Icg Communications Inc/DE, et al. – ‘8-K’ for 12/19/01 – EX-2.3

On:  Thursday, 12/20/01   ·   For:  12/19/01   ·   Accession #:  1021408-1-511570   ·   File #s:  1-11052, 1-11965, 1-16223, 1-16225, 1-16227

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         3     20K 
 2: EX-2.2      Joint Plan of Reorganization                         115    395K 
 3: EX-2.3      Disclosure Statement                                 165    669K 

EX-2.3   —   Disclosure Statement
Exhibit Table of Contents

EX-2.3
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                                                                     Exhibit 2.3

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE DISTRICT OF DELAWARE  

- - - - - - - - - - - - - - - -   x                                             
          :           Chapter 11
In re:                            :                                             
:           
ICG COMMUNICATIONS, INC., et      :     Case No. 00-4238 (PJW)                  
--                          
al.,                             :                                            
--                               :                                            
Debtors.                          :      Jointly Administered                   
x           
- - - - - - - - - - - - - - -                                                   

DISCLOSURE STATEMENT WITH RESPECT TO  
JOINT PLAN OF REORGANIZATION OF ICG COMMUNICATIONS, INC.  
AND ITS AFFILIATED DEBTORS AND DEBTORS IN POSSESSION  
----------------------------------------------------  

David S. Kurtz                                                                  
Timothy R. Pohl                                                                 
Rena M. Samole                                                                  
SKADDEN, ARPS, SLATE, MEAGHER                                                   
& FLOM (ILLINOIS)                                                       
333 West Wacker Drive                                                           
Chicago, Illinois  60606-1285                                                   
(312) 407-0700                                                                  

- and -                                                               

Gregg M. Galardi (I.D. No. 2991)                                                
SKADDEN, ARPS, SLATE, MEAGHER                                                   
& FLOM LLP                                                            
One Rodney Square                                                               
P.O. Box 636                                                                    
Wilmington, Delaware 19899                                                      
(302) 651-3000                                                                  

Counsel for Debtors and Debtors in Possession                                   
Dated: December 19, 2001                                                        

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DISCLAIMER  

        THE INFORMATION CONTAINED IN THIS DISCLOSURE STATE  MENT IS INCLUDED
HEREIN FOR PURPOSES OF SOLICITING ACCEPTANCES OF THE JOINT PLAN OF              
REORGANIZATION (THE "PLAN") OF ICG COMMUNICA  TIONS, INC. AND ITS AFFILIATED    
DEBTORS AND DEBTORS IN POSSESSION AND MAY NOT BE RELIED UPON FOR ANY PURPOSE    
OTHER THAN TO DETER  MINE HOW TO VOTE ON THE PLAN.  NO PERSON MAY GIVE ANY      
INFORMA  TION OR MAKE ANY REPRESENTATIONS, OTHER THAN THE INFORMATION AND       
REPRESENTATIONS CONTAINED IN THIS DISCLOSURE STATEMENT, REGARDING THE PLAN OR   
THE SOLICITATION OF ACCEPTANCES OF THE PLAN.                                    

    ALL CREDITORS ARE ADVISED AND ENCOURAGED TO READ THIS DISCLOSURE
STATEMENT AND THE PLAN IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THE  
PLAN.  PLAN SUMMARIES AND STATE  MENTS MADE IN THIS DISCLOSURE STATEMENT ARE    
QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE PLAN AND THE EXHIBITS AND       
SCHEDULES ANNEXED TO THE PLAN AND THIS DISCLOSURE STATEMENT.  THE STATE  MENTS  
CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE ONLY AS OF THE DATE HEREOF, AND 
THERE CAN BE NO ASSURANCE THAT THE STATEMENTS CONTAINED HEREIN WILL BE CORRECT  
AT ANY TIME AFTER THE DATE HEREOF.                                              

    THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCOR  DANCE WITH
SECTION 1125 OF THE UNITED STATES BANKRUPTCY CODE AND RULE 3016 OF THE FEDERAL  
RULES OF BANKRUPTCY PROCEDURE AND NOT NECESSARILY IN ACCORDANCE WITH FEDERAL OR 
STATE SECURITIES LAWS OR OTHER NON-BANKRUPTCY LAW.  THIS DISCLOSURE STATEMENT   
HAS BEEN NEITHER APPROVED NOR DISAPPROVED BY THE SECURITIES AND EXCHANGE        
COMMISSION (THE "SEC"), NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF 
THE STATEMENTS CONTAINED HEREIN. PERSONS OR ENTITIES TRADING IN OR OTHERWISE    
PURCHASING, SELLING OR TRANSFERRING SECURITIES OR CLAIMS OF ICG COMMUNICATIONS, 
INC. OR ANY OF THE AFFILIATED DEBTORS AND DEBTORS-IN-POSSESSION IN THESE CASES  
SHOULD EVALUATE THIS DISCLOSURE STATEMENT AND THE PLAN IN LIGHT OF THE PURPOSE  
FOR WHICH THEY WERE PREPARED.                                                   

       AS TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS AND OTHER ACTIONS OR
THREATENED ACTIONS, THIS DISCLOSURE STATEMENT SHALL NOT CONSTITUTE OR BE        
CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY, STIPULATION OR WAIVER, BUT  
RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS.  THIS DISCLOSURE         
STATEMENT                                                                       

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SHALL NOT BE ADMISSIBLE IN ANY NON-BANKRUPTCY PROCEEDING NOR SHALL IT BE
CONSTRUED TO BE CONCLUSIVE ADVICE ON THE TAX, SECURI TIES OR OTHER LEGAL
    EFFECTS OF THE PLAN AS TO HOLDERS OF CLAIMS AGAINST, OR EQUITY INTERESTS IN,
 ICG COMMUNICATIONS, INC. OR ANY OF THE AFFILIATED DEBTORS AND DEBTORS-IN-
POSSESSION IN THESE CASES.                                              

--------------------------------------------------------------------------------
     THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED BY THE BANKRUPTCY
COURT AT THIS TIME.  A HEARING TO CONSIDER THE ADEQUACY OF THIS DISCLOSURE      
STATEMENT UNDER SECTION 1125 OF THE BANKRUPTCY CODE HAS BEEN SET BY THE         
BANKRUPTCY COURT FOR FEBRUARY 1, 2002 AT 2:00 P.M.  THE DEBTORS RESERVE THE     
RIGHT TO MODIFY OR SUPPLEMENT THIS DISCLOSURE STATEMENT PRIOR TO AND UP TO THE  
DATE OF SUCH HEARING.                                                           
--------------------------------------------------------------------------------

       CERTAIN PROVISIONS OF THE PLAN AND THE DISCLOSURE STATEMENT ARE THE
SUBJECT OF CONTINUING NEGOTIATIONS AMONG THE DEBTORS AND VARIOUS PARTIES, AND   
THUS MAY BE MODIFIED.                                                           

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OVERVIEW OF THE PLAN AND CHAPTER 11 CASES                                       

      The following introduction and summary is a general overview only,
which is qualified in its entirety by, and should be read in conjunction with,  
the more detailed discussions, information and financial statements and notes   
thereto appearing elsewhere in this Disclosure Statement and the Joint Plan of  
Reorganization of ICG Communications, Inc. and its affiliated debtors and       
debtors in possession (the "Plan").  All capitalized terms not defined in this  
Disclosure Statement have the meanings ascribed to such terms in the Plan.  A   
copy of the Plan is annexed hereto as Appendix A.                               
      ----------

        This Disclosure Statement contains, among other things, descriptions
and summaries of provisions of the Plan being proposed by the Debtors (as       
defined herein) as filed with the Bankruptcy Court on December 19, 2001.        
Certain provisions of the Plan, and thus the descriptions and summaries         
contained herein, are the subject of continuing negotiations among the Debtors  
and various parties, have not been finally agreed upon, and may be modified.    

A.   Business Overview                                                          

ICG Communications, Inc. ("ICG") and its direct and indirect
subsidiaries (together with ICG, the "Company"), are a facilities-based         
nationwide communications provider that, based upon revenue and customer lines  
in service, are one of the largest competitive communications companies in the  
United States.  Specifically, the Company is focused on providing data and voice
services to Internet service providers, telecommunication carriers and corporate
customers.  In 2000, the Company had revenue of approximately $598.3 million.   

          The Debtors' operations are structured through two principal groups of
operating entities owned by the Debtors' ultimate parent corporation, ICG. The  
first group of operating companies is owned directly or indirectly by ICG       
Holdings, Inc. ("ICG Holdings"), including ICG Telecom Group, Inc. ("ICG        
Telecom" and, together with ICG Holdings and ICG Telecom's subsidiaries, the    
"Telecom Debtors"). The second group of operating companies is owned directly by
ICG Services, Inc. ("ICG Services"), including ICG Equipment, Inc. ("ICG        
Equipment") and ICG NetAhead, Inc. ("ICG NetAhead" and, together with ICG       
Services, ICG Equipment and ICG Mountain View, Inc., the "Services Debtors").   
The Telecom Debtors own significant network assets and are the primary providers
of telecom services to the Debtors' customers.  The Services Debtors also own   
significant network assets, which are primarily leased to and utilized by the   
Telecom Debtors in providing services to customers.                             

      As discussed more fully below, the Company experienced a liquidity
crisis in the latter part of 2000, which ultimately led to the commencement, on 
November 14, 2000 (the "Petition Date"), of the reorganization cases (the       
"Chapter 11 Cases") under Chapter 11 of the United States Bankruptcy Code for   
ICG and certain of ICG's direct and indirect subsidiaries (collectively, the    
"Debtors").   Prior to the Petition Date, the Debtors dramatically expanded     
their network facilities, resulting in the incurrence of significant costs and  
obligations, as well as certain operational difficulties associated with the    
deployment of new technology.  In the midst of this expansion, funding from the 
capital markets for the telecommunications industry became constricted, which   
prevented the Debtors from funding the                                          

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completion of their ongoing network expansion. As a result, the Debtors' balance
sheet was significantly over-leveraged relative to their existing operations,   
requiring a financial and operational restructuring that the Debtors concluded  
could best be achieved through the Chapter 11 reorganization process.           

B.   Operational Restructuring During the Chapter 11 Cases and Exploration of   
Strategic Alternatives                                                

          During the Chapter 11 Cases, the Company pursued two parallel paths in
an effort to maximize the value of the Company's businesses and assets for the  
benefit of the Company's constituen  cies.  First, the Company, assisted by its 
investment banker, Dresdner Kleinwort & Wasserstein, Inc. ("DrKW"), explored    
opportunities for a sale of all or part of the Company, as well as for new      
invest  ments in the Company.  Despite efforts in this regard, no third party   
made any committed proposal for a purchase, investment, or other transaction    
that the Debtors believed reflected the fair value of the Company's businesses. 

  Second, during the Chapter 11 Cases, the Company significantly
restructured its operations, refocused its business strategies, restructured    
arrangements with key third parties in the industry, and eliminated expenses.   
As a result of this operational restructuring, coupled with the restructuring of
Claims and Interests contemplated by the Plan, the Company believes that it will
be well positioned to compete successfully in its industry in the future.       

C.   General Structure of the Plan                                              

         The Plan is premised upon the strategic business plan for the Company
going forward prepared by ICG's management and financial advisors (the "Business
Plan").  The Business Plan is discussed in Section IV.I, and the accompanying   
                  ------------
pro forma financial projections through December 31, 2005 (the "Projections"),  
are set forth in Appendix E.  While the Company believes that the Business Plan 
----------                                    
and Projections are reasonable and appropriate, they include a number of        
assumptions that may differ from actual results and are subject to a number of  
risk factors.  See Section VI and Appendix E.                                   
----------     ----------                 

   The Plan provides for ICG's balance sheet to be restructured by
converting (i) the obligations to the holders of Secured Lender Claims to new   
secured debt of Reorganized ICG (the "New Secured Notes"), and (ii) General     
Unsecured Claims, which include the Claims of the holders of the publicly held  
unsecured debentures issued by various Debtors (the "Old Notes"), into newly    
issued common equity securities of Reorganized ICG (the "New Common Shares"),   
and Rights to purchase additional New Common Shares.  There will be no recovery 
for holders of existing preferred or common equity securities of the Company,   
whose Interests will be cancelled.                                              

     As discussed in Section V.G., under the Plan, one-hundred percent
------------                
(100%) of the New Common Shares to be distributed on the Effective Date (subject
to Dilution), will be distributed on a Pro Rata basis to holders of Allowed     
Claims in Class 5 (General Unsecured Claims).  As additional consideration,     
holders of Allowed Claims in Class 5 on the Rights Offering Record Date will    
receive Rights to purchase additional New Common Shares, on the terms and       
conditions described in Section                                                 
-------                         

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V.G.  The Rights Offering Record Date is the Confirmation Date or the date set  
----                                                                            
forth in the Confirmation Order. Holders of Claims in Class 5 that have not     
become Allowed Claims by the Rights Offering Record Date will not receive any   
Rights. The Rights will be tradeable for approximately thirty (30) days, and, if
fully subscribed, the Rights Offering will generate gross proceeds of $100      
million for the Company. These proceeds will be used to augment existing working
capital, and in part to reduce obligations under the New Secured Notes to be    
issued to holders of Secured Lender Claims under the Plan. As discussed in      
Section V.G., however, the Rights Offering is not underwritten and, accordingly,
------------                                                                    
there may or may not be any proceeds received by the Company from the Rights    
Offering.                                                                       

         In addition, the Plan is premised on substantive consolidation of the
Debtors for procedural purposes only. This means that, for purposes of          
distribution under the Plan, the assets and liabilities of each Debtor are      
treated as assets and liabilities of a single entity.  See Section V.B.         
                                             --- -----------

D.   Summary of Treatment of Claims and Interests Under the Plan                

     As contemplated by the Bankruptcy Code, Administrative Claims and
Priority Tax Claims are not classified under the Plan.  Allowed Administrative  
Claims are to be paid in full on the Effective Date, or, for ordinary course    
Administrative Claims, when such claims become due.  See Section V.C for a      
                                             -----------
summary of the treatment proposed under the Plan for Administrative Claims and  
Priority Tax Claims.                                                            

        The estimated amount of non-ordinary course Administrative Claims to
be incurred during the Chapter 11 Cases (which are primarily comprised of       
professional fees and which will be paid, in part, during the Chapter 11 Cases  
pursuant to Bankruptcy Court orders), is estimated to be $16.1 million.  The    
estimated amount of Priority Tax Claims is $7.1 million.                        

      The table below summarizes the classification and treatment of the
prepetition Claims and Interests under the Plan.  For certain classes of Claims,
estimated percentage recoveries are also set forth below.  Estimated percentage 
recoveries have been calculated based upon a number of assumptions, including   
the value ascribed to the New Securities to be issued under the Plan, for       
purposes of the Plan, as discussed below and in Section IX.                     
                          ----------

          Based, in part, on information provided to it by the Company, DrKW has
evaluated the enterprise value of the Company.  DrKW's valuation establishes the
value of the Company on a going concern basis as between $350 million and $500  
million.  This valuation of the Company results in a valuation of the New Common
Shares to be issued under the Plan, in the aggregate, between approxi  mately   
$136.5 million and $286.5 million, which is derived by subtracting from the     
Company's enterprise value the projected funded debt on the pro forma balance   
sheet for the Company on the Effective Date, as set forth in Appendix E.  The   
                                                    ----------
valuation is based on numerous assumptions, including, among other things, an   
assumption that the operating results projected for Reorganized ICG will be     
achieved in all material respects, including revenue growth and improvements in 
operating margins, earnings, and cash flow.  The valuation assumptions also     
consider, among other matters, (i) market valuation information concerning      
certain publicly traded securities of certain other companies that are          

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considered relevant, (ii) certain general economic and industry information     
considered relevant to the business of Reorganized ICG, and (iii) such other    
investigations and analysis deemed necessary or appropriate.  The valuation     
assumptions are not a prediction or reflection of post-Confirmation trading     
prices of the New Common Shares or any other New Securities.  Such securities   
may trade at substantially higher or lower prices because of a number of        
factors, including those discussed in Section VI.  The trading prices of        
      ----------
securities issued under a plan of reorganization are subject to many            
unforeseeable circumstances and therefore cannot be predicted.                  

  Although the Company believes that the terms of the Rights are
favorable and thus that they provide significant additional consideration to    
holders of General Unsecured Claims, for purposes of estimating the percentage  
recoveries set forth below, the Rights have not been considered. In addition,   
for certain Classes of Claims, the actual amounts of Allowed Claims could       
materially exceed or could be materially less than the estimated amounts shown  
in the table that follows. The Debtors do not anticipate having reviewed and    
fully analyzed all Proofs of Claim filed in these cases by the Confirmation     
Date. Estimated Claim amounts for each Class set forth below are based upon the 
Debtors' review of their books and records and of certain Proofs of Claim, and  
include estimates of a number of Claims that are contingent, disputed, and/or   
unliquidated. With respect to Class 5, if the aggregate amount of General       
Unsecured Claims that are ultimately Allowed exceeds the Debtors' estimate, the 
estimated percentage recovery set forth below for holders of Claims in Class 5  
would be reduced. Accordingly, for these reasons, no representation can be or is
being made with respect to whether the estimated percentage recoveries shown in 
the table below for Class 5 will actually be realized by the holders of Allowed 
Claims in that Class.                                                           

Class Description                  Treatment Under Plan               
-----------------                  --------------------               

    Class 1 - Other Priority           Class 1 consists of all Claims entitled
             Claims                   to priority pursuant to section 507(a)
                                 of the Bankruptcy Code other than
                                     Priority Tax Claims or Administrative
       Claims.

Estimated Allowed Claims:          Under the Plan, on or as soon as   
     Approximately $0.2 million         reasonably practicable after, the latest
                                      of (i) the Distribution Date, (ii) the
                                  date such Class 1 Claim becomes an
                                        Allowed Class 1 Claim, or (iii) the date
                                  such Class 1 Claim becomes payable
                                   pursuant to any agreement between a
                                     Debtor and the holder of such Class 1
                                        Claim, each holder of an Allowed Class 1
                                   Claim will receive in full satisfac
                                       tion, settlement, release and discharge
                                   of and in exchange for such Allowed
                                   Class 1 Claim (x) Cash equal to the
                                      unpaid portion of such Allowed Class 1
                                       Claim or (y) such other treatment as to
                                    which a Debtor and such holder shall
                                    have agreed upon in writing. Class 1
                                       Claims are Unimpaired and therefore not
                                       entitled to vote on the Plan. Estimated

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Class Description                  Treatment Under Plan               
-----------------                  --------------------               

                          Percentage Recovery: 100%.

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Class Description                  Treatment Under Plan               
-----------------                  --------------------               

    Class 2 - Other Secured            Class 2 consists of separate subclasses
           Claims                   of claims that are secured by a lien
                                        upon property in which the Estate has an
                                       interest, to the extent of the value of
Estimated Allowed Claims:          the Claim holders' interest in the 
   Approximately $4.9 million.        Estate's interest in such property, as
                                       determined pursuant tosection 506(a) of
                                the Bankruptcy Code, against the
                                      Debtors, other than the Secured Lender
                                        Claims included in Class 3 below ("Other
                                  Secured Claims"). Each subclass is
                                     deemed to be a separate class for all
                                   purposes under the Bankruptcy Code.

                                 On the Effective Date, the legal,
                                   equitable and contractual rights of
                                   holders of an Allowed Class 2 Claim
                                   shall be Reinstated, subject to the
                                       provisions of Article VIII of the Plan.
                                        ------------
                                     The Debtors' failure to object to any
                                     such Class 2 Claims in the Chapter 11
                                       Cases shall be without prejudice to the
                                        rights of ICG or the Reorganized Debtors
                                      to contest or otherwise defend against
                                        such Claim in the appropriate forum when
                                 and if such Claim is sought to be
                                   enforced by the Other Secured Claim
                                        holders. Notwithstanding section 1141(c)
                              or any other provi sion of the
                                      Bankruptcy Code, all prepetition liens
                                       on property of any Debtor held by or on
                                 behalf of the Other Secured Claim
                                   holders with respect to such Claims
                                    shall survive the Effective Date and
                               continue in accordance with the
                                   contractual terms of the underlying
                                  agreements with such Claim holders
                                        until, as to each such Claim holder, the
                                    Allowed Claims of such Other Secured
                                      Claim holder are paid in full, subject
                                        to the provisions of Article VIII of the
                                                      ------------
                                      Plan. Nothing in the Plan or elsewhere
                             shall preclude the Debtors or
                                        Reorganized Debtors from challenging the
                                   validity of any alleged lien on any
                                      asset of a Debtor or the value of such
                              collateral. Class 2 Claims are
                                        Unimpaired and therefore not entitled to
                                      vote on the Plan. Estimated Percentage
               Recovery: 100%.

   Class 3 - Secured Lender           Class 3 consists of all Secured Claims
             Claims                   of the Prepetition Secured Lenders (as
                                     defined herein) arising under or as a
                                 result of the Pre-Petition Credit
  Allowed Claims:                    Facility, which Claims will be deemed
$84.6 million.                     Allowed pursuant to the Plan in the
                                      amount of approximately $84.6 million.

                                      Under the Plan, on the Effective Date,
                                        each holder of an Allowed Class 3 Claim,
                                 in full satisfaction, settlement,
        release,

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Class Description                  Treatment Under Plan               
-----------------                  --------------------               

                                    and discharge of and in exchange for
                                        such Allowed Class 3 Claim, will receive
                                      on or as soon as practicable after the
                                        Distribution Date, its Pro Rata share of
                                     one-hundred percent (100%) of the New
                                     Secured Notes. If Class 3 accepts the
                                      Plan, the New Secured Notes shall have
                                     the terms and conditions set forth on
                                      Plan Exhibit F(1). If Class 3 does not
                      ------------
                                      accept the Plan, the New Secured Notes
                                       shall have the terms and conditions set
                                  forth on Plan Exhibit F(2) and the
                                        ------------
                                      Debtors shall seek to confirm the Plan
                                  pursuant to section 1129(b) of the
                                        Bankruptcy Code with respect to Class 3.
                                        Class 3 Claims are Impaired and entitled
                              to vote on the Plan. Estimated
                          Percentage Recovery: 100%.

Class 4 - Convenience Claims       Class 4 consists of any claim that 
                                     otherwise would be an Allowed Class 5
                                      Claim against the Debtors in an amount
    Estimated Allowed Claims:          (i) equal to or less than $500, or (ii)
   Approximately $0.4 million.        greater than $500 but which is reduced
                                 to $500 by an irrevocable written
                                    election of the holder of such Claim
                                     made on a validly executed and timely
                 delivered ballot.

                                      Under the Plan, on the Effective Date,
                                       each holder of an Allowed Class 4 Claim
                                        will receive cash equal to the amount of
                                  such Allowed Claim (as reduced, if
                                      applicable, pursuant to an election by
                                       the holder thereof). Class 4 Claims are
                                    Impaired and entitled to vote on the
                                    Plan. Estimated Percentage Recovery:
     100%.

  Class 5 - General                  Class 5 consists of any Claim against
 Unsecured Claims         the Debtors that is not an
                                  Administrative Claim, Priority Tax
                                  Claim, Other Priority Claim, Other
Estimated Allowed Claims:          Secured Claim, Subordinated Claim, 
 Approximately $2.4 billion.        Secured Lender Claim, or Convenience
      Claim.

                                      Under the Plan, on the Effective Date,
                                       each holder of an Allowed Class 5 Claim
                                   will receive, in full satisfaction,
                                        settlement, release and discharge of and
                                    in exchange for such Allowed Class 5
                                        Claim: (i) its Pro Rata share of 100% of
                                the New Common Shares issued and
                                    outstanding as of the Effective Date
                                    (subject to Dilution); plus (ii) for
                                       each holder of an Allowed Class 5 Claim
                                      as of the Rights Offering Record Date,
                                   on the Rights Offering Commencement
                Date, its Rights

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Class Description                  Treatment Under Plan               
-----------------                  --------------------               

                                     Offering Pro Rata Share of the Rights
                                   Offering Distribution Pool. Class 5
                                      Claims are Impaired under the Plan and
                                       entitled to vote on the Plan. Estimated
                                Percentage Recovery: 5.7%-11.9%.

  Class 6 - ICG Interests and        Class 6 consists of all ICG Interests
   Subordinated Claims                and all Subordinated Claims. Under the
                                   Plan, the holders of such Claims or
                                     Interests shall not receive or retain
                                        any property on account of such Claim or
                                        Interests. On the Effective Date, all of
                                 the ICG Interests shall be deemed
                                   cancelled and extinguished. Class 6
                                     Interests and Subordinated Claims are
                            Impaired and will receive no
                                   distribution under the Plan and are
                                       therefore deemed to reject the Plan and
                                     are not entitled to vote on the Plan.
                                  Estimated Percentage Recovery: 0%.

     THE DEBTORS BELIEVE THAT THE PLAN PROVIDES THE BEST RECOVERIES POSSIBLE FOR
HOLDERS OF CLAIMS AGAINST THE DEBTORS AND THUS STRONGLY RECOMMEND THAT YOU VOTE 
                                -------- ---------
TO ACCEPT THE PLAN.                                                             
------                                                                    

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TABLE OF CONTENTS 
----------------- 

                                                        [Enlarge/Download Table]

                                                                                   Page
                                                                                   ----
                                                                                       
I. INTRODUCTION.....................................................................  1

II.  PLAN VOTING INSTRUCTIONS AND PROCEDURES........................................  2
       A.   Definitions.............................................................  2
       B.   Notice to Holders of Claims and Interests...............................  2
       C.   Solicitation Package....................................................  3
       D.   Voting Procedures, Ballots and Voting Deadline..........................  3
       E.   Confirmation Hearing and Deadline for Objections to Confirmation........  4

III. HISTORY AND STRUCTURE OF THE DEBTORS...........................................  4
       A.   Overview of Business Operations.........................................  4
            1.   Description of the Company's Businesses............................  4
            2.   History............................................................  6
            3.   Prepetition Financial Results......................................  7
       B.   Capital Structure of the Company........................................ 10
            1.   Prepetition Equity................................................. 10
            2.   Material Prepetition Debt Obligations.............................. 10
       C.   Corporate Structure of the Company...................................... 11
            1.   Current Corporate Structure........................................ 11
            2.   Board of Directors................................................. 11
            3.   Senior Officers.................................................... 13
       D.   Events Leading to Commencement of the Chapter 11 Cases.................. 14

IV.  CHAPTER 11 CASES............................................................... 15
       A.   Continuation of Business; Stay of Litigation............................ 15
       B.   First Day Orders........................................................ 15
       C.   Debtor in Possession Financing.......................................... 16
            1.   The DIP Facility................................................... 16
            2.   Authorization to Use Cash Collateral............................... 17
            3.   Exit Financing..................................................... 17
       D.   Appointment of Creditors' Committee..................................... 17
       E.   Other Material Relief Obtained During the Chapter 11 Cases.............. 18
            1.   Employee Retention Program......................................... 18
            2.   Senior Employment Agreements; Chief Executive Officer Agreement.... 18
            3.   Extension of Time to Assume or Reject Unexpired Leases............. 19
            4.   Extension of Exclusive Periods..................................... 19
            5.   Settlement with Qwest Communications Corporation................... 19
            6.   Settlement and Assumption with Respect to Corporate Headquarters... 20

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          7.   De Minimis Asset Sale Procedure...................................  22
     F.   Settlements with Significant Creditors.................................  22
          1.   Lucent............................................................  22
          2.   Cisco.............................................................  23
     G.   Summary of Claims Process and Bar Date.................................  23
          1.   Schedules and Statements of Financial Affairs.....................  23
          2.   Claims Bar Date and Proofs of Claim...............................  23
     H.   Summary of Material Litigation Matters.................................  24
          1.   Shareholder Suits.................................................  24
          2.   ICG Funding Preferred Shareholders Suit...........................  24
     I.   Development and Summary of The Business Plan...........................  25
          1.   Services to be Offered by Reorganized ICG.........................  25
          2.   Geographic Footprint..............................................  27
          3.   Network and Facilities............................................  28

V. SUMMARY OF THE PLAN OF REORGANIZATION.........................................  29
     A.   Overall Structure of the Plan..........................................  29
     B.   Substantive Consolidation..............................................  30
     C.   Classification and Treatment of Claims and Interests...................  32
          1.   Treatment of Unclassified Claims Under the Plan...................  33
          2.   Treatment of Classified Claims and Interests Under the Plan.......  34
          3.   Reservation of Rights Regarding Claims............................  36
     D.   Distributions under the Plan...........................................  36
          1.   Distributions for Claims Allowed as of the Effective Date.........  37
          2.   Resolution and Treatment of Disputed, Contingent, and                 
               Unliquidated Claims and Distributions with Respect Thereto........  39
     E.   Dissolution of the Creditors' Committees...............................  40
          1.   Creditors' Committee..............................................  40
          2.   Claims Resolution Committee.......................................  40
     F.   Post-Consummation Operations of the Debtors............................  42
          1.   Continued Corporate Existence.....................................  42
          2.   Cancellation of Old Securities and Agreements.....................  42
          3.   Certificates of Incorporation and By-laws.........................  42
          4.   Restructuring Transactions........................................  42
     G.   Summary of Securities to Be Issued in Connection with the Plan.........  43
          1.   New Common Shares.................................................  43
          2.   Rights Offering...................................................  43
          3.   New Secured Notes.................................................  46
          4.   Registration Rights Agreement.....................................  46
     H.   Summary of Releases under the Plan.....................................  47
          1.   Releases by Debtors...............................................  47

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            2.   Release by Holders of Claims and Interests......................... 47
            3.   Injunction Related to Releases..................................... 47
       I.   Compensation and Benefit Programs....................................... 48
       J.   Directors And Officers of Reorganized Debtors........................... 49
            1.   Appointment........................................................ 49
            2.   Terms.............................................................. 49
            3.   Vacancies.......................................................... 49
            4.   Treatment of Director and Officer Indemnification Obligations         
                 Under the Plan..................................................... 49
       K.   Revesting of Assets..................................................... 50
       L.   Preservation of Rights of Action........................................ 50
       M.   Other Matters........................................................... 50
            1.   Treatment of Executory Contracts and Unexpired Leases.............. 50
            2.   Administrative Claims.............................................. 52
            3.   Professional Fee Claims............................................ 52
            4.   Withholding and Reporting Requirements............................. 53
            5.   Setoffs............................................................ 53
       N.   Confirmation and/or Consummation........................................ 53
            1.   Requirements for Confirmation of the Plan.......................... 53
            2.   Conditions to Confirmation and Consummation........................ 55
       O.   Effects of Confirmation................................................. 56
            1.   Binding Effect..................................................... 56
            2.   Discharge of the Debtors........................................... 56
            3.   Permanent Injunction............................................... 57
            4.   Exculpation and Limitation on Liability; Indemnity................. 57
       P.   Retention of Jurisdiction............................................... 58

VI.  CERTAIN FACTORS TO BE CONSIDERED............................................... 60
       A.   General Considerations.................................................. 60
       B.   Certain Bankruptcy Considerations....................................... 60
       C.   Inherent Uncertainty of Financial Projections........................... 60
       D.   Lack of Established Market for the New Securities....................... 61
       E.   Restricted Resale of the New Securities................................. 61
       F.   Telecommunications Competition.......................................... 61
       G.   Government Regulation................................................... 62
       H.   Reliance on Key Personnel............................................... 62

VII.  APPLICABILITY OF FEDERAL AND OTHER SECURITIES LAWS............................ 62
       A.   Offer and Sale of New Securities, Pursuant to the Plan:  Bankruptcy        
            Code Exemption from Registration Requirements........................... 63
       B.   Subsequent Transfers of New Securities.................................. 63

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            1.   Federal Securities Laws: Section 1145(c) of the Bankruptcy Code...  63
            2.   Subsequent Transfers of New Common Shares Under State                 
                 Securities Laws...................................................  64

VIII. INCOME TAX CONSEQUENCES OF THE PLAN..........................................  64
       A.   Federal Income Tax Consequences to the Debtors.........................  65
            1.   Cancellation of Indebtedness Income...............................  65
            2.   Utilization of Net Operating Loss Carryovers......................  66
            3.   Federal Alternative Minimum Tax...................................  67
       B.   Federal Income Tax Consequences to Claim Holders.......................  67
            1.   United States Federal Income Tax Consequences.....................  67
            2.   Non-United States Persons.........................................  69
            3.   Information Reporting and Backup Withholding......................  69
       C.   Importance of Obtaining Professional Tax Assistance....................  70

IX.  FEASIBILITY OF THE PLAN AND BEST INTERESTS OF CREDITORS.......................  70
       A.   Feasibility of the Plan................................................  70
       B.   Acceptance of the Plan.................................................  72
       C.   Best Interests Test....................................................  72
       D.   Liquidation Analysis...................................................  73
       E.   Valuation of the Reorganized Debtors...................................  73
       F.   Application of the "Best Interests" of Creditors Test to the               
            Liquidation Analysis and the Valuation.................................  74
       G.   Confirmation Without Acceptance of All Impaired Classes: The               
            "Cramdown" Alternative.................................................  75

X.  ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN......................  76
       A.   Alternative Plan(s) of Reorganization..................................  76
       B.   Liquidation under Chapter 7 or Chapter 11..............................  76

XI. THE SOLICITATION; VOTING PROCEDURE.............................................  77
       A.   Parties in Interest Entitled to Vote...................................  77
       B.   Classes Impaired under the Plan........................................  77
       C.   Waivers of Defects, Irregularities, Etc................................  77
       D.   Withdrawal of Ballots; Revocation......................................  78
       E.   Further Information; Additional Copies.................................  78

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TABLE OF APPENDICES 

Appendix                                 Name                         
--------                                 ----                         

 Appendix A          Joint Plan of Reorganization of ICG Communications,
Inc., et al.                  

Appendix B          Organization Structure of Company                 

B-1          Existing Organization Structure of Debtors 

            B-2          Chart Depicting Anticipated Corporate Structure Changes

            B-3          Organization Structure of Reorganized Debtors After the
Effective Date                

Appendix C          Election Form for Rights Offering                 

Appendix D          Liquidation Analysis                              

Appendix E          Pro Forma Financial Projections                   

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I.  INTRODUCTION  

  ICG Communications, Inc. ("ICG") and certain of its direct and
indirect subsidiaries that are also debtors and debtors-in-possession (the      
"Subsidiary Debtors") in the above-referenced Chapter 11 Cases (collectively,   
the "Debtors") submit this disclosure statement (the "Disclosure Statement")    
pursuant to section 1125 of the Bankruptcy Code, for use in the solicitation of 
votes on the Joint Plan of Reorganization of ICG Communications, Inc. et al.    
(the "Plan") proposed by the Debtors and filed with the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court") on December 19,     
2001.  A copy of the Plan is annexed as Appendix A to this Disclosure Statement.
          ----------

          This Disclosure Statement sets forth certain information regarding the
Debtors' prepetition operating and financial history, the need to seek Chapter  
11 protection, significant events that are expected to occur during the Chapter 
11 Cases, and the anticipated organization, operations and financing of the     
Debtors upon successful emergence from Chapter 11 (the "Reorganized Debtors").  
This Disclosure Statement also describes terms and provisions of the Plan,      
including certain alternatives to the Plan, certain effects of confirmation of  
the Plan, certain risk factors associated with securities to be issued under the
Plan, and the manner in which distributions will be made under the Plan.  In    
addition, this Disclosure Statement discusses the confirmation process and the  
voting procedures that holders of Claims entitled to vote under the Plan must   
follow for their votes to be counted. Unless otherwise noted herein, all dollar 
amounts provided in this Disclosure Statement and in the Plan are given in      
United States Dollars.                                                          

     FOR A DESCRIPTION OF THE PLAN AND VARIOUS RISKS AND OTHER FACTORS
PERTAINING TO THE PLAN AS IT RELATES TO HOLDERS OF CLASS 3, 4 AND 5 CLAIMS,     
PLEASE SEE SECTION V OF THE DISCLOSURE STATEMENT, ENTITLED "SUMMARY OF THE PLAN 
---------                                                 
OF REORGANIZATION," AND SECTION VI OF THE DISCLOSURE STATEMENT, ENTITLED "      
----------                      
CERTAIN FACTORS TO BE CONSIDERED."                                              

         THIS DISCLOSURE STATEMENT CONTAINS SUMMARIES OF CERTAIN PROVISIONS OF
THE PLAN, CERTAIN STATUTORY PROVISIONS, CERTAIN DOCUMENTS RELATING TO THE PLAN, 
CERTAIN EVENTS EXPECTED TO OCCUR IN THE CHAPTER 11 CASES AND CERTAIN FINANCIAL  
INFORMATION.  ALTHOUGH THE DEBTORS BELIEVE THAT THE SUMMARIES OF THE PLAN AND   
RELATED DOCUMENT SUMMARIES ARE FAIR AND ACCURATE, SUCH SUMMARIES ARE QUALIFIED  
TO THE EXTENT THAT THEY DO NOT SET FORTH THE ENTIRE TEXT OF SUCH DOCUMENTS OR   
STATUTORY PROVISIONS. FACTUAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT
HAS BEEN PROVIDED BY THE DEBTORS' MANAGEMENT, EXCEPT WHERE OTHERWISE            
SPECIFICALLY NOTED.  THE DEBTORS DO NOT WARRANT OR REPRESENT THAT THE           
INFORMATION CONTAINED HEREIN, INCLUDING THE FINANCIAL INFORMATION, IS WITHOUT   
ANY MATERIAL INACCURACY OR OMISSION.                                            

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THE DEBTORS BELIEVE THAT THE PLAN WILL ENABLE THE DEBTORS TO
SUCCESSFULLY REORGANIZE AND ACCOMPLISH THE OBJECTIVES OF CHAPTER 11 AND THAT    
ACCEPTANCE OF THE PLAN IS IN THE BEST INTERESTS OF THE DEBTORS AND THE HOLDERS  
OF CLASS 3, 4 AND 5 CLAIMS.  THE DEBTORS URGE HOLDERS OF CLASS 3, 4 AND 5 CLAIMS
TO VOTE TO ACCEPT THE PLAN.                                                     

         FOR FURTHER INFORMATION AND INSTRUCTION ON VOTING TO ACCEPT OR REJECT
THE PLAN, SEE SECTION XI OF THE DISCLOSURE STATEMENT, ENTITLED "THE             
----------                                          
SOLICITATION; VOTING PROCEDURE."                                                

II.    PLAN VOTING INSTRUCTIONS AND PROCEDURES  

A.   Definitions                                                                

       Except as otherwise defined herein, capitalized terms not otherwise
defined in this Disclosure Statement have the meanings ascribed to them in the  
Plan.                                                                           

B.   Notice to Holders of Claims and Interests                                  

      This Disclosure Statement will be transmitted to holders of Claims
that are entitled under the Bankruptcy Code to vote on the Plan.  See Section V 
                                                                     ---------
for a discussion and listing of those holders of Claims that are entitled to    
vote on the Plan and those holders of Claims and Interests that are not entitled
to vote on the Plan.  The purpose of this Disclosure Statement is to provide    
adequate information to enable such Claim holders to make a reasonably informed 
decision with respect to the Plan prior to exercising their right to vote to    
accept or reject the Plan.                                                      

          The Debtors expect that the Bankruptcy Court will approve a Disclosure
Statement that will contain information of a kind and in sufficient and adequate
detail to enable such Claim holders to make an informed judgment with respect to
acceptance or rejection of the Plan.  A BANKRUPTCY COURT'S APPROVAL OF THIS     
DISCLOSURE STATEMENT (WHEN SUCH APPROVAL IS OBTAINED) DOES NOT CONSTITUTE EITHER
A GUARANTY OF THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN  
NOR AN ENDORSEMENT OF THE PLAN BY THE BANKRUPTCY COURT.                         

         ALL HOLDERS OF CLAIMS AGAINST THE DEBTORS ARE ENCOURAGED TO READ THIS
DISCLOSURE STATEMENT AND ITS APPENDICES CAREFULLY AND IN THEIR ENTIRETY BEFORE  
DECIDING TO VOTE EITHER TO ACCEPT OR TO REJECT THE PLAN. This Disclosure        
Statement contains important information about the Plan, considerations         
pertinent to acceptance or rejection of the Plan, and developments concerning   
the Chapter 11 Cases.                                                           

THIS DISCLOSURE STATEMENT IS THE ONLY DOCUMENT TO BE USED IN
CONNECTION WITH THE SOLICITATION OF VOTES ON THE PLAN.  No solicitation of votes

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may be made except after distribution of this Disclosure Statement, and no      
person has been authorized to distribute any information concerning the Debtors 
other than the information contained herein.                                    

        CERTAIN OF THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS
BY ITS NATURE FORWARD LOOKING AND CONTAINS ESTIMATES, ASSUMPTIONS AND           
PROJECTIONS THAT MAY BE MATERIALLY DIFFERENT FROM ACTUAL, FUTURE RESULTS.       
Except with respect to the projections set forth in Appendix E to be annexed    
                                  ----------
hereto (the "Projections") and except as otherwise specifically and expressly   
stated herein, this Disclosure Statement does not reflect any events that may   
occur subsequent to the date hereof and that may have a material impact on the  
information contained in this Disclosure Statement.  The Debtors do not intend  
to update the Projections; thus, the Projections will not reflect the impact of 
any subsequent events not already accounted for in the assumptions underlying   
the Projections.  Further, the Debtors do not anticipate that any amendments or 
supplements to this Disclosure Statement will be distributed to reflect such    
occurrences.  Accordingly, the delivery of this Disclosure Statement shall not  
under any circumstance imply that the information herein is correct or complete 
as of any time subsequent to the date hereof.                                   

        EXCEPT WHERE SPECIFICALLY NOTED, THE FINANCIAL INFORMATION CONTAINED
HEREIN HAS NOT BEEN AUDITED BY A CERTIFIED PUBLIC ACCOUNTING FIRM AND HAS NOT   
BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.      

C.   Solicitation Package                                                       

       The Debtors expect that when the Debtors solicit votes for the Plan
pursuant to this Disclosure Statement, the Debtors will send copies of (1) the  
Plan; (2) the notice of, among other things, the time for submitting Ballots to 
accept or reject the Plan, the date, time and place of the hearing to consider  
confirmation of the Plan and related matters, and the time for filing objections
to confirmation of the Plan (the "Confirmation Hearing Notice"); (3) if you are 
the holder of Claim(s) entitled to vote on the Plan, one or more Ballots (and   
return envelopes) to be used by you in voting to accept or to reject the Plan;  
and (4) if you are the holder of Claim(s) entitled to participate in the Rights 
Offering, a form of exercise notice.                                            

D.   Voting Procedures, Ballots and Voting Deadline                             

         After carefully reviewing the Plan, this Disclosure Statement and the
detailed instructions accompanying your Ballot, you will be asked to indicate   
your acceptance or rejection of the Plan by voting in favor of or against the   
Plan on the enclosed Ballot.  You will be required to complete and sign your    
original Ballot (copies will not be accepted) and return it in the envelope     
provided.                                                                       

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Each Ballot has been coded to reflect the Class of Claims it
represents.  Accordingly, in voting to accept or reject the Plan, you must use  
only the coded Ballot or Ballots sent to you with this Disclosure Statement.    

      IN ORDER FOR YOUR VOTE TO BE COUNTED, YOUR BALLOT MUST BE PROPERLY
COMPLETED AS SET FORTH ABOVE AND IN ACCORDANCE WITH THE VOTING INSTRUCTIONS ON  
THE BALLOT AND RECEIVED NO LATER THAN  _____, 2002, AT  __ P.M. (EASTERN TIME)  
--------                                          
(THE "VOTING DEADLINE") BY LOGAN & COMPANY, INC. (THE "VOTING AGENT").  DO NOT  
RETURN ANY STOCK CERTIFICATES OR DEBT INSTRUMENTS WITH YOUR BALLOT.             

     If you have any questions about (1) the procedure for voting your
Claim or Interest or with respect to the packet of materials that you have      
received or (2) the amount of your Claim, or if you wish to obtain, at your own 
expense, unless otherwise specifically required by Federal Rule of Bankruptcy   
Procedure 3017(d), an additional copy of the Plan, this Disclosure Statement or 
any appendices or exhibits to such documents, please contact:                   

Logan & Company, Inc. 
546 Valley Road 
Upper Montclair, NJ  07043  
(973) 509-3190 (telephone)  
(973) 509-3191 (facsimile)  

         FOR FURTHER INFORMATION AND INSTRUCTION ON VOTING TO ACCEPT OR REJECT
THE PLAN, SEE SECTION XI.                                                       
----------                                          

E.   Confirmation Hearing and Deadline for Objections to Confirmation           

       Pursuant to section 1128 of the Bankruptcy Code and Federal Rule of
Bankruptcy Procedure 3017(c), the Bankruptcy Court has scheduled a Confirmation 
Hearing for April 3, 2002, at 2:00 p.m. (prevailing Eastern Time).  The         
Confirmation Hearing may be adjourned from time to time by the Bankruptcy Court 
without further notice except for the announcement of the adjournment date made 
at the Confirmation Hearing or at any subsequent adjourned Confirmation Hearing.
Objections to Confirmation of the Plan must be filed with the Bankruptcy Court  
no later than March 22, 2002.                                                   

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III  HISTORY AND STRUCTURE OF THE DEBTORS 

A.   Overview of Business Operations                                            

1.   Description of the Company's Businesses                          

         ICG is a facilities-based, nationwide communications provider focused
on providing data and voice services to Internet service providers ("ISPs"),    
telecommunication carriers and corporate customers.  The Company has            
metropolitan fiber in 26 markets, fiber interconnection in five regional        
markets, voice and data switches in 27 major metropolitan areas and a nationwide
IP data network.  ICG is a competitive local exchange carrier ("CLEC") certified
in most of the United States, having interconnection agreements with every major
local exchange carrier.  ICG's facilities support three distinct lines of       
businesses:  (i) Dial-Up Services, providing wholesale managed modem connection 
to ISPs and other carriers; (ii) Point-to-Point Broadband, or special access    
service, providing dedicated broadband connections to other carriers, as well as
SS7 and switched access services; and (iii) Corporate Services, providing voice 
and data services to corporate customers with an emphasis on Dedicated Internet 
Access ("DIA") services.                                                        

       .    Dial-Up Services:  The Company provides PRI ports (one and two
             way) and managed modem services ("IRAS") to many of the largest
             national ISPs and other telecommunications carriers, as well as
       to numerous regional ISPs and other communication service
          companies.  Most of these services are on-switch through the
               Company's owned facilities.  Included in the IRAS are domain name
              services ("DNS") and radius authentication and proxy.  As of the
               third quarter 2001, the Company had approximately 650,000 dial-up
    ports in service, which, before the related reciprocal
            compensation, account for approximately one-third (1/3) of the
          Company's total revenue.  Associated reciprocal compensation
              revenue accounts for approximately thirteen percent (13%) of the
Company's revenue.                                

.    Point-to-Point Broadband Service:  The Company provides
            dedicated bandwidth to connect (i) long-haul carriers to local
     markets, large corporations and other long-haul carrier
           facilities and (ii) large corporations to their long-distance
          carrier sites and other corporate locations.  Special access
            sales are focused in areas where ICG maintains local fiber and
              buildings on-net or in close proximity. Point-to-Point Broadband
             Service also includes switched access and SS7 services.  Point-
            to-Point service accounts for approximately one-third (1/3) of
the Company's total revenue.                      

      .    Corporate Services:  The Company offers Internet access, data
              and voice service to corporate customers.  The Company's current
            customer base is located primarily in California, Ohio, Texas,
Colorado and parts of the southeast.  ICG is      

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             expanding its DIA services to medium and large-sized businesses
              in its 27 major markets. DIA service is a rapidly growing sector
               because an increasing number of corporations are replacing higher
             cost long haul point-to-point circuits with this less expensive
            technology. ICG is well positioned to expand this service with
           its metropolitan asset base, data network infrastructure, and
  Internet experience. Corporate Services accounts for
approximately one-fifth (1/5) of revenue.         

     ICG supports its service offerings through an advanced nationwide
network comprised of 5,540 route miles of metropolitan and regional fiber       
connected with switch sites and data points of presence.  In addition, the      
Company's data network is supported by an OC-48 capacity nationwide fiber optic 
backbone currently operating at OC-3/OC-12 capacity.  The design of the physical
network permits the Company to offer flexible, high-speed telecommunications    
services to its customers.                                                      

2.   History                                                          

      The Company's roots can be traced to the mid-1980s with a business
plan to develop satellite communications capabilities in Denver, Colorado.  Then
known as Teleport Denver, Ltd. ("TDL"), the Company completed a 24-hour managed 
facility that housed eight earth stations and could reach five continents in a  
single satellite hop.  With the emergence of the first competitive access       
providers ("CAPs") in the mid- to late-1980s, TDL's management recognized a     
business opportunity in providing long distance and private line services to    
select business customers.  Accordingly, in 1992, the Company began providing   
telecommunications services using fiber-optic rings at a facility in south      
Denver.                                                                         

In an effort to expand its geographic presence, TDL (and its
successors ICG Holdings and ICG Telecom) made numerous acquisitions between 1991
and 1994, including the acquisitions of Conticomm, Inc., Fiber Optic            
Technologies, Inc., PrivaCom, Ohio LINX, MidAmerica Cable, and Bay Area         
Teleport, Inc.  These acquisitions expanded the Company's network capabilities  
in Colorado, California, Ohio, Arizona, and the southeastern United States.  In 
February 1994, the Company expanded its product line beyond transport to include
switched services.   Throughout the next few years, the Company entered into a  
number of fiber lease agreements with electric utility companies across the     
country.  These early agreements set the stage for the Company's utility        
partnering strategy, which helped the Company expand its network, services and  
distribution channels in key markets.  In 1995, the Company also entered into a 
strategic alliance with Southern New England Telephone that allowed the Company 
to offer a nationwide SS7 network.                                              

       With the passage of the Federal Telecommunications Act of 1996 (the
"Telecommunications Act"), the Company was poised to enter the local telephone  
market.  Accordingly, in April 1996, the Company reincorporated under the name  
ICG Communications, Inc., and implemented an aggressive local telecommunications
strategy that focused on regional network expansion in California, Colorado, the
Ohio Valley, and the Southeast.  As part of this strategy, recruiting efforts   

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accelerated, and the Company had nearly 1,300 employees nationwide by the end of
1996.  In continued efforts to prepare for entry into the local telephone       
market, the Company signed a seven-year, $1 billion agreement in September 1996 
with Lucent Technologies/Bell Labs to purchase telecommunications equipment,    
including 5E switching systems and other technical services.  In 1997, the      
Company formally entered the local telephone market and began offering local,   
long distance and calling card services primarily to small- and mid-sized       
business customers.  Shortly thereafter, the Company launched dial tone service 
in every other regional ICG market and ended 1997 with more than 141,000 lines  
provisioned.                                                                    

  During 1998, attempting to capitalize on the emerging Internet
industry, the Company's management completed a merger with Netcom On-Line       
Communication Services, Inc. ("Netcom"), a leading provider of Internet         
services. The merger allowed ICG to enter the Internet and data services        
markets.  In January 1999, the Company sold the U.S. customer base of its Netcom
subsidiary to MindSpring Enterprises, Inc. ("Mindspring"), but retained the     
Netcom network backbone (which included 227 points of presence and served       
approximately 700 cities).  In addition, the Company entered into a second      
agreement in which MindSpring agreed to utilize the data network and network    
management capabilities of ICG.  This strategic decision set the stage for the  
Company's emergence as a provider of Internet access services.  During 1999 and 
2000, the Company signed multi-year agreements with a number of key ISPs to     
provide access, transport and network management services.                      

      The Company decided to sell its fiber optic and satellite services
divisions in 1999 as part of an overall business strategy to focus on its core  
strengths: providing access and transport to ISPs, telecom services to          
businesses nationwide and direct connectivity to interexchange carriers.  During
the first six (6) months of 2000, the Company began to aggressively expand its  
network.  Such expansion included entering into markets as well as upgrading its
network.  To assist in its expansion plans, in April 2000, the Company raised   
$750 million in new equity capital from investors that included affiliates of   
Liberty Media Corporation, Hicks, Muse, Tate & Furst Incorporated and Gleacher  
Capital Partners.  This investment, combined with other vendor financing, funded
the Company's capital program for 2000.                                         

      As discussed in more detail in Section III.D, the Company began to
               -------------
experience significant cash flow problems by the third quarter of 2000.  This   
liquidity problem, combined with certain service issues related to the rapid    
network expansion, caused the Company to reevaluate its planned network         
expansion.  Accordingly, the Company suspended many of its network expansion    
plans and abandoned certain lines of business.                                  

3.   Prepetition Financial Results                                    

     Set forth below is selected financial data for ICG, including its
direct and indirect Subsidiaries, on a consolidated basis for the nine months   
ended September 30, 2000 and for the year ended  December 31, 1999.  The        
unaudited financial data for the nine months ended September 30, 2000 is        
consistent with the amounts shown in ICG's Form 10-Q filed with the SEC for the 
quarterly period ended September 30, 2000, except as noted in ICG's Form 10-Q   
filed with the SEC for the year ended                                           

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December 31, 2000 for Revenue and Net Losses. Revenue is less and Net Loss      
greater than reported in the Form 10-Q for the nine months ended September 30,  
2000 by approximately $.04 million due to the retroactive application of SAB    
101, Revenue Recognition in Financial Statements. The financial data for the    
year ended December 31, 1999 was audited for inclusion in ICG's Form 10-K filed 
with the SEC.                                                                   

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Consolidated Statements of Operations 
Year ended December 31, 1999 and Nine Months ended September 30, 2000 
(Unaudited) 

                                                                [Download Table]

                                                                 Nine months  
                                                    Year ended      ended     
                                                   December 31,  September 30,
                                                       1999          2000     
                                                       ----          ----     
                                                         (in thousands)       
                                                                              
Revenue                                              $ 479,226   $ 477,369    

Operating costs and expenses:                                                 
  Operating costs                                      238,927     304,202    
  Selling, general and administrative expenses         239,756     188,947    
  Depreciation and amortization                        174,239     236,514    
  Loss on disposal of asset                             31,815       2,566    
  Other, net                                               387       1,692    
                                                     ---------   ---------    
     Total operating costs and expenses                685,124     733,921    
                                                     ---------   ---------    
Operating loss                                        (205,898)   (256,552)   

Other income (expense):                                                       
  Interest expense                                    (212,420)   (195,406)   
  Interest income                                       16,300      20,437    
  Other expense, net                                    (2,522)       (349)   
                                                     ---------   ---------    
     Total other expense, net                         (198,642)   (175,318)   

Loss from continuing operations before accretion                              
  and preferred dividends                             (404,540)   (431,870)   
  Accretion and preferred dividends on preferred                              
     securities of subsidiaries, net of minority                              
     interest in share of losses                       (61,897)    (51,428)   
  Income tax expense                                       (25)        (10)   
                                                     ---------   ---------    
Loss from continuing operations                       (466,462)   (483,308)   

  Net income from discontinued operations               36,789         736    
                                                     ---------   ---------    
Net loss before extraordinary gain and cumulative                             
  effect of change in accounting principle            (429,673)   (482,572)   
  Extraordinary gain on sales of operations of                                
     NETCOM, net of income taxes                       195,511                
                                                     ---------   ---------    

  Net loss                                           $(234,162)   (482,572)   
                                                     =========   =========    

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Consolidated Balance Sheets 
As of December 31, 1999 and September 30, 2000 (Unaudited)  

                                                        [Enlarge/Download Table]

                                                       December 31,     September 30,
                                                           1999              2000    
                                                       ------------     -------------
                                                              (in thousands)         
                                                                                     
Assets                                                                               
------                                                                               
Current assets:                                                                      
  Cash and cash equivalents                            $  103,288       $   216,714  
  Short-term investments available for sale                22,219            17,536  
  Receivables, net                                        168,731           193,640  
  Prepaid expenses, deposits and inventory                  9,189            19,839  
                                                       ------------     -------------
     Total current assets                                 303,427           447,729  

Property and equipment, net                             1,527,879         2,193,450  

Restricted cash                                            12,537             7,721  
Investments                                                28,939            15,652  
Other assets, net of accumulated amortization:                                       
  Goodwill                                                 95,187            73,099  
  Deferred financing costs                                 35,884            32,252  
  Other, net                                               16,768            20,024  
                                                       ------------     -------------
Total other assets                                        147,839           125,375  
                                                       ------------     -------------

Total Assets                                           $2,020,621       $ 2,789,927  
                                                       ============     =============

Liabilities and Stockholders' Deficit                                                
-------------------------------------                                                
Current liabilities:                                                                 
  Accounts payable                                     $  112,291       $   108,465  
  Payable pursuant to IRU agreement                       135,322            53,826  
  Accrued liabilities                                      85,709           206,611  
  Deferred revenue                                         25,175           172,843  
  Other current liabilities                                14,890            56,755  
                                                       ------------     -------------
     Total current liabilities                            373,387           598,500  

Capital lease obligations, less current portion            63,348           139,377  
Long-term debt, net of discount, less current portion   1,905,901         2,068,672  
Other long-term liabilities                                 2,526             3,247  
                                                       ------------     -------------

  Total liabilities                                     2,345,162         2,809,796  

Redeemable preferred stock                                519,323         1,222,896  

Stockholders' deficit                                    (843,864)       (1,242,765) 
                                                       ------------     -------------

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                                                                [Download Table]
                                                                        
Total Liabilities and Stockholders' Deficit  $ 2,020,621    $ 2,789,927 
                                             ============  =============

B.   Capital Structure of the Company                                           

1.   Prepetition Equity                                               

   From March 25, 1997 to November 18, 2000, ICG's stock (the "Old
Common Shares") was traded on the Nasdaq National Market (the "NASDAQ") under   
the ticker symbol "ICGX," and it was previously listed on the American Stock    
Exchange ("AMEX") under the ticker symbol "ICG."  On November 18, 2000, shortly 
after the Petition Date, the NASDAQ halted trading of the Old Common Shares and 
initiated delisting procedures.  As of June 20, 2001, the Old Common Shares     
continue to be traded on the Over-the-Counter ("OTC") market.  At that time, the
Company had approximately 52,045,443 shares outstanding.  The Company neither   
declared nor paid dividends on the Old Common Shares.                           

     Prior to the Petition Date, the Company also issued the following
preferred securities (the "Old Preferred Shares"): (i) ICG Communications, Inc. 
8% Series A-1, A-2, and A-3 Convertible Preferred Securities due 2015; (ii) ICG 
Funding, LLC Exchangeable Preferred Securities Mandatorily Redeemable 2009;     
(iii) ICG Communications, Inc. 6 3/4% Preferred Stock Mandatorily Redeemable    
2009; (iv) ICG Holdings, Inc. 14% Preferred Stock Mandatorily Redeemable 2008;  
and (v) ICG Holdings, Inc. 14 1/4% Preferred Stock Mandatorily Redeemable 2007. 

         Under the Plan, the holders of Interests on account of the Old Common
Shares and Old Preferred Shares will be classified in Class 6.  Under the Plan, 
holders of Interests in Class 6 will not receive or retain any property under   
the Plan on account of such Interests.  On the business day on which all        
conditions to consummation of the Plan have been satisfied or waived, as set    
forth in the Plan (the "Effective Date"), all of the Old Common Shares and Old  
Preferred Shares will be deemed cancelled and extinguished.                     

2.   Material Prepetition Debt Obligations                            

        As of the Petition Date, ICG Equipment and ICG NetAhead were parties
to a Credit Agreement dated as of August 12, 1999 (as amended from time to time,
the "Pre-petition Credit Agreement") with the lenders signatory thereto (the    
"Prepetition Secured Lenders") and Royal Bank of Canada as administrative agent 
and collateral agent.  The obligations under the Prepetition Credit Agreement   
(the "Prepetition Credit Agreement Obligations") are guaranteed by ICG Services.
The Prepetition Credit Agreement Obligations total approximately $85 million,   
and are secured by substantially all the assets of ICG Equipment and ICG        
NetAhead.  The Telecom Debtors are not party to any prepetition secured bank    
financing facility.                                                             

         The Debtors' other principal liabilities as of the Petition Date were
comprised of, among other things: (a) the 9 7/8% senior discount notes issued by
ICG Services with an accreted value as of November 1, 2000 of approximately     
$318,428,137; (b) the 10% senior discount notes issued by ICG Services with an  
accreted value as of November 1, 2000 of approximately $391,924,050; (c) the 11 
5/8% senior discount notes issued by ICG Holdings with an accreted value as of  
November 1, 2000 of                                                             

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approximately $150,718,480; (d) the 12 1/2% senior discount notes issued by ICG 
Holdings with an accreted value as of November 1, 2000 of approximately         
$517,925,851; and (e) the 13 1/2% senior discount notes issued by ICG Holdings  
with an accreted value as of November 1, 2000 of approximately $584,300,000. The
Debtors' prepetition liabilities also include approximately $195 million of     
capital lease obligations and significant trade debt obligations.               

C.   Corporate Structure of the Company                                         

1.   Current Corporate Structure                                      

      ICG is incorporated in Delaware, and is the publicly-traded parent
company of ICG Funding, LLC ("ICG Funding"), a special purpose Delaware limited 
liability company, ICG Holdings, ICG Services and their respective subsidiaries.

      See Appendices B(1)-(3) for charts depicting the Company's current
-------------------                                 
corporate structure, and the anticipated corporate structure of the Reorganized 
Debtors after the Effective Date.                                               

2.   Board of Directors                                               

        The following persons comprised the Board of Directors (the "Board")
of ICG as of December 1, 2001:                                                  

Name                               Title          
----                               -----          

           William J. Laggett                 Vice Chairman of the Board

John U. Moorhead, II               Board Member   

Leontis Teryazos                   Board Member   

Walter Threadgill                  Board Member   

William S. Beans, Jr.              Board Member   

J. Shelby Bryan                    Board Member   

      William J. Laggett, formerly Chairman of the Board, was named Vice
Chairman of the Board in June 1999.  Prior to serving on the Company's Board,   
Mr. Laggett was President of Centel Cellular Company from 1988 until 1993.  From
1970 to 1988, Mr. Laggett held a variety of management positions with Centel    
Corporation, including Group Vice President-Products Group, President-Centel    
Services, and Senior Vice President-Centel Corporation.  Prior to joining       
Centel, Mr. Laggett worked for New York Telephone Company.  Mr. Laggett also is 
a member of the Company's Special Committee of the Board of Directors (the      
"Special Committee").                                                           

         John U. Moorhead, II was named a Director in June 1998.  From 1991 to
April 2001, Mr. Moorhead also served as a managing director of VM Equity        
Partners, a firm he co-founded in 1991.                                         

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Prior to founding VM Equity Partners, Mr. Moorhead worked for eight years as a  
Senior Executive in investment banking, first at EF Hutton and then at Lehman   
Brothers, where he was Senior Vice President and Director of the New Business   
Group of Lehman Brothers' investment banking division from 1987 to 1990. Mr.    
Moorhead serves on the Board of Directors of SEMX Inc., a Nasdaq National Market
company, which provides specialty materials and services to the microelectronic 
and semiconductor industries. Mr. Moorhead also is a member of the Special      
Committee.                                                                      

        Leontis Teryazos was named a Director in June 1995.  Since 1993, Mr.
Teryazos has served as President of Letmic Management Inc., a financial advisory
firm that specializes in working with telecommunications and media companies.   
Mr. Teryazos has also headed Letmic Management Reg'd., a real estate development
and management company, since 1985.  In addition, Mr. Teryazos is a member of   
the Special Committee.                                                          

          Walter Threadgill was named a Director in December 1997.  In addition,
he is the Managing General Partner of Atlantic Coastal Ventures, L.P.           
Previously, Mr. Threadgill was the President and Chief Executive Officer of     
Multimedia Broadcast Investment Corporation.  He also held positions as         
Divisional Vice President of Fiduciary Trust Company in New York and Senior Vice
President and Chief Operating Officer of United National Bank in Washington,    
D.C.  Mr. Threadgill chaired the Presidential Small Business Advisory Committee 
and served the National Association of Investment Companies as Director,        
Treasurer and Legislative Committee Chairman.  Mr. Threadgill is a member of the
Federal Communications Bar Association.  In addition, Mr. Threadgill is a member
of the Special Committee.                                                       

       William S. Beans, Jr., formerly President, Chief Operating Officer,
Executive Vice President and President of Network Services, was named a Director
in April 2000.  Prior to joining the Company, Mr. Beans held several positions  
with Teleport Communications Group, Inc., a division of AT&T Local Services.  He
was National Vice President of Operations from November 1997 until June 1999,   
Vice President of Customer Care from October 1995 to November 1997 and Vice     
President of Network Development from September 1993 to October 1995.           

    J. Shelby Bryan, formerly Chairman of the Board, Chief Executive
Officer, and President, was named a Director in May 1995.  Mr. Bryan has more   
than 20 years of experience in the telecommunications industry.  Prior to       
joining the Company, Mr. Bryan co-founded Millicom International Cellular S.A., 
a publicly owned corporation providing cellular service internationally, served 
as its President and Chief Executive Officer from 1985 to 1994 and served as a  
Director through May 1998.                                                      

     All members of the Board, other than Messrs. Beans and Bryan, are
members of the Special Committee.  The Special Committee has been responsible   
for oversight of management and these Chapter 11 Cases for the Debtors.  Messrs.
Bryan and Beans left the Company's employ in August 2000 and February 2001,     
respectively, and Mr. Beans entered into a severance agreement with the Company 
that was approved by the Bankruptcy Court in January, 2001.                     

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3.   Senior Officers                                                  

        The following is a list, as of December 1, 2001, of the names of the
executive officers and the positions with ICG held by each officer.             

Name                               Title          
----                               -----          

        Randall E. Curran                  Chief Executive Officer

         Richard E. Fish, Jr.               Executive Vice President
                                       and Chief Financial
                           Officer

          Bernard L. Zuroff                  Executive Vice President,
                                        General Counsel, and
                             Secretary

          Michael D. Kallet                  Executive Vice President,
                              Operations

       John V. Colgan                     Senior Vice President,
                                           Finance, and Controller

          Randall E. Curran was named Chief Executive Officer in September 2000.
Prior to his position at the Company, Mr. Curran most recently served as        
Chairman, President and Chief Executive Officer of Thermadyne Holdings          
Corporation.  Mr. Curran also served as vice president of Finance for Clarke    
Industries, a division of Cooper Industries.  Mr. Curran received a Bachelor of 
Arts in Economics from DePauw University and a Master of Business Administration
from Loyola University Chicago.                                                 

          Richard E. Fish, Jr., formerly a Senior Vice President of Finance, was
named Executive Vice President and Chief Financial Officer in November 2000.    
Prior to joining the Company, Mr. Fish held various operational and business    
development positions with AT&T.  Before joining AT&T, Mr. Fish was with Arthur 
Andersen, LLP in their Financial Consulting & Audit Division.  Mr. Fish received
a Bachelor of Science in Business Administration from the University of Nebraska
and is a Certified Public Accountant.                                           

    Bernard L. Zuroff, formerly Assistant General Counsel, was named
Executive Vice President, General Counsel and Secretary in November 2000.  Prior
to joining the Company, Mr. Zuroff was a senior attorney with the Resolution    
Trust Corporation and an associate business attorney with Gorsuch Kirgis, L.L.C.

Michael D. Kallet, formerly Executive Vice President of Data
Networking Services and Products and Technology, was named Executive Vice       
President of Operations in December 1999.  In his current position, Mr. Kallet  
is responsible for the operations of ICG's network and services, and works      
closely with ICG's chief executive officer to oversee day-to-day operations.    
Mr. Kallet also oversees the Company's product strategy.  Prior to joining the  
Company, Mr. Kallet held positions at Walker Interactive, Software Publishing   
Corporation (Harvard Graphics) and IBM.                                         

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          John V. Colgan, formerly Vice President of Shared Services and Leasing
Operations, Vice President of Financial Planning and Analysis and Vice President
of Finance for ICG Telecom, was named Senior Vice President of Finance and      
Controller in January 1999.  In this position, Mr. Colgan is responsible for,   
among things, SEC reporting, insurance and risk management. Prior to joining the
Company, Mr. Colgan spent ten (10) years in various executive positions in the  
logistics and transportation industry, including five (5) years with Burlington 
Northern, Inc. and approximately ten (10) at Arthur Andersen, LLP.  In addition,
Mr. Colgan currently serves on the Board of Directors of the local chapter of   
Financial Executives International.                                             

D.   Events Leading to Commencement of the Chapter 11 Cases                     

       During the latter part of 2000, a series of regulatory, operational
and financial events culminated to materially reduce the Company's expected     
revenue and cash flow generation.  The regulatory events related to reciprocal  
compensation revenue.  Specifically, the Company had difficulties collecting    
reciprocal compensation from other telecommunications companies.  In order to   
accelerate collection, ICG renegotiated rate provisions contained in long-term  
agreements with incumbent local exchange carriers ("ILECs").  The areas covered 
by such ILECs encompassed nearly 75% of the Company's service territories       
subject to reciprocal compensation.  The negotiated rates were significantly    
lower than those provided in previous agreements; however, the renegotiated     
contracts contain a three-year guarantee of future revenue.  In addition, a     
decision from the Colorado Public Utility Commission in August 2000 denied the  
Company compensation for inbound traffic, which further reduced expected        
reciprocal compensation revenue.                                                

   Operational events related primarily to network performance and
customer service issues associated with the Company's IRAS product.  During     
2000, ICG experienced high demand for its IRAS service.  In an effort to meet   
such demand, the Company deployed non-field tested software.  This resulted in  
system errors, latency and failed dial-up connections, thereby reducing overall 
network performance to below-minimum levels.  The reduced levels violated       
performance provisions of certain IRAS service agreements.  Further, limitations
of certain monitoring systems prevented the Company from detecting and          
correcting the network performance problems.                                    

        In August 2000, two large IRAS customers notified ICG that it was in
breach of contract as a result of the reduced service and network performance   
levels.  The Company subsequently issued credits to certain customers and       
reduced line commitments for the installation of IRAS service, further reducing 
revenue.  Finally, to meet the increased demand from IRAS customers, the Company
utilized resold lines as a temporary solution until the Company's own facilities
were completed.  The resold lines, which made up a significant percentage of    
total lines in service, were not cost effective and did not generate reciprocal 
compensation revenue.                                                           

          The combination of lower IRAS and reciprocal compensation revenues and
higher costs substantially lowered expected financial results.  Consequently,   
the Company was technically in violation of  certain of the covenants in the    
Pre-Petition Credit Agreement.  In addition, during this period, the Company    
required additional funding to complete its planned network build-out.  The     
timing of these events corresponded with a significant tightening of the capital
markets within the telecommunications industry.  Accordingly, the Company faced 
a liquidity crisis and required a                                               

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restructuring of operations and the Company's balance sheet, which the Company  
believed could best be accomplished in Chapter 11.                              

IV.  CHAPTER 11 CASES 

A.   Continuation of Business; Stay of Litigation                               

      On November 14, 2000, the Debtors filed petitions for relief under
Chapter 11 of the Bankruptcy Code.  Since the Petition Date, the Debtors have   
continued to operate as debtors-in-possession subject to the supervision of the 
Bankruptcy Court and in accordance with the Bankruptcy Code.  The Debtors are   
authorized to operate their business in the ordinary course of business, with   
transactions out of the ordinary course of business requiring Bankruptcy Court  
approval.                                                                       

          An immediate effect of the filing of the Debtors' bankruptcy petitions
is the imposition of the automatic stay under the Bankruptcy Code which, with   
limited exceptions, enjoins the commencement or continuation of all collection  
efforts by creditors, the enforcement of liens against property of the Debtors  
and the continuation of litigation against the Debtors.  This relief provides   
the Debtors with the "breathing room" necessary to assess and reorganize their  
business.  The automatic stay remains in effect, unless modified by the         
Bankruptcy Court, until consummation of a plan of reorganization.               

B.   First Day Orders                                                           

         On the first day of these Chapter 11 cases, the Debtors filed several
motions seeking certain relief by virtue of so-called "first day orders."  First
day orders are intended to facilitate the transition between a debtor's         
prepetition and postpetition business operations by approving certain regular   
business practices that may not be specifically authorized under the Bankruptcy 
Code or as to which the Bankruptcy Code requires prior approval by the          
Bankruptcy Court.  The first day orders obtained in these cases are typical for 
large Chapter 11 cases.                                                         

        The first day orders in the Chapter 11 Cases authorized, among other
things:                                                                         

        a.   the retention of the following professionals to serve on behalf
      of the Debtors: (i) Skadden, Arps, Slate, Meagher & Flom
               (Illinois) and its affiliated law practice as bankruptcy counsel;
               (ii) Zolfo Cooper, LLC ("Zolfo Cooper") as bankruptcy consultants
              and special financial advisors; (iii) DrKW as investment banker;
               and (iv) Logan & Company, Inc. as solicitation and noticing agent
(the "Claims Agent");                             

       b.   the continued retention of professionals regularly employed by
the Debtors in the ordinary course of business;   

       c.   the maintenance of the Debtors' bank accounts and operation of
         their cash management systems substantially as such systems
existed prior to the Petition Date;               

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       d.   payment of employees' accrued prepetition wages, royalties and
employee benefit claims;                          

   e.   payment of prepetition shipping, warehouse, distributor or
             regulatory charges and related possessory and mechanics' liens;

         f.   continued utility services during the pendency of the Chapter 11
Cases;                                            

g.   payment of certain prepetition tax claims;             

      h.   confirmation that the Debtors' undisputed obligations arising
          from postpetition delivery of goods will have administrative
           expense priority status, administrative expense treatment for
               certain holders of valid reclamation claims, and authority to pay
  certain expenses in the ordinary course of business;

       i.   joint administration of each of the Debtors' bankruptcy cases;
and                                               

     j.   the maintenance of certain prepetition customer programs and
practices.                                        

C.   Debtor in Possession Financing                                             

1.   The DIP Facility                                                 

    To ensure that it would have sufficient liquidity to conduct its
businesses during the Chapter 11 Cases, the Company believed, at the time the   
Chapter 11 Cases were commenced, that it was in the best interests of the       
Company and its creditors to obtain a commitment for Debtor-in-Possession       
financing. Such financing would ensure continued access to sufficient working   
capital during the pendency of the Chapter 11 Cases and instill confidence in   
its customers, critical vendors and employees that the Company would continue as
a going concern.                                                                

     Accordingly, at the outset of these cases, the Debtors sought and
obtained interim authority to enter into a DIP facility (the "DIP Facility")    
with The Chase Manhattan Bank as administrative agent (the "Agent") and a       
syndicate of financial institutions (collectively, the "DIP Lenders") arranged  
by the Agent. Final authority to enter into the DIP Facility was granted by the 
Bankruptcy Court on December 19, 2000. The DIP Facility provided for secured    
postpetition financing from the DIP Lenders in an aggregate principal amount not
to exceed $350 million, which was later reduced by amendment to $200 million.   
The DIP Facility had a term of eighteen months.                                 

       Under the terms of the DIP Facility, to secure the repayment of the
borrowing and all other obligations arising under the DIP Facility, the Debtors 
granted the DIP Lenders first priority liens on substantially all of their      
assets junior to the liens of the existing Prepetition Secured Lenders, and     
other valid liens existing on the Petition Date. Obligations under the DIP      
Facility were also granted "superpriority" claim status under section 364(c)(1) 
of the Bankruptcy Code, meaning they have priority over all other administrative
expenses. The liens and claims granted to the DIP Lenders are junior to the fees
and expenses of the Office of the United States Trustee under 28 U.S.C. (S) 1930
and the Clerk of the                                                            

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Bankruptcy Court, as well as to a $3 million carve-out for the fees and         
disbursements of the professionals of the Debtors and the Creditors' Committee  
incurred after an event of default under the DIP Facility. The DIP Facility also
contained covenants, representations and warranties, events of default, and     
other terms and conditions typical of credit facilities of a similar nature. The
DIP Facility required that, if any borrowings thereunder were made, initial     
borrowings had to be sufficient to, and utilized to, pay all obligations to the 
Prepetition Secured Lenders in full.                                            

 Because the results of operations during the Chapter 11 Cases
materially exceeded projections made at the outset of the Chapter 11 Cases, the 
Debtors did not need to utilize funds available under the DIP Facility and, as  
set forth in below, have cash on hand as of November 30, 2001 of approximately  
$150.6 million.  Thus, to reduce financing costs by avoiding future fees of the 
DIP Facility, the Debtors terminated the DIP Facility on November 7, 2001.      

2.   Authorization to Use Cash Collateral                             

      The cash that ICG Equipment and ICG NetAhead had on hand as of the
Petition Date, and substantially all cash received by such Debtors during the   
Chapter 11 Cases, constitutes "Cash Collateral" of the Prepetition Secured      
Lenders.  Cash collateral is defined in section 363 of the Bankruptcy Code and  
includes, but is not limited to, "cash, negotiable instruments, documents of    
title, securities, deposit accounts, . . . other cash equivalents . . . and . . 
. proceeds, products, offspring, rents or profits of property subject to a    
security interest  . . . ." 11 U.S.C. (S) 363(a).  Under the Bankruptcy Code,   
the Debtors are prohibited from using, selling, or leasing Cash Collateral      
unless either the appropriate creditor(s) consent or the Bankruptcy Court, after
notice and a hearing, authorizes such action. Accordingly, the Debtors obtained 
authority to use the Cash Collateral to pay current operating expenses,         
including payroll to ensure the maintenance of the Debtors' telecommunications  
network and to ensure uninterrupted customer service, which is essential to the 
Debtors' continued viability (the "Cash Collateral Order").  Importantly,       
pursuant to the Cash Collateral Order, the Debtors use of Cash Collateral is    
restricted by the terms of a budget agreed upon by the Debtors and the Pre-     
Petition Secured Lenders.                                                       

3.   Exit Financing                                                   

         As of November 30, 2001, the Services Debtors had approximately $87.5
million in cash on hand, and the Telecom Debtors had approximately $63.1 million
in cash on hand.  The Debtors anticipate that as of April 1, 2002, the Services 
Debtors will continue to have approximately $100 million in cash on hand, and   
the Telecom Debtors will have approximately $15 million in cash on hand.  The   
reduction in cash on hand with respect to the Telecom Debtors is due to normal  
operating cash requirements.  If the Plan is consummated, there will be no      
balance sheet distinctions between the Services Debtors and the Telecom Debtors,
and, accordingly, there will be no need to segregate the cash of the Telecom and
Service Debtors, respectively.  Given this amount of cash, and based upon the   
Business Plan and Projections, the Debtors do not believe that obtaining new    
financing is necessary in order to consummate the Plan, or to render the Plan   
feasible within the meaning of Section 1129 of the Bankruptcy Code.  See        
                                                             ---
Sections I.  As discussed in Section V.G below, as additional consideration to  
----------                   -----------                                        
holders of Claims in Class 5, the Plan does include the Rights Offering, which  
may raise additional cash for operations. However, the Rights Offering is not   
being underwritten.  Thus, while the Rights Offering                            

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may provide an additional source of cash to Reorganized ICG, there can be no    
assurances that the Rights Offering will provide any additional funding to      
Reorganized ICG.                                                                

D.   Appointment of Creditors' Committee                                        

       On November 29, 2000, the United States Trustee for the District of
Delaware appointed, pursuant to section 1102(a) of the Bankruptcy Code, certain 
entities to the Official Committee of Unsecured Creditors of the Debtors (the   
"Creditors' Committee").  Members of the Creditors' Committee have included:    
Aetna, Inc.; Banc One Investment; Cerberus Partners; Conseco Capital Management,
Inc.; W.R. Huff Asset Management Co.; Lucent Technologies; and Qwest            
Communications Corporation. In or about July 2001, Qwest Communications         
Corporation resigned from the Creditors' Committee.                             

E.   Other Material Relief Obtained During the Chapter 11 Cases                 

         In addition to the first day relief sought in these Chapter 11 Cases,
the Debtors have sought authority with respect to a multitude of matters        
designed to assist in the administration of the Chapter 11 Cases, to maximize   
the value of the Debtors' estates, and to provide the foundation for the        
Debtors' emergence from Chapter 11.  Set forth below is a brief summary of      
certain of the principal motions the Debtors have filed during the pendency of  
the Chapter 11 Cases.                                                           

1.   Employee Retention Program                                       

          On December 19, 2000, the Bankruptcy Court approved a program designed
to retain key executives and employees.  The first component is the retention   
program, which included a retention bonus providing an annual bonus to certain  
employees ranging from 6% to 150% of compensation depending upon their position 
within ICG.  The second component is a severance policy, which provides that the
Company will make severance payments based on length of service to certain      
employees who do not have employment contracts.                                 

2.   Senior Employment Agreements; Chief Executive Officer Agreement  

       On January 31, 2001, the Bankruptcy Court authorized the Debtors to
assume and/or enter into employment contracts with twelve key members of the    
Debtors' senior management.  The contracts provide for a severance benefit equal
to one-year's base salary if terminated other than for cause.  One of the twelve
executives, Mr. Michael Kallet, who is critical to the maintenance of the       
Debtors' telecommunications network, see Section , will also receive a $500,000 
          --------
bonus upon confirmation of the Plan if he is still employed by the Debtors on   
the date the Plan is confirmed, or the date a sale of all or substantially all  
of the Company's assets is consummated.                                         

      In addition, on June 21, 2001, the Bankruptcy Court authorized the
Debtors to enter into a new employment agreement with their Chief Executive     
Officer, Mr. Randall Curran (the "Curran Agreement").  The principal terms of   
the Curran Agreement are as follows:                                            

    (i)  Term.  The term of the Curran Agreement continues until Mr.
Curran's termination, provided, however that at the end of each calendar month, 
the employment term shall be extended through the end of the immediately        
following calendar month unless notice of non-renewal is                        

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given by the Company to Mr. Curran not less than fifteen (15) days prior to the 
end of any such calendar month.                                                 

     (ii)   Compensation. An annual base salary of $900,000 (the "Base
Salary"), which may be increased in accordance with normal business practices   
and may not be reduced. If the Company achieves $31 million EBITDA for fiscal   
2001, then Mr. Curran shall receive a $100,000 bonus (the "2001 Bonus           
Threshold"). Mr. Curran shall receive $100,000 for each $1 million in excess of 
the 2001 Bonus Threshold (together with the 2001 Bonus Threshold, the           
"Performance Bonus"), and, in no event, shall the Performance Bonus exceed      
$900,000. Ten days after either (x) consummation of a confirmed plan of         
reorganization or (y) consummation of a sale of substantially all of the assets 
of the Debtors, prior to December 31, 2001, Mr. Curran shall receive a          
reorganization bonus equal to $900,000 (the "Reorganization Bonus"). If         
conditions (x) or (y) are met following December 31, 2001, a portion of the     
Reorganization Bonus may become payable, provided that the amount of the        
Reorganization Bonus shall be reduced by $100,000 for each whole one-month      
period immediately following December 31, 2001. Finally, if conditions (x) or   
(y) are met following December 21, 2001, and the reason such condition was not  
met prior to such date is lack of resolution of intercreditor issues or the     
Creditors' Committee's refusal to support an Acceptable Plan (as defined in the 
Curran Agreement), then the Reorganization Bonus shall be $900,000.             

     (iii)  Expenses and Other Benefits.  Mr. Curran shall receive (i)
employee benefits as are generally provided to senior executives of the Debtors,
(ii) reimbursement for all reasonable out-of-pocket expenses incurred in        
connection with the performance of his duties as CEO, including reasonable costs
associated with permanently relocating to the Denver metropolitan area, and     
(iii) vacation time, paid holidays, and personal days in accordance with the    
Debtors' policy then in effect.                                                 

         (iv)   Termination.  If the Agreement is terminated by Mr. Curran for
"good reason," or if the Debtors terminate Mr. Curran's employment for any      
reason other than Mr. Curran's death, disability, or for cause, the Company     
shall pay Mr. Curran a lump sum termination benefit in an amount equal to       
fifteen months' Base Salary at the rate then in effect.                         

3.   Extension of Time to Assume or Reject Unexpired Leases           

        Given the size and complexity of these Chapter 11 Cases, the Debtors
were unable to complete their analysis of all nonresidential real property      
leases during the time limitation prescribed by section 365(d)(4) of the        
Bankruptcy Code.  On January 31, 2001, the Bankruptcy Court extended the time by
which the Debtors must assume or reject leases of nonresidential property for   
six months, through and including July 12, 2001.  On June 21, 2001, the         
Bankruptcy Court extended that period an additional six months, through and     
including January 10, 2002.  The Debtors have requested a further extension     
through the date of Confirmation of this Plan.                                  

4.   Extension of Exclusive Periods                                   

      Pursuant to orders of the Bankruptcy Code dated February 27, 2001,
August 2, 2001, and December 6, the Bankruptcy Court extended the Debtors'      
exclusive period to propose a plan of reorganization (the "Plan Proposal        
Period") and to solicit acceptances of such Plan (the "Solicitation             

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Period"). On February 20, the Bankruptcy Court extended the plan proposal period
through August 11, 2001, and the solicitation period through October 10, 2001.  
On August 2, 2001, the Bankruptcy Court further extended the Plan Proposal      
Period through December 10, 2001, and the Solicitation Period through February  
8, 2002. Finally, on December 6, 2001, the Bankruptcy Court further extended the
Plan Proposal Period through March 8, 2002, and the Solicitation Period through 
May 7, 2002.                                                                    

5.   Settlement with Qwest Communications Corporation                 

        Prior to the Petition Date, Qwest and the Debtors developed a number
of important and mutually valuable business relationships, governed by a        
plethora of contracts (collectively, the "Qwest Prepetition Agreements").  The  
Qwest Prepetition Agreements include contracts pertaining both to the Debtors'  
ISP business and their operations as a CLEC.  During the pendency of the Chapter
11 Cases, both the Debtors and Qwest asserted various breaches of, and claims   
under, the Qwest Prepetition Agreements.  Following lengthy negotiations, the   
parties agreed to enter into a settlement resolving all of the claims and issues
between the parties (the "Qwest Settlement Agreement") in order to continue a   
cooperative, mutually beneficial relationship and to avoid potentially costly   
litigation.  The Qwest Settlement Agreement was approved by the Bankruptcy Court
on or about June 21, 2001.                                                      

      Under the Qwest Settlement Agreement, the Debtors agreed to assume
certain executory contracts, as amended, to mutually benefit both parties.  For 
example, the Debtors agreed to assume an agreement regarding the use of certain 
optical fiber capacity after it was modified (i) to reduce the number of fiber  
circuits granted by ICG, and (ii) to require Qwest's payment of certain         
completion costs for the unfinished circuits.  Additionally, the Debtors and    
Qwest amended and restated two existing agreements under which ICG sells        
Internet services to Qwest.  Under the Qwest Settlement Agreement, the Debtors  
also assumed an agreement, as amended, under which Qwest leases certain fiber   
optic capacity from ICG on a "take or pay" basis.                               

  In addition to assuming certain executory contracts, the Qwest
Settlement Agreement resolved issues related to prepetition setoffs.  After a   
careful review of its books and negotiations between the parties, the Debtors   
agreed that Qwest had valid setoff rights with respect to certain of the Qwest  
Prepetition Agreements.  As a result of such negotiations, Qwest agreed to waive
certain claims, and the Debtors agreed to transfer title of certain assets to   
Qwest.  In addition, as a part of the global settlement, Qwest paid $10 million 
to the Debtors for amounts owed during the prepetition period and as additional 
consideration for the global settlement.                                        

       The Debtors, their estates and their creditors received significant
benefits from the Qwest Settlement Agreement including: (a) eliminating         
unsecured claims exceeding $230 million; (b) receiving $10 million in cash; (c) 
modifying its service contract with Qwest to eliminate the risk that current    
revenue levels could materially decrease; and (d) increasing monthly revenue    
received by the Debtors from Qwest by over $1.4 million per month for 36 months 
and over $1 million for the following 24 months.  More importantly, the Qwest   
Settlement Agreement permits the Debtors to continue to have a highly beneficial
and valuable working relationship going forward with one of their largest       
customers, which also happens to be a significant and highly influential company
in the telecommunications industry.                                             

6.   Settlement and Assumption with Respect to Corporate Headquarters 

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         In January 1998, the Debtors established their corporate headquarters
at 161 Inverness Drive West, Englewood, Colorado (the "Headquarters Property"). 
The Headquarters Property includes the Debtors' main office complex, as well as 
a Network Operations Center for monitoring their network. Originally, Debtor ICG
Holdings was the tenant with respect to the Headquarters Property, and the      
lessor was a non-affiliated party, TriNet Essential Facilities X, Inc.          
("TriNet").  Under such lease (the "Headquarters Lease"), which would have      
expired by its own terms on January 31, 2013, ICG Holdings provided TriNet with 
a $10 million security deposit (the "Security Deposit").                        

       Starting in January 1999, a series of transactions were consummated
pursuant to which (a) the Headquarters Property was sold by TriNet to Debtor ICG
Services for approximately $44 million, and (b) ICG Services then sold the      
Headquarters Property to ICG 161, L.P. (the "Partnership").  The Partnership is 
a single-purpose limited partnership formed specifically to own the property and
be the lessor under the Headquarters Lease.  Pursuant to the partnership        
agreement (the "Partnership Agreement"), 99% of the Partnership is owned by ICG 
Corporate Headquarters, L.L.C. (the "ICG Partner"), and 1% is owned by TriNet   
Realty Investments V., Inc., which is an affiliate of TriNet (the "iStar        
Partner").  The ICG Partner is a wholly-owned subsidiary of ICG Services, and   
neither the Partnership nor the ICG Partner is a debtor in these Chapter 11     
Cases.                                                                          

      To finance the purchase of the Headquarters Property, ICG Services
obtained a loan for approximately $33 million from another TriNet affiliate,    
TriNet Realty Capital, Inc. (the "Lender"), secured by a deed of trust (the     
"Deed of Trust") on the Headquarters Property (collectively, the "Loan"). TriNet
utilized the $10 million Security Deposit established by ICG Holdings under the 
Headquarters Lease to pay the balance of the purchase price.  ICG Services      
reimbursed such deposit to ICG Holdings. When ICG Services then sold the        
property to the Partnership, the Partnership assumed the Loan, ICG Services     
became the guarantor with respect thereto, and the Partnership became the       
landlord under the Headquarters Lease.  The parties agreed that the Security    
Deposit did not have to be reinstated at that time.  In sum, ICG Holdings paid  
rent under the Headquarters Lease to the Partnership, which in turn made the    
mortgage payment under the Loan.                                                

          Pursuant to the Partnership Agreement, the iStar Partner had an option
to purchase (the "Purchase Option") the ICG Partner's interest in the           
Partnership and/or purchase the Headquarters Property for approximately $43     
million (the "Option Price") upon certain conditions and in certain             
circumstances (i.e., certain defaults).  If the iStar Partner exercised the     
----                                              
Purchase Option, it could satisfy a portion of the Option Price by assumption of
the Loan (approximately $33 million).  The remaining $10 million of the option  
price, nominally payable to the ICG Partner (ICG Services' wholly-owned         
subsidiary), in fact had to be used to reinstate the $10 million Security       
Deposit under the Headquarters Lease.  Under the terms of the Headquarters      
Lease, the Security Deposit would not be returned until January 2013.           

   In the Spring of 2000, ICG Services entered into a construction
contract (the "Construction Contract") with Bovis Lend Lease ("Bovis") for      
construction of a parking garage (the "Garage") on the Headquarters Property.   
Thereafter, ICG Services failed to pay certain of Bovis' invoices.  As a result,
Bovis and its subcontractors filed significant mechanics' liens, totaling over  
$2.5 million, against the Headquarters Property.  In the Autumn of 2000, Bovis  
shut down the project site, even though construction with respect to the Garage 
was not complete.  Shortly thereafter, Bovis, along with several of its         
subcontractors, began pursuing lien foreclosure actions against the Headquarters

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Property.  These violations arguably constituted triggering events with respect 
to the iStar Partner's Purchase Option because the existence of mechanics' liens
on the Headquarters Property were events of default under the Headquarters Lease
and Partnership Agreement.                                                      

        To resolve the numerous problems associated with the construction of
the Garage and to restructure the ownership interest in the property, on June   
21, 2001 the Debtors obtained Bankruptcy Court approval of a settlement         
agreement with the iStar Partner relating to the Headquarters Property. Under   
the settlement agreement: (a) the Lender exercised its option to purchase the   
Headquarters Property and agreed to fund completion of the Garage up to $7.8    
million (including arrearages and mechanics' liens); (b) the Debtors and the ICG
Partner received a full release from any and all obligations they may have as   
guarantor under the Loan; (c) the Debtors were released from any obligation to  
cure existing and/or past defaults under the Headquarters Lease, the Partnership
Agreement or the Loan; and (d) the Headquarters Lease was amended in several    
significant ways, including deletion of the security deposit requirement,       
extension of the term by ten years, and elimination of the iStar Partner's      
obligation to pay the $10 million in cash.  In conjunction with the settlement  
agreement, the Bankruptcy Court authorized the Debtors to assume the            
Headquarters Lease, as amended in accordance with the terms described above.    

7.   De Minimis Asset Sale Procedure                                  

        Under Section 363 of the Bankruptcy Code, asset sales outside of the
Debtors' ordinary course of business require a separate notice and hearing.  On 
January 31, 2001, the Bankruptcy Court authorized the Debtors to sell assets    
outside of the ordinary course of business without a separate notice and hearing
for each such sale if the sale price for a specified asset or group of related  
assets is $3 million or less (the "De Minimis Asset Sale Order").  In lieu of a 
separate notice and hearing, the Bankruptcy Court authorized the following      
procedure for each such sale: (i) five (5) business days notice of each such    
proposed sale to the U.S. Trustee, counsel for the Creditors' Committee, counsel
to the DIP Agent under the DIP Facility, counsel to the agent under the Pre-    
Petition Credit Facility Agreements, and the holder of any lien, claim or       
encumbrance relating to the proposed property to be sold; (ii) such notice      
parties have five (5) business days to object to the proposed transaction; (iii)
if any such party objects to the proposed transaction within five (5) days, and 
the Debtors and the objecting party cannot resolve the objection utilizing good 
faith efforts, then the Debtors cannot consummate such sale absent Bankruptcy   
Court approval; and (iv) if no such parties object within the specified time    
period, then the Debtors are authorized to consummate the proposed sale.        

     In accordance with the terms of the Bankruptcy Court's De Minimis
Asset Sale Order, the Debtors consummated four De Minimis Asset Sales.          
Specifically, they sold certain office furniture for $480,000, shares in Cienna 
Systems, Inc. for approximately $2 million, certain microwave assets and license
agreements for approximately $1 million, and certain fiber optic cable in       
exchange for a conduit system.                                                  

F.   Settlements with Significant Creditors                                     

1.   Lucent                                                           

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 Lucent Technologies, Inc. (together with its subsidiaries and
affiliates, "Lucent") was the Company's primary supplier of switching equipment 
(the "Lucent Equipment"), which routes voice and data connections in 27 major   
metropolitan areas throughout the country.  The Lucent Equipment, as well as the
contractual right to use software necessary to operate such equipment licenses  
from Lucent (the "Software Rights"), are critical to the Company's ongoing      
operations. The purchase of the Lucent Equipment and the Software Rights are    
contained in a master agreement ("the Lucent Contract").                        

      As of the Petition Date, the Company owed Lucent approximately $82
million (the "Lucent Prepetition Claim") in connection with the agreement to    
purchase the Lucent Equipment and utilize the Software Rights.  Lucent has      
contended that it has ownership rights with respect to certain of the Lucent    
Equipment possessed by the Company and, in addition, that in order to be able to
continue to utilize any of the Software Rights, the Company must assume all     
obligations to Lucent under the Lucent Contract, and thus pay the full amount of
the Lucent Prepetition Claim.  The Company contests these assertions.           

To avoid the expense, uncertainty, and delay associated with
litigation over these issues, the Debtors negotiated a settlement with Lucent.  
As described in Schedule 5.13 of the Plan, under the settlement agreement, on   
-------------                                   
the Effective Date, the Debtors will make a cash payment to Lucent, issue Lucent
an unsecured promissory note, and return to Lucent certain Lucent Equipment that
the Company no longer utilizes. In addition, Lucent will retain a General       
Unsecured Claim in the amount of $___ million. The Company will retain clear    
title to all Lucent Equipment it is utilizing and will be expressly authorized  
to continue to utilize the Software Rights.                                     

2.   Cisco                                                            

     Cisco Systems, Inc. and Cisco Capital (collectively, "Cisco") are
critical vendors to the Company.  Prior to the Petition Date, Cisco was a key   
provider of computer hardware and software necessary for the operation of the   
Company's data network.  Specifically, certain equipment was purchased from     
Cisco Systems, Inc., and, beginning in January 2000, such equipment was acquired
under a master lease agreement with Cisco Capital.                              

 Certain of this equipment is crucial to the operations of the
Company's network.  In addition, Cisco's continued software and equipment       
support will enable the Company to continue providing Internet service to       
customers.  Accordingly, the Debtors have begun negotiations with Cisco with    
respect to a settlement of their prepetition claims, which will include a       
provision regarding Ciscos's ongoing software and equipment support.            

       On the Effective Date of the Plan, the Debtors and Cisco will enter
into a settlement agreement providing for, among other things, the full         
satisfaction of all claims and disputes between the parties arising out of      
agreements, acts or events in existence or occurring prior to the Effective     
Date, as described in Schedule 5.14 of the Plan.                                
-------------                       

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G.   Summary of Claims Process and Bar Date                                     

1.   Schedules and Statements of Financial Affairs                    

 On January 8, 2001, the Debtors filed Schedules of Assets and
Liabilities and Statements of Financial Affairs (collectively, the "Schedules   
and Statements") with the Bankruptcy Court.  Among other things, the Schedules  
and Statements set forth the Claims of known creditors against each the Debtors 
as of the Petition Date, based upon the Debtors' books and records.  Separate   
Schedules and Statements were filed for each of the 26 Debtors.                 

2.   Claims Bar Date and Proofs of Claim                              

       On February 9, 2001, the Debtors filed a motion with the Bankruptcy
Court to establish the general deadline for filing proofs of claim against the  
Debtors by those creditors required to do so (the "Bar Date").  On February 27, 
2001 the Bankruptcy Court established the Bar Date as April 30, 2001.  The      
Bankruptcy Court's order establishing the Bar Date (the "Bar Date Order")       
requires that the Debtors' Claims Agent provide notice of the Bar Date by       
mailing: (i) a notice of Bar Date; (ii) a proof of claim form; and (iii) a      
notice of either unliquidated, contingent and/or disputed claim or liquidated,  
non-contingent and undisputed claim upon the requisite persons or entities.     

     Proofs of claim aggregating over 2,500 in number and in excess of
$16.1 billion have been filed against the Debtors.  A significant amount of the 
proofs of claim filed are either duplicative, are based upon guarantees, or are 
based upon intercompany relationships.  In addition, numerous Claims were       
asserted by various alleged creditors in unliquidated amounts.  The Debtors     
believe that numerous other claims that have been asserted or threatened to be  
asserted are without merit and intend to object to all such Claims.  There can  
be no assurance that the Debtors will be successful in contesting any of such   
Claims.  Although the Debtors' completion of their review of all Claims filed is
anticipated to be completed after the Confirmation Date, based upon the review  
of Claims and reconciliation of Proofs of Claim conducted to date, the Debtors  
believe that General Unsecured Claims are likely to become Allowed Claims in the
approximate aggregate amount of $2.4 billion.  However, the Debtors do not      
anticipate having reviewed and fully analyzed all Proofs of Claim filed in these
cases by the Confirmation Date.  Accordingly, the actual amount of General      
Unsecured Claims (Class 5 Claims) that ultimately become Allowed Claims could   
materially exceed $2.4 billion, and, if so, estimated percentage recoveries for 
holders of Claims in Class 5 could be materially less than as estimated in this 
Disclosure Statement.                                                           

H.   Summary of Material Litigation Matters                                     

      During the Chapter 11 Cases to date, the Debtors commenced or were
involved in a number of lawsuits.  A summary of the significant actions is set  
forth below.  In addition, the Company is a party to certain other litigation   
that has arisen in the ordinary course of business.  The Debtors do not believe 
that the ultimate resolution of these matters will have a material adverse      
effect on the Company's financial condition, results of operations or cash flow.

1.   Shareholder Suits                                                

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  The Company was served with fourteen lawsuits filed by various
shareholders in the United States District Court for the District of Colorado.  
All of the suits name as defendants the Company, the Company's former Chief     
Executive Officer, J. Shelby Bryan, and the Company's former President, John    
Kane.  Additionally, one of the complaints names the Company's former President,
William S. Beans, Jr., as a defendant.  Both Messrs. Bryan and Beans remain on  
the Company's Board of Directors.  All of the complaints seek unspecified       
damages for alleged violations of Rules 10(b) and 20(a) of the Securities       
Exchange Act of 1934.  The complaints seek class action certification for       
similarly situated shareholders.  It is anticipated that the lawsuits will be   
consolidated and that a lead plaintiffs' counsel will be chosen by the Court.   
The Company has tendered these claims to its insurers.                          

          At this time, the claims against the Company have been stayed pursuant
to the Company's filing for bankruptcy.  The claims against the individual      
defendants are proceeding and these defendants have retained separate legal     
counsel to prepare a defense.  Under section 510(b) of the Bankruptcy Code, all 
such Claims against the Company are mandatorily subordinated and thus are       
classified in Class 6.  Holders of Claims and Interests in Class 6 will not     
receive any recovery under the Plan.                                            

2.   ICG Funding Preferred Shareholders Suit                          

        In January 2001, certain shareholders of ICG Funding, a wholly owned
subsidiary of the Company, filed an adversary proceeding in the United States   
Bankruptcy Court for the District of Delaware against the Company and ICG       
Funding. The shareholders in this adversary action sought to recover            
approximately $2.3 million from an escrow account established prior to the      
Petition Date to fund certain dividend payments to holders of the Funding       
Exchangeable Preferred Securities. Because ICG Funding filed for bankruptcy     
protection, it did not declare the last dividend that was to have been paid with
the remaining proceeds of the escrow account. In April 2001, the Company and ICG
Funding obtained Bankruptcy Court approval of a settlement agreement with the   
ICG Funding shareholders. Under the terms of the settlement, the shareholders   
received approximately two-thirds (2/3) of the funds in the escrow account and  
the Company received the remaining one-third (1/3) of the escrowed funds,       
subject to certain contingencies and holdbacks related to shareholders that did 
not participate in the settlement.                                              

I.   Development and Summary of The Business Plan                               

        In the fall of 2000, ICG's management team identified the main areas
of operations and procedures that required change before the Company could      
effect a turn-around to profitability. Six major areas of improvement were      
identified, and objectives and teams were established to resolve the issues.    
These objectives have either been met or are successfully being implemented as  
of the third quarter 2001. Concurrently in the fall of 2000, the Company began  
developing its long-term business plan, reconsidering all products, market      
opportunities, geographic focus, cost structure and strengths, as well as the   
Company's existing asset base, capacity and capital constraints.  As a result of
these efforts, ICG has consistently achieved profitability before interest,     
taxes, depreciation, and amortization since March 2001.                         

     The Company's long-term plan is focused on three primary areas of
business: (1) Dial-Up Service; (2) Point-to-Point Broadband; and (3) Corporate  
Services. The Company believes                                                  

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these areas are the best fit for its current strengths and network architecture,
as well as providing the opportunity for substantial long-term growth           
opportunity.                                                                    

1.   Services to be Offered by Reorganized ICG                        

a.   Dial-Up Access                                         

         ICG plans to maintain and increase its position as a leading provider
of wholesale Dial-Up Internet access service to ISPs and other customers. Most  
of these services are on switch through the Company's owned facilities and      
utilize the Company's network infrastructure including fiber backbone and data  
Points of Presence ("POPs"). The Company can easily expand these services with  
its unutilized switch port, managed modem and IP backbone capacity. The Company 
currently has significant market share and expects to benefit from the          
consolidation of the ISP industry as national ISPs seek the scale, geographic   
scope and network reliability of larger providers such as ICG. ICG is currently 
a vendor for most of the nation's largest ISPs. As of the third quarter 2001,   
the Company had approximately 650,000 Dial-Up ports in service with capacity for
approximately 500,000 additional ports.                                         

         ICG offers primary rate interface ("PRI") ports (one-and two-way) and
managed modem services ("IRAS") to ISPs, carriers and other communications      
service companies such as telemarketing companies. PRI service typically        
involves routing calls from ISP end-users (Internet subscribers dialing-in to   
access the Internet) from the public switched telephone network to the ISP-owned
modem banks. Calls are routed from the public network to the ICG switch, where  
it is sent to the ISP-owned managed modem equipment, typically collocated at the
ICG central office facility. If the ISP is not collocated, a Point-to-Point     
Broadband connection is required between the ISP POP and the ICG central office.
PRI is priced per port per month typically under multi-year contracts. The      
Company's costs are primarily for leased DS3 lines that connect the public      
network to the ICG switch or for leased T1 lines between the ICG switch and ISP 
POP. As part of its cost saving initiatives in late 2000, ICG stopped selling   
PRIs requiring leased circuits and substantially reduced the number of leased   
circuits within its network, lowering costs and increasing its operating margin 
from Dial-Up. IRAS service is a more complete service offering that connects,   
sends and routes customer data traffic using ICG's fiber backbone and peering   
with multiple private and public sites. IRAS is also charged per port, per month
and typically is sold under multi-year contracts. The Company's associated costs
are mainly for the connection charges to the public network, leased PRI in      
cities where ICG does not have a switch, and network backbone and backhaul costs
to transfer traffic to the ICG hub closest to the ISP POP.                      

          The Dial-Up Access market has experienced competitive pricing pressure
and competition from higher speed Internet connection alternatives such as DSL  
and cable access.  ICG's Dial Up Access revenues however, are growing as ISP    
industry consolidation has increased business for national network providers    
such as ICG, and as the Company's reputation for reliable service has improved. 

b.   Point-to-Point Broadband                               

        ICG includes three products in its Point-to-Point Broadband Service:
(i) dedicated bandwidth (traditionally referred to as special access); (ii)     
switched access; and (iii) SS7 service.                                         

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Approximately eighty percent (80%) of revenue in this category is for dedicated 
connections offered at DS-1 to OC-192 capacities (with availability depending   
upon location) and sales are predominantly to other carriers. The Company       
provides dedicated bandwidth to connect (x) carriers to local markets, large    
corporations and other carrier facilities and (y) large corporations to their   
long-distance carrier site and other locations. ICG plans to expand its         
Point-to-Point dedicated services, focusing sales in areas where ICG has local  
fiber and buildings close to or on-net. ICG is targeting carriers, ISPs and     
large businesses.                                                               

        Switched access service includes interstate and intrastate transport
and switching of calls between two carriers or a carrier and end-user.  By using
ICG to switch (terminate or originate) a call, it reduces the long-distance     
carriers local access cost, which is a major operating expense. The switched    
access market is under pricing pressure from the ILECs, thereby reducing        
margins. ICG continues to support its existing customer base, but is not pursing
switched access as a growth line of business.  SS7 services are used to connect 
long-distance companies (including wireless) companies to local networks using  
SS7 signals between network elements to provide faster call set-up and more     
efficient use of network resources.  ICG is one of the few SS7 providers and    
more than half of the Company's SS7 customers buy other services from ICG.      

c.   Corporate Services                                     

  The Company offers Internet access, data and voice services to
corporate customers. The Company's current customer base is primarily located in
California, Ohio, Texas, Colorado and parts of the southeast. ICG's traditional 
service offerings as a competitive local exchange carrier are maintained under  
Corporate Services, although ICG has redirected its focus to target growth in   
data through DIA service to medium to large sized businesses, or those having   
between 50 and 2,000 employees, in its 27 major markets. DIA industry           
projections for T1 and T3 services reflect a compound growth rate of thirteen   
percent (13%) over the next five (5) years as more and more businesses conduct  
purchasing, sales and day-to-day operations using the Internet. ICG believes it 
is well positioned to grow this service with its metropolitan asset base, data  
network infrastructure, and Internet experience.                                

         As part if its cost savings initiative in 2001, the Company sought to
transition its voice customers requiring resold lines to other carriers, thereby
reducing its customer base. The Company's business plan focuses on larger       
customers requiring data services where voice services may be added in a cost-  
efficient manner. During the fourth quarter of 2001, ICG reorganized its sales  
force and added the capability to specifically expand DIA sales starting in     
2002. This service provides dedicated bandwidth from a customer's premise       
directly to the Internet at T1 and T3 speeds using ICG's more than seventy (70) 
peering arrangements. ICG currently offers basic T1 and T3 DIA to corporate     
customers and in 2002 plans to launch value added services such as virtual      
private networking, T3 bursting and service level agreements.                   

2.   Geographic Footprint                                             

       ICG halted an aggressive expansion program in the fourth quarter of
2000 and has defined its footprint to maximize profitability in the near term   
while maintaining appropriate presence in markets where longer-term opportunity 
is believed to exist. Existing port capacity in the identified switch markets   
serves as the basis for future revenue opportunities, while DIA will be expanded
from eight cities in 2001 to other switch markets in 2002. ICG has switches in  
the following markets:                                                          

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                                                                [Download Table]

State or Region        City or County        # of Switches
                                                          
California             Los Angeles           5            
                       Oakland               1            
                       Ontario               1            
                       Orange County         3            
                       Sacramento            2            
                       San Diego             2            
                       San Francisco         2            
                       San Jose              2            
Colorado                                                  
                       Denver                4            
                       Colorado Springs      1            
Ohio                                                      
                       Akron                 1            
                       Cincinnati            1            
                       Cleveland             3            
                       Columbus              2            
                       Dayton                1            
Texas                                                     
                       Austin                1            
                       Corpus Christi        1            
                       Dallas                1            
                       Houston               1            
                       San Antonio           1            
Southeast/Northeast                                       
                       Atlanta               1            
                       Birmingham            1            
                       Charlotte             1            
                       Louisville            1            
                       Nashville             1            
                       Chicago               1            
                       New York              1            

     In the first-half of 2002, the Company plans to expand its switch
market to include: Seattle, Washington; Salt Lake City, Utah; Washington D.C.;  
and Boston, Massachusetts.                                                      

3.   Network and Facilities                                           

a.   Regional Network Assets                                

          ICG's regional assets include 43 voice and data switches located in 27
metropolitan service areas plus approximately 5,540 miles of leased or owned    
regional and metropolitan fiber comprising 165,850 local fiber strand miles.    
The regional network assets support all three primary lines of business.        

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The majority of the Company's metropolitan fiber is built in
Synchronous Optical Network ("SONET") rings that encircle a metropolitan area.  
This ring architecture is intended to be accessible to the largest concentration
of telecommunications intensive business customers within a given market and to 
provide fiber redundancy to ensure uninterrupted service. ICG currently connects
approximately 6,700 buildings to its network through on-net (i.e. connected to  
the ICG network via ICG-owned fiber) and hybrid (connected to the ICG fiber     
network via third party fiber) applications, of which approximately 900         
buildings are connected on-net. In addition, the network is designed to access  
long distance carriers as well as end-user telecommunications traffic in a cost 
efficient manner that lends itself to providing competitive Point-to-Pont       
Broadband services to other carriers.                                           

          ICG has considerable assets in various stages of construction, many of
which are substantially complete.  The majority of these assets are uninstalled 
transport and switch equipment, software development and new network            
construction.  In addition, the Company has some switch equipment that it may   
not complete.  The Company is reviewing options to sell these assets.           

b.   Nationwide Network Architecture                        

    As described in Section III.A, ICG's nationwide fiber optic data
-------------               
backbone has OC-48 long-haul capacity currently operating at OC-3/OC-12 and     
connecting nine (9) major metropolitan areas. The fiber backbone is connected to
data POPs and 26 ATM switches with high performance routers. The Company has    
peering arrangements at seven public peering sites: MAE East (Washington, D.C.),
MAE West (Santa Clara, California), MAE West ATM, MAE Dallas ATM, PacBell (San  
Jose, California), Sprint NAP (Newark, New Jersey), and Ameritech (Chicago,     
Illinois). The Company also has peering arrangements with approximately seventy 
(70) private companies. The Company owns and leases dedicated lines throughout  
the United States, and is currently in the process of consolidating numerous    
dedicated lines and data POPs as part of its cost reduction efforts.            

        The majority of the Company's long-haul capacity is obtained through
20 year indefeasible right of use ("IRU") agreements with Qwest.  The Company   
currently has OC-12 capacity which connects:  San Jose, Los Angeles, Denver,    
Dallas, Atlanta, Washington, D.C., Newark, and Chicago.  The Company plans to   
upgrade routes from Denver and San Jose to Seattle.  The Company has the        
potential to upgrade the current OC-12 routes to OC-48 capacity by placing its  
additional OC-12 capacity into service.                                         

4.   The Projections                                        

         As discussed in more detail in Section IX and Appendix E, the Company
                           ----------     ----------
has prepared pro forma financial projections through December 31, 2005 for the  
Company on a consolidated basis. The Projections are based on numerous          
assumptions, as discussed in Section IX and Appendix E.                         
   ----------     ----------

V.  SUMMARY OF THE PLAN OF REORGANIZATION 

     THIS SECTION PROVIDES A SUMMARY OF THE STRUCTURE, CLASSIFICATION,
TREATMENT AND IMPLEMENTATION OF THE PLAN AND IS QUALIFIED IN ITS ENTIRETY BY    
REFERENCE TO THE PLAN, WHICH ACCOMPANIES THIS DISCLOSURE STATEMENT, AND TO THE  
EXHIBITS ATTACHED THERETO.                                                      

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          THE PLAN ITSELF AND THE DOCUMENTS REFERRED TO THEREIN WILL CONTROL THE
TREATMENT OF CREDITORS AND EQUITY SECURITY HOLDERS UNDER THE PLAN AND WILL, UPON
THE EFFECTIVE DATE, BE BINDING UPON HOLDERS OF CLAIMS AGAINST, OR INTERESTS IN, 
THE DEBTORS, THE REORGANIZED DEBTORS AND OTHER PARTIES IN INTEREST.             

A.   Overall Structure of the Plan                                              

      Chapter 11 is the principal business reorganization chapter of the
Bankruptcy Code. Under Chapter 11, a debtor is authorized to reorganize its     
business for the benefit of its creditors and shareholders. Upon the filing of a
petition for relief under Chapter 11, section 362 of the Bankruptcy Code        
provides for an automatic stay of substantially all acts and proceedings against
the debtor and its property, including all attempts to collect claims or enforce
liens that arose prior to the commencement of the Chapter 11 case.              

 The consummation of a plan of reorganization is the principal
objective of a Chapter 11 case.  A plan of reorganization sets forth the means  
for satisfying claims against and interests in a debtor. Confirmation of a plan 
of reorganization by the Bankruptcy Court makes the plan binding upon the       
debtor, any issuer of securities under the plan, any person or entity acquiring 
property under the plan, and any creditor of or equity security holder in the   
debtor, whether or not such creditor or equity security holder (i) is impaired  
under or has accepted the plan or (ii) receives or retains any property under   
the plan.  Subject to certain limited exceptions and other than as provided in  
the plan itself or the confirmation order, the confirmation order discharges the
debtor from any debt that arose prior to the date of all confirmation of the    
plan and substitutes therefor the obligations specified under the confirmed     
plan, and terminates all rights and interests of equity security holders.       

          The terms of the Debtors' Plan are based upon, among other things, the
Debtors' assessment of their ability to achieve the goals of their Business     
Plan, make the distributions contemplated under the Plan and pay certain of     
their continuing obligations in the ordinary course of the Reorganized Debtors' 
businesses as approved by the Bankruptcy Court. Under the Plan, Claims against, 
and Interests in, the Debtors are divided into Classes according to their       
relative seniority and other criteria.                                          

         If the Plan is confirmed by the Bankruptcy Court and consummated, (i)
the Claims in certain Classes will be reinstated or modified and receive        
distributions equal to the full amount of such Claims, (ii) the Claims of       
certain other Classes will be modified and receive distributions constituting a 
partial recovery on such Claims, and (iii) the Claims and Interests in certain  
other Classes will receive no recovery on such Claims or Interests.  On the     
Effective Date and at certain times thereafter, the Reorganized Debtors will    
distribute Cash, securities and other property in respect of certain Classes of 
Claims as provided in the Plan.  The Classes of Claims against and Interests in 
the Debtors created under the Plan, the treatment of those Classes under the    
Plan and the securities and other property to be distributed under the Plan are 
described below.                                                                

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B.   Substantive Consolidation                                                  

   The  Plan is premised upon the substantive consolidation of the
Debtors only for purposes of the Plan; that is, for voting, confirmation and    
distribution purposes. The Plan does not contemplate the merger of any Debtor   
entity or the transfer or commingling of any asset of any Debtor. Substantive   
consolidation under the Plan will not effect a transfer or commingling of any   
assets of any Debtors, and all assets (whether tangible or intangible) will     
continue to be owned by the respective Debtors.                                 

       Specifically, under the Plan, on the Effective Date, (a) all assets
and liabilities of the Debtors shall be deemed merged or treated as though they 
were merged into and with the assets and liabilities of ICG.; (b) no            
distributions shall made under the Plan on account of Intercompany Claims among 
the Debtors; (c) no distributions shall be made under the Plan on account of    
Subsidiary Interests; and (d) all guarantees of the Debtors of the obligations  
of any other Debtor shall be deemed eliminated so that any claim against any    
Debtor and any guarantee thereof executed by any other Debtor and any joint or  
several liability of any of the Debtors shall be deemed to be one obligation of 
the consolidated Debtors.  Such substantive consolidation (other than for       
purposes related to the Plan) shall not affect (i) the legal and corporate      
structures of Reorganized ICG, subject to the right of the Debtors or           
Reorganized ICG to effect Restructuring Transactions as provided in Article V of
                                                                 ---------
the Plan; (ii) Intercompany Claims, (iii) Subsidiary Interests, and (iv) pre and
post Commencement Date guarantees that are required to be maintained (x) in     
connection with executory contracts or unexpired leases that have been or will  
be assumed, or (y) pursuant to the Plan.                                        

   Generally, substantive consolidation of the estates of multiple
debtors in a bankruptcy case effectively combines the assets and liabilities of 
the multiple debtors for certain purposes under a plan. The effect of           
consolidation is the pooling of the assets of, and claims against, the          
consolidated debtors; satisfying liabilities from a common fund; and combining  
the creditors of the debtors for purposes of voting on reorganization plans.    
There is no statutory authority specifically authorizing substantive            
consolidation. The authority of a Bankruptcy Court to order substantive         
consolidation is derived from its general equitable powers under section 105(a) 
of the Bankruptcy Code, which provides that the court may issue orders necessary
to carry out the provisions of the Bankruptcy Code. Nor are there statutorily   
prescribed standards for substantive consolidation. Instead, judicially         
developed standards control whether substantive consolidation should be granted 
in any given case.                                                              

     The propriety of substantive consolidation must be evaluated on a
case-by-case basis. The extensive list of elements and factors frequently cited 
and relied upon by courts in determining the propriety of substantive           
consolidation may be viewed as variants on two critical factors, namely, (i)    
whether creditors dealt with the entities as a single economic unit and did not 
rely on their separate identity in extending credit or (ii) whether the affairs 
of the debtors are so entangled that consolidation will benefit all creditors.  
Some courts have viewed these elements and factors as examples of information   
that may be useful to courts charged with deciding whether there is substantial 
identity between the entities to be consolidated and whether consolidation is   
necessary to avoid some harm or to realize some benefit.                        

      Among the specific factors or elements looked to by courts are the
following:                                                                      

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     .    the degree of difficulty in segregating and ascertaining the
     individual assets and liabilities of the entities to be
consolidated;                                     

     .    the presence or absence of consolidated financial statements
among the entities to be consolidated;            

   .    the commingling of assets and business functions among the
entities to be consolidated;                      

         .    the unity of interests and ownership among the various entities;

          .    the existence of parent and intercorporate guarantees on loans to
the various entities;                             

        .    the transfer of assets to and from the various entities without
formal observance of corporate formalities; and   

        .    the effect on the percentage recovery of a claim if substantive
 consolidation is allowed compared to administrative
consolidation.                                    

        The Debtors believe that the facts and circumstances surrounding the
historical business operations of ICG and the Subsidiary Debtors support        
substantive consolidation in these Chapter 11 Cases for the limited purposes of 
voting, confirmation and distributions.  Many trade creditors view the Company  
as a single economic unit.  ICG and its Subsidiary Debtors generally have common
officers and directors, and have shared key employees and outside professionals,
including, but not limited to, employees of ICG who perform human resources,    
legal, and risk management services for the benefit of all the Debtors and      
accounting firms, law firms and consultants who rendered services to all of the 
Debtors.  In addition, the Debtors' network operations are highly intertwined   
and dependent upon each other.  Most importantly, the Debtors and their advisors
have analyzed the myriad of issues that would have to be resolved relating to   
Intercompany Claims were the Plan not be premised upon substantive              
consolidation.  The Debtors have concluded that resolving all such issues would 
be a monumental task, would be extremely time consuming, and would have highly  
uncertain results.  Moreover, the Debtors do not believe that  recoveries to    
most creditors are significantly impacted under substantive consolidation.      
Accordingly, the Debtors believe that substantive consolidation for the limited 
purposes of voting, confirmation and distributions is warranted in light of the 
criteria established by the courts in ruling on the propriety of substantive    
consolidation in other cases.                                                   

C.   Classification and Treatment of Claims and Interests                       

Section 1122 of the Bankruptcy Code provides that a plan of 
reorganization must classify the claims and interests of a debtor's creditors   
and equity interest holders.  In accordance with section 1122, the Plan divides 
Claims and Interests into Classes and sets forth the treatment for each Class   
(other than Administrative Claims and Priority Tax Claims which, pursuant to    
section 1123(a)(1), do not need to be classified).  The Debtors also are        
required, under section 1122 of the Bankruptcy Code, to classify Claims against 
and Interests in the Debtors into Classes that contain Claims and Interests that
are substantially similar to the other Claims and Interests in such Class.      

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   The Debtors believe that the Plan has classified all Claims and
Interests in compliance with the provisions of section 1122 and applicable case 
law, but it is possible that a holder of a Claim or Interest may challenge the  
Debtors' classification of Claims and Interests and that the Bankruptcy Court   
may find that a different classification is required for the Plan to be         
confirmed.  In that event, the Debtors intend, to the extent permitted by the   
Bankruptcy Code, the Plan and the Bankruptcy Court, to make such reasonable     
modifications of the classifications under the Plan to permit confirmation and  
to use the Plan acceptances received in this Solicitation for purposes of       
obtaining the approval of the reconstituted Class or Classes of which each      
accepting holder ultimately is deemed to be a member.  Any such reclassification
could adversely affect the Class in which such holder initially was a member, or
any other Class under the Plan, by changing the composition of such Class and   
the vote required of that Class for approval of the Plan.                       

      The amount of any Impaired Claim that ultimately is allowed by the
Bankruptcy Court may vary from any estimated allowed amount of such Claim and   
accordingly the total Claims ultimately allowed by the Bankruptcy Court with    
respect to each Impaired Class of Claims may also vary from any estimates       
contained herein with respect to the aggregate Claims in any Impaired Class.    
Thus, the value of the property that ultimately will be received by a particular
holder of an Allowed Claim under the Plan may be adversely or favorably affected
by the aggregate amount of Claims ultimately allowed in the applicable Class.   

The classification of Claims and Interests and the nature of
distributions to members of each Class are summarized below.  The Debtors       
believe that the consideration, if any, provided under the Plan to holders of   
Claims and Interests reflects an appropriate resolution of their Claims and     
Interests, taking into account the differing nature and priority (including     
applicable contractual and statutory subordination) of such Claims and Interests
and the fair value of the Debtors' assets.  In view of the deemed rejection by  
Class 6, however, as set forth below, the Debtors will seek confirmation of the 
Plan pursuant to the "cramdown" provisions of the Bankruptcy Code.              
Specifically, section 1129(b) of the Bankruptcy Code permits confirmation of a  
Chapter 11 plan in certain circumstances even if the plan has not been accepted 
by all impaired classes of claims and interests.  See Section IX.G.  Although   
                                    --- ------------
the Debtors believe that the Plan can be confirmed under section 1129(b), there 
can be no assurance that the Bankruptcy Court will find that the requirements to
do so have been satisfied.                                                      

1.   Treatment of Unclassified Claims Under the Plan                  

a. Administrative Claims                                    

      The Plan provides that Administrative Claims will be paid in full.
Administrative Claims consist of the actual and necessary costs and expenses of 
the Chapter 11 Cases that are allowed under sections 503(b) and 507(a)(1) of the
Bankruptcy Code.  They include, among other things, the cost of operating the   
Debtors' businesses following the Petition Date (e.g., the post-petition        
salaries and other benefits for the Debtors' employees which the Debtors have   
obtained an order allowing them to pay in the ordinary course of business, post-
petition rent, amounts owed to vendors providing goods and services to the      
Debtors during the Chapter 11 Cases, tax obligations incurred after the Petition
Date, certain statutory fees and charges assessed under 28 U.S.C. (S) 1930) and 
the actual, reasonable fees and expenses of the professionals retained by the   
Debtors and the Creditors' Committee.  All payments to professionals in         
connection with the Chapter 11 Cases for compensation and reimbursement of      
expenses                                                                        

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and all payments to reimburse expenses of members of the Creditors' Committee   
will be made in accordance with the procedures established by the Bankruptcy    
Code and the Bankruptcy Rules and will be subject to approval of the Bankruptcy 
Court based on a reasonableness standard.                                       

          Except as otherwise provided in and subject to the requirements of the
Plan, the Plan provides that on or as soon as reasonably practicable after the  
latest of (i) the Distribution Date, (ii) the date an Administrative Claim      
becomes an Allowed Administrative Claim, or (iii) the date an Administrative    
Claim becomes payable pursuant to any agreement between a Debtor and the holder 
of such Administrative Claim, each holder of an Allowed Administrative Claim    
will receive in full satisfaction, settlement, release and discharge of and in  
exchange for such Allowed Administrative Claim (x) Cash equal to the unpaid     
portion of such Allowed Administrative Claim or (y) such other treatment as to  
which the applicable Debtor and such holder shall have agreed upon in writing;  
provided, however, that Allowed Administrative Claims with respect to           
liabilities incurred by a Debtor in the ordinary course of business during the  
Chapter 11 Cases will be paid in the ordinary course of business in accordance  
with the terms and conditions of any agreements relating thereto.               

         Holders of Administrative Claims based on liabilities incurred by the
Debtors in the ordinary course of their businesses will not be required to file 
or serve any request for payment of such Claims, as these liabilities will be   
assumed by the applicable Reorganized Debtor and paid, performed or settled when
due in accordance with the terms and conditions of the particular agreements    
governing such obligations.                                                     

b. Priority Tax Claims                                      

          Priority Tax Claims are Unsecured Claims asserted by federal and state
governmental authorities for taxes specified in section 507(a)(8) of the        
Bankruptcy Code, such as certain income taxes, property taxes, excise taxes, and
employment and withholding taxes.  These Unsecured Claims are given a statutory 
priority in right of payment.                                                   

    Under the Plan, except to the extent that a holder of an Allowed
Priority Tax Claim has been paid by the Debtors prior to the Distribution Date  
or has agreed in writing to a different treatment, each holder of an Allowed    
Priority Tax Claim will be paid, at the sole discretion of the Debtors, (i)     
equal Cash payments made on the last Business Day of every three-month period   
following the Effective Date, over a period not exceeding six years after the   
assessment of the tax on which such Claim is based, totaling the principal      
amount of such Claim plus simple interest on any outstanding balance from the   
Effective Date calculated at the interest rate available on ninety (90) day     
United States Treasuries on the Effective Date, or (ii) such other treatment as 
to which a Debtor and such holder shall have agreed upon in writing.            

2.   Treatment of Classified Claims and Interests Under the Plan      

a. Unimpaired Classes of Claims                             

(i)  Class 1 - Other Priority Claims                  

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   Class 1 consists of all Claims entitled to priority pursuant to
section 507(a) of the Bankruptcy Code other than Priority Tax Claims or         
Administrative Claims.                                                          

       Under the Plan, on, or as soon as reasonably practicable after, the
latest of (i) the Distribution Date, (ii) the date such Class 1 Claim becomes an
Allowed Class 1 Claim, or (iii) the date such Class 1 Claim becomes payable     
pursuant to any agreement between a Debtor and the holder of such Class 1 Claim,
each holder of an Allowed Class 1 Claim will receive in full satisfaction,      
settlement, release and discharge of and in exchange for such Allowed Class 1   
Claim (x) Cash equal to the unpaid portion of such Allowed Class 1 Claim or (y) 
such other treatment as to which a Debtor and such holder shall have agreed upon
in writing.  Class 1 Claims are Unimpaired and therefore not entitled to vote on
the Plan.                                                                       

(ii)  Class 2 - Other Secured Claims  

         Class 2 consists of separate subclasses of claims that are secured by
a Lien upon property in which the Estate has an interest, to the extent of the  
value of the Claim holders' interest in the Estate's interest in such property, 
as determined pursuant to section 506(a) of the Bankruptcy Code against the     
Debtors other than the Secured Lender Claims included in Class 3 below ("Other  
Secured Claims"). Each subclass is deemed to be a separate Class for all        
purposes under the Bankruptcy Code.                                             

         On the Effective Date, the legal, equitable and contractual rights of
holders of an Allowed Class 2 Claim shall be Reinstated, subject to the         
provisions of Article VIII of the Plan.  The Debtors' failure to object to any  
------------                                        
such Class 2 Claims in the Chapter 11 Cases shall be without prejudice to the   
rights of ICG or the Reorganized Debtors to contest or otherwise defend against 
such Claim in the appropriate forum when and if such Claim is sought to be      
enforced by the Other Secured Claim holder. Notwithstanding section 1141(c) or  
any other provision of the Bankruptcy Code, all pre-petition liens on property  
of any Debtor held by or on behalf of the Other Secured Claim holders with      
respect to such Claims shall survive the Effective Date and continue in         
accordance with the contractual terms of the underlying agreements with such    
Claim holders until, as to each such Claim holder, the Allowed Claims of such   
Other Secured Claim holder are paid in full, subject to the provisions of       
Article VIII of the Plan. Nothing in the Plan or elsewhere shall preclude the   
------------                                                                    
Debtors or Reorganized Debtors from challenging the validity of any alleged lien
on any asset of a Debtor or the value of such collateral. Class 2 Claims are    
Unimpaired and therefore are not entitled to vote on the Plan.                  

b. Impaired Claims and Interests                            

(i)  Class 3 - Secured Lender Claims                  

         Class 3 consists of all Secured Claims of Prepetition Secured Lenders
arising under or as a result of the Pre-Petition Credit Facility Agreements,    
which Claims will be deemed Allowed pursuant to the Plan in the amount of $84.6 
million.                                                                        

      On the Effective Date, each holder of an Allowed Class 3 Claim, in
full satisfaction, settlement, release, and discharge of and in exchange for    
such Allowed Class 3 Claim, will receive on or as soon as practicable after the 
Distribution Date, its Pro Rata share of one-hundred percent (100%) of the New  
Secured Notes.  If Class 3 accepts the Plan, the New Secured Notes shall have   
the terms and                                                                   

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conditions set forth in Plan Exhibit F(1).  If Class 3 does not accept the Plan,
------------          
the New Secured Notes shall have the terms and conditions set forth on Plan     
Exhibit F(2). If Class 3 votes against the Plan, the Debtors shall seek         
------------                                                                    
confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code with
respect to Class 3. Class 3 Claims are Impaired and entitled to vote on the     
Plan.                                                                           

(ii)  Class 4 - Convenience Claims        

          Class 4 consists of any Claim that otherwise would be an Allowed Class
5 Claim against the Debtors in an amount (i) equal to or less than $500, or (ii)
greater than $500 but which is reduced to $500 by an irrevocable written        
election of the holder of such Claim made on a validly executed and timely      
delivered Ballot.                                                               

       On the Effective Date, each holder of an Allowed Class 4 Claim will
receive cash equal to the amount of such Allowed Claim (as reduced, if          
applicable, pursuant to an election by the holder thereof).  Class 4 Claims are 
Impaired and entitled to vote on the Plan.                                      

(iii) Class 5 - General Unsecured Claims  

       Claims in Class 5 are those Claims against the Debtors that are not
Administrative Claims, Priority Tax Claims, Other Priority Claims, Other Secured
Claims, Secured Lender Claims, Convenience Claims, or Subordinated Claims.      

        On the Effective Date, each holder of an Allowed Class 5 Claim shall
receive, in full satisfaction, settlement, release and discharge of and in      
exchange for such Allowed Class 5 Claim: (i) its Pro Rate share of 100% of the  
New Common Shares issued and outstanding as of the Effective Date (subject to   
Dilution); plus (ii) for each holder of an Allowed Class 5 Claim as of the      
Rights Offering Record Date, on the Rights Offering Commencement Date, its      
Rights Offering Pro Rata Share of the Rights Offering Distribution Pool.  See   
                                                                       ---
Exhibit E to the Plan and Section V.G.  Class 5 Claims are Impaired and entitled
---------                 -----------                                           
to vote on the Plan.                                                            

           (iv)  Class 6 - ICG Interests and Subordinated Claims

    Class 6 consists of all ICG Interests and any Claim subordinated
pursuant to sections 510(b) or (c) of the Bankruptcy Code.  Under the Plan, any 
Claim arising out of  the rescission of a purchase or sale of any Old Security, 
any Claim for damages arising from the purchase or sale of an Old Security, or  
any Claim for reimbursement, contribution or indemnification on account of any  
such Claim, shall be automatically subordinated pursuant to Section 510(b) of   
the Bankruptcy Code.  Under the Plan, the holders of ICG Interests and          
Subordinated Claims shall not receive or retain any property under the Plan on  
account of such Interests or Claims.  On the Effective Date, all of the ICG     
Interests shall be deemed cancelled and extinguished.  Class 6 Claims and       
Interests are Impaired and are presumed to receive no distribution under the    
Plan and are therefore deemed to reject the Plan and are not entitled to vote on
the Plan.                                                                       

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3.   Reservation of Rights Regarding Claims                           

      Except as otherwise explicitly provided in the Plan, nothing shall
affect the Debtors' or Reorganized Debtors' rights and defenses, both legal and 
equitable, with respect to any Claims, including, but not limited to, all rights
with respect to legal and equitable defenses to alleged rights of setoff or     
recoupment.                                                                     

D.   Distributions under the Plan                                               

        Except as set forth in the succeeding sentence, the Disbursing Agent
shall make all distributions required under this Plan.  Distributions provided  
for in the Plan on account of Allowed Class 3, 4, and 5 Claims shall be made by 
the Disbursing Agent.                                                           

       If the Disbursing Agent is an independent third party designated by
the Reorganized Debtors to serve in such capacity, such Disbursing Agent shall  
receive, without further Bankruptcy Court approval, reasonable compensation for 
distribution services rendered pursuant to the Plan and reimbursement of        
reasonable out-of-pocket expenses incurred in connection with such services from
the Reorganized Debtors on terms acceptable to the Reorganized Debtors.  No     
Disbursing Agent shall be required to give any bond or surety or other security 
for the performance of its duties unless otherwise ordered by the Bankruptcy    
Court.                                                                          

          Cash payments made pursuant to the Plan will be in U.S. funds by means
agreed to by the payor and the payee, including by check or wire transfer, or,  
in the absence of an agreement, such commercially reasonable manner as the payor
shall determine in its sole discretion.                                         

     Except as otherwise provided in the Plan, any ancillary documents
entered into in connection therewith, or the Confirmation Order, the Debtors    
shall have the right to prepay, without penalty, all or any portion of an       
Allowed Claim at any time; provided, however, that any such prepayment shall not
violate, or otherwise prejudice, the relative priorities among the classes of   
Claims. On the Effective Date, Reorganized ICG shall issue or distribute in     
accordance with the provisions of the Plan all of the New Common Shares, Rights,
and New Secured Notes.                                                          

1.   Distributions for Claims Allowed as of the Effective Date        

a. Distribution Date                                        

       Except as otherwise provided herein or as ordered by the Bankruptcy
Court, distributions to be made on account of Claims that are Allowed Claims as 
of the Effective Date shall be made as soon as practicable after the Effective  
Date.  Distributions on account of Claims that first become Allowed Claims after
the Effective Date shall be made pursuant to Article VIII of the Plan.          
                      ------------
Notwithstanding the date on which any distribution of securities is actually    
made to a holder of a Claim or Interest that is an Allowed Claim or Allowed     
Interest on the Effective Date, as of the date of the distribution such holder  
shall be deemed to have the rights of a holder of such securities distributed as
of the Effective Date.                                                          

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        b. Record Date for Distributions to Holders of Secured Lender Claims
and Old Notes                                         

          Under the Plan, the Distribution Record Date is the Confirmation Date,
unless determined to be otherwise in the Confirmation Order.  At the close of   
business on the Distribution Record Date, the transfer records for the Secured  
Lender Claims and Old Note Holder Claims shall be closed, and there shall be no 
further changes in the record holders of Secured Lender Claims or Old Notes.    
None of Reorganized ICG, the Disbursing Agent, nor the Administrative Agent for 
the Prepetition Secured Lenders shall have any obligation to recognize any      
transfer of such Secured Lender Claims or Old Note holder claims occurring after
the Distribution Record Date and shall be entitled instead to recognize and deal
for all purposes hereunder with only those record holders as of the close of    
business on the Distribution Record Date.                                       

c. Calculation of Distribution Amounts of New Common Shares 

No fractional shares of New Common Shares shall be issued or
distributed under the Plan.  Each Person entitled to receive New Common Shares  
will receive the total number of whole shares of New Common Shares to which such
Person is entitled.  Whenever any distribution to a particular Person would     
otherwise call for distribution of a fraction of a share of New Common Shares   
the actual distribution of shares of such stock shall be rounded to the next    
higher or lower whole number as follows:  (a) fractions one-half ( 1/2) or      
greater shall be rounded to the next higher whole number, and (b) fractions of  
less than one-half ( 1/2) shall be rounded to the next lower whole number.  No  
consideration shall be provided in lieu of fractional shares that are rounded   
down.                                                                           

d. Delivery of Distributions                                

   Distributions to holders of Allowed Claims shall be made by the
Disbursing Agent (a) at the addresses set forth on the Proofs of Claim filed by 
such holders (or at the last known addresses of such holders if no Proof of     
Claim is filed or if the Debtors have been notified of a change of address), (b)
at the addresses set forth in any written notices of address changes delivered  
to the Disbursing Agent after the date of any related Proof of Claim, (c) at the
addresses reflected in the Schedules if no Proof of Claim has been filed and the
Disbursing Agent has not received a written notice of a change of address, or   
(d) at the addresses set forth in a properly completed letter of transmittal    
accompanying securities properly remitted to the Debtors.  If any holder's      
distribution is returned as undeliverable, no further distributions to such     
holder shall be made unless and until the Disbursing Agent is notified of such  
holder's then current address, at which time all missed distributions shall be  
made to such holder without interest.  Amounts in respect of undeliverable      
distributions made by the Disbursing Agent, shall be returned to the Reorganized
Debtors until such distributions are claimed.  All claims for undeliverable     
distributions made by the Disbursing Agent must be made on or before the first  
(1/st/) anniversary of the Effective Date, after which date all unclaimed       
property shall revert to the Reorganized Debtors free of any restrictions       
thereon and the claim of any holder or successor to such holder with respect to 
such property shall be discharged and forever barred, notwithstanding any       
federal or state escheat laws to the contrary.  Nothing contained in the Plan   
shall require the Debtors, Reorganized Debtors, or any Disbursing Agent to      
attempt to locate any holder of an Allowed Claim.                               

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e.   Old Notes                                              

     Except as provided in Article VIII of the Plan in connection with
------------    
lost, stolen, mutilated or destroyed Old Notes, each holder of an Allowed Claim 
evidenced by an Old Note shall tender such Old Note to the Disbursing Agent in  
accordance with written instructions to be provided in a letter of transmittal  
to such holders by the Disbursing Agent as promptly as practicable following the
Effective Date.  Such letter of transmittal shall specify that delivery of such 
notes or Old Notes will be effected, and risk of loss and title thereto will    
pass, only upon the proper delivery of such notes or Old Notes with the letter  
of transmittal in accordance with such instructions.  Such letter of transmittal
shall also include, among other provisions, customary provisions with respect to
the authority of the holder of the applicable note or Old Notes to act and the  
authenticity of any signatures required on the letter of transmittal.  All      
surrendered notes and Old Notes shall be marked as cancelled and delivered by   
the Disbursing Agent to Reorganized ICG.                                        

f.   Lost, Stolen, Mutilated or Destroyed Old Notes         

       In addition to any requirements under the applicable certificate or
articles of incorporation or bylaws of the applicable Debtor, any holder of a   
Claim evidenced by an Old Note that has been lost, stolen, mutilated or         
destroyed shall, in lieu of surrendering the Old Note, deliver to the Disbursing
Agent (i) evidence satisfactory to the Disbursing Agent of the loss, theft,     
mutilation or destruction; and (ii) such indemnity as may be required by the    
Disbursing Agent to hold the Disbursing Agent harmless from any damages,        
liabilities or costs incurred in treating such individual as a holder of an Old 
Note.  Upon compliance with Article VIII of the Plan by a holder of a Claim     
------------            
evidenced by an Old Note, such holder shall, for all purposes under the Plan, be
deemed to have surrendered its Old Note, as applicable.                         

g.   Failure to Surrender Cancelled Old Notes               

          Any holder of an Old Note that fails to surrender or be deemed to have
surrendered such Old Note before the second (2/nd/) anniversary of the Effective
Date shall have its claim for a distribution on account of such Old Note        
discharged and shall be forever barred from asserting any such claim against any
Reorganized Debtor or their respective property.                                

 2.   Resolution and Treatment of Disputed, Contingent, and Unliquidated
Claims and Distributions with Respect Thereto               

a.   Prosecution of Objections                              

       All objections to Claims must be filed and served on the holders of
such Claims by the Claims Objection Deadline.  If an objection has not been     
filed to a Proof of Claim or a scheduled Claim by the Claims Objection Deadline,
the Claim to which the Proof of Claim or scheduled Claim relates will be treated
as an Allowed Claim if such Claim has not been allowed earlier.                 

b.   Authority to Prosecute Objections                      

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            (i)  After the Confirmation Date, only the Reorganized Debtors
will have the authority to file objections, settle, compromise, withdraw or     
litigate to judgment objections to Claims, including Claims for reclamation     
under section 546(c) of the Bankruptcy Code. Except as provided in Article XII  
                                                                 -----------
of the Plan, from and after the Effective Date, the Reorganized Debtors may     
settle or compromise any Disputed Claim without approval of the Bankruptcy      
Court.                                                                          

         (ii) On or before the last Business Day of each month or as
otherwise agreed in writing by the Creditors' Committee or the Claims Resolution
Committee, the Reorganized Debtors will provide counsel to the Claims Resolution
Committee with written notice of each Disputed Class 5 Claim that has been      
settled or compromised in the prior month, other than such settlements or       
compromises that fall within the parameters of settlement guidelines to be      
agreed to by the Debtors and the Creditors' Committee or the Claims Resolution  
Committee. Within ten (10) days after the receipt of such notice, the Claims    
Resolution Committee will provide the Reorganized Debtors with written notice of
any such settlements or compromises with which it does not concur. If the       
Reorganized Debtors and the Claims Resolution Committee cannot reach agreement  
with respect to any such settlement or compromise, the Claims Resolution        
Committee will be permitted to file and serve on the Reorganized Debtors an     
objection to the reasonableness of such settlement or compromise by the last    
Business Day of the month following the month in which the Claims Resolution    
Committee received written notice of the settlement or compromise, with the     
reasonableness of such settlement or compromise to be determined by the         
Bankruptcy Court. If the Claims Resolution Committee does not provide a written 
notice and file and serve an objection as specified in this section with respect
to any particular settlement or compromise, then such settlement or compromise  
will be deemed resolved on the terms and subject to the conditions agreed to by 
the Reorganized Debtors. The Reorganized Debtors and the Claims Resolution      
Committee may modify the foregoing procedures by a writing executed by both.    

c.   Treatment of Disputed Claims                           

        Under the Plan, no payments or distributions will be made on account
of a Disputed Claim or, if less than the entire claim is a Disputed Claim, the  
portion of a Claim that is disputed, until such Claim becomes an Allowed Claim. 

d.   Disputed Claims Reserve                                

         Prior to making any distributions of the New Common Shares to holders
of Allowed Class 5 Claims, the Disbursing Agent shall establish appropriate     
reserves for Disputed Claims in Class 5, to withhold from any such distributions
100% of distributions to which holders of Disputed Claims in Class 5would be    
entitled under the Plan as of such date if such Disputed Claims in Class 5 were 
Allowed Claims in their Disputed Claim Amount. The Disbursing Agent shall also  
establish appropriate reserves for Disputed Claims in other Classes, as it      
determines necessary and appropriate.                                           

          e.   Distributions on Account of Disputed Claims Once They Are Allowed
           and Additional Distributions on Account of Previously Allowed
Claims                                            

        Under the Plan, on each Quarterly Distribution Date, the Reorganized
Debtors will make distributions (a) on account of any Disputed Claim or Disputed
Class 5 Claim that has become an Allowed Claim during the preceding calendar    
quarter and (b) on account of previously Allowed Claims,                        

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from the Disputed Claim reserves, of property that would have been distributed  
to such Claim holders on the dates distributions previously were made to holders
of Allowed Claims had the Disputed Claims that have become Allowed Claims been  
Allowed on such dates. Such distributions will be made pursuant to the          
provisions of the Plan governing the applicable Class. Holders of such Claims   
that are ultimately allowed will also be entitled to receive, on the basis of   
the amount ultimately Allowed, the amount of any dividends or other             
distributions received on account of the shares of New Common Shares and New    
Notes between the Effective Date and the date such shares or notes are          
distributed to such Claim holder.                                               

E.   Dissolution of the Creditors' Committees                                   

1.   Creditors' Committee                                             

        Under the Plan, on the Effective Date, the Creditors' Committee will
dissolve and its members will be released and discharged from all duties and    
obligations arising from or related to the Chapter 11 Cases.  The Professionals 
retained by the Creditors' Committee and the members thereof will not be        
entitled to compensation or reimbursement of expenses for any services rendered 
after the Effective Date.                                                       

2.   Claims Resolution Committee                                      

  On the Effective Date, the Claims Resolution Committee will be
established. The Claims Resolution Committee will consist of three (3)  holders 
of Class 5 Claims who sit on the Creditors' Committee as of the Effective Date  
or other holders selected by the Creditors' Committee.                          

a.   Function and Composition of Committee                  

          The sole functions of the Claims Resolution Committee will be:  (A) in
connection with applications for allowance of compensation and reimbursement of 
expenses for Professionals filed before or after the Effective Date; (B) to     
monitor the Reorganized Debtors' progress in (x) reconciling and resolving      
Disputed Claims and Disputed Class 5 Claim and (y) making distributions on      
account of such Claims once resolved; and (C) to review and assert objections to
the reasonableness of settlements and compromises of such Claims.  The Claims   
Resolution Committee will consist of three holders of Class 5 Claims who sit on 
the Creditors' Committee as of the Effective Date or other holders selected by  
the Creditors' Committee.                                                       

b.   Committee Procedures                                   

        The Claims Resolution Committee will adopt by-laws that will control
its functions. These by-laws, unless modified by the Claims Resolution          
Committee, will provide the following:  (i) a majority of the Claims Resolution 
Committee will constitute a quorum, (ii) one member of the Claims Resolution    
Committee will be designated by the majority of its members as its chairperson, 
(iii) meetings of the Claims Resolution Committee will be called by its         
chairperson on such notice and in such manner as its chairperson may deem       
advisable and (iv) the Claims Resolution Committee will function by decisions   
made by a majority of its members in attendance at any meeting.                 

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          c.   Employment of Professionals by the Committee and Reimbursement of
Committee Members                                 

    The Claims Resolution Committee will be authorized to retain and
employ counsel as reasonably necessary to accomplish its function.  The role of 
the Claims Resolution Committee's professionals will be strictly limited to     
assisting the committee in its functions as set forth herein.  The Reorganized  
Debtors will pay the actual, necessary, reasonable and documented fees and      
expenses of the professionals retained by the Claims Resolution Committee, as   
well as the actual, necessary, reasonable and documented expenses incurred by   
each committee member in the performance of its duties upon the monthly         
submission of bills to the Reorganized Debtors and the members of the Claims    
Resolution Committee.  If no objection to payment is received within thirty (30)
days following delivery of the bill, the bill will be paid by the Reorganized   
Debtors.  Other than as specified in the preceding sentence, the members of the 
Claims Resolution Committee will serve without compensation.  If there is any   
unresolved dispute between the Reorganized Debtors and the Claims Resolution    
Committee, its professionals or a member thereof as to any fees or expenses,    
such dispute will be submitted to the Bankruptcy Court for resolution.  The     
undisputed portion of each bill will be paid on the 31/st/ day after delivery.  

d.   Dissolution of the Committee                           

Subject to further order of the Bankruptcy Court, the Claims
Resolution Committee will dissolve on the date that an officer of the           
Reorganized ICG files and serves on counsel to the Claims Resolution Committee  
by overnight delivery service or facsimile transmission a certification that the
aggregate Face Amount of the remaining Disputed Claims in Class 5 is equal to or
less than $25 million, or on the date that any objection filed to such          
certification is resolved by the Bankruptcy Court such that the aggregate Face  
Amount of the remaining Disputed Claims in Class 5 is equal to or less than $25 
million.  The Claims Resolution Committee may file and serve on the Reorganized 
Debtors an objection to the certification within ten (10) days of receipt       
thereof, with the issue of the aggregate Face Amount of remaining Disputed      
Claims to be determined by the Bankruptcy Court.  The professionals retained by 
the Claims Resolution Committee and the members of the committee will not be    
entitled to compensation or reimbursement of expenses for any services rendered 
after the date of dissolution of the committee. Notwithstanding the foregoing,  
the Claims Resolution Committee will not dissolve until orders regarding final  
requests for compensation by professionals become Final Orders and until the    
Confirmation Order becomes a Final Order.                                       

F.   Post-Consummation Operations of the Debtors                                

1.   Continued Corporate Existence                                    

       Following confirmation and consummation of the Plan, subject to the
Restructuring Transactions, the Reorganized Debtors will continue to exist as   
separate corporate entities in accordance with the laws of their respective     
states of incorporation and pursuant to their respective certificates or        
articles of incorporation and bylaws in effect prior to the Effective Date,     
except to the extent such certificates or articles of incorporation and bylaws  
are amended under the Plan.                                                     

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2.   Cancellation of Old Securities and Agreements                    

       On the Effective Date, except as otherwise provided for herein, (a)
the Old Securities and any other note, bond, indenture, or other instrument or  
document evidencing or creating any indebtedness or obligation of a Debtor,     
except such notes or other instruments evidencing indebtedness or obligations of
a Debtor that are Reinstated or amended and restated under the Plan, shall be   
cancelled, and (b) the obligations of the Debtors under any agreements,         
indentures or certificates of designations governing the Old Securities and any 
other note, bond, indenture or other instrument or document evidencing or       
creating any indebtedness or obligation of a Debtor, except such notes or other 
instruments evidencing indebtedness or obligations of a Debtor that are         
Reinstated or amended and restated under the Plan, as the case may be, shall be 
discharged.                                                                     

3.   Certificates of Incorporation and By-laws                        

    The certificate or articles of incorporation and by-laws of each
Debtor will be amended as necessary to satisfy the provisions of the Plan and   
the Bankruptcy Code and will include, among other things, pursuant to section   
1123(a)(6) of the Bankruptcy Code, a provision prohibiting the issuance of non- 
voting equity securities, but only to the extent required by section 1123(a)(6) 
of the Bankruptcy Code.  The amended Certificates of Incorporation and By-laws  
of Reorganized ICG shall be in substantially the form attached to the Plan as   
Exhibits A and B, respectively.                                                 
----------------                                                                

4.   Restructuring Transactions                                       

          On or after the Effective Date, the applicable Reorganized Debtors may
enter into such transactions and may take such actions as may be necessary or   
appropriate to effect a corporate restructuring of their respective businesses, 
to otherwise simplify the overall corporate structure of the Reorganized        
Debtors, or to reincorporate certain of the Subsidiary Debtors under the laws of
jurisdictions other than the laws of which the applicable Subsidiary Debtors are
presently incorporated.  Such restructuring may include one or more mergers,    
consolidations, restructures, dispositions, liquidations, or dissolutions, as   
may be determined by the Debtors or Reorganized Debtors to be necessary or      
appropriate (collectively, the "Restructuring Transactions").  The actions to   
effect the Restructuring Transactions may include:  (a) the execution and       
delivery of appropriate agreements or other documents of merger, consolidation, 
restructuring, disposition, liquidation, or dissolution containing terms that   
are consistent with the terms of the Plan and that satisfy the applicable       
requirements of applicable state law and such other terms to which the          
applicable entities may agree; (b) the execution and delivery of appropriate    
instruments of transfer, assignment, assumption, or delegation of any asset,    
property, right, liability, duty, or obligation on terms consistent with the    
terms of the Plan and having such other terms to which the applicable entities  
may agree; (c) the filing of appropriate certificates or articles of merger,    
consolidation, or dissolution pursuant to applicable state law; and (d) all     
other actions that the applicable entities determine to be necessary or         
appropriate, including making filings or recordings that may be required by     
applicable state law in connection with such transactions.  The Restructuring   
Transactions may include one or more mergers, consolidations, restructures,     
dispositions, liquidations, or dissolutions, as may be determined by the        
Reorganized Debtors to be necessary or appropriate to result in substantially   
all of the respective assets, properties, rights, liabilities, duties, and      
obligations of certain of the Reorganized Debtors vesting in one or more        
surviving, resulting, or acquiring corporations.  In each case in which the     
surviving, resulting, or acquiring                                              

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corporation in any such transaction is a successor to a Reorganized Debtor, such
surviving, resulting, or acquiring corporation will perform the obligations of  
the applicable Reorganized Debtor pursuant to the Plan to pay or otherwise      
satisfy the Allowed Claims against such Reorganized Debtor, except as provided  
in any contract, instrument, or other agreement or document effecting a         
disposition to such surviving, resulting, or acquiring corporation, which may   
provide that another Reorganized Debtor will perform such obligations.          

Under Article V of the Plan, as part of the Restructuring   
---------                                       
Transactions, on, prior to, or as soon as practicable after, the Effective Date,
Reorganized ICG shall take whatever steps are necessary and appropriate to wind-
up and terminate the following entities' corporate existence: ICG Tevis, Inc.   
(Delaware); ICG Funding, LLC (Delaware); ICG Canadian Acquisition, Inc.         
(Delaware); ICG Holdings (Canada) Co. (Nova Scotia Unlimited Liability Company);
ICG Services, Inc. (Delaware); ICG Enhanced Services, Inc. (Colorado);          
Communications Buying Group, Inc. (Ohio); PTI Harbor Bay, Inc. (Washington); Bay
Area Teleport, Inc. (Delaware); ICG Access Services-Southeast-Inc. (Delaware);  
Trans American Cable, Inc. (Kentucky); ICG Telecom of San Diego, L.P. (CA       
Limited Partnership); Western Plains Finance, L.L.C. (NV Limited Liability      
Company); ICG Telecom Canada, Inc. (Federal Canadian); Zycom Corporation        
(Alberta, Canada); Zycom Corporation (Texas); Zycom Network Services, Inc.      
(Texas); DownNorth, Inc. (Georgia); and ICG NetAhead, Inc. (Delaware).  See     
Appendices (B)(1)-(3) for charts depicting the organization structure of        
----------                                                                      
Reorganized ICG and its affiliates.                                             

G.   Summary of Securities to Be Issued in Connection with the Plan             

1.   New Common Shares                                                

          As of the Effective Date, Reorganized ICG shall issue for distribution
in accordance with the terms of the Plan, the New Common Shares to the holders  
of Allowed Class 5 Claims.  Ten (10) million shares shall be distributed to     
holders of Claims in Class 5, subject to Dilution.  The issuance of the New     
Common Shares and the distribution thereof to holders of Allowed Class 5 Claims 
shall be exempt from registration under applicable securities laws pursuant to  
section 1145(a) of the Bankruptcy Code.                                         

2.   Rights Offering                                                  

          As additional consideration for their Claims, the Plan provides for an
opportunity for holders of Allowed Class 5 Claims as of the Rights Offering     
Record Date to receive Rights to purchase additional New Common Shares.  The    
Rights will be freely tradeable for thirty (30) days, and provide the holders   
thereof with the opportunity to make a new investment in Reorganized ICG on     
terms that the Company believes are favorable. Pursuant to the Rights Offering, 
each holder of an Allowed Class 5 Claim on the Rights Offering Record Date shall
be provided with the opportunity to purchase a proportionate number of          
additional shares of New Common Shares, on the terms and conditions set forth in
Exhibit E to the Plan.  The Debtors believe that the issuance of the Rights, the
---------                                                                       
distribution thereof to holders of Allowed Class 5 Claims as of the Rights      
Offering Distribution Record Date, and the exercise of the Rights, will be      
exempt from registration under applicable securities laws pursuant to section   
1145(a) of the Bankruptcy Code.                                                 

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    The Rights Offering will provide for up to $100 million of gross
proceeds to be raised for the Company, if the Rights Offering is fully          
subscribed.  New Common Shares may be purchased under the Rights Offering based 
upon a market-derived pricing mechanism to be established by the date of the    
Disclosure Statement hearing, which will fix the number of shares of New Common 
Shares that will be available for purchase and the subscription price (the      
"Subscription Price").                                                          

a.   Procedures for Exercise of Rights                      

   The  Rights Offering Commencement Date is the date on which ICG
commences the Rights Offering by mailing to holders of Allowed Class 5 Claims as
of the Rights Offering Record Date certificates representing the Rights and     
instructions for the exercise thereof, which date shall be as soon as           
practicable after the Effective Date of the Plan.  The Rights Offering Record   
Date for determining the holders of Allowed Class 5 Claim Holders entitled to   
exercise the Rights is the Confirmation Date or the date set forth in the       
Confirmation Order.  The Rights Offering Expiration Date is thirty (30)         
calendar days after the date on which all the conditions to the Effective Date  
have occurred; after such date, unexercised Rights will be null and void.  The  
Reorganized Debtor will not be obligated to honor any purported exercise of     
Rights received after the Rights Offering Expiration Date, regardless of when   
the documents relating to such exercise were sent.                              

     Each Right will entitle the holder of an Allowed Class 5 Claim to
purchase at the Subscription Price one (1) New Common Share (the "Subscription  
Privilege").  Certificates representing the New Common Shares purchased pursuant
to the Subscription Privilege will be delivered to subscribers as soon as       
practicable after the Rights Offering Expiration Date.   The Rights, which are  
transferable for thirty (30) days, subject to any applicable federal and state  
law, may be exercised pursuant to an election form (the "Election Form"), which 
will be in substantially the same form as Exhibit C  to the Disclosure          
              ----------
Statement.                                                                      

    Specifically, holders of Allowed Class 5 Claims as of the Rights
Offering Record Date may exercise their Rights by causing the Election Form to  
be delivered to the Rights Offering agent (the "Rights Offering Agent")         
specified in the Election Form at or prior to the Rights Offering Expiration    
Date, having properly completed and executed the "Rights Offering Subscription" 
section of the Election Form, together with payment in full of the Subscription 
Price for each of the New Common Shares subscribed for pursuant to the          
Subscription Privilege.  Payment of the Subscription Price may be made in either
of the following ways: (i) by certified or cashier's check or postal,           
telegraphic or express money order payable to Reorganized ICG, or (ii) by wire  
transfer of funds to the account maintained by the Debtors for the purpose of   
acceptance subscriptions.  The Subscription Price will be deemed to have been   
received by the Company only upon (a) receipt by the designated Rights Offering 
Agent of any certified or cashier's check or of any postal, telegraphic or      
express money order, or (b) receipt of collected funds in the Company's account.
Holders of Allowed Class 5 Claims are urged to make payment sufficiently in     
advance of the Rights Offering Expiration Date to ensure that such payment is   
received and clears by such time.                                               

     If the aggregate Subscription Price paid by an exercising Allowed
Class 5 Claim holder is insufficient to purchase the number of New Common Shares
that such claim holder indicates is being subscribed for, or if an exercising   
Allowed Class 5 Claim holder does not specify the number of New Common Shares to
be purchased, then such party will be deemed to have exercised the Subscription 

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Privilege to purchase New Common Shares to the full extent of the payment       
tendered, excluding any fractional shares.  If the aggregate Subscription Price 
paid by an exercising Allowed Class 5 Claim holder exceeds the amount necessary 
to purchase the number of New Common Shares for which such party has indicated  
an intention to subscribe, then such party will be deemed to have exercised the 
Subscription Privilege (if not already fully exercised) to the full extent of   
the number of shares that may be purchased based on the number of Rights held by
such party.                                                                     

  The instructions accompanying the Election Form should be read
carefully and followed in detail.  ELECTION FORMS SHOULD BE SENT WITH PAYMENT TO
THE RIGHTS OFFERING AGENT.  THE METHOD OF DELIVERY OF ELECTION FORMS AND PAYMENT
OF THE SUBSCRIPTION PRICE TO THE RIGHTS OFFERING AGENT WILL BE AT THE ELECTION  
AND RISK OF THE HOLDER OF THE RIGHTS.  IF SENT BY MAIL, RIGHTS HOLDERS ARE URGED
TO SEND ELECTION FORMS AND PAYMENTS BY REGISTERED MAIL, PROPERLY INSURED, WITH  
RETURN RECEIPT REQUESTED, AND ARE URGED TO ALLOW A SUFFICIENT NUMBER OF DAYS TO 
ENSURE DELIVERY TO THE RIGHTS OFFERING AGENT AND CLEARANCE OF PAYMENT PRIOR TO  
THE RIGHTS OFFERING EXPIRATION DATE.                                            

     Any questions or requests for assistance concerning the method of
exercising Rights or requests for additional copies of this Disclosure Statement
or the Election Form should be directed to the Rights Offering Agent.  Once the 
holder of an Allowed Class 5 Claim has properly exercised the Subscription      
Privilege, such exercise may not be revoked.                                    

b.   Proceeds                                               

         The potential gross proceeds potentially available to Reorganized ICG
from the Rights Offering are $100 million. Fifty percent (50%) of proceeds      
received (subject to a cap of $7.5 million) will be utilized to reduce          
obligations under the New Secured Notes, if Class 3 votes to accept the Plan.   
However, the Rights Offering is not underwritten or guaranteed by any party.    
Accordingly, the Company may not receive any proceeds from the Rights Offering  
whatsoever.  The Debtors believe that the Rights Offering provides holders of   
Allowed Class 5 Claims the opportunity to participate in a new capital          
investment on favorable terms.  THIS DISCLOSURE STATEMENT, AND THE MATERIALS    
ATTACHED HERETO OR SUBMITTED HEREWITH (OR THE STATEMENTS CONTAINED IN ANY OF THE
FOREGOING) DO NOT CONSTITUTE A RECOMMENDATION BY THE DEBTORS, OR ANY OF THEIR   
RESPECTIVE REPRESENTATIVES, AGENTS, OR PROFESSIONALS, REGARDING WHETHER OR NOT A
RIGHTS HOLDER SHOULD EXERCISE THE RIGHTS.  The decision to exercise or not      
exercise the Rights is within the sole discretion of the holder of each of the  
Rights and should be made on the basis of such holder's independent assessment  
of the facts and circumstances.  In that regard, each such holder is encouraged 
to review carefully all of the materials included herewith and any other        
materials deemed relevant by such holder and to consult with such holder's own  
financial and legal advisors.  However, if Rights are not exercised prior to the
Rights Offering Expiration Date, each holder of the Rights is advised that they 
will receive no value from the Rights.                                          

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3.   New Secured Notes                                                

          As of the Effective Date, Reorganized ICG shall issue for distribution
in accordance with the terms of the Plan to holders of Allowed Claims in Class 3
the New Secured Notes.                                                          

     If Class 3 accepts the Plan, the New Secured Notes shall have the
following principal terms and conditions: (i) an aggregate principal amount of  
approximately $85 million (with $20 million potentially in the form of an off   
balance sheet receivable securitization program, if receivables quality and     
structure permits such an instrument); (ii) at ICG's option, an interest rate of
prime plus three hundred (300) basis points or LIBOR plus four hundred (400)    
basis points; (iii) a maturity date of five (5) years from the Effective Date;  
(iv) as security, a first priority lien on substantially all unencumbered assets
of all of Reorganized ICG's entities, excluding working capital and cash on     
hand, and a second priority lien on substantially all other secured assets; (v) 
fifty percent (50%) of any net proceeds from the Rights Offering would reduce   
the principal due up to $7.5 million; and (vi) on each anniversary of the       
Effective Date, principal amortization of five percent (5%), five percent (5%), 
ten percent (10%), and ten percent (10%), respectively.  and  See Exhibit F(1)  
                                                             --- -------------
to the Plan.                                                                    

         If Class 3 does not accept the Plan, the New Secured Notes shall have
the following principal terms and conditions: (i) an aggregate principal amount 
of approximately $85 million; (ii) at ICG's option, an interest rate of prime   
plus one hundred (100) basis points or LIBOR plus two hundred and fifty (250);  
(iii) a maturity date of five (5) years from the Effective Date; (iv) as        
security, a first priority lien on substantially all unencumbered assets of all 
of Reorganized ICG's entities, excluding working capital and cash on hand, and a
second priority lien on substantially all other secured assets; and (v)  no     
principal amortization for two (2) years, and, thereafter, principal            
amortization of ten percent (10%) amortization on each anniversary of the       
Effective Date of the Plan.  See Exhibit F(2) to the Plan.                      
--- ------------      

         The issuance of the New Secured Notes and the distribution thereof to
holders of Allowed Claims in Class 3 shall be exempt from registration under    
applicable securities laws pursuant to section 1145(a) of the Bankruptcy Code.  

4.   Registration Rights Agreement                                    

       Without limiting the effect of section 1145 of the Bankruptcy Code,
Reorganized ICG will enter into a Registration Rights Agreement with each       
Allowed Class 5 Claim holder or holders (a) who by virtue of holding New Common 
Shares to be distributed under the Plan and/or its relationship with Reorganized
ICG holds more than 10% of the Registrable Securities (as defined in the        
Registration Rights Agreement) (by number of shares at the time issued and      
outstanding), both on the date of effectiveness of the Plan and at the time of  
the effectiveness of the Registration Statement, of Reorganized ICG (an         
"Affiliated Stockholder"), and (b) who requests in writing that Reorganized ICG 
execute such agreement.  The Registration Rights Agreements shall contain       
certain demand and piggyback registration rights for the benefit of the         
signatories thereto.  Subject to the terms and conditions of the Registration   
Rights Agreement, Affiliated Stockholders holding at least 15% of the           
Registrable Securities shall be entitled to request the registration of their   
shares by the Company.  Each Affiliated Stockholder shall receive one such      
"demand" right; provided that, in the aggregate, the Affiliated Stockholders    
shall be entitled to no more than two (2) demand registrations.  Subject to the 
terms and conditions of the Registration Rights Agreement, the Affiliated       
Stockholders shall also have                                                    

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the right to include their Registrable Securities in certain registrations by   
the Company. The Registration Rights Agreement shall also contain customary     
provisions regarding the registration rights, including, but not limited to,    
registration procedures, transfer restrictions, withdrawal rights, holdback     
agreements, registration expenses and indemnification. The Registration Rights  
Agreement shall be in substantially the form attached to the Plan as Exhibit D. 
                                                                   ---------
After the New Common Shares have been registered, Reorganized ICG will use best 
efforts to have the New Common Shares listed for trading on a national          
securities exchange.                                                            

H.   Summary of Releases under the Plan                                         

1.   Releases by Debtors                                              

   Pursuant to the Plan, as of the Effective Date, the Debtors and
Reorganized Debtors will be deemed to forever release, waive and discharge all  
claims, obligations, suits, judgments, damages, demands, debts, rights, causes  
of action and liabilities whatsoever in connection with or related to the       
Debtors and the Subsidiaries, the Chapter 11 Cases or the Plan (other than the  
rights of the Debtors or Reorganized Debtors to enforce the Plan and the        
contracts, instruments, releases, indentures, and other agreements or documents 
delivered thereunder) whether liquidated or unliquidated, fixed or contingent,  
matured or unmatured, known or unknown, foreseen or unforseen, then existing or 
thereafter arising, in law, equity or otherwise that are based in whole or part 
on any act, omission, transaction, event or other occurrence taking place on or 
prior to the Effective Date in any way relating to the Debtors, the Reorganized 
Debtors or their Subsidiaries, the Chapter 11 Cases or the Plan, and that may be
asserted by or on behalf of the Debtors or their Estates or the Reorganized     
Debtors against (i) the Debtors' or Subsidiaries' present and former directors, 
officers, employees, agents and professionals as of the Petition Date or        
thereafter and (ii) the Creditors' Committee and its members.                   

2.   Release by Holders of Claims and Interests                       

   Under the Plan, as of the Effective Date, for good and valuable
consideration, the adequacy of  which  is hereby confirmed, each holder of a    
Claim or Interest that affirmatively votes in favor of the Plan shall have      
agreed to forever release, waive and discharge all claims, obligations, suits,  
judgments, damages, demands, debts, rights, causes of action and liabilities    
whatsoever in connection with or related to the Debtors and the Subsidiaries,   
the Chapter 11 Case or the Plan (other than the rights of the Debtors or        
Reorganized Debtors to enforce the Plan and the contracts, instruments,         
releases, indentures, and other agreements or documents delivered thereunder)   
whether liquidated or unliquidated, fixed or contingent, matured or unmatured,  
known or unknown, foreseen or unforseen, then existing or thereafter arising, in
law, equity or otherwise that are based in whole or part on any act, omission,  
transaction, event or other occurrence taking place on or prior to the Effective
Date in any way relating to the Debtors, the Reorganized Debtors or their       
Subsidiaries, the Chapter 11 Case or the Plan, against (i) the Debtors and their
Subsidiaries, (ii) the Debtors' and their Subsidiaries' present and former      
directors, officers, employees, agents and professionals as of the Petition Date
or thereafter and (iii) the Creditors' Committee and its members.               

3.   Injunction Related to Releases                                   

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        As further provided in Article V of the Plan, the Confirmation Order
---------     
will enjoin the prosecution, whether directly, derivatively or otherwise, of any
claim, obligation, suit, judgment, damage, demand, debt, right, cause of action,
liability or interest released, discharged or terminated pursuant to the Plan.  

I.   Compensation and Benefit Programs                                          

          Except and to the extent previously assumed or rejected by an order of
the Bankruptcy Court on or before the Confirmation Date, all employee           
compensation and benefit programs of the Debtors, including programs subject to 
sections 1114 and 1129(a)(13) of the Bankruptcy Code, entered into before or    
after the Petition Date and not since terminated, shall be deemed to be, and    
shall be treated as though they are, executory contracts that are assumed under 
Article VII of the Plan except for (i) executory contracts or plans specifically
-----------                                                                     
rejected pursuant to the Plan (to the extent such rejection does not violate    
sections 1114 and 1129(a)(13) of the Bankruptcy Code) and (ii) executory        
contracts or plans as have previously been rejected, are the subject of a motion
to reject, or have been specifically waived by the beneficiaries of any plans or
contracts; provided, however, that the Debtors' obligations, if any, to pay all 
"retiree benefits" (as defined in section 1114(a) of the Bankruptcy Code) shall 
continue.                                                                       

         In addition, shortly after the Effective Date of the Plan, management
and the designated employees of Reorganized ICG and the other Reorganized       
Debtors shall receive stock options which are more specifically described in the
Management Option Plan, in substantially the form attached to the Plan as       
Exhibit C.  The purpose of the Management Option Plan is to (1) attract and     
---------                                                                       
retain the services of participants whose judgment, interest and special efforts
will contribute to the success of, and enhance the value of, the Company; (2)   
provide incentive compensation that is comparable to the Company's competitors; 
and (3) align participants' personal interests to those of the Company's other  
stockholders.                                                                   

          Specifically, the Management Option Plan authorizes the grant of stock
options related to an aggregate of approximately 1,760,000 New Common Shares,   
which is approximately fifteen percent (15%) of the New Common Shares to be     
issued and outstanding on the Effective Date.  Approximately eighty-nine percent
(89%) of such stock options shall be granted ninety (90) days after the         
Effective Date (the "Initial Grant Date") to individuals determined by the      
Company (the "Initial Stock Options"), and as designated in the Management      
Option Plan attached to the Plan as Exhibit C.  Approximately eleven percent    
 ---------
(11%) of such stock options shall be reserved for future awards by the Board of 
Reorganized ICG.                                                                

         The exercise price of the Initial Stock Options will be the lesser of
(i) the implied reorganization equity value midpoint set forth in this          
Disclosure Statement divided by the number of New Common Shares outstanding on  
the Effective Date, or (ii) the average of the closing price for the New Common 
Shares on the principal securities exchange on which the New Common Shares are  
traded for the five (5) business days preceding the Initial Grant Date.         

         All Initial Stock Options shall vest one-third (1/3) on the date that
is 275 days after the Initial Grant Date, and one-third (1/3) on each of the    
next second and third anniversaries of the Effective Date.  The Management      
Option Plan will be administrated by a committee (the "Compensation Committee"),
appointed by Reorganized ICG's Board.  The Compensation Committee will be       
comprised of at least two (2) non-employee directors.  The Compensation         
Committee may grant to employees                                                

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incentive stock options, non-qualified stock options or a combination thereof.  
Company employees eligible to participate in the Management Option Plan include 
officers and employees of the Company, including employees who are members of   
the Board.                                                                      

J.   Directors And Officers of Reorganized Debtors                              

1.   Appointment                                                      

         The existing senior officers of ICG shall serve initially in the same
capacities after the Effective Date for Reorganized ICG.  The initial board of  
directors of Reorganized ICG shall consist of seven (7) directors.  Such board  
of directors shall be divided into Class I and Class II, with Class I consisting
of four (4) directors, and Class II consisting of three (3) directors.  The     
Creditors' Committee shall be entitled to appoint all Class I directors, and the
Chief Executive Officer shall be entitled to appoint all Class II directors.    
All of the selected directors shall be reasonably acceptable to the Chief       
Executive Officer and the Creditors' Committee.  The Chief Executive Officer    
shall be Chairman of the board of directors.  The Persons designating board     
members shall file with the Bankruptcy Court and give to ICG written notice of  
the identities of such members on a date that is not less than five (5) days    
prior to the Confirmation Hearing; provided, however, that if and to the extent 
that the Creditors' Committee fails to file and give such notice, ICG shall     
designate the members of the board of directors of Reorganized ICG by announcing
their identities at the Confirmation Hearing.                                   

2.   Terms                                                            

         Reorganized ICG board members shall serve for an initial two (2) year
term commencing on the Effective Date as determined be the Debtors.             

3.   Vacancies                                                        

     Until the first annual meeting of shareholders of Reorganized ICG
after the Effective Date, any vacancy in the directorship originally (i)        
selected by the Creditors' Committee shall be filled by a person designated by  
such director as a replacement to serve out the remainder of the applicable     
term; and (ii) selected by the Chief Executive Officer, shall be filled by a    
person designated by the Chief Executive Officer to serve out the remainder of  
the applicable term.                                                            

  4.   Treatment of Director and Officer Indemnification Obligations Under
the Plan                                                                        

         (a) Third-Party Indemnification.  Indemnification Obligations owed to
any present or former professionals or advisors of the Debtors arising out of   
acts that occurred prior to the Petition Date, including, without limitation,   
accountants, auditors, financial consultants, underwriters, or attorneys, shall 
be deemed to be, and shall be treated as though they are, executory contracts   
that are rejected pursuant to section 365 of the Bankruptcy Code under this     
Plan.                                                                           

      (b) Indemnification of Debtors' Directors, Officers and Employees.
Reorganized ICG shall provide standard and customary indemnification for all  
officers and directors (as of the Petition Date and thereafter) for all actions 
or events occurring after the Petition Date. Indemnification Obligations to     
present and former officers and directors for actions or events occurring prior 
to the                                                                          

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Petition Date shall be limited to director and officer liability insurance      
coverage; provided however that all Indemnification Obligations to members of   
-------- -------                                            
the Special Committee, including for actions or events occurring prior to the   
Petition Date, shall be deemed to be, and shall be treated as though they are,  
executory contracts that are assumed pursuant to section 365 of the Bankruptcy  
Code.  In addition, Reorganized ICG shall indemnify present and former officers 
and directors for all legal fees and expenses and shall advance all such fees   
and expenses, as well as any insurance deductibles (if applicable), related to  
any claims or lawsuits for any actions or events occurring prior to the Petition
Date.  Reorganized ICG shall also reimburse the Special Committee and its       
members for legal fees and expenses incurred in connection with the Chapter 11  
Cases and the Plan.                                                             

K.   Revesting of Assets                                                        

       Pursuant to section 1141(b) of the Bankruptcy Code, all property of
each Debtor's Estate, together with any property of each Debtor that is not     
property of its Estate and that is not specifically disposed of pursuant to the 
Plan, shall revest in the applicable Reorganized Debtor on the Effective Date.  
Thereafter, the Reorganized Debtors may operate their businesses and may use,   
acquire and dispose of property free of any restrictions of the Bankruptcy Code,
the Bankruptcy Rules and the Bankruptcy Court.  As of the Effective Date, all   
property of each Reorganized Debtor shall be free and clear of all Liens, Claims
and Interests, except as specifically provided in the Plan or the Confirmation  
Order. Without limiting the generality of the foregoing, each Reorganized Debtor
may, without application to or approval by the Bankruptcy Court, pay fees that  
it incurs after the Effective Date for professional services and expenses.      

L.   Preservation of Rights of Action                                           

          Except as otherwise provided in the Plan or the Confirmation Order, or
in any contract, instrument, release, indenture or other agreement entered into 
in connection with the Plan, in accordance with section 1123(b) of the          
Bankruptcy Code, the Reorganized Debtors shall retain and may enforce, sue on,  
settle or compromise (or decline to do any of the foregoing) all Litigation     
Claims that the Debtors or the Estates may hold against any Person or entity.   
Each Debtor or its successor(s) may pursue such retained Litigation Claims as   
appropriate, in accordance with the best interests of the Reorganized Debtor or 
its successor(s) who hold such rights.  Schedule 5.9 to the Plan contains a non-
            ------------
exclusive list of claims or causes of actions that the Debtors hold or may hold 
either in pending or potential litigation.                                      

       The failure of the Debtors to specifically list any claim, right of
action, suit, or proceeding herein or in the Plan does not, and will not be     
deemed to, constitute a waiver or release by the Debtors of such claim, right of
action, suit, or proceeding, and the Reorganized Debtors will retain the right  
to pursue additional claims, rights of action, suits or proceedings.  In        
addition, at any time before the Effective Date, notwithstanding anything in the
Plan to the contrary, the Debtors or the Reorganized Debtors may settle some or 
all of the Litigation Claims with the approval of the Bankruptcy Court pursuant 
to Fed. R. Bankr. P. 9019.                                                      

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M.   Other Matters                                                              

1.   Treatment of Executory Contracts and Unexpired Leases            

         Under section 365 of the Bankruptcy Code, the Debtors have the right,
subject to Bankruptcy Court approval, to assume or reject any executory         
contracts or unexpired leases.  If the Debtors reject an executory contract or  
unexpired lease that was entered into before the Petition Date, the contract or 
lease will be treated as if it had been breached on the date immediately        
preceding the Petition Date, and the other party to the agreement will have an  
Impaired Unsecured Claim for damages incurred as a result of the rejection.  In 
the case of rejection of employment severance agreements and real property      
leases, damages are subject to certain limitations imposed by sections 365 and  
502 of the Bankruptcy Code.                                                     

a. Assumed Contracts and Leases                             

 Except as otherwise provided in the Plan, or in any contract,
instrument, release, indenture or other agreement or document entered into in   
connection with the Plan, as of the Effective Date each Debtor shall be deemed  
to have assumed each executory contract and unexpired lease to which it is a    
party, including those listed on Schedule 7.1 attached to the Plan, unless such 
------------  
contract or lease (i) was previously assumed or rejected by such Debtor, (ii)   
previously expired or terminated pursuant to its own terms, or (iii) is listed  
on Schedule 7.1 attached to the Plan as being an executory contract or unexpired
------------                                                              
lease to be rejected, provided, however, that the Debtors reserve their right,  
--------  -------                   
at any time prior to the Confirmation Date, to amend Schedule 7.1 to delete any 
                                      ------------
unexpired lease or executory contract therefrom or add any unexpired lease or   
executory contract thereto.  To the extent that an executory contract or        
unexpired lease is not listed on either Schedule 7.1 nor Schedule 7.3, such     
                             ------------     ------------
executory contract or unexpired lease shall be deemed assumed as if such        
executory contract or lease had been included on Schedule 7.1.  The Confirmation
                              ------------
Order shall constitute an order of the Bankruptcy Court under section 365 of the
Bankruptcy Code approving the contract and lease assumptions described above, as
of the Effective Date.                                                          

   Each executory contract and unexpired lease that is assumed and
relates to the use, ability to acquire, or occupancy of real property shall     
include (i) all modifications, amendments, supplements, restatements, or other  
agreements made directly or indirectly by any agreement, instrument, or other   
document that in any manner affect such executory contract or unexpired lease   
and (ii) all executory contracts or unexpired leases appurtenant to the         
premises, including all easements, licenses, permits, rights, privileges,       
immunities, options, rights of first refusal, powers, uses, usufructs,          
reciprocal easement agreements, vaults, tunnel or bridge agreements or          
franchises, and any other interests in real estate or rights in rem related to  
such premises, unless any of the foregoing agreements has been rejected pursuant
to an order of the Bankruptcy Court.                                            

         The Debtors have entered into tens of thousands of contracts with its
customers (the "Customer Contracts").  Under the Plan, to the extent that any of
the Customer Contracts are executory contracts under applicable law, such       
contracts shall be deemed assumed.  Due to the extremely large number of        
Customer Contracts, such contracts are not listed on Schedule 7.1 to the Plan.  
                                      ------------
A list of all of the Customer Contracts is available at the Debtors' corporate  
headquarters, and will be made available                                        

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upon request to the Debtors. The Debtors do not believe any Cure amounts are    
owed in connection with assumption of the Customer Contracts.                   

b. Payments Related To Assumption Of Contracts And Leases   

       Any monetary amounts by which each executory contract and unexpired
lease to be assumed pursuant to the Plan is in default will be satisfied, under 
section 365(b)(1) of the Bankruptcy Code, at the option of the Debtor party     
assuming such contract or lease, by Cure.  If there is a dispute regarding (i)  
the nature or amount of any Cure, (ii) the ability of a Reorganized Debtor or   
any assignee to provide "adequate assurance of future performance" (within the  
meaning of section 365 of the Bankruptcy Code) under the contract or lease to be
assumed, or (iii) any other matter pertaining to assumption, Cure will occur    
following the entry of a Final Order resolving the dispute and approving the    
assumption or assumption and assignment, as the case may be.  The Confirmation  
Order shall contain provisions providing for notices of proposed assumptions and
proposed cure amounts to be sent to applicable third parties and for procedures 
for objecting thereto and resolution of disputes by the Bankruptcy Court.       

c. Rejected Contracts and Leases                            

      On the Effective Date, each executory contract and unexpired lease
listed on Schedule 7.3 to the Plan shall be rejected pursuant to section 365 of 
------------                                                
the Bankruptcy Code.  Each contract or lease listed on Schedule 7.3 shall be    
                                          ------------
rejected only to the extent that any such contract or lease constitutes an      
executory contract or unexpired lease; provided, however, that the Debtors      
               --------  -------
reserve their right, at any time prior to the Confirmation Date, to amend       

Schedule 7.3 to delete any unexpired lease or executory contract therefrom or   
------------                                                                    
add any unexpired lease or executory contract thereto.  To the extent that an   
executory contract or unexpired lease is not listed on either Schedule  7.3 nor 
                                                         -------------
Schedule 7.1, such executory contract or unexpired lease shall be deemed assumed
------------                                                                    
as if such executory contract or lease had been included on Schedule 7.1.       
                                                    ------------
Listing a contract or lease on Schedule 7.1 or Schedule 7.3 shall not constitute
          -----------     ------------
an admission by ICG nor Reorganized ICG that such contract or lease is an       
executory contract or unexpired lease or that ICG or Reorganized ICG has any    
liability thereunder.  The Confirmation Order shall constitute an order of the  
Bankruptcy Court approving such rejections, pursuant to section 365 or 1113 of  
the Bankruptcy Code, as applicable, as of the Effective Date.                   

d. Rejection Damages Bar Date                               

          If the rejection by a Debtor, pursuant to the Plan or otherwise, of an
executory contract or unexpired lease results in a Claim, then such Claim shall 
be forever barred and shall not be enforceable against any Debtor or Reorganized
Debtor or the properties of any of them unless a proof of claim is filed with   
the clerk of the Bankruptcy Court and served upon counsel to the Debtors,       
counsel to the Creditors' Committee, within thirty (30) days after service of   
the earlier of (i) notice of the Confirmation Order, or (ii) other notice that  
the executory contract or unexpired lease has been rejected.                    

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2.   Administrative Claims                                            

          All requests for payment of an Administrative Claim (other than as set
forth in Article III of the Plan) must be filed with the Bankruptcy Court and   
------------                                                  
served on counsel for the Debtors and counsel for the Trustee no later than     
forty-five (45) days after the Effective Date.  Unless the Debtors object to an 
Administrative Claim within forty-five (45) Business Days after receipt, such   
Administrative Claim shall be deemed allowed in the amount requested.  In the   
event that the Debtors object to an Administrative Claim, the Bankruptcy Court  
shall determine the Allowed amount of such Administrative Claim. Notwithstanding
the foregoing, no request for payment of an Administrative Claim need be filed  
with respect to an Administrative Claim which is paid or payable by a Debtor in 
the ordinary course of business.                                                

3.   Professional Fee Claims                                          

        All final requests for compensation or reimbursement of Professional
Fees pursuant to sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy  
Code for services rendered to the Debtors or the Creditors' Committee prior to  
the Effective Date and Substantial Contribution Claims under section 503(b)(4)  
of the Bankruptcy Code must be filed and served on the Reorganized Debtors and  
their counsel no later than sixty (60) days after the Effective Date, unless    
otherwise ordered by the Bankruptcy Court.  Objections to applications of such  
Professionals or other entities for compensation or reimbursement of expenses   
must be filed and served on the Reorganized Debtors and their counsel and the   
requesting Professional or other entity no later than sixty (60) days (or such  
longer period as may be allowed by order of the Bankruptcy Court) after the date
on which the applicable application for compensation or reimbursement was       
served.                                                                         

4.   Withholding and Reporting Requirements                           

    In connection with the Plan and all distributions hereunder, the
Disbursing Agent shall, to the extent applicable, comply with all tax           
withholding and reporting requirements imposed by any federal, state,           
provincial, local or foreign taxing authority, and all distributions hereunder  
shall be subject to any such withholding and reporting requirements.  The       
Disbursing Agent shall be authorized to take any and all actions that may be    
necessary or appropriate to comply with such withholding and reporting          
requirements.  Notwithstanding any other provision of the Plan (i) each holder  
of an Allowed Claim that is to receive a distribution of New Common Shares or   
New Secured Notes pursuant to the Plan shall have sole and exclusive            
responsibility for the satisfaction and payment of any tax obligations imposed  
by any governmental unit, including income, withholding and other tax           
obligations, on account of such distribution, and (ii) no distribution shall be 
made to or on behalf of such holder pursuant to the Plan unless and until such  
holder has made arrangements satisfactory to the Disbursing Agent for the       
payment and satisfaction of such tax obligations.  Any New Common Shares or New 
Secured Notes to be distributed pursuant to the Plan shall, pending the         
implementation of such arrangements, be treated as an undeliverable distribution
pursuant to Article XIII of the Plan.                                           
------------                                            

5.   Setoffs                                                          

      The Reorganized Debtors may, but shall not be required to, set off
against any Claim and the payments or other distributions to be made pursuant to
the Plan in respect of such Claim, claims of                                    

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any nature whatsoever that the Debtors or Reorganized Debtors may have against  
the holder of such Claim; provided, however, that neither the failure to do so  
nor the allowance of any Claim hereunder shall constitute a waiver or release by
the Reorganized Debtors of any such claim that the Debtors or Reorganized       
Debtors may have against such holder.                                           

N.   Confirmation and/or Consummation                                           

  Described below are certain important considerations under the
Bankruptcy Code in connection with confirmation of the Plan.                    

1.   Requirements for Confirmation of the Plan                        

         Before the Plan can be confirmed, the Bankruptcy Court must determine
at the hearing on confirmation of the Plan (the "Confirmation Hearing") that the
following requirements for confirmation, set forth in section 1129 of the       
Bankruptcy Code, have been satisfied:                                           

         a. The Plan complies with the applicable provisions of the Bankruptcy
Code.                                                 

      b. The Debtors have complied with the applicable provisions of the
Bankruptcy Code.                                      

    c. The Plan has been proposed in good faith and not by any means
forbidden by law.                                     

         d. Any payment made or promised by the Debtors or by a person issuing
             securities or acquiring property under the Plan for services or for
             costs and expenses in, or in connection with, the Chapter 11 Cases,
       or in connection with the Plan and incident to the Chapter 11
         Cases, has been disclosed to the Bankruptcy Court, and any such
           payment made before confirmation of the Plan is reasonable, or if
          such payment is to be fixed after confirmation of the Plan, such
       payment is subject to the approval of the Bankruptcy Court as
reasonable.                                           

          e. The Debtors have disclosed (i) the identity and affiliations of (x)
           any individual proposed to serve, after confirmation of the Plan,
      as a director, officer, or voting trustee of the Reorganized
            Debtors, (y) any affiliate of the Debtors participating in a joint
          plan with the Debtors, or (z) any successor to the Debtors under
             the Plan (and the appointment to, or continuance in, such office of
          such individual(s) is consistent with the interests of Creditors
             and Interest holders and with public policy), and (ii) the identity
             of any insider that will be employed or retained by the Debtors and
the nature of any compensation for such insider.      

       f. With respect to each Class of Claims or Interests, each Impaired
            Creditor and Impaired Interest holder either has accepted the Plan
           or will receive or retain under the Plan on account of the Claims
or Interests held by such                             

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            entity, property of a value, as of the Effective Date, that is not
          less than the amount that such entity would receive or retain if
         the Debtors were liquidated on such date under Chapter 7 of the
Bankruptcy Code. See Section XII.                     
--- ------------    

       g. The Plan provides that Administrative Claims and Priority Claims
    other than Priority Tax Claims will be paid in full on the
             Effective Date and that Priority Tax Claims will receive on account
            of such Claims deferred cash payments, over a period not exceeding
            six years after the date of assessment of such Claims, of a value,
       as of the Effective Date, equal to the Allowed Amount of such
            Claims, except to the extent that the holder of any such Claim has
agreed to a different treatment. See Section V.C.     
                            --- ------- ----

          h. If a Class of Claims is Impaired under the Plan, at least one Class
      of Impaired Claims has accepted the Plan, determined without
            including any acceptance of the Plan by insiders holding Claims in
such Class.                                           

   i. Confirmation of the Plan is not likely to be followed by the
           liquidation, or the need for further financial reorganization, of
            the Debtors or any successor to the Debtors under the Plan, unless
         such liquidation or reorganization is proposed in the Plan. See
                                                                     ---
Section IX.D.                                         
-------------                                         

         j. The Plan provides for the continuation after the Effective Date of
            all retiree benefits, if any, at the level established pursuant to
             section 1114(e)(1)(B) or 1114(g) of the Bankruptcy Code at any time
           prior to confirmation of the Plan, for the duration of the period
         the Debtors have obligated themselves to provide such benefits.

   The Debtors believe that, upon receipt of the votes required to
confirm the Plan, the Plan will satisfy all the statutory requirements of       
Chapter 11 of the Bankruptcy Code, that the Debtors have complied or will have  
complied with all of the requirements of Chapter 11, and that the Plan has been 
proposed and submitted to the Bankruptcy Court in good faith.                   

2.   Conditions to Confirmation and Consummation                      

a. Conditions to Confirmation                               

   The following are conditions precedent to the occurrence of the
Confirmation Date:  (i) the entry of an order finding that the Disclosure       
Statement contains adequate information pursuant to section 1125 of the         
Bankruptcy Code, and (ii) the proposed Confirmation Order shall be in form and  
substance acceptable to the Debtors and the Creditors' Committee.               

b. Conditions to Effective Date                             

   The following are conditions precedent to the occurrence of the
Effective Date, each of which may be satisfied or waived in accordance with     
Article X of the Plan:                                                          
----------                                                                      

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             (i) The Confirmation Order shall have been entered and become a
                  Final Order in form and substance reasonably satisfactory to
the Debtors and shall:                    

                  (1) provide that the Debtors and Reorganized Debtors are
                       authorized and directed to take all actions necessary
                        or appropriate to enter into, implement and consummate
               the contracts, instruments, releases, leases,
                         indentures and other agreements or documents created in
               connection with the Plan or the Restructuring
Transactions;                 

             (2)  authorize the issuance of the New Common Shares,
                        Management Options, the Rights, and New Secured Notes;
and                           

                 (3)  find that the New Common Shares, the Rights, and the
                         New Secured Notes issued under the Plan in exchange for
                         Claims against the Debtors are exempt from registration
                      under the Securities Act of 1933 pursuant to section
                       1145 of the Bankruptcy Code except to the extent that
                      holders of the New Common Shares, the Rights, or the
                         New Secured Notes or Rights are "underwriters," as that
                         term is defined in section 1145 of the Bankruptcy Code.

           (ii)  All Plan Exhibits shall be in form and substance reasonably
                acceptable to the Debtors and the Creditors' Committee and
shall have been executed and delivered.   

            (iii) All actions, documents and agreements necessary to implement
    the Plan shall have been effected or executed.

O.   Effects of Confirmation                                                    

1.   Binding Effect                                                   

          The Plan will be binding upon and inure to the benefit of the Debtors,
all present and former holders of Claims against the Debtors, whether or not    
such holders will receive or retain any property or interest in property under  
the Plan, their respective successors and assigns, including, but not limited   
to, the Reorganized Debtors, and all parties-in-interest in the Chapter 11      
Cases.                                                                          

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2.   Discharge of the Debtors                                         

          Except as otherwise provided in the Plan or in the Confirmation Order,
all consideration distributed under the Plan will be in exchange for, and in    
complete satisfaction, settlement, discharge, and release of, all Claims (other 
than those Reinstated under the Plan) of any nature whatsoever against the      
Debtors or any of their assets or properties, and regardless of whether any     
property will have been distributed or retained pursuant to the Plan on account 
of such Claims, and upon the Effective Date, the Debtors shall (i) be deemed    
discharged and released under section 1141(d)(1)(A) of the Bankruptcy Code from 
any and all Claims, including, but not limited to, demands and liabilities that 
arose before the Confirmation Date, and all debts of the kind specified in      
sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not (a) a  
Proof of Claim based upon such debt is filed or deemed filed under section 501  
of the Bankruptcy Code, (b) a Claim based upon such debt is Allowed under       
section 502 of the Bankruptcy Code, or (c) the holder of a Claim based upon such
debt accepted the Plan and (ii) terminate all ICG Interests.                    

      As of the Confirmation Date, except as provided in the Plan or the
Confirmation Order, all entities shall be precluded  from asserting against the 
Debtors or the Reorganized Debtors, any other or further claims, debts, rights, 
causes of action, liabilities or equity interests relating to the Debtors based 
upon any act, omission, transaction or other activity of any nature that        
occurred prior to the Confirmation Date.  In accordance with the foregoing,     
except as provided in the Plan or the Confirmation Order, the Confirmation Order
shall be a judicial determination of discharge of all such Claims and other     
debts and liabilities against the Debtors and termination of all ICG Interests, 
pursuant to sections 524 and 1141 of the Bankruptcy Code, and such discharge    
shall void any judgment obtained against the Debtors at any time, to the extent 
that such judgment relates to a discharged Claim or terminated Interest.        

3.   Permanent Injunction                                             

       Except as provided in the Plan or the Confirmation Order, as of the
Confirmation Date, all entities that have held, currently hold or may hold a    
Claim or other debt or liability that is discharged or an Interest or other     
right of an equity security holder that is terminated pursuant to the terms of  
the Plan are permanently enjoined from the taking of any of the following       
actions against the Debtors, the Reorganized Debtors or their property on       
account of any such discharged Claims, debts or liabilities or terminated       
interests or rights:  (a) commencing or continuing, in any manner or in any     
place, any action or other proceeding; (b) enforcing, attaching, collecting or  
recovering in any manner any judgment, award, decree or order; (c) creating,    
perfecting or enforcing any lien or encumbrance; (d) asserting a setoff, right  
of subrogation or recoupment of any kind against any debt, liability or         
obligation due to the Debtors; and (e) commencing or continuing any action, in  
any manner, in any place that does not comply with or is inconsistent with the  
provisions of the Plan.                                                         

         As of the Effective Date, all entities that have held, currently hold
or may hold a claim, demand, debt, right, cause of action or liability that is  
released pursuant to Section 5.12 or Section 12.11 of the Plan are permanently  
------------    -------------         
enjoined from taking any of the following actions on account of such released   
claims, obligations, suits, judgments, damages, demands, debts, rights, causes  
of action or liabilities: (a) commencing or continuing in any manner any action 
or other proceeding; (b) enforcing, attaching, collecting or recovering in any  
manner any judgment, award, decree or order; (c) creating, perfecting or        
enforcing any lien or encumbrance; (d) asserting a setoff, right of subrogation 
or                                                                              

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recoupment of any kind against any debt, liability or obligation due to any     
released entity; and (e) commencing or continuing any action, in any manner, in 
any place that does not comply with or is inconsistent with the provisions of   
the Plan.                                                                       

     By accepting distribution pursuant to the Plan, each holder of an
Allowed Claim or Allowed Interest receiving distributions pursuant to the Plan  
will be deemed to have specifically consented to the injunctions set forth in   
Article XII of the Plan.                                                        
-----------                                                                     

4.   Exculpation and Limitation on Liability; Indemnity               

Neither the Debtors, the Reorganized Debtors, the Creditors'
Committee, nor any of their respective present or former members, officers,     
directors, employees, advisors, attorneys, or agents, shall have or incur any   
liability to any holder of a Claim or an Interest, or any other party in        
interest, or any of their respective agents, employees, representatives,        
financial advisors, attorneys, or affiliates, or any of their successors or     
assigns, for any act or omission in connection with, relating to, or arising out
of, the Chapter 11 Case, formulating, negotiating or implementing the Plan, the 
solicitation of acceptances of the Plan, the pursuit of confirmation of the     
Plan, the confirmation of the Plan, the consummation of the Plan, or the        
administration of the Plan or the property to be distributed under the Plan,    
except for their willful misconduct, and in all respects shall be entitled to   
reasonably rely upon the advice of counsel with respect to their duties and     
responsibilities under the Plan.                                                

         Notwithstanding any other provision of the Plan, no holder of a Claim
or Interest, no other party in interest, none of their respective agents,       
employees, representatives, financial advisors, attorneys, or affiliates, and no
successors or assigns of the foregoing, shall have any right of action against  
any Debtor or Reorganized Debtor, the Creditors' Committee, nor any of their    
respective present or former members, officers, directors, employees, advisors, 
attorneys, for any act or omission in connection with, relating to, or arising  
out of, the Chapter 11 Cases, formulating, negotiating or implementing the Plan,
solicitation of acceptances of the Plan, the pursuit of confirmation of the     
Plan, the consummation of the Plan, the confirmation  of the Plan, or the       
administration of the Plan or the property to be distributed under the Plan,    
except for their willful misconduct.                                            

      Reorganized ICG shall indemnify each Person exculpated pursuant to
Section 12.11 of the Plan against, hold each such Person harmless from, and     
-------------                                                                   
reimburse each such Person for any and all losses, costs, expenses (including   
attorneys' fees and expenses), liabilities and damages sustained by such Person 
arising from any liability described above.                                     

    The foregoing exculpation and limitation on liability shall not,
however, limit, abridge, or otherwise affect the rights of the Reorganized      
Debtors to enforce, sue on, settle, or compromise the Litigation Claims retained
pursuant to Article V of the Plan.                                              
---------                                               

P.   Retention of Jurisdiction                                                  

    Pursuant to sections 105(a) and 1142 of the Bankruptcy Code, and
notwithstanding entry of the Confirmation Order and occurrence of the Effective 
Date, the Bankruptcy Court will retain exclusive jurisdiction over all matters  
arising out of, and related to, the Chapter 11 Cases and the Plan, including,   
among other things, jurisdiction to:                                            

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     a.   Allow, disallow, determine, liquidate, classify, estimate or
          establish the priority or secured or unsecured status of any
               Claim or Interest not otherwise allowed under the Plan, including
             the resolution of any request for payment of any Administrative
            Claim and the resolution of any objections to the allowance or
priority of Claims or Interests;                  

 b.   Hear and determine all applications for compensation and
          reimbursement of expenses of Professionals under the Plan or
         under sections 330, 331, 503(b), 1103 and 1129(a)(4) of the
         Bankruptcy Code; provided, however, that from and after the
         Effective Date, the payment of the fees and expenses of the
             retained Professionals of the Reorganized Debtors shall be made
            in the ordinary course of business and shall not be subject to
the approval of the Bankruptcy Court;             

         c.   Hear and determine all matters with respect to the assumption or
               rejection of any executory contract or unexpired lease to which a
        Debtor is a party or with respect to which a Debtor may be
          liable, including, if necessary, the nature or amount of any
         required Cure or the liquidation or allowance of any Claims
arising therefrom;                                

       d.   Effectuate performance of and payments under the provisions of
the Plan;                                         

       e.   Hear and determine any and all adversary proceedings, motions,
              applications, and contested or litigated matters arising out of,
under, or related to, the Chapter 11 Cases;       

         f.   Enter such orders as may be necessary or appropriate to execute,
         implement, or consummate the provisions of the Plan and all
       contracts, instruments, releases, and other agreements or
           documents created in connection with the Plan, the Disclosure
Statement or the Confirmation Order;              

   g.   Hear and determine disputes arising in connection with the
             interpretation, implementation, consummation, or enforcement of
              the Plan, including disputes arising under agreements, documents
  or instruments executed in connection with the Plan;

   h.   Consider any modifications of the Plan, cure any defect or
          omission, or reconcile any inconsistency in any order of the
               Bankruptcy Court, including, without limitation, the Confirmation
Order;                                            

          i.   Issue injunctions, enter and implement other orders, or take such
          other actions as may be necessary or appropriate to restrain
              interference by any entity with implementation, consummation, or
enforcement of the Plan or the Confirmation Order;

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j.   Enter and implement such orders as may be necessary or 
               appropriate if the Confirmation Order is for any reason reversed,
stayed, revoked, modified, or vacated;            

     k.   Hear and determine any matters arising in connection with or
              relating to the Plan, the Disclosure Statement, the Confirmation
             Order, or any contract, instrument, release, or other agreement
             or document created in connection with the Plan, the Disclosure
Statement or the Confirmation Order;              

l.   Enforce all orders, judgments, injunctions, releases,  
              exculpations, indemnifications and rulings entered in connection
with the Chapter 11 Cases;                        

      m.   Except as otherwise limited herein, recover all assets of the
             Debtors and property of the Debtors' Estates, wherever located;

        n.   Hear and determine matters concerning state, local, and federal
         taxes in accordance with sections 346, 505, and 1146 of the
Bankruptcy Code;                                  

         o.   Hear and determine all disputes involving the existence, nature,
or scope of the Debtors' discharge;               

        p.   Hear and determine such other matters as may be provided in the
      Confirmation Order or as may be authorized under, or not
       inconsistent with, provisions of the Bankruptcy Code; and

q.   Enter a final decree closing the Chapter 11 Cases.     

VI.  CERTAIN FACTORS TO BE CONSIDERED             

       The holder of a Claim against the Debtors should read and carefully
consider the following factors, as well as the other information set forth in   
this Disclosure Statement (and the documents delivered together herewith and/or 
incorporated by reference herein), before deciding whether to vote to accept or 
reject the Plan.                                                                

A.   General Considerations                                                     

        The Plan sets forth the means for satisfying the Claims against each
of the Debtors. Certain Claims and Interests receive no distributions pursuant  
to the Plan.  Reorganization of certain of the Debtors' businesses and          
operations under the proposed Plan also avoids the potentially adverse impact of
a liquidation on those Debtors' employees and other stakeholders.               

B.   Certain Bankruptcy Considerations                                          

      Even if all Impaired voting classes vote in favor of the Plan, and
with respect to any Impaired Class deemed to have rejected the Plan and the     
requirements for "cramdown" are met, the                                        

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Bankruptcy Court, which, as a court of equity, may exercise substantial         
discretion, may choose not to confirm the Plan. Section 1129 of the Bankruptcy  
Code requires, among other things, a showing that confirmation of the Plan will 
not be followed by liquidation or the need for further financial reorganization 
of the Debtors, (see Section IX.D), and that the value of distributions to      
--- ------------                              
dissenting holders of Claims and Interest may not be less than the value such   
holders would receive if the Debtors were liquidated under Chapter 7 of the     
Bankruptcy Code. See Section IX.E. Although the Debtors believe that the Plan   
-------------                         
will meet such tests, there can be no assurance that the Bankruptcy Court will  
reach the same conclusion. See Appendix D annexed hereto for a liquidation      
----------        
analysis of the Debtors.                                                        

         The Plan provides for certain conditions that must be fulfilled prior
to confirmation of the Plan and the Effective Date.  As of the date of this     
Disclosure Statement, there can be no assurance that any or all of the          
conditions in the Plan will be met (or waived) or that the other conditions to  
consummation, if any, will be satisfied.  Accordingly, even if the Plan is      
confirmed by the Bankruptcy Court, there can be no assurance that the Plan will 
be consummated and the restructuring completed.  If a liquidation or protracted 
reorganization were to occur, there is a substantial risk that the value of the 
Debtors' enterprise would be substantially eroded to the detriment of all       
stakeholders.                                                                   

C.   Inherent Uncertainty of Financial Projections                              

  The Projections to be set forth in Appendix E hereto cover the
                    ----------
Debtors' operations through fiscal December 31, 2005.  These Projections are    
based on numerous assumptions that are an integral part of the Projections,     
including confirmation and consummation of the Plan in accordance with its      
terms, realization of the operating strategy of the Reorganized Debtors,        
industry performance, no material changes in applicable legislation or          
regulations, exchange rates, or generally accepted accounting principles,       
general business and economic conditions, competition, adequate financing,      
success of the Rights Offering, absence of material contingent or unliquidated  
litigation or indemnity claims, and other matters, many of which will be beyond 
the control of the Reorganized Debtors and some or all of which may not         
materialize.  In addition, unanticipated events and circumstances occurring     
subsequent to the date of this Disclosure Statement may affect the actual       
financial results of the Reorganized Debtors' operations.  Accordingly, the     
actual performance may vary significantly from those set forth in the           
Projections.  Consequently, the projected financial information contained herein
should not be regarded as a representation or warranty by the Debtors, the      
Debtors' advisors, or any other person that the Projections can or will be      
achieved. See Section VI.                                                       
--- -----------                                             

D.   Lack of Established Market for the New Securities                          

   There will be no existing market for the New Common Shares, the
Rights, or New Secured Notes and there can be no assurance that an active market
for such securities will develop or, if any such market does develop, that it   
will continue to exist.  Also, there can be no assurance as to the degree of    
price volatility, or the liquidity for any of the New Securities, in any such   
market that does develop.                                                       

     As of the Petition Date, the Old Common Shares were traded on the
NASDAQ.  The NASDAQ has certain listing criteria applicable to companies listed 
on such exchanges, including financial criteria and minimum requirements as to  
the number of holders of listed securities. On                                  

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November 18, 2000, shortly after the Petition Date, the NASDAQ halted trading of
the Old Common Shares and initiated delisting procedures. The Debtors will use  
reasonable efforts to have the New Common Shares listed on a national securities
exchange. However, there can be no assurance that Reorganized ICG will be       
successful in listing its securities with any exchange. In the event that       
Reorganized ICG is unable to cause any of the New Common Shares to be listed on 
any exchange or quoted on any quotation system, the liquidity of the New Common 
Shares would be materially impaired.                                            

E.   Restricted Resale of the New Securities                                    

       The New Securities will be distributed pursuant to the Plan without
registration under the Securities Act and without qualification or registration 
under State Laws, pursuant to exemptions from such registration and             
qualification contained in section 1145(a) of the Bankruptcy Code. With respect 
to certain persons who receive such securities pursuant to the Plan, these      
Bankruptcy Code exemptions apply only to the distribution of such securities    
under the Plan and not to any subsequent sale, exchange, transfer or other      
disposition of such securities or any interest therein by such persons.         
Therefore, subsequent sales, exchanges, transfers or other disposition of such  
securities or any interest therein by "underwriters" or "issuers" would not be  
exempted by section 1145 of the Bankruptcy Code from registration under the     
Securities Act or the State Laws.                                               

         Additionally, New Securities may not be sold, exchanged, transferred,
or otherwise disposed of without registration or qualification under the State  
Laws unless specific exemptions from such registration or qualification         
requirements are available with respect to such sale, exchange, transfer, or    
disposition.  See Section VII.                                                  
-----------                                 

F.   Telecommunications Competition                                             

         ICG experiences competition from numerous types of telecommunications
service providers, including inter-exchange carriers, long-haul providers, local
telephone companies, broadband cable television companies and fixed wireless    
providers.  Accordingly, there can be no assurance that ICG will be able to     
compete successfully against other providers of such services, or that ICG will 
be able to achieve profitability from such services in future years.            

       In addition, the telecommunications services industry in general is
subject to rapid and significant changes in technology.  These changes may      
increase competitive pressures on Reorganized ICG or require capital investments
by Reorganized ICG in excess of its available resources.  Because the rapid and 
high level of technological change in the industry, the effect on the businesses
of Reorganized ICG cannot be predicted with any certainty.                      

G.   Government Regulation                                                      

       The telecommunications industry is extensively regulated by the FCC
and state public utility commissions.  For example, the FCC is required to grant
prior approval of any assignment or transfer of control involving an entity that
holds an FCC license.  Because of the inherent uncertainties in the application 
process (e.g., a challenge to the FCC applications and composition of ownership 
of voting securities), there can be no assurance that such applications will be 
granted within two to three months of their filing or at all.                   

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H.   Reliance on Key Personnel                                                  

One of the Debtors' primary assets is their highly skilled  
professionals, who have the ability to leave the Debtors and so deprive them of 
the skill and knowledge essential for performance of new and existing contracts.
The Debtors operate a business that is highly dependent on highly skilled       
employees, who will perform tasks of the highest standards over an extended     
period of time. A loss of a significant number of key professionals will have a 
material adverse effect on the Debtors and may threaten their ability to survive
as going concerns.                                                              

        The Debtors' successful transition through the restructuring process
is dependent in part on their ability to retain and motivate their officers and 
key employees.  There can be no assurance that the Debtors will be able to      
retain and employ qualified management and technical personnel.  The Debtors    
obtained Bankruptcy Court approval of a bonus program designed to retain certain
of their key employees, but there is no guarantee that such program will have   
the intended effect.  See Section IV.                                           
----------                  

VII.  APPLICABILITY OF FEDERAL AND OTHER SECURITIES LAWS

       No registration statement will be filed under the Securities Act or
any state securities laws with respect to the issuance or subsequent transfer of
the New Common Shares, the Rights, or New Secured Notes under the Plan.  The    
Debtors believe that, subject to certain exceptions described below, various    
provisions of the Securities Act, the Bankruptcy Code and state securities laws 
exempt from federal and state securities registration requirements (i) the offer
and the sale of such securities pursuant to the Plan; and (ii) subsequent       
transfers of such securities.                                                   

A.   Offer and Sale of New Securities, Pursuant to the Plan:  Bankruptcy Code   
Exemption from Registration Requirements                              

        Section 1145(a)(1) of the Bankruptcy Code exempts the offer and sale
of securities under a plan of reorganization from registration under both the   
Securities Act and state securities laws, if three principal requirements are   
satisfied: (i) the securities must be issued "under a plan" of reorganization by
the debtor or its successor under a plan or by an affiliate participating in a  
joint plan of reorganization with the debtor; (ii) the recipients of the        
securities must hold a pre-petition or administrative expense claim against the 
debtor or an interest in the debtor; and (iii) the securities must be issued    
entirely in exchange for the recipient's claim against or interest in the       
debtor, or "principally" in such exchange and "partly" for cash or property.    
The Debtors believe that the offer and sale of the New Common Shares, the       
Rights, and the New Secured Notes under the Plan satisfies the requirements of  
section 1145(a)(1) of the Bankruptcy Code and is, therefore, exempt from        
registration under the Securities Act and state securities laws.                

B.   Subsequent Transfers of New Securities                                     

1.   Federal Securities Laws: Section 1145(c) of the Bankruptcy Code  

     Section 1145(c) of the Bankruptcy Code deems any offer or sale of
securities of the kind and in the manner specified in section 1145(a)(1) of the 
Bankruptcy Code to have been a public offering. Accordingly, the New Secured    
Notes, the Rights, and New Common Shares generally will be freely               

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transferable by holders of Claims under the Securities Act unless the Holder is 
deemed, by section 1145(b) of the Bankruptcy Code, to be an "underwriter" for   
purposes of section 2(11) of the Securities Act with respect to such securities.
Section 1145(b) of the Bankruptcy Code deems any entity to be an "underwriter"  
under section 2(11) of the Securities Act, if such entity:                      

a.   purchases a claim against, interest in, or claim for an
           administrative expense in the case concerning, the debtor, if
       such purchase is with a view to distributing any security
received in exchange for such a claim or interest;

       b.   offers to sell securities offered or sold under a plan for the
holders of such securities;                       

         c.   offers to buy securities offered or sold under the plan from the
               holders of such securities, if the offer to buy is: (A) with view
            to distribution of such securities; and (B) under an agreement
            made in connection with the plan, with the consummation of the
              plan, or with the offer or sale of securities under the plan; or

   d.   is an "issuer" with respect to the securities, as the term
         "issuer" is defined in section 2(11) of the Securities Act.

       Under section 2(11) of the Securities Act, an "issuer" includes any
person directly or indirectly controlling or controlled by the issuer, or any   
person under direct or indirect common control with the issuer.                 

         To the extent that holders of Impaired Claims who receive New Secured
Notes, Rights or New Common Shares pursuant to the Plan are deemed to be        
"underwriters" or "issuers" such securities may not be resold by such persons   
unless such securities are registered under the Securities Act or an exemption  
from such registration requirements is available.  However, it is anticipated   
that such holders will be entitled to demand that the Reorganized Debtor        
register the resale of such shares under the Securities Act and that such       
holders will be permitted to obtain registration of the sale of their New Common
Shares, Rights or New Secured Notes in certain circumstances in connection with 
certain registered offerings of New Securities by Reorganized ICG.              

 Whether or not any particular person would be deemed to be an
"underwriter" or "issuer" with respect to the New Common Shares, Rights, or New 
Secured Notes would depend upon various facts and circumstances applicable to   
that person.  Accordingly, the Debtors express no view as to whether any        
particular person under the Plan would be an "underwriter" or "issuer" with     
respect to the New Secured Notes, Rights, or New Common Shares.                 

        GIVEN THE COMPLEX AND SUBJECTIVE NATURE OF THE QUESTION OF WHETHER A
PARTICULAR HOLDER MAY BE AN UNDERWRITER OR ISSUER, THE DEBTORS MAKE NO          
REPRESENTATION CONCERNING THE RIGHT OF ANY PERSON TO TRADE IN THE NEW SECURED   
NOTES, RIGHTS, OR NEW COMMON SHARES.  THE DEBTORS RECOMMEND THAT POTENTIAL      
RECIPIENTS OF THE NEW SECURITIES CONSULT THEIR OWN COUNSEL CONCERNING WHETHER   
THEY MAY FREELY TRADE                                                           

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NEW SECURED NOTES, RIGHTS, OR NEW COMMON SHARES WITHOUT COMPLIANCE WITH THE     
SECURITIES ACT OR THE EXCHANGE ACT.                                             

    2.   Subsequent Transfers of New Common Shares Under State Securities Laws

       If the New Common Shares are listed on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq National Market, the New Common Shares
will be generally freely tradeable under state securities laws.  If the New     
Common Shares are not listed on any of the above exchanges or the Nasdaq        
National Market, the New Common Shares will not be freely tradeable under state 
securities laws unless there is an available exemption from registration under  
such laws.  A majority of states provide an exemption from registration for     
secondary market transactions under the so-called "manual exemption" if         
financial and other information about an issuer is published in certain manuals 
published by Moody's Investor Service, Inc. or Standard & Poor's.  If the New   
Common Shares are not listed on one of the above exchanges or the Nasdaq        
National Market, the Reorganized Debtors intend to provide the necessary        
information in order to be able to take advantage of such manual exemptions.    

VIII.  INCOME TAX CONSEQUENCES OF THE PLAN

        A summary description of certain income tax consequences of the Plan
is provided below.  The description of tax consequences below is for            
informational purposes only and, due to a lack of definitive judicial or        
administrative authority or interpretation, substantial uncertainties exist with
respect to various tax consequences of the Plan as discussed herein.  Only the  
principal consequences of the Plan for certain Debtors and for holders of Claims
who are entitled to vote to accept or reject the Plan are described below.  No  
opinion of counsel has been sought or obtained with respect to any tax          
consequences of the Plan.  No rulings or determinations of the Internal Revenue 
Service (the "IRS") or any other tax authorities have been sought or obtained   
with respect to the tax consequences of the Plan, and the discussion below is   
not binding upon the IRS or such other authorities.  The Debtors are not making 
any representations regarding the particular tax consequences of the            
confirmation and consummation of the Plan as to any Claim holder, and are not   
rendering any form of legal opinion as to such tax consequences.                

         The discussion of United States federal income tax consequences below
is based on the Internal Revenue Code of 1986, as amended (the "IRC"), the      
Treasury regulations promulgated thereunder, judicial decisions, and published  
administrative rulings and pronouncements of the IRS as in effect on the date   
hereof.  Legislative, judicial or administrative changes or interpretations     
enacted or promulgated after the date hereof could alter or modify the analyses 
set forth below with respect to the United States federal income tax            
consequences of the Plan.  Any such changes or interpretations may be           
retroactive and could significantly affect the United States federal income tax 
consequences discussed below.                                                   

         Except to a limited extent, the following discussion does not address
foreign, state or local tax consequences of the Plan, nor does it purport to    
address the United States federal tax consequences of the Plan to special       
classes of taxpayers (such as foreign entities, S corporations, regulated       
investment companies, insurance companies, financial institutions, small        
business investment companies, broker-dealers and tax-exempt organizations).    
Furthermore, United States                                                      

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federal estate and gift tax issues are not addressed herein. The following      
discussion assumes that Claim holders hold their Claims as capital assets for   
United States federal income tax purposes.                                      

       Each holder of a Claim is strongly urged to consult its tax advisor
regarding the United States federal, state, and local and any foreign tax       
consequences of the transactions described herein and in the Plan.              

A.   Federal Income Tax Consequences to the Debtors                             

1.   Cancellation of Indebtedness Income                              

          Under general United States federal income tax principles, each Debtor
will realize cancellation of debt ("COD") income to the extent that its         
obligation to a Claim holder is discharged pursuant to the Plan for an amount   
less than the adjusted issue price (in most cases, the amount the Debtors       
received upon incurring the obligation, with certain adjustments) of such       
holder's Claim.  For this purpose, the amount paid to a Claim holder in         
discharge of its Claim generally will equal the amount of Cash and the fair     
market value on the Effective Date of any other property paid to such Claim     
holder.                                                                         

        Because the Debtors each will be debtors in a bankruptcy case at the
time they realize COD income, they will not be required to include such COD     
income in their gross income, but rather will be required to reduce certain of  
their respective tax attributes by the amounts of COD income so excluded.  Under
the general rules of IRC section 108, the required attribute reduction will be  
applied to reduce the net operating losses ("NOLs") and NOL carryforwards, to   
the extent of such NOLs and carryforwards, and certain other tax attributes of  
the Debtors.  IRC section 108(b)(5) permits a corporation in bankruptcy         
proceedings to elect to apply the required attribute reduction to reduce first  
the basis of its depreciable property to the extent of such basis, with any     
excess applied next to reduce its NOLs and NOL carryforwards, and then certain  
other tax attributes.  The Debtors have not yet determined whether they will    
make the election under IRC section 108(b)(5).                                  

    Although not free from doubt, based on existing authorities, the
Debtors believe that any reduction in Tax Attributes will generally occur on a  
separate company basis even though the Debtors file a consolidated federal      
income tax return.  The IRS has recently taken the position, however, that      
consolidated NOLs must be reduced irrespective of the source of those losses.   
The current IRS position as to the impact of the attribute reduction rules on   
other tax attributes of consolidated group members is unclear.  While the       
resolution of these issues may affect the timing and amount of the pre-         
bankruptcy tax attributes, the Debtors do not believe that the unresolved nature
of these items will have a material impact on the Projections contained herein. 

2.   Utilization of Net Operating Loss Carryovers                     

      Under IRC section 382, whenever there is a more than fifty percent
(50%) ownership change of a corporation during a three-year testing period, the 
ability of the corporation to utilize its Net Operating Loss Carryovers ("NOLs")
generally is limited on an annual basis to the product of the fair market value 
of the corporate equity immediately before the ownership change and the "long-  
term tax-exempt rate," which is published monthly by the IRS.  The annual       
limitation may be increased by certain built-in gains realized after, but       
accruing economically before, the ownership change and by the                   

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carryover of unused section 382 limitations from prior years. If the Debtors    
have a net unrealized built-in loss at the time of the ownership change, any    
recognized built-in loss generally during the five-year period following the    
ownership change is also subject to the annual limitation. Additionally, any    
amount which it is allowable to a Debtor as a deduction during the five year    
period but which is attributable to periods before the ownership change date    
will be treated as a recognized built-in loss for the taxable year for which it 
is allowable as a deduction. If the amount of the net unrealized built-in loss  
is not greater than the lesser of ten (10) million dollars or fifteen percent   
(15%) of the fair market value of the Debtors' assets immediately before the    
change date, then the net unrealized built-in loss of the Debtors is presumed to
be zero.                                                                        

      The effects of the ownership change rules can be ameliorated by an
exception that applies in the case of reorganizations under the Bankruptcy Code.
Under the so-called "Section 382(1)(5) bankruptcy exception", if the            
reorganization results in an exchange by qualifying creditors and stockholders  
of their claims and interests for at least fifty percent (50%) of the Debtors'  
stock (in vote and value), then the general ownership change rules will not     
apply.  Instead, the Debtors will be subject to a different tax regime under    
which the NOL is not limited on an annual basis but is reduced by the amount of 
interest deductions claimed during the three (3) taxable years preceding the    
date of the reorganization, and during the part of the taxable year prior to and
including the reorganization in respect of the debt converted into stock in the 
reorganization.  If the section 382(1)(5) bankruptcy exception applies, any     
further ownership change of the Debtors within a two (2) year period will result
in forfeiture of all of the Debtors' NOLs incurred prior to the date of the     
second ownership change.                                                        

        If the Debtor would not qualify for the section 382(1)(5) bankruptcy
exception, or if the Debtor would qualify but the NOL reduction rules mandated  
would greatly reduce the NOL, the Debtors may apply IRC section 382(1)(6) to the
ownership change, and thereby become subject to the annual limitation rules of  
section 382 of the Tax Code.  This section permits the Debtors to value the     
equity of the corporation for purposes of computing the limitation by using the 
Debtors' value immediately after the ownership change (by increasing the value  
of the old loss corporation to reflect any surrender or cancellation of         
creditors' claims) instead of immediately before the ownership change (the      
"Section 382(1)(6) limitation").                                                

3.   Federal Alternative Minimum Tax                                  

        A corporation may incur alternative minimum tax liability even where
NOL carryovers and other tax attributes are sufficient to eliminate its taxable 
income as computed under the regular corporate income tax.  It is possible that 
the Debtors will be liable for the alternative minimum tax.                     

B.   Federal Income Tax Consequences to Claim Holders                           

       The income tax consequences of the transactions contemplated by the
Plan to a Claim holder will depend upon a number of factors under United States 
federal income tax law.  For purposes of the following discussion, a "United    
States Person" is any person or entity (1) who is a citizen or resident of the  
United States, (2) that is a corporation or partnership created or organized in 
or under the law of the United States or any state thereof, (3) that is an      
estate, the income of which is subject to United States federal income taxation 
regardless of its source or (4) that is a trust whose administration is subject 
to the primary supervision of a United States court and with respect to which   
one or more United                                                              

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States persons have the authority to control all substantial decisions. A "Non- 
United States Person" is any person or entity that is not a United States       
Person. Income tax consequences to Claim holders that are Non-United States     
Persons are generally discussed below under Section 2.                          
                 ---------

          The tax treatment of holders of Claims and the character and amount of
income, gain or loss recognized as a consequence of the Plan and the            
distributions provided for by the Plan will depend upon, among other things, (1)
the manner in which a holder acquired a Claim; (2) the length of time the Claim 
has been held; (3) whether the Claim was acquired at a discount; (4) whether the
holder has taken a bad debt deduction with respect to the Claim (or any portion 
thereof) in the current or prior years; (5) whether the holder has previously   
included accrued but unpaid interest with respect to the Claim; (6) the method  
of tax accounting of the holder; (7) whether the Claim is an installment        
obligation for United States federal income tax purposes; and (8) whether the   
Claim constitutes a "security" for federal income tax purposes.  Therefore,     
holders of Claims should consult their tax advisors for information that may be 
relevant to their particular situation and circumstances and the particular tax 
consequences to them of the transactions contemplated by the Plan.              

1.   United States Federal Income Tax Consequences                    

a.   General                                                

          A holder of a Claim against the Debtors that is a United States Person
and whose Claim is paid in full or otherwise discharged on the Effective Date   
will recognize gain or loss for United States federal income tax purposes in an 
amount equal to the difference between (A) the fair market value on the         
Effective Date of such holder's Pro Rata share of any property received in      
respect of its Claim and (B) the holder's adjusted tax basis in the Claim.  A   
holder's tax basis in property received in exchange for its Claim will generally
be equal to the fair market value of such property on the Effective Date.  The  
holding period for any such property will begin on the day after the Effective  
Date.                                                                           

b. Market Discount                                          

     The market discount provisions of the IRC may apply to holders of
certain Claims.  In general, a debt obligation other than a debt obligation with
a fixed maturity of one (1) year or less that is acquired by a holder in the    
secondary market (or, in certain circumstances, upon original issuance) is a    
"market discount bond" as to that holder if its stated redemption price at      
maturity (or, in the case of a debt obligation having original issue discount,  
its revised issue price) exceeds the tax basis of the debt obligation in the    
holder's hands immediately after its acquisition.  However, a debt obligation   
will not be a "market discount bond" if such excess is less than a statutory de 
minimis amount.  Gain recognized by a Claim holder with respect to a "market    
discount bond" will generally be treated as ordinary interest income to the     
extent of the market discount accrued on such bond during the Claim holder's    
period of ownership, unless the Claim holder elected to include accrued market  
discount in taxable income currently.  A holder of a market discount bond that  
is required under the market discount rules of the IRC to defer deduction of all
or a portion of the interest on indebtedness incurred or maintained to acquire  
or carry the bond may be allowed to deduct such interest, in whole or in part,  
on disposition of such bond.                                                    

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c. Reorganization Treatment                                 

     The transactions contemplated by the Plan with respect to ICG and
Reorganized ICG, pursuant to which holders of Allowed Class 3 Claims will each  
receive a Pro Rata share of 100% of the New Secured Notes and holders of Allowed
Class 5 Claims will each receive a Pro Rata share of 100% of the New Common     
Shares, may be treated as a "reorganization" for United States federal income   
tax purposes.  If reorganization treatment is applicable, then the United States
federal income tax consequences arising from the Plan to holders of Allowed     
Class 3 and 5 Claims may vary from those described above, depending upon, among 
other things, whether such Claims constitute "securities" for United States     
federal income tax purposes.  The determination of whether a debt instrument    
constitutes a "security" depends upon an evaluation of the term and nature of   
the debt instrument.  Generally, corporate debt instruments with maturities when
issued of less than five (5) years are not considered securities, and corporate 
debt instruments with maturities when issued of ten years or more are considered
securities.  The Debtors believe and intend to take the position that the Class 
3 and 5 Claims should not be treated as securities for United States federal    
income tax purposes.  If, as the Debtors believe to be the case, the Class 3 and
5 Claims do not constitute securities for United States federal income tax      
purposes, then a holder of a such a Claim would be subject to the tax treatment 
described above.                                                                

     It is possible that certain claims arising under the Pre-Petition
Credit Facility Agreement may constitute securities for United States federal   
income tax purposes and that the exchange such Claims for New Common Shares  may
constitute a reorganization for United States federal income tax purposes.  In  
that case, a holder of a Claim with respect to the Pre-Petition Credit Facility 
Agreement should recognize gain, but not loss, with respect to each Claim       
surrendered in an amount equal to the lesser of (x) the amount of gain realized 
(i.e., the excess of the fair market value of any property received by such     
holder in respect of its Claim over the adjusted tax basis of such Claim) and   
(y) the "boot" (as described below) received by such holder, if any, in respect 
of its Claim.  A holder will be treated as receiving "boot" to the extent of the
fair market value of property other than the New Common Shares or New Secured   
Notes received by the holder.  Any such gain recognized will be treated as      
capital gain unless the boot received has the effect of the distribution of a   
dividend, in which case the gain will be treated as a dividend to the extent of 
the holder's ratable share of ICG's undistributed earnings and profits.  In     
addition, a holder's aggregate tax basis in the New Common Shares should be     
equal to the aggregate tax basis in the Claims exchanged therefor, decreased by 
the amount of  boot received and increased by any gain recognized, and such     
holder's holding period for such property will include the holding period of the
Claims exchanged therefor.  A holder's tax basis in any boot received will equal
the fair market value of such property on the Effective Date, and the holder's  
holding period in such property will begin on the day after the Effective Date. 

2.   Non-United States Persons                                        

    A holder of a Claim against a Debtor that is a Non-United States
Person generally will not be subject to United States federal income tax with   
respect to property received in exchange for such Claim pursuant to the Plan,   
unless (a) such Claim holder is engaged in a trade or business in the United    
States to which income, gain or loss from the exchange is "effectively          
connected" for United States federal income tax purposes, or (b) if such Claim  
holder is an individual, such Claim holder is present in                        

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the United States for 183 days or more during the taxable year of the exchange, 
and certain other requirements are met.                                         

3.   Information Reporting and Backup Withholding                     

   Certain payments, including the payments with respect to Claims
pursuant to the Plan, are generally subject to information reporting by the     
payor (the relevant Debtor) to the IRS.  Moreover, such reportable payments are 
subject to backup withholding under certain circumstances.  Under the IRC's     
backup withholding rules, a holder of a Claim may be subject to backup          
withholding with respect to distributions or payments made pursuant to the Plan,
unless the holder:  (a) comes within certain exempt categories (which generally 
include corporations) and, when required, demonstrates this fact or (b) provides
a correct United States taxpayer identification number and certifies under      
penalty of perjury that the taxpayer identification number is correct and that  
the taxpayer is not subject to backup withholding because of a failure to report
all dividend and interest income.                                               

         Holders of Claims that are Non-United States Persons and that receive
payments or distributions under the Plan through a United States office of the  
relevant Debtor will not be subject to backup withholding, provided that the    
holders furnish certification of their status as Non-United States Persons (and 
furnish any other required certifications), or are otherwise exempt from backup 
withholding.  Generally, such certification is provided on IRS Form W-8BEN.     
Holders who receive payments or distributions under the Plan through a foreign  
office of the relevant Debtor may, if the Debtor has certain types of           
relationships to the United States, be subject to information reporting to the  
IRS regarding the exchange (but not backup withholding) unless the Debtor       
possesses in its files documentary evidence that the holder is a Non-United     
States Person and certain other conditions are met, or the holder otherwise     
establishes an exemption.                                                       

        Backup withholding is not an additional tax.  Amounts withheld under
the backup withholding rules may be credited against a holder's United States   
federal income tax liability, and a holder may obtain a refund of any excess    
amounts withheld under the backup withholding rules by filing an appropriate    
claim for refund with the IRS (generally, a United States federal income tax    
return).                                                                        

C.   Importance of Obtaining Professional Tax Assistance                        

     THE FOREGOING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN
INCOME TAX CONSEQUENCES OF THE PLAN  AND IS NOT A SUBSTITUTE FOR CAREFUL TAX    
PLANNING WITH A TAX PROFESSIONAL.  THE ABOVE DISCUSSION IS FOR INFORMATIONAL    
PURPOSES ONLY AND IS NOT TAX ADVICE.  THE TAX CONSEQUENCES ARE IN MANY CASES    
UNCERTAIN AND MAY VARY DEPENDING ON A CLAIM HOLDER'S PARTICULAR CIRCUMSTANCES.  
ACCORDINGLY, CLAIM HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE    
UNITED STATES FEDERAL, STATE, AND LOCAL, AND APPLICABLE FOREIGN INCOME AND OTHER
TAX CONSEQUENCES OF THE PLAN.                                                   

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IX.  FEASIBILITY OF THE PLAN AND BEST INTERESTS OF CREDITORS          

A.   Feasibility of the Plan                                                    

          In connection with confirmation of the Plan, the Bankruptcy Court will
have to determine that the Plan is feasible pursuant to section 1129(a)(11) of  
the Bankruptcy Code, which means that the confirmation of the Plan is not likely
to be followed by the liquidation or the need for further financial             
reorganization of the Debtors.                                                  

       To support their belief in the feasibility of the Plan, the Debtors
have relied upon pro forma financial projections, which are annexed to this     
Disclosure Statement as Appendix E.                                             
----------                      

     The Projections indicate that the Reorganized Debtors should have
sufficient cash flow to pay and service their debt obligations, and to fund     
their operations as contemplated by the Business Plan.  Accordingly, the Debtors
believe that the Plan complies with the financial feasibility standard of       
section 1129(a)(11) of the Bankruptcy Code.                                     

        The Projections were not prepared with a view toward compliance with
the published guidelines of the American Institute of Certified Public          
Accountants or any other regulatory or professional agency or body or generally 
accepted accounting principles.  Furthermore, the Debtors' independent certified
public accountants have not compiled or examined the Projections and accordingly
do not express any opinion or any other form of assurance with respect thereto  
and assume no responsibility for the Projections.                               

  The Projections assume that (i) the Plan will be confirmed and
consummated in accordance with its terms, (ii) there will be no material change 
in legislation or regulations, or the administration thereof, including         
environmental legislation or regulations, that will have an unexpected effect on
the operations of the Reorganized Debtors, (iii) there will be no change in     
United States generally accepted accounting principles that will have a material
effect on the reported financial results of the Reorganized Debtors, and (iv)   
there will be no material contingent or unliquidated litigation or indemnity    
claims applicable to the Reorganized Debtors.  To the extent that the           
assumptions inherent in the Projections are based upon future business decisions
and objectives, they are subject to change.  In addition, although they are     
presented with numerical specificity and considered reasonable by the Debtors   
when taken as a whole, the assumptions and estimates underlying the Projections 
are subject to significant business, economic and competitive uncertainties and 
contingencies, many of which will be beyond the control of the Reorganized      
Debtors.  Accordingly, the Projections are only an estimate that are necessarily
speculative in nature.  It can be expected that some or all of the assumptions  
in the Projections will not be realized and that actual results will vary from  
the Projections, which variations may be material and are likely to increase    
over time.  The Projections should therefore not be regarded as a representation
by the Debtors or any other person that the results set forth in the Projections
will be achieved.  In light of the foregoing, readers are cautioned not to place
undue reliance on the Projections. The Projections should be read together with 
the information in Section VI of the Disclosure Statement entitled "Certain     
----------                                
Factors to be Considered," which sets forth important factors that could cause  
actual results to differ from those in the Projections.                         

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      ICG is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files periodic    
reports and other information with the SEC relating to its business, financial  
statements and other matters.  Such filings will not include projected financial
information.  The Debtors do not intend to update or otherwise revise the       
Projections, including any revisions to reflect events or circumstances existing
or arising after the date of this Disclosure Statement or to reflect the        
occurrence of unanticipated events, even if any or all of the underlying        
assumptions do not come to fruition.  Furthermore, the Debtors do not intend to 
update or revise the Projections to reflect changes in general economic or      
industry conditions.                                                            

        SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995:  The Projections contain statements which constitute "forward-     
looking statements" within the meaning of the Securities Act of 1933 and the    
Securities Exchange Act of 1934, as amended by the Private Securities Litigation
Reform Act of 1995.  "Forward-looking statements" in the Projections include the
intent, belief or current expectations of the Debtors and members of their      
management team with respect to the timing of, completion of and scope of the   
current restructuring, reorganization plan, Business Plan, bank financing, debt 
and equity market conditions and the Debtors' future liquidity, as well as the  
assumptions upon which such statements are based.  While the Debtors believe    
that the expectations are based on reasonable assumptions within the bounds of  
their knowledge of their business and operations, parties in interest are       
cautioned that any such forward-looking statements are not guarantees of future 
performance, and involve risks and uncertainties, and that actual results may   
differ materially from those contemplated by such forward-looking statements.   
Important factors currently known to management that could cause actual results 
to differ materially from those contemplated by the forward-looking statements  
in the Projections include, but are not limited to, further adverse developments
with respect to the Debtors' liquidity position or operations of the Debtors'   
various businesses, adverse developments in the Debtors' efforts to renegotiate 
funding and adverse developments in the bank financing or public or private     
markets for debt or equity securities, or adverse developments in the timing or 
results of the Debtors' Business Plan (including the time line to emerge from   
Chapter 11), the difficulty in controlling costs and integrating new operations,
the ability of the Debtors to realize the anticipated general and administrative
expense savings and overhead reductions presently contemplated, the ability of  
the Debtors to obtain profitability, the ability of the Debtors' to recruit and 
maintain skilled management and employees, the level and nature of any          
restructuring and other one-time charges, the difficulty in estimating costs    
relating to exiting certain markets and consolidating and closing certain       
operations, and the possible negative effects of a change in applicable         
legislation.                                                                    

B.   Acceptance of the Plan                                                     

          As a condition to confirmation, the Bankruptcy Code requires that each
Class of Impaired Claims vote to accept the Plan, except under certain          
circumstances.                                                                  

          Section 1126(c) of the Bankruptcy Code defines acceptance of a plan by
a class of impaired claims as acceptance by holders of at least two-thirds (2/3)
in dollar amount and more than one-half (1/2) in number of claims in that class,
but for that purpose counts only those who actually vote to accept or to reject 
the Plan. Thus, Classes 3, 4 and 5 will have voted to accept the Plan only if   
two-thirds (2/3) in amount and a majority in number actually voting in each     
Class cast their Ballots in                                                     

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favor of acceptance. Holders of Claims who fail to vote are not counted as      
either accepting or rejecting a plan.                                           

C.   Best Interests Test                                                        

     As noted above, even if a plan is accepted by the holders of each
class of claims and interests, the Bankruptcy Code requires a Bankruptcy Court  
to determine that the plan is in the best interests of all holders of claims or 
interests that are impaired by the plan and that have not accepted the plan.    
The "best interests" test, as set forth in section 1129(a)(7) of the Bankruptcy 
Code, requires a Bankruptcy Court to find either that all members of an impaired
class of claims or interests have accepted the plan or that the plan will       
provide a member who has not accepted the plan with a recovery of property of a 
value, as of the effective date of the plan, that is not less than the amount   
that such holder would recover if the debtor were liquidated under Chapter 7 of 
the Bankruptcy Code.                                                            

      To calculate the probable distribution to holders of each impaired
class of claims and interests if the Debtors were liquidated under Chapter 7, a 
Bankruptcy Court must first determine the aggregate dollar amount that would be 
generated from a debtor's assets if its Chapter 11 cases were converted to      
Chapter 7 cases under the Bankruptcy Code.  This "liquidation value" would      
consist primarily of the proceeds from a forced sale of the debtor's assets by a
Chapter 7 trustee.                                                              

          The amount of liquidation value available to unsecured creditors would
be reduced by, first, the claims of secured creditors to the extent of the value
of their collateral, and, second, by the costs and expenses of liquidation, as  
well as by other administrative expenses and costs of both the Chapter 7 cases  
and the Chapter 11 cases.  Costs of liquidation under Chapter 7 of the          
Bankruptcy Code would include the compensation of a trustee, as well as of      
counsel and other professionals retained by the trustee, asset disposition      
expenses, all unpaid expenses incurred by the debtor in its Chapter 11 cases    
(such as compensation of attorneys, financial advisors and accountants) that are
allowed in the Chapter 7 cases, litigation costs, and claims arising from the   
operations of the debtor during the pendency of the Chapter 11 cases.  The      
liquidation itself would trigger certain priority payments that otherwise would 
be due in the ordinary course of business.  Those priority claims would be paid 
in full from the liquidation proceeds before the balance would be made available
to pay general claims or to make any distribution in respect of equity          
interests.  The liquidation would also prompt the rejection of a large number of
executory contracts and unexpired leases and thereby significantly enlarge the  
total pool of unsecured claims by reason of resulting rejection claims.         

      Once the court ascertains the recoveries in liquidation of secured
creditors and priority claimants, it must determine the probable distribution to
general unsecured creditors and equity security holders from the remaining      
available proceeds in liquidation.  If such probable distribution has a value   
greater than the distributions to be received by such creditors and equity      
security holders under the plan, then the plan is not in the best interests of  
creditors and equity security holders.                                          

D.   Liquidation Analysis                                                       

      In order to determine the amount of liquidation value available to
creditors, the Debtors, with the assistance of their financial advisor, Zolfo   
Cooper, prepared a liquidation analysis, annexed hereto as Appendix D (the      
                                                ----------
"Liquidation Analysis"), which concludes that in a Chapter 7 liquidation,       

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holders of prepetition unsecured Claims would receive less of a recovery        
compared to the recovery under the Plan, and, potentially, no recovery          
whatsoever.  This conclusion is premised upon the assumptions set forth in      
Appendix D, which the Debtors and Zolfo Cooper believe are reasonable.          
----------                                                                      

Notwithstanding the foregoing, the Debtors believe that any 
liquidation analysis with respect to the Debtors is inherently speculative.  The
liquidation analysis for the Debtors necessarily contains estimates of the net  
proceeds that would be received from a forced sale of assets and\or business    
units, as well as the amount of Claims that will ultimately become Allowed      
Claims.  Claims estimates are based solely upon the Debtors' incomplete review  
of any Claims filed and the Debtors' books and records.  No Order or finding has
been entered by the Bankruptcy Court estimating or otherwise fixing the amount  
of Claims at the projected amounts of Allowed Claims set forth in the           
liquidation analysis.  In preparing the liquidation analysis, the Debtors have  
projected an amount of Allowed Claims that is at the lowest end of a range of   
reasonableness such that, for purposes of the liquidation analysis, the largest 
possible Chapter 7 liquidation dividend to holders of Allowed Claims can be     
assessed.  The estimate of the amount of Allowed Claims set forth in the        
liquidation analysis should not be relied on for any other purpose, including,  
without limitation, any determination of the value of any distribution to be    
made on account of Allowed Claims under the Plan.                               

E.   Valuation of the Reorganized Debtors                                       

         The Reorganized Debtors have been advised by DrKW with respect to the
value of Reorganized ICG.  At the request of the Debtors, DrKW performed a      
valuation analysis for the purposes of determining the value available to       
distribute to holders of Claims and Interests pursuant to the Plan and to       
analyze the relative recoveries to holders of Claims and Interests thereunder.  
This analysis was based on the Debtors' financial projections, as well as       
current market conditions and statistics.  The values are as of an assumed      
Effective Date of March 31, 2002, and are based upon information available to   
and analyses undertaken by DrKW during November and December 2001.              

       The reorganization value of the Reorganized Debtors was assumed for
the purposes of the Plan by the Debtors, based on advice from DrKW, to be       
between approximately $350 million to $500 million.  Based upon the going       
concern value of the Debtors' business and an assumed total debt (including the 
Pre-Petition Credit Agreement and capital leases) of approximately $213 million,
and the Debtors have employed an assumed range of equity values for Reorganized 
ICG of approximately $136.5 million to $286.5 million.                          

          In performing its analysis, DrKW used discounted cash flow, comparable
companies trading multiples and comparable transaction multiples methodologies  
to arrive at the going concern value of the Debtors' business.  These valuation 
techniques reflect both the market's current view of the Debtors' business plan 
and operations, as well as a longer-term focus on the intrinsic value of the    
cash flow projections in the Debtors' business plan.  The valuation multiples   
and discount rates used by DrKW to arrive at the going concern value of the     
Debtors' business were based on the public market valuation of selected public  
companies deemed generally comparable to the operating businesses of ICG.  In   
selecting such companies, DrKW considered factors such as the focus of the      
comparable companies' businesses as well as such companies' current and         
projected operating performance relative to the Debtors and the turnaround      
required for ICG to perform as projected.                                       

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The foregoing valuations are based on a number of measured  
assumptions, including a successful reorganization of the Debtors' business and 
finances in a timely manner, the achievement of the forecasts reflected in the  
financial projections, the availability of certain tax attributes, the outcome  
of certain expectations regarding market conditions, and the Plan becoming      
effective in accordance with its terms.  The estimates of value represent       
hypothetical reorganization values of the Reorganized Debtors as the continuing 
operator of their business and assets, and do not purport to reflect or         
constitute appraisals, liquidation values or estimates of the actual market     
value that may be realized through the sale of any securities to be issued      
pursuant to the Plan, which may be significantly different than the amounts set 
forth herein.  The value of an operating business such as the Debtors' business 
is subject to uncertainties and contingencies that are difficult to predict, and
will fluctuate with changes in factors affecting the financial condition and    
prospects of such a business.                                                   

 In preparing a range of the estimated reorganization value of
Reorganized ICG and the going concern value of the Debtors' business, DrKW: (i) 
reviewed certain historical financial information of the Debtors for recent     
years and interim periods; (ii) reviewed certain internal financial and         
operating data of the Debtors, including financial and operational projections  
developed by management relating to its business and prospects; (iii) met with  
certain members of senior management of the Debtors to discuss operations and   
future prospects; (iv) reviewed publicly available financial data and considered
the market values of public companies deemed generally comparable to the        
operating business of the Debtors; (v) considered certain economic and industry 
information relevant to the operating business; and (vi) conducted such other   
analyses as DrKW deemed appropriate such as sensitivity analyses to help assess 
the volatility associated with the Debtors' financial results and projections.  
Although DrKW conducted a review and analysis of the Debtors' business,         
operating assets and liabilities and business plan, DrKW assumed and relied on  
the accuracy and completeness of all financial and other information furnished  
to it by the Debtors and publicly available information.                        

F.   Application of the "Best Interests" of Creditors Test to the Liquidation   
Analysis and the Valuation                                            

     It is impossible to determine with any specificity the value each
creditor will receive as a percentage of its Allowed Claim.  This difficulty in 
estimating the value of recoveries is due to, among other things, the inherent  
uncertainty with respect to the Rights Offering and the lack of any public      
market for the New Common Shares.                                               

          Notwithstanding the difficulty in quantifying recoveries to holders of
Allowed Claims with precision, the Debtors believe that the financial           
disclosures and projections contained herein imply a greater or equal recovery  
to holders of Claims in Impaired Classes than the recovery available in a       
Chapter 7 liquidation.  As set forth in the Liquidation Analysis, holders of    
Allowed Claims in Class 3 are estimated to receive a 100%  recovery in a Chapter
7 liquidation, and under the Plan, such Claim holders are also estimated to     
receive a 100% recovery.  In the Liquidation Analysis, holders of unsecured     
Claims are estimated not to receive any material recovery in a Chapter 7        
liquidation.  Conversely, under the Plan, holders of Allowed Claims in Class 4  
will receive 100% recovery and holders of Allowed Claims in Class 5 will receive
a recovery of the New Common Shares and the Rights.                             

      Accordingly, the Debtors believe that the "best interests" test of
section 1129 of the Bankruptcy Code is satisfied.                               

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G.   Confirmation Without Acceptance of All Impaired Classes: The "Cramdown"    
Alternative                                                           

       In view of the deemed rejection by holders of Class 6 ICG Interests
and Subordinated Claims, the Debtors will seek confirmation of the Plan pursuant
to the "cramdown" provisions of the Bankruptcy Code.  The Debtors further       
reserve the right to seek confirmation of the Plan with respect to the holders  
of Class 3, 4, and 5 Claims in the event such holders vote to reject the Plan.  
Specifically, section 1129(b) of the Bankruptcy Code provides that a plan can be
confirmed even if the plan is not accepted by all impaired classes, as long as  
at least one impaired class of claims has accepted it.  The Bankruptcy Court may
confirm a plan at the request of the debtors if the plan "does not discriminate 
unfairly" and is "fair and equitable" as to each impaired class that has not    
accepted the plan.  A plan does not discriminate unfairly within the meaning of 
the Bankruptcy Code if a dissenting class is treated equally with respect to    
other classes of equal rank.                                                    

    The Debtors believe the Plan does not discriminate unfairly with
respect to holders of Class 3, 4 and 5 Claims and Class 6 ICG Interests and     
Subordinated Claims.  Class 6 includes all holders of ICG Interests and claims  
subordinated to other Claims under section 510(b) or (c) of the Bankruptcy Code,
holders of which are not entitled to payment under the absolute priority rule   
until all creditors have been paid in full.  Thus, because all interest holders 
and subordinated claimholders are similarly treated, there is no unfair         
discrimination with respect to holders of Class 6 ICG Interests and Subordinated
Claims.                                                                         

        A plan is fair and equitable as to a class of unsecured claims which
rejects a plan if the plan provides (a) for each holder of a claim included in  
the rejecting class to receive or retain on account of that claim property that 
has a value, as of the effective date of the plan, equal to the allowed amount  
of such claim; or (b) that the holder of any claim or interest that is junior to
the claims of such class will not receive or retain on account of such junior   
claim or interest any property at all.                                          

       A plan is fair and equitable as to a class of equity interests that
rejects a plan if the plan provides (a) that each holder of an interest included
in the rejecting class receive or retain on account of that interest property   
that has a value, as of the effective date of the plan, equal to the greatest of
the allowed amount of any fixed liquidation preference to which such holder is  
entitled, any fixed redemption price to which such holder is entitled, or the   
value of such interest; or (b) that the holder of any interest that is junior to
the interests of such class will not receive or retain under the plan on account
of such junior interest any property at all.                                    

    The Debtors believe that they will meet the "fair and equitable"
requirements of section 1129(b) with respect to holders of Class 3, 4 and 5     
Claims and Class 6 Claims in that no holders of junior claims or interests will 
receive distributions under the Plan.                                           

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X.  ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN         

          The Debtors believe that the Plan affords holders of Class 3, 4, and 5
Claims the potential for the greatest realization on the Debtors' assets and,   
therefore, is in the best interests of such holders.  If, however, the requisite
acceptances are not received, or the Plan is not confirmed and consummated, the 
theoretical alternatives include:  (a) formulation of an alternative plan or    
plans of reorganization, or (b) liquidation of the Debtors under Chapter 7 or 11
of the Bankruptcy Code.                                                         

A.   Alternative Plan(s) of Reorganization                                      

       If the requisite acceptances are not received or if the Plan is not
confirmed, the Debtors (or, if the Debtors' exclusive periods in which to file  
and solicit acceptances of a plan of reorganization have expired, any other     
party in interest) could attempt to formulate and propose a different plan or   
plans of reorganization.  Such a plan or plan(s) might involve either a         
reorganization and continuation of the Debtors' businesses or an orderly        
liquidation of assets.                                                          

          With respect to an alternative plan, the Debtors have explored various
alternatives in connection with formulation and development of the Plan.   See  
                                                                        ----
Section IX.  The Debtors believe that the Plan enables creditors to realize the 
----------                                                                      
greatest possible value under the circumstances, and, that as compared to any   
alternative plan of reorganization, has the greatest chance to be confirmed and 
consummated.                                                                    

B.   Liquidation under Chapter 7 or Chapter 11                                  

     If no plan is confirmed, the Chapter 11 Cases may be converted to
cases under Chapter 7 of the Bankruptcy Code, pursuant to which a trustee would 
be elected or appointed to liquidate the Debtors' assets for distribution to    
Creditors in accordance with the priorities established by the Bankruptcy Code. 
It is impossible to predict precisely how the proceeds of the liquidation would 
be distributed to the respective holders of Claims against or Interests in the  
Debtors.                                                                        

         The Debtors believe that in a liquidation under Chapter 7, additional
administrative expenses involved in the appointment of a trustee or trustees and
attorneys, accountants and other professionals to assist such trustees would    
cause a substantial diminution in the value of the Debtors' Estates.  The assets
available for distribution to creditors would be reduced by such additional     
expenses and by Claims, some of which would be entitled to priority, arising by 
reason of the liquidation and from the rejection of leases and other executory  
contracts in connection with the cessation of operations and the failure to     
realize the greater going concern value of the Debtors' assets.  More           
importantly, as set forth in Appendix D, consequences of conversion to a Chapter
----------            
7 liquidation would likely result in the immediate cessation of the Debtors'    
businesses, leaving little value for prepetition unsecured creditors.           

        The Debtors could also be liquidated pursuant to the provisions of a
Chapter 11 plan of reorganization.  In a liquidation under Chapter 11, the      
Debtors' assets could theoretically be sold in an orderly fashion over a more   
extended period of time than in a liquidation under Chapter 7.  Because there   
will be no need to appoint a Chapter 7 trustee and hire new professionals, a    
Chapter 11 liquidation might be less costly than a Chapter 7 liquidation  and   
thus provide larger net distributions to creditors than in a                    

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Chapter 7 liquidation. Any recovery in a Chapter 11 liquidation, while          
potentially greater than in a Chapter 7 liquidation, would also be highly       
uncertain.                                                                      

       Although preferable to a Chapter 7 liquidation, the Debtors believe
that any alternative liquidation under Chapter 11 is a much less attractive     
alternative to creditors than the Plan because of the greater return anticipated
by the Plan.                                                                    

XI.  THE SOLICITATION; VOTING PROCEDURE 

A.   Parties in Interest Entitled to Vote                                       

   Under section 1124 of the Bankruptcy Code, a class of claims or
interests is deemed to be "impaired" under a plan unless (i) the plan leaves    
unaltered the legal, equitable, and contractual rights to which such claim or   
interest entitles the holder thereof or (ii) notwithstanding any legal right to 
an accelerated payment of such claim or interest, the plan cures all existing   
defaults (other than defaults resulting from the occurrence of events of        
bankruptcy) and reinstates the maturity of such claim or interest as it existed 
before the default.                                                             

        In general, a holder of a claim or interest may vote to accept or to
reject a plan if (i) the claim or interest is "allowed," which means generally  
that no party in interest has objected to such claim or interest, and (ii) the  
claim or interest is impaired by the plan.  If, however, the holder of an       
impaired claim or interest will not receive or retain any distribution under the
plan on account of such claim or interest, the Bankruptcy Code deems such holder
to have rejected the plan, and, accordingly, holders of such claims and         
interests do not actually vote on the plan.  If a claim or interest is not      
impaired by the plan, the Bankruptcy Code deems the holder of such claim or     
interest to have accepted the plan and, accordingly, holders of such claims and 
interests are not entitled to vote on the plan.                                 

B.   Classes Impaired under the Plan                                            

          Classes 3, 4, and 5 are entitled to vote to accept or reject the Plan.
By operation of law, each Unimpaired Class of Claims is deemed to have accepted 
the Plan and, therefore, is not entitled to vote to accept or reject the Plan.  
By operation of law, Class 6 is deemed to have rejected the Plan and therefore  
is not entitled to vote to accept or reject the Plan.                           

C.   Waivers of Defects, Irregularities, Etc.                                   

          Unless otherwise directed by the Bankruptcy Court, all questions as to
the validity, form, eligibility (including time of receipt), acceptance, and    
revocation or withdrawal of Ballots will be determined by the Voting Agent and  
the Debtors in their sole discretion, which determination will be final and     
binding. As indicated below under "Withdrawal of Ballots; Revocation," effective
withdrawals of Ballots must be delivered to the Voting Agent prior to the Voting
Deadline. The Debtors reserve the absolute right to contest the validity of any 
such withdrawal. The Debtors also reserve the right to reject any and all       
Ballots not in proper form, the acceptance of which would, in the opinion of the
Debtors or their counsel, be unlawful. The Debtors further reserve the right to 
waive any defects or irregularities or conditions of delivery as to any         
particular Ballot. The interpretation (including the Ballot and the respective  
instructions thereto) by the Debtors, unless otherwise directed by the          
Bankruptcy Court, will                                                          

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be final and binding on all parties. Unless waived, any defects or              
irregularities in connection with deliveries of Ballots must be cured within    
such time as the Debtors (or the Bankruptcy Court) determine. Neither the       
Debtors nor any other person will be under any duty to provide notification of  
defects or irregularities with respect to deliveries of Ballots nor will any of 
them incur any liabilities for failure to provide such notification. Unless     
otherwise directed by the Bankruptcy Court, delivery of such Ballots will not be
deemed to have been made until such irregularities have been cured or waived.   
Ballots previously furnished (and as to which any irregularities have not       
theretofore been cured or waived) will be invalidated.                          

D.   Withdrawal of Ballots; Revocation                                          

    Any party who has delivered a valid Ballot for the acceptance or
rejection of the Plan may withdraw such acceptance or rejection by delivering a 
written notice of withdrawal to the Voting Agent at any time prior to the Voting
Deadline.  A notice of withdrawal, to be valid, must (i) contain the description
of the Claim(s) to which it relates and the aggregate principal amount          
represented by such Claim(s), (ii) be signed by the withdrawing party in the    
same manner as the Ballot being withdrawn, (iii) contain a certification that   
the withdrawing party owns the Claim(s) and possesses the right to withdraw the 
vote sought to be withdrawn and (iv) be received by the Voting Agent in a timely
manner at the address set forth below.  The Debtors intend to consult with the  
Voting Agent to determine whether any withdrawals of Ballots were received and  
whether the Requisite Acceptances of the Plan have been received.  As stated    
above, the Debtors expressly reserve the absolute right to contest the validity 
of any such withdrawals of Ballots.                                             

         Unless otherwise directed by the Bankruptcy Court, a purported notice
of withdrawal of Ballots which is not received in a timely manner by the Voting 
Agent will not be effective to withdraw a previously cast Ballot.               

       Any party who has previously submitted to the Voting Agent prior to
the Voting Deadline a properly completed Ballot may revoke such Ballot and      
change his or its vote by submitting to the Voting Agent prior to the Voting    
Deadline a subsequent properly completed Ballot for acceptance or rejection of  
the Plan.  In the case where more than one timely, properly completed Ballot is 
received, only the Ballot which bears the latest date will be counted for       
purposes of determining whether the Requisite Acceptances have been received.   

E.   Further Information; Additional Copies                                     

      If you have any questions or require further information about the
voting procedure for voting your Claim or about the packet of material you      
received, or if you wish to obtain an additional copy of the Plan, the          
Disclosure Statement, or any exhibits or appendices to such documents (at your  
own expense, unless otherwise specifically required by Bankruptcy Rule 3017(d)),
please contact the Voting Agent:                                                

Logan & Company, Inc. 
546 Valley Road 
Upper Montclair, NJ 07043 
(973) 509-3190 (telephone)
(973) 509-3191 (facsimile)

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XII  RECOMMENDATION AND CONCLUSION  

For all of the reasons set forth in this Disclosure Statement, the  
Debtors believe that confirmation and consummation of the Plan is preferable to 
all other alternatives.  Consequently, the Debtors urge all holders of Class 3, 
4 and 5 Claims to vote to ACCEPT the Plan, and to complete and return their     
ballots so that they will be RECEIVED by the Voting Agent on or before ______,  
2002 prevailing Eastern Time on the Voting Deadline.                            

Dated: December 19, 2001                                                        
Englewood, Colorado                                                             

                        ICG Communications, Inc.
                                (for itself and on behalf of the
                   Subsidiary Debtors)

                          By:  /s/ Randall E. Curran
                                           ---------------------------------
                         Name:   Randall E. Curran
                                      Title:  Chief Executive Officer of ICG
                                    Communications, Inc.

Skadden, Arps, Slate, Meagher & Flom (Illinois)                                 
David S. Kurtz                                                                  
Timothy R. Pohl                                                                 
Rena M. Samole                                                                  
333 W. Wacker Drive                                                             
Chicago, Illinois 60606-1285                                                    
(312) 407-0700                                                                  

-and-                                                         

/s/ Gregg M. Galardi                                                            
----------------------------------------                                        
Skadden, Arps, Slate, Meagher & Flom LLP                                        
Gregg M. Galardi                                                                
One Rodney Square                                                               
P.O. Box 636                                                                    
Wilmington, Delaware 19899-0636                                                 
(302) 651-3000                                                                  

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Attorneys for Debtors and Debtors-in-Possession                                 

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APPENDIX A  

JOINT PLAN OF REORGANIZATION OF 
ICG COMMUNICATIONS, INC., et al.  
--------------------------------  

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IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE DISTRICT OF DELAWARE  

- - - - - - - - - - - - - - - - - - - - - - -  x                                
-                                              :     Chapter 11                 
               :
In re:                                         :                                
                                          :     Case No. 00-4238 (PJW)
ICG COMMUNICATIONS, INC.                       :                                
et al.,                                   :                           
-- --                                     .                           
                                        :     Jointly Administered
Debtors.                         :                  
               x
- - - - - - - - - - - - - - - - - - - - - -                                     

JOINT PLAN OF REORGANIZATION OF ICG COMMUNICATIONS, INC. AND  
ITS AFFILIATED DEBTORS AND DEBTORS IN POSSESSION  
------------------------------------------------  

David S. Kurtz                                                                  
Timothy R. Pohl                                                                 
Rena M. Samole                                                                  
SKADDEN, ARPS, SLATE, MEAGHER                                                   
& FLOM (ILLINOIS)                                                           
333 West Wacker Drive                                                           
Chicago, Illinois  60606-1285                                                   
(312) 407-0700                                                                  

- and -                                                           

Gregg M. Galardi (I.D. No. 2991)                                                
SKADDEN, ARPS, SLATE, MEAGHER                                                   
& FLOM LLP                                                      
One Rodney Square                                                               
P.O. Box 636                                                                    
Wilmington, Delaware 19899                                                      
(302) 651-3000                                                                  

Counsel for Debtors and Debtors in Possession                                   
Dated: December 19, 2001                                                        

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TABLE OF CONTENTS 

                                                        [Enlarge/Download Table]

                                                                                      Page
                                                                                      ----
                                                                                          
EXHIBITS.............................................................................  iii
--------                                                                                  

INTRODUCTION.........................................................................    1

ARTICLE IDEFINITIONS, RULES OF INTERPRETATION,                                            
     COMPUTATION OF TIME AND GOVERNING LAW...........................................    1
     A.  Scope Of Definitions; Rules Of Construction.................................    1
         -------------------------------------------                                      
     B.  Definitions.................................................................    1
         -----------                                                                      
               1.1    "Administrative Claim".........................................    1
               1.2    "Allowed Claim"................................................    1
               1.3    "Allowed Class..... Claim".....................................    2
               1.4    "Ballots"......................................................    2
               1.5    "Bankruptcy Code"..............................................    2
               1.6    "Bankruptcy Court".............................................    2
               1.7    "Bankruptcy Rules".............................................    2
               1.8    "Bar Date(s)"..................................................    2
               1.9    "BoA"..........................................................    2
               1.10   "Business Day".................................................    2
               1.11   "Cash".........................................................    2
               1.12   "Chapter 11 Case"..............................................    2
               1.13   "Chief Executive Officer"......................................    2
               1.14   "Claim"........................................................    3
               1.15   "Claims Objection Deadline"....................................    3
               1.16   "Claims Resolution Committee"..................................    3
               1.17   "Class"........................................................    3
               1.18   "Collateral"...................................................    3
               1.19   "Confirmation".................................................    3
               1.20   "Confirmation Date"............................................    3
               1.21   "Confirmation Hearing".........................................    3
               1.22   "Confirmation Order"...........................................    3
               1.23   "Convenience Claims"...........................................    3
               1.24   "Credit Documents".............................................    3
               1.25   "Creditor".....................................................    3
               1.26   "Creditors' Committee".........................................    3
               1.27   "Cure".........................................................    3
               1.28   "Debtor(s)"....................................................    4
               1.29   "Dilution".....................................................    4
               1.30   "Disclosure Statement".........................................    4
               1.31   "Disbursing Agent".............................................    4
               1.32   "Disputed Claim"...............................................    4
               1.33   "Disputed Claim Amount"........................................    4
               1.34   "Distribution Date"............................................    5

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1.35   "Distribution Record Date".......................................  5 
1.36   "Effective Date".................................................  5 
1.37   "Estate(s)"......................................................  5 
1.38   "Face Amount"....................................................  5 
1.39   "Final Order"....................................................  5 
1.40   "General Unsecured Claim"........................................  5 
1.41   "ICG Interests"..................................................  5 
1.42   "Impaired".......................................................  6 
1.43   "Indemnification Obligation".....................................  6 
1.44   "Indenture Trustee"..............................................  6 
1.45   "Intercompany Claim".............................................  6 
1.46   "Interest".......................................................  6 
1.47   "Lender".........................................................  6 
1.48   "Lender Claim"...................................................  6 
1.49   "Lien"...........................................................  6 
1.50   "Litigation Claims"..............................................  6 
1.51   "Management Option Plan".........................................  6 
1.52   "Management Option Plan Participants"............................  7 
1.53   "Management Options".............................................  7 
1.54   "New Common Shares"..............................................  7 
1.55   "New Secured Notes"..............................................  7 
1.56   "New Securities".................................................  7 
1.57   "Non-Debtor Subsidiaries"........................................  7 
1.58   "Norwest"........................................................  7 
1.59   "Old Common Shares"..............................................  7 
1.60   "Old Indentures".................................................  7 
1.61   "Old Note Claims"................................................  7 
1.62   "Old Notes"......................................................  7 
1.63   "Old Preferred Shares"...........................................  8 
1.64   "Old Securities".................................................  8 
1.65   "Old Stock Options"..............................................  8 
1.66   "Other Priority Claim"...........................................  8 
1.67   "Other Secured Claims"...........................................  8 
1.68   "Person".........................................................  8 
1.69   "Petition Date"..................................................  8 
1.70   "Plan"...........................................................  8 
1.71   "Plan Exhibit"...................................................  8 
1.72   "Pre-Petition Credit Agreement"..................................  8 
1.73   "Pre-Petition Credit Facility Agreements"........................  8 
1.74   "Priority Tax Claim".............................................  8 
1.75   "Professional"...................................................  8 
1.76   "Professional Fee Claim".........................................  9 
1.77   "Pro Rata".......................................................  9 
1.78   "Proof of Claim".................................................  9 
1.79   "Quarterly Distribution Date"....................................  9 

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               1.80   "Registration Rights Agreement"..................................  9 
               1.81   "Reinstated" or "Reinstatement"..................................  9 
               1.82   "Reorganized Debtor(s)"..........................................  9 
               1.83   "Reorganized Subsidiary Debtor(s)"............................... 10 
               1.84   "Reorganized ICG"................................................ 10 
               1.85   "Restructuring Transactions"..................................... 10 
               1.86   "Rights"......................................................... 10 
               1.87   "Rights Offering"................................................ 10 
               1.88   "Rights Offering Commencement Date".............................. 10 
               1.89   "Rights Offering Distribution Pool".............................. 10 
               1.90   "Rights Offering Expiration Date"................................ 10 
               1.91   "Rights Offering Record Date".................................... 10 
               1.92   "Rights Offering Pro Rata Share"................................. 10 
               1.93   "Schedules"...................................................... 10 
               1.94   "Secondary Liability Claim"...................................... 10 
               1.95   "Secured Claim".................................................. 11 
               1.96   "Secured Lender Claim"........................................... 11 
               1.97   "Securities Act"................................................. 11 
               1.98   "Special Committee".............................................. 11 
               1.99   "Subordinated Claims"............................................ 11 
               1.100  "Subsidiaries"................................................... 11 
               1.101  "Subsidiary Debtors"............................................. 11 
               1.102  "Subsidiary Interests"........................................... 11 
               1.103  "Substantial Contribution Claim"................................. 11 
               1.104  "Unimpaired"..................................................... 11 
               1.105  "Unimpaired Claim"............................................... 11 
               1.106  "Voting Record Date"............................................. 12 

C.   Rules of Interpretation........................................................... 12 
     -----------------------                                                               

D.   Computation of Time............................................................... 12 
     -------------------                                                                   

E.   Governing Law..................................................................... 12 
     -------------                                                                         

ARTICLE II CLASSIFICATION OF CLAIMS AND INTERESTS...................................... 12 
               2.1     Introduction.................................................... 12 
               2.2     Classification of Unimpaired Claims and Interests............... 13 
               2.3     Classification of Impaired Claims And Interests................. 13 

ARTICLE III TREATMENT OF CLAIMS AND INTERESTS.......................................... 14 
     3.1       Unclassified Claims..................................................... 14 
                       (a)   Administrative Claims..................................... 14 
                       (b)   Priority Tax Claims....................................... 14 
     3.2       Unimpaired Classes Of Claims and Interests.............................. 14 
                       (a)   Class 1:  Other Priority Claims........................... 14 

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                       (b)   Class 2:  Other Secured Claims............................ 15 
     3.3      Impaired Classes Of Claims and Interests................................. 15 
                       (a)   Class 3:  Secured Lender Claims........................... 15 
                       (b)   Class 4:  Convenience Claims.............................. 15 
                       (c)   Class 5:  General Unsecured Claims........................ 15 
                       (d)   Class 6:  ICG Interests and Subordinated Claims........... 16 
     3.4      Reservation of Rights Regarding Claims................................... 16 

ARTICLE IV ACCEPTANCE OR REJECTION OF THE PLAN......................................... 16 
              4.1     Impaired Classes of Claims and Interests                             
                      Entitled to Vote................................................. 16 
              4.2     Acceptance by an Impaired Class.................................. 16 
              4.3     Presumed Acceptances by Unimpaired Classes....................... 16 
              4.4     Classes Deemed to Reject Plan.................................... 16 
              4.5     Summary of Classes Voting on the Plan............................ 16 
              4.6     Confirmation Pursuant to Section 1129(b) of the                      
                      Bankruptcy Code.................................................. 16 

ARTICLE V MEANS FOR IMPLEMENTATION OF THE PLAN......................................... 17 
              5.1     Continued Corporate Existence.................................... 17 
              5.2     Cancellation Of Old Securities And Agreements.................... 17 
              5.3     Certificates of Incorporation and By-laws........................ 17 
              5.4     Restructuring Transactions....................................... 17 
              5.5     Issuance of New Common Stock, New Secured Notes and                  
                      Rights........................................................... 18 
              5.6     Compensation And Benefit Programs................................ 19 
              5.7     Directors And Officers of Reorganized Debtors.................... 19 
              5.8     Revesting Of Assets; Releases of Liens........................... 20 
              5.9     Preservation Of Rights Of Action................................. 20 
              5.10    Effectuating Documents; Further Transactions..................... 20 
              5.11    Exemption From Certain Transfer Taxes............................ 20 
              5.12    Releases and Related Matters..................................... 21 
              5.13    Lucent Settlement................................................ 22 
              5.14    Cisco Settlement................................................. 22 

ARTICLE VI SUBSTANTIVE CONSOLIDATION................................................... 22 
              6.1     Substantive Consolidation........................................ 22 
              6.2     Order Granting Substantive Consolidation......................... 23 

ARTICLE VII TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES...................... 23 
              7.1     Assumed Contracts And Leases..................................... 23 
              7.2     Payments Related To Assumption Of                                    
                      Contracts And Leases............................................. 24 
              7.3     Rejected Contracts And Leases.................................... 24 

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             7.4     Rejection Damages Bar Date........................................ 24 

ARTICLE VIII PROVISIONS GOVERNING DISTRIBUTIONS........................................ 25 
             8.1     Distributions For Claims Allowed As Of The                            
                     Effective Date.................................................... 25 
             8.2     Interest On Claims................................................ 25 
             8.3     Distributions by Disbursing Agent................................. 25 
             8.4     Record Date For Distributions To Holders Of Lender                    
                     Claims and Old Notes.............................................. 25 
             8.5     Means Of Cash Payment............................................. 26 
             8.6     Calculation Of Distribution Amounts Of New Common                     
                     Shares............................................................ 26 
             8.7     Delivery Of Distributions......................................... 26 
             8.8     Surrender of Securities and Instruments........................... 27 
             8.9     Withholding And Reporting Requirements............................ 27 
             8.10    Setoffs........................................................... 28 

ARTICLE IX PROCEDURES FOR RESOLVING DISPUTED, CONTINGENT, AND UNLIQUIDATED CLAIMS          
    AND DISTRIBUTIONS WITH RESPECT THERETO............................................. 28 
             9.1     Prosecution Of Objections to Claims............................... 28 
             9.2     Treatment of Disputed Claims...................................... 29 
             9.3     Disputed Claims Reserves.......................................... 29 
             9.4     Distributions on Account of Disputed Claims Once                      
                     They Are Allowed and Additional Distributions on                      
                     Account of Previously Allowed Claims.............................. 29 

ARTICLE X CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF                         
    THE PLAN........................................................................... 30 
             10.1    Conditions To Confirmation........................................ 30 
             10.2    Conditions To Effective Date...................................... 30 
             10.3    Waiver Of Conditions.............................................. 30 

ARTICLE XI RETENTION OF JURISDICTION................................................... 31 

ARTICLE XII MISCELLANEOUS PROVISIONS................................................... 32 
             12.1    Professional Fee Claims........................................... 32 
             12.2    Administrative Claims Bar Date.................................... 33 
             12.3    Payment Of Statutory Fees......................................... 33 
             12.4    Modifications and Amendments...................................... 33 
             12.5    Severability Of Plan Provisions................................... 33 
             12.6    Successors And Assigns............................................ 34 
             12.7    Compromises and Settlements....................................... 34 
             12.8    Releases And Satisfaction Of Subordination Rights................. 34 
             12.9    Discharge Of The Debtors.......................................... 34 

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12.10   Injunction........................................................ 35 
12.11   Exculpation And Limitation Of Liability........................... 35 
12.12   Binding Effect.................................................... 36 
12.13   Revocation, Withdrawal, Or Non-Consummation....................... 36 
12.14   Plan Exhibits..................................................... 37 
12.15   Notices........................................................... 37 
12.16   Indemnification and Related Matters............................... 38 
12.17   Prepayment........................................................ 38 
12.18   Dissolution of the Creditors' Committee and                           
        Establishment of the Claims Resolution Committee.................. 39 
12.19   Term Of Injunctions Or Stays...................................... 41 

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EXHIBITS  
--------  

Exhibit A        Form of Certificate of Incorporation of Reorganized ICG        

Exhibit B        Form of Bylaws of Reorganized ICG                              

Exhibit C        Form of Management Option Plan                                 

Exhibit D        Form of Registration Rights Agreement                          

Exhibit E        Term Sheet for Rights Offering                                 

Exhibit F(1)     Term Sheet for New Secured Notes if Class 3 Accepts the Plan   

Exhibit F(2)     Term Sheet for New Secured Notes if Class 3 Does Not Accept    
the Plan                                      

SCHEDULES 
--------- 

Schedule 1.57    Schedule of Non-Debtor Subsidiaries                            

Schedule 1.101   Schedule of Subsidiary Debtors                                 

Schedule 5.9     Schedule of Causes of Action to be Retained by Reorganized ICG 

Schedule 5.13    Lucent Settlement Agreement                                    

Schedule 5.14    Cisco Settlement Agreement                                     

Schedule 7.1     Non-Exclusive Schedule of Assumed Contracts                    

Schedule 7.3     Exclusive Schedule of Rejected Contracts                       

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INTRODUCTION  

ICG Communications, Inc., a Delaware corporation ("ICG"), and those   
entities listed on Schedule 1.101 hereto (collectively, the "Subsidiary         
Debtors"), hereby propose the following joint plan of reorganization (the       
"Plan") for the resolution of their outstanding creditor Claims (as defined     
herein) and equity Interests (as defined herein). Reference is made to the      
Disclosure Statement (as defined herein) distributed contemporaneously herewith,
for a discussion of the Debtors' history, businesses, properties, results of    
operations, projections for future operations, risk factors, a summary and      
analysis of the Plan, and certain related matters, including the New Securities 
(as defined herein) to be issued under the Plan. The Debtors are the proponents 
of this Plan within the meaning of section 1129 of the Bankruptcy Code.         

   All holders of Claims are encouraged to read this Plan and the Disclosure
Statement in their entirety before voting to accept or reject this Plan.        
Subject to certain restrictions and requirements set forth in section 1127 of   
the Bankruptcy Code and Fed. R. Bankr. P. 3019 and Article XII of this Plan, the
Debtors reserve the right to alter, amend, modify, revoke or withdraw this Plan 
prior to its substantial consummation.                                          

ARTICLE I 

DEFINITIONS, RULES OF INTERPRETATION, 
COMPUTATION OF TIME AND GOVERNING LAW 

A.   Scope Of Definitions; Rules Of Construction                                
-------------------------------------------                           

For purposes of this Plan, except as expressly provided or unless the 
context otherwise requires, all capitalized terms not otherwise defined shall   
have the meanings ascribed to them in Article I of this Plan.  Any term used in 
this Plan that is not defined herein, but is defined in the Bankruptcy Code or  
the Bankruptcy Rules, shall have the meaning ascribed to that term in the       
Bankruptcy Code or the Bankruptcy Rules.  Whenever the context requires, such   
terms shall include the plural as well as the singular number, the masculine    
gender shall include the feminine, and the feminine gender shall include the    
masculine.                                                                      

B.   Definitions                                                                
-----------                                                           

    1.1  "Administrative Claim" means a Claim for payment of an administrative
expense of a kind specified in section 503(b) or 1114(e)(2) of the Bankruptcy   
Code and entitled to priority pursuant to section 507(a)(1) of the Bankruptcy   
Code, including, but not limited to, (a) the actual, necessary costs and        
expenses, incurred after the Petition Date, of preserving the Estates and       
operating the businesses of the Debtors, including wages, salaries, or          
commissions for services rendered after the commencement of the Chapter 11 Case,
(b) Professional Fee Claims, (c) all fees and charges assessed against the      
Estates under 28 U.S.C. (S) 1930 and (d) all Allowed Claims that are entitled to
be treated as Administrative Claims pursuant to a Final Order of the Bankruptcy 
Court under section 546(c)(2)(A) of the Bankruptcy Code.                        

     1.2  "Allowed Claim" means a Claim or any portion thereof (a) that has been
allowed by a Final Order, or (b) as to which, on or by the Effective Date, (i)  
no proof of claim has been filed with the Bankruptcy Court and (ii) the         
liquidated and noncontingent amount of which is Scheduled, other than a Claim   
that is Scheduled at zero, in an unknown amount, or as disputed, or (c) for     
which a proof of claim in a liquidated amount has been timely filed with the    
Bankruptcy Court pursuant to the Bankruptcy Code, any Final Order of the        
Bankruptcy Court or other applicable                                            

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bankruptcy law, and as to which either (i) no objection to its allowance has    
been filed within the periods of limitation fixed by the Plan, the Bankruptcy   
Code or by any order of the Bankruptcy Court or (ii) any objection to its       
allowance has been settled or withdrawn, or has been denied by a Final Order, or
(d) that is expressly allowed in a liquidated amount in this Plan.              

   1.3  "Allowed Class . . . Claim" means an Allowed Claim in the particular
Class described.                                                                

1.4  "Ballots" means each of the ballot forms distributed with the    
Disclosure Statement to holders of Impaired Claims entitled to vote as specified
in Section 4.1 of this Plan, in connection with the solicitation of acceptances 
of the Plan.                                                                    

     1.5  "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified
in title 11 of the United States Code, 11 U.S.C. (S)(S) 101-1330, as now in     
effect or hereafter amended.                                                    

  1.6  "Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware or such other court as may have jurisdiction over the      
Chapter 11 Case.                                                                

1.7  "Bankruptcy Rules" means, collectively, the Federal Rules of     
Bankruptcy Procedure and the Official Bankruptcy Forms, as amended, the Federal 
Rules of Civil Procedure, as amended, as applicable to the Chapter 11 Case or   
proceedings therein, and the Local Rules of the Bankruptcy Court, as applicable 
to the Chapter 11 Case or proceedings therein, as the case may be.              

    1.8  "Bar Date(s)" means the date(s), if any, designated by the Bankruptcy
Court as the last dates for filing proofs of Claim or Interest against the      
Debtors.                                                                        

1.9  "BoA" means Bank of America, N.A.                                

   1.10 "Business Day" means any day, excluding Saturdays, Sundays or "legal
holidays" (as defined in Fed. R. Bankr. P. 9006(a)), on which commercial banks  
are open for business in New York, New York.                                    

     1.11 "Cash" means legal tender of the United States or equivalents thereof.

   1.12 "Chapter 11 Case" means the jointly administered Chapter 11 cases of
the Debtors.                                                                    

  1.13 "Chief Executive Officer" means, at any time prior to the Effective
Date, the Person holding the title of chief executive officer of ICG, and at any
time after the Effective Date, the Person holding the title of chief executive  
officer of Reorganized ICG.                                                     

    1.14 "Claim" means a claim against the Debtors, or any of them, whether or
not asserted, as defined in Section 101(5) of the Bankruptcy Code.              

   1.15 "Claims Objection Deadline" means the last day for filing objections
to Disputed Claims, which day shall be ninety (90) days after the Effective     
Date.                                                                           

     1.16 "Claims Resolution Committee" means the committee established pursuant
to Section 12.18 of this Plan.                                                  

1.17 "Class" means a category of holders of Claims or Interests, as   
described in Article II of this Plan.                                           

1.18 "Collateral" means any property or interest in the property of a 
Debtor's Estate subject to a Lien to secure the payment or performance of a     
Claim, which Lien is not subject to avoidance under the Bankruptcy Code or      
otherwise invalid under the Bankruptcy Code or applicable state law.            

     1.19 "Confirmation" means entry by the Bankruptcy Court of the Confirmation
Order.                                                                          

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1.20 "Confirmation Date" means the date of entry by the clerk of the  
Bankruptcy Court of the Confirmation Order.                                     

   1.21 "Confirmation Hearing" means the hearing to consider confirmation of
the Plan under section 1128 of the Bankruptcy Code.                             

   1.22 "Confirmation Order" means the order entered by the Bankruptcy Court
confirming the Plan.                                                            

1.23 "Convenience Claims" means any Claim that otherwise would be an  
Allowed Class 5 Claim against the Debtors in an amount (i) equal to or less than
$500, or (ii) greater than $500 but which is reduced to $500 by an irrevocable  
written election of the holder of such Claim made on a validly executed and     
timely delivered Ballot.                                                        

     1.24 "Credit Documents" means the "Credit Documents" as defined in the Pre-
Petition Credit Agreement.                                                      

1.25 "Creditor" means any Person who holds a Claim against any of the 
Debtors.                                                                        

1.26 "Creditors' Committee" means the official committee of unsecured 
creditors appointed pursuant to section 1102(a) of the Bankruptcy Code in the   
Chapter 11 Case.                                                                

   1.27 "Cure" means the distribution of Cash, or such other property as may
be agreed upon by the parties or ordered by the Bankruptcy Court, with respect  
to the assumption of an executory contract or unexpired lease, pursuant to      
section 365(b) of the Bankruptcy Code, in an amount equal to all unpaid monetary
obligations, without interest, or such other amount as may be agreed upon by the
parties, under such executory contract or unexpired lease, to the extent such   
obligations are enforceable under the Bankruptcy Code and applicable bankruptcy 
law.                                                                            

1.28 "Debtor(s)" means, individually, ICG and each of the Subsidiary  
Debtors, and collectively, ICG and the Subsidiary Debtors, including in their   
capacity as debtors-in-possession pursuant to sections 1107 and 1108 of the     
Bankruptcy Code, and as reorganized hereunder.                                  

    1.29 "Dilution" means dilution subsequent to the Effective Date (a) to the
extent necessary to give effect to the exercise of the Management Options, (b)  
as a result of exercise of the Rights, or (c) otherwise as a result of the      
issuance of common shares, implementation of other management incentive programs
or other action taken by the board of directors of Reorganized ICG.             

 1.30 "Disclosure Statement" means the written disclosure statement that
relates to the Plan, as amended, supplemented, or modified from time to time,   
and that is prepared and distributed in accordance with section 1125 of the     
Bankruptcy Code and Fed. R. Bankr. P. 3018.                                     

  1.31 "Disbursing Agent" means Reorganized ICG or any party designated by
Reorganized ICG, in its sole discretion, to serve as disbursing agent under the 
Plan.                                                                           

     1.32 "Disputed Claim" means any Claim that has not been Allowed pursuant to
the Plan or a Final Order of the Bankruptcy Court, and                          

       (a) if no Proof of Claim has been, or deemed to have been filed, by
the applicable Bar Date, which has been or hereafter is listed on the Schedules 
as unliquidated, contingent, or disputed, and which has not been resolved by    
written agreement of the parties or an order of the Bankruptcy Court;           

         (b) if a Proof of Claim has been filed, or deemed to have been filed,
by the applicable Bar Date (i) a Claim for which a corresponding Claim has been 
listed on the Schedules as unliquidated, contingent or disputed; (ii) a Claim   
for which a corresponding Claim has been listed on the Schedules as other than  
unliquidated, contingent or disputed, but the amount of such Claim as asserted  
in the Proof of Claim varies from the amount of such Claim as listed in the     
Schedules; or (iii) as to which a Debtor has timely filed an objection or       
request for estimation in accordance with the Plan, the Bankruptcy Code, the    
Bankruptcy Rules, and any orders of the Bankruptcy Court, or which is otherwise 
disputed by a Debtor in accordance with applicable law, which objection, request
for estimation or dispute has not been withdrawn, or determined by a Final      
Order;                                                                          

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       (c) for which a Proof of Claim was required to be filed by order of
the Bankruptcy Court, but as to which a Proof of Claim was not timely or        
properly filed; or                                                              

        (d) that is disputed in accordance with the provisions of this Plan.

    1.33 "Disputed Claim Amount" means (a) if a liquidated amount is set forth
in the Proof of Claim relating to a Disputed Claim, (i) the liquidated amount   
set forth in the Proof of Claim relating to the Disputed Claim; (ii) an amount  
agreed to by the Debtors and the holder of such Disputed Claim; or  (iii) if a  
request for estimation is filed by the Debtors, the amount at which such Claim  
is estimated by the Bankruptcy Court; (b) if no liquidated amount is set forth  
in the Proof of Claim relating to a Disputed Claim, (i) an amount agreed to by  
the Debtors and the holder of such Disputed Claim or (ii) the amount estimated  
by the Bankruptcy Court with respect to such Disputed Claim; or (c) if the Claim
was listed on the Schedules as unliquidated, contingent or disputed and no Proof
of Claim was filed, or deemed to have been filed, by the applicable Bar Date and
the Claim has not been resolved by written agreement of the parties or an order 
of the Bankruptcy Court, zero.                                                  

   1.34 "Distribution Date" means the date, occurring as soon as practicable
after the Effective Date, upon which distributions are made by the Reorganized  
Debtors, to holders of Allowed Claims entitled to receive distributions under   
this Plan.                                                                      

1.35 "Distribution Record Date" means the record date for purposes of 
making distributions under the Plan on account of Allowed Claims, which date    
shall be the Confirmation Date or such other date designated in the Confirmation
Order.                                                                          

     1.36 "Effective Date" means the Business Day on which all conditions to the
consummation of the Plan as set forth in Section 10.2 of this Plan have been    
satisfied or waived as provided in Article X of this Plan and is the effective  
date of the Plan.                                                               

1.37 "Estate(s)" means, individually, the estate of each Debtor in the
Chapter 11 Case, and, collectively, the estates of all Debtors in the Chapter 11
Case, created pursuant to section 541 of the Bankruptcy Code.                   

  1.38 "Face Amount" means (a) when used in reference to a Disputed Claim,
the full stated amount claimed by the holder of such Claim in any proof of Claim
timely filed with the Bankruptcy Court or otherwise deemed timely filed by any  
Final Order of the Bankruptcy Court or other applicable bankruptcy law, and (b) 
when used in reference to an Allowed Claim, the allowed amount of such Claim.   

   1.39 "Final Order" means an order or judgment of the Bankruptcy Court, or
other court of competent jurisdiction, as entered on the docket in the Chapter  
11 Case, the operation or effect of which has not been stayed, reversed, or     
amended and as to which order or judgment (or any revision, modification, or    
amendment thereof) the time to appeal or seek review or rehearing has expired   
and as to which no appeal or petition for review or rehearing was filed or, if  
filed, remains pending.                                                         

  1.40 "General Unsecured Claim" means a Claim against the Debtors that is
not an Administrative Claim, Priority Tax Claim, Other Priority Claim, Other    
Secured Claim, Secured Lender Claim, Subordinated Claim or Convenience Claim.   

  1.41 "ICG Interests" means, collectively, the Old Common Shares, the Old
Preferred Shares, and the Old Stock Options, together with any other options,   
warrants, conversion rights, rights of first refusal or other rights,           
contractual or otherwise, to acquire or receive any Old Common Shares, Old      
Preferred Shares, Old Stock Options, or other equity ownership interests in ICG 
or any Subsidiary Debtor (other than the Subsidiary Interests), and any         
contracts subscriptions, commitments or agreements pursuant to which a party was
or could have been entitled to receive shares, securities or other ownership    
interests in ICG or any Subsidiary Debtor (other than the Subsidiary Interests).

   1.42 "Impaired" means, when used with reference to a Claim or Interest, a
Claim or Interest that is impaired within the meaning of section 1124 of the    
Bankruptcy Code.                                                                

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1.43 "Indemnification Obligation" means any obligation of any of the  
Debtors to indemnify, reimburse or provide contribution to any present or former
officer, director or employee, or any present or former professionals, advisors 
or representatives of the Debtors, pursuant to by-laws, articles of             
incorporation, contract or otherwise as may be in existence immediately prior to
the Petition Date.                                                              

    1.44 "Indenture Trustee" means Norwest Bank Colorado, National Association
or its successor, in either case, in its capacity as indenture trustee for each 
of the Old Notes.                                                               

 1.45 "Intercompany Claim" means, as the case may be, any Claim (a) by a
Debtor against another Debtor or (b) by a Non-Debtor Subsidiary against a       
Debtor.                                                                         

1.46 "Interest" means (a) the legal, equitable, contractual and other 
rights of any Person (including any 401K plan or plan participant) with respect 
to ICG Interests, (b) the legal, equitable, contractual or other rights of any  
Person with respect to the Subsidiary Interests and (c) the legal, equitable,   
contractual or other rights of any Person to acquire or receive any of the      
foregoing.                                                                      

1.47 "Lender" means a "Lender" as defined in the Pre-Petition Credit  
Agreement, dated as of August 12, 1999, Royal Bank of Canada as administrative  
agent and collateral agent, Morgan Stanley Senior Funding, Inc. as sole book-   
runner and lead arranger for the Lenders, BoA and Barclays Bank Plc as co-      
documentation agents,  and their individual successors and assigns.             

    1.48 "Lender Claim" means a Claim of a Lender arising under or as a result
of the Pre-Petition Credit Facility Agreements.                                 

1.49 "Lien" means a charge against or interest in property to secure  
payment of a debt or performance of an obligation.                              

1.50 "Litigation Claims" means the claims, rights of action, suits, or
proceedings, whether in law or in equity, whether known or unknown, that the    
Debtors or their Estates may hold against any Person, which are to be retained  
by the Reorganized Debtors pursuant to Section 5.9 of this Plan.                

  1.51 "Management Option Plan" means a stock option plan to be adopted by
Reorganized ICG pursuant to Section 5.6 of this Plan, in substantially the form 
of Exhibit C to this Plan.                                                      

1.52 "Management Option Plan Participants" means the employees of     
Reorganized ICG entitled to participate in the Management Option Plan.          

     1.53 "Management Options" means the options to be issued by Reorganized ICG
to the Management Option Plan Participants to purchase New Common Shares        
pursuant to the provisions of the Management Option Plan.                       

1.54 "New Common Shares" means the common shares of Reorganized ICG   
authorized under Section 5.5 of this Plan.                                      

     1.55 "New Secured Notes" means the new promissory notes to be issued on the
Effective Date by Reorganized ICG pursuant to Section 5.5 of this Plan, with the
terms and conditions set forth on either Exhibit F(1) or Exhibit F(2) to this   
Plan based upon whether Class 3 accepts the Plan, as set forth in Section 3.3(a)
of this Plan.                                                                   

1.56 "New Securities" means, collectively, the New Common Shares, New 
Secured Notes, Management Options, and the Rights.                              

     1.57 "Non-Debtor Subsidiaries" means, collectively, the direct and indirect
subsidiaries of ICG listed on Schedule 1.57, which have not commenced Chapter 11
cases and thus are not Debtors.                                                 

1.58 "Norwest" means Norwest Bank Colorado, National Association.     

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1.59  "Old Common Shares" means the common shares of ICG issued and   
outstanding as of the Petition Date.                                            

  1.60 "Old Indentures" means Indentures (a) dated April 27, 1998, between
Norwest, as trustee, and ICG Services, Inc., for the 9 7/8% Senior Notes due    
2008; (b) dated February 12, 1998, between Norwest, as trustee, and ICG         
Services, Inc., for the 10% Senior Notes due 2008; (c) dated March 11, 1997,    
between Norwest, as trustee, and ICG Holdings, Inc., for the 11 5/8% Senior     
Notes due 2007; (d) dated April 30, 1996, between Norwest, as trustee, and ICG  
Telecom Group, Inc. (f/k/a  Intelcom Group, Inc.)  for the 12 1/2% Senior Notes 
due 2006; and (e) dated August 8, 1995, between Norwest, as trustee, and ICG    
Telecom Group, Inc. (f/k/a Intelcom Group, Inc.), for the 13 1/2% Senior Notes  
due 2005, pursuant to which the Old Notes were issued and are outstanding.      

1.61 "Old Note Claims"  means any Claim arising from the Old Notes.   

   1.62 "Old Notes" means the (a) 9 7/8% Senior Notes due 2008 issued by ICG
Services, Inc.; (b) the 10% Senior Notes due 2008, dated February 12, 1998      
issued by ICG Services, Inc.; (c) the 11 5/8% Senior Notes due 2007 issued by   
ICG Holdings, Inc.; (d) the 12 1/2% Senior Notes due 2006 issued by ICG Telecom 
Group, Inc. (f/k/a  Intelcom Group, Inc.); and (e) the 13 1/2% Senior Notes due 
2005 issued by ICG Telecom Group, Inc. (f/k/a Intelcom Group, Inc.), issued and 
outstanding under the Old Indentures.                                           

1.63 "Old Preferred Shares" means the preferred shares of any of the  
Debtors issued and outstanding as of the Petition Date, including (i) ICG       
Communications, Inc. 8% Series A-1, A-2, and A-3 Convertible Preferred          
Securities Mandatorily Redeemable 2009; (ii) ICG Funding, LLC Exchangeable      
Limited Liability Company Preferred Securities Mandatorily Redeemable 2009;     
(iii) ICG Communications, Inc. 6 3/4% Preferred Stock Mandatorily Redeemable    
2009; (iv) ICG Holdings, Inc. 14% Preferred Stock, Mandatorily Redeemable 2008; 
and (v) ICG Holdings, Inc. 14 1/4% Preferred Stock Mandatorily Redeemable 2007. 

  1.64 "Old Securities" means collectively, the Old Common Shares, the Old
Preferred Shares, the Old Stock Options and the Old Notes.                      

1.65 "Old Stock Options" means the outstanding options to purchase Old
Common Shares, or Old Preferred Shares, as of the Petition Date.                

    1.66 "Other Priority Claim" means a Claim entitled to priority pursuant to
section 507(a) of the Bankruptcy Code other than a Priority Tax Claim or an     
Administrative Claim.                                                           

 1.67 "Other Secured Claims" means all Secured Claims against any of the
Debtors, as the case may be, other than the Secured Lender Claims.              

     1.68 "Person" means Person as defined in section 101 (41) of the Bankruptcy
Code.                                                                           

1.69 "Petition Date" means the date on which the Debtors filed their  
petitions for relief commencing the Chapter 11 Case.                            

1.70 "Plan" means this Chapter 11 reorganization plan and all exhibits
annexed hereto or referenced herein, as the same may be amended, modified or    
supplemented from time to time.                                                 

1.71 "Plan Exhibit" means any exhibit or schedule attached hereto.    

   1.72 "Pre-Petition Credit Agreement" means the Credit Agreement, dated as
of August 12, 1999, among ICG, as borrower, the Lenders, Royal Bank of Canada,  
as administrative agent and collateral agent, Morgan Stanley Senior Funding,    
Inc., as sole book-runner and lead arranger for the Lenders, and BoA and        
Barclays Bank Plc as co-documentation agents, as amended.                       

     1.73 "Pre-Petition Credit Facility Agreements" mean the Pre-Petition Credit
Agreement and the Credit Documents.                                             

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1.74 "Priority Tax Claim" means a Claim that is entitled to priority  
pursuant to section 507(a)(8) of the Bankruptcy Code.                           

    1.75 "Professional" means any professional employed in the Chapter 11 Case
pursuant to sections 327 or 1103 of the Bankruptcy Code or otherwise and any    
professionals seeking compensation or reimbursement of expenses in connection   
with the Chapter 11 Case pursuant to section 503(b)(4) of the Bankruptcy Code.  

1.76 "Professional Fee Claim" means a Claim of a Professional for     
compensation or reimbursement of costs and expenses relating to services        
incurred after the Petition Date and prior to and including the Effective Date. 

    1.77 "Pro Rata" means, at any time, the proportion that the Face Amount of
a Claim in a particular Class bears to the aggregate Face Amount of all Claims  
(including Disputed Claims) in such Class, unless the Plan provides otherwise.  

1.78 "Proof of Claim" means the proof of claim that must be filed by a
holder of an Impaired Unsecured Claim by the Bar Date.                          

     1.79 "Quarterly Distribution Date" means the last Business Day of the month
following the end of each calendar quarter after the Effective Date; provided,  
however, that if the Effective Date is within 30 days of the end of a calendar  
quarter, the first Quarterly Distribution Date will be the last Business Day of 
the month following the end of the first calendar quarter after the calendar    
quarter in which the Effective Date falls.                                      

    1.80 "Registration Rights Agreement" means an agreement to be entered into
between Reorganized ICG and certain holders of General Unsecured Claims with    
respect to rights of registration as to the New Common Shares, in substantially 
the form set forth in Exhibit E to this Plan.                                   

     1.81 "Reinstated" or "Reinstatement" means (i) leaving unaltered the legal,
equitable, and contractual rights to which a Claim entitles the holder of such  
Claim or Interest so as to leave such Claim or Interest unimpaired in accordance
with section 1124 of the Bankruptcy Code or (ii) notwithstanding any contractual
provision or applicable law that entitles the holder of such Claim to demand or 
receive accelerated payment of such Claim or Interest after the occurrence of a 
default (a) curing any such default that occurred before or after the Petition  
Date, other than a default of a kind specified in section 365(b)(2) of the      
Bankruptcy Code; (b) reinstating the maturity of such Claim or Interest as such 
maturity existed before such default; (c) compensating the holder of such Claim 
or Interest for any damages incurred as a result of any reasonable reliance by  
such holder on such contractual provision or such applicable law; and (d) not   
otherwise altering the legal, equitable, or contractual rights to which such    
Claim or Interest entitles the holder of such Claim or Interest; provided,      
however, that any contractual right that does not pertain to the payment when   
due of principal and interest on the obligation on which such Claim or Interest 
is based, including, but not limited to, financial covenant ratios, negative    
pledge covenants, covenants or restrictions on merger or consolidation, and     
affirmative covenants regarding corporate existence prohibiting certain         
transactions or actions contemplated by the Plan, or conditioning such          
transactions or actions on certain factors, shall not be required to be         
reinstated in order to accomplish Reinstatement.                                

  1.82 "Reorganized Debtor(s)" means, individually, any Reorganized Debtor
and, collectively, all Reorganized Debtors, on or after the Effective Date.     

    1.83 "Reorganized Subsidiary Debtor(s)" means, individually, a Reorganized
Subsidiary Debtor, and, collectively, all Reorganized Subsidiary Debtors, on or 
after the Effective Date.                                                       

     1.84 "Reorganized ICG" means reorganized ICG or its successor, on and after
the Effective Date.                                                             

1.85 "Restructuring Transactions" has the meaning ascribed thereto in 
Section 5.4 of this Plan.                                                       

     1.86 "Rights" means certificated, transferable rights issued by Reorganized
ICG.  The securities to be offered pursuant to the Rights will be New Common    
Shares.                                                                         

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    1.87 "Rights Offering" means the issuance of the Rights by Reorganized ICG
to holders of Allowed Class 5 Claims on the Rights Offering Commencement Date,  
on the terms and conditions set forth in Exhibit E to this Plan.                

1.88 "Rights Offering Commencement Date" means the date on which ICG  
commences the Rights Offering by mailing to holders of Allowed Class 5 Claims as
of the Rights Offering Record Date certificates representing the Rights and     
instructions for the exercise thereof, which date shall be as soon as           
practicable after the Effective Date.                                           

1.89 "Rights Offering Distribution Pool" means all of the Rights.     

 1.90 "Rights Offering Expiration Date" means thirty (30)  calendar days
after the date on which all the conditions to the Effective Date have occurred. 

   1.91 "Rights Offering Record Date" means the date that is the record date
to determine which holders of Claims are entitled to receive Rights, which shall
be the Confirmation Date or the date set forth in the Confirmation Order.       

1.92 "Rights Offering Pro Rata Share" means, as to any Allowed Class 5
Claim on the Rights Offering Record Date, a fraction, (i) the numerator of which
is the amount of such Allowed Class 5 Claim as of the Rights Offering Record    
Date and (ii) the denominator of which is the aggregate amount of Allowed Class 
5 Claims as of the Rights Offering Record Date.                                 

1.93 "Schedules" means the schedules of assets and liabilities and the
statements of financial affairs, if any, filed in the Bankruptcy Court by the   
Debtors as such schedules or statements as may be amended or supplemented from  
time to time in accordance with Fed. R. Bankr. P. 1009 or orders of the         
Bankruptcy Court.                                                               

  1.94 "Secondary Liability Claim" means a Claim that arises from a Debtor
being liable as a guarantor of, or otherwise being jointly, severally, or       
secondarily liable for, any contractual, or tort, or other obligation of another
Debtor, including any Claim based on: (a) guaranties of collection, payment, or 
performance; (b) indemnity bonds, obligations to indemnify, or obligations to   
hold harmless; (c) performance bonds; (d) contingent liabilities arising out of 
contractual obligations or out of undertakings (including any assignment or     
other transfer) with respect to leases, operating agreements, or other similar  
obligations made or given by a Debtor relating to the obligations or performance
of another Debtor; (e) vicarious liability; or (f) any other joint or several   
liability that any Debtor may have in respect of any obligation that is the     
basis of a Claim.                                                               

     1.95 "Secured Claim" means a Claim that is secured by a Lien on property in
which an Estate has an interest or that is subject to setoff under section 553  
of the Bankruptcy Code, to the extent of the value of the Claim holder's        
interest in the Estate's interest in such property or to the extent of the      
amount subject to setoff, as applicable, as determined pursuant to section      
506(a) of the Bankruptcy Code.                                                  

     1.96 "Secured Lender Claim" means a Secured Claim of a Lender arising under
or as a result of the Pre-Petition Credit Facility Agreement, which Claims shall
be deemed Allowed pursuant to this Plan in the aggregate amount of $84.6        
million.                                                                        

  1.97 "Securities Act" means the Securities Act of 1933, 15 U.S.C. (S)(S)
77a-77aa, as now in effect or hereafter amended.                                

1.98 "Special Committee" means the Special Committee of the Board of  
Directors of ICG, which is comprised of Messrs. William J. Laggett, John U.     
Moorhead, II, Leontis Teryazos, and Walter Threadgill.                          

1.99 "Subordinated Claims" means any Claim subordinated pursuant to   
sections 510(b) or (c) of the Bankruptcy Code, which shall include any Claim    
arising from the rescission of a purchase or sale of any Old Security, any Claim
for damages arising from the purchase or sale of an Old Security, or any Claim  
for reimbursement, contribution or indemnification on account of any such Claim.

  1.100  "Subsidiaries" mean, collectively, the Subsidiary Debtors and the
Non- Debtor Subsidiaries.                                                       

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  1.101 "Subsidiary Debtors" means the direct and indirect subsidiaries of
ICG listed on Schedule 1.101, each of which are Debtors.                        

1.102 "Subsidiary Interests" means, collectively, the issued and      
outstanding shares of stock of the Subsidiary Debtors directly or indirectly    
owned by ICG, as of the Petition Date.                                          

  1.103 "Substantial Contribution Claim" means a claim for compensation or
reimbursement of expenses incurred in making a substantial contribution in the  
Chapter 11 Case pursuant to section 503(b)(3),(4), or (5) of the Bankruptcy     
Code.                                                                           

    1.104 "Unimpaired" means, when used with reference to a Claim or Interest,
a Claim or Interest that is not impaired within the meaning of section 1124 of  
the Bankruptcy Code.                                                            

1.105 "Unimpaired Claim" means a Claim that is not an Impaired Claim. 

1.106 "Voting Record Date" means the voting record date for voting to 
accept or reject this Plan, as determined by the Bankruptcy Court.              

C.   Rules of Interpretation                                                    
-----------------------                                               

For purposes of the Plan (a) any reference in the Plan to a contract, 
instrument, release, indenture, or other agreement or documents being in a      
particular form or on particular terms and conditions means that such document  
shall be substantially in such form or substantially on such terms and          
conditions, (b) any reference in the Plan to an existing document or exhibit    
filed or to be filed means such document or exhibit as it may have been or may  
be amended, modified, or supplemented, (c) unless otherwise specified, all      
references in the Plan to sections, articles, schedules, and exhibits are       
references to sections, articles, schedules, and exhibits of or to the Plan, (d)
the words "herein" and "hereto" refer to the Plan in its entirety rather than to
a particular portion of the Plan, (e) captions and headings to articles and     
sections are inserted for convenience of reference only and are not intended to 
be a part of or to affect the interpretation of the Plan, and (f) the rules of  
construction set forth in section 102 of the Bankruptcy Code and in the         
Bankruptcy Rules shall apply.                                                   

D.   Computation of Time                                                        
-------------------                                                   

In computing any period of time prescribed or allowed by the Plan, the
provisions of Fed. R. Bankr. P. 9006(a) shall apply.                            

E.   Governing Law                                                              
-------------                                                         

     Unless a rule of law or procedure is supplied by federal law (including the
Bankruptcy Code and Bankruptcy Rules), the laws of (i) the State of Delaware    
shall govern the construction and implementation of the Plan and any agreements,
documents, and instruments executed in connection with the Plan and (ii) the    
laws of the state of incorporation of each Debtor shall govern corporate        
governance matters with respect to such Debtor, in either case without giving   
effect to the principles of conflicts of law thereof.                           

ARTICLE II  

CLASSIFICATION OF CLAIMS AND INTERESTS  

2.1   Introduction                                                    

  The Plan is premised on the substantive consolidation of the Debtors for
purposes of voting on, distributions under, and Confirmation of the Plan only,  
as provided in Section 6.1 of the Plan.                                         

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In accordance with section 1123(a)(1) of the Bankruptcy Code,         
Administrative Claims and Priority Tax Claims, have not been classified, and the
respective treatment of such unclassified claims is set forth in Section 3.1 of 
the Plan.                                                                       

     A Claim or Interest is placed in a particular Class only to the extent that
the Claim or Interest falls within the description of that Class.  A Claim may  
be and is classified in other Classes to the extent that any portion of the     
Claim or Interest falls within the description of such other Classes.  A Claim  
is also placed in a particular Class only to the extent that such Claim is an   
Allowed Claim in that Class and such Claim has not been paid, released, or      
otherwise settled prior to the Effective Date.                                  

2.2   Classification of Unimpaired Claims and Interests               

(a)  Class 1:  Other Priority Claims                      

Class 1 consists of all Other Priority Claims.  

(b)  Class 2:  Other Secured Claims                       

              Class 2 consists of separate subclasses for each Other Secured
               Claim secured by a Lien upon property in which an Estate has an
                interest. Each subclass is deemed to be a separate Class for all
purposes under the Bankruptcy Code.             

2.3   Classification of Impaired Claims And Interests.                

(a)  Class 3:  Secured Lender Claims                      

Class 3 consists of all Secured Lender Claims.  

(b)  Class 4:  Convenience Claims                         

Class 4 consists of all Convenience Claims.     

(c)  Class 5:  General Unsecured Claims                   

 Class 5 consists of all General Unsecured Claims.

(d)  Class 6:  ICG Interests and Subordinated Claims      

          Class 6 consists of all ICG Interests and any Subordinated
Claims.                                         

ARTICLE III 

TREATMENT OF CLAIMS AND INTERESTS 

3.1   Unclassified Claims                                             

(a)  Administrative Claims                                

     Except as otherwise provided for herein, and subject to the requirements of
Sections 12.1 -12.3 of this Plan, on, or as soon as reasonably practicable      
after, the latest of (i) the Distribution Date, (ii) the date such              
Administrative Claim becomes an Allowed Administrative Claim, or (iii) the date 
such Administrative Claim becomes payable pursuant to any agreement between a   
Debtor and the holder of such Administrative Claim, each holder of an Allowed   
Administrative Claim shall receive in full satisfaction, settlement, release,   
and discharge of and in exchange for such Allowed Administrative Claim (x) Cash 
equal to the unpaid portion of such Allowed Administrative Claim or (y) such    
other treatment as to which the applicable Debtor, and such holder shall have   
agreed upon in writing; provided, however, that Allowed Administrative Claims   
with respect to liabilities incurred by a Debtor in the ordinary course of      

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business during the Chapter 11 Case shall be paid in the ordinary course of     
business in accordance with the terms and conditions of any agreements relating 
thereto.                                                                        

(b)  Priority Tax Claims                                  

 Each holder of an Allowed Priority Tax Claim, at the sole option of the
Debtors, shall be entitled to receive on account of such Allowed Priority Tax   
Claim, in full satisfaction, settlement, release and discharge of and in        
exchange for such Allowed Priority Tax Claim, (i) equal Cash payments made on   
the last Business Day of every three (3) month period following the Effective   
Date, over a period not to exceed six (6) years after the assessment of the tax 
on which such Claim is based, totaling the principal amount of such Claim plus  
simple interest on any outstanding balance from the Effective Date calculated at
the interest rate available on ninety (90) day United States Treasuries on the  
Effective Date or (ii) such other treatment agreed to by the Allowed Priority   
Tax Claim holder and the Debtors.                                               

3.2   Unimpaired Classes Of Claims and Interests                      

(a)  Class 1:  Other Priority Claims                      

On, or as soon as reasonably practicable after, the latest of (i) the 
Distribution Date, (ii) the date such Claim becomes an Allowed Class 1 Claim, or
(iii) the date such Class 1 Claim becomes payable pursuant to any agreement     
between a Debtor and the holder of such Class 1 Claim, each holder of an Allowed
Class 1 Claim shall receive in full satisfaction, settlement, release, and      
discharge of and in exchange for such Allowed Class 1 Claim (x) Cash equal to   
the unpaid portion of such Allowed Class 1 Claim or (y) such other treatment as 
to which a Debtor and such holder shall have agreed upon in writing.            

(b)  Class 2:  Other Secured Claims                       

On the Effective Date, the legal, equitable and contractual rights of 
holders of an Allowed Class 2 Claim shall be Reinstated, subject to the         
provisions of Article VIII of this Plan.  The Debtors' failure to object to any 
such Class 2 Claims in the Chapter 11 Cases shall be without prejudice to ICG's 
or the Reorganized Debtors' right to contest or otherwise defend against such   
Claim in the appropriate forum when and if such Claim is sought to be enforced  
by the Other Secured Claim holder.  Notwithstanding section 1141(c) or any other
provision of the Bankruptcy Code, all pre-petition liens on property of any     
Debtor held by or on behalf of the Other Secured Claim holders with respect to  
such Claims shall survive the Effective Date and continue in accordance with the
contractual terms of the underlying agreements with such Claim holders until, as
to each such Claim holder, the Allowed Claims of such Other Secured Claim holder
are paid in full, subject to the provisions of Article VIII of this Plan.       
Nothing in this Section 3.2(b) or elsewhere in this Plan shall preclude the     
Debtors or Reorganized Debtors from challenging the validity of any alleged lien
on any asset of a Debtor or the value of such Collateral.                       

3.3   Impaired Classes Of Claims and Interests                        

(a)  Class 3:  Secured Lender Claims                      

 On the Effective Date, each holder of an Allowed Class 3 Claim, in full
satisfaction, settlement, release, and discharge of and in exchange for such    
Allowed Class 3 Claim, shall receive on or as soon as practicable after the     
Distribution Date, its Pro Rata share of one-hundred percent (100%) of the New  
Secured Notes.  If Class 3 accepts the Plan, the New Secured Notes shall have   
the terms and conditions set forth on Plan Exhibit F(1).  If Class 3 does not   
accept the Plan, the New Secured Notes shall have the terms and conditions set  
forth on Plan Exhibit F(2).  If Class 3 votes against the Plan, the Debtors     
shall seek confirmation of the Plan pursuant to section 1129(b) of the          
Bankruptcy Code with respect to Class 3.                                        

(b)  Class 4:  Convenience Claims                         

     On the Effective Date, each holder of an Allowed Class 4 Claim will receive
cash equal to the amount of such Allowed Claim (as reduced, if applicable,      
pursuant to an election by the holder thereof).                                 

(c) Class 5:  General Unsecured Claims                    

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On the Effective Date, each holder of an Allowed Class 5 Claim, shall 
receive, in full satisfaction, settlement, release and discharge of and in      
exchange for such Allowed Class 5 Claim:                                        

       (i)  its Pro Rata share of 100% of the New Common Shares issued and
outstanding as of the Effective Date (subject to Dilution); plus                

     (ii) for each holder of an Allowed Class 5 Claim as of the Rights
Offering Record Date, on the Rights Offering Commencement Date, its Rights      
Offering Pro Rata Share of the Rights Offering Distribution Pool.               

(d)  Class 6:  ICG Interests and Subordinated Claims        

   The holders of ICG Interests and Subordinated Claims shall not receive or
retain any property under the Plan on account of such Interests or Claims.  On  
the Effective Date, all of the ICG Interests shall be deemed cancelled and      
extinguished.                                                                   

3.4  Reservation of Rights Regarding Claims                           

   Except as otherwise explicitly provided in the Plan, nothing shall affect
the Debtors' or Reorganized Debtors' rights and defenses, both legal and        
equitable, with respect to any Claims, including, but not limited to, all rights
with respect to legal and equitable defenses to alleged rights of setoff or     
recoupment.                                                                     

ARTICLE IV  

ACCEPTANCE OR REJECTION OF THE PLAN 

4.1       Impaired Classes of Claims and Interests Entitled to Vote.  
Subject to Section 4.4 of the Plan, Claim and Interest holders in each Impaired 
Class of Claims or Interests are entitled to vote as a class to accept or reject
the Plan.                                                                       

4.2       Acceptance by an Impaired Class. In accordance with section 
1126(c) of the Bankruptcy Code and except as provided in section 1126(e) of the 
Bankruptcy Code, an Impaired Class of Claims shall have accepted the Plan if the
Plan is accepted by the holders of at least two-thirds ([_]) in dollar amount   
and more than one-half (1/2) in number of the Allowed Claims of such Class that 
have timely and properly voted to accept or reject the Plan.                    

    4.3       Presumed Acceptances by Unimpaired Classes.  Classes 1 and 2 are
Unimpaired by the Plan.  Under section 1126(f) of the Bankruptcy Code, such     
Claim holders are conclusively presumed to accept the Plan, and the votes of    
such Claim holders will not be solicited.                                       

     4.4       Classes Deemed to Reject Plan. Holders of Interests and Claims in
Class 6 are not entitled to receive or retain any property under the Plan. Under
section 1126(g) of the Bankruptcy Code, Class 6 Interest and Claim holders are  
deemed to reject the Plan, and the votes of such Interest or Claim holders will 
not be solicited.                                                               

4.5       Summary of Classes Voting on the Plan. As a result of the   
provisions of Sections 4.1, 4.3 and 4.4 of this Plan, the votes of holders of   
Claims in Classes 3, 4 and 5 will be solicited with respect to this Plan.       

    4.6       Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code.
To the extent that any Impaired Class rejects the Plan or is deemed to have     
rejected the Plan, the Debtors will request confirmation of the Plan, as it may 
be modified from time to time, under section 1129(b) of the Bankruptcy Code. The
Debtors reserve the right to alter, amend, modify, revoke or withdraw the Plan  
or any Plan Exhibit or Schedule, including to amend or modify it to satisfy the 
requirements of section 1129(b) of the Bankruptcy Code, if necessary.           

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ARTICLE V 

MEANS FOR IMPLEMENTATION OF THE PLAN

5.1    Continued Corporate Existence                                  

 Subject to the Restructuring Transactions defined in Section 5.4 of the
Plan, the Reorganized Debtors shall continue to exist after the Effective Date  
as separate corporate entities, in accordance with the applicable law in the    
respective jurisdictions in which they are incorporated and pursuant to their   
respective certificates or articles of incorporation and by-laws in effect prior
to the Effective Date, except to the extent such certificates or articles of    
incorporation and by-laws are amended by this Plan.                             

5.2    Cancellation Of Old Securities And Agreements                  

     On the Effective Date, except as otherwise provided for herein, (a) the Old
Securities and any other note, bond, indenture, or other instrument or document 
evidencing or creating any indebtedness or obligation of a Debtor, shall be     
canceled, and (b) the obligations of the Debtors under any agreements,          
indentures or certificates of designations governing the Old Securities and any 
other note, bond, indenture or other instrument or document evidencing or       
creating any indebtedness or obligation of a Debtor, as the case may be, shall  
be discharged.                                                                  

5.3    Certificates of Incorporation and By-laws                      

 The certificate or articles of incorporation and by-laws of each Debtor
shall be amended as necessary to satisfy the provisions of the Plan and the     
Bankruptcy Code and shall include, among other things, pursuant to section      
1123(a)(6) of the Bankruptcy Code, a provision prohibiting the issuance of non- 
voting equity securities, but only to the extent required by section 1123(a)(6) 
of the Bankruptcy Code.  The amended Certificate of Incorporation and By-laws of
Reorganized ICG shall be in substantially the form attached to this Plan as     
Exhibits A and B, respectively.                                                 

5.4    Restructuring Transactions                                     

      (a) On or after the Effective Date, the applicable Reorganized
Debtors may enter into such transactions and may take such actions as may be    
necessary or appropriate to effect a corporate restructuring of their respective
businesses, to otherwise simplify the overall corporate structure of the        
Reorganized Debtors, or to reincorporate certain of the Subsidiary Debtors under
the laws of jurisdictions other than the laws of which the applicable Subsidiary
Debtors are presently incorporated. Such restructuring may include one or more  
mergers, consolidations, restructures, dispositions, liquidations, or           
dissolutions, as may be determined by the Debtors or Reorganized Debtors to be  
necessary or appropriate (collectively, the "Restructuring Transactions"). The  
actions to effect the Restructuring Transactions may include: (a) the execution 
and delivery of appropriate agreements or other documents of merger,            
consolidation, restructuring, disposition, liquidation, or dissolution          
containing terms that are consistent with the terms of the Plan and that satisfy
the applicable requirements of applicable state law and such other terms to     
which the applicable entities may agree; (b) the execution and delivery of      
appropriate instruments of transfer, assignment, assumption, or delegation of   
any asset, property, right, liability, duty, or obligation on terms consistent  
with the terms of the Plan and having such other terms to which the applicable  
entities may agree; (c) the filing of appropriate certificates or articles of   
merger, consolidation, or dissolution pursuant to applicable state law; and (d) 
all other actions that the applicable entities determine to be necessary or     
appropriate, including making filings or recordings that may be required by     
applicable state law in connection with such transactions. The Restructuring    
Transactions may include one or more mergers, consolidations, restructures,     
dispositions, liquidations, or dissolutions, as may be determined by the        
Reorganized Debtors to be necessary or appropriate to result in substantially   
all of the respective assets, properties, rights, liabilities, duties, and      
obligations of certain of the Reorganized Debtors vesting in one or more        
surviving, resulting, or acquiring corporations. In each case in which the      
surviving, resulting, or acquiring corporation in any such transaction is a     
successor to a Reorganized Debtor, such surviving, resulting, or acquiring      
corporation will perform the obligations of the applicable Reorganized Debtor   
pursuant to the Plan to pay or otherwise satisfy the Allowed Claims against such
Reorganized Debtor, except as provided in any contract, instrument, or other    
agreement or document effecting a disposition to such surviving, resulting, or  
acquiring corporation, which may provide that another Reorganized Debtor will   
perform such obligations.                                                       

          (b) As part of the Restructuring Transactions, on, prior to, or as
soon as                                                                         

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practicable after, the Effective Date, Reorganized ICG shall take whatever steps
are necessary and appropriate to wind-up and terminate the following entities'  
corporate existence: ICG Tevis, Inc. (Delaware); ICG Funding, LLC (Delaware);   
ICG Canadian Acquisition, Inc. (Delaware); ICG Holdings (Canada) Co. (Nova      
Scotia Unlimited Liability Company); ICG Services, Inc. (Delaware); ICG Enhanced
Services, Inc. (Colorado); Communications Buying Group, Inc. (Ohio); PTI Harbor 
Bay, Inc. (Washington); Bay Area Teleport, Inc. (Delaware); ICG Access Services-
Southeast-Inc. (Delaware); Trans American Cable, Inc. (Kentucky); ICG Telecom of
San Diego, L.P. (CA Limited Partnership); Western Plains Finance, L.L.C. (NV    
Limited Liability Company); ICG Telecom Canada, Inc. (Federal Canadian); Zycom  
Corporation (Alberta, Canada); Zycom Corporation (Texas); Zycom Network         
Services, Inc. (Texas); DownNorth, Inc. (Georgia); and ICG NetAhead, Inc.       
(Delaware).                                                                     

5.5    Issuance of New Common Stock, New Secured Notes and Rights     

On the Effective Date, Reorganized ICG shall issue for distribution in
accordance with the terms of the Plan the New Secured Notes and ten (10) million
shares of New Common Stock to the holders of Allowed Claims in Classes 3 and 5, 
respectively.  In addition, in accordance with the terms of the Rights Offering 
termsheet attached hereto as Exhibit E, on and as of the Rights Offering        
Commencement Date, Reorganized ICG will issue the Rights to the holders of      
Allowed Claims in Class 5 as of the Rights Offering Record Date, as contemplated
by this Plan, and sufficient shares of New Common Stock for purchase pursuant to
the Rights.  The issuance of the New Common Stock, the New Secured Notes, and   
the Rights, and the distribution thereof shall be exempt from registration under
applicable securities laws pursuant to section 1145 of the Bankruptcy Code.     
Without limiting the effect of section 1145 of the Bankruptcy Code, on the      
Effective Date, Reorganized ICG will enter into a Registration Rights Agreement 
with each Allowed Class 5 Claim holder (a) who by virtue of holding New Common  
Stock, the Rights to be distributed under the Plan and/or its relationship with 
Reorganized ICG could reasonably be deemed to be an "underwriter" or "affiliate"
(as such terms are used within the meaning of applicable securities laws) of    
Reorganized ICG, and (b) who requests in writing that Reorganized ICG execute   
such agreement.  The Registration Rights Agreements may contain certain demand  
and piggyback registration rights for the benefit of the signatories thereto.   
The Registration Rights Agreement shall be in substantially the form attached to
this Plan as Exhibit D.  Reorganized ICG shall use reasonable efforts to have   
the New Common Stock listed for trading on a national securities exchange.      

5.6    Compensation And Benefit Programs                              

     (a) Except and to the extent previously assumed or rejected by an
order of the Bankruptcy Court on or before the Confirmation Date, all employee  
compensation and benefit programs of the Debtors, including programs subject to 
sections 1114 and 1129(a)(13) of the Bankruptcy Code, entered into before or    
after the Petition Date and not since terminated, shall be deemed to be, and    
shall be treated as though they are, executory contracts that are assumed under 
Section 7.1 of this Plan.                                                       

     (b) On or about the Effective Date, management and the designated
employees of Reorganized ICG and the other Reorganized Debtors shall receive    
stock options which are more specifically described in the Management Option    
Plan.  The Management Option Plan shall be substantially in the form as Exhibit 
C to this Plan.                                                                 

5.7    Directors And Officers of Reorganized Debtors                  

     (a) Appointment.  The existing senior officers of ICG shall serve
initially in the same capacities after the Effective Date for Reorganized ICG.  
The initial board of directors of Reorganized ICG shall consist of seven (7)    
directors.  Such board of directors shall be divided into Class I and Class II, 
with Class I consisting of four (4) directors, and Class II consisting of three 
(3) directors.  The Creditors' Committee shall be entitled to appoint all Class 
I directors, and the Chief Executive Officer shall be entitled to appoint all   
Class II directors.  All of the selected directors shall be reasonably          
acceptable to the Chief Executive Officer and the Creditors' Committee.  The    
Chief Executive Officer shall be Chairman of the board of directors.  The       
Persons designating board members shall file with the Bankruptcy Court and give 
to ICG written notice of the identities of such members on a date that is not   
less than five (5) days prior to the Confirmation Hearing; provided, however,   
that if and to the extent that the Creditors' Committee fails to file and give  
such notice, ICG shall designate the members of the board of directors of       
Reorganized ICG by announcing their identities at the Confirmation Hearing.     

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        (b) Terms.  Reorganized ICG board members shall serve for an initial
two (2) year term commencing on the Effective Date as determined by the Debtors.
The terms will be staggered such that each year one class of directors will     
stand for re-election.                                                          

     (c) Vacancies.  Until the first annual meeting of shareholders of
Reorganized ICG after the Effective Date, any vacancy in the directorship       
originally (i) selected by the Creditors' Committee shall be filled by a person 
designated by such director as a replacement to serve out the remainder of the  
applicable term; and (ii) selected by the Chief Executive Officer, shall be     
filled by a person designated by the Chief Executive Officer to serve out the   
remainder of the applicable term.                                               

5.8     Revesting Of Assets; Releases of Liens                        

  The property of each Debtor's Estate, together with any property of each
Debtor that is not property of its Estate and that is not specifically disposed 
of pursuant to the Plan, shall revest in the applicable Debtor on the Effective 
Date.  Thereafter, each Debtor may operate its business and may use, acquire,   
and dispose of property free of any restrictions of the Bankruptcy Code, the    
Bankruptcy Rules, and the Bankruptcy Court.  As of the Effective Date, all      
property of each Debtor shall be free and clear of all Claims and Interests,    
except as specifically provided in the Plan or the Confirmation Order.  Without 
limiting the generality of the foregoing, each Debtor may, without application  
to or approval by the Bankruptcy Court, pay fees that it incurs after the       
Effective Date for reasonable professional fees and expenses.                   

5.9    Preservation Of Rights Of Action                               

    Except as otherwise provided in this Plan or the Confirmation Order, or in
any contract, instrument, release, indenture or other agreement entered into in 
connection with the Plan, in accordance with section 1123(b) of the Bankruptcy  
Code, the Reorganized Debtors shall retain and may enforce, sue on, settle, or  
compromise (or decline to do any of the foregoing) all Litigation Claims that   
the Debtors or the Estates may hold against any Person or entity.  Each Debtor  
or its successor(s) may pursue such retained Litigation Claims as appropriate,  
in accordance with the best interests of the Reorganized Debtor or its          
successor(s) who hold such rights.  Schedule 5.9 to the Plan contains a non-    
exclusive list of claims or causes of actions that the Debtors hold or may hold 
either in pending or potential litigation.  The Debtors reserve their right to  
modify Schedule 5.9 to add or delete parties or causes of action, but disclaim  
any obligation to do so.                                                        

5.10   Effectuating Documents; Further Transactions                   

The Chief Executive Officer, chief financial officer, or any other    
appropriate officer of ICG or any applicable Debtor, as the case may be, shall  
be authorized to execute, deliver, file, or record such contracts, instruments, 
releases, indentures, and other agreements or documents, and take such actions  
as may be necessary or appropriate to effectuate and further evidence the terms 
and conditions of the Plan.  The secretary or assistant secretary of ICG or any 
applicable Debtor, as the case may be, shall be authorized to certify or attest 
to any of the foregoing actions.                                                

5.11   Exemption From Certain Transfer Taxes                          

  Pursuant to section 1146(c) of the Bankruptcy Code, any transfers from a
Debtor to a Reorganized Debtor or any other Person or entity pursuant to the    
Plan in the United States shall not be subject to any document recording tax,   
stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp act, 
real estate transfer tax, mortgage recording tax or other similar tax or        
governmental assessment, and the Confirmation Order shall direct the appropriate
state or local governmental officials or agents to forego the collection of any 
such tax or governmental assessment and to accept for filing and recordation any
of the foregoing instruments or other documents without the payment of any such 
tax or governmental assessment.                                                 

5.12   Releases and Related Matters                                   

(a)  Releases by Debtors                                    

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     As of the Effective Date, for good and valuable consideration, the adequacy
of  which  is hereby confirmed, the Debtors and Reorganized Debtors will be     
deemed to forever release, waive and discharge all claims, obligations, suits,  
judgments, damages, demands, debts, rights, causes of action and liabilities    
whatsoever in connection with or related to the Debtors and the Subsidiaries,   
the Chapter 11 Case or the Plan (other than the rights of the Debtors or        
Reorganized Debtors to enforce the Plan and the contracts, instruments,         
releases, indentures, and other agreements or documents delivered thereunder)   
whether liquidated or unliquidated, fixed or contingent, matured or unmatured,  
known or unknown, foreseen or unforseen, then existing or thereafter arising, in
law, equity or otherwise that are based in whole or part on any act, omission,  
transaction, event or other occurrence taking place on or prior to the Effective
Date in any way relating to the Debtors, the Reorganized Debtors or their       
Subsidiaries, the Chapter 11 Case or the Plan, and that may be asserted by or on
behalf of the Debtors or their Estates or the Reorganized Debtors against (i)   
the Debtors' or Subsidiaries' present and former directors, officers, employees,
agents and professionals as of the Petition Date or thereafter and (ii) the     
Creditors' Committee and its members.                                           

(b) Release by Holders of Claims and Interests              

     As of the Effective Date, for good and valuable consideration, the adequacy
of  which  is hereby confirmed, each holder of a Claim or Interest that         
affirmatively votes in favor of the Plan shall have agreed to forever release,  
waive and discharge all claims, obligations, suits, judgments, damages, demands,
debts, rights, causes of action and liabilities whatsoever in connection with or
related to the Debtors and the Subsidiaries, the Chapter 11 Case or the Plan    
(other than the rights of the Debtors or Reorganized Debtors to enforce the Plan
and the contracts, instruments, releases, indentures, and other agreements or   
documents delivered thereunder) whether liquidated or unliquidated, fixed or    
contingent, matured or unmatured, known or unknown, foreseen or unforseen, then 
existing or thereafter arising, in law, equity or otherwise that are based in   
whole or part on any act, omission, transaction, event or other occurrence      
taking place on or prior to the Effective Date in any way relating to the       
Debtors, the Reorganized Debtors or their Subsidiaries, the Chapter 11 Case or  
the Plan, against (i) the Debtors and their Subsidiaries, (ii) the Debtors' and 
their Subsidiaries' present and former directors, officers, employees, agents   
and professionals as of the Petition Date or thereafter and (iii) the Creditors'
Committee and its members.                                                      

(c)  Injunction Related to Releases                         

 As further provided in Article XII of this Plan, the Confirmation Order
will enjoin the prosecution, whether directly, derivatively or otherwise, of any
claim, obligation, suit, judgment, damage, demand, debt, right, cause of action,
liability or interest released, discharged or terminated pursuant to the Plan.  

5.13  Lucent Settlement                                               

     On the Effective Date, the Debtors and Lucent Technologies, Inc.  (together
with its subsidiaries and affiliates, "Lucent") will enter into the settlement  
agreement as set forth on Plan Schedule 5.13, in full satisfaction of all claims
and disputes between the parties arising out of agreements, acts or events in   
existence or occurring prior to the Effective Date.                             

5.14  Cisco Settlement                                                

On the Effective Date, the Debtors and Cisco Systems, Inc. and Cisco  
Capital (collectively, "Cisco") will enter into the settlement agreement as set 
forth on Plan Schedule 5.14, in full satisfaction of all claims and disputes    
between the parties arising out of agreements, acts or events in existence or   
occurring prior to the Effective Date.                                          

ARTICLE VI  

SUBSTANTIVE CONSOLIDATION 

6.1   Substantive Consolidation                                       

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 The  Plan is premised upon the substantive consolidation of the Debtors
only for purposes of the Plan, for voting, confirmation and distribution        
purposes.  Except as set forth in Section 5.4, the Plan does not contemplate the
merger or dissolution of any Debtor entity or the transfer or commingling of any
asset of any Debtor.  On the Effective Date, (a) all assets and liabilities of  
the Debtors shall be deemed merged or treated as though they were merged into   
and with the assets and liabilities of ICG Communications, Inc.; (b) no         
distributions shall made under the Plan on account of Intercompany Claims; (c)  
no distributions shall be made under the Plan on account of Subsidiary          
Interests; and (d) all guarantees of the Debtors of the obligations of any other
Debtor shall be deemed eliminated so that any claim against any Debtor and any  
guarantee thereof executed by any other Debtor and any joint or several         
liability of any of the Debtors shall be deemed to be one obligation of the     
consolidated Debtors.  Such substantive consolidation (other than for purposes  
related to the Plan) shall not affect (i) the legal and corporate structures of 
the Reorganized Debtors, subject to the right of the Debtors or Reorganized ICG 
to effect Restructuring Transactions as provided in Section 5.4 of the Plan,    
(ii) Intercompany Claims, (iii) Subsidiary Interests, and (iv) pre and post     
Commencement Date guarantees that are required to be maintained (x) in          
connection with executory contracts or unexpired leases that were entered into  
during the Chapter 11 Cases or that have been or will be assumed, or (y)        
pursuant to the Plan.                                                           

6.2    Order Granting Substantive Consolidation                       

   This Plan shall serve as a motion seeking entry of an order substantively
consolidating the Chapter 11 Cases, as described in Section 6.1 above.  Unless  
an objection to substantive consolidation is made in writing by any creditor    
affected by the Plan as herein provided on or before five (5) days prior to the 
date that is fixed by the Court as the last date on which acceptances to this   
Plan may be received, or such other date as may be fixed by the Court, the      
Substantive Consolidation order (which may be the Confirmation Order) may be    
entered by the Court.  In the event any such objections are timely filed, a     
hearing with respect thereto shall be scheduled by the Court, which hearing may,
but need not, coincide with the Confirmation Hearing.                           

ARTICLE VII 

TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES

7.1    Assumed Contracts And Leases                                   

     (a) Except as otherwise provided in the Plan, or in any contract,
instrument, release, indenture or other agreement or document entered into in   
connection with the Plan, as of the Effective Date each Debtor shall be deemed  
to have assumed each executory contract and unexpired lease to which it is a    
party, including those listed on Schedule 7.1 attached hereto, unless such      
contract or lease (i) was previously assumed or rejected by such Debtor, (ii)   
previously expired or terminated pursuant to its own terms, or (iii) is listed  
on Schedule 7.3 attached hereto as being an executory contract or unexpired     
lease to be rejected, provided, however, that the Debtors reserve their right,  
--------  -------                   
at any time prior to the Confirmation Date, to amend Schedule 7.1 to delete an  
unexpired lease or executory contract therefrom or add any unexpired lease or   
executory contract thereto.  To the extent that an executory contract or        
unexpired lease is not listed on either Schedule 7.1 or Schedule 7.3, such      
executory contract or unexpired lease shall be deemed assumed as if such        
executory contract or lease had been included on Schedule 7.1.  The Confirmation
Order shall constitute an order of the Bankruptcy Court under section 365 of the
Bankruptcy Code approving the contract and lease assumptions described above, as
of the Effective Date.                                                          

       (b) Each executory contract and unexpired lease that is assumed and
relates to the use, ability to acquire, or occupancy of real property shall     
include (i) all modifications, amendments, supplements, restatements, or other  
agreements made directly or indirectly by any agreement, instrument, or other   
document that in any manner affect such executory contract or unexpired lease   
and (ii) all executory contracts or unexpired leases appurtenant to the         
premises, including all easements, licenses, permits, rights, privileges,       
immunities, options, rights of first refusal, powers, uses, usufructs,          
reciprocal easement agreements, vaults, tunnel or bridge agreements or          
franchises, and any other interests in real estate or rights in rem related to  
such premises, unless any of the foregoing agreements has been rejected pursuant
to an order of the Bankruptcy Court.                                            

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 (c) To the extent that any of the Debtors' contracts with its
customers are executory contracts within the meaning of applicable law, such    
contracts shall be deemed assumed pursuant to Section 7.1(a) of this Plan. Due  
to the extremely large number of customer contracts, customer contracts are not 
listed on Schedule 7.1. A list of all of the Debtors' customer contracts is     
available at the Debtors' corporate headquarters, and will be made available    
upon request to the Debtors.                                                    

7.2   Payments Related To Assumption Of Contracts And Leases          

   Any monetary amounts by which each executory contract and unexpired lease
to be assumed pursuant to the Plan is in default shall be satisfied, under      
section 365(b)(1) of the Bankruptcy Code, at the option of the Debtor party to  
the contract or lease or the assignee of such Debtor party assuming such        
contract or lease, by Cure.  If there is a dispute regarding (a) the nature or  
amount of any Cure, (b) the ability of any Reorganized Debtor or any assignee to
provide "adequate assurance of future performance" (within the meaning of       
section 365 of the Bankruptcy Code) under the contract or lease to be assumed,  
or (c) any other matter pertaining to assumption, Cure shall occur following the
entry of a Final Order resolving the dispute and approving the assumption or    
assumption and assignment, as the case may be.  The Confirmation Order shall    
contain provisions providing for notices of proposed assumptions and proposed   
cure amounts to be sent to applicable third parties and for procedures for      
objecting thereto and resolution of disputes by the Bankruptcy Court.           

7.3   Rejected Contracts And Leases                                   

   On the Effective Date, each executory contract and unexpired lease listed
on Schedule 7.3 to this Plan shall be rejected pursuant to section 365 of the   
Bankruptcy Code.  Each contract or lease listed on Schedule 7.3 shall be        
rejected only to the extent that any such contract or lease constitutes an      
executory contract or unexpired lease; provided, however, that the Debtors      
               --------  -------
reserve their right, at any time prior to the Confirmation Date, to amend       
Schedule 7.3 to delete an unexpired lease or executory contract therefrom or add
any unexpired lease or executory contract thereto.  To the extent that an       
executory contract or unexpired lease is not listed on either Schedule 7.1 or   
Schedule 7.3, such executory contract or unexpired lease shall be deemed assumed
as if such executory contract or lease had been included on Schedule 7.1.       
Listing a contract or lease on Schedule 7.1 or 7.3 shall not constitute an      
admission by ICG nor Reorganized ICG that such contract or lease is an executory
contract or unexpired lease or that ICG or Reorganized ICG has any liability    
thereunder.  The Confirmation Order shall constitute an order of the Bankruptcy 
Court approving such rejections, pursuant to section 365 of the Bankruptcy Code,
as applicable, as of the Effective Date.                                        

7.4   Rejection Damages Bar Date                                      

If the rejection by a Debtor, pursuant to the Plan or otherwise, of an
executory contract or unexpired lease results in a Claim, then such Claim shall 
be forever barred and shall not be enforceable against any Debtor or Reorganized
Debtor or the properties of any of them unless a Proof of Claim is filed with   
the clerk of the Bankruptcy Court and served upon counsel to the Debtors, and   
counsel to the Creditors' Committee, within thirty (30) days after service of   
the earlier of (a) notice of the Confirmation Order, or (b) other notice that   
the executory contract or unexpired lease has been rejected.                    

ARTICLE VIII  

PROVISIONS GOVERNING DISTRIBUTIONS

8.1   Distributions For Claims Allowed As Of The Effective Date       

    Except as otherwise provided herein or as ordered by the Bankruptcy Court,
and subject to the provisions of Section 9.3 and 9.4 of this Plan, all          
distributions to holders of Allowed Claims as of the Effective Date shall be    
made on the Distribution Date.  Distributions on account of Claims that first   
become Allowed Claims after the Effective Date shall be made pursuant to Section
9.4 of this Plan.  Notwithstanding the date on which any distribution of New    
Securities is actually made to a holder of a Claim that is an Allowed Claim on  
the Effective Date, as of the date of the distribution of such securities such  
holder shall be deemed to have the rights of a holder as of the Effective Date. 

8.2   Interest On Claims                                              

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     Unless otherwise specifically provided for in this Plan or the Confirmation
Order, or required by applicable bankruptcy law, post-petition interest shall   
not accrue or be paid on Claims, and no holder of a Claim shall be entitled to  
interest accruing on or after the Petition Date on any Claim. Interest shall not
accrue or be paid upon any Disputed Claim in respect of the period from the     
Petition Date to the date a final distribution is made thereon if and after such
Disputed Claim becomes an Allowed Claim.                                        

8.3     Distributions by Disbursing Agent                             

          (a)   The Disbursing Agent shall make all distributions required
under this Plan.                                                                

     (b)   If the Disbursing Agent is an independent third party
designated by the Reorganized Debtors to serve in such capacity, such Disbursing
Agent shall receive, without further Bankruptcy Court approval, reasonable      
compensation for distribution services rendered pursuant to the Plan and        
reimbursement of reasonable out-of-pocket expenses incurred in connection with  
such services from the Reorganized Debtors on terms acceptable to the           
Reorganized Debtors. No Disbursing Agent shall be required to give any bond or  
surety or other security for the performance of its duties unless otherwise     
ordered by the Bankruptcy Court.                                                

   8.4     Record Date For Distributions To Holders Of Lender Claims and Old
Notes                                                                           

At the close of business on the Distribution Record Date, the transfer
records for the Old Notes and Lender Claims shall be closed, and there shall be 
no further changes in the record holders of the Old Notes or Lender Claims. None
of Reorganized ICG, the Disbursing Agent, nor the administrative agent for the  
Lenders shall have any obligation to recognize any transfer of such Old Notes or
Lender Claims occurring after the Distribution Record Date and shall be entitled
instead to recognize and deal for all purposes hereunder with only those record 
holders as of the close of business on the Distribution Record Date.            

8.5     Means Of Cash Payment                                         

 Cash payments made pursuant to this Plan shall be in U.S. funds, by the
means agreed to by the payor and the payee, including by check or wire transfer,
or, in the absence of an agreement, such commercially reasonable manner as the  
payor shall determine in its sole discretion.                                   

8.6     Calculation Of Distribution Amounts Of New Common Shares      

  No fractional shares of New Common Shares shall be issued or distributed
under the Plan or by Reorganized ICG or the Disbursing Agent. Each Person       
entitled to receive New Common Shares will receive the total number of whole    
shares of New Common Shares to which such Person is entitled. Whenever any      
distribution to a particular Person would otherwise call for distribution of a  
fraction of a share of New Common Shares, the actual distribution of shares of  
such stock shall be rounded to the next higher or lower whole number as follows:
(a) fractions one-half ( 1/2) or greater shall be rounded to the next higher    
whole number, and (b) fractions of less than one-half ( 1/2) shall be rounded to
the next lower whole number. No consideration shall be provided in lieu of      
fractional shares that are rounded down.                                        

8.7     Delivery Of Distributions                                     

    Distributions to holders of Allowed Claims shall be made by the Disbursing
Agent (a) at the addresses set forth on the Proofs of Claim filed by such       
holders (or at the last known addresses of such holders if no Proof of Claim is 
filed or if the Debtors have been notified of a change of address), (b) at the  
addresses set forth in any written notices of address changes delivered to the  
Disbursing Agent after the date of any related Proof of Claim, (c) at the       
addresses reflected in the Schedules if no Proof of Claim has been filed and the
Disbursing Agent has not received a written notice of a change of address, or   
(d) in the case of the holder of an Allowed Old Note Claim, at the addresses    
contained in the official records of the indenture trustee under the Old        
Indenture, or (e) at the addresses set forth in a properly completed letter of  
transmittal accompanying securities properly remitted to the Debtors. If any    
holder's distribution is returned as undeliverable, no further distributions to 
such holder shall be made unless and until the Disbursing Agent is notified of  
such holder's then current address, at which time all missed distributions shall
be made to such holder without interest. Amounts in respect of undeliverable    
distributions made by the Disbursing Agent, shall be returned to                

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the Reorganized Debtors until such distributions are claimed. All claims for    
undeliverable distributions made by the Disbursing Agent must be made on or     
before the first (1/st/) anniversary of the Effective Date, after which date all
unclaimed property shall revert to the Reorganized Debtors free of any          
restrictions thereon and the claims of any holder or successor to such holder   
with respect to such property shall be discharged and forever barred,           
notwithstanding any federal or state escheat laws to the contrary. Nothing      
contained in the Plan shall require the Debtors, Reorganized Debtors, any       
Disbursing Agent or the Indenture Trustee to attempt to locate any holder of an 
Allowed Claim.                                                                  

8.8     Surrender of Securities and Instruments                       

(a)   Old Notes                                       

Except as provided in Section 8.8(b) of the Plan for lost, stolen,    
mutilated or destroyed Old Notes, each holder of an Allowed Claim evidenced by  
an Old Note shall tender such Old Note to the Indenture Trustee in accordance   
with written instructions to be provided in a letter of transmittal to such     
holders by the Indenture Trustee as promptly as practicable following the       
Effective Date. Such letter of transmittal shall specify that delivery of such  
Old Notes will be effected, and risk of loss and title thereto will pass, only  
upon the proper delivery of such Old Notes with the letter of transmittal in    
accordance with such instructions. Such letter of transmittal shall also        
include, among other provisions, customary provisions with respect to the       
authority of the holder of the applicable Old Note to act and the authenticity  
of any signatures required on the letter of transmittal. All surrendered notes  
and Old Notes shall be marked as canceled and delivered by the Indenture Trustee
to Reorganized ICG.                                                             

(b)   Lost, Stolen, Mutilated or Destroyed Old Notes  

In addition to any requirements under the applicable certificate or   
articles of incorporation or by-laws of the applicable Debtor, any holder of a  
Claim evidenced by an Old Note that has been lost, stolen, mutilated or         
destroyed shall, in lieu of surrendering such Old Note, deliver to the Indenture
Trustee: (i) evidence satisfactory to the Indenture Trustee of the loss, theft, 
mutilation or destruction; and (ii) such indemnity as may be required by the    
Indenture Trustee to hold the Indenture Trustee harmless from any damages,      
liabilities or costs incurred in treating such individual as a holder of an Old 
Note that has been lost, stolen, mutilated or destroyed. Upon compliance with   
this Section 8.8(b) by a holder of a Claim evidenced by an Old Note, such holder
shall, for all purposes under the Plan, be deemed to have surrendered its Old   
Note, as applicable.                                                            

(c)   Failure to Surrender Canceled Old Notes         

Any holder of an Old Note that fails to surrender or be deemed to have
surrendered such note or Old Note before the second (2nd) anniversary of the    
Effective Date shall have its claim for a distribution on account of such Old   
Note discharged and shall be forever barred from asserting any such claim       
against any Reorganized Debtor or their respective property.                    

8.9     Withholding And Reporting Requirements                        

In connection with this Plan and all distributions hereunder, the     
Disbursing Agent shall, to the extent applicable, comply with all tax           
withholding and reporting requirements imposed by any federal, state,           
provincial, local, or foreign taxing authority, and all distributions hereunder 
shall be subject to any such withholding and reporting requirements. The        
Disbursing Agent shall be authorized to take any and all actions that may be    
necessary or appropriate to comply with such withholding and reporting          
requirements. Notwithstanding any other provision of the Plan: (a) each holder  
of an Allowed Claim that is to receive a distribution of New Securities pursuant
to the Plan shall have sole and exclusive responsibility for the satisfaction   
and payment of any tax obligations imposed by any governmental unit, including  
income, withholding and other tax obligations, on account of such distribution, 
and (b) no distribution shall be made to or on behalf of such holder pursuant to
the Plan unless and until such holder has made arrangements satisfactory to the 
Disbursing Agent for the payment and satisfaction of such tax obligations. Any  
New Securities to be distributed pursuant to the Plan shall, pending the        
implementation of such arrangements, be treated as an undeliverable distribution
pursuant to Section 8.7 of this Plan.                                           

8.10    Setoffs                                                       

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    The Reorganized Debtors may, but shall not be required to, set off against
any Claim, and the payments or other distributions to be made pursuant to the   
Plan in respect of such Claim, claims of any nature whatsoever that the Debtors 
or Reorganized Debtors may have against the holder of such Claim; provided,     
however, that neither the failure to do so nor the allowance of any Claim       
hereunder shall constitute a waiver or release by the Reorganized Debtors of any
such claim that the Debtors or Reorganized Debtors may have against such holder.

ARTICLE IX  

PROCEDURES FOR RESOLVING DISPUTED,  
CONTINGENT, AND UNLIQUIDATED CLAIMS AND 
DISTRIBUTIONS WITH RESPECT THERETO  

9.1     Prosecution Of Objections to Claims                           

(a)   Objections to Claims                            

  All objections to Claims must be filed and served on the holders of such
Claims by the Claims Objection Deadline. If an objection has not been filed to a
Proof of Claim or a scheduled Claim by the Claims Objection Deadline, the Claim 
to which the Proof of Claim or scheduled Claim relates will be treated as an    
Allowed Claim if such Claim has not been allowed earlier.                       

(b)   Authority to Prosecute Objections               

             (i)   After the Confirmation Date, only the Reorganized
Debtors will have the authority to file objections, settle, compromise, withdraw
or litigate to judgment objections to Claims, including Claims for reclamation  
under section 546(c) of the Bankruptcy Code. Except as provided in Section 12.7,
from and after the Effective Date, the Reorganized Debtors may settle or        
compromise any Disputed Claim without approval of the Bankruptcy Court.         

                  (ii)  On or before the last Business Day of each month or as
otherwise agreed in writing by the Creditors' Committee or the Claims Resolution
Committee, as set forth in Section 12.18, the Reorganized Debtors will provide  
counsel to the Claims Resolution Committee with written notice of each Disputed 
Claim that has been settled or compromised in the prior month, other than such  
settlements or compromises that fall within the parameters of settlement        
guidelines to be agreed to by the Debtors and the Creditors' Committee or the   
Claims Resolution Committee. Within ten (10) days after the receipt of such     
notice, the Claims Resolution Committee will provide the Reorganized Debtors    
with written notice of any such settlements or compromises with which it does   
not concur. If the Reorganized Debtors and the Claims Resolution Committee      
cannot reach agreement with respect to any such settlement or compromise, the   
Claims Resolution Committee will be permitted to file and serve on the          
Reorganized Debtors an objection to the reasonableness of such settlement or    
compromise by the last Business Day of the month following the month in which   
the Claims Resolution Committee received written notice of the settlement or    
compromise, with the reasonableness of such settlement or compromise to be      
determined by the Bankruptcy Court. If the Claims Resolution Committee does not 
provide a written notice and file and serve an objection as specified in this   
Section with respect to any particular settlement or compromise, then such      
settlement or compromise will be deemed resolved on the terms and subject to the
conditions agreed to by the Reorganized Debtors. The Reorganized Debtors and the
Claims Resolution Committee may modify the foregoing procedures by a writing    
executed by both.                                                               

9.2     Treatment of Disputed Claims                                  

Notwithstanding any other provisions of the Plan, no payments or      
distributions will be made on account of a Disputed Claim, or, if less than the 
entire claim is a Disputed Claim, the portion of a Claim that is disputed, until
such Claim becomes an Allowed Claim.                                            

9.3     Disputed Claims Reserves                                      

  Prior to making any distributions of the New Common Shares to holders of
Allowed Class 5 Claims, the Disbursing Agent shall establish appropriate        
reserves for Disputed Claims in Class 5, to withhold from any such              

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distributions 100% of distributions to which holders of Disputed Claims in Class
5 would be entitled under the Plan as of such date if such Disputed Claims in   
Class 5 were Allowed Claims in their Disputed Claim Amount. The Disbursing Agent
shall also establish appropriate reserves for Disputed Claims in other Classes, 
as it determines necessary and appropriate.                                     

   9.4     Distributions on Account of Disputed Claims Once They Are Allowed
and Additional Distributions on Account of Previously Allowed Claims            

On each Quarterly Distribution Date, the Reorganized Debtors will make
distributions (a) on account of any Disputed Claim that has become an Allowed   
Claim during the preceding calendar quarter and (b) on account of previously    
Allowed Claims, from the Disputed Claim reserves, of property that would have   
been distributed to such Claim holders on the dates distributions previously    
were made to holders of Allowed Claims had the Disputed Claims that have become 
Allowed Claims been Allowed on such dates. Such distributions will be made      
pursuant to the provisions of the Plan governing the applicable Class. Holders  
of such claims that are ultimately Allowed will also be entitled to receive, on 
the basis of the amount ultimately allowed, the amount of any dividends or other
distributions, if any, received on account of the shares of New Common Shares   
between the Effective Date and the date such shares are distributed to such     
Claim holder.                                                                   

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ARTICLE X 

CONDITIONS PRECEDENT TO CONFIRMATION  
AND CONSUMMATION OF THE PLAN  

10.1    Conditions To Confirmation                                    

The following are conditions precedent to the occurrence of the       
Confirmation Date: (a) the entry of an order finding that the Disclosure        
Statement contains adequate information pursuant to section 1125 of the         
Bankruptcy Code and (b) the proposed Confirmation Order shall be in form and    
substance acceptable to the Debtors.                                            

10.2    Conditions To Effective Date                                  

   The following are conditions precedent to the occurrence of the Effective
Date, each of which must be satisfied or waived in accordance with Section 10.3 
of this Plan:                                                                   

           (a)   The Confirmation Order shall have been entered and become a
Final Order in form and substance reasonably satisfactory to the Debtors and    
shall:                                                                          

                 (i)    provide that the Debtors and Reorganized Debtors are
authorized and directed to take all actions necessary or appropriate to enter   
into, implement and consummate the contracts, instruments, releases, leases,    
indentures and other agreements or documents created in connection with the Plan
or the Restructuring Transactions;                                              

          (ii)   authorize the issuance of New Securities; and

                   (iii)  provide that the New Common Shares, New Secured Notes,
and Rights issued under the Plan in exchange for Claims against the Debtors are 
exempt from registration under the Securities Act of 1933 pursuant to section   
1145 of the Bankruptcy Code, except to the extent that holders of the New Common
Shares or Rights are "issuers" or "underwriters," as those terms are defined in 
section 1145 of the Bankruptcy Code.                                            

           (b)   All Plan Exhibits shall be in form and substance reasonably
acceptable to the Debtors and the Creditors' Committee, and shall have been     
executed and delivered.                                                         

            (c)   All actions, documents and agreements necessary to implement
the Plan shall have been effected or executed.                                  

10.3    Waiver Of Conditions                                          

    Each of the conditions set forth in Section 10.2 of the Plan may be waived
in whole or in part by the Debtors. The failure to satisfy or waive any         
condition to the Effective Date may be asserted by the Debtors or Reorganized   
Debtors regardless of the circumstances giving rise to the failure of such      
condition to be satisfied (including any action or inaction by a Debtor or      
Reorganized Debtor). The failure of a Debtor or Reorganized Debtor to exercise  
any of the foregoing rights shall not be deemed a waiver of any other rights,   
and each such right shall be deemed an ongoing right that may be asserted at any
time.                                                                           

ARTICLE XI  

RETENTION OF JURISDICTION 

11.1    Under sections 105(a) and 1142 of the Bankruptcy Code, and    
notwithstanding entry of the Confirmation Order and occurrence of the Effective 
Date, the Bankruptcy Court shall retain exclusive jurisdiction over all matters 
arising out of, and related to, the Chapter 11 Case and the Plan to the fullest 
extent permitted by law, including, among other things, jurisdiction to:        

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            (a)   Allow, disallow, determine, liquidate, classify, estimate or
establish the priority or secured or unsecured status of any Claim or Interest  
not otherwise allowed under the Plan, including the resolution of any request   
for payment of any Administrative Claim and the resolution of any objections to 
the allowance or priority of Claims or Interests;                               

        (b)   Hear and determine all applications for compensation and
reimbursement of expenses of Professionals under the Plan or under sections 330,
331, 503(b), 1103 and 1129(a)(4) of the Bankruptcy Code; provided, however, that
from and after the Effective Date, the payment of the fees and expenses of the  
retained Professionals of the Reorganized Debtors shall be made in the ordinary 
course of business and shall not be subject to the approval of the Bankruptcy   
Court;                                                                          

             (c)   Hear and determine all matters with respect to the assumption
or rejection of any executory contract or unexpired lease to which a Debtor is a
party or with respect to which a Debtor may be liable, including, if necessary, 
the nature or amount of any required Cure or the liquidation or allowance of any
Claims arising therefrom;                                                       

           (d)   Effectuate performance of and payments under the provisions
of the Plan;                                                                    

     (e)   Hear and determine any and all adversary proceedings,
motions, applications, and contested or litigated matters arising out of, under,
or related to, the Chapter 11 Case;                                             

       (f)   Enter such orders as may be necessary or appropriate to
execute, implement, or consummate the provisions of the Plan and all contracts, 
instruments, releases, and other agreements or documents created in connection  
with the Plan, the Disclosure Statement or the Confirmation Order;              

          (g)   Hear and determine disputes arising in connection with the
interpretation, implementation, consummation, or enforcement of the Plan,       
including disputes arising under agreements, documents or instruments executed  
in connection with the Plan;                                                    

          (h)   Consider any modifications of the Plan, cure any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy Court,  
including, without limitation, the Confirmation Order;                          

            (i)   Issue injunctions, enter and implement other orders, or take
such other actions as may be necessary or appropriate to restrain interference  
by any entity with implementation, consummation, or enforcement of the Plan or  
the Confirmation Order;                                                         

      (j)   Enter and implement such orders as may be necessary or
appropriate if the Confirmation Order is for any reason reversed, stayed,       
revoked, modified, or vacated;                                                  

            (k)   Hear and determine any matters arising in connection with or
relating to the Plan, the Disclosure Statement, the Confirmation Order, or any  
contract, instrument, release, or other agreement or document created in        
connection with the Plan, the Disclosure Statement or the Confirmation Order;   

     (l)   Enforce all orders, judgments, injunctions, releases,
exculpations, indemnifications and rulings entered in connection with the       
Chapter 11 Case;                                                                

             (m)   Except as otherwise limited herein, recover all assets of the
Debtors and property of the Debtors' Estates, wherever located;                 

       (n)   Hear and determine matters concerning state, local, and
federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy  
Code;                                                                           

        (o)   Hear and determine all disputes involving the existence,
nature, or scope of the Debtors' discharge;                                     

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           (p)   Hear and determine such other matters as may be provided in
the Confirmation Order or as may be authorized under, or not inconsistent with, 
provisions of the Bankruptcy Code; and                                          

 (q)   Enter a final decree closing the Chapter 11 Case.

ARTICLE XII 

MISCELLANEOUS PROVISIONS  

12.1    Professional Fee Claims                                       

   All final requests for compensation or reimbursement of Professional Fees
pursuant to sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy Code  
for services rendered to the Creditors' Committee prior to the Effective Date   
and Substantial Contribution Claims under section 503(b)(4) of the Bankruptcy   
Code must be filed and served on the Reorganized Debtors and their counsel no   
later than 60 days after the Effective Date, unless otherwise ordered by the    
Bankruptcy Court. Objections to applications of such Professionals or other     
entities for compensation or reimbursement of expenses must be filed and served 
on the Reorganized Debtors and their counsel and the requesting Professional or 
other entity no later than sixty (60) days (or such longer period as may be     
allowed by order of the Bankruptcy Court) after the date on which the applicable
application for compensation or reimbursement was served.                       

12.2    Administrative Claims Bar Date                                

All requests for payment of an Administrative Claim (other than as set
forth in Sections 3.1 and 12.1 of this Plan) must be filed with the Bankruptcy  
Court and served on counsel for the Debtors and counsel for the Creditors'      
Committee no later than forty-five (45) days after the Effective Date. Unless   
the Debtors object to an Administrative Claim within forty-five (45) Business   
Days after receipt, such Administrative Claim shall be deemed allowed in the    
amount requested. In the event that the Debtors object to an Administrative     
Claim, the Bankruptcy Court shall determine the Allowed amount of such          
Administrative Claim. Notwithstanding the foregoing, no request for payment of  
an Administrative Claim need be filed with respect to an Administrative Claim   
which is paid or payable by a Debtor in the ordinary course of business.        

12.3    Payment Of Statutory Fees                                     

    All fees payable pursuant to Section 1930 of Title 28 of the United States
Code, as determined by the Bankruptcy Court at the Confirmation shall be paid on
or before the Effective Date.                                                   

12.4    Modifications and Amendments                                  

    The Debtors may alter, amend, or modify the Plan or any Plan Exhibit under
section 1127(a) of the Bankruptcy Code at any time prior to the Confirmation    
Date. After the Confirmation Date and prior to substantial consummation of the  
Plan, as defined in section 1101(2) of the Bankruptcy Code, the Debtors may,    
under section 1127(b) of the Bankruptcy Code, institute proceedings in the      
Bankruptcy Court to remedy any defect or omission or reconcile any              
inconsistencies in the Plan, the Disclosure Statement, or the Confirmation      
Order, and such matters as may be necessary to carry out the purposes and       
effects of the Plan and such proceedings do not materially adversely affect the 
treatment of holders of Claims under the Plan; provided, however, that prior    
notice of such proceedings shall be served in accordance with the Bankruptcy    
Rules or order of the Bankruptcy Court.                                         

12.5    Severability Of Plan Provisions                               

     If, prior to Confirmation, any term or provision of the Plan is held by the
Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy Court, at 
the request of any Debtor, shall have the power to alter and interpret such term
or provision to make it valid or enforceable to the maximum extent practicable, 
consistent with the original purpose of the term or provision held to be        
invalid, void or unenforceable, and such term or provision shall then be        
applicable as altered or interpreted. Notwithstanding any such holding,         
alteration or interpretation, the remainder of the terms and provisions of the  
Plan shall remain in full force and effect and shall in no way be affected,     
impaired or invalidated by such holding, alteration or interpretation. The      
Confirmation Order shall constitute a judicial                                  

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determination and shall provide that each term and provision of the Plan, as it 
may have been altered or interpreted in accordance with the foregoing, is valid 
and enforceable pursuant to its terms.                                          

12.6    Successors And Assigns                                        

    The rights, benefits and obligations of any entity named or referred to in
the Plan shall be binding on, and shall inure to the benefit of, any heir,      
executor, administrator, successor or assign of such entity.                    

12.7    Compromises and Settlements                                   

Pursuant to Fed. R. Bankr. P. 9019(a), the Debtors may compromise and 
settle various Claims against them and/or claims that they may have against     
other Persons. The Debtors expressly reserve the right (with Bankruptcy Court   
approval, following appropriate notice and opportunity for a hearing) to        
compromise and settle Claims against them and claims that they may have against 
other Persons up to and including the Effective Date.                           

12.8    Releases And Satisfaction Of Subordination Rights             

All Claims of the holders of the Lender Claims and the Old Note Claims
against the Debtors and all rights and claims between or among such holders     
relating in any manner whatsoever to any claimed subordination rights, shall be 
deemed satisfied by the distributions under, described in, contemplated by,     
and/or implemented in Section 3.3 of this Plan. Distributions under, described  
in, contemplated by, and/or implemented by this Plan to the various Classes of  
Claims hereunder shall not be subject to levy, garnishment, attachment, or like 
legal process by any holder of a Claim, including, but not limited to, holders  
of Lender Claims and Old Note Claims, by reason of any claimed subordination    
rights or otherwise, so that each holder of a Claim shall have and receive the  
benefit of the distributions in the manner set forth in the Plan.               

12.9    Discharge Of The Debtors                                      

          (a)   Except as otherwise provided herein or in the Confirmation
Order, all consideration distributed under the Plan shall be in exchange for,   
and in complete satisfaction, settlement, discharge, and release of, all Claims 
of any nature whatsoever against the Debtors or any of their assets or          
properties, and, and regardless of whether any property shall have been         
distributed or retained pursuant to the Plan on account of such Claims, upon the
Effective Date, the Debtors, and each of them, shall (i) be deemed discharged   
and released under section 1141(d)(1)(A) of the Bankruptcy Code from any and all
Claims, including, but not limited to, demands and liabilities that arose before
the Confirmation Date, and all debts of the kind specified in sections 502(g),  
502(h) or 502(i) of the Bankruptcy Code, whether or not (a) a Proof of Claim    
based upon such debt is filed or deemed filed under section 501 of the          
Bankruptcy Code, (b) a Claim based upon such debt is Allowed under section 502  
of the Bankruptcy Code, or (c) the holder of a Claim based upon such debt       
accepted the Plan, and (ii) terminate all ICG Interests.                        

           (b)   As of the Confirmation Date, except as provided in the Plan
or the Confirmation Order, all entities shall be precluded from asserting       
against the Debtors or the Reorganized Debtors, any other or further claims,    
debts, rights, causes of action, liabilities or equity interests relating to the
Debtors based upon any act, omission, transaction or other activity of any      
nature that occurred prior to the Confirmation Date. In accordance with the     
foregoing, except as provided in the Plan or the Confirmation Order, the        
Confirmation Order shall be a judicial determination of discharge of all such   
Claims and other debts and liabilities against the Debtors and termination of   
all ICG Interests, pursuant to sections 524 and 1141 of the Bankruptcy Code, and
such discharge shall void any judgment obtained against the Debtors at any time,
to the extent that such judgment relates to a discharged Claim or terminated    
Interest.                                                                       

12.10   Injunction                                                    

            (a)   Except as provided in the Plan or the Confirmation Order, as
of the Confirmation Date, all entities that have held, currently hold or may    
hold a Claim or other debt or liability that is discharged or an Interest or    
other right of an equity security holder that is terminated pursuant to the     
terms of the Plan are permanently enjoined from taking any of the following     
actions against the Debtors, Reorganized Debtors or their property on account of
any such discharged Claims, debts or liabilities or terminated Interests or     
rights: (i) commencing or continuing, in any                                    

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manner or in any place, any action or other proceeding; (ii) enforcing,         
attaching, collecting or recovering in any manner any judgment, award, decree or
order; (iii) creating, perfecting or enforcing any lien or encumbrance; (iv)    
asserting a setoff, right of subrogation or recoupment of any kind against any  
debt, liability or obligation due to the Debtors; and (v) commencing or         
continuing any action, in any manner, in any place that does not comply with or 
is inconsistent with the provisions of the Plan.                                

      (b)   As of the Effective Date, all entities that have held,
currently hold or may hold a Claim, demand, debt, right, cause of action or     
liability that is released pursuant to Section 5.12 or 12.11 of this Plan are   
permanently enjoined from taking any of the following actions on account of such
released Claims, obligations, suits, judgments, damages, demands, debts, rights,
causes of action or liabilities: (i) commencing or continuing in any manner any 
action or other proceeding; (ii) enforcing, attaching, collecting or recovering 
in any manner any judgment, award, decree or order; (iii) creating, perfecting  
or enforcing any lien or encumbrance: (iv) asserting a setoff, right of         
subrogation or recoupment of any kind against any debt, liability or obligation 
due to any released entity; and (v) commencing or continuing any action, in any 
manner, in any place that does not comply with or is inconsistent with the      
provisions of the Plan.                                                         

           (c)   By accepting distribution pursuant to the Plan, each holder
of an Allowed Claim or Allowed Interest receiving distributions pursuant to the 
Plan will be deemed to have specifically consented to the injunctions set forth 
in this Section 12.10.                                                          

12.11   Exculpation And Limitation Of Liability                       

            (a)   None of the Debtors, the Reorganized Debtors, the Creditors'
Committee, nor any of their respective present or former members, officers,     
directors, employees, advisors, or attorneys shall have or incur any liability  
to any holder of a Claim or an Interest, or any other party in interest, or any 
of their respective agents, employees, representatives, financial advisors,     
attorneys, or affiliates, or any of their successors or assigns, for any act or 
omission in connection with, relating to, or arising out of, the Chapter 11     
Case, formulating, negotiating or implementing the Plan, the solicitation of    
acceptances of the Plan, the pursuit of confirmation of the Plan, the           
confirmation of the Plan, the consummation of the Plan, or the administration of
the Plan or the property to be distributed under the Plan, except for their     
willful misconduct, and in all respects shall be entitled to reasonably rely    
upon the advice of counsel with respect to their duties and responsibilities    
under the Plan.                                                                 

           (b)   Notwithstanding any other provision of this Plan, no holder
of a Claim or Interest, no other party in interest, none of their respective    
agents, employees, representatives, financial advisors, attorneys, or           
affiliates, and no successors or assigns of the foregoing, shall have any right 
of action against any Debtor or Reorganized Debtor, nor any statutory committee,
nor any of their respective present or former members, officers, directors,     
employees, advisors or attorneys, for any act or omission in connection with,   
relating to, or arising out of, the Chapter 11 Case, formulating, negotiating or
implementing the Plan, solicitation of acceptances of the Plan, the pursuit of  
confirmation of the Plan, the consummation of the Plan, the confirmation of the 
Plan, or the administration of the Plan or the property to be distributed under 
the Plan, except for their willful misconduct.                                  

      (c)   Reorganized ICG shall indemnify each Person exculpated
pursuant to this Section 12.11 against, hold each such Person harmless from, and
reimburse each such Person for, any and all losses, costs, expenses (including  
attorneys' fees and expenses), liabilities and damages sustained by such Person 
arising from any liability described in this Section 12.11.                     

           (d)   The foregoing exculpation and limitation on liability shall
not, however, limit, abridge, or otherwise affect the rights, if any, of the    
Reorganized Debtors to enforce, sue on, settle, or compromise the Litigation    
Claims retained pursuant to Sections 5.8 and 5.9 of this Plan.                  

12.12   Binding Effect                                                

     The Plan shall be binding upon and inure to the benefit of the Debtors, all
present and former holders of Claims against and Interests in the Debtors, their
respective successors and assigns, including, but not limited to, the           
Reorganized Debtors, and all other parties-in-interest in this Chapter 11 Case. 

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12.13   Revocation, Withdrawal, Or Non-Consummation                   

  The Debtors reserve the right to revoke or withdraw the Plan at any time
prior to the Confirmation Date and to file subsequent plans of reorganization.  
If the Debtors revoke or withdraw the Plan, or if Confirmation or Consummation  
does not occur, then (a) the Plan shall be null and void in all respects, (b)   
any settlement or compromise embodied in the Plan (including the fixing or      
limiting to an amount certain any Claim or Class of Claims), assumption or      
rejection of executory contracts or leases effected by the Plan, and any        
document or agreement executed pursuant to the Plan shall be deemed null and    
void, and (c) nothing contained in the Plan, and no acts taken in preparation   
for consummation of the Plan, shall (x) constitute or be deemed to constitute a 
waiver or release of any Claims by or against, or any Interests in, any Debtor  
or any other Person, (y) prejudice in any manner the rights of any Debtor or any
Person in any further proceedings involving a Debtor, or (z) constitute an      
admission of any sort by any Debtor or any other Person.                        

12.14   Plan Exhibits                                                 

   Any and all Plan Exhibits, or other lists or schedules not filed with the
Plan shall be filed with the Clerk of the Bankruptcy Court at least five (5)    
Business Days prior to date of the commencement of the Confirmation Hearing.    
Upon such filing, such documents may be inspected in the office of the Clerk of 
the Bankruptcy Court during normal court hours. Holders of Claims or Interests  
may obtain a copy of any such document upon written request to the Debtors in   
accordance with Section 12.15 of the Plan.                                      

12.15   Notices                                                       

     Any notice, request, or demand required or permitted to be made or provided
to or upon a Debtor or Reorganized Debtor under the Plan shall be (a) in        
writing, (b) served by (i) certified mail, return receipt requested, (ii) hand  
delivery, (iii) overnight delivery service, (iv) first class mail, or (v)       
facsimile transmission, and (b) deemed to have been duly given or made when     
actually delivered or, in the case of notice by facsimile transmission, when    
received and telephonically confirmed, addressed as follows:                    

ICG COMMUNICATIONS, INC., et al.                                      
-- ---            
161 Inverness Drive West                                              
Englewood, Colorado  80112                                            
Att'n: Bernard L. Zuroff, Esq.                                        
Telephone:   (303) 414-5872                                           
Facsimile:   (304) 414-8869                                           

with a copy to:                                                       

SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)                       
333 West Wacker Drive                                                 
Chicago, Illinois  60606-1285                                         
Att'n:   David S. Kurtz, Esq.                                         
Timothy R. Pohl, Esq.                             
Rena M. Samole, Esq.                              
Telephone:   (312) 407-0700                                           
Facsimile:   (312) 407-0411                                           

with a copy to:                                                       

WACHTELL, LIPTON, ROSEN & KATZ                                                  
51 West 52/nd/ Street                                                           
New York, NY 10019                                                              
Attn: Chaim J. Fortgang, Esq.                                                   

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Richard Mason, Esq.                                     
Telephone:  (212) 403-1000                                            
Facsimile:  (212) 403-2000                                            

SHEARMAN & STERLING                                                   
599 Lexington Avenue                                                  
New York, NY 10002                                                    
Attn:  Mark J. Shapiro, Esq.                                          
Andrew Tenzer, Esq.                                     
Telephone: (212) 848-8195                                             
Facsimile: (212) 848-7179                                             

12.16   Indemnification and Related Matters                           

(a)  Third-Party Indemnification                                      

    Indemnification Obligations owed to any present or former professionals or
advisors of the Debtors arising out of acts that occurred prior to the Petition 
Date, including, without limitation, accountants, auditors, financial           
consultants, underwriters, or attorneys, shall be deemed to be, and shall be    
treated as though they are, executory contracts that are rejected pursuant to   
section 365 of the Bankruptcy Code under this Plan.                             

(b)  Indemnification of Debtors' Directors, Officers and Employees    

  Reorganized ICG shall provide standard and customary indemnification for
all officers and directors (as of the Petition Date and thereafter) for all     
actions or events occurring after the Petition Date. Indemnification Obligations
to present and former officers and directors for actions or events occurring    
prior to the Petition Date shall be limited to director and officer liability   
insurance coverage; provided however that all Indemnification Obligations to    
-------- -------                        
members of the Special Committee, including for actions or events occurring     
prior to the Petition Date, shall be deemed to be, and shall be treated as      
though they are, executory contracts that are assumed pursuant to section 365 of
the Bankruptcy Code. In addition, Reorganized ICG shall indemnify present and   
former officers and directors for all legal fees and expenses and shall advance 
all such fees and expenses, as well as any insurance deductibles (if            
applicable), related to any claims or lawsuits for any actions or events        
occurring prior to the Petition Date. Reorganized ICG shall also reimburse the  
Special Committee and its members for all legal fees and expenses incurred by   
them in connection with the Chapter 11 Cases and the Plan.                      

12.17   Prepayment                                                    

    Except as otherwise provided in this Plan, any ancillary documents entered
into in connection therewith, or the Confirmation Order, the Debtors shall have 
the right to prepay, without penalty, all or any portion of an Allowed Claim at 
any time; provided, however, that any such prepayment shall not be violative of,
or otherwise prejudice, the relative priorities and parities among the classes  
of Claims.                                                                      

  12.18   Dissolution of the Creditors' Committee and Establishment of the
Claims Resolution Committee                           

(a)   Creditors' Committee                            

On the Effective Date, the Creditors' Committee will dissolve and its 
members will be released and discharged from all duties and obligations arising 
from or related to the Chapter 11 Cases. The Professionals retained by the      
Creditors' Committee and the members thereof will not be entitled to            
compensation or reimbursement of expenses for any services rendered after the   
Effective Date.                                                                 

(b)   Claims Resolution Committee                     

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(i)   Function and Composition of the Committee       

     On the Effective Date, the Claims Resolution Committee will be established.
Its sole functions will be: (A) in connection with applications for allowance of
compensation and reimbursement of expenses for Professionals filed before or    
after the Effective Date, (B) to monitor the Reorganized Debtors' progress in   
(x) reconciling and resolving Disputed Claims and (y) making distributions on   
account of such Claims once resolved and (C) to review and assert objections to 
the reasonableness of settlements and compromises of such Claims, pursuant to   
Section 9.1. The Claims Resolution Committee will consist of three holders of   
Class 5 Claims who sit on the Creditors' Committee as of the Effective Date or  
other holders selected by the Creditors' Committee.                             

(ii)  Committee Procedures                            

  The Claims Resolution Committee will adopt by-laws that will control its
functions. These by-laws, unless modified by the Claims Resolution Committee,   
will provide the following: (A) a majority of the Claims Resolution Committee   
will constitute a quorum, (B) one member of the Claims Resolution Committee will
be designated by the majority of its members as its chairperson, (C) meetings of
the Claims Resolution Committee will be called by its chairperson on such notice
and in such manner as its chairperson may deem advisable and (D) the Claims     
Resolution Committee will function by decisions made by a majority of its       
members in attendance at any meeting.                                           

(iii) Employment of Professionals by the Committee and
Reimbursement of Committee Members                                              

 The Claims Resolution Committee will be authorized to retain and employ
counsel to assist with the claims reconciliation process. The role of the Claims
Resolution Committee's professionals will be strictly limited to assisting the  
committee in its functions as set forth herein. The Reorganized Debtors will pay
the actual, necessary, reasonable and documented fees and expenses of the       
professionals retained by the Claims Resolution Committee, as well as the       
actual, necessary, reasonable and documented expenses incurred by each committee
member in the performance of its duties upon the monthly submission of bills to 
the Reorganized Debtors and the members of the Claims Resolution Committee. If  
no objection to payment is received within 30 days following delivery of the    
bill, the bill will be paid by the Reorganized Debtors. Other than as specified 
in the preceding sentence, the members of the Claims Resolution Committee will  
serve without compensation. If there is any unresolved dispute between the      
Reorganized Debtors and the Claims Resolution Committee, its professionals or a 
member thereof as to any fees or expenses, such dispute will be submitted to the
Bankruptcy Court for resolution. The undisputed portion of each bill will be    
paid on the 31/st/ day after delivery.                                          

(iv)  Dissolution of the Committee                    

 Subject to further order of the Bankruptcy Court, the Claims Resolution
Committee will dissolve on the date that an officer of Reorganized ICG files and
serves on counsel to the Claims Resolution Committee by overnight delivery      
service or facsimile transmission a certification that the aggregate Face Amount
of the remaining Disputed Claims in Class 5 is equal to or less than $25        
million, or on the date that any objection filed to such certification is       
resolved by the Bankruptcy Court such that the aggregate Face Amount of the     
remaining Disputed Claims in Class 5 is equal to or less than $25 million. The  
Claims Resolution Committee may file and serve on the Reorganized Debtors an    
objection to the certification within ten (10) days of receipt thereof, with the
issue of the aggregate Face Amount of remaining Disputed Claims to be determined
by the Bankruptcy Court. The professionals retained by the Claims Resolution    
Committee and the members of the committee will not be entitled to compensation 
or reimbursement of expenses for any services rendered after the date of        
dissolution of the committee. Notwithstanding the foregoing, the Claims         
Resolution Committee will not dissolve until orders regarding final requests for
compensation by professionals become Final Orders and until the Confirmation    
Order becomes a Final Order.                                                    

30  

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12.19   Term Of Injunctions Or Stays                                  

Unless otherwise provided herein or in the Confirmation Order, all    
injunctions or stays provided for in the Chapter 11 Case under sections 105 or  
362 of the Bankruptcy Code or otherwise, and extant on the Confirmation Date    
(excluding any injunctions or stays contained in this Plan or the Confirmation  
Order), shall remain in full force and effect until the Effective Date.         

Dated: December 19, 2001                                                        

ICG Communications, Inc.
                            (for itself and on behalf of the Subsidiary Debtors)

  By:  /s/ Randall E. Curran
       ---------------------
   Name:     Randall E. Curran
                Title:    Chief Executive Officer of ICG
                Communications, Inc.

Skadden, Arps, Slate, Meagher & Flom (Illinois)                                 

David S. Kurtz                                                                  
Timothy R. Pohl                                                                 
Rena M. Samole                                                                  
333 W. Wacker Drive                                                             
Chicago, Illinois 60606-1285                                                    
(312) 407-0700,                                                                 

Skadden, Arps, Slate, Meagher & Flom LLP                                        

/s/ Gregg M. Galardi                                                            
--------------------                                                            
Gregg M. Galardi                                                                
One Rodney Square                                                               
P.O. Box 636                                                                    
Wilmington, Delaware 19899-0636                                                 
(302) 651-3000                                                                  

Attorneys for ICG Communications, Inc., et al.                                  
      -- ---

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APPENDIX B-1  

EXISTING ORGANIZATION STRUCTURE OF DEBTORS  
------------------------------------------  

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APPENDIX B-2  

CHART DEPICTING ANTICIPATED CORPORATE STRUCTURE CHANGES 
------------------------------------------------------- 

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APPENDIX B-3  

ORGANIZATION STRUCTURE OF REORGANIZED DEBTORS 
--------------------------------------------- 

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APPENDIX C  

ELECTION FORM FOR RIGHTS OFFERING 
--------------------------------- 

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APPENDIX D  

LIQUIDATION ANALYSIS  
--------------------  

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BEST INTEREST TEST  

Pursuant to section 1129(a)(7)(A)(ii) of the Bankruptcy Code (the "Best Interest
Test"), notwithstanding acceptance of the Plan by each impaired Class, to       
confirm the Plan the Bankruptcy Court must determine that the Plan is in the    
best interests of each holder of a Claim of Interest who is a member of any     
impaired Class and who has not voted to accept the Plan. Accordingly, if an     
impaired Class does not vote unanimously to accept the Plan, the Best Interest  
Test requires that the Bankruptcy Court find that the Plan provides to each     
dissenting member of such impaired Class a recovery on account of the Class     
member's Claim or Interest that has a value, as of the Effective date, at least 
equal to the value of the distribution that such class member would receive if  
the Debtors were liquidated under chapter 7 of the Bankruptcy Code on such date.

LIQUIDATION ANALYSIS  

The following is an analysis of the results of a hypothetical liquidation of the
Debtors under chapter 7 of the Bankruptcy Code.                                 

The Debtors believe that under the Plan, Holders of Impaired Claims and Impaired
Interests will receive property with a value equal to or in excess of the value 
such Holder would receive in a liquidation of the Debtors under chapter 7 of the
Bankruptcy Code.                                                                

To estimate the likely returns to Holders of Claims and Interests in a chapter 7
liquidation, the Debtors determined the amount of liquidation proceeds that     
would be available for distribution and the allocation of such proceeds among   
the Classes of Claims and Interests based on their relative priority. In        
conducting this analysis, the Debtors were assisted by Zolfo Cooper, one of     
their restructuring advisors in this matter. As further described below, to     
estimate the liquidation proceeds, the Debtors assumed that ICG and all         
subsidiaries are treated as a substantively consolidated entity during a nine-  
month wind-down period in which the assets of ICG and its subsidiaries are sold 
in a straight liquidation. Liquidation proceeds available for distribution to   
Holders of Claims would consist of the net proceeds from the disposition of the 
assets, augmented by other cash held by the Debtors.                            

The relative priority of distribution of liquidation proceeds with respect to   
any Claim or Interest depends on (i) its status as secured, priority unsecured, 
or non-priority unsecured and (ii) its relative subordination.                  

In general, liquidation proceeds would be allocated in the following priority   
(i) first, to the Claims of secured creditors to the extent of the value of     
their collateral; (ii) second, to the costs, fees and expenses of the           
liquidation, as well as other administrative expenses of the Debtors' chapter 7 
case, including tax liabilities; (iii) third, to the unpaid Administrative      
Claims of the chapter 11 case; (iv) fourth, to Priority Tax Claims and other    
Claims entitled to priority in payment under the Bankruptcy Code; and (v) fifth,
to unsecured Claims. The Debtors' liquidation costs in Chapter 7 would include  
the compensation of a bankruptcy trustee, as well as compensation of counsel and
of other professionals retained by such trustee, asset disposition expenses,    
applicable taxes, litigation costs, claims arising from the operation of the    
Debtors during the pendency of the chapter 7 case and all unpaid Administrative 
Claims incurred by                                                              

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the Debtors during the Chapter 11 case that are Allowed Claims in the chapter 7 
case. The liquidation itself would trigger certain Priority Claims, such as     
Claims for severance pay to certain employees.                                  

As set forth in the schedule below, the Debtors' management estimates that the  
Debtors' gross liquidation proceeds would range from approximately $208.2MM to  
$294.7MM. Based on the priorities outlined above, the Debtors believe that      
remaining proceeds, if any, available as recovery to Impaired Claims would be   
significantly less than those under the Plan.                                   

The following chapter 7 liquidation analysis is provided solely to discuss the  
effects of a hypothetical chapter 7 liquidation of the Debtors. This liquidation
analysis is based on numerous estimates and assumptions that, although developed
and considered reasonable by the Debtors' management and its financial advisors,
are inherently subject to significant economic and competitive uncertainties and
contingencies beyond the control of the Debtors. This liquidation analysis is   
also based upon assumptions with regard to liquidation decisions that are       
subject to change. Accordingly, there can be no assurance that the values       
reflected in this liquidation analysis would be realized if the Debtors were, in
fact, to undergo such a liquidation.                                            

I.    SIGNIFICANT UNCERTAINTIES                                                 
-------------------------                                           

In addition to the General and Principal Assumptions that are set forth on the  
following pages, there are significant areas of uncertainty that exist with     
respect to this liquidation analysis.                                           

(1) The liquidation analysis assumes that the liquidation of the Debtors'   
Estates would commence on January 1, 2002 and would be substantially
     complete within a nine-month period. The wind-down costs during the nine-
   month liquidation period have been estimated by the Debtors' management
      and any deviation from this time frame could have a material impact on the
      wind-down costs, Administrative Claims, proceeds from asset sales, and the
ultimate recovery to the creditors of the Debtors' Estates.         

  (2) If the implementation of the liquidation plan were to be delayed, there is
     a possibility that the Debtors would sustain significant operating losses
 during the delay period, thus adversely impacting the net liquidation
value of the Estates.                                               

 (3) In any liquidation there is a general risk of unanticipated events, which
could have a significant impact on the projected cash receipts and  
disbursements. These events include changes in the general economic 
    condition, changes in consumer preferences, obsolescence, changes in the
    market value of the Debtors' assets and problems with current and former
employees.                                                          

In addition to the specific assumptions described in the footnotes to the table 
below, the following general assumptions were used in formulating the           
liquidation analysis.                                                           

II.   GENERAL ASSUMPTIONS                                                       
-------------------                                                 

(1) Substantive Consolidation - For purposes of both the Plan and the       
   hypothetical chapter 7 liquidation analysis, it is assumed that each of
      the Debtors are combined into a single entity and treated as substantively
consolidated.                                                       

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(2) Nature and Timing of the Liquidation Process - Under section 704 of the 
      Bankruptcy Code, a chapter 7 trustee must, among other duties, collect and
    convert the property of the debtor's estate to cash and close the estate
    as expeditiously as is compatible with the best interests of the parties
    in interest. Solely for purposes of preparing this liquidation analysis,
it is assumed that the Debtors would voluntarily convert the pending
chapter 11 case to a chapter 7 liquidation on January 1, 2002. The  
  Debtors' assets are assumed to be sold during the following nine-month
    period. Included in this period is a 90 day time allotment for notifying
      commercial dial tone customers of services terminations (certain dial tone
  telecom services are subject to regulatory requirements of termination
 notice). Management believes that it is unlikely that the actual sale
      periods would be shorter than those assumed, and there can be no assurance
      that the actual sale period would not be longer than assumed. It is likely
    that if the sale period was extended, sale proceeds would be diminished.

(3) Estimated Liquidation Proceeds - All telecom equipment and fiber are    
     assumed to be sold in a straight liquidation to the highest bidder. Zolfo
     Cooper assisted the Debtors in estimating the potential proceeds from the
      disposition of assets. The following list identifies factors considered by
 the Debtors and Zolfo Cooper in estimating the proceeds that might be
received from the liquidation sales.                                

. The historical cost of the assets                                 
    . Asset location and local market demand (particularly for fiber assets)
. Previously issued third-party appraisals, and subsequent follow up
     discussions related to further deterioration in the telecom equipment
values since the original appraisals                            
. Recently transacted telecom equipment sales                       
. Managements' experience and expertise in asset resale values      
   . Analysis of liabilities and obligations relating to particular assets
    . Current industry trends including general availability of used telecom
  equipment, the number of companies in the industry selling telecom
     equipment, and the current technology being used in telecom equipment
build outs                                                      
      . A "distress sale value." A distress sale value differs from the price at
  which assets would be sold to a willing buyer by a willing seller,
     assuming neither is under any compulsion to buy or sell, and assuming
both are informed of the relevant facts                         
. The inability to convey software rights with certain equipment    

(4) Certain Tax Matters - Management believes that it is unlikely that any  
  taxable gains would be triggered through a liquidation of the Debtors'
    assets. However, if for some reason there were to be a taxable gain from
the liquidation of the Debtors' assets, any realized gains would be 
reduced to zero by the Debtors' net operating loss carryforward.    

  (5) Additional Liabilities and Reserves - The Debtors believe that in addition
  to the expenses that would be incurred in a Chapter 11 reorganization,
     there would be certain actual and contingent liabilities and expenses for
which provision would be required in a Chapter 7 liquidation before 
distributions could be made to creditors, including: (a) certain    
   liabilities that are not dischargeable pursuant to the Bankruptcy Code;
   (b) Administrative Claims including damages from rejected post petition
   contracts, the fees of a trustee and of counsel and other professionals

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     (including financial advisors and accountants), retention bonuses paid to
employees required to effectuate the wind down process and other    
liabilities (including retirement, vacation pay, and other employee-
   related administrative costs and liabilities) that would be funded from
     continuing operations if the Debtors were reorganized as a going concern;
   and (c) certain administrative costs. Management believes that there is
      significant uncertainty as to the reliability of the Debtors' estimates of
the amounts related to the foregoing that have been assumed in the  
liquidation analysis.                                               

(6) Distributions: Absolute Priority - Under a chapter 7 liquidation, all   
secured claims are required to be satisfied from the proceeds of the
collateral securing such claims before any such proceeds would be   
  distributed to any other creditors. The following analysis assumes the
      application of the rule of absolute priority of distributions with respect
to the remaining proceeds of the Debtors. Under that rule, no junior
     creditor receives any distribution until all senior creditors are paid in
      full. To the extent that proceeds remain after satisfaction of all secured
claims, the proceeds would first be distributed to the Holders of   
Administrative Claims, then to Priority Claims and finally to the   
  Unsecured Claims. Based on the liquidation assumptions of the Debtors'
   management, the proceeds generated from the liquidation of the Debtors'
     assets would not likely be sufficient to fully pay Priority Claims and no
proceeds would likely be available for Unsecured Claims.            

(7) Conclusion - The Debtors believe that a chapter 7 liquidation of the    
Debtors would result in a substantial diminution in the value to be 
 realized by the Holders of Unsecured Claims. The Holders of Unsecured
      Claims are expected to receive recoveries under the Plan in excess of that
  realized in a chapter 7 liquidation. Consequently, the Debtors believe
that the Plan, which provides for the continuation of the Debtors'  
businesses, will provide a substantially greater ultimate return to 
Holders of Unsecured Claims than would a chapter 7 liquidation.     

                                                        [Enlarge/Download Table]

                                                                      Low Value   High Value 
                                         Estimated   Low      High     Recovery    Recovery  
                                   Note    Claim    Value    Value        %           %      
                                 ----------------------------------------------------------- 
                                                                                             
Proceeds:                                                                                    
Gross liquidation proceeds          A                $208.2   $294.7                         

Distributions:                                                                               
Secured senior credit facility      B     $   84.6   $ 84.6   $ 84.6      100.0%       100.0%
 claim                                                                                       

Trustee fees, professional                                                                   
 fees, wind-down costs, and                                               100.0%             
 other chapter 7 Administrative     C     $   87.7     87.7     87.7                   100.0%
 costs                                                                                       

Chapter 11 Administrative           D     $   83.2     35.9     83.2       43.2%       100.0%
 claim                                                                                       

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                                                                [Download Table]
                                                              
Priority claims      E  $   19.7       -    19.7  0.0%  100.0%

Unsecured claims     F  $2,643.1       -    19.5  0.0%    0.7%

Total Distributions               $208.2  $294.7              

Notes:                                                                
-----                                                                 
(A)  Includes assumed gross proceeds from sale in liquidation of the  
        Debtors' assets and existing cash balances (high/low) as follows (in
millions):                                                  

                      Low Value   High Value
                    ------------  ----------
Cash and cash equivalents        $136.5       $136.5        
Accounts receivable                21.2         37.8        
Telecom equipment                  24.2         43.1        
Fiber assets                                                
Owned                            10.0         50.0      
IRUs fully paid                   2.0          5.0      
Other assets                       14.3         22.3        
                    -----------   ----------
Gross liquidation proceeds       $208.2       $294.7        
                    ===========   ==========

        Cash is assumed recoverable at 100% in both high and low liquidation
scenarios.                                                  

         The values of accounts receivable considered the aging of the current
       balances, the specific customer base and historical payment trends.
The recovery percentages of accounts receivable ranged from 
approximately 50% to 90% of net outstanding balances.       

         The recovery values of telecom equipment considered the market demand
     and condition of the assets along with available software rights.

       The recovery percentages of fiber assets consider the condition and
location of the fiber and the ability to transfer IRUs.     

       Other assets consist of furniture and fixtures and assets currently
          held for sale.  Recovery percentages of other assets range from 64% to
100% of carrying values.                                    

     (B)  Senior Credit Facility claim of $84.6MM secured by all Services assets
as of the filing date.                                      

    (C)  Estimated Chapter 7 administrative and wind-down expenses of $87.7MM.
          The estimated wind-down expense is net of projected cash receipts from
          operations and interest income.  A summary of administrative and wind-
down expenses is as follows (in millions):                  

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                                                        [Enlarge/Download Table]
                                                                                      
Costs, net of revenues, of providing dial tone services during a three month     $32.5
 shut down period required for regulatory purposes                                    

Administrative claims                                                                 

    Severance and vacation                                                        20.9

    Trustee fees                                                                   7.5

    Professional fees                                                              1.6

    Property taxes                                                                 7.5

    Termination penalties from rejection of post petition agreements              10.4

    Wind down expenses                                                                

    Payroll and benefits                                                           4.9

    Retention bonuses                                                              1.2

    Other expenses, net of interest income                                         1.2
                                                                              --------
Total                                                                            $87.7
                                                                              ========

          Operating expenses in excess of revenues related to dial tone services
        are expected to be incurred during the shut down period required for
          regulatory purposes.   Projected costs are higher than revenues due to
     the cost of the network infrastructure required to be in place to
     support dial tone services. All other services, including dial up
          services and point to point broadband, will be terminated immediately.

   Severance and vacation costs are limited to current contractual
obligations to employees.                                   

       Trustee fees approximate 3.0% of the net proceeds to be realized in
the liquidation of the assets.                              

Property taxes are the estimate of obligations for 2002.    

    Termination penalties from rejection of post petition agreements
       reflect $10.4MM from the lease on the headquarters building entered
into in June 2001.                                          

   Wind down expenses consists primarily of employee related costs
    including stay bonuses for personnel necessary for the wind down
process.                                                    

   (D)  Estimated Administrative Claim expenses incurred during the pendency
of the chapter 11 case.                                     

(E)  Estimated claims subject to priority payment under the Bankruptcy
Code.                                                       

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(F)  Includes Unsecured Claims estimated in the Plan and estimated    
incremental deficiency claims incurred with the hypothetical
conversion to a chapter 7 liquidation.                      

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APPENDIX E

PRO FORMA FINANCIAL PROJECTIONS 
------------------------------- 

1 

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Consolidated Pro Forma Balance Sheets Giving Effect to the Plan of
Reorganization

     The following Consolidated Pro Forma Balance Sheets as of December 31, 2001
reflects the effects of certain transactions that will occur at the consummation
of the Plan of Reorganization ("the Plan").  For purposes of the following      
Consolidated Pro Forma Balance Sheets, the assumed Effective Date of the Plan is
December 31, 2001.  Other significant assumptions on which the pro forma        
adjustments are based are set forth in the notes to the Consolidated Pro Forma  
Balance Sheets.                                                                 

THE PRO FORMA BALANCE SHEETS SET FORTH IN THIS SECTION ILLUSTRATE THE 
EFFECT ON THE DEBTORS' BALANCE SHEETS UPON CONSUMMATION OF THE PLAN.  THESE     
BALANCE SHEETS, BOTH PRE-PETITION AND POST-PETITION, HAVE NOT BEEN PREPARED IN  
CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN ORDER TO MORE       
CLEARLY ILLUSTRATE THE REDUCTION IN THE DEBTORS' LIABILITIES PURSUANT TO THE    
PLAN AND RESTRUCTURING OF THE CAPITAL OF THE DEBTOR.                            

Pursuant to the guidance provided by SOP 90-7, "Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code", the Company will adopt   
"fresh start" accounting upon emerging from bankruptcy.  Under fresh start      
accounting, the reorganization value of the entity (generally representing its  
fair value) is allocated to the entity's assets in conformity with SFAS 141,    
"Business Combinations".                                                        

DrKW has provided a range of the value of Reorganized ICG of $350MM to
$500MM.  For the purpose of the following Consolidated Pro Forma Balance Sheets,
a reorganization value of $375 million has been assigned and allocated to the   
post-bankruptcy assets and liabilities in accordance with SFAS 141.  This       
estimated reorganization value, as well as its allocation to the specific assets
and liabilities may be significantly different from the final amounts that will 
be determined upon the Debtors' emergence from bankruptcy.                      

2 

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ICG Communications, Inc.  
Consolidated Pro Forma Balance Sheets   
As of December 31, 2001 (unaudited)   
(in thousands)  

                                                        [Enlarge/Download Table]

                                                       Pro Forma Adjustments to Record Confirmation of                  
                                                                          the Plan                                      
                                                     ---------------------------------------------------                
                                     Projected Pre-                                                          Pro Forma  
                                     Confirmation    Settlement             Debt         Fresh Start        Reorganized 
                                     Balance Sheet   of Claims            Discharge      Accounting        Balance Sheet
                                     -------------   ----------           ---------      -----------       -------------
                                                                                                                        
Assets                                                                                                                  
  Current assets:                                                                                                       
    Cash and short-term investments  $     134,802   $   (7,765) (1)      $       -      $        -        $      93,758
                                                        (19,279) (2)                                                    
                                                        (12,500) (3)                                                    
                                                         (1,500) (5)                                                    
    Receivables, net                        48,283                                                                48,283
    Prepaid expenses and inventory           8,753                                                                 8,753
                                     -------------   ----------           ---------      -----------       -------------
       Current assets                      191,838      (41,044)                  -                -             150,794
  Property and equipment, net              574,180      (10,000) (3)                        (210,407) (7)        353,773
  Other assets                              19,019        4,710  (1)                          (3,209) (7)         20,520
                                     -------------   ----------           ---------      -----------       -------------
Total Assets                         $     785,037   $  (46,334)          $       -      $  (213,616)      $     525,087
                                     =============   ==========           =========      ===========       =============

See Notes to Consolidated Pro Forma Balance Sheets                              

3 

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ICG Communications, Inc.  
Consolidated Pro Forma Balance Sheets 
As of December 31, 2001 (unaudited), continued  
(in thousands)  

                                                        [Enlarge/Download Table]

                                                                         Pro Forma Adjustments to Record Confirmation    
                                                                                          of the Plan                    
                                                                      -------------------------------------------------- 
                                                      Projected Pre-                                                     
                                                      Confirmation    Settlement            Debt         Fresh Start     
                                                      Balance Sheet   of Claims          Discharge       Accounting      
                                                      -------------   ----------        -----------      -----------     
                                                                                                                         
Liabilities and Stockholders' Equity (Deficit)                                                                           
   Current liabilities:                                                                                                  
       Accounts payable                               $      32,420   $        -        $         -      $         -     
       Accrued liabilities                                   35,329       (2,220) (1)                                    
                                                                          14,332  (2)                                    
       Deferred revenue                                      25,724                                                      
                                                      -------------   ----------        -----------      -----------     
         Current liabilities                                 93,473       12,112                  -                -     
   Long-term liabilities:                                                                                                
       Term loan                                             84,574                                                      
       Deferred revenue                                     138,511                                          (94,009) (7)
       Capital lease obligation                              50,708       54,899  (1)                                    
       Other debt                                             1,541        4,848  (2)                                    
                                                                          17,000  (3)                                    
                                                      -------------   ----------        -----------      -----------     
         Long-term liabilities                              275,334       76,747                  -          (94,009)    
   Liabilities subject to compromise:                                                                                    
       Unsecured creditors                                2,300,353       68,360  (3)    (2,477,648) (6)                 
                                                                         110,435  (4)                                    
                                                                          (1,500) (5)                                    
       Capital lease obligations                            185,029      (55,734) (1)                                    
                                                                         (18,860) (3)                                    
                                                                        (110,435) (4)                                    
       Priority creditors                                    23,022      (23,022) (2)                                    
                                                      -------------   ----------        -----------      -----------     
         Liabilities subject to compromise                2,508,404      (30,756)        (2,477,648)               -     
                                                      -------------   ----------        -----------      -----------     
Total liabilities                                         2,877,211       58,103         (2,477,648)         (94,009)    

Redeemable preferred stock                                1,366,660                                       (1,366,660) (7)
Stockholders' deficit - old                              (3,458,834)     (15,437) (2)     2,336,218 (6)    1,247,053  (7)
                                                                        (109,000) (3)                                    
Stockholders' equity - new                                        -       20,000  (3)       141,430 (6)                  
                                                      -------------   ----------        -----------      -----------     
Total Liabilities and Stockholders' Equity (Deficit)  $     785,037   $  (46,334)       $         -      $  (213,616)    
                                                      =============   ==========        ===========      ===========     


                                                         Pro Forma                                                       
                                                       Reorganized                                                       
                                                      Balance Sheet                                                      
                                                      -------------                                                      
                                                                                                                         
Liabilities and Stockholders' Equity (Deficit)                                                                           
   Current liabilities:                                                                                                  
       Accounts payable                               $      32,420                                                      
       Accrued liabilities                                   47,441                                                      

       Deferred revenue                                      25,724                                                      
                                                      -------------                                                      
         Current liabilities                                105,585                                                      
   Long-term liabilities:                                                                                                
       Term loan                                             84,574                                                      
       Deferred revenue                                      44,502                                                      
       Capital lease obligation                             105,607                                                      
       Other debt                                            23,389                                                      

                                                      -------------                                                      
         Long-term liabilities                              258,072                                                      
   Liabilities subject to compromise:                                                                                    
       Unsecured creditors                                        -                                                      

       Capital lease obligations                                  -                                                      

       Priority creditors                                         -                                                      
                                                      -------------                                                      
         Liabilities subject to compromise                        -                                                      
                                                      -------------                                                      
Total liabilities                                           363,657                                                      

Redeemable preferred stock                                        -                                                      
Stockholders' deficit - old                                       -                                                      

Stockholders' equity - new                                  161,430                                                      
                                                      -------------                                                      
Total Liabilities and Stockholders' Equity (Deficit)  $     525,087                                                      
                                                      =============                                                      

See Notes to Consolidated Pro Forma Balance Sheets                              

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Notes to Consolidated Pro Forma Balance Sheets (Unaudited), in thousands      

1)  Refinance the term loan and $54,899 of capital leases incurring $4,710 of   
fees and paying $3,055 of accrued interest and past due principal.      

2)  Settlement of estimated Administrative claims (i.e., professionals) for     
$16,526 of cash and estimated Priority claims (primarily tax claims) for
$2,753 of cash and $4,848 of debt. Additionally, reclassify $15,421 of  
priority claims that will continue post bankruptcy (primarily accrued   
vacation).                                                              

3)  Record the affirmation of executory contracts through the payment of $12,500
   of cash, return of $8,000 of value of equipment, and issuance of $17,000 of
  debt and $20,000 of new common stock. Capital lease obligations of $18,860
   were rejected and $2,000 of equipment was returned. Additionally, estimated
damage claims of $109,000 on rejected executory contracts were recorded.

4)  Reclassify $110,435 of claims in excess of the security interest.           

5)  Record settlement of convenience class claims of $1,500.                    

6)  Adjustment to pre petition unsecured debt resulting from debt discharge     
pursuant to confirmation of a Plan of Reorganization.                   

7)  Fresh start accounting adjustments, reflecting the $375,000 enterprise      
   value of ICG Communications, Inc., adjusting the carrying value of property
and equipment, other assets and deferred revenue.                       

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Projected Financial Information 

Introduction                                                                    
As a condition to confirmation of a plan of reorganization, the Bankruptcy Code 
requires, among other things, that the bankruptcy court determine that          
confirmation is not likely to be followed by the liquidation or the need for    
further financial reorganization of the debtor.  In connection with the         
development of the Plan, and for purposes of determining whether the Plan       
satisfies this feasibility standard, the Debtors' management analyzed the       
ability of the Reorganized ICG to meet their obligations under the Plan with    
sufficient liquidity and capital resources to conduct their businesses.  In that
connection, the Debtor's management developed and prepared certain projections  
(the "Projections") of the Debtors' operating profit, cash flow and certain     
other items for the period from January 1, 2002 through December 31, 2005 (the  
"Projection Period").                                                           

THE DEBTORS DO NOT, AS A MATTER OF COURSE, PUBLISH THEIR BUSINESS PLANS, BUDGETS
OR STRATEGIES OR MAKE EXTERNAL PROJECTIONS OR FORECASTS OF THEIR ANTICIPATED    
FINANCIAL POSITION OR RESULTS OF OPERATIONS.  ACCORDINGLY, THE DEBTORS          
(INCLUDING THE REORGANIZED ICG) DO NOT ANTICIPATE THAT THEY WILL, AND DISCLAIM  
ANY OBLIGATION TO, FURNISH UPDATED BUSINESS PLANS, BUDGETS OR PROJECTIONS TO    
HOLDERS OF CLAIMS OR INTERESTS PRIOR TO THE EFFECTIVE DATE OR TO STOCKHOLDERS OR
DEBTHOLDERS AFTER THE EFFECTIVE DATE OR TO INCLUDE SUCH INFORMATION IN DOCUMENTS
REQUIRED TO BE FILED WITH THE SEC, ANY CSA OR ANY STOCK EXCHANGE OR OTHERWISE   
MAKE SUCH INFORMATION PUBLICLY AVAILABLE.                                       

The Projections should be read in conjunction with the assumptions,             
qualifications and explanations set forth herein, as well as the Annual Report  
on form 10-K for the year ended December 31, 2000 filed with the SEC.           

General Assumptions                                                             
The Projections reflect numerous assumptions, including various assumptions with
respect to the anticipated future performance of the Reorganized ICG, industry  
performance, general business and economic conditions and other matters, most of
which are beyond the control of the Reorganized ICG.  In addition, unanticipated
events and circumstances may affect the actual financial results of the         
Reorganized ICG.  THEREFORE, WHILE THE PROJECTIONS ARE NECESSARILY PRESENTED    
WITH NUMERICAL SPECIFICITY, THE ACTUAL RESULTS ACHIEVED THROUGHOUT THE          
PROJECTION PERIOD WILL VARY FROM THE PROJECTED RESULTS.  THESE VARIATIONS MAY BE
MATERIAL.  ACCORDINGLY, NO REPRESENTATIONS CAN BE MADE OR IS MADE WITH RESPECT  
TO THE ACCURACY OF THE PROJECTIONS OR THE ABILITY OF REORGANIZED ICG TO ACHIEVE 
THE PROJECTED RESULTS.  See Section VI for a discussion of certain factors that 
may affect the future financial performance of the Reorganized ICG and of the   
various risks associated with the securities of the Reorganized ICG.            

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The Projections have been prepared by the Debtors' management, and while they   
believe that the assumptions underlying the projections for the Projection      
Period, when considered on an overall basis, are reasonable in light of current 
circumstances, no assurance can be given or is given that the projections will  
be realized.  The projections were not prepared in accordance with standards for
projections promulgated by the American Institute of Certified Public           
Accountants or with a view to compliance with published guidelines of the SEC   
regarding projections or forecasts.  The Projections have not been audited or   
compiled by the Debtors' independent auditors.  As indicated below, the business
plan on which the Projections are based assumes, among other things,            
improvements in the Reorganized ICG's results of operations during fiscal year  
2002 as compared to fiscal year 2001 and continued improvements during the      
remainder of the Projection Period.                                             

Holders of Claims and Interests must make their own determinations as to the    
reasonableness of such assumptions and the reliability of the projections in    
reaching their determinations of whether to accept or reject the Plan.          

Principal Assumptions                                                           

The Projections are based upon forecasts of operating results during the        
Projection Period.  The following is a listing of the principal assumptions that
were used to develop the Projections.                                           

       1)   The Projections assume an Effective Date of December 31, 2001. It is
     assumed that as of the Effective Date the equity value of the
         Reorganized ICG will be calculated in accordance with the formula
set forth in the Plan.                                  

 2)   The Projections assume zero proceeds from the Rights Offering.

     3)   It is assumed that no changes in the U.S. tax laws will occur that
          will adversely impact the Reorganized ICG's ability to utilize its
net operating loss carryforwards.                       

In addition to the aforementioned assumptions, the Projections are based on     
numerous detailed operating and financial assumptions.  The Projections assume  
the successful implementation of the Debtors' business plan.  The descriptions  
below summarize the operating and financial information that management believes
are significant and upon which the financial results of Reorganized ICG will    
depend during the Projection Period.                                            

(a) Effective Date; Plan Terms.  The Projections assume Confirmation of the     
Plan and that all transactions and settlement agreements contemplated by the    
Plan will be consummated by the Effective Date of December 31, 2001.   DrKW has 
provided a range of the value of Reorganized ICG of $350MM to $500MM.  The      
Projections have been preparing assuming a $375MM value of Reorganized ICG.     

(b) Balance Sheet.  The Projected balance sheet data presented below, reflects  
all Adjustments to Record Confirmation of the Plan (i.e., debt discharge and    
fresh-start                                                                     

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accounting entries) as presented in the "Consolidated Pro Forma Balance Sheets  
Giving Effect to the Plan of Reorganization" section. Projected balance sheet   
information is presented below for the years ending December 31, 2001 (post     
Effective Date) through December 31, 2005.                                      

Days sales outstanding, used to calculate changes to working capital from       
accounts receivable balances, is projected to remain at approximately 35 days in
each of the four years of the Projection Period.  Days payable outstanding, used
to calculate changes to working capital from accounts payable balances, is      
projected to be 37 in 2002 and 39 thereafter in the Projection Period.          
Depreciation rates are projected to remain constant at an overall rate of 16.7% 
per year.                                                                       

(c) Revenues.  The Debtors generate revenues from three product lines:          
Corporate Services, Dial-Up, and Point-to-Point Broadband.  The Debtors also    
earn Reciprocal Compensation, primarily from Dial-Up services.                  

(c) (1) Corporate Services.  Net revenues (comprised of voice, NikoNet and DIA  
services) are projected at: $100.0MM; $140.8MM; $241.8MM; and $368.8MM for 2002 
through 2005, respectively.  Projected revenue increases result primarily from  
increased sales of DIA services to corporate customers and the addition of DIA  
value-added services projected to become available during 2002 and 2003.  DIA   
services leverage the Company's existing nationwide data infrastructure.        

DIA gross new T1 unit sales are projected to grow from 450 in 2002 to 3,542 in  
2005, with T3 unit sales projected to grow from 150 in 2002 to 1,369 in 2005.   
The Projections assume pricing decreases of 25% and 18% for T1 and T3 lines,    
respectively, in 2002 and pricing decreases of 10% annually thereafter for each 
product (excluding value-added revenues and local loop charges).  Gross margins 
for these services improve over the plan period primarily as a result of        
economies of scale and increased sales of value added services.  T1 gross       
margins are projected to increase from 61% in 2002 to 69% in 2005 and T3 gross  
margins from 49% in 2002 to 65% in 2005.                                        

Voice revenues are projected at: $81.6MM; $76.2MM; $74.2MM; and $74.3MM during  
the four years beginning January 1, 2002, respectively.  Declining revenue      
reflects a shift in focus in new sales from voice services to DIA.              

(c) (2) Dial-Up.  Net revenues are projected at: $232.1MM; $286.7MM; $306.9MM;  
and $304.8MM from 2002 through 2005, respectively.  The Projections reflect     
Dial-Up growth driven by increased user time online and industry consolidation. 
Increased time online per user requires ISPs to purchase more capacity from     
dial-up providers such as the Debtor.                                           

During the Projection Period, the Company anticipates an increase in cumulative 
net Dial-Up Ports from approximately 640,000 on January 1, 2002 to approximately
1,500,000 on December 31, 2005.   Pricing decreases and a shift over time from  
higher margin services to lower margin services, somewhat offset by assumed line
cost decreases, yield a decline in Dial-Up gross margin percentages from 66% in 
2002 to 61% in 2005.                                                            

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(c) (3) Point-to-Point Broadband.  Net revenues are projected at: $150.7MM;     
$163.6MM; $185.1MM; and $217.6MM from 2002 through 2005, respectively.  Revenues
primarily consist of Special Access services but also include SS7 and Switched  
Access services.  The Projections assume that growth in data communications will
drive growth in bandwidth demand.                                               

The projections include Special Access capital investments of: $20MM; $30MM;    
$40MM; and $50MM in years 2002 through 2005, respectively, all with an assumed  
24 month payback on investment.  Average gross margins are assumed to improve   
from 64% in 2002 to 67% in 2005.                                                

SS7 revenues and Switched Access revenues are projected to be flat during the   
Projection Period at $22MM per annum.                                           

(c) (4)  Reciprocal Compensation.  The revenue stream from Reciprocal           
Compensation is projected to be phased out during 2003 and 2004, in accordance  
with current FCC rulings and existing agreements.  Net reciprocal compensation  
is projected at: $74.2MM; $47.8MM; and $13.1MM, from 2002 through 2004,         
respectively.  Projections are based on anticipated minutes of use and          
applicable contracted or FCC rates.                                             

(d) Operating Costs.  Operating costs consist of line costs and other operating 
costs including operating facilities rent, systems maintenance and related      
personnel costs.                                                                

Line costs are projected to be: $194.1MM; $234.7MM; $284.0MM; and $336.2MM in   
years 2002 through 2005, respectively; or 35%; 37%; 38%; and 38% of revenue,    
respectively.  Line costs expressed as a percent of revenue are projected to    
increase from 2002 to 2005 primarily due to the reduction and eventual          
elimination of reciprocal compensation.                                         

Other operating costs are projected to be: $135.1MM; $156.1MM; $170.1MM; and    
$179.1MM in years 2002 through 2005, respectively; or 24%; 24%; 23%; and 20% of 
revenue, respectively.  Other operating costs as a percentage of revenue decline
as the Debtor leverages its existing operating facilities and personnel.        
Employee compensation included in operating costs transfers are projected using 
the same methodologies discussed under the Selling, General, and Administration 
Expenses section presented below.                                               

Overall gross margins resulting from the operating costs assumptions above are  
41%, 39%, 39%, and 42% in years 2002 through 2005, respectively.  Gross margins 
are projected to initially decline as reciprocal compensation is phased out, and
are projected to subsequently increase with increased revenue and improved      
efficiencies.                                                                   

(e) Selling, General, and Administrative Expenses.  SG&A expenditures are       
projected to be: $120.2MM; $140.3MM; $161.9MM; and $185.6MM in years 2002       
through 2005, respectively; or 22%; 22%; 22% and 21% or revenue, respectively.  
Employee compensation expense projections are based upon average salaries and   
commissions (where applicable) by department, adjusted for normal raises,       
bonuses, and benefits.  Headcount projections are                               

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based on estimated operational cost drivers by department. Cost increases over  
the period are driven by inflation and company growth.                          

(f) Capital Expenditures.  Capital expenditures are projected to be: $98.2MM;   
$103.8MM; $116.7MM; and $167.5MM during years 2002 through 2005, respectively.  
A significant component of each year, as described above, is for investments in 
Special Access services.  Other significant capital expenditures are projected  
for maintenance capital, system reliability, and investments in backbone        
equipment (particularly in 2004 and 2005 as the Debtor turns up its existing OC-
48 backbone capacity).  The expenditures are projected to provide adequate      
capacity by line of service through the projection period.                      

(g) Interest Expense.  Subsequent to the Effective Date, and over the course of 
the Projection Period, Reorganized ICG is projected to incur interest expense on
its existing capital leases, the new term loan, and a new revolver.             

Capital leases include IRUs and the headquarters building and are projected to  
total $105.6MM at the Effective Date.  Interest expense is assumed to average   
14.8% per annum for IRUs and 11.8% per annum for the building based on terms of 
agreements affirmed on the Effective Date.                                      

The new term loan is projected to have a principal balance of $84.6MM as of the 
Effective Date.  Interest is assumed at 11.0% per annum payable quarterly.  The 
principal balance of the loan is projected to begin amortizing in 2002.         

A new $50.0MM revolving credit facility is projected.  Costs of the facility are
projected as interest at 11.0% per annum, payable monthly, and a 1.0% unused    
line fee, also payable monthly.  Reorganized ICG projects to initially draw on  
the revolver in 2004.                                                           

Other debt as of the Effective Date consists primarily of notes issued to       
vendors and taxing authorities upon the Effective Date, and are projected to    
have a principal balance totaling $22.8MM.  Associated interest expense is      
projected at 11.0%, payable monthly.  The total principal balance is amortized  
over a five period.                                                             

(h) Income Taxes.  It is assumed that the tax operating loss carry forward in   
existence subsequent to the Effective Date will be sufficient to offset any tax 
liabilities incurred during the Projection Period.  As such, there are no       
projected income tax liabilities.                                               

(i) Ability to Service Debt.  Based on the Projections and subject to the       
assumptions set forth the Debtors project the following debt service coverage   
ratios:                                                                         

------------------------------------------------------------------              
                     2002     2003     2004     2005
------------------------------------------------------------------              
EBITDA/Interest Expense, net      4.8:1    4.9:1    5.9:1    8.2:1              
Debt/EBITDA                       1.9:1    1.8:1    1.4:1    1.0:1              
------------------------------------------------------------------              

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The Company is projected to have $93.8MM in cash on the Effective Date and Plan 
projections utilize approximately $83.5MM of this amount, plus additional       
funding from the revolving credit facility, to fund the capital program,        
principal and interest obligations, and working capital requirements over the   
Projection period.  The Company requires approximately $43.2MM of funding in    
2004 through 2005.                                                              

There can be no assurances that the projected results necessary to general      
adequate funds for the retirement of this indebtedness will be achieved.  If    
these results are not obtained, funds will have to be derived from alternative  
sources, such as reduced discretionary capital expenditures and/or additional   
borrowing.  See Section VI.  If alternative sources of funds are available to   
----------                                      
the Debtor, any utilization of alternative sources of funds may impair the      
competitive position of the Debtor, reduce its cash flows or have other adverse 
consequences, including the imposition of additional burdensome covenants,      
security interests or other obligations that could be adverse to Debtors and to 
the holders of Claims and Interests.                                            

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ICG COMMUNICATIONS, INC.  

Consolidated Projected Balance Sheets 

Plan of Reorganization Projections                                              
(in thousands)                                                                  

                                                        [Enlarge/Download Table]

                                                                        December 31,                            
                                            --------------------------------------------------------------------
                                              2001           2002           2003           2004           2005  
                                            --------------------------------------------------------------------
                                                                                                                
Current assets:                                                                                                 
  Cash and short-term investments           $ 93,758       $ 71,244       $ 34,733       $  9,401       $ 10,227
  Accounts receivables, net                   48,283         58,173         61,074         71,574         85,594
  Prepaid expenses & Inventory                 8,753          8,428          6,819          4,650          6,937
                                            --------------------------------------------------------------------
    Current assets                           150,794        137,844        102,626         85,625        102,759
Property and equipment, net                  353,773        380,861        400,915        415,585        457,708
Other assets, net                             20,520         18,578         17,636         16,694         15,752
                                            --------------------------------------------------------------------
Total assets                                $525,087       $537,283       $521,178       $517,904       $576,218
                                            ====================================================================

Current liabilities:                                                                                            
  Accounts payable                          $ 32,420       $ 35,552       $ 39,002       $ 45,340       $ 56,225
  Accrued liabilities                         47,441         58,846         62,677         66,001         68,896
  Deferred revenue                            25,724         25,724         25,724         25,724         25,724
                                            --------------------------------------------------------------------
    Current liabilities                      105,585        120,122        127,403        137,065        150,845
Long-term liabilities                                                                                           
  Term loan                                   84,574         80,345         76,117         67,659         59,202
  Revolver                                         -              -              -         11,265         43,196
  Deferred revenue                            44,502         33,702         22,902         12,102          1,302
  Capital lease obligations                  105,607        101,076         95,829         89,765         82,781
  Other debt                                  23,389         17,845         12,697          7,017          4,194
                                            --------------------------------------------------------------------
    Long-term liabilities                    258,072        232,968        207,545        187,809        190,674
                                            --------------------------------------------------------------------
Total liabilities                            363,657        353,090        334,948        324,874        341,519
Total stockholders' equity                   161,430        184,193        186,230        193,030        234,699
                                            --------------------------------------------------------------------
Total liabilities and stockholders' equity  $525,087       $537,283       $521,178       $517,904       $576,218
                                            ====================================================================

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ICG COMMUNICATIONS, INC.  

Projected Statement of Operations 

Plan of Reorganization Projections                                              
(in thousands)                                                                  

                                                        [Enlarge/Download Table]

                                                    Years Ending December 31,             
                                     -----------------------------------------------------
                                         2002          2003           2004          2005  
                                     -----------------------------------------------------
                                                                                          
Revenue                              $   556,953    $  638,979    $  747,024    $ 891,212 
Operating costs                          329,209       390,860       454,101      515,335 
                                     ---------------------------------------------------- 
   Gross Profit                          227,744       248,119       292,923      375,877 

Selling, general and administrative      120,168       140,344       161,891      185,567 
expenses                                                                                  
                                     ---------------------------------------------------- 
   EBITDA                                107,576       107,775       131,032      190,310 

Depreciation and amortization             66,938        83,726       102,008      125,333 
Interest expense, net                     22,455        22,013        22,224       23,308 
Other (income)                            (4,580)            -             -            - 

                                     ---------------------------------------------------- 
Net income                           $    22,763    $    2,036    $    6,800    $  41,669 
                                     ==================================================== 

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ICG COMMUNICATIONS, INC.  

Projected Statements of Cash Flows  

Plan of Reorganization Projections                                              
(in thousands)                                                                  

                                                        [Enlarge/Download Table]

                                                                  Years Ending December 31,                 
                                                 ---------------------------------------------------------- 
                                                     2002            2003            2004            2005   
                                                 ---------------------------------------------------------- 
                                                                                                            
Cash flow from operating activities:                                                                        
  EBITDA                                           $107,576       $ 107,775       $ 131,032       $ 190,310 
  Adjustments                                                                                               
     Deferred revenue recognition                   (10,800)        (10,800)        (10,800)        (10,800)
     Change in working capital                        6,069           5,997           1,339          (2,519)
                                                 ---------------------------------------------------------- 
       Net cash from operating activities           102,845         102,972         121,571         176,991 

Cash flow from investing activities:                                                                        
  Capital expenditures                              (98,156)       (103,781)       (116,678)       (167,456)
  Proceeds from sale of PP&E & other assets           8,710              --              --              -- 
                                                 ---------------------------------------------------------- 
       Net cash from investing activities           (89,446)       (103,781)       (116,678)       (167,456)

Cash flow from financing activities:                                                                        
  Proceeds from the revolving credit agreement            -               -          11,265          31,930 
  Principal payments on term loan                    (4,229)         (4,228)         (8,458)         (8,457)
  Principal payments on LT debt & cap leases        (14,937)        (14,682)        (15,359)        (12,644)
  Interest payments, net                            (16,747)        (16,792)        (17,673)        (19,538)
                                                 ---------------------------------------------------------- 
       Net cash from financing activities           (35,913)        (35,702)        (30,225)         (8,709)

Net increase (decrease) in cash and equivalents     (22,514)        (36,511)        (25,332)            826 
Cash and equivalents, beginning of year              93,758          71,244          34,733           9,401 
                                                 ---------------------------------------------------------- 
Cash and equivalents, end of year                  $ 71,244       $  34,733       $   9,401       $  10,227 
                                                 ========================================================== 

14

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		1/31/13		38
		12/31/05		5		159
		5/7/02		37
		4/3/02		20
		4/1/02		34					NT 10-K/A
		3/31/02		92					10-Q
		3/22/02		20
		3/8/02		37
		2/8/02		37
		2/1/02		3
		1/10/02		36
		1/1/02		146		159
		12/31/01		36		159			10-K,  11-K,  NT 10-K,  NT 10-K/A
		12/21/01		36
Filed on:		12/20/01
For Period End:		12/19/01		1		139
		12/10/01		37
		12/6/01		37
		12/1/01		28		30
		11/30/01		34
		11/7/01		34
		10/10/01		37
		8/11/01		37
		8/2/01		36		37
		7/12/01		36
		6/21/01		35		39
		6/20/01		27					SC 13D/A
		4/30/01		41					SC 13D
		2/27/01		36		41
		2/9/01		41
		1/31/01		35		39
		1/8/01		41
		12/31/00		24		157			10-K,  NT 11-K,  NTN 10K
		12/19/00		33		35
		11/29/00		35
		11/18/00		27		80
		11/14/00		4		32			10-12B,  8-K,  NT 10-Q
		11/1/00		27		28
		9/30/00		23		26			10-12B,  10-Q,  NT 10-Q
		12/31/99		23		26			10-K,  10-K405,  4,  5
		8/12/99		27		114
		4/27/98		114					S-4
		2/12/98		114					8-K,  SC 13G/A
		3/25/97		27					4
		3/11/97		114
		4/30/96		114
		8/8/95		114
									List all Filings