REVERSE SPLIT tomorrow or Monday! I missed this yesterday but it's there if you read it all:
"For purposes of clarity, the reverse split on or about
March 2, 2012 will not affect the conversion rate."
Exhibit 10.1
February 24, 2012
The Cellular Connection, Ltd
PO Box 562
Richmond Hill, Ontario
L4B 4R6
Re: Side Letter Agreement regarding the Convertible Secured Promissory Notes
by and between Vital Products, Inc. (hereinafter the "Company") and you
Dear Sirs:
This Side Letter Agreement ("Agreement") entered into on the date of this
letter, by and between the Company and you will serve to amend and add certain
terms to the Convertible Secured Promissory Notes issued by Vital Products,
Inc. on June 12, 2009, November 18, 2009, March 26, 2010, June 29, 2010,
September 28, 2010, December 10, 2010 and February 25, 2011 (the "Notes").
Capitalized terms used herein which are not otherwise defined shall have the
same meaning as those given to them in the Notes.
For good and valuable consideration, both parties agree that the Notes will
be amended as follows:
Face Amount of the Note
As of February 24, 2012, the Face Amount of the Notes will be combined into one
note and became U.S. $177,523.20
Article 2. Maturity
The Face Amount of this Note is payable February 24, 2013 (the "Maturity
Date").
Article 3. Interest
The outstanding Face Amount of the Note shall increase by 20% on
February 24, 2013. The outstanding Face Amount of the Note shall increase by
another
20% on February 24, 2014 and again on each one year anniversary of
February 24, 2014 until the Note has been paid in full.
Article 5.2 Conversion Privilege
The text under subsection (a) and (c) of Article 5.2 will be removed and
replaced with the following:
(a) The Company shall have the right to convert the Note into shares of the
Company's common stock (the "Common Stock") at any time prior to the
Maturity Date. The number of shares of Common Stock issuable upon the
conversion of the Note shall be determined pursuant to Article 5.2(c)
below. Any fractional shares that occur as a result of conversion shall
be rounded up or down, as the case may be, to the nearest whole share.
(c) Conversion Rate - The Conversion Price for the Note shall be set at
$0.0002 and shall be subject to adjustment as follows:
(i) If the Company, at any time while this Note is
outstanding: (i) subdivides outstanding shares of
Common Stock into a larger number of shares, (ii)
combines(including by way of reverse stock split)
outstanding shares of Common Stock into a smaller
number of shares, or (iii) issues by reclassification
of shares of the Common Stock any shares of capital
stock of the Company, then in each case the
Conversion Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any)
outstanding immediately before such event and of which
the denominator shall be the number of shares of Common
Stock outstanding immediately after such event. Any
adjustment made pursuant to this Article 5.3(c)(i) shall
become effective immediately after the record date for
the determination of stockholders entitled to receive
such dividend or distribution and shall become effective
immediately after the effective date in the case of a
subdivision, combination or re classification. For
purposes of clarity, the reverse split on or about
March 2, 2012 will not affect the conversion rate.
(ii) The Company shall not amend its Articles of Incorporation
(as amended from time to time), its By-laws or
participate in any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action for the purpose
of avoiding or seeking to avoid the observance or
performance of any of the terms of this Note to be
observed or performed by the Company, including without
limitation this Article 5.3(c), but shall at all times
in good faith assist in carrying out all such action as
may be reasonably necessary or appropriate in order to
protect the rights of the Investor against dilution or
other impairment as provided herein.
(iii) All calculations under this Article 5.2(c) shall be
made to the nearest cent.
(iv) The Company shall not be required upon the exercise of
this Note to issue any fractional shares.
No other terms, rights or provisions of the Note should be considered to have
been modified by the terms of this Agreement and each party retains all other
rights, obligations, privileges and duties contained in the Notes.
Sincerely,
/s/Michael Levine
-------------------
Michael Levine
AGREED AND ACCEPTED:
Signature: /s/Stuart Turk
------------------------------
Printed Name: Stuart Turk
Date: February 24, 2012
