RETENTION BONUS AGREEMENT FOR W.K.L. "SCOTT" FERGUSON

This (“ Agreement ”) is entered into by and between you, W.K.L. “Scott” Ferguson, Jr., and Grande Communications Networks LLC, a Delaware limited liability company and successor-in-interest to Grande Communications Networks, Inc. (the “ Company ”), and is effective as of September 14, 2009 (the “ Effective Date ”).  In the event the Grande Communications Transaction (as defined herein) is not consummated, this Agreement shall be null and void.

In consideration of the mutual promises and considerations set forth herein, the parties agree as follows:

1.           CHANGE IN POSITION .     In connection with the Grande Communications Transaction, the Company will change your title and position with the Company.  The Company acknowledges and agrees that such change in title and position involves a material diminution in your duties and responsibilities with the Company and will constitute a “Good Reason Termination” under the Employment Agreement entered into between you and Grande Communications Networks, Inc., dated as of June 28, 2006, as amended as of February 5, 2008 (the “Employment Agreement”). By entering into this Agreement, the Company acknowledges and agrees that you have provided the Company with written notice of the occurrence of this condition that may constitute a Good Reason Termination within ninety days of its initial occurrence, as required under Section 9(b)(3) of the Employment Agreement.  The Company does not intend to cure this condition that constitutes Good Reason Termination and hereby waives its right to cure such condition as is otherwise provided under Section 9(b)(3) of the Employment Agreement.  In the event that you provide sixty days notice of your intent to terminate employment within one year of the Effective Date as required under Section 9(b)(3) of the Employment Agreement, the Company agrees to fulfill its obligations under the Employment Agreement under Section 9(b)(5) for Severance Pay (as defined under the Employment Agreement), provided all other conditions thereunder to receipt of Severance Pay have been satisfied.  You agree that, at any time after the date hereof, the Company may terminate your employment and, upon such termination, shall be responsible for all obligations associated with such termination as set forth under the Employment Agreement.

2.           RETENTION BONUS .  If (i) you remain in continuous employment with the Company through the date that is one hundred eighty (180) days following the Effective Date (the “ Bonus Date ”) or (ii) your employment is terminated without Cause (as defined below) by the Company after the Effective Date but on or before the Bonus Date (each, a “ Bonus Triggering Event ”), the Company will pay you a retention bonus equal to $225,000 (less payroll taxes and other applicable withholdings and deductions) (the “ Retention Bonus ”), subject to your execution of a release on a form prepared by the Company (the “ Release ”). Upon the occurrence of a Bonus Triggering Event, the Retention Bonus will be paid in a single payment within ten (10) business days following the eighth (8th) day after you sign and deliver the Release; provided that if you revoke the Release within such eight (8) day period or do not execute and deliver the Release to the Company within thirty (30) business days after the Bonus Triggering Event, you will not be entitled to any Retention Bonus under this Agreement.  You are not eligible for the Retention Bonus if you terminate your employment with the Company prior to the Bonus Date, including if you terminate it as described in Section 1 above.

3.           GRANDE COMMUNICATIONS TRANSACTION DEFINED .  For purposes of this Agreement, the “Grande Communications Transaction” means the consummation of the transactions contemplated by the Recapitalization Agreement dated as of August 27, 2009, by and among ABRY Partners VI, L.P., Grande Communications Networks, Inc., Grande Communications Holdings, Inc., ABRY Partners, LLC, Grande Investment L.P., and Grande Parent LLC.

4.           TERMINATION BY DEATH OR PERMANENT DISABILITY .  In the event of your death or Disability, your employment will terminate, and neither you nor your estate will receive the Retention Bonus described above in Section 2.  “Disability” means if you become mentally or physically incapacitated to the extent that you are unable to perform the usual and normal duties of your occupation or involvement in the Company for a period of three (3) months, as determined by the Company following consultation with and the advice of your attending or family physician or other qualified physician.

5.           TERMINATION FOR CAUSE .  If your employment is terminated by the Company for Cause before or after the Bonus Date, the Company shall not have any other or further obligations to you under this Agreement and you shall not receive the Retention Bonus. For purposes of this Agreement, “Cause” shall mean: (i) your commission of a felony or a crime involving moral turpitude or the commission of any other act involving dishonesty, disloyalty or fraud; (ii) conduct by you tending to bring the Company into substantial public disgrace or disrepute; (iii) your failure to perform (in any material respect) your obligations under this Agreement, your obligations under the Employee Confidentiality Information and Invention Assignment Agreement between you and the Company dated as of May 23, 2000 (the “ Confidentiality Agreement ”), or the reasonable directives of the Chief Executive Officer or the Board, provided, that the Chief Executive Officer or the Board shall give you notice of such failure and you shall have thirty (30) days to cure such failure, which if such failure is not cured during said thirty (30) day period, the Company shall have the immediate right to terminate your employment; (iv) your gross negligence or willful misconduct in providing the services required under the Employment Agreement; or (v) any substance abuse of the Executive in any manner interferes with the performance of his duties.

6.           CONFIDENTIA