sec document




                                                                   Exhibit 10.12

                                                        DATED:  NOVEMBER 9, 2005

         NEITHER THIS DEBENTURE NOR THE SECURITIES  INTO WHICH THIS DEBENTURE IS
         CONVERTIBLE  HAVE BEEN  REGISTERED  WITH THE  SECURITIES  AND  EXCHANGE
         COMMISSION OR THE  SECURITIES  COMMISSION OF ANY STATE IN RELIANCE UPON
         AN EXEMPTION  FROM  REGISTRATION  UNDER THE  SECURITIES ACT OF 1933, AS
         AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
         SOLD EXCEPT PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT UNDER THE
         SECURITIES  ACT OR PURSUANT TO AN  AVAILABLE  EXEMPTION  FROM,  OR IN A
         TRANSACTION  NOT  SUBJECT  TO,  THE  REGISTRATION  REQUIREMENTS  OF THE
         SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

No. CCP-4                                                             $1,991,217

                              ENCLAVES GROUP, INC.

               AMENDED AND RESTATED SECURED CONVERTIBLE DEBENTURE


                              DUE JANUARY 15, 2007

         This  Amended  and  Restated   Secured   Convertible   Debenture   (the
"DEBENTURE")  is issued on  November  9, 2005 by  ENCLAVES  GROUP,  INC.  (f/k/a
Alliance  Towers,  Inc.), a Delaware  corporation  (the  "OBLIGOR"),  to CORNELL
CAPITAL  PARTNERS,  LP  (the  "HOLDER"),  pursuant  to that  certain  Securities
Purchase Agreement (the "SECURITIES PURCHASE AGREEMENT") dated December 28, 2004
by and among Enclaves Group, Inc. ("ENCLAVES") and the Buyers listed on Schedule
I attached  thereto,  including  the  Holder.  Enclaves  issued to the Holder on
December  28,  2004 a secured  debenture  in the amount of Seven  Hundred  Fifty
Thousand  Dollars  ($750,000)  (the "DECEMBER 2004  DEBENTURE"),  on January 13,
2005, a secured debenture in the amount of One Million Dollars ($1,000,000) (the
"JANUARY 2005 DEBENTURE") and on May 16, 2005, a secured debenture in the amount
of One Million  Seven  Hundred  Eighty One Thousand One Hundred  Thirty  Dollars
($1,781,130)  (the "MAY 2005  DEBENTURE"),  reflecting the  consolidation of the
December  2004  Debenture  and the January  2005  Debenture  (including  accrued
interest  through  May  16,  2005)  (collectively,  referred  to as  the  "PRIOR
DEBENTURES").  Enclaves was subsequently acquired by the Obligor (f/k/a Alliance
Towers, Inc., a Florida corporation) on April 27, 2005 (the "ACQUISITION").  The
obligations of Enclaves under the  Securities  Purchase  Agreement and the Prior
Debentures  issued  thereto  have been  assumed by the  Obligor  pursuant to the
Assignment  and  Assumption  Agreement  dated as of July 1, 2005 by and  between
Enclaves and the Obligor and acknowledged by the Holder. This Debenture is being
re-issued  to the  Holder to amend and  restate  the May 2005  Debenture  and to
reflect accrued and unpaid  interest to the date hereof  ($105,086.67 as and for
interest  on the May 2005  Debenture  through  the date  hereof)  and to reflect
liquidated  damages in the amount of $105,000 for a total  principal  sum of One
Million  Nine  Hundred  Ninety  One  Thousand  Two  Hundred   Seventeen  Dollars
($1,991,217).

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         FOR VALUE RECEIVED, the Obligor hereby promises to pay to the Holder or
its  successors and assigns the principal sum of One Million Nine Hundred Ninety
One Thousand Two Hundred Seventeen Dollars  ($1,991,217),  together with accrued
but unpaid interest on the following terms:

         PAYMENTS.  Interest on the outstanding  principal  balance hereof shall
begin to accrue from the date hereof and shall be due and  payable  monthly,  in
arrears, as set forth below (each, an "INTEREST PAYMENT DATE").  Principal shall
be due and payable in 12 equal  installments  of $165,934.75  each, plus accrued
interest and a redemption  premium equal to 12%  ("REDEMPTION  PREMIUM") of each
such  installment or the highest rate permitted by applicable law, if lower. The
installments of principal shall be due and payable  commencing January 15, 2006,
and  subsequent  installments  shall be due and payable on the  fifteenth day of
each calendar month thereafter  ("PRINCIPAL PAYMENT DATE") until the outstanding
principal balance is paid in full; however, all amounts of outstanding principal
shall be paid in full no later than January 15, 2007 (the "MATURITY DATE").  All
payments  in  respect  of the  indebtedness  evidenced  hereby  shall be made in
collected funds, and shall be applied to principal, accrued interest and charges
and expenses  owing under or in connection  with this Debenture in such order as
the Holder  elects,  except that payments  shall be applied to accrued  interest
before principal. Notwithstanding the foregoing, this Debenture shall become due
and immediately  payable,  including all accrued but unpaid  interest,  upon the
closing of a Funding  Event (as  defined in SECTION 4 hereof) or  pursuant to an
Event of Default (as defined in SECTION 2 hereof).

         INTEREST.  Interest shall accrue on the outstanding  principal  balance
hereof at an annual rate equal to 12%. Interest shall be calculated on the basis
of a 360-day year and the actual number of days elapsed, to the extent permitted
by applicable law. Interest hereunder will be paid to the Holder or its assignee
(as  defined in SECTION 4) in whose name this  Debenture  is  registered  on the
records of the Obligor  regarding  registration and transfers of Debentures (the
"DEBENTURE REGISTER").

         RIGHT OF  REDEMPTION.  The Obligor at its option  shall have the right,
with three (3) business days advance written notice,  to redeem a portion or all
amounts  outstanding  under this  Debenture  prior to the  Maturity  Date or any
Principal  Payment  date.  The  Redemption  Premium  shall apply to all payments
whether on, before, or after any Principal Payment Date.

         So long as any portion of this  Debenture  is held by the Holder or its
affiliates (as defined in Rule 144  promulgated  under the  Securities  Act) the
Obligor  shall not redeem this  Debenture  with the  proceeds of the Amended and
Restated  Standby  Equity  Distribution  Agreement  between  the Obligor and the
Holder of even date herewith.

         SECURITY  AGREEMENT.  This Debenture is secured by a Security Agreement
(the  "SECURITY  AGREEMENT")  dated  December  28, 2004  between the Obligor and
Cornell Capital Partners, LP ("Cornell"). In addition, this Debenture is secured
by the  mortgages  given to the  Holder for the North Fort  Myers,  Florida  and
Mesquite  and Fort  Worth,  Texas  properties  as more  fully  described  in the
Securities Purchase Agreement dated December 28, 2004.

         CONSENT OF HOLDER TO SELL CAPITAL  STOCK OR GRANT  SECURITY  INTERESTS.
Prior to the  Obligor's  Common Stock being listed on the  Principal  Market (as
defined in the Standby Equity  Distribution  Agreement dated December 28, 2004),

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the Obligor shall not issue shares of Common Stock or Preferred  Stock except as
provided  by the  merger and share  exchange  with  Alliance  Towers,  Inc.  and
described in the Obligor's 8-K filing dated May 2, 2005, or otherwise  permitted
herein or under the Securities  Purchase  Agreement.  Once the Obligor's  Common
Stock is listed on the  Principal  Market,  so long as any of the  principal  or
interest on this  Debenture  remains unpaid and  unconverted,  the Obligor shall
not,  without  the prior  consent of the  Holder,  issue or sell (i) any capital
stock without  consideration or for a consideration per share less than its fair
market value determined  immediately  prior to its issuance,  (ii) issue or sell
any preferred stock, warrant,  option, right, contract,  call, or other security
or  instrument  granting  the holder  thereof the right to acquire  Common Stock
without  consideration  or for a  consideration  per share less than such Common
Stock's fair market value or the preferred  stock's  conversion price determined
immediately  prior to its  issuance,  (iii) enter into any  security  instrument
granting  the holder a security  interest  in any of the assets of the  Obligor,
except for any security  instrument  granting the holder a security  interest in
any and all assets of the Obligor in connection  with permanent or  construction
financing obtained for the development of any real property, or for any security
instruments of a non-material  nature or entered into in the ordinary  course of
business,  provided  that in each case the Obligor gives the Holder prior notice
of such security interest, or (iv) file any registration statement on Form S-8.

         This Debenture is subject to the following additional provisions:

         SECTION  1.  This  Debenture  is  exchangeable  for an equal  aggregate
principal  amount  of  Debentures  of  different  authorized  denominations,  as
requested by the Holder  surrendering  the same. No service  charge will be made
for such registration of transfer or exchange.

         SECTION 2.   EVENTS OF DEFAULT.

         (a) An "EVENT OF DEFAULT",  wherever used herein,  means any one of the
following  events  (whatever  the reason and  whether it shall be  voluntary  or
involuntary or effected by operation of law or pursuant to any judgment,  decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

                  (i) Any default in the payment of the principal  of,  interest
on or  other  charges  in  respect  of  this  Debenture,  free of any  claim  of
subordination,  as and when the same shall become due and payable (whether on an
installment,  a Principal  Payment Date, an Interest  Payment Date, a Conversion
Date or the Maturity Date or by acceleration or otherwise);

                  (ii) The  Obligor  shall fail to observe or perform  any other
covenant,  agreement or warranty contained in, or otherwise commit any breach or
default of any provision of this Debenture  (except as may be covered by SECTION
2(A)(I) hereof) or any  Transaction  Document (as defined in SECTION 4) which is
not cured with in the time prescribed;

                  (iii) The  Obligor  or any  subsidiary  of the  Obligor  shall
commence,  or there shall be commenced  against the Obligor or any subsidiary of
the  Obligor  under  any  applicable  bankruptcy  or  insolvency  laws as now or
hereafter in effect or any successor  thereto,  or the Obligor or any subsidiary
of  the  Obligor  commences  any  other  proceeding  under  any  reorganization,
arrangement,  adjustment of debt, relief of debtors, dissolution,  insolvency or

                                       3



liquidation  or similar  law of any  jurisdiction  whether now or  hereafter  in
effect  relating  to the  Obligor or any  subsidiary  of the Obligor or there is
commenced  against  the  Obligor  or any  subsidiary  of the  Obligor  any  such
bankruptcy,  insolvency  or other  proceeding  which remains  undismissed  for a
period  of 61  days;  or  the  Obligor  or any  subsidiary  of  the  Obligor  is
adjudicated  insolvent  or  bankrupt;  or any  order of  relief  or other  order
approving  any  such  case or  proceeding  is  entered;  or the  Obligor  or any
subsidiary of the Obligor suffers any  appointment of any custodian,  private or
court  appointed  receiver  or the  like for it or any  substantial  part of its
property which continues undischarged or unstayed for a period of sixty one (61)
days; or the Obligor or any subsidiary of the Obligor makes a general assignment
for the benefit of  creditors;  or the Obligor or any  subsidiary of the Obligor
shall fail to pay,  or shall  state that it is unable to pay, or shall be unable
to pay, its debts generally as they become due; or the Obligor or any subsidiary
of the Obligor shall call a meeting of its creditors  with a view to arranging a
composition,  adjustment or  restructuring  of its debts;  or the Obligor or any
subsidiary of the Obligor shall by any act or failure to act expressly  indicate
its consent to,  approval of or  acquiescence  in any of the  foregoing;  or any
corporate  or other  action is taken by the  Obligor  or any  subsidiary  of the
Obligor for the purpose of effecting any of the foregoing;

                  (iv)  The  Obligor  or any  subsidiary  of the  Obligor  shall
default in any of its obligations  under any other Debenture,  including but not
limited to the Amended and Restated  Secured  Debenture issued by the Obligor to
Montgomery  Equity Partners,  Ltd. of even date herewith,  the Secured Debenture
issued by the Obligor to Highgate House Funds,  Ltd. of even date  herewith,  or
any mortgage, credit agreement or other facility, indenture agreement, factoring
agreement or other instrument under which there may be issued, or by which there
may be secured or evidenced  any  indebtedness  for borrowed  money or money due
under any long term  leasing  or  factoring  arrangement  of the  Obligor or any
subsidiary  of  the  Obligor  in an  amount  exceeding  $100,000,  whether  such
indebtedness  now exists or shall  hereafter be created and such  default  shall
result in such indebtedness  becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable;

                  (v) The Common  Stock  shall cease to be quoted for trading or
listed for trading on the Nasdaq OTC Bulletin  Board  ("OTC"),  Nasdaq  SmallCap
Market, New York Stock Exchange,  American Stock Exchange or the Nasdaq National
Market (each, a "SUBSEQUENT MARKET") and shall not again be quoted or listed for
trading thereon within five (5) Trading Days of such delisting;

                  (vi) The Obligor or any  subsidiary  of the Obligor shall be a
party to any Change of Control Transaction (as defined in SECTION 4);

                  (vii) The  Obligor  shall fail to file the  Underlying  Shares
Registration Statement (as defined in SECTION 4) with the Commission (as defined
in SECTION 4), or the Underlying  Shares  Registration  Statement shall not have
been declared effective by the Commission,  in each case within the time periods
set forth in the Amended and Restated Investor  Registration Rights Agreement of
even date herewith between the Obligor and Cornell;

                  (viii)  If  the   effectiveness   of  the  Underlying   Shares
Registration  Statement  lapses  for  any  reason  or the  Holder  shall  not be
permitted to resell the shares of Common Stock  underlying  this Debenture under

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the Underlying Shares Registration Statement, in either case, for more than five
(5)  consecutive  Trading Days or an aggregate of eight Trading Days (which need
not be consecutive Trading Days);

                  (ix) The Obligor  shall fail for any reason to deliver  Common
Stock  certificates  to a Holder  prior to the fifth  (5th)  Trading Day after a
Conversion Date or the Obligor shall provide notice to the Holder,  including by
way of public  announcement,  at any time,  of its  intention not to comply with
requests for conversions of this Debenture in accordance with the terms hereof;

                  (x) The  Obligor  shall  fail for any  reason to  deliver  the
payment in cash pursuant to a Buy-In (as defined  herein)  within three (3) days
after notice is claimed delivered hereunder;

                  (xi) A material  breach of the Guaranty  Agreement  with Homes
for America Holdings, Inc. dated December 28, 2004;

                  (xii) A material  breach of the mortgages  given to the Holder
for the Fort Myers, Florida and Mesquite and Fort Worth, Texas properties or any
other  mortgage  given by the  Obligor  to the  Holder  before or after the date
hereof; or

                  (xiii) A material  breach by the  Obligor  of its  obligations
under the Securities  Purchase  Agreement and the Escrow  Agreement,  both dated
December 28, 2004, the Amended and Restated Security Agreement,  the Amended and
Restated   Investor   Registration   Rights   Agreement,   the  Transfer   Agent
Instructions,  or any other  agreement  entered into on date hereof  between the
Obligor and the Holder  which is not cured by the  Obligor  within ten (10) days
after receipt of written notice thereof.

          (b) During the time that any portion of this Debenture is outstanding,
if any  Event of  Default  has  occurred,  the  full  principal  amount  of this
Debenture, together with interest and other amounts owing in respect thereof, to
the date of acceleration shall become at the Holder's election,  immediately due
and payable in cash, PROVIDED HOWEVER, the Holder may request (but shall have no
obligation  to request)  payment of such amounts in Common Stock of the Obligor.
If an Event of Default occurs and remains uncured, the Conversion Price shall be
reduced to ninety  percent (90 %) of the  Conversion  Price defined  herein.  In
addition  to any other  remedies,  the Holder  shall have the right (but not the
obligation)  to convert this Debenture at any time after (x) an Event of Default
or (y) the Maturity Date at the Conversion Price then in-effect. The Holder need
not provide and the Obligor hereby waives any  presentment,  demand,  protest or
other notice of any kind, and the Holder may immediately and without  expiration
of any grace period enforce any and all of its rights and remedies hereunder and
all other remedies available to it under applicable law. Such declaration may be
rescinded and annulled by Holder at any time prior to payment hereunder. No such
rescission or annulment  shall affect any subsequent  Event of Default or impair
any right  consequent  thereon.  Upon an Event of Default,  notwithstanding  any
other provision of this Debenture or any Transaction Document,  the Holder shall
have no obligation to comply with or adhere to any  limitations,  if any, on the
conversion of this Debenture or the sale of the Underlying Shares.

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         SECTION 3.        CONVERSION.

         (a) (i) CONVERSION AT OPTION OF HOLDER.

             (A) This Debenture shall be convertible into shares of Common Stock
at the  option of the  Holder,  in whole or in part at any time and from time to
time,  after the  Original  Issue Date (as defined in Section 4) (subject to the
limitations on conversion set forth in SECTION 3(A)(II)  hereof).  The number of
shares of Common Stock  issuable upon a conversion  hereunder  equals the sum of
(i) the  quotient  obtained  by  dividing  (x) the  outstanding  amount  of this
Debenture  to be converted  by (y) the  Conversion  Price (as defined in SECTION
3(C)(I)).  The Obligor shall  deliver  Common Stock  certificates  to the Holder
prior to the Fifth (5th) Trading Day after a Conversion Date.

             (B)  Notwithstanding  anything to the contrary contained herein, if
on any  Conversion  Date:  (1) the number of shares of Common  Stock at the time
authorized, unissued and unreserved for all purposes, or held as treasury stock,
is  insufficient  to pay  principal  and interest  hereunder in shares of Common
Stock; (2) the Common Stock is not listed or quoted for trading on the OTC or on
a  Subsequent  Market;  (3)  the  Obligor  has  failed  to  timely  satisfy  its
conversion; or (4) the issuance of such shares of Common Stock would result in a
violation of SECTION 3(A)(II),  then, at the option of the Holder,  the Obligor,
in lieu of  delivering  shares of Common Stock  pursuant to SECTION  3(A)(I)(A),
shall deliver, within three (3) Trading Days of each applicable Conversion Date,
an amount in cash equal to the product of the outstanding principal amount to be
converted  plus any interest  due therein  divided by the  Conversion  Price and
multiplied by the highest closing price of the stock from date of the conversion
notice till the date that such cash payment is made.

         Further,  if the  Obligor  shall  not  have  delivered  any cash due in
respect of conversion of this Debenture or as payment of interest thereon by the
fifth (5th) Trading Day after the Conversion  Date, the Holder may, by notice to
the Obligor,  require the Obligor to issue  shares of Common  Stock  pursuant to
SECTION  3(C),  except that for such  purpose the  Conversion  Price  applicable
thereto shall be the lesser of the Conversion  Price on the Conversion  Date and
the Conversion Price on the date of such Holder demand.  Any such shares will be
subject to the provisions of this Section.

             (C) The  Holder  shall  effect  conversions  by  delivering  to the
Obligor  a  completed  notice  in the  form  attached  hereto  as  Exhibit  A (a
"CONVERSION NOTICE").  The date on which a Conversion Notice is delivered is the
"CONVERSION  DATE." Unless the Holder is converting the entire  principal amount
outstanding  under this  Debenture,  the Holder is not  required  to  physically
surrender  this  Debenture  to the  Obligor  in  order  to  effect  conversions.
Conversions  hereunder  shall  have  the  effect  of  lowering  the  outstanding
principal  amount of this Debenture plus all accrued and unpaid interest thereon
in an amount  equal to the  applicable  conversion.  The Holder and the  Obligor
shall maintain  records showing the principal  amount  converted and the date of
such conversions. In the event of any dispute or discrepancy, the records of the
Holder shall be controlling and determinative in the absence of manifest error.

             (ii) CERTAIN CONVERSION RESTRICTIONS.

                  (A) A Holder may not convert this  Debenture or receive shares
of Common Stock as payment of interest  hereunder to the extent such  conversion
or receipt of such interest  payment  would result in the Holder,  together with

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any affiliate  thereof,  beneficially  owning (as determined in accordance  with
Section  13(d) of the  Exchange  Act and the rules  promulgated  thereunder)  in
excess of 4.9% of the then  issued  and  outstanding  shares  of  Common  Stock,
including  shares  issuable upon conversion of, and payment of interest on, this
Debenture  held by such Holder  after  application  of this  Section.  Since the
Holder  will not be  obligated  to report to the Obligor the number of shares of
Common  Stock it may  hold at the time of a  conversion  hereunder,  unless  the
conversion  at issue would  result in the  issuance of shares of Common Stock in
excess of 4.9% of the then outstanding  shares of Common Stock without regard to
any other shares which may be  beneficially  owned by the Holder or an affiliate
thereof, the Holder shall have the authority and obligation to determine whether
the restriction  contained in this Section will limit any particular  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
principal  amount of this Debenture is convertible  shall be the  responsibility
and  obligation of the Holder.  If the Holder has delivered a Conversion  Notice
for a  principal  amount of this  Debenture  that,  without  regard to any other
shares that the Holder or its affiliates may  beneficially  own, would result in
the issuance in excess of the  permitted  amount  hereunder,  the Obligor  shall
notify the Holder of this fact and shall  honor the  conversion  for the maximum
principal amount permitted to be converted on such Conversion Date in accordance
with the  periods  described  in SECTION  3(A)(I)(A)  and,  at the option of the
Holder,  either retain any principal amount tendered for conversion in excess of
the  permitted  amount  hereunder for future  conversions  or return such excess
principal amount to the Holder.  The provisions of this Section may be waived by
a Holder (but only as to itself and not to any other  Holder) upon not less than
65 days prior notice to the Obligor.  Other  Holders  shall be unaffected by any
such waiver.

                  (B) The  Holder may not  convert  this  Debenture  at any time
after receipt of an Advance  Notice or during the Pricing  Period  applicable to
such  Advance  Notice,  as such terms are defined in the  Amended  and  Restated
Standby Equity  Distribution  Agreement of even date herewith by and between the
Obligor and the Holder.

         (b) (i) Nothing  herein shall limit a Holder's  right to pursue  actual
damages  or declare  an Event of  Default  pursuant  to SECTION 2 herein for the
Obligor 's failure to deliver  certificates  representing shares of Common Stock
upon conversion  within the period  specified  herein and such Holder shall have
the right to pursue all remedies  available to it at law or in equity including,
without limitation,  a decree of specific  performance and/or injunctive relief,
in each case  without  the need to post a bond or provide  other  security.  The
exercise  of any such  rights  shall not  prohibit  the Holder  from  seeking to
enforce damages pursuant to any other Section hereof or under applicable law.

                  (ii) In addition to any other rights  available to the Holder,
if the Obligor fails to deliver to the Holder such  certificate or  certificates
pursuant to SECTION  3(A)(I)(A)  by the fifth  Trading Day after the  Conversion
Date, and if after such fifth (5th) Trading Day the Holder purchases (in an open
market  transaction or otherwise)  Common Stock to deliver in  satisfaction of a
sale by such  Holder  of the  Underlying  Shares  which the  Holder  anticipated
receiving upon such  conversion (a "BUY-IN"),  then the Obligor shall (A) pay in
cash to the Holder (in addition to any  remedies  available to or elected by the
Holder) the amount by which (x) the Holder's  total  purchase  price  (including
brokerage commissions, if any) for the Common Stock so purchased exceeds (y) the
product of (1) the  aggregate  number of shares of Common Stock that such Holder

                                       7



anticipated  receiving from the conversion at issue multiplied by (2) the market
price of the Common  Stock at the time of the sale giving rise to such  purchase
obligation  and (B) at the option of the Holder,  either  reissue a Debenture in
the principal amount equal to the principal  amount of the attempted  conversion
or deliver  to the  Holder the number of shares of Common  Stock that would have
been issued had the Obligor timely complied with its delivery requirements under
SECTION  3(A)(I)(A).  For example, if the Holder purchases Common Stock having a
total  purchase  price of $11,000 to cover a Buy-In with respect to an attempted
conversion  of  Debentures  with  respect  to  which  the  market  price  of the
Underlying  Shares on the date of conversion was a total of $10,000 under clause
(A) of the immediately preceding sentence,  the Obligor shall be required to pay
the  Holder  $1,000.  The  Holder  shall  provide  the  Obligor  written  notice
indicating the amounts payable to the Holder in respect of the Buy-In.

         (c) (i) The conversion price (the "CONVERSION  PRICE") in effect on any
Conversion  Date shall be equal to one  hundred  percent  (100 %) of the average
closing bid price of the Common Stock,  as quoted by Bloomberg,  LP for the five
(5) trading  days  immediately  preceding  the filing of the  Underlying  Shares
Registration  Statement,  which conversion price may be adjusted pursuant to the
other terms of this Debenture.

             (ii)  If  the  Obligor,   at  any  time  while  this  Debenture  is
outstanding,  shall (a) pay a stock dividend or otherwise make a distribution or
distributions  on  shares  of its  Common  Stock or any  other  equity or equity
equivalent   securities  payable  in  shares  of  Common  Stock,  (b)  subdivide
outstanding  shares of Common Stock into a larger number of shares,  (c) combine
(including  by way of reverse  stock split)  outstanding  shares of Common Stock
into a smaller number of shares, or (d) issue by  reclassification  of shares of
the Common Stock any shares of capital stock of the Obligor, then the Conversion
Price  shall be  multiplied  by a fraction of which the  numerator  shall be the
number of shares of Common Stock (excluding treasury shares, if any) outstanding
before such event and of which the denominator  shall be the number of shares of
Common Stock  outstanding after such event. Any adjustment made pursuant to this
Section  shall  become  effective  immediately  after  the  record  date for the
determination of stockholders  entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.

             (iii)  If  the  Obligor,  at  any  time  while  this  Debenture  is
outstanding,  shall issue  rights,  options or warrants to all holders of Common
Stock (and not to the Holder) entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the  Conversion  Price,  then the
Conversion  Price shall be  multiplied by a fraction,  of which the  denominator
shall be the number of shares of the Common Stock (excluding treasury shares, if
any)  outstanding  on the date of issuance of such rights or warrants  (plus the
number  of  additional  shares of  Common  Stock  offered  for  subscription  or
purchase),  and of which  the  numerator  shall be the  number  of shares of the
Common Stock  (excluding  treasury  shares,  if any)  outstanding on the date of
issuance  of such  rights or  warrants,  plus the  number  of  shares  which the
aggregate offering price of the total number of shares so offered would purchase
at the Conversion  Price.  Such adjustment shall be made whenever such rights or
warrants are issued,  and shall become  effective  immediately  after the record
date for the  determination  of  stockholders  entitled to receive  such rights,
options or warrants.  However,  upon the expiration of any such right, option or

                                       8



warrant to purchase shares of the Common Stock the issuance of which resulted in
an  adjustment in the  Conversion  Price  pursuant to this Section,  if any such
right,  option or warrant  shall expire and shall not have been  exercised,  the
Conversion  Price shall  immediately  upon such  expiration  be  recomputed  and
effective  immediately  upon such  expiration be increased to the price which it
would have been (but  reflecting any other  adjustments in the Conversion  Price
made  pursuant to the  provisions  of this  Section  after the  issuance of such
rights or warrants)  had the  adjustment of the  Conversion  Price made upon the
issuance of such rights,  options or warrants been made on the basis of offering
for  subscription  or purchase  only that  number of shares of the Common  Stock
actually  purchased  upon the  exercise  of such  rights,  options  or  warrants
actually exercised.

             (iv) If the Obligor or any subsidiary  thereof,  as applicable,  at
any time while this Debenture is outstanding, shall issue shares of Common Stock
or rights,  warrants,  options or other  securities or debt that are convertible
into or  exchangeable  for shares of Common Stock ("COMMON  STOCK  EQUIVALENTS")
entitling  any Person to acquire  shares of Common  Stock,  at a price per share
less than the  Conversion  Price (if the  holder of the  Common  Stock or Common
Stock  Equivalent so issued shall at any time,  whether by operation of purchase
price adjustments, reset provisions,  floating conversion,  exercise or exchange
prices or  otherwise,  or due to warrants,  options or rights per share which is
issued in connection with such issuance, be entitled to receive shares of Common
Stock at a price  per  share  which  is less  than the  Conversion  Price,  such
issuance shall be deemed to have occurred for less than the  Conversion  Price),
then, at the sole option of the Holder,  the Conversion  Price shall be adjusted
to mirror the  conversion,  exchange or purchase  price for such Common Stock or
Common Stock Equivalents (including any reset provisions thereof) at issue. Such
adjustment shall be made whenever such Common Stock or Common Stock  Equivalents
are issued.  The Obligor  shall notify the Holder in writing,  no later than one
(1)  business  day  following  the  issuance of any Common Stock or Common Stock
Equivalent subject to this Section,  indicating therein the applicable  issuance
price, or of applicable reset price, exchange price,  conversion price and other
pricing  terms.  No  adjustment  under this Section shall be made as a result of
issuances and exercises of options to purchase shares of Common Stock issued for
compensatory  purposes  pursuant to any of the  Obligor's  stock option or stock
purchase plans.

             (v)  If  the  Obligor,   at  any  time  while  this   Debenture  is
outstanding,  shall  distribute  to all holders of Common  Stock (and not to the
Holder)  evidences  of its  indebtedness  or assets or  rights  or  warrants  to
subscribe  for or purchase any security,  then in each such case the  Conversion
Price  at  which  this  Debenture  shall  thereafter  be  convertible  shall  be
determined by multiplying the Conversion  Price in effect  immediately  prior to
the record date fixed for determination of stockholders entitled to receive such
distribution  by a fraction  of which the  denominator  shall be the Closing Bid
Price  determined  as of the  record  date  mentioned  above,  and of which  the
numerator shall be such Closing Bid Price on such record date less the then fair
market  value at such  record  date of the portion of such assets or evidence of
indebtedness so distributed  applicable to one  outstanding  share of the Common
Stock as determined by the Board of Directors in good faith.  In either case the
adjustments  shall be  described  in a  statement  provided to the Holder of the
portion  of  assets  or  evidences  of   indebtedness  so  distributed  or  such
subscription  rights  applicable to one share of Common Stock.  Such  adjustment
shall be made whenever any such  distribution is made and shall become effective
immediately after the record date mentioned above.

                                       9



             (vi) In case of any  reclassification  of the  Common  Stock or any
compulsory  share exchange  pursuant to which the Common Stock is converted into
other securities,  cash or property,  the Holder shall have the right thereafter
to, at its option, (A) convert the then outstanding  principal amount,  together
with all accrued but unpaid  interest and any other amounts then owing hereunder
in respect of this Debenture into the shares of stock and other securities, cash
and property receivable upon or deemed to be held by holders of the Common Stock
following  such  reclassification  or share  exchange,  and the  Holder  of this
Debenture  shall  be  entitled  upon  such  event  to  receive  such  amount  of
securities,  cash or property  as the shares of the Common  Stock of the Obligor
into which the then outstanding principal amount,  together with all accrued but
unpaid  interest and any other  amounts then owing  hereunder in respect of this
Debenture could have been converted  immediately prior to such  reclassification
or share exchange would have been entitled, or (B) require the Obligor to prepay
the outstanding principal amount of this Debenture,  plus all interest and other
amounts due and payable  thereon.  The entire  prepayment price shall be paid in
cash. This provision shall  similarly apply to successive  reclassifications  or
share exchanges.

             (vii) The Obligor  shall  maintain a share reserve of not less than
500% of the shares of Common Stock issuable upon  conversion of this  Debenture;
and within three (3)  Business  Days  following  the receipt by the Obligor of a
Holder's  notice  that  such  minimum  number  of  Underlying  Shares  is not so
reserved,  the Obligor shall promptly  reserve a sufficient  number of shares of
Common Stock to comply with such requirement.

             (viii) All calculations under this SECTION 3 shall be rounded up to
the nearest $0.001 of a share.

             (ix)  Whenever  the  Conversion  is adjusted  pursuant to SECTION 3
hereof, the Obligor shall promptly mail to the Holder a notice setting forth the
Conversion  Price after such  adjustment and setting forth a brief  statement of
the facts requiring such adjustment.

             (x) If (A) the  Obligor  shall  declare  a  dividend  (or any other
distribution)  on the Common  Stock;  (B) the  Obligor  shall  declare a special
nonrecurring  cash  dividend on or a  redemption  of the Common  Stock;  (C) the
Obligor  shall  authorize the granting to all holders of the Common Stock rights
or warrants to  subscribe  for or  purchase  any shares of capital  stock of any
class or of any  rights;  (D) the  approval of any  stockholders  of the Obligor
shall be required in connection with any  reclassification  of the Common Stock,
any  consolidation  or  merger  to which  the  Obligor  is a party,  any sale or
transfer  of all or  substantially  all of the  assets  of the  Obligor,  of any
compulsory  share  exchange  whereby the Common  Stock is  converted  into other
securities,  cash or property;  or (E) the Obligor shall authorize the voluntary
or  involuntary  dissolution,  liquidation  or winding up of the  affairs of the
Obligor;  then, in each case, the Obligor shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Debenture,  and shall
cause to be mailed to the Holder at its last address as it shall appear upon the
stock books of the  Obligor,  at least  twenty (20)  calendar  days prior to the
applicable record or effective date hereinafter  specified, a notice stating (x)
the date on which a record  is to be taken  for the  purpose  of such  dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such  dividend,  distributions,   redemption,  rights  or  warrants  are  to  be
determined  or (y)  the  date on  which  such  reclassification,  consolidation,

                                       10



merger,  sale,  transfer or share  exchange is expected to become  effective  or
close,  and the date as of which it is expected that holders of the Common Stock
of record  shall be entitled to exchange  their  shares of the Common  Stock for
securities,  cash or other  property  deliverable  upon  such  reclassification,
consolidation,  merger,  sale,  transfer or share exchange,  provided,  that the
failure to mail such  notice or any defect  therein  or in the  mailing  thereof
shall not affect the validity of the corporate  action  required to be specified
in such  notice.  The Holder is entitled to convert  this  Debenture  during the
20-day calendar period  commencing the date of such notice to the effective date
of the event triggering such notice.

             (xi) In case of any (1) merger or  consolidation  of the Obligor or
any  subsidiary of the Obligor with or into another  Person,  or (2) sale by the
Obligor or any  subsidiary of the Obligor of more than one-half of the assets of
the Obligor in one or a series of related transactions,  a Holder shall have the
right to (A) exercise any rights under SECTION  2(B),  (B) convert the aggregate
amount of this  Debenture  then  outstanding  into the shares of stock and other
securities, cash and property receivable upon or deemed to be held by holders of
Common Stock following such merger, consolidation or sale, and such Holder shall
be entitled  upon such event or series of related  events to receive such amount
of  securities,  cash and property as the shares of Common Stock into which such
aggregate   principal  amount  of  this  Debenture  could  have  been  converted
immediately  prior to such  merger,  consolidation  or  sales  would  have  been
entitled, or (C) in the case of a merger or consolidation, require the surviving
entity to issue to the Holder a convertible  Debenture  with a principal  amount
equal to the  aggregate  principal  amount of this  Debenture  then held by such
Holder,  plus all accrued and unpaid  interest and other amounts owing  thereon,
which such  newly  issued  convertible  Debenture  shall  have  terms  identical
(including with respect to conversion) to the terms of this Debenture, and shall
be entitled to all of the rights and  privileges of the Holder of this Debenture
set forth  herein and the  agreements  pursuant  to which this  Debentures  were
issued. In the case of clause (C), the conversion price applicable for the newly
issued shares of convertible preferred stock or convertible  Debentures shall be
based upon the amount of securities, cash and property that each share of Common
Stock  would  receive in such  transaction  and the  Conversion  Price in effect
immediately prior to the effectiveness or closing date for such transaction. The
terms of any such merger,  sale or consolidation  shall include such terms so as
to  continue to give the Holder the right to receive  the  securities,  cash and
property set forth in this Section upon any  conversion or redemption  following
such event. This provision shall similarly apply to successive such events.

         (d) The Obligor  covenants  that it will at all times  reserve and keep
available out of its authorized  and unissued  shares of Common Stock solely for
the  purpose of  issuance  upon  conversion  of this  Debenture  and  payment of
interest on this Debenture, each as herein provided, free from preemptive rights
or any other actual contingent purchase rights of persons other than the Holder,
not less than such number of shares of the Common Stock as shall (subject to any
additional  requirements  of the  Obligor as to  reservation  of such shares set
forth in this  Debenture) be issuable  (taking into account the  adjustments and
restrictions  of SECTIONS 2(B) AND 3(C)) upon the conversion of the  outstanding
principal  amount of this  Debenture  and  payment of  interest  hereunder.  The
Obligor  covenants  that all shares of Common  Stock  that shall be so  issuable
shall,  upon  issue,  be duly and  validly  authorized,  issued and fully  paid,
nonassessable  and, if the  Underlying  Shares  Registration  Statement has been
declared  effective  under the  Securities  Act,  registered  for public sale in
accordance with such Underlying Shares Registration Statement.

                                       11



         (e) Upon a conversion  hereunder  the Obligor  shall not be required to
issue stock certificates  representing  fractions of shares of the Common Stock,
but may if  otherwise  permitted,  make a cash  payment  in respect of any final
fraction of a share based on the Closing Bid Price at such time.  If the Obligor
elects  not,  or is unable,  to make such a cash  payment,  the Holder  shall be
entitled to receive,  in lieu of the final fraction of a share,  one whole share
of Common Stock.

         (f) The  issuance  of  certificates  for shares of the Common  Stock on
conversion of this Debenture  shall be made without charge to the Holder thereof
for any documentary stamp or similar taxes that may be payable in respect of the
issue or delivery of such  certificate,  provided  that the Obligor shall not be
required to pay any tax that may be payable in respect of any transfer  involved
in the issuance and delivery of any such  certificate  upon conversion in a name
other than that of the Holder of such  Debenture  so  converted  and the Obligor
shall not be required to issue or deliver such certificates  unless or until the
person or persons requesting the issuance thereof shall have paid to the Obligor
the  amount of such tax or shall have  established  to the  satisfaction  of the
Obligor that such tax has been paid.

         (g) Any notices,  consents, waivers or other communications required or
permitted  to be given  under the terms  hereof  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  confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or  (iii)  one (1)  trading  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 Obligor, to:        Enclaves Group, Inc.
                              45 Knollwood Road, Fifth Floor
                              Elmsford, New York 10523
                              Attention:   Daniel G. Hayes
                              Telephone:   (914) 592-2100
                              Facsimile:   (914) 592-2105

With a copy to:               Olshan Grundman Frome Rosenzweig & Wolosky LLP
                              Park Avenue Tower
                              65 East 55th Street
                              New York, NY 10022
                              Attention:   Robert H. Friedman, Esq.
                              Telephone:   (212) 451-2220
                              Facsimile:   (212) 451-2222

If to the Holder:             Cornell Capital Partners, LP
                              101 Hudson Street, Suite 3700
                              Jersey City, NJ 07303
                              Attention:   Robert D. Press
                              Telephone:   (201) 985-8300

                                       12



With a copy to:               Troy Rillo, Esq.
                              101 Hudson Street - Suite 3700
                              Jersey City, NJ 07302
                              Telephone:   (201) 985-8300
                              Facsimile:   (201) 985-8266


or at such other address and/or facsimile number and/or to the attention of such
other person as the  recipient  party has  specified by written  notice given to
each other  party three (3)  business  days prior to the  effectiveness  of such
change.  Written  confirmation  of receipt  (i) given by the  recipient  of such
notice,   consent,   waiver  or  other   communication,   (ii)  mechanically  or
electronically  generated by the sender's facsimile machine containing the time,
date,  recipient  facsimile  number  and an  image  of the  first  page  of such
transmission  or (iii) provided by a nationally  recognized  overnight  delivery
service, shall be rebuttable evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

         SECTION 4.  DEFINITIONS.  For the purposes hereof,  the following terms
shall have the following meanings:

         "BUSINESS DAY" means any day except Saturday,  Sunday and any day which
shall be a federal  legal holiday in the United States or a day on which banking
institutions  are  authorized or required by law or other  government  action to
close.

         "CHANGE  OF  CONTROL  TRANSACTION"  means  the  occurrence  of  (a)  an
acquisition  after the date hereof by an  individual  or legal entity or "group"
(as  described  in Rule  13d-5(b)(1)  promulgated  under  the  Exchange  Act) of
effective  control  (whether  through legal or  beneficial  ownership of capital
stock of the Obligor,  by contract or  otherwise)  of in excess of fifty percent
(50%) of the voting  securities of the Obligor  (except that the  acquisition of
voting  securities  by the  Holder  shall not  constitute  a Change  of  Control
Transaction for purposes hereof),  (b) a replacement at one time or over time of
more than one-half of the members of the board of directors of the Obligor which
is not approved by a majority of those  individuals who are members of the board
of  directors  on the date  hereof (or by those  individuals  who are serving as
members of the board of directors on any date whose  nomination  to the board of
directors  was  approved by a majority of the members of the board of  directors
who are members on the date hereof),  (c) the merger,  consolidation  or sale of
fifty  percent  (50%) or more of the assets of the Obligor or any  subsidiary of
the  Obligor in one or a series of  related  transactions  with or into  another
entity, or (d) the execution by the Obligor of an agreement to which the Obligor
is a party or by which it is bound,  providing  for any of the  events set forth
above in (a), (b) or (c).

         "COMMISSION" means the Securities and Exchange Commission.

         "COMMON STOCK" means the common stock, par value $0.001, of the Obligor
and stock of any other class into which such shares may  hereafter be changed or
reclassified.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

                                       13



         "FUNDING EVENT" means any transaction or series of transactions  closed
after the Original  Issue Date in which the Obligor  raises  $10,000,000 or more
through  the  sale of their  equity  securities  or  securities  exercisable  or
convertible into equity securities.

         "ORIGINAL ISSUE DATE" shall mean the date of the first issuance of this
Debenture  regardless of the number of transfers and regardless of the number of
instruments, which may be issued to evidence such Debenture.

         "CLOSING  BID  PRICE"  means the  price per share in the last  reported
trade of the Common Stock on the OTC or on the  exchange  which the Common Stock
is then listed as quoted by Bloomberg, LP.

         "PERSON"  means  a   corporation,   an   association,   a  partnership,
organization,  a business, an individual,  a government or political subdivision
thereof or a governmental agency.

          "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

         "TRADING  DAY"  means a day on which the  shares  of  Common  Stock are
quoted on the OTC or quoted  or  traded on such  Subsequent  Market on which the
shares of Common  Stock are then quoted or listed;  provided,  that in the event
that the shares of Common Stock are not listed or quoted, then Trading Day shall
mean a Business Day.

         "TRANSACTION  DOCUMENTS" means the Securities Purchase Agreement or any
other agreement  delivered in connection with the Securities Purchase Agreement,
including,  without limitation,  the Escrow Agreement, the Guaranty Agreement by
and among Homes For America Holdings,  Inc.,  Cornell Capital  Partners,  LP and
Montgomery Equity Partners, Ltd. and the Investor Registration Rights Agreement,
all dated December 28, 2004 and the mortgages  given to the Holder for the North
Fort Myers,  Florida and Mesquite,  Texas  properties as more fully described in
the Securities  Purchase  Agreement  dated December 28, 2004 and the mortgage of
even date herewith given to the Holder for the Fort Worth,  Texas property,  and
the Amended and Restated Investor  Registration  Rights Agreement,  the Transfer
Agent Instructions, the Amended and Restated Security Agreement and the Guaranty
given by Enclaves Group,  Inc., a wholly owned  subsidiary of the Obligor to the
Holder, all of which are date of even date herewith.

         "UNDERLYING  SHARES"  means the shares of Common  Stock  issuable  upon
conversion of this  Debenture or as payment of interest in  accordance  with the
terms hereof.

         "UNDERLYING  SHARES   REGISTRATION   STATEMENT"  means  a  registration
statement  meeting  the  requirements  set  forth  in  the  Registration  Rights
Agreement,  covering among other things the resale of the Underlying  Shares and
naming the Holder as a "selling stockholder" thereunder.

         SECTION 5. Except as expressly  provided  herein,  no provision of this
Debenture  shall  alter or impair  the  obligations  of the  Obligor,  which are
absolute and unconditional,  to pay the principal of, interest and other charges
(if any) on, this  Debenture at the time,  place,  and rate,  and in the coin or
currency,  herein  prescribed.  This  Debenture  is a direct  obligation  of the
Obligor.  This  Debenture  ranks  pari passu  with all other  Debentures  now or
hereafter issued under the terms set forth herein.  As long as this Debenture is
outstanding,  the Obligor shall not and shall cause their  subsidiaries  not to,

                                       14



without the consent of the Holder,  (i) amend its certificate of  incorporation,
bylaws or other  charter  documents so as to adversely  affect any rights of the
Holder;  (ii)  repay,  repurchase  or offer to repay,  repurchase  or  otherwise
acquire shares of its Common Stock or other equity  securities  other than as to
the Underlying  Shares to the extent permitted or required under the Transaction
Documents;  or  (iii)  enter  into  any  agreement  with  respect  to any of the
foregoing.

         SECTION 6. This  Debenture  shall not  entitle the Holder to any of the
rights of a stockholder of the Obligor,  including without limitation, the right
to vote, to receive dividends and other distributions,  or to receive any notice
of, or to attend,  meetings  of  stockholders  or any other  proceedings  of the
Obligor,  unless  and to the extent  converted  into  shares of Common  Stock in
accordance with the terms hereof.

         SECTION 7. If this Debenture is mutilated,  lost,  stolen or destroyed,
the Obligor shall execute and deliver, in exchange and substitution for and upon
cancellation of the mutilated Debenture,  or in lieu of or in substitution for a
lost, stolen or destroyed Debenture, a new Debenture for the principal amount of
this Debenture so mutilated,  lost, stolen or destroyed but only upon receipt of
evidence  of such  loss,  theft or  destruction  of such  Debenture,  and of the
ownership hereof, and indemnity,  if requested,  all reasonably  satisfactory to
the Obligor.

         SECTION 8. No  indebtedness  of the Obligor is senior to this Debenture
in  right  of  payment,  whether  with  respect  to  interest,  damages  or upon
liquidation  or  dissolution  or otherwise.  Without the Holder's  consent,  the
Obligor will not and will not permit any of their  subsidiaries  to, directly or
indirectly,   enter  into,  create,   incur,  assume  or  suffer  to  exist  any
indebtedness  of any kind,  on or with  respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or profits
there from that is senior in any respect to the obligations of the Obligor under
this Debenture.

         SECTION  9.  This  Debenture  shall be  governed  by and  construed  in
accordance  with the laws of the State of New Jersey,  without  giving effect to
conflicts of laws thereof.  Each of the parties  consents to the jurisdiction of
the Superior  Courts of the State of New Jersey  sitting in Hudson  County,  New
Jersey and the U.S.  District  Court for the  District of New Jersey  sitting in
Newark,  New Jersey in connection  with any dispute arising under this Debenture
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.

         SECTION 10. If the Obligor  fails to strictly  comply with the terms of
this  Debenture,  then the Obligor shall  reimburse the Holder  promptly for all
fees, costs and expenses,  including,  without  limitation,  attorneys' fees and
expenses incurred by the Holder in any action in connection with this Debenture,
including, without limitation, those incurred: (i) during any workout, attempted
workout,  and/or in  connection  with the  rendering  of legal  advice as to the
Holder's rights, remedies and obligations, (ii) collecting any sums which become
due  to the  Holder,  (iii)  defending  or  prosecuting  any  proceeding  or any
counterclaim to any proceeding or appeal;  or (iv) the protection,  preservation
or enforcement of any rights or remedies of the Holder.

                                       15



         SECTION  11. Any waiver by the Holder of a breach of any  provision  of
this Debenture  shall not operate as or be construed to be a waiver of any other
breach  of such  provision  or of any  breach  of any  other  provision  of this
Debenture. The failure of the Holder to insist upon strict adherence to any term
of this Debenture on one or more  occasions  shall not be considered a waiver or
deprive that party of the right  thereafter  to insist upon strict  adherence to
that term or any other term of this Debenture. Any waiver must be in writing.

         SECTION 12. If any provision of this  Debenture is invalid,  illegal or
unenforceable,  the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any person or circumstance,  it shall  nevertheless
remain applicable to all other persons and  circumstances.  If it shall be found
that any interest or other amount deemed  interest due  hereunder  shall violate
applicable laws governing  usury,  the applicable rate of interest due hereunder
shall  automatically be lowered to equal the maximum permitted rate of interest.
The Obligor  covenants  (to the extent that it may lawfully do so) that it shall
not at any time insist upon,  plead, or in any manner  whatsoever  claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would  prohibit  or forgive  the  Obligor  from paying all or any portion of the
principal of or interest on this  Debenture  as  contemplated  herein,  wherever
enacted,  now or at any time  hereafter  in  force,  or  which  may  affect  the
covenants or the performance of this  indenture,  and the Obligor (to the extent
it may lawfully do so) hereby  expressly waives all benefits or advantage of any
such law,  and  covenants  that it will not, by resort to any such law,  hinder,
delay or impeded the  execution of any power herein  granted to the Holder,  but
will  suffer and permit  the  execution  of every such as though no such law has
been enacted.

         SECTION 13. Whenever any payment or other obligation hereunder shall be
due on a day other than a Business  Day,  such payment shall be made on the next
succeeding Business Day.

         SECTION 14. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE  THE  RIGHT  ANY OF THEM  MAY HAVE TO A TRIAL  BY JURY IN  RESPECT  OF ANY
LITIGATION  BASED  HEREON OR ARISING OUT OF,  UNDER OR IN  CONNECTION  WITH THIS
AGREEMENT  OR ANY  TRANSACTION  DOCUMENT  OR ANY  COURSE OF  CONDUCT,  COURSE OF
DEALING,  STATEMENTS  (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.  THIS
PROVISION  IS  A  MATERIAL  INDUCEMENT  FOR  THE  PARTIES'  ACCEPTANCE  OF  THIS
AGREEMENT.

         IN WITNESS  WHEREOF,  the Obligor has caused this  Secured  Convertible
Debenture to be duly  executed by a duly  authorized  officer as of the date set
forth above.

                                   ENCLAVES GROUP, INC.

                                   By:   /s/ Daniel G. Hayes
                                         ----------------------
                                   Name:    Daniel G. Hayes
                                   Title:   President and CEO

                                       16




                                   EXHIBIT "A"

                              NOTICE OF CONVERSION

        (TO BE EXECUTED BY THE HOLDER IN ORDER TO CONVERT THE DEBENTURE)



TO:

         The undersigned hereby  irrevocably elects to convert  $_______________
of the principal  amount of the above  Debenture  into Shares of Common Stock of
Enclaves Group,  Inc.,  according to the conditions  stated  therein,  as of the
Conversion Date written below.

CONVERSION DATE:                     ___________________________________________
APPLICABLE CONVERSION PRICE:         ___________________________________________
SIGNATURE:                           ___________________________________________
NAME:                                ___________________________________________
ADDRESS:                             ___________________________________________
AMOUNT TO BE CONVERTED:              $__________________________________________
AMOUNT OF DEBENTURE UNCONVERTED:     $__________________________________________
CONVERSION PRICE PER SHARE:          $__________________________________________
NUMBER OF  SHARES OF COMMON
STOCK TO BE ISSUED:                  ___________________________________________
PLEASE  ISSUE THE SHARES OF
COMMON STOCK IN THE  FOLLOWING
NAME AND TO THE FOLLOWING ADDRESS:   ___________________________________________
ISSUE TO:                            ___________________________________________
AUTHORIZED SIGNATURE:                ___________________________________________
NAME:                                ___________________________________________
TITLE:                               ___________________________________________
PHONE NUMBER:                        ___________________________________________
BROKER DTC PARTICIPANT CODE:         ___________________________________________
ACCOUNT NUMBER:                      ___________________________________________