SECURITY
AGREEMENT

    


    This Security Agreement (hereinafter
referred to as the “Agreement”) is made this 21st day of
January, 2011, by and between LIGHTYEAR NETWORK SOLUTIONS, LLC, a Kentucky
limited liability company, having an address of 1901 Eastpoint Parkway,
Louisville, Kentucky  40223 (hereinafter referred to as “Pledgor”),
and FIRST SAVINGS BANK, F.S.B., having an address of 501 East Lewis and Clark
Parkway, Clarksville, Indiana  47129 (hereinafter referred to as
“Secured Party”).

    


    RECITALS:

    


    A.           The
Collateral.  For purposes of this Agreement, the term
“Collateral” means and includes the following:

    


    1.           That
certain Limited Access Lockbox Account of Pledgor, Account No. 7380314745 (hereinafter referred to as the
“Lockbox Account”), held with Fifth Third Bank, an Ohio corporation (hereinafter
referred to as the “Fifth Third”).

    


    2.           That
certain business operating account of Pledgor, Account No. 7380314950 (hereinafter referred to as the “Operating
Account”), held with Fifth Third.

    


    3.           All
goods, instruments, documents, documents of title, policies and certificates of
insurance, general intangibles (including without limitation choses in action,
tax refunds and insurance proceeds) chattel paper, deposits, money, cash or
other property of Pledgor now owned or hereafter acquired; including, but not
limited to all trade names, trademarks, trade secrets, goodwill, patents, patent
applications, copyrights, deposit accounts, licenses and
franchises.

    


    4.           All
cash and non-cash proceeds of all the foregoing, all products of the foregoing,
and all substitutions.

    


    B.           Secured Indebtedness and
Liabilities.  This Agreement secures:

    


    1.           That
certain promissory note dated January 21, 2011, in the principal amount of
$2,000,000.00, maturing on January 21, 2013, executed and delivered by Lightyear
Network Solutions Inc., a Nevada corporation (hereinafter referred to as
“Debtor”) to Secured Party (hereinafter referred to as the “Note”);

    


    2.           Those
certain guaranties from Pledgor, Ronald L. Carmicle, and J. Sherman Henderson
(hereinafter referred to as the “Guarantors”), in favor of Secured Party
securing the Note (hereinafter referred to, collectively, as the
“Guaranty”);

    


    3.           
All sums payable on or by reason of the Note and/or Guaranty identified above
and any other instrument securing payment of the Note and the performance and
observance of all of the provisions hereof or any instrument securing payment of
said promissory note;


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    4.           All
other present and future, direct and indirect obligations and liabilities of
Debtor and/or Pledgor to Secured Party or any of its affiliates up to a maximum
aggregate indebtedness of $2,000,000.00; and

    


    5.           Any
extensions, renewals, modifications and replacements of the foregoing, without
limit as to number or frequency

    


    (hereinafter
referred to as the “Indebtedness”).  The Indebtedness is further
secured by, inter alia,
(i) a certain Lockbox and Account Control Agreement dated as of even date
herewith (hereinafter referred to as the “Control Agreement”) covering the
Lockbox Account, executed by and between Pledgor, Secured Party, and Fifth
Third; (ii) the Guaranty; and (iii) certain other security instruments which may
be executed in connection with, or as security for, the Indebtedness (all of the
above-described being hereinafter referred to as the “Security
Documents”).

    


    In addition to the above-described
Indebtedness, this Agreement shall further secure (i) the performance of all of
the covenants of Debtor and/or Pledgor and the payment of all sums payable by
Debtor and/or Pledgor, under the terms of this Agreement, the Indebtedness,
and/or the Security Documents; (ii) the repayment of all sums advanced by
Secured Party to protect its interest in the Collateral or to perform any
covenants of Pledgor hereunder which Pledgor shall have failed to perform and
interest at the Default Rate on such sums advanced by Secured Party; (iii) any
and all now existing and future obligations of Debtor and/or Pledgor to Secured
Party, however created, evidenced or acquired, whether direct or indirect,
absolute or contingent, matured or unmatured, primary or secondary, or with
joint, several, or joint and several liability, including future obligations and
advances under the Note to the same extent as if such future obligations and
advances were made on the date of execution of this Agreement (it being
understood that Secured Party is not under any obligation to make any future
advances except as specifically set forth in the notes comprising the
Indebtedness); (iv) any and all modifications, extensions, renewals,
substitutions and replacements of any Indebtedness or obligation hereinabove
described; and (v) costs of collection of all such sums, including, but not
limited to, attorney fees and court costs.  All of the foregoing are
sometimes hereinafter called the “Liabilities”.

    


    “Default Rate”, for purposes of this
Agreement, shall mean the interest rate applicable under the notes comprising
the Indebtedness after maturity or the occurrence of an Event of
Default.


    
      
         


      

      
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    GRANT

    


    NOW,
THEREFORE, for and in consideration of Secured Party making the loan described
in the Indebtedness to or for the benefit of Debtor, which loan is also of
direct or indirect benefit to Pledgor, and for the purpose of securing the
Indebtedness and the Liabilities and the performance by Debtor and/or Pledgor of
their obligations hereunder, and in consideration of the various agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by Pledgor, PLEDGOR HEREBY WARRANTS,
CONVEYS, GRANTS, AND ASSIGNS TO THE SECURED PARTY AND ITS SUCCESSORS AND ASSIGNS
FOREVER A CONTINUING SECURITY INTEREST IN AND TO ALL OF THE
COLLATERAL.  Notwithstanding anything to the contrary contained in
this Agreement, upon payment in full of the Indebtedness and performance of all
obligations under the Loan Documents, this Agreement shall terminate and be of
no further force and effect and the Secured Party shall thereupon terminate its
security interest in the Collateral.

     

    COVENANTS AND AGREEMENTS OF
PLEDGOR

    


    To further secure the payment of the
Indebtedness and the performance and satisfaction of the Liabilities, Pledgor
hereby represents, warrants, covenants, and agrees as follows:

    


    1.           Title.  Pledgor
has or will acquire, and will maintain full and absolute title in Pledgor to the
Collateral, except for the lien created hereby, and the lien created by that
certain Security Agreement dated March 17, 2010, by and between Pledgor and
Secured Party and that certain Lockbox and Account Control Agreement dated as of
March 17, 2010, by and between Pledgor, Secured Party, and Fifth Third Bank, and
Pledgor has good right to subject the Collateral to the security interest
granted by this Security Agreement.  Except for Collateral in the
possession of the Secured Party or in possession of a third party per agreement
of Pledgor and Secured Party, Pledgor has and will maintain full possession of
the Collateral and will defend it against all adverse claims.

    


    2.           Perfection and
Priority.  Upon the execution and delivery of this Agreement by
Pledgor, and upon the Secured
Party filing of appropriate financing statements with the appropriate
governmental agencies and payment of the
appropriate recording fees, the execution and delivery of investment
account control agreements, and/or, as applicable, Secured Party’s taking
possession or control of the Collateral, Secured Party will have
a perfected security interest in and to the Collateral having first priority
in such Collateral.

    


    3.           Protection and Use of
Collateral.  Pledgor shall not, without the prior written
consent of Secured Party, sell, assign, transfer, or otherwise dispose of any of
the Collateral or any of Pledgor’s right, title or interest therein, and shall
not otherwise do or permit anything to be done or occur that may impair the
Collateral as security hereunder.  Moreover, Pledgor shall maintain,
handle, and otherwise deal with the Collateral as provided in, and subject to
the limitations of, the Control Agreement, including any addenda
thereto.  Said separate Control Agreement, and the rights of Secured
Party and obligations of Pledgor provided therein, shall be deemed to supplement
and add to this Agreement.  In the event of any conflict between the
provisions of this Agreement and said separate Control Agreement, the terms of
said Control Agreement shall prevail.


    
      
         


      

      
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    4.           Financing Statements,
Certificates, Etc.  Pledgor will do such acts as Secured Party
may deem necessary or appropriate to establish and maintain in Secured Party a
valid first lien and security interest in the Collateral to secure full and
prompt performance and payment of the obligations.  Pledgor authorizes
Secured Party, at the expense of Pledgor, to sign and file, without Pledgor’s
signature, such financing and continuation statements, amendments, and
supplements thereto, notices to third parties and other documents which Secured
Party may from time to time deem necessary to perfect, preserve and protect its
security interest in the Collateral, including, without limitation, such
financing statements as may be necessary or appropriate, in the reasonable
opinion of the Secured Party, to perfect and protect Secured Party’s security
interest in such of the Collateral as may be or be deemed to be or constitute
fixtures under Indiana law.  Pledgor agrees to execute and deliver to
Secured Party any such financing statements and documents and to furnish and
endorse such other instruments, certificates, certificates of title with Secured
Party’s security interest noted thereon or executed applications for said
certificates as Secured Party may from time to time request in order to
evidence, perfect, preserve and protect its security interest in the
Collateral.  Pledgor agrees to prepare and execute such notices to
third parties regarding the security interest in the Collateral created by this
Agreement as Secured Party deems advisable to perfect, preserve, and protect the
security interest.  Pledgor, from time to time, and at any time, upon
request by Secured Party, will deliver to Secured Party certified schedules, in
such form as may be specified by Secured Party, identifying the Collateral, or
such part thereof as may be specified by Secured Party, together with such
supporting documents and information as Secured Party reasonably may
request.

    


    5.           Taxes and
Assessments.  Pledgor agrees to pay promptly when due all
taxes, assessments, and governmental charges upon or against Pledgor for the
Collateral, in each case before the same become delinquent and before penalties
accrue thereon, unless and to the extent that the same are being contested in
good faith by appropriate proceedings and for which Pledgor has established
adequate reserves.

    


    6.           Other Obligations and
Costs.  In the event Pledgor fails to pay any taxes,
assessments, charges, or other costs or expenses which Pledgor is required to
pay in order to comply with the terms hereof, Secured Party may, but shall have
not duty to, make expenditures for any and all such purposes on Pledgor’s
behalf.  Secured Party may also, but shall have no duty to, perform on
behalf of Pledgor any agreement or obligation of Pledgor hereunder which Pledgor
shall have failed to perform.  Pledgor will forthwith reimburse
Secured Party for all costs and expenses of Secured Party in connection with or
relating to any such payment or performance, including reasonable attorney’s
fees, which amounts shall constitute part of the Liabilities due to Secured
Party from Debtor and/or Pledgor, shall be secured hereby and shall bear
interest at the Default Rate.


    
      
         


      

      
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    7.           Events of
Default/Acceleration.  Upon the occurrence of any of the
following (hereinafter referred to as “Events of Default”), Secured Party shall
be entitled to exercise its remedies under this Agreement or as otherwise
provided by law:  (1) Debtor and/or Pledgor fails to pay when due any
amount payable under the notes comprising the Indebtedness, the Security
Documents, or any agreement evidencing the Indebtedness; (2) Debtor and/or
Pledgor (a) fails to observe or perform any other agreement evidencing or
securing the Indebtedness, including, but not limited to the Note comprising the
Indebtedness, the Security Documents or (b) make any materially incorrect or
misleading representation in any financial statement or other information
delivered to the Secured Party; (3) Debtor and/or Pledgor defaults under the
terms of the Note comprising the Indebtedness, Security Documents, or any other
note, loan agreement, mortgage, security agreement, or document executed as part
of the Indebtedness transaction or any guaranty of the Indebtedness becomes
unenforceable in whole or in part, or any guarantor fails to promptly perform
under such a guaranty; (4) Debtor and/or Pledgor fails to pay when due any
amount payable under any note or agreement evidencing debt to Secured Party or
defaults under the terms of any agreement or instrument relating to or securing
any debt for borrowed money owing to Secured Party; (5) Debtor and/or Pledgor
becomes insolvent or unable to pay its debts as they become due; (6) Debtor
and/or Pledgor (a) makes an assignment for the benefit of creditors, (b)
consents to the appointment of a custodian, receiver, or trustee for itself or
for a substantial part of its assets, or (c) commences any proceeding under any
bankruptcy, reorganization, liquidation, insolvency, or similar laws of any
jurisdiction; (7) a custodian, receiver, or trustee is appointed for Debtor
and/or Pledgor or for a substantial part of his assets without the consent of
the party against which the appointment is made and is not removed within sixty
(60) days after such appointment; or Debtor and/or Pledgor consents to such
appointment; (8) proceedings are commenced against Debtor and/or Pledgor under
any bankruptcy, reorganization, liquidation, or similar laws of any
jurisdiction, and such proceedings remain undismissed for sixty (60) days after
commencement; or Debtor and/or Pledgor consents to the commencement of such
proceedings; (9) any judgment having a material affect on Debtor’s and/or
Pledgor’s assets is entered against Debtor and/or Pledgor, or any attachment,
levy, or garnishment is issued against any property of Debtor and/or Pledgor;
(10) any proceedings are instituted for the foreclosure or collection of any
mortgage, judgment, or lien affecting the Collateral; (11) Debtor and/or Pledgor
sells, transfers, or hypothecates or attempts to sell, transfer, or hypothecate
all or any part of the Collateral except as provided in this Security Agreement
without the prior written consent of Secured Party; (12) Debtor and/or Pledgor
dies; (13) Debtor and/or Pledgor, as applicable, without Secured Party’s written
consent, (a) is dissolved or its existence is terminated, (b) merges or
consolidates with any third party, (c) sells a material part of its assets or
business outside the ordinary course of its business, or (d) agrees to do any of
the foregoing; (14) there is a substantial change in the existing or prospective
financial condition of Debtor and/or Pledgor which Secured Party in good faith
determines to be materially adverse; or (15) if at any time or for any reason
Secured Party reasonably and in good faith
deems itself insecure.

    


    8.           Remedies Upon
Default.  Time is of the essence under this Security
Agreement.  Upon the occurrence of any Event of Default and the
expiration of any applicable grace period provided in the notes comprising the
Indebtedness and/or Security Documents and at any time thereafter, the Secured
Party shall be entitled, without notice to Debtor and/or Pledgor, to declare all
of the Indebtedness to be immediately due and payable, whereupon the same shall
become immediately due and payable, without presentation, demand, protest,
notice of protest, or other notice of dishonor of any kind, all of which are
hereby expressly waived.  In addition, upon the occurrence of any
Event of Default under this Security Agreement and the expiration of any
applicable grace period provided in the notes comprising the Indebtedness, and
at any time thereafter, Secured Party shall have all the remedies of a secured
party under the Indiana Uniform Commercial Code and as otherwise provided by
applicable law, including but not limited to the following:


    
      
         


      

      
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    (a)           Secured
Party may take possession of the Collateral and may use it after having done
so.  For purposes of taking possession, Secured Party may enter upon
any premises on which the Collateral may be situated without legal process and
remove the Collateral.  Pledgor hereby releases Secured Party from any
claims arising from such removal and shall hold Secured Party harmless from any
liability resulting therefrom, except for liability arising or resulting from
Secured Party’s gross negligence or willful intent.

    


    (b)           Secured
Party may notify any person indebted to Pledgor to pay Secured Party directly
any amounts due Pledgor under an account receivable, general intangible,
investment account, instrument or chattel paper, and Secured Party may enforce
payment of the same through legal proceedings, or otherwise, in its own name or
in the name of Pledgor.

    


    (c)           Secured
Party may require Pledgor to assemble the Collateral and make it available at a
place to be designated by Secured Party.

    


    (d)           Unless
the Collateral threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Secured Party shall give Pledgor at
least ten (10) days prior written notice of the time and place of any public
sale thereof or of the time after which any private sale or any other intended
disposition thereof is to be made.  Pledgor stipulates and agrees that
a disposition complying with this subparagraph shall be deemed a commercially
reasonable disposition of the Collateral by Secured Party.  The
expenses of retaking, holding, preparing for sale, selling, and the like, and
reasonable attorney’s fees and expenses incurred by Secured Party, may be paid
from the proceeds of the disposition.

    


    (e)           Pledgor
agrees that Secured Party may obtain the appointment of a receiver respecting
the Collateral upon such notice as may be required by applicable law and without
notice if permitted by such law, and may obtain immediate possession thereof in
replevin.

    


    All
remedies of Secured Party shall be cumulative to the full extent provided by
law.  Pursuit by Secured Party of certain judicial or other remedies
shall not abate nor bar resort to other remedies with respect to the Collateral,
and pursuit of certain remedies with respect to all or some of the Collateral
shall not bar other remedies with respect to the Indebtedness or the Liabilities
or to other portions of the Collateral.  Secured Party may exercise
its rights to the Collateral without resorting or regard to other collateral or
sources of security or reimbursement for the Indebtedness or the
Liabilities.

    


    9.           Nonwaiver, Expenses,
Proceeds of Collateral.  No waiver by Secured Party of any of
its rights or of any Event of Default shall be effective unless in writing, and
in no event shall it operate as a waiver of any other of its rights or any other
Event of Default nor of the same rights or Event of Default on any future
occasion.  Pledgor shall pay to Secured Party on demand any and all
expenses, including reasonable attorney’s fees, incurred or paid by Secured
Party in perfecting, protecting, or enforcing its rights and interests with
respect to the Collateral.  After deducting all of said expenses the
residue of any proceeds of collection or sale of the Collateral shall be applied
to the payment of the Indebtedness and the Liabilities and Debtor shall remain
fully liable for any deficiency.


    
      
         


      

      
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    10.           Applicable
Law.  The Uniform Commercial Code as codified in the State of
Indiana at Indiana Code 26-1-1 et seq. (hereinafter referred
to as the “UCC”) shall govern the settlement, perfection and the effect of
attachment and perfection of the Secured Party’s security interest in the
Collateral and the rights, duties and obligations of the Secured Party and the
Pledgor with respect to the Collateral (whether or not the UCC applies to the
Collateral).  Should applicable law confer any rights or impose any
duties inconsistent with or in addition to any of the provisions of this
Security Agreement, the affected provisions of this Security Agreement shall be
considered amended to conform to such law, but all other provisions hereof shall
remain in full force and effect without modification.  This Security
Agreement shall be construed under the laws of the State of
Indiana.

     

    11.           Successors in
Interest.  This Security Agreement shall be binding upon and
inure to the benefit of Pledgor and Secured Party and their respective
successors, assigns, and legal representatives.

    


    12.           Notices.  Any
notice required to be given by any party to the other under the provisions of
this Security Agreement or under applicable law shall be given to Pledgor and
shall be given to Secured Party, at the address set forth in the initial
paragraph of this Agreement.

     

    [SPACE
INTENTIONALLY BLANK; SIGNATURES ON FOLLOWING PAGE]


    
      
         


      

      
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    IN WITNESS WHEREOF, Pledgor has
executed and delivered this Agreement the day and date first written
above.

    


    
      
        
          
            	
                    “PLEDGOR”

                  
	 
      
	
                    LIGHTYEAR
      NETWORK SOLUTIONS, LLC

                  
	
                    a
      Kentucky limited liability company

                  
	 
      	 
      
	
                    By:

                  	
                    /S/ J. Sherman Henderson,
    III,

                  
	 
      	
                    J.
      Sherman Henderson, III,
CEO

                  


          

        

      

    

    


    Prepared
by:

    


    Keith D.
Mull

    MULL
& HEINZ, LLC

    2867
Charlestown Road

    New
Albany, Indiana  47150

    (812)
206-2315


    
      
         


      

      
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