EXHIBIT 4.1
<PAGE>
                                DEBENTURE


THE  SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD
IN  RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS.  THE
SECURITIES ARE SUBJECT TO RESTRICTIONS OF TRANSFERABILITY AND RESALE AND MAY NOT
BE  TRANSFERRED  OR  RESOLD  EXCEPT  AS  PERMITTED  UNDER  SUCH LAWS PURSUANT TO
REGISTRATION  OR  AN EXEMPTION THEREFROM.  THE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS  OF  THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING MATERIALS.
ANY  REPRESENTATION  TO  THE  CONTRARY  IS  UNLAWFUL.

AMOUNT                                             $50,000
DEBENTURE  NUMBER                                  October-2003-101
ISSUANCE  DATE                                     October  1,  2003
MATURITY  DATE                                     October  1,  2008


     FOR  VALUE  RECEIVED,  Xtreme  Companies,  Inc.  a  Nevada corporation (the
"Company"),  hereby  promises  to pay DUTCHESS PRIVATE EQUITIES FUND, L.P.  (the
"Purchaser")  on October 1, 2008, (the "Maturity Date"), the principal amount of
Fifty  Thousand  Dollars  ($50,000)  U.S.,  and to pay interest on the principal
amount  hereof,  in such amounts, at such times and on such terms and conditions
as  are  specified  herein.

Article  1          Interest

     The  Company  shall  pay  interest  on  the unpaid principal amount of this
Debenture  (the  "Debenture") at the time of each conversion until the principal
amount  hereof  is  paid in full or has been converted. The Debentures shall pay
six  percent (6%) cumulative interest, in cash or in Shares of common stock, par
value  $.001  per  Share,  of  the  Company ("Common Stock"), at the Purchaser's
option,  at  the  time  of  each conversion. The closing shall be deemed to have
occurred  on  the  date  the  funds  (less  escrow fees, attorney fees and those
amounts  payable  pursuant  to the terms sheet) are received by the Company (the
"Closing  Date").  If  the  interest  is  to  be paid in cash, the Company shall
notify  Purchaser  on  the date of conversion, and make such payment on the next
business  day  following the date of conversion.   If the interest is to be paid
in  Common  Stock, said Common Stock shall be delivered to the Purchaser, or per
Purchaser's  instructions,  within  three  (3)  business  days  of  the  date of
conversion.  The  Debentures  are  subject to automatic conversion at the end of
four  (4)  years  from  the  date  of  issuance  at  which  time  all Debentures
outstanding  will be automatically converted based upon the formula set forth in
Section  3.2.

Article  2          Method  of  Payment

     This  Debenture  must  be  surrendered  to  the  Company  in  order for the
Purchaser  to receive payment of the principal amount hereof.  The Company shall
have  the  option  of  paying  the  interest  on this Debenture in United States
dollars  or  in  Common Stock upon conversion pursuant to Article 1 hereof.  The
Company  may  draw  a  check  for  the  payment  of interest to the order of the
Purchaser  of  this Debenture and mail it to the Purchaser's address as shown on
the Register (as defined in Section 8.2 below).  Interest and principal payments
shall  be subject to withholding under applicable United States Federal Internal
Revenue  Service  Regulations.

Article  3          Conversion

Section  3.1     Conversion  Privilege

(a)     The  Purchaser of this Debenture shall have the right to convert it into
Shares  of  Common  Stock  at  any  time following the Closing Date and which is
before  the  close  of  business  on  the  Maturity Date, except as set forth in
Section  3.1(c)  below.  The  number of Shares of Common Stock issuable upon the
conversion  of this Debenture is determined pursuant to Section 4.2 and rounding
the  result  to  the  nearest  whole  Share.

(b)     This Debenture may not be converted, whether in whole or in part, except
     in  accordance  with  Article  3.

(c)     In the event all or any portion of this Debenture remains outstanding on
     the  Maturity  Date,  the  unconverted  portion  of  such  Debenture  will
automatically  be  converted  into  Shares  of  Common Stock on such date in the
manner  set  forth  in  Section  3.2.

Section  3.2     Conversion  Procedure.

(a)  Conversion  Procedures. The face amount of this Debenture may be converted,
in  whole or in part, any time following the Closing Date. Such conversion shall
be  effectuated  by surrendering to the Company, or its attorney, this Debenture
to  be  converted  together with a facsimile or original of the signed Notice of
Conversion  which  evidences  Purchaser's  intention  to  convert  the Debenture
indicated.  The date on which the Notice of Conversion is effective ("Conversion
Date")  shall  be  deemed to be the date on which the Purchaser has delivered to
the  Company a facsimile or original of the signed Notice of Conversion, as long
as  the original Debenture(s) to be converted are received by the Company within
three (3) business days thereafter. At such time that the original Debenture has
been  submitted  to the Company, the Purchaser can elect to whether a reissuance
of  the  debenture is warranted, or whether the Company can retain the Debenture
as to a continual conversion by Purchaser. Notwithstanding the above, any Notice
of  Conversion  received by 4:00 P.M. EST, shall be deemed to have been received
the previous business day. Receipt being via a confirmation of time of facsimile
of  the  Purchaser.

(b)     Common Stock to be Issued.     Upon the conversion of any Debentures and
     upon  receipt  by the Company or its attorney of a facsimile or original of
Purchaser's  signed Notice of Conversion the Company shall instruct its transfer
agent  to  issue  stock certificates without restrictive legend or stop transfer
instructions,  if  at  that  time  the  Registration Statement has been declared
effective  (or  with proper restrictive legend if the Registration Statement has
not  as  yet  been declared effective), in such denominations to be specified at
conversion  representing the number of Shares of Common Stock issuable upon such
conversion,  as  applicable.   In  the  event  a  registration  is  not declared
effective  after  one  year,  all  Conversion  made  by  the  Purchaser shall be
available for resale under Rule 144.  The Company shall take all steps necessary
and  bear  all  costs necessary to have said stock issued directly from transfer
free-trading  baring  no restrictive legend within three (3) business days.  The
Company  shall  act  as  Registrar  and  shall  maintain  an  appropriate ledger
containing the necessary information with respect to each Debenture. The Company
warrants that no instructions, other than these instructions, have been given or
will be given to the transfer agent and that the Common Stock shall otherwise be
freely  resold,  except  as  may  be  set  forth  herein.

(c)     Conversion  Rate.  Purchaser  is  entitled to convert the face amount of
this  Debenture,  plus  accrued interest, anytime following the Closing Date, at
the  lesser  of  (i) 80% of the lowest closing bid price during the fifteen (15)
trading  days  prior  to  the Conversion Date or (ii) 100% of the average of the
closing  bid  prices  for the twenty (20) trading days immediately preceding the
Closing  Date  ("Fixed  Conversion  Price"),  each  being  referred  to  as  the
"Conversion  Price".  No  fractional  Shares  or scrip representing fractions of
Shares  will be issued on conversion, but the number of Shares issuable shall be
rounded  up  or  down,  as  the  case  may  be,  to  the  nearest  whole  Share.


(d)     Nothing  contained  in  this  Debenture  shall be deemed to establish or
require  the  payment  of  interest  to the Purchaser at a rate in excess of the
maximum rate permitted by governing law.  In the event that the rate of interest
     required  to  be  paid exceeds the maximum rate permitted by governing law,
the  rate  of  interest  required  to  be paid thereunder shall be automatically
reduced  to  the  maximum rate permitted under the governing law and such excess
shall  be  returned  with reasonable promptness by the Purchaser to the Company.

(e)     It  shall  be the Company's responsibility to take all necessary actions
and  to  bear  all  such  costs  to  issue  the Common Stock as provided herein,
including  the  responsibility and cost for delivery of an opinion letter to the
transfer  agent,  if  so  required.  The person in whose name the certificate of
Common Stock is to be registered shall be treated as a Share Purchaser of record
     on and after the conversion date. Upon surrender of any Debentures that are
to  be  converted  in  part,  the  Company  shall  issue  to the Purchaser a new
Debenture  equal  to  the  unconverted  amount,  if  so  requested in writing by
Purchaser.

(f)     Within  three  (3)  business  days  after  receipt  of the documentation
referred to above in Section 3.2(a), the Company shall deliver a certificate, in
     accordance  with  Section  3.2(c)  for the number of Shares of Common Stock
issuable  upon  the conversion.  In the event the Company does not make delivery
of  the Common Stock, as instructed by Purchaser, within three (3) business days
after the Conversion Date, then in such event the Company shall pay to Purchaser
one  percent  (1%)  in  cash,  of  the dollar value of the Debentures remaining,
compounded  daily, per each day after the third (3rd) business day following the
Conversion  Date  that  the  Common  Stock  is  not  delivered to the Purchaser.

                The  Company acknowledges that its failure to deliver the Common
Stock  within  three  (3) business days after the Conversion Date will cause the
Purchaser  to  suffer  damages in an amount that will be difficult to ascertain.
Accordingly,  the  parties  agree  that  it  is  appropriate  to include in this
Debenture a provision for liquidated damages.  The parties acknowledge and agree
that  the  liquidated damages provision set forth in this section represents the
parties' good faith effort to quantify such damages and, as such, agree that the
form  and  amount  of  such  liquidated  damages  are  reasonable  and  will not
constitute  a  penalty.  The payment of liquidated damages shall not relieve the
Company  from  its obligations to deliver the Common Stock pursuant to the terms
of  this  Debenture.

              To  the extent that the failure of the Company to issue the Common
Stock pursuant to this Section 3.2(f) is due to the unavailability of authorized
but unissued Shares of Common Stock, the provisions of this Section 3.2(f) shall
not  apply  but  instead  the  provisions  of  Section  3.2(g)  shall  apply.

              The  Company  shall  make any payments incurred under this Section
3.2(f)  in  immediately  available funds within three (3) business days from the
date  the  Common  Stock  is  fully  delivered.  Nothing  herein  shall  limit a
Purchaser's  right  to  pursue  actual  damages or cancel the conversion for the
Company's  failure  to  issue  and  deliver Common Stock to the Purchaser within
three  (3)  business  days  after  the  Conversion  Date.

(g)     The  Company  shall  at  all  times reserve (or make alternative written
arrangements  for  reservation or contribution of Shares) and have available all
Common Stock necessary to meet conversion of the Debentures by all Purchasers of
     the entire amount of Debentures then outstanding. If, at any time Purchaser
submits  a  Notice  of  Conversion  and  the  Company  does  not have sufficient
authorized  but unissued Shares of Common Stock (or alternative Shares of Common
Stock as may be contributed by Stock Purchasers) available to effect, in full, a
conversion  of  the Debentures (a "Conversion Default", the date of such default
being  referred  to  herein as the "Conversion Default Date"), the Company shall
issue  to  the  Purchaser all of the Shares of Common Stock which are available,
and  the Notice of Conversion as to any Debentures requested to be converted but
not  converted  (the "Unconverted Debentures"), may be deemed null and void upon
written  notice sent by the Purchaser to the Company.  The Company shall provide
notice  of  such  Conversion  Default  ("Notice  of  Conversion Default") to all
existing  Purchasers  of  outstanding Debentures, by facsimile, within three (3)
business  day  of such default  (with the original delivered by overnight or two
day  courier),  and  the Purchaser shall give notice to the Company by facsimile
within  five  business  days  of  receipt  of  the original Notice of Conversion
Default  (with  the  original  delivered by overnight or two day courier) of its
election  to  either  nullify  or  confirm  the  Notice  of  Conversion.

     The  Company  agrees  to  pay  to  all Purchasers of outstanding Debentures
payments  for a Conversion Default ("Conversion Default Payments") in the amount
of  (N/365)  x  (.24)  x  the  initial  issuance price of the outstanding and/or
tendered  but  not  converted  Debentures  held  by each Purchaser where N = the
number  of days from the Conversion Default Date to the date (the "Authorization
Date") that the Company authorizes a sufficient number of Shares of Common Stock
to effect conversion of all remaining Debentures.  The Company shall send notice
("Authorization  Notice")  to  each  Purchaser  of  outstanding  Debentures that
additional  Shares  of Common Stock have been authorized, the Authorization Date
and the amount of Purchaser's accrued  Conversion Default Payments.  The accrued
Conversion  Default  shall  be  paid in cash or shall be convertible into Common
Stock  at  the Conversion Rate, upon written notice sent by the Purchaser to the
Company, which Conversion Default shall be payable as follows:  (i) in the event
Purchaser  elects  to  take such payment in cash, cash payments shall be made to
such  Purchaser  of  outstanding  Debentures  by  the fifth day of the following
calendar  month,  or  (ii) in the event Purchaser elects to take such payment in
stock,  the Purchaser may convert such payment amount into Common Stock  at  the
conversion rate set forth in Section 3.2(c) at any time after the 5th day of the
calendar  month  following  the  month  in  which  the  Authorization Notice was
received, until the expiration of the mandatory four (4) year conversion period.

     The  Company  acknowledges that its failure to maintain a sufficient number
of authorized but unissued Shares of Common Stock to effect in full a conversion
of  the  Debentures will cause the Purchaser to suffer damages in an amount that
will  be  difficult  to  ascertain.  Accordingly,  the  parties agree that it is
appropriate  to  include  in  this Agreement a provision for liquidated damages.
The  parties  acknowledge  and  agree  that the liquidated damages provision set
forth in this section represents the parties' good faith effort to quantify such
damages  and, as such, agree that the form and amount of such liquidated damages
are  reasonable  and  will  not constitute a penalty.  The payment of liquidated
damages shall not relieve the Company from its obligations to deliver the Common
Stock  pursuant  to the terms of this Debenture.  Nothing herein shall limit the
Purchaser's right to pursue actual damages for the Company's failure to maintain
a  sufficient  number  of  authorized  Shares  of  Common  Stock.

(h) If, by the third (3rd) business day after the Conversion Date of any portion
of  the  Debentures  to  be  converted (the "Delivery Date"), the transfer agent
fails  for  any  reason  to  deliver  the  Common  Stock  upon conversion by the
Purchaser  and  after  such  Delivery  Date, the Purchaser purchases, in an open
market  transaction or otherwise, Shares of Common Stock (the "Covering Shares")
solely  in  order  to make delivery in satisfaction of a sale of Common Stock by
the  Purchaser (the "Sold Shares"), which delivery such Purchaser anticipated to
make  using  the Common Stock issuable upon conversion (a "Buy-In"), the Company
shall  pay  to  the Purchaser, in addition to any other amounts due to Purchaser
pursuant  to  this  Debenture,  and  not  in lieu thereof, the Buy-In Adjustment
Amount (as defined below). The "Buy In Adjustment Amount" is the amount equal to
the  excess,  if  any,  of  (x)  the Purchaser's total purchase price (including
brokerage commissions, if any) for the Covering Shares over (y) the net proceeds
(after brokerage commissions, if any) received by the Purchaser from the sale of
the  Sold  Shares.  The  Company  shall  pay the Buy-In Adjustment Amount to the
Purchaser  in  immediately  available  funds  within  five  (5) business days of
written demand by the Purchaser. By way of illustration and not in limitation of
the  foregoing, if the Purchaser purchases Shares of Common Stock having a total
purchase  price  (including  brokerage commissions) of $11,000 to cover a Buy-In
with  respect to Shares of Common Stock it sold for net proceeds of $10,000, the
Buy-In  Adjustment  Amount  which  the  Company  will  be required to pay to the
Purchaser  will  be  $1,000.

(i)     Prospectus  and  Other Documents. The Company shall furnish to Purchaser
such  number  of prospectuses and other documents incidental to the registration
of the Shares of Common Stock underlying the Debentures, including any amendment
     of  or  supplements  thereto.

(j)     Limitation  on Issuance of Shares. If the Company's Common Stock becomes
listed  on  the Nasdaq SmallCap Market after the issuance of the Debentures, the
Company  may  be limited in the number of Shares of Common Stock it may issue by
virtue  of  (X)  the number of authorized Shares or (Y) the applicable rules and
regulations  of  the  principal  securities  market on which the Common Stock is
listed  or  traded,  including,  but  not  necessarily  limited  to, NASDAQ Rule
4310(c)(25)(H)(i)  or  Rule  4460(i)(1), as may be applicable (collectively, the
"Cap  Regulations").  Without  limiting  the  other  provisions thereof, (i) the
Company  will  take  all steps reasonably necessary to be in a position to issue
Shares of Common Stock on conversion of the Debentures without violating the Cap
     Regulations  and  (ii)  if,  despite  taking  such steps, the Company still
cannot  issue such Shares of Common Stock without violating the Cap Regulations,
the  Purchaser  of  a  Debenture  which cannot be converted as result of the Cap
Regulations  (each  such  Debenture,  an "Unconverted Debenture") shall have the
right  to  elect  either  of  the  following  remedies:

     (x)  if  permitted  by  the  Cap  Regulations, require the Company to issue
Shares  of Common Stock in accordance with such Purchaser's Notice of Conversion
at a conversion purchase price equal to the average of the closing bid price per
Share  of  Common  Stock  for  any five (5) consecutive trading days (subject to
certain  equitable  adjustments for certain events occurring during such period)
during the sixty (60) trading days immediately preceding the Conversion Date; or

     (y)  require the Company to redeem each Unconverted Debenture for an amount
(the  "Redemption Amount"), payable in cash, equal to the sum of (i) one hundred
thirty-three  percent  (133%) of the principal of an Unconverted Debenture, plus
(ii) any accrued but unpaid interest thereon through and including the date (the
"Redemption  Date")  on  which  the  Redemption Amount is paid to the Purchaser.

     A Purchaser of an Unconverted Debenture may elect one of the above remedies
with  respect  to  a  portion of such Unconverted Debenture and the other remedy
with  respect  to  other  portions of the Unconverted Debenture.  The Debentures
shall  contain  provisions  substantially  consistent with the above terms, with
such  additional  provisions  as  may  be  consented  to  by the Purchaser.  The
provisions of this section are not intended to limit the scope of the provisions
otherwise  included  in  the  Debentures.

(k)     Reserved.

(l)     Legend.  Reserved

     (m)  Prior  to  conversion  of  all  the  Debentures,  if  at  any time the
conversion  of  all  the  Debentures  would  result in an insufficient number of
authorized  Shares of Common Stock being available to cover all the conversions,
then  in  such event, the Company will move to call and hold a Share Purchaser's
meeting or have Share Purchaser action with written consent of the proper number
of  Share  Purchasers  within  thirty  (30)  days of such event, or such greater
period  of  time  if  statutorily  required  or  reasonably necessary as regards
standard  brokerage  house  and/or  SEC  requirements and/or procedures, for the
purpose  of  authorizing  additional  Shares  of  Common Stock to facilitate the
conversions.   In such an event management of the Company shall recommend to all
Share  Purchasers  to  vote  their  Shares in favor of increasing the authorized
number  of  Shares  of Common Stock. Management of the Company shall vote all of
its  Shares  of  Common  Stock  in  favor  of increasing the number of Shares of
authorized  Common  Stock.  Company  represents  and  warrants  that  under  no
circumstances  will  it  deny  or  prevent  Purchaser's  right  to  convert  the
Debentures  as  permitted  under the terms of this Subscription Agreement or the
Registration  Rights  Agreement.  Nothing  in  this  Section  shall  limit  the
obligation of the Company to make the payments set forth in Section 3.2(g).  The
Purchaser,  at  their  option,  may  request  the company to authorize and issue
additional  Shares if the Purchaser feels it is necessary for conversions in the
future  In  the event the Company's Share Purchaser's meeting does not result in
the necessary authorization, the Company shall redeem the outstanding Debentures
for  an  amount  equal  to  (x)  the  sum  of  the  principal of the outstanding
Debentures  plus  accrued  interest  thereon  multiplied  by  (y)  133%.

Section  3.3 Fractional Shares. The Company shall not issue fractional Shares of
Common  Stock,  or  scrip  representing  fractions  of  such  Shares,  upon  the
conversion  of  this  Debenture. Instead, the Company shall round up or down, as
the  case  may  be,  to  the  nearest  whole  Share.

Section  3.4     Taxes  on  Conversion.  The  Company shall pay any documentary,
stamp  or  similar  issue  or  transfer tax due on the issue of Shares of Common
Stock  upon  the conversion of this Debenture.  However, the Purchaser shall pay
any such tax which is due because the Shares are issued in a name other than its
     name.

Section  3.5     Company to Reserve Stock.  The Company shall reserve the number
of  Shares  of Common Stock required pursuant to and upon the terms set forth in
the  Subscription  Agreement  to  permit  the conversion of this Debenture.  All
Shares of Common Stock which may be issued upon the conversion hereof shall upon
issuance  be  validly  issued,  fully  paid  and nonassessable and free from all
taxes,  liens  and  charges  with  respect  to  the  issuance  thereof.

Section  3.6     Restrictions  on  Sale.  This Debenture has not been registered
under  the  Securities  Act of 1933, as amended, (the "Act") and is being issued
under Section 4(2) of the Act and Rule 506 of Regulation D promulgated under the
Act.  This  Debenture  and the Common Stock issuable upon the conversion thereof
may  only  be  sold pursuant to registration under or an exemption from the Act.

Section  3.7     Mergers,  Etc.  If  the  Company  merges  or  consolidates with
another corporation or sells or transfers all or substantially all of its assets
to another person and the Purchasers of the Common Stock are entitled to receive
stock,  securities  or  property  in respect of or in exchange for Common Stock,
then  as  a  condition  of  such merger, consolidation, sale or transfer, it may
thereafter  be  converted  on  the terms and subject to the conditions set forth
above  into the kind and amount of stock, securities or property receivable upon
such  merger,  consolidation,  sale  or transfer by a Purchaser of the number of
Shares  of  Common  Stock  into  which  this Debenture might have been converted
immediately  before  such  merger,  consolidation,  sale or transfer, subject to
adjustments  which  shall  be  as  nearly  equivalent  as  may be practicable to
adjustments  provided  for  in  this  Article  3.

Article  4          Mergers
     The  Company  shall  not  consolidate  or  merge  into,  or transfer all or
substantially  all  of  its assets to, any person, unless such person assumes in
writing  the  obligations  of  the  Company under this Debenture and immediately
after  such transaction no Event of Default exists.  Any reference herein to the
Company  shall  refer  to  such  surviving  or  transferee  corporation  and the
obligations  of  the  Company  shall  terminate  upon  such  written assumption.

Article  5        Reports
     The  Company  will  mail to the Purchaser hereof at its address as shown on
the  Register  a  copy  of any annual, quarterly or current report that it files
with  the  Securities  and Exchange Commission promptly after the filing thereof
and  a  copy of any annual, quarterly or other report or proxy statement that it
gives  to its Share Purchasers generally at the time such report or statement is
sent  to  Share  Purchasers.

Article  6          Defaults  and  Remedies

Section  6.1     Events  of  Default.  An  "Event  of Default" occurs if (a) the
Company  does  not  make  the  payment  of  the  principal  of this Debenture by
conversion into Common Stock within ten (10) business days of the Maturity Date,
upon  redemption  or  otherwise,  (b) the Company does not make a payment, other
than a payment of principal, for a period of three (3) business days thereafter,
(c)  any  of  the  Company's  representations  or  warranties  contained  in the
Subscription  Agreement  or  this  Debenture were false when made or the Company
fails  to  comply with any of its other agreements in the Subscription Agreement
or this Debenture and such failure continues for the period and after the notice
specified  below,  (d)  the  Company  pursuant  to  or within the meaning of any
Bankruptcy  Law  (as  hereinafter defined): (i) commences a voluntary case; (ii)
consents  to the entry of an order for relief against it in an involuntary case;
(iii)  consents to the appointment of a Custodian (as hereinafter defined) of it
or  for  all  or  substantially  all  of  its  property  or (iv) makes a general
assignment  for  the  benefit  of  its  creditors  or  (v)  a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for
relief  against  the Company in an involuntary case; (B) appoints a Custodian of
the  Company  or  for all or substantially all of its property or (C) orders the
liquidation  of  the  Company,  and  the order or decree remains unstayed and in
effect for sixty (60) calendar days, (e) the Company's Common Stock is suspended
or  no  longer  listed  on  any  recognized  exchange  including  electronic
over-the-counter  bulletin  board  for in excess of five (5) consecutive trading
days.  As  used in this Section 7.1, the term "Bankruptcy Law" means Title 11 of
the  United  States  Code  or any similar federal or state law for the relief of
debtors.  The term "Custodian" means any receiver, trustee, assignee, liquidator
or  similar  official under any Bankruptcy Law. A default under clause (c) above
is not an Event of Default until the Purchasers of at least 25% of the aggregate
principal  amount  of  the  Debentures  outstanding  notify  the Company of such
default  and the Company does not cure it within thirty (30) business days after
the  receipt  of  such notice, unless the Company commences to cure such default
within  such  period, which must specify the default, demand that it be remedied
and  state that it is a "Notice of Default". Prior to the expiration of the time
for curing a default as set forth in the preceding sentence, the Purchasers of a
majority in aggregate principal amount of the Debentures at the time outstanding
(exclusive  of  Debentures  then  owned  by  the  Company  or  any subsidiary or
affiliate)  may, on behalf of the Purchasers of all of the Debentures, waive any
past Event of Default hereunder (or any past event which, with the lapse of time
or  notice  and  lapse of time designated in subsection (a), would constitute an
Event  of  Default  hereunder)  and  its  consequences,  except a default in the
payment of the principal of or interest on any of the Debentures. In the case of
any  such  waiver, such default or Event of Default shall be deemed to have been
cured  for every purpose of this Debenture and the Company and the Purchasers of
the Debentures shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or  impair  any  right  consequent  thereon.

Section  6.2     Acceleration.  If an Event of Default occurs and is continuing,
the  Purchaser  hereof  by  notice  to  the  Company  may  declare the remaining
principal  amount  of this Debenture, together with all accrued interest and any
liquidated damages, to be due and payable.  Upon such declaration, the remaining
     principal  amount  shall  be  due  and  payable  immediately.

Section  6.3     Seniority,  No  indebtedness  of  the Company is senior to this
Debenture in right of payment, whether with respect to interest, damages or upon
liquidation  or  dissolution  or  otherwise.

Article  7          Registered  Debentures

Section  7.1     Record Ownership.  The Company, or its attorney, shall maintain
a  register  of  the Purchasers of the Debentures (the "Register") showing their
names  and  addresses and the serial numbers and principal amounts of Debentures
issued to them.  The Register may be maintained in electronic, magnetic or other
computerized  form.  The  Company may treat the person named as the Purchaser of
this  Debenture  in  the  Register  as  the  sole  owner  of this Debenture. The
Purchaser  of  this  Debenture  is  the  person  exclusively entitled to receive
payments  of  interest  on this Debenture, receive notifications with respect to
this  Debenture,  convert it into Common Stock and otherwise exercise all of the
rights  and  powers  as  the  absolute  owner  hereof.

Section  7.2     Worn  or  Lost  Debentures.  If  this  Debenture  becomes worn,
defaced  or  mutilated  but  is still substantially intact and recognizable, the
Company  or  its  agent  may  issue  a  new  Debenture  in  lieu hereof upon its
surrender.   Where the Purchaser of this Debenture claims that the Debenture has
been  lost,  destroyed  or  wrongfully  taken,  the  Company  shall  issue a new
Debenture  in  place  of  the original Debenture if the Purchaser so requests by
written  notice  to  the  Company  actually received by the Company before it is
notified  that  the Debenture has been acquired by a bona fide purchaser and the
Purchaser  has  delivered  to  the  Company an indemnity bond in such amount and
issued  by  such  surety  as  the  Company  deems  satisfactory together with an
affidavit  of  the  Purchaser  setting  forth  the  facts  concerning such loss,
destruction or wrongful taking and such other information in such form with such
proof  or  verification  as  the  Company  may  request.

Article  8          Notice.

     Any  notices,  consents,  waivers  or  other  communications  required  or
permitted  to  be given under the terms of this Debenture must be in writing and
will  be  deemed  to  have  been  delivered  (i)  upon  receipt,  when delivered
personally;  (ii)  upon receipt, when sent by facsimile (provided a confirmation
of  transmission is mechanically or electronically generated and kept on file by
the  sending  party);  or  (iii)  one  (1)  day  after deposit with a nationally
recognized  overnight  delivery  service, in each case properly addressed to the
party  to  receive  the  same.  The  addresses  and  facsimile  numbers for such
communications  shall  be:

If  to  the  Company:

Xtreme  Companies,  Inc.
11782  Western  Avenue,  Unit  18
Stanton,  CA  90680
Telephone:  714-895-0944
Facsimile:  714-895-7139


If  to  the  Purchaser:

     At  the  address  listed  in  the  Questionnaire.

     Each  party  shall provide five (5) business days prior notice to the other
party  of  any  change  in  address,  phone  number  or  facsimile  number.

Article  9          Time

     Where  this  Debenture  authorizes  or requires the payment of money or the
performance  of  a  condition  or obligation on a Saturday or Sunday or a public
holiday,  or authorizes or requires the payment of money or the performance of a
condition or obligation within, before or after a period of time computed from a
certain date, and such period of time ends on a Saturday or a Sunday or a public
holiday,  such  payment  may be made or condition or obligation performed on the
next  succeeding  business day, and if the period ends at a specified hour, such
payment  may  be made or condition performed, at or before the same hour of such
next  succeeding  business  day,  with  the  same force and effect as if made or
performed  in  accordance  with  the  terms of this Debenture.  A "business day"
shall  mean  a day on which the banks in New York are not required or allowed to
be  closed.

Article  10          No  Assignment

     This  Debenture  shall  not  be  assignable.

Article  11          Rules  of  Construction.

     In  this  Debenture,  unless  the  context otherwise requires, words in the
singular  number include the plural, and in the plural include the singular, and
words  of the masculine gender include the feminine and the neuter, and when the
sense  so  indicates,  words  of the neuter gender may refer to any gender.  The
numbers  and  titles  of  sections  contained  in the Debenture are inserted for
convenience  of  reference  only, and they neither form a part of this Debenture
nor are they to be used in the construction or interpretation hereof.  Wherever,
in  this  Debenture, a determination of the Company is required or allowed, such
determination  shall  be  made  by  a  majority of the Board of Directors of the
Company and if it is made in good faith, it shall be conclusive and binding upon
the  Company  and  the  Purchaser  of  this  Debenture.

Article  12          Governing  Law

     The validity, terms, performance and enforcement of this Debenture shall be
governed  and construed by the provisions hereof and in accordance with the laws
of  the  Commonwealth  of  Massachusetts  applicable  to  agreements  that  are
negotiated,  executed,  delivered  and  performed  solely in the Commonwealth of
Massachusetts.

Article  13          Litigation

DISPUTES  SUBJECT  TO  ARBITRATION  GOVERNED  BY  MASSACHUSETTS  LAW
--------------------------------------------------------------------

     All  disputes  arising  under  this  agreement  shall  be  governed  by and
interpreted  in  accordance  with the laws of the Commonwealth of Massachusetts,
without regard to principles of conflict of laws.  The parties to this agreement
will  submit all disputes arising under this agreement to arbitration in Boston,
Massachusetts before a single arbitrator of the American Arbitration Association
("AAA").  The  arbitrator  shall  be selected by application of the rules of the
AAA, or by mutual agreement of the parties, except that such arbitrator shall be
an  attorney  admitted to practice law in the Commonwealth of Massachusetts.  No
party  to  this agreement will challenge the jurisdiction or venue provisions as
provided  in  this  section.

Article  14     Purchaser  Shares

     As  an  additional  inducement  to  Purchaser,  the  Company  shall  issue
three-hundred thousand (300,000) Shares of its common stock to Purchaser.  These
Shares  shall  have  piggyback registration rights. The Purchaser's Shares shall
have  the  same  rights  and  privileges  as outlined in the Registration Rights
Agreement  with  the  Purchaser  for  the  Debenture.

Article  15       Use  of  Proceeds

     The  Company  shall  use  the  proceeds  from  this  Debenture for expenses
incurred  with its "Merger" with Rockwell Power Systems, Inc.  ("Rockwell"). Any
other  use  of  the  funds  contemplated herein, shall be considered a breach of
contract  and  an  event  of  Default.

Article  16       Conditions  to  Closing

     The  Company  represents  that  its  Merger  with  Rockwell  has been fully
consummated  and  that  Rockwell  has  delivered  to  the  Company at the Merger
closing;  (i)  one  hundred  thousand  dollars  ($100,000)  in cash and (ii) one
hundred and fifty thousand dollars ($150,000) in the form of accounts receivable
from  the  New  York  Port  Authority.  The  Company  shall have also issued the
Purchaser  Shares  outlined  in  Article  14,  at  closing.

     IN  WITNESS WHEREOF, the Company has duly executed this Debenture as of the
date  first  written  above.

     XTREME  COMPANIES,  INC.

  By: /s/ Kevin Ryan
Name:       Kevin  Ryan
Title:       President

DUTCHESS  PRIVATE  EQUITIES  FUND,  L.P.
BY  ITS  GENERAL  PARTNER  DUTCHESS
CAPITAL  MANAGEMENT,  LLC

By:  /s/ Douglas H. Leighton
Name:  Douglas  H.  Leighton
Title:  A  Managing  Member







                                    Exhibit A

                              NOTICE OF CONVERSION
                              --------------------

     (To be Executed by the Registered Owner in order to Convert Debenture)

     The  undersigned  hereby  irrevocably  elects,  as  of ________________, to
convert  $________________  of  its convertible debenture (the "Debenture") into
Common  Stock  of  Xtreme  Companies,  Inc.  (the  "Company")  according  to the
conditions  set  forth  in  the  Debenture  issued  by  the  Company.

Date  of  Conversion________________________________________________


Applicable  Conversion  Price________________________________________


Number  of  Debentures  Issuable  upon  this  Conversion_______________________


Name(Print)___________Dutchess  Private  Equities  Fund,  LP  _________________
                      --------------------------------------

Address______________312  Stuart  St,  3rd  Floor____________________________
                     ----------------------------


Phone_____617-960-3570_____________  Fax________617-960-3772___________
          -------------------------             ------------





                    By:_______________________________________
                       Douglas  Leighton