Advantage Program Addendum
--------------------------------------------------------------------------------
EXHIBIT 10.26
SERVICES AGREEMENT
This Agreement is made as of 12/3 , 199 9 ("Effective Date"), between Covad
Communications Company, a California corporation) ("Covad") FASTNET, A
PENNSYLVANIA CORPORATION, the "Customer" listed below.
----------------------------------------------------------------------------------------------------------------------
Customer Information
------------------------------------------------------------------------- --------------------------------------------
Customer Name: FastNet Contact: ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------------------------------------- --------------------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. Phone: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------- --------------------------------------------
City: Bethlehem State: Pa. Zip: 18015 Fax: ▇▇▇-▇▇▇-▇▇▇▇
------------------------------------------------------------------------- --------------------------------------------
Type: -X- ISP ______ Corporate E-Mail: ▇▇▇▇▇@▇▇▇▇.▇▇▇
------------------------------------------------------------------------- --------------------------------------------
------------------------------------------------------ ------------------------------ ----------------
Exhibits Terms Page
------------------------------------------------------ ------------------------------ ----------------
Terms and Conditions Expires: 1-2
------------------------------------------------------ ------------------------------ ----------------
Volume Commitment 5,000 line commitment 3
------------------------------------------------------ ------------------------------ ----------------
Price Schedule - TeleSpeed" Services 4-6
------------------------------------------------------ ------------------------------ ----------------
Service Level Agreement 7-10
------------------------------------------------------ ------------------------------ ----------------
Price Schedule TeleSurfer Services
------------------------------------------------------ ------------------------------ ----------------
Advantage Addendum with National Circuit
------------------------------------------------------ ------------------------------ ----------------
Marketing Development Funds
THIS AGREEMENT INCLUDES THE ATTACHED TERMS AND CONDITIONS AND ALL OTHER EXHIBITS
REFERENCED HEREIN, AND CONTAINS, AMONG OTHER THINGS, WARRANTY DISCLAIMERS AND
LIABILITY LIMITATIONS. Any different or additional terms of any related purchase
order, confirmation, or similar form shall have no force or effect, unless
signed by both parties after the date hereof. References in this Agreement or
any exhibit to a capitalized term appearing on this cover page shall have the
meaning or value of such term on this cover page.
COVAD COMMUNICATIONS COMPANY: CUSTOMER: FASTNET
/s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ 12/3/99
-------------------------------- ------------------------------------------
Name Date Name Date
CEO
-------------------------------- ------------------------------------------
Title Title
1
ADVANTAGE PROGRAM ADDENDUM
This Advantage Program Addendum ("Addendum") is made effective as of the third
day of December, 1999 ("Addendum Effective Date") by and between Covad
Communications Company, a California corporation ("Covad"), and the "Customer"
described in the Services Agreement between Covad and Customer (the
"Agreement"). Covad and Customer now wish to amend the Agreement.
The parties agree: that this Addendum supersedes all proposals, oral or written,
all negotiations, conversations, or discussions between or among parties
relating to the subject matter of this Addendum and all past dealing or industry
custom; that this Addendum shall be integrated in and form part of the Agreement
upon execution; and that all terms and conditions of the Agreement shall remain
unchanged except as modified in this Addendum, and where the terms of the
Agreement conflict with those of this Addendum, however, the terms of this
Addendum shall control.
In consideration of the foregoing and the mutual covenants contained in this
Addendum, and other consideration, which the parties acknowledge is sufficient,
Covad and Customer agree that the Agreement is hereby amended in the manner set
forth in the attachment hereto ("Addendum Specifics").
IN WITNESS WHEREOF this Addendum has been executed by the parties hereto by
their employees duly authorized as they so declare.
COVAD COMMUNICATIONS COMPANY: CUSTOMER: FASTNET
/s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ 12/3/99
-------------------------------- ------------------------------------------
Name Date Name Date
CEO
-------------------------------- ------------------------------------------
Title Title
2
Advantage Program Addendum - Schedule A
--------------------------------------------------------------------------------
The parties hereby amend the Agreement to provide as follows:
1. Customer agrees that Covad shall be Customer's preferred DSL provider
such that 90% of all DSL services (or similar services) sold or resold
by Customer to its End Users shall be purchased from Covad and not from
any other provider, provided that if Covad is unable to provide DSL
service to an End User within 60 days of a bona fide order being placed
with Covad for such, Customer may provide DSL service to such End User
through a party other than Covad. Customer will provide Covad on a
quarterly basis, an accounting of all DSL services sold or resold by
Customer during such prior quarter so that Covad may verify Customer's
compliance with the 90% preferred provider commitment set forth above.
2. Customer agrees to staff a subject matter expert on Covad and DSL that
is dedicated to receiving information from Covad about DSL as well as
any sales leads that Covad may send to Customer as part of any demand
generation programs.
3. Customer agrees to develop a strategy to implement e-commerce links
between Customer and Covad. These links include, but are not limited
to, API implementation, Covad-branded landing pages on Customer's web
site from which End Users can place orders, and detailed reporting on
End User lines sold through e-commerce links.
4. If customer abides by all of its obligations under this Addendum and
under the Agreement, customer will be eligible to participate in
Covad's then-applicable Advantage Program as such Program may exist
from time to time. Pricing and other terms for services specifically
related to the Advantage program are attached as schedules to this
Addendum.
3
TERMS AND CONDITIONS
SCHEDULE A
National Customer Circuit Service
Covad hereby offers to Customer a National Customer Circuit Service
(the "National Service") option to its TeleSpeed and TeleSurfer
Services.
The National Service will provide National backhaul connectivity across
Covad's National network and will include local access connectivity
over one (1) DS-3 Customer Circuit to a single point within Covad's
current service area. Pricing does not include TeleSpeed and TeleSurfer
End User monthly charges.
NATIONAL CUSTOMER CIRCUIT MONTHLY RECURRING CHARGES:
Subscribed Data Rate -- Billed-in advance
------------------ ------------
Data Price per
Rate* Month
------------------ ------------
5 Mbps [ * ]
------------------ ------------
10 Mbps [ * ]
------------------ ------------
20 Mbps [ * ]
------------------ ------------
30 Mbps [ * ]
------------------ ------------
Full DS-3 [ * ]
------------------ ------------
*Total peak bit rate, including all ATM headers
EXCESS USAGE - if Customers actual aggregate data rate utilization over a
National Circuit exceeds the subscribed data rate on the above schedule, the
following excess usage charges shall apply, billed in arrears:
------------------------------------------------------------------ -------------------------------------
0-5% of usage samples (per month) above subscribed rate: [NO CHARGE]
------------------------------------------------------------------ -------------------------------------
------------------------------------------------------------------ -------------------------------------
5% or higher of usage samples (per month) above subscribed rate: [ * ]
------------------------------------------------------------------ -------------------------------------
Customer shall have the option to change the subscribed data rate for the
current month until 5:00 p.m. PST on the day prior to the last business day of
each current month. Changes in the subscribed data rate will be credited or
debited in the following billing cycle.
NATIONAL CUSTOMER CIRCUIT NON-RECURRING CHARGES:
New Customer Circuits - [ * ]
Conversion of Existing Local Customer Circuit to a National Circuit -
No charge.
Conversion of National Customer Circuit to a Local Circuit* - No
charge.
[*] We are seeking confidential treatment of these terms, which have been
omitted. The confidential portion has been filed separately with the
Securities and Exchange Commission.
4
TERMS AND CONDITIONS
Re-provisioning ("Migration") of end-user PVCs between two different
Local and National Circuits - [*] per end user PVC until such time as
Covad introduces an automated tool on ▇▇▇▇▇▇▇.▇▇▇▇▇.▇▇▇. Covad expects
to introduce such tool on or before February 28, 2000. Migration of
end-user PVCs between any two individual Local and National Circuits
with the automated tool will incur a charge of [*] per use, for an
unlimited number of PVC migrations.
All non-local TeleSurfer end user PVCs must be migrated off of the
National Circuit before it can be converted to a Local Circuit.
TERMS OF USE
Customer will pay the applicable Monthly and Non-Recurring Charges specified
above pursuant to the terms of the Agreement. Remote region End User traffic can
be combined with and carried with local region traffic on the National Service
Customer Circuit, however all traffic will be included in the data rate
subscribed to as indicated in the above table.
National Service is to be used expressly for the provisioning of TeleSpeed and
TeleSurfer Service to individual End Users. Customer represents that the actual
aggregate data rate utilization by End Users shall not exceed the maximum data
rate subscribed to above (95% or more of Customer Circuit data rate usage
samples, sampled at 5-minute intervals, shall be less than subscribed data rate
in any calendar month). If the actual Customer Circuit data rate used by
Customer (for more than 5% of samples over specified intervals) for National
Service exceeds the subscribed data rate, then Customer shall pay the
appropriate monthly excess usage charges outlined above.
Covad expects to introduce SLAs for TeleSpeed Service provisioned on a National
Circuit prior to December 31, 1999, which will replace the standard TeleSpeed
SLA Agreement outlined elsewhere in the Agreement. Customer shall not receive
the benefit of the SLA for National Service prior to its introduction.
[*] We are seeking confidential treatment of these terms, which have been
omitted. The confidential portion has been filed separately with the
Securities and Exchange Commission.
5
TERMS AND CONDITIONS
1. DEFINITIONS. As used herein: "Services" are services using digital subscriber
line ("DSL") technology to provide high-speed telecommunications data services
identified in the attached Price Schedule(s) which may include business-grade
TeleSpeed and TeleSpeed Remote Services and consumer-grade Telesurfer Services)
to Customer's Internet and network access customers ("End User"), that Covad
makes available at its discretion, and as more fully described on the Covad Web
Site: "End User Circuit" is a digital data telecommunications service that
consists of one permanent virtual circuit to an End User's premise utilizing DSL
technology. An End User Circuit provides upstream and downstream maximum
throughout rates that range from 144Kbp,-up to 1.5 Mbps (depending on what
Customer orders for that End User). Provision of an End User Circuit does not
include any Internet access service: "Customer Circuit" is a backhaul circuit
between Covad's regional data center or hub and Customers point-of-presence in a
particular region, this is generally required before Covad can provide Services
in that region. Customer may order a Customer Circuit from the Web Site. "Web
Site" means Covad's customer ordering web site located at:
▇▇▇▇://▇▇▇▇▇▇▇.▇▇▇▇▇.▇▇▇.
2. PROVISION OF SERVICES. Subject to payment of all applicable fees, Covad will
use reasonable commercial efforts to supply the Services that Customer may order
from time to time through the Web Site. All Services will be supplied in
accordance with the Agreement, these Terms and Conditions, and the current
standard Customer Policies. Customer shall purchase Services for each End User
for an initial term of one (1) year ("End User Term"), and shall maintain each
Customer Circuit for a minimum one (1) year term ("Customer Term"), after which
Covad shall continue to provide Services to such Customer on a monthly basis,
subject to continuing payment of applicable fees and Customer's compliance of
terms and conditions requested by Covad. Covad reserves the sole and exclusive
right to determine the expansion of its service area, and the fight to maintain,
reconfigure, or discontinue any Service. Customer understands that Covad's
performance is dependent in part on third party actions, including, without
limitation, Customer and its End Users. Accordingly, any performance to be
rendered by Covad hereunder shall be appropriately waived or delayed to account
for such actions or inactions. Customer shall provide Covad with all information
reasonably requested (including, without limitation, information about each End
User) in connection with each order placed.
3. CUSTOMER CIRCUITS. Customer must order, and Covad must provide, a Customer
Circuit before Covad can supply any End User Circuits or Services through such
Customer Circuit. All one-time fees ("One-time Fees") will be due, and all
monthly fees will start, for each Customer Circuit upon Covad's notification to
Customer that the Customer Circuit is complete.
4. END USER CIRCUITS. Customer must order and Covad must successfully provide,
an End User Circuit for each End User before Covad can supply any Services for
that End User. Covad and Customer agree that an End User Circuit shall be
successfully provided if the maximum throughput of such End User Circuit is 80%
of the ordered Service. If Covad is unable to
6
TERMS AND CONDITIONS
successfully provide an End User Circuit for the ordered service, Covad will
offer the End User the maximum available throughput rate and available Service.
Covad will notify Customer if End User declined the Circuit, or at what
throughput rate the End User accepted the Circuit. All One-time Fees will be
due, and all monthly fees will start, for each End User Circuit upon Covad's
notification to Customer of successfully providing of such End User Circuit.
5. EQUIPMENT. Customer may choose to have Covad supply and configure the
necessary equipment for an End User Circuit and Services at the End User
premises. Customer is responsible for changes to any End User premise equipment,
software and configuration after Covad completes its service setup. Covad will
▇▇▇▇ any equipment charges to Customer as part of the One-time Fees for the End
User Circuit. Covad shall have no obligation or liability in connection, with
any equipment not purchased through Covad and configured by Covad, or for any
abuse or misuse of any equipment by any party other than Covad. Covad shall pass
through to Customer any warranties from the manufacturers of equipment that
Covad installs at Customer's or an End User's premises. Covad shall have no
obligation to repair or maintain any equipment, and Customer shall be
responsible for seeking warranty and other service directly from the
manufacturer. However, Covad shall provide replacement End User premise
equipment as described in the Service Level Agreement ("SLA"). If Customer
purchases End User premise equipment directly from Covad, it can be returned to
Covad only if the equipment is in original working condition and in its original
packing within thirty (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 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).
6. FEES AND PAYMENT TERMS. Customer shall pay Covad the One-time monthly fees
and other fees shown in the applicable Pricing Schedule(s) for the setup,
operation and providing of Services, Customer Circuits, and End User Circuits.
The fees billed to Customer for Services shall not change during the Initial
Term (as defined below); thereafter. Covad shall be free to change any of the
fees upon notice to Customer. Covad shall invoice Customer once a month, Covad's
invoices shall ▇▇▇▇ Customer for Services one month in advance. For new End
Users, setup during a month, Covad's invoice will reflect all One-time Fees,
prorated monthly fees for such month and the advance monthly fees. Customer
shall pay all invoiced fees no later than thirty days from invoice date. Late
payments will accrue interest at a rate of one and one-half percent (1 1/2%) per
month, or the highest rate allowed by applicable law, whichever s lower, and
Customer shall pay all collection costs incurred by Covad (including, without
limitation, reasonable attorney's fees). In certain situations, Covad may
require Customer to deposit funds with Covad to secure payment of fees owed by
Customer hereunder. Such deposited funds shall not bear interest If Customer has
a bone Fide dispute with any of the amounts on an invoice ("Disputed Amounts"),
Customer must pay all amounts not in dispute as set forth above. and provide
Covad with a written request for billing adjustment together with all supporting
documentation within sixty (60) days from the date of the invoice or customers'
fight to billing adjustment shall be waived. In the event of a billing dispute
the parties shall promptly resolve the dispute by mutual agreement or by
arbitration. Unless otherwise specified by Covad air payments shall be made to
Covad Communications Company and mailed to Accounts
7
TERMS AND CONDITIONS
Receivable Dept., Covad Communications Company, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Customer shall be responsible for all applicable Federal,
state, and local mandated surcharges, fees, user's fees, universal service
contributions and taxes applicable under this Agreement.
7. CANCELLATION AND DISCONNECTION. Customer shall give thirty (30) days written
notice to Covad to disconnect a Customer Circuit. All End User Circuits served
by a Customer Circuit must be disconnected at the same time or before
disconnecting such Customer Circuit. If Customer disconnects a Customer Circuit
during the Customer Term for that Customer Circuit, Customer shall incur fees
for the balance of the Customer Term. If Customer disconnects Services for an
End User during the End User Term, Customer shall incur the lesser of the fees
for the balance of the End User Term or the Disconnect Fee set forth in the
Pricing Schedule. In any case, Customer will be obligated to pay Service Setup
fees and will not be entitled to a refund of any fees at any time. If Customer
cancels an End User Circuit prior to setup of such End User Circuit, Customer
shall incur the End User Cancellation Fee as set forth in the Price Schedule.
8. SUPPORT AND MAINTENANCE. Customer shall provide all first-level support for
all End Users. Covad shall use reasonable commercial efforts to provide
second-level support for the Customer Circuits, End User Circuits and Services.
Customer understands that Covad may, from time to time, need to interrupt
services . for maintenance and other operational reasons, and that Customer
shall not receive any compensation for such interruptions. Covad will give
Customer reasonable advance notice of all such interruptions.
9. LIMITED PERFORMANCE WARRANTY. Covad warrants to Customer, and only Customer,
that the Services shall perform in substantial accordance with the performance
criteria set forth in the SLA. This warranty shall be void if: (i) any equipment
has been subjected to physical or electrical stress, misuse, neglect, accident
or abuse, or damaged by any other external causes; (ii) the Service or any
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; (iii) the Service or any equipment has been provided by someone other
than Covad or Covad's subcontractors or affiliates; or (iv) the Service or any
equipment is used in violation of applicable law or in violation of instructions
furnished by Covad. During the term of this Agreement. Covad shall supply
Customer with the reports specified in the SLA showing performance of the
Services. Covad's sole obligation if the Services fail to meet the SLA shall be
to use reasonable commercial efforts to correct such failure, provided that
Customer promptly reports such failure and the failure can be reproduced by
Covad, and the cause of the failure is within Covad's control. Such a failure to
meet the SLA shall not be a material breach of this Agreement. If a performance
failure occurs that is within Covad's control, and Covad is unable to correct
such failure within the time periods set forth in the SLA, then. as Customer's
sole remedy, Covad will credit Customer's account with the amounts set forth in
the SLA for that type of failure, but only up to the amount paid by Customer for
such Services in the month in which such failure occurred. Covad shall have no
liability in connection with the future of the Services to meet any transmission
speed. throughput rates or other performance criteria.
8
TERMS AND CONDITIONS
10. YEAR 2000 WARRANTY. Covad warrants to its Customer, and only Customer, that
the Services, provided are used correctly and are supplied with dates in proper
format, will be capable of processing dates before and after the year 2000.
Customer acknowledges that the Services are dependent on third party equipment,
software, and systems, including, without limitation, those of local telephone
companies and other carriers. Covad makes no representations and will not be
liable with respect to Year 2000 compliance of such equipment, software, systems
and third parties. Covad's sole obligation for a failure or the Services to
comply with the foregoing warranty is to use its best efforts to correct such a
failure.
11. WARRANTY DISCLAIMER EXCEPT FOR THE WARRANTIES SET OUT IN SECTIONS 9 AND
10, THE SERVICES, CUSTOMER CIRCUITS, AND END-USER CIRCUITS, AND ALL OTHER
PRODUCTS AND SERVICES THEREUNDER ARE PROVIDED ON AN "AS IS" BASIS, AND
CUSTOMER'S AND END USER'S USE THEREOF IS AT ITS OWN RISK. COVAD DOES NOT
MAKE, AND HEREBY DISCLAIMS, ANY AND ALL OTHER EXPRESS AND IMPLIED WARRANTIES,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NONINFRINGEMENT AND TITLE, AND ANY WARRANTIES ARISING
FROM A COURSE OF DEALING, USAGE, OR TRADE PRACTICE. COVAD DOES NOT WARRANT
THAT THE SERVICES, CUSTOMER CIRCUITS, AND END-USER CIRCUITS WILL PERFORM AT
A PARTICULAR SPEED, OR WILL BE UNINTERRUPTED, ERROR-FREE, OR COMPLETELY
SECURE.
12. CUSTOMER REPRESENTATIONS AND WARRANTIES. Customer represents and warrants
that: (i) Covad has informed Customer that the Services constitute
telecommunications or telecommunications services ("Telecommunication Services")
as defined by federal law, and as a result, Covad will assume the obligations of
providing such Telecommunications Services, including, billing, collecting and
remitting to governmental authorities the applicable taxes such as the universal
service tax (collectively, "Telecommunication Obligations"). In the event,
Customer chooses to use the Services to provide Telecommunication Services,
Customer will provide Covad thirty (30) days prior written notice so that Covad
may discontinue such Telecommunication Obligations and Customer will assume such
Telecommunication Obligations thereafter); (ii) it shall not, in the ordinary
course of its business, when using 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 states that it is impractical to identify, distinguish and
measure its intrastate and interstate transmissions on Covad's network; (iii)
Customer estimates in good faith that more than ten percent (10%) of all data
packets transmitted through Services will consist of interstate transmissions;
and. (iv) it will inform all End Users that Services do not include 911 or other
emergency and ancillary services conventionally available from incumbent local
phone companies.
13. TERM AND TERMINATION. This Agreement shall remain in effect until terminated
as set forth in this Section. The initial term of this Agreement shall be one
(1) year (the "Initial Term"). After the Initial Term, either party may
terminate this Agreement with thirty (30) days written notice to the other
party. After ten (10) business days of non payment from any due date,
9
TERMS AND CONDITIONS
Covad may suspend Services. After thirty (30) days of nonpayment from any due
date, Covad may terminate the Services, and/or this Agreement. Customer shall
remain responsible for all fees accrued prior to the date of termination. In
addition, either party may terminate this Agreement if the other party
materially breaches any term or condition of this Agreement and fails to cure
such breach within thirty (30) days after receipt of written notice of the same.
14. EFFECT OF TERMINATION. Upon expiration or termination of this Agreement,
Covad will continue to maintain all existing Customer Circuits and End User
Circuits, and provide Services pursuant to the terms hereof, provided that
Customer continues to pay all applicable fees therefor and complies with any
additional terms and conditions requested by Covad. Any accrued rights to
payment. any remedies, and Sections 6,7, 9, 11, 12, 14, 15. 16, and 17 will
survive any expiration or termination of this Agreement.
15. LIMITATIONS OF LIABILITY. IN NO EVENT WILL COVAD BE LIABLE TO CUSTOMER,
ANY END-USER, OR ANY THIRD PARTY FOR ANY CLAIMS ARISING OUT OF OR RELATED TO
CUSTOMER'S BUSINESS, ITS RELATIONSHIP WITH ITS END-USERS, OR OTHERWISE. COVAD
SHALL NOT BE LIABLE FOR ANY DAMAGES ASSOCIATED WITH THE INTERRUPTION OR LOSS
OF USE OF SERVICES. EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
COVAD'S MAXIMUM AGGREGATE LIABILITY TO CUSTOMER RELATED TO CLAIM ARISING
UNDER THIS AGREEMENT, UNDER ANY CONTRACT. NEGLIGENCE, STRICT LIABILITY OR
OTHER THEORY WILL BE LIMITED TO THE TOTAL AMOUNT PAID BY CUSTOMER TO COVAD
FOR THE SERVICES GIVING RISE TO SUCH CLAIM IN THE SIX (6) MONTHS PRIOR TO THE
OCCURRENCE OF SUCH CLAIM. NEITHER PARTY WILL BE LIABLE UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY FOR ANY LOST REVENUE, LOST
PROFITS, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES WITH RESPECT
TO ANY SUBJECT MATTER OF THIS AGREEMENT.
16. INDEMNITY. Covad hereby indemnities and holds harmless Customer and its End
Users from any personal injury or tangible property damage caused by Covad or
its agents during the course of providing or maintaining the End User Circuits
or any End User premise equipment End User provided, however, that such
indemnity shall not be available if the cause of such damage is due to
Customer's or End Users willful or negligent acts or omissions.
17. FORCE MAJEURE. Neither Party hereto shall be responsible for any failure to
perform its obligations under this Agreement (other than obligations to pay
money) if such failure is caused by acts of God, war, strikes, revolutions,
earthquake, lack or failure of transportation facilities, laws or governmental
regulations or other causes that are beyond the reasonable control of such
party.
18. MISCELLANEOUS. This Agreement is not assignable or transferable by either
party without the prior written consent of the other party, except for an
assignment to an acquirer of all or substantially all of the assets or business
of such party. Covad may subcontract the performance of Services to third
parties. The parties agree that they are independent contractors and that this
10
TERMS AND CONDITIONS
Agreement and relations between Covad and Customer hereby established do not
constitute a, joint venture, agency or contract of employment between them, or
any other similar relationship. Neither party has the right or authority to
assume or create any obligation or responsibility on behalf of the other. Each
party shall keep all information designated as confidential that is received
from the other party in confidence, and shall not disclose such information to a
third party, unless and until such information becomes publicly available
through no fault of the party receiving it. Any notice, report, approval or
consent required or permitted hereunder shall be in writing, and effective on
the date of delivered (if sent by hand, first class US mail, or courier), or on
the date sent (if sent by facsimile). No failure or delay in exercising any
right hereunder will operate as a waiver thereof, nor will any partial exercise
of any right or power hereunder preclude further exercise. If any provision of
this Agreement shall be adjudged by any court of competent jurisdiction to be
unenforceable or invalid, that provision shall be limited or eliminated to the
minimum extent necessary so that this Agreement shall otherwise remain in full
force and effect and enforceable. This Agreement shall be deemed to have been
made in, and shall be construed pursuant to the laws of the State of California
and the United States without regard to conflicts of laws provisions thereof.
Any waivers or amendments shall be effective only if made in writing. This
Agreement is the complete and exclusive statement of the mutual understanding of
the parties and superseded and cancels all previous written and oral agreements
and communications relating to any of the subject matter of this Agreement.
Binding arbitration shall be the sole and exclusive remedy for resolution of
disputes between the parties. Such dispute shall be submitted for arbitration in
San Francisco. California under the rules of the American Arbitration
Association. The arbitrator's decision will be final and entered into any court
of competent jurisdiction. The prevailing party will be entitled to recover its
attorney's fees and costs in connection with such arbitration.
11
Price Schedule - TeleSpeed-Registered Trademark- Services
-------------------------------------------------------------------------------
VOLUME COMMITMENT PRICING
If Customer has committed to a specified Volume Level ("Volume Commitment
Level") as set forth on the cover page of the Agreement, then Customer will
receive the applicable pricing as of the Effective Date of the Agreement
("Volume Commitment Pricing"). For example, if Customer commits to a 2,000
Volume Level, all End User TeleSpeed Circuits will be billed at the Volume Level
Price for 1,000 -2,499 circuits, for the respective Regional Classification,
In order to maintain such Volume Commitment Pricing, Customer agrees to meet the
following Volume Milestones:
VOLUME MILESTONE SCHEDULE
-------------------------------------------------- -------------------------------------------------------------------
MILESTONES
-------------------------------------------------- ---------------- ----------------- -------------- -----------------
Timeframe (after the Effective Date) 3 months 6 months 9 months 12 months
-------------------------------------------------- ---------------- ----------------- -------------- -----------------
Percentage of Volume Commitment Achieved Based 15% 35% 65% 100%
on Invoiced End User Circuits
-------------------------------------------------- ---------------- ----------------- -------------- -----------------
In the event that the Customer fails to meet each of the above Volume
Milestones, pricing will revert to the standard Volume Level Pricing FOR ALL END
USER CIRCUITS, BOTH EXISTING AND NEW CIRCUITS. In this event, Customer would be
required to pay the End User TeleSpeed Monthly Charges corresponding to
Customers actual order volume as of the respective Volume Milestone (i.e., 3
months, 6 months, etc.).
For example, if Customer has a Volume Commitment of 5,000 circuits, within 6
months of to applicable Effective Date, Customer must have at least 1,750 End
User TeleSpeed Circuits invoiced. Assuming that at the six month Volume
Milestone, Customer has only 1,250 End User TeleSpeed Circuits invoiced, then
the Customer is obligated to pay the monthly charges associated with the
$1,000 - 2.499 Volume Level (e.g., TeleSpeed Regional Classification A:
TeleSpeed 144-$[*] Speed 384-$[*]; etc.) for the subsequent month(s)
FOR ALL END USER CIRCUITS. The Customer would pay the End User TeleSpeed
Monthly Charges associated with its actual order volume FOR ALL END USER
CIRCUITS BOTH EXISTING AND NEW CIRCUITS until Customer satisfies its
subsequent Volume Milestone. If at the nine month Volume Milestone, Customer
has met or exceeded its Volume Milestone (e.g. 3,250 End User Telespeed
Circuits invoiced), then Customer will receive Volume Commitment Pricing for
future End User Telespeed Circuits. As part of Customer's Volume Commitment,
Service Setup charges for services are billed at the level of Customer's
commitment, as long as Customer is within the milestones established above.
[*] We are seeking confidential treatment of these terms, which have been
omitted. The confidential portion has been filed separately with the
Securities and Exchange Commission.
12
Price Schedule - TeleSpeed-Registered Trademark- Services
---------------------------------------------------------
ONE-TIME SERVICE SETUP CHARGES
One-time Service Setup charges are listed in the Price Schedule for TeleSpeed
and TeleSurfer services. For example, if Customer has a volume commitment of
1,000 lines or greater, Customer will be billed for Service Setup charges of
$[*] for all circuits, starting with the first circuit, as long as Customer
meets the Milestones listed above.
DESCRIPTION OF TELESPEED SERVICES
---------------------------------------- -------------------------------------- -------------------------------------
SERVICE NAME MAXIMUM THROUGHPUT MAXIMUM THROUGHPUT
---------------------------------------- -------------------------------------- -------------------------------------
TeleSpeed 144 Up to 144 Kbps Up to 144 Kbps
---------------------------------------- -------------------------------------- -------------------------------------
TeleSpeed 192 Up to 192 Kbps Up to 192 Kbps
---------------------------------------- -------------------------------------- -------------------------------------
TeleSpeed 384 Up to 384 Kbps Up to 384 Kbps
---------------------------------------- -------------------------------------- -------------------------------------
TeleSpeed 768 Up to 768 Kbps Up to 768 Kbps
---------------------------------------- -------------------------------------- -------------------------------------
TeleSpeed 1.1 Up to 1.1 Mbps Up to 1.1 Mbps
---------------------------------------- -------------------------------------- -------------------------------------
TeleSpeed 1.5 Up to 384 Kbps Up to 384 Kbps
---------------------------------------- -------------------------------------- -------------------------------------
TELESPEED SERVICES VOLUME LEVEL PRICING
The following are the monthly charges for End User TeleSpeed Circuits based on
actual order volume ("Volume Level Pricing"). The applicable Volume Level Price
shall be determined based on the location of the End User Circuit in a Regional
Classification.
The applicable Volume Level Pricing for each month will be determined based
on the number of End User Circuits invoiced (i.e., in service), in aggregate,
at the end of the prior month. Such Volume Level Pricing will apply only to
incremental End User Circuits. To clarify, the first 999 End User TeleSpeed
Circuits will be billed at the Volume Level Price associated with the 0-999
row, and the next 1,499 End User TeleSpeed Circuits will be billed at the
Volume Level Price associated with the 1,000-2,499 row, etc.
All End User Circuits are counted in determining the applicable Volume Level
Price regardless of the Regional Classification.
END USER TELESPEED MONTHLY CHARGES
REGIONAL CLASSIFICATION A METRO AREAS:
---------------------------------------- -------------------------------------- --------------------------------------
Austin. Texas (AUS) Dallas, Texas (DAL) Houston. Texas (HOU)
---------------------------------------- -------------------------------------- --------------------------------------
Los Angeles, California (LAX) Sacramento, California (SAC) San Diego, California (SAN)
---------------------------------------- -------------------------------------- --------------------------------------
San Francisco, California (SFO)
---------------------------------------- -------------------------------------- --------------------------------------
[*] We are seeking confidential treatment of these terms, which have been
omitted. The confidential portion has been filed separately with the
Securities and Exchange Commission.
13
Price Schedule - TeleSpeed-Registered Trademark- Services
---------------------------------------------------------
TELESPEED REGIONAL CLASSIFICATION A
--------------------- --------------- ---------------- --------------- --------------- --------------- ---------------
VOLUME LEVEL TELESPEED TELESPEED TELESPEED TELESPEED TELESPEED TELESPEED
INVOICED 144 192 384 768 1.1 1.5
--------------------- --------------- ---------------- --------------- --------------- --------------- ---------------
0 - 999 $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] $[ * ]
--------------------- --------------- ---------------- --------------- --------------- --------------- ---------------
1,000 - 2,499 $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] $[ * ]
--------------------- --------------- ---------------- --------------- --------------- --------------- ---------------
2.500 - 4,999 $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] $[ * ]
--------------------- --------------- ---------------- --------------- --------------- --------------- ---------------
5,000 - 9,999 $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] $[ * ]
--------------------- --------------- ---------------- --------------- --------------- --------------- ---------------
REGIONAL CLASSIFICATION B METRO AREAS:
---------------------------------------- -------------------------------------- --------------------------------------
Atlanta. Georgia (ATL) Baltimore. Maryland (BAL) Boston, Massachusetts (BOS)
---------------------------------------- -------------------------------------- --------------------------------------
Chicago, Illinois (CHI) Detroit, Michigan (DET) Miami, Florida (MIA)
---------------------------------------- -------------------------------------- --------------------------------------
New York, New York (NYC) Philadelphia, Pennsylvania (PHL) Raleigh, North Carolina (RAL)
---------------------------------------- -------------------------------------- --------------------------------------
Washington, D.C. (WAS)
---------------------------------------- -------------------------------------- --------------------------------------
TELESPEED REGIONAL CLASSIFICATION B
------------------------- -------------- -------------- --------------- -------------- --------------- --------------
VOLUME LEVEL INVOICED TELESPEED TELESPEED TELESPEED TELESPEED TELESPEED TELESPEED
144 192 384 768 1.1 1.5
------------------------- -------------- -------------- --------------- -------------- --------------- --------------
------------------------- -------------- -------------- --------------- -------------- --------------- --------------
0 - 999 $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] $[ * ]
------------------------- -------------- -------------- --------------- -------------- --------------- --------------
1,000 - 2,499 $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] $[ * ]
------------------------- -------------- -------------- --------------- -------------- --------------- --------------
2,500 - 4,999 $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] $[ * ]
------------------------- -------------- -------------- --------------- -------------- --------------- --------------
5,000 - 9,999 $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] $[ * ]
------------------------- -------------- -------------- --------------- -------------- --------------- --------------
REGIONAL CLASSIFICATION C METRO AREAS:
---------------------------------------- ------------------------------------- --------------------------------------
Denver, Colorado (DEN) Minneapolis, Minnesota (MSP) Portland, Oregon (PDX
---------------------------------------- ------------------------------------- --------------------------------------
Phoenix, Arizona (PHX Seattle Washington (SEA)
---------------------------------------- ------------------------------------- --------------------------------------
TELESPEED REGIONAL CLASSIFICATION C
------------------------- -------------- -------------- --------------- ------------- ---------------- --------------
VOLUME LEVEL INVOICED TELESPEED TELESPEED TELESPEED TELESPEED TELESPEED TELESPEED
144 192 384 768 1.1 1.5
------------------------- -------------- -------------- --------------- ------------- ---------------- --------------
0 - 999 $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] $[ * ]
------------------------- -------------- -------------- --------------- ------------- ---------------- --------------
1,000 - 2,499 $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] $[ * ]
------------------------- -------------- -------------- --------------- ------------- ---------------- --------------
2,500 - 4,999 $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] $[ * ]
------------------------- -------------- -------------- --------------- ------------- ---------------- --------------
5,000 - 9,999 $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] $[ * ]
------------------------- -------------- -------------- --------------- ------------- ---------------- --------------
END USER TELESPEED CIRCUIT ORDER AND OTHER ONE-TIME CHARGES
---------------------------------------------------------- ---------------------------------- -----------------------
END USER PROMISE EQUIPMENT APPLICABLE TELESPEED SERVICE ONE-TIME CHARGE
---------------------------------------------------------- ---------------------------------- -----------------------
FlowPoint 144 IDSL Router TS144 $[ * ]
---------------------------------------------------------- ---------------------------------- -----------------------
FlowPoint 2200 SDSL ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇.▇ $[ * ]
---------------------------------------------------------- ---------------------------------- -----------------------
FlowPoint 2 1 00 ADSL Router TSI.5 $[ * ]
---------------------------------------------------------- ---------------------------------- -----------------------
Efficient Networks Speedstream 5250 SDSL ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇.▇ $[249.00]
---------------------------------------------------------- ---------------------------------- -----------------------
14
Price Schedule - TeleSpeed-Registered Trademark- Services
---------------------------------------------------------
--------------------------------------------------------------------------------------------- -----------------------
TELESPEED SERVICE ORDER CHARGES ONE-TIME CHARGE
--------------------------------------------------------------------------------------------- -----------------------
Service Setup including provisioning of PVC (G-999 circuits invoiced) $[ * ]
--------------------------------------------------------------------------------------------- -----------------------
Service Setup including provisioning of PVC (1000 + circuits invoiced) $[ * ]
--------------------------------------------------------------------------------------------- -----------------------
Inside wiring from RJ45 ▇▇▇▇ ▇▇▇▇ to NID (optional) $[ * ]*
--------------------------------------------------------------------------------------------- -----------------------
Field Technician Dispatch (during normal business hours) $[ * ]*
--------------------------------------------------------------------------------------------- -----------------------
* First hour minimum Charge. For each additional 15 minutes .
--------------------------------------------------------------------------------------------- -----------------------
Field Technician Dispatch (other hours: after hours, weekends, holidays) $[ * ]**
--------------------------------------------------------------------------------------------- -----------------------
** First hour/Minimum Charge. For each additional 15 minutes: $[25.] $[ * ]
--------------------------------------------------------------------------------------------- -----------------------
--------------------------------------------------------------------------------------------- ----------------------
OTHER SERVICE CHARGES ONE-TIME CHARGE
--------------------------------------------------------------------------------------------- ----------------------
Upgrade/downgrade of End User TeleSpeed Service (involves a dispatch of FT) $[ * ]
--------------------------------------------------------------------------------------------- ----------------------
Upgrade/downgrade of End User TeleSpeed Service (no dispatch of FT) $[ * ]
--------------------------------------------------------------------------------------------- ----------------------
End User TeleSpeed Circuit Disconnect Fee (per circuit) $[ * ]
--------------------------------------------------------------------------------------------- ----------------------
End User TeleSpeed Circuit Cancellation Fee (per circuit) $[ * ]
--------------------------------------------------------------------------------------------- ----------------------
Missed Appointment (i.e., End User no-show) Charge $[ * ]
--------------------------------------------------------------------------------------------- ----------------------
CUSTOMER CIRCUIT CHARGES
--------------------------------------------------------------------------------------------- -----------------------
DESCRIPTION OF CUSTOMER CIRCUIT ORDER CHARGES ONE-TIME CHARGE
--------------------------------------------------------------------------------------------- -----------------------
DS3 /ATM $[ * ]
--------------------------------------------------------------------------------------------- -----------------------
DESCRIPTION OF CUSTOMER CIRCUIT MONTHLY CHARGES MONTHLY CHARGE
--------------------------------------------------------------------------------------------- -----------------------
IDS3 / ATM $[ * ]
--------------------------------------------------------------------------------------------- -----------------------
DESCRIPTION OF TELESPEED REMOTE SERVICES
TeleSpeed Remote-TM- Service is an additional service to Covad's standard
TeleSpeed Service offerings. TeleSpeed Remote provides long-distance
connectivity for TeleSpeed End Users located in distant metropolitan areas.
TELESPEED REMOTE SERVICE - MONTHLY RECURRING SERVICE CHARGE (PER END USER)
--------------------------------- ------------- -------------- ------------- ------------- ------------- ---------------
DISTANCE BETWEEN END USER METRO TELESPEED TELESPEED TELESPEED TELESPEED TELESPEED
AREA AND CUSTOMER METRO AREA REMOTE 144 REMOTE 192 REMOTE 384 REMOTE 768 REMOTE 1.1 TELESPEED
MONTHLY MONTHLY MONTHLY MONTHLY MONTHLY REMOTE 1.5
CHARGE CHARGE CHARGE CHARGE CHARGE MONTHLY CHARGE
--------------------------------- ------------- -------------- ------------- ------------- ------------- ---------------
Less than 500miles $[ * ] $[ * ] $[ * ] $[ * ] $[ * ] [ * ]
--------------------------------- ------------- -------------- ------------- ------------- ------------- ---------------
Greater than 500 miles $[55.00] $[55.00] $[95.00] $[180.00] $[210.00] [NA]
--------------------------------- ------------- -------------- ------------- ------------- ------------- ---------------
In addition to the other charges for TeleSpeed Services, Customer shall pay the
applicable TeleSpeed Remote Monthly Charges set forth above. If TeleSpeed Remote
is ordered at the same time as the TeleSpeed End User Circuit, then no
additional one-time order charges apply.
[*] We are seeking confidential treatment of these terms, which have been
omitted. The confidential portion has been filed separately with the
Securities and Exchange Commission.
15
Additional service charges may apply if TeleSpeed Remote Service is added to or
removed from an installed End User TeleSpeed Circuit. TeleSpeed Remote Services
are not included for purposes of determining whether Customer has met its Volume
Commitment Level.
For Customer to order TeleSpeed Remote Services, such service must be available
in both the metropolitan area where the End User TeleSpeed Circuit will be
ordered and the metropolitan area where the Customer maintains a Customer
Circuit. Standard TeleSpeed Services may be available within a metropolitan area
before TeleSpeed Remote Service is available.
------------------------------------------------------- -------------------------------------------------------------
REGION METRO AREAS WITHIN 500 MILES
------------------------------------------------------- -------------------------------------------------------------
Atlanta, Georgia Raleigh, NC
------------------------------------------------------- -------------------------------------------------------------
Austin, Texas Dallas, TX; Houston, TX
------------------------------------------------------- -------------------------------------------------------------
Baltimore, Maryland/Washington, D.C.* Boston, MA; New York, NY; Philadelphia, PA; Raleigh, NC;
Detroit, MI
------------------------------------------------------- -------------------------------------------------------------
Boston, Massachusetts New York, NY; Philadelphia, PA; Baltimore, MD; Washington,
D.C.
------------------------------------------------------- -------------------------------------------------------------
Chicago, Illinois Detroit, MI; Minneapolis, MN
------------------------------------------------------- -------------------------------------------------------------
Dallas, Texas Austin, TX; Houston, TX
------------------------------------------------------- -------------------------------------------------------------
Denver, Colorado - none -
------------------------------------------------------- -------------------------------------------------------------
Detroit, Michigan Chicago, IL; Philadelphia, PA; Baltimore. MD; Washington,
D.C.
------------------------------------------------------- -------------------------------------------------------------
Houston, Texas Dallas, TX; Austin, TX
------------------------------------------------------- -------------------------------------------------------------
Los Angeles, California San Diego, CA; San Francisco, CA; Sacramento, CA;
Phoenix, AZ
------------------------------------------------------- -------------------------------------------------------------
Miami, Florida none -
------------------------------------------------------- -------------------------------------------------------------
Minneapolis, Minnesota Chicago, IL; Detroit, Ml
------------------------------------------------------- -------------------------------------------------------------
New York, New York Boston. MA; Philadelphia, PA; Baltimore, MD; Washington,
D.C.;
------------------------------------------------------- -------------------------------------------------------------
Portland, Oregon Raleigh, NC
------------------------------------------------------- -------------------------------------------------------------
Philadelphia, Pennsylvania Seattle, WA
------------------------------------------------------- -------------------------------------------------------------
Phoenix, Arizona Boston, MA; New York, NY; Baltimore, MD; Washington, D.C.;
Raleigh, NC: Detroit, Ml
------------------------------------------------------- -------------------------------------------------------------
Raleigh, North Carolina San Diego, CA; Los Angeles, CA, Atlanta, GA,
New York, NY; Philadelphia, PA; Baltimore, MD, Washington, D.C.
------------------------------------------------------- -------------------------------------------------------------
Sacramento, California San Diego, CA; San Francisco, CA; Los Angeles, CA; San
Francisco, CA; Los Angeles, CA; Phoenix, AZ
------------------------------------------------------- -------------------------------------------------------------
San Diego, California Portland, OR
------------------------------------------------------- -------------------------------------------------------------
Seattle, Washington San Diego, CA; Sacramento, CA; Los Angeles, CA
------------------------------------------------------- -------------------------------------------------------------
16
Price Schedule - TeleSpeed-Registered Trademark- Services
---------------------------------------------------------
* The Baltimore, MD and Washington, D.C. metro areas are considered the
same metropolitan region for purposes of TeleSpeed Remote.
17
Price Schedule - TeleSurfer-SM- Services
----------------------------------------
OVERVIEW
This Service Level Agreement (SLA) covers the business-grade TeleSpeed Services
applies only to Covad Regional Networks, End User TeleSpeed Circuits and
Customer Circuits provided by Covad. This SLA does not apply to any other
Services, such TeleSpeed Remote Services or consumer-grade TeleSurfer-TM-
Services, or Customer-provided Customer Circuits (except for Network
Availability SLA which does include the Customer Circuit). Covad will provide
detailed reports to our Customers, an activity that is now in progress. This SLA
covers the following performance parameters:
- Network Availability
- Network Delay
- Message Delivery
- Mean Response Time
- Mean Time to Restore Service
- End User Premise Equipment Warranty
- Inside Wire Warranty
This SLA will assist Covad and Customer in providing business-level service to
End Users. In this SLA, "End User" refers to teleworkers, small businesses, and
other End Users of Covad TeleSpeed service; "Customer" refers to channel
partners (ISPs and other value-added resellers) and corporations who directly
purchase TeleSpeed Services. "Regional Network" refers to the Covad network
within a served metropolitan area (e.g. the Boston Regional Network, the Los
Angeles Regional Network). "PVC" refers to a Permanent Virtual Circuit,
permanent configured paths on the Covad network connecting End Users to
corporations or ISPS. "Ingress" is the point where End User traffic enters the
Covad network (e.g. DSLAM); the "Egress" is the point where End User traffic
leaves the Covad network (e.g. where data leaves the Covad ATM switch and enters
the Customer Circuit). Finally, "Effected PVCs" discussed in the service credits
refer only to End Users who notify the Customer regarding performance issues
covered hereunder.
NETWORK AVAILABILITY
Covad is committed to providing a reliable network for its Customers. With that
goal, Covad's target for Network Availability is an average of 99.9% per month.
Covad's Network Operations Center maintains data to support the measurement of
availability. Covad Network Availability is defined as:
18
Price Schedule - TeleSurfer-SM- Services
----------------------------------------
1 - (TOTAL MINUTES OF PVC DOWNTIME IN GIVEN MONTH)
--------------------------------------------
( # of available minutes in same month )
Network Availability is measured from the ingress interface on Covad's Regional
Network up to, but not including, the Egress interface at the Customer network
(see Figure 1).
FIGURE 1: SLA BOUNDARIES FOR COVAD NETWORK AVAILABILITY
------------------------------------------------
Diagram of Covad Regional Network
------------------------------------------------
The availability target does not account for scheduled outages on Covad's
Regional Network or events outside of Covad's control, including, but not
limited to, force majeure events, scheduled or unscheduled outages on the
Customer Network, or End User or Customer equipment outages. Network downtime is
calculated commencing with the date and time on which the Customer or Covad
opens the trouble ticket (whichever was first) and ending upon confirmation from
Covad that the network is restored.
If Covad does not meet 99.9% Network Availability per the above definition,
Covad will credit the Customer for each affected End User according to the
following table:
--------------------------------- ------------------------------------------------------
IF AVAILABILITY IS IN THE SERVICE CREDIT PER AFFECTED END USER PER
RANGE: MONTH IS:
--------------------------------- ------------------------------------------------------
99.5% - 99.89% 5% of monthly End User Tele pee service charger
Average per month
--------------------------------- ------------------------------------------------------
LESS THAN 99.5 10% of monthly End User TeleSpeed service charges
Average per month
--------------------------------- ------------------------------------------------------
Reports and service credits will be available by December 31, 1999.
NETWORK DELAY
Covad is committed to providing a fast network for its Customers. Covad supports
targets for the time to transmit a 64-byte message from the ingress interface on
Covad's Regional Network up to the egress interface on Covad's Regional Network
(see Figure 2).
19
Price Schedule - TeleSurfer-SM- Services
----------------------------------------
FIGURE 2: BOUNDARIES FOR DELAY TARGETS
------------------------------------------------
Diagram of Covad Regional Network
------------------------------------------------
Covad defines round trip message delay as the sum of the following:
- time from when the last bit of the message originating from the End
User arrives at Covad's Regional Network unfit when the last bit of the
message leaves Covad's Regional Network
- time from when the last bit of the return message arrives at Covad's
Network until when the last bit of the message leaves Covad's Regional
Network
Covad's delay targets for its offered TeleSpeed services for 64-byte messages,
when the network is available as defined in the Network Availability SLA are as
follows
--------------------------------------------- ----------------------------------------------
END USER TELESPEED SERVICE AVERAGE MESSAGE DELAY TARGET
--------------------------------------------- ----------------------------------------------
TeleSpeed 192, 384, 768. 1.1, 1.5 10ms
--------------------------------------------- ----------------------------------------------
TeleSpeed 144 15ms
--------------------------------------------- ----------------------------------------------
When reporting is available, the delay target will be measured and averaged on
the hour. By December 31, 1999, Covad will make reports and service credits
available around its network delay targets.
DELIVERY
Covad is committed to minimizing network congestion for its Customers. Covad's
target for delivery of cells/frames over Covad's Regional Network is 99.9% over
a 1-hour period when the network is available.
Covad defines delivery as the percentage of cells or frames entering Covad's
Regional Network that are successfully carried through the network and not
dropped before exiting the network (see Figure 3).
FIGURE 3: SLA BOUNDARIES FOR DELIVERY
------------------------------------------------
Diagram of Covad Network
------------------------------------------------
20
Price Schedule - TeleSurfer-SM- Services
----------------------------------------
By December 31. 1999, Covad will make reports and service credits available
around its network delivery targets.
MEAN RESPONSE TIME
Covad is committed to providing the best Customer care experience in the
telecommunications industry. To that end, Covad promises to respond to Customer
requests for repair and other technical problems within a mean time of 15
minutes (averaged per month on all response times for all submitted web-based
Trouble Tickets) during normal TAC (Technical Assistance Center) business hours.
MEAN TIME TO RESTORE SERVICE
Covad is committed to restoring service within certain periods of time based on
the seventy of the problem, and whether single or multiple End Users are
affected. Covad manages to and the following targets for restoration of
services:
END USER TELESPEED CIRCUIT:
- End User TeleSpeed circuit defined as the copper loop from (but not
including) the End User premise equipment to the copper loop entry
point into the Covad Regional Network
- MEAN time to repair for all submitted Trouble Tickets shall target 24
hours averaged on a per month basis
CUSTOMER TELESPEED CIRCUIT:
- Customer TeleSpeed circuit is defined as the Covad-provided DS1/Frame
Relay or DS3/ATM Customer WAN circuit from the egress of the Covad
Network up to Covad's point of demarcation at the Customer premise, up
to but not including the Customer-owned router or other equipment
- MEAN time to repair of the Customer TeleSpeed circuit is targeted at 4
hours
- Outage of Customer TeleSpeed circuit shall be compensated by credits in
Network Availability Service Level Agreement
Covad will manage the local loop vendor (or Incumbent Local Exchange Carrier) on
behalf of the Customer for any repairs or problems related to Covad-provided
Customer TeleSpeed WAN Circuits or End User TeleSpeed Circuits.
21
Price Schedule - TeleSurfer-SM- Services
----------------------------------------
END USER PREMISE EQUIPMENT WARRANTY
If the Customer purchases End User premise equipment directly from Covad, Covad
will assign, to the extent permitted, the manufacturer's warranty of at least
one (1) year. In the event that the equipment is determined to be faulty within
the applicable warranty period, Covad will mail the pre-configured replacement
equipment to the Customer to arrive within 3 business days of Covad's
determination that the End User premise equipment requires replacement.
Customers who request that a Covad Field Service Technician (FST) provide
replacement equipment will be charged applicable Service Order Charges as set
forth in the applicable Price Schedule. Covad will also provide any equipment
software upgrades for the duration of the applicable warranty at no charge to
the Customer.
After one year, repair and replacement of Covad-supplied End User premise
equipment becomes the responsibility of the Customer.
Customer is responsible for all equipment configuration or Covad-supplied
equipment after initial setup.
INSIDE WIRE WARRANTY
All Covad-provided End User premise wiring is warranted to be free from defects
for a period of 30 days.
CREDIT AVAILABILITY
Service credits hereunder must be claimed within 7 calendar days of the date of
the reported incident. In the event that two or more credits are simultaneously
claimed, a credit will be applied toward the single claim resulting in the
largest credit. Covad will apply any service credits to the Customer's next
monthly invoice.
22
Market Development Funds - TeleSpeed-Registered Trademark- Services
-------------------------------------------------------------------
DESCRIPTION OF TELESURFER SERVICES
------------------------------------------- ---------------------------------------- -----------------------------------------
Service Name Maximum Throughput Downstream Maximum Throughput Upstream
------------------------------------------- ---------------------------------------- -----------------------------------------
TeleSurfer Up to 384 Kbps Up to 128 Kbps
------------------------------------------- ---------------------------------------- -----------------------------------------
TeleSurfer Pro Up to 768 Kbps Up to 384 Kbps
------------------------------------------- ---------------------------------------- -----------------------------------------
For TeleSurfer and TeleSurfer Pro, Covad guarantees no less than 64 Kbps of
bandwidth, downstream and upstream, in congested network traffic situations.
Customer is also responsible for dynamic configuration of IP addresses for End
Users using consumer-grade TeleSurfer and TeleSurfer Pro Services.
TELESURFER SERVICE VOLUME COMMITMENT PRICING
The following are the monthly charges for End User TeleSurfer Circuits.
The applicable monthly charges for TeleSurfer Services shall be as set forth on
the table below based upon Customer's applicable Volume Commitment Level.
Customer must be current on all invoices to be eligible for such pricing. If
Customer fails to meet its Volume Milestones for such Volume Commitment Level,
the monthly charges shall be adjusted based upon the number of End User Circuits
(TeleSpeed and TeleSurfer) invoiced for the prior month. Customer must be
current on all invoices to be eligible for such pricing.
END USER TELESURFER MONTHLY CHARGES
TELESURFER MONTHLY CHARGES
--------------------------- ------------------------- ----------------------
Volume Level Invoiced TeleSurfer TeleSurfer Pro
--------------------------- ------------------------- ---------------------
0 - 999 $[ * ] $[ * ]
--------------------------- ------------------------- ---------------------
1,000 - 2,499 $[ * ] $[ * ]
--------------------------- ------------------------- ---------------------
2,500 - 4,999 $[ * ] $[ * ]
--------------------------- ------------------------- ---------------------
5,000 $[ * ] $[ * ]
--------------------------- ------------------------- ---------------------
END USER TELESURFER CIRCUIT ORDER CHARGES
------------------------------------------------------ --------------------------------------- -------------------------
END USER PROMISE EQUIPMENT APPLICABLE TELESURFER SERVICE ONE-TIME CHARGE
------------------------------------------------------ --------------------------------------- -------------------------
Efficient Networks Speedstream 5250 SDSL Modem TeleSurfer, TeleSurfer Pro $[ * ]
------------------------------------------------------ --------------------------------------- -------------------------
[*] We are seeking confidential treatment of these terms, which have been
omitted. The confidential portion has been filed separately with the
Securities and Exchange Commission.
23
Market Development Funds - TeleSpeed-Registered Trademark- Services
-------------------------------------------------------------------
---------------------------------------------------------------------------------------------- -------------------------
TELESURFER SERVICE ORDER CHARGES ONE-TIME CHARGE
---------------------------------------------------------------------------------------------- -------------------------
Service Setup including provisioning of PVC (0-999 circuits invoiced) $[ * ]
---------------------------------------------------------------------------------------------- -------------------------
Service Setup including provisioning of PVC (1 000 + circuits invoiced) $[ * ]
---------------------------------------------------------------------------------------------- -------------------------
Inside wiring from RJ45 ▇▇▇▇ ▇▇▇▇ to NID (optional) $[ * ]*
---------------------------------------------------------------------------------------------- -------------------------
Field Technician Dispatch (during normal business hours) $[ * ]*
---------------------------------------------------------------------------------------------- -------------------------
*. FIRST HOUR/MINIMUM CHARGE. FOR EACH ADDITIONAL 15 MINUTES: $[20]
---------------------------------------------------------------------------------------------- -------------------------
Field Technician Dispatch (other hours: after hours, weekends, holidays) $[ * ]**
---------------------------------------------------------------------------------------------- -------------------------
** First hour/Minimum Charge. For each additional 15 minutes: $[25]
---------------------------------------------------------------------------------------------- -------------------------
---------------------------------------------------------------------------------------------- -------------------------
OTHER SERVICE CHARGES ONE-TIME CHARGE
---------------------------------------------------------------------------------------------- -------------------------
Upgrade/downgrade of End User TeleSurfer Service (involves a dispatch of FT) $[ * ]
---------------------------------------------------------------------------------------------- -------------------------
Upgrade/downgrade of End User TeleSurfer Service (no dispatch of FT) $[ * ]
---------------------------------------------------------------------------------------------- -------------------------
End User TeleSurfer Circuit Disconnect ee (pr circuit) $[ * ]
---------------------------------------------------------------------------------------------- -------------------------
End User TeleSurfer Circuit Cancellation Fee (per circuit) $[ * ]
---------------------------------------------------------------------------------------------- -------------------------
Missed Appointment (i.e., End User no-show) Charge $[ * ]
---------------------------------------------------------------------------------------------- -------------------------
As a condition of Covad making TeleSurfer Services available to Customer,
Customer is required to commit to construct an Electronic Customer Interface
(ECI) between Customer and Covad in order to process orders for all End User
Circuits (TeleSpeed and TeleSurfer). Customer agrees to create a plan for an
Electronic Customer Interface. Covad will contact Customer to offer guidance,
planning, and ECI implementation milestones. Customer agrees to use commercially
reasonable efforts to ensure that TeleSurfer lines are installed at residential
addresses only.
COVAD RESERVES THE RIGHT TO ▇▇▇▇ CUSTOMER FOR SERVICES AT APPLICABLE TELESPEED
SERVICES PRICES FOR ANY TELESURFER CIRCUITS INSTALLED AT LOCATIONS DEEMED TO BE
NON-RESIDENTIAL.
Market Development Funds will not accrue for TeleSurfer Circuits invoiced.
Market Development Funds are not available for marketing activities that only
promote TeleSurfer Services.
Customer agrees to use commercially reasonable efforts to fully disclose to End
Users the features and limitations of TeleSurfer Services prior to ordering
TeleSurfer Services for such End User.
[*] We are seeking confidential treatment of these terms, which have been
omitted. The confidential portion has been filed separately with the
Securities and Exchange Commission.
24
Market Development Funds - TeleSpeed-Registered Trademark- Services
-------------------------------------------------------------------
As a part of Covad's Channel Marketing Program, Customer is eligible for Market
Development Funds ("MDF"). Disbursement of all MDF is contingent upon a jointly
agreed upon, integrated marketing plan and Customer's ability to match MDF
"dollar for dollar." The timing, form, message, media, substance, and geographic
focus of the marketing spending will be jointly determined by Customer and
Covad. Customer agrees to abide by Covad's standard MDF Program Guidelines
including use of the Covad brand and MDF disbursement criteria.
INITIAL MARKET DEVELOPMENT FUNDS
During the first six (6) months of the Agreement, Covad will contribute Initial
MDF to Customers' Covad-managed MDF account based on the following schedule, in
accordance with Customer's Volume Commitment for TeleSpeed Services:
------------------------------- ---------------------------- ---------------------------- ----------------------------
ANNUAL VOLUME COMMITMENT 6-MONTH RAMP BASED ON INITIAL MDF PER TELESPEED RANGE OF MOF ALLOCATION
(INVOICED END USER CIRCUITS) VOLUME COMMITMENT (35% OF END USER CIRCUIT
VOLUME COMMITMENT)
------------------------------- ---------------------------- ---------------------------- ----------------------------
1,000 350 $[ * ] $[ * ]
------------------------------- ---------------------------- ---------------------------- ----------------------------
2,500 875 $[ * ] $[ * ]
------------------------------- ---------------------------- ---------------------------- ----------------------------
5.000 1,750 $[ * ] $[ * ]
------------------------------- ---------------------------- ---------------------------- ----------------------------
Initial MDF must be spent within 6 months following the Effective Date of the
Agreement. Customer can choose to spend up to 70% of Initial MDF at any time
during the first 3 months and the remaining 30% at any time during the second 3
months after the Effective Date of the Agreement. Customer forfeits any unspent
MDF at the end of the 6-month period.
For example, if Customer commits to a 1,000 Circuit Volume Commitment, Covad
will place $[ * ] into a Covad-managed MDF account for Customer. This amount
is derived by multiplying the initial MDF per circuit $[ * ] by the 6-month ramp
(1,000 x 35% = 350). Of the $[ * ], $[ * ] (or 70%) must be spent any time
within the first three months, and the remaining $[ * ] (30%) must be spent
any time within the following 3 months.
Initial MDF is in lieu of Accrual MDF (defined below) during the first six (6)
months of the Agreement. Accrual MDF will begin to accrue in month seven (7)
based on the six-months (6) invoice to Customer.
ACCRUAL MARKET DEVELOPMENT FUNDS
Accrual MDF is available to Customer beginning in month seven (7) after the
Effective Date to develop or continue demand generation programs associated with
the purchase of TeleSpeed Services. The MDF Accrual Percentage is determined by
Customer's Volume Commitment as per the table below. THE MDF ACCRUAL PERCENTAGE
IS APPLIED TO CUSTOMER'S TOTAL END USER TELESPEED CIRCUITS (TELESPEED 144,
TELESPEED 384, TELESPEED 768, TELESPEED 1.1, AND TELESPEED 1.5) INVOICED EACH
MONTH, THROUGH TERMINATION OF THE AGREEMENT. MDF will not
[*] We are seeking confidential treatment of these terms, which have been
omitted. The confidential portion has been filed separately with the
Securities and Exchange Commission.
25
Market Development Funds - TeleSpeed-Registered Trademark- Services
-------------------------------------------------------------------
accrue for TeleSurfer-SM- Circuits invoiced. Customer must be current on all
invoices to be eligible for MDF. MDF are not available for marketing activities
that only promote TeleSurfer Services. Accrual MDF are placed into a
Covad-managed Customer account every month after each invoice has been paid.
Disbursement of Accrual MDF follows standard MDF Guidelines including
development of joint-marketing plans and Covad logo usage. Accrual MDF will only
accumulate for six (6) months. Any Accrual MDF that remains unused for longer
than six (6) months WHI be forfeited and returned to Covad.
------------------------------------------------------ ---------------------------------------------------------------
NUMBER OF INVOICED END USER TELESPEED MONTHLY-MDF ACCRUAL PERCENTAGE
CIRCUITS AS OF THE END OF THE MONTH
------------------------------------------------------ ---------------------------------------------------------------
1,000 - 2,499 [ * ]%
------------------------------------------------------ ---------------------------------------------------------------
2,500 - 4.999 [ * ]%
------------------------------------------------------ ---------------------------------------------------------------
5,000 - 9,999 [ * ]%
------------------------------------------------------ ---------------------------------------------------------------
EXAMPLE: MONTHLY INVOICE AFTER VOLUME DISCOUNT (ASSUME 5,000 VOLUME COMMITMENT
LEVEL IN REGION A)
Accrual MDF will accrue at a rate associated with the Customer's Volume
Commitment Level. An example of one month's accrual calculation is listed below.
MDF CALCULATION
Number of End User TeleSpeed Circuits: 5,100
Total End User TeleSpeed Circuit invoice: $[ * ]
MDF %: [ * ]
MDF accrued for the month: $[ * ] x [ * ] = $[ * ]
Covad places this $[ * ] Customer's MDF account upon receipt of payment of
all outstanding invoices.
FAILURE TO MEET COMMITMENT
If Customer does not meet or exceed its Volume Commitment Level in month three
(3), as detailed in the Volume Milestone Schedule, Customer will receive only
Accrual MDF. Accrual MDF will be calculated as detailed above. if Customer does
not meet or exceed its line commitment in month three (3), but does meet or
exceed its volume commitment in month six (6), Covad will credit MDF for months
4-6 to Customer's MDF account up to the Initial MDF for those months. In no case
will Covad credit both Accrual MDF and Initial MDF for the same month.
If Customer does not meet or exceed any of its Volume Commitments as detailed in
the Volume Milestone Schedule for months 3, 6, or 9, then Customer will receive
Accrual MDF at the Accrual Percentage associated with Customer's actual Volume
Level (as opposed to Volume Commitment Level).
[*] We are seeking confidential treatment of these terms, which have been
omitted. The confidential portion has been filed separately with the
Securities and Exchange Commission.
26
