{"id":42270,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/engagement-letter-commonweatlth-associates-l-p-and-drkoop-com.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"engagement-letter-commonweatlth-associates-l-p-and-drkoop-com","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/engagement-letter-commonweatlth-associates-l-p-and-drkoop-com.html","title":{"rendered":"Engagement Letter &#8211; Commonweatlth Associates L.P. and DrKoop.com Inc."},"content":{"rendered":"<pre>                                                               February 28, 2001\n\ndrkoop.com, Inc.\n225 Arizona Avenue, Suite 250\nSanta Monica, CA 90401\nAttn.: Richard Rosenblatt\n\nGentlemen:\n\n     The purpose of this letter is to confirm the engagement of Commonwealth\nAssociates, L.P., (\"Commonwealth\") by drkoop, Inc. (the \"Company\") to act as the\nCompany's exclusive financial advisor to provide financial advisory services and\nother investment banking services to the Company in connection with the possible\nsale or merger of the Company or an acquisition by the Company, whether such\ntransaction (a \"Sale Transaction\") is in the form of a merger, sale or purchase\nof assets or equity securities, or joint venture or other similar business\ncombination.\n\n     Section 1. Services.  Commonwealth will perform such of the following\n     -------------------\nfinancial advisory and investment banking services as the Company may reasonably\nrequest:\n\n     (a) Commonwealth will familiarize itself to the extent appropriate with the\nbusiness, operations, properties, financial condition and prospects of any\nprospective Sale Transaction candidate, it being understood that Commonwealth\nshall, in the course of such familiarization, rely entirely upon publicly\navailable information and such other information as may be supplied by the\nCompany or such candidate, without independent investigation;\n\n     (b) Commonwealth will advise and assist the Company in developing a general\nstrategy for accomplishing a Sale Transaction;\n\n     (c) Commonwealth will advise and assist the Company in identifying\npotential Sale Transaction candidates and will on behalf of the Company, contact\nsuch potential Sale Transaction candidates as the Company may designate;\n\n     (d) Commonwealth will advise and assist the Company in the course of its\nnegotiation of a Sale Transaction with a potential acquiror or acquiree and will\nparticipate directly in such negotiations. It is understood that you will be\nunder no obligation to enter into a Sale Transaction and you will be within your\nrights declining any offer made in connection with a Sale Transaction; and\n\n     (e) Commonwealth will render such other financial advisory and investment\nbanking services as may from time to time be agreed upon by Commonwealth and the\nCompany, including the issuance of any fairness opinions in connection with any\nSale Transaction.\n\n \nIn connection with our activities on the Company's behalf, the Company will\nfurnish us and any potential Sale Transaction candidates approved by the Company\nwith all information (the \"Information\") which we may reasonably request and is\nreasonably acceptable to the Company and will provide us and any potential Sale\nTransaction candidates approved by the Company reasonable access to the\nCompany's officers, directors, accountants and counsel; provided, however, that\n                                                        --------  -------\nprior to the delivery of such information, a potential Sale Transaction\ncandidate shall have signed and delivered a confidentiality agreement acceptable\nto the Company. The Company represents and warrants that to the best of its\nknowledge the information will be true, accurate and complete and will not\ncontain any untrue statement of a material fact or omit to state any material\nfact required to be stated therein or necessary to make the statements therein\nnot misleading. The Company further represents and warrants that any projections\nprovided to us or contained in any materials prepared by the Company with\nrespect to a Sale Transaction will have been prepared in good faith. The Company\nacknowledges and agrees that, in rendering our services hereunder, we will be\nusing and relying on the Information (and information available from public\nsources and other sources which we deem to be reliable) without independent\nverification thereof and without independent appraisal of any of the Company's\nassets. We do not assume responsibility for the accuracy or the completeness of\nthe Information or any other information regarding the Company or any\nprospective Sale Transaction candidate.\n\n     Section 2. Fees. The Company shall pay to Commonwealth for its services\n     ---------------\nhereunder a cash fee equal to two percent (2%) of the Total Consideration\nreceived or paid by the Company and its shareholders, but in no event less than\n$600,000, such fee to be earned, due and payable upon the consummation of a Sale\nTransaction and payable at the closing thereof unless otherwise provided herein;\nprovided, however, that in the event the Total Consideration is less than $10\nmillion than the minimum payment shall only be $200,000, it being understood\nthat this proviso shall not apply in the event such consideration is paid in\nsecurities of the Company and such securities (on a fully-diluted basis)\nrepresent 25% or more of the outstanding common stock of the Company.\n\nFor purposes of this Agreement, \"Total Consideration\" shall mean the total value\nof all cash, securities, or other property paid at the closing of a Sale\nTransaction to or by the Company or its shareholders or to be paid in the future\nto them with respect to such Sale Transaction as provided below (other than\npayments of interest or dividends) in respect of (i) the assets of the acquired\ncompany, (ii) the capital stock of the acquired company (and any securities\nconvertible into options, warrants or other rights to acquire such capital\nstock) and (iii) the assumption, directly or indirectly (by operation of law or\notherwise), of any indebtedness of the acquired company for borrowed money, less\nall cash and cash equivalents held by the acquired company at closing. In the\nevent a Sale Transaction is consummated in one or more steps, including without\nlimitation, any additional consideration paid or to be paid in any subsequent\nstep in the Sale Transaction including payments pursuant to promissory notes\ndelivered to the acquired company in connection with a Sale Transaction in\nrespect of the items set forth in (i) - (iii) above, shall be included in the\ndefinition of \"Total Consideration\".\n\n                                       2\n\n \nIf all or a portion of the Total Consideration paid in the Sale Transaction is\nother than cash or negotiable securities then the value of such non-cash\nconsideration shall be the fair market value thereof on the date the Sale\nTransaction is consummated as mutually agreed upon in good faith by the Company\nand us. If such non-cash consideration consists of common stock, convertible\npreferred stock or other convertible security, options, warrants or other rights\nfor which a public trading market for such security or underlying security\nexisted prior to consummation of the Sale Transaction, then the value of such\nsecurities shall be determined by the closing or last sales price of such\nsecurity or underlying security on the date of the consummation of the Sale\nTransaction. If no public market exists for the common stock, options, warrants\nor rights issued in the Sale Transaction, then the value of such securities\nshall be as mutually agreed upon in good faith by the Company's Board of\nDirectors and us. If such non-cash consideration consists of preferred stock or\ndebt securities (regardless of whether a public trading market existed for such\npreferred stock or debt securities prior to the consummation of the Sale\nTransaction or exists thereafter), the value thereof shall be the fair market\nvalue of such non-cash consideration. Any amounts payable to the Company, or any\naffiliate of the Company or any shareholder of the Company in connection with a\nnon-competition agreement or any employment, consulting, licensing, supply or\nother agreement, to the extent that such amounts payable are greater than what\nwould customarily be paid on an arms-length basis to an employee, consultant,\nlicensee or supplier who had not been acquired, shall be deemed to be part of\nthe consideration paid in the Sale Transaction. If all or a portion of the Total\nConsideration payable in connection with a Sale Transaction includes future\npayments, then the Company shall pay us any additional cash fee, determined in\naccordance with this section 2, when, and if such payments are paid.\n\n     Section 3. Expenses. In addition to the compensation described in Section 2\n     -------------------\nabove, the Company agrees to promptly reimburse us, upon request from time to\ntime, not more than monthly, for all out-of-pocket expenses incurred (including,\nwithout limitation, all travel and lodging expenses, and reasonable fees and\ndisbursements of any counsel, consultants and advisors retained by us with the\nCompany's consent) in connection with our services pursuant to this agreement;\nprovided however, that unless otherwise consented to in writing by the Company\n-------- -------\nin advance such expenses shall not exceed $25,000 in the aggregate.\n\n     Section 4. Indemnity. Because we will be acting on the Company's behalf, it\n     --------------------\nis our practice to receive indemnification. A copy of our standard\nindemnification provisions (the \"Indemnification Provisions\") is attached to\nthis agreement and is incorporated herein and made a part hereof.\n\n     Section 5. Termination of Engagement. Commonwealth's engagement hereunder\n     ------------------------------------\nmay be terminated by either the Company or Commonwealth at any time, with or\nwithout cause, upon written advice to that effect to the other party; provided,\n                                                                      --------\nhowever, that notwithstanding any such termination, Commonwealth will be\n-------\nentitled to 100% of its full fee under Section 2 hereof in the event that at any\ntime prior to the expiration of 12 months after such termination, a Sale\nTransaction is consummated with any party introduced to the Company by\nCommonwealth, or who the Company requested that we provide any services\nhereunder in connection therewith \n\n                                       3\n\n \nduring the term of Commonwealth's engagement hereunder (\"Commonwealth\nProspects\"). Not more than 10 business days after termination, Commonwealth\nshall provide in writing its proposed list of Commonwealth Prospects which shall\nbe binding unless the Company provides a written objection within 10 days of\nreceipt whereupon any dispute shall be resolved in accordance with Section 7\nherein. The provisions of this Section 5 and Sections 2, 3 and 4 hereof shall\nsurvive such termination.\n\n     Section 6. Successors and Assigns. The benefits of this Agreement shall\n     ---------------------------------\ninure to the respective successors and assigns of the parties hereto and of the\nindemnified parties hereunder and their successors and assigns and\nrepresentatives, and the obligations and liabilities assumed in this agreement\nby the parties hereto shall be binding upon their respective successors and\nassigns; provided, that the rights and obligations of either party under this\nagreement may not be assigned without the prior written consent of the other\nparty hereto and any other purported assignment shall be null and void.\n\n     Section 7. Miscellaneous.  \n     ------------------------\n\n     (a) The validity and interpretation of this Agreement shall be governed by\nthe law of the State of New York applicable to agreements made and to be fully\nperformed therein. Commonwealth and the Company will attempt to settle any claim\nor controversy arising out of this Agreement through consultation and\nnegotiation in good faith and a spirit of mutual cooperation. If those attempts\nfail, then the dispute will be mediated by a mutually acceptable mediator to be\nchosen by Commonwealth and the Company within 15 days after written notice from\neither party demanding mediation. Neither party may unreasonably withhold\nconsent to the selection of a mediator, and the parties will share the costs of\nthe mediation equally. Any dispute which the parties cannot resolve through\nnegotiation or mediation within six months of the date of the initial demand for\nit by one of the parties may then be submitted to binding arbitration under the\nrules of the American Arbitration Organization of New York for resolution. The\nuse of mediation will not be construed under the doctrine of latches, waiver or\nestoppel to affect adversely the rights of either party. Nothing in this\nparagraph will prevent either party from resorting to judicial proceedings if\n(a) good faith efforts to resolve the dispute under these procedures have been\nunsuccessful or (b) interim relief from a court is necessary to prevent serious\nand irreparable injury.\n\n     (b) The Company expressly acknowledges that all opinions and advice\n(written or oral) given by Commonwealth to the Company in connection with\nCommonwealth's engagement are intended solely for the benefit and use of the\nCompany.\n\n     (c) The Company is a sophisticated business enterprise that has retained\nCommonwealth for the limited purposes set forth in this Agreement, and the\nparties acknowledge and agree that their respective rights and obligations are\ncontractual in nature. Each party disclaims an intention to impose fiduciary\nobligations on the other by virtue of the engagement contemplated by the\nAgreement, and each party agrees that there is no fiduciary relationship between\nthem.\n\n                                       4\n\n \nThis Agreement constitutes the entire agreement of the parties with respect to\nthe matters herein referred and supersedes all prior agreements and \nunderstandings, written and oral, between the parties with respect to the\nsubject matter hereof including that certain engagement letter dated June 5,\n2000, that certain Placement Agency Agreement dated June 23, 2000, and that\ncertain advisory agreement dated August 18, 2000 between the Company and\nCommonwealth. Neither this Agreement nor any term hereof may be changed, waived\nor terminated orally, except by an instrument in writing signed by the party\nagainst which enforcement of the change, waiver or termination is sought.\n\nPlease confirm that the foregoing is in accordance with your understandings and\nagreements with Commonwealth Associates, L.P. by signing and returning to\nCommonwealth the two copies of this letter enclosed herewith.\n\n                                        Very truly yours,\n\n\n\n                                        COMMONWEALTH ASSOCIATES, L.P.\n\n\n\n                                        By:  \/s\/ DAVID BORIS\n                                           ______________________________\n\n\nACCEPTED AND AGREED AS OF\nTHE DATE FIRST ABOVE WRITTEN:\n\n\ndrkoop.com, Inc.\n\n\nBy:  \/s\/ STEPHEN PLUTSKY\n   -----------------------\n\n                                       5\n\n \n                          INDEMNIFICATION PROVISIONS\n\n     drkoop.com, Inc. (the \"Company\") agrees to indemnify and hold harmless\nCommonwealth Associates, L.P. (\"Commonwealth\") against any and all losses,\nclaims, damages, obligations, penalties, judgments, awards, liabilities, costs,\nexpenses and disbursements (and any and all actions, suits, proceedings and\ninvestigations in respect thereof and any and all legal and other costs,\nexpenses and disbursements in giving testimony or furnishing documents in\nresponse to a subpoena or otherwise), including, without limitation, the costs,\nexpenses and disbursements, reasonably incurred, as and when incurred, of\ninvestigating, preparing or defending any such action, suit, proceeding or\ninvestigation (whether or not in connection with litigation in which\nCommonwealth is a party), directly or indirectly, caused by, relating to, based\nupon, arising out of, or in connection with Commonwealth's acting for the\nCompany in connection with the Agreement, dated February 15, 2001, between the\nCompany and Commonwealth to which these indemnification provisions are attached\nand form a part (the \"Agreement\"), except to the extent primarily caused by the\ngross negligence or willful misconduct of Commonwealth. The Company also agrees\nthat Commonwealth shall not have any liability (whether direct or indirect, in\ncontract or tort or otherwise) to the Company for or in connection with the\nengagement of Commonwealth, except to the extent that any such liability is\nfound in a final judgment by a court of competent jurisdiction (not subject to\nfurther appeal) to have resulted primarily from Commonwealth's gross negligence\nor willful misconduct.\n\n     The indemnification provisions shall be in addition to any liability which\nthe Company may otherwise have to Commonwealth or the persons indemnified below\nin this sentence and shall extend to the following: Commonwealth, its affiliated\nentities, partners, employees, legal counsel, agents and controlling persons\n(within the meaning of the federal securities laws), and the officers,\ndirectors, employees, legal counsel, agents and controlling persons of any of\nthem. All references to Commonwealth in these indemnification provisions shall\nbe understood to include any and all of the foregoing.\n\n     If any action, suit, proceeding or investigation is commenced, as to which\nCommonwealth proposes to demand indemnification, it shall notify the Company\nwith reasonable promptness; provided, however, that any failure by Commonwealth\n                            --------  -------\nto notify the Company shall not relieve the Company from its obligations\nhereunder except to the extent that the Company is materially prejudiced\nthereby. If the Company so elects, or is requested by Commonwealth, the Company\nwill assume the defense of such action, suit, proceeding or investigation,\nincluding the employment of counsel reasonably acceptable to Commonwealth, and\nthe payment of the reasonable fees and disbursements of such counsel. In the\nevent, however, that the Company fails to promptly assume the defense thereof\nwith counsel reasonably acceptable to Commonwealth, or Commonwealth determines\nin its reasonable judgment that it has one or more material defenses different\nthan or in addition to those of the Company, then Commonwealth shall have the\nright to retain one counsel (in addition to any local counsel) of its own choice\nto represent it, and the Company shall pay the reasonable fees, expenses and\n\n                                       6\n\n \ndisbursements of such counsel; and such counsel shall, to the extent consistent\nwith its professional responsibilities, cooperate with the Company and any\ncounsel designated by the Company. The Company shall not be liable for any\nsettlement of any claim against Commonwealth without the Company's prior written\nconsent, which consent shall not be unreasonably withheld. The Company shall\nnot, without the prior written consent of Commonwealth, which shall not be\nunreasonably withheld, settle or compromise any claim, or permit a default or\nconsent to the entry of any judgment in respect thereof, unless such settlement,\ncompromise or consent includes, as a unconditional term thereof, the giving by\nthe claimant to Commonwealth of an unconditional release from all liability in\nrespect of such claim.\n\n     In order to provide for just and equitable contribution, if a claim for\nindemnification pursuant to these indemnification provisions is made but it is\nfound in a final judgment by a court of competent jurisdiction (not subject to\nfurther appeal) that such indemnification may not be enforced in such case, even\nthough the express provisions hereof provide for indemnification in such case,\nthen the Company, on the one hand, and Commonwealth, on the other hand, shall\ncontribute to the losses, claims, damages, obligations, penalties, judgments,\nawards, liabilities, costs, expenses, and disbursements to which the indemnified\npersons may be subject in accordance with the relative benefits received by the\nCompany, on the one hand, and Commonwealth, on the other hand, and also the\nrelative fault of the Company, on the one hand, and Commonwealth, on the other\nhand, in connection with the statements, acts or omissions which resulted in\nsuch losses, claims, damages, obligations, penalties, judgments, awards,\nliabilities, costs, expenses or disbursements and the relevant equitable\nconsiderations shall also be considered. No person found liable for a fraudulent\nmisrepresentation shall be entitled to contribution from any person who is not\nalso found liable for such fraudulent misrepresentation. Notwithstanding the\nforegoing, Commonwealth shall not be obligated to contribute any amount\nhereunder that exceeds the amount of fees previously received by Commonwealth\npursuant to this Agreement.\n\n     Neither termination nor completion of the engagement of Commonwealth\nreferred to above shall affect these indemnification provisions which shall then\nremain operative and in full force and effect.\n\n                                       7\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7359],"corporate_contracts_industries":[9438],"corporate_contracts_types":[9613,9620],"class_list":["post-42270","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-drkoopcom-inc","corporate_contracts_industries-health__misc","corporate_contracts_types-operations","corporate_contracts_types-operations__services"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42270","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42270"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42270"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42270"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42270"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}