Contract
THIS
WARRANT DOCUMENT REPLACES A WARRANT DOCUMENT BETWEEN ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ AND
S2
NEW YORK DESIGN CORP. THIS WARRANT WAS ASSUMED AND REISSUED BY S2 DESIGNS,
INC.
PURSUANT TO TERMS OF THE SECURITIES EXCHANGE AGREEMENT BETWEEN INCA DESIGNS,
INC. AND INCA NEW YORK DESIGN CORP. DATED MAY 21, 2007, MAKING THE ORIGINAL
INSTRUMENT NULL AND VOID. ALL TERMS CONTAINED HEREIN ARE THE SAME AS THE TERMS
IN THE ORIGINAL INSTRUMENT WITH THE EXCEPTION THAT THE NAME OF THE COMPANY
WAS
CHANGED TO INCA DESIGNS, INC. AND ALL TERMS OUTLINED THEREIN NOW RELATE TO
THE
COMMON STOCK OF INCA DESIGNS, INC.
NEITHER
THESE WARRANTS NOR THE COMMON STOCK ISSUABLE UPON EXERCISE OF THESE WARRANTS
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD,
PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR
SUCH SECURITIES UNDER THE ACT OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION
IS
AVAILABLE.
No.
3
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Warrants:
200,000
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INCA
DESIGNS, INC.
WARRANTS
INCA
DESIGNS, INC.,
a
Nevada corporation (“INCA”),
certifies that, for value received, ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇,
or
registered assigns (the “Holder”),
is
the owner of Two Hundred Thousand (200,000) Warrants of INCA
(the
“Warrants”).
Each
Warrant entitles the Holder to purchase from INCA at any time prior to the
Expiration Date (as defined below) one share of the common stock of INCA (the
“Common
Stock”)
for
$.50 per share (the “Exercise
Price”),
on
the terms and conditions hereinafter provided. The Exercise Price and the number
of shares of Common Stock purchasable upon exercise of each Warrant are subject
to adjustment as provided in this Certificate. The Warrants have been issued
as
part of an authorized class of 1,000,000 warrants of like tenor.
1. Expiration
Date; Exercise
1.1 Expiration
Date. The Warrants shall expire on October 31, 2009 (the “Expiration
Date”).
1.2 Manner
of Exercise. The Warrants are exercisable by delivery to INCA of the
following (the “Exercise
Documents”):
(a)
this Certificate (b) a written notice of election to exercise the Warrants;
and
(c) payment of the Exercise Price in cash or by check. Within three business
days following receipt of the foregoing, INCA shall execute and deliver to
the
Holder: (a) a certificate or certificates representing the aggregate number
of
shares of Common Stock purchased by the Holder, and (b) if less than all of
the
Warrants evidenced by this Certificate are exercised, a new certificate
evidencing the Warrants not so exercised.
1.3
Cashless
Exercise.
In
addition to the manner of exercise described in Section 1.2, the Holder shall
also have the right to convert, in whole or in part, this Warrant (the
“Conversion Right”) at any time prior to the expiration of the Exercise Period,
into shares of Common Stock in accordance with this Section 1.3. Upon exercise
of the Conversion Right, INCA shall deliver to the Holder (without payment
by
the Holder of the Warrant Price) that number of shares of Common Stock equal
to
the quotient obtained by dividing (x) the value of the portion of this Warrant
being converted at the time the Conversion Right is exercised (determined by
subtracting the Warrant Price for the portion of this Warrant being converted
(in effect immediately prior to the exercise of the Conversion Right) from
the
amount obtained by multiplying the number of shares of Common Stock issuable
upon the whole or partial exercise of this Warrant, as the case may be, by
the
Market Price immediately prior to the exercise of the Conversion Right) by
(y)
the Market Price of one share of Common Stock immediately prior to the exercise
of the Conversion Right.
The
Conversion Right may be exercised by the Holder, at any time or from time to
time, prior to the Expiration Date, on any business day by delivering a written
notice (the “Conversion Notice”) to INCA at its offices, exercising the
Conversion Right and specifying (i) the total number of shares of Common Stock
the Holder will purchase pursuant to the conversion and (ii) a place and date
not less than two (2) nor more than twenty (20) Business Days from the date
of
the Subscription Notice for the closing of such purchase.
At
any
closing under this Section 1.3, (i) the Holder will surrender this Warrant
and
(ii) INCA will deliver to the Holder a certificate or certificates for the
number of shares of Common Stock issuable upon such conversion. If this Warrant
shall have been converted only in part, INCA shall, at the time of delivery
of
said stock certificate or certificates, deliver to the Holder a new Warrant
evidencing the rights of the Holder to purchase the remaining shares of Common
Stock called for by this Warrant, which new Warrant shall in all other respects
be identical to this Warrant, or, at the request of the Holder, appropriate
notation may be made on this Warrant and the same returned to the Holder. INCA
shall pay all expenses, taxes and other charges payable in connection with
the
preparation, issue and delivery of such stock certificates and new Warrants,
except that, in case such stock certificates and/or new Warrants shall be
registered in a name or names other than the name of the Holder, funds
sufficient to pay all stock transfer taxes that are payable upon the issuance
of
such stock certificates or new Warrants shall be paid by the Holder at the
time
of delivering the notice of exercise mentioned above.
1.4
Warrant Exercise Limitation. Notwithstanding any other provision of this
Certificate, or the total number of shares of Common Stock otherwise available
for purchase by Holder hereunder, if as of the date of exercise INCA has a
class
of securities registered under Section 12 of the Securities Exchange Act of
1934, as amended, Holder may not exercise any Warrants under this Section 1
if
immediately following such exercise Holder would beneficially own 4.99% or
more
of the outstanding Common Stock of INCA. For this purpose, a representation
of
the Holder that following such exercise it would not beneficially own 4.99%
or
more of the outstanding Common Stock of INCA shall be conclusive and binding
upon INCA.
2. Adjustments
of Exercise Price and Number and Kind of Conversion Shares
2.1 In
the
event that INCA shall at any time hereafter (a) pay a dividend in Common Stock
or securities convertible into Common Stock; (b) subdivide or split its
outstanding Common Stock; (c) combine its outstanding Common Stock into a
smaller number of shares; then the number of shares to be issued immediately
after the occurrence of any such event shall be adjusted so that the Holder
thereafter may receive the number of shares of Common Stock it would have owned
immediately following such action if it had exercised the Warrants immediately
prior to such action and the Exercise Price shall be adjusted to reflect such
proportionate increases or decreases in the number of shares.
2.2 In
case
of any reclassification of the outstanding shares of Common Stock (other than
a
change covered by Section 2.1 hereof or a change which solely affects the par
value of such shares) or in the case of any merger or consolidation or merger
in
which INCA is not the continuing corporation and which results in any
reclassification or capital reorganization of the outstanding shares), the
Holder shall have the right thereafter (until the Expiration Date) to receive
upon the exercise hereof, for the same aggregate Exercise Price payable
hereunder immediately prior to such event, the kind and amount of shares of
stock or other securities or property receivable upon such reclassification,
capital reorganization, merger or consolidation, by a Holder of the number
of
shares of Common Stock obtainable upon the exercise of the Warrants immediately
prior to such event; and if any reclassification also results in a change in
shares covered by Section 2.1, then such adjustment shall be made pursuant
to both this Section 2.2 and Section 2.1 (without duplication). The
provisions of this Section 2.2 shall similarly apply to successive
reclassifications, capital reorganizations and mergers or consolidations, sales
or other transfers.
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3. Reservation
of Shares. INCA
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, such number of shares of Common Stock as shall from
time
to time be issuable upon exercise of the Warrants. If at any time the number
of
authorized but unissued shares of Common Stock shall not be sufficient to permit
the exercise of the Warrants, INCA shall promptly seek such corporate action
as
may necessary to increase its authorized but unissued shares of Common Stock
to
such number of shares as shall be sufficient for such purpose.
4. Certificate
as to Adjustments. In
each
case of any adjustment in the Exercise Price, or number or type of shares
issuable upon exercise of these Warrants, the Chief Financial Officer of INCA
shall compute such adjustment in accordance with the terms of these Warrants
and
prepare a certificate setting forth such adjustment and showing in detail the
facts upon which such adjustment is based, including a statement of the adjusted
Exercise Price. INCA shall promptly send (by facsimile and by either first
class
mail, postage prepaid or overnight delivery) a copy of each such certificate
to
the Holder.
5. Loss
or Mutilation. Upon
receipt of evidence reasonably satisfactory to INCA of the ownership of and
the
loss, theft, destruction or mutilation of this Certificate, and of indemnity
reasonably satisfactory to it, and (in the case of mutilation) upon surrender
and cancellation of these Warrants, INCA will execute and deliver in lieu
thereof a new Certificate of like tenor as the lost, stolen, destroyed or
mutilated Certificate.
6. Representations
and Warranties of INCA. INCA
hereby represents and warrants to Holder that:
6.1 Due
Authorization. All corporate action on the part of INCA, its officers,
directors and shareholders necessary for (a) the authorization, execution and
delivery of, and the performance of all obligations of INCA under, these
Warrants, and (b) the authorization, issuance, reservation for issuance and
delivery of all of the Common Stock issuable upon exercise of these Warrants,
has been duly taken. These Warrants constitute a valid and binding obligation
of
INCA enforceable in accordance with their terms, subject, as to enforcement
of
remedies, to applicable bankruptcy, insolvency, moratorium, reorganization
and
similar laws affecting creditors’ rights generally and to general equitable
principles.
6.2 Organization.
INCA is a corporation duly organized, validly existing and in good standing
under the laws of the State referenced in the first paragraph of this
Certificate and has all requisite corporate power to own, lease and operate
its
property and to carry on its business as now being conducted and as currently
proposed to be conducted.
6.3 Valid
Issuance of Stock. Any shares of Common Stock issued upon exercise of these
Warrants will be duly and validly issued, fully paid and
non-assessable.
6.4 Governmental
Consents. All consents, approvals, orders, authorizations or registrations,
qualifications, declarations or filings with any federal or state governmental
authority on the part of INCA required in connection with the consummation
of
the transactions contemplated herein have been obtained.
7. Representations
and Warranties of Holder.
Holder
hereby represents and warrants to INCA that:
7.1 Holder
is
acquiring the Warrants for its own account, for investment purposes
only.
7.2 Holder
understands that an investment in the Warrants involves a high degree of risk,
and Holder has the financial ability to bear the economic risk of this
investment in the Warrants, including a complete loss of such investment. Holder
has adequate means for providing for its current financial needs and has no
need
for liquidity with respect to this investment.
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7.3 Holder
has such knowledge and experience in financial and business matters that it
is
capable of evaluating the merits and risks of an investment in the Warrants
and
in protecting its own interest in connection with this transaction.
7.4 Holder
understands that the Warrants have not been registered under the Securities
Act
or under any state securities laws. Holder is familiar with the provisions
of
the Securities Act and Rule 144 thereunder and understands that the restrictions
on transfer on the Warrants may result in Holder being required to hold the
Warrants for an indefinite period of time.
7.5 Holder
agrees not to sell, transfer, assign, gift, create a security interest in,
or
otherwise dispose of, with or without consideration (collectively, “Transfer”)
any of
the Warrants except pursuant to an effective registration statement under the
Securities Act or an exemption from registration. As a further condition to
any
such Transfer, except in the event that such Transfer is made pursuant to an
effective registration statement under the Securities Act, if in the reasonable
opinion of counsel to INCA any Transfer of the Warrants by the contemplated
transferee thereof would not be exempt from the registration and prospectus
delivery requirements of the Securities Act, INCA may require the contemplated
transferee to furnish INCA with an investment letter setting forth such
information and agreements as may be reasonably requested by INCA to ensure
compliance by such transferee with the Securities Act.
8. Notices
of Record Date.
In
the
event:
8.1 INCA
shall take a record of the holders of its Common Stock (or other stock or
securities at the time receivable upon the exercise of these Warrants), for
the
purpose of entitling them to receive any dividend or other distribution, or
any
right to subscribe for or purchase any shares of stock of any class or any
other
securities or to receive any other right; or
8.2 of
any
consolidation or merger of INCA with or into another corporation, any capital
reorganization of INCA, any reclassification of the capital stock of INCA,
or
any conveyance of all or substantially all of the assets of INCA to another
corporation in which holders of INCA’s stock are to receive stock, securities or
property of another corporation; or
8.3 of
any
voluntary dissolution, liquidation or winding-up of INCA; or
8.4 of
any
redemption or conversion of all outstanding Common Stock;
then,
and
in each such case, INCA will mail or cause to be mailed to the Holder a notice
specifying, as the case may be, (a) the date on which a record is to be taken
for the purpose of such dividend, distribution or right, or (b) the date on
which such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation, winding-up, redemption or conversion is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock (or such stock or securities as at the time are receivable upon the
exercise of these Warrants), shall be entitled to exchange their shares of
Common Stock (or such other stock or securities), for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up. INCA shall use
all
reasonable efforts to ensure such notice shall be delivered at least 5 days
prior to the date therein specified.
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9.Registration
Rights.
9.1
Piggyback
Registration. If, at any time after the original issuance of this Warrant
and prior to the Expiration Date, INCA shall determine to register any Common
Stock under the Securities Act for sale in connection with a public offering
of
Common Stock (other than pursuant to an employee benefit plan or a merger,
acquisition or similar transaction), INCA will give written notice thereof
to
Holder and will include in such Registration Statement any of the Registrable
Shares which Holder may request be included (“Included
Shares”)
by a
writing delivered to INCA within 15 days after the notice given by INCA to
Holder; provided, however, that if the offering is to be firmly underwritten,
and the representative of the underwriters of the offering refuse in writing
to
include in the offering all of the shares of Common Stock requested by INCA
and
others, the shares to be included shall be allocated first to INCA and any
shareholder who initiated such Registration and then among the others based
on
the respective number of shares of Common Stock held by such persons. If INCA
decides not to, and does not, file a Registration Statement with respect to
such
Registration, or after filing determines to withdraw the same before the
effective date thereof, INCA will promptly so inform Holder, and INCA will
not
be obligated to complete the registration of the Included Shares included
therein.
9.2
Certain
Covenants. In connection with any Registration:
9.2.1 INCA
shall take all lawful action such that the Registration Statement, any amendment
thereto and the prospectus forming a part thereof does not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. Upon becoming aware
of
the occurrence of any event or the discovery of any facts during the
Registration Period that make any statement of a material fact made in the
Registration Statement or the related prospectus untrue in any material respect
or which material fact is omitted from the Registration Statement or related
prospectus that requires the making of any changes in the Registration Statement
or related prospectus so that it will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they are made, not misleading
(taking into account any prior amendments or supplements), INCA shall promptly
notify Holder, and, as soon as reasonably practicable prepare (but in no event
more than five business days in the case of a supplement or seven business
days
in the case of a post-effective amendment) and file with the SEC a supplement
or
post-effective amendment to the Registration Statement or the related prospectus
or file any other required document so that, as thereafter delivered to a
purchaser of Shares from Holder, such prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make
the statements therein, in light of the circumstances under which they were
made, not misleading. INCA shall use its reasonable best efforts to keep the
Registration Statement effective at all times during the period continuing
until
the earliest of (i) the date that is nine months after the last day of the
calendar month following the month in which the Registration Statement is
declared effective, (ii) the date when the Holder may sell all Registrable
Securities under Rule 144 without volume or other restrictions or limits or
(iii) the date the Holder no longer owns any of the Registrable
Securities,
9.2.2 At
least
three business days prior to the filing with the SEC of the Registration
Statement (or any amendment thereto) or the prospectus forming a part thereof
(or any supplement thereto), INCA shall provide draft copies thereof to Holder
and shall consider incorporating into such documents such comments as Holder
(and its counsel) may propose to be incorporated therein. Notwithstanding the
foregoing, no prospectus supplement, the form of which has previously been
provided to Holder, need be delivered in draft form to Holder.
9.2.3 INCA
shall promptly notify Holder upon the occurrence of any of the following events
in respect of the Registration Statement or the prospectus forming a part
thereof: (i) the receipt of any request for additional information from the
SEC
or any other federal or state governmental authority, the response to which
would require any amendments or supplements to the Registration Statement or
related prospectus; (ii) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose;
or
(iii) the receipt of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Shares for sale
in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose.
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9.2.4 INCA
shall furnish to Holder with respect to the Included Shares registered under
the
Registration Statement (and to each underwriter, if any, of such Shares) such
number of copies of prospectuses and such other documents as Holder may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Included Shares by Holder pursuant to the Registration
Statement.
9.2.5 In
connection with any registration pursuant to Section 9.2, INCA shall file or
cause to be filed such documents as are required to be filed by INCA for normal
Blue Sky clearance in states specified in writing by Holder; provided,
however,
that
INCA shall not be required to qualify to do business or consent to service
of
process in any jurisdiction in which it is not now so qualified or has not
so
consented.
9.2.6 INCA
shall bear and pay all expenses incurred by it and Holder (other than
underwriting discounts, brokerage fees and commissions and fees and expenses
of
more than one law firm) in connection with the registration of the Shares
pursuant to the Registration Statement.
9.2.7 As
a
condition to including Registrable Shares in a Registration Statement, Holder
must provide to INCA such information regarding itself, the Registrable Shares
held by it and the intended method of distribution of such Shares as shall
be
required to effect the registration of the Registrable Shares and, if the
offering is being underwritten, Holder must provide such powers of attorney,
indemnities and other documents as may be reasonably requested by the managing
underwriter.
9.2.8 Following
the effectiveness of the Registration Statement, upon receipt from INCA of
a
notice that the Registration Statement contains an untrue statement of material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, Holder will immediately discontinue
disposition of Included Shares pursuant to the Registration Statement until
INCA
notifies Holder that it may resume sales of Included Shares and, if necessary,
provides to Holder copies of the supplemental or amended prospectus.
9.3
Rule
144. With a view to making available to Holder the benefits of Rule 144,
INCA agrees, during the period from October 30, 2007 until October 31, 2009,
unless the shares issuable to the Holder may be sold pursuant to an effective
Registration Statement, to:
9.3.1 comply
with the provisions of paragraph (c)(1) of Rule 144; and
9.3.2 file
with
the SEC in a timely manner all reports and other documents required to be filed
by INCA pursuant to Section 13 or 15(d) under the Exchange Act; and, if at
any
time it is not required to file such reports but in the past had been required
to or did file such reports, it will, upon the request of a Holder, make
available other information as required by, and so long as necessary to permit
sales of its Shares pursuant to, Rule 144.
9.4
INCA
Indemnification. INCA agrees to indemnify and hold harmless Holder, and its
officers, directors and agents, and each person, if any, who controls Holder
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities caused by (i) any violation or alleged violation by INCA of the
Securities Act, Exchange Act, any state securities laws or any rule or
regulation promulgated under the Securities Act, Exchange Act or any state
securities laws, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating
to
the Included Shares (as amended or supplemented if INCA shall have furnished
any
amendments or supplements thereto) or any preliminary prospectus, or (iii)
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based
upon
information furnished in writing to INCA by Holder or on Holder’s behalf
expressly for use therein.
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9.5
Holder
Indemnification. Holder agrees to indemnify and hold harmless INCA, its
officers, directors and agents and each person, if any, who controls INCA within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from INCA to Holder,
but only with respect to information furnished in writing by Holder or on
Holder’s behalf expressly for use in any registration statement or prospectus
relating to the Registrable Shares, or any amendment or supplement thereto,
or
any preliminary prospectus.
9.6
Indemnification
Procedures. In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Section 9, such person (an
“Indemnified
Party”)
shall
promptly notify the person against whom such indemnity may be sought (the
“Indemnifying
Party”)
in
writing and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Party,
and
shall assume the payment of all fees and expenses; provided that the failure
of
any Indemnified Party so to notify the Indemnifying Party shall not relieve
the
Indemnifying Party of its obligations hereunder except to the extent (and only
to the extent that) that the Indemnifying Party is materially prejudiced by
such
failure to notify. In any such proceeding, any Indemnified Party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall
be at the expense of such Indemnified Party unless (i) the Indemnifying Party
and the Indemnified Party shall have mutually agreed to the retention of such
counsel or (ii) in the reasonable judgment of such Indemnified Party
representation of both parties by the same counsel would be inappropriate due
to
actual or potential differing interests between them. It is understood that
the
Indemnifying Party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all such Indemnified Parties (including in the case
of
Holder, all of its officers, directors and controlling persons) and that all
such fees and expenses shall be reimbursed as they are incurred. In the case
of
any such separate firm for the Indemnified Parties, the Indemnified Parties
shall designate such firm in writing to the Indemnifying Party. The Indemnifying
Party shall not be liable for any settlement of any proceeding effected without
its written consent (which consent shall not be unreasonably withheld or
delayed), but if settled with such consent, or if there be a final judgment
for
the plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any loss or liability (to the extent stated
above) by reason of such settlement or judgment. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes
an
unconditional release of such Indemnified Party from all liability arising
out
of such proceeding.
9.7
Contribution.
To the extent any indemnification by an Indemnifying Party is prohibited or
limited by law, the Indemnifying Party agrees to make the maximum contribution
with respect to any amounts for which, he, she or it would otherwise be liable
under this Section 9.6 to the fullest extent permitted by law; provided,
however, that (i) no contribution shall be made under circumstances where a
party would not have been liable for indemnification under this Section 9.6
and
(ii) no seller of Registrable Securities guilty of fraudulent misrepresentation
(within the meaning used in the Securities Act) shall be entitled to
contribution from any party who was not guilty of such fraudulent
misrepresentation.
10.
Nontransferability.
Holder
may not sell or transfer any Warrants to any person without registration under
the Securities Act or providing an opinion of counsel acceptable to the Company
that such transfer may lawfully be made without such registration. Any such
purported transfer shall not be effective as between such purported transferee
and INCA.
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11. Severability.
If
any
term, provision, covenant or restriction of these Warrants is held by a court
of
competent jurisdiction to be invalid, void or unenforceable, the remainder
of
the terms, provisions, covenants and restrictions of these Warrants shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
12. Notices.
All
notices, requests, consents and other communications required hereunder shall
be
in writing and shall be effective when delivered or, if delivered by registered
or certified mail, postage prepaid, return receipt requested, shall be effective
on the third day following deposit in United States mail: to the Holder, at
the
Holder’s address of record in the Company’s warrant register; and if addressed
to INCA, at INCA New York Design Corp., ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other address as INCA may designate
in
writing.
13. No
Rights as Shareholder. The
Holder shall have no rights as a shareholder of INCA with respect to the shares
issuable upon exercise of the Warrants until the receipt by INCA of all of
the
Exercise Documents.
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By:
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/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇▇, President
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EXHIBIT
“A”
NOTICE
OF EXERCISE
(To
be signed only upon exercise of the Warrants)
To: INCA
Designs, Inc.
The
undersigned hereby elects to purchase shares of Common Stock (the “Warrant
Shares”)
of
INCA Designs, Inc. (“INCA”),
pursuant to the terms of the enclosed warrant certificate (the “Certificate”).
The
undersigned tenders herewith payment of the exercise price pursuant to the
terms
of the Certificate.
The
undersigned hereby represents and warrants to, and agrees with, INCA as follows:
1. Holder
is
acquiring the Warrant Shares for its own account, for investment purposes
only.
2. Holder
understands that an investment in the Warrant Shares involves a high degree
of
risk, and Holder has the financial ability to bear the economic risk of this
investment in the Warrant Shares, including a complete loss of such investment.
Holder has adequate means for providing for its current financial needs and
has
no need for liquidity with respect to this investment.
3. Holder
has such knowledge and experience in financial and business matters that it
is
capable of evaluating the merits and risks of an investment in the Warrant
Shares and in protecting its own interest in connection with this
transaction.
4. Holder
understands that the Warrant Shares have not been registered under the
Securities Act or under any state securities laws. Holder is familiar with
the
provisions of the Securities Act and Rule 144 thereunder and understands that
the restrictions on transfer on the Warrant Shares may result in Holder being
required to hold the Warrant Shares for an indefinite period of
time.
5. Holder
agrees not to sell, transfer, assign, gift, create a security interest in,
or
otherwise dispose of, with or without consideration (collectively, “Transfer”)
any of
the Warrant Shares except pursuant to an effective registration statement under
the Securities Act or an exemption from registration. As a further condition
to
any such Transfer, except in the event that such Transfer is made pursuant
to an
effective registration statement under the Securities Act, if in the reasonable
opinion of counsel to INCA any Transfer of the Warrant Shares by the
contemplated transferee thereof would not be exempt from the registration and
prospectus delivery requirements of the Securities Act, INCA may require the
contemplated transferee to furnish INCA with an investment letter setting forth
such information and agreements as may be reasonably requested by INCA to ensure
compliance by such transferee with the Securities Act.
Each
certificate evidencing the Warrant Shares will bear the following
legend:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS AND
MAY NOT BE EXERCISED, SOLD, PLEDGED OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR UNLESS
AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
6. Immediately
following this exercise of Warrants, if as of the date of exercise INCA has
a
class of securities registered under Section 12 of the Securities Exchange
Act
of 1934, as amended, the undersigned will not beneficially own 4.99% or more
of
the then outstanding Common Stock of INCA (based on the number of shares
outstanding set forth in the most recent periodic report filed by INCA with
the
Securities and Exchange Commission and any additional shares which have been
issued since that date of which Holder is aware have been issued).
Number
of
Warrants Exercised: ______________
Dated:
____________________
___________________________________________
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