<PAGE>

                                                                     EXHIBIT 4.2

BANC OF AMERICA SECURITIES LLC

                     $125,000,000 AGGREGATE PRINCIPAL AMOUNT

                        COVAD COMMUNICATIONS GROUP, INC.

                        3% CONVERTIBLE SENIOR DEBENTURES

                                    DUE 2024

                      RESALE REGISTRATION RIGHTS AGREEMENT

                              DATED MARCH 10, 2004

<PAGE>

                                                                               1

         RESALE REGISTRATION RIGHTS AGREEMENT, dated as of March 10, 2004,
between Covad Communications Group, Inc., a Delaware corporation (together with
any successor entity, herein referred to as the "COMPANY"), and Banc of America
Securities LLC, as representative of the several initial purchasers (the
"INITIAL PURCHASERS") under the Purchase Agreement (as defined below).

         Pursuant to the Purchase Agreement, dated as of March 4, 2004, between
the Company and Banc of America Securities LLC, as representative of the Initial
Purchasers (the "PURCHASE AGREEMENT"), the Initial Purchasers have agreed to
purchase from the Company $100,000,000 ($125,000,000 if the Initial Purchasers
exercise their option in full) in aggregate principal amount at maturity of 3%
Convertible Senior Debentures due 2024 (the "DEBENTURES"). The Debentures will
be convertible into fully paid, nonassessable shares of common stock, par value
$0.001 per share, of the Company together with the rights (the "RIGHTS")
evidenced by such common stock to the extent provided in the Stockholder
Protection Rights Agreement dated as of February 13, 2000 between the Company
and BankBoston, N.A., as Rights Agent (collectively, the "COMMON STOCK"). The
Debentures will be convertible on the terms, and subject to the conditions, set
forth in the Indenture (as defined herein). To induce the Initial Purchasers to
purchase the Debentures, the Company has agreed to provide the registration
rights set forth in this Agreement pursuant to Section 1 of the Purchase
Agreement.

         The parties hereby agree as follows:

         1.       Definitions. Capitalized terms used in this Agreement without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following capitalized terms shall have
the following meanings:

         "AFFILIATE" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "AGREEMENT": This Resale Registration Rights Agreement.

         "AMENDMENT EFFECTIVENESS DEADLINE DATE": As defined in Section 2(e)
hereof.

         "BLUE SKY APPLICATION": As defined in Section 6(a)(i) hereof.

         "BUSINESS DAY": As defined in the Indenture.

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                                                                               2

         "COMMISSION": Securities and Exchange Commission.

         "COMMON STOCK": As defined in the preamble hereto.

         "COMPANY": As defined in the preamble hereto.

         "DEBENTURES": As defined in the preamble hereto.

         "EFFECTIVENESS PERIOD": As defined in Section 2(a)(iii) hereof.

         "EFFECTIVENESS TARGET DATE": As defined in Section 2(a)(ii) hereof.

         "EXCHANGE ACT": Securities Exchange Act of 1934, as amended.

         "HOLDER": A Person who owns, beneficially or otherwise, Transfer
Restricted Securities.

         "INDEMNIFIED HOLDER": As defined in Section 6(a) hereof.

         "INDENTURE": The Indenture, dated as of March 10, 2004 between the
Company and The Bank of New York, as trustee (the "TRUSTEE"), pursuant to which
the Securities are to be issued, as such Indenture is amended, modified or
supplemented from time to time in accordance with the terms thereof.

         "INITIAL PURCHASERS": As defined in the preamble hereto.

         "LIQUIDATED DAMAGES": As defined in Section 3(b) hereof.

         "LIQUIDATED DAMAGES PAYMENT DATE": Each March 15 and September 15.

         "MAJORITY OF HOLDERS": Holders holding over 50% of the aggregate
principal amount of Debentures outstanding; provided that, for the purpose of
this definition, a holder of shares of Common Stock which constitute Transfer
Restricted Securities shall be deemed to hold an aggregate principal amount at
maturity of Debentures (in addition to the principal amount at maturity of
Debentures held by such holder) equal to the product of (A) the quotient of (x)
the number of such shares of Common Stock held by such holder and (y) the
conversion rate (as expressed in the number of shares issuable per $1,000
principal amount of Debentures) in effect at the time of the conversion of
Debentures into such shares of Common Stock as determined in accordance with the
Indenture and (B) $1,000.

         "NASD": National Association of Securities Dealers, Inc.

         "NOTICE AND QUESTIONNAIRE": A written notice executed by the respective
Holder and delivered to the Company containing substantially the information
called for by the Selling Securityholder Notice and Questionnaire attached as

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                                                                               3

Annex A to the Offering Memorandum of the Company issued March 4, 2004 relating
to the Debentures.

         "NOTICE HOLDER": On any date, any Holder that has delivered a Notice
and Questionnaire to the Company on or prior to such date.

         "PERSON": An individual, partnership, corporation, company,
unincorporated organization, trust, joint venture or a government or agency or
political subdivision thereof.

         "PURCHASE AGREEMENT": As defined in the preamble hereto.

         "PROSPECTUS": The prospectus included in a Shelf Registration
Statement, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such prospectus.

         "RECORD HOLDER": With respect to any Liquidated Damages Payment Date,
each Person who is a Holder on the 15th day preceding the relevant Liquidated
Damages Payment Date, including a Holder that owns shares of Common Stock that
are Transfer Restricted Securities on the 15th day preceding the relevant
Liquidated Damages Payment Date.

         "REGISTRATION DEFAULT": As defined in Section 3(a) hereof.

         "SECURITIES ACT": Securities Act of 1933, as amended.

         "SHELF FILING DEADLINE": As defined in Section 2(a)(i) hereof.

         "SHELF REGISTRATION STATEMENT": As defined in Section 2(a)(i) hereof.

         "SUBSEQUENT SHELF REGISTRATION STATEMENT": As defined in Section 2(c)
hereof.

         "SUSPENSION NOTICE": As defined in Section 4(c) hereof.

         "SUSPENSION PERIOD": As defined in Section 4(b)(i) hereof.

         "TIA": Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission thereunder, in each case, as in effect on the date
the Indenture is qualified under the TIA.

         "TRANSFER RESTRICTED SECURITIES": Each Debenture and each share of
Common Stock issued upon conversion of Debentures until the earlier of:

                           (i)      the date on which such Debenture or such
                  share of Common Stock issued upon conversion has been
                  effectively

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                                                                               4

                  registered under the Securities Act and disposed of in
                  accordance with the Shelf Registration Statement;

                           (ii)     the date on which such Debenture or such
                  share of Common Stock issued upon conversion is transferred in
                  compliance with Rule 144 under the Securities Act or may be
                  sold or transferred by a person who is not an affiliate of the
                  Company pursuant to Rule 144(k) under the Securities Act (or
                  any other similar provision then in effect); or

                           (iii)    the date on which such Debenture or such
                  share of Common Stock issued upon conversion ceases to be
                  outstanding (whether as a result of redemption, repurchase and
                  cancellation, conversion or otherwise).

         "UNDERWRITTEN REGISTRATION": A registration in which Debentures of the
Company are sold to an underwriter for reoffering to the public.

         Unless the context otherwise requires, the singular includes the
plural, and words in the plural include the singular.

         2.       Shelf Registration.

                  (a)      The Company shall:

                           (i)      not later than 90 days after the date hereof
                  (the "SHELF FILING DEADLINE"), cause to be filed a
                  registration statement pursuant to Rule 415 under the
                  Securities Act (the "SHELF REGISTRATION STATEMENT"), which
                  Shelf Registration Statement shall provide for resales of all
                  Transfer Restricted Securities held by Holders that have
                  provided the information required pursuant to the terms of
                  Section 2(e) hereof;

                           (ii)     use its reasonable best efforts to cause the
                  Shelf Registration Statement to be declared effective by the
                  Commission not later than 210 days after the date hereof (the
                  "EFFECTIVENESS TARGET DATE"); and

                           (iii)    use its reasonable best efforts to keep the
                  Shelf Registration Statement continuously effective,
                  supplemented and amended as required by the provisions of
                  Section 4(b) hereof to the extent necessary to ensure that (A)
                  it is available for resales by the Holders entitled to the
                  benefit of this Agreement and (B) conforms with the
                  requirements of this Agreement and the Securities Act and the
                  rules and regulations of the Commission promulgated thereunder
                  as announced from time to time, for a period (the
                  "EFFECTIVENESS PERIOD") until the earliest of:

<PAGE>

                                                                               5

                                    (1)      the date when the Holders are able
                           to sell all such Transfer Restricted Securities
                           immediately without restriction pursuant to the
                           volume limitation provisions of Rule 144 under the
                           Securities Act; or

                                    (2)      the date when all of the Transfer
                           Restricted Securities are disposed of pursuant to the
                           Shelf Registration Statement or Rule 144 under the
                           Securities Act or any similar provision then in
                           effect.

                  (b)      With the exception of America Online, Inc., AT&T
         Corp. and SBC Communications, Inc., none of the Company's security
         holders other than the Holders shall have the right to include any of
         the Company's securities in the Shelf Registration Statement.

                  (c)      If the Shelf Registration Statement or any Subsequent
         Shelf Registration Statement ceases to be effective for any reason at
         any time during the Effectiveness Period (other than because all
         Transfer Restricted Securities registered thereunder shall have been
         resold pursuant thereto or shall have otherwise ceased to be Transfer
         Restricted Securities), the Company shall use its best efforts to
         obtain the prompt withdrawal of any order suspending the effectiveness
         thereof, and in any event shall within thirty (30) days of such
         cessation of effectiveness amend the Shelf Registration Statement in a
         manner reasonably expected to obtain the withdrawal of the order
         suspending the effectiveness thereof, or file an additional Shelf
         Registration Statement covering all of the securities that as of the
         date of such filing are Transfer Restricted Securities (a "SUBSEQUENT
         SHELF REGISTRATION STATEMENT"). If a Subsequent Shelf Registration
         Statement is filed, the Company shall use its reasonable best efforts
         to cause the Subsequent Shelf Registration Statement to become
         effective as promptly as is practicable after such filing and to keep
         such Registration Statement (or subsequent Shelf Registration
         Statement) continuously effective until the end of the Effectiveness
         Period.

                  (d)      The Company shall supplement and amend the Shelf
         Registration Statement if required by the rules, regulations or
         instructions applicable to the registration form used by the Company
         for such Shelf Registration Statement, if required by the Securities
         Act or as reasonably requested by the Initial Purchasers or by the
         Trustee on behalf of the Holders covered by such Shelf Registration
         Statement.

                  (e)      Each Holder agrees that if such Holder wishes to sell
         Transfer Restricted Securities pursuant to a Shelf Registration
         Statement and related Prospectus, it will do so only in accordance with
         this Section 2(e) and Section 4(b). Each Holder wishing to sell
         Transfer Restricted Securities pursuant to a Shelf Registration
         Statement and related Prospectus must deliver a Notice and
         Questionnaire to the Company. In

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                                                                               6

         order to be named as a selling securityholder in the Prospectus at the
         time of effectiveness of the Shelf Registration Statement, the Notice
         and Questionnaire must be delivered at least five (5) Business Days
         prior to the effectiveness of the Shelf Registration Statement. From
         and after the date the Shelf Registration Statement is declared
         effective, the Company shall, as promptly as practicable after the date
         a Notice and Questionnaire is delivered, and in any event upon the
         later of (x) fifteen (15) Business Days after such date or (y) fifteen
         (15) Business Days after the expiration of any Suspension Period in
         effect when the Notice and Questionnaire is delivered or put into
         effect within fifteen (15) Business Days of such delivery date:

                           (i)      if required by applicable law, file with the
                  SEC a post-effective amendment to the Shelf Registration
                  Statement or prepare and, if required by applicable law, file
                  a supplement to the related Prospectus or a supplement or
                  amendment to any document incorporated therein by reference or
                  file any other required document so that the Holder delivering
                  such Notice and Questionnaire is named as a selling
                  securityholder in the Shelf Registration Statement and the
                  related Prospectus in such a manner as to permit such Holder
                  to deliver such Prospectus to purchasers of the Transfer
                  Restricted Securities in accordance with applicable law and,
                  if the Company shall file a post-effective amendment to the
                  Shelf Registration Statement, use its reasonable best efforts
                  to cause such post-effective amendment to be declared
                  effective under the Securities Act as promptly as is
                  practicable, but in any event by the date (the "AMENDMENT
                  EFFECTIVENESS DEADLINE DATE") that is forty-five (45) days
                  after the date such post effective amendment is required by
                  this clause to be filed;

                           (ii)     provide such Holder copies of any documents
                  filed pursuant to Section 2(e)(i); and

                           (iii)    notify such Holder as promptly as
                  practicable after the effectiveness under the Securities Act
                  of any post-effective amendment filed pursuant to Section
                  2(e)(i);

provided that if such Notice and Questionnaire are delivered during a Suspension
Period, the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above upon expiration of the Suspension Period in accordance with Section
4(b). Notwithstanding anything contained herein to the contrary, (i) the Company
shall be under no obligation to name any Holder that is not a Notice Holder as a
selling securityholder in any Registration Statement or related Prospectus and
(ii) the Amendment Effectiveness Deadline Date shall be extended by up to five
(5) Business Days after the expiration of a Suspension Period (and the Company
shall incur no obligation to pay Liquidated Damages during such extension) if
such

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                                                                               7

Suspension Period shall be in effect on the Amendment Effectiveness Deadline
Date.

         3.       Liquidated Damages.

                  (a)      Each event referred to in the following clauses (i)
         through (vi), is a "REGISTRATION DEFAULT":

                           (i)      the Shelf Registration Statement is not
                  filed with the Commission prior to or on the Shelf Filing
                  Deadline;

                           (ii)     the Shelf Registration Statement has not
                  been declared effective by the Commission prior to or on the
                  Effectiveness Target Date;

                           (iii)    except as provided in Section 4(b)(i)
                  hereof, the Shelf Registration Statement is filed and declared
                  effective but, during the Effectiveness Period, shall
                  thereafter cease to be effective or fail to be usable for its
                  intended purpose without being succeeded within five (5)
                  Business Days by a post-effective amendment to the Shelf
                  Registration Statement, a supplement to the Prospectus or a
                  report filed with the Commission pursuant to Section 13(a),
                  13(c), 14 or 15(d) of the Exchange Act that cures such failure
                  and, in the case of a post-effective amendment, is itself
                  immediately declared effective; or

                           (iv)     (A) prior to or on the 45th or 60th day, as
                  the case may be, of any Suspension Period, such suspension has
                  not been terminated or (B) Suspension Periods exceed an
                  aggregate of 90 days in any 360 day period.

         For purposes of this Agreement, each Registration Default set forth
above shall begin and be cured on the dates set forth in the table below:

<TABLE>
<CAPTION>
      Type of
Registration Default                      Beginning                                Cure
      by Clause                             Date                                   Date
--------------------          -------------------------------         -------------------------------
<S>                           <C>                                     <C>
        (i)                   Shelf Filing Deadline                   the date the Shelf Registration
                                                                      Statement is filed

       (ii)                   Effectiveness Target Date               the date the Shelf Registration
                                                                      Statement is declared effective
                                                                      by the Commission
</TABLE>

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                                                                               8

<TABLE>
<CAPTION>
      Type of
Registration Default                      Beginning                                Cure
      by Clause                             Date                                   Date
--------------------          -------------------------------         -------------------------------
<S>                           <C>                                     <C>
       (iii)                  the date five Business Days             the date any post-effective
                              following the date that the             amendment is declared effective
                              Shelf Registration Statement            by the Commission or any
                              ceases to be effective or fails         supplement to the Prospectus or
                              to be usable                            report is filed that makes the
                                                                      Shelf Registration Statement
                                                                      usable

        (iv)                  the date on which a Suspension          termination of the applicable
                              Period, or the aggregate                Suspension Period
                              duration of Suspension Periods
                              in any period, exceeds the
                              permitted number of days
</TABLE>

        (b)

                                    (A)      in respect of the Debentures, to
                           each holder of Debentures, if a Registration Default
                           occurs, other than a Registration Default relating to
                           a failure to file or have an effective Shelf
                           Registration Statement with respect to shares of
                           Common Stock issuable upon conversion of the
                           Debentures that are Transfer Restricted Securities,
                           the Company hereby agrees to pay interest
                           ("LIQUIDATED DAMAGES") with respect to the Debentures
                           that are Transfer Restricted Securities from and
                           including the day following the beginning of the
                           Registration Default to but excluding the earlier of
                           (1) the day on which the Registration Default has
                           been cured and (2) the date the Shelf Registration
                           Statement is no longer required to be kept effective,
                           accruing at a rate (x) with respect to the first
                           90-day period during which a Registration Default
                           shall have occurred and be continuing, equal to 0.25%
                           per annum of the aggregate principal amount of the
                           Debentures, and (y) with respect to the period
                           commencing on the 91st day following the day the
                           Registration Default shall have occurred and be
                           continuing, equal to 0.50% per annum of the aggregate
                           principal amount of the Debentures; provided that in
                           no event shall Liquidated Damages accrue at a rate

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                                                                               9

                           per year exceeding 0.50% of the aggregate principal
                           amount of the Debentures; and

                                    (B)      in respect of any shares of Common
                           Stock, to each holder of shares of Common Stock
                           issued upon conversion of the Debentures, no
                           Liquidated Damages on such Common Stock will be
                           payable, but the holder of shares of Common Stock
                           shall be entitled to receive additional Common Stock
                           upon conversion (except to the extent that the
                           Company elects to deliver cash upon conversion).

                  (c)      All accrued Liquidated Damages shall be paid in
         arrears to Record Holders by the Company on each Liquidated Damages
         Payment Date. Upon the cure of all Registration Defaults relating to
         any particular Debenture or share of Common Stock, the accrual of
         Liquidated Damages with respect to such Debenture or share of Common
         Stock will cease.

                  (d)      All obligations of the Company set forth in this
         Section 3 that are outstanding with respect to any Transfer Restricted
         Security at the time such security ceases to be a Transfer Restricted
         Security shall survive until such time as all such obligations with
         respect to such Transfer Restricted Security shall have been satisfied
         in full.

         The Liquidated Damages set forth above shall be the exclusive monetary
remedy available to the Holders for each Registration Default.

         4.       Registration Procedures.

                  (a)      In connection with the Shelf Registration Statement,
         the Company shall comply with all the provisions of Section 4(b) hereof
         and shall use its best efforts to effect such registration to permit
         the sale of the Transfer Restricted Securities, and pursuant thereto,
         shall as expeditiously as possible prepare and file with the Commission
         a Shelf Registration Statement relating to the registration on any
         appropriate form under the Securities Act.

                  (b)      In connection with the Shelf Registration Statement
         and any Prospectus required by this Agreement to permit the sale or
         resale of Transfer Restricted Securities, the Company shall:

                           (i)      Subject to any notice by the Company in
                  accordance with this Section 4(b) of the existence of any fact
                  or event of the kind described in Section 4(b)(iii)(D), use
                  its best efforts to keep the Shelf Registration Statement
                  continuously effective during the Effectiveness Period; upon
                  the occurrence of any event that would cause the Shelf
                  Registration Statement or the Prospectus contained

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                                                                              10

                  therein (A) to contain a material misstatement or omission or
                  (B) not to be effective and usable for resale of Transfer
                  Restricted Securities during the Effectiveness Period, the
                  Company shall file promptly an appropriate amendment to the
                  Shelf Registration Statement, a supplement to the Prospectus
                  or a report filed with the Commission pursuant to Section
                  13(a), 13(c), 14 or 15(d) of the Exchange Act, in the case of
                  clause (A), correcting any such misstatement or omission, and,
                  in the case of either clause (A) or (B), use its best efforts
                  to cause such amendment to be declared effective and the Shelf
                  Registration Statement and the related Prospectus to become
                  usable for their intended purposes as soon as practicable
                  thereafter. Notwithstanding the foregoing, the Company may
                  suspend the effectiveness of the Shelf Registration Statement
                  by written notice to the Holders for a period not to exceed an
                  aggregate of 45 days in any 90-day period (each such period, a
                  "SUSPENSION PERIOD") if:

                                    (x) an event occurs and is continuing as a
                  result of which the Shelf Registration Statement, the
                  Prospectus, any amendment or supplement thereto, or any
                  document incorporated by reference therein would, in the
                  Company's judgment, contain an untrue statement of a material
                  fact or omit to state a material fact required to be stated
                  therein or necessary to make the statements therein not
                  misleading; and

                                    (y) the Company determines in good faith
                  that the disclosure of such event at such time would be
                  seriously detrimental to the Company and its subsidiaries;

         provided that, in the event the disclosure relates to a previously
         undisclosed proposed or pending material business transaction, the
         disclosure of which the Company determines in good faith would be
         reasonably likely to impede the Company's ability to consummate such
         transaction, the Company may extend a Suspension Period from 45 days to
         60 days; provided, however, that Suspension Periods shall not exceed an
         aggregate of 90 days in any 360-day period. The Company shall not be
         required to specify in the written notice to the Holders the nature of
         the event giving rise to the Suspension Period.

                           (ii)     Prepare and file with the Commission such
                  amendments and post-effective amendments to the Shelf
                  Registration Statement as may be necessary to keep the Shelf
                  Registration Statement effective during the Effectiveness
                  Period; cause the Prospectus to be supplemented by any
                  required Prospectus supplement, and as so supplemented to be
                  filed pursuant to Rule 424 under the Securities Act, and to
                  comply fully with the applicable provisions of Rules 424 and
                  430A under the

<PAGE>

                                                                              11

                  Securities Act in a timely manner; and comply with the
                  provisions of the Securities Act applicable to it with respect
                  to the disposition of all Debentures covered by the Shelf
                  Registration Statement during the applicable period in
                  accordance with the intended method or methods of distribution
                  by the sellers thereof set forth in the Shelf Registration
                  Statement or supplement to the Prospectus.

                           (iii)    Advise the selling Holders promptly and, if
                  requested by such selling Holders, to confirm such advice in
                  writing, except as provided in clause (D) below:

                                    (A)      when the Prospectus or any
                           Prospectus supplement or post-effective amendment has
                           been filed, and, with respect to the Shelf
                           Registration Statement or any post-effective
                           amendment thereto, when the same has become
                           effective,

                                    (B)      of any request by the Commission
                           for amendments to the Shelf Registration Statement or
                           amendments or supplements to the Prospectus or for
                           additional information relating thereto,

                                    (C)      of the issuance by the Commission
                           of any stop order suspending the effectiveness of the
                           Shelf Registration Statement under the Securities Act
                           or of the suspension by any state securities
                           commission of the qualification of the Transfer
                           Restricted Securities for offering or sale in any
                           jurisdiction, or the initiation of any proceeding for
                           any of the preceding purposes, or

                                    (D)      of the existence of any fact or the
                           happening of any event, during the Effectiveness
                           Period, that makes any statement of a material fact
                           made in the Shelf Registration Statement, the
                           Prospectus, any amendment or supplement thereto, or
                           any document incorporated by reference therein
                           untrue, or that requires the making of any additions
                           to or changes in the Shelf Registration Statement or
                           the Prospectus in order to make the statements
                           therein not misleading.

         If at any time the Commission shall issue any stop order suspending the
         effectiveness of the Shelf Registration Statement, or any state
         securities commission or other regulatory authority shall issue an
         order suspending the qualification or exemption from qualification of
         the Transfer Restricted Securities under state securities or Blue Sky
         laws, the Company shall use its best efforts to obtain the withdrawal
         or lifting of such order at the earliest possible time and will provide
         to each Holder who is named in

<PAGE>

                                                                              12

         the Shelf Registration Statement prompt notice of the withdrawal of any
         such order.

                           (iv)     Make available at reasonable times for
                  inspection by one or more representatives of the selling
                  Holders, designated in writing by a Majority of Holders whose
                  Transfer Restricted Securities are included in the Shelf
                  Registration Statement, and any attorney or accountant
                  retained by such selling Holders, all financial and other
                  records, pertinent corporate documents and properties of the
                  Company as shall be reasonably necessary to enable them to
                  conduct a reasonable investigation within the meaning of
                  Section 11 of the Securities Act, and cause the Company's
                  officers, directors, managers and employees to supply all
                  information reasonably requested by any such representative or
                  representatives of the selling Holders, attorney or accountant
                  in connection therewith; provided, however, that the Company
                  shall have no obligation to deliver information to any selling
                  Holder or representative pursuant to this Section 4(b)(iv)
                  unless such selling Holder or representative shall have
                  executed and delivered a confidentiality agreement in a form
                  acceptable to the Company relating to such information.

                           (v)      If requested by any selling Holders,
                  promptly incorporate in the Shelf Registration Statement or
                  Prospectus, pursuant to a supplement or post-effective
                  amendment if necessary, such information as such selling
                  Holders may reasonably request to have included therein,
                  including, without limitation, information relating to the
                  "PLAN OF DISTRIBUTION" of the Transfer Restricted Securities.

                           (vi)     Furnish to each selling Holder upon their
                  request, without charge, at least one copy of the Shelf
                  Registration Statement, as first filed with the Commission,
                  and of each amendment thereto (and any documents incorporated
                  by reference therein or exhibits thereto (or exhibits
                  incorporated in such exhibits by reference) as such Person may
                  request).

                           (vii)    Deliver to each selling Holder, without
                  charge, as many copies of the Prospectus (including each
                  preliminary Prospectus) and any amendment or supplement
                  thereto as such Persons reasonably may request; subject to any
                  notice by the Company in accordance with this Section 4(b) of
                  the existence of any fact or event of the kind described in
                  Section 4(b)(iii)(D), the Company hereby consents to the use
                  of the Prospectus and any amendment or supplement thereto by
                  each of the selling Holders in connection with the offering
                  and the sale of the Transfer Restricted Securities

<PAGE>

                                                                              13

                  covered by the Prospectus or any amendment or supplement
                  thereto.

                           (viii)   Before any public offering of Transfer
                  Restricted Securities, cooperate with the selling Holders and
                  their counsel in connection with the registration and
                  qualification of the Transfer Restricted Securities under the
                  securities or Blue Sky laws of such jurisdictions in the
                  United States as the selling Holders may reasonably request
                  and do any and all other acts or things necessary or advisable
                  to enable the disposition in such jurisdictions of the
                  Transfer Restricted Securities covered by the Shelf
                  Registration Statement; provided, however, that the Company
                  shall not be required (A) to register or qualify as a foreign
                  corporation or a dealer of securities where it is not now so
                  qualified or to take any action that would subject it to the
                  service of process in any jurisdiction where it is not now so
                  subject or (B) to subject itself to general or unlimited
                  service of process or to taxation in any such jurisdiction if
                  they are not now so subject.

                           (ix)     Cooperate with the selling Holders to
                  facilitate the timely preparation and delivery of certificates
                  representing Transfer Restricted Securities to be sold and not
                  bearing any restrictive legends (unless required by applicable
                  securities laws); and enable such Transfer Restricted
                  Securities to be in such denominations and registered in such
                  names as the Holders may request at least two Business Days
                  before any sale of Transfer Restricted Securities.

                           (x)      Use its reasonable best efforts to cause the
                  Transfer Restricted Securities covered by the Shelf
                  Registration Statement to be registered with or approved by
                  such other U.S. governmental agencies or authorities as may be
                  necessary to enable the seller or sellers thereof to
                  consummate the disposition of such Transfer Restricted
                  Securities.

                           (xi)     Subject to Section 4(b)(i) hereof, if any
                  fact or event contemplated by Section 4(b)(iii)(D) hereof
                  shall exist or have occurred, use its best efforts to prepare
                  a supplement or post-effective amendment to the Shelf
                  Registration Statement or related Prospectus or any document
                  incorporated therein by reference or file any other required
                  document so that, as thereafter delivered to the purchasers of
                  Transfer Restricted Securities, the Prospectus will not
                  contain an untrue statement of a material fact or omit to
                  state any material fact required to be stated therein or
                  necessary to make the statements therein, in light of the
                  circumstances in which they are made, not misleading.

<PAGE>

                                                                              14

                           (xii)    Provide CUSIP numbers for all Transfer
                  Restricted Securities not later than the effective date of the
                  Shelf Registration Statement and provide the Trustee under the
                  Indenture with certificates for the Debentures that are in a
                  form eligible for deposit with The Depository Trust Company.

                           (xiii)   Cooperate and assist in any filings required
                  to be made with the NASD and in the performance of any due
                  diligence investigation by any underwriter that is required to
                  be retained in accordance with the rules and regulations of
                  the NASD.

                           (xiv)    Otherwise use its best efforts to comply
                  with all applicable rules and regulations of the Commission
                  and all reporting requirements under the rules and regulations
                  of the Exchange Act.

                           (xv)     Cause the Indenture to be qualified under
                  the TIA not later than the effective date of the Shelf
                  Registration Statement required by this Agreement, and, in
                  connection therewith, cooperate with the Trustee and the
                  holders of Debentures to effect such changes to the Indenture
                  as may be required for such Indenture to be so qualified in
                  accordance with the terms of the TIA; and execute and use its
                  best efforts to cause the Trustee thereunder to execute all
                  documents that may be required to effect such changes and all
                  other forms and documents required to be filed with the
                  Commission to enable such Indenture to be so qualified in a
                  timely manner.

                           (xvi)    Cause all Common Stock covered by the Shelf
                  Registration Statement to be listed or quoted, as the case may
                  be, on each securities exchange or automated quotation system
                  on which Common Stock is then listed or quoted.

                           (xvii)   Provide to each Holder upon written request
                  each document filed with the Commission pursuant to the
                  requirements of Section 13 and Section 15 of the Exchange Act
                  after the effective date of the Shelf Registration Statement,
                  unless such document is available through the Commission's
                  EDGAR system.

                  (c)      Each Holder agrees by acquisition of a Transfer
         Restricted Security that, upon receipt of any notice (a "SUSPENSION
         NOTICE") from the Company of the existence of any fact of the kind
         described in Section 4(b)(iii)(D) hereof, such Holder will forthwith
         discontinue disposition of Transfer Restricted Securities pursuant to
         the Shelf Registration Statement until:

<PAGE>

                                                                              15

                           (i)      such Holder has received copies of the
                  supplemented or amended Prospectus contemplated by Section
                  4(b)(xi) hereof; or

                           (ii)     such Holder is advised in writing by the
                  Company that the use of the Prospectus may be resumed, and has
                  received copies of any additional or supplemental filings that
                  are incorporated by reference in the Prospectus.

If so directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such Suspension Notice.

                  (d)      Each Holder agrees by acquisition of a Transfer
         Restricted Security, that no Holder shall be entitled to sell any of
         such Transfer Restricted Securities pursuant to a Registration
         Statement; or to receive a Prospectus relating thereto, unless such
         Holder has furnished the Company with a Notice and Questionnaire as
         required pursuant to Section 2(e) hereof (including the information
         required to be included in such Notice and Questionnaire) and the
         information set forth in the next sentence. Each Notice Holder agrees
         promptly to furnish to the Company all information required to be
         disclosed in order to make the information previously furnished to the
         Company by such Notice Holder not misleading and any other information
         regarding such Notice Holder and the distribution of such Transfer
         Restricted Securities as the Company may from time to time reasonably
         request in writing. Any sale of any Transfer Restricted Securities by
         any Holder shall constitute a representation and warranty by such
         Holder that the information relating to such Holder and its plan of
         distribution is as set forth in the Prospectus delivered by such Holder
         in connection with such disposition, that such Prospectus does not as
         of the time of such sale contain any untrue statement of a material
         fact relating to or provided by such Holder to its plan of distribution
         and that such Prospectus does not as of the time of such sale omit to
         state any material fact relating to or provided by such Holder or its
         plan of distribution necessary to make the statements in such
         Prospectus, in the light of the circumstances under which they were
         made not misleading.

         5.       Registration Expenses.

         All expenses incident to the Company's performance of or compliance
with this Agreement shall be borne by the Company regardless of whether a Shelf
Registration Statement becomes effective, including, without limitation:

                           (i)      all registration and filing fees and
                  expenses (including filings made with the NASD);

<PAGE>

                                                                              16

                           (ii)     all fees and expenses of compliance with
                  federal securities and state Blue Sky or securities laws;

                           (iii)    all expenses of printing (including printing
                  of Prospectuses and certificates for the Common Stock to be
                  issued upon conversion of the Debentures) and the Company's
                  expenses for messenger and delivery services and telephone;

                           (iv)     all fees and disbursements of counsel to the
                  Company;

                           (v)      all application and filing fees in
                  connection with listing (or authorizing for quotation) the
                  Common Stock on a national securities exchange or automated
                  quotation system pursuant to the requirements hereof; and

                           (vi)     all fees and disbursements of independent
                  certified public accountants of the Company.

         The Company shall bear its internal expenses (including, without
limitation, all salaries and expenses of their officers and employees performing
legal, accounting or other duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.

         6.       Indemnification And Contribution.

                  (a)      The Company agrees to indemnify and hold harmless
         each Holder by the Shelf Registration Statement (including each Initial
         Purchaser), its directors, officers, and employees and each person, if
         any, who controls any such Holder within the meaning of the Securities
         Act or the Exchange Act (each, an "INDEMNIFIED HOLDER"), against any
         loss, claim, damage, liability or expense, joint or several, or any
         action in respect thereof (including, but not limited to, any loss,
         claim, damage, liability or action relating to resales of the Transfer
         Restricted Securities), to which such Indemnified Holder may become
         subject, insofar as any such loss, claim, damage, liability or action
         arises out of, or is based upon:

                           (i)      any untrue statement or alleged untrue
                  statement of a material fact contained in (A) the Shelf
                  Registration Statement as originally filed or in any amendment
                  thereof, in any Prospectus, or in any amendment or supplement
                  thereto or (B) any blue sky application or other document or
                  any amendment or supplement thereto prepared or executed by
                  the Company (or based upon written information furnished by or
                  on behalf of the Company expressly for use in such blue sky
                  application or other document or amendment on supplement)
                  filed in any jurisdiction specifically for the purpose of
                  qualifying any or all of the Transfer Restricted Securities
                  under the securities law of any state or other jurisdiction

<PAGE>

                                                                              17

                  (such application or document being hereinafter called a "BLUE
                  SKY APPLICATION"); or

                           (ii)     the omission or alleged omission to state
                  therein any material fact required to be stated therein or
                  necessary to make the statements therein, in the light of the
                  circumstances under which they were made, not misleading,

and agrees to reimburse each Indemnified Holder promptly upon demand for any
legal or other expenses reasonably incurred by such Indemnified Holder in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Company by or on behalf of a Holder (or its related Indemnified Holder)
specifically for use therein. The foregoing indemnity agreement is in addition
to any liability which the Company may otherwise have.

                  (b)      Each Holder, severally and not jointly, agrees to
         indemnify and hold harmless the Company, its directors, officers and
         employees and each person, if any, who controls the Company within the
         meaning of the Securities Act or the Exchange Act to the same extent as
         the foregoing indemnity from the Company to each such Holder, but only
         with reference to written information relating to such Holder furnished
         to the Company by or on behalf of such Holder specifically for
         inclusion in the documents referred to in the foregoing indemnity. The
         indemnity agreement set forth in this Section shall be in addition to
         any liabilities which any such Holder may otherwise have. In no event
         shall any Holder, its directors, officers or any person who controls
         such Holder be liable or responsible for any amount in excess of the
         amount by which the total amount received by such Holder with respect
         to its sale of Transfer Restricted Securities pursuant to a Shelf
         Registration Statement exceeds (i) the amount paid by such Holder for
         such Transfer Restricted Securities and (ii) the amount of any damages
         that such Holder, its directors, officers or any person who controls
         such Holder has otherwise been required to pay by reason of such untrue
         or alleged untrue statement or omission or alleged omission.

                  (c)      Promptly after receipt by an indemnified party under
         this Section 6 of notice of any claim or the commencement of any
         action, the indemnified party shall, if a claim in respect thereof is
         to be made against the indemnifying party under this Section 6, notify
         the indemnifying party in writing of the claim or the commencement of
         that action; provided, however, that the failure to notify the
         indemnifying party shall not relieve it from any liability which it may
         have under this Section 6 except to the extent it has been materially
         prejudiced by such failure and, provided,

<PAGE>

                                                                              18

         further, that the failure to notify the indemnifying party shall not
         relieve it from any liability which it may have to an indemnified party
         otherwise than under this Section 6. If any such claim or action shall
         be brought against an indemnified party, and it shall notify the
         indemnifying party thereof, the indemnifying party shall be entitled to
         participate therein and, to the extent that it wishes, jointly with any
         other similarly notified indemnifying party, to assume the defense
         thereof with counsel reasonably satisfactory to the indemnified party.
         After notice from the indemnifying party to the indemnified party of
         its election to assume the defense of such claim or action, the
         indemnifying party shall not be liable to the indemnified party under
         this Section 6 for any legal or other expenses subsequently incurred by
         the indemnified party in connection with the defense thereof other than
         reasonable costs of investigation; provided, however, that the Holders
         shall have the right to employ a single counsel to represent jointly
         the Holders and their directors, officers, employees and controlling
         persons who may be subject to liability arising out of any claim in
         respect of which indemnity may be sought by the Holders against the
         Company under this Section 6 if the Holders seeking indemnification
         shall have been advised by legal counsel that there may be one or more
         legal defenses available to such Holders and their respective officers,
         employees and controlling persons that are different from or additional
         to those available to the Company, and in that event, the fees and
         expenses of such separate counsel shall be paid by the Company. No
         indemnifying party shall:

                           (i)      without the prior written consent of the
                  indemnified parties (which consent shall not be unreasonably
                  withheld) settle or compromise or consent to the entry of any
                  judgment with respect to any pending or threatened claim,
                  action, suit or proceeding in respect of which indemnification
                  or contribution may be sought hereunder (whether or not the
                  indemnified parties are actual or potential parties to such
                  claim or action), unless such settlement, compromise or
                  consent includes an unconditional release of each indemnified
                  party from all liability arising out of such claim, action,
                  suit or proceeding, or

                           (ii)     be liable for any settlement of any such
                  action effected without its written consent (which consent
                  shall not be unreasonably withheld).

                  (d)      The indemnifying party under this Section shall not
         be liable for any settlement of any proceeding effected without its
         written consent, which shall not be withheld unreasonably, but if
         settled with such consent or if there is a final judgment for the
         plaintiff, the indemnifying party agrees to indemnify the indemnified
         party against any loss, claim, damage, liability or expense by reason
         of such settlement or judgment. Notwithstanding the foregoing sentence,
         if at any time an indemnified

<PAGE>

                                                                              19

         party shall have requested an indemnifying party to reimburse the
         indemnified party for fees and expenses of counsel as contemplated by
         Section 6(c) hereof, the indemnifying party agrees that it shall be
         liable for any settlement of any proceeding effected without its
         written consent if (i) such settlement is entered into more than 30
         days after receipt by such indemnifying party of the aforesaid request
         and (ii) such indemnifying party shall not have reimbursed the
         indemnified party in accordance with such request prior to the date of
         such settlement. No indemnifying party shall, without the prior written
         consent of the indemnified party, effect any settlement, compromise or
         consent to the entry of judgment in any pending or threatened action,
         suit or proceeding in respect of which any indemnified party is or
         could have been a party and indemnity was or could have been sought
         hereunder by such indemnified party, unless such settlement, compromise
         or consent (x) includes an unconditional release of such indemnified
         party from all liability on claims that are the subject matter of such
         action, suit or proceeding and (y) does not include a statement as to
         or an admission of fault, culpability or a failure to act by or on
         behalf of any indemnified party.

                  (e)      If the indemnification provided for in this Section 6
         shall for any reason be unavailable or insufficient to hold harmless an
         indemnified party under Section 6(a) or 6(b) in respect of any loss,
         claim, damage or liability (or action in respect thereof) referred to
         therein, each indemnifying party shall, in lieu of indemnifying such
         indemnified party, contribute to the amount paid or payable by such
         indemnified party as a result of such loss, claim, damage or liability
         (or action in respect thereof):

                           (i)      in such proportion as is appropriate to
                  reflect the relative benefits received by the Company from the
                  offering and sale of the Transfer Restricted Securities on the
                  one hand and a Holder with respect to the sale by such Holder
                  of the Transfer Restricted Securities on the other, or

                           (ii)     if the allocation provided by Section
                  6(e)(i) is not permitted by applicable law, in such proportion
                  as is appropriate to reflect not only the relative benefits
                  referred to in Section 6(e)(i) but also the relative fault of
                  the Company on the one hand and the Holders on the other in
                  connection with the statements or omissions or alleged
                  statements or alleged omissions that resulted in such loss,
                  claim, damage or liability (or action in respect thereof), as
                  well as any other relevant equitable considerations.

The relative benefits received by the Company on the one hand and a Holder on
the other with respect to such offering and such sale shall be deemed to be in
the same proportion as the total net proceeds from the offering of the
Debentures purchased under the Purchase Agreement (before deducting expenses)
received by the Company, on the one hand, bear to the total proceeds received by
such

<PAGE>

                                                                              20

Holder with respect to its sale of Transfer Restricted Securities on the
other. The relative fault of the parties shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Holders on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
each Holder agree that it would not be just and equitable if the amount of
contribution pursuant to this Section 6(e) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the first sentence of this paragraph
(e).

         The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 6 shall be deemed to include, for purposes of this Section
6, any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim.

         Notwithstanding the provisions of this Section 6, no Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Transfer Restricted Securities purchased by it were resold
exceeds the amount of any damages which such Holder has otherwise been required
to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute as provided in this
Section 6(e) are several and not joint.

                  (f)      The provisions of this Section 6 shall remain in full
         force and effect, regardless of any investigation made by or on behalf
         of any Holder or the Company or any of the officers, directors or
         controlling persons referred to in this Section 6 hereof, and will
         survive the sale by a Holder of Transfer Restricted Securities.

         7.       Rule 144A and Rule 144. The Company agrees with each Holder,
for so long as any Transfer Restricted Securities remain outstanding and during
any period in which the Company (i) is not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon request of any Holder, to such Holder or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Securities Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A, and (ii) is subject to Section 13
or 15 (d) of the Exchange Act, to make all filings required thereby in a timely
manner in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144.

<PAGE>

                                                                              21

         8.       No Participation In Underwritten Registrations. No Holder may
participate in any Underwritten Registration hereunder.

         9.       Miscellaneous.

                  (a)      Remedies. The Company acknowledges and agrees that
         any failure by the Company to comply with its obligations under Section
         2 hereof may result in material irreparable injury to the Initial
         Purchasers or the Holders for which there is no adequate remedy at law,
         that it will not be possible to measure damages for such injuries
         precisely, and that, in the event of any such failure, the Initial
         Purchasers or any Holder may obtain such relief as may be required to
         specifically enforce the Company's obligations under Section 2 hereof.
         The Company further agrees to waive the defense in any action for
         specific performance that a remedy at law would be adequate.

                  (b)      Actions Affecting Transfer Restricted Securities. The
         Company shall not, directly or indirectly, take any action with respect
         to the Transfer Restricted Securities as a class that would adversely
         affect the ability of the Holders to include such Transfer Restricted
         Securities in a registration undertaken pursuant to this Agreement.

                  (c)      No Inconsistent Agreements. The Company has not, as
         of the date hereof, entered into, nor shall it, on or after the date
         hereof, enter into, any agreement with respect to its securities that
         is inconsistent with the rights granted to the Holders in this
         Agreement or otherwise conflicts with the provisions hereof. In
         addition, the Company shall not grant to any of its securityholders
         (other than the Holders in such capacity) the right to include any of
         its securities in the Shelf Registration Statement provided for in this
         Agreement other than the Transfer Restricted Securities.

                  (d)      Amendments and Waivers. This Agreement may not be
         amended, modified or supplemented, and waivers or consents to or
         departures from the provisions hereof may not be given, unless the
         Company has obtained the written consent of a Majority of Holders;
         provided, however, that with respect to any matter that directly or
         indirectly adversely affects the rights of any Initial Purchaser
         hereunder, the Company shall obtain the written consent of each such
         Initial Purchaser against which such amendment, qualification,
         supplement, waiver or consent is to be effective. Notwithstanding the
         foregoing (except the foregoing proviso), a waiver or consent to depart
         from the provisions hereof, with respect to a matter, which relates
         exclusively to the rights of Holders whose securities are being sold
         pursuant to a Shelf Registration Statement and does not directly or
         indirectly adversely affect the rights of other Holders, may be given
         by the Majority Holders, determined on the basis of Debentures being
         sold rather than registered under such Shelf Registration Statement.

<PAGE>

                                                                              22

                  (e)      Notices. All notices and other communications
         provided for or permitted hereunder shall be made in writing by hand
         delivery, first class mail (registered or certified, return receipt
         requested), telex, facsimile transmission, or air courier guaranteeing
         overnight delivery:

                           (i)      if to a Holder, at the address set forth on
                  the records of the registrar under the Indenture or the
                  transfer agent of the Common Stock, as the case may be; and

                           (ii)     if to the Company, initially at its address
                  set forth in the Purchase Agreement,

                             With a copy to:

                             Fenwick & West LLP
                             Silicon Valley Center
                             801 California Street
                             Mountain View, California 94041
                             Facsimile:  650-938-5200
                             Attention:  Daniel Winnike

         All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five (5) Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if transmitted by
facsimile; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.

         Any party hereto may change the address for receipt of communications
by giving written notice to the others.

                  (f)      Successors and Assigns. This Agreement shall inure to
         the benefit of and be binding upon the successors and assigns of each
         of the parties, including without limitation and without the need for
         an express assignment, subsequent Holders. The Company hereby agrees to
         extend the benefit of this Agreement to any Holder and any such Holder
         may specifically enforce the provisions of this Agreement as if an
         original party hereto.

                  (g)      Counterparts. This Agreement may be executed in any
         number of counterparts and by the parties hereto in separate
         counterparts, each of which when so executed shall be deemed to be an
         original and all of which taken together shall constitute one and the
         same agreement.

                  (h)      Debentures Held by the Company or Their Affiliates.
         Whenever the consent or approval of Holders of a specified percentage
         of Transfer Restricted Securities is required hereunder, Transfer
         Restricted Securities held by the Company or its Affiliates (other than
         subsequent

<PAGE>

                                                                              23

         Holders if such subsequent Holders are deemed to be Affiliates solely
         by reason of their holding of such Debentures) shall not be counted in
         determining whether such consent or approval was given by the Holders
         of such required percentage.

                  (i)      Headings. The headings in this Agreement are for
         convenience of reference only and shall not limit or otherwise affect
         the meaning hereof.

                  (j)      Governing Law. This Agreement shall be governed by
         and construed in accordance with the laws of the State of New York.

                  (k)      Severability. If any one or more of the provisions
         contained herein, or the application thereof in any circumstance, is
         held invalid, illegal or unenforceable, the validity, legality and
         enforceability of any such provision in every other respect and of the
         remaining provisions contained herein shall not be affected or impaired
         thereby, it being intended that all of the rights and privileges of the
         parties shall be enforceable to the fullest extent permitted by law.

                  (l)      Entire Agreement. This Agreement is intended by the
         parties as a final expression of their agreement and intended to be a
         complete and exclusive statement of the agreement and understanding of
         the parties hereto in respect of the subject matter contained herein.
         There are no restrictions, promises, warranties or undertakings, other
         than those set forth or referred to herein with respect to the
         registration rights granted by the Company with respect to the Transfer
         Restricted Securities. This Agreement supersedes all prior agreements
         and understandings between the parties with respect to such subject
         matter.

<PAGE>

                                                                              24

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                    COVAD COMMUNICATIONS GROUP, INC.

                                    By: /s/ Mark Richman
                                       -----------------------------------------
                                       Name:  Mark Richman
                                       Title: Executive Vice President and Chief
                                               Financial Officer

  BANC OF AMERICA SECURITIES LLC

Acting as Representative of the several Initial Purchasers
named in Schedule A to the Purchase Agreement

  BANC OF AMERICA SECURITIES LLC

  By:  /s/ Derek Dillon
      ------------------------------
      Name: Derek Dillon
      Title: Managing Director

                                       24