EXHIBIT 4.2

ANNEX I
TO
SECURITIES PURCHASE AGREEMENT
<PROTOTYPE FOR EACH ISSUANCE>




        FORM OF DEBENTURE

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON  CONVERSION  HEREOF
HAVE BEEN REGISTERED WITH THE UNITED STATES  SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES  COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.  THE SECURITIES ARE RESTRICTED AND MAY NOT BE  OFFERED, RESOLD,
PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED  UNDER THE ACT PURSUANT TO
REGISTRATION OR EXEMPTION OR SAFE  HARBOR THEREFROM.

NNo.    00E-                                    US $

Holder Class:





AMERICAN CHAMPION ENTERTAINMENT, INC.

7% CONVERTIBLE DEBENTURE DUE DECEMBER 31, 2002

THIS DEBENTURE is one of a duly authorized issue of up to $1,250,000  in
Debentures of AMERICAN CHAMPION ENTERTAINMENT, INC., a corporation  organized
and existing under the laws of the State of Delaware (the  "Company")
designated as its 7% Convertible Debentures.  Such Debentures  may be issued in
series, each of which may have a different maturity date,  but which otherwise
have substantially similar terms.


FOR VALUE RECEIVED, the Company promises to pay to
                     , the registered holder hereof (the "Holder"), the
principal sum of                                   and 00/100  Dollars (US
$                             ) on December 31, 2002 (the "Maturity Date")
and to pay interest on the principal sum outstanding from time to time in
arrears (i) semi-annually, on the last day of June and December of each  year
prior to the Maturity Date, (ii) upon conversion as provided herein  or (iii)
on the Maturity Date, at the rate of 7% per annum accruing from  the date of
initial issuance of this Debenture. Accrual of interest shall  commence on the
first such business day to occur after the date hereof and  shall continue to
accrue on a daily basis until payment in full of the  principal sum has been
made or duly provided for.  Subject to the  provisions of Section 4 below (the
terms of which shall govern as if this  sentence were not included in this
Debenture), prior to the Maturity Date,  interest on this Debenture is payable,
at the option of the Company, in  shares of Common Stock of the Company, $.0001
par value ("Common Stock")  at the Conversion Rate (as defined below) in effect
on the date of  payment, or in such coin or currency of the United States of
America as at  the time of payment is legal tender for payment of public and
private  debts, at the address last appearing on the Debenture Register of the
Company as designated in writing by the Holder from time to time.

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 Holder  surrendering the same.  No service
charge will be made for such  registration or transfer or exchange.

2.      The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax  laws
or other applicable laws at the time of such payments, and Holder  shall
execute and deliver all required documentation in connection  therewith.

3.      This Debenture has been issued subject to investment  representations
of the original purchaser hereof and may be transferred or  exchanged only in
compliance with the Securities Act of 1933, as amended  (the "Act"), and other
applicable state and foreign securities laws and  the terms of the Securities
Purchase Agreement (defined below).  In the  event of any proposed transfer of
this Debenture, the Company may require,  prior to issuance of a new Debenture
in the name of such other person,  that it receive reasonable transfer
documentation including legal opinions  that the issuance of the Debenture in
such other name does not and will  not cause a violation of the Act or any
applicable state or foreign  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 the purpose of receiving payment as
herein  provided and for all other purposes, whether or not this Debenture be
overdue, and neither the Company nor any such agent shall be affected by
notice to the contrary.


4.      A.      The Holder of this Debenture is entitled, at its option,
subject to the following provisions of this Section 4, to convert this
Debenture at any time into shares of Common Stock of the Company at a
conversion price for each share of Common Stock ("Conversion Rate") equal  to
the lower of (i) eighty-two and one-half percent (82.5%) of the Market  Price
(as defined below) on the Conversion Date (as defined below) or (ii)  one
hundred percent (100%) of the Market Price on the Closing Date (as  defined in
the Securities Purchase Agreement).    B.      Conversion shall be effectuated
by faxing a Notice of  Conversion (as defined below) to the Company and the
Company's transfer  agent, Continental Stock Transfer & Trust Company, 2
Broadway, New York,  NY 10004, telephone (212) 509-4000, facsimile (212)
509-5150, executed by  the Holder of this Debenture evidencing such Holder's
intention to convert  this Debenture or a specified portion hereof in the form
annexed hereto as  Exhibit A. Interest accrued or accruing from the date of
issuance to the  date of conversion or to the date contemplated by clause (i)
of the second  paragraph of this Debenture shall, at the option of the Holder,
be paid in  cash or Common Stock at the Conversion Rate then applicable as of
the  Conversion Date or the periodic interest payment date, as the case may be.
 No fractional shares of Common Stock 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.  The date on which notice of  conversion
is given (the "Conversion Date") shall be deemed to be the date  on which the
Holder faxes or otherwise delivers the conversion notice  ("Notice of
Conversion") to the Company so that it is received by the  Company on or before
such specified date, provided that, if such  conversion would convert the
entire remaining principal of this Debenture,  the Holder shall deliver to the
Company the original Debentures being  converted no later than five (5)
business days thereafter.  Facsimile  delivery of the Notice of Conversion
shall be accepted by the Company at  facsimile number (408) 288-8098; Attn:
Anthony K. Chan, President.  Certificates representing Common Stock upon
conversion will be delivered  to the Holder at the address specified in the
Notice of Conversion (which  may be the Buyer's address for notices as
contemplated by Section 11of the  Securities Purchase Agreement or a different
address),  via express  courier, by electronic transfer or otherwise, within
five (5) business  days if the address for delivery is in the United States and
within seven  (7) business days if the address for delivery is outside the
United States  (such fifth business day or seventh business day, as the case
may be, the  "Delivery Date") after (i) the date on which the Notice of
Conversion is  delivered to the Company as contemplated in this paragraph B or
(ii) the  date an interest payment on this Debenture, which the Company has
elected  to pay by the issuance of Common Stock, as contemplated herein, was
due.

C.      For purposes of this Debenture, the term "Market Price"  means the
average closing bid price of the Common Stock for the lowest   three (3)
trading days (which need not be consecutive) during the ten (10)  trading days
ending on the trading day immediately before the date  indicated in the
relevant provision hereof (unless a different relevant  period is specified in
the relevant provision), as reported by Bloomberg,  LP or, if not so reported,
as reported on the over-the-counter market.


D.      Any principal amount of this Debenture not previously  converted or
redeemed as of the Maturity Date, shall be deemed to be  automatically
converted, without further action of any kind (including,  but not necessarily
limited to, the giving of a Notice of Conversion) by  the Holder, as of the
Maturity Date at the Conversion Rate applicable on  the Maturity Date
("Mandatory Conversion").

E.      Notwithstanding any other provision hereof, of the  Warrants or of any
of the other Transaction Agreements (as those terms are  defined in the
Securities Purchase Agreement), in no event (except (i)  with respect to an
automatic conversion, if any, of a Debenture as  provided in the Debentures,
(ii) as specifically provided in this  Debenture as an exception to this
provision, or (iii) while there is  outstanding a tender offer for any or all
of the shares of the Company's  Common Stock) shall the Holder be entitled to
convert any Debenture, or  shall the Company have the obligation to convert all
or any portion of  this Debenture (and the Company shall not have the right to
pay interest  on this Debenture),  to the extent that, after such conversion,
the sum of  (1) the number of shares of Common Stock beneficially owned by the
Holder  and its affiliates (other than shares of Common Stock which may be
deemed  beneficially owned through the ownership of the unconverted portion of
the  Debentures or unexercised portion of the Warrants),  and (2) the number of
shares of Common Stock issuable upon the conversion of the Debentures with
respect to which the determination of this proviso is being made, would  result
in beneficial ownership by the Holder and its affiliates of more  than 9.99% of
the outstanding shares of Common Stock (after taking into  account the shares
to be issued to the Holder upon such conversion).  For  purposes of the proviso
to the immediately preceding sentence, beneficial  ownership shall be
determined in accordance with Section 13(d) of the  Securities Exchange Act of
1934, as amended (the "1934 Act"), except as  otherwise provided in clause (1)
of such sentence.  The Holder, by its  acceptance of this Debenture, further
agrees that if the Holder transfers  or assigns any of the Debentures to a
party who or which would not be  considered such an affiliate, such assignment
shall be made subject to the  transferee's or assignee's specific agreement to
be bound by the  provisions of this Section 4(E) as if such transferee or
assignee were the  original Holder hereof.  Nothing herein shall preclude the
Holder from  disposing of a sufficient number of other shares of Common Stock
beneficially owned by the Holder so as to thereafter permit the continued
conversion of this Debenture.

5.      A.      In the event the trading price of the Common Stock is  below
fifty cents ($0.50) for fifteen (15) consecutive trading days (the  fifteenth
trading day, the "Special Redemption Right Effective Date"),  then, beginning
on the following trading day and continuing for as long as  such trading price
remains below such level, the Company will have the  right to redeem all or any
part of this Debenture in cash for the Special  Redemption Price (as defined
below) in accordance with the terms of this  Section 5.

B.      The term "Special Redemption Price" means the sum of (i)  the
outstanding principal of the Debenture multiplied by the Applicable  Percentage
(as defined below) and (ii) the accrued interest through the  Special
Redemption Payment Date (as defined below).


C.      The term "Applicable Percentage" means, if the Special  Redemption
Payment Date is (i) within thirty (30) days of the Special  Redemption Right
Effective Date, one hundred five percent (105%); (ii)  more than thirty (30)
and within sixty (60) days after the Special  Redemption Right Effective Date,
one hundred ten percent (110%); (iii)  more than sixty (60) and within ninety
(90) days after the Special  Redemption Right Effective Date, one hundred
fifteen percent (115%); and  (iv) after ninety (90) days after the Special
Redemption Right Effective  Date, one hundred twenty percent (120%).

D.      The Company shall give at least ten (10) business days'  written notice
of such redemption to the Holder (the "Special Notice of  Redemption").  The
date so specified in such Special Notice of Redemption  shall be the Special
Redemption Payment Date.  Anything in the preceding  provisions of this Section
5 to the contrary notwithstanding, the Special  Redemption Price shall, unless
otherwise agreed to in writing by the  Holder after receiving the Special
Notice of Redemption, be paid to the  Holder in good funds at least five (5)
but not more than ten (10) business  days from the date of the Special Notice
of  Redemption, except that, with  respect to any Debentures for which a
Special Notice of Redemption is  given, the Holder shall have the right,
exercisable by giving a Notice of  Conversion is submitted to the Company
within five (5) business days of  the Holder's receipt of the Company's Special
Notice of Redemption, to  convert any or all of the Debentures sought to be
redeemed (a "Special  Redemption Notice Conversion") and  the Special
Redemption Notice  Conversion shall take precedence over the redemption
contemplated by the  Special Notice of Redemption.  Such Debentures shall be
converted in  accordance with the terms hereof, except that Section 4(E) shall
not apply  to a Special Redemption Notice Conversion.  Furthermore, in the
event such  Special Redemption Price payment is not timely made, the Special
Notice of  Redemption shall be null and void and any rights of the Company to
redeem  outstanding Debentures under this Section 5 shall terminate.  Any
redemption contemplated by this Debenture shall be made only in cash by  the
payment of immediately available good funds to the Holder.


6.      The Holder recognizes that the Company may be limited in the  number of
shares of Common Stock it may issue (a) by virtue of (i) the  number of
authorized shares, or (ii) the applicable rules and regulations  of the
principal securities market on which the Common Stock is listed or  traded,
including, but not necessarily limited to, NASDAQ Rule  4310(c)(25)(H)
(collectively, the "Cap Regulations") or (b) the provisions  of Section 4(j) of
the Securities Purchase Agreement (collectively, with  the Cap Regulations, the
"Issuance Limitations").  Without limiting the  other provisions hereof, (w)
the Company will take all steps reasonably  necessary to be in a position to
issue shares of Common Stock on  conversion of the Debentures without violating
the Cap Regulations and (x)  if, despite taking such steps, the Company still
can not issue such shares  of Common Stock without violating the Issuance
Regulations, the Holder of   this Debenture (to the extent the same can not be
converted in compliance  with the Issuance Regulations (an "Unconverted
Debenture"), shall have the  right to require the Company to redeem each
Unconverted Debenture for an  amount (the "Cap Redemption Amount"), payable in
cash, equal to (y) one  hundred twenty-five and 00/100 percent (125.0%) of the
principal of the  Unconverted Debenture, plus (z) all accrued but unpaid
interest on the  Debenture through the date of redemption (the "Cap Redemption
Date")  specified in the notice from the Holder electing this remedy.

7.      Subject to the terms of the Securities Purchase Agreement,  dated
January     ,  2000 (the "Securities Purchase Agreement"), between  the Company
and the Holder (or the Holder's predecessor in interest), no  provision of this
Debenture shall alter or impair the obligation of the  Company, which is
absolute and unconditional, to pay the principal of, and  interest on, this
Debenture at the time, place, and rate, and in the coin  or currency, herein
prescribed.  This Debenture and all other Debentures  now or hereafter issued
of similar terms are direct obligations of the  Company.

8.      A.      The obligations of the Company under this Debenture are
secured under the terms of the Securities Purchase Agreement.

B.      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.


9.      A.      The Company agrees that for as long as this Debenture  remains
outstanding, the Company will not, without the consent of the  Holder, enter
into a merger (other than where the Company is the surviving  entity) or
consolidation with another corporation or other entity or a  sale or transfer
of all or substantially all of the assets of the Company  to another person
(collectively, a "Sale").   If, with such consent,  the  Company enters into a
Sale and the holders of the Common Stock are  entitled to receive stock,
securities or property in respect of or in  exchange for Common Stock, then as
a condition of such Sale, the Company  and any such successor, purchaser or
transferee will agree that the  Debenture may thereafter be converted on the
terms and subject to the  conditions set forth above into the kind and amount
of stock, securities  or property receivable upon such merger, consolidation,
sale or transfer  by a holder of the number of shares of Common Stock into
which this  Debenture might have been converted immediately before such merger,
consolidation, sale or transfer, subject to adjustments which shall be as
nearly equivalent as may be practicable.  In the event of any such  proposed
Sale, (i) the Holder hereof shall have the right to convert by  delivering a
Notice of Conversion to the Company within fifteen (15) days  of receipt of
notice of such Sale from the Company, but (ii) in the event  the Holder hereof
shall elect not to convert, the Company may, on three  days' advance written
notice to the Holder, prepay all outstanding  principal and accrued interest on
this Debenture by paying to the Holder  an amount (the "Redemption Amount", in
available good funds, equal to the  sum of (a) one hundred twenty-five and
00/100 percent (125.0%) of the  outstanding principal of this Debenture plus
(b) all accrued but unpaid  interest thereon through the date such payment is
paid to the Holder,   less all amounts required by law to be deducted, upon
which tender of  payment following such notice, the right of conversion shall
terminate.

B.      The Company shall give written notice of such redemption  to the Holder
(the "Notice of Redemption").  Anything in the preceding  provisions of this
Section 9 to the contrary notwithstanding, the  Redemption Amount shall, unless
otherwise agreed to in writing by the  Holder after receiving the Notice of
Redemption, be paid to the Holder in  good funds within three (3) business days
from the date of the Notice of   Redemption.   After receiving a Notice of
Redemption, the Holder shall no  longer have the right to issue a Notice of
Conversion without the consent  of the Issuer.  If prior to receiving a Notice
of Redemption, the Holder  had issued a Notice of Conversion, the Holder will
have the right to  cancel such Notice of Conversion by written notice to the
Company.  If  such previously given Notice of Conversion is not so canceled,
the Company  shall honor such Notice of Conversion and the Notice of Redemption
shall  not apply to the principal portion of the Debenture thereby being
converted.

C.      In the event payment of the Redemption Amount is not  timely made, any
rights of the Company to redeem outstanding Debentures  shall terminate, and
the Notice of Redemption shall be null and void.

10.        The Company agrees that for as long as this Debenture  remains
outstanding, the Company will not, without the consent of the  Holder, spin off
or otherwise divest itself of a part of its business or  operations or dispose
all or of a part of its assets in a transaction (the  "Spin Off") in which the
Company does not receive compensation for such  business, operations or assets,
but causes securities of another entity  (the "Spin Off Securities") to be
issued to security holders of the  Company. If, for any reason, prior to the
Conversion Date or the  Redemption Payment Date, the Company, with the consent
of the Holder,  consummates a Spin Off, then the Company shall cause (i) to be
reserved  Spin Off Securities equal to the number thereof which would have been
issued to the Holder had all of the Holder's Debentures outstanding on the
record date (the "Record Date") for determining the amount and number of  Spin
Off Securities to be issued to security holders of the Company (the
"Outstanding Debentures") been converted as of the close of business on  the
trading day immediately before the Record Date (the "Reserved Spin Off
Shares"), and (ii) to be issued to the Holder on the conversion of all or  any
of the Outstanding Debentures, such amount of the Reserved Spin Off  Shares
equal to (x) the Reserved Spin Off Shares multiplied by (y) a  fraction, of
which (I) the numerator is the principal amount of the  Outstanding Debentures
then being converted, and (II) the denominator is  the principal amount of the
Outstanding Debentures.

11.     If, at any time while any portion of this Debenture remains
outstanding, the Company  effectuates a stock split or reverse stock split  of
its Common Stock or issues a dividend on its Common Stock consisting of  shares
of Common Stock, the Market Price as of the Closing Date shall be  equitably
adjusted to reflect such action.  By way of illustration, and  not in
limitation, of the foregoing (i) if the Company effectuates a 2:1  split of its
Common Stock, thereafter, with respect to any conversion for  which the Company
issues the shares after the record date of such split,  the Market Price as of
the Closing Date shall be deemed to be one-half of  what it had been calculated
to be immediately prior to such split; (ii) if  the Company effectuates a 1:10
reverse split of its Common Stock,  thereafter, with respect to any conversion
for which the Company issues  the shares after the record date of such reverse
split, the Market Price  as of the Closing Date shall be deemed to be ten times
what it had been  calculated to be immediately prior to such split; and (iii)
if the Company  declares a stock dividend of one share of Common Stock for
every 10 shares  outstanding, thereafter, with respect to any conversion for
which the  Company issues the shares after the record date of such dividend,
the  Market Price as of the Closing Date shall be deemed to be the amount of
such Market Price calculated immediately prior to such record date  multiplied
by a fraction, of which the numerator is the number of shares  (10) for which a
dividend share will be issued and the denominator is such  number of shares
plus the dividend share(s) issuable or issued thereon  (11).

12.     The Holder of the Debenture, by acceptance hereof, agrees that  this
Debenture is being acquired for investment and that such Holder will  not
offer, sell or otherwise dispose of this Debenture or the Shares of  Common
Stock issuable upon conversion thereof except under circumstances  which will
not result in a violation of the Act or any applicable state  Blue Sky or
foreign laws or similar laws relating to the sale of  securities.

13.     This Debenture shall be governed by and construed in  accordance with
the laws of the State of Delaware.  Each of the parties  consents to the
jurisdiction of the federal courts whose districts  encompass any part of the
City of Wilmington or the state courts of the  State of Delaware sitting in the
City of Wilmington in connection with any  dispute arising under this Agreement
and hereby waives, to the maximum  extent permitted by law, any objection,
including any objection based on  forum non coveniens, to the bringing of any
such proceeding in such  jurisdictions. To the extent determined by such court,
the Company shall  reimburse the Holder for any reasonable legal fees and
disbursements  incurred by the Holder in enforcement of or protection of any of
its  rights under any of this Debenture.

14.     The following shall constitute an "Event of Default":

a.      The Company shall default in the payment of principal or  interest on
this Debenture and same shall continue for  a period of five (5) business days;
or

b.      Any of the representations or warranties made by the  Company herein,
in the Securities Purchase Agreement,  the Registration Rights Agreement (as
defined in the  Securities Purchase Agreement) or in any certificate or
financial or other written statements heretofore or  hereafter furnished by the
Company in connection with  the execution and delivery of this Debenture or the
Securities Purchase Agreement shall be false or  misleading in any material
respect at the time made; or

c:      Subject to the terms of the Securities Purchase  Agreement, the Company
fails to authorize or to cause  its Transfer Agent to issue shares of Common
Stock upon  exercise by the Holder of the conversion rights of the  Holder in
accordance with the terms of this Debenture,  fails to transfer or to cause its
Transfer Agent to  transfer any certificate for shares of Common Stock  issued
to the Holder upon conversion of this Debenture  and when required by this
Debenture or the Registration  Rights Agreement, and such transfer is otherwise
lawful,  or fails to remove any restrictive legend on any  certificate or fails
to cause its Transfer Agent to  remove such restricted legend, in each case
where such  removal is lawful, as and when required by this  Debenture, the
Agreement or the Registration Rights  Agreement, and any such failure shall
continue uncured  for five (5) business days; or

d.      The Company shall fail to perform or observe, in any  material respect,
any other covenant, term, provision,  condition, agreement or obligation of any
Debenture in  this series and such failure shall continue uncured for  a period
of thirty (30) days after written notice from  the Holder of such failure; or

e.      The Company shall fail to perform or observe, in any  material respect,
any covenant, term, provision,  condition, agreement or obligation of the
Company under  the Securities Purchase Agreement or the Registration  Rights
Agreement and such failure  shall continue  uncured for a period of thirty (30)
days after written  notice from the Holder of such failure (other than a
failure to cause the Registration Statement to become  effective no later than
the Required Effective Date, as  defined and provided in the Registration
Rights  Agreement, as to which no such cure period shall apply);  or

f.      The Company shall (1)  admit in writing its inability to  pay its debts
generally as they mature; (2) make an  assignment for the benefit of creditors
or commence  proceedings for its dissolution; or (3) 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; or

g.      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 sixty (60) days after such appointment; or


h.      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
and shall not be dismissed within sixty (60)  days thereafter; or

i.      Any money judgment, writ or warrant of attachment, or  similar process
in excess of Two Hundred Thousand  ($200,000) 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 sixty
(60) days or  in any event later than five (5) days prior to the date  of any
proposed sale thereunder; or

j.      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 by or against the Company and, if
instituted against the Company, shall not be dismissed  within sixty (60) days
after such institution or the  Company shall by any action or answer approve
of,  consent to, or acquiesce in any such proceedings or  admit the material
allegations of, or default in  answering a petition filed in any such
proceeding; or

k.      The Company shall have its Common Stock suspended or  delisted from an
exchange or over-the-counter market  from trading for in excess of ten (10)
trading days.

Then, or at any time thereafter, 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
notice of any kinds, 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 enforce any and all of the Holder's rights and
remedies  provided herein or any other rights or remedies afforded by law.

15.     Nothing contained in this Debenture shall be construed as  conferring
upon the Holder the right to vote or to receive dividends or to  consent or
receive notice as a shareholder in respect of any meeting of  shareholders or
any rights whatsoever as a shareholder of the Company,  unless and to the
extent  converted in accordance with the terms hereof.


16.     In the event for any reason, any payment by or act of the  Company or
the Holder shall result in payment of interest which would  exceed the limit
authorized by or be in violation of the law of the  jurisdiction applicable to
this Debenture, then ipso facto the obligation  of the Company to pay interest
or perform such act or requirement shall be  reduced to the limit authorized
under such law, so that in no event shall  the Company be obligated to pay any
such interest, perform any such act or  be bound by any requirement which would
result in the payment of interest  in excess of the limit so authorized.  In
the event any payment by or act  of the Company shall result in the extraction
of a rate of interest in  excess of a sum which is lawfully collectible as
interest, then such  amount (to the extent of such excess not returned to the
Company) shall,  without further agreement or notice between or by the Company
or the  Holder, be deemed applied to the payment of principal, if any,
hereunder  immediately upon receipt of such excess funds by the Holder, with
the same  force and effect as though the Company had specifically designated
such  sums to be so applied to principal and the Holder had agreed to accept
such sums as an interest-free prepayment of this Debenture.  If any part  of
such excess remains after the principal has been paid in full, whether  by the
provisions of the preceding sentences of this Section 16 or  otherwise, such
excess shall be deemed to be an interest-free loan from  the Company to the
Holder, which loan shall be payable immediately upon  demand by the Company.
The provisions of this Section 16 shall control  every other provision of this
Debenture.

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

Dated: __________________, 2000

                                       AMERICAN CHAMPION ENTERTAINMENT, INC.

                                       By: __________________________
                                            Anthony K. Chan
                                        (Print Name)
                                            President & CEO
                                        (Title)



EXHIBIT A


NOTICE OF CONVERSION
OF
7% CONVERTIBLE DEBENTURE DUE DECEMBER      , 2002

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



The undersigned hereby irrevocably elects to convert $
________________ of the principal
amount of the above Debenture No. ___ into Shares of Common Stock of
AMERICAN CHAMPION ENTERTAINMENT, INC. (the "Company") according to the
conditions thereof, as of the date written below.


Conversion Date*

 ___________________________________________________________________

Applicable Conversion Price

__________________________________________________________


Signature

__________________________________________________________________________

[Name]
__________________________________________

Address:

__________________________________________________________________________


__________________________________________________________________________





* If this Notice of Conversion represents conversion of the outstanding
principal balance of the Debenture, the original Debenture must be  received by
the Company or its transfer agent by the fifth business date  following the
Conversion Date.