EXHIBIT 10.17
AMENDMENT NO. 1
TO
SETTLEMENT AGREEMENT
THIS AMENDMENT NO. 1 TO THE SETTLEMENT AGREEMENT (this
"Amendment") is entered into as of January 24, 2000 between Omni Nutraceuticals,
Inc., a Utah corporation (the "Company") and Xxxx Xxxxx, an individual residing
at 0000 Xxxxxxx Xxxxx, Xxxxx xxx Xxx, Xxxxxxxxxx 00000 ("Xxxxx").
W I T N E S S E T H :
WHEREAS, the Company and Xxxxx have entered into that certain
Settlement Agreement dated October 8, 1999 (the "Agreement"); and
WHEREAS, the Company has entered into a Stock Purchase
Agreement with American Equities LLC ("AE") and Corporate Financial Enterprises,
Inc. ("CFE" and together with AE, the "Investors") of even date herewith (the
"Stock Purchase Agreement"); and
WHEREAS, in order to induce the Investors to enter into the
Stock Purchase Agreement, the Company and Xxxxx have been required to make
certain amendments to the Agreement, and the Company and Xxxxx are willing to do
so on the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confirmed, the parties hereto hereby agree as follows:
1. DEFINITIONS. Terms defined in the Agreement which are used herein
shall have the same meanings as set forth in the Agreement for such terms unless
otherwise defined
herein.
2. AMENDMENTS TO AGREEMENTS. Upon the occurrence of the Effective
Time (as defined in Section 3) the Agreement is hereby amended by:
(A) Adding the following to Section 3(a) of the Agreement at the
end of such Section:
"Notwithstanding anything in the foregoing to the contrary
provided, the Spin-Off shall be subject to the terms and
conditions of the Stock Purchase Agreement and the provisions of
the Company's 5% Convertible Preferred Stock, Series A."
(B) The Tax Allocation and Indemnification Agreement by and
between the Company, Xxxxx and XxxxxxXxxx.xxx ("HealthZone") is hereby
terminated and of no further force and effect.
(C) The following language is hereby added to Section 3(c):
"Notwithstanding anything in the foregoing to the contrary,
any capital to be provided to HealthZone by Xxxxx, the Investors
or any other party, shall be provided in accordance with and
subject to the terms of the Stock Purchase Agreement and except
to the extent provided therein, any and all agreements, covenants
or obligations between Omni and HealthZone (other than advances
by Omni to HealthZone up to a maximum of $75,000), including
those under any tax sharing and indemnification agreement, any
restriction, guarantee or warranty of HealthZone made to, in
favor of, or otherwise benefitting Omni or any of its officers,
directors or affiliates (other than for any indemnification
obligations of HealthZone's directors and officers as provided in
HealthZone's Articles of Incorporation, By-Laws or the provisions
of California law which shall continue as provided in the
Agreement) are hereby terminated in accordance with and subject
to the Stock Purchase Agreement. The provisions of the foregoing
Section relating to the composition of the HealthZone Board of
Directors and all restrictions on Xxxxx'x rights to manage or
operate HealthZone, including, without limitation, the provisions
of Exhibit B, or his right to vote his HealthZone shares of
Capital Stock are hereby terminated in accordance with and
subject to the Stock Purchase Agreement; provided, however,
nothing in the foregoing shall otherwise affect or limit Xxxxx'x
remaining obligations under the Agreement."
(D) Notwithstanding the provisions of Section 3(d), Xxxxx agrees
to deposit the Spin-Off Guarantee Shares with the Escrow Agent upon receipt of a
resolution adopted by the Omni Board of Directors requesting such deposit.
(E) Section 3(d)(i) of the Agreement is hereby deleted.
(F) Section 3(d)(ii) of the Agreement is hereby amended to
permit the exercise by the Company of its Put Option in whole or in part at any
time or from time to time after the date of this Agreement.
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(G) Section 3(d)(iii) of the Agreement is hereby amended to make
Xxxxx'x exercise of his Call Option subject to the receipt of the prior written
consent of the Investors.
(H) The Put and Call Options are also subject to that certain
Option Agreement dated of even date herewith by and between the Company and
Xxxxx.
(I) The provisions of Section 4(b) are hereby amended to delete
therefrom any obligation of Xxxxx to consult with the Chairman of the Board or
Chief Executive Officer of the Company concerning any matter relating to
HealthZone.
3. CONDITIONS OF EFFECTIVENESS. The amendments herein shall
become effective (the "Effective Time") on the date hereof.
4. REFERENCE OF THE EFFECT ON THE AGREEMENT.
(a) Upon the Effective Time, (i) each reference in the Agreement
to "this Agreement," "hereunder," "hereof," "herein" or words of like import
shall mean and be a reference to the Agreement as amended hereby, and (ii) each
reference to the Agreement in all other related documents shall mean and be a
reference to the Agreement, as amended hereby.
(b) Except as specifically amended above, the Agreement, and all
other related documents, shall remain in full force and effect and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as an amendment to any
provision of the Agreement nor a waiver of any of any right, power or remedy of
any party hereto, nor constitute a waiver of, or consent to any departure from,
any provision of the Agreement or any other related document.
5. GOVERNING LAW. This Amendment shall be governed by and construed
in accordance with the internal laws (as opposed to conflicts of law provisions)
of the State of California.
6. HEADINGS. Section headings in this Amendment are included herein
for convenience of reference only an shall not constitute a part of this
Amendment for any other purpose.
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7. COUNTERPARTS, ETC. This Amendment may be executed by one or more
of the parties to this Amendment on any number of separate counterparts and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument. Delivery of a duly executed counterpart copy of this Amendment
may be made by telecopy.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first above written.
OMNI NUTRACEUTICALS, INC. XXXX XXXXX
By: /s/ Xxxxx Xxxxxxx /s/ Xxxx Xxxxx
----------------------------- -----------------------
Xxxxx Xxxxxxx Xxxx Xxxxx
Chief Executive Officer
The undersigned, Xxxxxxxxx Xxxxx, hereby Consents to and agrees to be
bound by the foregoing.
/s/ Xxxxxxxxx Xxxxx
------------------------
Xxxxxxxxx Xxxxx
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