LETTER OF INTENT
Parties:
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Laburnum
Ventures Inc., a Nevada corporation (“Laburnum”), and AGR Stone &
Tools USA, Inc., a Texas corporation (“AGR”), wish to enter into this
binding letter of intent (the “LOI”) which will provide for the basic
structure of a share exchange and reverse merger between the parties (the
“Share Exchange”).
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It
is the intention of the parties to enter into a long form agreement governing
the Share Exchange by July 31, 2009. If no long form agreement is
entered into, this LOI will govern the Share Exchange until it is terminated and
shall be amended to include the signatures of the shareholders of
AGR.
Structure:
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The parties
shall complete the Share Exchange in accordance with the terms of this LOI
as applicable to the respective companies.
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Consideration:
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Pursuant to
the Share Exchange, each common share of AGR shall be exchanged for one
common share of Laburnum.
All related
party debts owed by Laburnum shall be cancelled upon the closing of the
Share Exchange (the “Share Exchange Closing”).
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Conditions
Precedent:
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Prior to the
Share Exchange Closing:
· AGR will
obtain approval for the Share Exchange from each of its
shareholders.
· Laburnum
shall have no liabilities.
· AGR shall
have provided Laburnum with audited financial statements for the last two
completed fiscal years and an auditor reviewed interim period statements
for a period ending no later than 60 days before the delivery of the
financial statements.
· Both parties
will have conducted due diligence on each other and the results of such
due diligence will be satisfactory to both parties.
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Details:
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Upon the
Share Exchange Closing:
· Laburnum
shall file an application to change its name to AGR International
Inc.
· Xxxxxx Xxxxx
shall resign from all officer positions with Laburnum and:
o G.M. (Rock)
Xxxxxxxxxx shall be appointed as President, CEO and director;
o Xxxx
Xxxxxxxxxx shall be appointed as Vice President, Chief Financial Officer,
Secretary, Treasurer and director;
o M. Xxxx
Xxxxxxxxxx shall be appointed as Vice President and Chief Operations
Officer and director; and
o Xxxxxx Xxxxx
shall remain as a director of the Laburnum.
· Xxxxxx Xxxxx
shall cancel 25,000,000 shares of Laburnum’s common stock currently held
in his name
· AGR shall
become the fully owned subsidiary of Laburnum.
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Termination
Events:
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The LOI and
any Share Exchange agreement entered into on the basis of this LOI will
have provisions for termination, and the rescission of any actions
undertaken in order to fulfill the obligations of this LOI or a subsequent
agreement, upon the occurrence of any one of the following
events:
· By mutual
consent and such consent will not be unreasonably withheld;
or
· By either
party if either party is not satisfied with the results of due diligence
undertaken in good faith.
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Independent
Legal
Advice:
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Each party
acknowledges that it has had the opportunity to obtain its own independent
legal and tax advice with respect to the terms of this LOI prior to
execution of this LOI and further acknowledges that it fully understands
this LOI. AGR and the AGR Shareholders acknowledge that counsel
for Laburnum does not represent the interests of AGR or its
shareholders.
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Representations
and Warranties
Of
Laburnum:
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Laburnum
represents and warrants to AGR that:
1. Laburnum is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Nevada and has the requisite corporate power and
authority to own, lease and to carry on its business as now being
conducted. Laburnum is duly qualified to do business and is in
good standing as a foreign corporation in each of the jurisdictions in
which Laburnum owns property, leases property, does business, or is
otherwise required to do so, where the failure to be so qualified would
have a material adverse effect on the business of Laburnum taken as a
whole.
2. To the best
knowledge of Laburnum, there is no basis for and there is no action, suit,
judgment, claim, demand or proceeding outstanding or pending, or
threatened against or affecting Laburnum or which involves any of the
business, or the properties or assets of Laburnum that, if adversely
resolved or determined, would have a material adverse effect on the
business, operations, assets, properties, prospects, or conditions of
Laburnum taken as a whole (a “Laburnum Material Adverse
Effect”). There is no reasonable basis for any claim or action
that, based upon the likelihood of its being asserted and its success if
asserted, would have such a Laburnum Material Adverse Effect.
3. Laburnum has
all requisite corporate power and authority to execute and deliver this
LOI and any other document contemplated by this LOI (collectively, the
“Laburnum Documents”) to be signed by Laburnum and to perform its
obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of each of the Laburnum
Documents by Laburnum and the consummation by Laburnum of the transactions
contemplated hereby have been duly authorized by its board of directors
and no other corporate or shareholder proceedings on the part of Laburnum
is necessary to authorize such documents or to consummate the transactions
contemplated hereby. This LOI has been, and the other Laburnum
Documents when executed and delivered by Laburnum as contemplated by this
LOI will be, duly executed and delivered by Laburnum and this LOI is, and
the other Laburnum Documents when executed and delivered by Laburnum, as
contemplated hereby will be, valid and binding obligations of Laburnum
enforceable in accordance with their respective terms,
except:
a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other
laws of general application affecting enforcement of creditors’ rights
generally;
b) as limited by
laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies; and
c) as limited by
public policy.
4. The Laburnum
common shares to be issued upon the Share Exchange Closing will, upon
issuance, have been duly and validly authorized and, when so issued in
accordance with the terms of this LOI, will be duly and validly issued,
fully paid and non-assessable.
5. No
representation or warranty by Laburnum in this LOI nor any certificate,
schedule, statement, document or instrument furnished or to be furnished
to AGR pursuant hereto contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact required to
be stated herein or therein or necessary to make any statement herein or
therein not materially misleading.
6. Laburnum has
no more than 60,000,000 shares of common stock outstanding and no
outstanding derivative securities and no issued or outstanding preferred
shares.
7. Compliance
a) To the best
knowledge of Laburnum, Laburnum is in compliance with, is not in default
or violation in any material respect under, and has not been charged with
or received any notice at any time of any material violation of any
statute, law, ordinance, regulation, rule, decree or other applicable
regulation to the business or operations of Laburnum;
b) To the best
knowledge of Laburnum, Laburnum is not subject to any judgment, order or
decree entered in any lawsuit or proceeding applicable to its business and
operations that would constitute a Laburnum Material Adverse
Effect;
c) Laburnum has
duly filed all reports and returns required to be filed by it with
governmental authorities and has obtained all governmental permits and
other governmental consents, except as may be required after the execution
of this LOI. All of such permits and consents are in full force
and effect, and no proceedings for the suspension or cancellation of any
of them, and no investigation relating to any of them, is pending or to
the best knowledge of Laburnum, threatened, and none of them will be
adversely affected by the consummation of the Share Exchange;
and
d) Laburnum has
operated in material compliance with all laws, rules, statutes,
ordinances, orders and regulations applicable to its
business. Laburnum has not received any notice of any violation
thereof, nor is Laburnum aware of any valid basis
therefore.
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Representations
and Warranties of AGR:
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AGR
represents and warrants to Laburnum that:
1.
Each
shareholder of AGR is an accredited investor as that term is defined in
the Securities Act of 1933, as amended.
2.
AGR is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Texas and has the requisite corporate power and
authority to own, lease and to carry on its business as now being
conducted. AGR is duly qualified to do business and is in good
standing as a foreign corporation in each of the jurisdictions in which
AGR owns property, leases property, does business, or is otherwise
required to do so, where the failure to be so qualified would have a
material adverse effect on the business of AGR taken as a
whole.
3. To the best
knowledge of AGR, there is no basis for and there is no action, suit,
judgment, claim, demand or proceeding outstanding or pending, or
threatened against or affecting AGR or which involves any of the business,
or the properties or assets of AGR that, if adversely resolved or
determined, would have a material adverse effect on the business,
operations, assets, properties, prospects, or conditions of AGR taken as a
whole (an “AGR Material Adverse Effect”). There is no
reasonable basis for any claim or action that, based upon the likelihood
of its being asserted and its success if asserted, would have such an AGR
Material Adverse Effect.
4. AGR has all
requisite corporate power and authority to execute and deliver this LOI
and any other document contemplated by this LOI (collectively, the “AGR
Documents”) to be signed by AGR and to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The
execution and delivery of each of the AGR Documents by AGR and the
consummation by AGR of the transactions contemplated hereby have been duly
authorized by its board of directors and no other corporate or shareholder
proceedings on the part of AGR is necessary to authorize such documents or
to consummate the transactions contemplated hereby. This LOI
has been, and the other AGR Documents when executed and delivered by AGR
as contemplated by this LOI will be, duly executed and delivered by AGR
and this LOI is, and the other AGR Documents when executed and delivered
by AGR, as contemplated hereby will be, valid and binding obligations of
AGR enforceable in accordance with their respective terms,
except:
a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other
laws of general application affecting enforcement of creditors’ rights
generally;
b) as limited by
laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies; and
c) as limited by
public policy.
5. GR has no
more than 47,000,000 shares of common stock outstanding and no outstanding
derivative securities or outstanding preferred shares.
6. No
representation or warranty by AGR in this LOI nor any certificate,
schedule, statement, document or instrument furnished or to be furnished
to Laburnum pursuant hereto contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact required
to be stated herein or therein or necessary to make any statement herein
or therein not materially misleading.
7. Neither the
execution, delivery and performance of this LOI, nor the consummation of
the Share Exchange, will conflict with, result in a violation of, cause a
default under (with or without notice, lapse of time or both) or give rise
to a right of termination, amendment, cancellation or acceleration of any
obligation contained in or the loss of any material benefit under, or
result in the creation of any lien, security interest, charge or
encumbrance upon any of the material properties or assets of AGR or any of
its subsidiaries under any term, condition or provision of any loan or
credit agreement, note, debenture, bond, mortgage, indenture, lease or
other agreement, instrument, permit, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to AGR or any of
its subsidiaries, or any of their respective material property or
assets.
8. AGR
acknowledges that any Laburnum securities issued in this Share Exchange
will have such hold periods as are required under applicable securities
laws and as a result may not be sold, transferred or otherwise disposed,
except pursuant to an effective registration statement under the
Securities Act of 1933, or pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act of 1933 and in each case only in accordance with all
applicable securities laws.
9.
Compliance
a) To the best
knowledge of AGR, AGR is in compliance with, is not in default or
violation in any material respect under, and has not been charged with or
received any notice at any time of any material violation of any statute,
law, ordinance, regulation, rule, decree or other applicable regulation to
the business or operations of AGR;
b) To the best
knowledge of AGR, AGR is not subject to any judgment, order or decree
entered in any lawsuit or proceeding applicable to its business and
operations that would constitute a AGR Material Adverse
Effect;
c) AGR has duly
filed all reports and returns required to be filed by it with governmental
authorities and has obtained all governmental permits and other
governmental consents, except as may be required after the execution of
this LOI. All of such permits and consents are in full force
and effect, and no proceedings for the suspension or cancellation of any
of them, and no investigation relating to any of them, is pending or to
the best knowledge of AGR, threatened, and none of them will be adversely
affected by the consummation of the Share Exchange; and
d) AGR has
operated in material compliance with all laws, rules, statutes,
ordinances, orders and regulations applicable to its
business. AGR has not received any notice of any violation
thereof, nor is AGR aware of any valid basis therefore.
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Mutual
Covenants:
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1. The
representations and warranties of both parties set forth in this LOI will
be true, correct and complete in all respects as of the Share Exchange
Closing, as though made on and as of the Share Exchange
Closing.
2. All
information regarding the business of AGR including, without limitation,
financial information that AGR provides to Laburnum during Laburnum’s due
diligence investigation of AGR will be kept in strict confidence by
Laburnum and will not be used (except in connection with due diligence),
dealt with, exploited or commercialized by Laburnum or disclosed to any
third party (other than Laburnum’s professional accounting and legal
advisors) without the prior written consent of AGR. If the
Share Exchange contemplated by this LOI does not proceed for any reason,
then upon receipt of a written request from AGR, Laburnum will immediately
return to AGR (or as directed by AGR) any information received regarding
AGR’s business. Likewise, all information regarding the
business of Laburnum including, without limitation, financial information
that Laburnum provides to AGR during its due diligence investigation of
Laburnum will be kept in strict confidence by AGR and will not be used
(except in connection with due diligence), dealt with, exploited or
commercialized by AGR or disclosed to any third party (other than AGR’s
professional accounting and legal advisors) without Laburnum’s prior
written consent. If the Share Exchange contemplated by this LOI
does not proceed for any reason, then upon receipt of a written request
from Laburnum, AGR will immediately return to Laburnum (or as directed by
Laburnum) any information received regarding Laburnum’s
business.
3. Between the
date of this LOI and the Share Exchange Closing, each of the parties to
this LOI will promptly notify the other parties in writing if it becomes
aware of any fact or condition that causes or constitutes a material
breach of any of its representations and warranties as of the date of this
LOI, if it becomes aware of the occurrence after the date of this LOI of
any fact or condition that would cause or constitute a material breach of
any such representation or warranty had such representation or warranty
been made as of the time of occurrence or discovery of such fact or
condition. During the same period, each party will promptly
notify the other parties of the occurrence of any material breach of any
of its covenants in this LOI or of the occurrence of any event that may
make the satisfaction of such conditions impossible or
unlikely.
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Jurisdiction
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The parties
agree to attorn to the non-exclusive jurisdiction of the Province of
British Columbia regarding this
LOI.
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Accepted on: June
4, 2009
AGR
Stone & Tools USA, Inc.
Per: /s/
G.M. (Rock) Xxxxxxxxxx
X.X. (Rock)
Xxxxxxxxxx, CEO
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Per: /s/
Xxxxxx
Xxxxx
Xxxxxx Xxxxx,
CEO