1. From the date of execution of this Letter of Intent, the parties shall have
a due diligence period of thirty (30) days as provided in Article V below.
2. The parties shall, within fifteen days following the thirty (30) day due
diligence period, execute a Plan and Agreement of Reorganization under IRC
Section 368 (a) (1) (C) ; the parties agree to complete the negotiation of
the Reorganization of Agreement in good faith, with all deliberate speed,
and to execute the Reorganization Agreement. The Reorganization Agreement
shall contain the usual warranties and representations as determined by our
respective attorneys and as mutually acceptable. F2 shall warrant its legal
title and beneficial ownership of all assets being sold, free of all
adverse claims thereto and free and clear of all liens, encumbrances,
hypothecations and security interests. All shares of Cavalcade Common Stock
being issued to F2's shareholders shall be legally designated and fully
paid and non- assessable.
3. Immediately upon execution of the Reorganization Agreement, the parties
shall enter into an Escrow Agreement, with an independent Escrow Agent to
be mutually selected and compensate, to hold the shares issued by Cavalcade
pending the effectiveness of the SEC Registration Statement.
4. Upon execution of the Escrow Agreement by all parties, Cavalcade will form
a wholly owned Nevada subsidiary, "F2 Acquisition, Inc."
5. Upon execution of the Escrow Agreement by all parties, Cavalcade will issue
the 2,500, 000 chares for the acquisition to the Escrow Agent for future
disposition in accordance with the terms of the Escrow Agreement. For which
purpose F2 shall provide the Escrow Agent with a full and complete,
certified list of its shareholders as of the record date for the
transaction.
6. Contemporaneously, F2 will transfer all of its assets and specific, listed
liabilities to Cavalcade.
7. Cavalcade will immediately thereafter transfer all of the F2 assets to the
Nevada subsidiary and change its name to F2 Entertainment Inc.
8. Cavalcade will retain and pay the specific, listed F2 liabilities.
9. Within thirty (30) days after the execution by all parties of the
definitive reorganization agreement, Cavalcade, subject to F2's full and
timely cooperation, will file a form SB-2 with the Securities and Exchange
Commission to register the shares of Common Stock to be issued in the
acquisition.
10. Upon effectiveness of the Registration Statement, the Escrow Agent shall
distribute the shares of Cavalcade Common Stock, other than the shares
being held for the contingent earn-out plan, for which purpose the Escrow
Agreement shall remain in full force and effect and
11. F2 shall dissolve.
