Loyalty Discount Terms and Conditions

Ponderosa (the Company) offers the Loyalty Discount promotion (the Promotion) as a monthly recurring discount of $5.00 to customers who meet the multiple product subscription qualifications in accordance with the following terms and conditions.

Qualification for the Promotion is per telephone number. Each telephone number eligible for the Promotion must be subscribed to the combination of qualifying products. See paragraph 3 Qualifying Products List. The Loyalty Discount will be prorated for the number of actual days a telephone number is eligible in the billing cycle when a customer enters or exits qualification. Customer must maintain qualifying products to remain eligible for the Promotion.

Ponderosa may terminate a customer’s eligibility for the Promotion when the customer fails to continuously qualify in the multiple product requirements, or when a customer’s service is disconnected for non-payment of qualifying products.

Customer may cancel qualifying products to exit the Promotion at any time by notifying Ponderosa Customer Care via telephone call or in writing. Other conditions or restrictions may apply subject to the terms and conditions for each enrolled product, which can be viewed on our website at http://www.goponderosa.com .

Required products include:

1. Ponderosa Long Distance PLD Zero Plus: $4.20 monthly recurring charge, 60 minutes billed at no charge, 7.9 cents per minute beginning at the 61rst minute, for anytime domestic direct dialing. The monthly recurring charge is billed in advance while the toll charges are billed in arrears.

2. Choose at least ONE option from the following categories:

Basic Cable ($30.95)

Internet ADSL ($44.95), Internet Dial-up ($24.95), Internet T-1 ($800.00), Internet for School ($24.95)

Caller ID Residential ($5.00), Caller ID Business ($5.00), Calling Name ID Residential ($6.00), Calling Name ID Business ($6.00), Voice Mail Messaging 1 ($5.95), Voice Mail Messaging 2 ($7.95), Voice Mail Messaging 3 ($9.95), Greeting Only Mailbox ($3.95) AND Inside Wire Maintenance Residential ($.95), Greeting Only Mailbox ($3.95) AND Inside Wire Maintenance Business ($1.95)

Effective August 1, 2006 customers who qualify for and enroll in the promotion will remain eligible as long as they continuously qualify. Ponderosa reserves the right to discontinue the promotion to new potentially eligible customers at any future date without notice and will do so by placing a closing date on these terms and conditions posted at www.goponderosa.com/loyalty. Ponderosa may terminate this agreement without cause upon 30 days written notice to the customer.

There are no administration charges to the customer for the Promotion initiation. Other charges may apply for the initiation of new services.