Document:

Volcan Holdings, Inc.: Exhibit 10.11 - Prepared by TNT Filings Inc.

  

  
    THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE
      OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
      AS AMENDED. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
      THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
      IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT
      UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF
      COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
      NOT REQUIRED. 

  

VOLCAN HOLDINGS, INC. 

No. 1 

COMMON STOCK PURCHASE WARRANT 

                     
1.      Issuance. In consideration of good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by VOLCAN HOLDINGS, INC., a Delaware corporation (the “Company”),
L’HAYYIM PTY LTD or its registered assigns (the “Holder”) is hereby
granted, subject to Section 2.1(a) below, the right to purchase at any time, on
or after the date hereof (the “Issue Date”) until 5:00 P.M., New York City time,
on the date which is the five-year anniversary of an applicable Milestone
Achievement Date (as defined below) occurs (the “Expiration Date”), up to an
aggregate of One Hundred Million (100,000,000) fully paid and nonassessable
shares (the “Warrant Shares”) of the Company’s common stock, $0.001 par value
per share (the “Common Stock”), at an initial exercise price per share of $1.00
per share (the “Exercise Price”), subject to further adjustment as set forth
herein. 

                     
2.       Exercise of Warrants. 

                                
2.1      General. (a) This Warrant becomes
exercisable in five equal tranches of up to 20,000,000 shares of Common Stock
each, upon satisfaction of the applicable milestones set forth on Annex A
hereto. The date that any such milestone is achieved to the satisfaction of the
Company is referred to herein as a “Milestone Achievement Date.” To the extent
exercisable, such exercise shall be effectuated by submitting to the Company (as
set forth in Section 11 hereof) a completed and duly executed Notice of Exercise
(substantially in the form attached to this Warrant Certificate). The date such
Notice of Exercise is delivered to the Company shall be the “Exercise Date,”
provided that, if such exercise represents the full exercise of the outstanding
balance of the Warrant, the Holder of this Warrant shall tender this Warrant
Certificate to the Company within five (5) Trading Days (as defined below)
thereafter. The term “Trading Day” means any day during which the Principal
Market shall be open for business. The Notice of Exercise shall be executed by
the Holder of this Warrant and shall indicate (i) the number of shares then
being purchased pursuant to such exercise and (ii) if applicable (as provided
below), whether the exercise is a cashless exercise.

                                
(b)      The provisions of this Section 2.1(b) shall
only be applicable if, and only if, at any time which is two years after the
Issue Date, for any reason on the Exercise Date, there is no effective
registration statement naming the Holder as selling stockholder or no current
prospectus available pursuant to which the Holder would be entitled to sell the
Warrant Shares on such date. If such conditions exist, then this Warrant may
also be exercised at such time by means of a “cashless exercise”. If the Notice
of Exercise form elects a “cashless” exercise, the Holder shall thereby be
entitled to receive a number of shares of Common Stock equal to (w) the excess
of the Current Market Value (as defined below) over the total cash exercise
price of the portion of the Warrant then being exercised, divided by (x) the
Market Price of the Common Stock. For the purposes of this Warrant, the terms
(x) “Current Market Value” shall mean an amount equal to the Market Price of the
Common Stock, multiplied by the number of shares of Common Stock specified in
the applicable Notice of Exercise, (y) “Market Price of the Common Stock” shall
mean the average Closing Price of the Common Stock for the three (3) Trading
Days ending on the Trading Day immediately prior to the Exercise Date, and (z)
“Closing Price” means the 4:02 P.M. closing bid price of the Common Stock on the
Principal Market on the relevant Trading Day(s), as reported by Bloomberg LP (or
if that service is not then reporting the relevant information regarding the
Common Stock, a comparable reporting service of national reputation selected by
the Holder and reasonably acceptable to the Company) for the relevant date.

                                
(c)      If the Notice of Exercise form elects a “cash”
exercise (or if the cashless exercise referred to in the immediately preceding
paragraph (b) is not available in accordance with its terms), the Exercise Price
per share of Common Stock for the shares then being exercised shall be payable,
at the election of the Holder, in cash or by certified or official bank check or
by wire transfer in accordance with instructions provided by the Company at the
request of the Holder. 

                                
(d)      Upon the appropriate payment, if any, of the
Exercise Price for the shares of Common Stock purchased, together with the
surrender of this Warrant Certificate (if required), the Holder shall be
entitled to receive a certificate or certificates for the shares of Common Stock
so purchased. The Company shall deliver such certificates representing the
Warrant Shares in accordance with the instructions of the Holder as provided in
the Notice of Exercise (the certificates delivered in such manner, the “Warrant
Share Certificates”) within five (5) Trading Days (such fifth Trading Day, a
“Delivery Date”) of (i) with respect to a “cashless exercise,” the Exercise Date
or, (ii) with respect to a “cash” exercise, the later of the Exercise Date or
the date the payment of the Exercise Price for the relevant Warrant Shares is
received by the Company. 

                                
(e)      The Company understands that a delay in the
delivery of the Warrant Share Certificates by the Delivery Date could result in
economic loss to the Holder. As compensation to the Holder for such loss, the
Company agrees to pay late payment fees (as liquidated damages and not as a
penalty) to the Holder for late delivery of Warrant Share Certificates in the
amount of $100 per Trading Day after the Delivery Date for each $10,000 of
Exercise Price of the Warrant Shares subject to the delivery default. The
Company shall pay any payments incurred under this Section in immediately
available funds upon demand. Furthermore, 

2 

in addition to any other remedies which may be available to the
Holder, in the event that the Company fails for any reason to effect delivery of
the Warrant Share Certificates by the Delivery Date, the Holder may revoke all
or part of the relevant Warrant exercise by delivery of a notice to such effect
to the Company, whereupon the Company and the Holder shall each be restored to
their respective positions immediately prior to the exercise of the relevant
portion of this Warrant, except that the liquidated damages described above
shall be payable through the date notice of revocation or rescission is given to
the Company. 

                                
(f)      In addition to any other rights available to
the Holder, if the Company fails to deliver to the Warrant Share Certificates
within seven (7) Trading Days after the Delivery Date and the Holder purchases
(in an open market transaction or otherwise) shares of Common Stock (“Bought
Shares”) to deliver in satisfaction of a sale by the Holder of the shares of
Common Stock which the Holder was entitled to receive from the Company on
exercise of this Warrant (a “Buy-In”), then the Company shall pay in cash to the
Holder (in addition to any remedies available to or elected by the Holder) the
amount by which (A) the Holder’s total purchase price (including brokerage
commissions, if any) for the Bought Shares exceeds (B) the Exercise Price for
such Warrant Shares, together with interest thereon at a rate of 15% per annum,
accruing until such amount and any accrued interest thereon is paid in full
(which amount shall be paid as liquidated damages and not as a penalty). For
example, if the Holder purchases shares of Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to $10,000 (based on the
Exercise Price) of Warrant Shares, the Company shall be required to pay the
Subscriber $1,000, plus interest. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the Buy-In.

                                
(g)      The Holder shall be deemed to be the holder of
the Warrant Shares issuable to it in accordance with the provisions of this
Section 2.1 on the Exercise Date.

                                
2.2      Call Right. 

                                
(a)      If at any time the Closing Price is equal to
or above $3.00, as adjusted for any stock splits, stock combinations, stock
dividends and other similar events (the “Threshold Price”), for any thirty (30)
consecutive Trading Day period, then the Company shall have the right, but not
the obligation (the “Call Right”), exercisable at any time within five (5)
Trading Days after the last of such thirty (30) consecutive Trading Day period,
on twenty (20) Trading Days’ prior written notice to the Holder, to accelerate
the Expiration Date on all, but not less than all, of the unexercised portion of
this Warrant to 5:30 P.M. (New York City time) on the Trading Day which is the
twentieth Trading Day after the Holder receives the Call Notice (the
“Cancellation Date”). 

                                
(b)      To exercise the Call Right, the Company shall
deliver to the Holder an irrevocable written notice thereof (a “Call Notice”).
Notwithstanding the Call Notice, the Holder may continue to exercise this
Warrant in accordance with its terms at any time through and including the
Cancellation Date and the other provisions of this Warrant shall remain in full
force in effect through and including the Cancellation Date. Any portion of this
Warrant that is still outstanding immediately after the Cancellation Date shall
be cancelled.

3 

                                
2.3      Trustee for Warrant Holders. In the
event that a qualified bank or trust company shall have been appointed as
trustee for the Holder of the Warrants, such bank or trust company shall have
all the powers and duties of a warrant agent (as hereinafter described) and
shall accept, in its own name for the account of the Company or such successor
person as may be entitled thereto, all amounts otherwise payable to the Company
or such successor, as the case may be, on exercise of this Warrant pursuant to
Section 2.1. 

                     
3.      Reservation of Shares. The Company
hereby agrees that, at all times during the term of this Warrant, there shall be
reserved for issuance upon exercise of this Warrant, one hundred percent (100%)
of the number of shares of its Common Stock as shall be required for issuance of
the Warrant Shares for the then unexercised portion of this Warrant. For the
purposes of such calculations, the Company should assume that the outstanding
portion of this Warrant was exercisable in full at any time, without regard to
any restrictions which might limit the Holder’s right to exercise all or any
portion of this Warrant held by the Holder. 

                     
4.      Mutilation or Loss of Warrant. Upon
receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and (in the case of loss, theft or
destruction) receipt of reasonably satisfactory indemnification, and (in the
case of mutilation) upon surrender and cancellation of this Warrant, the Company
will execute and deliver a new Warrant of like tenor and date and any such lost,
stolen, destroyed or mutilated Warrant shall thereupon become void. 

                     
5.       Rights of the Holder. The Holder
shall not, by virtue hereof, be entitled to any rights of a stockholder in the
Company, either at law or equity, and the rights of the Holder are limited to
those expressed in this Warrant and are not enforceable against the Company
except to the extent set forth herein. 

                     
6.      Protection Against Dilution and Other
Adjustments.

                                
6.1      Adjustment Upon Issuance of Common
Stock.

                                
(a)      The term “Dilutive Issuance” means a
transaction (other than an Excepted Issuance, as defined in the Subscription
Agreements dated the Issue Date relating to the sale of units by the Company
(the “Subscription Agreements”)) in which the Company issues and sells either
(i) any shares of Common Stock or securities convertible into Common Stock
(other than with respect to warrants, rights or options to purchase shares of
Common Stock of the Company) for a consideration per share of Common Stock (the
“New Issuance Price”) which is less than the Share Purchase Price (as defined in
the Subscription Agreements) in effect immediately before such issuance (as the
same may have been adjusted after the Issue Date and prior to such issuance to
reflect capital adjustments, such as but not necessarily limited to, stock
splits; the “Current Share Purchase Price”) and/or (ii) any warrants, rights or
other options (howsoever denominated) to purchase shares of Common Stock of the
Company which has an exercise price per share (the “New Exercise Price”) which
is less than the Share Purchase Price in effect immediately before such
issuance.

4 

                                
(b)      If and whenever on or after the date hereof
and through the first anniversary of the Issue Date, the Company effects a
Dilutive Issuance, then immediately upon the consummation of such Dilutive
Issuance, the Exercise Price shall be reduced to an amount (the “Adjusted
Exercise Price”) equal to the product of (i) the New Issuance Price or the New
Exercise Price, as the case may be, and (ii) a fraction, the numerator of which
is the Exercise Price, and the denominator of which is the Current Share
Purchase Price.

                                
(c)      Upon each such adjustment of the Exercise
Price hereunder, the number of Warrant Shares shall be adjusted to the number of
shares of Common Stock determined by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares acquirable
upon exercise of this Warrant immediately prior to such adjustment and dividing
the product thereof by the Adjusted Exercise Price. 

                                
6.2      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 2 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. 

                                
6.3      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 Warrant Shares
purchasable upon exercise of this Warrant and the Exercise Price shall be
proportionately adjusted. 

                                
6.4       Adjustment for Spin Off. If, for
any reason, prior to the exercise of this Warrant in full, the Company spins off
or otherwise divests itself of a part of its business or operations or disposes
all or of a part of its assets in a transaction (the “Spin Off”) in which the
Company does not receive compensation for such business, operations or assets,
but causes securities of another entity (the “Spin Off Securities”) to be issued
to security holders of the Company, then the Company shall cause (i) to be
reserved Spin Off Securities equal to the number thereof which would have been
issued to the Holder had all of the Holder’s unexercised Warrants outstanding on
the record date (the “Record Date”) for determining the amount and number of
Spin Off Securities to be issued to security holders of the Company (the
“Outstanding Warrants”) been exercised as of the close of business on the
Trading Day immediately before the 

5 

Record Date (the “Reserved Spin Off Shares”), and (ii) to be
issued to the Holder on the exercise of all or any of the Outstanding Warrants,
such amount of the Reserved Spin Off Shares equal to (x) the Reserved Spin Off
Shares, multiplied by (y) a fraction, of which (I) the numerator is the amount
of the Outstanding Warrants then being exercised, and (II) the denominator is
the amount of the Outstanding Warrants. 

                                
6.5      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 Exercise Price
shall be adjusted in accordance with Section 6.7 and (ii) the number of Warrant
Shares 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. 

                                
6.6      Stock and Rights Offering to
Shareholders. If the Company shall at any time after the date of issuance of
this Warrant distribute to all holders of its Common Stock any shares of capital
stock of the Company (other than Common Stock) or evidences of its indebtedness
or assets (excluding cash dividends or distributions paid from retained earnings
or current year's or prior year's earnings of the Company) or rights or warrants
to subscribe for or purchase any of its securities (excluding those referred to
in the immediately preceding paragraph) (any of the foregoing being hereinafter
in this paragraph called the "Securities"), then in each such case, the Company
shall reserve shares or other units of such securities for distribution to the
Holder upon exercise of this Warrant so that, in addition to the shares of the
Common Stock to which such Holder is entitled, such Holder will receive upon
such exercise the amount and kind of such Securities which such Holder would
have received if the Holder had, immediately prior to the record date for the
distribution of the Securities, exercised this Warrant. 

                                
6.7      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
Exercise Price payable upon the exercise of this Warrant shall be adjusted to
that price determined by multiplying the Exercise Price immediately prior to
such adjustment by a fraction (i) the numerator of which shall be the number of
Warrant Shares purchasable upon exercise of this Warrant immediately prior to
such adjustment, and (ii) the denominator of which shall be the number of
Warrant Shares purchasable upon exercise of this Warrant immediately thereafter.

                     
7.       Certificate as to Adjustments. In
each case of any adjustment or readjustment in the shares of Common Stock
issuable on the exercise of this Warrant, the Company at its expense will
promptly cause its Chief Financial Officer or other appropriate designee to
compute such adjustment or readjustment in accordance with the terms of the
Warrant and prepare a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based, including a statement of (a) the consideration received or receivable by
the Company for any additional shares of Common Stock issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock
outstanding or deemed to be outstanding, and (c) the Exercise Price and the
number of 

6 

shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the Holder of the Warrant and any
Warrant Agent of the Company (appointed pursuant to Section 9 hereof). 

                     
8.      Transfer to Comply with the Securities Act;
Registration Rights. 

                                
8.1      Transfer. This Warrant has not been
registered under the 1933 Act and has been issued to the Holder for investment
and not with a view to the distribution of either the Warrant or the Warrant
Shares. Neither this Warrant nor any of the Warrant Shares or any other security
issued or issuable upon exercise of this Warrant may be sold, transferred,
pledged or hypothecated in the absence of an effective registration statement
under the Act relating to such security or an opinion of counsel satisfactory to
the Company that registration is not required under the Act. Each certificate
for the Warrant, the Warrant Shares and any other security issued or issuable
upon exercise of this Warrant shall contain a legend on the face thereof, in
form and substance satisfactory to counsel for the Company, setting forth the
restrictions on transfer contained in this Section. Any such transfer shall be
accompanied by a transferor assignment substantially in the form of Exhibit B,
executed by the transferor and the transferee and submitted to the Company. 

                                
8.2      Registration Rights. Reference is made
to the provisions of Section 5 of the Subscription Agreements (the “Registration
Provisions”). The Company agrees to include Warrant Shares of the Holder in the
Registration Statement (as defined in the Registration Provisions), which shall
be filed and maintained effective as and to the extent provided in the
Registration Provisions, all at no cost or expense to the Holder (other than any
costs or commissions which would be borne by the Holder under the terms of the
Registration Provisions were the Warrant Shares deemed to be Registrable
Securities under those provisions). 

                     
9.      Warrant Agent. The Company may, by
written notice to the Holder of the Warrant, appoint an agent (a “Warrant
Agent”) for the purpose of issuing Common Stock on the exercise of this Warrant
pursuant hereto, exchanging this Warrant pursuant hereto, and replacing this
Warrant pursuant hereto, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such Warrant Agent. 

                     
10.      Transfer on the Company’s Books. Until
this Warrant is transferred on the books of the Company, the Company may treat
the registered holder hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary. 

                     
11.      Notices. Any party may send any notice,
request, demand, claim or other communication hereunder to the Holder at Level
34, 50 Bridge Street, Sydney NSW 2000, Australia or to the Company at Level 34,
50 Bridge Street, Sydney NSW 2000, Australia (including personal delivery,
expedited courier, messenger service, fax, ordinary mail or electronic mail),
but no such notice, request, demand, claim or other communication will be deemed
to have been duly given unless and until it actually is received by the intended
recipient. Any party may change the address to which notices, requests, demands,
claims and other 

7 

communications hereunder are to be delivered by giving the
other parties written notice in the manner herein set forth. 

                     
12.      Supplements and Amendments; Whole
Agreement. This Warrant may be amended or supplemented only by an instrument
in writing signed by the parties hereto. This Warrant contains the full
understanding of the parties hereto with respect to the subject matter hereof
and thereof and there are no representations, warranties, agreements or
understandings other than expressly contained herein and therein. 

                     
13.      Governing Law. This Warrant shall be
deemed to be a contract made under the laws of the State of New York for
contracts to be wholly performed in such state and without giving effect to the
principles thereof regarding the conflict of laws. Each of the parties consents
to the jurisdiction of the federal courts whose districts encompass any part of
the County of New York or the state courts of the State of New York sitting in
the County of New York in connection with any dispute arising under this Warrant
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non conveniens, to the bringing of
any such proceeding in such jurisdictions. To the extent determined by such
court, the Company shall reimburse the Holder for any reasonable legal fees and
disbursements incurred by the Holder in enforcement of or protection of any of
its rights under any of the Transaction Documents. 

                     
14.       Remedies. The Company stipulates
that the remedies at law of the Holder of this Warrant in the event of any
default or threatened default by the Company in the performance of or compliance
with any of the terms of this Warrant are not and will not be adequate and that,
to the fullest extent permitted by law, such terms may be specifically enforced
by a decree for the specific performance of any agreement contained herein or by
an injunction against a violation of any of the terms hereof or otherwise. 

                     
15.      Counterparts. This Warrant may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. 

                     
16.      Descriptive Headings. Descriptive
headings of the several Sections of this Warrant are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof. 

8 

           IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed by
an officer thereunto duly authorized. 

Dated: September __, 2008 

VOLCAN HOLDINGS, INC. 

By:
________________________________

___________________________________
(Print Name) 

___________________________________
(Title) 

Witness: 

9 

Annex A 

Milestones for the Exercisability of Warrants 

	
  Tranche 1: Independent verification of inferred resources of 100 million
  tons of bauxite in accordance with standards prescribed in Australia by the
  Joint Ore Reserves Committee (“JORC”). 

  
	
  Tranche 2: Independent verification of inferred resources of 200 million
  tons of bauxite in accordance with standards prescribed by JORC. 

  
	
  Tranche 3: Independent verification of inferred resources of 300 million
  tons of bauxite in accordance with standards prescribed by JORC. 

  
	
  Tranche 4: Independent verification of inferred resources of 400 million
  tons of bauxite in accordance with standards prescribed by JORC. 

  
	
  Tranche 5: Independent verification of inferred resources of 500 million
  tons of bauxite in accordance with standards prescribed by JORC. 

Exhibit A 

NOTICE OF EXERCISE OF WARRANT 

	TO: 	VOLCAN HOLDINGS, INC.
  
	  	VIA TELECOPIER TO:
      (         ) - 

          
The undersigned hereby irrevocably elects to exercise the right, represented by
the Common Stock Purchase Warrant No. 2008- ____, dated as of September __,
2008, to purchase 
___________ shares of the Common Stock, $0.001 par value
(“Common Stock”), of VOLCAN HOLDINGS, INC. and tenders herewith payment
in accordance with Section 2 of said Common Stock Purchase Warrant, as follows:

_____          
CASH: $_______________________________________________ = (Exercise Price x
Exercise Shares)

                      
Payment is being made
by: 
                                
______           enclosed
check 
                                
______           wire
transfer 
                                
______           other 

_____          
CASHLESS EXERCISE [if available pursuant to Section 2.1(b)]: 

                       
Net number of Warrant Shares to be issued to Holder : _________* 

                     
* based on: Current Market Value - (Exercise Price x Exercise
Shares)
                                                    
 Market Price of Common Stock 

                     
where: 
                     
Market Price of Common Stock
[“MP”]                      
=           
$_______________
                     
Current Market Value [MP x Exercise
Shares]            
=           
$_______________

           As
contemplated by the Warrant, this Notice of Exercise is being sent by facsimile
to the telecopier number and officer indicated above.

           If
this Notice of Exercise represents the full exercise of the outstanding balance
of the Warrant, the Holder either (1) has previously surrendered the Warrant to
the Company or (2) will surrender (or cause to be surrendered) the Warrant to
the Company at the address indicated above by express courier within five (5)
Trading Days after delivery or facsimile transmission of this Notice of
Exercise. 

          
The certificates representing the Warrant Shares should be transmitted by the
Company to the Holder 

          
_______           via express
courier, or 

          
_______           by
electronic transfer 

after receipt of this Notice of Exercise (by facsimile
transmission or otherwise) to: 

_____________________________________

_____________________________________

_____________________________________

 

Dated: ______________________

____________________________
[Name of Holder] 

By: _________________________

Exhibit B 

FORM OF TRANSFEROR ENDORSEMENT 
(To be signed only on
transfer of Warrant) 

For value received, the undersigned hereby sells, assigns, and
transfers unto the person(s) named below under the heading “Transferees” the
right represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of Volcan Holdings, Inc. to which the within Warrant
relates specified under the headings “Percentage Transferred” and “Number
Transferred,” respectively, opposite the name(s) of such person(s) and appoints
each such person Attorney to transfer its respective right on the books of
Volcan Holdings, Inc. with full power of substitution in the premises. 

	Transferees 	Percentage Transferred 	Number Transferred 

 

 

Dated: ______________, ___________

________________________________
[Transferor – Name must
conform to the name of Holder as specified on face of Warrant] 

By:
_____________________________
Name: ___________________________

Signed in the presence of: 

________________________
(Name) 

ACCEPTED AND AGREED: 

______________________________
[TRANSFEREE] 

By: __________________________
Name:
_______________________fs10908ex10i_ea3coloraccents.htm

     

     

    Exhibit
10.1

    

     

    STOCK
PURCHASE AGREEMENT AND SHARE EXCHANGE

    
 

    by and
among

    

    Color
Accents Holdings, Inc.

    

    a Nevada
Corporation

    

    and

    

    Color
Accents, Inc.

    

    a Nevada
Corporation

    

    

    

    

     

     

    

    

    

    

    effective
as of June 9, 2008

    

    

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    

    STOCK PURCHASE AGREEMENT AND SHARE
EXCHANGE

    

    THIS STOCK PURCHASE AGREEMENT AND
SHARE EXCHANGE, made and entered into this 9th day of June, 2008, by
and among Color Accents Holdings, Inc., a Nevada corporation with its principal
place of business located at 813 Woodburn Road, Raleigh, North Carolina 27605
("CAH"); Color Accents, Inc. a Nevada Corporation with its principal place of
business at 813 Woodburn Road, Raleigh, North Carolina 27605
("CA").

    

    Premises

    

    A.           This
Agreement provides for the acquisition of CA whereby CA shall become a wholly
owned subsidiary of CAH and in connection therewith

    

    B.           The
boards of directors of CA and CAH have determined, subject to the terms and
conditions set forth in this Agreement, that the transaction contemplated hereby
is desirable and in the best interests of their stockholders,
respectively.  This Agreement is being entered into for the purpose of
setting forth the terms and conditions of the proposed acquisition.

    

    Agreement

    

    NOW, THEREFORE, on the stated premises
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, it is
hereby agreed as follows:

    

    ARTICLE
I

    REPRESENTATIONS,
COVENANTS AND WARRANTIES OF

    Color
Accents, Inc.

    

    As an inducement to and to obtain the
reliance of CAH, CA represents and warrants as follows:

    

    Section 1.1    Organization.   CA
is a corporation duly organized, validly existing, and in good standing under
the laws of Nevada and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws, regulations,
ordinances and orders of public authorities to own all of its properties and
assets and to carry on its business in all material respects as it is now being
conducted, including qualification to do business as a foreign corporation in
the jurisdiction in which the character and location of the assets owned by it
or the nature of the business transacted by it requires
qualification.  Included in the Schedules attached hereto (hereinafter
defined) are complete and correct copies of the articles of incorporation,
bylaws and amendments thereto as in effect on the date hereof.  The
execution and delivery of this Agreement does not and the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof
will not violate any provision of Holding's articles of incorporation or
bylaws.  CA has full power, authority and legal right and has taken
all action required by law, its articles of incorporation, its bylaws or
otherwise to authorize the execution and delivery of this
Agreement.

    

    Section 1.2    Capitalization.   The
authorized capitalization of CA consists of 100,000,000 Common Shares, $0.0001
par value per share and 10,000,000 Preferred Shares, par value
$0.0001.  As of the date hereof, CA has 6,527,500 shares of common
stock outstanding.

     

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 

    All issued and outstanding shares are
legally issued, fully paid and nonassessable and are not issued in violation of
the preemptive or other rights of any person.  CA has no securities,
warrants or options authorized or issued.

    

    Section 1.3    Subsidiaries.  CA
has no subsidiaries.

    

    Section 1.4    Tax Matters: Books
and Records.

    

    
      	
               
      

            	
              (a)   The
      books and records, financial and others, of CA are in all material
      respects complete and correct and have been maintained in accordance with
      good business accounting practices;
and

            

    

    

    
      	
               
      

            	
              (b)   CA
      has no liabilities with respect to the payment of any country, federal,
      state, county, or local taxes (including any deficiencies, interest or
      penalties).

            

    

    

    
      	
               
      

            	
              (c)   CA
      shall remain responsible for all debts incurred by CA prior to the date of
      closing.

            

    

    

    Section 1.5    Litigation and
Proceedings.   There are no actions, suits, proceedings or
investigations pending or threatened by or against or affecting CA or its
properties, at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign or before any arbitrator of any kind
that would have a material adverse affect on the business, operations, financial
condition or income of CA.  CA is not in default with respect to any
judgment, order, writ, injunction, decree, award, rule or regulation of any
court, arbitrator or governmental agency or instrumentality or of any
circumstances which, after reasonable investigation, would result in the
discovery of such a default.

     

              
Section 1.6    Material Contract
Defaults.  CA is not in default in any material respect under
the terms of any outstanding contract, agreement, lease or other commitment
which is material to the business, operations, properties, assets or condition
of CA, and there is no event of default in any material respect under any such
contract, agreement, lease or other commitment in respect of which CA has not
taken adequate steps to prevent such a default from occurring.

    

                   
Section 1.7    Information. The
information concerning CA as set forth in this Agreement and in the attached
Schedules is complete and accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
required to make the statements made in light of the circumstances under which
they were made, not misleading.

    

                
  Section 1.8    Title and Related
Matters.  CA has good and marketable title to and is the sole
and exclusive owner of all of its properties, inventory, interest in properties
and assets, real and personal (collectively, the “Assets”) free and clear of all
liens, pledges, charges or encumbrances.  CA owns free and clear of
any liens, claims, encumbrances, royalty interests or other restrictions or
limitations of any nature whatsoever and all procedures, techniques, marketing
plans, business plans, methods of management or other information utilized in
connection with CA business.   No third party has any right to,
and CA has not received any notice of infringement of or conflict with asserted
rights of other with respect to any product, technology, data, trade secrets,
know-how, proprietary techniques, trademarks, service marks, trade names or
copyrights which, singly on in the aggregate, if the subject of an unfavorable
decision ruling or finding, would have a materially adverse affect on the
business, operations, financial conditions or income of CA or any material
portion of its properties, assets or rights.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

                   
Section 1.9    Contracts   
On the closing date:

    

    
      	
               
      

            	
              (a)   There
      are no material contracts, agreements franchises, license agreements, or
      other commitments to which CA is a party or by which it or any of its
      properties are bound:

            

    

    

    
      	
               
      

            	
              (b)   CA
      is not a party to any contract, agreement, commitment or instrument or
      subject to any charter or other corporate restriction or any judgment,
      order, writ, injunction, decree or award materially and adversely affects,
      or in the future may (as far as CA can now foresee) materially and
      adversely affect, the business, operations, properties, assets or
      conditions of CA; and

            

    

    

    
      	
               
      

            	
              (c)   CA
      is not a party to any material oral or written: (I) contract for the
      employment of any officer or employee; (ii) profit sharing, bonus,
      deferred compensation, stock option, severance pay, pension benefit or
      retirement plan, agreement or arrangement covered by Title IV of the
      Employee Retirement Income Security Act, as amended;
      (iii)  agreement, contract or indenture relating to the
      borrowing of money; (iv) guaranty of any obligation for the borrowing of
      money or otherwise, excluding endorsements made for collection and other
      guaranties, of obligations, which, in the aggregate exceeds $1,000; (v)
      consulting or other contract with an unexpired term of more than one year
      or providing for payments in excess of $10,000 in the aggregate; (vi)
      collective bargaining agreement; (vii) contract, agreement or other
      commitment involving payments by it for more than $10,000 in the
      aggregate.

            

    

    

                   Section  1.10    Compliance With Laws
and Regulations.    To the best of CA’s knowledge and
belief, CA has complied with all applicable statutes and regulations of any
federal, state or other governmental entity or agency thereof, except to the
extent that noncompliance would not materially and adversely affect the
business, operations, properties, assets or condition of CA or would not result
in CA incurring material liability.

    

                 
 Section 1.11    Insurance.   All
of the insurable properties of CA are insured for CA‘s benefit under valid and
enforceable policy or policies containing substantially equivalent coverage and
will be outstanding and in full force at the Closing Date.

    

                   Section 1.12    Approval of
Agreement.    The directors of CA have authorized the
execution and delivery of the Agreement by and have approved the transactions
contemplated hereby.

    

                   Section 1.13    Material Transactions
or Affiliations.    There are no material contracts
or agreements of arrangement between CA and any person, who was at the time of
such contract, agreement or arrangement an officer, director or person owning of
record, or known to beneficially own ten percent (10%) or more of the issued and
outstanding Common Shares of CA and which is to be performed in whole or in part
after the date hereof.  CA has no commitment, whether written or oral,
to lend any funds to, borrow any money from or enter into material transactions
with any such affiliated person.

     

    Section 1.14    No Conflict With Other
Instruments.   The execution of this Agreement and the
consummation of the transactions contemplated by this Agreement will not result
in the breach of any term or provision of, or constitute an event of default
under, any material indenture, mortgage, deed of trust or other material
contract, agreement or instrument to which CA is a party or to which any of its
properties or operations are subject.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
 

    Section 1.15    Governmental
Authorizations.   CA has all licenses, franchises, permits
or other governmental authorizations legally required to enable it to conduct
its business in all material respects as conducted on the date
hereof.  Except for compliance with federal and state securities and
corporation laws, as hereinafter provided, no authorization, approval, consent
or order of, or registration, declaration or filing with, any court or other
governmental body is required in connection with the execution and delivery by
CA of this Agreement and the consummation of the transactions contemplated
hereby.

    

    ARTICLE
II

    REPRESENTATIONS,
COVENANTS AND WARRANTIES OF

    COLOR
ACCENTS HOLDINGS, INC.

    

    As an inducement to, and to obtain the
reliance of CA, CAH represents and warrants as follows:

    

    Section 2.1    Organization.  CAH
is a corporation duly organized, validly existing and in good standing under the
laws of Nevada and has the corporate power and is duly authorized, qualified,
franchised and licensed under all applicable laws, regulations, ordinances and
orders of public authorities to own all of its properties and assets and to
carry on its business in all material respects as it is now being conducted,
including qualification to do business as a foreign entity in the country or
states in which the character and location of the assets owned by it or the
nature of the business transacted by it requires
qualification.  Included in the Attached Schedules (as hereinafter
defined) are complete and correct copies of the articles of incorporation,
bylaws and amendments thereto as in effect on the date hereof.  The
execution and delivery of this Agreement does not and the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof
will not, violate any provision of CAH's certificate of incorporation or
bylaws.  CAH has full power, authority and legal right and has taken
all action required by law, its articles of incorporation, bylaws or otherwise
to authorize the execution and delivery of this Agreement.

    

    Section 2.2    Capitalization. The authorized
capitalization of CAH consists of 100,000,000 Common Shares, $0.0001 par value
per share and 10,000,000 Preferred Shares, par value $0.0001. As of the date of
the merger agreement, there were no common shares were outstanding.

    

    All issued and outstanding common
shares have been legally issued, fully paid, are nonassessable and not issued in
violation of the preemptive rights of any other person.  CAH has no
other securities, warrants or options authorized or issued.

    

    Section 2.3    Subsidiaries. CAH has no
subsidiaries.

    

    Section 2.4    Tax Matters; Books
& Records

    

    
      	
               
      

            	
              (a)  The
      books and records, financial and others, of CAH are in all material
      respects complete and correct and have been maintained in accordance with
      good business accounting practices;
and

            

    

    

    
      	
               
      

            	
              (b)  CAH
      has no liabilities with respect to the payment of any country, federal,
      state, county, local or other taxes (including any deficiencies, interest
      or penalties).

            

    

    

    
      	
               
      

            	
              (c)  CAH
      shall remain responsible for all debts incurred prior to the
      closing.

            

    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
 

    Section 2.5    Information.   The
information concerning CAH as set forth in this Agreement and in the attached
Schedules is complete and accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading.

    

    Section 2.6    Title and Related
Matters.   CAH has good and marketable title to and is the
sole and exclusive owner of all of its properties, inventory, interests in
properties and assets, real and personal (collectively, the "Assets") free and
clear of all liens, pledges, charges or encumbrances.  Except as set
forth in the Schedules attached hereto, CAH owns free and clear of any liens,
claims, encumbrances, royalty interests or other restrictions or limitations of
any nature whatsoever and all procedures, techniques, marketing plans, business
plans, methods of management or other information utilized in connection with
CAH's business.  Except as set forth in the attached Schedules, no
third party has any right to, and CAH has not received any notice of
infringement of or conflict with asserted rights of others with respect to any
product, technology, data, trade secrets, know-how, proprietary techniques,
trademarks, service marks, trade names or copyrights which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a materially adverse affect on the business, operations, financial
conditions or income of CAH or any material portion of its properties, assets or
rights.

    

    Section 2.7    Litigation and
Proceedings. There are no actions, suits or proceedings pending or
threatened by or against or affecting CAH, at law or in equity, before any court
or other governmental agency or instrumentality, domestic or foreign or before
any arbitrator of any kind that would have a material adverse effect on the
business, operations, financial condition, income or business prospects of
CAH.  CAH does not have any knowledge of any default on its part with
respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator or governmental agency or
instrumentality.

    

    Section 2.8    Contracts. On the Closing
Date:

    

    (a)    There
are no material contracts, agreements, franchises, license agreements, or other
commitments to which CAH is a party or by which it or any of its properties are
bound;

    

    (b)    CAH
is not a party to any contract, agreement, commitment or instrument or subject
to any charter or other corporate restriction or any judgment, order, writ,
injunction, decree or award which materially and adversely affects, or in the
future may (as far as CAH can now foresee) materially and adversely affect, the
business, operations, properties, assets or conditions of CAH; and

    

    (c)CAH is
not a party to any material oral or written:  (i) contract for the
employment of any officer or employee;  (ii) profit sharing, bonus,
deferred compensation, stock option, severance pay, pension, benefit or
retirement plan, agreement or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement, contract or
indenture relating to the borrowing of money;  (iv) guaranty of any
obligation for the borrowing of money or otherwise, excluding endorsements made
for collection and other guaranties of obligations, which, in the aggregate
exceeds $1,000;  (v)  consulting or other contract with an
unexpired term of more than one year or providing for payments in excess of
$10,000 in the aggregate;  (vi)  collective bargaining
agreement; (vii)   contract, agreement, or other commitment
involving payments by it for more than $10,000 in the aggregate.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
 

    Section 2.9    No Conflict With Other
Instruments. The execution of this Agreement and the consummation of
the transactions contemplated by this Agreement will not result in the breach of
any term or provision of, or constitute an event of default under, any material
indenture, mortgage, deed of trust or other material contract, agreement or
instrument to which CAH is a party or to which any of its properties or
operations are subject.

    

    Section 2.10    Material Contract
Defaults. To the best of CAH's knowledge and belief, it is not in
default in any material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the business,
operations, properties, assets or condition of CAH, and there is no event of
default in any material respect under any such contract, agreement, lease or
other commitment in respect of which CAH has not taken adequate steps to prevent
such a default from occurring.

    

    Section 2.11    Governmental
Authorizations.   To the best of CAH’s knowledge, CAH has
all licenses, franchises, permits and other governmental authorizations that are
legally required to enable it to conduct its business operations in all material
respects as conducted on the date hereof.  Except for compliance with
federal and state securities or corporation laws, no authorization, approval,
consent or order of, or registration, declaration or filing with, any court or
other governmental body is required in connection with the execution and
delivery by CAH of the transactions contemplated hereby.

    

    Section 2.12    Compliance With Laws and
Regulations.  To the best of CAH's knowledge and belief, CAH
has complied with all applicable statutes and regulations of any federal, state
or other governmental entity or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets or condition of CAH or would not result in CAH's
incurring any material liability.

    

    Section 2.13    Insurance.  All of
the insurable properties of CAH are insured for CAH‘s benefit under valid and
enforceable policy or policies containing substantially equivalent coverage and
will be outstanding and in full force at the Closing Date.

    

    Section 2.14    Approval of
Agreement.  The directors of CAH have authorized the execution
and delivery of the Agreement and have approved the transactions contemplated
hereby.

    

    Section 2.15    Material Transactions or
Affiliations.   As of the Closing Date, there will exist
no material contract, agreement or arrangement between CAH and any person who
was at the time of such contract, agreement or arrangement an officer, director
or person owning of record, or known by CAH to own beneficially, ten percent
(10%) or more of the issued and outstanding Common Shares of CAH and which is to
be performed in whole or in part after the date hereof except with regard to an
agreement with the CAH shareholders providing for the distribution of cash to
provide for payment of federal and state taxes on Subchapter S
income.  CAH has no commitment, whether written or oral, to lend any
funds to, borrow any money from or enter into any other material transactions
with, any such affiliated person.

    

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
 

    ARTICLE
III

    EXCHANGE
PROCEDURE AND OTHER CONSIDERATION

    

    Section 3.1    Share Exchange/Delivery of CAH
Securities.   On the Closing Date, the holders of all of
the CA Common Shares shall deliver to CAH (i) certificates or other documents
evidencing all of the issued and outstanding CA Common Shares, duly endorsed in
blank or with executed power attached thereto in transferable
form.  On the Closing Date, all previously issued and outstanding
Common Shares of CA shall be transferred to CAH, so that CA shall become a
wholly owned subsidiary of CAH.

    

    Section 3.2    Issuance of CAH
Common Shares.  In exchange for CAH acquiring all of the CA
Common Shares tendered pursuant to Section 3.1, CAH shall issue to the CA
shareholders a total of 6,527,500 shares of CAH common stock according to
Schedule A.  Such shares are restricted in accordance with Rule 144 of
the 1933 Securities Act.

    

    Section 3.3    Events Prior to
Closing.  Upon execution hereof or as soon thereafter as
practical, management of CA and CAH shall execute, acknowledge and deliver (or
shall cause 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,
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, subject only to the conditions to Closing
referenced herein below.

    

    Section 3.4    Closing. The closing
("Closing") of the transactions contemplated by this Agreement shall be June 9,
2008.

    

    Section 3.5    Termination.

    

    
      	
               
      

            	
              (a)  This
      Agreement may be terminated by the board of directors or majority interest
      of Shareholders of either CA or CAH, respectively, at any time prior to
      the Closing Date if:

            

    

    

    
      	
               
      

            	
              (i)    there
      shall be any action or proceeding before any court or any governmental
      body which shall seek to restrain, prohibit or invalidate the transactions
      contemplated by this Agreement and which, in the judgment of such board of
      directors, made in good faith and based on the advice of its legal
      counsel, makes it inadvisable to proceed with the exchange contemplated by
      this Agreement; or

            

    

    

    
      	
               
      

            	
              (ii)   any
      of the transactions contemplated hereby are disapproved by any regulatory
      authority whose approval is required to consummate such
      transactions.

            

    

    

    In the event of termination pursuant to
this paragraph (a) of this Section 3.5, no obligation, right, or liability shall
arise hereunder and each party shall bear all of the expenses incurred by it in
connection with the negotiation, drafting and execution of this Agreement and
the transactions herein contemplated.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
 

    
      	
               
      

            	
              (b)   This
      Agreement may be terminated at any time prior to the Closing Date by
      action of the board of directors of CA if CAH shall fail to comply in any
      material respect with any of its covenants or agreements contained in this
      Agreement or if any of the representations or warranties of CAH contained
      herein shall be inaccurate in any material respect, which noncompliance or
      inaccuracy is not cured after 20 days written notice thereof is given to
      CAH.  If this Agreement is terminated pursuant to this paragraph
      (b) of this Section 3.5, this Agreement shall be of no further force or
      effect and no obligation, right or liability shall arise
      hereunder.

            

    

    

    
      	
               
      

            	
              (c)  This
      Agreement may be terminated at any time prior to the Closing Date by
      action of the board of directors of CAH if CA shall fail to comply in any
      material respect with any of its covenants or agreements contained in this
      Agreement or if any of the representations or warranties of CA contained
      herein shall be inaccurate in any material respect, which noncompliance or
      inaccuracy is not cured after 20 days written notice thereof is given to
      CA.  If this Agreement is terminated pursuant to this paragraph
      (d) of this Section 3.5, this Agreement shall be of no further force or
      effect and no obligation, right or liability shall arise
      hereunder.

            

    

    

    In the event of termination pursuant to
paragraph (b) and (c) of this Section 3.5, the breaching party shall bear all of
the expenses incurred by the other party in connection with the negotiation,
drafting and execution of this Agreement and the transactions herein
contemplated.

    

    Section 3.6    Directors of CA After
Acquisition.  After the Closing Date, Diane Pyun shall remain
the only members of the Board of Directors of CA.  Each director shall
hold office until his successor shall have been duly elected and shall have
qualified or until his earlier death, resignation or removal.

    

    Section 3.7    Officers of CA.
  Upon the closing, the following persons shall remain the
officers of CA:

     

    
      	NAME	OFFICE
	
              Diane
      Pyun

            	
              Chief
      Executive Officer, President

            

    

    

    

    ARTICLE
IV

    SPECIAL
COVENANTS

    

    Section 4.1    Access to Properties and
Records.     Prior to closing, CA and CAH will
each afford to the officers and authorized representatives of the other full
access to the properties, books and records of each other, in order that each
may have 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 each other, as the other shall from time to time
reasonably request.

    

    Section 4.2    Availability of Rule
144.  CA and CAH shareholders holding "restricted securities, "
as that term is defined in Rule 144 promulgated pursuant to the Securities Act
will remain as “restricted securities”.  CA is under no obligation to
register such shares under the Securities Act, or otherwise. The stockholders of
CA and CAH holding restricted securities of CA and CAH as of the date of this
Agreement and their respective heirs, administrators, personal representatives,
successors and assigns, are intended third party beneficiaries of the provisions
set forth herein.  The covenants set forth in this Section 4.2 shall
survive the Closing and the consummation of the transactions herein
contemplated.

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
 

    Section 4.3    Special Covenants and Representations
Regarding the CA Common Shares to be Issued in the
Exchange.  The consummation of this Agreement, including the
issuance of the CA Common Shares to the Shareholders of CAH as contemplated
hereby, constitutes the offer and sale of securities under the Securities Act,
and applicable state statutes.  Such transaction shall be consummated
in reliance on exemptions from the registration and prospectus delivery
requirements of such statutes which depend, inter alia, upon the circumstances
under which the CAH Shareholders acquire such securities.

    

    Section 4.4    Third Party
Consents.   CA and CAH agree to cooperate with each other
in order to obtain any required third party consents to this Agreement and the
transactions herein contemplated.

    

    Section 4.5    Actions Prior and Subsequent to
Closing.

    

    (a)           From
and after the date of this Agreement until the Closing Date, except as permitted
or contemplated by this Agreement, CA and CAH will each use its best efforts
to:

    

    (i)      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;

    (ii)     maintain
in full force and effect insurance comparable in amount and in scope of coverage
to that now maintained by it;

    (iii)  
perform in all material respects all of its obligations under material
contracts, leases and instruments relating to or affecting its assets,
properties and business;

     

    (b)           From
and after the date of this Agreement until the Closing Date, CA will not,
without the prior consent of CAH:

    

    (i)
except as otherwise specifically set forth herein, make any change in its
articles of incorporation or bylaws;

    (ii)
declare or pay any dividend on its outstanding Common Shares, except as may
otherwise be required by law, or effect any stock split or otherwise change its
capitalization, except as provided herein;

    (iii)
enter into or amend any employment, severance or agreements or arrangements with
any directors or officers;

    (iv)
grant, confer or award any options, warrants, conversion rights or other rights
not existing on the date hereof to acquire any Common Shares; or

    (v)
purchase or redeem any Common Shares.

    

                   
Section 4.6    Indemnification.

    

    
      	
               
      

            	
              (a)  CA
      hereby agrees to indemnify CAH, each of the officers, agents and directors
      and current shareholders of CAH as of the Closing Date 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), to which it or they may become subject to or rising out of or
      based on any inaccuracy appearing in or misrepresentation made in 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;
  and

            

    

     

     

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
              (b)  CAH
      hereby agrees to indemnify CA, each of the officers, agents, directors and
      current shareholders of CA as of the Closing Date 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), to which it or they may become subject arising out of or
      based on any inaccuracy appearing in or misrepresentation made in 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.

            

    

    

    ARTICLE
V

    CONDITIONS
PRECEDENT TO OBLIGATIONS OF CA

    

    The obligations of CA under this
Agreement are subject to the satisfaction, at or before the Closing Date, of the
following conditions:

    

    Section 5.1    Accuracy of
Representations.  The representations and warranties made by CA
in this Agreement were true when made and shall be true at the Closing Date with
the same force and effect as if such representations and warranties were made at
the Closing Date (except for changes therein permitted by this Agreement), and
CA shall have performed or compiled with all covenants and conditions required
by this Agreement to be performed or complied with by CA prior to or at the
Closing.  CAH shall be furnished with a certificate, signed by a duly
authorized officer of CA and dated the Closing Date, to the foregoing
effect.

    

    Section 5.2    Director Approval. The
Board of Directors of CA shall have approved this Agreement and the transactions
contemplated herein.

    

    Section 5.3    Officer's
Certificate.  CAH shall have been furnished with a certificate
dated the Closing Date and signed by a duly authorized officer of CA to the
effect that:  (a)  the representations and warranties of CA
set forth in the Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true and correct
as if made on the Effective Date;  (b)  CA has performed all
covenants, satisfied all conditions, and complied with all other terms and
provisions of this Agreement to be performed, satisfied or complied with by it
as of the Effective Date;  (c)  since such date and other
than as previously disclosed to CAH, CA has not entered into any material
transaction other than transactions which are usual and  in the
ordinary course if its business; and  (d) no litigation, proceeding,
investigation or inquiry is pending or, to the best knowledge of CA, threatened,
which might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement or, to the extent not disclosed in
the CA Schedules, by or against CA which might result in any material adverse
change in any of the assets, properties, business or operations of
CA.

    

    Section 5.4    No Material Adverse
Change.  Prior to the Closing Date, there shall not have
occurred any material adverse change in the financial condition, business or
operations of nor shall any event have occurred which, with the lapse of time or
the giving of notice, may cause or create any material adverse change in the
financial condition, business or operations of CA.

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
 

    Section 5.5    Other Items.  CAH
shall have received such further documents, certificates or instruments relating
to the transactions contemplated hereby as CAH may reasonably
request.

    

    ARTICLE
VI

    CONDITIONS
PRECEDENT TO OBLIGATIONS OF CAH

    

    The obligations of CAH under this
Agreement are subject to the satisfaction, at or before the Closing date (unless
otherwise indicated herein), of the following conditions:

    

    Section 6.1    Accuracy of
Representations.  The representations and warranties made by
CAH 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, and CAH shall have performed and complied with all
covenants and conditions required by this Agreement to be performed or complied
with by CAH prior to or at the Closing.  CA shall have been furnished
with a certificate, signed by a duly authorized executive officer of CAH and
dated the Closing Date, to the foregoing effect.

    

    Section 6.2    Director
Approval.   The Board of Directors of CAH shall have
approved this Agreement and the transactions contemplated herein.

    

    Section 6.3    Officer's
Certificate.   CA shall be furnished with a certificate
dated the Closing date and signed by a duly authorized officer of CAH to the
effect that:  (a) the representations and warranties of CAH set forth
in the Agreement and in all Exhibits, Schedules and other documents furnished in
connection herewith are in all material respects true and correct as if made on
the Effective Date; and (b) CAH had performed all covenants, satisfied all
conditions, and complied with all other terms and provisions of the Agreement to
be performed, satisfied or complied with by it as of the Effective
Date.

    

    Section 6.4    No Material Adverse
Change.   Prior to the Closing Date, there shall not have
occurred any material adverse change in the financial condition, business or
operations of nor shall any event have occurred which, with the lapse of time or
the giving of notice, may cause or create any material adverse change in the
financial condition, business or operations of CAH.

    

    ARTICLE
VII

    MISCELLANEOUS

    

    Section 7.1    Brokers and
Finders.    Each party hereto hereby represents and
warrants that it is under no obligation, express or implied, to pay certain
finders in connection with the bringing of the parties together in the
negotiation, execution, or consummation of this Agreement. The parties each
agree to indemnify the other against any claim by any third person for any
commission, brokerage or finder's fee or other payment with respect to this
Agreement or 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 7.2     Law, Forum and
Jurisdiction.   This Agreement shall be construed and
interpreted in accordance with the laws of the State of New Jersey, United
States of America.

     

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    
 

    Section 7.3    Notices.  Any
notices or other communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by registered mail or
certified mail, postage prepaid, or by prepaid telegram addressed as
follows:

    

    
      	
              If
      to CA:

            	
              813
      Woodburn Road,

            
	 	Raleigh,
      North Carolina 27605

    

     

    
      	
              If
      to CAH:

            	
              813
      Woodburn Road,

            
	 	Raleigh,
      North Carolina 27605

    

     

    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 as of  the date so delivered, mailed or
telegraphed.

    

    Section 7.4    Attorneys' Fees.  In
the event that any party institutes any action or suit to enforce this Agreement
or to secure relief from any default hereunder or breach hereof, the breaching
party or parties shall reimburse the non-breaching party or parties for all
costs, including reasonable attorneys' fees, incurred in connection therewith
and in enforcing or collecting any judgment rendered therein.

    

    Section 7.5    Confidentiality. Each
party hereto agrees with the other party that, unless and until the transactions
contemplated by this Agreement have been consummated, they and their
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 is a matter of public knowledge or is required by law to be published;
and (ii)  to the extent that such data or information must be used or
disclosed in order to consummate the transactions contemplated by this
Agreement.

    

    Section 7.6    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 7.7    Third Party
Beneficiaries. This contract is solely between CA and CAH and except
as specifically provided, no director, officer, stockholder, employee, agent,
independent contractor or any other person or entity shall be deemed to be a
third party beneficiary of this Agreement.

    

    Section 7.8    Entire
Agreement.  This Agreement represents the entire agreement
between the parties relating to the subject matter hereof.  This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof.  There are no other courses of
dealing, understanding, agreements, representations or warranties, written or
oral, except as set forth herein.  This Agreement may not be amended
or modified, except by a written agreement signed by all parties
hereto.

    

    Section 7.9    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 18 months.

     

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    
 

    Section 7.10    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 7.11    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 be 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 hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.

    

    Section 7.12    Expenses. Each party
herein shall bear all of their respective cost s and expenses incurred in
connection with the negotiation of this Agreement and in the consummation of the
transactions provided for herein and the preparation thereof.

    

    Section 7.13    Headings; Context. The
headings of the sections and paragraphs contained in this Agreement are for
convenience of reference only and do not form a part hereof and in no way
modify, interpret or construe the meaning of this Agreement.

    

    Section 7.14    Benefit. This Agreement
shall be binding upon and shall inure only to the benefit of the parties hereto,
and their permitted assigns hereunder.  This Agreement shall not be
assigned by any party without the prior written consent of the other
party.

    

    Section 7.15    Public
Announcements. Except as may be required by law, neither party shall
make any public announcement or filing with respect to the transactions provided
for herein without the prior consent of the other party hereto.

    

    Section 7.16    Severability. In the
event that any particular provision or provisions of this Agreement or the other
agreements contained herein shall for any reason hereafter be determined to be
unenforceable, or in violation of any law, governmental order or regulation,
such unenforceability or violation shall not affect the remaining provisions of
such agreements, which shall continue in full force and effect and be binding
upon the respective parties hereto.

    

    Section 7.17    Failure of Conditions;
Termination.  In the event of any of the conditions specified
in this Agreement shall not be fulfilled on or before the Closing Date, either
of the parties have the right either to proceed or, upon prompt written notice
to the other, to terminate and rescind this Agreement.  In such event,
the party that has failed to fulfill the conditions specified in this Agreement
will liable for the other parties legal fees.  The election to proceed
shall not affect the right of such electing party reasonably to require the
other party to continue to use its efforts to fulfill the unmet
conditions.

    

    Section 7.18    No Strict
Construction. The language of this Agreement shall be construed as a
whole, according to its fair meaning and intendment, and not strictly for or
against either party hereto, regardless of who drafted or was principally
responsible for drafting the Agreement or terms or conditions
hereof.

    

    Section 7.19    Execution Knowing and
Voluntary.  In executing this Agreement, the parties severally
acknowledge and represent that each:  (a) has fully and carefully read
and considered this Agreement;  (b) has been or has had the
opportunity to be fully apprized by its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof;  (c) is
executing this Agreement voluntarily, free from any influence, coercion or
duress of any kind.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
 

    Section
7.20   Amendment.   At any time after the
Closing Date, this Agreement may be amended by a writing signed by both parties,
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 hereof may be extended
by a writing signed by the party or parties for whose benefit the provision is
intended.

    

    Section 7.21  Conflict of
Interest.   Both CAH and CA understand that Anslow &
Jaclin, LLP is representing both parties in this transaction which represents a
conflict of interest.  Both CAH and CA have the right to different
counsel due to this conflict of interest.  Notwithstanding the above,
both CAH and CA agree to waive this conflict and have Anslow & Jaclin, LLP
represent both parties in the above-referenced transaction.  Both CAH
and CA agree to hold this law firm harmless from any and all liabilities that
may occur or arise due to this conflict.

     

     

     

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    
 

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

    

     

    
      	
              ATTEST:

            	
              Color
      Accents Holdings, Inc.

            
	 	 
	/s/
      Peter Reichard	By:
      /s/
      Diane
      Pyun            
      
	 	Diane
      Pyun
	 	President

    

     

     

    
      
        	
                ATTEST:

              	
                Color
      Accents, Inc.

              
	 	 
	/s/
      Peter Reichard	By:
      /s/
      Diane
      Pyun            
      
	 	Diane
      Pyun
	 	President

      

      
 

       

      16

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