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COVAD
Covad Communications Company
and
Consumer Net Marketplace, Inc.
"CNM Network"
ISP Customer Agreement for TeleSpeed-SM- Services
Version 4.0 Rev 2.2
Dated: 12/31/98
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This document is for use solely by customers of Covad Communications. It should
not be discussed, shown or referred to outside the customer organization without
prior approval from Covad.
COVAD/CNM ISP CUSTOMER AGREEMENT Dated: 12/31/98
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Covad Communications Company ("Covad") is pleased to bring CNM Network
("Customer") this offer for Covad's TeleSpeed-SM- Service. Covad's TeleSpeed
Service is a permanent virtual circuit using Digital Subscriber Line ("DSL")
technology and provides a high-speed telecommunications data service for
Customer's Internet access clients ("Clients"). The terms of this agreement are
as follows:
- Customer may place orders for Covad's TeleSpeed Services during the
term of this Agreement. Customer shall pay for, and Covad shall
install, Covad's TeleSpeed Services in accordance with and subject to
the terms of this offer and Covad's procedures.
- Customer shall provide Covad with addresses, direct telephone numbers,
work email address and other information required in the client order
form at the online Customer Care Center for successful installation of
Customer's Clients designated to receive Covad TeleSpeed service under
the terms of this agreement ("Agreement"). Covad shall keep all
Client information confidential.
- Customer understands and agrees that the installation and monthly
charges for Covad's Customer TeleSpeed Circuits and Client TeleSpeed
Circuits and related charges shall be as set forth in the attached
Pricing Schedule.
1. TERM OF CONTRACT. This Agreement has an initial term of two years (the
"initial term") and will continue on a month-to-month basis thereafter.
After the initial term, either party may terminate this Agreement upon
thirty (30) days notice. Upon expiration or termination of this Agreement,
Covad will maintain all of Customer's Customer and Client TeleSpeed
Circuits already ordered and provisioned pursuant to this Agreement,
provided that Customer continues to pay all monthly charges for those
Circuits pursuant to Paragraph 4. The obligations of Paragraphs 2, 4, 6,
7, 11, 12, 13, 14, 15, 16, 17, 18 and 19 shall survive termination of this
Agreement.
2. DEFINITION OF CLIENT TELESPEED CIRCUIT.
2.1 A Covad Client TeleSpeed Circuit is a digital data telecommunications
service that consists of one private virtual circuit between a
Client's premise and a Covad serving wire center that utilizes Digital
Subscriber Line ("DSL") technology and is used by Customer and the
Client for Internet access or other information services. A Client
TeleSpeed Circuit provides upstream and downstream maximum throughput
rates that range from up to 144Kbps to 1.5Mbps. The maximum
throughput rate depends on such factors as the distance of the
Client's premise from a Covad serving wire center and the quality of
the copper telephone line serving the premise.
2.2 Provision of a Client TeleSpeed Circuit does not include any Internet
access service.
2.3 Upon approval of Customer and the Client, Covad may provide additional
private virtual circuits ("additional PVCs") over the same facilities
that are used to provide any Client TeleSpeed Circuit pursuant to this
Agreement. These additional PVCs may be used by Covad, Client or
another party to support a variety of services of the Client's
choosing, including, but not limited to, any form of
telecommunications, telecommunications services, or information
services.
2.4 The parties shall undertake commercially reasonable efforts to work
with each other to meet Customer's needs for Covad's services.
3. COVAD AS PREFERRED PROVIDER OF TELESPEED SERVICES.
3.1 During the term of this Agreement, Covad shall be Customer's preferred
provider of DSL technology access to subscribers in any of the
following metropolitan markets (collectively, the "Preferred
Markets"):
Dallas
Denver
Atlanta
Boston (including portions of NH)
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COVAD/CNM ISP CUSTOMER AGREEMENT Dated: 12/31/98
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Chicago (including portions of WI and IN)
Los Angeles
Miami
New York Tri-State
San Diego
San Francisco Bay Area
Seattle
Washington DC Metro Area (DC, MD and VA)
3.2 The Preferred Market Launch Date for a particular Preferred Market is
the date of Customer's acceptance of the first DS1 or DS3 Customer
TeleSpeed Circuit from Covad (as described in Paragraph 10.1) in the
relevant Preferred Market.
3.3 "Preferred provider" means that Customer in each Preferred Market
shall on a commerically reasonable best efforts basis utilize Covad's
TeleSpeed Services to fullfill orders from its clients for DSL
service. Customer shall check availability for service for a client
utilizing Covad's web-based qualifying tool and if available within 30
days, place the order with Covad. If availability is not available,
or availability of service is more than 30 days from the date the
order is taken, Customer shall have the right to seek alternative
service providers for said order. Covad's status as a Preferred
Provider is conditioned upon Covad providing service and pricing which
is reasonably competitive with alternative providers.
4. PAYMENT TERMS. The rates and charges set forth in the attached Pricing
Schedule will apply to Client and Customer TeleSpeed Circuits provided to
Customer during the term of this Agreement. In addition to the rates and
charges listed in the Pricing Schedule, Covad will also bill all applicable
Federal, state, and local mandated surcharges, fees, user's fees, universal
service contributions, local or state telecommunications infrastructure
fees, and taxes to Customer. Covad shall mail an invoice to Customer by
the first day of the month, prior to the month of service, at 1900 E. Los
Angeles, 2nd floor, Simi Valley, CA 93065. This monthly invoice also will
contain any additional surcharges or cancellation fees as described in this
Agreement. Customer shall pay all charges within 30 calendar days of the
date that Covad's monthly invoices are mailed. Unless otherwise specified
in writing by Covad, all payments shall be made to Covad Communications
Company and mailed to Accounts Receivable Dept., Covad Communications
Company, 2330 Central Expressway, Santa Clara, CA 95050.
5. PRICE PROTECTION AND VOLUME COMMITMENTS.
5.1 PRICE PROTECTION. The rates and charges in the Pricing Schedule are
being provided on the basis of the volume commitments set forth in
this Agreement. In the event Customer fails to meet any of the volume
commitments set forth in this Agreement, Covad reserves the right to
amend, modify, or adjust the Pricing Schedule of this Agreement to
ensure that the prices and discounts offered to Customer match those
offered to other customers with similar volume, terms and conditions.
If the list prices of the TeleSpeed Services provided by Covad are
reduced at any time during the term of this Agreement, Customer has
the option to receive those reduced prices, effective on the date in
which they are made available to other Covad Customers. After the
initial term, Covad and Customer will negotiate in good faith for
renewals of term and volume pricing. A minimum of 60 days notice will
be provided in case of a price increase on Customer or Client
TeleSpeed Circuits.
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5.2 VOLUME COMMITMENT. Customer agrees to meet the following volume
commitments during the term of this Agreement:
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DATE IN SERVICE CLIENT
TELESPEED CIRCUITS
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April 1, 1999
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July 31, 1999
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September 30, 1999
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December 31, 1999 and each
month thereafter
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5.3 FAILURE TO MEET VOLUME COMMITMENT. On each monthly billing date
subsequent to the dates listed in Paragraph 5.2, if Customer has not
met the appropriate volume commitment, Covad will include on the
monthly bill an additional charge, calculated in in the following
manner:
(Monthly charge for a TeleSpeed 144 circuit listed in Pricing Schedule)
-multiplied by-
[ (Appropriate Interim or Final Volume Commitment) -
(Number of Client TeleSpeed Circuits in service as of billing date) ]
5.4 Customer acknowledges and understands that the lack of facilities or
other operational impediments may preclude or delay Covad's ability to
provide any particular TeleSpeed Circuit in any particular market.
Customer will be relieved of the volume commitments set forth in this
Agreement only if Covad is not able to provide its TeleSpeed Services
from at least five hundred (500) central offices by December 31, 1999.
In the event Covad terminates its service and ceases operation in any
Preferred Market, Customer and Covad shall re-negotiate the volume
commitment set forth in Section 5 of this Agreement within 30 days of
any such service termination.
6. LIMITED WARRANTY. Covad warrants to Customer, subject to the limitations
set forth below, that Covad's TeleSpeed services shall operate in
substantial accordance with the terms of this Agreement during the term of
this Agreement.
A. Customer understands and acknowledges that the actual transmission
speeds delivered by Covad may vary from the transmission speeds
otherwise expected by Customer or its Clients based on such factors as
the length and gauge of the line serving the Client and other
operational characteristics of the facilities and equipment used by
Covad. Covad's TeleSpeed Services are subject to the attached Service
Level Agreement ("SLA").
B. Covad shall use commercially reasonable efforts to provide
installation, repair and maintenance functions for Covad's TeleSpeed
Services. In the event that a Client experiences and promptly
notifies Customer, who then promptly notifies Covad, of a substantial
reduction in transmission speed or significant interruption of
service, Covad will undertake, at no charge to Customer, commercially
reasonable efforts to restore Client's TeleSpeed Service. Covad shall
not be responsible for service issues concerning a Client's computer,
network or software.
C. Customer understands and acknowledges and represents and warrants that
it will inform its Clients that Covad's TeleSpeed Service does not
provide 911 or other emergency and ancillary services conventionally
available from incumbent local phone companies.
D. Customer shall provide first-level support for all of its Clients.
Covad shall provide commercially reasonable second-level support.
E. Customer understands and acknowledges that Covad's TeleSpeed Service
is limited to certain regions in the United States. Covad reserves the
sole and exclusive right to determine the expansion of its service
area, and the right to maintain and reconfigure its service.
F. Customer acknowledges and understands that the lack of facilities or
other operational impediments may preclude or delay Covad's actual
installation, repair and maintenance of Covad's TeleSpeed Service in
any particular market and to any particular Client.
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COVAD/CNM ISP CUSTOMER AGREEMENT Dated: 12/31/98
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G. Covad will make reasonable efforts to provide five (5) business-day
notification to Customer on Scheduled Network Maintenance. Covad may
interrupt its provision of service for maintenance and other
operational reasons, without any compensation or notice to Customer
other than described in the attached SLA. Covad also reserves the
sole and exclusive right to terminate its service in any area or cease
operations with 60 days notice to Customer.
H. This limited warranty shall not apply if: (1) the Client's equipment
has been subjected to unusual physical or electrical stress, misuse,
neglect, accident or abuse, or damaged by any other external causes;
(2) Covad's TeleSpeed Service or equipment has been repaired or
altered by anyone other than Covad or Covad's subcontractors or
affiliates, without Covad's express and prior written approval; (3)
Covad's TeleSpeed Service or equipment has been improperly installed
by someone other than Covad or Covad's subcontractors or affiliates;
or (4) Covad's TeleSpeed Service or equipment is used in violation of
applicable law or in violation of instructions furnished by Covad.
I. Warranty: Inside Wire Customer TeleSpeed Circuit & Client TeleSpeed
Circuit. All Covad-installed or repaired premise wiring is warranted
to be free from defects for a period of 30 calendar days from the date
of work completion. Covad may outsource inside wire installations.
J. Warranty: Equipment Client Premise Equipment. If the Customer
purchases client premise equipment directly from Covad, the equipment
will carry a manufacturer's warranty of one year beginning on the
billing start date for the Covad service. In the event that the
equipment is determined to be faulty within this warranty period,
Covad will mail the replacement equipment to the Customer to arrive
within 3 business days.
K. Year 2000 Compliance: Covad has taken active steps to assure that
Covad's TeleSpeed Service is Year 2000 compliant. Covad represents
and warrants that the equipment, software, and systems it has
purchased, developed or deployed to support its TeleSpeed services are
Year 2000 compliant. Customer acknowledges that Covad's TeleSpeed
Service is also dependent on the systems of the local telephone
companies and other carriers. Covad cannot make any representations
with respect to Year 2000 compliance of the systems of these other
carriers.
THE FOREGOING LIMITED WARRANTIES SHALL BE IN LIEU OF AND EXCLUDE ALL OTHER
EXPRESS OR IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR USE OR PURPOSE.
7. LIMITATION OF LIABILITY. Except as otherwise provided for in this
Agreement, neither party shall have any liability to the other party for
any special, incidental, or consequential damages of any kind, regardless
of whether such damages are foreseeable by either or both parties.
Except as specifically provided in this Agreement , this agreement does not
provide and shall not be construed to provide third parties, including any
Client, with any remedy claim, cause of action or privilege.
8. ORDERING AND PROVISIONING OF TELESPEED SERVICE. Customer will order, and
Covad will install, maintain, and provide Covad TeleSpeed services in
accordance with Covad's Internet Service Provider Program Binder, which may
be changed by Covad from time to time during the term of this Agreement,
provided that no such change shall materially or adversely effect Customer.
Customer acknowledges that it has received a copy of Covad's Internet
Service Provider Program Binder prior to execution of this Agreement.
9. ACCEPTANCE OF CLIENT TELESPEED CIRCUITS AND CPE.
9.1 Client TeleSpeed Circuit. Covad considers an installation successful
if the maximum throughput rate is equal to or greater than 80% of
ordered service. An email will be sent to Customer with the installed
maximum throughput rates and the Client TeleSpeed Circuit to be
billed. The Customer has a 3-business day acceptance period to cancel
or change the installed service. If the Customer does not respond to
cancel or change the service, Covad will assume the installation is
successful. If the Customer decides to cancel the service, there will
be no charge for installation and the equipment will be returned at no
charge. When TeleSpeed 144 is not ordered, but it is the fastest
circuit that can be installed, the Customer may elect to keep the
Covad supplied and installed client premise equipment in place (no
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COVAD/CNM ISP CUSTOMER AGREEMENT Dated: 12/31/98
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additional installation required). The Customer may also elect to
replace the equipment (Covad or Customer supplied) which may require a
new installation (no charge to Customer) for TeleSpeed 144.
10. BILLING START DATES.
10.1 Customer TeleSpeed Circuit. Billing for a Customer TeleSpeed Circuit
will start upon Customer's acceptance of the DS1 or DS3 from Covad
(the "billing start date"). If the Customer TeleSpeed Circuit is
ready from Covad (including port configuration and the firm order
commit date has passed) but the Customer is not ready to accept the
circuit, Covad will begin billing for the Customer TeleSpeed Circuit.
Covad will not assess the monthly charge listed in the attached
Pricing Schedule for the first Customer TeleSpeed DS3 Circuit in each
Preferred Market (the "first Preferred Market DS3") until Customer
places orders for Fifty (50) Client TeleSpeed Circuits in that
Preferred Market after the Preferred Market Launch Date. Upon receipt
of fifty (50) Client TeleSpeed Circuits in that Preferred Market,
Covad will bill Customer 1/2 (on a prorated basis) of the monthly
charge listed in the attached Pricing Schedule for the first Preferred
Market DS3 up to the date in which Customer places its 251st order for
Client TeleSpeed Circuits in that Preferred Market after the Preferred
Market Launch Date. Thereafter, Covad will bill (on a prorated basis)
the full monthly charge for the first Preferred Market DS3. All
subsequent Customer TeleSpeed DS3 Circuits ordered and provided in the
Preferred Market will be billed in full as described in the Pricing
Schedule.
10.2 Client TeleSpeed Circuit. Billing for a Client TeleSpeed Circuit will
start on the date that the service is successfully installed (the
"billing start date"), unless the TeleSpeed service is rejected within
the 3-day Acceptance period as defined herein.
11. CANCELLATION AND RETURN POLICIES.
11.1 Customer TeleSpeed Circuit.
11.1.1 The Customer is required to give 30 calendar days notice to
Covad to disconnect the Customer TeleSpeed Circuit. All
Client TeleSpeed Circuits served in the relevant
metropolitan market must be cancelled prior to disconnecting
the Customer TeleSpeed Circuit.
11.1.2 Customer will notify Covad of all cancellations in writing
(the "notice of cancellation"). Upon receipt of a notice of
cancellation, Covad will bill the circuit to the end of the
service date in addition to other charges described in this
Paragraph.
11.1.3 The minimum initial term for each Customer TeleSpeed Circuit
will be one year, continuing on a month-to-month basis
thereafter. Customer may order a longer initial term for
any particular Customer TeleSpeed Circuit.
11.1.4 If Covad receives a notice of cancellation of a Customer
TeleSpeed Circuit within 60 days of the billing start date,
Customer will not incur any additional cancellation fee.
Covad will NOT refund installation and monthly Customer
TeleSpeed Circuit charges incurred within this 60-day
cancellation period.
11.1.5 If Covad receives a notice of cancellation of a Customer
TeleSpeed Circuit within the first 90 days, all market
Development Funds issued to Customer must be reimbursed to
Covad when Customer cancels the circuit.
11.1.6 If Covad receives a notice of cancellation of a Customer
TeleSpeed Circuit more than 60 days after the billing start
date, Customer must pay installation and monthly charges for
the remainder of the initial term of that particular
Customer TeleSpeed Circuit, unless Covad is notified in
writing of service inadequacies and fails to rectify these
inadequacies within 5 business days of receipt of such
notice.
11.2 Client TeleSpeed Circuit.
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11.2.1 Customer will notify Covad of all cancellations in writing
or email (the "notice of cancellation"). Upon receipt of a
notice of cancellation, Covad will cancel the Client
TeleSpeed Circuit within one business day. Covad will bill
the circuit to the end of the service date in addition to
other charges described in this Paragraph.
11.2.2 The minimum initial term for each Client TeleSpeed Circuit
will be one year, continuing on a month-to-month basis
thereafter. Customer may order a longer initial term for
any particular Client TeleSpeed Circuit.
11.2.3 If Covad receives a notice of cancellation of a Client
TeleSpeed Circuit within the 3-business day Installation
Acceptance Period, Covad will charge the Customer for
installation only.
11.2.4 If Covad receives a notice of cancellation of a Client
TeleSpeed Circuit within 60 days of the billing start date,
Customer will not incur any additional cancellation fee.
Covad will NOT refund installation and monthly Customer
TeleSpeed Circuit charges incurred within this 60-day
cancellation period.
11.2.5 If Covad receives a notice of cancellation of a Client
TeleSpeed Circuit more than 60 days after the billing start
date and during the first year after the billing start date
for that circuit, Customer will pay the Client TeleSpeed
Circuit Early Cancellation Fee listed in the Pricing
Schedule, unless Covad is notified in writing of service
inadequacies and fails to rectify these inadequacies within
5 business days of receipt of such notice.
11.3 Customer Premises Equipment
11.3.1 Client premise equipment purchased directly from Covad can
be returned to Covad if it is unused and in its original
packing within 30 days from Covad's original shipment date.
A 25% equipment handling and restocking charge will be
charged to the Customer by Covad. Customer should call Covad
Customer Care/Order Administration to receive a Return
Materials Authorization (RMA) number and to ship the
equipment back to Covad (the Customer shall pay all shipping
charges associated with this return).
12. COMMUNICATION. The Customer should refer to Covad's online Customer Care
Center for the majority of communication to and from Covad. All
communication from Covad related to Covad's TeleSpeed Services provided to
Customer will be directed to the Customer. Scheduling of visits to the
Client site will be done by the Customer in conjunction with Covad Customer
Care. All information discussed and agreed to with the Customer will be
available to the Customer in the online Customer Care Center.
13. CONFIDENTIAL INFORMATION. Each party shall limit disclosure of the other
party's confidential information to employees and contractors with a need
to know. Neither party shall disclose confidential information of the other
party to any third party. Nothing herein shall supercede the terms of any
non-disclosure agreement signed by the parties.
14. CUSTOMER REPRESENTATIONS AND RIGHTS.
Customer represents and warrants that it will utilize Covad's TeleSpeed
Services to provide Internet access and other services in accordance with
applicable law. Nothing in this contract shall limit Customer's ability to
provide or resell value-added, "enhanced" or "information" services to
others that utilize telecommunications or telecommunications services
provided to Customer by Covad pursuant to this Agreement. However, at all
times Customer will remain fully responsible for payment for such services
ordered in addition to all other obligations of this Agreement. Nothing in
this Agreement may be construed to prevent Customer or an affiliate of
Customer from ordering additional PVCs to any Client in order to support
telecommunications or telecommunications services for a separate and
additional charge. The provision of such additional PVCs to Customer will
be pursuant to a separate Agreement between Covad and the Customer.
Customer acknowledges that it shall not, in the ordinary course of its
business, when using Covad's network services, be able to identify, and
distinguish between, packet data transmissions that originate and terminate
within the same state (intrastate transmissions), and those packet data
transmissions that originate and terminate in different states (interstate
transmissions), and acknowledges that it is impractical to identify,
distinguish and measure its intrastate and interstate
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COVAD/CNM ISP CUSTOMER AGREEMENT Dated: 12/31/98
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transmissions on Covad's network. Further, Customer estimates (on a good
faith, rough-guess basis) that more than ten percent of all data packets
transmitted on Covad's network, including those to and from the Internet,
will consist of interstate transmissions.
Nothing in Section 14 or any other provision of this Agreement shall limit
or impede the ability of Customer to offer any services, including voice
over IP, to Customer's clients which utilize the Covad TeleSpeed service.
15. FORCE MAJEURE. Covad and customer shall not be responsible for any failure
to perform any obligation or provide service hereunder because of any Act
of God, strikes, work stoppage, equipment or facilities shortages,
governmental acts or directives, war, riot or civil commotion, or any other
force beyond Covad's and customer's, as the case may be, reasonable
control. Customer's and Covad's remedies are limited as set forth herein.
16. ENTIRE AGREEMENT; AMENDMENTS IN WRITING; SEVERABILITY. This Agreement,
which includes all Attachments and Schedules referenced herein, constitutes
the entire Agreement between the parties concerning the subject matter
hereof and supersedes any prior agreements, representations, statements,
negotiations, understandings, proposals or undertakings, oral or written,
with respect to the subject matter expressly set forth herein. Any
amendment or supplement to this Agreement shall be in writing. If any
provision of this Agreement shall be held to be illegal, invalid or
unenforceable, each party agrees that such provision shall be enforced to
the maximum extent permissible so as to effect the intent of the parties,
and the validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired thereby. If
necessary to effect the intent of the parties, the parties shall negotiate
in good faith to amend this Agreement to replace the unenforceable language
with enforceable language that reflects such intent as closely as possible.
17. DISPUTE RESOLUTION AND CHOICE OF LAW. The parties shall attempt to resolve
any disputes between them prior to resorting to litigation. Customer's
remedies are limited as set forth herein. Any dispute arising between the
parties shall be governed by California law.
18. ASSIGNMENT. Customer may not assign or transfer the rights or obligations
under this Agreement to any third person (excluding transfers incident to
an acquisition or change in control of Customer) without the prior written
consent of Covad.
19. INTELLECTUAL PROPERTY. Each party will continue to independently own its
intellectual property, including all patents, trademarks, trade names,
service marks, copyrights, trade secrets, proprietary processes and all
other forms of intellectual property. Any improvements to existing
intellectual property will continue to be owned by the party already
holding such intellectual property. The parties agree to authorize use or
cross-license intellectual property only to the extent necessary to meet
their respective commitments of this Agreement.
COVAD COMMUNICATIONS COMPANY CNM NETWORK (CUSTOMER)
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