Exhibit 10.36
FIRST AMENDMENT
TO AGREEMENT BETWEEN
VITAL LIVING, INC., A NEVADA CORPORATION
AND
ARIZONA HEART INSTITUTE, INC., AN ARIZONA CORPORATION ("AHI")
THIS FIRST AMENDMENT TO THE AGREEMENT ("Amendment No. 1") is made and
entered into effective the 15 day of July, 2003, by and among Vital Living,
Inc., a Nevada corporation ("Vital"), Arizona Heart Institute, Inc., an Arizona
corporation ("AHI").
RECITALS
WHEREAS, Vital and AHI entered into a Agreement on August 21, 2001, as
supplementally by an addendum dated April 4, 2002 (The Addendum, and together
with the Agreement, collectively, the "Distribution Agreement"), whereby AHI was
to offer Vital's products as part of its general line of products to all AHI
existing cardiovascular physician customers, hospitals and any other customers
to which it currently offers product and to any new customer.
WHEREAS, as additional consideration for AHI's services Vital granted
AHI an option to purchase 1,000,000 shares of Vital's common stock at $0.35 per
share (the "Options") all as provided for in Section 7 of the Agreement. Vital
and AHI entered into a Stock Option Agreement dated August 21, 2001 (the "Option
Agreement"). The Option Agreement and Distribution Agreement are collectively
referred to as the "Agreement."
WHEREAS, Vital and AHI desire to amend the Agreement pursuant to this
Amendment No. 1.
NOW, THEREFORE, for and in consideration of the foregoing, and of the
mutual covenants, agreements, undertakings, representations and warranties
contained herein, the parties hereto agree as follows:
1.0 Net Exercise. Section 7 of the Distribution Agreement and Section 8
of the Option Agreement shall be amended as follows:
(b) Options to acquire 100,000 shares of Common Stock shall be
exercisable by net exercise. The provision for net exercise shall be as follows:
"Alternately, in AHI's discretion, the purchase price for
options to acquire 100,000 Shares of Common Stock (the "Net Option
Shares") may be satisfied by cancellation of AHI's right to acquire a
certain number of Shares. In
Vital Initial _____ AHI Initial _____
any case where AHI notifies Vital of the exercise of this Option Right
with respect to any or all of the Net Option Shares through
cancellation of AHI's right to purchase a particular number of Shares,
the number of Shares to be received by AHI on the date of exercise (the
"Exercise Date") of this Option Right shall be equal to the number of
Net Option Shares identified by AHI to be exercised under this
Agreement. In payment for the Net Option Shares, the total number of
Shares purchasable under the Option Agreement shall be reduced further
by an additional number of Shares equal to the quotient of (i) and
(ii), where (i) is the number of Net Option Shares to be exercised
multiplied by thirty-five cents ($.35) per Share; and (ii) is the
current fair market price of one Share (the "Market Price"). The Market
Price shall be determined as follows: If the common stock is traded on
a stock exchange or market, the Market Price shall be the greater of
(y) the average of the mid-points of the closing bid and asked prices
of the common stock for each of the five (5) trading days immediately
preceding the Exercise Date; or (z) the average of the closing prices
for the common stock on each of the five (5) trading days immediately
preceding the Exercise Date. If the common stock is not traded on a
stock exchange or market, the market Price shall be the highest price
at which Vital sold common stock in a bona fide transaction within the
twelve (12) month period immediately prior to the Exercise Date. If
Vital has not sold common stock within the twelve (12) month period
prior to the Exercise Date, the Market Price shall be the average price
at which the common stock was sold by Vital or a shareholder of Vital
in the three (3) most recent such transactions, calculated by taking
the sum of the products of the number of shares in each transaction by
the respective price per share received and dividing such sum by the
total number of shares sold in such transactions. If neither Vital nor
three (3) shareholders of Vital have sold common stock during the
twelve (12) month period prior to the Exercise Date, then the Market
Price shall be determined by appraisal performed by an appraiser
reasonably acceptable to Vital. The expense of such appraisal shall be
paid by Vital.
If this Option Right is exercised in part only, Vital shall,
if this Agreement is surrendered for cancellation, execute and deliver
a new Agreement of the same tenor evidencing the right of AHI to
purchase the balance of the Shares purchasable hereunder upon the same
terms and conditions as herein set forth. Upon and as of receipt by
Vital of the Purchase Form at its offices or at the office of the stock
transfer agent of Vital, in proper form for exercise and accompanied by
payment as herein provided, AHI shall be deemed to be the shareholder
of record of the Shares issuable upon such exercise, notwithstanding
that the stock transfer books of Vital may then be closed or that
certificates representing such Shares may not then actually be
delivered to AHI."
(c) Notwithstanding anything in this Agreement, when AHI has
exercised any of the Net Option Shares, AHI will not sell, in any rolling 30 day
period, in excess of 25,000 shares per such period.
Vital Initial _____ AHI Initial _____
-2-
2.0 Extension of Option Exercise Period. Section 4 of the Option
Agreement shall replace the words "two years" with the words "three years."
3.0 Change in Commission and Payment Provisions: Notwithstanding
anything in Section 6 of the Agreement to the contrary, all cash payment to be
made to AHI pursuant to such Section 6 will be paid to Cordan LLC ("Cordan").
Cordan shall also be entitled to reimbursement for all actual third party
expenses, up to $1,000, per quarter, such to the submission of bonafide receipts
relative thereto. AHI acknowledges and agrees that as a result of this
amendment, it shall no longer be entitled to any cash compensation relative to
the sale of Essentum pursuant to the terms of the Agreement.
4.0 Extension of Term. Section 8 of the Agreement is hereby modified by
restating the first sentence of this section as follows:
The Agreement will continue for four years from the effective
date of this Agreement and will automatically renew for
additional one year terms unless either party gives notice of
its intent not to renew the agreement not less than sixty (60)
days prior to the end of the then current term.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as
of the date first above written.
"Vital"
VITAL LIVING, INC., A NEVADA CORPORATION
By: S/ Xxxxxx X. Xxxxx
------------------------
Xxxxxxx X. Xxxxx, C.E.O.
"AHI"
ARIZONA HEART INSTITUTE, INC.
By: S/ Xxxxxx Xxxxxxxx
------------------------
Its: Medical Director
CORDAN LLC
By: S/ Xxxxxx Xxxxxxxx
------------------------
Its: Managing Partner
Vital Initial _____ AHI Initial _____
-3-
