Document:

Exhibit 4.1

 

AMENDMENT TO RIGHTS AGREEMENT

This AMENDMENT (this “Amendment”)
is being entered into as of June 27, 2006 between Hector Communications
Corporation, a Minnesota corporation (the “Company”), and Wells Fargo Bank,
N.A. a National Association (formerly Norwest Bank Minnesota, N.A., a National
Association) as rights agent (the “Rights Agent”).

The Company and Rights
Agent are parties to a Rights Agreement dated as of July 27, 1999 (the “Rights
Agreement”). Pursuant to Section 27 of the Rights Agreement, the Company
and the Rights Agent may, prior to the Distribution Date, amend any provision
of the Rights Agreement, which the Board of Directors deems desirable, without
the approval of any holders of Rights Certificates.

Effective as of the date
hereof the Company has entered into an Agreement and Plan of Merger (the “Merger
Agreement”) with Blue Earth Valley Communications, Inc., Arvig Enterprises, Inc.
and New Ulm Telecom, Inc. (collectively, “Parent”) and with Hector
Acquisition Corp., a Minnesota corporation and directly owned by Parent (“Newco”),
with respect to the merger of Newco into the Company.

The Board of Directors of
the Company has determined that, in connection with entering into the Merger
Agreement, it is necessary and appropriate to amend the Rights Agreement as set
forth in this Amendment.

Unless otherwise defined
herein, capitalized terms shall have the meanings set forth in the Rights
Agreement.

NOW THEREFORE, in
consideration of the premises and the mutual agreement herein set forth, the
parties hereby agree as follows:

1.            AMENDMENT OF SECTION 1(a).
The definition of Acquiring Person in Section 1(a) of the Rights
Agreement is hereby amended to add the following sentence at the end thereof:

“Notwithstanding anything in this Rights Agreement
to the contrary, neither Parent nor any of its existing or future Affiliates or
Associates, including, but not limited to Newco, shall be deemed to be an
Acquiring Person by virtue of (i) the approval, execution or delivery of
the Merger Agreement, (ii) the announcement, commencement or acceptance
and payment for shares in any tender offer Newco may conduct that is consistent
with terms of the Merger Agreement, (iii) the consummation of the Merger,
or (iv) the consummation of the other transactions contemplated by the
Merger Agreement.”

2.             AMENDMENT OF SECTION 1(n).
The definition of Triggering Event in Section 1(n) of the Rights
Agreement is hereby amended to add the following proviso at the end thereof:

“; provided, however,
that no Triggering Event shall result by virtue of (i) the approval,
execution or delivery of the Merger Agreement, (ii) the announcement,
commencement or

 

 

acceptance and payment for shares in any tender offer
Newco may conduct that is consistent with terms of the Merger Agreemen, (iii) the
consummation of the Merger or (iv) the consummation of the other
transactions contemplated by the Merger Agreement, the Shareholders Agreement.”

3.             AMENDMENT OF SECTION 1.
Section 1 of the Rights Agreement is hereby further amended to add the
following subparagraphs at the end thereof:

(p)         “Effective Time of the
Merger” shall have the meaning set forth in the Merger Agreement.

(q)         “Merger” shall have the
meaning set forth in the Merger Agreement.

(r)             “Merger Agreement”
shall have the meaning set forth in Section 35 hereof.

(s)          “Newco” shall have the
meaning set forth in Section 35 hereof.

4.             AMENDMENT OF SECTION 3(a). Section 3(a) of the Rights
Agreement is hereby amended to add the following sentence at the end thereof:

“Notwithstanding
anything in this Rights Agreement to the contrary, a Distribution Date shall
not be deemed to have occurred by virtue of (i) the approval, execution or
delivery of the Merger Agreement, (ii) the announcement, commencement or
acceptance and payment for shares in any tender offer Newco may
conduct that is consistent with terms of the Merger Agreement, (iii) the consummation of the Merger or (iv) the
consummation of the other transactions contemplated by the Merger Agreement.”

5.             AMENDMENT OF SECTION 7(a). Section 7(a) of the Rights
Agreement is hereby amended and restated to read in its entirety as follows:

“(a)  The
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including without limitation, the
restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and
Section 23(a) hereof) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form of
election to exercise on the reverse side thereof duly executed, to the Rights
Agent at the office or offices of the Rights Agent designated for such purpose,
together with payment of the Purchase Price for each one one-hundredth of a
share of Preferred Stock (or, if applicable, such other number of shares or
other securities) as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on July 27, 2009 (the “Final
Expiration Date”), or (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof, or (iii) the Effective Time of the
Merger (such earliest time being herein referred to as the “Expiration Date”).
Any Person who prior to the Distribution Date becomes a record holder of shares
of Common Stock may exercise all of the rights of a registered holder of a
Rights Certificate with respect to the Rights associated with such shares of
Common Stock in accordance with and subject to the provisions of this
Agreement, including the provisions of Section 7(e) hereof, as of the
date such Person becomes a record holder of shares of Common Stock. Notwithstanding
anything in this Rights Agreement to the contrary, none of (i) the
approval, execution or delivery of the Merger

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Agreement, (ii) the
announcement, commencement or acceptance and payment for shares in
any tender offer Newco may conduct that is consistent with terms of the Merger
Agreement, (iii) the consummation of the
Merger or (iv) the consummation of the other transactions contemplated by
the Merger Agreement shall be deemed to be events that cause the Rights to
become exercisable pursuant to the provisions of this Section 7 or
otherwise.”

6.             AMENDMENT OF SECTION 11. Section 11 of the Rights Agreement is
amended to add the following sentence after the first sentence of said Section:

“Notwithstanding
anything in this Rights Agreement to the contrary, none of (i) the
approval, execution or delivery of the Merger Agreement, (ii) the
announcement, commencement or acceptance and payment for shares in
any tender offer Newco may conduct that is consistent with terms of the Merger
Agreement, (iii) the consummation of the
Merger or (iv) the consummation of the other transactions contemplated by
the Merger Agreement shall be deemed to be events of the type described in this
Section 11 or to cause the Rights to be adjusted or to become exercisable
in accordance with this Section 11.”

7.             AMENDMENT OF SECTION 13. Section 13 of the Rights Agreement is
amended to add the following sentence as the first sentence of said Section:

“Notwithstanding anything
in this Rights Agreement to the contrary, none of (i) the approval,
execution or delivery of the Merger Agreement, (ii) the announcement,
commencement or acceptance and payment for shares in any tender
offer Newco may conduct that is consistent with terms of the Merger Agreement, (iii) the consummation of the Merger or (iv) the
consummation of the other transactions contemplated by the Merger Agreement
shall be deemed to be events of the type described in this Section 13 or
to cause the Rights to be adjusted or to become exercisable in accordance with
this Section 13.”

8.             ADDITION OF SECTION 35. The Rights Agreement is hereby modified,
supplemented and amended to add the following new Section 35:

“Section 35. Merger
With Blue Earth Valley Communications, Inc., Arvig
Enterprises, Inc. and New Ulm Telecom, Inc. Blue Earth Valley Communications, Inc., Arvig Enterprises, Inc., and New Ulm Telecom, Inc. (collectively, “Parent”),
Hector Acquisition Corp., a Minnesota corporation and a wholly owned subsidiary
of Parent (“Newco”), and the Company have entered into an Agreement and Plan of
Merger, dated as of June 27, 2006 (such agreement, as it may be amended
from time to time, the “Merger Agreement”), pursuant to which Newco shall merge
with and into the Company. Pursuant to the Merger Agreement, Newco has the
right, under specified terms and conditions, to commence a tender offer to the
Company’s shareholders to purchase Common Stock and Rights. Notwithstanding
anything in this Rights Agreement to the contrary, if the Merger Agreement
shall be terminated for any reason, then (a) the last sentence of Section 1(a) hereof
shall be deemed repealed and deleted without any further action on the part of
the Company or the Rights Agent and (b) the proviso at the end of Section 1(n) hereof
shall be deemed repealed and deleted without any further action on the part of
the Company or the Rights Agent.”

 3
 

 

 

9.             EFFECTIVENESS. This Amendment shall be deemed effective as of the date
first written above, as if executed on such date. Except as amended hereby, the
Rights Agreement shall remain in full force and effect and shall be otherwise
unaffected hereby.

10.           MISCELLANEOUS. This Amendment shall be deemed to be a contract made under
the laws of the State of Minnesota and for all purposes shall be governed by
and construed in accordance with the laws of the State of Minnesota applicable
to contracts to be made and performed entirely within the State of Minnesota
without giving effect to the principles of conflict of laws thereof. This
Amendment may be executed in any number of counterparts, each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument. If any
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, illegal or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.

EXECUTED
as of the date first set forth above.

	
  Attest:

  	
   

  	
  HECTOR COMMUNICATIONS CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  Its

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
  RIGHTS AGENT: WELLS FARGO BANK, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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 4Exhibit 10.1

VOTING AGREEMENT

THIS VOTING AGREEMENT, is made and entered into as of
this 27th day of June 2006 (the “Agreement”), by
and among Hector Acquisition Corp., a Minnesota corporation (“Newco”); Hector Communications Corporation, a Minnesota
corporation (the “Company”); and Curtis A. Sampson
(the “Shareholder”).

RECITALS

A.    Contemporaneously
with the execution and delivery of this Agreement, Newco, the Company and
others are entering into a Merger Agreement, dated as of the date hereof (as
amended from time to time pursuant to the terms thereof, the “Merger Agreement”), which provides for, among other things,
a merger of the Company with Newco (the “Merger”).

B.     As of the
date hereof, the Shareholder beneficially owns the number of Shares (“Shares”) of the Company set forth opposite
such Shareholder’s name on Schedule I
hereto.

C.     In
connection with the Merger Agreement, the Shareholder has agreed to grant Newco
a proxy to vote a portion of the Shares in favor of the Merger.

D.     As a
condition to its willingness to enter into the Merger Agreement, Newco has
required that the Shareholder enter into this Agreement.

E.     In order
to induce Newco to enter into the Merger Agreement, the Shareholder desires to
enter into this Agreement.

NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements herein contained, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:

ARTICLE I

VOTING AGREEMENT

1.1   Voting
of Shares.   From the
date hereof until the termination of this Agreement, at any meeting of the
shareholders of the Company, however called, or at any adjournment,
postponement or continuation thereof (including, without limitation, each
annual or special meeting of the shareholders) and in any action by consent of
the shareholders of the Company, the shareholder shall vote the Shares (i) in
favor of the Merger and the adoption and approval of the Merger Agreement
(together with any amendment to the Merger Agreement which does not reduce the
aggregate consideration to be received by the shareholders of the Company, does
not materially increase the liabilities of the shareholders of the Company,
taken as a whole, or is not otherwise materially adverse to the shareholders of
the Company, taken as a whole) and all transactions contemplated thereby, (ii) against
any Competing Transaction and against any proposal for action or agreement that
would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement, any
change in the Board of Directors of the Company, or any change in the articles
of incorporation, bylaws or current certificates of designations (the “Charter 

 

 

Documents”) 
which in the case of each of the matters referred to in this clause (ii) could
reasonably be expected to impede, interfere with, delay, postpone or materially
adversely affect the Company, the transactions contemplated by the Merger
Agreement or the likelihood of such transactions being consummated, and (iii) in
favor of any other matter necessary for consummation of the transactions
contemplated by the Merger Agreement and related agreements, including, without
limitation, any further amendment, waiver or modification of the Charter
Documents in connection therewith, which is considered at any such meeting of
Shareholders or in such consent, and in connection therewith to execute any
documents which are necessary in order to effectuate the foregoing, including,
without limitation, the ability for Newco or its nominees to vote such Shares
directly.

1.2   Proxy.   The
Shareholder hereby agrees to deliver to Newco a duly executed proxy in the form
attached hereto as Exhibit A concurrently with the execution and
delivery of this Agreement (the “Proxy”), such Proxy to cover 277,448 of the
Shares in respect of which Shareholder is entitled to (i) vote at each
meeting of the Shareholders of the Company or at any adjournment, postponement
or continuation thereof (including, without limitation, each annual or special
meeting of the Shareholders or any action by written consent in lieu of a
meeting) in favor of (a) the Merger and the adoption and approval of the
Merger Agreement and all transactions contemplated thereby and/or (b) any
other matter necessary for consummation of the transactions contemplated by the
Merger Agreement and related agreements, including, without limitation, any
further amendment, wavier or modification of the Charter Documents in
connection therewith, and (ii) demand that the Secretary or any other
appropriate officer of the Company call a special meeting of the shareholders
of the Company for the purpose of considering the Merger, the Merger Agreement
and all other transactions contemplated thereby. The Shareholder hereby revokes
any and all prior proxies or powers of attorney given by such Shareholder with
respect to the Shares. The Shareholder represents that any proxy heretofore
given by it in respect of such Shares is not irrevocable. The Proxy shall
automatically terminate and be of no further force or effect upon any
termination of this Agreement.

1.3   No Proxies for or Transfers of
Shares.   Except as contemplated by the terms
of this Agreement, from the date hereof until the termination of this
Agreement, the Shareholder hereby agrees that the Shareholder shall not,
without the prior written consent of Newco, which may be withheld in the sole
discretion of Newco, directly or indirectly, (i) grant any proxies or
enter into any voting trust or other agreement, arrangement or understanding
with respect to the voting of the Shares or any portion thereof, other than a
revocable proxy causing shares held in street name to be voted for the Merger
and the transactions to be consummated by the Merger Agreement, (ii) sell,
assign, transfer, encumber, pledge or otherwise dispose of (including, without
limitation, by way of merger, consolidation, distribution, dissolution,
liquidation, operation of law or otherwise 
and, in the case of an individual, by way of testamentary disposition,
interspousal disposition pursuant to a domestic relations proceeding or
otherwise), or enter into any contract, option or other agreement, arrangement
or understanding with respect to the direct or indirect sale, assignment,
transfer, encumbrance, pledge or other disposition of, any of the Shares or any
portion thereof (except in connection with the Shareholder’s financing or
refinancing transactions), or (iii) otherwise commit any act or enter into
any agreement or arrangement with any person or entity limiting or affecting
the Shareholder’s legal power, authority or right to vote its Shares in favor
of the adoption of the Merger Agreement. The Shareholder hereby agrees it shall
not seek or solicit any such sale, 

 

 

assignment, transfer, encumbrance, pledge or other
disposition or any such contract, option or other agreement, arrangement or
understanding (except in connection with the Shareholder’s financing or
refinancing transactions). Notwithstanding any other provision of this Section 1.3,
the Shareholder may sell or otherwise assign, with or without consideration, an
unlimited amount of the Shares to any direct or indirect wholly owned
Subsidiary or to any Person that controls 100% of its outstanding voting
equity, provided that each such transferee or
assignee, prior to the completion of the sale, transfer or assignment shall
have executed and delivered to Newco documents assuming the obligations of the
Shareholder under this Agreement with respect to the transferred Shares, such
documents to be reasonably satisfactory to Newco. With respect to shares held
in street name, at the request of Newco, Shareholder shall take all steps
necessary to vote such Shares in accordance with the terms of this Agreement
and shall provide Newco written evidence of such action, and/or shall take all
steps and provide all documentation necessary for Newco to vote the Shares at
the shareholders meeting approving the Merger Agreement.

1.4   Stop Transfer.   During
the term of this Agreement, the Shareholder shall not request that the Company
register the transfer (book-entry or otherwise) of any Shares or any portion
thereof. The Company agrees that it shall not recognize or record any transfer
of Shares or any portion thereof attempted in violation of this Agreement.

1.5   Additional Documents.   The
Shareholder hereby covenants and agrees to execute and deliver any and all
additional documents necessary or desirable, in the reasonable opinion of
Newco, to carry out the purpose and intent of this Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS

The Shareholder hereby represents and warrants to Newco
as follows:

2.1   Due Authorization, Etc.   The
Shareholder has all requisite power and authority and the legal capacity to
execute, deliver and perform this Agreement, to appoint Newco as its proxy for
the Shares and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement, the appointment of Newco as such
Shareholder’s proxy for the Shares and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Shareholder. This Agreement has been duly executed and delivered by
or on behalf of the Shareholder and constitutes a legal, valid and binding
obligation of the Shareholder, enforceable against the Shareholder in
accordance with its terms, except that such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to creditors’ rights generally, and is subject to general principles of equity.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which such Shareholder is trustee whose consent is
required for the execution and delivery of this Agreement or the consummation
by such Shareholder of the transactions contemplated hereby.

2.2   No Conflicts; Required Filings and
Consents.   (a) The execution and
delivery of this Agreement by the Shareholder does not, and the performance of
this Agreement by the Shareholder will not, (i) conflict with or violate
any law, rule, regulation, or order applicable
to 

 

 

the Shareholder or
by which the Shareholder or any of the Shareholder’s properties is bound or
affected, (ii) violate any provision
of the Shareholder’s organizational documents, or (iii) result in
any material breach of or constitute a material default (or an event that with
notice or lapse of time or both would become a material default) under, or give
to others any rights of termination, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any assets of the Shareholder,
including, without limitation, the Shares, pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Shareholder is a party or by which
the Shareholder or any of the Shareholder’s assets is bound or affected.

(b)    The
execution and delivery of this Agreement by the Shareholder does not, and the
performance of this Agreement by the Shareholder will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority (other than any necessary filing under the
Securities Exchange Act of 1934), domestic or foreign.

2.3   Valid Title.   The
Shareholder is the sole, true, lawful and beneficial owner of the Shares with
no restrictions on the Shareholder’s voting rights pertaining thereto. None of
the Shares are subject to any voting trust, proxies or other agreement or
arrangement with respect to the voting of the Shares. Such Shares constitute
all of the Shares of voting equity of the Company owned of record or
beneficially by the Shareholder. The Shareholder has sole voting power and sole
power to issue instructions with respect to the matters set forth in this
Agreement, sole power of disposition and sole power to agree to all of the
matters set forth in this Agreement, in each case with respect to the Shares
with no limitations, qualifications or restrictions on such rights, subject to
applicable securities laws and the terms of this Agreement and, with respect to
the power of disposition, subject to any financing arrangements of the
Shareholder.

ARTICLE III

MISCELLANEOUS

3.1   Definitions.   Capitalized
terms used but not otherwise defined in this Agreement have the respective
meanings ascribed to such terms in the Merger Agreement.

3.2   Fiduciary Duties.   Newco
acknowledges Shareholder is a member of the Company’s Board of Directors or an
officer of the Company and that such director or officer remains free to act
pursuant to fiduciary duties owed to the Company and other Shareholders in
compliance with the Merger Agreement and nothing herein shall be deemed to
restrict acting in accordance with such fiduciary duties.

3.3   Termination.   This
Agreement and each Proxy granted pursuant to Article I shall terminate
automatically and without any action of any of the parties hereto and be of no
further force and effect upon the earlier to occur of:  (i) the written mutual consent of the
parties hereto and (ii) the Expiration Date (as defined below). No such
termination of this Agreement shall relieve any party hereto from any liability
for any breach of this Agreement prior to termination or from any obligation
pursuant to a notice delivered on or before the date of such termination. As
used herein, the “Expiration Date” shall mean the
earlier to occur of (i) the 

 

Effective Time of the Merger and (ii) the
termination of the Merger Agreement according to its terms.

3.4   Certain Events; Successors.The   Shareholder
agrees that this Agreement and its obligations hereunder shall attach to the
Shares and shall be binding upon any person or entity to which legal or
beneficial ownership of such Shares shall pass, whether by operation of law or
otherwise. Notwithstanding any transfer of the Shares, the transferor shall
remain liable for the performance of all its obligations under this Agreement.

3.5   No Waiver.The   failure
of any party hereto to exercise any right, power, or remedy provided under this
Agreement or otherwise available in respect hereof at law or in equity, or to
insist upon compliance by any other party hereto with its obligations
hereunder, any custom or practice of the parties at variance with the terms
hereof shall not constitute a waiver by such party of its right to exercise any
such or other right, power or remedy or to demand such compliance.

3.6   Notice.   All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally, the day of transmission if a business day
or, if not, the next business day thereafter, if delivered by telecopier (with
confirmation of receipt), the next business day if delivered by an
internationally recognized overnight courier service, such as Federal Express,
or the third business day if mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):

(a)             if to Newco, to:

Blue Earth Valley Communications, Inc

123 West 7th

Blue Earth, MN 56013

Attn: Rob Hammond

Facsimile No.: (507) 526-4597

with a copy to:

Leonard, Street and Deinard PA

Suite 2300

150 South Fifth Street

Minneapolis, MN 55402

Attention:  Steven D. DeRuyter, Esq.

Telecopy: (612) 335-1657

(b)    If to the
Shareholder, to the address set forth next to the Shareholder’s name on Schedule
I hereto, with a copy to any Person specified on Schedule I hereto
and to Lindquist & Vennum, PLLP, 80 South Eighth Street, 4200 IDS,
Minneapolis, MN 55402, Attn: Richard A. Primuth, Esq., Facsimile No. (612)
371-3207.

 

 

3.7   Effect of Headings.   The
Article and Section headings contained in this Agreement are for
convenience only and shall not affect the construction or interpretation of
this Agreement.

3.8   Severability.   If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, then the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.

3.9   Entire Agreement.   This
Agreement (together with the Merger Agreement to the extent referenced herein)
and the Proxy contains the entire understanding of the parties in respect of
the subject matter hereof, and supersede all prior negotiations and understandings
between the parties with respect to such subject matter.

3.10   Assignment and Binding Effect.   Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any party hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties, and any such assignment
shall be void, except that Newco may assign, in its sole discretion, any or all
of its rights, interests and obligations hereunder to any direct or indirect
wholly owned subsidiary of Newco or to a successor corporation or other
successor entity in the event of a merger, acquisition, consolidation or other
transfer. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by the parties and their
respective successors and assigns.

3.11   Governing Law.   This
Agreement shall be governed by and construed in accordance with the laws of the
State of Minnesota without reference to such state’s principles of conflicts of
laws.

3.12   Amendment and Modification.This   Agreement
may not be modified, amended, altered or supplemented except by the execution
and delivery of a written agreement executed by the parties hereto.

3.13   Specific Performance; Injunctive
Relief.   The parties hereto acknowledge that
Newco will be irreparably harmed and that there will be no adequate remedy at
law for a violation of any of the covenants or agreements of the Shareholder
set forth herein. Therefore, it is agreed that, in addition to any other remedies
that may be available to Newco upon any such violation, Newco shall have the
right to enforce such covenants and agreements by specific performance,
injunctive relief or by any other means available to Newco at law or in equity
and the Shareholder hereby waives any and all defenses which could exist in its
favor in connection with such enforcement and waives any requirement for the
security or posting of any bond in connection with such enforcement.

 

3.14   Counterparts.   This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which shall constitute one and the same
agreement. This Agreement (or any counterpart hereof) may be delivered by a
party by facsimile, which facsimile shall be effectual as if the original
counterpart had been delivered.

3.15   Jurisdiction.   The parties hereto agree that any
legal proceeding instituted to enforce an arbitration award hereunder will be
brought in a state or federal court of competent jurisdiction (either state or
federal) located in Renville County, Minnesota and hereby submit to personal
jurisdiction therein and irrevocably waive any objection as to venue therein,
and further agree not to plead or claim in any such court that any such
proceeding has been brought in an inconvenient forum.

IN WITNESS WHEREOF, Newco, the Company and the
Shareholder have caused this Agreement to be executed as of the date first
written above.

	
  NEWCO:

  	
   

  	
  HECTOR ACQUISITION CORP.

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
  COMPANY:

  	
   

  	
  HECTOR COMMUNICATIONS
  CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
  SHAREHOLDER:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:   Curtis A. Sampson

  
					

 

 

SCHEDULE I

SHAREHOLDER INFORMATION

 

	
  Shareholder Name

  	
   

  	
  Number of

  Shares

  	
   

  	
  Number of

  Shares

  Covered by

  Proxy

  	
   

  
	
  Curtis A.
  Sampson

  	
   

  	
  277,448

  	
  (1)

  	
  277,448

  	
   

  

(1)             Excludes
up to 50,000 shares that will be gifted between the date hereof and the Closing
of the Merger.

 

Address:

50 Parkview Lane

Hector, MN  55342

Tel:  320-848-6530

Fax:  320-848-2702

 

EXHIBIT A

PROXY

TO VOTE SHARES OF

HECTOR COMMUNICATIONS CORPORATION

(a Minnesota corporation)

The undersigned shareholder of Hector Communications
Corporation, a Minnesota corporation (the “Company”),
hereby appoints Hector Acquisition Corp., a Minnesota corporation (“Newco”), or any designee of Newco, as the sole and exclusive
attorney and proxy of the undersigned, with full power of substitution and
resubstitution, to vote and exercise all voting and related rights (to the
fullest extent that the undersigned is entitled to do so) with respect to the
Shares of the Company set forth below (the “Shares”)
in accordance with the terms of this Proxy. Upon the undersigned’s execution of
this Proxy, any and all prior proxies given by the undersigned with respect to
any of the Shares are hereby revoked and the undersigned agrees not to grant
any subsequent proxies with respect to the Shares until after the termination
of the Voting Agreement (as hereinafter defined) other than a revocable proxy
causing shares held in street name to be voted for the Merger and the
transactions to be consummated by the Merger Agreement.

This Proxy is granted in consideration of Newco
entering into that certain Voting Agreement (the “Voting
Agreement”), dated as of even date herewith, by and among
Newco,  the Company and the undersigned,
and that certain Merger Agreement (the “Merger Agreement”),
dated as of June 23, 2006, by and among the Company, Newco and others,
which Merger Agreement provides for, among other things, a merger of Newco with
and into the Company (the “Merger”), and is given to secure the performance of
the duties and obligations of the Shareholder under the Voting Agreement. Notwithstanding
the foregoing, this Proxy shall terminate and be of no further force or effect
upon any termination of the Voting Agreement. Capitalized terms used but not
defined herein have the meanings set forth in the Voting Agreement.

The attorney and
proxy named above is hereby authorized and empowered by the undersigned, at any
time prior to the termination of the Voting Agreement, to act as the
undersigned’s attorney and proxy to vote the Shares, and to exercise all voting
and other rights of the undersigned with respect to the Shares, at every
annual, special or adjourned meeting of the Shareholders of the Company and in
every written consent in lieu of such meeting as follows:

(i)     in favor
of the Merger and approval of the Merger Agreement and adoption and approval of
the Merger Agreement (together with any amendment to the Merger Agreement which
does not reduce the aggregate consideration to be received by the Shareholders
of the Company, does not materially increase the liabilities of the
Shareholders of the Company, taken as a whole, or is not otherwise materially
adverse to the Shareholders of the Company, taken as a whole) and all
transactions contemplated thereby,

(ii)    against
any Competing Transaction and against any proposal for action or agreement that
would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement, any
change in the Board of Directors of the Company, or any change in the Charter
Documents (used herein as defined in the Voting Agreement), which in the case
of each of the matters referred to in this clause (ii) could reasonably be
expected to impede, interfere with, delay, postpone or materially adversely
affect 

 

 

the transactions contemplated by the Merger Agreement
or the likelihood of such transactions being consummated, and

(iii)   in favor
of any other matter necessary for consummation of the transactions contemplated
by the Merger Agreement and related agreements, including, without limitation,
any further amendment, wavier or modification of the Charter Documents in
connection therewith, which is considered at any such meeting of Shareholders
or in such consent, and in connection therewith to execute any documents which
are necessary in order to effectuate the foregoing, including, without
limitation, the ability for Newco or its nominees to vote such Shares directly.

The attorney and proxy named above is hereby
authorized and empowered by the undersigned to (a) demand that the
Secretary or any other appropriate officer of the Company call a special
meeting of the Shareholders of the Company for the purpose of voting on matters
set forth in clauses (i) and (iii) of the preceding paragraph and (b) sign
its name (as a shareholder of the Company) to any consent, certificate or other
document relating to the Company that the Minnesota Business Corporation Act or
other law of the State of Minnesota may permit or require in connection with
any matter referred to in clauses (i) through (iii) of the preceding
paragraph. The Shareholder may vote the Shares on all other matters not
specifically referred to in this Proxy, and the attorney and proxy named above
may not exercise this Proxy with respect to such other matters. Without
limiting the generality of the foregoing, this Proxy may not be used to waive
or amend any material rights or obligations of the undersigned under the Voting
Agreement, the Merger Agreement or otherwise (other than as contemplated by the
Merger Agreement, the Voting Agreement or this Proxy). The Shareholder will
take such further action and execute such other instruments as may be necessary
to effectuate the intent of this Proxy.

This Proxy and terminates upon the termination of the
Voting Agreement.

Dated:  June 27,
2006

 

	
  

  	
   

  
	
   

  	
  Name:   Curtis
  A. Sampson

  

 

277,448 Total Shares Covered by Proxy

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