AMENDED AND RESTATED STOCKHOLDERS AND REGISTRATION

RIGHTS AGREEMENT

Dated as of November     , 2004

Stockholders and Registration Rights Agreement

i

Stockholders and Registration Rights Agreement

AMENDED AND RESTATED

STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENT

AMENDED AND RESTATED STOCKHOLDERS AND REGISTRATION RIGHTS AGREEMENT, dated as of November     , 2004, among: Iowa Telecommunications Services, Inc., an Iowa corporation (the Company); ING Furman Selz Investors III, L.P., a Delaware limited partnership (ING LP), ING Barings US Leveraged Equity Plan LLC, a Delaware limited liability company (ING LLC) and ING Barings Global Leveraged Equity Plan Ltd., a Bermuda company (ING LTD and, together with ING LP and ING LLC, referred to hereafter as ING); Iowa Network Services, Inc., an Iowa corporation (together with its Permitted Transferees, INS); BancBoston Ventures Inc., a Massachusetts corporation (BancBoston); Teachers Insurance and Annuity Association of America, a New York corporation (Teachers, and together with ING and BancBoston collectively referred to hereafter as the Institutional Holders, and INS and the Institutional Holders, together with their respective Permitted Transferees, collectively referred to hereafter as the Principal Holders); and the individual holders of options to purchase Common Stock identified on the signature page to this Agreement (Management Holders and, together with the Principal Holders, referred to hereafter as the Holders). Capitalized terms used herein without parenthetical definition are defined in Article III.

RECITALS:

A. The Company and the Principal Holders previously entered into a Stockholders and Registration Rights Agreement, dated as of June 30, 2000, as amended by Amendment No. 1 thereto, dated September 25, 2001, and Amendment No. 2 thereto, dated April 7, 2004 (as so amended, the Original Agreement).

B. The Holders hold equity investments in the Company and the Company intends to engage in an initial public offering (the Offering) of its shares of Common Stock, par value $0.01 per share (the Common Stock), as contemplated by the terms of the Underwriting Agreement, dated the date hereof, among the Company, the Institutional Holders and the Underwriters identified therein (the Underwriting Agreement).

C. In connection with the Offering, the parties hereto wish to set forth certain rights and obligations with respect to the registration of Common Stock under the Securities Act following the Offering.

NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, the Original Agreement is hereby amended and restated in its entirety as follows, with effect as provided in Section 4.12:

Stockholders and Registration Rights Agreement

ARTICLE I

REGISTRATION RIGHTS

1.1 Shelf Registration. The Company shall:

(a) as soon as practicable following the first anniversary of the initial closing date of the Offering (or after 180 days have elapsed from the initial closing date of the Offering if Holders of an aggregate Market Price of $50 million of Registrable Securities so request), file a registration statement on Form S-3 (or any comparable or successor form) pursuant to Rule 415 under the Securities Act, or if the Company is ineligible to use Form S-3, on another appropriate form (the Shelf Registration Statement), which Shelf Registration Statement shall register all Registrable Securities for resale by the Holders that have provided the information required pursuant to the terms of Section 2.2 hereof;

(b) use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective by the Commission as promptly as practicable after the Company has filed it;

(c) use its reasonable best efforts to keep the Shelf Registration Statement continuously effective (supplemented and amended as required by the provisions of Section 2.1(b) hereof to the extent necessary) to ensure that it is available for resales by the Holders of Registrable Securities entitled to the benefit of this Agreement under the Securities Act until the earlier of: (i) the sale of all Registrable Securities registered under the Shelf Registration Statement; and (ii) with respect to Registrable Securities held by Persons that are not Affiliates of the Company, the expiration of the period referred to in Rule 144(k) under the Securities Act (the Effectiveness Period); and

(d) if for any reason during the Effectiveness Period the Company becomes ineligible to use the form on which an existing Shelf Registration Statement has been filed and declared effective, as promptly as practicable, file another shelf registration statement on an appropriate form for which the Company is eligible and use its reasonable best efforts to cause such additional registration statement to be declared effective by the Commission as promptly as practicable. Such additional registration statement shall be deemed to be a Shelf Registration Statement subject as appropriate to the provisions hereof.

1.2 Demand Registrations.

(a) Subject to Sections 1.3 and 2.5(a), at any time after 180 days have elapsed from the initial closing date of the Offering (or sooner if permitted by the managing

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Stockholders and Registration Rights Agreement

underwriters of the Offering), each Principal Holder shall have the right to request that the Company effect the registration under the Securities Act of all or a portion of the Registrable Securities owned by such Principal Holder, each such request to specify the intended method or methods of disposition thereof; provided that (i) each of (A) the Institutional Holders collectively and (B) INS may make no more than three such requests for registration and (ii) the Company shall not be required to effect a registration requested pursuant to this Section 1.2 unless the aggregate Market Price of all Registrable Securities for which registration has been requested (including requests for registration pursuant to Section 1.6) exceeds $25 million as of the date following the last day Holders may request to include Registrable Securities in such registration under Section 1.6.

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