This Contribution
Agreement (this “ Agreement ”) is entered
into as of August ___, 2006 (the “ Contribution
Date ”) by and among Pacific Spirit Inc., a Nevada
corporation (the “ Company ”), Summit
Trading Limited, a Bahamian corporation (“
Summit ”), and Consolidated National, LLC, a
California limited liability Company (“ CNL
”) (each, a “ Party ” and
collectively, the “ Parties
”).
A. Summit has
entered into a Stock Purchase Agreement to purchase from Peter
Sotola 400,000 shares of the common stock of the Company, par value
$0.001 per share (the “ Common Stock
”).
B. The
Parties desire that, subject to the terms and conditions in this
Agreement, CNL contribute certain assets to the Company in exchange
for the issuance by the Company to CNL of 9,600,000 shares of the
Common Stock as a qualified exchange pursuant to Section 351
of the Internal Revenue Code of 1986.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties
hereto hereby agree as follows:
1.
Contribution of the Assets.
A.
Contribution of the Assets . Subject to the terms and
conditions of this Agreement, CNL hereby assigns, transfers, and
delivers to the Company, as a contribution, all right, title, and
interest of CNL in and to all of the following assets and
properties (the “ Assets ”):
(i) The
name “Xcorporeal, Inc.”; and
(ii) That
certain Irrevocable Option Agreement dated August 11, 2006 by
and among CNL, National Quality Care, Inc., a Delaware corporation
(“ NQCI ”), and certain of the
stockholders of NQCI (the “ Option
”).
B.
Conveyance Instruments . To effectuate the contribution of
the Assets as contemplated by Section 1.A , CNL has, or
will hereafter, execute and deliver, or cause to be executed or
delivered, all such documents or instruments of assignment,
transfer, or conveyance, in each case dated the Contribution Date,
(collectively, the “ Conveyance Instruments
”), as CNL and the Company and their respective counsels
shall reasonably deem necessary or appropriate to vest in or
confirm title to the Assets to the Company.
2. Events
Occurring on the Contribution Date.
A.
Deliveries by the Parties . Each of the Parties shall
deliver an original of this Agreement fully executed by such Party
to each of the other Parties.
B.
Deliveries by CNL . Simultaneously with the execution
hereof, CNL has delivered to the Company the following:
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(1) The
Conveyance Instruments to effect the contribution of the Assets to
the Company, such Conveyance Instruments to be those reasonably
deemed necessary by, and to be in form and substance reasonably
satisfactory to, the respective counsels to CNL and the Company;
and
(2) All
other previously undelivered documents, instruments and writings
required to be delivered by CNL to the Company hereunder or
otherwise required in connection herewith.
C.
Consideration for Contribution . In exchange for the
Contribution of the Assets, the Company shall issue to CNL on the
Contribution Date an aggregate of Nine Million Six Hundred Thousand
(9,600,000) shares of the Common Stock.
D.
Deliveries By Summit . Simultaneously with the execution
hereof, Summit has delivered to CNL the following all other
documents, instruments, and writings required to be delivered by
Summit to CNL hereunder or otherwise required in connection
herewith.
D.
Additional Deliveries . In addition to the deliveries set
forth in Section 2.A and 2.C , the Company shall have
delivered to CNL each of the following:
(1) An
indemnity executed by Peter Sotola in favor of CNL with respect to
certain representation and warranties regarding the Company in
substantially the form attached hereto as Exhibit A
;
(2) All
minute books, stock books, ledgers and registers, if any, and other
records relating to the organization, ownership and maintenance of
the Company;
(3) All
books and records of the Company, including, without limitation,
all work papers and other backup materials used in the preparation
of the Company’s federal, state and local tax returns for
each of the Company’s last five (5) fiscal
years;
(4) A
copy of the articles of incorporation of the Company, certified by
the Secretary of State of Nevada and a certificate of good standing
from the Secretary of State of Nevada and each jurisdiction in
which the Company is duly qualified to transact business, in each
case, dated within fifteen (15) days of the
Closing;
(5) Copies
of the resolutions duly adopted by the Company’s directors
authorizing the execution, delivery and performance of this
Agreement and the other agreements contemplated hereby, and the
consummation of all transactions contemplated hereby and thereby,
certified by the Secretary of the Company; and
(6) A
copy of the bylaws of the Company, certified by the Secretary of
the Company.
D.
Corporate Documents and Review; Financial Statements . The
Company shall have delivered to CNL or its counsel copies of all
corporate documents of the Company as CNL shall have reasonably
requested. The unaudited balance sheet of the Company as of the
Contribution Date prepared in accordance with GAAP shall be
substantially similar or in the
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