Exhibit 10.1
 
 

 
WARRANT
       
NO. VH-001
VOLCAN HOLDINGS, INC.
[_____] Shares
     

WARRANT TO PURCHASE COMMON STOCK
 
VOID AFTER 5:30 P.M., EASTERN
TIME, ON THE EXPIRATION DATE
 
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND
MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT
COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE
FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.
 
FOR VALUE RECEIVED, VOLCAN HOLDINGS, INC., a Delaware corporation (the
“Company”), hereby agrees to sell upon the terms and on the conditions
hereinafter set forth, but no later than 5:30 p.m., Eastern Time, on the
Expiration Date (as hereinafter defined) to [______________] or registered
assigns (the “Holder”), under the terms as hereinafter set forth,
[______________] ([______]) fully paid and non-assessable shares of the
Company’s Common Stock, par value $0.001 per share (the “Warrant Stock”), at a
purchase price of one dollar ($1.00) per share (the “Warrant Price”), pursuant
to this warrant (this “Warrant”).   The number of shares of Warrant Stock to be
so issued and the Warrant Price are subject to adjustment in certain events as
hereinafter set forth.  The term “Common Stock” shall mean, when used herein,
unless the context otherwise requires, the stock and other securities and
property at the time receivable upon the exercise of this Warrant.
 
       1.       Exercise of Warrant.
 
a.   Time of Exercise. The purchase rights represented by this Warrant may be
exercised in whole or in part from time to time prior to 5:30 p.m., Eastern
Time, on [______________]  (the “Expiration Date”).
 
b.   Method of Exercise. The Holder hereof may exercise this Warrant, in whole
or in part, by the surrender of this Warrant at the address set forth in the
Notice of Exercise attached hereto having then been duly executed by the Holder,
and by the payment to the Company of an amount of consideration therefor equal
to the purchase price in effect on the date of such exercise multiplied by the
number of shares of Warrant Stock with respect to which this Warrant is then
being exercised, payable at such Holder’s election (i) by certified or official
bank check or by wire transfer to an account designated by the Company, (ii) by
“cashless exercise” in accordance with the provisions of subsection (c) of this
Section 1, or (iii) by a combination of the foregoing methods of payment
selected by the Holder of this Warrant.
 
 

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c.   Cashless Exercise. Notwithstanding any provisions herein to the contrary
and commencing upon the earlier of six (6) months following the date of issuance
of this Warrant and the date the Warrant Stock becomes eligible for resale
pursuant to Rule 144 under the Act, if (i) the Per Share Market Value of one
share of Common Stock is greater than the Warrant Price (at the date of
calculation as set forth below) and (ii) a registration statement under the Act
providing for the resale of the Warrant Stock is not then in effect or not
effective at any time, in lieu of exercising this Warrant by payment of cash,
the Holder may exercise this Warrant by a cashless exercise and shall receive
the number of shares of Common Stock equal to an amount (as determined below) by
surrender of this Warrant at the address set forth in the Notice of Exercise
attached hereto together with the properly endorsed Notice of Exercise in which
event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:
 

 
X=
[f10q1209ex10_volcan.gif]
     
Where
X=
the number of shares of Common Stock to be issued to the Holder.
       
Y=
the number of shares of Common Stock purchasable upon exercise of all of the
Warrant or, if only a portion of the Warrant is being exercised, the portion of
the Warrant being exercised.
       
A=
the Warrant Price.
       
B=
the Per Share Market Value of one share of Common Stock on the business day
immediately preceding the date of such election.

“Independent Appraiser” means a nationally recognized or major regional
investment banking firm or firm of independent certified public accountants of
recognized standing (which may be the firm that regularly examines the financial
statements of the Company) that is regularly engaged in the business of
appraising the capital stock or assets of corporations or other entities as
going concerns, and which is not affiliated with either the Company or the
Holder of any Warrant.
 
 “Per Share Market Value” means on any particular date (a) the closing bid price
per share of the Common Stock on such date on any registered national stock
exchange on which the Common Stock is then listed, or if there is no such price
on such date, then the closing bid price on such exchange or quotation system on
the date nearest preceding such date, or (b) if the Common Stock is not listed
then a registered national stock exchange, the closing bid price for a share of
Common Stock in the over-the-counter market, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated (or similar organization
or agency succeeding to its functions of reporting prices) at the close of
business on such date, or (c) if the Common Stock is not then reported by the
OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of reporting prices), then
the average of the “Pink Sheet” quotes for the five business days preceding such
date of determination, or (d) if the Common Stock is not then publicly traded
the fair market value of a share of Common Stock as determined by an Independent
Appraiser selected in good faith by the Company; and provided, further, that all
determinations of the Per Share Market Value shall be appropriately adjusted for
any stock dividends, stock splits or other similar transactions during such
period. The determination of fair market value by an Independent Appraiser shall
be based upon the fair market value of the Company determined on a going concern
basis as between a willing buyer and a willing seller and taking into account
all relevant factors determinative of value, and shall be final and binding on
all parties. In determining the fair market value of any shares of Common Stock,
no consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to the
existence or absence of, or any limitations on, voting rights.
 
 
 

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d.   No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. The Company shall pay cash in lieu of
fractions with respect to the Warrants based upon the fair market value of such
fractional shares of Common Stock (which shall be the closing price of such
shares on the exchange or market on which the Common Stock is then traded) at
the time of exercise of this Warrant.
 
e.   In the event of any exercise of the rights represented by this Warrant, a
certificate or certificates for the Warrant Stock so purchased, registered in
the name of the Holder, shall be delivered to the Holder within a reasonable
time after such rights shall have been so exercised. The person or entity in
whose name any certificate for the Warrant Stock is issued upon exercise of the
rights represented by this Warrant shall for all purposes be deemed to have
become the holder of record of such shares immediately prior to the close of
business on the date on which the Warrant was surrendered and payment of the
Warrant Price and any applicable taxes was made, irrespective of the date of
delivery of such certificate, except that, if the date of such surrender and
payment is a date when the stock transfer books of the Company are closed, such
person shall be deemed to have become the holder of such shares at the opening
of business on the next succeeding date on which the stock transfer books are
open. The Company shall pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of shares of Common
Stock on exercise of this Warrant.
 
       2.       Disposition of Warrant Stock and Warrant.
 
a.   The Holder hereby acknowledges that this Warrant and any Warrant Stock
purchased pursuant hereto are, as of the date hereof, not registered: (i) under
the Act on the ground that the issuance of this Warrant is exempt from
registration under Section 4(2) of the Act as not involving any public offering
or (ii) under any applicable state securities law because the issuance of this
Warrant does not involve any public offering; and that the Company’s reliance on
the Section 4(2) exemption of the Act and under applicable state securities laws
is predicated in part on the representations hereby made to the Company by the
Holder that it is acquiring this Warrant and will acquire the Warrant Stock for
investment for its own account, with no present intention of dividing its
participation with others or reselling or otherwise distributing the same,
subject, nevertheless, to any requirement of law that the disposition of its
property shall at all times be within its control.
 
The Holder hereby agrees that it will not sell or transfer all or any part of
this Warrant and/or Warrant Stock unless and until it shall first have given
notice to the Company describing such sale or transfer and furnished to the
Company either (i) an opinion, reasonably satisfactory to counsel for the
Company, of counsel (skilled in securities matters, selected by the Holder and
reasonably satisfactory to the Company) to the effect that the proposed sale or
transfer may be made without registration under the Act and without registration
or qualification under any state law, or (ii) an interpretative letter from the
Securities and Exchange Commission to the effect that no enforcement action will
be recommended if the proposed sale or transfer is made without registration
under the Act.
 
 

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b.   If, at the time of issuance of the shares issuable upon exercise of this
Warrant, no registration statement is in effect with respect to such shares
under applicable provisions of the Act, the Company may at its election require
that the Holder provide the Company with written reconfirmation of the Holder’s
investment intent and that any stock certificate delivered to the Holder of a
surrendered Warrant shall bear legends reading substantially as follows:
 
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF
THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”
 
In addition, so long as the foregoing legend may remain on any stock certificate
delivered to the Holder, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby on
its books and records and with those to whom it may delegate registrar and
transfer functions.
 
       3.       Reservation of Shares.  The Company hereby agrees that at all
times there shall be reserved for issuance upon the exercise of this Warrant
such number of shares of its Common Stock as shall be required for issuance upon
exercise of this Warrant.  The Company further agrees that all shares which may
be issued upon the exercise of the rights represented by this Warrant will be
duly authorized and will, upon issuance and against payment of the exercise
price, be validly issued, fully paid and non-assessable, free from all taxes,
liens, charges and preemptive rights with respect to the issuance thereof, other
than taxes, if any, in respect of any transfer occurring contemporaneously with
such issuance and other than transfer restrictions imposed by federal and state
securities laws.
 
       4.       Exchange, Transfer or Assignment of Warrant.  This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its stock transfer
agent, if any, for other Warrants of different denominations, entitling the
Holder or Holders thereof to purchase in the aggregate the same number of shares
of Common Stock purchasable hereunder.  Upon surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and deliver a new
Warrant in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants that carry the same rights upon presentation hereof at the
office of the Company or at the office of its stock transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder hereof.
 
 

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       5.       Capital Adjustments.  This Warrant is subject to the following
further provisions:
 
a.   Recapitalization, Reclassification and Succession.  If any recapitalization
of the Company or reclassification of its Common Stock or any merger or
consolidation of the Company into or with a corporation or other business
entity, or the sale or transfer of all or substantially all of the Company’s
assets or of any successor corporation’s assets to any other corporation or
business entity (any such corporation or other business entity being included
within the meaning of the term “successor corporation”) shall be effected, at
any time while this Warrant remains outstanding and unexpired, then, as a
condition of such recapitalization, reclassification, merger, consolidation,
sale or transfer, lawful and adequate provision shall be made whereby the Holder
of this Warrant thereafter shall have the right to receive upon the exercise
hereof as provided in Section 1 and in lieu of the shares of Common Stock
immediately theretofore issuable upon the exercise of this Warrant, such shares
of capital stock, securities or other property as may be issued or payable with
respect to or in exchange for a number of outstanding shares of Common Stock
equal to the number of shares of Common Stock immediately theretofore issuable
upon the exercise of this Warrant had such recapitalization, reclassification,
merger, consolidation, sale or transfer not taken place, and in each such case,
the terms of this Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this Warrant after such
consummation.
 
b.   Subdivision or Combination of Shares.  If the Company at any time while
this Warrant remains outstanding and unexpired shall subdivide or combine its
Common Stock, the number of shares of Warrant Stock purchasable upon exercise of
this Warrant and the Warrant Price shall be proportionately adjusted.
 
c.   Stock Dividends and Distributions.  If the Company at any time while this
Warrant is outstanding and unexpired shall issue or pay the holders of its
Common Stock, or take a record of the holders of its Common Stock for the
purpose of entitling them to receive, a dividend payable in, or other
distribution of, Common Stock, then (i) the Warrant Price shall be adjusted in
accordance with Section 5(d) and (ii) the number of shares of Warrant Stock
purchasable upon exercise of this Warrant shall be adjusted to the number of
shares of Common Stock that the Holder would have owned immediately following
such action had this Warrant been exercised immediately prior thereto.
 
d.   Warrant Price Adjustment.  Except as otherwise provided herein, whenever
the number of shares of Warrant Stock purchasable upon exercise of this Warrant
is adjusted, as herein provided, the Warrant Price payable upon the exercise of
this Warrant shall be adjusted to that price determined by multiplying the
Warrant Price immediately prior to such adjustment by a fraction (i) the
numerator of which shall be the number of shares of Warrant Stock purchasable
upon exercise of this Warrant immediately prior to such adjustment, and (ii) the
denominator of which shall be the number of shares of Warrant Stock purchasable
upon exercise of this Warrant immediately thereafter.
 
 

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e.   Certain Shares Excluded.  The number of shares of Common Stock outstanding
at any given time for purposes of the adjustments set forth in this Section 5
shall exclude any shares then directly or indirectly held in the treasury of the
Company.
 
f.   Deferral and Cumulation of De Minimis Adjustments.  The Company shall not
be required to make any adjustment pursuant to this Section 5 if the amount of
such adjustment would be less than one percent (1%) of the Warrant Price in
effect immediately before the event that would otherwise have given rise to such
adjustment.  In such case, however, any adjustment that would otherwise have
been required to be made shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to not less than one percent (1%) of the Warrant
Price in effect immediately before the event giving rise to such next subsequent
adjustment.
 
g.   Duration of Adjustment.  Following each computation or readjustment as
provided in this Section 5, the new adjusted Warrant Price and number of shares
of Warrant Stock purchasable upon exercise of this Warrant shall remain in
effect until a further computation or readjustment thereof is required.
 
       6.       Limitation on Exercises.  The Company shall not effect the
exercise of this Warrant, and the Holder shall not have the right to exercise
this Warrant, to the extent that after giving effect to such exercise, the
Holder (together with such Holder’s affiliates) would beneficially own in excess
of 4.99% of the shares of Common Stock outstanding immediately after giving
effect to such exercise.  For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by such Holder and its
affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (A) exercise of the remaining, unexercised portion of this Warrant
beneficially owned by such Holder and its affiliates and (B) exercise or
conversion of the unexercised or unconverted portion of any other securities of
the Company beneficially owned by such person and its affiliates (including,
without limitation, any convertible notes or convertible preferred stock or
warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein.  Except as set forth in the preceding sentence, for
purposes of this paragraph, beneficial ownership shall be calculated in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended.  To the extent that the limitation contained in this Section 6 applies,
the determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any affiliate) and of which portion
of this Warrant is exercisable shall be in the sole discretion of the Holder,
and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder together with any affiliate) and of which portion
of this Warrant is exercisable, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation to verify or
confirm the accuracy of the determination.  For purposes of this Warrant, in
determining the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as reflected in (1) the
Company's most recent Form 10-K, Form 10-KSB, Form 10-Q, Form 10-QSB, Current
Report on Form 8-K or other public filing with the Securities and Exchange
Commission, as the case may be, (2) a more recent public announcement by the
Company or (3) any other notice by the Company setting forth the number of
shares of Common Stock outstanding.  For any reason at any time, upon the
written or oral request of the Holder, the Company shall within one (1) business
day confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding.  In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder and its
affiliates since the date as of which such number of outstanding shares of
Common Stock was reported.  The restriction described in this Section 6 may be
waived, in whole or in part, upon sixty-one (61) days prior notice from the
Holder to the Company to increase such percentage up to 9.99%, but not in excess
of 9.99%.  The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 6
to correct this paragraph (or any portion hereof) which may be defective or
inconsistent with the intended beneficial ownership limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect
to such limitation.
 
 

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       7.       Redemption. This Warrant may be redeemed prior to the Expiration
Date, at the option of the Company, at a price of $0.001 per share of Warrant
Stock (“Redemption Price”), upon not less than 10 days prior written notice to
the Holder notifying the Holder of the Company’s intent to exercise such right
and setting forth a time and date for such redemption; provided, however, that
no redemption under this Section 7 may occur unless the Company’s Common Stock
has had a closing sales price greater than $3.00 per share, as adjusted for any
stock splits, stock combinations, stock dividends and other similar events, for
thirty (30) consecutive trading days. This Warrant may be exercised by Holder at
any time after notice of redemption has been given by the Company and prior to
the time and date fixed for redemption. On and after the redemption date, the
Holder shall have no further rights except to receive, upon surrender of this
Warrant, the Redemption Price.
 
       8.       Notice to Holders.
 
a.   Notice of Record Date.  In case:
 
(i)   the Company shall take a record of the holders of its Common Stock (or
other stock or securities at the time receivable upon the exercise of this
Warrant) for the purpose of entitling them to receive any dividend (other than a
cash dividend payable out of earned surplus of the Company) or other
distribution, or any right to subscribe for or purchase any shares of stock of
any class or any other securities, or to receive any other right;
 
(ii)   of any capital reorganization of the Company, any reclassification of the
capital stock of the Company, any consolidation with or merger of the Company
into another corporation, or any conveyance of all or substantially all of the
assets of the Company to another corporation; or
 
(iii)   of any voluntary dissolution, liquidation or winding-up of the Company;
 
then, and in each such case, the Company will mail or cause to be mailed to the
Holder hereof at the time outstanding a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up is to take place, and the time, if any, is to be fixed, as of which
the holders of record of Common Stock (or such stock or securities at the time
receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution or winding-up.  Such notice shall
be mailed at least thirty (30) days prior to the record date therein specified,
or if no record date shall have been specified therein, at least thirty (30)
days prior to such specified date, provided, however, failure to provide any
such notice shall not affect the validity of such transaction.
 
 

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b.   Certificate of Adjustment. Whenever any adjustment shall be made pursuant
to Section 5 hereof, the Company shall promptly make a certificate signed by its
Chairman, Chief Executive Officer, President, Vice President, Chief Financial
Officer or Treasurer, setting forth in reasonable detail the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated and the Warrant Price and number of shares of Warrant Stock
purchasable upon exercise of this Warrant after giving effect to such
adjustment, and shall promptly cause copies of such certificates to be mailed
(by first class mail, postage prepaid) to the Holder of this Warrant.

       9.     Loss, Theft, Destruction or Mutilation.  Upon receipt by the
Company of evidence satisfactory to it, in the exercise of its reasonable
discretion, of the ownership and the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to the Company and, in the case of mutilation, upon
surrender and cancellation thereof, the Company will execute and deliver in lieu
thereof, without expense to the Holder, a new Warrant of like tenor dated the
date hereof.
 
       10.   Warrant Holder Not a Stockholder.  The Holder of this Warrant, as
such, shall not be entitled by reason of this Warrant to any rights whatsoever
as a stockholder of the Company.
 
       11.   Notices.  Any notice required or contemplated by this Warrant shall
be deemed to have been duly given if transmitted by registered or certified
mail, return receipt requested, or nationally recognized overnight delivery
service, to the Company at its principal executive offices located at Level 34,
50 Bridge Street, Sydney, New South Wales 2000, Australia, Attention: Chief
Executive Officer, or to the Holder at the name and address set forth in the
Warrant Register maintained by the Company.
 
       12.   Choice of Law.  THIS WARRANT IS ISSUED UNDER AND SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
 
       13.   Jurisdiction and Venue.  The Company and Holder hereby agree that
any dispute which may arise between them arising out of or in connection with
this Warrant shall be adjudicated before a court located in New York County, New
York and they hereby submit to the exclusive jurisdiction of the federal and
state courts of the State of York located in New York County with respect to any
action or legal proceeding commenced by any party, and irrevocably waive any
objection they now or hereafter may have respecting the venue of any such action
or proceeding brought in such a court or respecting the fact that such court is
an inconvenient forum, relating to or arising out of this Warrant or any acts or
omissions relating to the sale of the securities hereunder, and consent to the
service of process in any such action or legal proceeding by means of registered
or certified mail, return receipt requested, in care of the address set forth
herein or such other address as either party shall furnish in writing to the
other.
 
 

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IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its
behalf, in its corporate name and by its duly authorized officers, as of this
[_____] day of [_________________].
 
 
VOLCAN HOLDINGS, INC.
 
By:_______________________________
       Name:
       Title:
 
 
 
 
 
 

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NOTICE OF EXERCISE
 
TO:
Volcan Holdings, Inc.

 
Level 34

 
50 Bridge Street

 
Sydney, New South Wales 2000

 
Australia

 
Attn: President

 
Tel: +61-2-8216-0777

 
The undersigned, pursuant to the provisions of the foregoing  Warrant, hereby
elects to purchase _______________ shares of common stock of Volcan Holdings,
Inc. (the “Company”) covered by the Warrant.
 

  Name of Investing Entity:   __________________________________________       
  Address of Investing Entity:  __________________________________________      
Signature of Authorized Signatory of Investing:
__________________________________________      
Entity:   __________________________________________          Name and Title of
Authorized Signatory:  __________________________________________      
Date:  __________________________________________

 
Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of exercise: ___________________________
 
The undersigned is an “accredited investor” as defined in Regulation D under the
Securities Act of 1933, as amended.
 
The undersigned intends that payment of the Warrant Price shall be made as
(check one):
 
Cash Exercise                      o
 
Cashless Exercise               o
 
If the Holder has elected a Cash Exercise, the Holder shall pay the sum of
$______________ by certified or official bank check (or via wire transfer) to
the Company in accordance with the terms of the Warrant.
 
If the Holder has elected a Cashless Exercise, a certificate shall be issued to
the Holder for the number of shares equal to the whole number portion of the
product of the calculation set forth below, which is _______________. The
Company shall pay a cash adjustment in respect of the fractional portion of the
product of the calculation set forth below in an amount equal to the product of
the fractional portion of such product and the Per Share Market Value on the
date of exercise, which product is _____________ .
 

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X=  [f10q1209ex10_volcan.gif]

       
Where:
 
The number of shares of Common Stock to be issued to the Holder
_________________  (“X”).
 
The number of shares of Common Stock purchasable upon exercise of all of the
Warrant or, if only a portion of the Warrant is being exercised, the portion of
the Warrant being exercised _______________________ (“Y”).
 
The Warrant Price ___________________ (“A”).
 
The Per Share Market Value of one share of Common Stock ______________________
(“B”).
 

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ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
 
     FOR VALUE RECEIVED, all of or   shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to
 
                                                                       whose
address is

  Dated:           
 
Holder’s
Name: __________________________________________                                                    
 
Holder’s
Signature:   __________________________________________                                                                                                                                       
 
Name and Title of
Signatory:  __________________________________________                                                                                                                                        
 
Holder’s
Address:  __________________________________________                                                                                                                                        
 
Signature
Guaranteed:  __________________________________________                                                                                                                                        
 
NOTE:  The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.