STOCK PLEDGE AGREEMENT

THIS STOCK PLEDGE AGREEMENT (hereinafter referred to as this “Agreement”) is
made this 21st day of January, 2011, by LY HOLDINGS, LLC, a Kentucky limited
liability company (hereinafter referred to as “Pledgor”) in favor of FIRST
SAVINGS BANK, F.S.B. (hereinafter referred to as “Creditor”).

RECITALS

WHEREAS, Pledgor is the owner of up to and at least Two Million (2,000,000) of
shares of Convertible Preferred Stock of Lightyear Network Solutions, Inc., a
Nevada corporation (hereinafter referred to as “Debtor”); and

WHEREAS, the Debtor has applied to Creditor for a loan in the amount of Two
Million and 00/100 Dollars ($2,000,000.00)(hereinafter referred to as the
“Loan”); and

WHEREAS, the Loan is to be evidenced by and repaid with interest in accordance
with the provisions of a certain Promissory Note of even date herewith from
Debtor payable to Creditor in the principal amount of the Loan; and

WHEREAS, to induce Creditor to extend the Loan, Creditor has required that
Pledgor pledge and assign the Shares (as defined below) to Creditor to secure
the Loan and to execute this Agreement; and

WHEREAS, Debtor’s receipt of the proceeds of the Loan will be of significant and
substantial direct or indirect benefit to Pledgor.

NOW, THEREFORE, in consideration of the premises and intending to be legally
bound thereby, Pledgor hereby agrees as follows:

1.           Pledge of Collateral.  Pledgor hereby pledges, transfers, assigns
and grants to Creditor a security interest in and to Two Million (2,000,000)
shares of Convertible Preferred Stock in Debtor (hereinafter referred to as the
“Shares”), Stock Certificate No. 102 (and all property subsequently deposited
pursuant hereto in addition to or in substitution for any such property),
together with all cash and non-cash proceeds thereof (all of the foregoing is
herein collectively referred to as the “Collateral”) to secure the following
which hereafter are referred to as the “Obligations”: (a) the prompt payment of
the Loan, and to the fullest extent permitted by applicable law, all costs and
expenses (including reasonable attorney’s fees) incurred by Creditor in the
collection of the Loan, and (b) the performance of all of the terms, conditions
and provisions of this Agreement and of any other agreement or document now or
hereafter executed and delivered by Debtor, Pledgor, or any other person in
connection with the Loan (hereinafter referred to as the “Loan Documents”).

2.           Representations and Warranties.  Pledgor represents and warrants to
Creditor that: (a) Pledgor has full power and authority to enter into this
Agreement; (b) any consent or approval which is required as a condition to the
validity of this Agreement has been obtained; (c) this Agreement constitutes the
valid and legally binding agreement of Pledgor in accordance with its terms and
does not constitute a prohibited transfer under any law, statute, regulation or
ordinance, including the Securities Act of 1933; (d) there is no provision of
any existing mortgage, indenture, contract, subscription agreement, or other
agreement binding on Pledgor or affecting its property which would conflict with
or in any way prevent the execution, delivery or carrying-out of the terms of
this Agreement; (e) Pledgor has good title to the Collateral and the Collateral
is owned free and clear of liens and encumbrances; (f) there are no proceedings
pending or, so far as Pledgor knows, threatened before any court or
administrative agency which, in the opinion of Pledgor, will adversely affect
the financial condition or operation of Pledgor, or the authority of Pledgor to
enter into, or the validity or enforceability of, this Agreement or any of the
Loan Documents; (g) Pledgor will not create, incur, assume or suffer to exist
any mortgage, pledge, lien or other encumbrance of any kind, or any security
interest in any of the Collateral now owned or hereafter acquired, without the
prior written consent of Creditor; (h) Pledgor will immediately notify Creditor
in writing of any event which materially adversely affects the value of the
Collateral or the rights and remedies of Creditor in relation thereto; (i)
Pledgor has delivered to Creditor any and all certificates evidencing the
Collateral, together with any necessary powers or endorsements; and (j) the
Lightyear Network Solutions, Inc. Convertible Preferred Stock statement attached
hereto as Exhibit “A” (hereinafter referred to as the “Stock Statement”) truly
and accurately states and reflects the rights of owners of Convertible Preferred
Stock in Debtor to which rights Creditor may succeed pursuant to the terms
hereof.

 
 

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3.           Other Documents.  Pledgor will execute and deliver to Creditor all
assignments, endorsements, powers, hypothecations and other documents required
at any time and from time to time by Creditor with respect to the Collateral.
Pledgor shall, at its expense, do, make, procure and execute and deliver all
acts, things, writings and assurances as Creditor may at any time request to
protect, assure or enforce its rights, interests and remedies created by,
provided in or emanating from this Agreement. Pledgor authorizes Creditor to
file financing statements covering the Collateral and containing such legends as
Creditor shall deem necessary or desirable to protect Creditor’s interest in the
Collateral.  Pledgor agrees to pay all taxes, fees and costs (including
attorneys’ fees) paid or incurred by Creditor in connection with the
preparation, filing or recordation thereof.  Pledgor shall not file any
amendments, correction statements or termination statements concerning the
Collateral without the prior written consent of Creditor.

4.           Continued Possession of Collateral.  Creditor shall hold possession
of the Collateral so long as any of the Obligations are outstanding.  Upon the
satisfaction in full of all of the Obligations, Creditor shall release any
remaining Collateral to Pledgor.

5.           Rights of the Pledgor.  Prior to the occurrence of an Event of
Default under the Note or any of the other Loan Documents, the Pledgor shall
have all voting and other rights, powers, privileges and preferences pertaining
to the Collateral, subject to the terms of this Agreement and the other Loan
Documents, and Lender shall not be entitled to any of such rights by reason of
its possession of the Collateral.
 
6.           Covenants of Pledgor.  Pledgor agrees that, so long as Creditor
holds possession of the Collateral, Pledgor will not, without Creditor’s prior
written consent, withdraw, sell, assign, transfer, pledge, or otherwise encumber
the Collateral or any part thereof.  If Pledgor at any time becomes entitled to
receive any cash, stock, or other property as additions to, in substitution of
or in exchange for any of the Collateral, Pledgor shall accept the same as
Creditor’s agent and shall promptly deliver them to Creditor in the exact form
received, with all necessary transfer instruments or stock powers, to be held as
further security for the Obligations, subject to the terms hereof.

7.           Care of Collateral.  Creditor shall have no liability or duty
beyond the safe custody of such of the Collateral as may come into the
possession of Creditor, either before or after the occurrence of an Event of
Default, on account of loss of or damage to, to collect or enforce any of its
rights against, the Collateral, to collect any income accruing on the
Collateral, or to preserve rights against other parties, except for liability
arising out of the gross negligence or actual bad faith of Creditor.  If
Creditor actually receives any notices requiring action with respect to
Collateral in Creditor’s possession, Creditor shall take reasonable steps to
forward such notices to Pledgor. Pledgor is responsible for responding to
notices concerning the Collateral.  Creditor’s sole responsibility is to take
such action as is reasonably requested by Pledgor in writing; however, Creditor
is not responsible to take any action that, in Creditor’s sole judgment, would
adversely affect the value of the Collateral as security for the
Obligations.  While Creditor is not required to take certain actions, if action
is needed, in Creditor’s sole discretion, to preserve and maintain the
Collateral, Pledgor authorizes Creditor to take such actions, but Creditor is
not obligated to do so.
 
8.           Assignment of Collateral.  In addition to all other rights
available to it under applicable laws or otherwise, should Creditor assign,
pledge, or transfer the Loan, Creditor shall have the right to assign therewith
Creditor’s rights in any of the Collateral, and any assignee, pledge, or
transferee shall have the rights of Creditor hereunder with respect to the
Collateral so assigned, pledged, or transferred, and Creditor shall be
thereafter relieved from all duties with respect to any such Collateral.

 
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9.           Event of Default.  The occurrence of any one or more of the
following events shall constitute an event of default (hereinafter referred to
as an “Event of Default”) under this Agreement: (a) an Event of Default under
the other Loan Documents; (b) failure of Pledgor and/or Debtor to perform,
observe, or comply with any of the provisions of the Loan Documents; (c) if any
information contained in any financial statement, application, schedule, and/or
report in connection with the Loan or any other document given by Pledgor,
Debtor, and/or any other person is not in all material respects true and
accurate or if Pledgor, Debtor, and/ or such person in connection with the Loan
omitted to state any material fact or any fact necessary to make such
information not misleading; (d) if Pledgor and/or Debtor is not paying debts as
such debts become due; (e) the filing of any petition for relief under
Bankruptcy Code or any similar federal or state statute by or against Pledgor
and/or Debtor; (f) an application for the appointment of a receiver for, the
making of a general assignment for the benefit of creditors by, or the
insolvency of Pledgor and/or Debtor; (g) the death of Pledgor and/or Debtor; (h)
the dissolution, whether voluntary, involuntary, or administrative, of Pledgor
and/or Debtor; (i) there is a substantial change in the existing or prospective
financial condition of Pledgor and/or Debtor which Creditor in good faith
determines to be materially adverse; and/or (j) if at any time or for any reason
Creditor reasonably deems itself to be insecure.

10.         Remedies.

(a)           Upon the occurrence of an Event of Default hereunder, Creditor
may, at its option, proceed to enforce this Agreement and in connection
therewith may (i) declare all or any part of the unpaid Loan, together with all
accrued and unpaid interest thereon, to be immediately due and payable, (ii)
retain or sell all or any portion of the Collateral and apply such Collateral or
the proceeds thereof against the Loan up to the limits expressly provided
herein, (iii) exercise any remedies available to it under the Loan Documents,
and (iv) otherwise exercise all of the rights and remedies of a secured party
under the Indiana Uniform Commercial Code and under other applicable
laws.  Without limiting the foregoing, Creditor shall have the right to:  (i)
transfer the whole or any part of the Collateral into the name of Creditor or
its nominee; (ii) notify any person obligated on any of the Collateral to make
payment directly to Creditor or its nominee of any amounts due or to become due
thereon; (iii) vote the Collateral; and/or (iv) convert the Collateral to shares
of “common stock” pursuant to the terms of the Stock Statement.

(b)           Any written notice of the sale, disposition or other intended
action by Creditor with respect to the Collateral which is sent by certified
mail, return receipt requested or by overnight courier to Pledgor at Pledgor’s
address specified below, or such other address of Pledgor which may from time to
time be shown on Creditor’s records, at least five (5) days prior to such sale,
disposition or action, shall constitute reasonable notice to Pledgor, unless
applicable law requires a longer period. However, this provision shall not be
construed to impose any obligation on Creditor to notify Pledgor of Creditor’s
intent to sell, dispose of, or take other action with respect to the Collateral,
except to the extent applicable law requires such notice.

(c)           Pledgor recognizes that Creditor may be unable to effect a public
sale of all or a part of the Collateral by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, but may be compelled to resort to one or more private sales to
a restricted group of purchasers who will be obliged to agree, among other
things, to acquire all or a part of the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof.  Pledgor
acknowledges and agrees that any private sale so made may be at prices and on
other terms less favorable to the seller than if such Collateral were sold at
public sale, and that Creditor has no obligation to delay the sale of such
Collateral for the period of time necessary to permit registration of such
Collateral for public sale under any securities laws.  Pledgor agrees that a
private sale or sales made under the foregoing circumstances shall be deemed to
have been made in a commercially reasonable manner.  If any consent, approval or
authorization of any federal, state, municipal or other governmental department,
agency or authority should be necessary to effectuate any sale or other
disposition of the Collateral, or any partial sale or other disposition of the
Collateral, Pledgor will execute all such applications and other instruments as
may be required in connection with securing any such consent, approval or
authorization, and will otherwise use its best efforts to secure the same.

(d)           All costs and expenses, including, without limitation, attorneys’
fees and expenses, incurred by or on behalf of Creditor in connection with the
taking, holding, preparing for sale or other disposition, selling, managing,
collecting, or otherwise disposing of the Collateral, together with interest
thereon at a per annum rate of interest which is equal to the then highest rate
of interest charged on the principal of the Loan from the date of payment until
repaid in full, and such costs and expenses as Creditor shall incur to collect
and enforce the Obligations (hereinafter referred to as the “Liquidation
Costs”), shall be paid by Pledgor to Creditor on demand and shall constitute and
become a part of the Obligations secured hereby.  Any retained Collateral and
any proceeds of sale or other disposition of the Collateral will be applied by
Creditor to the payment of the Liquidation Costs, and the balance of such
proceeds (if any) will be applied by Creditor toward the payment of the Loan
(whether then due or not) at such time or times and in such order and manner of
application as Creditor may from time to time in its sole discretion
determine.  Except as may be otherwise specifically provided in this Agreement,
all Collateral and proceeds of Collateral coming into Creditor’s possession may
be applied by Creditor to any of the Obligations, whether matured or unmatured,
as Creditor shall determine in its sole but reasonable discretion. Creditor may
defer the application of non-cash proceeds of Collateral to the Obligations
until cash proceeds are actually received by Creditor.

 
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(e)           Each right, power, and remedy of Creditor as provided for in this
Agreement, or in the other Loan Documents or now or hereafter existing at law or
in equity or by statute or otherwise shall be cumulative and concurrent and
shall be in addition to every other right, power or remedy provided for in this
Agreement or in the other Loan Documents or now or hereafter existing at law or
in equity or by statute or otherwise, and the exercise or beginning of the
exercise by Creditor of any one or more such rights, powers, or remedies shall
not preclude the simultaneous or later exercise by Creditor of any or all such
other rights, powers or remedies.

(f)           No failure or delay by Creditor to insist upon the strict
performance of any term, condition, covenant, or agreement of this Agreement or
of the Loan Documents, or to exercise any right, power or remedy consequent upon
a breach thereof, shall constitute or be deemed to constitute a waiver of any
such term, condition, covenant or agreement or of any such breach, or preclude
Creditor from exercising any such right, power or remedy at any later time or
times.

11.         Power of Attorney.  Pledgor hereby appoints and constitutes Creditor
its agent and true and lawful attorney, with full power of substitution, with
full power and authority to:  (i) prepare, execute, and deliver on behalf of
Pledgor any and all such instruments, assignments, stock powers, certificates,
and other documents as Creditor deems necessary in order to perfect and protect
its interests in the Collateral; (ii) endorse Pledgor’s name on requests to
other secured parties of Pledgor for accountings, confirmations of collateral,
and confirmations of statements of account; and (iii) upon the occurrence of the
Event of Default hereunder, (A) to liquidate any Collateral and apply the
proceeds thereof directly to the Obligations, (B) to transfer ownership of any
Collateral to an account designated by Creditor, and (c) to take such other
actions with respect to the Collateral as Creditor, in its sole discretion,
shall deem necessary or appropriate in order to protect its interest in the
Collateral.  This appointment of agency and power of attorney is coupled with an
interest and may not be revoked or canceled before all of the Obligations have
been paid or otherwise satisfied.

12.         Miscellaneous.  Neither this Agreement nor any term, condition,
covenant, or agreement hereof may be changed, waived, discharged, or terminated
orally, but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.  This
Agreement shall be governed by the internal laws of the State of Indiana and
shall be binding upon the heirs, personal representatives, successors, and
assigns of Pledgor and shall inure to the benefit of the successors and assigns
of Creditor.  As used herein the singular number shall include the plural, the
plural the singular, and the use of the masculine, feminine, or neuter gender
shall include all genders as the context may require, and the term “person”
shall include an individual, a corporation, an association, a partnership, a
trust, a limited liability company, an organization, a government, or political
subdivision thereof and a governmental agency.  Unless varied by this Agreement,
all terms used herein which are defined by the Indiana Uniform Commercial Code
shall have the same meanings hereunder as assigned to them by the Indiana
Uniform Commercial Code, as in effect on the date hereof.

13.         Waiver of Jury Trial.  Pledgor and Creditor, after consulting or
having had the opportunity to consult with counsel, knowingly, voluntarily, and
intentionally waive any right either of them may have to a trial by jury in any
litigation based upon or arising out of this Agreement, the Loan Documents, or
any related instrument or agreement or any of the transactions contemplated by
this Agreement or any course of conduct, dealing, statements, whether oral or
written, or actions of either of them.  Neither Pledgor nor Creditor shall seek
to consolidate, by counterclaim or otherwise, any action in which a jury trial
has been waived with any other action in which a jury trial cannot be or has not
been waived.

[SPACE INTENTIONALLY BLANK; SIGNATURES ON FOLLOWING PAGE]

 
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The signature of Pledgor is subscribed to this Agreement as of the day and year
first written above.

“PLEDGOR”
 
LY HOLDINGS, LLC, a Kentucky limited liability company
   
By:
/S/  J. Sherman Henderson. III
Printed Name:
J. Sherman Henderson
Title:
Manager

COMMONWEALTH OF KENTUCKY
)
 
)  SS:
COUNTY OF ____________________
)

Before me, a Notary Public in and for the above county and state, on this the
___ day of January, 2011, personally appeared _________________________, as
_____________________ of LY Holdings, LLC, a Kentucky limited liability company,
and acknowledged the execution of the foregoing Stock Pledge Agreement on behalf
of said company.

WITNESS my hand and notarial seal.

       
My Commission expires:
 
Notary Public
                     
Printed Name
 

Prepared by:

Keith D. Mull
MULL & HEINZ, LLC
2867 Charlestown Road
New Albany, Indiana  47150
(812) 206-2315

 
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IRREVOCABLE STOCK POWER

FOR VALUE RECEIVED, the undersigned does hereby sell, assign, and transfer to
FIRST SAVINGS BANK, F.S.B., Two Million (2,000,000) shares of the Convertible
Preferred Stock of LIGHTYEAR NETWORK SOLUTIONS, INC., a Nevada corporation,
represented by Stock Certificate No. 102, standing in the name of the
undersigned on the books of said entity.  The undersigned does hereby
irrevocably constitute and appoints First Savings Bank, F.S.B., as its agent and
attorney-in-fact, to transfer said stock on the books of said entity, with full
power of substitution of the premises.

   
LY HOLDINGS, LLC, a Kentucky limited liability company
       
Date: ____________________
 
By:
     
Printed Name:
     
Title:
 

COMMONWEALTH OF KENTUCKY
)
 
)  SS:
COUNTY OF ___________________
)

Before me, a Notary Public in and for the above county and state, on this the
___ day of _______________, 20___, personally appeared _______________________,
as ________________ of LY Holdings, LLC, a Kentucky limited liability company,
and acknowledged the execution of the foregoing Irrevocable Stock Power on
behalf of said company.

WITNESS my hand and notarial seal.

       
My Commission expires:
 
Notary Public
                     
Printed Name
 

 

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