Document:

Exhibit
10.5

 

 

Restoration
Hardware, Inc.

15 Koch Road, Suite J

Corte Madera, CA  94925

 

Dated
as of August 17, 2004

 

To:                              Those
investors listed on the signature pages of this Letter Agreement (the “Agreement”)

 

Re:                               Amendment of
Certain Rights under Amended and Restated Series A and B Preferred Stock
Purchase Agreement

 

Ladies and Gentlemen:

 

The investors executing the signature pages
hereto (the “Executing Investors”) hold certain rights under that
certain Amended and Restated Series A and B Preferred Stock Purchase Agreement,
dated as of March 21, 2001 (the “Series A Purchase Agreement”), by
and among Restoration Hardware, Inc., a Delaware corporation (the “Company”),
and the investors (the “Investors”) listed on Schedule A
thereto.  The Company understand that
each of the Executing Investors recognizes that it is in the best interests of
both the Company and the Investors under the Series A Purchase Agreement to
amend certain rights that the Investors hold pursuant to the Series A Purchase
Agreement.

 

In accordance with, and pursuant to, the
terms of Section 13.6 of the Series A Purchase Agreement, any terms and
conditions of the Series A Purchase Agreement may be amended with the written
consent of the Company and the holders of two-thirds of the outstanding Series
A preferred stock of the Company.

 

NOW,
THEREFORE, the parties agree as follows:

 

1.                                       Amendment
of Series A Purchase Agreement. 
The Series A Purchase Agreement is hereby amended by deleting each of
Section 6.8, Section 10 and Section 11 of the Series A Purchase
Agreement in its entirety, which such sections shall be of no further force or
effect, and inserting the following in lieu thereof:  “[Reserved.]”

 

2.                                       Effect of
Amendment.  In accordance
with, and pursuant to, Section 13.6 of the Series A Purchase Agreement,
provided that, and upon the date that, the Company and the holders who hold at
least two-thirds of the outstanding Series A preferred stock of the Company
have executed this Agreement, this Agreement shall become effective and all Investors
and other parties to the Series A Purchase Agreement, whether or not they have
executed this Agreement, shall be deemed to have executed this Agreement and to
have become subject to the terms and conditions of this Agreement.

 

3.                                       Miscellaneous.

 

(a)                                  This Agreement is to
be construed in accordance with and governed by the internal laws of the State
of New York without giving effect to any choice of law rule that would cause
the application of the laws of any jurisdiction other than the internal laws of
the State of New York to the rights and duties of the parties.

 

 

(b)                                 The provisions of this
Agreement shall inure to the benefit of, and shall be binding upon, the
successors and assigns of the Company and the other parties hereto or made a
party hereof.

 

(c)                                  Except as may be
otherwise provided herein, all notices, requests, waivers and other
communications made pursuant to this Agreement shall be in writing and shall be
conclusively deemed to have been duly given as follows:  (i) when hand delivered to the other party;
(ii) when received when sent by facsimile at the address and number set forth
below; (iii) when received after deposit in the U.S. mail with first class or
certified mail receipt requested postage prepaid and addressed to the other
party as set forth below; or (iv) when received after deposit with a national
overnight delivery service, postage prepaid, addressed to the parties as set
forth below with next-business-day delivery guaranteed, provided that
the sending party receives a confirmation of delivery from the delivery service
provider.

 

To the Company:

 

Restoration Hardware, Inc.

15 Koch Road, Suite J

Corte Madera, CA 
94925

Attn:  Patricia A. McKay

Fax Number:  (415) 945-4679

 

With a copy to:

 

Morrison & Foerster LLP

425 Market Street

San Francisco, CA 94105

Attn:  Gavin B. Grover, Esq.

Fax Number:  415-268-7522

 

2

 

To the Executing Investors:

 

Palladin Capital Group, Inc.

Palladin Capital Partners, LP

MS2 Partners, LLC

Mark J. Schwartz

1 Rockefeller Plaza, 10th Floor

New York, NY 
10020

Attn:  Mark J. Schwartz

Fax Number:  (212) 218-6802

 

With a copy to:

 

Gibson, Dunn & Crutcher LLP

333 South Grand Avenue

Los Angeles, CA 90071

Attn:  Kenneth M. Doran, Esq.

Fax Number:  (213) 229-6537

 

Reservoir Capital Partners, L.P.

Reservoir Capital Master Fund, L.P.

c/o Reservoir Capital Group, Inc.

650 Madison Avenue, 26th Floor

New York, NY 
10022

Attn:  Celia A. Felsher and Daniel H.
Stern

Fax Number:  (212) 610-9020

 

With a copy to:

 

Milbank, Tweed, Hadley & McCloy LLP

1 Chase Manhattan Plaza

New York, NY 10005

Attn:  Mark L. Weissler, Esq.

Fax Number:  (212) 530-5219

 

Glenhill Capital LP

Glenhill Capital Overseas Partners Ltd.

Glenn J. Krevlin

c/o GJK Capital Management, LLC

650 Madison Avenue, 26th Floor

New York, NY  10022

Fax Number:  (212) 610-9051

 

3

 

Gary G. Friedman

Kendal Agins Friedman

118 Paradise Drive

Tiburon, CA  94920

Fax Number:  (415) 789-5361

 

Isaac M. Silvera

c/o Palladin Capital Group, Inc.

1 Rockefeller Plaza, 10th Floor

New York, NY 
10020

Attn:  Mark J. Schwartz

Fax Number:  (212) 218-6802

 

Each person making a communication hereunder
by facsimile shall promptly confirm by telephone to the person to whom such
communication was addressed each communication made by it by facsimile pursuant
hereto but the absence of such confirmation shall not affect the validity of
any such communication.  A party may
change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 3(c), by giving the other parties
written notice of the new address in the manner set forth above.

 

(e)                                  This Agreement may be
amended only with the written consent of the Company and the holders of
two-thirds of the then outstanding Series A preferred stock of the Company.

 

(f)                                    If one or more
provisions of this Agreement are held to be unenforceable under applicable law,
then such provision(s) shall be excluded from this Agreement and the balance of
this Agreement shall be interpreted as if such provision(s) were so excluded
and shall be enforceable in accordance with its terms.

 

(g)                                 This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument.

 

(h)                                 Each of the parties
hereto agrees (i) to execute and deliver to each other such other documents and
(ii) to do such other acts, all as the other parties hereto may reasonably
request for the purpose of carrying out this Agreement.

 

(i)                                     The captions to
sections of this Agreement have been inserted for identification and reference
purposes only and shall not be used to construe or interpret this Agreement.

 

 

[Remainder of page left blank.]

 

4

 

If the foregoing is acceptable, please
acknowledge your acceptance by countersigning below.

 

	
   

  	
  RESTORATION HARDWARE, INC.,
  a

  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Patricia McKay

  	
   

  
	
   

  	
  Name:

  	
   Patricia McKay

  	
   

  
	
   

  	
  Title:

  	
      EVP, CFO

  	
   

  
								

 

 

	
   

  	
  AGREED AND ACCEPTED:

  
	
   

  	
   

  
	
   

  	
  PALLADIN CAPITAL GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/
  Mark J. Schwartz

  	
   

  
	
   

  	
   

  	
  Name:  Mark J. Schwartz

  
	
   

  	
   

  	
  Title:  President and Chief Executive Officer

  

 

	
   

  	
  PALLADIN CAPITAL PARTNERS, LP

  
	
   

  	
   

  
	
   

  	
  By:  Palladin Investments, LLC, its General
  Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
         /s/
  Mark J. Schwartz

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Mark J. Schwartz

  
	
   

  	
   

  	
   

  	
  Title:  Managing Member

  

 

	
   

  	
  MS2 PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Mark J. Schwartz

  	
   

  
	
   

  	
   

  	
  Name:  Mark J. Schwartz

  
	
   

  	
   

  	
  Title:  Managing Member

  

 

	
   

  	
  MARK J. SCHWARTZ

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Mark J.
  Schwartz

  	
   

  
	
   

  	
  Name:  Mark J. Schwartz

  

 

5

 

	
   

  	
  RESERVOIR CAPITAL PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:  Reservoir Capital Group, L.L.C., its
  General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
        /s/
  Daniel H. Stern

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Daniel H. Stern

  
	
   

  	
   

  	
   

  	
  Title:  Chairman

  

 

	
   

  	
  RESERVOIR CAPITAL MASTER FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By:  Reservoir Capital Group, L.L.C., its
  General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
            /s/
  Daniel H. Stern

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Daniel H. Stern

  
	
   

  	
   

  	
   

  	
  Title:  Chairman

  

 

6

 

	
   

  	
  GLENHILL CAPITAL LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  GJK Capital
  Management, LLC, its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Krevlin
  Advisors, LLC, its Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
       /s/
  Glenn J. Krevlin

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:  Glenn J. Krevlin

  
	
   

  	
   

  	
   

  	
   

  	
  Title:  Managing Member

  

 

 

	
   

  	
  GLENHILL CAPITAL OVERSEAS PARTNERS LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
               /s/
  Glenn J. Krevlin

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:  Glenn J. Krevlin

  
	
   

  	
   

  	
   

  	
   

  	
  Title:  Director

  

 

	
   

  	
  GLENN J. KREVLIN

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Glenn J. Krevlin

  	
   

  
	
   

  	
  Name:  Glenn J. Krevlin

  

 

7

 

	
   

  	
  GARY G. FRIEDMAN

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Gary G. Friedman

  	
   

  
	
   

  	
  Name:  Gary G. Friedman

  

 

	
   

  	
  KENDAL AGINS FRIEDMAN

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Kendal Agins Friedman

  	
   

  
	
   

  	
  Name:  Kendal Agins Friedman

  

 

8

 

	
   

  	
  ISAAC M. SILVERA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Isaac M. Silvera

  	
   

  
	
   

  	
  Name:  Isaac M. Silvera

  

 

9EXHIBIT 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

                                      -1-
<PAGE>

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.

                                      -2-
<PAGE>

      "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.

                                      -3-
<PAGE>

      "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.

                                      -4-
<PAGE>

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.

                                      -5-
<PAGE>

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 Smith & 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

                                      -6-
<PAGE>

     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.

                                      -7-
<PAGE>

     (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).

                                      -8-
<PAGE>

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.

                                      -9-
<PAGE>

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 Mr. Barker 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 Graubard
     Miller, 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.

                                      -10-
<PAGE>

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:

                                      -11-
<PAGE>

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,

                                      -12-
<PAGE>

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.

                                      -13-
<PAGE>

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 Dr. Partridge 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

                                      -14-
<PAGE>

      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 Dr. Partridge of the
     intellectual property and other assets of MEDSTRETCH relating to the
     muscular-skeletal product plans.

                                      -15-
<PAGE>

          (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,

                                      -16-
<PAGE>

      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

                                      -17-
<PAGE>

      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.

                                      -18-
<PAGE>

                                    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

                                      -19-
<PAGE>

      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.
Dr. Kimberly Partridge
157 Adelaide Street West, Suite 600
Toronto, Ontario M5H 4E7
CANADA

With a copy to:

Andrew D. Hudders, Esq.
Graubard Miller
600 Third Avenue - 32nd Floor
New York, New York 10016

If to the Company and the Sellers to:

Pride Business Development Group
Ari L. Markow
15760 Ventura Boulevard, Suite 1020
Encino, California 91436

      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.

                                      -20-
<PAGE>

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.

                                      -21-
<PAGE>

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/ Ari Markow
       --------------------------
       President

MEDSTRETCH, INC. a Nevada corporation

By:    /s/  Dr. Kimberly Partridge
       --------------------------
       President

Sellers (Name and signature)

      /s/ Ari Markow
      ---------------------------------

      /s/ Francine Markow
      ---------------------------------

                                      -22-
<PAGE>

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.

                                      -23-

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