CONTRIBUTION, ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS CONTRIBUTION, ASSIGNMENT AND ASSUMPTION AGREEMENT (this “ Agreement ”), is made on September 14, 2009 (“ Effective Date ”), by and among Grande Communications Holdings, Inc., a Delaware corporation (“ Grande Holdings ”), Grande Communications Networks LLC, a Delaware limited liability company (“ Grande Operating ”), Grande Investment L.P., a Delaware limited partnership (“ Ultimate Parent ”), and Grande Parent LLC, a Delaware limited liability company and wholly-owned subsidiary of Ultimate Parent (“ Parent ,” together with Ultimate Parent and ABRY, the “ ABRY Parties ”),.  The parties to this Agreement are collectively referred to herein as the (“ Parties .”)

WHEREAS, the Parties have entered into that certain Recapitalization Agreement (the “ Recapitalization Agreement ”), dated as of August 27, 2009, by and among ABRY Partners VI, L.P., a Delaware limited partnership (“ ABRY ”), Ultimate Parent, Parent, Grande Holdings and Grande Operating (capitalized terms used in this Agreement but not otherwise defined shall have the meanings ascribed to them in the Recapitalization Agreement);

WHEREAS, Grande Holdings currently owns all of the outstanding Equity Securities of Grande Operating;

WHEREAS, pursuant to the terms and conditions of the Recapitalization Agreement, on the Closing Date, Grande Holdings or a wholly-owned subsidiary thereof designated by Grande Holdings will acquire a general partner interest in Ultimate Parent and Grande Operating will become a wholly-owned subsidiary of Parent;

WHEREAS, as a condition to entering into and performing their respective obligations under the Recapitalization Agreement, the Parties are requiring Grande Holdings and Grande Operating to enter into this Agreement pursuant to which Grande Holdings will assign to Grande Operating certain assets used in the Business and Grande Operating will assume certain obligations related thereto.

NOW, THEREFORE, in consideration of the premises and the representations, warranties and agreements contained herein, the Parties hereto agree as follows:

Section 1.1              Contribution and Assignment of the Grande Holdings Assets .  Subject to the terms and conditions of this Agreement, Grande Holdings hereby contributes, assigns, transfers, conveys and delivers to Grande Operating, and Grande Operating hereby accepts from Grande Holdings, free and clear of any Encumbrances other than Permitted Encumbrances, all of Grande Holdings’ right, title and interest in, to and under all of its assets other than the Excluded Assets (as defined in Section 1.2 below), as each thereof exists on the Effective Date (collectively, the “ Transferred Assets ”).  Without limiting the foregoing, the Transferred Assets shall include the following specified items except to the extent included in the Excluded Assets:

(a)             All Cash and Cash Equivalents .  All cash and cash equivalents and rights thereto held by or for the account of Grande Holdings as of the Effective Date, except as provided in Section 1.2(a) ;

(b)             Tangible Personal Property .  All machinery, equipment, furniture, fixtures, tools, spare parts, supplies, maintenance equipment and materials; all computers, servers, routers, and other computer networking components; and all other items of tangible personal property of every description held by Grande Holdings, if any, as of the Effective Date and used in connection with the Business (collectively, the “ Tangible Personal Property ”);

(c)             Inventory and Supplies .  All inventory and supplies, if any, owned by Grande Holdings as of the Effective Date and used with respect to the Business including all hardware, software, devices, tools, and other products of every kind held for sale, license or other form of distribution to customers in whatever form and media (collectively, the “ Inventory ”);

(d)            Contracts and Licenses .  To the extent related to the Business, all rights and benefits under all contracts, governmental approvals, and other documents, commitments, arrangements, undertakings, or authorizations, including the contracts set forth in Schedule 1.1(d) (collectively, the “ Transferred Contracts ”);

(e)            Permits .  All of Grande Holdings’ rights in each of the licenses and permits, if any, used in the operation of the Business, to the extent such licenses and permits may be transferred or assigned;

(f)             Intellectual Property .  All of Grande Holdings’ right, title and interest, if any, in and to all of the intellectual property used in the Business (collectively, the “ Intellectual Property ”);

(g)            Names .  All of Grande Holdings’ right, title and interest, if any, to all Web sites to the extent relating to the Business; all corporate and trade names relating to the Business; all Internet domain names in all forms that include in whole or in part any words consisting of or similar to the names set forth in Schedule 1.1(g) and all content in electronic and other forms with respect to Internet web sites relating to the Business; and all telephone and facsimile numbers and post office boxes relating to the Business;

(h)            Receivables and Prepaids . To the extent relating to the Business, any and all accounts receivable, general intangibles, deposits, refunds, unbilled costs and fees, any items prepaid by Grande Holdings, rights of set-off, promissory notes and other obligations of any kind payable to Grande Holdings, and other receivables of any kind;

(i)             Litigation Claims .  All claims, demands, rights defenses, actions, causes of action, suits, contracts, obligations, accounts, defenses, offsets, powers, privileges, licenses and franchises of any kind or character whatsoever, known or unknown, suspected or unsuspected, arising prior to, the Effective Date, in contract or in tort, at law or in equity, or under any other theory of law, held by Grande Holdings against any Person and relating to the Transferred Assets or Assumed Liabilities, including (i) rights of setoff, counterclaim, or recoupment, and claims on contracts or for breaches of duties imposed by Law and (ii) such claims and defenses as fraud, mistake, duress and usury; and

(j)              Benefit Plans . All rights and interests in and to the Grande Benefit Plans (other than the Grande Communications Holdings, Inc. Second Amended and Restated 2000 Stock Incentive Plan, as amended, and all predecessors of such Plan, and all Stock Option Agreements entered into with grantees of options and restricted stock thereunder).

Section 1.2              Excluded Assets .  Notwithstanding anything to the contrary contained in Section 1.1 or elsewhere in this Agreement, Grande Operating shall not receive any right, title or interest in or to the following assets of Grande Holdings, which are not part of the transactions contemplated under this Agreement and which shall remain the property of Grande Holdings after the Effective Date (the “ Excluded Assets ”):

(a)            Bank accounts, but not any other cash or cash equivalent or right thereto or deposited or credited to any such account except for an amount equal to the Distribution Amount of the cash and other cash equivalents held by Grande Holdings or distributed by Grande Operating to Grande Holdings on or prior to the Effective Date;

(b)            all minute books, stock records and corporate seals of Grande Holdings, and all Contracts between Grande Holdings and any Securityholder or other holder of Equity Securities of Grande Holdings relating to its ownership of such Equity Securities, and all related records;

(c)            all shares of capital stock of Grande Holdings held in treasury;

(d)            all Contracts of Grande Holdings for legal, investment advisory and accounting services other than those set forth on Schedule 1.1(d) ;

(e)            all insurance policies related to directors and officers insurance and all rights thereunder;

(f)             all records that Grande Holdings is required by Law to retain in its possession or that related to the Excluded Assets;

(g)            all rights of Grande Holdings under this Agreement, the Recapitalization Agreement, the Ancillary Agreements and the other documents and instruments delivered thereunder except for the Note Purchase Agreement;

(h)            all refunds for federal taxes of any kind, including taxes related to any consolidated group that includes Grande Holdings and Grande Operating (or a predecessor or any member of such consolidated group);

(i)             all refunds for state or local taxes of any kind relating to Grande Holdings (including Delaware franchise tax); and

(j)             the other assets reflected on Schedule 1.2 .

Section 1.3             Power of Attorney .  Grande Holdings constitutes and appoints Grande Operating the true and lawful agent and attorney in fact of Grande Holdings, with full power of substitution and resubstitution, in whole or in part, in the name and stead of Grande Holdings but on behalf and for the benefit of Grande Operating and their respective successors and assigns, from time to time:

(a)            to demand, receive and collect any and all of the Transferred Assets and to give receipts and releases for and with respect to the same, or any part thereof;

(b)            to institute and prosecute, in the name of Grande Holdings or otherwise, but at the expense and for the benefit of Grande Operating, any and all proceedings at law, in equity or otherwise, which Grande Operating or their respective successors and assigns may deem proper to collect or reduce to possession any of the Transferred Assets and to collect or enforce any claim or right of any kind hereby assigned or transferred, or intended so to be; and

(c)            to do all things legally permissible, required, or reasonably required, to recover and collect the Transferred Assets.

                      Grande Holdings declares that the foregoing powers are coupled with an interest and are and will be irrevocable by Grande Holdings.

Section 1.4              Communications .  Grande Operating shall forward any and all communications received by it that are intended for Grande Holdings, including mail, faxes and other communications whether received from stockholders of Grande Holdings, their Affiliates or their respective officers, directors, stockholders, managers, members, employees, agents or representatives or otherwise.

Section 1.5              Name Change :  Grande Holdings will change its name to Rio Holdings, Inc., within ten (10) business days after the consummation of the transactions contemplated by the Recapitalization Agreement; provided, Grande Holdings may thereafter refer to itself as “formerly known as Grande Communications Holdings, Inc.” as necessary to conduct its business.

Section 2.1             Assumed Liabilit