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SHARE EXCHANGE AGREEMENT

Between and Among

TYLERSTONE VENTURES CORPORATION,

NCOAT, INC.,

and

CERTAIN NCOAT, INC. SHAREHOLDERS

Dated as of February 3, 2007

 
 

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SHARE EXCHANGE AGREEMENT
 
THIS SHARE EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement") is
entered into as of this 3rd day of February, 2007, by and between TYLERSTONE
VENTURES CORPORATION, a Delaware corporation (hereinafter referred to as
“Tylerstone”), with offices at 7237 Pace Drive, Whitsett, NC 27377; nCOAT, INC.,
a Delaware corporation (hereinafter referred to as "nCoat"), with offices at
7237 Pace Drive, Whitsett, NC 27377 and each of the voting shareholders of nCoat
listed below on Exhibit A (the “Accepting Shareholders”).

RECITALS
 
WHEREAS, Tylerstone is a publicly held corporation organized under the laws of
the State of Delaware with no significant operations;
 
WHEREAS, nCoat is a privately held corporation organized under the laws of
Delaware;
 
WHEREAS, Tylerstone agrees to acquire up to 100% of the issued and outstanding
securities of nCoat in exchange for the issuance of certain shares of Tylerstone
common stock to the nCoat shareholders (the "Exchange") and the shareholders of
nCoat (the "nCoat Shareholders") agree to exchange their shares of nCoat on the
terms described herein; and

WHEREAS, a material inducement to nCoat and the nCoat Shareholders to enter into
and proceed with the transactions described in this Agreement is the covenant
set forth below that Tylerstone will complete a financing of between $7,500,000
and $12,500,000 in connection with the closing of the transactions described in
this Agreement.
 
AGREEMENT
 
NOW THEREFORE, based on the foregoing recitals and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived here from, and intending to be legally
bound hereby, it is hereby agreed as follows:
 

ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF nCOAT
 
As an inducement to, and to obtain the reliance of Tylerstone, except as set
forth in the nCoat Schedules (as hereinafter defined), nCoat represents and
warrants as of the date hereof and as of the Closing Date, as defined below, as
follows:
 
Section 1.01  Organization; Authorization.  nCoat is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and has the corporate power and is duly authorized under all applicable
laws, regulations, ordinances, and orders of public authorities to carry on its
business in all material respects as it is now being conducted. Included in the
nCoat Schedules are complete and correct copies of the certificate of
incorporation, and bylaws of nCoat as in effect on the date hereof. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of nCoat’s
certificate of incorporation or bylaws. nCoat has taken all actions required by
law, its certificate of incorporation, or otherwise to authorize the execution
and delivery of this Agreement. nCoat has full power, authority, and legal right
and has taken all action required by law, its certificate of incorporation, and
otherwise to consummate the transactions herein contemplated.
 

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Section 1.02  Capitalization. The authorized capitalization of nCoat consists of
Fifteen Million (15,000,000) shares of common stock, par value of $0.0001 per
share. There are Eleven Million Five Hundred Fifty-Four Thousand Five Hundred
Forty-Five (11,554,545) shares of common stock currently issued and outstanding.
The issued and outstanding shares are legally issued, fully paid, and
non-assessable and not issued in violation of the preemptive or other rights of
any person. A portion of the shares that have been issued to employees of nCoat,
Inc. and others are subject to restrictions (“Restricted Shares”). A small
portion of the Restricted Shares have restrictions only under rule 144 of the
U.S. Securities and Exchange Commission, however the majority of these shares
have more restrictions, including some or all of the following: vesting
schedules requiring the individual employee to whom the stock may be issued to
continue his or her employment for a period of time previously determined by the
management of nCoat; restrictions on relocating by the employee to such nCoat
office location or locations as shall be required by the management of nCoat;
restrictions on objective performance levels expected of the employee;
restrictions dependent on the possible transactions of the Company in closing a
sale, merger or other combination such as the one contemplated herein, and other
similar restrictions. The Restricted Share Certificates bear a restricted legend
that includes the specific set of restrictions for those shares and in
connection with their issue, if there is a restriction that remains in place,
among other things, the owners of those shares have assigned any and all voting
powers by grant of a power of attorney to the Voting Shareholders to
collectively vote the Restricted Shares’ vote.
 
Section 1.03  Legal Actions. There are no legal actions against nCoat or
directors in their role as directors of nCoat, nor does nCoat know of any
threatened legal actions against it or any of its directors in their role as
directors of nCoat. Additionally, nCoat is not engaged in any legal actions
against other parties, and is current in all filings with tax and regulatory
authorities, non-compliance with which would have a material adverse affect upon
nCoat.

Section 1.04  Status of Business Condition. Until the Closing (as defined
below), nCoat’s business and financial condition shall remain materially
unchanged from the time of any due diligence or financial statement
documentation provided to Tylerstone prior to Closing.

Section 1.05 Ownership of Intellectual Property. nCoat owns 100% of the
beneficial right, title and interest in and to all of its intellectual property
and other assets (the “Assets”) as set forth in the Disclosure Schedules subject
to any liens, charges, securitizations, UCC filings or debts disclosed in the
Disclosure Schedules or financial statements of nCoat provided to Tylerstone
prior to Closing.

Section 1.06 Use of Proceeds. nCoat intends to use any Bridge Loan or Additional
Financing (as those terms are defined below) funds substantially in the manner
disclosed in the Disclosure Schedules entitled “Use of Proceeds.” 

ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF TYLERSTONE
 
As an inducement to, and to obtain the reliance of nCoat and the nCoat
Shareholders, except as set forth in the Tylerstone Schedules (as hereinafter
defined), Tylerstone represents and warrants, as of the date hereof and as of
the Closing Date, as follows:

Section 2.01  Organization; Authorization. Tylerstone is a public corporation
incorporated in the State of Delaware, it is in good standing with all agencies,
has filed all reports required to be filed by it under applicable securities
laws and the rules and regulations of with the United States Securities and
Exchange Commission (the “SEC”) and the common stock shares are listed but not
presently trading on the OTC Bulletin Board under the symbol “TYLV.” Included in
the Tylerstone Schedules are complete and correct copies of the certificate of
incorporation, and bylaws of Tylerstone as in effect on the date hereof. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of Tylerstone’s
certificate of incorporation or bylaws. Tylerstone has taken all actions
required by law, its certificate of incorporation, or otherwise to authorize the
execution and delivery of this Agreement.

Section 2.02 Legal Proceedings. There are no legal actions against Tylerstone or
its directors, officers, or shareholders, and Tylerstone knows of no threatened
legal actions against Tylerstone, its directors, officers, or shareholders, nor
is Tylerstone engaged in any legal actions against other parties.

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Section 2.03 Business and Financial Condition. The business and financial
condition of Tylerstone are as set forth in its filings with the SEC, on the
EDGAR database, and Tylerstone is current in its filings as of the date hereof.

Section 2.04 No Mergers Contemplated. There are no outstanding mergers,
acquisitions, financial commitments, obligations, liabilities, etc., other than
those contemplated in this transaction.

Section 2.05  Capitalization. As of the date of this Agreement, Tylerstone's
authorized capitalization consists of (a) 25,000,000 shares of common stock, par
value $0.001 per share (“Tylerstone Common Stock”), of which 2,610,000 shares
are issued and outstanding. All issued and outstanding shares are legally
issued, fully paid, and non-assessable and not issued in violation of the
preemptive or other rights of any person. Tylerstone will deliver to nCoat at
Closing a complete and accurate list of shareholders
 
ARTICLE III
PLAN OF EXCHANGE
 
Section 3.01  The Exchange.

(a)  Exchange by nCoat Shareholders. On the terms and subject to the conditions
set forth in this Agreement, the voting nCoat Shareholders who have elected to
accept the exchange offer described herein (the "Accepting nCoat Shareholders")
by executing this Agreement, shall assign, transfer and deliver, free and clear
of all liens, pledges, encumbrances, charges, restrictions or known claims of
any kind, nature, or description, the number of shares of common stock of nCoat
(the “nCoat Tendered Shares”) set forth on Schedule A attached hereto,
constituting the voting shares of common stock, of nCoat held by such Accepting
nCoat Shareholder. In addition, and again on the terms and subject to the
conditions set forth in this Agreement, the Accepting nCoat Shareholders who
hold the powers of attorney for all of the remaining outstanding Restricted
Shares of nCoat accept, as attorneys-in-fact, the exchange offer for those
shares and by executing this Agreement, shall assign, transfer and deliver, free
and clear of all liens, pledges, encumbrances, charges, or known claims of any
kind, nature, or description, the balance of all of the remaining Restricted
Shares of common stock of nCoat (the “Restricted nCoat Tendered Shares”); the
objective of such exchange (the “Exchange”) being the acquisition by Tylerstone
of not less than 100% of the issued and outstanding common stock of nCoat.

(b)  In exchange for the transfer of such securities by the Accepting nCoat
Shareholders, Tylerstone shall issue to the Accepting nCoat Shareholders an
aggregate of 1,870,000 pre-split shares, or 37,400,000 post-split shares for the
Accepting nCoat Shareholder’s stock (assuming the effectiveness of the forward
split approved by the board of directors of Tylerstone on January 25, 2006 (the
“Required Stock Split”)) (the “Tylerstone New Shares”), for the nCoat Tendered
Shares. In addition, Tylerstone shall issue, with similar restrictions, vesting
schedules and other terms as those surrendered, 672,000 pre-split shares or
13,440,000 post-split shares for the Restricted Shares to the remaining
shareholders of nCoat (the “Tylerstone New Restricted Shares”) for the shares of
Restricted nCoat Common Stock.

(c)  In consideration for the Closing of the Exchange (the “Closing”), certain
Tylerstone shareholders will tender an aggregate of 750,000 pre-split shares of
Tylerstone common stock (the “Tylerstone Tendered Shares”) to Tylerstone for
Cancellation.
 
(d)  The tender of the Tylerstone Tendered Shares, the issuance of the
Tylerstone New Shares and Tylerstone New Restricted Shares, and the tender of
the nCoat Tendered Shares and Restricted nCoat Tendered Shares shall occur at
Closing.

(e)  It is the intention of the parties that immediately following the Closing,
on the date of the Closing (the “Closing Date”):

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(i) There will be an aggregate of 4,402,000 pre-split shares or 88,040,000
post-split shares of Tylerstone Common Stock issued and outstanding;

(ii) Of those 4,402,000 pre-split shares or 88,040,000 post-split shares, the
Accepting nCoat Shareholders will hold an aggregate of 1,870,000 pre-split
shares or 37,200,000 post-split shares of Tylerstone Common Stock, the remaining
Tylerstone shareholders will hold an aggregate of 1,860,000 pre-split shares or
37,200,000 post-split shares of Tylerstone Common Stock, and the remaining
672,000 pre-split shares or 13,440,000 post split shares of Tylerstone Common
Stock shall be held as Tylerstone New Restricted Shares surrendered by the
remaining nCoat shareholders .

(f)   At the Closing, on surrender by the nCoat shareholders of their
certificate or certificates representing the nCoat Tendered Shares and
Restricted nCoat Tendered Shares to Tylerstone or its registrar or transfer
agent, each nCoat Shareholders shall receive a certificate or certificates
evidencing his or her proportionate interest in the Tylerstone New Shares and
Tylerstone New Restricted Shares, respectively.

(g)  It is not the intention of the Parties to create a new class of Tylerstone
Common Stock in connection with the restrictive nature of a portion of the stock
issued, only to denote that some of the issued stock bears restrictions and
vesting schedules.

Section 3.02  Anti-Dilution. The number of shares of Tylerstone Common Stock
issuable upon the Exchange pursuant to Section 3.01 shall be appropriately
adjusted to take into account any stock split, stock dividend, reverse stock
split, recapitalization, or similar change in the Tylerstone Common Stock which
may occur, other than the Required Stock Split, between the date of the
execution of this Agreement and the Closing Date.
 
Section 3.03  Closing Events. At the Closing, Tylerstone, the Tylerstone
shareholders, nCoat, the Accepting Shareholders and the holders of the
Restricted nCoat Tendered Shares shall execute, acknowledge, and deliver (or
shall ensure to be executed, acknowledged, and delivered), any and all
certificates, opinions, financial statements, schedules, agreements,
resolutions, rulings or other instruments required by this Agreement to be so
delivered at or prior to the Closing, as applicable, together with such other
items as may be reasonably requested by the parties hereto and their respective
legal counsel in order to effectuate or evidence the transactions contemplated
hereby.
 
Section 3.04  Deadline. The Parties agree that the Closing shall occur on or
before February 15, 2007, unless otherwise agreed by the Parties.

Section 3.05 Termination. This Agreement may be terminated by the Board of
Directors of nCoat or Tylerstone only in the event that Tylerstone or nCoat do
not meet the conditions precedent set forth in Articles V and VI. If this
Agreement is terminated pursuant this section, this Agreement shall be of no
further force or effect, and no obligation, right or liability shall arise
hereunder.

Section 3.06 Additional Termination Right. In addition to those rights set forth
above in Section 3.05, in the event that within the later of April 30, 2007 or
thirty (30) days of active public market trading days of Tylerstone after
Closing. Tylerstone has not secured an additional Five Million Five Hundred
Thousand Dollars ($5,500,000) in funding (the “Additional Funding”) on terms as
set forth in Sections 6.03 and 6.05 below, nCoat and the Accepting nCoat
Shareholders shall be entitled, in their exclusive discretion, to either:

(a)  Terminate this Agreement, return for cancellation the New Tylerstone Shares
and Tylerstone New Restricted Shares to Tylerstone and receive back from
Tylerstone the nCoat Tendered Shares and Restricted nCoat Tendered Shares; or

(b)  Forego any right of termination under this Section 3.06 in exchange for the
issuance by Tylerstone to the Accepting nCoat Shareholders of additional shares
of restricted common stock (the “New Additional Shares”). The aggregate number
of New Additional Shares to be issued to the Accepting nCoat Shareholders shall
be determined by dividing the difference between $5,500,000 and the actual
aggregate amount of the Additional Funding by .25
 

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ARTICLE IV
SPECIAL COVENANTS
 
Section 4.01  Access to Properties and Records. Tylerstone and nCoat will each
afford to the officers and authorized representatives of the other full access
to the properties, books and records of Tylerstone or nCoat, as the case may be,
in order that each may have a full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other, and each
will furnish the other with such additional financial and operating data and
other information as to the business and properties of Tylerstone or nCoat, as
the case may be, as the other shall from time to time reasonably request.
Without limiting the foregoing, as soon as practicable after the end of each
fiscal quarter (and in any event through the last fiscal quarter prior to the
Final Closing Date), each party shall provide the other with quarterly
internally prepared and unaudited financial statements.
 
Section 4.02  Delivery of Books and Records. At the Closing, nCoat shall deliver
to Tylerstone the originals of the corporate minute books, books of account,
contracts, records, and all other books or documents of nCoat now in the
possession of nCoat or its representatives. Tylerstone shall deliver to nCoat
the originals of the corporate minute books, books of account, contracts,
records, and all other books or documents of Tylerstone now in the possession of
Tylerstone or its representatives.

Section 4.03  Third Party Consents and Certificates. Tylerstone and nCoat agree
to cooperate with each other in order to obtain any required third party
consents to this Agreement and the transactions herein contemplated.
 
Section 4.04  Tylerstone Shareholder Approval. Tylerstone shall promptly contact
its shareholders and ask that a majority of the shareholders of Tylerstone
approve, and Tylerstone's Board of Directors shall recommend approval of, the
terms of this Agreement and such other matters as shall be required under
Delaware State law for approval hereunder. In addition, Tylerstone shall
continue to promptly file with the SEC necessary disclosure statements required
by federal securities law.
 
Section 4.05  Forward Stock Split. Prior to the Closing, Tylerstone shall
effectuate the Required Stock Split. Tylerstone shall take all necessary steps
to amend its Certificate of Incorporation to reflect the Required Stock Split.

Section 4.06 Increase in Authorized Capital. Prior to Closing, Tylerstone shall
effectuate an amendment to its Certificate of Incorporation to increase its
authorized capital from 25,000,000 shares of common stock to 500,000,000 shares
of common stock. Tylerstone shall take all necessary steps to amend its
Certificate of Incorporation to reflect the increase in authorized capital.

Section 4.07 Name Change. Prior to Closing, Tylerstone shall effectuate an
amendment to its Certificate of Incorporation to change its name to nCoat, Inc.
Tylerstone shall take all necessary steps to amend its Certificate of
Incorporation to reflect the name change.

Section 4.08 Additional Actions Prior to Closing.
 
(a)  From and after the date of this Agreement until the Closing and except as
set forth in the Tylerstone Schedules or nCoat Schedules or as permitted or
contemplated by this Agreement, Tylerstone (subject to paragraph (iv) below) and
nCoat, respectively, will each:
 
(i)  carry on its business in substantially the same manner as it has
heretofore;
 

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(ii)  maintain and keep its properties in states of good repair and condition as
at present, except for depreciation due to ordinary wear and tear and damage due
to casualty;
 
(iii)  maintain in full force and effect insurance comparable in amount and in
scope of coverage to that now maintained by it;
 
(iv)  perform in all material respects all of its obligations under material
contracts, leases, and instruments relating to or affecting its assets,
properties, and business;
 
(v)  use commercially reasonable care, diligence and skill to maintain and
preserve its business organization intact, to retain its key employees, and to
maintain its relationship with its material suppliers and customers; and
 
(vi)  fully comply with and perform in all material respects all obligations and
duties imposed on it by all federal and state laws and all rules, regulations,
and orders imposed by federal or state governmental authorities.
 
(b)  From and after the date of this Agreement until the Closing, neither
Tylerstone nor nCoat will:
 
(i)  make any changes in their respective certificate of incorporation or bylaws
except as contemplated by this Agreement; 
 
(ii)  enter into or amend any contract, agreement, or other instrument of any of
the types described in such party's schedules, except that a party may enter
into or amend any contract, agreement, or other instrument in the ordinary
course of business involving the sale of goods or services; or
 
(iii)  sell any assets or discontinue any operations, sell any shares of capital
stock or conduct any similar transactions other than in the ordinary course of
business.
 
Section 4.09  Indemnification.
 
(a)  nCoat hereby agrees to indemnify Tylerstone and each of the officers,
agents and directors of Tylerstone as of the date of execution of this Agreement
against any loss, liability, claim, damage, or expense (including, but not
limited to, any and all expense whatsoever reasonably incurred in investigating,
preparing, or defending against any litigation, commenced or threatened, or any
claim whatsoever) (“Loss”), to which it or they may become subject arising out
of or based on any material inaccuracy appearing in or misrepresentations made
under Article I of this Agreement. The indemnification provided for in this
paragraph shall survive the Closing and consummation of the transactions
contemplated hereby and termination of this Agreement for one year following the
Final Closing.
 
(b)  The Accepting nCoat Shareholders agree to indemnify Tylerstone and each of
the officers, agents and directors of Tylerstone as of the date of execution of
this Agreement against any Loss to which it or they may become subject arising
out of or based on any claim which is finally determined by a court of competent
jurisdiction that (i) the Accepting nCoat Shareholder did not have good title to
the nCoat Tendered Shares or (ii) that the nCoat Tendered Shares where subject
to a lien or encumbrance.. The indemnification provided for in this paragraph
shall survive the Closing and consummation of the transactions contemplated
hereby and termination of this Agreement for one year following the Final
Closing.
 

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(c)  Tylerstone hereby agrees to indemnify nCoat and each of the officers,
agents, and directors of nCoat and the nCoat Shareholders as of the date of
execution of this Agreement against any Loss to which it or they may become
subject arising out of or based on any inaccuracy appearing in or
misrepresentation made under Article II of this Agreement. The indemnification
provided for in this paragraph shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this Agreement for one year
following the Final Closing.
 
(d)  Tylerstone hereby agrees to indemnify nCoat and each of the officers,
agents, and directors of nCoat and the nCoat Shareholders as of the date of
execution of this Agreement against any Loss to which it or they may become
subject arising out of or based on any claim from the cancellation of the
Tylerstone Shareholder’s stock as set forth in Section 3.01 (c), including, but
not limited to, any claim by any third party asserting rights, ownership, liens
or otherwise in connection with the stock surrendered and cancelled. The
indemnification provided for in this paragraph shall survive the Closing and
consummation of the transactions contemplated hereby and termination of this
Agreement for one year following the Final Closing.
 
Section 4.10  The Acquisition of Tylerstone Common Stock. Tylerstone and nCoat
understand and agree that the consummation of this Agreement including the
issuance of the Tylerstone New Shares, Tylerstone New Restricted Shares and, if
applicable, the New Additional Shares, to the nCoat Shareholders in the Exchange
for the nCoat Shares as contemplated hereby constitutes the offer and sale of
securities under the Securities Act of 1933, as amended (the “Securities Act”)
and applicable state statutes. Tylerstone and nCoat agree that such transactions
shall be consummated in reliance on exemptions from the registration and
prospectus delivery requirements of such statutes, which depend, among other
items, on the circumstances under which such securities are acquired.
 
(a)  In order to provide documentation for reliance upon the exemptions from the
registration and prospectus delivery requirements for such transactions, each
Accepting nCoat Shareholder and the holders of the Restricted nCoat Tendered
Shares shall execute and deliver to Tylerstone a Suitability Letter and an
Investment Representation Letter in substantially the same form as that attached
hereto as Exhibit SL and Exhibit IRL , respectively.
 
(b)  In connection with the transaction contemplated by this Agreement,
Tylerstone and nCoat shall each file, with the assistance of the other and their
respective legal counsel, such notices, applications, reports, or other
instruments as may be deemed by them to be necessary or appropriate in an effort
to document reliance on such exemptions, and the appropriate regulatory
authority in the states where the shareholders of nCoat reside unless an
exemption requiring no filing is available in such jurisdictions, all to the
extent and in the manner as may be deemed by such parties to be appropriate.
 
(c)  In order to more fully document reliance on the exemptions as provided
herein, nCoat, the Accepting nCoat Shareholders, the holders of the Restricted
nCoat Tendered Shares and Tylerstone shall execute and deliver to the other, at
or prior to the Closing, such further letters of representation, acknowledgment,
suitability, or the like as nCoat or Tylerstone and their respective counsel may
reasonably request in connection with reliance on exemptions from registration
under such securities laws.
 
(d)  The Accepting nCoat Shareholders and the holders of the Restricted nCoat
Tendered Shares acknowledge that the basis for relying on exemptions from
registration or qualifications are factual, depending on the conduct of the
various parties, and that no legal opinion or other assurance will be required
or given to the effect that the transactions contemplated hereby are in fact
exempt from registration or qualification.
 
Section 4.11  Sales of Securities Under Rule 144, If Applicable.
 

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(a)  Tylerstone will use commercially reasonable care, diligence and skill at
all times satisfy the current public information requirements of Rule 144
promulgated under the Securities Act so that its shareholders can sell
restricted securities that have been held for one year or more or such other
restricted period as required by Rule 144 as it is from time to time amended.
 
(b)  Upon being informed in writing by any person holding restricted stock of
Tylerstone that such person intends to sell any shares under rule 144
promulgated under the Securities Act (including any rule adopted in substitution
or replacement thereof), Tylerstone will certify in writing to such person that
it is in compliance with Rule 144 current public information requirement to
enable such person to sell such person's restricted stock under Rule 144, as may
be applicable under the circumstances.
 
(c)  If any certificate representing any such restricted stock is presented to
Tylerstone's transfer agent for registration or transfer in connection with any
sales theretofore made under Rule 144, provided such certificate is duly
endorsed for transfer by the appropriate person(s) or accompanied by a separate
stock power duly executed by the appropriate person(s) in each case with
reasonable assurances that such endorsements are genuine and effective, and is
accompanied by a legal opinion that such transfer has complied with the
requirements of Rule 144, as the case may be, Tylerstone will promptly instruct
its transfer agent to register such transfer and to issue one or more new
certificates representing such shares to the transferee and, if appropriate
under the provisions of Rule 144, as the case may be, free of any stop transfer
order or restrictive legend.
 
(d)  This Section 4.11 shall survive the closing of this Agreement for a period
of two (2) years.

Section 4.12 Financing. Tylerstone shall have secured debt or equity or other
financing in an aggregate amount of between $7,500,000 and $12,500,000, in the
form of debentures which are convertible into common stock of Tylerstone, on
terms equal to or substantially similar to those set forth in Section 6.05
below, of which at least $7,500,000 (including the Bridge Loan and the
Additional Financings described below) will have closed on or before the later
of April 30, 2007 or thirty active public market trading days of Tylerstone
after Closing.

Section 4.13 Registration of Stock. The Parties acknowledge and agree that
Tylerstone New Shares, Tylerstone New Restricted Shares and, if applicable, the
New Additional Shares shall be subject to Rule 144 and subject to Section 4.11
herein. The Parties further acknowledge and agree that Tylerstone has executed,
and may continue to execute, debentures with conversion rights to Tylerstone
Common Stock. Such debentures contain language imposing on Tylerstone the
requirement that the shares represented by the conversion rights be registered
for resale under the Securities Act. After Closing the Parties agree that
registration for resale shall be governed by the debenture language and Rule 144
as required.

ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF TYLERSTONE
 
The obligations of Tylerstone under this Agreement are subject to the
satisfaction, at or before Closing, of the following conditions:
 
Section 5.01  Accuracy of Representations and Performance of Covenants. The
representations and warranties made by nCoat in this Agreement were true when
made and shall be true at Closing with the same force and effect as if such
representations and warranties were made at and as of Closing (except for
changes therein permitted by this Agreement). nCoat shall have performed or
complied with all covenants and conditions required by this Agreement to be
performed or complied with by nCoat prior to or at the Closing. Tylerstone shall
be furnished with a certificate, signed by a duly authorized executive officer
of nCoat and dated the Closing Date, to the foregoing effect.
 

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Section 5.02  Information Provided. Tylerstone shall have been furnished with
that information on the business and affairs of nCoat which it deems, in its
sole and absolute discretion, to be necessary for it to meet its continuous
disclosure obligations under the Securities Exchange Act of 1934 upon Closing.

Section 5.03  No Material Adverse Change. As of the Closing there shall not have
occurred any material adverse change, financially or otherwise, which materially
impairs the ability of nCoat to conduct its business or the earning power
thereof.
 
Section 5.04  Financial Statements. nCoat shall have completed audited pro forma
consolidated financial statements required to be filed upon Final Closing by
Tylerstone as a reporting issuer under the Securities Exchange Act of 1934.

Section 5.05  Opinion of Counsel. Tylerstone shall have received the opinion of
counsel to Tylerstone that the Closing will not result in Tylerstone breaching
any applicable securities law, rules and regulations.

ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF nCOAT
AND THE nCOAT SHAREHOLDER
 
The obligations of nCoat and the Accepting nCoat Shareholders under this
Agreement are subject to the satisfaction, at or before the Closing Date, of the
following conditions:

Section 6.01  Accuracy of Representations and Performance of Covenants. The
representations and warranties made by Tylerstone in this Agreement were true
when made and shall be true as of the Closing Date (except for changes therein
permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date.
Additionally, Tylerstone shall have performed and complied with all covenants
and conditions required by this Agreement to be performed or complied with by
Tylerstone.
 
Section 6.02 Issuance of Shares. Shares of Tylerstone common stock to be issued
by Tylerstone to the Accepting nCoat Shareholders and to the holders of the
Restricted nCoat Tendered Shares at Closing shall have been issued.
 
Section 6.03 Financing. Tylerstone shall have secured debt or equity or other
financing of between $7,500,000 and $12,500,000, in the form of debentures which
are convertible into common stock of Tylerstone, on terms equal to or
substantially similar to those set forth in Section 6.05 below, of which at
least $7,500,000 (including the Bridge Loan and the Additional Financings
described below) will have closed on or before the later of April 30, 2007 or
thirty active market trading days of Tylerstone after Closing.

Section 6.04 Bridge Loan. nCoat and Tylerstone acknowledge that Tylerstone has
provided a loan (the “Bridge Loan”) to nCoat in the aggregate amount of
$2,000,000 prior to the Closing, pursuant to a line of credit which is to be
repaid pursuant to its terms.

Section 6.05 Terms of Bridge Loan. The Bridge Loan has been financed through the
issuance of convertible debentures (the “Debentures”) by Tylerstone to
investors, with the Debentures having the following terms: (i) the Debentures
shall be convertible to shares of post-split common stock of Tylerstone at $0.50
per share, convertible at any time after the effective date of the Stock Split
described above in Section 4.05; (ii) the Debentures shall permit the investors
to require, on or after March 1, 2007, Tylerstone to register the resale, under
the Securities Act, of any shares issued upon conversion of the Debentures;
(iii) the Debentures shall bear interest at a rate of .5 percent above the prime
interest rate as reported by the Wall Street Journal’s bank survey not to exceed
9.5% per annum until converted or paid; and (iv) and the Debentures shall permit
any interest due thereunder to be converted on the same terms as the principal.

9

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Section 6.06 Filing with SEC. The Parties anticipate that within four business
days of executing this Agreement, Tylerstone will file with the SEC on Form 8-K,
a report disclosing the execution and terms of this Agreement. The Parties
further anticipate that within four business days from the date of filing the
amendment to change the Article of Incorporation for Tylerstone, Tylerstone will
file with the SEC an additional Form 8-K report disclosing the changes. Finally,
within four days of the Closing, Tylerstone will file with the SEC a current
report on Form 8-K to provide all the required disclosures relating to the
Closing, the Exchange, financial and other information with respect to nCoat,
and any other required information.

ARTICLE VII
MISCELLANEOUS
 
Section 7.01  Brokers. Tylerstone, the Accepting nCoat Shareholders and nCoat
agree that, except as set out on Schedule 7.01 of the Tylerstone Schedules and
the nCoat Schedules, there were no finders or brokers involved in bringing the
parties together or who were instrumental in the negotiation, execution or
consummation of this Agreement. Tylerstone and nCoat each agree to indemnify the
other against any claim by any third person other than those described above for
any commission, brokerage, or finder's fee arising from the transactions
contemplated hereby based on any alleged agreement or understanding between the
indemnifying party and such third person, whether express or implied from the
actions of the indemnifying party.
 
Section 7.02  Governing Law. This Agreement shall be governed by, enforced, and
construed under and in accordance with the laws of the United States of America
and, with respect to the matters of state law, with the laws of the State of
Delaware. Venue for all matters shall be in Delaware, without giving effect to
principles of conflicts of law thereunder. Each of the parties (a) irrevocably
consents and agrees that any legal or equitable action or proceedings arising
under or in connection with this Agreement shall be brought exclusively in the
federal courts of the United States. By execution and delivery of this
Agreement, each party hereto irrevocably submits to and accepts, with respect to
any such action or proceeding, generally and unconditionally, the jurisdiction
of the aforesaid court, and irrevocably waives any and all rights such party may
now or hereafter have to object to such jurisdiction.
 
Section 7.03  Notices. Any notice or other communications required or permitted
hereunder shall be in writing and shall be sufficiently given if personally
delivered to it or sent by telecopy, overnight courier or registered mail or
certified mail, postage prepaid, addressed as follows:
 
 
 
 If to nCoat, to: 
Paul S Clayson
7237 Pace Road
Whitsett, North Carolina
Tel: (336) 447-2000
Fax: (336) 447-2020
 
 
With copies to:
Jeffrey M. Jones, Esq.
Durham Jones & Pinegar, P.C.
111 East Broadway, Suite 900
Salt Lake City, Utah 84111
Tel: 801-41503000
Fax: 801-415-3500
 
 
 

 
 
10

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If to Tylerstone, to: 
Paul S Clayson
7237 Pace Road
Whitsett, North Carolina
Tel: (336) 447-2000
Fax: (336) 447-2020
 
 
With copies to:
Jeffrey M. Jones, Esq.
Durham Jones & Pinegar, P.C.
111 East Broadway, Suite 900
Salt Lake City, Utah 84111
Tel: 801-41503000
Fax: 801-415-3500
If to an Accepting nCoat Shareholder:
At the address listed next to such Accepting nCoat Shareholder on Exhibit B
hereto.

 
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered, (ii) on
the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.

Section 7.04  Attorney's Fees. In the event that either party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the prevailing party shall be reimbursed by the
losing party for all costs, including reasonable attorney's fees, incurred in
connection therewith and in enforcing or collecting any judgment rendered
therein.
 
Section 7.05  Confidentiality. Each party hereto agrees with the other that,
unless and until the transactions contemplated by this Agreement have been
consummated, it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary thereof
from any representative, officer, director or employee, or from any books or
records or from personal inspection, of such other party, and shall not use such
data or information or disclose the same to others, except (i) to the extent
such data or information is published, is a matter of public knowledge, or is
required by law to be published; or (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. In the event of the termination of this
Agreement, each party shall return to the other party all documents and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
work papers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.
 
Section 7.06  Public Announcements and Filings. Unless required by applicable
law or regulatory authority, none of the parties will issue any report,
statement or press release to the general public, to the trade, to the general
trade or trade press, or to any third party (other than its advisors and
representatives in connection with the transactions contemplated hereby) or file
any document, relating to this Agreement and the transactions contemplated
hereby, except as may be mutually agreed by the parties. Copies of any such
filings, public announcements or disclosures, including any announcements or
disclosures mandated by law or regulatory authorities, shall be delivered to
each party at least one (1) business day prior to the release thereof.
 

11

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Section 7.07  Schedules; Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
 
Section 7.08  Third Party Beneficiaries. This contract is strictly between
Tylerstone, nCoat, and the Accepting nCoat Shareholders, and, except as
specifically provided, no director, officer, stockholder (other than the
Accepting nCoat Shareholders), employee, agent, independent contractor or any
other person or entity shall be deemed to be a third party beneficiary of this
Agreement.
 
Section 7.09  Expenses. Subject to Section 7.04 above, whether or not the
Exchange is consummated, each of Tylerstone and nCoat will bear their own
respective expenses, including legal, accounting and professional fees, incurred
in connection with the Exchange or any of the other transactions contemplated
hereby.
 
Section 7.10  Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter thereof and supersedes all
prior agreements, understandings and negotiations, written or oral, with respect
to such subject matter.
 
Section 7.11  Survival; Termination. The representations, warranties, and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two years.
 
Section 7.12  Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
 
Section 7.13  Amendment or Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law, or in equity, and may be enforced concurrently herewith, and no waiver by
any party of the performance of any obligation by the other shall be construed
as a waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement may
by amended by a writing signed by all parties hereto, with respect to any of the
terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance may be extended by a writing signed by the
party or parties for whose benefit the provision is intended.
 
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

SIGNATURE PAGES FOLLOW.]

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IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to
be executed by their respective officers, hereunto duly authorized, as of the
date first-above written.
 

 
TYLERSTONE VENTURES CORPORATION
         
By: /s/ Terry R. Holmes                                         
 
Name: Terry R. Holmes
 
Title: President
         
NCOAT, INC.
         
By: /s/ Paul S Clayson                                           
 
Name: Paul S Clayson
 
Title: Chairman, CEO
   

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ACCEPTING NCOAT SHAREHOLDERS

The undersigned Shareholders of nCoat hereby agree to participate in the
Exchange on the terms set forth above. Subject to Section 7.11 above, the
undersigned hereby represents and affirms that he has read each of the
representations and warranties of nCoat set out in Article I hereof and that, to
the best of his knowledge, all of such representations and warranties are true
and correct. In addition, as attorneys-in-fact for all of the holders of nCoat
Restricted Shares, we execute the Agreement on their behalf, and agree to
participate in the Exchange on the terms set forth above
 
Name, address and Signature
Number of nCoat
Shares Tendered
       
/s/ Terry R. Holmes                                              
 
Terry R. Holmes, individually,
2,500,000
and as attorney-in-fact for the holders
 
nCoat Restricted Shares
 
7237 Pace Road
 
Whitesett, NC 27377
                 
/s/ Paul S Clayson                                               
 
Paul S Clayson, individually,
2,500,000
and as attorney-in-fact for the holders
 
nCoat Restricted Shares
 
7237 Pace Road
 
Whitesett, NC 27377
                 
/s/ Steve Studdert                                                
 
Steve Studdert, individually,
100,000
and as attorney-in-fact for the holders
 
nCoat Restricted Shares
 
423 Ranch Drive
 
Alpine, UT 84004
             
/s/ Mark Willes                                                    
 
Mark Willes, individually,
3,400,000
and as attorney-in-fact for the holders
 
nCoat Restricted Shares
 
3651 North 100 East
 
Suite 300
 
Provo, Utah 84604
 

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Exhibit SL

SUITABILITY LETTER
(TO BE COMPLETED BY EACH ACCEPTING NCOAT SHAREHOLDER)

TO: Tylerstone Ventures Corporation
 
I make the following representations with the intent that they may be relied on
by Tylerstone Ventures Corporation (the "Company"), in determining my
suitability as a purchaser of securities of the Company (the "Shares").
 
2.  I have had the opportunity to ask questions of, and receive answers and
information, from the officers of the Company and I deemed such information
sufficient to make an investment decision on the Company.
 
3.  I have such knowledge and experience in business and financial matters that
I am capable of evaluating the Company, its business activities, and the risks
and merits of this prospective investment, and I am not utilizing a purchaser
representative (as defined in regulation D) in connection with the evaluation of
such risks and merits, except as set forth in paragraph 3.
 
4.  I shall provide a separate written statement from each purchaser
representative on the Purchaser Representative Acknowledgment form available
from the Company in which is disclosed (i) the relationship of the purchaser
representative with the Company, if any, which has existed at any time during
the previous two years, and compensation received or to be received as a result
of such relationship, and (ii) the education, experience, and knowledge in
financial and business matters which enables the purchaser representative to
evaluate the relative merits and risks of an investment in the Company.
 
5.  The undersigned and the purchaser representatives listed above, if any,
together have such knowledge and experience in financial and business matters
that they are capable of evaluating the Company and the proposed activities
thereof and the merits and risks of this prospective investment.
 
6.  I have adequate means of providing for my current needs and possible
personal contingencies and have no need in the foreseeable future for liquidity
of an investment in the Company.
 
7.  Instructions: Complete either (a) or (b) below, as applicable:
 
(a)  FOR ACCREDITED INVESTORS. I confirm that I am an "accredited investor" as
defined under rule 501 of regulation D promulgated under the Securities Act of
1933, as amended (the "Securities Act"), as checked below:

(i)  Any bank as defined in section 3(a)(2) of the Securities Act or any savings
and loan association or other institution as defined in section 3(a)(5)(A) of
the Securities Act whether acting in its individual or fiduciary capacity; any
broker or dealer registered pursuant to section 15 of the Securities Exchange
Act of 1934; any insurance company as defined in section 2(13) of the Securities
Act; any investment company registered under the Investment Company Act of 1940
or a business development company as defined in section 2(a)(48) of that Act;
any small business investment company licensed by the U. S. Small Business
Administration under section 301(c) or (d) of the Small Business Investment Act
of 1958; any plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; any employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors;

15

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o Yes o No
 
(ii)  Any private business development company as defined in section 302(a)(22)
of the Investment Advisers Act of 1940;
 
o Yes o No
 
(iii)  Any organization described in section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;
 
o Yes o No
 
(iv)  Any director, executive officer, or general partner of the issuer of the
securities being offered or sold, or any director, executive officer, or general
partner of a general partner of that issuer;
 
o Yes o No
 
(v)  Any natural person whose individual net worth or joint net worth with that
person's spouse, at the time of his or her purchase exceeds $1,000,000;
 
o Yes o No
 
For purposes of category (v), the term "net worth" means the excess of total
assets over total liabilities. In computing net worth for the purposes of
category (v) above, the undersigned's principal residence must be valued either
at (A) cost, including the cost of improvements, net of current encumbrances
upon the property or (B) the appraised value of the property as determined upon
a written appraisal used by an institutional lender making a loan to the
individual secured by the property, including the cost of subsequent
improvements, net of current encumbrances upon the property.
 
(vi)  Any natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;
 
o Yes o No
 
In determining income, the undersigned should add to his or her adjusted gross
income any amounts attributable to tax exempt income received, losses claimed as
a limited partner in any limited partnership, deductions claimed for depletion,
contributions to an IRA or Keogh retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
 
(vii)  Any trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person as described in section 230.506(b)(2)(ii); and
 
o Yes o No
 
(viii)  Any entity in which all of the equity owners are accredited investors.
 
o Yes o No
 
(b)  FOR NONACCREDITED INVESTORS. I am not an accredited investor.
 

16

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The following information is being provided here in lieu of furnishing a
personal financial statement.
 
(i)  My net worth excluding principal residence, furnishings, and automobiles is
at least _____ times the total investment I intend to make in the Company;
 
(ii)  My annual disposable income, after excluding all of my personal and family
living expenses and other cash requirements for current obligations, is such
that the loss of my entire investment in the Company would not materially alter
my standard of living;
 
o Yes o No
 
(iii)  Considering the foregoing and all other relevant factors in my financial
and personal circumstances, I am able to bear the economic risk of an investment
in the Company.
 
o Yes o No
 
7.  I have previously been advised that I would have an opportunity to review
all the pertinent facts concerning the Company, and to obtain any additional
information which I might request, to the extent possible or obtainable, without
unreasonable effort and expense, in order to verify the accuracy of the
information provided me.
 
8.  I have personally communicated or been offered the opportunity to
communicate with executive officers of the Company to discuss the business and
financial affairs of the Company, its products and activities, and its plans for
the future. I acknowledge that if I would like to further avail myself of the
opportunity to ask additional questions of the Company, the Company will make
arrangements for such an opportunity on request.
 
9.  I have been advised that no accountant or attorney engaged by the Company is
acting as my representative, accountant, or attorney.
 
10.  I will hold title to my interest as follows:
 

o
 Community Property
o
Separate Property
 
 
 
 
o
 Joint Tenants, with Right of Survivorship
o
Tenants in Common
 
 
 
 
 
 
o
Other (Single Person, Trust, Etc., Please Indicate.)
 
 
 
 
 
 
 
_________________________________

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11.  I am a bona fide resident of the state of __________. The address below is
my true and correct principal residence.
 
DATED this ____ day of __________, 2007
 

--------------------------------------------------------------------------------

Name (Please Print)
  

--------------------------------------------------------------------------------

Name of Joint Subscriber, If Any
  
  
  
  

--------------------------------------------------------------------------------

Signature
  

--------------------------------------------------------------------------------

Signature
 
 
 
  
  

--------------------------------------------------------------------------------

Street Address
  

--------------------------------------------------------------------------------

Street Address
  
 
 
 
  

--------------------------------------------------------------------------------

City, State, and Zip Code
  

--------------------------------------------------------------------------------

City, State, and Zip Code
 
  

 

18

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Exhibit IRL 
INVESTMENT REPRESENTATION LETTER
(TO BE SIGNED BY EACH ACCEPTING NCOAT SHAREHOLDER)

Tylerstone Ventures Corporation
 
Re: Purchase of shares of Common Stock of Tylerstone Ventures Corporation
 
Gentlemen:
 
In connection with the acquisition by the undersigned of shares of Common Stock
of Tylerstone Ventures Corporation (the “Securities”), the undersigned
represents that the Securities are being acquired without a view to, or for,
resale in connection with any distribution of such Securities or any interest
therein without registration or other compliance under the Securities Act of
1933, as amended (the "Securities Act"), and that the undersigned has no direct
or indirect participation in any such undertaking or in the underwriting of such
an undertaking.
 
The undersigned understands that the Securities have not been registered, but
are being acquired by reason of a specific exemption under the Securities Act as
well as under certain state statutes for transactions by an issuer not involving
any public offering and that any disposition of the subject Securities may,
under certain circumstances, be inconsistent with this exemption and may make
the undersigned an "underwriter" within the meaning of the Securities Act. It is
understood that the definition of an "underwriter" focuses on the concept of
"distribution" and that any subsequent disposition of the subject Securities can
only be effected in transactions which are not considered distributions.
Generally, the term "distribution" is considered synonymous with "public
offering" or any other offer or sale involving general solicitation or general
advertising. Under present law, in determining whether a distribution occurs
when securities are sold into the public market, under certain circumstances one
must consider the availability of public information regarding the issuer, a
holding period for the securities sufficient to assure that the persons desiring
to sell the securities without registration first bear the economic risk of
their investment, and a limitation on the number of securities which the
stockholder is permitted to sell and on the manner of sale, thereby reducing the
potential impact of the sale on the trading markets. These criteria are set
forth specifically in rule 144 promulgated under the Securities Act. After one
year from the date the Securities are fully paid for and the subscription is
accepted by the issuer, all as calculated in accordance with rule 144(d), sales
of the Securities in reliance on rule 144 can only be made in limited amounts in
accordance with the terms and conditions of that rule. After two year from the
date the Securities are fully paid for, as calculated in accordance with rule
144(d), it can generally be sold without meeting these conditions provided the
holder is not (and has not been for the preceding three months) an affiliate of
the issuer.
 
The undersigned acknowledges that the Securities must be held and may not be
sold, transferred, or otherwise disposed of for value unless it is subsequently
registered under the Securities Act or an exemption from such registration is
available; the issuer is under no obligation to register the Securities under
the Securities Act or under section 12 of the Securities Exchange Act of 1934,
as amended, except as may be expressly agreed to by it in writing; if rule 144
is available, and no assurance is given that it will be, initially only routine
sales of such Securities in limited amounts can be made in reliance on rule 144
in accordance with the terms and conditions of that rule; the issuer is under no
obligation to the undersigned to make rule 144 available, except as may be
expressly agreed to by it in writing; in the event rule 144 is not available,
compliance with regulation A or some other exemption may be required before the
undersigned can sell, transfer, or otherwise dispose of such Securities without
registration under the Securities Act; the issuer's registrar and transfer agent
will maintain a stop transfer order against the registration of transfer of the
Securities; and the certificate representing the convertible promissory notes
and warrants composing the Securities will bear a legend in substantially the
following form so restricting the sale of such Securities.
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ARE
"RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE
SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.
 

19

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The issuer may refuse to register transfer of the Securities in the absence of
compliance with rule 144 unless the undersigned furnishes the issuer with a
"no-action" or interpretative letter from the Securities and Exchange Commission
or an opinion of counsel reasonably acceptable to the issuer stating that the
transfer is proper; further, unless such letter or opinion states that the
Securities are free of any restrictions under the Securities Act, the issuer may
refuse to transfer the Securities to any transferee who does not furnish in
writing to the issuer the same representations and agree to the same conditions
with respect to such Securities as are set forth herein. The issuer may also
refuse to transfer the Securities if any circumstances are present reasonably
indicating that the transferee's representations are not accurate.
 
 

 
Very truly yours,
 
 
 
 
Dated: ________________________ 
 
________________________________
(Subscriber)
   
 
 
 
   
________________________________
(Joint Subscriber)
 
 

 

20

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EXHIBIT A

ACCEPTING NCOAT SHAREHOLDERS

Name
Number of Shares of nCoat, Inc., Common Stock to be Tendered
       
Terry R. Holmes
2,500,000
   
Paul S Clayson
2,500,000
   
Steve Studdert
   100,000
   
Mark Willes
3,400,000

21

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nCoat Schedules

Exhibit NS1 - Copy of Articles of Incorporation and Amendments

Exhibit NS2 - Copy of nCoat, Inc. Bylaws

Exhibit NS3 - Copy of Corporate Resolution specifically permitting the Execution
and Delivery of the Share Exchange Agreement

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Tylerstone Schedules

Exhibit TS1 - Copy of Articles of Incorporation and Amendments

Exhibit TS2 - Copy of nCoat, Inc. Bylaws

Exhibit TS3 - Copy of Corporate Resolution specifically permitting the Execution
and Delivery of the Share Exchange Agreement

23

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