CONTRIBUTION AGREEMENT
Exhibit 10.6
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 Xxxxx Xxxxxx 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 Xxxxx Xxxxxx 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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aggregate no less favorable to the Company than the balance sheet of the Company included within
the unaudited Financial Statements.
3. Antidilution Protection; Registration Rights.
A. Antidilution Protection. In the event the Company shall issue shares of the Common
Stock pursuant to the transactions contemplated by the Option, then the Company shall issue to
Summit an additional 400,000 shares of the Common Stock, or such other number of shares such that,
after giving effect to the additional issuances, Summit will be the holder of four percent (4%) of
the Company’s then issued and outstanding capital stock.
B. Piggyback Rights. If the Company shall determine to register any of its securities
either for its own account or the account of a security holder or holders, other than a
registration relating solely to employee benefit plans, a registration relating to the offer and
sale of debt securities, a registration relating to a corporate reorganization or other Rule 145
transaction, or a registration on any registration form that does not permit secondary sales, the
Company will (i) promptly give written notice of the proposed registration to Summit; and (ii) use
its commercially reasonable efforts to include in such registration (and any related qualification
under blue sky laws or other compliance) any shares issued to Summit pursuant to Section
3.B. above as requested by Summit to be included in such registration.
4. Miscellaneous.
A. Expenses. Each Party hereto shall bear all of his, her or its expenses (including fees and expenses
of legal counsel, investment bankers, brokers or other representatives or consultants) incurred in
connection with the negotiation, preparation and execution of this Agreement and the transactions
contemplated by this Agreement.
B. Further Assurances. From time to time after the Closing, without the payment of any additional consideration
except as otherwise set forth in this Agreement, each Party hereto will execute all such
instruments and take all such actions as the other Parties shall reasonably request in connection
with carrying out and effectuating the intent and purpose hereof and all transactions and things
contemplated by this Agreement.
C. Notices. All notices, requests, demands, and other communications (collectively, “Notices”)
given or made pursuant to this Agreement shall be in writing and shall be deemed to have been duly
given or made as follows: (1) if sent by registered or certified mail in the United States return
receipt requested, postage and fees prepaid, upon receipt; (2) if sent by reputable overnight air
courier (such as Federal Express), one business day after sending; or (3) if otherwise actually
personally delivered, when delivered. All Notices shall be delivered to the following addressees:
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| If to Company: | ||||||||
| Pacific Spirit Inc. | ||||||||
| 00000 00X Xxxxxx | ||||||||
| Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0 | ||||||||
| Attn: Xxxxx Xxxxxx | ||||||||
| Fax: | ||||||||
| With a copy (which shall not constitute notice) to: | ||||||||
| Attn: | ||||||||
| Fax: | ||||||||
| If to Summit: | ||||||||
| Summit Trading Limited | ||||||||
| 000 Xxxxxxx Xxxxxx | ||||||||
| Xxx Xxxxxx Xxxxx, XX 00000 | ||||||||
| Attn: | President | |||||||
| Fax: | ||||||||
| With a copy (which shall not constitute notice) to: | ||||||||
| Attn: | ||||||||
| Fax: | ||||||||
| If to CNL: | ||||||||
| Consolidated National, LLC | ||||||||
| c/o Greenberg Xxxxxxx, LLP | ||||||||
| 0000 Xxxxxxxx Xxxxxx, Xxxxx 000X | ||||||||
| Xxxxx Xxxxxx, Xxxxxxxxxx 00000 | ||||||||
| Attn: Xxxxxx X. Xxxxxx | ||||||||
| Fax: (000) 000-0000 | ||||||||
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| With a copy (which shall not constitute notice) to: | ||||||||
| Xxxxxxxxx Xxxxxxx, LLP | ||||||||
| 0000 Xxxxxxxx Xxxxxx, Xxxxx 000X | ||||||||
| Xxxxx Xxxxxx, Xxxxxxxxxx 00000 | ||||||||
| Attn: Xxxx X. Xxxxxxxx, Esq. | ||||||||
| Fax: (000) 000-0000 | ||||||||
or to such other address as a Party may from time to time designate in writing in accordance
with this Section.
D. Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and permitted assigns; provided,
however, that neither this Agreement nor any of the rights, interests, or obligations hereunder may
be assigned by any of the Parties hereto without the prior written consent of the other Parties.
E. Governing Law. This Agreement will be governed by and construed in accordance with the domestic laws of
the State of California without giving effect to any choice or conflict of law provision or rule
(whether of the State of California or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of California.
F. Arbitration. Any dispute, controversy or claim arising out of or relating to this Agreement, shall be
resolved by final and binding arbitration before a retired judge at JAMS or its
successor in Santa Monica, California. The expenses of arbitration, the reasonable fees and
costs of legal counsel, experts, and evidence shall be awarded to the prevailing Party. Any
interim or final award of the arbitrator may be entered in any court of competent jurisdiction.
G. Waiver of Provisions. The provisions, terms, covenants, representations, warranties, and conditions of this
Agreement may be waived only by a written instrument executed by the Party hereto waiving
compliance. The failure of any Party hereto at any time or times to require performance of any
provision of this Agreement shall in no manner affect the right of such Party at a later date to
enforce the same. No waiver by any Party hereto of any condition or the breach of any provision,
term, covenant, representation, or warranty contained in this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed to be or construed as a further or
continuing waiver of any such condition or of the breach of any other provision, term, covenant,
representation, or warranty of this Agreement.
H. No Third Party Beneficiary. This Agreement is for the sole benefit of the Parties hereto and their respective
successors and permitted assigns and nothing herein, express or implied, is intended to or shall
confer upon any other Person any legal or equitable right, benefit, or remedy of any nature
whatsoever under or by reason of this Agreement.
I. No Presumption. With regard to each and every term and condition of this Agreement and any and all
agreements and instruments subject to the terms hereof or referred to herein, the Parties hereto
understand and agree that the same have or has been mutually negotiated, prepared, and drafted, and
if at any time the Parties hereto desire or are required to interpret or construe any such term or
condition or any agreement or instrument subject hereto, no consideration shall be given to the
issue of which Party hereto actually prepared, drafted, or requested any term or condition of this
Agreement or any agreement or instrument subject hereto.
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J. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation
in any jurisdiction will not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
K. Counterparts. This Agreement may be executed in one or more counterparts, including by means of
facsimile, each of which will be deemed an original, and all of which together will constitute one
and the same instrument.
L. Entire Agreement; Amendment. This Agreement constitutes the entire agreement between the Parties and supersedes and
cancels any and all prior representations, agreements and understandings between them relating to
the subject matter hereof and may not be amended or modified except by a written agreement signed
by Purchaser, Shareholder and the Company.
IN WITNESS WHEREOF, the Parties hereto have caused this Contribution Agreement to be duly
executed as of the day and year first above written.
| COMPANY: PACIFIC SPIRIT INC. |
||||
| By: | ||||
| Xxxxx Xxxxxx | ||||
| President and Sole Director | ||||
| CNL: CONSOLIDATED NATIONAL, LLC |
||||
| By: | ||||
| Xxxxxx X. Xxxxxx | ||||
| Managing Member | ||||
| SUMMIT: SUMMIT TRADING LIMITED |
||||
| By: | ||||
| Xxxxxxx X. Xxxxxxx | ||||
| Attorney in fact | ||||
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Exhibit A
Form of Indemnity
