PLEDGE AND SECURITY AGREEMENT     THIS PLEDGE AND SECURITY AGREEMENT (“Pledge Agreement”), dated October 25, 2005, is by US LECCorp., a Delaware corporation (“Pledgor”), with its chief executive office at 6801 MorrisonBoulevard, Charlotte, NC 28211, to and in favor of Wachovia Bank, National Association, a NationalBanking Association (“Pledgee”), having an office at 301 South College Street, Charlotte, NC28288-0479.W I T N E S S E T H:     WHEREAS, Pledgor is now the direct and beneficial owner of all of the issued and outstandingshares of capital stock of US LEC of Georgia Inc., a Delaware corporation, US LEC of North CarolinaInc., a Delaware corporation, US LEC of South Carolina Inc., a Delaware corporation, US LEC ofTennessee Inc., a Delaware corporation, US LEC of Alabama Inc., a North Carolina corporation, USLEC Communications Inc., a North Carolina Corporation, , US LEC of Florida Inc., a North Carolinacorporation, US LEC of Maryland Inc., a North Carolina corporation, US LEC of Pennsylvania Inc., aNorth Carolina corporation (each individually, “Issuer” and collectively, “Issuers”) as set forthon Exhibit A annexed hereto and made a part hereof (collectively, the “Pledged Securities”);     WHEREAS, Pledgee and Pledgor have entered into or are about to enter into financingarrangements pursuant to which Pledgee may make loans and advances and provide other financialaccommodations to Pledgor as set forth in the Loan and Security Agreement, dated of even dateherewith, by and among Pledgee, Pledgor and Issuers (as the same now exists or may hereafter beamended, modified, supplemented, extended, renewed, restated or replaced, the “Loan Agreement”) andthe other agreements, documents and instruments referred to therein or at any time executed and/ordelivered in connection therewith or related thereto, including, but not limited to, this PledgeAgreement (all of the foregoing, together with the Loan Agreement, as the same now exist or mayhereafter be amended, modified, supplemented, extended, renewed, restated or replaced, beingcollectively referred to herein as the “Financing Agreements”);     WHEREAS, in order to induce Pledgee to enter into the Loan Agreement and the other FinancingAgreements and to make loans and advances and provide other financial accommodations to Pledgorpursuant thereto, Pledgor has agreed to secure the payment and performance of the Obligations (ashereinafter defined) to Pledgee and to accomplish same by (i) executing and delivering to Pledgeethis Pledge Agreement, (ii) subject to the terms and conditions of the Intercreditor Agreement,delivering to Pledgee the Pledged Securities which are registered in the name of Pledgor, togetherwith appropriate powers duly executed in blank by Pledgor, and (iii) delivering to Pledgee any andall other documents which Pledgee deems necessary to protect Pledgee’s interests hereunder;

 
     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged, Pledgor hereby agrees as follows:     1. GRANT OF SECURITY INTEREST     To secure the prompt payment and performance, observance and indefeasible payment in full ofall of the Obligations (as hereinafter defined), Pledgor hereby pledges to Pledgee and grants toPledgee a security interest in and lien upon (a) the Pledged Securities, together with all cashdividends, stock dividends, interests, profits, redemptions, warrants, subscription rights, stock,securities options, substitutions, exchanges and other distributions now or hereafter distributedby Issuers or which may hereafter be delivered to the possession of Pledgor or Pledgee with respectthereto, (b) Pledgor’s books and records with respect to the foregoing, and (c) the proceeds of allof the foregoing (all of the foregoing being collectively referred to herein as the “Collateral”).     2. OBLIGATIONS SECURED     The security interest, lien and other interests granted to Pledgee pursuant to this PledgeAgreement shall secure the prompt performance and payment in full of any and all of theObligations, as such term is defined in the Loan Agreement.     3. REPRESENTATIONS, WARRANTIES AND COVENANTS     Pledgor hereby represents, warrants and covenants with and to Pledgee the following (all ofsuch representations, warranties and covenants being continuing so long as any of the Obligationsare outstanding):     (a) The Pledged Securities are duly authorized, validly issued, fully paid and non-assessablecapital stock of Issuers and constitute Pledgor’s entire interest in Issuers and are notregistered, nor has Pledgor authorized the registration thereof, in the name of any person orentity other than Pledgor or Pledgee.     (b) The Collateral is directly, legally and beneficially owned by Pledgor, free and clear ofall claims, liens, pledges and encumbrances of any kind, nature or description, except for thepledge, lien and security interest in favor of Pledgee and the pledges, claims, liens, encumbrancesand security interests permitted under the Loan Agreement.     (c) The Collateral is not subject to any restrictions relative to the transfer thereof andPledgor has the right to transfer and hypothecate the Collateral free and clear of any liens,encumbrances or restrictions except for the liens in favor of Senior Secured Note Trustee aspermitted under the terms of the Loan Agreement.     (d) The Collateral is duly and validly pledged to Pledgee and no consent or approval of anygovernmental or regulatory authority or of any securities exchange or the like, nor any consent orapproval of any other third party, was or is necessary to the validity and enforceability
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of this Pledge Agreement.     (e) Pledgor authorizes Pledgee to: (i) store, deposit and safeguard the Collateral, (ii)perform any and all other acts which Pledgee in good faith deems reasonable and/or necessary forthe protection and preservation of the Collateral or its value or Pledgee’s security interesttherein, including, without limitation, upon the occurrence of an Event of Default, and afternotice to Pledgor, transferring, registering or arranging for the transfer or registration of theCollateral to or in Pledgee’s own name and receiving the income therefrom as additional securityfor the Obligations and (iii) pay any charges or expenses which Pledgee deems necessary for theforegoing purpose, but without any obligation to do so. Any obligation of Pledgee for reasonablecare for the Collateral in Pledgee’s possession shall be limited to the same degree of care whichPledgee uses for similar property pledged to Pledgee by other persons.     (f) If at any time after the date hereof Pledgor shall become entitled to receive or acquire,or shall receive any stock certificate, or option or right with respect to the stock of any Issuer(including without limitation, any certificate representing a dividend or a distribution orexchange of or in connection with reclassification of the Pledged Securities) whether as anaddition to, in substitution of, or in exchange for any of the Collateral or otherwise, Pledgoragrees to accept same as Pledgee’s agent, to hold same in trust for Pledgee and to deliver sameforthwith to Pledgee or Pledgee’s agent or bailee in the form received, with the endorsement(s) ofPledgor where necessary and/or appropriate powers and/or assignments duly executed to be held byPledgee or Pledgee’s agent or bailee subject to the terms hereof, as further security for theObligations.     (g) Pledgor shall not, without the prior consent of Pledgee, directly or indirectly, sell,assign, transfer, or otherwise dispose of, or grant any option with respect to the Collateral, norshall Pledgor create, incur or permit any further pledge, hypothecation, encumbrance, lien,mortgage or security interest with respect to the Collateral except as otherwise provided in theLoan Agreement.     (h) So long as no Event of Default (as hereinafter defined) has occurred and is continuing,Pledgor shall have the right to vote and exercise all corporate rights with respect to the PledgedSecurities, except as expressly prohibited herein, and to receive any cash dividends payable inrespect of the Pledged Securities.     (i) Pledgor shall not permit any Issuer, directly or indirectly, to issue, sell, grant,assign, transfer or otherwise dispose of, any additional shares of capital stock of any Issuer orany option or warrant with respect to, or other right or security convertible into, any additionalshares of capital stock of any Issuer, now or hereafter authorized, unless all such additionalshares, options, warrants, rights or other such securities are made and shall remain part of theCollateral subject to the pledge and security interest granted herein.     (j) Pledgor shall pay all charges and assessments of any nature against the Collateral or withrespect thereto prior to said charges and/or assessments being delinquent.     (k) Pledgor shall promptly reimburse Pledgee on demand, together with interest at the highestrate then applicable to the Obligations set forth in the Loan Agreement, for any charges,
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assessments or expenses paid or incurred by Pledgee in its discretion for the protection,preservation and maintenance of the Collateral and the enforcement of Pledgee’s rights hereunder,including, without limitation, reasonable attorneys’ fees and legal expenses incurred by Pledgee inseeking to protect, collect or enforce its rights in the Collateral or otherwise hereunder. Anysuch amounts paid or incurred by Pledgee shall constitute part of the Obligations secured herebyand may be charged by Pledgee to any loan account of Pledgor maintained by Pledgee, at its option.     (l) Pledgee may notify any Issuer or the appropriate transfer agent of the Pledged Securitiesto register the security interest and pledge granted herein and honor the rights of Pledgee withrespect thereto.     (m) Pledgor authorizes Pledgee to:(i) perform any and all other acts which Pledgee deemsreasonable and/or necessary for the protection and preservation of the Collateral or its value orPledgee’s security interest therein, and (ii) pay any charges or expenses which Pledgee deemsnecessary for the foregoing purpose, but without any obligation to do so (and any amounts so paidshall constitute Obligations under the Loan Agreement).     (n) Pledgor waives: (i) all rights to require Pledgee to proceed against any other person,entity or collateral or to exercise any remedy, (ii) the defense of the statute of limitations inany action upon any of the Obligations, (iii) any right of subrogation or interest in theObligations or Collateral until all Obligations have been paid in full in immediately availablefunds and the Loan Agreement has been terminated, (iv) any rights to notice of any kind or naturewhatsoever, unless specifically required in this Pledge Agreement or non-waivable under anyapplicable law, and (v) to the extent permissible, its rights under Section 9-207 of the UniformCommercial Code. Pledgor agrees that the Collateral, other collateral, or any other guarantor orendorser may be released, substituted or added with respect to the Obligations, in whole or inpart, without releasing or otherwise affecting the liability of Pledgor, the pledge and securityinterests granted hereunder, or this Pledge Agreement. Pledgee is entitled to all of the benefitsof a secured party set forth in Section 9-207 of the Uniform Commercial Code.     4. EVENTS OF DEFAULT     The occurrence or existence of any Event of Default under the Loan Agreement is referred toherein individually as an “Event of Default” and collectively as “Events of Default”.     5. RIGHTS AND REMEDIES     At any time an Event of Default exists or has occurred and is continuing, and after notice toPledgor, in addition to all other rights and remedies of Pledgee, whether provided under thisPledge Agreement, the Loan Agreement, the other Financing Agreements, applicable law or otherwise,Pledgee shall have the following rights and remedies which may be exercised without notice to, orconsent by, Pledgor except as such notice or consent is expressly provided for hereunder:     (a) Pledgee, at its option, shall be empowered to exercise its continuing right to
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instruct any Issuer (or the appropriate transfer agent of the Pledged Securities) to registerany or all of the Pledged Securities in the name of Pledgee or in the name of Pledgee’s nominee andPledgee may complete, in any manner Pledgee may deem expedient, any and all stock powers,assignments or other documents heretofore or hereafter executed in blank by Pledgor and deliveredto Pledgee. After said instruction, and without further notice, Pledgee shall have the exclusiveright to exercise all voting and corporate rights with respect to the Pledged Securities and otherCollateral, and exercise any and all rights of conversion, redemption, exchange, subscription orany other rights, privileges, or options pertaining to any shares of the Pledged Securities orother Collateral as if Pledgee were the absolute owner thereof, including, without limitation, theright to exchange, in its discretion, any and all of the Pledged Securities and other Collateralupon any merger, consolidation, reorganization, recapitalization or other readjustment with respectthereto. Upon the exercise of any such rights, privileges or options by Pledgee, Pledgee shallhave the right to deposit and deliver any and all of the Pledged Securities and other Collateral toany committee, depository, transfer agent, registrar or other designated agency upon such terms andconditions as Pledgee may determine, all without liability, except to account for property actuallyreceived by Pledgee. However, Pledgee shall have no duty to exercise any of the aforesaid rights,privileges or options (all of which are exercisable in the sole discretion of Pledgee) and shallnot be responsible for any failure to do so or delay in doing so.     (b) In addition to all the rights and remedies of a secured party under the Uniform CommercialCode or other applicable law, Pledgee shall have the right, at any time and without demand ofperformance or other demand, advertisement or notice of any kind (except the notice specified belowof time and place of public or private sale) to or upon Pledgor or any other person (all and eachof which demands, advertisements and/or notices are hereby expressly waived to the extent permittedby applicable law), to proceed forthwith to collect, redeem, recover, receive, appropriate,realize, sell, or otherwise dispose of and deliver the Collateral or any part thereof in one ormore lots at public or private sale or sales at any exchange, broker’s board or at any of Pledgee’soffices or elsewhere at such prices and on such terms as Pledgee may deem best. The foregoingdisposition(s) may be for cash or on credit or for future delivery without assumption of any creditrisk, with Pledgee having the right to purchase all or any part of the Collateral so sold at anysuch sale or sales, public or private, free of any right or equity of redemption in Pledgor, whichright or equity is hereby expressly waived or released by Pledgor. The proceeds of any suchcollection, redemption, recovery, receipt, appropriation, realization, sale or other disposition,after deducting all costs and expenses of every kind incurred relative thereto or incidental to thecare, safekeeping or otherwise of any and all Collateral or in any way relating to the rights ofPledgee hereunder, including reasonable attorneys’ fees and legal expenses, shall be applied firstto the satisfaction of the Obligations (in such order as Pledgee may elect and whether or not due)and then to the payment of any other amounts required by applicable law, including Section9-615(a)(3) of the Uniform Commercial Code, with Pledgor to be and remain liable for anydeficiency. Pledgor shall be liable to Pledgee for the payment on demand of all such costs andexpenses, together with interest at the highest rate then applicable to the Obligations set forthin the Loan Agreement, and any reasonable attorneys’ fees and legal expenses incurred by Pledgee.Any such amounts shall constitute Obligations under the Loan Agreement and may be charged byPledgee to the loan account of Pledgor maintained by Pledgee at its option. Pledgor agrees thatten (10) days prior written notice by Pledgee designating the place and time of any public sale orof the time after which any private sale or other intended
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disposition of any or all of the Collateral is to be made, is reasonable notification of suchmatters.     (c) Pledgor recognizes that Pledgee may be unable to effect a public sale of all or part ofthe Collateral by reason of certain prohibitions contained in the Securities Act of 1933, asamended, as now or hereafter in effect or in applicable Blue Sky or other state securities law, asnow or hereafter in effect, but may be compelled to resort to one or more private sales to arestricted group of purchasers who will be obliged to agree, among other things, to acquire suchCollateral for their own account for investment and not with a view to the distribution or resalethereof. If at the time of any sale of the Collateral or any part thereof, the same shall not, forany reason whatsoever, be effectively registered (if required) under the Securities Act of 1933 (orother applicable state securities law), as then in effect, Pledgee in its sole and absolutediscretion is authorized to sell such Collateral or such part thereof by private sale in suchmanner and under such circumstances as Pledgee or its counsel may deem necessary or advisable inorder that such sale may legally be effected without registration. Pledgor agrees that privatesales so made may be at prices and other terms less favorable to the seller than if such Collateralwere sold at public sale, and that Pledgee has no obligation to delay the sale of any suchCollateral for the period of time necessary to permit any Issuer, even if such Issuer would agree,to register such Collateral for public sale under such applicable securities laws.     (d) All of the rights and remedies of Pledgee, including, but not limited to, the foregoingand those otherwise arising under this Pledge Agreement, the Loan Agreement and the other FinancingAgreements, the instruments comprising the Collateral, applicable law or otherwise, shall becumulative and not exclusive and shall be enforceable alternatively, successively or concurrentlyas Pledgee may deem expedient. No failure or delay on the part of Pledgee in exercising any of itsoptions, powers or rights or partial or single exercise thereof, shall constitute a waiver of suchoption, power or right.     6.JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW     (a) The validity, interpretation and enforcement of this Pledge Agreement and the otherFinancing Agreements and any dispute arising out of the relationship between the parties hereto,whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the Stateof North Carolina but excluding any principles of conflicts of law or other rule of law that wouldresult in the application of the law of any jurisdiction other than the laws of the State of NorthCarolina.     (b) Pledgor irrevocably consents and submits to the non-exclusive jurisdiction of the SuperiorCourt of the State of North Carolina, Mecklenburg County and the United States District Court forthe Western District of North Carolina and waives any objection based on venue or forumnonconveniens with respect to any action instituted therein arising under thisPledge Agreement or any of the other Financing Agreements or in any way connected with or relatedor incidental to the dealings of the parties hereto in respect of this Pledge Agreement or theother Financing Agreements or the transactions related hereto or thereto, in each case whether nowexisting or hereafter arising, and whether in contract, tort, equity or otherwise, and agrees thatany dispute with respect to any such matters shall be heard only in the courts described above
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(except that Pledgee shall have the right to bring any action or proceeding against Pledgor orits property in the courts of any other jurisdiction which Pledgee deems necessary or appropriatein order to realize on the Collateral or to otherwise enforce its rights against Pledgor or itsproperty).     (c) Pledgor hereby waives personal service of any and all process upon it and consents thatall such service of process may be made by certified mail (return receipt requested) directed toits address and to the attention of the person set forth herein and service so made shall be deemedto be completed five (5) days after the same shall have been so deposited in the U.S. mails, or, atPledgee’s option, by service upon Pledgor in any other manner provided under the rules of any suchcourts. Within thirty (30) days after such service, Pledgor shall appear in answer to suchprocess, failing which Pledgor shall be deemed in default and judgment may be entered by Pledgeeagainst Pledgor for the amount of the claim and other relief requested.     (d) PLEDGOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OFACTION (i) ARISING UNDER THIS PLEDGE AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) INANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF PLEDGOR AND PLEDGEE IN RESPECTOF THIS PLEDGE AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATEDHERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT,TORT, EQUITY OR OTHERWISE. PLEDGOR HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTIONOR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT PLEDGEE MAY FILE ANORIGINAL COUNTERPART OF A COPY OF THIS PLEDGE AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THECONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.     (e) Pledgee shall not have any liability to Pledgor (whether in tort, contract, equity orotherwise) for losses suffered by Pledgor in connection with, arising out of, or in any way relatedto the transactions or relationships contemplated by this Pledge Agreement, or any act, omission orevent occurring in connection herewith, unless it is determined by a final and non-appealablejudgment or court order binding on Pledgee, that the losses were the result of acts or omissionsconstituting gross negligence or willful misconduct. In any such litigation, Pledgee shall beentitled to the benefit of the rebuttable presumption that it acted in good faith and with theexercise of ordinary care in the performance by it of the terms of this Pledge Agreement.     7. MISCELLANEOUS     (a) Pledgor agrees that at any time and from time to time upon the written request of Pledgee,Pledgor shall execute and deliver such further documents, including, but not limited to,irrevocable proxies or stock powers, in form satisfactory to Pledgee, and will take or cause to betaken such further acts as Pledgee may request in order to effect the purposes of this PledgeAgreement and perfect or continue the perfection of the security interest in the Collateral grantedto Pledgee hereunder.     (b) Beyond the exercise of reasonable care to assure the safe custody of the Collateral
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(whether such custody is exercised by Pledgee, or Pledgee’s nominee, agent or bailee) Pledgeeor Pledgee’s nominee agent or bailee shall have no duty or liability to protect or preserve anyrights pertaining thereto and shall be relieved of all responsibility for the Collateral uponsurrendering it to Pledgor or foreclosure with respect thereto.     (c) All notices, requests and demands to or upon the respective parties hereto shall be inwriting and shall be deemed to have been duly given or made: if delivered in person, immediatelyupon delivery; if by telex, telegram or facsimile transmission, immediately upon sending and uponconfirmation of receipt; if by nationally recognized overnight courier service with instructions todeliver the next business day, one (1) business day after sending; and if by registered orcertified mail, return receipt requested, five (5) days after mailing. All notices, requests anddemands upon the parties are to be given to the following addresses (or to such other address asany party may designate by notice in accordance with this Section):   If to Pledgor: US LEC Corp.