Document:

<PAGE>
                                                                               .
                                                                               .
                                                                               .
                                                                  Exhibit 10.2

  [VALOR LOGO]

                                 2005 INCENTIVE
                                COMPENSATION PLAN

<TABLE>
<S>                       <C>              <C>
Version                   4.0
Effective Date            March 22, 2005   __________________
</TABLE>

<PAGE>

<TABLE>
<S>                                                                     <C>
1     ADMINISTRATIVE RULES...........................................    3

   1.1      PURPOSE..................................................    3
   1.2      DEFINITIONS..............................................    3
   1.3      ADMINISTRATION...........................................    3
   1.4      ELIGIBLE PARTICIPANTS....................................    4
   1.5      AWARDS...................................................    4
   1.6      PAYMENT OF AWARDS........................................    4
   1.7      AMENDMENT OR TERMINATION.................................    5
   1.8      OTHER CONDITIONS.........................................    5
   1.9      EFFECTIVE DATE...........................................    5

2     OPERATING RULES................................................    6

   2.1      PLAN PRINCIPLES..........................................    6
   2.2      PLAN STRUCTURE...........................................    6
   2.3      INCENTIVE FACTORS........................................    7
      2.3.1       Company Performance (as measured by EBITDA)........    8
      2.3.2       Individual Performance Evaluation and Objectives...    8
   2.4      ASSIGNING INCENTIVE FACTORS TO GROUPS....................   10
   2.5      ALLOCATING INCENTIVE FACTORS AND WEIGHTS TO GROUPS.......   11
   2.6      INCENTIVE POTENTIAL......................................   11
   2.7      REVENUE BONUS............................................   12
   2.8      AWARD CALCULATION METHOD.................................   12
      2.8.1       The Performance Potential Factor (PPF).............   13
      2.8.2       Incentive Potential Factor (IPF)...................   13
      2.8.3       The Final Incentive Award (FIA)....................   13
      2.8.4       The Revenue Bonus Award (RBA)......................   14
      2.8.5       The Total Incentive Payment (TIP)..................   14
</TABLE>

Version 4.0                         Page 2                        March 22, 2005

<PAGE>

1 ADMINISTRATIVE RULES

      1.1 PURPOSE

The purpose of the Incentive Compensation Plan (the "Plan") is to enhance and
reinforce the goals and strategic objectives of VALOR Communications Group, Inc.
(the "Company") for company and individual performance. This will be
accomplished by providing eligible employees with financial awards for
attainment of revenue and operational objectives. The accomplishment of these
goals will be measured through the attainment of the following elements as
defined in Part II:

      -     Company Performance (as measured by EBITDA)

      -     Individual Performance Evaluation and Objectives

      -     Revenue Attainment.

The Plan sets forth the guidelines and formulas for the computation of incentive
compensation awards for participating employees.

      1.2 DEFINITIONS

Definitions of terms as used throughout the Plan document are as follows:

      -     "Award Year" means the twelve-month period coinciding with the
            Company's annual accounting period.

      -     "Committee" means the Compensation Committee of the Company's Board
            of Directors.

      -     "Participant" means an employee designated by management and
            approved by the Committee to participate in the Plan.

      1.3 ADMINISTRATION

The Committee has delegated to the Chief Executive Officer and the senior
executive team ("Executive Management") the responsibility to develop and
administer the Plan. The Vice President - Human Resources of the Company shall
administer the Plan in accord with direction provided by Executive Management.
The Committee shall approve the Plan prior to its implementation.

Executive Management shall have full power and authority to select Participants
from among those eligible, to determine the size and timing of individual
awards, and to adopt and revise such rules and procedures as it shall deem
necessary for the administration of the Plan. The decision of the Executive
Management with respect to the individuals selected for awards, and the
interpretation of the Plan shall be final and conclusive. All incentive
compensation awards computed under the Plan are subject to final approval and
modification of Executive Management. The Plan may be modified or withdrawn at
any time without prior notification at the discretion of Executive Management.

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      1.4 ELIGIBLE PARTICIPANTS

Participation in the Plan shall be limited to regular salaried employees of the
Company, including officers as recommended by management and approved by the
Committee. In selecting Participants, Executive Management shall consider an
individual's job, individual performance objectives, and potential impact on the
Company's business results and performance. Participants will be members of the
participant groups as defined in Part II of the Plan. Participants should not be
eligible to participate in any other incentive or bonus plan(s). The selection
of Participants and their respective incentive awards, shall be determined
annually by Executive Management and communicated to Participants as soon as
possible. In actual practice, decisions on participation will be made at or near
the beginning of the Award Year. Executive Management has the right to change or
modify the participant list with or without notice.

Eligible employees are full-time employees who are selected to participate in
the Plan (as defined above), and are employed by the Company during the entire
Award Year for which the incentive is being paid. If an employee becomes
eligible during the Award Year and would otherwise be eligible to participate in
the incentive compensation plan, at the discretion of the department Senior
Vice-President and the Chief Executive Officer, the individual may be allowed to
participate. This Participant would receive pro-rated incentive award based on
the full months that he or she is eligible and the End of the Year. Employees
who become eligible during the fourth quarter of the Award Year will not be
eligible to participate until the following Award Year.

      1.5 AWARDS

Individual Participant awards are determined based on quantitative and
qualitative performance measurements as described by the Incentive Factors in
Part II. All award payments are subject to Executive Management approval. The
Committee shall review Awards payable under the Plan to the Chief Executive
Officer and other senior officers. Awards will be made in the form of cash.

      1.6 PAYMENT OF AWARDS

NORMAL PAYMENT. Incentive awards shall be earned as of the payment of incentive
award date. Payment of awards shall be made in cash within ninety (90) days
following the end of the Award Year, upon completion of audited financials.
Participants must be full-time employees on the Company's payroll at the time
the award is paid to receive the payment.

The Company may choose to make mid-year awards to eligible participants if the
Company is meeting or exceeding financial objectives and the outlook for the
remaining half of the year is favorable. If mid-year awards are made, they will
occur between July 1 and September 1. Final incentive awards will be adjusted by
any mid-year award. Participants in Groups AA, A, and B as defined in Part II
shall not be eligible for mid-year award. Mid-year awards will be discontinued
in the 2006 Award Year.

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PAYMENT UNDER CONDITIONS OF TERMINATION. If termination of employment occurs
during an Award Year because of death, total disability, or approved leave of
absence, such Participant terminating employment shall be deemed to have earned
a proportionate share of what would have otherwise been the Award Year's actual
incentive. The amount paid will be prorated to the number of full months worked,
and based on the Total Incentive Payment calculations.

If termination of employment occurs for any reason other than death, total
disability, or approved leave of absence, no incentive shall be deemed earned
for the Award Year in which such termination occurs.

PARTICIPANT TRANSFER. If a Participant is transferred to another
unit/department, etc. within or affiliated with the Company during the Award
Year, and is determined to be eligible for payments under one or both of the
units' plans, partial awards will be made under each unit's plan, using the
respective job and salary and prorated as describe in Section 1.4.

      1.7 AMENDMENT OR TERMINATION

Executive Management may, at any time, terminate, modify, or amend the Plan. No
awards may be made under the Plan at any time, if the overall financial
condition of the Company is not sound.

      1.8 OTHER CONDITIONS

RIGHT OF ASSIGNMENT. No right or interest of any Participant in the Plan shall
be assignable or transferable, or subject to any lien, directly, by operation of
law, or otherwise including levy, garnishment, attachment, pledge, and
bankruptcy. In the event of the Participant's death, payment shall be made to
the Participant's designated beneficiary or in the absence of such designation,
to the Participant's estate.

RIGHT OF EMPLOYMENT. The receipt of an award under the Plan shall not give any
employee the right to continue employment with the Company, and the right to
dismiss any employee is specifically reserved by the Company. The receipt of an
award in any year shall not give an employee the right to receive an award in
any subsequent year.

WITHHOLDING OF TAXES. The Company shall have the right and obligation to deduct
from all payments under the Plan any federal or state taxes required by law to
be withheld with respect to such payments.

WITHHOLDING OF 401(K). Savings Plan (401(k)) deductions shall be made from all
payments under the Plan, if a Participant is enrolled in 401(k) plan.

      1.9 EFFECTIVE DATE

The effective date of the Plan shall be January 1 of the Award Year of adoption
by the Committee.

Version 4.0                         Page 5                        March 22, 2005

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2. OPERATING RULES

      2.1 PLAN PRINCIPLES

The purpose of the Plan as defined in Part I is to provide Participants with
annual incentive awards for their contributions to the Company's growth and
achievement of strategic goals. The Plan will be operated on the following
principles:

      -     SETTING OF GOALS

            The Company will set the Participant's incentive factors on an
            annual basis and revise them during the Award Year as needed.

      -     MEASUREMENT OF PERFORMANCE

            The Company, through its managers, will review performance of
            Participants at mid-year, and measure performance according to the
            Plan specifications at the end of the Award Year. The measurement
            may be either quantitative or qualitative.

      -     PAYMENT OF AWARDS

            The Company will award the Participants, according to the measured
            results, within ninety (90) days of the end of the Award Year upon
            completion of audited financials. The Company may choose to make
            mid-year awards if the Company is meeting or exceeding financial
            objectives and the outlook for the remainder of the year is
            favorable. End of the Year Awards will be adjusted by any mid-year
            award. Participants in Groups AA, A, and B shall not be eligible for
            mid-year awards. Mid-year awards will be discontinued in the 2006
            Award Year.

      2.2 PLAN STRUCTURE

The Plan is based on incentive factors important to the Company's success in
achieving its strategic objectives that have been adopted by resolution of the
Company's Board of Directors . Plan Participants are divided into groups with
similar job responsibilities and/or job functions. Executive Management will
make a determination as to which group a Participant will be assigned, using the
criteria below as a guideline:

                                          PARTICIPANT GROUPS

GROUP AA                Participants in this group are responsible for the
                        long-range planning and growth of the Company. Will be
                        responsible for all business functions and Senior
                        Vice-Presidents in their reporting structure. Common
                        titles in this category will be President and Chief
                        Executive Officer.

GROUP A                 Participants in this group are responsible for the
                        long-range planning and growth of the Company. They are
                        usually responsible for multiple business functions and
                        will most often have Vice-President(s) in their
                        reporting structure. Common titles in this category will
                        be Senior Vice-President.

GROUP B                 Participants in this group are responsible for
                        assisting in developing and implementing long-range
                        plans for the Company. They will usually be responsible
                        for a specific business function and have Directors
                        and/or

Version 4.0                         Page 6                        March 22, 2005

<PAGE>

                        Managers in their reporting structure. Common titles in
                        this group will be Vice-President.

GROUP C                 Participants in this group are responsible for the
                        implementation of both short- and long range plans as
                        well as overseeing the day-to-day operations for the
                        Company in a specific business region (Division). Common
                        titles in this group will be Division Manager.

GROUP D                 Participants in this group are responsible for
                        intermediate business goals. They will usually be
                        responsible for multiple disciplines within a business
                        function and will usually have Managers and/or
                        professionals in their reporting structure. Common
                        titles in this group will be Directors.

GROUP E                 Participants in this group are responsible for short
                        to intermediate range business goals. They will usually
                        be responsible for one or a few disciplines within a
                        business function and may have administrative staff,
                        supervisors, and/or professionals in their reporting
                        structure. Common titles in this group will be Managers.

GROUP F                 Participants in this group are responsible for immediate
                        to short-term business goals. They will usually be
                        responsible for one discipline or sub-discipline within
                        a business function. This responsibility may be defined
                        through the supervision of at least 3 subordinate
                        (exempt or nonexempt) employees, and individual
                        contributor manager who supervise less than 3 employees.
                        Common titles in this group will be Supervisor and
                        Manager.

The groups are assigned incentive factors for which they have responsibility,
control, or influence. Factor weights will be assigned to the incentive factors
for the groups. The total factor weight allocated to each should equal 100
percent. Factor weights are allocated only to the incentive factors that have
been assigned to the groups and not all factors may have weights.

      2.3 INCENTIVE FACTORS

Incentive factors are elements through which the organization achieves strategic
goals and will be used by the Plan to measure the success of Participants to
help the Company reach its goals. The Committee has selected several incentive
factors for measurement in the Plan. These factors are as follows:

      -     Company Performance (as measured by EBITDA)

      -     Individual Performance Evaluation and Objectives

      -     Revenue Attainment.

Senior management, department management, and eligible Participants will
establish goals for each of these incentive factors. Participants receiving
"Improvement Desired" or "Unsatisfactory" on individual performance evaluations
will not be eligible for any payout under the Plan.

Version 4.0                         Page 7                        March 22, 2005

<PAGE>

            2.3.1  COMPANY PERFORMANCE (AS MEASURED BY EBITDA)

Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) is a
measure of financial performance that is used to measure the Company's
performance. At the beginning of each year, the Company's Board of Directors
shall adopt a resolution setting the EBITDA goals. At the end of the year,
actual EBITDA achievement will be compared to the EBITDA goal and the percentage
of achievement will be determined. Executive Management reserves the right to
consider extraordinary expenses and revenues in consideration for End of Year
Award.

            2.3.1.1  EBITDA EVALUATION SCORE TABLE

The score table defines the achievement level expected by the Company. The
incentive level represents the percent of the incentive that the Participant
will receive depending on the level of EBITDA attained by the Company. Higher
levels of achievement will yield higher incentive levels and consequently
increase incentive award.

                 TABLE 2.3.1.1.1  EBITDA EVALUATION SCORE TABLE

<TABLE>
<CAPTION>
LEVEL OF EBITDA ACHIEVEMENT   INCENTIVE LEVEL
---------------------------  -----------------
<S>                          <C>
         >103.00%                 150.00%
     101.00% - 102.99%       125.00% - 149.00%
     100.00% - 100.99%       100.00% - 124.00%
      99.00% - 99.99%         80.00% - 99.00%
      98.00% - 98.99%         75.00% - 79.00%
      97.00% - 97.99%         50.00% - 74.00%
          <97.00%                  0.00%
</TABLE>

            2.3.1.2  EBITDA END OF AWARD YEAR

At the end of the Award Year, senior management will compare actual EBITDA
results with EBITDA goals and determine incentive level based on attainment.
Executive Management reserves the right to adjust the incentive level, either
increasing or decreasing, based on unusual or extenuating circumstances.

            2.3.2  INDIVIDUAL PERFORMANCE EVALUATION AND OBJECTIVES

Participants, who will be assessed using the performance evaluation incentive
factor, will be evaluated using the performance evaluation that is approved by
management. The performance evaluation will be conducted according to the
guidelines in the performance evaluation process.

As a component of the performance evaluation, participants will be assigned
individual performance objectives at the beginning of the evaluation cycle.
Managers will be responsible for creating performance objectives.

Managers will ensure each objective is described in enough detail so the
Participant can understand clearly what is to be accomplished. Managers will
assign at least four (4) objectives to a Participant. Objectives should be
substantial and challenging in nature.

Version 4.0                         Page 8                        March 22, 2005

<PAGE>

      -     The manager will specify the "deliverables" that will be obtained by
            the Participant at the completion of the task. Deliverables may be
            reports, prototypes, certifications, etc.

      -     Each objective is allocated a weight. The weight determines the
            relative importance of the task in relation to the other tasks
            assigned for the same period. The total weight assigned to all the
            objectives must equal 100 percent.

         TABLE 2.3.2.1.1  INDIVIDUAL PARTICIPANT PERFORMANCE OBJECTIVES

<TABLE>
<CAPTION>
   Name       Jane Doe    Employee Number    10101
----------   ----------   ---------------   -------
<S>          <C>          <C>               <C>
Department   Operations   Job Title         Manager
Manager      John Doe
</TABLE>

<TABLE>
<CAPTION>
                                                     MEASUREMENT
              OBJECTIVE                             OF ACHIEVEMENT                WEIGHTING
-----------------------------------    ---------------------------------------    ---------
<S>                                    <C>                                        <C>
Establish a departmental policy and    Published and distributed policy and         40.00%
practices manual.                      practice manual by July 1.

Establish departmental callback        Documented callback procedures,              20.00%
procedures.                            training of all department members, and
                                       reduction by 20% in the number of
                                       complaints for failure to call back by
                                       April 1.

Recommended new customer tracking      Documented recommendation must include       40.00%
software.                              samples and description of software
                                       evaluated by December 1.
                                                                                   ------
Totals                                                                             100.00%
                                                                                   ------
</TABLE>

             2.3.2.2 PERFORMANCE EVALUATION SCORE TABLE

The score table defines the achievement level that can be attained by the
Participant. The incentive level represents the percent of the incentive that
the Participant will receive depending on their achievement level. Higher levels
of achievement will yield higher incentive levels and consequently increase
incentive award.

               TABLE 2.3.2.2.1 PERFORMANCE EVALUATION SCORE TABLE

<TABLE>
<CAPTION>
         ACHIEVEMENT LEVEL        INCENTIVE LEVEL
--------------------------------  ---------------
<S>                               <C>
Exceptional                           200.00%
Exceeds Expectations                  150.00%
Fully Satisfactory (3.55 - 2.90)      100.00%
Fully Satisfactory (2.89 - 2.76)       50.00%
Improvement Desired                     0.00%
Unsatisfactory                          0.00%
</TABLE>

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<PAGE>

             2.3.2.3 PERFORMANCE RATING DISTRIBUTION

The overall performance ratings for each organization should generally resemble
a bell shaped curve. As a guideline, the majority of employees should receive a
"Fully Satisfactory" performance ratings. These will be employees who
consistently meet and occasionally exceed requirements. A smaller percentage of
employees should receive ratings of "Exceeds Expectations". These will be
employees who consistently exceed the requirements of the job. Still a smaller
percentage of employees should receive ratings of "Exceptional Performance".
These will be employees that always exceed job requirements and should be
reserved for the top performers at VALOR. A small percentage of employees should
receive "Improvement Desired" or "Unsatisfactory". These will be employees that
consistently do not meet job requirements. The distribution for each Senior
Vice-President's organization should follow the recommended distribution as
illustrated in the table below:

           Table 2.3.2.3.1 Performance Evaluation Rating Distribution

<TABLE>
<CAPTION>
           RATING LEVEL               DISTRIBUTION
--------------------------------   -------------------
<S>                                <C>
Exceptional                        No More than 5.00%
Exceeds Expectations               No More than 25.00%
Fully Satisfactory (3.55 - 2.90)   No More than 65.00%
Fully Satisfactory (2.89 - 2.76)
Improvement Desired                No More than 5.00%
Unsatisfactory
</TABLE>

If a Senior Vice-President's organization exceeds the recommended distribution
(5%) in the Exceptional rating level, or a combined 30% in the Exceptional and
Exceeds Expectations rating levels, review and approval of the Chief Executive
Officer is required.

             2.3.2.4 END OF THE AWARD YEAR

During the annual performance evaluation, managers will meet with the
Participant to review performance and accomplishment of objectives. The
performance evaluation rating will be used to measure the achievement level for
this incentive factor.

      2.4 ASSIGNING INCENTIVE FACTORS TO GROUPS

Incentive factors are assigned to the groups that have responsibility, control,
and influence over them. Plan participants should constantly review these
factors and their goals, monitoring their progress and adjusting their priority
to meet their goals. Incentive factor goals serve as constant reminders as to
which areas Participants should focus their efforts.

Version 4.0                        Page 10                        March 22, 2005

<PAGE>

        TABLE 2.4.1.1.1  INCENTIVE FACTORS ASSIGNED TO PARTICIPANT GROUPS

<TABLE>
<CAPTION>
                                                              PARTICIPANT GROUPS
                                                      ----------------------------------
                INCENTIVE FACTORS                     AA     A    B    C    D    E    F
------------------------------------------------      ---   ---  ---  ---  ---  ---  ---
<S>                                                   <C>   <C>  <C>  <C>  <C>  <C>  <C>
Individual Performance Evaluation and Objectives                 X    X    X    X    X

Company Performance (as measured by EBITDA)            X    X    X    X    X    X    X
</TABLE>

      2.5 ALLOCATING INCENTIVE FACTORS AND WEIGHTS TO GROUPS

The incentive factors assigned to each participant group were examined carefully
to determine which factors should be allocated to the group level. Participant
groups were allocated the incentive factors they have the most control over.
These will be the focal point of the groups' efforts.

Next, a weight is distributed among the factors assigned to each group based on
the importance each factor plays in relation to reaching the set goals. The
factor weight is the percentage of the factor allocated to a specific group. The
total factor weight for each group should equal 100 percent.

        TABLE 2.5.1.1.1  INCENTIVE FACTORS ALLOCATED TO PARTICIPANT GROUPS

<TABLE>
<CAPTION>
                                                  PARTICIPANT GROUPS
                             -------------------------------------------------------------
    INCENTIVE FACTORS           AA       A        B        C        D        E        F
-------------------------    -------  -------  -------  -------  -------  -------  -------
<S>                          <C>      <C>      <C>      <C>      <C>      <C>      <C>
Individual Performance         0.00%    0.00%   30.00%   30.00%   30.00%   40.00%   40.00%
Evaluation and Objectives

Company Performance (as      100.00%  100.00%   70.00%   70.00%   70.00%   60.00%   60.00%
measured by EBITDA)
                             ------   ------   ------   ------   ------   ------   ------
Total                        100.00%  100.00%  100.00%  100.00%  100.00%  100.00%  100.00%
                             ======   ======   ======   ======   ======   ======   ======
</TABLE>

      2.6 INCENTIVE POTENTIAL

Incentive potential is defined as the percentage of the annual salary designated
to each participant group. This equals to the annual salary multiplied by the
assigned percentage. The assigned percentage increases with the responsibility
level of the group.

        TABLE 2.6.1.1.1  INCENTIVE PERCENTAGE POTENTIAL ASSIGNED TO GROUPS

<TABLE>
<CAPTION>
PARTICIPANT GROUP  PERCENTAGE
-----------------  ----------
<S>                <C>
       AA           100.00%
        A            50.00%
        B            40.00%
</TABLE>

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<PAGE>

<TABLE>
<S>   <C>
C     30.00%
D     25.00%
E     15.00%
F     10.00%
</TABLE>

Information for individual plan Participants is confidential and will be
disclosed to each plan Participant in a private manner. Group directors and
managers will only have access to the incentive compensation source data
pertaining to their department or work group.

      2.7 REVENUE BONUS

The Revenue Bonus will give Participants an opportunity to earn an extra 10.00%
of their Final Incentive Award. At the beginning of each year, the Company's
Board of Directors shall adopt a resolution setting the Revenue goal. At the end
of the year, actual Revenue achievement will be compared to the Revenue goal and
the percentage of achievement will be determined. Executive Management reserves
the right to consider extraordinary circumstances in consideration for the End
of Award Year calculations. Revenue target Revenue Attainment is an additional
measure of Company performance. After the Final Incentive Awards have been
calculated as described in 2.8.3, the Revenue Bonus will be calculated and used
to determine the Total Incentive Payment.

             2.7.1.1  REVENUE EVALUATION SCORE TABLE

The score table defines the achievement level expected by the Company. The
incentive level represents the percent of the incentive that the Participant
will receive depending on the level of Revenue attained by the Company. Higher
levels of achievement will yield higher incentive levels and consequently
increase incentive awards.

                 TABLE 2.7.1.1.1  REVENUE EVALUATION SCORE TABLE

<TABLE>
<CAPTION>
                                INCENTIVE LEVEL (AS A
                              PERCENT OF FINAL INCENTIVE
LEVEL OF REVENUE ACHIEVEMENT           AWARD)
----------------------------  --------------------------
<S>                           <C>
          >100.50%                       +10.00%
      99.50% - 100.49%                    0.00%
           <99.50%                       -10.00%
</TABLE>

            2.7.1.2  REVENUE END OF AWARD YEAR

At the end of the Award Year, Executive Management will compare actual Revenue
results with Revenue goals and determine the incentive level based on
attainment. Executive Management reserves the right to adjust the incentive
level, either increasing or decreasing, based on unusual or extenuating
circumstances.

      2.8 AWARD CALCULATION METHOD

All award calculations will be performed by the Human Resources Department based
on EBITDA and Revenue results as communicated by the Committee and Performance
Evaluation

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<PAGE>

Ratings as communicated by department management. The formulas for calculations
are outlined in this section.

            2.8.1 THE PERFORMANCE POTENTIAL FACTOR (PPF)

The Participant's performance in each incentive factor allocated is measured in
or according to the Plan guidelines. A score is assigned for each factor based
on the actual results achieved for that Award Year. The Participant's score in
each factor category is multiplied by the factor weight allocated to it and
divided by 100. Adding all factor category scores times their weights yields the
Performance Potential Factor (PPF).

The Performance Potential Factor is a cumulative index that represents the
overall Participant performance in achieving the assigned goals. The Performance
Potential Index reflects how well Participants have achieved their goals in
their respective incentive factors

     The performance index is derived using the following formula:

          PPF =         S1* x F1** / 100  +  S2* x F2** / 100
       (Performance
    Potential Factor)

            2.8.2 INCENTIVE POTENTIAL FACTOR (IPF)

Each Participant in the Plan is designated an Incentive Potential Factor. The
value of this factor is determined by a percentage of the Participant's annual
income as defined in section 2.6.

             IPF=          Annual Salary  X  Incentive Potential Percentage (#)
(Incentive Potential Factor)

            2.8.3 THE FINAL INCENTIVE AWARD (FIA)

The Final Incentive Award is calculated as follows:

          FIA           =               PPF              X          IPF
(Final Incentive Award)   (Performance Potential Factor)   (Incentive Potential
                                                                  Factor)

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

* S1, S2, S3, S4 are the Participant's score for each incentive factor as
defined in the Plan.

** F1,F1,F3,F4 are the weights allocated to each incentive factor. These
allocations are designated in Table 2.5.1.1.1 and the sum is 100.00%.

(#) Incentive Potential Percentage is defined in Table 2.6.1.1.1

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<PAGE>

            2.8.4 THE REVENUE BONUS AWARD (RBA)

The Revenue Bonus Award is calculated as follows:

         RBA           =             FIA             X           RBL
(Revenue Bonus Award)      (Final Incentive Award)      (Revenue Bonus Level)

            2.8.5 THE TOTAL INCENTIVE PAYMENT (TIP)

The Total Incentive Payment is calculated as follows:

             TIP              =           FIA           +           RBA
(The Total Incentive Payment)   (Final Incentive Award)    (Revenue Bonus Award)

The Total Incentive Payment will be adjusted by any mid-year payments.

Participants receiving "Improvement Desired" or "Unsatisfactory" will not be
eligible for any payout under the plan.

The Company reserves the right to make adjustments to incentive awards paid.

Version 4.0                        Page 14                        March 22, 2005<PAGE>

                                                                    EXHIBIT 10.3
                             Confidential Treatment

The portions of this exhibit that have been replaced with "[*****]" have been
filed separately with the Securities and Exchange Commission and are the subject
of our application for confidential treatment.

                              AMENDED AND RESTATED
[AT&T LOGO]                   AT&T MASTER CARRIER AGREEMENT

<TABLE>
<S>                                      <C>                                         <C>
CUSTOMER NAME (FULL LEGAL NAME):
Valor Telecommunications of              AT&T Corp.,                                 AT&T SALES REPRESENTATIVE:
Texas L.P. d/b/a Valor                            a New York corporation ("AT&T')    Jeff Hayden
Telecom
                        ("CUSTOMER")

CUSTOMER NAME (AND TITLE) FOR NOTICE:    AT&T NAME (AND TITLE) FOR NOTICE:           AT&T CONTACT TELEPHONE NUMBER:
Kim Upton                                David Casillas Regional VP                  972-778-4624

CUSTOMER ADDRESS:                        AT&T ADDRESS:                               INITIAL DEPOSIT AMOUNT REQUIRED:
201 E. John Carpenter                    5501 LBJ Freeway Suite 3W                   0.00
Freeway Suite #200

CITY           STATE         ZIP CODE    CITY              STATE        ZIP CODE
Irving         TX            75062       Dallas            TX           75240

CUSTOMER FAX NUMBER FOR NOTICE:          AT&T FAX NUMBER FOR NOTICE:
972-373-1290                             972-778-4460
</TABLE>

This Amended and Restated AT&T Master Carrier Agreement (the "Agreement")
replaces the Master Carrier Agreement (as it may have been previously amended
and restated) originally executed on the following dates:

Date of execution by CUSTOMER: 07/06/2002  Date of execution by AT&T: 07/22/2002

This Agreement consists of this Cover Sheet and the documents listed in the
Table of Documents below (each, an "Attachment"). In the event of any
inconsistency, precedence will be given to the documents in the following order:
(1) this Cover Sheet; (2) the documents listed in the Table of Documents
(excluding the General Terms and Conditions); (3) the General Terms and
Conditions. In the event of any inconsistency between this Agreement and an
applicable AT&T Service Guide, the terms of this Agreement shall prevail.

This Agreement shall be legally binding when signed by both parties and shall
continue in effect until the end of the longest term specified in an Attachment,
or, until otherwise terminated pursuant to this Agreement, The rates and
commitments shall be effective as provided in each Attachment.

                               TABLE OF DOCUMENTS

<TABLE>
<CAPTION>
TITLE                                                         DOC. ID                   DATE/TIME STAMP
                                                     --------------------------       -------------------
<S>                                                  <C>                              <C>
General Terms and Conditions                                MCA 030614.doc              06/14/03 8:15 am
AT&T Data Service Terms and Pricing                   BDM_2 VAL DSTP 050221.doc        02/21/2005 2:25 PM
AT&T Internet Transport Services Service                      VAL MIS SOA              12/6/2004 10:31 AM
Attachment                                                  0412061.doc.doc
</TABLE>

                                    AT&T/CUSTOMER CONFIDENTIAL
2340572553                     Subject to Nondisclosure Obligations

<PAGE>

                               TABLE OF DOCUMENTS

TITLE                                          DOC. ID           DATE/TIME STAMP

AGREED:                                   AGREED:

VALOR TELECOMMUNICATIONS OF TEXAS L.P.    AT&T CORP.
D/B/A VALOR

BY: /s/ Grant Raney                       BY: /s/ David Casilias
    -------------------------------           ---------------------------
    (AUTHORIZED CUSTOMER SIGNATURE)            (AUTHORIZED AT&T SIGNATURE)

          Grant Raney                                   David Casilias
(TYPED OR PRINTED NAME AND TITLE)              (TYPED OR PRINTED NAME AND TITLE)

DATE: 03/25/05                            DATE: 03/29/05

                                    AT&T/CUSTOMER CONFIDENTIAL
2340572553                     SUBJECT TO NONDISCLOSURE OBLIGATIONS

<PAGE>

                        GENERAL TERMS AND CONDITIONS                      PAGE 1

1. PROVISION OF SERVICES. AT&T agrees to provide to CUSTOMER the AT&T services
described in the Attachment(s) to this Agreement (the "Services"). AT&T is not
responsible for the quality of transmission or signaling on CUSTOMER's side of
the network interface between AT&T and CUSTOMER. Service is furnished subject to
the availability of the service components required, and subject to operational
and systems constraints.

2. BILLING AND PAYMENT FOR THE SERVICES. Except as may be provided in an
Attachment, AT&T will send a single monthly bill for each of the Services to one
location designated by CUSTOMER. CUSTOMER is liable for all amounts due to AT&T
under this Agreement. Payment in U.S. currency is due within thirty days after
the bill date, except as otherwise provided below with respect to Billing
Disputes. Charges set forth in the Attachments are exclusive of any applicable
taxes or surcharges.

3. NON-PAYMENT. AT&T may add interest charges to any past due amounts at the
lower of 1.5% per month or the maximum rate allowed by law. CUSTOMER shall
reimburse AT&T for reasonable attorney's fees and any other costs associated
with collecting delinquent or dishonored payments. Restrictive endorsements or
other statements on checks accepted by AT&T will not apply.

4. BILLING DISPUTES. To dispute a charge on a bill, CUSTOMER must identify the
specific charge in dispute and provide a full written explanation of the basis
for the dispute using a standard AT&T billing dispute form within 90 days after
the bill date. CUSTOMER may withhold payment of a charge subject to a good faith
dispute provided: (a) CUSTOMER submits the billing dispute, using a standard
AT&T billing dispute form, within thirty days after the bill date; (b) CUSTOMER
pays the undisputed portion of all charges; and (c) CUSTOMER cooperates
reasonably with AT&T's efforts to investigate and resolve the dispute. If AT&T
determines a disputed charge was billed in error, AT&T shall issue a credit to
reverse the amount incorrectly billed. If AT&T determines a disputed charge was
billed correctly, payment shall be due from CUSTOMER within five days after AT&T
advises CUSTOMER in writing that the dispute is denied.

5. DEPOSITS. Using its Deposit standards, AT&T has assessed and CUSTOMER shall
pay the initial Deposit amount specified on the Cover Sheet before Services are
provided. AT&T may require CUSTOMER, during the term of this Agreement, to
tender a deposit in an amount to be determined by AT&T in its reasonable
discretion. AT&T will rely upon commercially reasonable factors to determine the
need for and amount of any deposit. These factors may include, but are not
limited to, payment history, number of years in business, history of service
with AT&T, bankruptcy history, current account treatment status, financial
statement analysis, and commercial credit bureau rating, as well as commitment
levels and anticipated monthly charges. Any deposit will be held by AT&T as a
guarantee for the payment of charges. A deposit does not relieve CUSTOMER of the
responsibility for the prompt payment of bills. Interest (at the rate of 6% per
year or such other rate as is applicable by law) will be paid to CUSTOMER for
any period that a cash deposit is held by AT&T. AT&T may apply a deposit against
past due charges at any time.

6. OBLIGATIONS REGARDING TAXES. CUSTOMER shall pay any applicable taxes
(excluding those on AT&T's net income), fees, duties, levies and other similar
charges (and any related interest and penalties) relating to the sale, transfer
of ownership, installation, license, use or provision of the Services, except to
the extent customer provides a valid exemption certificate to AT&T prior to the
delivery of Services.

7. CUSTOMER is A CARRIER. CUSTOMER certifies it is a "common carrier" as
defined in the Communications Act of 1934 (see 47 USC Sections 153(10) and 211),
with all required operating authority. CUSTOMER further certifies either (a) it
has filed an FCC Form 499-A with the Federal Communications Commission
(individually or on a consolidated basis) in accordance with the registration
requirement of 47 C.F.R. 64.1195, or (b) it will not resell interstate
telecommunications service(s) provided by AT&T under this Agreement, unless it
first registers with the Federal Communications Commission in accordance with
the registration requirement of 47 C.F.R. 64.1195.

8. RESPONSIBILITIES OF CUSTOMER. CUSTOMER is responsible for interfacing and
communicating with its End Users, for placing any orders, and for assuring that
it and any Intermediate Providers comply with the provisions of this Agreement
and with all applicable laws and regulatory requirements with respect to the
Services. CUSTOMER is responsible for arranging premises access at any
reasonable time so that AT&T personnel may install, repair, maintain, inspect or
remove service components.

9. SOFTWARE. AT&T grants CUSTOMER a personal, non-transferable and non-exclusive
license (without the right to sublicense) to use, in object code form, all
software and associated written and electronic documentation and data furnished
pursuant to this Agreement (collectively, "Software"), solely in connection with
the Services and solely in accordance with applicable written and electronic
documentation. CUSTOMER will refrain from taking any steps to reverse assemble,
reverse compile or otherwise derive a source code version of the Software. The
Software shall at all times remain the sole and exclusive property of AT&T or
its suppliers. "Third-Party Software" means Software that bears a copyright
notice of a third party. "AT&T Software" means all Software other than
Third-Party Software. CUSTOMER shall not copy or download the Software, except
that CUSTOMER may make two copies of the Software, one for archive and the other
for disaster recovery purposes. Any copy must contain the same copyright notices
and proprietary markings as the original Software. CUSTOMER agrees to comply
with any additional restrictions that are provided with any Third-Party
Software. The term of the license granted with respect to any Software shall be
coterminous

                                    AT&T/CUSTOMER CONFIDENTIAL

                               Subject to Nondisclosure Obligations

<PAGE>

                        GENERAL TERMS AND CONDITIONS                      PAGE 2

with the Attachment which covers the Software and/or related Services. CUSTOMER
shall assure that its Users comply with the terms and conditions of this
Section.

10. WARRANTY WITH RESPECT TO SOFTWARE. AT&T warrants that all AT&T Software will
perform substantially in accordance with its applicable published specifications
for the term of the Attachment that covers the AT&T Software. If CUSTOMER
returns to AT&T, within such period, any AT&T Software that does not comply with
this warranty, then AT&T, at its option, will either repair or replace the
portion of the AT&T Software that does not comply or refund the amount paid by
CUSTOMER for such failed or defective AT&T Software. This warranty will apply
only if the AT&T Software is used in accordance with the terms of this Agreement
and is not altered, modified or tampered with by CUSTOMER or Users.

11. ABUSE OF SERVICE. The abuse of Service is prohibited. Using Service or
permitting Service to be used in the following ways constitutes abuse:(a)
interfering unreasonably with the use of AT&T service by others or the operation
of the AT&T network; (b) with respect to Services that include the provision of
terminating switched access over local exchange company facilities, carrying
calls that originate on the network of a facilities-based interexchange carrier
other than AT&T and terminate disproportionately to domestic locations for which
AT&T's cost of terminating switched access (based on the published access rates
of the incumbent local exchange companies) is above AT&T's price for the call
under this Agreement (after application of discounts); (c) subjecting AT&T
personnel or non-AT&T personnel to hazardous conditions; (d) attempting to avoid
the payment, in whole or in part, of any charges by any means or device
(non-payment of billed charges will not be considered abuse of service for
purposes of this Section); or (e) using the Services or displaying or
transmitting Content in a manner that violates any applicable law or regulation.
In any instance in which AT&T believes in good faith that there is abuse of
Service as set forth above, AT&T may immediately restrict, suspend or
discontinue providing Service or prevent the display or transmission of Content,
without liability on the part of AT&T, and then notify CUSTOMER of the action
that AT&T has taken and the reason for such action. To the extent doing so does
not interfere with its ability to prevent abuse of Service (to be determined in
AT&T's reasonable judgment), AT&T will attempt to notify CUSTOMER before taking
such action, and will attempt to limit any restriction, suspension or
discontinuance under this Section to the locations, Content, or Services with
respect to which the abuse is taking place.

12. DEFAULT. If a party breaches any material term of this Agreement and the
breach continues unremedied for 60 days after written notice of default, the
other party may terminate for cause any Attachment materially affected by the
breach. If CUSTOMER is in breach of its payment obligations (including failure
to pay a required deposit), and fails to make payment in full within 5 days
after receipt of written notice of default, AT&T may, at its option, terminate
the Agreement, terminate affected Attachments, suspend Service under the
affected Attachments, and/or require a deposit, advanced payment, or other
satisfactory assurances In connection with any or all Attachments as a condition
of continuing to provide Services; except that AT&T will not take any such
action as a result of CUSTOMER's non-payment of a charge subject to a timely
billing dispute, unless AT&T has reviewed the dispute and determined that the
charge is correct. An Attachment may be terminated by either party immediately
upon written notice if the other party has become insolvent or involved in a
liquidation or termination of its business, or adjudicated bankrupt, or been
involved in an assignment for the benefit of its creditors. CUSTOMER shall be
liable to AT&T for Termination Charges, as specified in a terminated Attachment,
in the event that AT&T terminates an Attachment as a result of a breach by
CUSTOMER. Termination by either party of an Attachment does not waive any other
rights or remedies it may have under this Agreement.

13. NO OTHER REPRESENTATIONS OR WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, AT&T MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
UNDER THIS AGREEMENT AND SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT OR ANY WARRANTY
ARISING BY USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE. AT&T DOES
NOT REPRESENT OR WARRANT THAT THE SERVICES WILL BE UNINTERRUPTED OR ERROR-FREE,
OR THAT THE SERVICES WILL MEET CUSTOMER'S REQUIREMENTS OR THAT THE SERVICES WILL
PREVENT UNAUTHORIZED ACCESS BY THIRD PARTIES. AT&T DOES NOT AUTHORIZE ANYONE TO
MAKE A REPRESENTATION OR WARRANTY OF ANY KIND ON ITS BEHALF AND CUSTOMER SHOULD
NOT RELY ON ANYONE MAKING SUCH STATEMENTS.

14. LIMITATION OF LIABILITY. EITHER PARTY'S ENTIRE LIABILITY, AND THE OTHER
PARTY'S EXCLUSIVE REMEDIES, FOR ANY DAMAGES CAUSED BY ANY SERVICE DEFECT OR
FAILURE, OR FOR OTHER CLAIMS ARISING IN CONNECTION WITH ANY SERVICE OR
OBLIGATIONS UNDER THIS AGREEMENT SHALL BE:

   (a) FOR BODILY INJURY OR DEATH TO ANY PERSON, OR REAL OR TANGIBLE PROPERTY
   DAMAGE, NEGLIGENTLY CAUSED BY A PARTY, OR DAMAGES ARISING FROM THE WILLFUL
   MISCONDUCT OF A PARTY OR A BREACH OF THE PROVISIONS OF SECTION 17 (USE OF
   MARKS), THE OTHER PARTY'S RIGHT TO PROVEN DIRECT DAMAGES;

   (b) FOR DEFECTS OR FAILURES OF SOFTWARE, THE REMEDIES SET FORTH ABOVE UNDER
   THE

                                   AT&T/CUSTOMER CONFIDENTIAL

                              Subject to Nondisclosure Obligations

<PAGE>

                        GENERAL TERMS AND CONDITIONS                      PAGE 3

   HEADING WARRANTY WITH RESPECT TO SOFTWARE;

   (c) FOR INDEMNITY, THE REMEDIES SET FORTH BELOW UNDER THE HEADING
   INDEMNIFICATION;

   (d) FOR DAMAGES OTHER THAN THOSE SET FORTH ABOVE AND NOT EXCLUDED UNDER THIS
   AGREEMENT, EACH PARTY'S LIABILITY SHALL BE LIMITED TO PROVEN DIRECT DAMAGES
   NOT TO EXCEED PER CLAIM (OR IN THE AGGREGATE DURING ANY 12-MONTH PERIOD) AN
   AMOUNT EQUAL TO THE TOTAL NET PAYMENTS PAYABLE BY CUSTOMER FOR THE APPLICABLE
   SERVICE UNDER THE APPLICABLE ATTACHMENT DURING THE 3 MONTHS PRECEDING THE
   MONTH IN WHICH THE DAMAGE OCCURRED.

THE LIMITATIONS IN THIS SECTION 14 SHALL NOT PRECLUDE A PARTY FROM OBTAINING
INJUNCTIVE RELIEF FROM A COURT OF COMPETENT JURISDICTION IN THE EVENT OF A
VIOLATION OF SECTION 9 (SOFTWARE), SECTION 11 (ABUSE OF SERVICE), ARTICLE 17
(USE OF MARKS), OR ARTICLE 20 (CONFIDENTIALITY OBLIGATIONS).

EXCEPT TO THE EXTENT PROVIDED UNDER THIS AGREEMENT WITH RESPECT TO
INDEMNIFICATION, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, RELIANCE OR SPECIAL DAMAGES,
INCLUDING WITHOUT LIMITATION DAMAGES FOR LOST PROFITS, ADVANTAGE, SAVINGS OR
REVENUES OF ANY KIND, OR INCREASED COST OF OPERATIONS, WHETHER OR NOT SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL 'AT&T BE
LIABLE FOR ANY CLAIM OR DAMAGES CAUSED BY OR ARISING OUT OF:

        (i) ANY ACT OR OMISSION (INCLUDING WITHOUT LIMITATION UNAUTHORIZED USE,
   THEFT, ALTERATION, LOSS OR DESTRUCTION OF SERVICE OR THE APPLICATIONS,
   CONTENT, DATA, PROGRAMS, INFORMATION, NETWORK OR SYSTEMS OF CUSTOMER, AN END
   USER OR ANY THIRD PARTY) OF CUSTOMER, AN INTERMEDIATE PROVIDER, OR AN END
   USER,

        (ii) EXCEPT AS OTHERWISE PROVIDED IN AN ATTACHMENT, SERVICE LEVELS,
   DELAYS OR INTERRUPTIONS OR LOST OR ALTERED MESSAGES OR TRANSMISSIONS, OR

        (iii) INTEROPERABILITY, INTERACTION OR INTER-CONNECTION OF THE SERVICES
   WITH APPLICATIONS, EQUIPMENT, SERVICES, CONTENT OR NETWORKS PROVIDED BY
   CUSTOMER OR THIRD PARTIES.

THE LIMITATIONS OF LIABILITY SET FORTH IN THIS AGREEMENT SHALL SURVIVE FAILURE
OF AN EXCLUSIVE REMEDY, AND SHALL APPLY REGARDLESS OF THE FORM OF ACTION,
WHETHER IN CONTRACT, TORT, WARRANTY, STRICT LIABILITY, OR NEGLIGENCE (INCLUDING
WITHOUT LIMITATION ACTIVE AND PASSIVE NEGLIGENCE). NOTHING IN THIS SECTION
LIMITS CUSTOMER'S RESPONSIBILITY FOR THE PAYMENT OF CHARGES DUE AS PROVIDED IN
THIS AGREEMENT, OR AT&T'S OBLIGATION TO PROVIDE CREDITS DUE AS PROVIDED IN THIS
AGREEMENT.

For purposes of all remedies and limitations of liability set forth in this
Agreement or any Attachment, (i) "AT&T" shall mean AT&T Corp., its Affiliates,
and its and their employees, directors, officers, agents, representatives,
subcontractors, interconnection service providers and suppliers and (ii)
"CUSTOMER" shall mean Customer, its Affiliates, and its and their employees,
directors, officers, agents, and representatives.

15. FORCE MAJEURE. Neither party nor its Affiliates or subcontractors shall be
liable to the other party for any delay, failure in performance, loss or damage
due to force majeure conditions such as fire, explosion, power blackout,
earthquake, volcanic action, flood, hurricane, the elements, strike, embargo,
labor disputes, civil or military authority, war, acts of God, acts or omissions
of other carriers (except, for CUSTOMER, the acts or omissions of its
Intermediate Providers), acts of regulatory or governmental agencies, or other
causes beyond their reasonable control, except that CUSTOMER's obligation to pay
for services provided shall not be excused. Changes in economic, business or
competitive conditions are not force majeure conditions. If CUSTOMER is unable
to meet its commitments as a direct result of a force majeure condition,
CUSTOMER may suspend its commitments for one full billing month (or longer, with
AT&T's written consent, which shall not be unreasonably withheld). The effect of
such a suspension of commitment will be to exclude the affected month(s) from
all calculations' affecting the CUSTOMER's commitments and to extend the term of
this Agreement by the same number of months. CUSTOMER must provide notice to
AT&T of the force majeure condition giving rise to the right to suspend
commitments within 30 days after its occurrence.

16. INDEMNIFICATION. CUSTOMER shall indemnify, defend, and hold harmless AT&T
and its Affiliates, directors, officers, employees, agents, successors and
assigns from any and all claims, damages and expenses whatsoever (including
reasonable attorneys' fees) arising on account of or in connection with
CUSTOMER's use, resale or sharing of the Services, including but not limited to:
(a) claims for libel, slander, invasion of privacy; (b) claims for infringement
of copyright arising from any communication using the Services; (c) claims
arising from any failure, breakdown, interruption or deterioration of service
provided by AT&T to CUSTOMER or by CUSTOMER to End Users or Intermediate
Providers; (d) claims arising from CUSTOMER's marketing efforts; and (e) claims
of patent infringement arising from combining or using services or equipment
furnished by AT&T in connection with services or equipment furnished by others.
CUSTOMER's indemnification obligations do not

                                    AT&T/CUSTOMER CONFIDENTIAL

                                Subject TO NONDISCLOSURE OBLIGATIONS

<PAGE>

                        GENERAL TERMS AND CONDITIONS                      PAGE 4

apply to claims for damages to real or tangible personal property or for bodily
injury or death negligently caused by AT&T.

AT&T shall indemnify, defend, and hold harmless CUSTOMER and its Affiliates,
directors, officers, employees, agents, successors and assigns from all claims
of patent infringement arising solely from the use of the Services. (Whenever
AT&T is responsible under the preceding sentence, AT&T may at its option either
procure the right for CUSTOMER to continue using, or may replace or modify the
alleged infringing Service so that the Service becomes noninfringing. If those
alternatives are not reasonably achievable, AT&T may terminate the affected
Attachment without termination liability to either party.)

The indemnified party under this Section 16: (I) must notify the other party in
writing promptly upon learning of any claim or suit for which indemnification
may be sought, provided that failure to do so shall have no effect except to the
extent the other party is prejudiced thereby; (ii) shall have the right to
participate in such defense or settlement with its own counsel and at its sole
expense, but the other party shall have control of the defense or settlement;
and (iii) shall reasonably cooperate with the defense.

17. USE OF MARKS. Nothing in this Agreement creates in a party any rights in the
other party's trade names, trademarks, service marks or any other intellectual
property. Either party may use the other party's trade names, trademarks, or
service marks only to the extent such use is not prohibited by this Agreement
and is otherwise permitted by law (including but not limited to the Lanham Act).
In no event shall either party use or display, in advertising or otherwise, any
of the other party's logos, trade dress, trade devices or other indicia of
origin, or any confusingly similar logos, trade dress, trade devices or indicia
of origin. CUSTOMER will not conduct business under any AT&T corporate or trade
name, trademark, service mark, logo, trade dress, trade device, indicia of
origin or other symbol that serves to identify and distinguish AT&T from its
competitors, or under any confusingly similar corporate or trade name,
trademark, service mark, logo, trade dress, trade device, indicia of origin or
other symbol. CUSTOMER will not indicate or imply to any other party that
CUSTOMER is affiliated with AT&T, that CUSTOMER is authorized by AT&T to sell or
provide service to them, that CUSTOMER is providing (or will provide) service to
such party jointly or in collaboration or partnership with AT&T, or as the agent
of AT&T, or that service provided by CUSTOMER or another carrier is provided by
AT&T. Except to the limited extent (if any) as may be required under law,
neither CUSTOMER nor an Intermediate Provider shall indicate or imply to any
existing or potential End User (or Intermediate Provider) that any portion of
the service provided to the End User (or Intermediate Provider) by CUSTOMER or
the Intermediate Provider is provided by AT&T or is carried over the AT&T
network or AT&T facilities.

18. RELATIONSHIP OF THE PARTIES. The relationship between the parties shall
be that of independent contractors and not of principal and agent, employer and
employee, franchiser and franchisee, partners or joint venturers. This Agreement
does not establish CUSTOMER as a dealer, distributor or franchisee of AT&T, and
no fee is being paid to AT&T to enter into this Agreement.

19. CONFIDENTIAL INFORMATION DEFINED. "Confidential Information" consists of the
following: all information disclosed by one party or its agent or representative
(the "Disclosing Party") to the other party or its agent or representative (the
"Receiving Party") in connection with this Agreement regarding the
telecommunications needs of CUSTOMER and/or the telecommunications offerings of
AT&T, to the extent that (a) for information disclosed in written, graphic or
other tangible form, it is designated by appropriate markings to be confidential
or proprietary or (b) for information disclosed orally, it is both identified as
proprietary or confidential at the time of disclosure and summarized in a
writing so marked within 15 business days following the oral disclosure.
Notwithstanding the foregoing, all written or oral pricing and contract
proposals exchanged between the parties shall be Confidential Information,
whether or not so designated. Confidential Information is the property of the
Disclosing Party and shall be returned to the Disclosing Party upon request.
This Agreement is Confidential Information as to which each party is both a
Disclosing Party and a Receiving Party. Information that (i) is independently
developed by the Receiving Party, (ii) is lawfully received by the Receiving
Party free of any obligation to keep it confidential, or (iii) BECOMES generally
available to the public other than by breach of this Agreement, shall not be
Confidential Information.

20. CONFIDENTIALITY OBLIGATIONS. A Receiving Party shall hold all Confidential
Information in confidence from the time of disclosure until at least 3 years
following its disclosure (except with respect to Software, which shall be held
in confidence indefinitely). During that period, the Receiving Party: (a) shall
use such Confidential Information only for the purposes of performing this
Agreement and using the Services; (b) shall reproduce such Confidential
Information only to the extent necessary for such purposes; (c) shall restrict
disclosure of such Confidential Information to employees that have a need to
know for such purposes; (d) shall advise those employees of the obligations of
this Agreement; (e) shall not disclose Confidential Information to any third
party without prior written approval of the Disclosing Party except as expressly
provided in this Agreement; and (f) shall use at least the same degree of care
(in no event less than reasonable care) as it uses with regard to its own
proprietary or confidential information to prevent the disclosure, unauthorized
use or publication of Confidential Information.

                                     AT&T/CUSTOMER CONFIDENTIAL

                                Subject to Nondisclosure Obligations

<PAGE>

                        GENERAL TERMS AND CONDITIONS                      PAGE 5

21. PUBLICITY. No public statements or announcements relating to this Agreement
shall be issued by either party without the prior written consent of the other
party.

22. ALTERNATIVE DISPUTE RESOLUTION. The parties will attempt to settle any claim
for non-payment of charges or recovery of overpayment of charges for the
Services (hereinafter a "Billing Dispute"), through good faith negotiations. The
parties may agree to submit a Billing Dispute to non-binding mediation. At any
time, the party seeking payment may submit a notice of arbitration of a Billing
Dispute for arbitration under the United States Arbitration Act pursuant to the
terms of this Section and the Non-Administered Arbitration Rules of the CPR
Institute for Dispute Resolution ("CPR"), to the extent such rules do not
conflict. The Arbitration will be held in New York, New York, or any other
location selected by mutual agreement of the parties. The arbitrator shall not
have the power to award any damages in excess of the limits set forth in or
excluded under the limitations of liability provided in this Agreement. The
arbitrator may not limit, expand or otherwise modify the terms of this
Agreement. The arbitrator shall strictly limit discovery to the production of
documents directly relevant to the facts alleged in the notices of arbitration
and defense. If depositions are required, the arbitrator shall permit each Party
to conduct an equal number of depositions (not to exceed five per side), with
equal limits on the number of deposition hours for each Party (not to exceed 7
per deposition). If an evidentiary hearing is held, each Party's presentation of
its case shall be limited to three (3) days. Requests for temporary injunctive
relief may be submitted to a court of competent jurisdiction if the arbitrator
has not yet been appointed, but the arbitrator shall have the authority to
modify any injunctive relief granted by such a court. The arbitration award
shall be made final within eight months of filing of the notice of arbitration
and judgment upon the award may be entered in any court having competent
jurisdiction. All participants and the arbitrator shall hold the existence,
content and results of mediation and arbitration in confidence, except as
necessary to enforce a final settlement agreement or to enforce an arbitration
award. Each party shall bear its own expenses and equally share expenses related
to the compensation of the arbitrator. The arbitrator's award shall be in
writing and shall state the reasons for the award.

23. TIME TO BRING CLAIMS. Any initial demand for arbitration pursuant to this
Agreement, and any legal action arising under this Agreement, must be initiated
within two years after the cause of action arises.

24. NOTICES. All notices under this Agreement shall be in writing and shall be
made: (a) by personal delivery; (b) by certified or registered mail, postage
prepaid return receipt requested, (c) by overnight delivery, or (d) by facsimile
transmission. Notice shall be sent to the individuals identified on the Cover
Sheet (at the address and/or fax number designated for notice), or to such other
individual, address or fax number as a party may designate by notice to the
other party.

25. EQUIPMENT. AT&T shall retain title to all of its equipment and facilities
used to provide service under this Agreement. CUSTOMER will pay reasonable
shipping charges for delivery to CUSTOMER's premises of AT&T equipment used to
provide Service under this Agreement CUSTOMER is liable to AT&T for the
replacement cost of any AT&T-provided equipment installed at CUSTOMER's premises
in the event of loss of said equipment for any reason, including but not limited
to theft.

26. EXPORT REGULATIONS. The parties acknowledge that the Services and Software
may be subject to U.S. export laws and regulations. If requested, CUSTOMER will
sign assurances and other export-related documents required for AT&T to comply
with U.S. export regulations.

27. QUALITY MONITORING. CUSTOMER authorizes AT&T to monitor and record calls to
AT&T concerning the Services for training and quality control purposes.

28. ASSIGNMENT. This Agreement may not be assigned by either party except that
either party may assign its rights or delegate its duties under this Agreement
to an Affiliate of that party, and either party may assign this Agreement to a
successor, provided that an assignee of CUSTOMER must satisfy the requirements
of Section 7 of these General Terms and Conditions.

29. NO THIRD PARTY BENEFICIARIES. This Agreement does not expressly or
implicitly provide any third party (including but not limited to End Users and
Intermediate Providers) with any remedy, claim, liability, reimbursement, cause
of action or other right or privilege.

30. NON-WAIVER. The failure of a party to enforce any right under this Agreement
at any particular point in time shall not constitute a continuing waiver of any
such right with respect to the remaining term of this Agreement, or the waiver
of any other right under this Agreement.

31. SEVERABILITY. If any portion of this Agreement is found to be invalid or
unenforceable, the remaining provisions shall remain in effect and the parties
shall immediately begin negotiations to replace any invalid or unenforceable
portions that are essential parts of this Agreement.

32. SURVIVAL OF TERMS. The rights and obligations of either party that by their
nature would continue beyond the termination or expiration of this Agreement
shall survive termination or expiration of this Agreement. For example, the
provisions of this Agreement regarding Confidentiality shall remain in effect
following termination of this Agreement and the provisions of this Agreement
regarding arbitration, use of Marks, indemnification, and/or limitation of
liability shall survive termination of this Agreement as to any cause of action
arising under the Agreement

33. CHOICE OF LAW. The domestic law of the State of New York, except its
conflict-of-laws rules, shall govern the construction, interpretation, and
performance of this Agreement, except to the extent superceded by federal

                                    AT&T/CUSTOMER CONFIDENTIAL

                                Subject to Nondisclosure Obligations

<PAGE>

                        GENERAL TERMS AND CONDITIONS                      Page 6

law. The United Nations Convention on Contracts for International Sale of Goods
shall not apply.

34. AMENDMENT. No amendment, supplement, modification or waiver of any provision
of this Agreement shall be effective unless in writing and signed by authorized
representatives of both parties.

35. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties with respect to the Services. This Agreement supersedes all prior
agreements, proposals, representations, statements or understandings, whether
written or oral, concerning the Services or the parties' rights or obligations
relating to the Services. Any prior representations, promises, inducements or
statements of intent regarding the Services that are not embodied in this
Agreement are of no effect.

36. DEFINITIONS. The following definitions apply in addition to the definitions
set forth elsewhere in this Agreement:

"Affiliate" means any entity that controls, is controlled by or is under common
control with a party.

"Content" means information made available, displayed or transmitted (including
information made available by means of an HTML "hot link", a third party posting
or similar means) in connection with a Service including all trademarks, service
marks and domain names contained therein, Customer and User data, and the
contents of any bulletin boards or chat forums, and, all updates, upgrades,
modifications and other versions of any of the foregoing.

"End User" or "User" means the entity that uses the service furnished under this
Agreement for its own use, and not for purposes of providing telecommunications
services to others.

"Intermediate Provider" means any provider or other intermediary (other than
CUSTOMER or its agents or employees) in the sales chain between CUSTOMER and an
End User.

"Master Agreement" means the Agreement.

"Service Guide" means the AT&T Business Service Guide, as amended from time to
time, accessible via the Internet at http:llserviceauide.att.com, unless
otherwise 'defined in an Attachment. With respect to Service provided by AT&T
under tariff, "Service Guide" means the tariffs applicable to the provision of
such Service, as amended from time to time. Any references in the Attachments to
"Tariffs", with respect to services that are no longer provided under tariff,
will be deemed reference to the Service Guide, which is the successor document
to interexchange tariffs that have been withdrawn as a result of detariffing.

If not otherwise defined, capitalized terms shall be defined as provided in the
Service Guide.

 --------------------------END OF TERMS AND CONDITIONS-------------------------

                                    AT&T/CUSTOMER CONFIDENTIAL

                                Subject to Nondisclosure Obligations

<PAGE>

AT&T Data Service Terms and Pricing                                 Page 1 of 10

                 AT&T DATA SERVICE TERMS AND PRICING ATTACHMENT

CUSTOMER Name (Full Legal Name): Valor Telecommunications of Texas L.P. d/b/a
                                 Valor Telecom

Date of Execution of Master    ________________ (by CUSTOMER) Agreement:

                               ________________ ( AT&T)

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

1.    SERVICES PROVIDED. AT&T will provide the following Services to CUSTOMER
      under this Attachment and pursuant to the terms of the Master Agreement
      and the applicable provisions of the AT&T Service Guide.

1.1. AT&T Private Line Services.

1.2. AT&T Local Channel Services.

1.3. AT&T International Satellite Services.

1.4. AT&T Frame Relay Services.

2.    Term. The Term of this Attachment consists of a Full Service Period of 43
      months and a Ramp Down Period of up to 12 months. CUSTOMER may elect to
      extend the Full Service Period for an additional 12 months by providing
      notice of such election to AT&T at least 60 days prior to the end of the
      original Full Service Period. Upon expiration of the Term, this Attachment
      will remain in effect on a month-to-month basis, and all rates and charges
      will be subject to change by AT&T upon thirty days' notice.

2.1.        Rate Effective Date. The rates, terms and conditions of this
            Attachment are effective as of the date on which this Attachment is
            made part of the Agreement (i.e., on the date the Agreement is
            initially executed by both parties or, if this Attachment is not
            part of the Agreement as initially executed, on the date the
            Agreement is thereafter amended to include this Attachment) which
            date is referred to as the "Rate Effective Date".

2.2.        Full Service Period; CISD. The Full Service Period begins on the
            first day of the first full bill cycle in which Service is provided
            under this Attachment, which day is referred to as the Customer's
            Initial Service Date (CISD). If different Services provided under
            this Attachment have different billing cycles, the billing months
            will be staggered, and the Full Service Period with respect to each
            Service will begin on the first day of the applicable bill cycle
            following the CISD. For each Service, however, the Full Service
            Period will begin less than one month after the CISD. The CISD is
            August 1, 2002.

2.3.        Component Term. A twelve-month Component Term applies for each
            Interoffice Channel (IOC) and Local Channel ordered under this
            Attachment. The Component Term

                           AT&T/CUSTOMER PROPRIETARY

                      Use Pursuant to Company Instructions

<PAGE>

AT&T Data Service Terms and Pricing                                 Page 2 of 10

            for each such component begins on the date AT&T completes
            installation of the component.

2.4.        Ramp-Down Period. The Ramp-Down Period begins on the first day after
            the end of the Full Service Period, and ends on the last day of the
            last remaining Component Term. CUSTOMER may not submit new service
            orders under this Agreement during the Ramp-Down Period. During the
            Ramp-Down Period, all rates and charges (other than rates and
            charges applicable to channels with an unexpired Component Term) are
            subject to change by AT&T upon thirty days' notice.

3.    MINIMUM REVENUE COMMITMENTS. The following Minimum Revenue Commitments
      apply under this Attachment. For each Minimum Revenue Commitment, CUSTOMER
      commits that the Eligible Charges it incurs during each Commitment Period
      will equal or exceed the amount of the commitment. If CUSTOMER fails to
      meet any Minimum Revenue Commitment in a Commitment Period, then CUSTOMER
      will pay a Shortfall Charge equal to the difference between the Minimum
      Revenue Commitment and the amount of Eligible Charges for that Minimum
      Revenue Commitment incurred during the Commitment Period.

3.1.  MINIMUM MONTHLY REVENUE COMMITMENT (MMRC)

   3.1.1.     The MMRC for months 1 through 31 of this Attachment is $[*****].
              The MMRC f or months 32 through 43 of this Attachment is
              $[*****]. Each month of the Full Service Period is a Commitment
              Period. There is no MMRC during the Ramp-Down Period.

   3.1.2.     The MMRC Eligible Charges consist of the net Monthly Recurring
              Charges, prior to the application of any discounts or credits,
              for the Services provided under this Attachment.

4.    RATES AND CHARGES. The rates and charges for the Services provided under
      this Attachment are as provided in the Service Guide, except as specified
      in this Attachment. AT&T reserves the right to change from time to time
      the rates for Services under this Agreement, regardless of any provisions
      that would otherwise stabilize rates or limit rate increases, to
      reasonably reflect charges or payment obligations imposed on AT&T stemming
      from an order, rule or regulation of the Federal Communications Commission
      or a court of competent jurisdiction, concerning universal service fund
      ("USF") charges, or other governmental charges or fees imposed in
      connection with the provision of Services.

      Custom pricing may apply for specific service components on an individual
      case basis to the extent provided in a Supplemental Pricing Schedule
      executed by authorized representatives of each party. A Minimum In-Service
      Period applies for each Service Component ordered as stated on the
      Supplemental Pricing Schedule. If a service component is disconnected
      prior to the end of the Minimum In-Service Period, CUSTOMER will be billed
      the Recurring Monthly Rate for that service component for each month
      remaining in the Minimum In-Service Period.

                           AT&T/CUSTOMER PROPRIETARY
                      Use Pursuant to Company Instructions

CONFIDENTIAL
<PAGE>

AT&T Data Service Terms and Pricing                                 Page 3 of 10

4.1.  AT&T PRIVATE LINE SERVICES - INTER OFFICE CHANNELS., The following monthly
      charges apply for the listed domestic services in lieu of the Inter Office
      Channel (IOC) monthly charges applicable under the Service Guide. The
      monthly charge varies based on the IOC rate mileage. For an IOC with rate
      mileage of 100 miles or less, the monthly charge is a fixed charge. For an
      IOC with rate mileage of more than 100 miles, the monthly charge is the
      product of the per mile charge set forth in the following chart
      (determined based on IOC rate mileage), times the rate mileage of the IOC.

4.1.1. AT&T Private Line SONET OC12 Service

<TABLE>
<CAPTION>
IOC RATE MILEAGE     FIXED MONTHLY CHARGE     PER MILE CHARGE
----------------     --------------------     ---------------
<S>                  <C>                      <C>
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
</TABLE>

4.1.2. ACCUNET SONET T155 Service

<TABLE>
<CAPTION>
IOC RATE MILEAGE     FIXED MONTHLY CHARGE     PER MILE CHARGE
----------------     --------------------     ---------------
<S>                  <C>                      <C>
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
</TABLE>

                           AT&T/CUSTOMER PROPRIETARY
                      Use Pursuant to Company Instructions

CONFIDENTIAL
<PAGE>

AT&T Data Service Terms and Pricing                                 Page 4 of 10

4.1.3. ACCUNET T45 Service, International ACCUNET T45 Service to Canada,
       International ACCUNET T45 Service to Mexico.

<TABLE>
<CAPTION>
IOC RATE MILEAGE     FIXED MONTHLY CHARGE     PER MILE CHARGE
----------------     --------------------     ---------------
<S>                  <C>                      <C>
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
</TABLE>

4.1.4. ACCUNET T1.5 Service, International ACCUNET T1.5 Service-Canada,
       International ACCUNET T1.5 Service-Mexico. The following monthly charges
       apply for the listed domestic services installed on or before April 30,
       2004 in lieu of the Inter Office Channel (IOC) monthly charges applicable
       under the Service Guide.

<TABLE>
<CAPTION>
IOC RATE MILEAGE     FIXED MONTHLY CHARGE     PER MILE CHARGE
----------------     --------------------     ---------------
<S>                  <C>                      <C>
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
</TABLE>

4.1.5. ACCUNET T1.5 Service, International ACCUNET T1.5 Service-Canada,
       International ACCUNET T1.5 Service-Mexico. The following monthly charges
       apply for the listed domestic services installed on or after May 1, 2004
       in lieu of the Inter Office Channel (IOC) monthly charges applicable
       under the Service Guide.

                           AT&T/CUSTOMER PROPRIETARY
                      Use Pursuant to Company Instructions

CONFIDENTIAL

<PAGE>

AT&T Data Service Terms and Pricing                                 Page 5 of 10

<TABLE>
<CAPTION>
IOC RATE MILEAGE     FIXED MONTHLY CHARGE     PER MILE CHARGE
----------------     --------------------     ---------------
<S>                  <C>                      <C>
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
   [*****]             $     [*****]             $   [*****]
</TABLE>

4.2. AT&T FRAME RELAY SERVICES (FRS).

  4.2.1.    FRS DOMESTIC ACCESS PORT CHARGES - A "Domestic Access Port" consists
            of the following service components: one (1) Domestic Port, one (1)
            Access Connection, one (1) Digital Local Channel, and one (1) Access
            Coordination Function. When CUSTOMER orders those service components
            together as a unit at the same location, that is, as a Domestic
            Access Port, CUSTOMER will be billed the Monthly Recurring Charges
            set forth in the following table, in lieu of the individual service
            component charges set forth in the applicable provisions in the AT&T
            Business Service Guide:

<TABLE>
<CAPTION>
                                   NON,
                                RECURRING
                               INSTALLATION
PORT SPEED    DOMESTIC PORT       CHARGE
----------    -------------    ------------
<S>           <C>              <C>
 [*****]      $     [*****]    $   [*****]
 [*****]      $     [*****]    $   [*****]
 [*****]      $     [*****]    $   [*****]
 [*****]      $     [*****]    $   [*****]
 [*****]      $     [*****]    $   [*****]
 [*****]      $     [*****]    $   [*****]
 [*****]      $     [*****]    $   [*****]
</TABLE>

                           AT&T/CUSTOMER PROPRIETARY
                      Use Pursuant to Company Instructions

CONFIDENTIAL
<PAGE>

AT&T Data Service Terms and Pricing                                 Page 6 of 10

<TABLE>
<S>              <C>                 <C>
[*****]          $   [*****]         $    [*****]
[*****]          $   [*****]         $    [*****]
[*****]          $   [*****]         $    [*****]
[*****]          $   [*****]         $    [*****]
[*****]          $   [*****]         $    [*****]
[*****]          $   [*****]         $    [*****]
[*****]          $   [*****]         $    [*****]
[*****]          $   [*****]         $    [*****]
</TABLE>

  4.2.2 DOMESTIC FRS PVC MONTHLY RECURRING CHARGES

<TABLE>
<CAPTION>
 PVC CIR         ASYMMETRICAL CHARGE        SYMMETRICAL CHARGE
---------        -------------------        ------------------
<S>              <C>                        <C>
[*****]            $       [*****]             $      [*****]

[*****]            $       [*****]             $      [*****]

[*****]            $       [*****]             $      [*****]

[*****]            $       [*****]             $      [*****]

[*****]            $       [*****]             $      [*****]

[*****]            $       [*****]             $      [*****]

[*****]            $       [*****]             $      [*****]

[*****]            $       [*****]             $      [*****]

[*****]            $       [*****]             $      [*****]

[*****]            $       [*****]             $      [*****]

[*****]            $       [*****]             $      [*****]

[*****]            $       [*****]             $      [*****]

[*****]            $       [*****]             $      [*****]
</TABLE>

4.3.  AT&T LOCAL CHANNEL SERVICES. The following monthly charges apply for the
      listed services in lieu of the Local Channel Service monthly charges under
      the Service Guide.

  4.3.1. AT&T Terrestrial 1.544 Mbps Local Channel.

                           AT&T/CUSTOMER PROPRIETARY
                      Use Pursuant to Company Instructions

CONFIDENTIAL
<PAGE>

AT&T Data Service Terms and Pricing                                 Page 7 of 10

<TABLE>
<CAPTION>
Mileage
Band               Monthly Charge
----------       -------------------
<S>              <C>
[*****]          $ [*****]
[*****]          $ [*****]
[*****]          $ [*****]
[*****]          $ [*****]
[*****]          $ [*****]
[*****] Miles    $ [*****] plus $  [*****]
                 per mile
</TABLE>

4.4.  AT&T PRIVATE LINE SERVICES - OFFICE FUNCTIONS. The following monthly
      charges apply for the listed services in lieu of the Office Function
      monthly charges applicable under the Service Guide.

<TABLE>
<CAPTION>
OFFICE FUNCTION                                 MONTHLY RECURRING CHARGE
--------------------------------------          ------------------------
<S>                                             <C>
ACCUNET T1.5 Service M-24 Multiplexing                 $ [*****]

ACCUNET T45 Service M-28 Multiplexing                  $ [*****]
</TABLE>

5. DISCOUNTS. The following monthly discounts are the only discounts for the
   Services provided under this Attachment.

5.1.  The following discounts will be applied each month to the undiscounted
      monthly charges for the DSVPP-eligible service components (as defined in
      the Service Guide) for the following Services provided under this
      Attachment:

<TABLE>
<CAPTION>
SERVICE                                                                 DISCOUNT
--------------------------------------------------------------------    --------
<S>                                                                     <C>
AT&T Private Line SONET OC12 Services                                   [*****]

ACCUNET SONET T155 (OC3) Service, International ACCUNET T155            [*****]
Service - Canada, and International ACCUNET T155 Service - Mexico

ACCUNET T45 Service, International ACCUNET T45 Service - Canada, and    [*****]
International ACCUNET T45 Service - Mexico

ACCUNET T1.5 Service, International ACCUNET T1.5 Service - Canada,      [*****]
and International ACCUNET TI.5 Service - Mexico

ACCUNET Fractional T45 Services                                         [*****]
</TABLE>

                            AT&T/CUSTOMER PROPRIETARY
                      Use Pursuant to Company Instructions

CONFIDENTIAL

<PAGE>

AT&T Data Service Terms and Pricing                                 Page 8 of 10

<TABLE>
<CAPTION>
SERVICE                                                                 DISCOUNT
--------------------------------------------------------------------    --------
<S>                                                                     <C>
ACCUNET Spectrum of Digital Services (ASDS), International ACCUNET      [*****]
Spectrum of Digital Services (IASDS) - Canada, and International
ACCUNET Spectrum of Digital Services (IASDS) - Mexico (64 kbps and
below)

ACCUNET Spectrum of Digital Services (ASDS), International ACCUNET      [*****]
Spectrum of Digital Services (IASDS) - Canada, and International
ACCUNET Spectrum of Digital Services (IASDS) - Mexico (128 kbps and
above)

AT&T International Half Channel Service - 155 Mbps                      [*****]

AT&T International Half Channel Service-45 Mbps                         [*****]

International ACCUNET 2.048 Mbps Service-Mexico                         [*****]

AT&T International Full Channel Service                                 [*****]

AT&T International Half Channel Service - 2.048 Mbps and below          [*****]

AT&T International Satellite Shared Earth Station Service               [*****]

ACCUNET Generic Digital Access (AGDA) Service                           [*****]

Voice Grade (VG) Local Channel Seryice                                  [*****]

AT&T Terrestrial 1.544 Mbps Local Channel Service                       [*****]

AT&T Terrestrial 45 Mbps Local Channel Service

-     Region 1 Local Channel                                            [*****]

-     Region 2 Local Channel                                            [*****]

-     Region 3 Local Channel                                            [*****]

-     Region 4 Local Channel                                            [*****]

-     Region 5 Local Channel                                            [*****]

-     Region 6 Local Channel                                            [*****]
</TABLE>

                            AT&T/CUSTOMER PROPRIETARY
                      Use Pursuant to Company Instructions

CONFIDENTIAL
<PAGE>

AT&T Data Service Terms and Pricing                                 Page 9 of 10

<TABLE>
<CAPTION>
SERVICE                                                                 DISCOUNT
--------------------------------------------------------------------    --------
<S>                                                                     <C>
-     Region 7 Local Channel                                             [*****]
</TABLE>

5.2   AT&T FRAME RELAY SERVICE

<TABLE>
<CAPTION>
SERVICE                                                                 DISCOUNT
--------------------------------------------------------------------    --------
<S>                                                                     <C>
Domestic National Frame Relay Service, Bilateral Frame Relay              [*****]

Local Frame Relay Service                                                 [*****]

International Frame Relay Service (E2E FRS and Private IP VPN             [*****]
International Service) - International Rate Schedule B
</TABLE>

6.    CREDITS AND WAIVERS. The following credits and waivers are the only
      credits and waivers that apply to the Services provided under this
      Attachment. No other promotions, credits or waivers apply.

6.1.        INSTALLATION CHARGE WAIVER. AT&T will waive the Installation Charges
            associated with the installation of the following service components
            provided under this Attachment. Each service component installed
            subject to an Installation Charge waiver is subject to a
            twelve-month minimum in-service period. If any service component is
            disconnected prior to the end of the minimum in-service period,
            CUSTOMER will be billed for the Installation Charges previously
            waived for that service component, prorated based on the percentage
            of the minimum in-service period for which the service component was
            kept in service.

 6.1.1. DSVPP-eligible service components (as defined in the Service Guide)

6.2.  MONTHLY CHARGE WAIVER. AT&T will waive the monthly charges for the
      following DSVPP-eligible service components:

 6.2.1. Access Connections associated with the following Services:

   6.2.1.1. AT&T Private Line SONET OC12 Service

   6.2.1.2.    ACCUNET SONET T155 (OC3) Service, International ACCUNET
               T155 Service - Canada, and International ACCUNET T155
               Service - Mexico

   6.2.1.3.    ACCUNET T45 Service, International ACCUNET T45 Service - Canada,
               and International ACCUNET T45 Service - Mexico

                            AT&T/CUSTOMER PROPRIETARY
                      Use Pursuant to Company Instructions

<PAGE>

AT&T Data Service Terms and Pricing                                Page 10 of 10

   6.2.1.4. ACCUNET T1.5 Service, International ACCUNET T1.5 Service - Canada,
            and International ACCUNET T1.5 Service - Mexico

 6.2.2.     Access Coordination Function (ACF) associated with Local Channels
            for the following Services (if a Local Channel is disconnected
            before it has been in service for twelve months, the CUSTOMER will
            be billed for the previously waived monthly charges for the ACF
            associated with the disconnected Local Channel):

   6.2.2.1. AT&T Terrestrial T45 Mbps Local Channel Service

   6.2.2.2. AT&T Terrestrial T1.544 Mbps Local Channel Service

   6.2.2.3. ACCUNET Generic Digital Access (AGDA) Service

7.    CLASSIFICATIONS, PRACTICES AND REGULATIONS. Except as otherwise provided
      in this Attachment, the rates and regulations that apply to the Services
      provided under this Attachment are as set forth in the Service Guide.

8.    TERMINATION CHARGE. The following provision applies in lieu of any
      Discontinuance With or Without Liability provisions specified in the
      Service Guide.

8.1.  If CUSTOMER terminates this Attachment or the Service provided under this
      Attachment prior to the end of the Term (other than as the result of a
      material breach by AT&T), or if AT&T terminates this Attachment or the
      Service provided under this Attachment prior to the end of the Term due to
      CUSTOMER's material breach of the Agreement, CUSTOMER will be billed a
      Termination Charge. The Termination Charge will be an amount equal to 50%
      of the unsatisfied Minimum Revenue Commitments) for the Commitment
      Period(s) in whi6h the termination occurs; plus 50% of the Minimum Revenue
      Commitments for each Commitment Period remaining in the Term. In addition,
      CUSTOMER will be billed (1) any applicable Component Termination Charges,
      and (2) an amount equal to the sum of any credits specified in this
      Attachment.

8.2.  If CUSTOMER discontinues a service component prior to the end of the
      applicable Component Term (other than as a result of a material breach by
      AT&T), or if AT&T discontinues a service component prior to the end of the
      Component Term due to CUSTOMER's material breach of the Agreement,
      CUSTOMER will be liable for a Component Termination Charge equal to 100%
      of the Monthly Recurring Charges for each month remaining in the
      applicable Component Term. No Component Termination Charge will apply
      during the Full Service Period if an IOC is replaced with the same type of
      component, with a higher speed. The replacement component must between the
      same two points. In all cases, the replacement component will be subject
      to a new Component Term of twelve months.

--------------------------------------------------------------------------------
                                End of Attachment

                            AT&T/CUSTOMER PROPRIETARY
                      Use Pursuant to Company Instructions

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