Document:

THIS
      REGISTRATION RIGHTS AGREEMENT REPLACES A REGISTRATION RIGHTS AGREEMENT BETWEEN
      ___________________________________ AND S2 NEW YORK DESIGN CORP. THIS
      REGISTRATION RIGHTS AGREEMENT ACCOMPANIES A SUBORDINATED CONVERTIBLE NOTE IN
      THE
      AMOUNT OF $_____________ AND WARRANTS TO PURCHASE _____________ SHARES. THE
      $_________ NOTE WAS ASSUMED AND REISSUED BY INCA DESIGNS, INC. PURSUANT TO
      TERMS
      OF THE SECURITIES EXCHANGE AGREEMENT BETWEEN INCA DESIGNS, INC. AND S2 NEW
      YORK
      DESIGN CORP. DATED _______________, 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. 

    

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement (this “Agreement”)
      is
      made and entered into as of _________________, by and between INCA
      DESIGNS, INC.,
      (the
“Company”), and ______________________________ (the
      “Purchaser”).

     

    WHEREAS,
      this Agreement is made pursuant to the Securities Purchase Agreement, dated
      as
      of the date hereof, among the Company and the Purchaser (the “Purchase
      Agreement”),
      and

    

    WHEREAS,
      pursuant to the Purchase Agreement, the Company has agreed to issue and sell
      to
      the Purchaser and the Purchaser has agreed to purchase from the Company, an
      aggregate principal amount of $_________ of the Company’s Subordinated
      Convertible Note (the “Note”), which is convertible into shares of the Company’s
      common stock, $.0001 par value per share as set forth in the Note and
      ___________ Warrants to purchase shares of the Company’s common
      stock.

    

    NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
      and for other good and valuable consideration the receipt and adequacy of which
      are hereby acknowledged, the Company and the Purchaser agree as
      follows:

     

    1. Piggy
      Back Rights.
      If at
      any time the Company shall determine to prepare and file with the Securities
      and
      Exchange Commission (the “Commission”) a registration statement relating to an
      offering for its own account or the account of others under the Securities
      Act
      of 1933, as amended, and the rules and regulations promulgated thereunder (the
      “Securities Act”), of any of its equity securities, other than (a) on Form S-4
      or Form S-8 (each as promulgated under the Securities Act) or their then
      equivalents relating to equity securities to be issued solely in connection
      with
      any acquisition of any entity or business, (b) a registration relating solely
      to
      a Commission Rule 145 transaction, (c) equity securities issuable in connection
      with stock option or other employee benefit plans, or (d) the first public
      offering of the capital stock of the Company to the general public which is
      effected pursuant to a registration statement filed with, and declared effective
      by, the Commission under the Securities Act (an “Initial Public Offering”), then
      the Company shall send to the Holder written notice of such determination and,
      if within fifteen days after receipt of such notice, the Holder shall so request
      in writing, the Company shall include in such registration statement all or
      any
      part of the shares of capital stock issuable upon conversion in full of the
      Note
      and shares issuable upon the exercise of the Warrant (the “Registrable
      Securities”) the Holder requests to be registered, subject, in the event of an
      underwritten offering, to customary cutbacks requested by the managing
      underwriter of all selling stockholders thereunder, on a pro-rata basis with
      any
      other selling stockholders.

    

    2. Right
      to Terminate Registration.
      The
      Company shall have the right to terminate or withdraw any registration initiated
      by it under Section 1 prior to the effectiveness of such registration whether
      or
      not the Purchaser has elected to include Registrable Securities in such
      registration. The Purchaser agrees that, upon receipt of notice from the Company
      that the Company has determined to withdraw any registration statement pursuant
      to this subsection, such Purchaser will discontinue its disposition of
      securities pursuant to such registration statement and, if so directed by the
      Company, will deliver to the Company (at the Company’s expense) all copies,
      other than permanent file copies, then in such Purchaser’s possession of the
      prospectus covering securities which was in effect at the time of such
      notice.

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    3. Expenses
      of Registration.
      All
      expenses, other than Selling Expenses (as defined below), incurred by the
      Company in complying with this Agreement, including, without limitation, all
      registration, qualification and filing fees, printing expenses, escrow fees,
      fees and disbursements of counsel for the Company, blue sky fees and expenses
      and the expense of any special audits incident to or required by any such
      registration (“Registration Expenses”) incurred in connection with all
      registrations pursuant to this Agreement shall be borne by the Company;
      provided, however, that in the event the Purchaser alone, but not the Company,
      initiates the request that a registration be withdrawn prior to its
      effectiveness, all Registration Expenses incurred in connection with that
      registration shall be borne by the Purchaser. All underwriting discounts,
      selling commissions and stock transfer taxes applicable to the securities
      registered by the Purchaser and, except as set forth above, all fees and
      disbursements of counsel for the Purchaser (“Selling Expenses”) relating to
      securities registered on behalf of the Purchaser shall be borne by the
      Purchaser.

    

    4. Registration
      Procedures.
      In the
      case of each registration, qualification or compliance to be effected by the
      Company pursuant to this Agreement, the Company will keep the Purchaser advised
      in writing as to the initiation of each registration, qualification and
      compliance and as to the completion thereof. The Company will:

    

    (a) use
      its
      reasonable best efforts to effect the registration and the sale of the
      Registrable Securities in accordance with the intended method of disposition
      thereof and pursuant thereto the Company will as expeditiously as
      possible;

    

    (b) prepare
      and file with the Commission a registration statement with respect to such
      Registrable Securities and use its reasonable best efforts to cause such
      registration statement to become effective (provided that before filing a
      registration statement or prospectus or any amendments or supplements thereto,
      the Company will furnish to the counsel selected by the Purchaser copies of
      all
      such documents proposed to be filed);

    

    (c) prepare
      and file with the Commission such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as may
      be
      necessary to keep such registration statement effective for a period of not
      less
      than 120 days and comply with the provisions of the Securities Act with respect
      to the disposition of all securities covered by such registration statement
      during such period in accordance with the intended methods of disposition by
      the
      Purchaser set forth in such registration statement;

    

    (d) during
      the period in which the Company is required under the provisions hereof to
      keep
      a registration statement effective, furnish to the Purchaser such number of
      copies of such registration statement, each amendment and supplement thereto,
      the prospectus included in such registration statement (including each
      preliminary prospectus) and such other documents as Purchaser may reasonably
      request in order to facilitate the disposition of the Registrable Securities
      owned by Purchaser;

    

    (e) use
      its
      reasonable best efforts to register or qualify such Registrable Securities
      under
      such other securities or blue sky laws of such jurisdictions as Purchaser
      reasonably requests and do any and all other acts and things which may be
      reasonably necessary or advisable to enable Purchaser to consummate the
      disposition in such jurisdictions of the Registrable Securities owned by
      Purchaser (provided that the Company will not be required to (i) qualify
      generally to do business in any jurisdiction where it would not otherwise be
      required to qualify but for this subparagraph, (ii) subject itself to taxation
      in any such jurisdiction where it would not otherwise be subject to taxation
      but
      for this subparagraph or (iii) consent to general service of process in any
      such
      jurisdiction where it would not otherwise be subject to service of process
      but
      for this subparagraph);

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    (f) notify
      the Purchaser any time the Company becomes aware a prospectus relating thereto
      is required to be delivered under the Securities Act, of the happening of any
      event as a result of which the prospectus included in such registration
      statement contains an untrue statement of a material fact or omits any fact
      necessary to make the statements therein not misleading, and the Company shall
      prepare a supplement or amendment to such prospectus so that, as thereafter
      delivered to the purchasers of such Registrable Securities, such prospectus
      will
      not contain an untrue statement of a material fact or omit to state any fact
      necessary to make the statements therein not misleading;

    

    (g) use
      its
      reasonable best efforts to cause all such Registrable Securities to be listed
      on
      each securities exchange on which similar securities issued by the Company
      are
      then listed and, if not so listed, to be listed on the NASD automated quotation
      system and, if listed on the NASD automated quotation system, use its reasonable
      best efforts to secure designation of all such Registrable Securities covered
      by
      such registration statement as a NASDAQ “national market system security” within
      the meaning of Rule 11Aa2-1 of the Commission or, failing that, use its best
      efforts to secure NASDAQ authorization for such Registrable
      Securities;

    

    (h) provide
      a
      transfer agent and registrar for all such Registrable Securities not later
      than
      the effective date of such registration statement;

    

    (i) enter
      into such customary agreements (including underwriting agreements in customary
      form, provided that such underwriting agreement shall be reasonably satisfactory
      to the Company) and take all such other actions as the holders of a majority
      of
      the Registrable Securities being sold or the underwriters, if any, reasonably
      request in order to expedite or facilitate the disposition of such Registrable
      Securities (including, without limitation, (i) effecting a stock split or a
      combination of shares, and (ii) not effecting any public sale or distribution
      of
      its equity securities, or any securities convertible into or exchangeable or
      exercisable for such securities, during the seven days prior to and during
      the
      180-day period beginning on the effective date of any underwritten registration
      (except as part of such underwritten registration or pursuant to registrations
      on Form S-8 or any successor form), unless the underwriters managing the
      registered public offering otherwise agree;

    

    (j) upon
      receipt and execution of such confidentiality agreements as the Company may
      reasonably request from parties who are not otherwise subject to confidentiality
      obligations because of the nature of their profession (e.g., underwriters,
      attorneys and accountants), make available for inspection by the Purchaser,
      any
      underwriter participating in any disposition pursuant to such registration
      statement and any attorney, accountant or other agent retained by Purchaser
      or
      such underwriter, all financial and other records, pertinent corporate documents
      and properties of the Company, and cause the Company’s officers, directors,
      employees and independent accountants to supply all information reasonably
      requested by Purchaser or any such underwriter, attorney, accountant or agent
      in
      connection with such registration statement;

    

    (k) otherwise
      use its reasonable best efforts to comply with all applicable rules and
      regulations of the Commission; and

    

    (l) in
      the
      event of the issuance of any stop order suspending the effectiveness of a
      registration statement, or of any order suspending or preventing the use of
      any
      related prospectus or suspending the qualification of any common stock included
      in such registration statement for sale in any jurisdiction, the Company will
      use its reasonable best efforts promptly to obtain the withdrawal of such
      order.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    5. Indemnification.

    

    (a) The
      Company agrees to indemnify, to the extent permitted by law, each holder of
      Registrable Securities, its officers and directors and each person who controls
      such holder (within the meaning of the Securities Act) against all losses,
      claims, damages, liabilities and expenses caused by any violation or alleged
      violation by the Company of the Securities Act, the Securities Exchange Act
      of
      1934, as amended (the “Exchange Act”), any state securities law or any rule or
      regulation promulgated under the Securities Act, the Exchange Act or any state
      securities law, any untrue or alleged untrue statement of material fact
      contained in any registration statement, prospectus or preliminary prospectus
      or
      any amendment thereof or supplement thereto or any omission or alleged omission
      of a material fact required to be stated therein or necessary to make the
      statements therein not misleading, except insofar as the same are caused by
      or
      contained in any affidavits or written information supplied or withheld from
      the
      Company relating to such holder’s ownership of Registrable Securities or as
      otherwise required under the Securities Act furnished by such holder expressly
      for use in such registration statement or by such holder’s failure to deliver a
      copy of the registration statement or prospectus or any amendments or
      supplements thereto after the Company has timely furnished such holder with
      the
      number of copies of the same reasonably requested by such holder.

    

    (b) In
      connection with any registration statement in which Purchaser is participating,
      Purchaser will furnish to the Company in writing such information and affidavits
      relating to such Purchaser’s ownership of Registrable Securities or as otherwise
      required under the Securities Act as the Company reasonably requests for use
      in
      connection with any such registration statement or prospectus and, to the extent
      permitted by law, will indemnify the Company, its directors and officers and
      each person who controls the Company (within the meaning of the Securities
      Act)
      against any losses, claims, damages, liabilities and expenses resulting from
      any
      untrue or alleged untrue statement of material fact contained in the
      registration statement, prospectus or preliminary prospectus or any amendment
      thereof or supplement thereto or any omission or alleged omission of a material
      fact required to be stated therein or necessary to make the statements therein
      not misleading, but only to the extent that such untrue statement or omission
      is
      contained in any information or affidavit so furnished in writing by such holder
      which was expressly provided for use in such registration statement and was
      included in such registration statement in reliance on and in conformity with
      such written information or affidavit.

    

    (c) Any
      person entitled to indemnification hereunder will (i) give prompt written notice
      to the indemnifying party of any claim with respect to which it seeks
      indemnification and (ii) unless in such indemnified party’s reasonable judgment
      a conflict of interest between such indemnified and indemnifying parties may
      exist with respect to such claim, permit such indemnifying party to assume
      the
      defense of such claim with counsel reasonably satisfactory to the indemnified
      party. If such defense is assumed or not defended because of a conflict of
      interest pursuant to clause (ii) of the preceding sentence, the indemnifying
      party will not be subject to any liability for any settlement made by the
      indemnified party without its consent (but such consent will not be unreasonably
      withheld). An indemnifying party who is not entitled to, or elects not to,
      assume the defense of a claim will not be obligated to pay the fees and expenses
      of more than one counsel for all parties indemnified by such indemnifying party
      with respect to such claim, unless in the reasonable judgment of any indemnified
      party a conflict of interest may exist between such indemnified party and any
      other of such indemnified parties with respect to such claim.

    

    (d) The
      indemnification provided for under this Agreement will remain in full force
      and
      effect regardless of any investigation made by or on behalf of the indemnified
      party or any officer, director or controlling person of such indemnified party
      and will survive the transfer of securities.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (e) The
      Company also agrees to make such provisions, as are requested by any indemnified
      party, for contribution to such party in the event the Company’s indemnification
      is unavailable for any reason. The Company shall contribute to the amount paid
      or payable by such indemnified party as a result of such loss, liability, claim,
      damage, or expense in such proportion as is appropriate to reflect the relative
      fault of the indemnified party on the one hand and of the Company on the other
      in connection with the violations, statements or omissions that resulted in
      such
      loss, liability, claim, damage or expense as well as any other relevant
      equitable considerations. The relative fault of the indemnified party and of
      the
      Company shall be determined by reference to, among other things, whether the
      untrue or alleged untrue statement of a material fact or the omission to state
      a
      material fact relates to information supplied by the indemnified party or by
      the
      Company and the parties’ relative intent, knowledge, access to information, and
      opportunity to correct or prevent such statement or omission.

    

    6. Termination
      of Registration Rights.
      The
      Company’s obligations pursuant to Section 1 shall expire upon the earlier to
      occur of the following: (a) when all Registrable Securities held by the
      Purchaser have been sold or transferred in any manner to any person or entity,
      including, but not limited to, sales pursuant to a registration statement,
      Rule
      144 sales or otherwise, (b) at such time as all Registrable Shares of the
      Purchaser can be sold in any three-month period under the Commission’s Rule 144,
      or (c) five (5) years after an Initial Public Offering.

    

    7. Stand-Off
      Agreement.
      So long
      as the Company’s obligations pursuant to Section 1 have not expired, the
      Purchaser, if requested by the Company and an underwriter of Common Stock or
      other securities of the Company, shall agree not to sell or otherwise transfer
      or dispose of any Registrable Securities or other securities of the Company
      (except for those securities being registered) held by such Purchaser for a
      specified period of time (not to exceed 180 days) following the effective date
      of a registration statement filed in connection with the Initial Public
      Offering; provided, (a) all employees, officers, directors, and greater than
      one
      percent (1%) preferred stock or Common Stock holders enter into agreements
      in
      exactly the same form, and (b) that such agreement shall be in a form reasonably
      satisfactory to the Company and such underwriter. The Company may impose
      stop-transfer instructions with respect to the Registrable Securities or other
      securities subject to the foregoing restriction until the end of the stand-off
      period.

    

    8. Miscellaneous.

    

    (a) Governing
      Law.
      This
      Agreement shall be governed in all respects by the internal laws of the State
      of
      New York.

    

    (b) Successors
      and Assigns.
      The
      provisions hereof shall inure to the benefit of, and be binding upon, the
      successors, permitted assigns, heirs, executors and administrators of the
      parties hereto.

    

    (c) Entire
      Agreement; Amendment.
      This
      Agreement, its attachments and the other documents delivered pursuant hereto
      constitute the full and entire understanding and agreement between the parties
      with regard to the subjects hereof and thereof. Except as expressly provided
      herein, neither this Agreement nor any term hereof may be amended, waived,
      discharged or terminated other than by a written instrument signed by the
      Company and the Purchaser.

    

    (d) Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      enforceable against the parties actually executing such counterparts, and all
      of
      which together shall constitute one instrument.

    

    (e) 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 said provision; provided that
      no
      such severability shall be effective if it materially changes the economic
      benefit of this Agreement to any party.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (f) Notices.
      Except
      in cases where oral or other notice is permitted by this Agreement, all notices,
      requests, demands and other communications hereunder shall be in writing and
      shall be deemed to have been given (i) when hand delivered, including delivery
      by messenger or courier service (or if delivery is refused, at the time of
      refusal), to the address set forth below, (ii) when received or refused as
      evidenced by the postal receipt if sent by United States mail as Certified
      Mail,
      Return Receipt Requested, with proper postage prepaid, addressed as set forth
      below or (iii) when received as evidenced by the transmission report of the
      telefax machine of the transmitting party acknowledging a good transmission
      if
      sent by telefax to the number set forth below:

     

    
      	
            	a.	
              If
                to Purchaser:

            

    

    
 

    INCA
      Designs, Inc.

    53
      West
      36th
      Street,
      9th
      Floor

    New
      York,
      NY 10018

    

    Any
      of
      the parties may change its mailing address or telecopy number, by giving notice
      to the other party pursuant to this Subsection.

    

    (g) Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not considered in construing or interpreting this Agreement.

    

    IN
      WITNESS WHEREOF, the parties below have executed this Agreement all as of the
      date first written above.

    

    
      	 	
              PURCHASER:

            
	 	 
	 	
               

            
	 	 
	 	 
	 	 
	 	 
	 	
              COMPANY:

            
	 	 
	 	
              INCA
                DESIGNS, INC.

            
	 	 
	 	 
	 	
              By:

            	 
	 	 	 	
              ,
                President

            

    

     

    
      
        
        

      

      
        6THIS
      SUBORDINATED CONVERTIBLE NOTE REPLACES A SUBORDINATED CONVERTIBLE NOTE BETWEEN
      GEORGE D. SCHAEFER AND S2 NEW YORK DESIGN CORP. THIS NOTE WAS ASSUMED AND
      REISSUED BY INCA DESIGNS, INC. PURSUANT TO TERMS OF THE SECURITIES EXCHANGE
      AGREEMENT BETWEEN INCA DESIGNS, INC. AND S2 NEW YORK DESIGN CORP. DATED MAY
      21,
      2007, MAKING THE ORIGINAL INSTRUMENT NULL AND VOID. ALL TERMS CONTAINED HEREIN
      ARE THE SAME AS THE TERMS IN THE ORIGINAL INSTRUMENT WITH THE EXCEPTION THAT
      THE
      NAME OF THE COMPANY WAS CHANGED TO INCA DESIGNS, INC. AND ALL TERMS OUTLINED
      THEREIN NOW RELATE TO THE COMMON STOCK OF INCA DESIGNS, INC.

    

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

    

    SUBORDINATED
      CONVERTIBLE NOTE

    

    FOR
      VALUE
      RECEIVED, INCA
      Designs, Inc.,
      a
      Nevada company (hereinafter called “Borrower”), hereby promises to pay to
George
      D. Schaefer,
      (the
“Holder”) or its registered assigns or successors in interest or order, without
      demand, the sum of One Hundred Thousand Dollars ($100,000) (“Principal Amount”),
      with simple and unpaid interest thereon, on or before September 30, 2007 (the
      “Maturity Date”), if not sooner paid.

    

    This
      Note
      has been entered into pursuant to the terms of a Securities Purchase Agreement
      between the Borrower, the Holder and certain other holders (the “Other Holders”)
      of convertible Notes (the “Other Notes”), dated of even date herewith (the
“Securities Purchase Agreement”), and shall be governed by the terms of such
      Securities Purchase Agreement. Unless otherwise separately defined herein,
      all
      capitalized terms used in this Note shall have the same meaning as is set forth
      in the Securities Purchase Agreement. The following terms shall apply to this
      Note:

    

    ARTICLE
      I

    

    INTEREST;
      AMORTIZATION

    

    1.1.  Interest
      Rate.
      Subject
      to Section 5.7 hereof, interest payable on this Note shall accrue at a rate
      per
      annum (the “Interest Rate”) of twenty-four percent (24%). Interest on the
      Principal Amount shall accrue from the date of this Note and shall be payable
      on
      the Maturity Date. Interest on the Notes will be computed on the basis of a
      360-day year of twelve 30-day months.

    

    1.2
      Default
      Interest Rate.
      Following the occurrence and during the continuance of an Event of Default,
      which, if susceptible to cure is not cured within twenty (20) days, otherwise
      then from the first date of such occurrence, the annual interest rate on this
      Note shall (subject to Section 5.7) automatically be increased to the highest
      percentage allowed by law. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
      II

    

    CONVERSION
      RIGHTS

    

    2.1. Holder’s
      Conversion Rights.
      Subject
      to Section 2.2, the Holder shall have the right, but not the obligation at
      any
      time from the date of issuance of this Note, to convert all or any portion
      of
      the then aggregate outstanding Principal Amount of this Note, into shares of
      Common Stock, subject to the terms and conditions set forth in this Article
      II
      at a forty percent (40%) discount to the market price of the Borrower’s Common
      Stock or $.50 per share, whichever is lower. The “market price” shall be
      determined at the average of the closing bid of the Company’s Common Stock for
      the twenty (20) trading days immediately prior to the date of conversion. The
      Holder may exercise such right by delivery to the Borrower of a written Notice
      of Conversion pursuant to Section 3.3. 

    

    2.2. Conversion
      Limitation.
      The
      Holder shall not be entitled to convert on a Conversion Date that amount of
      the
      Note in connection with that number of shares of Common Stock which would be
      in
      excess of the sum of (i) the number of shares of Common Stock beneficially
      owned
      by the Holder and its affiliates on a Conversion Date, (ii) any Common Stock
      issuable in connection with the unconverted portion of the Note, and (iii)
      the
      number of shares of Common Stock issuable upon the conversion of the Note with
      respect to which the determination of this provision is being made on a
      Conversion Date, which would result in beneficial ownership by the Holder and
      its affiliates of more than 4.99% of the outstanding shares of Common Stock
      of
      the Borrower on such Conversion Date. For the purposes of the provision to
      the
      immediately preceding sentence, beneficial ownership shall be determined in
      accordance with Section 13(d) of the Securities Exchange Act of 1934, as
      amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder
      shall not be limited to aggregate conversions of only 4.99% and aggregate
      conversion by the Holder may exceed 4.99%. The Holder shall have the authority
      and obligation to determine whether the restriction contained in this Section
      2.2 will limit any conversion hereunder and to the extent that the Holder
      determines that the limitation contained in this Section applies, the
      determination of which portion of the Notes are convertible shall be the
      responsibility and obligation of the Holder. The Holder may waive the conversion
      limitation described in this Section 2.2, in whole or in part, upon and
      effective after 61 days prior written notice to the Borrower. 

    

    2.3. Mechanics
      of Holder’s Conversion.
      

    

    (a) In
      the
      event that the Holder elects to convert any amounts outstanding under this
      Note
      into Common Stock, the Holder shall give notice of such election by delivering
      an executed and completed notice of conversion (a “Notice of Conversion”) to the
      Borrower, which Notice of Conversion shall provide a breakdown in reasonable
      detail of the Principal Amount, accrued interest and amounts being converted.
      The original Note is not
      required
      to be surrendered to the Borrower
      until
      all sums due under the Note have been paid. On each Conversion Date (as
      hereinafter defined) and in accordance with its Notice of Conversion, the Holder
      shall make the appropriate reduction to the Principal Amount, accrued interest
      and fees as entered in its records. Each date on which a Notice of Conversion
      is
      delivered or telecopied to the Borrower in accordance with the provisions hereof
      shall be deemed a “Conversion Date.” A form of Notice of Conversion
      to be employed by the Holder is annexed hereto as Exhibit A.

    

    (b) Pursuant
      to the terms of a Notice of Conversion, the Borrower will issue instructions
      to
      the transfer agent accompanied by an opinion of counsel, if so required by
      the
      Borrower’s transfer agent and shall cause the transfer agent to issue
      and
      deliver at such office to the Holder a certificate or certificates for the
      number of Common Shares to which such Holder shall be entitled as aforesaid.
      The
      person or persons entitled to receive the Common Shares issuable upon such
      conversion shall be treated for all purposes as the record holder or holders
      of
      such shares of Common Stock on the later of the date of the Conversion Notice
      or
      the date of compliance by the Holder with all the provisions of this Section
      2.3.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2.4. Conversion
      Mechanics.

     

    (a) The
      number of shares of Common Stock to be issued upon each conversion of this
      Note
      pursuant to this Article II shall be determined by dividing that portion of
      the
      Principal Amount and interest and fees to be converted, if any, by the then
      applicable Fixed Conversion Price .

    

    (b) The
      number and kind of shares or other securities to be issued upon conversion
      shall
      be subject to adjustment from time to time upon the happening of certain events
      while this conversion right remains outstanding, as follows:

    

    i. Merger,
      Sale of Assets, etc.
      If the
      Borrower at any time shall consolidate with or merge into or sell or convey
      all
      or substantially all its assets to any other corporation, this Note, as to
      the
      unpaid principal portion thereof and accrued interest thereon, shall thereafter
      be deemed to evidence the right to purchase such number and kind of shares
      or
      other securities and property as would have been issuable or distributable
      on
      account of such consolidation, merger, sale or conveyance, upon or with respect
      to the securities subject to the conversion or purchase right immediately prior
      to such consolidation, merger, sale or conveyance. The foregoing provision
      shall
      similarly apply to successive transactions of a similar nature by any such
      successor or purchaser. Without limiting the generality of the foregoing, the
      anti-dilution provisions of this Section shall apply to such securities of
      such
      successor or purchaser after any such consolidation, merger, sale or
      conveyance.

    

    ii. Reclassification,
      etc.
      If the
      Borrower at any time shall, by reclassification or otherwise, change the Common
      Stock into the same or a different number of securities of any class or classes,
      this Note, as to the unpaid principal portion thereof and accrued interest
      thereon, shall thereafter be deemed to evidence the right to purchase an
      adjusted number of such securities and kind of securities as would have been
      issuable as the result of such change with respect to the Common Stock
      immediately prior to such reclassification or other change.

    

    iii. Stock
      Splits, Combinations and Dividends.
      If the
      shares of Common Stock are subdivided or combined into a greater or smaller
      number of shares of Common Stock, or if a dividend is paid on the Common Stock
      in shares of Common Stock, the Conversion Price shall be proportionately reduced
      in case of subdivision of shares or stock dividend or proportionately increased
      in the case of combination of shares, in each such case by the ratio which
      the
      total number of shares of Common Stock outstanding immediately after such event
      bears to the total number of shares of Common Stock outstanding immediately
      prior to such event.

    

    (c) Whenever
      the Conversion Price is adjusted pursuant to Section 2.4(b) above, the Borrower
      shall promptly mail to the Holder a notice setting forth the Conversion Price
      after such adjustment and setting forth a statement of the facts requiring
      such
      adjustment.

    

    (d) Nothing
      herein contained shall prohibit the Company from raising additional funds at
      a
      purchase price higher than the Fixed Conversion Price and any issuance of shares
      under these circumstances will not effect he number of shares to be issued
      hereunder.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    2.5. Reservation.
      During
      the period the conversion right exists, Borrower will reserve from its
      authorized and unissued Common Stock not less than
      one
      hundred
      seventy-five
      percent
      (175%)
      of the
      number of shares to provide for the issuance of Common Stock upon the full
      conversion of this Note.
      Borrower represents that upon issuance, such shares will be duly and validly
      issued, fully
      paid and
      non-assessable. Borrower agrees that its issuance of this Note shall constitute
      full authority to its officers, agents, and transfer agents who are charged
      with
      the duty of executing and issuing stock certificates to execute and issue the
      necessary certificates for shares of Common Stock upon the conversion of this
      Note.

    

    2.6 Issuance
      of Replacement Note.
      Upon
      any partial conversion of this Note, a replacement Note containing the same
      date
      and provisions of this Note shall,
      at the
      written request of the Holder, be
      issued
      by the Borrower to the Holder for the outstanding Principal Amount of this
      Note
      and accrued interest which shall not have been converted or paid, provided
      Holder has surrendered an original Note to the Company. In the event that the
      Holder elects not to surrender a Note for reissuance upon partial payment or
      conversion, the Holder hereby indemnifies the Borrower against any and all
      loss
      or damage attributable to a third-party claim in an amount in excess of the
      actual amount then due under the Note.

    

    ARTICLE
      III

    

    EVENTS
      OF DEFAULT

    

    The
      occurrence of any of the following events of default (“Event of Default”) shall,
      at the option of the Holder hereof, make all sums of principal and interest
      then
      remaining unpaid hereon and all other amounts payable hereunder immediately
      due
      and payable, upon demand, without presentment, or grace period, all of which
      hereby are expressly waived, except as set forth below:

    

    3.1 Failure
      to Pay Principal or Interest.
      The
      Borrower fails to pay any installment of Principal Amount, interest or other
      sum
      due under this Note or any Transaction Document when due and such failure
      continues for a period of ten (10) business days after the due
      date.

    

    3.2 Breach
      of Covenant.
      The
      Borrower breaches any material covenant or other term or condition of the
      Securities Purchase Agreement, this Note or Transaction Document in any material
      respect and such breach, if subject to cure, continues for a period of ten
      (10)
      business days after written notice to the Borrower from the Holder.

    

    3.3 Breach
      of Representations and Warranties.
      Any
      material representation or warranty of the Borrower made herein, in the
      Securities Purchase Agreement, Transaction Document or in any agreement,
      statement or certificate given in writing pursuant hereto or in connection
      herewith or therewith shall be false or misleading in any material respect
      as of
      the date made and the Closing Date.

    

    3.4 Receiver
      or Trustee.
      The
      Borrower or any Subsidiary of Borrower shall make an assignment for the benefit
      of creditors, or apply for or consent to the appointment of a receiver or
      trustee for them or for a substantial part of their property or business; or
      such a receiver or trustee shall otherwise be appointed.

    

    3.5 Judgments.
      Any
      money judgment, writ or similar final process shall be entered or filed against
      Borrower or any subsidiary of Borrower or any of their property or other assets
      for more than $25,000
      and shall remain unvacated, unbonded or unstayed for a period of forty-five
      (45)
days.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    3.6 Non-Payment.
      The
      Borrower shall have received a notice of default, which remains uncured for
      a
      period of more than twenty (20) business days, on the payment of any one or
      more
      debts or obligations aggregating in excess of $25,000 beyond any applicable
      grace period;

    

    3.7 Bankruptcy.
      Bankruptcy, insolvency, reorganization or liquidation proceedings or other
      proceedings or relief under any bankruptcy law or any law, or the issuance
      of
      any notice in relation to such event, for the relief of debtors shall be
      instituted by or against the Borrower or any Subsidiary of Borrower and if
      instituted against them are not dismissed within sixty (60) days
      of
      initiation.

    

    3.8 Failure
      to Deliver Common Stock or Replacement Note.
      Borrower’s failure to timely deliver Common Stock to the Holder pursuant to and
      in the form required by this Note or the Securities Purchase Agreement, and,
      if
      requested by Borrower, a replacement Note,
      and
      such failure continues for a period of five (5) business days after the due
      date.

     

    3.9 Reverse
      Splits.
      The
      Borrower effectuates a reverse split of its Common Stock without twenty days
      prior written notice to the Holder.

    

    3.10 Cross
      Default.
      A
      default by the Borrower of a material term, covenant, warranty or undertaking
      of
      any Transaction Document or other agreement to which the Borrower and Holder
      are
      parties, or the occurrence of a material event of default under any such other
      agreement which is not cured after any required notice and/or cure
      period.

    

    ARTICLE
      IV

    

    MISCELLANEOUS

    

    4.1 Failure
      or Indulgence Not Waiver.
      No
      failure or delay on the part of Holder hereof in the exercise of any power,
      right or privilege hereunder shall operate as a waiver thereof, nor shall any
      single or partial exercise of any such power, right or privilege preclude other
      or further exercise thereof or of any other right, power or privilege. All
      rights and remedies existing hereunder are cumulative to, and not exclusive
      of,
      any rights or remedies otherwise available.

    

    4.2 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) personally served, (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 hand delivery, telegram, or 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 second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

      
        	
                for
                  the Company:

              	
                INCA
                  Designs, Inc.

              
	 	
                53
                  West 36th
                  Street, 9th
                  Floor

              
	 	
                New
                  York, NY 10018

              
	 	
                Tel:  
                  (212) 967-5212

              
	 	
                Fax:  (212)
                  967-5218

              
	 	 
	
                for
                  the Holder:

              	
                George
                  D. Schaefer

              
	 	
                3666
                  Shady Lane

              
	 	
                Palm
                  Harbor, FL 34683

              

      

    

    

    4.3 Amendment
      Provision.
      The
      term “Note” and all reference thereto, as used throughout this instrument, shall
      mean this instrument as originally executed, or if later amended or
      supplemented, then as so amended or supplemented.

    

    4.4 Assignability.
      This
      Note shall be binding upon the Borrower and its successors and assigns, and
      shall inure to the benefit of the Holder and its successors and
      assigns.

    

    4.5 Cost
      of Collection.
      If
      default is made in the payment of this Note, Borrower shall pay the Holder
      hereof reasonable costs of collection, including reasonable attorneys’
fees.

    

    4.6 Governing
      Law.
      This
      Note
      shall be governed by and construed in accordance with the laws of the State
      of
      New York, without regard to conflicts
      of laws
      principles that would result in the application of the substantive laws of
      another jurisdiction. Any
      action brought by either party against the other concerning the transactions
      contemplated by this Agreement shall be brought only in the state courts of
      New
      York or in the federal courts located in the State of New York. The
      prevailing party shall be entitled to recover from the other party its
      reasonable attorney’s fees and costs. In the event that any provision of this
      Note is invalid or unenforceable under any applicable statute or rule of law,
      then such provision shall be deemed inoperative to the extent that it may
      conflict therewith and shall be deemed modified to conform with such statute
      or
      rule of law. Any such provision which may prove invalid or unenforceable under
      any law shall not affect the validity or unenforceability of any other provision
      of this Note. Nothing contained herein shall be deemed or operate to preclude
      the Holder from bringing suit or taking other legal action against the Borrower
      in any other jurisdiction to collect on the Borrower’s obligations to Holder, to
      realize on any collateral or any other security for such obligations, or to
      enforce a judgment or other court in favor of the Holder.

    

    4.7 Maximum
      Payments.
      Nothing
      contained herein shall be deemed to establish or require the payment of a rate
      of interest or other charges in excess of the maximum permitted by applicable
      law. In the event that the rate of interest required to be paid or other charges
      hereunder exceed the maximum permitted by such law, any payments in excess
      of
      such maximum shall be credited against amounts owed by the Borrower to the
      Holder and thus refunded to the Borrower.

    

    4.8. Construction.
      Each
      party acknowledges that its legal counsel participated in the preparation of
      this Note and, therefore, stipulates that the rule of construction that
      ambiguities are to be resolved against the drafting party shall not be applied
      in the interpretation of this Note to favor any party against
      the other.

    

    4.9 Shareholder
      Status.
      The
      Holder shall not have rights as a shareholder of the Borrower with respect
      to
      unconverted portions of this Note. However, the Holder will have the rights
      of a
      shareholder of the Borrower with respect to the Shares of Common Stock to be
      received after delivery by the Holder of a Conversion Notice to the
      Borrower.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      Borrower has caused this Note to be signed in its name by an authorized officer
      as of the 20th
      day of
      November, 2006.

    
      	 	 	 
	 	INCA
              DESIGNS,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/ Donald
              R.
              Mastropietro
	 	
              

            
	 	Donald
              R. Mastropietro, President

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    NOTICE
      OF CONVERSION

    

    (To
      be
      executed by the Registered Holder in order to convert the Note)

    

    The
      undersigned hereby elects to convert $_________ of the principal and $_________
      of the interest due on the Note issued by INCA Designs, Inc. (the “Borrower”) on
      November 20, 2006 into Shares of Common Stock of the Borrower according to
      the
      conditions set forth in such Note, as of the date written below.

     

     

    
      
        	
                Date
                  of Conversion:

              	 

      

       

      
        
          	
                  
                    Conversion Price:
                      

                  

                	 

        

      

      Number
        of
        Shares of Common Stock Beneficially Owned on the Conversion Date:
        Less
        than 4.99% of the outstanding Common Stock of Borrower

      

      

      
        	
                Shares
                  To Be Delivered: 

              	 
	 
	 
	
                Signature:
                  

              	 
	 
	 
	
                Print
                  Name: 

              	 
	 
	 
	
                Address:
                  

              	 
	 
	 

      

       

      
        
          
          

        

        
          8

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