THIRD AMENDED AND RESTATED NAME AND LIKENESS AGREEMENT
This THIRD AMENDED AND RESTATED NAME AND LIKENESS AGREEMENT (this
"Agreement") is made and entered as of May 1, 2001 (the "Effective Date") by and
between C. Everett Koop, M.D. ("Koop") and drkoop.com, Inc., a Delaware
corporation ("DKC" or the "Company").
A. On January 5, 1999, Koop and DKC entered into a predecessor to this
Agreement for the purpose of conveying to DKC certain rights to use the name,
likeness and other attributes of Koop (the "January Agreement").
B. On August 30, 1999, Koop and DKC entered into an amendment and
restatement of the January Agreement that superceded such agreement in all
respects (the "August Agreement").
C. On June 22, 2000, Koop and DKC entered into an amendment and
restatement of the August Agreement that superceded such agreement in all
respects (the "June 2000 Agreement").
D. The parties, by entering into this Agreement, intend to supersede the
June 2000 Agreement in all respects and, from and after the date hereof, to have
this Agreement replace such June 2000 Agreement.
NOW THEREFORE for and in consideration of the premises, and the mutual
covenants and promises herein set forth, the parties hereto hereby agree as
1. Term and Termination: The term of this Agreement (the "Term") will
begin on the Effective Date hereof and will extend for an initial term of seven
years. Unless otherwise terminated as provided for below, the Agreement will
automatically renew thereafter for consecutive five-year terms (each a "Renewal
Term"). The Agreement may be terminated by either party upon written notice
given not more than 270 and not less than 180 days before the expiration of any
Renewal Term; provided that Koop shall not have the right to terminate this
Agreement pursuant to this sentence unless Koop also has the right to terminate
this Agreement under Section 6 at the time of any notice not to renew provided
by Koop pursuant to this sentence. This Agreement may also be terminated by
either party in the event of a material breach or default by the other party as
specified in Section 6. Provided termination is not the result of (i) a material
breach or default by DKC that is not cured after written notice as provided in
the immediately preceding sentence, or (ii) a termination of this Agreement by
operation of Section 16, DKC shall have the right for five (5) years following
termination to use the Koop Name (the "Rebranding Period"). During the
Rebranding Period, the Company's right to use the Koop Name shall be
non-exclusive except that (i) such usage shall be exclusive with respect to any
products or services involving or related to medical and health information, or
healthcare and/or wellness related services, products and/or commerce and (ii)
the Koop Name may not be licensed and no rights in the Koop Name may be
otherwise granted, transferred or conveyed to any Direct Competitor of DKC as
identified on Attachment B. In the event that termination occurs as a result of
a material breach or default by DKC that is not cured after written notice as
provided herein, all rights to use the Koop Name (as defined below) shall cease
on the ninetieth (90th) day after such termination and if this Agreement is
terminated pursuant to Section 16 no Rebranding Period shall exist.
2. Right To Use Services: During the Term and subject to all other
provisions of this Agreement, Koop agrees that DKC shall have the right to use
Koop's name, image or likeness (hereinafter the "Koop Name"), to file
applications for registration and obtain registrations involving the Koop Name
and to sublicense the Koop Name, in each case in connection with the Company's
medical and health information network and medical, healthcare and/or wellness
related services, products and/or commerce (collectively, the "Products") in
accordance with Section 5 below. In addition, in consideration of the fees
contemplated by clauses (Y) and (Z) of Section 3, Koop agrees to use his best
efforts to work with DKC in promoting the Products in a variety of media,
including but not limited to personal appearances on selected national and/or
local network television and/or radio shows, contributions to written
publications, etc. (e.g., Oprah Winfrey Show, Dateline, Larry King Live, Time,
3. Fees and Payment: For all rights and privileges and services rendered
or provided for hereunder by Koop, DKC has granted to Koop, pursuant to the
general terms of the applicable stock option plan, options to purchase 214,400
shares of the common stock of DKC for an exercise price of $17.88 per share (the
"August Options") and has made an additional one-time grant of options to
purchase 1,000 shares of the common stock of DKC for an exercise price of $1.50
per share (the "2000 Options"). The (a) August options will continue to vest on
the existing vesting schedule which commenced in August 1999 (i.e., become
exercisable) at a rate of 8,933.33 options per month (subject to adjust for
stock splits and similar matters) provided that at the end of each such month
this Agreement shall remain in full force and effect; provided, however, that
all such options shall vest and become exercisable at such time as this
Agreement shall be terminated due to the material breach of this Agreement by
DKC in accordance with the default provisions contained in Sections 1 and 6 and
(b) the 2000 Options shall be vested immediately upon execution hereof. The
foregoing options have been approved by a compensation committee consisting
solely of non-employee directors, or by the full board of directors of DKC (with
Koop abstaining), for purposes of Rule 16b-3 under the Securities Exchange Act.
The parties acknowledge that the January Agreement provided for a continuing
royalty on DKC revenue and expressly acknowledge that the obligation of DKC to
pay, and the right of Koop to receive, any such royalty was terminated effective
July 1, 1999. Notwithstanding the foregoing, and in consideration of the
aforementioned services to be rendered by Koop, DKC shall pay Koop the
Y) the lesser of (i) 5% of net cash revenues derived by DKC or
(ii) $0.20 per product sold by DKC which bears the Koop Name (or by a third
party from which DKC derives revenues which respect to such sale), in each case
from sales of only those Products identified in Attachment C, payable quarterly
no later than 45 days following the end of each fiscal quarter with respect to
cash received by DKC in the preceding fiscal quarter; and
Z) a $20,000 monthly consulting fee, payable on the fifteenth
(15th) day of each month, beginning on or about the fifteenth (15th) day after
the Effective Date. Said consulting fee shall terminate upon the death or
incapacity of Koop.
4. Competitive Protection: Effective as of the date of this Agreement
and continuing throughout the Term, Koop agrees that Koop will not render
services in the form of advertising and/or publicizing of any items, products or
services of any Direct Competitor, including but not limited to those entities
identified on Attachment B, which DKC may amend from time to time, nor will Koop
permit or authorize the use of the Koop name and/or likeness (photograph and/or
drawing), voice, signature and/or endorsement, by any Direct Competitor, except
as may be used for the non-profit, non-commercial activities of the Koop
Institute; provided such activities are not related in any way to the promotion
of items, products or services of any Director Competitor. For purposes of this
Agreement, "Direct Competitor" shall refer to any business entity that develops
items, products or provides services relating to: (i) online health and wellness
information; (ii) corporate wellness and fitness programs; or (iii) home health
Without limiting the generality of the foregoing, Dr. Koop shall not
directly or indirectly participate in the development, production or promotion
of any competitive Products or the products or services of any Direct Competitor
during the Term of this Agreement or any renewal term or during the Rebranding
Period, if any.
5. Right of Review: The following elements of each Product shall be
subject to Koop's prior review and written approval, which approval shall not be
unreasonably withheld and shall be rendered within ten (10) working days of
receipt of the element of the Product. Koop shall have the right to delegate his
approval rights hereunder to a Representative (as defined in Section 10 below)
with the approval of DKC, such approval not to be unreasonably withheld. In the
event DKC does not receive notice of Koop's disapproval within ten (10) working
days of Koop's receipt of DKC's request for approval of an element of a Product,
said element shall be deemed approved.
(i) Content and format, including manuscripts and other written
materials included with the Products, including drafts, and the final version.
(ii) Extent and content of all medical and technical information.
(iii) Professional medical consultants and advisors.
(vi) Means of advertising, promoting and selling the product,
including the Koop Name.
(vii) All advertising and promotional materials created,
developed or used in connection with the Products.
(viii) Any use not expressly contemplated by this Agreement.
DKC and Koop shall work together to establish systems and
procedures for updating the Products based on advances in the field of medicine.
6. Default Provisions:
(a) In the event that either party ("Defaulting Party")
(i) Materially defaults in the performance of any of its
duties or obligations set forth in this Agreement and such default is not
substantially cured within thirty (30) days after written notice is received by
the other party specifying the default; or
(ii) Defaults in the payment of any amount due to the
other party under this Agreement (if any) or in the case of DKC the performance
of its obligations under any stock option which default is not cured within
thirty (30) days after written notice is received by the other party specifying
the default ; and
(iii) Provided, that upon a default under Section 6(i)
and/or (ii) by one party under this Agreement, the cure period for the next
default by such party shall be reduced (but not below ten days) by ten (10)
Then the other party may, by giving written notice to such effect to the
Defaulting Party, terminate this Agreement as of the date specified in such
notice of termination.
(b) Notwithstanding anything to the contrary herein contained,
the termination of the Agreement shall not relieve the parties of their
obligations existing at or prior to termination.
7. Obligations Limited to Payments: The obligations of DKC to Koop
hereunder shall be fully performed and discharged as stipulated in Section 3,
except for those obligations that arise pursuant to the provisions for
indemnifications contained in Section 9. It is understood that Koop is not an
employee of DKC and shall not be entitled to any rights or benefits granted to
employees of DKC by reason of the rendering hereunder of services by Koop.
8. Covenants Regarding Public Image: DKC and Koop each covenants and
agrees that it will not knowingly permit, do or commit any act or thing that
would degrade, tarnish or deprecate or disparage the other party or the public
image of the other party in society or standing in the community, or prejudice
the other party, and that it will terminate such activities promptly upon
notice, it being understood that this Section 8 shall not apply to any dispute
involving this Agreement between Koop and DKC.
9. Indemnity: DKC agrees to indemnify and hold harmless Koop, his
employees, assignees, and heirs against any and all claims, damages, liabilities
(including, but not limited to, liability for personal injury and liability for
breach of confidentiality), costs and expenses, including without limitation,
reasonable legal fees and costs arising out of the use of any material furnished
by DKC in connection with the services performed, or resulting from any patient
third party action arising from the activities of DKC or resulting in any way
from the sale of Products pursuant to this Agreement, or incurred for or by
reason of the breach by DKC of any of its obligations, warranties, agreements,
covenants or representations herein contained. Koop shall provide prompt written
notice of any claim hereunder and DKC shall have the right to defend same.
10. Incapacity or Death of Koop. Except as otherwise provided herein,
the rights granted to DKC herein are intended to survive the incapacity or death
of Koop. Upon the occurrence of any such event, all actions with respect to Koop
hereunder, including without limitation the approval rights provided in Section
5, shall be exercisable on behalf of Koop by another person (the
"Representative"), who, at the execution date of this agreement, is hereby
designated by Koop to be his son: Alan Koop, and, in the event of Alan Koop's
death, to be Koop's granddaughter: Dr. Jennifer Koop.
If prior to the death of Koop, he is pronounced to be incapacitated
(i.e., as being incapable of managing or conducting his own business affairs due
to physical or mental infirmity) by his Representative and Koop's son-in-law:
Gordon Thompson (such determination to be made only in association with a
physician chosen by and mutually acceptable to DKC and the Representative), then
said Representative shall thereafter and for so long as Koop is incapacitated
have full right to take any and all acts on behalf of Koop hereunder.
Any Representative appointed in accordance with this Section 10 shall
have full right to take any and all acts on behalf of Koop hereunder and DKC may
rely on such acts as the lawful and duly authorized acts of Koop.
11. Notices: Any notice or other communication (including payment
hereunder) required or permitted to be given hereunder shall be in writing and
shall be hand delivered or sent next-day delivery by a company where a receipt
is given to the address as follows:
To DKC: drkoop.com, Inc.
Attention: Legal Department
225 Arizona Avenue
Santa Monica, CA 90401
To Koop: C. Everett Koop, M.D.
Koop Institute at Dartmouth
Hanover, NH 03755
C. Everett Koop, M.D.
3 Ivy Pointe Way
Hanover, NH 03755
Any such notice, direction or other instrument aforesaid, if delivered,
shall be deemed to have been given or made on the date on which it was delivered
or if sent next-day delivery shall be deemed to have been given or made on the
day following the day on which it was sent provided that any one of the parties
hereto may change its address by written notice to the other according to the
terms hereof and in such event this paragraph shall be deemed to be amended
12. Informed Consent, Confidentiality and Security: DKC represents and
warrants that when and if it introduces a program identified here as "Personal
Medical Records" that it will obtain appropriate and fully informed patient
consent to the receipt, retention, use and transfer of that patient's personal
or medical data and that such informed consent complies with all applicable
federal, state and local laws and regulations. DKC further represents and
warrants that it shall take reasonable precautions to assure accuracy of and to
protect against negligent disclosure of and unauthorized access to all patients'
personal and medical data.
13. Other Representations and Warranties:
By DKC: DKC represents and warrants that:
1. It has the right to enter into this Agreement and that it
is free to grant the rights granted herein.
2. The Products (excluding the Koop Name) will not infringe
the patent, copyright, trade secret, or property rights of
any third party.
3. All aspects of the product, distribution and promotion of
the Products (excluding the Koop Name) shall comply in all
material respects with all applicable laws and
4. It is not a party to any agreement that will be breached
by or that prohibits it entering into or performing this
By Koop: Koop represents and warrants that:
1. He has the right to enter into this Agreement and that it
is free to grant the rights granted herein.
2. He is not a party to any agreement that will be breached
by or that prohibits it entering into or performing this
3. DKC may apply for trademarks that incorporate the Dr. Koop
4. He has not granted the rights granted herein to any other
14. Trademark Assignment and License: Upon termination of this Agreement
and expiration of the Rebranding Period (if any), DKC shall assign its right,
title and interest in and to the Koop Name including the goodwill contained
therein to Koop. Except as set forth herein, DKC acknowledges that it has no
rights in the Koop Name and that nothing contained in this Agreement or in any
other document shall vest any ownership rights in the Koop Name.
(a) Ownership and Publicity: Except as granted herein, DKC does
not and may not claim any right, title or interest in or to Koop's name or
likeness, and acknowledges that all rights therein are and remain the property
(b) Insurance: Prior to sale, promotion or distribution of any
Product other than reasonable, limited test marketing, DKC shall secure all
necessary and customary insurance, including a standard comprehensive general
liability insurance policy providing standard product liability protection,
directors and officers insurance and errors and omissions insurance listing Koop
as a named insured. Such insurance shall be in a form reasonably acceptable to
counsel for Koop and shall require the insurer to give Koop at least thirty (30)
days' prior written notice of any material modifications or cancellations.
(c) Entire Agreement: This Agreement constitutes the complete and
exclusive statement of the agreement between Koop and DKC with respect to the
subject matter herein set forth and supersedes all prior agreements by and
between the parties including, specifically, the January Agreement.
(d) Amendments: This Agreement may not be amended, altered or
terminated except in writing executed by or on behalf of each party.
(e) Inurement: This Agreement shall be binding upon the parties
hereto and their respective heirs, executors, administrators, legal
representatives, successors and permitted assigns.
(f) Language: The language used in this agreement shall be deemed
to be language chosen by the parties thereto to express their mutual intent and
no rule of strict construction against any party shall apply to any term or
(g) Governing Law: THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
(h) Termination: Upon any termination and except as provided for
herein, all rights to use Dr. Koop's name and likeness shall terminate.
(i) Arbitration: Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Rules of the American Arbitration
Association by a single arbitrator in a location to be agreed to by the parties,
and judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof and shall not be appealable.
(j) Gender: Wherever herein the singular number is used, the same
shall include the plural, and the masculine gender shall include the feminine
and neuter genders and vice versa, as the context may require.
(k) Specific Performance. The rights and obligations granted
herein, including without limitation the use of the name, likeness, personality,
other public attributes and services of Dr. C. Everett Koop, are extremely
unique and therefore the parties acknowledge that money damages will generally
not be a suitable remedy and therefore each agree that the rights and
obligations granted herein may be specifically enforced.
(l) Counterparts: This Agreement may be executed in counterparts,
each of which shall constitute an original but all of which taken together shall
constitute but one agreement.
(m) Prior Version Superceded. The prior version of the Second
Amended and Restated Name and Likeness Agreement, dated June 22, 2000, is
expressly superceded by this Agreement.
16. Assignment and Change of Control: Neither party may assign its
rights and obligations under this Agreement without the prior written consent of
the other. Except as set forth in the following sentence, a Change of Control
shall not be deemed an assignment hereunder. In the event of a Specified Change
of Control of DKC as hereinafter defined, this Agreement shall terminate and all
rights in the Koop Name granted hereunder immediately revert to Koop and no
Rebranding period shall exist. A Specified Change of Control shall be defined as
set forth in Attachment A.
IN WITNESS WHEREOF THIS AGREEMENT IS EXECUTED AS OF THE DATE FIRST
/s/ C. EVERETT KOOP, M.D. /s/ RICHARD ROSENBLATT
C. Everett Koop, M.D. Richard Rosenblatt, CEO
For purposes of this Agreement "Change in Control" shall mean:
(1) the acquisition by any individual, entity or group (a "Person"),
including any "person" within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), of beneficial
ownership within the meaning of rule 13d-3 promulgated under the Exchange Act,
of more than 50% of either (i) the then outstanding shares of common stock of
the Company (the "Outstanding Company Common Stock") or (ii) the combined voting
power of the then outstanding securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that the following acquisitions shall not
constitute a Change in Control: (A) any acquisition directly from the Company
(excluding any acquisition resulting from the exercise of a conversion or
exchange privilege in respect to outstanding convertible or exchangeable
securities), (B) any acquisition by the Company, (C) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, (D) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation involving the
Company, if, immediately after such reorganization, merger or consolidation,
each of the conditions described in clauses (i), (ii) and (iii) of section (3)
of this definition shall be satisfied;
(2) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
such Board; provided, however, that any individual who becomes a director of the
Company subsequent to the date hereof whose election, or nomination for election
by the Company's stockholders, was approved by the vote of at least a majority
of the directors then comprising the Incumbent Board shall be deemed to have
been a member of the Incumbent Board;
(3) approval by the stockholders of the Company of a reorganization,
merger or consolidation unless, in any such case, immediately after such
reorganization, merger or consolidation, more than 50% of the then outstanding
shares of common stock of the corporation resulting from such reorganization,
merger or consolidation and more than 50% of the combined voting power of the
then outstanding securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals or entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such reorganization,
merger or consolidation an in substantially the same proportions relative to
each other as their ownership, immediately prior to such reorganization, merger
or consolidation, of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be; or
(4) approval by the stockholders of the Company of (i) a plan of
complete liquidation or dissolution of the Company or (ii) the sale or the
disposition of all or substantially all of the assets of the Company other than
to a corporation with respect to which, immediately after such sale or other
disposition, more than 50% of the then outstanding shares of common stock
and more than 50% of the combined voting power of the then outstanding
securities thereof entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such sale or other disposition and in
substantially the same proportions relative to each other as their ownership,
immediately prior to such sale or other disposition, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be.
Notwithstanding anything to the contrary contained herein, a Specified
Change of Control shall only be deemed to have occurred if one of the
transactions in paragraphs (1) through (4) have occurred and:
(a) the acquiring party, directly or indirectly, is related to,
controlled by, a party with substantial interests in the alcohol, tobacco or
(b) the acquiring party, directly or indirectly, is related to,
controlled by, or has a substantial interest in branches of the healing arts, in
the broadest sense, that would be deemed by organized, mainstream, orthodox
medicine as being unsafe, unethical or inappropriate;
(c) the acquiring party, directly or indirectly, is related to,
or controlled by, or has a substantial interest in businesses that are
antagonistic to, or competitive with, organized, mainstream, orthodox medicine;
(d) an arrangement of the sort described in (a) or (b) or (c)
occurs subsequent to such a Change in Control.
Direct Competitors shall include the following, which list shall be
updated from time to time upon delivery by DKC to Koop of parties that should be
added because they have become material competitors in the marketplace or
deleted. Any disagreement to such an update shall be resolved by arbitration in
accordance with Section 14(i).
12. American Online
16. Lycos Corporation
17. Infoseek/The Walt Disney Company
20. IMS Health, Inc.
The following list shall be updated from time to time to list additional
tangible Products to be sold to consumers from which DKC will derive revenues
and that are branded with the Koop Name in accordance with this Agreement:
2. Nutritional Supplements
4. Over-the-Counter (OTC) products
5. Health and Beauty Aid (HBA) products (e.g., first-aid, bandages, etc.)