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Engagement Letter - Commonweatlth Associates L.P. and Inc.

                                                               February 28, 2001, Inc.
225 Arizona Avenue, Suite 250
Santa Monica, CA 90401
Attn.: Richard Rosenblatt


     The purpose of this letter is to confirm the engagement of Commonwealth
Associates, L.P., ("Commonwealth") by drkoop, Inc. (the "Company") to act as the
Company's exclusive financial advisor to provide financial advisory services and
other investment banking services to the Company in connection with the possible
sale or merger of the Company or an acquisition by the Company, whether such
transaction (a "Sale Transaction") is in the form of a merger, sale or purchase
of assets or equity securities, or joint venture or other similar business

     Section 1. Services.  Commonwealth will perform such of the following
financial advisory and investment banking services as the Company may reasonably

     (a) Commonwealth will familiarize itself to the extent appropriate with the
business, operations, properties, financial condition and prospects of any
prospective Sale Transaction candidate, it being understood that Commonwealth
shall, in the course of such familiarization, rely entirely upon publicly
available information and such other information as may be supplied by the
Company or such candidate, without independent investigation;

     (b) Commonwealth will advise and assist the Company in developing a general
strategy for accomplishing a Sale Transaction;

     (c) Commonwealth will advise and assist the Company in identifying
potential Sale Transaction candidates and will on behalf of the Company, contact
such potential Sale Transaction candidates as the Company may designate;

     (d) Commonwealth will advise and assist the Company in the course of its
negotiation of a Sale Transaction with a potential acquiror or acquiree and will
participate directly in such negotiations. It is understood that you will be
under no obligation to enter into a Sale Transaction and you will be within your
rights declining any offer made in connection with a Sale Transaction; and

     (e) Commonwealth will render such other financial advisory and investment
banking services as may from time to time be agreed upon by Commonwealth and the
Company, including the issuance of any fairness opinions in connection with any
Sale Transaction.

In connection with our activities on the Company's behalf, the Company will
furnish us and any potential Sale Transaction candidates approved by the Company
with all information (the "Information") which we may reasonably request and is
reasonably acceptable to the Company and will provide us and any potential Sale
Transaction candidates approved by the Company reasonable access to the
Company's officers, directors, accountants and counsel; provided, however, that
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prior to the delivery of such information, a potential Sale Transaction
candidate shall have signed and delivered a confidentiality agreement acceptable
to the Company. The Company represents and warrants that to the best of its
knowledge the information will be true, accurate and complete and will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Company further represents and warrants that any projections
provided to us or contained in any materials prepared by the Company with
respect to a Sale Transaction will have been prepared in good faith. The Company
acknowledges and agrees that, in rendering our services hereunder, we will be
using and relying on the Information (and information available from public
sources and other sources which we deem to be reliable) without independent
verification thereof and without independent appraisal of any of the Company's
assets. We do not assume responsibility for the accuracy or the completeness of
the Information or any other information regarding the Company or any
prospective Sale Transaction candidate.

     Section 2. Fees. The Company shall pay to Commonwealth for its services
hereunder a cash fee equal to two percent (2%) of the Total Consideration
received or paid by the Company and its shareholders, but in no event less than
$600,000, such fee to be earned, due and payable upon the consummation of a Sale
Transaction and payable at the closing thereof unless otherwise provided herein;
provided, however, that in the event the Total Consideration is less than $10
million than the minimum payment shall only be $200,000, it being understood
that this proviso shall not apply in the event such consideration is paid in
securities of the Company and such securities (on a fully-diluted basis)
represent 25% or more of the outstanding common stock of the Company.

For purposes of this Agreement, "Total Consideration" shall mean the total value
of all cash, securities, or other property paid at the closing of a Sale
Transaction to or by the Company or its shareholders or to be paid in the future
to them with respect to such Sale Transaction as provided below (other than
payments of interest or dividends) in respect of (i) the assets of the acquired
company, (ii) the capital stock of the acquired company (and any securities
convertible into options, warrants or other rights to acquire such capital
stock) and (iii) the assumption, directly or indirectly (by operation of law or
otherwise), of any indebtedness of the acquired company for borrowed money, less
all cash and cash equivalents held by the acquired company at closing. In the
event a Sale Transaction is consummated in one or more steps, including without
limitation, any additional consideration paid or to be paid in any subsequent
step in the Sale Transaction including payments pursuant to promissory notes
delivered to the acquired company in connection with a Sale Transaction in
respect of the items set forth in (i) - (iii) above, shall be included in the
definition of "Total Consideration".


If all or a portion of the Total Consideration paid in the Sale Transaction is
other than cash or negotiable securities then the value of such non-cash
consideration shall be the fair market value thereof on the date the Sale
Transaction is consummated as mutually agreed upon in good faith by the Company
and us. If such non-cash consideration consists of common stock, convertible
preferred stock or other convertible security, options, warrants or other rights
for which a public trading market for such security or underlying security
existed prior to consummation of the Sale Transaction, then the value of such
securities shall be determined by the closing or last sales price of such
security or underlying security on the date of the consummation of the Sale
Transaction. If no public market exists for the common stock, options, warrants
or rights issued in the Sale Transaction, then the value of such securities
shall be as mutually agreed upon in good faith by the Company's Board of
Directors and us. If such non-cash consideration consists of preferred stock or
debt securities (regardless of whether a public trading market existed for such
preferred stock or debt securities prior to the consummation of the Sale
Transaction or exists thereafter), the value thereof shall be the fair market
value of such non-cash consideration. Any amounts payable to the Company, or any
affiliate of the Company or any shareholder of the Company in connection with a
non-competition agreement or any employment, consulting, licensing, supply or
other agreement, to the extent that such amounts payable are greater than what
would customarily be paid on an arms-length basis to an employee, consultant,
licensee or supplier who had not been acquired, shall be deemed to be part of
the consideration paid in the Sale Transaction. If all or a portion of the Total
Consideration payable in connection with a Sale Transaction includes future
payments, then the Company shall pay us any additional cash fee, determined in
accordance with this section 2, when, and if such payments are paid.

     Section 3. Expenses. In addition to the compensation described in Section 2
above, the Company agrees to promptly reimburse us, upon request from time to
time, not more than monthly, for all out-of-pocket expenses incurred (including,
without limitation, all travel and lodging expenses, and reasonable fees and
disbursements of any counsel, consultants and advisors retained by us with the
Company's consent) in connection with our services pursuant to this agreement;
provided however, that unless otherwise consented to in writing by the Company
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in advance such expenses shall not exceed $25,000 in the aggregate.

     Section 4. Indemnity. Because we will be acting on the Company's behalf, it
is our practice to receive indemnification. A copy of our standard
indemnification provisions (the "Indemnification Provisions") is attached to
this agreement and is incorporated herein and made a part hereof.

     Section 5. Termination of Engagement. Commonwealth's engagement hereunder
may be terminated by either the Company or Commonwealth at any time, with or
without cause, upon written advice to that effect to the other party; provided,
however, that notwithstanding any such termination, Commonwealth will be
entitled to 100% of its full fee under Section 2 hereof in the event that at any
time prior to the expiration of 12 months after such termination, a Sale
Transaction is consummated with any party introduced to the Company by
Commonwealth, or who the Company requested that we provide any services
hereunder in connection therewith 


during the term of Commonwealth's engagement hereunder ("Commonwealth
Prospects"). Not more than 10 business days after termination, Commonwealth
shall provide in writing its proposed list of Commonwealth Prospects which shall
be binding unless the Company provides a written objection within 10 days of
receipt whereupon any dispute shall be resolved in accordance with Section 7
herein. The provisions of this Section 5 and Sections 2, 3 and 4 hereof shall
survive such termination.

     Section 6. Successors and Assigns. The benefits of this Agreement shall
inure to the respective successors and assigns of the parties hereto and of the
indemnified parties hereunder and their successors and assigns and
representatives, and the obligations and liabilities assumed in this agreement
by the parties hereto shall be binding upon their respective successors and
assigns; provided, that the rights and obligations of either party under this
agreement may not be assigned without the prior written consent of the other
party hereto and any other purported assignment shall be null and void.

     Section 7. Miscellaneous.  

     (a) The validity and interpretation of this Agreement shall be governed by
the law of the State of New York applicable to agreements made and to be fully
performed therein. Commonwealth and the Company will attempt to settle any claim
or controversy arising out of this Agreement through consultation and
negotiation in good faith and a spirit of mutual cooperation. If those attempts
fail, then the dispute will be mediated by a mutually acceptable mediator to be
chosen by Commonwealth and the Company within 15 days after written notice from
either party demanding mediation. Neither party may unreasonably withhold
consent to the selection of a mediator, and the parties will share the costs of
the mediation equally. Any dispute which the parties cannot resolve through
negotiation or mediation within six months of the date of the initial demand for
it by one of the parties may then be submitted to binding arbitration under the
rules of the American Arbitration Organization of New York for resolution. The
use of mediation will not be construed under the doctrine of latches, waiver or
estoppel to affect adversely the rights of either party. Nothing in this
paragraph will prevent either party from resorting to judicial proceedings if
(a) good faith efforts to resolve the dispute under these procedures have been
unsuccessful or (b) interim relief from a court is necessary to prevent serious
and irreparable injury.

     (b) The Company expressly acknowledges that all opinions and advice
(written or oral) given by Commonwealth to the Company in connection with
Commonwealth's engagement are intended solely for the benefit and use of the

     (c) The Company is a sophisticated business enterprise that has retained
Commonwealth for the limited purposes set forth in this Agreement, and the
parties acknowledge and agree that their respective rights and obligations are
contractual in nature. Each party disclaims an intention to impose fiduciary
obligations on the other by virtue of the engagement contemplated by the
Agreement, and each party agrees that there is no fiduciary relationship between


This Agreement constitutes the entire agreement of the parties with respect to
the matters herein referred and supersedes all prior agreements and 
understandings, written and oral, between the parties with respect to the
subject matter hereof including that certain engagement letter dated June 5,
2000, that certain Placement Agency Agreement dated June 23, 2000, and that
certain advisory agreement dated August 18, 2000 between the Company and
Commonwealth. Neither this Agreement nor any term hereof may be changed, waived
or terminated orally, except by an instrument in writing signed by the party
against which enforcement of the change, waiver or termination is sought.

Please confirm that the foregoing is in accordance with your understandings and
agreements with Commonwealth Associates, L.P. by signing and returning to
Commonwealth the two copies of this letter enclosed herewith.

                                        Very truly yours,

                                        COMMONWEALTH ASSOCIATES, L.P.

                                        By:  /s/ DAVID BORIS




                          INDEMNIFICATION PROVISIONS, Inc. (the "Company") agrees to indemnify and hold harmless
Commonwealth Associates, L.P. ("Commonwealth") against any and all losses,
claims, damages, obligations, penalties, judgments, awards, liabilities, costs,
expenses and disbursements (and any and all actions, suits, proceedings and
investigations in respect thereof and any and all legal and other costs,
expenses and disbursements in giving testimony or furnishing documents in
response to a subpoena or otherwise), including, without limitation, the costs,
expenses and disbursements, reasonably incurred, as and when incurred, of
investigating, preparing or defending any such action, suit, proceeding or
investigation (whether or not in connection with litigation in which
Commonwealth is a party), directly or indirectly, caused by, relating to, based
upon, arising out of, or in connection with Commonwealth's acting for the
Company in connection with the Agreement, dated February 15, 2001, between the
Company and Commonwealth to which these indemnification provisions are attached
and form a part (the "Agreement"), except to the extent primarily caused by the
gross negligence or willful misconduct of Commonwealth. The Company also agrees
that Commonwealth shall not have any liability (whether direct or indirect, in
contract or tort or otherwise) to the Company for or in connection with the
engagement of Commonwealth, except to the extent that any such liability is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) to have resulted primarily from Commonwealth's gross negligence
or willful misconduct.

     The indemnification provisions shall be in addition to any liability which
the Company may otherwise have to Commonwealth or the persons indemnified below
in this sentence and shall extend to the following: Commonwealth, its affiliated
entities, partners, employees, legal counsel, agents and controlling persons
(within the meaning of the federal securities laws), and the officers,
directors, employees, legal counsel, agents and controlling persons of any of
them. All references to Commonwealth in these indemnification provisions shall
be understood to include any and all of the foregoing.

     If any action, suit, proceeding or investigation is commenced, as to which
Commonwealth proposes to demand indemnification, it shall notify the Company
with reasonable promptness; provided, however, that any failure by Commonwealth
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to notify the Company shall not relieve the Company from its obligations
hereunder except to the extent that the Company is materially prejudiced
thereby. If the Company so elects, or is requested by Commonwealth, the Company
will assume the defense of such action, suit, proceeding or investigation,
including the employment of counsel reasonably acceptable to Commonwealth, and
the payment of the reasonable fees and disbursements of such counsel. In the
event, however, that the Company fails to promptly assume the defense thereof
with counsel reasonably acceptable to Commonwealth, or Commonwealth determines
in its reasonable judgment that it has one or more material defenses different
than or in addition to those of the Company, then Commonwealth shall have the
right to retain one counsel (in addition to any local counsel) of its own choice
to represent it, and the Company shall pay the reasonable fees, expenses and


disbursements of such counsel; and such counsel shall, to the extent consistent
with its professional responsibilities, cooperate with the Company and any
counsel designated by the Company. The Company shall not be liable for any
settlement of any claim against Commonwealth without the Company's prior written
consent, which consent shall not be unreasonably withheld. The Company shall
not, without the prior written consent of Commonwealth, which shall not be
unreasonably withheld, settle or compromise any claim, or permit a default or
consent to the entry of any judgment in respect thereof, unless such settlement,
compromise or consent includes, as a unconditional term thereof, the giving by
the claimant to Commonwealth of an unconditional release from all liability in
respect of such claim.

     In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification in such case,
then the Company, on the one hand, and Commonwealth, on the other hand, shall
contribute to the losses, claims, damages, obligations, penalties, judgments,
awards, liabilities, costs, expenses, and disbursements to which the indemnified
persons may be subject in accordance with the relative benefits received by the
Company, on the one hand, and Commonwealth, on the other hand, and also the
relative fault of the Company, on the one hand, and Commonwealth, on the other
hand, in connection with the statements, acts or omissions which resulted in
such losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses or disbursements and the relevant equitable
considerations shall also be considered. No person found liable for a fraudulent
misrepresentation shall be entitled to contribution from any person who is not
also found liable for such fraudulent misrepresentation. Notwithstanding the
foregoing, Commonwealth shall not be obligated to contribute any amount
hereunder that exceeds the amount of fees previously received by Commonwealth
pursuant to this Agreement.

     Neither termination nor completion of the engagement of Commonwealth
referred to above shall affect these indemnification provisions which shall then
remain operative and in full force and effect.

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