EXHIBIT 10.3

 

EXCHANGE AGREEMENT

 

THIS EXCHANGE AGREEMENT (“Agreement”), dated as of April 5, 2002, by and among
Madison River Telephone Company, LLC (“MRTC”), Coastal Communications, Inc.
(“CCI”), Daniel M. Bryant (“D. Bryant”), G. Allan Bryant (“G Bryant”) and The
Michael E. Bryant Life Trust (the “Trust,” and together with D. Bryant and G.
Bryant, the “Bryant Shareholders”).

 

WHEREAS, the Bryant Shareholders are presently the beneficial owners of all of
the Series A Stock and Series B Stock of CCI;

 

WHEREAS, the parties hereto desire to effect the transactions contemplated
hereby upon the terms set forth herein;

 

NOW THEREFORE, in consideration of the premises, the mutual promises of the
parties hereto and the mutual benefits to be gained by the performance thereof,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, MRTC, for its successors and permitted assigns, and the
Bryant Shareholders, for themselves, their heirs, personal representatives and
permitted assigns, hereby agree as follows:

 

Section 1. MRTC’s Representations and Warranties. MRTC represents and warrants
to each of the Bryant Shareholders as follows:

 

(a) Authority. MRTC has the power and authority to execute, deliver and carry
out the terms and provisions of this Agreement and to consummate the
transactions contemplated hereby, and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement.

 

(b) Enforceability. This Agreement has been duly executed and delivered by MRTC,
and, assuming due and legal, valid authorization, execution and delivery hereof
by each of the Bryant Shareholders, constitutes a legal, valid and binding
obligation of MRTC, enforceable against MRTC in accordance with its terms.

 

(c) Madison River LTD Funding Corp. Consent. Pursuant to Section 3.01 of that
certain Shareholders Agreement (the “Shareholders Agreement”), dated as of March
30, 2000, by and among the Bryant Shareholders, CCI and Madison River LTD
Funding Corp. (“MR Funding”), MR Funding has consented to the transfers of
Series A Stock and Series B Stock of CCI by the Bryant Shareholders as
contemplated by this Agreement. MR Funding has also waived the rights, if any,
granted to MR Funding pursuant to Section 4.01 of the Shareholders Agreement as
such rights would apply to the transactions contemplated by this Agreement, but
for the application of such waiver.

 

Section 2. D. Bryant’s Representations and Warranties. D. Bryant represents and
warrants to MRTC as follows:

 

(a) Authority. Assuming the accuracy of the representations and warranties set
forth in Section 1(c) herein, D. Bryant has the legal capacity and the power and
authority to execute, deliver and carry out the terms and provisions of this
Agreement and to consummate the transactions contemplated hereby.

 

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(b) Enforceability. This Agreement has been duly executed and delivered by D.
Bryant, and, assuming due and valid authorization, execution and delivery hereof
by MRTC, constitutes a legal, valid and binding agreement of D. Bryant,
enforceable against D. Bryant in accordance with its terms.

 

(c) Representation of Ownership. D. Bryant beneficially owns 100 shares of
Series A Stock and 100 shares of Series B Stock of CCI free and clear of any
liens and encumbrances, other than encumbrances imposed by the Shareholders
Agreement. Immediately after giving effect to the Closing (as defined below),
MRTC will acquire 100 shares of Series B Stock and 40 shares of Series A Stock
of CCI from D. Bryant free and clear of all encumbrances and D. Bryant will not
own any interest or have any rights in CCI except for 50 shares of Series A
Stock.

 

Section 3. G. Bryant’s Representations and Warranties. G. Bryant represents and
warrants to MRTC as follows:

 

(a) Authority. Assuming the accuracy of the representations and warranties set
forth in Section 1(c) herein, G. Bryant has the legal capacity and the power and
authority to execute, deliver and carry out the terms and provisions of this
Agreement and to consummate the transactions contemplated hereby.

 

(b) Enforceability. This Agreement has been duly executed and delivered by G.
Bryant, and, assuming due and valid authorization, execution and delivery hereof
by MRTC, constitutes a legal, valid and binding agreement of G. Bryant,
enforceable against G. Bryant in accordance with its terms.

 

(c) Representation of Ownership. G. Bryant beneficially owns 100 shares of
Series A Stock and 100 shares of Series B Stock of CCI free and clear of any
liens and encumbrances, other than encumbrances imposed by the Shareholders
Agreement. Immediately after giving effect to the Closing, MRTC will acquire 100
shares of Series B Stock and 40 shares of Series A Stock of CCI from G. Bryant
free and clear of all encumbrances and G. Bryant will not own any interest or
have any rights in CCI except for 50 shares of Series A Stock.

 

Section 4. The Trust’s Representations and Warranties. The Trust represents and
warrants to MRTC as follows:

 

(a) Authority. Assuming the accuracy of the representations and warranties set
forth in Section 1(c) herein, the Trust has the power and authority to execute,
deliver and carry out the terms and provisions of this Agreement and to
consummate the transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement.

 

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(b) Enforceability. This Agreement has been duly executed and delivered by the
Trust, and, assuming due and valid authorization, execution and delivery hereof
by MRTC, constitutes a legal, valid and binding agreement of the Trust,
enforceable against the Trust in accordance with its terms.

 

(c) Representation of Ownership. The Trust beneficially owns 100 shares of
Series A Stock and 100 shares of Series B Stock of CCI free and clear of any
liens and encumbrances, other than encumbrances imposed by the Shareholders
Agreement. Immediately after giving effect to the Closing, MRTC will acquire 100
shares of Series B Stock and 40 shares of Series A Stock of CCI from the Trust
free and clear of all encumbrances and the Trust will not own any interest or
have any rights in CCI except for 50 shares of Series A Stock.

 

Section 5. Exchange. At the Closing, subject to the terms and conditions set
forth herein:

 

(a) D. Bryant shall exchange all of his shares of Series B Stock and 40 shares
of Series A Stock of CCI for

 

(i) Term Note No. 1 issued by MRTC (“Term Note No. 1”) in the principal amount
of $6,666,666.67 (a form of which is attached as Exhibit A hereto) and

 

(ii) 6 million newly issued Class A Member Units in MRTC issued at $1 per unit;

 

(b) G. Bryant shall exchange all of his shares of Series B Stock and 40 shares
of Series A Stock of CCI for

 

(i) Term Note No. 2 issued by MRTC (“Term Note No. 2”) in the principal amount
of $6,666,666.67 (a form of which is attached as Exhibit B hereto) and

 

(ii) 6 million newly issued Class A Member Units in MRTC issued at $1 per unit;

 

(c) The Trust shall exchange all of its shares of Series B Stock and 40 shares
of Series A Stock of CCI for

 

(i) Term Note No. 3 issued by MRTC (“Term Note No. 3”) in the principal amount
of $6,666,666.67 (a form of which is attached as Exhibit C hereto) and

 

(ii) 6 million newly issued Class A Member Units in MRTC issued at $1 per unit;

 

(d) MRTC and the Bryant Shareholders shall effect the issuance of the Class A
Member Units as provided in subsections (a), (b) and (c) above by

 

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executing a Joinder to the Amended and Restated Limited Liability Company
Agreement of MRTC, as amended (the “MRTC Operating Agreement”) and the related
transaction agreements, substantially in the form of Exhibit D hereto (the “MRTC
Operating Agreement Joinder”).

 

Section 6. Redemption. At the Closing, subject to the terms and conditions set
forth herein, CCI shall redeem 10 shares of Series A Stock from each of the
Bryant Shareholders at a redemption price of $33,333.33 per share of Series A
Stock.

 

Section 7. Shareholder Agreement Amendment. At the Closing, subject to the terms
and conditions set forth herein, MRTC, CCI and the Bryant Shareholders hereby
agree to amend the Shareholders Agreement as provided in the form attached as
Exhibit E hereto (the “Shareholders Agreement Amendment”).

 

Section 8. Closing. The closing of the transactions contemplated by this
Agreement (the “Closing”) shall take place at the offices of Kilpatrick Stockton
in Atlanta, Georgia on April 10, 2002, or at such time and place as MRTC and the
Bryant Shareholders shall agree prior to the Closing (the date of the Closing
being referred to as the “Closing Date”).

 

Section 9. Conditions to Closing.

 

(a) MRTC’s and CCI’s obligation to consummate the transactions contemplated
hereby at the Closing is subject to satisfaction of the following conditions:

 

(i) the representations and warranties of the Bryant Shareholders shall be and
remain at and as of the Closing Date true and correct and MRTC shall have
received a certificate of each of the Bryant Shareholders to the foregoing
effect;

 

(ii) receipt by MRTC of certificates representing all of the Series B Stock and
120 shares of Series A Stock of CCI from the Bryant Shareholders;

 

(iii) receipt by CCI of certificates representing 30 shares of Series A Stock of
CCI from the Bryant Shareholders;

 

(iv) receipt by MRTC of the MRTC Operating Agreement Joinder duly executed by
each of the Bryant Shareholders;

 

(v) receipt by MRTC of the Shareholders Agreement Amendment duly executed by
each of the Bryant Shareholders; and

 

(vi) receipt by MRTC of a receipt in form and substance reasonably satisfactory
to MRTC of acceptance by each of the Bryant Shareholders of the items set forth
in Sections 9(b)(ii), (iv) and (vi).

 

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(b) The Bryant Shareholders’ obligation to consummate the transactions
contemplated hereby at the Closing is subject to satisfaction of the following
conditions:

 

(i) the representations and warranties of MRTC shall be and remain at and as of
the Closing Date true and correct and the Bryant Shareholders shall have
received a certificate of the Chief Executive Officer or a Vice President of
MRTC to the foregoing effect;

 

(ii) receipt by the Bryant Shareholders of Term Note No. 1, Term Note No. 2 and
Term Note No. 3 duly issued by MRTC;

 

(iii) receipt by the Bryant Shareholders of the MRTC Operating Agreement Joinder
duly executed by MRTC;

 

(iv) receipt by each of the Bryant Shareholders of certificates or other
documents reasonably satisfactory to the Bryant Shareholders evidencing 6
million newly issued Class A Member Units in MRTC issued at $1 per unit;

 

(v) receipt by each of the Bryant Shareholders of $333,333.33;

 

(vi) receipt by the Bryant Shareholders of the Shareholders Agreement Amendment
duly executed by MRTC, CCI and MR Funding; and

 

(vii) receipt by the Bryant Shareholders of an opinion, dated as of the Closing
Date, from counsel to MRTC addressing the matters set forth in Exhibit F.

 

Section 10. Release of Claims.

 

(a) Upon the execution of this Agreement by all the parties hereto, the Bryant
Shareholders, on their behalf and on behalf of their respective affiliates,
associates, personal representatives, representatives, executors, heirs,
administrators, successors, assigns, spouses, partners, beneficiaries,
employees, attorneys, advisors, and agents (the “Bryant Shareholders Releasing
Parties”), for good and sufficient consideration, the receipt of which is
acknowledged, release absolutely and forever discharge MRTC, CCI, MR Funding and
each of their respective predecessors, successors, assigns, parents, members,
subsidiaries, divisions, and affiliated companies, and each of their respective
former, current and future officers, directors, owners, managers, employees,
partners, associates, representatives, shareholders, attorneys, advisors, and
agents, and each of them (the “MRTC Released Parties”), from any and all actual
or possible claims, charges, damages, demands, debts, liabilities, losses,
accounts, reckonings, obligations, suits, actions and causes of action of every
kind and nature whatsoever, including but not limited to those arising under
contract, statute or common law, whether or not known or suspected at this time,
(collectively, “Claims”) which the

 

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Bryant Shareholders Releasing Parties have, or ever had, owned or held, or
hereafter can, shall or may have against the MRTC Released Parties, based upon,
arising out of, related to, or by reason of any cause, occurrence, event, act,
fact, circumstance, thing, statement or omission occurring before the date of
this Agreement relating to, arising from or in connection with this Agreement,
the Shareholders Agreement and the transactions contemplated hereby and thereby.

 

(b) Upon the execution of this Agreement by all the parties hereto, MRTC, on its
behalf and on behalf of its respective affiliates, associates, members, personal
representatives, representatives, executors, heirs, administrators, successors,
assigns, spouses, partners, beneficiaries, employees, attorneys, advisors, and
agents (the “MRTC Releasing Parties”), for good and sufficient consideration,
the receipt of which is acknowledged, release absolutely and forever discharge
each of the Bryant Shareholders and each of their respective successors,
assigns, representatives, attorneys, advisors, and agents, and each of them (the
“Bryant Shareholders Released Parties”), from any and all Claims which the MRTC
Releasing Parties have, or ever had, owned or held, or hereafter can, shall or
may have against the Bryant Shareholders Released Parties, based upon, arising
out of, related to, or by reason of any cause, occurrence, event, act, fact,
circumstance, thing, statement or omission occurring before the date of this
Agreement relating to, arising from or in connection with this Agreement, the
Shareholders Agreement and the transactions contemplated hereby and thereby.

 

Section 11. Stock Purchase Agreement Amendment. Effective upon the closing of
the transactions contemplated by this Agreement, the parties hereto agree to
amend and restate the first sentence of Section 8(h) of the Stock Purchase
Agreement as follows:

 

The indemnification obligation of the Sellers shall not exceed Twenty-One
Million Dollars ($21,000,000) plus the Sellers’ member interests in Madison
River Telephone Company, LLC.

 

Section 12. Miscellaneous Provisions.

 

(a) Fees and Expenses. Each party hereto agrees to bear its own fees and
expenses relating to each of the matters referred to, contemplated by or the
subject of this Agreement.

 

(b) Amendment and Modification. This Agreement may be amended, modified and
supplemented only by written agreement of the Bryant Shareholders and MRTC.

 

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(c) Notices. All notices, requests, demands and other communications required or
permitted shall be made in writing by hand-delivery, telecopier (with written
confirmation) or air courier guaranteeing overnight delivery:

 

  (i) If to the Bryant Shareholders, to:

 

Daniel M. Bryant

255 Lincoln Trail

Richmond Hill, GA 31324

 

with a copy to:

 

Alex L. Zipperer, Esq.

Zipperer & Lorberbaum

200 E. St. Julian Street

P.O. Box 9147

Savannah, GA 31412

 

and

 

G. Allan Bryant

P.O. Box 899

Allenhurst, GA 31301

 

with a copy to:

 

Grayson P. Lane, Esq.

Lane & Crowe, PC

601 “I” Street

P.O. Box 1891

Brunswick, GA 31521-1891

 

and

 

The Michael E. Bryant Life Trust

c/o Mr. A. Kimbrough Davis

Kilpatrick Stockton LLP

1100 Peachtree Street

Suite 2800

Atlanta, GA 30309-4530

 

c/o Thomas J. Ratcliffe, Jr., Esq.

Ratcliffe, Smith & Grinstead, P.C.

103 North Main Street

P.O. Box 469

Hinesville, GA 31310-3215

 

c/o Larry R. Golden, CPA

Golden Associates

769 E. Oglethorpe Highway

P.O. Box 967

Hinesville, GA 30310-0967

 

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or to such other persons or addresses as the Bryant Shareholders shall
reasonably furnish to MRTC;

 

  (ii) If to MRTC, to:

 

Madison River Telephone Company, LLC

103 South Fifth Street

PO Box 430

Mebane, North Carolina 27302

Attention: Chief Financial Officer

Telecopier: (919) 563-4993

 

with a copy to:

 

Madison River Telephone Company, LLC

103 South Fifth Street

PO Box 430

Mebane, North Carolina 27302

Attention: General Counsel

Telecopier: (919) 563-4993

 

and

 

Skadden, Arps, Slate, Meagher & Flom (Illinois)

333 West Wacker Drive

Chicago, Illinois 60606

Attention: Gary P. Cullen

Telecopier: (312) 407-0411

 

or to such other persons or addresses as MRTC shall reasonably furnish to the
Bryant Shareholders in writing.

 

All such notices, requests, demands and other communications shall be deemed to
have been duly given; at the time delivered by hand, if personally delivered;
when receipt acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.

 

(d) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision shall fail to be in effect only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement or of any such provision.

 

(e) Assignment. This Agreement and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but except as otherwise provided for or
permitted

 

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herein neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any party hereto without the prior written
consent of the other party.

 

(f) Governing Law. This Agreement and the legal relations among the parties
hereto shall be governed by and construed in accordance with the laws of the
State of Delaware, without regard to its conflicts of law doctrine.

 

(g) Jurisdiction and Venue. WITHOUT LIMITING THE RIGHT OF EACH OF MRTC AND THE
BRYANT SHAREHOLDERS TO BRING ANY ACTION OR PROCEEDING AGAINST THE OTHER PARTY OR
AGAINST PROPERTY OF THE OTHER PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT
(AN “ACTION”) IN THE COURTS OF OTHER JURISDICTIONS, EACH OF MRTC AND THE BRYANT
SHAREHOLDERS HEREBY IRREVOCABLY SUBMIT TO AND ACCEPT THE NONEXCLUSIVE
JURISDICTION OF ANY FEDERAL COURT SITTING IN THE STATE OF GEORGIA, AND EACH OF
MRTC AND THE BRYANT SHAREHOLDERS HEREBY IRREVOCABLY AGREE THAT ANY ACTION MAY BE
HEARD AND DETERMINED IN SUCH FEDERAL COURT. EACH OF MRTC AND THE BRYANT
SHAREHOLDERS HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THAT IT MAY
EFFECTIVELY DO SO, ANY DEFENSE OR OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY
DEFENSE OR OBJECTION TO VENUE BASED ON THE GROUNDS OF FORUM NONCONVENIENS) WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE MAINTENANCE OF ANY ACTION IN ANY SUCH
JURISDICTION. EACH OF MRTC AND THE BRYANT SHAREHOLDERS HEREBY IRREVOCABLY AGREE
THAT THE SUMMONS AND COMPLAINT OR ANY OTHER PROCESS IN ANY ACTION IN ANY
JURISDICTION MAY BE SERVED BY MAILING (USING CERTIFIED OR REGISTERED MAIL,
POSTAGE PREPAID) TO THE NOTICE ADDRESS FOR SUCH PARTY SPECIFIED ABOVE OR BY HAND
DELIVERY TO A PERSON OF SUITABLE AGE AND DISCRETION AT SUCH ADDRESS. SUCH
SERVICE WILL BE COMPLETE ON THE DATE SUCH PROCESS IS SO MAILED OR DELIVERED, AND
SUCH PARTY WILL HAVE THIRTY DAYS FROM SUCH COMPLETION OF SERVICE IN WHICH TO
RESPOND IN THE MANNER PERMITTED BY LAW. EACH OF MRTC AND THE BRYANT SHAREHOLDERS
MAY ALSO BE SERVED IN ANY OTHER MANNER PERMITTED BY LAW, IN WHICH EVENT SUCH
PARTY’S TIME TO RESPOND SHALL BE THE TIME PROVIDED BY LAW.

 

(h) Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

(i) Headings. The headings of the Sections of this Agreement are inserted for
convenience only and shall not constitute a part hereof or affect in any way the
meaning or interpretation of this Agreement.

 

(j) Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto in respect of the subject matter

 

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contained herein, and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, relating to the subject matter hereof.

 

(k) Specific Performance. Each of the parties hereto recognizes and acknowledges
that a breach by a party of any covenants or agreements contained in this
Agreement will cause the other party to sustain injury for which it would not
have an adequate remedy at law for money damages. Therefore each of the parties
hereto agrees that in the event of any such breach, the aggrieved party shall be
entitled to the remedy of specific performance of such covenants and agreements
and preliminary and permanent injunctive and other equitable relief in addition
to any other remedy to which it may be entitled, at law or in equity, and the
parties hereto further agree to waive any requirement for the securing or
posting of any bond in connection with the obtaining of any such injunctive or
other equitable relief.

 

(l) Third Parties. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person or corporation, other than the
parties hereto and their successors or assigns, any rights or remedies under or
by reason of this Agreement; provided, however, it is specifically agreed that
each of the MRTC Released Parties are deemed to be direct third party
beneficiaries of Section 10 of this Agreement and each of them shall be entitled
to the benefits of, and be permitted to enforce, the provisions of Section 10 as
if they were a party to this Agreement.

 

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IN WITNESS WHEREOF, MRTC, CCI and the Bryant Shareholders have executed this
Agreement effective as of the date and year first above written.

 

MADISON RIVER TELEPHONE COMPANY, LLC By:  

/s/ J. STEPHEN VANDERWOUDE

Name:

 

J. Stephen Vanderwoude

Title:

 

Chief Executive Officer

COASTAL COMMUNICATIONS, INC. By:  

/s/ J. STEPHEN VANDERWOUDE

Name:

 

J. Stephen Vanderwoude

Title:

 

Chief Executive Officer

/s/ DANIEL M. BRYANT

  (SEAL)

Daniel M. Bryant

   

/s/ G. ALLAN BRYANT

  (SEAL)

G. Allan Bryant

    THE MICHAEL E. BRYANT LIFE TRUST By:  

/s/ DANIEL M. BRYANT

   

Co-Trustee for Michael E. Bryant

By:  

/s/ G. ALLAN BRYANT

   

Co-Trustee for Michael E. Bryant

By:  

/s/ THOMAS RATCLIFFE, JR.

   

Co-Trustee for Michael E. Bryant

 

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IN WITNESS WHEREOF, the undersigned is a signatory to this Agreement as of the
date and year first above written solely for purposes of the covenant set forth
in Section 11 of this Agreement.

 

COASTAL UTILITIES, INC. By:  

/s/ J. STEPHEN VANDERWOUDE

Name:

 

J. Stephen Vanderwoude

Title:

 

Chief Executive Officer

 

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Exhibit A

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR PURSUANT TO THE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS NOTE MAY NOT
BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE ACT
AND SUCH APPLICABLE STATE LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SAID ACT OR SUCH APPLICABLE STATE LAWS.

 

TERM NOTE NO. 1

 

$6,666,666.67

   April 10, 2002

INTEREST RATE

   MATURITY DATE

8.4257%

   December 31, 2010

 

FOR VALUE RECEIVED, the undersigned, Madison River Telephone Company, LLC, a
Delaware limited liability company (the “Issuer”), promises to pay to the order
of Daniel M. Bryant (the “Payee”) or the registered permitted assignee thereof,
the principal amount of SIX MILLION SIX HUNDRED SIXTY SIX THOUSAND SIX HUNDRED
SIXTY SIX AND 67/100 DOLLARS ($6,666,666.67) (or such lesser amount as shall
equal the aggregate unpaid principal amount outstanding under this Term Note) on
December 31, 2010 (the “Maturity Date”). The Issuer shall pay the principal
amount of this Term Note (this “Note”) in installments on the payment dates (the
“Payment Dates”) and in the amounts set forth in Annex A hereto (as the same may
be adjusted from time to time pursuant to Section 1(c) of this Term Note) in
accordance with the terms of this Note. The interest on the unpaid principal
amount of this Note outstanding from time to time, from April 1, 2002 until such
amount shall be paid in full, shall be payable annually at a rate per annum
equal to 8.4257% (calculated on the basis of the actual number of days elapsed
over a year of 365/366 days) on the Payment Dates set forth in Annex A hereto as
the same may be adjusted from time to time pursuant to Section 1(c) of this
Note. All payments of principal and interest in respect of this Note shall be
made to the Payee in lawful money of the United States of America in same day
funds to the Payee’s bank account specified by Payee in writing, for the account
of Payee or at such other place as shall be designated in writing by the Payee
for such purpose. Notwithstanding anything to the contrary contained herein, if
any date on which a payment under this Note becomes due and payable is not a
Business Day (as defined below) then such payment shall not be made on such
scheduled date but shall be made on the next succeeding Business Day with the
same force and effect as if made on such scheduled date and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment from and after such scheduled date.

 

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“Business Day” as used herein shall mean a day of the year on which banks are
not required or authorized to close in New York, New York and in the State of
Georgia.

 

1. Prepayment.

 

(a) In the event either (A) the Issuer consummates any sale occurring after the
date hereof of limited liability company member interests, or any other equity
interests convertible into limited liability company member interests, of the
Issuer for cash or (B) the Issuer receives after the date hereof a cash capital
contribution (but excluding any equity contributions by Issuer’s subsidiaries to
the Issuer), which in each case under clause (A) or (B) above results in the
receipt by the Issuer of at least $20,000,000 in Net Cash Proceeds (as defined
below) (a “Qualified Equity Contribution”), the Issuer shall give the Payee a
written notice of any Qualified Equity Contribution within ten (10) Business
Days after its closing. The Payee shall have ten (10) Business Days from the
date it receives the Issuer’s written notice to decide, by written notice to the
Issuer, whether or not to require a mandatory prepayment under this Note as set
forth in this Section 1. In the event the Payee fails to notify the Issuer
within such ten (10) Business Day period, the Payee shall be deemed to have
elected not to require a mandatory prepayment under this Note. In the event the
Payee has elected by written notice to the Issuer within such ten (10) Business
Day period to require a mandatory prepayment under this Note, the Issuer shall
make a prepayment in an amount (which may not be a negative number) (the
“Required Prepayment Amount”) equal to (i) 50% of the then outstanding principal
amount under this Note minus (ii) the amount of the principal previously prepaid
by the Issuer pursuant to Section 1(b); provided that such deduction under this
clause (ii) of the previously prepaid principal shall be permitted only one time
for each principal amount so prepaid by the Issuer pursuant to Section 1(b). The
Issuer shall make such prepayment within ten (10) Business Days after the Issuer
receives a written notice from the Payee of its election to require a mandatory
prepayment as set forth in this Section 1(a). Any prepayment under this Note by
the Issuer in accordance with this Section 1 shall be without premium or penalty
but with accrued and unpaid interest to the date of prepayment on the then
outstanding amount of principal; provide that the aggregate amount of prepayment
of principal together with the amount of accrued and unpaid interest on the then
outstanding amount of principal shall not exceed the Required Prepayment Amount.
“Net Cash Proceeds” as used herein shall mean the cash proceeds received by the
Issuer on account of a Qualified Equity Contribution less underwriting fees,
discounts, costs and expenses incurred by the Issuer related to such Qualified
Equity Contribution.

 

(b) The Issuer shall have the right at anytime and from time to time, upon three
(3) Business Days’ prior written notice to the Payee to prepay the indebtedness
evidenced by this Note in whole or in part without premium or penalty but with
accrued and unpaid interest to the date of prepayment on the amount prepaid.

 

(c) Upon any prepayment of any principal amount under this Note, such prepaid
amounts shall be applied against the installment amounts of principal due on the
next Payment Dates following such prepayment in direct order of maturity,
starting with the first Payment Date following such prepayment, and Annex A
shall be

 

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adjusted as set forth below in this Section 1(c) and reissued by the Issuer to
reflect such prepayment. Annex A shall be adjusted as follows: if the aggregate
amount of prepaid principal together with the payment of accrued and unpaid
interest to the date of prepayment (the “Prepaid Amount”) is (i) equal to the
aggregate amount of principal and interest due on the first Payment Date
following such prepayment under Annex A in effect immediately prior to such
prepayment (the “Total Scheduled Amount”), then the Total Scheduled Amount shall
be reduced to zero and no payment shall be required on such Payment Date; (ii)
in excess of the Total Scheduled Amount, then (x) the Total Scheduled Amount
shall be reduced to zero and no payment shall be required on the first Payment
Date following such prepayment, and (y) such excess amount shall reduce the
aggregate amounts of principal and interest due on the following Payment Date
and subsequent Payment Dates in direct order of maturity; or (iii) less than the
Total Scheduled Amount, then the aggregate amount of principal and interest due
on the first Payment Date following such prepayment shall be. the difference
between the Total Scheduled Amount and the Prepaid Amount.

 

2. Representations and Warranties of Issuer. The Issuer represents and warrants
to the Payee that, as of the date hereof, (i) the Issuer is duly organized and
validly existing in good standing under the laws of the jurisdiction of its
organization, (ii) the Issuer has the limited liability company power and
authority to execute, deliver and perform this Note, (iii) the Issuer has taken
all necessary limited liability company action to authorize its execution,
delivery, and performance of this Note and no consent, approval, or
authorization of, or declaration or filing with, any governmental authority, and
no consent of any other person, is required in connection with the Issuer’s
execution, delivery, and performance of this Note, except for those already duly
obtained, (iv) this Note has been duly executed and delivered by the Issuer, and
constitutes the legal, valid and binding obligation of the Issuer, enforceable
against. it in accordance with its terms, and (v) Issuer’s execution, delivery,
and performance of this Note does not and will not conflict with, or constitute
a violation or breach of, or constitute a default under, or result in the
creation or imposition of any lien upon the property of the Issuer by reason of
the terms of any contract, mortgage, lien, lease, agreement, indenture, or
instrument to which Issuer is a party or which is binding upon it or its
property, or any judgment, law, statute, rule or governmental regulation
applicable to Issuer, or the organizational documents of the Issuer.

 

3. Representations and Warranties of Payee. The Payee represents and warrants to
the Issuer that this Note will be acquired for investment for Payee’s own
account, not as a nominee or agent, and not with a view to the resale or
distribution of this Note or any interest herein, and the Payee has no present
intention of selling, granting any participation in, or otherwise distributing
the same. The Payee does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to any
person with respect to this Note or any interest herein. The Payee acknowledges
that any transfer of this Note or any interest herein is subject to the
restrictions of Section 12 of this Note.

 

3

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4. Events of Default and Remedies. If any one or more of the following events
(“Events of Default”) shall occur and be continuing:

 

(a) The Issuer shall fail to pay any amount of principal or interest under this
Note within ten (10) Business Days after such amount becomes due and payable
under this Note; or

 

(b) The Issuer shall fail to comply with any other covenant, agreement or
condition contained in this Note within thirty (30) days after receipt of
written notice from Payee of such failure stating that the same is an Event of
Default; or

 

(c) Any representation or warranty made by the Issuer to the Payee herein shall
be inaccurate or incomplete in any material respect when made and shall remain
untrue or incomplete in any material respect as of the 30th day after the date
on which notice of such untrue or incomplete representation or warranty stating
that the same is an Event of Default shall have been given by the Payee to the
Issuer; or

 

(d) The Issuer shall generally not pay its debts as the same become due, or
shall admit in writing its inability to pay such debts generally, or shall make
a general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against it seeking to adjudicate it as a bankrupt or an
insolvent, or seeking liquidation, winding up, reorganization arrangement,
adjustment, protection, relief, or composition of its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property; and in the event of any proceeding being instituted against it, such
proceeding shall remain undismissed or unstayed for a period of one hundred
twenty (120) days or shall result in the entry of an order for relief, the
appointment of a trustee or receiver or other adverse result to it or it shall
take any action to authorized any of the actions set forth above;

 

then, and in any such event, the Payee may, by notice to the Issuer, declare all
obligations of the Issuer hereunder (all such obligations, including, without
limitation, principal and interest, collectively referred to herein as the
“Obligations”) to be forthwith due and payable in full, whereupon the
Obligations shall become and be forthwith due and payable in full, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Issuer. Following an Event of Default and the
acceleration of the maturity date of the Obligations (whether automatically, by
declaration or otherwise) and continuing (i) until such Event of Default is
fully cured by the Issuer or waived by the Payee (in each case, in accordance
with this Note) or (ii) until the Obligations are paid in full, the Issuer shall
pay interest (the “Default Interest”) on the unpaid principal amount of this
Note at a rate per annum equal to 13.4257% (calculated on the basis of the
actual number of days elapsed over a year of 365!366 days), and the Issuer
agrees to pay all reasonable costs (including, without limitation, all
reasonable attorneys’ fees and expenses) incurred by the Payee in connection
with collection of the Obligations and enforcement of Payee’s rights under this
Note, provided that the aggregate amount of such costs shall not exceed
$100,000.00; and provided, further, that any claim giving rise to such costs
shall have been successfully adjudicated. Following an Event of Default and the
acceleration of the maturity date of the Obligations (whether automatically, by
declaration or otherwise), the proceeds of any payment or collection

 

4

--------------------------------------------------------------------------------

under this Note, and any other cash received by the Payee in connection with
this Note shall be applied by the Payee first, to the payment of accrued and
unpaid Default Interest; second, to the payment of accrued and unpaid regular
interest at the rate set forth in the first paragraph of this Note; and finally,
to the payment of the unpaid principal amount of this Note.

 

5. Amendments. No amendment or waiver of any provision of this Note, nor consent
to any departure by the Issuer therefrom, shall be effective unless the same
shall be in writing and signed by the Payee, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.

 

6. Waiver of Presentment. The Issuer hereby waives presentment for payment,
demand, notice of dishonor, notice of intent to accelerate and protest of this
Note.

 

7. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WITHIN SUCH STATE, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF
LAWS PRINCIPLES OR RULES.

 

8. Consent to Jurisdiction: Waiver of Venue Objection: Service of Process.
WITHOUT LIMITING THE RIGHT OF THE PAYEE TO BRING ANY ACTION OR PROCEEDING
AGAINST THE ISSUER OR AGAINST PROPERTY OF THE ISSUER ARISING OUT OF OR RELATING
TO THIS NOTE (AN “ACTION”) IN THE COURTS OF OTHER JURISDICTIONS, THE ISSUER
HEREBY IRREVOCABLY SUBMITS TO AND ACCEPTS THE NONEXCLUSIVE JURISDICTION OF ANY
FEDERAL COURT SITTING IN THE STATE OF GEORGIA, AND THE ISSUER HEREBY IRREVOCABLY
AGREES THAT ANY ACTION MAY BE HEARD AND DETERMINED IN SUCH FEDERAL COURT. THE
ISSUER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY
DO SO, ANY DEFENSE OR OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY DEFENSE OR
OBJECTION TO VENUE BASED ON THE GROUNDS OF FORUM NONCONVENIENS) WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE MAINTENANCE ANY ACTION IN ANY SUCH JURISDICTION. THE
ISSUER HEREBY IRREVOCABLY AGREES THAT THE SUMMONS AND COMPLAINT OR ANY OTHER
PROCESS IN ANY ACTION IN ANY JURISDICTION MAY BE SERVED BY MAILING (USING
CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID) TO THE NOTICE ADDRESS FOR THE
ISSUER SPECIFIED BELOW OR BY HAND DELIVERY TO A PERSON OF SUITABLE AGE AND
DISCRETION AT SUCH ADDRESS. SUCH SERVICE WILL BE COMPLETE ON THE DATE SUCH
PROCESS IS SO MAILED OR DELIVERED, AND THE ISSUER WILL HAVE THIRTY DAYS FROM
SUCH COMPLETION OF SERVICE IN WHICH TO RESPOND IN THE MANNER PROVIDED BY LAW.
THE ISSUER MAY ALSO BE SERVED IN ANY OTHER MANNER PERMITTED BY LAW, IN WHICH
EVENT THE ISSUER’S TIME TO RESPOND SHALL BE THE TIME PROVIDED BY LAW.

 

5

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9. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMUTED BY LAW, AND AS
SEPARATELY BARGAINED-FOR CONSIDERATION TO THE PAYEE, THE ISSUER HEREBY WAIVES
ANY RIGHT TO TRIAL BY JURY (WHICH THE PAYEE ALSO WAIVES) IN ANY ACTION, SUIT,
PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATING TO THIS NOTE,
THE OBLIGATIONS, OR THE PAYEE’S CONDUCT IN RESPECT OF ANY OF THE FOREGOING.

 

10. Miscellaneous. No failure on the part of the Payee to exercise, and no delay
in exercising, any right under this Note shall operate as a waiver thereof; nor
shall any partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

 

11. Maximum Interest. Notwithstanding the foregoing paragraphs and all other
provisions of this Note, none of the terms and provisions of this Note shall
ever be construed to create a contract to pay to the Payee, for the use,
forbearance or detention of money, interest in excess of the maximum amount of
interest permitted to be charged by the Payee to the Issuer under applicable
state or federal law from time to time in effect, and the Issuer shall never be
required to pay interest in excess of such maximum amount. If, for any reason
interest is paid hereon in excess of such maximum amount, then promptly upon any
determination that such excess has been paid the Payee will, at its option,
either refund such excess to the Issuer or apply such excess to the principal
owing hereunder.

 

12. Restriction on Transfer of Note. THE PAYEE SHALL NOT SELL, PLEDGE OR
OTHERWISE TRANSFER THIS NOTE OR ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER
WITHOUT THE PRIOR WRITTEN CONSENT OF THE ISSUER WHICH CONSENT MAY BE GIVEN ONLY
UPON A PRIOR APPROVAL BY THE HOLDERS OF MORE THAN 50% OF THE THEN OUTSTANDING
EQUITY INTERESTS IN THE ISSUER EXCLUDING ANY EQUITY INTERESTS HELD DIRECTLY OR
INDIRECTLY BY THE PAYEE, G. ALLAN BRYANT OR THE MICHAEL E. BRYANT LIFE TRUST, OR
ANY OF THEIR RESPECTIVE AFFILIATES.

 

13. Notices. Any notice required or permitted by this Note shall be in writing
and shall be deemed sufficient upon delivery, when delivered personally or by a
nationally recognized delivery service (such as Federal Express or UPS) to the
respective address set forth on the signature page hereof, or to such other
address as any party may specify in writing from time to time to the other
party.

 

14. Time of the Essence. Time is of the essence with respect to this Note and in
the performance by the Issuer of its Obligations under this Note.

 

15. Entire Agreement. This Note constitutes the entire agreement of the parties
relative to its subject matter, and shall not be waived, modified or
supplemented, in whole or in part, except in a writing signed by the parties. If
any provision of this Note

 

6

--------------------------------------------------------------------------------

is held invalid or unenforceable by any court of competent jurisdiction, the
remaining provisions shall continue in full force and effect.

 

IN WITNESS WHEREOF, the Issuer has executed this Note as of the date first above
written.

 

MADISON RIVER TELEPHONE COMPANY, LLC By:  

/s/ J. Stephen Vanderwoude

Name:

 

J. Stephen Vanderwoude

Title:

 

CEO

Notice Address:

Madison River Telephone Company, LLC

103 South Fifth Street

Mebane, North Carolina 27302

Attention: Chief Financial Officer

Telecopier: (919) 563-4993

with a copy to:

Madison River Telephone Company, LLC

103 South Fifth Street

Mebane, North Carolina 27302

Attention: General Counsel

Telecopier: (919) 563-4993

 

7

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AGREED AND ACCEPTED: DANIEL M. BRYANT

/s/ Daniel M. Bryant

Notice Address:

 

Mr. Daniel M. Bryant

255 Lincoln Trail

Richmond Hill, GA 31324

 

with a copy to:

 

Grayson P. Lane, Esq.

Lane & Crowe, PC

601 “P” Street

P.O. Box 1891

Brunswick, GA 31521-1891

 

8

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Annex A

 

AMORTIZATION SCHEDULE

 

Payment Date

--------------------------------------------------------------------------------

   Beginning
Balance

--------------------------------------------------------------------------------

   Interest
Accrued

--------------------------------------------------------------------------------

   Amount of
Payment
(Principal)

--------------------------------------------------------------------------------

   Amount of
Payment
(Interest)

--------------------------------------------------------------------------------

   Ending
Balance

--------------------------------------------------------------------------------

April 1, 2002

   0.00    0.00    0.00    0.00    6,666,666.67

December 31, 2002

   6,666,666.67    421,668.46    0.00    0.00    7,088,335.13

December 31, 2003

   7,088,335.13    597,240.05    607,255.81    597,240.05    6,481,079.32

December 31, 2004

   6,481,079.32    546,074.65    658,421.20    546,074.65    5,822,658.12

December 31, 2005

   5,822,658.12    490,598.22    713,897.63    490,598.22    5,108,760.48

December 31, 2006

   5,108,760.48    430,447.53    774,048.32    430,447.53    4,334,712.16

December 31, 2007

   4,334,712.16    365,228.74    839,264.11    365,228.74    3,495,445.05

December 31, 2008

   3,495,445.05    294,514.82    1,359,981.03    294,514.82    2,135,464.02

December 31, 2009

   2,135,464.02    179,927.25    1,024,568.61    179,927.25    1,110,895.41

December 31, 2010

   1,110,895.41    93,600.43    1,110,895.41    93,600.43    0.00

 

--------------------------------------------------------------------------------

Exhibit B

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR PURSUANT TO THE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS NOTE MAY NOT
BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE ACT
AND SUCH APPLICABLE STATE LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SAID ACT OR SUCH APPLICABLE STATE LAWS.

 

TERM NOTE NO. 2

 

$6,666,666.67

   April 10, 2002

INTEREST RATE

   MATURITY DATE

8.4257%

   December 31, 2010

 

FOR VALUE RECEIVED, the undersigned, Madison River Telephone Company, LLC, a
Delaware limited liability company (the “Issuer”), promises to pay to the order
of G. Allan Bryant (the “Payee”) or the registered permitted assignee thereof,
the principal amount of SIX MILLION SIX HUNDRED SIXTY SIX THOUSAND SIX HUNDRED
SIXTY SIX AND 67/100 DOLLARS ($6,666,666.67) (or such lesser amount as shall
equal the aggregate unpaid principal amount outstanding under this Term Note) on
December 31, 2010 (the “Maturity Date”). The Issuer shall pay the principal
amount of this Term Note (this “Note”) in installments on the payment dates (the
“Payment Dates”) and in the amounts set forth in Annex A hereto (as the same may
be adjusted from time to time pursuant to Section 1(c) of this Term Note) in
accordance with the terms of this Note. The interest on the unpaid principal
amount of this Note outstanding from time to time, from April 1, 2002 until such
amount shall be paid in full, shall be payable annually at a rate per annum
equal to 8.4257% (calculated on the basis of the actual number of days elapsed
over a year of 365/366 days) on the Payment Dates set forth in Annex A hereto as
the same may be adjusted from time to time pursuant to Section 1(c) of this
Note. All payments of principal and interest in respect of this Note shall be
made to the Payee in lawful money of the United States of America in same day
funds to the Payee’s bank account specified by Payee in writing, for the account
of Payee or at such other place as shall be designated in writing by the Payee
for such purpose. Notwithstanding anything to the contrary contained herein, if
any date on which a payment under this Note becomes due and payable is not a
Business Day (as defined below) then such payment shall not be made on such
scheduled date but shall be made on the next succeeding Business Day with the
same force and effect as if made on such scheduled date and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment from and after such scheduled date. “Business Day” as
used herein shall mean a day of the year on which banks are not required or
authorized to close in New York, New York and in the State of Georgia.

 

1. Prepayment.

 

(a) In the event either (A) the Issuer consummates any sale occurring after the
date hereof of limited liability company member interests, or any other

 

--------------------------------------------------------------------------------

equity interests convertible into limited liability company member interests, of
the Issuer for cash or (B) the Issuer receives after the date hereof a cash
capital contribution (but excluding any equity contributions by Issuer’s
subsidiaries to the Issuer), which in each case under clause (A) or (B) above
results in the receipt by the Issuer of at least $20,000,000 in Net Cash
Proceeds (as defined below) (a “Qualified Equity Contribution”), the Issuer
shall give the Payee a written notice of any Qualified Equity Contribution
within ten (10) Business Days after its closing. The Payee shall have ten (10)
Business Days from the date it receives the Issuer’s written notice to decide,
by written notice to the Issuer, whether or not to require a mandatory
prepayment under this Note as set forth in this Section 1. In the event the
Payee fails to notify the Issuer within such ten (10) Business Day period, the
Payee shall be deemed to have elected not to require a mandatory prepayment
under this Note. In the event the Payee has elected by written notice to the
Issuer within such ten (10) Business Day period to require a mandatory
prepayment under this Note, the Issuer shall make a prepayment in an amount
(which may not be a negative number) (the “Required Prepayment Amount”) equal to
(i) 50% of the then outstanding principal amount under this Note minus (ii) the
amount of the principal previously prepaid by the Issuer pursuant to Section
1(b); provided that such deduction under this clause (ii) of the previously
prepaid principal shall be permitted only one time for each principal amount so
prepaid by the Issuer pursuant to Section 1(b). The Issuer shall make such
prepayment within ten (10) Business Days after the Issuer receives a written
notice from the Payee of its election to require a mandatory prepayment as set
forth in this Section 1(a). Any prepayment under this Note by the Issuer in
accordance with this Section 1 shall be without premium or penalty but with
accrued and unpaid interest to the date of prepayment on the then outstanding
amount of principal; provided that the aggregate amount of prepayment of
principal together with the amount of accrued and unpaid interest on the then
outstanding amount of principal shall not exceed the Required Prepayment Amount.
“Net Cash Proceeds” as used herein shall mean the cash proceeds received by the
Issuer on account of a Qualified Equity Contribution less underwriting fees,
discounts, costs and expenses incurred by the Issuer related to such Qualified
Equity Contribution.

 

(b) The Issuer shall have the right at any time and from time to time, upon
three (3) Business Days’ prior written notice to the Payee to prepay the
indebtedness evidenced by this Note in whole or in part without premium or
penalty but with accrued and unpaid interest to the date of prepayment on the
amount prepaid.

 

(c) Upon any prepayment of any principal amount under this Note, such prepaid
amounts shall be applied against the installment amounts of principal due on the
next Payment Dates following such prepayment in direct order of maturity,
starting with the first Payment Date following such prepayment, and Annex A
shall be adjusted as set forth below in this Section 1(c) and reissued by the
Issuer to reflect such prepayment. Annex A shall be adjusted as follows: if the
aggregate amount of prepaid principal together with the payment of accrued and
unpaid interest to the date of prepayment (the “Prepaid Amount”) is (i) equal to
the aggregate amount of principal and interest due on the first Payment Date
following such prepayment under Annex A in effect immediately prior to such
prepayment (the “Total Scheduled Amount”), then the Total Scheduled Amount shall
be reduced to zero and no payment shall be required on

 

--------------------------------------------------------------------------------

such Payment Date; (ii) in excess of the Total Scheduled Amount, then (x) the
Total Scheduled Amount shall be reduced to zero and no payment shall be required
on the first Payment Date following such prepayment, and (y) such excess amount
shall reduce the aggregate amounts of principal and interest due on the
following Payment Date and subsequent Payment Dates in direct order of maturity;
or (iii) less than the Total Scheduled Amount, then the aggregate amount of
principal and interest due on the first Payment Date following such prepayment
shall be the difference between the Total Scheduled Amount and the Prepaid
Amount.

 

2. Representations and Warranties of Issuer. The Issuer represents and warrants
to the Payee that, as of the date hereof, (i) the Issuer is duly organized and
validly existing in good standing under the laws of the jurisdiction of its
organization, (ii) the Issuer has the limited liability company power and
authority to execute, deliver and perform this Note, (iii) the Issuer has taken
all necessary limited liability company action to authorize its execution,
delivery, and performance of this Note and no consent, approval, or
authorization of, or declaration or filing with, any governmental authority, and
no consent of any other person, is required in connection with the Issuer’s
execution, delivery, and performance of this Note, except for those already duly
obtained, (iv) this Note has been duly executed and delivered by the Issuer, and
constitutes the legal, valid and binding obligation of the Issuer, enforceable
against it in accordance with its terns, and (v) Issuers execution, delivery,
and performance of this Note does not and will not conflict with, or constitute
a violation or breach of, or constitute a default under, or result in the
creation or imposition of any lien upon the property of the Issuer by reason of
the terms of any contract, mortgage, lien, lease, agreement, indenture, or
instrument to which Issuer is a party or which is binding upon it or its
property, or any judgment, law, statute, rule or governmental regulation
applicable to Issuer, or the organizational documents of the Issuer.

 

3. Representations and Warranties of Payee. The Payee represents and warrants to
the Issuer that this Note will be acquired for investment for Payee’s own
account, not as a nominee or agent, and not with a view to the resale or
distribution of this Note or any interest herein, and the Payee has no present
intention of selling, granting any participation in, or otherwise distributing
the same. The Payee does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to any
person with respect to this Note or any interest herein. The Payee acknowledges
that any transfer of this Note or any interest herein is subject to the
restrictions of Section 12 of this Note.

 

4. Events of Default and Remedies. If any one or more of the following events
(“Events of Default”) shall occur and be continuing:

 

(a) The Issuer shall fail to pay any amount of principal or interest under this
Note within ten (10) Business Days after such amount becomes due and payable
under this Note; or

 

--------------------------------------------------------------------------------

(b) The Issuer shall fail to comply with any other covenant, agreement or
condition contained in this Note within thirty (30) days after receipt of
written notice from Payee of such failure stating that the same is an Event of
Default; or

 

(c) Any representation or warranty made by the Issuer to the Payee herein shall
be inaccurate or incomplete in any material respect when made and shall remain
untrue or incomplete in any material respect as of the 30th day after the date
on which notice of such untrue or incomplete representation or warranty stating
that the same is an Event of Default shall have been given by the Payee to the
Issuer; or

 

(d) The Issuer shall generally not pay its debts as the same become due, or
shall admit in writing its inability to pay such debts generally, or shall make
a general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against it seeking to adjudicate it as a bankrupt or an
insolvent, or seeking liquidation, winding up, reorganization arrangement,
adjustment, protection, relief, or composition of its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property; and in the event of any proceeding being instituted against it, such
proceeding shall remain undismissed or unstayed for a period of one hundred
twenty (120) days or shall result in the entry of an order for relief, the
appointment of a trustee or receiver or other adverse result to it or it shall
take any action to authorized any of the actions set forth above;

 

then, and in any such event, the Payee may, by notice to the Issuer, declare all
obligations of the Issuer hereunder (all such obligations, including, without
limitation, principal and interest, collectively referred to herein as the
“Obligations”) to be forthwith due and payable in full, whereupon the
Obligations shall become and be forthwith due and payable in full, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Issuer. Following an Event of Default and the
acceleration of the maturity date of the Obligations (whether automatically, by
declaration or otherwise) and continuing (i) until such Event of Default is
fully cured by the Issuer or waived by the Payee (in each case, in accordance
with this Note) or (ii) until the Obligations are paid in full, the Issuer shall
pay interest (the “Default Interest”) on the unpaid principal amount of this
Note at a rate per annum equal to 13.4257% (calculated on the basis of the
actual number of days elapsed over a year of 365/366 days), and the Issuer
agrees to pay all reasonable costs (including, without limitation, all
reasonable attorneys’ fees and expenses) incurred by the Payee in connection
with collection of the Obligations and enforcement of Payee’s rights under this
Note, provided that the aggregate amount of such costs shall not exceed
$100,000.00; and provided, further, that any claim giving rise to such costs
shall have been successfully adjudicated. Following an Event of Default and the
acceleration of the maturity date of the Obligations (whether automatically, by
declaration or otherwise), the proceeds of any payment or collection under this
Note, and any other cash received by the Payee in connection with this Note
shall be applied by the Payee first, to the payment of accrued and unpaid
Default Interest; second, to the payment of accrued and unpaid regular interest
at the rate set forth in the

 

--------------------------------------------------------------------------------

first paragraph of this Note; and finally, to the payment of the unpaid
principal amount of this Note.

 

5. Amendments. No amendment or waiver of any provision of this Note, nor consent
to any departure by the Issuer therefrom, shall be effective unless the same
shall be in writing and signed by the Payee, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.

 

6. Waiver of Presentment. The Issuer hereby waives presentment for payment,
demand, notice of dishonor, notice of intent to accelerate and protest of this
Note.

 

7. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WITHIN SUCH STATE, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF
LAWS PRINCIPLES OR RULES.

 

8. Consent to Jurisdiction: Waiver of Venue Objection; Service of Process.
WITHOUT LIMITING THE RIGHT OF THE PAYEE TO BRING ANY ACTION OR PROCEEDING
AGAINST THE ISSUER OR AGAINST PROPERTY OF THE ISSUER ARISING OUT OF OR RELATING
TO THIS NOTE (AN “ACTION”) IN THE COURTS OF OTHER JURISDICTIONS, THE ISSUER
HEREBY IRREVOCABLY SUBMITS TO AND ACCEPTS THE NONEXCLUSIVE JURISDICTION OF ANY
FEDERAL COURT SITTING IN THE STATE OF GEORGIA, AND THE ISSUER HEREBY IRREVOCABLY
AGREES THAT ANY ACTION MAY BE HEARD AND DETERMINED IN SUCH FEDERAL COURT. THE
ISSUER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY
DO SO, ANY DEFENSE OR OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY DEFENSE OR
OBJECTION TO VENUE BASED ON THE GROUNDS OF FORUM NONCONVENIENS) WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE MAINTENANCE ANY ACTION IN ANY SUCH JURISDICTION. THE
ISSUER HEREBY IRREVOCABLY AGREES THAT THE SUMMONS AND COMPLAINT OR ANY OTHER
PROCESS IN ANY ACTION IN ANY JURISDICTION MAY BE SERVED BY MAILING (USING
CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID) TO THE NOTICE ADDRESS FOR THE
ISSUER SPECIFIED BELOW OR BY HAND DELIVERY TO A PERSON OF SUITABLE AGE AND
DISCRETION AT SUCH ADDRESS. SUCH SERVICE WILL BE COMPLETE ON THE DATE SUCH
PROCESS IS SO MAILED OR DELIVERED, AND THE ISSUER WILL HAVE THIRTY DAYS FROM
SUCH COMPLETION OF SERVICE IN WHICH TO RESPOND IN THE MANNER PROVIDED BY LAW.
THE ISSUER MAY ALSO BE SERVED IN ANY OTHER MANNER PERMITTED BY LAW, IN WHICH
EVENT THE ISSUER’S TIME TO RESPOND SHALL BE THE TIME PROVIDED BY LAW.

 

9. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, AND AS
SEPARATELY BARGAINED-FOR CONSIDERATION TO THE PAYEE, THE ISSUER HEREBY WAIVES
ANY RIGHT TO TRIAL BY JURY

 

--------------------------------------------------------------------------------

(WHICH THE PAYEE ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF
ANY KIND ARISING OUT OF OR RELATING TO THIS NOTE, THE OBLIGATIONS, OR THE
PAYEE’S CONDUCT IN RESPECT OF ANY OF THE FOREGOING.

 

10. Miscellaneous. No failure on the part of the Payee to exercise, and no delay
in exercising, any right under this Note shall operate as a waiver thereof; nor
shall any partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

 

11. Maximum Interest. Notwithstanding the foregoing paragraphs and all other
provisions of this Note, none of the terms and provisions of this Note shall
ever be construed to create a contract to pay to the Payee, for the use,
forbearance or detention of money, interest in excess of the maximum amount of
interest permitted to be charged by the Payee to the Issuer under applicable
state or federal law from time to time in effect, and the Issuer shall never be
required to pay interest in excess of such maximum amount. If, for any reason
interest is paid hereon in excess of such maximum amount, then promptly upon any
determination that such excess has been paid the Payee will, at its option,
either refund such excess to the Issuer or apply such excess to the principal
owing hereunder.

 

12. Restriction on Transfer of Note. THE PAYEE SHALL NOT SELL, PLEDGE OR
OTHERWISE TRANSFER THIS NOTE OR ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER
WITHOUT THE PRIOR WRITTEN CONSENT OF THE ISSUER WHICH CONSENT MAY BE GIVEN ONLY
UPON A PRIOR APPROVAL BY THE HOLDERS OF MORE THAN 50% OF THE THEN OUTSTANDING
EQUITY INTERESTS IN THE ISSUER EXCLUDING ANY EQUITY INTERESTS HELD DIRECTLY OR
INDIRECTLY BY THE PAYEE, DANIEL M. BRYANT OR THE MICHAEL E. BRYANT LIFE TRUST,
OR ANY OF THEIR RESPECTIVE AFFILIATES.

 

13. Notices. Any notice required or permitted by this Note shall be in writing
and shall be deemed sufficient upon delivery, when delivered personally or by a
nationally recognized delivery service (such as Federal Express or UPS) to the
respective address set forth on the signature page hereof, or to such other
address as any party may specify in writing from time to time to the other
party.

 

14. Time of the Essence. Time is of the essence with respect to this Note and in
the performance by the Issuer of its Obligations under this Note.

 

15. Entire Agreement. This Note constitutes the entire agreement of the parties
relative to its subject matter, and shall not be waived, modified or
supplemented, in whole or in part, except in a writing signed by the parties. If
any provision of this Note is held invalid or unenforceable by any court of
competent jurisdiction, the remaining provisions shall continue in full force
and effect.

 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Issuer has executed this Note as of the date first above
written.

 

MADISON RIVER TELEPHONE COMPANY, LLC By:   /s/ J. Stephen Vanderwoude Name:   J.
Stephen Vanderwoude Title:   CEO

Notice Address:

Madison River Telephone Company, LLC

103 South Fifth Street

Mebane, North Carolina 27302

Attention: Chief Financial Officer

Telecopier: (919) 563-4993

with a copy to:

Madison River Telephone Company, LLC

103 South Fifth Street

Mebane, North Carolina 27302

Attention: General Counsel

Telecopier: (919) 563-4993

 

--------------------------------------------------------------------------------

AGREED AND ACCEPTED:

 

G. ALLAN BRYANT

 

/s/ G. Allan Bryant

 

Notice Address:

 

Mr. G. Allan Bryant

P. O. Box 899

Allenhurst, GA 31301

 

with a copy to:

 

Alex L. Zipperer, Esq.

Zipperer & Lorberbaum

200 E. St. Julian Street

P. O. Box 9147

Savannah, GA 31412

 

--------------------------------------------------------------------------------

 

Annex A

 

AMORTIZATION SCHEDULE

 

Payment Date

--------------------------------------------------------------------------------

   Beginning
Balance

--------------------------------------------------------------------------------

   Interest
Accrued

--------------------------------------------------------------------------------

   Amount of
Payment
(Principal)

--------------------------------------------------------------------------------

   Amount of
Payment
(Interest)

--------------------------------------------------------------------------------

   Ending
Balance

--------------------------------------------------------------------------------

April 1, 2002

   0.00    0.00    0.00    0.00    6,666,666.67

December 31, 2002

   6,666,666.67    421,668.46    0.00    0.00    7,088,335.13

December 31, 2003

   7,088,335.13    597,240.05    607,255.81    597,240.05    6,481,079.32

December 31, 2004

   6,481,079.32    546,074.65    658,421.20    546,074.65    5,822,658.12

December 31, 2005

   5,822,658.12    490,598.22    713,897.63    490,598.22    5,108,760.48

December 31, 2006

   5,108,760.48    430,447.53    774,048.32    430,447.53    4,334,712.16

December 31, 2007

   4,334,712.16    365,228.74    839,264.11    365,228.74    3,495,445.05

December 31, 2008

   3,495,445.05    294,514.82    1,359,981.03    294,514.82    2,135,464.02

December 31, 2009

   2,135,464.02    179,927.25    1,024,568.61    179,927.25    1,110,895.41

December 31, 2010

   1,110,895.41    93,600.43    1,110,895.41    93,600.43    0.00

 

--------------------------------------------------------------------------------

Exhibit C

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE: SECURITIES ACT OF 1933, AS AMENDED,
OR PURSUANT TO THE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, THIS NOTE MAY NOT
BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE ACT
AND SUCH APPLICABLE STATE LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SAID ACT OR SUCH APPLICABLE STATE LAWS.

 

TERM NOTE NO. 3

 

$6,666,666.67

  

April 10, 2002

INTEREST RATE

  

MATURITY DATE

8.4257%

  

December 31, 2010

 

FOR VALUE RECEIVED, the undersigned, Madison River Telephone Company, L LC, a
Delaware limited liability company (the “Issuer”), promises to pay to the order
of The Michael E. Bryant Life Trust, a Georgia irrevocable trust of December 17,
1998 (the “Payee”) or the registered permitted assignee thereof, the principal
amount of SIX MILLION SIX HUNDRED SIXTY SIX THOUSAND SIX HUNDRED SIXTY SIX AND
67/100 DOLLARS ($6,666,666.67) (or such lesser amount as shall equal the
aggregate unpaid principal amount outstanding under this Term Note) on December
31, 2010 (the “Maturity Date”). The Issuer shall pay the principal amount of
this Term Note (this “Note”) in installments on the payment dates (the “Payment
Dates”) and in the amounts set forth in Annex A hereto (as the same may be
adjusted from time to time pursuant to Section 1(c) of this Term Note) in
accordance with the terms of this Note. The interest on the unpaid principal
amount of this Note outstanding from time to time, from April. 1, 2002 until
such amount shall be paid in full, shall be payable annually at a rate per annum
equal to 8.4257% (calculated on the basis .of the actual number of days elapsed
over a year of 365/366 days) on the Payment Dates set forth in Annex A hereto as
the same may be adjusted from time to time pursuant to Section 1(c) of this
Note. All payments of principal and interest in respect of this Note shall be
made to the Payee in lawful money of the United States of America in same day
funds to the Payee’s bank account specified by Payee in writing, for the account
of Payee or at such other place as shall be designated in writing by the Payee
for such purpose. Notwithstanding anything to the contrary contained herein, if
any date on which a payment under this Note becomes due and payable is not a
Business Day (as defined below) then such payment shall not be made on such
scheduled date but shall be made on the next succeeding Business Day with the
same force and effect as if made on such scheduled date and if such payment is
made on such next succeeding Business Day, no interest shall accrue on the
amount of such payment from and after such scheduled date. “Business Day” as
used herein shall mean a day of the year on which banks are not required or
authorized to close in New York, New York and in the State of Georgia.

 

--------------------------------------------------------------------------------

1. Prepayment.

 

(a) In the event either (A) the Issuer consummates any sale occurring after the
date hereof of limited liability company member interests, or any other equity
interests convertible into limited liability company member interests, of the
Issuer for cash or (B) the Issuer receives after the date hereof a cash capital
contribution (but excluding any equity contributions by Issuer’s subsidiaries to
the Issuer), which in each case under clause (A) or (B) above results in the
receipt by the Issuer of at least $20,000,000 in Net Cash Proceeds (as defined
below) (a “Qualified Equity Contribution”), the Issuer shall give the Payee a
written notice of any Qualified Equity Contribution within ten (10) Business
Days after its closing. The Payee shall have ten (10) Business Days from the
date it receives the Issuer’s written notice to decide, by written notice to the
Issuer, whether or not to require a mandatory prepayment under this Note as set
forth in this Section 1. In the event the Payee fails to notify the Issuer
within such ten (10) Business Day period, the Payee shall be deemed to have
elected not to require a mandatory prepayment under this Note. In the event the
Payee has elected by written notice to the Issuer within such ten (10) Business
Day period to require a mandatory prepayment under this Note, the Issuer shall
make a prepayment in an amount (which may not be a negative number) (the
“Required Prepayment Amount”) equal to (i) 50% of the then outstanding principal
amount under this Note minus (ii) the amount of the principal previously prepaid
by the Issuer pursuant to Section 1(b); provided that such deduction under this
clause (ii) of the previously prepaid principal shall be permitted only one time
for each principal amount so prepaid by the Issuer pursuant to Section 1(b). The
Issuer shall make such prepayment within ten (10) Business Days after the Issuer
receives a written notice from the Payee of its election to require a mandatory
prepayment as set forth in this Section 1(a). Any prepayment under this Note by
the Issuer in accordance with this Section 1 shall be without premium or penalty
but with accrued and unpaid interest to the date of prepayment on the then
outstanding amount of principal; provided that the aggregate amount of
prepayment of principal together with the amount of accrued and unpaid interest
on the then outstanding amount of principal shall not exceed the Required
Prepayment Amount. “Net Cash Proceeds” as used herein shall mean the cash
proceeds received by the Issuer on account of a Qualified Equity Contribution
less underwriting fees, discounts, costs and expenses incurred by the Issuer
related to such Qualified Equity Contribution.

 

(b) The Issuer shall have the right at any time and from time to time, upon
three (3) Business Days’ prior written notice to the Payee to prepay the
indebtedness evidenced by this Note in whole or in part without premium or
penalty but with accrued and unpaid interest to the date of prepayment on the
amount prepaid.

 

(c) Upon any prepayment of any principal amount under this Note, such prepaid
amounts shall be applied against the installment amounts of principal due on the
next Payment Dates following such prepayment in direct order of maturity,
starting with the first Payment Date following such prepayment, and Annex A
shall. be adjusted as set forth below in this Section 1(c) and reissued by the
Issuer to reflect such prepayment. Annex A shall be adjusted as follows: if the
aggregate amount of prepaid principal together with the payment of accrued and
unpaid interest to the date of

 

2

--------------------------------------------------------------------------------

prepayment (the “Prepaid Amount”) is (i) equal to the aggregate amount of
principal and interest due on the first Payment Date following such prepayment
under Annex A in effect immediately prior to such prepayment (the “Total
Scheduled Amount”), then the Total Scheduled Amount shall be reduced to zero and
no payment shall be required on such Payment Date; (ii) in excess of the Total
Scheduled Amount, then (x) the Total Scheduled Amount shall be reduced to zero
and no payment shall be required on the first Payment Date following such
prepayment, and (y) such excess amount shall reduce the aggregate amounts of
principal and interest due on the following Payment Date and subsequent Payment
Dates in direct order of maturity; or (iii) less than the Total Scheduled
Amount, then the aggregate amount of principal and interest due on the first
Payment Date following such prepayment shall be the difference between the Total
Scheduled Amount and the Prepaid Amount.

 

2. Representations and Warranties of Issuer. The Issuer represents and warrants
to the Payee that, as of the date hereof, (i) the Issuer is duly organized and
validly existing in good standing under the laws of the jurisdiction of its
organization, (ii) the Issuer has the limited liability company power and
authority to execute, deliver and perform this Note, (iii) the Issuer has taken
all necessary limited liability company action to authorize its execution,
delivery, and performance of this Note and no consent, approval, or
authorization of, or declaration or filing with, any governmental authority, and
no consent of any other person, is required in connection with the Issuer’s
execution, delivery, and performance of this Note, except for those already duly
obtained, (iv) this Note has been duly executed and delivered by the Issuer, and
constitutes the legal, valid and binding obligation of the Issuer, enforceable
against it in accordance with its terms, and.(v) Issuer’s execution, delivery,
and performance of this Note does not and will not conflict with, or constitute
a violation or breach of, or constitute a default under, or result in the
creation or imposition of any lien upon the property of the Issuer by reason of
the terms of any contract, mortgage, lien, lease, agreement, indenture, or
instrument to which Issuer is a party or which is binding upon it or its
property, or any judgment, law, statute, rule or governmental regulation
applicable to Issuer, or the organizational documents of the Issuer.

 

3. Representations and Warranties of Payee. The Payee represents and warrants to
the Issuer that this Note will be acquired for investment for Payee’s own
account, not as a nominee or agent, and not with a view to the resale or
distribution of this Note or any interest herein, and the Payee has no present
intention of selling, granting any participation in, or otherwise distributing
the same. The Payee does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to any
person with respect to this Note or any interest herein. The Payee acknowledges
that any transfer of this Note or any interest herein is subject to the
restrictions of Section 12 of this Note.

 

3

--------------------------------------------------------------------------------

4. Events of Default and Remedies. If any one or more of the following events
(“Events of Default”) shall occur and be continuing:

 

(a) The Issuer shall fail to pay any amount of principal or interest under this
Note within ten (10) Business Days after such amount becomes due and payable
under this Note; or

 

(b) The Issuer shall fail to comply with any other covenant, agreement or
condition contained in this Note within thirty (30) days after receipt of
written notice from Payee of such failure stating that the same is an Event of
Default; or

 

(c) Any representation or warranty made by the Issuer to the Payee herein shall
be inaccurate or incomplete in any material respect when made and shall remain
untrue or incomplete in any material respect as of the 30th day after the date
on which notice of such untrue or incomplete representation or warranty stating
that the same is an Event of Default shall have been given by the Payee to the
Issuer; or

 

(d) The Issuer shall generally not pay its debts as the same become due, or
shall admit in writing its inability to pay such debts generally, or shall make
a general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against it seeking to adjudicate it as a bankrupt or an
insolvent, or seeking liquidation, winding up, reorganization arrangement,
adjustment, protection, relief, or composition of its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property; and in the event of any proceeding being instituted against it, such
proceeding shall remain undismissed or unstayed for a period of one hundred
twenty (120) days or shall result in the entry of an order for relief, the
appointment of a trustee or receiver or other adverse result to it or it shall
take any action to authorized any of the actions set forth above;

 

then, and in any such event, the Payee may, by notice to the Issuer, declare all
obligations of the Issuer hereunder (all such obligations, including, without
limitation, principal and interest, collectively referred to herein as the
“Obligations”) to be forthwith due and payable in full, whereupon the
Obligations shall become and be forthwith due and payable in full, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Issuer. Following an Event of Default and the
acceleration of the maturity date of the Obligations (whether automatically, by
declaration or otherwise) and continuing (i) until such Event of Default is
fully cured by the Issuer or waived by the Payee (in each case, in accordance
with this Note) or (ii) until the Obligations are paid in full, the Issuer shall
pay interest (the “Default Interest”) on the unpaid principal amount of this
Note at a rate per annum equal to 13.4257%a (calculated on the basis of the
actual number of days elapsed over a year of 365/366 days), and the Issuer
agrees to pay all reasonable costs (including, without limitation, all
reasonable attorneys’ fees and expenses) incurred by the Payee in connection
with collection of the Obligations and enforcement of Payee’s rights under this
Note, provided that the aggregate amount of such costs shall not exceed
$100,000.00; and provided, further, that any claim giving rise to such costs
shall have been successfully adjudicated. Following an Event of Default and the
acceleration of the maturity date of the Obligations (whether automatically, by
declaration or otherwise), the proceeds of any payment or collection under this
Note, and any other cash received by the Payee in connection with this Note

 

4

--------------------------------------------------------------------------------

shall be applied by the Payee first, to the payment of accrued and unpaid
Default Interest; second, to the payment of accrued and unpaid regular interest
at the rate set forth in the first paragraph of this Note; and finally, to the
payment of the unpaid principal amount of this Note.

 

5. Amendments. No amendment or waiver of any provision of this Note, nor consent
to any departure by the Issuer therefrom, shall be effective unless the same
shall be in writing and signed by the Payee, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.

 

6. Waiver of Presentment. The Issuer hereby waives presentment for payment,
demand, notice of dishonor, notice of intent to accelerate and protest of this
Note.

 

7. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WITHIN SUCH STATE, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF
LAWS PRINCIPLES OR RULES.

 

8. Consent to Jurisdiction; Waiver of Venue Objection; Service of Process.
WITHOUT LIMITING THE RIGHT OF THE PAYEE TO BRING ANY ACTION OR PROCEEDING
AGAINST THE ISSUER OR AGAINST PROPERTY OF THE ISSUER ARISING OUT OF OR RELATING
TO THIS NOTE (AN “ACTION”) IN THE COURTS OF OTHER JURISDICTIONS, THE ISSUER
HEREBY IRREVOCABLY SUBMITS TO AND ACCEPTS THE NONEXCLUSIVE JURISDICTION OF ANY
FEDERAL COURT SITTING IN THE STATE OF GEORGIA, AND THE ISSUER HEREBY IRREVOCABLY
AGREES THAT ANY ACTION MAY BE HEARD AND DETERMINED IN SUCH FEDERAL COURT. THE
ISSUER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THAT IT MAY EFFECTIVELY
DO SO, ANY DEFENSE OR OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY DEFENSE OR
OBJECTION TO VENUE BASED ON THE GROUNDS OF FORUM NONCONVENIENS) WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE MAINTENANCE ANY ACTION IN ANY SUCH JURISDICTION. THE
ISSUER HEREBY IRREVOCABLY AGREES THAT THE SUMMONS AND COMPLAINT OR ANY OTHER
PROCESS IN ANY ACTION IN ANY JURISDICTION MAY BE SERVED BY MAILING (USING
CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID) TO THE NOTICE ADDRESS FOR THE
ISSUER SPECIFIED BELOW OR BY HAND DELIVERY TO A PERSON OF SUITABLE AGE AND
DISCRETION AT SUCH ADDRESS. SUCH SERVICE WILL BE COMPLETE ON THE DATE SUCH
PROCESS IS SO MAILED OR DELIVERED, AND THE ISSUER WILL HAVE THIRTY DAYS FROM
SUCH COMPLETION OF SERVICE IN WHICH TO RESPOND IN THE MANNER PROVIDED BY LAW.
THE ISSUER MAY ALSO BE SERVED IN ANY OTHER MANNER PERMITTED BY LAW, IN WHICH
EVENT THE ISSUER’S TIME TO RESPOND SHALL BE THE TIME PROVIDED BY LAW.

 

5

--------------------------------------------------------------------------------

9. Waiver of Jury. TO THE FULLEST EXTENT PERMITTED BY LAW, AND AS SEPARATELY
BARGAINED-FOR CONSIDERATION TO THE PAYEE, THE ISSUER HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY (WHICH THE PAYEE ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATING TO THIS NOTE, THE
OBLIGATIONS, OR THE PAYEE’S CONDUCT IN RESPECT OF ANY OF THE FOREGOING.

 

10. Miscellaneous. No failure on the part of the Payee to exercise, and no delay
in exercising, any right under this Note shall operate as a waiver thereof; nor
shall any partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

 

11. Maximum Interest. Notwithstanding the foregoing paragraphs and all other
provisions of this Note, none of the terms and provisions of this Note shall
ever be construed to create a contract to pay to the Payee, for the use,
forbearance or detention of money, interest in excess of the maximum amount of
interest permitted to be charged by the Payee to the Issuer under applicable
state or federal law from time to time in effect, and the Issuer shall never be
required to pay interest in excess of such maximum amount. If, for any reason
interest is paid hereon in excess of such maximum amount, then promptly upon any
determination that such excess has been paid the Payee will, at its option,
either refund such excess to the Issuer or apply such excess to the principal
owing hereunder.

 

12. Restriction on Transfer of Note. THE PAYEE SHALL NOT SELL, PLEDGE OR
OTHERWISE TRANSFER THIS NOTE OR ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER
WITHOUT THE PRIOR WRITTEN CONSENT OF THE ISSUER WHICH CONSENT MAY BE GIVEN ONLY
UPON A PRIOR APPROVAL BY THE HOLDERS OF MORE THAN 50% OF THE THEN OUTSTANDING
EQUITY INTERESTS IN THE ISSUER EXCLUDING ANY EQUITY INTERESTS HELD DIRECTLY OR
INDIRECTLY BY THE PAYEE, DANIEL M. BRYANT OR G. ALLAN BRYANT, OR ANY OF THEIR
RESPECTIVE AFFILIATES.

 

13. Notices. Any notice required or permitted by this Note shall be in writing
and shall be deemed sufficient upon delivery, when delivered personally or by a
nationally-recognized delivery service (such as Federal Express or UPS) to the
respective address set forth on the signature page hereof, or to such other
address as any party may specify in writing from time to time to the other
party.

 

14. Time of the Essence. Time is of the essence with respect to this Note and in
the performance by the Issuer of its Obligations under this Note.

 

15. Entire Agreement. This Note constitutes the entire agreement of the parties
relative to its subject matter, and shall not be waived, modified or
supplemented, in whole or in part, except in a writing signed by the parties. If
any provision of this Note is held invalid or unenforceable by any court of
competent jurisdiction, the remaining provisions shall continue in full force
and effect.

 

6

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Issuer has executed this Note as of the date first above
written.

 

MADISON RIVER TELEPHONE

COMPANY, LLC

By:

 

/s/ J. Stephen Vanderwoude

   

Name:

 

J. Stephen Vanderwoude

   

Title:

 

Chief Executive Officer

Notice Address:

Madison River Telephone Company, LLC

103 South Fifth Street

Mebane, North Carolina 27302

Attention: Chief Financial Officer

Telecopier: (919) 563-4993

with a copy to:

Madison River Telephone Company, LLC

103 South Fifth Street

Mebane, North Carolina 27302

Attention: General Counsel

Telecopier: (919) 563-4993

 

--------------------------------------------------------------------------------

AGREED AND ACCEPTED:

THE MICHAEL E. BRYANT LIFE TRUST

By:

 

/s/ Daniel M. Bryant

   

Co-Trustee for Michael to E. Bryant

By:

 

/s/ G. Allan Bryant

   

Co-Trustee for Michael to E. Bryant

By:

 

/s/ Thomas J. Ratcliffe Jr.

   

Co-Trustee for Michael to E. Bryant

 

Notice Address:

The Michael E. Bryant Life Trust

c/o Mr. A. Kimbrough Davis

Kilpatrick Stockton LLP

1100 Peachtree Street

Suite 2800

Atlanta, GA 30309-4530

c/o Thomas J. Ratcliffe, Jr., Esq.

Ratcliffe, Smith & Grinstead, P.C.

103 North Main Street

P.O. Box 467

Hinesville, GA 31310-3125

c/o Larry R. Golden, CPA

Golden Associates

769 E. Oglethorpe Highway

P.O. Box 967

Hinesville, GA 31310-0967

 

--------------------------------------------------------------------------------

 

ANNEX A

 

AMORTIZATION SCHEDULE

 

Payment Date

--------------------------------------------------------------------------------

   Beginning
Balance

--------------------------------------------------------------------------------

   Interest
Accrued

--------------------------------------------------------------------------------

   Amount of
Payment
(Principal)

--------------------------------------------------------------------------------

   Amount of
Payment
(Interest)

--------------------------------------------------------------------------------

   Ending
Balance

--------------------------------------------------------------------------------

April 1, 2002

   0.00    0.00    0.00    0.00    6,666,666.67

December 31, 2002

   6,666,666.67    421,668.46    0.00    0.00    7,088,335.13

December 31, 2003

   7,088,335.13    597,240.05    607,255.81    597,240.05    6,481,079.32

December 31, 2004

   6,481,079.32    546,074.65    658,421.20    546,074.65    5,822,658.12

December 31, 2005

   5,822,658.12    490,598.22    713,897.63    490,598.22    5,108,760.48

December 31, 2006

   5,108,760.48    430,447.53    774,048.32    430,447.53    4,334,712.16

December 31, 2007

   4,334,712.16    365,228.74    839,264.11    365,228.74    3,495,445.05

December 31, 2008

   3,495,445.05    294,514.82    1,359,981.03    294,514.82    2,135,464.02

December 31, 2009

   2,135,464.02    179,927.25    1,024,568.61    179,927.25    1,110,895.41

December 31, 2010

   1,110,895.41    93,600.43    1,110,895.41    93,600.43    0.00

 

--------------------------------------------------------------------------------

Exhibit D

 

 

JOINDER

 

This is a JOINDER (this “Joinder”) dated as of April 10, 2002 to (i) the Amended
and Restated Limited Liability Company Agreement, as amended, of Madison River
Telephone Company, LLC (“MRTC”), by and among the original members thereto and
each person subsequently admitted as a member of MRTC (the “MRTC Operating
Agreement”), (ii) the Securityholders’ Agreement, made as of April 24, 1997,
between MRTC and each of the securityholders from time to time a party thereto
(the “Securityholders’ Agreement”), and (iii) the Registration Rights Agreement,
made as of April 24, 1997, between MRTC and each of the persons from time to
time a party thereto (the “Registration Rights Agreement”) by and among MRTC,
Daniel M. Bryant (“D. Bryant”), G. Allan Bryant (“G. Bryant”) and The Michael E.
Bryant Life Trust (the “Trust,” and together with D. Bryant and G. Bryant the
“Bryant Shareholders”). Capitalized terms used but not defined herein shall have
the meanings set forth in the MRTC Operating Agreement.

 

WHEREAS, the Bryant Shareholders have entered into that certain Exchange
Agreement, dated as of April 5, 2002, pursuant to which, concurrently with the
execution of this Joinder, the Bryant Shareholders each transferred (i) all of
his/its Series B Stock and 40 shares each of his/its Series A Stock of Coastal
Communications, Inc. (“CCI”) to MRTC for (x) those certain Term Note Nos. 1, 2
and 3 issued by MRTC (collectively, the “Term Notes”), each in the principal
amount of $6,666,666.67 and (y) 18 million Class A Member Units in MRTC issued
at $1 per unit and (ii) 10 shares of Series A Stock to CCI for $333,333.33 each;

 

WHEREAS, in connection with the issuance of the 6 million Class A Member Units
in MRTC to each of the Bryant Shareholders, each of the Bryant Shareholders
desires to become a member of MRTC, with all of the rights and obligations
provided in the MRTC Operating Agreement, and a patty to the Securityholders’
Agreement and the Registration Rights Agreement with, in each case, all of the
rights and obligations provided thereunder;

 

WHEREAS, the Board of Member Representatives (the “Board”) of MRTC has approved
the admission of the Bryant Shareholders as Additional Members (as defined in
the MRTC Operating Agreement) with Required Board Approval (as defined in the
MRTC Operating Agreement) and has acknowledged that the conditions of Section
10.2 of the MRTC Operating Agreement have been satisfied;

 

WHEREAS, the Board has approved the admission of the Bryant Shareholders as
parties to the Securityholders’ Agreement and the Registration Rights Agreement
with Required Board Approval; and

 

WHEREAS, each of the Bryant Shareholders agrees to become a party to the MRTC
Operating Agreement, the Securityholders’ Agreement and the Registration Rights
Agreement in accordance with the terms hereof.

 

--------------------------------------------------------------------------------

NOW THEREFORE, in consideration of the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Joinder hereby agree as follows:

 

1. Agreement to be Bound. Upon execution of this Joinder:

 

(a) each of the Bryant Shareholders shall become a party to the MRTC Operating
Agreement and shall be fully hound by, and subject to, all of the covenants,
terms and conditions of the MRTC Operating Agreement (including, without
limitation, the power of attorney granted in Section 14.1 of the MRTC Operating
Agreement) as though an original party thereto and as an Additional Member
thereunder; provided, however, that none of the Bryant Shareholders shall be
required to make contributions to the capital of MRTC pursuant to Section 3.1
(b) of the MRTC Operating Agreement or, consequently, have the right, pursuant
to Section 14.2 of the MRTC Operating Agreement, to purchase a Defaulting
Unitholder’s Units; and further provided, that each of the Bryant Shareholders
shall be deemed to have contributed $6 million in cash for Class A units issued
pursuant to the Exchange Agreement for purposes of determining distributions and
IRRs under Section 4.1 of the MRTC Operating Agreement; and

 

(b) each of the Bryant Shareholders shall become a party to the Securityholders’
Agreement and shall be fully bound by, and subject to, all of the covenants,
terms and conditions of the Securityholders’ Agreement (including, without
limitation, being deemed to have made the representations and warranties set
forth in Section 10 of the Securityholders’ Agreement) as an additional party
thereto and as a holder of Class A Securityholder Units thereunder. In addition,
each of the Bryant Shareholders shall be treated the same as a Preemptive Rights
Member pursuant to Section 6 of the Securityholders’ Agreement provided that
they shall not be entitled to exercise such rights if each of the Preemptive
Rights Members waives, or fails to exercise, its rights to purchase Units
pursuant thereto; and

 

(c) each of the Bryant Shareholders shall become a patty to the Registration
Rights Agreement and shall be fully bound by, and subject to, all of the
covenants, terms and conditions of the Registration Rights Agreement as an
Additional Party thereto.

 

2. Board Observation Rights. Subject to the application of the limitations set
forth in Section 5.5(d) of the MRTC Operating Agreement, the Bryant Shareholders
shall be entitled to send two representatives, who shall be reasonably
acceptable to MRTC, to observe meetings of the Board of MRTC; provided that the
representatives will not have any right to vote at the meeting; provided further
that the representatives shall be bound by all confidentiality duties that apply
to directors at such meetings, including, without limitation, the
confidentiality provisions in Section 6.6(b) of the MRTC Operating Agreement.

 

2

--------------------------------------------------------------------------------

3. Amendment to Securityholders Agreement. MRTC hereby represents and warrants
that:

 

(a) a new third sentence of Section 7(a) of the Securityholders Agreement has
been added as follows:

 

Further, if the Institutional Investor providing written notice pursuant to the
first sentence of this Section 7(a) is the MDCP Group or the Goldman Group,
then, within thirty days after the receipt of such written notice, each Bryant
Shareholder may, by delivering written notice to the Board and all other
Securityholders, cause the Company to Purchase on the Put Date each Class A
Securityholder Unit owned by such Bryant Shareholder at the Put Price.

 

(b) the definition of Bryant Shareholders has been added to Section 8 of the
Securityholders Agreement as follows:

 

“Bryant Shareholders” means Daniel M. Bryant, G. Allan Bryant and The Michael E.
Bryant Life Trust, collectively as a group.

 

4. Assignment. This Joinder and all of the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but except as otherwise provided for or
permitted herein neither this Joinder nor any of the rights, interests or
obligations hereunder shall be assigned by any party hereto without the prior
written consent of the other party.

 

5. Governing Law. This Joinder and the legal relations among the parties hereto
shall be governed by and construed in accordance with the laws of the State of
Delaware, without regard to its conflicts of law doctrine.

 

6. Counterparts. This Joinder may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, MRTC and the Bryant Shareholders have executed this Joinder
effective as of the date and year first above written.

 

MADISON RIVER TELEPHONE COMPANY, LLC

By:

 

/s/ J. Stephen Vanderwoude

Name:

 

J. Stephen Vanderwoude

Title:

 

CEO

/s/ Daniel M. Bryant

/s/ G. Allan Bryant

THE MICHAEL E. BRYANT LIFE TRUST

By:

 

Daniel M. Bryant

   

Co-Trustee for Michael E. Bryant

By:

 

G. Allan Bryant

   

Co-Trustee for Michael E. Bryant

By:

 

Thomas J. Ratcliffe Jr.

   

Co-Trustee for Michael E. Bryant

 

4

--------------------------------------------------------------------------------

Exhibit E

 

 

AMENDMENT NO. 1 TO

SHAREHOLDERS AGREEMENT

COASTAL COMMUNICATIONS, INC.

 

THIS AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT (this “Amendment”) entered into
effective this 10th day of April, 2002, by and among Coastal Communications,
Inc., a Delaware corporation (the “Company”), and the persons indicated on
Exhibit A hereto (individually a “Shareholder”) and collectively the
“Shareholders”). Capitalized terms used but not defined herein shall have the
meanings set forth in the Shareholders Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Company and the Shareholders, other than Madison River Telephone
Company, LLC (“MRTC”), have entered into that certain Shareholders Agreement,
dated as of March 30, 2000 (the “Shareholders Agreement”);

 

WHEREAS, the Shareholders (other than Madison River LTD Funding Corp.) have
entered into that certain Exchange Agreement, dated as of April 5, 2002,
pursuant to which, concurrently with the execution of this Amendment, Daniel M.
Bryant (“D. Bryant”), G. Allan Bryant (“G. Bryant”) and The Michael E. Bryant
Life Trust (the “Trust”, and together with D. Bryant and G. Bryant, the “Bryant
Shareholders”) each transferred (i) all of his/its Series B Stock and 40 shares
each of his/its Series A Stock to MRTC for (x) those certain Term Note Nos. 1, 2
and 3 issued by MRTC, each in the principal amount of $6,666,666.67 and (y) 18
million Class A Member Units in MRTC issued at $1 per unit and (ii) 10 shares of
Series A Stock to CCI for $333,333.33 each;

 

WHEREAS, the Shareholders and the Company wish to amend the Shareholders
Agreement;

 

NOW, THEREFORE, in consideration of the premises, the mutual promises of the
parties hereto and the mutual benefits to be gained by the performance thereof,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company, for its successors and permitted assigns,
and the Shareholders, for themselves, their heirs, personal representatives and
permitted assigns, hereby agree as follows:

 

1. Exhibit A to the Shareholders Agreement is hereby amended and restated in its
entirety as set forth on Exhibit A to this Amendment to reflect the issued and
outstanding shares of Stock owned by the Shareholders as of the date of this
Amendment.

 

2. Section 1.23 of the Shareholders Agreement is amended and restated in its
entirety as follows:

 

1.23 [Reserved]

 

--------------------------------------------------------------------------------

3. Section 3.06 of the Shareholders Agreement is amended and restated in its
entirety as follows:

 

3.06 Series A Call Right. The Company may at any time require the Bryant
Shareholders to sell their Series A Stock to the Company, in whole or in part,
in redemption of such Series A Stock (a “Series A Call Right”) by the Company’s
making payment to the Bryant Shareholders in the amount of $33,333.33 per share
of Series A Stock so redeemed. A Series A Call Right shall be exercised by the
Company’s giving written notice thereof to the Bryant Shareholders in accordance
with the provisions of Section 6.02 and by making payment for such Series A
Stock within 10 days of providing such notice.

 

4. Section 3.07 of the Shareholders Agreement is hereby amended and restated in
its entirety as follows:

 

3.07 Series A Put Right.

 

(a) The Bryant Shareholders may require the Company to purchase their Series A
Stock in accordance with the schedule set forth on Exhibit C (each, a “Series A
Put Right”). A Series A Put Right shall be exercised by the Bryant Shareholders
giving written notice thereof to the Company, with a copy to the Series C
Shareholder, in accordance with the provisions of Section 6.02. Upon the
exercise of a Series A Put Right, the Company shall redeem the applicable Series
A Stock by making payment to the Bryant Shareholders in the amount of $33,333.33
per share of Series A Stock so redeemed within 10 days of receiving the written
notice in connection therewith.

 

(b) A Series A Put Right may be exercised during a valid exercise period set
forth in Exhibit C only by the majority consent of the Bryant Shareholders, and
the exercise of a Series A Put Right under this Section 3.07(b) shall be binding
on all Bryant Shareholders and permitted transferees under Section 3.01 of the
Shareholders Agreement.

 

5. Section 3.08 of the Shareholders Agreement is hereby amended and restated in
its entirety as follows:

 

3.08 [Reserved]

 

6. Section 6.17 of the Shareholders Agreement is hereby amended and restated in
its entirety as follows:

 

6.17 [Reserved]

 

2

--------------------------------------------------------------------------------

7. Exhibit B of the Shareholders Agreement is hereby deleted in its entirety.

 

8. This Amendment shall be subject to and shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of law thereof.

 

9. This Amendment may be executed in counterparts, each of which shall be deemed
an original hereof but all of which together constitute one and the same
instrument.

 

10. Except as expressly set forth herein, the Amendment shall not by implication
or otherwise alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Shareholders
Agreement, all of which are ratified and affirmed in all respects and shall
continue in full force and effect.

 

[The next page is the signature page.]

 

3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Company and the Shareholders have executed this
Amendment effective as of the date and year first above written.

 

COMPANY:

COASTAL COMMUNICATIONS, INC.

By:  

/s/ J. Stephen Vanderwoude

Name:

 

J. Stephen Vanderwoude

Title:

 

CEO

SHAREHOLDERS:

MADISON RIVER LTD FUNDING CORP

By:  

/s/ J. Stephen Vanderwoude

Name:

 

J. Stephen Vanderwoude

Title:

 

CEO

MADISON RIVER TELEPHONE COMPANY, LLC

By:  

/s/ J. Stephen Vanderwoude

Name:

 

J. Stephen Vanderwoude

Title:

 

CEO

/s/ Daniel M. Bryant

 

(SEAL)

Daniel M. Bryant

   

/s/ G. Allan Bryant

   

G. Allan Bryant

   

THE MICHAEL E. BRYANT LIFE TRUST

By:  

/s/ Daniel M. Bryant

   

Co-Trustee for Michael E. Bryant

 

4

--------------------------------------------------------------------------------

By:

 

/s/ G. Allan Bryant, Co-Trustee for M. E. B.

   

Co-Trustee for Michael E. Bryant

By:

 

Thomas J. Ratcliffe, Jr.

   

Co-Trustee for Michael E. Bryant

 

5

--------------------------------------------------------------------------------

 

Exhibit A

 

SHAREHOLDERS AGREEMENT

 

ISSUED AND OUTSTANDING CAPITAL STOCK

 

AS OF

 

April 10, 2002

 

Name of Shareholder

--------------------------------------------------------------------------------

  

Address

--------------------------------------------------------------------------------

   Number of Shares

--------------------------------------------------------------------------------

   Series of Stock

--------------------------------------------------------------------------------

Daniel M. Bryant

  

P.O. Box 280

Hinesville, Georgia 31310

   50 Shares    Series A

G. Allan Bryant

  

P.O. Box 899

Allenhurst, Georgia 31301

   50 Shares    Series A

The Michael E. Bryant

Life Trust

  

C/o Thomas J. Ratcliffe, Jr.

P.O. Box 469

Hinesville, Georgia 31310

   50 Shares    Series A

Madison River Capital, LLC

  

103 South Fifth Street

Mebane, NC 27302

   2,700 Shares    Series C

Madison River Telephone Company, LLC

  

103 South Fifth Street

Mebane, NC 27302

   120 Shares
300 Shares    Series A
Series B

Coastal Communications, Inc.

  

103 South Fifth Street

Mebane, NC 27302

   30 Shares
Redeemed    Series A

 

--------------------------------------------------------------------------------

 

Exhibit C

 

SERIES A PUT RIGHT SCHEDULE

 

Name of Shareholder

--------------------------------------------------------------------------------

  

Number of Shares of Series A Stock

--------------------------------------------------------------------------------

Daniel M. Bryant

   10 shares - May 31, 2003      10 shares - June 30, 2004      10 shares - July
31, 2005      10 shares - August 31, 2006      10 shares - September 30, 2007

G. Allan Bryant

   10 shares - May 31, 2003      10 shares - June 30, 2004      10 shares - July
31, 2005      10 shares - August 31, 2006      10 shares - September 30, 2007

The Michael E. Bryant Life Trust

   10 shares - May 31, 2003      10 shares - June 30, 2004      10 shares - July
3 1, 2005      10 shares - August 31, 2006      10 shares - September 30, 2007