Investor:
      _____________

    Amount:
      _____________

    


    THIS
      SECURITIES PURCHASE AGREEMENT REPLACES A SECURITIES PURCHSE AGREEMENT BETWEEN
      _______________ AND S2 NEW YORK DESIGN CORP. 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. 

    


    SECURITIES
      PURCHASE AGREEMENT


    


    SECURITIES
      PURCHASE AGREEMENT dated as of ______________ (the “Agreement”),
      between INCA Designs, Inc., a Nevada corporation (the “Company”),
      and
      ______________, (the “Investor”).

    


    WHEREAS,
      the
      Company is offering up to $____________ aggregate principal amount, __% notes
      due __________________ (the “Notes”),
      without discount, and __________ _____-year warrants (the “Warrants”)
      to
      purchase shares of the Company’s common stock, $.0001 par value (“Common
      Stock”).
      

    


    WHEREAS,
      each
      $100.00 principal amount is offered together with two hundred (200)
      Warrants.

    


    WHEREAS,
      the
      parties desire that, upon the terms and subject to the conditions contained
      herein, the Company shall issue and sell to the Investor, and the Investor
      shall
      purchase from the Company (i) the principal amount of the Notes set forth on
      the
      signature page hereto and (ii) the number of Warrants determined by dividing
      such principal amount by $100 and multiplying by 100.

     

    WHEREAS,
      such
      investments will be made in reliance upon the provisions of Section 4(2)
      (“Section
      4(2)”)
      and/or
      Section 4(6) (“Section
      4(6)”)
      of the
      United States Securities Act of 1933, as amended, and/or Regulation D
(“Regulation
      D”)
      and the
      other rules and regulations promulgated thereunder (the “Securities
      Act”),
      and/or
      upon such other exemption from the registration requirements of the Securities
      Act as may be available with respect to any or all of the investments in
      securities to be made hereunder.

     

    NOW,
      THEREFORE,
      the
      parties hereto agree as follows:

    


    ARTICLE
      I

    


    Certain
      Definitions

    


    In
      addition to the definitions set forth in the text of this Agreement, the
      following capitalized terms shall have the meanings ascribed to them
      below:

    


    “Capital
      Shares”
      shall
      mean the Common Stock and any shares of any other class of common stock, whether
      now or hereafter authorized, having the right to participate in the distribution
      of earnings and assets of the Company.

    


    “Closing”
      shall
      mean each closing of the purchase and sale of the Notes and Warrants pursuant
      to
      Section 2.1.

    


    “Closing
      Date”
      shall
      mean each date on which (x) all conditions to Closing have been satisfied or
      waived as provided in Section 2.1(b) hereof and (y) a Closing shall have
      occurred.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Common
      Stock”
      shall
      mean the Company’s common stock, $.0001 par value per share.

    


    “Damages”
      shall
      mean any loss, claim, damage, judgment, penalty, deficiency, liability, costs
      or
      expenses (including, without limitation, reasonable attorneys’ fees and
      disbursements and reasonable costs and expenses of expert witnesses and
      investigation).

    


    “Disclosure
      Schedule”
      shall
      mean the written disclosure schedule delivered on or prior to the date hereof
      by
      the Company to the Investor that is arranged in paragraphs corresponding to
      the
      numbered and lettered paragraphs contained in this Agreement.

    


    “Environmental
      Laws”
      shall
      mean foreign, Federal, state and local laws and regulations relating to the
      protection of human health and safety, the environment, hazardous or toxic
      substances or wastes, pollutants or contaminants.

    


    “Exchange
      Act”
      shall
      mean the Securities Exchange Act of 1934, as amended, and the rules and
      regulations promulgated thereunder.

    


    “Finders”
      shall
      mean one or more finders that are either registered broker-dealers or, if the
      Investor is not a U.S. Person, otherwise qualified to accept a payment for
      introducing the Investor to the Company. 

    


    “GAAP”
      shall
      mean United States generally accepted accounting principles as shall be in
      effect from time to time.

    


    “Intellectual
      Property”
      shall
      mean all trademarks, trade names, service marks, service mark registrations,
      service names, patents, patent rights, copyrights, inventions, licenses,
      approvals, governmental authorizations, trade secrets, and other similar
      proprietary rights, information and knowledge.

    


    “Legend”
      shall
      mean the legend set forth in Section 9.1.

    


    “Material
      Adverse Effect”
      shall
      mean any effect on the business, operations, properties, prospects, stock price
      or financial condition of the Company that is material and adverse to the
      Company and its subsidiaries and affiliates, taken as a whole, or any condition,
      circumstance, or situation that would prohibit or otherwise interfere with
      the
      ability of the Company to enter into and perform any of its obligations under
      any of the Transaction Documents in any material respect.

    


    “Notes”
      shall
      mean the Company’s 24% Notes due September 30, 2007, substantially in the form
      of Exhibit
      A
      hereto.

    


    “Outstanding,”
      when
      used with reference to any Capital Shares, shall mean, at any date as of which
      the number of such Capital Shares is to be determined, all issued and
      outstanding Capital Shares, and shall include all such Capital Shares issuable
      in respect of outstanding scrip or any certificates representing fractional
      interests in such Capital Shares; provided,
      however,
      that
“Outstanding” shall not mean any such Capital Shares then directly or indirectly
      owned or held by or for the account of the Company.

    


    “Person”
      shall
      mean an individual, a corporation, a partnership, a limited liability company,
      an association, a trust or other entity or organization, including a government
      or political subdivision or an agency or instrumentality thereof.

    


    “Principal
      Amount”
      shall
      mean, at any time, the unpaid principal balance of one or more
      Notes.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Principal
      Market”
      shall
      mean the American Stock Exchange, the New York Stock Exchange, the NASDAQ
      National Market, or the NASDAQ SmallCap Market, whichever is at the time the
      principal trading exchange or market for the Common Stock, based upon share
      volume, or if the Common Stock is not traded on an exchange or The Nasdaq Stock
      Market, the OTC Bulletin Board or the Pink Sheets.

    


    “Purchase
      Price”
      shall
      mean the Principal Amount of the Notes purchased.

    


    “Registrable
      Securities”
      shall
      mean the shares of common stock underlying the Notes and the Warrant Shares
      until the Registration Statement has been declared effective by the SEC.


    


    “Registration
      Statement”
      shall
      mean a registration statement on Form SB-2 if use of such form is then available
      to the Company pursuant to the rules of the SEC and, if not, on such other
      form
      promulgated by the SEC for which the Company then qualifies and which counsel
      for the Company shall deem appropriate, and which form shall be available for
      the resale by the Investor of the Registrable Securities to be registered
      thereunder in accordance with the provisions of this Agreement and the Warrants
      and in accordance with the intended method of distribution of such securities),
      for the registration of the resale by the Investor of the Registrable Securities
      under the Securities Act.

    


    “Regulation
      D”
      shall
      have the meaning set forth in the recitals of this Agreement.

    


    “SEC”
      shall
      mean the Securities and Exchange Commission.

    


    “Section
      4(2)”
      and
      “Section
      4(6)”
shall
      have the meanings set forth in the recitals of this Agreement.

    


    “Securities”
      shall
      mean the Notes, the Warrants and the Warrant Shares, individually and
      collectively.

    


    “Securities
      Act”
      shall
      have the meaning set forth in the recitals of this Agreement.

    


    “Subsidiary”
      shall
      mean any entity in which the Company, directly or indirectly, owns capital
      stock
      or holds an equity or similar interest.

    


    “Trading
      Day”
      shall
      mean any day during which the Principal Market shall be open for
      business.

    


    “Transaction
      Documents”
      shall
      mean this Agreement, the Notes, the Warrants, and each of the other agreements
      entered into by the parties hereto in connection with the transactions
      contemplated by this Agreement.

    


    “Warrants”
      shall
      mean the warrants to purchase Common Stock substantially in the form of
Exhibit
      B
      to be
      issued to the Investor hereunder.

    


    “Warrant
      Shares”
      shall
      mean all shares of Common Stock or other securities issued or issuable pursuant
      to exercise of the Warrants.

    


    ARTICLE
      II 

    


    Purchase
      and Sale of Notes and Warrants

    


    Section
      2.1. Investment.

    


    (a) Upon
      the
      terms and subject to the conditions set forth herein, on the Closing Dates
      set
      forth below the Company agrees to sell to the Investor, and the Investor agrees
      to purchase from the Company, the principal amount of Notes and related Warrants
      set forth beside the Investor’s signature below, as follows:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (i) Concurrently
      with the execution and delivery of this Agreement, the Investor shall deliver
      the Purchase Price, in immediately available funds, to the Company. The Company
      shall immediately thereafter deliver to each investor an executed original
      Note
      and Warrant.

    


    (b) Each
      Closing shall be subject to the satisfaction of the conditions to Closing set
      forth below:

    


    (i) The
      obligation of the Company hereunder to issue and sell the Note(s) and issue
      the
      Warrant(s) to the Investor at a Closing is subject to the satisfaction, at
      or
      before the relevant Closing Date, of each of the following conditions, provided
      that these conditions are for the Company’s sole benefit and may be waived by
      the Company at any time in its sole discretion by providing the Investor with
      prior written notice thereof:

    


    (A) The
      Investor shall have executed each of the Transaction Documents to be executed
      by
      it and delivered the same to the Company.

    


    (B) The
      Investor shall have delivered to the Company the Purchase Price for the Notes
      and Warrants being purchased by the Investor at the Closing by wire transfer
      of
      immediately available funds pursuant to the written wire instructions provided
      by the Company.

    


    (C) The
      representations and warranties of the Investor shall be true and correct as
      of
      the date when made and as of the Closing Date as though made at that time
      (except for representations and warranties that speak as of a specific date),
      and the Investor shall have performed, satisfied and complied with the
      covenants, agreements and conditions required by the Transaction Documents
      to be
      performed, satisfied or complied with by it at or prior to the Closing
      Date.

    


    (ii) The
      obligation of the Investor hereunder to purchase the Note(s) and Warrant(s)
      at
      the Closing is subject to the satisfaction, at or before the relevant Closing
      Date, of each of the following conditions, provided that these conditions are
      for the Investor’s sole benefit and may be waived by the Investor at any time in
      its sole discretion:

    


    (A) The
      Company shall have executed each of the Transaction Documents to be executed
      by
      it and delivered copies of the same to the Investor.

    


    (B) The
      representations and warranties of the Company shall be true and correct as
      of
      the date when made and as of the Closing Date as though made at that time
      (except for representations and warranties that speak as of a specific date)
      and
      the Company shall have performed, satisfied and complied with the covenants,
      agreements and conditions required by the Transaction Documents to be performed,
      satisfied or complied with by the Company at or prior to the Closing Date.
      .

    


    (C) The
      Company shall have executed and delivered to the Closing Agent the Note(s)
      (in
      such denominations as the Investor shall request) being purchased by the
      Investor at the Closing.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (D) The
      Company shall have executed and delivered to the Closing Agent the Warrant(s)
      (in such denominations as the Investor shall request) being purchased by the
      Investor at such Closing.

    


    (E) The
      Board
      of Directors of the Company shall have adopted resolutions consistent with
      Section 4.2 below (the “Resolutions”).

    


    (G) As
      of the
      Closing Date, the Company shall have reserved out of its authorized and unissued
      Common Stock, for the purpose of effecting the exercise of the Warrants and
      converting the Notes, an aggregate of 2,000,000 shares of its Common
      Stock.

     

    Section
      2.2. Reserved.
      

    ARTICLE
      III

    


    Representations
      and Warranties of the Investor

    


    The
      Investor represents and warrants to the Company that:

    


    Section
      3.1. Intent.
      The
      Investor is entering into this Agreement for its own account and not with a
      view
      to or for sale in connection with any distribution of the Notes or Warrants
      (collectively the “Securities”).
      The
      Investor has no present arrangement (whether or not legally binding) at any
      time
      to sell the Securities to or through any person or entity; provided, however,
      that by making the representations herein, the Investor does not agree to hold
      such Securities for any minimum or other specific term and reserves the right
      to
      dispose of the Securities at any time in accordance with Federal and state
      securities laws applicable to such disposition.

    


    Section
      3.2. Sophisticated
      Investor.
      The
      Investor is a sophisticated investor (as described in Rule 506(b)(2)(ii) of
      Regulation D) and an accredited investor (as defined in Rule 501 of Regulation
      D), and the Investor has such experience in business and financial matters
      that
      it has the capacity to protect its own interests in connection with this
      transaction and is capable of evaluating the merits and risks of an investment
      in the Securities. The Investor acknowledges that an investment in the
      Securities is speculative and involves a high degree of risk.

    


    Section
      3.3. Authority.
      This
      Agreement and each of the Transaction Documents that are required to be executed
      by the Investor have been duly authorized and validly executed and delivered
      by
      the Investor and are a valid and binding agreements of the Investor enforceable
      against it in accordance with their terms, subject to applicable bankruptcy,
      insolvency, or similar laws relating to, or affecting generally the enforcement
      of, creditors’ rights and remedies or other equitable principles of general
      application.

    


    Section
      3.4. Not
      an
      Affiliate.
      The
      Investor is not an officer, director or “affiliate”
(as
      that term is defined in Rule 405 of the Securities Act) of the
      Company.

    


    Section
      3.5. Absence
      of Conflicts.
      The
      execution, delivery and performance of this Agreement and each other Transaction
      Document, and the consummation of the transactions contemplated hereby and
      thereby, and compliance with the requirements hereof and thereof by the
      Investor, will not violate any law, rule, regulation, order, writ, judgment,
      injunction, decree or award binding on the Investor or (a) violate any provision
      of any indenture, instrument or agreement to which the Investor is a party
      or is
      subject, or by which the Investor or any of its assets is bound; (b) conflict
      with or constitute a material default thereunder; (c) result in the creation
      or
      imposition of any lien pursuant to the terms of any such indenture, instrument
      or agreement, or constitute a breach of any fiduciary duty owed by the Investor
      to any third party; or (d) require the approval of any third party (which has
      not been obtained) pursuant to any material contract, agreement, instrument,
      relationship or legal obligation to which the Investor is subject or to which
      any of its assets, operations or management may be subject.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Section
      3.6. Disclosure;
      Access to Information.
      The
      Investor has received all documents, records, books and other publicly available
      information pertaining to the Investor’s investment in the Company as the
      Investor has requested. 

    


    Section
      3.7. Manner
      of Sale.
      At no
      time was Investor presented with or solicited by or through any leaflet, public
      promotional meeting, television advertisement or any other form of general
      solicitation or advertising. 

    


    Section
      3.8 Acknowledgment
      Regarding Investor’s Purchase of Notes.
      The
      Investor acknowledges and agrees that it is acting solely in the capacity of
      arm’s-length purchaser with respect to the Transaction Documents and the
      transactions contemplated thereby. The Investor further acknowledges that it
      is
      not acting as a financial advisor or fiduciary of the Company (or in any similar
      capacity) with respect to the Transaction Documents and the transactions
      contemplated thereby and any advice given by the Investor or any of its
      representatives or agents in connection with the Transaction Documents and
      the
      transactions contemplated thereby is merely incidental to the Investor’s
      purchase of Securities. The Investor further represents to the Company that
      the
      Investor’s decision to enter into the Transaction Documents has been based
      solely on the independent evaluation by the Investor and its
      representatives.

    


    Section
      3.9 No
      Misrepresentation.
      The
      representations and warranties of the Investor contained in this Agreement,
      any
      schedule, annex or exhibit hereto and any agreement, instrument or certificate
      furnished by the Investor to the Company pursuant to this Agreement, do not
      contain any 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 were made, not
      misleading.

    


    Section
      3.10. No
      Other Agreements.
      The
      Investor has not, directly or indirectly, made any agreements with the Company
      or any Investor relating to the terms or conditions of the transactions
      contemplated by the Transaction Documents, except as set forth in the
      Transaction Documents.

    


    ARTICLE
      IV

    


    Representations
      and Warranties of the Company

    


    The
      Company represents and warrants to the Investor that, except as set forth on
      the
      Disclosure Schedule prepared by the Company and attached hereto:

    


    Section
      4.1. Organization
      of the Company.
      The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of the State of Nevada and has all requisite corporate
      authority to own its properties and to carry on its business as now being
      conducted. The Company has one subsidiary known as S2 New York Design Corp.
      The
      Company is duly qualified and is in good standing as a foreign corporation
      to do
      business in every jurisdiction in which the nature of the business conducted
      or
      property owned by it makes such qualification necessary, other than those in
      which the failure so to qualify would not have a Material Adverse
      Effect.

    


    Section
      4.2. Authority.
      (i) The
      Company has the requisite corporate power and corporate authority to enter
      into
      and perform its obligations under the Transaction Documents and to issue the
      Securities pursuant to their respective terms; (ii) the execution, issuance
      and
      delivery of the Transaction Documents, the Notes and the Warrants by the Company
      and the consummation by it of the transactions contemplated hereby have been
      duly authorized by all necessary corporate action and no further consent or
      authorization of the Company or its Board of Directors or stockholders is
      required, and (iii) the Transaction Documents have been duly executed and
      delivered by the Company and constitute valid and binding obligations of the
      Company enforceable against the Company in accordance with their terms, except
      as such enforceability may be limited by applicable bankruptcy, insolvency,
      or
      similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or other equitable principles of general application. The
      Company has duly and validly authorized and reserved for issuance shares of
      Common Stock sufficient in number for the exercise of the Warrants and
      conversion of the Notes. The Company understands and acknowledges the
      potentially dilutive effect on the Common Stock of the issuance of the Warrant
      Shares and common stock underlying the Notes. The Company further acknowledges
      that its obligation to issue Warrant Shares upon exercise of the Warrants in
      accordance with this Agreement, the Notes and/or the Warrants is absolute and
      unconditional regardless of the dilutive effect that such issuance may have
      on
      the ownership interests of other stockholders of the Company and notwithstanding
      the commencement of any case under 11 U.S.C. § 101 et seq. (the “Bankruptcy
      Code”).
      

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Section
      4.3. No
      Pre-Emptive Rights.
      The
      Company is not a party to any agreement granting preemptive rights to any person
      with respect to any of its equity or debt securities. 

    


    Section
      4.4. Common
      Stock.
      The
      Company will take reasonably necessary action to register its Common Stock
      pursuant to Section 12(b) or (g). 

    


    Section
      4.5. Disclosure.
      All
      disclosure furnished by or on behalf of the Company to the Investor regarding
      the Company, its business and the transactions contemplated hereby, including
      the Disclosure Schedules to this Agreement, with respect to the representations
      and warranties made herein are true and correct with respect to such
      representations and warranties and do not contain any untrue statement of a
      material fact or omit to state any material fact necessary in order to make
      the
      statements made therein, in light of the circumstances under which they were
      made, not misleading. The Company acknowledges and agrees that no Investor
      makes
      or has made any representations or warranties with respect to the transactions
      contemplated hereby other than those specifically set forth in Section 3
      hereof.

    


    Section
      4.6. Exemption
      from Registration; Valid Issuances.
      Subject
      to the accuracy of the Investor’s representations in Article III, and subject to
      Section 6.4 hereof, the Company’s sale of the Notes and its issuance of the
      Warrants under this Agreement does not, and the Company’s issuance of the
      Warrant Shares on the exercise of the Warrants and issuance upon the conversion
      of the Notes will not, require registration under the Securities Act and/or
      any
      applicable state securities law, except as provided for in the Registration
      Rights Agreement. When issued in accordance with the terms of the Warrants,
      Notes and the Warrant Shares and shares underlying the Notes, as the case may
      be, will be duly and validly issued, fully-paid, and nonassessable. Neither
      the
      sales of the Securities pursuant to, nor the Company’s performance of its
      obligations under, the Transaction Documents will (i) result in the creation
      or
      imposition by the Company of any liens, charges, claims or other encumbrances
      upon any of the Securities or, except as contemplated herein, any of the assets
      of the Company, or (ii) entitle the holders of Outstanding Capital Shares to
      preemptive or other rights to subscribe for or acquire the Capital Shares or
      other securities of the Company. None of the Securities will subject the
      Investor to personal liability to the Company or its creditors by reason of
      the
      Investor’s possession thereof.

    


    Section
      4.7. No
      General Solicitation or Advertising in Regard to this
      Transaction.
      Neither
      the Company nor any of its affiliates nor any person acting on its or their
      behalf (i) has conducted or will conduct any general solicitation (as that
      term
      is used in Rule 502(c) of Regulation D) or general advertising with respect
      to
      the sale of the Notes, the Shares or the Warrants, or (ii) has made any offers
      or sales of any security or solicited any offers to buy any security under
      any
      circumstances that would require registration of the Securities under the
      Securities Act.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Section
      4.8. No
      Conflicts.
      The
      Company’s execution, delivery and performance of the Transaction Documents, the
      Company’s performance of its obligations under the Notes, and the Company’s
      consummation of the transactions contemplated hereby and thereby do not and
      will
      not (i) result in a violation of the Company’s Certificate of Incorporation or
      By-Laws or (ii) result in a violation of any law, rule, regulation, order,
      judgment or decree (including Federal and state securities laws and regulations
      and the rules and regulations of the Principal Market) that may require the
      Company to obtain the approval of its stockholders, applicable to the Company
      or
      by which any property or asset of the Company is bound or affected. The Company
      is not otherwise in violation of any term of or in default under its Certificate
      of Incorporation or By-laws. The Company’s business is not being conducted in
      violation of any law, ordinance or regulation of any governmental entity, except
      for possible violations that either singly or in the aggregate would not result
      in a Material Adverse Effect. Except as specifically contemplated by this
      Agreement and as required by the Securities Act, the Company is not required
      to
      obtain any consent, authorization or order of, or make any filing or
      registration with, any court or governmental agency or any regulatory or
      self-regulatory organization, in order for it to execute, deliver or perform
      any
      of its obligations under or contemplated by the Transaction Documents, in each
      case in accordance with the terms hereof or thereof. All consents,
      authorizations, orders, filings and registrations that the Company is required
      to obtain pursuant to the preceding sentence have been obtained or effected
      on
      or prior to the date hereof. 

    


    Section
      4.9. No
      Material Adverse Change.
      Since
      October 22, 2006, the date of its incorporation, no Material Adverse Effect
      has
      occurred or exists with respect to the Company. The Company has not taken any
      steps, and does not currently expect to take any steps, to seek protection
      pursuant to the Bankruptcy Code or any law generally affecting creditors’ rights
      nor does the Company have any knowledge or reason to believe that its creditors
      intend to initiate involuntary bankruptcy proceedings.

     

    Section
      4.10. No
      Undisclosed Liabilities.
      No
      liability has occurred or exists with respect to the Company, its businesses,
      properties, operations or financial condition other than as incurred in the
      normal course of business.

    


    Section
      4.11. No
      Integrated Offering.
      The
      Company has not, directly or indirectly, made any offers or sales of any
      security, or solicited any offers to buy any security, under circumstances
      that
      would require registration of any of the Securities under the Securities Act
      or
      cause this offering of Securities to be integrated with prior offerings of
      securities by the Company for purposes of the Securities Act or any applicable
      stockholder approval provisions, including, without limitation, under the rules
      and regulations of the Principal Market; nor will the Company or any of its
      Subsidiaries, to the best of its ability, take any action or steps that would
      require registration of the Securities under the Securities Act or cause the
      offering of the Securities to be integrated with other offerings.

    


    Section
      4.12. Litigation
      and Other Proceedings.
      Except
      as set forth on Schedule 4.12, there are no lawsuits or proceedings pending
      or,
      to the knowledge of the Company, threatened, against the Company or any of
      its
      officers or directors in their capacities as such nor has the Company received
      any written or oral notice of any such action, suit, proceeding or
      investigation, which could reasonably be expected to have a Material Adverse
      Effect. Except as set forth on Schedule 4.12, no judgment, order, writ,
      injunction, decree or award has been issued by or, to the knowledge of the
      Company, requested of any court, arbitrator or governmental agency that could
      result in a Material Adverse Effect.

    


    Section
      4.13. Intellectual
      Property.
      The
      Company owns or possesses adequate and enforceable rights or licenses to use
      all
      Intellectual Property necessary for the conduct of its business as now being
      conducted. The Company’s Intellectual Property necessary to conduct its business
      as now conducted or as proposed to be conducted has not expired or terminated,
      or is expected to expire or terminate within two years from the date of this
      Agreement. To the Company’s knowledge, the Company is not infringing upon or in
      conflict with any right of any other person with respect to any Intellectual
      Property. No adverse claims have been asserted by any person to the ownership
      or
      use of any Intellectual Property, and the Company has no knowledge of any basis
      for such claim.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Section
      4.14. Internal
      Controls and Procedures.
      The
      Company maintains books and records and internal accounting controls that
      provide reasonable assurance that (i) all transactions to which the Company
      is a
      party or by which its properties are bound are executed with management’s
      authorization; (ii) the recorded accounting of the Company’s consolidated assets
      is compared with existing assets at regular intervals; (iii) access to the
      Company’s consolidated assets is permitted only in accordance with management’s
      authorization; and (iv) all transactions to which the Company is a party or
      by
      which its properties are bound are recorded as necessary to permit preparation
      of the financial statements of the Company in accordance with GAAP.

    


    Section
      4.15. Acknowledgment
      Regarding Investor’ Purchase of Notes.
      The
      Company acknowledges and agrees that each of the Investors is acting solely
      independently in the capacity of arm’s-length purchaser with respect to the
      Transaction Documents and the transactions contemplated thereby. The Company
      further acknowledges that no Investor is acting as a financial advisor or
      fiduciary of the Company (or in any similar capacity) with respect to the
      Transaction Documents and the transactions contemplated thereby and any advice
      given by any of the Investor or any of their respective representatives or
      agents in connection with the Transaction Documents and the transactions
      contemplated thereby is merely incidental to the Investor’s purchase of the
      Securities. The Company further represents to the Investor that the Company’s
      decision to enter into the Transaction Documents has been based solely on the
      independent evaluation by the Company and its representatives.

    


    Section
      4.16. Environmental
      Laws.
      The
      Company (i) is in compliance with any and all applicable Environmental Laws,
      (ii) has received all permits, licenses or other approvals required of them
      under applicable Environmental Laws to conduct their respective businesses
      and
      (iii) is in compliance with all terms and conditions of any such permit, license
      or approval where, in each of the three foregoing cases, the failure to so
      comply would have, individually or in the aggregate, a Material Adverse
      Effect.

    


    Section
      4.17. Regulatory
      Permits.
      The
      Company possesses all certificates, authorizations and permits issued by the
      appropriate Federal, state or foreign regulatory authorities necessary to
      conduct their respective businesses, except where the failure to possess such
      items would not have, individually or in the aggregate, a Material Adverse
      Effect, and the Company has not received any notice of proceedings relating
      to
      the revocation or modification of any such certificate, authorization or
      permit.

    


    Section
      4.18. No
      Materially Adverse Contracts, Etc.
      The
      Company is not subject to any charter, corporate or other legal restriction,
      or
      any judgment, decree, order, rule or regulation that in the judgment of the
      Company’s officers has a Material Adverse Effect. The Company is not a party to
      any contract or agreement that in the reasonable judgment of the Company’s
      officers has or is expected to have a Material Adverse Effect.

    


    Section
      4.19. No
      Other Agreements.
      The
      Company has not, directly or indirectly, made any agreements with any Investor
      relating to the terms or conditions of the transactions contemplated by the
      Transaction Documents, except as set forth in the Transaction
      Documents.

    


    Section
      4.20. No
      Misrepresentation.
      The
      representations and warranties of the Company contained in this Agreement,
      any
      schedule, annex or exhibit hereto and any agreement, instrument or certificate
      furnished by the Company to the Investor pursuant to this Agreement, do not
      contain any 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 were made, not
      misleading.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      V

    


    Covenants
      of the Investor

    


    Section
      5.1. Best
      Efforts.
      The
      Investor covenants with the Company that it shall use its best efforts to timely
      satisfy each of the conditions to be satisfied by it as provided in Article
      II
      of this Agreement.

    


    Section
      5.2. Certain
      Selling Restrictions.
      So long
      as the Company is in compliance in all material respects with its obligations
      to
      the Investor under this Agreement, the Note and Warrant, the Investor agrees
      on
      its behalf and on behalf of its Affiliates (as defined in Rule 405 under the
      Securities Act) that it will not sell, or engage in any short sales with respect
      to, any shares of Common Stock on any Principal Market where the Common Stock
      is
      then listed for trading.

    


    ARTICLE
      VI

    


    Covenants
      of the Company

    


    Section
      6.1.  Best
      Efforts.
      The
      Company shall use its best efforts to timely satisfy each of the conditions
      to
      be satisfied by it as provided in Article II of this Agreement.

    


    Section
      6.2. Registration
      Rights.
      The
      Company shall cause the Registration Rights Agreement to remain in full force
      and effect, and the Company shall comply in all material respects with the
      terms
      thereof.

    


    Section
      6.3. Reservation
      of Common Stock.
      As of
      the date hereof, the Company has reserved, for the purpose of enabling the
      Company to issue the Warrant Shares or shares underlying the Notes pursuant
      to
      any exercise or conversion of the Warrants or Notes, respectively, the number
      of
      shares of Common Stock needed to provide for the issuance of the Warrant Shares
      and shares underlying the Notes. 

    


    Section
      6.4. Listing
      of Common Stock.
      The
      Company shall use commercially reasonable efforts to obtain the listing of
      the
      Common Stock on a Principal Market and, as soon as required by the rules of
      the
      Principal Market and any other national securities exchange or automated
      quotation system, if any, upon which shares of Common Stock are listed, shall
      list the Shares and the Warrant Shares on the Principal Market and each such
      other exchange or system. The Company further agrees, if the Company applies
      to
      have the Common Stock traded on any other Principal Market, that it will include
      in such application the Warrant Shares, and will take such other action as
      is
      necessary or desirable in the opinion of the Investor to cause the Warrant
      Shares to be listed on such other Principal Market as promptly as possible.
      

    


    Section
      6.5. Reserved.
      

    


    Section
      6.6. Legends.
      The
      certificates evidencing the Registrable Securities shall be free of legends,
      except as set forth in Article IX.

    


    Section
      6.7. Corporate
      Existence; Conflicting Agreements.
      The
      Company will take all steps necessary to preserve and continue its corporate
      existence. The Company shall not enter into any agreement, the terms of which
      agreement would restrict or impair the right or ability of the Company to
      perform any of its obligations under this Agreement or any of the other
      Transaction Documents.

    


    Section
      6.8. Consolidation;
      Merger.
      The
      Company shall not, at any time after the date hereof, effect any merger or
      consolidation of the Company with or into, or a transfer of all or substantially
      all of the assets of the Company to, another entity (a “Consolidation
      Event”)
      unless
      the resulting successor or acquiring entity (if not the Company) assumes by
      written instrument or by operation of law the obligation to deliver to the
      Investor such shares of stock and/or securities as the Investor are entitled
      to
      receive pursuant to this Agreement and the Notes.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section
      6.9. Issuance
      of Notes and Warrant Shares.
      To the
      best of the Company’s knowledge the sale of the Notes and the Warrants and the
      issuance of the Warrant Shares and shares underlying the Notes pursuant to
      exercise of the Warrants or conversion of the Notes, as the case may be, shall
      be made in accordance with the provisions and requirements of Section 4(2),
      Section 4(6) or Regulation D and any applicable state securities law. The
      Company shall file a Form D with respect to the Notes as required under
      Regulation D and provide a copy thereof to the Investor promptly after such
      filing. The Company shall take such action as reasonably necessary to qualify
      the Notes for, or obtain exemption for the Notes for, sale to the Investor
      at
      the Closing pursuant to this Agreement under applicable securities or “Blue Sky”
laws of the states of the United States, and shall provide evidence of any
      such
      action so taken to the Investor on or prior to the Closing Date. The Company
      shall make all filings and reports relating to the offer and sale of the
      Securities required under the applicable securities or “Blue Sky” laws of the
      states of the United States following the Closing Date.

    


    Section
      6.10. Relief
      in Bankruptcy.
      The
      Company shall not seek judicial relief from its obligations hereunder, except
      pursuant to the Bankruptcy Code. In the event the Company is a debtor under
      the
      Bankruptcy Code, the Company hereby waives to the fullest extent permitted
      any
      rights to relief it may have under 11 U.S.C. § 362 in respect of the conversion
      of the Notes and the exercise of the Warrants. The Company agrees, without
      cost
      or expense to the Investor, to take or consent to any and all action necessary
      to effectuate relief under 11 U.S.C. § 362.

    


    Section
      6.11. Use
      of
      Proceeds.
      The
      Company will use the proceeds from the sale of the Notes to acquire a shell
      corporation and for general working capital purposes and in the operation of
      the
      Company’s business. None of the proceeds will be used, directly or indirectly,
      to make any loan to or investment in any other Person. 

    


    Section
      6.12. Financial
      Information.
      Until
      all Registrable Securities may be sold without registration under the Securities
      Act, the Company, upon becoming an SEC reporting company, shall send the
      following to each holder of Registrable Securities if
      not
      available via the Internet through EDGAR or any similar service: (i) within
      five
      (5) business days after the filing thereof with the SEC, a copy of its Annual
      Report on Form 10-KSB, its Quarterly Reports on Form 10-QSB, any Current Reports
      on Form 8-K and any registration statements or amendments (other than on Form
      S-8) filed pursuant to the Securities Act; and (ii) copies of any notices and
      other information made available or given to the stockholders of the Company
      generally, contemporaneously with the making available or giving thereof to
      the
      stockholders. As of the date hereof, the Company is not a reporting company
      and
      therefore the Company does not prepare Quarterly Reports on Form 10-QSB or
      Annual Reports on Form 10-KSB. Accordingly, the Company shall send to each
      Investor, within 90 days after its fiscal year end and 45 days after the end
      of
      each fiscal quarter, financial statements of the Company, including a balance
      sheet, statement of operations and statement of cash flows prepared in
      accordance with GAAP.

     

    ARTICLE
      VII

    


    Survival;
      Indemnification

    


    Section
      7.1. Survival.
      The
      representations, warranties and covenants made by each of the Company and the
      Investor in this Agreement, the annexes, schedules and exhibits hereto and
      in
      each instrument, agreement and certificate entered into and delivered by them
      pursuant to this Agreement, shall survive the Closing and the consummation
      of
      the transactions contemplated hereby. In the event of a breach or violation
      of
      any of such representations, warranties or covenants, the party to whom such
      representations, warranties or covenants have been made shall have all rights
      and remedies for such breach or violation available to it under the provisions
      of this Agreement, irrespective of any investigation made by or on behalf of
      such party on or prior to the Closing Date.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Section
      7.2. Indemnity
      by Company.
      To the
      extent permitted by law, the Company shall indemnify and hold harmless the
      Investor, their respective Affiliates and their respective officers, directors,
      partners and members (each an “Indemnified Party”), from and against any and all
      Damages, and shall reimburse the Indemnified Parties for all reasonable
      out-of-pocket expenses (including the reasonable fees and expenses of legal
      counsel), in each case promptly as incurred by such Indemnified Party and to
      the
      extent arising out of or in connection with:

    


    
      	 	 	
              (i)

            	
              any
                misrepresentation, omission of fact or breach of any of the Company’s
                representations or warranties contained in any of the Transaction
                Documents, the annexes, schedules or exhibits thereto or any instrument,
                agreement or certificate entered into or delivered by the Company
                pursuant
                hereto or thereto; or

            


    

    


    
      	 	 	
              (ii)

            	
              any
                failure by the Company to perform in any material respect any of
                its
                covenants, agreements, undertakings or obligations set forth in any
                of the
                Transaction Documents, the annexes, schedules or exhibits thereto
                or any
                instrument, agreement or certificate entered into or delivered by
                the
                Company pursuant hereto or thereto;
                or

            


    

    


    
      	 	 	
              (iii)

            	
              any
                action instituted against the Investor, or any of them, by any stockholder
                of the Company who is not an Affiliate of the Investor, with respect
                to
                any of the transactions contemplated by the Transaction
                Documents.

            


    

     

    provided,
      however, that the indemnity agreement contained in this Section 7.2 shall not
      apply to amounts paid in settlement of any such loss, claim, damage, liability,
      or action if such settlement is effected without the consent of the Company
      (which consent shall not be unreasonably withheld), and that the Company shall
      not be liable in any such case for any such loss, claim, damage, liability,
      or
      action to the extent that it arises out of or is based upon a statement,
      omission, or violation which occurs in reliance upon and in conformity with
      written information furnished in a certificate expressly for use in connection
      with such registration by any such Investor, underwriter or controlling
      person.

    


    Section
      7.3 Indemnity
      by Investor.
      To the
      extent permitted by law, each Investor will indemnify and hold harmless the
      Company, each of its directors and officers, any underwriters (as defined in
      the
      Securities Act) for the Company, each person, if any, who controls the Company
      or any such underwriter within the meaning of the Securities Act or the 1934
      Act, and any Investor selling securities in such registration statement or
      any
      of its directors or officers or any person who controls such Investor (each
      an
“Indemnified Party”) against any losses, claims, damages, or liabilities (or
      actions in respect thereto) which arise out of or are based upon any of the
      following statements, omissions or violations (“Violation”), in each case to the
      extent (and only to the extent) that such Violation occurs in reliance upon
      and
      in conformity with written information furnished by such Investor in a
      certificate expressly for use in connection with such registration; and each
      such Investor will reimburse any legal or other expenses reasonably incurred
      by
      the Company or any such director, officer, any person who controls the Company,
      any underwriter or controlling person of any such underwriter, any other such
      Investor, officer, director, or controlling person in connection with
      investigating or defending any such loss, claim, damage, liability, or action;
      provided however, that the indemnity agreement contained in this Section 7.3
      shall not apply to amounts paid in settlement of any such loss, claim, damage,
      liability or action if such settlement is effected without the consent of the
      Investor (which consent shall not be unreasonably withheld), and provided
      further that the obligations of each selling Investor of the shares sold by
      each
      such selling Investor pursuant to such registration.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    Section
      7.4 Contribution.
      If a
      court of competent jurisdiction holds that the foregoing indemnity is
      unavailable, then the indemnifying party shall contribute to the amount paid
      or
      payable by the indemnified party as a result of such losses, claims, damages,
      liabilities or expenses (i) in such proportion as is appropriate to reflect
      the
      relative benefits received by the indemnifying party on the one hand and the
      indemnified party on the other (taking into consideration, among other things,
      the fact that the provision of the registration rights and indemnification
      hereunder is a material inducement to the Investors to purchase Registrable
      Securities) or (ii) if the allocation provided by clause (i) above is not
      permitted by applicable law or provides a lesser sum to the indemnified party
      than the amount hereinafter calculated, in such proportion as is appropriate
      to
      reflect not only the relative benefits received by the indemnifying party on
      the
      one hand and the indemnified party on the other (taking into consideration,
      among other things, the fact that the provision of the registration rights
      and
      indemnification hereunder is a material inducement to the Investors to purchase
      Registrable Securities) but also the relative fault of the indemnifying party
      and the indemnified party as well as any other relevant equitable
      considerations. The relative fault shall be determined by reference to, among
      other things, whether the untrue or alleged untrue statement of a material
      fact
      or the omission or alleged omission to state a material fact relates to
      information supplied by or on behalf of the indemnifying party or the
      indemnified party and the parties’ relative intent, knowledge, access to
      information and opportunity to correct or prevent such untrue statement or
      omission. No Person guilty of fraudulent misrepresentation (within the meaning
      of Section 11(f) of the Securities Act) shall be entitled to contribution from
      any Person who was not guilty of such fraudulent misrepresentation.
      Notwithstanding anything to the contrary in this Section 7., no Investor shall
      be required, pursuant to this Section 7., to contribute any amount in excess
      of
      the net proceeds received by such indemnifying party from the sale of securities
      in the offering to which the losses, claims, damages, liabilities or expenses
      of
      the indemnified party relate.

    


    Section
      7.5. Notice.
      Promptly after receipt by an Indemnified Party seeking indemnification pursuant
      to Section 7.2 or Section 7.4 of written notice of any investigation, claim,
      proceeding or other action in respect of which indemnification is being sought
      (each, a “Claim”),
      the
      Indemnified Party promptly shall notify the other party of the commencement
      thereof; but the omission so to notify the other party shall not relieve it
      from
      any liability that it otherwise may have to the Indemnified Party, except to
      the
      extent that the other party is actually prejudiced by such omission or delay.
      In
      connection with any Claim as to which both the Indemnified Party and the other
      party are parties, the other party shall be entitled to assume the defense
      thereof. Notwithstanding the assumption of the defense of any Claim by the
      other
      party, the Indemnified Party shall have the right to employ separate legal
      counsel and to participate in the defense of such Claim, and the other party
      shall bear the reasonable fees, out-of-pocket costs and expenses of such
      separate legal counsel to the Indemnified Party if (and only if): (x) the other
      party shall have agreed to pay such fees, out-of-pocket costs and expenses,
      (y)
      the Indemnified Party reasonably shall have concluded that representation of
      the
      Indemnified Party and the other party by the same legal counsel would not be
      appropriate due to actual or, as reasonably determined by legal counsel to
      the
      Indemnified Party, potentially differing interests between such parties in
      the
      conduct of the defense of such Claim, or if there may be legal defenses
      available to the Indemnified Party that are in addition to or disparate from
      those available to the other party, or (z) the other party shall have failed
      to
      employ legal counsel reasonably satisfactory to the Indemnified Party within
      a
      reasonable period of time after notice of the commencement of such Claim. If
      the
      Indemnified Party employs separate legal counsel in circumstances other than
      as
      described in clauses (x), (y) or (z) above, the fees, costs and expenses of
      such
      legal counsel shall be borne exclusively by the Indemnified Party. Except as
      provided above, the other party shall not, in connection with any Claim in
      the
      same jurisdiction, be liable for the fees and expenses of more than one firm
      of
      legal counsel for the Indemnified Party (together with appropriate local
      counsel). The other party shall not, without the prior written consent of the
      Indemnified Party (which consent shall not unreasonably be withheld), settle
      or
      compromise any Claim or consent to the entry of any judgment that does not
      include an unconditional release of the Indemnified Party from all liabilities
      with respect to such Claim or judgment.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    Section
      7.6. Direct
      Claims.
      In the
      event an Indemnified Party should have a claim for indemnification that does
      not
      involve a claim or demand being asserted by a third party, the Indemnified
      Party
      promptly shall deliver notice of such claim to the other party. If the
      Indemnified Party disputes the claim, such dispute shall be resolved by mutual
      agreement of the Indemnified Party and the other party or by binding arbitration
      conducted in accordance with the procedures and rules of the American
      Arbitration Association as set forth in Article X. Judgment upon any award
      rendered by any arbitrators may be entered in any court having competent
      jurisdiction thereof.

    


    ARTICLE
      VIII

    


    Due
      Diligence Review; Non-Disclosure of Non-Public
      Information.

    


    Section
      8.1. Due
      Diligence Review.
      Subject
      to Section 8.2, the Company shall make available for inspection and review
      by
      the Investor, advisors to and representatives of the Investor (who may or may
      not be affiliated with the Investor and who are reasonably acceptable to the
      Company), any underwriter participating in any disposition of the Registrable
      Securities on behalf of the Investor pursuant to the Registration Statement,
      any
      such registration statement or amendment or supplement thereto or any blue
      sky,
      Nasdaq or other filing, and if applicable, all SEC Documents and other filings
      with the SEC, and all other publicly available corporate documents and
      properties of the Company as may be reasonably necessary for the purpose of
      such
      review, and cause the Company’s officers, directors and employees to supply all
      such publicly available information reasonably requested by the Investor or
      any
      such representative, advisor or underwriter in connection with such Registration
      Statement (including, without limitation, in response to all questions and
      other
      inquiries reasonably made or submitted by any of them), prior to and from time
      to time after the filing and effectiveness of the Registration Statement for
      the
      sole purpose of enabling the Investor and such representatives, advisors and
      underwriters and their respective accountants and attorneys to conduct initial
      and ongoing due diligence with respect to the Company and the accuracy of the
      Registration Statement. 

    


    Section
      8.2. Non-Disclosure
      of Non-Public Information.

    


    (a) The
      Company shall not further disclose material non-public information to the
      Investor, advisors to or representatives of the Investor unless prior to
      disclosure of such information the Company identifies such information as being
      non-public information and provides the Investor, such advisors and
      representatives with the opportunity to accept or refuse to accept such
      non-public information for review. Other than disclosure of any comment letters
      received from the SEC staff with respect to the Registration Statement, the
      Company may, as a condition to disclosing any non-public information hereunder,
      require the Investor’ advisors and representatives to enter into a
      confidentiality agreement in form and content reasonably satisfactory to the
      Company and the Investor. With respect to material non-public information
      disclosed to Investor prior to Closing under Confidentiality Agreement, Investor
      shall remain bound by the terms of that Confidentiality Agreement.

    


    (b) Nothing
      herein shall require the Company to disclose material non-public information
      to
      the Investor or their advisors or representatives, and the Company represents
      that, outside of disclosures made pursuant to written confidentiality
      agreements, it does not disseminate material non-public information to any
      investors who purchase stock in the Company in a public offering, to money
      managers or to securities analysts; provided, however, that notwithstanding
      anything herein to the contrary, the Company will, as hereinabove provided,
      promptly notify the advisors and representatives of the Investor and, if any,
      underwriters, of any event or the existence of any circumstance (without any
      obligation to disclose the specific event or circumstance) of which it becomes
      aware, constituting material non-public information (whether or not requested
      of
      the Company specifically or generally during the course of due diligence by
      such
      persons or entities), which, if not disclosed in the prospectus included in
      the
      Registration Statement would cause such prospectus to include a material
      misstatement or to omit a material fact required to be stated therein in order
      to make the statements therein, in light of the circumstances in which they
      were
      made, not misleading. Nothing contained in this Section 8.2 shall be construed
      to mean that such persons or entities other than the Investor (without the
      written consent of the Investor prior to disclosure of such information as
      set
      forth in Section 8.2(a)) may not obtain non-public information in the course
      of
      conducting due diligence in accordance with the terms of this Agreement and
      nothing herein shall prevent any such persons or entities from notifying the
      Company of their opinion that based on such due diligence by such persons or
      entities, that the Registration Statement contains an untrue statement of a
      material fact or omits a material fact required to be stated in the Registration
      Statement or necessary to make the statements contained therein, in light of
      the
      circumstances in which they were made, not misleading.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      IX

    


    Legends;
      Transfer Agent Instructions

    


    Section
      9.1. Legends.
      Unless
      otherwise provided below, each certificate representing Registrable Securities
      will bear the following legend or equivalent (the “Legend”):

    


    THE
      SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      U.S.
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER
      APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
      FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER
      SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
      MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED
      OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
      ACT OR PURSUANT TO A TRANSACTION THAT IS EXEMPT FROM SUCH
      REGISTRATION.

    


    Section
      9.2. No
      Other Legend or Stock Transfer Restrictions.
      No
      legend other than the one specified in Section 9.1 has been or shall be placed
      on the share certificates representing the Registrable Securities and no
      instructions or “stop transfer orders,” “stock transfer restrictions,” or other
      restrictions have been or shall be given to the Company’s transfer agent with
      respect thereto other than as expressly set forth in this Article
      IX.

    


    Section
      9.3. Investor’
      Compliance.
      Nothing
      in this Article shall affect in any way the Investor’s obligations to comply
      with all applicable securities laws upon resale of the Common Stock including
      delivery of the resale prospectus to the purchaser of such securities.


    


    Section
      9.4. Transfers
      without Registration.
      If the
      Investor provides the Company with an opinion of counsel, in generally
      acceptable form, that registration of a resale by the Investor of any Securities
      is not required under the Securities Act, the Company shall permit the transfer
      and, in the case of the Conversion Shares, promptly instruct its transfer agent
      to issue one or more certificates in such name and in such denominations as
      specified by the Investor and, if such opinion provides that such legends can
      be
      removed, without any restrictive legends. 

    


    Section
      9.5. Injunctive
      Relief.
      The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to the Investor by vitiating the intent and purpose of the
      transaction contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for a breach of its obligations under this Article XI will be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of the provisions of this Article XI, that the Investor shall be
      entitled, in addition to all other available remedies, to an injunction
      restraining any breach and requiring immediate issuance and transfer, without
      the necessity of showing economic loss and without any bond or other security
      being required.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      X

    


    Choice
      of Law; Jurisdiction

    


    Section
      10.1. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York applicable to contracts made in the State of Nevada without
      regard to its principles of conflicts of laws. 

    


    Section
      10.2. Jurisdiction.
      Each of
      the parties consents to the jurisdiction of the United States District Court
      for
      the Southern District of New York or the state courts of the State of New York
      located in New York City, New York in connection with any dispute arising under
      this Agreement and hereby waives, to the maximum extent permitted by law, any
      objection, including any objection based on forum non conveniens, to the
      bringing of any such proceeding in such jurisdictions.

    


    ARTICLE
      XI

    


    Assignment

    


    Neither
      this Agreement nor any rights of the Investor or the Company hereunder may
      be
      assigned by any party to any other person. Notwithstanding the foregoing, (a)
      the provisions of this Agreement shall inure to the benefit of, and be
      enforceable by, any permitted transferee of any Securities, and (b) upon the
      prior written consent of the Company, which consent shall not unreasonably
      be
      withheld or delayed, the Investor’s interest in this Agreement may be assigned
      at any time, in whole or in part, to any other Person (including any affiliate
      of the Investor) who agrees to make the representations and warranties contained
      in Article III and who agrees to be bound by the terms of this
      Agreement.

    


    ARTICLE
      XII

    


    Notices

    


    All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) hand delivered, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by facsimile, addressed as set forth below or to such other address
      as such party shall have specified most recently by written notice. Any notice
      or other communication required or permitted to be given hereunder shall be
      deemed effective (a) upon hand delivery or delivery by facsimile, with accurate
      confirmation generated by the transmitting facsimile machine, at the address
      or
      number designated below (if delivered on a business day during normal business
      hours where such notice is to be received), or the first business day following
      such delivery (if delivered other than on a business day during normal business
      hours where such notice is to be received) or (b) on the first business day
      following the date of sending by reputable courier service, fully prepaid,
      addressed to such address, or (c) upon actual receipt of such mailing, if
      mailed. The addresses for such communications shall be:

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      
        	
                If
                  to the Company:

              	
                INCA
                  Designs, Inc.

              
	 	
                53
                  West 36th
                  Street, 9th
                  Floor

              
	 	
                New
                  York, NY 10018

              
	 	
                Attn: 
                  ___________________, President

              
	 	
                Tel:  
                   (212) 967-5212

              
	 	
                Fax:   (212)
                  967-5218

              
	 	 
	
                with
                  a copy to:

              	 
	
                (which
                  shall not constitute notice)

              	 
	
                 

              	
                .

              
	 	
                Telephone:

              
	 	
                Facsimile:

              
	 	 
	
                If
                  to the Investor:

              	
                As
                  set forth on the signature page
                  hereto

              


      

    

    
    

     

    Either
      party hereto may from time to time change its address or facsimile number for
      notices under this Article XII by giving written notice of such changed address
      or facsimile number to the other party hereto as provided in this Article
      XII.

    


    ARTICLE
      XIII

    


    Miscellaneous

    


    Section
      13.1. Counterparts/
      Facsimile/ Amendments.
      This
      Agreement may be executed in multiple counterparts, each of which may be
      executed by fewer than all of the parties, and shall be deemed to be an original
      instrument that shall be enforceable against the parties actually executing
      such
      counterparts and all of which together shall constitute one and the same
      instrument. Except as otherwise stated herein, in lieu of the original
      documents, a facsimile transmission or copy of the original documents shall
      be
      as effective and enforceable as the original. This Agreement may be amended
      only
      by a writing executed by all parties.

    


    Section
      13.2. Entire
      Agreement.
      This
      Registration Rights Agreement, the other Transaction Documents, which include,
      but are not limited to, the Notes and the Warrants, set forth the entire
      agreement and understanding of the parties relating to the subject matter hereof
      and supersede all prior and contemporaneous agreements, negotiations and
      understandings between and among the parties, both oral and written, relating
      to
      the subject matter hereof. The terms and conditions of all Exhibits to this
      Agreement are incorporated herein by this reference and shall constitute part
      of
      this Agreement as is fully set forth herein.

    


    Section
      13.3. Severability.
      In the
      event that any provision of this Agreement becomes or is declared by a court
      of
      competent jurisdiction to be illegal, unenforceable or void, this Agreement
      shall continue in full force and effect without such provision; provided that
      such severability shall be ineffective if it materially changes the economic
      benefit of this Agreement to any party.

    


    Section
      13.4. Headings.
      The
      headings used in this Agreement are used for convenience only and are not to
      be
      considered in construing or interpreting this Agreement. 

    


    Section
      13.5. Number
      and Gender.
      One or
      more Investor may be parties to this Agreement, which Investor may be natural
      persons or entities. All references to plural Investor shall apply equally
      to a
      single Investor if there is only one Investor, and all references to the
      Investor as “it” shall apply equally to a natural person.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Section
      13.6. Reporting
      Entity for the Common Stock.
      The
      reporting entity relied upon for the determination of the trading price or
      trading volume of the Common Stock on any given Trading Day for the purposes
      of
      this Agreement shall be Bloomberg, L.P. or any successor thereto. The written
      agreement of the Investors holding more than a majority of the Registrable
      Securities and the Company shall be required to employ any other reporting
      entity.

    


    Section
      13.7. Replacement
      of Certificates.
      Upon
      (i) receipt of evidence reasonably satisfactory to the Company of the loss,
      theft, destruction or mutilation of a certificate representing any Securities
      and (ii) in the case of any such loss, theft or destruction of such certificate,
      upon delivery of an indemnity agreement or security reasonably satisfactory
      in
      form to the Company (which shall not include the posting of any bond) or (iii)
      in the case of any such mutilation, on surrender and cancellation of such
      certificate, the Company at its expense will execute and deliver, in lieu
      thereof, a new certificate of like tenor.

    


    Section
      13.8. Fees
      and Expenses.
      Each of
      the Company and the Investor agrees to pay its own expenses incident to the
      performance of its obligations hereunder.

    


    Section
      13.9. Brokerage.
      Each of
      the parties hereto represents that it has had no dealings in connection with
      this transaction with any finder or broker who will demand payment of any fee
      or
      commission from the other party except for the Finders, whose fee shall be
      paid
      by the Company. The Company on the one hand, and the Investor, on the other
      hand, each agree to indemnify the other against and hold the other harmless
      from
      any and all liabilities to any person claiming brokerage commissions or finder’s
      fees on account of services purported to have been rendered on behalf of the
      indemnifying party in connection with this Agreement or the transactions
      contemplated hereby.

    


    Section
      13.10. Publicity.
      The
      Company agrees that it will not issue any press release or other public
      announcement of the transactions contemplated by this Agreement without the
      prior consent of the Investor, which shall not be unreasonably withheld nor
      delayed by more than two (2) Trading Days from their receipt of such proposed
      release. No release shall name the Investor without their express consent.
      Notwithstanding the foregoing, the Company may file such information as is
      required by the rules and regulations of the SEC, in the reasonable opinion
      of
      the Company’s counsel.

    


    Section
      13.11. Further
      Assurances.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as the other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

    


    Section
      13.12. Termination.
      If the
      initial Closing shall not have occurred on or before fifteen (15) business
      days
      from the date hereof due to the Company’s or the Investor’s failure to satisfy
      the conditions set forth in Article II above (and the nonbreaching party’s
      failure to waive such unsatisfied condition(s)), the nonbreaching party shall
      have the option to terminate this Agreement with respect to such breaching
      party
      at the close of business on such date without liability of any party to any
      other party. Upon such termination, the Closing Agent will return funds
      deposited by Investor in the Closing Agent’s account, within a reasonable amount
      of time after Investors provide Closing agent with a copy of such notices of
      termination, and appropriate written instructions as to the account to which
      such funds should be returned.

    


    Section
      13.13. No
      Strict Construction.
      The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    
Section
      13.14. Remedies.
      The
      Investor and each Holder of Securities shall have all rights and remedies set
      forth in this Agreement and the Notes and all rights and remedies that such
      Holders have been granted at any time under any other agreement or contract
      and
      all of the rights that such Holders have under any law. Any person or entity
      having any rights under any provision of this Agreement shall be entitled to
      enforce such rights specifically (without posting a bond or other security),
      to
      recover damages by reason of any breach of any provision of this Agreement
      and
      to exercise all other rights granted by law.

    


    Section
      13.15. Payment
      Set Aside.
      To the
      extent that the Company makes a payment or payments to the Investor hereunder
      or
      pursuant to the Notes or the Investor enforce or exercise their rights hereunder
      or thereunder, and such payment or payments or the proceeds of such enforcement
      or exercise or any part thereof are subsequently invalidated, declared to be
      fraudulent or preferential, set aside, recovered from, disgorged by or are
      required to be refunded, repaid or otherwise restored to the Company, by a
      trustee, receiver or any other person or entity under any law (including,
      without limitation, any bankruptcy law, state or federal law, common law or
      equitable cause of action), then to the extent of any such restoration the
      obligation or part thereof originally intended to be satisfied shall be revived
      and continued in full force and effect as if such payment had not been made
      or
      such enforcement or setoff had not occurred.

    


    14. REGISTRATION
      RIGHTS. 

    


    The
      Investor shall have the rights of registration set forth in this Section 14
      with
      respect to any or all of the Warrant Shares and shares underlying the
      Notes.

    


    14.1 Joining
      Registration Statements.
      If at
      any time or times, the Company proposes to file one or more Registration
      Statements(except for the Registration Statement for the First Montauk
      Investors) on Form SB-2, S-1, S-2, S-3 or other appropriate form for the
      registration of its Common Stock or other equity securities under the Act for
      a
      public offering, whether or not underwritten (excluding the issuance of shares
      pursuant to employees' options, incentive or similar plans, or in connection
      with an acquisition, merger or exchange of securities which involves no
      distribution for cash), it shall give a Notice of Registration to the Investor
      and shall include in each Registration Statement referred to in such notice
      all
      such Shares and Warrant Shares with respect to which the Investor shall have
      delivered to the Company a Notice of Intent to Sell within 20 days after the
      Company has given its Notice of Registration. Such Notice of Registration shall
      be given not later than ten days prior to the filing of any such Registration
      Statement and such Registration Statement will not be filed unless the Investor
      has at least ten days actual notice. All expenses incurred by the Company in
      complying with the foregoing registration requirements (except fees and
      disbursements of counsel for the Investor; underwriting discounts, commissions
      or similar expenses to be incurred in connection with the sale of Shares and
      Warrant Shares to be registered for the Investor) shall be borne by the Company.
      The Company shall have no obligation to register any Securities under this
      Section 7.1 unless the Investor agrees to join in the underwriting arrangements,
      if any, proposed for the other securities being registered on the same terms
      as
      other similarly situated participants in the distribution, unless such
      underwriters decline to include the Shares and Warrant Shares therein in which
      event the Company may delay the delivery of prospectuses to the Investor and
      the
      Investor will agree not to sell the Shares or Warrant Shares registered for
      a
      period not in excess of 90 days from the effective date of such Registration
      Statement. 

    


    14.2 Notice
      of Intent to Sell and Notice of Registration.“Notice
      of Intent to Sell” shall mean a written notice signed by the Investor (i)
      setting forth the number of Shares which the Investor desires to have registered
      for sale, (ii) representing that the Investor has a present intention to sell
      the same, (iii) setting forth the intended method by which such sale will be
      effected and the names of the underwriters, if any; whose services are intended
      to be used to effect such sale, and (iv) agreeing to execute all consents,
      powers of attorneys, registration statements, and other documents required
      in
      order to permit such Registration Statement to be made effective and carry
      out
      the distribution. “Notice of Registration” shall mean a written notice signed by
      an officer of the Company and setting forth the approximate date on which it
      intends to file a Registration Statement on Form SB-2, S-1, S-2 or S-3 or other
      appropriate form for the registration of its Common Stock pursuant to the Act,
      and the approximate date on which it contemplates such Registration Statement
      will become effective whether the Registration Statement is being
      filed.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    14.3 Indemnification.The
      obligation of the Company to register Shares and Warrant Shares for the Investor
      pursuant to this Agreement shall be subject to the receipt by the Company of
      an
      agreement from the Investor and each underwriter of any securities registered
      for the Investor, in form and substance satisfactory to the Company,
      indemnifying the Company against liability arising out of or based upon any
      untrue statement or alleged untrue statement of a material fact in the
      Registration Statement or the omission or alleged omission to state therein
      any
      material fact required to be stated therein or necessary in order to make the
      statements therein not misleading, if such statement or omission was made by
      the
      Company in reliance upon and in conformity with written information furnished
      to
      the Company specifically for use in such Registration Statement by or on behalf
      of the Investor with respect to the Investor or any underwriter of any
      securities registered for the Investor. In connection with registration under
      the Act of securities owned by the Investor, the Company hereby agrees to
      indemnify the Investor and each underwriter of any securities registered for
      the
      Investor against liability arising out of or based upon any untrue statement
      or
      alleged untrue statement of a material fact in a Registration statement filed
      by
      the Company pursuant hereto, or the omission or alleged omission to state in
      such Registration Statement any material fact required to be stated therein
      or
      necessary in order to make the statement therein not misleading, other than
      any
      such statement included in, or omission from, such Registration Statement by
      the
      Company in reliance upon and in conformity with written information furnished
      to
      the Company, specifically for use therein by or on behalf of the Investor with
      respect to the Investor or by any underwriter of the securities included therein
      and to join in an underwriting agreement having usual and customary terms,
      including customary representations, warranties and agreements (in addition
      to
      the indemnification agreements provided by this Section 14.3).

    


    14.4 Certain
      Terms and Conditions.
      The
      following provisions shall be applicable to all registration rights granted
      in
      this Section 14:

    


    
      	 	
              (a)

            	
              the
                Company shall have the right to require the Investor, as a condition
                to
                the Investor exercising its rights under 14.1 to make offerings in
                the
                same manner as other shares registered therein for sale by the Company
                by
                way of a firm underwriting;

            


    

    


    
      	 	
              (b)

            	
              in
                the event that the Investor was afforded an opportunity to join in
                a
                Registration Statement under Section 14.1 (pursuant to which sales
                were
                consummated), and either declined to join therein or included securities
                therein, then the Investor may not request to be included in a
                Registration Statement under Section 14.1 for a period of six (6)
                months
                after the Investor received the Notice of Registration with respect
                to the
                Registration Statement in which the Investor participated or declined
                to
                participate;

            


    

    


    
      	 	
              (c)

            	
              the
                Company shall not be required to maintain any Registration Statement
                under
                Section 14.1 in effect for a period of more than nine months; provided,
                however, that this period shall be extended at the request of the
                Investor;

            


    

    


    
      	 	
              (d)

            	
              the
                Company need not include the Warrant Shares or shares underlying
                the Notes
                owned by the Investor in any Registration Statement provided for
                under
                Section 14.1 if in the opinion of counsel for the Company satisfactory
                to
                counsel for the Investor, registration of such securities under the
                Act is
                not necessary for the Investor to dispose of such securities in a
                public
                offering and distribution in the open market in compliance with the
                Act;
                provided, in such case the opinion of such counsel shall be in writing
                addressed to the Investor and shall be rendered within twenty (20)
                days
                after the Notice of Intent to Sell is received by the Company;
                and

            


    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (e)

            	
              the
                Company shall have the right to delay the effective date or withdraw
                any
                Registration Statement it files.

            


    

     

    14.5 Rule
      144 and Other Exemption Requirements.
      The
      Company agrees to:

    


    
      	 	
              (a)

            	
              make
                and keep available adequate current public information with respect
                to the
                Company, as those terms are understood and defined in Rule 144 under
                the
                Act;

            


    

    


    
      	 	
              (b)

            	
              file
                with the Commission in a timely manner all reports and other documents
                required of the Company under the Act and the Securities Exchange
                Act of
                1934 (the “Exchange Act”);

            


    

    


    
      	 	
              (c)

            	
              furnish
                to Investor, upon request, a written statement by the Company as
                to its
                compliance with the reporting requirements of said Rule 144, and
                the Act
                and the Exchange Act, a copy of the most recent annual or quarterly
                report
                of the Company, and such other reports and documents of the Company
                as the
                Investor may reasonably request to avail itself of any similar rule
                or
                regulation of the Commission allowing it to sell any such securities
                without registration; and

            


    

    


    
      	 	
              (d)

            	
              the
                Company will transfer the Warrant Shares and shares underlying the
                Notes
                at the request of Investor provided it receives an opinion of counsel,
                reasonably acceptable to the Company, that such transfer would not
                violate
                the Act or applicable state securities laws and will remove the
                restrictive legend from the certificate for the shares at the request
                of
                Investor provided it receives an opinion of counsel reasonably
                satisfactory to the Company that the presence of such legend is not
                required to assure compliance with the Act or applicable state securities
                laws.

            


    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      by
      the undersigned, thereunto duly authorized, as of the date first set forth
      above.

    

      
        	 	
                INCA
                  DESIGNS, INC.

              
	 	 
	 	 
	 	
                By:

              	 
	 	 	
                Name:

              
	 	 	
                Title:

              
	 	 
	 	
                Closing
                  Date:

              
	 	 
	 	 
	 	
                Investor:

              
	 	 
	 	 
	 	 


      



    
      	
              Jurisdiction
                of Incorporation

               or
                Residence: 

               

              Principal
                Amount of Notes

              Purchased:
                $

               

              Number
                of Warrants: $

               

              Purchase
                Price (principal amount of

              Notes
                Purchased): $

            	
              Address
                of Investor:

               

               

               

               

               

               

              Facsimile:
                ________________________

              E-Mail
                Address:____________________

            


    

    


    Exhibits:

    


    Exhibit
      A
      - Note

    Exhibit
      B
      - Warrant 

     

    
      
        
        

      

      
        22