EXHIBIT 10.17
SECTION 368(a)(1)(B) REORGANIZATION AGREEMENT
THIS SECTION 368(a)(1)(B) REORGANIZATION AGREEMENT made as of
this 8th day of June, 2002 (to be effective 12:01 a.m. July 1,
2002) by and among:
CAVALCADE OF SPORTS MEDIA, INC., a Nevada corporation with
its principal office located at 12268 Via Latina, Del Mar
California 92914 (hereinafter referred to as the "COMPANY")
AND
RICHARD LEVINSON, the founder and sole stockholder of
ChangeBridge Television, Inc., a Nevada corporation with its
primary office at 40 Barkmill Terrace, Montville, New Jersey 07045
(hereinafter referred to as "STOCKHOLDER")
WITNESSETH THAT:
WHEREAS, STOCKHOLDER has organized ChangeBridge Television,
Inc. for the purpose of engaging in the television industry,
including the creation and production of television programming;
WHEREAS, immediately following its incorporation,
ChangeBridge Television, Inc. acquired, by contribution under
Section 351 of the Internal Revenue Code, all of the assets of
ChangeBridge Entertainment Television Limited Liability Company
and has succeeded to the business plan of that entity including
all pending negotiations;
WHEREAS, COMPANY is willing to acquire ChangeBridge
Television, Inc. in a so-called "B" Reorganization (tax-free,
stock-for-stock exchange), whereby ChangeBridge Television, Inc.
will become a subsidiary of COMPANY, and STOCKHOLDER is agreeable
to such acquisition;
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained hereinbelow, intending to be legally bound,
the parties have agreed as follows:
I
THE REORGANIZATION
1. "B" REORGANIZATION. (a) STOCKHOLDER and COMPANY hereby agree
to have COMPANY acquire all of the issued and outstanding capital
stock of ChangeBridge Television, Inc. in exchange solely for The
ChangeBridge Acquisition Series of the COMPANY's Preferred Stock
in
1
a tax-free stock-for-stock exchange pursuant to Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
(b) The stock-for-stock B Reorganization as set forth in
Paragraph 2 following shall be effected as of 12:01 A.M. on July
1, 2002.
(c) STOCKHOLDER represents and warrants that he is taking, and
will hold, such shares for investment. STOCKHOLDER acknowledges,
agrees and represents that:
(i) He has been advised that none of the shares of the
COMPANY's ChangeBridge Acquisition Series ("Shares") being
acquired hereunder have been registered under the Securities Act
of 1933(the "1933 Act").
(ii) All of the Shares of COMPANY being acquired hereunder
are being, and will be, acquired and held for investment, not for
resale or distribution to the public and not for the purpose of
effecting or causing to be effected a public offering of such
securities and, further, that none of such Shares will be sold,
transferred, assigned or disposed of except to, or in trust for
the benefit of, members of the STOCKHOLDER's immediate family or
his personal representatives, devisees, and legatees, or in
accordance with the 1933 Act and the Rules and Regulations of the
Securities and Exchange Commission promulgated thereunder.
(iii) He has been advised and is aware of the fact, that by
reason of the foregoing investment representations and
restrictions upon transfer: (A) the Shares must be held
indefinitely unless they are subsequently registered under the
1933 Act or an exemption from such registration is available; (B)
if Rule 144 of the Rules and Regulations promulgated by the SEC is
applicable to any future routine sales of any such securities,
such sales can be made only in limited amounts in accordance with
the terms and conditions of that Rule; (C) in the case of
securities to which that Rule is not applicable, compliance with
some applicable disclosure exemption, if any be available, will be
required; (D) all of the certificates for the Shares issued to him
will bear a legend restricting transfer thereof; and (E) the
Transfer Agent of the Company's Common Stock will be given
"stop-transfer" instructions so as to prevent any illegal transfer
of such Shares.
(d) He has relied only and exclusively upon his own investigation
into COMPANY and its financial condition for purposes of deciding
to enter into and close this Agreement and to accept the Shares in
exchange for shares of ChangeBridge Television, Inc.. He has not
relied upon any oral or written representation made by COMPANY or
any of its officers or directors or representatives of COMPANY and
no representation or statements shall survive the Closing with the
sole exception of the representations and warranties contained in
this Agreement.
2
2. EXCHANGE OF SHARES. COMPANY and the STOCKHOLDER agree that at
Closing, which shall be immediately after execution of this
Agreement by all parties, all of the issued and outstanding shares
of capital stock of ChangeBridge Television, Inc., consisting
solely of 1,000 shares of its Common Stock shall be exchanged with
COMPANY for 100,000 shares of the ChangeBridge Acquisition Series
of the COMPANY's Preferred Stock to be immediately issued to
STOCKHOLDER. The Shares shall be issued in certificates of such
denominations, amounts, and names as may be requested by the
STOCKHOLDER. Time is of the essence.
II
MISCELLANEOUS
1. GOVERNMENTAL REGULATIONS. This Agreement is subject to the
terms of all applicable federal, state, and municipal laws,
regulations, and decisions, whether existing or enacted hereafter,
including the regulations and actions of all governmental
administrative agencies and commissions having jurisdiction.
2. ASSIGNMENT AND DELEGATION. Neither party may assign any
rights or delegate any duties hereunder without the express prior
written consent of the other.
3. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter
hereof and supersedes all prior negotiations and understandings
which are deemed to have been merged herein. No representations
were made or relied upon by either party, other than those
expressly set forth herein.
4. MODIFICATION. This writing contains the entire agreement of
the parties and shall be amended only by a further writing. No
agent, employee, or other representative of any party is empowered
to alter any of the terms hereof, including specifically this
Paragraph 4, unless done in writing and signed by appropriate
corporate officers or by the individuals to be charged.
5. CONSTRUCTION. Whenever required by the context hereof: the
masculine gender shall be deemed to include the feminine and
neuter; and the singular member shall be deemed to include the
plural. Time is expressly declared to be of the essence of this
Agreement. This Agreement shall be deemed to have been mutually
prepared by all parties and shall not be construed against any
particular party as the draftsman. The invalidity of any one or
more of the words, phrases, sentences, clauses, sections or
subsections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any
part hereof, all of which are inserted conditionally on their
being valid in law, and, in the event that any one or more of the
words, phrases, sentences, clauses, sections or
3
subsections contained in this Agreement shall be declared invalid
by a court of competent jurisdiction, this Agreement shall be
construed as if such invalid word or words, phrase or phrases,
sentence or sentences, clause or clauses, section or sections, or
subsection or subsections had not been inserted.
6. CONTROLLING LAW. The validity, interpretation, and
performance of this Agreement shall be controlled by and construed
under the laws of the State of Nevada. Venue and jurisdiction of
any controversy or claim arising out of, or relating to this
Agreement, or the breach thereof, that cannot be resolved by
negotiation, shall be in New York, New York. In any legal action
or other proceeding involving, arising out of or in any way
relating to this Agreement, the prevailing party shall be entitled
to recover reasonable attorneys' fees, costs, and expenses of
litigation.
7. WAIVER. The failure of any party to object to, or to take
affirmative action with respect to, any conduct of any other party
which is in violation of the terms of this Agreement shall not be
construed as a waiver of such violation or breach, or of any
future breach, violation, or wrongful conduct. No delay or
failure by any party to exercise any right under this Agreement,
and no partial or single exercise of that right, shall constitute
a waiver or exhaustion of that or any other right, unless
otherwise expressly provided herein.
8. NOTICES. All notices or other communications to be sent as
provided for by this Agreement shall be in writing and shall be
sent by certified mail, return receipt requested, postage prepaid,
to the persons and addresses set forth at the beginning of this
Agreement, or such other persons and/or addresses as may hereafter
be designated in writing by the parties.
9. HEADINGS. Headings in this Agreement are for convenience only
and shall not be used to interpret or construe its provisions.
10. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
11. BINDING EFFECT. The provisions of this Agreement shall be
binding upon and inure to the benefit of each of the parties and
their respective successors and assigns.
4
12. EFFECTIVE DATE. This Agreement shall be deemed to become
effective at 12:01 A.M. on July 1, 2002.
IN WITNESS WHEREOF, intending to be legally bound, the parties
have executed this Agreement the day and year first above written:
WITNESS: STOCKHOLDER:
______________________________ ________________________________
Richard Levinson
Signatures, continued
CAVALCADE OF SPORTS MEDIA, INC.
ATTEST:
By:____________________________
Edward Litwak
_______________________________
Secretary
5