolicited tender offer for such Equity Interests by, or proxy contest initiated by, Holdings,

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the Borrower or any Subsidiary; (ii) the Acquired Entity shall be in a similar line of business as that of the Borrower and the Subsidiaries as conducted during the current and most recent preceding calendar year; and (iii) at the time of such transaction (A) both before and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing; (B) the Borrower would be in compliance with the covenants set forth in Sections 6.11, 6.12 and 6.13 as of the most recently completed period of four consecutive fiscal quarters ending prior to such transaction for which the financial statements and certificates required by Section 5.04(a) or 5.04(b), as the case may be, and Section 5.04(c) have been delivered or for which comparable financial statements have been filed with the Securities and Exchange Commission, after giving pro forma effect to such transaction and to any other event occurring after such period as to which pro forma recalculation is appropriate (including any other transaction described in this Section 6.04(h) occurring after such period) as if such transaction had occurred as of the first day of such period (assuming, for purposes of pro forma compliance with Sections 6.12 and 6.13, that the maximum ratios permitted at the time by such Sections were in fact 0.25 to 1.00 less than the ratios actually provided for in such Section at such time); (C) after giving effect to such acquisition, the sum of (x) unrestricted cash and Permitted Investments of the Borrower and the Subsidiaries plus (y) unused and available Revolving Credit Commitments shall equal at least $5,000,000; (D) the Aggregate Consideration paid in connection with such acquisition and any other acquisitions pursuant to this Section 6.04(h) shall not in the aggregate exceed $50,000,000; (E) Holdings shall have delivered a certificate of a Financial Officer, certifying as to the foregoing and containing reasonably detailed calculations in support thereof, in form and substance satisfactory to the Administrative Agent and (F) the Borrower shall comply, and shall cause the Acquired Entity to comply, with the applicable provisions of Section 5.12 and the Security Documents (any acquisition of an Acquired Entity meeting all the criteria of this Section 6.04(h) being referred to herein as a “Permitted Acquisition”);

(i) Capital Expenditure permitted by Section 6.10;

(j) non-cash consideration issued by the purchaser of assets in connection with a sale of such assets to the extent permitted by Section 6.05; and

(k) in addition to investments permitted by paragraphs (a) through (j) above, additional investments, loans and advances by the Borrower and the Subsidiaries so long as the aggregate amount invested, loaned or advanced pursuant to this paragraph (k) (determined without regard to any write-downs or write-offs of such investments, loans and advances) does not exceed $5,000,000 in the aggregate.

SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions. (a) Merge into or consolidate with any other person, or permit any other person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all the assets (whether now

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owned or hereafter acquired) of the Borrower or less than all the Equity Interests of any Subsidiary, or purchase, lease or otherwise acquire (in one transaction or a series of transactions) all or any substantial part of the assets of any other person, except that (i) the Borrower and any Subsidiary may purchase and sell inventory in the ordinary course of business and (ii) if at the time thereof and immediately after giving effect thereto no Event of Default or Default shall have occurred and be continuing (A) any wholly owned Subsidiary may merge into the Borrower in a transaction in which the Borrower is the surviving corporation, (B) any wholly owned Subsidiary may merge into or consolidate with any other wholly owned Subsidiary in a transaction in which the surviving entity is a wholly owned Subsidiary and no person other than the Borrower or a wholly owned Subsidiary receives any consideration (provided that if any party to any such transaction is a Loan Party, the surviving entity of such transaction shall be a Loan Party), (C) any Foreign Subsidiary may merge into or consolidate with any other Foreign Subsidiary, (D) any Subsidiary may be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to Borrower or any wholly-owned Subsidiary, (E) any Foreign Subsidiary may be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to any Foreign Subsidiary, (F) the Borrower and the Subsidiaries may make Permitted Acquisitions and (G) Holdings and the Subsidiaries may engage in any Permitted Reorganization.

(b) Make any Asset Sale otherwise permitted under paragraph (a) above, except:

(i) in a transaction referred to in Section 6.03; provided that the aggregate fair market value of all assets sold, transferred, leased or disposed of pursuant to this clause (i) shall not exceed $10,000,000;

(ii) sales, transfers or other dispositions set forth in Schedule 6.05;

(iii) any Permitted Reorganization;

(iv) Restricted Payments permitted pursuant to Section 6.06(a);

(v) in a transaction permitted pursuant to Section 6.04; and

(vi) any other Asset Sale (x) for consideration at least 75% of which is cash, (y) such consideration is at least equal to the fair market value of the assets being sold, transferred, leased or disposed of and (z) the fair market value (determined in good faith by the board of directors or other similar governing body of the entity making such disposition) of all assets sold, transferred, leased or disposed of pursuant to this clause (vi) shall not exceed $20,000,000 in the aggregate.

To the extent any Subsidiary or Collateral is sold as permitted by this Section 6.05, or the Required Lenders or all the Lenders, as applicable, waive the provisions of this Section 6.05 with respect to the sale of any Subsidiary or Collateral,

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such Subsidiary or Collateral (unless sold to a Loan Party) shall be sold free and clear of the Liens created by the Security Documents, and the Agents shall take all actions reasonably requested by the applicable Loan Party, at the sole cost and expense of the applicable Loan Party, in order to effect the foregoing.

SECTION 6.06. Restricted Payments; Restrictive Agreements. (a) Declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment (including pursuant to any Synthetic Purchase Agreement), or incur any obligation (contingent or otherwise) to do so; provided, however, that (i) any Subsidiary may declare and make dividends or make other distributions ratably to its equity holders, (ii) Holdings and any Subsidiary may purchase, redeem, retire, defease or otherwise acquire for value any of the Equity Interests of Holdings (A) in exchange for other Equity Interests of Holdings (including in connection with a Benefit Plan Exchange Offer), (B) upon the conversion of preferred Equity Interests of Holdings or the vesting, delivery, exercise, exchange or conversion of stock options, restricted stock units, warrants or similar rights to acquire Equity Interests of Holdings, (C) in connection with any tender by the holder of Equity Interests of Holdings of such Equity Interests in payment of withholding or other taxes relating to the vesting, delivery, exercise, exchange or conversion of stock options, restricted stock, restricted stock units, warrants or other Equity Interests of Holdings or other similar rights to acquire Equity Interests of Holdings or (D) if tendered in settlement of indemnification or similar claims by Holdings against a holder of the Equity Interests of Holdings, (iii) so long as no Event of Default or Default shall have occurred and be continuing or would result therefrom, the Borrower may, or the Borrower may make distributions to Holdings so that Holdings may, repurchase its Equity Interests owned by employees of Holdings, the Borrower or the Subsidiaries or make payments to employees of Holdings, the Borrower or the Subsidiaries upon termination of employment in connection with the exercise of stock options, stock appreciation rights or similar equity incentives or equity based incentives pursuant to management incentive plans or in connection with the death or disability of such employees in an aggregate amount not to exceed $2,500,000 in any fiscal year, (iv) Restricted Payments may be made to a Loan Party in connection with a Permitted Reorganization, (v) Holdings may make (A) Restricted Payments of Qualified Capital Stock contemplated by the Rights Offering and (B) Restricted Payments for the repayment or redemption of Holdings’ 6% Series H Convertible Redeemable Preferred Stock with proceeds from the Rights Offering and/or the conversion of such 6% Series H Convertible Redeemable Preferred Stock into Common Stock, and cash dividends in respect of such 6% Series H Convertible Redeemable Preferred Stock, (vi) Holdings, and its Subsidiaries may dividend or distribute cash in lieu of issuing fractional shares of its Equity Interests in an aggregate amount not to exceed $25,000, and (vii) the Borrower may make Restricted Payments to Holdings (w) to the extent necessary to pay scheduled principal and interest payments of Indebtedness permitted to be incurred by Holdings under Section 6.01, (x) in an amount not to exceed $1,000,000 in any fiscal year, to the extent necessary to pay general corporate and overhead expenses incurred by Holdings in the ordinary course of business and (y) in an amount necessary to pay the Tax liabilities of Holdings directly attributable to (or arising as a result of) the operations of the Borrower and the Subsidiaries; provided, however, that (A) the amount of such dividends under subclause (y) shall not exceed the amount that the Borrower and the Subsidiaries

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would be required to pay in respect of Federal, State and local taxes were the Borrower and the Subsidiaries to pay such taxes as stand alone taxpayers and (B) all Restricted Payments made to Holdings pursuant to this clause (vii) are used by Holdings for the purposes specified herein within 30 days of the receipt thereof.

(b) Enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (i) the ability of Holdings, the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets to secure the Obligations, or (ii) the ability of any Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (A) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document, (B) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to sales of assets and the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the assets or Subsidiary that is to be sold and such sale is permitted hereunder, (C) the foregoing shall not apply to restrictions and conditions contained in the Second Lien Credit Agreement or the other Second Lien Loan Documents, (D) clause (i) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness; (E) the foregoing shall not apply to any instrument governing Indebtedness permitted by Section 6.01(l) assumed in connection with any Permitted Acquisition, which encumbrance or restriction is not applicable to any person, or the properties or assets of any person, other than the person or the properties or assets of the person so acquired; (F) the foregoing shall not apply to restrictions on cash or other deposits or net worth imposed by suppliers or landlords under contracts entered into in the ordinary course of business; (G) clause (i) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof; (H) the foregoing shall not apply to customary provisions restricting assignments, subletting or other transfers contained in leases, licenses, joint venture agreements, partnership agreements, limited liability company agreements and similar agreements entered into in the ordinary course of business; (I) the foregoing shall not apply to any agreement in effect at the time such Subsidiary becomes a Subsidiary of Holdings, so long as such agreement was not entered into in connection with or in contemplation of such person becoming a Subsidiary; and (J) clause (i) of the foregoing shall not apply to the Southern Company Agreement as in effect on the Closing Date or as such is permitted to be amended, supplemented, renewed, replaced, or otherwise modified from time to time, in each case, pursuant to Section 6.09(a)(iii).

SECTION 6.07. Transactions with Affiliates. Except for transactions between or among Loan Parties, sell or transfer any property or assets to, or purchase or acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except that Holdings or any Subsidiary may engage in any of the foregoing transactions at prices and on terms and conditions not less favorable to Holdings or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties; provided, the foregoing restriction shall not apply to (a) fees paid to members of the

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board of directors (or similar governing body) of Holdings and its Subsidiaries; (b) compensation arrangements for officers and other employees of Holdings and its Subsidiaries entered into in the ordinary course of business; (c) the provision of officers’ and directors’ indemnification and insurance in the ordinary course of business to the extent permitted by applicable law; (d) transactions described in Schedule 6.07; (e) transactions or payments permitted by Sections 6.01, 6.03, 6.04, 6.05, 6.06, or 6.09(b), provided, further, that nothing in the foregoing is intended to or shall prohibit payments on or in respect of Indebtedness permitted hereunder (including Indebtedness under the Second Lien Credit Agreement); and (f) Liens permitted by Section 6.02.

SECTION 6.08. Business of Holdings, Borrower and Subsidiaries. (a) With respect to Holdings, engage in any business activities or have any assets or liabilities other than its ownership of the Equity Interests of the Borrower and BTI Telecom Corp. and liabilities incidental thereto, including its liabilities pursuant to the Loan Documents and the Second Lien Loan Documents, (b) liabilities to which it is subject under agreements in effect on the Closing Date and any extensions, refinancings, renewals, amendments, modifications or replacements of such agreements that are not less favorable to Holdings in any material respect than the agreements in effect on the Closing Date, (c) liabilities it incurs under plans and agreements (including securities purchase, investment or underwriting agreements) with respect to or in connection with its status as a parent holding company and its offering, sale and issuance of Equity Interests, (d) liabilities it incurs to its directors, officers and employees under agreements and arrangements (including employment agreements and indemnity agreements) entered into in the ordinary course of business, (e) liabilities it incurs as a signatory to agreements or other obligations together with one or more of its Subsidiaries in connection with activities of its Subsidiaries permitted by the other provisions of this Agreement (including agreements relating to Permitted Acquisitions) and (f) liabilities which it incurs under, or as expressly permitted by, this Agreement and the other Loan Documents, provided that, without limiting the generality of the foregoing, Holdings may engage in those activities that are incidental to (x) the maintenance of its existence in compliance with applicable law and (y) legal, tax and accounting matters in connection with any of the foregoing activities.

(b) With respect to the Borrower and its Subsidiaries, engage at any time in any business or business activity other than the business currently conducted by it and business activities reasonably incidental thereto or (as determined in good faith by the board of directors or other similar governing body of the Borrower or such Subsidiary) reasonable extensions thereof.

SECTION 6.09. Other Indebtedness and Agreements. (a) Permit (i) any waiver, supplement, modification, amendment, termination or release of any indenture, instrument or agreement pursuant to which any Material Indebtedness of Holdings, the Borrower or any of the Subsidiaries is outstanding if the effect of such waiver, supplement, modification, amendment, termination or release would materially increase the obligations of the obligor or confer additional material rights on the holder of such Indebtedness in each case in a manner materially adverse to the interests of the Lenders; provided that the Second Lien Loan Documents may be amended in accordance with the

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Intercreditor Agreement, (ii) any waiver, supplement, modification or amendment of the Governance Agreement or of its certificate of incorporation, by-laws, operating, management or partnership agreement or other organizational documents, in each case to the extent any such waiver, supplement, modification or amendment would be adverse to the Lenders in any material respect, provided that Holdings or any Subsidiary (x) may issue Equity Interests so long as such issuance is not prohibited by Section 6.06(a) or Section 6.15, and (y) may amend or modify its organizational documents to authorize any such Equity Interests or to effect any Permitted Reorganization, or (iii) any waiver, supplement, modification, amendment, renewal or replacement of the Southern Company Agreement, in each case to the extent any such waiver, supplement, modification, amendment, renewal or replacement would be materially more adverse to the Liens of the Secured Parties under the Security Documents.

(b) Make (or give any notice in respect thereof) any voluntary or optional payment or prepayment on, or make any distribution, whether in cash, property, securities or a combination thereof in respect of such prepayment, or directly or indirectly (including pursuant to any Synthetic Purchase Agreement) redeem, repurchase, retire or otherwise acquire for consideration, or set apart any sum for the aforesaid purposes, (i) any Indebtedness under the Second Lien Credit Agreement (or extensions, renewals, refinancings and replacements of such Indebtedness permitted pursuant to Section 6.01(f)) or (ii) any Indebtedness of Holdings and the Subsidiaries that is by its terms subordinated in right of payment to the Obligations, other than (x) prepayments of loans under the Second Lien Credit Agreement (or extensions, renewals, refinancings and replacements of such loans permitted pursuant to Section 6.01(f)) with Declined Proceeds that are not required to be used to prepay Loans or cash collateralize Letters of Credit pursuant to Section 2.13 and (y) extensions, renewals, refinancings and replacements of the Indebtedness under the Second Lien Credit Agreement permitted pursuant to Section 6.01(f) and the Intercreditor Agreement.

SECTION 6.10. Capital Expenditures. Permit the aggregate amount of Capital Expenditures made by Holdings and the Subsidiaries in any period set forth below to exceed the amount set forth below for such period (such amount, the “Scheduled Amount”):

Period:	Amount
fiscal year ending December 31, 2007	$	60,000,000
fiscal year ending December 31, 2008	$	60,000,000
fiscal year ending December 31, 2009	$	60,000,000
fiscal year ending December 31, 2010	$	65,000,000
fiscal year ending December 31, 2011	$	65,000,000
fiscal year ending December 31, 2012	$	65,000,000
fiscal years ending December 31, 2013 or thereafter	$	65,000,000

The Scheduled Amount in respect of any fiscal year commencing with the fiscal year ending on December 31, 2008, shall be increased by 50% of the unused portion of

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the Scheduled Amount for the immediately preceding fiscal year. In determining whether any amount is available for carryover, the amount expended in any fiscal year shall first be deemed to be the Scheduled Amount and then the amount carried forward to such fiscal year.

SECTION 6.11. Interest Coverage Ratio. Permit the Interest Coverage Ratio as of the last day of any fiscal quarter ending during a period set forth below, beginning with the fiscal quarter ending September 30, 2007, to be less than the ratio set forth opposite such period below:

Period	Ratio
Closing Date through to December 31, 2007	1.75:1.00
January 1, 2008 through June 30, 2008	1.85:1.00
July 1, 2008 through December 31, 2008	2.00:1.00
January 1, 2009 through December 31, 2009	2.10:1.00
January 1, 2010 and thereafter	2.25:1.00

SECTION 6.12. Maximum Leverage Ratio. Permit the Leverage Ratio as of the last day of any fiscal quarter ending during a period set forth below, beginning with the fiscal quarter ending September 30, 2007, to be greater than the ratio set forth opposite such period below:

Period	Ratio
Closing Date through September 30, 2007	5.25:1.00
October 1, 2007 through December 31, 2007	5.00:1.00
January 1, 2008 through December 31, 2008	4.75:1.00
January 1, 2009 through June 30, 2009	4.50:1.00
July 1, 2009 through December 31, 2009	4.25:1.00
January 1, 2010 through September 30, 2010	4.00:1.00
October 1, 2010 and thereafter	3.75:1.00

SECTION 6.13. Maximum First Lien Leverage Ratio. Permit the First Lien Leverage Ratio as of the last day of any fiscal quarter ending during a period set forth below, beginning with the fiscal quarter ending September 30, 2007, to be greater than the ratio set forth opposite such period below:

Period	Ratio
Closing Date through September 30, 2007	4.00:1.00
October 1, 2007 through December 31, 2007	3.75:1.00
January 1, 2008 through December 31, 2008	3.50:1.00
January 1, 2009 through June 30, 2009	3.25:1.00
July 1, 2009 through December 31, 2009	3.00:1.00
January 1, 2010 through September 30, 2010	2.75:1.00
October 1, 2010 and thereafter	2.50:1.00

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SECTION 6.14. Fiscal Year. With respect to Holdings and the Borrower, change their fiscal year-end to a date other than December 31.

SECTION 6.15. Certain Equity Securities. Issue any Equity Interest that is not Qualified Capital Stock, except for the 6% Series H Convertible Redeemable Preferred Stock issued by Holding on or before the Closing Date.

ARTICLE VII

Events of Default

If any of the following events shall occur (“Events of Default”):

(a) any representation or warranty made or deemed made in any Loan Document, or any representation, warranty, statement or information contained in any report, certificate, financial statement or other instrument furnished in connection with or pursuant to any Loan Document in writing, shall prove to have been false or misleading in any material respect when so made, deemed made or furnished;

(b) default shall be made in the payment of any principal of any Loan or the reimbursement with respect to any L/C Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise;

(c) default shall be made in the payment of any interest on any Loan or any Fee or L/C Disbursement or any other amount (other than an amount referred to in (b) above) due under any Loan Document, when and as the same shall become due and payable, and such default shall continue unremedied for a period of three Business Days;

(d) default shall be made in the due observance or performance by Holdings, the Borrower or any Subsidiary of any covenant, condition or agreement contained in Section 5.01(a), 5.05 or 5.08 or in Article VI;

(e) default shall be made in the due observance or performance by Holdings, the Borrower or any Subsidiary of any covenant, condition or agreement contained in any Loan Document (other than those specified in (b), (c) or (d) above) and such default shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent or any Lender to the Borrower;

(f) (i) Holdings, the Borrower or any Subsidiary shall fail to pay any principal, interest or other amount due in respect of any Material Indebtedness, when and as the same shall become due and payable or (ii) any other event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material

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Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity or that results in the termination or permits any counterparty to terminate any Hedging Agreement the obligations under which constitute Material Indebtedness; provided that this clause (ii) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

(g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of Holdings, the Borrower or any Subsidiary, or of a substantial part of the property or assets of Holdings, the Borrower or a Subsidiary, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Holdings, the Borrower or any Subsidiary or for a substantial part of the property or assets of Holdings, the Borrower or a Subsidiary or (iii) the winding-up or liquidation of Holdings, the Borrower or any Subsidiary; and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(h) Holdings, the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in (g) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Holdings, the Borrower or any Subsidiary or for a substantial part of the property or assets of Holdings, the Borrower or any Subsidiary, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due or (vii) take any action for the purpose of effecting any of the foregoing;

(i) one or more judgments shall be rendered against Holdings, the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, or any action (to the extent not effectively stayed) shall be legally taken by a judgment creditor to levy upon assets or properties of Holdings, the Borrower or any Subsidiary to enforce any such judgment and such judgment is for the payment of money in an aggregate amount in excess of $5,000,000 (to the extent not paid or to the extent not adequately covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage);

(j) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other such ERISA Events, could reasonably be expected to result in liability of the Borrower and its ERISA Affiliates in an aggregate amount exceeding $5,000,000;

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(k) any Guarantee under the Guarantee and Collateral Agreement for any reason shall cease to be in full force and effect, or any Guarantor shall deny in writing that it has any further liability under the Guarantee and Collateral Agreement (in each case, other than in accordance with its terms or other than as a result of the discharge or sale or other disposition of such Guarantor in accordance with the terms of the Loan Documents);

(l) any security interest purported to be created by any Security Document shall cease to be, or shall be asserted by the Borrower or any other Loan Party not to be, a valid, perfected, first priority (except as otherwise expressly provided in this Agreement or such Security Document) security interest in the securities, assets or properties covered thereby, except as the result of a release of Collateral or the discharge or sale or other disposition of such Loan Party in accordance with the terms of the Loan Documents, except to the extent that any such loss of perfection or priority results from the failure of the Collateral Agent or any Secured Party to take any action within its control (but only to the extent that the Borrower has provided such person sufficient information to take such action) and/or except to the extent that such loss is covered by a lender’s title insurance policy and the related insurer promptly after such loss shall have acknowledged in writing that such loss is covered by such title insurance policy;

(m) prior to the discharge of the obligations under and termination of the Second Lien Credit Agreement, the Intercreditor Agreement shall, in whole or in part, cease to be effective or cease to be legally valid, binding and enforceable against any party thereto (or against any person on whose behalf any such party makes any covenants or agreements therein), or otherwise not be effective to create the rights and obligations purported to be created thereunder unless the same results directly from the action or inaction of the Collateral Agent or any Secured Party; or

(n) there shall have occurred a Change in Control;

then, and in every such event (other than an event with respect to Holdings or the Borrower described in paragraph (g) or (h) above), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate forthwith the Commitments and (ii) declare the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder and under any other Loan Document, shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Loan Document to the contrary notwithstanding; and in any event

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with respect to Holdings or the Borrower described in paragraph (g) or (h) above, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder and under any other Loan Document, shall automatically become due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Loan Document to the contrary notwithstanding.

ARTICLE VIII

The Administrative Agent and the Collateral Agent

Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent and the Collateral Agent (for purposes of this Article VIII, the Administrative Agent and the Collateral Agent are referred to collectively as the “Agents”) its agent and authorizes the Agents to take such actions on its behalf and to exercise such powers as are delegated to such Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. Without limiting the generality of the foregoing, the Agents are hereby expressly authorized to execute any and all documents (including releases) with respect to the Loan Parties, the Collateral and any rights of the Secured Parties with respect thereto, as contemplated by and in accordance with the provisions of this Agreement and the Security Documents, including Section 6.05. The Lenders acknowledge and agree that the Agents shall also act, subject to and in accordance with the terms of the Intercreditor Agreement, as the administrative agent and collateral agent for the lenders under the Second Lien Credit Agreement.

Without further written consent or authorization from the Lenders or the Administrative Agent, the Collateral Agent may execute any documents or instruments necessary to (i) release any Lien encumbering any item of Collateral that is the subject of a sale or other disposition of assets permitted hereby or to which the Required Lenders (or such other Lenders as may be required to give such consent under Section 9.08) have otherwise consented or (ii) release any Guarantor from its Guarantee pursuant to Section 6.05 or with respect to which the Required Lenders (or such other Lenders as may be required to give such consent under Section 9.08) have otherwise consented.

The bank serving as the Administrative Agent and/or the Collateral Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with Holdings, the Borrower or any Subsidiary or other Affiliate thereof as if it were not an Agent hereunder.

Neither Agent shall have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) neither Agent shall be subject to any fiduciary or other implied duties, regardless of whether a

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Default has occurred and is continuing, (b) neither Agent shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that such Agent is instructed in writing to exercise by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.08), and (c) except as expressly set forth in the Loan Documents, neither Agent shall have any duty to disclose, nor shall it be liable for the failure to disclose, any information relating to Holdings, the Borrower or any of the Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent and/or Collateral Agent or any of its Affiliates in any capacity. Neither Agent shall be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.08) or in the absence of its own gross negligence or willful misconduct. Neither Agent shall be deemed to have knowledge of any Default unless and until written notice thereof is given to such Agent by Holdings, the Borrower or a Lender, and neither Agent shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to such Agent.

Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper person. Each Agent may also rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper person, and shall not incur any liability for relying thereon. Each Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

Each Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by it. Each Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of each Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the Credit Facilities as well as activities as Agent.

Subject to the appointment and acceptance of a successor Agent as provided below, either Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been

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so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation, then the retiring Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After an Agent’s resignation hereunder, the provisions of this Article and Section 9.05 shall continue in effect for the benefit of such retiring Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while acting as Agent. It is understood and agreed that no Competitor shall qualify or be appointed as a successor Agent hereunder or under any other Loan Document.

Each Lender acknowledges that it has, independently and without reliance upon the Agents or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agents or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement or any other Loan Document, any related agreement or any document furnished hereunder or thereunder.

Each Lender hereby consents to and approves each and all of the provisions of the Intercreditor Agreement, including the purchase rights set forth in Section 3.01(d) thereof, and irrevocably authorizes and directs the Administrative Agent and Collateral Agent to execute and deliver the Intercreditor Agreement and to exercise and enforce its rights and remedies and perform its obligations thereunder.

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices. Notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by fax, as follows:

(a) if to the Borrower or Holdings, to it at 7037 Old Madison Pike, Huntsville, Alabama 35806, Attention of Richard E. Fish, Jr. (Fax No. (256) 382-3935 ), with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036, Attention: Peter J. Neckles (Fax No. (212) 735-2000);

(b) if to the Administrative Agent, to Credit Suisse, Eleven Madison Avenue, New York, NY 10010, Attention of Agency Group (Fax No. (212) 325-8304); and

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(c) if to a Lender, to it at its address (or fax number) set forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to which such Lender shall have become a party hereto.

All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by fax or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 9.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 9.01. As agreed to among Holdings, the Borrower, the Administrative Agent and the applicable Lenders from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable person provided from time to time by such person.

SECTION 9.02. Survival of Agreement. All covenants, agreements, representations and warranties made by the Borrower or Holdings herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lenders and the Issuing Bank and shall survive the making by the Lenders of the Loans and the issuance of Letters of Credit by the Issuing Bank, regardless of any investigation made by the Lenders or the Issuing Bank or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any Fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not been terminated. The provisions of Sections 2.14, 2.16, 2.20, 9.05 and 9.18 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the expiration of the Commitments, the expiration of any Letter of Credit, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank.

SECTION 9.03. Binding Effect. This Agreement shall become effective when it shall have been executed by the Borrower, Holdings and the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto.

SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of the Borrower, Holdings, the Administrative Agent, the Collateral Agent, the Issuing Bank or the Lenders that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

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(b) Each Lender may assign to one or more Eligible Assignees all or a portion of its interests, rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it), with notice to the Borrower and the prior written consent of the Administrative Agent (not to be unreasonably withheld or delayed); provided, however, that (i) in the case of an assignment of a Revolving Credit Commitment, each of the Borrower, the Issuing Bank and the Swingline Lender must also give its prior written consent to such assignment (which consent shall not be unreasonably withheld or delayed) (provided, that the consent of the Borrower shall not be required to any such assignment made to another Lender or an Affiliate of a Lender or after the occurrence and during the continuance of any Event of Default), (ii) the aggregate amount of the Commitment or Loans of the assigning Lender and its concurrently assigning Affiliates subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall be not less than, $1,000,000 (or, if less, the entire remaining amount of such Lender’s Commitment or Loans of the relevant Class), (iii) the parties to each such assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance via an electronic settlement system acceptable to the Administrative Agent (or, if previously agreed with the Administrative Agent, manually), and shall pay to the Administrative Agent a processing and recordation fee of $3,500 (which fee may be waived or reduced in the sole discretion of the Administrative Agent), and (iv) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and all applicable tax forms. Upon acceptance and recording pursuant to paragraph (e) of this Section 9.04, from and after the effective date specified in each Assignment and Acceptance, (A) the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement and (B) the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.16, 2.20 and 9.05, as well as to any Fees accrued for its account and not yet paid).

(c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and that its Term Loan Commitment and Revolving Credit Commitment, and the outstanding balances of its Term Loans and Revolving Loans, in each case without giving effect to assignments thereof which have not become effective, are as set forth in such Assignment and Acceptance, (ii) except as set forth in (i) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto, or the financial condition of the Borrower or any Subsidiary or the performance or observance by the Borrower or any

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Subsidiary of any of its obligations under this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto; (iii) such assignee represents and warrants that it is an Eligible Assignee and is legally authorized to enter into such Assignment and Acceptance; (iv) such assignee confirms that it has received a copy of this Agreement, together with copies of the most recent financial statements referred to in Section 3.05(a) or delivered pursuant to Section 5.04, the Intercreditor Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (v) such assignee will independently and without reliance upon the Administrative Agent, the Collateral Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (vi) such assignee agrees to be bound by the terms of the Intercreditor Agreement; (vii) such assignee appoints and authorizes the Administrative Agent and the Collateral Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative Agent and the Collateral Agent, respectively, by the terms hereof, together with such powers as are reasonably incidental thereto; and (viii) such assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

(d) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in The City of New York a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive and the Borrower, the Administrative Agent, the Issuing Bank, the Collateral Agent and the Lenders may treat each person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Issuing Bank, the Collateral Agent and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(e) Upon its receipt of, and consent to, a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, an Administrative Questionnaire completed in respect of the assignee (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) above, if applicable, and the written consent of the Administrative Agent and, if required, the Borrower, the Swingline Lender and the Issuing Bank to such assignment and any applicable tax forms, the Administrative Agent shall promptly (i) accept such Assignment and Acceptance and (ii) record the information contained therein in the Register. No assignment shall be effective unless it has been recorded in the Register as provided in this paragraph (e).

(f) Each Lender may without the consent of the Borrower, the Swingline Lender, the Issuing Bank or the Administrative Agent sell participations to one or more banks or

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other persons (other than a Competitor) in all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided, however, that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the participating banks or other persons shall be entitled to the benefit of the cost protection provisions contained in Sections 2.14, 2.16 and 2.20 to the same extent as if they were Lenders (but, with respect to any particular participant, to no greater extent than the Lender that sold the participation to such participant) and (iv) the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and such Lender shall retain the sole right to enforce the obligations of the Borrower relating to the Loans or L/C Disbursements and to approve any amendment, modification or waiver of any provision of this Agreement (other than amendments, modifications or waivers decreasing any fees payable to such participating bank or person hereunder or the amount of principal of or the rate at which interest is payable on the Loans in which such participating bank or person has an interest, extending any scheduled principal payment date or date fixed for the payment of interest on the Loans in which such participating bank or person has an interest, increasing or extending the Commitments in which such participating bank or person has an interest or releasing any Guarantor (other than in connection with the sale of such Guarantor in a transaction permitted by Section 6.05) or all or substantially all of the Collateral).

(g) Any Lender or participant may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 9.04, disclose to the assignee or participant or proposed assignee or participant any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure of information, each such assignee or participant or proposed assignee or participant shall execute an agreement whereby such assignee or participant shall agree (subject to customary exceptions) to preserve the confidentiality of such confidential information on terms no less restrictive than those applicable to the Lenders pursuant to Section 9.16.

(h) Any Lender may at any time assign all or any portion of its rights under this Agreement to secure extensions of credit to such Lender or in support of obligations owed by such Lender; provided that no such assignment shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto.

(i) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Loan and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender

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shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Lender). In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 9.04, any SPC may (i) with notice to, but without the prior written consent of, the Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to the Granting Lender or to any financial institutions (consented to by the Borrower and Administrative Agent) providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC.

(j) Neither Holdings nor the Borrower shall assign or delegate any of its rights or duties hereunder without the prior written consent of the Administrative Agent, the Issuing Bank and each Lender, and any attempted assignment without such consent shall be null and void.

(k) In the event that any Revolving Credit Lender shall become a Defaulting Lender or S&P, Moody’s and Thompson’s BankWatch (or InsuranceWatch Ratings Service, in the case of Lenders that are insurance companies (or Best’s Insurance Reports, if such insurance company is not rated by Insurance Watch Ratings Service)) shall, after the date that any Lender becomes a Revolving Credit Lender, downgrade the long-term certificate deposit ratings of such Lender, and the resulting ratings shall be below BBB-, Baa3 and C (or BB, in the case of a Lender that is an insurance company (or B, in the case of an insurance company not rated by InsuranceWatch Ratings Service)) (or, with respect to any Revolving Credit Lender that is not rated by any such ratings service or provider, the Issuing Bank or the Swingline Lender shall have reasonably determined that there has occurred a material adverse change in the financial condition of any such Lender, or a material impairment of the ability of any such Lender to perform its obligations hereunder, as compared to such condition or ability as of the date that any such Lender became a Revolving Credit Lender) then the Issuing Bank and the Swingline Lender shall have the right, but not the obligation, at its own expense, upon notice to such Lender and the Administrative Agent, to replace such Lender with an assignee (in accordance with and subject to the restrictions contained in paragraph (b) above), and such Lender hereby agrees to transfer and assign without recourse (in accordance with and subject to the restrictions contained in paragraph (b) above) all its interests, rights and obligations in respect of its Revolving Credit Commitment to such assignee; provided, however, that (i) no such assignment shall conflict with any law, rule

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and regulation or order of any Governmental Authority and (ii) the Issuing Bank, the Swingline Lender or such assignee, as the case may be, shall pay to such Lender in immediately available funds on the date of such assignment the principal of and interest accrued to the date of payment on the Loans made by such Lender hereunder and all other amounts accrued for such Lender’s account or owed to it hereunder.

SECTION 9.05. Expenses; Indemnity. (a) The Borrower and Holdings agree, jointly and severally, to pay all actual reasonable and documented out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent, the Issuing Bank and the Swingline Lender in connection with the syndication of the Credit Facilities and the preparation and administration of this Agreement and the other Loan Documents or in connection with any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions hereby or thereby contemplated shall be consummated) or incurred by the Administrative Agent, the Collateral Agent or any Lender in connection with the enforcement or protection of its rights in connection with this Agreement and the other Loan Documents or in connection with the Loans made or Letters of Credit issued hereunder, including the reasonable and documented fees, charges and disbursements of Cravath, Swaine & Moore LLP, counsel for the Administrative Agent and the Collateral Agent, and, in connection with any such enforcement or protection, the reasonable and documented fees, charges and disbursements of any other counsel for the Administrative Agent, the Collateral Agent or any Lender; provided that such fees, charges and disbursements shall be limited to one external counsel (and appropriate local counsel) for all such persons unless there are actual or potential conflicting interests between or among such persons arising out of the matters within the scope of this Section 9.05(a).

(b) The Borrower and Holdings agree, jointly and severally, to indemnify the Administrative Agent, the Collateral Agent, each Lender, the Issuing Bank and each Related Party of any of the foregoing persons (each such person being called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable and documented counsel fees, charges and disbursements (subject to the limitations set forth in Section 9.05(a) above), incurred by or asserted against any Indemnitee arising out of, in any way connected with, or as a result of (i) the execution or delivery of this Agreement or any other Loan Document or any agreement or instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder or the consummation of the Transactions and the other transactions contemplated thereby (including the syndication of the Credit Facilities), (ii) the use of the proceeds of the Loans or issuance of Letters of Credit, (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto (and regardless of whether such matter is initiated by a third party or by the Borrower, any other Loan Party or any of their respective Affiliates), or (iv) any actual or alleged presence or Release of Hazardous Materials on any property currently or formerly owned or operated by the Borrower or any of the Subsidiaries, or any Environmental Liability related in any way to the Borrower or the Subsidiaries; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or wilful misconduct of such Indemnitee.

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(c) To the extent that Holdings and the Borrower fail to pay any amount required to be paid by them to the Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender in its capacity as such. For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the sum of the Aggregate Revolving Credit Exposure, outstanding Term Loans and unused Commitments at the time.

(d) To the extent permitted by applicable law, neither Holdings nor the Borrower shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

(e) All amounts due under this Section 9.05 shall be payable on written demand therefor.

SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender is hereby authorized at any time and from time to time, except to the extent prohibited by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of the Borrower or Holdings against any of and all the obligations of the Borrower or Holdings now or hereafter existing under this Agreement and other Loan Documents held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or such other Loan Document and although such obligations may be unmatured. The rights of each Lender under this Section 9.06 are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS MOST RECENTLY PUBLISHED AND IN EFFECT, ON

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THE DATE SUCH LETTER OF CREDIT WAS ISSUED, BY THE INTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM CUSTOMS”) AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.

SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in exercising any power or right hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Borrower or any other Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on the Borrower or Holdings in any case shall entitle the Borrower or Holdings to any other or further notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof nor any other Loan Document or any provision thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower, Holdings and the Required Lenders; provided, however, that no such agreement shall (i) decrease the principal amount of, or extend the maturity of or any scheduled principal payment date or date for the payment of any interest on any Loan or any date for reimbursement of an L/C Disbursement, or waive or excuse any such payment or any part thereof, or decrease the rate of interest on any Loan or L/C Disbursement, without the prior written consent of each Lender directly adversely affected thereby (provided that, for the avoidance of doubt, the Required Lenders may waive any prepayment, and the Required Lenders, the Borrower and Holdings may amend or modify any prepayment provisions), (ii) increase or extend the Commitment or decrease or extend the date for payment of any Fees of any Lender without the prior written consent of such Lender, (iii) amend or modify the pro rata requirements of Section 2.17, the provisions of Section 9.04(j) or the provisions of this Section or release any Guarantor (other than in connection with the sale, disposition, liquidation or dissolution of such Guarantor in a transaction permitted by Section 6.05) or all or substantially all of the Collateral, without the prior written consent of each Lender, (iv) change the provisions of any Loan Document in a manner that by its terms adversely affects the rights in respect of payments due to Lenders holding Loans of one Class differently from the rights of Lenders holding Loans of any other Class without the prior written consent of Lenders holding a majority in interest of the outstanding Loans and unused Commitments of each adversely affected Class (provided that, for the avoidance of doubt, the Required Lenders may waive any prepayment, and the Required Lenders, the Borrower and Holdings may amend or modify any prepayment provisions, in each case so long as the application as between Classes is not affected), (v) modify the protections afforded to an SPC pursuant to the provisions of Section 9.04(i) without the

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written consent of such SPC or (vi) reduce the percentage contained in the definition of the term “Required Lenders” without the prior written consent of each Lender (it being understood that with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the Term Loan Commitments and Revolving Credit Commitments on the date hereof); provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender hereunder or under any other Loan Document without the prior written consent of the Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender.

(c) Notwithstanding the foregoing, technical and conforming modifications to the Loan Documents may be made with the consent of the Borrower and the Administrative Agent to the extent necessary to integrate any Incremental Term Commitments or Incremental Revolving Credit Commitments on substantially the same basis as the Term Loans or Revolving Credit Commitments, as applicable.

SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan or participation in any L/C Disbursement, together with all fees, charges and other amounts which are treated as interest on such Loan or participation in such L/C Disbursement under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan or participation in accordance with applicable law, the rate of interest payable in respect of such Loan or participation hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan or participation but were not payable as a result of the operation of this Section 9.09 shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or participations or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and the other Loan Documents constitute the entire contract between the parties relative to the subject matter hereof. Any other previous agreement among the parties with respect to the subject matter hereof is superseded by this Agreement and the other Loan Documents. Nothing in this Agreement or in the other Loan Documents, expressed or implied, is intended to confer upon any person (other than the parties hereto and thereto, their respective successors and assigns permitted hereunder (including any Affiliate of the Issuing Bank that issues any Letter of Credit) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders) any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Loan Documents.

SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE

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LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

SECTION 9.12. Severability. In the event any one or more of the provisions contained in this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 9.13. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract, and shall become effective as provided in Section 9.03. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.

SECTION 9.14. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each of Holdings and the Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive 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 Agreement or the other Loan Documents, 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 heard and determined in such New York State or, to the 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

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by law. Nothing in this Agreement shall affect any right that the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or the other Loan Documents against the Borrower, Holdings or their respective properties in the courts of any jurisdiction.

(b) Each of Holdings and the Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Loan Documents in any New York State or Federal court. Each of the parties hereto 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.

(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 9.16. Confidentiality. Each of the Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed only in connection with this Agreement and the Transactions, and further, only (a) to its and its Affiliates’ officers, directors, employees and agents, including accountants, legal counsel and other advisors (it being understood that the persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority or quasi-regulatory authority (such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process (provided that notice of receipt of such subpoena or other legal process shall be given to the Borrower as promptly as practicable), (d) in connection with the exercise of any remedies hereunder or under the other Loan Documents or any suit, action or proceeding relating to the enforcement of its rights hereunder or thereunder, (e) subject to an agreement containing provisions substantially the same as those of this Section 9.16, to (i) any actual or prospective assignee of or participant in any of its rights or obligations under this Agreement and the other Loan Documents or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower or any Subsidiary or any of their respective obligations, (f) with the consent of the Borrower in its sole discretion or (g) to the extent such Information becomes publicly available other than as a result of a breach of this Section 9.16. For the purposes of this Section, “Information” shall mean all information received from the Borrower, Holdings or any Subsidiary and related to the Borrower, Holdings or any Subsidiary, or their respective business, other than any such information that was available to the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to its disclosure by the Borrower or Holdings; provided that, in the case of Information received from the Borrower, Holdings or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any person required to maintain the

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confidentiality of Information as provided in this Section 9.16 shall be considered to have complied with its obligation to do so if such person has exercised the same degree of care to maintain the confidentiality of such Information as such person would accord its own confidential information.

SECTION 9.17. USA PATRIOT Act Notice. Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Holdings and the Borrower that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies Holdings and the Borrower, which information includes the name and address of Holdings and the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify Holdings and the Borrower in accordance with the USA PATRIOT Act.

SECTION 9.18. Effect of Certain Inaccuracies. In the event that any financial statement or certificate delivered pursuant to Section 5.04(a) or (b) and Section 5.04(c), respectively, is inaccurate, and such inaccuracy, if corrected, would have led to the application of a higher Applicable Percentage or a higher Commitment Fee for any period (an “Applicable Period”) than the Applicable Percentage or Commitment Fee applied for such Applicable Period, then (i) the Borrower shall promptly deliver to the Administrative Agent a corrected financial statement and a corrected compliance certificate for such Applicable Period, (ii) the Applicable Percentage and the Commitment Fee shall be determined based on the corrected compliance certificate for such Applicable Period, and (iii) the Borrower shall promptly pay to the Administrative Agent (for the accounts of the applicable Lenders during the Applicable Period or their successors and assigns) the accrued additional interest or additional Commitment Fees (or both) owing as a result of such increased Applicable Percentage or Commitment Fee for such Applicable Period. This Section 9.18 shall not limit the rights of the Administrative Agent or the Lenders with respect to Section 2.07 or Article VII.

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

INTERSTATE FIBERNET, INC.,
by	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Sr. Vice President

ITC^ DELTACOM, INC.,
by	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Sr. Vice President

CREDIT SUISSE, CAYMAN ISLANDS BRANCH, individually and as Administrative Agent, Collateral Agent, Swingline Lender and Issuing Bank,
by	/s/ James Moran
Name:	James Moran
Title:	Managing Director
by	/s/ Nupur Kumar
Name:	Nupur Kumar
Title:	Associate

EX-10.2

Exhibit 10.2

FIRST LIEN GUARANTEE AND COLLATERAL AGREEMENT

dated as of

July 31, 2007

among

INTERSTATE FIBERNET, INC.,

ITC^DELTACOM, INC.,

the Subsidiaries of Holdings

from time to time party hereto

and

CREDIT SUISSE,

as Collateral Agent

TABLE OF CONTENTS

		Page
ARTICLE I
Definitions
SECTION 1.01.	First Lien Credit Agreement	2
SECTION 1.02.	Other Defined Terms	2
ARTICLE II
Guarantee
SECTION 2.01.	Guarantee	7
SECTION 2.02.	Guarantee of Payment	7
SECTION 2.03.	No Limitations, Etc	7
SECTION 2.04.	Reinstatement	8
SECTION 2.05.	Agreement To Pay; Subrogation	9
SECTION 2.06.	Information	9
ARTICLE III
Pledge of Securities
SECTION 3.01.	Pledge	9
SECTION 3.02.	Delivery of the Pledged Collateral	10
SECTION 3.03.	Representations, Warranties and Covenants	11
SECTION 3.04.	Certification of Limited Liability Company Interests and Limited Partnership Interests	12
SECTION 3.05.	Registration in Nominee Name; Denominations	12
SECTION 3.06.	Voting Rights; Dividends and Interest, Etc	12
ARTICLE IV
Security Interests in Personal Property
SECTION 4.01.	Security Interest	15
SECTION 4.02.	Representations and Warranties	16
SECTION 4.03.	Covenants	17
SECTION 4.04.	Other Actions	20
SECTION 4.05.	Covenants Regarding Patent, Trademark and Copyright Collateral	22

ARTICLE V
Remedies
SECTION 5.01.	Remedies Upon Default	24
SECTION 5.02.	Application of Proceeds	26
SECTION 5.03.	Grant of License to Use Intellectual Property	26
SECTION 5.04.	Securities Act, Etc	27
ARTICLE VI
Indemnity, Subrogation and Subordination
SECTION 6.01.	Indemnity and Subrogation	28
SECTION 6.02.	Contribution and Subrogation	28
SECTION 6.03.	Subordination	28
ARTICLE VII
Miscellaneous
SECTION 7.01.	Notices	29
SECTION 7.02.	Security Interest Absolute	29
SECTION 7.03.	Survival of Agreement	29
SECTION 7.04.	Binding Effect; Several Agreement	29
SECTION 7.05.	Successors and Assigns	30
SECTION 7.06.	Collateral Agent’s Fees and Expenses; Indemnification	30
SECTION 7.07.	Collateral Agent Appointed Attorney-in-Fact	31
SECTION 7.08.	Applicable Law	32
SECTION 7.09.	Waivers; Amendment	32
SECTION 7.10.	WAIVER OF JURY TRIAL	32
SECTION 7.11.	Severability	32
SECTION 7.12.	Counterparts	33
SECTION 7.13.	Headings	33
SECTION 7.14.	Jurisdiction; Consent to Service of Process	33
SECTION 7.15.	Termination or Release	34
SECTION 7.16.	Additional Subsidiaries	34
SECTION 7.17.	Right of Setoff	35

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Schedules
Schedule I	Subsidiary Guarantors
Schedule II	Equity Interests; Pledged Debt Securities
Schedule III	Intellectual Property
Exhibits
Exhibit A	Form of Supplement
Exhibit B	Form of Perfection Certificate

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FIRST LIEN GUARANTEE AND COLLATERAL AGREEMENT dated as of July 31, 2007 (this “Agreement”), among INTERSTATE FIBERNET, INC., a Delaware corporation (the “Borrower”), ITC^DELTACOM, INC., a Delaware corporation (“Holdings”), the Subsidiaries of Holdings from time to time party hereto and CREDIT SUISSE (“Credit Suisse”), as first lien collateral agent (in such capacity, the “Collateral Agent”).

PRELIMINARY STATEMENT

Reference is made to (a) the First Lien Credit Agreement dated as of July 31, 2007 (as amended, supplemented or otherwise modified from time to time, the “First Lien Credit Agreement”), among the Borrower, Holdings, the lenders from time to time party thereto (the “Lenders”) and Credit Suisse, as administrative agent (in such capacity, the “Administrative Agent”), (b) the Second Lien Credit Agreement dated as of July 31, 2007 (as amended, supplemented or otherwise modified from time to time, the “Second Lien Credit Agreement”), among the Borrower, Holdings, the lenders from time to time party thereto and Credit Suisse, as administrative agent, (c) the Second Lien Guarantee and Collateral Agreement dated as of July 31, 2007 (as amended, supplemented or otherwise modified from time to time, the “Second Lien Guarantee and Collateral Agreement”), among the Borrower, Holdings, the Subsidiaries of Holdings from time to time party thereto and Credit Suisse, as second lien collateral agent (in such capacity, the “Second Lien Collateral Agent”), and (d) the Intercreditor Agreement dated as of July 31, 2007 (as amended, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among the Borrower, Holdings, the Subsidiaries of Holdings from time to time party thereto and Credit Suisse, in its capacities as the Collateral Agent and as the Second Lien Collateral Agent.

The Lenders and the Issuing Bank (such term and each other capitalized term used but not defined in this preliminary statement having the meaning given or ascribed to it in Article I) have agreed to extend credit to the Borrower pursuant to, and upon the terms and conditions specified in, the First Lien Credit Agreement. The obligations of the Lenders and the Issuing Bank to extend credit to the Borrower are conditioned upon, among other things, the execution and delivery of this Agreement by the Borrower and each Guarantor. Each Guarantor is an affiliate of the Borrower, will derive substantial benefits from the extension of credit to the Borrower pursuant to the First Lien Credit Agreement and is willing to execute and deliver this Agreement in order to induce the Lenders and the Issuing Bank to extend such credit. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. First Lien Credit Agreement. (a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings set forth in the First Lien Credit Agreement. All capitalized terms defined in the New York UCC (as such term is defined herein) and not defined in this Agreement or the First Lien Credit Agreement have the meanings specified therein. All references to the Uniform Commercial Code shall mean the New York UCC.

(b) The rules of construction specified in Section 1.02 of the First Lien Credit Agreement also apply to this Agreement.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“Accounts Receivable” shall mean all Accounts and all right, title and interest in any returned goods, together with all rights, titles, securities and guarantees with respect thereto, including any rights to stoppage in transit, replevin, reclamation and resales, and all related security interests, liens and pledges, whether voluntary or involuntary, in each case whether now existing or owned or hereafter arising or acquired.

“Administrative Agent” shall have the meaning assigned to such term in the preliminary statement.

“Article 9 Collateral” shall have the meaning assigned to such term in Section 4.01.

“Borrower” shall have the meaning assigned to such term in the preamble.

“Collateral” shall mean the Article 9 Collateral and the Pledged Collateral.

“Collateral Agent” shall have the meaning assigned to such term in the preamble.

“Copyright License” shall mean any written agreement, now or hereafter in effect, granting any right to any third person under any copyright now or hereafter owned by any Grantor or that such Grantor otherwise has the right to license, or granting any right to any Grantor under any copyright now or hereafter owned by any third person, and all rights of such Grantor under any such agreement.

“Copyrights” shall mean all of the following now owned or hereafter acquired by any Grantor: (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, recordings,

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supplemental registrations and pending applications for registration in the United States Copyright Office (or any successor office or any similar office in any other country), including those listed on Schedule III.

“Excluded Collateral” shall mean (a) any lease, license, contract, Instrument, Security, permit, property rights, franchise or agreement to which any Grantor is a party or any of its rights or interests thereunder if and for so long as the grant of a security interest under this Agreement shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of any Grantor therein or (ii) in a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract, Instrument, Security, permit, property rights, franchise or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity); provided, however, that such security interest shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and to the extent severable, shall attach immediately to any portion of such lease, license, contract, Instrument, Security, permit, property rights, franchise or agreement that does not result in any of the consequences specified in (i) or (ii) above, (b) any Equipment owned by any Grantor that is subject to a purchase money security interest (as defined in Section 9-103 of the UCC), (c) outstanding voting equity or other ownership interests of a Foreign Entity (as defined below) to the extent in excess of 65% of the voting power of all classes of equity or other ownership interests of such Foreign Entity entitled to vote, (d) the Southern Assets and (e) any Trademark applications filed in the United States Patent and Trademark Office on the basis of any Grantor’s “intent-to-use” such Trademark, unless and until acceptable evidence of use of the Trademark has been filed with the United States Patent and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. 1051, et seq.), to the extent that granting a security interest in such Trademark application prior to such filing would adversely affect the enforceability or validity of such Trademark application.

“Federal Securities Laws” shall have the meaning assigned to such term in Section 5.04.

“First Lien Credit Agreement” shall have the meaning assigned to such term in the preliminary statement.

“Foreign Entity” shall mean, with respect to any Grantor, any corporation, partnership, limited liability company or other business entity (i) which is organized under the laws of a jurisdiction other than a state of the United States or the District of Columbia and (ii) of which securities or other ownership interests representing more than 50% of the equity, more than 50% of the ordinary voting power, more than 50% of the general partnership interests or more than 50% of the limited liability company membership interests are, at the time of any determination is being made, owned directly by the Grantor.

“General Intangibles” shall mean all “general intangibles” (as such term is defined in the New York UCC), including all choses in action and causes of action and

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all other intangible personal property of any Grantor of every kind and nature (other than Accounts) now owned or hereafter acquired by any Grantor, including all rights and interests in partnerships, limited partnerships, limited liability companies and other unincorporated entities, corporate or other business records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Swap Agreements and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund claims and any letter of credit, guarantee, claim, security interest or other security held by or granted to any Grantor to secure payment by an Account Debtor of any of the Accounts.

“Grantors” shall mean the Borrower and the Guarantors.

“Guarantors” shall mean Holdings and the Subsidiary Guarantors.

“Holdings” shall have the meaning assigned to such term in the preamble.

“Intellectual Property” shall mean all intellectual and similar property of any Grantor of every kind and nature now owned or hereafter acquired by any Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary technical and business information, know-how, show-how or other data or information, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing.

“Intercreditor Agreement” shall have the meaning assigned to such term in the preliminary statement.

“License” shall mean any Patent License, Trademark License, Copyright License or other license or sublicense agreement relating to Intellectual Property to which any Grantor is a party, including those listed on Schedule III.

“Loan Document Obligations” shall mean (a) the due and punctual payment of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made by the Borrower under the First Lien Credit Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon and obligations to provide cash collateral, and (iii) all other monetary obligations of the Borrower to any of the Secured Parties under the First Lien Credit Agreement and each of the other Loan Documents, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual performance of all other obligations of the Borrower under or pursuant to the First Lien

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Credit Agreement and each of the other Loan Documents, and (c) the due and punctual payment and performance of all the obligations of each other Loan Party under or pursuant to this Agreement and each of the other Loan Documents.

“Loan Documents” shall have the meaning assigned to the term “Loan Documents” in the First Lien Credit Agreement.

“New York UCC” shall mean the Uniform Commercial Code as from time to time in effect in the State of New York.

“Obligations” shall mean (a) the Loan Document Obligations and (b) the due and punctual payment and performance of all obligations of each Loan Party under each Swap Agreement that (i) is in effect on the Closing Date with a counterparty that is the Administrative Agent or a Lender or an Affiliate of the Administrative Agent or a Lender as of the Closing Date or (ii) is entered into after the Closing Date with any counterparty that is the Administrative Agent or a Lender or an Affiliate of the Administrative Agent or a Lender at the time such Swap Agreement is entered into.

“Patent License” shall mean any written agreement, now or hereafter in effect, granting to any third person any right to make, use or sell any invention on which a patent, now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, is in existence, or granting to any Grantor any right to make, use or sell any invention on which a patent, now or hereafter owned by any third person, is in existence, and all rights of any Grantor under any such agreement.

“Patents” shall mean all of the following now owned or hereafter acquired by any Grantor: (a) all letters patent of the United States or the equivalent thereof in any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or the equivalent thereof in any other country, including registrations, recordings and pending applications in the United States Patent and Trademark Office (or any successor or any similar offices in any other country), including those listed on Schedule III, and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein.

“Perfection Certificate” shall mean a certificate substantially in the form of Exhibit B, completed and supplemented with the schedules and attachments contemplated thereby, and duly executed by a Responsible Officer of the Borrower.

“Pledged Collateral” shall have the meaning assigned to such term in Section 3.01.

“Pledged Debt Securities” shall have the meaning assigned to such term in Section 3.01.

“Pledged Securities” shall mean any promissory notes, stock certificates or other securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.

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“Pledged Stock” shall have the meaning assigned to such term in Section 3.01.

“Second Lien Collateral Agent” shall have the meaning assigned to such term in the preliminary statement.

“Second Lien Credit Agreement” shall have the meaning assigned to such term in the preliminary statement.

“Second Lien Guarantee and Collateral Agreement” shall have the meaning assigned to such term in the preliminary statement.

“Second Lien Loan Documents” shall have the meaning assigned to the term “Loan Documents” in the Second Lien Credit Agreement.

“Secured Parties” shall mean (a) the Lenders, (b) the Administrative Agent, (c) the Collateral Agent, (d) any Issuing Bank, (e) each counterparty to any Swap Agreement with a Loan Party that either (i) is in effect on the Closing Date if such counterparty is the Administrative Agent, a Lender or an Affiliate of the Administrative Agent or a Lender as of the Closing Date or (ii) is entered into after the Closing Date if such counterparty is the Administrative Agent, a Lender or an Affiliate of the Administrative Agent or a Lender at the time such Swap Agreement is entered into, (f) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document and (g) the successors and assigns of each of the foregoing.

“Security Interest” shall have the meaning assigned to such term in Section 4.01.

“Southern Assets” shall mean the assets identified on Schedule 1.01(d) to the First Lien Credit Agreement.

“Subsidiary Guarantor” shall mean (a) the Subsidiaries identified on Schedule I hereto as Subsidiary Guarantors and (b) each other Subsidiary that becomes a party to this Agreement as a Subsidiary Guarantor after the Closing Date.

“Trademark License” shall mean any written agreement, now or hereafter in effect, granting to any third person any right to use any trademark now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to use any trademark now or hereafter owned by any third person, and all rights of any Grantor under any such agreement.

“Trademarks” shall mean all of the following now owned or hereafter acquired by any Grantor: (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like

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nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office (or any successor office) or any similar offices in any State of the United States or any other country or any political subdivision thereof, and all extensions or renewals thereof, including those listed on Schedule III, (b) all goodwill associated therewith or symbolized thereby and (c) all other assets, rights and interests that uniquely reflect or embody such goodwill.

“Unfunded Advances/Participations” shall mean (a) with respect to the Administrative Agent, the aggregate amount, if any (i) made available to the Borrower on the assumption that each Lender has made its portion of the applicable Borrowing available to the Administrative Agent as contemplated by Section 2.02(d) of the First Lien Credit Agreement and (ii) with respect to which a corresponding amount shall not in fact have been returned to the Administrative Agent by the Borrower or made available to the Administrative Agent by any such Lender, (b) with respect to the Swingline Lender, the aggregate amount, if any, of participations in respect of any outstanding Swingline Loan that shall not have been funded by the Revolving Credit Lenders in accordance with Section 2.22(e) of the First Lien Credit Agreement and (c) with respect to any Issuing Bank, the aggregate amount, if any, of participations in respect of any outstanding L/C Disbursement that shall not have been funded by the Revolving Credit Lenders in accordance with Sections 2.23(d) and 2.02(f) of the First Lien Credit Agreement.

ARTICLE II

Guarantee

SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Obligations. Each Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation. Each Guarantor waives presentment to, demand of payment from and protest to the Borrower or any other Loan Party of any Obligation, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment.

SECTION 2.02. Guarantee of Payment. Each Guarantor further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Collateral Agent or any other Secured Party to any security held for the payment of the Obligations or to any balance of any Deposit Account or credit on the books of the Collateral Agent or any other Secured Party in favor of the Borrower or any other person.

SECTION 2.03. No Limitations, Etc. (a) Except for termination of a Guarantor’s obligations hereunder as expressly provided in Section 7.15, the obligations

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of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Collateral Agent or any other Secured Party to assert any claim or demand or to enforce any right or remedy under the provisions of any Loan Document or otherwise, (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Loan Document or any other agreement, including with respect to any other Guarantor under this Agreement, (iii) the release of, or any impairment of or failure to perfect any Lien on or security interest in, any security held by the Collateral Agent or any other Secured Party for the Obligations or any of them, (iv) any default, failure or delay, wilful or otherwise, in the performance of the Obligations, or (v) any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations). Each Guarantor expressly authorizes the Collateral Agent to take and hold security for the payment and performance of the Obligations, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in its sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Obligations, all without affecting the obligations of any Guarantor hereunder.

(b) To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of the Borrower or any other Loan Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower or any other Loan Party, other than the indefeasible payment in full in cash of all the Obligations. Upon the occurrence and during the continuation of an Event of Default, the Collateral Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with the Borrower or any other Loan Party or exercise any other right or remedy available to them against the Borrower or any other Loan Party, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Obligations have been fully and indefeasibly paid in full in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other Loan Party, as the case may be, or any security.

SECTION 2.04. Reinstatement. Each Guarantor agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by the Collateral Agent or any other Secured Party upon the bankruptcy or reorganization of the Borrower, any other Loan Party or otherwise pursuant to applicable law.

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SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and not in limitation of any other right that the Collateral Agent or any other Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan Party to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Collateral Agent for distribution to the applicable Secured Parties in cash the amount of such unpaid Obligation. Upon payment by any Guarantor of any sums to the Collateral Agent as provided above, all rights of such Guarantor against the Borrower or any other Guarantor arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subject to Article VI.

SECTION 2.06. Information. Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s and each other Loan Party’s financial condition and assets and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that neither the Collateral Agent nor any other Secured Party will have any duty to advise such Guarantor of information known to it or any of them regarding such circumstances or risks.

ARTICLE III

Pledge of Securities

SECTION 3.01. Pledge. As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest in, all of such Grantor’s right, title and interest in, to and under:

(a) (i) the Equity Interests owned by such Grantor on the date hereof (including all such Equity Interests listed on Schedule II), (ii) any other Equity Interests obtained in the future by such Grantor and (iii) the certificates representing all such Equity Interests, if any (all the foregoing collectively referred to herein as the “Pledged Stock”);

(b) (i) the debt securities held by such Grantor on the date hereof (including all such debt securities listed opposite the name of such Grantor on Schedule II), (ii) any debt securities in the future issued to such Grantor and (iii) the promissory notes and any other instruments evidencing such debt securities (all the foregoing collectively referred to herein as the “Pledged Debt Securities”);

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(c) subject to Section 3.06, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in clauses (a) and (b) above;

(d) subject to Section 3.06, all rights and privileges of such Grantor with respect to the securities and other property referred to in clauses (a), (b), and (c) above; and

(e) all Proceeds of any of the foregoing (the items referred to in clauses (a) through (e) above being collectively referred to as the “Pledged Collateral”);

provided, however, that notwithstanding any of the other provisions set forth in this Section 2, in no event shall the security interest granted under this Section 2 attach to any Excluded Collateral.

TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, as long as the Obligations remain outstanding; subject, however, to the terms, covenants and conditions hereinafter set forth.

SECTION 3.02. Delivery of the Pledged Collateral. (a) Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent any and all certificates, instruments or other documents representing or evidencing Pledged Securities issued by a Subsidiary and Pledged Securities having an individual value in excess of $250,000.

(b) Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent any and all Pledged Debt Securities issued by a Subsidiary and Pledged Debt Securities having an individual value in excess of $250,000.

(c) Upon delivery to the Collateral Agent, (i) any certificate, instrument or document representing or evidencing Pledged Securities shall be accompanied by undated stock powers duly executed in blank or other undated instruments of transfer reasonably satisfactory to the Collateral Agent and duly executed in blank and by such other instruments and documents as the Collateral Agent may reasonably request and (ii) all other property comprising part of the Pledged Collateral shall be accompanied by proper instruments of assignment duly executed by the applicable Grantor. Each delivery of Pledged Securities shall be accompanied by a schedule describing the applicable securities, which schedule shall be attached hereto as Schedule II and made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity of the pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.

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(d) In accordance with the terms of the Intercreditor Agreement, all Pledged Collateral delivered to the Collateral Agent shall be held by the Collateral Agent as gratuitous bailee for the Second Lien Secured Parties (as defined in the Intercreditor Agreement) solely for the purpose of perfecting the security interest therein granted under the Second Lien Guarantee and Collateral Agreement.

SECTION 3.03. Representations, Warranties and Covenants. The Grantors jointly and severally represent, warrant and covenant to and with the Collateral Agent, for the benefit of the Secured Parties, that:

(a) As of the Closing Date, Schedule II correctly sets forth the percentage of the issued and outstanding shares of each class of the Equity Interests of the issuer thereof represented by such Pledged Stock and includes all Equity Interests, debt securities and promissory notes required to be delivered hereunder;

(b) the Pledged Stock and Pledged Debt Securities in each case issued by any Subsidiary have been duly and validly authorized and issued by the issuers thereof and (i) in the case of Pledged Stock, are fully paid and nonassessable and (ii) in the case of Pledged Debt Securities, are legal, valid and binding obligations of the issuers thereof;

(c) except for the security interests granted hereunder and under the Second Lien Guarantee and Collateral Agreement (or otherwise permitted under the First Lien Credit Agreement), each Grantor (i) is and, subject to any transfers made in compliance with the First Lien Credit Agreement, will continue to be the direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule II as owned by such Grantor, (ii) holds the same free and clear of all Liens except for Liens permitted pursuant to Section 6.02 of the First Lien Credit Agreement, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral required to be delivered hereunder, other than transfers made in compliance with the First Lien Credit Agreement, and (iv) subject to Section 3.06, will cause any and all Pledged Collateral required to be delivered hereunder, whether for value paid by such Grantor or otherwise, to be forthwith deposited with the Collateral Agent and pledged or assigned hereunder;

(d) except for restrictions and limitations imposed by the Loan Documents, the Second Lien Loan Documents or securities laws or other applicable laws generally, the Pledged Collateral is and will continue to be freely transferable and assignable, and none of the Pledged Collateral required to be pledged hereunder is or will be subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, impair, delay or otherwise affect the pledge of such Pledged Collateral required to be pledged hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Collateral Agent of rights and remedies hereunder;

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(e) each Grantor (i) has the power and authority to pledge the Pledged Collateral pledged by it hereunder in the manner hereby done or contemplated and (ii) will defend its title or interest thereto or therein against any and all Liens (other than any Lien created or permitted by the Loan Documents or the Second Lien Loan Documents), however arising, of all persons whomsoever;

(f) no consent or approval of any Governmental Authority, any securities exchange or any other person was or is necessary to the validity of the pledge effected hereby (other than such as have been obtained and are in full force and effect);

(g) by virtue of the execution and delivery by each Grantor of this Agreement and the Lien priorities set forth in the Intercreditor Agreement, when any Pledged Securities are delivered to the Collateral Agent in accordance with this Agreement, the Collateral Agent will obtain a legal, valid and perfected first priority lien upon and security interest in such Pledged Securities as security for the payment and performance of the Obligations subject only to Liens permitted pursuant to Section 6.02 of the First Lien Credit Agreement; and

(h) the pledge effected hereby is effective to vest in the Collateral Agent, for the ratable benefit of the Secured Parties, the rights of the Collateral Agent in the Pledged Collateral as set forth herein and all action by any Grantor necessary to protect and perfect the Lien on the Pledged Collateral has been duly taken.

SECTION 3.04. Certification of Limited Liability Company Interests and Limited Partnership Interests. Each interest in any limited liability company or limited partnership which is a Subsidiary and pledged hereunder shall be represented by a certificate, shall be a “security” within the meaning of Article 8 of the New York UCC and shall be governed by Article 8 of the New York UCC.

SECTION 3.05. Registration in Nominee Name; Denominations. Upon the occurrence and during the continuation of an Event of Default, the Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent. Upon the occurrence and during the continuation of an Event of Default, each Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities in its capacity as the registered owner thereof. Upon the occurrence and during the continuation of an Event of Default, the Collateral Agent shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement.

SECTION 3.06. Voting Rights; Dividends and Interest, Etc. (a) Unless and until an Event of Default shall have occurred and be continuing and the Collateral Agent shall have given the Grantors written notice of its intent to exercise its rights under

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this Agreement (which notice shall be deemed to have been given immediately upon the occurrence of an Event of Default under paragraph (g) or (h) of Article VII of the First Lien Credit Agreement):

(i) Each Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for any purpose consistent with the terms of this Agreement, the First Lien Credit Agreement and the other Loan Documents; provided, however, that such rights and powers shall not be exercised in any manner that could reasonably be expected to have a Material Adverse Effect.

(ii) The Collateral Agent shall execute and deliver to each Grantor, or cause to be executed and delivered to each Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to paragraph (i) above.

(iii) Each Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Securities to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the First Lien Credit Agreement, the other Loan Documents and applicable law; provided, however, that any noncash dividends, interest, principal or other distributions that would constitute Pledged Stock or Pledged Debt Securities, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, to the extent required to be delivered hereunder, if received by any Grantor, shall not be commingled by such Grantor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the ratable benefit of the Secured Parties and shall be forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsement or instrument of assignment). This paragraph (iii) shall not apply to dividends between or among the Borrower, the Guarantors and any Subsidiaries only of property subject to a perfected security interest under this Agreement.

(b) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified (or shall be deemed to have notified pursuant to Section 3.06(a)) the Grantors in writing of the suspension of their rights under

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paragraph (a)(iii) of this Section 3.06, then all rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section 3.06 shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions. All dividends, interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 3.06 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsement or instrument of assignment). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 5.02. The Collateral Agent shall, promptly after all such Events of Default have been cured or waived, repay to each applicable Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 3.06 and that remain in such account.

(c) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified (or shall be deemed to have notified pursuant to Section 3.06(a)) the Grantors in writing of the suspension of their rights under paragraph (a)(i) of this Section 3.06, then all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 3.06, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 3.06, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided that, unless otherwise directed by the Required Lenders, the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights.

(d) Any notice given by the Collateral Agent to the Grantors exercising its rights under paragraph (a) of this Section 3.06 (i) may be given by telephone if promptly confirmed in writing, (ii) may be given to one or more of the Grantors at the same or different times and (iii) may suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.

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ARTICLE IV

Security Interests in Personal Property

SECTION 4.01. Security Interest. (a) As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest (the “Security Interest”), in all right, title or interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Article 9 Collateral”):

(i) all Accounts;

(ii) all Chattel Paper;

(iii) all cash and Deposit Accounts;

(iv) all Documents;

(v) all Equipment;

(vi) all General Intangibles;

(vii) all Instruments;

(viii) all Inventory;

(ix) all Investment Property;

(x) all Letter-of-Credit Rights;

(xi) all Commercial Tort Claims;

(xii) all books and records pertaining to the Article 9 Collateral; and

(xiii) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security and guarantees given by any person with respect to any of the foregoing;

provided, however, that notwithstanding any of the other provisions set forth in this Section 4, in no event shall the security interest granted under this Section 4 attach to any Excluded Collateral.

(b) Each Grantor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings) with respect to the Article 9 Collateral or any part

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thereof and amendments thereto that (i) indicate the Article 9 Collateral as “all assets” of such Grantor or words of similar effect, and (ii) contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment, including (A) whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor and (B) in the case of a financing statement filed as a fixture filing, a sufficient description of the real property to which such Article 9 Collateral relates. Each Grantor agrees to provide such information to the Collateral Agent promptly upon request.

The Collateral Agent is further authorized to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) such documents as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by each Grantor, without the signature of any Grantor, and naming any Grantor or the Grantors as debtors and the Collateral Agent as secured party.

(c) The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Article 9 Collateral.

SECTION 4.02. Representations and Warranties. The Grantors jointly and severally represent and warrant to the Collateral Agent and the Secured Parties that:

(a) Except for the security interests granted hereunder and the Liens permitted pursuant to Section 6.02 of the First Lien Credit Agreement, each Grantor has good and valid rights in and title to the Article 9 Collateral with respect to which it has purported to grant a Security Interest hereunder and has full power and authority to grant to the Collateral Agent, for the ratable benefit of the Secured Parties, the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other person other than any consent or approval that has been obtained.

(b) The Perfection Certificate has been duly prepared, completed and executed and the information set forth therein (including (x) the exact legal name of each Grantor and (y) the jurisdiction of organization of each Grantor) is correct and complete in all material respects as of the Closing Date. Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations containing a description of the Article 9 Collateral have been prepared by the Collateral Agent based upon the information provided to the Administrative Agent and the Secured Parties in the Perfection Certificate for filing in each governmental, municipal or other office specified in Section 2 of the Perfection Certificate (or specified by notice from the Borrower to the Administrative Agent after the Closing Date in the case of filings, recordings or registrations required by Sections 5.06 or 5.12 of the First Lien Credit Agreement).

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(c) The Article 9 Collateral is owned by the Grantors free and clear of any Lien, except for Liens expressly permitted pursuant to Section 6.02 of the First Lien Credit Agreement. No Grantor has filed or consented to the filing of (i) any financing statement or analogous document under the Uniform Commercial Code or any other applicable laws covering any Article 9 Collateral, (ii) any assignment in which any Grantor assigns any Collateral or any security agreement or similar instrument covering any Article 9 Collateral with the United States Patent and Trademark Office or the United States Copyright Office, (iii) any notice under the Assignment of Claims Act, or (iv) any assignment in which any Grantor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Liens expressly permitted pursuant to Section 6.02 of the First Lien Credit Agreement. As of the Closing Date, no Grantor holds any Commercial Tort Claims except as indicated on the Perfection Certificate.

SECTION 4.03. Covenants. (a) Except in connection with a transaction permitted by Section 6.05 of the First Lien Credit Agreement following which any Grantor shall cease to be a Loan Party, each Grantor agrees promptly to notify the Collateral Agent in writing of any change in (i) its legal name, (ii) its identity or type of organization or corporate structure, (iii) its Federal Taxpayer Identification Number or organizational identification number or (iv) its jurisdiction of organization. Each Grantor agrees promptly to provide the Collateral Agent with certified organizational documents reflecting any of the changes described in the first sentence of this paragraph. Each Grantor agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected first priority security interest in all the Article 9 Collateral contemplated hereunder. Each Grantor agrees promptly to notify the Collateral Agent if any material portion of the Article 9 Collateral owned or held by such Grantor is damaged or destroyed.

(b) Each Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Article 9 Collateral owned by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged.

(c) Each year, at the time of delivery of annual financial statements with respect to the preceding fiscal year pursuant to Section 5.04(a) of the First Lien Credit Agreement, the Borrower shall deliver to the Collateral Agent a certificate executed by a Responsible Officer of the Borrower and setting forth in the format of Schedule III a list of all Intellectual Property of any Grantor in existence on the date thereof and not then listed on such Schedules or previously so identified to the Collateral Agent.

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(d) Each Grantor shall, at its own expense, take any and all actions reasonably necessary to defend title to the Article 9 Collateral against all persons and to defend the Security Interest of the Collateral Agent in the Article 9 Collateral and the priority thereof against any Lien not expressly permitted pursuant to Section 6.02 of the First Lien Credit Agreement.

(e) Each Grantor agrees, at its own expense, promptly to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent may from time to time reasonably request to better assure, obtain, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and Taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing or continuation statements (including fixture filings) or other documents in connection herewith or therewith.

Without limiting the generality of the foregoing, each Grantor hereby authorizes the Collateral Agent, with reasonable prior notice thereof to the Grantors, to supplement this Agreement by supplementing Schedule III or adding additional schedules hereto to identify specifically any asset or item of a Grantor that, in the Collateral Agent’s reasonable judgment, constitutes Copyrights, Licenses, Patents or Trademarks; provided that any Grantor shall have the right, exercisable within 10 days after it has been notified by the Collateral Agent of the specific identification of such Collateral, to advise the Collateral Agent in writing of any inaccuracy of the representations and warranties made by such Grantor hereunder with respect to such Collateral. Each Grantor agrees that it will use its reasonable best efforts to take such action as shall be reasonably necessary in order that all representations and warranties hereunder shall be true and correct with respect to such Collateral within 30 days after the date it has been notified by the Collateral Agent of the specific identification of such Collateral.

(f) The Collateral Agent and such persons as the Collateral Agent may designate shall have the right (subject to and otherwise in accordance with Section 5.07 of the First Lien Credit Agreement), at the applicable Grantor’s own cost and expense, to inspect the Article 9 Collateral, all records related thereto (and to make extracts and copies from such records) and the premises upon which any of the Article 9 Collateral is located, to discuss the applicable Grantor’s affairs with the officers of such Grantor and its independent accountants and to verify the existence, validity, amount, quality, quantity, value, condition and status of, or any other matter relating to, the Article 9 Collateral, including, in the case of Accounts or other Article 9 Collateral in the possession of any third person, by contacting Account Debtors or the third person possessing such Article 9 Collateral for the purpose of making such a verification. The Collateral Agent upon written notice to each Grantor shall have the absolute right to share any information it gains from such inspection or verification with any Secured Party.

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(g) At its option, during the continuance of an Event of Default, the Collateral Agent may discharge past due Taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and not expressly permitted pursuant to Section 5.03 or Section 6.02 of the First Lien Credit Agreement, and may pay for the maintenance and preservation of the Article 9 Collateral to the extent any Grantor fails to do so as required by the First Lien Credit Agreement or this Agreement, and each Grantor jointly and severally agrees to reimburse the Collateral Agent promptly following demand for any payment made or any expense incurred by the Collateral Agent pursuant to the foregoing authorization; provided, however, that nothing in this paragraph shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to Taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Loan Documents.

(h) If at any time any Grantor shall take a security interest in any material property of an Account Debtor or any other person to secure payment and performance of a material Account, such Grantor shall promptly assign such security interest to the Collateral Agent for the ratable benefit of the Secured Parties. Such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other person granting the security interest.

(i) Each Grantor, at its own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Inventory and Equipment in accordance with the requirements set forth in Section 5.02 of the First Lien Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, upon the occurrence and during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Article 9 Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. Upon the occurrence and during the continuance of an Event of Default, in the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or under the First Lien Credit Agreement or to pay any premium in whole or part relating thereto, the Collateral Agent may, without waiving or releasing any obligation or liability of any Grantor hereunder or any Default or Event of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other reasonable actions with respect thereto as the Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection with this paragraph, including attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, by the Grantors to the Collateral Agent and shall be additional Obligations secured hereby.

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(j) Each Grantor shall maintain, in form and manner reasonably satisfactory to the Collateral Agent, records of its Chattel Paper and its books, records and documents evidencing or pertaining thereto.

SECTION 4.04. Other Actions. In order to further insure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, the Security Interest in the Article 9 Collateral, each Grantor agrees, in each case at such Grantor’s own expense, to take the following actions with respect to the following Article 9 Collateral:

(a) Instruments. If any Grantor shall at any time hold or acquire any Instruments having an individual value in excess of $250,000, such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by such undated instruments of endorsement, transfer or assignment duly executed in blank as the Collateral Agent may from time to time specify.

(b) Deposit Accounts. For each Deposit Account that any Grantor at any time opens or maintains, such Grantor shall, upon the Collateral Agent’s written request, either (i) cause the depositary bank to agree to comply at any time with instructions from the Collateral Agent to such depositary bank directing the disposition of funds from time to time credited to such Deposit Account, without further consent of such Grantor or any other person, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, or (ii) arrange for the Collateral Agent to become the customer of the depositary bank with respect to the Deposit Account, with the Grantor being permitted, only with the consent of the Collateral Agent, to exercise rights to withdraw funds from such Deposit Account. The Collateral Agent agrees with each Grantor that the Collateral Agent shall not give any such instructions or withhold any withdrawal rights from any Grantor, unless an Event of Default has occurred and is continuing. The provisions of this paragraph shall not apply to any Deposit Account (x) for which any Grantor, the depositary bank and the Collateral Agent have entered into a cash collateral agreement specially negotiated among such Grantor, the depositary bank and the Collateral Agent for the specific purpose set forth therein, (y) any payroll, withholding tax or other fiduciary account and/or (z) any such Deposit Accounts that, together with any Securities Accounts described in Section 4.04(c)(z) below, in the aggregate, have a principal balance of $250,000 or less.

(c) Investment Property. Except to the extent otherwise provided in Article III, if any Grantor shall at any time hold or acquire any certificated securities having an individual value in excess of $250,000 (or otherwise required to be delivered hereunder), such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by such undated instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time specify. If any such securities now or hereafter acquired by any Grantor are uncertificated and are issued to such Grantor or its nominee directly by the issuer thereof, such Grantor shall promptly notify the

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Collateral Agent thereof and, at the Collateral Agent’s written request and option, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) cause the issuer to agree to comply with instructions from the Collateral Agent as to such securities, without further consent of any Grantor or such nominee, or (ii) arrange for the Collateral Agent to become the registered owner of the securities. If any securities, whether certificated or uncertificated, or other Investment Property now or hereafter acquired by any Grantor are held by such Grantor or its nominee through a Securities Intermediary or Commodity Intermediary, such Grantor shall promptly notify the Collateral Agent thereof and, at the Collateral Agent’s request and option, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) cause such Securities Intermediary or Commodity Intermediary, as the case may be, to agree to comply with Entitlement Orders from the Collateral Agent to such Securities Intermediary as to such securities or other Investment Property, or (as the case may be) to apply any value distributed on account of any commodity contract as directed by the Collateral Agent to such Commodity Intermediary, in each case without further consent of any Grantor or such nominee, or (ii) in the case of Financial Assets (as governed by Article 8 of the New York UCC) or other Investment Property held through a Securities Intermediary, arrange for the Collateral Agent to become the Entitlement Holder with respect to such Investment Property, with the Grantor being permitted, only with the consent of the Collateral Agent, to exercise rights to withdraw or otherwise deal with such Investment Property. The Collateral Agent agrees with each Grantor that the Collateral Agent shall not give any such Entitlement Orders or instructions or directions to any such issuer, Securities Intermediary or Commodity Intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by any Grantor, unless an Event of Default has occurred and is continuing. The provisions of this paragraph shall not apply to any (x) Financial Assets credited to a Securities Account for which the Collateral Agent is the Securities Intermediary, (y) any payroll, withholding tax or other fiduciary account and/or (z) any Securities Accounts that, together with any Deposit Accounts described in Section 4.04(b)(z) above, in the aggregate, have a principal balance of $250,000 or less.

(d) Electronic Chattel Paper and Transferable Records. If any Grantor at any time holds or acquires an interest in any Electronic Chattel Paper or any “transferable record”, as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, in each case having an individual value in excess of $250,000, such Grantor shall promptly notify the Collateral Agent thereof and, at the written request of the Collateral Agent, shall take such action as the Collateral Agent may reasonably request to vest in the Collateral Agent control under New York UCC Section 9-105 of such Electronic Chattel Paper or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Collateral Agent

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agrees with such Grantor that the Collateral Agent will arrange, pursuant to procedures reasonably satisfactory to the Collateral Agent and so long as such procedures will not result in the Collateral Agent’s loss of control, for the Grantor to make alterations to such Electronic Chattel Paper or transferable record permitted under UCC Section 9-105 or, as the case may be, Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing.

(e) Letter-of-Credit Rights. If any Grantor is at any time a beneficiary under a letter of credit having an individual value in excess of $250,000 now or hereafter issued in favor of such Grantor, such Grantor shall promptly notify the Collateral Agent thereof and, at the request and option of the Collateral Agent, such Grantor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under the letter of credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of the letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be paid to the applicable Grantor unless an Event of Default has occurred and is continuing.

(f) Commercial Tort Claims. If any Grantor shall at any time hold or acquire a Commercial Tort Claim in an amount reasonably estimated to exceed $500,000, the Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor including a summary description of such claim and grant to the Collateral Agent, for the ratable benefit of the Secured Parties, in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to the Collateral Agent.

SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral. (a) Each Grantor agrees that it will not, and will not permit any of its licensees to, do any act, or omit to do any act, whereby any Patent that is material to the conduct of such Grantor’s business may become invalidated or dedicated to the public, and agrees that it shall continue to mark any products covered by any such Patent with the relevant patent number as necessary and sufficient to establish and preserve its maximum rights under applicable patent laws.

(b) Each Grantor (either itself or through its licensees or its sublicensees) will, for each Trademark material to the conduct of such Grantor’s business, (i) maintain such Trademark in full force free from any claim of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered under such Trademark, (iii) display such Trademark with notice of Federal or foreign registration to the extent necessary and sufficient to establish and preserve its maximum rights under applicable law and (iv) not knowingly use or knowingly permit the use of such Trademark in violation of any third party rights.

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(c) Each Grantor (either itself or through its licensees or sublicensees) will, for each work covered by a material Copyright, continue to publish, reproduce, display, adopt and distribute the work with appropriate copyright notice as necessary and sufficient to establish and preserve its maximum rights under applicable copyright laws.

(d) Each Grantor shall notify the Collateral Agent promptly if it knows or has reason to know that any Patent, Trademark or Copyright material to the conduct of its business may become abandoned, lost or dedicated to the public, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, United States Copyright Office or any court or similar office of any country) regarding such Grantor’s ownership of any Patent, Trademark or Copyright, its right to register the same, or its right to keep and maintain the same.

(e) In no event shall any Grantor, either itself or through any agent, employee, licensee or designee, file an application for any Patent, Trademark or Copyright (or for the registration of any Trademark or Copyright) with the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, unless it promptly notifies the Collateral Agent, and, upon request of the Collateral Agent, executes and delivers any and all agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the Security Interest in such Patent, Trademark or Copyright, and each Grantor hereby appoints the Collateral Agent as its attorney-in-fact to execute and file such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed; such power, being coupled with an interest, is irrevocable for the term of this Agreement.

(f) Each Grantor will take all necessary steps that are consistent with the practice in any proceeding before the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, to maintain and pursue each material application relating to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant or registration) and to maintain each issued Patent and each registration of the Trademarks and Copyrights that is material to the conduct of any Grantor’s business, including timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if consistent with good business judgment, to initiate opposition, interference and cancellation proceedings against third parties.

(g) In the event that any Grantor knows or has reason to believe that any Article 9 Collateral consisting of a Patent, Trademark or Copyright material to the conduct of any Grantor’s business has been or is about to be materially infringed, misappropriated or diluted by a third person, such Grantor promptly shall notify the Collateral Agent and shall, if consistent with good business judgment, promptly sue for

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infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and take such other actions as are appropriate under the circumstances to protect such Article 9 Collateral.

(h) Upon the occurrence and during the continuance of an Event of Default, promptly following the request of the Collateral Agent, each Grantor shall use its best efforts to obtain all requisite consents or approvals by the licensor of each Copyright License, Patent License or Trademark License, and each other material License, to effect the assignment of all such Grantor’s right, title and interest thereunder to the Collateral Agent, for the ratable benefit of the Secured Parties, or its designee.

ARTICLE V

Remedies

SECTION 5.01. Remedies Upon Default. Upon the occurrence and during the continuance of an Event of Default, each Grantor agrees to deliver each item of Collateral to the Collateral Agent on demand, and it is agreed that the Collateral Agent shall have the right to take any of or all the following actions at the same or different times: (a) with respect to any Article 9 Collateral consisting of Intellectual Property, on demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Article 9 Collateral by the applicable Grantor to the Collateral Agent, or to license or sublicense, whether general, special or otherwise, and whether on an exclusive or nonexclusive basis, any such Article 9 Collateral throughout the world on such terms and conditions and in such manner as the Collateral Agent shall determine (other than in violation of any then-existing licensing arrangements to the extent that waivers cannot upon the use of commercially reasonable efforts be obtained), and (b) with or without legal process and with or without prior notice or demand for performance, to take possession of the Article 9 Collateral and without liability for trespass to enter any premises where the Article 9 Collateral may be located for the purpose of taking possession of or removing the Article 9 Collateral and, generally, to exercise any and all rights afforded to a secured party under the Uniform Commercial Code or other applicable law. Without limiting the generality of the foregoing, each Grantor agrees that the Collateral Agent shall have the right, subject to the mandatory requirements of applicable law, to sell or otherwise dispose of all or any part of the Collateral at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate. The Collateral Agent shall be authorized at any such sale (if it deems it reasonable to do so) to restrict the prospective bidders or purchasers to persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and appraisal which such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.

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The Collateral Agent shall give each applicable Grantor 10 days’ written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by applicable law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by applicable law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor. For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Obligations paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 5.01 shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.

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SECTION 5.02. Application of Proceeds. The Collateral Agent shall apply the proceeds of any collection, sale, foreclosure or other realization upon any Collateral, including any Collateral consisting of cash, as follows:

FIRST, to the payment of all reasonable and documented costs and expenses incurred by the Administrative Agent or the Collateral Agent (in their respective capacities as such hereunder or under any other Loan Document) in connection with such collection, sale, foreclosure or realization or otherwise in connection with this Agreement, any other Loan Document or any of the Obligations, including all court costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made by the Administrative Agent and/or the Collateral Agent hereunder or under any other Loan Document on behalf of any Grantor and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Loan Document;

SECOND, to the payment in full of Unfunded Advances/Participations (the amounts so applied to be distributed between or among the Administrative Agent, the Swingline Lender and any Issuing Bank pro rata in accordance with the amounts of Unfunded Advances/Participations owed to them on the date of any such distribution);

THIRD, to the payment in full of all other Obligations (the amounts so applied to be distributed among the Secured Parties pro rata in accordance with the amounts of the Obligations owed to them on the date of any such distribution);

FOURTH, to the Second Lien Collateral Agent, in accordance with the Intercreditor Agreement; and

FIFTH, to the Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct.

The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.

SECTION 5.03. Grant of License to Use Intellectual Property. For the purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to the Grantors), to use, license or sublicense any of the Article 9 Collateral consisting of Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the

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same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the Collateral Agent may be exercised, at the option of the Collateral Agent, only upon the occurrence and during the continuation of an Event of Default; provided, however, that any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon each Grantor notwithstanding any subsequent cure of an Event of Default.

SECTION 5.04. Securities Act, Etc. In view of the position of the Grantors in relation to the Pledged Collateral, or because of other current or future circumstances, a question may arise under the U.S. Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the “Federal Securities Laws”) with respect to any disposition of the Pledged Collateral permitted hereunder. Each Grantor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Collateral under applicable “blue sky” or other state securities laws or similar laws analogous in purpose or effect. Each Grantor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Pledged Collateral, limit the purchasers to those who will agree, among other things, to acquire such Pledged Collateral for their own account, for investment, and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or part thereof shall have been filed under the Federal Securities Laws and (b) may approach and negotiate with a limited number of potential purchasers (including a single potential purchaser) to effect such sale. Each Grantor acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Pledged Collateral at a price that the Collateral Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a limited number of purchasers (or a single purchaser) were approached. The provisions of this Section 5.04 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells.

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ARTICLE VI

Indemnity, Subrogation and Subordination

SECTION 6.01. Indemnity and Subrogation. In addition to all such rights of indemnity and subrogation as the Guarantors may have under applicable law (but subject to Section 6.03), the Borrower agrees that (a) in the event a payment shall be made by any Guarantor under this Agreement, the Borrower shall indemnify such Guarantor for the full amount of such payment and such Guarantor shall be subrogated to the rights of the person to whom such payment shall have been made to the extent of such payment and (b) in the event any assets of any Guarantor shall be sold pursuant to this Agreement or any other Security Document to satisfy in whole or in part a claim of any Secured Party, the Borrower shall indemnify such Guarantor in an amount equal to the greater of the book value or the fair market value of the assets so sold.

SECTION 6.02. Contribution and Subrogation. Each Guarantor (a “Contributing Guarantor”) agrees (subject to Section 6.03) that, in the event a payment shall be made by any other Guarantor hereunder in respect of any Obligation, or assets of any other Guarantor shall be sold pursuant to any Security Document to satisfy any Obligation owed to any Secured Party, and such other Guarantor (the “Claiming Guarantor”) shall not have been fully indemnified by the Borrower as provided in Section 6.01, the Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal to (i) the amount of such payment or (ii) the greater of the book value or the fair market value of such assets, as the case may be, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Guarantor on the date hereof and the denominator shall be the aggregate net worth of all the Guarantors on the date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to Section 7.16, the date of the supplement hereto executed and delivered by such Guarantor). Any Contributing Guarantor making any payment to a Claiming Guarantor pursuant to this Section 6.02 shall be subrogated to the rights of such Claiming Guarantor under Section 6.01 to the extent of such payment.

SECTION 6.03. Subordination. (a) Notwithstanding any provision of this Agreement to the contrary, all rights of the Guarantors under Sections 6.01 and 6.02 and all other rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the indefeasible payment in full in cash of the Obligations. No failure on the part of the Borrower or any Guarantor to make the payments required by Sections 6.01 and 6.02 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Guarantor with respect to its obligations hereunder, and each Guarantor shall remain liable for the full amount of its obligations hereunder.

(b) The Borrower and each Guarantor hereby agree that all Indebtedness and other monetary obligations owed by it to the Borrower or any Subsidiary shall, upon the occurrence and during the continuance of an Event of Default, be fully subordinated to the indefeasible payment in full in cash of the Obligations.

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ARTICLE VII

Miscellaneous

SECTION 7.01. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 9.01 of the First Lien Credit Agreement. All communications and notices hereunder to any Subsidiary Guarantor shall be given to it in care of the Borrower as provided in Section 9.01 of the First Lien Credit Agreement.

SECTION 7.02. Security Interest Absolute. In accordance with applicable laws, all rights of the Collateral Agent hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the First Lien Credit Agreement, any other Loan Document, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the First Lien Credit Agreement, any other Loan Document or any other agreement or instrument relating to the foregoing, (c) any exchange, release or non-perfection of any Lien on other collateral (except for dispositions of Collateral permitted pursuant to the terms of the First Lien Credit Agreement), or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Obligations or this Agreement.

SECTION 7.03. Survival of Agreement. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lenders and the Issuing Bank and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any Lender or Issuing Bank or on their behalf and notwithstanding that the Collateral Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended under the First Lien Credit Agreement, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under any Loan Document is outstanding and unpaid or the aggregate L/C Exposure does not equal zero and so long as the Commitments have not expired or terminated.

SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall become effective as to any Loan Party when a counterpart hereof executed on behalf of such Loan Party shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Loan Party and the Collateral Agent and their respective permitted

29

successors and assigns, and shall inure to the benefit of such Loan Party, the Collateral Agent and the other Secured Parties and their respective successors and assigns, except that no Loan Party shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as expressly contemplated or permitted by this Agreement or the First Lien Credit Agreement. This Agreement shall be construed as a separate agreement with respect to each Loan Party and may be amended, modified, supplemented, waived or released with respect to any Loan Party without the approval of any other Loan Party and without affecting the obligations of any other Loan Party hereunder.

SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

SECTION 7.06. Collateral Agent’s Fees and Expenses; Indemnification. (a) The parties hereto agree that the Collateral Agent shall be entitled to reimbursement of its expenses incurred hereunder as and to the extent provided in Section 9.05 of the First Lien Credit Agreement.

(b) Without limitation of its indemnification obligations under the other Loan Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent and the other indemnitees against, and hold each indemnitee harmless from, any and all losses, claims, damages, liabilities, and related expenses, including reasonable and documented counsel fees, charges and disbursements (subject to the limitations set forth in Section 9.05(a) of the First Lien Credit Agreement), incurred by or asserted against any indemnitee arising out of, in any way connected with, or as a result of, the execution or delivery or performance of this Agreement or any agreement or instrument contemplated hereby or any claim, litigation, investigation or proceeding relating to any of the foregoing or to the Collateral, regardless of whether any indemnitee is a party thereto or whether initiated by a third party or by a Loan Party or any Affiliate thereof; provided, however, that such indemnity shall not, as to any indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or wilful misconduct of such indemnitee. To the extent permitted by applicable law, no Grantor shall assert, and each Grantor hereby waives any claim against any indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of proceeds thereof.

(c) Any such amounts payable as provided hereunder shall be additional Obligations secured hereby and by the other Security Documents. The provisions of this Section 7.06 shall remain operative and in full force and effect regardless of the

30

termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Collateral Agent or any other Secured Party. All amounts due under this Section 7.06 shall be payable promptly following written demand therefor and shall bear interest, on and from the date of demand, at the rate specified in Section 2.06(a) of the First Lien Credit Agreement.

SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact. Upon the occurrence and during the continuation of an Event of Default, each Grantor hereby appoints the Collateral Agent as the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable for the term of this Agreement and coupled with an interest; provided, however, that notwithstanding the preceding each Grantor hereby immediately appoints the Collateral Agent as the attorney-in-fact of such Grantor for the purpose of perfecting any security interest created hereunder. Without limiting the generality of the foregoing, the Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default, with full power of substitution either in the Collateral Agent’s name or in the name of such Grantor (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof, (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral, (c) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral, (d) to send verifications of Accounts Receivable to any Account Debtor, (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral, (f) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral, (g) to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent, and (h) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement in accordance with its terms, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided, however, that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence, wilful misconduct or bad faith.

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SECTION 7.08. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 7.09. Waivers; Amendment. (a) No failure or delay by the Collateral Agent, the Administrative Agent, any Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver hereof or thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Collateral Agent, the Administrative Agent, the Issuing Banks and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 7.09, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Collateral Agent, any Lender or any Issuing Bank may have had notice or knowledge of such Default at the time. No notice or demand on any Loan Party in any case shall entitle any Loan Party to any other or further notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Loan Party or Loan Parties with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 9.08 of the First Lien Credit Agreement.

SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.

SECTION 7.11. Severability. In the event any one or more of the provisions contained in this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of

32

the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 7.12. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract, and shall become effective as provided in Section 7.04. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.

SECTION 7.13. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

SECTION 7.14. Jurisdiction; Consent to Service of Process. (a) Each of the Grantors hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive 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 Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the Loan Parties hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the 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 Agreement or any other Loan Document shall affect any right that the Collateral Agent, the Administrative Agent, any Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Grantor or its properties in the courts of any jurisdiction.

(b) Each of the Loan Parties hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (a) of this Section 7.14. Each of the parties hereto 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.

(c) Each of the parties hereto hereby irrevocably consents to service of process in the manner provided for notices in Section 7.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

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SECTION 7.15. Termination or Release. (a) This Agreement, the guarantees made herein, the Security Interest, the pledge of the Pledged Collateral and all other security interests granted hereby shall automatically terminate when all the Loan Document Obligations (except for contingent indemnification obligations) have been indefeasibly paid in full and the Lenders have no further commitment to lend under the First Lien Credit Agreement, the aggregate L/C Exposure has been reduced to zero and the Issuing Banks have no further obligations to issue Letters of Credit under the First Lien Credit Agreement.

(b) A Subsidiary Guarantor shall automatically be released from its obligations hereunder and the Security Interests created hereunder in the Collateral of such Subsidiary Guarantor shall be automatically released upon the consummation of any transaction permitted by the First Lien Credit Agreement as a result of which such Subsidiary Guarantor ceases to be a Subsidiary.

(c) Subject to Section 3.04(b) of the Intercreditor Agreement (i) upon any sale or other transfer by any Grantor of any Collateral that is permitted under the First Lien Credit Agreement to any person that is not the Borrower or a Guarantor or (ii) upon the effectiveness of any written consent to the release of the Security Interest granted hereby in any Collateral pursuant to Section 9.08 of the First Lien Credit Agreement, the Security Interest in such Collateral shall be automatically released.

(d) In connection with any termination or release pursuant to paragraph (a), (b) or (c) above, the Collateral Agent shall promptly execute and deliver to any Grantor, at such Grantor’s expense, all Uniform Commercial Code termination statements and similar documents that such Grantor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section 7.15 shall be without recourse to or representation or warranty by the Collateral Agent or any Secured Party. Without limiting the provisions of Section 7.06, the Borrower shall reimburse the Collateral Agent upon demand for all costs and out of pocket expenses, including the fees, charges and expenses of counsel, incurred by it in connection with any action contemplated by this Section 7.15.

SECTION 7.16. Additional Subsidiaries. Any Subsidiary that is required to become a party hereto pursuant to Section 5.12 of the First Lien Credit Agreement shall enter into this Agreement as a Subsidiary Guarantor and a Grantor upon becoming such a Subsidiary. Upon execution and delivery by the Collateral Agent and such Subsidiary of a supplement in the form of Exhibit A hereto, such Subsidiary shall become a Subsidiary Guarantor and a Grantor hereunder with the same force and effect as if originally named as a Subsidiary Guarantor and a Grantor herein. The execution and delivery of any such instrument shall not require the consent of any other Loan Party hereunder. The rights and obligations of each Loan Party hereunder shall remain in full force and effect notwithstanding the addition of any new Loan Party as a party to this Agreement.

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SECTION 7.17. Right of Setoff. If an Event of Default shall have occurred and is continuing, each Secured Party is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all Collateral (including any deposits (general or special, time or demand, provisional or final)) at any time held and other obligations at any time owing by such Secured Party to or for the credit or the account of any Grantor against any and all of the obligations of such Grantor now or hereafter existing under this Agreement and the other Loan Documents held by such Secured Party, irrespective of whether or not such Secured Party shall have made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured. The rights of each Secured Party under this Section 7.17 are in addition to other rights and remedies (including other rights of setoff) which such Secured Party may have.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

INTERSTATE FIBERNET, INC.,
by	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Sr. Vice President
ITC^DELTACOM, INC.,
by	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Sr. Vice President
EACH OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO,
by	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Authorized Signatory

CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Collateral Agent,
by	/s/ James Moran
Name:	James Moran
Title:	Managing Director
by	/s/ Nupur Kumar
Name:	Nupur Kumar
Title:	Associate

37

EX-10.3

Exhibit 10.3

SECOND LIEN CREDIT AGREEMENT

dated as of

July 31, 2007

among

INTERSTATE FIBERNET, INC.,

ITC^DELTACOM, INC.,

THE LENDERS PARTY HERETO

and

CREDIT SUISSE,

as Administrative Agent and Collateral Agent

CREDIT SUISSE SECURITIES (USA) LLC,

as Bookrunner and Lead Arranger

THIS AGREEMENT IS SUBJECT TO THE INTERCREDITOR AGREEMENT REFERRED TO HEREIN. SEE SECTION 9.18 FOR CERTAIN IMPORTANT ACKNOWLEDGMENTS, CONSENTS, AGREEMENTS AND AUTHORIZATIONS RELATED THERETO.

Table of Contents

		Page
ARTICLE I
Definitions
SECTION 1.01.	Defined Terms	1
SECTION 1.02.	Terms Generally	23
SECTION 1.03.	Pro Forma Calculations	23
SECTION 1.04.	Classification of Loans and Borrowings	24
ARTICLE II
The Credits
SECTION 2.01.	Commitments	24
SECTION 2.02.	Loans	24
SECTION 2.03.	Borrowing Procedure	25
SECTION 2.04.	Evidence of Debt; Repayment of Loans	26
SECTION 2.05.	Fees	26
SECTION 2.06.	Interest on Loans	26
SECTION 2.07.	Default Interest	27
SECTION 2.08.	Alternate Rate of Interest	27
SECTION 2.09.	Termination and Reduction of Commitments	28
SECTION 2.10.	Conversion and Continuation of Borrowings	28
SECTION 2.11.	[Intentionally Omitted].	29
SECTION 2.12.	Optional Prepayment	29
SECTION 2.13.	Mandatory Prepayments	30
SECTION 2.14.	Reserve Requirements; Change in Circumstances	32
SECTION 2.15.	Change in Legality	33
SECTION 2.16.	Indemnity	33
SECTION 2.17.	Pro Rata Treatment	34
SECTION 2.18.	Sharing of Setoffs	34
SECTION 2.19.	Payments	35
SECTION 2.20.	Taxes	35
SECTION 2.21.	Assignment of Commitments Under Certain Circumstances; Duty to Mitigate	37
ARTICLE III
Representations and Warranties
SECTION 3.01.	Organization; Powers	39
SECTION 3.02.	Authorization	39
SECTION 3.03.	Enforceability	39

i

Table of Contents

(continued)

		Page
SECTION 3.04.	Governmental Approvals	39
SECTION 3.05.	Financial Statements	40
SECTION 3.06.	No Material Adverse Change	40
SECTION 3.07.	Title to Properties; Possession Under Leases	41
SECTION 3.08.	Subsidiaries	41
SECTION 3.09.	Litigation; Compliance with Laws	41
SECTION 3.10.	Agreements	42
SECTION 3.11.	Federal Reserve Regulations	42
SECTION 3.12.	Investment Company Act	42
SECTION 3.13.	Use of Proceeds	42
SECTION 3.14.	Tax Returns	42
SECTION 3.15.	No Material Misstatements	42
SECTION 3.16.	Employee Benefit Plans	43
SECTION 3.17.	Environmental Matters	43
SECTION 3.18.	Insurance	43
SECTION 3.19.	Security Documents	43
SECTION 3.20.	Location of Real Property and Leased Premises	45
SECTION 3.21.	Labor Matters	45
SECTION 3.22.	Solvency	45
SECTION 3.23.	Sanctioned Persons	46
ARTICLE IV
Conditions of Lending
SECTION 4.01.	All Credit Events	46
SECTION 4.02.	First Credit Event	47
ARTICLE V
Affirmative Covenants
SECTION 5.01.	Existence; Compliance with Laws; Businesses and Properties	50
SECTION 5.02.	Insurance	51
SECTION 5.03.	Taxes and Claims	51
SECTION 5.04.	Financial Statements, Reports, etc	52
SECTION 5.05.	Litigation and Other Notices	54
SECTION 5.06.	Information Regarding Collateral	54
SECTION 5.07.	Maintaining Records; Access to Properties and Inspections; Maintenance of Ratings	55
SECTION 5.08.	Use of Proceeds	55
SECTION 5.09.	Employee Benefits	55
SECTION 5.10.	Compliance with Environmental Laws	55
SECTION 5.11.	Preparation of Environmental Reports	55
SECTION 5.12.	Further Assurances	56

ii

Table of Contents

(continued)

		Page
SECTION 5.13.	Interest Rate Protection	56
ARTICLE VI
Negative Covenants
SECTION 6.01.	Indebtedness	57
SECTION 6.02.	Liens	59
SECTION 6.03.	Sale and Lease-Back Transactions	61
SECTION 6.04.	Investments, Loans and Advances	61
SECTION 6.05.	Mergers, Consolidations, Sales of Assets and Acquisitions	63
SECTION 6.06.	Restricted Payments; Restrictive Agreements	65
SECTION 6.07.	Transactions with Affiliates	66
SECTION 6.08.	Business of Holdings, Borrower and Subsidiaries	67
SECTION 6.09.	Other Indebtedness and Agreements	67
SECTION 6.10.	Capital Expenditures	68
SECTION 6.11.	Maximum Leverage Ratio	68
SECTION 6.12.	Fiscal Year	69
SECTION 6.13.	Certain Equity Securities	69
ARTICLE VII
Events of Default		69
ARTICLE VIII
The Administrative Agent and the Collateral Agent		72
ARTICLE IX
Miscellaneous
SECTION 9.01.	Notices	75
SECTION 9.02.	Survival of Agreement	75
SECTION 9.03.	Binding Effect	76
SECTION 9.04.	Successors and Assigns	76
SECTION 9.05.	Expenses; Indemnity	79
SECTION 9.06.	Right of Setoff	81
SECTION 9.07.	Applicable Law	81
SECTION 9.08.	Waivers; Amendment	81
SECTION 9.09.	Interest Rate Limitation	82
SECTION 9.10.	Entire Agreement	82
SECTION 9.11.	WAIVER OF JURY TRIAL	83

iii

Table of Contents

(continued)

		Page
SECTION 9.12.	Severability	83
SECTION 9.13.	Counterparts	83
SECTION 9.14.	Headings	83
SECTION 9.15.	Jurisdiction; Consent to Service of Process	83
SECTION 9.16.	Confidentiality	84
SECTION 9.17.	USA PATRIOT Act Notice	85
SECTION 9.18.	Intercreditor Agreement	85

iv

Table of Contents

(continued)

			Page
SCHEDULES
Schedule 1.01(a)	-	Subsidiary Guarantors
Schedule 1.01(b)	-	Mortgaged Property
Schedule 1.01(c)	-	Competitors
Schedule 1.01(d)	-	Southern Assets
Schedule 2.01	-	Lenders and Commitments
Schedule 3.04	-	Governmental Approvals
Schedule 3.06	-	Disclosed Matters
Schedule 3.08	-	Subsidiaries
Schedule 3.09	-	Litigation
Schedule 3.14	-	Tax Returns
Schedule 3.17	-	Environmental Matters
Schedule 3.18	-	Insurance
Schedule 3.19(a)	-	UCC Filing Offices
Schedule 3.19(c)	-	Mortgage Filing Offices
Schedule 3.20(a)	-	Owned Real Property
Schedule 3.20(b)	-	Leased Real Property
Schedule 4.02(a)	-	Local Counsel
Schedule 6.01	-	Existing Indebtedness
Schedule 6.02	-	Existing Liens
Schedule 6.04	-	Existing Investments
Schedule 6.05	-	Asset Sales
Schedule 6.07	-	Affiliate Transactions

EXHIBITS
Exhibit A	-	Form of Administrative Questionnaire
Exhibit B	-	Form of Assignment and Acceptance
Exhibit C	-	Form of Borrowing Request
Exhibit D	-	Form of Guarantee and Collateral Agreement
Exhibit E	-	Form of Intercreditor Agreement
Exhibit F	-	Form of Mortgage
Exhibit G-1	-	Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
Exhibit G-2	-	Form of Local Counsel Opinion
Exhibit H	-	Form of Interest Election

v

SECOND LIEN CREDIT AGREEMENT dated as of July 31, 2007, among INTERSTATE FIBERNET, INC., a Delaware corporation (the “Borrower”), ITC^DELTACOM, INC., a Delaware corporation (“Holdings”), the Lenders (as defined in Article I), and CREDIT SUISSE, as administrative agent (in such capacity, the “Administrative Agent”) and as collateral agent (in such capacity, the “Collateral Agent”) for the Lenders.

The Borrower has requested the Lenders to extend credit in the form of Loans (such term and each other capitalized term used but not defined in this introductory statement having the meaning given it in Article I) on the Closing Date, in an aggregate principal amount not in excess of $75,000,000. The proceeds of the Loans are to be used, together with the proceeds of term loans under the First Lien Credit Agreement, the Equity Contributions and cash on hand at Holdings, solely (a) to consummate the Existing Debt Refinancing and (b) to pay fees and expenses in respect of the Transactions.

The Lenders are willing to extend such credit to the Borrower on the terms and subject to the conditions set forth herein and in accordance with the terms of the Intercreditor Agreement. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms shall have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

“Adjusted LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum equal to the product of (a) the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.

“Administrative Agent Fees” shall have the meaning assigned to such term in Section 2.05(a).

“Administrative Questionnaire” shall mean an Administrative Questionnaire in the form of Exhibit A, or such other form as may be supplied from time to time by the Administrative Agent.

“Affiliate” shall mean, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified; provided, however, that, for purposes of Section 6.07, the term “Affiliate” shall also include any person that directly or indirectly owns 10% or more of the Voting Stock of the person specified.

Without limiting the generality of the foregoing, (a) Affiliates of Welsh, Carson, Anderson & Stowe shall include Welsh, Carson, Anderson & Stowe VIII, L.P. and WCAS Capital Partners III, L.P. and (b) Affiliates of Tennenbaum Capital Partners, LLC shall include Special Value Opportunities Fund, LLC, Special Value Expansion Fund, LLC, Special Value Continuation Partners, LP, Special Value Absolute Return Fund, LLC, Special Value Bond Fund II, LLC and Tennenbaum Opportunities Partners, LP.

“Aggregate Consideration” shall mean, with respect to any Permitted Acquisition, the sum (without duplication) of (a) the aggregate amount of all cash paid (or to be paid) by Holdings, the Borrower or any of the Subsidiaries in connection with such Permitted Acquisition (excluding payments of fees and costs and expenses in connection therewith and the Net Equity Proceeds of a substantially concurrent issuance of Qualified Capital Stock of, or capital contribution to, Holdings used to fund such Permitted Acquisition) and all contingent cash purchase price, earn-out, non-compete and other similar cash obligations of Holdings, the Borrower and any of the Subsidiaries incurred and reasonably expected to be incurred in connection therewith (as determined by the board of directors of Holdings), (b) the aggregate principal amount of all Indebtedness assumed, incurred, refinanced and/or issued in connection with such Permitted Acquisition and (c) the fair market value (as determined by the board of directors of Holdings) of all other consideration paid or payable in connection with such Permitted Acquisition (excluding, for purposes of this clause (c), the fair market value of any Equity Interests of Holdings issued (or to be issued) as consideration in connection with such Permitted Acquisition).

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. If the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the Alternate Base Rate shall be determined without regard to clause (b) of the preceding sentence until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, as the case may be.

“Applicable Percentage” shall mean, for any day (a) with respect to any Eurodollar Loan, 7.50% per annum and (b) with respect to any ABR Loan, 6.50% per annum.

“Asset Sale” shall mean the sale, transfer or other disposition (by way of merger, casualty, condemnation or otherwise) by Holdings, the Borrower or any of the Subsidiaries to any person other than the Borrower or any Subsidiary Guarantor of (a) any Equity Interests of any of the Subsidiaries (other than (i) directors’ qualifying shares or (ii) issuances of Equity Interests by the Borrower to Holdings) or (b) any other assets of the Borrower or any of the Subsidiaries (other than (i) inventory or other

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operating assets (such as fiber or ducts) sold, leased or exchanged in the ordinary course of business, (ii) assets that are damaged, obsolete or worn out or scrap, (iii) leasehold interests that are no longer used or useful in the business of Holdings or any of its Subsidiaries, (iv) dispositions by means of trade-in of equipment used in the ordinary course of business, so long as such equipment is replaced, substantially concurrently, by like-kind equipment, (v) cash and Permitted Investments, in each case disposed of in the ordinary course of business, (vi) dispositions between or among Foreign Subsidiaries, (vii) Southern Assets and (viii) sales, transfers or other dispositions having a value not in excess of $1,000,000 in the aggregate in any fiscal year (provided, that, for purposes of calculating the amounts set forth in this clause (viii), any transaction or series of related transactions involving aggregate consideration of $50,000 or less may be excluded)).

“Assignment and Acceptance” shall mean an assignment and acceptance entered into by a Lender and an assignee, and accepted by the Administrative Agent, in the form of Exhibit B or such other form as shall be approved by the Administrative Agent.

“Benefit Plan Exchange Offer” shall mean any transaction in which Holdings acquires and/or retires Equity Plan Securities in exchange for other Equity Plan Securities.

“Board” shall mean the Board of Governors of the Federal Reserve System of the United States of America.

“Board Designees” shall mean individuals whose nomination for election, appointment or election as directors of Holdings is effectuated pursuant to the Governance Agreement.

“Borrowing” shall mean Loans of the same Type made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.

“Borrowing Request” shall mean a request by the Borrower in accordance with the terms of Section 2.03 and substantially in the form of Exhibit C, or such other form as shall be approved by the Administrative Agent.

“BTI Telecom Notes” shall mean all obligations due or outstanding under or in connection with BTI Telecom Corp.’s 10.5% senior unsecured notes due 2007.

“Business Day” shall mean any day other than a Saturday, Sunday or day on which banks in New York City are authorized or required by law to close; provided, however, that when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“Capital Expenditures” shall mean, for any period, the additions to property, plant and equipment and other capital expenditures of Holdings and its consolidated Subsidiaries that are (or should be) set forth in a consolidated statement of cash flows of Holdings for such period prepared in accordance with GAAP, whether such additions or

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expenditures are paid in cash or financed, but excluding (i) any such expenditure made to restore, replace or rebuild property to the condition of such property immediately prior to any damage, loss, destruction or condemnation of such property, to the extent such expenditure is made with insurance proceeds, condemnation awards or damage recovery proceeds relating to any such damage, loss, destruction or condemnation, (ii) expenditures for transactions permitted pursuant to Section 6.04 (other than Section 6.04(i)) and (iii) amounts reinvested in accordance with the definition of Net Cash Proceeds. For purposes of this definition, the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment or with insurance proceeds shall be included in Capital Expenditures only to the extent of the gross amount of such purchase price less the credit granted by the seller of such equipment for the equipment being traded in at such time or the amount of such proceeds, as the case may be.

“Capital Lease Obligations” of any person shall mean the obligations of such person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

A “Change in Control” shall be deemed to have occurred on any date if (a) a “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) other than the Permitted Investors becomes the “beneficial owner” (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act) of more than 35% of the total voting power of the Voting Stock of Holdings on a Fully Diluted Basis and such ownership represents a greater percentage of the total voting power of the Voting Stock of Holdings, on a Fully Diluted Basis, than the percentage of the total voting power of the Voting Stock of Holdings, on a Fully Diluted Basis, beneficially owned (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act) by the Permitted Investors on such date, (b) individuals who on the Closing Date constitute the board of directors of Holdings (together with any new directors whose appointment by the board of directors of Holdings or whose nomination by the board of directors of Holdings for election by the stockholders of Holdings was approved by a vote of at least a majority of the members of the board of directors then in office who either were members of the board of directors on the Closing Date or whose appointment or nomination for election was previously so approved) cease for any reason to constitute a majority of the members of the board of directors of Holdings then in office, (c) any change in control (or similar event, however denominated) with respect to Holdings or the Borrower shall occur under and as defined in any indenture or agreement in respect of Material Indebtedness to which Holdings or the Borrower is a party, or (d) Holdings shall cease to directly own, beneficially (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act) and of record, 100% of the issued and outstanding Equity Interests of the Borrower. For purposes of clause (b) of this definition, all Board Designees shall be deemed to be members of the board of directors of Holdings whose appointment or nomination for election was approved in the manner specified in such clause (b).

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“Change in Law” shall mean (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender (or, for purposes of Section 2.14, by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“Closing Date” shall mean July 31, 2007.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

“Collateral” shall mean all the “Collateral” as defined in any Security Document and shall also include the Mortgaged Properties.

“Commitment” shall mean, with respect to each Lender, the commitment of such Lender to make Loans hereunder as set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender assumed its Commitment, as applicable, as the same may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The aggregate amount of the Commitments as of the Closing Date is $75,000,000.

“Common Stock” shall mean the common stock, par value $0.01 per share, of Holdings.

“Competitor” shall mean any person identified on Schedule 1.01(c) (or any Affiliate thereof) and any other person (or any Affiliate thereof) that engages primarily, or as one of its principal activities, in the business of providing competitive local exchange telecommunications services to business customers.

“Confidential Information Memorandum” shall mean the Confidential Information Memorandum of the Borrower dated June 2007.

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such period (without giving effect to Net Transaction Costs or any extraordinary gains or losses) plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated interest expense for such period (including amortization of deferred financing fees and other original issue discount and banking fees, charges and commissions, including letter of credit fees and commitment fees), (ii) consolidated income tax expense for such period (including state single business unitary and similar taxes imposed in lieu of income taxes), (iii) all amounts attributable to depreciation and amortization for such period, (iv) non-cash charges for such period for asset impairment charges and other similar write-offs of long-term assets, restructuring charges, costs of exiting a facility and charges associated with equity compensation, and (v) any cash received in the current period associated with any amounts previously excluded from Consolidated EBITDA pursuant to clause (b)(ii)

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below, and minus (b) without duplication (i) cash payments made during such period on account of non-cash charges added to Consolidated Net Income pursuant to clause (a)(iv) above in a previous period (excluding cash payments made for non-cash charges incurred prior to the Closing Date) and (ii) to the extent included in determining such Consolidated Net Income, non-cash gains on sales or other dispositions of assets for such period, all determined on a consolidated basis in accordance with GAAP; provided that Consolidated EBITDA for the fiscal quarter ended (i) December 31, 2006, shall be deemed to be $16,358,100, (ii) March 31, 2007, shall be deemed to be $17,481,900 and (iii) June 30, 2007, shall be deemed to be $19,467,700.

“Consolidated Interest Expense” shall mean, for any period, the sum of (a) the interest expense (including imputed interest expense in respect of Capital Lease Obligations and Synthetic Lease Obligations) of Holdings and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, plus (b) any interest accrued during such period in respect of Indebtedness of Holdings or any Subsidiary that is required to be capitalized rather than included in consolidated interest expense for such period in accordance with GAAP; provided that Consolidated Interest Expense shall not include expenses for amortization of deferred financing or debt issuance costs or original issue discount. For purposes of the foregoing, interest expense shall be determined after giving effect to any net payments made or received by Holdings or any Subsidiary with respect to interest rate Hedging Agreements.

“Consolidated Net Income” shall mean, for any period, the net income or loss of Holdings and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by the Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or governmental regulation applicable to such Subsidiary, (b) the income of any person in which any other person (other than Holdings or a wholly owned Subsidiary or any director holding qualifying shares in accordance with applicable law) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to Holdings or a wholly owned Subsidiary by such person during such period, and (c) any gains attributable to sales of assets out of the ordinary course of business.

“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.

“Credit Event” shall have the meaning assigned to such term in Section 4.01.

“Current Assets” shall mean, at any time, the consolidated current assets (other than cash and Permitted Investments) of Holdings and its Subsidiaries, determined in accordance with GAAP.

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“Current Liabilities” shall mean, at any time, the consolidated current liabilities of Holdings and its Subsidiaries at such time, determined in accordance with GAAP, but excluding, without duplication, (a) the current portion of any long-term Indebtedness and (b) outstanding Revolving Loans (as defined in the First Lien Credit Agreement) and Swingline Loans (as defined in the First Lien Credit Agreement).

“Default” shall mean any event or condition which upon notice, lapse of time or both would constitute an Event of Default.

“Disclosed Matter” shall mean the existence or occurrence of any matter which has been disclosed by Holdings (a) on Schedule 3.06 hereto, (b) in any filing on Form 10-K, 10-Q or 8-K made with the Securities and Exchange Commission prior to July 31, 2007, or (c) in the Confidential Information Memorandum.

“Disqualified Stock” shall mean any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable (other than for Qualified Capital Stock), pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than for Qualified Capital Stock), in whole or in part, or requires the payment of any cash dividend or any other scheduled cash payment constituting a return of capital, in each case at any time on or prior to the date that is 91 days after the Maturity Date, or (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Equity Interest referred to in clause (a) above, in each case at any time prior to the date that is 91 days after the Maturity Date.

“dollars” or “$” shall mean lawful money of the United States of America.

“Domestic Subsidiaries” shall mean all Subsidiaries incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia.

“Eligible Assignee” shall mean any commercial bank, insurance company, investment or mutual fund or other entity (but not any natural person) that is an “accredited investor” (as defined in Regulation D under the Securities Act of 1933, as amended) that extends credit or invests in bank loans as one of its businesses; provided that (a) the Borrower and its Affiliates shall not be Eligible Assignees and (b) no Competitor shall be an Eligible Assignee unless an Event of Default is continuing for not less than ninety days at the time of any relevant assignment.

“Environmental Laws” shall mean all former, current and future Federal, state, local and foreign laws (including common law), treaties, regulations, rules, ordinances, codes, decrees, judgments, legally binding directives and orders (including consent orders), in each case, relating to protection of the environment, natural resources, human health and safety or the presence, Release of, or exposure to, Hazardous Materials, or the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling or handling of, or the arrangement for such activities with respect to, Hazardous Materials.

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“Environmental Liability” shall mean all liabilities, obligations, damages, losses, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including administrative oversight costs, natural resource damages and remediation costs), whether contingent or otherwise, arising out of or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release of any Hazardous Materials or (e) any contract or agreement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equity Contributions” shall mean, collectively, the issuance by Holdings of (a) Common Stock to investment funds constituting, Affiliated with or managed by Welsh, Carson, Anderson & Stowe, generating gross cash proceeds of not less than $21,000,000 and (b) 6% Series H Convertible Redeemable Preferred Stock to existing institutional shareholders (including H Partners, LP, Joshua Tree Capital Partners, LP, Trace Partners, LP and, if applicable, certain other purchasers), generating gross cash proceeds of not less than $41,200,000, in each case on the Closing Date.

“Equity Interests” shall mean shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any person, and any option, warrant or other right entitling the holder thereof to purchase or otherwise acquire any such equity interest.

“Equity Plan” shall mean any stock option, restricted stock, stock incentive, employee stock purchase, deferred compensation, profit sharing, defined benefit, defined contribution or other benefit plan of Holdings or any of its Subsidiaries and the related award agreements under each such plan.

“Equity Plan Securities” shall mean any Equity Interests of Holdings awarded, granted, sold or issued pursuant to any Equity Plan.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that, together with Holdings, is treated as a single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived), (b) prior to the effectiveness of the applicable provisions of the Pension Act, the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA) or, on and after the effectiveness of the applicable provisions of the Pension

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Act, any failure by any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, in each case whether or not waived, (c) the filing pursuant to prior to, the effectiveness of the applicable provisions of the Pension Act, Section 412(d) of the Code or Section 303(d) of ERISA or, on and after the effectiveness of the applicable provisions of the Pension Act, Section 412(c) of the Code or Section 302(c) of ERISA, of an application for a waiver of the minimum funding standard with respect to any Plan, (d) on and after the effectiveness of the applicable provisions of the Pension Act, a determination that any Plan is, or is expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code), (e) the incurrence by Holdings or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan or the withdrawal or partial withdrawal of Holdings or any of its ERISA Affiliates from any Plan or Multiemployer Plan, (f) the receipt by Holdings or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (g) prior to the effectiveness of the applicable provisions of the Pension Act, the adoption of any amendment to a Plan that would require the provision of security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, (h) the receipt by Holdings or any of its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from Holdings or any of its ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA or, on and after the effectiveness of the applicable provisions of the Pension Act, in endangered or critical status, within the meaning of Section 305 of ERISA, (i) the occurrence of a “prohibited transaction” with respect to which Holdings or any of the Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of the Code) or with respect to which the Borrower or any such Subsidiary could otherwise be liable or (j) any other event or condition with respect to a Plan or Multiemployer Plan that could result in liability of Holdings or any Subsidiary.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” shall have the meaning assigned to such term in Article VII.

“Excess Cash Flow” shall mean, for any fiscal year of Holdings, the excess of (a) the sum, without duplication, of (i) Consolidated EBITDA for such fiscal year and (ii) reductions to noncash working capital of Holdings and the Subsidiaries for such fiscal year (i.e., the decrease, if any, in Current Assets minus Current Liabilities from the beginning to the end of such fiscal year) over (b) the sum, without duplication, of (i) the amount of any Taxes payable in cash by Holdings and the Subsidiaries with respect to such fiscal year, (ii) Consolidated Interest Expense for such fiscal year paid in cash, (iii) Capital Expenditures made in cash in accordance with Section 6.10 during such fiscal year, except to the extent financed with the proceeds of Indebtedness, equity issuances, casualty proceeds, condemnation proceeds or other proceeds that would not be included in Consolidated EBITDA, (iv) permanent repayments of Indebtedness (other

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than prepayments of Loans) made in cash by Holdings and the Subsidiaries during such fiscal year, but only to the extent that the Indebtedness so prepaid by its terms cannot be reborrowed or redrawn and such prepayments do not occur in connection with a refinancing of all or any portion of such Indebtedness, (v) additions to noncash working capital for such fiscal year (i.e., the increase, if any, in Current Assets minus Current Liabilities from the beginning to the end of such fiscal year), (vi) cash expenditures for investments, loans or advances made pursuant to Section 6.04(a) (in respect of investments in, and loans and advances to, Foreign Subsidiaries) or (f), in each case, except to the extent financed with the proceeds of Indebtedness, equity issuances, casualty proceeds, condemnation proceeds or other proceeds that would not be included in Consolidated EBITDA, (vii) cash expenses incurred in respect of Hedging Agreements, and (viii) cash expenditures and cash deposits made in connection with the Transactions.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, as in effect on the date hereof.

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (a) above and (c) in the case of a Lender (other than an assignee pursuant to a request by the Borrower under Section 2.21(a)), any withholding tax that is imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Lender’s failure to comply with Sections 2.20(e) and 2.20(f), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.20(a).

“Existing Debt” shall mean, collectively, all obligations due or outstanding under or in connection with (a) the Borrower’s first lien senior secured notes due 2009, (b) the Borrower’s Second Amended and Restated Credit Agreement dated as of July 26, 2005, as amended through the Closing Date, (c) the Existing Third Lien Notes, (d) Business Telecom, Inc.’s 10% unsecured vendor notes due 2009 and (e) Holdings’ existing capital leases (except for capital leases identified on Schedule 6.01), in each case as in the effect immediately prior to the Transactions to occur on the Closing Date.

“Existing Debt Refinancing” shall mean the repayment in full of the Existing Debt (other than the Existing Third Lien Notes to be converted into Common Stock pursuant to the Transaction) and the irrevocable release of all Guarantees (if any) thereof and security (if any) therefor.

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“Existing Third Lien Notes” shall mean the Borrower’s third lien senior secured notes due 2009.

“Federal Funds Effective Rate” shall mean, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Fee Letter” shall mean the Fee Letter dated June 8, 2007, between Holdings, the Administrative Agent and Credit Suisse Securities (USA) LLC.

“Financial Officer” of any person shall mean the chief financial officer, principal accounting officer, treasurer or controller of such person.

“First Lien Credit Agreement” shall mean the First Lien Credit Agreement dated as of the date hereof (as amended, supplemented or otherwise modified from time to time), among the Borrower, Holdings, the lenders from time to time party thereto, and Credit Suisse, as administrative agent and as collateral agent.

“First Lien Loan Documents” shall have the meaning assigned to the term “Loan Documents” in the First Lien Credit Agreement.

“First Priority Liens” shall have the meaning assigned to such term in the Intercreditor Agreement.

“Foreign Lender” shall mean any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic Subsidiary.

“Fully Diluted Basis” shall mean, as of any date of determination, the sum of (a) the number of shares of Voting Stock outstanding as of such date of determination plus (b) the number of shares of Voting Stock issuable upon the exercise, conversion or exchange of all then-outstanding warrants, options, convertible capital stock or indebtedness, exchangeable capital stock or indebtedness, or other rights exercisable for or convertible or exchangeable into, directly or indirectly, shares of Voting Stock, whether at the time of issue or upon the passage of time or upon the occurrence of some future event, and whether or not in the money as of such date of determination.

“GAAP” shall mean United States generally accepted accounting principles applied on a consistent basis.

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“Governance Agreement” shall mean the Amended and Restated Governance Agreement, dated as of July 26, 2005, among Holdings, WCAS Capital Partners III, L.P., Welsh, Carson, Anderson & Stowe VIII, L.P., WCAS Information Partners, L.P., Special Value Absolute Bond Fund II, LLC, Special Value Absolute Return Fund, LLC, and the other parties thereto, from time to time, as amended.

“Governmental Authority” shall mean any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body.

“Granting Lender” shall have the meaning assigned to such term in Section 9.04(i).

“Guarantee” of or by any person shall mean any obligation, contingent or otherwise, of such person guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment of such Indebtedness or (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness; provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made (or, if less, the maximum amount of such primary obligation for which such person may be liable pursuant to the terms of the instrument evidencing such Guarantee) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such person is required to perform thereunder), as determined by such person in good faith.

“Guarantee and Collateral Agreement” shall mean the Second Lien Guarantee and Collateral Agreement, substantially in the form of Exhibit D, among the Borrower, Holdings, the Subsidiaries party thereto and the Collateral Agent for the benefit of the Secured Parties.

“Guarantors” shall mean Holdings and the Subsidiary Guarantors.

“Hazardous Materials” shall mean (a) any petroleum products or byproducts and all other hydrocarbons, radon gas, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting substances and (b) any chemical, material, substance or waste that is prohibited, limited or regulated by or pursuant to any Environmental Law.

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“Hedging Agreement” shall mean any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“Indebtedness” of any person shall mean, without duplication, (a) all obligations of such person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such person upon which interest charges are customarily paid, (d) all obligations of such person under conditional sale or other title retention agreements relating to property or assets purchased by such person, (e) all obligations of such person issued or assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned by such person, whether or not the obligations secured thereby have been assumed, (g) all Guarantees by such person of Indebtedness of others, (h) all Capital Lease Obligations and Synthetic Lease Obligations of such person, (i) all reimbursement obligations of such person as an account party in respect of letters of credit and (j) all reimbursement obligations of such person in respect of bankers’ acceptances. The Indebtedness of any person shall include the Indebtedness of any partnership in which such person is a general partner, except to the extent that contractual provisions binding on the holder of such Indebtedness provide that such person is not liable therefor. Notwithstanding the foregoing, the Indebtedness of Southern shall be deemed not to be Indebtedness of Holdings or any of its Subsidiaries solely by virtue of the existence of the Southern Liens.

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

“Intercreditor Agreement” shall have the meaning assigned to such term in Section 9.18.

“Interest Payment Date” shall mean (a) with respect to any ABR Loan, the last Business Day of each March, June, September and December, and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day that would have been an Interest Payment Date had successive Interest Periods of three months’ duration been applicable to such Borrowing.

“Interest Period” shall mean, with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6 months thereafter, as the Borrower may elect; provided, however, that if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day. Interest shall accrue

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from and including the first day of an Interest Period to but excluding the last day of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“Lenders” shall mean (a) the persons listed on Schedule 2.01 (other than any such person that has ceased to be a party hereto pursuant to an Assignment and Acceptance) and (b) any person that has become a party hereto pursuant to an Assignment and Acceptance.

“Leverage Ratio” shall mean, at any date of determination, the ratio of Total Debt on such date to Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended on or prior to such date. In any period of four consecutive fiscal quarters in which a Permitted Acquisition or Significant Asset Sale occurs, the Leverage Ratio shall be determined on a pro forma basis in accordance with Section 1.03.

“LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any Interest Period, the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the commencement of such Interest Period by reference to the British Bankers’ Association Interest Settlement Rates for deposits in dollars (as set forth by any service selected by the Administrative Agent that has been nominated by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rates) for a period equal to such Interest Period; provided that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the “LIBO Rate” shall be the interest rate per annum determined by the Administrative Agent to be the average of the rates per annum at which deposits in dollars are offered for such relevant Interest Period to major banks in the London interbank market in London, England by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the beginning of such Interest Period.

“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Loan Documents” shall mean this Agreement, the Security Documents, and the promissory notes, if any, executed and delivered pursuant to Section 2.04(e).

“Loan Parties” shall mean the Borrower and the Guarantors.

“Loans” shall mean the loans made by the Lenders to the Borrower pursuant to Section 2.01, as the same may be increased by the aggregate PIK Increase.

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

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“Material Adverse Effect” shall mean a materially adverse effect on (a) the business, assets, liabilities, operations, condition (financial or otherwise) or operating results of Holdings and the Subsidiaries, taken as a whole, (b) the ability of the Borrower or any other Loan Party to perform any of its obligations under any Loan Document to which it is or will be a party or (c) the rights and remedies of or benefits available to the Lenders under any Loan Document; provided that no Disclosed Matter shall constitute a Material Adverse Effect.

“Material Indebtedness” shall mean Indebtedness (other than the Loans), or obligations in respect of one or more Hedging Agreements, of any one or more of Holdings, the Borrower or any Subsidiary in an aggregate principal amount exceeding $5,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of Holdings, the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that Holdings, the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.

“Maturity Date” shall mean July 31, 2014.

“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.

“Mortgaged Properties” shall mean, initially, the owned real properties and leasehold and subleasehold interests of the Loan Parties specified on Schedule 1.01(b), and shall include each other parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.12.

“Mortgages” shall mean the mortgages, deeds of trust, leasehold mortgages, assignments of leases and rents, modifications and other security documents delivered pursuant to clause (i) of Section 4.02(h) or pursuant to Section 5.12, each substantially in the form of Exhibit F.

“Multiemployer Plan” shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Cash Proceeds” shall mean (a) with respect to any Asset Sale, the cash proceeds (including cash proceeds subsequently received (as and when received) in respect of noncash consideration initially received), net of (i) selling expenses (including reasonable broker’s fees or commissions, legal fees, transfer and similar taxes and the Borrower’s good faith estimate of income taxes paid or payable in connection with such sale), (ii) amounts provided as a reserve, in accordance with GAAP, against any liabilities under any indemnification obligations or purchase price adjustment associated with such Asset Sale (provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Cash Proceeds) and (iii) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness for borrowed money which is secured by the asset sold in such Asset Sale and which is required to be repaid with such proceeds (other than any such Indebtedness assumed by the purchaser of such asset); provided, however, that, if (x) the Borrower

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shall deliver a certificate of a Financial Officer to the Administrative Agent at the time of receipt thereof setting forth the Borrower’s intent to reinvest such proceeds in productive assets of a kind then used or usable in the business of the Borrower and its Subsidiaries or to make capital expenditures in connection with the improvement of the capital assets of Holdings or any of its Subsidiaries within 180 days of receipt of such proceeds and (y) no Default or Event of Default shall have occurred and shall be continuing at the time of such certificate or at the proposed time of the application of such proceeds, such proceeds shall not constitute Net Cash Proceeds except to the extent not so used at the end of such 180-day period, at which time such proceeds shall be deemed to be Net Cash Proceeds; and (b) with respect to any issuance or incurrence of Indebtedness, the cash proceeds thereof, net of all taxes and customary fees, commissions, costs and other expenses incurred in connection therewith.

“Net Equity Proceeds” shall mean, with respect to each issuance or sale of any Qualified Capital Stock of Holdings or any capital contribution to Holdings, the cash proceeds (net of underwriting discounts and commissions and other costs associated therewith; including those of attorneys, accountants and other professionals) received by Holdings from the sale or issuance of such Qualified Capital Stock or from such capital contribution.

“Net Transaction Costs” shall mean (i) any income or expense amounts recorded in connection with or required to be recorded to give effect to the Transactions, the Rights Offering and the redemption, repayment or conversion of Holdings’ 6% Series H Convertible Redeemable Preferred Stock or (ii) any cash proceeds or expenditures related to the Transactions, the Rights Offering and the redemption, repayment or conversion of Holdings’ 6% Series H Convertible Redeemable Preferred Stock, whether such amounts pursuant to (i) or (ii) occurred prior to, on, or after the Closing Date.

“Obligations” shall mean all obligations defined as “Obligations” in the Guarantee and Collateral Agreement and the other Security Documents.

“Other Taxes” shall mean any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

“Pension Act” shall mean the Pension Protection Act of 2006, as amended from time to time.

“Perfection Certificate” shall mean the Perfection Certificate substantially in the form of Exhibit B to the Guarantee and Collateral Agreement.

“Permitted Acquisition” shall have the meaning assigned to such term in Section 6.04(h).

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“Permitted Investments” shall mean:

(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b) obligations issued by any state of the United States of America or any municipality or other political subdivision of any such state or any public instrumentality thereof having, at the time of acquisition, the highest rating obtainable from any of S&P, Moody’s or Fitch Ratings, Inc.;

(c) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, a credit rating of at least “A-1” (or the then equivalent grade) from S&P or at least “P-1” (or the then equivalent grade) from Moody’s;

(d) investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, the Administrative Agent or any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

(e) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria of clause (d) above;

(f) investments in “money market funds” within the meaning of Rule 2a-7 of the Investment Company Act of 1940, as amended, substantially all of whose assets are invested in investments of the type described in clauses (a) through (e) above;

(g) investments in so-called “auction rate” securities rated AAA or higher by S&P or Aaa or higher by Moody’s and which have a reset date not more than 90 days from the date of acquisition thereof; and

(h) other short-term investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management in investments of a type analogous to the foregoing.

“Permitted Investors” shall mean Tennenbaum Capital Partners, LLC, Welsh, Carson, Anderson & Stowe, Credit Suisse Securities (Europe) Limited, and any of their respective Affiliates.

“Permitted Reorganizations” shall mean a corporate reorganization transaction or series of transactions approved by the Administrative Agent and, if Tennenbaum Capital Partners, LLC, its Affiliates and its related persons represent the Required Lenders, Tennenbaum Capital Partners, LLC in their reasonable discretion pursuant to which

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certain business operations of BTI Telecom Corp. and its subsidiaries are combined with certain business operations of the Borrower, DeltaCom, Inc. and DeltaCom Information Systems, Inc. (whether accomplished by merger, share exchange, stock transfer, asset transfer or otherwise) for purposes of avoiding overlapping of certain interconnection agreements, certain duplicative fees and expenses, and otherwise streamlining the business and operations of Holdings and its Subsidiaries; provided, that, in addition to other reasonable conditions the Administrative Agent may require, (a) in the case of any merger or consolidation involving the Borrower, the Borrower shall be the surviving person, (b) the person formed by or surviving such merger or consolidation (if not Holdings) shall be a direct or indirect wholly owned Subsidiary of Holdings and if a Subsidiary Guarantor is a party thereto, the person formed by or surviving such merger or consolidation (if not Holdings or the Borrower) shall be a direct or indirect wholly owned Subsidiary Guarantor, (c) immediately after giving effect to such reorganization, on a pro forma basis, Holdings and its Subsidiaries, taken as a whole, shall have a net worth equal to or greater than the consolidated net worth of Holdings and its Subsidiaries, taken as a whole, immediately prior to such reorganization, and (d) such reorganization does not result in the Borrower or any of the Subsidiaries no longer being wholly owned, directly or indirectly, by Holdings.

“person” shall mean any natural person, corporation, business trust, joint venture, association, company, limited liability company, partnership, Governmental Authority or other entity.

“PIK Election” shall mean a written notice, substantially in the form of Exhibit H, delivered by the Borrower to the Administrative Agent at least 30 days prior to the beginning of any PIK Interest Period and specifying a PIK Portion for such PIK Interest Period. The Administrative Agent shall promptly notify the Lenders of any PIK Election. If no PIK Election is received as provided for above, then the Borrower shall be deemed to have elected to pay interest on the Loans for the relevant Interest Period entirely in cash.

“PIK Increase” shall have the meaning assigned to such term in Section 2.06(c).

“PIK Interest Period” shall mean any Interest Period ending on or prior to the second anniversary of the Closing Date for which the Borrower has made a PIK Election.

“PIK Portion” shall mean, with respect to any PIK Interest Period, that portion of the interest on the Loans for such Interest Period (not to exceed 4.00% per annum) that the Borrower has elected to pay by increasing the principal amount of the outstanding Loans at the end of such Interest Period and not in cash.

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which Holdings or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

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“Prime Rate” shall mean the rate of interest per annum determined from time to time by Credit Suisse as its prime rate in effect at its principal office in New York City and notified to the Borrower.

“Qualified Capital Stock” of any person shall mean any Equity Interest of such person that is not Disqualified Stock.

“Register” shall have the meaning assigned to such term in Section 9.04(d).

“Regulation T” shall mean Regulation T of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“Regulation U” shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“Regulation X” shall mean Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“Related Fund” shall mean, with respect to any Lender that is a fund or commingled investment vehicle that invests in bank loans, any other fund that invests in bank loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“Related Parties” shall mean, with respect to any specified person, such person’s Affiliates and the respective directors, trustees, officers, employees, agents and advisors of such person and such person’s Affiliates.

“Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment or within or upon any building, structure, facility or fixture.

“Required Lenders” shall mean, at any time, Lenders having Loans and Commitments representing more than 50% of the sum of all Loans outstanding and Commitments at such time.

“Responsible Officer” of any person shall mean any executive officer or Financial Officer of such person and any other officer or similar official thereof responsible for the administration of the obligations of such person in respect of this Agreement.

“Restricted Indebtedness” shall mean Indebtedness of Holdings, the Borrower or any Subsidiary, the payment, prepayment, repurchase or defeasance of which is restricted under Section 6.09(b).

“Restricted Payment” shall mean any dividend or other distribution (whether in cash, securities or other property (other than Qualified Capital Stock)) with respect to any Equity Interests in Holdings, the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property (other than Qualified Capital Stock)), including any

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sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in Holdings, the Borrower or any Subsidiary.

“Rights Offering” shall mean the distribution of rights to purchase Common Stock to existing stockholders of Common Stock and other transactions described in that certain Equity Purchase and Rights Offering Agreement, dated as of July 31, 2007, by and among the purchasers party thereto and Holdings, and in amendments modifications or supplements thereto which are not materially adverse to the interests of the Lenders.

“Secured Parties” shall have the meaning assigned to such term in the Guarantee and Collateral Agreement.

“Security Documents” shall mean the Mortgages, the Guarantee and Collateral Agreement, the Intercreditor Agreement and each of the security agreements, mortgages and other instruments and documents executed and delivered pursuant to any of the foregoing or pursuant to Section 5.09.

“Significant Asset Sale” shall mean the sale, transfer, lease or other disposition by Holdings or any Subsidiary to any person other than the Borrower or a Subsidiary Guarantor of all or substantially all of the assets of, or a majority of the Equity Interests in, a person, or a division or line of business or other business unit of a person.

“Southern” shall mean Southern Telecom Inc. and its affiliates described on Schedule 1.01(d).

“Southern Assets” shall mean the fiber and related rights and assets owned or to be owned by Southern or in which Southern has a security interest described on Schedule 1.01(d), in each case, pursuant to the Southern Company Agreement.

“Southern Company Agreement” shall mean the Revised and Restated Fiber Optic Facilities and Services Agreement, dated as of June 9, 1995 (as amended, supplemented, renewed, replaced, or otherwise modified from time to time), among Southern Development and Investment Group, Inc., on behalf of itself and as agent for Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Savannah Electric and Power Company, Southern Electric Generating Company and Southern Company Services, Inc., and MPX Systems, Inc., which was assigned in part by MPX Systems, Inc. to Gulf States FiberNet pursuant to an assignment dated as of July 25, 1995.

“Southern Lien” shall mean the Lien or Liens on the Southern Assets described on Schedule 1.01(d).

“SPC” shall have the meaning assigned to such term in Section 9.04(i).

“S&P” shall mean Standard & Poor’s Ratings Service, or any successor thereto.

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“Statutory Reserves” shall mean a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board and any other banking authority, domestic or foreign, to which the Administrative Agent or any Lender (including any branch, Affiliate or other fronting office making or holding a Loan) is subject for Eurocurrency Liabilities (as defined in Regulation D of the Board). Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities (as defined in Regulation D of the Board) and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“subsidiary” shall mean, with respect to any person (herein referred to as the “parent”), any corporation, partnership, limited liability company, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interests are, at the time any determination is being made, owned, Controlled or held, or (b) that is, at the time any determination is made, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“Subsidiary” shall mean any subsidiary of the Borrower or Holdings.

“Subsidiary Guarantor” shall mean each Subsidiary listed on Schedule 1.01(a), and each other Subsidiary that is or becomes a party to the Guarantee and Collateral Agreement.

“Supermajority of Lenders” shall mean, at any time, Lenders having Loans and Commitments representing more than 66-2/3% of the sum of all Loans outstanding and Commitments at such time.

“Synthetic Lease” shall mean, as to any person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) (a) that is accounted for as an operating lease under GAAP and (b) in respect of which the lessee retains or obtains ownership of the property so leased for U.S. federal income tax purposes, other than any such lease under which such person is the lessor.

“Synthetic Lease Obligations” shall mean, as to any person, an amount equal to the capitalized amount of the remaining lease payments under any Synthetic Lease that would appear on a balance sheet of such person in accordance with GAAP if such obligations were accounted for as Capital Lease Obligations.

“Synthetic Purchase Agreement” shall mean any swap, derivative or other agreement or combination of agreements pursuant to which Holdings, the Borrower or any Subsidiary is or may become obligated to make (a) any payment in connection with a

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purchase by any third party from a person other than Holdings, the Borrower or any Subsidiary of any Equity Interest or Restricted Indebtedness or (b) any payment (other than on account of a permitted purchase by it of any Equity Interest or Restricted Indebtedness) the amount of which is determined by reference to the price or value at any time of any Equity Interest or Restricted Indebtedness; provided that no phantom stock or similar plan or any Equity Plan providing for payments only to current or former directors, officers or employees of Holdings, the Borrower or the Subsidiaries (or to their heirs or estates) shall be deemed to be a Synthetic Purchase Agreement.

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

“Total Debt” shall mean, at any time, the total Indebtedness of the Borrower and the Subsidiaries at such time (excluding (a) Indebtedness of the type described in clause (i) of the definition of such term, except to the extent of any unreimbursed drawings thereunder, and (b) intercompany Indebtedness).

“Transactions” shall mean, collectively, (a) the Equity Contributions, (b) the Existing Debt Refinancing, (c) the issuance of Common Stock to the holders of Holdings’ outstanding warrants originally issued on October 6, 2003 (the “Series B Warrants”) and warrants originally issued on March 29, 2005 (the “Series C Warrants”) in exchange for such Series B Warrants and Series C Warrants, (d) the issuance by Holdings of Common Stock or its 8% Series C Convertible Redeemable Preferred Stock to the holders of Holdings’ outstanding Series D Warrants (the “D Warrant Exercise”) pursuant to the exercise thereof, (e) the conversion into, or exchange for, shares of Common Stock of all the outstanding shares of Holdings’ 8% Series A Convertible Redeemable Preferred Stock, 8% Series B Convertible Redeemable Preferred Stock and, to the extent outstanding, 8% Series C Convertible Redeemable Preferred Stock (including the shares issued upon the D Warrant Exercise), (f) the conversion of approximately $48,500,000 in aggregate principal amount of Existing Third Lien Notes into shares of Common Stock (and all outstanding obligations in respect thereof, including all principal, premium and accrued and unpaid interest, fees and other amounts with respect thereto, being extinguished and all guarantees and security with respect thereto being released), (g) the execution, delivery and performance by the Loan Parties of the Loan Documents to which they are a party and the making of the Borrowings hereunder, (h) the execution, delivery and performance by the Loan Parties (as defined in the First Lien Credit Agreement) of the First Lien Loan Documents to which they are a party and the making of the Borrowings (as defined in the First Lien Credit Agreement) thereunder, and (i) the payment of related fees and expenses.

“Type”, when used in respect of any Loan or Borrowing, shall refer to the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined. For purposes hereof, the term “Rate” shall mean the Adjusted LIBO Rate and the Alternate Base Rate.

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“USA PATRIOT Act” shall mean The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

“Voting Stock” shall mean, with respect to any person, Equity Interests of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such person.

“wholly owned Subsidiary” of any person shall mean a subsidiary of such person of which securities (except for directors’ qualifying shares) or other ownership interests representing 100% of the Equity Interests are, at the time any determination is being made, owned, Controlled or held by such person or one or more wholly owned Subsidiaries of such person or by such person and one or more wholly owned Subsidiaries of such person.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”; and the words “asset” and “property” shall be construed as having the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. All references herein to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Except as otherwise expressly provided herein, (a) any reference in this Agreement to any Loan Document shall mean such document as amended, restated, supplemented or otherwise modified from time to time and (b) all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided, however, that if the Borrower notifies the Administrative Agent that the Borrower wishes to amend any covenant in Article VI or any related definition to eliminate the effect of any change in GAAP occurring after the date of this Agreement on the operation of such covenant (or if the Administrative Agent notifies the Borrower that the Required Lenders wish to amend Article VI or any related definition for such purpose), then the Borrower’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrower and the Required Lenders.

SECTION 1.03. Pro Forma Calculations. With respect to any period of four consecutive fiscal quarters during which any Permitted Acquisition or Significant Asset Sale occurs (and for purposes of determining whether an acquisition is a Permitted Acquisition under Section 6.04(h) or would result in a Default or an Event of Default),

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the Leverage Ratio shall be calculated with respect to such period on a pro forma basis after giving effect to such Permitted Acquisition or Significant Asset Sale (including all pro forma adjustments permitted or required by Article 11 of Regulation S-X under the Securities Act of 1933, as amended; provided that all such adjustments shall be set forth in a reasonably detailed certificate of a Financial Officer of the Borrower), using, for purposes of making such calculations, the historical financial statements of the Borrower and the Subsidiaries which shall be reformulated as if such Permitted Acquisition or Significant Asset Sale, and any other Permitted Acquisitions and Significant Asset Sales that have been consummated during the period, had been consummated on the first day of such period.

SECTION 1.04. Classification of Loans and Borrowings. For purposes of this Agreement, Loans and Borrowings may be classified and referred to by Type (e.g., a “Eurocurrency Loan” or a “Eurocurrency Borrowing”).

ARTICLE II

The Credits

SECTION 2.01. Commitments. Subject to the terms and conditions and relying upon the representations and warranties herein set forth, each Lender agrees, severally and not jointly, (i) to make a Loan to the Borrower on the Closing Date in a principal amount not to exceed its Commitment and (ii) to make non-cash Loans to the Borrower pursuant to the terms of Section 2.06(a) as a result of the imposition of PIK Increase. Amounts paid or prepaid in respect of Loans may not be reborrowed.

SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their Commitments; provided, however, that the failure of any Lender to make any Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to make any Loan required to be made by such other Lender). The Loans comprising any Borrowing shall be in an aggregate principal amount that is (i) an integral multiple of $100,000 and not less than $500,000 or (ii) equal to the remaining available balance of the Commitments.

(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement. Borrowings of more than one Type may be outstanding at the same time; provided, however, that the Borrower shall not be entitled to request any Borrowing that, if made, would result in more than four Eurodollar Borrowings outstanding hereunder at any time. For purposes of the foregoing, Borrowings having different Interest Periods, regardless of whether they commence on the same date, shall be considered separate Borrowings.

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(c) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds to such account in New York City as the Administrative Agent may designate not later than 1:00 p.m., New York City time, and the Administrative Agent shall promptly credit the amounts so received to an account designated by the Borrower in the applicable Borrowing Request or, if a Borrowing shall not occur on such date because any condition precedent herein specified shall not have been met, return the amounts so received to the respective Lenders.

(d) Unless the Administrative Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s portion of such Borrowing, the Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on the date of such Borrowing in accordance with paragraph (c) above and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If the Administrative Agent shall have so made funds available then, to the extent that such Lender shall not have made such portion available to the Administrative Agent, such Lender and the Borrower severally agree to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower to but excluding the date such amount is repaid to the Administrative Agent at (i) in the case of the Borrower, a rate per annum equal to the interest rate applicable at the time to the Loans comprising such Borrowing and (ii) in the case of such Lender, a rate determined by the Administrative Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error). If such Lender shall repay to the Administrative Agent such corresponding amount, such amount shall constitute such Lender’s Loan as part of such Borrowing for purposes of this Agreement, and the Borrower’s obligation to repay the Administrative Agent such corresponding amount pursuant to this Section 2.02(d) shall cease.

SECTION 2.03. Borrowing Procedure. In order to request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 12:00 noon, New York City time, three Business Days before a proposed Borrowing, and (b) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before a proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable, and shall be confirmed promptly by hand delivery or fax to the Administrative Agent of a written Borrowing Request and shall specify the following information: (i) whether such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which shall be a Business Day); (iii) the number and location of the account to which funds are to be disbursed; (iv) the amount of such Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect thereto; provided, however, that, notwithstanding any contrary specification in any Borrowing Request, each requested Borrowing shall comply with the requirements set forth in Section 2.02. If no election as to the Type of Borrowing is specified in any such notice, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period with

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respect to any Eurodollar Borrowing is specified in any such notice, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. The Administrative Agent shall promptly advise the applicable Lenders of any notice given pursuant to this Section 2.03 (and the contents thereof), and of each Lender’s portion of the requested Borrowing.

SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the principal amount of each Loan of such Lender, together with all accrued and unpaid interest therein, on the Maturity Date.

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

(c) The Administrative Agent shall maintain accounts in which it will record (i) the amount of each Loan made hereunder, the Type thereof and, if applicable, the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from the Borrower or any Guarantor and each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to paragraphs (b) and (c) above shall be prima facie evidence of the existence and amounts of the obligations therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrower to repay the Loans in accordance with their terms.

(e) Any Lender may request that Loans made by it hereunder be evidenced by a promissory note. In such event, the Borrower shall execute and deliver to such Lender a promissory note payable to such Lender and its registered assigns and in a form and substance reasonably acceptable to the Administrative Agent and the Borrower. Notwithstanding any other provision of this Agreement, in the event any Lender shall request and receive such a promissory note, the interests represented by such note shall at all times (including after any assignment of all or part of such interests pursuant to Section 9.04) be represented by one or more promissory notes payable to the payee named therein or its registered assigns.

SECTION 2.05. Fees. The Borrower agrees to pay to the Administrative Agent, for its own account, in immediately available funds, the administrative fees set forth in the Fee Letter at the times and in the amounts specified therein (the “Administrative Agent Fees”).

SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section 2.07, the Loans comprising each ABR Borrowing shall bear interest (computed

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on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be, when the Alternate Base Rate is determined by reference to the Prime Rate and over a year of 360 days at all other times and calculated from and including the date of such Borrowing to but excluding the date of repayment thereof) at a rate per annum equal to the Alternate Base Rate plus the Applicable Percentage in effect from time to time.

(b) Subject to the provisions of Section 2.07, the Loans comprising each Eurodollar Borrowing shall bear interest (computed on the basis of the actual number of days elapsed over a year of 360 days) at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Percentage in effect from time to time.

(c) Interest on each Loan shall be payable on the Interest Payment Dates applicable to such Loan except as otherwise provided in this Agreement. The applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or day within an Interest Period, as the case may be, shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. Interest shall be payable in cash, except that interest constituting the PIK Portion for any PIK Interest Period shall instead be payable on the last day of such Interest Period by increasing the outstanding principal amount of the Loans of each Lender by such Lender’s ratable share of the aggregate amount of such PIK Portion (the “PIK Increase”). The Administrative Agent shall determine the amount of the PIK Increase, and such determination shall be conclusive absent manifest error.

SECTION 2.07. Default Interest. If the Borrower shall default in the payment of any principal of or interest on any Loan or any other amount due hereunder, by acceleration or otherwise, or under any other Loan Document, then, until such defaulted amount shall have been paid in full, to the extent permitted by law, all amounts outstanding under this Agreement and the other Loan Documents shall bear interest (after as well as before judgment), payable on demand in cash, (a) in the case of principal, at the rate otherwise applicable to such Loan pursuant to Section 2.06 plus 2.00% per annum and (b) in all other cases, at a rate per annum (computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be, when determined by reference to the Prime Rate and over a year of 360 days at all other times) equal to the rate that would be applicable to an ABR Loan plus 2.00% per annum.

SECTION 2.08. Alternate Rate of Interest. In the event, and on each occasion, that on the day two Business Days prior to the commencement of any Interest Period for a Eurodollar Borrowing the Administrative Agent shall have determined that dollar deposits in the principal amounts of the Loans comprising such Borrowing are not generally available in the London interbank market, or that the rates at which such dollar deposits are being offered will not adequately and fairly reflect the cost to any Lender of making or maintaining its Eurodollar Loan during such Interest Period, or that reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the Administrative Agent shall, as soon as practicable thereafter, give written or fax notice of such determination to the Borrower and the Lenders. In the event of any such determination, until the

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Administrative Agent shall have advised the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, any request by the Borrower for a Eurodollar Borrowing pursuant to Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing. Each determination by the Administrative Agent under this Section 2.08 shall be conclusive absent manifest error.

SECTION 2.09. Termination and Reduction of Commitments. (a) The Commitments shall automatically terminate upon the making of the Loans on the Closing Date. Notwithstanding the foregoing, all the Commitments shall automatically terminate at 5:00 p.m., New York City time, on August 31, 2007, if the initial Credit Event shall not have occurred by such time.

(b) Upon at least three Business Days’ prior irrevocable written or fax notice to the Administrative Agent, the Borrower may at any time in whole permanently terminate, or from time to time in part permanently reduce, the Commitments; provided, however, that each partial reduction of the Commitments shall be in an integral multiple of $500,000.

(c) Each reduction in the Commitments hereunder shall be made ratably among the Lenders in accordance with their respective Commitments.

SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower shall have the right at any time upon prior irrevocable notice to the Administrative Agent (a) not later than 12:00 (noon), New York City time, one Business Day prior to conversion, to convert any Eurodollar Borrowing into an ABR Borrowing, (b) not later than 12:00 (noon), New York City time, three Business Days prior to conversion or continuation, to convert any ABR Borrowing into a Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar Borrowing for an additional Interest Period, and (c) not later than 12:00 (noon), New York City time, three Business Days prior to conversion, to convert the Interest Period with respect to any Eurodollar Borrowing to another permissible Interest Period, subject in each case to the following:

(i) each conversion or continuation shall be made pro rata among the Lenders in accordance with the respective principal amounts of the Loans comprising the converted or continued Borrowing;

(ii) if less than all the outstanding principal amount of any Borrowing shall be converted or continued, then each resulting Borrowing shall satisfy the limitations specified in Sections 2.02(a) and 2.02(b) regarding the principal amount and maximum number of Borrowings of the relevant Type;

(iii) each conversion shall be effected by each Lender and the Administrative Agent by recording for the account of such Lender the new Loan of such Lender resulting from such conversion and reducing the Loan (or portion thereof) of such Lender being converted by an equivalent principal amount; accrued interest on any Eurodollar Loan (or portion thereof) being converted shall be paid by the Borrower at the time of conversion;

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(iv) if any Eurodollar Borrowing is converted at a time other than the end of the Interest Period applicable thereto, the Borrower shall pay, upon demand, any amounts due to the Lenders pursuant to Section 2.16;

(v) any portion of a Borrowing maturing or required to be repaid in less than one month may not be converted into or continued as a Eurodollar Borrowing;

(vi) any portion of a Eurodollar Borrowing that cannot be converted into or continued as a Eurodollar Borrowing by reason of the immediately preceding clause shall be automatically converted at the end of the Interest Period in effect for such Borrowing into an ABR Borrowing;

(vii) no Interest Period may be selected for any Eurodollar Borrowing that would end later than the Maturity Date; and

(viii) upon notice to the Borrower from the Administrative Agent given at the request of the Required Lenders, after the occurrence and during the continuance of a Default or Event of Default, no outstanding Loan may be converted into, or continued as, a Eurodollar Loan.

Each notice pursuant to this Section 2.10 shall be irrevocable and shall refer to this Agreement and specify (i) the identity and amount of the Borrowing that the Borrower requests be converted or continued, (ii) whether such Borrowing is to be converted to or continued as a Eurodollar Borrowing or an ABR Borrowing, (iii) if such notice requests a conversion, the date of such conversion (which shall be a Business Day) and (iv) if such Borrowing is to be converted to or continued as a Eurodollar Borrowing, the Interest Period with respect thereto. If no Interest Period is specified in any such notice with respect to any conversion to or continuation as a Eurodollar Borrowing, the Borrower shall be deemed to have selected an Interest Period of one month’s duration. The Administrative Agent shall advise the Lenders of any notice given pursuant to this Section 2.10 and of each Lender’s portion of any converted or continued Borrowing. If the Borrower shall not have given notice in accordance with this Section 2.10 to continue any Borrowing into a subsequent Interest Period (and shall not otherwise have given notice in accordance with this Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the Interest Period applicable thereto (unless repaid pursuant to the terms hereof), automatically be continued into an ABR Borrowing.

SECTION 2.11. [Intentionally Omitted].

SECTION 2.12. Optional Prepayment. (a) Subject to payment of any applicable premium as set forth in paragraph (b) below, the Borrower shall have the right at any time and from time to time to prepay any Borrowing, in whole or in part, upon at least three Business Days’ prior written or fax notice (or telephone notice promptly confirmed by written or fax notice) in the case of Eurodollar Loans, or written or fax notice (or telephone notice promptly confirmed by written or fax notice) on the Business Day of prepayment in the case of ABR Loans, to the Administrative Agent before 12:00 (noon),

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New York City time; provided, however, that each partial prepayment of a Borrowing shall be in an amount that is an integral multiple of $500,000 and not less than $1,000,000.

(b) Each prepayment of Loans made pursuant to Section 2.12(a) shall be made together with a prepayment premium in an amount equal to (i) if such prepayment is made prior to the first anniversary of the Closing Date, 2.00%, and (ii) if such prepayment is made on or after the first anniversary of the Closing Date but prior to the second anniversary of the Closing Date, 1.00%, in each case of the aggregate principal amount of Loans being prepaid.

(c) Each notice of prepayment shall specify the prepayment date and the principal amount of each Borrowing (or portion thereof) to be prepaid, shall be irrevocable unless conditioned upon a refinancing and shall commit the Borrower to prepay such Borrowing by the amount stated therein on the date stated therein. All prepayments under this Section 2.12 shall be subject to paragraph (b) above (if applicable) and to Section 2.16 but otherwise without premium or penalty. All prepayments under this Section 2.12 shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of payment.

SECTION 2.13. Mandatory Prepayments. (a) Not later than the fifth Business Day following the receipt of Net Cash Proceeds in respect of any Asset Sale, the Borrower shall apply 100% of the Net Cash Proceeds received with respect thereto to prepay outstanding Loans in accordance with Section 2.13(f).

(b) Commencing with the fiscal year ending on December 31, 2008, no later than the earlier of (i) 100 days after the end of each fiscal year of the Borrower and (ii) 10 days following the date on which the financial statements with respect to such period are delivered pursuant to Section 5.04(a), the Borrower shall prepay outstanding Loans in accordance with Section 2.13(f) in an aggregate principal amount equal to (x) 50% of Excess Cash Flow for the fiscal year then ended minus (y) voluntary prepayments of Loans pursuant to Section 2.12 and voluntary prepayments of term loans under the First Lien Credit Agreement to the extent such prepayments reduce the scheduled installments of principal due in respect thereto, in each case, made during such fiscal year (provided that such percentage shall be reduced to 25% if the Leverage Ratio at the end of such fiscal year was less than 2.75 to 1.0).

(c) In the event that any Loan Party or any subsidiary of a Loan Party shall receive Net Cash Proceeds from the issuance or incurrence of Indebtedness for money borrowed of any Loan Party or any subsidiary of a Loan Party (other than any cash proceeds from the issuance of Indebtedness for money borrowed permitted pursuant to Section 6.01), the Borrower shall, not later than the fifth Business Day following the receipt of such Net Cash Proceeds by such Loan Party or such subsidiary, apply an amount equal to 100% of such Net Cash Proceeds to prepay outstanding Loans in accordance with Section 2.13(f).

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(d) So long as any Loans are outstanding, mandatory prepayments of outstanding Loans under this Agreement shall be allocated ratably among the Lenders that accept the same. Any Lender may elect, by notice to the Administrative Agent at or prior to the time and in the manner specified by the Administrative Agent, prior to any prepayment of Loans required to be made by the Borrower pursuant to this Section, to decline all (but not a portion) of its pro rata share of such prepayment (such declined amounts, the “Declined Proceeds”). Any Declined Proceeds shall be offered to the Lenders not so declining such prepayment (with such Lenders having the right to decline any prepayment with Declined Proceeds at the time and in the manner specified by the Administrative Agent). Any remaining Declined Proceeds (and, after the repayment in full of all outstanding Loans, any other amounts referred to in paragraph (a), (b) or (c) above that is required to be used to prepay Loans hereunder) shall be used as determined by the Borrower.

(e) If no Lenders exercise the right to waive a given mandatory prepayment of the Loans pursuant to Section 2.13(d), then, with respect to such mandatory prepayment, the amount of such mandatory prepayment shall be applied first to Loans that are ABR Loans to the full extent thereof before application to Loans that are Eurodollar Loans in a manner that minimizes the amount of any payments required to be made by the Borrower pursuant to Section 2.16; provided, however, that, if at the time of any prepayment pursuant to this Section 2.13 there shall be Borrowings of different Types or Eurodollar Borrowings with different Interest Periods, and if some but not all Lenders shall have accepted such mandatory prepayment, then the aggregate amount of such mandatory prepayment shall be allocated ratably to each outstanding Borrowing of the accepting Lenders.

(f) The Borrower shall deliver to the Administrative Agent, at the time of each prepayment required under this Section 2.13, (i) a certificate signed by a Financial Officer of the Borrower setting forth in reasonable detail the calculation of the amount of such prepayment and (ii) to the extent practicable, at least three days prior written notice of such prepayment. Each notice of prepayment shall specify the prepayment date, the Type of each Loan being prepaid and the principal amount of each Loan (or portion thereof) to be prepaid. All prepayments of Borrowings under this Section 2.13 shall be subject to Section 2.16, but shall otherwise be without premium or penalty, and shall be accompanied by accrued and unpaid interest on the principal amount to be prepaid to but excluding the date of payment.

(g) Notwithstanding the foregoing, no mandatory prepayments of outstanding Loans that would otherwise be required under this Section 2.13 shall be required to be made at any time when any loans remain outstanding under the First Lien Credit Agreement, except with respect to the portion (if any) of the proceeds of the event giving rise to such mandatory prepayment as shall have been rejected by the lenders under the First Lien Credit Agreement, in accordance with and as required by Section 2.13(e) of the First Lien Credit Agreement.

(h) The Borrower shall notify the Administrative Agent of the occurrence of a Change in Control within one Business Day thereof, and the Administrative Agent shall

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promptly thereafter notify the Lenders (with a copy to the Borrower) thereof. At any time prior to the 30^th day following delivery of the notice by the Administrative Agent pursuant to the preceding sentence (the “Put Date”), each Lender shall have the right, by notice to the Borrower and the Administrative Agent, to require the Borrower, three Business Days after the Put Date, to prepay in full (but not in part) the outstanding principal amount of such Lender’s Loans at a purchase price equal to the higher of 101% or, if the Put Date occurs prior to the first anniversary of the Closing Date, 102%, of the principal amount thereof, together with accrued and unpaid interest on the principal amount thereof to but excluding the date of payment, and all other amounts then due to such Lender (including amounts payable under Section 2.16) under the Loan Documents.

SECTION 2.14. Reserve Requirements; Change in Circumstances. (a) Notwithstanding any other provision of this Agreement, if any Change in Law shall impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of or credit extended by any Lender (except any such reserve requirement which is reflected in the Adjusted LIBO Rate) or shall impose on such Lender or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender, and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise) by an amount deemed by such Lender to be material, then the Borrower will pay to such Lender, as the case may be, upon demand such additional amount or amounts as will compensate such Lender, as the case may be, for such additional costs incurred or reduction suffered.

(b) If any Lender shall have determined that any Change in Law regarding capital adequacy has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made pursuant hereto to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as applicable, as specified in paragraph (a) or (b) above shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate delivered by it within 10 days after its receipt of the same.

(d) Failure or delay on the part of any Lender to demand compensation for any increased costs or reduction in amounts received or receivable or reduction in return on capital shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be under any obligation to compensate any Lender under paragraph (a) or (b) above with respect to increased costs or reductions with

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respect to any period prior to the date that is 120 days prior to such request if such Lender knew or could reasonably have been expected to know of the circumstances giving rise to such increased costs or reductions and of the fact that such circumstances would result in a claim for increased compensation by reason of such increased costs or reductions; provided further that the foregoing limitation shall not apply to any increased costs or reductions arising out of the retroactive application of any Change in Law within such 120-day period. The protection of this Section shall be available to each Lender regardless of any possible contention of the invalidity or inapplicability of the Change in Law that shall have occurred or been imposed.

SECTION 2.15. Change in Legality. (a) Notwithstanding any other provision of this Agreement, if any Change in Law shall make it unlawful for any Lender to or maintain any Eurodollar Loan or to give effect to its obligations as contemplated hereby with respect to any Eurodollar Loan, then, by written notice to the Borrower and to the Administrative Agent:

(i) such Lender may declare that Eurodollar Loans will not thereafter (for the duration of such unlawfulness) be continued for additional Interest Periods and ABR Loans will not thereafter (for such duration) be converted into Eurodollar Loans, whereupon any request to convert an ABR Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing for an additional Interest Period shall, as to such Lender only, be deemed a request for an ABR Loan (or a request to continue an ABR Loan as such for an additional Interest Period or to convert a Eurodollar Loan into an ABR Loan, as the case may be), unless such declaration shall be subsequently withdrawn; and

(ii) such Lender may require that all outstanding Eurodollar Loans made by it be converted to ABR Loans, in which event all such Eurodollar Loans shall be automatically converted to ABR Loans as of the effective date of such notice as provided in paragraph (b) below.

In the event any Lender shall exercise its rights under (i) or (ii) above, all payments and prepayments of principal that would otherwise have been applied to repay the Eurodollar Loans that would have been made by such Lender or the converted Eurodollar Loans of such Lender shall instead be applied to repay the ABR Loans made by such Lender in lieu of, or resulting from the conversion of, such Eurodollar Loans.

(b) For purposes of this Section 2.15, a notice to the Borrower by any Lender shall be effective as to each Eurodollar Loan made by such Lender, if lawful, on the last day of the Interest Period then applicable to such Eurodollar Loan; in all other cases such notice shall be effective on the date of receipt by the Borrower.

SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender against any loss or expense that such Lender may sustain or incur as a consequence of (a) any event, other than a default by such Lender in the performance of its obligations hereunder, which results in (i) such Lender receiving or being deemed to receive any amount on account of the principal of any Eurodollar Loan prior to the end of the Interest

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Period in effect therefor, (ii) the conversion of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period with respect to any Eurodollar Loan, in each case other than on the last day of the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be made by such Lender (including any Eurodollar Loan to be made pursuant to a conversion or continuation under Section 2.10) not being made after notice of such Loan shall have been given by the Borrower hereunder (any of the events referred to in this clause (a) being called a “Breakage Event”) or (b) any default in the making of any payment or prepayment required to be made hereunder. In the case of any Breakage Event, such loss shall include an amount equal to the excess, as reasonably determined by such Lender, of (i) its cost of obtaining funds for the Eurodollar Loan that is the subject of such Breakage Event for the period from the date of such Breakage Event to the last day of the Interest Period in effect (or that would have been in effect) for such Loan over (ii) the amount of interest likely to be realized by such Lender in redeploying the funds released or not utilized by reason of such Breakage Event for such period. A certificate of any Lender setting forth any amount or amounts which such Lender is entitled to receive pursuant to this Section 2.16 shall be delivered to the Borrower and shall be conclusive absent manifest error.

SECTION 2.17. Pro Rata Treatment. Except as required under Section 2.13(d) or (h) or 2.15, each Borrowing, each payment or prepayment of principal of any Borrowing, each payment of interest on the Loans, each payment of any prepayment fee, each reduction of the Commitments and each conversion of any Borrowing to or continuation of any Borrowing as a Borrowing of any Type shall be allocated pro rata among the Lenders in accordance with their respective Commitments (or, if such Commitments shall have expired or been terminated, in accordance with the respective principal amounts of their outstanding Loans). Each Lender agrees that in computing such Lender’s portion of any Borrowing to be made hereunder, the Administrative Agent may, in its discretion, round each Lender’s percentage of such Borrowing to the next higher or lower whole dollar amount.

SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall, through the exercise of a right of banker’s lien, setoff or counterclaim against the Borrower or any other Loan Party, or pursuant to a secured claim under Section 506 of Title 11 of the United States Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, obtain payment (voluntary or involuntary) in respect of any Loan or Loans as a result of which the unpaid principal portion of its Loans shall be proportionately less than the unpaid principal portion of the Loans of any other Lender, it shall be deemed simultaneously to have purchased from such other Lender at face value, and shall promptly pay to such other Lender the purchase price for, a participation in the Loans of such other Lender, so that the aggregate unpaid principal amount of the Loans and participations in Loans held by each Lender shall be in the same proportion to the aggregate unpaid principal amount of all Loans then outstanding as the principal amount of its Loans prior to such exercise of banker’s lien, setoff or counterclaim or other event was to the principal amount of all Loans outstanding prior to such exercise of banker’s lien, setoff or counterclaim or other event; provided, however, that if any such purchase or purchases or adjustments shall be made pursuant to

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this Section 2.18 and the payment giving rise thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be rescinded to the extent of such recovery and the purchase price or prices or adjustment restored without interest. The Borrower and Holdings expressly consent to the foregoing arrangements and agree that any Lender holding a participation in a Loan deemed to have been so purchased may exercise any and all rights of banker’s lien, setoff or counterclaim with respect to any and all moneys owing by the Borrower and Holdings to such Lender by reason thereof as fully as if such Lender had made a Loan directly to the Borrower in the amount of such participation.

SECTION 2.19. Payments. (a) The Borrower shall make each payment (including principal of or interest on any Borrowing or any fees or other amounts) hereunder and under any other Loan Document not later than 12:00 (noon), New York City time, on the date when due in immediately available dollars, without setoff, defense or counterclaim. Each such payment shall be made to the Administrative Agent at its offices at Eleven Madison Avenue, New York, NY 10010. The Administrative Agent shall promptly distribute to each Lender any payments received by the Administrative Agent on behalf of such Lender.

(b) Except as otherwise expressly provided herein, whenever any payment (including principal of or interest on any Borrowing or any fees or other amounts) hereunder or under any other Loan Document shall become due, or otherwise would occur, on a day that is not a Business Day, such payment may be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees, if applicable.

(c) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower does not in fact make such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, and to pay interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at a rate determined by the Administrative Agent to represent its cost of overnight or short-term funds (which determination shall be conclusive absent manifest error).

SECTION 2.20. Taxes. (a) Any and all payments by or on account of any obligation of the Borrower or any other Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that, if the Borrower or any other Loan Party shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the

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Borrower or such Loan Party shall make such deductions and (iii) the Borrower or such Loan Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify the Administrative Agent and each Lender, within 10 days after written demand therefor specifying in reasonable detail the nature and amount of Indemnified Taxes or Other Taxes, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower or any other Loan Party hereunder or under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender, or by the Administrative Agent on behalf of itself or a Lender, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower or any other Loan Party to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Each Foreign Lender hereby agrees that it shall, no later than July 31, 2007 or, in the case of a Lender that becomes a party hereto pursuant to an Assignment and Acceptance after July 31, 2007, within 10 days after such Foreign Lender becomes a party hereto, or, in the case where a Foreign Lender changes its applicable lending office by designating a different lending office (a “New Lending Office”), within 10 days after such Lender designates the New Lending Office, and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally able to do so, deliver to the Borrower and the Administrative Agent either (i) two accurate, complete and signed copies of either (x) U.S. Internal Revenue Service Form W-8ECI or successor form, or (y) U.S. Internal Revenue Service Form W-8BEN or successor form, in each case, indicating that such Foreign Lender is on the date of delivery thereof entitled to receive payments of interest hereunder free from, or subject to a reduced rate of, withholding of United States Federal income tax or (ii) in the case of such a Lender that is entitled to claim exemption from withholding of United States Federal income tax under Section 871(h) or Section 881(c) of the Code, (x) a certificate to the effect that such Lender is (A) not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) not a “10 percent shareholder” within the meaning of Section 881(c)(3)(B) of the Code and (C) not a controlled foreign corporation described in Section 881(c)(3)(C) of the Code and (y) two accurate, complete and signed

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copies of U.S. Internal Revenue Service Form W-8BEN or successor form. In addition, each Foreign Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Foreign Lender and shall deliver such forms within 20 days after receipt of a written request therefor from the Borrower or the Administrative Agent.

(f) Each Lender and Administrative Agent that is a U.S. person as that term is defined in Section 7701(a)(30) of the Code, other than a Lender or Administrative Agent that may be treated as an exempt recipient based on the indicators described in Treasury Regulation Section 1.6049-4(c)(1)(ii), hereby agrees that it shall, no later than July 31, 2007 or, in the case of a Lender that becomes a party hereto pursuant to an Assignment and Acceptance after July 31, 2007, within 10 days after such Lender becomes a party hereto, deliver to the Administrative Agent two accurate, complete and signed copies of U.S. Internal Revenue Service Form W-9 or successor form, certifying that such Lender or Administrative Agent, as the case may be, is on the date of delivery thereof entitled to an exemption from United States backup withholding tax. Unless the Administrative Agent has received such forms or other documents required by this Section 2.20(f), the Borrower or the Administrative Agent, as applicable, shall withhold amounts as required by applicable requirements of law from such payments at the applicable statutory rate.

(g) If a Lender determines that it has received a refund in respect of any Indemnified Taxes or Other Taxes with respect to which the Borrower has paid additional amounts pursuant to Section 2.20(a) or made an indemnity payment, pursuant to this Section 2.20(c), it shall within 30 days from the date of such receipt pay over such refund to the Borrower, net of all out-of-pocket expenses of such Lender; provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other person.

SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty to Mitigate. (a) In the event (i) any Lender delivers a certificate requesting compensation pursuant to Section 2.14, (ii) any Lender delivers a notice described in Section 2.15, (iii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority on account of any Lender pursuant to Section 2.20, or (iv) any Lender refuses to consent to any amendment, waiver or other modification of any Loan Document requested by the Borrower that requires the consent of a greater percentage of the Lenders than the Required Lenders and such amendment, waiver or other modification is consented to by the Required Lenders, the Borrower may, at its sole expense and effort (including with respect to the processing and recordation fee referred to in Section 9.04(b)), upon notice to such Lender and the Administrative Agent, require such Lender to transfer and assign, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all of its interests, rights and obligations under

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this Agreement to an Eligible Assignee that shall assume such assigned obligations and, with respect to clause (iv) above, shall consent to such requested amendment, waiver or other modification of any Loan Document (which Eligible Assignee may be another Lender, if a Lender accepts such assignment); provided that (x) such assignment shall not conflict with any law, rule or regulation or order of any court or other Governmental Authority having jurisdiction, (y) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld or delayed, and (z) the Borrower or such Eligible Assignee shall have paid to the affected Lender in immediately available funds an amount equal to the sum of the principal of and interest accrued to the date of such payment on the outstanding Loans of such Lender plus all other amounts accrued for the account of such Lender hereunder with respect thereto (including any amounts under Sections 2.14 and 2.16 and, if applicable, the prepayment fee pursuant to Section 2.12(b) (with such assignment being deemed to be an optional prepayment for purposes of determining the applicability of Section 2.12(b)), such amount to be payable by the Borrower); provided further that, if prior to any such transfer and assignment the circumstances or event that resulted in such Lender’s claim for compensation under Section 2.14, notice under Section 2.15 or the amounts paid pursuant to Section 2.20, as the case may be, cease to cause such Lender to suffer increased costs or reductions in amounts received or receivable or reduction in return on capital, or cease to have the consequences specified in Section 2.15, or cease to result in amounts being payable under Section 2.20, as the case may be (including as a result of any action taken by such Lender pursuant to paragraph (b) below), or if such Lender shall waive its right to claim further compensation under Section 2.14 in respect of such circumstances or event or shall withdraw its notice under Section 2.15 or shall waive its right to further payments under Section 2.20 in respect of such circumstances or event or shall consent to the proposed amendment, waiver, consent or other modification, as the case may be, then such Lender shall not thereafter be required to make any such transfer and assignment hereunder. Each Lender hereby grants to the Administrative Agent an irrevocable power of attorney (which power is coupled with an interest) to execute and deliver, on behalf of such Lender as assignor, any Assignment and Acceptance necessary to effectuate any assignment of such Lender’s interests hereunder in the circumstances contemplated by this Section 2.21(a).

(b) If (i) any Lender shall request compensation under Section 2.14, (ii) any Lender delivers a notice described in Section 2.15 or (iii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority on account of any Lender, pursuant to Section 2.20, then such Lender shall use reasonable efforts (which shall not require such Lender to incur an unreimbursed loss or unreimbursed cost or expense or otherwise take any action inconsistent with its internal policies or legal or regulatory restrictions or suffer any disadvantage or burden deemed by it to be significant) (x) to file any certificate or document reasonably requested in writing by the Borrower or (y) to assign its rights and delegate and transfer its obligations hereunder to another of its offices, branches or affiliates, if such filing or assignment would reduce its claims for compensation under Section 2.14 or enable it to withdraw its notice pursuant to Section 2.15 or would reduce amounts payable pursuant to Section 2.20, as the case may be, in the future. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such filing or assignment, delegation and transfer.

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ARTICLE III

Representations and Warranties

Each of Holdings and the Borrower represents and warrants to the Administrative Agent, the Collateral Agent, and each of the Lenders that:

SECTION 3.01. Organization; Powers. Holdings, the Borrower and each of the Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has all requisite power and authority to own its property and assets and to carry on its business as now conducted and as proposed to be conducted, (c) is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required, except where the failure so to qualify could not reasonably be expected to result in a Material Adverse Effect, and (d) has the power and authority to execute, deliver and perform its obligations under each of the Loan Documents and each other agreement or instrument contemplated thereby to which it is or will be a party and, in the case of the Borrower, to borrow hereunder.

SECTION 3.02. Authorization. The Transactions (a) have been duly authorized by all requisite corporate and, if required, stockholder action and (b) will not (i) violate (A) any provision of law, statute, rule or regulation, or of the certificate or articles of incorporation or other constitutive documents or by-laws of Holdings, the Borrower or any Subsidiary or (B) any order of any Governmental Authority except to the extent such violation could not reasonably be expected to have a Material Adverse Effect, (ii) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under, or give rise to any right to accelerate or to require the prepayment, repurchase or redemption of any obligation under any indenture, agreement or other instrument to which Holdings, the Borrower or any Subsidiary is a party, except to the extent such conflict, breach, default or other violation could not reasonably be expected to have a Material Adverse Effect or (iii) result in the creation or imposition of any Lien upon or with respect to any property or assets now owned or hereafter acquired by Holdings, the Borrower or any Subsidiary (other than the First Priority Liens or any Lien created hereunder or under the Security Documents).

SECTION 3.03. Enforceability. This Agreement has been duly executed and delivered by Holdings and the Borrower and constitutes, and each other Loan Document when executed and delivered by each Loan Party party thereto will constitute, a legal, valid and binding obligation of such Loan Party enforceable against such Loan Party in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

SECTION 3.04. Governmental Approvals. No action, consent or approval of, registration or filing with or any other action by any Governmental Authority is or will be

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required in connection with the Transactions, except for (a) filings and recordings with respect to the Collateral to be made, or otherwise delivered to Collateral Agent for filing and/or recordation, as of the Closing Date (including the filing of Uniform Commercial Code financing statements, filings with the United States Patent and Trademark Office and the United States Copyright Office, and recordation of the Mortgages, (b) such as have been made or obtained and are in full force and effect and (c) authorizations, approvals, actions, notices and filings identified on Schedule 3.04 or which would not have a Material Adverse Effect if not made or obtained.

SECTION 3.05. Financial Statements. (a) Holdings has heretofore furnished to the Administrative Agent its consolidated balance sheets and related statements of income, stockholder’s equity and cash flows (i) as of and for the fiscal year ended December 31, 2006, audited by and accompanied by the opinion of BDO Seidman, LLP, independent public accountants, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended March 31, 2007, certified by its chief financial officer. Such financial statements present fairly the financial condition and results of operations and cash flows of Holdings and its consolidated Subsidiaries as of such dates and for such periods. Such balance sheets and the notes thereto disclose all material liabilities, direct or contingent, of the Borrower and its consolidated Subsidiaries as of the dates thereof. Such financial statements were prepared in accordance with GAAP applied on a consistent basis, subject, in the case of unaudited financial statements, to year-end audit adjustments and the absence of footnotes.

(b) Holdings has heretofore delivered to the Administrative Agent its unaudited pro forma consolidated balance sheet and related pro forma statements of income, stockholder’s equity and cash flows as of March 31, 2007, prepared giving effect to the Transactions as if they had occurred, with respect to such balance sheet, on such date and, with respect to such other financial statements, on the first day of the 12-month period ending on such date. Such pro forma financial statements have been prepared in good faith by the Borrower, based on the assumptions stated therein (which assumptions are believed by the Borrower on the date hereof and on the Closing Date to be reasonable), are based on the best information available to the Borrower as of the date of delivery thereof, accurately reflect all adjustments required to be made to give effect to the Transactions and present fairly in all material respects on a pro forma basis the estimated consolidated financial position of the Borrower and its consolidated Subsidiaries as of such date and for such period, assuming that the Transactions had actually occurred at such date or at the beginning of such period, as the case may be.

SECTION 3.06. No Material Adverse Change. Except for any Disclosed Matter, no event, change or condition has occurred that has had, or would reasonably be expected to have, a material adverse effect on the business, assets, liabilities, operations, condition (financial or otherwise) or operating results of Holdings, the Borrower and the Subsidiaries, taken as a whole, since December 31, 2006. It is understood that downgrades or negative pronouncements by rating agencies and volatility in the capital markets generally shall not in and of themselves be considered material adverse changes, but that the antecedents or consequences thereof may constitute such changes (except to the extent the same constitute Disclosed Matters).

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SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of Holdings, the Borrower and the Subsidiaries has good and marketable title to, valid leasehold interests in, or valid licensed rights in, as the case may be, all its material properties and assets (including all Mortgaged Property), except (i) for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties and assets for their intended purposes or (ii) as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. All such material properties and assets are free and clear of Liens, other than Liens expressly permitted by Section 6.02.

(b) Each of Holdings, the Borrower and the Subsidiaries has complied in all material respects with all obligations under all material leases to which it is a party and all such leases are in full force and effect, and each of Holdings, the Borrower and the Subsidiaries enjoys peaceful and undisturbed possession under all such material leases, except, in each case, as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(c) As of the Closing Date, neither Holdings nor the Borrower has received any notice of, nor has any knowledge of, any pending or contemplated condemnation proceeding affecting the Mortgaged Properties or any sale or disposition thereof in lieu of condemnation.

(d) As of the Closing Date, none of Holdings, the Borrower or any of the Subsidiaries is obligated under any right of first refusal, option or other contractual right to sell, assign or otherwise dispose of any Mortgaged Property or any interest therein.

SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing Date a list of all Subsidiaries and the percentage ownership interest of Holdings and its Subsidiaries therein. The shares of capital stock or other ownership interests so indicated on Schedule 3.08 are fully paid and non-assessable and are owned by Holdings or the Borrower, directly or indirectly, free and clear of all Liens other than Liens expressly permitted by Section 6.02.

SECTION 3.09. Litigation; Compliance with Laws. (a) Except for the Disclosed Matters, there are no actions, suits or proceedings at law or in equity or by or before any Governmental Authority now pending or, to the knowledge of Holdings or the Borrower, threatened against or affecting Holdings or the Borrower or any Subsidiary or any business, property or rights of any such person as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

(b) None of Holdings, the Borrower or any of the Subsidiaries or any of their respective material properties or assets is in violation of, nor will the continued operation of their material properties and assets as currently conducted violate, any law, rule or regulation (including any zoning, building, ordinance, code or approval or any building permits) or any restrictions of record or agreements affecting the Mortgaged Property, or

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is in default with respect to any judgment, writ, injunction, decree or order of any Governmental Authority, in each case where such violation or default could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.10. Agreements. None of Holdings, the Borrower or any of the Subsidiaries is in default in any manner under any provision of any indenture or other agreement or instrument evidencing Indebtedness, or any other material agreement or instrument to which it is a party or by which it or any of its properties or assets are or may be bound, in each case where such default could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.11. Federal Reserve Regulations. (a) None of Holdings, the Borrower or any of the Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.

(b) No part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of, or that is inconsistent with, the provisions of the Regulations of the Board, including Regulation T, U or X.

SECTION 3.12. Investment Company Act. None of Holdings, the Borrower or any Subsidiary is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of the Loans only for the purposes specified in the introductory statement to this Agreement.

SECTION 3.14. Tax Returns. Except as set forth on Schedule 3.14, each of Holdings, the Borrower and the Subsidiaries has filed or caused to be filed all Federal tax returns, and all material state, local and foreign tax returns or materials required to have been filed by it and has paid or caused to be paid all taxes due and payable under such returns by it and all assessments received by it, except taxes that are being contested in good faith by appropriate proceedings and for which Holdings, the Borrower or such Subsidiary, as applicable, shall have set aside on its books adequate reserves in accordance with GAAP.

SECTION 3.15. No Material Misstatements. None of (a) the Confidential Information Memorandum or (b) any other written information, report, financial statement, exhibit or schedule furnished by or on behalf of Holdings or the Borrower to the Administrative Agent or any Lender in connection with the negotiation of any Loan Document or included therein or delivered pursuant thereto, taken as a whole, contained or contains any material misstatement of fact or omitted or omits to state any material fact (known to Holdings or Borrower, in the case of any document not furnished by it) necessary to make the statements therein, in the light of the circumstances under which they were or are made, not misleading; provided that to the extent any such written information, report, financial statement, exhibit or schedule was based upon or constitutes

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a forecast or projection, each of Holdings and the Borrower represents only that it acted in good faith and utilized reasonable assumptions and due care in the preparation of such written information, report, financial statement, exhibit or schedule (it being recognized by the Agents and Lenders that such forecasts or projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such forecasts or projections may differ materially and adversely from the forecasted or projected results).

SECTION 3.16. Employee Benefit Plans. Each of the Borrower and its ERISA Affiliates is in compliance in all material respects with the applicable provisions of ERISA and the Code and the regulations and published interpretations thereunder. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events, could reasonably be expected to result in material liability of the Borrower or any of its ERISA Affiliates. The present value of all benefit liabilities under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the last annual valuation date applicable thereto, exceed by more than $ 1,000,000 the fair market value of the assets of such Plan, and the present value of all benefit liabilities of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the last annual valuation dates applicable thereto, exceed by more than $ 1,000,000 the fair market value of the assets of all such underfunded Plans.

SECTION 3.17. Environmental Matters. (a) Except as set forth in Schedule 3.17 and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, none of Holdings, the Borrower or any of the Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

(b) Since the date of this Agreement, there has been no change in the status of the matters disclosed on Schedule 3.17 that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and correct description of all insurance maintained by the Borrower or by the Borrower for its Subsidiaries as of the date hereof and the Closing Date. As of each such date, such insurance is in full force and effect and all premiums have been duly paid. The Borrower and its Subsidiaries have insurance in such amounts and covering such risks and liabilities as are in accordance with normal industry practice.

SECTION 3.19. Security Documents. (a) The Guarantee and Collateral Agreement, upon execution and delivery thereof by the parties thereto, will create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral (as defined in the Guarantee and Collateral Agreement) and the proceeds thereof and (i) when the Pledged Collateral (as

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defined in the Guarantee and Collateral Agreement) is delivered to the collateral agent under the First Lien Credit Agreement (the “First Lien Collateral Agent”) (who will hold such Pledged Collateral as bailee for perfection for the Collateral Agent) or the Collateral Agent, and upon the First Lien Collateral Agent or the Collateral Agent taking possession or control of such Pledged Collateral with respect to which a security interest may be perfected by possession or control (which possession or control shall be given to the First Lien Collateral Agent or the Collateral Agent to the extent possession or control by the Collateral Agent is required by the Guarantee and Collateral Agreement and the Intercreditor Agreement), the Lien created under the Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Pledged Collateral, in each case prior and superior in right to any other person, other than with respect to Liens expressly permitted by Section 6.02, and (ii) when financing statements or other filings in appropriate form are filed in the offices specified on Schedule 3.19(a) (or, in the case of Collateral delivered after the date hereof in accordance with the provisions of Section 5.12, in the appropriate filing offices), the Lien created under the Guarantee and Collateral Agreement will constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral (other than such Collateral in which a security interest cannot be perfected under the Uniform Commercial Code as in effect at the relevant time in the relevant jurisdiction), in each case prior and superior in right to any other person, other than with respect to Liens expressly permitted by Section 6.02.

(b) Upon the recordation of the Guarantee and Collateral Agreement (or a short-form security agreement in form and substance reasonably satisfactory to the Borrower and the Collateral Agent) with the United States Patent and Trademark Office and the United States Copyright Office, together with the financing statements or such other filings in appropriate form filed in the offices specified on Schedule 3.19(a) (or, in the case of Collateral delivered after the date hereof in accordance with the provisions of Section 5.12, in the appropriate filing offices), the Lien created under the Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in Patents and Trademarks (as each term is defined in the Guarantee and Collateral Agreement) registered or applied for with the United States Patent and Trademark Office or Copyrights (as defined in such Guarantee and Collateral Agreement) registered or applied for with the United States Copyright Office, as the case may be, in each case prior and superior in right to any other person, other than with respect to Liens expressly permitted by Section 6.02 (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office may be necessary to perfect a Lien on registered or applied for Patents, Trademarks, or Copyrights, acquired by the Loan Parties after the date hereof).

(c) The Mortgages are effective to create in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the Loan Parties’ right, title and interest in and to the Mortgaged Property thereunder and the proceeds thereof, and when the Mortgages are filed in the offices specified on Schedule 3.19(c) (or, in the case of any Mortgage executed and delivered after the date hereof in accordance with the provisions of Section 5.12, when such Mortgage is filed in

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the offices specified in the local counsel opinion delivered with respect thereto), the Mortgages shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Mortgaged Property and the proceeds thereof, in each case prior and superior in right to any other person, other than with respect to the rights of persons pursuant to Liens expressly permitted by Section 6.02 or by such Mortgage.

SECTION 3.20. Location of Real Property and Leased Premises. (a) Schedule 3.20(a) lists completely and correctly as of the Closing Date all material real property owned by the Borrower and the Subsidiaries and the addresses thereof. As of the Closing Date, the Borrower and the Subsidiaries own in fee all the real property set forth on Schedule 3.20(a), except (i) for minor defects in title and other encumbrances that constitute Liens permitted by Section 6.02 that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and (ii) as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(b) Schedule 3.20(b) lists completely and correctly as of the Closing Date all material real property leased by the Borrower and the Subsidiaries and the addresses thereof. As of the Closing Date, the Borrower and the Subsidiaries have valid leases in all the real property set forth on Schedule 3.20(b), except (i) for minor defects in title and other encumbrances that constitute Liens permitted by Section 6.02 that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and (ii) as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

SECTION 3.21. Labor Matters. As of the date hereof and the Closing Date, there are no strikes, lockouts or slowdowns against Holdings, the Borrower or any Subsidiary pending or, to the knowledge of Holdings or the Borrower, threatened. The hours worked by and payments made to employees of Holdings, the Borrower and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters in any manner which could reasonably be expected to result in a Material Adverse Effect. All payments due from Holdings, the Borrower or any Subsidiary, or for which any claim may be made against Holdings, the Borrower or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of Holdings, the Borrower or such Subsidiary except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which Holdings, the Borrower or any Subsidiary is bound.

SECTION 3.22. Solvency. Immediately after the consummation of the Transactions to occur on the Closing Date and immediately following the making of each Loan and after giving effect to the application of the proceeds of each Loan on the Closing Date, (a) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair

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saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) each Loan Party will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Closing Date.

SECTION 3.23. Sanctioned Persons. None of Holdings, the Borrower or any Subsidiary nor, to the knowledge of the Borrower, any director, officer, agent, employee or Affiliate of Holdings, the Borrower or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Borrower will not directly or indirectly use the proceeds of the Loans or otherwise make available such proceeds to any person, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

ARTICLE IV

Conditions of Lending

The obligations of the Lenders to make Loans hereunder are subject to the satisfaction of the following conditions:

SECTION 4.01. All Credit Events. On the date of each Borrowing (other than a conversion or a continuation of a Borrowing) (each such event being called a “Credit Event”):

(a) The Administrative Agent shall have received a notice of such Borrowing as required by Section 2.03 (or such notice shall have been deemed given in accordance with Section 2.02).

(b) The representations and warranties set forth in Article III and in each other Loan Document shall be true and correct in all material respects on and as of the date of such Credit Event with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date.

(c) At the time of and immediately after such Credit Event, no Default or Event of Default shall have occurred and be continuing.

Each Credit Event shall be deemed to constitute a representation and warranty by the Borrower and Holdings on the date of such Credit Event as to the matters specified in paragraphs (b) and (c) of this Section 4.01.

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SECTION 4.02. First Credit Event. On the Closing Date:

(a) The Administrative Agent shall have received, on behalf of itself and the Lenders, a favorable written opinion of (i) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for Holdings and the Borrower, substantially to the effect set forth in Exhibit G-1, and (ii) each local counsel listed on Schedule 4.02(a), substantially to the effect set forth in Exhibit G-2, in each case (A) dated the Closing Date, (B) addressed to the Administrative Agent and the Lenders, and (C) covering such other matters relating to the Loan Documents and the Transactions as the Administrative Agent shall reasonably request, and Holdings and the Borrower hereby request such counsel to deliver such opinions.

(b) All legal matters incident to this Agreement, the Borrowings hereunder and the other Loan Documents shall be satisfactory to the Lenders and to the Administrative Agent.

(c) The Administrative Agent shall have received (i) a copy of the certificate or articles of incorporation, including all amendments thereto, of each Loan Party, certified as of a recent date by the Secretary of State of the state of its organization, and a certificate as to the good standing of each Loan Party as of a recent date, from such Secretary of State; (ii) a certificate of the Secretary or Assistant Secretary of each Loan Party dated the Closing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws of such Loan Party as in effect on the Closing Date and at all times since, or prior to, the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such person is a party and, in the case of the Borrower, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate or articles of incorporation of such Loan Party have not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (i) above or reflected in the certified documents furnished by such Secretary of State, and (D) as to the incumbency and specimen signature of each officer executing any Loan Document or any other document delivered in connection herewith on behalf of such Loan Party; (iii) a certificate of another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant to clause (ii) above; and (iv) such other documents as the Lenders or the Administrative Agent may reasonably request.

(d) The Administrative Agent shall have received a certificate, dated the Closing Date and signed by a Financial Officer of the Borrower, confirming compliance with the conditions precedent set forth in paragraphs (b) and (c) of Section 4.01.

(e) The Administrative Agent shall have received all Fees and other amounts due and payable on or prior to the Closing Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder or under any other Loan Document.

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(f) The Security Documents shall have been duly executed by each Loan Party that is to be a party thereto and shall be in full force and effect on the Closing Date. The Collateral Agent on behalf of the Secured Parties shall have a security interest in the Collateral of the type and priority described in each Security Document.

(g) The Collateral Agent shall have received a Perfection Certificate with respect to the Loan Parties dated the Closing Date and duly executed by a Responsible Officer of Holdings and the Borrower, and shall have received the results of a search of the Uniform Commercial Code filings (or equivalent filings) made with respect to the Loan Parties in the states (or other jurisdictions) of formation of such persons, and, to the extent required by the Collateral Agent, in which the chief executive office of each such person is located and in the other jurisdictions in which such persons maintain property, in each case as indicated on such Perfection Certificate, together with copies of the financing statements (or similar documents) disclosed by such search, and accompanied by evidence satisfactory to the Collateral Agent that the Liens indicated in any such financing statement (or similar document) would be permitted under Section 6.02 or have been or will be contemporaneously released or terminated.

(h) (i) Each of the Security Documents, in form and substance satisfactory to the Lenders, relating to each of the Mortgaged Properties shall have been duly executed by the parties thereto and delivered to the Collateral Agent and shall be in full force and effect, (ii) each of such Mortgaged Properties shall not be subject to any Lien other than those permitted under Section 6.02, (iii) each of such Security Documents shall have been filed and recorded in the recording office as specified on Schedule 3.19(c) (or a lender’s title insurance policy, in form and substance reasonably acceptable to the Collateral Agent, insuring such Security Document as a first lien on such Mortgaged Property (subject to any Lien permitted by Section 6.02 or such Mortgage) shall have been received by the Collateral Agent) and, in connection therewith, the Collateral Agent shall have received evidence satisfactory to it of each such filing and recordation and (iv) the Collateral Agent shall have received such other documents, including a policy or policies of title insurance issued by a nationally recognized title insurance company, together with such endorsements, coinsurance and reinsurance as may be reasonably requested by the Collateral Agent, insuring the Mortgages as valid first liens on the Mortgaged Properties, free of Liens other than those permitted under Section 6.02 or such Mortgage, together with such surveys, abstracts, appraisals and legal opinions required to be furnished pursuant to the terms of the Mortgages or as reasonably requested by the Collateral Agent.

(i) The Administrative Agent shall have received a copy of, or a certificate as to coverage under, the insurance policies required by Section 5.02 and the applicable provisions of the Security Documents, each of which shall be endorsed or otherwise amended to include a customary lender’s loss payable endorsement and to name the Collateral Agent as additional insured, in form and substance reasonably satisfactory to the Administrative Agent.

(j) Holdings shall have received gross cash proceeds of not less than $62,200,000 from the Equity Contributions.

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(k) The Borrower shall have received gross cash proceeds of not less than $230,000,000 from the borrowing of term loans pursuant to the First Lien Credit Agreement. The terms and conditions of the First Lien Loan Documents (including the Intercreditor Agreement) shall be satisfactory to the Administrative Agent. The Administrative Agent shall have received copies of the First Lien Loan Documents fully executed by all parties thereto.

(l) All principal, premium, if any, interest, fees and other amounts due or outstanding under the Existing Debt shall have been paid in full, the commitments thereunder terminated and all guarantees and security in support thereof discharged and released, and the Administrative Agent shall have received reasonably satisfactory evidence thereof. Immediately after giving effect to the Transactions and the other transactions contemplated hereby, Holdings, the Borrower and the Subsidiaries shall have outstanding no Indebtedness or preferred stock other than (a) Indebtedness outstanding under this Agreement, (b) Indebtedness set forth on Schedule 6.01, (c) Indebtedness outstanding under the First Lien Credit Agreement and (d) other Indebtedness permitted to be incurred under this Agreement in an aggregate outstanding principal amount not in excess of $1,000,000.

(m) BTI Telecom Corp., a Subsidiary Guarantor, shall have given an irrevocable notice of redemption for all the outstanding BTI Telecom Notes, and the Borrower shall have deposited $19,340,872 in an account in which the collateral agent under the First Lien Credit Agreement has exclusive dominion and control, including the exclusive right of withdrawal, over such account until all indentures covering the BTI Telecom Notes have been discharged.

(n) The Lenders shall have received the financial statements and opinion referred to in Section 3.05, none of which shall demonstrate a material adverse change in the financial condition of the Borrower from (and shall not otherwise be materially inconsistent with) the financial statements or forecasts previously provided to the Lenders.

(o) The Administrative Agent shall have received a certificate from a Financial Officer of Holdings certifying that Holdings and its subsidiaries, on a consolidated basis after giving effect to the Transactions to occur on the Closing Date, are solvent (determined in a manner consistent with the representation in Section 3.22).

(p) All requisite Governmental Authorities and third parties set forth on Schedule 3.04 shall have approved or consented to the Transactions and the other transactions contemplated hereby to the extent required, all applicable appeal periods shall have expired and there shall not be any pending or threatened litigation, governmental, administrative or judicial action that could reasonably be expected to restrain, prevent or impose materially burdensome conditions on the Transactions or the other transactions contemplated hereby, except as identified on Schedule 3.04.

(q) The Lenders shall have received, to the extent requested, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act.

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(r) Except for the Disclosed Matters, there shall be no actions, suits or proceedings at law or in equity or by or before any Governmental Authority now pending or threatened against or affecting Holdings or the Borrower or any Subsidiary or any business, property or rights of any such person that involve any Loan Document or the Transactions.

ARTICLE V

Affirmative Covenants

Each of Holdings and the Borrower covenants and agrees with each Lender that so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan and all Administrative Agent Fees and all other expenses or amounts payable under any Loan Document shall have been paid in full, unless the Required Lenders shall otherwise consent in writing, each of Holdings and the Borrower will, and will cause each of the Subsidiaries to:

SECTION 5.01. Existence; Compliance with Laws; Businesses and Properties. (a) Do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence, except as otherwise expressly permitted under Section 6.05.

(b) Do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, permits, franchises, authorizations, patents, copyrights, trademarks and trade names material to the conduct of its business; maintain and operate such business in substantially the manner in which it is presently conducted and operated; comply in all material respects with all applicable laws, rules, regulations and decrees and orders of any Governmental Authority, whether now in effect or hereafter enacted, except where the failure to comply, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; and at all times maintain and preserve all property material to the conduct of such business and keep such property in good repair, working order and condition (other than wear and tear occurring in the ordinary course of business) and from time to time make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and replacements thereto necessary in order that the business carried on in connection therewith may be properly conducted at all times; provided that nothing in this Section 5.01 shall prevent (i) sales of property, consolidations or mergers in accordance with Section 6.05; (ii) the withdrawal by Holdings, the Borrower or any of the Subsidiaries of its qualification as a foreign corporation in any jurisdiction where such withdrawal, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; or (iii) the abandonment by Holdings, the Borrower or any of the Subsidiaries of any rights, licenses, permits, franchises, authorizations, patents, copyrights, trademarks and trade names that such person reasonably determines are not useful to its business or no longer commercially desirable.

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SECTION 5.02. Insurance. (a) Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which Holdings, the Borrower or such Subsidiary operates. Without limiting the generality of the foregoing, the Loan Parties shall maintain or cause to be maintained replacement value casualty insurance on the Collateral under such policies of insurance, with such insurance companies, in such amounts, with such deductibles, and covering such risks as are at all times satisfactory to the Administrative Agent in its commercially reasonable judgment. Each such policy of insurance shall (i) name the Collateral Agent for the benefit of the Secured Parties as an additional insured thereunder as its interests may appear and (ii) in the case of each business interruption and casualty insurance policy, contain a loss payable clause or endorsement, satisfactory in form and substance to the Administrative Agent, that names the Collateral Agent for the benefit of the Secured Parties as the loss payee thereunder for any covered loss in excess of $500,000 and provides for at least 10 days’ prior written notice to the Administrative Agent of any cancellation of such policy.

(b) If at any time the area in which the Premises (as defined in the Mortgages) are located is designated (i) a “flood hazard area” with an assigned “Federal Flood Zone” designation in any Flood Insurance Rate Map published by the Federal Emergency Management Agency (or any successor agency), obtain flood insurance in such total amount as the Administrative Agent or the Collateral Agent may from time to time require, and otherwise comply with the National Flood Insurance Program as set forth in the Flood Disaster Protection Act of 1973, as it may be amended from time to time, or (ii) a “Zone 1” area, obtain earthquake insurance in such total amount as the Administrative Agent or the Collateral Agent may from time to time require.

(c) With respect to any Mortgaged Property, carry and maintain comprehensive general liability insurance including the “Technology General Liability Extension Endorsement” and coverage on an occurrence basis against claims made for personal injury (including bodily injury, death and property damage) with a per occurrence limit of $1,000,000 and $2,000,000 in the aggregate and umbrella liability insurance for a combined single limit of no less than $35,000,000, naming the Collateral Agent as an additional insured, on forms satisfactory to the Collateral Agent.

(d) Notify the Administrative Agent and the Collateral Agent promptly whenever any separate insurance concurrent in form or contributing in the event of loss with that required to be maintained under this Section 5.02 is taken out by any Loan Party; and promptly deliver to the Administrative Agent and the Collateral Agent a duplicate original copy of such policy or policies.

SECTION 5.03. Taxes and Claims. Pay and discharge promptly when due all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, as well as all lawful claims for labor, materials and supplies or otherwise, before the same shall become delinquent or in default, that, if unpaid, might give rise to a Lien upon such properties or any part thereof;

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provided, however, that such payment and discharge shall not be required with respect to any such tax, assessment, charge, levy or claim so long as (i) such tax or claim (including any interest, penalties and additions thereto), together with all other taxes or claims (including any interest, penalties and additions thereto) then remaining unpaid, does not exceed $500,000 in the aggregate or (ii) the validity or amount thereof shall be contested in good faith by appropriate proceedings and the Borrower shall have set aside on its books adequate reserves with respect thereto in accordance with GAAP and such contest operates to suspend collection of the contested obligation, tax, assessment or charge and enforcement of a Lien and, in the case of a Mortgaged Property, there is no risk of forfeiture of such property.

SECTION 5.04. Financial Statements, Reports, etc. In the case of Holdings, furnish to the Administrative Agent, which shall furnish to each Lender:

(a) within 90 days after the end of each fiscal year, beginning with the fiscal year ending December 31, 2007, its consolidated balance sheet and related statements of income, stockholders’ equity and cash flows showing the financial condition of Holdings and its consolidated Subsidiaries as of the close of such fiscal year and the results of its operations and the operations of such Subsidiaries during such year, together with comparative figures for the immediately preceding fiscal year, all audited by BDO Seidman, LLP or other independent public accountants of recognized national standing and accompanied by an opinion of such accountants (which opinion shall be without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements fairly present the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;

(b) within 45 days after the end of each of the first three fiscal quarters of each fiscal year, beginning with the fiscal quarter ending September 30, 2007, its consolidated balance sheet and related statements of income, stockholders’ equity and cash flows showing the financial condition of Holdings and its consolidated Subsidiaries as of the close of such fiscal quarter and the results of its operations and the operations of such Subsidiaries during such fiscal quarter and the then elapsed portion of the fiscal year, and comparative figures for the same periods in the immediately preceding fiscal year, all certified by one of its Financial Officers as fairly presenting the financial condition and results of operations of Holdings and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments;

(c) concurrently with any delivery of financial statements under paragraph (a), or (b) above, a certificate of the accounting firm (in the case of paragraph (a)) or Financial Officer (in the case of paragraph (a), to the extent not included in a certificate of the accounting firm, and paragraph (b)) opining on or certifying such statements (which certificate, when furnished by an accounting firm, may be limited to accounting matters and/or compliance with the financial covenants hereunder and disclaim responsibility for legal interpretations) (i) certifying that no Event of Default or Default has occurred or, if

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such an Event of Default or Default has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto and (ii) setting forth computations in reasonable detail satisfactory to the Administrative Agent demonstrating compliance with the covenants contained in Sections 6.10, 6.11, 6.12 and 6.13 and, in the case of a certificate delivered with the financial statements required by paragraph (a) above, setting forth Holdings’ calculation of Excess Cash Flow;

(d) within 90 days after the beginning of each fiscal year of Holdings, a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and related statements of projected operations and cash flows as of the end of and for such fiscal year and setting forth the assumptions used for purposes of preparing such budget) and, promptly when available, any significant revisions of such budget;

(e) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by Holdings, the Borrower or any Subsidiary with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed to its shareholders generally, as the case may be;

(f) promptly after the receipt thereof by Holdings or the Borrower or any of their respective subsidiaries, a copy of any final “management letter” received by any such person from its certified public accountants and the management’s response thereto;

(g) promptly after the request by any Lender, all documentation and other information that such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act;

(h) promptly after the request by the Administrative Agent or any Lender, on and after the effectiveness of the applicable provisions of the Pension Act, copies of (i) any documents described in Section 101(k)(1) of ERISA that the Borrower or any of its ERISA Affiliates may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA that the Borrower or any of its ERISA Affiliates may request with respect to any Multiemployer Plan; provided that if the Borrower or any of its ERISA Affiliates has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, the Borrower or the applicable ERISA Affiliate shall promptly make a request for such documents or notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof; and

(i) promptly, from time to time, such other information regarding the operations, business affairs and financial condition of Holdings, the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.

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SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative Agent and each Lender prompt written notice of the following:

(a) any Event of Default or Default, specifying the nature and extent thereof and the corrective action (if any) taken or proposed to be taken with respect thereto;

(b) the filing or commencement of, or any written non-frivolous (as reasonably determined in good faith by a Responsible Officer of Holdings or the Borrower) threat or written non-frivolous (as reasonably determined in good faith by a Responsible Officer of Holdings or the Borrower) notice of intention of any person to file or commence (in each case, that is actually received by a Responsible Officer of Holdings or the Borrower), any action, suit or proceeding, whether at law or in equity or by or before any Governmental Authority, against the Borrower or any Affiliate thereof that could reasonably be expected to result in a Material Adverse Effect;

(c) any development that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect; and

(d) any change in Holdings’ corporate rating by S&P, in Holdings’ corporate family rating by Moody’s or in the ratings of the Loans by S&P or Moody’s, or any written notice actually received from either such agency indicating its intent to effect such a change or to place Holdings or the Loans on a “CreditWatch” or “WatchList” or any substantially similar list maintained by S&P or Moody’s, in each case with negative implications, or its cessation of, or its intent to cease, rating Holdings or the Loans .

SECTION 5.06. Information Regarding Collateral. (a) Except in connection with a transaction permitted by Section 6.05 following which any Loan Party shall cease to be a Loan Party, furnish to the Administrative Agent prompt written notice of any change (i) in any Loan Party’s corporate name, (ii) in the jurisdiction of organization or formation of any Loan Party, (iii) in any Loan Party’s identity or corporate structure or (iv) in any Loan Party’s Federal Taxpayer Identification Number. Holdings and the Borrower agree not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral as contemplated hereunder and by the Security Documents. Holdings and the Borrower also agree promptly to notify the Administrative Agent if any material portion of the Collateral is damaged or destroyed.

(b) In the case of the Borrower, each year, at the time of delivery of the annual financial statements with respect to the preceding fiscal year pursuant to Section 5.04(a), deliver to the Administrative Agent a certificate of a Financial Officer setting forth the information required pursuant to Section 2 of the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Closing Date or the date of the most recent certificate delivered pursuant to this Section 5.06.

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SECTION 5.07. Maintaining Records; Access to Properties and Inspections; Maintenance of Ratings. Keep proper books of record and account in which full, true and correct entries in conformity with GAAP and all requirements of law are made of all dealings and transactions in relation to its business and activities. Each Loan Party will, and will cause each of its subsidiaries to, permit any representatives designated by the Administrative Agent (who shall designate such representatives with the consent, or at the direction, of the Required Lenders) to visit and inspect the financial records and the properties of such person not more than once each fiscal year prior to an Event of Default at reasonable times and as often as reasonably requested during the continuance of an Event of Default and to make extracts from and copies of such financial records, and permit any representatives designated by the Administrative Agent (who shall designate such representatives with the consent, or at the direction, of the Required Lenders) to discuss the affairs, finances and condition of such person with the officers thereof and independent accountants therefor.

SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans only for the purposes specified in the introductory statement to this Agreement.

SECTION 5.09. Employee Benefits. (a) Comply in all material respects with the applicable provisions of ERISA and the Code and (b) furnish to the Administrative Agent as soon as possible after, and in any event within ten days after any responsible officer of Holdings, the Borrower or any ERISA Affiliate knows or has reason to know that, any ERISA Event has occurred that, alone or together with any other ERISA Event could reasonably be expected to result in liability of the Borrower or any ERISA Affiliate in an aggregate amount exceeding $1,000,000, a statement of a Financial Officer of Holdings or the Borrower setting forth details as to such ERISA Event and the action, if any, that Holdings or the Borrower proposes to take with respect thereto.

SECTION 5.10. Compliance with Environmental Laws. Comply, and use commercially reasonable efforts to cause all lessees and other persons occupying its properties to comply, in all material respects with all Environmental Laws applicable to its operations and properties; obtain and renew all material environmental permits necessary for its operations and properties; and conduct any remedial action required by and in accordance with Environmental Laws; provided, however, that none of Holdings, the Borrower or any Subsidiary shall be required to undertake any remedial action required by Environmental Laws to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.

SECTION 5.11. Preparation of Environmental Reports. If a Default caused by reason of a breach of Section 3.17 or Section 5.10 shall have occurred and be continuing for more than 20 Business Days without Holdings, the Borrower or any Subsidiary commencing activities reasonably likely to cure such Default, at the written request of the Required Lenders through the Administrative Agent, provide to the Lenders within 45 days after such request, at the expense of the Loan Parties, an environmental site assessment report regarding the matters which are the subject of such Default prepared by an environmental consulting firm reasonably acceptable to the Administrative Agent and indicating the presence or absence of Hazardous Materials and the estimated cost of any compliance or remedial action in connection with such Default.

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SECTION 5.12. Further Assurances. Execute any and all further documents, financing statements, agreements and instruments, and take all further action (including filing Uniform Commercial Code and other financing statements, mortgages and deeds of trust) that may be required under applicable law, or that the Required Lenders, the Administrative Agent or the Collateral Agent may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve, protect and perfect the validity and first priority of the security interests created or intended to be created hereunder and by the Security Documents. The Borrower will cause any subsequently acquired or organized Domestic Subsidiary (and, to the extent no adverse tax consequences to Holdings or any of its Subsidiaries would result therefrom, Foreign Subsidiary) to become a Loan Party by executing or joining the Guarantee and Collateral Agreement and each applicable Security Document in favor of the Collateral Agent. In addition, from time to time, each Loan Party will, at its cost and expense, promptly secure the Obligations by pledging or creating, or causing to be pledged or created, in accordance hereunder and with the applicable Security Documents, perfected security interests with respect to such of its assets and properties intended to comprise Collateral hereunder and under the Security Documents as the Administrative Agent or the Required Lenders shall designate (it being understood that it is the intent of the parties that the Obligations shall be secured by substantially all the assets of the Borrower and its Subsidiaries (including real and other properties acquired subsequent to the Closing Date but subject to the exceptions described herein and in the Security Documents)). Such security interests and Liens on the Collateral will be created under the Security Documents and other security agreements, mortgages, deeds of trust and other instruments and documents in form and substance reasonably satisfactory to the Collateral Agent, and the relevant Loan Party shall deliver or cause to be delivered to the Lenders all such instruments and documents (including legal opinions, title insurance policies and lien searches) as the Collateral Agent shall reasonably request to evidence compliance with this Section; provided, that Mortgages and related documents reasonably requested by the Collateral Agent shall be provided only in respect of fee owned property promptly following the request of the Collateral Agent and only in respect of such property having a book value in excess of $250,000 individually (and in furtherance of the foregoing, the Borrower will give prompt notice to the Administrative Agent of the acquisition by any Loan Party of any such real property interests). Each of the Loan Parties agrees to provide such evidence as the Collateral Agent shall reasonably request as to the perfection and priority status of each such security interest and Lien.

SECTION 5.13. Interest Rate Protection. No later than the 90th day after the Closing Date, the Borrower shall enter into, and for a minimum of two years thereafter maintain, Hedging Agreements reasonably acceptable to the Administrative Agent that result in at least 50% of the aggregate principal amount of the sum of (a) the Loans and (b) the term loans under the First Lien Credit Agreement being effectively subject to a fixed or maximum interest rate reasonably acceptable to the Administrative Agent.

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ARTICLE VI

Negative Covenants

Each of Holdings and the Borrower covenants and agrees with each Lender that, so long as this Agreement shall remain in effect and until the Commitments have been terminated and the principal of and interest on each Loan and all Administrative Agent Fees and all other expenses or amounts payable under any Loan Document have been paid in full, unless the Required Lenders shall otherwise consent in writing, neither Holdings nor the Borrower will, nor will they cause or permit any of the Subsidiaries to:

SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any Indebtedness, except:

(a) Indebtedness created hereunder and under the other Loan Documents;

(b) intercompany Indebtedness of Holdings and the Subsidiaries to the extent permitted by Section 6.04(c);

(c) Indebtedness of Holdings or any Subsidiary incurred to finance the acquisition, construction, improvement or lease of any equipment, fixed or capital assets, and extensions, renewals, refinancings and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness is incurred prior to or within 120 days after such acquisition or lease or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this Section 6.01(c), when combined with the aggregate principal amount of all Capital Lease Obligations and Synthetic Lease Obligations incurred pursuant to Section 6.01(d), shall not exceed $10,000,000 at any time outstanding;

(d) Capital Lease Obligations and Synthetic Lease Obligations (including those arising in connection with any sale and lease-back transaction permitted pursuant to Section 6.03) in an aggregate principal amount, when combined with the aggregate principal amount of all Indebtedness incurred pursuant to Section 6.01(c), not in excess of $10,000,000 at any time outstanding;

(e) Indebtedness under statutory or regulatory obligations, bankers’ acceptances, governmental contracts, or with respect to workers’ compensation claims, and Indebtedness (other than Indebtedness for borrowed money) pursuant to any guaranties, performance bonds, letters of credit, surety bonds, pledges, deposits, return of money bonds or other arrangements made to secure the performance of tenders, bids, contracts, leases, franchises, surety, statutory, regulatory or other similar governmental obligations, appeal bonds or similar obligations incurred in the ordinary course of business;

(f) Indebtedness incurred under the First Lien Credit Agreement and the other First Lien Loan Documents in an aggregate principal amount not exceeding $265,000,000 at any time outstanding, and subject to the terms of the Intercreditor Agreement, Indebtedness incurred to extend, refinance, renew or replace such Indebtedness;

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(g) Indebtedness incurred by Holdings or any of its Subsidiaries arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guaranties or letters of credit, surety bonds or performance bonds securing the performance of Holdings or any such Subsidiary pursuant to such agreements, in connection with Permitted Acquisitions or permitted dispositions of any business, assets or Subsidiary of Holdings or any of its Subsidiaries;

(h) Indebtedness in respect of netting services, overdraft protections and otherwise in connection with deposit accounts;

(i) Guarantees (other than in respect of Indebtedness for borrowed money) in the ordinary course of business of the obligations of suppliers, customers, franchisees and licensees of Holdings and its Subsidiaries;

(j) Guarantees of Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01; provided, that if the Indebtedness that is being Guaranteed is unsecured and/or subordinated to the Obligations, the Guarantee shall also be unsecured and/or subordinated to the Obligations;

(k) Indebtedness existing on the Closing Date and described in Schedule 6.01, but not any extensions, renewals, refinancings or replacements of such Indebtedness except (i) extensions, renewals, refinancings and replacements expressly provided for in the agreements evidencing any such Indebtedness as the same are in effect on the date of this Agreement and (ii) extensions, renewals, refinancings and replacements of any such Indebtedness if the terms and conditions thereof are not less favorable to the obligor thereon or to the Lenders than the Indebtedness being extended, renewed, refinanced or replaced, and the average life to maturity thereof is greater than or equal to that of the Indebtedness being extended, renewed, refinanced or replaced; provided, such Indebtedness permitted under the immediately preceding clause (i) or (ii) above shall not (A) include Indebtedness of an obligor that was not an obligor with respect to the Indebtedness being extended, renewed or refinanced, (B) exceed in a principal amount the Indebtedness being extended, renewed, refinanced or replaced plus the amount of any interest, premium, or penalties required to be paid thereon plus fees and expenses associated therewith or (C) be incurred, created or assumed if any Default or Event of Default has occurred and is continuing or would result therefrom;

(l) (i) Indebtedness of a person or Indebtedness attaching to assets of a person that, in either case, becomes a Subsidiary or Indebtedness attaching to assets that are acquired by Holdings or any of the Subsidiaries, in each case after the Closing Date (including pursuant to a Permitted Acquisition), in an aggregate amount not to exceed $10,000,000 at any one time outstanding, provided that

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(x) such Indebtedness existed at the time such person became a Subsidiary or at the time such assets were acquired and, in each case, was not created in anticipation thereof and (y) such Indebtedness is not Guaranteed in any respect by Holdings or any Subsidiary (other than by any such person that so becomes a Subsidiary), and (ii) any extensions, renewals, refinancings and replacements of any Indebtedness specified in subclause (i) above, provided, that (1) the principal amount of any such Indebtedness is not increased above the principal amount thereof outstanding immediately prior to such extension, renewal, refinancing or replacement plus the amount of any interest, premium or penalties required to be paid thereon plus fees and expenses associated therewith, (2) the direct and contingent obligors with respect to such Indebtedness are not changed and (3) such Indebtedness shall not be secured by any assets other than the assets securing the Indebtedness being renewed, extended or refinanced;

(m) Indebtedness in respect of Hedging Agreements permitted pursuant to Section 6.04; and

(n) other Indebtedness of Holdings or the Subsidiaries in an aggregate principal amount not exceeding $10,000,000 at any time outstanding; provided that, except as permitted by Section 6.02(r) or (s), such Indebtedness shall be unsecured.

SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on any property or assets (including Equity Interests or other securities of any person, including the Borrower or any Subsidiary) now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except:

(a) Liens on property or assets of Holdings and its Subsidiaries existing on the date hereof and set forth in Schedule 6.02 or on a title report delivered pursuant to Section 4.02(h) or Section 5.12; provided that such Liens shall secure only those obligations which they secure on the date hereof and extensions, renewals, refinancings and replacements thereof permitted hereunder;

(b) any Lien created under the Loan Documents;

(c) any Lien existing on any property or asset prior to the acquisition thereof by Holdings or any Subsidiary or existing on any property or assets of any person that becomes a Subsidiary after the date hereof prior to the time such person becomes a Subsidiary (including pursuant to a Permitted Acquisition), and Liens securing Indebtedness permitted pursuant to Section 6.01(m) above, as the case may be; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such person becoming a Subsidiary, (ii) such Lien does not apply to any other property or assets of Holdings, the Borrower or any Subsidiary and (iii) such Lien secures only those obligations which it secures on the date of such acquisition or the date such person becomes a Subsidiary (and extensions, renewals, refinancings and replacements thereof), as the case may be;

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(d) any First Priority Lien;

(e) Liens for taxes not yet due or which are being contested in compliance with Section 5.03;

(f) carriers’, warehousemen’s, landlords’ mechanics’, materialmen’s, repairmen’s, banks’ (including rights of set-off) or other like Liens arising in the ordinary course of business or imposed by law and securing obligations that are not due and payable or which are being contested in compliance with Section 5.03;

(g) pledges and deposits made (including in respect of letters of credit) and letters of credit provided in the ordinary course of business in compliance with workmen’s compensation, unemployment insurance and other social security laws or regulations;

(h) deposits to secure the performance of bids, tenders, contracts (other than for Indebtedness), leases (other than Capital Lease Obligations), statutory, regulatory or other similar governmental obligations, surety and appeal bonds, performance bonds, return of money bonds, bankers’ acceptances, government contracts, and letters of credit provided (and deposits to secure such letters of credit) in connection with any of the foregoing, and other obligations of a like nature incurred in the ordinary course of business;

(i) zoning (or similar) restrictions, easements, rights-of-way, restrictions on use of real property and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount and do not materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of Holdings or any of its Subsidiaries;

(j) Liens securing Indebtedness permitted pursuant to Section 6.01(c) and Section 6.01(d); provided that (i) with respect to Indebtedness under Section 6.01(c), such security interests are incurred, and the Indebtedness secured thereby is created, within 120 days after such acquisition or lease or the completion of such construction or improvement, (ii) the Indebtedness secured thereby does not exceed 100% of the lesser of the cost or the fair market value of such fixed or capital assets, improvements or equipment at the time of such acquisition, improvement, construction or lease and (iii) such security interests do not apply to any other property or assets of the Borrower or any Subsidiary;

(k) Liens arising out of judgments or awards in connection with court proceedings which do not constitute an Event of Default;

(l) any interest or title of a lessor or sublessor under any lease of real estate permitted hereunder;

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(m) Liens solely on any cash earnest money deposits made by Holdings or any of the Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder;

(n) purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property entered into in the ordinary course of business;

(o) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(p) non-exclusive outbound licenses of patents, copyrights, trademarks and other intellectual property rights granted by Holdings or any of the Subsidiaries in the ordinary course of business and not interfering in any respect with the ordinary conduct of or materially detracting from the value of the business of Holdings or such Subsidiary;

(q) Southern Liens;

(r) Liens on the assets of Foreign Subsidiaries (other than the Collateral) securing Indebtedness permitted to be incurred pursuant to Section 6.01(b) or (n); and

(s) other Liens that do not, individually or in the aggregate, secure obligations (or encumber property with a fair market value) in excess of $2,500,000 at any one time.

SECTION 6.03. Sale and Lease-Back Transactions. Enter into any arrangement, directly or indirectly, with any person whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred unless (a) the sale or transfer of such property is permitted by Section 6.05 and (b) any Capital Lease Obligations, Synthetic Lease Obligations or Liens arising in connection therewith are permitted by Sections 6.01 and 6.02, as the case may be.

SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire any Equity Interests, evidences of indebtedness or other securities of, make or permit to exist any loans or advances to, or make or permit to exist any investment or any other interest in, any other person, except:

(a) (i) investments by Holdings, the Borrower and the Subsidiaries existing on the date hereof in the Equity Interests of the Borrower and the Subsidiaries and other investments set forth on Schedule 6.04 and (ii) additional investments by Holdings, the Borrower and the Subsidiaries in the Equity Interests of the Borrower and the Subsidiaries; provided that (A) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Guarantee and

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Collateral Agreement (subject to the limitations applicable to voting stock of a Foreign Subsidiary referred to therein and other limitations permitted pursuant to Section 6.06(b)) and (B) the aggregate amount of investments made after the Closing Date by Loan Parties in, and loans and advances made after the Closing Date by Loan Parties to, Subsidiaries that are not Loan Parties (determined without regard to any write-downs or write-offs of such investments, loans and advances) shall not exceed $10,000,000 at any time outstanding;

(b) Permitted Investments;

(c) loans or advances made by Holdings or the Borrower to any Subsidiary and made by any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged to the Collateral Agent (or, prior to Discharge of First Lien Obligations (as defined in the Guarantee and Collateral Agent), to the First Lien Collateral Agent (as defined in the Guarantee and Collateral Agreement)) for the ratable benefit of the Secured Parties pursuant to the Guarantee and Collateral Agreement and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in clause (a) above;

(d) investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

(e) accounts receivable arising, and trade credit granted, in the ordinary course of business, and investments in any Equity Interests or other securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors, and any deposits, prepayments and other credits to suppliers made in the ordinary course of business;

(f) the Borrower and the Subsidiaries may make loans and advances in the ordinary course of business to their respective employees so long as the aggregate principal amount thereof at any time outstanding (determined without regard to any write-downs or write-offs of such loans and advances) shall not exceed $5,000,000;

(g) the Borrower and the Subsidiaries may enter into Hedging Agreements that (i) are required by Section 5.13 or (ii) are not speculative in nature;

(h) the Borrower or any Subsidiary may acquire all or substantially all the assets of a person or line of business of such person, or Holdings, the Borrower or any Subsidiary may acquire not less than 100% of the Equity Interests (other than directors’ qualifying shares) of a person (referred to herein as the “Acquired Entity”); provided that (i) such acquisition was not preceded by an unsolicited tender offer for such Equity Interests by, or proxy contest initiated by, Holdings, the Borrower or any Subsidiary; (ii) the Acquired Entity shall be in a similar line

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of business as that of the Borrower and the Subsidiaries as conducted during the current and most recent preceding calendar year; and (iii) at the time of such transaction (A) both before and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing; (B) the Borrower would be in compliance with the covenant set forth in Section 6.11, as of the most recently completed period of four consecutive fiscal quarters ending prior to such transaction for which the financial statements and certificates required by Section 5.04(a) or 5.04(b), as the case may be, and Section 5.04(c) have been delivered or for which comparable financial statements have been filed with the Securities and Exchange Commission, after giving pro forma effect to such transaction and to any other event occurring after such period as to which pro forma recalculation is appropriate (including any other transaction described in this Section 6.04(h) occurring after such period) as if such transaction had occurred as of the first day of such period (assuming, for purposes of pro forma compliance with Section 6.11, that the maximum ratio permitted at the time by such Section were in fact 0.25 to 1.00 less than the ratios actually provided for in such Section at such time); (C) after giving effect to such acquisition, the sum of (x) unrestricted cash and Permitted Investments of the Borrower and the Subsidiaries plus (y) unused and available Revolving Credit Commitments (as defined in the First Lien Credit Agreement) shall equal at least $5,000,000; (D) the Aggregate Consideration paid in connection with such acquisition and any other acquisitions pursuant to this Section 6.04(h) shall not in the aggregate exceed $50,000,000; (E) Holdings shall have delivered a certificate of a Financial Officer, certifying as to the foregoing and containing reasonably detailed calculations in support thereof, in form and substance satisfactory to the Administrative Agent and (F) the Borrower shall comply, and shall cause the Acquired Entity to comply, with the applicable provisions of Section 5.12 and the Security Documents (any acquisition of an Acquired Entity meeting all the criteria of this Section 6.04(h) being referred to herein as a “Permitted Acquisition”);

(i) Capital Expenditure permitted by Section 6.10;

(j) non-cash consideration issued by the purchaser of assets in connection with a sale of such assets to the extent permitted by Section 6.05; and

(k) in addition to investments permitted by paragraphs (a) through (j) above, additional investments, loans and advances by the Borrower and the Subsidiaries so long as the aggregate amount invested, loaned or advanced pursuant to this paragraph (k) (determined without regard to any write-downs or write-offs of such investments, loans and advances) does not exceed $5,000,000 in the aggregate.

SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions. (a) Merge into or consolidate with any other person, or permit any other person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all the assets (whether now

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owned or hereafter acquired) of the Borrower or less than all the Equity Interests of any Subsidiary, or purchase, lease or otherwise acquire (in one transaction or a series of transactions) all or any substantial part of the assets of any other person, except that (i) the Borrower and any Subsidiary may purchase and sell inventory in the ordinary course of business and (ii) if at the time thereof and immediately after giving effect thereto no Event of Default or Default shall have occurred and be continuing (A) any wholly owned Subsidiary may merge into the Borrower in a transaction in which the Borrower is the surviving corporation, (B) any wholly owned Subsidiary may merge into or consolidate with any other wholly owned Subsidiary in a transaction in which the surviving entity is a wholly owned Subsidiary and no person other than the Borrower or a wholly owned Subsidiary receives any consideration (provided that if any party to any such transaction is a Loan Party, the surviving entity of such transaction shall be a Loan Party), (C) any Foreign Subsidiary may merge into or consolidate with any other Foreign Subsidiary, (D) any Subsidiary may be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to Borrower or any wholly-owned Subsidiary, (E) any Foreign Subsidiary may be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to any Foreign Subsidiary, (F) the Borrower and the Subsidiaries may make Permitted Acquisitions and (G) Holdings and the Subsidiaries may engage in any Permitted Reorganization.

(b) Make any Asset Sale otherwise permitted under paragraph (a) above, except:

(i) in a transaction referred to in Section 6.03; provided that the aggregate fair market value of all assets sold, transferred, leased or disposed of pursuant to this clause (i) shall not exceed $10,000,000;

(ii) sales, transfers or other dispositions set forth in Schedule 6.05;

(iii) any Permitted Reorganization;

(iv) Restricted Payments permitted pursuant to Section 6.06(a);

(v) in a transaction permitted pursuant to Section 6.04; and

(vi) any other Asset Sale (x) for consideration at least 75% of which is cash, (y) such consideration is at least equal to the fair market value of the assets being sold, transferred, leased or disposed of and (z) the fair market value (determined in good faith by the board of directors or other similar governing body of the entity making such disposition) of all assets sold, transferred, leased or disposed of pursuant to this clause (vi) shall not exceed $20,000,000 in the aggregate.

To the extent any Subsidiary or Collateral is sold as permitted by this Section 6.05, or the Required Lenders or all the Lenders, as applicable, waive the provisions of this Section 6.05 with respect to the sale of any Subsidiary or Collateral,

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such Subsidiary or Collateral (unless sold to a Loan Party) shall be sold free and clear of the Liens created by the Security Documents, and the Agents shall take all actions reasonably requested by the applicable Loan Party, at the sole cost and expense of the applicable Loan Party, in order to effect the foregoing.

SECTION 6.06. Restricted Payments; Restrictive Agreements. (a) Declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment (including pursuant to any Synthetic Purchase Agreement), or incur any obligation (contingent or otherwise) to do so; provided, however, that (i) any Subsidiary may declare and make dividends or make other distributions ratably to its equity holders, (ii) Holdings and any Subsidiary may purchase, redeem, retire, defease or otherwise acquire for value any of the Equity Interests of Holdings (A) in exchange for other Equity Interests of Holdings (including in connection with a Benefit Plan Exchange Offer), (B) upon the conversion of preferred Equity Interests of Holdings or the vesting, delivery, exercise, exchange or conversion of stock options, restricted stock units, warrants or similar rights to acquire Equity Interests of Holdings, (C) in connection with any tender by the holder of Equity Interests of Holdings of such Equity Interests in payment of withholding or other taxes relating to the vesting, delivery, exercise, exchange or conversion of stock options, restricted stock, restricted stock units, warrants or other Equity Interests of Holdings or other similar rights to acquire Equity Interests of Holdings or (D) if tendered in settlement of indemnification or similar claims by Holdings against a holder of the Equity Interests of Holdings, (iii) so long as no Event of Default or Default shall have occurred and be continuing or would result therefrom, the Borrower may, or the Borrower may make distributions to Holdings so that Holdings may, repurchase its Equity Interests owned by employees of Holdings, the Borrower or the Subsidiaries or make payments to employees of Holdings, the Borrower or the Subsidiaries upon termination of employment in connection with the exercise of stock options, stock appreciation rights or similar equity incentives or equity based incentives pursuant to management incentive plans or in connection with the death or disability of such employees in an aggregate amount not to exceed $2,500,000 in any fiscal year, (iv) Restricted Payments may be made to a Loan Party in connection with a Permitted Reorganization, (v) Holdings may make (A) Restricted Payments of Qualified Capital Stock contemplated by the Rights Offering and (B) Restricted Payments for the repayment or redemption of Holdings’ 6% Series H Convertible Redeemable Preferred Stock with proceeds from the Rights Offering and/or the conversion of such 6% Series H Convertible Redeemable Preferred Stock into Common Stock, and cash dividends in respect of such 6% Series H Convertible Redeemable Preferred Stock, (vi) Holdings, and its Subsidiaries may dividend or distribute cash in lieu of issuing fractional shares of its Equity Interests in an aggregate amount not to exceed $25,000, and (vii) the Borrower may make Restricted Payments to Holdings (w) to the extent necessary to pay scheduled principal and interest payments of Indebtedness permitted to be incurred by Holdings under Section 6.01, (x) in an amount not to exceed $1,000,000 in any fiscal year, to the extent necessary to pay general corporate and overhead expenses incurred by Holdings in the ordinary course of business and (y) in an amount necessary to pay the Tax liabilities of Holdings directly attributable to (or arising as a result of) the operations of the Borrower and the Subsidiaries; provided, however, that (A) the amount of such dividends under subclause (y) shall not exceed the amount that the Borrower and the Subsidiaries

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would be required to pay in respect of Federal, State and local taxes were the Borrower and the Subsidiaries to pay such taxes as stand alone taxpayers and (B) all Restricted Payments made to Holdings pursuant to this clause (vii) are used by Holdings for the purposes specified herein within 30 days of the receipt thereof.

(b) Enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (i) the ability of Holdings, the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets to secure the Obligations, or (ii) the ability of any Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (A) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document, (B) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to sales of assets and the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the assets or Subsidiary that is to be sold and such sale is permitted hereunder, (C) the foregoing shall not apply to restrictions and conditions contained in the First Lien Credit Agreement or the other First Lien Loan Documents, (D) clause (i) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness; (E) the foregoing shall not apply to any instrument governing Indebtedness permitted by Section 6.01(1) assumed in connection with any Permitted Acquisition, which encumbrance or restriction is not applicable to any person, or the properties or assets of any person, other than the person or the properties or assets of the person so acquired; (F) the foregoing shall not apply to restrictions on cash or other deposits or net worth imposed by suppliers or landlords under contracts entered into in the ordinary course of business; (G) clause (i) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof; (H) the foregoing shall not apply to customary provisions restricting assignments, subletting or other transfers contained in leases, licenses, joint venture agreements, partnership agreements, limited liability company agreements and similar agreements entered into in the ordinary course of business; (I) the foregoing shall not apply to any agreement in effect at the time such Subsidiary becomes a Subsidiary of Holdings, so long as such agreement was not entered into in connection with or in contemplation of such person becoming a Subsidiary; and (J) clause (i) of the foregoing shall not apply to the Southern Company Agreement as in effect on the Closing Date or as such is permitted to be amended, supplemented, renewed, replaced, or otherwise modified from time to time, in each case, pursuant to Section 6.09(a)(iii).

SECTION 6.07. Transactions with Affiliates. Except for transactions between or among Loan Parties, sell or transfer any property or assets to, or purchase or acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except that Holdings or any Subsidiary may engage in any of the foregoing transactions at prices and on terms and conditions not less favorable to Holdings or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties; provided, the foregoing restriction shall not apply to (a) fees paid to members of the

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board of directors (or similar governing body) of Holdings and its Subsidiaries; (b) compensation arrangements for officers and other employees of Holdings and its Subsidiaries entered into in the ordinary course of business; (c) the provision of officers’ and directors’ indemnification and insurance in the ordinary course of business to the extent permitted by applicable law; (d) transactions described in Schedule 6.07; (e) transactions or payments permitted by Sections 6.01, 6.03, 6.04, 6.05, 6.06, or 6.09(b), provided, further, that nothing in the foregoing is intended to or shall prohibit payments on or in respect of Indebtedness permitted hereunder (including Indebtedness under the First Lien Credit Agreement); and (f) Liens permitted by Section 6.02.

SECTION 6.08. Business of Holdings, Borrower and Subsidiaries. (a) With respect to Holdings, engage in any business activities or have any assets or liabilities other than its ownership of the Equity Interests of the Borrower and BTI Telecom Corp. and liabilities incidental thereto, including its liabilities pursuant to the Loan Documents and the First Lien Loan Documents, (b) liabilities to which it is subject under agreements in effect on the Closing Date and any extensions, refinancings, renewals, amendments, modifications or replacements of such agreements that are not less favorable to Holdings in any material respect than the agreements in effect on the Closing Date, (c) liabilities it incurs under plans and agreements (including securities purchase, investment or underwriting agreements) with respect to or in connection with its status as a parent holding company and its offering, sale and issuance of Equity Interests, (d) liabilities it incurs to its directors, officers and employees under agreements and arrangements (including employment agreements and indemnity agreements) entered into in the ordinary course of business, (e) liabilities it incurs as a signatory to agreements or other obligations together with one or more of its Subsidiaries in connection with activities of its Subsidiaries permitted by the other provisions of this Agreement (including agreements relating to Permitted Acquisitions) and (f) liabilities which it incurs under, or as expressly permitted by, this Agreement and the other Loan Documents, provided that, without limiting the generality of the foregoing, Holdings may engage in those activities that are incidental to (x) the maintenance of its existence in compliance with applicable law and (y) legal, tax and accounting matters in connection with any of the foregoing activities.

(b) With respect to the Borrower and its Subsidiaries, engage at any time in any business or business activity other than the business currently conducted by it and business activities reasonably incidental thereto or (as determined in good faith by the board of directors or other similar governing body of the Borrower or such Subsidiary) reasonable extensions thereof.

SECTION 6.09. Other Indebtedness and Agreements. (a) Permit (i) any waiver, supplement, modification, amendment, termination or release of any indenture, instrument or agreement pursuant to which any Material Indebtedness of Holdings, the Borrower or any of the Subsidiaries is outstanding if the effect of such waiver, supplement, modification, amendment, termination or release would materially increase the obligations of the obligor or confer additional material rights on the holder of such Indebtedness in each case in a manner materially adverse to the interests of the Lenders; provided that the First Lien Loan Documents may be amended in accordance with the

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Intercreditor Agreement, (ii) any waiver, supplement, modification or amendment of the Governance Agreement or of its certificate of incorporation, by-laws, operating, management or partnership agreement or other organizational documents, in each case to the extent any such waiver, supplement, modification or amendment would be adverse to the Lenders in any material respect, provided that Holdings or any Subsidiary (x) may issue Equity Interests so long as such issuance is not prohibited by Section 6.06(a) or Section 6.15, and (y) may amend or modify its organizational documents to authorize any such Equity Interests or to effect any Permitted Reorganization, or (iii) any waiver, supplement, modification, amendment, renewal or replacement of the Southern Company Agreement, in each case to the extent any such waiver, supplement, modification, amendment, renewal or replacement would be materially more adverse to the Liens of the Secured Parties under the Security Documents.

(b) Make (or give any notice in respect thereof) any voluntary or optional payment or prepayment on, or make any distribution, whether in cash, property, securities or a combination thereof in respect of such prepayment, or directly or indirectly (including pursuant to any Synthetic Purchase Agreement) redeem, repurchase, retire or otherwise acquire for consideration, or set apart any sum for the aforesaid purposes, any Indebtedness of Holdings and the Subsidiaries that is by its terms subordinated in right of payment to the Obligations.

SECTION 6.10. Capital Expenditures. Permit the aggregate amount of Capital Expenditures made by Holdings and the Subsidiaries in any period set forth below to exceed the amount set forth below for such period (such amount, the “Scheduled Amount”):

Period:	Amount
fiscal year ending December 31, 2007	$	60,000,000
fiscal year ending December 31, 2008	$	60,000,000
fiscal year ending December 31, 2009	$	60,000,000
fiscal year ending December 31, 2010	$	65,000,000
fiscal year ending December 31, 2011	$	65,000,000
fiscal year ending December 31, 2012	$	65,000,000
fiscal years ending December 31, 2013 or thereafter	$	65,000,000

The Scheduled Amount in respect of any fiscal year commencing with the fiscal year ending on December 31, 2008, shall be increased by 50% of the unused portion of the Scheduled Amount for the immediately preceding fiscal year. In determining whether any amount is available for carryover, the amount expended in any fiscal year shall first be deemed to be the Scheduled Amount and then the amount carried forward to such fiscal year.

SECTION 6.11. Maximum Leverage Ratio. Permit the Leverage Ratio as of the last day of any fiscal quarter ending during a period set forth below, beginning with the fiscal quarter ending September 30, 2007, to be greater than the ratio set forth opposite such period below:

Period	Ratio
Closing Date through September 30, 2007	5.75:1.00
October 1, 2007 through December 31, 2007	5.50:1.00
January 1, 2008 through December 31, 2008	5.25:1.00
January 1, 2009 through June 30, 2009	5.00:1.00
July 1, 2009 through December 31, 2009	4.75:1.00
January 1, 2010 through September 30, 2010	4.50:1.00
October 1, 2010 and thereafter	4.25:1.00

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SECTION 6.12. Fiscal Year. With respect to Holdings and the Borrower, change their fiscal year-end to a date other than December 31.

SECTION 6.13. Certain Equity Securities. Issue any Equity Interest that is not Qualified Capital Stock, except for the 6% Series H Convertible Redeemable Preferred Stock issued by Holding on or before the Closing Date.

ARTICLE VII

Events of Default

If any of the following events shall occur (“Events of Default”):

(a) any representation or warranty made or deemed made in any Loan Document, or any representation, warranty, statement or information contained in any report, certificate, financial statement or other instrument furnished in connection with or pursuant to any Loan Document in writing, shall prove to have been false or misleading in any material respect when so made, deemed made or furnished;

(b) default shall be made in the payment of any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or by acceleration thereof or otherwise;

(c) default shall be made in the payment of any interest on any Loan or the Administrative Agent Fee or any other amount (other than an amount referred to in (b) above) due under any Loan Document, when and as the same shall become due and payable, and such default shall continue unremedied for a period of three Business Days;

(d) default shall be made in the due observance or performance by Holdings, the Borrower or any Subsidiary of any covenant, condition or agreement contained in Section 5.01(a), 5.05 or 5.08 or in Article VI;

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(e) default shall be made in the due observance or performance by Holdings, the Borrower or any Subsidiary of any covenant, condition or agreement contained in any Loan Document (other than those specified in (b), (c) or (d) above) and such default shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent or any Lender to the Borrower;

(f) (i) Holdings, the Borrower or any Subsidiary shall fail to pay any principal, interest or other amount due in respect of any Material Indebtedness, when and as the same shall become due and payable or (ii) any other event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity or that results in the termination or permits any counterparty to terminate any Hedging Agreement the obligations under which constitute Material Indebtedness; provided that this clause (ii) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; provided further that an Event of Default under and as defined in the First Lien Credit Agreement (other than the Events of Default described in paragraph (b) or (c) of Article VII of the First Lien Credit Agreement to which this proviso shall not apply) (a “First Lien Event of Default”) shall not in and of itself constitute an Event of Default under this paragraph until the earlier to occur of (x) a period of 45 days has elapsed following notice of such First Lien Event of Default from the administrative agent or any lender under the First Lien Credit Agreement to the Borrower, or from the Borrower to such administrative agent or any such lender and such First Lien Event of Default has not been cured or waived during such period, and (y) the acceleration of the maturity of any of the loans or the termination of any of the commitments under the First Lien Credit Agreement in connection with such First Lien Event of Default or the exercise of any remedies by the lenders or the administrative agent under the First Lien Credit Agreement in connection with such First Lien Event of Default;

(g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of Holdings, the Borrower or any Subsidiary, or of a substantial part of the property or assets of Holdings, the Borrower or a Subsidiary, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Holdings, the Borrower or any Subsidiary or for a substantial part of the property or assets of Holdings, the Borrower or a Subsidiary or (iii) the winding-up or liquidation of Holdings, the Borrower or any Subsidiary; and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

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(h) Holdings, the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in (g) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Holdings, the Borrower or any Subsidiary or for a substantial part of the property or assets of Holdings, the Borrower or any Subsidiary, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due or (vii) take any action for the purpose of effecting any of the foregoing;

(i) one or more judgments shall be rendered against Holdings, the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, or any action (to the extent not effectively stayed) shall be legally taken by a judgment creditor to levy upon assets or properties of Holdings, the Borrower or any Subsidiary to enforce any such judgment and such judgment is for the payment of money in an aggregate amount in excess of $5,000,000 (to the extent not paid or to the extent not adequately covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage);

(j) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other such ERISA Events, could reasonably be expected to result in liability of the Borrower and its ERISA Affiliates in an aggregate amount exceeding $5,000,000;

(k) any Guarantee under the Guarantee and Collateral Agreement for any reason shall cease to be in full force and effect, or any Guarantor shall deny in writing that it has any further liability under the Guarantee and Collateral Agreement (in each case, other than in accordance with its terms or other than as a result of the discharge or sale or other disposition of such Guarantor in accordance with the terms of the Loan Documents); or

(l) any security interest purported to be created by any Security Document shall cease to be, or shall be asserted by the Borrower or any other Loan Party not to be, a valid, perfected, first priority (subject to the Lien priorities set forth in the Intercreditor Agreement and except as otherwise expressly provided in this Agreement or such Security Document) security interest in the securities, assets or properties covered thereby, except as the result of a release of Collateral or the discharge or sale or other disposition of such Loan Party in accordance with the terms of the Loan Documents, except to the extent that any such loss of perfection or priority results from the failure of the Collateral Agent or any Secured Party to take any action within its control (but only to the extent that the Borrower has

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provided such person sufficient information to take such action) and/or except to the extent that such loss is covered by a lender’s title insurance policy and the related insurer promptly after such loss shall have acknowledged in writing that such loss is covered by such title insurance policy.

then, and in every such event (other than an event with respect to Holdings or the Borrower described in paragraph (g) or (h) above), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate forthwith the Commitments and (ii) declare the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder and under any other Loan Document, shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Loan Document to the contrary notwithstanding; and in any event with respect to Holdings or the Borrower described in paragraph (g) or (h) above, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and any unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder and under any other Loan Document, shall automatically become due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in any other Loan Document to the contrary notwithstanding.

ARTICLE VIII

The Administrative Agent and the Collateral Agent

Each of the Lenders hereby irrevocably appoints the Administrative Agent and the Collateral Agent (for purposes of this Article VIII, the Administrative Agent and the Collateral Agent are referred to collectively as the “Agents”) its agent and authorizes the Agents to take such actions on its behalf and to exercise such powers as are delegated to such Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. Without limiting the generality of the foregoing, the Agents are hereby expressly authorized to execute any and all documents (including releases) with respect to the Loan Parties, the Collateral and any rights of the Secured Parties with respect thereto, as contemplated by and in accordance with the provisions of this Agreement and the Security Documents, including Section 6.05. The Lenders acknowledge and agree that the Agents shall also act, subject to and in accordance with the terms of the Intercreditor Agreement, as the administrative agent and collateral agent for the lenders under the First Lien Credit Agreement.

Without further written consent or authorization from the Lenders or the Administrative Agent, the Collateral Agent may execute any documents or instruments necessary to (i) release any Lien encumbering any item of Collateral that is the subject of

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a sale or other disposition of assets permitted hereby or to which the Required Lenders (or such other Lenders as may be required to give such consent under Section 9.08) have otherwise consented or (ii) release any Guarantor from its Guarantee pursuant to Section 6.05 or with respect to which the Required Lenders (or such other Lenders as may be required to give such consent under Section 9.08) have otherwise consented.

The bank serving as the Administrative Agent and/or the Collateral Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with Holdings, the Borrower or any Subsidiary or other Affiliate thereof as if it were not an Agent hereunder.

Neither Agent shall have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) neither Agent shall be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) neither Agent shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that such Agent is instructed in writing to exercise by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.08), and (c) except as expressly set forth in the Loan Documents, neither Agent shall have any duty to disclose, nor shall it be liable for the failure to disclose, any information relating to Holdings, the Borrower or any of the Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent and/or Collateral Agent or any of its Affiliates in any capacity. Neither Agent shall be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.08) or in the absence of its own gross negligence or willful misconduct. Neither Agent shall be deemed to have knowledge of any Default unless and until written notice thereof is given to such Agent by Holdings, the Borrower or a Lender, and neither Agent shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to such Agent.

Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper person. Each Agent may also rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper person, and shall not incur any liability for relying thereon. Each Agent may consult with legal counsel (who may be

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counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

Each Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by it. Each Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of each Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the Loans as well as activities as Agent.

Subject to the appointment and acceptance of a successor Agent as provided below, either Agent may (i) resign at any time by notifying the Lenders and the Borrower or (ii) be removed by a Supermajority of Lenders by notifying the Agents, the Lenders and the Borrower. Upon any such resignation or removal, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation or a Supermajority of Lenders give notice of removal of an Agent, as the case may be, then the retiring or departing Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance by a successor Agent of its appointment as Agent hereunder, such successor shall succeed to and become vested with all the rights, powers, privileges and duties (including those under the Intercreditor Agreement) of the retiring or removed Agent (as the case may be), and the retiring or removed Agent (as the case may be) shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After an Agent’s resignation or removal hereunder, the provisions of this Article and Section 9.05 shall continue in effect for the benefit of such retiring Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while acting as Agent. It is understood and agreed that no Competitor shall qualify or be appointed as a successor Agent hereunder or under any other Loan Document.

Each Lender acknowledges that it has, independently and without reliance upon the Agents or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agents or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement or any other Loan Document, any related agreement or any document furnished hereunder or thereunder.

Each Lender hereby consents to and approves each and all of the provisions of the Intercreditor Agreement, including the purchase rights set forth in Section 3.01(d)

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thereof, and irrevocably authorizes and directs the Administrative Agent and Collateral Agent to execute and deliver the Intercreditor Agreement and to exercise and enforce its rights and remedies and perform its obligations thereunder.

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices. Notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by fax, as follows:

(a) if to the Borrower or Holdings, to it at 7037 Old Madison Pike, Huntsville, Alabama 35806, Attention of Richard E. Fish, Jr. (Fax No. (256) 382-3935), with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036, Attention: Peter J. Neckles (Fax No. (212) 735-2000);

(b) if to the Administrative Agent, to Credit Suisse, Eleven Madison Avenue, New York, NY 10010, Attention of Agency Group (Fax No. (212) 325-8304); and

(c) if to a Lender, to it at its address (or fax number) set forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to which such Lender shall have become a party hereto.

All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by fax or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 9.01 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 9.01. As agreed to among Holdings, the Borrower, the Administrative Agent and the applicable Lenders from time to time, notices and other communications may also be delivered by e-mail to the e-mail address of a representative of the applicable person provided from time to time by such person.

SECTION 9.02. Survival of Agreement. All covenants, agreements, representations and warranties made by the Borrower or Holdings herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lenders and shall survive the making by the Lenders of the Loans, regardless of any investigation made by the Lenders or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid and so long as the Commitments have not been terminated. The provisions of Sections 2.14, 2.16, 2.20, 9.05 and 9.18 shall remain operative and in full force and effect regardless of the expiration of the term of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the expiration of

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the Commitments, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Administrative Agent, the Collateral Agent or any Lender.

SECTION 9.03. Binding Effect. This Agreement shall become effective when it shall have been executed by the Borrower, Holdings and the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto.

SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of the Borrower, Holdings, the Administrative Agent, the Collateral Agent or the Lenders that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

(b) Each Lender may assign to one or more Eligible Assignees all or a portion of its interests, rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it), with notice to the Borrower and the prior written consent of the Administrative Agent (not to be unreasonably withheld or delayed); provided, however, that (i) the aggregate amount of the Commitment or Loans of the assigning Lender and its concurrently assigning Affiliates subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall be not less than, $1,000,000 (or, if less, the entire remaining amount of such Lender’s Commitment or Loans of the relevant Class), (ii) the parties to each such assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance via an electronic settlement system acceptable to the Administrative Agent (or, if previously agreed with the Administrative Agent, manually), and shall pay to the Administrative Agent a processing and recordation fee of $3,500 (which fee may be waived or reduced in the sole discretion of the Administrative Agent), and (iii) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and all applicable tax forms. Upon acceptance and recording pursuant to paragraph (e) of this Section 9.04, from and after the effective date specified in each Assignment and Acceptance, (A) the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement and (B) the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.14, 2.16, 2.20 and 9.05, as well as to any Fees accrued for its account and not yet paid).

(c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such assigning Lender

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warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and that its Commitment, and the outstanding balances of its Loans, in each case without giving effect to assignments thereof which have not become effective, are as set forth in such Assignment and Acceptance, (ii) except as set forth in (i) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto, or the financial condition of the Borrower or any Subsidiary or the performance or observance by the Borrower or any Subsidiary of any of its obligations under this Agreement, any other Loan Document or any other instrument or document furnished pursuant hereto; (iii) such assignee represents and warrants that it is an Eligible Assignee and is legally authorized to enter into such Assignment and Acceptance; (iv) such assignee confirms that it has received a copy of this Agreement, together with copies of the most recent financial statements referred to in Section 3.05(a) or delivered pursuant to Section 5.04, the Intercreditor Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (v) such assignee will independently and without reliance upon the Administrative Agent, the Collateral Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (vi) such assignee agrees to be bound by the terms of the Intercreditor Agreement; (vii) such assignee appoints and authorizes the Administrative Agent and the Collateral Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative Agent and the Collateral Agent, respectively, by the terms hereof, together with such powers as are reasonably incidental thereto; and (viii) such assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

(d) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in The City of New York a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive and the Borrower, the Administrative Agent, the Collateral Agent and the Lenders may treat each person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Collateral Agent and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(e) Upon its receipt of, and consent to, a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, an Administrative Questionnaire completed in respect of the assignee (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) above,

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if applicable, and the written consent of the Administrative Agent to such assignment and any applicable tax forms, the Administrative Agent shall promptly (i) accept such Assignment and Acceptance and (ii) record the information contained therein in the Register. No assignment shall be effective unless it has been recorded in the Register as provided in this paragraph (e).

(f) Each Lender may without the consent of the Borrower or the Administrative Agent sell participations to one or more banks or other persons (provided that unless an Event of Default has occurred and is continuing for no less than ninety days, no Lender may sell a participation to a Competitor) in all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided, however, that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the participating banks or other persons shall be entitled to the benefit of the cost protection provisions contained in Sections 2.14, 2.16 and 2.20 to the same extent as if they were Lenders (but, with respect to any particular participant, to no greater extent than the Lender that sold the participation to such participant) and (iv) the Borrower, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and such Lender shall retain the sole right to enforce the obligations of the Borrower relating to the Loans and to approve any amendment, modification or waiver of any provision of this Agreement (other than amendments, modifications or waivers decreasing any fees payable to such participating bank or person hereunder or the amount of principal of or the rate at which interest is payable on the Loans in which such participating bank or person has an interest, extending any scheduled principal payment date or date fixed for the payment of interest on the Loans in which such participating bank or person has an interest, increasing or extending the Commitments in which such participating bank or person has an interest or releasing any Guarantor (other than in connection with the sale of such Guarantor in a transaction permitted by Section 6.05) or all or substantially all of the Collateral).

(g) Any Lender or participant may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 9.04, disclose to the assignee or participant or proposed assignee or participant any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure of information, each such assignee or participant or proposed assignee or participant shall execute an agreement whereby such assignee or participant shall agree (subject to customary exceptions) to preserve the confidentiality of such confidential information on terms no less restrictive than those applicable to the Lenders pursuant to Section 9.16.

(h) Any Lender may at any time assign all or any portion of its rights under this Agreement to secure extensions of credit to such Lender or in support of obligations owed by such Lender; provided that no such assignment shall release a Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto.

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(i) Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Loan and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Lender). In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof. In addition, notwithstanding anything to the contrary contained in this Section 9.04, any SPC may (i) with notice to, but without the prior written consent of, the Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Loans to the Granting Lender or to any financial institutions (consented to by the Borrower and Administrative Agent) providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Loans and (ii) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC.

(j) Neither Holdings nor the Borrower shall assign or delegate any of its rights or duties hereunder without the prior written consent of the Administrative Agent and each Lender, and any attempted assignment without such consent shall be null and void.

SECTION 9.05. Expenses; Indemnity. (a) The Borrower and Holdings agree, jointly and severally, to pay all actual reasonable and documented out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent and Tennenbaum Capital Partners, LLC and its Affiliates in connection with the preparation and administration of this Agreement and the other Loan Documents or in connection with any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions hereby or thereby contemplated shall be consummated) or incurred by the Administrative Agent, the Collateral Agent or any Lender in connection with the enforcement or protection of its rights in connection with this Agreement and the other Loan Documents or in connection with the Loans made hereunder, including the reasonable and documented fees, charges and disbursements of Cravath, Swaine & Moore LLP, counsel for the Administrative Agent and the Collateral Agent and the reasonable and documented fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy LLP, counsel for the Lenders affiliated with Tennenbaum Capital Partners ,

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and, in connection with any such enforcement or protection, the reasonable and documented fees, charges and disbursements of any other counsel for the Administrative Agent, the Collateral Agent or any Lender; provided that such fees, charges and disbursements shall be limited to one external counsel (and appropriate local counsel) for all such persons unless there are actual or potential conflicting interests between or among such persons arising out of the matters within the scope of this Section 9.05(a); provided further that such external counsel (and appropriate local counsel) shall be chosen by the Administrative Agent with consent from or at the direction of the Required Lenders.

(b) The Borrower and Holdings agree, jointly and severally, to indemnify the Administrative Agent, the Collateral Agent, each Lender and each Related Party of any of the foregoing persons (each such person being called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable and documented counsel fees, charges and disbursements (subject to the limitations set forth in Section 9.05(a) above), incurred by or asserted against any Indemnitee arising out of, in any way connected with, or as a result of (i) the execution or delivery of this Agreement or any other Loan Document or any agreement or instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder or the consummation of the Transactions and the other transactions contemplated thereby, (ii) the use of the proceeds of the Loans, (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto (and regardless of whether such matter is initiated by a third party or by the Borrower, any other Loan Party or any of their respective Affiliates), or (iv) any actual or alleged presence or Release of Hazardous Materials on any property currently or formerly owned or operated by the Borrower or any of the Subsidiaries, or any Environmental Liability related in any way to the Borrower or the Subsidiaries; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or wilful misconduct of such Indemnitee.

(c) To the extent that Holdings and the Borrower fail to pay any amount required to be paid by them to the Administrative Agent or the Collateral Agent under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent or the Collateral Agent, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or the Collateral Agent in its capacity as such. For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the sum of the outstanding Loans and unused Commitments at the time.

(d) To the extent permitted by applicable law, neither Holdings nor the Borrower shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or

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actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof.

(e) All amounts due under this Section 9.05 shall be payable on written demand therefor.

SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender is hereby authorized at any time and from time to time, except to the extent prohibited by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of the Borrower or Holdings against any of and all the obligations of the Borrower or Holdings now or hereafter existing under this Agreement and other Loan Documents held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or such other Loan Document and although such obligations may be unmatured. The rights of each Lender under this Section 9.06 are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the Administrative Agent, the Collateral Agent or any Lender in exercising any power or right hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Collateral Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Borrower or any other Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on the Borrower or Holdings in any case shall entitle the Borrower or Holdings to any other or further notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof nor any other Loan Document or any provision thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower, Holdings and the Required Lenders; provided, however, that no such agreement shall (i) decrease the principal amount of, or extend the maturity of or date for the payment of any interest on any Loan, or waive or excuse any such payment or any part thereof, decrease the rate of interest on any Loan, or waive or excuse the payment of (or extend the date of payment

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of) any prepayment fee, or reduce the amount thereof, without the prior written consent of each Lender directly adversely affected thereby (provided that, for the avoidance of doubt, the Required Lenders may waive any prepayment, and the Required Lenders, the Borrower and Holdings may amend or modify any prepayment provisions), (ii) increase or extend the Commitment of any Lender without the prior written consent of such Lender, (iii) amend or modify the pro rata requirements of Section 2.17, the provisions of Section 9.04(j) or the provisions of this Section or release any Guarantor (other than in connection with the sale, disposition, liquidation or dissolution of such Guarantor in a transaction permitted by Section 6.05) or all or substantially all of the Collateral, without the prior written consent of each Lender, (iv) modify the protections afforded to an SPC pursuant to the provisions of Section 9.04(i) without the written consent of such SPC or (v) reduce the percentage contained in the definition of the term “Required Lenders” without the prior written consent of each Lender (it being understood that with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the Commitments on the date hereof); provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Collateral Agent hereunder or under any other Loan Document without the prior written consent of the Administrative Agent or the Collateral Agent.

SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 9.09 shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and the other Loan Documents constitute the entire contract between the parties relative to the subject matter hereof. Any other previous agreement among the parties with respect to the subject matter hereof is superseded by this Agreement and the other Loan Documents. Nothing in this Agreement or in the other Loan Documents, expressed or implied, is intended to confer upon any person (other than the parties hereto and thereto, their respective successors and assigns permitted hereunder and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Collateral Agent and the Lenders) any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Loan Documents.

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SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

SECTION 9.12. Severability. In the event any one or more of the provisions contained in this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 9.13. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract, and shall become effective as provided in Section 9.03. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.

SECTION 9.14. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each of Holdings and the Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive 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 Agreement or the other Loan Documents, 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 heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees

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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 Agreement shall affect any right that the Administrative Agent, the Collateral Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or the other Loan Documents against the Borrower, Holdings or their respective properties in the courts of any jurisdiction.

(b) Each of Holdings and the Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Loan Documents in any New York State or Federal court. Each of the parties hereto 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.

(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 9.16. Confidentiality. Each of the Administrative Agent, the Collateral Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed only in connection with this Agreement and the Transactions, and further, only (a) to its and its Affiliates’ officers, directors, employees and agents, including accountants, legal counsel and other advisors (it being understood that the persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority or quasi-regulatory authority (such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process (provided that notice of receipt of such subpoena or other legal process shall be given to the Borrower as promptly as practicable), (d) in connection with the exercise of any remedies hereunder or under the other Loan Documents or any suit, action or proceeding relating to the enforcement of its rights hereunder or thereunder, (e) subject to an agreement containing provisions substantially the same as those of this Section 9.16, to (i) any actual or prospective assignee of or participant in any of its rights or obligations under this Agreement and the other Loan Documents or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower or any Subsidiary or any of their respective obligations, (f) with the consent of the Borrower in its sole discretion or (g) to the extent such Information becomes publicly available other than as a result of a breach of this Section 9.16. For the purposes of this Section, “Information” shall mean all information received from the Borrower, Holdings or any Subsidiary and related to the Borrower, Holdings or any Subsidiary, or their respective business, other than any such information that was available to the Administrative Agent, the Collateral Agent or any Lender on a nonconfidential basis prior to its disclosure by the Borrower or Holdings; provided that, in the case of Information received from the Borrower, Holdings or any Subsidiary after the date

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hereof, such information is clearly identified at the time of delivery as confidential. Any person required to maintain the confidentiality of Information as provided in this Section 9.16 shall be considered to have complied with its obligation to do so if such person has exercised the same degree of care to maintain the confidentiality of such Information as such person would accord its own confidential information.

SECTION 9.17. USA PATRIOT Act Notice. Each Lender and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Holdings and the Borrower that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies Holdings and the Borrower, which information includes the name and address of Holdings and the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify Holdings and the Borrower in accordance with the USA PATRIOT Act.

SECTION 9.18. Intercreditor Agreement. Reference is made to the Intercreditor Agreement of even date herewith (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among the Borrower, Holdings, the Subsidiaries of Holdings party thereto, Credit Suisse, as First Lien Collateral Agent (as defined therein), and Credit Suisse, as Second Lien Collateral Agent (as defined therein). Each Lender hereunder (a) acknowledges that it has received a copy of the Intercreditor Agreement, (b) consents to the subordination of Liens provided for in the Intercreditor Agreement, (c) agrees that it will be bound by and will take no actions contrary to the provisions of the Intercreditor Agreement and (d) authorizes and instructs the Collateral Agent to enter into the Intercreditor Agreement as Collateral Agent and on behalf of such Lender. The foregoing provisions are intended as an inducement to the lenders under the First Lien Credit Agreement to extend credit to the Borrower and such lenders are intended third party beneficiaries of such provisions.

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

INTERSTATE FIBERNET, INC.,
by	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Sr. Vice President
ITC^ DELTACOM, INC.,
by	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Sr. Vice President

CREDIT SUISSE, CAYMAN ISLANDS BRANCH, individually and as Administrative Agent and Collateral Agent
By	/s/ James Moran
Name:	James Morgan
Title:	Managing Director
By	/s/ Nupur Kumar
Name:	Nupur Kumar
Title:	Associate

SPECIAL VALUE OPPORTUNITIES FUND, LLC
By:	Tennenbaum Capital Partners, LLC
Its:	Investment Manager
By:	/s/ Howard M. Levkowitz
	Howard M. Levkowitz
	Managing Partner
SPECIAL VALUE EXPANSION FUND, LLC
By:	Tennenbaum Capital Partners, LLC
Its:	Investment Manager
By:	/s/ Howard M. Levkowitz
	Howard M. Levkowitz
	Managing Partner
SPECIAL VALUE CONTINUATION PARTNERS, LP
By:	Tennenbaum Capital Partners, LLC
Its:	Investment Manager
By:	/s/ Howard M. Levkowitz
	Howard M. Levkowitz
	Managing Partner
TENNENBAUM OPPORTUNITIES PARTNERS V, LP
By:	Tennenbaum Capital Partners, LLC
Its:	Investment Manager
By:	/s/ Howard M. Levkowitz
	Howard M. Levkowitz
	Managing Partner

EX-10.4

Exhibit 10.4

SECOND LIEN GUARANTEE AND COLLATERAL AGREEMENT

dated as of

July 31, 2007

among

INTERSTATE FIBERNET, INC.,

ITC^DELTACOM, INC.,

the Subsidiaries of Holdings

from time to time party hereto

and

CREDIT SUISSE,

as Collateral Agent

THIS IS THE SECOND LIEN GUARANTEE AND COLLATERAL AGREEMENT REFERRED TO IN (A) THE FIRST LIEN GUARANTEE AND COLLATERAL AGREEMENT OF EVEN DATE HEREWITH AMONG INTERSTATE FIBERNET, INC., ITC^DELTACOM, INC., THE SUBSIDIARIES OF HOLDINGS FROM TIME TO TIME PARTY THERETO AND CREDIT SUISSE, AS FIRST LIEN COLLATERAL AGENT, (B) THE INTERCREDITOR AGREEMENT OF EVEN DATE HEREWITH AMONG INTERSTATE FIBERNET, INC., ITC^DELTACOM, INC., THE SUBSIDIARIES OF HOLDINGS FROM TIME TO TIME PARTY THERETO AND CREDIT SUISSE, AS FIRST LIEN COLLATERAL AGENT AND AS SECOND LIEN COLLATERAL AGENT, AND (C) THE OTHER SECURITY DOCUMENTS REFERRED TO IN THE CREDIT AGREEMENTS REFERRED TO HEREIN.

TABLE OF CONTENTS

		Page
ARTICLE I
Definitions
SECTION 1.01.	Second Lien Credit Agreement	2
SECTION 1.02.	Other Defined Terms	2
ARTICLE II
Guarantee
SECTION 2.01.	Guarantee	7
SECTION 2.02.	Guarantee of Payment	7
SECTION 2.03.	No Limitations, Etc	7
SECTION 2.04.	Reinstatement	8
SECTION 2.05.	Agreement To Pay; Subrogation	8
SECTION 2.06.	Information	8
ARTICLE III
Pledge of Securities
SECTION 3.01.	Pledge	9
SECTION 3.02.	Delivery of the Pledged Collateral	10
SECTION 3.03.	Representations, Warranties and Covenants	10
SECTION 3.04.	Certification of Limited Liability Company Interests and Limited Partnership Interests	12
SECTION 3.05.	Registration in Nominee Name; Denominations	12
SECTION 3.06.	Voting Rights; Dividends and Interest, Etc	12
ARTICLE IV
Security Interests in Personal Property
SECTION 4.01.	Security Interest	14
SECTION 4.02.	Representations and Warranties	16
SECTION 4.03.	Covenants	17
SECTION 4.04.	Other Actions	19
SECTION 4.05.	Covenants Regarding Patent, Trademark and Copyright Collateral	22

TABLE OF CONTENTS

(continued)

ARTICLE V
Remedies
SECTION 5.01.	Remedies Upon Default	24
SECTION 5.02.	Application of Proceeds	26
SECTION 5.03.	Grant of License to Use Intellectual Property	27
SECTION 5.04.	Securities Act, Etc	27
ARTICLE VI
Indemnity, Subrogation and Subordination
SECTION 6.01.	Indemnity and Subrogation	28
SECTION 6.02.	Contribution and Subrogation	28
SECTION 6.03.	Subordination	28
ARTICLE VII
Miscellaneous
SECTION 7.01.	Notices	29
SECTION 7.02.	Security Interest Absolute	29
SECTION 7.03.	Survival of Agreement	29
SECTION 7.04.	Binding Effect; Several Agreement	29
SECTION 7.05.	Successors and Assigns	30
SECTION 7.06.	Collateral Agent’s Fees and Expenses; Indemnification	30
SECTION 7.07.	Collateral Agent Appointed Attorney-in-Fact	31
SECTION 7.08.	Applicable Law	32
SECTION 7.09.	Waivers; Amendment	32
SECTION 7.10.	WAIVER OF JURY TRIAL	32
SECTION 7.11.	Severability	33
SECTION 7.12.	Counterparts	33
SECTION 7.13.	Headings	33
SECTION 7.14.	Jurisdiction; Consent to Service of Process	33
SECTION 7.15.	Termination or Release	34
SECTION 7.16.	Additional Subsidiaries	34
SECTION 7.17.	Right of Setoff	35
SECTION 7.18.	Intercreditor Agreement Governs	35
SECTION 7.19.	Obligations of Grantors	35
SECTION 7.20.	Delivery of Collateral	35

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TABLE OF CONTENTS

(continued)

Schedules
Schedule I	Subsidiary Guarantors
Schedule II	Equity Interests; Pledged Debt Securities
Schedule III	Intellectual Property
Exhibits
Exhibit A	Form of Supplement
Exhibit B	Form of Perfection Certificate

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SECOND LIEN GUARANTEE AND COLLATERAL AGREEMENT dated as of July 31, 2007 (this “Agreement”), among INTERSTATE FIBERNET, INC., a Delaware corporation (the “Borrower”), ITC^DELTACOM, INC., a Delaware corporation (“Holdings”), the Subsidiaries of Holdings from time to time party hereto and CREDIT SUISSE (“Credit Suisse”), as second lien collateral agent (in such capacity, the “Collateral Agent”).

PRELIMINARY STATEMENT

Reference is made to (a) the Second Lien Credit Agreement dated as of July 31, 2007 (as amended, supplemented or otherwise modified from time to time, the “Second Lien Credit Agreement”), among the Borrower, Holdings, the lenders from time to time party thereto (the “Lenders”) and Credit Suisse, as administrative agent (in such capacity, the “Administrative Agent”), (b) the First Lien Credit Agreement dated as of July 31, 2007 (as amended, supplemented or otherwise modified from time to time, the “First Lien Credit Agreement”), among the Borrower, Holdings, the lenders from time to time party thereto and Credit Suisse, as administrative agent, (c) the First Lien Guarantee and Collateral Agreement dated as of July 31, 2007 (as amended, supplemented or otherwise modified from time to time, the “First Lien Guarantee and Collateral Agreement”), among the Borrower, Holdings, the Subsidiaries of Holdings from time to time party thereto and Credit Suisse, as first lien collateral agent (in such capacity, the “First Lien Collateral Agent”), and (d) the Intercreditor Agreement dated as of July 31, 2007 (as amended, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among the Borrower, Holdings, the Subsidiaries of Holdings from time to time party thereto and Credit Suisse, in its capacities as the Collateral Agent and as the First Lien Collateral Agent.

The Lenders have agreed to make loans to the Borrower pursuant to, and upon the terms and conditions specified in, the Second Lien Credit Agreement. The obligations of the Lenders to make such loans to the Borrower are conditioned upon, among other things, the execution and delivery of this Agreement by the Borrower and each Guarantor (such term and each other capitalized term used but not defined in this preliminary statement having the meaning given or ascribed to it in Article I). Each Guarantor is an affiliate of the Borrower, will derive substantial benefits from the making of loans to the Borrower pursuant to the Second Lien Credit Agreement and is willing to execute and deliver this Agreement in order to induce the Lenders to make such loans. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Second Lien Credit Agreement. (a) Capitalized terms used in this Agreement and not otherwise defined herein have the meanings set forth in the Second Lien Credit Agreement. All capitalized terms defined in the New York UCC (as such term is defined herein) and not defined in this Agreement or the Second Lien Credit Agreement have the meanings specified therein. All references to the Uniform Commercial Code shall mean the New York UCC.

(b) The rules of construction specified in Section 1.02 of the Second Lien Credit Agreement also apply to this Agreement.

SECTION 1.02. Other Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“Accounts Receivable” shall mean all Accounts and all right, title and interest in any returned goods, together with all rights, titles, securities and guarantees with respect thereto, including any rights to stoppage in transit, replevin, reclamation and resales, and all related security interests, liens and pledges, whether voluntary or involuntary, in each case whether now existing or owned or hereafter arising or acquired.

“Administrative Agent” shall have the meaning assigned to such term in the preliminary statement.

“Article 9 Collateral” shall have the meaning assigned to such term in Section 4.01.

“Borrower” shall have the meaning assigned to such term in the preamble.

“Collateral” shall mean the Article 9 Collateral and the Pledged Collateral.

“Collateral Agent” shall have the meaning assigned to such term in the preamble.

“Copyright License” shall mean any written agreement, now or hereafter in effect, granting any right to any third person under any copyright now or hereafter owned by any Grantor or that such Grantor otherwise has the right to license, or granting any right to any Grantor under any copyright now or hereafter owned by any third person, and all rights of such Grantor under any such agreement.

“Copyrights” shall mean all of the following now owned or hereafter acquired by any Grantor: (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, recordings,

2

supplemental registrations and pending applications for registration in the United States Copyright Office (or any successor office or any similar office in any other country), including those listed on Schedule III.

“Discharge of First Lien Obligations” shall have the meaning assigned to such term in the Intercreditor Agreement.

“Excluded Collateral” shall mean (a) any lease, license, contract, Instrument, Security, permit, property rights, franchise or agreement to which any Grantor is a party or any of its rights or interests thereunder if and for so long as the grant of a security interest under this Agreement shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of any Grantor therein or (ii) in a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract, Instrument, Security, permit, property rights, franchise or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity); provided, however, that such security interest shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and to the extent severable, shall attach immediately to any portion of such lease, license, contract, Instrument, Security, permit, property rights, franchise or agreement that does not result in any of the consequences specified in (i) or (ii) above, (b) any Equipment owned by any Grantor that is subject to a purchase money security interest (as defined in Section 9-103 of the UCC), (c) outstanding voting equity or other ownership interests of a Foreign Entity (as defined below) to the extent in excess of 65% of the voting power of all classes of equity or other ownership interests of such Foreign Entity entitled to vote, (d) the Southern Assets and (e) any Trademark applications filed in the United States Patent and Trademark Office on the basis of any Grantor’s “intent to use” such Trademark, unless and until acceptable evidence of use of the Trademark has been filed with the United States Patent and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. 1051, et seq.), to the extent that granting a security interest in such Trademark application prior to such filing would adversely affect the enforceability or validity of such Trademark application.

“Federal Securities Laws” shall have the meaning assigned to such term in Section 5.04.

“First Lien Collateral Agent” shall have the meaning assigned to such term in the preliminary statement.

“First Lien Credit Agreement” shall have the meaning assigned to such term in the preliminary statement.

“First Lien Guarantee and Collateral Agreement” shall have the meaning assigned to such term in the preliminary statement.

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“First Lien Loan Documents” shall have the meaning assigned to the term “Loan Documents” in the First Lien Credit Agreement.

“First Priority Liens” shall have the meaning assigned to such term in the Intercreditor Agreement.

“Foreign Entity” shall mean, with respect to any Grantor, any corporation, partnership, limited liability company or other business entity (i) which is organized under the laws of a jurisdiction other than a state of the United States or the District of Columbia and (ii) of which securities or other ownership interests representing more than 50% of the equity, more than 50% of the ordinary voting power, more than 50% of the general partnership interests or more than 50% of the limited liability company membership interests are, at the time of any determination is being made, owned directly by the Grantor.

“General Intangibles” shall mean all “general intangibles” (as such term is defined in the New York UCC), including all choses in action and causes of action and all other intangible personal property of any Grantor of every kind and nature (other than Accounts) now owned or hereafter acquired by any Grantor, including all rights and interests in partnerships, limited partnerships, limited liability companies and other unincorporated entities, corporate or other business records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Swap Agreements and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund claims and any letter of credit, guarantee, claim, security interest or other security held by or granted to any Grantor to secure payment by an Account Debtor of any of the Accounts.

“Grantors” shall mean the Borrower and the Guarantors.

“Guarantors” shall mean Holdings and the Subsidiary Guarantors.

“Holdings” shall have the meaning assigned to such term in the preamble.

“Intellectual Property” shall mean all intellectual and similar property of any Grantor of every kind and nature now owned or hereafter acquired by any Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary technical and business information, know-how, show-how or other data or information, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing.

“Intercreditor Agreement” shall have the meaning assigned to such term in the preliminary statement.

“License” shall mean any Patent License, Trademark License, Copyright License or other license or sublicense agreement relating to Intellectual Property to which any Grantor is a party, including those listed on Schedule III.

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“Loans Documents” shall have the meaning assigned to the term “Loan Documents” in the Second Lien Credit Agreement.

“New York UCC” shall mean the Uniform Commercial Code as from time to time in effect in the State of New York.

“Obligations” shall mean (a) the due and punctual payment of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations of the Borrower to any of the Secured Parties under the Second Lien Credit Agreement and each of the other Loan Documents, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), (b) the due and punctual performance of all other obligations of the Borrower under or pursuant to the Second Lien Credit Agreement and each of the other Loan Documents, and (c) the due and punctual payment and performance of all the obligations of each other Loan Party under or pursuant to this Agreement and each of the other Loan Documents.

“Patent License” shall mean any written agreement, now or hereafter in effect, granting to any third person any right to make, use or sell any invention on which a patent, now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, is in existence, or granting to any Grantor any right to make, use or sell any invention on which a patent, now or hereafter owned by any third person, is in existence, and all rights of any Grantor under any such agreement.

“Patents” shall mean all of the following now owned or hereafter acquired by any Grantor: (a) all letters patent of the United States or the equivalent thereof in any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or the equivalent thereof in any other country, including registrations, recordings and pending applications in the United States Patent and Trademark Office (or any successor or any similar offices in any other country), including those listed on Schedule III, and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein.

“Perfection Certificate” shall mean a certificate substantially in the form of Exhibit B, completed and supplemented with the schedules and attachments contemplated thereby, and duly executed by a Responsible Officer of the Borrower.

“Pledged Collateral” shall have the meaning assigned to such term in Section 3.01.

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“Pledged Debt Securities” shall have the meaning assigned to such term in Section 3.01.

“Pledged Securities” shall mean any promissory notes, stock certificates or other securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.

“Pledged Stock” shall have the meaning assigned to such term in Section 3.01.

“Second Lien Credit Agreement” shall have the meaning assigned to such term in the preliminary statement.

“Secured Parties” shall mean (a) the Lenders, (b) the Administrative Agent, (c) the Collateral Agent, (d) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document and (e) the successors and assigns of each of the foregoing.

“Security Interest” shall have the meaning assigned to such term in Section 4.01.

“Southern Assets” shall mean the assets identified on Schedule 1.01(d) to the First Lien Credit Agreement.

“Subsidiary Guarantor” shall mean (a) the Subsidiaries identified on Schedule I hereto as Subsidiary Guarantors and (b) each other Subsidiary that becomes a party to this Agreement as a Subsidiary Guarantor after the Closing Date.

“Trademark License” shall mean any written agreement, now or hereafter in effect, granting to any third person any right to use any trademark now or hereafter owned by any Grantor or that any Grantor otherwise has the right to license, or granting to any Grantor any right to use any trademark now or hereafter owned by any third person, and all rights of any Grantor under any such agreement.

“Trademarks” shall mean all of the following now owned or hereafter acquired by any Grantor: (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office (or any successor office) or any similar offices in any State of the United States or any other country or any political subdivision thereof, and all extensions or renewals thereof, including those listed on Schedule III, (b) all goodwill associated therewith or symbolized thereby and (c) all other assets, rights and interests that uniquely reflect or embody such goodwill.

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ARTICLE II

Guarantee

SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Obligations. Each Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Obligation. Each Guarantor waives presentment to, demand of payment from and protest to the Borrower or any other Loan Party of any Obligation, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment.

SECTION 2.02. Guarantee of Payment. Each Guarantor further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Collateral Agent or any other Secured Party to any security held for the payment of the Obligations or to any balance of any Deposit Account or credit on the books of the Collateral Agent or any other Secured Party in favor of the Borrower or any other person.

SECTION 2.03. No Limitations, Etc. (a) Except for termination of a Guarantor’s obligations hereunder as expressly provided in Section 7.15, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Collateral Agent or any other Secured Party to assert any claim or demand or to enforce any right or remedy under the provisions of any Loan Document or otherwise, (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Loan Document or any other agreement, including with respect to any other Guarantor under this Agreement, (iii) the release of, or any impairment of or failure to perfect any Lien on or security interest in, any security held by the Collateral Agent or any other Secured Party for the Obligations or any of them, (iv) any default, failure or delay, wilful or otherwise, in the performance of the Obligations, or (v) any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Obligations). Each Guarantor expressly authorizes the Collateral Agent to take and hold security for the payment and performance of the Obligations, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in its sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Obligations, all without affecting the obligations of any Guarantor hereunder.

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(b) To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of the Borrower or any other Loan Party or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower or any other Loan Party, other than the indefeasible payment in full in cash of all the Obligations. Upon the occurrence and during the continuation of an Event of Default, the Collateral Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with the Borrower or any other Loan Party or exercise any other right or remedy available to them against the Borrower or any other Loan Party, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Obligations have been fully and indefeasibly paid in full in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other Loan Party, as the case may be, or any security.

SECTION 2.04. Reinstatement. Each Guarantor agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by the Collateral Agent or any other Secured Party upon the bankruptcy or reorganization of the Borrower, any other Loan Party or otherwise pursuant to applicable law.

SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and not in limitation of any other right that the Collateral Agent or any other Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan Party to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Collateral Agent for distribution to the applicable Secured Parties in cash the amount of such unpaid Obligation. Upon payment by any Guarantor of any sums to the Collateral Agent as provided above, all rights of such Guarantor against the Borrower or any other Guarantor arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subject to Article VI.

SECTION 2.06. Information. Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s and each other Loan Party’s financial condition and assets and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that neither the Collateral Agent nor any other Secured Party will have any duty to advise such Guarantor of information known to it or any of them regarding such circumstances or risks.

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ARTICLE III

Pledge of Securities

SECTION 3.01. Pledge. As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest in, all of such Grantor’s right, title and interest in, to and under:

(a) (i) the Equity Interests owned by such Grantor on the date hereof (including all such Equity Interests listed on Schedule II), (ii) any other Equity Interests obtained in the future by such Grantor and (iii) the certificates representing all such Equity Interests, if any (all the foregoing collectively referred to herein as the “Pledged Stock”);

(b) (i) the debt securities held by such Grantor on the date hereof (including all such debt securities listed opposite the name of such Grantor on Schedule II), (ii) any debt securities in the future issued to such Grantor and (iii) the promissory notes and any other instruments evidencing such debt securities (all the foregoing collectively referred to herein as the “Pledged Debt Securities”);

(c) subject to Section 3.06, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in clauses (a) and (b) above;

(d) subject to Section 3.06, all rights and privileges of such Grantor with respect to the securities and other property referred to in clauses (a), (b), and (c) above; and

(e) all Proceeds of any of the foregoing (the items referred to in clauses (a) through (e) above being collectively referred to as the “Pledged Collateral”);

provided, however, that notwithstanding any of the other provisions set forth in this Section 2, in no event shall the security interest granted under this Section 2 attach to any Excluded Collateral.

TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, as long as the Obligations remain outstanding; subject, however, to the terms, covenants and conditions hereinafter set forth.

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SECTION 3.02. Delivery of the Pledged Collateral. (a) Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent (or, prior to the Discharge of First Lien Obligations, to the First Lien Collateral Agent, acting as a gratuitous bailee of the Collateral Agent) any and all certificates, instruments or other documents representing or evidencing Pledged Securities issued by a Subsidiary and Pledged Securities having an individual value in excess of $250,000.

(b) Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent (or, prior to the Discharge of First Lien Obligations, to the First Lien Collateral Agent, acting as a gratuitous bailee of the Collateral Agent) any and all Pledged Debt Securities issued by a Subsidiary and Pledged Debt Securities having an individual value in excess of $250,000.

(c) Upon delivery to the Collateral Agent (or, prior to the Discharge of First Lien Obligations, to the First Lien Collateral Agent, acting as a gratuitous bailee of the Collateral Agent), (i) any certificate, instrument or document representing or evidencing Pledged Securities shall be accompanied by undated stock powers duly executed in blank or other undated instruments of transfer reasonably satisfactory to the Collateral Agent and duly executed in blank and by such other instruments and documents as the Collateral Agent may reasonably request and (ii) all other property comprising part of the Pledged Collateral shall be accompanied by proper instruments of assignment duly executed by the applicable Grantor. Each delivery of Pledged Securities shall be accompanied by a schedule describing the applicable securities, which schedule shall be attached hereto as Schedule II and made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity of the pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.

(d) In accordance with the terms of the Intercreditor Agreement, all Pledged Collateral delivered to the First Lien Collateral Agent shall be held by the First Lien Collateral Agent as gratuitous bailee for the Secured Parties (as defined in the Intercreditor Agreement) solely for the purpose of perfecting the security interest therein granted under this Agreement.

SECTION 3.03. Representations, Warranties and Covenants. The Grantors jointly and severally represent, warrant and covenant to and with the Collateral Agent, for the benefit of the Secured Parties, that:

(a) As of the Closing Date, Schedule II correctly sets forth the percentage of the issued and outstanding shares of each class of the Equity Interests of the issuer thereof represented by such Pledged Stock and includes all Equity Interests, debt securities and promissory notes required to be delivered hereunder;

(b) the Pledged Stock and Pledged Debt Securities in each case issued by any Subsidiary have been duly and validly authorized and issued by the issuers thereof and (i) in the case of Pledged Stock, are fully paid and nonassessable and (ii) in the case of Pledged Debt Securities, are legal, valid and binding obligations of the issuers thereof;

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(c) except for the security interests granted hereunder and under the First Lien Guarantee and Collateral Agreement (or otherwise permitted under the Second Lien Credit Agreement), each Grantor (i) is and, subject to any transfers made in compliance with the Second Lien Credit Agreement, will continue to be the direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule II as owned by such Grantor, (ii) holds the same free and clear of all Liens except for Liens permitted pursuant to Section 6.02 of the Second Lien Credit Agreement, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral required to be delivered hereunder, other than transfers made in compliance with the First Lien Credit Agreement (until Discharge of First Lien Obligations) and the Second Lien Credit Agreement, and (iv) subject to Section 3.06, will cause any and all Pledged Collateral required to be delivered hereunder, whether for value paid by such Grantor or otherwise, to be forthwith deposited with the Collateral Agent and pledged or assigned hereunder;

(d) except for restrictions and limitations imposed by the Loan Documents, the First Lien Loan Documents or securities laws or other applicable laws generally, the Pledged Collateral is and will continue to be freely transferable and assignable, and none of the Pledged Collateral required to be pledged hereunder is or will be subject to any option, right of first refusal, shareholders agreement, charter or by-law provisions or contractual restriction of any nature that might prohibit, impair, delay or otherwise affect the pledge of such Pledged Collateral required to be pledged hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Collateral Agent of rights and remedies hereunder;

(e) each Grantor (i) has the power and authority to pledge the Pledged Collateral pledged by it hereunder in the manner hereby done or contemplated and (ii) will defend its title or interest thereto or therein against any and all Liens (other than any Lien created or permitted by the Loan Documents or the First Lien Loan Documents), however arising, of all persons whomsoever;

(f) no consent or approval of any Governmental Authority, any securities exchange or any other person was or is necessary to the validity of the pledge effected hereby (other than such as have been obtained and are in full force and effect);

(g) by virtue of the execution and delivery by each Grantor of this Agreement and the Lien priorities set forth in the Intercreditor Agreement, when any Pledged Securities are delivered to the Collateral Agent (or, prior to the Discharge of First Lien Obligations, to the First Lien Collateral Agent, acting as a gratuitous bailee of the Collateral Agent) in accordance with this Agreement, the Collateral Agent will obtain a legal, valid and perfected first priority lien upon

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and security interest in such Pledged Securities as security for the payment and performance of the Obligations, prior to any other Lien on any of the Pledged Securities other than the First Priority Liens and Liens permitted pursuant to Section 6.02 of the Second Lien Credit Agreement; and

(h) the pledge effected hereby is effective to vest in the Collateral Agent, for the ratable benefit of the Secured Parties, the rights of the Collateral Agent in the Pledged Collateral as set forth herein and all action by any Grantor necessary to protect and perfect the Lien on the Pledged Collateral has been duly taken.

SECTION 3.04. Certification of Limited Liability Company Interests and Limited Partnership Interests. Each interest in any limited liability company or limited partnership which is a Subsidiary and pledged hereunder shall be represented by a certificate, shall be a “security” within the meaning of Article 8 of the New York UCC and shall be governed by Article 8 of the New York UCC.

SECTION 3.05. Registration in Nominee Name; Denominations. Upon the occurrence and during the continuation of an Event of Default, the Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion), at any time after the Discharge of First Lien Obligations, to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank or in favor of the Collateral Agent. Upon the occurrence and during the continuation of an Event of Default, each Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities in its capacity as the registered owner thereof. Upon the occurrence and during the continuation of an Event of Default, at any time after the Discharge of First Lien Obligations, the Collateral Agent shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement.

SECTION 3.06. Voting Rights; Dividends and Interest, Etc. (a) Unless and until an Event of Default shall have occurred and be continuing and the Collateral Agent shall have given the Grantors written notice of its intent to exercise its rights under this Agreement (which notice shall be deemed to have been given immediately upon the occurrence of an Event of Default under paragraph (g) or (h) of Article VII of the Second Lien Credit Agreement):

(i) Each Grantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for any purpose consistent with the terms of this Agreement, the Second Lien Credit Agreement and the other Loan Documents; provided, however, that such rights and powers shall not be exercised in any manner that could reasonably be expected to have a Material Adverse Effect.

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(ii) The Collateral Agent shall execute and deliver to each Grantor, or cause to be executed and delivered to each Grantor, all such proxies, powers of attorney and other instruments as such Grantor may reasonably request for the purpose of enabling such Grantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to paragraph (i) above.

(iii) Each Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Securities to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the Second Lien Credit Agreement, the other Loan Documents and applicable law; provided, however, that any noncash dividends, interest, principal or other distributions that would constitute Pledged Stock or Pledged Debt Securities, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, to the extent required to be delivered hereunder, if received by any Grantor, shall not be commingled by such Grantor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the ratable benefit of the Secured Parties and shall be forthwith delivered to the Collateral Agent (or, prior to the Discharge of First Lien Obligations, to the First Lien Collateral Agent, acting as gratuitous bailee of the Collateral Agent) in the same form as so received (with any necessary endorsement or instrument of assignment). This paragraph (iii) shall not apply to dividends between or among the Borrower, the Guarantors and any Subsidiaries only of property subject to a perfected security interest under this Agreement.

(b) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified (or shall be deemed to have notified pursuant to Section 3.06(a)) the Grantors in writing of the suspension of their rights under paragraph (a)(iii) of this Section 3.06, then all rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section 3.06 shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which, subject to the rights of the First Lien Collateral Agent under the Intercreditor Agreement, shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions. All dividends, interest, principal or other distributions received by any Grantor contrary to the provisions of this Section 3.06 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Grantor and, subject to the rights of the First Lien Collateral Agent and the obligations of the Grantors under the First Lien Loan Documents and the Intercreditor Agreement, shall be

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forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsement or instrument of assignment). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 5.02. The Collateral Agent shall, promptly after all such Events of Default have been cured or waived, repay to each applicable Grantor (without interest) all dividends, interest, principal or other distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 3.06 and that remain in such account.

(c) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified (or shall be deemed to have notified pursuant to Section 3.06(a)) the Grantors in writing of the suspension of their rights under paragraph (a)(i) of this Section 3.06, then all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 3.06, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 3.06, shall cease, and all such rights shall thereupon become, subject to the rights of the First Lien Collateral Agent and the obligations of the Grantors under the First Lien Loan Documents and the Intercreditor Agreement, vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided that, unless otherwise directed by the Required Lenders, the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights.

(d) Any notice given by the Collateral Agent to the Grantors exercising its rights under paragraph (a) of this Section 3.06 (i) may be given by telephone if promptly confirmed in writing, (ii) may be given to one or more of the Grantors at the same or different times and (iii) may suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.

ARTICLE IV

Security Interests in Personal Property

SECTION 4.01. Security Interest. (a) As security for the payment or performance, as the case may be, in full of the Obligations, each Grantor hereby assigns and pledges to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest (the “Security Interest”), in all right, title or interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Article 9 Collateral”):

(i) all Accounts;

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(ii) all Chattel Paper;

(iii) all cash and Deposit Accounts;

(iv) all Documents;

(v) all Equipment;

(vi) all General Intangibles;

(vii) all Instruments;

(viii) all Inventory;

(ix) all Investment Property;

(x) all Letter-of-Credit Rights;

(xi) all Commercial Tort Claims;

(xii) all books and records pertaining to the Article 9 Collateral; and

(xiii) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security and guarantees given by any person with respect to any of the foregoing;

provided, however, that notwithstanding any of the other provisions set forth in this Section 4, in no event shall the security interest granted under this Section 4 attach to any Excluded Collateral.

(b) Each Grantor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings) with respect to the Article 9 Collateral or any part thereof and amendments thereto that (i) indicate the Article 9 Collateral as “all assets” of such Grantor or words of similar effect, and (ii) contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment, including (A) whether such Grantor is an organization, the type of organization and any organizational identification number issued to such Grantor and (B) in the case of a financing statement filed as a fixture filing, a sufficient description of the real property to which such Article 9 Collateral relates. Each Grantor agrees to provide such information to the Collateral Agent promptly upon request.

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The Collateral Agent is further authorized to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) such documents as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by each Grantor, without the signature of any Grantor, and naming any Grantor or the Grantors as debtors and the Collateral Agent as secured party.

(c) The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Article 9 Collateral.

SECTION 4.02. Representations and Warranties. The Grantors jointly and severally represent and warrant to the Collateral Agent and the Secured Parties that:

(a) Except for the security interests granted hereunder and the Liens permitted pursuant to Section 6.02 of the Second Lien Credit Agreement, each Grantor has good and valid rights in and title to the Article 9 Collateral with respect to which it has purported to grant a Security Interest hereunder and has full power and authority to grant to the Collateral Agent, for the ratable benefit of the Secured Parties, the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other person other than any consent or approval that has been obtained.

(b) The Perfection Certificate has been duly prepared, completed and executed and the information set forth therein (including (x) the exact legal name of each Grantor and (y) the jurisdiction of organization of each Grantor) is correct and complete in all material respects as of the Closing Date. Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations containing a description of the Article 9 Collateral have been prepared by the Collateral Agent based upon the information provided to the Administrative Agent and the Secured Parties in the Perfection Certificate for filing in each governmental, municipal or other office specified in Section 2 of the Perfection Certificate (or specified by notice from the Borrower to the Administrative Agent after the Closing Date in the case of filings, recordings or registrations required by Sections 5.06 or 5.12 of the Second Lien Credit Agreement).

(c) The Article 9 Collateral is owned by the Grantors free and clear of any Lien, except for Liens expressly permitted pursuant to Section 6.02 of the Second Lien Credit Agreement. No Grantor has filed or consented to the filing of (i) any financing statement or analogous document under the Uniform Commercial Code or any other applicable laws covering any Article 9 Collateral, (ii) any assignment in which any Grantor assigns any Collateral or any security agreement or similar instrument covering any Article 9 Collateral with the United States Patent and Trademark Office or the United States Copyright Office, (iii)

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any notice under the Assignment of Claims Act, or (iv) any assignment in which any Grantor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Liens expressly permitted pursuant to Section 6.02 of the Second Lien Credit Agreement. As of the Closing Date, no Grantor holds any Commercial Tort Claims except as indicated on the Perfection Certificate.

SECTION 4.03. Covenants. (a) Except in connection with a transaction permitted by Section 6.05 of the First Lien Credit Agreement following which any Grantor shall cease to be a Loan Party, each Grantor agrees promptly to notify the Collateral Agent in writing of any change in (i) its legal name, (ii) its identity or type of organization or corporate structure, (iii) its Federal Taxpayer Identification Number or organizational identification number or (iv) its jurisdiction of organization. Each Grantor agrees promptly to provide the Collateral Agent with certified organizational documents reflecting any of the changes described in the first sentence of this paragraph. Each Grantor agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected first priority security interest in all the Article 9 Collateral contemplated hereunder. Each Grantor agrees promptly to notify the Collateral Agent if any material portion of the Article 9 Collateral owned or held by such Grantor is damaged or destroyed.

(b) Each Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Article 9 Collateral owned by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged.

(c) Each year, at the time of delivery of annual financial statements with respect to the preceding fiscal year pursuant to Section 5.04(a) of the Second Lien Credit Agreement, the Borrower shall deliver to the Collateral Agent a certificate executed by a Responsible Officer of the Borrower and setting forth in the format of Schedule III a list of all Intellectual Property of any Grantor in existence on the date thereof and not then listed on such Schedules or previously so identified to the Collateral Agent.

(d) Each Grantor shall, at its own expense, take any and all actions reasonably necessary to defend title to the Article 9 Collateral against all persons and to defend the Security Interest of the Collateral Agent in the Article 9 Collateral and the priority thereof against any Lien not expressly permitted pursuant to Section 6.02 of the Second Lien Credit Agreement.

(e) Each Grantor agrees, at its own expense, promptly to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent may from time to time

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reasonably request to better assure, obtain, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and Taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing or continuation statements (including fixture filings) or other documents in connection herewith or therewith.

Without limiting the generality of the foregoing, each Grantor hereby authorizes the Collateral Agent, with reasonable prior notice thereof to the Grantors, to supplement this Agreement by supplementing Schedule III or adding additional schedules hereto to identify specifically any asset or item of a Grantor that, in the Collateral Agent’s reasonable judgment, constitutes Copyrights, Licenses, Patents or Trademarks; provided that any Grantor shall have the right, exercisable within 10 days after it has been notified by the Collateral Agent of the specific identification of such Collateral, to advise the Collateral Agent in writing of any inaccuracy of the representations and warranties made by such Grantor hereunder with respect to such Collateral. Each Grantor agrees that it will use its reasonable best efforts to take such action as shall be reasonably necessary in order that all representations and warranties hereunder shall be true and correct with respect to such Collateral within 30 days after the date it has been notified by the Collateral Agent of the specific identification of such Collateral.

(f) The Collateral Agent and such persons as the Collateral Agent may designate shall have the right (subject to and otherwise in accordance with Section 5.07 of the Second Lien Credit Agreement), at the applicable Grantor’s own cost and expense, to inspect the Article 9 Collateral, all records related thereto (and to make extracts and copies from such records) and the premises upon which any of the Article 9 Collateral is located, to discuss the applicable Grantor’s affairs with the officers of such Grantor and its independent accountants and to verify the existence, validity, amount, quality, quantity, value, condition and status of, or any other matter relating to, the Article 9 Collateral, including, in the case of Accounts or other Article 9 Collateral in the possession of any third person, by contacting Account Debtors or the third person possessing such Article 9 Collateral for the purpose of making such a verification. The Collateral Agent upon written notice to each Grantor shall have the absolute right to share any information it gains from such inspection or verification with any Secured Party.

(g) At its option, during the continuance of an Event of Default, the Collateral Agent may discharge past due Taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and not expressly permitted pursuant to Section 5.03 or Section 6.02 of the Second Lien Credit Agreement, and may pay for the maintenance and preservation of the Article 9 Collateral to the extent any Grantor fails to do so as required by the Second Lien Credit Agreement or this Agreement, and each Grantor jointly and severally agrees to reimburse the Collateral Agent promptly following demand for any payment made or any expense incurred by the Collateral Agent pursuant to the foregoing authorization; provided, however, that nothing in this paragraph shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to Taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Loan Documents.

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(h) If at any time any Grantor shall take a security interest in any material property of an Account Debtor or any other person to secure payment and performance of a material Account, such Grantor shall promptly assign such security interest to the Collateral Agent for the ratable benefit of the Secured Parties. Such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other person granting the security interest.

(i) Each Grantor, at its own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Inventory and Equipment in accordance with the requirements set forth in Section 5.02 of the Second Lien Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, upon the occurrence and during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Article 9 Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. Upon the occurrence and during the continuance of an Event of Default, in the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or under the Second Lien Credit Agreement or to pay any premium in whole or part relating thereto, the Collateral Agent may, without waiving or releasing any obligation or liability of any Grantor hereunder or any Default or Event of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other reasonable actions with respect thereto as the Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection with this paragraph, including attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, by the Grantors to the Collateral Agent and shall be additional Obligations secured hereby.

(j) Each Grantor shall maintain, in form and manner reasonably satisfactory to the Collateral Agent, records of its Chattel Paper and its books, records and documents evidencing or pertaining thereto.

SECTION 4.04. Other Actions. In order to further insure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, the Security Interest in the Article 9 Collateral, each Grantor agrees, in each case at such Grantor’s own expense, to take the following actions with respect to the following Article 9 Collateral:

(a) Instruments. If any Grantor shall at any time hold or acquire any Instruments having an individual value in excess of $250,000, such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent or, prior to the Discharge of First Lien Obligations, to the First Lien Collateral Agent, as

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gratuitous bailee, accompanied by such undated instruments of endorsement, transfer or assignment duly executed in blank as the Collateral Agent may from time to time specify.

(b) Deposit Accounts. For each Deposit Account that any Grantor at any time opens or maintains, such Grantor shall, upon the Collateral Agent’s written request, either (i) cause the depositary bank to agree to comply at any time with instructions from the Collateral Agent or, prior to the Discharge of First Lien Obligations, the First Lien Collateral Agent, as gratuitous bailee, to such depositary bank directing the disposition of funds from time to time credited to such Deposit Account, without further consent of such Grantor or any other person, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, or (ii) arrange for the Collateral Agent or, prior to the Discharge of First Lien Obligations, the First Lien Collateral Agent, as gratuitous bailee to become the customer of the depositary bank with respect to the Deposit Account, with the Grantor being permitted, only with the consent of the Collateral Agent (or the First Lien Collateral Agent, as the case may be), to exercise rights to withdraw funds from such Deposit Account. The Collateral Agent agrees with each Grantor that the Collateral Agent shall not give any such instructions or withhold any withdrawal rights from any Grantor, unless an Event of Default has occurred and is continuing. The provisions of this paragraph shall not apply to any Deposit Account (x) for which any Grantor, the depositary bank and the Collateral Agent or, prior to the Discharge of First Lien Obligations, the First Lien Collateral Agent, as gratuitous bailee have entered into a cash collateral agreement specially negotiated among such Grantor, the depositary bank and the Collateral Agent (or the First Lien Collateral Agent, as the case may be) for the specific purpose set forth therein, (y) any payroll, withholding tax or other fiduciary account and/or (z) any such Deposit Accounts that, together with any Securities Accounts described in Section 4.04(c)(z) below, in the aggregate, have a principal balance of $250,000 or less.

(c) Investment Property. Except to the extent otherwise provided in Article III, if any Grantor shall at any time hold or acquire any certificated securities having an individual value in excess of $250,000 (or otherwise required to be delivered hereunder), such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent or, prior to the Discharge of First Lien Obligations, to the First Lien Collateral Agent, as gratuitous bailee, accompanied by such undated instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time specify. If any such securities now or hereafter acquired by any Grantor are uncertificated and are issued to such Grantor or its nominee directly by the issuer thereof, such Grantor shall promptly notify the Collateral Agent thereof and, at the Collateral Agent’s written request and option, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) cause the issuer to agree to comply with instructions from the Collateral Agent (or, prior to the Discharge of First Lien Obligations, the First Lien Collateral Agent) as to such securities, without further consent of any Grantor or such nominee, or (ii) arrange for the Collateral

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Agent (or, prior to the Discharge of First Lien Obligations, the First Lien Collateral Agent) to become the registered owner of the securities. If any securities, whether certificated or uncertificated, or other Investment Property now or hereafter acquired by any Grantor are held by such Grantor or its nominee through a Securities Intermediary or Commodity Intermediary, such Grantor shall promptly notify the Collateral Agent thereof and, at the Collateral Agent’s request and option, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) cause such Securities Intermediary or Commodity Intermediary, as the case may be, to agree to comply with Entitlement Orders from the Collateral Agent (or, prior to the Discharge of First Lien Obligations, the First Lien Collateral Agent) to such Securities Intermediary as to such securities or other Investment Property, or (as the case may be) to apply any value distributed on account of any commodity contract as directed by the Collateral Agent (or, prior to the Discharge of First Lien Obligations, the First Lien Collateral Agent) to such Commodity Intermediary, in each case without further consent of any Grantor or such nominee, or (ii) in the case of Financial Assets (as governed by Article 8 of the New York UCC) or other Investment Property held through a Securities Intermediary, arrange for the Collateral Agent (or, prior to the Discharge of First Lien Obligations, the First Lien Collateral Agent) to become the Entitlement Holder with respect to such Investment Property, with the Grantor being permitted, only with the consent of the Collateral Agent (or, prior to the Discharge of First Lien Obligations, the First Lien Collateral Agent), to exercise rights to withdraw or otherwise deal with such Investment Property. The Collateral Agent agrees with each Grantor that the Collateral Agent shall not give any such Entitlement Orders or instructions or directions to any such issuer, Securities Intermediary or Commodity Intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by any Grantor, unless an Event of Default has occurred and is continuing. The provisions of this paragraph shall not apply to any (x) Financial Assets credited to a Securities Account for which the Collateral Agent (or, prior to the Discharge of First Lien Obligations, the First Lien Collateral Agent) is the Securities Intermediary, (y) any payroll, withholding tax or other fiduciary account and/or (z) any Securities Accounts that, together with any Deposit Accounts described in Section 4.04(b)(z) above, in the aggregate, have a principal balance of $250,000 or less.

(d) Electronic Chattel Paper and Transferable Records. If any Grantor at any time holds or acquires an interest in any Electronic Chattel Paper or any “transferable record”, as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, in each case having an individual value in excess of $250,000, such Grantor shall promptly notify the Collateral Agent thereof and, at the written request of the Collateral Agent, shall take such action as the Collateral Agent may reasonably request to vest in the Collateral Agent (or, prior to the Discharge of First Lien Obligations, to the First Lien Collateral Agent, acting as gratuitous bailee of the Collateral Agent) control under New York UCC Section 9-105 of such Electronic

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Chattel Paper or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Collateral Agent agrees with such Grantor that the Collateral Agent will arrange, pursuant to procedures reasonably satisfactory to the Collateral Agent and so long as such procedures will not result in the Collateral Agent’s (or, prior to the Discharge of First Lien Obligations, to the First Lien Collateral Agent’s, acting as gratuitous bailee of the Collateral Agent) loss of control, for the Grantor to make alterations to such Electronic Chattel Paper or transferable record permitted under UCC Section 9-105 or, as the case may be, Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing.

(e) Letter-of-Credit Rights. If any Grantor is at any time a beneficiary under a letter of credit having an individual value in excess of $250,000 now or hereafter issued in favor of such Grantor, such Grantor shall promptly notify the Collateral Agent thereof and, at the request and option of the Collateral Agent, and, subject to the rights of the First Lien Collateral Agent and the obligations of the Grantors under the First Lien Loan Documents and the Intercreditor Agreement, such Grantor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent (or, prior to the Discharge of First Lien Obligations, the First Lien Collateral Agent) of the proceeds of any drawing under the letter of credit or (ii) arrange for the Collateral Agent (or, prior to the Discharge of First Lien Obligations, the First Lien Collateral Agent) to become the transferee beneficiary of the letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be paid to the applicable Grantor unless an Event of Default has occurred and is continuing.

(f) Commercial Tort Claims. If any Grantor shall at any time hold or acquire a Commercial Tort Claim in an amount reasonably estimated to exceed $500,000, the Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor including a summary description of such claim and grant to the Collateral Agent, for the ratable benefit of the Secured Parties, in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to the Collateral Agent.

SECTION 4.05. Covenants Regarding Patent, Trademark and Copyright Collateral. (a) Each Grantor agrees that it will not, and will not permit any of its licensees to, do any act, or omit to do any act, whereby any Patent that is material to the conduct of such Grantor’s business may become invalidated or dedicated to the public, and agrees that it shall continue to mark any products covered by any such Patent with the relevant patent number as necessary and sufficient to establish and preserve its maximum rights under applicable patent laws.

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(b) Each Grantor (either itself or through its licensees or its sublicensees) will, for each Trademark material to the conduct of such Grantor’s business, (i) maintain such Trademark in full force free from any claim of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered under such Trademark, (iii) display such Trademark with notice of Federal or foreign registration to the extent necessary and sufficient to establish and preserve its maximum rights under applicable law and (iv) not knowingly use or knowingly permit the use of such Trademark in violation of any third party rights.

(c) Each Grantor (either itself or through its licensees or sublicensees) will, for each work covered by a material Copyright, continue to publish, reproduce, display, adopt and distribute the work with appropriate copyright notice as necessary and sufficient to establish and preserve its maximum rights under applicable copyright laws.

(d) Each Grantor shall notify the Collateral Agent promptly if it knows or has reason to know that any Patent, Trademark or Copyright material to the conduct of its business may become abandoned, lost or dedicated to the public, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, United States Copyright Office or any court or similar office of any country) regarding such Grantor’s ownership of any Patent, Trademark or Copyright, its right to register the same, or its right to keep and maintain the same.

(e) In no event shall any Grantor, either itself or through any agent, employee, licensee or designee, file an application for any Patent, Trademark or Copyright (or for the registration of any Trademark or Copyright) with the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, unless it promptly notifies the Collateral Agent, and, upon request of the Collateral Agent, executes and delivers any and all agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the Security Interest in such Patent, Trademark or Copyright, and each Grantor hereby appoints the Collateral Agent as its attorney-in-fact to execute and file such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed; such power, being coupled with an interest, is irrevocable for the term of this Agreement.

(f) Each Grantor will take all necessary steps that are consistent with the practice in any proceeding before the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, to maintain and pursue each material application relating to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant or registration) and to maintain each issued Patent and each registration of the Trademarks and Copyrights that is material to the conduct of any Grantor’s business, including timely filings of applications for renewal, affidavits of use,

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affidavits of incontestability and payment of maintenance fees, and, if consistent with good business judgment, to initiate opposition, interference and cancellation proceedings against third parties.

(g) In the event that any Grantor knows or has reason to believe that any Article 9 Collateral consisting of a Patent, Trademark or Copyright material to the conduct of any Grantor’s business has been or is about to be materially infringed, misappropriated or diluted by a third person, such Grantor promptly shall notify the Collateral Agent and shall, if consistent with good business judgment, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and take such other actions as are appropriate under the circumstances to protect such Article 9 Collateral.

(h) Upon the occurrence and during the continuance of an Event of Default, promptly following the request of the Collateral Agent, each Grantor shall use its best efforts to obtain all requisite consents or approvals by the licensor of each Copyright License, Patent License or Trademark License, and each other material License, to effect the assignment of all such Grantor’s right, title and interest thereunder to the Collateral Agent, for the ratable benefit of the Secured Parties, or its designee.

ARTICLE V

Remedies

SECTION 5.01. Remedies Upon Default. Upon the occurrence and during the continuance of an Event of Default, each Grantor agrees to deliver each item of Collateral to the Collateral Agent on demand, and it is agreed that the Collateral Agent shall have the right to take any of or all the following actions at the same or different times: (a) with respect to any Article 9 Collateral consisting of Intellectual Property, on demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Article 9 Collateral by the applicable Grantor to the Collateral Agent, or to license or sublicense, whether general, special or otherwise, and whether on an exclusive or nonexclusive basis, any such Article 9 Collateral throughout the world on such terms and conditions and in such manner as the Collateral Agent shall determine (other than in violation of any then-existing licensing arrangements to the extent that waivers cannot upon the use of commercially reasonable efforts be obtained), and (b) with or without legal process and with or without prior notice or demand for performance, to take possession of the Article 9 Collateral and without liability for trespass to enter any premises where the Article 9 Collateral may be located for the purpose of taking possession of or removing the Article 9 Collateral and, generally, to exercise any and all rights afforded to a secured party under the Uniform Commercial Code or other applicable law. Without limiting the generality of the foregoing, each Grantor agrees that the Collateral Agent shall have the right, subject to the mandatory requirements of applicable law, to sell or otherwise dispose of all or any part of the Collateral at a public or private sale or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem

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appropriate. The Collateral Agent shall be authorized at any such sale (if it deems it reasonable to do so) to restrict the prospective bidders or purchasers to persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and appraisal which such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.

The Collateral Agent shall give each applicable Grantor 10 days’ written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of the Collateral Agent’s intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker’s board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by applicable law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by applicable law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor. For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact

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that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Obligations paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 5.01 shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.

Any remedies provided in this Section 5.01 shall be subject to the Intercreditor Agreement.

SECTION 5.02. Application of Proceeds. Subject to the payment over provisions set forth in the Intercreditor Agreement, the Collateral Agent shall apply the proceeds of any collection, sale, foreclosure or other realization upon any Collateral, including any Collateral consisting of cash, as follows:

FIRST, to the payment of all reasonable and documented costs and expenses incurred by the Administrative Agent or the Collateral Agent (in their respective capacities as such hereunder or under any other Loan Document) in connection with such collection, sale, foreclosure or realization or otherwise in connection with this Agreement, any other Loan Document or any of the Obligations, including all court costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made by the Administrative Agent and/or the Collateral Agent hereunder or under any other Loan Document on behalf of any Grantor and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Loan Document;

SECOND, to the payment in full of all other Obligations (the amounts so applied to be distributed among the Secured Parties pro rata in accordance with the amounts of the Obligations owed to them on the date of any such distribution); and

THIRD, to the Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct.

The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.

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SECTION 5.03. Grant of License to Use Intellectual Property. For the purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to the Grantors), to use, license or sublicense any of the Article 9 Collateral consisting of Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the Collateral Agent may be exercised, at the option of the Collateral Agent, only upon the occurrence and during the continuation of an Event of Default; provided, however, that any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon each Grantor notwithstanding any subsequent cure of an Event of Default.

SECTION 5.04. Securities Act, Etc. In view of the position of the Grantors in relation to the Pledged Collateral, or because of other current or future circumstances, a question may arise under the U.S. Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the “Federal Securities Laws”) with respect to any disposition of the Pledged Collateral permitted hereunder. Each Grantor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Collateral under applicable “blue sky” or other state securities laws or similar laws analogous in purpose or effect. Each Grantor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Pledged Collateral, limit the purchasers to those who will agree, among other things, to acquire such Pledged Collateral for their own account, for investment, and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or part thereof shall have been filed under the Federal Securities Laws and (b) may approach and negotiate with a limited number of potential purchasers (including a single potential purchaser) to effect such sale. Each Grantor acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Pledged Collateral at a price that the Collateral Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a limited number of purchasers (or a single

27

purchaser) were approached. The provisions of this Section 5.04 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells.

ARTICLE VI

Indemnity, Subrogation and Subordination

SECTION 6.01. Indemnity and Subrogation. In addition to all such rights of indemnity and subrogation as the Guarantors may have under applicable law (but subject to Section 6.03), the Borrower agrees that (a) in the event a payment shall be made by any Guarantor under this Agreement, the Borrower shall indemnify such Guarantor for the full amount of such payment and such Guarantor shall be subrogated to the rights of the person to whom such payment shall have been made to the extent of such payment and (b) in the event any assets of any Guarantor shall be sold pursuant to this Agreement or any other Security Document to satisfy in whole or in part a claim of any Secured Party, the Borrower shall indemnify such Guarantor in an amount equal to the greater of the book value or the fair market value of the assets so sold.

SECTION 6.02. Contribution and Subrogation. Each Guarantor (a “Contributing Guarantor”) agrees (subject to Section 6.03) that, in the event a payment shall be made by any other Guarantor hereunder in respect of any Obligation, or assets of any other Guarantor shall be sold pursuant to any Security Document to satisfy any Obligation owed to any Secured Party, and such other Guarantor (the “Claiming Guarantor”) shall not have been fully indemnified by the Borrower as provided in Section 6.01, the Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal to (i) the amount of such payment or (ii) the greater of the book value or the fair market value of such assets, as the case may be, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Guarantor on the date hereof and the denominator shall be the aggregate net worth of all the Guarantors on the date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to Section 7.16, the date of the supplement hereto executed and delivered by such Guarantor). Any Contributing Guarantor making any payment to a Claiming Guarantor pursuant to this Section 6.02 shall be subrogated to the rights of such Claiming Guarantor under Section 6.01 to the extent of such payment.

SECTION 6.03. Subordination. (a) Notwithstanding any provision of this Agreement to the contrary, all rights of the Guarantors under Sections 6.01 and 6.02 and all other rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the indefeasible payment in full in cash of the Obligations. No failure on the part of the Borrower or any Guarantor to make the payments required by Sections 6.01 and 6.02 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Guarantor with respect to its obligations hereunder, and each Guarantor shall remain liable for the full amount of its obligations hereunder.

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(b) The Borrower and each Guarantor hereby agree that all Indebtedness and other monetary obligations owed by it to the Borrower or any Subsidiary shall, upon the occurrence and during the continuance of an Event of Default, be fully subordinated to the indefeasible payment in full in cash of the Obligations.

ARTICLE VII

Miscellaneous

SECTION 7.01. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 9.01 of the Second Lien Credit Agreement. All communications and notices hereunder to any Subsidiary Guarantor shall be given to it in care of the Borrower as provided in Section 9.01 of the Second Lien Credit Agreement.

SECTION 7.02. Security Interest Absolute. In accordance with applicable laws, all rights of the Collateral Agent hereunder, the Security Interest, the grant of a security interest in the Pledged Collateral and all obligations of each Grantor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Second Lien Credit Agreement, any other Loan Document, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Second Lien Credit Agreement, any other Loan Document or any other agreement or instrument relating to the foregoing, (c) any exchange, release or non-perfection of any Lien on other collateral (except for dispositions of Collateral permitted pursuant to the terms of the Second Lien Credit Agreement), or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Obligations or this Agreement.

SECTION 7.03. Survival of Agreement. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Lenders and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any Lender or on their behalf and notwithstanding that the Collateral Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended under the Second Lien Credit Agreement, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under any Loan Document is outstanding and unpaid.

SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall become effective as to any Loan Party when a counterpart hereof executed on behalf

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of such Loan Party shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Loan Party and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of such Loan Party, the Collateral Agent and the other Secured Parties and their respective successors and assigns, except that no Loan Party shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as expressly contemplated or permitted by this Agreement or the Second Lien Credit Agreement. This Agreement shall be construed as a separate agreement with respect to each Loan Party and may be amended, modified, supplemented, waived or released with respect to any Loan Party without the approval of any other Loan Party and without affecting the obligations of any other Loan Party hereunder.

SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

SECTION 7.06. Collateral Agent’s Fees and Expenses; Indemnification. (a) The parties hereto agree that the Collateral Agent shall be entitled to reimbursement of its expenses incurred hereunder as and to the extent provided in Section 9.05 of the Second Lien Credit Agreement.

(b) Without limitation of its indemnification obligations under the other Loan Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent and the other indemnitees against, and hold each indemnitee harmless from, any and all losses, claims, damages, liabilities, and related expenses, including reasonable and documented counsel fees, charges and disbursements (subject to the limitations set forth in Section 9.05(a) of the Second Lien Credit Agreement), incurred by or asserted against any indemnitee arising out of, in any way connected with, or as a result of, the execution or delivery or performance of this Agreement or any agreement or instrument contemplated hereby or any claim, litigation, investigation or proceeding relating to any of the foregoing or to the Collateral, regardless of whether any indemnitee is a party thereto or whether initiated by a third party or by a Loan Party or any Affiliate thereof; provided, however, that such indemnity shall not, as to any indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or wilful misconduct of such indemnitee. To the extent permitted by applicable law, no Grantor shall assert, and each Grantor hereby waives any claim against any indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions or any Loan or the use of proceeds thereof.

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(c) Any such amounts payable as provided hereunder shall be additional Obligations secured hereby and by the other Security Documents. The provisions of this Section 7.06 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Collateral Agent or any other Secured Party. All amounts due under this Section 7.06 shall be payable promptly following written demand therefor and shall bear interest, on and from the date of demand, at the rate specified in Section 2.06(a) of the Second Lien Credit Agreement.

SECTION 7.07. Collateral Agent Appointed Attorney-in-Fact. Upon the occurrence and during the continuation of an Event of Default, each Grantor hereby appoints the Collateral Agent as the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable for the term of this Agreement and coupled with an interest; provided, however, that notwithstanding the preceding each Grantor hereby immediately appoints the Collateral Agent as the attorney-in-fact of such Grantor for the purpose of perfecting any security interest created hereunder. Without limiting the generality of the foregoing, the Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default, with full power of substitution either in the Collateral Agent’s name or in the name of such Grantor (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof, (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral, (c) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral, (d) to send verifications of Accounts Receivable to any Account Debtor, (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral, (f) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral, (g) to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent, and (h) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement in accordance with its terms, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided, however, that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence, wilful misconduct or bad faith.

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SECTION 7.08. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SECTION 7.09. Waivers; Amendment. (a) No failure or delay by the Collateral Agent, the Administrative Agent or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver hereof or thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Collateral Agent, the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 7.09, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Collateral Agent or any Lender may have had notice or knowledge of such Default at the time. No notice or demand on any Loan Party in any case shall entitle any Loan Party to any other or further notice or demand in similar or other circumstances.

(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Loan Party or Loan Parties with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 9.08 of the Second Lien Credit Agreement.

SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.

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SECTION 7.11. Severability. In the event any one or more of the provisions contained in this Agreement or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 7.12. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract, and shall become effective as provided in Section 7.04. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.

SECTION 7.13. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

SECTION 7.14. Jurisdiction; Consent to Service of Process. (a) Each of the Grantors hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive 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 Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the Loan Parties hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the 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 Agreement or any other Loan Document shall affect any right that the Collateral Agent, the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Grantor or its properties in the courts of any jurisdiction.

(b) Each of the Loan Parties hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (a) of this Section 7.14. Each of the parties hereto 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.

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(c) Each of the parties hereto hereby irrevocably consents to service of process in the manner provided for notices in Section 7.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 7.15. Termination or Release. (a) This Agreement, the guarantees made herein, the Security Interest, the pledge of the Pledged Collateral and all other security interests granted hereby shall automatically terminate when all the Obligations (except for contingent indemnification obligations) have been indefeasibly paid in full and the Lenders have no further commitment to lend under the Second Lien Credit Agreement.

(b) A Subsidiary Guarantor shall automatically be released from its obligations hereunder and the Security Interests created hereunder in the Collateral of such Subsidiary Guarantor shall be automatically released upon the consummation of any transaction permitted by the Second Lien Credit Agreement as a result of which such Subsidiary Guarantor ceases to be a Subsidiary.

(c) Subject to Section 3.04(b) of the Intercreditor Agreement, (i) upon any sale or other transfer by any Grantor of any Collateral that is permitted under the Second Lien Credit Agreement to any person that is not the Borrower or a Guarantor or (ii) upon the effectiveness of any written consent to the release of the Security Interest granted hereby in any Collateral pursuant to Section 9.08 of the Second Lien Credit Agreement, the Security Interest in such Collateral shall be automatically released.

(d) In connection with any termination or release pursuant to paragraph (a), (b) or (c) above, the Collateral Agent shall promptly execute and deliver to any Grantor, at such Grantor’s expense, all Uniform Commercial Code termination statements and similar documents that such Grantor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section 7.15 shall be without recourse to or representation or warranty by the Collateral Agent or any Secured Party. Without limiting the provisions of Section 7.06, the Borrower shall reimburse the Collateral Agent upon demand for all costs and out of pocket expenses, including the fees, charges and expenses of counsel, incurred by it in connection with any action contemplated by this Section 7.15.

SECTION 7.16. Additional Subsidiaries. Any Subsidiary that is required to become a party hereto pursuant to Section 5.12 of the Second Lien Credit Agreement shall enter into this Agreement as a Subsidiary Guarantor and a Grantor upon becoming such a Subsidiary. Upon execution and delivery by the Collateral Agent and such Subsidiary of a supplement in the form of Exhibit A hereto, such Subsidiary shall become a Subsidiary Guarantor and a Grantor hereunder with the same force and effect as if originally named as a Subsidiary Guarantor and a Grantor herein. The execution and delivery of any such instrument shall not require the consent of any other Loan Party hereunder. The rights and obligations of each Loan Party hereunder shall remain in full force and effect notwithstanding the addition of any new Loan Party as a party to this Agreement.

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SECTION 7.17. Right of Setoff. If an Event of Default shall have occurred and is continuing, each Secured Party is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all Collateral (including any deposits (general or special, time or demand, provisional or final)) at any time held and other obligations at any time owing by such Secured Party to or for the credit or the account of any Grantor against any and all of the obligations of such Grantor now or hereafter existing under this Agreement and the other Loan Documents held by such Secured Party, irrespective of whether or not such Secured Party shall have made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured. The rights of each Secured Party under this Section 7.17 are in addition to other rights and remedies (including other rights of setoff) which such Secured Party may have.

SECTION 7.18. Intercreditor Agreement Governs. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE COLLATERAL AGENT AND THE OTHER SECURED PARTIES HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL.

SECTION 7.19. Obligations of Grantors. To the extent that the obligations of any Grantor hereunder shall conflict, or shall be inconsistent, with the obligations of such Grantor under the First Lien Guarantee and Collateral Agreement, the provisions of the First Lien Guarantee and Collateral Agreement shall control.

SECTION 7.20. Delivery of Collateral. Notwithstanding anything herein to the contrary, prior to the Discharge of First Lien Obligations, to the extent any Grantor is required hereunder to deliver Collateral to the Collateral Agent for purposes of possession and control and is unable to do so as a result of having previously delivered such Collateral to the First Lien Collateral Agent in accordance with the terms of the First Lien Guarantee and Collateral Agreement, such Grantor’s obligations hereunder with respect to such delivery shall be deemed satisfied by the delivery to the First Lien Collateral Agent, acting as a gratuitous bailee of the Collateral Agent.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

INTERSTATE FIBERNET, INC.,
by	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Sr. Vice President
ITC^DELTACOM, INC.,
by	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Sr. Vice President
EACH OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO,
by	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Authorized Signatory

CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Collateral Agent,
by	/s/ James Moran
Name:	James Moran
Title:	Managing Director
by	/s/ Nupur Kumar
Name:	Nupur Kumar
Title:	Associate

EX-10.5

Exhibit 10.5

EQUITY PURCHASE AND RIGHTS OFFERING AGREEMENT

Dated as of July 16, 2007

By and Among

ITC^DeltaCom, Inc.

and

THE PURCHASERS LISTED ON THE SIGNATURE PAGES HERETO

TABLE OF CONTENTS

		Page
ARTICLE I
Escrow of Purchase Price; Purchase and Sale of the Shares; Closing
Section 1.01	Delivery of Purchase Price into Escrow	2
Section 1.02	Purchase and Sale of the Shares	2
Section 1.03	Closing	2
ARTICLE II
Representations and Warranties of the Company
Section 2.01	Organization, Standing, etc.	2
Section 2.02	Capital Stock	3
Section 2.03	Issuance of Shares	5
Section 2.04	Authorization; Enforcement	5
Section 2.05	Recapitalization	5
Section 2.06	Absence of Changes	6
Section 2.07	Compliance with Laws	6
Section 2.08	No Conflicts; Consents	6
Section 2.09	No Violation	8
Section 2.10	Legal and Governmental Proceedings	8
Section 2.11	Investment Company	8
Section 2.12	Full Disclosure	8
Section 2.13	Financial Statements; Books and Records	8
Section 2.14	Taxes	9
Section 2.15	Title to Properties	10
Section 2.16	Intellectual Property	10
Section 2.17	Environmental Matters	10
Section 2.18	Transactions with Affiliates	11
Section 2.19	No Shareholder Vote Required	11
Section 2.20	Securities Act	11
Section 2.21	General Solicitation	11
Section 2.22	Integration	11
Section 2.23	Solvency	12
Section 2.24	No Brokers	12
ARTICLE III
Representations and Warranties of the Purchasers
Section 3.01	Organization; Authorization; Enforcement	12

i

Section 3.02	Compliance with Securities Act	13
Section 3.03	QIB and Accredited Investor Status	13
Section 3.04	Reliance on Exemptions	13
Section 3.05	Legends	13
Section 3.06	Brokers	14
Section 3.07	Own Account	14
Section 3.08	Experience of Purchaser	14
Section 3.09	Availability of Funds	15
Section 3.10	Majority of Purchasers	15
Section 3.11	Shares	15
ARTICLE IV
Covenants
Section 4.01	Rights Offering.	15
Section 4.02	Authorization.	17
Section 4.03	Rights Offering; Registration Statements	17
Section 4.04	Reporting Status	20
Section 4.05	Company Lock-Up	20
Section 4.06	No Integration	20
Section 4.07	Compliance with Laws	21
Section 4.08	Publicity	21
Section 4.09	Fees and Expenses	21
ARTICLE V
Section 5.01	Additional Covenants of the Purchasers	21
ARTICLE VI
Conditions To The Obligations of The Parties
Section 6.01	Conditions to the Obligations of the Purchasers	22
Section 6.02	Conditions to the Obligations of the Company	24
ARTICLE VII
	Indemnification and Contribution	24
ARTICLE VIII
Termination
Section 8.01	Termination	26

ii

ARTICLE IX
Miscellaneous
Section 9.01	Surviving Provisions	28
Section 9.02	Transfer Taxes	28
Section 9.03	Entire Agreement	28
Section 9.04	Amendment and Waiver	28
Section 9.05	Extension; Waiver	28
Section 9.06	Notices	28
Section 9.07	Assignment	29
Section 9.08	Exhibits and Annexes; Interpretation	30
Section 9.09	GOVERNING LAW	30
Section 9.10	WAIVER OF JURY TRIAL	30
Section 9.11	Consent to Jurisdiction	30
Section 9.12	Specific Performance	30
Section 9.13	Counterparts	31
Section 9.14	Further Assurances	31
Section 9.15	No Third Party Beneficiaries	31
Exhibits
Exhibit A	Recapitalization Description and Schedule 1 thereto
Exhibit B	Form of Certificate of Designation of Series H 6% Convertible Redeemable Preferred Stock
Exhibit C	Form of Escrow Agreement

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INDEX OF DEFINED TERMS
Term	Section
Agreement	Recitals
Aggregate Offering Amount	Section 4.01(a)
Aggregate Purchase Price	Section 1.01
Business Day	Section 4.01(b)
Certificate of Designation	Recitals
Closing	Section 1.02
Closing Date	Section 1.02
Common Stock	Recitals
Common Stock Per Share Purchase Price	Recitals
Company	Recitals
Conversion of Shares	Recitals
Eligible Holder	Section 4.01(a)
Environmental Laws	Section 2.17
Escrow Agreement	Section 1.01
Exchange Act	Section 2.08(b)
Exercise of Rights	Recitals
Existing Preferred Stock	Section 2.02(a)
Existing Warrants	Section 2.02(a)
Expiration Time	Section 4.01(b)
GAAP	Section 2.13(a)
Governmental Entity	Section 2.08(b)
include, includes, included, including	Section 5.07(b)
Indemnifying Party	Section 7.01
Intellectual Property	Section 2.16
Investment Decision Package	Section 4.03(f)
Issuer Free Writing Prospectus	Section 4.07(f)
Lock-Up Period	Section 4.05(a)
Losses	Section 7.01
Majority of Purchasers	Section 3.10
Material Adverse Effect	Section 2.01
Recapitalization Documents	Section 2.05
Per Share Purchase Price	Section 1.01
Permits	Section 2.07(b)
person	Section 5.07(b)
Preferred Stock Amendments	Section 2.08(b)
Preliminary Rights Offering Prospectus	Section 4.03(f)
Proceedings	Section 7.01
Purchaser	Recitals
Purchasers	Recitals
Purchasers Confidentiality Agreements	Section 5.01(d)
QIB	Section 3.03
Recapitalization	Recitals

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Recapitalization Documents	Section 2.05
Record Date	Section 4.01(a)
Rights	Recitals
Rights Exercise Period	Section 4.01(b)
Rights Offering	Recitals
Rights Offering Closing Date	Section 4.01(g)
Rights Offering Commencing Date	Section 4.01(b)
Rights Offering Prospectus	Section 4.03(f)
Rights Offering Registration Statement	Section 4.03(a)
Rights Offering Shares	Section 4.01(a)
SEC	Section 2.08(b)
SEC Filings	Section 2.12
Securities Act	Section 2.08(b)
Securities Act Effective Date	Section 4.03(f)
Series A Preferred Stock	Section 2.02(a)
Series A Warrants	Section 2.02(a)
Series B Preferred Stock	Section 2.02(a)
Series C Preferred Stock	Section 2.02(a)
Series D Warrants	Section 2.02(a)
Share Purchase Number	Recitals
Shares	Recitals
Stock Incentive Plans	Section 2.02(a)
Stockholders Lock-Up Period Agreement	Section 4.05(b)
Subscription Agent	Section 4.01(c)
Subscription Ratio	Recitals
Tax	Section 2.14(b)
Tax Return	Section 2.14(b)
Unsubscribed Shares	Section 4.01(f)

EQUITY PURCHASE AND RIGHTS OFFERING AGREEMENT (this “Agreement”), dated as of July 16, 2007, by and among the purchasers listed on the signature pages hereto (each a “Purchaser” and together, the “Purchasers”) and ITC^DeltaCom, Inc., a Delaware corporation (the “Company”).

WHEREAS, the Company intends to consummate a recapitalization of its capital structure (the “Recapitalization”) as described in Exhibit A annexed hereto; and

WHEREAS, concurrently with the Recapitalization, the Company desires to issue and sell to the Purchasers an aggregate of 412,215 shares of the Company’s Series H 6% Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Shares”), the Certificate of Designation for which will be substantially in the form annexed hereto as Exhibit B with such non-material changes as may be necessary for acceptance of form by the Secretary of State of Delaware (the “Certificate of Designation”) and each of which will be convertible into 33 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), and each Purchaser desires to purchase from the Company that number of Shares set forth opposite such Purchaser’s name on the signature pages hereof (the “Share Purchase Number” with respect to such Purchaser); and

WHEREAS, as soon as reasonably practicable following the closing of the purchase of the Shares by the Purchasers, the Company proposes to conduct a rights offering by distributing to each holder of record (as of a certain record date) of its shares of Common Stock (certain holders having agreed not to participate therein), at no charge, non-transferable rights (the “Rights”) entitling the holder of each share of Common Stock to purchase from the Company 1.18 shares of Common Stock at a purchase price of $3.03 per share (the “Common Stock Per Share Purchase Price”), rounded to the nearest whole share (the “Rights Offering”); and

WHEREAS, the subscription ratio shall be 1.18 shares of Common Stock per Right, based on the currently estimated number of shares of outstanding Common Stock held immediately after the Closing by stockholders of the Company eligible to participate in the Rights Offering (11,536,618 shares of Common Stock), subject to adjustment if the actual number of such shares of Common Stock shall differ from such estimate (such ratio, as so adjusted, the “Subscription Ratio”); and

WHEREAS, the Company has reserved 13,604,455 shares of Common Stock issuable pursuant to the exercise of rights in the Rights Offering (the “Exercise of Rights”) and for the mandatory conversion of the Shares in accordance with the Certificate of Designation (the “Conversion of Shares”);

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

ARTICLE I

Escrow of Purchase Price; Purchase and Sale of the Shares; Closing

Section 1.01 Delivery of Purchase Price into Escrow. Simultaneously with the execution hereof, each Purchaser is delivering by wire transfer of immediately available funds to the Escrow Agent (as defined in the Escrow Agreement annexed hereto as Exhibit C (the “Escrow Agreement”)) the sum of $100 (the “Per Share Purchase Price”) multiplied by such Purchaser’s applicable Share Purchase Number (the “Aggregate Purchase Price” with respect to such Purchaser). The Company shall pay simple interest to the Purchasers at the rate of 6% per annum of the Aggregate Purchase Price so long as the Aggregate Purchase Price remains subject to the Escrow Agreement. The Company shall reimburse and indemnify the Purchasers against any costs, expenses, losses or claims of any type of the Escrow Agent and/or against the failure of the Company to pay any fees pursuant to the Escrow Agreement;

Section 1.02 Purchase and Sale of the Shares. Subject to the terms and conditions set forth herein and in the Escrow Agreement, on the Closing Date, the Company shall issue and sell to each Purchaser, and each Purchaser shall purchase from the Company, the number of Shares equal to such Purchaser’s applicable Share Purchase Number at the Aggregate Purchase Price, to be paid by wire transfer of immediately available funds from the Escrow Agent to the Company and against delivery of duly executed certificates to each Purchaser representing the number of Shares which such Purchaser is purchasing hereunder and payment of accrued interest on the Aggregate Purchase Price pursuant to Section 1.01.

Section 1.03 Closing. The sale of the Shares by the Company to each Purchaser and the purchase of the Shares by each Purchaser from the Company (such sale and purchase collectively, the “Closing”) will take place at 10:00 a.m., New York City time, on July 31, 2007, or such other date as the Company closes the Recapitalization (the “Closing Date”), at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036.

ARTICLE II

Representations and Warranties of the Company

The Company represents and warrants to, and agrees with, each Purchaser that:

Section 2.01 Organization, Standing, etc. The Company and each of its subsidiaries is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction in which it is organized, with all requisite power and authority (corporate and other) to own, lease and operate its properties and to conduct its business as currently owned,

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leased, operated and conducted, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure to so register or qualify or to be in good standing, has not had, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets, liabilities, operations, condition (financial or otherwise), operating results or prospects of the Company and its subsidiaries, taken as a whole (a “Material Adverse Effect”).

Section 2.02 Capital Stock. (a) As of June 30, 2007, before giving effect to the Recapitalization and the Closing, the authorized capital stock of the Company consists of 350,000,000 shares of Common Stock and 50,000,000 shares of preferred stock, of which (i) 18,770,942 shares of Common Stock (excluding treasury shares) are issued and outstanding, (ii) no shares of Common Stock are held by the Company as treasury shares, (iii) approximately 340,000, 1,000,000, 6,700,000 and 5,600,000 shares of Common Stock are reserved for future issuance pursuant to the Company’s common stock purchase warrants originally issued on October 29, 2002 (the “Series A Warrants”), common stock purchase warrants originally issued on October 6, 2003, common stock purchase warrants originally issued on March 29, 2005 and warrants originally issued on July 26, 2005 (the “Series D Warrants”), respectively (collectively, the “Existing Warrants”), (iv) options to acquire 620,140 shares of Common Stock pursuant to the Company’s Amended and Reinstated Stock Incentive Plan and Executive Stock Incentive Plan (together, the “Stock Incentive Plans”) are issued and outstanding, (v) restricted stock units for 3,215,601 shares of Common Stock, stock units for approximately 14,016 shares of the Company’s 8% Series A Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), and stock units for approximately 42,138 shares of the Company’s 8% Series B Convertible Redeemable Preferred Stock, par value $0.01 per share, (the “Series B Preferred Stock”) are issued and outstanding pursuant to the Stock Incentive Plans, (vi) 670,453 shares of Common Stock are reserved and available for issuance pursuant to future awards under the Stock Incentive Plans and (vii) 201,883 shares of the Series A Preferred Stock, 607,087 shares of the Series B Preferred Stock and 0 shares of the 8% Series C Convertible Redeemable Preferred Stock, par value $0.01 per share, (the “Series C Preferred Stock”) (collectively, the “Existing Preferred Stock”) are issued and outstanding.

(b) All of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable. There are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Shares.

(c) As of the Closing Date, after giving effect to the Recapitalization (but not the Rights Offering) and the Closing, the authorized capital stock of the Company will consist of 350,000,000 shares of Common Stock and 50,000,000 shares of preferred stock, of which not more than (i) 68,000,000 shares of Common Stock (excluding treasury shares) will be issued and outstanding, (ii) no shares of Common Stock will be held by the Company as treasury shares, (iii) 412,215 Shares will be issued and outstanding, and (iv) assuming no exercise thereof has taken place, (a) options to

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acquire 620,140 shares of Common Stock pursuant to the Stock Incentive Plans will be issued and outstanding, (b) restricted stock units for approximately 4,790,768 shares of Common Stock will be issued and outstanding pursuant to the Stock Incentive Plans, (c) 670,453 shares of Common Stock will be reserved and available for issuance pursuant to future awards under the Stock Incentive Plans, and (d) approximately 340,000 shares of Common Stock will be reserved for future issuance pursuant to the Series A Warrants. Except for the Rights Offering and except as set forth in the immediately preceding sentence, immediately following the Recapitalization and the Closing, 13,604,455 shares of Common Stock will be reserved for issuance pursuant to the Exercise of Rights and the Conversion of Shares, and (x) there will be no outstanding securities, options, “phantom” stock rights, stock appreciation rights, stock-based performance units, warrants, calls, rights, contracts, commitments, agreements, instruments, arrangements, understandings, obligations or undertakings of any kind to which the Company or any of its subsidiaries is bound, (A) obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of, or securities convertible into, or exchangeable or exercisable for, shares of capital stock or other voting securities of, the Company or any of its subsidiaries or that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of shares of capital stock or other voting securities of the Company or any of its subsidiaries or (B) other than in connection with the Company’s Stock Incentive Plans, obligating the Company or any of its subsidiaries to issue, grant, extend or enter into any security, option, “phantom” stock rights, stock appreciation right, stock-based performance unit, warrant, call, right, contract, commitment, agreement, instrument, arrangement, understanding, obligation or undertaking, (y) there will be no outstanding contractual obligations of the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or its subsidiaries or any option or other equity-based award (other than the redemption of the Shares pursuant to this Agreement and the Certificate of Designation) and (z) there will be no agreements or arrangements under which the Company or any of its subsidiaries will be obligated to register the sale of any of its or their securities under the Securities Act, except (1) the Rights Offering Registration Statement, (2) the Registration Rights Agreement, dated as of October 6, 2003, as amended, among the Company and WCAS Securityholders listed on the signature pages thereof and (3) the Registration Rights Agreement, dated as of July 26, 2005, as may be amended from time to time, among the Company and the TCP Securityholders listed on the signature pages thereof.

(d) The Overview of DeltaCom Equity Structure attached as Schedule 1 to Exhibit A attached hereto sets forth a pro forma representation of the Common Stock ownership of the Company after the consummation of the Rights Offering assuming (i) 100% participation of Common Stock holders in the Rights Offering, (ii) that no shareholder of the Company which or who is not subject to the lock-up agreements described in Section 4.05 of this Agreement has sold shares of Common Stock, (iii) giving effect to restricted stock units which will have vested by February 2008, and (iv) no management stock options have been issued, exercised or forfeited.

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(e) Except as disclosed in the SEC Filings, all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all pledges, claims, liens, charges, encumbrances, mortgages and security interests of any kind or nature whatsoever, other than any of the foregoing resulting solely from the Recapitalization.

Section 2.03 Issuance of Shares. The Shares, upon payment therefor pursuant to and as contemplated by this Agreement, will be validly issued, fully paid and non-assessable, free and clear of all pledges, claims, liens, charges, encumbrances, mortgages and security interests of any kind or nature whatsoever, other than any of the foregoing resulting solely from action by the holders of the Shares. The Shares will not be issued in violation of any statutory or contractual preemptive or other rights of any stockholder of the Company.

Section 2.04 Authorization; Enforcement. The Company has, subject to the authorization of the Certificate of Designation by or on behalf of the Board of Directors in accordance with Section 4.02 and the effectiveness of the Preferred Stock Amendments, all requisite corporate power and authority to enter into, execute, deliver and perform its obligations under this Agreement, the Escrow Agreement, and the Certificate of Designation and to consummate the transactions contemplated hereby and thereby. This Agreement, the Escrow Agreement, and the Certificate of Designation have been, or prior to Closing will be, duly authorized, executed and delivered by the Company, and, assuming due authorization, execution and delivery thereof by the other parties thereto, constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except (i) as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and (ii) the enforceability of rights to indemnification and contribution under this Agreement may be limited by federal or state securities laws.

Section 2.05 Recapitalization. The Company has, subject to the authorization of the Certificate of Designation by or on behalf of the Board of Directors in accordance with Section 4.02 and the effectiveness of the Preferred Stock Amendments, all requisite corporate power and authority to consummate the Recapitalization, and to enter into, execute, deliver and perform its obligations under the Recapitalization Documents and to consummate the transactions contemplated thereby. Each of the Recapitalization Documents will be duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery thereof by the other parties thereto, will constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). The Recapitalization will occur concurrently with the Closing and the purchase by the Purchasers of the Shares hereunder.

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For purposes of this Agreement, the term “Recapitalization Documents” means all agreements and instruments to be executed by the Company in order to effect the Recapitalization and related transactions.

Section 2.06 Absence of Changes. Except as disclosed in the SEC Filings and except as contemplated by this Agreement and the Recapitalization Documents, since December 31, 2006, the Company and its subsidiaries have conducted their respective businesses only in the ordinary course consistent with past practice, and there has not been any event that has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

Section 2.07 Compliance with Laws. Except as expressly disclosed in the SEC Filings:

(a) the Company and each of its subsidiaries are in compliance with all statutes, orders, rules and regulations of any court or governmental agency or body having jurisdiction over the Company or such subsidiary in all respects, except to the extent that the failure to so comply has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(b)(i) the Company and each of its subsidiaries have all licenses, permits, orders or approvals of any Governmental Entity (collectively, “Permits”) that are material to or necessary for the conduct of the business of the Company in the manner described in the SEC Filings, except to the extent that the failure to have such Permits has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (ii) such Permits are in full force and effect and (iii) no violations exist with respect to any Permit, except to the extent that any such violation has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and

(c) neither the Company nor any of its subsidiaries is a party to any written agreement, consent decree or memorandum of understanding with, or a party to any commitment letter or similar undertaking to, or is subject to any cease-and-desist or other order or directive by, or has adopted any policies, procedures or board resolutions at the request of, any Governmental Entity which restricts materially the conduct of the business of the Company and its subsidiaries, taken as a whole, nor has the Company or any subsidiary been advised in writing by any Governmental Entity that it is contemplating any such undertakings.

Section 2.08 No Conflicts; Consents. (a) None of the execution, delivery and performance of this Agreement, the Escrow Agreement and the Recapitalization Documents by the Company, including the compliance by the Company with all of the provisions hereof and thereof and the consummation of the transactions contemplated hereby and thereby in accordance with the terms of this Agreement, will conflict with or result in a breach or violation of any of the terms or provisions of, or (with the giving of notice or the lapse of time or both)

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constitute a default under, (i) any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) the provisions of the charter, by-laws or other organizational documents of the Company or any of its subsidiaries or (iii) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets, except for, in the case of clauses (i) and (iii), such conflicts, breaches, violations or defaults that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Recapitalization Documents shall be effective prior to the issuance and sale of the Shares.

(b) The Company is not required to obtain any consent, approval, authorization or order of, or make any filing or registration with, any governmental entity, including any Federal, state or local government or any court, administrative agency or commission or other governmental or regulatory authority or agency (each, a “Governmental Entity”), in connection with the execution, delivery and performance of this Agreement, the Escrow Agreement, the Recapitalization Documents and the Rights Offering by the Company, including the compliance by the Company with all of the provisions hereof and thereof and the consummation of the transactions contemplated hereby and thereby, except for (i) the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the issuance of the Rights and the Shares pursuant to the Exercise of Rights, (ii) the filing with the Securities and Exchange Commission (the “SEC”) of such reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as may be required in connection with this Agreement, the Escrow Agreement and the Recapitalization and the transactions contemplated hereby and thereby, (iii) any filings required under applicable state securities rules and regulations, (iv) the filing of one or more notices on Form D under the Securities Act, (v) consents, approvals, authorizations, registrations, declarations and filings of or with state public service or public utility commissions or other similar state Governmental Entities with jurisdiction to regulate the business operations of the Company and its subsidiaries, (vi) the filing of amendments to the certificates of designation of the Series A Preferred Stock and the Series B Preferred Stock as needed to implement the transactions contemplated by this Agreement (the “Preferred Stock Amendments”), the filing of a certificate of elimination with respect to the Series C Preferred Stock, and the authorization and filing of the Certificate of Designation relating to the Shares with the Secretary of State of the State of Delaware, (vii) the filing of such documents as may be necessary to record or perfect or to terminate security interests or mortgages in personal or real property in connection with the incurrence and repayment by the Company and its subsidiaries of indebtedness in connection with the Recapitalization, and (viii) such other consents, approvals, orders, authorizations, registrations, declarations and filings, the failure of which to be obtained or made, individually or in the aggregate, would not reasonably be expected to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company to perform its obligations under this Agreement and the Recapitalization Documents or (C) prevent or materially impede, interfere with, hinder or delay the consummation of the transactions contemplated by this Agreement and the Escrow Agreement.

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Section 2.09 No Violation. Neither the Company nor any of its subsidiaries (i) is in violation of its charter, by-laws or other organizational documents, (ii) is in default in any respect, and no event has occurred which (with the giving of notice or the lapse of time or both) would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject or (iii) is in violation in any respect of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject, except for, in the case of clauses (ii) and (iii), such defaults or violations as have not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

Section 2.10 Legal and Governmental Proceedings. Except as otherwise disclosed in the SEC Filings or as previously disclosed to the Purchasers in writing, there are no suits, actions, investigations or proceedings (whether judicial, arbitral, administrative or other) pending or, to the knowledge of the Company, threatened, against or affecting the Company or any of its subsidiaries that, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect, nor are there any judgments, decrees, injunctions, rules or orders of any Governmental Entity outstanding against the Company or any of its subsidiaries that have had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

Section 2.11 Investment Company. The Company is not and, after giving effect to the offering and sale of the Securities, will not be, an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.

Section 2.12 Full Disclosure. Since January 1, 2006, the Company has filed all reports, schedules, forms, statements and other documents (including exhibits and other information incorporated therein) required to be filed by the Company with the SEC pursuant to the Exchange Act (the “SEC Filings”). As of their respective dates, each of the SEC Filings complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Filings, and none of the SEC Filings at the time it was filed contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except to the extent corrected by a subsequently filed SEC Filing.

Section 2.13 Financial Statements; Books and Records. (a) The audited financial statements and unaudited interim financial statements of the Company included or incorporated by reference in SEC Filings have been prepared in accordance with generally accepted accounting principles of the United States (“GAAP”) (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted by Form 10-Q), complied as of their respective dates in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, and fairly present, in all material respects, the financial position of the Company as of the dates thereof and the results of operations for the periods then ended (subject, in the case of any unaudited interim financial statements, to the absence of footnotes required by GAAP and normal year-end adjustments).

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(b) The Company has no liabilities of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, other than (i) liabilities to the extent disclosed or provided for in the most recent financial statements of the Company or set forth in the notes thereto, (ii) liabilities disclosed in the SEC Filings, (iii) liabilities under this Agreement and the Recapitalization Documents, or (iv) liabilities incurred in the ordinary course of business since the date of the most recent financial statements disclosed in the SEC Filings that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) The Company has complied, in all material respects, with the provisions of the Sarbanes-Oxley Act of 2002 applicable to it. The Company (i) makes and keeps accurate books and records and (ii) maintains a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 under the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure. There is no transaction, arrangement, or other relationship between the Company and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its Exchange Act filings and is not so disclosed.

Section 2.14 Taxes. (a) Except where the failure to file or pay or the existence of outstanding agreements, waivers, disputes, claims, audits or examinations could not reasonably be expected to have a Material Adverse Effect, the Company has filed or caused to be filed all Federal Tax Returns, and all material state, local and foreign tax returns or materials required to have been filed by it and has paid or caused to be paid all Taxes due and payable by it and all assessments received by it, except taxes that are being contested in good faith by appropriate proceedings and for which the Company shall have set aside on its books adequate reserves in accordance with GAAP.

(b) For purposes of this Agreement, “Tax” shall mean all forms of taxation or duties imposed, or required to be collected or withheld, including charges,

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together with any related interest, penalties or other additional amounts, and “Tax Return” shall mean any return, filing, report, questionnaire, information statement or other document required to be filed, including any amendments that may be filed, for any taxable period with any taxing authority (whether or not a payment is required to be made with respect to such filing).

Section 2.15 Title to Properties. Except as described in the SEC Filings filed with the SEC prior to the date of this Agreement, the Company has sufficient title to all material properties (real and personal) owned by the Company that are necessary for the conduct of the business of the Company as described in the SEC Filings filed with the SEC prior to the date of this Agreement and as currently conducted, except (i) for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes, (ii) for assets disposed of as otherwise permitted under the Recapitalization Documents, or (iii) as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. All such material properties are free and clear of any encumbrance, other than any encumbrance permitted under the Recapitalization Documents. All material properties held under lease by the Company are held under valid, subsisting and enforceable leases. The Company enjoys peaceful and undisturbed possession under all such material leases, except in each case as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

Section 2.16 Intellectual Property. The Company owns or possesses sufficient rights to use all material trademarks, copyrights, licenses, inventions, trade names and know-how (including trade secrets and other unpatented and/or unpatentable property or confidential information, systems, processes or procedures) (collectively, “Intellectual Property”) necessary for its business as presently conducted without any material conflict or material infringement of the intellectual property rights of others. To the knowledge of the Company, the Company has not materially infringed upon or otherwise materially violated the intellectual property rights of any third party. The Company has not received and there is not currently pending any claim, charge, demand, notice or other communication alleging that the Company has violated or, by conducting its business as proposed, would violate any intellectual property rights of any other person or entity, other than claims, charges, demands, notices or other communications that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. All of the Company’s Intellectual Property is owned or licensed by the Company, free and clear of all encumbrances and (to the extent owned) is held in the Company’s name. The execution or delivery of this Agreement, or the carrying on of the Company’s business by the employees of the Company, will not conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument related to the Intellectual Property, except for any such conflict, breach or default that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company has taken all actions reasonably necessary and desirable to maintain and protect each material item of Intellectual Property owned by the Company.

Section 2.17 Environmental Matters. Except as otherwise disclosed in the SEC Filings, the Company and its subsidiaries (i) are and have been in compliance in all material respects with all applicable Federal, state and local laws, common law, regulations and codes, as well as orders, decrees, judgments or injunctions issued, promulgated, approved or entered

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thereunder relating to pollution, protection of the environment or public health (collectively, “Environmental Laws”), and no material expenditures are or, to the knowledge of the Company, will be required in order to comply with any applicable Environmental Laws, (ii) have received and are in material compliance with all permits, licenses, certificates or other authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) have not received written notice of any actual or potential liability under or relating to any Environmental Laws, including for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminant. There is no civil, criminal or administrative judgment, action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter pending or to the knowledge of the Company, threatened against the Company pursuant to Environmental Laws which would reasonably be expected to result in a material fine, penalty, cost or expense. To the knowledge of the Company, there are no past, present or, reasonably anticipated events, conditions, circumstances, activities, practices, incidents, agreements, actions or plans that would reasonably be expected to give rise to any material cost or material liability to the Company under Environmental Laws that would reasonably be expected to result in a Material Adverse Effect.

Section 2.18 Transactions with Affiliates. Except as disclosed in the SEC Filings, and as contemplated by the Recapitalization there are no material agreements, material contracts or other material arrangements between the Company or any of its subsidiaries, on the one hand, and (i) any affiliate of the Company or any of its subsidiaries or (ii) any current or former director, officer, employee or consultant of the Company or any of its subsidiaries or of any affiliate of the Company or any of its subsidiaries, on the other hand, that are required to be disclosed under Item 404 of Regulation S-K of the SEC.

Section 2.19 No Shareholder Vote Required. No vote by any holders of any class or series of capital stock of the Company or any of its subsidiaries is necessary to approve the execution, delivery and performance of this Agreement, the Escrow Agreement and the Recapitalization Documents by the Company and the consummation of the transactions contemplated hereby and thereby, except for the approval of the Preferred Stock Amendments by the holders of the Series A Preferred Stock and the Series B Preferred Stock.

Section 2.20 Securities Act. Subject to the accuracy of the representations and warranties of the Purchasers contained herein, it is not necessary in connection with the offer, sale and delivery of the Shares in the manner contemplated by this Agreement the Purchasers to register the Shares under the Securities Act.

Section 2.21 General Solicitation. Within the preceding six months, other than pursuant to an effective registration statement on Form S-8 with respect to the Company’s Amended and Restated Stock Incentive Plan, neither the Company, any affiliate of the Company nor any person acting on its or their behalf has sold any shares of Common Stock by means of any general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or offered or sold any shares of Common Stock outside the United States to non-U.S. persons (as defined in Rule 902 under the Securities Act).

Section 2.22 Integration. Within the preceding six months, neither the Company nor any other person acting on behalf of the Company has sold to any

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person any shares of Common Stock or any securities of the same or a similar class as the Common Stock, other than the Shares offered or sold to the Purchasers hereunder or pursuant to the Recapitalization and other than pursuant to an effective registration statement on Form S-8 with respect to the Company’s Amended and Restated Stock Incentive Plan. The Company will take reasonable precautions designed to ensure that any offer or sale, direct or indirect, of any shares of Common Stock or any substantially similar security issued by the Company, within six months subsequent to the Closing Date, is made under restrictions and other circumstances reasonably designed not to affect the status of the offer and sale of the Shares contemplated by this Agreement as transactions exempt from the registration provisions of the Securities Act.

Section 2.23 Solvency. The Company (both before and immediately after giving effect to the Closing and the Recapitalization) is solvent (i.e., its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and does not anticipate or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.

Section 2.24 No Brokers. No broker, finder, commission agent or other person is entitled to be paid by the Company any broker’s fee or commission in connection with the sale of the Shares and the transactions contemplated by this Agreement other than Miller Buckfire & Co., LLC and Imperial Capital.

ARTICLE III

Representations and Warranties of the Purchasers

Each Purchaser, severally and not jointly, hereby represents and warrants to, and agrees with the Company that:

Section 3.01 Organization; Authorization; Enforcement. Such Purchaser is an entity validly existing and in good standing under the laws of its jurisdiction of formation and has the requisite power and authority to carry on its business as it is now being conducted. This Agreement and the Escrow Agreement have been duly and validly authorized, executed and delivered by such Purchaser, and, assuming the due authorization, execution and delivery thereof by the Company, constitute valid and binding agreements of such Purchaser, enforceable against such Purchaser in accordance with their terms, except (i) as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and (ii) the enforceability of rights to indemnification and contribution under this Agreement may be limited by federal or state securities laws.

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Section 3.02 Compliance with Securities Act. Such Purchaser understands and acknowledges that the offering, issuance, sale and delivery of the Shares to the Purchasers as contemplated by this Agreement are exempt from the registration requirements of the Securities Act and that the Securities purchased by such Purchaser will be “restricted securities” as defined in Rule 144(a)(3) under the Securities Act. So long as the Securities purchased are restricted securities, such Purchaser will offer and sell the Securities in any subsequent disposition only (i) pursuant to an effective registration statement under the Securities Act or (ii) under a valid exemption from the registration requirements of the Securities Act; provided, however, that by making the representations herein, such Purchaser does not agree to hold any Shares for any minimum or other specific term and reserves the right to dispose of the Shares at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.

Section 3.03 QIB and Accredited Investor Status. Such Purchaser is (i) a “qualified institutional buyer” as defined in Rule 144A under the Securities Act (a “QIB”) or (ii) an “accredited investor” as defined in Rule 501(a)(1), (2), (3), (7) or (8) under the Securities Act. Such Purchaser understands and acknowledges that the Company is relying on such Purchaser’s status as a QIB or an “accredited investor” in order for the offer and sale of the Shares to be exempt from the registration requirements of the Securities Act.

Section 3.04 Reliance on Exemptions. Such Purchaser understands and acknowledges that the Shares are being offered and sold to the Purchasers in reliance upon specific exemptions from the registration requirements of Federal and state securities laws and that the Company is relying upon the truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Purchaser set forth in this Article III in order to determine the availability of such exemptions and the eligibility of such Purchaser to acquire the Securities.

Section 3.05 Legends. Such Purchaser understands and acknowledges that the Shares (until such time as such Shares have been registered for public resale thereof under the Securities Act or converted into shares of Common Stock as contemplated by the Rights Offering, or otherwise may be sold by such Purchaser pursuant to Rule 144 without any restriction as to the public resale thereof), subject to the immediately following paragraph, shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Shares):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAW, (B) AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR (C) RULE 144 UNDER THE SECURITIES ACT.

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The conditions to any offer, sale, pledge or other transfer of the Shares as set forth in the legend above are incorporated in, and form a part of, this Agreement. The legend set forth above shall be removed and the Company shall issue a certificate representing any Share without such legend to the holder of such Share upon which it is stamped, if, unless otherwise required by state securities laws, (i) such Share is sold pursuant to an effective registration statement under the Securities Act, (ii) such holder provides the Company with an opinion of counsel, in form, substance and scope reasonably acceptable to the Company, to the effect that a public sale or transfer of such Share may be made without registration under the Securities Act or (iii) such holder provides the Company with reasonable assurances that such Share and all other Shares then held by such holder may be sold pursuant to Rule 144(k) under the Securities Act or pursuant to Rule 144 under the Securities Act within any three-month period.

Section 3.06 Brokers. Such Purchaser has dealt with no broker, finder, commission agent or other person in connection with the purchase of the Shares and the transactions contemplated by this Agreement, and such Purchaser is under no obligation to pay any broker’s fee or commission in connection with such transactions except for a fee to Imperial Capital which is being paid by the Company.

Section 3.07 Own Account. Such Purchaser is acquiring the Shares as principal for its own account and is acquiring the Shares in the ordinary course of its business. Except for participating in the Rights Offering, such Purchaser is not purchasing the Shares with a view toward, or for resale in connection with, any distribution (as that term is used in the Securities Act and the rules and regulations thereunder) of all or any portion thereof in violation of the Securities Act or any applicable state securities laws.

Section 3.08 Experience of Purchaser. (a) Such Purchaser has had access to the SEC Filings, has undertaken its own due diligence with respect to the Company and the Common Stock and has (i) made such investigation with respect thereto as it has deemed necessary to make its investment decision and (ii) made its own assessment and has satisfied itself concerning the relevant tax, legal and other economic considerations relevant to its investment in the Shares. Such Purchaser, either alone or together with its representatives and advisors, has the knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the investment in the Shares, has so evaluated the merits and risks of such investment and is able to bear the economic risk of such investment.

(b) Such Purchaser has not relied on the Company or any of its affiliates or any person acting on its behalf in connection with its analysis or decision to purchase the Shares, except for the representations and warranties of the Company set forth in this Agreement. Such Purchaser understands, acknowledges and agrees that none of the Company or any of its respective affiliates, directors, officers, employees, agents, advisors, attorneys or representatives has made any representation or warranty, either express or implied, with respect to the Company or the Shares, or the accuracy or completeness of any of the information furnished by or on behalf of any of them to such Purchaser in connection with its acquisition of the Shares, except for the representations and warranties of the Company set forth in this Agreement.

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Section 3.09 Availability of Funds. Such Purchaser has adequate funds immediately available to satisfy all of its obligations hereunder and is transferring such funds to the Escrow Agent simultaneously with the execution of this Agreement.

Section 3.10 Majority of Purchasers. For purposes of this Agreement, a “Majority of Purchasers” shall mean those Purchasers whose Aggregate Purchase Prices equal or exceed 20, 610, 751.

Section 3.11 Shares. For purposes of this Article III, the reference to “Shares” shall mean both the Shares of Series H 6% Convertible Redeemable Preferred Stock and the shares of Common Stock into which such Shares are convertible.

ARTICLE IV

Covenants

Section 4.01 Rights Offering. (a) On the terms and subject to the conditions set forth herein, the Company will distribute, at no charge, to each holder of record of Common Stock (each an “Eligible Holder”) as of the close of business on an applicable record date as determined by the Company’s Board of Directors (the “Record Date”), Rights to purchase shares of Common Stock (the “Rights Offering Shares”) at the Common Stock Per Share Purchase Price. Each Eligible Holder shall receive Rights to purchase Rights Offering Shares at the Subscription Ratio which shall be finalized not later than five (5) Business Days prior to the Rights Offering Commencement Date for each share of Common Stock held by such holder as of the Record Date, provided that no fractional shares will be issued and the Common Stock Per Share Purchase Price multiplied by the aggregate number of Rights Offering Shares offered shall not exceed $41,221,500 (the “Aggregate Offering Amount”). Each such Right shall be non-transferable.

(b) The Rights may be exercised during a period (the “Rights Exercise Period”) commencing on the date on which Rights are issued to Eligible Holders (the “Rights Offering Commencement Date”) and ending at 5:00 p.m. Eastern Daylight Time on a Business Day that shall not be less than twenty (20) Business Days after the Rights Offering Commencement Date, subject to extension at the reasonable discretion of the Board of Directors, provided, however, that the Rights Exercise Period shall not be more than thirty (30) Business Days without the prior written consent of the Majority of Purchasers (the date on which such period ends, the “Expiration Time”). “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to close.

(c) Each Eligible Holder who wishes to exercise all or a portion of its Rights shall (i) during the Rights Exercise Period return a duly executed document to a subscription agent (the “Subscription Agent”) electing to exercise all or a portion of the Rights held by such Eligible Holder and (ii) pay an amount equal to the full Common

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Stock Per Share Purchase Price of the number of Rights Offering Shares that the Eligible Holder elects to purchase pursuant to the instructions set forth in the Rights Offering Registration Statement by a specified date to an escrow account established for the Rights Offering pursuant to the terms of an escrow agreement reasonably acceptable to the Majority of Purchasers. On the Rights Offering Closing Date, the Subscription Agent will issue to each Eligible Holder who validly exercised its Rights the number of Rights Offering Shares to which such Eligible Holder is entitled based on such exercise.

(d) The Company will pay all of its expenses associated with the Rights Offering Registration Statement, and the Rights Offering, including, without limitation, filing and printing fees, fees and expenses of any subscription and information agents, its counsel and accounting fees and expenses, costs associated with clearing the shares of Common Stock for sale under applicable state securities laws and listing fees.

(e) The Company shall notify, or cause the Subscription Agent to notify the Purchasers, on each Friday during the Rights Exercise Period and on each Business Day during the five Business Days prior to the Expiration Time (and any extensions thereto), or more frequently if reasonably requested by the Purchasers, of the aggregate number of Rights known by the Company or the Subscription Agent to have been exercised pursuant to the Rights Offering as of the close of business on the preceding Business Day or the most recent practicable time before such request, as the case may be.

(f) The Company hereby agrees and undertakes to give the Purchasers by electronic facsimile transmission the certification by an executive officer of the Company of the number of Rights Offering Shares elected to be purchased by Eligible Holders pursuant to validly exercised Rights, the aggregate purchase price therefore at the Common Stock Per Share Purchase Price, the number of Rights Offering Shares issuable pursuant to the aggregate number of Rights that were not properly exercised by the Eligible Holders thereof during the Rights Offering (the “Unsubscribed Shares”), if any, the number of shares of Common Stock into which unredeemed Shares will be converted and the amount of cash proceeds which will be used to redeem certain Shares as set forth in the Certificate of Designation (a “Satisfaction Notice”) as soon as reasonably practicable and, in any event, within two (2) Business Days after the Expiration Time.

(g) In accordance with the Certificate of Designation, the Company shall, four (4) Business Days after the expiration of the Rights Offering, use the cash proceeds from the Rights Offering to redeem such number of Shares as may be redeemed at the Liquidation Preference (as such term is defined in the Certificate of Designation) using only such proceeds. All Shares outstanding after such redemption shall be converted into Common Stock as set forth in the Certificate of Designation.

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(h) The closing of the purchase of the Rights Offering Shares to be purchased in the Rights Offering, the redemption for cash of the Shares using the cash proceeds received from subscribers in the Rights Offering, the payment of accrued but unpaid dividends and the mandatory conversion of the unredeemed Shares into shares of Common Stock, will occur at 10:00 a.m., New York City time, on the fourth (4th) Business Day following the Expiration Time (the “Rights Offer Closing Date”), in the manner, and on the terms and conditions of the Rights Offering as will be set forth in the Rights Offering Registration Statement and the Certificate of Designation for the Shares. Delivery of the cash redemption price and the shares of Common Stock will be made by the Company to the account of the Purchaser (or to such other accounts, as the Purchaser may designate in accordance with this Agreement).

Section 4.02 Authorization. Prior to Closing, the Board of Directors (or a duly-authorized committee thereof) shall authorize the Certificate of Designation and the issuance of the Shares.

Section 4.03 Rights Offering; Registration Statements. (a) As soon as reasonably practicable following the date of the Closing Date, but in no event more than 60 days following the Closing Date, the Company shall prepare and file with the SEC a registration statement on Form S-1 relating to the offering of the Rights and the sale of shares of Common Stock pursuant to the exercise of the Rights (the “Rights Offering Registration Statement”).

(b) The Company shall: (i) provide the Purchasers with a reasonable opportunity to review the Rights Offering Registration Statement and any amendment thereto prior to its filing with the SEC and shall duly consider in good faith any comments of the Purchasers and the counsel; (ii) advise the Purchasers promptly of the time when the Rights Offering Registration Statement has become effective or any Rights Offering Prospectus or Rights Offering Prospectus supplement has been filed and shall furnish the Purchasers with copies thereof; and (iii) advise the Purchasers promptly after it receives notice of any comments or inquiries by the SEC (and furnish the Purchasers with copies of any correspondence related thereto), of the issuance by the SEC of any stop order or of any order preventing or suspending the use of the Rights Offering Registration Statement, of the initiation or threatening of any proceeding for any such purpose, or of any request by the SEC for the amending or supplementing the Rights Offering Registration Statement or for additional information, and in each such case, provide the Purchasers with a reasonable opportunity to review any such comments, inquiries, request or other communication from the SEC and to review any amendment or supplement to the Rights Offering Registration Statement before any filing with the SEC, and to duly consider in good faith any comments consistent with this Agreement and any other reasonable comments of the Purchasers and their counsel and in the event of the issuance of any stop order or of any order preventing or suspending the use of the Rights Offering Registration Statement or suspending any such qualification, to use promptly its reasonable best efforts to obtain its withdrawal. The Company’s obligation under this Section 4.03(b) shall be satisfied if it provides all notices and makes all communication specified herein to a single counsel designated by the Majority of Purchasers.

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(c) The Company shall use its commercially reasonable best efforts to have the Rights Offering Registration Statement declared effective by the SEC as soon as reasonably practicable after such filing. The Company shall take all action as may be necessary or advisable so that the Rights Offering and the issuance and sale of the Shares and the other transactions contemplated by this Agreement will be effected in accordance with the applicable provisions of the Securities Act and the Exchange Act and any state or foreign securities or Blue Sky laws, provided that the Company shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.

(d) If at any time prior to the Expiration Time, any event occurs as a result of which the Investment Decision Package, as then amended or supplemented, would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it shall be necessary to amend or supplement the Investment Decision Package to comply with applicable law, the Company will promptly notify the Purchasers of any such event and prepare an amendment or supplement to the Investment Decision Package that is reasonably acceptable in form and substance to the Purchasers that will correct such statement or omission or effect such compliance.

(e) Rule 158. The Company will generally make available to the Company’s security holders as soon as practicable an earnings statement of the Company covering a twelve-month period beginning after the date of this Agreement, which shall satisfy the provisions of Section 11(a) of the Securities Act.

(f) Rights Offering Registration Statement and Rights Offering Prospectus. The Rights Offering Registration Statement or any post-effective amendment thereto, as of the Securities Act Effective Date, will comply in all material respects with the Securities Act, and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and as of the applicable filing date of the Rights Offering Prospectus and any amendment or supplement thereto and as of the Closing Date, the Rights Offering Prospectus will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. On the date on which it is distributed and the Expiration Date, the Investment Decision Package will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Each Issuer Free Writing Prospectus, at the time of use thereof, when considered together with the Investment Decision Package, will not contain an untrue

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statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Each Preliminary Rights Offering Prospectus, at the time of filing thereof, will comply in all material respects with the Securities Act and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, the Company makes no representation and warranty with respect to any statements or omissions made in reliance on and in conformity with information relating to the Purchasers furnished to the Company in writing by the Purchasers expressly for use in the Rights Offering Registration Statement and the Rights Offering Prospectus and any amendment or supplement thereto.

For the purposes of this Agreement, (i) the term “Rights Offering Registration Statement” includes all related exhibits filed with the SEC and any post-effective amendment thereto that becomes effective; (ii) the term “Rights Offering Prospectus” means the final prospectus contained in the Rights Offering Registration Statement at the Securities Act Effective Date (including information, if any, omitted pursuant to Rule 430A, 430B or 430C and subsequently provided pursuant to Rule 424(b) under the Securities Act), and any amended form of such prospectus provided under Rule 424(b) under the Securities Act or contained in a post-effective amendment to the Rights Offering Registration Statement; (iii) the term “Investment Decision Package” means the Rights Offering Prospectus, together with any Issuer Free Writing Prospectus used by the Company to offer the shares of Common Stock to Eligible Holders pursuant to the Rights Offering, (iv) the term “Issuer Free Writing Prospectus” means each “issuer free writing prospectus” (as defined in Rule 433 of the rules promulgated under the Securities Act) prepared by or on behalf of the Company or used or referred to by the Company in connection with the Rights Offering, (v) the term “Preliminary Rights Offering Prospectus” means each prospectus included in the Rights Offering Registration Statement (and any amendments thereto) before it becomes effective, any prospectus filed with the Commission pursuant to Rule 424(a) under the Securities Act and the prospectus included in the Rights Offering Registration Statement, at the time of effectiveness that omits information permitted to be excluded under Rule 430A, 430B or 430C under the Securities Act; and (vi) “Securities Act Effective Date” means the date and time as of which the Rights Offering Registration Statement, or the most recent post-effective amendment thereto, was declared effective by the Commission.

(g) Free Writing Prospectuses. Each Issuer Free Writing Prospectus will conform in all material respects to the requirements of the Securities Act as of the date of first use or as otherwise provided for in Rule 433 under the Securities Act, and the Company will comply with all prospectus delivery and all filing requirements applicable to such Issuer Free Writing Prospectus under the Securities Act. The Company has retained in accordance with the Securities Act all Issuer Free Writing Prospectuses that were not required to be filed pursuant to the Securities Act.

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(h) No Stabilization. The Company will not take, directly or indirectly, any action designed to or that would reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares.

Section 4.04 Reporting Status. The Company’s Common Stock is registered under Section 12(g) of the Exchange Act. The Company shall use commercially reasonable efforts to timely file with the SEC all reports and other information under the Exchange Act so long as it is an issuer required to file reports and such information under the Exchange Act.

Section 4.05 Company Lock-Up. (a) Except in connection with the Recapitalization, until the earlier of (i) the Rights Offering Closing Date and (ii) January 31, 2008, or as extended by mutual agreement between the Company and the Majority of Purchasers (the “Lock-Up Period”), the Company will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement (other than a registration on Form S-8) under the Securities Act relating to, any additional shares of Common Stock or securities convertible into or exchangeable or exercisable for any shares of Common Stock, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing, without the prior written consent of the Majority of Purchasers, except (A) pursuant to the transactions contemplated by the Recapitalization Rights Offering Registration Statement and (B) with respect to stock options, restricted stock, restricted stock units or any and all other awards that are authorized under the Stock Incentive Plans, or the issuance of any shares of Common Stock upon the exercise, conversion, vesting or settlement of any stock option, restricted stock, restricted stock unit or other award outstanding under the Stock Incentive Plans or the Series A Warrants. The Company will not issue shares of Common Stock in exchange for Existing Third Lien Notes (as defined in Exhibit A hereto) unless the holder thereof executes a “lock-up” agreement (in a form reasonably acceptable to the Majority of Purchasers) substantially similar to the Stockholder Lock-Up Agreements. In addition, during the Lock-Up Period the Company will not sell any material assets other than in the ordinary course of business.

(b) Simultaneously with the execution of this Agreement, the Company will obtain agreements (in a form reasonably acceptable to the Majority of Purchasers) from all holders of common stock affiliated with Welsh Carson Andersen & Stove VIII, L.P. and Tennenbaum Capital Partners, LLC and certain members of senior management in which they will agree to (i) a “lock-up” provision for the Lock-Up Period, (ii) not seek to exercise registration rights during the Lock-Up Period, and (iii) not exercise pre-emptive rights, both as stockholders of the Company and pursuant to Section 3.04 or any other provision of the Amended and Restated Governance Agreement, dated as of July 26, 2005, as amended, among the Company and the securityholders of the Company listed on the signature pages thereof, with respect to the Rights Offering or otherwise subscribe for shares of Common Stock in the Rights Offering, (collectively, the “Stockholder Lock-Up Agreements”). The Stockholder Lock-Up Agreements shall provide that Purchasers shall be third party beneficiaries thereunder.

Section 4.06 No Integration. The Company has not made and shall not make any offers or sales of any security (other than the Shares) under circumstances that would require registration of the Shares being offered or sold hereunder under the Securities Act or cause the

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offering of the Shares to be integrated with any other offering of securities by the Company for the purpose of the federal securities law doctrine of “integration,” or any shareholder approval provision applicable to the Company or its securities.

Section 4.07 Compliance with Laws. The Company shall maintain appropriate compliance policies and procedures designed to ensure that the Company and its subsidiaries comply with all applicable laws and regulations in all material respects.

Section 4.08 Publicity. Except as otherwise required by law (including the rules and regulations of the SEC), none of the parties hereto shall issue any press release or make any other public statement, in each case relating to, connected with or arising out of this Agreement or the Purchasers’ interest in the Company or the matters contained herein or therein, without obtaining the prior consent of the Majority of Purchasers and the Company, which consent shall not be unreasonably withheld. Except as otherwise required by law, no references to any Purchaser or any of its affiliates shall be made in any public statement without such Purchaser’s or such affiliate’s prior consent.

Section 4.09 Fees and Expenses. The Company shall reimburse the Purchasers from time to time upon presentation of reasonably detailed invoices for the reasonable and actual fees of their respective counsel and financial advisor, subject to an aggregate maximum of $1 million; provided that counsel fees of any Purchaser paid or reimbursed by the Company pursuant to Section 7 of this Agreement shall not be so limited and will not count towards the above-stated maximum amount.

ARTICLE V

Section 5.01 Additional Covenants of the Purchasers. The Purchasers agree with the Company:

(a) Information. To provide the Company with such information as the Company reasonably requests regarding the Purchasers for inclusion in the Rights Offering Registration Statement; provided, however, that under no circumstances will any Purchaser be required to disclose any of its investors or portfolio holdings except as required by law.

(b) Reasonable Best Efforts. The Purchasers shall use their reasonable best efforts to take all actions, and do all things, reasonably necessary, proper or advisable on its part under this Agreement and applicable laws to cooperate with the Company and to consummate and make effective the transactions contemplated by this Agreement, including executing, delivering and filing, as applicable, any additional ancillary instruments or agreements necessary to consummate the transactions contemplated by this Agreement and to fully carry out the purposes of this Agreement and the transactions contemplated hereby and thereby, including:

(i) preparing and filing as soon as reasonably practicable all documentation to effect all necessary notices, reports and other filings and to obtain as soon as reasonably practicable all consents, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any third party or governmental entity;

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(ii) defending any lawsuits or other actions or proceedings, if any, to which the Purchasers may be named a party, whether judicial or administrative, challenging this Agreement or any other agreement contemplated by this Agreement or the consummation of the transactions contemplated hereby and thereby, including seeking to have any stay or temporary restraining order entered by any court or other governmental entity vacated or reversed; and

(iii) executing, delivering and filing, as applicable, any additional ancillary instruments or agreements necessary to consummate the transactions contemplated by this Agreement and to fully carry out the purposes of this Agreement and the transactions contemplated hereby.

(c) No Stabilization. The Purchasers will not take, directly or indirectly, any action designed to or that would reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares.

(d) Confidentiality Agreements. The provisions of the several confidentiality agreements entered into between the Company and the Purchasers (the “Purchasers Confidentiality Agreements”) shall remain in effect.

ARTICLE VI

Conditions To The Obligations of The Parties

Section 6.01 Conditions to the Obligations of the Purchasers. The obligations of the Purchasers hereunder to consummate the transactions contemplated hereby shall be subject to the satisfaction prior to the Closing Date of each of the following conditions (which may be waived in whole or in part by the Majority of Purchasers in their sole discretion).

(a) Recapitalization. The Company shall have consummated simultaneously with the Closing the other transactions contemplated by the Recapitalization without material modification.

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(b) No Legal Impediment to Issuance. The Board of Directors of the Company (or any duly authorized committee thereof) shall have approved the Certificate of Designation and authorized the issuance of the Shares, and no action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority, and no judgment, injunction, decree or order of any federal, state or foreign court shall have been issued, that prohibits the implementation of the Rights Offering or the transactions contemplated by this Agreement.

(c) Good Standing. The Purchasers shall have received on and as of the Closing Date satisfactory evidence of the good standing of the Company in its jurisdiction of organization, in writing or any standard form of telecommunication from the appropriate governmental authorities of such jurisdiction.

(d) Representations and Warranties. The representations and warranties of the Company contained in this Agreement shall be true and correct as of the date hereof and as of the Closing Date after giving effect to the transactions contemplated hereby with the same effect as if made on and as of the Closing Date (except for representations and warranties made as of a specified date, which shall be true and correct only as of the specified date), except where the failure to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to have, a Material Adverse Effect.

(e) Covenants. The Company shall have performed and complied with all of its respective covenants and agreements contained in this Agreement and in any other document delivered pursuant to this Agreement through the Closing Date.

(f) Fees and Expenses. The Company shall have paid all fees, costs and expenses payable to the Purchasers as contemplated by Section 4.08.

(g) No Material Adverse Effect. Since the date of this Agreement, there shall not have occurred any changes or events that, individually or in the aggregate would reasonably be expected to result in a Material Adverse Effect.

(h) Certificate of Officer. The Purchasers shall have received a certificate executed by the Company’s Chief Executive Officer or other senior executive officer of the Company certifying that the conditions set forth in 6.01(b), (d), and (e) have been fulfilled.

(i) Stockholder Lock-Up Agreements. The Stockholder Lock-Up Agreements shall have been executed and delivered.

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(j) Opinion of Counsel. The Purchasers shall have received an opinion of counsel to the Company, in form reasonably satisfactory to the Majority of Purchasers, in respect of the transactions contemplated by this Agreement.

Section 6.02 Conditions to the Obligations of the Company. The obligation of the Company to issue and sell the Shares are subject to the following conditions (which may be waived in whole or in part by the Company in its sole discretion):

(a) Authorization of Issuance; No Legal Impediment to Issuance. The Board of Directors of the Company (or any duly authorized committee thereof) shall have approved the Certificate of Designation and authorized the issuance of the Shares, and no action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority, and no judgment, injunction, decree or order of any federal, state or foreign court shall have been issued, that prohibits the implementation of the Rights Offering or the transactions contemplated by this Agreement.

(b) Representations and Warranties. The representations and warranties of each Purchaser contained in this Agreement shall be true and correct as of the date hereof and as of the Closing Date with the same effect as if made on the Closing Date (except for the representations and warranties made as of a specified date, which shall be true and correct only as such specified date), except where the failure to be so true and correct, individually or in the aggregate, has not and would not reasonably be expected, to prohibit, materially delay or materially and adversely impact the Purchaser’s performance of its obligations under this Agreement.

(c) Covenants. The Purchaser shall have performed and complied with all of its covenants and agreements contained in this Agreement and in any other document delivered pursuant to this Agreement through the Closing Date.

(d) Recapitalization. The Company shall have consummated the other transactions contemplated by the Recapitalization simultaneously with the Closing without material modification.

ARTICLE VII

Indemnification and Contribution

Section 7.01 Whether or not the Rights Offering is consummated or this Agreement is terminated, the Company (in such capacity, the “Indemnifying Party”) shall indemnify and hold harmless the Purchasers, their respective Affiliates and their respective officers, directors, employees, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses, claims, damages, liabilities and reasonable expenses, joint or

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several, arising out of circumstances existing on or prior to the Rights Offering Closing Date (“Losses”) to which any such Indemnified Person may become subject arising out of or in connection with any claim, challenge, litigation, investigation or proceeding (“Proceedings”) instituted by a third party with respect to the Rights Offering, this Agreement, the Rights Offering Registration Statement, any Preliminary Rights Offering Prospectus, the Rights Offering Prospectus, any Issuer Free Writing Prospectus, the Investment Decision Package, any amendment or supplement thereto or the transactions contemplated by any of the foregoing and shall reimburse such Indemnified Persons for any reasonable legal or other reasonable out-of-pocket expenses incurred in connection with investigating, responding to or defending any of the foregoing; provided that the foregoing indemnification will not apply to Losses to the extent that they resulted from (a) any breach by such Indemnified Person of this Agreement, (b) gross negligence or willful misconduct on the part of such Indemnified Person or (c) statements or omissions in the Rights Offering Registration Statement, any Preliminary Rights Offering Prospectus, the Rights Offering Prospectus, any Issuer Free Writing Prospectus or any amendment or supplement thereto made in reliance upon or in conformity with information relating to such Indemnified Person furnished to the Company in writing by or on behalf of such Indemnified Person expressly for use in the Rights Offering Registration Statement, any Rights Offering Preliminary Prospectus, the Rights Offering Prospectus, any Issuer Free Writing Prospectus or any amendment or supplement thereto. If for any reason the foregoing indemnification is unavailable to any Indemnified Person (except as set forth in the proviso to the immediately preceding section) or insufficient to hold it harmless, then the Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Person as a result of such Losses in such proportion as is appropriate to reflect not only the relative benefits received by the Indemnifying Party on the one hand and such Indemnified Person on the other hand but also the relative fault of the Indemnifying Party on the one hand and such Indemnified Person on the other hand as well as any relevant equitable considerations. It is hereby agreed that the relative benefits to the Indemnifying Party on the one hand and all Indemnified Persons on the other hand shall be deemed to be in the same proportion as (i) the total value received or proposed to be received by the Company pursuant to the sale of the Shares contemplated by this Agreement bears to (ii) the cash proceeds paid to redeem the Shares. The indemnity, reimbursement and contribution obligations of the Indemnifying Party under this Section 7 shall be in addition to any liability that the Indemnifying Party may otherwise have to an Indemnified Person and shall bind and inure to the benefit of any successors, assigns, heirs and personal representatives of the Indemnifying Party and any Indemnified Person.

Section 7.02 Promptly after receipt by an Indemnified Person of notice of the commencement of any Proceedings with respect to which the Indemnified Person may be entitled to indemnification hereunder, such Indemnified Person will, if a claim is to be made hereunder against the Indemnifying Party in respect thereof, notify the Indemnifying Party in writing of the commencement thereof; provided that (i) the omission so to notify the Indemnifying Party will not relieve the Indemnifying Party from any liability that it may have hereunder except to the extent it has been prejudiced by such failure and (ii) the omission so to notify the Indemnifying Party will not relieve it from any liability that it may have to an Indemnified Person otherwise than on account of this Section 7. In case any such Proceedings are brought against any Indemnified Person and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein, and, to the extent that it may elect by written notice delivered to such Indemnified Person, to assume the

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defense thereof, with counsel reasonably satisfactory to such Indemnified Person; provided that if the defendants in any such Proceedings include both such Indemnified Person and the Indemnifying Party and such Indemnified Person shall have concluded that there may be legal defenses available to it that are different from or additional to those available to the Indemnifying Party, such Indemnified Person shall have the right to select separate counsel, which selection shall be subject to the reasonable approval of the Indemnifying Party, to assert such legal defenses and to otherwise participate in the defense of such Proceedings on behalf of such Indemnified Person. Upon receipt of notice from the Indemnifying Party to such Indemnified Person of its election so to assume the defense of such Proceedings and approval by such Indemnified Person of counsel, the Indemnifying Party shall not be liable to such Indemnified Person for expenses incurred by such Indemnified Person in connection with the defense thereof (other than reasonable costs of investigation) unless (i) such Indemnified Person shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the preceding sentence (it being understood, however, that the Indemnifying Party shall not be liable for the expenses of more than one separate counsel in any jurisdiction, approved by the Investor (or the Principal Additional Investor if the Investor is not an Indemnified Person), representing the Indemnified Persons who are parties to such Proceedings), (ii) the Indemnifying Party shall not have employed counsel reasonably satisfactory to such Indemnified Person to represent such Indemnified Person within a reasonable time after notice of commencement of the Proceedings or (iii) the Indemnifying Party shall have authorized in writing the employment of counsel for such Indemnified Person.

Section 7.03 The Indemnifying Party shall not be liable for any settlement of any Proceedings effected without its written consent (which consent shall not be unreasonably withheld). If any settlement of any Proceeding is consummated with the written consent of the Indemnifying Party or if there is a final judgment for the plaintiff in any such Proceedings, the Indemnifying Party agrees to indemnify and hold harmless each Indemnified Person from and against any and all Losses by reason of such settlement or judgment in accordance with, and subject to the limitations of, the provisions of this Section 7. The Indemnifying Party shall not, without the prior written consent of an Indemnified Person (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened Proceedings in respect of which indemnity has been sought hereunder by such Indemnified Person unless (i) such settlement includes an unconditional release of such Indemnified Person in form and substance reasonably satisfactory to such Indemnified Person from all liability on the claims that are the subject matter of such Proceedings and (ii) such settlement does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

ARTICLE VIII

Termination

Section 8.01 Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing Date:

(a) by mutual written consent of the Company, on the one hand, and the Majority of Purchasers, on the other hand;

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(b) by the Company

(i) if there has been a breach of any covenant or a breach of any representation or warranty of the Purchasers, which breach would cause the failure of any condition precedent set forth in Section 6.02, provided, that any such breach of a covenant or representation or warranty is not capable of cure on or prior to August 31, 2007; or

(ii) after August 31, 2007; provided that (1) the Closing Date has not occurred by such date and (2) the failure of the closing to have occurred is not due to a breach of any covenant or a breach of any representation or warranty of the Company;

(c) by the Majority of Purchasers,

(i) if there has been a breach of any covenant or a breach of any representation or warranty of the Company, which breach would cause the failure of any condition precedent set forth in Section 6.01, provided, that any such breach of a covenant or representation or warranty is not capable of cure on or prior to August 31, 2007; or

(ii) after August 31, 2007; provided, that the Closing Date has not occurred by such date and (2) the failure of the closing to have occurred is not due to a breach of any covenant or a breach of any representation or warranty of any of the Purchasers.

In addition, if this Agreement is terminated, the Company shall pay to the Purchasers any actual unpaid expenses as provided in Section_4.08 hereof, unless this Agreement is terminated pursuant to Section 8.01(b)(i).

(d) Upon termination under this Section 8.01, all rights and obligations of the parties under this Agreement shall terminate without any liability of any party to any other party except for the provisions in Section 5.01(d) and in Article IX, all of which shall survive termination of this Agreement and all amounts paid by Purchasers to the Escrow Agent shall be promptly returned to Purchasers, together with accrued interest at the rate of 6% per annum; provided that nothing contained herein shall release any party hereto from liability for any willful breach.

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ARTICLE IX

Miscellaneous

Section 9.01 Surviving Provisions. The representations and warranties of the Company and the Purchasers set forth in Articles II and III, the covenants contained in Article IV and the agreements and covenants set forth in Article VII and this Article IX shall survive the execution and delivery hereof and the Closing hereunder through and including the Rights Offering Closing Date.

Section 9.02 Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, real estate transfer or gains and stock transfer Taxes incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the Company.

Section 9.03 Entire Agreement. This Agreement (including all schedules and exhibits hereto), the Escrow Agreement together with the Purchaser Confidentiality Agreements constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the Escrow Agreement and the Purchaser Confidentiality Agreements supersede all prior agreements and understandings, whether written or oral, among the parties hereto with respect to the subject matter hereof and thereof.

Section 9.04 Amendment and Waiver. This Agreement may not be amended or any provision hereof waived or modified except by an instrument in writing signed on behalf of each of the Company and the Majority of Purchasers.

Section 9.05 Extension; Waiver. At any time prior to the Rights Offering Closing Date, the Company for itself and the Majority of Purchasers for the Purchasers may (i) extend the time for the performance of any of the obligations or other acts of the other party, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party. The failure of any party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights nor shall any single or partial exercise by any party to this Agreement of any of its rights under this Agreement preclude any other or further exercise of such rights or any other rights under this Agreement.

Section 9.06 Notices. Any Notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile, in each case addressed to a party. The addresses for such communications shall be:

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If to the Company:

ITC^DeltaCom, Inc.

7037 Old Madison Pike

Huntsville, Alabama 35806

Attention: Richard E. Fish, Jr.

Facsimile: (256) 382-3935

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: J. Gregory Milmoe

Facsimile: (917) 777-3770

If to any Purchaser:

Joshua Tree Capital Management, LLC

One Maritime Plaza, Suite 750

San Francisco, CA 94111

Attention: Vikas Tandon

Facsimile: (415) 568-4268

H Partners LP

152 West 57^th Street

52^nd Floor

New York, NY 10019

Attention: Heather Broome

Facsimile: (212) 974-7181

Trace Partners, LP

104 Woodmont Boulevard, Suite 200,

Nashville, TN 37205

Attention: Mark Eberle

Facsimile: (615) 386-0412

With a copy to:

Kasowitz Benson Torres & Friedman LLP

1633 Broadway

New York, NY 10019

Attention: Michael D. Rosenbloom

Facsimile: (212) 506-1800

Section 9.07 Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in whole or in part, by either of the parties (whether by operation of law or otherwise) without the prior written consent of the other party, and any such assignment that is not so consented to shall be null and void.

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Section 9.08 Exhibits and Annexes; Interpretation. (a) The headings contained in this Agreement and in any Exhibit hereto and in the table of contents to this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit not otherwise defined therein shall have the meaning as defined in this Agreement.

(b) For all purposes hereof, (i) the words “include”, “includes”, “included” and “including” shall be deemed to be followed by the phrase “without limitation” and (ii) “person” means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental Entity or other entity.

Section 9.09 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.

Section 9.10 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS AGREEMENT.

Section 9.11 Consent to Jurisdiction. Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of any Delaware State court or Federal court of the United States of America sitting in Delaware, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and agrees that all claims in respect of any such action or proceeding may be heard and determined only in such Delaware State court or, to the extent permitted by law, in such Federal court, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any Delaware State court or in any such Federal court, (c) 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, and (d) 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. Service of any process, summons, notice or document by registered mail addressed to the Company at the address specified in Section 9.06 shall be effective service of process against the Company for any suit, action or proceeding brought in any such court.

Section 9.12 Specific Performance. Each of the parties recognizes that any breach of the terms of this Agreement may give rise to irreparable harm for which money damages would not be an adequate remedy. Accordingly, each of the parties agrees that the

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other party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the parties and the matter, in addition to any other remedy to which it may be entitled, at law or in equity.

Section 9.13 Counterparts. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

Section 9.14 Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby, including but not limited to making all required filings with governmental agencies or authorities.

Section 9.15 No Third Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto, any legal or equitable rights hereunder.

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IN WITNESS WHEREOF, the Company and the Purchasers have caused this Agreement to be duly executed as of the date first written above.

FOR THE COMPANY     ITC^DELTACOM, INC.,
by	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Sr. Vice President

FOR THE PURCHASERS     H PARTNERS LP (Purchaser of 237,215 Shares)
/s/ Rehan Jaffer
Name:	Rehan Jaffer
Title:	Managing Member
JOSHUA TREE CAPITAL PARTNERS (Purchaser of 150,000 Shares) by: Joshua Tree Capital Management, LP, its General Partner by: Joshua Tree Capital Management, LLC, its General Partner
/s/ Vikas Tandon
Name:	Vikas Tandon
Title:	Managing Member
TRACE PARTNERS, LP (Purchaser of 25,000 Shares) by: Trace Management LLC, its General Partner
By:	/s/ Mark Eberle
Name:	Mark Eberle
Title:	Managing Member
By:	/s/ Kevin Nowat
Name:	Kevin Nowat
Title:	Attorney-in-Fact

EXHIBIT A

RECAPITALIZATION

The Company’s intended recapitalization of its capital structure consists of the debt and equity financing arrangements set forth below. In addition to the arrangements described herein, the Recapitalization also contemplates the sale and issuance of the Company’s Series H 6% Convertible Redeemable Preferred Stock as described more fully in the Equity Purchase and Rights Offering Agreement.

A. Debt Financing Arrangement

Pursuant to the debt financing arrangements in place by virtue of a commitment letter entered into on June 8, 2007 (as amended by virtue of the arrangement contemplated by the Equity Purchase and Rights Offering Agreement) with Credit Suisse Securities (USA) LLC and Credit Suisse, Cayman Islands Branch (collectively with their affiliates, “Credit Suisse”), and with Special Value Opportunities Fund, LLC, Special Value Expansion Fund, LLC, Special Value Continuation Partners, LP and Tennenbaum Opportunities Partners, LP (all managed by Tennenbaum Capital Partners, LLC (“TCP”)), Interstate FiberNet, Inc., a wholly-owned subsidiary of the Company (the “Borrower”) intends to obtain (1) from Credit Suisse new first lien senior secured credit facilities consisting of (a) a $10,000,000 aggregate principal amount first lien senior secured revolving credit facility (the Revolving Credit Facility”) and (b) a $230,000,000 aggregate principal amount first lien senior secured term loan facility (the “First Lien Loan Facility”, and together with the Revolving Credit Facility, the “First Lien Credit Facilities”), and (2) from TCP funds a new $75,000,000 aggregate principal amount second lien senior secured term loan facility (the “Second Lien Credit Facility,” and together with the First Lien Credit Facilities, the “Credit Facilities”). The First Lien Credit Facilities will be syndicated to other institutional lenders before the facility closing date.

After the closing date, the Company may elect, subject to pro forma compliance with specified financial covenants and other conditions, to solicit the lenders to increase commitment for borrowings under the Revolving Credit Facility and to increase by up to $50 million the total principal amount of borrowings available under the First Lien Loan Facility.

The obligations under the Credit Facilities would be guaranteed by the Company and the Company’s other subsidiaries. Moreover, the obligations would be secured by first-priority liens on substantially all of the assets of the Company and its subsidiaries, in the case of the First Lien Credit Facilities, and second-priority liens on substantially all of the assets of the Company and its subsidiaries, in the case of the Second Lien Credit Facility.

B. Equity Financing Arrangement

Pursuant to the Company’s proposed recapitalization, (1) all of the Company’s outstanding Series B Warrants, Series C Warrants, and Series D Warrants will be exchanged by the holders thereof for shares of Common Stock, (2) 50% of the outstanding shares of the Company’s 8% Series A Convertible Redeemable Preferred Stock will be redeemed for the

liquidation preference plus accrued and unpaid dividends using in part proceeds from the sale of the Shares and the remainder converted into shares of Common Stock, (3) all of the outstanding shares of 8% Series B Convertible Redeemable Preferred Stock and, to the extent there are any, 8% Series C Convertible Redeemable Preferred Stock will be converted into shares of Common Stock, and (4) all outstanding restricted stock units for shares of the Company’s 8% Series A Convertible Redeemable Preferred Stock, the Company’s 8% Series B Convertible Redeemable Preferred Stock and Series D Warrants held by certain members of the Company’s senior management will be converted into or exchanged for restricted stock units for an aggregate of 1,575,167 shares of Common Stock under the Company’s Executive Stock Incentive Plan. More specifically, commitment letters were entered into with the WCAS Funds (as defined below) and the TCP Funds (as defined below) contemplating the following:

1. WCAS Equity Commitment Letter. Pursuant to a commitment letter dated June 8, 2007 (as amended from time to time, the “WCAS Equity Commitment Letter”) signed by Welsh, Carson, Anderson & Strow VIII, L.P. (together with its affiliated investment funds, the “WCAS Funds”), the WCAS Funds intend to, among other things: (a) purchase shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) for an aggregate purchase price of $21,000,000; (b) exchange approximately $23.5 million in principal amount of their interest in the Borrower’s third lien senior secured notes due 2009 (the “Existing Third Lien Notes”) into Common Stock; (c) convert their ownership in the Company’s 8% Series B convertible redeemable preferred stock into shares of Common Stock; and (d) convert their ownership in the Company’s Series B Warrants and Series C Warrants into Common Stock.

2. TCP Equity Commitment Letter. Pursuant to a commitment letter dated June 8, 2007 (as amended from time to time, the “TCP Equity Commitment Letter”) signed by Special Value Absolute Return Fund, LLC, Special Value Bond Fund II, LLC and Special Value Continuation Partners, LP (collectively, the “TCP Funds”), the TCP Funds would, among other things: (a) exchange approximately $25 million in principal amount of their interest in the Existing Third Lien Notes into Common Stock, and (b) convert their ownership in the Company’s Series D Warrants into Common Stock.

3. Additional Existing Third Lien Note Exchange. Holders of Existing Third Lien Notes other than the WCAS Funds and the TCP Funds, will exchange approximately $3.8 million in principal amount of such notes into Common Stock at $3.03 per share.

4. Participation in Rights Offering. None of the shares of Common Stock held by WCAS Funds, TCP Funds, certain members of senior management, or received by additional holders of Existing Third Lien Notes who converted such Notes into Common Stock will participate in the Rights Offering. The Overview of DeltaCom Equity Structure attached hereto as Schedule 1 to this Exhibit A sets forth the anticipated Common Stock ownership of the Company following the Rights Offering.

C. Existing Debt Financing

Pursuant to the Recapitalization, the Company will use the proceeds of borrowings from the First Lien Loan Facility and the Second Lien Credit Facility and sales of Common Stock for cash to repay in full all outstanding obligations in respect of (1) the Borrower’s first lien senior secured notes due 2009, (2) the Borrower’s Second Amended and Restated Credit Agreement, dated as of July 26, 2005, (3) the Existing Third Lien Notes (other than the Existing Third Lien Notes to be converted into Common Stock as described above), (4) the Company’s 10.5% senior unsecured notes due 2007, (5) the Company’s 10% unsecured vendor note due 2008, and (6) the Company’s existing capital leases (collectively, the “Existing Debt”), in each case including all principal, premium and accrued and unpaid interest, fees and other amounts with respect thereto. All guarantees and security with respect to the Existing Date will be unconditionally released upon full payment.

***

EXHIBIT B

ITC^DELTACOM, INC.

CERTIFICATE OF DESIGNATION OF THE POWERS, PREFERENCES AND

RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF 6%

SERIES H CONVERTIBLE REDEEMABLE PREFERRED STOCK AND

QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

ITC^DeltaCom, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify that, pursuant to the authority conferred upon the board of directors of the Corporation (the “Board of Directors”) by the Corporation’s Restated Certificate of Incorporation, and pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors is authorized to issue preferred stock of the Corporation in one or more series, and that a duly authorized committee of the Board of Directors has duly approved and adopted the following resolution on July ___, 2007:

RESOLVED, that, pursuant to the authority vested in the Board of Directors by the Restated Certificate of Incorporation of the Corporation and in the Committee of Independent Directors (the “Committee”) by the Board of Directors, and pursuant to Section 151 of the General Corporation Law of the State of Delaware, the Committee hereby creates, authorizes and provides for the issuance of 6% Series H Convertible Redeemable Preferred Stock, par value $0.01 per share, consisting of 412,215 shares and having the powers, preferences and relative, participating, optional and other special rights and the qualifications, limitations and restrictions thereof that are set forth in the Restated Certificate of Incorporation and in this resolution as follows:

Section 1    Designation and Amount. There is hereby created out of the authorized and unissued shares of the preferred stock of the Corporation a series of preferred stock designated as the 6% Series H Convertible Redeemable Preferred Stock (the “Series H Preferred Stock”). The number of shares constituting the Series H Preferred Stock shall be 412,215, with a liquidation preference of $100.00 per share (the “Liquidation Preference”).

Section 2    Dividends and Distributions.

(a) Each share of Series H Preferred Stock shall be entitled to receive cash dividends in an amount equal to 6% per annum of the Liquidation Preference. Dividends with respect to each share of Series H Preferred Stock shall accrue and shall be cumulative, whether or not declared, from the date of issue of such share. In addition, each share of Series H Preferred Stock shall be entitled to receive any dividend or distribution of other property, if any, declared

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and paid by the Corporation on shares of the Corporation’s common stock, par value $0.01 per share (the “Common Stock”) during the applicable dividend period multiplied by the number equal to the number of shares of Common Stock into which each share of Series H Preferred Stock will be convertible in accordance with the conversion provisions set forth in Section 7(b) herein; provided, however, that no distribution shall be made to the holders of the Series H Preferred Stock in connection with the rights offering to holders of Common Stock to subscribe for additional shares of Common Stock for $3.03 per share (the “Rights Offering”) contemplated by the recapitalization transactions consummated on the date of the initial issuance of shares of Series H Preferred Stock.

(b) An amount equal to any accrued cash dividends with respect to a share of Series H Preferred Stock shall be paid to the holder of such share on the date such share is redeemed pursuant to Section 5 or converted into Common Stock pursuant to Section 7.

(c) Nothing herein contained shall in any way or under any circumstances be construed or deemed to require the Board of Directors to declare, or the Corporation to pay or set apart for payment, any dividends on shares of Series H Preferred Stock at any time, except to the extent of funds legally available therefor.

Section 3    Ranking. The Series H Preferred Stock shall, with respect to dividend rights and distributions upon the liquidation, dissolution or winding-up of the Corporation, rank senior to all classes of Common Stock and each other class of capital stock or series of preferred stock issued by the Corporation.

Section 4    Voting Rights. From and after the date of the initial issuance of the Series H Preferred Stock, for all matters submitted to a vote of the stockholders of the Corporation, the holders of each share of Series H Preferred Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such share of Series H Preferred Stock will be convertible in accordance with the conversion provisions set forth in Section 7(b) herein. The holders of the Series H Preferred Stock shall be given notice of any meeting of stockholders of which the holders of Common Stock are given notice in accordance with the bylaws of the Corporation. The holders of Series H Preferred Stock and the holders of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation, except as required by law or as provided in Sections 8 and 9 herein. Holders of Series H Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action, except as provided in Sections 8 and 9 herein. The holders of the Series H Preferred Stock shall be entitled to act by written consent.

Section 5    Redemption.

(a) Between the initial date of issuance of the shares of Series H Preferred Stock and the consummation of the Rights Offering if it occurs, shares of Series H Preferred Stock shall not be redeemable by the Corporation.

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(b) Four Business Days after the expiration of the Rights Offering (the “Rights Offering Redemption Date”), the Corporation, without further notice, shall use the entire cash proceeds received from subscribers for Common Stock in the Rights Offering (the “Redemption Proceeds”) to redeem outstanding shares of Series H Preferred Stock at a per share redemption price equal to the Liquidation Preference. In the event that fewer than all the outstanding shares of Series H Preferred Stock are able to be redeemed using the Redemption Proceeds, the shares to be redeemed shall be selected pro rata among the holders of outstanding shares. Notwithstanding anything to the contrary contained herein, shares of Series H Preferred Stock shall be redeemed only out of the Redemption Proceeds and the Corporation shall have no obligation to redeem any shares of Series H Preferred Stock out of any other corporate funds. Once a share of Series H Preferred Stock is redeemed, dividends will cease to accrue with respect to such share and all rights of the stockholder as a holder thereof, including the right to receive Common Stock upon conversion, shall cease. “Business Day” means any day other than a Saturday, a Sunday or any day on which the banking institutions in the City of New York or at a place payment is to be received are authorized by law, regulation or executive order to remain closed.

(c) From and after the Rights Offering Redemption Date, each share of Series H Preferred Stock redeemed shall represent only the right to receive its pro rata share of the Redemption Proceeds plus an amount equal to accrued dividends through the Rights Offering Redemption Date, which the Corporation shall deliver to the holder upon surrender of certificates for shares of Series H Preferred Stock.

Section 6    Reacquired Shares. Shares of Series H Preferred Stock purchased, redeemed or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares of Series H Preferred Stock upon their retirement and cancellation shall not be reissued as shares of Series H Preferred Stock and shall become authorized but unissued shares of preferred stock undesignated to a series and may be reissued as part of a new series of preferred stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.

Section 7    Conversion.

(a) Between the initial date of issuance of the Series H Preferred Stock and the earlier of (i) the Rights Offering Redemption Date, and (ii) January 31, 2008, the shares of Series H Preferred Stock shall not be convertible.

(b) On the Rights Offering Redemption Date each share of Series H Preferred Stock which is not redeemed on such date automatically and without the need for any further action by the holder or the Corporation shall be converted into 33 shares of Common Stock. If the Rights Offering Redemption Date has not occurred on or before January 31, 2008, each outstanding share of Series H Preferred Stock on January 31, 2008 automatically and without the need for any further action by the holder or the Corporation shall be converted into 33 shares of Common Stock, unless such date is extended by mutual agreement between the Corporation and a majority of the outstanding shares of the Series H Preferred Stock, in which event, such share of Series H

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Preferred Stock shall be converted into Common Stock on such extended date. Upon conversion of any share of Series H Preferred Stock, the certificate representing such share of Series H Preferred Stock shall automatically represent the number of shares of Common Stock into which such share of Series H Preferred Stock was converted.

(c) Upon conversion of a share of Series H Preferred Stock into Common Stock, the Corporation shall pay to the holder an amount equal to all accrued dividends with respect to that share.

(d) The Corporation at all times shall reserve and keep available for issuance upon the conversion of the Series H Preferred Stock such number of its authorized but unissued shares of Common Stock as shall from time to time be sufficient to permit the conversion of all outstanding shares of Series H Preferred Stock, and shall take all action required to increase the authorized number of shares of Common Stock if at any time there shall be insufficient authorized unissued shares of Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series H Preferred Stock.

(e) The issuance or delivery of certificates for Common Stock upon the conversion of shares of Series H Preferred Stock shall be made without charge to the converting holder of such shares for such certificates or for any tax in respect of the issuance or delivery of such certificates or the securities represented thereby, and such certificates shall be issued or delivered in the respective names of, or in such names as may be directed by, the holders of the shares converted; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any such certificate in a name other than that of the holder of the shares of Series H Preferred Stock converted, and the Corporation shall not be required to issue or deliver such certificate unless or until the person or persons requesting the issuance or delivery thereof shall have paid to the Corporation the amount of such tax or shall have established to the reasonable satisfaction of the Corporation that such tax has been paid.

Section 8    Amendment of the Certificate of Designation. So long as any shares of Series H Preferred Stock are outstanding, neither (a) this Certificate of Designation nor (b) the terms of the Common Stock purchase warrants initially issued on October 29, 2002 shall be amended in any manner without, in addition to any other vote required by law, the affirmative vote of the holders of a majority of the outstanding shares of Series H Preferred Stock, voting separately as a class.

Section 9    Special Voting Rights. In addition to any other vote required by law, the affirmative vote of the holders of a majority of the outstanding shares of Series H Preferred Stock, voting separately as a class, shall be required to authorize the Corporation to (a) declare, make, pay or set aside funds for the payment of dividends upon any other class of shares of the capital stock of the Corporation or (b) purchase or otherwise redeem any shares of any other class of shares of the capital stock of the Corporation; except, with respect to (a) and (b) above, pursuant to stock incentive plans of the Corporation existing on the date of the initial issuance of the shares of Series H Preferred Stock; provided, however, that the provisions of this Section 9

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shall not apply in respect of the authorization or payment of any rights to acquire shares of Common Stock as contemplated by the Equity Purchase and Rights Offering Agreement dated July 16, 2007 by and among the Corporation and the purchasers listed on the signature pages thereto, as may be amended from time to time, and the transactions contemplated thereby.

IN WITNESS WHEREOF, this Certificate of Designation has been duly executed by the Corporation’s authorized Officer this      day of July, 2007.

ITC^DeltaCom, Inc.
By:
Name:	J. Thomas Mullis
Title:	Senior Vice President – Legal and Regulatory

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EX-10.6

Exhibit 10.6

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT (this “Agreement”), dated as of July 31, 2007, is made by and among ITC^DeltaCom, Inc., a Delaware corporation (“Parent”), Interstate FiberNet, Inc., a wholly-owned subsidiary of Parent and a Delaware corporation (the “Company”), and each of the persons or entities listed on the signature pages hereto under the heading “WCAS Holders” (individually, a “WCAS Holder” and collectively, the “WCAS Holders”).

RECITALS

WHEREAS, Parent, the Company, certain subsidiary guarantors of Parent, certain banks, financial institutions and other institutional lenders (including the WCAS Holders), Tennenbaum Capital Partners, LLC (as agent), and TCP Agency Services, LLC (as collateral agent), entered into that certain Securities Purchase Agreement dated as of July 26, 2005, whereby the Company issued third lien, senior secured notes due September 2009 (the “Third Lien Notes”) in the aggregate principal amount of $50.8 million to various investors, including the WCAS Holders; and

WHEREAS, the Third Lien Notes are supported by Parent’s full and unconditional guarantee; and

WHEREAS, Parent intends to consummate a recapitalization of its corporate structure as described in Exhibit A annexed hereto (the “Recapitalization”); and

WHEREAS, on June 8, 2007, Welsh, Carson, Anderson & Stowe VIII, L.P., entered into a commitment letter whereby it confirmed, among other things, its intention to exchange or cause its affiliated investment funds to exchange $23.5 million principal amount of Third Lien Notes (the “WCAS Third Lien Notes”) and all preferred stock and warrants of Parent held by them for common stock of Parent, par value $0.01 per share (the “Common Stock”) in connection with the Recapitalization, which commitment letter was later amended by a supplemental commitment letter and lock-up agreement dated as of July 16, 2007 (the Stockholder Lock-Up Agreement”); and

WHEREAS, subject to the terms and conditions of this Agreement, the WCAS Holders agree to exchange the WCAS Third Lien Notes for Common Stock, and the Company agrees to issue to the WCAS Holders shares of Common Stock in exchange for the WCAS Third Lien Notes.

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

ARTICLE I

EXCHANGE OF THIRD LIEN NOTES

Section 1.1. Exchange of Notes. Upon the terms and subject to the conditions set forth herein, the WCAS Holders hereby agree to exchange their WCAS Third Lien Notes for, and Parent hereby agrees to issue and deliver to the WCAS Holders in exchange for such Notes, a total of 7,757,524 shares of Common Stock (the “WCAS Third Lien Notes Conversion”). Schedule 1 hereto lists, as the date of this Agreement, (i) each WCAS Holder, (ii) the amount of WCAS Third Lien Notes held by each WCAS Holder as of the Closing Date, as reflected in the Company’s books and records, (iii) the total amount of WCAS Third Lien Notes that will be exchanged, (iv) the amount of cash to be received by each WCAS Holder for Third Lien Notes they own that are not being converted to Common Stock, and (v) the total number of Common Stock that are being issued to such WCAS Holder upon effectiveness of the WCAS Third Lien Notes Conversion (the “Conversion Shares”). The WCAS Third Lien Notes Conversion will be effective, and the WCAS Holders will be deemed to be the holders of the Conversion Shares, as of the closing date of the Recapitalization (the “Closing Date”).

Section 1.2. Deliveries.

(a) On the Closing Date, each WCAS Holder shall tender to the Company for cancellation all WCAS Third Lien Notes held by such WCAS Holder, duly endorsed in blank.

(b) Promptly after the Closing Date, Parent shall deliver, or cause Parent’s transfer agent for the Conversion Shares to deliver, to each WCAS Holder a share certificate or certificates, each registered in the name of such WCAS Holder, representing the Conversion Shares.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE WCAS HOLDERS

As of the Closing Date, each WCAS Holder, severally and not jointly, represents and warrants to Parent and the Company, as follows:

Section 2.1. Acquisition for Investment. Such WCAS Holder is acquiring the Conversion Shares for its own account, for investment and not with a view to, or for sale in connection with, the distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) (it being understood that except as otherwise provided in this Agreement, such WCAS Holder does not agree to hold the Conversion Shares for any minimum or other specific term and reserves the right to dispose of the Conversion Shares at any time in accordance with the Securities Act and state securities laws applicable to such disposition).

Section 2.2 Accredited Investor Status. Such WCAS Holder is an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. Such WCAS Holder has sufficient knowledge and experience in financial and business matters so as to

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be capable of evaluating the merits and risks of its investment in the Conversion Shares and is capable of bearing the economic risks of such investment. Such WCAS Holder understands that its investment in the Conversion Shares involves a significant degree of risk.

Section 2.3 Sales or Transfer. Such WCAS Holder understands that the sale or re-sale of the Conversion Shares has not been and is not being registered under the Securities Act or any applicable state securities laws, and that the Conversion Shares may not be sold or otherwise transferred unless (a) the Conversion Shares are sold or transferred pursuant to an effective registration statement under the Securities Act and applicable state securities laws, (b) such WCAS Holder shall have delivered to the Company an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the Conversion Shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, or (c) the Conversion Shares are sold pursuant to Rule 144 under the Securities Act.

Section 2.4 Stockholder Lock-Up Agreement. Such WCAS Holder, if a party to the Stockholder Lock-Up Agreement, acknowledges and understands that the Conversion Shares are subject to the Stockholder Lock-Up Agreement under the terms of which it is agreeing to, among other things, refrain from offering, selling, issuing, contracting to sell, pledging, or otherwise disposing of, directly or indirectly, the Conversion Shares for the period specified therein.

Section 2.5 Authorization. To the extent such WCAS Holder is an entity, the execution, delivery and performance of this Agreement and the WCAS Third Lien Notes Conversion are within such WCAS Holder’s corporate, partnership or limited liability company, as applicable, powers and have been duly and validly authorized by all requisite corporate, partnership or limited liability company, as applicable, action.

Section 2.6 Valid Existence. To the extent it is an entity, such WCAS Holder is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation.

Section 2.7 Binding Agreement. This Agreement has been duly executed and delivered by such WCAS Holder, and it constitutes a valid and binding agreement of such WCAS Holder.

Section 2.8 Consents; No Violations. Neither the execution, delivery or performance by such WCAS Holders of this Agreement nor the consummation of the conversion contemplated hereby shall (a) conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation, bylaws or other organizational documents of such WCAS Holder, where applicable, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any lien or charge, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law, or any provision of any agreement or other instrument to which such WCAS Holder is a party or pursuant to which such WCAS Holder or any of its assets or properties is subject, except for breaches, violations, defaults, liens or charges, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, would not materially adversely affect such WCAS Holder’s ability to

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consummate the transactions contemplated by this Agreement, or (c) require any consents, approvals and filings on the part of such WCAS Holder, from or with any governmental entity except for the consents, approvals and filings which, if not made or obtained by such WCAS Holder, would not materially adversely affect such WCAS Holder’s ability to consummate the transactions contemplated by this Agreement.

Section 2.9 Restrictive Legends. Such WCAS Holder acknowledges that the Conversion Shares shall bear a restrictive legend substantially in the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAW, (B) AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR (C) RULE 144 UNDER THE SECURITIES ACT.

The conditions to any offer, sale, pledge or other transfer of the Conversion Shares as set forth in the legend above are incorporated in, and form a part of, this Agreement. The legend set forth above shall be removed and the Company shall issue a certificate representing any Conversion Share without such legend to the holder of such Conversion Share upon which it is stamped, if, unless otherwise required by state securities laws, (i) such Conversion Share is sold pursuant to an effective registration statement under the Securities Act, (ii) such holder shall have delivered to the Company evidence reasonably satisfactory to the Company indicating that such Conversion Share may be sold or transferred pursuant to an exemption from registration under the Securities Act or (iii) such holder provides the Company with reasonable assurances that such Conversion Share and all other Conversion Shares then held by such holder may be sold pursuant to Rule 144(k) under the Securities Act or pursuant to Rule 144 under the Securities Act within any three-month period.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT AND COMPANY

Parent and Company, jointly and severally, each represent and warrant to the WCAS Holders as follows as of the Closing Date:

Section 3.1 Organization, Standing, etc. Parent and each of its subsidiaries is a corporation duly organized and validly existing and in good standing under the laws of the

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jurisdiction in which it is incorporated, with all corporate power and authority to own, lease and operate its properties and to conduct its business as currently owned, leased, operated and conducted.

Section 3.2 Capital Stock. All of the issued shares of capital stock of Parent have been duly and validly authorized and issued and are fully paid and non-assessable. There are no anti-dilution or price adjustment provisions contained in any security issued by Parent (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Conversion Shares.

Section 3.3 Issuance of Conversion Shares. Upon issuance by Parent, the Conversion Shares will be validly issued, fully paid and non-assessable, free and clear of all liens and encumbrances and not subject to any preemptive rights, other than any of the foregoing resulting solely from action by the holders of the Conversion Shares. Moreover, the Conversion Shares issued to the WCAS Holders constitute Registrable Securities under the Registration Rights Agreement, dated as of October 6, 2003, as amended, among Parent and the WCAS Securityholders listed on the signature pages thereof.

Section 3.3 Corporate Power; Binding Agreement. Parent and the Company have all requisite corporate power and authority to enter into, execute, deliver and perform their obligations under this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by Parent and the Company, and, assuming the due authorization, execution and delivery thereof by the WCAS Holders, constitutes the legal, valid and binding obligation of Parent and the Company, enforceable against Parent and the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity.

Section 3.4 Consents; No Violations. Neither the execution, delivery or performance by Parent and Company of this Agreement nor the consummation of the transactions contemplated hereby will (a) conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation or bylaws of Parent or the Company, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any lien or charge, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law, or any provision of any agreement or other instrument to which Parent or any of its subsidiaries is a party or pursuant to which any of the assets or properties of Parent or any of its subsidiaries is subject, except for breaches, violations, defaults, liens or charges, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, would not materially adversely affect Parent’s or the Company’s ability to consummate the transactions contemplated by this Agreement, or (c) require any consents, approvals and filings on the part of Parent or the Company on or before the Closing Date from or with any governmental entity, except for such consents, approvals and filings which, if not made or obtained by Parent or the Company, would not materially adversely affect the ability of Parent and the Company to consummate the transactions contemplated by this Agreement.

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ARTICLE IV

WCAS REPRESENTATIVE

The WCAS Holders hereby appoint Welsh, Carson, Anderson & Stowe VIII, L.P. as the WCAS Holders’ exclusive agent to act on the WCAS Holders’ behalf with respect to the matters specified in this Article IV. Such representative, or such other representative as the WCAS Holders may appoint from time to time to replace Welsh, Carson, Anderson & Stowe VIII, L.P., is hereinafter referred to as the “WCAS Representative.” The WCAS Representative shall take any and all actions which the WCAS Representative believes are necessary or appropriate under this Agreement for and on behalf of the WCAS Holders as fully as if the WCAS Holders were acting on their own behalf, including, without limitation, making the deliveries referred to in Section 1.2 and taking any and all other actions specified in or contemplated by this Agreement to be taken by the WCAS Holders prior to, on or after the Closing Date, receiving notice of and defending any claims pursuant to this Agreement, giving notice of and asserting any claims pursuant to this Agreement, consenting to, compromising or settling claims made pursuant to this Agreement, and engaging counsel, accountants or other representatives in connection with the foregoing matters. Parent and the Company shall have the right to rely upon all actions taken or omitted to be taken by the WCAS Representative pursuant to this Agreement, all of which actions or omissions shall be legally binding upon each of the WCAS Holders.

ARTICLE V

MISCELLANEOUS

Section 5.1 Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, real estate transfer or gains and stock transfer taxes incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the Company.

Section 5.2 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not render invalid or unenforceable any other provision of this Agreement.

Section 5.3 Survival of Representations and Warranties. All representations and warranties set forth in this Agreement or in any writing delivered by any party in connection herewith shall survive the transactions contemplated by this Agreement to be consummated on the Closing Date (regardless of any investigation, inquiry, or examination made by any party or on its behalf or any knowledge of any party or the acceptance by any party of any certificate or opinion) for a period of one year following the Closing Date.

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Section 5.4 Enforcement. The parties hereto agree that (a) irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific intent or were otherwise breached and (b) the parties shall be entitled to seek an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they may be entitled by law or equity.

Section 5.5 Successors and Assigns. Except as otherwise expressly provided herein, (a) all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors, assigns, heirs and legal representatives of the parties hereto, whether so expressed or not, and (b) no party may assign or delegate all or any portion of its rights, obligations or liabilities under this Agreement without the prior written consent of each other party to this Agreement; provided, that any such consent required to be given by the WCAS Holders shall be effective if given by the WCAS Representative.

Section 5.6 Entire Agreement. This Agreement (including the Exhibits and Schedule hereto) constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein.

Section 5.7 Notices. All notices, demands, requests, consents or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when delivered personally to the recipient, (b) when telecopied to the recipient (with hard copy sent to the recipient by reputable overnight courier service (charges prepaid) that same day) if telecopied before 5:00 p.m. New York City time on a business day, and otherwise on the next business day, (c) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid) or (d) on the first business day that is at least five days after the date of deposit thereof in the United States mails for delivery by certified mail. Such notices, demands, requests, consents and other communications shall be sent to the following persons at the following addresses:

(i) if to Parent or the Company, to:

ITC^DeltaCom, Inc.

7037 Old Madison Pike

Huntsville, Alabama 35806

Telecopy No.: (256) 382-3936

Attention:   J. Thomas Mullis, Esq.

Senior Vice President–Legal and Regulatory

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With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: J. Gregory Milmoe

Facsimile: (917) 777-3770

and

Hogan & Hartson LLP

8300 Greensboro Drive, Suite 1100

McLean, VA 22102

Attention: Richard J. Parrino

Facsimile: (703) 610-6200

(ii) if to the WCAS Holders, to:

Welsh, Carson, Anderson & Stowe

320 Park Avenue

Suite 2500

New York, New York 10022

Telecopy No.: (212) 893-9548

Attention: Thomas E. McInerney

With a copy to:

Davis Polk & Wardwell

450 Lexington Avenue

New York, New York 10017

Telecopy No.: (212) 450-3800

Attention: Carole Schiffman

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

Section 5.8 Amendments; Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the written consent thereto of Parent, the Company, and the WCAS Representative. Notwithstanding the foregoing, any such amendment, modification, supplement, waiver or consent with respect to a matter that relates exclusively to the rights or obligations of a particular WCAS Holder and that does not directly or indirectly affect the rights or obligations of any other WCAS Holders, may be entered into or given solely by Parent, the Company and such affected WCAS Holder; provided, however, that the provisions of this sentence may not be amended, modified or supplemented, and no waiver or consent to departure from such provisions may be given, except in accordance with the provisions of the immediately preceding sentence.

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Section 5.9 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement.

Section 5.10 Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement.

Section 5.11 Governing Law. This Agreement shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of Delaware applicable to contracts executed and to be performed wholly within such state.

Section 5.12 Exclusive Jurisdiction; Venue. Any process against the Company, Parent or a WCAS Holder in, or in connection with, any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, may be served personally or by certified mail pursuant to the notice provision set forth in Section 5.7 with the same effect as though served on it personally. Each of the parties hereto hereby irrevocably submits in any suit, action or proceeding by the parties hereto arising out of or relating to this Agreement or any of the transactions contemplated hereby, to the exclusive jurisdiction and venue of the federal and state courts of the State of Delaware and irrevocably waives any and all objections to exclusive jurisdiction and review of venue that any such party may have under the laws of the State of Delaware or the United States. Without limiting the other remedies, this Agreement shall be enforceable by specific performance.

Section 5.13 Waiver of Jury Trial. Parent, the Company and the WCAS Holders hereby waive any right they may have to a trial by jury in respect of any action, proceeding or litigation directly or indirectly arising out of, under or in connection with this Agreement.

Section 5.14 Delivery by Facsimile. This Agreement and each other agreement or instrument entered into in connection herewith or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation or enforceability of a contract, and each such party forever waives any such defense.

[The remainder of this page is intentionally left blank]

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IN WITNESS WHEREOF, the Company and the WCAS Holders have caused this Agreement to be duly executed as of the date first written above.

FOR PARENT
ITC^DELTACOM, INC.
By:	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Senior Vice President–Legal and Regulatory
FOR COMPANY
INTERSTATE FIBERNET INC.
By:	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Senior Vice President

WCAS HOLDERS:
	WCAS CAPITAL PARTNERS III, L.P.
	By:	WCAS CP III Associates L.L.C., General Partner
	By:	/s/ Jonathan M. Rather
		Name:	Jonathan M. Rather
		Title:	Managing Member
	WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
	By:	WCAS VIII Associates LLC, General Partner
	By:	/s/ Jonathan M. Rather
		Name:	Jonathan M. Rather
		Title:	Managing Member

Certain individuals and trusts:
By:	/s/ Jonathan M. Rather
	Jonathan M. Rather, as Attorney-in-fact for the individuals listed below:
	Russell L. Carson
	Andrew M. Paul
	Thomas E. McInerney
	Robert A. Minicucci
	Anthony J. de Nicola
	Paul B. Queally
	D. Scott Mackesy
	Sanjay Swani
	Laura M. VanBuren
	Sean M. Traynor
	John Almeida, Jr.
	Eric J. Lee
	IRA f/b/o Jonathan M. Rather
Other trusts:
Bruce K Anderson 2004 Irrevocable Trust
By:	/s/ Mary R. Anderson
Name:	Mary R. Anderson
Title:	Trustee
Patrick Welsh 2004 Irrevocable Trust
By:	/s/ Carol Welsh
Name:	Carol Welsh
Title:	Trustee

EX-10.7

Exhibit 10.7

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT (this “Agreement”), dated as of July 31, 2007, is made by and among ITC^DeltaCom, Inc., a Delaware corporation (“Parent”), Interstate FiberNet, Inc., a wholly-owned subsidiary of Parent and a Delaware corporation (the “Company”), and the investment funds managed by Tennenbaum Capital Partners, LLC identified on the signature pages hereto (individually, a “TCP Holder” and collectively, the “TCP Holders”).

RECITALS

WHEREAS, Parent, the Company, certain subsidiary guarantors of Parent, certain banks, financial institutions and other institutional lenders (including the TCP Holders), Tennenbaum Capital Partners, LLC (as agent), and TCP Agency Services, LLC (as collateral agent), entered into that certain Securities Purchase Agreement dated as of July 26, 2005, whereby the Company issued third lien, senior secured notes due September 2009 (the “Third Lien Notes”) in the aggregate principal amount of $50.8 million to various investors, including the TCP Holders; and

WHEREAS, the Third Lien Notes are supported by Parent’s full and unconditional guarantee; and

WHEREAS, Parent intends to consummate a recapitalization of its capital structure as described in Exhibit A annexed hereto (the “Recapitalization”); and

WHEREAS, on June 8, 2007, the TCP Holders entered into a commitment letter whereby they confirmed, among other things, their intention to exchange or convert $25 million principal amount of Third Lien Notes (the “TCP Third Lien Notes”) and all preferred stock and warrants of Parent held by them for common stock of Parent, par value $0.01 per share (the “Common Stock”) in connection with the Recapitalization, which commitment letter was later amended by a supplemental commitment letter and lock-up agreement dated as of July 16, 2007 (the Stockholder Lock-Up Agreement”); and

WHEREAS, subject to the terms and conditions of this Agreement, the TCP Holders agree to exchange the TCP Third Lien Notes for Common Stock, and Parent agrees to issue to the TCP Holders shares of Common Stock in exchange for the TCP Third Lien Notes.

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

ARTICLE I

EXCHANGE OF THIRD LIEN NOTES

Section 1.1. Exchange of Notes. Upon the terms and subject to the conditions set forth herein, the TCP Holders hereby agree to exchange their TCP Third Lien Notes for, and Parent hereby agrees to issue and deliver to the TCP Holders in exchange for such notes, a total of 8,259,193 shares of Common Stock (the “TCP Third Lien Notes Conversion”). Schedule 1

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hereto lists, as the date of this Agreement, (i) each TCP Holder, (ii) the amount of TCP Third Lien Notes held by each TCP Holder as of the Closing Date as reflected in the Company’s books and records, (iii) the total amount of TCP Third Lien Notes that will be exchanged, (iv) the amount of cash to be received by each TCP Holder for Third Lien Notes they own that are not being converted to Common Stock, and (v) the total number of Common Stock that are being issued to such TCP Holder upon effectiveness of the TCP Third Lien Notes Conversion (the “Conversion Shares”). The TCP Third Lien Notes Conversion will be effective, and the TCP Holders will be deemed to be the holders of the Conversion Shares, as of the closing date of the Recapitalization (the “Closing Date”).

Section 1.2. Deliveries.

(a) On the Closing Date, each TCP Holder shall tender to the Company for cancellation all TCP Third Lien Notes held by such TCP Holder, duly endorsed in blank.

(b) Promptly after the Closing Date, Parent shall deliver, or cause Parent’s transfer agent for the Conversion Shares to deliver, to each TCP Holder a share certificate or certificates, each registered in the name of such TCP Holder, representing the Conversion Shares.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE TCP HOLDERS

As of the Closing Date, each TCP Holder represents and warrants to Parent and the Company, as follows:

Section 2.1. Acquisition for Investment. Each TCP Holder is acquiring the Conversion Shares for its own account, for investment and not with a view to, or for sale in connection with, the distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) (it being understood that except as otherwise provided in this Agreement, the TCP Holder does not agree to hold the Conversion Shares for any minimum or other specific term and reserves the right to dispose of the Conversion Shares at any time in accordance with the Securities Act and state securities laws applicable to such disposition).

Section 2.2 Accredited Investor Status. Each TCP Holder is an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. Each TCP Holder has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Conversion Shares and is capable of bearing the economic risks of such investment. Each TCP Holder understands that its investment in the Conversion Shares involves a significant degree of risk.

Section 2.3 Sales or Transfer. Each TCP Holder understands that the sale or re-sale of the Conversion Shares has not been and is not being registered under the Securities Act or any applicable state securities laws, and that the Conversion Shares may not be sold or otherwise transferred unless (a) the Conversion Shares are sold or transferred pursuant to an effective registration statement under the Securities Act and applicable state securities laws, (b) such TCP

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Holder shall have delivered to the Company an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the Conversion Shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, or (c) the Conversion Shares are sold pursuant to Rule 144 under the Securities Act.

Section 2.4 Stockholder Lock-Up Agreement. The TCP Holders acknowledge and understand that under the terms of the Stockholder Lock-Up Agreement they are agreeing to, among other things, refrain from offering, selling, issuing, contracting to sell, pledging, or otherwise disposing of, directly or indirectly, the Conversion Shares for the period specified therein.

Section 2.5 Authorization. The execution, delivery and performance of this Agreement and the TCP Third Lien Notes Conversion are within the TCP Holders’ corporate, partnership or limited liability company, as applicable, powers and have been duly and validly authorized by all requisite corporate, partnership or limited liability company, as applicable, action.

Section 2.6 Valid Existence. Each TCP Holder is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of formation.

Section 2.7 Binding Agreement. This Agreement has been duly executed and delivered by each TCP Holder, and it constitutes a valid and binding agreement of such TCP Holder.

Section 2.8 Consents; No Violations. Neither the execution, delivery or performance by the TCP Holders of this Agreement nor the consummation of the conversion contemplated hereby shall (a) conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation, bylaws or other organizational documents of any TCP Holder, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any lien or charge, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law, or any provision of any agreement or other instrument to which such TCP Holder is a party or pursuant to which such TCP Holder or any of its assets or properties is subject, except for breaches, violations, defaults, liens or charges, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, would not materially adversely affect such TCP Holder’s ability to consummate the transactions contemplated by this Agreement, or (c) require any consents, approvals and filings on the part of such TCP Holder, from or with any governmental entity except for the consents, approvals and filings which, if not made or obtained by such TCP Holder, would not materially adversely affect such TCP Holder’s ability to consummate the transactions contemplated by this Agreement.

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Section 2.9 Restrictive Legends. The TCP Holders acknowledge that the Conversion Shares shall bear a restrictive legend substantially in the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAW, (B) AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR (C) RULE 144 UNDER THE SECURITIES ACT.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT AND COMPANY

Parent and Company each represent and warrant to the TCP Holders as follows as of the Closing Date:

Section 3.1 Organization, Standing, etc. Parent and each of its subsidiaries is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with all corporate power and authority to own, lease and operate its properties and to conduct its business as currently owned, leased, operated and conducted.

Section 3.2 Issuance of Conversion Shares. Upon issuance by Parent, the Conversion Shares will be validly issued, fully paid and non-assessable, free and clear of all liens and encumbrances and not subject to any preemptive rights, other than any of the foregoing resulting solely from action by the holders of the Conversion Shares.

Section 3.3 Corporate Power; Binding Agreement. Parent and the Company have all requisite corporate power and authority to enter into, execute, deliver and perform their obligations under this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by Parent and the Company, and, assuming the due authorization, execution and delivery thereof by the TCP Holders, constitutes the legal, valid and binding obligation of Parent and the Company, enforceable against Parent and the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity.

Section 3.4 Consents; No Violations. Neither the execution, delivery or performance by Parent and Company of this Agreement nor the consummation of the transactions contemplated hereby will (a) conflict with, or result in a breach or a violation of, any

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provision of the certificate of incorporation or bylaws of Parent or the Company, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any lien or charge, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law, or any provision of any agreement or other instrument to which Parent or any of its subsidiaries is a party or pursuant to which any of the assets or properties of Parent or any of its subsidiaries is subject, except for breaches, violations, defaults, liens or charges, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, would not materially adversely affect Parent’s or the Company’s ability to consummate the transactions contemplated by this Agreement, or (c) require any consents, approvals and filings on the part of Parent or the Company on or before the Closing Date from or with any governmental entity, except for such consents, approvals and filings which, if not made or obtained by Parent or the Company, would not materially adversely affect the ability of Parent and the Company to consummate the transactions contemplated by this Agreement.

ARTICLE IV

MISCELLANEOUS

Section 4.1 Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, real estate transfer or gains and stock transfer taxes incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the Company.

Section 4.2 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not render invalid or unenforceable any other provision of this Agreement.

Section 4.3 Survival of Representations and Warranties. All representations and warranties set forth in this Agreement or in any writing delivered by any party in connection herewith shall survive the transactions contemplated by this Agreement to be consummated on the Closing Date (regardless of any investigation, inquiry, or examination made by any party or on its behalf or any knowledge of any party or the acceptance by any party of any certificate or opinion) for a period of one year following the Closing Date.

Section 4.4 Enforcement. The parties hereto agree that (a) irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific intent or were otherwise breached and (b) the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they may be entitled by law or equity.

Section 4.5 Successors and Assigns. Except as otherwise expressly provided herein, (a) all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors, assigns, heirs

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and legal representatives of the parties hereto, whether so expressed or not, and (b) no party may assign or delegate all or any portion of its rights, obligations or liabilities under this Agreement without the prior written consent of each other party to this Agreement.

Section 4.6 Entire Agreement. This Agreement (including the Exhibits and Schedule hereto) constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein.

Section 4.7 Notices. All notices, demands, requests, consents or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when delivered personally to the recipient, (b) when telecopied to the recipient (with hard copy sent to the recipient by reputable overnight courier service (charges prepaid) that same day) if telecopied before 5:00 p.m. New York City time on a business day, and otherwise on the next business day, (c) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid) or (d) on the first business day that is at least five days after the date of deposit thereof in the United States mails for delivery by certified mail. Such notices, demands, requests, consents and other communications shall be sent to the following persons at the following addresses:

(i) if to Parent or the Company, to:

ITC^DeltaCom, Inc.

7037 Old Madison Pike

Huntsville, Alabama 35806

Telecopy No.: (256) 382-3936

Attention: J. Thomas Mullis, Esq.

  Senior Vice President–Legal and Regulatory

With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: J. Gregory Milmoe

Facsimile: (917) 777-3770

and

Hogan & Hartson LLP

8300 Greensboro Drive, Suite 1100

McLean, VA 22102

Attention: Richard J. Parrino

Facsimile: (703) 610-6200

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(ii) if to the TCP Holders, to:

Tennenbaum Capital Partners, LLC

2951 28^th Street, Suite 1000

Santa Monica, CA 90405

Attention: Michael Leitner and general counsel

Facsimile: (310) 566-1010

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

601 South Figueroa, 30^th Floor

Lost Angeles, CA 90017

Telecopy No.: (213) 892-4711

Attention: Melainie K. Mansfield

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

Section 4.8 Amendments; Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the written consent thereto of Parent, the Company, and the TCP Holders. Notwithstanding the foregoing, any such amendment, modification, supplement, waiver or consent with respect to a matter that relates exclusively to the rights or obligations of a particular TCP Holder and that does not directly or indirectly affect the rights or obligations of any other TCP Holders, may be entered into or given solely by Parent, the Company and such affected TCP Holder; provided, however, that the provisions of this sentence may not be amended, modified or supplemented, and no waiver or consent to departure from such provisions may be given, except in accordance with the provisions of the immediately preceding sentence.

Section 4.9 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement.

Section 4.10 Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement.

Section 4.11 Governing Law. This Agreement shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of Delaware applicable to contracts executed and to be performed wholly within such state.

Section 4.12 Exclusive Jurisdiction; Venue. Any process against the Company, Parent or a TCP Holder in, or in connection with, any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, may be served personally or by certified mail pursuant to the notice provision set forth in Section 4.7 with the same effect as

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though served on it personally. Each of the parties hereto hereby irrevocably submits in any suit, action or proceeding by the parties hereto arising out of or relating to this Agreement or any of the transactions contemplated hereby, to the exclusive jurisdiction and venue of the federal and state courts of the State of Delaware and irrevocably waives any and all objections to exclusive jurisdiction and review of venue that any such party may have under the laws of the State of Delaware or the United States. Without limiting the other remedies, this Agreement shall be enforceable by specific performance.

Section 4.13 Waiver of Jury Trial. Parent, the Company and the TCP Holders hereby waive any right they may have to a trial by jury in respect of any action, proceeding or litigation directly or indirectly arising out of, under or in connection with this Agreement.

Section 4.14 Delivery by Facsimile. This Agreement and each other agreement or instrument entered into in connection herewith or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation or enforceability of a contract, and each such party forever waives any such defense.

[Signatures on Following Page]

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IN WITNESS WHEREOF, the Company and the TCP Holders have caused this Agreement to be duly executed as of the date first written above.

FOR PARENT
ITC^DELTACOM, INC.
By:	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Senior Vice President—Legal & Regulatory

FOR COMPANY
INTERSTATE FIBERNET INC.
By:	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Senior Vice President

FOR TCP HOLDERS:
SPECIAL VALUE ABSOLUTE RETURN FUND, LLC
By:	Tennenbaum Capital Partners, LLC
Its:	Investment Member

SPECIAL VALUE BOND FUND II, LLC
By:	Tennenbaum Capital Partners, LLC
Its:	Investment Member

SPECIAL VALUE CONTINUATION PARTNERS, LP
By:	Tennenbaum Capital Partners, LLC
Its:	Investment Manager

Each of the above by:

/s/ Howard M. Levkowitz

Name:    Howard M. Levkowitz

Title:    Managing Partner

EX-10.8

Exhibit 10.8

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT (this “Agreement”), dated as of July 31, 2007, is made by and among ITC^DeltaCom, Inc., a Delaware corporation (“Parent”), Interstate FiberNet, Inc., a wholly-owned subsidiary of Parent and a Delaware corporation (the “Company”), and each of the funds listed on the signature pages hereto under the heading “Babson Entities” (individually, a “Babson Entity” and collectively, the “Babson Entities”).

RECITALS

WHEREAS, Parent, the Company, certain subsidiary guarantors of Parent, certain banks, financial institutions and other institutional lenders, Tennenbaum Capital Partners, LLC (as agent), and TCP Agency Services, LLC (as collateral agent), entered into that certain Securities Purchase Agreement dated as of July 26, 2005, whereby the Company issued third lien, senior secured notes due September 2009 (the “Third Lien Notes”) in the aggregate principal amount of $50.8 million to various investors, including the Babson Entities; and

WHEREAS, the Third Lien Notes are supported by Parent’s full and unconditional guarantee; and

WHEREAS, Parent intends to consummate a recapitalization of its corporate structure as described in Exhibit A annexed hereto (the “Recapitalization”); and

WHEREAS, the Babson Entities have confirmed, among other things, their intention to exchange $3.815 million of their existing third lien notes (the “Babson Third Lien Notes”) and their ownership in Parent’s Series D Warrants for common stock of Parent, par value $0.01 per share (the “Common Stock”) in connection with the Recapitalization, and have entered into a commitment letter and lock-up agreement dated as of July 16, 2007 (the “Lock-Up Agreement”); and

WHEREAS, subject to the terms and conditions of this Agreement, the Babson Entities agree to exchange the Babson Third Lien Notes for Common Stock, and Parent agrees to issue to the Babson Entities shares of Common Stock in exchange for the Babson Third Lien Notes.

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

ARTICLE I

EXCHANGE OF THIRD LIEN NOTES

Section 1.1. Exchange of Notes. Upon the terms and subject to the conditions set forth herein and incorporated by reference, the Babson Entities hereby agree to exchange their Babson Third Lien Notes for, and Parent hereby agrees to issue and deliver to the Babson Entities in exchange for such Notes, a total of 1,259,074 shares of Common Stock (the “Babson Third Lien

Notes Conversion”). Schedule 1 hereto lists, as the date of this Agreement, (i) each Babson Entity, (ii) the amount of Babson Third Lien Notes held by each Babson Entity, as of the Closing Date, as reflected in the Company’s books and records, (iii) the total amount of Babson Third Lien Notes that will be exchanged, (iv) the amount of cash to be received by the Babson Entities for Third Lien Notes they own that are not being converted to Common Stock, and (v) the total number of Common Stock that are being issued to such Babson Entity upon effectiveness of the Babson Third Lien Notes Conversion (the “Conversion Shares”). The Babson Third Lien Notes Conversion will be effective, and the Babson Entities will be deemed to be the holders of the Conversion Shares, as of the closing date of the Recapitalization (the “Closing Date”).

Section 1.2. Deliveries.

(a) On the Closing Date, each Babson Entity shall tender to the Company for cancellation all Babson Third Lien Notes held by such Babson Entity, duly endorsed in blank.

(b) Promptly after Closing Date, Parent shall deliver, or cause Parent’s transfer agent for the Conversion Shares to deliver, to each Babson Entity a share certificate or certificates, each in the name of such Babson Entity, representing the Conversion Shares.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE BABSON ENTITIES

As of the Closing Date, each Babson Entity represents and warrants, severally and not jointly, to Parent and the Company, as follows:

Section 2.1. Acquisition for Investment. Each Babson Entity is acquiring the Conversion Shares for its own account, for investment and not with a view to, or for sale in connection with, the distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) (it being understood that except as otherwise provided in this Agreement, the Babson Entity does not agree to hold the Conversion Shares for any minimum or other specific term and reserves the right to dispose of the Conversion Shares at any time in accordance with the Securities Act and state securities laws applicable to such disposition).

Section 2.2 Accredited Investor Status. Each Babson Entity is an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. Each Babson Entity has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Conversion Shares and is capable of bearing the economic risks of such investment. Each Babson Entity understands that its investment in the Conversion Shares involves a significant degree of risk.

Section 2.3 Sales or Transfer. Each Babson Entity understands that the sale or re-sale of the Conversion Shares has not been and is not being registered under the Securities Act or any applicable state securities laws, and that the Conversion Shares may not be sold or otherwise transferred unless (a) the Conversion Shares are sold or transferred pursuant to an effective registration statement under the Securities Act and applicable state securities laws, (b) such

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Babson Entity shall have delivered to the Company an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the Conversion Shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, or (c) the Conversion Shares are sold pursuant to Rule 144 under the Securities Act.

Section 2.4 Lock-Up Agreement. Such Babson Entity, if a party to the Lock-Up Agreement, acknowledges and understands that the Conversion Shares are subject to the Lock-Up Agreement under the terms of which it is agreeing to, among other things, refrain from offering, selling, issuing, contracting to sell, pledging, or otherwise disposing of, directly or indirectly, the Conversion Shares for the period specified therein.

Section 2.5 Authorization. The execution, delivery and performance of this Agreement and the Babson Third Lien Notes Conversion are within the Babson Entities’ corporate, partnership or limited liability company, as applicable, powers and have been duly and validly authorized by all requisite corporate, partnership or limited liability company, as applicable, action.

Section 2.6 Valid Existence. Each Babson Entity is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of formation.

Section 2.7 Binding Agreement.This Agreement has been duly executed and delivered by each Babson Entity, and it constitutes a valid and binding agreement of such Babson Entity.

Section 2.8 Consents; No Violations. Neither the execution, delivery or performance by the Babson Entities of this Agreement nor the consummation of the conversion contemplated hereby shall (a) conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation, bylaws or other organizational documents of any Babson Entity, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any lien or charge, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law, or any provision of any agreement or other instrument to which such Babson Entity is a party or pursuant to which such Babson Entity or any of its assets or properties is subject, except for breaches, violations, defaults, liens or charges, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, would not materially adversely affect such Babson Entity’s ability to consummate the transactions contemplated by this Agreement, or (c) require any consents, approvals and filings on the part of such Babson Entity, from or with any governmental entity except for the consents, approvals and filings which, if not made or obtained by such Babson Entity, would not materially adversely affect such Babson Entity’s ability to consummate the transactions contemplated by this Agreement.

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Section 2.9 Restrictive Legends. Such Babson Entity acknowledges that the Conversion Shares shall bear a restrictive legend substantially in the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAW, (B) AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR (C) RULE 144 UNDER THE SECURITIES ACT.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT AND COMPANY

Parent and Company each represent and warrant to the Babson Entities as follows as of the Closing Date:

Section 3.1 Organization, Standing, etc. Parent and each of its subsidiaries is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with all corporate power and authority to own, lease and operate its properties and to conduct its business as currently owned, leased, operated and conducted.

Section 3.2 Issuance of Conversion Shares. Upon issuance by Parent, the Conversion Shares will be validly issued, fully paid and non-assessable, free and clear of all liens and encumbrances and not subject to any preemptive rights, other than any of the foregoing resulting solely from action by the holders of the Conversion Shares.

Section 3.3 Corporate Power; Binding Agreement. Parent and the Company have all requisite corporate power and authority to enter into, execute, deliver and perform their obligations under this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by Parent and the Company, and, assuming the due authorization, execution and delivery thereof by the Babson Entities, constitutes the legal, valid and binding obligation of Parent and the Company, enforceable against Parent and the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity.

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Section 3.4 Consents; No Violations. Neither the execution, delivery or performance by Parent and Company of this Agreement nor the consummation of the transactions contemplated hereby will (a) conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation or bylaws of Parent or the Company, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any lien or charge, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law, or any provision of any agreement or other instrument to which Parent or any of its subsidiaries is a party or pursuant to which any of the assets or properties of Parent or any of its subsidiaries is subject, except for breaches, violations, defaults, liens or charges, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, would not materially adversely affect Parent’s or the Company’s ability to consummate the transactions contemplated by this Agreement, or (c) require any consents, approvals and filings on the part of Parent or the Company on or before the Closing Date from or with any governmental entity, except for such consents, approvals and filings which, if not made or obtained by Parent or the Company, would not materially adversely affect the ability of Parent and the Company to consummate the transactions contemplated by this Agreement.

ARTICLE IV

BABSON REPRESENTATIVE

The Babson Entities hereby appoint Richard E. Spencer the Babson Entities’ exclusive agent to act on the Babson Entities’ behalf with respect to the matters specified in this Article IV. Such representative, or such other representative as the Babson Entities may appoint from time to time to replace Richard E. Spencer, is hereinafter referred to as the “Babson Representative.” The Babson Representative shall take any and all actions which the Babson Representative believes are necessary or appropriate under this Agreement for and on behalf of the Babson Entities as fully as if the Babson Entities were acting on their own behalf, including, without limitation, making the deliveries referred to in Section 1.2 and taking any and all other actions specified in or contemplated by this Agreement to be taken by the Babson Entities prior to, on or after the Closing Date, receiving notice of and defending any claims pursuant to this Agreement, giving notice of and asserting any claims pursuant to this Agreement, consenting to, compromising or settling claims made pursuant to this Agreement, and engaging counsel, accountants or other representatives in connection with the foregoing matters. Parent and the Company shall have the right to rely upon all actions taken or omitted to be taken by the Babson Representative pursuant to this Agreement, all of which actions or omissions shall be legally binding upon each of the Babson Entities.

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ARTICLE V

MISCELLANEOUS

Section 5.1 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not render invalid or unenforceable any other provision of this Agreement.

Section 5.2 Survival of Representations and Warranties. All representations and warranties set forth in this Agreement or in any writing delivered by any party in connection herewith shall survive the transactions contemplated by this Agreement to be consummated on the Closing Date (regardless of any investigation, inquiry, or examination made by any party or on its behalf or any knowledge of any party or the acceptance by any party of any certificate or opinion) for a period of one year following the Closing Date.

Section 5.3 Enforcement. The parties hereto agree that (a) irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific intent or were otherwise breached and (b) the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they may be entitled by law or equity.

Section 5.4 Successors and Assigns. Except as otherwise expressly provided herein, (a) all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors, assigns, heirs and legal representatives of the parties hereto, whether so expressed or not, and (b) no party may assign or delegate all or any portion of its rights, obligations or liabilities under this Agreement without the prior written consent of each other party to this Agreement; provided, that any such consent required to be given by the Babson Entities shall be effective if given by the Babson Representative.

Section 5.5 Entire Agreement. This Agreement (including the Exhibits and Schedule hereto) constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein.

Section 5.6 Notices. All notices, demands, requests, consents or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when delivered personally to the recipient, (b) when telecopied to the recipient (with hard copy sent to the recipient by reputable overnight courier service (charges prepaid) that same day) if telecopied before 5:00 p.m. New York City time on a business day, and otherwise on the next business day, (c) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid) or (d) on the first business day that is at least five days after the date of deposit thereof in the United States mails for delivery by certified mail. Such notices, demands, requests, consents and other communications shall be sent to the following persons at the following addresses:

(i) if to Parent or the Company, to:

ITC^DeltaCom, Inc.

7037 Old Madison Pike

Huntsville, Alabama 35806

Telecopy No.: (256) 382-3936

Attention: J. Thomas Mullis, Esq.

  Senior Vice President–Legal and Regulatory

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With a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: J. Gregory Milmoe

Facsimile: (917) 777-3770

and

Hogan & Hartson LLP

8300 Greensboro Drive, Suite 1100

McLean, VA 22102

Attention: Richard J. Parrino

Facsimile: (703) 610-6200

(ii) if to the Babson Entities, to:

Babson Capital Management LLC

1500 Main Street, Suite 2200

Springfield, MA 01115

Telecopy No.: (413) 226-2649

Attention: Richard E. Spencer, II

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

Section 5.7 Amendments; Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the written consent thereto of Parent, the Company, and the Babson Representative. Notwithstanding the foregoing, any such amendment, modification, supplement, waiver or consent with respect to a matter that relates exclusively to the rights or obligations of a particular Babson Entity and that does not directly or indirectly affect the rights or obligations of any other Babson Entity, may be entered into or given solely by Parent, the Company and such affected Babson Entity; provided, however, that the provisions of this sentence may not be amended, modified or supplemented, and no waiver or consent to departure from such provisions may be given, except in accordance with the provisions of the immediately preceding sentence.

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Section 5.8 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement.

Section 5.9 Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement.

Section 5.10 Governing Law. This Agreement shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of Delaware applicable to contracts executed and to be performed wholly within such state.

Section 5.11 Exclusive Jurisdiction; Venue. Any process against the Company, Parent or a Babson Entity in, or in connection with, any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, may be served personally or by certified mail pursuant to the notice provision set forth in Section 5.6 with the same effect as though served on it personally. Each of the parties hereto hereby irrevocably submits in any suit, action or proceeding by the parties hereto arising out of or relating to this Agreement or any of the transactions contemplated hereby, to the exclusive jurisdiction and venue of the federal and state courts of the State of Delaware and irrevocably waives any and all objections to exclusive jurisdiction and review of venue that any such party may have under the laws of the State of Delaware or the United States. Without limiting the other remedies, this Agreement shall be enforceable by specific performance.

Section 5.12 Waiver of Jury Trial. Parent, the Company and the Babson Entities hereby waive any right they may have to a trial by jury in respect of any action, proceeding or litigation directly or indirectly arising out of, under or in connection with this Agreement.

Section 5.13 Delivery by Facsimile. This Agreement and each other agreement or instrument entered into in connection herewith or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation or enforceability of a contract, and each such party forever waives any such defense.

[The remainder of this page is intentionally left blank]

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IN WITNESS WHEREOF, the Company and the Babson Entities have caused this Agreement to be duly executed as of the date first written above.

FOR PARENT
ITC^DELTACOM, INC.
By:	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Senior Vice President–Legal and Regulatory
FOR COMPANY
INTERSTATE FIBERNET INC.
By:	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Senior Vice President–Legal and Regulatory

BABSON ENTITIES
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By:	Babson Capital Management LLC, as Investment Advisor

By:	/s/ Richard E. Spencer, II
	Name:	Richard E. Spencer, II
	Title:	Managing Director

MASS MUTUAL CORPORATE INVESTORS
By:	/s/ Richard E. Spencer, II
	Name:	Richard E. Spencer, II
	Title:	Vice President

The foregoing is executed on behalf of MassMutual Corporate Investors, organized under a Declaration of Trust, dated September 13, 1985, as amended from time to time. The obligations of such Trust are not personally binding upon, nor shall resort be had to the property of, any of the Trustees, shareholders, officers, employees or agents of such Trust, but the Trust’s property only shall be bound.

MASS MUTUAL PARTICIPATION INVESTORS
By:	/s/ Richard E. Spencer, II
	Name:	Richard E. Spencer, II
	Title:	Vice President

The foregoing is executed on behalf of MassMutual Participation Investors, organized under a Declaration of Trust, dated April 7, 1988, as amended from time to time. The obligations of such Trust are not personally binding upon, nor shall resort be had to the property of, any of the Trustees, shareholders, officers, employees or agents of such Trust, but the Trust’s property only shall be bound.

WINTERSET MASTER FUND LP
By:	Babson Capital Management LLC, as Investment Manager
By:	/s/ Richard E. Spencer, II
	Name:	Richard E. Spencer, II
	Title:	Managing Director

MILL RIVER MASTER FUND LP
By:	Babson Capital Management LLC, as Investment Manager
By:	/s/ Richard E. Spencer, II
	Name:	Richard E. Spencer, II
	Title:	Managing Director

J/Z CBO (DELAWARE) LLC
By:	Babson Capital Management LLC, as Collateral Manager
By:	/s/ Richard E. Spencer, II
	Name:	Richard E. Spencer, II
	Title:	Managing Director

TOWER SQUARE CAPITAL PARTNERS, LP
By:	Babson Capital Management LLC, as Investment Manager
By:	/s/ Richard E. Spencer, II
	Name:	Richard E. Spencer, II
	Title:	Managing Director

EX-10.9

Exhibit 10.9

SERIES A PREFERRED STOCKHOLDER AGREEMENT

THIS SERIES A PREFERRED STOCKHOLDER AGREEMENT (this “Agreement”), dated as of July 31, 2007, is made among ITC^DeltaCom, Inc., a Delaware corporation (the “Company”), and each of the persons listed on the signature pages hereto under the heading “Series A Preferred Stockholders” (individually, a “Holder” and collectively, the “Holders”).

RECITALS

WHEREAS, the Company intends to consummate a recapitalization (the “Recapitalization”) in which, among other transactions, 50.0% of the outstanding shares of the Company’s 8% Series A Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), held by each holder of record shall be converted into shares of the Company’s Common Stock, par value $0.01 per share (the “Common Stock”), and the remaining 50.0% of the outstanding shares of Series A Preferred Stock shall be redeemed by the Company;

WHEREAS, the Holders are the holders of record of outstanding shares of Series A Preferred Stock representing at least 66  ²/3% of the voting power of all outstanding shares of Series A Preferred Stock; and

WHEREAS, subject to the terms and conditions of this Agreement, the Holders wish to authorize an amendment to the certificate of designation of the Series A Preferred Stock to effectuate the conversion of 50.0% of the outstanding shares of Series A Preferred Stock into shares of Common Stock (the “Series A Preferred Stock Conversion”) and the redemption of the remaining 50.0% of the outstanding shares of Series A Preferred Stock (the “Series A Preferred Stock Redemption”) as of the closing date of the Recapitalization (the “Closing Date”);

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in this Agreement, the parties hereto agree as follows:

ARTICLE I

SERIES A PREFERRED STOCK CONVERSION

Section 1.1 Approval of Series A Preferred Stock Conversion. Concurrently with each Holder’s execution of this Agreement, such Holder has executed an irrevocable proxy in the form of Exhibit A hereto (the “Proxy”). The Proxy authorizes the persons named in the Proxy (collectively with any authorized persons substituted therefor, the “Proxy Holders”), as each Holder’s proxy and attorney-in-fact, to vote to approve, or to consent in writing to, the adoption of resolutions that will constitute the approval by the Holders of an amendment (the “Series A Amendment”) to the certificate of designation of the Series A Preferred Stock (the “Series A Certificate”) in substantially the form of Exhibit B hereto.

Following such vote or consent, the Series A Preferred Stock Conversion will be effective as of the Closing Date immediately after the filing by the Company of the Series A Amendment with the Delaware Secretary of State.

Section 1.2 Conditions to Series A Preferred Stock Conversion. Following approval thereof in accordance with Section 1.1, the Company shall be authorized to file the Series A Amendment with the Delaware Secretary of State only if, concurrently with such filing and the effectiveness of the Series A Preferred Stock Conversion:

(a) the Company and its subsidiaries shall obtain (i) not less than $305 million aggregate principal amount of secured term loan credit facilities for immediate application to the refinancing and repayment of their outstanding senior secured indebtedness and (ii) a secured revolving credit facility with available borrowings of up to a maximum of $10 million principal amount at any time outstanding;

(b) the Company shall receive cash gross proceeds of not less than $21 million from sales of its Common Stock and cash gross proceeds of not less than $41 million from sales of a new issue of its 6% Series H Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series H Preferred Stock”);

(c) holders of approximately $52 million in aggregate principal amount of the third lien Senior Secured Notes due 2009 of Interstate FiberNet, Inc. shall exchange such notes for approximately 17,275,791 shares of Common Stock; and

(d) the Company shall consummate the other components of the Recapitalization on terms that would make the representation and warranty of the Company set forth in Section 3.2 true in all material respects.

Section 1.3 Issuance of Conversion Shares.

(a) Upon effectiveness of the Series A Preferred Stock Conversion, 50.0% of the outstanding shares of Series A Preferred Stock held by each holder of record as of the Closing Date shall automatically be converted at a conversion price of $5.77484278752148 per share of Common Stock into a total of 1,747,924 shares of Common Stock, subject to increase if the Corporation shall elect to round fractional shares of Common Stock up to the nearest whole share of Common Stock (the “Conversion Shares”).

(b) Schedule 1 hereto lists, as of July 20, 2007, in addition to the items described in Section 2.1(b) and other items, (i) each holder of record of the Series A Preferred Stock, (ii) the total number of shares of Series A Preferred Stock held by such holder as reflected in the Company’s stock records and (iii) the total number of Conversion Shares that would be issuable to such holder upon effectiveness of the Series A Preferred Stock Conversion.

Section 1.4 Deliveries. In accordance with the Series A Certificate, as promptly as reasonably practicable after the Closing Date, upon receipt from each Holder of certificates representing the shares of Series A Preferred Stock held by such Holder pursuant

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to one or more letters of transmittal, the Company shall deliver, or cause the Company’s transfer agent for the Common Stock to deliver, to each Holder a share certificate or certificates representing the Conversion Shares issued by the Company to such Holder upon the effectiveness of the Series A Preferred Stock Conversion. The certificates representing the Conversion Shares shall not bear legends restricting the transferability of the Conversion Shares under applicable securities laws.

ARTICLE II

SERIES A PREFERRED STOCK REDEMPTION

Immediately following the time of the Series A Preferred Stock Conversion, the Corporation shall redeem the remaining outstanding shares of Series A Preferred Stock held by each holder of record at such time (the “Redemption Shares”), pursuant to the terms of Sections 5.1 and 5.3 of the Series A Certificate, as amended by the Series A Amendment. Schedule 1 hereto lists, for each holder of record of the Series A Preferred Stock, based on such holder’s record holdings of shares of Series A Preferred Stock as of July 20, 2007, the aggregate Optional Redemption Price (as such term is defined in the Series A Certificate) to be paid by the Corporation for all of such holder’s Redemption Shares.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to, and agrees with, each Holder as of the date hereof and as of the Closing Date as follows:

Section 3.1 Organization, Standing, etc. The Company and each of its subsidiaries is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with all corporate power and authority to own, lease and operate its properties and to conduct its business as currently owned, leased, operated and conducted.

Section 3.2 Capital Stock. As of the Closing Date, after giving effect to the Recapitalization and the other transactions to occur on the Closing Date, (a) the authorized capital stock of the Company will consist of 350,000,000 shares of Common Stock and 50,000,000 shares of preferred stock, par value $0.01 per share, (b) up to a maximum of 68,000,000 shares of Common Stock will be issued and outstanding, (c) 412,215 shares of Series H Preferred Stock will be issued and outstanding, (d) options to acquire up to a maximum of 650,000 shares of Common Stock pursuant to the ITC^DeltaCom, Inc. Amended and Restated Stock Incentive Plan and the ITC^DeltaCom, Inc. Executive Stock Incentive Plan (together, the “Stock Incentive Plans”) will be issued and outstanding, (e) restricted stock units for up to a maximum of 4,790,768 shares of Common Stock will be issued and outstanding pursuant to the Stock Incentive Plans, (f) up to a maximum of 670,453 shares of Common Stock will be reserved and available for issuance pursuant to future awards under

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the Stock Incentive Plans, (g) up to a maximum of 340,000 shares of Common Stock will be reserved for future issuance pursuant to the Company’s common stock purchase warrants originally issued on October 29, 2002 and expiring on October 29, 2007 and (h) neither the Company nor any of its subsidiaries will be obligated to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of, or securities convertible into, or exchangeable or exercisable for, shares of capital stock or other voting securities of, the Company or any of its subsidiaries.

Section 3.3 Issuance of Conversion Shares. Upon issuance by the Company, the Conversion Shares will be validly issued, fully paid and non-assessable, free and clear of all Liens (as such term is defined in the Series A Certificate) and not subject to any preemptive rights.

Section 3.4 Authorization; Enforceability. The Company has all requisite corporate power and authority to enter into, execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company, and, assuming the due authorization, execution and delivery thereof by the Holders, constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity.

Section 3.5 Consents; No Violations. Neither the execution, delivery or performance by the Company of this Agreement nor the consummation of the transactions contemplated hereby will (a) conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation or bylaws of the Company, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any lien or charge, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law, or any provision of any agreement or other instrument to which the Company or any of its subsidiaries is a party or pursuant to which any of the assets or properties of the Company or any of its subsidiaries is subject, except for breaches, violations, defaults, liens or charges, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, would not materially adversely affect the Company’s ability to consummate the transactions contemplated by this Agreement, or (c) require any consents, approvals and filings on the part of the Company from or with any governmental entity, except for such consents, approvals and filings which, if not made or obtained by the Company, would not materially adversely affect the Company’s ability to consummate the transactions contemplated by this Agreement.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE HOLDERS

Each Holder severally and not jointly represents and warrants to, and agrees with, the Company as of the date hereof and as of the Closing Date as follows with respect to the Conversion Shares it will acquire upon the Series A Preferred Stock Conversion:

Section 4.1. Acquisition for Investment. Such Holder is acquiring the Conversion Shares for its own account, for investment and not with a view to, or for sale in connection with, the distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) (it being understood that except as otherwise provided in this Agreement, such Holder does not agree to hold the Conversion Shares for any minimum or other specific term and reserves the right to dispose of the Conversion Shares at any time in accordance with the Securities Act and state securities laws applicable to such disposition).

Section 4.2. Accredited Investor Status. Such Holder is an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. Such Holder has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Conversion Shares and is capable of bearing the economic risks of such investment. Such Holder understands that its investment in the Conversion Shares involves a significant degree of risk.

Section 4.3. Information. Such Holder and its advisers have been furnished with all materials relating to the business, finances and operations of the Company and its subsidiaries and materials relating to the Series A Preferred Stock Conversion and the Recapitalization and related transactions which have been requested by such Holder or its advisers. Such Holder and its advisers have been afforded the opportunity to ask questions of the Company’s management concerning each of the foregoing matters.

Section 4.4 Sale or Transfer. Such Holder understands that the sale or re-sale of the Conversion Shares has not been and is not being registered under the Securities Act or any applicable state securities laws, and that the Conversion Shares may not be sold or otherwise transferred unless (a) the Conversion Shares are sold or transferred pursuant to an effective registration statement under the Securities Act and applicable state securities laws or (b) the Conversion Shares are sold or transferred pursuant to an exemption from such registration.

Section 4.5 Residency. In the case of any Holder that is not a natural person, the principal offices of such Holder are located at the address set forth on the signature pages hereof. In the case of any Holder that is a natural person, the principal residence of such Holder is located at the address set forth on the signature pages hereof.

Section 4.6 Organization. In the case of any Holder that is not a natural person, such Holder is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of formation.

Section 4.7 Due Authorization. Such Holder has the requisite power and authority to enter into, execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution and delivery by such Holder of this Agreement and the compliance by such Holder with each of the provisions of

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this Agreement (a) are within the power and authority of such Holder and (b) have been duly authorized by all necessary action on the part of such Holder. This Agreement has been duly and validly executed and delivered by such Holder. Assuming the due authorization, execution and delivery thereof by the Company, this Agreement constitutes a valid and binding obligation of such Holder, enforceable against such Holder in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity.

Section 4.8 Consents: No Violations. Neither the execution, delivery or performance by such Holder of this Agreement nor the consummation of the transactions contemplated hereby shall (a) in the case of any Holder that is not a natural person, conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation, bylaws or other organizational documents of such Holder, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any lien or charge, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law, or any provision of any agreement or other instrument to which such Holder is a party or pursuant to which such Holder or any of its assets or properties is subject, except for breaches, violations, defaults, liens or charges, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, would not materially adversely affect such Holder’s ability to consummate the transactions contemplated by this Agreement, or (c) require any consents, approvals and filings on the part of such Holder, from or with any governmental entity except for the consents, approvals and filings which, if not made or obtained by such Holder, would not materially adversely affect such Holder’s ability to consummate the transactions contemplated by this Agreement.

ARTICLE V

COVENANTS

Section 5.1 Public Announcements. The Company and the Holders shall consult with each other before issuing any press release or make any public statement with respect to this Agreement or the transactions contemplated hereby and shall not issue any such press release or make any such public statement with respect thereto without the prior consent of the other party, which consent shall not be unreasonably withheld, delayed or conditioned, except that the Company may, without the prior consent of any Holder, and any Holder may, without the prior consent of the Company, issue such a press release or make such a public statement as may be required by law; provided, that, to the extent time permits, such party shall have used commercially reasonable efforts to consult with the other party before issuing any such press release or making any such public statement.

Section 5.2 Further Assurances. At any time or from time to time after the date of this Agreement, the Company, on the one hand, and each Holder, on the other hand, agree to cooperate with each other and, at the request of any other party, to execute and deliver any further instruments or documents and to take all such further actions as such other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated by this Agreement and otherwise to carry out the intent of the parties hereunder.

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Section 5.3 Confidential Treatment of Confidential Information. In the event any Holder (including its officers, employees, counsel, accountants, financial advisers, partners and other authorized representatives) obtains from the Company or any of its subsidiaries any Confidential Information (as defined in this Section 5.3), such Holder (a) shall treat all such Confidential Information as confidential, (b) shall use such Confidential Information only for purposes of evaluating the transactions contemplated by this Agreement and (c) shall not disclose such Confidential Information to any third party except to such officers, employees, counsel, accountants, financial advisers, partners and other authorized representatives of such Holder who need to know such Confidential Information for the purpose of effectuating the transactions contemplated by this Agreement and who have been informed of and have agreed to protect the confidential nature of such Confidential Information (and such Holder shall be responsible for compliance with this Section 5.3 by such officers, employees, counsel, accountants, partners and other authorized representatives). For purposes of this Agreement, “Confidential Information” means information relating to the Company’s business, intellectual property and processes, operations, strategies, liquidity and financial condition, Recapitalization terms, pricing policies, markets, customers, distribution, sales, marketing and production and future business plans and any other information of a “confidential” nature, specifically including any information that is identified orally or in writing by the Company to be confidential, or that any Holder should reasonably understand under the circumstances to be a trade secret or information of a similar nature, provided, that Confidential Information shall not include any such information which (i) was in the public domain on the date hereof or subsequently comes into the public domain other than through the fault or negligence of a Holder, (ii) was lawfully obtained by a Holder from a third party without breach of this Agreement and otherwise not in violation of the Company’s rights, (iii) was known to a Holder at the time of disclosure of such Confidential Information to such Holder by the Company, provided, that such Holder was not, at such time, subject to any confidentiality obligation with respect thereto, or (iv) was independently developed by a Holder without making use of any Confidential Information.

ARTICLE VI

HOLDER REPRESENTATIVE

The Holders hereby appoint Campbell B. Lanier, III as the Holders’ exclusive agent to act on the Holders’ behalf with respect to the matters specified in this Article VI. Such representative, or such other representative as the Holders may appoint from time to time to replace Campbell B. Lanier, III, is hereinafter referred to as the “Holder Representative.” The Holder Representative shall take any and all actions which the Holder Representative believes are necessary or appropriate under this Agreement for and on behalf of the Holders as fully as if the Holders were acting on their own behalf, including, without limitation, taking any and all actions specified in or contemplated by this Agreement to be taken by the Holders prior to, on or after the Closing Date, approving any amendment to or waiver under this Agreement, receiving notice of and defending any claims pursuant to this Agreement, giving notice of and asserting any claims pursuant to this Agreement, consenting

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to, compromising or settling claims made pursuant to this Agreement, and engaging counsel, accountants or other representatives in connection with the foregoing matters. The Company shall have the right to rely upon all actions taken or omitted to be taken by the Holder Representative pursuant to this Agreement, all of which actions or omissions shall be legally binding upon each of the Holders.

ARTICLE VII

TERMINATION

Section 7.1 Termination. This Agreement may be terminated at any time before the Closing Date:

(a) by mutual written agreement of the Company and the Holder Representative; and

(b) by the Company or the Holder Representative, if the Closing Date does not occur on or before September 30, 2007.

Section 7.2 Effect of Termination. If this Agreement is terminated by either the Company or the Holders pursuant to Section 7.1, this Agreement shall forthwith become void, and there shall be no further obligations with respect to the Series A Preferred Stock Conversion on the part of the Company or the Holders or their respective stockholders, directors, officers, employees, agents or representatives, except for the provisions of Sections 5.1 and 5.3 and Article VIII, all of which shall survive any termination of this Agreement; provided, that nothing in this Section 7.2 shall relieve any party hereunder from liability for any willful breach of this Agreement.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 Termination of Registration Rights Agreement. The Holders hereby agree that, (a) effective as of the time of the Series A Preferred Stock Conversion, the Registration Rights Agreement, dated as of October 29, 2002 and amended through the date hereof, among the Company and the Holders and the other persons listed on the signature pages thereof shall automatically terminate and become void without any further action by the Company or any Holder or other party thereto notwithstanding any contrary provision of such Registration Rights Agreement (including Section 24 thereof) and (b) the agreement of the parties pursuant to this Section 8.1 shall be deemed an “Amendment” within the meaning of, and entered into pursuant to, Section 18 of such Registration Rights Agreement.

Section 8.2 Survival of Representations and Warranties. All representations and warranties set forth in this Agreement or in any writing delivered by any party in connection herewith shall survive the transactions contemplated by this Agreement to be consummated on the Closing Date (regardless of any investigation, inquiry, or examination made by any party or on its behalf or any knowledge of any party or the acceptance by any party of any certificate or opinion) for a period of one year following the Closing Date.

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Section 8.3 Enforcement. The parties hereto agree that (a) irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific intent or were otherwise breached and (b) the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they may be entitled by law or equity.

Section 8.4 Successors and Assigns. Except as otherwise expressly provided herein, (a) all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors, assigns, heirs and legal representatives of the parties hereto, whether so expressed or not, and (b) no party may assign or delegate all or any portion of its rights, obligations or liabilities under this Agreement without the prior written consent of each other party to this Agreement; provided, that any such consent required to be given by the Holders shall be effective if given by the Majority Holders. Without limiting the generality of the foregoing, this Agreement shall survive the death or disability of each Holder that is a natural person.

Section 8.5 Entire Agreement. This Agreement (including the Exhibits and Schedule hereto) constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein.

Section 8.6 Notices. All notices, demands, requests, consents or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when delivered personally to the recipient, (b) when telecopied to the recipient (with hard copy sent to the recipient by reputable overnight courier service (charges prepaid) that same day) if telecopied before 5:00 p.m. New York City time on a business day, and otherwise on the next business day, (c) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid) or (d) on the first business day that is at least five days after the date of deposit thereof in the United States mails for delivery by certified mail. Such notices, demands, requests, consents and other communications shall be sent to the following persons at the following addresses:

(i) if to the Company, to:

ITC^DeltaCom, Inc.

7037 Old Madison Pike

Huntsville, Alabama 35806

Telecopy No.: (256) 382-3936

Attention: J. Thomas Mullis, Esq.

  Senior Vice President–Legal and Regulatory

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(ii) if to the Holders, to:

Campbell B. Lanier, III

P. O. Box 510

West Point, Georgia 31833

With a copy (which shall not constitute notice) to Holders’ counsel:

Sutherland Asbill & Brennan LLP

999 Peachtree Street, N.E.

Atlanta, Georgia 33039

Telecopy No.: (404) 853-8806

Attention: Wade H. Stribling

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

Section 8.7 Amendments; Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the written consent thereto of the Company and the Holder Representative.

Section 8.8 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement.

Section 8.9 Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement.

Section 8.10 Governing Law. This Agreement shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of New York applicable to contracts executed and to be performed wholly within such state.

Section 8.11 Exclusive Jurisdiction; Venue. Any process against the Company or a Holder in, or in connection with, any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, may be served personally or by certified mail pursuant to the notice provision set forth in Section 8.6 with the same effect as though served on it personally. Each of the parties hereto hereby irrevocably submits in any suit, action or proceeding by the parties hereto arising out of or relating to this Agreement or any of the transactions contemplated hereby to the exclusive jurisdiction and venue of the federal and state courts of the State of New York and irrevocably waives any and all objections to exclusive jurisdiction and review of venue that any such party may have under the laws of the State of New York or the United States.

Section 8.12 Waiver of Jury Trial. The Company and the Holders hereby waive any right they may have to a trial by jury in respect of any action, proceeding or litigation directly or indirectly arising out of, under or in connection with this Agreement.

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Section 8.13 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not render invalid or unenforceable any other provision of this Agreement.

Section 8.14 Delivery by Facsimile. This Agreement and each other agreement or instrument entered into in connection herewith or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall reexecute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation or enforceability of a contract, and each such party forever waives any such defense.

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first above written.

COMPANY
ITC^DeltaCom, Inc.
By:	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Senior Vice President-Legal and Regulatory

SERIES A PREFERRED STOCKHOLDERS
/s/ Campbell B. Lanier, III
Campbell B. Lanier, III
Brown Investment Partners, L.P.
By:	/s/ Campbell B. Lanier, III
Name:	Campbell B. Lanier, III
Title:	General Partner
The Burton Partnership, Limited Partnership
By:	/s/ Donald W. Burton
Name:	Donald W. Burton
Title:	General Partner
The Burton Partnership (QP), Limited Partnership
By:	/s/ Donald W. Burton
Name:	Donald W. Burton
Title:	General Partner
/s/ Douglas A. Shumate
Douglas A. Shumate
/s/ James Smith Lanier II
James Smith Lanier II
/s/ Elizabeth Walker Lanier
Elizabeth Walker Lanier

SERIES A PREFERRED STOCKHOLDERS
/s/ Carroll Lanier Hodges
Carroll Lanier Hodges
/s/ Ellen L. Collins
Ellen L. Collins
/s/ John Thompson Lanier
John Thompson Lanier
/s/ Elizabeth L. Lester
Elizabeth L. Lester
The 1997 Trust FBO Campbell B. Lanier, IV
By:	/s/ ILLEGIBLE
Name:
Title:	Trustee
The 1999 Trust FBO Campbell B. Lanier, IV
By:	/s/ ILLEGIBLE
Name:
Title:	Trustee
CT Communications
By:	/s/ James E. Hansman
Name:	James E. Hansman
Title:	Senior Vice President and Chief Financial Officer

Basso Holdings Ltd
By:	/s/ Howard I. Fischer
Name:	Howard I. Fischer
Title:	Authorized Signatory
Basso Multi-Strategy Holding Fund Ltd
By:	/s/ Howard I. Fischer
Name:	Howard I. Fischer
Title:	Authorized Signatory

J. Smith Lanier and Company
By:	/s/ Frank E. Plan
Name:	Frank E. Plan
Title:	Chief Financial Officer
North State Telephone Company
By:	/s/ Royster M. Tucker, Jr.
Name:	Royster M. Tucker, Jr.
Title:	President

/s/ William A. Walker and /s/ Margie R. Walker

William A. Walker and Margie R. Walker, Jt Ten

/s/ Henry E. Crosby, Jr.

Henry E. Crosby, Jr.

EX-10.10

Exhibit 10.10

WCAS EXCHANGE AGREEMENT

THIS WCAS EXCHANGE AGREEMENT (this “Agreement”), dated as of July 31, 2007, is made among ITC^DeltaCom, Inc., a Delaware corporation (the “Company”), and each of the persons listed on the signature pages hereto under the heading “WCAS Holders” (individually, a “Holder” and collectively, the “Holders”).

RECITALS

WHEREAS, the Company intends to consummate a recapitalization (the “Recapitalization”) in which, among other transactions, (a) the Company’s 8% Series B Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock”), shall be converted (the “Series B Preferred Stock Conversion”) into shares of the Company’s Common Stock, par value $0.01 per share (the “Common Stock”), (b) the Company’s Common Stock purchase warrants originally issued on October 6, 2003 (the “Series B Warrants”) shall be exchanged for shares of Common Stock and (c) the Company’s Common Stock purchase warrants originally issued on March 29, 2005 (the “Series C Warrants”) shall be exchanged for shares of Common Stock (such transactions collectively, the “Exchange Transactions”);

WHEREAS, the Holders are (a) the holders of record of outstanding shares of Series B Preferred Stock representing at least 66  ²/3% of the voting power of all outstanding shares of Series B Preferred Stock, (b) the holders of record of at least a majority of the out-standing Series B Warrants and (c) the holders of record of at least a majority of the outstanding Series C Warrants; and

WHEREAS, subject to the terms and conditions of this Agreement, the Holders wish to authorize certain actions to facilitate the consummation of the Exchange Transactions as of the closing date of the Recapitalization (the “Closing Date”);

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in this Agreement, the parties hereto agree as follows:

ARTICLE I

EXCHANGE TRANSACTIONS

Section 1.1 Execution of Documents for Exchange Transactions. To facilitate the consummation of the Exchange Transactions, each Holder hereby agrees that, on or before the time for delivery thereof to the Company as provided for in Section 1.2, such Holder shall execute:

(a) the Consent of Holders of Series B Preferred Stock in the form of Exhibit A hereto (the “Stockholder Consent”);

(b) the Consent of Holders of Series B Warrants in the form of Exhibit B hereto (the “Series B Warrant Consent”); and

(c) the Consent of Holders of Series C Warrants in the form of Exhibit C hereto (the “Series C Warrant Consent”).

Section 1.2 Consummation of Exchange Transactions. Subject to the satisfaction of the closing conditions referred to in Section 1.3, the Holders agree to cause the Holder Representative (as defined in Article V) to take the following actions on the Closing Date:

(a) deliver the Stockholder Consent to the Company and authorize the Company to file the Series B Certificate of Amendment referred to therein with the Delaware Secretary of State;

(b) deliver the Series B Warrant Consent to the Company, authorize the Company to deliver Amendment No. 3 to Warrant Agreement referred to therein to Mellon Investor Services LLC (the “Warrant Agent”) and deliver to the Company the certificates representing the Series B Warrants held by such Holders for exchange for Common Stock in accordance with Section 1.5(a); and

(c) deliver the Series C Warrant Consent to the Company, authorize the Company to deliver Amendment No. 2 to Warrant Agreement referred to therein to the Warrant Agent and deliver to the Company the certificates representing the Series C Warrants held by such Holders for exchange for Common Stock in accordance with Section 1.5(b).

Section 1.3 Conditions to Exchange Transactions. The Holders shall be obligated to take the actions provided for in Section 1.2 only if, concurrently with the consummation of the Exchange Transactions:

(a) the Company and its subsidiaries shall obtain (i) not less than $305 million aggregate principal amount of secured term loan credit facilities for immediate application to the refinancing and repayment of their outstanding senior secured indebtedness and (ii) a secured revolving credit facility with available borrowings of up to a maximum of $10 million principal amount at any time outstanding;

(b) the Company shall receive cash gross proceeds of not less than $21 million from sales of its Common Stock and cash gross proceeds of not less than $41 million from sales of a new issue of its 6% Series H Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series H Preferred Stock”);

(c) holders of approximately $52 million in aggregate principal amount of the third lien Senior Secured Notes due 2009 of Interstate FiberNet, Inc. shall exchange such notes for approximately 17,275,791 shares of Common Stock; and

(d) the Company shall consummate the other components of the Recapitalization on terms that would make the representation and warranty of the Company set forth in Section 2.2 true in all material respects.

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Section 1.4 Issuance of Conversion Shares.

(a) Upon effectiveness of the Series B Preferred Stock Conversion, the shares of Series B Preferred Stock outstanding as of the Closing Date shall automatically be converted at a conversion price of $5.17325725978605 per share of Common Stock into a total of approximately 11,735,080 shares of Common Stock, subject to increase if the Corporation shall elect to round fractional shares of Common Stock up to the nearest whole share of Common Stock (the “Conversion Shares”).

(b) Schedule 1 hereto lists, as of July 20, 2007, (i) each holder of record of the Series B Preferred Stock, (ii) the total number of shares of Series B Preferred Stock held by such holder as reflected in the Company’s stock records and (iii) the total number of Conversion Shares that would be issuable to such holder upon effectiveness of the Series B Preferred Stock Conversion.

Section 1.5 Issuance of Warrant Shares.

(a) Upon the delivery of the Series B Warrants by or on behalf of the Holders to the Company pursuant to Section 2(b), and the effectiveness of the Exchange Transactions, the Company shall issue 0.00193433 of one share of Common Stock to each Holder in exchange for each such Series B Warrant. Schedule 2 hereto lists, as of July 20, 2007, (i) each holder of record of the Series B Warrants, (ii) the total number of Series B Warrants held by such holder as reflected in the Company’s records and (iii) the total number of shares of Common Stock (the “Series B Warrant Shares”) that would be issuable to such holder in exchange for Series B Warrants.

(b) Upon the delivery of the Series C Warrants by or on behalf of the Holders to the Company pursuant to Section 2(c), and the effectiveness of the Exchange Transactions, the Company shall issue 0.245128150 of one share of Common Stock to each Holder in exchange for each such Series C. Warrant. Schedule 3 hereto lists, as of July 20, 2007, (i) each holder of record of the Series C Warrants, (ii) the total number of Series C Warrants held by such holder as reflected in the Company’s records and (iii) the total number of shares of Common Stock (the “Series C Warrant Shares” and collectively with the Conversion Shares and the Series B Warrant Shares, the “Exchange Shares”) that would be issuable to such holder in exchange for Series C Warrants.

Section 1.6 Deliveries.

(a) On or before the Closing Date, each Holder shall tender to the Holder Representative, for delivery by the Holder Representative to the Company on or before the Closing Date, pursuant to one or more letters of transmittal, (i) all share certificates representing the shares of Series B Preferred Stock held of record by such Holder, (ii) all certificates representing the Series B Warrants held of record by such Holder and (iii) all certificates representing the Series C Warrants held of record by such Holder.

(b) As promptly as reasonably practicable after the Closing Date (and, with respect to the Conversion Shares, in accordance with the certificate of designation of the Series B Preferred Stock), the Company shall deliver, or cause the Company’s transfer agent for the Common Stock to deliver, to each Holder a share certificate or certificates representing the Exchange Shares issued by the Company to such Holder upon the effectiveness of the Exchange Transactions.

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Section 1.7 Subscription Right. The Holders, as the members of the WCAS Holder Group as defined in and for purposes of the Amended and Restated Governance Agreement, dated as of July 26, 2005, as amended, among the Company and the securityholders of the Company listed on the signature pages thereof (the “Governance Agreement”), hereby irrevocably waive the exercise of any rights they may have under Section 3.4 of the Governance Agreement, and the Company’s compliance with such Section 3.4, in connection with any and all transactions constituting or relating to the Recapitalization that will be consummated on the date hereof, including, without limitation, the transactions referred to in Sections 1.3(b) and 1.3(c) of this Agreement, to the extent that Section 3.4 of the Governance Agreement shall be applicable to any such transactions.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to, and agrees with, each Holder as of the date hereof and as of the Closing Date as follows:

Section 2.1 Organization, Standing, etc. The Company and each of its subsidiaries is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with all corporate power and authority to own, lease and operate its properties and to conduct its business as currently owned, leased, operated and conducted.

Section 2.2 Capital Stock. As of the Closing Date, after giving effect to the Recapitalization and the other transactions to occur on the Closing Date, (a) the authorized capital stock of the Company will consist of 350,000,000 shares of Common Stock and 50,000,000 shares of preferred stock, par value $0.01 per share, (b) up to a maximum of 68,000,000 shares of Common Stock will be issued and outstanding, (c) 412,215 shares of Series H Preferred Stock will be issued and outstanding, (d) options to acquire up to a maximum of 650,000 shares of Common Stock pursuant to the ITC^DeltaCom, Inc. Amended and Restated Stock Incentive Plan and the ITC^DeltaCom, Inc. Executive Stock Incentive Plan (together, the “Stock Incentive Plans”) will be issued and outstanding, (e) restricted stock units for up to a maximum of 4,790,768 shares of Common Stock will be issued and outstanding pursuant to the Stock Incentive Plans, (f) up to a maximum of 670,453 shares of Common Stock will be reserved and available for issuance pursuant to future awards under the Stock Incentive Plans, (g) up to a maximum of 340,000 shares of Common Stock will be reserved for future issuance pursuant to the Company’s common stock purchase warrants originally issued on October 29, 2002 and expiring on October 29, 2007 and (h) neither the Company nor any of its subsidiaries will be obligated to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of, or securities convertible into, or exchangeable or exercisable for, shares of capital stock or other voting securities of, the Company or any of its subsidiaries.

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Section 2.3 Issuance of Exchange Shares. Upon issuance by the Company, the Exchange Shares will be validly issued, fully paid and non-assessable, free and clear of all liens and charges and not subject to any preemptive rights.

Section 2.4 Authorization; Enforceability. The Company has all requisite corporate power and authority to enter into, execute, deliver and perform its obligations under this Agreement and the other documents required to effect the Exchange Transactions and the Recapitalization to which the Company is a party (such other documents, the “Transaction Documents”) and to consummate the transactions contemplated hereby and thereby. This Agreement and the Transaction Documents have been duly authorized and have been or will be duly executed and delivered by the Company, and, assuming the due authorization, execution and delivery thereof by the Holders and the other parties thereto, constitute, or upon execution thereof will constitute, legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity.

Section 2.5 Consents; No Violations. Neither the execution, delivery or performance by the Company of this Agreement or the other Transaction Documents nor the consummation of the transactions contemplated hereby or thereby will (a) conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation or bylaws of the Company, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any lien or charge, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law, or any provision of any agreement or other instrument to which the Company or any of its subsidiaries is a party or pursuant to which any of the assets or properties of the Company or any of its subsidiaries is subject, except for breaches, violations, defaults, liens or charges, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, would not materially adversely affect the Company’s ability to consummate the transactions contemplated by this Agreement, or (c) require any consents, approvals and filings on the part of the Company on or prior to the Closing Date from or with any governmental entity, except for such consents, approvals and filings which, if not made or obtained by the Company, would not materially adversely affect the Company’s ability to consummate the transactions contemplated by this Agreement.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE HOLDERS

Each Holder severally and not jointly represents and warrants to, and agrees with, the Company as of the date hereof and as of the Closing Date as follows with respect to the Exchange Shares it will acquire upon the consummation of the Exchange Transactions:

Section 3.1. Acquisition for Investment. Such Holder is acquiring the Exchange Shares for its own account, for investment and not with a view to, or for sale in connection with, the distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) (it being understood that except as otherwise provided in this Agreement, such Holder does not agree to hold the Exchange Shares for any minimum or other specific term and reserves the right to dispose of the Exchange Shares at any time in accordance with the Securities Act and state securities laws applicable to such disposition).

Section 3.2. Accredited Investor Status. Such Holder is an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. Such Holder has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Exchange Shares and is capable of bearing the economic risks of such investment. Such Holder understands that its investment in the Exchange Shares involves a significant degree of risk.

Section 3.3. Information. Such Holder and its advisers have been furnished with all materials relating to the business, finances and operations of the Company and its subsidiaries and materials relating to the Exchange Transactions and the other components of the Recapitalization and related transactions which have been requested by such Holder or its advisers. Such Holder and its advisers have been afforded the opportunity to ask questions of the Company’s management concerning each of the foregoing matters.

Section 3.4 Sale or Transfer. Such Holder understands that the sale or re-sale of the Exchange Shares has not been and is not being registered under the Securities Act or any applicable state securities laws, and that the Exchange Shares may not be sold or otherwise transferred unless (a) the Exchange Shares are sold or transferred pursuant to an effective registration statement under the Securities Act and applicable state securities laws, (b) such Holder shall have delivered to the Company evidence reasonably satisfactory to the Company indicating that the Exchange Shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (c) the Exchange Shares are sold pursuant to Rule 144 under the Securities Act. To the extent that the Company deems it appropriate to do so under applicable law, the Company may affix a legend to the foregoing effect to the share certificates representing the Exchange Shares and enter a stop-transfer order against the transfer of such certificates.

Section 3.5 Residency. In the case of any Holder that is not a natural person, the principal offices of such Holder are located at the address set forth on the signature pages hereof. In the case of any Holder that is a natural person, the principal residence of such Holder is located at the address set forth on the signature pages hereof.

Section 3.6 Organization. In the case of any Holder that is not a natural person, such Holder is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of formation.

Section 3.7 Due Authorization. Such Holder has the requisite power and authority to enter into, execute, deliver and perform its obligations under this Agreement and the other documents required to effect the Exchange Transactions to which such Holder is a

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party (such other documents, the “Exchange Transaction Documents”) and to consummate the transactions contemplated hereby and thereby. The execution and delivery by such Holder of this Agreement and the Exchange Transaction Documents and the compliance by such Holder with each of the provisions of this Agreement and the Exchange Transaction Documents (a) are within the power and authority of such Holder and (b) have been duly authorized by all necessary action on the part of such Holder. This Agreement and the Exchange Transaction Documents have been or will be duly and validly executed and delivered by such Holder. Assuming the due authorization, execution and delivery thereof by the Company and the other parties thereto, this Agreement and the Exchange Transaction Documents constitute, or upon execution thereof will constitute, valid and binding obligations of such Holder, enforceable against such Holder in accordance with their terms, except as such enforcement may be limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity.

Section 3.8 Consents: No Violations. Neither the execution, delivery or performance by such Holder of this Agreement or the Exchange Transaction Documents nor the consummation of the transactions contemplated hereby or thereby shall (a) in the case of any Holder that is not a natural person, conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation, bylaws or other organizational documents of such Holder, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any lien or charge, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law, or any provision of any agreement or other instrument to which such Holder is a party or pursuant to which such Holder or any of its assets or properties is subject, except for breaches, violations, defaults, liens or charges, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, would not materially adversely affect such Holder’s ability to consummate the transactions contemplated by this Agreement, or (c) require any consents, approvals and filings on the part of such Holder, from or with any governmental entity except for the consents, approvals and filings which, if not made or obtained by such Holder, would not materially adversely affect such Holder’s ability to consummate the transactions contemplated by this Agreement.

ARTICLE IV

COVENANTS

Section 4.1 Public Announcements. The Company and the Holders shall consult with each other before issuing any press release or make any public statement with respect to this Agreement or the transactions contemplated hereby and shall not issue any such press release or make any such public statement with respect thereto without the prior consent of the other party, which consent shall not be unreasonably withheld, delayed or conditioned, except that the Company may, without the prior consent of any Holder, and any Holder may, without the prior consent of the Company, issue such a press release or make such a public statement as may be required by law; provided, that, to the extent time permits, such party shall have used commercially reasonable efforts to consult with the other party before issuing any such press release or making any such public statement.

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Section 4.2 Further Assurances. At any time or from time to time after the date of this Agreement, the Company, on the one hand, and each Holder, on the other hand, agree to cooperate with each other and, at the request of any other party, to execute and deliver any further instruments or documents and to take all such further actions as such other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated by this Agreement and otherwise to carry out the intent of the parties hereunder.

ARTICLE V

HOLDER REPRESENTATIVE

The Holders hereby appoint Welsh, Carson, Anderson & Stowe VIII, L.P. as the Holders’ exclusive agent to act on the Holders’ behalf with respect to the matters specified in this Article V. Such representative, or such other representative as the Holders may appoint from time to time to replace Welsh, Carson, Anderson & Stowe VIII, L.P., is hereinafter referred to as the “Holder Representative.” The Holder Representative shall take any and all actions which the Holder Representative believes are necessary or appropriate under this Agreement for and on behalf of the Holders as fully as if the Holders were acting on their own behalf, including, without limitation, making the deliveries referred to in Sections 1.2 and 1.6(a) and taking any and all other actions specified in or contemplated by this Agreement to be taken by the Holders prior to, on or after the Closing Date, approving amendments to or waivers under this Agreement, receiving notice of and defending any claims pursuant to this Agreement, giving notice of and asserting any claims pursuant to this Agreement, consenting to, compromising or settling claims made pursuant to this Agreement, and engaging counsel, accountants or other representatives in connection with the foregoing matters. The Company shall have the right to rely upon all actions taken or omitted to be taken by the Holder Representative pursuant to this Agreement, all of which actions or omissions shall be legally binding upon each of the Holders.

ARTICLE VI

TERMINATION

Section 6.1 Termination. This Agreement may be terminated at any time before the Closing Date:

(a) by mutual written agreement of the Company and the Holder Representative; and

(b) by the Company or the Holder Representative, if the Closing Date does not occur on or before September 30, 2007.

Section 6.2 Effect of Termination. If this Agreement is terminated by either the Company or the Holders pursuant to Section 6.1, this Agreement shall forthwith become

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void, and there shall be no further obligations with respect to the Exchange Transactions on the part of the Company or the Holders or their respective stockholders, directors, officers, employees, agents or representatives, except for the provisions of Section 4.1 and Article VII, all of which shall survive any termination of this Agreement; provided, that nothing in this Section 6.2 shall relieve any party hereunder from liability for any willful breach of this Agreement.

ARTICLE VII

MISCELLANEOUS

Section 7.1 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not render invalid or unenforceable any other provision of this Agreement.

Section 7.2 Survival of Representations and Warranties. All representations and warranties set forth in this Agreement or in any writing delivered by any party in connection herewith shall survive the transactions contemplated by this Agreement to be consummated on the Closing Date (regardless of any investigation, inquiry, or examination made by any party or on its behalf or any knowledge of any party or the acceptance by any party of any certificate or opinion) for a period of one year following the Closing Date.

Section 7.3 Enforcement. The parties hereto agree that (a) irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific intent or were otherwise breached and (b) the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they may be entitled by law or equity.

Section 7.4 Successors and Assigns. Except as otherwise expressly provided herein, (a) all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors, assigns, heirs and legal representatives of the parties hereto, whether so expressed or not, and (b) no party may assign or delegate all or any portion of its rights, obligations or liabilities under this Agreement without the prior written consent of each other party to this Agreement; provided, that any such consent required to be given by the Holders shall be effective if given by the Holder Representative. Without limiting the generality of the foregoing, this Agreement shall survive the death or disability of each Holder that is a natural person.

Section 7.5 Entire Agreement. This Agreement (including the Exhibits and Schedule hereto) constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein.

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Section 7.6 Notices. All notices, demands, requests, consents or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when delivered personally to the recipient, (b) when telecopied to the recipient (with hard copy sent to the recipient by reputable overnight courier service (charges prepaid) that same day) if telecopied before 5:00 p.m. New York City time on a business day, and otherwise on the next business day, (c) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid) or (d) on the first business day that is at least five days after the date of deposit thereof in the United States mails for delivery by certified mail. Such notices, demands, requests, consents and other communications shall be sent to the following persons at the following addresses:

(i) if to the Company, to:

ITC^DeltaCom, Inc.

7037 Old Madison Pike

Huntsville, Alabama 35806

Telecopy No.: (256) 382-3936

Attention: J. Thomas Mullis, Esq.

  Senior Vice President–Legal and Regulatory

(ii) if to the Holders, to:

Thomas E. McInerney

Welsh, Carson, Anderson & Stowe VIII, L.P.

320 Park Avenue

Suite 2500

New York, New York 10022

Telecopy No.: (212) 893-9548

With a copy (which shall not constitute notice) to:

Davis Polk & Wardwell

450 Lexington Avenue

New York, New York 10017

Telecopy No.: (212) 450-3800

Attention: Carole Schiffman

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

Section 7.7 Amendments; Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the written consent thereto of the Company and the Holder Representative.

Section 7.8 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement.

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Section 7.9 Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement.

Section 7.10 Governing Law. This Agreement shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of New York applicable to contracts executed and to be performed wholly within such state.

Section 7.11 Exclusive Jurisdiction; Venue. Any process against the Company or a Holder in, or in connection with, any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, may be served personally or by certified mail pursuant to the notice provision set forth in Section 7.6 with the same effect as though served on it personally. Each of the parties hereto hereby irrevocably submits in any suit, action or proceeding by the parties hereto arising out of or relating to this Agreement or any of the transactions contemplated hereby to the exclusive jurisdiction and venue of the federal and state courts of the State of New York and irrevocably waives any and all objections to exclusive jurisdiction and review of venue that any such party may have under the laws of the State of New York or the United States.

Section 7.12 Waiver of Jury Trial. The Company and the Holders hereby waive any right they may have to a trial by jury in respect of any action, proceeding or litigation directly or indirectly arising out of, under or in connection with this Agreement.

Section 7.13 Delivery by Facsimile. This Agreement and each other agreement or instrument entered into in connection herewith or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall reexecute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation or enforceability of a contract, and each such party forever waives any such defense.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first above written.

THE COMPANY:
	ITC^DELTACOM, INC.
	By:	/s/ J. Thomas Mullis
	Name:	J. Thomas Mullis
	Title:	Senior Vice President-Legal and Regulatory
THE WCAS HOLDERS:
	WCAS CAPITAL PARTNERS III, L.P.
	By:	WCAS CP III Associates L.L.C., General Partner
	By:	/s/ Jonathan M. Rather
	Name:	Jonathan M. Rather
	Title:	Managing Member
	WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
	By:	WCAS VIII Associates LLC, General Partner
	By:	/s/ Jonathan M. Rather
	Name:	Jonathan M. Rather
	Title:	Managing Member

Certain individuals and trusts:
By:	/s/ Jonathan M. Rather
	Jonathan M. Rather, as Attorney-in-fact for the individuals listed below:
	Bruce K. Anderson
	Patrick J. Welsh
	Russell L. Carson
	Andrew M. Paul
	Thomas E. McInerney
	Robert A. Minicucci
	Anthony J. de Nicola
	Paul B. Queally
	D. Scott Mackesy
	Sanjay Swani
	Laura M. VanBuren
	Sean M. Traynor
	John Almeida, Jr.
	Eric J. Lee
	IRA f/b/o Jonathan M. Rather
	IRA f/b/o James R. Matthews
/s/ Jill A. Hanau
Jill A. Hanau
Other trusts:
The Bruce K Anderson 2004 Irrevocable Trust
By:	/s/ Mary R. Anderson
Name:	Mary R. Anderson
Title:	Trustee
Mary R Anderson Tr UA Dtd 12/3/03
By:	/s/ Mary R. Anderson
Name:	Mary R. Anderson
Title:	Trustee

The Patrick Welsh 2004 Irrevocable Trust
By:	/s/ Carol Welsh
Name:	Carol Welsh
Title:	Trustee
Patrick J. Welsh Tr UA 05 09 05
By:	/s/ Patrick J. Welsh
Name:	Patrick J. Welsh
Title:	Trustee

EX-10.11

Exhibit 10.11

SERIES D WARRANT EXCHANGE AGREEMENT

THIS SERIES D WARRANT EXCHANGE AGREEMENT (this “Agreement”), dated as of July 31, 2007, is made among ITC^DeltaCom, Inc., a Delaware corporation (the “Company”), and each of the persons listed on the signature pages hereto under the heading “Warrant Holders” (individually, a “Holder” and collectively, the “Holders”).

RECITALS

WHEREAS, the Company intends to consummate a recapitalization (the “Recapitalization”) in which, among other transactions, the Company’s warrants originally issued on July 26, 2005 and December 23, 2005 (the “Series D Warrants”) shall be exchanged for shares of Common Stock (the “Exchange Transaction”);

WHEREAS, the Holders are the holders of record of at least a majority of the outstanding Series D Warrants; and

WHEREAS, subject to the terms and conditions of this Agreement, the Holders wish to authorize certain actions to facilitate the consummation of the Exchange Transaction as of the closing date of the Recapitalization (the “Closing Date”);

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements set forth in this Agreement, the parties hereto agree as follows:

ARTICLE I

EXCHANGE TRANSACTION

Section 1.1 Execution of Documents for Exchange Transaction. To facilitate the consummation of the Exchange Transaction, each Holder hereby agrees that, on or before the time for delivery thereof to the Company as provided for in Section 1.2, such Holder shall execute the Consent of Holders of Series D Warrants in the form of Exhibit A hereto (the “Series D Warrant Consent”).

Section 1.2 Consummation of Exchange Transaction. Subject to satisfaction of the closing conditions referred to in Section 1.3, the Holders agree to cause the Holder Representative (as defined in Article V hereof) to take the following actions on the Closing Date:

(a) deliver the Series D Warrant Consent to the Company and authorize the Company to deliver Amendment No. 2 to Warrant Agreement referred to therein to Mellon Investor Services LLC; and

(b) deliver to the Company the certificates representing the Series D Warrants held by such Holders, or other documents reasonably acceptable to the Company, for exchange for Common Stock in accordance with Section 5(a).

Section 1.3 Conditions to Exchange Transaction. The Holders shall be obligated to take the actions provided for in Section 1.2 only if, concurrently with the consummation of the Exchange Transaction:

(a) the Company and its subsidiaries shall obtain (i) not less than $305 million aggregate principal amount of secured term loan credit facilities for immediate application to the refinancing and repayment of their outstanding senior secured indebtedness and (ii) a secured revolving credit facility with available borrowings of up to a maximum of $10 million principal amount at any time outstanding;

(b) the Company shall receive cash gross proceeds of not less than $21 million from sales of its Common Stock and cash gross proceeds of not less than $41 million from sales of a new issue of its 6% Series H Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series H Preferred Stock”);

(c) holders of approximately $52 million in aggregate principal amount of the third lien Senior Secured Notes due 2009 of Interstate FiberNet, Inc. shall exchange such notes for approximately 17,275,791 shares of Common Stock; and

(d) the Company shall consummate the other components of the Recapitalization on terms that would make the representation and warranty of the Company set forth in Section 2.2 true in all material respects.

Section 1.4 Issuance of Series D Warrant Shares. Upon the delivery of the Series D Warrants by or on behalf of the Holders to the Company pursuant to Section 2(b), and the effectiveness of the Exchange Transaction, the Company shall issue 0.622072667 shares of Common Stock to each Holder in exchange for each such Series D Warrant. Schedule 1 hereto lists, as of July 20, 2007, (i) each Holder of record of the Series D Warrants, (ii) the total number of Series D Warrants held by such Holder as reflected in the Company’s records and (iii) the total number of shares of Common Stock (the “Series D Warrant Shares”) that would be issuable to such Holder in exchange for such Holder’s Series D Warrants.

Section 1.5 Deliveries.

(a) On or before the Closing Date, each Holder shall tender to the Holder Representative, for delivery by the Holder Representative to the Company on the Closing Date, pursuant to one or more letters of transmittal, all certificates representing the Series D Warrants held of record by such Holder, or other documents reasonably acceptable to the Company, for exchange for the Series D Warrant Shares.

(b) As promptly as reasonably practicable after the Closing Date, the Company shall deliver, or cause the Company’s transfer agent for the Common Stock to deliver, to each Holder who has delivered a certificate representing the Series D Warrants

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held of record by such Holder, or other documents reasonably acceptable to the Company, a share certificate or certificates representing the Series D Warrant Shares issued by the Company to such Holder upon the effectiveness of the Exchange Transaction.

Section 1.6 Subscription Right. The Holders, as the members of the TCP Holder Group as defined in and for purposes of the Amended and Restated Governance Agreement, dated as of July 26, 2005, as amended, among the Company and the securityholders of the Company listed on the signature pages thereof (the “Governance Agreement”), hereby irrevocably waive the exercise of any rights they may have under Section 3.4 of the Governance Agreement, and the Company’s compliance with such Section 3.4, in connection with any and all transactions constituting or relating to the Recapitalization that will be consummated on the Closing Date, including, without limitation, the transactions referred to in Sections 1.3(b) and 1.3(c) of this Agreement, to the extent that Section 3.4 of the Governance Agreement shall be applicable to any such transaction.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to, and agrees with, each Holder as of the date hereof and as of the Closing Date as follows:

Section 2.1 Organization, Standing, etc. The Company and each of its subsidiaries is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with all corporate power and authority to own, lease and operate its properties and to conduct its business as currently owned, leased, operated and conducted.

Section 2.2 Capital Stock. As of the Closing Date, after giving effect to the Recapitalization and the other transactions to occur on the Closing Date, (a) the authorized capital stock of the Company will consist of 350,000,000 shares of Common Stock and 50,000,000 shares of preferred stock, par value $0.01 per share, (b) up to a maximum of 68,000,000 shares of Common Stock will be issued and outstanding, (c) 412,215 shares of Series H Preferred Stock will be issued and outstanding, (d) options to acquire up to a maximum of 650,000 shares of Common Stock pursuant to the ITC^DeltaCom, Inc. Amended and Restated Stock Incentive Plan and the ITC^DeltaCom, Inc. Executive Stock Incentive Plan (together, the “Stock Incentive Plans”) will be issued and outstanding, (e) restricted stock units for up to a maximum of 4,790,768 shares of Common Stock will be issued and outstanding pursuant to the Stock Incentive Plans, (f) up to a maximum of 670,453 shares of Common Stock will be reserved and available for issuance pursuant to future awards under the Stock Incentive Plans, (g) up to a maximum of 340,000 shares of Common Stock will be reserved for future issuance pursuant to the Company’s common stock purchase warrants originally issued on October 29, 2002 and expiring on October 29, 2007 and (h) neither the Company nor any of its subsidiaries will be obligated to issue, deliver or sell, or cause to be issued,

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delivered or sold, additional shares of capital stock or other voting securities of, or securities convertible into, or exchangeable or exercisable for, shares of capital stock or other voting securities of, the Company or any of its subsidiaries.

Section 2.3 Issuance of Series D Warrant Shares. Upon issuance by the Company, the Series D Warrant Shares will be validly issued, fully paid and non-assessable, free and clear of all liens and charges and not subject to any preemptive rights.

Section 2.4 Authorization; Enforceability. The Company has all requisite corporate power and authority to enter into, execute, deliver and perform its obligations under this Agreement and the other documents required to effect the Exchange Transaction and the Recapitalization to which the Company is a party (such other documents, the “Transaction Documents”) and to consummate the transactions contemplated hereby and thereby. This Agreement and the Transaction Documents have been duly authorized or have been or will be duly executed and delivered by the Company, and, assuming the due authorization, execution and delivery thereof by the Holders and the other parties thereto, constitute, or upon execution thereof will constitute, legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity.

Section 2.5 Consents; No Violations. Neither the execution, delivery or performance by the Company of this Agreement and the Transaction Documents nor the consummation of the transactions contemplated hereby and thereby will (a) conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation or bylaws of the Company, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any lien or charge, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law, or any provision of any agreement or other instrument to which the Company or any of its subsidiaries is a party or pursuant to which any of the assets or properties of the Company or any of its subsidiaries is subject, except for breaches, violations, defaults, liens or charges, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, would not materially adversely affect the Company’s ability to consummate the transactions contemplated by this Agreement, or (c) require any consents, approvals and filings on the part of the Company on or prior to the Closing Date from or with any governmental entity, except for such consents, approvals and filings which, if not made or obtained by the Company, would not materially adversely affect the Company’s ability to consummate the transactions contemplated by this Agreement.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE HOLDERS

Each Holder severally and not jointly represents and warrants to, and agrees with, the Company as of the date hereof and as of the Closing Date as follows with respect to the Series D Warrant Shares it will acquire upon the consummation of the Exchange Transaction:

Section 3.1. Acquisition for Investment. Such Holder is acquiring the Series D Warrant Shares for its own account, for investment and not with a view to, or for sale in connection with, the distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) (it being understood that except as otherwise provided in this Agreement, such Holder does not agree to hold the Series D Warrant Shares for any minimum or other specific term and reserves the right to dispose of the Series D Warrant Shares at any time in accordance with the Securities Act and state securities laws applicable to such disposition).

Section 3.2. Accredited Investor Status. Such Holder is an “accredited investor,” as that term is defined in Rule 501(a) of Regulation D under the Securities Act. Such Holder has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Series D Warrant Shares and is capable of bearing the economic risks of such investment. Such Holder understands that its investment in the Series D Warrant Shares involves a significant degree of risk.

Section 3.3. Information. Such Holder and its advisers have been furnished with all materials relating to the business, finances and operations of the Company and its subsidiaries and materials relating to the Exchange Transaction and the other components of the Recapitalization and related transactions which have been requested by such Holder or its advisers. Such Holder and its advisers have been afforded the opportunity to ask questions of the Company’s management concerning each of the foregoing matters.

Section 3.4 Sale or Transfer. Such Holder understands that the sale or re-sale of the Series D Warrant Shares has not been and is not being registered under the Securities Act or any applicable state securities laws, and that the Series D Warrant Shares may not be sold or otherwise transferred unless (a) the Series D Warrant Shares are sold or transferred pursuant to an effective registration statement under the Securities Act and applicable state securities laws, (b) such Holder shall have delivered to the Company an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the Series D Warrant Shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (c) the Series D Warrant Shares are sold pursuant to Rule 144 under the Securities Act. To the extent that the Company deems it appropriate to do so under applicable law, the Company may affix a legend to the foregoing effect to the share certificates representing the Series D Warrant Shares and enter a stop-transfer order against the transfer of such certificates.

Section 3.5 Residency. In the case of any Holder that is not a natural person, the principal offices of such Holder are located at the address set forth on the signature pages hereof. In the case of any Holder that is a natural person, the principal residence of such Holder is located at the address set forth on the signature pages hereof.

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Section 3.6 Organization. In the case of any Holder that is not a natural person, such Holder is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of formation.

Section 3.7 Due Authorization. Such Holder has the requisite power and authority to enter into, execute, deliver and perform its obligations under this Agreement and the other documents required to effect the Exchange Transaction to which such Holder is a party (such other documents, the “Exchange Transaction Documents”) and to consummate the transactions contemplated hereby and thereby. The execution and delivery by such Holder of this Agreement and the Exchange Transaction Documents and the compliance by such Holder with each of the provisions of this Agreement and the Exchange Transaction Documents (a) are within the power and authority of such Holder and (b) have been duly authorized by all necessary action on the part of such Holder. This Agreement has been or will be duly and validly executed and delivered by such Holder. Assuming the due authorization, execution and delivery thereof by the Company and the other parties thereto, this Agreement and the Exchange Transaction Documents constitute, or upon execution thereof will constitute, valid and binding obligations of such Holder, enforceable against such Holder in accordance with their terms, except as such enforcement may be limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity.

Section 3.8 Consents: No Violations. Neither the execution, delivery or performance by such Holder of this Agreement or the Exchange Transaction Documents nor the consummation of the transactions contemplated hereby or thereby shall (a) in the case of any Holder that is not a natural person, conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation, bylaws or other organizational documents of such Holder, (b) constitute, with or without notice or the passage of time or both, a breach, violation or default, create any lien or charge, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under any law, or any provision of any agreement or other instrument to which such Holder is a party or pursuant to which such Holder or any of its assets or properties is subject, except for breaches, violations, defaults, liens or charges, or rights of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, which, individually or in the aggregate, would not materially adversely affect such Holder’s ability to consummate the transactions contemplated by this Agreement, or (c) require any consents, approvals and filings on the part of such Holder, from or with any governmental entity except for the consents, approvals and filings which, if not made or obtained by such Holder, would not materially adversely affect such Holder’s ability to consummate the transactions contemplated by this Agreement.

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ARTICLE IV

COVENANTS

Section 4.1 Public Announcements. The Company and the Holders shall consult with each other before issuing any press release or make any public statement with respect to this Agreement or the transactions contemplated hereby and shall not issue any such press release or make any such public statement with respect thereto without the prior consent of the other party, which consent shall not be unreasonably withheld, delayed or conditioned, except that the Company may, without the prior consent of any Holder, and any Holder may, without the prior consent of the Company, issue such a press release or make such a public statement as may be required by law; provided, that, to the extent time permits, such party shall have used commercially reasonable efforts to consult with the other party before issuing any such press release or making any such public statement.

Section 4.2 Further Assurances. At any time or from time to time after the date of this Agreement, the Company, on the one hand, and each Holder, on the other hand, agree to cooperate with each other and, at the request of any other party, to execute and deliver any further instruments or documents and to take all such further actions as such other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated by this Agreement and otherwise to carry out the intent of the parties hereunder.

ARTICLE V

HOLDER REPRESENTATIVE

The Holders hereby appoint Obsidian, LLC as the Holders’ exclusive agent to act on the Holders’ behalf with respect to the matters specified in this Article V. Such representative, or such other representative as the Holders may appoint from time to time to replace Obsidian, LLC, is hereinafter referred to as the “Holder Representative.” The Holder Representative shall take any and all actions which the Holder Representative believes are necessary or appropriate under this Agreement for and on behalf of the Holders as fully as if the Holders were acting on their own behalf, including, without limitation, making the deliveries referred to in Sections 1.2 and 1.5(a) and taking any and all other actions specified in or contemplated by this Agreement to be taken by the Holders prior to, on or after the Closing Date, approving amendments to or waivers under this Agreement, receiving notice of and defending any claims pursuant to this Agreement, giving notice of and asserting any claims pursuant to this Agreement, consenting to, compromising or settling claims made pursuant to this Agreement, and engaging counsel, accountants or other representatives in connection with the foregoing matters. The Company shall have the right to rely upon all actions taken or omitted to be taken by the Holder Representative pursuant to this Agreement, all of which actions or omissions shall be legally binding upon each of the Holders.

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ARTICLE VI

TERMINATION

Section 6.1 Termination. This Agreement may be terminated at any time before the Closing Date:

(a) by mutual written agreement of the Company and the Holder Representative; and

(b) by the Company or the Holder Representative, if the Closing Date does not occur on or before September 30, 2007.

Section 6.2 Effect of Termination. If this Agreement is terminated by either the Company or the Holders pursuant to Section 6.1, this Agreement shall forthwith become void, and there shall be no further obligations with respect to the Exchange Transaction on the part of the Company or the Holders or their respective stockholders, directors, officers, employees, agents or representatives, except for the provisions of Section 4.1 and Article VII, all of which shall survive any termination of this Agreement; provided, that nothing in this Section 6.2 shall relieve any party hereunder from liability for any willful breach of this Agreement.

ARTICLE VII

MISCELLANEOUS

Section 7.1 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not render invalid or unenforceable any other provision of this Agreement.

Section 7.2 Survival of Representations and Warranties. All representations and warranties set forth in this Agreement or in any writing delivered by any party in connection herewith shall survive the transactions contemplated by this Agreement to be consummated on the Closing Date (regardless of any investigation, inquiry, or examination made by any party or on its behalf or any knowledge of any party or the acceptance by any party of any certificate or opinion) for a period of one year following the Closing Date.

Section 7.3 Enforcement. The parties hereto agree that (a) irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific intent or were otherwise breached and (b) the parties shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which they may be entitled by law or equity.

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Section 7.4 Successors and Assigns. Except as otherwise expressly provided herein, (a) all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors, assigns, heirs and legal representatives of the parties hereto, whether so expressed or not, and (b) no party may assign or delegate all or any portion of its rights, obligations or liabilities under this Agreement without the prior written consent of each other party to this Agreement; provided, that any such consent required to be given by the Holders shall be effective if given by the Holder Representative. Without limiting the generality of the foregoing, this Agreement shall survive the death or disability of each Holder that is a natural person.

Section 7.5 Entire Agreement. This Agreement (including the Exhibit and Schedule hereto) constitute the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein.

Section 7.6 Notices. All notices, demands, requests, consents or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when delivered personally to the recipient, (b) when telecopied to the recipient (with hard copy sent to the recipient by reputable overnight courier service (charges prepaid) that same day) if telecopied before 5:00 p.m. New York City time on a business day, and otherwise on the next business day, (c) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid) or (d) on the first business day that is at least five days after the date of deposit thereof in the United States mails for delivery by certified mail. Such notices, demands, requests, consents and other communications shall be sent to the following persons at the following addresses:

(i) if to the Company, to:

ITC^DeltaCom, Inc.

7037 Old Madison Pike

Huntsville, Alabama 35806

Telecopy No.: (256) 382-3936

Attention:	J. Thomas Mullis, Esq.
	Senior Vice President–Legal and Regulatory

(ii) if to the Holders, to:

Obsidian, LLC

2951 28^th Street

Suite 1000

Santa Monica, CA 90405

Telecopy No.: (310) 566-1010

9

With a copy (which shall not constitute notice) to:

Milbank, Tweed, Hadley & McCloy LLP

30^th Floor

601 South Figueroa Street

Los Angeles, CA 90017

Telecopy No.: (213) 629-5063

Attention: Melainie K. Mansfield, Esq.

or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

Section 7.7 Amendments; Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the written consent thereto of the Company and the Holder Representative.

Section 7.8 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same Agreement.

Section 7.9 Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement.

Section 7.10 Governing Law. This Agreement shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of New York applicable to contracts executed and to be performed wholly within such state.

Section 7.11 Exclusive Jurisdiction; Venue. Any process against the Company or a Holder in, or in connection with, any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, may be served personally or by certified mail pursuant to the notice provision set forth in Section 7.6 with the same effect as though served on it personally. Each of the parties hereto hereby irrevocably submits in any suit, action or proceeding by the parties hereto arising out of or relating to this Agreement or any of the transactions contemplated hereby to the exclusive jurisdiction and venue of the federal and state courts of the State of New York and irrevocably waives any and all objections to exclusive jurisdiction and review of venue that any such party may have under the laws of the State of New York or the United States. Without limiting the other remedies, this Agreement shall be enforceable by specific performance.

Section 7.12 Waiver of Jury Trial. The Company and the Holders hereby waive any right they may have to a trial by jury in respect of any action, proceeding or litigation directly or indirectly arising out of, under or in connection with this Agreement.

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Section 7.13 Delivery by Facsimile. This Agreement and each other agreement or instrument entered into in connection herewith or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall reexecute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation or enforceability of a contract, and each such party forever waives any such defense.

[Remainder of page intentionally left blank]

11

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first above written.

THE COMPANY:
	ITC^DELTACOM, INC.
	By:	J. Thomas Mullis
	Name:	J. Thomas Mullis
	Title:	Senior Vice President -Legal and Regulatory

12

THE WARRANT HOLDERS:
	Special Value Absolute Return Fund LLC
	By:	Tennenbaum Capital Partners, LLC
	Its:	Investment Manager
	By:	/s/ Howard M. Levkowitz
	Name:	Howard M. Levkowitz
	Title:	Managing Partner
	Special Value Bond Fund II LLC
	By:	Tennenbaum Capital Partners, LLC
	Its:	Investment Manager
	By:	/s/ Howard M. Levkowitz
	Name:	Howard M. Levkowitz
	Title:	Managing Partner

13

Avenue Special Situations Fund III LP
By:	/s/ Senia Gandra
Name:	Senia Gandra
Title:	Member

14

SPCP Group LLC
By:	/s/ Richard Petrilli
Name:	Richard Petrilli
Title:	Authorized Signatory

15

Massachusetts Mutual Life Insurance Company
By:	Babson Capital Management LLC as Investment Manager
By:	/s/ Richard E. Spencer, II
Name:	Richard E. Spencer, II
Title:	Managing Director

16

MassMutual Corporate Investors
By:	/s/ Richard E. Spencer, II
Name:	Richard E. Spencer, II
Title:	Vice President
The foregoing is executed on behalf of MassMutual Corporate Investors, organized under a Declaration of Trust, dated September 13, 1985, as amended from time to time. The obligations of such Trust are not binding upon, nor shall resort be had to the property of, any of the Trustees, shareholders, officers, employees or agents of such Trust individually, but the Trust’s assets and property only shall be bound.

17

Tower Square Capital Partners LP
By:	Babson Capital Management LLC as Investment Manager
By:	/s/ Richard E. Spencer, II
Name:	Richard E. Spencer, II
Title:	Managing Director

18

MassMutual Participation Investors
By:	/s/ Richard E. Spencer, II
Name:	Richard E. Spencer, II
Title:	Vice President
The foregoing is executed on behalf of MassMutual Participation Investors, organized under a Declaration of Trust, dated April 7, 1988, as amended from time to time. The obligations of such Trust are not binding upon, nor shall resort be had to the property of, any of the Trustees, shareholders, officers, employees or agents of such Trust individually, but the Trust’s assets and property only shall be bound.

19

Winterset Master Fund LP
By:	Babson Capital Management LLC as Investment Manager
By:	/s/ Richard E. Spencer, II
Name:	Richard E. Spencer, II
Title:	Managing Director

20

J/Z CBO Delaware LLC
By:	Babson Capital Management LLC as Collateral Manager
By:	/s/ Richard E. Spencer, II
Name:	Richard E. Spencer, II
Title:	Managing Director

21

Mill River Master Fund LP
By:	Babson Capital Management LLC as Investment Manager
By:	/s/ Richard E. Spencer, II
Name:	Richard E. Spencer, II
Title:	Managing Director

22

EX-10.12

Exhibit 10.12

STOCK PURCHASE AGREEMENT

Dated as of July 31, 2007

By and Among

ITC^DELTACOM, INC.

and

THE INDIVIDUALS AND INVESTMENT FUNDS AFFILIATED WITH WELSH, CARSON,

ANDERSON & STOWE VIII, L.P. LISTED ON THE SIGNATURE PAGES HERETO

TABLE OF CONTENTS

ARTICLE I
Purchase and Sale of Securities; Closing
SECTION 1.01. Purchase and Sale of Securities	1
SECTION 1.02. Closing	2
SECTION 1.03. Deliveries	2
ARTICLE II
Representations and Warranties of the Company
SECTION 2.01. Organization, Standing, etc.	2
SECTION 2.02. Capital Stock	3
SECTION 2.03. Issuance of Securities	5
SECTION 2.04. Authorization; Enforcement	6
SECTION 2.05. Recapitalization	6
SECTION 2.06. Absence of Changes	7
SECTION 2.07. Compliance with Laws	7
SECTION 2.08. No Conflicts; Consents	8
SECTION 2.09. No Violation	9
SECTION 2.10. Legal and Governmental Proceedings	10
SECTION 2.11. Investment Company	10
SECTION 2.12. Full Disclosure	10
SECTION 2.13. Financial Statements; Books and Records	11
SECTION 2.14. Taxes	12
SECTION 2.15. Title to Properties	12
SECTION 2.16. Intellectual Property	13
SECTION 2.17. Environmental Matters	14
SECTION 2.18. Transactions with Affiliates	14
SECTION 2.19. No Shareholder Vote Required	14
SECTION 2.20. Securities Act	15
SECTION 2.21. General Solicitation	15
SECTION 2.22. Integration	15
SECTION 2.23. Solvency	15
SECTION 2.24. No Brokers	16
SECTION 2.25. Insurance	16
ARTICLE III
Representations and Warranties of the WCAS Investors
SECTION 3.01. Organization; Authorization; Enforcement	16
SECTION 3.02. Compliance with Securities Act	17

i

SECTION 3.03. Accredited Investor Status	17
SECTION 3.04. Reliance on Exemptions	17
SECTION 3.05. Legends	18
SECTION 3.06. Brokers	18
SECTION 3.07. Own Account	18
SECTION 3.08. Experience of WCAS Investors	19
SECTION 3.09. Availability of Funds	19
ARTICLE IV
Covenants
SECTION 4.01. Reporting Status	20
SECTION 4.02. Use of Proceeds	20
SECTION 4.03. No Integration	20
SECTION 4.04. Compliance with Laws	20
SECTION 4.05. Publicity	20
SECTION 4.06. Fees and Expenses	20
ARTICLE V
Indemnification
SECTION 5.01. Indemnification Provisions	21
SECTION 5.02. Notification	22
SECTION 5.03. Settlements	23
SECTION 5.04. Definitions	23
ARTICLE VI
Miscellaneous
SECTION 6.01. Surviving Provisions	24
SECTION 6.02. Transfer Taxes	24
SECTION 6.03. Entire Agreement	24
SECTION 6.04. Amendment and Waiver	24
SECTION 6.05. Extension; Waiver	24
SECTION 6.06. Notices	25
SECTION 6.07. Assignment	26
SECTION 6.08. Exhibits and Annexes; Interpretation	26
SECTION 6.09. GOVERNING LAW	26
SECTION 6.10. WAIVER OF JURY TRIAL	26
SECTION 6.11. Consent to Jurisdiction	26
SECTION 6.12. Counterparts	27
SECTION 6.13. Further Assurances	27
SECTION 6.14. No Third Party Beneficiaries	27

ii

Exhibits

Exhibit A	Recapitalization Description
Exhibit B	List of Commitment to Purchase Common Stock by WCAS Investors

iii

INDEX OF DEFINED TERMS

Term	Section
Aggregate Purchase Price	SECTION 1.01.
Agreement	Recitals
Certificate of Designation	SECTION 2.08. (b)
Closing Date	SECTION 1.02.
Common Stock	Recitals
Company	Recitals
Environmental Laws	SECTION 2.17.
Exchange Act	SECTION 2.08. (b)
GAAP	SECTION 2.13. (a)
Governmental Entity	SECTION 2.08. (b)
Indemnified Person	SECTION 5.01.
Indemnifying Party	SECTION 5.01.
Intellectual Property	SECTION 2.16.
Losses	SECTION 5.01.
Material Adverse Effect	SECTION 2.01.
Per Share Purchase Price	SECTION 1.01.
Permits	SECTION 2.07. (b)
Preferred Stock Amendments	SECTION 2.08. (b)
Proceedings	SECTION 5.01.
Recapitalization	Recitals
Recapitalization Documents	SECTION 2.05.
SEC	SECTION 2.08. (b)
SEC Filings	SECTION 2.12.
Securities	Recitals
Securities Act	SECTION 2.08. (b)
Series A Preferred Stock	SECTION 2.02. (a)
Series A Warrants	SECTION 2.02. (a)
Series B Preferred Stock	SECTION 2.02. (a)
Series C Preferred Stock	SECTION 2.02. (a)
Series H Preferred Stock	SECTION 2.02. (c)
Share Purchase Number	Recitals
Stock Incentive Plans	SECTION 2.02. (a)
Tax	SECTION 2.14. (b)
Tax Return	SECTION 2.14. (b)
WCAS Investor	Recitals
WCAS Investors	Recitals
WCAS Registration Rights Agreement	SECTION 2.02. (c)

iv

STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of July 31, 2007, by and among the individuals and the investment funds listed on the signature pages hereto under the heading “WCAS Investors” (each a “WCAS Investor” and together the “WCAS Investors”) and ITC^DELTACOM, INC., a Delaware corporation (the “Company”).

WHEREAS, the Company intends to consummate a recapitalization of its capital structure as described in Exhibit A annexed hereto (the “Recapitalization”); and

WHEREAS, concurrently with the Recapitalization, the Company desires to issue and sell to the WCAS Investors 6,937,724 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock” or the “Securities”), and each WCAS Investor desires to purchase from the Company the number of shares of Common Stock set forth in Exhibit B hereto (the “Share Purchase Number” with respect to such WCAS Investor); and

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

ARTICLE I

Purchase and Sale of Securities; Closing

SECTION 1.01. Purchase and Sale of Securities. Subject to the terms and conditions set forth herein, on the Closing Date, the Company shall issue and sell to each WCAS Investor, and each WCAS Investor shall purchase from the Company, the number of shares of Common Stock equal to such WCAS Investor’s applicable Share Purchase Number at a purchase price per share, to be paid by wire transfer or immediately available funds to the Company, equal to $3.03 (the “Per Share Purchase Price” with respect to such WCAS Investor; and the aggregate amount payable in respect of all Securities to be purchased by such WCAS Investor hereunder, the “Aggregate Purchase Price” with respect to such WCAS Investor).

SECTION 1.02. Closing. The sale of the Securities by the Company to each WCAS Investor and the purchase of the Securities by each WCAS Investor from the Company (such sale and purchase collectively, the “Closing”) will take place at 10:00 a.m., New York City time, on July 31, 2007, or such other date as the Company closes the Recapitalization (the “Closing Date”), at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036.

SECTION 1.03. Deliveries. At the Closing, the Company shall deliver to each WCAS Investor a certificate of an officer of the Company, on behalf of the Company, confirming the representations and warranties of the Company set forth in Article II. Promptly after Closing, the Company shall deliver to each WCAS Investor stock certificates, each registered in the name of such WCAS Investor, representing the Securities purchased by such WCAS Investor hereunder. Delivery of such certificate and such other documents to the WCAS Investors shall be made against receipt by the Company from each WCAS Investor of the Aggregate Purchase Price.

ARTICLE II

Representations and Warranties of the Company

The Company represents and warrants to, and agrees with, each WCAS Investor that:

SECTION 2.01. Organization, Standing, etc. The Company and each of its subsidiaries is a corporation duly organized and validly existing and in good standing under the laws of the jurisdiction in which it is organized, with all requisite power and authority (corporate and other) to own, lease and operate its properties and to conduct its business as currently owned, leased, operated and conducted, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure to so register or qualify or to be in good standing, has not had, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets, liabilities, operations, condition (financial or otherwise), operating results or prospects of the Company and its subsidiaries, taken as a whole (a “Material Adverse Effect”).

2

SECTION 2.02. Capital Stock. (a) As of June 30, 2007, before giving effect to the Recapitalization and the Closing, the authorized capital stock of the Company consists of 350,000,000 shares of Common Stock and 50,000,000 shares of preferred stock, of which (i) 18,770,942 shares of Common Stock (excluding treasury shares) are issued and outstanding, (ii) no shares of Common Stock are held by the Company as treasury shares, (iii) approximately 340,000, 1,000,000, 6,700,000 and 5,600,000 shares of Common Stock are reserved for future issuance pursuant to the Company’s common stock purchase warrants originally issued on October 29, 2002 (the “Series A Warrants”), common stock purchase warrants originally issued on October 6, 2003, common stock purchase warrants originally issued on March 29, 2005 and warrants originally issued on July 26, 2005, respectively, (iv) options to acquire 620,140 shares of Common Stock pursuant to the Company’s Amended and Reinstated Stock Incentive Plan and Executive Stock Incentive Plan (together, the “Stock Incentive Plans”) are issued and outstanding, (v) restricted stock units for 3,215,601 shares of Common Stock, stock units for approximately 14,016 shares of the Company’s 8% Series A Convertible Redeemable Preferred Stock, par value $0.01 per share, (the “Series A Preferred Stock”), and stock units for approximately 42,138 shares of the Company’s 8% Series B Convertible Redeemable Preferred Stock, par value $0.01 per share, (the “Series B Preferred Stock”) are issued and outstanding pursuant to the Stock Incentive Plans, (vi) 670,453 shares of Common Stock are reserved and available for issuance pursuant to future awards under the Stock Incentive Plans and (vii) 201,883 shares of the Series A Preferred Stock, 607,087 shares of the Series B Preferred Stock and 0 shares of the 8% Series C Convertible Redeemable Preferred Stock, par value $0.01 per share, (the “Series C Preferred Stock”) are issued and outstanding.

(b) All of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable. There are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Securities.

3

(c) As of the Closing Date, after giving effect to the Recapitalization (but not the Rights Offering (as defined in Exhibit A)) and the Closing, the authorized capital stock of the Company will consist of 350,000,000 shares of Common Stock and 50,000,000 shares of preferred stock, of which not more than (i) 68,000,000 shares of Common Stock (excluding treasury shares) will be issued and outstanding, (ii) no shares of Common Stock will be held by the Company as treasury shares, (iii) 412,215 shares of 6% Series H Convertible Redeemable Preferred Stock, par value $0.01 per share (the “Series H Preferred Stock”), will be issued and outstanding, and (iv) assuming no exercise thereof has taken place (a) options to acquire 620,140 shares of Common Stock pursuant to the Stock Incentive Plans will be issued and outstanding, (b) restricted stock units for approximately 4,790,768 shares of Common Stock will be issued and outstanding pursuant to the Stock Incentive Plans, (c) 670,453 shares of Common Stock will be reserved and available for issuance pursuant to future awards under the Stock Incentive Plans, and (d) approximately 340,000 shares of Common Stock will be reserved for future issuance pursuant to the Series A Warrants. Except for the Rights Offering and except as set forth in the immediately preceding sentence, immediately following the Recapitalization and the Closing, 13,604,455 shares of Common Stock will be reserved for issuance pursuant to the exercise of rights in the Rights Offering and for the mandatory conversion of the Series H Preferred Stock, and (x) there will be no outstanding securities, options, “phantom” stock rights, stock appreciation rights, stock-based performance units, warrants, calls, rights, contracts, commitments, agreements, instruments, arrangements, understandings, obligations or undertakings of any kind to which the Company or any of its subsidiaries is bound, (A) obligating the Company or any of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock or other voting securities of, or securities convertible into, or exchangeable or exercisable for, shares of capital stock or other voting securities of, the Company or any of its subsidiaries or that give any person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights occurring to holders of shares of capital stock or other voting securities of the Company or any of its subsidiaries or (B) other than in connection with the Company’s Stock Incentive Plans, obligating the Company or any of its subsidiaries to issue, grant, extend

4

or enter into any security, option, “phantom” stock rights, stock appreciation right, stock-based performance unit, warrant, call, right, contract, commitment, agreement, instrument, arrangement, understanding, obligation or undertaking, (y) there will be no outstanding contractual obligations of the Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of the Company or its subsidiaries or any option or other equity-based award and (z) there will be no agreements or arrangements under which the Company or any of its subsidiaries will be obligated to register the sale of any of its or their securities under the Securities Act, except (1) the registration statement on Form S-1 relating to the Rights Offering and the sale of shares of Common Stock pursuant to the exercise of the rights thereunder, (2) the Registration Rights Agreement, dated as of October 6, 2003, as amended, among the Company and WCAS Securityholders listed on the signature pages thereof (the “WCAS Registration Rights Agreement”) and (3) the Registration Rights Agreement, dated as of July 26, 2005, as may be amended from time to time, among the Company and the TCP Securityholders listed on the signature pages thereof.

(d) Except as disclosed in the SEC Filings, all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all pledges, claims, liens, charges, encumbrances, mortgages and security interests of any kind or nature whatsoever, other than any of the foregoing resulting solely from the Recapitalization.

SECTION 2.03. Issuance of Securities. The Securities, upon payment therefor pursuant to and as contemplated by this Agreement, will be validly issued, fully paid and non-assessable, free and clear of all pledges, claims, liens, charges, encumbrances, mortgages and security interests of any kind or nature whatsoever, other than any of the foregoing resulting solely from action by the holders of the Securities. The Securities will not be issued in violation of any statutory or contractual preemptive or other rights of any stockholder of the Company. The Securities issued to the WCAS Investors constitute “Registrable Securities” under the WCAS Registration Rights Agreement.

5

SECTION 2.04. Authorization; Enforcement. The Company has all requisite corporate power and authority to enter into, execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company, and, assuming due authorization, execution and delivery thereof by the other parties thereto, constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

SECTION 2.05. Recapitalization. The Company has, subject to the authorization of the Certificate of Designation for the Series H Preferred Stock and the effectiveness of the Preferred Stock Amendments, all requisite corporate power and authority to consummate the Recapitalization, and to enter into, execute, deliver and perform its obligations under the Recapitalization Documents and to consummate the transactions contemplated thereby. Each of the Recapitalization Documents has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery thereof by the other parties thereto, will constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). The Recapitalization will occur concurrently with the Closing and the purchase by the WCAS Investors of the Securities hereunder.

For purposes of this Agreement, the term “Recapitalization Documents” means all agreements and instruments to be executed by the Company in order to effect the Recapitalization and related transactions.

6

SECTION 2.06. Absence of Changes. Except as disclosed in the SEC Filings and except as contemplated by this Agreement and the Recapitalization Documents, since December 31, 2006, the Company and its subsidiaries have conducted their respective businesses only in the ordinary course consistent with past practice, and there has not been any event that has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

SECTION 2.07. Compliance with Laws. Except as expressly disclosed in the SEC Filings:

(a) the Company and each of its subsidiaries are in compliance with all statutes, orders, rules and regulations of any court or governmental agency or body having jurisdiction over the Company or such subsidiary in all respects, except to the extent that the failure to so comply has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(b) (i) the Company and each of its subsidiaries have all licenses, permits, orders or approvals of any Governmental Entity (collectively, “Permits”) that are material to or necessary for the conduct of the business of the Company in the manner described in the SEC Filings, except to the extent that the failure to have such Permits has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (ii) such Permits are in full force and effect and (iii) no violations exist with respect to any Permit, except to the extent that any such violation has not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and

(c) neither the Company nor any of its subsidiaries is a party to any written agreement, consent decree or memorandum of understanding with, or a party to any commitment letter or similar undertaking to, or is subject to any cease-and-desist or other order or directive by, or has adopted any policies, procedures or board resolutions at the request of, any Governmental Entity which restricts materially the conduct of the business of the Company and its subsidiaries, taken as a whole, nor has the Company or any subsidiary been advised in writing by any Governmental Entity that it is contemplating any such undertakings.

7

SECTION 2.08. No Conflicts; Consents. (a) None of the execution, delivery and performance of this Agreement by the Company, including the compliance by the Company with all of the provisions hereof and thereof and the consummation of the transactions contemplated hereby and thereby, will conflict with or result in a breach or violation of any of the terms or provisions of, or (with the giving of notice or the lapse of time or both) constitute a default under, (i) any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) the provisions of the charter, by-laws or other organizational documents of the Company or any of its subsidiaries or (iii) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets, except for, in the case of clauses (i) and (iii), such conflicts, breaches, violations or defaults that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Recapitalization Documents shall be effective prior to the issuance and sale of the Shares.

(b) The Company is not required to obtain any consent, approval, authorization or order of, or make any filing or registration with, any governmental entity, including any Federal, state or local government or any court, administrative agency or commission or other governmental or regulatory authority or agency (each, a “Governmental Entity”), in connection with the execution, delivery and performance of this Agreement and the Recapitalization Documents by the Company, including the compliance by the Company with all of the provisions hereof and thereof and the consummation of the transactions contemplated hereby and thereby, except for (i) the registration under the Securities Act of 1933, as amended (the “Securities Act”), of the issuance of the Rights (as defined on Exhibit A hereto) and shares pursuant to the exercise of Rights, (ii) the filing with the Securities and Exchange Commission (the

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“SEC”) of such reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as may be required in connection with this Agreement and the Recapitalization and the transactions contemplated hereby and thereby, (iii) any filings required under applicable state securities rules and regulation, (iv) the filing of one or more notices on Form D under the Securities Act, (v) consents, approvals, authorizations, registrations, declarations and filings of or with state public service or public utility commissions or other similar state Governmental Entities with jurisdiction to regulate the business operations of the Company and its subsidiaries, (vi) the filing of amendments to the certificates of designation of the Series A Preferred Stock and the Series B Preferred Stock as needed to implement the transactions contemplated by this Agreement (the “Preferred Stock Amendments”), the filing of a certificate of elimination with respect to the Series C Preferred Stock, and the authorization and filing of the Certificate of Designation of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights of 6% Series H Convertible Redeemable Preferred Stock and Qualifications, Limitations and Restrictions Thereof with the Secretary of State of the State of Delaware (the “Certificate of Designation”), (vii) the filing of such documents as may be necessary to record or perfect or to terminate security interests or mortgages in personal or real property in connection with the incurrence and repayment by the Company and its subsidiaries of indebtedness in connection with the Recapitalization, and (viii) such other consents, approvals, orders, authorizations, registrations, declarations and filings, the failure of which to be obtained or made, individually or in the aggregate, would not reasonably be expected to (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company to perform its obligations under this Agreement and the Recapitalization Documents or (C) prevent or materially impede, interfere with, hinder or delay the consummation of the transactions contemplated by this Agreement.

SECTION 2.09. No Violation. Neither the Company nor any of its subsidiaries (i) is in violation of its charter, by-laws or other organizational documents, (ii) is in default in any respect, and no event has occurred which (with the giving of notice or the lapse of time or both) would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement

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or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject or (iii) is in violation in any respect of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject, except for, in the case of clauses (ii) and (iii), such defaults or violations as have not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

SECTION 2.10. Legal and Governmental Proceedings. Except as otherwise disclosed in the SEC Filings or as previously disclosed to the WCAS Investors in writing, there are no suits, actions, investigations or proceedings (whether judicial, arbitral, administrative or other) pending or, to the knowledge of the Company, threatened, against or affecting the Company or any of its subsidiaries that, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect, nor are there any judgments, decrees, injunctions, rules or orders of any Governmental Entity outstanding against the Company or any of its subsidiaries that have had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

SECTION 2.11. Investment Company. The Company is not and, after giving effect to the offering and sale of the Securities, will not be, an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.

SECTION 2.12. Full Disclosure. Since January 1, 2006, the Company has filed all reports, schedules, forms, statements and other documents (including exhibits and other information incorporated therein) required to be filed by the Company with the SEC pursuant to the Exchange Act (the “SEC Filings”). As of their respective dates, each of the SEC Filings complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Filings, and none of the SEC Filings at the time it was filed contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except to the extent corrected by a subsequently filed SEC Filing.

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SECTION 2.13. Financial Statements; Books and Records. (a) The audited financial statements and unaudited interim financial statements of the Company included or incorporated by reference in SEC Filings have been prepared in accordance with generally accepted accounting principles of the United States (“GAAP”) (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted by Form 10-Q), complied as of their respective dates in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, and fairly present, in all material respects, the financial position of the Company as of the dates thereof and the results of operations for the periods then ended (subject, in the case of any unaudited interim financial statements, to the absence of footnotes required by GAAP and normal year-end adjustments).

(b) The Company has no liabilities of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, other than (i) liabilities to the extent disclosed or provided for in the most recent financial statements of the Company or set forth in the notes thereto, (ii) liabilities disclosed in the SEC Filings, (iii) liabilities under this Agreement and the Recapitalization Documents, or (iv) liabilities incurred in the ordinary course of business since the date of the most recent financial statements disclosed in the SEC Filings that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) The Company has complied, in all material respects, with the provisions of the Sarbanes-Oxley Act of 2002 applicable to it. The Company (i) makes and keeps accurate books and records and (ii) maintains a system of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific authorization; and (D) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has disclosure controls and procedures (as defined in Rules

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13a-14 and 15d-14 under the Exchange Act) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive officer or officers and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure. There is no transaction, arrangement, or other relationship between the Company and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its Exchange Act filings and is not so disclosed.

SECTION 2.14. Taxes. (a) Except where the failure to file or pay or the existence of outstanding agreements, waivers, disputes, claims, audits or examinations could not reasonably be expected to have a Material Adverse Effect, the Company has filed or caused to be filed all Federal Tax Returns, and all material state, local and foreign tax returns or materials required to have been filed by it and has paid or caused to be paid all Taxes due and payable by it and all assessments received by it, except taxes that are being contested in good faith by appropriate proceedings and for which the Company shall have set aside on its books adequate reserves in accordance with GAAP.

(b) For purposes of this Agreement, “Tax” shall mean all forms of taxation or duties imposed, or required to be collected or withheld, including charges, together with any related interest, penalties or other additional amounts, and “Tax Return” shall mean any return, filing, report, questionnaire, information statement or other document required to be filed, including any amendments that may be filed, for any taxable period with any taxing authority (whether or not a payment is required to be made with respect to such filing).

SECTION 2.15. Title to Properties. Except as described in the SEC Filings filed with the SEC prior to the date of this Agreement, the Company has sufficient title to all material properties (real and personal) owned by the Company that are necessary for the conduct of the business of the Company as described in the SEC Filings filed with the SEC prior to the date of this Agreement and as currently conducted, except (i) for minor defects in title that do not

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interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes, (ii) for assets disposed of as otherwise permitted under the Recapitalization Documents, or (iii) as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. All such material properties are free and clear of any encumbrance, other than any encumbrance permitted under the Recapitalization Documents. All material properties held under lease by the Company are held under valid, subsisting and enforceable leases. The Company enjoys peaceful and undisturbed possession under all such material leases, except in each case as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

SECTION 2.16. Intellectual Property. The Company owns or possesses sufficient rights to use all material trademarks, copyrights, licenses, inventions, trade names and know-how (including trade secrets and other unpatented and/or unpatentable property or confidential information, systems, processes or procedures) (collectively, “Intellectual Property”) necessary for its business as presently conducted without any material conflict or material infringement of the intellectual property rights of others. To the knowledge of the Company, the Company has not materially infringed upon or otherwise materially violated the intellectual property rights of any third party. The Company has not received and there is not currently pending any claim, charge, demand, notice or other communication alleging that the Company has violated or, by conducting its business as proposed, would violate any intellectual property rights of any other person or entity, other than claims, charges, demands, notices or other communications that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. All of the Company’s Intellectual Property is owned or licensed by the Company, free and clear of all encumbrances and (to the extent owned) is held in the Company’s name. The execution or delivery of this Agreement, or the carrying on of the Company’s business by the employees of the Company, will not conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument related to the Intellectual Property, except for any such conflict, breach or default that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company has taken all actions reasonably necessary and desirable to maintain and protect each material item of Intellectual Property owned by the Company.

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SECTION 2.17. Environmental Matters. Except as otherwise disclosed in the SEC Filings, the Company and its subsidiaries (i) are and have been in compliance in all material respects with all applicable Federal, state and local laws, common law, regulations and codes, as well as orders, decrees, judgments or injunctions issued, promulgated, approved or entered thereunder relating to pollution, protection of the environment or public health (collectively, “Environmental Laws”), and no material expenditures are or, to the knowledge of the Company, will be required in order to comply with any applicable Environmental Laws, (ii) have received and are in material compliance with all permits, licenses, certificates or other authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) have not received written notice of any actual or potential liability under or relating to any Environmental Laws, including for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminant. There is no civil, criminal or administrative judgment, action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter pending or to the knowledge of the Company, threatened against the Company pursuant to Environmental Laws which would reasonably be expected to result in a material fine, penalty, cost or expense. To the knowledge of the Company, there are no past, present or, reasonably anticipated events, conditions, circumstances, activities, practices, incidents, agreements, actions or plans that would reasonably be expected to give rise to any material cost or material liability to the Company under Environmental Laws that would reasonably be expected to result in a Material Adverse Effect.

SECTION 2.18. Transactions with Affiliates. Except as disclosed in the SEC Filings, there are no material agreements, material contracts or other material arrangements between the Company or any of its subsidiaries, on the one hand, and (i) any affiliate of the Company or any of its subsidiaries or (ii) any current or former director, officer, employee or consultant of the Company or any of its subsidiaries or of any affiliate of the Company or any of its subsidiaries, on the other hand, that are required to be disclosed under Item 404 of Regulation S-K of the SEC.

SECTION 2.19. No Shareholder Vote Required. No vote by any holders of any class or series of capital stock of the Company or any of its subsidiaries is necessary to approve the execution, delivery and performance of this Agreement and the Recapitalization Documents by the Company and the consummation of the transactions contemplated hereby and thereby, except for the approval of the Preferred Stock Amendments by the holders of the Series A Preferred Stock and the Series B Preferred Stock.

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SECTION 2.20. Securities Act. Subject to the accuracy of the representations and warranties of the WCAS Investors contained herein, it is not necessary in connection with the offer, sale and delivery of the Securities in the manner contemplated by this Agreement to register the Securities under the Securities Act.

SECTION 2.21. General Solicitation. Within the preceding six months, other than pursuant to an effective registration statement on Form S-8 with respect to the Company’s Amended and Restated Stock Incentive Plan, neither the Company, any affiliate of the Company nor any person acting on its or their behalf has sold any shares of Common Stock by means of any general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or offered or sold any shares of Common Stock outside the United States to non-U.S. persons (as defined in Rule 902 under the Securities Act).

SECTION 2.22. Integration. Within the preceding six months, neither the Company nor any other person acting on behalf of the Company has sold to any person any shares of Common Stock or any securities of the same or a similar class as the Common Stock, other than Securities offered or sold to the WCAS Investors hereunder or pursuant to the Recapitalization and other than pursuant to an effective registration statement on Form S-8 with respect to the Company’s Amended and Restated Stock Incentive Plan. The Company will take reasonable precautions designed to ensure that any offer or sale, direct or indirect, of any shares of Common Stock or any substantially similar security issued by the Company, within six months subsequent to the Closing Date, is made under restrictions and other circumstances reasonably designed not to affect the status of the offer and sale of the Securities contemplated by this Agreement as transactions exempt from the registration provisions of the Securities Act.

SECTION 2.23. Solvency. The Company (both before and immediately after giving effect to the Closing) is solvent (i.e., its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably

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conclude that the Company would not have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and does not anticipate or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.

SECTION 2.24. No Brokers. No broker, finder, commission agent or other person is entitled to be paid by any the Company any broker’s fee or commission in connection with the sale of the Securities and the transactions contemplated by this Agreement other than Miller Buckfire & Co., LLC.

SECTION 2.25. Insurance. The Company and each of its subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as is customary for companies engaged in similar businesses in similar industries.

ARTICLE III

Representations and Warranties of the WCAS Investors

Each WCAS Investor, severally and not jointly, hereby represents and warrants to, and agrees with the Company that:

SECTION 3.01. Organization; Authorization; Enforcement. To the extent it is an entity, such WCAS Investor is an entity validly existing and in good standing under the laws of its jurisdiction of formation and has the requisite power and authority to carry on its business as it is now being conducted. This Agreement has been duly and validly authorized, executed and delivered by such WCAS Investor, and, assuming the due authorization, execution and delivery thereof by the Company, constitutes a valid and binding agreement of such WCAS Investor, enforceable against such WCAS Investor in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).

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SECTION 3.02. Compliance with Securities Act. Such WCAS Investor understands and acknowledges that the offering, issuance, sale and delivery of the Securities as contemplated by this Agreement are exempt from the registration requirements of the Securities Act and that the Securities purchased by such WCAS Investor will be “restricted securities” as defined in Rule 144(a)(3) under the Securities Act. So long as the Securities purchased are restricted securities, such WCAS Investor will offer and sell the Securities in any subsequent disposition only (i) pursuant to an effective registration statement under the Securities Act or (ii) under a valid exemption from the registration requirements of the Securities Act; provided, however, that by making the representations herein, such WCAS Investor does not agree to hold any Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.

SECTION 3.03. Accredited Investor Status. Such WCAS Investor is an “accredited investor” under Rule 501(a) under the Securities Act. Such WCAS Investor understands and acknowledges that the Company is relying on such WCAS Investor’s status as an “accredited investor” in order for the offer and sale of the Securities to be exempt from the registration requirements of the Securities Act.

SECTION 3.04. Reliance on Exemptions. Such WCAS Investor understands and acknowledges that the Securities are being offered and sold to the WCAS Investors in reliance upon specific exemptions from the registration requirements of Federal and state securities laws and that the Company is relying upon the truth and accuracy of, and such WCAS Investor’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such WCAS Investor set forth in this Article III in order to determine the availability of such exemptions and the eligibility of such WCAS Investor to acquire the Securities.

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SECTION 3.05. Legends. Such WCAS Investor understands and acknowledges that, subject to the immediately following paragraph, the Securities shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAW, (B) AN OPINION OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR (C) RULE 144 UNDER THE SECURITIES ACT.

The conditions to any offer, sale, pledge or other transfer of the Securities as set forth in the legend above are incorporated in, and form a part of, this Agreement. The legend set forth above shall be removed and the Company shall issue a certificate representing any Security without such legend to the holder of such Security upon which it is stamped, if, unless otherwise required by state securities laws, (i) such Security is sold pursuant to an effective registration statement under the Securities Act, (ii) such holder shall have delivered to the Company evidence reasonably satisfactory to the Company indicating that such Security may be sold or transferred pursuant to an exemption from registration under the Securities Act or (iii) such holder provides the Company with reasonable assurances that such Security and all other Securities then held by such holder may be sold pursuant to Rule 144(k) under the Securities Act or pursuant to Rule 144 under the Securities Act within any three-month period.

SECTION 3.06. Brokers. Such WCAS Investor has dealt with no broker, finder, commission agent or other person in connection with the purchase of the Securities and the transactions contemplated by this Agreement, and such WCAS Investor is under no obligation to pay any broker’s fee or commission in connection with such transactions.

SECTION 3.07. Own Account. Such WCAS Investor is acquiring the Securities as principal for its own account and, where applicable, is acquiring the Securities in the ordinary course of its business. Such WCAS Investor is not purchasing the Securities with a view toward, or for resale in connection with, any distribution (as that term is used in the Securities Act and the rules and regulations thereunder) of all or any portion thereof in violation of the Securities Act or any applicable state securities laws.

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SECTION 3.08. Experience of WCAS Investors. (a) Such WCAS Investor has had access to the SEC Filings, has undertaken its own due diligence with respect to the Company and the Common Stock and has (i) made such investigation with respect thereto as it has deemed necessary to make its investment decision and (ii) made its own assessment and has satisfied itself concerning the relevant tax, legal and other economic considerations relevant to its investment in the Securities. Such WCAS Investor, either alone or together with its representatives and advisors, has the knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the investment in the Securities, has so evaluated the merits and risks of such investment and is able to bear the economic risk of such investment.

(b) Except for the representations in Article II of this Agreement, such WCAS Investor has not relied on the Company or any of its affiliates or any person acting on its behalf in connection with its analysis or decision to purchase the Securities. Such WCAS Investor understands, acknowledges and agrees that none of the Company or any of its respective affiliates, directors, officers, employees, agents, advisors, attorneys or representatives has made any representation or warranty, either express or implied, with respect to the Company or the Securities, or the accuracy or completeness of any of the information furnished by or on behalf of any of them to such WCAS Investor in connection with its acquisition of the Securities.

SECTION 3.09. Availability of Funds. Such WCAS Investor has adequate committed funds to satisfy at Closing all of its obligations hereunder.

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ARTICLE IV

Covenants

SECTION 4.01. Reporting Status. The Company’s Common Stock is registered under Section 12(g) of the Exchange Act. The Company shall use commercially reasonable efforts to timely file with the SEC all reports and other information under the Exchange Act so long as it is an issuer required to file reports and such information under the Exchange Act.

SECTION 4.02. Use of Proceeds. The Company shall use the proceeds from the sale of the Securities solely to consummate the Recapitalization.

SECTION 4.03. No Integration. The Company has not made and shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the Securities Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of the federal securities law doctrine of “integration” or any shareholder approval provision applicable to the Company or its securities.

SECTION 4.04. Compliance with Laws. The Company shall maintain appropriate compliance policies and procedures designed to ensure that the Company and its subsidiaries comply with all applicable laws and regulations in all material respects.

SECTION 4.05. Publicity. Except as otherwise required by law (including the rules and regulations of the SEC), none of the parties hereto shall issue any press release or make any other public statement, in each case relating to, connected with or arising out of this Agreement or the WCAS Investors’ interest in the Company or the matters contained herein or therein, without obtaining the prior consent of each WCAS Investor and the Company, which consent shall not be unreasonably withheld. Except as otherwise required by law, no references to any WCAS Investor or any of its affiliates shall be made in any public statement without such WCAS Investors’ prior consent.

SECTION 4.06. Fees and Expenses. The Company shall reimburse the WCAS Investors, upon presentation of reasonably detailed invoices, for the reasonable and actual fees of their counsel, Davis Polk & Wardwell, incurred in connection with the negotiation, preparation, and execution of the Recapitalization Documents.

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ARTICLE V

Indemnification

SECTION 5.01. Indemnification Provisions. Whether or not the Rights Offering is consummated or this Agreement is terminated, the Company (in such capacity, the “Indemnifying Party”) shall indemnify and hold harmless the WCAS Investors, and their respective officers, directors, employees, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses, claims, damages, liabilities and reasonable expenses, joint or several, arising out of circumstances existing on or prior to the Rights Offering Closing Date (“Losses”) to which any such Indemnified Person may become subject arising out of or in connection with any claim, challenge, litigation, investigation or proceeding (“Proceedings”) instituted by a third party with respect to the Rights Offering, this Agreement, the Rights Offering Registration Statement, any Preliminary Rights Offering Prospectus, the Rights Offering Prospectus, any Issuer Free Writing Prospectus, the Investment Decision Package, any amendment or supplement thereto or the transactions contemplated by any of the foregoing and shall reimburse such Indemnified Persons for any reasonable legal or other reasonable out-of-pocket expenses incurred in connection with investigating, responding to or defending any of the foregoing; provided that the foregoing indemnification will not apply to Losses to the extent that they resulted from (a) any breach by such Indemnified Person of this Agreement, (b) gross negligence or willful misconduct on the part of such Indemnified Person or (c) statements or omissions in the Rights Offering Registration Statement, any Preliminary Rights Offering Prospectus, the Rights Offering Prospectus, any Issuer Free Writing Prospectus or any amendment or supplement thereto made in reliance upon or in conformity with information relating to such Indemnified Person furnished to the Company in writing by or on behalf of such Indemnified Person expressly for use in the Rights Offering Registration Statement, any Rights Offering Preliminary Prospectus, the Rights Offering Prospectus, any Issuer Free Writing Prospectus or any amendment or supplement thereto. If for any reason the foregoing indemnification is unavailable to any Indemnified Person (except as set forth in the

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proviso to the immediately preceding section) or insufficient to hold it harmless, then the Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Person as a result of such Losses in such proportion as is appropriate to reflect not only the relative benefits received by the Indemnifying Party on the one hand and such Indemnified Person on the other hand but also the relative fault of the Indemnifying Party on the one hand and such Indemnified Person on the other hand as well as any relevant equitable considerations. The indemnity, reimbursement and contribution obligations of the Indemnifying Party under this Section 5 shall be in addition to any liability that the Indemnifying Party may otherwise have to an Indemnified Person and shall bind and inure to the benefit of any successors, assigns, heirs and personal representatives of the Indemnifying Party and any Indemnified Person.

SECTION 5.02. Notification. Promptly after receipt by an Indemnified Person of notice of the commencement of any Proceedings with respect to which the Indemnified Person may be entitled to indemnification hereunder, such Indemnified Person will, if a claim is to be made hereunder against the Indemnifying Party in respect thereof, notify the Indemnifying Party in writing of the commencement thereof; provided that (i) the omission so to notify the Indemnifying Party will not relieve the Indemnifying Party from any liability that it may have hereunder except to the extent it has been prejudiced by such failure and (ii) the omission so to notify the Indemnifying Party will not relieve it from any liability that it may have to an Indemnified Person otherwise than on account of this Article V. In case any such Proceedings are brought against any Indemnified Person and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein, and, to the extent that it may elect by written notice delivered to such Indemnified Person, to assume the defense thereof, with counsel reasonably satisfactory to such Indemnified Person; provided that if the defendants in any such Proceedings include both such Indemnified Person and the Indemnifying Party and such Indemnified Person shall have concluded that there may be legal defenses available to it that are different from or additional to those available to the Indemnifying Party, such Indemnified Person shall have the right to select separate counsel, which selection shall be subject to the reasonable approval of the Indemnifying Party, to assert such legal defenses and to otherwise participate in the defense of such Proceedings on behalf of such Indemnified Person. Upon receipt of notice from the Indemnifying Party to such Indemnified Person of its election so to assume the defense of such Proceedings and approval by

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such Indemnified Person of counsel, the Indemnifying Party shall not be liable to such Indemnified Person for expenses incurred by such Indemnified Person in connection with the defense thereof (other than reasonable costs of investigation) unless (i) such Indemnified Person shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the preceding sentence (it being understood, however, that the Indemnifying Party shall not be liable for the expenses of more than one separate counsel in any jurisdiction,, representing the Indemnified Persons who are parties to such Proceedings), (ii) the Indemnifying Party shall not have employed counsel reasonably satisfactory to such Indemnified Person to represent such Indemnified Person within a reasonable time after notice of commencement of the Proceedings or (iii) the Indemnifying Party shall have authorized in writing the employment of counsel for such Indemnified Person.

SECTION 5.03. Settlements. The Indemnifying Party shall not be liable for any settlement of any Proceedings effected without its written consent (which consent shall not be unreasonably withheld). If any settlement of any Proceeding is consummated with the written consent of the Indemnifying Party or if there is a final judgment for the plaintiff in any such Proceedings, the Indemnifying Party agrees to indemnify and hold harmless each Indemnified Person from and against any and all Losses by reason of such settlement or judgment in accordance with, and subject to the limitations of, the provisions of this Article V. The Indemnifying Party shall not, without the prior written consent of an Indemnified Person (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened Proceedings in respect of which indemnity has been sought hereunder by such Indemnified Person unless (i) such settlement includes an unconditional release of such Indemnified Person in form and substance reasonably satisfactory to such Indemnified Person from all liability on the claims that are the subject matter of such Proceedings and (ii) such settlement does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

SECTION 5.04. Definitions. For purposes of this Article V, any capitalized terms not otherwise defined in this Agreement shall have the meaning assigned to them in the Equity Purchase and Rights Offering Agreement dated as of July 16, 2007 by and among the Company and the purchasers listed on the signature pages thereto.

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ARTICLE VI

Miscellaneous

SECTION 6.01. Surviving Provisions. The representations and warranties of the Company and the WCAS Investors set forth in Articles II and III shall survive the execution and delivery hereof and the Closing hereunder until the first anniversary of the Closing Date. The covenants included in this Agreement survive the Closing.

SECTION 6.02. Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, real estate transfer or gains and stock transfer Taxes incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the Company.

SECTION 6.03. Entire Agreement. This Agreement (including all schedules and exhibits hereto) constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement supersedes all prior agreements and understandings, whether written or oral, among the parties hereto with respect to the subject matter hereof and thereof.

SECTION 6.04. Amendment and Waiver. This Agreement may not be amended or any provision hereof waived or modified except by an instrument in writing signed on behalf of each of the Company and each of the WCAS Investors.

SECTION 6.05. Extension; Waiver. At any time prior to the Closing Date, the parties may (i) extend the time for the performance of any of the obligations or other acts of the other party, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party. The failure of any party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights nor shall any single or partial exercise by any party to this Agreement of any of its rights under this Agreement preclude any other or further exercise of such rights or any other rights under this Agreement.

24

SECTION 6.06. Notices. Any Notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile, in each case addressed to a party. The addresses for such communications shall be:

If to the Company:

ITC^DeltaCom, Inc.

7037 Old Madison Pike

Huntsville, Alabama 35806

Attention: Richard E. Fish, Jr.

Facsimile: (256) 382-3935

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: J. Gregory Milmoe

Facsimile: (917) 777-3770

If to any WCAS Investor:

Thomas E. McInerney

Welsh, Carson, Anderson & Stowe

320 Park Avenue

Suite 2500

New York, New York 10022

Telecopy No.: (212) 893-9548

Attention: Thomas E. McInerney

with a copy to:

Davis Polk & Wardwell

450 Lexington Avenue

Attention: Carole Schiffman

Facsimile: (212) 450-3800

25

SECTION 6.07. Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in whole or in part, by either of the parties (whether by operation of law or otherwise) without the prior written consent of the other party, and any such assignment that is not so consented to shall be null and void.

SECTION 6.08. Exhibits and Annexes; Interpretation. (a) The headings contained in this Agreement, in any Exhibit hereto and in the table of contents to this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit not otherwise defined therein shall have the meaning as defined in this Agreement.

(b) For all purposes hereof, (i) the words “include”, “includes”, “included” and “including” shall be deemed to be followed by the phrase “without limitation” and (ii) “person” means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental Entity or other entity.

SECTION 6.09. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.

SECTION 6.10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS AGREEMENT.

SECTION 6.11. Consent to Jurisdiction. Any process against the Company or a WCAS Investor in, or in connection with, any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, may be served personally or by certified mail pursuant to the notice provision set forth in Section 6.6 with the same effect as though served on it personally. Each of the parties hereto hereby irrevocably submits in any suit,

26

action or proceeding by the parties hereto arising out of or relating to this Agreement or any of the transactions contemplated hereby, to the exclusive jurisdiction and venue of the federal and state courts of the State of Delaware and irrevocably waives any and all objections to exclusive jurisdiction and review of venue that any such party may have under the laws of the State of Delaware or the United States.

SECTION 6.12. Counterparts. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

SECTION 6.13. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

SECTION 6.14. No Third Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto, any legal or equitable rights hereunder.

27

IN WITNESS WHEREOF, the Company and the WCAS Investors have caused this Agreement to be duly executed as of the date first written above.

FOR COMPANY:
ITC^DELTACOM, INC.,
By:	/s/ J. Thomas Mullis
	Name: J. Thomas Mullis
	Title:   Senior Vice President–Legal and Regulatory

FOR WCAS INVESTORS:
	WCAS CAPITAL PARTNERS III, L.P.
	By: WCAS CP III Associates L.L.C., General Partner
	By:	/s/ Jonathan M. Rather
		Name: Jonathan M. Rather
		Title:   Managing Member
	WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
	By: WCAS VIII Associates LLC, General Partner
	By:	/s/ Jonathan M. Rather
		Name: Jonathan M. Rather
		Title:   Managing Member

Certain individual investors and trusts
By:	/s/ Jonathan M. Rather
	Jonathan M. Rather, as Attorney-in- fact for the individual investors listed below:
	Patrick J. Welsh
	Russell L. Carson
	Bruce K. Anderson
	Andrew M. Paul
	Thomas E. McInerney
	Robert A. Minicucci
	Paul B. Queally
	Anthony J. de Nicola
	D. Scott Mackesy
	Sanjay Swani
	Laura Van Buren
	Sean Traynor
	John Almeida
	Eric J. Lee
	James R. Matthews
	IRA f/b/o Jonathan M. Rather
Other trusts:
Mary R. Anderson TTEE of The Bruce K. Anderson 2004 Trust
The Bruce K. Anderson 2004 Irrevocable Trust
By:	/s/ Mary R. Anderson
Name:	Mary R. Anderson
Title:	Trustee
Carol Welsh TTEE of the Patrick Welsh 2004 Irrevocable Trust
By:	/s/ Carol Welsh
Name:	Carol Welsh
Title:	Trustee

EX-10.13

Exhibit 10.13

[Series B Warrant Agreement – Execution Copy]

AMENDMENT NO. 3 TO WARRANT AGREEMENT

THIS AMENDMENT NO. 3 TO WARRANT AGREEMENT, dated as of July 31, 2007 (this “Amendment”), is between ITC^DeltaCom, Inc., a Delaware corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey limited liability company, as warrant agent (the “Warrant Agent”).

W I T N E S S E T H:

WHEREAS, the Company and the Warrant Agent are parties to a Warrant Agreement, dated as of October 6, 2003, as amended as of March 29, 2005 and July 26, 2005 (the “Agreement”), pursuant to which the Company has issued and delivered 3,000,000 warrants;

WHEREAS, the Holders (as such term is defined in the Agreement) of a majority of such warrants outstanding as of the date hereof have consented in writing to this Amendment in accordance with Section 12(a) of the Agreement; and

WHEREAS, the Company wishes to amend the Agreement pursuant to such consent, as hereinafter provided;

NOW, THEREFORE, in consideration of the promises and the mutual agreements herein set forth, the parties hereby agree as follows:

SECTION 1. CAPITALIZED TERMS.

Capitalized terms used in this Amendment and not defined herein have the meanings given to such terms in the Agreement.

SECTION 2. AMENDMENT TO SECTION 14 OF AGREEMENT.

Section 14 of the Agreement is hereby amended by deleting existing Section 14 in its entirety and by substituting therefor a new Section 14, which shall read in its entirety as follows:

This Agreement and the right of any Holder to exercise Warrants pursuant hereto or the terms of such Warrants shall terminate at 5:00 p.m., New York City time, on the earliest to occur of (a) the Expiration Date, (b) the date on which all Warrants have been exercised or (c) the date on which the Company shall have submitted to the Warrant Agent for cancellation pursuant to Section 10.4 the Warrants tendered to the Company in the Recapitalization Exchange. The provisions of Sections 2.3, 9 and 10 shall survive such termination.

SECTION 3. AMENDMENT TO SECTION 15 OF AGREEMENT.

Section 15 of the Agreement is hereby amended by adding, in the appropriate alphabetical order, the following definition to such Section 15:

“Recapitalization Exchange” means a transaction or series of related transactions in which Holders of at least 90% of the outstanding Warrants tender such Warrants to the Company in exchange for Common Stock on terms specified in an agreement between such Holders and the Company.

SECTION 4. EFFECTIVENESS.

This Amendment shall be effective as of the date hereof. From and after the effectiveness of this Amendment, each reference in the Agreement to “this Agreement” shall mean the Agreement as amended by this Amendment. Except as amended by this Amendment, the terms and provisions of the Agreement shall remain unchanged.

SECTION 5. GOVERNING LAW.

This Amendment shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with the internal laws of the State of New York, without giving effect to principles of conflict of laws to the extent the application of the laws of another jurisdiction would be required thereby.

[signature page follows]

2

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.

ITC^DELTACOM, INC.
By:	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Senior Vice President-Legal and Regulatory
MELLON INVESTOR SERVICES LLC as Warrant Agent
By:	/s/ Judy Hsu
Name:	Judy Hsu
Title:	Vice President

EX-10.14

Exhibit 10.14

AMENDMENT NO. 2 TO WARRANT AGREEMENT

THIS AMENDMENT NO. 2 TO WARRANT AGREEMENT, dated as of July 31, 2007 (this “Amendment”), is between ITC^DeltaCom, Inc., a Delaware corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey limited liability company, as warrant agent (the “Warrant Agent”).

W I T N E S S E T H:

WHEREAS, the Company and the Warrant Agent are parties to a Warrant Agreement, dated as of March 29, 2005, as amended as of July 26, 2005 (the “Agreement”), pursuant to which the Company has issued and delivered 20,000,000 warrants;

WHEREAS, the Holders (as such term is defined in the Agreement) of a majority of such warrants outstanding as of the date hereof have consented in writing to this Amendment in accordance with Section 12(a) of the Agreement; and

WHEREAS, the Company wishes to amend the Agreement pursuant to such consent, as hereinafter provided;

NOW, THEREFORE, in consideration of the promises and the mutual agreements herein set forth, the parties hereby agree as follows:

SECTION 1. CAPITALIZED TERMS.

Capitalized terms used in this Amendment and not defined herein have the meanings given to such terms in the Agreement.

SECTION 2. AMENDMENT TO SECTION 14 OF AGREEMENT.

Section 14 of the Agreement is hereby amended by deleting existing Section 14 in its entirety and by substituting therefor a new Section 14, which shall read in its entirety as follows:

This Agreement and the right of any Holder to exercise Warrants pursuant hereto or the terms of such Warrants shall terminate at 5:00 p.m., New York City time, on the earliest to occur of (a) the Expiration Date, (b) the date on which all Warrants have been exercised or (c) the date on which the Company shall have submitted to the Warrant Agent for cancellation pursuant to Section 10.4 the Warrants tendered to the Company in the Recapitalization Exchange. The provisions of Sections 2.3, 9 and 10 shall survive such termination.

SECTION 3. AMENDMENT TO SECTION 15 OF AGREEMENT.

Section 15 of the Agreement is hereby amended by adding, in the appropriate alphabetical order, the following definition to such Section 15:

“Recapitalization Exchange” means a transaction or series of related transactions in which Holders of at least 90% of the outstanding Warrants tender such Warrants to the Company in exchange for Common Stock on terms specified in an agreement between such Holders and the Company.

SECTION 4. EFFECTIVENESS.

This Amendment shall be effective as of the date hereof. From and after the effectiveness of this Amendment, each reference in the Agreement to “this Agreement” shall mean the Agreement as amended by this Amendment. Except as amended by this Amendment, the terms and provisions of the Agreement shall remain unchanged.

SECTION 5. GOVERNING LAW.

This Amendment shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with the internal laws of the State of New York, without giving effect to principles of conflict of laws to the extent the application of the laws of another jurisdiction would be required thereby.

[signature page follows]

2

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.

ITC^DELTACOM, INC.
By:	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Senior Vice President-Legal and Regulatory
MELLON INVESTOR SERVICES LLC as Warrant Agent
By:	/s/ Judy Hsu
Name:	Judy Hsu
Title:	Vice President

EX-10.15

Exhibit 10.15

AMENDMENT NO. 2 TO WARRANT AGREEMENT

THIS AMENDMENT NO. 2 TO WARRANT AGREEMENT, dated as of July 31, 2007 (this “Amendment”), is between ITC^DeltaCom, Inc., a Delaware corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey limited liability company, as warrant agent (the “Warrant Agent”).

W I T N E S S E T H:

WHEREAS, the Company and the Warrant Agent are parties to a Warrant Agreement, dated as of July 26, 2005 and amended as of December 21, 2005 (the “Agreement”), pursuant to which the Company has issued and delivered 9,703,505 warrants;

WHEREAS, the Holders (as such term is defined in the Agreement) of a majority of such warrants outstanding as of the date hereof have consented in writing to this Amendment in accordance with Section 12(a) of the Agreement; and

WHEREAS, the Company wishes to amend the Agreement pursuant to such consent, as hereinafter provided;

NOW, THEREFORE, in consideration of the promises and the mutual agreements herein set forth, the parties hereby agree as follows:

SECTION 1. CAPITALIZED TERMS.

Capitalized terms used in this Amendment and not defined herein have the meanings given to such terms in the Agreement.

SECTION 2. AMENDMENT TO SECTION 14 OF AGREEMENT.

Section 14 of the Agreement is hereby amended by deleting existing Section 14 in its entirety and by substituting therefor a new Section 14, which shall read in its entirety as follows:

This Agreement and the right of any Holder to exercise Warrants pursuant hereto or the terms of such Warrants shall terminate at 5:00 p.m., New York City time, on the earliest to occur of (a) the Expiration Date, (b) the date on which all Warrants have been exercised or (c) the date on which the Company shall have submitted to the Warrant Agent for cancellation pursuant to Section 10.4 the Warrants tendered to the Company in the Recapitalization Exchange. The provisions of Sections 2.3, 9 and 10 shall survive any such termination.

SECTION 3. AMENDMENT TO SECTION 15 OF AGREEMENT.

Section 15 of the Agreement is hereby amended by adding, in the appropriate alphabetical order, the following definition to such Section 15:

“Recapitalization Exchange” means a transaction or series of related transactions in which Holders of at least 95% of the outstanding Warrants tender such Warrants to the Company in exchange for Common Stock on terms specified in agreements between such Holders and the Company.

SECTION 4. EFFECTIVENESS.

This Amendment shall be effective as of the date hereof. From and after the effectiveness of this Amendment, each reference in the Agreement to “this Agreement” shall mean the Agreement as amended by this Amendment. Except as amended by this Amendment, the terms and provisions of the Agreement shall remain unchanged.

SECTION 5. GOVERNING LAW.

This Amendment shall be deemed to be a contract made under the laws of the State of New York and for all purposes shall be construed in accordance with the internal laws of the State of New York, without giving effect to principles of conflict of laws to the extent the application of the laws of another jurisdiction would be required thereby.

SECTION 6. COUNTERPARTS.

This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

[signature page follows]

2

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, as of the day and year first above written.

ITC^DELTACOM, INC.
By:	/s/ J. Thomas Mullis
Name:	J. Thomas Mullis
Title:	Senior Vice President-Legal and Regulatory
MELLON INVESTOR SERVICES LLC as Warrant Agent
By:	/s/ Judy Hsu
Name:	Judy Hsu
Title:	Vice President

EX-10.16

Exhibit 10.16

AMENDMENT NO. 1

TO

GOVERNANCE AGREEMENT

AMENDMENT NO. 1 TO GOVERNANCE AGREEMENT (this “Amendment”), dated as of July 31, 2007, made among ITC^DeltaCom, Inc., a Delaware corporation (the “Parent”), and each person listed on the signature pages hereof under the headings “WCAS Securityholders” and “TCP Securityholders.”

WITNESSETH:

WHEREAS, the parties to this Amendment wish to amend the Amended and Restated Governance Agreement, dated as of and July 26, 2005 (the “Agreement”), among Parent, the securityholders of Parent listed on the signature pages thereof and the other parties to such agreement to facilitate the recapitalization transactions of Parent to be consummated on the date hereof;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1. Effectiveness; Capitalized Terms.

(a) This Amendment shall be effective as of the date hereof.

(b) All capitalized terms used in this Amendment and not defined herein have the meanings ascribed to such terms in the Agreement.

2. Definitions.

(a) Article I of the Agreement is hereby amended by adding, in the appropriate alphabetical order, the following definitions to such Article I:

“Equity Purchase and Rights Offering Agreement” means the Equity Purchase and Rights Offering Agreement, dated as of July 16, 2007, among Parent and the other Persons listed on the signature pages thereof.

“Recapitalization” means, collectively, the transactions relating to the issuance and sale of Voting Securities and Voting Security Equivalents described in Exhibit A to the Equity Purchase and Rights Offering Agreement.

“Rights Offering” means a registration under the Securities Act of an offering of Common Stock and rights to purchase Common Stock on substantially the terms provided for in the Equity Purchase and Rights Offering Agreement.

“Series H Certificate of Designation” means the certificate of designation of the Series H Preferred Stock as amended from time to time.

“Series H Preferred Stock” means the 6% Series H Convertible Redeemable Preferred Stock, par value $0.01 per share, of Parent.

(b) The last sentence of the definition of “Voting Securities” set forth in Article I of the Agreement is hereby amended by deleting such last sentence and substituting in lieu thereof the following sentence:

“For purposes of this definition, each share of Common Stock, each share of Series A Preferred Stock, each share of Series B Preferred Stock, each share of Series C Preferred Stock and each share of Series H Preferred Stock shall at all times be considered Voting Securities.”

3. Subscription Right. Section 3.4(g) of the Agreement is hereby amended by adding the following sentence at the end thereof:

“In addition, for purposes of this Section 3.4, “Excluded Securities” also means Voting Securities and Voting Security Equivalents issued or issuable (a) pursuant to or in connection with the Recapitalization (including, without limitation, the issuance and sale for cash of Common Stock to certain WCAS Securityholders and the issuance and sale for cash of the Series H Preferred Stock), (b) pursuant to the Series H Certificate of Designation in accordance with the Equity Purchase and Rights Offering Agreement, (c) upon the conversion, exchange or exercise of the Series H Preferred Stock or (d) pursuant to or in connection with the Rights Offering.”

4. Miscellaneous. This Amendment shall not constitute an amendment or modification of any provision of the Agreement not expressly referred to herein. Except as expressly set forth in this Amendment, the terms, provisions and conditions of the Agreement shall remain unchanged and in full force and effect. This Amendment may be executed in counterparts, all of which shall together constitute a single agreement.

5. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of Delaware without giving effect to principles of conflicts of law.

[signature pages follow]

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth in the first paragraph hereof.

COMPANY:
ITC^DELTACOM, INC.
By:	/s/ Richard E. Fish, Jr.
Name:	Richard E. Fish, Jr.
Title:	Executive Vice President and Chief Financial Officer

WCAS SECURITYHOLDERS:
WCAS CAPITAL PARTNERS III, L.P.
By:	WCAS CP III Associates L.L.C., General Partner
By:	/s/ Jonathan M. Rather
Name:	Jonathan M. Rather
Title:	Managing Member
WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
By:	WCAS VIII Associates LLC, General Partner
By:	/s/ Jonathan M. Rather
Name:	Jonathan M. Rather
Title:	Managing Member
WCAS INFORMATION PARTNERS, L.P.
By:	WCAS Info Partners, General Partner
By:	/s/ Jonathan M. Rather
Name:	Jonathan M. Rather
Title:	Attorney-in-fact
WCAS REPRESENTATIVE
/s/ Thomas H. McInerney Thomas H. McInerney

Individual investors and trusts:
By:	/s/ Jonathan M. Rather
	Jonathan M. Rather, as Attorney-in-fact for the individual investors listed below:
	Patrick J. Welsh
	Russell L. Carson
	Bruce K. Anderson
	Andrew M. Paul
	Thomas E. McInerney
	Robert A. Minicucci
	Anthony J. de Nicola
	Paul B. Queally
	D. Scott Mackesy
	Sanjay Swani
	James Matthews
	Laura VanBuren
	Sean Traynor
	John Almeida
	Eric J. Lee
	Jonathan M. Rather
	IRA – f/b/o James Matthews
	IRA f/b/o Jonathan M. Rather

/s/ Jill A. Hanau Jill A. Hanau
Other trusts:
The Bruce K. Anderson 2004 Irrevocable Trust
By:	/s/ Mary Anderson
Name:	Mary Anderson
Title:	Trustee
The Patrick Welsh 2004 Irrevocable Trust
By:	/s/ Carol Welsh
Name:	Carol Welsh
Title:	Trustee
Patrick J. Welsh Tr UA 05 09 05
By:	/s/ Patrick Welsh
Name:	Patrick Welsh
Title:	Trustee

TCP SECURITYHOLDERS:
SPECIAL VALUE ABSOLUTE RETURN FUND, LLC
By:	Tennenbaum Capital Partners, LLC
Its:	Investment Manager
By:	/s/ Howard M. Levkowitz
Name:	Howard M. Levkowitz
Title:	Managing Partner
SPECIAL VALUE BOND FUND II, LLC
By:	Tennenbaum Capital Partners, LLC
Its:	Investment Manager
By:	/s/ Howard M. Levkowitz
Name:	Howard M. Levkowitz
Title:	Managing Partner

EX-10.17

Exhibit 10.17

AMENDMENT NO. 3

TO

REGISTRATION RIGHTS AGREEMENT

AMENDMENT NO. 3 TO REGISTRATION RIGHTS AGREEMENT (this “Amendment”), dated as of July 31, 2007, made among ITC^DeltaCom, Inc., a Delaware corporation (the “Company”), and each person listed on the signature pages hereof under the heading “WCAS Securityholders.”

WITNESSETH:

WHEREAS, the parties to this Amendment wish to amend the Registration Rights Agreement, dated as of October 6, 2003 and amended as of December 4, 2003 and July 26, 2005 (the “Agreement”), among the Company, the persons listed on the signature pages thereof under the heading “WCAS Securityholders” and the other parties to such agreement to facilitate the recapitalization transactions of the Company to be consummated on the date hereof;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1. Effectiveness. This Amendment shall be effective as of the date hereof.

2. Definitions.

(a) Section 1 of the Agreement is hereby amended by adding, in the appropriate alphabetical order, the following definition to such Section 1:

“Rights Offering” means a registration under the Securities Act of an offering of Common Stock and rights to purchase Common Stock on substantially the terms provided for in the Equity Purchase and Rights Offering Agreement, dated as of July 16, 2007, as amended from time to time, among the Company and the other Persons listed on the signature pages thereof.

(b) The definitions of “Excluded Registration,” “Registrable Securities” and “TCP Registration Rights Agreement” set forth in Section 1 of the Agreement are hereby amended and restated in their entirety to read as follows:

“Excluded Registration” means (i) a registration of Common Stock under the Securities Act pursuant to a registration statement filed (a) on Form S-4 or Form S-8 or any successor registration forms that may be adopted by the SEC or (b) in connection with an exchange offer or an offering of securities solely to existing stockholders of the Company (including, without limitation, the Rights Offering) or employees of the Company or its subsidiaries, (ii) a Rule 144A Resale Shelf Registration or (iii) a registration statement filed pursuant to Section 3 of the TCP Registration Rights Agreement.”

“Registrable Securities” means, collectively, (i) the shares of Common Stock held by the Holders immediately prior to the Closing Date plus the shares of Common Stock acquired by the Holders on or after the Closing Date (including, without limitation, the shares of Common Stock issued or issuable upon conversion of the Preferred Shares or upon exercise or exchange of the Warrants) in accordance with the Governance Agreement (or otherwise following the expiration of the Governance Agreement), (ii) the Preferred Shares, (iii) the Warrants and (iv) any securities paid, issued or distributed in respect of any shares of Common Stock referred to in clause (i) by way of stock dividend or distribution or stock split or in connection with a combination of shares, recapitalization, reorganization, merger, consolidation or otherwise. Without limiting the generality of the foregoing, “Registrable Securities” shall include the shares of Common Stock acquired by the Holders pursuant to or in accordance with (a) the Stock Purchase Agreement, dated as of July 31, 2007, among the Company and the other Persons listed on the signature pages thereof, (b) the Exchange Agreement, dated as of July 31, 2007, among the Company, Interstate FiberNet, Inc. and the other Persons listed on the signature pages thereof and (c) the WCAS Exchange Agreement, dated as of July 31, 2007, among the Company and the other Persons listed as the signature pages thereof. Securities shall cease to be Registrable Securities in accordance with Section 2.

“TCP Registration Rights Agreement” means the Registration Rights Agreement, dated as of July 26, 2005, as amended as of July 31, 2007, among the Company and the other Persons listed on the signature pages thereof.

3. No Inconsistent Agreements; Most Favorable Provisions. The second sentence of Section 15 of the Agreement is hereby amended and replaced in its entirety to read as follows:

“The Holders agree for purposes of this Section 15 that the TCP Registration Rights Agreement is not inconsistent with the rights of the Holders hereunder.”

4. Miscellaneous. This Amendment shall not constitute an amendment or modification of any provision of the Agreement not expressly referred to herein. Except as expressly set forth in this Amendment, the terms, provisions and conditions of the Agreement shall remain unchanged and in full force and effect. This Amendment may be executed in counterparts, all of which shall together constitute a single agreement.

5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

[signature pages follow]

-2-

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth in the first paragraph hereof.

COMPANY:
ITC^DELTACOM, INC.
By:	/s/ Richard E. Fish, Jr.
Name:	Richard E. Fish, Jr.
Title:	Executive Vice President and Chief Financial Officer

WCAS SECURITYHOLDERS:
WCAS CAPITAL PARTNERS III, L.P.
By:	WCAS CP III Associates L.L.C., General Partner
By:	/s/ Jonathan M. Rather
Name:	Jonathan M. Rather
Title:	Managing Member
WELSH, CARSON, ANDERSON & STOWE VIII, L.P.
By:	WCAS VIII Associates LLC, General Partner
By:	/s/ Jonathan M. Rather
Name:	Jonathan M. Rather
Title:	Managing Member
WCAS INFORMATION PARTNERS, L.P.
By:	WCAS Info Partners, General Partner
By:	/s/ Jonathan M. Rather
Name:	Jonathan M. Rather
Title:	Attorney-in-fact

Individual investors and trusts:
By:	/s/ Jonathan M. Rather
	Jonathan M. Rather, as Attorney-in-fact for the individual investors listed below:
	Patrick J. Welsh
	Russell L. Carson
	Bruce K. Anderson
	Andrew M. Paul
	Thomas E. McInerney
	Robert A. Minicucci
	Anthony J. de Nicola
	Paul B. Queally
	D. Scott Mackesy
	Sanjay Swani
	James Matthews
	Laura VanBuren
	Sean Traynor
	John Almeida
	Eric J. Lee
	Jonathan M. Rather
	IRA – f/b/o James Matthews
	IRA f/b/o Jonathan M. Rather
Address of each of the WCAS Securityholders
Welsh, Carson, Anderson & Stowe
320 Park Avenue, Suite 2500
New York, NY 10022

/s/ Jill A. Hanau
Jill A. Hanau
Other trusts:
The Bruce K. Anderson 2004 Irrevocable Trust
By:	/s/ Mary Anderson
Name:	Mary Anderson
Title:	Trustee
The Patrick Welsh 2004 Irrevocable Trust
By:	/s/ Carol Welsh
Name:	Carol Welsh
Title:	Trustee
Patrick J. Welsh Tr UA 05 09 05
By:	/s/ Patrick Welsh
Name:	Patrick Welsh
Title:	Trustee
Address of each of the WCAS Securityholders
Welsh, Carson, Anderson & Stowe
320 Park Avenue, Suite 2500
New York, NY 10022

EX-10.18

Exhibit 10.18

AMENDMENT NO. 1

TO

REGISTRATION RIGHTS AGREEMENT

AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT (this “Amendment”), dated as of July 31, 2007, made among ITC^DeltaCom, Inc., a Delaware corporation (the “Company”), and each person listed on the signature pages hereof under the heading “TCP Securityholders.”

WITNESSETH:

WHEREAS, the parties to this Amendment wish to amend the Registration Rights Agreement, dated as of July 26, 2005 (the “Agreement”), among the Company, the other persons listed on the signature pages thereof and the other parties to such agreement to facilitate the recapitalization transactions of the Company to be consummated on the date hereof; and

WHEREAS, the TCP Securityholders listed on the signature pages hereof are the Holders of a Majority of the Registrable Securities as defined in, and for purposes of, the Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1. Effectiveness; Capitalized Terms.

(a) This Amendment shall be effective as of the date hereof.

(b) All capitalized terms used in this Amendment and not defined herein have the meanings ascribed to such terms in the Agreement.

2. Definitions.

(a) Section 1 of the Agreement is hereby amended by adding, in the appropriate alphabetical order, the following definition to such Section 1:

“Rights Offering” means a registration under the Securities Act of an offering of Common Stock and rights to purchase Common Stock on substantially the terms provided for in the Equity Purchase and Rights Offering Agreement, dated as of July 16, 2007, as amended from time to time, among the Company and the other Persons listed on the signature pages thereof.

(b) The definitions of “Excluded Registration,” “Registrable Securities” and “WCAS Registration Rights Agreement” set forth in Section 1 of the Agreement are hereby amended and restated in their entirety to read as follows:

“Excluded Registration” means (i) a registration of Common Stock under the Securities Act pursuant to a registration statement filed (a) on Form S-4 or

Form S-8 or any successor registration forms that may be adopted by the SEC or (b) in connection with an exchange offer or an offering of securities solely to existing stockholders of the Company (including, without limitation, the Rights Offering) or employees of the Company or its subsidiaries, (ii) a Rule 144A Resale Shelf Registration or (iii) a registration statement filed pursuant to Section 3 of the TCP Registration Rights Agreement.”

“Registrable Securities” means, collectively, with respect to any Holder, the following securities held by such Holder: (a) the shares of Common Stock issued upon conversion of the Preferred Shares; (b) the shares of Common Stock issued by the Company upon exercise or exchange of the Warrants (including, without limitation, the shares of Common Stock issued by the Company pursuant to the Series D Warrant Exchange Agreement, dated as of July 31, 2007, among the Company and the other Persons listed on the signature pages thereof); (c) the shares of Common Stock issued by the Company pursuant to the Exchange Agreement, dated as of July 31, 2007, among the Company, Interstate FiberNet, Inc. and the Persons listed as “TCP Holders” on the signature pages thereof; (d) the shares of Common Stock issued by the Company pursuant to the Exchange Agreement, dated as of July 31, 2007, among the Company, Interstate FiberNet, Inc. and the Persons listed as the “Babson Entities” on the signature pages thereof; (e) the Preferred Shares; (f) the Warrants; and (g) any securities paid, issued or distributed in respect of any shares of Common Stock referred to in clause (a), (b), (c) or (d) by way of stock dividend or distribution or stock split or in connection with a combination of shares, recapitalization, reorganization, merger, consolidation or otherwise and held by such Holder. Securities shall cease to be Registrable Securities in accordance with Section 2.

“WCAS Registration Rights Agreement” means the Registration Rights Agreement, dated as of October 6, 2003, as amended as of December 4, 2003, July 26, 2005 and July 31, 2007, among the Company and the other Persons listed on the signature pages thereof.

3. No Inconsistent Agreements; Most Favorable Provisions. The second sentence of Section 15 of the Agreement is hereby amended and replaced in its entirety to read as follows:

“The Holders agree for purposes of this Section 15 that the WCAS Registration Rights Agreement is not inconsistent with the rights of the Holders hereunder.”

4. Miscellaneous. This Amendment shall not constitute an amendment or modification of any provision of the Agreement not expressly referred to herein. Except as expressly set forth in this Amendment, the terms, provisions and conditions of the Agreement shall remain unchanged and in full force and effect. This Amendment may be executed in counterparts, all of which shall together constitute a single agreement.

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5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

[signature pages follow]

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth in the first paragraph hereof.

COMPANY:
ITC^DELTACOM, INC.
By:	/s/ Richard E. Fish, Jr.
Name:	Richard E. Fish, Jr.
Title:	Executive Vice President and Chief Financial Officer

TCP SECURITYHOLDERS:
SPECIAL VALUE ABSOLUTE RETURN FUND, LLC
By:	Tennenbaum Capital Partners, LLC
Its:	Investment Manager
By:	/s/ Howard M. Levkowitz
Name:	Howard M. Levkowitz
Title:	Managing Partner
SPECIAL VALUE BOND FUND II, LLC
By:	Tennenbaum Capital Partners, LLC
Its:	Investment Manager
By:	/s/ Howard M. Levkowitz
Name:	Howard M. Levkowitz
Title:	Managing Partner

EX-10.19

Exhibit 10.19

ITC^DELTACOM, INC.

EXECUTIVE STOCK INCENTIVE PLAN

AS AMENDED AND RESTATED, EFFECTIVE JULY 31, 2007

This ITC^DELTACOM, INC. EXECUTIVE STOCK INCENTIVE PLAN authorizes our Board, or a Committee appointed by the Board, to grant Stock Units. 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 Stock Units that will apply unless the Board provides otherwise in a particular case. We have provided definitions for capitalized terms in Section 17 below.

1. PURPOSE

We adopted the Plan on May 10, 2005 so that we may grant our equity securities as an inducement material to certain senior executives entering into employment with the Company within the meaning of Nasdaq Marketplace Rule 4350(i)(1)(A)(iv) who have been hired to provide services to us or our Affiliates. We believe that equity ownership will create strong incentives for these individuals to produce good business results for us by giving them an opportunity to acquire a proprietary interest in ITC^DeltaCom, Inc. We believe that equity ownership will encourage these individuals to do their best to help us to achieve our corporate objectives and that these individuals also will be more likely to stay with us instead of pursuing other employment or business opportunities.

We initially amended and restated the Plan effective on December 20, 2005. We subsequently amended and restated the Plan effective on July 31, 2007 to reflect the recapitalization of the Company which occurred on that date.

We refer to 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 consistent with the terms of each Agreement. 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 Incentive Award, the 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.

(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 the members of the Committee 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 the 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 of Stock. We will not issue more than 4,000,000 shares of Common Stock under the Plan. We will adjust the foregoing number of shares as appropriate to reflect changes in our capitalization, as provided in Section 13 below.

4. ELIGIBILITY

We may grant Incentive Awards to any Eligible Individual.

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.

(b) Term. Unless earlier terminated by the Board, the Plan will terminate eight years after the Effective Date.

6. STOCK UNITS

(a) Stock Units. The Board may grant Stock Units to an Eligible Individual. Stock Units granted to an Eligible Individual will have the terms set forth in such Eligible Individual’s Agreement and, to the extent not set forth in such Agreement, in the Plan.

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(b) Delivery of Stock. Upon satisfying the specified Conditions applicable to such Stock Units, and unless otherwise set forth in the Holder’s Agreement (including any deferral election form executed by such Holder thereunder), the Company will deliver to the Holder or the Holder’s beneficiary or estate, as the case may be, a certificate or certificates evidencing the shares of Stock represented by the Stock Units. Notwithstanding the foregoing:

(i) if a Holder is a “key employee” within the meaning of Code section 409A and shares of Stock would otherwise be delivered to such Holder on account of the termination of such Holder’s employment with the Company and its Affiliates, then such shares will not be delivered to such Holder until six months (or such lesser period as may be permitted by Code section 409A) after such termination of employment to the extent necessary to avoid the imposition of the penalty under Code section 409A; and

(ii) if the shares relating to the vested Stock Units would otherwise be delivered during a period in which a Holder is (A) subject to a lock-up agreement restricting such Holder’s ability to sell shares of Stock in the open market, (B) restricted from selling shares of Stock in the open market because such Holder is not then eligible to sell shares of Stock under the Company’s insider trading or similar plan or policy as then in effect (whether because a trading “window” is not open or such Holder is otherwise restricted from trading) or (C) restricted from selling shares of Stock pursuant to an effective registration statement because of an applicable blackout thereunder, delivery of the shares of Stock related to the vested Stock Units will be delayed until no earlier than the first date on which such Holder is no longer prohibited from selling shares of Stock due to a lock-up agreement, insider trading plan or policy restriction or applicable blackout, but in no event later than the end of the calendar year in which the shares related to such vested Stock Units would otherwise have been delivered.

(c) Vesting of Incentive Awards. Incentive Awards granted to an Eligible Individual under the Plan will vest in accordance with the terms set forth in such Eligible Individual’s Agreement and, to the extent not set forth in such Agreement, in the Plan.

(d) Waiver of Restrictions and Acceleration. By written notice to a Holder, the Board may waive restrictions and may accelerate the date on which an Incentive Award may become vested.

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7. RIGHTS OF HOLDERS OF STOCK UNITS

(a) No Rights as Stockholders. Holders of Stock Units will have no rights as stockholders of the Company, including without limitation, the right to vote or to consent to any action of stockholders or to receive any notice of meetings of stockholders.

(b) Right to Cash Payment. Each Holder of Stock Units representing Common Stock will be entitled to receive, upon the Company’s payment of a cash dividend on its outstanding shares of Common Stock, a cash payment for each such Stock Unit held by such Holder as of the record date for such dividend which is equal to the per-share dividend paid on the outstanding shares of Common Stock.

8. TRANSFERABILITY OF INCENTIVE AWARDS

Except as set forth in a Holder’s Agreement, or as the Board may otherwise agree, no Incentive Award held by such Holder may be transferred, assigned, pledged or hypothecated, nor may such Incentive Award be made subject to execution, attachment or similar process.

9. RIGHTS UPON TERMINATION OF EMPLOYMENT

If a Holder ceases to be an employee of the Company and its Affiliates other than because of death or Disability, any Incentive Award held by such Holder that is not vested will vest or be forfeited by Holder in accordance with the terms of such Holder’s Agreement.

10. RIGHTS IN THE EVENT OF DEATH OR DISABILITY

If a Holder ceases to be an employee of the Company and its Affiliates because of death or Disability, any Time-Vesting Incentive Award that is not vested will fully vest on the date of death or Disability. Upon such vesting upon a Holder’s death, the shares of Stock represented by the vested Incentive Award will be deliverable in accordance with the terms of the Plan to the executors, administrators, legatees or distributes of such Holder’s estate. Any other Incentive Award held by such Holder that is not vested will vest or be forfeited by Holder in accordance with the terms of such Holder’s Agreement

11. 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. We are not obligated to register any shares of Stock or other securities covered by the Plan under the Securities Act. We are not obligated to

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take any action to cause shares of Stock issued or sold because of the grant or vesting of Incentive Awards to comply with any law or regulation, including the Securities Act and the regulations thereunder.

12. AMENDMENT AND TERMINATION OF THE PLAN

The Board may amend, suspend or terminate the Plan. Except as permitted under Section 13 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 without the Holder’s consent. With the consent of a Holder, the Board may amend any Agreement with such Holder in a manner not inconsistent with the Plan.

Amendments to the Plan will become effective when the Board adopts them.

13. EFFECT OF CHANGES IN CAPITALIZATION

(a) Capitalization Change. If there is a Capitalization Change, we will adjust (i) the number and kinds of shares for which we may issue Stock Units as provided in Section 3 above and (ii) the number and kind of shares for which Incentive Awards are outstanding as may be determined to be appropriate and equitable by the Board, in its sole discretion, to prevent dilution or enlargement of existing rights. Without limiting the generality of the foregoing, we will use our reasonable efforts otherwise to adjust such outstanding Incentive Awards so that the proportionate interest of the Holder of such Incentive Awards immediately after a Capitalization Change will be substantially the same as immediately before such Capitalization Change.

(b) Reorganization in Which ITC^DeltaCom is the Surviving Corporation Not Involving a Corporate Transaction. If ITC^DeltaCom is the surviving corporation in any reorganization, merger or consolidation that is not a Corporate Transaction, Incentive Awards will be adjusted so as to apply to the securities that a holder of the number and kind of shares of Stock subject to the Incentive Awards would have been entitled to receive immediately following such reorganization, merger or consolidation.

(c) Reorganization in Which ITC^DeltaCom Is Not the Surviving Corporation or Involving a Corporate Transaction. Upon the occurrence of any Corporate Transaction, (i) the Plan will terminate, unless ITC^DeltaCom or our Successor agrees in writing in connection with the Corporate Transaction to continue the Plan, and (ii) unvested Incentive Awards will not vest or be forfeited in the case of such Corporate Transaction unless otherwise provided in the Agreement with respect to such Incentive Awards.

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(d) Adjustments. The Board will make the adjustments to our Stock or securities under this Section 13, 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.

(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 Holder.

14. WITHHOLDING

The Company or an Affiliate, as the case may be, has the right to deduct from payments of any kind otherwise due to a 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 pursuant to an Incentive Award. At the time of such vesting, lapse, exercise or issuance, the Holder will pay in cash 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 Holder may elect to satisfy such obligations, in whole or in part, (a) by causing the Company or the Affiliate to withhold shares of Stock otherwise issuable to the Holder or (b) by delivering to the Company or the Affiliate shares of Stock already owned by the 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. A Holder who has made an election pursuant to this Section 14 may satisfy such Holder’s withholding obligation only with shares of Stock that are not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.

15. DISCLAIMER OF RIGHTS

No provision in the Plan or in any Incentive Award granted pursuant to the Plan will be construed to confer upon any individual the right to remain in the employ or service of the Company or any Affiliate, or to interfere in any way with our right and authority 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.

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16. 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.

17. 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.

“Agreement” means (a) (i) with respect Randall E. Curran, the Employment Agreement, dated as of February 3, 2005, as amended as of December 20, 2005 and as further amended from time to time, between Randall E. Curran and the Company, (ii) with respect to Richard E. Fish, Jr., the Employment Agreement, dated as of February 21, 2005, as amended as of December 20, 2005 and as further amended from time to time, between Richard E. Fish, Jr. and the Company and (ii) with respect to James P. O’Brien, the Employment Agreement, dated as of February 28, 2005, as amended as of December 20, 2005 and as further amended from time to time, between James P. O’Brien and the Company, and (b) with respect to any Holder, any other written agreement between the Company and such Holder that evidences and sets forth the terms and conditions of an Incentive Award.

“Board” means the board of directors of the Company.

“Capitalization Change” means a transaction in which the number of outstanding shares of Stock of any class or series is increased or decreased or changed into or exchanged for a different number or kind of shares of capital stock or other securities of the Company by reason of any recapitalization, reclassification, stock split-up, combination of shares of capital stock, exchange of shares of capital stock, stock dividend or other distribution payable in shares of capital stock, or other increase or decrease in shares of capital stock effectuated without receipt of consideration by the Company.

“Code” means the Internal Revenue Code of 1986, as amended, as in effect on the Effective Date or as hereafter amended, or the corresponding provision of any subsequently enacted tax statute.

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“Committee” means the Compensation Committee of the Board or other 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 (a) “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act or any successor rule or regulation, (b) “outside directors” for purposes of Code section 162(m) and (c) “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 in the case of each of clauses (a), (b) and (c) the Board determines that satisfaction of such requirements is impracticable, unnecessary or inconsistent with contractual obligations of the Company, including the Company’s contractual obligations under the Governance Agreement.

“Common Stock” means the common stock, par value $0.01 per share, of ITC^DeltaCom.

“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, as applicable, the continuous service requirements and the performance requirements that must be met before Incentive Awards become vested.

“Corporate Transaction” means any of the following: (a) the dissolution or liquidation of the Company; (b) a merger, consolidation or reorganization of the Company in which the Company is not the surviving corporation; (c) a sale of all or substantially all of the assets of the Company to another Person; or (d) any other transaction (including a merger or reorganization in which the Company is the surviving corporation) that results in any Person, other than the Existing Stockholders, 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.

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

“Effective Date” means May 10, 2005, which is the date on which the Board adopted the Plan.

“Eligible Individual” means each of Randall E. Curran, Richard E. Fish, Jr. and James P. O’Brien.

“Exchange Act” means the Securities Exchange Act of 1934, as in effect on the Effective Date or as hereafter amended.

“Existing Stockholders” means the WCAS Securityholders and their Affiliates.

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“Fair Market Value,” with respect to any date of determination, means the closing price of a share of Stock reported on the Stock Exchange on the most recent trading date immediately preceding such date of determination on which a closing price was so reported. Notwithstanding the foregoing, in the event that the shares of Stock are listed or admitted to trading on more than one Stock Exchange, Fair Market Value means the closing price of a share of Stock reported on the Stock Exchange that trades the largest volume of shares of Stock on the applicable trading date. If the Stock is not at the time listed or admitted to trading on a Stock Exchange, Fair Market Value means the mean between the lowest reported bid price and highest reported asked price of a share of Stock on the applicable trading date in the over-the-counter market, as such prices are reported in a publication of general circulation selected by the Board and regularly reporting the market price of the Stock in such market. If the Stock is not listed or admitted to trading on any Stock Exchange or traded in the over-the-counter market, Fair Market Value shall be as determined in good faith by the Board.

“Governance Agreement” means the Amended and Restated Governance Agreement, dated as of July 26, 2005, among the Company and the securityholders of the Company listed on the signature pages thereto, as amended from time to time.

“Holder” means an Eligible Individual to whom the Company has granted Incentive Awards under the Plan.

“Incentive Award” means a Stock Units grant under the Plan.

“ITC^DeltaCom” means ITC^DeltaCom, Inc., a Delaware corporation.

“Performance-Vesting Incentive Awards” means, with respect to any Holder, Incentive Awards that vest based solely upon the Company’s achievement of financial performance measures as specified in such Holder’s Agreement.

“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. Executive Stock Incentive Plan, as in effect from time to time.

“Securities Act” means the Securities Act of 1933, as in effect on the Effective Date or as hereafter amended.

“Stock” means the Common Stock.

“Stock Exchange” means The Nasdaq Stock Market, Inc., the OTC Bulletin Board and any established national or regional stock exchange on which the Stock is listed or admitted to trading.

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

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“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.

“Time-Vesting Incentive Award” means, with respect to any Holder, Incentive Awards that vest on dates specified in such Holder’s Agreement based solely upon the Holder’s satisfaction of continuous service requirements.

“WCAS Securityholders” means, collectively, (a) WCAS Capital Partners III, L.P., (b) Welsh, Carson, Anderson & Stowe VIII, L.P., (c) WCAS Information Partners, L.P., (d) each of the individual investors and trusts that executed the Governance Agreement as “WCAS Securityholders,” (e) the Affiliates of any of the persons referred to in clauses (a), (b), (c) and (d) above, (f) the related persons of any of the persons referred to in clauses (a), (b), (c) and (d) above and (g) the WCAS Securityholder Permitted Transferees.

“WCAS Securityholder Permitted Transferees” means the individuals who are the heirs, executors, administrators, testamentary trustees, legatees, beneficiaries, spouses or lineal descendants of any of the WCAS Securityholders who are natural persons.

“We,” “ us” and “our” refer to the Company.

*    *    *

The Board duly adopted and approved the Plan on the 10th day of May, 2005 and duly adopted and approved the amendment and restatement of the Plan effective on the 20^th day of December, 2005 and duly adopted and approved a further amendment and restatement of the Plan effective on the 31st day of July, 2007.

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EX-10.20

Exhibit 10.20

ITC^DELTACOM, INC.

EXECUTIVE STOCK INCENTIVE PLAN

COMMON STOCK UNIT AGREEMENT

(SERIES A PREFERRED STOCK UNIT AGREEMENT, AS AMENDED)

ITC^DeltaCom, Inc., a Delaware corporation (the “Company”) has previously granted              stock units relating to shares of its 8% Series A Convertible Redeemable Preferred Stock, $.01 par value, to the individual named below as holder pursuant to a Series A Preferred Stock Unit Agreement dated as of December 23, 2005 (the “Preferred Stock Unit Agreement”). In connection with the recapitalization of the Company effective as of July 31, 2007, the Company hereby amends and replaces the Preferred Stock Unit Agreement with this agreement and hereby converts the stock units described above into stock units relating to shares of its common stock, $.01 par value (the “Stock”), subject to the vesting conditions referred to in the attachment. Additional terms and conditions of the grant are set forth in this cover sheet, in the attachment, in the individual’s employment agreement, dated as of                      and as amended as of                      (as further amended from time to time, the “Employment Agreement”), and in the ITC^DeltaCom, Inc. Executive Stock Incentive Plan (the “Plan”).

Grant Date:                                 

Name of Holder:                                

Holder’s Social Security Number:                                 

Number of Stock Units Covered by Grant:                                 

This Stock Unit grant is subject to all of the terms and conditions described in this Agreement and in the Plan, a copy of which is available for your review on the Company’s intranet or upon request to Human Resources. You should carefully review the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent with the terms of the Plan.

Company:
	(Signature)
	Title:

Attachment

This is not a stock certificate or a negotiable instrument.

A-1

Attachment

ITC^DELTACOM, INC.

EXECUTIVE STOCK INCENTIVE PLAN

COMMON STOCK UNIT AGREEMENT

(SERIES A PREFERRED STOCK UNIT AGREEMENT, AS AMENDED)

Stock Unit Transferability	This grant is an award of stock units in the number of units set forth on the cover sheet, subject to the vesting conditions described below (the “Stock Units”). Your Stock Units may not be transferred, assigned, pledged or hypothecated, whether by operation of law or otherwise, nor may the Stock Units be made subject to execution, attachment or similar process.
Definitions	Capitalized terms not defined in this Agreement are defined in the Plan, and have the meanings set forth in the Plan. The following additional term has the meaning provided below: “Service” means service by you as an employee of the Company or one of its Affiliates. A change in your position or duties will not result in interrupted or terminated Service so long as you continue to be an employee of the Company or one of its Affiliates.
Vesting	You will vest in the Stock Units in accordance with the terms and conditions contained in your Employment Agreement and the Plan. The resulting aggregate number of vested Stock Units will be rounded down to the nearest whole number of Stock Units. You may not vest in more than the number of Stock Units covered by this grant.
Delivery of Stock Pursuant to Vested Stock Units	Delivery of the shares of Stock represented by your vested Stock Units will be made in accordance with your deferral election attached hereto as Exhibit A, which reflects the deferral election that was in place with respect to your Preferred Stock Unit Agreement prior to its amendment. You will have no further rights with regard to a Stock Unit once the share of Stock relating to the Stock Unit has been delivered.
Forfeiture of Unvested Stock Units	Unvested Stock Units will be forfeited, if at all, in accordance with the terms of the Plan and your Employment Agreement.
Withholding Taxes	You agree, as a condition of this grant, that you will make acceptable arrangements to pay in cash any withholding or

A-2

	other taxes that may be due as a result of vesting in Stock Units or your acquisition of Stock under this grant. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to this grant, the Company will have the right to: (i) require that you make such payments to the Company; (ii) withhold such amounts from other payments due to you from the Company or any Affiliate; or (iii) cause an immediate forfeiture of shares of Stock represented by Stock Units granted pursuant to this Agreement in an amount equal to the withholding or other taxes due.
Retention Rights	This Agreement does not give you the right to be retained by the Company (or any Affiliates) in any capacity. The Company (and any Affiliate) reserve the right to terminate your Service at any time and for any reason.
Stockholder Rights	You do not have any of the rights of a stockholder with respect to the Stock Units unless and until the Stock relating to the Stock Units has been delivered to you. You will, however, be entitled to receive, at the same time as the Company’s payment of a cash dividend on outstanding Stock, a cash payment for each Stock Unit that you hold as of the record date for such dividend equal to the per-share dividend paid on the Stock.
Adjustments	In the event of a Capitalization Change or Corporate Transaction, your Stock Units will be adjusted, if at all, in accordance with the terms of the Plan.
Applicable Law	This attachment (including the exhibit attached hereto) and its cover sheet (collectively, this “Agreement”) will be interpreted and enforced under the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
The Plan	The text of the Plan is incorporated in this Agreement by reference. This Agreement, the Plan and your Employment Agreement constitute the entire understanding between you and the Company regarding this grant of Stock Units. Any prior agreements, commitments or negotiations concerning this grant are superseded.

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EX-10.21

Exhibit 10.21

ITC^DELTACOM, INC.

EXECUTIVE STOCK INCENTIVE PLAN

COMMON STOCK UNIT AGREEMENT

(SERIES B PREFERRED STOCK UNIT AGREEMENT, AS AMENDED)

ITC^DeltaCom, Inc., a Delaware corporation (the “Company”) has previously granted              stock units relating to shares of its 8% Series B Convertible Redeemable Preferred Stock, $.01 par value, to the individual named below as holder pursuant to a Series B Preferred Stock Unit Agreement dated as of December 23, 2005 (the “Preferred Stock Unit Agreement”). In connection with the recapitalization of the Company on July 31, 2007, the Company hereby amends and replaces the Preferred Stock Unit Agreement with this agreement and hereby converts the stock units described above into stock units relating to shares of its common stock, $.01 par value (the “Stock”), subject to the vesting conditions referred to in the attachment. Additional terms and conditions of the grant are set forth in this cover sheet, in the attachment, in the individual’s employment agreement, dated as of                      and as amended as of                      (as further amended from time to time, the “Employment Agreement”), and in the ITC^DeltaCom, Inc. Executive Stock Incentive Plan (the “Plan”).

Grant Date:                                 

Name of Holder:                                 

Holder’s Social Security Number:                                 

Number of Stock Units Covered by Grant:                                

This Stock Unit grant is subject to all of the terms and conditions described in this Agreement and in the Plan, a copy of which is available for your review on the Company’s intranet or upon request to Human Resources. You should carefully review the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent with the terms of the Plan.

Company:
	(Signature)
	Title:

Attachment

This is not a stock certificate or a negotiable instrument.

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Attachment

ITC^DELTACOM, INC.

EXECUTIVE STOCK INCENTIVE PLAN

COMMON STOCK UNIT AGREEMENT

(SERIES B PREFERRED STOCK UNIT AGREEMENT, AS AMENDED)

Stock Unit Transferability	This grant is an award of stock units in the number of units set forth on the cover sheet, subject to the vesting conditions described below (the “Stock Units”). Your Stock Units may not be transferred, assigned, pledged or hypothecated, whether by operation of law or otherwise, nor may the Stock Units be made subject to execution, attachment or similar process.
Definitions	Capitalized terms not defined in this Agreement are defined in the Plan, and have the meanings set forth in the Plan. The following additional term has the meaning provided below: “Service” means service by you as an employee of the Company or one of its Affiliates. A change in your position or duties will not result in interrupted or terminated Service so long as you continue to be an employee of the Company or one of its Affiliates.
Vesting	You will vest in the Stock Units in accordance with the terms and conditions contained in your Employment Agreement and the Plan. The resulting aggregate number of vested Stock Units will be rounded down to the nearest whole number of Stock Units. You may not vest in more than the number of Stock Units covered by this grant.
Delivery of Stock Pursuant to Vested Stock Units	Delivery of the shares of Stock represented by your vested Stock Units will be made in accordance with your deferral election attached hereto as Exhibit A, which reflects the deferral election that was in place with respect to your Preferred Stock Unit Agreement prior to its amendment. You will have no further rights with regard to a Stock Unit once the share of Stock relating to the Stock Unit has been delivered.
Forfeiture of Unvested Stock Units	Unvested Stock Units will be forfeited, if at all, in accordance with the terms of the Plan and your Employment Agreement.
Withholding Taxes	You agree, as a condition of this grant, that you will make acceptable arrangements to pay in cash any withholding or

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	other taxes that may be due as a result of vesting in Stock Units or your acquisition of Stock under this grant. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to this grant, the Company will have the right to: (i) require that you make such payments to the Company; (ii) withhold such amounts from other payments due to you from the Company or any Affiliate; or (iii) cause an immediate forfeiture of shares of Stock represented by Stock Units granted pursuant to this Agreement in an amount equal to the withholding or other taxes due.
Retention Rights	This Agreement does not give you the right to be retained by the Company (or any Affiliates) in any capacity. The Company (and any Affiliate) reserve the right to terminate your Service at any time and for any reason.
Stockholder Rights	You do not have any of the rights of a stockholder with respect to the Stock Units unless and until the Stock relating to the Stock Units has been delivered to you. You will, however, be entitled to receive, at the same time as the Company’s payment of a cash dividend on outstanding Stock, a cash payment for each Stock Unit that you hold as of the record date for such dividend equal to the per-share dividend paid on the Stock.
Adjustments	In the event of a Capitalization Change or Corporate Transaction, your Stock Units will be adjusted, if at all, in accordance with the terms of the Plan.
Applicable Law	This attachment (including the exhibit attached hereto) and its cover sheet (collectively, this “Agreement”) will be interpreted and enforced under the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
The Plan	The text of the Plan is incorporated in this Agreement by reference. This Agreement, the Plan and your Employment Agreement constitute the entire understanding between you and the Company regarding this grant of Stock Units. Any prior agreements, commitments or negotiations concerning this grant are superseded.

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EX-10.22

Exhibit 10.22

ITC^DELTACOM, INC.

EXECUTIVE STOCK INCENTIVE PLAN

COMMON STOCK UNIT AGREEMENT

(DEFERRED COMPENSATION AGREEMENT, AS AMENDED)

ITC^DeltaCom, Inc., a Delaware corporation (the “Company”), has previously granted              warrants exercisable for shares of the Company’s 8% Series C Convertible Redeemable Preferred Stock, $.01 par value, and shares of the Company’s Common Stock, $0.01 par value (the “Stock”), to the individual named below as holder pursuant to a Warrant Agreement dated as of July 26, 2005, as amended as of December 21, 2005 (the “Warrant Agreement”) between the Company and Mellon Investor Services LLC, as Warrant Agent, and deferred pursuant to a Deferred Compensation Agreement dated as of                      between the Company and the individual named below as the Holder (the “Deferred Compensation Agreement”). In connection with the recapitalization of the Company effective as of July 31, 2007, the Company hereby amends and replaces the Warrant Agreement and the Deferred Compensation Agreement with this agreement and hereby converts the warrants described above into stock units relating to shares of the Stock, subject to the vesting conditions referred to in the attachment. Additional terms and conditions of the grant are set forth in this cover sheet, in the attachment, in the individual’s employment agreement, dated as of                      and as amended as of                      (as further amended from time to time, the “Employment Agreement”), and in the ITC^DeltaCom, Inc. Executive Stock Incentive Plan (the “Plan”).

Grant Date:                                 

Name of Holder:                                 

Holder’s Social Security Number:                                 

Number of Stock Units Covered by Grant:                                 

This Stock Unit grant is subject to all of the terms and conditions described in this Agreement and in the Plan, a copy of which is available for your review on the Company’s intranet or upon request to Human Resources. You should carefully review the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent with the terms of the Plan.

Company:
	(Signature)
	Title:

Attachment

This is not a stock certificate or a negotiable instrument.

A-1

Attachment

ITC^DELTACOM, INC.

EXECUTIVE STOCK INCENTIVE PLAN

COMMON STOCK UNIT AGREEMENT

(DEFERRED COMPENSATION AGREEMENT, AS AMENDED)

Stock Unit Transferability	This grant is an award of stock units in the number of units set forth on the cover sheet, subject to the vesting conditions described below (the “Stock Units”). Your Stock Units may not be transferred, assigned, pledged or hypothecated, whether by operation of law or otherwise, nor may the Stock Units be made subject to execution, attachment or similar process.
Definitions	Capitalized terms not defined in this Agreement are defined in the Plan, and have the meanings set forth in the Plan. The following additional term has the meaning provided below: “Service” means service by you as an employee of the Company or one of its Affiliates. A change in your position or duties will not result in interrupted or terminated Service so long as you continue to be an employee of the Company or one of its Affiliates.
Vesting	You will vest in the Stock Units in accordance with the terms and conditions contained in your Employment Agreement and the Plan. The resulting aggregate number of vested Stock Units will be rounded down to the nearest whole number of Stock Units. You may not vest in more than the number of Stock Units covered by this grant.
Delivery of Stock Pursuant to Vested Stock Units	Delivery of the shares of Stock represented by your vested Stock Units will be made in accordance with your deferral election attached hereto as Exhibit A, which reflects the deferral election that was in place with respect to your warrants prior to the amendment of your Deferred Compensation Agreement. You will have no further rights with regard to a Stock Unit once the share of Stock relating to the Stock Unit has been delivered.
Forfeiture of Unvested Stock Units	Unvested Stock Units will be forfeited, if at all, in accordance with the terms of the Plan and your Employment Agreement.

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Withholding Taxes	You agree, as a condition of this grant, that you will make acceptable arrangements to pay in cash any withholding or other taxes that may be due as a result of vesting in Stock Units or your acquisition of Stock under this grant. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to this grant, the Company will have the right to: (i) require that you make such payments to the Company; (ii) withhold such amounts from other payments due to you from the Company or any Affiliate; or (iii) cause an immediate forfeiture of shares of Stock represented by Stock Units granted pursuant to this Agreement in an amount equal to the withholding or other taxes due.
Retention Rights	This Agreement does not give you the right to be retained by the Company (or any Affiliates) in any capacity. The Company (and any Affiliate) reserve the right to terminate your Service at any time and for any reason.
Stockholder Rights	You do not have any of the rights of a stockholder with respect to the Stock Units unless and until the Stock relating to the Stock Units has been delivered to you. You will, however, be entitled to receive, at the same time as the Company’s payment of a cash dividend on outstanding Stock, a cash payment for each Stock Unit that you hold as of the record date for such dividend equal to the per-share dividend paid on the Stock.
Adjustments	In the event of a Capitalization Change or Corporate Transaction, your Stock Units will be adjusted, if at all, in accordance with the terms of the Plan.
Applicable Law	This attachment (including the exhibit attached hereto) and its cover sheet (collectively, this “Agreement”) will be interpreted and enforced under the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
The Plan	The text of the Plan is incorporated in this Agreement by reference. This Agreement, the Plan and your Employment Agreement constitute the entire understanding between you and the Company regarding this grant of Stock Units. Any prior agreements, commitments or negotiations concerning this grant are superseded.

A-3