SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: March 14, 2005
LIFELINE THERAPEUTICS, INC.
--------------------------
(Exact name of registrant as specified in its charter)
Colorado 000-30489 84-1097796
-------------- --------- ----------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
6400 South Fiddler's Green Circle, Englewood, CO 80111
--------------------------------------------
(New address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (720) 488-1711
YAAK RIVER RESOURCES, INC.
-----------------------------------------------------------
(former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) Section 1 - Registrant's Business and
Operations
Item 1.01 Entry into a Material Definitive Agreement
On March 10, 2005, Lifeline Therapeutics, Inc. ("LTI") entered into a
Settlement and Release Agreement and Plan of Reorganization (the "Agreement") by
which LTI acquired the remaining 19% interest in its subsidiary, Lifeline
Nutraceuticals Corporation ("LNC"), from Michael Barber, a single sophisticated
person who did not participate in the earlier (October 2004) reorganization. Mr.
Barber exchanged 4,500,000 shares of restricted LNC common stock for 1,000,000
shares of restricted LTI Series A Common Stock. LTI agreed to include those
shares in a registration statement, but Mr. Barber agreed to sell no more than
150,000 shares in any 90 day period after the effective date of that
registration statement. In an independent transaction, Mr. Barber agreed to
extend his covenant not to compete with LTI and LNC for one year from the date
of the Agreement. Previously Mr. Barber had a covenant not to compete with LNC
that expires in April 2005. LTI paid Mr. Barber $125,000 for the covenant not to
compete, and agreed to pay him an additional $125,000 by April 15, 2005.
Finally, LTI agreed to forgive the $47,500 indebtedness reflected on LTI's
financial statements, for which an allowance for recoverability has previously
been provided, as being due from Mr. Barber, and Mr. Barber agreed to bear all
tax obligations resulting from the Agreement. The Agreement contains standard
releases, warranties, and mutual indemnification obligations.
Item 1.02 Termination of a Material Definitive Agreement
None
Item 1.03 Bankruptcy or Receivership
None
Section 2 - Financial Information
Item 2.01 Completion of Acquisition or Disposition of Assets
None
Item 2.02 Results of Operations and Financial Condition
None
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant
None
Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation Under and Off-Balance Sheet Arrangement
None
Item 2.05 Costs Associated with Exit or Disposal Activities
None
Item 2.06 Material Impairments
None
Section 3 - Securities Trading Markets
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing
None
Item 3.02 - Unregistered Sales of Equity Securities
On March 10, 2005, Lifeline Therapeutics, Inc. ("LTI") issued 1,000,000
shares of its restricted Series A Common Stock to acquire the remaining 19%
interest in LTI's subsidiary, Lifeline Nutraceuticals Corporation ("LNC") from a
single sophisticated investor. The following sets forth the information required
by Item 701 in connection with this transaction:
(a) The transaction was completed effective March 10, 2005. The securities sold
were 1,000,000 shares of Series A Common Stock.
(b) No fee was paid to any underwriter, placement agent, or finder. The
securities were issued to a single sophisticated investor who had significant
prior experience with LNC.
(c) LTI received no cash proceeds as a result of the issuance of the shares. The
investor assigned to LTI 4,500,000 shares he owned in LNC (approximately 19%) in
consideration for the 1,000,000 shares.
(d) We relied on the exemption from registration provided by Sections 4(2) of
the Securities Act of 1933 for this transaction. We did not engage in any public
advertising or general solicitation in connection with this transaction. We
provided the investor with disclosure of all aspects of our business, including
providing the investor with our reports filed with the Securities and Exchange
Commission, our press releases, access to our auditors, and other financial,
business, and corporate information, and the investor was represented by his
personal counsel in the transaction. Based on our investigation, we believe that
the investor obtained all information regarding LTI that he requested, received
answers to all questions he and his advisors posed, and otherwise understood the
risks of accepting our securities for investment purposes.
(e) The Series A Common Stock has no conversion or exchange rights.
(f) Not applicable.
Item 3.03 Material Modification to Rights of Security Holders
None
Section 4 - Matters Related to Accountants and Financial Statements
Item 4.01 Changes in Registrant's Certifying Accountants
None
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review
None
Section 5 - Corporate Governance and Management
Item 5.01 Changes in Control of Registrant
None
Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers
None
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
None
Item 5.04 Temporary Suspension of Trading Under Registrant's Employee Benefit
Plans
None
Item 5.05 Amendments to the Registrant's Code of Ethics, or Waiver of a Provi-
sion of the Code of Ethics.
None
Section 6 - [Reserved]
Section 7 - Reulation FD
Item 7.01 Regulation FD Disclosure
On March 4, 2005, a major network television affiliate in the Denver market
aired a segment concerning Lifeline Nutraceuticals Corporation, a subsidiary of
Lifeline Therapeutics, Inc., and its Protandim product during the night time
news broadcast. Several erroneous and misleading statements were made during
this news broadcast. Lifeline Therapeutics, Inc. is hereby publicly alerting the
marketplace that the information contained in that news broadcast should not be
relied upon. The marketplace should only rely on publicly filed and disclosed
information from Lifeline Therapeutics, Inc.
Neither Lifeline Nutraceuticals Corporation nor Lifeline Therapeutics, Inc.
has any relationship with Ceremedix, Inc. of Boston, Massachusetts. Protandim is
in no way comprised of, or related to, Ceremedix's peptide, referred to as
CMX-1152. Consumers and investors should not consider CMX-1152 or any claims
associated thereto to have any connection to Protandim.
Section 8 - Other Events
Item 8.01 Other Events
None
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.
(b) Pro Forma financial information.
(c) Exhibits
Exhibit
Number Description
- ------ -----------
10.1 Settlement and Release Agreement and Plan of Reorganization
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: March 11, 2005
LIFELINE THERAPEUTICS, INC.
By: /s/ Daniel W. Streets
-----------------------------------------
Daniel W. Streets, CFO/Secretary
Exhibit 10.1
SETTLEMENT AND RELEASE AGREEMENT and PLAN OR REORGANIZATION
This Settlement and Release Agreement ("Agreement") is entered into and
effective this 10th day of March 2005, by and between Lifeline Therapeutics,
Inc., a Colorado corporation ("LT") and Lifeline Nutraceuticals Corp., a
Colorado corporation ("LN") and Michael Barber, an individual residing at 2880
S. Locust Street, North Tower - 406, Denver, CO 80222 ("Barber") (each a "Party"
and collectively the "Parties").
In consideration of the (i) recitals, representations and warranties,
which are expressly incorporated as a part of this Agreement and (ii) the
promises and obligations of the Parties as set out in this Agreement, the
Parties agree as follows:
I. RECITALS
A. LN is a privately-held company that is involved in the dietary
supplement industry, sometimes referred to as the nutraceutical industry.
B. LT is a publicly traded company that is the parent company of LN,
and is or intends to be involved in the nutraceutical, cosmeceutical and
pharmaceutical industries.
C. Barber is a former employee, Officer and Director of LN. On July
15, 2003, Barber entered into an Employment Agreement with LN.
D. On August 15, 2003, Barber was issued 4,500,000 shares of common
stock in LN (the "LN Common Stock"). Barber contends that the LN Common
Stock was properly and validly issued and Barber paid all sums due and
owing for it.
E. On April 7, 2004, Barber executed a written Resignation, resigning
as an officer and director of LN. Barber terminated his Employment
Agreement as well.
F. A dispute has arisen between Barber, LN and LT regarding the
circumstances under which Barber obtained the LN Common Stock and the
disposition of that stock.
1
G. The Parties desire to avoid the uncertainty, time, and expense of
litigating their dispute.
H. The Parties have reached a settlement of this dispute, and through
this Agreement, desire to memorialize their settlement.
II. REPRESENTATIONS AND WARRANTIES OF THE PARTIES:
The following are not all of the representations and warranties of the
Parties; these relate directly to the ownership of the shares that will be
exchanged pursuant to this Agreement:
(A) Barber represents and warrants that:
(1) He is the sole owner of and has full power and authority to
convey good and marketable title to the LN Common Stock, free and clear of
any mortgages, liens, restrictions, security interests, claims, rights of
another or encumbrances. He has not assigned, sold, conveyed, hypothecated,
licensed, leased, partitioned, pledged, granted, exchanged or otherwise
transferred (voluntarily or involuntarily), any of the LN Common Stock. Any
such transfer will not be recognized by LN or LT.
(2) The 4,500,000 shares of LN Common Stock are the only shares
of LN stock that Barber has ever owned or held and that Barber has no other
stock, options, warrants or any other interests in LN or LT, or right to
purchase any other interests in LN or LT, except as set forth in this
Agreement.
(B) LN and LT represent and warrant that:
(1) LN and LT are corporations duly organized, validly existing
and in good standing under the laws of the State of Colorado.
(2) LN and LT have full corporate power and authority to enter
into and perform this Agreement. This Agreement has been, and any ancillary
documents will be, duly executed and delivered by duly authorized officers
of LN or LT.
2
III. TERMS, COVENANTS AND CONDITIONS
A. Share Exchange. LT agrees to deliver to Barber 1,000,000 shares of
restricted voting common stock of LT (the "Restricted Stock")in exchange
for Barber's assignment and delivery of all of the LN Common Stock held by
him, directly or indirectly (the "Exchange"). The parties shall cooperate,
use their respective best efforts and take such actions and execute such
documents (including a Plan of Reorganization, resolutions and consents,
stock powers, and record-keeping and tax reporting requirements) as
reasonably necessary to structure the Exchange as a tax-free reorganization
within the meaning of section 368(a)(1)(B) of the Internal Revenue Code. It
is understood that neither LT nor LN shall be responsible for any taxes,
interest or penalties payable by Barber if the Exchange does not qualify as
a tax-free reorganization and this Agreement is in no way contingent on the
same.
(1) At the time this Agreement is executed (the "Closing"), Barber will
deliver to LT the original certificate(s) representing the LN Common Stock
to be delivered by him pursuant to the Paragraph A. immediately above (the
"LN Stock Certificates") and LT will deliver, at the same time, to Barber
the original certificates representing the Restricted Stock. The LN Stock
Certificate(s) shall be accompanied by original stock powers (in the form
attached hereto as Exhibit A)duly endorsed in blank or accompanied by duly
executed assignment documents in form and substance satisfactory to LT.
(2) LT agrees to grant to Barber registration rights for the Restricted
Stock on a pari passu basis with the registration rights to be granted to
the investors in connection with the financing described below. LT agrees
to use its best efforts to register the Restricted Stock for resale by
Barber at the time it undertakes its first registration of shares
subsequent to the possible financing that LT is currently discussing with
Keating & Co. LT further agrees to use its best efforts to keep such
registration statement current and effective until the earlier of (i) the
3
date by which all of the Restricted Shares have been sold or (ii) the date
by which all of the Restricted Shares may be sold pursuant to Rule 144(k).
All of Barber's shares shall be subject to volume limitations on the amount
that may be sold under the registration statement in accordance with the
following: immediately after the effective date of the registration
statement, but not prior to such date, Barber may sell up to 150,000 of the
Restricted Shares. Thereafter Barber may sell increments of up to 150,000
of the Restricted Shares in each subsequent ninety (90) day period.
Notwithstanding the limitations on the number of shares that may be sold by
Barber set forth in the immediately preceding sentence, (i) Barber may sell
the Restricted Shares in private placements immediately following the date
hereof and (ii) in the event the registration statement on which the
Restricted Shares were registered is not current or effective and Barber is
not able to sell his shares, then Barber shall be permitted to sell such
shares that he would have otherwise been able to sell if the registration
statement was current and effective without affecting and in addition to
the volume limitations set forth above. Subject to the approval of LT, such
approval not to be unreasonably withheld or delayed, Barber may transfer
his shares in a private sale to any person (i) if such person agrees to be
bound by the volume limitations set forth above or (ii) if Barber's sale is
within the volume limitations set forth above. Notwithstanding anything
else in this paragraph, Barber agrees to comply with all state and federal
securities laws and regulations with respect to the disposition of the
shares of LT that Barber receives pursuant to this Agreement. LT further
agrees to use its best efforts to remove all legends from the stock
certificates representing such securities upon the request of Barber if
such legends are no longer applicable, including if such shares are
eligible for resale pursuant to Rule 144(k) of the Securities Act of 1933,
as amended. Notwithstanding anything to the contrary contained herein, LT
agrees to use its best efforts to file for registration of Barber's
4
securities no later than the earlier of (i) the date LT registers its first
registration statement following the date hereof or (ii) within 45 days
after the closing of the financing that LT is currently discussing with
Keating & Co.
B. Compensation Payment to Barber. In consideration of Barber's
covenant not to compete as provided in this Agreement, LN shall deliver to
Barber or Barber's counsel the sum of Two Hundred Fifty Thousand Dollars
($250,000), payable as follows:
(1) One Hundred Twenty-Five Thousand Dollars ($125,000) at the
Closing; and
(2) One Hundred Twenty-Five Thousand Dollars ($125,000)on April
15, 2005.
The payments shall be delivered in the form of a cashier's check or wire
transfer of immediately available funds to the bank account(s) nominated by
Barber. As to the payment due on April 15, 2005, LN shall deliver to Barber
an unconditional Promissory Note in favor of Barber and as to which LN is
the Maker in the amount of $125,000 due and payable on April 15, 2005, with
interest accruing from that date forward, if unpaid, at a rate of 8% per
annum. The Promissory Note shall be in a form reasonably acceptable to
Barber and LN and shall be attached hereto as Exhibit B. If LN makes
payment to Barber of this April 15, 2005 payment of $125,000 by that date,
Barber shall cancel the Promissory Note and return it to LN.
C. Amounts Owed to Barber; Withholding Liabilities. Any and all
amounts that may be owed to Barber for services rendered, costs, expenses
and any other matters through the date of this Agreement, and expressly not
including those amounts set forth in paragraph III.B. above, are fully and
permanently cancelled. Barber permanently waives his rights to claim any
amounts owed for services rendered, costs, expenses, and any other amounts
advanced or claimed as owed by LN or LT through the date of this Agreement,
and expressly not including those amounts set forth in paragraph III.B.
above. In addition, Barber agrees to pay all federal and state income, FICA
5
and Medicare taxes due in connection with cancellation of the advances
described in paragraph III.D. below.
D. Prior Compensation. Barber received payment from LN for services
that may have involved various fund raising activities on behalf of LN. The
Parties acknowledge that any monies or other compensation paid to Barber
was not payment of commission(s), but constituted an advance to Barber as
an employee of LN. LN and LT acknowledge and agree that Barber has no
obligation to pay or repay to LN or LT any monies, including any monies or
other compensation previously paid to him by LN.
E. No Admission of Liability. The Parties are entering into this
Agreement as a method of resolving and compromising their dispute and,
therefore, LN and LT, by entering this Agreement, are not admitting any
liability to Barber or any entity or individual associated with Barber. LN
and LT expressly deny any such liability. Further, by entering into this
Agreement, Barber is not admitting any liability to LN and LT. Barber
expressly denies any such liability.
F. No Rights to Additional Interests. Barber represents and warrants
to LN and LT that, except as set forth in this Agreement, he waives any and
all claims to any stock, membership units and other possible ownership or
other interests and rights in LT or LN .
G. Association with LN or LT. Barber agrees that he will never in his
own name or through any individual or entity with whom he is associated in
any capacity ever voluntarily advertise, publicize or publicly disclose,
any former or present association with LN or LT. However, LN and LT agree
that Barber shall be entitled to and have the right to disclose his entire
employment history. In addition, Barber agree that he will not be involved
with any type of communication intended for public viewing that compare the
benefits of any LT or LN product with any product with which Barber has any
involvement. Further, Barber agrees that he will not refer to or cite or
cause others to refer or cite to Dr. Joe McCord, including, but not limited
to, (i) any comment or other communication of any kind that directly or
ultimately emanated from Dr. Mc Cord or that describes Dr. Mc Cord and any
of his scientific work and (ii) any test or study in which Dr. McCord has
had some role, including any report of such test or study.
6
H. Restrictions on Competition.
(1) Barber agrees that for one year from the date of this Agreement
that he will and shall not knowingly (a) apply for or be employed by
or contract with, and (b) acquire, either directly or indirectly, any
ownership or other interest in, any individual or entity, throughout
the world, that at that time markets, sells, distributes or
manufactures any dietary or food supplement product that competes or
is intended to compete with Protandim or CMX-1152 or both of them,
including knockoffs or derivatives of either Protandim or CMX-1152. A
product will be conclusively deemed to compete or intended to compete
with Protandim or CMX-1152 if:
a. That product contains two or more of the following ingredients
or extracts of those ingredients, all of which are in or intended to
be in Protandim: (i) Ashwagandha, (ii) Bacopa, (iii) Green Tea, (iv)
Milk Thistle, (v) Tumeric, (vi) Gotu Kola, (vii) Ginkgo Biloba, (viii)
Aloe Vera; or if
b. That product is promoted, in any way, as being able to provide
or deliver a health benefit to a human being by affecting, in any way,
one or more of the following substances or the production by the human
body of one or more of those substances: (i) SOD, which is superoxide
dismutases and (ii) CAT, which is catalase; or if
c. That product is promoted, designed or formulated to affect the
human body in any way that is similar to the way in which CMX-1152 or
Protandim is now or may be promoted, designed or formulated, as
described on Protandim.com and lifelinenutraceuticals.com or any other
website owned or controlled by LN, LT or CereMedix. Subject to the
provisions of subparagraphs a., b. immediately above and the first
7
sentence of this subparagraph c. , LN and LT acknowledge and agree
that Barber shall have and retains the right to market products which
may claim to promote (i) general health and well being, including,
without limitation, reduction of inflammation, improvement of heart
health, improvement of digestive problems, improvement of or benefits
to brain function, increased sexual function, improved oxygen
absorption, and reduction of plaque or (ii) anti-aging benefits.
Subject to the provisions of subparagraphs a., b. and the first
sentence of this subparagraph, LN and LT further acknowledge and agree
that Barber shall have and retains the right to market and distribute
krill products. .
(2) Barber acknowledges and agrees that (a) the non-competition
agreements and covenants set forth above are (i) reasonable and valid
in time and geographical scope and (ii) essential to protect the value
of the business and assets of LN and LT and (b) through his ownership
of a substantial portion of the LN Common Stock and his relationship
and employment with LN or LT or both, Barber has obtained valuable
knowledge, contacts, know-how, training and experience and there is a
substantial probability that such knowledge, know-how, contacts,
training and experience could be used to the substantial advantage of
a competitor of LN and LT and to the substantial detriment of LN and
LT.
I. No Dissemination of Information or Documents. Barber represents and
warrants that he shall not send, deliver or otherwise disseminate any
information about LN or LT, including but not limited to their products,
marketing plans, schedules, agreements, contacts, business relationships,
business plans, employees, internal-decisions and decision-making,
contracts, company structure, members, investors, finances, and financial
plans, or anything that would constitute a trade secret under the Colorado
Trade Secrets Act, to any third-party, including but not limited to
competitors of LN and LT, the FDA, FTC or SEC, and any other governmental
entity or agency, other than as required by other and other than to his
8
certified public accountants, tax advisors or preparers, attorneys and
insurers for purposes of obtaining professional advice.
J. No Delivery of Documents. By signing below, Barber represents and
warrants to LN and LT that:
(1) he will deliver to their legal counsel, at Closing, all records,
documents, notes, and other written materials of any nature whatsoever
that are in his possession or over which he has control regarding LN
or LT (the "Lifeline Documents"), other than those records, documents,
notes, or other written materials of any nature whatsoever necessary
for tax purposes which he may retain, and legal counsel for Barber may
retain one copy of all such materials and may keep those in his
possession for a period of four years after the date of the execution
of this Agreement; after the expiration of that four year period, all
such documents will be destroyed by his legal counsel, except Barber
and his legal counsel may retain a copy of this Agreement and legal
counsel may retain legal counsel's notes, memoranda and other
communications with (i) legal counsel for LN and LT and (ii) with LN
and LT;
(2) he has not given copies of any of the Lifeline Documents to any
third-party except to his legal counsel and tax advisor or preparer;
and
(3) he does not have nor has he given to any third-party any
documents, records or other items in any form that in any way contain
the information that was in the Lifeline Documents, except to his
legal counsel and tax advisor or preparer.
K. Nondisclosure. Each Party represents and warrants that neither this
Agreement nor the contents of this Agreement have been disclosed by him or
it to any person other than the Parties and their respective legal counsel
and will not be disclosed to any other persons except as set forth herein
or pursuant to an order of Court or written mutual consent of the Parties.
Each Party agrees that he or it will not disclose or disseminate to any
individual or entity a copy of this Agreement nor any information related
to this Agreement except as follows:
9
(1) this Agreement can be provided to the Parties' certified public
accountants, tax advisors or preparers, attorneys and insurers
provided that each of these recipients agrees not disclose or
disseminate the Agreement without the express consent of both Barber
and LT (or legal counsel to LT);
(2) Barber will notify LT in the event that he receives a subpoena,
court order, or request from a governmental agency (collectively
referred to as a "Formal Request") for a copy of the Agreement or
information contained in the Agreement. LT, at its sole expense, shall
have the right to file and pursue any objection it desires to attempt
to limit or prevent the delivery by Barber of the Agreement or the
information contained in this Agreement ("Lifeline's Objections"). LT
shall immediately provide Barber copies of all documents filed in this
regard. Barber shall fully and timely comply with any Formal Request,
unless that Formal Request is modified or quashed as a result of LT's
Objections, and then Barber shall fully and timely comply with that
Formal Request as it is modified or quashed as a result of a legally
binding ruling on LT's Objections. Barber has no obligation on his own
to file any objection to any Formal Request.
L. Non-Disparagement. Each Party agrees that he or it will not provide
information, issue statements, or take any action, directly or indirectly,
that disparages the other Parties or their respective officers, directors,
employees or agents.
M. Mutual Statement. Any Party may make the following statement if
asked about any dispute or issue between them or about the resolution of
that dispute: "We have satisfactorily resolved the differences between us,
and are unable to provide any additional information about this matter."
10
N. Release by Barber. Barber, on his own behalf and on behalf of his
present and prior subrogors and subrogees, successors and/or assigns,
hereby absolutely and forever releases, acquits, satisfies and discharges
LN and LT and any and all of their respective directors, spouses, officers,
employees, shareholders, attorneys, accountants, predecessors, successors
and affiliates (the "LN/LT Released Parties"), of and from any and all
rights, claims, demands, damages, debts, liabilities, accounts, covenants,
rights to indemnification, liens, attorneys' fees, costs, expenses, actions
and causes of action of every kind and nature whatsoever, now known or
unknown, suspected or unsuspected, in law or in equity, which Barber owns
or holds, or at any time heretofore has ever had, owned or held, or may
hereafter have, own or hold, based upon, related to or arising out of (i)
the prior business relationship between Barber and LN or LT, and (ii) any
other matter, act, failure to act, fact, event, happening, occurrence or
omission existing or occurring prior to the date hereof. Barber further
irrevocably covenants and agrees to refrain from, directly or indirectly,
asserting any claim or demand, or commencing, instituting or causing to be
commenced, any proceeding of any kind against the LN/LT Released Parties,
based upon any matter purported to be released hereby.
O. Indemnification. Each party agrees to indemnify and hold the other
harmless from all liability, including costs and attorneys fees, associated
with any misrepresentations or breach of the covenants and agreements
contained herein by such party.
P. Release by LN and LT. LN and LT, on behalf of their members,
affiliates, successors, assigns, heirs, employees, representatives, agents,
managers, members, officers, directors, shareholders, attorneys,
accountants, advisors, and insurers hereby absolutely and forever release,
acquit, satisfy and discharge Barber and his present and prior subrogors
and subrogees, successors and/or assigns, attorneys and accountants (the
"Barber Released Parties") from any and all rights, claims, demands,
damages, debts, liabilities, accounts, covenants, rights to
indemnification, liens, attorneys' fees, costs, expenses, actions and
causes of action of every kind and nature whatsoever, now known or unknown,
11
suspected or unsuspected, in law or in equity, which LN or LT or both own
or hold, or at any time heretofore have ever had, owned or held, or may
hereafter have, own or hold, based upon, related to or arising out of (i)
the prior business relationship between Barber and LN or LT, (ii) the
Exchange that will occur upon or after the execution of this Agreement,
including, without limitation, (a) any claims relating to or arising from
any problems, difficulty, delay or increased costs in raising money or
inability to raise money or to list on a public exchange as a result of or
in any part due to Barber being an LT shareholder or (b) any scrutiny,
evaluation or investigation of LT by the National Association of Securities
Dealers, Inc., the Securities and Exchange Commission, a state securities
agency, or any stock exchange as a result of or in any part due to Barber
being an LT shareholder, and (iii) any other matter, act, failure to act,
fact, event, happening, occurrence or omission existing or occurring prior
to the date hereof. LN and LT further irrevocably covenant and agree to
refrain from, directly or indirectly, asserting any claim or demand, or
commencing, instituting or causing to be commenced, any proceeding of any
kind against the Barber Released Parties, based upon any matter purported
to be released hereby.
Q. Advice of Counsel. Barber, LN and LT each represent, acknowledge
and agree that:
(1) They have each had the opportunity to seek independent legal
counsel prior to their execution of this Agreement;
(2) The legal nature and effect of this Agreement has been fully
explained to them by such independent counsel;
(3) They fully understand the terms, provisions and ramifications of
this Agreement;
(4) They are relying solely upon their own judgment and the advice of
their own independent and independently chosen counsel in executing
this Agreement;
12
(5) Except for the representations and warranties of a Party as set
forth in this Agreement, they have not relied upon any representation
or statement of any other Party to this Agreement, any employee or
agent of any such Party, or counsel for any other Party in executing
this Agreement; and
(6) Subject to the representations and warranties that are in this
Agreement, each Party is aware that his or its attorneys or advisors
may, after this Agreement is signed, discover facts different from or
in addition to the facts that he or it or that Party's attorneys or
advisors now know or believe to be true with respect to the subject
matter of this Agreement; that the intention of each Party is to fully
and finally release each other person or entity released by them, as
set forth in this Agreement, from any and all liabilities and claims
which have arisen, are now arising, or may in the future arise in
connection with or in any way related to the matters referred to in
this Agreement.
R. No Assignment. Each Party represents and warrants to the other
Parties that he or it has not sold, transferred or assigned any of part or
all of any claim that he or it may have against another Party.
S. Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Colorado. Venue for any lawsuit
regarding this Agreement shall be the Denver County, Colorado, state
district court and the U.S. District Court for the District of Colorado.
T. Counterparts. This Agreement may be executed in counterparts, with
each counterpart being an original document, and all counterparts together
constituting a single agreement.
U. Merger. This Agreement states the entire agreement and the full
understanding between the Parties, and supersedes all prior discussions or
negotiations, and there are no further understandings or agreements, oral
or written, relating to the subject matter of this Agreement.
13
V. Legal Fees and Expenses. Each Party agrees to bear his or its own
costs, including attorneys' fees, in connection with the negotiation,
preparation and execution of this Agreement, and any other matters which
are the subject of this Agreement. The prevailing party in any lawsuit
arising from this Agreement shall be entitled to an award of its reasonable
attorneys' fees, court costs and other reasonable out-of-pocket expenses as
well as any other legal or equitable relief to which that party may be
entitled.
W. Severability. If any provision of this Agreement shall be deemed
void, invalid, illegal, or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not be
affected or impaired.
X. Rules of Construction. The Parties agree that each of them has
reviewed and/or revised this Agreement so that the normal rules of
construction to the effect that any ambiguities in the Agreement are to be
resolved against the drafting Party shall not be employed in interpreting
or construing this Agreement.
Y. Modifications. No modification of this Agreement shall be effective
unless in writing and signed by the Party against whom it is sought to be
enforced.
Z. Successors in Interest. This Agreement is and shall be binding upon
and inure to the benefit of the heirs and successors of each Party.
AA. Paragraph Headings. Paragraph headings are for reference purposes
only and do not affect the interpretation of this Agreement.
BB. Fax Signatures. Fax signatures are fully binding on the Parties.
If the Agreement is signed via fax, duplicate originals will promptly be
signed by the Parties so that each Party will have a fully signed original
Agreement for his records.
CC. Notices. All notices which are given pursuant this Agreement shall
be either hand-delivered or sent by a combination of e-mail and regular
U.S. Mail or a recognized overnight delivery service. Such notices shall be
14
sent to the Parties at the addresses set forth below or to such other
address designated by the Party to whom notice is to be given.
To Barber: 2880 South Locust Street
North Tower - 406
Denver, CO 80222
With a copy to: Martin D. Litt, Esq.
Holme Roberts & Owen LLP
1700 Lincoln, Ste. 4100
Denver, Colorado 80203
To LN:Lifeline Nutraceuticals Corp.
Attention: Bill Driscoll
President and CEO
6400 S. Fiddler's Green Circle
Suite 1750
Englewood, CO 80111
To LT:Lifeline Therapeutics, Inc.
Attention: Bill Driscoll
President and CEO
6400 S. Fiddler's Green Circle
Suite 1750
Englewood, CO 80111
With a copy to: James R. Prochnow
Greenberg Traurig, LLP
1200 17th Street, Suite 2400
Denver, CO 80202
Each Party may change its address for notices by providing notice as
provided in this Paragraph.
15
LIFELINE NUTRACEUTICALS CORP.
By:
-----------------------------------
William Driscoll, President
STATE OF COLORADO )
)ss.
COUNTY OF Denver )
The foregoing instrument was acknowledged before me this day of , 2005, by
William Driscoll, President of Lifeline Nutraceuticals Corp.
Witness my hand and seal.
Notary Public
[SEAL] My commission expires:
AND
LIFELINE THERAPEUTICS, INC.
By:
-----------------------------------
William Driscoll, President
STATE OF COLORADO )
)ss.
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this day of , 2005, by
William Driscoll, President of Lifeline Therapeutics, Inc.
Witness my hand and seal.
Notary Public
[SEAL] My commission expires:
16
MICHAEL BARBER
---------------------------
Michael Barber
STATE OF COLORADO )
)ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this of , --------
- -------------- 2005, by Michael Barber, an individual residing at
- ------------------------------------------------------------------------------.
Witness my hand and seal.
Notary Public
[SEAL] My commission expires:
17
APPROVED AS TO FORM:
By: Martin D. Litt, #23716
Attorney(s)for Michael Barber
Holme Roberts & Owen LLP
1700 Lincoln, Ste. 4100
(303)- 861-7000
GREENBERG TRAURIG
By: James R. Prochnow, #6195
Attorneys for Lifeline Nutraceuticals Corp. and Lifeline
Therapeutics, Inc.
1200 17th Street, Suite 2400
Denver, CO 80202
303-572-6500
18
Exhibit A
Form of Stock Powers
19
Exhibit B
Form of Promissory Note
20