Document:

Exhibit 10.1

        CONVERTIBLE DEBENTURE PURCHASE AGREEMENT (this "Agreement"), dated as
of April 5, 2001, among World Homes, Inc., a Nevada corporation (the
"Company"), and the investors signatory hereto (each such investor is a
"Purchaser" and all such investors are, collectively, the "Purchasers").

        WHEREAS, subject to the terms and conditions set forth in this
Agreement and in accordance with Sec.4(2) under the Securities Act of 1933, as
amended (the "Securities Act"), and Rule 506 promulgated thereunder, the
Company desires to issue and sell to the Purchasers and the Purchasers,
severally and not jointly, desire to purchase from the Company: (i) an
aggregate principal amount of  $1,000,000 of the Company's 6% Convertible
Debentures, due twelve months from issuance, which shall be in the form of
Exhibit A (the "Debentures"), and which are convertible into shares of the
Company's common stock, $.001 par value per share (the "Common Stock"), and
(ii) certain Warrants (as defined herein).

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

        ARTICLE I

        PURCHASE AND SALE

        1.1     The Closing

                (a)     (i)     The Closing.    Subject to the terms and
conditions set forth in this Agreement the Company shall issue and sell to the
Purchasers and the Purchasers shall severally   purchase from the Company the
Debentures and Warrants for an aggregate purchase price of $1,000,000. The
closing of the purchase and sale of the Debentures (the "Closing") shall take
place at the offices of Robinson Silverman Pearce Aronsohn & Berman LLP
("Robinson Silverman"), 1290 Avenue of the Americas, New York, New York 10104,
immediately following the execution hereof or such later date as the parties
shall agree.  The date of the Closing is hereinafter referred to as the
"Closing Date."

                        (ii)    At the Closing, the parties shall deliver or
shall cause to be delivered the following: (A) the Company shall deliver to
each Purchaser: (1) Debentures registered in the name of such Purchaser in the
aggregate principal amount indicated below such Purchaser's name on the
signature page to this Agreement, (2) the legal opinion of James E. Pratt,
Esq., outside counsel to the Company, in the form of Exhibit B, (3) an
executed Registration Rights Agreement, dated the date hereof,  among the
Company and the Purchasers, in the form of Exhibit C (the "Registration Rights
Agreement"), (4) Transfer Agent Instructions, in the form of Exhibit D,
delivered to and acknowledged by the Company's transfer agent (the "Transfer
Agent Instructions"), (5) a Common Stock purchase warrant, in the form of
Exhibit E, registered in the name of such Purchaser, pursuant to which such
Purchaser shall have the right at any time and from time to time thereafter
through the fifth anniversary of the Closing Date to acquire the number of
shares of Common Stock indicated below such Purchaser's name on the signature
page to this Agreement (the "Warrants"), (6) an executed Guaranty and Stock
Pledge Agreement, dated the date hereof,  in the Form of Exhibit F, (the
"Pledge Agreement"); and (B) each Purchaser will deliver to the Company: (1)
the purchase price indicated below such Purchaser's name on the signature page
to this Agreement in United States dollars in immediately available funds by
wire transfer to an account designated in writing by the Company for such
purpose, and (2) executed originals of this Agreement, the Registration Rights
Agreement and the Pledge Agreement.

                1.2     Certain Defined Terms.   For purposes of this
Agreement, "Conversion Price," "Original Issue Date,"  "Trading Day" and "Per
Share Market Value" shall have the meanings set forth in the Debentures;
"Business Day" shall mean 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 in the State of New York or Nevada are authorized or
required by law or other governmental action to close;  A "Person" means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind.

        ARTICLE II

        REPRESENTATIONS AND WARRANTIES

        2.1     Representations and Warranties of the Company.  The Company
hereby makes the following representations and warranties to the Purchasers:

                (a)     Organization and Qualification.  The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada with the requisite corporate power and authority
to own and use its properties and assets and to carry on its business as
currently conducted.  The Company has no subsidiaries other than as set forth
in Schedule 2.1(a) (collectively the "Subsidiaries").  Each of the
Subsidiaries is an entity, duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its
business as currently conducted.  Each of the Company and the Subsidiaries is
duly qualified to do business and is in good standing as a foreign corporation
or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be,
could not, individually or in the aggregate, (x) adversely affect the
legality, validity or enforceability of the Securities (as defined below) or
any of this Agreement, the Registration Rights Agreement, the Transfer Agent
Instructions, the Pledge Agreement or the Warrants (collectively, the
"Transaction Documents"), (y) have or result in a material adverse effect on
the results of operations, assets, prospects, or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole, or (z)
adversely impair the Company's ability to perform fully on a timely basis its
obligations under any of the Transaction Documents (any of (x), (y) or (z), a
"Material Adverse Effect").

                (b)     Authorization; Enforcement.  The Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and otherwise
to carry out its obligations thereunder.  The execution and delivery of each
of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company.  Each of the Transaction Documents has been duly executed by the
Company and, when delivered in accordance with the terms hereof, will
constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms.  Neither the Company nor any
Subsidiary is in violation of any of the provisions of its respective
certificate or articles of incorporation, by-laws or other organizational or
charter documents.

                (c)     Capitalization.  The number of authorized, issued and
outstanding capital stock of the Company is set forth in Schedule 2.1(c).
Except as disclosed in Schedule 2.1(c), the Company owns all of the Capital
Stock of each Subsidiary.  No shares of Common Stock are entitled to
preemptive or similar rights, nor is any holder of the securities of the
Company entitled to preemptive or similar rights arising out of any agreement
or understanding with the Company by virtue of any of the Transaction
Documents.  Except as a result of the purchase and sale of the Debentures and
Warrants and except as disclosed in Schedule 2.1(c), there are no outstanding
options, warrants, script rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock,
or securities or rights convertible or exchangeable into shares of Common
Stock.  The issuance and sale of the Warrants or Underlying Shares (as
hereinafter defined) will not obligate the Company to issue shares of Common
Stock or other securities to any Person other than the Purchaser and will not
result in a right of any holder of Company securities to adjust the exercise
or conversion or reset price under such securities.

                (d)     Issuance of the Debentures and the Warrants.    The
Debentures will be duly and validly issued, free and clear of all liens,
encumbrances and rights of first refusal of any kind (collectively, "Liens").
On the date hereof, the Company will have (and will, at all times while
Debentures are outstanding, maintain) an adequate reserve of duly authorized
shares of Common Stock, reserved for issuance to the holders of such
Debentures and Warrants, to enable it to perform its conversion, exercise and
other obligations under this Agreement.  Such number of  reserved and
available shares of Common Stock shall not be less than the sum of 200% of the
number of shares of Common Stock which would be issuable upon (i) conversion
in full of the Debentures assuming such conversion occurred on the Original
Issue Date, and the Debentures remain outstanding for one year and all
interest is paid in shares of Common Stock and (ii) exercise in full of the
Warrants (the "Initial Minimum").  All such authorized shares of Common Stock
shall be duly reserved for issuance to the holders of the Debentures and
Warrants.  The shares of Common Stock issuable upon conversion of the
Debentures and upon exercise of the Warrants are collectively referred to
herein as the "Underlying Shares."  The Debentures, Warrants and the
Underlying Shares are collectively referred to herein as, the "Securities."
When issued to the Purchasers in accordance with the Debentures and the
Warrants, the Underlying Shares will be duly authorized, validly issued, fully
paid and nonassessable, free and clear of all Liens.

                (e)     No Conflicts.  The execution, delivery and performance
of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated thereby do not and will not (i)
conflict with or violate any provision of the Company's or any Subsidiary's
certificate or articles of incorporation, bylaws or other charter documents
(each as amended through the date hereof), or (ii) subject to obtaining the
Required Approvals (as defined below), conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both)
of, any agreement, credit facility,  debt or other instrument (evidencing a
Company or Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (iii) result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a Subsidiary
is bound or affected; except in the case of each of clauses (ii) and (iii), as
could not, individually or in the aggregate, have or result in a Material
Adverse Effect.  The business of the Company is not being conducted in
violation of any law, ordinance or regulation of any governmental authority,
except for violations which, individually or in the aggregate, could not have
or result in a Material Adverse Effect.

                (f)     Filings, Consents and Approvals.  Neither the Company
nor any Subsidiary is required to obtain any consent, waiver, authorization or
order of, give any notice to, or make any filing or registration with, any
court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than: (i) the filings required
pursuant to Section 3.10, (ii) the filing with the Commission of a
registration statement meeting the requirements set forth in the Registration
Rights Agreement and covering the resale of the Underlying Shares by the
Purchasers (the "Underlying Shares Registration Statement"), (iii) applicable
Blue Sky filings, and (iv) in all other cases where the failure to obtain such
consent, waiver, authorization or order, or to give such notice or make such
filing or registration could not have or result in, individually or in the
aggregate, a Material Adverse Effect (collectively, the "Required Approvals").

                (g)     Litigation; Proceedings.  There is no action, suit,
inquiry, notice of violation, proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
of its Subsidiaries or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) (collectively, an
"Action") which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii)
could, if there were an unfavorable decision, individually or in the
aggregate, have or result in a Material Adverse Effect.  Neither the Company
nor any Subsidiary, nor any director or officer thereof, is or has been the
subject of any Action involving (A) a claim of violation of or liability under
federal or state securities laws or (B) a claim of breach of fiduciary duty;
(iii) the Company does not have pending before the Commission any request for
confidential treatment of information and the Company has no knowledge of any
expected such request that would be made prior to the Effectiveness Date (as
defined in the Registration Rights Agreement); and (iv) there has not been,
and to the best of the Company's knowledge there is not pending or
contemplated, any investigation by the Commission involving the Company or any
current or former director or officer of the Company.

                (h)     No Default or Violation.  Neither the Company nor any
Subsidiary (i) is in default under or in violation of (and no event has
occurred which has not been waived which, with notice or lapse of time or
both, would result in a default by the Company or any Subsidiary under), nor
has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound, (ii) is in violation of any order
of any court, arbitrator or governmental body, or (iii) is in violation of any
statute, rule or regulation of any governmental authority, in each case of
clauses (i), (ii) or (iii) above, except as could not individually or in the
aggregate, have or result in a Material Adverse Effect.

                (i)     Private Offering.  Assuming the accuracy of the
representations and warranties of the Purchasers set forth in Sections
2.2(b)-(g), the offer, issuance and sale of the Securities to the Purchasers
as contemplated hereby are exempt from the registration requirements of the
Securities Act.  Neither the Company nor any Person acting on its behalf has
taken or is, to the knowledge of the Company, contemplating taking any action
which could subject the offering, issuance or sale of the Securities to the
registration requirements of the Securities Act including soliciting any offer
to buy or sell the Securities by means of any form of general solicitation or
advertising.

                (j)     SEC Reports; Financial Statements. The Company has
filed all reports required to be filed by it under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), including, without limitation, all
filings required pursuant to Sections 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the Company was
required by law to file such material) (the foregoing materials being
collectively referred to herein as the "SEC Reports" and, together with the
Schedules to this Agreement, the "Disclosure Materials") on a timely basis or
has received a valid extension of such time of filing and has filed any such
SEC Reports prior to the expiration of any such extension.  As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading.  All material agreements to which the
Company is a party or to which the property or assets of the Company are
subject have been filed as exhibits to the SEC Reports as required under the
Exchange Act.  The financial statements of the Company included in the SEC
Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing.  Such financial statements have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved ("GAAP"), except as
may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of the
Company and its consolidated subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject,
in the case of unaudited statements, to normal, immaterial, year-end audit
adjustments.  Since January 1, 2000, except as specifically disclosed in the
SEC Reports, (a) there has been no event, occurrence or development that has
or that could result in a Material Adverse Effect, (b) the Company has not
incurred any liabilities (contingent or otherwise) other than (x) liabilities
incurred in the ordinary course of business consistent with past practice and
(y) liabilities not required to be reflected in the Company's financial
statements pursuant to GAAP or required to be disclosed in filings made with
the Commission, (c) the Company has not altered its method of accounting or
the identity of its auditors and (d) the Company has not declared or made any
payment or distribution of cash or other property to its stockholders or
officers or directors (other than in compliance with existing Company stock
option plans or employee benefit plans (as defined n Rule 405 of Regulation
C)) with respect to its capital stock, or purchased, redeemed (or made any
agreements to purchase or redeem) any shares of its capital stock.

                (k)     Investment Company.  The Company is not, and is not an
Affiliate (as defined in Rule 405 under the Securities Act) of, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

                (l)     Certain Fees.   Except for certain fees payable to
Union Atlantic Capital, L.C., no fees or commissions will be payable by the
Company to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement.  The Purchasers shall have no
obligation with respect to any fees or with respect to any claims made by or
on behalf of other Persons for fees of a type contemplated in this Section
that may be due in connection with the transactions contemplated by this
Agreement.  The Company shall indemnify and hold harmless the Purchasers,
their employees, officers, directors, agents, and partners, and their
respective Affiliates, from and against all claims, losses, damages, costs
(including the costs of preparation and attorney's fees) and expenses suffered
in respect of any such claimed or existing fees, as such fees and expenses are
incurred.

                (m)     Seniority.  No indebtedness of the Company is senior
to the Debentures in right of payment, whether with respect to interest or
upon liquidation or dissolution, or otherwise.

                (n)     Listing and Maintenance Requirements.  Except as set
forth in the SEC Reports, the Company has not, in the two years preceding the
date hereof, received  notice (written or oral)  from any stock exchange,
market or trading facility on which the Common Stock is or has been listed (or
on which it has been quoted) to the effect that the Company is not in
compliance with the listing or maintenance requirements of such exchange,
market or trading facility.  The Company is, and has no reason to believe that
it will not in the foreseeable future continue to be, in compliance with the
listing and maintenance requirements for continued trading of the Common Stock
on the OTC Bulletin Board.

                (o)     Patents and Trademarks.   The Company and its
Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
licenses and rights which are necessary or material for use in connection with
their respective businesses as described in the SEC Reports  and which the
failure to so have would have a Material Adverse Effect (collectively, the
"Intellectual Property Rights").  Neither the Company nor any Subsidiary has
received a written notice that the Intellectual Property Rights used by the
Company or its Subsidiaries violates or infringes upon the rights of any
Person.  To the best knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights.

                (p)     Registration Rights; Rights of Participation.  Except
as set forth on Schedule 6(b) to the Registration Rights Agreement, the
Company has not granted or agreed to grant to any Person any rights (including
"piggy-back" registration rights) to have any securities of the Company
registered with the Commission or any other governmental authority which has
not been satisfied. Except as set forth on Schedule 6(b) to the Registration
Rights Agreement, no Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents.

                (q)     Regulatory Permits.  The Company and its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the
failure to possess such permits could not, individually or in the aggregate,
have or result in a Material Adverse Effect ("Material Permits"), and neither
the Company nor any such Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Material Permit.

                (r)     Title.  The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them which is
material to the business of the Company and its Subsidiaries and good and
marketable title in all personal property owned by them which is material to
the business of the Company and its Subsidiaries, in each case free and clear
of all Liens, except for Liens as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of
such property by the Company and its Subsidiaries.  Any real property and
facilities held under lease by the Company and its Subsidiaries are held by
them under valid, subsisting and enforceable leases of which the Company and
its Subsidiaries are in compliance and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its
Subsidiaries.

                        (u)     Labor Relations.  No material labor problem
exists or, to the knowledge of the Company, is imminent with respect to any of
the employees of the Company.

                (v)       Disclosure.  The Company confirms that neither it
nor any other Person acting on its behalf has provided any of the  Purchasers
or its agents or counsel with any information that constitutes or might
constitute material non-public information.  The Company understands and
confirms that the Purchasers shall be relying on the foregoing representations
in effecting transactions in securities of the Company. All disclosure
provided to the Purchasers regarding the Company, its business and the
transactions contemplated hereby, including the  Schedules to this Agreement,
furnished by or on behalf of the Company are true and correct and do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.

                (w)     Solvency.  Based on the financial condition of the
Company as of the Closing Date, (i) the Company's fair saleable value of its
assets exceeds the amount that will be required to be paid on or in respect of
the Company's existing debts and other liabilities (including known contingent
liabilities) as they mature; (ii) the Company's assets do not constitute
unreasonably small capital to carry on its business for the current fiscal
year as now conducted and as proposed to be conducted including its capital
needs taking into account the particular capital requirements of the business
conducted by the Company, and projected capital requirements and capital
availability thereof; and (iii) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its
assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its debt when such amounts
are required to be paid.  The Company does not intend to incur debts beyond
its ability to pay such debts as they mature (taking into account the timing
and amounts of cash to be payable on or in respect of its debt).

                (x)       Application of Takeover Protections.  The Company
and its Board of Directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination,
poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company's Certificate of
Incorporation (or similar charter documents) or the laws of its state of
incorporation that is or could become applicable to the Purchasers as a result
of the Purchasers and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents, including without limitation the
Company's issuance of the Securities and the Purchasers' ownership of the
Securities.

        2.2     Representations and Warranties of the Purchasers.  Each
Purchaser hereby for itself and for no other Purchaser represents and warrants
to the Company as follows:

                (a)     Organization; Authority.  Such Purchaser is an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder.  The purchase by such Purchaser of the Securities
hereunder has been duly authorized by all necessary action on the part of such
Purchaser.  Each of this Agreement and the Registration Rights Agreement has
been duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally
binding obligation of such Purchaser, enforceable against it in accordance
with its terms.

                (b)     Investment Intent.  Such Purchaser is acquiring the
Securities as principal for its own account for investment purposes only and
not with a view to or for distributing or reselling such Securities or any
part thereof, without prejudice, however, to such Purchaser's right, subject
to the provisions of this Agreement, the Registration Rights Agreement, and
the Warrants, at all times to sell or otherwise dispose of all or any part of
such Securities pursuant to an effective registration statement under the
Securities Act or under an exemption from such registration and in compliance
with applicable federal and state securities laws. Nothing contained herein
shall be deemed a representation or warranty by such Purchaser to hold
Securities for any period of time. Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.  Such Purchaser does not
have any agreement or understanding, directly or indirectly, with any Person
to distribute the Securities.

                (c)     Purchaser Status.  At the time such Purchaser was
offered the Securities, it was, and at the date hereof it is an "accredited
investor" as defined in Rule 501(a) under the Securities Act.

                (d)     Experience of such Purchaser.  Such Purchaser, either
alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment.

                (e)     Ability of such Purchaser to Bear Risk of Investment.
Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such
investment.

                (f)     Access to Information.  Such Purchaser acknowledges
that it has reviewed the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the offering of the Securities and the merits and risks of
investing in the Securities; (ii) access to information about the Company and
the Company's financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information
which the Company possesses or can acquire without unreasonable effort or
expense that is necessary to make an informed investment decision with respect
to the investment and to verify the accuracy and completeness of the
information contained in the Disclosure Materials.  Neither such inquiries nor
any other investigation conducted by or on behalf of such Purchaser or its
representatives or counsel shall modify, amend or affect such Purchaser's
right to rely on the truth, accuracy and completeness of the Disclosure
Materials and the Company's representations and warranties contained in the
Transaction Documents.

                (g)     General Solicitation.  Such Purchaser is not
purchasing the Securities as a result of or subsequent to any advertisement,
article, notice or other communication regarding the Securities published in
any newspaper, magazine or similar media or broadcast over television or radio
or presented at any seminar or any other general solicitation or general
advertisement.

                (h)     Reliance.  Such Purchaser understands and acknowledges
that (i) the Securities are being offered and sold to it without registration
under the Securities Act in a private placement that is exempt from the
registration provisions of the Securities Act and (ii) the availability of
such exemption, depends in part on, and the Company will rely upon the
accuracy and truthfulness of, the foregoing representations and such Purchaser
hereby consents to such reliance.

                The Company acknowledges and agrees that no Purchaser makes or
has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section
2.2 and Section 4(a)(ii) of the Debentures.

        ARTICLE III

        OTHER AGREEMENTS OF THE PARTIES

        3.1     Transfer Restrictions.  (a) Securities may only be disposed of
pursuant to an effective registration statement under the Securities Act, to
the Company or pursuant to an available exemption from or in a transaction not
subject to the registration requirements of the Securities Act, and in
compliance with any applicable federal and state securities laws.  In
connection with any transfer of Securities other than pursuant to an effective
registration statement or to the Company, except as otherwise set forth
herein, the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to the Company, to
the effect that such transfer does not require registration of such
transferred Securities under the Securities Act.  Any such transferee shall
agree in writing to be bound by the terms of this Agreement and shall have the
rights of a Purchaser under this Agreement and the Registration Rights
Agreement.

                (b)     The Purchasers agree to the imprinting, so long as is
required by this Section 3.1(b), of the following legend on the Securities:

        NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE [CONVERTIBLE] OR [EXERCISABLE] 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 AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

                Underlying Shares shall contain the legend set forth above nor
any other legend if the conversion of Debentures or the exercise of the
Warrants, as the case may be, occurs at any time while an Underlying Shares
Registration Statement is effective under the Securities Act or the holder is
relying on Rule 144 promulgated under the Securities Act ("Rule 144") in
connection with the resale of such Underlying Shares, or in the event there is
not an effective Underlying Shares Registration Statement, and Rule 144 is not
then available for resale of the Underlying Shares, at such time as such
legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the Commission).  The Company shall cause its counsel to issue the legal
opinion included in the Transfer Agent Instructions to the Company's transfer
agent on the date that an Underlying Shares Registration Statement is declared
effective by the Commission (such date, the "Effective Date").  The Company
agrees that following the Effective Date, it will, no later than three (3)
Trading Days following the delivery by a Purchaser to the Company of a
certificate or certificates representing such Underlying Shares issued with a
restrictive legend, deliver to such Purchaser certificates representing such
Shares which shall be free from all restrictive and other legends.  The
Company may not make any notation on its records or give instructions to any
transfer agent of the Company which enlarge the restrictions of transfer set
forth in this Section.

        3.2     Acknowledgment of Dilution.  The Company acknowledges that the
issuance of Underlying Shares upon the conversion of the Debentures or
exercise of the Warrants will result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain market
conditions.  The Company further acknowledges that its obligation to issue
Underlying Shares upon conversion of the Debentures or exercise of the
Warrants is unconditional and absolute, subject to the limitations set forth
in the Debentures and Warrants,  regardless of the effect of any such
dilution.

        3.3     Furnishing of Information.  As long as the Purchasers own
Securities, the Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to Section
13(a) or 15(d) of the Exchange Act.   As long as the Purchasers own
Securities, if the Company is not required to file reports pursuant to such
sections, it will prepare and furnish to the Purchasers and make publicly
available in accordance with Rule 144(c) promulgated under the Securities Act
such information as is required for the Purchasers to sell the Securities
under Rule 144 promulgated under the Securities Act.  The Company further
covenants that it will take such further action as any holder of Securities
may reasonably request, all to the extent required from time to time to enable
such Person to sell Underlying Shares without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144
promulgated under the Securities Act, including causing its attorneys to
render and deliver any legal opinion required in order to permit a Purchaser
to receive Underlying Shares free of all restrictive legends and to
subsequently sell Underlying Shares under Rule 144 upon receipt of a notice of
an intention to sell or other form of notice having a similar effect.  Upon
the request of any such Person, the Company shall deliver to such Person a
written certification of a duly authorized officer as to whether it has
complied with such requirements.

        3.4     Integration.  The Company shall not, and shall use its best
efforts to ensure that, no Affiliate of the Company shall, sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be
integrated with the offer or sale of the Securities in a manner that would
require the registration under the Securities Act of the sale of the
Securities to the Purchasers.

        3.5     Increase in Authorized Shares.   If on any date the Company
would be, if a notice of conversion or exercise (as the case may be) were to
be delivered on such date, precluded from issuing the sum of (i) 200% of the
number of Underlying Shares as would then be issuable upon a conversion in
full of the Debentures and (ii) the number of Underlying Shares issuable upon
exercise in full of the Warrants (the "Current Required Minimum"), in either
case, due to the unavailability of a sufficient number of authorized but
unissued or reserved shares of Common Stock, then the Board of Directors of
the Company shall promptly prepare and mail to the stockholders of the Company
proxy materials requesting authorization to amend the Company's certificate or
articles of incorporation to increase the number of shares of Common Stock
which the Company is authorized to issue to at least such number of shares as
reasonably requested by the Purchasers in order to provide for such number of
authorized and unissued shares of Common Stock to enable the Company to comply
with its issuance, conversion, exercise and reservation of shares obligations
as set forth in this Agreement, the Debentures and the Warrants (the sum of
(x) the number of shares of Common Stock then outstanding plus all shares of
Common Stock issuable upon exercise of all outstanding options, warrants and
convertible instruments other than the Warrants and (y) the Current Required
Minimum, shall be a reasonable number).  In connection therewith, the Board of
Directors shall (a) adopt proper resolutions authorizing such increase, (b)
recommend to and otherwise use its best efforts to promptly and duly obtain
stockholder approval to carry out such resolutions (and hold a special meeting
of the stockholders no later than the earlier to occur of the 60th day after
delivery of the proxy materials relating to such meeting and the 90th day
after request by a holder of Securities to issue the number of Underlying
Shares in accordance with the terms hereof) and (c) within five (5) Business
Days of obtaining such stockholder authorization, file an appropriate
amendment to the Company's certificate or articles of incorporation to
evidence such increase.

        3.6     Reservation and Listing of Underlying Shares.  (a)The Company
shall (i) in the time and manner required by any national securities exchange,
market, trading or quotation facility on which the Common Stock is then
traded, prepare and file with such national securities exchange, market,
trading or quotation facility on which the Common Stock is then traded an
additional shares listing application covering a number of shares of Common
Stock which is not less than the Initial Minimum, (ii) take all steps
necessary to cause  such shares of Common Stock to be approved for listing on
any such national securities exchange, market or trading or quotation facility
on which the Common Stock is then listed as soon as possible thereafter, and
(iii) provide to the Purchasers evidence of such listing, and the Company
shall maintain the listing of its Common Stock thereon.

                (b)     The Company shall maintain a reserve of shares of
Common Stock for issuance upon conversion of the Debentures in full and upon
exercise in full of the Warrants in accordance with this Agreement, in such
amount as may be required to fulfill its obligations in full under the
Transaction Documents, which reserve shall equal no less than the then Current
Required Minimum.

        3.7     Conversion and Exercise Procedures.  The Transfer Agent
Instructions, the Conversion Notice (as defined in the Debentures) and the
Form of Election to Purchase (as defined in the Warrants) sets forth the
totality of the procedures with respect to the conversion of the Debentures or
exercise of the Warrants, including the form of legal opinion, if necessary,
that shall be rendered to the Company's transfer agent and such other
information and instructions as may be reasonably necessary to enable the
Purchasers to convert their Debentures or exercise their Warrants.

        3.8     Conversion and Exercise Obligations of the Company.  The
Company shall honor conversions of the Debentures and exercises of the
Warrants and shall deliver Underlying Shares in accordance with the respective
terms, conditions and time periods set forth in the Debentures and Warrants.

        3.9     Subsequent Financing; Limitation on Registrations.  (a)  Other
than to the Purchasers, prior to the 90th Trading Day after the Effective
Date, the Company shall not offer, sell, grant any option to purchase or
offer, sell or grant any right to reprice its securities, or otherwise dispose
of or issue (or announce any offer, sale, grant or any option to purchase or
other disposition) any Common Stock or any equity or equity equivalent
securities (including any equity,  debt or other instrument that is at any
time over the life thereof convertible into or exchangeable for Common Stock),
and the Company will cause its Subsidiaries not to offer, sell or issue during
such period any of such Subsidiary's securities which provide the holder
thereof the right to receive any Common Stock (collectively, "Common Stock
Equivalents"), unless otherwise agreed to in writing by the Company and the
Purchasers.

                (b)     From the date of this Agreement through the 270th
Trading Day following the Effective Date, the Company shall not, directly or
indirectly, offer, sell, grant any option to purchase, or otherwise dispose of
(or announce any offer, sale, grant or any option to purchase or other
disposition) any Common Stock or Common Stock Equivalents (collectively, a
"Subsequent Placement") unless (A) the Company delivers to each of the
Purchasers a written notice (the "Subsequent Placement Notice") of its
intention to effect such Subsequent Placement, which Subsequent Placement
Notice shall describe in reasonable detail the proposed terms of such
Subsequent Placement, the amount of proceeds intended to be raised thereunder,
the Person with whom such Subsequent Placement shall be effected, and attached
to which shall be a term sheet or similar document relating thereto and (B)
such Purchaser shall not have notified the Company by 6:30 p.m. (New York City
time) on the tenth Trading Day after its receipt of the Subsequent Placement
Notice of its willingness to provide (or to cause its sole designee to
provide), subject to completion of mutually acceptable documentation,
financing to the Company on the same terms set forth in the Subsequent
Placement Notice.  If the Purchasers shall fail to notify the Company of their
intention to enter into such negotiations within such time period, the Company
may effect the Subsequent Placement substantially upon the terms and to the
Persons (or Affiliates of such Persons) set forth in the Subsequent Placement
Notice; provided, that the Company shall provide the Purchasers with a second
Subsequent Placement Notice, and the Purchasers shall again have the right of
first refusal set forth above in this paragraph (a), if the Subsequent
Placement subject to the initial Subsequent Placement Notice shall not have
been consummated for any reason on the terms set forth in such Subsequent
Placement Notice within 30 Trading Days after the date of the initial
Subsequent Placement Notice with the Person (or an Affiliate of such Person)
identified in the Subsequent Placement Notice. If the Purchasers shall
indicate a willingness to provide financing in excess of the amount set forth
in the Subsequent Placement Notice, then each Purchaser shall be entitled to
provide financing pursuant to such Subsequent Placement Notice up to an amount
equal to such Purchaser's pro-rata portion of the aggregate number of Shares
purchased by such Purchaser under this Agreement, but the Company shall not be
required to accept financing from the Purchasers in an amount in excess of the
amount set forth in the Subsequent Placement Notice.  In furtherance of this
restriction, other than to the Purchasers or  Affiliates thereof, prior to the
180th Trading Day following the Effective Date, the Company may not enter into
any equity line or similar financing arrangement or issue or agree to issue
any shares of its Common Stock or any Common Stock Equivalents pursuant to any
equity line or similar type of financing, unless otherwise agreed to in
writing by the Company and the Purchasers.

                (c)     Except to register (x) the Registrable Securities (as
defined in the Registration Rights Agreement), (y) securities of the Company
permitted pursuant to Section 6(c) of the Registration Rights Agreement to be
registered in the Underlying Shares Registration Statement, and (z) Common
Stock permitted to be issued pursuant to Section 3.9(e), the Company may not
until the 180th day after the Effective Date file a registration statement to
register any of its securities.

                (d)     The restrictive periods set forth in Sections 3.9
(a)-(c) shall be extended for the number of days during such periods (A) in
which trading in the Common Stock is suspended by any securities exchange or
market or quotation system on which the Common Stock is then listed, or (B)
following the Effective Date that the Registration Statement is not effective,
or (C) following the Effective Date,  that the prospectus included in the
Registration Statement may not be used by the holders thereof for the resale
of Registrable Securities. (e)     The restrictions contained in Section 3.9
(a)-(c) shall not apply to (i)the granting of options or warrants to
employees, officers and directors of the Company, and the issuance of Common
Stock upon exercise of such options or warrants granted under any stock option
plan or employee benefit  plan (as defined in Rule 405 of Regulation C)
heretofore or hereinafter duly adopted by the Company and (ii) shares of
Common Stock issuable upon exercise of any currently outstanding warrants and
other outstanding convertible securities of the Company, in each case as and
to the extent disclosed in Schedule 2.1(c) (but not as to any amendments or
modifications of the terms of such securities after the date of this
Agreement, including "back-dated" agreements).

        3.10    Certain Securities Laws Disclosures; Publicity.  The Company
shall: (i) on the Closing Date, issue a press release reasonably acceptable to
the Purchasers disclosing the transactions contemplated hereby, (ii) file with
the Commission a Report on Form 8-K disclosing the transactions contemplated
hereby within ten Business Days after the Closing Date, and (iii) timely file
with the Commission a Form D promulgated under the Securities Act.  The
Company shall, no less than two Business Days prior to the filing of any
disclosure required by clauses (ii) and (iii) above, provide a copy thereof
to the Purchasers for their review.  The Company and the Purchasers shall
consult with each other in issuing any other press releases or otherwise
making public statements or filings and other communications  with the
Commission or any regulatory agency or stock market or trading facility with
respect to the transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public statement, filings or
other communications without the prior written consent of the other, except
that if such disclosure is required by law or stock market regulation, in
which such case the disclosing party shall promptly provide the other party
with prior notice of such public statement, filing or other communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the
names of the Purchasers, or include the names of the Purchasers in any filing
with the Commission, or any regulatory agency, trading facility or stock
market without the prior written consent of the Purchasers, except to the
extent such disclosure (but not any disclosure as to the controlling Persons
thereof) is required by law or stock market regulations, in which case the
Company shall provide the Purchasers with prior notice of such disclosure.

        3.11    Transfer of Intellectual Property Rights.  Except in
connection with the sale of all or substantially all of the assets of the
Company or licensing arrangements in the ordinary course of the Company's
business, the Company shall not transfer, sell or otherwise dispose of any
Intellectual Property Rights, or allow any of the Intellectual Property Rights
to become subject to any Liens, or fail to renew such Intellectual Property
Rights (if renewable and it would otherwise lapse if not renewed), without the
prior written consent of the Purchasers.

        3.12    Use of Proceeds.  The Company shall use the net proceeds from
the sale of the Securities hereunder for working capital purposes and not for
the satisfaction of any portion of the Company's debt (other than payment of
trade payables in the ordinary course of the Company's business and prior
practices), to redeem any Company equity or equity-equivalent securities or to
settle any outstanding litigation.

        3.13    Reimbursement.  If any Purchaser becomes involved in any
capacity in any action, proceeding or investigation brought by or against any
Person, including stockholders of the Company, solely as a result of acquiring
the Securities under this Agreement and the Warrants, the Company will
reimburse such Purchaser for its reasonable legal and other expenses
(including the cost of any investigation, preparation and travel in connection
therewith incurred in connection therewith, as such expenses are incurred.
The reimbursement obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any Affiliates of the Purchasers who are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of the Purchasers and any such Affiliate, and shall be binding upon and
inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Purchasers and any such Affiliate and any
such Person.  The Company also agrees that neither the Purchasers nor any such
Affiliates, partners, directors, agents, employees or controlling persons
shall have any liability to the Company or any Person asserting claims on
behalf of or in right of the Company solely as a result of acquiring the
Securities under this Agreement and the Warrants.

        3.14    Non-Disclosure of Non-Public Information.  The Company shall
not disclose non-public information to the Purchasers or their advisors or
representatives unless prior to disclosure of such information the Company
identifies such information as being non-public information and the Purchasers
enter into a non-disclosure agreement in form mutually acceptable to the
Company and the Purchasers.

        3.15    Shareholder Rights Plan.  No claim will be made or enforced by
the Company or any other Person that any Purchaser is an "Acquiring Person"
under any shareholders rights plan or similar plan or arrangement in effect or
hereafter adopted by the Company, or that any Purchaser could be deemed to
trigger the provisions of any such plan or arrangement, by virtue of receiving
Securities or shares of Common Stock under the Transaction Documents.

        ARTICLE IV

        MISCELLANEOUS

                4.1     Fees and Expenses.  At the Closing, the Company shall
reimburse the Purchasers for their legal fees and expenses incurred in
connection with the preparation and negotiation of the  Transaction Documents
by paying to Robinson Silverman $0,000 for the preparation and negotiation of
the Transaction Documents.  The amount contemplated by the immediately
preceding sentence shall be retained by the Purchasers and shall not be
delivered to the Company at the Closing. Other than the amount contemplated
herein, and except as otherwise specified in the Registration Rights
Agreement, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.  The Company shall pay all stamp
and other taxes and duties levied in connection with the issuance of the
Securities.

                4.2     Entire Agreement; Amendments.  The Transaction
Documents, together with the Exhibits and Schedules thereto and Transfer Agent
Instructions, contain the entire understanding of the parties with respect to
the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits and
schedules.

                4.3     Notices.  Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (i) the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior to
5:30 p.m. (New York City time) on a Business Day, (ii) the Business Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Agreement later
than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m.
(New York City time) on such date, (iii) the Business Day following the date
of mailing, if sent by U.S. nationally recognized overnight courier service,
or (iv) upon actual receipt by the party to whom such notice is required to be
given.  The address for such notices and communications shall be as follows:

        If to the Company:              World Homes, Inc.
        4505 W. Hacienda Ave, Unit I-1
        Las Vegas, Nevada 89118
                                        Facsimile No.: (702) 579- 4833
                                        Attn: Merle Ferguson

        With copies to:         James E. Pratt, Esq.
                                        195 Kildare Road
                                        Garden City, New York  11530
                                        Facsimile No.: (516) 873-1140

        If to a Purchaser:              To the address set forth under such
Purchaser's name on the signature pages hereto or such other address as may be
designated in writing hereafter, in the same manner, by such Person.

                4.4     Amendments; Waivers.  No provision of this Agreement
may be waived or amended except in a written instrument signed, in the case of
an amendment, by both the Company and each of the Purchasers or, in the case
of a waiver, by the party against whom enforcement of any such waiver is
sought.  No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such right accruing to it
thereafter.

                4.5     Headings.  The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.

                4.6     Successors and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Purchasers.
The Purchasers may not assign this Agreement or any of the rights or
obligations hereunder without the consent of the Company; however, this
provision shall not limit any Purchaser's right to transfer Securities
acquired hereunder or transfer or assign rights under the Registration Rights
Agreement.

                4.7     No Third-Party Beneficiaries.  This Agreement is
intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person.

                4.8     Governing Law.  All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law
thereof.  Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of the any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is
improper.  Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.  Each party irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If either party shall commence an action or proceeding to
enforce any provisions of this Agreement, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its' attorneys
fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.

                4.9     Survival.  The representations, warranties, agreements
and covenants contained herein shall survive the Closing and the delivery and
conversion of the Debentures and exercise of the Warrants.

                4.10    Execution.  This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart.  In the event that any
signature is delivered by facsimile transmission, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature page were an original thereof.

                4.11    Severability.  In case any one or more of the
provisions of this Agreement shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining terms and provisions of this
Agreement shall not in any way be affected or impaired thereby and the parties
will attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

                4.12    Remedies.  In addition to being entitled to exercise
all rights provided herein or granted by law, including recovery of damages,
each of the Purchasers will be entitled to specific performance of the
obligations of the Company under the Transaction Documents.  The parties
hereto agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of its obligations described in the
foregoing sentence and hereby agrees to waive in any action for specific
performance of any such obligation the defense that a remedy at law would be
adequate.

                4.13    Independent Nature of Purchasers' Obligations and
Rights.  The obligations of each Purchaser under any Transaction Document is
several and not joint with the obligations of any other Purchaser and no
Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under any Transaction Document.  Nothing
contained herein or in any Transaction Document, and no action taken by any
Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by the
Transaction Document.  Each Purchaser shall be entitled to independently
protect and enforce its rights, including without limitation the rights
arising out of this Agreement or out of the other Transaction Documents, and
it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.

        [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGES FOLLOWS]

                IN WITNESS WHEREOF, the parties hereto have caused this
Convertible Debenture Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated above.

                                WORLD HOMES, INC.

                                By:_____________________________________
                                Name:    John Nicoliasen
                                Title:   President

        [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
        SIGNATURE PAGE FOR PURCHASER FOLLOWS]

                                LENORE AVENUE LLC

                                By:_____________________________________
                                   Name:
                                   Title:

Purchase Price for Debentures:           $1,000,000

Address for Notice:

                      Lenore Avenue LLC
                      c/o Citco Trustees (Cayman) Limited
                      Commercial Centre
                      P.O. Box 31106 SMB
                      Grand Cayman
                      Cayman Islands
                      British West Indies
                      Facsimile No.: (345) 945-7568

    With copies to:   Robinson Silverman Pearce Aronsohn & Berman LLP
                      1290 Avenue of the Americas
                      New York, NY  10104
                      Facsimile No.:  (212) 541-4630 and (212) 541-1432
                      Attn: Eric L. Cohen, Esq.Exhibit 10.2

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, AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.

        $1,000,000
Date of Issuance: April 5, 2001

WORLD HOMES, INC.
6% CONVERTIBLE DEBENTURE
DUE APRIL 5, 2002

        THIS DEBENTURE is one of a series of duly authorized and issued
debentures of World Homes, Inc., a Nevada corporation, having a principal
place of business at 4505 W. Hacienda Ave, Unit I-1, Las Vegas, Nevada 89118
(the "Company"), designated as its 6% Convertible Debentures, due April 5,
2002, in the aggregate principal amount of One Million Dollars ($1,000,000)
(the "Debentures").

        FOR VALUE RECEIVED, the Company promises to pay to Lenore Avenue LLC
or its registered assigns (the "Holder"), the principal sum of $1,000,000 on
April 5, 2002 or such earlier date as the Debentures are required or permitted
to be repaid as provided hereunder (the "Maturity Date") and to pay interest
to the Holder on the aggregate unconverted and then outstanding principal
amount of this Debenture at the rate of 6% per annum, payable on each
Conversion Date (as defined herein) and on the Maturity Date in cash or shares
of Common Stock (as defined in Section 6).  Subject to the terms and
conditions herein, the decision whether to pay interest hereunder in shares of
Common Stock or cash shall be at the discretion of the Company.  Not less than
ten Trading Days  (as defined in Section 6) prior to each Conversion Date or
the Maturity Date, the Company shall provide the Holder with written notice of
its election to pay interest hereunder in cash or in shares of Common Stock
pursuant to the terms of Section4(a)(iii) (the Company may indicate in such
notice that the election contained in such notice shall continue for later
periods until revised). Failure to timely provide such written notice shall be
deemed an election by the Company to pay the interest on such Conversion Date
or Maturity Date in shares of Common Stock pursuant to the terms of Section
4(a)(iii).  Interest shall be calculated on the basis on a 360-day year and
shall accrue daily commencing on the Original Issue Date (as defined in
Section 6) until payment in full of the principal sum, together with all
accrued and unpaid interest and other amounts which may become due hereunder,
has been made.  Interest hereunder will be paid to the Person (as defined in
Section 6) in whose name this Debenture is registered on the records of the
Company regarding registration and transfers of Debentures (the "Debenture
Register").  All overdue accrued and unpaid interest to be paid hereunder
shall entail a late fee at the rate of 18% per annum (or such lower maximum
amount of interest permitted to be charged under applicable law) ("Late Fee")
which will accrue daily, from the date such interest is due hereunder through
and including the date of payment.

        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.        This Debenture has been issued subject to certain
investment representations of the original Holder set forth in the Purchase
Agreement (as defined in Section 6) and may be transferred or exchanged only
in compliance with the Purchase Agreement.  Prior to due presentment to the
Company for transfer of this Debenture, the Company and any agent of the
Company may treat the Person (as defined in Section 6) in whose name this
Debenture is duly registered on the Debenture Register as the owner hereof for
the purpose of receiving payment as herein provided and for all other
purposes, whether or not this Debenture is overdue, and neither the Company
nor any such agent shall be affected by notice to the contrary.

        Section 3.        Events of Default.

                (a)     "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 (including any Late Fees) on or liquidated damages in respect of, any
Debentures, free of any claim of subordination, as and when the same shall
become due and payable (whether on a Conversion Date or the Maturity Date or
by acceleration or otherwise);

                (ii)    the Company shall fail to observe or perform any other
covenant, agreement or warranty contained in, or otherwise commit any breach
of any of the  Transaction Documents (as defined in Section 6), and such
failure or breach shall not have been remedied within five days after the date
on which notice of such failure or breach shall have been given;

                (iii)    the Company or any of its subsidiaries shall
commence, or there shall be commenced against the Company or any such
subsidiary a case under any applicable bankruptcy or insolvency laws as now or
hereafter in effect or any successor thereto, or the Company commences any
other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of
any jurisdiction whether now or hereafter in effect relating to the Company or
any subsidiary thereof or there is commenced against the Company or any
subsidiary thereof any such bankruptcy, insolvency or other proceeding which
remains undismissed for a period of 60 days; or the Company or any subsidiary
thereof is adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or the Company or any
subsidiary thereof suffers any appointment of any custodian or the like for it
or any substantial part of its property which continues undischarged or
unstayed for a period of 60 days; or the Company or any subsidiary thereof
makes a general assignment for the benefit of creditors; or the Company 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 Company or any subsidiary
thereof shall call a meeting of its creditors with a view to arranging a
composition, adjustment or restructuring of its debts; or the Company or any
subsidiary thereof 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 Company or any subsidiary thereof
for the purpose of effecting any of the foregoing;

                (iv)    the Company shall default in any of its obligations
under any other Debenture 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 Company 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 not be eligible for quotation
on or quoted for trading on the OTC Bulletin Board ("OTC') or listed for
trading on the Nasdaq SmallCap Market, New York Stock Exchange, American Stock
Exchange or the Nasdaq National Market (each, a "Subsequent Market") and shall
not again be eligible for and quoted or listed for trading thereon within five
Trading Days;

                (vi)    the Company shall be a party to any Change of Control
Transaction (as defined in Section 6), shall agree to sell or dispose all or
in excess of 33% of its assets in one or more transactions (whether or not
such sale would constitute a Change of Control Transaction), or shall redeem
or repurchase more than a de minimis number of shares of Common Stock or other
equity securities of the Company (other than redemptions of Underlying Shares
(as defined in Section 6));

                (vii)   an Underlying Shares Registration Statement (as
defined in Section6) shall not have been declared effective by the Commission
(as defined in Section 6) on or prior to the 120th day after the Original
Issue Date;

                (viii)  if, during the Effectiveness Period (as defined in the
Registration Rights Agreement (as defined in Section 6)), the effectiveness of
the Underlying Shares Registration Statement lapses for any reason or the
Holder shall not be permitted to resell Registrable Securities (as defined in
the Registration Rights Agreement) under the Underlying Shares Registration
Statement, in either case, for more than ten consecutive Trading Days;

                (ix)    an Event (as defined in the Registration Rights
Agreement) shall not have been cured to the satisfaction of the Holder prior
to the expiration of thirty days from the Event Date (as defined in the
Registration Rights Agreement) relating thereto (other than an Event resulting
from a failure of an Underlying Shares Registration Statement to be declared
effective by the Commission on or prior to the 120th day after the Original
Issue Date, which shall be covered by Section 3(a)(vii));

                (x)     the Company shall fail for any reason to deliver
certificates to a Holder prior to the fifth Trading Day after a Conversion
Date pursuant to and in accordance with Section 4(b) or the Company 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 any
Debentures in accordance with the terms hereof; or

                (xi)    the Company shall fail for any reason to deliver the
payment in cash pursuant to a Buy-In (as defined herein) within five days
after notice thereof is delivered hereunder.

                (b)     If any Event of Default occurs and is continuing, the
full principal amount of this Debenture (and, at the Holder's option, all
other Debentures then held by such Holder), 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.   The aggregate
amount payable upon an Event of Default shall be equal to the sum of: (i) the
Mandatory Prepayment Amount (as defined in Section 6) plus (ii) the product of
(A) the number of Underlying Shares issued in respect of conversions hereunder
within thirty days of the date of a declaration of an Event of Default and
then held by the Holder and (B) the Closing Price (as defined in Section 6) on
the date prepayment is due or the date the full prepayment price is paid,
whichever is greater.  Interest shall accrue on the prepayment amount
hereunder from the seventh day after such amount is due (being the date of an
Event of Default) through the date of prepayment in full thereof in an amount
equal to the Late Fee , to accrue daily from the date such payment is due
hereunder through and including the date of payment.  All Debentures and
Underlying Shares for which the full prepayment price hereunder shall have
been paid in accordance herewith shall promptly be surrendered to or as
directed by the Company.  The Holder need not provide and the Company 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 and the Holder shall have all
rights as a Debenture holder until such time, if any, as the full payment
under this Section shall have been received by it.    No such rescission or
annulment shall affect any subsequent Event of Default or impair any right
consequent thereon.

        Section 4.        Conversion.

                (a)     (i) Commencing on the 31st day after the Closing Date,
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 (subject
to the limitations on conversion set forth in Section4(a)(ii) hereof).  The
Holder shall effect conversions by delivering to the Company the form of
conversion notice attached hereto as Exhibit A (a "Conversion Notice"),
specifying therein the principal amount of Debentures to be converted and the
date on which such conversion is to be effected (a "Conversion Date") and
shall contain a completed schedule in the form of Schedule 1 to the Conversion
Notice (as amended on each Conversion Date, the "Conversion Schedule")
reflecting the remaining principal amount of this Debenture and all accrued
and unpaid interest thereon subsequent to the conversion at issue.  If no
Conversion Date is specified in a Conversion Notice, the Conversion Date shall
be the date that such Conversion Notice is provided hereunder.  To effect
conversions hereunder, the Holder shall not be required to physically
surrender Debentures to the Company unless the entire principal amount of this
Debenture has been so converted. 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, which shall be evidenced by entries set forth in the Conversion
Schedule.  The Holder and the Company 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.  The Holder and any assignee,
by acceptance of this Debenture, acknowledge and agree that, by reason of the
provisions of this paragraph, following conversion of a portion of this
Debenture, the unpaid and unconverted principal amount of this Debenture may
be less than the amount stated on the face hereof.

                (ii)    Certain Conversion Restrictions.  A Holder may not
convert Debentures 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 its affiliates, beneficially owning
(as determined in accordance with Section 13(d) of the Exchange Act and the
rules promulgated thereunder) in excess of 9.999% of the then issued and
outstanding shares of Common Stock, including shares issuable upon conversion
of, and payment of interest on, the Debentures held by such Holder after
application of this Section.  To ensure compliance with this restriction, the
Holder will be deemed to represent to the Company each time it delivers a
Conversion Notice that such Conversion Notice has not violated the
restrictions set forth in this paragraph.   If the Holder has delivered a
Conversion Notice for a principal amount of Debentures 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
Company 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 4(b) 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.  In the event of a
merger or consolidation of the Company with or into another Person, this
paragraph shall not apply with respect to a determination of the number of
shares of common stock issuable upon conversion in full of the Debentures if
such determination is necessary to establish the Securities or other assets
which the holder of Common Stock shall be entitled to receive upon the
effectiveness of such merger or consolidation.

                (iii)   Underlying Shares Issuable Upon Conversion and
Pursuant to Interest. (A)  The number of shares of Common Stock  issuable upon
a conversion hereunder shall be determined by adding the sum of: (i) the
quotient obtained by dividing (x) the outstanding principal amount of this
Debenture to be converted and (y) the Conversion Price, and (ii) the amount
equal to (I) the product of (x) the outstanding principal amount of this
Debenture to be converted and (y) the product of (1) the quotient obtained by
dividing .06 by 360 and (2) the number of days for which such principal amount
was outstanding, divided by (II) the Conversion Price on the Conversion Date,
provided, that if the Company shall have elected to pay the interest due on a
Conversion Date in cash pursuant to the terms hereof, subsection (ii) shall
not be used in the calculation of the number of shares of Common Stock
issuable upon a conversion hereunder.

                        (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 interest hereunder in shares of Common Stock;

                (2)     such shares of Common Stock:  (x) are not registered
for resale pursuant to an effective Underlying Shares Registration Statement
and (y) may not be sold without volume restrictions pursuant to Rule 144(k)
promulgated under the Securities Act;

                (3)     the Common Stock shall fail to be listed or quoted for
trading on the OTC or a Subsequent Market;

                (4)     the Company has failed to timely satisfy its
conversion obligations hereunder; or

                (5)     the issuance of such shares of Common Stock would
result in a violation of Sections 4(a)(ii),

                        then, at the option of the Holder, the Company, in
lieu of delivering shares of Common Stock pursuant to Section 4(a)(iii)(A)
(ii), shall deliver, within three Trading Days of each applicable Conversion
Date, an amount in cash equal to the product of: (a) the outstanding principal
amount of the Debentures to be converted on such Conversion Date and (b) the
product of (x) the quotient obtained by dividing .06 by 360 and (y) the number
of days for which such principal amount was outstanding.

                (b)     (i)     Not later than three Trading Days after any
Conversion Date, the Company will deliver to the Holder (i) a certificate or
certificates which shall be free of restrictive legends and trading
restrictions (other than those required by the Purchase Agreement)
representing the number of shares of Common Stock being acquired upon the
conversion of Debentures and (ii) a bank check in the amount of accrued and
unpaid interest (if the Company has timely elected or is required to pay
accrued interest in cash). The Company shall, upon request of the Holder, if
available, use its best efforts to deliver any certificate or certificates
required to be delivered by the Company under this Section electronically
through the Depository Trust Corporation or another established clearing
corporation performing similar functions.  If in the case of any Conversion
Notice such certificate or certificates are not delivered to or as directed by
the applicable Holder by the third Trading Day after a Conversion Date, the
Holder shall be entitled by written notice to the Company at any time on or
before its receipt of such certificate or certificates thereafter, to rescind
such conversion, in which event the Company shall immediately return the
certificates representing the principal amount of Debentures tendered for
conversion.

                        (ii)     If the Company  fails for any reason to
deliver to the Holder such certificate or certificates pursuant to Section
4(b)(i) by the third Trading Day after the Conversion Date, the Company shall
pay to such Holder, in cash, as liquidated damages and not as a penalty,
$5,000 for each Trading Day after such third Trading Day until such
certificates are delivered.  Nothing herein shall limit a Holder's right to
pursue actual damages or declare an Event of Default pursuant to Section 3
herein for the Company'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.  The exercise of any such rights shall not prohibit
the Holders from seeking to enforce damages pursuant to any other Section
hereof or under applicable law.

                        (iii)   In addition to any other rights available to
the Holder, if the Company  fails for any reason to deliver to the Holder such
certificate or certificates pursuant to Section 4(b)(i) by the third Trading
Day after the Conversion Date, and if after such third 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
Company 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 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 Debentures in 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 Company
timely complied with its delivery requirements under Section 4(b)(i).  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 Company shall be required to pay the
Holder $1,000.  The Holder shall provide the Company written notice indicating
the amounts payable to the Holder in respect of the Buy-In.  Notwithstanding
anything contained herein to the contrary, if a Holder requires the Company to
make payment in respect of a Buy-In for the failure to timely deliver
certificates hereunder and the Company timely pays in full such payment, the
Company shall not be required to pay such Holder liquidated damages under
Section 4(b)(ii) in respect of the certificates resulting in such Buy-In.

                (c)     (i)     The conversion price (the "Conversion Price")
in effect on any Conversion Date shall be the lesser of (1) $1.5375 (the
"Initial Conversion Price"), and (2) 77.5% of the average of the lowest three
Per Share Market Values (which need not occur on consecutive Trading Days)
during the twenty Trading Days immediately preceding the applicable Conversion
Date (which may include Trading Days prior to the date on which the Holder is
first entitled to tender a Conversion Notice), provided, that such twenty
Trading Day period shall be extended for the number of Trading Days during
such period in which: (A) trading in the Common Stock is suspended by, or not
traded on, the OTC or a Subsequent Market on which the Common Stock is then
listed, or (B) after the date declared effective by the Commission, the
Underlying Shares Registration Statement is either not effective or  the
Prospectus included in the Underlying Shares Registration Statement may not be
used by the Holder for the resale of Underlying Shares.

                        (ii)    If the Company, at any time while the
Debentures are outstanding: (a) shall 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 Company, then
the Initial 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 Company, at any time while Debentures
are outstanding, shall issue rights, options or warrants to all holders of
Common Stock (and not to Holders) entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the Per Share Market
Value at the record date mentioned below, 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 such Per Share Market
Value.  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 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 Company or any subsidiary thereof, as
applicable, at any time while Debentures are outstanding, shall offer, sell,
grant any option to purchase or offer, sell or grant any right to reprice its
securities, or otherwise dispose of or issue (or announce any offer, sale,
grant or any option to purchase or other disposition) any Common Stock or any
equity or equity equivalent securities (including any equity,  debt or other
instrument that is at any time over the life thereof convertible into or
exchangeable for Common Stock) (collectively, "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 for such conversions as Holders shall indicate in its Conversion
Notices to equal 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 Company shall notify the Holder in writing,
no later than the 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 adjustments under this paragraph
shall be made as a result of (i)the granting of options or warrants to
employees, officers and directors of the Company, and the issuance of Common
Stock upon exercise of such options or warrants granted under any stock option
plan or employee benefit  plan (as defined in Rule 405 of Regulation C)
heretofore or hereinafter duly adopted by the Company and (ii) shares of
Common Stock issuable upon exercise of any currently outstanding warrants and
other outstanding convertible securities of the Company, in each case as and
to the extent disclosed in Schedule 2.1(c) to the Purchase Agreement (but not
as to any amendments or modifications of the terms of such securities after
the date of this Agreement, including "back-dated" agreements).

                        (v)      If the Company, at any time while Debentures
are outstanding, shall distribute to all holders of Common Stock (and not to
Holders) 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 Debentures 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 Per Share
Market Value determined as of the record date mentioned above, and of which
the numerator shall be such Per Share Market Value 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
Holders 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.

                        (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 Holders shall have the
right thereafter to, at their 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 only 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 Holders of the Debentures shall be entitled upon such
event to receive such amount of securities, cash or property as the shares of
the Common Stock of the Company 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 Company to prepay the aggregate of its outstanding
principal amount of Debentures, plus all interest and other amounts due and
payable thereon, at a price determined in accordance with Section 3(b).  The
entire prepayment price shall be paid in cash.  This provision shall similarly
apply to successive reclassifications or share exchanges.

                        (vii)   All calculations under this Section 4 shall be
made to the nearest cent or the nearest 1/100th of a share, as the case may
be.  No adjustments in either the Conversion Price or the Initial Conversion
Price shall be required if such adjustment is less than $0.01; provided,
however, that any adjustments which by reason of this Section are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment.

                        (viii)  Whenever either the Initial Conversion Price
or the Conversion Price is adjusted pursuant to any of Section 4(c)(ii) - (v),
the Company shall promptly mail to each Holder a notice setting forth the
Initial Conversion Price or Conversion Price (as applicable) after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.

                        (ix)    If (A) the Company shall declare a dividend
(or any other distribution) on the Common Stock; (B) the Company shall declare
a special nonrecurring cash dividend on or a redemption of the Common Stock;
(C) the Company 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 Company shall be required in connection with any reclassification of the
Common Stock, any consolidation or merger to which the Company is a party, any
sale or transfer of all or substantially all of the assets of the Company, of
any compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be filed at each
office or agency maintained for the purpose of conversion of the Debentures,
and shall cause to be mailed to the Holders at their last addresses as they
shall appear upon the stock books of the Company, at least 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, 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.  Holders are entitled to convert Debentures
during the 20-day period commencing the date of such notice to the effective
date of the event triggering such notice.

                        (x)     In case of any (1) merger or consolidation of
the Company with or into another Person, or (2) sale by the Company of more
than one-half of the assets of the Company in one or a series of related
transactions, a Holder shall have the right to (A) exercise any rights under
Section 3(b), (B) convert its aggregate principal amount of Debentures 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 Debentures 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
convertible debentures with a principal amount equal to the aggregate
principal amount of Debentures then held by such Holder, plus all accrued and
unpaid interest and other amounts owing thereon, which newly issued
convertible debentures 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 a Holder of Debentures set forth herein and the
agreements pursuant to which the 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 Holders 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 Company 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 the Debentures and
payment of interest on the Debentures, each as herein provided, free from
preemptive rights or any other actual contingent purchase rights of persons
other than the Holders, not less than such number of shares of the Common
Stock as shall (subject to any additional requirements of the Company as to
reservation of such shares set forth in the Purchase Agreement) be issuable
(taking into account the adjustments and restrictions of Section 4(b)) upon
the conversion of the outstanding principal amount of the Debentures and
payment of interest hereunder.  The Company 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.

                (e)     Upon a conversion hereunder the Company 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 Price at such time.  If
the Company 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 the Debentures shall be made without charge to the
Holders 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
Company 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 Debentures so
converted and the Company 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 Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.

                (g)     Any and all notices or other communications or
deliveries to be provided by the Holders hereunder, including, without
limitation, any Conversion Notice, shall be in writing and delivered
personally, by facsimile, sent by a nationally recognized overnight courier
service or sent by certified or registered mail, postage prepaid, addressed to
the Company, at 4505 W. Hacienda Avenue, Unit     I-1, Las Vegas, Nevada
89118, Facsimile No.: (702) 579-4833, Attn: John Nicoliasen, or such other
address or facsimile number as the Company may specify for such purposes by
notice to the Holders delivered in accordance with this Section.  Any and all
notices or other communications or deliveries to be provided by the Company
hereunder shall be in writing and delivered personally, by facsimile, sent by
a nationally recognized overnight courier service or sent by certified or
registered mail, postage prepaid, addressed to each Holder at the facsimile
telephone number or address of such Holder appearing on the books of the
Company, or if no such facsimile telephone number or address appears, at the
principal place of business of the Holder.  Any notice or other communication
or deliveries hereunder shall be deemed given and effective on the earliest of
(i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior to
5:30 p.m. (New York City time), (ii) the date after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 5:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such
date, (iii) four days after deposit in the United States mail, (iv) the
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (v) upon actual receipt by the party to whom
such notice is required to be given.

        Section 5.        Optional Prepayment. (a)    The Company shall have
the right, exercisable at any time and from time to time after the Original
Issue Date and upon seven Trading Days' prior written notice to the affected
Holders (an "Optional Prepayment Notice"), to prepay all or any portion of the
outstanding principal amount of the Debentures for which Conversion Notices
have not previously been delivered or for which an Event of Default shall not
have been declared.  The prepayment price applicable to prepayments under this
Section 5(a) shall equal the Optional Prepayment Amount and shall be paid in
cash on the seventh Trading Day following the date that the Company first
delivered the Optional Prepayment Notice (the "Optional Prepayment Date").
Any such prepayment shall be free of any claim of subordination.  The Holders
shall have the right to tender, and the Company shall honor, Conversion
Notices delivered prior to the expiration of the fifth Trading Day after
delivery of an Optional Prepayment Notice for such Debentures.

                (b)     If any portion of the Optional Prepayment Amount shall
not be paid by the Company by the expiration of the Optional Prepayment Date,
the Company may not again exercise any right of prepayment under this Section.
In addition, the Optional Prepayment Amount shall be increased by an amount
equal to the Late Fee, to accrue daily from the date such interest is due
hereunder through and including the date of payment (which amount shall be
paid as liquidated damages and not as a penalty).  In addition, if any portion
of the Optional Prepayment Amount remains unpaid through the expiration of the
Optional Prepayment Date, the Holder subject to such prepayment may elect by
written notice to the Company to either (x) demand conversion in accordance
with the formula and the time period therefor set forth in Section 4 of any
portion of the principal amount of Debentures for which the Optional
Prepayment Amount, plus accrued liquidated damages and accrued interest
thereon, has not been paid in full (the "Unpaid Prepayment Principal Amount"),
in which event the applicable Per Share Market Value shall be the lower of the
Per Share Market Value calculated on the Optional Prepayment Date and the Per
Share Market Value as of the Holder's written demand for conversion, or (y)
invalidate ab initio such optional prepayment, notwithstanding anything herein
contained to the contrary.  If the Holder elects option (x)above, the Company
shall, within three Trading Days after such election is deemed delivered
hereunder, deliver to the Holder the shares of Common Stock issuable upon
conversion of the Unpaid Prepayment Principal Amount subject to such
conversion demand and otherwise  perform its obligations hereunder with
respect thereto.

        Section 6.        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 in the State of New York or the State of Nevada are
authorized or required by law or other government action to close.

                "Change of Control Transaction"  means the occurrence of any
of (i) 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 Company, by contract or otherwise) of in excess of 33% of
the voting securities of the Company, (ii) a replacement at one time or over
time of more than one-half of the members of the Company's board of directors
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), (iii) the merger of the
Company with or into another entity that is not wholly-owned by the Company,
consolidation or sale of 50% or more of the assets of the Company in one or a
series of related transactions, or (iv) the execution by the Company of an
agreement to which the Company  is a party or by which it is bound, providing
for any of the events set forth above in (i), (ii) or (iii).

        "Closing Price" means on any particular date (a)the closing sales
price per share of Common Stock on such date on the Subsequent Market on which
the shares of Common Stock are then listed or quoted (as reported by Bloomberg
L.P. at 4:15 PM (New York time) for the closing sales price for regular
session trading on such day), or if there is no such price on such date, then
the closing sales price on the Subsequent Market on the date nearest preceding
such date (as reported by Bloomberg L.P. at 4:15 PM (New York time) for the
closing sales price for regular session trading on such day), or (b)if the
shares of Common Stock are not then listed or quoted on a Subsequent Market,
the closing sales price for a share of Common Stock in the OTC, as reported by
the National Quotation Bureau Incorporated or similar organization or agency
succeeding to its functions of reporting prices) at the close of business on
such date, or (c)if the shares of Common Stock are not then reported by the
National Quotation Bureau Incorporated (or similar organization or agency
succeeding to its functions of reporting prices), then the average of the
"Pink Sheet" quotes for the relevant conversion period, as determined in good
faith by the Holder, or (d)if the shares of Common Stock are not then publicly
traded the fair market value of a share of Common Stock as determined by an
Appraiser selected in good faith by the Holders of a majority in interest of
the principal amount of Debentures then outstanding.

                "Commission" means the Securities and Exchange Commission.

                "Common Stock" means the common stock, $.001 par value per
share, of the Company and stock of any other class into which such shares may
hereafter have been reclassified or changed.

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

                "Mandatory Prepayment Amount" for any Debentures shall equal
the sum of (i) the greater of: (A) 130% of the principal amount of Debentures
to be prepaid, plus all accrued and unpaid interest thereon, plus all other
accrued and unpaid amounts due hereunder, and (B) the principal amount of
Debentures to be prepaid, plus all accrued and unpaid interest thereon, plus
all other accrued and unpaid amounts due hereunder, divided by the Conversion
Price on (x) the date the Mandatory Prepayment Amount is demanded or otherwise
due or (y) the date the Mandatory Prepayment Amount is paid in full, whichever
is less, multiplied by the Per Share Market Value on (x) the date the
Mandatory Prepayment Amount is demanded or otherwise due or (y) the date the
Mandatory Prepayment Amount is paid in full, whichever is greater, and (ii)
all other amounts, costs, expenses and liquidated damages due in respect of
such Debentures.

                "Optional Prepayment Amount" for any Debentures shall equal
the sum of (i) the greater of (A) 100% of the principal amount of Debentures
to be prepaid, plus all accrued and unpaid interest thereon, and (B) the
principal amount of Debentures to be prepaid, plus all accrued and unpaid
interest thereon, divided by the Conversion Price on (x) the date the Optional
Prepayment Amount is due or (y) the date the Optional Prepayment Amount is
paid in full, whichever is less, multiplied by the Per Share Market Value on
(x) the date the Optional Prepayment Amount is due or (y) the date the
Optional Prepayment Amount is paid in full, whichever is greater, and (ii) all
other amounts, costs, expenses and liquidated damages due in respect of such
Debentures.

                "Original Issue Date" shall mean the date of the first
issuance of the Debentures regardless of the number of transfers of any
Debenture and regardless of the number of instruments which may be issued to
evidence such Debenture.

                "Per Share Market Value" means on any particular date (a)the
closing bid price per share of Common Stock on such date on the Subsequent
Market on which the shares of Common Stock are then listed or quoted (as
reported by Bloomberg L.P. at 4:15 PM (New York time) for the closing sales
price for regular session trading on such day), or if there is no such price
on such date, then the closing bid price on the Subsequent Market on the date
nearest preceding such date (as reported by Bloomberg L.P. at 4:15 PM (New
York time) for the closing sales price for regular session trading on such
day), or (b)if the shares of Common Stock are not then listed or quoted on  a
Subsequent Market, the closing bid price for a share of Common Stock in the
OTC, as reported by the National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of reporting prices) at the
close of business on such date, or (c)if the shares of Common Stock are not
then reported by the National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of reporting prices), then
the average of the "Pink Sheet" quotes for the relevant conversion period, as
determined in good faith by the Holder, or (d)if the shares of Common Stock
are not then publicly traded the fair market value of a share of Common Stock
as determined by an Appraiser selected in good faith by the Holders of a
majority in interest of the principal amount of Debentures then outstanding.

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

                "Purchase Agreement" means the Convertible Debenture Purchase
Agreement, dated as of the Original Issue Date, to which the Company and the
original Holder are parties, as amended, modified or supplemented from time to
time in accordance with its terms.

                "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Original Issue Date,  to which the Company and the
original Holder are parties, as amended, modified or supplemented from time to
time in accordance with its terms.

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

                "Trading Day" means (a)a day on which the shares of Common
Stock are traded on the OTC or on such Subsequent Market on which the shares
of Common Stock are then listed or quoted, or (b)if the shares of Common Stock
are not listed on a Subsequent Market, a day on which the shares of Common
Stock are traded in the over-the-counter market, as reported by the OTC, or
(c)if the shares of Common Stock are not quoted on the OTC, a day on which the
shares of Common Stock are quoted in the over-the-counter market as reported
by the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding its functions of reporting prices); provided, that in the
event that the shares of Common Stock are not listed or quoted as set forth in
(a), (b) and (c) hereof, then Trading Day shall mean any day except a Business
Day.

                "Transaction Documents" shall have the meaning set forth in
the Purchase Agreement.

                "Underlying Shares" means the shares of Common Stock issuable
upon conversion of Debentures 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 7.        Except as expressly provided herein, no provision of
this Debenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, interest and liquidated
damages (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 Company.  This Debenture ranks pari passu with all other Debentures now or
hereafter issued under the terms set forth herein.  As long as there are
Debentures outstanding, the Company shall not and shall cause it subsidiaries
not to, without the consent of the Holders, (i) amend its certificate of
incorporation, bylaws or other charter documents so as to adversely affect any
rights of the Holders; (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.   The Company may only voluntarily prepay the outstanding
principal amount on the Debentures in accordance with Section 5 hereof.

        Section 8.        This Debenture shall not entitle the Holder to any
of the rights of a stockholder of the Company, 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 Company, unless and to the extent converted into shares of Common Stock
in accordance with the terms hereof.

        Section 9.        If this Debenture shall be mutilated, lost, stolen
or destroyed, the Company shall execute and deliver, in exchange and
substitution for and upon cancellation of a 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 Company.

        Section 10.  No indebtedness of the Company is senior to this
Debenture in right of payment, whether with respect to interest, damages or
upon liquidation or dissolution or otherwise. The Company will not and will
not permit any of its 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 therefrom that is senior in
any respect to the Company's obligations under the Debentures.

        Section 11.  This Debenture shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
conflicts of laws thereof.  The Company and the Holder hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, Borough of Manhattan, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, or that such
suit, action or proceeding is improper.  Each of the Company and the Holder
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by receiving a copy
thereof sent to the Company at the address in effect for notices to it under
this instrument and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law.  Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. Each party
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby.  If either party
shall commence an action or proceeding to enforce any provisions of a
Transaction Document, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its' attorneys fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.

        Section 12.  Any waiver by the Company or 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 Company or 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 13.  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 Company 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 Company from paying
all or any portion of the principal of or interest on the Debentures 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 Company (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 14.  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.

        [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
        SIGNATURE PAGE FOLLOWS]

                IN WITNESS WHEREOF, the Company has caused this Convertible
Debenture to be duly executed by a duly authorized officer as of the date
first above indicated.

                                        WORLD HOMES, INC.

                                By:_____________________________________
Name: John Nicoliasen
Title:   President

        EXHIBIT A

        NOTICE OF CONVERSION

The undersigned hereby elects to convert principal and, if specified, interest
under the 6%  Convertible Debenture of World Homes, Inc., (the "Company") due
twelve months from issuance into shares of common stock, $.001 par value per
share (the "Common Stock"), of the Company according to the conditions hereof,
as of the date written below.  If shares are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates and
opinions as reasonably requested by the Company in accordance therewith.  No
fee will be charged to the holder for any conversion, except for such transfer
taxes, if any.

Conversion calculations:

                                        Date to Effect Conversion

Principal Amount of Debentures tobeConverted

Payment of Interest in Kind       * Yes         * No
If yes, $ _______ of Interest Accrued on Account of Conversion at Issue

Number of shares of Common Stock tobeIssued

                                        Applicable Conversion Price

                                        Signature

                                        Name

                                        Address

        Schedule 1

        CONVERSION SCHEDULE

World Homes, Inc.

6% Convertible Debentures due twelve months from issuance, in the aggregate
principal amount of $1,000,000 issued by World Homes, Inc.  This Conversion
Schedule reflects conversions made under Section 4(a)(i) of the above
referenced Debentures.

        Dated:

--------------    -----------------    -----------------    -----------------
Date of              Amount of           Aggregate             Company
Conversion           Conversion          Principal             Attest
(or for first                            Amount
entry, Original                          Remaining
Issue Date)                              Subsequent to
                                         Conversion
                                         (or original
                                         Principal
                                         Amount)
--------------    -----------------    -----------------    -----------------

--------------    -----------------    -----------------    -----------------

--------------    -----------------    -----------------    -----------------

--------------    -----------------    -----------------    -----------------

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