Fill and Sign the Market Agreement Form

MARKET DEVELOPMENT AGREEMENT 1 EXHIBIT 10.25 MARKET DEVELOPMENT AGREEMENT This Market Development Agreement ("Agreement") is made this Oct 5 day of 1999, by and between BellSouth Business Systems, Inc. ("BBS"), a Georgia corporation, and Telocity, Inc. ("Company"). WHEREAS, BBS markets and sells on behalf of BellSouth Telecommunications, Inc. ("BST"), Asymmetric Digital Subscriber Line services ("ADSL"), a technology provisioned on end user telephone lines that enables high speed access to the Internet and other destinations; WHEREAS, BBS desires to achieve market awareness about ADSL, a new technology relatively unknown to the market to date; and WHEREAS, Company has the resources and desires to market the ADSL technology, but requires funding for its operational and advertising efforts. NOW, THEREFORE, in consideration of the mutual promises contained herein, the parties agree as set forth below. I. ADVERTISING A. Media. Company will create or increase market awareness of the ADSL technology in the consumer or small business markets through one or more of the following forms of media: - direct mail - outbound telemarketing - website - e-mail communication - Internet banner advertising - radio or TV broadcasting - billboard advertising - newspapers - magazines - door-to-door campaigns. B. Coordination. BBS will provide Company with information about the locations where BST's ADSL service is or will be available by December 31, 1999. Company will coordinate its advertising campaign with BST's 1999 projected deployment schedule and target end users in areas where and when BST's ADSL service is or will be available. C. Timing. Company's advertising will begin on or before October 15, 1999 in anticipation of the 1999 Christmas holiday shopping season. II. OPERATIONS Company will develop methods and procedures, train personnel and create mechanized tools to be operationally ready to take end users' orders for ADSL services by October 15, 1999. III. FUNDING A. Sales. BBS will provide funding for Company's successful launch of ADSL services. Company's success in advertising and operational readiness for ADSL services will be measured and rewarded based upon Company's sales of BST ADSL lines in services BY 2 MARCH 31, 2000 AND REMAINING IN SERVICE UNTIL AT LEAST JUNE 30, 2000 as set forth in the following table. Number of Installed ADSL Lines Marketing Dollars per ADSL Line [*] [*] [*] [*] [*] [*] [*] [*] B. Payments. BBS will pay Company a marketing fee according to the number of BST ADSL lines Company has successfully placed in service by December 31, 1999, and maintained until March 21, 2000. Payment of such a fee will be paid incrementally as follows. On or before December 15, 1999, BBS will make the first payment per ADSL line placed in service by Company and installed by BST as of November 30, 1999, according to the table set forth above. The parties will true-up such prior payment based on Company's total BST ADSL lines in service on February 15, 2000, and again, on March 31, 2000. Actual payment will be made no later than fifteen (15) days after each true-up date. For further clarification, the true-up process is described as follows. If from November 30, 1999 to December 31, 1999, the number of ADSL lines placed and maintained in service by Company increases, and that number of such ADSL lines is maintained in service by Company on February 15, 2000, BBS will remit to Company, on or before March 1, 2000, the balance of marketing dollars per such ADSL line according to the table above. If such additional number of ADSL lines in service increases the level of marketing dollars payable per line, BBS will also remit the additional amount of marketing dollars payable on the lines already paid previously according to the table above. On the other hand, if the Company total number of ADSL lines in service decreases in any manner, Company will remit back to BBS the amount of overage originally paid. The final true up will occur on March 31, 2000, and, if a remittance back to BBS is required, Company will pay BBS no later than April 15, 2000. IV. RELATIONSHIP OF THE PARTIES This Agreement is not intended by the parties to constitute or create a joint venture, partnership or formal business organization of any kind, and the rights and obligations of the parties shall be only those expressly set forth herein. The parties shall be independent entities from each other for all purposes at all times; neither party shall act as agent for, or representative of the other and the employees of one shall not be deemed to be employees of the other. Nothing herein shall be construed as providing for the sharing of profits or losses arising out of the efforts of any of the parties. V. LIABILITY Each party to this Agreement shall be solely, individually, and separately responsible for its own risks, costs, expenses, and liability of any kind that it may incur by reason of its obligations under this Agreement. Further, in no event shall any party to this Agreement be liable to the other party to this Agreement for consequential, indirect or incidental damages arising out of the advertising campaign pursuant to this Agreement or the sale or provision of service directly or indirectly related to this Agreement. Finally, Company shall hold BBS and BST harmless for BST's failure to rollout ADSL services according to the schedule provided to Company in accordance with Section I above. Such failure shall not relieve Company from its sales target required in order to qualify for the marketing funding set forth in Section III above. [*] The Registrant has requested confidential treatment for certain portions of this exhibit. The omitted portions have been separately filed with the Commission. 2 3 VI NON-EXCLUSIVE AGREEMENT In no event does this Agreement limit the right of any party to enter into a marketing agreement with any other third party for the purpose of creating market awareness of the ADSL technology. VII. CONFIDENTIAL INFORMATION The parties acknowledge that disclosure of information is necessary between the parties with regard to the planning and preparation for the coordination of Company's advertising campaign with BST's ADSL rollout schedule. Such information includes, but is not limited to, technical and business plans, technical information, specifications, drawings, products, and services. Accordingly, the parties understand that they may disclose to each other information that may be considered confidential and proprietary. Unless such confidential information was previously known to the obtaining party free of any obligation to keep it confidential or has been or is subsequently made public by the other or a third party, the obtaining party shall use the same degree of care in keeping it confidential as it does its own confidential information. Such confidential information shall be used only in the performance of obligations hereunder, and may be used for other purposes only upon such terms as may be agreed upon in writing. VIII. ASSIGNMENT This Agreement may not be assigned or otherwise transferred by either party in whole or part without the express prior written consent of the other party, which consent will not be unreasonably withheld. IX. ENFORCEABILITY If any part, term or provision of this Agreement shall be held void, illegal, unenforceable, or in conflict with any law, regulation or order of a federal, state or local government agency or court thereof having jurisdiction over this Agreement or the parties, the validity of the remaining portions or provisions shall not be affected thereby. VII. PUBLICITY Any news release, public announcement, advertisement or publicity released by either party concerning this Agreement will be subject to prior mutual agreement. Any such publicity shall give appropriate credit to the contribution of each party. Company agrees to submit to BBS all advertising, sales promotions, press releases, and other publicity matters relating to this Agreement or mentioning or implying the trade names, logos, trademarks or service marks (collectively called "Marks") of BellSouth Corporation and/or any of its affiliated companies or language from which the connection of said Marks therewith may be inferred or implied, or mentioning or implying the names of any personnel of BellSouth Corporation and/or any of its affiliated companies, Company further agrees not to publish or use such advertisements, sales promotions, press releases, or publicity matters without BBS's prior written consent. XI. MODIFICATION AND WAIVER This Agreement shall not be amended or modified, nor shall any waiver or any right hereunder be effective, unless set forth in a document executed by authorized representatives of the parties. The waiver of any breach of any term, covenant or condition contained herein shall not be deemed to be a waiver of such term, covenant or condition. XII. NOTICES 3 4 All notices, certificates, acknowledgments and other reports hereunder shall be in writing and shall be deemed properly delivered when duly mailed to the other party at its address as follows, or to such other address as either party may, by written notice, designate to the other. BellSouth Business Systems, Inc. Company Suite 600 Steve Ghareeb 2400 Century Pkwy Telocity, Inc. Atlanta, GA 30345 10355 N. De Anza Blvd. ATTN: Chuck Carr ATTN: Cupertino, CA 95014-2027 XIII. GOVERNING LAW This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia. XIV. ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and may not be modified except in accordance with the provisions herein. XV. EXECUTION The parties may execute this Agreement in counterparts. Each such counterpart copy of the Agreement executed by all parties shall be deemed an original and complete executed Agreement. IN WITNESS WHEREOF, the parties have caused their representative authorized representatives to sign this Agreement. BELLSOUTH BUSINESS SYSTEMS, INC. COMPANY By: /s/ [Signature Illegible] By: /s/ PETER D. OLSON - ------------------------------- ------------------------------ Title: President - BBS Title: Exec Vice Pres - ------------------------------- ------------------------------ Date: Date: 10/5/99 - ------------------------------- ------------------------------