DRKOOP.COM, INC. AND SALON INTERNET, INC.
PREFERRED PARTNER AGREEMENT
This Preferred Partner Agreement (the "Agreement") is made and entered into
as of April 20, 1999 by and between drkoop.com, Inc. ("DKC"), with its
principal place of business at 8920 Business Park Drive, Suite 200, Austin,
Texas 78759, and Salon Internet, Inc. ("Salon"), with its principal place of
business located at 706 Mission Street, 3rd Floor, San Francisco, CA 94013
(individually a "party" and collectively, the "parties").
RECITALS
WHEREAS, DKC develops, markets and maintains an integrated suite of
Internet enabled, consumer oriented software applications and services,
including, but not limited to, Dr. Koop's Community, electronic commerce and
advertising and promotional services on the Internet at the web site located at
URL: http://www.drkoop.com or any replacement or successor URL (the "DKC Web
Site");
WHEREAS, Salon is an original content Internet magazine covering books, art
and ideas which provides, among other things, articles, advertising and
promotional services on the Internet at the web site located at URL:
http://www.salonmagazine.com or any replacement or successor URL (the "Salon Web
Site");
WHEREAS, Salon desires to create a section on the Salon Web Site dedicated
to healthcare and DKC desires to provide Salon with healthcare information and
health-related services for this section which shall be located at URL:
http://www.salonmagazine.health.com or a replacement or successor URL (the
"Salon Health Site") and which shall be accessible to Users (as defined below)
through links on the Salon Web Site and the DKC Web Site; and
WHEREAS, DKC desires to host a site at URL: http://www.
salonmagazine.drkoop.com or a replacement or successor URL (the "DKC/Salon
Site"), wherein Salon Users may purchase products on-line through a Storefront
(as defined below) on the Salon Health Site which is linked to the DKC/Salon
Site and Salon desires to have DKC provide such services.
AGREEMENT
NOW, THEREFORE, in consideration of the obligations set forth below, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
________________________
Confidential treatment has been requested for portions of this exhibit. the copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as * * *. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
ARTICLE 1.
DEFINITIONS
1.1. DEFINITIONS. Capitalized terms used in the Agreement shall have the
meanings given below:
(a) EFFECTIVE DATE means the date first set forth above.
(b) DKC CONTENT means content used on the DKC Web Site owned by DKC
or which DKC has the right to sublicense to Salon as further described on
Exhibit A attached hereto.
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(c) HOME PAGE means the first page of a web site which is displayed
when accessing the associated URL.
(d) LINKS means text, banners, logos and contextual links (a
"Graphical Image") which permit a User to go from one party's web site to
another web site by clicking on the Graphical Image.
(e) PRODUCT(S) means prescription and over-the-counter medication and
other health related products, the sale of which is facilitated by DKC through
the DKC/Salon Site.
(f) QUALIFIED SALE means a sale in which a User followed a Link from
the Salon Health Site to the DKC/Salon Site and purchases a Product.
(g) SALON CONTENT means content on the Salon Web Site owned by Salon
or which Salon has the right to sublicense to DKC, including, without
limitation, Salon's Table Talk discussion groups and original stories appearing
on the Salon Web Site as further described on Exhibit B attached hereto.
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(h) STOREFRONT means the web page on the Salon Health Site which is
designed as a virtual store where Salon Users may shop for Products and, if so
desired, may purchase Products by clicking on a Link to the DKC/Salon Site where
such sales are facilitated.
(i) UNAUTHORIZED CODE means harmful program or data incorporated into
files which destroys, erases, damages or otherwise disrupts the normal operation
of the User's computer systems or allows for unauthorized access to the User's
computer systems.
(j) USER means any individual visiting the Salon Web Site, DKC Web
Site, Salon Health Site or DKC/Salon Site, as the case may be.
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ARTICLE 2.
LICENSE GRANT
2.1. LICENSE GRANT TO SALON. Pursuant to the terms and conditions of the
Agreement, DKC hereby grants to Salon and Salon hereby accepts a nonexclusive,
nontransferable, and fully paid-up right and license (without the right to
sublicense) to use, copy and display, in a manner "framed" by or "embedded"
within the Salon Health Web Site, as well as offer and distribute to Users
solely in conjunction and integrated with the Salon Health Site, the DKC
Content. Salon shall launch the Salon Health Site within one (1) month of the
Effective Date.
2.2. LICENSE GRANT TO DKC. Pursuant to the terms and conditions of the
Agreement, Salon hereby grants to DKC and DKC hereby accepts a nonexclusive,
nontransferable, and fully paid-up right and license (without the right to
sublicense) to use, copy and display, in a manner "framed" by or "embedded"
within the DKC/Salon Site, as well as offer and distribute to Users solely in
conjunction and integrated with the DKC/Salon Site, the Salon Content. DKC shall
launch the DKC/Salon Site within two (2) months of the Effective Date.
2.3. ON-LINE SERVICE AGREEMENT. Each party shall only distribute the other
party's Content to its Users pursuant to an on-line service agreement. The On-
line Service Agreement shall allow Users the right to reproduce one copy of the
Content for their personal, noncommerical use.
2.4. EDITING. Neither party shall modify, edit, abbreviate, censor or limit
the other party's Content, except for the specific "framing" or "embedding"
contemplated by the Agreement.
2.5. DKC AS EXCLUSIVE PROVIDER. Within the United States and within any
other country in which Salon does business and/or in which the Salon Web Site
and/or Salon Health Site are marketed, Salon shall not, without the prior
written consent of DKC, display any healthcare or related information or provide
any healthcare related services on the Salon Web Site and/or the Salon Health
Site, except for such content and services authorized or developed by Salon or a
freelance Writer/developer.
ARTICLE 3.
LINKING
3.1. LINKING.
(a) Salon shall establish and maintain at least one Link: (i) from
the Salon Web Site Home Page to the Salon Health Site, (ii) from the Salon
Health Site to the DKC/Salon Site Home Page, (iii) from the Salon Emporium e-
commerce area on the Salon Web Site to the Storefront, and (iv) in content on
the Salon Health Site to related resource information on the DKC/Salon Site.
(b) DKC shall establish and maintain one or more Links from the: (i)
DKC Web Site to the DKC/Salon Site, and (ii) DKC/Salon Site to the Salon Web
Site.
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3.2. SALON AS PREMIER PARTNER. When DKC implements a "Premier Partner
Section" (as defined below) on the DKC Web Site, DKC shall include a Link from
the Premier Partner Section on the DKC Web Site Home Page to the DKC/Salon Site.
"Premier Partner Section" means the section on the DKC Web Site used for
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advertising affiliates with whom DKC has a strategic relationship and who are in
the primary business of providing magazine style content on the Internet.
3.3. DKC AS EXCLUSIVE STOREFRONT.
(a) As soon as practicable from the Effective Date, Salon shall
implement a Storefront on the Salon Health Site, which shall be Linked from the
Salon Health Site to the DKC/Salon Site. Once a User follows a Link to the
DKC/Salon Site, DKC shall facilitate the purchase of Products by the User. The
Storefront shall be the exclusive on-line retail section for all prescription,
over-the-counter drug and other health related item sales on the Salon Web Site
and Salon Health Site. After the launch of the Storefront, Salon shall not
accept advertising which directly sells pharmaceutical and health related
products on-line within one hyperlink from the same site. As used herein,
`advertising which directly sells" means that a user may link to a HTML page on
which a product is for sale by within one hyperlink from such advertising.
(b) DKC shall enable Salon Users to purchase Products by Linking
Users to affiliated e-commerce web sites (the "Affiliated Partners"). The
Affiliated Partners shall process all Product orders and each Affiliated Partner
reserves the right to reject orders that do not comply with any requirements of
the Affiliated Partner. The Affiliated Partners will be responsible for all
aspects of order processing and fulfillment, including, without limitation,
preparing order forms; processing payments, cancellations and returns; and
handling customer service. If Salon so desires to include an Affiliated Partner
Product in the Storefront, Salon shall comply with any requirements of such a
Partner, as provided to it from time to time by DKC.
ARTICLE 4.
MARKETING AND PROMOTIONS
4.1. PROMOTION BY SALON.
(a) Salon shall place advertising banners on each page of the
Salon Health Site promoting the DKC/Salon Site, which shall include a minimum of
* * * banner advertisements, Linked to the DKC/Salon Site, pursuant to the
following schedule and terms:
(i) during the first successive year following the
Effective Date, a minimum of * * * impressions;
___________________________
* * * 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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(ii) during the second successive year following the
Effective Date, a minimum of * * * impressions;
(iii) during the third successive year following the
Effective Date, a minimum of * * * impressions; and
(iv) the banners shall be within at least three (3)
hyperlinks from the Salon Web Site Home Page and Salon Health Site Home
Page and shall be evenly distributed throughout the relevant period.
(b) Where appropriate and at Salon's discretion, Salon may
periodically feature the Salon Health Site and the DKC/Salon Site in its
newsletter and distribute it to its registered Users.
(c) Where appropriate and at Salon's discretion, Salon shall
prominently feature DKC in Salon promotional, sales and marketing materials,
including press coverage, where possible. Notwithstanding the foregoing, Salon
shall also conduct at least six (6) special promotions featuring the Salon
Health Site, which shall be mutually agreed to by the parties, and in no event
shall Salon conduct less than two (2) special promotions per year. Salon shall
obtain DKC's prior written consent before distributing any promotional materials
or undertaking any such promotional events.
4.2. PROMOTION BY DKC. Where appropriate and at DKC's sole discretion, DKC
may periodically feature Salon and the Salon Health Site in its drkoop.com
newsletter, on the DKC Web Site Home Page and in other DKC promotional, sales
and marketing materials, including press coverage, where possible. DKC shall
obtain Salon's prior written consent before distributing any promotional
materials.
4.3. ON-GOING EFFORTS.
(a) DKC and Salon shall participate in joint sales and marketing
discussions at mutually agreed times and locations to discuss how the parties
can participate in additional joint marketing and business development
opportunities.
(b) Salon and DKC agree to release a joint press release within
thirty (30) days of the Effective Date. From time to time thereafter, the
parties may issue joint press releases as mutually agreed upon.
__________________________
* * * 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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ARTICLE 5.
PAYMENT AND FEES
5.1. PAYMENT. Pursuant to the terms and conditions set forth herein, DKC
shall pay to Salon a fee of $600,000 (the "Fee"), payable in accordance with the
following payment schedule:
(a) * * * payable on the earlier of (i) the Effective Date, or (ii)
March 12, 1999;
(b) * * * on or before March 31, 1999;
(c) * * * on or before January 31, 2000;
(d) * * * on or before August 31, 2000;
(e) * * * on or before February 28, 2001; and
(f) * * * on or before August 31, 2001.
5.2. TRANSACTION FEES FROM PRODUCT SALES.
(a) DKC shall pay to Salon a transaction fee of * * * of the Net
Proceeds on Qualified Sales of Products originating from the Storefront on the
Salon Health Site (the "Transaction Fee"). As used herein, "Net Proceeds" means
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revenue actually received by DKC for any such sale from its Affiliated Partners.
(b) Transaction Fees are due and payable on the thirtieth (30th) day
after the calendar quarter following the calendar quarter in which the revenue
was received. If a Product that generated a Transaction Fee is returned, the
corresponding Transaction Fee will be deducted from the next quarter's payment.
Transaction Fee checks shall be accompanied by a report. The form, content and
frequency of the report may vary from time to time in DKC's discretion;
provided, however, that such reports shall be issued no less frequently than
once per calendar quarter and shall contain sufficient information to enable
Salon to determine if the appropriate Transaction Fees have been paid.
(c) If the Transaction Fees payable to Salon for any calendar quarter
are less than $100.00, DKC will hold such Transaction Fees until the total
amount due is at least $100.00 or until this Agreement is terminated, whichever
occurs first. If a Product generating a Transaction Fee is returned by the User,
DKC will deduct the corresponding Transaction Fee from the next quarterly
payment. If there is no subsequent payment, DKC will send Salon a bill for the
transaction fees, and Salon shall reimburse DKC.
5.3. ADVERTISING AND REVENUE SHARE.
(a) During the term of the Agreement, Salon shall have the first
right to sell advertising space on the Salon Health Site. DKC may sell any
excess advertising, subject to
____________________________
* * * 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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Salon's acceptance of such advertising. The Net Advertising Revenue (as defined
below) generated by Salon from such advertising shall be shared between the
parties with * * * of such Net Advertising Revenue allocated to Salon and * * *
of such Net Advertising Revenue allocated to DKC. In the event that DKC sells
such advertising, then DKC shall receive * * * of such Net Advertising Revenue
and * * * of such Net Advertising Revenue be allocated to Salon. Salon shall
provide monthly advertising reports to DKC for impressions delivered. As used
herein, "Net Advertising Revenue" means gross revenue of actual sales less costs
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paid to acquire the advertising, not to exceed 20% of the total gross revenue.
(b) In addition to Section 5.3 (a), Salon shall pay DKC * * * of
Salon's actual rates charged for advertising which accrues to Salon during the
term of this Agreement from paid banner advertising ("Banner Advertising
Revenue") that both (i) appears on pages of the Salon Health Site and (ii)
prominently features DKC Content such that a majority of that page's content
(excluding advertisements, teasers and text links) is composed of DKC Content.
For purposes of this section, DKC Content excludes "teaser" content and
contextual links to the Salon Health Site.
(c) TIME OF PAYMENT. Net Advertising Revenue and Banner Advertising
Revenue due to DKC shall be due and payable on the thirtieth (30th) day after
the calendar quarter following the calendar quarter in which the revenue was
received. If the Net Advertising Revenue payable to the other party for any
calendar quarter is less than $100.00, the selling party will hold such Net
Advertising Revenue until the total amount due is at least $100.00 or until this
Agreement is terminated, whichever occurs first.
5.4. AUDIT. Each party shall maintain records of all activities subject to
payments pursuant to the Agreement. Each party shall permit a reputable
independent certified public accounting firm designated by the other party to
have access, at a mutually agreed upon time during normal business hours, to the
records and books of account which relate solely to the Agreement for the
purpose of determining whether the appropriate fees have been paid. Such audits
may not be required more often than once every year provided, however, that
either party may audit the other within six (6) months of any audit in which a
discrepancy of five percent (5%) or greater is discovered. If a discrepancy is
discovered, the party in whose favor the error was made will promptly pay the
amount of the error to the other. The party requesting the audit will pay the
cost of the audit, provided, however, that if a discrepancy is discovered of
five percent (5%) or greater, then the audited party will pay the cost of the
audit.
5.5. REPORTING AND SITE USAGE. Each party shall provide the other party
with monthly site usage reports within fifteen (15) days of the end of each
month.
____________________
* * * 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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ARTICLE 6.
TRADEMARKS AND OTHER PROPRIETARY MATTERS.
6.1. DKC TRADEMARK LICENSE. Subject to the terms and conditions of the
Agreement, DKC hereby grants to Salon a limited license to use the DKC
trademarks as set forth on Exhibit D (the "DKC Marks") on the Salon Web and
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Salon Health Web Sites solely for purposes of using, marketing and promoting the
Salon Health and DKC/Salon Site during the Term of the Agreement. In the event
that Salon desires to use the DKC Marks outside of the Salon Web and Salon
Health Web Sites, Salon shall, in each instance, obtain DKC's written approval
for use of the DKC Marks in any such collateral marketing materials, which
consent shall not be unreasonably withheld or delayed.
6.2. USE OF NAME AND LIKENESS. Salon shall not have any right to use the
name and/or likeness of Dr. C. Everett Koop or to make any statements, whether
written or oral, which state or otherwise imply, directly or indirectly, any
endorsement from or affiliation with Dr. Koop in any manner whatsoever without
the prior written consent of DKC, which consent may be withheld in DKC's sole
discretion.
6.3. SALON TRADEMARK LICENSE. Subject to the terms and conditions of the
Agreement, Salon hereby grants to DKC a limited license to use the Salon
trademarks as set forth on Exhibit E (the "Salon Marks") on the DKC Web and
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DKC/Salon Web Sites solely for purposes of using, marketing and promoting the
Salon Health and DKC/Salon Sites during the Term of the Agreement. In the event
that DKC desires to use the Salon Marks outside the DKC Web and DKC/Salon Web
Sites, DKC shall, in each instance, obtain Salon's written approval for use of
the Salon Marks in any such collateral marketing materials, which consent shall
not be unreasonably withheld or delayed.
6.4. RESERVATION OF RIGHTS. The parties acknowledge and agree that (i) each
party's Marks are and shall remain the sole property of that party; (ii) nothing
in the Agreement shall convey to either party any right of ownership in the
other party's Marks; (iii) neither party shall now or in the future contest the
validity of the other party's Marks; and (iv) neither party shall in any manner
take any action that would impair the value of, or goodwill associated with,
such Marks. The parties acknowledge and agree that all use of the other party's
Marks by a party shall inure to the benefit of the party whose Marks are being
used.
6.5. QUALITY STANDARDS AND MAINTENANCE. The parties acknowledge and agree
that it is necessary for each party to maintain uniform standards governing all
facets of its web site in order to provide Users worldwide with high quality and
consistent levels of service, and to protect the reputation and goodwill
associated with its web site. Accordingly, the parties agree that the quality of
goods and services offered under each of their respective sites shall be at
least as high as the quality of the goods and services offered by the other
party. The parties agree to comply with such specific standards for use of the
respective Marks as each party may, in its discretion, establish and modify from
time to time.
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ARTICLE 7.
INTELLECTUAL PROPERTY
7.1. DKC USER DATA. DKC may request its Users, including Salon's Users, to
provide personal information when they sign up for certain services, including
requesting information on a specific disease, chat rooms and forums ("User
Data"). Such User Data is owned by each User and DKC does not use or disclose
any such User Data without the consent of the User. Nothing contained herein
shall be construed as an obligation of a party to provide User Data to the other
party.
7.2. SALON INTELLECTUAL PROPERTY RIGHTS. DKC agrees that all right, title
and interest in and to the Salon Content shall remain in Salon, including all
copyright and other intellectual property rights. DKC shall have no right, title
and interest in and to the Salon Content or any copyright or other intellectual
property rights therein, other than the rights to use and redistribute such
Content as granted by this Agreement.
7.3. DKC INTELLECTUAL PROPERTY RIGHTS. Salon agrees that all right, title
and interest in and to the DKC Content shall remain in DKC, including all
copyright and other intellectual property rights. Salon shall have no right,
title and interest in and to the DKC Content or any copyright or other
intellectual property rights therein, other than the rights to use and
redistribute such Content as granted by this Agreement.
ARTICLE 8.
REPRESENTATIONS AND WARRANTIES; LIMITATIONS
8.1. DKC WARRANTY. DKC represents and warrants for the benefit of Salon
that the DKC Content and DKC Marks do not and will not infringe any copyright,
trademark or trade secret of any third party and do not and will not constitute
a defamation or invasion of the rights of privacy or publicity of any kind of
any third party.
8.2. SALON WARRANTY. Salon represents and warrants for the benefit of DKC
that the Salon Content and Salon Marks do not and will not infringe any
copyright, trademark or trade secret of any third party and do not and will not
constitute a defamation or invasion of the rights of privacy or publicity of any
kind of any third party. Salon also represents and warrants that it is not an
entity or an affiliate of any entity which engages in the manufacture or
wholesale distribution of tobacco or tobacco products (such activities are
collectively referred to as "Tobacco Industry Affiliation").
8.3. INDEMNIFICATION BY DKC. DKC agrees to indemnify and hold harmless
Salon, its officers, directors, employees and agents from and against any
claims, demands, causes of action and judgments (including reasonable attorneys'
fees and court costs) (collectively, "Salon Claims") by any third party arising
out of any breach or alleged breach of any of DKC's representations and
warranties set forth in Section 8.1, provided that Salon gives DKC prompt
written notice of the assertion of any such Salon Claims. DKC shall have the
option to undertake and control the defense and settlement of any such Salon
Claims; provided, however, that Salon may participate in any such proceeding at
its own expense with counsel of its own choosing.
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8.4. INDEMNIFICATION BY SALON. Salon agrees to indemnify and hold harmless
DKC, its officers, directors, employees and agents from and against any claims,
demands, causes of action and judgments (including reasonable attorneys' fees
and court costs) (collectively, "DKC Claims") by any third party arising out of
any breach or alleged breach of any of Salon's representations and warranties
set forth in Section 8.2, provided that DKC gives Salon prompt written notice of
the assertion of any such DKC Claims. Salon shall have the option to undertake
and control the defense and settlement of any such DKC Claims; provided,
however, that DKC may participate in any such proceeding at its own expense with
counsel of its own choosing.
ARTICLE 9.
LIMITATION OF LIABILITY
9.1. WARRANTY. THE AGREEMENT IS AN AGREEMENT FOR SERVICES. NOTWITHSTANDING
THE FOREGOING AND EXCEPT AS SET FORTH IN ARTICLE 8, BOTH PARTIES SPECIFICALLY
DISCLAIM ALL WARRANTIES WITH REGARD TO THE SALON WEB, SALON HEALTH, DKC WEB AND
DKC/SALON SITES, CONTENT AND SERVICES PROVIDED THEREUNDER, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. IN PARTICULAR, AND NOT BY WAY OF LIMITATION, THE PARTIES DO
NOT WARRANT THAT THE SALON WEB, SALON HEALTH, DKC WEB AND DKC/SALON SITES WILL
OPERATE ERROR-FREE OR WITHOUT INTERRUPTION OR THAT ANY FILES AVAILABLE FOR
DOWNLOAD FROM SUCH SITES ARE FREE OF INFECTION BY VIRUSES, WORMS OR OTHER
UNAUTHORIZED CODE.
9.2. DAMAGES. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR
ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, INCLUDING,
BUT NOT LIMITED TO, LOSS OF PROFITS, LOSS OF DATA, LOSS OF BUSINESS OR OTHER
LOSS ARISING OUT OR RESULTING FROM THE AGREEMENT, EVEN IF EITHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING SHALL APPLY REGARDLESS
OF THE NEGLIGENCE OR OTHER FAULT OF EITHER PARTY AND REGARDLESS OF WHETHER SUCH
LIABILITY SOUNDS IN CONTRACT, NEGLIGENCE, TORT OR ANY OTHER THEORY OF LIABILITY.
NOTWITHSTANDING THE FOREGOING, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR THE GREATER OF (i) THE CUMULATIVE AMOUNT ACTUALLY PAID BY EACH
PARTY TO THE OTHER PARTY, OR (ii) $50,000.
ARTICLE 10.
CONFIDENTIALITY
10.1. CONFIDENTIALLY OBLIGATIONS. Either party (the "Disclosing party") may
from time to time disclose Confidential Information to the other party (the
"Recipient"). "Confidential Information" is all nonpublic information
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concerning the business, technology, internal structure
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and strategies of the Disclosing party which is conveyed to the Recipient orally
or in tangible form and is either marked as "confidential" or which is
identified as "confidential" prior to disclosure. During the term of the
Agreement and for a period of two (2) years thereafter, Recipient will keep in
confidence and trust and will not disclose or disseminate, or permit any
employee, agent or other person working under Recipient's direction to disclose
or disseminate, the existence, source, content or substance of any Confidential
Information to any other person. Recipient will employ at least the same methods
and degree of care, but no less than a reasonable degree of care, to prevent
disclosure of the Confidential Information as Recipient employs with respect to
its own confidential user data, trade secrets and proprietary information.
Recipient's employees and independent contractors will be given access to the
Confidential Information only on a need-to-know basis, and only if they have
executed a form of non-disclosure agreement with Recipient which imposes a duty
to maintain the confidentiality of information identified or described as
confidential by Recipient and after Recipient has expressly informed them of the
confidential nature of the Confidential Information. Recipient will not copy or
load any of the Confidential Information onto any computing device or store the
Confidential Information electronically except in circumstances in which
Recipient has taken all necessary precautions to prevent access to the
information stored on such device or electronic storage facility by anyone other
than the persons entitled to receive the Confidential Information hereunder.
10.2. PERMITTED DISCLOSURES. The commitments in this Section 10 will not
impose any obligations on Recipient with respect to any portion of the received
information which: (i) is now generally known or available or which, hereafter,
through no act or failure to act on the part of Recipient, becomes generally
known or available; (ii) is rightfully known to Recipient at the time of
receiving such information; (iii) is furnished to Recipient by a third party
without restriction on disclosure and without Recipient having actual notice or
reason to know that the third party lacks authority to so furnish the
information; (iv) is independently developed by Recipient; or (v) is required to
be disclosed by operation of law or by an instrumentality of the government,
including, but not limited to, any court, tribunal or administrative agency.
ARTICLE 11.
TERM AND TERMINATION
11.1. TERM. The term of the Agreement shall commence upon the Effective
Date and shall continue for three (3) years (the "Initial Term"). The Agreement
may be renewed upon mutual agreement of the parties, but such agreement to renew
must be made not less than ninety (90) days before the expiration of the Initial
Term.
11.2. TERMINATION FOR LOW PAGE VIEWS. DKC has the right to terminate the
Agreement following the first anniversary of the Effective Date and, again, on
the second anniversary of the Effective Date of the Agreement, if the following
page views for the Salon Health Site are not met:
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(1) * * * page views by April 15, 2000
(2) * * * page views by April 15, 2001
Termination pursuant to this Section 11.2 shall be effective if given in writing
within thirty (30) days of the applicable anniversary of the Effective Date.
Salon shall not, or shall not cause others to, artificially inflate its page
views.
11.3. TERMINATION FOR BREACH. If either party is in default of any
material provision of the Agreement and such default is not cured within thirty
(30) days of receipt of written notice, the non-breaching party shall have the
right to terminate the Agreement.
11.4. TERMINATION FOR INSOLVENCY. Either party shall have the right to
terminate the Agreement in writing immediately if the other party (i)
voluntarily or involuntarily becomes the subject of a petition in bankruptcy or
of any proceeding relating to insolvency, receivership, liquidation or
composition for the benefit of creditors; or (ii) admits in writing its
inability to pay its debts as they become due.
11.5. TERMINATION FOR TOBACCO AFFILIATION. Upon commencing any activities
relating to Tobacco Industry Affiliation, Salon shall promptly notify DKC of its
intent to undertake Tobacco Industry Affiliation. Upon receipt of such notice or
upon learning of any such Tobacco Industry Affiliation from a third party, DKC
shall have the right to immediately terminate the Agreement without liability of
any kind.
11.6. SURVIVAL. The rights and obligations under Articles 7 (Intellectual
Property Rights), 8 (Representations and Warranties; Limitations), 9 (Limitation
of Liability), 10 (Confidentiality) and 13 (General Provisions) and Sections 5.2
(Transaction Fees) and 6.4 (Trademarks and Other Proprietary Matters) shall
survive after the expiration or earlier termination of the Agreement.
ARTICLE 12.
* * *
12.1. * * *
ARTICLE 7.
MISCELLANEOUS PROVISIONS
13.1. ASSIGNMENT. Neither party may sell, assign, transfer or otherwise
convey any of its rights or delegate any of its duties under this Agreement
without the prior written consent of the other party, except that a party's
rights hereunder may be transferred to a successor of all or
____________________
* * * 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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substantially all of the business and assets of the party (no matter how the
transaction or series of related transactions is structured).
13.2. ENTIRE AGREEMENT. The Agreement constitutes the entire understanding
and agreement between the parties, and supersedes all previous agreements
(whether written or oral) concerning the subject matter hereof. The Agreement
may not be amended or supplemented except by a written document executed by the
parties to the Agreement.
13.3. GOVERNING LAW. The Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, without giving effect to its
laws or rules relating to conflicts of law.
13.4. NOTICE. All notices, statements and reports required or permitted by
this Agreement shall be in writing and deemed to have been effectively given and
received: (i) five (5) business days after the date of mailing if sent by
registered or certified U.S. mail, postage prepaid, with return receipt
requested; (ii) when transmitted if sent by facsimile, provided a confirmation
of transmission is produced by the sending machine and a copy of such facsimile
is promptly sent by another means specified in this section; or (iii) when
delivered if delivered personally or sent by express courier service. Notices
shall be addressed as follows:
For DKC: For Salon:
drkoop.com, Inc. Salon Internet, Inc.
8920 Business Park Drive 706 Mission St., 3rd Floor
Austin, TX 78759 San Francisco, CA 94013
Attn: Chief Financial Officer Attn: Andrew Ross
Either party may change its address for the purpose of this paragraph by
notice given pursuant to this paragraph.
13.5. FORCE MAJEURE. Neither party hereto shall be in default hereunder by
reason of its delay in the performance or failure to perform any of its
obligations hereunder for any event, circumstance, or cause beyond its control
such as, but not limited to, acts of God, strikes, lock-outs, general
governmental orders or restrictions, war, threat of war, hostilities,
revolution, riots, epidemics, power shortages, fire, earthquake or flood. The
party affected by any such event shall notify the other party within a maximum
period of fifteen (15) days from its occurrence. The performance of the
Agreement shall then be suspended for as long as any such event shall prevent
the affected party from performing its obligations under the Agreement.
13.6. SEVERABILITY. The provisions of the Agreement are severable, and in
the event any provision hereof is determined to be invalid or unenforceable,
such invalidity or unenforceability shall not in any way affect the validity or
enforceability of the remaining provisions hereof.
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13.7. HEADINGS; COUNTERPARTS. The headings of the articles and several
paragraphs of the Agreement are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or interpretation of the
Agreement. This Agreement may be signed in counterparts.
13.8. WAIVER. The waiver of a default hereunder by one party may be
effected only by a written acknowledgment signed by the other party and shall
not constitute a waiver of any other default. The failure of either party to
enforce any right or remedy for any one default shall not be deemed a waiver of
said right or remedy if the party persists in such default or commits any other
default, nor shall such failure in any way affect the validity of the Agreement
or any part hereof.
13.9. INDEPENDENT PARTIES. Nothing in the Agreement shall be deemed to
constitute, create, give effect to or otherwise recognize a partnership, joint
venture or formal business entity of any kind; and the rights and obligations of
the parties shall be limited to those expressly set forth herein.
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be duly
executed as of the Effective Date.
drkoop.com, Inc. Salon Internet, Inc.
Signature: /s/ Ian Bagnall Signature: /s/ Andrew Ross
------------------------- ------------------------------
Name: Ian Bagnall Name: Andrew Ross
------------------------------ -----------------------------------
Title: Vice President, Business Title: Vice President, Business
Development Development
----------------------------- ----------------------------------
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EXHIBIT A
DKC CONTENT
15
EXHIBIT B
SALON CONTENT
EXHIBIT C
ON-LINE SERVICE AGREEMENT
EXHIBIT D
DKC TRADEMARKS
TRADEMARKS:
[LOGO]
a drkoop.com
COMMUNITY
EXHIBIT E
SALON TRADEMARKS
Preferred Partner Agreement - DrKoop.com Inc. and Salon Internet Inc.
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