Channel Management Agreement - McKesson HBOC Inc. and AvantGo Inc.
CHANNEL MANAGEMENT AGREEMENT
This Channel Management Agreement (the "Agreement") is made effective as of
March 7, 2000 (the "Effective Date") by and between McKesson HBOC, Inc., a
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Delaware corporation, with offices at One Post Street, San Francisco, CA 94104
("McKesson"), and AvantGo, Inc., a Delaware corporation with its principal place
of business at 1700 S. Amphlett Blvd., Suite 300, San Mateo, CA 94402
("AvantGo").
RECITALS
AvantGo operates an Internet service (the "AG Service") that facilitates
delivery of information obtained over the Internet through handheld devices.
The AG Service delivers information in several general interest categories and
specific subcategories each of which provides content supplied by individual
content providers.
AvantGo and McKesson have entered into an Amendment to License Agreement of even
date herewith under which McKesson has acquired a license to utilize certain
AvantGo software (the "Licensed Software") in the conduct of its business,
including offering information services to its customers.
The parties want McKesson to develop and manage a Health Category available
through the AG Service.
The parties intend to share revenues generated by the Health Category, as well
as revenues generated by similar activities conducted by McKesson using the
AvantGo software on behalf of McKesson's customers, but do not intend to share
revenues arising from the operations of their respective core businesses.
The parties wish to set forth their understanding with regard to the foregoing
matters in this Agreement.
NOW, THEREFORE, the parties agree as follows:
AGREEMENT
1. Certain Definitions
"AG Site" means the AvantGo Channels page located at
http://avantgo.com/channels or any successor site(s), including any page
appearing on Handhelds serving similar functions.
"Category" is a general interest subject matter category, containing
multiple Channels, that appears on the first user search level of the AG Site at
which Subscribers select Content.
"Channel" is a specific information stream within the Health Category
delivered via the AG Service to a Subscriber's Handheld. Currently, Content for
a particular Channel is typically web pages supplied by a single Content
Provider, such as but not limited to an online publication or reference source,
although advertising Content included in a particular Channel may be supplied by
one or more additional Content Providers.
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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"Confidential Information" means (i) information about a party's (or its
suppliers') business or activities that is proprietary and confidential,
including all business, financial, technical and other information of a party
marked or designated by the party as "confidential" or "proprietary"; (ii)
information which, by its nature or the circumstances surrounding disclosure,
ought in good faith to be treated as confidential; and (iii) the terms and
conditions of this Agreement. Confidential Information does not include
information that (a) is in or enters the public domain without breach of this
Agreement; (b) the receiving party lawfully receives from a third party without
restriction on disclosure and without breach of a nondisclosure obligation; (c)
the receiving party knew prior to receiving such information from the disclosing
party; or (d) the receiving party develops independently without use of the
disclosing party's Confidential Information.
"Content" is material supplied for delivery through the AG Service in the
Health Category which conforms to the Style Guide. It may include news stories,
feature articles, reference material, interactive services, advertising and
other information.
"Content Provider" is an entity that enters into an agreement to furnish
Content for distribution in the Health Category as described in this Agreement.
"Handheld" is any existing or future mobile computing or communication
device, including but not limited to a cell phone, pager, handheld computer, or
other portable device to which Content is or may in the future be delivered.
"Health Category" is the Category that includes Content in the Health
Subject Areas.
"Health Subject Areas" are health, health care, disease, drugs and
pharmaceuticals, and medical matters.
"Style Guide" is the AvantGo guide which specifies guidelines and
procedures for developing material for the AG Service which is optimized for the
small graphics display of Handhelds, a copy of which is located at
http://corp.avantgo,com/DevCorner/StyleGuide/.
"Subscriber" is any person that registers to receive Content through the AG
Service.
"Technical Contact" is a person appointed by AvantGo as the principal
contact for technical matters related to the AG Service and the Health Category.
2. McKesson Responsibilities
2.1 Category Management. McKesson will have sole authority to manage the
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Health Category, as follows.
2.1.1 Channels. McKesson's responsibilities will include exclusive
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management of Content within the Health Subject Areas, except as provided in
section 3.5. McKesson will assume management of Channels within the Health
Subject Areas promptly after the Effective Date and following orientation by
AvantGo concerning the AG Service. Content Partner Agreements in existence prior
to the Effective Date of this Agreement for Channels in Health Subject Areas may
continue in effect only until they first expire or otherwise terminate, after
which time any continuation will be within McKesson's sole discretion. McKesson
will determine appropriate Channels within the Health Subject Areas to add to or
delete from the Health Category. AvantGo may request that particular Content
Providers or Channels be included in the Health Category, and McKesson will
consider in good faith accommodating such requests.
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AvantGo will cooperate as reasonably requested by McKesson in connection with
McKesson's Health Category management and the allocation of Content to
Subscribers.
2.1.2 Content Providers. McKesson will be responsible for all
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interaction with Content Providers relating to the scope and nature of the
Content (as distinct from technical delivery of the Content). McKesson will
include and exclude Content and Content Providers for the Channels in McKesson's
sole reasonable discretion, and will communicate its determinations to AvantGo
in a manner reasonably requested by AvantGo. Revenue will be collected and
allocated in accordance with section 6 below.
2.1.3 Agreements. McKesson will negotiate all agreements with
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Content Providers for the supply of Content in the Health Category. McKesson
will include in such agreements technical requirements reasonably requested by
AvantGo. McKesson will obtain from Content Providers terms no less protective of
AvantGo than those at Exhibit 2.1.3, and the agreement will state that AvantGo
is a third party beneficiary of such terms. McKesson may extend to Content
Providers promises and benefits on behalf of AvantGo no more burdensome to
AvantGo than those specified in Exhibit 2.1.3. To the extent of the provisions
in Exhibit 2.1.3 only, Content Providers shall be third party beneficiaries of
this Agreement. In McKesson's reasonable discretion, such agreements will
provide for compensation which may include, without limitation, any or all of
(i) a one-time slotting fee for inclusion in the Health Category, either on an
exclusive or non-exclusive basis, or (ii) a monthly fee for inclusion in the
Health Category; or (iii) a share of any revenue derived by the Content Provider
as a result of the distribution of the Content through the AG Service, such as
(but not limited to) that derived from the sale of goods or services.
2.1.4 McKesson Content. McKesson may itself supply Content for one
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or more Channels under the terms of this section 2.1.4 ("McKesson Content").
Subject to its obligation to share revenue set forth in Section 6.2, McKesson
will not be obliged to pay fees for placement of McKesson Content on the AG
Site. Notwithstanding the foregoing, if McKesson Content receives preferred
placement or is otherwise specially featured such that McKesson would charge
another Content Provider additionally for preferred treatment, then McKesson
will pay AvantGo the incremental charge for the preferred treatment which
AvantGo would have otherwise received had a third party Content Provider
requested such preferred placement. Preferred treatment of McKesson Content is
not itself sufficient under the preceding sentence to require payment by
McKesson. Instead, a showing is required that a third party Content Provider is
making additional payments for similar preferred treatment, or that such Content
Provider would be required to pay if it and not McKesson were the Content
Provider in the particular instance involved.
2.2 Advertising. Except as provided in section 2.2.1, McKesson will have
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the sole right and responsibility to enter into agreements for advertising and
other promotions in the Health Category, provided that such capabilities are
available and offered through the AG Service and within the technical
capabilities of the AG Service. McKesson will confer with AvantGo on technical
matters relating to Health Category advertising, including but not limited to
targeting, the use of cookies and other visitor promotional and solicitation
tools and techniques, and the requirements of third party advertising brokers
and other vendors.
2.2.1 AvantGo Network. Subject to this section 2.2.1, AvantGo may
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invite Content Providers in the Health Category to participate in an "AvantGo
Network" under which
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advertisements are placed on various channels in the AG Service. To the extent
reasonably practical from a technical perspective, McKesson may decline to allow
the placement of some or all such advertising on such basis as it reasonably
considers appropriate, including but not limited to alternative advertising
sales opportunities or avoiding excessive advertising clutter. Revenue derived
from the portion of such advertising placed in the Health Category, allocated to
the Health Category on the basis of impressions or such other criteria as the
parties agree, will be included as revenue shared under this Agreement.
2.2.2 Subcontracts. McKesson may subcontract the sale, serving and
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other aspects of advertising in its reasonable judgment.
2.3 Technical Contacts. McKesson and AvantGo will cooperate to allow
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Content Providers to communicate directly with AvantGo concerning technical
matters related to the supply and distribution of Content.
2.4 Non-Circumvention. Neither party will enter into deals with
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prospective Content Providers which are intended to circumvent, in whole or in
part, the revenue sharing arrangements hereunder. The occurrence of any such
arrangement shall constitute a breach of this Agreement.
3. AvantGo Responsibilities
3.1 Hosting.
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3.1.1 Category Hosting. AvantGo will operate the AG Service and host
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the Health Category as part of the AG Site and in accordance with this
Agreement. Except to the extent inconsistent with this Agreement, AvantGo will
maintain performance of the AG Site to be equal to or better than the
performance of other reasonably high-quality consumer oriented sites generally
with respect to uptime, responsiveness, and other common factors affecting site
performance.
3.1.2 Technical Support. All Content must conform to the Style
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Guide. AvantGo will use its commercially reasonable efforts to respond to all
electronic mail requests received during normal business hours within twenty-
four (24) hours, and will furnish such technical support to Health Category
Content Providers as it furnishes to other Content Providers generally. AvantGo
will provide additional support to Content Partners, in AvantGo's sole
discretion, subject to AvantGo's then-current time and materials rates. AvantGo
will continue to provide the "Developer Corner" area that is available to
Content Providers and McKesson technical personnel on the site currently located
at http://corp.avantgo.com/DevCorner/.
3.1.3 Site Operation and Navigation. AvantGo will undertake
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commercially reasonable efforts to make the AvantGo Site continuously available
on the Internet, excluding reasonable scheduled maintenance periods. AvantGo
will not prevent or impede back channel and other Interact site and content
navigation generally available through Web browsers.
3.1.4 Subscriber Support. AvantGo will provide all technical support
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to Subscribers to the Health Category as part of its Subscriber support for the
AG Service generally. Subscriber support will be equal to or better than that
provided to users of non-Health Category channels.
3.2 Content Review. McKesson and AvantGo will cooperate to remove any
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Content that is defamatory, obscene, infringing, deemed hate speech, unlawfully
invasive or in any other
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way unlawful, or that encourages violence, or otherwise is in violation of the
Content Partner Agreements.
3.3 Promotion. AvantGo and McKesson will advertise and promote the Health
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Category Channels and their Content, including but not limited to their launch.
AvantGo promotion will be no less prominent than that typical of its
advertisement and promotion of other Categories, Channels and Content available
through the AG Service in general.
3.4 Reports. AvantGo will provide monthly reporting to McKesson at the end
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of the month of the total number of Subscribers to each Health Category Channel,
and such other information reasonably available to AvantGo as McKesson
reasonably requests. If AvantGo will incur more than minimal costs or charges to
generate information that is not otherwise available, it will so advise McKesson
in advance and McKesson will reimburse AvantGo or withdraw the request.
3.5 Non-Revenue Content. AvantGo may with McKesson's consent add Content
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in a Health Subject Area that does not generate revenue. Such added Content may
be placed within or outside the Health Category as the parties agree, and may be
added in order to increase usage of the Health Category or the AG Service, or
for other purposes which benefit the Health Category or the AG Service
generally. McKesson may decline some or all such added Content on such basis as
it reasonably considers appropriate, taking into consideration the success and
popularity of the Health Category as a whole, including but not limited to the
basis that it conflicts with agreements with Content Providers or with actual or
proposed negotiations with potential Content Providers, but McKesson will not
unreasonably reject such added Content.
3.6 Exclusivity. Except as expressly provided in sections 2.2.1 and 3.5,
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McKesson has the exclusive right to obtain or provide, as the case may be, the
supply of Content for the Health Category. AvantGo will not designate any
channel or obtain, provide or distribute content that, in the aggregate over
time, is primarily within one or more of the Health Subject Areas. AvantGo will
not solicit or distribute through the AG Service advertising for information,
products or services in the Health Subject Areas, other than that supplied
through McKesson. No Category other than the Health Category will contain in its
title the terms "health", "wellness", "health care", "medical", or "medicine" or
any combination or synonyms of such terms.
4. Mutual Responsibilities
4.1 Principal Contacts; Meetings. Each party will appoint a person to be
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the principal contact with the other for matters relating to this Agreement
(each, a "Manager"). At least monthly, or at such other times as the parties
agree, the Managers will meet to review the status of the activities relating to
this Agreement and to resolve any outstanding issues. Should the Managers be
unable to resolve any issue, promptly upon the written request of either Manager
specifying the issue of concern, both Managers will arrange to have more senior
officers of each party meet to resolve the issue.
4.1.1 Technical Contact. AvantGo will appoint a Technical Contact as
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the principal contact for technical matters related to operation of Channels and
the AG Service, who will be available during business hours to assist or meet
with McKesson. The Technical Contact will also assist Content Providers to the
same extent as typically provided to other Content Providers. The Technical
Contact may be, but need not be the same person as the Manager appointed by
AvantGo as its principal contact.
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4.1.2 Alternative Contacts. Each party will identify alternative
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contacts in case the principal contacts designated in accordance with this
section 4.1 are unavailable. Each party will give the other party the name,
telephone and other contact information for their respective principal contacts
and alternative contacts, and will notify the other party reasonably promptly of
any changes to its designated contracts or their contact information.
4.2 Branding and Licenses.
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4.2.1 Category Branding. The Health Category will include in its
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name "Health" or "Health Information" or similar terms and the phrase "by
McKesson HBOC" (or another phrase requested by McKesson such as "presented by
McKesson HBOC"). It will include the phrase and term in its listing with other
Categories and in any and all other places on the AG Site in which it appears.
The Health Category will be listed no less prominently than is typical of any
other AG Service Category, excluding special short-term promotions. Without
limiting the foregoing, the Health Category will typically be listed "above the
fold" if any Category is typically listed "above the fold". To the extent that
AvantGo is reasonably able to do so, it will feature the McKesson logo (or such
other logo as McKesson substitutes) in the Health Category listing of the Health
Category pages.
4.2.2 Logo and License. McKesson will furnish AvantGo its logo in
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the form of digitized art suitable for display on the AG Site as described in
this section 4.2. McKesson may from time to time furnish AvantGo other forms or
formats of its name and logo for use in specific agreed promotional activities
related to the Health Category.
4.2.3 McKesson Trademark License. Subject to the terms and
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conditions of this Agreement, McKesson hereby grants AvantGo a limited,
worldwide, royalty-free, non-exclusive license to display its name and logo (the
"McKesson Marks") as described in this section 4.2 during the term of this
Agreement. Any such use of the McKesson Marks will be consistent in all respects
with then current trademark usage guidelines that McKesson may communicate to
AvantGo from time to time. The parties agree that all rights and interests,
including any and all goodwill therein and thereto, in and to the McKesson Marks
shall inure to McKesson. AvantGo hereby assigns and agrees to assign and affirm,
as requested by McKesson from time to time, all such rights and interests to
McKesson.
4.2.4 AvantGo Trademark License. Subject to the terms and conditions
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of this Agreement, AvantGo hereby grants McKesson a limited, worldwide, royalty-
free, non-exclusive license to display its name and logo (the "AvantGo Marks")
as described in this section 4.2 during the term of this Agreement. Any such use
of the AvantGo Marks will be consistent in all respects with then current
trademark usage guidelines that AvantGo may communicate to McKesson from time to
time. The parties agree that all rights and interests, including any and all
goodwill therein and thereto, in and to the AvantGo Marks shall inure to
AvantGo. McKesson hereby assigns and agrees to assign and affirm, as requested
by AvantGo from time to time, all such rights and interests to AvantGo.
4.2.5 No Use of Similar or Competitors' Marks. AvantGo will not use
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any names similar to the McKesson Marks in connection with the AG Services or
otherwise, nor use names or marks that could reasonably be construed to identify
McKesson or its products or services, except in connection with the Health
Category and Content provided through McKesson. AvantGo will not use or
authorize others to use, in connection with the Health Category, trademarks or
service marks of any other party without McKesson's consent. Nothing contained
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in this Agreement restricts AvantGo's ability to sell AvantGo Enterprise Server
products to current or prospective customers.
4.3 Launch. In general, the parties will use diligent efforts to make the
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Health Category available on the AG Site, including but not limited to all
Content necessary to make active Channels available. In particular, but without
limiting the foregoing, AvantGo will diligently implement all technical
requirements necessary and appropriate for the availability and distribution of
Content through the Health Category. Each party will notify the other in writing
of any material delay in the expected completion of its responsibilities.
5. Ownership
5.1 Party Technology. As between the parties, each party will retain
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ownership and all rights in and to any and all U.S. and foreign intellectual
property of any kind or nature in or comprising all software and other
technology that is used in connection with this Agreement. However, any such
software or technology that is conveyed by one party to the other for the
express written purpose of performing this Agreement will be deemed to be
licensed on a nonexclusive, fully-paid, revocable and nontransferable basis, for
the term of this Agreement, but excluding in all events the right to create
derivative works of, distribute or sublicense such software or technology.
Nothing in this Agreement gives either party any other right, title or interest
in or to the software or other technology of the other party. The provisions of
this section do not apply to jointly developed technology described in the
following section.
5.2 Jointly Developed Technology. It is the intent of the parties that no
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intellectual property in respect of technology (as distinct from Content as
provided in the following paragraph) of any kind or nature be created and owned
by them jointly. However, to the extent that their joint activities result in
technology or related intellectual property that is deemed under applicable laws
to be jointly developed and jointly owned by them, the parties will affirm such
ownership in writing. The parties will cooperate, as either of them may
reasonably request, in the protection of any such jointly owned intellectual
property, by registration, prosecution and otherwise. However, neither party
will be required to be a named plaintiff or to expend money in connection with
such protection. If such a protection action for which the parties may be joint
plaintiffs or applicants or any related joint and equal expenditure of money is
proposed by one party, and the other party refuses to expend such money or be a
joint plaintiff, and if the proposing party proceeds with any such protection
action as plaintiff or bearing all such expense, then such party may retain all
commercial and other rights specifically arising or maintained as a result of
the action, including but not limited to any right to receive and retain any
damages awarded or agreed. Neither party shall use or authorize any third
parties to use any jointly owned technology or related intellectual property in
connection with the publication or distribution of Content in the Health Subject
Areas other than Content distributed pursuant to this Agreement. Notwithstanding
the provisions of this section 5.2, a party may propose and the parties may
mutually agree to other arrangements concerning cooperative efforts in
developing and owning technology.
5.3 Content. Content Providers will retain any ownership interest they may
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have in any and all Content they provide for distribution under this Agreement,
unless they agree otherwise in writing. AvantGo and McKesson each will retain
its respective ownership of Content. Each party will be deemed to license to the
other party, as and to the extent reasonably necessary or useful in the
performance of this Agreement, on a nonexclusive, fully-paid, irrevocable and
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nontransferable basis, for the term of this Agreement, any and all copyrighted
material that is provided to the licensee party for distribution through, or in
connection with the promotion of, the Health Category. It is the intent of the
parties that no intellectual property of any kind or nature in respect of
Content (as distinct from software and other technology as provided in the
preceding paragraph) be created and owned by them jointly. However, to the
extent that their joint activities result in Content or related intellectual
property that is deemed under applicable laws to be jointly developed and
jointly owned by them, the parties will affirm such ownership in writing. The
parties will cooperate, as either of them may reasonably request, in the
protection of any such jointly owned Content and intellectual property, by
registration, prosecution and otherwise. However, neither party will be
required to be a named plaintiff or to expend money in connection with such
protection. If such protection action for which the parties may be joint
plaintiffs or applicants or any related joint and equal expenditure of money is
proposed by one party, and the other party refuses to expend such money, and if
the proposing party proceeds with any protection such action as plaintiff or
bearing all such expense, then such party may retain all commercial and other
rights specifically arising or maintained as a result of the action, including
but not limited to any right to receive and retain any damages awarded or
agreed. In all events, neither party shall use or authorize any third parties to
use, publish or distribute any jointly owned Content or related intellectual
property in connection with any publication or distribution of content except
pursuant to this Agreement. Notwithstanding the provisions of this section 5.3,
a party may propose and the parties may mutually agree to other arrangements
concerning cooperative efforts in developing and owning Content.
5.4 Subscriber Data. McKesson may retain for its exclusive use any data
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concerning Subscribers which it obtains from Content Providers. Neither party
will supply personally identifiable Subscriber data to third parties without the
Subscriber's consent, except that a party may without consent supply personally
identifiable Subscriber data to a third party vendor, contractor or other entity
to assist the party in its performance of functions related to the AG Service or
other functions internal to the party, provided the third party shall have
agreed to use personally identifiable Subscriber data for no other purpose.
6. Compensation
6.1 Costs. Each party will bear its own costs in performing this
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Agreement.
6.2 Revenue Sharing. Health Category revenue received by either party as
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well as any revenue received by McKesson for Content offered using the Licensed
Software on McKesson's servers running the AvantGo Software (collectively, the
"Shared Revenue") will be divided by the parties as set forth on Exhibit 6.2.
Shared Revenue shall include, but shall not be limited to: slotting fees,
advertising, sponsorship fees, Content placement fees, shares of online commerce
revenues from providers of content or Channel subscription fees. Notwithstanding
the foregoing to the contrary, Shared Revenue shall not include revenue arising
from the sale of goods or services (other than webcasting services) in the
course of business by McKesson (including without limitation distribution of
pharmaceuticals or medical-surgical supplies, sale or distribution of McKesson's
proprietary software, information systems outsourcing, claims processing, or
revenue from the operation of McKesson-owned applications) whether or not such
activities are performed using the Licensed Software. For this calculation,
revenue includes all money and the monetary equivalent of non-monetary
consideration actually received. A party will notify the other any time payment
is to be in the form of non-monetary consideration, it shall
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obtain prior agreement of the other party as to the value of the non-monetary
consideration for revenue sharing hereunder, and shall pay the other its
proportionate share in money.
6.3 Payment Terms. Shared Revenue payments will become due for each
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calendar month during which a party receives revenue. AvantGo will report
advertising and other revenue received on account of the Health Category no
later than the 15th day of the following month. By the end of that following
month McKesson will report to AvantGo the total Shared Revenue received by the
parties and the revenue share amount due from McKesson to AvantGo, which payment
will accompany the report. If for any month the net amount of Shared Revenue is
an amount payable by AvantGo to McKesson, then promptly upon receiving the
McKesson report (but in no event more than 30 calendar days thereafter) AvantGo
will remit the amount due. Each party's report will show the nature and source
of revenues, identify the name and date of the contract which gives rise to the
fee payment from the third party and such other detail as the patties agree, but
in any case reasonable detail. Payments not made when due will bear interest
until paid at the lesser rate of 1.5% per month or the maximum rate allowed by
law.
6.4 Audit Rights. Either party may audit the relevant books and records of
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the other party necessary for determining revenue and amounts payable in
connection with this Agreement for any period not previously audited. The audit
will be by nationally recognized auditors reasonably acceptable to the other
party. Any such audit will be subject to reasonable notice given to the party
being audited. The audit will take place during the audited party's normal
business hours and will be conducted in a manner that minimizes disruption to
the audited party's normal business activities. The audited party will provide
reasonable facilities for the audit or allow the original books and records to
be taken off premise by the auditors or copied and taken off premises for the
limited purpose of the audit. The audited party may condition the audit upon
receiving the auditors' written promise in a form acceptable to the audited
party that information discovered in the course of the audit will be kept
confidential and only the amount of any overpayment or underpayment will be
disclosed to the auditing party. The auditing party will bear the cost of the
audit. However, if the audit discloses any underpayment of five percent (5%) or
more for the audit period, then the audited party will pay the reasonable costs
of the audit within forty five (45) days after receipt of invoice and reasonable
cost documentation from the auditing party. Each party will keep records and
books of account for at least three (3) years from the date of the relevant
recordable event.
7. Confidential Information
7.1 Nondisclosure. Each party (i) will not use or disclose to any third
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party the other's Confidential Information except as expressly permitted in this
Agreement, and (ii) will take all reasonable measures to maintain the
confidentiality of the other party's Confidential Information in its possession
or control, but in no event less than the measures it uses to maintain the
confidentiality of its own information of similar importance.
7.2 Legal Process. If a party is required by subpoena or other mandatory
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process to disclose Confidential Information of the other party, it will give
the other party a copy of the process promptly upon receipt and cooperate with
the other party, at that party's expense, in reasonable efforts to defend
against disclosure.
7.3 Copies of Content Provider Agreements. Within 30 days of execution of
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any Content Provider agreement, McKesson will deliver a copy to AvantGo. The
Content Provider agreement will be Confidential Information under this
Agreement.
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8. Warranties and Disclaimers
8.l McKesson Warranties. McKesson warrants and represents that: (i) it has
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sufficient authority to enter into this Agreement; (ii) all materials
originating with McKesson or identified by McKesson as "McKesson Content" and
delivered by McKesson to AvantGo, excluding content provided by AvantGo
(directly or through third parties), are owned or licensed by McKesson and do
not infringe the copyright, trademarks or service marks of any third party;
(iii) McKesson will not knowingly upload or permit or authorize any upload of
any messages, data, images or programs to the Health Category that would violate
the property rights of others, including unauthorized copyrighted text, images,
programs or trade secrets or other confidential and/or proprietary information,
or trademarks or service marks used in an infringing fashion; and (v) the
McKesson Content, to the best of McKesson's knowledge, is factually accurate and
does not contain any information, instruction or formula that might be injurious
to anyone's physical well-being, and that it does not, and its use by AvantGo as
permitted in this Agreement will not, defame or disparage any third party.
AvantGo's sole and exclusive remedy with respect to item (ii) relating to
materials McKesson obtains from third parties is to obtain such relief as is
actually obtained from the third party, up to the actual damages actually
suffered by the party seeking recovery from AvantGo and AvantGo's defense costs,
and McKesson will make diligent efforts to obtain appropriate relief.
8.2 AvantGo Warranties. AvantGo warrants and represents that: (i) it has
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sufficient authority to enter into this Agreement; (ii) all materials delivered
by AvantGo to McKesson, excluding Content provided by McKesson (directly or
through third parties), ("AvantGo Content") are owned or licensed by AvantGo and
do not infringe the copyrights, trademarks or service marks of any third party;
(iii) to the best of its knowledge, any and all actions occurring on or through
the AG Site and the AG Service are in compliance with all applicable laws; (iv)
as of the Effective Date the AG Service has approximately 350,000 registered
Subscribers; and (v) AvantGo has submitted its privacy statement for review and
approval by the TRUST-E privacy program, and, once approved, AvantGo shall
remain in good standing or be a member in good standing of another industry-
recognized online privacy organization throughout the term of this Agreement.
McKesson's sole and exclusive remedy with respect to item (ii) relating to
materials AvantGo obtains from third parties is to obtain such relief as is
actually obtained from the third party, up to the actual damages actually
suffered by the party seeking recovery from McKesson and McKesson's defense
costs, and AvantGo will make diligent effort to obtain appropriate relief.
8.3 Disclaimers. Except as expressly set forth in this section 8, NEITHER
-----------
PARTY MAKES, AND EACH PARTY SPECIFICALLY DISCLAIMS, ANY WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO THE CONTENT OR OTHERWISE UNDER THIS AGREEMENT,
INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
TITLE AND NONINFRINGEMENT, AND WARRANTIES IMPLIED FROM COURSE OF DEALING OR
PERFORMANCE.
9. Indemnification. In this section "Protected Materials" means for AvantGo the
AG Site, AvantGo's trademarks, the technology used by AvantGo to create the AG
Service, and the "look and feel" and other aspects of the AG Service itself; and
for McKesson, the McKesson Marks and the McKesson Content. Each party (an
"Indemnifying Party") will indemnify, defend and hold harmless the other party,
its affiliates, officers, directors, consultants and employees (collectively,
"Protected Parties") from any and all liability, damages and/or costs (including
but not
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limited to, reasonable attorney's fees and litigation costs) of third party
claims arising from (i) the Indemnifying Party's breach of any representation or
covenant in this Agreement; (ii) any claim that the Protected Materials infringe
or violate the intellectual property rights of a third party; (iii) any claim
that the Protected Materials contain any false, deceptive, defamatory, or
obscene material; or (iv) failure of the AG Site and the AvantGo software used
to create and operate the AG Site to comply with applicable law and regulations.
A Protected Party's sole and exclusive remedy with respect to Protected
Materials the Indemnifying Party obtains from third parties is to obtain such
relief as is actually obtained from the third party, up to the actual damages
actually suffered by the party seeking recovery from the Protected Party and the
Protected Party's defense costs, and the Indemnifying Party will make diligent
efforts to obtain appropriate relief. A Protected Party will provide (x) prompt
notice of any such claim, (y) the Indemnifying Party sole control over the
defense and settlement of the claim, and (z) reasonable cooperation and
assistance to the Indemnifying Party, at the Indemnifying Party's expense, to
defend and/or settle the claim. The Protected Party nevertheless reserves the
right to control any such defense if it believes that its rights are not being
effectively protected.
10. Publicity
10.1 Press Release. The parties will promptly prepare a joint press
-------------
release announcing the general terms of their relationship, including the
Amendment to License Agreement and the "Schedule D-2" Statement of Work (both
relating to that certain License Agreement effective October 1, 1998, and both
executed on or about the execution date of this Agreement). The joint press
release will be released at such time as the parties mutually agree. No other
announcements will be made concerning this Agreement except as the parties
otherwise mutually agree.
10.2 Marketing. Each party will cooperate with reasonable efforts by the
---------
other to market and advertise the Health Category. Neither party will use the
other's name or logo without prior approval of the named party.
11. Limitation of Liability
11.1 Limitation. NEITHER PARTY WILL BE LIABLE FOR ANY SPECIAL, INCIDENTAL,
----------
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND IN CONNECTION WITH THIS
AGREEMENT, INCLUDING BUT NOT LIMITED TO LOST PROFITS, EVEN IF THE PARTY HAS BEEN
ADVISED IN ADVANCE THAT SUCH DAMAGES ARE POSSIBLE. A PARTY'S LIABILITY WILL NOT
EXCEED [******]. THIS LIMITATION WILL APPLY EVEN IF ANY REMEDY PROVIDED IN THIS
AGREEMENT SHOULD FAIL OF ITS ESSENTIAL PURPOSE.
11.2 Exclusion. The provisions of this section 11 do not apply to claims
---------
arising under section 9 ("Indemnification") subpart (ii) at all, nor do they
apply to subparts (i), (iii), (iv) or (v) to the extent Protected Materials are
obtained by either party, in whole or in part, from third parties and such party
actually obtains relief for claims related to the subject matter of these
subparts.
****** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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12. Term and Termination
12.1 Initial and Renewal Term. This Agreement will be in effect for
------------------------
three (3) years starting on the Effective Date. It will thereafter be renewed
for two successive one year renewal terms, unless McKesson in its sole
discretion gives written notice of nonrenewal at least 90 days prior to the end
of the then-current term.
12.2 Termination for Insolvency. This Agreement will terminate
--------------------------
automatically, with no further action of either party, if a party is adjudicated
bankrupt, files a voluntary petition of bankruptcy, makes a general assignment
for the benefit of creditors, is unable to meet its obligations in the normal
course of business or if a receiver is appointed on account of a party's
insolvency.
12.3 Termination for Breach. Either party may terminate this Agreement
----------------------
upon a material breach by the other, by thirty days' prior written notice to the
breaching party, which describes the breach in reasonable detail. The notice
will become ineffective and the Agreement will remain in effect if the breach is
cured before the end of the notice period.
12.4 Effect of Termination. Upon termination of this Agreement for any
--------------------
reason, all rights and obligations of the parties will cease, except as provided
in this section and section 12.5. Any agreements with Content Providers will
continue in effect until they expire (the "Continuing Agreement"), but in no
event more than one year after termination of this Agreement. During that time
the parties will continue to perform as required by this Agreement but solely
with respect to the Continuing Agreements. Revenue relating to the Continuing
Agreements will be shared by the parties in such proportion as was in effect on
the day of termination.
12.5 Survival. Sections 1, 5, 8, 9.1, 11, 12.5 and 13 will survive any
--------
termination of this agreement.
13. General Provisions
13.1 Assignment. This Agreement will be binding on and inure to the
----------
benefit of the parties and their respective heirs, successors, assigns and legal
representatives. Neither party may assign this Agreement other than to a
subsidiary or affiliate without the other party's prior written consent, given
in its sole discretion. Assignment by operation of law is an assignment within
the meaning of this section. Any attempted assignment prohibited by this section
is void. A party may not unreasonably withhold its consent to assignment of this
Agreement in the event of a merger, consolidation, any sale of all or
substantially all of the other's assets or any other transaction in which more
than fifty percent (50%) of the other's voting securities are transferred,
provided that no consent will be required in the event the shares of a
subsidiary or affiliate to which this Agreement has been assigned are
distributed to the shareholders of a party.
13.2 Entire Agreement. This Agreement is the entire agreement between the
----------------
parties with respect to its subject matter, and supersedes all prior agreements
and understandings with respect to its subject matter.
13.3 Governing Law. This Agreement will be governed by California law
-------------
without reference to its conflicts of law principles. All disputes in connection
with this Agreement will be subject to the exclusive jurisdiction of and venue
in the federal and state courts located in San Francisco, California. Each party
hereby consents to the personal and exclusive jurisdiction and venue of these
courts.
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13.4 Severability. If any provisions of this Agreement are found invalid
------------
by a tribunal of competent jurisdiction, they are to that extent deemed omitted.
13.5 Modification and Waiver. Neither waiver of any particular breach or
-----------------------
default, nor any delay in exercising any rights, will constitute a waiver of any
subsequent breach or default. This Agreement may be amended only by a writing
signed by both parties.
13.6 Consent and Approval. Whenever this Agreement requires a party's
--------------------
consent or approval, it will not be unreasonably withheld or delayed.
13.7 Notices. Notices permitted or required in this Agreement will be in
-------
writing and considered effective (i) when delivered in person, (ii) the day
after they are given prepaid to a nationally recognized overnight delivery
service, or (iii) 5 business days after they are mailed first class, registered
or certified mail, postage prepaid, in each case to the address of the party
first specified in this Agreement or such other address as either party may
furnish by notice.
13.8 Force Majeure. Neither party will be responsible for any failure to
-------------
perform its obligations under this Agreement due to reasons beyond its
reasonable control, such as acts of God, war, riot, embargoes, earthquake, acts
of civil or military authorities, service outages resulting from equipment
and/or software failure and/or telecommunications failures, power failures and
network failures. If a party's performance will be delayed by a force majeure
event, it will notify the other in writing with an estimate of the date by which
its performance will be resumed, and will diligently attempt to resume its
performance. If the delay in performance extends for more than 30 days, the
other party may by written notice terminate this Agreement.
13.9 Independent Contractors. Notwithstanding any use of the term
-----------------------
"Partner" in this Agreement or in marketing materials, the relationship of
AvantGo and McKesson is that of independent contractors. Nothing in this
Agreement (i) gives either party the power to direct or control the day-to-day
activities of the other, (ii) constitutes the parties as partners, joint
venturers, co-owners or otherwise as participants in a joint undertaking, or
(iii) permits a party to create or assume any obligation on behalf of the other
for any purpose whatsoever.
13.10 No Third Party Beneficiaries. This Agreement is intended for the
----------------------------
sole and exclusive benefit of the signatories and is not intended to benefit any
third party except as provided in section 2.1.3. Only the parties to this
Agreement may enforce it.
13.11 Headings. Headings and titles in this Agreement are intended for
--------
convenient reference only and do not describe the sections to which they relate.
13.12 Counterparts. This Agreement may be executed in counterparts, each
------------
of which will be deemed an original and all of which together constitute one
instrument.
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<PAGE>
IN WITNESS WHEREOF the parties have executed this Agreement as of the
Effective Date.
McKesson HBOC, Inc. AvantGo, Inc.
By: /s/ William J. Dawson /s/ Tom Hunter
--------------------- ---------------------
William J. Dawson Tom Hunter
------------------------- ---------------------
Typed or Printed Name Typed or Printed Name
Senior Vice President CFO
---------------------------- ---------------------
Title Business Development Title
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Exhibit 2.1.3
-------------
Content Provider Terms
MINIMUM OBLIGATIONS OF CONTENT PARTNER AND AVANTGO IN CONTENT PARTNER AGREEMENTS
Definitions (need to be substantially similar to the following).
--------------------------------------------------------------
"Channel" means web pages that are delivered via the Service to an End User's
-------
Handheld Device when the Handheld Device is connected wirelessly, connected
through synchronization with such End User's desktop computer or through any
other means.
"Confidential Information" of a party means any information, including
-------------------------
information about technologies, content partners, business strategies,
distribution activities, product features, demographics, and usage patterns,
disclosed by that party to the other pursuant to this Agreement which is marked
or indentified orally as being "Confidential" or "Proprietary."
"Content" means WWW content which conforms to the Style Guide, which is
-------
developed by the Content Partner for delivery through the Channel, and which is
described in detail on Exhibit A.
---------
"Content Partner WWW Site" means the WWW site owned or controlled by Content
------------------------
Partner. The URL for the Content Partner WWW Site is set forth on Exhibit A.
---------
"End User" means any party that uses a Handheld Device and accesses the Service.
--------
"Handheld Device" means any device that is able to receive or store information
---------------
including, but not limited to, Palm OS devices, Windows CE devices, Cell Phones,
Pagers, Smartphones and other devices, whether wireless, wireline or requiring
cradle synchronization.
"Licensed Materials" means the AvantGo trademarks and Icons (as defined in
------------------
Section 2.2(ii) below).
"Service" means the service provided by AvantGo to users of Handheld Devices
-------
facilitating the delivery of Content to users.
"Style Guide" means the AvantGo guide which specifies guidelines and procedures
-----------
for developing WWW content which is optimized for the small graphics display of
Handheld Devices, a copy of which is located at http://corp.avantgo.com/
-----------------------
DevCorner/StyleGuide/ and is incorporated herein by reference.
---------------------
"WWW" means the part of the Internet commonly known as the World Wide Web.
---
OBLIGATIONS/ACKNOWLEDGEMENTS OF CONTENT PARTNER:
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<PAGE>
. Content Partner grants AvantGo a nonexclusive, non-transferable, revocable,
worldwide license to:
. use, copy (including, without limitation, caching for performance
purposes), perform, display and redistribute to End Users the
Content solely for purposes of providing the Service.
. use Content Partner's trademarks, trade names and logos set forth on
Exhibit A (the "Content Partner Trademarks") solely in connection with
--------- --------------------------
the display of the Channel through the Service and the marketing of
the Content and AvantGo products, including the Service.
. allow End Users to copy and use the Content on such End User's
Handheld Device solely for personal use
. Designate a single technical contact and marketing contact. Provide all
information in Exhibit A.
. Content Partner shall provide AvantGo thirty (30) days advance written
notice prior to changing the Content if the revised Content will
substantially differ from the description set forth on Exhibit A. Content
---------
Partner will be solely responsible for developing and formatting the
Content in strict conformance with the Style Guide:
. Exclusive Channel Access. Content Partner represents and warrants that the
------------------------
html pages to be accessed by the Service will only be accessible by the
AvantGo Interactive Service and by no other third party.
. Subscribing to Channel. Content Partner shall conspicuously display and use
----------------------
the AvantGo Icons on the Content Partner WWW Site home page to enable End
Users to subscribe to Content Partner's Channel. Content Partner will allow
End Users to link to a page that describes Content Partner's Channel,
enables existing AvantGo users to subscribe to the Channel, and enables
individuals to sign up for AvantGo.
. Banner Ads. Content Partner shall promote its Channel via Banner Ads on the
----------
Content Partner's Web Site.
. Press Release: Content Partner shall issue a press release including
--------------
reference to AvantGo agreeable to McKesson and AvantGo within 30 days of
the signing the agreement.
. Linking: AvantGo will have obligation to list, and will have the right to
-------
remove from such list, in AvantGo's sole discretion, Channels with content
which does not conform to the Style Guide; provided, however, that prior to
such removal, AvantGo will notify Content Partner in writing, and Content
Partner will have thirty (30) days to conform the Channel to the Style
Guide. AvantGo may restrict or prevent access to the Content (and, at
AvantGo's option, immediately terminate this Agreement), if AvantGo
believes, in its sole discretion, that all or any portion thereof; (i)
promotes or contains any information or content, including but not
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<PAGE>
limited to visual images, that is unlawful, false or misleading or that
promotes illegal conduct or purposes; (ii) promotes bigotry, racism,
hatred, or harm of any kind against any group or individual; (iii) is or
could be in any way harmful to minors; (iv) is harassing, libelous, invasive
of another's privacy, abusive, threatening, vulgar, obscene, tortious, or
otherwise objectionable, or that infringes or may infringe the intellectual
property or other rights of another; or (v) involves the transmission of
"junk mail", "spam", "chain letters", or unsolicited mass distribution of
email.
. AvantGo shall own all right, title and interest in and to the Licensed
Materials. Content Partner shall not challenge AvantGo's ownership of such
Licensed Materials or related intellectual property rights.
. Confidential Information provided by AvantGo to Content Partner shall be
treated as such, whether disclosed verbally or in writing. Any breach of
this obligation will cause irreparable harm to AvantGo and shall entitle
AvantGo to injunctive relief in addition to all legal remedies.
. Representations and Warranties (this can be made reciprocal): Content
-----------------------------------------------------------
Partner represents and warrants:
. it has the full corporate right, power and authority to enter into
this Agreement and to perform the acts required of it hereunder;
. its Trademarks do not infringe any third party trademark rights;
. it has not granted any rights with respect to the Content or its
Trademarks to any third party which grant is inconsistent with the
rights granted to AvantGo in this Amendment.
. Indemnity. Content Partner will indemnify, defend and hold harmless AvantGo
---------
and it's other Content Partners, and their respective subsidiaries,
affiliates, directors, officers, employees and representatives from any and
all liabilities, losses, expenses (including reasonable attorney's fees),
costs and damages of any kind arising out of or relating to any third party
claim that the Content or Content Partner Trademark violates, infringes or
misappropriates such third party's intellectual property rights or other
legal rights.
. Disclaimer of Warranties Licensed Materials are "AS IS"
------------------------
OBLIGATIONS/ACKNOWLEDGEMENTS OF AVANTGO:
. AvantGo grants the Content Partner a nonexclusive, non-transferable,
revocable, worldwide license to (i) use the "Download AvantGo" icon on the
Content Partner WWW Site to link WWW users to an AvantGo WWW Site where such
users may download AvantGo software and (ii) use the "Subscribe to Channel"
icon on the Content Partner WWW Site to enable End Users to subscribe to the
Content Partner WWW Site as a Channel (collectively the "AvantGo Icons").
-------------
AvantGo will supply technical information concerning the required links.
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<PAGE>
Content Partner shall comply with any usage guidelines which may be
provided by AvantGo from time to time. Content Partner shall not challenge
AvantGo's ownership of such AvantGo Icons or use or adopt any trademarks
which might be confusingly similar to such AvantGo Icons.
. User Reporting. At Content Partner's request, AvantGo will provide Content
--------------
Partners with the total number of unique users currently subscribed to
Content Partner's Channel at each calendar month-end. If Content Partner
requests additional information, add "together with such other information
Content Partner reasonably requests which is available to AvantGo on
similar terms and conditions offered to other Content Partners in general.
. Technical Support. AvantGo will provide electronic mail support with
-----------------
respect to the development of Content to the Technical Contact. AvantGo
will use its commercially reasonable efforts to respond to all electronic
mail requests received during normal business hours within twenty-four (24)
hours. AvantGo will provide additional support to Content Partners, in
AvantGo's sole discretion, subject to AvantGo's then-current time and
materials rates.
OBLIGATIONS/ACKNOWLEDGEMENTS OF CONTENT PARTNER AND AVANTGO:
. Limitations of Liability. Except for third party IP claims or breach of
------------------------
confidentiality claims, neither party is liable for LOST PROFITS, LOSS OF
BUSINESS, INTERRUPTION OF BUSINESS, LOSS OF USE, OR LOSS OF DATA, OR FOR
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY
DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER CONTRACT,
TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, UNDER OR ARISING OUT OF THE
AGREEMENT. AVANTGO'S MAXIMUM LIABILITY FOR ANY CLAIM SHALL BE THE GREATER
OF $10,000 OR THE AMOUNTS AVANTGO HAS RECEIVED IN CONNECTION WITH THIS
AGREEMENT OVER THE 1 YEAR PERIOD PRECEDING THE EVENT GIVING RISE TO
LIABILITY. Revenue received by AvantGo will be allocated based on the
parties respective share of total revenue for the contract year in which
the event giving rise to liability occurred.
. Term. 1 year with additional successive one (1) year renewal periods.
----
. Termination. Either party may terminate upon 45 days advance written notice
-----------
to AvantGo.
EXHIBIT A
---------
1. Content Partner Trademarks.
--------------------------
2. Technical Contact (please include email, phone, fax and mailing address).
------------------------------------------------------------------------
3. Marketing Contact (please include email, phone, fax and mailing address).
------------------------------------------------------------------------
4. Description of Channel(s)
----------------------
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5. Content Partner WWW Site.
------------------------
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<PAGE>
Exhibit 6.2
-----------
Compensation
The first $[*} million in Shared Revenue received since the Effective Date, net
of McKesson's bona fide out of pocket expenses, but in no event less than [*]%
of the first $[***] million in Shared Revenue, will all be paid to and retained
by AvantGo. Following such payment, all Shared Revenue will be split [*]% to
McKesson and [*]% to AvantGo.
Page 20