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INTERCONNECTION AGREEMENT - TEXAS

This Interconnection Agreement - Texas (Agreement) is between Sage Telecom of Texas, L.P., (“CLEC”) having an office at 805 Central Expressway South, Suite 100, Allen, Texas 7501 3-2789, and southwestern Bell Telephone, L.P. d/b/a SBC TEXAS (“SBC TEXAS”), a Texas Limited Partnership, having its principal office at One Bell Plaza, 208 S. Akard, Dallas, Texas 75202 (collectively the Parties).

WHEREAS, pursuant to Section 251 and 252 of the Telecommunications Act of 1996 (the Act), the Parties wish to establish terms for the resale of SBC TEXAS services and for the provision by SBC TEXAS of Interconnection, unbundled Network Elements, and Ancillary Functions as designated in the Attachments hereto.

WHEREAS, CLEC wishes to enter an agreement containing those terms and conditions.

NOW, THEREFORE, in consideration of the premises and the mutual covenants of this Agreement CLEC and SBC TEXAS hereby agree as follows:

1 .o DE FIN ITIONS

1.1 Capitalized Terms used in this Agreement shall have the respective meanings specified below, in Section 1.x of each Appendix attached hereto, andor as defined elsewhere in this Agreement.

1.1.1 “Accessible Letters” are correspondence used to communicate pertinent information regarding SBC TEXAS to the client/End User community.

1.1.2 “Act” means the Communications Act of 1934 [47 U.S.C. 1531, as amended by the Telecommunications Act of 1996, Public Law 104-104, 110 Stat. 56 (1996) codified throughout 47 U.S.C.

1.1.3 “Affiliate” is As Defined in the Act.

1.1.4 “Alternate Billing Service” (ABS) means a service that allows End Users to bill calls to accounts that may not be associated with the originating line. There are three types of ABS calls: calling card, collect and third number billed calls.

1.1.5 “Applicable Law” means all laws, statutes, common law, regulations, ordinances, codes, rules, guidelines, orders, permits, tariffs and approvals, including those relating to the environment or health and safety, of any Governmental Authority that apply to the Parties or the subject matter of this Agreement.

1.1.6 “As Defined in the Act” means as specifically defined by the Act.

SBC & Sage Agree BoldKJnderline Represents Language Proposed bv Sage and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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1.1.7 “Business Day” means Monday through Friday, excluding holidays on which SBC TEXAS does not provision new retail services and products.

1.1.8 “CABS” means the Carrier Access Billing System.

1.1.9 “Claim” means any pending or threatened claim, action, proceeding or suit.

I . l . 10 “Commission” means the Public Utility Commission of Texas (PUC-TX).

1.1.11 “Consequential Damages” means Losses claimed to have resulted from any indirect, incidental, reliance, special, consequential, punitive, exemplary, multiple or any other Loss, including damages claimed to have resulted from harm to business, loss of anticipated revenues, savings, or profits, or other economic Loss claimed to have been suffered not measured by the prevailing Party’s actual Damages, and regardless of whether the Parties knew or had been advised of the possibility that such Damages could result in connection with or arising from anything said, omitted, or done hereunder or related hereto, including willful acts or omissions.

1.1.12 “Customer Usage Data” means the Telecommunications Services usage data of a CLEC End User measured in minutes, sub-minute increments, message units, or otherwise, that is recorded by SBC TEXAS and forwarded to CLEC.

1.1.13 “Dialing Parity” is As Defined in the Act. As used in this Agreement, Dialing Parity refers to both Local Dialing Panty and Toll Dialing Parity.

1.1.14 “End User(s)” means a Third Party residence or business that subscribes to Telecommunications Services provided by any of the Parties at retail. As used herein, the term “End Users” does not include any of the Parties to this Agreement with respect to any item or service obtained under this Agreement.

1.1.15 “Exchange Access” is As Defined in the Act.

1.1.16 “Exchange Service” means Telephone Exchange Service, As Defined in the Act.

1.1.17 “FCC” means the Federal Communications Commission.

1.1.18 “Fraud Monitoring System” means an off-line administration system that monitors suspected occurrences of ABS-related fraud.

1.1.19 “Governmental Authority” means any federal, state, local, foreign, or international court, government, department, Commission, board, bureau, agency, official, or other regulatory, administrative, legislative, or judicial authority with jurisdiction over the subject matter at issue.

SBC & Sage Agree Bold/Underline Represents Languape Proposed bv Sage and opposed by SBC Bold Represents Language Proposed by SBC and opposed by Sage

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1.1.20 “Incumbent Local Exchange Carrier” (ILEC) is As Defined in the Act.

1.1.2 1 “Intellectual Property” means copyrights, patents, trademarks, trade secrets, mask works and all other intellectual property rights.

1.1.22 “Interconnection” is As Defined in the Act.

1.1.23 “InterLATA” is As Defined in the Act.

1.1.24 “Local Access Transport Area” (LATA) is As Defined in the Act.

1.1.25 “Local Exchange Carrier” (LEC) is As Defined in the Act.

1.1.26 “Loss(es)” or “Damage(s)” means any and ail losses, costs (including court costs), claims, damages (including fines, penalties, and criminal or civil judgments and settlements), injuries, liabilities and expenses (including attorneys’ fees).

1.1.27 “Party” means either CLEC or SBC TEXAS. “Parties” means both CLEC and SBC TEXAS.

1.1.28 “Point of Interconnection” (POI) is a physical location at which the Parties’ networks meet for the purpose of establishing Interconnection. POIs include a number of different technologies and technical interfaces based on the Parties’ mutual agreement.

1.1.29 “Referenced Instrument” refers to a technical reference, technical publication, CLEC Practice, SBC TEXAS Practice, any publication of Telecommunications industry administrative or technical standards, or any other document specifically incorporated into this Agreement

1.1.30 “Referral Announcement” refers to a process by which calls are routed to an announcement that states the new telephone number of an End User.

1.1.31 “Telecommunications” is As Defined in the Act.

1.1.32 “Telecommunications Carrier” is As Defined in the Act.

1.1.33 “Telecommunications Service” is As Defined in the Act.

1.1.34 “Telephone Exchange Service” is As Defined in the Act.

1.1.35 “Third Party” means any Person other than a Party.

SBC & Sage Agree Bold/Underline Represents Laneuape Proposed by Sage and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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INTRODUCTION

This Agreement sets forth the terms, conditions and prices under which SBC TEXAS agrees to provide (a) services for resale (hereinafter referred to as Resale services), (b) unbundled network elements, or combinations of such network elements (combinations), (c) ancillary functions and (d) Interconnection to CLEC. This Agreement also sets forth the terms and conditions for the interconnection of CLEC’s network to SBC TEXAS network and reciprocal compensation for the transport and termination of Telecommunications.

Subject to the provisions of Attachment 6: Unbundled Network Elements and upon CLEC request, SBC TEXAS shall meet its combining obligations involving UNEs as and to the extent required by FCC rules and orders, and Verizon Comm. Inc. v. -9 FCC 535 U.S. 467(May 13, 2002) (“Verizon Comm. Inc.”) and, to the extent not inconsistent therewith, the rules and orders of relevant state Commission and any other Applicable Law. The Network Elements, Combinations provided pursuant to this Agreement may be connected to other Network Elements, Combinations provided by SBC TEXAS or to any network components provided by CLEC itself or by any other vendor. Subject to the requirements of this Agreement, CLEC may at any time add, delete, relocate or modify the Network Elements or Combinations purchased hereunder.

In the event that SBC TEXAS denies a request to perform the functions necessary to combine UNEs or to perform the functions necessary to combine UNEs with elements possessed by CLEC, SBC TEXAS shall provide written notice to CLEC of such denial and the basis thereof, in accordance with the procedures in Attachment 6: Unbundled Network Elements. Any dispute over such denial shall be addressed using the dispute resolution procedures applicable to this Agreement. In any dispute resolution proceeding, SBC TEXAS shall have the burden, to prove that such denial meets one or more applicable standards for denial, including without limitation those under the FCC rules and orders, Verizon Comm. Inc. and the Agreement, including Section 2.12 of Attachment 6: Unbundled Network Elements Appendix. Except as provided in this Apreement, durinp the term of this Agreement, SBC TEXAS will not discontinue, as to CLEC, any Network Element, Combination, o r Ancillary Functions offered to CLEC hereunder. This Section is not intended to imeair SBC TEXAS’ abilitv to make chanpes in its Network, so long as such chanpes are consistent with the Act and do not result in the discontinuance of the offerinm of Network Elements, Combinations, or Ancillarv Functions made by SWBT to CLEC as set forth in an during the terms of this Aweement.

SBC TEXAS may fulfill the requirements imposed upon it by this Agreement by itself or may cause its Affiliates to take such actions to fulfill the responsibilities.

SBC & Sage Agree BoldKJnderline Represents Lanpuaee Proposed bv Sage and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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This Agreement includes and incorporates herein the Attachments listed in Section 64 of this Agreement, and all accompanying Appendices, Addenda and Exhibits.

Except as required bv law or by Commission Order, SBC TEXAS’ obligations under this agreement shall only apply to the specific operating area(s) or portion thereof in which SBC TEXAS is then deemed to be the ILEC under the Act (the “ILEC Territory”), and only to the extent that the CLEC is operating and offering service to End Users identified to be residing in such ILEC Territory, except as specifically addressed in the Attachment 6: Unbundled Network Elements.

Except as required bv law or bv Commission Order, this Agreement sets forth the terms and conditions under which SBC TEXAS agrees to furnish CLEC with access to unbundled network elements (UNEs), Collocation and Resale in SBC TEXAS’ incumbent local exchange areas for the provision by CLEC of a Telecommunications Service. (Act, Section 25 1 (c)). The Parties acknowledge and agree that SBC TEXAS is only obligated to provide UNEs, Collocation and Resale and to provide access to UNEs, Collocation and Resale to CLECs in SBC TEXAS’ incumbent local exchange area and has no obligation to provision UNEs, Collocation and Resale, or provide access to UNEs, Collocation and Resale outside of SBC TEXAS’ incumbent local exchange area. Therefore, the Parties understand and agree that the rates, terms and conditions set forth in this Agreement, and any associated provisions set forth in the Attachments, Appendices, Schedules and/or Exhibits in this Agreement (including but not limited to the associated UNE, Collocation and Resale rates set forth in the Appendix Pricing to this Agreement), shall only apply and be available to CLEC when operating as a competitive local exchange carrier in SBC TEXAS’ incumbent local exchange area and only when this Agreement has been approved by the Commission. This Agreement sets forth the terms and conditions pursuant to which SBC TEXAS agrees to provide CLEC with access to unbundled network elements (UNEs), Collocation and Resale in SBC TEXAS’ incumbent local exchange areas for the provision of CLEC’s Telecommunications Services ((Act, Section 25 l(c)). The Parties acknowledge and agree that SBC TEXAS is only obligated to make available UNEs, Collocation and Resale to CLEC in SBC TEXAS’ incumbent local exchange areas. SBC TEXAS has no obligation to provide UNEs, Collocation and Resale to CLEC for the purposes of CLEC providing and/or extending service outside of SBC TEXAS’ incumbent local exchange areas. In addition, SBC TEXAS is not obligated to provision UNEs, Collocation and Resale or provide any other rights under Section 251 (c) of the Act outside of SBC TEXAS’ incumbent local exchange areas. Therefore, the Parties understand and agree that the rates, terms and conditions set forth in this Interconnection Agreement, and any associated provisions set in the Attachments, Appendices, Schedules and/or Exhibits in the CLEC’s current Interconnection Agreement (including but not limited to the associated W E , Collocation and Resale rates set forth in this Agreement), shall only apply and be available to CLEC for provisioning services within an SBC TEXAS incumbent local exchange area(s) in the State in which the CLEC’s Interconnection Agreement has been approved by the Commission and is in effect.

SBC & Sage Agree BoldKJnderline Represents Language Proposed by Sage and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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General Responsibility of the Parties

Each Party is solely responsible for all products and services it provides to its End Users and to other Telecommunications Carriers.

Facilities-based carriers and UNE-based Switch Port providers are responsible for administering their End User records in a LIDB.

At all times during the term of this Agreement, each Party shall keep and maintain in force at its own expense the following minimum insurance coverage and limits and any additional insurance andor bonds required by Applicable Law:

Workers' Compensation insurance with benefits afforded under the laws of each state covered by this Agreement and Employers Liability insurance with minimum limits of $100,000 for Bodily Injury-each accident, $500,000 for Bodily Injury by disease-policy limits and $100,000 for Bodily Injury by disease-each employee.

Commercial General Liability insurance with minimum limits of: $10,000,000 General Aggregate limit; $5,000,000 each occurrence sub-limit for all bodily injury or property Damage incurred in any one occurrence; $1,000,000 each occurrence sub-limit for Personal Injury and Advertising; $10,000,000 Products/Completed Operations Aggregate limit, with a $5,000,000 each occurrence sub-limit for Products/Completed Operations. Fire Legal Liability sub-limits of $2,000,000 are also required if this Agreement involves collocation. The other Party must be named as an Additional Insured on the Commercial General Liability policy.

If use of an automobile is required, Automobile Liability insurance with minimum limits of $1,000,000 combined single limits per occurrence for bodily injury and property Damage, which coverage shall extend to all owned, hired and non-owned vehicles.

Each Party shall require subcontractors providing services under this Agreement to maintain in force the insurance coverage and limits required in Sections 4.3 through 4.3.3 of this Agreement.

The Parties agree that companies affording the insurance coverage required under Section 4.3 shall have a rating of B+ or better and a Financial Size Category rating of VI1 or better, as rated in the A.M. Best Key Rating Guide for Property and Casualty Insurance Companies. Upon request from the other Party, each Party shall provide to the other Party evidence of such insurance coverage.

Each Party agrees to provide the other Party with at least thirty (30) calendar days advance written notice of cancellation, material reduction or non-renewal of any of the insurance policies required herein.

SBC & Sage Agree BoldRJnderline Represents LanPuage Proposed bv Saee and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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4.3.7 Each Party agrees to accept the other Party's program of self-insurance in lieu of insurance coverage if certain requirements are met. These requirements are as follows:

4.3.7.1 The Party desiring to satisfjr its Workers' Compensation and Employers Liability obligations through self-insurance shall submit to the other Party a copy of its Certificate of Authority to Self-Insure its Workers' Compensation obligations issued by the State of Texas covered by this Agreement or the employee's state of hire; and

4.3.7.2 The Party desiring to satisfy its automobile liability obligations through self-insurance shall submit to the other Party a copy of the state-issued letter approving self-insurance for automobile liability issued by each state covered by this Agreement; and

4.3.7.3 The Party desiring to satisfy its general liability obligations through self-insurance must provide evidence acceptable to the other Party that it maintains at least an investment grade (e.g., B+ or higher) debt or credit rating as determined by a nationally recognized debt or credit rating agency such as Moody's, Standard and Poor's or Duff and Phelps.

4.3.8

4.4

4.5

4.6

4.7

This Section 4.3 is a general statement of insurance requirements and shall be in addition to any specific requirement of insurance referenced elsewhere in this Agreement or a Referenced Instrument.

Simultaneously with CLEC's execution of this Agreement, CLEC shall insert it's state specific authorized and nationally recognized OCN/AECNs for facilities-based (Interconnection and/or unbundled network elements) and a separate and distinct OCNIAECN for Resale Services on the signature page of this Agreement and provide SBC TEXAS with a copy.

When an End User changes its service provider from SBC TEXAS to CLEC or from CLEC to SBC TEXAS and does not retain its original telephone number, the Party formerly providing service to such End User shall firnish a Referral Announcement on the original telephone number that specifies the End User's new telephone number.

Each Party shall be responsible for labor relations with its own employees. Each Party agrees to notify the other Party as soon as practicable whenever such Party has knowledge that a labor dispute concerning its employees is delaying or threatens to delay such Party's timely performance of its obligations under this Agreement and shall endeavor to minimize impairment of service to the other Party (for example, by using its management personnel to perform work or by other means) in the event of a labor dispute to the extent permitted by Applicable Law.

This Agreement contains comprehensive OSS terms and conditions, however, CLEC represents, warrants and covenants that it will only use OSS furnished pursuant to this Agreement for activities related to UNEs, resold services or other services covered by this Agreement, and for which this Agreement contains explicit rates, terms, and conditions.

SBC & Sage Agree BoldAJnderline Represents Lanpuaee Proposed bv Sage and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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The Parties acknowledge and agree that they do not intend to include products and services in this Attachment that do not have corresponding rates and charges. Accordingly, if this agreement is executed and/or approved by the Commission and the Parties later discover that a product or service is included in this Agreement without an associated rate or charge, the Parties agree that they will agree upon a rate or charge to include in this Agreement before the product or service is provided or performed. If the Parties cannot agree, either Party may pursue dispute resolution under the applicable provisions of this Agreement.

EFFECTIVE DATE, TERM, AND TERMINATION

The effective date of this Agreement (the “Effective Date”) shall be as follows: (i) unless this Agreement is a successor agreement to an effective interconnection agreement between the Parties under Sections 251/252 of the Act, then the Effective Date of this Agreement shall be ten (10) calendar days after the Texas Public Utility Commission (the “Commission”) approves this Agreement under Section 252(e) of the Act or, absent such Commission approval, the date this Agreement is deemed approved under Section 252(e)(4) of the Act; or (ii) if this Agreement is a successor agreement to an effective interconnection agreement between the Parties under Sections 25 1/252, then the Effective Date shall be the date upon which the Commission approves the Agreement under the Act, or absent such Commission approval, the date this Agreement is deemed approved under Section 252(e)(4) of the Act.

The Agreement shall have a term (“Term”) of three (3) years commencing on the Effective Date. Absent the receipt by one Party of written notice from the other Party not earlier than 180 calendar days prior to the expiration of the Term to the effect that such Party does not intend to extend the Term (“Notice of Expiration”), this Agreement shall remain in full force and effect, on a month to month basis, on and after the expiration of the Term until terminated by either Party.

If either Party serves Notice of Expiration pursuant to Section 5.2, Sage shall have twenty (20) calendar days to provide SBC TEXAS written confirmation if Sage wishes to pursue a successor agreement with SBC TEXAS or alternatively, if Sage wishes to allow the current Agreement to expire. If Sage wishes to pursue a successor agreement with SBC TEXAS, Sage shall attach to its written confirmation or Notice of Expiration, as applicable, a written request to commence negotiations with SBC TEXAS under Sections 251/252 of the Act. Upon receipt of Sage’s Section 252(a)(l) request, the Parties shall commence good faith negotiations on a successor agreement.

5.2.1.1 If Sage does not affirmatively state that it wishes to pursue a successor agreement with SBC TEXAS in its, as applicable, Notice of Expiration or the written confirmation required after receipt of SBC TEXAS’ Notice of Expiration, then the rates, terms and conditions of this Agreement shall continue in full force and effect until the later of 1) the expiration of the Term of this Agreement, or 2) the expiration of ninety (90) calendar

SBC & Sage Agree BoldLJnderline ReDresents Lanpuape Prooosed bv Sage and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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days after the date Sage provided or received Notice of Expiration. Unless otherwise agreed by the Parties, if the Term of this Agreement has expired, on the ninety-first (91st) day following Sage provided or received Notice of Expiration, the Parties shall have no further obligations under this Agreement except those described in Section 44 of this Agreement, including but not limited to the obligations described in Section 5.4 below,

The terms and conditions and rates and charges contained herein will continue to apply until the earlier of (i) termination by either Party under the terms of this Agreement; (ii) the date a successor agreement becomes effective or (iii) the date that is ten (10) months after the date on which SBC TEXAS received Sage’s Section 252(a)( 1) request, unless an arbitration petition has been filed by either Party, in which case (ii) applies.

Sage may terminate this Agreement in whole or in part at any time for any reason upon sixty (60) days prior notice but its liabilities and obligations shall continue in accordance with Section 44 below.

Notwithstanding any other provision of this Agreement, either Party may terminate this. Agreement and the provision of any Interconnection, Resale Services, Unbundled Network Elements, functions, facilities, products or services provided pursuant to this Agreement, at the sole discretion of the terminating Party, in the event that the other Party fails to perform a material obligation or breaches a material term of this Agreement, other than as set forth in Section 10, and the other Party fails to cure such nonperformance or breach within forty-five (45) calendar days after written notice thereof. Any termination of this Agreement pursuant to this Section 5.2 shall take effect immediately upon delivery of written notice to the other Party that it failed to cure such nonperformance or breach within forty-five (45) calendar days after written notice thereof.

As long as a non-paying Party has disputed unpaid amounts in good faith and pursuant to the terms of this Agreement, non-payment is not to be deemed, nor should it be construed as, a material breach of this Agreement.

In the event of expiration or termination of this Agreement other than pursuant to Section 5.2, SBC TEXAS and Sage shall cooperate in good faith to effect an orderly and timely transition of service under this Agreement to Sage or to another vendor. So long as Sage fulfills said obligation to effect an orderly and timely transition of service, SBC TEXAS shall not terminate service to Sage’s end users and such service shall be provided pursuant to the terms of the interconnection agreement during this transition period. SBC TEXAS and Sage shall continue their responsibilities under the terms and conditions of the terminated or expired Agreement for any order submitted to SBC TEXAS in connection with this transition of service.

SBC & Sage Agree BoldKJnderline Represents Laneuaee Proposed by Save and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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Upon termination-or expiration of this Agreement in accordance with Section 5,

Each Party shall continue to comply with its obligations set forth in Section 49 Survival of Obligations; and

Assignment

Assignment of Contract

CLEC may not assign or transfer (whether by operation of law or otherwise) this Agreement (or any rights or obligations hereunder) to a non-affiliate third person without the prior written consent of SBC TEXAS. Any attempted assignment or transfer that is not permitted is void ab initio.

CLEC may assign or transfer (whether by operation of law o r otherwise) this Agreement (or any rights o r obligations hereunder) to its Affiliate by providing ninety (90) calendar days’ prior written notice to SBC TEXAS of such assignment or transfer; provided, further, that such assignment is not inconsistent with Applicable Law (including the Affiliate’s obligation to obtain proper Commission certification and approvals) o r the terms and conditions of this Agreement. Notwithstanding the foregoing, CLEC may not assign or transfer this Agreement (or any rights o r obligations hereunder) to its Affiliate if that Affiliate is a party to a separate agreement with SBC TEXAS under Sections 251 and 252 of the Act. Any attempted assignment or transfer that is not permitted is void ab initio. SBC TEXAS will provide project management support to effectuate such changes as identified in Sections 6.2.1,6.3.1, and 6.4.3.

Corporate Name Change a n d o r change in “d/b/a” only

Any assignment or transfer of an Agreement wherein only the CLEC name is changing, and specifically does not include a change to a CLEC’s OCN/ACNA, constitutes a CLEC Name Change. For a CLEC Name Change, CLEC’s will incur a record order charge per BAN for products billed out of the CABS billing system. For resale or any other products billed out of the CRIS billing system, a record order charge will apply per end user record. Rates for record orders are contained in the Appendix Pricing, Schedule of Prices. CLEC shall also submit a new CSQ to update any OS/DA Rate Reference information and Branding pursuant to the rates terms and conditions of Appendix OS-Resale, Appendix DA-Resale, Attachments 22 and 23.

Company Code Change:

SBC & Sage Agree BoldLJnderline Represents Languaee Proposed bv Sage and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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6.4.3

Any assignment or transfer of an Agreement including the transfer or acquisition of assets under an Agreement, where the CLEC’s OCN/ACNA is changing constitutes a CLEC Company Code Change. CLEC shall provide SBC TEXAS with a ninety (90) calendar day advanced written notice of said assignment associated with the Company Code Change and SBC Texas’ consent. SBC Texas shall not unreasonably withhold consent. For this type of assignment o r transfer of assets, unless otherwise ordered by a bankruptcy court or other governing authority, CLEC must cure any outstanding debt, and tender any requested assurance of payment as required under the terms of this Agreement. For Company Code Changes, the CLEC is required to: submit a service order changing the OCN/ACNA for each end user record and/or a service order for each circuit ID number, as applicable. CLEC shall also submit a new CSQ to update any OS/DA Rate Reference information and Branding pursuant to the rates terms and conditions of Appendix OS-Resale, Appendix DA-Resale, and Attachments 22 and 23. CLEC will pay rates for Collocation re-stenciling and/or re-engineering as determined on an individual case basis.

Assignment of Assets:

Any assignment o r transfer of assets without the transfer o r the assignment of this Agreement shall be handled as a CLEC to CLEC Mass Migration. The CLEC who is a Party to this Agreement, shall provide SBC TEXAS with a ninety (90) calendar day advanced written notice of said mass migration. Included in such written notice CLEC shall inform SBC TEXAS of the date in which the acquiring CLEC will assume financial responsibility of the assets.

For a Transfer of Assets without assumption or assignment of an Agreement, unless otherwise ordered by a bankruptcy court or other governing authority, the acquiring CLEC must cure any outstanding debt associated with such transfer of assets, and tender any requested assurance of payment as required under the terms of this Agreement.

The acquiring and selling CLECs shall coordinate the migration between themselves by sharing customer service records, and/or any other CPNI required information to effectuate such migration. The acquiring CLEC or authorized agent shall issue all service orders required to migrate the assets. The appropriate service order charge o r administration fee (for interconnection) will apply as outlined in the Appendix Pricing, Schedule of Prices to this Agreement. CLEC shall also submit a new CSQ to update any OS/DA Rate Reference information and Branding pursuant to the rates terms and conditions of Appendix OS-Resale, Appendix DA-Resale, and Attachments 22 and 23. CLEC will pay rates for Collocation re-stenciling and/or re-engineering as determined on an individual case basis.

SBC & Sage Agree BoldKJnderline Represents Language Proposed by Sage and ODpOSed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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SBC TEXAS will provide project management support to minimize any possible service outages during the mass migration. The project management support will be provided at no cost to either CLEC. Should the LSR or ASR guidelines not support the required order activity, SBC TEXAS will issue service orders at the manual rate based upon type of service provided CLEC provides to SBC TEXAS a list of all transferring assets including end users telephone numbers, circuit ID numbers, and customer service information.

Confidentiality and Proprietary Information

Both Parties agree to treat proprietary information received from the other in accordance with Section 222 of the Act.

Unless otherwise agreed, the obligations of confidentiality and non-use do not apply to such proprietary information that:

Was at the time of receipt, already known to the receiving Party, free of any obligation to keep confidential and evidenced by written records prepared prior to delivery by the disclosing Party; or

Is or becomes publicly known through no wrongful act of the receiving Party; or

Is righthlly received from a Third Party having no direct or indirect secrecy or confidentiality obligation to the disclosing Party with respect to such information; provided that the receiving Party has exercised commercially reasonable efforts to determine whether such Third Party has any such obligation; or

Is independently developed by an agent, employee, representative or Affiliate of the receiving Party and such persodentity is not involved in any manner with the provision of services pursuant to this Agreement and does not have any direct or indirect access to the proprietary information; or

Is disclosed to a Third Party by the disclosing Party without similar restrictions on such Third Party's rights; or Is approved for release by written authorization of the disclosing Party, but only to the extent of the authorization granted; or

Is required to be made public or disclosed by the receiving Party pursuant to Applicable Law or regulation or court order or lawful process.

Liability and Indemnification

Limitation of Liabilities

Except as specifically provided in Attachment 25 DSL-TX, the Parties' liability to each other during any Contract Year resulting from any and all causes, other than as specified

SBC & Sage Agree BoldWnderline Represents Laneuaee Proposed bv Saee and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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below in Sections 8.3.1 and 8.3.3, following, and for willful or intentional misconduct (including gross negligence), will not exceed the total of any amounts due and owing to CLEC pursuant to Section 50 (Performance Measurements) and the Attachment referenced in that Section, plus the amounts charged to CLEC by SBC TEXAS under this Agreement during the Contract Year in which such cause accrues or arises. For purposes of this Section, the first Contract Year commences on the first day this Agreement becomes effective and each subsequent Contract Year commences on the day following that anniversary date.

8.1.2 Except for Losses alleged or Claims made by an End User of either Party, or except as otherwise provided herein in specific appendices, in the case of any Loss alleged or Claim made by a Third Party arising under the negligence or willful misconduct of both Parties, each Party shall bear, and its obligation under this section shall be limited to, that portion (as mutually agreed to by the Parties) of the resulting expense caused by its own negligence or willful misconduct or that of its agents, servants, contractors, or others acting in aid or concert with it.

8.1.3 Additional Limitation of Liabilities

a. Limitation of Liability for DAL:

Additional indemnification and limitation of liability of provisions covering the matters addressed in DAL Attachment include the follows: SBC TEXAS makes no express or implied warranties whatsoever regarding the accuracy of the directory assistance listing information provided to CLEC. CLEC agrees to accept the directory assistance listing information on an "as-is" basis with all faults, errors and omissions, if any. SBC TEXAS makes no warranty, expressed o r implied, with respect to any listings or the information contained therein, including but not limited to warranties for merchantability o r fitness for a particular purpose.

CLEC hereby releases SBC TEXAS from any and all liability for damages due to errors or omissions in the directory assistance listing information provided under this Appendix attachment, or by reason of delay in providing the directory assistance listing information, including, but not limited to, special, indirect, consequential, punitive o r incidental damages.

CLEC shall indemnify, protect, save harmless and defend SBC TEXAS (or SBC TEXAS' officers, employees, agents, assigns and representatives) from and against any and all losses, liability, damages and expense arising out of any demand, claim, suit or judgment by a third party in any way related to SBCTEXAS Appendix, and every interconnection, service and network element provided hereunder, shall be subject to all rates, terms and conditions contained in this Agreement or any other appendices o r attachments to this Agreement which are supplying directory assistance listing information, o r any actual error or omission.

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CLEC shall so indemnify regardless of whether the demand, claim o r suit by the third party is brought jointly against CLEC and SBC TEXAS, and/or against SBC TEXAS alone. However, if such demand, claim or suit specifically alleges that an error or omission appears in DA listing information, SBC TEXAS may, a t its option, assume and undertake its own defense, o r assist in the defense of CLEC, in which event CLEC shall reimburse SBC TEXAS for reasonable attorney's fees and other expenses incurred by it in handling and defending such demand, claim and/or suit. CLEC shall not enter into any settlement of any such demand, claim o r suit without the prior written consent of SBC TEXAS.

b. Limitation of Liability for DA:

Additional indemnification and limitation of liability of provisions covering the matters addressed in DA- Other and DA -Resale AppendidAttachment, include but not limited to those relating to limitation of liability and indemnification, shatl govern performance under this AppendidAttachment. Notwithstanding the aforementioned, CLEC also agrees to release, defend, indemnify, and hold harmless SBC TEXAS from any claim, demand o r suit that asserts any infringement o r invasion of privacy o r confidentiality of any person o r persons caused or claimed to be caused, directly, o r indirectly, by SBC TEXAS employees and equipment associated with provision of DA Services, including but not limited to suits arising from disclosure of the telephone number, address, or name associated with the telephone called or the telephone used to call DA Services. CLEC also agrees to release, defend, indemnify, and hold harmless SBC TEXAS from any claim, demand or suit that asserts any infringement o r invasion of privacy o r confidentiality of any person or persons caused or claimed to be caused, directly, or indirectly, by SBC TEXAS employees and equipment associated with provision of DA Services, including but not limited to suits arising from disclosure of the telephone number, address, or name associated with the telephone called o r the telephone used to call DA Services.

c. Limitation of Liability for OS:

Additional indemnification and limitation of liability of provisions covering the matters addressed in OS - Other and OS -Resale AppendidAttachment include but not limited to those relating to limitation of liability and indemnification, shall govern performance under this AppendidAttachment. Notwithstanding the aforementioned, CLEC also agrees to release, defend, indemnify, and hold harmless SBC TEXAS from any claim, demand or suit that asserts any infringement or invasion of privacy or confidentiality of any person o r persons caused o r claimed to be caused, directly, or indirectly, by SBC TEXAS employees and equipment associated with provision of OS Services, including but not limited to suits arising from disclosure of the telephone number, address, or name associated with the telephone called or the telephone used to call OS Services.

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8.2

8.2.1

d. Limitation of Liability for WP:

Additional indemnification and limitation of liability of provisions covering the matters addressed in WP - Other and WP -Resale AppendidAttachment.

CLEC agrees that SBC TEXAS and/or its affiliates will not be liable for the content o r accuracy of any subscriber list information provided by CLEC. CLEC agrees to indemnify, hold harmless and defend SBC TEXAS and/or its affiliates from and against any damages, losses, liabilities, demands, claims, suits, judgments, costs and expenses (including, but not limited to reasonable attorney's fees and expenses) resulting from o r arising out of any third party's claim of inaccurate subscriber listing information, use of information provided by CLEC.

CLEC further agrees to indemnify, hold harmless and defend SBC TEXAS and/or its affiliates from and against any damages, losses, liabilities, demands, claims, suits, judgments, costs and expenses (including, but not limited to reasonable attorney's fees and expenses) resulting from or arising out of any negligent act or omission, grossly negligent act, or act of willful misconduct by CLEC.

CLEC further agrees to pay all costs incurred by SBC TEXAS and/or its affiliates as a result of CLEC not complying with the terms of this Appendix.

No Consequential Damages

EXCEPT AS OTHERWISE PROVIDED IN ATTACHMENT 17, NEITHER CLEC NOR SBC TEXAS WILL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL CONSEQUENTIAL, RELIANCE, OR SPECIAL DAMAGES SUFFERED BY SUCH OTHER PARTY (INCLUDING WITHOUT LIMITATION DAMAGES FOR HARM TO BUSINESS, LOST REVENUES, LOST SAVINGS, OR LOST PROFITS SUFFERED BY SUCH OTHER PARTY), REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, WARRANTY, STRICT LIABILITY, OR TORT, INCLUDING WITHOUT LIMITATION, NEGLIGENCE OF ANY KIND WHETHER ACTIVE OR PASSIVE, AND REGARDLESS OF WHETHER THE PARTIES KNEW OF THE POSSIBILITY THAT SUCH DAMAGES COULD RESULT. EACH PARTY HEREBY RELEASES THE OTHER PARTY (AND SUCH OTHER PARTY'S SUBSIDIARIES AND AFFILIATES, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS) FROM ANY SUCH CLAIM. NOTHING CONTAINED IN THIS SECTION WILL LIMIT THE LIABILITY OF EITHER SBC TEXAS OR CLEC TO THE OTHER FOR (i) WILLFUL OR INTENTIONAL MISCONDUCT (INCLUDING GROSS NEGLIGENCE); ( i i ) BODILY INJURY, DEATH, OR DAMAGE TO TANGIBLE REAL OR TANGIBLE PERSONAL PROPERTY PROXIMATELY

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CAUSED BY NEGLIGENT ACT OR OMISSION OF EITHER PARTY HERETO OR THE NEGLIGENT ACT OR OMISSION OF THEIR RESPECTIVE AGENTS, SUBCONTRACTORS OR EMPLOYEES, NOR WILL ANYTHING CONTAINED IN THIS SECTION LIMIT THE PARTIES INDEMNIFICATION OBLIGATIONS, AS SPECIFIED BELOW.

8.3 Obligation to Indemnify

8.3.1 Except as otherwise expressly provided herein or in specific appendices, each Party shall be responsible only for the Interconnection, Resale Services, network elements, functions, facilities, products and services which are provided by that Party, its authorized agents, subcontractors, or others retained by such Party, and neither Party shall bear any responsibility for the Interconnection, Resale Services, network elements, functions, facilities, products and services provided by the other Party, its agents, subcontractors, or others retained by such Party.

8.3.2 Except as otherwise expressly provided herein or in specific appendices, and to the extent not prohibited by Applicable Law and not otherwise controlled by tariff, each Party (the “Indemnifying Party”) shall release, defend and indemnify the other Party (the “Indemnified Party”) and hold such Indemnified Party harmless against any Loss to a Third Party arising out of the negligence or willful misconduct (“Fault”) of such Indemnifying Party, its agents, its End Users, contractors, or others retained by such Parties, in connection with the Indemnifying Party’s provision of Interconnection, Resale Services, network elements, functions, facilities, products and services under this Agreement; provided, however, that (i) with respect to employees or agents of the Indemnifying Party, such Fault occurs while performing within the scope of their employment, (ii) with respect to subcontractors of the Indemnifying Party, such Fault occurs in the course of performing duties of the subcontractor under its subcontract with the Indemnifying Party, and (iii) with respect to the Fault of employees or agents of such subcontractor, such Fault occurs while performing within the scope of their employment by the subcontractor with respect to such duties of the subcontractor under the subcontract .

8.3.3 Except as otherwise expressly provided in this Agreement, each Party will and hereby agrees to defend at the other’s request, indemnify, and hold harmless the other Party and each of its officers, directors, employees, and agents (each, an Indemnitee) against and in respect of any Loss, debt, liability, Damage, obligation, Claim, demand, judgment, or settlement of any nature or kind, known or unknown, liquidated or unliquidated, including without limitation all Losses/Damages arising out of, resulting from, or based upon any pending or threatened claim, action, proceeding or suit by any Third Party (a Claim) (i) alleging any omissions, breach of any representation, warranty, or covenant made by such indemnifying Party (the Indemnifying Party) in this Agreement, (ii) based upon injuries or Damages to any person or property or the environment arising out of or in connection with this Agreement that are the result of the Indemnifying Party’s actions,

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breach of Applicable Law, or the actions, omissions or status of its employees, agents, and subcontractors.

8.3.3.1 In the case of any Loss alleged or Claim made by an End User of either Party, the Party whose End User alleged or Claimed such Loss (the “Indemnifying Party”) shall defend and indemnify the other Party (the “Indemnified Party”) against any and all such Claims or Loss by the Indemnifying Party’s End Users regardless of whether the underlying service was provided or unbundled element was provisioned by the Indemnified Party, unless the Loss was caused by the gross negligence or intentional or willfid misconduct or breach of applicable law of the Indemnified Party.

8.3.3.2 A Party (the “Indemnifying Party”) shall defend, indemnify and hold harmless the other Party (“Indemnified Party”) against any Claim or Loss arising from the Indemnifying Party’s use of Interconnection, Resale Services, network elements, functions, facilities, products and services provided under this Agreement involving:

8.3.3.2.1 Any Claim or Loss arising from such Indemnifying Party’s use of Interconnection, Resale Services, network elements, functions, facilities, products and services offered under this Agreement, involving any Claim for libel, slander, invasion of privacy, or infringement of Intellectual Property rights arising from the Indemnifying Party’s or its End User’s use.

8.3.3.2.1.1 The foregoing includes any Claims or Losses arising from disclosure of any End User-specific information associated with either the originating or terminating numbers used to provision Interconnection, Resale Services, network elements, functions, facilities, products or services provided hereunder and all other Claims arising out of any act or omission of the End User in the course of using any Interconnection, Resale Services, network elements, functions, facilities, products or services provided pursuant to this Agreement.

8.3.3.2.1.2 The foregoing includes any Losses arising from Claims for actual or alleged infringement of any Intellectual Property right of a Third Party to the extent that such Loss arises from an Indemnifying Party’s or an Indemnifjring Party’s End User’s use of Interconnection, Resale Services, network elements, functions, facilities, products or services provided under this Agreement; provided, however, that an Indemnifying Party’s obligation to defend and indemnify the Indemnified Party shall not apply:

8.3.3.2.1.2.1 Where an Indemnified Party or its End User modifies Interconnection, Resale Services, network elements, functions, facilities, products or services; provided under this Agreement; and

8.3.3.2.1.2.2 No infringement would have occurred without such modification.

8.3.3.2.2 Any and all penalties imposed on either Party because of the Indemnifying Party’s failure to comply with the Communications Assistance to Law Enforcement Act of 1994 (CALEA); provided that the Indemnifying Party shall also, at its sole cost and expense, pay any amounts necessary to modify or replace

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8.3.4

8.3.5

8.3.5.1

8.3.5.2

8.3.5.3

8.3.6

any equipment, facilities or services provided to the Indemnified Party under this Agreement to ensure that such equipment, facilities and services fully comply with CALEA. However, SBC Texas agrees that this subsection will not apply to any Claim or Loss arising solely from SBC TEXAS’ provisioning to Sage of any UNE platform product or service.

CLEC acknowledges that its right under this Agreement to interconnect with SBC TEXAS’ network and to unbundle and/or combine SBC TEXAS’ network elements (including combining with CLEC’s network elements) may be subject to or limited by Intellectual Property rights (Intellectual Property means, including without limitation, patent, copyright, trade secret, trade mark, service mark, trade name and trade dress rights) and contract rights of Third Parties.

The Parties acknowledge that on April 27, 2000, the FCC released its Memorandum Opinion and Order in CC Docket No. 96-98 (File No. CCBPol. 97-4), In the Mutter of Petition of MCI for Declaratory Ruling.

SBC TEXAS agrees to use its best efforts to obtain for CLEC, under commercially reasonable terms, Intellectual Property rights to each unbundled network element necessary for CLEC to use such unbundled network element to the same extent as SBC TEXAS.

SBC TEXAS shall have no obligation to attempt to obtain for CLEC any Intellectual Property right(s) that would permit CLEC to use any unbundled network element in a different manner than SBC TEXAS is entitled to use that network element.

To the extent not prohibited by a contract with the vendor of the network element sought by CLEC that contains Intellectual Property licenses, SBC TEXAS shall reveal to CLEC the name of the vendor, the Intellectual Property rights licensed to SBC TEXAS under the vendor contract and the terms of the contract (excluding cost terms). SBC TEXAS shall, at CLEC’s request, contact the vendor to attempt to obtain permission to reveal additional contract details to CLEC.

SBC TEXAS hereby conveys no licenses to use such Intellectual Property rights and makes no warranties, express or implied, concerning CLEC’s (or any Third Party’s) rights with respect to such Intellectual Property rights and contract rights, including whether such rights will be violated by such interconnection or unbundling and/or combining of network elements (including combining with CLEC’s network elements) in SBC TEXAS’ network or CLEC’s use of other functions, facilities, products or services furnished under this Agreement. Any licenses or warranties for Intellectual Property tights associated with unbundled network elements are vendor licenses and warranties and are a part of the Intellectual Property rights SBC TEXAS agrees in Section 8.3.5.1 to use its best efforts to obtain.

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8.3.7 SBC TEXAS does-not and shall not indemnify, defend or hold CLEC harmless, nor be responsible for indemnifying or defending, or holding CLEC harmless, for any Claims or Damages for actual or alleged inhngement of any Intellectual Property right or interference with or violation of any contract right that arises out of, is caused by, or relates to CLEC’s interconnection with SBC TEXAS’ network and unbundling and/or combining SBC TEXAS’ network elements (including combining with CLEC’s network elements) or CLEC’s use of other functions, facilities, products or services furnished under this Agreement, except for any negligence or willful misconduct caused by SBC TEXAS or any of its employees. Any indemnities for Intellectual Property rights associated with unbundled network elements shall be vendor’s indemnities and are a part of the Intellectual Property rights SBC TEXAS agrees in Section 8.3.5.1 to use its best efforts to obtain.

8.3.8 CLEC hereby agrees to release, indemnifjl and hold SBC TEXAS harmless from and against all Damages arising out of, caused by, or relating to any Claim that CLEC’s interconnection with SBC TEXAS’ network, or CLEC’s use of SBC TEXAS’ network elements, or unbundling and/or combining of SBC TEXAS’ network elements (including combining with CLEC’s network elements) or CLEC’s use of other functions, facilities, products or services furnished under this Agreement violates or infiinges upon any Third Party Intellectual Property rights or constitutes a breach of contract rights of Third Parties, except for any negligence or willful misconduct caused by SBC TEXAS or any of its employees.

8.3.9 All costs associated with the extension of Intellectual Property rights to CLEC pursuant to section 8.3.5.1, including the cost of license extension itself and the costs associated with the effort to obtain the license shall be a part of the cost of providing the unbundled network element to which the Intellectual Property rights relate and apportioned to all requesting carriers using that unbundled network element including SBC TEXAS.

8.4 Obligation to Defend; Notice; Cooueration

8.4.1 Whenever a Claim will arise for indemnification under this Section, the relevant Indemnitee, as appropriate, will promptly notify the Indemnifying Party and request the Indemnifying Party to defend the same. Failure to so notify the Indemnifying Party will not relieve the Indemnifying Party of any liability that the Indemnifying Party might have, except to the extent that such failure prejudices the Indemnifying Party’s ability to defend such Claim. The Indemnifying Party will have the right to defend against such liability or assertion in which event the Indemnifying Party will give written notice to the Indemnitee of acceptance of the defense of such Claim and the identity of counsel selected by the Indemnifying Party. Except as set forth below in this section, such notice to the relevant Indemnitee will give the Indemnifying Party full authority to defend, adjust, compromise, or settle such Claim with respect to which such notice will have been given, subject to consultation with the relevant Indemnitee. The Indemnifying Party will consult with the relevant Indemnitee prior to any compromise or settlement that may

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affect the Intellectual Property Rights or other rights of any Indemnitee, and the relevant Indemnitee will have the right to refbse such compromise or settlement and, at the refusing Party's cost, to take over such defense, provided that in such event the Indemnifying Party will not be responsible for, nor will it be obligated to indemnify the relevant Indemnitee against any cost or liability in excess of such refbsed compromise or settlement.

8.4.1.1 With respect to any defense accepted by the Indemnifying Party, the relevant Indemnitee will be entitled to participate with the Indemnifying Party in such defense if the Claim requests equitable relief or other relief that could affect the rights of the Indemnitee and also will be entitled to employ separate counsel for such defense at such Indemnitee's expense. In the event the Indemnifying Party does not accept the defense of any indemnified Claim as provided above, the relevant Indemnitee will have the right to employ counsel for such defense at the expense of the Indemnifying Party. In the eveut of a failure to assume the defense, the Indemnified Party may negotiate a settlement, which shall be presented to the Indemnifying Party. If the Indemnifying Party refuses to agree to the presented settlement and refuses to take over the defense, the Indemnifying Party shall be liable for any reasonable cash settlement not involving any admission of liability by the Indemnifying Party, though such settlement may have been made by the Indemnified Party without approval of the Indemnifying Party, it being the Parties' intent that no settlement involving a nonmonetary concession by the Indemnifying Party, including an admission of liability by such Party, shall take effect without the written approval of the Indemnifying Party. Each Party agrees to cooperate and to cause its employees and agents to cooperate with the other Party in the defense of any such Claim and the relevant records of each Party shall be available to the other Party with respect to any such defense, subject to the restrictions and limitations set forth in Section 7.

9.0

9.1

9.2

9.3

9.4

Compliance and Certification

Each Party shall comply at its own expense with all Applicable Laws that relate to that Party's obligations to the other Party under this Agreement. Nothing in this Agreement shall be construed as requiring or permitting either Party to contravene any mandatory requirement of Applicable Law.

Each Party warrants that it has obtained all necessary state certification required in Texas prior to ordering any Interconnection, Resale Services, network elements, functions, facilities, products and services from the other Party pursuant to this Agreement. Upon request, each Party shall provide proof of certification.

Each Party shall be responsible for obtaining and keeping in effect all approvals from, and rights granted by, Governmental Authorities, building and property owners, other carriers, and any other Third Parties that may be required in connection with the performance of its obligations under this Agreement.

Each Party represents and warrants that any equipment, facilities or services provided to the other Party under this Agreement comply with the CALEA.

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10.0 Assurance of Pavment

10.1 Upon request by SBC TEXAS, CLEC will provide SBC TEXAS with adequate assurance of payment of amounts due (or to become due) to SBC TEXAS.

10.1.1 Assuming that the previous payment and credit history of a Party (a “Requesting Party”) justifies doing so, upon request the other Party (the “Acknowledging Party”) will issue a written acknowledgement that the Requesting Party satisfies the condition that the Requesting Party does not have a proven history of late payments and that it has established a minimum of twelve consecutive months good credit history with the Acknowledging Party. Such an acknowledgement, whenever given, shall not be barred by Section 38, below, and shall be enforceable pursuant to its own terms. Such an acknowledgement shall not be required in order for a Party to meet the conditions necessary to avoid imposition of a deposit requirement under this Agreement, assuming it otherwise meets the conditions.

10.2 Assurance of payment may be requested by SBC TEXAS if:

10.2.1 at the Effective Date CLEC had not already established satisfactory credit by having made at least twelve (12) consecutive months of timely payments to SBC TEXAS for charges incurred as a CLEC; or

10.2.2 in SBC TEXAS’ reasonable judgment, at the Effective Date or at any time thereafter, there has been an impairment of the established credit, financial health, or credit worthiness of CLEC. Such impairment will be determined from information available from financial sources, including but not limited to Moody’s, Standard and Poor’s, and the Wall Street Journal. Financial information about CLEC that may be considered includes, but is not limited to, investor warning briefs, rating downgrades, and articles discussing pending credit problems; or

10.2.3 CLEC fails to timely pay a bill rendered to CLEC by SBC TEXAS; or

10.2.4 CLEC admits its inability to pay its debts as such debts become due, has commenced a voluntary case (or has had an involuntary case commenced against it) under the U.S. Bankruptcy Code or any other law relating to insolvency, reorganization, winding-up, composition or adjustment of debts or the like, has made an assignment for the benefit of creditors or is subject to a receivership or similar proceeding.

Unless otherwise agreed by the Parties, the assurance of payment will, at SBC TEXAS’ option, consist of

10.3

10.3.1 a cash security deposit in U.S. dollars held by SBC TEXAS (“Cash Deposit”) or

10.3.2 an unconditional, irrevocable standby bank letter of credit from a financial institution acceptable to SBC TEXAS naming SBC TEXAS as the beneficiary thereof and otherwise in form and substance satisfactory to SBC TEXAS (“Letter of Credit”).

10.3.3 The Cash Deposit or Letter of Credit must be in an amount equal to three (3) months anticipated charges (including, but not limited to, recurring, non-recurring and usage

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10.4

10.5

10.6

sensitive charges, termination charges and advance payments), as reasonably determined by SBC TEXAS, for the Interconnection, Resale Services, network elements, collocation or any other functions, facilities, products or services to be furnished by SBC TEXAS under this Agreement.

To the extent that SBC TEXAS elects to require a Cash Deposit, the Parties intend that the provision of such Cash Deposit shall constitute the grant of a security interest in the Cash Deposit pursuant to Article 9 of the Uniform Commercial Code in effect in any relevant jurisdiction.

A Cash Deposit will accrue simple interest, established at the interest rate of the most current November 30th (or the closest following business day should the 30th fall on a weekend/holiday) constant maturity rate published by the U.S. Treasury, will accrue on cash deposits held 30 days or more, beginning thirty (30) days after receipt of the deposit. Interest will not accrue on amounts guaranteed by a Letter of Credit, or to any prepayment. The interest on the deposit shall be applied as a credit to the End User’s account beginning one year after the cash deposit is received and every 12 months.

SBC TEXAS may, but is not obligated to, draw on the Letter of Credit or the Cash Deposit, as applicable, upon the occurrence of any one of the following events:

10.6.1 CLEC owes SBC TEXAS undisputed charges under this Agreement that are more than thirty (30) calendar days past due; or

10.6.2 CLEC admits its inability to pay its debts as such debts become due, has commenced a voluntary case (or has had an involuntary case commenced against it) under the U.S. Bankruptcy Code or any other law relating to insolvency, reorganization, winding-up, composition or adjustment of debts or the like, has made an assignment for the benefit of creditors or is subject to a receivership or similar proceeding; or

10.6.3 The expiration or termination of this Agreement.

10.7 If SBC TEXAS draws on the Letter of Credit or Cash Deposit, upon request by SBC TEXAS, CLEC will provide a replacement or supplemental letter of credit or cash deposit conforming to the requirements of Section 10.3.

Notwithstanding anything else set forth in this Agreement, if SBC TEXAS makes a request for assurance of payment in accordance with the terms of this Section, then SBC TEXAS shall have no obligation thereafter to perform under this Agreement until such time as CLEC has firnished SBC TEXAS with the assurance of payment requested; provided, however, that SBC TEXAS will permit CLEC a minimum of ten (10) Business Days to respond to a request for assurance of payment before invoking this Section.

10.8.1 If CLEC fails to furnish the requested adequate assurance of payment on or before the date set forth in the request, SBC TEXAS may also invoke the provisions set forth in Section 12.5 through Section 12.7.

The fact that a Cash Deposit or Letter of Credit is requested by SBC TEXAS shall in no way relieve CLEC from timely compliance with all payment obligations under this

10.8

10.9

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11.0

1 1 . 1

11.2

Agreement (including, but not limited to, recurring, non-recurring and usage sensitive charges, termination charges and advance payments), nor does it constitute a waiver or modification of the terms of this Agreement pertaining to disconnection or re-entry for non-payment of any amounts required to be paid hereunder.

Pavment of Rates and Charges

Unless otherwise stated, each Party will render monthly bill(s) to the other for Interconnection,Resale Services, Network Elements, Collocation, functions, facilities, products and services provided hereunder at the rates set forth in the applicable Appendix Pricing, as set forth in applicable tariffs or other documents specifically referenced herein and, as applicable, as agreed upon by the Parties or authorized by a Party.

Except as otherwise specifically provided elsewhere in this Agreement, the Parties will pay all rates and charges due and owing under this Agreement within thirty (30) days from the date of the invoice. For purposes of this Agreement, the “Bill Due Date” shall be defined to mean thirty (30) calendar days from the date of the invoice. Amounts that are in dispute and are not paid by the Bill Due Date shall be deemed a bona fide dispute once the amount in dispute has been identified and the information is submitted in accordance with the required terms and conditions pursuant to the Disputed Amounts section below. Sage’s receipt of the invoice is presumed to occur on or before be within three (3) ten (10) Business Days following the date of the invoice, which is generated each month at the close of the billing cycle. from the date of the invoice. If Sage does not receive an invoice within ten (10) Business Days following the close of its monthly cycle, it shall promptly notify the Local Service Center (LSC); the Parties shall agree upon a payment dated (agreed bill due date) for that delayed invoice. If Sage receives the invoice later than three (3) Business Days, it shall promptly notify the LSC and both Parties shall determine a mutually agreeable date for the Bill Due Date. Sage’s receipt of the invoice is presumed to be within ten (10) Business Days from the billing cycle date. If Sage receives the invoice later than ten (10) Business Days, it shall immediately notify the LSC and both Parties shall determine a mutually agreeable payment date for the invoice in question. If CLEC fails to remit payment for any charges by the Bill Due Date, or if payment for any portion of the charges is received from CLEC after the Bill Due Date, or if payment for any portion of the charges is received in funds which are not immediately available to SBC TEXAS as of the Bill Due Date (individually and collectively, “Past Due”), then a late payment charge will be assessed as provided in Sections 11.1. and 11.2., as applicable.

1 1.2.1 If any charge incurred under this Agreement that is billed out of any SBC TEXAS billing system other than the SBC TEXAS Customer Records Information System (CRIS) is Past Due, the unpaid amounts will accrue interest from the day following the Bill Due Date until paid at the lesser of (i) the rate used to compute the late payment charge in the SBC TEXAS intrastate access services tariff and (ii) the highest rate of interest that may be

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charged under Applicable Law. The method and timing for application of interest to any charge incurred under this Agreement that is billed out of any SBC TEXAS billing system other than SBC TEXAS' CRIS will comply with the process set forth in the SBC TEXAS intrastate access services tariff.

11.2.2 I f any charge incurred under this Agreement that is billed out of SBC TEXAS' CRIS is Past Due, the unpaid amounts will accrue interest from the day following the Bill Due Date until paid. The interest rate applied to SBC TEXAS CRIS-billed Past Due unpaid amounts will be the lesser of (i) the rate used to compute the late payment charge contained in the SBC TEXAS intrastate retail tariff governing late payment charges to SBC TEXAS' retail End Users that are business End Users and (ii) the highest rate of interest that may be charged under Applicable Law. The method and timing for application of interest to any charge incurred under this Agreement that is billed out of SBC TEXAS' CRIS will be governed by the SBC TEXAS intrastate retail tariff governing late payment charges to SBC TEXAS' retail End Users that are business End Users.

If any charge incurred by SBC TEXAS under this Agreement is Past Due, the unpaid amounts will accrue interest from the day following the Bill Due Date until paid. The interest rate applied will be the lesser of (i) the rate used to compute the late payment charge contained in the SBC TEXAS intrastate access services tariff and (ii) the highest rate of interest that may be charged under Applicable Law, compounded daily from the Bill Due Date to and including the date that the payment is actually made and available.

11.3

11.4 CLEC shall make each payment to SBC TEXAS via check with immediately available funds so that SBC TEXAS shall receive such payment no later than the Billing Due Date of each bill until such time as CLEC is able to make payments via electronic finds credit transfer through the Automated Clearing House Association (ACH) network, but no later than twelve (12) months after the Effective Date of this Agreement. At that time, the Parties shall make all payments to one another via electronic funds credit transfers through the Automated Clearing House Association (ACH) network to the financial institution designated by each Party. Remittance information will be communicated together with the finds transfer via the ACH network. The Parties must use the CCD+ or the CTX transaction set. The Parties will abide by the National Automated Clearing House Association (NACHA) Rules and Regulations. Each ACH credit transfer must be received by the Billing Party no later than the Bill Due Date of each bill or Late Payment Charges will apply. Neither Party will be liable for any delays in receipt of funds or errors in entries caused by the other Party or Third Parties, including the Paying Party's financial institution. Each Party is responsible for its own banking fees.

11.4. I Processing of payments not made via electronic funds credit transfers through the ACH network may be delayed. Each Party will be responsible for any Late Payment Charges resulting from that Party's failure to use electronic funds credit transfers through the ACH network.

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1 1.5 If the Disputing Party disputes any charges and any portion of the dispute is resolved in favor of such Disputing Party, the Billing Party will credit the invoice of the Disputing Party for that portion of the Disputed Amounts resolved in favor of the Disputing Party, together with any Late Payment Charges assessed with respect thereto no later than the second Bill Due Date after resolution of the dispute;

11.6 I f either Party requests one or more additional copies of a bill, the requesting Party will pay the Billing Party a reasonable fee for each additional copy, unless such copy was requested due to failure in delivery of the original bill or correction(s) to the original bill,

11.6.1 Each additional copy of any bill provided for billing from SBC TEXAS’ CABS billing system will incur charges as specified in Access Service Tariff FCC No. 73 Section 13 Alternate Bill Media.

11.6.2 Bills provided to CLEC from SBC TEXAS’ CRIS system through Bill Plus will incur charges as specified in Appendix Pricing.

11.7 DISPUTED AMOUNTS:

11.7.1 If any portion of an amount due to a Party (the “Billing Party”) under this Agreement is subject to a bona fide dispute between the Parties, the Party billed (the ‘“on-Paying Party”) must, prior to the Bill Due Date, give written notice to the Billing Party of the amounts it disputes (“Disputed Amounts”) and include in such written notice the specific details and reasons for disputing each item listed in Section 12.4. The Disputing Party should utilize any existing and preferred form provided by the Billing Party to communicate disputes to the Billing Party. On or before the Bill Due Date, the Non-Paying Party must pay (i) all undisputed amounts to the Billing Party, and (ii) all Disputed Amounts [other than disputed charges arising from Appendix Reciprocal Compensation] into an interest bearing escrow account with a Third Party escrow agent mutually agreed upon by the Parties.

1 1.7.2

11.7.3

Disputed Amounts in escrow will be subject to Late Payment Charges as set forth in Section 11.

Requirements to Establish Escrow Accounts

1 1.7.3.1

11.7.3.1.1

To be acceptable, the Third Party escrow agent must meet all of the following criteria:

The financial institution proposed as the Third Party escrow agent must be located within the continental United States;

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1 1.7.3.1.2

11.7.3.1.3

1 1.7.3.2

11.7.3.2.1

11.7.3.2.2

11.7.3.2.3

11.7.3.2.4

11.7.3.2.5

11.7.3.2.5.1

11.7.3.2.5.2

11.7.3.2.5.3

1 1.7.4

General r e m s and Conditions (Texas) Page 28 of 64

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The financial institution proposed as the Third Party escrow agent may not be an Affiliate of either Party; and

The financial institution proposed as the Third Party escrow agent must be authorized to handle ACH (credit transactions) (electronic funds) transfers.

In addition to the foregoing requirements for the Third Party escrow agent, the disputing Party and the financial institution proposed as the Third Party escrow agent must agree in writing furnished to the Billing Party that the escrow account will meet all of the following criteria:

The escrow account must be an interest bearing account;

All charges associated with opening and maintaining the escrow account will be borne by the disputing Party;

That none of the funds deposited into the escrow account or the interest earned thereon may be used to pay the financial institution’s charges for serving as the Third Party escrow agent;

all interest earned on deposits to the escrow account will be disbursed to the Parties in the same proportion as the principal; and

disbursements from the escrow account will be limited to those: authorized in writing by both the disputing Party and the Billing Party (that is, signature(s) from representative(s) of the disputing Party only are not sufficient to properly authorize any disbursement); or

made in accordance with the final, non-appealable order of the arbitrator appointed pursuant to the provisions of Section 12.6; or

made in accordance with the final, non-appealable order of the court that had jurisdiction to enter the arbitrator’s award pursuant to Section 12.6.

The Billed Party shall not be required to place Disputed Amounts in escrow, as required by Section 8.5, above, if: (i) the Billed Party does not have a proven history of late payments and has established a minimum of twelve consecutive (12) months good credit history with the Billing Party (prior to the date it notifies the Billing Party of its billing dispute); or (ii) the Billed Party has not filed more than three previous billing disputes within the twelve (12) months immediately preceding the date it notifies the Billing Party of its current billing dispute, which previous disputes were resolved in Billing Party’s favor or, (iii) if the bill containing the disputed charges is not the first bill for a particular service to the Billed Party, the Billed Party’s dispute does not involve 20% or more of the total amount of the previous bill out of the same billing system.

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1 1.7.4.1 Issues related to Disputed Amounts shall be resolved in accordance with the procedures identified in the Dispute Resolution provisions set forth in Section 12.

11.7.5 If the Non-Paying Party disputes any charges and any portion of the dispute is resolved in favor of such Non-Paying Party, the Parties will cooperate to ensure that all of the following actions are completed:

1 1.7.5.1 the Billing Party will credit the invoice of the Non-Paying Party for that portion of the Disputed Amounts resolved in favor of the Non-Paying Party, together with any Late Payment Charges assessed with respect thereto no later than the second Bill Due Date after resolution of the dispute;

11.7.5.1.1 within ten (10) Business Days after resolution of the dispute, the portion of the escrowed Disputed Amounts resolved in favor of the Non-Paying Party will be released to the Non-Paying Party, together with any interest accrued thereon;

11.7.5.1.2 within ten (10) Business Days after resolution of the dispute, the portion of the escrowed Disputed Amounts resolved in favor of the Billing Party will be released to the Billing Party, together with any interest accrued thereon; and

11.7.5.1.3 no later than the third Bill Due Date after the resolution of the dispute, the Non-Paying Party will pay the Billing Party the difference between the amount of accrued interest the Billing Party received from the escrow disbursement and the amount of Late Payment Charges the Billing Party is entitled to receive pursuant to Section 11.1.

11.7.6 If the Non-Paying Party disputes any charges and the entire dispute is resolved in favor of the Billing Party, the Parties will cooperate to ensure that all of the actions required by Section 8.7.1.1 and Section 8.7.1.3, above, are completed within the times specified therein.

11.7.6.1 Failure by the Non-Paying Party to pay any charges determined to be owed to the Billing Party within the time specified in Section 8.7, above, shall be grounds for termination of the Interconnection, Resale Services, Network Elements, Collocation, functions, facilities, products and services provided under this Agreement.

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12.0

12.1

12.1.1

12.2

12.2.1

12.3

12.3.1

DisDute Resolution

Finality of Disputes

Except as otherwise specifically provided in this Agreement, no Claims will be brought for disputes arising from this Agreement more than twenty-four (24) months from the date the occurrence which gives rise to the dispute is discovered by the Party asserting the Claim or reasonably should have been discovered with the exercise of due care and attention.

Alternative to Litigation

The Parties desire to resolve disputes arising out of this Agreement without litigation. Accordingly, except for ( la) any action seeking a temporary restraining order or an injunction related to the purposes of this Agreement, (Zb) suit to compel compliance with these Dispute Resolution procedures, (c) all claims arising under federal or state statute(s), including antitrust claims, and (3d) any suit to enforce any award rendered by any arbitration brought pursuant to these Dispute Resolution procedures-and @e) any suit to enforce the terms of any settlement agreement entered into by the Parties arising out of these Dispute Resolution procedures,. Tihe Parties agree to use the following Dispute Resolution procedures with respect to any dispute, controversy or Claim arising out of or relating to this Agreement or its breach.

Informal Resolution of Disputes

In the case of any dispute, controversy or Claim, and at the written request of a Party (the “Dispute Notice”), within ten (1 0) Business days of the receipt of the Dispute Notice each Party will appoint (and shall provide the other Party with written notice and contact information regarding such appointment) a knowledgeable, responsible Representative empowered to resolve disputes of the nature and magnitude referenced in the Dispute Notice (the “Dispute Resolution Representative”) to meet, and negotiate in good faith to resolve any dispute arising under this Agreement. The location, form, frequency, duration, and conclusion of these discussions will be left to the discretion of the Dispute Resolution Representatives. Each Party shall in good faith reasonably make their respective Dispute Resolution Representative available for such discussions no later than thirty (30) Business days after receipt of the Dispute Notice. Upon agreement, the Dispute Resolution Representatives may utilize other alternative informal dispute resolution procedures such as mediation to assist in the negotiations. Discussions and the correspondence among the Dispute Resolution Representatives occurring subsequent to the receipt of the Dispute Notice that are specific to the disputed matters in question and that were made for the purposes of settlement shall be exempt from discovery and production and will not be admissible in the arbitration described below or in any lawsuit without the concurrence of both Parties. Documents identified in or provided with such communications, that were not prepared for purposes of the settlement negotiations, shall

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not be so exempted and, if otherwise admissible, may be admitted in evidence in the arbitration or lawsuit.

12.4 Billing Disputes

12.4.1 (a) Each partv shall desimate their respective person (the “Biffina Remwsenfatiue”) for the purpose of agreeinp on the form and content of various standard forms, reports or notices to be used between the Parties solelv with respect to billing matters. Such designation of the BillinP Representative bv a Party mav by written notice be chanped at anv time, with the change to be effective no sooner than ten I lO) days subsequent to the date of the deliverv of the redesimation notice.

/b) Subject to the Drovisions of Section 12.3.1, in the event that the sole matter in dispute is a billing dispute, then Egach Party agrees to deliver the relevant written Dispute Notice to the other Party’s Billing Representative regarding such billing dispute by using the Billing Party’s standard form (the “Standard Billing Dispute Notice Form”), if any, or by using a form that is mutually agreed to by the Parties that made available by the Billing Party has provided to the other Party’s Billing Executive no less that thirty (30) days prior to the date of the notice of the relevant billing dispute, and bv using such form to provide such notice also Either Party may invoke the informal dispute resolution process described in Section 12.3. however, neither Party may invoke informal resolution earlier than thirty (30) Business Days after receipt of the Dispute Notice. However, notwithstanding the forepoing sentence, in no event shall a Party be preiudiced in any Claim because it used some other form of Dispute Notice other than the Standard Billing Dispute Notice Form as long as such Party has reasonably apprised the Billing Par@ of the nature of the billing dispute in writing. The Parties will in good faith use all commercially reasonable efforts endeavor to resolve the relevant billing dispute within forty-five (45) calendar Business days after the receipt of the Disputing Party’s written Dispute Notice. In order to resolve a billing dispute, and if reasonably available to the Disputing P a m at the time it delivers its Dispute Notice, the Disputing Party shall include in its Dispute Notice (i) the date of the bill in question, (ii) CBA or BAN number of the bill in question, (iii) telephone number, circuit ID number or trunk number in question, (iv) any USOC information relating to the item questioned, (v) amount billed and (vi) amount in question and (vii) the reason that the Disputing Party disputes the billed amount. To be deemed a (‘dispute” under this Section 12.4, the Disputing Party must provide evidence that it has paid the disputed amount or established an interest bearing escrow account that complies with the requirements set forth in Section 8.4 of this Agreement and deposited all Unpaid Charges relating to Resale Services and Network Elements into that escrow account. If the disputed amount has not already been paid, failure to provide the information and evidence required by this Section 10.4.1 not later than twenty-nine (29) calendar days following the Bill Due Date shall constitute CLEC’s irrevocable and full waiver of its right to dispute

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the subject charges. Within a commercially reasonable time following receipt of the dispute by the Billing Party, the Billing Party will begin investigating the dispute.

12.4.2 SBC TEXAS and Sage apree that the billinp disputes provisions contained in 12.4 do not apply to charpes associated with ABS charges that Sape may be billing and collecting for SBC TEXAS.

12.4.3 When the Parties apree that an operations failure resulted in or likelv resulted in incorrect billing charpes (even if the Parties need to conduct further investipation to determine the nature of the operations failure and the correct amount that should have been billed pursuant to the provisions of this Apreement), and such incorrect charges can be reasonablv ascertained o r estimated and seprepated from correct charges appearing on the same billing statement, o r on any subseauentlv-delivered billinp statement that corrects or purports to correct the previous charpes then Sa% will neither have to pav such incorrect charpes nor escrow any amounts for such incorrect charpes that the Parties concur were likelv to be erroneous.

12.4.3 Should the Billing Party agree with the Disputing Party that a material billing error has apparently occurred, but requires additional time for investigation or to ascertain the correct amount, the Billing Party will notify the Disputing Party in writing of the portion of its invoice, if any, that the Disputing Party is not required to pay o r escrow pending resolution of the dispute. For purposes of this section, to be “material” an alleged billing error must a) appear on the current invoice and b) the Billed Party’s dispute does not involve 50% or more of the total amount of the previous bill out of the same billing system.

12.4.4 Notwithstanding anything contained in this Agreement to the contrary, a Party shall be entitled to dispute only those charges which were paid and appeared on a bill& statement delivered to the Disputing Party dated within the immediately preceding twelve (12) months twenty-four (24) months immediately preceding the date on which the Billing Party receives notice of such dispute.

12.5 Formal Resolution of Disputes

12.5.1 Except as otherwise specifically set forth in this Agreement, for all disputes arising out of or pertaining to this Agreement, including but not limited to matters not specifically addressed elsewhere in this Agreement that require clarification, renegotiation, modifications or additions to this Agreement, either Party may invoke dispute resolution procedures available pursuant to the dispute resolution rules, as amended from time to time, of the Commission. Also, upon mutual agreement, the In the alternative, either Parties Par@ may seek demand commercial binding arbitration as specified in Section 12.6.

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12.5.2 The Parties agree that the Dispute Resolution procedures set forth in this Agreement are not intended to conflict with applicable requirements of the Act or the Commission with regard to procedures for the resolution of disputes arising out of or related to this Agreement, except to the extent such procedures would denv a Partv the right to otherwise invoke commercial binding arbitration as specified in Section 12.6. In the event that there are multiple apreements between the Parties o r between Affiliates of the Parties in which there are disputes arisine under o r related to that have commonality of issues in controversv, then upon the demand of any Partv, such disputes may be consolidated into a sinple arbitration to be held in Dallas, Texas pursuant to Section 12.6.1, rather than the Parties underPoinP costlv, protracted disputes resolution procedures in several iurisdictions with the risk of inconsistent results.

12.6 Arbitration

12.6. I When both Parties agree to commercial binding arbitration either Party has demanded commercial bindin9 arbitration, disputes where the amount in controversy is less than $1 million shall be submitted to a single arbitrator, and disputes where the amount in controversy equals or exceeds $1 million shall be submitted to a panel of three arbitrators, pursuant to the Commercial Arbitration Rules of the American Arbitration Association or pursuant to such other provider of arbitration services or rules as the Parties may agree. The arbitrator(s) shall be knowledgeable of Telecommunications issues of the Wpe in controversv. Arbitration will be held in Dallas, Texas, unless the Parties agree othenvise. The arbitration hearing will commence within sixty (60) days of the demand for arbitration, unless the arbitrator(s) shall designates a subsequent date, which in no event shall be later than ninety (90) days after the date of the demand. The arbitrator(s) will control the scheduling so as to process the matter expeditiously. The Parties may submit written briefs upon a schedule determined by the arbitrator(s). To resolve matters of discovery upon which the Parties are unable to agree, the arbitrator(s) shall have the power to appoint a special master to rule on such discoverv matters, and such special master shall be an attorney o r iudpe with substantial experience in such matters. Generally, the discovery of evidence, and its admissibility into the arbitration, shall be governed by the Federal Rules of Evidence and the Federal Rules of Civil Procedure, except to allow for the arbitration hearing to begin in accordance with the time frames set forth in this Section that the arbitrator(s), the special master, or the Parties by agreement may shorten all time frames set forth in such rules to no less than ten (10) calendar days when the rules provide for a longer period, to expedite matters and to allow for the arbitration hearing to bepin in accordance with the time frames set forth in this Section. The Parties will request that the arbitrator(s) rule on the dispute by issuing a written opinion within 30 days after the close of hearings. The Federal Arbitration Act, 9 U.S.C. Secs. 1-16, and not state law, shall govern the arbitrability of all disputes. The Parties agree that, notwithstanding any rule of the AAA Commercial Arbitration Rules to the contrary, the arbitrator has no authority to order punitive, exemplary, multiple or Consequential Damages or any other

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13.0

13.1

13.2

Damages not measured by the prevailing Party's actual Damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of this Agreement. The times specified in this Section may be extended or shortened upon mutual agreement of the Parties or by the arbitrator(s) upon a showing of good cause. Each Party will bear its own costs of these procedures. The Parties will equally split the fees of the arbitration and the arbitrator. Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction.

Termination of Service to CLEC

Failure to pay charges may be grounds for disconnection of Interconnection, Resale Services, network elements, collocation, functions, facilities, products and services furnished under this Agreement. If a Party fails to pay when due, any and ail charges billed to them under this Agreement, including but not limited to any late payment charges o r miscellaneous charges (Unpaid Charges), and any portion of such charges remain unpaid after the due date of such Unpaid Charges, the Billing Party will notify the Non-Paying Party in writing that in order to avoid disruption or disconnection of Interconnection, Resale Services, network elements, collocation, functions, facilities, products and services furnished under this Agreement, the Non- Paying Party must remit all Unpaid Charges, within ten (10) Business Days after receipt of the Billing Party's notice of Unpaid Charges. Disputes hereunder will be resolved in accordance with the Dispute Resolution Procedures set out in Section 12 of this Agreement.

If the Non-Paying Party fails to (a) pay any Unpaid Charges at the conclusion of the time period as set forth in Section 13.1 above, (b) timely furnish any assurance of payment requested in accordance with Section 10 or (c) make a payment in accordance with the terms of any mutually agreed payment arrangement, then the Billing Party may, in addition to exercising any other rights or remedies it may have under Applicable Law, provide written demand to the Non-Paying Party for payment of any of the obligations set forth in (a) through (c) of this Section within ten (10) Business Days. On the day that the Billing Party provides such written demand to the Non-Paying Party, the Billing Party may also exercise any or all of the following options:

13.2.1 suspend acceptance of any application, request or order from the Non-Paying Party for new or additional Interconnection, Resale Services, network elements, collocation, functions, facilities, products o r services under this Agreement; and/or

13.2.2 suspend completion of any pending application, request or order from the Non- Paying Party for new o r additional Interconnection, Resale Services, network elements, collocation, functions, facilities, products or services under this Agreement.

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13.3

13.3.1

13.3.2

13.4

13.4.1

13.5

13.5.1

13.5.2

13.6

13.6.1

13.6.2

General Terms and Conditions ( r e m ) Page 35 of64

Draft 1(7 01 14/04

Notwithstanding anything to the contrary in this Agreement, the Billing Party’s exercise of any of its options under Section 13.2, Section 13.2.1 and Section 13.2.2:

will not delay or relieve the Non-Paying Party’s obligation to pay all charges on each and every invoice on or before the Bill Due Date, and

will exclude any affected application, request, order or service from any otherwise applicable Performance Measure.

Any demand provided by SBC TEXAS to CLEC under Section 13.2 will further specify that upon disconnection of the CLEC, SBC TEXAS will cause the CLEC’s End Users that are provisioned through Resale Services to be transferred to SBC TEXAS local service.

A copy of the demand provided to CLEC under Section 13.4 will be provided to the Commission.

If the Non-Paying Party fails to pay the Billing Party on or before the date specified in the demand provided under Section 13.2 of this Agreement, the Billing Party may, in addition to exercising any other rights or remedies it may have under Applicable Law,

cancel any pending application, request or order for new or additional Interconnection, Resale Services, network elements, collocation, functions, facilities, products or services under this Agreement; and

disconnect any Interconnection, Resale Services, network elements, collocation, functions, facilities, products or services furnished under this Agreement.

On the same date that Resale Services to CLEC are disconnected, CLEC will notify its End Users provisioned through Resale Services to SBC TEXAS’ local service. To the extent available a t retail from SBC TEXAS, the Resale End Users transferred to SBC TEXAS’ local service will receive the same services that were provided through CLEC immediately prior to the time of transfer; provided, however, SBC TEXAS reserves the right to toll restrict (both InterLATA and IntraLATA) such transferred End Users.

CLEC will inform the Commission of the names of all Resale End Users as a result of CLEC’s disconnection for failure to pay charges.

Conversion charges and service establishment charges for transferring Resale End Users to SBC TEXAS as specified in Section 13.6 will be billed to CLEC.

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13.6.3

13.7

13.7.1

13.8

13.9

13.9.1

13.10

14.0

14.1

SBC TEXAS has no liability to CLEC or CLEC’s End Users in the event of disconnection of service to CLEC and the resulting disconnection of any Resale End Users in connection with CLEC’s disconnection.

If any CLEC charges remain unpaid or undisputed thirty (30) calendar days past the due date of the unpaid charges as described in Section 10.2 above, CLEC will, at its sole expense, notify its end users, the Commission and the end user’s of Record that their service may be disconnected for CLEC failure to pay unpaid charges, and that its end users must select a new local service provider within fifteen (15) calendar days.

If any CLEC charges remain unpaid or undisputed forty-five (45) calendar days past the due date, SBC TEXAS will disconnect CLEC and all of CLEC’s Resale end users who have not selected another local service provider. CLEC will inform the Commission and the end user’s IXC(s) of Record of the names of all end users transferred through this process.

SBC TEXAS may discontinue service to CLEC upon failure to pay undisputed charges as provided in this section, and will have no liability to CLEC in the event of such disconnection.

CLEC will notify the Commission of the names of all transferred Resale End Users whose local service was terminated pursuant to Section 13.7.

After disconnect procedures have begun, SWBT will not accept service orders from CLEC until all unpaid charges are paid. SWBT will have the right to require a deposit equal to one month’s charges (based on the highest previous month of service from SWBT) prior to resuming service to CLEC after disconnect for nonpayment.

Nothing herein will be interpreted to obligate SBC TEXAS to continue to provide local service to any of CLEC’s Resale End Users beyond the date upon CLEC’s service is disconnected.

Notices

In the event any notices are required to be sent under the terms of this Agreement, they may be sent by mail, via certified mail or first class U.S. Postal Service, with postage prepaid, and a return receipt requested and are deemed to have been received five (5) calendar days after mailing in the case of first class or certified U.S. Postal Service. Notice may also be effected by personal delivery or by overnight courier, and will be effective upon receipt. Notice may also be provided by facsimile, which will be effective on the next Business Day following the date of transmission; provided, however, notices to a Party’s 24-hour maintenance contact number will be by telephone and/or facsimile

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General Terms and (‘onditions (Texas) Page 37 of 64

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14.2

14.3

14.4

14.5

14.6

14.7

and will be deemed to have been received on the date transmitted. The Parties will provide the appropriate telephone and facsimile numbers to each other. Unless otherwise specifically provided in this Agreement, notice will be directed as follows:

If to CLEC:

Vice President, Regulatory Affairs Sage Telecom of Texas, L.P. 805 Central Expressway South, Suite 100 Allen, TX 75013-2789

If to SBC TEXAS:

Contract Management ATTN: Notices Manager Four SBC Plaza, gth Flr 31 1 S. Akard St. Dallas, TX 75202-5398

Either Party may unilaterally change its designated representative and/or address, telephone contact number or facsimile number for the receipt of notices by giving ten (10) calendar days‘ prior written notice to the other Party in compliance with this Section. Any notice or other communication will be deemed given when received.

SBC TEXAS communicates official information to CLECs via its Accessible Letter notification process. This process covers a variety of subjects, including updates on products/services promotions; deployment of new products/services; modifications and price changes to existing products/services; cancellation or retirement of existing products/services; and operational issues. SBC TEXAS agrees that the Accessible Letter will not nor is it intended to amend this Agreement.

SBC TEXAS Accessible Letter notification will be via electronic mail (“e-mail”) distribution. Accessible Letter notification via e-mail will be deemed given as of the transmission date set forth on the e-mail message.

CLEC may designate up to a maximum of ten (10) recipients for Accessible Letter notification via e-mail.

CLEC shall submit a completed Accessible Letter Recipient Change Request Form to the individual specified on that form to designate in writing each individual’s e-mail address to whom CLEC requests Accessible Letter notification be sent. CLEC shall submit a completed Accessible Letter Recipient Change Request Form to add, remove or change recipient information for any CLEC recipient of SBC TEXAS’ Accessible Letters. Any

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14.8

15.0

15.1

15.2

15.3

completed Accessible Letter Recipient Change Request Form shall be deemed effective ten ( I O ) calendar days following receipt by SBC TEXAS. SBC TEXAS may, at its discretion, change the process by which the CLEC provides Accessible Letter recipient information. Changes to this process will be developed through the CLEC User Forum process and will be implemented only with the concurrence of the CLEC User Forum Global Issues group.

SBC TEXAS shall provide a toll free facsimile number to CLEC for the submission of requests for Resale Services and network elements under this Agreement; CLEC shall provide SBC TEXAS with a toll free facsimile number for notices from SBC TEXAS relating to requests for Resale Services and network elements under this Agreement.

With respect to any purchase of service under this Agreement, if any Federal, state or local government sales use, excise, gross receipts, municipal fee, transfer, transaction or similar tax, fee, surcharge, or other tax-like charge (a "Tax") is required or permitted by applicable law, ordinance or tariff to be collected from a purchasing Party by the providing Party, except for (a) any Tax on either Party's existence, status, or income or (b) any corporate franchise Taxes or (c) any gross receipts or municipal fee taxes, then (i) the providing Party will bill, as a separately stated item, the purchasing Party for such Tax, (ii) the purchasing Party will timely remit such Tax to the providing Party, and (iii) the providing Party will remit such collected Tax to the applicable taxing authority.

CLEC acknowledges and agrees that it is required to comply with Chapter 283 of the Texas Local Government Code, as it may be amended from time to time, and the reporting and compensation requirements of Subchapter R of the P.U.C. Substantive Rules - Chapter 26, Applicable to Telecommunications Service Providers, as they may be amended from time to time. With respect to municipal fees charged pursuant to Chapter 283, Tex. LOC. Gov't Code, CLEC agrees that it will directly report its access lines to the Texas Public Utility Commission, will remit the related payments to municipalities, and will otherwise comply with Chapter 283 and applicable P.U.C rules, as they may be amended from time to time.

If the providing Party does not collect a Tax because the purchasing Party asserts that it is not responsible for the tax, or is otherwise excepted fiom the obligation which is later determined by formal action to be wrong then, as between the providing Party and the purchasing Party, the purchasing Party will be liable for such uncollected Tax and any interest due and/or penalty assessed on the uncollected Tax by the applicable taxing authority or governmental entity. Failure to include Taxes on an invoice or to state a Tax separately shall not impair the obligation of the purchasing Party to pay any Tax. Nothing shall prevent the providing Party from paying any Tax to the appropriate taxing authority prior to the time: (1) it bills the purchasing Party for such Tax, or (2) it collects the Tax from the purchasing Party. Notwithstanding anything in this Agreement to the contrary,

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the purchasing Party shall be liable for and the providing Party may collect Taxes which were assessed by or paid to an appropriate taxing authority within the statute of limitations period but not included on an invoice within four (4) years after the Tax otherwise was owed or due.

15.4 With respect to any purchase hereunder of Interconnection, Resale Services, network elements, functions, facilities, products and services under this Agreement that are resold to a Third Party, if any Tax is imposed by Applicable Law on the End User in connection with any such purchase, then: (i) the purchasing Party shall be required to impose and/or collect such Tax from the End User; and (ii) the purchasing Party shall remit such Tax to the applicable taxing authority. With respect to any Tax that the purchasing Party has agreed to pay or impose on and/or collect from End Users, the purchasing Party agrees to indemnify and hold harmless the providing Party for any costs incurred by the providing Party as a result of actions taken by the applicable taxing authority to collect the Tax from the providing Party due to the failure of the purchasing Party to pay or collect and remit such Tax to such authority.

15.5 If either Party is audited by a taxing authority or other governmental entity the other Party agrees to reasonably cooperate with the Party being audited in order to respond to any audit inquiries in a proper and timely manner so that the audit and/or any resulting controversy may be resolved expeditiously.

15.6 If applicable law excludes or exempts a purchase of services under this Agreement from a Tax, and if such applicable law also provides an exemption procedure, such as an exemption certificate requirement, then, if the purchasing Party complies with such procedure, the providing Party, subject to Section 15.1, will not collect such Tax during the effective period of the exemption. Failure to timely provide said resale tax exemption certificate will result in no exemption being available to the purchasing Party for any period prior to the date that the purchasing Party presents a valid certificate.

15.7 If applicable law excludes or exempts a purchase of services under this Agreement from a Tax, but does not also provide an exemption procedure, then the providing Party will not collect such Tax if the purchasing Party (i) furnishes the providing Party with a letter signed by an officer of the purchasing Party claiming an exemption and identifying the applicable law which allows such exemption, and (ii) supplies the providing Party with an indemnification agreement, reasonably acceptable to the providing Party, which holds the providing Party harmless from any tax, interest, penalties, loss, cost or expense with respect to forbearing to collect such Tax.

15.8 With respect to any Tax or Tax controversy covered by this Section 15, the purchasing Party will be entitled to contest, pursuant to Applicable Law, and at its own expense, any Tax that it is ultimately obligated to pay. The purchasing Party will ensure that no lien is attached to any asset of the providing Party as a result of any contest. The purchasing Party will be entitled to the benefit of any refund or recovery resulting from such a

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15.9

16.0

16.1

17.0

17.1

17.2

contest. providing Party. The providing Party will cooperate in any such contest.

Amounts previously paid by the providing Party shall be refunded to the

All notices, affidavits, exemption certificates or other communications required or permitted to be given by either Party to the other under this Section 15 shall be sent in accordance with Section 14 Notices hereof.

Force Majeure

Except as otherwise specifically provided in this Agreement, neither Party will be liable for any delay or failure in performance of any part of this Agreement caused by a Force Majeure condition, including acts of the United States of America or any state, territory, or political subdivision thereof, acts of God or a public enemy, fires, floods, labor disputes such as strikes and lockouts, freight embargoes, earthquakes, volcanic actions, wars, civil disturbances, cable cuts, or other causes beyond the reasonable control of the Party claiming excusable delay or other failure to perform. If a Force Majeure Event shall occur, the Party affected shall give prompt notice pursuant to the Notices section of this Agreement to the other Party of such Force Majeure Event specifying the nature, date of inception and expected duration of such Force Majeure Event, whereupon such obligation or performance shall be suspended to the extent such Party is affected by such Force Majeure Event during the continuance thereof or excused from such performance depending on the nature, severity and duration of such Force Majeure Event (and the other Party shall likewise be excused from performance of its obligations to the extent such Party's obligations relate to the performance so interfered with). The affected Party shall use its reasonable efforts to avoid or remove the cause of nonperformance and the Parties shall give like notice and proceed to perform with dispatch once the causes are removed or cease.

Publicity

The Parties agree not to use in any advertising or sales promotion, press releases or other publicity matters, any endorsements, direct or indirect quotes or pictures implying endorsement by the other Party or any of its employees without such Party's prior written approval. The Parties will submit to each other for written approval, prior to publication, all such publicity endorsement matters that mention or display the other's name andor marks or contain language from which a connection to said name andor marks may be inferred or implied.

Neither Party will offer any services using the trademarks, service marks, trade names, brand names, logos, insignia, symbols or decorative designs of the other Party or its affiliates without the other Party's written authorization.

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Network Maintenance and Management

The Parties will work cooperatively to implement this Agreement. The Parties will exchange appropriate infomation (e.g., maintenance contact numbers, network information, information required to comply with law enforcement and other security agencies of the Government, etc.) to achieve this desired reliability.

Each Party will administer its network to ensure acceptable service levels to all users of its network services. Service levels are generally considered acceptable only when End Users are able to establish connections with little or no delay encountered in the network. Each Party will provide a 24-hour contact number for Network Traffic Management issues to the other's surveillance management center.

Each Party maintains the right to implement protective network traffic management controls, such as "cancel to", "call gapping" or 7-digit and 10-digit code gaps, to selectively cancel the completion of traffic over its network, including traffic destined for the other Party's network, when required to protect the public-switched network from congestion as a result of occurrences such as facility failures, switch congestion or failure or focused overload. Each Party shall immediately noti@ the other Party of any protective control action planned or executed.

Where the capability exists, originating or terminating traffic reroutes may be implemented by either Party to temporarily relieve network congestion due to facility failures or abnormal calling patterns. Reroutes shall not be used to circumvent normal trunk servicing. Expansive controls shall be used only when mutually agreed to by the Parties.

The Parties shall cooperate and share pre-planning information regarding cross-network call-ins expected to generate large or focused temporary increases in call volumes to prevent or mitigate the impact of these events on the public-switched network, including any disruption or loss of service to the other Party's End Users. Facsimile (FAX) numbers and e-mail addresses must be exchanged by the Parties to facilitate event notifications for planned mass calling events.

Neither Party shall use any Interconnection, Resale Service, network element, function, facility, product or service provided under this Agreement or any other service related thereto or used in combination therewith in any manner that interferes with or impairs service over any facilities of SBC TEXAS, its affiliated companies or other connecting telecommunications carriers, prevents any carrier from using its Telecommunications Service, impairs the quality or the privacy of Telecommunications Service to other carriers or to either Party's End Users, causes hazards to either Party's personnel or the public, damage to either Party's or any connecting carrier's facilities or equipment, including any malfunction of ordering or billing systems or equipment. Upon such occurrence either Party may discontinue or refuse service, but only for so long as the

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SBC &

other Party is violating this provision. Upon any such violation, either Party shall provide the other Party notice of the violation at the earliest practicable time.

Law Enforcement and Civil Process

Intercept Devices

Local and federal law enforcement agencies periodically request information or assistance from local telephone service providers. When either Party receives a request associated with an End User of the other Party, the receiving Party will refer such request to the appropriate Party, unless the request directs the receiving Party to attach a pen register, trap-and-trace or form of intercept on the Party’s own facilities, in which case that Party will comply with any valid request, to the extent the receiving Party is able to do so.

Subpoenas

If a Party receives a subpoena for information concerning an End User the Party knows to be an End User of the other Party, the receiving Party will refer the subpoena to the requesting entity with an indication that the other Party is the responsible company. Provided, however, if the subpoena requests records for a period of time during which the receiving Party was the End User’s service provider, the receiving Party will respond to any valid request to the extent the receiving Party is able to do so.

Law Enforcement Emergencies

If a Party receives a request from a law enforcement agency to implement at its switch a temporary number change, temporary disconnect, or one-way denial of outbound calls for an End User of the other Party, the receiving Party will comply so long as it is a valid emergency request. Neither Party will be held liable for any Claims or Damages arising from compliance with such requests, and the Party serving the End User agrees to indemnify and hold the other Party harmless against any and all such Claims.

ChanPes in Subscriber Carrier Selection

Each Party will abide by applicable federal and state laws and regulations in obtaining End User authorization prior to changing an End User’s Local Exchange Carrier to itself and in assuming responsibility for any applicable charges as specified in the FCC’s rules regarding Subscriber Carrier Selection Changes (47 CFR 64. I IO0 through 64.1 170) and any applicable state regulation. Each Party shall deliver to the other Party a representation of authorization that applies to all orders submitted by a Party under this Agreement requiring a LEC change. A Party’s representation of authorization shall be delivered to the other Party prior to the first order submitted to the other Party. Each Party shall retain on file all applicable letters and other documentation of authorization

Sage Agree Bold/Underline Represents Laneuaee Proposed bv Sage and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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20.2

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relating to its End User’s selection of such Party as its LEC, which documentation shall be-available for inspection by the other Party at its request during normal business hours and at no charge.

Only an End User can initiate a challenge to a change in its LEC. If an End User notifies one Party that the End User requests local Exchange Service, and the other Party is such End User’s LEC, then the Party receiving such request shall be free to immediately access such End User’s CPNI subject to the requirements of the applicable Appendix OSS restricting access to CPNI in order to immediately provide service to such End User.

When an End User changes or withdraws authorization, each Party will release End User specific facilities belonging to the ILEC in accordance with the End User’s directions, or the directions of the End User’s authorized agent. Further, when an End User abandons the premise, (that is, its place of business or domicile), SBC TEXAS is free to reclaim the unbundled network element facilities for use by another End User and is free to issue service orders required to reclaim such facilities.

Neither Party shall be obligated by this Agreement to investigate any allegations of unauthorized changes in local Exchange Service (“slamming”) at the request of the other Party provided, however, that each Party shall cooperate with any investigation of a complaint alleging an unauthorized change in local Exchange Service at the request of the FCC or the Commission.

Amendments or Waivers

Except as otherwise provided in this Agreement, no waiver of any provision of this Agreement and no consent to any default under this Agreement will be effective unless the same is in writing and signed by an officer of the Party against whom such, waiver or consent is claimed. In addition, no course of dealing or failure of a Party strictly to enforce any term, right or condition of this Agreement will be construed as a waiver of such term, right, or condition.

Except as otherwise provided for in this Agreement, no provision of this Agreement shall be deemed amended or modified by either Party unless such an amendment or modification is in writing, dated, and signed by an authorized representative of both Parties. The rates, terms and conditions contained in the amendment shall become effective upon approval of such amendment by the appropriate Commissions; and such amendment will not require refunds, true-up or retroactive crediting or debiting prior to the approval of the Amendment Junless the Amendment Drovides for such retroactive creditinp or debitingl. SBC TEXAS and CLEC shall each be responsible for its share of the publication expense (i.e. filing fees, delivery and reproduction expense, and newspaper notification fees), to the extent publication is required for filing of an amendment by a specific state.

SBC & Sage Agree BoldKJnderline ReDreSentS Language ProDosed bv Sage and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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21.3 Neither Party shall be bound by any preprinted terms additional to or different from those in this Agreement that may appear subsequently in the other Party's form documents, purchase orders, quotations, acknowledgments, invoices or other communications.

22.0 Intervening Law

22.1 Chanpe in Applicable Law. The Parties acknowledge that the respective riphts and oblipations of each Partv as set forth in this Agreement are based on the followine, as of the date this Apreement is filed for arbitration with the Commission: the Act, the applicable rules, repulations and Orders promulpated under the Act bv the Federal Communications Commission ("FCC"), and applicable Texas statutes, rules, revulations and Commission orders, and iudicial decisions by courts of competent iurisdiction interpreting and applvinp said federal and Texas statutes, rules, repulations and Orders. The Parties acknowledpe and apree that the FCC adopted its Triennial Review Order on Februarv 20, 2003, and a final order (the "TRO") on Aupust 21,2003. For purDoses of this Agreement, "Chanpe in Applicable Law" shall be defined as (i) any legallv bindinp iudicial decision bv a court of competent iurisdiction, amendment of the Act o r applicable Texas statute, o r lepislative, federal or state regulatory action, rule, repulation or other lepal action that materially revises, reverses, modifies o r clarifies the meaning of the Act, an applicable Texas statute o r any of said rules, regulations, Orders, o r iudicial decisions which otherwise materially affect any of the material provisions set forth in this Apreement and (ii) the TRO as issued bv the FCC. If either Partv believes that a Change in Applicable Law within the meaninp of this section has occurred, that Partv may request renepotiation by written notice to the other Partv. The Parties shall thereafter renepotiate the affected provisions in this Apreement in pood faith and amend this Agreement to reflect such Chanpe in Applicable Law. For avoidance of any doubt, this section shall also applv to situations where this Agreement defines the riphts or obligations of either Party solely by reference to Applicable Law or similar reference. In the event that any renepotiation under this Section 22.0 is not concluded within ninetv (90) davs after one Par@ Pives the other notice that it demands renepotiation pursuant to this provision, o r if at any time d u r i w such ninetv (90) dav period the Parties shall have ceased to negotiate such terms for a continuous period of fifteen (15) business davs or if the non-requesting Party refuses to engage in such renepotiation on the pround that there has been no Chanpe in Applicable Law sufficient to require renepotiation under this Section, the dispute shall be resolved as provided in Section 9 of this Apreement. For purposes of this section, "lepally binding" means that the relevant lepal action has not been stayed, no request for a stay is pending and if any deadline for requestinp a stay is desbnated bv statute or repulation, it has passed.

SBC & Sage Agree Bold/Underline Represents Laneuaee Proposed by Sage and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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22.2 During the pendency of any renegotiation or dispute resolution pursuant to Section 9.1.2, the Parties shall continue to perform their oblipations in accordance with the terms and conditions of this Agreement (and in the manner required prior to the event claimed to constitute a Change in Applicable Law), unless the Commission, the Federal Communications Commission, or a court of competent iurisdictioo determines with particularihr that modifications to this Apreement are rewired to brinp it into compliance with the Act, in which case the Parties shall perform their oblipations in accordance with such determination or ruling. In addition, either Party may petition the PUC for a determination that, during any portion of the period durine which any Chanpe in Applicable Law subiect to this Section 22.0 is still subiect to review and has not vet become final and nonreviewable, the Parties should defer any renepotiation or dispute resolution pursuant to Section 9.1.2 below."

22.3 The Parties further acknowledge and ap,ree that by executing this Apreement, neither Party waives any of its riphts to participate in any proceedinps reparding the proper interpretation and/or application of the Act, applicable rules and rewlations nor does it waive any riphts, remedies, or arvuments with respect to any provisions of this Avreement or any rules, regulations, Orders or laws upon which it is based, including its right to seek legal review or a stay pendinp appeal.

22.1 This Agreement is the result of negotiations between the Parties and may incorporate certain provisions that resulted from arbitration by the appropriate STATE Commission(s). In entering into this Agreement, the Parties acknowledge and agree that on May 24,2002, the D.C. Circuit issued its decision in United States Telecom Association, et. a1 v. FCC, 290 F.3d 415 (D.C. Cir. 2002) ("USTA decision"), in which the Court granted the petitions for review of the Federal Communications Commission's ("FCC") Third Report and Order and Fourth Further Notice of Proposed Rulemaking in CC Docket No. 96-98 (FCC 99-238) ("the UNE Remand Order") and the FCC's Third Report and Order in CC Docket No. 98-147 and Fourth Report and Order in CC Docket No. 96-98 (FCC 99-355) (rel. Dec. 9, 1999) ("the Line Sharing Order"), and vacated and remanded the Line Sharing and UNE Remand Orders in accordance with the decision. In addition, the FCC adopted its Triennial Review Order on February 20,2003, on remand from the USTA decision and pursuant to the FCC's Notice of Proposed Rulemaking, Review of Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, CC Docket No. 01-338 (FCC 01-361) (rel. Dec. 20, 2001). Moreover, on January 25, 1999, the United States Supreme Court issued its opinion in AT&T Corp. v. Iowa Utilities Bd., 525 U.S. 366 (1999) (and on remand, Iowa Utilities Board v. FCC, 219 F.3d 744 (8th Cir. 2000)) and Ameritech v. FCC, No. 98-1381, 1999 WL 116994, 1999 Lexis 3671 (1999) and on appeal to and remand by the United States Supreme Court, Verizon v. FCC, et. al, 535 U.S. 467 (2002). In addition, on April 27,2001, the FCC released its Order on Remand and Report and Order in CC Dockets No. 96-98

SBC & Sage Agree BoldKJnderline Represents Lanmage Proposed bv Sage and opposed by SBC Bold Represents Language Proposed by SBC and opposed by Sage

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and 99-68, 16 FCC Rcd 9151 (2001) (the “ISP Compensation Order”), which was remanded in WorldCom, Inc. v. FCC, 288 F.3d 429 (D.C. Cir. 2002) (all collectively referred to as the “Orders”). On May 9,2003, the Public Utilities Act of Illinois was amended to add Section 13-408 and 13-409, 200 ILCS 913-408 and 13-409, and enacted into law (L‘Illinois Law”). The Illinois Law establishes a specific method for setting certain UNE rates in Illinois, mandates that the Illinois Commerce Commission (“ICC”) apply the method and determine the rates (“ICC Rates”), and expressly deems all interconnection agreements to be amended to contain the ICC Rates immediately upon the ICC’s announcement of such adjusted rates, without further action. In entering into this Agreement, the Parties acknowledge and agree that the provisions set forth in this Agreement are based upon SBC-13STATE’s obligations under FCC rules and regulations as they existed prior to their vacature by the D.C. Circuit in its USTA Decision and prior to the ICC’s promulgation of rates, terms and conditions pursuant to the Illinois Law. By executing this Agreement and any Amendments to such Agreement and carrying out the provisions herein, neither Party waives, but instead expressly reserves, all of its rights, remedies and arguments with respect to the Orders, the Illinois Law and any other federal or state regulatory, legislative or judicial action(s), including but not limited to any legal or equitable rights of review and remedies (including agency reconsideration and court review), and its rights under this Intervening Law paragraph. Notwithstanding anything to the contrary in this Agreement, these rights also include but are not limited to SBC-13STATE’s right to the extent SBC- 13STATE’ has not already invoked the FCC ISP terminating compensation in a particular SBC-13STATE state in which this Agreement is effective and incorporated the rates, terms and conditions of such plan into this Agreement, to exercise its option at any time to adopt on a date specified by SBC-13STATE the FCC ISP terminating compensation plan, after which date ISP-bound traffic will be subject to the FCC’s prescribed terminating compensation rates, and other terms and conditions, and seek conforming modifications to this Agreement. If any reconsideration, agency order, appeal, court order or opinion, stay, injunction or other action by any state or federal regulatory or legislative body or court of competent jurisdiction stays, modifies, or otherwise affects any of the rates, terms and/or conditions (“provisions”) in this Agreement, specifically including but not limited to those arising with respect to the Orders, the affected provision(s) will be immediately invalidated, modified or stayed as required to effectuate the subject order upon the written request of either Party (“Written Notice’). In addition, to the extent this Agreement is in effect in Illinois, the Parties agree that any ICC orders implementing the Illinois Law, including, without limitation, the ICC Rates, shall automatically apply to this Agreement (for the state of Illinois only) as of the effective date of any such order(s) upon Written Notice, as soon as practical thereafter, SBC Illinois shall begin billing CLEC the ICC rates; provided, however, the Parties acknowledge and agree that no later than sixty (60) days from the Written Notice, the Parties will execute a conforming Amendment to this Agreement so that the Agreement accurately reflects the ICC Rates and SBC

SBC & Sage Agree BoldNnderline Represents Laneuaee Proposed bv Saee and ODDosed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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23.0

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Illinois will issue any adjustments, as needed, to reflect that the ICC Rates became effective between the Parties as of the effective date of the applicable ICC order(s). With respect to all other Written Notices hereunder, the Parties shall have sixty (60) days from the Written Notice to attempt to negotiate and arrive at an agreement on the appropriate conforming modifications to the Agreement. If the Parties are unable to agree upon the conforming modifications required within sixty (60) days from the Written Notice, any disputes between the Parties concerning the interpretation of the actions required or the provisions affected by such order shall be resolved pursuant to the dispute resolution process provided for in this Agreement.

Authority

Each person whose signature appears below represents and warrants that he or she has authority to bind the Party on whose behalf he or she has executed this Agreement.

BindinP Effect

This Agreement will be binding on and inure to the benefit of the respective successors and permitted assigns of the Parties.

Consent

Where consent, approval, or mutual agreement is required of a Party, it will not be unreasonably withheld or delayed.

Expenses

Except as specifically set out in this Agreement, each Party will be solely responsible for its own expenses incurred in all activities related to the subject of this Agreement.

Headinm

The headings in this Agreement are inserted for convenience and identification only and will not be considered in the interpretation of this Agreement.

Relationship of Parties

This Agreement will not establish, be interpreted as establishing, or be used by either Party to establish or to represent their relationship as any form of agency, partnership or joint venture. Neither Party will have any authority to bind the other or to act as an agent for the other unless written authority, separate fiom this Agreement, is provided. Nothing in the Agreement will be construed as providing for the sharing of profits or losses arising out of the efforts of either or both of the Parties. Notlung herein will be

SBC & Sage Agree BoldLJnderline Represents Laneuape Proposed by Sage and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

.

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construed as making either Party responsible or liable for the obligations and undertakings of the other Party.

Conflict of Interest

The Parties represent that no employee or agent of either Party has been or will be employed, retained, paid a fee, or otherwise received or will receive any personal compensation or consideration from the other Party, or any of the other Party's employees or agents in connection with the arranging or negotiation of this Agreement or associated documents.

Multiple Counterparts

This Agreement may be executed in multiple counterparts, each of which will be deemed an original but all of which will together constitute but one, and the same document.

Third Par@ Beneficiaries

This Agreement is for the sole benefit of the Parties and their permitted assigns, and nothing herein expressed or implied shall create or be construed to create any Third Party beneficiary rights hereunder. This Agreement shall not provide any Person not a Party hereto with any remedy, Claim, liability, reimbursement, cause of action, or other right in excess of those existing without reference hereto.

Repulatorv Approval

Each Party agrees to cooperate with the other and with any regulatory agency to obtain regulatory approval of this Agreement. During the term of this Agreement, each Party agrees to continue to cooperate with each other and any regulatory agency so that the benefits of this Agreement may be achieved.

Trademarks and Trade Names

Except as specifically set out in this Agreement, nothing in this Agreement will grant, suggest, or imply any authority for one Party to use the name, trademarks, service marks, or trade names of the other for any purpose whatsoever, absent written consent of the other Party. Nothing in this Agreement shall be construed as preventing either Party from publicly stating that it has executed this Agreement with the other Party.

Regulatory Authoritv

SBC TEXAS will be responsible for obtaining and keeping in effect all Federal Communications Commission, state regulatory commission, fianchise authority and other regulatory approvals that may be required in connection with the performance of its

SBC & Sage Agree BoldlLlnderline ReDresents Laneuaee Proposed bv Sage and ODpOSed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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obligations under this Agreement. CLEC will be responsible for obtaining and keeping in effect all Federal Communications Commission, state regulatory commission, franchise authority and other regulatory approvals that may be required in connection with its offering of services to CLEC End Users contemplated by this Agreement. CLEC will reasonably cooperate with SWBT in obtaininp and maintaining any required approvals for which SWBT is responsible, and SWBT will reasonably cooperate with CLEC in obtaining and maintaininp any required approvals for which CLEC is responsible.

34.2 SWBT will not, of its own volition, file a tariff or make another similar filinp which supersedes this Agreement in whole or in part. SWBT will make no filings which are inconsistent with this commitment. This Section is not intended to apply to any SWBT tariffs or filings which do not affect CLEC’s rights or SWBT’s obligations to CLEC under this Agreement. This Section does not impair SWBT’s right to file tariffs nor does it impair SWBT’s ripht to file tariffs proposing new products and services and changes in the prices, terms and conditions of existing products and services, includinp discontinuance or grandfathering of existing features or services, of any telecommunications services that SWBT provides or hereafter provides to CLEC under this APreement pursuant to the provision of Attachment 1: Resale, nor does it impair CLEC’s right to contest such tariffs before the appropriate Commission.

34.3 SBC TEXAS will provide CLEC notice of changes in SBC TEXAS’ Telecommunication Services available for resale, within 45 days of the expected effective date of the tariff or filing, when introducing new products, material changes of products and price increases. SBC Texas will notify CLEC of changes in tariffs in accordance with the Texas Public Utility Commission’s Substantive Rules.

34.4 In the event that SWBT is required by any governmental authority to file a tariff or make another similar filing in connection with the performance of any action that would otherwise be governed by this Apreement, SWBT will provide CLEC notice of the same as set forth in Section 30.3 above.

34.5 If any tariff referred to in Section 30.4 becomes ineffective bv operation of law, through deregulation or otherwise, the terms and conditions of such tariffs, as of the date on which the tariffs became ineffective, will be deemed incorporated if not inconsistent with this Apreement.

35.0 Commission Interpretation of Same or Substantively Similar LanPuaee

35.1 Any ruling by the Commission in a post interconnection agreement dispute interpreting the same or substantially similar language in another Interconnection Agreement shall be deemed-applicable to the same or substantially similar language in this Agreement. Any ruling bv the Commission interpreting the same or

SBC & Sage Agree BoldlUnderline Represents Laneuaee Proposed bv Sage and omosed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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substantively similar language in another Interconnection Agreement is applicable to the same or substantively similar lanpuape in this Apreement.

Tariff References

To the extent a tariff provision or rate is incorporated or otherwise applies between the Parties due to the provisions of this Agreement, i t is understood that said tariff provision or rate applies only in the jurisdiction in which such tariff provision or rate is filed, and applies to the CLEC and only the SBC TEXAS ILEC that operates within that jurisdiction. Further, it is understood that any changes to said tariff provision or rate are also automatically incorporated herein or otherwise hereunder, effective hereunder on the date any such change is effective.

Wherever any Commission ordered tariff provision or rate is cited or quoted herein, it is understood that said cite encompasses any revisions or modifications to said tariff.

Verification Reviews

Subject to each Party's reasonable Confidentiality requirements and except as may be otherwise specifically provided in this Agreement, either Party may audit the other Party's books, records, data and other documents once in each twelve (12) month period with the audit period commencing not earlier than the date on which services were first supplied under this Agreement ("service start date") for the purpose of evaluating (i) the accuracy of the other Party's billing and invoicing of the services provided hereunder and (ii) verification of compliance with any provision of this Agreement that affects the accuracy of Auditing Party's billing and invoicing of the services provided to Audited Party hereunder.

The scope of the audit shall be limited to the services specified in the written notice and to the period which is the shorter of (i) the period subsequent to the last day of the period covered by the audit which was last performed (or if no audit has been performed, the service start date) and (ii) the twenty-four (24) month period immediately preceding the date the Audited Party received notice of such requested audit, but in any event not prior to the service start date.

Such audit will take place at a time and place agreed on by the Parties and begins no later than thirty (30) calendar days after receipt of written notice and shall be completed no later than thirty (30) calendar days after the start of such audit.

Such audit shall be conducted either by the Auditing Party's employee(s) or an independent auditor acceptable to both Parties; provided, however, if the Audited Party requests that an independent auditor be engaged and the Auditing Party agrees, the Audited Party shall pay one-quarter (1/4) of the independent auditor's fees and expenses.

SBC & Sage Agree BoldRInderline Represents LanPuaee Proposed by Sage and opposed by SBC Bold Represents Language Proposed by SBC and opposed by Sage

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If an independent auditor is to be engaged, the Parties shall select an auditor by the twentieth calendar day following Audited Party's receipt of a written audit notice. Auditing Party shall cause the independent auditor to execute a nondisclosure agreement in a form agreed upon by the Parties.

Each audit shall be conducted on the premises of the Audited Party during normal business hours. Audited Party shall cooperate fully in any such audit and shall provide the auditor reasonable access to any and all appropriate Audited Party employees and any books, records and other documents reasonably necessary to assess (i) the accuracy of Audited Party's bills and (ii) Audited Party's compliance with the provisions of this Agreement that affect the accuracy of Auditing Party's billing and invoicing of the services provided to Audited Party hereunder. Audited Party may redact fiom the books, records and other documents provided to the auditor any Audited Party information that reveals the identity of End User(s) of Audited Party except the calling party number.

Each Party shall maintain reports, records and data relevant to the billing of any services that are the subject matter of this Agreement for a period of not less than twenty-four (24) months after creation thereof, unless a longer period is required by Applicable Law.

If any audit confirms any undercharge or overcharge, then the Audited Party will (i) promptly correct any billing error that is revealed in an audit, including making refund of any overpayment by the Auditing Party in the form of a credit on the invoice for the first full billing cycle after the Parties have agreed upon the accuracy of the audit results and (ii) for any undercharge caused by the actions of the Audited Party, immediately compensate Auditing Party for such undercharge, and (iii) in the case of overcharge, the Audited Party will calculate and pay interest as provided in Section 12.1, for the number of calendar days fiom the date on which such overcharge originated until the date on which such credit is issued.

Except as may be otherwise provided in this Agreement, audits shall be performed at Auditing Party's expense, subject to reimbursement by Audited Party of one-quarter (1/4) of any independent auditor's fees and expenses in the event that an audit finds, and the Parties subsequently verify, a net adjustment in the charges paid or payable by Auditing Party hereunder by an amount that is, on an annualized basis, greater than five percent (5%) of the aggregate charges for the audited services during the period covered by the audit.

Any disputes concerning audit results shall be referred to the Parties' respective personnel responsible for informal resolution. If these individuals cannot resolve the dispute within thirty (30) calendar days of the referral, either Party may request in writing that an additional audit shall be conducted by an independent auditor acceptable to both Parties, subject to the requirements set out in Section 36.1. Any additional audit shall be at the requesting Party's expense.

SBC 13 Sage Agree BoldlLlnderline Represents Laneuage Proposed by Sage and ODDosed by SBC Bold Represents Language Proposed by SBC and opposed by Sage

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Either Party may audit the other Party’s books, records and documents more than once annually if the previous audit found (i) previously uncorrected net variances or errors in invoices in the other Party’s favor with an aggregate value of at least five percent (5%) of the amounts payable by the Auditing Party for audited services provided during the period covered by the audit or (ii) non-compliance by Audited Party with any provision of this Agreement affecting Auditing Party’s billing and invoicing of the services provided to Audited Party with an aggregate value of at least five percent (5%) of the amounts payable by Audited Party for audited services provided during the period covered by the audit.

Information obtained or received by either Party in connection with performance of an audit under this Section 36 will be subject to the confidentiality provisions of Section 7 of this Agreement.

Complete Terms

This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes any prior representations, statements, negotiations, understandings, proposals or undertakings, oral or written, with respect to the subject matter expressly set forth herein, provided, however, this Agreement shall not operate as or constitute a novation of any agreement or contract between the Parties that predates the execution andor Effective Date of this Agreement.

Neither Party will be bound by an amendment, modification or additional term unless it is reduced to writing signed by an authorized representative of both Parties. The rates, terms and conditions contained in the amendment shall become effective upon approval of such amendment by the Commission.

Cooperation on Preventing End User Fraud

The Parties agree to cooperate with one another to investigate, minimize, and take corrective action in cases of fraud. The Parties’ fraud minimization procedures are to be cost-effective and implemented so as not to unduly burden or harm one Party as compared to the other.

In cases of suspected fiaudulent activity by an End User, at a minimum, the cooperation referenced in the above paragraph will include providing to the other Party, upon request, information concerning End Users who terminate services to that Party without paying all outstanding charges. The Party seeking such information is responsible for securing the End User’s permission to obtain such information.

SBC TEXAS will make available to Sage all present and future fraud prevention or revenue protection features, including prevention, detection, or control functionality to the same extent that SBC TEXAS provides such protection to itself. These features

SBC & Sage Agree Boldnlnderline Represents LaneuaPe Proposed bv SaPe and opposed bv SBC Bold Represents Language Proposed by SBC and opposed by Sage

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