Document:

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                                                                    EXHIBIT 10.2

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
     ("THE ACT") OR UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE (THE
     "LAWS"). THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
     HYPOTHECATED IN THE ABSENCE OF A REGISTRATION AND QUALIFICATION OF THESE
     SECURITIES UNDER THE ACT AND THE LAWS OR AN OPINION OF COUNSEL SATISFACTORY
     TO THE ISSUER THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED
     UNDER THE ACT AND THE LAWS.

                                WARRANT AGREEMENT

         THIS WARRANT AGREEMENT (this "AGREEMENT") is entered into and effective
as of May 12, 2003 (the "EFFECTIVE DATE"), by and between MicroIslet, Inc., a
Nevada corporation (the "COMPANY"), and John J. Hagenbuch, Trustee U/D/T dated
September 13, 1995 ("WARRANTHOLDER").

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the Company and the Warrantholder certify and agree
as follows:

         1. GRANT OF THE RIGHT TO PURCHASE COMMON STOCK. For value received, the
adequacy of which is hereby acknowledged, the Company hereby grants to
Warrantholder, and Warrantholder is entitled to, upon the terms and subject to
the conditions set forth in this Agreement, a warrant (the "WARRANT") to
subscribe for and purchase from the Company a number of shares of the Company's
Common Stock (the "SHARES") equal to FIFTY THOUSAND (50,000) Shares of the
Company's Common Stock at a purchase price of eighty five cents ($0.85) per
Share (the "EXERCISE PRICE"). This Warrant is being issued pursuant to the 120
Day Note between the Holder and the Company of even date herewith (the "NOTE").
Notwithstanding anything to the contrary in this Agreement, the rights under
this Warrant are subject to the limitations stated in the Note.

         2. EXPIRATION. The Warrant shall expire and cease to be exercisable at
5:00 p.m. Pacific time on the tenth anniversary of the Effective Date.

         3. METHOD OF EXERCISE; PAYMENT; ISSUANCE OF SHARES. Subject to Section
2 hereof, the purchase right represented by the Warrant may be exercised by the
Warrantholder, in whole or in part, by tendering to the Company a duly executed
Notice of Exercise in the form attached as Exhibit A at the principal office of
the Company and by payment to the Company, by check, of an amount equal to the
then applicable Exercise Price multiplied by the number of shares then being
purchased. In the event of any exercise of the rights represented by this
Agreement, certificates for the shares of stock so purchased shall be in the
name of, and delivered to, Warrantholder, or as Warrantholder may direct
(subject to the terms of transfer contained herein). Such delivery shall be made
within thirty (30) days after exercise and at the Company's expense. The shares
so issued upon exercise of the rights represented by this Agreement shall be
duly authorized, validly issued, fully paid and non-assessable.

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         4. RESERVATION OF SHARES. The Company shall at all times have
authorized and reserved a sufficient number of shares of its Common Stock to
provide for the exercise of the rights to purchase the Shares as provided in
this Agreement.

         5. NO RIGHTS AS STOCKHOLDER. This Agreement does not entitle
Warrantholder to any voting rights or other rights as a stockholder of the
Company prior to the purchase of the Shares as provided in this Agreement.

         6. ADJUSTMENT RIGHTS. The Exercise Price and the number of Shares
purchasable hereunder are subject to adjustment from time to time as follows:

                  6.1 MERGER AND SALE OF ASSETS. If at any time there shall be
(i) a reorganization of the shares of the Company's Common Stock (other than a
combination, reclassification, exchange or subdivision of shares otherwise
provided for herein), or a merger or consolidation of the Company with or into
another corporation where the Company is not the surviving corporation, or a
reverse triangular merger in which the Company is the surviving entity but the
shares of the Company's capital stock outstanding immediately prior to the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash, or otherwise, or (iii) the sale of all or
substantially all of the Company's properties and assets to any other person,
then, as a part of such reorganization, merger, consolidation or sale, whether
for stock, cash, or other consideration, lawful provision shall be made so that
Warrantholder shall thereafter be entitled to receive upon exercise of its
Warrants the number of shares of Common Stock or other securities of the
successor corporation resulting from such merger or consolidation to which
Warrantholder would have been entitled if the Warrants had been exercised
immediately prior to such capital reorganization, merger, consolidation or sale.
In any such case, appropriate adjustment (as determined in good faith by the
Company's Board of Directors) shall be made in the application of the provisions
of this Warrant Agreement with respect to the rights and interest of
Warrantholder after such reorganization, merger, consolidation or sale so that
the provisions of this Warrant Agreement (including adjustments of the Exercise
Price and the number of Shares issuable pursuant to the terms and conditions of
this Warrant Agreement) shall be applicable after such event, as near as
reasonably may be, in relation to any shares deliverable after that event upon
the exercise of the Warrants.

                  6.2 RECLASSIFICATION OF SHARES. If the Company at any time
shall, by combination, reclassification, exchange or subdivision of securities
or otherwise, change all of the outstanding shares of Common Stock into the same
or a different number of securities of any other class or classes, this Warrant
Agreement shall thereafter represent the right to acquire such number and kind
of securities as would have been issuable hereunder had the Warrantholder
exercised its rights with respect to all of the shares then represented by this
Warrant Agreement immediately prior to such combination, reclassification,
exchange, subdivision or other change.

                  6.3 SUBDIVISION OR COMBINATION OF SHARES. If the Company at
any time shall combine or subdivide its Common Stock, the Exercise Price shall
be proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.

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                  6.4 STOCK DIVIDENDS. If the Company at any time shall pay a
dividend payable in the Company's Common Stock, then the Exercise Price shall be
adjusted, from and after the date of determination of shareholders entitled to
receive such dividend, to a price determined by multiplying the Exercise Price
in effect immediately prior to such date of determination by a fraction (i) the
numerator of which shall be the total number of all shares of the Company's
Common Stock outstanding immediately prior to such dividend (assuming all
convertible securities are then converted into Common Stock) and (ii) the
denominator of which shall be the total number of all shares of the Company's
Common Stock outstanding immediately after such dividend (assuming all
convertible securities are then converted into Common Stock). Warrantholder
shall thereafter be entitled to purchase, at the Exercise Price resulting from
such adjustment, the number of shares of Common Stock (calculated to the nearest
whole share) obtained by multiplying the Exercise Price in effect immediately
prior to such adjustment by the number of shares of Common Stock issuable upon
the exercise hereof immediately prior to such adjustment and dividing the
product thereof by the Exercise Price resulting from such adjustment.

         7. WARRANT NONTRANSFERABLE. The Warrant may not be sold, pledged,
assigned or transferred in any manner without the written consent of the
Company.

         8. SECURITIES ISSUES. Warrantholder, intending that the Company rely
upon the following representations and covenants of Warrantholder, which by
execution of this Agreement, Warrantholder hereby confirms:

                  8.1 ACCREDITED INVESTOR. Warrantholder is familiar with the
definition of "accredited investor" set forth in Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended. Warrantholder is an
accredited investor as so defined.

                  8.2 ACQUISITION FOR OWN ACCOUNT. Warrantholder is entering
into this Agreement for Warrantholder's own account and not with a view to or
for sale in connection with any distribution of securities.

                  8.3 NO TRANSFERS CONTEMPLATED. Warrantholder does not
presently have any contracts, undertaking, agreement or arrangement with any
person to sell, transfer or grant participation to such person or to any third
person, with respect to any securities of the Company.

                  8.4 TRUE INVESTMENT PURPOSE. Warrantholder has not been
organized for the purpose of entering into this Agreement.

                  8.5 RESTRICTIONS ON ACQUIRED SECURITIES. Warrantholder
acknowledges that any securities acquired pursuant to this Agreement may not be
sold, pledged, assigned or transferred in any manner, except pursuant to
registration and qualification under applicable securities laws, or if an
exemption from such registration or qualification is applicable.

                  8.6 INVESTMENT EXPERIENCE. Warrantholder is an investor in
securities of small capitalization public companies and is able to fend for
itself, bear the economic risk of its investment and evaluate the merits and
risks of the transactions provided in this Agreement.

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                  8.7 ACCESS TO INFORMATION. Warrantholder has had access to,
and has reviewed as it sees fit, all of the Company's public reports filed with
the Securities and Exchange Commission. Warrantholder acknowledges that it has
not received any material information in connection with this investment which
is not contained in, or which is contrary to, the information in such public
reports, and Warrantholder has relied only on such public reports in connection
with its investment decision.

                  8.8 RESTRICTED SHARES/LEGEND. Warrantholder understands that
the Shares issuable upon the exercise of the Warrant under this Agreement shall
be "restricted securities" as that term is defined in Rule 144 promulgated under
the Securities Act of 1933, as amended, and shall bear a legend in the form
substantially as follows:

         THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933 (THE "ACT") OR UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE
         (THE "LAWS"). THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
         PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION AND
         QUALIFICATION OF THESE SECURITIES UNDER THE ACT AND THE LAWS OR AN
         OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION
         AND QUALIFICATION ARE NOT REQUIRED UNDER THE ACT AND THE LAWS.

                  8.9 NO GENERAL SOLICITATION. Warrantholder has not seen or
received any advertisement or general solicitation in connection with this
Agreement or the Warrant.

         9. MARKET STAND-OFF. If Warrantholder's Shares are not registered, then
in connection with any underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed under the
Securities Act of 1933, as amended, including the Company's initial public
offering, Warrantholder shall not sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise dispose
of or transfer for value or otherwise agree to engage in any of the foregoing
transactions with respect to any of the Shares without the prior written consent
of the Company and its underwriters, for such period of time from and after the
effective date of such registration statement as may be requested by the Company
or such underwriters, up to a maximum of one hundred eighty (180) days, so long
as such stand-off provisions are no more onerous than those applicable to any
securities held by any officer or director of the Company.

         10. MISCELLANEOUS.

                  10.1 GOVERNING LAW. This Agreement is entered into in San
Diego, California, shall be performed in California, and shall be interpreted,
enforced and adjudicated in Carlsbad, California under the internal laws of the
State of California without regard to California's conflict-of-law provisions.

                  10.2 ENTIRE AGREEMENT. This Agreement and the Note constitutes
the final, complete and exclusive agreement between the parties pertaining to
the subject of this Agreement, and supersedes all prior and contemporaneous
agreements. This Agreement represents the warrant required to be delivered
pursuant to the Note. None of the provisions of this Agreement shall be deemed,

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or shall constitute, a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver. Any changes or
supplements to this Agreement must be in writing and signed by both of the
parties.

                  10.3 ASSIGNMENT. Not in derogation of Section 7 hereof, this
Agreement shall be binding on, and shall inure to the benefit of, the parties
and their respective heirs, legal representatives, successors and assigns.

                  10.4 NOTICES, ETC. All notices, requests, demands or other
communications that are required or permitted under this Agreement shall be in
writing and shall be deemed to have been given at the earlier of the date when
actually delivered to a party or three (3) days after being deposited in the
United States mail, postage prepaid, return receipt requested, and addressed as
follows, unless and until any of such parties notifies the others in accordance
with this Section of a change of address:

                           The "Company":     MicroIslet, Inc.
                                              6370 Nancy Ridge Drive, Suite 112
                                              San Diego, CA 92121
                                              Attn: Chief Financial Officer

                           "Warrantholder":   John J. Hagenbuch, Trustee U/D/T
                                              dated September 13, 1995
                                              353 Sacramento Street, 21st Floor
                                              San Francisco, CA 94111

                  10.5 SEVERABILITY. In the event that any one or more of the
provisions contained in this Agreement or in any other document referenced in
this Agreement, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other such
document.

                  10.6 TIME IS OF THE ESSENCE. Time is absolutely of the essence
in construing each provision of this Agreement.

                  10.7 INTERPRETATION. The headings set forth in this Agreement
are for convenience only and shall not be used in interpreting this Agreement.

                  10.8 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument. A faxed signature
shall be as valid as an originally executed signature.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the Effective Date.

                                                "Company"

                                                MICROISLET, INC.,
                                                a Nevada corporation

                                                By: /s/ John F. Steel IV
                                                    ----------------------------
                                                    John F. Steel IV, Chief
                                                    Executive Officer

                                                "Warrantholder"

                                                JOHN J. HAGENBUCH, TRUSTEE U/D/T
                                                DATED SEPTEMBER 13, 1995

                                                By: /s/ John J. Hagenbuch
                                                    ---------------------
                                                    John J. Hagenbuch, Trustee

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                                    Exhibit A
                                    ---------

                               Notice of Exercise
                               ------------------

To:      Chief Financial Officer
         MicroIslet, Inc.

1.       The undersigned Warrantholder ("Warrantholder") elects to acquire
         shares of the Common Stock of MicroIslet, Inc., a Nevada corporation
         (the "Company"), pursuant to the terms of the Warrant Agreement dated
         as of May 12, 2003 (the "Warrant").

2.       The Warrantholder elects to purchase _____________ shares of Common
         Stock as provided in Section 3 and tenders herewith a check in the
         amount of $___________ as payment of the purchase price.

3.       In exercising its rights to purchase the Common Stock of the Company,
         the undersigned hereby confirms and acknowledges the representations
         made in Section 8 of the Warrant.

4.       Please issue a certificate representing the shares of the Common Stock
         in the name of the undersigned or in such other name as is specified
         below:

                  Name:
                               -------------------------------------------------
                  Address:
                               -------------------------------------------------

                  Taxpayer I.D No.:
                                     ----------------------------------

                                            WARRANTHOLDER

                                            By:
                                                --------------------------------
                                                 Name:
                                                       -------------------------
                                                 Title:
                                                         -----------------------

                                            Date:
                                                     ---------------------------<PAGE>
EXHIBIT 4.1

                    CERTIFICATE OF DESIGNATION OF THE RIGHTS
                         AND PREFERENCES OF THE SERIES L
              CONVERTIBLE PREFERRED STOCK OF U.S. WEST HOMES, INC.

         The undersigned, being all of the directors of U.S. West Homes, Inc.
(the "Corporation"), take the following actions by unanimous written consent
without a meeting as allowed for under Nevada law.

         WHEREAS it is in the best interest of the Corporation to create a
series of preferred stock for future use to attract investment capital and/or to
resolve the Corporation's indebtedness with creditors;

         WHEREAS it is in the best interest of the Corporation to prepare a
Certificate of Designation of the Rights and Preferences of the Series L
Convertible Preferred Stock for filing with the Nevada Secretary of State to set
forth the rights and preferences of the Series L Convertible Preferred Stock;

         WHEREAS this Certificate of Designation of the Rights and Preferences
of the Series L Convertible Preferred Stock supercedes and replaces any other
Certificate of Designation of the Rights and Preferences of the Series L
Convertible Preferred Stock on file with the Secretary of State;

         WHEREAS, the Corporation's Articles of Incorporation, as amended,
provides that the Corporation has authorized Five Hundred Million (500,000,000)
shares of $.001 par value preferred stock and, further, that the designation,
powers, preferences and relative participating, option or other special rights
and qualification, limitations or restrictions of the shares of such preferred
stock may be issued from time to time in one or more series, each of such series
to have such voting powers, designation, preferences, and relative
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof, as expressed herein or in a resolution or
resolutions, providing for the issuance of such series, adopted by the
directors;

         WHEREAS, THE CORPORATION DOES HEREBY CERTIFY that pursuant to the
authority contained in its Articles of Incorporation, and in accordance with the
provisions of the applicable law of Nevada, the Corporation's directors have
duly adopted the following resolutions determining the Designations, Rights and
Preferences of a special class of its authorized Preferred Stock, herein
designated as Series L Convertible Preferred Stock; and

         WHEREAS, to accommodate the Corporation's desire to offer shares of its
preferred stock to increase its equity capital, the Corporation has designated a
special class of its preferred stock, as follows:

NOW, THEREFORE, BE IT:

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         RESOLVED, that pursuant to the authority vested in the directors of
this Corporation by its Articles of Incorporation, a special class of preferred
stock of the Corporation be and are hereby created out of the 500,000,000 shares
of preferred stock available for issuance, such series to be designed as Series
L Convertible Preferred Stock, consisting of one million (1,000,000) shares, of
which the preferences and relative rights and qualifications, limitations or
restrictions thereof (in addition to those set forth in the Corporation's
Articles of Incorporation), shall be as stated below:

         The powers, preferences and rights granted to the Series L Convertible
Preferred Stock (as defined below) or the holders thereof are as follows:

         1. DESIGNATION AND RANK. The series of Preferred Stock shall be
designated the "Series L Convertible Preferred Stock" ("Series L Preferred") and
shall consist of 1,000,000 shares. The Series L Preferred and any other series
of Preferred Stock authorized by the Board of Directors of this Corporation are
hereinafter referred to as "Preferred Stock" or "Preferred." The Series L
Preferred shall be senior to the common stock and all other shares of Preferred
Stock that may be later authorized.

         2. DIVIDEND RATE AND RIGHTS. Holders of the Series L Preferred shall be
entitled to receive Common Stock dividends or other distributions when, as, and
if declared by the directors of the Corporation, with the holders of the Common
Stock on an as converted basis.

         3. CONVERSION INTO COMMON STOCK.

         (a)      RIGHT TO CONVERT. Each share of Series L Preferred shall be
                  convertible, at the option of the holder thereof and subject
                  to notice requirements of paragraph 3(b), at any time after
                  the date of issuance of such share into such number of fully
                  paid and non-assessable shares of Common Stock as is
                  determined by multiplying the number of issued and outstanding
                  shares of the Corporation's Common Stock on the exercise date
                  of this conversion feature by .000001. The Series L Conversion
                  Price and the conversion price of any other series of
                  Preferred Stock hereafter created are sometimes hereinafter
                  collectively referred to as the "Conversion Price."

         (b)      NOTICE OF CONVERSION. Each Series L Preferred stockholder who
                  desires to convert into the Corporation's Common Stock must
                  provide a 65 day written notice to the Corporation of its
                  intent to convert one or more shares of Series L Preferred
                  into Common Stock. The Corporation may, in its sole
                  discretion, waive the written notice requirement and allow the
                  immediate exercise of the right to convert.

         (c)      MECHANICS OF CONVERSION. No fractional shares of Common Stock
                  shall be issued upon conversion of Series L Preferred. In lieu
                  of any fractional shares to which the holder would otherwise
                  be entitled, the Corporation shall pay an amount in cash equal
                  to such fraction multiplied by the then effective Conversion

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                  Price. Before any holder shall be entitled to convert, he
                  shall surrender the certificate or certificates representing
                  Series L Preferred to be converted, duly endorsed or
                  accompanied by proper instruments of transfer, at the office
                  of the Corporation or of any transfer agent, and shall given
                  written notice to the Corporation at such office that he
                  elects to convert the same. The Corporation shall, as soon as
                  practicable thereafter, issue a certificate or certificates
                  for the number of shares of Common Stock to which the holder
                  shall be entitled. The Corporation shall, as soon as
                  practicable after delivery of such certificates, or such
                  agreement and indemnification in the case of a lost, stolen or
                  destroyed certificate, issue and deliver to such holder of
                  Series L Preferred a certificate or certificates for the
                  number of shares of Common Stock to which such holder is
                  entitled as aforesaid and a check payable to the holder in the
                  amount of any cash amounts payable as the result of a
                  conversion into fractional shares of Common Stock. Such
                  conversion shall be deemed to have been made immediately prior
                  to the close of business on the date of such surrender of the
                  shares of Series L Preferred to be converted.

         (d)      COMMON STOCK RESERVED. The Corporation shall reserve and keep
                  available out of its authorized but unissued Common Stock such
                  number of shares of Common Stock as shall from time to time be
                  sufficient to effect conversion of the Series L Preferred.

         4. LIQUIDATION PREFERENCE.

         (a)      In the event of any liquidation, dissolution or winding up of
                  the Corporation, whether voluntary or involuntary (a
                  "Liquidation"), the assets of the Corporation available for
                  distribution to its stockholders shall be distributed as
                  follows:

                  (1)      The holders of the Series L Preferred shall be
                           entitled to receive, prior to the holders of the
                           other series of Preferred Stock and prior and in
                           preference to any distribution of the assets or
                           surplus funds of the Corporation to the holders of
                           any other shares of stock of the corporation by
                           reason of their ownership of such stock, an amount
                           equal to $10.00 per share with respect to each share
                           of Series L Preferred, plus all declared but unpaid
                           dividends with respect to such share.

                  (2)      If upon occurrence of a Liquidation the assets and
                           funds thus distributed among the holders of the
                           Series L Preferred shall be insufficient to permit
                           the payment to such holders of the full preferential
                           amount, then the entire assets and funds of the
                           Corporation legally available for distribution shall
                           be distributed among the holders of the Series L
                           Preferred ratably in proportion to the full amounts
                           to which they would otherwise be respectively
                           entitled.

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         (b)      For purposes of this Section 4, and unless a majority of the
                  holders of the Series L Preferred affirmatively vote or agree
                  by written consent to the contrary, a Liquidation shall be
                  deemed to include (i) the acquisition of the Corporation by
                  another entity by means of any transaction or series of
                  related transactions (including, without limitation, any
                  reorganization, merger or consolidation) and (ii) a sale of
                  all or substantially all of the assets of the Corporation,
                  unless the Corporation's stockholders of record as constituted
                  immediately prior to such acquisition or sale will,
                  immediately after such acquisition or sale (by virtue of
                  securities issued as consideration for the Corporation's
                  acquisition or sale or otherwise) hold at least fifty percent
                  (50%) of the voting power of the surviving or acquiring
                  entity.

         (c)      If any of the assets of the Corporation are to be distributed
                  other than in cash under this Section 4, then the board of
                  directors of the Corporation shall promptly engage independent
                  competent appraisers to determine the value of the assets to
                  be distributed to the holders of Preferred Stock or Common
                  Stock. The Corporation shall, upon receipt of such appraiser's
                  valuation, give prompt written notice to each holder of shares
                  of Preferred Stock or Common Stock of the appraiser's
                  valuation.

         5. VOTING RIGHTS. Except as otherwise required by law, the holders of
Series L Preferred and the holders of Common Stock shall be entitled to notice
of any stockholders' meeting and to vote as a single class upon any matter
submitted to the stockholders for a vote as follows: (i) the holders of each
series of Preferred Stock shall have one vote for each full share of Common
Stock into which a share of such series would be convertible on the record date
for the vote, or, if no such record date is established, at the date such vote
is taken or any written consent of stockholders is solicited; and (ii) the
holders of Common Stock shall have one vote per share of Common Stock held as of
such date.

         6. COVENANTS.

         (a)      In addition to any other rights provided by law, the
                  Corporation shall not, without first obtaining the affirmative
                  vote or written consent of the holders of a majority of the
                  outstanding shares of Series L Preferred, do any of the
                  following:

                  (1)      take any action which would either alter, change or
                           affect the rights, preferences, privileges or
                           restrictions of the Series L Preferred or increase
                           the number of shares of such series authorized hereby
                           or designate any other series of Preferred Stock;

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         (b)      increase the size of any equity incentive plan(s) or
                  arrangements;

         (c)      make fundamental changes to the business of the Corporation;

         (d)      make any changes to the terms of the Series L Preferred or to
                  the Corporation's Articles of Incorporation or Bylaws,
                  including by designation of any stock;

         (e)      create any new class of shares having preferences over or
                  being on a parity with the Series L Preferred as to dividends
                  or assets, unless the purpose of creation of such class is,
                  and the proceeds to be derived from the sale and issuance
                  thereof are to be used for, the retirement of all Series L
                  Preferred then outstanding;

         (f)      accrue any indebtedness in excess of $5,000,000;

         (g)      make any change in the size or number of authorized directors;

         (h)      repurchase any of the Corporation's Common Stock;

         (i)      sell, convey or otherwise dispose of, or create or incur any
                  mortgage, lien, charge or encumbrance on or security interest
                  in or pledge of, or sell and leaseback, all or substantially
                  all of the property or business of the Corporation or more
                  than 50% of the stock of the Corporation in a single
                  transaction;

         (j)      make any payment of dividends or other distributions or any
                  redemption or repurchase of stock or options or warrants to
                  purchase stock of the Corporation; or

         (k)      file a petition for relief under the United States Bankruptcy
                  Code.

         7. REISSUANCE. No share or shares of Series L Preferred acquired by the
Corporation by reason of conversion or otherwise shall be reissued as Series L
Preferred, and all such shares thereafter shall be returned to the status of
undesignated and unissued shares of Preferred Stock of the Corporation.

         8. DIRECTORS. The holders of Series L Preferred and Common Stock voting
together as a class shall be entitled to elect the directors comprising the
Board of Directors (and to fill any vacancies with respect thereto).

                                       5
<PAGE>

         The undersigned being the President and Secretary of the Company hereby
declares under penalty of perjury that the foregoing is a true and correct copy
of the Certificate of Designation of the Rights and Preferences of the Series L
Convertible Preferred Stock of U.S. West Homes, Inc. duly adopted by the Board
of Directors of the Company on May l, 2003.

Dated: May ___, 2003

                                         By: /s/ Walter Grieves
                                             -------------------------
                                         Name:  Walter Grieves
                                         Title:  President

State of __________________
County of ________________

On ____________________ personally appeared before me, a Notary Public,
________________ and ______________________ who acknowledged that they executed
the above document.

________________________
Notary Public

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