0001104659-06-043707.txt : 20060627 0001104659-06-043707.hdr.sgml : 20060627 20060627093926 ACCESSION NUMBER: 0001104659-06-043707 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20060627 DATE AS OF CHANGE: 20060627 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: VITAL LIVING INC CENTRAL INDEX KEY: 0001145700 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 880485596 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-79189 FILM NUMBER: 06925897 BUSINESS ADDRESS: STREET 1: 5080 NORTH 40TH STREET, SUITE 105 CITY: PHOENIX STATE: AZ ZIP: 85018 BUSINESS PHONE: 602-952-9909 MAIL ADDRESS: STREET 1: 5080 NORTH 40TH STREET, SUITE 105 CITY: PHOENIX STATE: AZ ZIP: 85018 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SKYEPHARMA PLC CENTRAL INDEX KEY: 0001018117 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 000000000 STATE OF INCORPORATION: X0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 105 PICADILLY CITY: LONDON W1J 7NJ STATE: X0 BUSINESS PHONE: 0114417149 MAIL ADDRESS: STREET 1: 105 PICADILLY CITY: LONDON W1J 7NJ STATE: X0 SC 13D/A 1 a06-14253_1sc13da.htm AMENDMENT

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D/A

Under the Securities Exchange Act of 1934
(Amendment No. 6)

VITAL LIVING, INC.

(Name of Issuer)

Common Stock, par value $0.001 per share

(Title of Class of Securities)

92846Y100

(CUSIP Number)

DONALD NICHOLSON	KATHRYN A. CAMPBELL, ESQ.
SKYEPHARMA PLC	SULLIVAN & CROMWELL LLP
105 PICCADILLY	1 NEW FETTER LANE
LONDON W1J 7NJ, ENGLAND	LONDON EC4A 1AN, ENGLAND
+44 20 7491 1777	+44 20 7959 8900

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

June 13, 2006

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No.

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) SKYEPHARMA PLC 330387911

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			x

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) OO

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization ENGLAND AND WALES

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 0

			8.	Shared Voting Power 33,493,599

			9.	Sole Dispositive Power 33,493,599

			10.	Shared Dispositive Power 0

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 33,493,599

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) x

	13.	Percent of Class Represented by Amount in Row (11) 26%

	14.	Type of Reporting Person (See Instructions) CO

SkyePharma PLC, a company incorporated under the laws of England and Wales (“SkyePharma”), hereby amends and supplements its Statement on Schedule 13D, as heretofore amended and supplemented with respect to the Common Stock, par value $0.001 per share (the “Common Stock”), of Vital Living, Inc., a Nevada corporation (the “Issuer”). Except as amended and supplemented hereby, SkyePharma’s Statement on Schedule 13D as heretofore amended and supplemented remains in full force and effect.
ITEM 2.	IDENTITY AND BACKGROUND
	Annex A is hereby amended and restated as set forth in Annex A hereto. Except as amended hereby, Item 2 remains in full force and effect.
Item 3	Source and Amount of Funds or Other Consideration
	The consideration for the purchase of the 12,500,000 shares of Common Stock of the Issuer pursuant to an agreement between the Issuer, SkyePharma and VTLV LLC, dated June 13, 2006 (the “Agreement”) was the termination by SkyePharma of an outstanding debt owed by the Issuer to SkyePharma. The aggregate amount of the debt, which arose pursuant to the Development and License Agreement, dated as of August 20, 2003, by and among E-Nutriceuticals, Inc., the Issuer, Jagotec AG, and SkyePharma, as amended by Amendment No. 2 to the Development and License Agreement, dated as of November 19, 2003, was U.S.$750,000.
ITEM 4	PURPOSE OF TRANSACTION
	Item 4 is hereby amended to read as follows: The purpose of the transaction was to settle certain outstanding debts owed by the Issuer to SkyePharma and, in doing so, to make an investment by SkyePharma in the Common Stock of the Issuer. SkyePharma also sold its interests in the Issuer's 12% Senior Secured Convertible Notes due 2008 (the “Convertible Notes”) and Series D Preferred Stock (the “Preferred Stock”) to VTLV LLC for U.S.$416,666. SkyePharma is continuously evaluating the business and business prospects of the Issuer, and its present and future interests in, and intentions with respect to the Issuer and at any time may decide to purchase any additional shares or to dispose of any or all of the shares of Common Stock or Warrants currently owned by it. SkyePharma currently intends to exercise its rights as shareholder in the Issuer, and in connection therewith, may, from time to time, (i) have discussions with management and/or other shareholders of the Issuer concerning various operational and financial aspects of the Issuer's business, (ii) make one or more proposals to the Issuer or other shareholders of the Issuer relating to joint ventures, mergers, business combinations or extraordinary transactions, and (iii) solicit proxies.
ITEM 5.	INTEREST IN SECURITIES OF THE ISSUER
	Item 5 is hereby amended to read as follows: Pursuant to the Agreement between the Issuer, SkyePharma and VTLV LLC, dated June 13, 2006, SkyePharma received 12,500,000 shares of Common Stock from the Issuer in exchange for the termination of certain outstanding debts owed by the Issuer to SkyePharma. Also under the Agreement, VTLV LLC purchased all of the Convertible Notes and shares of Preferred Stock held by SkyePharma for $416,666. The shares of Common Stock were not acquired on a price-per-share basis. The Issuer and a majority of the holders of the Convertible Notes and the Issuer's warrants expiring December 16, 2008 (the "Warrants"), agreed to reset effective October 15, 2004 the conversion price of the Convertible Notes and the exercise price of the Warrants to $0.25, and the number of securities issuable upon exercise of each Warrant has been adjusted upward in accordance with the terms of Section 5 of the Warrants (the "Reset Agreement"). SkyePharma consented to this adjustment on November 16, 2004. SkyePharma beneficially owns 29,493,599 shares of Common Stock (including 307,493 shares of Common Stock to which SkyePharma is entitled as liquidated damages under a previous registration rights agreement with Vital Living) and Warrants expiring December 16, 2008 exercisable for 4,000,000 shares of Common Stock at an exercise price of $0.25, or 26% of the 128,790,217 shares that would be outstanding if SkyePharma exercised its Warrants (based upon 124,790,217 shares of Common Stock outstanding as of June 5, 2006). As of and following the date of the Agreement, SkyePharma no longer beneficially owns the 1,000,000 shares of Preferred Stock of the Issuer or the $1,000,000 aggregate principal amount of Convertible Notes, each of which were convertible into shares of Common Stock.

	Pursuant to the Stockholders' Agreement, dated as of August 20, 2003 (the "Stockholders' Agreement"), as amended on January 13, 2004 between the Issuer and Stuart Benson ("Mr. Benson"), Donald Hannah ("Mr. Hannah", and with Mr. Benson, the "Founders Group"), Fifth Avenue Capital, Inc. ("Fifth Avenue Capital") and Stephen Morris ("Mr. Morris", and with Fifth Avenue Capital, the "Morris Group"), and SkyePharma (collectively, the "Stockholders"), each Stockholder agreed to vote its Common Stock and other voting securities and take other action necessary to elect directors as provided therein. Mr. Benson is the beneficial owner of 10,980,000 shares of Common Stock representing approximately 8.8% of the outstanding Common Stock. Mr. Hannah is the beneficial owner of 2,110,788 shares of Common Stock representing approximately 1.7% of the outstanding Common Stock. Fifth Avenue Capital is the beneficial owner of 8,314,394 shares of Common Stock representing approximately 6.7% of the outstanding Common Stock. Mr. Morris is a principal of Fifth Avenue Capital. Mr. Morris is individually the beneficial owner of 8,314,394 shares of Common Stock representing approximately 6.7% of the outstanding Common Stock. SkyePharma has sole power to dispose of the Common Stock beneficially owned by it and, by virtue of the Stockholders’ Agreement, may be deemed to have shared power to vote the Common Stock owned by it. SkyePharma disclaims beneficial ownership of the shares of Common Stock owned by Mr. Benson, Mr. Hannah, Mr. Morris and Fifth Avenue Capital, each of whom has shared power to vote or direct the vote and sole power to dispose or direct the disposition of such shares of Common Stock beneficially owned by such person. Mr. Benson, a citizen of the United States of America, is the President and Chief Executive Officer of Vital Living. Mr. Hannah, a citizen of the United States of America, is a Chairman of the Board of Directors of Vital Living. The business address for Mr. Benson and Mr. Hannah is 5080 North 40th Street, Suite 105, Phoenix, Arizona 85018. Mr. Morris, a citizen of the United Kingdom, is the president of Fifth Avenue Capital. His principal address is 8 the Meadows, Camps Bay, Cape Town, South Africa. Fifth Avenue Capital, a British Virgin Islands corporation, is a company that invests in international business opportunities, with its principal offices located at Suite 1601-1603, Kinwick Centre, 32 Hollywood Road, Central Hong Kong. To the knowledge of SkyePharma, none of such persons during the last five years, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. No person other than SkyePharma has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, its Common Stock or Warrants.
ITEM 6.	CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
	Item 6 is hereby supplemented to include the following: Pursuant to the Agreement between the Issuer, SkyePharma and VTLV LLC, dated June 13, 2006, SkyePharma received 12,500,000 shares of Common Stock from the Issuer in exchange for the termination of certain outstanding debts owed by the Issuer to SkyePharma. Also under the Agreement, VTLV LLC purchased all of the Convertible Notes and shares of Preferred Stock held by SkyePharma for U.S.$416,666. In connection with acquisition of the shares of Common Stock, the Issuer and SkyePharma entered into a Registration Rights Agreement, dated as of June 13, 2006 (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, in the event that the Issuer proposes to register shares of Common Stock under the Securities Act of 1933, SkyePharma may, subject to certain exceptions, include its shares of Common Stock in the Issuer’s registered offering.
ITEM 7.	MATERIALS TO BE FILED AS EXHIBITS.
	Exhibit 1.	Registration Rights Agreement between Vital Living, Inc. and SkyePharma PLC, dated as of June 13, 2006.
	Exhibit 2.	Agreement between Vital Living, Inc. and SkyePharma PLC, dated as of June 13, 2006.

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	SkyePharma PLC June 27, 2006
	Date
	/s/ Donald Nicholson
	Signature
	Donald Nicholson Finance Director
	Name/Title

ANNEX A

NAME	POSITION	PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND ADDRESS(1)	CITIZENSHIP
Dr. Argeris (Jerry) Karabelas	Non-Executive Chairman	Partner at Care Capital LLC, external director of Fox Chase Cancer Center and the International Partnership for Microbicides and chairman of Human Genome Sciences, director of NitroMed Inc., Acura Pharmaceuticals Inc., Inotek Pharmaceuticals Corporation, Anadys Pharmaceuticals Inc., Renovo PLC and a member of the scientific advisory board of Epigenesis Pharmaceuticals LLP and CardioKine Inc.	American
Frank Condella	Chief Executive Officer and Executive Director		American
Donald Nicholson	Finance Director and Executive Director		British
Dr. Kenneth Cunningham	Chief Operating Officer and Executive Director		British
Michael Ashton	Executive Director		Australian
Air Chief Marshal Sir Michael Beavis	Senior Independent Non-Executive Director	Retired	British
Dr. David Ebsworth	Non-Executive Director	Non-executive chairman of Wilex AG, Xention Discovery Ltd. and Curacyte AG, and a non-executive director of Intercell AG, CuraGen Corporation and Renovo PLC.	British
Alan J. Bray	Non-Executive Director	Retired	British
R. Stephen Harris	Non-Executive Director	Non-executive chairman of Proteome Sciences plc, Sinclair Pharma plc and Conve PLC and non-executive director of Advanced Medical Solutions Group plc, Premier Research PLC and GeneMedix plc.	British
Dr. Keith Mansford	Non-Executive Director	Non-executive director of Sepracor Inc, chairman of Protemix Inc. and professor of Metabolic Biochemistry at the University of Buckingham.	British

(1) If Principal Employment is not with SkyePharma

EX-1 2 a06-14253_1ex1.htm EX-1

EXHIBIT 1

EXECUTION COPY

VITAL LIVING REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (the “Agreement”), dated as of June 13, 2006, is between SkyePharma PLC, a company incorporated under the laws of England and Wales (the “Holder”) and Vital Living, Inc., a Nevada corporation (the “Corporation”).

WHEREAS, the Holder will acquire 12,500,000 shares of the Corporation’s common stock, par value $0.001 (the “Shares”) pursuant to the terms of the agreement, dated as of the date hereof, by and among the Corporation, VTLV LLC, a Delaware limited liability company, and the Holder (the “Share Purchase Agreement”); and

NOW THEREFORE, in consideration of the mutual covenants, obligations and agreements contained herein and in the Share Purchase Agreement, the parties hereto agree as follows:

Section 1. Definitions. Except as otherwise specified herein, defined terms used in this Agreement shall have the respective meanings assigned to such terms in the Share Purchase Agreement. Unless otherwise specified all references to “days” shall be deemed to be references to calendar days. For purposes of this Agreement the following terms shall have the following meanings:

(a) “Affiliate” shall mean, with respect to any Person, any other Person who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person. For purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by appointment of directors, by contract or otherwise.

(b) “Commission” shall mean the U.S. Securities and Exchange Commission or any other Federal agency at the time administering the Securities Act.

(c) “Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended, or any successor Federa1 statute, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect from time to time.

(d) “Person” or “persons” mean any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof

(e) “Registrable Shares” shall mean the Shares held by Holder that constitute Restricted Shares.

(f) “Restricted Shares” shall mean (i) the Shares issued to the Holder pursuant to the Share Purchase Agreement, and (ii) any securities received in respect of the Shares, that (x) are held by the Holder and (y) theretofore have not been sold to the public pursuant to a registration statement under the Securities Act or pursuant to Rule 144 or that may not be freely sold by the Holder without registration under Rule 144(k).

(g) “Rule 144” shall mean Rule 144 promulgated under the Securities Act or successor or complementary rule thereto.

(h) “Securities Act” shall mean the Securities Act of 1933, as amended, or any successor Federal statute, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect from time to time.

(i) “Shares” shall mean shares of Common Stock, par value $ 0.001 per share, of the Corporation.

Section 2. Representations and Warranties of the Corporation.

(a) Representations and Warranties of the Corporation. The Corporation represents and warrants to the Holder as follows:

(i) The execution, delivery and performance by the Corporation of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate action on the part of the Corporation and the Agreement shall have been duly executed and delivered by the Corporation and is in full force and effect. The Agreement constitutes the valid and binding obligations of the Corporation, enforceable in accordance with its terms, subject as to enforcement to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors’ rights and general principles of equity.

(ii) The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, and compliance with the provisions hereof by the Corporation will not (a) violate any law or statute or order, judgment or decree of any court, administrative agency or other governmental body applicable to the Corporation, or its properties or assets, (b) conflict in any respect with or result in any breach of any of the terms or provisions or constitute (without due notice or lapse of time, or both) a default under the Certificate of Incorporation or By-laws of the Corporation, (c) result in a breach or violation of, or a default under, or acceleration of any obligations pursuant to any note, indenture, mortgage, lease, agreement, contract, understanding, arrangement or instrument (“Contracts”) to which the Corporation is a party or by which it or any of its properties or assets may be bound or affected, (d) result in any change in the rights or obligations of any party under the Contracts, or (e) result in the creation or imposition of any lien, claim, judgment, charge, mortgage, security interest, pledge, escrow equity or other encumbrance of any nature whatsoever upon any of the properties or assets of the Corporation.

(b) Representations and Warranties of the Holder. The Holder represents and warrants to the Corporation that it has all requisite power and authority to execute this Agreement, to

perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Holder. This Agreement has been duly executed and delivered by the Holder and this Agreement constitutes the legal, valid, binding and enforceable obligation of the Holder, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to, creditors’ rights and general principles of equity.

Section 3. Piggyback Registration. Subject to the terms and conditions set forth in this Agreement, if the Corporation at any time after the date hereof, proposes for any reason to register Shares under the Securities Act (other than on Form S-4 or Form S-8 promulgated under the Securities Act or any successor forms thereto, or any post-effective amendment relative to a registration statement previously filed), it shall as promptly as practicable (but in no event less than thirty (30) days prior to the date the registration statement is filed with the Commission) give written notice to the Holder of its intention to effect such registration. If within twenty (20) days of delivery of such notice the Holder submits a written request to the Corporation specifying the amount of Registrable Shares held by the Holder and the intended method of disposition of such Registrable Shares, the Corporation shall include in the registration statement and offering, the Registrable Shares specified in the request on the same terms and conditions as the Shares otherwise being sold in such registration and use its best efforts to cause such registration statement to become effective. If the managing underwriter determines in good faith and advises the Holder in writing that the inclusion in the registration statement and offering of all the Registrable Shares proposed to be included would interfere with the successful marketing of all securities proposed to be registered, then the Holder shall agree to a downward adjustment in the number of Registrable Shares to be included in such underwriting sufficient to alleviate such marketing concern (provided that if securities are being offered for the account of Persons other than the Corporation, then such securities intended to be offered for the account of such other Person shall be reduced first).

Section 4. Registration Mechanics. In connection with any registration of the Registrable Shares effected pursuant to Section 3 the Corporation shall:

(a) prepare and file the registration statement and such amendments and supplements to the registration statement and the prospectus or offering circular used in connection therewith as may be necessary to keep the registration statement current and effective and to comply with the provisions of the Securities Act and the rules and regulations thereunder with respect to the disposition of all the Registrable Shares covered by the registration statement for the period required to effect the distribution thereof, and to use its best efforts to make any corrections or updates to the registration statement or prospectus as promptly as practicable;

(b) furnish to the Holder such number of copies of any prospectus, prospectus supplement or offering circu1ar, including a preliminary prospectus, and of a full registration statement and exhibits in conformity with the requirements of the Securities Act and the rules and regulations thereunder, as the Holder may reasonab1y request in order to facilitate the disposition of such securities;

(c) use its best efforts to register or qualify the Registrable Shares covered by the registration statement under the securities or “blue sky” laws of such state jurisdictions of the United States as the Holder may reasonably request, and to accomplish any and all other acts and things which may be necessary or advisable to permit sales in such jurisdictions of such Registrable Shares and keep such registration or qualification in effect for so long as the registration statement remains in effect;

(d) in connection with an underwritten public offering, to enter into an underwriting agreement in form and substance customary under the circumstances, which shall include (i) provisions for any “lock up” period, during which the sale of Shares and securities convertible into Shares by the Corporation or its Affiliates will be restricted, that may reasonably be required by the managing underwriter thereof and (ii) indemnification and contribution provisions and procedures that are no less favorable to the underwriters than those set forth in Section 9 hereof and otherwise reasonably satisfactory to the managing underwriter;

(e) in connection with any underwritten public offering, obtain opinions of counsel to the Corporation (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriter) addressed to the Holder and the underwriters, covering such matters as are customarily covered in opinions requested in underwritten offerings of equity and convertible debt securities and such other matters as may be reasonably requested by the Holder and the underwriters (it being agreed that the matters to be covered by such opinions shall include, without limitation, the absence from the registration statement and the prospectus, including the documents incorporated by reference therein and any prospectus supplement thereto, of an untrue statement of a material fact or the omission of a material fact required to be stated therein or necessary to make the statements therein not misleading);

(f) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, notify the Holder upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material facts required to be stated therein or necessary to make the statements therein not misleading, in the light of the circumstances under which they were made, and (subject to the good faith determination of the Board of Directors of the Corporation as to whether to cease all sales under such registration statement) unless such untrue statement or omission has been made upon and in conformity with information furnished in writing to the Corporation by the Holder or any underwriter or any person who controls any of them within the meaning of Section 15 of the Securities Act or any director or officer of any of the foregoing, as the case may be, specifically for use in connection with the preparation of the registration statement, at the request of the Holder prepare and furnish to it a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the Holders of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, in the light of the circumstances under which they were made;

(g) in connection with any underwritten public offering, obtain “cold comfort” letters and updates thereof from the independent public accountants of the Corporation (and, if necessary, from the independent public accountants of any subsidiary of the Corporation or of any business acquired by the Corporation for which financial statements and financial data are, or are required to be, included in the relevant registration statement), addressed to the Holder (if the Holder has provided such letter, representations or documentation, if any, required for such “cold comfort” letter to be so addressed) and the underwriters, in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with primary underwritten offerings;

(h) use its best efforts to cause the Registrable Shares to be listed on or included for quotation on any stock exchange or trading system on which the Shares then primarily trade;

(i) provide a CUSIP number for all Registrable Securities, not later than the effective date of such registration statement;

(j) if requested by any managing underwriter or underwriters of Registrable Shares, participate and use its best efforts to cause its executive officers to participate in any “roadshow” or other marketing activities intended to aid in the successful disposition of the Registrable Shares; and

(k) upon the request of the Holder take reasonable efforts to make available for inspection by the Holder and the underwriters, if any, and their respective advisers all financial and other records, pertinent corporate documents of the Corporation and cause the Corporation’s officers, directors and employees to take reasonable efforts to supply all information reasonably requested by the Holder, the underwriters, if any, or any such adviser in connection with such registration (as long as such registration shall not have been postponed, delayed or withdrawn, or the effectiveness thereof terminated).

Section 5. Information Provided by the Holder. Whenever under this Agreement Registrable Shares are being registered, the Holder shall provide the Corporation on a timely basis with such information and materials as the Corporation may reasonably request in order to effect the registration of the Registrable Shares.

Section 6. Rule 144. With a view to making available to the Holder the benefits of Rule 144, the Corporation agrees to use its best efforts to make available adequate current public information with respect to it within the meaning of, and as required pursuant to, Rule 144(c).

Section 7. Selection of Underwriters. If the offering pursuant to any piggy back registration pursuant to Section 3 hereof is to be made by or through underwriters, the Corporation shall have the right to designate the managing underwriter which shall be reasonably satisfactory to the Holder; provided, however, that if such piggy back registration is being made in connection with a demand notice provided to the Corporation by the Holder pursuant to the Registration Rights Agreement between the Holder and the Corporation, dated as of August 20, 2003, the

Holder shall have the right to designate the same managing underwriter as appointed under such agreement.

Section 8. Expenses. All expenses incurred by the Corporation in effecting a registration and sale of Registrable Shares under this Agreement, including, without limitation, all registration and filing fees (including all expenses incidental to filing with the NASD), fees and expenses of complying with securities and “blue sky” laws, printing expenses, expenses incurred by the Corporation in marketing and assisting in the marketing of such Registrable Shares, the fees, disbursements and expenses of the managing underwriter or underwriters, the fees and expenses of counsel and independent auditors for the Corporation including fees of counsel and accountants incurred in connection with the preparation of customary opinions of counsel and independent auditors, and the reasonable fees and expenses of one counsel for the Holder, shall be borne by the Corporation, provided, however, that any underwriting commissions or concessions incurred in effecting a registration and sale of the Holder’s Registrable Shares shall not be borne by the Corporation.

Section 9. Indemnification.

(a) In connection with any registration of any Registrable Shares under the Securities Act pursuant to this Agreement, the Corporation shall indemnify and hold harmless the Holder, and the officers, directors and other Persons, if any, that may be deemed to control the Holder within the meaning of the Exchange Act, and each underwriter, broker, dealer or other Person active on behalf of the Holder, against any losses, claims, damages or liabilities, joint or several (or actions in respect thereof), to which the Holder and such Persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) (i) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the registration statement (including the documents incorporated therein by reference) under which such Registrable Shares were registered under the Securities Act, any preliminary prospectus, final prospectus or prospectus supplement contained therein or otherwise filed with the Commission, any amendment or supplement thereto or any document incident to registration or qualification of any Registrable Shares, or (ii) arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or, with respect to any prospectus or prospectus supplement, necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or (iii) arise out of any violation by the Corporation of the Securities Act or state securities or “blue sky” laws applicable to the Corporation and relating to action or inaction required of the Corporation in connection with such registration or qualification under state securities or “blue sky” laws; provided, however, that the Corporation sha1l not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue, statement or al1eged untrue statement or omission or alleged omission made in said registration statement, preliminary prospectus, final prospectus, prospectus supplement, amendment, supplement or document incident to registration or qualification of any Registrable Shares in reliance upon written information furnished to the Corporation by the Holder with respect to information regarding the Holder expressly for inclusion therein.

(b) In connection with any registration of Registrable Shares under the Securities Act pursuant to this Agreement, the Holder shall indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 9(a)) the Corporation, each director of the Corporation, each officer of the Corporation who shall sign such registration statement, each underwriter, broker, dealer or other Person acting on behalf of the Corporation and each Person, if any, who controls any of the foregoing Persons within the meaning of the Securities Act with respect to any statement or omission from such registration statement, any preliminary prospectus, final prospectus or prospectus supplement contained therein or otherwise filed with the Commission, any amendment or supplement thereto or any document incident to registration or qualification of any Registrable Shares, if such statement or omission was made in reliance upon written information furnished by the Holder to the Corporation or such underwriter expressly for inclusion in such registration statement, preliminary prospectus, final prospectus, prospectus supplement, amendment, supplement or document, provided that the liability of the Holder under this Section 9(b) shall not exceed the aggregate proceeds received by the Holder upon the sale of Registrable Shares by such investor pursuant to such registration.

(c) Promptly after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in the preceding paragraphs of this Section 9, such indemnified party will, if a claim in respect thereof is made against an indemnifying party, give written notice to the latter of the commencement of such action. In case any such action is brought against an indemnified party, the indemnifying party will be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its ejection so to assume the defense thereof, the indemnifying party shall not be responsible for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof; provided, however, that an indemnified party shall have the right to retain its own counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if such indemnified party shall have been advised in writing by counsel that representation of such indemnified party or parties by the counse1 retained by the indemnifying party or parties would be inappropriate due to actual or potential differing interests between such indemnified party or parties and any other party represented by such counsel in such proceeding.

(d) If the indemnification provided for in this Section 9 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage, liability or action referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amounts paid or payable by such indemnified party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to

information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

Section 10. Listing; Market for Shares; Legend. The Corporation shall use its best efforts to ensure that the Holder has a readily realisable market for its outstanding shares of Common Stock (the “Liquidity Covenant”). The Liquidity Covenant includes, without limitation, that (i) the Corporation shall use its reasonable best efforts to obtain a listing on the American Stock Exchange or a quotation on NASDAQ for its common stock as soon as reasonably practicable after the date hereof and (ii) in the event the Corporation fails to obtain such a listing or quotation, the Corporation shall use its best efforts to procure purchasers of Shares held by the Holder, on terms and conditions satisfactory to the Holder. Notwithstanding any other agreement between the Corporation and the Holder, the Corporation shall at the request of the Holder promptly remove any legends on the Registrable Shares at any time.

Section 11. Termination.

(a) This Agreement shall terminate and be of no further force or effect when there shall not be any Restricted Shares, provided that the rights of the Holder and obligations of the Corporation under Section 3 hereof shall earlier terminate and be of no further force or effect with respect to the Holder, and the Corporation vis-a-vis the Holder at such earlier time as it or its assigns no longer holds any Restricted Shares.

(b) Notwithstanding anything to the contrary contained herein, Section 8 of this Agreement shall survive any termination hereof and shall remain in full force and effect.

Section 12. Successors and Assigns. This Agreement shall bind and inure to the benefit of the Corporation and the Holder and the respective successors, assigns, heirs and legal representatives (as the case may be) of the Corporation and the Holder.

Section 13. No Inconsistent Rights; Other Agreements. (a) The Corporation shall not grant, and has not granted, any other Person rights to register securities of the Corporation on terms that would reasonably be likely to restrict the ability of the Corporation fully to perform its obligations to the Holder pursuant to this Agreement.

(b) The Corporation shall not amend any registration rights agreement with any other Person nor shall the Corporation waive any provision under any registration rights agreement that it would be entitled to waive thereunder if such waiver would reasonably be likely to adversely affect the Holder’s rights under this Agreement.

Section 14 Assignment. The rights granted pursuant to this Agreement may not be assigned or otherwise conveyed by the Holder or by any subsequent assign of any of such rights without the written consent of the Corporation, which consent sha1l not unreasonably be withheld; provided,

however, that no such written consent shall be required if the transfer is to any Affiliate or partner of the Holder or if such assign acquires at least a majority of the capital stock of the Corporation owned by the Holder. The rights granted pursuant to this Agreement with respect to the Restricted Shares shall be deemed to be assigned subject to the provisions of this Section 14 (with respect to such Restricted Shares) to any assign of such Restricted Shares, unless the documentation executed by the Holder to effect the transfer of such Restricted Shares provides that rights under this Agreement are not being assigned to such assign. The Holder shall be deemed to include any party to whom the Holders rights with respect to particular Restricted Shares have been assigned in accordance with this Section 14.

Section 15. Entire Agreement. This Agreement, which shall be effective as of the date hereof, contains the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous arrangements or understandings with respect thereto.

Section 16. Severability. Whenever possible, each provision or portion of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law, rule or regulation in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or a portion of any provision shall have been replaced with a provision or a portion of any provision, which shall, to the maximum extent permissible under such applicable law, rule or regulation, give effect to the intention of the parties as expressed in such invalid, illegal or unenforceable provision.

Section 17. Notices. All notices and other communications pursuant to this Agreement shall be in writing and deemed to be sufficient if delivered personally, by telecopier, sent by nationally-recognized overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following addresses:

	(a) if to the Corporation, to:
		VITAL LIVING, INC.
		5080 North 40th Street
		Suite 105
		Phoenix, AZ 85018-2147
		Attn: Chairman
		Telephone 602- 952-9909
		Facsimile: 602- 952-6907

	with a copy to:	Greenberg Traurig
		2375 East Camelback Road, Suite 700
		Phoenix, Arizona 85016
		Attention: Robert S. Kant, Esquire
		Phone: (602) 445-8302

		Fax: (602) 445-8100
		E-mail: kantr@gtlaw.com

	(b) if to the Holder, to:	SkyePharma PLC
		105 Piccadilly
		London, England WIJ 7NJ
		Attn: Donald Nicholson
		Telephone No.: +44 20 7491 1777
		Facsimile No.: +44 20 7491 3338

	with a copy to:	Sullivan & Cromwell LLP
		1 New Fetter Lane
		London, England EC4A 1AN
		Attn: Kathryn A. Campbell, Esq.
		Telephone: +44 30 7959 8580
		Facsimile No.: +44 20 7959 8950

or to such other address as the party to whom notice is tope given may have furnished to the other parties hereto in writing in accordance herewith. Any such notice or communication shall be deemed to have been delivered and received (i) in the case of personal delivery or delivery by telecopier, on the date of such delivery, (ii) in the case of a nationally-recognized overnight courier, on the next business day after the date when sent and (iii) in the case of mailing, on the third business day following that on which the piece of mail containing such communication is posted.

Section 18. Modifications; Amendments; Waiver. The terms and provisions of this Agreement may only be amended or waived either (i) with the written consent of the Corporation and the Holder or (ii) in writing by the party against whom such amendment or waiver is sought to be enforced. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver of or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

Section 19. Counterparts. This Agreement may be executed in any number of separate counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute one agreement.

Section 20. Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

Section 21. Governing Law; Submission to Jurisdiction; Selection of Forum. This Agreement shall be construed in accordance with the laws of the State of New York. Each party hereto agrees that it shall bring up any action or proceeding in respect of any claim arising out of or related to this agreement or the transactions contained in and contemplated by this Agreement, whether in tort or contract or at law or in equity, exclusively in the United States District Court

for the Southern District of New York or, if such court is not available, the Supreme Court of the State of New York (the “Chosen Courts”) and solely in connection with claims arising under this Agreement or the transactions contained in or contemplated by this Agreement (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts and agrees not to commence any action in respect of any such claim in any other court or forum, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party hereto, (iv) waives any right to a trial by jury and (v) agrees that service of process upon such party in any such action or proceeding shall be effective if notice is given in accordance with Section 17 of this Agreement. Without limiting the foregoing, each of the Corporation and the Holder hereby appoints, in the case of any such action or proceeding brought in the courts of or in the State of New York, CT Corporation System with offices on the date hereof at 111 8th Avenue, 13th Floor, New York, N.Y. 10011 to receive, for it and on its behalf, service of process in the State of New York with respect thereto, provided the Corporation and the Holder may appoint any other person, reasonably acceptable to the other party, with offices in the State of New York to replace such agent for service of process upon delivery to the other party of a reasonably acceptable agreement of such new agent agreeing to act.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first written above.

Vital Living, Inc.


	By:	/s/ Stuart Benson

	Name:		Stuart A. Benson
	Title:		CEO


SkyePharma PLC


	By:	/s/ Donald Nicholson

	Name:		Donald Nicholson
	Title:		Finance Director

EX-2 3 a06-14253_1ex2.htm EX-2

EXHIBIT 2

AGREEMENT

DATED AS OF JUNE 13, 2006

AMONG

VITAL LIVING, INC.,

SKYEPHARMA PLC,

AND

VTLV LLC

TABLE OF CONTENTS

			Page
1.	Purchase and Sale.		2
	(a)	Purchase of Securities	2
	(b)	Payment of Purchase Price	3
	(c)	Issuance of Common Shares and Cancellation of Debt	3
2.	The Company’s Representations and Warranties.		3
	(a)	Corporate Status and Authority	3
	(b)	Authorization	3
	(c)	Authorization of Common Stock	4
	(d)	No Consent or Approval Required	4
	(e)	Litigation	5
	(f)	Capitalization	5
	(g)	Agreement Not in Breach of Other Instruments	5
	(h)	SEC Reports	5
3.	VTLV’s Representations and Warranties.		6
	(a)	Status and Authority; Authorization	6
	(b)	Separate Existence	6
	(c)	Purchase for Own Account	7
	(d)	Ability to Pay	7
	(e)	Litigation	7
	(f)	Agreement Not in Breach of Other Instruments	7
4.	Skye’s Representations and Warranties.		7
	(a)	Ownership	8
	(b)	Authorization	8
	(c)	No Consent or Approval Required	8
	(d)	Agreement Not in Breach of Other Instruments	8
5.	Further Representations, Warranties, and Agreements of Skye.		9
	(a)	Ability to Bear Risk; Business and Financial Knowledge and Experience	9
	(b)	Company Information	9
	(c)	Absence of Representations and Warranties	9
	(d)	No Distribution	10
	(e)	Shares to be Restricted	10
	(f)	No Registration	10
	(g)	Legend on Certificates	10
	(h)	No Governmental Approval	11
6.	Continuation and Survival.		11
7.	Closing.		11
	(a)	Deliveries by the Company	11
	(b)	Deliveries by VTLV	11
	(c)	Deliveries by Skye	11

8.	Further Assurances.		12
9.	Brokers and Finders.		12
10.	General Provisions.		13
	(a)	Notices	13
	(b)	Binding Nature of Agreement; Assignment	14
	(c)	Entire Agreement	14
	(d)	Controlling Law	15
	(e)	Provisions Separable	15
	(f)	Indulgences Not Waivers	15
	(g)	Costs and Expenses	15
	(h)	Titles Not to Affect Interpretation	15
	(i)	Execution in Counterparts	15
	(j)	Gender	16

EXECUTION COPY

AGREEMENT (this “Agreement”) made this 13th day of June 2006, by and among VITAL LIVING, INC., a Nevada corporation (hereinafter called “the Company”); SKYEPHARMA PLC, a company incorporated under the laws of England and Wales (hereinafter called “Skye”); and VTLV LLC, a Delaware limited liability company (hereinafter called “VTLV”).

WHEREAS, Skye owns $1,000,000 in aggregate principal amount of the Company’s Senior Secured Convertible Notes acquired pursuant to the Securities Purchase Agreement by and among the Company and several investors, including Skye, dated as of December 15, 2003 (as amended September 16, 2004, October 26, 2004, and November 15, 2004) (the “Convertible Notes”), and 1,000,000 shares of the Company’s Series D Preferred Stock, par value $0.001 per share, acquired pursuant to the Subscription Agreement by and between the Company and Skye, dated as of August 15, 2003 (the “Preferred Shares”);

WHEREAS, the Company has an outstanding debt owed to Skye in the aggregate amount of U.S.$750,000 (the “Debt”) pursuant to Section 2.2(f) of the Development and License Agreement, dated as of August 20, 2003, by and among E-Nutriceuticals, Inc., the Company, Jagotec AG, and Skye, as amended by Amendment No. 2 to the Development and License Agreement, dated as of November 19, 2003 (the “Amended License Agreement”);

WHEREAS, the Company and Skye have had a long-term relationship;

WHEREAS, the Company has requested Skye to purchase shares of the Company’s common stock, par value $0.001 per share (the “Shares”) in consideration of the cancellation of the Debt owed to Skye, and Skye desires to purchase such Shares;

WHEREAS, Skye has requested the Company to purchase the Convertible Notes and the Preferred Stock from Skye for cash;

WHEREAS, the Company does not wish to make the financial expenditure to purchase the Convertible Notes or the Preferred Shares from Skye at this time; and

WHEREAS, with the approval of the Company, members of the management of the Company have formed VTLV to purchase the Convertible Notes and the Preferred Shares, and the Company hereby acknowledges and consents to the purchase of the Convertible Notes and the Preferred Shares by VTLV.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants hereinafter set forth, and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1. Purchase and Sale.

(a) Purchase of Securities. At the Closing (as herein defined), Skye shall convey, transfer, and assign to VTLV, and VTLV shall purchase and accept from Skye, the Convertible Notes (including any rights of Skye to accrued interest or penalties due in relation to the Convertible Notes for any period after December 17, 2005) and the Preferred Shares, for an aggregate purchase price equal to U.S.$416,666 (the “Purchase Price”); provided, however, that Skye and VTLV hereby agree that the conveyance, transfer, and assignment of the Convertible Notes and the Preferred Shares to VTLV pursuant to this Section 1 shall only be made by Skye upon receipt of payment of the Purchase Price; and provided, further, that if Skye terminates this Agreement pursuant to Section 7 following a failure by VTLV to make the deliveries to Skye required therein at the Closing, all rights of Skye to any accrued interest, principal or other payment or penalties due in relation to the Convertible Notes or the Preferred Shares shall continue to be outstanding until such time as the Convertible Notes and the Preferred Shares are delivered by Skye to VTLV or as otherwise agreed by the parties hereto.

(b) Payment of Purchase Price. The Purchase Price shall be payable by a certified or official bank check or a wire transfer of a non-refundable payment from VTLV to Skye at the account specified in Exhibit A on the date of this Agreement in the amount of U.S.$416,666.

(c) Issuance of Common Shares and Cancellation of Debt. The Company shall issue and sell to Skye 12,500,000 Shares in exchange for the cancellation by Skye of the Debt and Skye treating the Debt as having been paid in full by the Company.

2. The Company’s Representations and Warranties.

As of the date hereof, the Company represents and warrants as follows:

(a) Corporate Status and Authority. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the state of Nevada, and the Company has the corporate power and authority to own, operate, and lease its properties and assets and to carry on its business as it is now being conducted and to carry out the transactions contemplated hereby.

(b) Authorization. The execution, delivery, and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company, and this Agreement has been duly executed and delivered by the Company and is in full force and effect. This Agreement constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject as to (A) applicable bankruptcy, insolvency, moratorium, or similar laws relating to or affecting the rights and remedies of creditors and debtors and (B) equitable principles generally, regardless of whether such principles are considered in a proceeding at equity or at law. The execution,

delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby, and compliance with the provisions hereof by the Company will not (a) violate any law or statute or any order, judgment, or decree of any court, administrative agency, or other governmental body applicable to the Company, any subsidiary, or their respective properties or assets, (b) conflict in any respect with or result in any breach of any of the terms or provisions or constitute (with due notice or lapse of time, or both) a default under the Certificate of Incorporation or By-laws of the Company or any subsidiary, or (c) result in the creation or imposition of any lien, claim, judgment, charge, mortgage, security interest, pledge, restriction, or other encumbrance of any nature whatsoever (“Liens”) upon any of the properties or assets of the Company or any subsidiary.

(c) Authorization of Common Stock. The Shares to be issued pursuant to Section 1(c) of this Agreement have been duly authorized by all necessary corporate action of the Company, and when issued, sold, and delivered in accordance with the terms of this Agreement, will be duly authorized, validly issued and outstanding, fully paid and nonassessable and will not create or vest any preemptive or other similar rights, or cause any adjustment in the number of securities issuable pursuant to, or the conversion or exercise price of, any outstanding rights, to purchase, acquire, or subscribe to shares of the Company or securities convertible into shares of the Company by any of the beneficial holders of shares of the Company, and will be free and clear of all Liens.

(d) No Consent or Approval Required. No notices, reports, or other filings (“Filings”) are required to be made with, nor are any consents, registrations, approvals, permits, or authorizations (“Consents”) required to be obtained from, any governmental or regulatory authority, agency, commission, body, or other governmental entity, in connection with

the execution and delivery of this Agreement and the performance by the Company of its obligations hereunder, except such Consents or Filings as have already been duly and validly obtained or filed, or with respect to any Filings to be made before the Closing.

(e) Litigation. There is no action, suit, investigation, or proceeding pending against, or to the best knowledge of the Company, threatened against or affecting, the Company or any subsidiary or any of their properties or assets before any court or arbitrator or any governmental body, agency, or official.

(f) Capitalization. The number of authorized, issued, and outstanding Shares of the Company is set forth in Exhibit B. All outstanding Shares have been duly authorized and are validly issued, fully paid, and nonassessable.

(g) Agreement Not in Breach of Other Instruments. The execution and delivery of this Agreement, the consummation of the transactions hereby contemplated, and the fulfillment of the terms hereof, will not result in the breach of any term or provision of, or constitute a default under, or conflict with, or cause the acceleration of any obligation under, any agreement or other instrument of any description to which the Company is a party or by which the Company is bound, or any judgment, decree, order, or award of any court, governmental body, or arbitrator, or any law, rule, or regulation applicable to the Company.

(h) SEC Reports. The Company’s Form 10-K Report for the year ended December 31, 2004 filed with the Securities and Exchange Commission (the “SEC”) and all subsequent reports and proxy statements required to be filed by the Company thereafter (the foregoing materials being collectively referred to herein as the “SEC Reports”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof, were filed on a timely basis or on the basis of a valid extension

granted by the SEC and complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

3. VTLV’s Representations and Warranties.

As of the date hereof, VTLV represents and warrants as follows:

(a) Status and Authority; Authorization. VTLV is a limited liability company duly organized, validly existing, and in good standing under the laws of the state of Delaware. The execution, delivery, and performance of this Agreement by VTLV and the consummation of the transactions by VTLV contemplated hereby have been duly authorized by all action on the part of VTLV as a limited liability company and its members, and this Agreement has been duly executed and delivered and is in full force and effect. This Agreement constitutes the valid and binding obligations of VTLV, enforceable against VTLV in accordance with its terms, subject as to (A) applicable bankruptcy, insolvency, moratorium or similar laws relating to or affecting the rights and remedies of creditors and debtors and (B) equitable principles generally, regardless of whether such principles are considered in a proceeding at equity or at law.

(b) Separate Existence. VTLV conducts business in its own name, holds itself out and identifies itself as a separate and distinct entity under its own name, has corrected any known misunderstanding regarding its separate existence and identity, and has not held itself out to be responsible for the debts of another person. VTLV has observed all necessary formalities as a limited liability company in its dealings with each of its affiliates, and

VTLV’s assets have been separately identified and (other than cash) segregated from the assets of all other persons and held in its name or on its behalf.

(d) Ability to Pay. VTLV is able to pay its debts as they become due and has not failed to make any material payment or payments that it has been required to make, in the amount required to be paid, on the date such payment or payments were due.

(e) Litigation. There is no action, suit, investigation, or proceeding pending against, or to the best knowledge of VTLV, threatened against or affecting, VTLV or any of its properties or assets before any court or arbitrator or any governmental body, agency, or official.

(f) Agreement Not in Breach of Other Instruments. The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the fulfillment of the terms by VTLV hereof, will not violate any provision of the articles of formation or operating agreement of VTLV nor will they result in the breach of any term or provision of, or constitute a default under, or conflict with, or cause the acceleration of any obligation under, any loan agreement, note, debenture, indenture, mortgage, deed of trust, lease, contract, agreement, or other obligation of any description to which VTLV is a party or by which VTLV is bound, or any judgment, decree, order, or award of any court, governmental body, or arbitration or any law, rule, or regulation applicable to VTLV.

4. Skye’s Representations and Warranties.

As of the date hereof, Skye represents and warrants as follows:

(a) Ownership. Skye owns the Convertible Notes and the Preferred Shares, free and clear of any Liens.

(b) Authorization. The execution, delivery, and performance by Skye of this Agreement and the consummation by Skye of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Skye, and this Agreement has been duly executed and delivered by Skye and is in full force and effect. This Agreement constitutes the valid and binding obligation of Skye, enforceable against Skye in accordance with its terms, subject as to (A) applicable bankruptcy, insolvency, moratorium, or similar laws relating to or affecting the rights and remedies of creditors and debtors and (B) equitable principles generally, regardless of whether such principles are considered in a proceeding at equity or at law.

(c) No Consent or Approval Required. No Filings are required to be made with, nor are any Consents required to be obtained from, any governmental or regulatory authority, agency, commission, body, or other governmental entity, in connection with the execution and delivery of this Agreement and the performance by Skye of its obligations hereunder, except such Consents or Filings as have already been duly and validly obtained or filed or with respect to any Filings to be made before the Closing.

(d) Agreement Not in Breach of Other Instruments. The execution and delivery of this Agreement, the consummation of the transactions hereby contemplated, and the fulfillment of the terms hereof by Skye, will not result in the breach of any term or provision of, or constitute a default under, or conflict with, or cause the acceleration of any obligation under, any agreement or other instrument of any description to which Skye is a party or by which

Skye is bound, or any judgment, decree, order, or award of any court, governmental body, or arbitrator, or any law, rule, or regulation applicable to Skye.

5. Further Representations, Warranties, and Agreements of Skye.

With respect to the purchase of Shares pursuant to Section 1(c) hereof, Skye further represents, and warrants as follows:

(a) Ability to Bear Risk; Business and Financial Knowledge and Experience. Skye (i) can bear the economic risk of the purchase of the Shares, including the complete loss of Skye’s investment, and (ii) has sufficient knowledge and experience in business and financial matters as to be capable of evaluating the merits and risks of Skye’s purchase of the Shares.

(b) Company Information. Skye confirms that it has had the opportunity to review the SEC Reports and to ask questions and receive answers and information respecting, among other things, the business, affairs, financial condition, plans, and prospects of the Company and the terms and conditions of the purchase of the Shares.

(c) Absence of Representations and Warranties. Skye confirms that neither the Company nor VTLV nor anyone purportedly acting on behalf of either of them has made any representations, warranties, agreements, or statements other than those contained herein respecting the business, affairs, financial condition, plans, or prospects of the Company nor has Skye relied on any representations, warranties, agreements, or statements in the belief that they were made on behalf of any of the foregoing nor has Skye relied on the absence of any such representations, warranties, agreements, or statements in reaching Skye’s decision to purchase the Shares.

(d) No Distribution. Skye is acquiring the Shares for Skye’s own account without a view to public distribution or resale, and Skye has no contract, undertaking, agreement, or arrangement to transfer, sell, or otherwise dispose of any Shares or any interest therein to any other person.

(e) Shares to be Restricted. Skye understands that the Shares are “restricted securities” within the meaning of Rule 144 under the Securities Act.

(f) No Registration. Skye understands that the Shares have not been registered under the Securities Act or the securities laws of any other jurisdiction and must be held indefinitely without any transfer, sale, or other disposition unless the Shares are subsequently registered under the Securities Act and the securities laws of any other applicable jurisdiction or, in the opinion of counsel for Company, registration is not required under such Acts or laws as the result of an available exemption.

(g) Legend on Certificates. Skye understands that there shall be endorsed on the certificates evidencing the Shares a legend substantially to the following effect:

“THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ARE ‘RESTRICTED SECURITIES’ AS DEFINED BY RULE 144 UNDER THAT ACT. THE SHARES MAY NOT BE SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT REGISTERING THE SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR, IN LIEU THEREOF, AN OPINION OF COUNSEL FOR THIS COMPANY TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THAT ACT. WITHOUT LIMITING THE FOREGOING, THE SHARES MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF WITHOUT AN OPINION OF COUNSEL FOR THIS COMPANY THAT SUCH TRANSFER, SALE, OR OTHER DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY APPLICABLE JURISDICTION OR ANY RULES OR REGULATIONS THEREUNDER.”

(h) No Governmental Approval. Skye understands that no federal or state agency has approved or disapproved the Shares, passed upon or endorsed the merits of the offering of the Shares, or made any finding or determination as to the fairness of the Shares for investment.

6. Continuation and Survival.

Each of the representations and warranties contained in this Agreement shall survive for one year after the date hereof.

7. Closing.

The completion of the transactions described in Section 1 of this Agreement (the “Closing”) shall take place at the offices of Greenberg, Traurig, LLP, 2375 East Camelback Road, Suite 700, Phoenix, Arizona, on the date of this Agreement or at such other date, time and place as may be agreed upon by the parties; provided, however, that if the Purchase Price has not been received by Skye in accordance with Section 1 of this Agreement within five business days following the date of this Agreement, Skye shall have no obligations to deliver the Convertible Notes, the certificates for the Preferred Shares or any other certificates described herein and may, at its sole option, terminate this Agreement in its entirety.

(a) Deliveries by the Company. At the Closing, the Company shall deliver to Skye, pursuant to Section 1(c) of this Agreement, certificates for 12,500,000 Shares.

(b) Deliveries by VTLV. At the Closing, VTLV shall deliver to Skye, pursuant to Section 1 of this Agreement, a certified or official bank check or wire transfer for the U.S.$416,666 representing the Purchase Price.

(i) Pursuant to Section 1 of this Agreement, the Convertible Notes and the certificates for the Preferred Shares to VTLV.

(ii) Pursuant to Section 1(c) of this Agreement, a certificate duly executed by an officer of Skye certifying that the Debt has been cancelled to the Company.

8. Further Assurances.

The parties shall execute and deliver all such other instruments and take all such other actions as any party may reasonably request from time to time in order to effectuate the transactions provided for herein. The parties shall cooperate with each other and with their respective counsel and accountants in connection with any steps to be taken as a part of their respective obligations under this Agreement. At the request of Skye, Company shall use its best efforts to register for resale the Shares under the Securities Act in accordance with the Registration Rights Agreement dated as of the date hereof.

9. Brokers and Finders.

Each of the parties hereto represents and warrants to the others that such party has not employed or retained any broker or finder in connection with the transactions contemplated by this Agreement nor has such party had any dealings with any person that may entitle that person to a fee or commission from any other party hereto. Each of the parties indemnifies and holds the others harmless from and against any claims, demands, or damages whatsoever by virtue of any arrangement or commitment made by such party with or to any person that may entitle such person to any fee or commission from the other parties to this Agreement.

10. General Provisions.

(a) Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made, and received when delivered against receipt 12 hours after being sent by facsimile or e-mail, or 72 hours after being sent by registered or certified mail, postage prepaid, addressed as set forth below:

	(i)	If to the Company:

		5080 North 40th Street
		Suite 105
		Phoenix, Arizona 85018
		Attention: Chairman
		Phone: (602) 952-9909
		Fax: (602) 952-6907
		with a copy, given in the manner
		prescribed above to:
		Greenberg Traurig
		2375 East Camelback Road, Suite 700
		Phoenix, Arizona 85016
		Attention: Robert S. Kant, Esquire
		Phone: (602) 445-8302
		Fax: (602) 445-8100
		E-mail: kantr@gtlaw.com
	(ii)	If to VTLV
		5080 North 40th Street
		Suite 105
		Phoenix, Arizona 85018
		Attention: Stuart Benson
		Phone: (602) 952-9909
		Fax: (602) 952-6907
	(iii)	If to Skye:
		105 Piccadilly
		London W1J 7NJ
		England
		Attention: Donald Nicholson
		Phone: +44 207 491 1777

		Fax: +44 207 491 3338
		E-mail: DNicholson@Skyepharma.co.uk
		with a copy, given in the manner
		prescribed above to:
		Sullivan & Cromwell LLP
		1 New Fetter Lane
		London EC4A 1AN
		England
		Attention: Kathryn A. Campbell
		Phone: +44 207 959 8900
		Fax: +44 207 959 8950
		E-mail: campka@sullcrom.com

Any party may alter the address or addresses to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this paragraph for the giving of notice.

(b) Binding Nature of Agreement; Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors, and assigns, except that no party may assign or transfer such party’s rights or obligations under this Agreement without the prior written consent of the other parties hereto.

(c) Entire Agreement. This Agreement constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, inducements, and conditions express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof; provided, however, that the terms and conditions of the Amended License Agreement shall remain in effect. This Agreement may not be modified or amended other than by an agreement in writing.

(d) Controlling Law. This Agreement and all questions relating to its validity, interpretation, performance and inducement, shall be governed by and construed, interpreted, and enforced in accordance with the laws of the state of New York.

(e) Provisions Separable. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

(f) Indulgences Not Waivers. Neither the failure nor any delay on the part of any party to exercise any right, remedy, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege preclude any other or further exercise of the same or of any other right, remedy, power, or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

(g) Costs and Expenses. Each party hereto shall bear such party’s own costs, including legal and accounting fees, incurred in connection with the negotiation and preparation of this Agreement and all matters incident thereto.

(h) Titles Not to Affect Interpretation. The titles of sections and paragraphs contained in this Agreement are for convenience of reference only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

(i) Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party

whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

(j) Gender. Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine, or neuter, as the context requires.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written.

VITAL LIVING, INC.
By	/s/ Stuart Benson
Name:		Stuart Benson
Title:		CEO
SKYEPHARMA PLC
By	/s/ Donald Nicholson
Name:		Donald Nicholson
Title:		Finance Director
VTLV LLC
By	/s/ Stuart Benson
Name:		Stuart A. Banson
Title:		Member
By	/s/ Gregg Linn
Name:		Gregg A. Linn
Title:		Member

EXHIBIT A — SKYEPHARMA TRANSFER ACCOUNT DETAILS

Bank/Beneficiary:	The Royal Bank of Scotland plc, Financial Markets, Treasury Operations, London
Swift code:	RBOSGB2LTCM
Account:	400930153
Account with Bank:	CHASUS33
Reference:	SkyePharma PLC

EXHIBIT B — COMMON STOCK OF THE COMPANY

Common Stock Authorized:	150,000,000 Shares
Common Stock Issued:	124,790,217 Shares
Common Stock Outstanding:	124,790,217 Shares

Under the Securities Exchange Act of 1934 (Amendment No. 6)

Signature

ANNEX A

Under the Securities Exchange Act of 1934
(Amendment No. 6)