GRANDE COMMUNICATIONS HOLDINGS, INC. SIXTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

This Sixth Amended and Restated Investor Rights Agreement (the “ Agreement ”) by and among (i) Grande Communications Holdings, Inc. , a Delaware corporation (the “ Company ”), (ii) each existing holder of Equity Securities of the Company set forth on Schedule 1 attached hereto (together with any other person or entity that becomes a party to this Agreement pursuant to Section 8.16 hereof, the “ Investors ”), and certain founding owners set forth on Schedule 2 attached hereto (the “ Founders ”   and, together with the Investors, the “ Stockholders ”), shall become effective upon the closing of the Transactions, as defined below.

A.             The Company and certain of the Stockholders are parties to that certain Fifth Amended and Restated Investor Rights Agreement, dated as of December 12, 2005 (the “ Original Agreement ”).

B.             The Company has entered into that certain recapitalization agreement, dated as of August   27, 2009 (the “ Recapitalization Agreement ”), by and among ABRY Partners VI, L.P., a Delaware limited partnership (“ ABRY ”), Grande Investment L.P., a Delaware limited partnership and wholly-owned subsidiary of ABRY (“ Ultimate Parent ”), Grande Parent LLC, a Delaware limited liability company and wholly-owned subsidiary of Ultimate Parent (“ Parent ”), the Company, Grande Communications Networks, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“ Grande Operating ”), and ABRY Partners, LLC, a Delaware limited liability company.

C.             Pursuant to the Recapitalization Agreement, among other things, (1) at least two days prior to the closing, Grande Operating will convert to a Delaware limited liability company that is disregarded for federal income tax purposes; (2)  at least one day prior to closing of the Transactions, Grande Operating will distribute to the Company a certain amount of cash for the Company’s future working capital needs; (3) the Company will contribute certain operating assets to Grande Operating and Grande Operating will assume certain liabilities arising out of the operation of the operating assets; (4) ABRY and Grande Manager LLC, a newly formed wholly-owned subsidiary of ABRY (“ Grande Manager ”) will contribute cash to Ultimate Parent (which will be contributed through Parent to Grande Operating); (5) the Company will contribute to Ultimate Parent all of the outstanding membership interests of Grande Operating (which will be contributed to Parent); and (6) ABRY will cause Grande Operating to enter into a new credit agreement and cause the repurchase and redemption of all of the Company’s outstanding 14% Senior Secured Notes due 2011 (together with all other transactions contemplated by the Recapitalization Agreement and any documents ancillary thereto, the “ Transactions ”).

D.             Upon the closing of the Transactions, based upon certain assumptions and subject to certain adjustments, including the amount of the Company’s indebtedness, transaction expenses, cash and cash equivalents and working capital and prior to dilution by certain incentive interests, it is expected that (1) an approximately 1.0% common equity interest of Ultimate Parent will be owned by Grande Manager, that an approximately 74.3% common equity interest of Ultimate Parent will be owned by ABRY and that an approximately 24.7% common ownership interest of Ultimate Parent will be owned indirectly by the Company through a wholly-owned subsidiary of the Company to be formed prior to closing (“ Rio GP ”); (2) the interests of Grande Manager and Rio GP will be general partner interests, with Grande Manager having 75.3% of the combined voting power of the general partners of Ultimate Parent and Rio GP having 24.7% of the combined voting power of the general partners of Ultimate Parent; (3) ABRY will also hold a preferred equity interest in Ultimate Parent; and (4) ABRY will control Grande Manager, Ultimate Parent, Parent and Grande Operating.

E.             After closing of the Transactions, (1) all of the outstanding Equity Securities of the Company will remain outstanding; and (2) the Company will not have any operations or material assets other than the ownership through Rio GP of its general partner interest of Ultimate Parent.

F.             The amendment and restatement of the Original Agreement as provided herein is a condition to the obligations of each party to the Recapitalization Agreement to effect the Transactions.

G.             Effective upon the Closing (as defined in the Recapitalization Agreement) of the Transactions, the Company, and those requisite Stockholders having approved this Agreement by written consent in accordance with Section 8.5 of the Original Agreement (the “ Written Consent ”) , desire to amend and restate the Original Agreement as set forth herein, and for the Company to take all actions necessary to execute and deliver this Agreement.

NOW, THEREFORE , in consideration of the foregoing recitals and the mutual promises hereinafter set forth, the parties hereto agree as follows:

1.1.   Definitions.  As used in this Agreement, the following capitalized terms shall have the following respective meanings:

“ Affiliate ” means, with respect to a person or entity, any person or entity that controls, is controlled by or is under common control with, such person or entity.

“ Board ” means the Board of Directors of the Company.

“ Centennial ” shall have the meaning set forth in Section 4.1(b)(ii)(A) .

“ Common Stock ” means the Company’s Common Stock, $0.001 par value per share.

“ Company ” means Grande Communications Holdings, Inc. , a Delaware corporation, or any successor corporation thereto, whether by merger, conversion or otherwise.

“ Election Period ” shall have the meaning set forth in Section 5.1(b) .

“ Equity Securities ” means (i) any shares of Common Stock, Preferred Stock or other security of the Company, (ii) any security or instrument convertible into or exercisable or exchangeable for, with or without consideration, any shares of Common Stock, Preferred Stock or other security of the Company (including the any option, warrant or right to subscribe for or purchase such a security or instrument), or (iii) any security or instrument carrying any option, warrant or right to subscribe for or purchase any shares of Common Stock, Preferred Stock or other security of the Company.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the SEC thereunder.

“ February Series A Purchase Agreement ” means the Series A Preferred Stock Purchase Agreement dated as of February 24, 2000, by and among the Company and the other parties thereto.

“ Founders ” means those certain founding owners of the Company’s Common Stock set forth on Schedule 2 hereto.

“ Investors ” means those certain Stockholders set forth on Schedule 1 hereto.

“ New Securities ” shall have the meaning set forth in Section 6.1 .

“ Non-Selling Stockholder ” shall have the meaning set forth in Section 5.4(b) .

“ Observer ” shall have the meaning set forth in Section 4.2(b) .

“ Offer Notice ” shall have the meaning set forth in Section   5.4(a) .

“ Offered Shares ” shall have the meaning set forth in Section 5.4(a) .

“ Permitted Transferee ”   means (i) an Affiliate of a Stockholder, (ii) a Stockholder’s family members or a trust for the benefit of an individual Stockholder or his family members, (iii) a Stockholder’s affiliated or related venture capital funds (if the Stockholder is a venture capital fund investor), (iv) a Stockholder’s partners or retired partners in accordance with partnership interests (if the Stockholder is a partnership), (v) a Stockholder’s members or former members in accordance with their interest in the limited liability company (if the Stockholder is a limited liability company), (vi) a Stockholder’s shareholders in accordance with their interest in the corporation (if the Stockholder is a corporation), (vii) any distribution in connection with the dissolution, winding-up or liquidation of a Stockholder, (viii) a transferee of a Stockholder by will or the laws of intestate succession, and (ix) the Company, for acquisitions from Stockholders of Common Stock by the Company pursuant to agreements permitting the Company to repurchase such shares of Common Stock upon termination of services to the Company at such Stockholders’ cost.

“ Preferred Shares ” means (i) shares of Series A Preferred Stock, shares of Series B Preferred Stock, shares of Series C Preferred Stock, shares of Series D Preferred Stock, shares of Series E Preferred Stock, shares of Series F Preferred Stock, shares of Series G Preferred Stock, and shares of Series H Preferred Stock, and (ii) any other shares of Preferred Stock into which such shares are converted pursuant to Section IV(3)(e) of the Restated Certificate.

“ Preferred Stock ” means the Company’s Preferred Stock, $0.001 par value per share, and any series thereof.

“ Prior Existing Stockholders Agreement ” means that certain Stockholders Agreement, dated as of February 11, 2000, entered into by and among the Company, KNOLOGY, Inc., and ClearSource, Inc.

“ Prior Management Agreement ” means that certain Amended and Restated Stockholders Agreement, dated as of February 11, 2000, by and among the Company and members of the Company’s management, as amended February 22, 2000.

“ Purchase Agreements ”   means: the February Series A Purchase Agreement and the Series A Preferred Stock Purchase Agreement dated as of June 22, 2000, by and between the Company and the other parties thereto; the Series B Preferred Stock Purchase Agreement dated as of September 19, 2000, by and between the Company and the other parties thereto; the Series C Preferred Stock Purchase Agreement dated as of October 29, 2001, by and between the Company and the other parties thereto; the Series F Preferred Stock Purchase Agreement dated as of November 18, 2002, by and between the Company and the other parties thereto; the Series G Preferred Stock Purchase Agreement dated as of October 27, 2003, by and between the Company and the other parties thereto; and that certain Agreement and Plan of Merger dated April 25, 2002, by and between the Company and the other parties thereto.

 “ Qualified Investor ” means an Investor (including any group of affiliated or related funds, in the case of an Investor that is a venture capital fund investor) holding at least fifteen million (15,000,000) Preferred Shares (as adjusted for stock splits, stock dividends, recapitalizations and similar events).

“ Qualified Public Offering ” means a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act covering the offer and sale of Common Stock for the account of the Company in which the per-share sales price of such Common Stock to the public is at least $1.30 (as adjusted for any stock dividends, combinations, splits, recapitalizations and similar events) and the gross proceeds to the Company (prior to deduction of underwriting discounts, commissions and fees) are at least $150,000,000.

“ Restated Certificate ” means the Company’s Restated Certificate of Incorporation, as filed with the Delaware Secretary of State on December 28, 2005 and amended or restated from time to time.

“ Rule 144 ” means Rule 144 promulgated under the Exchange Act, as amended.

“ Sale Notice ” shall have the meaning set forth in Section 5.3 .

“ SEC ” or “ Commission ”   means the Securities and Exchange Commission.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder.

“ Series A Directors ” shall have the meaning set forth in Section 4.1(b)(ii) ;

“ Series A Preferred Stock ” means Series A Preferred Stock, $0.001 par value per share, of the Company.

“ Series B Preferred Stock ” means Series B Preferred Stock, $0.001 par value per share, of the Company.

“ Series C Preferred Stock ” means Series C Preferred Stock, $0.001 par value per share, of the Company.

“Series D Preferred Stock ” means Series D Preferred Stock, $0.001 par value per share, of the Company.

“Series E Preferred Stock ” means Series E Preferred Stock, $0.001 par value per share, of the Company.

“ Series F Preferred Stock” means Series F Preferred Stock, $0.001 par value per share, of the Company.

“ Series G Preferred Stock ” means Series G Preferred Stock, $0.001 par value per share, of the Company.

“ Series H Preferred Stock ” means Series H Preferred Stock, $0.001 par value per share, of the Company.

“ Series H Stockholder ” means any holder of Series H Preferred Stock.

“ Shares ” means any shares of (i) Common Stock of the Company held by the Investors, (ii)  Common Stock of the Company issued or issuable upon the conversion, exercise or exchange of any Equity Securities held by the Investors, and (iii)  Common Stock of the Company issued as (or issuable upon the conversion, exercise or exchange of any warrant, right or other security which is issued as) or by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation, or other reorganization or other distribution with respect to, or in exchange for or in replacement of, any Equity Securities held by the Investors.  Notwithstanding the foregoing, securities shall cease to be Shares when such securities are sold to the public either pursuant to a registration statement or Rule 144.

“ Stockholders ” means the Investors and Founders.

“ Stockholder Sale Notice ” shall have the meaning set forth in Section 5.4(b) .

“ Third-Party Offer ” shall have the meaning set forth in Section 5.3 .

“ Transfer ” shall have the meaning set forth in Section 5.1(a) .

“ Transferring Stockholder ” shall have the meaning set forth in Section 5.4(b) .

“ Whitney & Co. ” shall have the meaning set forth in Section 4.1(b)(ii)(B) .

1.2.          Method for Calculations.   Except as otherwise provided in this Agreement, for purposes of calculating (i) the number of shares of Equity Securities outstanding as of any date, (ii) the number of shares of Equity Securities held by a party, and (iii) all related percentages and ratios, all such securities shall be treated as having been converted into, or exercised or exchanged for, Common Stock ( i.e., all such calculations shall be made on a fully diluted, converted, exercised and exchanged basis).  Whenever reference is made in this Agreement to a specific number of shares of Equity Securities, such number shall be proportionally adjusted in the event of any stock dividends, combinations, splits, recapitalizations and similar events.

3.1.         Confidentiality of Records. Each Investor agrees to use, and to use its best efforts to insure that its authorized representatives use, the same degree of care as such Investor uses to protect its own confidential information to keep confidential any information furnished to it which the Company identifies as being confidential or proprietary (so long as such information is not in the public domain), except that such Investor may disclose such proprietary or confidential information to any partner, subsidiary, parent or affiliate of such Investor for the purpose of evaluating its investment in the Company as long as such partner, subsidiary, parent or affiliate is advised of the confidentiality provisions of this Section 3.1 . Notwithstanding the provisions of this Section 3.1 , any party who participates in a transaction contemplated hereunder may disclose to any and all other parties, without limitation of any kind, the tax treatment and tax structure of the Company’s transactions and all materials (including tax opinions) relating to such tax treatment and tax structure. This exception is intended solely to comply with the presumption set forth in Treasury Regulation Section 1.6011-4(b)(3)(iii) and is not intended to permit the disclosure of any information to the extent such disclosure is not required in order to avoid any Company transaction being treated as a “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4(b).

3.2.         Reservation of Common Stock. The Company will at all times reserve and keep available, solely for issuance and delivery upon the conversion of the Preferred Stock and the exercise of Warrants, all Common Stock issuable from time to time upon such conversion or exercise (including any additional shares issuable as a result of adjustments to the conversion price of the Preferred Stock or the number of shares issuable upon exercise of Warrants).

3.3.           Amendment to Certificate of Incorporation. At any time at which any shares of any series of Preferred Stock are subject to automatic conversion pursuant to Article IV, Section 3(e) of the Restated Certificate, each Investor and Founder and their respective transferees will promptly take such action as is necessary or desirable, whether in their capacity as officers, directors, or stockholders of the Company (including, but not limited to, voting or causing to be voted, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings) and the Company shall promptly take all necessary and desirable actions within its control (including, without limitation, calling special board and stockholder meetings) to designate a new series of Preferred Stock of the Company, whether by amending the Restated Certificate or otherwise, with rights, preferences, privileges and restrictions identical to those of the affected series of Preferred Stock, except with respect to anti-dilution rights, as contemplated by such Article IV, Section 3(e).

3.4.      Termination of Covenants. All covenants of the Company contained in Section 3 of this Agreement shall expire and terminate as to each Investor on the effective date of the registration statement pertaining to the Company’s first Qualified Public Offering.

4.1.     Board of Directors.

Each Stockholder agrees to vote all securities of the Company over which such Stockholder has voting control and to take all other necessary or desirable actions within its control (whether as a stockholder, director or officer of the Company or otherwise, and including without limitation attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings), and the Company shall take all necessary and desirable actions within its control (including, without limitation, calling special Board and stockholder meetings), so that:

(a)       the Company shall have a Board of Directors comprised of no more than ten (10) members;

(b)            the following persons shall be elected to the Board of Directors:

(i)      One representative designated by the holders of the outstanding Common Stock, who shall be designated by Robert Hughes;

(ii)     Five representatives designated by the holders of the outstanding Series A Preferred Stock (the “ Series A Directors ”) (A) two of whom shall be designated by Centennial Fund VI, L.P, on behalf of itself, Centennial Entrepreneurs Fund VI, L.P., Centennial Strategic Partners VI, L.P., Centennial Holdings I, LLC and any of their affiliated or related funds that are a party to this Agreement or may become a party to this Agreement after the date hereof (together, “ Centennial ”), (B) two of whom shall be designated by J. H. Whitney IV, L.P. and any of its affiliates that are a party to this Agreement or may become a party to this Agreement after the date hereof (“ Whitney & Co. ”), and (C) one of whom shall be designated by the holders of a majority of the shares of Series A Preferred Stock then outstanding; provided that, if Centennial sells more than sixty percent (60%) of the Preferred Shares that it has purchased pursuant to the February Series A Purchase Agreement, Centennial shall relinquish the right to designate one Series A Director as provided above, and the holders of a majority of the shares of Series A Preferred Stock then outstanding shall have the right to designate such Series A Director; and provided further that, if Whitney & Co. sells more than sixty percent (60%) of the Preferred Shares that it has purchased pursuant to the February Series A Purchase Agreement, Whitney & Co. shall relinquish the right to designate one Series A Director as provided above, and the holders of a majority of the shares of Series A Preferred Stock then outstanding shall have the right to designate such Series A Director;

(iii)    One independent director selected by the nominating committee of the Board of Directors and approved by the Board and the holders of a majority of the outstanding Equity Securities held by the Investors, such approval not to be unreasonably withheld;

(iv)      The person serving as president or Chief Executive Officer of the Company from time to time;

(v)       One representative designated by the holders of the outstanding Series D Preferred Stock and the outstanding Series E Preferred Stock by a majority vote, voting as a single class on an as-converted basis; and

(vi)       To the extent the persons or entities entitled to designate one or more directors pursuant to the provisions of this Section 4.1 cease to be entitled to do so, such directorship shall be filled in accordance with the Company’s Restated Certificate and bylaws and applicable law;

(c)       in the event that any director for any reason ceases to serve as a member of the Board during his term of office, the resulting vacancy on the Board shall be filled by a nominee designated in accordance with Section 4.1(b) ;

(d)       any director designated above may be removed only with the written consent of the stockholder(s) who or which are entitled to designated such director;

(e)             if the Stockholders fail to designate a representative to fill a directorship pursuant to the terms of this Section 4.1 , the election of such director shall be accomplished at any time a nominee is designated in accordance with Section 4.1(b) to fill such vacancy and, in such event, such vacancy shall be filled prior to the transaction of any other business by the stockholders of or Board of Directors; and

(f)              to the extent that any provision of the Restated Certificate or bylaws is inconsistent with the provisions of this Agreement, the Restated Certificate or bylaws shall be amended as may be necessary and appropriate to give full effect to the provisions of this Agreement.

4.2.        Meetings of the Board.

(a)            The Board of Directors will meet at least six times each year in accordance with an agreed-upon schedule.  The meetings of the Board of Directors may be held in person or by telephone conference.

(b)            To the extent tha