DEBENTURE

THE SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH
THE  UNITED  STATES  SECURITIES  AND  EXCHANGE   COMMISSION  OR  THE  SECURITIES
COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM  REGISTRATION  PROVIDED BY
SECTION  3(b) OF THE  SECURITIES  ACT OF 1933,  AS  AMENDED,  AND THE  RULES AND
REGULATIONS  PROMULGATED THEREUNDER (THE "1933 ACT"), AND RULE 504 OF REGULATION
D PROMULGATED THEREUNDER.

A-001(a)                                                             US $300,000
                                  MAGICINC.COM

  5% SERIES A SENIOR SUBORDINATED CONVERTIBLE REDEEMABLE DEBENTURE DUE OCTOBER
                                     20,2001

         THIS  DEBENTURE of  MagicInc.Com,  a  corporation  duly  organized  and
existing under the laws of Delaware  ("Company"),  designated as its 5% Series A
Senior Subordinated  Convertible  Redeemable Debentures Due October 20, 2001, in
an aggregate  principal face amount not exceeding Three Hundred Thousand Hundred
Dollars (U.S.  $300,000),  which Debentures are being,  purchased at 100% of the
face amount of such Debentures.

         FOR VALUE  RECEIVED,  the  Company  promises  to pay to HLKT  Holdings,
L.L.C. the registered holder hereof and his authorized  successors and permitted
assigns ("Holder"), the aggregate principal face sum not to exceed Three Hundred
Thousand Dollars (U.S.  $300,000) on October 20, 2001 ("Maturity  Date"), and to
pay  interest  on the  principal  sum  outstanding,  at the rate of 5% per annum
commencing  November 20, 1999 and due in full at the Maturity  Date  pursuant to
paragraph  4(b) herein.  Accrual of  outstanding  principal sum has been made or
duly  provided  for. The interest so payable will be paid to the person in whose
name this  Debenture  is  registered  on the  records of the  Company  regarding
registration and transfers of the Debentures ("Debenture  Register");  provided,
however,  that the Company's obligation to a transferee of this Debenture arises
only if such transfer,  sale or other disposition is made in accordance with the
terms  and  conditions  of the  Securities  Subscription  Agreement  dated as of
October 20, 1999 between the Company and HLKT  Holdings,  L.L.C.  ("Subscription
Agreement").  The principal  of, and interest on, this  Debenture are payable at
the  address  last  appearing  on  the  Debenture  Register  of the  Company  as
designated in writing by the Holder  hereof from time to time.  The Company will
pay the outstanding  principal due upon this Debenture before or on the Maturity
Date, less any amounts required by law to be deducted or withheld, to the Holder
of this  Debenture by check if paid more than 10 days prior to the Maturity Date
or by wire transfer and  addressed to such Holder at the last address  appearing
on the Debenture  Register.  The forwarding of such check or wire transfer shall
constitute a payment of  outstanding  principal  hereunder and shall satisfy and
discharge the liability for principal on this Debenture to the extent of the sum
represented by such check or wire transfer.  Interest shall be payable in Common
Stock (as defined below) pursuant to paragraph 4(b) herein.

         This Debenture is subject to the following additional provisions:

     1. The Debentures  are issuable in  denominations  of Ten Thousand  Dollars
(US$10,000) and integral multiples thereof.  The Debentures are exchangeable for
an equal  aggregate  principal  amount of  debentures  of  different  authorized
denominations,  as requested by the Holders  surrendering the same, but not less
than U.S.  $10,000.  No service  charge  will be made for such  registration  or
transfer or exchange, except that Holder shall pay any tax or other governmental
charges payable in connection therewith.

     2. The Company  shall be entitled to withhold from all payments any amounts
required to be withheld under the applicable laws.

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     3. This Debenture may be  transferred or exchanged only in compliance  with
the Securities Act of 1933, as amended ("Act") and applicable  state  securities
laws.  Prior to due presentment for transfer of this Debenture,  the Company and
any agent of the  Company may treat the person in whose name this  Debenture  is
duly registered on the Company's  Debenture Register as the owner hereof for all
other  purposes,  whether or not this  Debenture  be  overdue,  and  neither the
Company nor any such agent shall be affected or bound by notice to the contrary.
Any Holder of this  Debenture,  electing to exercise the right of conversion set
forth in Section  4(a)  hereof,  in  addition to the  requirements  set forth in
Section  4(a),  and any  prospective  transferee  of this  Debenture,  are  also
required to give the Company  written  confirmation  that the Debenture is being
converted ("Notice of Conversion") in the form annexed hereto as Exhibit 1.

     4. (a) The Holder of this Debenture is entitled, at its option, at any time
immediately  following execution of this Agreement and delivery of the Debenture
hereof,  to convert all or any amount over $10,000 of the principal  face amount
of this Debenture then outstanding into shares of Common Stock, $0.001 par value
per share, of the Company freely tradeable and without restrictive legend of any
kind ("Common Stock"), at a conversion price ("Conversion Price") for each share
of Common  Stock  equal to 75% of the  average  closing  bid price of the Common
Stock of the Common Stock as reported on the National  Association of Securities
Dealers  Electronic  Bulletin  Board ("OTC  Bulletin  Board ") for the three (3)
trading  days  immediately  preceding  the date of receipt  by the  Company of a
Notice  of  Conversion   ("Conversion  Shares").  If  the  number  of  resultant
Conversion  Shares would as a matter of law or pursuant to regulatory  authority
require the Company to seek shareholder  approval of such issuance,  the Company
shall, as soon as  practicable,  take the necessary steps to seek such approval.
Such conversion shall be effectuated,  as provided in a certain Escrow Agreement
executed  simultaneously  with this  Debenture,  by the Company  delivering  the
Conversion Shares to the Holder within 5 business days of receipt by the Company
of the  Notice of  Conversion.  Once the  Holder has  received  such  Conversion
Shares,  the Escrow Agent shall  surrender the Debentures to be converted to the
Company,  executed  by the Holder of this  Debenture  evidencing  such  Holder's
intention  to  convert  this  Debenture  or  a  specified  portion  hereof,  and
accompanied by proper  assignment  hereof in blank.  Accrued but unpaid interest
shall be subject  to  conversion.  No  fractional  shares or scrip  representing
fractions  of  shares  will be issued on  conversion,  but the  number of shares
issuable shall be rounded to the nearest whole share.

     (b)  Interest at the rate of 8% per annum  shall be paid by issuing  Common
Stock of the Company as follows:  Based on the average  closing bid price of the
Common  Stock as  reported on the OTC  Bulletin  Board for the three (3) trading
days immediately preceding the date of the monthly interest payment due ("Market
Price"),  the  Company  shall issue to the Holder  shares of Common  Stock in an
amount equal to the total monthly interest accrued and due divided by 75% of the
Market Price ("Interest Shares"). The dollar amount of interest payable pursuant
to this  paragraph  4(b)  shall be  calculated  based  upon the total  amount of
payments  actually  made by the Holder in  connection  with the  purchase of the
Debentures  at the time any interest  payment is due. If such payment is made by
check,  interest  shall  accrue  beginning  10 days  from the date the  check is
received by the Company.  If such payment is made by wire transfer directly into
the  Company's  account,  interest  shall accrue  beginning on the date the wire
transfer is received by the Company.  Common Stock issued  pursuant hereto shall
be issued  pursuant to Rule 504 of Regulation D in accordance  with the terms of
the Subscription Agreement and shall be freely tradeable and without restrictive
legend of any kind.

     (c) At any time after 90 days the  Company  shall have the option to pay to
the Holder 125% of the principal amount of the Debenture, in full, to the extent
conversion  has not  occurred  pursuant to paragraph  4(a)  herein,  or pay upon
maturity if the Debenture is not converted.  The Company shall give the Holder 5
days written  notice and the Holder  during such 5 days shall have the option to
convert the  Debenture  or any part  thereof  into shares of Common Stock at the
Conversion Price set forth in paragraph 4(a) of this Debenture.

     5. No provision of this  Debenture  shall alter or impair the obligation of
the  Company,  which  is  absolute  and  unconditional,  to pay the  outstanding
principal of, and interest on, this Debenture at the time,  place, and rate, and
in the form, herein prescribed.

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     6. The Company hereby  expressly waives demand and presentment for payment,
notice of non- payment,  protest, notice of protest, notice of dishonor,  notice
of acceleration  or intent to accelerate,  and diligence in taking any action to
collect amounts called for hereunder and shall be directly and primarily  liable
for the payment of all sums owing and to be owing hereto.

     7. The Company agrees to pay all costs and expenses,  including  reasonable
attorneys'  fees,  which may be incurred by the Holder in collecting  any amount
due under this Debenture.

     8. If one or more of the  following  described  "Events of  Default"  shall
occur and continue for 30 days, unless a different time frame is noted below:

          (a)  The Company shall default in the payment of principal or interest
               on this Debenture; or

          (b)  Any of the  representations  or  warranties  made by the  Company
               herein, in the Subscription  Agreement,  or in any certificate or
               financial or other  written  statements  heretofore  or hereafter
               furnished by or on behalf of the Company in  connection  with the
               execution  and  delivery of this  Debenture  or the  Subscription
               Agreement shall be false or misleading in any material respect at
               the time made or the Company  shall  violate any covenants in the
               Subscription  Agreement including but not limited to Section 5(b)
               or 10; or

          (c)  The  Company  shall fail to perform or observe,  in any  material
               respect,  any  other  covenant,   term,   provision,   condition,
               agreement or obligation of the Company under this Debenture,  the
               Subscription  Agreement or the Escrow  Agreement and such failure
               shall  continue  uncured  for a period of  thirty  0) days  after
               notice from the Holder of such failure; or

          (d)  The Company shall (1) become insolvent;  (2) admit in writing its
               inability to pay its debts generally as they mature;  (3) make an
               assignment  for the benefit of creditors or commence  proceedings
               for its dissolution;  (4) apply for or consent to the appointment
               of a trustee, liquidator or receiver for its or for a substantial
               part  of its  property  or  business;  (5)  file a  petition  for
               bankruptcy relief, consent to the filing of such petition or have
               filed against it an involuntary  petition for bankruptcy  relief,
               all under federal or state laws as applicable; or

          (e)  A trustee,  liquidator  or receiver  shall be  appointed  for the
               Company or for a  substantial  part of its  property  or business
               without  its consent and shall not be  discharged  within  thirty
               (30) days after such appointment; or

          (f)  Any governmental agency or any court of competent jurisdiction at
               the instance of any  governmental  agency shall assume custody or
               control of the whole or any substantial portion of the properties
               or assets of the Company; or

          (g)  Any money  judgment,  writ or warrant of  attachment,  or similar
               process,  in excess of One Hundred Thousand ($100,000) Dollars in
               the  aggregate  shall be entered or filed  against the Company or
               any of its  properties  or other assets and shall remain  unpaid,
               unvacated, unbonded or unstayed for a period of fifteen (15) days
               or in any event later than five (5) days prior to the date of any
               proposed sale thereunder; or

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          (h)  Bankruptcy,    reorganization,    insolvency    or    liquidation
               proceedings, or other proceedings for relief under any bankruptcy
               law or any law for the  relief  of  debtors  shall be  instituted
               voluntarily by or involuntarily against the Company; or

          (i)  The  Company  shall  have  its  Common  Stock  delisted  from the
               over-the-counter  market or other market or exchange on which the
               Common Stock is or becomes  listed or trading in the Common Stock
               shall be suspended for more than 10 consecutive days; or

          (j)  The  Company  shall not  deliver  to the Buyer the  Common  Stock
               pursuant to paragraph 4 herein without  restrictive legend within
               5 business days.

Then, or at anytime  thereafter,  unless cured, and in each and every such case,
unless  such  Event of Default  shall have been  waived in writing by the Holder
(which waiver shall not be deemed to be a waiver of any  subsequent  default) at
the option of the Holder and in the  Holder's  sole  discretion,  the Holder may
consider  this  Debenture  immediately  due and  payable,  without  presentment,
demand,  protest  or  (further)  notice  of  any  kind  (other  than  notice  of
acceleration),  all of which are hereby expressly waived,  anything herein or in
any note or other instruments contained to the contrary notwithstanding, and the
Holder may immediately,  and without expiration of any period of grace,  enforce
any and all of the  Holder's  rights and remedies  provided  herein or any other
rights or remedies afforded by law.

     9. This  Debenture  represents  a  prioritized  obligation  of the Company.
However,  no recourse  shall be had for the payment of the  principal of, or the
interest  on, this  Debenture,  or for any claim based  hereon,  or otherwise in
respect hereof, against any incorporator,  shareholder,  officer or director, as
such,  past,  present or future,  of the Company or any  successor  corporation,
whether  by  virtue  of any  constitution,  statute  or rule  of law,  or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance  hereof and as part of the consideration for the issue hereof,
expressly waived and released.

     10. In case any provision of this Debenture is held by a court of competent
jurisdiction  to be excessive in scope or  otherwise  invalid or  unenforceable,
such provision shall be adjusted rather than voided, if possible,  so that it is
enforceable to the maximum extent possible,  and the validity and enforceability
of the remaining provisions of this Debenture will not in any way be affected or
impaired thereby.

     11.  This  Debenture  and the  agreements  referred  to in  this  Debenture
constitute the full and entire  understanding  and agreement between the Company
and the Holder with respect to the subject  hereof.  Neither this  Debenture nor
any term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the Company and the Holder.

     12. This  Debenture  shall be governed by and construed in accordance  with
the laws of Colorado  applicable  to  contracts  made and wholly to be performed
within  the State of  Colorado  and shall be  binding  upon the  successors  and
assigns of each party hereto.  The Holder and the Company hereby  mutually waive
trial by jury and consent to exclusive  jurisdiction  and venue in the courts of
the State of  Colorado.  At either  party's  election,  any dispute  between the
parties may be  arbitrated  rather  than  litigated  in the  courts,  before the
American  Arbitration  Association  in Denver and  pursuant  to its rules.  Upon
demand made by either party,  each party agrees to submit to and  participate in
such  arbitration.  This  Agreement  may be  executed in  counterparts,  and the
facsimile  transmission  of an executed  counterpart to this Agreement  shall be
effective as an original.

     IN WITNESS  WHEREOF,  the  Company has caused  this  instrument  to be duty
executed by an officer thereunto duly authorized.

Dated:   October 20, 1999
                                               MAGICINC.COM

                                               By: /s/ Gordon Scott Venters
                                                   --------------------------
                                               Gordon Scott Venters
                                               Title: President

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