Document:

EX-10.5

 

Exhibit 10.5

SUBSIDIARY GUARANTY

          SUBSIDIARY GUARANTY (as amended, modified, restated and/or supplemented from time to time,
this “Guaranty”), dated as of March 31, 2008, made by and among each of the undersigned
guarantors (each, a “Guarantor” and, together with any other entity that becomes a
guarantor hereunder pursuant to Section 23 hereof, collectively, the “Guarantors”) in favor
of LEHMAN COMMERCIAL PAPER INC., as Administrative Agent (in such capacity, together with any
successor administrative agent, the “Administrative Agent”), for the benefit of the Secured
Creditors (as defined below). Except as otherwise defined herein, all capitalized terms used
herein and defined in the Credit Agreement (as defined below) shall be used herein as therein
defined.

WITNESSETH :

          WHEREAS, FairPoint Communications, Inc. (“FairPoint”), Northern New England Spinco
Inc. (“Spinco”), the lenders from time to time party thereto (the “Lenders”), Bank
of America, N.A., as Syndication Agent, Morgan Stanley Senior Funding, Inc. and Deutsche Bank
Securities Inc., as Co-Documentation Agents, and the Administrative Agent have entered into a
Credit Agreement, dated as of March 31, 2008 (as amended, modified, restated and/or supplemented
from time to time, the “Credit Agreement”), providing for the making of Loans to, and the
issuance of, and participation in, Letters of Credit for the account of the Borrower, all as
contemplated therein (the Lenders, each Letter of Credit Issuer, the Swingline Lender, the
Administrative Agent, the Collateral Agent, each other Agent and the Pledgee referred to in the
Pledge Agreement are herein called the “Lender Creditors”). As used herein, the term
“Borrower” shall mean (i) prior to the Merger, each of FairPoint and Spinco and (ii) from
and after the Merger, FairPoint.

          WHEREAS, the Borrower may from time to time be a party to one or more Interest Rate Agreements
(each such Interest Rate Agreement with an Interest Rate Creditor (as defined below), a
“Secured Interest Rate Agreement”) with Lehman Commercial Paper Inc., in its individual
capacity (“LCPI”), any Lender, a syndicate of financial institutions organized by LCPI or
such Lender or an affiliate of LCPI or such Lender (even if LCPI or any such Lender ceases to be a
Lender under the Credit Agreement for any reason), and any institution that participates therein,
and in each case their subsequent assigns (collectively, the “Interest Rate Creditors,” and
together with the Lender Creditors, collectively, the “Secured Creditors”).

          WHEREAS, each Guarantor is a direct or indirect Subsidiary of the Borrower.

          WHEREAS, it is a condition precedent to the making of Loans to the Borrower and the issuance
of, and participation in, Letters of Credit for the account of the Borrower under the Credit
Agreement that each Guarantor shall have executed and delivered this Guaranty to the Administrative
Agent.

          WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans by the Borrower and
the issuance of, and participation in, Letters of Credit for the account of the

 

 

Borrower under the Credit Agreement and the entering into by the Borrower and/or one or more
of its Subsidiaries of Secured Interest Rate Agreements and, accordingly, desires to execute this
Guaranty in order to satisfy the condition described in the preceding paragraph and to induce the
Lenders to make Loans to the Borrower and issue, and/or participate in, Letters of Credit for the
account of the Borrower and the Interest Rate Creditors to enter into Secured Interest Rate
Agreements with the Borrower and/or one or more of its Subsidiaries.

          NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each
Guarantor, the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby
makes the following representations and warranties to the Administrative Agent for the benefit of
the Secured Creditors and hereby covenants and agrees with each other Guarantor and the
Administrative Agent for the benefit of the Secured Creditors as follows:

     1. GUARANTY. (a) Each Guarantor, jointly and severally, irrevocably, absolutely and
unconditionally guarantees as a primary obligor and not merely as surety:

     (i) to the Lender Creditors the full and prompt payment when due (whether at the stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise) of (x) the
principal of, premium, if any, and interest on the Notes issued by, and the Loans made to,
the Borrower under the Credit Agreement, and all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit and (y) all other obligations (including, without
limitation, obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due), liabilities and indebtedness owing by the Borrower to
the Lender Creditors under the Credit Agreement and each other Credit Document to which the
Borrower is a party (including, without limitation, indemnities, Fees and interest thereon
(including, without limitation, any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in the
Credit Agreement, whether or not such interest is an allowed claim in any such proceeding)),
whether now existing or hereafter incurred under, arising out of or in connection with the
Credit Agreement and any such other Credit Document and the due performance and compliance
by the Borrower with all of the terms, conditions, covenants and agreements contained in all
such Credit Documents (all such principal, premium, interest, liabilities, indebtedness and
obligations under this clause (i), except to the extent consisting of obligations or
liabilities with respect to Secured Interest Rate Agreements, being herein collectively
called the “Credit Document Obligations”); and

     (ii) to each Interest Rate Creditor the full and prompt payment when due (whether at
the stated maturity, by required prepayment, declaration, acceleration, demand or otherwise)
of all obligations (including, without limitation, obligations which, but for the automatic
stay under Section 362(a) of the Bankruptcy Code, would become due), liabilities and
indebtedness (including, without limitation, any interest accruing after the commencement of
any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in
the respective Secured Interest Rate Agreements, whether or not such interest is an allowed
claim in any such proceeding) owing by the

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Borrower under any Secured Interest Rate Agreement to which it is a party, whether now
in existence or hereafter arising, and the due performance and compliance by the Borrower
with all of the terms, conditions, covenants and agreements contained therein (all such
obligations, liabilities and indebtedness being herein collectively called the “Interest
Rate Obligations”, and together with the Credit Document Obligations are herein
collectively called the “Guaranteed Obligations”).

Each Guarantor understands, agrees and confirms that the Secured Creditors may enforce this
Guaranty up to the full amount of the Guaranteed Obligations against such Guarantor without
proceeding against any other Guarantor or the Borrower, or against any security for the Guaranteed
Obligations, or under any other guaranty covering all or a portion of the Guaranteed Obligations.
This Guaranty is a guaranty of prompt payment and performance and not of collection.

     (b) Additionally, each Guarantor, jointly and severally, unconditionally, absolutely and
irrevocably, guarantees the payment of any and all Guaranteed Obligations whether or not due or
payable by the Borrower upon the occurrence in respect of the Borrower of any of the events
specified in Section 8.05 of the Credit Agreement, and unconditionally, absolutely and irrevocably,
jointly and severally, promises to pay such Guaranteed Obligations to the Secured Creditors on
demand.

     2. LIABILITY OF GUARANTORS ABSOLUTE. The liability of each Guarantor hereunder is
primary, absolute, joint and several, and unconditional and is exclusive and independent of any
security for or other guaranty of the indebtedness of the Borrower whether executed by such
Guarantor, any other Guarantor, any other guarantor or by any other party, and the liability of
each Guarantor hereunder shall not be affected or impaired by any circumstance or occurrence
whatsoever, including, without limitation: (a) any direction as to application of payment by the
Borrower or any other party; (b) any other continuing or other guaranty, undertaking or maximum
liability of a Guarantor or of any other party as to the Guaranteed Obligations; (c) any payment on
or in reduction of any such other guaranty or undertaking; (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower; (e) the failure of any Guarantor to
receive any benefit from or as a result of its execution; delivery and performance of this
Guaranty; (f) any payment made to any Secured Creditor on the indebtedness which any Secured
Creditor repays the Borrower pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each Guarantor waives any right to
the deferral or modification of its obligations hereunder by reason of any such proceeding; (g) any
action or inaction by the Secured Creditors as contemplated in Section 5 hereof; or (h) any
invalidity, rescission, irregularity or unenforceability of all or any part of the Guaranteed
Obligations or of any security therefor.

     3. OBLIGATIONS OF GUARANTORS INDEPENDENT. The obligations of each Guarantor hereunder
are independent of the obligations of any other Guarantor, any other guarantor or the Borrower, and
a separate action or actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other Guarantor, any other

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guarantor or the Borrower and whether or not any other Guarantor, any other guarantor or the
Borrower be joined in any such action or actions.

     4. WAIVERS BY GUARANTORS. (a) Each Guarantor hereby waives notice of acceptance of
this Guaranty and notice of the existence, creation or incurrence of any new or additional
liability to which it may apply, and waives promptness, diligence, presentment, demand of payment,
demand for performance, protest, notice of dishonor or nonpayment of any such liabilities, suit or
taking of other action by the Administrative Agent or any other Secured Creditor against, and any
other notice to, any party liable thereon (including such Guarantor, any other Guarantor, any other
guarantor or the Borrower) and each Guarantor further hereby waives any and all notice of the
creation, renewal, extension or accrual of any of the Guaranteed Obligations and notice or proof of
reliance by any Secured Creditor upon this Guaranty, and the Guaranteed Obligations shall
conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended,
modified, supplemented or waived, in reliance upon this Guaranty.

     (b) Each Guarantor waives any right to require the Secured Creditors to: (i) proceed against
the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other
party; (ii) proceed against or exhaust any security held from the Borrower, any other Guarantor,
any other guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any other
remedy in the Secured Creditors’ power whatsoever. Each Guarantor waives any defense based on or
arising out of any defense of the Borrower, any other Guarantor, any other guarantor of the
Guaranteed Obligations or any other party other than payment in full in cash of the Guaranteed
Obligations, including, without limitation, any defense based on or arising out of the disability
of the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any
other party, or the unenforceability of the Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Borrower other than payment in full
in cash of the Guaranteed Obligations. The Secured Creditors may, at their election and in
accordance with the security documents governing same, foreclose on any collateral serving as
security held by the Administrative Agent, the Collateral Agent or the other Secured Creditors by
one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any
other right or remedy the Secured Creditors may have against the Borrower or any other party, or
any security, without affecting or impairing in any way the liability of any Guarantor hereunder
except to the extent the Guaranteed Obligations have been paid in full in cash. Each Guarantor
waives any defense arising out of any such election by the Secured Creditors, even though such
election operates to impair or extinguish any right of reimbursement, contribution, indemnification
or subrogation or other right or remedy of such Guarantor against the Borrower, any other
Guarantor, any other guarantor of the Guaranteed Obligations or any other party or any security.

     (c) Each Guarantor hereby waives the benefits of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Borrower or other circumstance
which operates to toll any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to each Guarantor.

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     (d) Each Guarantor has knowledge and assumes all responsibility for being and keeping itself
informed of the Borrower’s and each other Guarantor’s financial condition, affairs and assets, and
of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and
the nature, scope and extent of the risks which such Guarantor assumes and incurs hereunder, and
has adequate means to obtain from the Borrower and each other Guarantor on an ongoing basis
information relating thereto and to the Borrower’s and each other Guarantor’s ability to pay and
perform its respective Guaranteed Obligations, and agrees to assume the responsibility for keeping,
and to keep, so informed for so long as this Guaranty is in effect. Each Guarantor acknowledges
and agrees that (x) the Secured Creditors shall have no obligation to investigate the financial
condition or affairs of the Borrower or any other Guarantor for the benefit of such Guarantor nor
to advise such Guarantor of any fact respecting, or any change in, the financial condition, assets
or affairs of the Borrower or any other Guarantor that might become known to any Secured Creditor
at any time, whether or not such Secured Creditor knows or believes or has reason to know or
believe that any such fact or change is unknown to such Guarantor, or might (or does) increase the
risk of such Guarantor as guarantor hereunder, or might (or would) affect the willingness of such
Guarantor to continue as a guarantor of the Guaranteed Obligations hereunder and (y) the Secured
Creditors shall have no duty to advise any Guarantor of information known to them regarding any of
the aforementioned circumstances or risks.

     (e) Each Guarantor hereby acknowledges and agrees that no Secured Creditor or any other Person
shall be under any obligation (a) to marshal any assets in favor of such Guarantor or in payment of
any or all of the liabilities of the Borrower under the Credit Documents or the obligation of such
Guarantor hereunder or (b) to pursue any other remedy that such Guarantor may or may not be able to
pursue itself, any right to which such Guarantor hereby waives.

     (f) Each Guarantor warrants and agrees that each of the waivers set forth in Section 3 and in
this Section 4 is made with full knowledge of its significance and consequences and that if any of
such waivers are determined to be contrary to any applicable law or public policy, such waivers
shall be effective only to the maximum extent permitted by applicable law.

     5. RIGHTS OF SECURED CREDITORS. Subject to Section 4, any Secured Creditor may
(except as shall be required by applicable law and cannot be waived) at any time and from time to
time without the consent of, or notice to, any Guarantor, without incurring responsibility to such
Guarantor, without impairing or releasing the obligations or liabilities of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:

     (a) change the manner, place or terms of payment of, and/or change, increase or extend the
time of payment of, renew, increase, accelerate or alter, any of the Guaranteed Obligations
(including, without limitation, any increase or decrease in the rate of interest thereon or the
principal amount thereof), any security therefor, or any liability incurred directly or indirectly
in respect thereof, and the guaranty herein made shall apply to the Guaranteed Obligations as so
changed, extended, increased, accelerated, renewed or altered;

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     (b) take and hold security for the payment of the Guaranteed Obligations and sell, exchange,
release, surrender, impair, realize upon or otherwise deal with in any manner and in any order any
property or other collateral by whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset thereagainst;

     (c) exercise or refrain from exercising any rights against the Borrower, any other Credit
Party, any Subsidiary thereof, any other guarantor of the Borrower or others or otherwise act or
refrain from acting;

     (d) release or substitute any one or more endorsers, Guarantors, other guarantors, the
Borrower or other obligors;

     (e) settle or compromise any of the Guaranteed Obligations, any security therefor or any
liability (including any of those hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to the payment of any liability
(whether due or not) of the Borrower to creditors of the Borrower other than the Secured Creditors;

     (f) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of
the Borrower to the Secured Creditors regardless of what liabilities of the Borrower remain unpaid;

     (g) consent to or waive any breach of, or any act, omission or default under, any of the
Secured Interest Rate Agreements, the Credit Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement any of the Secured Interest Rate
Agreements, the Credit Documents or any of such other instruments or agreements;

     (h) act or fail to act in any manner which may deprive such Guarantor of its right to
subrogation against the Borrower to recover full indemnity for any payments made pursuant to this
Guaranty; and/or

     (i) take any other action or omit to take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable discharge of such Guarantor
from its liabilities under this Guaranty (including, without limitation, any action or omission
whatsoever that might otherwise vary the risk of such Guarantor or constitute a legal or equitable
defense to or discharge of the liabilities of a guarantor or surety or that might otherwise limit
recourse against such Guarantor).

No invalidity, illegality, irregularity or unenforceability of all or any part of the Guaranteed
Obligations, the Credit Documents or any other agreement or instrument relating to the Guaranteed
Obligations or of any security or guarantee therefor shall affect, impair or be a defense to this
Guaranty, and this Guaranty shall be primary, absolute and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances which

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might constitute a legal or equitable discharge of a surety or guarantor except payment in full in
cash of the Guaranteed Obligations.

     6. CONTINUING GUARANTY. This Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively presumed to have been
created in reliance hereon. No failure or delay on the part of any Secured Creditor in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies which any Secured
Creditor would otherwise have. No notice to or demand on any Guarantor in any case shall entitle
such Guarantor to any other further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any Secured Creditor to any other or further action in any
circumstances without notice or demand. It is not necessary for any Secured Creditor to inquire
into the capacity or powers of the Borrower or the officers, directors, partners or agents acting
or purporting to act on its or their behalf, and any indebtedness made or created in reliance upon
the professed exercise of such powers shall be guaranteed hereunder.

     7. SUBORDINATION OF INDEBTEDNESS HELD BY GUARANTORS. Any indebtedness of the Borrower
now or hereafter held by any Guarantor is hereby subordinated to the indebtedness of the Borrower
to the Secured Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Administrative Agent or the Collateral Agent, after an Event of Default has occurred and is
continuing, so requests, shall be collected, enforced and received by such Guarantor as trustee for
the Secured Creditors and be paid over to the Secured Creditors on account of the indebtedness of
the Borrower to the Secured Creditors, but without affecting or impairing in any manner the
liability of such Guarantor under the other provisions of this Guaranty. Prior to the transfer by
any Guarantor of any note or negotiable instrument evidencing any indebtedness of the Borrower to
such Guarantor, such Guarantor shall mark such note or negotiable instrument with a legend that the
same is subject to this subordination. Without limiting the generality of the foregoing, each
Guarantor hereby agrees with the Secured Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Guaranty (whether
contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed
Obligations have been irrevocably paid in full in cash; provided, that if any amount shall
be paid to any Guarantor on account of such subrogation rights at any time prior to the irrevocable
payment in full in cash of all the Guaranteed Obligations, such amount shall be held in trust for
the benefit of the Secured Creditors and shall forthwith be paid to the Secured Creditors to be
credited and applied to the Guaranteed Obligations, whether matured or unmatured, in accordance
with the terms of the Credit Documents or, if the Credit Documents do not provide for the
application of such amount, to be held by the Secured Creditors as collateral security for any
Guaranteed Obligations thereafter existing. Upon irrevocable payment in full in cash of all of the
Guaranteed Obligations, each Guarantor shall be subrogated to the rights of the Secured Creditors
to receive payments or distributions applicable to the Guaranteed Obligations until all
Indebtedness of the Borrower held by such Guarantor shall be paid in full.

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     8. GUARANTY ENFORCEABLE BY ADMINISTRATIVE AGENT OR COLLATERAL AGENT. Notwithstanding
anything to the contrary contained elsewhere in this Guaranty or any other Credit Document or
Secured Interest Rate Agreement, the Secured Creditors agree (by their acceptance of the benefits
of this Guaranty) that this Guaranty may be enforced only by the action of the Administrative Agent
or the Collateral Agent, in each case acting upon the instructions of the Required Lenders (or,
after the date on which all Credit Document Obligations have been paid in full, the holders of a
majority of the outstanding Interest Rate Obligations) and that no other Secured Creditor shall
have any right individually to seek to enforce or to enforce this Guaranty or to realize upon the
security to be granted by the Credit Documents, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent or the Collateral Agent or, after all the
Credit Document Obligations have been paid in full, by the holders of a majority of the outstanding
Interest Rate Obligations, as the case may be, for the benefit of the Secured Creditors upon the
terms of this Guaranty and the other Credit Documents. The Secured Creditors further agree that
this Guaranty may not be enforced against any director, officer, employee, partner, member or
stockholder of any Guarantor (except to the extent such partner, member or stockholder is also a
Guarantor hereunder). It is understood and agreed that the agreement in this Section 8 is among
and solely for the benefit of the Secured Creditors and that, if the Required Lenders (or, after
the date on which all Credit Document Obligations have been paid in full, the holders of a majority
of the outstanding Interest Rate Obligations) so agree (without requiring the consent of any
Guarantor), this Guaranty may be directly enforced by any Secured Creditor.

     9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF GUARANTORS. In order to induce the
Lenders to make Loans to, and issue Letters of Credit for the account of, the Borrower pursuant to
the Credit Agreement, and in order to induce the Interest Rate Creditors to execute, deliver and
perform the Secured Interest Rate Agreements to which they are a party, each Guarantor represents,
warrants and covenants that:

     (a) until the termination of the Total Commitment and all Secured Interest Rate Agreements and
until such time as no Note or Letter of Credit remains outstanding and all Guaranteed Obligations
have been paid in full (other than indemnities described in Section 11.01 of the Credit Agreement
and analogous provisions in the other Credit Documents which are not then due and payable), such
Guarantor will take, or will refrain from taking, as the case may be, all actions that are
necessary to be taken or not taken so that no violation of any provision, covenant or agreement
contained in Sections 6 and 7 of the Credit Agreement, and so that no Event of Default, is caused
by the actions of such Guarantor or any of its Subsidiaries; and

     (b) an executed (or conformed) copy of each of the Credit Documents and each of the Secured
Interest Rate Agreements has been made available to a senior officer of such Guarantor and such
officer is familiar with the contents thereof.

     10. EXPENSES. The Guarantors hereby jointly and severally agree to pay all reasonable
out-of-pocket costs and expenses of the Collateral Agent, the Administrative Agent and each other
Secured Creditor in connection with the enforcement of this Guaranty and the protection of the
Secured Creditors’ rights hereunder and of the Administrative Agent in

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connection with any amendment, waiver or consent relating hereto (including, in each case,
without limitation, the reasonable fees and disbursements of counsel).

     11. BENEFIT AND BINDING EFFECT. This Guaranty shall be binding upon each Guarantor
and its successors and assigns and shall inure to the benefit of the Secured Creditors and their
successors and assigns to the extent permitted under the Credit Agreement or the respective Secured
Interest Rate Agreement.

     12. AMENDMENTS; WAIVERS. Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of each Guarantor
directly affected thereby (it being understood that the addition or release of any Guarantor
hereunder shall not constitute a change, waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released) and with the written consent of either (x) the
Required Lenders (or, to the extent required by Section 11.11 of the Credit Agreement, with the
written consent of each Lender) at all times prior to the time at which all Credit Document
Obligations have been paid in full or (y) the holders of a majority of the outstanding Interest
Rate Obligations at all times after the time at which all Credit Document Obligations have been
paid in full; provided, that any change, waiver, modification or variance affecting the
rights and benefits of a single Class (as defined below) of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall also require the written consent of the Requisite
Creditors (as defined below) of such Class of Secured Creditors. For the purpose of this Guaranty,
the term “Class” shall mean each class of Secured Creditors, i.e., whether (x) the
Lender Creditors as the holders of the Credit Document Obligations or (y) the Interest Rate
Creditors as the holders of the Interest Rate Obligations. For the purpose of this Guaranty, the
term “Requisite Creditors” of any Class shall mean (x) with respect to the Credit Document
Obligations, the Required Lenders (or, to the extent required by Section 11.11 of the Credit
Agreement, each Lender) and (y) with respect to the Interest Rate Obligations, the holders of a
majority of all Interest Rate Obligations outstanding from time to time under the Secured Interest
Rate Agreements.

     13. SET OFF. In addition to any rights now or hereafter granted under applicable law
(including, without limitation, Section 151 of the New York Debtor and Creditor Law) and not by way
of limitation of any such rights, upon the occurrence and during the continuance of an Event of
Default (such term to mean and include any “Event of Default” as defined in the Credit Agreement
and any payment default under any Secured Interest Rate Agreement continuing after any applicable
grace period), each Secured Creditor is hereby authorized, at any time or from time to time,
without notice to any Guarantor or to any other Person, any such notice being expressly waived, to
set off and to appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Secured Creditor to or for the credit or the account
of such Guarantor, against and on account of the obligations and liabilities of such Guarantor to
such Secured Creditor under this Guaranty, irrespective of whether or not such Secured Creditor
shall have made any demand hereunder and although said obligations, liabilities, deposits or
claims, or any of them, shall be contingent or unmatured. Each Secured Creditor (by its acceptance
of the benefits hereof) acknowledges and agrees (i) to promptly notify the relevant Guarantor after
any such set-off and application; provided, that the failure to

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give such notice shall not affect the validity of such set-off and application; and (ii) that
the provisions of this Section 13 are subject to the sharing provisions set forth in Section 11.06
of the Credit Agreement.

     14. NOTICE. Except as otherwise specified herein, all notices, requests, demands or
other communications to or upon the respective parties hereto shall be sent or delivered by mail,
telegraph, telex, telecopy, cable or courier service and all such notices and communications shall,
when mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be effective when
deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as
the case may be, or sent by telex or telecopier, except that notices and communications to the
Administrative Agent or any Guarantor shall not be effective until received by the Administrative
Agent or such Guarantor, as the case may be. All notices and other communications shall be in
writing and addressed to such party at (i) in the case of any Lender Creditor, as provided in the
Credit Agreement, (ii) in the case of any Guarantor, at its address set forth opposite its
signature below and (iii) in the case of any Interest Rate Creditor, at such address as such
Interest Rate Creditor shall have specified in writing to the Guarantors; or in any case at such
other address as any of the Persons listed above may hereafter notify the others in writing.

     15. REINSTATEMENT. If any claim is ever made upon any Secured Creditor for repayment
or recovery of any amount or amounts received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body having jurisdiction over such payee
or any of its property or (ii) any settlement or compromise of any such claim effected by such
payee with any such claimant (including, without limitation, the Borrower), then and in such event
each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be
binding upon such Guarantor, notwithstanding any revocation hereof or the cancellation of any Note,
any Secured Interest Rate Agreement or any other instrument evidencing any liability of the
Borrower, and such Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never originally been
received by any such payee.

     16. CONSENT TO JURISDICTION; SERVICE OF PROCESS; AND WAIVER OF TRIAL BY JURY. (a)
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED CREDITORS AND OF THE UNDERSIGNED
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. Any legal action or proceeding with respect to
this Guaranty or any other Credit Document to which any Guarantor is a party may be brought in the
courts of the State of New York or of the United States of America for the Southern District of New
York, in each case located within the City of New York, and, by execution and delivery of this
Guaranty, each Guarantor hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor hereby
further irrevocably waives any claim that any such courts lack jurisdiction over such Guarantor,
and agrees not to plead or claim, in any legal action or proceeding with respect to this Guaranty
or any other Credit Document to which such

-10-

 

Guarantor is a party brought in any of the aforesaid courts, that any such court lacks
jurisdiction over such Guarantor. Each Guarantor further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to each Guarantor at its address
set forth opposite its signature below, such service to become effective 30 days after such
mailing. Each Guarantor hereby irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any action or proceeding commenced
hereunder or under any other Credit Document to which such Guarantor is a party that such service
of process was in any way invalid or ineffective. Nothing herein shall affect the right of any of
the Secured Creditors to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against each Guarantor in any other jurisdiction.

     (b) Each Guarantor hereby irrevocably waives (to the full extent permitted by applicable law)
any objection which it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Guaranty or any other Credit
Document to which such Guarantor is a party brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any such court that such
action or proceeding brought in any such court has been brought in an inconvenient forum.

     (c) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS
GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH
GUARANTOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

     17. TERMINATION. After the Termination Date (as defined below), but subject to
Section 15, this Guaranty shall terminate (provided that all indemnities set forth herein shall
survive any such termination) and the Administrative Agent, at the request and expense of the
respective Guarantor, will execute and deliver to such Guarantor a proper instrument or instruments
acknowledging the satisfaction and termination of this Guaranty as provided above. As used in this
Guaranty, “Termination Date” shall mean the date upon which the Total Commitment and all
Secured Interest Rate Agreements have been terminated, no Note or Letter of Credit under the Credit
Agreement is outstanding (and all Loans have been paid in full) and all other Obligations (as
defined in the Credit Agreement) have been paid in full (other than arising from indemnities for
which no request has been made).

     18. RELEASE OF LIABILITY OF GUARANTOR UPON SALE OR DISSOLUTION. In the event that all
of the capital stock or other equity interests of one or more Guarantors is sold or otherwise
disposed of (including by way of the merger or consolidation of such Guarantor with or into another
Person) or liquidated, in any such case in compliance with the requirements of Section 7.02 of the
Credit Agreement (or such sale, other disposition or liquidation has been approved in writing by
the Required Lenders (or all the Lenders if required

-11-

 

by Section 11.11 of the Credit Agreement)) and the proceeds of such sale, disposition or
liquidation are applied in accordance with the provisions of the Credit Agreement, to the extent
applicable, such Guarantor shall, upon consummation of such sale or other disposition (except to
the extent that such sale or disposition is to the Borrower or a Subsidiary thereof), be released
from this Guaranty automatically and without further action and this Guaranty shall, as to each
such Guarantor or Guarantors, terminate, and have no further force or effect (it being understood
and agreed that the sale of one or more Persons that own, directly or indirectly, all of the
capital stock or other equity interests of any Guarantor shall be deemed to be a sale of such
Guarantor for the purposes of this Section 18).

     19. CONTRIBUTION. At any time a payment in respect of the Guaranteed Obligations is
made under this Guaranty, the right of contribution of each Guarantor against each other Guarantor
shall be determined as provided in the immediately following sentence, with the right of
contribution of each Guarantor to be revised and restated as of each date on which a payment (a
“Relevant Payment”) is made on the Guaranteed Obligations under this Guaranty. At any time
that a Relevant Payment is made by a Guarantor that results in the aggregate payments made by such
Guarantor in respect of the Guaranteed Obligations to and including the date of the Relevant
Payment exceeding such Guarantor’s Contribution Percentage (as defined below) of the aggregate
payments made by all Guarantors in respect of the Guaranteed Obligations to and including the date
of the Relevant Payment (such excess, the “Aggregate Excess Amount”), each such Guarantor
shall have a right of contribution against each other Guarantor who either has not made any
payments or has made payments in respect of the Guaranteed Obligations to and including the date of
the Relevant Payment in an aggregate amount less than such other Guarantor’s Contribution
Percentage of the aggregate payments made to and including the date of the Relevant Payment by all
Guarantors in respect of the Guaranteed Obligations (the aggregate amount of such deficit, the
“Aggregate Deficit Amount”) in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Guarantor and the denominator of which is the Aggregate Excess
Amount of all Guarantors multiplied by (y) the Aggregate Deficit Amount of such other Guarantor. A
Guarantor’s right of contribution pursuant to the preceding sentences shall arise at the time of
each computation, subject to adjustment at the time of each computation; provided, that no
Guarantor may take any action to enforce such right until the Guaranteed Obligations have been
irrevocably paid in full in cash and the Total Commitment and all Letters of Credit have been
terminated, it being expressly recognized and agreed by all parties hereto that any Guarantor’s
right of contribution arising pursuant to this Section 19 against any other Guarantor shall be
expressly junior and subordinate to such other Guarantor’s obligations and liabilities in respect
of the Guaranteed Obligations and any other obligations owing under this Guaranty. As used in this
Section 19: (i) each Guarantor’s “Contribution Percentage” shall mean the percentage
obtained by dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by (y) the
aggregate Adjusted Net Worth of all Guarantors; (ii) the “Adjusted Net Worth” of each
Guarantor shall mean the greater of (x) the Net Worth (as defined below) of such Guarantor and (y)
zero; and (iii) the “Net Worth” of each Guarantor shall mean the amount by which the fair
saleable value of such Guarantor’s assets on the date of any Relevant Payment exceeds its existing
debts and other liabilities (including contingent liabilities, but without giving effect to any
Guaranteed Obligations arising under this Guaranty) on such date. Notwithstanding anything to the
contrary

-12-

 

contained above, any Guarantor that is released from this Guaranty pursuant to Section 18
hereof shall thereafter have no contribution obligations, or rights, pursuant to this Section 19,
and at the time of any such release, if the released Guarantor had an Aggregate Excess Amount or an
Aggregate Deficit Amount, same shall be deemed reduced to $0, and the contribution rights and
obligations of the remaining Guarantors shall be recalculated on the respective date of release (as
otherwise provided above) based on the payments made hereunder by the remaining Guarantors. All
parties hereto recognize and agree that, except for any right of contribution arising pursuant to
this Section 19, each Guarantor who makes any payment in respect of the Guaranteed Obligations
shall have no right of contribution or subrogation against any other Guarantor in respect of such
payment until all of the Guaranteed Obligations have been irrevocably paid in full in cash. Each
of the Guarantors recognizes and acknowledges that the rights to contribution arising hereunder
shall constitute an asset in favor of the party entitled to such contribution. In this connection,
each Guarantor has the right to waive its contribution right against any Guarantor to the extent
that after giving effect to such waiver such Guarantor would remain solvent, in the determination
of the Required Lenders.

     20. LIMITATION ON GUARANTEED OBLIGATIONS. Each Guarantor and each Secured Creditor
(by its acceptance of the benefits of this Guaranty) hereby confirms that it is its intention that
this Guaranty not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Code, the Uniform Fraudulent Conveyance Act of any similar Federal or state law. To effectuate the
foregoing intention, each Guarantor and each Secured Creditor (by its acceptance of the benefits of
this Guaranty) hereby irrevocably agrees that the Guaranteed Obligations guaranteed by such
Guarantor shall be limited to such amount as will, after giving effect to such maximum amount and
all other (contingent or otherwise) liabilities of such Guarantor that are relevant under such laws
and after giving effect to any rights to contribution pursuant to any agreement providing for an
equitable contribution among such Guarantor and the other Guarantors, result in the Guaranteed
Obligations of such Guarantor in respect of such maximum amount not constituting a fraudulent
transfer or conveyance.

     21. COUNTERPARTS. This Guaranty may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the same instrument. A
set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.

     22. PAYMENTS. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense and on the same basis as payments are made by the Borrower
under Sections 3.04 and 3.05 of the Credit Agreement.

     23. ADDITIONAL GUARANTORS. It is understood and agreed that any Subsidiary of the
Borrower that is required to execute a counterpart of this Guaranty after the date hereof pursuant
to the Credit Agreement shall become a Guarantor hereunder by (x) executing and delivering a
counterpart hereof (or a satisfactory joinder agreement hereto) to the Administrative Agent and (y)
taking all actions as specified in this Guaranty as would have been taken by such

-13-

 

Guarantor had it been an original party to this Guaranty, in each case with all documents and
actions required to be taken above to the reasonable satisfaction of the Administrative Agent.

     24. HEADINGS DESCRIPTIVE. The headings of the several Sections of this Guaranty are
inserted for convenience only and shall not in any way affect the meaning or construction of any
provision of this Guaranty.

* * *

-14-

 

     IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and delivered as of
the date first above written.

     Address:

	 	 	 	 	 	 	 	 	 
	c/o FAIRPOINT COMMUNICATIONS, INC.	 	FAIRPOINT BROADBAND, INC.,	 	 
	521 East Morehead Street	 	as a Guarantor	 	 
	Charlotte, NC 28202
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Thomas Griffin	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Thomas Griffin	 	 
	 

	 	 	 	Title:
	 	Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	c/o FAIRPOINT COMMUNICATIONS, INC.	 	MJD VENTURES, INC.,	 	 
	521 East Morehead Street	 	as a Guarantor	 	 
	Charlotte, NC 28202
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Thomas Griffin	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Thomas Griffin	 	 
	 

	 	 	 	Title:
	 	Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	c/o FAIRPOINT COMMUNICATIONS, INC.	 	MJD SERVICES CORP.,	 	 
	521 East Morehead Street	 	as a Guarantor	 	 
	Charlotte, NC 28202
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Thomas Griffin	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Thomas Griffin	 	 
	 

	 	 	 	Title:
	 	Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	c/o FAIRPOINT COMMUNICATIONS, INC.	 	S T ENTERPRISES, LTD.,	 	 
	521 East Morehead Street	 	as a Guarantor	 	 
	Charlotte, NC 28202
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Thomas Griffin	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Thomas Griffin	 	 
	 

	 	 	 	Title:
	 	Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	c/o FAIRPOINT COMMUNICATIONS, INC.	 	FAIRPOINT CARRIER SERVICES, INC.,	 	 
	521 East Morehead Street	 	as a Guarantor	 	 
	Charlotte, NC 28202
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Thomas Griffin	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Thomas Griffin	 	 
	 

	 	 	 	Title:
	 	Treasurer	 	 

SUBSIDIARY GUARANTY

 

 

	 	 	 	 	 	 	 	 	 
	c/o FAIRPOINT COMMUNICATIONS, INC.	 	FAIRPOINT LOGISTICS, INC.,	 	 
	521 East Morehead Street	 	as a Guarantor	 	 
	Charlotte, NC 28202
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Thomas Griffin	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Thomas Griffin	 	 
	 

	 	 	 	Title:
	 	Treasurer	 	 

	 	 	 	 	 
	Accepted and Agreed to:

LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent

 	 	 
	By:  	William J. Hughes
 	 	 
	 	Name:  	WILLIAM J. HUGHES 	 	 
	 	Title:  	MANAGING DIRECTOR 	 	 
	 

SUBSIDIARY GUARANTYEX-10.6

 

Exhibit 10.6

PLEDGE AGREEMENT

     PLEDGE AGREEMENT, dated as of March 31, 2008 (as amended, restated, modified and/or
supplemented from time to time, the “Agreement”), made by each of the undersigned pledgors
(each, a “Pledgor” and together with any other entity that becomes a party hereto pursuant
to Section 24 hereof, collectively, the “Pledgors”), in favor of LEHMAN COMMERCIAL PAPER
INC., as Collateral Agent (including any successor collateral agent, the “Pledgee”) for the
benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, terms
used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein
defined.

WITNESSETH:

     WHEREAS, FairPoint Communications, Inc. (“FairPoint”), Northern New England Spinco
Inc. (“Spinco”), the lenders from time to time party thereto (the “Lenders”),
Lehman Commercial Paper Inc. as Administrative Agent, Bank of America, N.A., as Syndication Agent
and Morgan Stanley Senior Funding, Inc. and Deutsche Bank Securities Inc., as Co-Documentation
Agents have entered into a Credit Agreement, dated as of March 31, 2008 (as amended, modified,
restated and/or supplemented from time to time, the “Credit Agreement”), providing for the
making of Loans to, and the issuance of, and participation in, Letters of Credit for the account of
the Borrower, all as contemplated therein (the Lenders, each Letter of Credit Issuer, the Swingline
Lender, the Administrative Agent, the Collateral Agent, each other Agent and the Pledgee referred
to in the Pledge Agreement are herein called the “Lender Creditors”). As used herein, the
term “Borrower” shall mean (i) prior to the Merger, each of FairPoint and Spinco and (ii)
from and after the Merger, FairPoint.

     WHEREAS, the Borrower may from time to time be a party to one or more Interest Rate Agreements
(each such Interest Rate Agreement with an Interest Rate Creditor (as defined below), a
“Secured Interest Rate Agreement”) with Lehman Commercial Paper Inc., in its individual
capacity (“LCPI”), any Lender, a syndicate of financial institutions organized by LCPI or
such Lender or an affiliate of LCPI or such Lender (even if LCPI or any such Lender ceases to be a
Lender under the Credit Agreement for any reason), and any institution that participates therein,
and in each case their subsequent assigns (collectively, the “Interest Rate Creditors” and
together with the Lender Creditors, collectively, the “Secured Creditors”).

     WHEREAS, it is a condition precedent to the making of Loans and the issuance of, and
participation in, Letters of Credit under the Credit Agreement that each Pledgor shall have
executed and delivered to the Pledgee this Agreement.

     WHEREAS, each Pledgor desires to execute this Agreement to satisfy the condition described in
the preceding paragraph.

     NOW, THEREFORE, in consideration of the benefits accruing to each Pledgor, the receipt and
sufficiency of which are hereby acknowledged, each Pledgor hereby makes the

 

 

following representations and warranties to the Pledgee and hereby covenants and agrees with
the Pledgee as follows:

     1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor for the benefit
of the Secured Creditors to secure:

     (i) the full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and
liabilities of the Borrower (in the case of the Borrower or an NSG Pledgor) or such Pledgor
(in the case of a Pledgor that is a Subsidiary Guarantor), now existing or hereafter
incurred under, arising out of or in connection with any Credit Document to which the
Borrower or such Pledgor, as the case may be, is a party (including, in the case of a
Pledgor that is a Subsidiary Guarantor, all such obligations of such Pledgor under the
Subsidiary Guaranty) and the due performance of and compliance by the Borrower or such
Pledgor, as the case may be, with the terms of each such Credit Document (all such
obligations and liabilities under this clause (i), except to the extent consisting of
obligations or indebtedness with respect to Secured Interest Rate Agreements, being herein
collectively called the “Credit Document Obligations”);

     (ii) the full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and
liabilities of the Borrower (in the case of the Borrower and each NSG Pledgor) or such
Pledgor (in the case of any Pledgor that is a Subsidiary Guarantor), now existing or
hereafter incurred under, arising out of or in connection with any Secured Interest Rate
Agreement (all such obligations and liabilities under this clause (ii) being herein
collectively called the “Interest Rate Obligations”);

     (iii) any and all sums advanced by the Pledgee in order to preserve the Collateral (as
hereinafter defined) and/or its security interest therein;

     (iv) in the event of any proceeding for the collection of the Obligations (as defined
below) or the enforcement of this Agreement, after an Event of Default (such term, as used
in this Agreement, shall mean any Event of Default under the Credit Agreement or any payment
default by the Borrower under any Secured Interest Rate Agreement after the expiration of
any applicable grace period) shall have occurred and be continuing, the reasonable
out-of-pocket expenses of retaking, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the Collateral, or of any exercise by the Pledgee of
its rights hereunder, together with reasonable attorneys’ fees and disbursements of counsel;
and

     (v) all amounts paid by any Secured Creditor as to which such Secured Creditor has the
right to reimbursement under Section 11 of this Agreement;

all such obligations, liabilities, sums and expenses set forth in clauses (i) through (v) of this
Section 1 being herein collectively called the “Obligations”.

 

 

     2. DEFINITIONS. The following capitalized terms used herein shall have the
definitions specified below:

     “Certificated Security” shall have the meaning given such term in Section 8-102(a)(4)
of the UCC.

     “Clearing Corporation” shall have the meaning given such term in Section 8-102(a)(5)
of the UCC.

     “Collateral” shall have the meaning provided in Section 3.1.

     “Collateral Accounts” shall mean any and all accounts established and maintained by
the Pledgee in the name of any Pledgor to which Collateral may be credited.

     “Excluded Entity” shall mean (x) each of the corporations, partnerships, limited
liability companies or associations listed on Annex G hereto where the capital stock or other
equity interests of such corporations, partnerships, limited liability companies or associations
are not permitted by applicable law, rule or regulation to be pledged and (y) any Telco or Carrier
Services Company acquired or created pursuant to a Permitted Acquisition after the Closing Date,
where the capital stock or other equity interests of such Telco or Carrier Services Company are not
permitted by applicable law, rule or regulation to be pledged and, after giving effect to the
acquisition or creation of such Telco or Carrier Services Company, the Pro Forma
EBITDA Test is satisfied.

     “Exempted Foreign Entity” shall mean any Foreign Corporation, Foreign LLC or Foreign
Partnership that, in any such case, is treated as a corporation or an association taxable as a
corporation for U.S. Federal income tax purposes.

     “Financial Asset” shall have the meaning given such term in Section 8-102(a)(9) of the
UCC.

     “Instrument” shall have the meaning given such term in Section 9-102(a)(47) of the
UCC.

     “Investment Property” shall have the meaning given such term in Section 9-102(a)(49)
of the UCC.

     “Location” of any Pledgor has the meaning given such term in Section 9-307 of the UCC.

     “Membership Interest” shall mean (x) the entire membership interest at any time owned
by any Pledgor in any limited liability company (other than (I) an Excluded Entity and (II) a
limited liability company that is not organized under the laws of the United States or any State or
territory thereof (a “Foreign LLC”)) and (y) with respect to a Foreign LLC (other than an
Excluded Entity), the entire membership interest at any time owned by any Pledgor in such Foreign
LLC, provided that such Pledgor shall not be required to pledge hereunder (and the term
“Membership Interest” shall not include) more than 65% of the total voting power of all classes

 

 

of the membership interests of any Foreign LLC (that is an Exempted Foreign Entity) entitled
to vote (with any limited liability company (other than an Excluded Entity) in which any Pledgor
owns a membership interest being herein called a “Pledged LLC”).

     “Notes” shall mean all promissory notes at any time issued to, or held by, any
Pledgor.

     “NSG Pledgor” shall mean each Pledgor which is not a Subsidiary Guarantor.

     “Obligations” shall have the meaning provided in Section 1.

     “Partnership Interest” shall mean (x) the entire partnership interest (whether general
and/or limited partnership interests) at any time owned by any Pledgor in any partnership (other
than (I) an Excluded Entity and (II) a partnership that is not organized under the laws of the
United States or any State or territory thereof (a “Foreign Partnership”)) and (y) with
respect to a Foreign Partnership (other than an Excluded Entity), the entire partnership interest
at any time owned by any Pledgor in such Foreign Partnership, provided that such Pledgor
shall not be required to pledge hereunder (and the term “Partnership Interest” shall not include)
more than 65% of the total voting power of all classes of partnership interests of any Foreign
Partnership (that is an Exempted Foreign Entity) entitled to vote (with any partnership (other than
an Excluded Entity) in which any Pledgor owns a partnership interest being herein called a
“Pledged Partnership”).

     “Pledged Membership Interests” shall mean all Membership Interests at any time pledged
or required to be pledged hereunder.

     “Pledged Notes” shall mean all Notes at any time pledged or required to be pledged
hereunder.

     “Pledged Partnership Interests” shall mean all Partnership Interests at any time
pledged or required to be pledged hereunder.

     “Pledged Securities” shall mean all Pledged Stock, Pledged Notes, Pledged Partnership
Interests and Pledged Membership Interests.

     “Pledged Stock” shall mean all Stock at any time pledged or required to be pledged
hereunder.

     “Proceeds” shall have the meaning given such term in Section 9-102(a)(64) of the UCC.

     “Registered Organization” shall have the meaning given such term in Section
9-102(a)(70) of the UCC.

     “Secured Debt Agreements” shall have the meaning provided in Section 5.

     “Securities” shall mean all of the Stock, Notes, Partnership Interests and Membership
Interests.

 

 

     “Securities Intermediary” shall have the meaning given such term in Section 8-102(14)
of the UCC.

     “Security Entitlement” shall have the meaning given such term in Section 8-102(a)(17)
of the UCC.

     “Stock” shall mean (x) all of the issued and outstanding shares of stock at any time
owned by any Pledgor of any corporation (other than (I) any Excluded Entity and (II) a corporation
that is not organized under the laws of the United States or any State or territory thereof (a
“Foreign Corporation”)) and (y) with respect to a Foreign Corporation that is a First-Tier
Subsidiary (other than any Excluded Entity), all of the issued and outstanding shares of capital
stock at any time owned by any Pledgor of such Foreign Corporation, provided that such
Pledgor shall not be required to pledge hereunder (and the term “Stock” shall not include) more
than 65% of the total combined voting power of all classes of capital stock of any Exempted Foreign
Entity entitled to vote.

     “Transmitting Utility” has the meaning given such term in Section 9-102(a)(80) of the
UCC.

     “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York
from time to time; provided that all references herein to specific Sections or subsections
of the UCC are references to such Sections or subsections, as the case may be, of the Uniform
Commercial Code as in effect in the State of New York on the date hereof.

     “Uncertificated Security” shall have the meaning given such term in Section
8-102(a)(18) of the UCC.

     3. PLEDGE OF SECURITIES, ETC.

     3.1 Pledge. To secure the Obligations now or hereafter owed or to be performed by
such Pledgor, each Pledgor does hereby grant, pledge, hypothecate, mortgage, charge and assign to
the Pledgee for the benefit of the Secured Creditors, and does hereby create a continuing security
interest (subject to those Liens permitted to exist with respect to the Collateral pursuant to the
terms of all Secured Debt Agreements then in effect) in favor of the Pledgee for the benefit of the
Secured Creditors in, all of its right, title and interest in and to the following, whether now
existing or hereafter from time to time acquired (collectively, the “Collateral”):

     (i) all of the Securities owned or held by such Pledgor from time to time and all
options and warrants owned by such Pledgor from time to time to purchase Securities (and all
certificates or instruments evidencing such Securities);

     (ii) each Collateral Account, including any and all assets of whatever type or kind
deposited by such Pledgor in any such Collateral Account, whether now owned or hereafter
acquired, existing or arising (including, without limitation, all Financial Assets,
Investment Property, monies, checks, drafts, Instruments or interests therein of any type or
nature deposited or required by the Credit Agreement or any other Secured Debt

 

 

Agreement to be deposited in such Collateral Account, and all investments and all
certificates and other instruments (including depository receipts, if any) from time to time
representing or evidencing the same, and all dividends, interest, distributions, cash and
other property from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of the foregoing);

     (iii) all of such Pledgor’s (x) Partnership Interest and all of such Pledgor’s right,
title and interest in each Pledged Partnership and (y) Membership Interest and all of such
Pledgor’s right, title and interest in each Pledged LLC, in each case including, without
limitation:

     (a) all the capital thereof and its interest in all profits, losses and other
distributions to which such Pledgor shall at any time be entitled in respect of such
Partnership Interest and/or Membership Interest;

     (b) all other payments due or to become due to such Pledgor in respect of such
Partnership Interest and/or Membership Interest, whether under any partnership
agreement, limited liability company agreement or otherwise, whether as contractual
obligations, damages, insurance proceeds or otherwise;

     (c) all of its claims, rights, powers, privileges, authority, options, security
interest, liens and remedies, if any, under any partnership agreement, limited
liability company agreement or at law or otherwise in respect of such Partnership
Interest and/or Membership Interest;

     (d) all present and future claims, if any, of the Pledgor against any Pledged
Partnership and any Pledged LLC for moneys loaned or advanced, for services rendered
or otherwise;

     (e) all of such Pledgor’s rights under any partnership agreement or limited
liability company agreement or at law to exercise and enforce every right, power,
remedy, authority, option and privilege of such Pledgor relating to the Partnership
Interest and/or Membership Interest, including any power to terminate, cancel or
modify any partnership agreement or any limited liability company agreement, to
execute any instruments and to take any and all other action on behalf of and in the
name of such Pledgor in respect of any Partnership Interest or Membership Interest
and any Pledged Partnership and any Pledged LLC to make determinations, to exercise
any election (including, but not limited to, election of remedies) or option or to
give or receive any notice, consent, amendment, waiver or approval, together with
full power and authority to demand, receive, enforce, collect or receipt for any of
the foregoing, to enforce or execute any checks, or other instruments or orders, to
file any claims and to take any action in connection with any of the foregoing; and

     (f) all other property hereafter delivered in substitution for or in addition
to any of the foregoing, all certificates and instruments representing or evidencing
such other property and all cash, securities, interest, dividends, rights

 

 

and other property at any time and from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all thereof;

     (iv) all Security Entitlements owned by such Pledgor from time to time in any and all
of the foregoing; and

     (v) all Proceeds of any and all of the foregoing.

Notwithstanding anything to the contrary contained in this Section 3.1, except as otherwise
required by Section 6.11 of the Credit Agreement, no Pledgor shall be required to pledge hereunder
any Margin Stock owned by such Pledgor.

          3.2 Procedures. (a) To the extent that any Pledgor at any time or from time to time
owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall
automatically (and without the taking of any action by such Pledgor) be pledged pursuant to Section
3.1 of this Agreement and, in addition thereto, such Pledgor shall (to the extent provided below)
forthwith take the following actions as set forth below:

     (i) with respect to a Certificated Security (other than a Certificated Security
credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor
shall physically deliver such Certificated Security to the Pledgee, endorsed to the Pledgee
or endorsed in blank;

     (ii) with respect to an Uncertificated Security (other than an Uncertificated Security
credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor
shall cause the issuer of such Uncertificated Security to duly authorize, execute, and
deliver to the Pledgee, an agreement for the benefit of the Pledgee and the other Secured
Creditors substantially in the form of Annex E hereto (appropriately completed to the
satisfaction of the Pledgee and with such modifications, if any, as shall be satisfactory to
the Pledgee) pursuant to which such issuer agrees to comply with any and all instructions
originated by the Pledgee without further consent by the registered owner and not to comply
with instructions regarding such Uncertificated Security (and any Partnership Interests and
Membership Interests issued by such issuer) originated by any other Person other than a
court of competent jurisdiction;

     (iii) with respect to a Certificated Security, Uncertificated Security, Partnership
Interest or Membership Interest credited on the books of a Clearing Corporation or
Securities Intermediary (including a Federal Reserve Bank, Participants Trust Company or The
Depository Trust Company), such Pledgor shall promptly notify the Pledgee thereof and shall
promptly take (x) all actions required (i) to comply with the applicable rules of such
Clearing Corporation or Securities Intermediary and (ii) to perfect the security interest of
the Pledgee under applicable law (including, in any event, under Sections 9-314(a), (b) and
(c), 9-106 and 8-106(d) of the UCC) and (y) such other actions as the Pledgee deems
necessary or desirable to effect the foregoing;

     (iv) with respect to a Partnership Interest or a Membership Interest (other than a
Partnership Interest or Membership Interest credited on the books of a Clearing

 

 

Corporation or Securities Intermediary), (1) if such Partnership Interest or Membership
Interest is represented by a certificate and is a Security for purposes of the UCC, the
procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or
Membership Interest is not represented by a certificate or is not a Security for purposes of
the UCC, the procedure set forth in Section 3.2(a)(ii) hereof;

     (v) with respect to any Note, physical delivery of such Note to the Pledgee, endorsed
in blank, or, at the request of the Pledgee, endorsed to the Pledgee; and

     (vi) with respect to cash proceeds from any of the Collateral described in Section 3.1
hereof, (i) the establishment by the Pledgee of a cash account in the name of such Pledgor
over which the Pledgee shall have “control” within the meaning of the UCC and, at any time
any Event of Default is in existence, no withdrawals or transfers may be made therefrom by
any Person except with the prior written consent of the Pledgee and (ii) the deposit of such
cash in such cash account.

     (b) In addition to the actions required to be taken pursuant to Section 3.2(a) hereof, each
Pledgor shall take the following additional actions with respect to the Collateral:

     (i) with respect to all Collateral of such Pledgor whereby or with respect to which the
Pledgee may obtain “control” thereof within the meaning of Section 8-106 of the UCC (or
under any provision of the UCC as same may be amended or supplemented from time to time, or
under the laws of any relevant State other than the State of New York), such Pledgor shall
take all actions as may be requested from time to time by the Pledgee so that “control” of
such Collateral is obtained and at all times held by the Pledgee; and

     (ii) each Pledgor shall from time to time cause appropriate financing statements (on
appropriate forms) under the Uniform Commercial Code as in effect in the various relevant
States, covering all Collateral hereunder (with the form of such financing statements to be
satisfactory to the Pledgee), to be filed in the relevant filing offices so that at all
times the Pledgee’s security interest in all Investment Property and other Collateral which
can be perfected by the filing of such financing statements (in each case to the maximum
extent perfection by filing may be obtained under the laws of the relevant States,
including, without limitation, Section 9-312(a) of the UCC) is so perfected.

          3.3 Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase,
stock dividend or otherwise) any additional Collateral at any time or from time to time after the
date hereof, such Pledgor will forthwith thereafter take (or cause to be taken) all action with
respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and
will promptly thereafter deliver to the Pledgee a certificate executed by a principal executive
officer of such Pledgor describing such Collateral and certifying that the same have been duly
pledged with the Pledgee hereunder. Each Pledgor further agrees to provide an opinion of counsel
reasonably satisfactory to the Pledgee with respect to any pledge of Collateral constituting
Uncertificated Securities promptly upon request of the Pledgee. No Pledgor shall be required at
any time to pledge hereunder any Securities which constitute more than 65% of the

 

 

total combined voting power of all classes of ownership interests of any Exempted Foreign
Entity entitled to vote. Notwithstanding anything to the contrary contained above in this Section
3.3, except as otherwise required by Section 6.11 of the Credit Agreement, no Pledgor shall be
required to pledge hereunder any Margin Stock acquired by such Pledgor after the date hereof.

     3.4 Certain Representations and Warranties Concerning the Collateral. Each Pledgor
represents and warrants that on the date hereof: (a) each Subsidiary of such Pledgor whose equity
interest is required to be pledged hereunder, and the direct ownership thereof, is listed on Annex
A hereto; (b) the Stock held by such Pledgor consists of the number and type of shares of the stock
of the corporations as described in Annex B hereto; (c) such Stock constitutes that percentage of
the issued and outstanding capital stock of the issuing corporation as set forth in Annex B hereto;
(d) the Notes held by such Pledgor consist of the promissory notes described in Annex C hereto; (e)
such Pledgor is the holder of record and sole beneficial owner of the Stock and Notes held by such
Pledgor and there exists no options or preemption rights in respect of any of the Stock; (f) the
Partnership Interests and Membership Interests, as the case may be, held by such Pledgor constitute
that percentage of the entire interest of the respective Pledged Partnership or Pledged LLC, as the
case may be, as is set forth under its name in Annex D hereto; (g) on the date hereof, such Pledgor
owns or possesses no other Securities except as described on Annexes B, C and D hereto; and (h) the
Pledgor has complied with the respective procedure set forth in Section 3.2(a) hereof with respect
to each item of Collateral described in Annexes B, C and D hereto.

     4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall have the right to
appoint one or more sub-agents for the purpose of retaining physical possession of the Pledged
Securities, which may be held (in the discretion of the Pledgee) in the name of the relevant
Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.

     5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there shall have
occurred and be continuing an Event of Default, each Pledgor shall be entitled to exercise all
voting rights attaching to any and all Pledged Securities owned by it, and to give consents,
waivers or ratifications in respect thereof, provided that no vote shall be cast or any
consent, waiver or ratification given or any action taken which would violate, result in breach of
any covenant contained in, or be inconsistent with, any of the terms of this Agreement, the Credit
Agreement, any other Credit Document or any Secured Interest Rate Agreement (collectively, the
“Secured Debt Agreements”), or which would have the effect of impairing the value of the
Collateral or any part thereof or the position or interests of the Pledgee or any other Secured
Creditor therein. All such rights of a Pledgor to vote and to give consents, waivers and
ratifications shall cease in case an Event of Default shall occur and be continuing and Section 7
hereof shall become applicable.

     6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until an Event of Default shall have
occurred and be continuing, all cash dividends, distributions or other amounts payable in respect
of the Pledged Securities shall be paid to the respective Pledgor, provided that all
dividends, distributions or other amounts payable in respect of the Pledged Securities which are
determined by the Pledgee, in its absolute discretion, to represent in whole or in part an
extraordinary, liquidating or other distribution in return of capital not permitted by

 

 

the Credit Agreement shall be paid, to the extent so determined to represent an extraordinary,
liquidating or other distribution in return of capital not permitted by the Credit Agreement, to
the Pledgee and retained by it as part of the Collateral (unless such cash dividends or
distributions are applied to repay the Obligations pursuant to Section 9 of this Agreement). The
Pledgee shall also be entitled to receive directly, and to retain as part of the Collateral:

     (i) all other or additional stock, notes, membership interests, partnership interests
or other securities or property (other than cash) paid or distributed by way of dividend or
otherwise in respect of the Collateral;

     (ii) all other or additional stock, notes, membership interests, partnership interests
or other securities or property (including cash) paid or distributed in respect of the
Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and

     (iii) all other or additional stock, notes, membership interests, partnership interests
or other securities or property (including cash) which may be paid in respect of the
Collateral by reason of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization (other than the Net Cash Proceeds from any
Asset Sale applied to repay Loans and/or reinvested in accordance with the relevant
provisions of the Credit Agreement).

Nothing contained in this Section 6 shall limit or restrict in any way the Pledgee’s right to
receive the proceeds of the Collateral in any form in accordance with Section 3 of this Agreement.
All dividends, distributions or other payments which are received by the respective Pledgor
contrary to the provisions of this Section 6 or Section 7 shall be received in trust for the
benefit of the Pledgee, shall be segregated from other property or funds of such Pledgor and shall
be forthwith paid over to the Pledgee as Collateral in the same form as so received (with any
necessary endorsement).

     7. REMEDIES IN CASE OF AN EVENT OF DEFAULT. (a) In case an Event of Default shall
have occurred and be continuing, the Pledgee shall be entitled to exercise all of the rights,
powers and remedies (whether vested in it by this Agreement or any other Secured Debt Agreement or
by law) for the protection and enforcement of its rights in respect of the Collateral, including,
without limitation, all the rights and remedies of a secured party upon default under the Uniform
Commercial Code of the State of New York, and the Pledgee shall be entitled, without limitation, to
exercise any or all of the following rights, which each Pledgor hereby agrees to be commercially
reasonable:

     (i) to receive all amounts payable in respect of the Collateral otherwise payable under
Section 6 to such Pledgor;

     (ii) to transfer all or any part of the Collateral into the Pledgee’ s name or the name
of its nominee or nominees;

 

 

     (iii) to accelerate any Pledged Note which may be accelerated in accordance with its
terms, and take any other lawful action to collect upon any Pledged Note (including, without
limitation, to make any demand for payment thereon);

     (iv) to vote all or any part of the Collateral (whether or not transferred into the
name of the Pledgee) and give all consents, waivers and ratifications in respect of the
Collateral and otherwise act with respect thereto as though it were the outright owner
thereof (each Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy
and attorney-in-fact of such Pledgor, with full power of substitution to do so);

     (v) to set off any and all Collateral against any and all Obligations, and to withdraw
any and all cash or other Collateral from any and all Collateral Accounts and to apply such
cash and other Collateral to the payment of any and all Obligations; and

     (vi) at any time or from time to time to sell, assign and deliver, or grant options to
purchase, all or any part of the Collateral, or any interest therein, at any public or
private sale, without demand of performance, advertisement or notice of intention to sell or
of the time or place of sale or adjournment thereof or to redeem or otherwise (all of which
are hereby waived by each Pledgor), for cash, on credit or for other property, for immediate
or future delivery without any assumption of credit risk, and for such price or prices and
on such terms as the Pledgee in its absolute discretion may determine, provided that
at least 10 days’ notice of the time and place of any such sale shall be given to such
Pledgor. The Pledgee shall not be obligated to make such sale of Collateral regardless of
whether any such notice of sale has theretofore been given. Each purchaser at any such sale
shall hold the property so sold absolutely free from any claim or right on the part of any
Pledgor, and each Pledgor hereby waives and releases to the fullest extent permitted by law
any right or equity of redemption with respect to the Collateral, whether before or after
sale hereunder, all rights, if any, of marshalling the Collateral and any other security for
the Obligations or otherwise, and all rights, if any, of stay and/or appraisal which it now
has or may at any time in the future have under rule of law or statute now existing or
hereafter enacted. At any such sale, unless prohibited by applicable law, the Pledgee on
behalf of all Secured Creditors (or certain of them) may bid for and purchase (by bidding in
Obligations or otherwise) all or any part of the Collateral so sold free from any such right
or equity of redemption. Neither the Pledgee nor any Secured Creditor shall be liable for
failure to collect or realize upon any or all of the Collateral or for any delay in so doing
nor shall it be under any obligation to take any action whatsoever with regard thereto.

     8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the Pledgee provided
for in this Agreement or any other Secured Debt Agreement, or now or hereafter existing at law or
in equity or by statute shall be cumulative and concurrent and shall be in addition to every other
such right, power or remedy. The exercise or beginning of the exercise by the Pledgee or any other
Secured Creditor of any one or more of the rights, powers or remedies provided for in this
Agreement or any other Secured Debt Agreement or now or hereafter existing at law or in equity or
by statute or otherwise shall not preclude the simultaneous or later exercise by the Pledgee or any
other Secured Creditor of all such other rights, powers or remedies, and no failure or delay on the
part of the Pledgee or any other

 

 

Secured Creditor to exercise any such right, power or remedy shall operate as a waiver
thereof. Unless otherwise required by the Credit Documents, no notice to or demand on any Pledgor
in any case shall entitle it to any other or further notice or demand in similar other
circumstances or constitute a waiver of any of the rights of the Pledgee or any other Secured
Creditor to any other further action in any circumstances without demand or notice. The Secured
Creditors agree that this Agreement may be enforced only by the action of the Administrative Agent
or the Pledgee, in each case acting upon the instructions of the Required Lenders (or, after the
date on which all Credit Document Obligations have been paid in full, the holders of at least the
majority of the outstanding Interest Rate Obligations) and that no other Secured Creditor shall
have any right individually to seek to enforce or to enforce this Agreement or to realize upon the
security to be granted hereby, it being understood and agreed that such rights and remedies may be
exercised by the Administrative Agent or the Pledgee or the holders of at least a majority of the
outstanding Interest Rate Obligations, as the case may be, for the benefit of the Secured Creditors
upon the terms of this Agreement.

     9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee or the Collateral
Agent upon any sale or other disposition of the Collateral, together with all other moneys received
by the Pledgee or the Collateral Agent hereunder, shall be applied as follows:

     (i) first, to the payment of all Obligations owing to the Pledgee or the
Collateral Agent of the type described in clauses (iii) and (iv) of the definition of
“Obligations” contained in Section 1 hereof;

     (ii) second, to the extent proceeds remain after the application pursuant to
preceding clause (i), an amount equal to the outstanding Obligations to the Secured
Creditors shall be paid to the Secured Creditors as provided in Section 9(c), with each
Secured Creditor receiving an amount equal to its outstanding Obligations or, if the
proceeds are insufficient to pay in full all such Obligations, its Pro Rata Share of
the amount remaining to be distributed to be applied, with respect to the Credit Document
Obligations, firstly, to the payment of interest in respect of the unpaid principal
amount of Loans outstanding, secondly, to the payment of principal of Loans
outstanding, then to the other Credit Document Obligations; and

     (iii) third, to the extent proceeds remain after the application pursuant to
the preceding clauses (i) and (ii) and following the termination of this Agreement pursuant
to Section 18 hereof, to the relevant Pledgor or, to the extent directed by such Pledgor or
a court of competent jurisdiction, to whomever may be lawfully entitled to receive such
surplus.

     (b) For purposes of this Agreement, “Pro Rata Share” shall mean, when calculating a
Secured Creditor’s portion of any distribution or amount, the amount (expressed as a percentage)
equal to a fraction the numerator of which is the then outstanding amount of the relevant
Obligations owed such Secured Creditor and the denominator of which is the then outstanding amount
of all Obligations.

 

 

     (c) All payments required to be made to the (i) Lender Creditors hereunder shall be made to
the Administrative Agent for the account of the respective Lender Creditors and (ii) Interest Rate
Creditors hereunder shall be made to the paying agent under the applicable Secured Interest Rate
Agreement or, in the case of Secured Interest Rate Agreements without a paying agent, directly to
the applicable Interest Rate Creditor.

     (d) For purposes of applying payments received in accordance with this Section 9, the Pledgee
and the Collateral Agent shall be entitled to rely upon (i) the Administrative Agent for a
determination (which the Administrative Agent agrees to provide upon request to the Pledgee and the
Collateral Agent) of the outstanding Credit Document Obligations and (ii) any Interest Rate
Creditor for a determination (which each Interest Rate Creditor agrees to provide upon request to
the Pledgee and the Collateral Agent) of the outstanding Interest Rate Obligations owed to such
Interest Rate Creditor. Unless it has actual knowledge (including by way of written notice from a
Secured Creditor) to the contrary, the Administrative Agent under the Credit Agreement, in
furnishing information pursuant to the preceding sentence, and the Pledgee and the Collateral
Agent, in acting hereunder, shall be entitled to assume that (x) no Credit Document Obligations
other than principal, interest and regularly accruing fees are owing to any Lender Creditor and (y)
no Secured Interest Rate Agreements or Interest Rate Obligations with respect thereto are in
existence.

     (e) It is understood that each Pledgor shall remain jointly and severally liable to the extent
of any deficiency between (x) the amount of the Obligations for which it is liable directly or as a
Guarantor that are satisfied with proceeds of the Collateral and (y) the aggregate outstanding
amount of the Obligations.

     10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Pledgee
hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or
otherwise), the receipt of the Pledgee or the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or
purchasers shall not be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the misapplication or
nonapplication thereof.

     11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to indemnify and hold
harmless the Pledgee and the other Secured Creditors from and against any and all claims, demands,
losses, judgments and liabilities (including liabilities for penalties) of whatsoever kind or
nature, and (ii) to reimburse the Pledgee for all reasonable out-of-pocket costs and expenses,
including reasonable attorneys’ fees, arising in connection with any amendment, waiver or
modification to this Agreement and the Pledgee and the other Secured Creditors for all reasonable
costs and expenses (including reasonable attorney’s fees) growing out of or resulting from the
exercise by the Pledgee of any right or remedy granted to it hereunder or under any other Secured
Debt Agreement except, with respect to clauses (i) and (ii) above, for those arising from such
Person’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction
in a final and non-appealable decision). In no event shall the Pledgee be liable, in the absence
of gross negligence or willful misconduct on its part (as determined by a court of competent
jurisdiction in a final and non-appealable decision), for any matter or thing in connection with
this Agreement other than to account for moneys or

 

 

other property actually received by it in accordance with the terms hereof. If and to the
extent that the obligations of any Pledgor under this Section 11 are unenforceable for any reason,
such Pledgor hereby agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.

     12. FURTHER ASSURANCES; POWER OF ATTORNEY. (a) Each Pledgor agrees that it will join
with the Pledgee in executing and, at such Pledgor’s own expense, file and refile under the Uniform
Commercial Code such financing statements, continuation statements and other documents in such
offices as the Pledgee may reasonably deem necessary or appropriate and wherever required or
permitted by law in order to perfect and preserve the Pledgee’s security interest in the Collateral
hereunder and hereby authorizes the Pledgee to file financing statements and amendments thereto
relative to all or any part of the Collateral without the signature of such Pledgor where permitted
by law, and agrees to do such further acts and things and to execute and deliver to the Pledgee
such additional conveyances, assignments, agreements and instruments as the Pledgee may reasonably
require or deem advisable to carry into effect the purposes of this Agreement or to further assure
and confirm unto the Pledgee its rights, powers and remedies hereunder or thereunder.

     (b) Each Pledgor hereby appoints the Pledgee, such Pledgor’s attorney-in-fact, with full
authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, from
time to time after the occurrence and during the continuance of an Event of Default, in the
Pledgee’s reasonable discretion to take any action and to execute any instrument which the Pledgee
may reasonably deem necessary or advisable to accomplish the purposes of this Agreement.

     13. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will hold in accordance with this
Agreement all items of the Collateral at any time received under this Agreement. It is expressly
understood and agreed that the obligations of the Pledgee as holder of the Collateral and interests
therein and with respect to the disposition thereof, and otherwise under this Agreement, are only
those expressly set forth in this Agreement. The Pledgee shall act hereunder on the terms and
conditions set forth herein and in Section 10 of the Credit Agreement.

     14. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise dispose of, grant any
option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any
interest therein (except in accordance with the terms of this Agreement and the other Secured Debt
Agreements).

     15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a) Each Pledgor
represents, warrants and covenants that:

     (i) it is, or at the time when pledged hereunder will be, the legal, beneficial and
record owner of, and has (or will have) good and marketable title to, all Securities pledged
by it hereunder, subject to no pledge, lien, mortgage, hypothecation, security interest,
charge, option or other encumbrance whatsoever, except (x) the liens and security interests
created by this Agreement and (y) liens permitted by Section 7.03(a) of the Credit
Agreement;

 

 

     (ii) it has full power, authority and legal right to pledge all the Collateral pledged
by it pursuant to this Agreement;

     (iii) this Agreement has been duly authorized, executed and delivered by such Pledgor
and constitutes a legal, valid and binding obligation of such Pledgor enforceable in
accordance with its terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors’ rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law);

     (iv) except to the extent already obtained or made, no consent of any other party
(including, without limitation, any stockholder, limited or general partner, member or
creditor of such Pledgor or any of its Subsidiaries) and no consent, license, permit,
approval or authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained by such Pledgor in
connection with (a) the execution, delivery or performance of this Agreement, (b) the
validity or enforceability of this Agreement, (c) the perfection or enforceability of the
Pledgee’s security interest in the Collateral or (d) except for compliance with or as may be
required by applicable securities laws, the exercise by the Pledgee of any of its rights or
remedies provided herein;

     (v) the execution, delivery and performance of this Agreement by such Pledgor will not
violate any provision of any applicable law or regulation or of any order, judgment, writ,
award or decree of any court, arbitrator or governmental authority, domestic or foreign,
applicable to such Pledgor, or of the certificate of incorporation, certificate of
formation, by-laws, certificate of limited partnership, partnership agreement or limited
liability company agreement, as the case may be, of such Pledgor or of any securities issued
by such Pledgor or any of its Subsidiaries, or of any mortgage, indenture, lease, loan
agreement, credit agreement or other material contract, agreement or instrument or
undertaking to which such Pledgor or any of its Subsidiaries is a party or which purports to
be binding upon such Pledgor or any of its Subsidiaries or upon any of their respective
assets and will not result in the creation or imposition of (or the obligation to create or
impose) any lien or encumbrance on any of the assets of such Pledgor or any of its
Subsidiaries except as contemplated by this Agreement;

     (vi) all the shares of the Stock have been duly and validly issued, are fully paid and
non-assessable and are subject to no options to purchase or similar rights;

     (vii) each of the Pledged Notes constitutes, or when executed by the obligor thereof
will constitute, the legal, valid and binding obligation of such obligor, enforceable in
accordance with its terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors’ rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law);

     (viii) the pledge, assignment and delivery to the Pledgee of the Securities (other than
those constituting Uncertificated Securities) pursuant to this Agreement creates a

 

 

valid and, assuming such Securities are held in the continued possession of the
Collateral Agent in the State of New York, perfected first priority Lien in the Securities
and the proceeds thereof, subject to no other Lien or to any agreement purporting to grant
to any third party a Lien on the property or assets of such Pledgor which would include the
Securities (other than Liens permitted by Section 7.03(a) of the Credit Agreement);

     (ix) it has the unqualified right to pledge and grant a security interest in the
Partnership Interests and Membership Interests as herein provided without the consent of any
other Person, firm, association or entity which has not been obtained;

     (x) the Partnership Interests and the Membership Interests pledged by it pursuant to
this Agreement have been validly acquired and are fully paid for and are duly and validly
pledged hereunder;

     (xi) it is not in default in the payment of any portion of any mandatory capital
contribution, if any, required to be made under any partnership agreement or limited
liability company agreement to which such Pledgor is a party, and such Pledgor is not in
violation of any other material provisions of any partnership agreement or limited liability
company agreement to which such Pledgor is a party, or otherwise in default or violation
thereunder, no Partnership Interest or Membership Interest is subject to any defense, offset
or counterclaim, nor have any of the foregoing been asserted or alleged against such Pledgor
by any Person with respect thereto and as of the Closing Date, there are no certificates,
instruments, documents or other writings (other than the partnership agreements and
certificates, if any, delivered to the Collateral Agent) which evidence any Partnership
Interest or Membership Interest of such Pledgor;

     (xii) the pledge and assignment of the Partnership Interests and the Membership
Interests pursuant to this Agreement, together with the relevant filings, consents or
recordings (which filings, consents and recordings have been made or obtained), creates a
valid, perfected and continuing first security interest in such Partnership Interests and
Membership Interest and the proceeds thereof, subject to no prior lien or encumbrance or to
any agreement purporting to grant to any third party a lien or encumbrance on the property
or assets of such Pledgor which would include the Collateral;

     (xiii) other than financing statements pursuant to Liens permitted under Section 7.04
of the Credit Agreement, there are no currently effective financing statements under the UCC
covering any property which is now or hereafter may be included in the Collateral and such
Pledgor will not, without the prior written consent of the Pledgee, execute and, until the
Termination Date (as hereinafter defined), there will not ever be on file in any public
office, any enforceable financing statement or statements covering any or all of the
Collateral, except financing statements filed or to be filed in favor of the Pledgee as
secured party;

     (xiv) it shall give the Pledgee prompt notice of any written claim relating to the
Collateral and shall deliver to the Pledgee a copy of each other demand, notice or document
received by it which may adversely affect the Pledgee’s interest in the

 

 

Collateral promptly upon, but in any event within 10 days after, such Pledgor’ s
receipt thereof;

     (xv) it shall not withdraw as a partner of any Pledged Partnership or member of any
Pledged LLC, or file or pursue or take any action which may, directly or indirectly, cause a
dissolution or liquidation of or with respect to any Pledged Partnership or Pledged LLC or
seek a partition of any property of any Pledged Partnership or Pledged LLC, except as
permitted by the Credit Agreement;

     (xvi) as of the date hereof, all of its Partnership Interests and Membership Interests
are uncertificated (other than the Membership Interests of Northern New England Telephone
Operations LLC and Fretel Communications, LLC) and each Pledgor covenants and agrees that it
will not approve of any action by any Pledged Partnership or Pledged LLC to convert such
uncertificated interests into certificated interests;

     (xvii) it will take no action which would violate or be inconsistent with any of the
terms of any Secured Debt Agreement, or which would have the effect of impairing the
position or interests of the Pledgee or any other Secured Creditor under any Secured Debt
Agreement except as permitted by the Credit Agreement; and

     (xviii) “control” (as defined in Section 8-106 of the UCC) has been obtained by the
Pledgee over all of such Pledgor’s Collateral consisting of Securities (including, without
limitation, Notes which are Securities) with respect to which such “control” may be obtained
pursuant to Section 8-106 of the UCC, except to the extent that the obligation of the
applicable Pledgor to provide the Pledgee with “control” of such Collateral has not yet
arisen under this Agreement; provided that in the case of the Pledgee obtaining
“control” over Collateral consisting of a Security Entitlement, such Pledgor shall have
taken all steps in its control so that the Pledgee obtains “control” over such Security
Entitlement.

          16. PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor under this
Agreement shall be absolute and unconditional and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by,
any circumstance or occurrence whatsoever, including, without limitation:

     (i) any renewal, extension, amendment or modification of, or addition or supplement to
or deletion from any of the Secured Debt Agreements, or any other instrument or agreement
referred to therein, or any assignment or transfer of any thereof;

     (ii) any waiver, consent, extension, indulgence or other action or inaction under or in
respect of any such agreement or instrument or this Agreement;

     (iii) any furnishing of any additional security to the Pledgee or its assignee or any
acceptance thereof or any release of any security by the Pledgee or its assignee;

 

 

     (iv) any limitation on any party’s liability or obligations under any such instrument
or agreement or any invalidity or unenforceability, in whole or in part, of any such
instrument or agreement or any term thereof; or

     (v) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to such Pledgor or any Subsidiary of such
Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or
by any court, in any such proceeding, whether or not such Pledgor shall have notice or
knowledge of any of the foregoing.

          17. REGISTRATION, ETC. (a) If an Event of Default shall have occurred and be
continuing and any Pledgor shall have received from the Pledgee a written request or requests that
such Pledgor cause any registration, qualification or compliance under any Federal or state
securities law or laws to be effected with respect to all or any part of the Pledged Stock, such
Pledgor as soon as practicable and at its expense will use its best efforts to cause such
registration to be effected (and be kept effective) and will use its best efforts to cause such
qualification and compliance to be effected (and be kept effective) as may be so requested and as
would permit or facilitate the sale and distribution of such Pledged Stock, including, without
limitation, registration under the Securities Act, as then in effect (or any similar statute then
in effect), appropriate qualifications under applicable blue sky or other state securities laws and
appropriate compliance with any other governmental requirements, provided that the Pledgee
shall furnish to such Pledgor such information regarding the Pledgee as such Pledgor may request in
writing and as shall be required in connection with any such registration, qualification or
compliance. Each Pledgor will cause the Pledgee to be kept reasonably advised in writing as to the
progress of each such registration, qualification or compliance and as to the completion thereof,
will furnish to the Pledgee such number of prospectuses, offering circulars and other documents
incident thereto as the Pledgee from time to time may reasonably request, and will indemnify, to
the extent permitted by law, the Pledgee, each other Secured Creditor and all others participating
in the distribution of such Pledged Stock against all claims, losses, damages or liabilities caused
by any untrue statement (or alleged untrue statement) of a material fact contained therein (or in
any related registration statement, notification or the like) or by any omission (or alleged
omission) to state therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same may have been caused by an untrue statement or omission
based upon information furnished in writing to such Pledgor by the Pledgee or such other Secured
Creditor expressly for use therein.

          (b) If at any time when the Pledgee shall determine to exercise its right to sell all or any
part of the Pledged Securities pursuant to Section 7, and such Pledged Securities or the part
thereof to be sold shall not, for any reason whatsoever, be effectively registered under the
Securities Act, as then in effect, the Pledgee may, in its sole and absolute discretion, sell such
Pledged Securities or part thereof by private sale in such manner and under such circumstances as
the Pledgee may deem necessary or advisable in order that such sale may legally be effected without
such registration. Without limiting the generality of the foregoing, in any such event the
Pledgee, in its sole and absolute discretion, (i) may proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering such Pledged

 

 

Securities or part thereof shall have been filed under such Securities Act, (ii) may approach
and negotiate with a single possible purchaser to effect such sale and (iii) may restrict such sale
to a purchaser who will represent and agree that such purchaser is purchasing for its own account,
for investment, and not with a view to the distribution or sale of such Pledged Securities or part
thereof. In the event of any such sale, the Pledgee shall incur no responsibility or liability for
selling all or any part of the Pledged Securities at a price which the Pledgee, in its sole and
absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized if the sale were deferred until the
registration as aforesaid.

          18. TERMINATION; RELEASE. (a) After the Termination Date (as defined below), this
Agreement shall terminate (provided that all indemnities set forth herein including,
without limitation, in Section 11 hereof shall survive any such termination) and the Pledgee, at
the request and expense of the respective Pledgor, will execute and deliver to such Pledgor a
proper instrument or instruments acknowledging the satisfaction and termination of this Agreement
as provided above, and will duly assign, transfer and deliver to such Pledgor (without recourse and
without any representation or warranty) such of the Collateral as may be in the possession of the
Pledgee and as has not theretofore been sold or otherwise applied or released pursuant to this
Agreement, together with any moneys at the time held by the Pledgee hereunder and, with respect to
any Collateral consisting of an Uncertificated Security, a Partnership Interest or a Membership
Interest (other than an Uncertificated Security, Partnership Interest or Membership Interest
credited on the books of a Clearing Corporation or Securities Intermediary), a termination of the
agreement relating thereto executed and delivered by the issuer of such Uncertificated Security
pursuant to Section 3.2(a)(ii) or by the respective partnership or limited liability company
pursuant to Section 3.2(a)(iv)(2). As used in this Agreement, “Termination Date” shall
mean the date upon which the Total Commitment and all Secured Interest Rate Agreements have been
terminated, no Note under the Credit Agreement is outstanding (and all Loans have been paid in
full) and all other Obligations have been paid in full (other than arising from indemnities for
which no request has been made).

          (b) In the event that any part of the Collateral is sold or otherwise disposed of in
connection with a sale or other disposition permitted by Section 7.02 of the Credit Agreement or is
otherwise released at the direction of the Required Lenders (or all the Lenders if required by
Section 11.11 of the Credit Agreement), and the proceeds of such sale or other disposition or from
such release are applied in accordance with the terms of the Credit Agreement to the extent
required to be so applied, the Pledgee, at the request and expense of the respective Pledgor, will
release such Collateral from this Agreement, duly assign, transfer and deliver to such Pledgor
(without recourse and without any representation or warranty) such of the Collateral as is then
being (or has been) so sold, disposed of or released and as may be in possession of the Pledgee and
has not theretofore been released pursuant to this Agreement.

          (c) At any time that any Pledgor desires that Collateral be released as provided in the
foregoing Section 18(a) or (b), it shall deliver to the Pledgee a certificate signed by a principal
executive officer stating that the release of the respective Collateral is permitted pursuant to
Section 18(a) or (b). The Pledgee shall have no liability whatsoever to any Secured Creditor as
the result of any release of Collateral by it in accordance with (or which the Pledgee

 

 

in the absence of gross negligence and willful misconduct believes to be in accordance with)
this Section 18.

          19. NOTICES, ETC. All notices and other communications hereunder shall be in writing
(including telegraphic, telex, telecopier, facsimile or cable communication) and shall be
delivered, telegraphed, telexed, telecopied, faxed, cabled, or mailed (by first class mail, postage
prepaid):

     (i) if to any Pledgor, at its address set forth opposite its signature below;

     (ii) if to the Pledgee, at:

Lehman Commercial Paper Inc.

745 Seventh Avenue

New York, New York 10019

Attention: Loan Portfolio Group

Fax: (646) 834-4825

     (iii) if to any Lender Creditor (other than the Pledgee), either (x) to the
Administrative Agent, at the address of the Administrative Agent specified in the Credit
Agreement or (y) at such address as such Lender Creditor shall have specified in the Credit
Agreement;

     (iv) if to any Interest Rate Creditor, at such address as such Interest Rate Creditor
shall have specified in writing to the Pledgors and the Pledgee;

or at such other address as shall have been furnished in writing by any Person described above to
the party required to give notice hereunder.

          20. WAIVER; AMENDMENT. None of the terms and conditions of this Agreement may be
changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the
Pledgee (with the consent of the Required Lenders or, to the extent required by Section 11.11 of
the Credit Agreement, all of the Lenders) and each Pledgor affected thereby, provided that
(i) no such change, waiver, modification or variance shall be made to Section 9 hereof or this
Section 20 without the consent of each Secured Creditor adversely affected thereby and (ii) any
change, waiver, modification or variance affecting the rights and benefits of a single Class (as
defined below) of Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall require the written consent of the Requisite Creditors (as defined below) of such Class of
Secured Creditors. For the purpose of this Agreement, the term “Class” shall mean each
class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of the Credit
Document Obligations or (y) the Interest Rate Creditors as holders of the Interest Rate
Obligations. For the purpose of this Agreement, the term “Requisite Creditors” of any Class
shall mean (x) with respect to the Credit Document Obligations, the Required Lenders (or, to the
extent required by Section 11.11 of the Credit Agreement, all of the Lenders) and (y) with respect
to the Interest Rate Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Secured Interest Rate Agreements.

 

 

          21. PLEDGEE NOT BOUND. (a) Nothing herein shall be construed to make the Pledgee or
any other Secured Creditor liable as a general partner or limited partner of any Pledged
Partnership or a member of any Pledged LLC, and neither the Pledgee nor any Secured Creditor by
virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have
any of the duties, obligations or liabilities of a general partner or limited partner of any
Pledged Partnership or a member of any Pledged LLC. The parties hereto expressly agree that,
unless the Pledgee shall become the absolute owner of a Partnership Interest or a Membership
Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint
venture or membership agreement among the Pledgee, any other Secured Creditor and/or a Pledgor.

          (b) Except as provided in the last sentence of paragraph (a) of this Section 21, the Pledgee,
by accepting this Agreement, does not intend to become a general partner or limited partner of any
Pledged Partnership or a member of any Pledged LLC or otherwise be deemed to be a co-venturer with
respect to any Pledgor or any Pledged Partnership or a member of any Pledged LLC either before or
after an Event of Default shall have occurred. The Pledgee shall have only those powers set forth
herein and shall assume none of the duties, obligations or liabilities of a general partner or
limited partner of any Pledged Partnership or of a member of any Pledged LLC or of a Pledgor.

          (c) The Pledgee shall not be obligated to perform or discharge any obligation of a Pledgor as
a result of the collateral assignment hereby effected.

          (d) The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges
and authority so created, shall not at any time or in any event obligate the Pledgee to appear in
or defend any action or proceeding relating to the Collateral to which it is not a party, or to
take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or
discharge any obligation, duty or liability under the Collateral.

          22. MISCELLANEOUS. This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect, subject to release and/or termination as
set forth in Section 18, (ii) be binding upon each Pledgor, its successors and assigns;
provided that no Pledgor shall assign any of its rights or obligations hereunder without
the prior written consent of the Pledgee (with the prior written consent of the Required Lenders or
to the extent required by Section 11.11 of the Credit Agreement, all of the Lenders), and (iii)
inure, together with the rights and remedies of the Pledgee hereunder, to the benefit of the
Pledgee, the other Secured Creditors and their respective successors, transferees and assigns. The
headings of the several sections and subsections in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which together shall
constitute one instrument. In the event that any provision of this Agreement shall prove to be
invalid or unenforceable, such provision shall be deemed to be severable from the other provisions
of this Agreement which shall remain binding on all parties hereto.

          23. GOVERNING LAW, ETC. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN

 

 

ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS. Any legal action or proceeding with respect to this Agreement or any other Credit Document
may be brought in the courts of the State of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Agreement, each NSG Pledgor
hereby irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each NSG Pledgor further irrevocably
consents to the service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to
each NSG Pledgor at its address set forth opposite its signature below, such service to become
effective 30 days after such mailing. Nothing herein shall affect the right of any of the Secured
Creditors to serve process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against any Pledgor in any other jurisdiction.

          (b) Each NSG Pledgor hereby irrevocably waives any objection which it may now or hereafter
have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in
connection with this Agreement or any other Credit Document brought in the courts referred to in
clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such
court that such action or proceeding brought in any such court has been brought in an inconvenient
forum.

          (c) EACH PLEDGOR AND THE PLEDGEE HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

          24. ADDITIONAL PLEDGORS. It is understood and agreed that any Subsidiary of the
Borrower that is required to execute a counterpart of this Agreement pursuant to the Credit
Agreement shall become a Pledgor hereunder by executing a counterpart hereof and delivering the
same to the Pledgee and Annexes A, B, C and D will be modified at such time in a manner acceptable
to the Pledgee to give effect to such additional Pledgor.

          25. COUNTERPARTS. This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the same instrument. A
set of counterparts executed by all the parties hereto shall be lodged with each Pledgor and the
Pledgee.

          26. CONTRIBUTION. At any time a payment is made by any Pledgor (other than the
Borrower) (each, a “Subsidiary Pledgor”) in respect of the Obligations from the proceeds of
any sale or other disposition of Collateral owned by such Subsidiary Pledgor (each, a “Relevant
Payment”), the right of contribution of each Subsidiary Pledgor hereunder against each other
such Subsidiary Pledgor shall be determined as provided in the immediately following sentence, with
the right of contribution of each Subsidiary Pledgor to be revised and restated as of each date on
which a Relevant Payment is made. At any time that a Relevant Payment is made by a Subsidiary
Pledgor that results in the aggregate payments made by such Subsidiary

 

 

Pledgor hereunder in respect of the Obligations to and including the date of the Relevant
Payment exceeding such Subsidiary Pledgor’s Contribution Percentage (as defined below) of the
aggregate payments made by all Subsidiary Pledgors hereunder in respect of the Obligations from the
proceeds of any sale or other disposition of Collateral owned by the Subsidiary Pledgors to and
including the date of the Relevant Payment (such excess, the “Aggregate Excess Amount”),
each such Subsidiary Pledgor shall have a right of contribution against each other Subsidiary
Pledgor who either has not made any payments or has made (or whose Collateral has been used to
make) payments hereunder in respect of the Obligations to and including the date of the Relevant
Payment in an aggregate amount less than such other Subsidiary Pledgor’s Contribution Percentage of
the aggregate payments made to and including the date of the Relevant Payment by all Subsidiary
Pledgors hereunder in respect of the Obligations from the proceeds of any sale or other disposition
of Collateral owned by the Subsidiary Pledgors (the aggregate amount of such deficit, the
“Aggregate Deficit Amount”) in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Subsidiary Pledgor and the denominator of which is the
Aggregate Excess Amount of all Subsidiary Pledgors multiplied by (y) the Aggregate Deficit Amount
of such other Subsidiary Pledgor. A Subsidiary Pledgor’s right of contribution pursuant to the
preceding sentences shall arise at the time of each computation, subject to adjustment to the time
of any subsequent computation; provided, that no Subsidiary Pledgor may take any action to
enforce such right until the Obligations have been paid in full and the Total Commitment has been
terminated, it being expressly recognized and agreed by all parties hereto that any Subsidiary
Pledgor’s right of contribution arising pursuant to this Agreement against any other Subsidiary
Pledgor shall be expressly junior and subordinate to such other Subsidiary Pledgor’s obligations
and liabilities in respect of the Obligations and any other obligations owing under this Agreement.
As used in this Section 26: (i) each Subsidiary Pledgor’s “Contribution Percentage” shall
mean the percentage obtained by dividing (x) the Adjusted Net Worth (as defined below) of such
Subsidiary Pledgor by (y) the aggregate Adjusted Net Worth of all Subsidiary Pledgors; (ii) the
“Adjusted Net Worth” of each Subsidiary Pledgor shall mean the greater of (x) the Net Worth
(as defined below) of such Subsidiary Pledgor and (y) zero; and (iii) the “Net Worth” of
each Subsidiary Pledgor shall mean the amount by which the fair salable value of such Subsidiary
Pledgor’s assets on the date of any Relevant Payment exceeds its existing debts and other
liabilities (including contingent liabilities, but without giving effect to any obligations arising
under this Agreement, any Guaranteed Obligations under, and as defined in, the Subsidiary Guaranty)
on such date. All parties hereto recognize and agree that, except for any right of contribution
arising pursuant to this Section 26, each Subsidiary Pledgor who makes (or whose Collateral has
been used to make) any payment in respect of the Obligations shall have no right of contribution or
subrogation against any other Subsidiary Pledgor in respect of such payment. Each of the
Subsidiary Pledgors recognizes and acknowledges that the rights to contribution arising hereunder
shall constitute an asset in favor of the party entitled to such contribution. In this connection,
each Subsidiary Pledgor has the right to waive its contribution right against any Subsidiary
Pledgor to the extent that after giving effect to such waiver such Subsidiary Pledgor would remain
solvent, in the determination of the Required Lenders.

          27. LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A
TRANSMITTING UTILITY); JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION
NUMBERS; 

 

 

CHANGES THERETO; ETC. No Pledgor shall change its legal name, its type of
organization, its status as a Registered Organization (in the case of a Registered Organization),
its status as a Transmitting Utility or as a Person which is not a Transmitting Utility, as the
case may be, its jurisdiction of organization, its Location, or its organizational identification
number (if any), except that any such changes shall be permitted (so long as not in violation of
the applicable requirements of the Secured Debt Agreements and so long as same do not involve (x) a
Registered Organization ceasing to constitute same or (y) any Pledgor changing its jurisdiction of
organization or Location from the United States or a State thereof to a jurisdiction of
organization or Location, as the case may be, outside the United States or a State thereof) if (i)
it shall have given to the Collateral Agent not less than 10 days’ prior written notice of each
change to its legal name, its type of organization, whether or not it is a Registered Organization,
its jurisdiction of organization, its Location, its organizational identification number (if any),
and whether or not it is a Transmitting Utility, and (ii) in connection with the respective change
or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain
the security interests of the Collateral Agent in the Collateral intended to be granted hereby at
all times fully perfected and in full force and effect. In addition, to the extent that any
Pledgor does not have an organizational identification number on the date hereof and later obtains
one, such Pledgor shall promptly thereafter deliver a notification of the Collateral Agent of such
organizational identification number and shall take all actions reasonably satisfactory to the
Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent
in the Collateral intended to be granted hereby fully perfected and in full force and effect.

          28. CHANGE OF CONTROL. The Pledgee acknowledges that, under existing law, a change of
control of a Subsidiary whose equity interests are pledged hereunder as a result of a proposed
exercise of remedies hereunder may require the prior approval of the FCC and/or a PUC. The Pledgee
further acknowledges that, notwithstanding the provisions of Section 5 and Sections 7(a)(ii), (iv)
and (vi), with respect to any Collateral constituting Securities issued by a Person organized under
the laws of any State of the United States, to the extent (and only to the extent) that applicable
law specifically requires that regulatory approval be obtained prior to such Pledgee enforcing its
rights hereunder with respect to such Collateral, the Pledgee shall not be entitled to enforce its
rights hereunder with respect to such Collateral without first obtaining such required regulatory
approval.

          29. SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

          30. HEADINGS DESCRIPTIVE. The headings of the several Sections of this Agreement are
inserted for convenience only and shall not in any way affect the meaning or construction of any
provision of this Agreement.

* * * *

 

 

          IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this Agreement to be executed and
delivered by their duly authorized officers as of the date first above written.

	 	 	 	 	 
	Address:
521 East Morehead Street
Charlotte, NC 28202	 FAIRPOINT COMMUNICATIONS, INC.

as a Pledgor

 	 
	 	By:  	                                            /s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 
	Address:
c/o FAIRPOINT COMMUNICATIONS, INC.
521 East Morehead Street
Charlotte, NC 28202	MJD VENTURES, INC.,

 as a Pledgor
 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 
	Address:
c/o FAIRPOINT COMMUNICATIONS, INC.
521 East Morehead Street

Charlotte, NC 28202
	MJD SERVICES CORP.,

 as a Pledgor
 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 
	Address: 
c/o FAIRPOINT COMMUNICATIONS, INC.
521 East Morehead Street

Charlotte, NC 28202	S T ENTERPRISES, LTD.,

 as a Pledgor

 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 
	Address:
c/o FAIRPOINT COMMUNICATIONS, INC.
521 East Morehead Street

Charlotte, NC 28202	FAIRPOINT CARRIER SERVICES, INC.,
as a Pledgor
 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 
	Address:
c/o FAIRPOINT COMMUNICATIONS, INC.
521 East Morehead Street

Charlotte, NC 28202	FAIRPOINT BROADBAND, INC.,
as a Pledgor
 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 

PLEDGE AGREEMENT

 

 

	 	 	 	 	 
	Address:

c/o FAIRPOINT COMMUNICATIONS, INC.
521 East Morehead Street
Charlotte, NC 28202
 	FAIRPOINT LOGISTICS, INC.
as a Pledgor
 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 
	Address:
c/o FAIRPOINT COMMUNICATIONS, INC.

521 East Morehead Street
Charlotte, NC 28202
	ENHANCED COMMUNICATIONS OF NORTHERN NEW ENGLAND INC.
as a Pledgor
 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 
	Address: 
c/o FAIRPOINT COMMUNICATIONS, INC.
521 East Morehead Street

Charlotte, NC 28202
	UTILITIES, INC.

as a Pledgor

 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 
	Address:
c/o FAIRPOINT COMMUNICATIONS, INC.

521 East Morehead Street

Charlotte, NC 28202	C-R COMMUNICATIONS, INC.

as a Pledgor
 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 
	Address:
c/o FAIRPOINT COMMUNICATIONS, INC.

521 East Morehead Street

Charlotte, NC 28202	COMERCO, INC.

 as a Pledgor
 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 
	Address:
c/o FAIRPOINT COMMUNICATIONS, INC.

521 East Morehead Street

Charlotte, NC 28202	GTC COMMUNICATIONS, INC.

 as a Pledgor
 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 

PLEDGE AGREEMENT

 

 

	 	 	 	 	 
	Address:
c/o FAIRPOINT COMMUNICATIONS, INC.

521 East Morehead Street

Charlotte, NC 28202	ST. JOE COMMUNICATIONS, INC.

 as a Pledgor
 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 
	Address:
c/o FAIRPOINT COMMUNICATIONS, INC.

521 East Morehead Street

Charlotte, NC 28202	RAVENSWOOD COMMUNICATIONS, INC.

as a Pledgor
 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 
	Address:
c/o FAIRPOINT COMMUNICATIONS, INC.

521 East Morehead Street

Charlotte, NC 28202
 	UNITE COMMUNICATIONS SYSTEMS, INC.

as a Pledgor

 	 
	 	By:  	/s/ Thomas Griffin
 	 
	 	 	Name:  	Thomas Griffin 	 
	 	 	Title:  	Treasurer 	 
	 

	 	 	 	 	 
	Accepted and Agreed to:

LEHMAN COMMERCIAL PAPER INC.,

as Collateral Agent and Pledgee

 	 	 
	By:  	William J. Hughes
 	 	 
	 	Name:  	WILLIAM J. HUGHES 	 	 
	 	Title:  	MANAGING
DIRECTOR 	 	 

PLEDGE AGREEMENT

 

 

	 	 	 	 	 

ANNEX A

LIST OF PLEDGED SUBSIDIARIES OF

FAIRPOINT COMMUNICATIONS, INC.

	A.	 	S T Enterprises, Ltd.

	 	1.	 	Sunflower Telephone Company, Inc.
	 
	 	2.	 	FairPoint Vermont, Inc.
	 
	 	3.	 	Northland Telephone Company of Maine, Inc.
	 
	 	4.	 	S T Computer Resources, Inc.
	 
	 	5.	 	ST Long Distance, Inc.

	B.	 	Northern New England Telephone Operations LLC
	 
	C.	 	Enhanced Communications of Northern New England Inc.
	 
	D.	 	FairPoint Logistics, Inc.
	 
	E.	 	MJD Ventures, Inc.

	 	1.	 	The Columbus Grove Telephone Company
	 
	 	2.	 	C-R Communications, Inc.

	 	a.	 	C-R Telephone Company
	 
	 	b.	 	C-R Long Distance, Inc.

	 	3.	 	Taconic Telephone Corp.
	 
	 	4.	 	Ellensburg Telephone Company
	 
	 	5.	 	Sidney Telephone Company
	 
	 	6.	 	Utilities, Inc.

	 	a.	 	Standish Telephone Company
	 
	 	b.	 	China Telephone Company
	 
	 	c.	 	Maine Telephone Company

A-1

 

	 	d.	 	UI Communications, Inc.
	 
	 	e.	 	UI Long Distance, Inc.
	 
	 	f.	 	UI Telecom, Inc.

	 	7.	 	Telephone Service Company
	 
	 	8.	 	Chouteau Telephone Company
	 
	 	9.	 	Chautauqua and Erie Telephone Corporation
	 
	 	10.	 	The Orwell Telephone Company
	 
	 	11.	 	GTC Communications, Inc.

	 	a.	 	St. Joe Communications, Inc.

	 	i.	 	GTC, Inc.

	 	12.	 	Peoples Mutual Telephone Company
	 
	 	13.	 	Fremont Telcom Co.
	 
	 	14.	 	Comerco, Inc.

	 	a.	 	YCOM Networks, Inc.

	 	15.	 	Community Service Telephone Co.
	 
	 	16.	 	Marianna and Scenery Hill Telephone Company
	 
	 	17.	 	The Germantown Independent Telephone Company
	 
	 	18.	 	Berkshire Telephone Corporation
	 
	 	19.	 	Bentleyville Communications Corporation
	 
	 	20.	 	Commtel Communications Inc.
	 
	 	21.	 	Fretel Communications, LLC

	F.	 	MJD Services Corp.

	 	1.	 	Bluestem Telephone Company
	 
	 	2.	 	Big Sandy Telecom, Inc.

A-2

 

	 	3.	 	Odin Telephone Exchange, Inc.
	 
	 	4.	 	Columbine Telecom Company
	 
	 	5.	 	Ravenswood Communications, Inc.

	 	a.	 	The El Paso Telephone Company
	 
	 	b.	 	El Paso Long Distance Company

	 	6.	 	Yates City Telephone Company
	 
	 	7.	 	FairPoint Communications Missouri, Inc.
	 
	 	8.	 	Unite Communications Systems, Inc.

	 	a.	 	ExOp of Missouri, Inc.

	G.	 	FairPoint Broadband, Inc.
	 
	H.	 	FairPoint Carrier Services, Inc.

	 	1.	 	FairPoint Communications Solutions Corp. — New York
	 
	 	2.	 	FairPoint Communications Solutions Corp. — Virginia

A-3

 

ANNEX B

LIST OF PLEDGED STOCK

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Type of	 	Number of	 	 	Percentage	 
	 	 	Name of Issuing Corporation	 	Shares	 	Shares	 	 	Owned	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	A.	 	FAIRPOINT COMMUNICATIONS, INC.
	 	 	 	 	 	 	 	 	 	 
	1.	 	FairPoint Broadband, Inc.
	 	Common	 	 	100	 	 	 	100	%
	2.	 	MJD Services Corp.
	 	Common	 	 	100	 	 	 	100	%
	3.	 	FairPoint Carrier Services, Inc.
	 	Common	 	 	100	 	 	 	100	%
	4.	 	MJD Ventures, Inc.
	 	Common	 	 	100	 	 	 	100	%
	5.	 	FairPoint Logistics, Inc.
	 	Common	 	 	100	 	 	 	100	%
	6.	 	S T Enterprises, Ltd.
	 	Common	 	 	90,000	 	 	 	100	%
	7.	 	Enhanced Communications of Northern New England Inc.
	 	Common	 	 	1,000	 	 	 	100	%
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	B.	 	MJD SERVICES CORP.
	 	 	 	 	 	 	 	 	 	 
	1.	 	Bluestem Telephone Company
	 	Common	 	 	100	 	 	 	100	%
	2.	 	Big Sandy Telecom, Inc.
	 	Common	 	 	100	 	 	 	100	%
	3.	 	Odin Telephone Exchange, Inc.
	 	Common	 	 	95.2857	 	 	 	100	%1
	4.	 	Columbine Telecom Company
	 	Common	 	 	100	 	 	 	100	%
	5.	 	Ravenswood Communications, Inc.
	 	Common	 	 	405	 	 	 	100	%
	6.	 	Yates City Telephone Company
	 	Common	 	 	252	 	 	 	100	%
	7.	 	Unite Communications Systems, Inc.
	 	Common	 	 	20,000	 	 	 	100	%
	8.	 	FairPoint Communications Missouri, Inc.
	 	Common	 	 	100	 	 	 	100	%
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	C.	 	MJD VENTURES, INC.
	 	 	 	 	 	 	 	 	 	 
	1.	 	The Columbus Grove Telephone Company
	 	Common	 	 	318	 	 	 	100	%

 

			
	1	 	Of the 101 shares issued and outstanding, 5.7143 are held in treasury.

B-1

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Type of	 	Number of	 	 	Percentage	 
	 	 	Name of Issuing Corporation	 	Shares	 	Shares	 	 	Owned	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	2.	 	C-R Communications, Inc.
	 	Common	 	 	750	 	 	 	100	%
	3.	 	Taconic Telephone Corp.
	 	Common	 	 	100	 	 	 	100	%
	4.	 	Ellensburg Telephone Company
	 	Common	 	 	100	 	 	 	100	%
	5.	 	Sidney Telephone Company
	 	Common	 	 	100	 	 	 	100	%
	6.	 	Utilities, Inc.
	 	Common	 	 	100	 	 	 	100	%
	7.	 	Chouteau Telephone Company
	 	Common	 	 	100	 	 	 	100	%
	8.	 	Chautauqua and Erie Telephone Corporation
	 	Common	 	 	100	 	 	 	100	%
	9.	 	The Orwell Telephone Company
	 	Common	 	 	4,795.7461	 	 	 	100	%
	10.	 	Telephone Service Company
	 	Common	 	 	100	 	 	 	100	%
	11.	 	GTC Communications, Inc.
	 	Common	 	 	1,000,000	 	 	 	100	%
	12.	 	Peoples Mutual Telephone Company
	 	Common	 	 	9,832	 	 	 	100	%
	13.	 	Fremont Telcom Co.
	 	Common	 	 	5,155.5	 	 	 	100	%
	14.	 	Comerco, Inc.
	 	Common	 	 	31,250	 	 	 	100	%
	15.	 	Community Service Telephone Co.
	 	Common	 	 	100	 	 	 	100	%
	16.	 	Marianna and Scenery Hill Telephone Company
	 	Common	 	 	306	 	 	 	100	%
	17.	 	Bentleyville Communications Corporation
	 	Common	 	 	100	 	 	 	100	%
	18.	 	The Germantown Independent Telephone Company
	 	Common	 	 	1,500	 	 	 	100	%
	19.	 	Berkshire Telephone Corporation
	 	Common	 	 	100	 	 	 	100	%
	20.	 	Commtel Communications Inc.
	 	Common	 	 	1	 	 	 	100	%
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	D.	 	S T ENTERPRISES, LTD.
	 	 	 	 	 	 	 	 	 	 
	1.	 	Sunflower Telephone Company, Inc.
	 	Common	 	 	684	 	 	 	99.7	%
	2.	 	FairPoint Vermont, Inc.
	 	Common	 	 	1,000	 	 	 	100	%
	3.	 	Northland Telephone Company of Maine, Inc.
	 	Common	 	 	100	 	 	 	100	%
	4.	 	S T Computer Resources, Inc.
	 	Common	 	 	500	 	 	 	100	%

B-2

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Type of	 	Number of	 	 	Percentage	 
	 	 	Name of Issuing Corporation	 	Shares	 	Shares	 	 	Owned	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	5.	 	ST Long Distance, Inc.
	 	Common	 	 	100	 	 	 	100	%
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	E.	 	C-R COMMUNICATIONS, INC.
	 	 	 	 	 	 	 	 	 	 
	1.	 	C-R Telephone Company
	 	Common	 	 	100	 	 	 	100	%
	2.	 	C-R Long Distance, Inc.
	 	Common	 	 	100	 	 	 	100	%
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	F.	 	UTILITIES, INC.
	 	 	 	 	 	 	 	 	 	 
	1.	 	Standish Telephone Company
	 	Common	 	 	23,560	 	 	 	100	%
	2.	 	China Telephone Company
	 	Common	 	 	20,000	 	 	 	100	%
	3.	 	Maine Telephone Company
	 	Common	 	 	100	 	 	 	100	%
	4.	 	UI Communications, Inc.
	 	Common	 	 	100	 	 	 	100	%
	5.	 	UI Long Distance, Inc.
	 	Common	 	 	100	 	 	 	100	%
	6.	 	UI Telecom, Inc.
	 	Common	 	 	100	 	 	 	100	%
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	G.	 	RAVENSWOOD COMMUNICATIONS, INC.
	 	 	 	 	 	 	 	 	 	 
	1.	 	The El Paso Telephone Company
	 	Common	 	 	405	 	 	 	100	%
	2.	 	El Paso Long Distance Company
	 	Common	 	 	1,000	 	 	 	100	%
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	H.	 	GTC COMMUNICATIONS, INC.
	 	 	 	 	 	 	 	 	 	 
	1.	 	St. Joe Communications, Inc.
	 	Common	 	 	1,000	 	 	 	100	%
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	I.	 	ST. JOE COMMUNICATIONS, INC.
	 	 	 	 	 	 	 	 	 	 
	1.	 	GTC, Inc.
	 	Common	 	 	14,890	 	 	 	100	%
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	J.	 	COMERCO, INC.
	 	 	 	 	 	 	 	 	 	 
	1.	 	YCOM Networks, Inc.
	 	Common	 	 	294	 	 	 	100	%
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	K.	 	FAIRPOINT CARRIER SERVICES, INC.
	 	 	 	 	 	 	 	 	 	 
	1.	 	FairPoint Communications Solutions Corp. — New York
	 	Common	 	 	100	 	 	 	100	%
	2.	 	FairPoint Communications Solutions Corp. —  Virginia
	 	Common	 	 	100	 	 	 	100	%

B-3

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Type of	 	Number of	 	 	Percentage	 
	 	 	Name of Issuing Corporation	 	Shares	 	Shares	 	 	Owned	 
	 	 	 
	 	 	 	 	 	 	 	 	 	 
	L.	 	UNITE COMMUNICATIONS SYSTEMS, INC.
	 	 	 	 	 	 	 	 	 	 
	1.	 	ExOp of Missouri, Inc.
	 	Common	 	 	1,000,000	 	 	 	100	%

B-4

 

ANNEX C

LIST OF PROMISSORY NOTES

None.

C-1

 

ANNEX D

PART I

LIST OF PARTNERSHIP INTERESTS

None.

PART II

LIST OF MEMBERSHIP INTERESTS

	 	 	 	 	 	 	 
	 	 	 	 	Percentage	 
	 	 	Name of Issuing Corporation	 	Owned	 
	 	 	 
	 	 	 	 
	A.	 	FAIRPOINT COMMUNICATIONS, INC.
	 	 	 	 
	1.	 	Northern New England Telephone Operations LLC
	 	 	100	 
	 	 	 
	 	 	 	 
	B.	 	MJD VENTURES, INC.
	 	 	 	 
	1.	 	Fretel Communications, LLC
	 	 	100	 

D-1

 

ANNEX E

Form of Agreement Regarding Uncertificated Securities, 

Membership Interests and Partnership Interests

     AGREEMENT (as amended, modified, restated and/or supplemented from time to time, this
“Agreement”), dated as of [  , 20  ], among the undersigned pledgor (the
“Pledgor”), LEHMAN COMMERCIAL PAPER INC., not in its individual capacity but solely as
Collateral Agent (the “Pledgee”), and [      ], as the issuer of the Uncertificated Securities,
Membership Interests and/or Partnership Interests (each as defined below) (the “Issuer”).

WITNESSETH:

     WHEREAS, the Pledgor, certain of its affiliates and the Pledgee have entered into a Pledge
Agreement, dated as of March 31, 2008 (as amended, modified, restated and/or supplemented from time
to time, the “Pledge Agreement”),1 under which, among other things, in order to
secure the payment of the Obligations, the Pledgor has pledged or will pledge to the Pledgee for
the benefit of the Secured Creditors, and grant a security interest in favor of the Pledgee for the
benefit of the Secured Creditors in, all of the right, title and interest of the Pledgor in and to
any and all [Uncertificated Securities] [Partnership Interests] [Membership Interests], from time
to time by the Issuer, whether now existing or hereafter from time to time acquired by the Pledgor
(with all of such [Uncertificated Securities] [Partnership Interests] [Membership Interests] being
herein collectively called the “Issuer Pledged Interests”); and

     WHEREAS, the Pledgor desires the Issuer to enter into this Agreement in order to perfect the
security interest of the Pledgee under the Pledge Agreement in the Issuer Pledged Interests, to
vest in the Pledgee control of the Issuer Pledge Interests and to provide for the rights of the
parties under this Agreement;

     NOW THEREFORE, in consideration of the premises and the mutual promises and agreements
contained herein, and for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

     1. The Pledgor hereby irrevocably authorizes and directs the Issuer, and the Issuer hereby
agrees, to comply with any and all instructions and orders originated by the Pledgee (and its
successors and assigns) regarding any and all of the Issuer Pledged Interests without the further
consent by the registered owner (including the Pledgor), and, following its receipt of a notice
from the Pledgee stating that the Pledgee is exercising exclusive control of the Issuer Pledged
Interests, not to comply with any instructions or orders regarding any or all of the Issuer Pledged
Interests originated by any person or entity other than the Pledgee (and its successors and
assigns) or a court of competent jurisdiction.

     2. The Issuer hereby certifies that (i) no notice of any security interest, lien or other
encumbrance or claim affecting the Issuer Pledged Interests (other than the security interest

 

			
	1	 	Capitalized terms used but not defined herein shall
have the meaning ascribed to them in the Pledge Agreement.

E-1

 

of the Pledgee) has been received by it, and (ii) the security interest of the Pledgee in the
Issuer Pledged Interests has been registered in the books and records of the Issuer.

     3. The Issuer hereby represents and warrants that (i) the pledge by the Pledgor of, and the
granting by the Pledgor of a security interest in, the Issuer Pledged Interests to the Pledgee, for
the benefit of the Secured Creditors, does not violate the charter, by-laws, partnership agreement,
membership agreement or any other agreement governing the Issuer or the Issuer Pledged Interests,
and (ii) the Issuer Pledged Interests consisting of capital stock of a corporation are fully paid
and nonassessable.

     4. All notices, statements of accounts, reports, prospectuses, financial statements and other
communications to be sent to the Pledgor by the Issuer in respect of the Issuer will also be sent
to the Pledgee at the following address:

[     ]

[     ]

Attention: [     ]

Telephone No.: [     ]

Telecopier No.: [     ]

     5. Following its receipt of a notice from the Pledgee stating that the Pledgee is exercising
exclusive control of the Issuer Pledged Interests and until the Pledgee shall have delivered
written notice to the Issuer that all of the Obligations have been paid in full and this Agreement
is terminated, the Issuer will send any and all redemptions, distributions, interest or other
payments in respect of the Issuer Pledged Interests from the Issuer for the account of the Pledgee
only by wire transfers to such account as the Pledgee shall instruct.

     6. Except as expressly provided otherwise in Sections 4 and 5, all notices, instructions,
orders and communications hereunder shall be sent or delivered by mail, telegraph, telex, telecopy,
cable or overnight courier service and all such notices and communications shall, when mailed,
telexed, telecopied, cabled or sent by overnight courier, be effective when deposited in the mails
or delivered to overnight courier, prepaid and properly addressed for delivery on such or the next
Business Day, or sent by telex or telecopier, except that notices and communications to the Pledgee
or the Issuer shall not be effective until received. All notices and other communications shall be
in writing and addressed as follows:

	 	(a)	 	if to the Pledgor, at:
	 
	 	 	 	Attention:

Telephone No.:

Fax No.:
	 
	 	(b)	 	if to the Pledgee, at the address given in Section 4 hereof;
	 
	 	(c)	 	if to the Issuer, at:

or at such other address as shall have been furnished in writing by any Person described above to
the party required to give notice hereunder. As used in this Section 6, “Business Day”
means

E-2

 

any day other than a Saturday, Sunday, or other day in which banks in New York are authorized to
remain closed.

     7. This Agreement shall be binding upon the successors and assigns of the Pledgor and the
Issuer and shall inure to the benefit of and be enforceable by the Pledgee and its successors and
assigns. This Agreement may be executed in any number of counterparts, each of which shall be an
original, but all of which shall constitute one instrument. In the event that any provision of
this Agreement shall prove to be invalid or unenforceable, such provision shall be deemed to be
severable from the other provisions of this Agreement which shall remain binding on all parties
hereto. None of the terms and conditions of this Agreement may be changed, waived, modified or
varied in any manner whatsoever except in writing signed by the Pledgee, the Issuer and the
Pledgor.

     8. This Agreement shall be governed by and construed in accordance with the laws of the State
of New York, without regard to its principles of conflict of laws.

     IN WITNESS WHEREOF, the Pledgor, the Pledgee and the Issuer have caused this Agreement to be
executed by their duly elected officers duly authorized as of the date first above written.

	 	 	 	 	 
	 	[                         ],

as Pledgor

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[                         ],

     not in its individual capacity but solely

     as Collateral Agent and Pledgee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[                         ],

     as the Issuer

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

E-3

 

ANNEX F

UCC FINANCING STATEMENTS

	 	 	 	 	 	 	 
	 	 	Entity	 	Filing Jurisdiction	 
	1.	 	Comerco, Inc.
	 	Washington
	2.	 	C-R Communications, Inc.
	 	Illinois
	3.	 	Enhanced Communications of Northern New
England Inc.
	 	Delaware
	4.	 	FairPoint Broadband, Inc.
	 	Delaware
	5.	 	FairPoint Carrier Services, Inc.
	 	Delaware
	6.	 	FairPoint Communications, Inc.
	 	Delaware
	7.	 	FairPoint Logistics, Inc.
	 	South Dakota
	8.	 	GTC Communications, Inc.
	 	Delaware
	9.	 	MJD Services Corp.
	 	Delaware
	10.	 	MJD Ventures, Inc.
	 	Delaware
	11.	 	Ravenswood Communications, Inc.
	 	Illinois
	12.	 	S T Enterprises, Ltd.
	 	Kansas
	13.	 	St. Joe Communications, Inc.
	 	Florida
	14.	 	Unite Communications Systems, Inc.
	 	Missouri
	15.	 	Utilities, Inc.
	 	Maine

F-1

 

     ANNEX G

EXCLUDED ENTITIES

	1.	 	BE Mobile Communications, Incorporated
	 
	2.	 	Berkshire Cable Corp.
	 
	3.	 	Berkshire Cellular, Inc.
	 
	4.	 	Berkshire Net, Inc.
	 
	5.	 	Berkshire New York Access, Inc.
	 
	6.	 	Chautauqua & Erie Communications, Inc.
	 
	7.	 	C & E Communications, Ltd.
	 
	8.	 	Elltel Long Distance Corp.
	 
	9.	 	Fremont Broadband, LLC
	 
	10.	 	Germantown Long Distance Company
	 
	11.	 	GIT-CELL, Inc.
	 
	12.	 	GITCO Sales, Inc.
	 
	13.	 	GTC Finance Corporation
	 
	14.	 	Marianna Tel, Inc.
	 
	15.	 	Orwell Communications, Inc.
	 
	16.	 	Peoples Mutual Services Company
	 
	17.	 	Peoples Mutual Long Distance Company
	 
	18.	 	Quality One Technologies, Inc.
	 
	19.	 	Taconic TelCom Corp.
	 
	20.	 	Taconic Technology Corp.
	 
	21.	 	Telephone Operating Company of Vermont LLC

G-1

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