Document:

Exhibit 10.1 - Share Exchange Agreement

    
      

      

    

    

      

      

      

      

      

      

      

      

      

      

      SHARE
        EXCHANGE AGREEMENT

      

      Between
        and Among

      

      TYLERSTONE
        VENTURES CORPORATION,

      

      NCOAT,
        INC., 

      

      and

      

      CERTAIN
        NCOAT, INC. SHAREHOLDERS

      

      

      Dated
        as
        of February 3, 2007

      

      

       

       

      

      

      
        
          

        

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SHARE
        EXCHANGE AGREEMENT

       

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

      

      RECITALS

       

      WHEREAS,
        Tylerstone is a publicly held corporation organized under the laws of the
        State
        of Delaware with no significant operations;

       

      WHEREAS,
        nCoat
        is a privately held corporation organized under the laws of
        Delaware;

       

      WHEREAS,
        Tylerstone agrees to acquire up to 100% of the issued and outstanding securities
        of nCoat in exchange for the issuance of certain shares of Tylerstone common
        stock to the nCoat shareholders (the "Exchange")
        and
        the shareholders of nCoat (the "nCoat
        Shareholders")
        agree
        to exchange their shares of nCoat on the terms described herein;
        and

      

      WHEREAS,
        a
        material inducement to nCoat and the nCoat Shareholders to enter into and
        proceed with the transactions described in this Agreement is the covenant
        set
        forth below that Tylerstone will complete a financing of between $7,500,000
        and
        $12,500,000 in connection with the closing of the transactions described
        in this
        Agreement.

       

      AGREEMENT

       

      NOW
        THEREFORE,
        based
        on the foregoing recitals and for and in consideration of the mutual covenants
        and agreements hereinafter set forth and the mutual benefits to the parties
        to
        be derived here from, and intending to be legally bound hereby, it is hereby
        agreed as follows:

       

      

      ARTICLE
        I

      REPRESENTATIONS,
        COVENANTS, AND WARRANTIES OF nCOAT

       

      As
        an
        inducement to, and to obtain the reliance of Tylerstone, except as set forth
        in
        the nCoat Schedules (as hereinafter defined), nCoat represents and warrants
        as
        of the date hereof and as of the Closing Date, as defined below, as
        follows:

       

      Section
        1.01  Organization;
        Authorization.
         nCoat is a corporation duly organized, validly existing, and in good
        standing under the laws of the State of Delaware and has the corporate power
        and
        is duly authorized under all applicable laws, regulations, ordinances, and
        orders of public authorities to carry on its business in all material respects
        as it is now being conducted. Included in the nCoat Schedules are complete
        and
        correct copies of the certificate of incorporation, and bylaws of nCoat as
        in
        effect on the date hereof. The execution and delivery of this Agreement does
        not, and the consummation of the transactions contemplated hereby will not,
        violate any provision of nCoat’s certificate of incorporation or bylaws. nCoat
        has taken all actions required by law, its certificate of incorporation,
        or
        otherwise to authorize the execution and delivery of this Agreement. nCoat
        has
        full power, authority, and legal right and has taken all action required
        by law,
        its certificate of incorporation, and otherwise to consummate the transactions
        herein contemplated.

       

      
        
          
          

        

        
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      Section
        1.02  Capitalization. The
        authorized capitalization of nCoat consists of Fifteen Million (15,000,000)
        shares of common stock, par value of $0.0001 per share. There are Eleven
        Million
        Five Hundred Fifty-Four Thousand Five Hundred Forty-Five (11,554,545) shares
        of
        common stock currently issued and outstanding. The issued and outstanding
        shares
        are legally issued, fully paid, and non-assessable and not issued in violation
        of the preemptive or other rights of any person. A portion of the shares
        that
        have been issued to employees of nCoat, Inc. and others are subject to
        restrictions (“Restricted Shares”). A small portion of the Restricted Shares
        have restrictions
        only
        under
        rule 144 of the U.S. Securities and Exchange Commission, however the majority
        of
        these shares have more restrictions, including some or all of the following:
        vesting schedules requiring the individual employee to whom the stock may
        be
        issued to continue his or her employment for a period of time previously
        determined by the management of nCoat; restrictions on relocating by the
        employee to such nCoat office location or locations as shall be required
        by the
        management of nCoat; restrictions on objective performance levels expected
        of
        the employee; restrictions dependent on the possible transactions of the
        Company
        in closing a sale, merger or other combination such as the one contemplated
        herein, and other
        similar restrictions. The Restricted Share Certificates bear a restricted
        legend
        that includes the specific set of restrictions for those shares and in
        connection with their issue, if there is a restriction that remains in place,
        among other things, the owners of those shares have assigned any and all
        voting
        powers by grant of a power of attorney to the Voting Shareholders to
        collectively vote the Restricted Shares’ vote.

       

      Section
        1.03  Legal
        Actions.
        There
        are no legal actions against nCoat or directors in their role as directors
        of
        nCoat, nor does nCoat know of any threatened legal actions against it or
        any of
        its directors in their role as directors of nCoat. Additionally, nCoat is
        not
        engaged in any legal actions against other parties, and is current in all
        filings with tax and regulatory authorities, non-compliance with which would
        have a material adverse affect upon nCoat.

      

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

      

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

      

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

      

      ARTICLE
        II

      REPRESENTATIONS,
        COVENANTS, AND WARRANTIES OF TYLERSTONE

       

      As
        an
        inducement to, and to obtain the reliance of nCoat and the nCoat Shareholders,
        except as set forth in the Tylerstone Schedules (as hereinafter defined),
        Tylerstone represents and warrants, as of the date hereof and as of the Closing
        Date, as follows:

      

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

      

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

      

      
        
          
          

        

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

      

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

      

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

       

      ARTICLE
        III

      PLAN
        OF EXCHANGE

       

      Section
        3.01  The
        Exchange.

      

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

      

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

      

      (c)  In
        consideration for the Closing of the Exchange (the “Closing”),
        certain Tylerstone shareholders will tender an aggregate of 750,000 pre-split
        shares of Tylerstone common stock (the “Tylerstone
        Tendered Shares”)
        to
        Tylerstone for Cancellation.

       

      (d)  The
        tender of the Tylerstone Tendered Shares, the issuance of the Tylerstone
        New
        Shares and Tylerstone New Restricted Shares, and the tender of the nCoat
        Tendered Shares and Restricted nCoat Tendered Shares shall occur at
        Closing.

      

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

      

      
        
          
          

        

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

      

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

      

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

      

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

      

      

      Section
        3.02  Anti-Dilution.
        The
        number of shares of Tylerstone Common Stock issuable upon the Exchange pursuant
        to Section 3.01 shall be appropriately adjusted to take into account any
        stock
        split, stock dividend, reverse stock split, recapitalization, or similar
        change
        in the Tylerstone Common Stock which may occur, other than the Required Stock
        Split, between the date of the execution of this Agreement and the Closing
        Date.

       

      Section
        3.03  Closing
        Events.
        At the
        Closing, Tylerstone, the Tylerstone shareholders, nCoat, the Accepting
        Shareholders and the holders of the Restricted nCoat Tendered Shares shall
        execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged,
        and delivered), any and all certificates, opinions, financial statements,
        schedules, agreements, resolutions, rulings or other instruments required
        by
        this Agreement to be so delivered at or prior to the Closing, as applicable,
        together with such other items as may be reasonably requested by the parties
        hereto and their respective legal counsel in order to effectuate or evidence
        the
        transactions contemplated hereby.

       

      Section
        3.04  Deadline.
        The
        Parties agree that the Closing shall occur on or before February 15, 2007,
        unless otherwise agreed by the Parties.

      

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

      

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

      

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

      

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

       

      
        
          
          

        

        
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      ARTICLE
        IV

      SPECIAL
        COVENANTS

       

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

       

      Section
        4.02  Delivery
        of Books and Records.
        At the
        Closing, nCoat shall deliver to Tylerstone the originals of the corporate
        minute
        books, books of account, contracts, records, and all other books or documents
        of
        nCoat now in the possession of nCoat or its representatives. Tylerstone shall
        deliver to nCoat the originals of the corporate minute books, books of account,
        contracts, records, and all other books or documents of Tylerstone now in
        the
        possession of Tylerstone or its representatives.

      

      Section
        4.03  Third
        Party Consents and Certificates.
        Tylerstone and nCoat agree to cooperate with each other in order to obtain
        any
        required third party consents to this Agreement and the transactions herein
        contemplated.

       

      Section
        4.04  Tylerstone
        Shareholder Approval.
        Tylerstone shall promptly contact its shareholders and ask that a majority
        of
        the shareholders of Tylerstone approve, and Tylerstone's Board of Directors
        shall recommend approval of, the terms of this Agreement and such other matters
        as shall be required under Delaware State law for approval hereunder. In
        addition, Tylerstone shall continue to promptly file with the SEC necessary
        disclosure statements required by federal securities law. 

       

      Section
        4.05  Forward
        Stock Split.
        Prior
        to the Closing, Tylerstone shall effectuate the Required Stock Split. Tylerstone
        shall take all necessary steps to amend its Certificate of Incorporation
        to
        reflect the Required Stock Split.

      

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

      

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

      

      Section
        4.08 Additional Actions
        Prior to Closing.

       

      (a)  From
        and after the date
        of this Agreement until the Closing and except as set forth in the Tylerstone
        Schedules or nCoat Schedules or as permitted or contemplated by this Agreement,
        Tylerstone (subject to paragraph (iv) below) and nCoat, respectively, will
        each:

       

      (i)  carry
        on its business in substantially the same manner as it has
        heretofore;

       

      
        
          
          

        

        
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      (ii)  maintain
        and keep its properties in states of good repair and condition as at present,
        except for depreciation due to ordinary wear and tear and damage due to
        casualty;

       

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

       

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

       

      (v)  use
        commercially reasonable care, diligence and skill to
        maintain and preserve its business organization intact, to retain its key
        employees, and to maintain its relationship with its material suppliers and
        customers; and

       

      (vi)  fully
        comply with and perform in all material respects all obligations and duties
        imposed on it by all federal and state laws and all rules, regulations, and
        orders imposed by federal or state governmental authorities.

       

      (b)  From
        and after the date
        of this Agreement until the Closing, neither Tylerstone nor nCoat
        will:

       

      (i)  make
        any changes in their respective certificate of incorporation or bylaws except
        as
        contemplated by this Agreement; 

       

      (ii)  enter
        into or amend any contract, agreement, or other instrument of any of the
        types
        described in such party's schedules, except that a party may enter into or
        amend
        any contract, agreement, or other instrument in the ordinary course of business
        involving the sale of goods or services; or

       

      (iii)  sell
        any assets or discontinue any operations, sell any shares of capital stock
        or
        conduct any similar transactions other than in the ordinary course of
        business.

       

      Section
        4.09  Indemnification.

       

      (a)  nCoat
        hereby agrees to
        indemnify Tylerstone and each of the officers, agents and directors of
        Tylerstone as of the date of execution of this Agreement against any loss,
        liability, claim, damage, or expense (including, but not limited to, any
        and all
        expense whatsoever reasonably incurred in investigating, preparing, or defending
        against any litigation, commenced or threatened, or any claim whatsoever)
        (“Loss”),
        to
        which it or they may become subject arising out of or based on any material
        inaccuracy appearing in or misrepresentations made under Article I of this
        Agreement. The indemnification provided for in this paragraph shall survive
        the
        Closing and consummation of the transactions contemplated hereby and termination
        of this Agreement for one year following the Final Closing.

       

      (b)  The
        Accepting nCoat
        Shareholders agree to indemnify Tylerstone and each of the officers, agents
        and
        directors of Tylerstone as of the date of execution of this Agreement against
        any Loss to which it or they may become subject arising out of or based on
        any
        claim which is finally determined by a court of competent jurisdiction that
        (i)
        the Accepting nCoat Shareholder did not have good title to the nCoat Tendered
        Shares or (ii) that the nCoat Tendered Shares where subject to a lien or
        encumbrance.. The indemnification provided for in this paragraph shall survive
        the Closing and consummation of the transactions contemplated hereby and
        termination of this Agreement for one year following the Final
        Closing.

       

      
        
          
          

        

        
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      (c)  Tylerstone
        hereby agrees
        to indemnify nCoat and each of the officers, agents, and directors of nCoat
        and
        the nCoat Shareholders as of the date of execution of this Agreement against
        any
        Loss to which it or they may become subject arising out of or based on any
        inaccuracy appearing in or misrepresentation made under Article II of this
        Agreement. The indemnification provided for in this paragraph shall survive
        the
        Closing and consummation of the transactions contemplated hereby and termination
        of this Agreement for one year following the Final Closing.

       

      (d)  Tylerstone
        hereby agrees
        to indemnify nCoat and each of the officers, agents, and directors of nCoat
        and
        the nCoat Shareholders as of the date of execution of this Agreement against
        any
        Loss to which it or they may become subject arising out of or based on any
        claim
        from the cancellation of the Tylerstone Shareholder’s stock as set forth in
        Section 3.01 (c), including, but not limited to, any claim by any third party
        asserting rights, ownership, liens or otherwise in connection with the stock
        surrendered and cancelled. The indemnification provided for in this paragraph
        shall survive the Closing and consummation of the transactions contemplated
        hereby and termination of this Agreement for one year following the Final
        Closing.

       

      Section
        4.10  The
        Acquisition of Tylerstone Common Stock.
        Tylerstone and nCoat understand and agree that the consummation of this
        Agreement including the issuance of the Tylerstone New Shares, Tylerstone
        New
        Restricted Shares and, if applicable, the New Additional Shares, to the nCoat
        Shareholders in the Exchange for the nCoat Shares as contemplated hereby
        constitutes the offer and sale of securities under the Securities Act of
        1933,
        as amended (the “Securities
        Act”)
        and
        applicable state statutes. Tylerstone and nCoat agree that such transactions
        shall be consummated in reliance on exemptions from the registration and
        prospectus delivery requirements of such statutes, which depend, among other
        items, on the circumstances under which such securities are
        acquired.

       

      (a)  In
        order to provide
        documentation for reliance upon the exemptions from the registration and
        prospectus delivery requirements for such transactions, each Accepting nCoat
        Shareholder and the holders of the Restricted nCoat Tendered Shares shall
        execute and deliver to Tylerstone a Suitability Letter and an Investment
        Representation Letter in substantially the same form as that attached hereto
        as
Exhibit
        SL
        and
        Exhibit IRL
        ,
        respectively.

       

      (b)  In
        connection with the
        transaction contemplated by this Agreement, Tylerstone and nCoat shall each
        file, with the assistance of the other and their respective legal counsel,
        such
        notices, applications, reports, or other instruments as may be deemed by
        them to
        be necessary or appropriate in an effort to document reliance on such
        exemptions, and the appropriate regulatory authority in the states where
        the
        shareholders of nCoat reside unless an exemption requiring no filing is
        available in such jurisdictions, all to the extent and in the manner as may
        be
        deemed by such parties to be appropriate.

       

      (c)  In
        order to more fully
        document reliance on the exemptions as provided herein, nCoat, the Accepting
        nCoat Shareholders, the holders of the Restricted nCoat Tendered Shares and
        Tylerstone shall execute and deliver to the other, at or prior to the Closing,
        such further letters of representation, acknowledgment, suitability, or the
        like
        as nCoat or Tylerstone and their respective counsel may reasonably request
        in
        connection with reliance on exemptions from registration under such securities
        laws.

       

      (d)  The
        Accepting nCoat
        Shareholders and the holders of the Restricted nCoat Tendered Shares acknowledge
        that the basis for relying on exemptions from registration or qualifications
        are
        factual, depending on the conduct of the various parties, and that no legal
        opinion or other assurance will be required or given to the effect that the
        transactions contemplated hereby are in fact exempt from registration or
        qualification.

       

      Section
        4.11  Sales
        of Securities Under Rule 144, If Applicable.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      (a)  Tylerstone
        will
        use
        commercially reasonable care, diligence and skill
        at all
        times satisfy the current public information requirements of Rule 144
        promulgated under the Securities Act so that its shareholders can sell
        restricted securities that have been held for one year or more or such other
        restricted period as required by Rule 144 as it is from time to time
        amended.

       

      (b)  Upon
        being informed in
        writing by any person holding restricted stock of Tylerstone that such person
        intends to sell any shares under rule 144 promulgated under the Securities
        Act
        (including any rule adopted in substitution or replacement thereof), Tylerstone
        will certify in writing to such person that it is in compliance with Rule
        144
        current public information requirement to enable such person to sell such
        person's restricted stock under Rule 144, as may be applicable under the
        circumstances.

       

      (c)  If
        any certificate
        representing any such restricted stock is presented to Tylerstone's transfer
        agent for registration or transfer in connection with any sales theretofore
        made
        under Rule 144, provided such certificate is duly endorsed for transfer by
        the
        appropriate person(s) or accompanied by a separate stock power duly executed
        by
        the appropriate person(s) in each case with reasonable assurances that such
        endorsements are genuine and effective, and is accompanied by a legal opinion
        that such transfer has complied with the requirements of Rule 144, as the
        case
        may be, Tylerstone will promptly instruct its transfer agent to register
        such
        transfer and to issue one or more new certificates representing such shares
        to
        the transferee and, if appropriate under the provisions of Rule 144, as the
        case
        may be, free of any stop transfer order or restrictive legend. 

       

      (d)  This
        Section 4.11 shall
        survive the closing of this Agreement for a period of two (2)
        years.

      

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

      

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

      

      ARTICLE
        V

      CONDITIONS
        PRECEDENT TO OBLIGATIONS OF TYLERSTONE

       

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

       

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

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

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

      

      Section
        5.03  No
        Material Adverse Change.
        As of
        the Closing there shall not have occurred any material adverse change,
        financially or otherwise, which materially impairs the ability of nCoat to
        conduct its business or the earning power thereof.

       

      Section
        5.04  Financial
        Statements.
        nCoat
        shall have completed audited pro forma consolidated financial statements
        required to be filed upon Final Closing by Tylerstone as a reporting issuer
        under the Securities Exchange Act of 1934.

      

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

      

      ARTICLE
        VI

      CONDITIONS
        PRECEDENT TO OBLIGATIONS OF nCOAT

      AND
        THE nCOAT SHAREHOLDER

       

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

      

      Section
        6.01  Accuracy
        of Representations and Performance of Covenants.
        The
        representations and warranties made by Tylerstone in this Agreement were
        true
        when made and shall be true as of the Closing Date (except for changes therein
        permitted by this Agreement) with the same force and effect as if such
        representations and warranties were made at and as of the Closing Date.
        Additionally, Tylerstone shall have performed and complied with all covenants
        and conditions required by this Agreement to be performed or complied with
        by
        Tylerstone.

       

      Section
        6.02 Issuance
        of Shares.
        Shares
        of Tylerstone common stock to be issued by Tylerstone to the Accepting nCoat
        Shareholders and to the holders of the Restricted nCoat Tendered Shares at
        Closing shall have been issued.

       

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

      

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

      

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

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

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

      

      ARTICLE
        VII

      MISCELLANEOUS

       

      Section
        7.01  Brokers.
        Tylerstone, the Accepting nCoat Shareholders and nCoat agree that, except
        as set
        out on Schedule 7.01 of the Tylerstone Schedules and the nCoat Schedules,
        there
        were no finders or brokers involved in bringing the parties together or who
        were
        instrumental in the negotiation, execution or consummation of this Agreement.
        Tylerstone and nCoat each agree to indemnify the other against any claim
        by any
        third person other than those described above for any commission, brokerage,
        or
        finder's fee arising from the transactions contemplated hereby based on any
        alleged agreement or understanding between the indemnifying party and such
        third
        person, whether express or implied from the actions of the indemnifying
        party.

       

      Section
        7.02  Governing
        Law.
        This
        Agreement shall be governed by, enforced, and construed under and in accordance
        with the laws of the United States of America and, with respect to the matters
        of state law, with the laws of the State of Delaware. Venue for all matters
        shall be in Delaware, without giving effect to principles of conflicts of
        law
        thereunder. Each of the parties (a) irrevocably consents and agrees that
        any
        legal or equitable action or proceedings arising under or in connection with
        this Agreement shall be brought exclusively in the federal courts of the
        United
        States. By execution and delivery of this Agreement, each party hereto
        irrevocably submits to and accepts, with respect to any such action or
        proceeding, generally and unconditionally, the jurisdiction of the aforesaid
        court, and irrevocably waives any and all rights such party may now or hereafter
        have to object to such jurisdiction.

       

      Section
        7.03  Notices.
        Any
        notice or other communications required or permitted hereunder shall be in
        writing and shall be sufficiently given if personally delivered to it or
        sent by
        telecopy, overnight courier or registered mail or certified mail, postage
        prepaid, addressed as follows:

       

       

       

      
        	
                 If
                  to nCoat, to: 

              	
                Paul
                  S Clayson

                7237
                  Pace Road

                Whitsett,
                  North Carolina

                Tel:
                  (336) 447-2000

                Fax:
                  (336) 447-2020

              
	
                 

              	
                 

              
	
                With
                  copies to:

              	
                Jeffrey
                  M. Jones, Esq.

                Durham
                  Jones & Pinegar, P.C.

                111
                  East Broadway, Suite 900

                Salt
                  Lake City, Utah 84111

                Tel:
                  801-41503000

                Fax:
                  801-415-3500

                 

              
	
                 

              	
                 

              

      

       

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      
        	
                If
                  to Tylerstone, to: 

              	
                Paul
                  S Clayson

                7237
                  Pace Road

                Whitsett,
                  North Carolina

                Tel:
                  (336) 447-2000

                Fax:
                  (336) 447-2020

              
	
                 

              	
                 

              
	
                With
                  copies to:

              	
                Jeffrey
                  M. Jones, Esq.

                Durham
                  Jones & Pinegar, P.C.

                111
                  East Broadway, Suite 900

                Salt
                  Lake City, Utah 84111

                Tel:
                  801-41503000

                Fax:
                  801-415-3500

              
	
                If
                  to an Accepting nCoat Shareholder:

              	
                At
                  the address listed next to such Accepting nCoat Shareholder on
                  Exhibit B
                  hereto.

              

      

       

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

      

      Section
        7.04  Attorney's
        Fees.
        In the
        event that either party institutes any action or suit to enforce this Agreement
        or to secure relief from any default hereunder or breach hereof, the prevailing
        party shall be reimbursed by the losing party for all costs, including
        reasonable attorney's fees, incurred in connection therewith and in enforcing
        or
        collecting any judgment rendered therein.

       

      Section
        7.05  Confidentiality.
        Each
        party hereto agrees with the other that, unless and until the transactions
        contemplated by this Agreement have been consummated, it and its representatives
        will hold in strict confidence all data and information obtained with respect
        to
        another party or any subsidiary thereof from any representative, officer,
        director or employee, or from any books or records or from personal inspection,
        of such other party, and shall not use such data or information or disclose
        the
        same to others, except (i) to the extent such data or information is published,
        is a matter of public knowledge, or is required by law to be published; or
        (ii)
        to the extent that such data or information must be used or disclosed in
        order
        to consummate the transactions contemplated by this Agreement. In the event
        of
        the termination of this Agreement, each party shall return to the other party
        all documents and other materials obtained by it or on its behalf and shall
        destroy all copies, digests, work papers, abstracts or other materials relating
        thereto, and each party will continue to comply with the confidentiality
        provisions set forth herein.

       

      Section
        7.06  Public
        Announcements and Filings.
        Unless
        required by applicable law or regulatory authority, none of the parties will
        issue any report, statement or press release to the general public, to the
        trade, to the general trade or trade press, or to any third party (other
        than
        its advisors and representatives in connection with the transactions
        contemplated hereby) or file any document, relating to this Agreement and
        the
        transactions contemplated hereby, except as may be mutually agreed by the
        parties. Copies of any such filings, public announcements or disclosures,
        including any announcements or disclosures mandated by law or regulatory
        authorities, shall be delivered to each party at least one (1) business day
        prior to the release thereof.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      Section
        7.07  Schedules;
        Knowledge.
        Each
        party is presumed to have full knowledge of all information set forth in
        the
        other party's schedules delivered pursuant to this Agreement.

       

      Section
        7.08  Third
        Party Beneficiaries.
        This
        contract is strictly between Tylerstone, nCoat, and the Accepting nCoat
        Shareholders, and, except as specifically provided, no director, officer,
        stockholder (other than the Accepting nCoat Shareholders), employee, agent,
        independent contractor or any other person or entity shall be deemed to be
        a
        third party beneficiary of this Agreement.

       

      Section
        7.09  Expenses.
        Subject
        to Section 7.04 above, whether or not the Exchange is consummated, each of
        Tylerstone and nCoat will bear their own respective expenses, including legal,
        accounting and professional fees, incurred in connection with the Exchange
        or
        any of the other transactions contemplated hereby.

       

      Section
        7.10  Entire
        Agreement.
        This
        Agreement represents the entire agreement between the parties relating to
        the
        subject matter thereof and supersedes all prior agreements, understandings
        and
        negotiations, written or oral, with respect to such subject matter.

       

      Section
        7.11  Survival;
        Termination.
        The
        representations, warranties, and covenants of the respective parties shall
        survive the Closing Date and the consummation of the transactions herein
        contemplated for a period of two years.

       

      Section
        7.12  Counterparts.
        This
        Agreement may be executed in multiple counterparts, each of which shall be
        deemed an original and all of which taken together shall be but a single
        instrument.

       

      Section
        7.13  Amendment
        or Waiver.
        Every
        right and remedy provided herein shall be cumulative with every other right
        and
        remedy, whether conferred herein, at law, or in equity, and may be enforced
        concurrently herewith, and no waiver by any party of the performance of any
        obligation by the other shall be construed as a waiver of the same or any
        other
        default then, theretofore, or thereafter occurring or existing. At any time
        prior to the Closing Date, this Agreement may by amended by a writing signed
        by
        all parties hereto, with respect to any of the terms contained herein, and
        any
        term or condition of this Agreement may be waived or the time for performance
        may be extended by a writing signed by the party or parties for whose benefit
        the provision is intended.

       

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK.

      

      SIGNATURE
        PAGES FOLLOW.]

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

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

       

      
        	 	
                TYLERSTONE
                  VENTURES CORPORATION

              
	 	 
	 	 
	 	
                By: /s/
                  Terry R.
                  Holmes                                         
                  

              
	 	
                Name:
                  Terry R. Holmes

              
	 	
                Title:
                  President

              
	 	 
	 	 
	 	
                NCOAT,
                  INC.

              
	 	 
	 	 
	 	
                By: /s/
                  Paul S
                  Clayson                                           

              
	 	
                Name:
                  Paul S Clayson

              
	 	
                Title:
                  Chairman, CEO

              
	 	 

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      ACCEPTING
        NCOAT SHAREHOLDERS

      

      The
        undersigned Shareholders of nCoat hereby agree to participate in the Exchange
        on
        the terms set forth above. Subject to Section 7.11 above, the undersigned
        hereby
        represents and affirms that he has read each of the representations and
        warranties of nCoat set out in Article I hereof and that, to the best of
        his
        knowledge, all of such representations and warranties are true and correct.
        In
        addition, as attorneys-in-fact for all of the holders of nCoat Restricted
        Shares, we execute the Agreement on their behalf, and agree to participate
        in
        the Exchange on the terms set forth above 

       

      
        	
                Name,
                  address and Signature

              	
                Number
                  of nCoat

                Shares
                  Tendered

              
	 	 
	 	 
	
                /s/
                  Terry R.
                  Holmes                                              
                  

              	 
	
                Terry
                  R. Holmes, individually,

              	
                2,500,000

              
	
                and
                  as attorney-in-fact for the holders

              	 
	
                nCoat
                  Restricted Shares 

              	 
	
                7237
                  Pace Road

              	 
	
                Whitesett,
                  NC 27377

              	 
	 	 
	 	 
	 	 
	 	 
	
                
                  /s/
                    Paul S
                    Clayson                                               
                    

                

              	 
	
                Paul
                  S Clayson, individually,

              	
                2,500,000

              
	
                and
                  as attorney-in-fact for the holders

              	 
	
                nCoat
                  Restricted Shares 

              	 
	
                7237
                  Pace Road

              	 
	
                Whitesett,
                  NC 27377

              	 
	 	 
	 	 
	 	 
	 	 
	
                
                  /s/ Steve
                    Studdert                                              
                      

                

              	 
	
                Steve
                  Studdert, individually,

              	
                100,000

              
	
                and
                  as attorney-in-fact for the holders

              	 
	
                nCoat
                  Restricted Shares 

              	 
	
                423
                  Ranch Drive

              	 
	
                Alpine,
                  UT 84004

              	 
	 	 
	 	 
	 	 
	
                
                  /s/
                    Mark
                    Willes                                                    

                

              	 
	
                Mark
                  Willes, individually,

              	
                3,400,000

              
	
                and
                  as attorney-in-fact for the holders

              	 
	
                nCoat
                  Restricted Shares 

              	 
	
                3651
                  North 100 East

              	 
	
                Suite
                  300

              	 
	
                Provo,
                  Utah 84604

              	 

      

      

      

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      Exhibit
        SL

      

      

      SUITABILITY
        LETTER

      (TO
        BE
        COMPLETED BY EACH ACCEPTING NCOAT SHAREHOLDER)

      

      TO: Tylerstone
        Ventures Corporation

       

      I
        make
        the following representations with the intent that they may be relied on
        by
        Tylerstone Ventures Corporation (the "Company"), in determining my suitability
        as a purchaser of securities of the Company (the "Shares").

       

      2.  I
        have had the opportunity to ask questions of, and receive answers and
        information, from the officers of the Company and I deemed such information
        sufficient to make an investment decision on the Company.

       

      3.  I
        have such knowledge and experience in business and financial matters that
        I am
        capable of evaluating the Company, its business activities, and the risks
        and
        merits of this prospective investment, and I am
        not
        utilizing a purchaser representative (as defined in regulation D) in connection
        with the evaluation of such risks and merits, except as set forth in paragraph
        3.

       

      4.  I
        shall provide a separate written statement from each purchaser representative
        on
        the Purchaser Representative Acknowledgment form available from the Company
        in
        which is disclosed (i) the relationship of the purchaser representative with
        the
        Company, if any, which has existed at any time during the previous two years,
        and compensation received or to be received as a result of such relationship,
        and (ii) the education, experience, and knowledge in financial and business
        matters which enables the purchaser representative to evaluate the relative
        merits and risks of an investment in the Company.

       

      5.  The
        undersigned and the purchaser representatives listed above, if any, together
        have such knowledge and experience in financial and business matters that
        they
        are capable of evaluating the Company and the proposed activities thereof
        and
        the merits and risks of this prospective investment.

       

      6.  I
        have adequate means of providing for my current needs and possible personal
        contingencies and have no need in the foreseeable future for liquidity of
        an
        investment in the Company.

       

      7.  Instructions:
        Complete either (a) or (b) below, as applicable:

       

      (a)  FOR
        ACCREDITED INVESTORS.
        I
        confirm that I am an "accredited investor" as defined under rule 501 of
        regulation D promulgated under the Securities Act of 1933, as amended (the
        "Securities Act"), as checked below:

      

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

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      o Yes o No

       

      (ii)  Any
        private business development company as defined in section 302(a)(22) of
        the
        Investment Advisers Act of 1940;

       

      o Yes o No

       

      (iii)  Any
        organization described in section 501(c)(3) of the Internal Revenue Code,
        corporation, Massachusetts or similar business trust, or partnership, not
        formed
        for the specific purpose of acquiring the securities offered, with total
        assets
        in excess of $5,000,000;

       

      o Yes o No

       

      (iv)  Any
        director, executive officer, or general partner of the issuer of the securities
        being offered or sold, or any director, executive officer, or general partner
        of
        a general partner of that issuer;

       

      o Yes o No

       

      (v)  Any
        natural person whose individual net worth or joint net worth with that person's
        spouse, at the time of his or her purchase exceeds $1,000,000;

       

      o Yes o No

       

      For
        purposes of category (v), the term "net worth" means the excess of total
        assets
        over total liabilities. In computing net worth for the purposes of category
        (v)
        above, the undersigned's principal residence must be valued either at (A)
        cost,
        including the cost of improvements, net of current encumbrances upon the
        property or (B) the appraised value of the property as determined upon a
        written
        appraisal used by an institutional lender making a loan to the individual
        secured by the property, including the cost of subsequent improvements, net
        of
        current encumbrances upon the property.

       

      (vi)  Any
        natural person who had an individual income in excess of $200,000 in each
        of the
        two most recent years or joint income with that person's spouse in excess
        of
        $300,000 in each of those years and has a reasonable expectation of reaching
        the
        same income level in the current year;

       

      o Yes o No

       

      In
        determining income, the undersigned should add to his or her adjusted gross
        income any amounts attributable to tax exempt income received, losses claimed
        as
        a limited partner in any limited partnership, deductions claimed for depletion,
        contributions to an IRA or Keogh retirement plan, alimony payments, and any
        amount by which income from long-term capital gains has been reduced in arriving
        at adjusted gross income.

       

      (vii)  Any
        trust, with total assets in excess of $5,000,000, not formed for the specific
        purpose of acquiring the securities offered, whose purchase is directed by
        a
        sophisticated person as described in section 230.506(b)(2)(ii);
        and

       

      o Yes o No

       

      (viii)  Any
        entity in which all of the equity owners are accredited investors.

       

      o Yes o No

       

      (b)  FOR
        NONACCREDITED INVESTORS.
        I
        am
        not
        an
        accredited investor.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      The
        following information is being provided here in lieu of furnishing a personal
        financial statement.

       

      (i)  My
        net worth excluding principal residence, furnishings, and automobiles is
        at
        least _____ times the total investment I intend to make in the
        Company;

       

      (ii)  My
        annual disposable income, after excluding all of my personal and family living
        expenses and other cash requirements for current obligations, is such that
        the
        loss of my entire investment in the Company would not materially alter my
        standard of living;

       

      o Yes o No

       

      (iii)  Considering
        the foregoing and all other relevant factors in my financial and personal
        circumstances, I am able to bear the economic risk of an investment in the
        Company.

       

      o Yes o No

       

      7.  I
        have previously been advised that I would have an opportunity to review all
        the
        pertinent facts concerning the Company, and to obtain any additional information
        which I might request, to the extent possible or obtainable, without
        unreasonable effort and expense, in order to verify the accuracy of the
        information provided me.

       

      8.  I
        have personally communicated or been offered the opportunity to communicate
        with
        executive officers of the Company to discuss the business and financial affairs
        of the Company, its products and activities, and its plans for the future.
        I
        acknowledge that if I would like to further avail myself of the opportunity
        to
        ask additional questions of the Company, the Company will make arrangements
        for
        such an opportunity on request.

       

      9.  I
        have been advised that no accountant or attorney engaged by the Company is
        acting as my representative, accountant, or attorney.

       

      10.  I
        will hold title to my interest as follows:

       

      
        	o	
                 Community
                  Property

              	
                o

              	
                Separate
                  Property

              
	 	
                 

              	
                 

              	
                 

              
	o	
                 Joint
                  Tenants, with Right of Survivorship

              	
                o

              	
                Tenants
                  in Common

              
	 	
                 

              	
                 

              	
                 

              
	 	
                 

              	
                o

              	
                Other
                  (Single Person, Trust, Etc., Please Indicate.)

              
	 	
                 

              	
                 

              	
                 

              
	 	
                 

              	
                 

              	
                _________________________________

              

      

      

      

      

      

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      11.  I
        am a bona fide resident of the state of __________. The address below is
        my true
        and correct principal residence.

       

      DATED
        this ____ day of __________, 2007

       

      

      
        	
                
                  

                

                Name
                  (Please Print)

              	
                  

              	
                
                  

                  Name
                    of Joint Subscriber, If Any

                

              
	
              	
                  

              	
              
	
                  

              	
                  

              	
                  

              
	
                
                  
Signature

              	
                  

              	
                
                  

                

                Signature

              
	
              	
                 

              	
                 

              
	
                 

              	
                  

              	
                  

              
	
                
                  
Street
                  Address

              	
                  

              	
                
                  

                  Street
                    Address

                

              
	
              	
                  

              	
                 

              
	
                 

              	
                 

              	
                  

              
	
                
                  

                  City,
                    State, and Zip Code

                

              	
                  

              	
                
                  

                

                City,
                  State, and Zip Code

              
	
                 

              	
                  

              	
              

      

       

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      Exhibit
        IRL 

      INVESTMENT
        REPRESENTATION LETTER

      (TO
        BE
        SIGNED BY EACH ACCEPTING NCOAT SHAREHOLDER)

      

      Tylerstone
        Ventures Corporation 

       

      Re: Purchase
        of shares of Common Stock of Tylerstone Ventures Corporation

       

      Gentlemen:

       

      In
        connection with the acquisition by the undersigned of shares of Common Stock
        of
        Tylerstone Ventures Corporation (the “Securities”), the undersigned represents
        that the Securities are being acquired without a view to, or for, resale
        in
        connection with any distribution of such Securities or any interest therein
        without registration or other compliance under the Securities Act of 1933,
        as
        amended (the "Securities Act"), and that the undersigned has no direct or
        indirect participation in any such undertaking or in the underwriting of
        such an
        undertaking.

       

      The
        undersigned understands that the Securities have not been registered, but
        are
        being acquired by reason of a specific exemption under the Securities Act
        as
        well as under certain state statutes for transactions by an issuer not involving
        any public offering and that any disposition of the subject Securities may,
        under certain circumstances, be inconsistent with this exemption and may
        make
        the undersigned an "underwriter" within the meaning of the Securities Act.
        It is
        understood that the definition of an "underwriter" focuses on the concept
        of
        "distribution" and that any subsequent disposition of the subject Securities
        can
        only be effected in transactions which are not considered distributions.
        Generally, the term "distribution" is considered synonymous with "public
        offering" or any other offer or sale involving general solicitation or general
        advertising. Under present law, in determining whether a distribution occurs
        when securities are sold into the public market, under certain circumstances
        one
        must consider the availability of public information regarding the issuer,
        a
        holding period for the securities sufficient to assure that the persons desiring
        to sell the securities without registration first bear the economic risk
        of
        their investment, and a limitation on the number of securities which the
        stockholder is permitted to sell and on the manner of sale, thereby reducing
        the
        potential impact of the sale on the trading markets. These criteria are set
        forth specifically in rule 144 promulgated under the Securities Act. After
        one
        year from the date the Securities are fully paid for and the subscription
        is
        accepted by the issuer, all as calculated in accordance with rule 144(d),
        sales
        of the Securities in reliance on rule 144 can only be made in limited amounts
        in
        accordance with the terms and conditions of that rule. After two year from
        the
        date the Securities are fully paid for, as calculated in accordance with
        rule
        144(d), it can generally be sold without meeting these conditions provided
        the
        holder is not (and has not been for the preceding three months) an affiliate
        of
        the issuer.

       

      The
        undersigned acknowledges that the Securities must be held and may not be
        sold,
        transferred, or otherwise disposed of for value unless it is subsequently
        registered under the Securities Act or an exemption from such registration
        is
        available; the issuer is under no obligation to register the Securities under
        the Securities Act or under section 12 of the Securities Exchange Act of
        1934,
        as amended, except as may be expressly agreed to by it in writing; if rule
        144
        is available, and no assurance is given that it will be, initially only routine
        sales of such Securities in limited amounts can be made in reliance on rule
        144
        in accordance with the terms and conditions of that rule; the issuer is under
        no
        obligation to the undersigned to make rule 144 available, except as may be
        expressly agreed to by it in writing; in the event rule 144 is not available,
        compliance with regulation A or some other exemption may be required before
        the
        undersigned can sell, transfer, or otherwise dispose of such Securities without
        registration under the Securities Act; the issuer's registrar and transfer
        agent
        will maintain a stop transfer order against the registration of transfer
        of the
        Securities; and the certificate representing the convertible promissory notes
        and warrants composing the Securities will bear a legend in substantially
        the
        following form so restricting the sale of such Securities.

       

      THE
        SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
        THE
        SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ARE "RESTRICTED
        SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES
        ACT.
        THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR
        TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN EFFECTIVE
        REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

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

       

       

      

      

      
        	
                 

              	
                Very
                  truly yours,

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                Dated:
                  ________________________ 

              	 	
                ________________________________

                (Subscriber)

              
	 	 	
              
	
                 

              	
                 

              	
                 

              
	 	 	
                ________________________________

                (Joint
                  Subscriber)

              
	
                 

              	
                 

              	
              

      

      

      

      

      

       

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      EXHIBIT
        A

      

      ACCEPTING
        NCOAT SHAREHOLDERS

      

      
        	
                Name

              	
                Number
                  of Shares of nCoat, Inc., Common
                  Stock to be Tendered

              
	 	 
	 	 
	
                Terry
                  R. Holmes

              	
                2,500,000

              
	 	 
	
                Paul
                  S Clayson

              	
                2,500,000

              
	 	 
	
                Steve
                  Studdert

              	
                  
                  100,000

              
	 	 
	
                Mark
                  Willes

              	
                3,400,000

              

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      nCoat
        Schedules

      

      Exhibit
        NS1 - Copy of Articles of Incorporation and Amendments 

      

      Exhibit
        NS2 - Copy of nCoat, Inc. Bylaws

      

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

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      Tylerstone
        Schedules

      

      Exhibit
        TS1 - Copy of Articles of Incorporation and Amendments

      

      Exhibit
        TS2 - Copy of nCoat, Inc. Bylaws

      

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

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      23EXHIBIT 10.27

AGREEMENT

THIS AGREEMENT (the “Agreement”)
is made this 8th day of December 2006 by and between Thomas J.
Sukay (“Sukay”), Willow Financial Bancorp, Inc., a Pennsylvania corporation
(the “Company”), and Willow Financial Bank, a federally chartered savings bank
and wholly-owned subsidiary of the Company (the “Bank”).  The Company and the Bank may hereinafter be
referred to collectively as the “Companies”.

W I T N E S S E T H:

WHEREAS, the Boards of Directors
of the Companies previously have determined that it is in the Companies’ best
interest to reduce the size of their Boards or Directors; and

WHEREAS, Sukay serves as a
member of the Board of Directors of each of the Company and the Bank; and

WHEREAS, Sukay’s ability to
continue to devote the time and attention necessary in his capacity as a
Director of the Companies has become burdensome due to the professional demands
of Sukay’s business affairs as well as the extensive travel required in order
for Sukay to attend meetings at the Companies; and

WHEREAS, the parties believe it
is in their mutual best interest for Sukay to resign from the Boards of
Directors of the Companies;

NOW, THEREFORE, in consideration
of the mutual premises and covenants contained herein, and intending to be
legally bound, the parties agree as follows:

1.             Resignation
as a Director.  Effective as of the
date first above written, Sukay hereby resigns his positions as a director of
the Company, the Bank and any of their respective subsidiaries.

2.             Payment
to Sukay.  In recognition of his past
service as a director and his willingness to facilitate the efforts of the
Company and the Bank to reduce the size of their respective Boards, the Company
is paying to Sukay the amount of $56,193 in a lump sum by wire transfer of
immediately available funds, in full satisfaction of all obligations of the
Company and the Bank for Sukay’s services as a director.

3.             Stock Benefit Plans.  It is acknowledged that no additional
arrangements are being provided by the Company or the Bank to Sukay under the
Company’s 2005 Recognition and Retention Plan (the “RRP”) and that awards for
1,935 restricted shares of Company common stock previously made by the
Company to Sukay, none of which have vested or been earned, shall not
accelerate or be deemed earned and are intended to be forfeited in accordance
with the terms of the RRP as of the date hereof.  The parties hereto acknowledge and agree that
Sukay shall not participate in any of the Company’s RRP or stock option plans
subsequent to the date hereof.

4.             Indemnification.  The Company and the Bank agree to indemnify,
defend and hold Sukay harmless against any judicial or administrative
proceeding, or threatened proceeding, whether civil or criminal, to which Sukay
is a party or threatened to be made a party by reason of Sukay having served as
a director of the Company or the Bank or any subsidiary thereof, and to advance
expenses to Sukay in respect of any such proceeding or threatened proceeding,
to the fullest extent authorized by the articles of incorporation, charter,
bylaws or other governing instrument of the Company or the Bank, in each case
as in effect on the date of this

 

Agreement and regardless of any future amendment or
repeal of any of the foregoing, and applicable law and regulations.

5.             Confidentiality;
Non-Disparagement.

(a)           No disclosure of the contents of this
Agreement shall be made by either party to this Agreement without the prior
written consent of the other party; provided that such disclosure (including
disclosures contained in Company press releases and regulatory filings) may be
made as required in accordance with federal securities law and regulations.

(b)           Sukay agrees not to make, either
directly or indirectly, or cause to be made, either directly or indirectly, by
any other person or entity, any statement or comment, whether oral, written,
electronic or otherwise, or to take any other action which disparages or
criticizes the Company or the Bank, 
their present or former directors, officers, employees, management,
practices or services, or which disrupts or impairs or could disrupt or impair
the operations of the Company or the Bank, where such statements, comments or
action are based upon Sukay’s service as a director of the Company or the Bank
or knowledge gained as a result of such service.  The Company and the Bank agree not to make,
either directly or indirectly, or cause to be made, either directly or
indirectly, by any other person or entity, or permit to be made by any
director, officer, employee or representative of the either of them, any
statement or comment, whether oral, written, electronic or otherwise, or to
take any other action which disparages or criticizes Sukay where such
statements, comments or actions are based upon Sukay’s service as a director of
the Company or the Bank.

(c)           Promptly after execution of this
Agreement, the Company and the Bank shall issue a press release announcing
Sukay’s departure from the Company’s and Bank’s Boards of Directors, the form
of which previously has been reviewed, and agreed to, by Sukay.

6.             Release of the Company and Bank
and Related Parties.  For, and in
consideration of the commitments made herein by the Company and Bank, including
specifically the release in Section 7 below, Sukay, for himself and for his
heirs, successors and assigns, does hereby release completely and forever
discharge the Company and Bank and their respective subsidiaries, affiliates,
stockholders, attorneys, officers, directors, agents, employees, successors and
assigns, and any other party associated with the Company or the Bank (the “Released
Parties”), to the fullest extent permitted by applicable law, from any and all
claims, rights, demands, actions, liabilities, obligations, causes of action of
any and all kinds, nature and character whatsoever, known or unknown, in any
way connected with his service as a director of the Company or the Bank or
termination thereof.  Notwithstanding the
foregoing, Sukay does not release the Company or the Bank from its indemnification
obligations referenced in Section 4 hereof or from any claims arising out of
any breach of this Agreement.

7.             Release
of Sukay.  For, and in consideration
of the commitments made herein by Sukay, including specifically the release in
Section 6 above, the Company and the Bank, for themselves, and for their
respective successors and assigns do hereby release completely and forever
discharge Sukay and his heirs, successors and assigns, to the fullest extent
permitted by applicable law, from any and all claims, rights, demands, actions,
liabilities, obligations, causes of action of any kinds, nature and character
whatsoever, known or unknown, in any way connected with Sukay’s position as a
director of the Company or the Bank. Notwithstanding anything in the foregoing
to the contrary, the Company and the Bank do not release Sukay from claims
arising out of any breach of this Agreement.

8.             Amendment
and Waiver.  The terms of this
Agreement may not be modified other than in a writing signed by the
parties.  No term or condition of this
Agreement shall be deemed to have been waived, nor shall there be any estoppel
against enforcement of any provision of this Agreement, except by written

 2
 

 

instrument of the party charged with such waiver or
estoppel.  No such written waiver shall
be deemed a continuing waiver unless specifically stated therein, and each such
waiver shall operate only as to the specific term or condition for the future
or as to any act other than that specifically waived.

9.             Notices.  All notices, demands, consents or other
communication required or permitted hereunder shall be in writing and shall be
deemed to have been given when: (i) personally delivered, or (ii) sent postage
prepaid by registered or certified mail, return receipt requested, such receipt
showing delivery to have been made, or (iii) sent overnight by prepaid receipt
courier addressed as follows:

	
  If to Sukay:

  	
  Thomas J. Sukay

  
	
   

  	
  8735 Gleneagle Way

  
	
   

  	
  Naples, Florida 34120

  

 

If to the Company

	
  or the Bank:

  	
  Willow Grove Financial Bancorp, Inc.

  170 South Warner Road, Suite 300

  Wayne, Pennsylvania 19087

  
	
  Attention:

  	
  Donna M. Coughey

  President and Chief Executive Officer

  

 

10.           Entire Agreement.  This Agreement incorporates the entire
understanding among the parties relating to the subject matter hereof, recites
the sole consideration for the promises exchanged with respect to the subject
matter hereof.  In reaching this
Agreement, no party has relied upon any representation or promise except those
set forth herein.

11.           Invalid Provisions: If any
provision of this Agreement is held to be illegal, invalid, or unenforceable
under present or future laws effective during the term of this Agreement, such
provision shall be fully severable and this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
compromised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
the illegal, invalid or unenforceable provision or by its severance from this
Agreement.

12.           Bind and Inure.  This Agreement shall be binding upon and
inure to the benefit of the Company and the Bank and Sukay and their respective
heirs and/or successors and permitted assigns.

13.           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania,
except to the extent that applicable federal law preempts the laws of
Commonwealth of Pennsylvania.

 3
 

 

IN WITNESS WHEREOF, the Company
and the Bank have caused this Agreement to be executed by their duly authorized
representatives and Sukay has executed this Agreement, all as of the day and
year first above written.

WITNESSES:

	
  

  	
   

  	
  WILLOW FINANCIAL BANCORP, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Joseph T.
  Crowley

  	
   

  	
  By:

  	
   

  	
  /s/ Donna M. Coughey

  
	
  Joseph T.
  Crowley

  	
   

  	
   

  	
   

  	
  Donna M. Coughey

  
	
   

  	
   

  	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WILLOW FINANCIAL BANK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Joseph T.
  Crowley

  	
   

  	
  By:

  	
   

  	
  /s/ Donna M. Coughey

  
	
  Joseph T.
  Crowley

  	
   

  	
   

  	
   

  	
  Donna M. Coughey

  
	
   

  	
   

  	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Janice L.
  Sukay

  	
   

  	
   

  	
   

  	
  /s/ Thomas J. Sukay

  
	
  Janice L. Sukay

  	
   

  	
   

  	
   

  	
  Thomas J. Sukay

  

 

 4

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