EXHIBIT 10.2


THIS  DEBENTURE HAS NOT BEEN  REGISTERED  WITH THE UNITED STATES  SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION") OR THE SECURITIES COMMISSION OF ANY STATE
PURSUANT TO AN EXEMPTION FROM REGISTRATION  UNDER REGULATION S PROMULGATED UNDER
THE  SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT").  THIS DEBENTURE  SHALL
NOT  CONSTITUTE  AN  OFFER  TO SELL  NOR A  SOLICITATION  OF AN OFFER TO BUY THE
DEBENTURE  IN ANY  JURISDICTION  IN WHICH  SUCH OFFER OR  SOLICITATION  WOULD BE
UNLAWFUL.

THIS DEBENTURE MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT
TO AN EFFECTIVE  REGISTRATION  STATEMENT UNDER THE 1933 ACT AND UNDER APPLICABLE
STATE  SECURITIES  LAWS, OR IN A TRANSACTION  WHICH IS EXEMPT FROM  REGISTRATION
UNDER THE  PROVISIONS OF THE 1933 ACT AND UNDER  PROVISIONS OF APPLICABLE  STATE
SECURITIES LAWS.


                         SPORTSPRIZE ENTERTAINMENT INC.

                            9% CONVERTIBLE DEBENTURE

US$850,000                                                          May 30, 2000

SPORTSPRIZE  ENTERTAINMENT  INC.,  a Nevada  corporation  (the  "Company"),  the
principal office of which is located at 13101 Washington  Blvd.,  Suite 131, Los
Angeles,  California  90066,  for value received  hereby  promises to pay Cutter
Services Corp., or its registered assigns (the "Holder"),  the sum of US$850,000
or such  lesser  amount as shall then  equal the  outstanding  principal  amount
hereof  (the  "Principal  Amount")  and  any  unpaid  accrued  interest  hereon,
(together  with the Principal  Amount,  the  "Outstanding  Amount") as set forth
below,  on May 30,  2005,  (the  "Maturity  Date").  Payment for all amounts due
hereunder shall be made by mail to the registered address of the Holder. This 9%
Convertible Debenture (the "Debenture") is issued pursuant to that Debenture and
Warrant Purchase  Agreement between the Company and certain  purchasers dated as
of May 30, 2000 (the "Purchase Agreement").

The  following is a statement of the rights of the Holder of this  Debenture and
conditions to which this  Debenture is subject,  and to which the Holder hereof,
by the acceptance of this Debenture, agrees:

1.  Definitions.  As used in this  Debenture,  the following  terms,  unless the
context otherwise requires, have the following meanings:

     (i)  "Average  Closing  Price"  shall mean the average of the three  lowest
consecutive  closing bid prices of the Common Stock on the NASD Over The Counter
Bulletin  Board  ("OTCBB") or such other public  market or exchange  that is the
primary  public market for such Common Stock as quoted by Bloomberg  L.P. or, if
not reported  thereby,  another  authoritative  source, in the thirty day period
prior to the Conversion Date.



                                      -1-
<PAGE>

     (ii) "Closing  Date" shall have the meaning given that term in the Purchase
Agreement.

     (iii)  "Company"  includes  the  Company  and any  corporation  which shall
succeed to or assume the obligations of the Company under this Debenture.

     (iv) "Common Stock" shall mean the shares of common stock of the Company.

     (v) "Holder" when the context refers to a Holder of this  Debenture,  shall
mean  any  person  who  shall  at the  time  be the  registered  Holder  of this
Debenture.

     (vi)  "Conversion  Date" shall mean, with respect to each  Conversion,  the
date on which the Holder delivers to the Company a Notice of Conversion pursuant
to  Section  4.1 or the date on  which  the  Company  delivers  to the  Holder a
Redemption Notice pursuant to Section 4.4.

     (vii)  "Conversion  Price"  shall  mean the  lesser of (a)  $1.275  and (b)
eighty-three  percent (83%) of the Average  Closing Price.  Notwithstanding  the
foregoing,  the Conversion  Price shall not be less than the minimum  conversion
price or, if applicable, adjustment price related to any financings in excess of
US$1 million by the Company pursuant to which the Company issues securities that
(i) are convertible into Common Stock or (ii) subject to reset and/or adjustment
by  issuance  of Common  Stock  based on the market  price of Common  Stock (the
"Floor Price").  In no event shall the Floor Price be greater than $1.00. If the
Company completes a subsequent  financing of securities  convertible into Common
Stock at a price per  share  less than the Floor  Price,  the Floor  Price  with
respect to any  outstanding  balance under the Debenture  shall be readjusted to
the lower price per share of Common Stock of such financing.

     (viii) "Notice of  Conversion"  shall mean the written notice by the Holder
to the Company at its principal  corporate office of the election to convert any
vested  portion of this  Debenture,  in whole or in part,  into shares of Common
Stock, pursuant to Section 4.1.

2. Interest.

     (i) The  Company  shall pay  interest  (computed  on the basis of a 365-day
year) at a rate of nine percent (9%) per annum on the Outstanding  Amount during
the period beginning on the date of issuance of this Debenture and ending on the
later  of the  date the  Outstanding  Amount  is paid in full or the date of the
final conversion the Principal Amount.

     (ii) Interest shall be paid in Common Stock issued at the Conversion Price,
or at the  Company's  option,  paid  in  cash on the  later  of the  date of the
Outstanding  Amount is paid in full or the  final  conversion  of the  Principal
Amount.

3.  Events of  Default.  If one or more of the  following  described  "Events of
Default" shall occur,

     a. Any of the  representations or warranties made by the Company herein, or
in the Purchase  Agreement  shall have been  incorrect when made in any material
respect; or



                                      -2-
<PAGE>

     b. The Company shall fail to perform or observe in any material respect any
covenant,  term,  provision,  condition,  agreement or obligation of the Company
under this Debenture (other than those contained in paragraphs 3.a., 3.c., 3.d.,
3.e.,  and 3.f.  herein)  or the  Purchase  Agreement,  and such  failure  shall
continue  uncured  for a period of ten (10) days after  written  notice from the
Holder specifically describing such failure or, if such failure is by its nature
curable but not curable within thirty (30) days from the date of such notice, if
the Company shall have failed to commence  within such thirty (30) day period in
good  faith to cure such  failure  and shall  have  failed to cure such  failure
within a reasonable time longer than thirty (30) days; or

     c. A trustee,  liquidator or receiver  shall be appointed by 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

     d. 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 thirty (30) calendar days thereafter;

     e.  Bankruptcy  reorganization,  insolvency or  liquidation  proceedings or
other  proceedings for relief under any bankruptcy law or any law for the relief
or debtors  shall be  instituted  by or against the Company  and, if  instituted
against  the  Company,  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 such proceedings shall not be dismissed within thirty (30) days thereafter;

     f. If the employment of David Kenin, the Company's Chief Executive Officer,
is terminated or he becomes  "disabled," so that he cannot perform the essential
functions of his position with reasonable accommodation; or

     g. If the Common Stock to be issued  pursuant to  conversion  as set out in
Paragraph  (4) of this  Debenture is not delivered to the Holder within ten (10)
business 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  kind,  all of which  are  hereby  expressly  waived,
anything  herein or in any note or other  instruments  contained to the contrary
notwithstanding,  and 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. It is agreed
that in the event of such action such Holders of Debentures shall be entitled to
receive  all  reasonable  fees,  costs and  expenses  incurred,  including  with
limitation  such  reasonable  fees and expenses of attorneys  (if  litigation is
commenced).



                                      -3-
<PAGE>

4. Conversion.

4.1  Voluntary  Conversion.  The  Principal  Amount of this  Debenture  shall be
convertible  into Common  Stock,  at the Holder's sole  discretion,  at any time
beginning  August 31,  2000,  in  accordance  with the terms of this  Agreement.
Notwithstanding  the foregoing,  if the Company completes an unsecured financing
in excess of US$1 million after May 30, 2000,  the Holder shall not convert more
than  one-third  of the  Principal  Amount in any  30-day  period  (the  "Vested
Principal  Amount" for such period).  If an Event of Default occurs,  the entire
Outstanding  Amount shall be  convertible  immediately  into Common Stock at the
sole discretion of the Holder.

Common Stock  issuable upon  conversion of the Debenture  will be issued only in
respect to such Vested Principal Amount. The accrued interest payable under this
Debenture shall be added to the Principal  Amount or may be paid in cash, at the
Company's sole option.

If the number of  resultant  shares of Common  Stock 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 step to obtain such approval.

This Debenture may not be converted by, or on behalf of, a "U.S. Person" as such
term as defined by  Regulation S under the  Securities  Act of 1933,  as amended
(the "1933 Act"),  unless the Common Stock  issuable upon  exercise  thereof has
been  registered  under the 1933 Act and the  securities  laws of all applicable
states of the United States, or an exemption from such registration requirements
is available.

4.2 Conversion Procedure.

     (a) Notice of  Conversion  pursuant  to Section  4.1.  The Holder  shall be
entitled to convert any Vested Principal Amount of this Debenture in whole or in
part into shares of Common Stock, by giving written notice by way of a Notice of
Conversion to the Company at its principal  corporate  office of the election to
convert  the same  pursuant  to Section 4, and shall  state  therein the name or
names in which the certificate or  certificates  for, shares of Common Stock are
to be issued. Such conversion shall be deemed to have been made on the date that
the Notice of Conversion  and the Debenture is actually sent and received by the
Company at its principal offices (each, a "Conversion Date").

     (b) Surrender of Debenture.  The Holder at its sole expense shall surrender
the  Debenture  and the  signed  Notice of  Conversion  to the  Company,  at the
principal  offices of the  Company.  The person or persons  entitled  to receive
shares of Common Stock  issuable upon such  conversion  shall be treated for all
purposes  as the record  holder or holders  of any such  shares of Common  Stock
immediately  prior to the close of business on the date the Notice of Conversion
and the Debenture is delivered.  A new Debenture  representing  the  Outstanding
amount,  if any,  with respect to which this  Debenture  has not been  converted
shall be delivered to the Holder with the certificate issued pursuant to Section
4.2(c).



                                      -4-
<PAGE>

     (c) Delivery of Stock  Certificates.  As promptly as practicable  after the
conversion of this  Debenture  (but in no case later than ten (10) business days
after  receipt  of the  Debenture  and the  signed  Notice of  Conversion),  the
Company,  at its expense,  will issue and deliver by express courier service for
delivery to the Holder of this Debenture a certificate or  certificates  for the
number of full shares of Common Stock issuable upon such conversion, pursuant to
Section  (4.1) of this  Debenture.  In the event that the Common Stock  issuable
upon conversion of the Debenture, is not delivered within ten (10) business days
of the date the Company receives the Debenture and the Notice of Conversion, the
Company shall pay to the Holder,  by wire  transfer,  as liquidated  damages for
such failure and not as a penalty, an amount equal to the difference between (a)
the price of the Common Stock issuable upon conversion of the Debenture pursuant
to the Notice of Conversion  (calculated  as the median price of the closing bid
and offer price on the 11th day as reported by Bloomberg L.P.) and (b) the price
of the Common Stock on delivery of the  certificates  (calculated  as the median
price of the closing bid and offer  price as reported by  Bloomberg  L.P. on the
date the Company's  transfer  agent sends the stock  certificate  plus three (3)
business  days).  Notwithstanding  the  foregoing,  the  Company  shall  not  be
obligated to pay such  liquidated  damages if the median price in (b) is greater
than the median price in (a) or the late  delivery of such  certificate  results
from an event beyond the control of the Company.  Any and all payments  required
pursuant  to  this  paragraph  shall  be  payable  only  in  cash.  The  Company
understands  that a delay in the  issuance of the Common  Stock could  result in
economic loss to the Holder.

     The share certificates shall bear a restrictive legend in substantially the
following form:

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
     AS AMENDED  ("SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY
     NOT BE SOLD,  TRANSFERRED  OR OTHERWISE  DISPOSED OF EXCEPT  PURSUANT TO AN
     EFFECTIVE  REGISTRATION  STATEMENT OR EXEMPTION FROM REGISTRATION UNDER THE
     FOREGOING LAWS.  ACCORDINGLY,  THIS WARRANT MAY NOT BE SOLD, TRANSFERRED OR
     OTHERWISE  DISPOSED  OF UNLESS (i)  PURSUANT TO AN  EFFECTIVE  REGISTRATION
     UNDER THE SECURITIES ACT OR (ii) IN A TRANSACTION  EXEMPT FROM REGISTRATION
     UNDER  THE  SECURITIES  ACT  AND  UNDER   PROVISIONS  OF  APPLICABLE  STATE
     SECURITIES  LAWS.  HEDGING  TRANSACTIONS  RELATED TO THESE  SECURITIES  ARE
     PROHIBITED UNLESS CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT.

     (d) Mechanics  and Effect of  Conversion.  No  fractional  shares of Common
Stock shall be issued upon conversion of this Debenture.  In lieu of the Company
issuing  any  fractional  shares  to the  Holder  upon  the  conversion  of this
Debenture,  the  Company  shall pay to the  Holder  the  amount  of  outstanding
principal  that is not so converted,  such payment to be in the form as provided
below. Applicable state, provincial and federal securities laws will not require
any legends on the  certificates  after the Debenture has been  converted.  Upon
conversion of this Debenture, the Company shall be forever released from all its
obligations and liabilities under this Debenture,  except that the Company shall
be obligated to pay the Holder, upon conversion,



                                      -5-
<PAGE>

any interest accrued and unpaid or unconverted to and including the date of such
conversion, and no more.

4.3  Conversion  Default.  Subject to Section  4.4  herein,  if, at any time the
Holder submits a Notice of Conversion  and the Company does not have  sufficient
authorized but unissued shares of Common Stock  available to effect,  in full, a
conversion of the Debentures (a "Conversion  Default",  the date of such default
being referred to herein as the "Conversion  Default  Date"),  the Company shall
issue to the Holder all of the shares of Common Stock which are  available,  and
the Notice of Conversion as to any Debentures  requested to be converted but not
converted  (the  "Unconverted  Shares")  shall become null and void. The Company
shall provide notice of such Conversion Default ("Notice of Conversion Default")
to all existing Holders of outstanding  Debentures,  by facsimile,  within three
(3) business days of such default  (with the original  delivered by overnight or
two day courier). No Holder may submit a Notice of Conversion after receipt of a
Notice of Conversion  Default until the date  additional  shares of Common Stock
are authorized by the Company.

4.4 Redemption by the Company.

     (a)  Right to  Redeem.  Prior to  receipt  of a Notice of  Conversion,  the
Company may, but shall not be require to, redeem for cash the Outstanding Amount
of this  Debenture,  in  whole  or in  part,  at a price  equal  to one  hundred
seventeen  percent (117%) of the redeemed  Outstanding  Amount (the  "Redemption
Price").

     (b)  Notice of  Redemption  pursuant  to  Section  4.4(a).  Subject  to the
Holder's right to convert under Section 4.4(c), the Company shall be entitled to
redeem in cash any Outstanding Amount outstanding under this Debenture, in whole
or in part, by giving  written notice to the Holder of its intent to redeem such
Outstanding  Amount (in  accordance  with Section 14) pursuant to Section 4.4(a)
(the  "Notice of  Redemption"),  and shall  state the amount of the  Outstanding
Amount to be redeemed.  Such Notice of  Redemption  shall be deemed to have been
made on the date that the Notice of  Redemption  is actually sent by the Company
(each, a "Redemption Notice Date").

     (c) Election to Convert Upon Notice of Redemption. Upon receipt of a Notice
of  Redemption,  the Holder  shall be entitled  to convert any Vested  Principal
Amount of this  Debenture,  in whole or in part, into shares of Common Stock, by
giving  written  notice by way of a Notice of  Conversion  pursuant  to  Section
4.2(a),  no later than ten (10) business  days after  receipt of the  Redemption
Notice Date (the "Election  Period").  Upon such election,  the Vested Principal
Amount of this  Debenture  pursuant to which the Notice of  Conversion  is given
shall be converted in  accordance  with the terms of Sections  4.1, 4.2 and 4.3,
and the Company may not redeem that  particular  amount of the Vested  Principal
Amount.  Any remaining Vested Principal Amount for which Notice of Redemption is
given shall be redeemed in accordance with Section 4.4.

     (d) Payment of  Redemption  Price.  Within five (5) business days after the
Election Period,  the Company shall,  redeem for cash the Outstanding Amount for
which Notice of Redemption is given at the Redemption  Price,  plus  outstanding
interest if the entire Debenture is



                                      -6-
<PAGE>

redeemed. If the Company fails to pay the redemption amount in cash, within five
(5) business days following the Election  Period,  then the  redemption  will be
declared null and void. The Outstanding Amount for which such redemption is made
shall be treated for all purposes as redeemed  immediately prior to the close of
business on the date the Redemption Price is paid.

5. Conversion Price Adjustments.

5.1  Adjustments  for Stock  Splits and  Subdivisions.  In the event the Company
should at any time or from time to time after the date of issuance  hereof fix a
record date for the  effectuation  of a split or subdivision of the  outstanding
shares of Common Stock or the  determination of holders of Common Stock entitled
to receive a dividend or the distribution payable in additional shares of Common
Stock or other  securities or rights  convertible  into, or entitling the holder
thereof to receive  directly or  indirectly,  additional  shares of Common Stock
(hereinafter  referred to as "Common Stock Equivalents")  without payment of any
consideration  by such holder for the  additional  shares of Common Stock or the
Common Stock  Equivalents  (including  the  additional  shares of Common  Stock'
issuable upon conversion or exercise thereof),  then, as of such record date (or
the date of such dividend  distribution,  split or subdivision if no record date
is  fixed),  the  Conversion  Price of this  Debenture  shall  be  appropriately
decreased so that the number of shares of Common Stock issuable upon  conversion
of  this  Debenture  shall  be  increased  in  proportion  to such  increase  of
outstanding shares.

5.2  Adjustments  for Reverse  Stock  Splits.  If the number of shares of Common
Stock  outstanding  at  any  time  after  the  date  hereof  is  decreased  by a
combination of the outstanding shares of Common Stock, then following the record
date of such  combination,  the  Conversion  Price for this  Debenture  shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion  hereof  shall  be  decreased  in  proportion  to  such  decrease  in
outstanding shares.

6. Merger.  If the Company merges or  consolidates  with another  corporation or
sells or transfers all or substantially  all of its assets to another person 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  merger,  consolidation,  sale  or  transfer,  the  Company  and  any  such
successor, purchaser or transferee shall amend this Debenture to provide that it
may thereafter be converted on the terms and subject to the conditions set forth
above into the kind and amount of stock,  entities 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  to  adjustments
provided for in Section 5.

The  Company  shall  not   consolidate   or  merge  into,  or  transfer  all  or
substantially  all of its assets to, any person,  unless such person assumes the
obligations  of the Company  under this  Debenture  and  immediately  after such
transaction  no Event of Default  exists.  Any  reference  herein to the Company
shall refer to such surviving or transferee  corporation  and the obligations of
the Company shall terminate upon such assumption.



                                      -7-
<PAGE>

7. Worn or Lost Debentures. If this Debenture becomes worn, defaced or mutilated
but is still substantially intact and recognizable, the Company or its agent may
issue a new  Debenture  in lieu hereof upon its  surrender.  Where the Holder of
this Debenture claims that the Debenture has been lost,  destroyed or wrongfully
take, the Company shall issue a new Debenture in place of the original Debenture
if the Holder so requests by written notice to the Company actually  received by
the Company before it is notified the Debenture has been acquired by a bona fide
purchaser  and Holder has  delivered  to the Company an  indemnity  bond in such
amount and issued by such surety as the Company deems satisfactory together with
an  affidavit  of the  Holder  setting  forth the facts  concerning  such  loss,
destruction or wrongful taking and such other information in such form with such
proof or verification as the Company may request.

8. Notices of Record Date.

In the event of:

(i) Any  taking  by the  Company  of  record  of the  holders  of any  class  of
securities of the Company for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend  payable out of
earned  surplus  at the  same  rate as  that  of the  last  such  cash  dividend
heretofore paid) or other distribution,  or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right; or

(ii)  Any  capital  reorganization  of  the  Company,  any  reclassification  or
recapitalization  of the capital  stock of the Company or any transfer of all or
substantially  all of the  assets  of the  Company  to any  other  person or any
consolidation or merger involving the Company; or

(iii) Any voluntary or involuntary dissolution, liquidation or winding up of the
Company.

the  Company  will mail to the holder of this  Debenture  at least five (5) days
prior to the earliest date specified  therein,  a notice specifying (A) the date
on which  any such  record  is to be taken  for the  purpose  of such  dividend,
distribution  or  right;  and (B) the  date on which  any  such  reorganization,
reclassification,  transfer, consolidation,  merger, dissolution, liquidation or
winding up is expected to become  effective and the record date for  determining
stockholders entitled to vote thereon.

9. Authorized Shares, of Common Stock,  Reservation of Shares. The Company shall
at the  Closing  date and from time to time as  required,  so long as any of the
Debentures are outstanding, reserve and keep available out of its authorized and
unissued Common Stock, solely for the purpose of effecting the conversion of the
Debentures,  such number of shares of Common Stock equal to or greater than 200%
of the number of shares of Common Stock for which are issuable  upon  conversion
of all of the then  outstanding  Debentures  which are then outstanding or which
could be issued at any time under this Debenture.

10. Assignment.  Subject to the restrictions or transfer described in Section 12
below,  the  rights  and  obligations  of the  Company  and the  Holder  of this
Debenture  shall be binding  upon and benefit the  successors,  assigns,  heirs,
administrators, and transferees of the parties.



                                      -8-
<PAGE>

11. Waiver and Amendment.  This Debenture and the Purchase Agreement  constitute
the full and entire understanding and agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreements with respect to
the subject  matter  hereof.  Any  provision of this  Debenture  may be amended,
waived or modified upon the written consent of the Company and Holder thereof.

12. Restrictions on Transfer.  This Debenture and the Common Stock issuable upon
the conversion hereof have not been registered under the Securities Act of 1933,
as amended,  (the "Securities  Act") and have been sold pursuant to Regulation S
under the Securities Act ("Regulation  S"). The Debenture may not be transferred
or resold,  or to a U.S.  Person,  or to or for the account or benefit of a U.S.
Person (as defined in  Regulation  S) for a period of one (1) year from the date
hereof and  thereafter  this  Debenture  and the Common Stock  issuable upon the
conversion thereof may only be offered or sold pursuant to registration under or
an exemption from the Securities Act.

13.  Automatic  Conversion.  In the event all or any  portion of this  Debenture
remains  outstanding on May 30, 2005, the unconverted  portion of such Debenture
will  automatically be converted into shares of Common Stock on such date in the
manner set forth in Section 4.

14.  Grant of Security  Interest.  To secure the prompt and full  payment of all
principal and interest owing to Holder pursuant to this  Debenture,  the Company
hereby  grants to Holder a  security  interest  in all of its  assets,  accounts
receivable and inventory,  now existing or hereafter  arising,  and all proceeds
therefrom. Such security interest shall terminate on the earlier of (i) the date
the Company  completes any  unsecured  financing in excess of $2.5 million after
May 30,  2000 or (ii) this  Debenture  is  redeemed or  converted  in full.  The
Company shall file UCC-1 Financing Statements in the State of California and the
State of Nevada, and, at the written request of the Holder,  execute for filing,
any  additional  financing  statements  or  continuation  statements  as  may be
required from time to time to perfect or continue  Holder's security interest in
such assets.

15. Notices.  Any notice,  request or other communication  required or permitted
hereunder  shall be in  writing  and shall be deemed to have been duly  given if
made by hand delivery, by an express courier company, by registered or certified
mail, or by facsimile transmission, at the respective addresses and/or facsimile
number of the parties as set forth herein.

16. Governing Law;  Interpretation.  This Agreement,  and all exhibits attached,
shall be governed by and construed under the laws of the State of California and
the laws applicable therein without regard to its choice of law principles.  All
disputes should be determined and litigated in the courts of California.

Any litigation  based thereon,  or arising out of, under, or in connection with,
this Agreement shall be brought and maintained  exclusively in the courts of the
State of California. The Company and the Holder hereby expressly and irrevocably
submit to the jurisdiction of the state and federal Courts of California for the
purpose of any such litigation as set forth above and  irrevocably  agrees to be
bound by any final judgment rendered thereby in connection with such litigation.
The  Company  and the Holder  further  irrevocably  consents  to the  service of
process by



                                      -9-
<PAGE>

registered mail,  postage prepaid,  or by personal service within or without the
State of California. The Company and the Holder hereby expressly and irrevocably
waive,  to the fullest extent  permitted by law, any objection which it may have
or hereafter may have to the laying of venue of any such  litigation  brought in
any such court referred to above and any claim that any such litigation has been
brought in any inconvenient forum. To the extent that the Company and the Holder
have or hereafter  may acquire any immunity  from  jurisdiction  of any court or
from any legal process (whether  through service or notice,  attachment prior to
judgment, attachment in aid of execution or otherwise) with respect to itself or
its property. The Company and the Holder hereby irrevocably waives such immunity
in respect of its obligations under this agreement and the other loan documents.

Holder and the Company hereby knowingly, voluntarily and intentionally waive any
rights  they may  have to a trial by jury in  respect  of any  litigation  based
hereon,  or arising out of, under, or in connection  with,  this Agreement.  The
Company and the Holder  acknowledge  and agree that they have  received full and
sufficient  consideration  for this  provision  and  that  this  provision  is a
material inducement for the Company and the Holder entering into this agreement.

Any  legal  action or  proceeding  in  connection  with  this  Agreement  or the
performance  hereof may be brought in the state and  federal  courts  located in
California,  and the  parties  hereby  irrevocably  submit to the  non-exclusive
jurisdiction of such courts for the purpose of any such action or proceeding.

17. Heading;  References. All headings used herein are used for convenience only
and shall not be used to construe or  interpret  this  Debenture.  Except  where
otherwise indicated, all references herein to Sections refer to Sections hereof.

18.  Attorney's  Fees.  Should any party bring an action to enforce the terms of
this  Debenture,  then the  prevailing  party in the action shall be entitled to
recovery of its attorney's fees from the other party.








                                      -10-
<PAGE>

IN WITNESS WHEREOF, the Company has caused this Debenture to be issued this __th
day of May, 2000.


SPORTSPRIZE ENTERTAINMENT INC.



By:
    ---------------------------

Name:
    ---------------------------

Title:
    ---------------------------

Address:     13101 Washington Blvd., Suite 131
             Los Angeles, California  90066
Facsimile:   (310) 566-7150



HOLDER:  CUTTER SERVICES CORP.


By:
    ---------------------------

Name:
    ---------------------------

Title:
    ---------------------------

Address:     Cutter Services Corp.
             P.O. Box N-1836 (A-93)
             East Bay Shopping Center
             Nassau, Bahamas















                                      -11-
<PAGE>


                              NOTICE OF CONVERSION

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

     The undersigned hereby irrevocably elects, as of , 200_ to convert $ of the
Debentures   into  Shares  of  Common  Stock  (the   "Shares")  of   SPORTSPRIZE
ENTERTAINMENT INC. (the "Company")  according to the conditions set forth in the
Agreement dated May 30, 2000.

     The undersigned  hereby  represents that it is not a U.S. Person as defined
in Regulation S promulgated under the Securities Act of 1933, as amended, and is
not converting the  Debentures on behalf of any U.S.  Person,  and is not within
the  United  States at the time of  execution  and  delivery  of this  Notice of
Conversion.


Date of Conversion:
                    --------------------------

Number of Shares Issuable
upon this conversion: ------------------------

Signature:
           -----------------------------------
                      [Name]

Address:
           -----------------------------------

Phone:                 Facsimile:
      -------------               ------------







                                      -12-
<PAGE>

                              NOTICE OF REDEMPTION



     SPORTSPRIZE  ENTERTAINMENT INC. (the "Company") according to the conditions
set forth in the  Debenture  dated May 30, 2000 hereby  elects,  as of , 200_ to
redeem $ of the Vested Principal Amount and, if applicable,  accrued interest of
the Debentures.


Date of Redemption:
                   ----------------------------------


Vested Principal Amount and, if applicable, accrued interest Redeemed: ---------
x 1.17 = Redemption Amount: --------------



HOLDER:


----------------------------------
             [Name]



Phone:                 Facsimile:
      -------------               ------------



SPORTSPRIZE ENTERTAINMENT INC.


By:
    ----------------------------------


Its:
    ----------------------------------