EXHIBIT 10.1
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT, dated as of August 2, 2004 (the
"Agreement"), among MEDSTRETCH, Inc., a Nevada corporation ("MEDSTRETCH") on the
one hand, and Pride Business Development Group, a Nevada corporation (the
"Company") and the stockholders of the Company set forth on the signature pages
to this Agreement (the "Sellers") on the other hand. Together MEDSTRETCH and the
Company are referred to collectively as the "Parties."
RECITALS:
WHEREAS, the Sellers own 100% of the shares of the capital stock of the
Company, in the denominations as set forth opposite their respective names on
Exhibit 2.1(a) to this Agreement which shares constitute all of the issued and
outstanding shares of capital stock of the Company (the "Company Shares").
WHEREAS, MEDSTRETCH desires to acquire from the Sellers, and the Sellers
desire to sell to MEDSTRETCH, all of the Company Shares in exchange (the
"Exchange") for the issuance by MEDSTRETCH of an aggregate of 8,500,000 shares
(the "MEDSTRETCH Shares") of MEDSTRETCH's common stock, $0.001 par value per
share (the "MEDSTRETCH Common Stock") to be issued to the Sellers and their
designees, on the terms and conditions set forth below, which, after giving
effect to (a) the Exchange, and (b) the subsequent cancellation of an aggregate
of 10,666,000 shares of MEDSTRETCH Common Stock currently outstanding (the
"Cancellation"), will represent approximately 85% of the issued and outstanding
shares of the capital stock of the Company on a fully diluted basis.
WHEREAS, it is intended that, for federal income tax purposes, the
Exchange shall qualify as a reorganization under the provisions of Section
368(b) of the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated there under (the "Code");
WHEREAS, the Company, the Sellers and the MEDSTRETCH desire to make
certain representations, warranties, covenants and agreements in connection with
this Agreement; and
WHEREAS, MEDSTRETCH currently has 12,166,000 shares of Common Stock issued
and outstanding. After giving effect to the Exchange, and the subsequent
Cancellation following the Closing (as more fully set forth in Section
11.1below), MEDSTRETCH shall have 10,000,000 shares of Common Stock outstanding.
NOW, THEREFORE, in consideration of the premises and mutual promises
herein made, and in consideration of the representations, warranties, covenants
and agreements herein contained, and intending to be legally bound hereby, the
Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. The following terms shall, when
used in this Agreement, have the following meanings:
"Affiliate" means, with respect to any Person: (i) any Person directly or
indirectly owning, controlling, or holding with power to vote 10% or more of the
outstanding voting securities of such other Person (other than passive or
institutional investors); (ii) any Person 10% or more of whose outstanding
voting securities are directly or indirectly owned, controlled, or held with
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power to vote, by such other Person; (iii) any Person directly or indirectly
controlling, controlled by, or under common control with such other Person; and
(iv) any officer, director or partner of such other Person. "Control" for the
foregoing purposes shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or voting interests,
by contract or otherwise.
"Business Day" means any day other than Saturday, Sunday or a day on which
banking institutions in Los Angeles are required or authorized to be closed.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Collateral Documents" mean the Exhibits and any other documents,
instruments and certificates to be executed and delivered by the Parties
hereunder.
"Commission" means the Securities and Exchange Commission or any
Regulatory Authority that succeeds to its functions.
"Company Assets" mean all properties, assets, privileges, powers, rights,
interests and claims of every type and description that are owned, leased, held,
used or useful in the Company Business and in which the Company has any right,
title or interest or in which the Company acquires any right, title or interest
on or before the Closing Date, wherever located, whether known or unknown, and
whether or not now or on the Closing Date on the books and records of the
Company, but excluding any of the foregoing, if any, transferred prior to the
Closing pursuant to this Agreement or any Collateral Documents.
"Company Business" means the development, marketing and distribution of
safety and protective products focused on the Homeland Security marketplace.
"Company Common Stock" means the common shares of the Company.
"Company Shareholders" means, as of any particular date, the holders of
Company Common Stock on that date.
"Encumbrance" means any material mortgage, pledge, lien, encumbrance,
charge, security interest, security agreement, conditional sale or other title
retention agreement, limitation, option, assessment, restrictive agreement,
restriction, adverse interest, restriction on transfer or exception to or
material defect in title or other ownership interest (including restrictive
covenants, leases and licenses).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"MEDSTRETCH Assets" mean all properties, assets, privileges, powers,
rights, interests and claims of every type and description that are owned,
leased, held, used or useful in the MEDSTRETCH Business and in which MEDSTRETCH
holds title or any interest or in which MEDSTRETCH acquires any right, title or
interest on or before the Closing Date, wherever located, whether known or
unknown, and whether or not now or on the Closing Date on the books and records
of MEDSTRETCH, but excluding all assets related to muscle-skeleton exercise
plans.
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"MEDSTRETCH Business" means the business conducted by MEDSTRETCH.
"MEDSTRETCH Common Stock" means the common shares of MEDSTRETCH, $0.001
par value.
"MEDSTRETCH Securities Filings" means MEDSTRETCH's annual report on Form
10-KSB for the year ended December 31, 2003, its quarterly reports on Form
10-QSB, and all other reports filed with the Commission prior to the Closing.
"Legal Requirement" means any statute, ordinance, law, rule, regulation,
code, injunction, judgment, order, decree, ruling, or other requirement enacted,
adopted or applied by any Regulatory Authority, including judicial decisions
applying common law or interpreting any other Legal Requirement.
"Losses" shall mean all damages, awards, judgments, assessments, fines,
sanctions, penalties, charges, costs, expenses, payments, diminutions in value
and other losses, however suffered or characterized, all interest thereon, all
costs and expenses of investigating any claim, lawsuit or arbitration and any
appeal there from, all actual attorneys', accountants', investment bankers' and
expert witness' fees incurred in connection therewith, whether or not such
claim, lawsuit or arbitration is ultimately defeated and, subject to Section
9.4, all amounts paid incident to any compromise or settlement of any such
claim, lawsuit or arbitration.
"Liability" means any liability or obligation (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Material Adverse Effect" means a material adverse effect on (i) the
assets, Liabilities, or properties of the Parties, (ii) the validity, binding
effect or enforceability of this Agreement or the Collateral Documents or (iii)
the ability of any Party to perform its obligations under this Agreement and the
Collateral Documents; provided, however, that none of the following shall
constitute a Material Adverse Effect on the Company: (i) the filing, initiation
and subsequent prosecution, by or on behalf of shareholders of any Party, of
litigation that challenges or otherwise seeks damages with respect to the
Exchange, this Agreement and/or transactions contemplated thereby or hereby,
(ii) occurrences due to a disruption of a Party's business as a result of the
announcement of the execution of this Agreement or changes caused by the taking
of action required by this Agreement, (iii) general economic conditions, or (iv)
any changes generally affecting the industries in which a Party operates.
"Exchange Shares" means the shares of MEDSTRETCH Common Stock deliverable
by MEDSTRETCH in exchange for Company Common Stock pursuant to Section 2.1.
"Person" means any natural person, corporation, partnership, trust,
unincorporated organization, association, Limited Liability Company, Regulatory
Authority or other entity.
"Regulatory Authority" means: (i) the United States of America; (ii) any
state, commonwealth, territory or possession of the United States of America and
any political subdivision thereof (including counties, municipalities and the
like); (iii) any foreign (as to the United States of America) sovereign entity
and any political subdivision thereof; or (iv) any agency, authority or
instrumentality of any of the foregoing, including any court, tribunal,
department, bureau, commission or board.
"Representative" means any director, officer, employee, agent, consultant,
advisor or other representative of a Person, including legal counsel,
accountants and financial advisors.
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"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations there under.
"Subsidiary" of a specified Person means (a) any Person if securities
having ordinary voting power (at the time in question and without regard to the
happening of any contingency) to elect a majority of the directors, trustees,
managers or other governing body of such Person are held or controlled by the
specified Person or a Subsidiary of the specified Person; (b) any Person in
which the specified Person and its subsidiaries collectively hold a 50% or
greater equity interest; (c) any partnership or similar organization in which
the specified Person or subsidiary of the specified Person is a general partner;
or (d) any Person the management of which is directly or indirectly controlled
by the specified Person and its Subsidiaries through the exercise of voting
power, by contract or otherwise.
"Tax" means any U.S. or non U.S. federal, state, provincial, local or
foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental, customs duties,
capital, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, intangible property,
recording, occupancy, sales, use, transfer, registration, value added minimum,
estimated or other tax of any kind whatsoever, including any interest, additions
to tax, penalties, fees, deficiencies, assessments, additions or other charges
of any nature with respect thereto, whether disputed or not.
1.2 Other Definitions. The following terms shall, when used in
this Agreement, have the meanings assigned to such terms in
the Sections indicated.
Term
Location
"Agreement"..........................Preamble
"Closing".................................2.3
"Closing Date"............................2.3
"Company Certificates".................2.7(a)
"Company Financial Statements"............3.8
"Company Intellectual Property Rights"....3.6
"Company Shares".....................Recitals
"Exchange"...........................Recitals
"Material Company Contract"...............3.4
"Material MEDSTRETCH Contract"............4.4
"Options"..............................3.2(b)
"Parties"............................Preamble
"MEDSTRETCH Common Stock"............Recitals
"Sellers"............................Recitals
ARTICLE II
EXCHANGE OF SHARES AND ISSUANCE OF WARRANTS
2.1 Exchange of Shares. Subject to the terms and conditions of this Agreement,
on the Closing Date (as hereinafter defined), MEDSTRETCH shall issue and
deliver to each of the Sellers and their designees the number of shares of
MEDSTRETCH Common Stock being the Exchange Shares as is set forth opposite
such Seller's and designee's names on Exhibit 2.1(a) hereto, in exchange
for the number of issued shares of the Company set forth opposite such
Seller's name on Exhibit 2.1(a) hereto together with an appropriately
executed stock power endorsed in favor of MEDSTRETCH, which MEDSTRECH will
hold and retain so that the Company is a wholly owned subsidiary.
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2.2 Restrictive Legend. All certificates representing the Exchange Shares shall
contain a legend in customary form restricting transfer under the 1933 Act
absent registration with the Commission therefore, or available exemption:
2.3 Closing. The closing of the transactions contemplated by this Agreement and
the Collateral Documents ("Closing") shall take place at the offices of
Company, or at such other location as the parties may agree on or before
August 31, 2004, at 10:00 a.m., Pacific Time, it being understood and
agreed that the Closing shall be deemed to occur simultaneously with the
execution of this Agreement. The date on which the Closing actually occurs
is referred to herein as the "Closing Date." The Closing may occur by
exchange of documents and instruments, without personal attendance of
representatives of the parties.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLERS
The Company and each of the Sellers (as to Sections 3.1-3.13, to the best
knowledge of such Seller) represent and warrant to MEDSTRETCH that the
statements contained in this ARTICLE III are correct and complete as of the date
of this Agreement and, except as provided in Section 7.1, will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this ARTICLE
III, except in the case of representations and warranties stated to be made as
of the date of this Agreement or as of another date and except for changes
contemplated or permitted by this Agreement).
3.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Nevada.
The Company has all requisite power and authority to own, lease and use its
assets as they are currently owned, leased and used and to conduct its
business as it is currently conducted. The Company is duly qualified or
licensed to do business in and is in good standing in each jurisdiction in
which the character of the properties owned, leased or used by it or the
nature of the activities conducted by it make such qualification necessary,
except any such jurisdiction where the failure to be so qualified or
licensed would not have a Material Adverse Effect on the Company or a
material adverse effect on the validity, binding effect or enforceability
of this Agreement or the Collateral Documents or the ability of the Company
to perform its obligations under this Agreement or any of the Collateral
Documents.
3.2 Capitalization.
(a) As of the date hereof, the authorized, issued and outstanding capital
stock and other ownership interests of the Company consists of 10,000 shares of
common stock, of which 100 shares are outstanding. All of the outstanding
Company Common Stock have been duly authorized and are validly issued, fully
paid and nonassessable. All the owners of the Company's stock are listed on
Exhibit 2.1(a).
(b) There are no outstanding or authorized options, warrants, purchase
rights, preemptive rights or other contracts or commitments that could require
the Company to issue, sell, or otherwise cause to become outstanding any of its
capital stock or other ownership interests (collectively "Options").
(c) All of the issued and outstanding capital stock of Company has been
duly authorized and are validly issued and outstanding, fully paid and
nonassessable and have been issued in compliance with applicable securities laws
and other applicable Legal Requirements or transfer restrictions under
applicable securities laws.
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3.3 Authority and Validity. The Company and each of the Sellers have all
requisite power to execute and deliver, to perform such Party's obligations
under, and to consummate the transactions contemplated by, this Agreement
(subject to receipt of any consents, approvals, authorizations or other
matters). The execution and delivery by the Company and each of the Sellers
of, the performance by the Company and each of the Sellers of such Party's
obligations under, and the consummation by the Company and each of the
Sellers of the transactions contemplated by, this Agreement have been duly
authorized by all requisite action of the Company and each of the Sellers.
This Agreement has been duly executed and delivered by the Company and each
of the Sellers and (assuming due execution and delivery by MEDSTRETCH) is
the legal, valid, and binding obligation of the Company and each of the
Sellers, enforceable against such Party in accordance with its terms. Upon
the execution and delivery of the Collateral Documents by each Person
(other than MEDSTRETCH) that is required by this Agreement to execute, or
that does execute, this Agreement or any of the Collateral Documents, and
assuming due execution and delivery thereof by MEDSTRETCH, the Collateral
Documents will be the legal, valid and binding obligations of the Company
and each of the Sellers, enforceable against such Party in accordance with
their respective terms.
3.4 No Breach or Violation. Subject to obtaining the consents, approvals,
authorizations, and orders of and making the registrations or filings with
or giving notices to Regulatory Authorities and Persons identified herein,
the execution, delivery and performance by the Company and each of the
Sellers of this Agreement and the Collateral Documents to which such Party
is a party, and the consummation of the transactions contemplated hereby
and thereby in accordance with the terms and conditions hereof and thereof,
do not and will not conflict with, constitute a violation or breach of,
constitute a default or give rise to any right of termination or
acceleration of any right or obligation of the Company or any of the
Sellers under, or result in the creation or imposition of any Encumbrance
upon the Company, the Company Assets, the Company Business or the Company
Common Stock.
3.5 Consents and Approvals. No consent, approval, authorization or order of,
registration or filing with, or notice to, any Regulatory Authority or any
other Person is necessary to be obtained, made or given by the Company or
any Seller in connection with the execution, delivery and performance by
the Company or any Seller of this Agreement or any Collateral Document or
for the consummation by the Company of the transactions contemplated hereby
or thereby, except to the extent the failure to obtain any such consent,
approval, authorization or order or to make any such registration or filing
would not have a Material Adverse Effect on the Company or a material
adverse effect on the validity, binding effect or enforceability of this
Agreement or the Collateral Documents or the ability of the Company to
perform its obligations under this Agreement or any of the Collateral
Documents.
3.6 Intellectual Property. To the knowledge of the Company, the Company has
good title to or the right to use all material company intellectual
property rights and all material inventions, processes, designs, formulae,
trade secrets and know-how necessary for the operation of the Company
Business without the payment of any royalty or similar payment. Excepted
are those royalty payments due Xxxxx & Wesson Holding Corporation and those
payments due Printron, Inc. for use of trade marked names.
3.7 Compliance with Legal Requirements. The Company has operated the Company
Business in compliance with all Legal Requirements applicable to the
Company except to the extent the failure to operate in compliance with all
material Legal Requirements would not have a Material Adverse Effect on the
Company or Material Adverse Effect on the validity, binding effect or
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enforceability of this Agreement or the Collateral Documents.
3.8 Financial Statements. The Company's financial statements (including the
notes thereto) ("Company Financial Statements") have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby (except as may be indicated in the notes thereto) and
present fairly in all material respects the financial condition of the
Company and its results of operations as of the dates and for the periods
indicated (except as may be indicated in the notes thereto), subject in the
case of the interim unedited financial statements only to normal year-end
adjustments (none of which will be material in amount) and the omission of
footnotes. The Company Financial Statements consist of a reviewed (not
audited) Profit and Loss Statement from May 2003 to March 2004 and Balance
Sheet as of March 31, 2004.
The Company covenants and agrees with MEDSTRETCH that the Company shall
obtain an audit of the Company Financial Statements and file within 60 days
of the Closing such Financial Statements with the SEC pursuant to the
Securities Exchange Act of 1934, and the rules promulgated thereunder.
Fulfillment of this covenant and agreement by the Company is a material
condition subsequent to all of the transactions under and contemplated by
this Agreement.
3.9 Ordinary Course. The Company conducted its business,
marketed its property and equipment and kept its books of
accounts, records and files, substantially in the same manner
as previously conducted.
3.10 Litigation. There are no outstanding judgments or orders against or
otherwise affecting or related to the Company, the Company Business or the
Company Assets; and (ii) there is no action, suit, complaint, proceeding or
investigation, judicial, administrative or otherwise, that is pending or,
to the Company's knowledge, threatened that, if adversely determined, would
have Material Adverse Effect on the Company or a material adverse effect on
the validity, binding effect or enforceability of this Agreement or the
Collateral Documents.
3.11 Taxes. The Company has duly and timely filed in proper form all Tax Returns
for all Taxes required to be filed with the appropriate Regulatory
Authority, except where such failure would not have a Material Adverse
Effect on the Company.
3.12 Books and Records. The books and records of the Company accurately and
fairly represent the Company Business and its results of operations in all
material respects. All accounts receivable and inventory of the Company
Business are reflected properly on such books and records in all material
respects.
3.13 Brokers or Finders. No broker or finder has acted directly or indirectly
for the Company or any of its Affiliates in connection with the
transactions contemplated by this Agreement, and neither the Company, nor
any of its Affiliates has incurred any obligation to pay any brokerage or
finder's fee or other commission in connection with the transaction
contemplated by this Agreement.
3.14 Purchase for Investment.
(a) Each Seller is acquiring the MEDSTRETCH Shares for investment for such
Seller's own account and not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and such Seller has no present
intention of selling, granting any participation in, or otherwise distributing
the same. Each Seller further represents that such Seller does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person or to any third person, with
respect to any of the Company Shares.
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(b) Each Seller understands that the MEDSTRETCH Shares are not registered
under the Securities Act, that MEDSTRETCH's sale and the issuance of its
securities hereunder is exempt from registration under the Securities Act
pursuant to Section 4(2) thereof, and that MEDSTRETCH's reliance on such
exemption is predicated on such Seller's representations set forth herein. Such
Seller is an "accredited investor" as that term is defined in Rule 501(a) of
Regulation D under the Act.
3.15 Investment Experience. Each Seller acknowledges that such Seller can bear
the economic risk of its investment, and has such knowledge and experience
in financial and business matters that it is capable of evaluating the
merits and risks of the investment in the MEDSTRETCH Shares.
3.16 Information. The Sellers have carefully reviewed such information as each
Seller deemed necessary to evaluate an investment in the MEDSTRETCH Shares,
including MEDSTRETCH's Securities Filings and this Agreement. To the full
satisfaction of each Seller, such Seller has been furnished all materials
that such Seller has requested relating to the Company and the issuance of
the MEDSTRETCH Shares hereunder, and each Seller has been afforded the
opportunity to ask questions of representatives of the Company to obtain
any information necessary to verify the accuracy of any representations or
information made or given to the Sellers. Notwithstanding the foregoing,
nothing herein shall derogate from or otherwise modify the representations
and warranties of the Company set forth in this Agreement, on which each of
the Sellers has relied in making the Exchange of the Company Shares for the
MEDSTRETCH Shares.
3.17 Restricted Securities. Each Seller understands that the MEDSTRETCH Shares
may not be sold, transferred, or otherwise disposed of without registration
under the Act or an exemption there from, and that in the absence of an
effective registration statement covering the MEDSTRETCH Shares or any
available exemption from registration under the Act, the MEDSTRETCH Shares
must be held indefinitely. Each Seller is aware that the MEDSTRETCH Shares
may not be sold pursuant to Rule 144 promulgated under the Act unless all
of the conditions of that Rule are met. Among the conditions for use of
Rule 144 is the availability of current information to the public about the
Company.
3.18 Disclosure. No representation or warranty of the Company in this Agreement
or in the Collateral Documents and no statement in any certificate
furnished or to be furnished by the Company pursuant to this Agreement
contained, contains or will contain on the date such agreement or
certificate was or is delivered, or on the Closing Date, any untrue
statement of a material fact, or omitted, omits or will omit on such date
to state any material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MEDSTRETCH
MEDSTRETCH, represents and warrants to the Company that the statements
contained in this ARTICLE IV are correct and complete as of the date of this
Agreement and, except as provided in Section 8.1, will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this ARTICLE IV, except in
the case of representations and warranties stated to be made as of the date of
this Agreement or as of another date and except for changes contemplated or
permitted by the Agreement). For the purposes of the MEDSTRETCH representations,
it is understood that MEDSTRETCH is not representing or warranting as to any
event prior to January 1, 2000, except as set forth in Sections 4.1, 4.2(a) and
4.2(c).
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4.1 Organization and Qualification. MEDSTRETCH is a corporation duly organized,
validly existing and in good standing under the laws of Nevada. MEDSTRETCH
has all requisite power and authority to own, lease and use its assets as
they are currently owned, leased and used and to conduct its business as it
is currently conducted. MEDSTRETCH is duly qualified or licensed to do
business in and is in good standing in each jurisdiction in which the
character of the properties owned, leased or used by it or the nature of
the activities conducted by it makes such qualification necessary, except
any such jurisdiction where the failure to be so qualified or licensed and
in good standing would not have a Material Adverse Effect on MEDSTRETCH or
a Material Adverse Effect on the validity, binding effect or enforceability
of this Agreement or the Collateral Documents or the ability of the Company
or any of MEDSTRETCH to perform their obligations under this Agreement or
any of the Collateral Documents.
4.2 Capitalization.
(a) As of the date hereof, MEDSTRETCH's authorized capital stock of
100,000,000 shares of common stock, $0.001 par value, of which there are
12,166,000 shares outstanding. The MEDSTRETCH Shares, when issued in accordance
with this Agreement, will have been duly authorized, validly issued and
outstanding and will be fully paid and nonassessable.
(b) There are no outstanding or authorized options, warrants, purchase
rights, preemptive rights or other contracts or commitments that could require
MEDSTRETCH to issue, sell, or otherwise cause to become outstanding any of its
capital stock or other ownership interests.
(c) To the best knowledge of MEDSTRETCH, after performing customary due
diligence, all of the issued and outstanding shares of MEDSTRETCH Common Stock
have been issued in compliance with applicable securities laws and other
applicable Legal Requirements. Notwithstanding the foregoing, MEDSTRETCH has
adopted a Performance Equity Plan for 3,000,000 shares of common stock, none of
which have been allocated to any awards or issued for any awards.
4.3 Authority and Validity. MEDSTRETCH has all requisite power to execute and
deliver, to perform such party's obligations under, and to consummate the
transactions contemplated by, this Agreement and the Collateral Documents.
The execution and delivery by MEDSTRETCH of, the performance by MEDSTRETCH
of its respective obligations under, and the consummation by MEDSTRETCH of
the transactions contemplated by, this Agreement and the Collateral
Documents have been duly authorized by all requisite action of MEDSTRETCH.
This Agreement has been duly executed and delivered by MEDSTRETCH and
(assuming due execution and delivery by the Company and the Sellers) is the
legal, valid and binding obligation of MEDSTRETCH, enforceable against it
in accordance with its terms. Upon the execution and delivery by MEDSTRETCH
of the Collateral Documents to which it is a party, and assuming due
execution and delivery thereof by the other parties thereto, the Collateral
Documents will be the legal, valid and binding obligations of each such
Person, as the case may be, enforceable against each of them in accordance
with their respective terms.
4.4 No Breach or Violation. Subject to obtaining the consents, approvals,
authorizations, and orders of and making the registrations or filings with
or giving notices to Regulatory Authorities and Persons identified herein,
the execution, delivery and performance by MEDSTRETCH of this Agreement and
the Collateral Documents and the consummation of the transactions
contemplated hereby and thereby in accordance with the terms and conditions
hereof and thereof, do not and will not conflict with, constitute a
violation or breach of, constitute a default or give rise to any right of
termination or acceleration of any right or obligation of MEDSTRETCH under,
or result in the creation or imposition of any Encumbrance upon the
property of MEDSTRETCH.
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4.5 Consents and Approvals. Except for requirements under applicable United
States or state securities laws, no consent, approval, authorization or
order of, registration or filing with, or notice to, any Regulatory
Authority or any other Person is necessary to be obtained, made or given by
MEDSTRETCH in connection with the execution, delivery and performance by
them of this Agreement or any Collateral Documents or for the consummation
by them of the transactions contemplated hereby or thereby, except to the
extent the failure to obtain such consent, approval, authorization or order
or to make such registration or filings or to give such notice would not
have a Material Adverse Effect on MEDSTRETCH or a material adverse effect
on the validity, binding effect or enforceability of this Agreement or the
Collateral Documents or the ability of the Company or MEDSTRETCH to perform
its obligations under this Agreement or any of the Collateral Documents.
4.6 Compliance with Legal Requirements. MEDSTRETCH has operated the MEDSTRETCH
Business in compliance with all material Legal Requirements applicable to
MEDSTRETCH, including the Legal Requirements of Canadian and Provincial
authorities, except to the extent the failure to operate in compliance with
all material Legal Requirements, including those of Canadian and Provincial
authorities,, would not have a Material Adverse Effect on MEDSTRETCH or a
Material Adverse Effect on the validity, binding effect or enforceability
of this Agreement or the Collateral Documents.
4.7 Litigation. (i) There are no outstanding judgments or orders against or
otherwise affecting or related to MEDSTRETCH, its business or assets; and
(ii) there is no action, suit, complaint, proceeding or investigation,
judicial, administrative or otherwise, that is pending or, to the best
knowledge of MEDSTRETCH, threatened that, if adversely determined, would
have a Material Adverse Effect on MEDSTRETCH or a material adverse effect
on the validity, binding effect or enforceability of this Agreement or the
Collateral Documents.
4.8 Ordinary Course. Since the date of the balance sheet included in the most
recent MEDSTRETCH Securities Filings filed through the date hereof, there
has not been any occurrence, event, incident, action, failure to act or
transaction involving MEDSTRETCH which is reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect on MEDSTRETCH.
4.9 Assets and Liabilities. As of the date of this Agreement, MEDSTRETCH has no
Assets and liabilities of not more than $30,000. MEDSTRETCH's Assets and
$33,262.63 of its total liabilities disclosed in the MEDSTRETCH Form 10-QSB
for the quarter ended March 31, 2003 will have been eliminated as of the
Closing. The Parties have agreed that MEDSTRETCH will continue to use the
services of Xx. Xxxxxx for accounting services at his regular rates payable
as the company and he agree, and that with respect to the outstanding
invoices and invoices for time through the date of Closing of Xxxxxxxx
Xxxxxx, MEDSTRETCH will pay $5,000 at Closing and the balance due 30 days
after Closing.
4.10 Taxes. MEDSTRETCH has duly and timely filed in proper form all Tax Returns
for all Taxes required to be filed with the appropriate Governmental
Authority, except where such failure to file would not have a Material
Adverse Effect on MEDSTRETCH.
4.11 Books and Records. The books and records of MEDSTRETCH accurately and
fairly represent the MEDSTRETCH Business and its results of operations in
all material respects. All accounts receivable and inventory of the
MEDSTRETCH Business are reflected properly on such books and records in all
material respects.
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4.12 Environmental Matters. To the best knowledge of MEDSTRETCH, MEDSTRETCH has
not violated any Environmental Laws, lacks any permits, licenses or other
approvals required of them under applicable Environmental Laws or is
violating any term or condition of any such permit, license or approval,
except in each case as would not, individually or in the aggregate, result
in a Material Adverse Effect on MEDSTRETCH.
4.13 Financial and Other Information.
(a) The historical financial statements (including the notes thereto)
contained (or incorporated by reference) in the MEDSTRETCH Securities Filings
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby (except as may be indicated in the notes
thereto), and present fairly the financial condition of MEDSTRETCH and its
results of operations as of the dates and for the periods indicated, subject in
the case of the unaudited financial statements only to normal year-end
adjustments (none of which will be material in amount) and the omission of
footnotes.
(b) MEDSTRETCH Securities Filings did not, as of their filing dates,
contain (directly or by incorporation by reference) any 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 (or incorporated therein by reference),
in light of the circumstances under which they were or will be made, not
misleading.
4.14 Trading. No order suspending the sale or ceasing the trading or quotation
of the MEDSTRETCH Common Stock on the Over-The-Counter Bulletin Board has
been issued by any court, securities commission or regulatory authority in
the United States, and no proceedings for such purpose are pending or, to
the knowledge of MEDSTRETCH, after reasonable inquiry, threatened. It is
understood that for the purposes of this representation and warranty, no
security of MEDSTRETCH is currently traded on the Over-the-Counter Bulletin
Board, NASDAQ or securities exchange.
4.15 Brokers or Finders. No broker or finder has acted directly or indirectly
for MEDSTRETCH, any MEDSTRETCH Party or any of their Affiliates in
connection with the transactions contemplated by this Agreement, and
neither MEDSTRETCH, nor any of its Affiliates has incurred any obligation
to pay any brokerage or finder's fee or other commission in connection with
the transaction contemplated by this Agreement.
4.16 Disclosure. No representation or warranty of MEDSTRETCH in this Agreement
or in the Collateral Documents and no statement in any certificate
furnished or to be furnished by MEDSTRETCH pursuant to this Agreement
contained, contains or will contain on the date such agreement or
certificate was or is delivered, or on the Closing Date, any untrue
statement of a material fact, or omitted, omits or will omit on such date
to state any material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.
4.17 Filings. MEDSTRETCH has made all of the filings required by the Securities
Act of 1933, as amended, and the Exchange Act of 1934, as amended, required
to be made and no such filing contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
made, not misleading.
ARTICLE V
COVENANTS OF THE COMPANY
Between the date of this Agreement and the Closing Date:
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5.1 Additional Information. The Company shall provide to MEDSTRETCH and its
Representatives such financial, operating and other documents, data and
information relating to the Company, the Company Business and the Company
Assets and Liabilities of the Company, as MEDSTRETCH or its Representatives
may reasonably request.
5.2 Continuity and Maintenance of Operations. The Company shall, and shall
cause each of its Subsidiaries to use its commercially reasonable efforts
to promote the financial success of the Company Business and promptly
notify MEDSTRETCH of any material adverse change in the condition
(financial or otherwise) of the Company Business and use its commercially
reasonable efforts to promote, develop and preserve its relationships with
its present employees as well as the goodwill of its customers and promptly
notify MEDSTRETCH of any material adverse change in such relationships.
5.3 Consents and Approvals. As soon as practicable after execution of this
Agreement, the Company shall use commercially reasonable efforts to obtain
any necessary consent, approval, authorization or order of, make any
registration or filing with or give any notice to, any Regulatory Authority
or Person as is required to be obtained, made or given by the Company to
consummate the transactions contemplated by this Agreement and the
Collateral Documents. The Company will provide to MEDSTRETCH such
information as may be required for MEDSTRETCH to fulfill its obligations to
obtain any necessary consent, approval, authorization or order or make any
registration or filing, including Schedule 14(f), and all such information
will be complete and not contain any misstatement or omission of a material
fact.
5.4 Notification of Certain Matters. The Company shall promptly notify
MEDSTRETCH of any fact, event, circumstance or action known to it that is
reasonably likely to cause the Company to be unable to perform any of its
covenants contained herein or any condition precedent in ARTICLE VII not to
be satisfied, or that, if known on the date of this Agreement, would have
been required to be disclosed to MEDSTRETCH pursuant to this Agreement or
the existence or occurrence of which would cause any of the Company's
representations or warranties under this Agreement not to be correct and/or
complete. The Company shall give prompt written notice to MEDSTRETCH of any
adverse development causing a breach of any of the representations and
warranties in ARTICLE III as of the date made.
5.5 Company Schedules. The Company shall, from time to time prior to Closing,
supplement its Schedules with additional information that, if existing or
known to it on the date of delivery to MEDSTRETCH, would have been required
to be included therein.
5.6 Audit of Company Financial Statements. The Company covenants and agrees
with MEDSTRETCH and the that the Company shall obtain an audit of the
Company Financial Statements, and file within 60 days after the Closing
such Financial Statements with the SEC by Form 8-K/A, together with
required pro forma financial information. The Financial Statements shall be
compliant with the SEC's Form 8-K as to periods covered and presentation of
information. Fulfillment of this covenant and agreement by the Company is a
material condition subsequent to all of the transactions under and
contemplated by this Agreement.
ARTICLE VI
COVENANTS OF MEDSTRETCH
Between the date of this Agreement and the Closing Date,
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6.1 Additional Information. MEDSTRETCH shall provide to the Company and its
Representatives such financial, operating and other documents, data and
information relating to MEDSTRETCH, the MEDSTRETCH Business and the
MEDSTRETCH Assets and the Liabilities of MEDSTRETCH, as the Company or its
Representatives may reasonably request. MEDSTRETCH, upon request, in
addition to providing the corporate records, will prepare and provide to
the Company such information on the sales of 166,000 shares of common stock
in the registered offering by MEDSTRETCH.
6.2 No Solicitations. From and after the date of this Agreement until the
Closing or termination of this Agreement pursuant to ARTICLE X, MEDSTRETCH
will not nor will it authorize or permit any of its officers, directors,
affiliates or employees or any investment banker, attorney or other advisor
or representative retained by it, directly or indirectly, (i) solicit or
initiate the making, submission or announcement of any other acquisition
proposal, (ii) participate in any discussions or negotiations regarding, or
furnish to any person any non-public information with respect to any other
acquisition proposal, (iii) engage in discussions with any Person with
respect to any other acquisition proposal, except as to the existence of
these provisions, (iv) approve, endorse or recommend any other acquisition
proposal or (v) enter into any letter of intent or similar document or any
contract agreement or commitment contemplating or otherwise relating to any
other acquisition proposal, other than as required to comply with their
fiduciary duties.
6.3 Continuity and Maintenance of Operations. MEDSTRETCH promptly will notify
the Company of any material adverse change in the condition (financial or
otherwise) of the MEDSTRETCH Business.
6.4 Consents and Approvals. As soon as practicable after execution of this
Agreement, MEDSTRETCH shall use their commercially reasonable efforts to
obtain any necessary consent, approval, authorization or order of, make any
registration or filing with or give notice to, any Regulatory Authority or
Person as is required to be obtained, made or given by any of MEDSTRETCH to
consummate the transactions contemplated by this Agreement and the
Collateral Documents.
6.5 Notification of Certain Matters. MEDSTRETCH shall promptly notify the
Company of any fact, event, circumstance or action known to it that is
reasonably likely to cause MEDSTRETCH to be unable to perform any of its
covenants contained herein or any condition precedent in ARTICLE VIII not
to be satisfied, or that, if known on the date of this Agreement, would
have been required to be disclosed to the Company pursuant to this
Agreement or the existence or occurrence of which would cause any of the
MEDSTRETCH representations or warranties under this Agreement not to be
correct and/or complete. MEDSTRETCH shall give prompt written notice to the
Company of any adverse development causing a breach of any of the
representations and warranties in ARTICLE IV.
6.6 MEDSTRETCH Further Information. MEDSTRETCH shall, from time to time prior
to Closing, supplement the information previously supplied to the Company
with additional information that, if existing or known to it on the date of
this Agreement, would have been required to be included therein.
6.7 Securities Filings. MEDSTRETCH will timely file all reports and other
documents required to be filed with the Securities and Exchange Commission,
which reports and other documents do not and will not contain any
misstatement of a material fact, and do not and will not omit any material
fact necessary to make the statements therein not misleading.
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6.8 Election to MEDSTRETCH's Board of Directors. At the Closing, MEDSTRETCH
shall secure the resignation of the present directors in order to cause the
nominees of the Company to be appointed to MEDSTRETCH's board of directors
subject to fiduciary obligations under applicable law. Prior to the closing
MEDSTRETCH shall prepare, with the assistance of the Company, and file with
the Commission, and send to all s, the notice and information required by
Commission Rule 14f-1
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF MEDSTRETCH
All obligations of MEDSTRETCH under this Agreement shall be subject to the
fulfillment at or prior to Closing of each of the following conditions, it being
understood that MEDSTRETCH may, in their sole discretion, to the extent
permitted by applicable Legal Requirements, waive any or all of such conditions
in whole or in part.
7.1 Accuracy of Representations. All representations and warranties of the
Company contained in this Agreement, the Collateral Documents and any
certificate delivered by any of the Company at or prior to Closing shall
be, if specifically qualified by materiality, true in all respects and, if
not so qualified, shall be true in all material respects, in each case on
and as of the Closing Date with the same effect as if made on and as of the
Closing Date, except for representations and warranties expressly stated to
be made as of the date of this Agreement or as of another date other than
the Closing Date and except for changes contemplated or permitted by this
Agreement. The Company shall have delivered to MEDSTRETCH a certificate
dated as of the Closing Date to the foregoing effect.
7.2 Covenants. The Company shall, in all material respects, have performed and
complied with each of the covenants, obligations and agreements contained
in this Agreement and the Collateral Documents that are to be performed or
complied with by them at or prior to Closing. The Company shall have
delivered to a certificate dated the Closing Date to the foregoing effect.
7.3 Consents and Approvals. All consents, approvals, permits, authorizations
and orders required to be obtained from, and all registrations, filings and
notices required to be made with or given to, any Regulatory Authority or
Person as provided herein shall have been obtained, and the filing and
distribution requirements relating to the Schedule 14f-1 shall have been
fulfilled.
7.4 Delivery of Documents. The Company shall have delivered, or caused to be
delivered, to MEDSTRETCH the following documents:
(i) Certified copies of the Company's articles of incorporation and
by-laws and certified resolutions of the board of directors and
Shareholders of the Company authorizing the execution of this Agreement and
the Collateral Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby.
(ii) Copy of the IP Assignment by MEDSTRETCH to Xx. Xxxxxxxxx of the
intellectual property and other assets of MEDSTRETCH relating to the
muscular-skeletal product plans.
(iii) Such other documents and instruments as MEDSTRETCH may
reasonably request: (A) to evidence the accuracy of the Company's
representations and warranties under this Agreement, the Collateral
Documents and any documents, instruments or certificates required to be
delivered there under;(B) to evidence the performance by the Company of,
or the compliance by the Company with, any covenant, obligation, condition
and agreement to be performed or complied with by the Company under this
Agreement and the Collateral Documents; or (C) to otherwise facilitate the
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consummation or performance of any of the transactions contemplated by
this Agreement and the Collateral Documents.
7.5 No Material Adverse Change. Since the date hereof, there shall have been no
material adverse change in the Company Assets, the Company Business or the
financial condition or operations of the Company, taken as a whole.
7.6 Delivery of Company Shares. The Sellers shall have delivered certificates
representing 100% of the Company Shares together with appropriate stock
powers therefore, to MEDSTRETCH, in exchange for the Exchange Shares.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE SELLERS
All obligations of the Company and the Sellers under this Agreement shall
be subject to the fulfillment at or prior to Closing of the following
conditions, it being understood that the Company and the Sellers may, in their
sole discretion, to the extent permitted by applicable Legal Requirements, waive
any or all of such conditions in whole or in part.
8.1 Accuracy of Representations. All representations and warranties of
MEDSTRETCH contained in this Agreement and the Collateral Documents and any
other document, instrument or certificate delivered by any of MEDSTRETCH at
or prior to the Closing shall be, if specifically qualified by materiality,
true and correct in all respects and, if not so qualified, shall be true
and correct in all material respects, in each case on and as of the Closing
Date with the same effect as if made on and as of the Closing Date, except
for representations and warranties expressly stated to be made as of the
date of this Agreement or as of another date other than the Closing Date
and except for changes contemplated or permitted by this Agreement.
MEDSTRETCH shall have delivered to the Company a certificate dated as of
the Closing Date to the foregoing effect.
8.2 Covenants. MEDSTRETCH shall, in all material respects, have performed and
complied with each obligation, agreement, covenant and condition contained
in this Agreement and the Collateral Documents and required by this
Agreement and the Collateral Documents to be performed or complied with by
MEDSTRETCH at or prior to Closing. MEDSTRETCH shall have delivered to the
Company a certificate dated the Closing Date to the foregoing effect.
8.3 Consents and Approvals. All consents; approvals, authorizations and orders
required to be obtained from, and all registrations, filings and notices
required to be made with or given to, any Regulatory Authority or Person as
provided herein shall have been obtained, and the filing and distribution
requirements relating to the Schedule 14f-1 shall have been fulfilled.
8.4 Delivery of Documents. MEDSTRETCH, as applicable, shall have executed and
delivered, or caused to be executed and delivered, to the Company the
following documents:
(i) Certified copies of the articles of incorporation and by-laws of
MEDSTRETCH and certified resolutions by the board of directors authorizing
the execution of this Agreement and the Collateral Documents and the
consummation of the transactions contemplated hereby.
(ii) Copy of the IP Assignment by MEDSTRETCH to Xx. Xxxxxxxxx of the
intellectual property and other assets of MEDSTRETCH relating to the
muscular-skeletal product plans.
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(iii) Such other documents and instruments as the Company may
reasonably request: (A) to evidence the accuracy of the representations and
warranties of MEDSTRETCH under this Agreement and the Collateral Documents
and any documents, instruments or certificates required to be delivered
there under; (B) to evidence the performance by MEDSTRETCH of, or the
compliance by MEDSTRETCH with, any covenant, obligation, condition and
agreement to be performed or complied with by MEDSTRETCH under this
Agreement and the Collateral Documents; or (C) to otherwise facilitate the
consummation or performance of any of the transactions contemplated by this
Agreement and the Collateral Documents.
(iii) Letters of resignation from MEDSTRETCH's current officers and
directors to be effective upon the Closing.
(iv) Board resolutions from MEDSTRETCH's current directors appointing
only designees of the Company to MEDSTRETCH's board of directors, effective
the Closing.
(v) All other corporate books and records of MEDSTRETCH.
8.5 No Material Adverse Change. There shall have been no
material adverse change in the business, financial condition
or operations of MEDSTRETCH, other than as contemplated
herein.
8.6 No Assets and limited Liabilities. MEDSTRETCH shall have no assets and only
those liabilities set forth on Exhibit 8.6 to this Agreement which is
attached hereto and made a part hereof by this reference.
8.7 Payment of Costs. The Company or its Affiliates shall have paid all of the
costs and expenses of MEDSTRETCH associated with the transactions
contemplated herein.
8.8 Satisfaction of Promissory Note. MEDSTRETCH shall provide Company with
written proof that the unsecured promissory note of $24,984 (including
interest of 8%) with a shareholder of MEDSTRETCH has been satisfied in full
and duly discharged, in full.
8.9 File 10-QSB for the period ended June 30, 2004. MEDSTRETCH agrees to
prepare and file its quarterly report on Form 10-QSB for the period ended
June 30, 2004. All costs and fees associated with such filing shall be paid
in full by MEDSTRETCH in due course. The current management persons will be
available to provide assistance but, in no manner will they be responsible,
including financially, for the preparation or filing of this report.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by the Sellers. Each of the Sellers (pro rata based on
each Seller's percentage interest in the Company) shall indemnify, defend
and hold harmless (i) MEDSTRETCH, (ii) each of MEDSTRETCH's assigns and
successors in interest to the Exchange Shares, and (iii) each of their
respective shareholders, members, partners, directors, officers, managers,
employees, agents, attorneys and representatives, from and against any and
all Losses which may be incurred or suffered by any such party and which
may arise out of or result from any breach of any representation,
warranty, covenant or agreement of the Company or the Sellers contained in
this Agreement. Notwithstanding the foregoing, (a) no claim under this
Section 9.1 may be made unless notice is given pursuant to Section 9.3
within two years from the Closing Date, and (b) as to Sections 3.14- 3.17,
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no Seller shall be responsible for the representations and warranties of
any other Seller.
9.2 Indemnification by MEDSTRETCH. MEDSTRETCH shall indemnify, defend and hold
harmless the Company and each of the Sellers from and against any and all
Losses which may be incurred or suffered by any such party hereto and
which may arise out of or result from any breach of any representation,
warranty, covenant or agreement of MEDSTRETCH contained in this Agreement
made as of the Closing. Notwithstanding the foregoing, no claim under this
Section 9.2 may be made unless notice is given pursuant to Section 9.3
within two years from the Closing Date.
9.3 Notice to Indemnifying Party. If any party (the "Indemnified Party")
receives notice of any claim or other commencement of any action or
proceeding with respect to which any other party (or parties) (the
"Indemnifying Party") is obligated to provide indemnification pursuant to
Sections 9.1 or 9.2, the Indemnified Party shall promptly give the
Indemnifying Party written notice thereof, which notice shall specify in
reasonable detail, if known, the amount or an estimate of the amount of
the liability arising there from and the basis of the claim. Such notice
shall be a condition precedent to any liability of the Indemnifying Party
for indemnification hereunder, but the failure of the Indemnified Party to
give prompt notice of a claim shall not adversely affect the Indemnified
Party's right to indemnification hereunder unless the defense of that
claim is materially prejudiced by such failure. The Indemnified Party
shall not settle or compromise any claim by a third party for which it is
entitled to indemnification hereunder without the prior written consent of
the Indemnifying Party (which shall not be unreasonably withheld or
delayed) unless suit shall have been instituted against it and the
Indemnifying Party shall not have taken control of such suit after
notification thereof as provided in Section 9.4.
9.4 Defense by Indemnifying Party. In connection with any claim giving rise to
indemnity hereunder resulting from or arising out of any claim or legal
proceeding by a Person who is not a party to this Agreement, the
Indemnifying Party at its sole cost and expense may, upon written notice
to the Indemnified Party, assume the defense of any such claim or legal
proceeding (i) if it acknowledges to the Indemnified Party in writing its
obligations to indemnify the Indemnified Party with respect to all
elements of such claim (subject to any limitations on such liability
contained in this Agreement) and (ii) if it provides assurances,
reasonably satisfactory to the Indemnified Party, that it will be
financially able to satisfy such claims in full if the same are decided
adversely. If the Indemnifying Party assumes the defense of any such claim
or legal proceeding, it may use counsel of its choice to prosecute such
defense, subject to the approval of such counsel by the Indemnified Party,
which approval shall not be unreasonably withheld or delayed. The
Indemnified Party shall be entitled to participate in (but not control)
the defense of any such action, with its counsel and at its own expense;
provided, however, that if the Indemnified Party, in its sole discretion,
determines that there exists a conflict of interest between the
Indemnifying Party (or any constituent party thereof) and the Indemnified
Party, the Indemnified Party (or any constituent party thereof) shall have
the right to engage separate counsel, the reasonable costs and expenses of
which shall be paid by the Indemnified Party. If the Indemnifying Party
assumes the defense of any such claim or legal proceeding, the
Indemnifying Party shall take all steps necessary to pursue the resolution
thereof in a prompt and diligent manner. The Indemnifying Party shall be
entitled to consent to a settlement of, or the stipulation of any judgment
arising from, any such claim or legal proceeding, with the consent of the
Indemnified Party, which consent shall not be unreasonably withheld or
delayed; provided, however, that no such consent shall be required from
the Indemnified Party if (i) the Indemnifying Party pays or causes to be
paid all Losses arising out of such settlement or judgment concurrently
with the effectiveness thereof (as well as all other Losses theretofore
incurred by the Indemnified Party which then remain unpaid or
unreimbursed), (ii) in the case of a settlement, the settlement is
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conditioned upon a complete release by the claimant of the Indemnified
Party and (iii) such settlement or judgment does not require the
Encumbrance of any asset of the Indemnified Party or impose any
restriction upon its conduct of business.
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ARTICLE X
TERMINATION
10.1 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any
time prior to the Closing:
(a) by mutual written agreement of Parties; or
(b) by either the Company or MEDSTRETCH upon notification to the
non-terminating party by the terminating party provided that:
(i) the terminating party is not in material breach of its obligations
under this Agreement and there has been a material breach of any representation,
warranty, covenant or agreement on the part of the non-terminating party set
forth in this Agreement such that the conditions in Sections 7.1, 7.2, 8.1 or
8.2 will not be satisfied; or
(ii) any court of competent jurisdiction or other competent Governmental
or Regulatory Authority shall have issued an order making illegal or otherwise
permanently restricting, preventing or otherwise prohibiting the Exchange and
such order shall have become final and nonappealable.
10.2 Effect of Termination. If this Agreement is validly terminated by either
the Company or MEDSTRETCH pursuant to Section 10.1, this Agreement will
forthwith become null and void and there will be no liability or
obligation on the part of the parties hereto, except that nothing
contained herein shall relieve any party hereto from liability for willful
breach of its representations, warranties, covenants or agreements
contained in this Agreement.
ARTICLE XI
11.1 Cancellation of Shares. As a material subsequent condition to this
Agreement and the Closing, days following the Closing, but not prior to the
Closing, MEDSTRETCH shall have caused 10,666,000 shares of MEDSTRETCH
Common Stock held by MEDSTRETCH shareholders identified on Exhibit 11.1
attached hereto and made a part hereof, to be cancelled in exchange for
Company's transferring all rights title and interest in and to MEDSTRETCH
intellectual property and other assets relating to the muscular-skeletal
program plans at Closing. MEDSTRETCH acknowledges that failure to abide by
this Section 11.1 of the Agreement will cause irreparable harm to Company
and the Company's shareholders and that Company will suffer significant
damage as a result of such failure which is above and beyond the value of
the MEDSTRETCH intellectual property.
11.2 Parties Obligated and Benefited. This Agreement shall be binding upon the
Parties and their respective successors by operation of law and shall
inure solely to the benefit of the Parties and their respective successors
by operation of law, and no other Person shall be entitled to any of the
benefits conferred by this Agreement, except that the Company Shareholders
shall be third party beneficiaries of this Agreement. Without the prior
written consent of the other Party, no Party may assign this Agreement or
the Collateral Documents or any of its rights or interests or delegate any
of its duties under this Agreement or the Collateral Documents.
11.3 Publicity. The initial press release shall be a joint press release and
thereafter the Company and MEDSTRETCH each shall consult with each other
prior to issuing any press releases or otherwise making public
announcements with respect to the Exchange and the other transactions
contemplated by this Agreement and prior to making any filings with any
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third party and/or any Regulatory Authorities (including any national
securities interdealer quotation service) with respect thereto, except as
may be required by law or by obligations pursuant to any listing agreement
with or rules of any national securities interdealer quotation service.
11.4 Notices. Any notices and other communications required or permitted
hereunder shall be in writing and shall be effective upon delivery by hand
or upon receipt if sent by certified or registered mail (postage prepaid
and return receipt requested) or by a nationally recognized overnight
courier service (appropriately marked for overnight delivery) or upon
transmission if sent by telex or facsimile (with request for immediate
confirmation of receipt in a manner customary for communications of such
respective type and with physical delivery of the communication being made
by one or the other means specified in this Section as promptly as
practicable thereafter). Notices shall be addressed as follows:
(a) If to MEDSTRETCH, to:
MEDSTRETCH Inc.
Xx. Xxxxxxxx Xxxxxxxxx
000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
With a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxxx Xxxxxx
000 Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to the Company and the Sellers to:
Pride Business Development Group
Xxx X. Xxxxxx
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Any Party may change the address to which notices are required to be sent
by giving notice of such change in the manner provided in this Section.
11.6 Attorneys' Fees. In the event of any action or suit based upon or arising
out of any alleged breach by any Party of any representation, warranty,
covenant or agreement contained in this Agreement or the Collateral
Documents, the prevailing Party shall be entitled to recover reasonable
attorneys' fees and other costs of such action or suit from the other
Party.
11.7 Headings. The Article and Section headings of this Agreement are for
convenience only and shall not constitute a part of this Agreement or in
any way affect the meaning or interpretation thereof.
11.8 Choice of Law. This Agreement and the rights of the Parties under it shall
be governed by and construed in all respects in accordance with the laws
of the State of California, without giving effect to any choice of law
provision or rule.
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11.9 Rights Cumulative. All rights and remedies of each of the Parties under
this Agreement shall be cumulative, and the exercise of one or more rights
or remedies shall not preclude the exercise of any other right or remedy
available under this Agreement or applicable law.
11.10 Further Actions. The Parties shall execute and deliver to each other, from
time to time at or after Closing, for no additional consideration and at
no additional cost to the requesting party, such further assignments,
certificates, instruments, records, or other documents, assurances or
things as may be reasonably necessary to give full effect to this
Agreement and to allow each party fully to enjoy and exercise the rights
accorded and acquired by it under this Agreement.
11.11 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
11.12 Entire Agreement. This Agreement (including the Exhibits, the Company
Schedules, the MEDSTRETCH Schedules and any other documents, instruments
and certificates referred to herein, which are incorporated in and
constitute a part of this Agreement) contains the entire agreement of the
Parties. Without limiting the generality of the foregoing, this Agreement
is intended to supersede the Letter of Intent dated June 28, 2004.
11.13 Expenses. Each party will be responsible for payment of its expenses,
including legal and accounting fees, in connection with the transactions
contemplated by this Agreement.
11.14 Survival of Representations and Covenants. Notwithstanding any right of
any Party fully to investigate the affairs of the Company or MEDSTRETCH,
as the case may be, and notwithstanding any knowledge of facts determined
or determinable by any Party pursuant to such investigation or right of
investigation, each Party shall have the right to rely fully upon the
representations, warranties, covenants and agreements of other Parties
contained in this Agreement. Each representation, warranty, covenant and
agreement of the Parties contained herein shall survive the execution and
delivery of this Agreement and the Closing and shall thereafter terminate
and expire on the second anniversary of the Closing Date unless, prior to
such date, a Party has delivered to the other Parties a written notice of
a claim with respect to such representation, warranty, covenant or
agreement.
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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of
the day and year first above written.
PRIDE BUSINESS DEVELOPMENT GROUP, a Nevada corporation
By: /s/ Xxx Xxxxxx
--------------------------
President
MEDSTRETCH, INC. a Nevada corporation
By: /s/ Xx. Xxxxxxxx Xxxxxxxxx
--------------------------
President
Sellers (Name and signature)
/s/ Xxx Xxxxxx
---------------------------------
/s/ Xxxxxxxx Xxxxxx
---------------------------------
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EXHIBIT 2.1(a)
List of Company Shareholders, with Company Share Holdings and Number of
MEDSTRETCH Shares to be received.
EXHIBIT 11.1
List of MEDSTRETCH Shareholders whose shares are to be cancelled and returned to
the status of authorized but unissued shares of common stock.
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