Document:

EXHIBIT 10.5

 Exhibit 10.5 
 Execution Copy 
 SPECTRUM CONTRIBUTION AGREEMENT 
 by and among 
 TERRESTAR
CORPORATION, 
 HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD. AND 
 HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P. 

 SPECTRUM CONTRIBUTION AGREEMENT 
 This SPECTRUM CONTRIBUTION AGREEMENT, dated as of February 5, 2008 (this “Agreement”), is by and among TERRESTAR CORPORATION, a
Delaware corporation (the “Company”), HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD., an exempted company organized under the laws of the Cayman Islands (“Harbinger Master”) and HARBINGER CAPITAL PARTNERS SPECIAL
SITUATIONS FUND, L.P., a Delaware limited partnership (“Harbinger Special” and collectively with Harbinger Master, the “Purchaser”). 
 WHEREAS, as of January 30, 2008, Purchaser and the equityholders (the “Owners”) of CCTV Wireless I, LLC, a Delaware limited liability company (“CCTV Parent”) have entered into
that certain option agreement, a true and correct copy of which has been provided to the Company (the “Option Agreement”); 
 WHEREAS, CCTV Parent owns all of the outstanding equity interests in and capital stock of CCTV Wireless, Inc., a Delaware corporation (“CCTV”); 
 WHEREAS, CCTV holds certain 1.4 GHz band licenses as described in the Option Agreement (the “CCTV Spectrum Licenses”) and CCTV Parent has the right to certain intellectual property interests related
to the CCTV Spectrum Licenses; 
 WHEREAS, pursuant to the Option Agreement, the Owners have granted Purchaser an irrevocable option to
indefeasibly purchase from the Owners all of the issued and outstanding equity of CCTV Parent for an aggregate price of $212,500,000.00, subject to certain terms and conditions set forth in the Option Agreement (collectively, the
“Option”) ; 
 WHEREAS, the Company desires to issue and sell to Purchaser 1,200,000 shares of its Series E Junior
Participating Preferred Stock, par value $0.01 per share (the “Purchased Securities”) having the terms, conditions, qualifications, rights and preferences set forth in the form of certificate of designations attached to the Master
Investment Agreement as Exhibit F; 
 WHEREAS, Purchaser desires to assign all of its right, title and interest in and under the
Option Agreement to the Company, all upon the terms and conditions set forth herein, pursuant to which the Company shall be entitled to exercise the Option, and as a result of the consummation of transactions related to the exercise of such Option,
will control the CCTV Spectrum Licenses (collectively, the “Spectrum Contribution”); 
 NOW THEREFORE, in consideration of
the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 
 ARTICLE I 
 DEFINITIONS 

 Section 1.01 Specific Definitions. As used in this Agreement, and unless the context requires
a different meaning, the following terms have the meanings specified in this Section 1.01. 
 “Agreement” has
the meaning specified in the preamble to this Agreement. 
 “Assignment” has the meaning specified in
Section 2.01 of this Agreement. 
 “CCTV” has the meaning specified in the recitals to this Agreement.

 “CCTV Parent” has the meaning specified in the recitals to this Agreement. 
 “CCTV Spectrum Licenses” has the meaning specified in the recitals to this Agreement. 
 “Damages” has the meaning specified in Section 7.06(a) of this Agreement. 
 “Dividends” shall mean any dividends, distributions or payments made or declared in cash, stock or other property, in respect of the
common stock of the Company, on or after the date of this Agreement. 
 “EchoStar” means EchoStar Corporation, a Nevada
corporation. 
 “EchoStar Spectrum” means the 1.4 GHz band FCC licenses held by PORT L.L.C. 
 “EchoStar Spectrum Agreement” means that certain Spectrum Agreement by and between EchoStar Corporation and the Company, dated as of the
date hereof. 
 “Escrow Agreement” means that certain agreement by and among the Company, the Purchaser, and an escrow
agent, dated as of the Initial Closing Date. 
 “Escrowed Shares” has the meaning specified in Section 2.03(a)
of this Agreement. 
 “Exercise Notice” means written notice to the Owners specifying that the Company is exercising the
Option, to be delivered by the Company concurrently with the Exercise Payment on a date which is during and prior to the expiration of the Exercise Period, in accordance with Section 2.2(a) of the Option Agreement. 
 “Exercise Payment” means the payment of $50,000,000 by the Purchaser to the Owners, on behalf of the Company, to be delivered
concurrently with the Exercise Notice and in accordance with Section 2.2(a) of the Option Agreement. 
 “Exercise
Period” means the period of time from April 15, 2008 through and including July 30, 2008. 
 “FCC” shall
mean the United States Federal Communications Commission or any successor agency. 
 “FCC Consent” has the meaning specified
in Section 5.06(b) of this Agreement. 
  

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 “Final Order” means an action taken or order issued by the FCC as to which: (i) no
request for stay of the action or order is pending, no such stay is in effect, and, if any deadline for filing any such request is designated by statute or regulation, it is passed, including any extensions thereof; (ii) no petition for
reconsideration or review of the action or order, or protest of any kind, is pending and the time for filing any such petition or protest is passed; (iii) the action or order is not subject to reconsideration or review sua sponte and the
time for such reconsideration or review has passed; and (iv) the action or order is not then under judicial review, there is no notice of appeal or other application for judicial review pending, and the deadline for filing such notice of appeal
or other application for judicial review has passed, including any extensions thereof. 
 “HSR Act” means the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended. 
 “Initial Closing” means the assignment of the Option,
the delivery and issuance of one-half of the Purchased Securities by the Company to Purchaser and the delivery of the Exercise Notice by the Company to the Owners accompanied by the Exercise Payment by the Purchaser to the Owners on behalf of the
Company. 
 “Initial Closing Date” means the date that is the second Business Day following the day on which the last to be
satisfied or waived of the conditions set forth in Sections 5.01, 5.02 and 5.03 (other than those conditions that by their terms are to be satisfied at the Initial Closing, but subject to the satisfaction or waiver of those conditions) shall be
satisfied or waived in accordance with this Agreement, or at such other time and date as the parties hereto mutually shall agree, but which shall in any event, be no earlier than the commencement of the Exercise Period and no later than its
expiration. 
 “Liens” means any lien, pledge, charge, security interest, encumbrance, mortgage, reversionary interest,
transfer restriction, right of first refusal, preemptive right, or other adverse claim, defect of title, limitation or restriction of any type or nature whatsoever. 
 “Master Investment Agreement” means the Master Investment Agreement, of even date herewith, by and among the Company, TerreStar, and Purchaser. 
 “Option Agreement” has the meaning specified in the recitals to this Agreement. 
 “Option Closing” shall mean the consummation of the Spectrum Contribution. 
 “Option Closing Date” shall mean that date that is the second Business Day following the day on which the last to be satisfied or waived
of the conditions set forth in Sections 5.04, 5.05 and 5.06 (other than those conditions that by their terms are to be satisfied at the Option Closing, but subject to the satisfaction or waiver of those conditions) shall be satisfied or waived in
accordance with this Agreement, or at such other time and date as the parties hereto mutually shall agree, but which shall in any event, be later than the Outside Date. 
 “Option Closing Payment” means an amount equal to $112,500,000, plus any other amounts to be paid by Harbinger (as defined in the Option Agreement) under the Option 

  

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Agreement (in the form in which it is assigned to the Company at the Initial Closing) and not previously paid, which the Purchaser shall pay on the
Company’s behalf to the persons specified in, and in compliance with, Section 2.3 of the Option Agreement. 
 “Order” means any order, injunction, judgment, decision, decree, ruling, writ, assessment or arbitration award of any governmental or quasi-governmental body, whether administrative, executive, judicial, legislative or
other, or any combination thereof, including without limitation any federal, state, territorial, county, local, municipal or other government or governmental or quasi-governmental agency, arbitrator, authority, board, body, branch, bureau, or
comparable agency, commission, corporation, court, department, instrumentality, mediator, panel, system or other political unit or subdivision or other entity of any of the foregoing, whether domestic or foreign. 
 “Organizational Documents” means, with respect to any Person that is a corporation, its certificate of incorporation and bylaws, with
respect to any Person that is a partnership or limited partnership, its partnership agreement, and with respect to any Person that is a limited liability company, its limited liability company or operating agreement, in each case, or such other
comparable instruments or governing documents, as applicable. 
 “Outside Date” means the “Outside Date” as
defined in Section 2.4(a)(i) of the Option Agreement or as extended pursuant to the Option Agreement, whichever is later. 
 “Owners” has the meaning specified in the recitals to this Agreement. 
 “Purchased Securities”
has the meaning specified in the recitals to this Agreement. 
 “Purchaser” has the meaning specified in the preamble to
this Agreement. 
 “Purchaser Indemnified Persons” has the meaning specified in Section 7.06(a) of this
Agreement. 
 “Purchaser Representatives” has the meaning specified in Section 7.06(a) of this Agreement.

 “Stockholder Approval” shall mean the affirmative vote or consent of the stockholders of the Company holding more than
50% of the voting stock of the Company, of this Agreement and the transactions contemplated hereby (including, without limitation, the issuance of the Purchased Securities to the Purchaser hereunder) and the EchoStar Spectrum Agreement and the
transactions contemplated thereby (including, without limitation, the issuance of shares of common stock of the Company to EchoStar thereunder), all in accordance with the requirements of the Company’s Organizational Documents and the DGCL.

 “Spectrum Closings” means, collectively, the Initial Closing and the Option Closing. 
 “Spectrum Contribution” has the meaning specified in the recitals to this Agreement. 
 “TerreStar” means TerreStar Networks Inc., a Delaware corporation. 
  

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 Section 1.02 Other Terms. Other terms defined elsewhere in the text of this Agreement shall,
unless otherwise indicated, have the meaning indicated throughout this Agreement. Capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to such terms in the Master Investment Agreement. 
 ARTICLE II 
 ASSIGNMENT; CLOSINGS

 Section 2.01 Assignment. At the Initial Closing, the Purchaser shall assign, convey, transfer and deliver, all of its
rights, title, interest and obligations, legal and equitable, including all rights of Harbinger (as defined in the Option Agreement) in, to and under the Option Agreement to the Company, free and clear of all Liens, and the Company shall accept in
full and assume all of the Purchaser’s rights, title, interests and obligations, legal and equitable, in, to and under the Option Agreement (the “Assignment”). 
 Section 2.02 Spectrum Closings. The Spectrum Closings shall take place on the Initial Closing Date and the Option Closing Date, as
applicable, at the offices of Bingham McCutchen LLP, 399 Park Avenue, New York, NY 10022. 
 Section 2.03 Initial Closing
Deliveries. 
 (a) At the Initial Closing, the Company will deliver: 
 (i) to the Purchaser, evidence, satisfactory to the Purchaser, that the Company has obtained Stockholder Approval; 
 (ii) to the Purchaser, one or more certificates representing one-half ( 1/2) of the Purchased Securities in such denominations and registered in such names as the Purchaser shall specify, together with
an amount or stock or property (as applicable) equal to all Dividends that would have been paid on such Purchased Securities if they had been outstanding on and after the date hereof and to which the Purchaser is entitled under
Section 6.04; 
 (iii) the Escrow Agreement, duly executed by the Company and the escrow agent; 

(iv) into escrow, one or more certificates representing the remaining one-half of the Purchased Securities in such denominations and
registered in such names as the Purchaser shall specify (the “Escrowed Shares”), together with an amount or stock or property (as applicable) equal to all Dividends that would have been paid on such Purchased Securities if they had
been outstanding on and after the date hereof and to which the Purchaser is entitled under Section 6.04; 
 (v) to
the Owners, the Exercise Notice, duly executed by an authorized officer of the Company. 
 (b) At the Initial Closing, the
Purchaser will deliver: 
  

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 (i) to the Owners, the Exercise Payment, on behalf of the Company; and 
 (ii) to the Company, the Assignment, in form satisfactory to the Company, together with evidence, satisfactory to the Company, that all
consents required to be obtained to effect the Assignment shall have been obtained by all applicable parties, in compliance with applicable law (other than the FCC consent required thereunder or the waiting period applicable to the consummation of
the transactions contemplated by the Option Agreement or this Agreement (if required) under the HSR Act); and 
 (iii) the
Escrow Agreement, duly executed by the Purchaser. 
 Section 2.04 Option Closing. 
 (a) At the Option Closing, the Company will deliver to the Purchaser: 
 (i) a certificate, duly executed by an authorized officer of the Company, certifying that each of the conditions to closing set forth in
Article VII of the Option Agreement has been satisfied or waived in accordance with the terms of the Option Agreement; 
 (ii)
a certificate, duly executed by an authorized officer of the Company, certifying that each of the conditions to closing set forth in the EchoStar Spectrum Agreement has been satisfied or waived in accordance with the terms of the EchoStar Spectrum
Agreement; 
 (iii) evidence, satisfactory to the Purchaser, that all consents required to be obtained from the FCC with
respect to Spectrum Contribution and the transactions contemplated by this Agreement and the Option Agreement shall have been obtained by all applicable parties, in compliance with applicable law; 
 (iv) evidence, satisfactory to the Purchaser, that the applicable waiting period(s) under the HSR Act in respect of the transactions
contemplated under the Option Agreement and this Agreement (if required) have terminated or expired; and 
 (v) or cause to be
delivered to the Purchaser, the Escrowed Shares, together with an amount or stock or property (as applicable) equal to all Dividends that would have been paid on the Escrowed Shares if they had been outstanding on and after the date hereof and to
which the Purchaser is entitled under Section 6.04. 
 (b) At the Option Closing, the Purchaser will deliver:

 (i) to the Company, a certificate, duly executed by an authorized officer of the Purchaser, certifying that it has
delivered the Option Closing Payment to the Owners on behalf of the Company in accordance with the provisions of the Option Agreement; and 
  

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 (ii) to the Owners, the Option Closing Payment, on behalf of the Company. 
 ARTICLE III 
 REPRESENTATIONS AND
WARRANTIES OF THE COMPANY 
 The Company hereby makes to the Purchaser as of the date hereof the representations and warranties of the
Company and TerreStar contained in Article III of the Master Investment Agreement, each of which is hereby incorporated herein by reference, and the Company further represents and warrants to the Purchaser, as of the date hereof: 
 Section 3.01 FCC Licensee Status. 
 (a) The Company is an FCC licensee, and/or controls an FCC licensee when its license was granted. 
 (b) The Company is not the subject of an FCC investigation or Order to Show Cause that, based on FCC precedent, entails a material risk of a resulting license cancellation or revocation or is not in “red light status” under
applicable FCC rules. 
 ARTICLE IV 
 REPRESENTATIONS AND WARRANTIES OF PURCHASER 
 The Purchaser represents and warrants to the Company, as of the date hereof
and as of the Initial Closing Date (unless an earlier date is specified): 
 Section 4.01 Authorization. Purchaser has full power
and authority to enter into this Agreement. This Agreement constitutes a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of a specific performance, injunctive relief, or other
equitable remedies. 
 Section 4.02 No Conflicts. The execution, delivery and performance by the Purchaser of this Agreement and
compliance by the Purchaser with the terms and provisions hereof and thereof, and the purchase of the Purchased Securities by the Purchaser do not and will not constitute a breach of, or a default under, the Organizational Documents of the
Purchaser, or any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Purchaser is a party or by which it may be bound or to which its properties is subject, nor will any
such action result in any violation of any existing Law (assuming compliance with the Securities Act and applicable securities and Blue Sky Laws of any other jurisdiction) to which the Purchaser or its property is subject. 
 Section 4.03 Certain Fees. No fees or commissions for which the Company could be liable are or will be payable by the Purchaser to brokers,
finders, or investment bankers with respect to the purchase of any of its Purchased Securities or the consummation of the transactions contemplated by this Agreement. 
  

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 Section 4.04 Purchase in Ordinary Course. The Purchaser is purchasing its Purchased
Securities in the ordinary course of its business and the Purchaser has not entered into any arrangement with any person to resell its Purchased Securities or to participate in the distribution of such Purchased Securities. 
 Section 4.05 Unregistered Securities. 
 (a) Investment. The Purchased Securities are being acquired for its own account and with no intention of distributing the Purchased Securities or any part thereof, and the Purchaser has no present intention of
selling or granting any participation in or otherwise distributing the same in any transaction in violation of the Securities Act or the securities or blue sky laws of any other jurisdiction. If the Purchaser should in the future decide to dispose
of any of the Purchased Securities, the Purchaser understands and hereby agrees that it may do so only in compliance with the Securities Act and applicable securities and blue sky laws of any other jurisdiction, as then in effect, which may include
a sale contemplated by any registration statement pursuant to which the Purchased Securities are then being offered. 
 (b)
Exemption. The Purchaser understands that (i) the Purchased Securities (A) have not been registered under the Securities Act or any state securities Laws, (B) will be issued in reliance upon an exemption from the registration and
prospectus delivery requirements of the Securities Act pursuant to Section 4(2) thereof and/or Regulation D promulgated thereunder and (C) will be issued in reliance upon exemptions from the registration and prospectus delivery
requirements of state securities laws which relate to private offerings, and (ii) the Purchaser must therefore bear the economic risk of such investment indefinitely unless a subsequent disposition thereof is registered under the Securities Act
and applicable state securities laws or is exempt therefrom. 
 (c) Nature of Purchaser. The Purchaser represents and
warrants to the Company that (i) it is an “accredited investor” as defined in Rule 501(a) promulgated under the Securities Act and (ii) by reason of its business and financial experience it has such knowledge, sophistication and
experience in making similar investments and in business and financial matters generally so as to be capable of evaluating the merits and risks of the prospective investment in the Purchased Securities, is able to bear the economic risk of such
investment and, at the present time, would be able to afford a complete loss of such investment; 
 (d) Legend. It is
understood that any certificates evidencing the Purchased Securities will bear a legend in substantially the following form: 
 “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED
OF UNLESS (I) REGISTERED UNDER THE  

  

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APPLICABLE SECURITIES LAWS, (II) SUCH TRANSACTION IS PURSUANT TO RULE 144, RULE 144A OR REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(III) AN OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY, HAS BEEN DELIVERED TO THE COMPANY AND SUCH OPINION STATES THAT THE SECURITIES MAY BE TRANSFERRED WITHOUT SUCH REGISTRATION.” 
 Certificates evidencing the Purchased Securities shall not be required to contain such legend or any other legend after (i) such securities are
registered for resale under the Securities Act, (ii) following any sale of such securities pursuant to and in accordance with Rule 144, (iii) if such securities are eligible for sale under Rule 144(k), or (iv) if such legend is not
required under applicable requirements of the Securities Act (including controlling judicial interpretations and pronouncements issued by the Staff of the Commission). 
 Section 4.06 Enforceability of Option Agreement. 
 (a) The Option Agreement is in
full force and effect and has not been amended or modified except for any amendments or modifications that have been approved by the Company in writing. 
 (b) The Purchaser and, to the Purchaser’s knowledge, the Owners have in all material respects performed all the obligations under the Option Agreement required to be performed by any of them to date. 

(c) In reliance upon the Company’s representations and warranties set forth in Section 3.01, Purchaser is not required to
obtain from the Owners any consent for the Assignment of all rights under the Option Agreement to the Company in compliance with the terms thereunder. 
 Section 4.07 No Other Representations or Warranties. The Company acknowledges and agrees that the Purchaser is not making and has not made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Agreement. 
 ARTICLE V 
 CONDITIONS 
 Section 5.01
Conditions Precedent to the Obligations of the Purchaser at the Initial Closing. The obligations of the Purchaser to assign the Option Agreement and deliver the Exercise Payment is subject to the satisfaction, or waiver by the Purchaser, at
or before the Initial Closing, of each of the following conditions: 
 (a) Representations and Warranties. Each of the
representations and warranties of the Company contained herein and in the Master Investment Agreement 

  

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shall be true and correct in all material respects as of the date hereof and as of the Initial Closing Date as though made on and as of such date;

 (b) Performance. The Company shall have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by it at or prior to the Initial Closing, including, without limitation, delivering or causing the delivery of those items required to be
delivered pursuant to Section 2.03(a); 
 (c) No Material Adverse Effect. No Material Adverse Effect shall
have occurred or shall exist and be continuing; 
 (d) Consents and Approvals. All consents, authorizations, approvals,
permits, or waivers, if any, that are required in connection with the execution and delivery of the Operative Documents or the consummation of the transactions contemplated thereby, including, without limitation, the lawful issuance and sale of the
Purchased Securities pursuant to this Agreement, shall be duly obtained and effective as of the Initial Closing (including that the waiting period applicable to the consummation of the transactions contemplated by this Agreement (if required) under
the HSR Act, shall have expired or been terminated); 
 (e) Registration Rights Agreement. The Company shall have
entered into the Registration Rights Agreement with the Purchaser in substantially the form attached as Exhibit D to the Master Investment Agreement; 
 (f) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by this Agreement; 
 (g) Additional Documents. On or prior to the Initial Closing Date, the Company shall have furnished to the Purchaser such further
certificates and documents as the Purchaser may reasonably request; and 
 (h) Exercise Period. The Exercise Period
shall have commenced but not yet expired. 
 Section 5.02 Conditions Precedent to the Obligations of the Company at the Initial
Closing. The obligations of the Company to sell the Purchased Securities and to exercise the Option at the Initial Closing is subject to the satisfaction, or waiver by the Company, at or before the Initial Closing, of each of the following
conditions: 
 (a) Representations and Warranties. Each of the representations and warranties of the Purchaser
contained herein shall be true and correct as of the date when made and as of the Initial Closing Date as though made on and as of such date; 
  

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 (b) Performance. The Purchaser shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Purchaser at or prior to the Initial Closing, including, without limitation, delivering or causing the
delivery of those items required to be delivered pursuant to Section 2.03(b); 
 (c) No Injunction. No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the
transactions contemplated by this Agreement; and 
 (d) Option Agreement. The Option Agreement shall be in full force
and effect, shall not have been amended or modified except for any amendments or modifications that have been approved by the Company in writing and each of the parties thereunder shall have performed, satisfied and complied in all material respects
with all covenants, agreements and conditions required by the Option Agreement to be performed, satisfied or complied with by them prior to delivery of the Exercise Notice (including without limitation that all amounts required to be paid by the
Purchaser prior to delivery of the Exercise Notice shall have been paid). All consents required to be obtained to effect the Assignment (other than the FCC consent required thereunder or the waiting period applicable to the consummation of the
transactions contemplated by the Option Agreement or this Agreement (if required) under the HSR Act) shall have been obtained by all applicable parties, in compliance with applicable law. 
 (e) HSR. The waiting period applicable to the consummation of the transactions contemplated by this Agreement (if required) under
the HSR Act shall have expired or been terminated. 
 Section 5.03 Conditions Precedent to the Obligations of the Parties at the
Initial Closing. The obligation of the Company to sell the Purchased Securities at the Initial Closing and the obligations of the Purchaser to assign the Option and deliver the Exercise Payment are subject to the satisfaction, or unanimous
waiver by all parties hereto, at or before the Initial Closing, of the receipt of Stockholder Approval. 
 Section 5.04 Conditions
Precedent to the Obligations of the Purchaser at the Option Closing. The obligation of the Purchaser to deliver the Option Closing Payment to the Owners on behalf of the Company is subject to the satisfaction, or waiver by the Purchaser, at or
before the Option Closing, of each of the following conditions: 
 (a) Performance. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by it at or prior to the Option Closing, including, without limitation, delivering
or causing the delivery of those items required to be delivered pursuant to Section 2.04(a); 
  

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 (b) Satisfaction of Conditions to Close Under Option Agreement. Each of the
conditions to closing set forth in Article VII of the Option Agreement shall have been satisfied or waived in accordance with the terms of the Option Agreement; and 
 (c) EchoStar Spectrum Agreement. The closing under the EchoStar Spectrum Agreement shall have occurred or be occurring concurrently
with the Closing. 
 Section 5.05 Conditions Precedent to the Obligations of the Company at the Option Closing. The obligation of
the Company to consummate the Spectrum Contribution is subject to the satisfaction, or waiver by the Company, at or before the Option Closing, of each of the following conditions: 
 (a) Performance. The Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements
and conditions required by this Agreement to be performed, satisfied or complied with by the Purchaser at or prior to the Option Closing, including, without limitation, delivering or causing the delivery of those items required to be delivered
pursuant to Section 2.04(b); 
 (b) EchoStar Spectrum Agreement. The closing under the EchoStar Spectrum
Agreement shall have occurred or shall occur concurrently with the Closing unless the failure of such closing under the EchoStar Spectrum Agreement to occur shall be due to (i) a breach or default by TerreStar Parent or TerreStar Networks under the
EchoStar Spectrum Agreement, (ii) any waiver or modification of, or failure to enforce, any term of the EchoStar Spectrum Agreement by TerreStar Parent or TerreStar Networks, or (iii) any failure of a condition to such closing to be
satisfied that would reasonably have been expected to be satisfied with reasonable best efforts on the part of TerreStar Parent and TerreStar Networks to achieve satisfaction of such condition; and 
 (c) Delivery of Option Closing Payment. The Purchaser shall have delivered the Option Closing Payment on behalf of the Company in
accordance with the provisions of the Option Agreement. 
 Section 5.06 Conditions Precedent to the Obligations of the Parties to the
Option Closing. The obligation of the Company to consummate the Spectrum Contribution at the Option Closing and the obligation of the Purchaser to deliver the Option Closing Payment, are subject to the satisfaction, or unanimous waiver by all
parties hereto, at or before the Option Closing: 
 (a) Initial Closing. The Initial Closing shall have been
consummated; and 
 (b) FCC Consent. All consents required to be obtained from the FCC with respect to Spectrum
Contribution and the transactions contemplated by the Option Agreement and this Agreement (the “FCC Consent”) shall have been obtained, free of any materially adverse conditions (other than those applicable to FCC assignments and
transfers or to licenses under Part 27 of the FCC Rules generally), and such FCC Consent 

  

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shall have become a Final Order; provided, however, that Purchaser may waive the requirement that the FCC Consent become a Final Order. 
 (c) HSR. The waiting period applicable to the consummation of the transactions contemplated by the Option Agreement and this
Agreement (if required) under the HSR Act, shall have expired or been terminated. 
 ARTICLE VI 
 ADDITIONAL AGREEMENTS 
 Section 6.01 Assumption of Obligations of the Purchaser under the Option Agreement. At and after the Initial Closing, in connection with the Assignment, the Company agrees to, and shall assume any and all obligations of the
Purchaser pursuant to the Option Agreement, including without limitation, performing any obligation or covenant under the Option Agreement of Purchaser necessary or advisable to exercise the Option and to satisfy the conditions to closing
thereunder, other than the payment of the Option Closing Payment (and related representations), which shall be and remain obligations of the Purchaser to the extent provided hereunder. 
 Section 6.02 FCC Matters. The parties hereto shall cooperate and use their reasonable best efforts to persuade CCTV and the Owners to file,
and to consent to the Company filing, with the FCC an application seeking the FCC Consent within fourteen (14) days after the date hereof or as soon thereafter as practicable. Upon obtaining such consent from CCTV and the Owners for the
Company, the Company shall take all such actions necessary or desirable to file such application as soon as practicable. The Company shall use its reasonable best efforts to prosecute any such application and obtain the FCC Consent, cooperate with
CCTV and the Owners in providing all information requested by the FCC and taking all steps reasonably necessary or appropriate to expedite the preparation, filing, prosecution and granting of any such application. Without limiting the foregoing, the
parties hereto shall (i) use their reasonable best efforts to work with the Owners to cause all requisite filings and notifications to the FCC and other governmental or regulatory bodies requested or necessary in connection with the FCC
Consent, the Assignment, the Initial Closing and the Option Closing and the transactions contemplated by this Agreement; (ii) furnish to the other parties such information and assistance as such parties reasonably may request and as may be
reasonably necessary in connection with the preparation or prosecution of any such filings and notifications; (iii) keep the other parties promptly apprised of any communications with, and inquiries or requests for information from, such
governmental or regulatory bodies with respect to the transactions contemplated by this Agreement; (iv) keep the other parties apprised of the status of all applications filed with the FCC and all other governmental or regulatory bodies
responsible for communications matters; (v) permit the other parties to review any material communication given by it to, and consult with the other parties in advance of any meeting or conference with, any such governmental or regulatory body;
and (vi) use their reasonable best efforts to cause the FCC Consent-related conditions to closing to be satisfied. 
 Section 6.03
Escrow Arrangements. Prior to the Initial Closing, the Company and the Purchaser shall mutually agree upon an escrow agent, and negotiate (in good faith, each acting 

  

 13 

 
reasonably) the Escrow Agreement, upon terms mutually satisfactory to the Company and the Purchaser, to provide for the escrow arrangements referenced
herein. 
 Section 6.04 Dividends. The Company hereby agrees that each issuance of Purchased Securities to the Purchaser hereof
(no matter when delivered to the Purchaser hereunder) shall be made together with an amount or stock or property (as applicable) equal to all Dividends that would have been paid on such Purchased Securities if they had been outstanding on and after
the date hereof. Accordingly, at the Initial Closing, an amount or stock or property (as applicable) equal to all Dividends that would have been paid on one-half of the Purchased Securities if they had been outstanding on and after the date hereof
shall be delivered to the Purchaser, together with the Purchased Securities, and an amount or stock or property (as applicable) equal to all Dividends that would have been paid on the Escrowed Shares if they had been outstanding on and after the
date hereof shall be delivered into escrow. Thereafter and until the Option Closing Date, an amount or stock or property (as applicable) equal to all Dividends that would have been paid on the Escrowed Shares if they had been outstanding on and
after the date hereof, shall be paid into escrow and released upon the release of the Escrowed Shares. 
 Section 6.05 Blue Sky
Compliance. The Company will qualify the Purchased Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Purchaser shall reasonably request and will continue such qualifications in effect so long as
required for the offering and resale of the Purchased Securities; provided that the Company shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject. 
 Section 6.06 Current Public Information. While the Purchased Securities remain outstanding, the Company will at all times make available
adequate current public information within the meaning of Rule 144(c) under the Securities Act. 
 Section 6.07 No Integration.
Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D) will, directly or through any agent, sell, offer for sale, solicit offers to buy or otherwise negotiate in respect of, any security (as defined in the
Securities Act), that is or will be integrated with the sale of the Purchased Securities in a manner that would require registration of the Purchased Securities under the Securities Act. 
 Section 6.08 No General Solicitation or Directed Selling Efforts. None of the Company or any of its affiliates or any other person acting on
its or their behalf will (i) solicit offers for, or offer or sell, the Purchased Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act or (ii) engage in any directed selling efforts within the meaning of Regulation S, and all such persons will comply with the offering restrictions requirement of
Regulation S. 
  

 14 

 Section 6.09 No Stabilization. The Company will not take, directly or indirectly, any action
designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Purchased Securities. 
 Section 6.10 Option Agreement. Prior to the Assignment, and subject to the provisions of that certain Confidentiality Agreement between the Purchaser and the Company dated as January 2, 2007, the Purchaser will provide to
the Company such information as it reasonably requests regarding the Option Agreement and matters relating thereto, including the information obtained by the Purchaser or its representatives from the Owners or their representatives. Upon the
reasonable request of the Company, the Purchaser shall request additional information from the Owners for the Company. The Purchaser shall take such actions as may reasonably be requested by the Company to assist in ensuring that the closing occurs
under the Option Agreement, including that the Owners are taking the necessary steps to achieve the closing thereunder. 
 ARTICLE VII 

 MISCELLANEOUS 
 Section 7.01 Termination Prior to the Initial Closing. This Agreement may be terminated and the transactions contemplated hereunder may be abandoned at any time prior to the Initial Closing, by mutual written consent of
(a) the Company and (b) the Purchaser. 
 Section 7.02 Termination. The obligations of the Parties under this Agreement
(other than this Section 7.02) shall be terminated and the transactions contemplated hereby abandoned automatically, and without any action on the part of any party, if (i) the Option Agreement is terminated, or (ii) the closing of
the transactions contemplated by the Option Agreement does not occur by the Outside Date; provided that if this Agreement is terminated pursuant to this Section 7.02 (unless such termination is due to a breach or default thereunder by the Company
other than as a result of any action or inaction by the Purchaser), (w) the Assignment shall be null and void, and of no further force or effect, (x) the Purchaser shall be obligated to forfeit the Purchased Securities (including any
rights with respect to those being held in escrow), return any certificate or certificates representing such Purchased Securities to the Company, (y) the Company shall forfeit any rights with respect to the Option Closing Payment and
(z) the escrow agent shall release the certificates representing the Escrowed Shares to the Company. If the Company receives any refund of any amounts paid by the Purchaser under the Option Agreement, including without limitation, the Exercise
Payment and/or an amount equal to $50,000,000 which was delivered by the Purchaser at the execution of the Option Agreement, the Company shall deliver such amounts to the Purchaser, as soon as practicable, and in any event, no later than five
(5) Business Days after receipt thereof. 
 Section 7.03 Interpretation; Severability. Article, Section, Schedule, and
Exhibit references are to this Agreement, unless otherwise specified. All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended,
supplemented, and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to.” Whenever any party has an obligation under this Agreement, the expense of
complying with 

  

 15 

 
that obligation shall be an expense of such party unless otherwise specified. If any provision of this Agreement is held to be illegal, invalid, not binding,
or unenforceable, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid, not binding, or unenforceable provision had never comprised a part of this Agreement, and the remaining
provisions shall remain in full force and effect. 
 Section 7.04 Survival. The indemnities, covenants, representations and
warranties of the Company and the Purchaser contained in this Agreement or made by or on behalf of the Company or the Purchaser pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the
Purchased Securities and shall remain in full force and effect, regardless or any termination of this Agreement or any investigation made by or on behalf of the Company or the Purchaser. 
 Section 7.05 Waivers; Remedies; Amendments. 
 (a) No Waiver; Remedies Cumulative. No failure or delay on the part of any party in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any right, power, or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to a party
at law or in equity or otherwise. 
 (b) Amendments and Modifications. Except as otherwise provided herein, no
amendment, waiver, consent or modification of any provision of this Agreement shall be effective unless signed by each of the parties hereto affected by such amendment, waiver, consent or modification. Any amendment, supplement or modification of or
to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by any party hereto from the terms of any provision of this Agreement shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on any party hereto in any case shall entitle any party hereto to any other or further notice or demand in similar or
other circumstances. 
 Section 7.06 Indemnification. (a) In addition to all other rights and remedies available to the
Purchaser, the Company shall indemnify, defend and hold harmless each Purchaser and its affiliates and their respective partners, members, officers, directors, employees, agents and representatives (collectively, the “Purchaser
Representatives”; and together with the Purchaser, the “Purchaser Indemnified Persons”) against all losses, assessments, damages, liabilities, costs and expenses (including, but not limited to, interest, penalties and
reasonable legal and accounting fees and expenses) (collectively, “Damages”) and none of the Purchaser Indemnified Persons shall be liable to the Company or any other stockholder of the Company for or with respect to any and all
Damages related thereto or incurred in enforcing this Section 7.06, in connection with: 
 (i) any breach of a
representation or warranty by the Company under (a) this Agreement, including Article III of this Agreement, (b) any of the Operative 

  

 16 

 
Documents, (c) any of the exhibits or schedules thereto, or (d) any of the certificates or other documents furnished pursuant thereto by or on
behalf of the Company; and 
 (ii) any breach of any covenant or agreement by the Company (a) this Agreement;
(b) any of the Operative Documents; (c) any of the exhibits or schedules thereto; or (d) any of the certificates or other documents furnished pursuant thereto by or on behalf of the Company. 
 (b) All indemnification rights hereunder shall survive the execution and delivery of the Operative Documents and the consummation of the
transactions contemplated herein and therein, notwithstanding any inquiry or examination made for or on behalf of, or any knowledge of the Purchaser and/or any of the other Purchaser Indemnified Persons or the acceptance by the Purchaser of any
certificate or opinion. 
 Section 7.07 Binding Effect; Assignment. This Agreement shall be binding upon the Company, the
Purchaser, and their respective successors and permitted assigns. Except as expressly provided in this Agreement, this Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and
their respective successors and permitted assigns. 
 Section 7.08 Non-Disclosure. Notwithstanding anything herein to the
contrary, the Confidentiality Agreement shall remain in full force and effect according to its terms regardless of any termination of this Agreement. 
 Section 7.09 Communications. All notices and demands provided for hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, telecopy, air courier
guaranteeing overnight delivery or personal delivery to the following addresses: 
  

	 	(a)	If to a Purchaser: 

 Harbinger Capital Partners Master
Fund I, Ltd. 
 Harbinger Capital Partners Special Situations Fund, L.P. 
 c/o Harbinger Capital Partners Funds 
 555
Madison Avenue, 16th Floor 
 New York, New York 10022 
 Attn: Jeffrey T. Kirshner, Esq. 
 Facsimile: 212-508-3721 
 with copies to (such copies not constituting notice hereunder): 
 Harbert Management Corporation 
 One Riverchase Parkway South 
 Birmingham, Alabama 35244 
 Attn: General
Counsel 
 Facsimile: 205-987-5568 
  

 17 

 and 
 Bingham McCutchen LLP 
 150 Federal Street 
 Boston, Massachusetts 02110 
 Attention:
Joseph J. Basile, Jr. 
 Facsimile: (212) 752-5378 
  

	 	(b)	If to the Company: 

 TerreStar Networks Inc. 

12010 Sunset Hills Road, 6th Floor 
 Reston, VA 20190 
 Attention: Jeffrey
Epstein 
 Tel: (    )
        -         
 Fax:
(    )         -         
 with a copy (which shall not constitute notice) to: 
 Hogan & Hartson LLP 
 555 13th Street, NW 
 Washington, DC
20004-1109 
 Attention:
                             
 Tel: (    )         -        

 Fax: (    )
        -         
 or to such other address as the Company or
the Purchaser may designate in writing. All notices and communications shall be deemed to have been duly given at the time delivered by hand, if personally delivered; upon actual receipt if sent by certified mail, return receipt requested, or
regular mail, if mailed; when receipt acknowledged, if sent via facsimile; and upon actual receipt when delivered to an air courier guaranteeing overnight delivery. 
 Section 7.10 Entire Agreement. This Agreement and the other agreements and documents referred to herein are intended by the parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than
those set forth or referred to herein or therein with respect to the rights granted by the Company or any of its Affiliates or the Purchaser or any of its Affiliates set forth herein or therein. This Agreement and the other agreements and documents
referred to herein supersede all prior agreements and understandings between the parties with respect to such subject matter. 
  

 18 

 Section 7.11 Governing Law. This Agreement will be construed in accordance with and
governed by the laws of the State of New York without regard to principles of conflicts of laws.  
 Section 7.12 Fees and
Expenses. The Company shall bear (i) its own expenses and legal fees incurred on its behalf with respect to this Agreement and the transactions contemplated hereby and (ii) the expenses and legal fees incurred by the Purchaser with
respect to this Agreement and the transactions contemplated hereby. 
 Section 7.13 Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement. 
 [SIGNATURE PAGES FOLLOW] 
  

 19 

 IN WITNESS WHEROF, the parties hereto have executed this Agreement on the date first set forth.

  

			
	TERRESTAR CORPORATION
		
	By:	 	 /s/ Robert H. Brumley

	Name:	 	 Robert H. Brumley

	Title:	 	 President and Chief Executive Officer

 [Signature Page to Spectrum Contribution Agreement] 

			
	 HARBINGER CAPITAL PARTNERS
 MASTER FUND I,
LTD

		
	By:	 	 Harbinger Capital Partners Offshore Manager, L.L.C.,
 as investment manager

		
	By:	 	 /s/ William R. Lucas, Jr.

	Name:	 	William R. Lucas, Jr.
	Title:	 	Executive Vice Presidents
	
	 HARBINGER CAPITAL PARTNERS
 SPECIAL
SITUATIONS FUND, L.P.

		
	By:	 	 Harbinger Capital Partners Special Situations GP, LLC,
 as general partner

		
	By:	 	 /s/ William R. Lucas, Jr.

	Name:	 	William R. Lucas, Jr.
	Title:	 	Executive Vice President

 [Signature Page to Spectrum Contribution Agreement]Exhibit 10.1

 Exhibit 10.1 
  
  
  
  
  
  
  
 PAETEC HOLDING CORP. 
 EMPLOYEE
STOCK PURCHASE PLAN 
  
  
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	1.	  	 DEFINITIONS
	  	1
	2.	  	 SHARES SUBJECT TO THE PLAN
	  	1
	3.	  	 ADMINISTRATION
	  	2
	4.	  	 INTERPRETATION
	  	2
	5.	  	 ELIGIBLE EMPLOYEES
	  	2
	6.	  	 PARTICIPATION IN THE PLAN
	  	2
	7.	  	 OFFERINGS
	  	2
	8.	  	 PURCHASE PERIODS
	  	3
	9.	  	 RIGHTS TO PURCHASE COMMON STOCK; PURCHASE PRICE
	  	3
	10.	  	 TIMING OF PURCHASE
	  	3
	11.	  	 PURCHASE LIMITATION
	  	3
	12.	  	 ISSUANCE OF STOCK CERTIFICATES AND SALE OF PLAN SHARES
	  	3
	13.	  	 WITHHOLDING OF TAXES
	  	4
	14.	  	 ACCOUNT STATEMENTS
	  	4
	15.	  	 PARTICIPATION ADJUSTMENT
	  	4
	16.	  	 CHANGES IN ELECTIONS TO PURCHASE
	  	4
		  	 a.      Ceasing Payroll Deductions or Periodic Payments
	  	4
		  	 b.      Changing Payroll Deductions During a Purchase Period
	  	4
		  	 c.      Modifying Payroll Deductions or Periodic Payments at the Start of a Purchase Period
	  	4
	17.	  	 TERMINATION OF EMPLOYMENT
	  	5
	18.	  	 LAY-OFF, AUTHORIZED LEAVE OF ABSENCE OR DISABILITY
	  	5
	19.	  	 FAILURE TO MAKE PERIODIC CASH PAYMENTS
	  	5
	20.	  	 TERMINATION OF PARTICIPATION
	  	5
	21.	  	 ASSIGNMENT
	  	6
	22.	  	 APPLICATION OF FUNDS
	  	6
	23.	  	 NO RIGHT TO CONTINUED EMPLOYMENT
	  	6
	24.	  	 AMENDMENT OF PLAN
	  	6
	25.	  	 TERM AND TERMINATION OF THE PLAN
	  	6
	26.	  	 EFFECT OF CHANGES IN CAPITALIZATION
	  	7
		  	 a.      Changes in Stock
	  	7
		  	 b.      Reorganization in Which the Company Is the Surviving
Corporation
	  	7
		  	 c.      Reorganization in Which the Company Is Not the Surviving
Corporation, Sale of Assets or Stock, and other Corporate Transactions
	  	7
		  	 d.      Adjustments
	  	7
		  	 e.      No Limitations on Company
	  	8
	27.	  	 GOVERNMENTAL REGULATION
	  	8
	28.	  	 STOCKHOLDER RIGHTS
	  	8
	29.	  	 RULE 16b-3
	  	8
	30.	  	 PAYMENT OF PLAN EXPENSES
	  	8
	31.	  	 ELECTRONIC DELIVERY
	  	8

  

 i 

 PAETEC HOLDING CORP. 
 EMPLOYEE STOCK PURCHASE PLAN 
 The Board of Directors of the Company has adopted this Employee Stock
Purchase Plan to enable eligible employees of the Company and its Participating Affiliates, through payroll deductions or, in the discretion of the Company, other cash contributions, to purchase shares of the Company’s Common Stock. The Plan is
for the benefit of the employees of the Company and any Participating Affiliates. The Plan is intended to benefit the Company by increasing the employees’ interest in the Company’s growth and success and encouraging employees to remain in
the employ of the Company or its Participating Affiliates. The provisions of the Plan are set forth below: 
  

	1.	DEFINITIONS. 

 1.1.    “Board” means the Board of Directors of the Company. 
 1.2.    “Code” means the Internal Revenue Code of 1986, as amended. 
 1.3.    “Committee” means a committee of, and designated from time to time by resolution of, the Board. 
 1.4.    “Common Stock” means the Company’s class A common stock, par value $0.01 per share. 
 1.5.    “Company” means PAETEC Holding Corp. 
 1.6.    “Effective Date” means November 7, 2007, the date of approval of the Plan by the Board. 
 1.7.    “Fair Market Value” means the value of each share of Common Stock subject to the Plan on a given date determined as follows: if on such date the shares of Common Stock are listed on an
established national or regional stock exchange, or are publicly traded on an established securities market, the fair market value of the shares of Common Stock shall be the closing price of the shares of Common Stock on such exchange or in such
market (the exchange or market selected by the Board if there is more than one such exchange or market) on such date or, if there is no such reported closing price, the fair market value shall be the mean between the highest bid and lowest asked
prices or between the high and low sale prices on such day or, if no sale of the shares of Common Stock is reported for such day, on the next preceding day on which any sale shall have been reported. If the shares of Common Stock are not listed on
such an exchange, quoted on such System or traded on such a market, fair market value shall be determined by the Board in good faith. 
 1.8.    “Participating Affiliate” means any company or other trade or business that is a subsidiary of the Company (determined in accordance with the principles of Sections 424(e) and (f) of the
Code and the regulations thereunder). 
 1.9.    “Plan” means the PAETEC Holding Corp. Employee Stock
Purchase Plan. 
 1.10.    “Purchase Period” means the period determined by the Committee pursuant to
Section 8, during which payroll deductions or, in the discretion of the Committee, other cash payments are accumulated for the purpose of purchasing Common Stock under the Plan, and on the last trading day of which purchases of Common
Stock are made under the Plan. 
 1.11. “Purchase Price” means the purchase price of each share of Common Stock purchased
under the Plan. 
  

	2.	SHARES SUBJECT TO THE PLAN. 

 Subject to adjustment as provided in Section 26 below, the aggregate number of shares of Common Stock that may be made available for purchase by participating employees under the Plan is four million one hundred 

  

 1 

 
thousand (4,100,000). The shares issuable under the Plan may, in the discretion of the Board, be authorized but unissued shares, treasury shares, or shares
purchased on the open market. 
  

	3.	ADMINISTRATION. 

 The Plan shall be administered
under the direction of the Committee. No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan. 
  

	4.	INTERPRETATION. 

 It is intended that the Plan will
meet the requirements for an “employee stock purchase plan” under Section 423 of the Code, and it is to be so applied and interpreted. Subject to the express provisions of the Plan, the Committee shall have authority to interpret the
Plan, to prescribe, amend and rescind rules relating to it, and to make all other determinations necessary or advisable in administering the Plan, all of which determinations will be final and binding upon all persons. 
  

	5.	ELIGIBLE EMPLOYEES. 

 Any employee of the
Company or any of its Participating Affiliates may participate in the Plan, except the following, who are ineligible to participate: (a) an employee who has been employed by the Company or any of its Participating Affiliates for less than two
months as of the beginning of a Purchase Period; (b) an employee whose customary employment is for less than five months in any calendar year; (c) an employee whose customary employment is 20 hours or less per week; and (d) an
employee who, after exercising his or her rights to purchase shares under the Plan, would own shares of Common Stock (including shares that may be acquired under any outstanding options) representing five percent or more of the total combined voting
power of all classes of stock of the Company. The Board may at any time in its sole discretion, if it deems it advisable to do so, terminate the participation of the employees of a particular Participating Affiliate. 
  

	6.	PARTICIPATION IN THE PLAN. 

 An
eligible employee may become a participating employee in the Plan by completing the required documents provided by the Company, the stock brokerage or other financial services firm designated by the Company (the “Designated Broker”) or any
other person or entity designated by the Company and submitting those documents in accordance with the instructions contained therein. The required documents will authorize: (i) payment of the Purchase Price by payroll deductions, and if
authorized by the Committee, payment of the Purchase Price by means of periodic cash payments from participating employees, and (ii) the purchase of shares of Common Stock for the employee’s account in accordance with the terms of the
Plan. Enrollment will become effective upon the first day of a Purchase Period. 
  

	7.	OFFERINGS. 

 At the time an eligible employee
submits his or her election to participate in the Plan (as provided in Section 6 above), the employee shall elect to have deductions made from his or her pay on each pay day following his or her enrollment in the Plan, and for as long as
he or she shall participate in the Plan. The deductions will be credited to the participating employee’s account under the Plan. No interest shall accrue on the payroll deductions of a participating employee. Pursuant to Section 6
above, the Committee shall also have the authority to authorize in the election form the payment for shares of Common Stock through cash payments from participating employees. An employee may not during any Purchase Period change his or her
percentage of payroll deduction for that Purchase Period, nor may an employee withdraw any contributed funds, other than in accordance with Sections 16 through 20 below. 
  

 2 

	8.	PURCHASE PERIODS. 

 The commencement date and
duration of the Purchase Periods shall be determined by the Committee; provided, that, the duration of each Purchase Period shall not exceed 27 months. The first Purchase Period under the Plan shall commence on the date determined by the Committee.

  

	9.	RIGHTS TO PURCHASE COMMON STOCK; PURCHASE PRICE. 

 Rights to purchase shares of Common Stock will be deemed granted to participating employees as of the first trading day of each Purchase Period. The Purchase Price of each share of Common Stock shall be determined by
the Committee; provided, however, that the Purchase Price shall not be less than the lesser of 85 percent of the Fair Market Value of the Common Stock (i) on the first trading day of the Purchase Period or (ii) on the last trading day of
the Purchase Period; provided, further, that in no event shall the Purchase Price be less than the par value of the Common Stock. 
  

	10.	TIMING OF PURCHASE. 

 Unless a
participating employee has given prior written notice terminating such employee’s participation in the Plan, or the employee’s participation in the Plan has otherwise been terminated as provided in Sections 16 through 20
below, such employee will be deemed to have exercised automatically his or her right to purchase Common Stock on the last trading day of the Purchase Period (except as provided in Section 16 below) for the number of shares of Common
Stock which the accumulated funds in the employee’s account at that time will purchase at the Purchase Price, subject to the participation adjustment provided for in Section 15 below and subject to adjustment under
Section 26 below. 
  

	11.	PURCHASE LIMITATION. 

 Notwithstanding
any other provision of the Plan, no employee may purchase in any one calendar year under the Plan and all other “employee stock purchase plans” of the Company and its Participating Affiliates shares of Common Stock having an aggregate Fair
Market Value in excess of $25,000, determined as of the first trading date of the Purchase Period as to shares purchased during such period. Effective upon the last trading day of the Purchase Period, a participating employee will become a
stockholder with respect to the shares purchased during such period, and will thereupon have all dividend, voting and other ownership rights incident thereto. In addition, the Committee or the Board may impose a limit on the number of shares or the
value of shares that an employee may purchase in each Offering or Purchase Period; provided, that, such limitations shall be imposed prior to the start of the relevant Offering or Purchase Period.  
  

	12.	ISSUANCE OF STOCK CERTIFICATES AND SALE OF PLAN SHARES. 

 On the last trading day of the Purchase Period, a participating employee will be credited with the number of shares of Common Stock purchased for his or her account under the Plan during such Purchase Period. Shares
purchased under the Plan will be held in the custody of the Designated Broker. The Designated Broker may hold the shares purchased under the Plan in stock certificates in nominee names or by book-entry registration and may commingle shares held in
its custody in a single account or stock certificate without identification as to individual participating employees. The Committee shall have the right to require any or all of the following with respect to shares of Common Stock purchased under
the Plan: 
 (a) that a participating employee may not request that all or part of the shares of Common Stock be reissued in the
employee’s own name and the stock certificates delivered to the employee until two years (or such shorter period of time as the Committee may designate) have elapsed since the first day of the Purchase Period in which the shares were purchased
and one year has elapsed since the day the shares were purchased (the “Section 423 Holding Period”); 
 (b) that all sales of shares
during the Section 423 Holding Period applicable to such shares be performed through a licensed broker acceptable to the Company; and 
  

 3 

 (c) that participating employees abstain from selling or otherwise transferring shares of Common Stock
purchased pursuant to the Plan for a period lasting up to two years from the date the shares were purchased pursuant to the Plan. 
  

	13.	WITHHOLDING OF TAXES. 

 To the extent that
a participating employee realizes ordinary income in connection with a sale or other transfer of any shares of Common Stock purchased under the Plan, the Company may withhold amounts needed to cover such taxes from any payments otherwise due and
owing to the participating employee or from shares that would otherwise be issued to the participating employee hereunder. Any participating employee who sells or otherwise transfers shares purchased under the Plan within two years after the
beginning of the Purchase Period in which the shares were purchased must within 30 days of such transfer notify the Payroll Department of the Company in writing of such transfer. 
  

	14.	ACCOUNT STATEMENTS. 

 The Company will
cause each participating employee to be provided a statement for each Purchase Period during which the employee purchases Common Stock under the Plan, reflecting the amount of payroll deductions during the Purchase Period, the number of shares
purchased for the employee’s account, the price per share of the shares purchased for the employee’s account and the number of shares held for the employee’s account at the end of the Purchase Period.  
  

	15.	PARTICIPATION ADJUSTMENT. 

 If in any Purchase
Period the number of unsold shares that may be made available for purchase under the Plan pursuant to Section 2 above is insufficient to permit exercise of all rights deemed exercised by all participating employees pursuant to
Section 10 above, a participation adjustment will be made, and the number of shares purchasable by all participating employees will be reduced proportionately. Any funds then remaining in a participating employee’s account after
such exercise will be refunded to the employee. 
  

	16.	CHANGES IN ELECTIONS TO PURCHASE. 

  

	 	a.	Ceasing Payroll Deductions or Periodic Payments 

 A
participating employee may, at least 5 days prior to the last trading day of the Purchase Period, by written notice to the Company, or any person or entity designated by the Company, direct the Company to cease payroll deductions (or, if the payment
for shares is being made through periodic cash payments, notify the Company that such payments will be terminated), in accordance with the following alternatives: 
 (i) The employee’s option to purchase shall be reduced to the number of shares which may be purchased, as of the last day of the Purchase Period, with the amount then credited to the employee’s account; or

 (ii) Withdraw the amount in such employee’s account and terminate such employee’s option to purchase. 
  

	 	b.	Changing Payroll Deductions During a Purchase Period 

 At the discretion of the Company, a participating employee may change his or her rate of contribution during a Purchase Period by delivering to the Company, or any person or entity designated by the Company, the required documents regarding
election to participate in the Plan under Section 6 above. 
  

	 	c.	Modifying Payroll Deductions or Periodic Payments at the Start of a Purchase Period 

 Any participating employee may increase or decrease his or her payroll deduction or periodic cash payments, to take effect on the first day of the next
Purchase Period, by delivering to the Company, or any person or entity designated by the Company, a new form regarding election to participate in the Plan under Section 6 above. 
  

 4 

	17.	TERMINATION OF EMPLOYMENT. 

 In the event a
participating employee leaves the employ of the Company or a Participating Affiliate for any reason prior to the last day of the Purchase Period except under circumstances described in Section 18 below, the amount in the employee’s
account will be distributed to the employee (or to the employee’s beneficiary (or estate in the case a beneficiary is not named) in the case of the employee’s death) and the employee’s option to purchase will terminate. 
  

	18.	LAY-OFF, AUTHORIZED LEAVE OF ABSENCE OR DISABILITY. 

 Payroll deductions for shares for which a participating employee has an option to purchase may be suspended during any period of absence of the employee from work due to temporary lay-off, authorized leave of absence or disability or, if
the employee so elects, periodic payments for such shares may continue to be made in cash. 
 If such employee returns to active service
prior to the last day of the Purchase Period, the employee’s payroll deductions will be resumed and if said employee did not make periodic cash payments during the employee’s period of absence, the employee shall, by written notice to the
Company, or any person or entity designated by the Company, within 10 days after the employee’s return to active service, but not later than the last day of the Purchase Period, elect: 
 (a) To make up any deficiency in the employee’s account resulting from a suspension of payroll deductions by an immediate cash payment; 

(b) Not to make up such deficiency, in which event the number of shares to be purchased by the employee shall be reduced to the number of whole shares
which may be purchased with the amount, if any, then credited to the employee’s account plus the aggregate amount, if any, of all payroll deductions to be made thereafter; or 
 (c) Withdraw the amount in the employee’s account and terminate the employee’s option to purchase. 
 A participating employee on lay-off, authorized leave of absence or disability on the last day of the Purchase Period shall deliver written notice to the
Company, or any person or entity designated by the Company, on or before the last day of the Purchase Period, electing one of the alternatives provided in the foregoing clauses (a), (b) and (c) of this Section 18. If any
employee fails to deliver such written notice within 10 days after the employee’s return to active service or by the last day of the Purchase Period, whichever is earlier, the employee shall be deemed to have elected subsection 18(c) above.

 If the period of a participating employee’s lay-off, authorized leave of absence or disability shall terminate on or before the last
day of the Purchase Period, and the employee shall not resume active employment with the Company or a Participating Affiliate, the employee shall receive a distribution in accordance with the provisions of Section 17 of this Plan.

  

	19.	FAILURE TO MAKE PERIODIC CASH PAYMENTS. 

 Under any
of the circumstances contemplated by this Plan, where the purchase of shares is to be made through periodic cash payments in lieu of payroll deductions, the failure to make any such payments shall reduce, to the extent of the deficiency in such
payments, the number of shares purchasable under this Plan by the participating employee. 
  

	20.	TERMINATION OF PARTICIPATION. 

 A
participating employee will be refunded all moneys in his or her account, and his or her participation in the Plan will be terminated if either (a) the Board elects to terminate the Plan as provided in Section 25 below, or
(b) the employee ceases to be eligible to participate in the Plan under Section 5 above. As soon as practicable 

  

 5 

 
following termination of an employee’s participation in the Plan, the Company will deliver to the employee a check representing the amount in the
employee’s account and a stock certificate representing the number of whole shares held in the employee’s account. Once terminated, participation may not be reinstated for the then current Purchase Period, but, if otherwise eligible, the
employee may elect to participate in any subsequent Purchase Period. 
  

	21.	ASSIGNMENT. 

 No participating employee may assign
his or her rights to purchase shares of Common Stock under the Plan, whether voluntarily, by operation of law or otherwise. Any payment of cash or issuance of shares of Common Stock under the Plan may be made only to the participating employee (or,
in the event of the employee’s death, to the employee’s beneficiary (or estate in the case a beneficiary is not named)). Once a stock certificate has been issued to the employee or for his or her account, such certificate may be assigned
the same as any other stock certificate. 
  

	22.	APPLICATION OF FUNDS. 

 All funds received
or held by the Company under the Plan may be used for any corporate purpose until applied to the purchase of Common Stock and/or refunded to participating employees. Participating employees’ accounts will not be segregated. 
  

	23.	NO RIGHT TO CONTINUED EMPLOYMENT. 

 Neither the Plan nor any right to purchase Common Stock under the Plan confers upon any employee any right to continued employment with the Company or any of its Participating Affiliates, nor will an employee’s participation in the
Plan restrict or interfere in any way with the right of the Company or any of its Participating Affiliates to terminate the employee’s employment at any time. 
  

	24.	AMENDMENT OF PLAN. 

 The Board may, at any
time, amend the Plan in any respect (including an increase in the percentage specified in Section 9 above used in calculating the Purchase Price); provided, however, that without approval of the stockholders of the Company no amendment
shall be made (a) increasing the number of shares specified in Section 2 above that may be made available for purchase under the Plan (except as provided in Section 26 below) or (b) changing the eligibility
requirements for participating in the Plan. No amendment may be made that impairs the vested rights of participating employees. 
  

	25.	TERM AND TERMINATION OF THE PLAN. 

 The Plan shall be effective as of the Effective Date, subject to approval of the Plan by the stockholders of the Company; provided, however, that upon approval of the Plan by the stockholders of the Company, all rights to purchase
shares granted under the Plan on or after the Effective Date shall be fully effective as if the stockholders of the Company had approved the Plan on the Effective Date. If the stockholders fail to approve the Plan on or before one year after the
Effective Date, the Plan shall terminate, any rights to purchase shares granted hereunder shall be null and void and of no effect, and all contributed funds shall be refunded to participating employees. No shares shall be sold pursuant to the Plan
unless the Plan is approved by the Company’s stockholders in accordance with this Section 25. The Board may terminate the Plan at any time and for any reason or for no reason, provided that such termination shall not impair
any rights of participating employees that have vested at the time of termination. In any event, the Plan shall, without further action of the Board, terminate ten (10) years after the date of adoption of the Plan by the Board or, if earlier,
at such time as all shares of Common Stock that may be made available for purchase under the Plan pursuant to Section 2 above have been issued. 
  

 6 

	26.	EFFECT OF CHANGES IN CAPITALIZATION. 

  

	 	a.	Changes in Stock. 

 If the number of
outstanding shares of Common Stock is increased or decreased or the shares of Common Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any recapitalization, reclassification,
stock split, reverse split, combination of shares, exchange of shares, stock dividend, or other distribution payable in capital stock, or other increase or decrease in such shares effected without receipt of consideration by the Company occurring
after the Effective Date, the number and kinds of shares that may be purchased under the Plan shall be adjusted proportionately and accordingly by the Company. In addition, the number and kind of shares for which rights are outstanding shall be
similarly adjusted so that the proportionate interest of a participating employee immediately following such event shall, to the extent practicable, be the same as immediately prior to such event. Any such adjustment in outstanding rights shall not
change the aggregate Purchase Price payable by a participating employee with respect to shares subject to such rights, but shall include a corresponding proportionate adjustment in the Purchase Price per share. Notwithstanding the foregoing, in the
event of a spin-off that results in no change in the number of outstanding shares of the Common Stock of the Company, the Company may, in such manner as the Company deems appropriate, adjust (i) the number and kind of shares for which rights
are outstanding under the Plan, and (ii) the Purchase Price per share. 
  

	 	b.	Reorganization in Which the Company Is the Surviving Corporation. 

 Subject to Section c, if the Company shall be the surviving corporation in any reorganization, merger or consolidation of the Company with one or
more other corporations, all outstanding rights under the Plan shall pertain to and apply to the securities to which a holder of the number of shares of Common Stock subject to such rights would have been entitled immediately following such
reorganization, merger or consolidation, with a corresponding proportionate adjustment of the Purchase Price per share so that the aggregate Purchase Price thereafter shall be the same as the aggregate Purchase Price of the shares subject to such
rights immediately prior to such reorganization, merger or consolidation. 
  

	 	c.	Reorganization in Which the Company Is Not the Surviving Corporation, Sale of Assets or Stock, and other Corporate Transactions.

 Upon any dissolution or liquidation of the Company, or upon a merger, consolidation or reorganization of the Company with
one or more other corporations in which the Company is not the surviving corporation, or upon a sale of all or substantially all of the assets of the Company to another corporation, or upon any transaction (including, without limitation, a merger or
reorganization in which the Company is the surviving corporation) approved by the Board that results in any person or entity owning more than 80 percent of the combined voting power of all classes of stock of the Company, the Plan and all rights
outstanding hereunder shall terminate, except to the extent provision is made in writing in connection with such transaction for the continuation of the Plan and/or the assumption of the rights theretofore granted, or for the substitution for such
rights of new rights covering the stock of a successor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kinds of shares and exercise prices, in which event the Plan and rights theretofore granted
shall continue in the manner and under the terms so provided. In the event of any such termination of the Plan, the Purchase Period shall be deemed to have ended on the last trading day prior to such termination, and in accordance with
Section 12 above the rights of each participating employee then outstanding shall be deemed to be automatically exercised on such last trading day. The Board shall send written notice of an event that will result in such a termination to
all participating employees at least ten (10) days prior to the date upon which the Plan will be terminated. 
  

	 	d.	Adjustments. 

 Adjustments under this
Section 26 related to stock or securities of the Company shall be made by the Committee, whose determination in that respect shall be final, binding, and conclusive. 
  

 7 

	 	e.	No Limitations on Company. 

 The
grant of a right pursuant to the Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge, consolidate, dissolve
or liquidate, or to sell or transfer all or any part of its business or assets. 
  

	27.	GOVERNMENTAL REGULATION. 

 The Company’s
obligation to issue, sell and deliver shares of Common Stock pursuant to the Plan is subject to such approval of any governmental authority and any national securities exchange or other market quotation system as may be required in connection with
the authorization, issuance or sale of such shares. 
  

	28.	STOCKHOLDER RIGHTS. 

 The Company will deliver
to each participating employee who purchases shares of Common Stock under the Plan, as promptly as practicable by mail or otherwise, all notices of meetings, proxy statements, proxies and other materials distributed by the Company to its
stockholders. Any shares of Common Stock held by the Agent for an employee’s account will be voted in accordance with the employee’s duly delivered and signed proxy instructions. There will be no charge to participating employees in
connection with such notices, proxies and other materials. 
  

	29.	RULE 16b-3. 

 Transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 or any successor provision under the Securities Exchange Act of 1934, as amended. If any provision of the Plan or action by the Board fails to so comply, it shall be deemed null and
void to the extent permitted by law and deemed advisable by the Board. Moreover, in the event the Plan does not include a provision required by Rule 16b-3 to be stated herein, such provision (other than one relating to eligibility requirements, or
the price and amount of awards) shall be deemed automatically to be incorporated by reference into the Plan. 
  

	30.	PAYMENT OF PLAN EXPENSES. 

 The
Company will bear all costs of administering and carrying out the Plan. 
  

	31.	ELECTRONIC DELIVERY. 

 All references to documents
and forms shall include information provided in electronic form and, in the discretion of the Company or any person or entity designated by the Company, any written notices to be provided by participants may be provided electronically. 

* * * 
 This Plan was duly
adopted and approved by the Board of Directors of the Company on the 7th day of November, 2007. 
  

	
	
	/s/ Charles E. Sieving
	Secretary

 This Plan was duly approved by the stockholders of the Company on the 18th day of December,
2007. 
  

	
	
	/s/ Charles E. Sieving
	Secretary

  

 8

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