CONVERTIBLE
      DEBT AGREEMENT

     

     

    This
      Convertible
      Debt Agreement
      (“Agreement”),
      dated
      as of March 27, 2006 (the “Effective
      Date”),
      is
      entered into by and among Nayna
      Networks, Inc.,
      a
      Nevada
      corporation
      (“Nayna”)
      Nayna
      Networks, Inc,
      a
      Delaware corporation and wholly owned subsidiary of Nayna, (“Nayna
      Delaware”)
      and
____________
      (“Investor”)
      and
      documents an oral agreement between Nayna Delaware and the Investor on or about
      the date on which Investor entered into the Subscription Agreement by and
      between Investor and Nayna Delaware. 

     

    Whereas: Investor
      made an investment in Nayna Delaware in contemplation of a merger of Nayna
      Delaware into a public shell corporation (the “Reverse
      Merger”).
      

    


    Whereas:
      At
      the
      time of the investment, the agreement between the Investor and Nayna Delaware
      was that the funds would be held as convertible debt and later converted into
      shares of the parent corporation at a conversion price of $1.00 per share
      following the closing of the Reverse Merger. 

    


    Whereas:
      As
      drafted the investment documents executed by the Investor and Nayna Delaware
      reflect the purchase of shares in Nayna Delaware, instead of the actual
      agreement between the parties to hold the investment as convertible debt and
      to
      later convert the funds into shares of the parent corporation following
      assumption of such debt by the parent upon the consummation of the Reverse
      Merger. 

    


    Whereas:
      If
      the
      funds delivered by the Investor were used to purchase shares of Nayna Delaware,
      which were subsequently converted into shares of Nayna as a result of the
      Reverse Merger, the Investor would have received only approximately 19% of
      the
      shares which Nayna Delaware and the Investor believed the Investor was entitled
      to purchase. 

    


    Whereas:
      Neither
      Nayna nor Nayna Delaware has issued any shares of their respective capital
      stock
      to the Investor. 

    


    Whereas:
      Nayna
      and
      the Investor desire to clarify their understanding of the investment made by
      the
      Investor.

     

    Now,
      therefore,
      in
      consideration of the foregoing premises and the mutual covenants contained
      in
      this Agreement, the parties agree as follows:

     

    1. Acknowledgement
      of Convertible Debt.
      Nayna,
      Nayna Delaware and Investor each hereby acknowledges and agrees that the funds
      delivered by Investor in connection with the Subscription Agreement by and
      between Nayna Delaware and the Investor (the “Subscription
      Agreement”)
      were
      intended to be held in the form of convertible debt to be converted into shares
      of a public parent corporation following the completion of the Reverse Merger
      at
      a conversion price of $1.00 per share. 

    

      
        
          (2) 

           

        

        
           

          
            

          

        

        
           

          (b) 

        

      

    

     

    2. Conversion
      of Convertible Debt.
      Investor hereby agrees to convert all such convertible debt held by Investor
      at
      a conversion price of $1.00 per share into _____________ shares of Nayna common
      stock effective as of the date of this Agreement. 

     

    3. 144
      Acknowledgement.
      Nayna
      acknowledges that, because the investment has been held as convertible debt,
      for
      purposes of sales under Rule 144 of the Securities Act of 1933, as amended,
      the
      date of acquisition of Nayna stock obtained upon conversion of the convertible
      debt hereunder will tack back to April 1, 2005, the date the convertible debt
      was assumed by Nayna upon the closing of the Reverse Merger. 

    


    4. Subscription
      Agreement and Registration Rights Agreements.
      Investor, Nayna and Nayna Delaware each hereby agrees and acknowledges that
      the
      Subscription Agreement and the related Registration Rights Agreement by and
      between Nayna Delaware and the Investor (the “Registration
      Rights Agreement”)
      are
      hereby terminated and cancelled in all respects, and Investor, Nayna and Nayna
      Delaware shall have no further obligation, duty or liability under the
      Subscription Agreement or the Registration Rights Agreement.

    


    5. Release.
      

    


    (a) Investor,
      for itself and its employees, shareholders, officers, directors,
      representatives, heirs, successors and assigns and all other persons acting
      on
      behalf of them or claiming under them, do hereby forever release, acquit and
      discharge Nayna, its affiliates and their respective employees, shareholders,
      officers, directors, representatives, heirs, successors and assigns
      (collectively referred to herein as the “Nayna
      Released Parties”)
      from
      any and all lawsuits, liabilities, actions, causes of action, claims, demands,
      damages, costs and debts of any kind whatsoever, both at law and in equity,
      whether known or unknown, which Investor has or may have against the Nayna
      Released Parties based on acts or omissions occurring up to and including the
      date of this Agreement, arising out of the Subscription Agreement, the related
      Registration Rights Agreement and any other acts of omissions of any nature
      whatsoever, including, without limitation, the failure to issue the stock
      contemplated by the Subscription Agreement. Nothing herein shall constitute:
      (i)
      a release, discharge or waiver of the rights of Investor to enforce this
      Agreement; or (ii) a release or waiver of Investor’s claims against any other
      person or entity.

    


    (b) Investor
      represents
      to Nayna and its affiliates that, as of the date of execution of this Agreement,
      Investor has not filed with any agency or court any complaints or lawsuits
      against any of the Nayna Released Parties. Investor agrees that it will not,
      directly or indirectly, institute, be a party to, or participate in, any action,
      lawsuit or administrative proceeding against any of the Nayna Released Parties
      arising from any claim of any type or nature either occurring before or existing
      as of the date of execution of this Agreement, except as required by law;
      provided, however, that nothing contained in this Agreement will be construed
      to
      prohibit an action for breach of the Agreement itself. Investor agrees to
      indemnify the Nayna Released Parties from all claims, costs and expenses,
      including all attorneys' fees, arising out of any breach of this Agreement
      by
      Investor or any misrepresentation of fact made by Investor which is contained
      in
      or made the basis of this Agreement. Investor agrees to execute, at the request
      of either Nayna or its affiliates, such additional waivers, releases,
      indemnities or other instruments as either Nayna or its affiliates will
      reasonably deem necessary to effectuate the provisions of this
      Agreement.

    

      
        
          (2) 

           

        

        
           

          
            

          

        

        
           

          (b) 

        

      

    

     

    
      	 	
              6.

            	
              Miscellaneous.

            


    

    


    6.1 Governing
      Law; Jurisdiction. This
      Agreement, and all disputes arising out of or relating to this Agreement, shall
      be governed by, and construed and interpreted in accordance with, the laws
      of
      the State of California, without regard to conflicts of laws principles of
      California or any other jurisdiction. 

    


    6.2 Modification.
      No
      amendment or modification of any provision of this Agreement shall be effective
      unless in writing signed by both parties. No provision of this Agreement shall
      be varied, contradicted or explained by any oral agreement, course of dealing
      or
      performance or any other matter not set forth in an agreement in writing and
      signed by both parties.

    


    6.3 Severability.
      If any
      provision of this Agreement should be held invalid, illegal or unenforceable
      in
      any jurisdiction, the parties shall negotiate in good faith a valid, legal
      and
      enforceable substitute provision that most nearly reflects the original intent
      of the parties and all other provisions hereof shall remain in full force and
      effect in such jurisdiction and shall be liberally construed in order to carry
      out the intentions of the parties hereto as nearly as may be possible. Such
      invalidity, illegality or unenforceability shall not affect the validity,
      legality or enforceability of such provision in any other jurisdiction.


    


    6.4 Entire
      Agreement.
      The
      parties acknowledge that this Agreement sets forth the entire agreement and
      understanding of the parties with respect to the subject matter hereof, and
      supersedes all prior and contemporaneous discussions, agreements and writings
      in
      respect hereto. 

    


    6.5 Counterparts.
      This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original, but both of which together shall constitute one and the same
      instrument.

     

     


    
      
        (2) 

         

      

      
         

        
          

        

      

      
         

        (b) 

      

    


    IN
      WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
      duly authorized representatives, and it will be effective as of the date first
      above written. 

     

    
      	
              NAYNA
                NETWORKS, INC., a Nevada corporation

               

               

               

            	
              INVESTOR

            
	
              By:     

              Name:
                Naveen S. Bisht

              Title:
                President and CEO

            	
              By:       

              Name:     


              Title:      
                

            
	 	 
	
              NAYNA
                NETWORKS, INC., a Delaware corporation

               

               

               

            	
               

               

               

            
	
              By:     


              Name:
                Naveen S. Bisht

              Title:
                President and CEO

            	 


    

    


      
        
          (2)