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Exhibit 10.2
 EXECUTION COPY
 
 COLLATERAL AGREEMENT
   CONSOLIDATED COMMUNICATIONS HOLDINGS, INC.,
CONSOLIDATED COMMUNICATIONS, INC.,
CONSOLIDATED COMMUNICATIONS ACQUISITION TEXAS, INC.,
FORT PITT ACQUISITION SUB INC.,
   WACHOVIA
BANK, NATIONAL ASSOCIATION,




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Table of Contents
 PageARTICLE I DEFINED TERMS
    
    
    2SECTION 1.1
    
    Terms Defined in the Uniform Commercial Code
    
    
    2SECTION 1.2
    
    Definitions
    
    
    2SECTION 1.3
    
    Other Definitional Provisions
    
    
    6ARTICLE II SECURITY INTEREST
    
    
    7SECTION 2.1
    
    Grant of Security Interest
    
    
    7SECTION 2.2
    
    Partnership/LLC Interests
    
    
    8SECTION 2.3
    
    Grantors Remain Liable
    
    
    9ARTICLE III REPRESENTATIONS AND WARRANTIES
    
    
    10SECTION 3.1
    
    Organization, etc
    
    
    10SECTION 3.2
    
    Due Authorization, Non-Contravention, etc
    
    
    10SECTION 3.3
    
    Government Approval, Regulation, etc
    
    
    10SECTION 3.4
    
    Perfected First Priority Liens
    
    
    10SECTION 3.5
    
    Title, No Other Liens
    
    
    10SECTION 3.6
    
    State of Organization; Location of Inventory, Equipment and Fixtures; other Information
    
    
    11SECTION 3.7
    
    Accounts
    
    
    11SECTION 3.8
    
    Chattel Paper
    
    
    11SECTION 3.9
    
    Commercial Tort Claims
    
    
    11SECTION 3.10
    
    Deposit Accounts and Securities Accounts
    
    
    11SECTION 3.11
    
    Intellectual Property
    
    
    11SECTION 3.12
    
    Inventory
    
    
    12SECTION 3.13
    
    Investment Property; Partnership/LLC Interests
    
    
    12SECTION 3.14
    
    Instruments
    
    
    12SECTION 3.15
    
    Government Contracts
    
    
    12SECTION 3.16
    
    Aircraft
    
    
    12ARTICLE IV COVENANTS
    
    
    12SECTION 4.1
    
    Maintenance of Perfected Security Interest; Further Information
    
    
    13SECTION 4.2
    
    Maintenance of Insurance
    
    
    13SECTION 4.3
    
    Changes in Locations; Changes in Name or Structure
    
    
    13SECTION 4.4
    
    Required Notifications
    
    
    13SECTION 4.5
    
    Delivery Covenants
    
    
    13SECTION 4.6
    
    Control Covenants
    
    
    14SECTION 4.7
    
    Filing Covenants
    
    
    15SECTION 4.8
    
    Accounts
    
    
    15SECTION 4.9
    
    Intellectual Property
    
    
    15SECTION 4.10
    
    Investment Property; Partnership/LLC Interests
    
    
    16SECTION 4.11
    
    Equipment
    
    
    16SECTION 4.12
    
    Vehicles
    
    
    17SECTION 4.13
    
    Government Contracts
    
    
    17SECTION 4.14
    
    Special Property
    
    
    17SECTION 4.15
    
    Further Assurances
    
    
    17ARTICLE V REMEDIAL PROVISIONS
    
    
    17SECTION 5.1
    
    General Remedies
    
    
    17
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PageSECTION 5.2
    
    Specific Remedies
    
    
    19SECTION 5.3
    
    Registration Rights
    
    
    21SECTION 5.4
    
    Application of Proceeds
    
    
    22SECTION 5.5
    
    Waiver, Deficiency
    
    
    23ARTICLE VI THE ADMINISTRATIVE AGENT
    
    
    23SECTION 6.1
    
    Appointment of Administrative Agent as Attorney-In-Fact
    
    
    23SECTION 6.2
    
    Duty of Administrative Agent
    
    
    24SECTION 6.3
    
    Authority of Administrative Agent
    
    
    25SECTION 6.4
    
    Intercreditor Agreements
    
    
    25SECTION 6.5
    
    Limitations on Responsibility of Administrative Agent
    
    
    26SECTION 6.6
    
    Reliance by Administrative Agent
    
    
    28SECTION 6.7
    
    Resignation and Removal of the Administrative Agent
    
    
    28ARTICLE VII MISCELLANEOUS
    
    
    29SECTION 7.1
    
    Notices
    
    
    29SECTION 7.2
    
    Amendments in Writing
    
    
    29SECTION 7.3
    
    Expenses, Indemnification, Waiver of Consequential Damages, etc
    
    
    29SECTION 7.4
    
    Right of Set Off
    
    
    29SECTION 7.5
    
    Governing Law; Jurisdiction; Venue; Service of Process
    
    
    30SECTION 7.6
    
    Waiver of Jury Trial
    
    
    30SECTION 7.7
    
    Injunctive Relief
    
    
    31SECTION 7.8
    
    No Waiver by Course of Conduct, Cumulative Remedies
    
    
    31SECTION 7.9
    
    Successors and Assigns
    
    
    31SECTION 7.10
    
    Survival of Indemnities
    
    
    31SECTION 7.11
    
    Titles and Captions
    
    
    31SECTION 7.12
    
    Severability of Provisions
    
    
    31SECTION 7.13
    
    Counterparts
    
    
    32SECTION 7.14
    
    Integration
    
    
    32SECTION 7.15
    
    Advice of Counsel; No Strict Construction
    
    
    32SECTION 7.16
    
    Acknowledgements
    
    
    32SECTION 7.17
    
    Releases
    
    
    33SECTION 7.18
    
    Additional Grantors
    
    
    33SECTION 7.19
    
    Powers of Attorney
    
    
    33
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SCHEDULES:Schedule 3.6
    
    Exact Legal Name; Jurisdiction of Organization; Taxpayer Identification Number; Registered Organization Number; Mailing Address; Chief
Executive Office and other LocationsSchedule 3.9
    
    Commercial Tort ClaimsSchedule 3.10
    
    Deposit AccountsSchedule 3.11
    
    Intellectual PropertySchedule 3.13
    
    Investment Property and Partnership/LLC InterestsSchedule 3.14
    
    Instruments
 iii




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Agreement , Holdings CCI Borrower TXU
Borrower Merger
Sub Borrowers Grantors Administrative Agent
 STATEMENT OF PURPOSE
 Credit
Agreement Lenders Guaranty
Agreement Guarantors
 Indenture Indenture Trustee




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DEFINED TERMS
 Terms Defined in the Uniform Commercial Code.
 Accession Account Account Debtor Authenticate Certificated Security Chattel Paper Commercial Tort Claim Deposit Account Document Electronic Chattel Paper Equipment Farm Products Fixtures General Intangible Instrument Inventory Investment Company Security Investment
Property Letter-of-Credit Rights Proceeds Record Registered Organization Securities Account Securities Entitlement Securities Intermediary Security Supporting Obligation Tangible Chattel Paper Uncertificated Security
  Definitions
 Additional Grantor Section 7.18 Section 5.16
 Administrative Agent
 Agreement
 Assignment of Claims Act
 Borrowers
 Collateral Section 2.1
 Collateral Account Section 5.2
 Control
 Controlled Depository Section 4.6
 Controlled Intermediary Section 4.6
 Copyrights Schedule 3.11
 2




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Copyright Licenses Schedule
3.11
 Credit Agreement
 Credit Agreement Obligations
   Effective Endorsement and Assignment
 Excluded Deposit Account
 Excluded Investment Property
 Excluded Partnership/LLC
 Excluded Partnership/LLC Agreement
 FCC
 3




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Government Contract
 Grantors
 Guarantors
 Guaranty Agreement
 Indenture
 Indenture Obligations
 Indenture Trustee
 Intellectual Property
 Issuer
 Joint Venture Partner
 Lenders
 Partnership/LLC Agreement Section 2.2(a)
 Partnership/LLC Interests
 4




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Patents Schedule 3.11
 Patent License Schedule 3.11
 PUC
 Restricted Securities Collateral Section
5.3
 Secured Obligations
 Secured Parties
 Securities Act
 Security Interests Article
II
 Special Property
   5




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Telecommunications System
 Trademarks Schedule 3.11
 Trademark License Schedule 3.11
 Vehicles
 Other Definitional Provisions
 6




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SECURITY INTEREST
 Grant of Security Interest Collateral
    Schedule 3.9
            7




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provided provided provided further
  Partnership/LLC Interests.
 Partnership/LLC Agreement Section 2.2
 8




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Section
2.2 Section 2.2
 Section 2.2(a) Section 2.2(b)
 Grantors Remain Liable
 9




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REPRESENTATIONS AND WARRANTIES
  Organization, etc.
 Due Authorization, Non-Contravention, etc. Schedule 3.02(c)
 Government Approval, Regulation, etc. Schedule
3.03 de
jure de facto de jure de facto
 Perfected First Priority Liens Schedule 3.6
 Title, No Other Liens
 10




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State of Organization; Location of Inventory, Equipment and Fixtures; other
Information
 Schedule 3.6 Section 4.3
 Schedule 3.6 Section 4.3 Schedule 3.6 Section 4.3
 Schedule 3.6
 Schedule 3.6 Schedule 3.6 Schedule 3.6
 Accounts
 Chattel Paper
 Commercial Tort Claims Schedule 3.9
 Deposit Accounts and Securities Accounts Schedule 3.10
 Intellectual Property
 Schedule
3.11 Section 4.3
 11




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Schedule 3.11 Section 4.3
 Inventory
 Investment Property; Partnership/LLC Interests
 Schedule 3.13 Section 4.3
   Instruments
 Government Contracts
 Aircraft
  COVENANTS
 Section
7.2
 12




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Maintenance of Perfected Security Interest; Further Information
   Maintenance of Insurance Section 5.04
 Changes in Locations; Changes in Name or Structure
 Schedule 3.10
 Schedule 3.13
 Schedule 3.6
  Required Notifications
 Delivery Covenants
 13




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Control Covenants
 Controlled Depository Controlled Intermediary
  Section 4.6(a) Section 4.6(b) Excess Collateral provided Section 4.6(c)
 14




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Filing Covenants
 Accounts
 Intellectual Property
   15




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Investment Property; Partnership/LLC Interests
   Equipment
 16




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Vehicles
 Government Contracts
 Special Property
 Further Assurances
  REMEDIAL PROVISIONS
 General Remedies
  17




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18




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Specific Remedies
 provided
    Collateral Account
 19




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Section 5.4
 provided Section 5.2(b)(iv)
 20




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Section 5.2(b)
 Registration Rights
 Restricted Securities
Collateral
  21




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Section 5.3 Section 5.3
 Application of Proceeds Article V
  pro rata
   22




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Waiver, Deficiency
  THE ADMINISTRATIVE AGENT
 Appointment of Administrative Agent as Attorney-In-Fact
       23




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Section 6.1(a)
  Section 6.1(a)
 Duty of Administrative Agent
 24




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Authority of Administrative Agent
 Intercreditor Agreements
 Section 6.4
  Sections 7.02 7.03 7.04 9.02
  25




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(e) THE ADMINISTRATIVE AGENT HAS CONSENTED TO SERVE AS ADMINISTRATIVE AGENT HEREUNDER ON THE
EXPRESS UNDERSTANDING, THAT THE INDENTURE TRUSTEE, BY ACCEPTING THE BENEFITS OF THIS AGREEMENT,
SHALL BE DEEMED TO HAVE AGREED THAT THE ADMINISTRATIVE AGENT SHALL HAVE NO DUTY AND SHALL OWE NO
OBLIGATION OR RESPONSIBILITY (FIDUCIARY OR OTHERWISE) TO THE INDENTURE TRUSTEE, OTHER THAN THE DUTY
TO PERFORM ITS EXPRESS OBLIGATIONS UNDER THIS AGREEMENT IN ACCORDANCE WITH THEIR TERMS, SUBJECT IN
ALL EVENTS TO THE PROVISIONS OF SECTION 6.5 AND THE OTHER PROVISIONS OF THIS AGREEMENT
LIMITING THE RESPONSIBILITY OR LIABILITY OF THE ADMINISTRATIVE AGENT HEREUNDER. WITHOUT LIMITING
THE FOREGOING, THE INDENTURE TRUSTEE, BY ACCEPTING THE BENEFITS OF THIS AGREEMENT, SHALL BE DEEMED
TO HAVE WAIVED ANY RIGHT THE INDENTURE TRUSTEE MIGHT HAVE AS A SECURED PARTY UNDER APPLICABLE LAW
OR OTHERWISE, TO COMPEL THE SALE OR OTHER DISPOSITION OF ANY COLLATERAL, AND ANY OBLIGATION THE
ADMINISTRATIVE AGENT MIGHT HAVE, UNDER APPLICABLE LAW OR OTHERWISE, TO OBTAIN ANY MINIMUM PRICE FOR
ANY COLLATERAL UPON THE SALE THEREOF, IT BEING EXPRESSLY UNDERSTOOD, AND THE AVAILABILITY OF THE
BENEFITS OF THIS AGREEMENT TO THE INDENTURE TRUSTEE BEING CONDITIONED UPON THE UNDERSTANDING, THAT
THE SOLE RIGHT OF THE INDENTURE TRUSTEE SHALL BE TO RECEIVE ITS RATABLE SHARE OF ANY PROCEEDS OF
THE COLLATERAL OR OF ANY COLLATERAL CONSISTING OF CASH.
 Section 7.3
   Limitations on Responsibility of Administrative Agent
  26




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provided
  27




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Reliance by Administrative Agent
 Resignation and Removal of the Administrative Agent provided Article VI Section 7.3
 28




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MISCELLANEOUS
 Notices Section 9.01 provided Section 9.01
 Amendments in Writing Section 9.02
 Expenses, Indemnification, Waiver of Consequential Damages, etc
 Section 9.03
 Section 2.16
 Section 9.03
  Section 7.3
 Section 7.3
 Right of Set Off
 29




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Governing Law; Jurisdiction; Venue; Service of Process
 Governing Law
 Submission to Jurisdiction
 Waiver of Venue
 Service of Process Section 9.01
 Appointment of the Borrower Representative as Agent for the Grantors
 Waiver of Jury Trial
 30




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Injunctive Relief
 No Waiver by Course of Conduct, Cumulative Remedies Section 7.2
 Successors and Assigns
 Survival of Indemnities
 Titles and Captions
 Severability of Provisions
 31




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Counterparts
 Integration provided
 Advice of Counsel; No Strict Construction
 Acknowledgements
       32




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Releases.
  provided
 Additional Grantors Section 5.16
 Powers of Attorney
  33




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CONSOLIDATED COMMUNICATIONS HOLDINGS,
INC., as GrantorBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerCONSOLIDATED COMMUNICATIONS, INC., as
Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerCONSOLIDATED COMMUNICATIONS
ACQUISITION TEXAS, INC., as Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerFORT PITT ACQUISITION SUB INC., as Grantor and IssuerBy:
    
    /s/ Steven J. ShirarSteven J. ShirarVice PresidentCONSOLIDATED COMMUNICATIONS PUBLIC SERVICES, INC., as
Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial Officer
  [Consolidated
Communications Collateral Agreement]




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CONSOLIDATED COMMUNICATIONS MARKET RESPONSE, INC., as
Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerCONSOLIDATED COMMUNICATIONS OPERATOR SERVICES, INC.,
as Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerCONSOLIDATED COMMUNICATIONS NETWORK SERVICES, INC.,
as Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerCONSOLIDATED COMMUNICATIONS MOBILE SERVICES, INC., as
Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerCONSOLIDATED COMMUNICATIONS BUSINESS SYSTEMS, INC.,
as Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial Officer
  [Consolidated
Communications Collateral Agreement]




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CONSOLIDATED COMMUNICATIONS VENTURES COMPANY, as
Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerCONSOLIDATED COMMUNICATIONS SERVICES COMPANY, as
Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerCONSOLIDATED COMMUNICATIONS TELECOM SERVICES OF TEXAS
COMPANY, as Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerCONSOLIDATED COMMUNICATIONS OF FORT BEND COMPANY, as
Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerCONSOLIDATED COMMUNICATIONS OF TEXAS COMPANY, as
Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial Officer
  [Consolidated
Communications Collateral Agreement]




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CONSOLIDATED COMMUNICATIONS TRANSPORT COMPANY, as
Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerNORTH PITTSBURGH SYSTEMS, INC., as Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerNORTH PITTSBURGH TELEPHONE COMPANY, as Grantor and
IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerPENN TELECOM, INC., as Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial OfficerPINNATECH, INC., as Grantor and IssuerBy:
    
    /s/ Steven L. ChildersSteven L. ChildersChief Financial Officer
  [Consolidated
Communications Collateral Agreement]




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WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative AgentBy:
    
    /s/ Marc BirenbaumMarc BirenbaumDirector
 [Consolidated
Communications Collateral Agreement]