Document:

EXHIBIT 4.7

         SUPPLEMENT  NO. 1, dated as of September 28, 2004 (this  "Supplement"),
between CONSPIRACY  ENTERTAINMENT  HOLDINGS, INC. (the "Company") and WHALEHAVEN
CAPITAL  FUND  LIMITED  (the  "Supplement   Lender"),   to  Securities  Purchase
Agreement,  dated as of August 31, 2004 (the "Original Agreement"),  between the
Company and the Lenders named therein (the "Original Lenders").

         Reference  is made to the  Original  Agreement.  Capitalized  terms not
otherwise  defined  herein  shall  have  the  meanings  ascribed  to them in the
Original Agreement or, as may be relevant,  in the other Transaction  Agreements
as in effect on the Closing Date (the "Original Transaction Agreements").

         On the Closing Date, as  contemplated  by the Original  Agreement  (the
"Original  Closing  Date"),  the  Original  Lenders  advanced  an  aggregate  of
$1,050,000 to the Company and the Company issued certain Debentures and Warrants
to the Original Lenders.

         The Company  desires to borrow an additional  $50,000 (the  "Additional
Purchase Price") and the Supplement  Lender is willing to advance the Additional
Purchase Price, all on the terms and conditions provided herein.

         NOW  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
covenants  contained  herein  and other  good and  valuable  consideration,  the
receipt and sufficiency of which are hereby  acknowledged,  the parties agree as
follows:

         1.       Subject to the terms and conditions of the Original  Agreement
and the other Original  Transaction  Agreements and of this Supplement,  (x) the
Supplement  Lender  hereby  agrees to loan to the Company the  principal  amount
equal to the Additional  Purchase Price,  and (y) the Company agrees to issue to
the Supplement  Lender (i) a Debenture in such principal amount (the "Additional
Debenture")  and  (ii)  Warrants  based  on  such   Additional   Debenture  (the
"Additional Warrants"),  all on the same terms and conditions as provided in the
Original  Agreement,  except that the Maturity Date of the Additional  Debenture
and the Expiration Date of the respective  Additional  Warrants shall be same as
provided in the  corresponding  Debentures  and Warrants  issued to the Original
Lenders on the Closing Date.

         2.       Consummation  of the  purchase  and  sale  of  the  Additional
Debenture and Additional Warrants (collectively, the "Additional Securities" and
such  transaction,  the  "Additional  Funding")  has  been  consented  to by the
Original  Lenders,  as  provided  in a  separately  executed  Lenders'  Consent,
acknowledged  and agreed to by the Company.  The Joint Escrow  Instructions  are
incorporated  herein by reference,  and,  except as modified by Annex 1 attached
hereto, shall apply to the consummation of the Additional Funding.

         3.       (a) The closing of the Additional  Funding shall take place on
the date (the  "Additional  Closing Date") mutually agreed to by the Company and
the Supplement Lender.

<PAGE>

                  (b)      The Additional Closing Date shall be deemed a Closing
Date under the Securities Purchase Agreement; provided, however, that references
to the "Closing Date" in the  Registration  Rights  Agreement shall be deemed to
refer to the Original Closing Date.

                  (c)      Except as  contemplated  hereby,  the  closing of the
Additional  Funding  shall  be  conducted  in the  same  manner  as the  closing
conducted on the Original  Closing  Date.  Counsel to the Company may provide an
opinion  that  refers to the  opinion  given on the  Original  Closing  Date and
provides  that it  applies  to the  transactions  consummated  pursuant  to this
Supplement.

                  (d)      Upon  consummation  of the  Additional  Funding,  the
Supplement  Lender shall be deemed a Lender under the Original  Agreement to the
extent of the  Additional  Purchase  Price,  and shall be deemed an Other Lender
with respect to the Original Agreement of each of the Original Lenders.

         4.       By its signature  below,  the Supplement  Lender  acknowledges
that is shall be deemed to be a signatory to the  Registration  Rights Agreement
and the SRFF  Escrow  Agreement  (as that term is  defined  in the Joint  Escrow
Instructions).

         5.       The  Supplement  Lender  hereby  represents  to the Company as
follows:

                  (a)      The  Supplement  Lender has been provided with copies
of all of the Original Agreement and each of the annexes attached thereto;

                  (b)      Each of the representations contained in Section 2 of
the Original  Agreement is  incorporated  herein by  reference,  as if set forth
herein in full and as if each of such representations were made on and as of the
date hereof; and

                  (c)      The  Supplement  Lender's  address  for notices is as
provided opposite the Supplement Lender's signature below.

         6.       The Company  hereby  represents  to the  Supplement  Lender as
follows:

                  (a)      Each of the  representations  and  warranties  of the
Company contained in the Section 3 of the Original Agreement is true and correct
as of the date hereof,  as if each of such  representations  and warranties were
made on and as of the date hereof.

                  (b)      As of the date hereof,  the Company has performed and
complied with all agreements and conditions  required by the Original  Agreement
to be performed or complied with by it at or prior to the date hereof.

                  (c)      There has been no  Material  Adverse  Effect from the
Original Closing Date to and including the Additional Closing Date.

<PAGE>

                  (d)      Except  as  contemplated  hereby  or by the  Lenders'
Consent,  each of the Original  Transaction  Agreements  continues to be in full
force and effect and be applicable,  to the extent  relevant,  to the Additional
Securities and the related Shares.

                  (e)      There  has been no  material  adverse  change  to the
business,  operations  or  financial  condition  or results of  operation of the
Company and its  subsidiaries  taken as a whole from the  Original  Closing Date
through and including the date hereof.

         7.       Except as contemplated hereby or by the Lenders' Consent,  all
terms and conditions of the Original Transaction Agreements remain in full force
and effect.

         IN WITNESS  WHEREOF,  each of the Company  and the Lender has  executed
this Supplement by its duly authorized representative as of the date first above
written.

                                                 WHALEHAVEN CAPITAL FUND LIMITED

________________________________
Address                                          By: /s/ Evan Schemenauer
                                                   -----------------------------
                                                   Name: Evan Schemenauer
Telecopier No. _________________                   Title: Director

________________________________
Jurisdiction of Incorporation
or Organization
                                                 CONSPIRACY ENTERTAINMENT
                                                 HOLDINGS, INC.

                                                 By: /s/ Sirus Ahmadi
                                                   -----------------------------
                                                   Name: Sirus Ahmadi
                                                   Title: President and Chief
                                                          Executive OfficerEXHIBIT 4.8

            THESE  SECURITIES  HAVE NOT BEEN  REGISTERED  UNDER  THE
            SECURITIES  ACT OF 1933, AS AMENDED,  OR THE  SECURITIES
            LAWS OF ANY  STATE  AND MAY NOT BE SOLD OR  OFFERED  FOR
            SALE  IN  THE  ABSENCE  OF  AN  EFFECTIVE   REGISTRATION
            STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR
            OTHER  EVIDENCE  ACCEPTABLE  TO THE  COMPANY  THAT  SUCH
            REGISTRATION IS NOT REQUIRED.

No. 04-01-5                                                       US $ 50,000.00
    -------                                                       --------------
                     CONSPIRACY ENTERTAINMENT HOLDINGS, INC.

        5% SECURED CONVERTIBLE DEBENTURE SERIES 04-01 DUE AUGUST 31, 2006

            THIS DEBENTURE is one of a duly authorized issue of up to $1,100,000
in  Debentures  of  CONSPIRACY   ENTERTAINMENT  HOLDINGS,  INC.,  a  corporation
organized  and  existing  under the laws of the  State of Utah  (the  "Company")
designated as its 5% Secured Convertible Debentures Series 04-01.

            FOR  VALUE  RECEIVED,  the  Company  promises  to pay to  WHALEHAVEN
CAPITAL FUND LIMITED, the registered holder hereof (the "Holder"), the principal
sum of Fifty Thousand and 00/100 Dollars (US $50,000.00) on August 31, 2006 (the
"Maturity  Date") and to pay interest on the principal sum outstanding from time
to time in arrears at the rate of 5% per annum,  accruing  from  October , 2004,
the date of initial  issuance of this Debenture (the "Issue Date"),  on the date
(each, an "Interest Payment Date") which is the earlier of (i) a Conversion Date
(as defined  below) or (ii) the Maturity  Date,  as the case may be.  Accrual of
interest  shall  commence  on the Issue Date and shall  continue  to accrue on a
daily basis until  payment  and/or  conversion  in full of the principal sum has
been made or duly provided for. Additional  provisions  regarding the payment of
interest  are provided in Section 4(D) below (the terms of which shall govern as
if this sentence were not included in this Debenture).

            This  Debenture  is  being  issued  pursuant  to  the  terms  of the
Securities  Purchase  Agreement,  dated  as of  August  31,  2004 as  heretofore
modified (the  "Securities  Purchase  Agreement"),  to which the Company and the
Holder (or the Holder's predecessor in interest) are parties.  Capitalized terms
not  otherwise  defined  herein shall have the meanings  ascribed to them in the
Securities Purchase Agreement.

            This Debenture is subject to the following additional provisions:

            1.    The  Debentures  will  initially  be issued  in  denominations
determined by the Company, but are exchangeable for an equal aggregate principal
amount of Debentures of different denominations,  as reasonably requested by the
Holder  surrendering  the  same.  No  service  charge  will  be  made  for  such
registration or transfer or exchange.

<PAGE>

            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 . The Holder shall  deliver  prior  written
notice to the Company of any proposed  transfer of this  Debenture.  In no event
shall such  transfer by a Holder be for less than  $50,000 of  principal  of the
Debentures  held by the  Holder  or the  remaining  outstanding  balance  of the
Holder's Debentures, whichever is less. 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 is sufficient to evidence that
such  proposed  transfer  complies with the Act and other  applicable  state and
foreign  securities  laws and the terms of the  Securities  Purchase  Agreement.
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.    (i)   At any time on or after the Commencement  Date (as
defined  below)  and  prior  to the  time  this  Debenture  is  paid  in full in
accordance with its terms (including  without limitation after the Maturity Date
and after the occurrence of an Event of Default,  as defined below),  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,  $0.001  par value  ("Common  Stock"),  of the  Company of the
Company at the Conversion Price (as defined below) per share.

                        (ii)  The term "Conversion  Price" means US $0.05 (which
amount is subject to adjustment as provided herein).

                        (iii) The term "Commencement  Date" means the earlier of
(i) the date which is  sixty-five  (65) days after the Issue  Date,  or (ii) the
Effective Date.

                  B.    Conversion  shall be  effectuated  either by delivery to
the Company or by facsimile transmission (as provided in Section 12 hereof) of a
completed  and duly  executed  Notice of  Conversion  (as defined  below) to the
address or facsimile  number provided in the Notice of Exercise (as such address
or  facsimile  number  may  be  revised  by  notice  given  by  the  Company  as
contemplated  by  the  Section  headed  "NOTICES"  in  the  Securities  Purchase
Agreement).  The notice of conversion ("Notice of Conversion") shall be executed
by the Holder of this  Debenture and shall  evidence such Holder's  intention to
convert this Debenture or a specified  portion hereof in the form annexed hereto
as Exhibit A. If paid in Common Stock as contemplated  hereby,  interest accrued
or accruing from the Issue Date to the relevant  Interest  Payment Date shall be

<PAGE>

paid in Common Stock at the  Conversion  Price  applicable  as of such  Interest
Payment  Date.  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 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)  Trading  Days  thereafter.
Facsimile  delivery of the Notice of Conversion shall be accepted by the Company
by hand, mail or courier delivery at the address  specified in said Exhibit A or
at the  facsimile  number  specified  in said Exhibit A (each of such address or
facsimile  number  may be  changed  by notice  given to the Holder in the manner
provided in the Securities Purchase Agreement). Certificates representing Common
Stock upon  conversion  ("Conversion  Certificates")  will be  delivered  to the
Holder at the address  specified in the Notice of  Conversion  (which may be the
Holder's  address  for  notices  as  contemplated  by  the  Securities  Purchase
Agreement or a different  address),  via express courier, by electronic transfer
or  otherwise,  within  three (3) Trading  Days (such  third  Trading  Day,  the
"Delivery  Date") after the date on which the Notice of  Conversion is delivered
to the Company as  contemplated in this paragraph B, and, if interest is paid by
Common Stock,  the Interest  Payment Date.  The Holder shall be deemed to be the
holder of the shares  issuable to it in accordance  with the  provisions of this
Section 4(B) on the Conversion Date.

                  C.    Notwithstanding  any other provision hereof or of any of
the  other  Transaction  Agreements,  in no event  (except  (i) as  specifically
provided  herein as an  exception  to this  provision,  or (ii)  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 portion of this Debenture, or
shall the Company have the obligation to convert such Debenture (and the Company
shall not have the right to pay  interest  hereon in shares of Common  Stock) to
the  extent  that,  after such  conversion  or  issuance  of stock in payment of
interest, 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 other convertible  securities or of the unexercised portion of
warrants or other rights to purchase Common Stock), 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 4.99% 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,  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(C) as if such  transferee  or assignee  were the original  Holder
hereof.  Aside from any  restrictions  imposed by applicable law, 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.

<PAGE>

                  D.    (i)  Subject  to the  terms of  Section  4(C) and to the
other  terms of this  Section  4(D),  interest on the  principal  amount of this
Debenture converted pursuant to a Notice of Conversion shall be due and payable,
at the option of the Company,  in cash or Common  Stock on the Interest  Payment
Date.

                        (ii)  If the interest is to be paid in cash, the Company
shall make such payment  within  three (3) Trading Days of the Interest  Payment
Date.  If the interest is not paid by such third  Trading Day, the interest must
be paid in Common Stock in accordance  with the  provisions  of Section  4(D)(i)
hereof, unless the Holder consents otherwise in each specific instance.

                        (iii) Notwithstanding the foregoing, the Company's right
to issue shares in payment of such interest is applicable if, and only if, there
is then a currently effective  Registration Statement covering the resale of the
shares to be issued to the Holder in payment of such interest.

                        (iv)  The number of shares of Common  Stock to be issued
in payment of such interest shall be determined by dividing the dollar amount of
the  interest to be so paid by the  Conversion  Price on the  relevant  Interest
Payment  Date.  Such Common  Stock  shall be  delivered  to the  Holder,  or per
Holder's  instructions,   on  the  Delivery  Date  for  the  related  Conversion
Certificates pursuant to Section 4(B) hereof.

                        (iv)  If the Company elects to have the interest paid in
cash,  the Company shall make such payment  within three (3) Trading Days of the
Interest  Payment  Date.  If such  payment is not made in cash by such date,  it
shall be deemed that,  subject to the  provisions  of Section  4(C) hereof,  the
Company  has  elected  to pay the  interest  in  stock,  if,  but only  if,  the
Registration Statement covering the shares being issued is effective on the date
such shares are issued.

                  E.    Anything herein to the contrary notwithstanding,  in the
circumstances  contemplated  by said  Section  4(g) of the  Securities  Purchase
Agreement, the Conversion Price and the other terms of the Unconverted Debenture
(as defined  below) may be adjusted in the manner  provided in said Section 4(g)
of the Securities Purchase Agreement. The term "Unconverted Debenture" means the
principal  amount  of this  Debenture  which  has not been  converted  as of the
relevant date.

            5.    A.    Subject  to  the  terms  of  the   Securities   Purchase
Agreement,  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  or where  contemplated  herein  in  shares  of its  Common  Stock,  as
applicable, as herein prescribed. This Debenture and all other Debentures now or
hereafter issued of similar terms are direct obligations of the Company.

<PAGE>

                  B.    Payment of this  Debenture  is secured  pursuant  to the
terms of the Security  Interest  Agreement of even date herewith executed by the
Company,  as debtor,  in favor of the Lender and the Other  Lenders,  as secured
parties. The terms of the Security Interest Agreement are incorporated herein by
reference.

                  C.    This Debenture may not be prepaid in whole or in part at
any time prior to the Maturity  Date,  except with the prior written  consent of
the  Holder  in  each  instance,  which  consent  is in the  sole  and  absolute
discretion  of the  Holder and may be  withheld  for any reason or for no reason
whatsoever.

            6.    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.

            7.    All payments contemplated hereby to be made "in cash" shall be
made in immediately available good funds of United States of America currency by
wire  transfer to an account  designated in writing by the Holder to the Company
(which account may be changed by notice similarly  given).  All payments of cash
and  each  delivery  of  shares  of  Common  Stock  issuable  to the  Holder  as
contemplated hereby shall be made to the Holder at the address last appearing on
the  Debenture  Register of the Company as  designated  in writing by the Holder
from  time to time;  except  that the  Holder  can  designate,  by notice to the
Company,  a different  delivery address for any one or more specific payments or
deliveries.

            8.    If, for as long as this  Debenture  remains  outstanding,  the
Company  enters 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"),  the Company will require,  in the agreements
reflecting such  transaction,  that the surviving  entity  expressly  assume the
obligations of the Company  hereunder.  Notwithstanding  the  foregoing,  if 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,  except that Section 4(C) shall not apply
to such conversion.

<PAGE>

            9.    If, at any time while any  portion of this  Debenture  remains
outstanding,  the Company spins off or otherwise divests itself of a part of its
business  or  operations  or  disposes  of all or of a part of its  assets  in a
transaction (the "Spin Off") in which the Company,  in addition to or in lieu of
any other  compensation  received and retained by the Company for such business,
operations  or  assets,  causes  securities  of  another  entity  (the "Spin Off
Securities") to be issued to security holders of the Company,  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.

            10.   If, at any time while any  portion of this  Debenture  remains
outstanding, the Company effectuates a stock split, combination or reverse stock
split of its Common Stock or issues a dividend on its Common Stock consisting of
shares of Common Stock, the Conversion Price and any other amounts calculated as
contemplated  hereby  or by any of the  other  Transaction  Agreements  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 shares after the record date of such split, the Conversion Price shall be
deemed to be one-half of what it had been 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  shares after the
record date of such reverse split,  the  Conversion  Price 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  shares  after the record date of such  dividend,  the
Conversion Price shall be deemed to be such amount multiplied by a fraction,  of
which the  numerator  is the  number of shares (10 in the  example)  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 in the example).

            11.   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.

<PAGE>

            12.   Any notice  required or permitted  hereunder shall be given in
manner  provided in the Section  headed  "NOTICES"  in the  Securities  Purchase
Agreement, the terms of which are incorporated herein by reference.

            13.   A.  This  Debenture  shall be  governed  by and  construed  in
accordance  with the laws of the  State of New York for  contracts  to be wholly
performed  in such state and without  giving  effect to the  principles  thereof
regarding  the conflict of laws.  Each of the parties  consents to the exclusive
jurisdiction  of the federal  courts whose  districts  encompass any part of the
County of New York or the state  courts of the State of New York  sitting in the
County of New York in connection  with any dispute  arising under this Debenture
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  or to any claim that such venue of the
suit, action or proceeding is improper.  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 this  Debenture.  Nothing in this Section shall affect or limit
any right to serve process in any other manner permitted by law.

                  B.    The  Company and the Holder  acknowledge  and agree that
irreparable  damage would occur in the event that any of the  provisions of this
Debenture  were not performed in accordance  with their  specific  terms or were
otherwise breached.  It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Debenture and to enforce specifically the terms and provisions hereof, this
being in  addition  to any other  remedy to which any of them may be entitled by
law or equity.

            14.   JURY TRIAL  WAIVER.  The Company and the Holder hereby waive a
trial by jury in any action, proceeding or counterclaim brought by either of the
Parties  hereto  against the other in respect of any matter arising out of or in
connection with this Debenture.

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

                  a.    The Company shall default in the payment of principal or
                        interest  on this  Debenture,  or any other  amount  due
                        hereunder,  and,  in any such  instance,  the same shall
                        continue for a period of five (5) Trading Days; or

                  b.    Any of the  representations  or  warranties  made by the
                        Company herein, in the Securities  Purchase Agreement or
                        any of the other  Transaction  Agreements 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

<PAGE>

                        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 ten (10) Trading Days; or

                  d.    The  Company  shall fail to perform or  observe,  in any
                        material  respect,   any  covenant,   term,   provision,
                        condition,  agreement or obligation of the Company under
                        any of the Transaction Agreements 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 (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

                  f.    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

                  g.    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

                  h.    Any money  judgment,  writ or warrant of attachment,  or
                        similar  process  in  excess  of  Two  Hundred  Thousand
                        Dollars  ($200,000) 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  from
                        trading  on, or delisted  from,  the  Principal  Trading
                        Market for in excess of ten (10) Trading Days; or

<PAGE>

                  l.    Any event defined in another provision of this Debenture
                        as an Event of Default shall have occurred.

If an Event of Default shall have occurred, 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
(and the Maturity Date shall be accelerated  accordingly),  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.

            16.   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.

                   [Balance of page intentionally left blank]

<PAGE>

            17.   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 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
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: October ____, 2004

                                         CONSPIRACY ENTERTAINMENT HOLDINGS, INC.

                                         By: /s/ Sirus Ahmadi
                                           ----------------------------------

                                           Sirus Ahmadi
                                           ----------------------------------
                                            (Print Name)

                                           President and Chief Executive Officer
                                           -------------------------------------
                                           (Title)

<PAGE>

                                    EXHIBIT A

<PAGE>

                              NOTICE OF CONVERSION
                                       OF
        5% SECURED CONVERTIBLE DEBENTURE SERIES 04-01 DUE AUGUST 31, 2006
   (To be Executed by the Registered Holder in Order to Convert the Debenture)

TO:      CONSPIRACY ENTERTAINMENT HOLDINGS, INC.
         612 Santa Monica Boulevard
         Santa Monica, CA 90401
         Attn: CEO                                      VIA FAX:  (310) 260-1450
                                                        ------------------------

FROM: _________________________________________________ ("Holder")

DATE: _________________________________________________ (the "Conversion Date")

RE:   Conversion of $___________ principal amount (the "Converted Debenture") of
      the 5% Secured  Convertible  Debenture Series 04-01-__ Due August 31, 2006
      (the  "Debenture")  of  CONSPIRACY   ENTERTAINMENT   HOLDINGS,  INC.  (the
      "Company") into _______________ shares (the "Conversion Shares") of Common
      Stock (defined below)

      The captioned  Holder hereby gives notice to the Company,  pursuant to the
captioned  Debenture  that the Holder elects to convert the Converted  Debenture
into fully paid and non-assessable shares of Common Stock, $0.001 par value (the
"Common Stock"),  of the Company as of the Conversion Date specified above. Said
conversion shall be based on the following  Conversion Price (check one and fill
in blank)

      __    $__________,  representing the original Conversion Price (as defined
            in the Debenture)

            $__________,  representing the original Conversion Price (as defined
            in the Debenture), adjusted in accordance with the provisions of the
            Debenture.

<PAGE>

            Based on this  Conversion  Price,  the number of  Conversion  Shares
            indicated above should be issued in the following name(s):

<PAGE>

                  Name and Record Address                     Conversion Shares

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

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

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

      It is the intention of the Holder to comply with the provisions of Section
4(C) of the Debenture  regarding certain limits on the Holder's right to convert
thereunder. Based on the analysis on the attached Worksheet Schedule, the Holder
believe this  conversion  complies  with the  provisions  of said Section  4(C).
Nonetheless, to the extent that, pursuant to the conversion effected hereby, the
Holder would have more shares than  permitted  under said  Section,  this notice
should be amended and revised, ab initio, to refer to the conversion which would
result in the issuance of shares consistent with such provision.  Any conversion
above such amount is hereby deemed void and revoked.

      As contemplated by the Debenture,  this Notice of Conversion is being sent
by facsimile to the telecopier number and officer indicated above.

      If this  Notice  of  Conversion  represents  the  full  conversion  of the
outstanding  balance  of the  Converted  Debenture,  the  Holder  either (1) has
previously surrendered the Converted Debenture, duly endorsed, to the Company or
(2) will surrender (or cause to be surrendered)  the Converted  Debenture,  duly
endorsed,  to the  Company at the  address  indicated  above by express  courier
within five (5) Trading Days after  delivery or facsimile  transmission  of this
Notice of Conversion.

      The certificates  representing the Conversion Shares should be transmitted
by the Company to the Holder (check one)

      _     via express courier or

      _     by electronic transfer (DTC)

within the time contemplated by the Debenture and Securities Purchase Agreement
after receipt of this Notice of Conversion (by facsimile transmission or
otherwise) to:

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

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

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

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

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

      The  Holder  has  determined  that  accrued  but  unpaid  interest  on the
Converted  Debenture  through  the  Conversion  Date  is   $____________________
(subject to further  accrual if payment not timely made). As contemplated by the
Debenture,  the Company should also pay all such accrued but unpaid  interest on
the Converted Debenture to the Holder.

<PAGE>

            --    If the Company elects to pay such interest in Common Stock, as
      contemplated  by and  subject to the  provisions  of the  Debenture,  such
      shares  should be issued in the name of the  Holder and  delivered  in the
      same manner as, and together with, the Conversion Shares.

            --    If the Company  elects or is required to pay the interest paid
      in cash, such payment should be made by wire transfer as follows:

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

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

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

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

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

                                            ----------------------------------
                                            (Print name of Holder)

                                            By:_______________________________
                                               (Signature of Authorized Person)

                                            ----------------------------------
                                                  (Printed Name and Title)

<PAGE>

                              NOTICE OF CONVERSION
                               WORKSHEET SCHEDULE

1.    Current   Common  Stock  holdings  of  Holder  and
      Affiliates                                              ______________

2.    Shares  to  be  issued  on   current   conversion(1)    ______________

3.    Other  shares  to  be  issued  on  other   current
      conversion(s)   and  other  current   exercise(s)(2)    ______________

4.    Other shares  eligible to be acquired  within next
      60 days without restriction                             ______________

5.    Total [sum of Lines 1 through 4]                        ______________

6.    Outstanding shares of Common Stock(3)                   ______________

7.    Adjustments to Outstanding

      a.    Shares known to Holder as previously  issued to
            Holder or others but not included in Line 6       ______________

      b.    Shares   to  be  issued   per   Line(s) 2 and 3   ______________

      c.    Total Adjustments [Lines 7a and 7b]               ______________

8.    Total  Adjusted  Outstanding  [Lines  6  plus  7c]      ______________

9.    Holder's  Percentage  [Line 5  divided  by Line 8]      ______________%
      [Note:  Line  9 not  to  be  above 4.99%]

----------
(1)   Includes  conversion of stated value and assumes  interest will be paid in
Common Stock at the Conversion Price.
(2)   Includes   shares   issuable  on  conversion  of  convertible   securities
(including  assumed  payment of  interest  or  dividends)  or  exercise of other
rights, including other warrants or options
(3)   Based on latest SEC filing by Company or information provided by executive
officer of Company, counsel to Company or transfer agent.

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