Document:

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                                                                     Exhibit 4.5

                     IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

                                  May 24, 2006

Transfer Online, Inc.
317 SW Adler Street, 2nd Floor
Portland, OR 97204

         RE: JAG MEDIA HOLDINGS, INC.

Ladies and Gentlemen:

         Reference is made to that certain Securities Purchase Agreement (the
"Securities Purchase Agreement") of even date herewith by and between JAG Media
Holdings, Inc., a Nevada corporation (the "Company"), and the Buyers set forth
on Schedule I attached thereto (collectively the "Buyers") and that certain
convertible debenture (the "Prior Debenture") issued to Cornell Capital
Partners, LP ("Cornell" or a "Buyer") in exchange for a Promissory Note issued
January 25, 2005 by the Company to Cornell. Pursuant to the Securities Purchase
Agreement, the Company shall sell to the Buyers, an the Buyers shall purchase
from the Company, convertible debentures in the aggregate principal amount of
Two Million Two Hundred Fifty Thousand Dollars ($2,250,000), plus accrued
interest (the "Convertible Debentures"), which are convertible into shares of
the Company's common stock, par value $.00001 per share (the "Common Stock"), at
the Buyers discretion. (The Prior Debenture and the Convertible Debentures are
collectively referred to herein as the "Debentures"). The Company has also
issued to the Buyers warrants to purchase up to 12,000,000 shares of Common
Stock, at the Buyers' discretion (collectively, the "Warrant"). These
instructions relate to the following stock or proposed stock issuances or
transfers:

         1.       Shares of Common Stock to be issued to the Buyers upon
                  conversion of the Debentures ("Conversion Shares") plus the
                  shares of Common Stock to be issued to the Buyers upon
                  conversion of accrued interest and liquidated damages into
                  Common Stock (the "Interest Shares").

         2.       Up to 12,000,000 shares of Common Stock to be issued to the
                  Buyers upon exercise of the Warrant (the "Warrant Shares").

<PAGE>

         This letter shall serve as our irrevocable authorization and direction
to Transfer Online, Inc. (the "Transfer Agent") to do the following:

         1.       Conversion Shares and Warrant Shares.

                  a.   Instructions Applicable to Transfer Agent. With respect
                       to the Conversion Shares, Warrant Shares and the Interest
                       Shares, the Transfer Agent shall issue the Conversion
                       Shares, Warrant Shares and the Interest Shares to the
                       Buyers from time to time upon delivery to the Transfer
                       Agent of a properly completed and duly executed
                       Conversion Notice (the "Conversion Notice") in the form
                       attached as Exhibit A to the Debentures, or a properly
                       completed and duly executed Exercise Notice (the
                       "Exercise Notice") in the form attached as Exhibit A to
                       the Warrant, delivered to the Transfer Agent by David
                       Gonzalez, Esq. (the "Escrow Agent") on behalf of the
                       Company. Upon receipt of a Conversion Notice or an
                       Exercise Notice, the Transfer Agent shall within three
                       (3) Trading Days thereafter (i) issue and surrender to a
                       common carrier for overnight delivery to the address as
                       specified in the Conversion Notice or the Exercise
                       Notice, a certificate, registered in the name of the
                       Buyer or its designees, for the number of shares of
                       Common Stock to which the Buyer shall be entitled as set
                       forth in the Conversion Notice or Exercise Notice or (ii)
                       provided the Transfer Agent is participating in The
                       Depository Trust Company ("DTC") Fast Automated
                       Securities Transfer Program, upon the request of the
                       Buyers, credit such aggregate number of shares of Common
                       Stock to which the Buyers shall be entitled to the
                       Buyer's or their designees' balance account with DTC
                       through its Deposit Withdrawal At Custodian ("DWAC")
                       system provided the Buyer causes its ---- bank or broker
                       to initiate the DWAC transaction. For purposes hereof
                       "Trading Day" shall mean any day on which the Nasdaq
                       Market is open for customary trading.

                  b.   The Company hereby confirms to the Transfer Agent and the
                       Buyer that certificates representing the Conversion
                       Shares and the Warrant Shares shall not bear any legend
                       restricting transfer and should not be subject to any
                       stop-transfer restrictions and shall otherwise be freely
                       transferable on the books and records of the Company;
                       provided that counsel to the Company delivers (i) the
                       Notice of Effectiveness set forth in Exhibit I attached
                       hereto and (ii) an opinion of counsel in the form set
                       forth in Exhibit II attached hereto, and that if the
                       Conversion Shares, Warrant Shares and the Interest Shares
                       are not registered for sale under the Securities Act of
                       1933, as amended, then the certificates for the
                       Conversion Shares, Warrant Shares and Interest Shares
                       shall bear the following legend:

                      "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
                      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
                      AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
                      SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
                      BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
                      ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
                      SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
                      OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF
                      COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY,
                      THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
                      APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT
                      TO RULE 144 UNDER SAID ACT."

                                       2
<PAGE>

                  c.   In the event that counsel to the Company fails or refuses
                       to render an opinion as required to issue the Conversion
                       Shares or the Warrant Shares in accordance with the
                       preceding paragraph (either with or without restrictive
                       legends, as applicable), then the Company irrevocably and
                       expressly authorizes counsel to the Buyer to render such
                       opinion. The Transfer Agent shall accept and be entitled
                       to rely on such opinion for the purposes of issuing the
                       Conversion Shares.

                  d.   Instructions Applicable to Escrow Agent. Upon the Escrow
                       Agent's receipt of a properly completed Conversion Notice
                       or Exercise Notice and the Aggregate Exercise Price (as
                       defined in the Warrant), the Escrow Agent shall, within
                       one (1) Trading Day thereafter, send to the Transfer
                       Agent the Conversion Notice or Exercise Notice as the
                       case may be, which shall constitute an irrevocable
                       instruction to the Transfer Agent to process such
                       Conversion Notice or Exercise Notice in accordance with
                       the terms of these instructions.

         2.       All Shares.

                  a.   The Transfer Agent shall reserve for issuance to the
                       Buyers a minimum of 54,000,000 Conversion Shares and
                       12,000,000 Warrant Shares. All such shares shall remain
                       in reserve with the Transfer Agent until the Buyers
                       provides the Transfer Agent instructions that the shares
                       or any part of them shall be taken out of reserve and
                       shall no longer be subject to the terms of these
                       instructions.

                  b.   The Company hereby irrevocably appoints the Escrow Agent
                       as a duly authorized agent of the Company for the
                       purposes of authorizing the Transfer Agent to process
                       issuances and transfers specifically contemplated herein.

                  c.   The Transfer Agent shall rely exclusively on the
                       Conversion Notice, the Escrow Notice, or the Exercise
                       Notice and shall have no liability for relying on such
                       instructions. Any Conversion Notice, Escrow Notice, or
                       Exercise Notice delivered hereunder shall constitute an
                       irrevocable instruction to the Transfer Agent to process
                       such notice or notices in accordance with the terms
                       thereof. Such notice or notices may be transmitted to the
                       Transfer Agent by facsimile or any commercially
                       reasonable method.

                  d.   The Company hereby confirms to the Transfer Agent and the
                       Buyers that no instructions other than as contemplated
                       herein will be given to Transfer Agent by the Company
                       with respect to the matters referenced herein. The
                       Company hereby authorizes the Transfer Agent, and the
                       Transfer Agent shall be obligated, to disregard any
                       contrary instructions received by or on behalf of the
                       Company.

                                       3
<PAGE>

         3.       SUBSEQUENT SALE OR TRANSFER OF THE CONVERSION SHARES OR
                  WARRANT SHARES.

                  a.   The Transfer Agent shall promptly transfer Conversion
                       Shares or Warrant Shares from the Buyer to any purchaser
                       or transferee promptly upon receipt of written notice
                       from the Buyer or its counsel. To the extent that the
                       Conversion Shares or Warrant Shares are not subject to an
                       effective registration statement but are eligible for
                       resale by the Buyer under an exemption from the
                       registration requirements of the Securities Act under
                       Rule 144 or other available exemption, then the Company,
                       within 2 business day of notice of the Buyer's proposed
                       sale or transfer, shall deliver a legal opinion on behalf
                       of the Buyer to the Transfer Agent to effect such
                       transfer without a restrictive legend.

                  b.   In the event that counsel to the Company refuses, or
                       fails, to timely render an opinion as may be required by
                       the Transfer Agent to affect a transfer of the Conversion
                       Shares or Warrant Shares as set forth above, then the
                       Company irrevocably and expressly authorizes counsel to
                       the Buyer to render such opinion. The Transfer Agent
                       shall accept and rely on such opinion for the purpose of
                       transferring the Conversion Shares or Warrant Shares in
                       accordance with the forgoing.

                  e.   The Company hereby confirms to the Transfer Agent and the
                       Buyer that no instructions other than as contemplated
                       herein will be given to Transfer Agent by the Company
                       with respect to the matters referenced herein. The
                       Company hereby authorizes the Transfer Agent, and the
                       Transfer Agent shall be obligated, to disregard any
                       contrary instructions received by or on behalf of the
                       Company.

         Certain Notice Regarding the Escrow Agent. The Company and the Transfer
Agent hereby acknowledge that the Escrow Agent is general counsel to the Buyers,
a partner of the general partner of the Buyers and counsel to the Buyers in
connection with the transactions contemplated and referred herein. The Company
and the Transfer Agent agree that in the event of any dispute arising in
connection with this Agreement or otherwise in connection with any transaction
or agreement contemplated and referred herein, the Escrow Agent shall be
permitted to continue to represent the Buyers and neither the Company nor the
Transfer Agent will seek to disqualify such counsel.

           The Company hereby agrees that it shall not replace the Transfer
Agent as the Company's transfer agent without the prior written consent of the
Buyers.

         Any attempt by Transfer Agent to resign as the Company's transfer agent
hereunder shall not be effective until such time as the Company provides to the
Transfer Agent written notice that a suitable replacement has agreed to serve as
transfer agent and to be bound by the terms and conditions of these Irrevocable
Transfer Agent Instructions.

                                       4
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         The Company and the Transfer Agent hereby acknowledge and confirm that
complying with the terms of this Agreement does not and shall not prohibit the
Transfer Agent from satisfying any and all fiduciary responsibilities and duties
it may owe to the Company.

         The Company and the Transfer Agent acknowledge that the Buyers is
relying on the representations and covenants made by the Company and the
Transfer Agent hereunder and are a material inducement to the Buyers purchasing
convertible debentures under the Securities Purchase Agreement. The Company and
the Transfer Agent further acknowledge that without such representations and
covenants of the Company and the Transfer Agent made hereunder, the Buyers would
not purchase the Debentures.

         Each party hereto specifically acknowledges and agrees that in the
event of a breach or threatened breach by a party hereto of any provision
hereof, the Buyers will be irreparably damaged and that damages at law would be
an inadequate remedy if these Irrevocable Transfer Agent Instructions were not
specifically enforced. Therefore, in the event of a breach or threatened breach
by a party hereto, including, without limitation, the attempted termination of
the agency relationship created by this instrument, the Buyers shall be
entitled, in addition to all other rights or remedies, to an injunction
restraining such breach, without being required to show any actual damage or to
post any bond or other security, and/or to a decree for specific performance of
the provisions of these Irrevocable Transfer Agent Instructions.

         In consideration of the Transfer Agent acting as a party to this
agreement, Company assumes full responsibility and agrees to indemnify and save
harmless the Transfer Agent from and against all liabilities, losses, damages,
costs, charges, counsel fees and other expenses of every kind, nature and
character which the Transfer Agent may incur as a result of acting as the
Company's transfer agent pursuant to this agreement; provided, however, that the
provision of this paragraph shall not apply to such liabilities, losses,
damages, costs, charges, counsel fees or other expenses to the extent they have
resulted primarily from the gross negligence or willful misconduct of the
Transfer Agent.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       5
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this letter agreement
regarding Irrevocable Transfer Agent Instructions to be duly executed and
delivered as of the date first written above.

                                  COMPANY:

                                  JAG MEDIA HOLDINGS, INC.

                                  By: _________________________________________
                                  Name: Thomas J. Mazzarisi
                                  Title: Chairman and Chief Executive Officer

                                  _____________________________________________
                                  David Gonzalez, Esq.

TRANSFER ONLINE, INC.

By: ____________________________________________

Name: __________________________________________

Title: _________________________________________

                                       6
<PAGE>

                                   SCHEDULE I

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>

                                                                               ADDRESS/FACSIMILE
NAME                                    SIGNATURE                              NUMBER OF BUYERS
----                                    ---------                              ----------------
<S>                                     <C>                                <C>
Cornell Capital Partners, LP            By:  Yorkville Advisors, LLC       101 Hudson Street - Suite 3700
                                        Its: General Partner               Jersey City, NJ  07303
                                                                           Facsimile: (201) 985-8266

                                        By:______________________
                                        Name: Mark Angelo
                                        Its:  Portfolio Manager

</TABLE>

                                  SCHEDULE I-1

<PAGE>

                                    EXHIBIT I

                   TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

_________, 200_

________

Attention:

RE: JAG MEDIA HOLDINGS, INC.

Ladies and Gentlemen:

         We are counsel to JAG Media Holdings, Inc., (the "Company"), and have
represented the Company in connection with that certain Securities Purchase
Agreement, dated as of ________________ ____, 200_ (the "Securities Purchase
Agreement"), entered into by and among the Company and the Buyers set forth on
Schedule I attached thereto (collectively the "Buyers") pursuant to which the
Company has agreed to sell to the Buyers secured convertible debentures, which
shall be convertible into shares (the "Conversion Shares") of the Company's
common stock, par value $.00001 per share (the "Common Stock"), in accordance
with the terms of the Securities Purchase Agreement. Pursuant to the Securities
Purchase Agreement, the Company also has entered into a Registration Rights
Agreement, dated as of ______________ ___, 200_, with the Buyers (the "Investor
Registration Rights Agreement") pursuant to which the Company agreed, among
other things, to register the Conversion Shares under the Securities Act of
1933, as amended (the "1933 Act"). In connection with the Company's obligations
under the Securities Purchase Agreement and the Registration Rights Agreement,
on _______, 200_, the Company filed a Registration Statement (File No.
___-_________) (the "Registration Statement") with the Securities and Exchange
Commission (the "SEC") relating to the sale of the Conversion Shares.

         In connection with the foregoing, we advise the Transfer Agent that a
member of the SEC's staff has advised us by telephone that the SEC has entered
an order declaring the Registration Statement effective under the 1933 Act at
____ P.M. on __________, 200_ and we have no knowledge, after telephonic inquiry
of a member of the SEC's staff, that any stop order suspending its effectiveness
has been issued or that any proceedings for that purpose are pending before, or
threatened by, the SEC and the Conversion Shares are available for sale under
the 1933 Act pursuant to the Registration Statement.

                                  EXHIBIT I-1
<PAGE>

         The Buyers has confirmed it shall comply with all securities laws and
regulations applicable to it including applicable prospectus delivery
requirements upon sale of the Conversion Shares.

                                     Very truly yours,

                                     By: ___________________________________

                                  EXHIBIT I-2
<PAGE>

                                   EXHIBIT II

                   TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

                                 FORM OF OPINION

________________ 200_

VIA FACSIMILE AND REGULAR MAIL

________

Attention:

         RE: JAG MEDIA HOLDINGS, INC.

Ladies and Gentlemen:

         We have acted as special counsel to JAG Media Holdings, Inc. (the
"Company"), in connection with the registration of ___________shares (the
"Shares") of its common stock with the Securities and Exchange Commission (the
"SEC"). We have not acted as your counsel. This opinion is given at the request
and with the consent of the Company.

         In rendering this opinion we have relied on the accuracy of the
Company's Registration Statement on Form SB-2, as amended (the "Registration
Statement"), filed by the Company with the SEC on _________ ___, 200_. The
Company filed the Registration Statement on behalf of certain selling
stockholders (the "Selling Stockholders"). This opinion relates solely to the
Selling Shareholders listed on Exhibit "A" hereto and number of Shares set forth
opposite such Selling Stockholders' names. The SEC declared the Registration
Statement effective on __________ ___, 200_.

         We understand that the Selling Stockholders acquired the Shares in a
private offering exempt from registration under the Securities Act of 1933, as
amended. Information regarding the Shares to be sold by the Selling Shareholders
is contained under the heading "Selling Stockholders" in the Registration
Statement, which information is incorporated herein by reference. This opinion
does not relate to the issuance of the Shares to the Selling Stockholders. The
opinions set forth herein relate solely to the sale or transfer by the Selling
Stockholders pursuant to the Registration Statement under the Federal laws of
the United States of America. We do not express any opinion concerning any law
of any state or other jurisdiction.

         In rendering this opinion we have relied upon the accuracy of the
foregoing statements.

                                   EXHIBIT II

<PAGE>

         Based on the foregoing, it is our opinion that the Shares have been
registered with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, and that ________ may remove the restrictive legends
contained on the Shares. This opinion relates solely to the number of Shares set
forth opposite the Selling Stockholders listed on Exhibit "A" hereto.

         This opinion is furnished to Transfer Agent specifically in connection
with the sale or transfer of the Shares, and solely for your information and
benefit. This letter may not be relied upon by Transfer Agent in any other
connection, and it may not be relied upon by any other person or entity for any
purpose without our prior written consent. This opinion may not be assigned,
quoted or used without our prior written consent. The opinions set forth herein
are rendered as of the date hereof and we will not supplement this opinion with
respect to changes in the law or factual matters subsequent to the date hereof.

Very truly yours,

                                  EXHIBIT II-2
<PAGE>

                                    EXHIBIT A

                         (LIST OF SELLING STOCKHOLDERS)

NAME:                                     NO. OF SHARES:
---------------------------------------   -------------------------------------

                                   EXHIBIT A<PAGE>

                                                                     Exhibit 4.6

                                                             DATED: MAY 24, 2006

         NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS
         CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
         COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
         AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
         AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
         SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
         SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
         TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
         SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

No. CCP-2                                                             $1,250,000

                            JAG MEDIA HOLDINGS, INC.

                          SECURED CONVERTIBLE DEBENTURE

                                DUE: MAY 24, 2009

         This Secured Convertible Debenture (the "Debenture") is issued by JAG
MEDIA HOLDINGS, INC., a Nevada corporation (the "Obligor"), to CORNELL CAPITAL
PARTNERS, LP (the "Holder"), pursuant to that certain Securities Purchase
Agreement (the "Securities Purchase Agreement") of even date herewith.

         FOR VALUE RECEIVED, the Obligor hereby promises to pay to the Holder or
its successors and assigns the principal sum of One Million Two Hundred Fifty
Thousand Dollars ($1,250,000) together with accrued but unpaid interest on or
before May 24, 2009 (the "Maturity Date") in accordance with the following
terms:

         Interest. Interest shall accrue on the outstanding principal balance
hereof at an annual rate equal to ten percent (10%). Interest shall be
calculated on the basis of a 365-day year and the actual number of days elapsed,
to the extent permitted by applicable law. Interest hereunder will be paid to
the Holder or its assignee (as defined in Section 5) in whose name this
Debenture is registered on the records of the Obligor regarding registration and
transfers of Debentures (the "Debenture Register").

         Right of Redemption. The Obligor at its option shall have the right to
redeem a portion or all amounts outstanding under this Debenture prior to the
Maturity Date provided that the Closing Bid Price of the of the Obligor's Common
Stock, as reported by Bloomberg, LP, is less than the Fixed Conversion Price at
the time of the Redemption Notice (as defined herein). The Obligor shall pay an
amount equal to the principal amount being redeemed plus a redemption premium
("Redemption Premium") equal to ten percent (10%) of the principal amount being
redeemed, and accrued interest, (collectively referred to as the "Redemption
Amount"). In order to make a redemption, the Obligor shall first provide written
notice to the Holder of its intention to make a redemption (the "Redemption
Notice") setting forth the amount of principal it desires to redeem. After
receipt of the Redemption Notice the Holder shall have three (3) business days
to elect to convert all or any portion of this Debenture, subject to the
limitations set forth in Section 3(b)(i). Upon the expiration of this three (3)
business day period, the Obligor shall deliver to the Holder the Redemption
Amount with respect to the principal amount redeemed after giving effect to
conversions effected during the three (3) business day period.

                                       1
<PAGE>

         Security Agreements. This Debenture is initially secured by a Security
Agreement (the "Security Agreement") of even date herewith between the Obligor
and the Holder, and Security Agreement (the "Subsidiary Security Agreement") of
even date herewith between Jag Media LLC, a wholly owned subsidiary of the
Obligor, and the Holder,.

         This Debenture is subject to the following additional provisions:

         Section 1. This Debenture is exchangeable for an equal aggregate
principal amount of Debentures of different authorized denominations, as
requested by the Holder surrendering the same. No service charge will be made
for such registration of transfer or exchange.

         Section 2. Events of Default.

         (a) An "Event of Default", wherever used herein, means any one of the
following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

             (i) Any default in the payment of the principal of, interest on or
other charges in respect of this Debenture, free of any claim of subordination,
as and when the same shall become due and payable (whether on a Conversion Date
or the Maturity Date or by acceleration or otherwise);

             (ii) The Obligor or any subsidiary of the Obligor shall commence,
or there shall be commenced against the Obligor or any subsidiary of the Obligor
under any applicable bankruptcy or insolvency laws as now or hereafter in effect
or any successor thereto, or the Obligor or any subsidiary of the Obligor
commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to the
Obligor or any subsidiary of the Obligor or there is commenced against the
Obligor or any subsidiary of the Obligor any such bankruptcy, insolvency or
other proceeding which remains undismissed for a period of 61 days; or the
Obligor or any subsidiary of the Obligor is adjudicated insolvent or bankrupt;
or any order of relief or other order approving any such case or proceeding is
entered; or the Obligor or any subsidiary of the Obligor suffers any appointment
of any custodian, private or court appointed receiver or the like for it or any
substantial part of its property which continues undischarged or unstayed for a
period of sixty one (61) days; or the Obligor or any subsidiary of the Obligor
makes a general assignment for the benefit of creditors; or the Obligor or any
subsidiary of the Obligor shall fail to pay, or shall state that it is unable to
pay, or shall be unable to pay, its debts generally as they become due; or the
Obligor or any subsidiary of the Obligor shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its
debts; or the Obligor or any subsidiary of the Obligor shall by any act or
failure to act expressly indicate its consent to, approval of or acquiescence in
any of the foregoing; or any corporate or other action is taken by the Obligor
or any subsidiary of the Obligor for the purpose of effecting any of the
foregoing;

                                       2
<PAGE>

             (iii) The Obligor or any subsidiary of the Obligor shall default in
any of its obligations under any other debenture or any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other
instrument under which there may be issued, or by which there may be secured or
evidenced any indebtedness for borrowed money or money due under any long term
leasing or factoring arrangement of the Obligor or any subsidiary of the Obligor
in an amount exceeding $100,000, whether such indebtedness now exists or shall
hereafter be created and such default shall result in such indebtedness becoming
or being declared due and payable prior to the date on which it would otherwise
become due and payable;

             (iv) The Common Stock shall cease to be quoted for trading or
listing for trading on either the Pink Sheets, or if then listed on the Nasdaq
OTC Bulletin Board ("OTC"), Nasdaq Capital Market, New York Stock Exchange,
American Stock Exchange or the Nasdaq National Market (each, a "Subsequent
Market") shall cease to be quoted for trading or listing on such Subsequent
Market and shall not again be quoted or listed for trading on a Subsequent
Market within five (5) Trading Days of such delisting;

             (v) The Obligor or any subsidiary of the Obligor shall be a party
to any Change of Control Transaction (as defined in Section 5);

             (vi) The Obligor shall fail to file the Underlying Shares
Registration Statement (as defined in Section 5) with the Commission (as defined
in Section 5), or the Underlying Shares Registration Statement shall not have
been declared effective by the Commission, in each case within the time periods
set forth in the Investor Registration Rights Agreement ("Registration Rights
Agreement") of even date herewith between the Obligor and the Holder;

             (vii) If the effectiveness of the Underlying Shares Registration
Statement lapses for any reason or the Holder shall not be permitted to resell
the shares of Common Stock underlying this Debenture under the Underlying Shares
Registration Statement, in either case, for more than five (5) consecutive
Trading Days or an aggregate of eight Trading Days (which need not be
consecutive Trading Days) exclusive of periods when sales of the Underlying
Shares may not be made pursuant to the Underlying Shares Registration Statement
as a result of the Obligor being required to file post-effective amendments
thereto;

             (viii) The Obligor shall fail for any reason to deliver Common
Stock certificates to a Holder prior to the fifth (5th) Trading Day after a
Conversion Date or the Obligor shall provide notice to the Holder, including by
way of public announcement, at any time, of its intention not to comply with
requests for conversions of this Debenture in accordance with the terms hereof;

             (ix) The Obligor shall fail for any reason to deliver the payment
in cash pursuant to a Buy-In (as defined herein) within three (3) days after
notice is claimed delivered hereunder;

                                       3
<PAGE>

             (x) The Obligor shall fail to observe or perform any other
covenant, agreement or warranty contained in, or otherwise commit any breach or
default of any provision of this Debenture (except as may be covered by Section
2(a)(i) through 2(a)(ix) hereof) or any Transaction Document (as defined in
Section 5) which is not cured with in the time prescribed;

          (b) During the time that any portion of this Debenture is outstanding,
if any Event of Default has occurred, the full principal amount of this
Debenture, together with interest and other amounts owing in respect thereof, to
the date of acceleration shall become at the Holder's election, immediately due
and payable in cash, provided however, the Holder may request (but shall have no
obligation to request) payment of such amounts in Common Stock of the Obligor.
In addition to any other remedies, the Holder shall have the right (but not the
obligation) to convert this Debenture at any time after (x) an Event of Default
or (y) the Maturity Date at the Conversion Price then in-effect. The Holder need
not provide and the Obligor hereby waives any presentment, demand, protest or
other notice of any kind, and the Holder may immediately and without expiration
of any grace period enforce any and all of its rights and remedies hereunder and
all other remedies available to it under applicable law. Such declaration may be
rescinded and annulled by Holder at any time prior to payment hereunder. No such
rescission or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon. Upon an Event of Default, notwithstanding any
other provision of this Debenture or any Transaction Document, the Holder shall
have no obligation to comply with or adhere to any limitations, if any, on the
conversion of this Debenture or the sale of the Underlying Shares.

         Section 3. Conversion.

         (a) Conversion at Option of Holder.

             (i) This Debenture shall be convertible into shares of Common Stock
at the option of the Holder, in whole or in part at any time and from time to
time, after the Original Issue Date (as defined in Section 5) (subject to the
limitations on conversion set forth in Section 3(b) hereof). The number of
shares of Common Stock issuable upon a conversion hereunder equals the quotient
obtained by dividing (x) the outstanding amount of this Debenture to be
converted by (y) the Conversion Price (as defined in Section 3(c)(i)). The
Obligor shall deliver Common Stock certificates to the Holder prior to the Fifth
(5th) Trading Day after a Conversion Date.

             (ii) Notwithstanding anything to the contrary contained herein, if
on any Conversion Date: (1) the number of shares of Common Stock at the time
authorized, unissued and unreserved for all purposes, or held as treasury stock,
is insufficient to pay principal and interest hereunder in shares of Common
Stock; (2) the Common Stock is not listed or quoted for trading on the Pink
Sheet or on a Subsequent Market; (3) the Obligor has failed to timely satisfy
its conversion, then, at the option of the Holder, the Obligor, in lieu of
delivering shares of Common Stock pursuant to Section 3(a)(i), shall deliver,
within three (3) Trading Days of each applicable Conversion Date, an amount in
cash equal to the product of the outstanding principal amount to be converted
plus any interest due therein divided by the Conversion Price, and multiplied by
the highest closing price of the stock from date of the conversion notice till
the date that such cash payment is made.

                                       4
<PAGE>

         Further, if the Obligor shall not have delivered any cash due in
respect of conversion of this Debenture or as payment of interest thereon by the
fifth (5th) Trading Day after the Conversion Date, the Holder may, by notice to
the Obligor, require the Obligor to issue shares of Common Stock pursuant to
Section 3(c), except that for such purpose the Conversion Price applicable
thereto shall be the lesser of the Conversion Price on the Conversion Date and
the Conversion Price on the date of such Holder demand. Any such shares will be
subject to the provisions of this Section.

             (iii) The Holder shall effect conversions by delivering to the
Obligor a completed notice in the form attached hereto as Exhibit A (a
"Conversion Notice"). The date on which a Conversion Notice is delivered is the
"Conversion Date." Unless the Holder is converting the entire principal amount
outstanding under this Debenture, the Holder is not required to physically
surrender this Debenture to the Obligor in order to effect conversions.
Conversions hereunder shall have the effect of lowering the outstanding
principal amount of this Debenture plus all accrued and unpaid interest thereon
in an amount equal to the applicable conversion. The Holder and the Obligor
shall maintain records showing the principal amount converted and the date of
such conversions. In the event of any dispute or discrepancy, the records of the
Holder shall be controlling and determinative in the absence of manifest error.

         (b) Certain Conversion Restrictions.

             (i) A Holder may not convert this Debenture or receive shares of
Common Stock as payment of interest hereunder to the extent such conversion or
receipt of such interest payment would result in the Holder, together with any
affiliate thereof, beneficially owning (as determined in accordance with Section
13(d) of the Exchange Act and the rules promulgated thereunder) in excess of
4.99% of the then issued and outstanding shares of Common Stock, including
shares issuable upon conversion of, and payment of interest on, this Debenture
held by such Holder after application of this Section. Since the Holder will not
be obligated to report to the Obligor the number of shares of Common Stock it
may hold at the time of a conversion hereunder, unless the conversion at issue
would result in the issuance of shares of Common Stock in excess of 4.99% of the
then outstanding shares of Common Stock without regard to any other shares which
may be beneficially owned by the Holder or an affiliate thereof, the Holder
shall have the authority and obligation to determine whether the restriction
contained in this Section will limit any particular conversion hereunder and to
the extent that the Holder determines that the limitation contained in this
Section applies, the determination of which portion of the principal amount of
this Debenture is convertible shall be the responsibility and obligation of the
Holder. If the Holder has delivered a Conversion Notice for a principal amount
of this Debenture that, without regard to any other shares that the Holder or
its affiliates may beneficially own, would result in the issuance in excess of
the permitted amount hereunder, the Obligor shall notify the Holder of this fact
and shall honor the conversion for the maximum principal amount permitted to be
converted on such Conversion Date in accordance with the periods described in
Section 3(a)(i) and, at the option of the Holder, either retain any principal
amount tendered for conversion in excess of the permitted amount hereunder for
future conversions or return such excess principal amount to the Holder. The
provisions of this Section may be waived by a Holder (but only as to itself and
not to any other Holder) upon not less than 65 days prior notice to the Obligor.
Other Holders shall be unaffected by any such waiver.

                                       5
<PAGE>

         (c) Conversion Price and Adjustments to Conversion Price.

             (i) The conversion price in effect on any Conversion Date shall be
equal to the lesser of (a) $0.40 (the "Fixed Conversion Price") or (b) ninety
percent (90%) of the lowest Volume Weighted Average Price of the Common Stock
during the thirty (30) trading days immediately preceding the Conversion Date as
quoted by Bloomberg, LP (the "Market Conversion Price"). The Fixed Conversion
Price and the Market Conversion Price are collectively referred to as the
"Conversion Price." The Conversion Price may be adjusted pursuant to the other
terms of this Debenture.

             (ii) If the Obligor, at any time while this Debenture is
outstanding, shall (a) pay a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock, (b) subdivide
outstanding shares of Common Stock into a larger number of shares, (c) combine
(including by way of reverse stock split) outstanding shares of Common Stock
into a smaller number of shares, or (d) issue by reclassification of shares of
the Common Stock any shares of capital stock of the Obligor, then the Fixed
Conversion Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common Stock (excluding treasury shares, if any)
outstanding before such event and of which the denominator shall be the number
of shares of Common Stock outstanding after such event. Any adjustment made
pursuant to this Section shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or re-classification.

             (iii) If the Obligor, at any time while this Debenture is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to the Holder) entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the Fixed Conversion Price, then
the Fixed Conversion Price shall be multiplied by a fraction, of which the
denominator shall be the number of shares of the Common Stock (excluding
treasury shares, if any) outstanding on the date of issuance of such rights or
warrants (plus the number of additional shares of Common Stock offered for
subscription or purchase), and of which the numerator shall be the number of
shares of the Common Stock (excluding treasury shares, if any) outstanding on
the date of issuance of such rights or warrants, plus the number of shares which
the aggregate offering price of the total number of shares so offered would
purchase at the Fixed Conversion Price. Such adjustment shall be made whenever
such rights or warrants are issued, and shall become effective immediately after
the record date for the determination of stockholders entitled to receive such
rights, options or warrants. However, upon the expiration of any such right,
option or warrant to purchase shares of the Common Stock the issuance of which
resulted in an adjustment in the Fixed Conversion Price pursuant to this
Section, if any such right, option or warrant shall expire and shall not have
been exercised, the Fixed Conversion Price shall immediately upon such
expiration be recomputed and effective immediately upon such expiration be
increased to the price which it would have been (but reflecting any other
adjustments in the Fixed Conversion Price made pursuant to the provisions of
this Section after the issuance of such rights or warrants) had the adjustment
of the Fixed Conversion Price made upon the issuance of such rights, options or
warrants been made on the basis of offering for subscription or purchase only
that number of shares of the Common Stock actually purchased upon the exercise
of such rights, options or warrants actually exercised.

                                       6
<PAGE>

             (iv) If the Obligor or any subsidiary thereof, as applicable, at
any time while this Debenture is outstanding, shall issue shares of Common Stock
or rights, warrants, options or other securities or debt that are convertible
into or exchangeable for shares of Common Stock ("Common Stock Equivalents")
entitling any Person to acquire shares of Common Stock, at a price per share
less than the Fixed Conversion Price (if the holder of the Common Stock or
Common Stock Equivalent so issued shall at any time, whether by operation of
purchase price adjustments, reset provisions, floating conversion, exercise or
exchange prices or otherwise, or due to warrants, options or rights per share
which is issued in connection with such issuance, be entitled to receive shares
of Common Stock at a price per share which is less than the Fixed Conversion
Price, such issuance shall be deemed to have occurred for less than the Fixed
Conversion Price), then, at the sole option of the Holder, the Fixed Conversion
Price shall be adjusted to mirror the conversion, exchange or purchase price for
such Common Stock or Common Stock Equivalents (including any reset provisions
thereof) at issue. Such adjustment shall be made whenever such Common Stock or
Common Stock Equivalents are issued. The Obligor shall notify the Holder in
writing, no later than one (1) business day following the issuance of any Common
Stock or Common Stock Equivalent subject to this Section, indicating therein the
applicable issuance price, or of applicable reset price, exchange price,
conversion price and other pricing terms. No adjustment under this Section shall
be made as a result of issuances and exercises of options to purchase shares of
Common Stock issued for compensatory purposes pursuant to any of the Obligor's
stock option or stock purchase plans.

             (v) If the Obligor, at any time while this Debenture is
outstanding, shall distribute to all holders of Common Stock (and not to the
Holder) evidences of its indebtedness or assets or rights or warrants to
subscribe for or purchase any security, then in each such case the Fixed
Conversion Price at which this Debenture shall thereafter be convertible shall
be determined by multiplying the Fixed Conversion Price in effect immediately
prior to the record date fixed for determination of stockholders entitled to
receive such distribution by a fraction of which the denominator shall be the
Closing Bid Price determined as of the record date mentioned above, and of which
the numerator shall be such Closing Bid Price on such record date less the then
fair market value at such record date of the portion of such assets or evidence
of indebtedness so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors in good faith. In either case the
adjustments shall be described in a statement provided to the Holder of the
portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.

             (vi) In case of any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is converted into
other securities, cash or property, the Holder shall have the right thereafter
to, at its option, (A) convert the then outstanding principal amount, together
with all accrued but unpaid interest and any other amounts then owing hereunder
in respect of this Debenture into the shares of stock and other securities, cash
and property receivable upon or deemed to be held by holders of the Common Stock
following such reclassification or share exchange, and the Holder of this
Debenture shall be entitled upon such event to receive such amount of
securities, cash or property as the shares of the Common Stock of the Obligor
into which the then outstanding principal amount, together with all accrued but
unpaid interest and any other amounts then owing hereunder in respect of this
Debenture could have been converted immediately prior to such reclassification
or share exchange would have been entitled, or (B) require the Obligor to prepay
the outstanding principal amount of this Debenture, plus all interest and other
amounts due and payable thereon. The entire prepayment price shall be paid in
cash. This provision shall similarly apply to successive reclassifications or
share exchanges.

                                       7
<PAGE>

             (vii) The Obligor shall at all times reserve and keep available out
of its authorized Common Stock the full number of shares of Common Stock
issuable upon conversion of all outstanding amounts under this Debenture; and
within three (3) Business Days following the receipt by the Obligor of a
Holder's notice that such minimum number of Underlying Shares is not so
reserved, the Obligor shall promptly reserve a sufficient number of shares of
Common Stock to comply with such requirement.

             (viii) All calculations under this Section 3 shall be rounded up to
the nearest $0.001 or whole share.

             (ix) Whenever the Conversion Price is adjusted pursuant to Section
3 hereof, the Obligor shall promptly mail to the Holder a notice setting forth
the Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.

             (x) If (A) the Obligor shall declare a dividend (or any other
distribution) on the Common Stock; (B) the Obligor shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the
Obligor shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; (D) the approval of any stockholders of the Obligor
shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Obligor is a party, any sale or
transfer of all or substantially all of the assets of the Obligor, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; or (E) the Obligor shall authorize the voluntary
or involuntary dissolution, liquidation or winding up of the affairs of the
Obligor; then, in each case, the Obligor shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Debenture, and shall
cause to be mailed to the Holder at its last address as it shall appear upon the
stock books of the Obligor, at least twenty (20) calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided, that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. The Holder is entitled to convert this Debenture during the
20-day calendar period commencing the date of such notice to the effective date
of the event triggering such notice.

                                       8
<PAGE>

             (xi) In case of any (1) merger or consolidation of the Obligor or
any subsidiary of the Obligor with or into another Person, or (2) sale by the
Obligor or any subsidiary of the Obligor of more than one-half of the assets of
the Obligor in one or a series of related transactions, a Holder shall have the
right to (A) exercise any rights under Section 2(b), (B) convert the aggregate
amount of this Debenture then outstanding into the shares of stock and other
securities, cash and property receivable upon or deemed to be held by holders of
Common Stock following such merger, consolidation or sale, and such Holder shall
be entitled upon such event or series of related events to receive such amount
of securities, cash and property as the shares of Common Stock into which such
aggregate principal amount of this Debenture could have been converted
immediately prior to such merger, consolidation or sales would have been
entitled, or (C) in the case of a merger or consolidation, require the surviving
entity to issue to the Holder a convertible Debenture with a principal amount
equal to the aggregate principal amount of this Debenture then held by such
Holder, plus all accrued and unpaid interest and other amounts owing thereon,
which such newly issued convertible Debenture shall have terms identical
(including with respect to conversion) to the terms of this Debenture, and shall
be entitled to all of the rights and privileges of the Holder of this Debenture
set forth herein and the agreements pursuant to which this Debentures were
issued. In the case of clause (C), the conversion price applicable for the newly
issued shares of convertible preferred stock or convertible Debentures shall be
based upon the amount of securities, cash and property that each share of Common
Stock would receive in such transaction and the Conversion Price in effect
immediately prior to the effectiveness or closing date for such transaction. The
terms of any such merger, sale or consolidation shall include such terms so as
to continue to give the Holder the right to receive the securities, cash and
property set forth in this Section upon any conversion or redemption following
such event. This provision shall similarly apply to successive such events.

         (d) Other Provisions.

             (i) The Obligor covenants that it will at all times reserve and
keep available out of its authorized and unissued shares of Common Stock solely
for the purpose of issuance upon conversion of this Debenture and payment of
interest on this Debenture, each as herein provided, free from preemptive rights
or any other actual contingent purchase rights of persons other than the Holder,
not less than such number of shares of the Common Stock as shall (subject to any
additional requirements of the Obligor as to reservation of such shares set
forth in this Debenture) be issuable (taking into account the adjustments and
restrictions of Sections 2(b) and 3(c)) upon the conversion of the outstanding
principal amount of this Debenture and payment of interest hereunder. The
Obligor covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly and validly authorized, issued and fully paid,
nonassessable and, if the Underlying Shares Registration Statement has been
declared effective under the Securities Act, registered for public sale in
accordance with such Underlying Shares Registration Statement.

             (ii) Upon a conversion hereunder the Obligor shall not be required
to issue stock certificates representing fractions of shares of the Common
Stock, but may if otherwise permitted, make a cash payment in respect of any
final fraction of a share based on the Closing Bid Price at such time. If the
Obligor elects not, or is unable, to make such a cash payment, the Holder shall
be entitled to receive, in lieu of the final fraction of a share, one whole
share of Common Stock.

                                       9
<PAGE>

             (iii) The issuance of certificates for shares of the Common Stock
on conversion of this Debenture shall be made without charge to the Holder
thereof for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificate, provided that the Obligor
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate upon
conversion in a name other than that of the Holder of such Debenture so
converted and the Obligor shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Obligor the amount of such tax or shall have
established to the satisfaction of the Obligor that such tax has been paid.

             (iv) Nothing herein shall limit a Holder's right to pursue actual
damages or declare an Event of Default pursuant to Section 2 herein for the
Obligor 's failure to deliver certificates representing shares of Common Stock
upon conversion within the period specified herein and such Holder shall have
the right to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief,
in each case without the need to post a bond or provide other security. The
exercise of any such rights shall not prohibit the Holder from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.

             (v) In addition to any other rights available to the Holder, if the
Obligor fails to deliver to the Holder such certificate or certificates pursuant
to Section 3(a)(i) by the fifth (5th) Trading Day after the Conversion Date, and
if after such fifth (5th) Trading Day the Holder purchases (in an open market
transaction or otherwise) Common Stock to deliver in satisfaction of a sale by
such Holder of the Underlying Shares which the Holder anticipated receiving upon
such conversion (a "Buy-In"), then the Obligor shall (A) pay in cash to the
Holder (in addition to any remedies available to or elected by the Holder) the
amount by which (x) the Holder's total purchase price (including brokerage
commissions, if any) for the Common Stock so purchased exceeds (y) the product
of (1) the aggregate number of shares of Common Stock that such Holder
anticipated receiving from the conversion at issue multiplied by (2) the market
price of the Common Stock at the time of the sale giving rise to such purchase
obligation and (B) at the option of the Holder, either reissue a Debenture in
the principal amount equal to the principal amount of the attempted conversion
or deliver to the Holder the number of shares of Common Stock that would have
been issued had the Obligor timely complied with its delivery requirements under
Section 3(a)(i). For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
conversion of Debentures with respect to which the market price of the
Underlying Shares on the date of conversion was a total of $10,000 under clause
(A) of the immediately preceding sentence, the Obligor shall be required to pay
the Holder $1,000. The Holder shall provide the Obligor written notice
indicating the amounts payable to the Holder in respect of the Buy-In.

         Section 4. Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms hereof must be
in writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) trading day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:

                                       10
<PAGE>

If to the Company, to:                    JAG Media Holdings, Inc.
                                          6865 SW 18th Street, Suite B-13
                                          Boca Raton, FL 33433
                                          Attention: Steven Schoepfer
                                          Telephone: (866) 300-7410
                                          Facsimile:

With a copy to:                           Morgan, Lewis & Bockius LLP
                                          101 Park Avenue
                                          New York, NY 10178
                                          Attention: W. Preston Tollinger, Esq.
                                          Telephone: (212) 309-6915
                                          Facsimile: (212) 309-6001

If to the Holder:                         Cornell Capital Partners, LP
                                          101 Hudson Street, Suite 3700
                                          Jersey City, NJ 07303
                                          Attention: Mark Angelo
                                          Telephone: (201) 985-8300

With a copy to:                           David Gonzalez, Esq.
                                          101 Hudson Street - Suite 3700
                                          Jersey City, NJ 07302
                                          Telephone: (201) 985-8300
                                          Facsimile: (201) 985-8266

or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party three (3) business days prior to the effectiveness of such
change. Written confirmation of receipt (i) given by the recipient of such
notice, consent, waiver or other communication, (ii) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (iii) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

         Section 5. Definitions. For the purposes hereof, the following terms
shall have the following meanings:

         "Business Day" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday in the United States or a day on which banking
institutions are authorized or required by law or other government action to
close.

                                       11
<PAGE>

         "Change of Control Transaction" means the occurrence of (a) an
acquisition after the date hereof by an individual or legal entity or "group"
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Obligor, by contract or otherwise) of in excess of fifty percent
(50%) of the voting securities of the Obligor (except that the acquisition of
voting securities by the Holder shall not constitute a Change of Control
Transaction for purposes hereof), (b) a replacement at one time or over time of
more than one-half of the members of the board of directors of the Obligor which
is not approved by a majority of those individuals who are members of the board
of directors on the date hereof (or by those individuals who are serving as
members of the board of directors on any date whose nomination to the board of
directors was approved by a majority of the members of the board of directors
who are members on the date hereof), (c) the merger, consolidation or sale of
fifty percent (50%) or more of the assets of the Obligor or any subsidiary of
the Obligor in one or a series of related transactions with or into another
entity, or (d) the execution by the Obligor of an agreement to which the Obligor
is a party or by which it is bound, providing for any of the events set forth
above in (a), (b) or (c).

         "Closing Bid Price" means the price per share in the last reported
trade of the Common Stock on the OTC or on the exchange which the Common Stock
is then listed as quoted by Bloomberg, LP.

         "Commission" means the Securities and Exchange Commission.

         "Common Stock" means the common stock, par value $.00001, of the
Obligor and stock of any other class into which such shares may hereafter be
changed or reclassified.

         "Conversion Date" shall mean the date upon which the Holder gives the
Obligor notice of their intention to effectuate a conversion of this Debenture
into shares of the Company's Common Stock as outlined herein.

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

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

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

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

         "Trading Day" means a day on which the shares of Common Stock are
quoted on the OTC or quoted or traded on such Subsequent Market on which the
shares of Common Stock are then quoted or listed; provided, that in the event
that the shares of Common Stock are not listed or quoted, then Trading Day shall
mean a Business Day.

         "Transaction Documents" means the Securities Purchase Agreement or any
other agreement delivered in connection with the Securities Purchase Agreement,
including, without limitation, the Security Agreement, the Subsidiary Security
Agreement, the Irrevocable Transfer Agent Instructions, and the Registration
Rights Agreement.

                                       12
<PAGE>

         "Underlying Shares" means the shares of Common Stock issuable upon
conversion of this Debenture or as payment of interest in accordance with the
terms hereof.

         "Underlying Shares Registration Statement" means a registration
statement meeting the requirements set forth in the Registration Rights
Agreement, covering among other things the resale of the Underlying Shares and
naming the Holder as a "selling stockholder" thereunder.

         Section 6. Except as expressly provided herein, no provision of this
Debenture shall alter or impair the obligations of the Obligor, which are
absolute and unconditional, to pay the principal of, interest and other charges
(if any) on, this Debenture at the time, place, and rate, and in the coin or
currency, herein prescribed. This Debenture is a direct obligation of the
Obligor. This Debenture ranks pari passu with all other Debentures now or
hereafter issued under the terms set forth herein. As long as this Debenture is
outstanding, the Obligor shall not and shall cause their subsidiaries not to,
without the consent of the Holder, (i) amend its certificate of incorporation,
bylaws or other charter documents so as to adversely affect any rights of the
Holder; (ii) repay, repurchase or offer to repay, repurchase or otherwise
acquire shares of its Common Stock or other equity securities other than as to
the Underlying Shares to the extent permitted or required under the Transaction
Documents; or (iii) enter into any agreement with respect to any of the
foregoing.

         Section 7. This Debenture shall not entitle the Holder to any of the
rights of a stockholder of the Obligor, including without limitation, the right
to vote, to receive dividends and other distributions, or to receive any notice
of, or to attend, meetings of stockholders or any other proceedings of the
Obligor, unless and to the extent converted into shares of Common Stock in
accordance with the terms hereof.

         Section 8. If this Debenture is mutilated, lost, stolen or destroyed,
the Obligor shall execute and deliver, in exchange and substitution for and upon
cancellation of the mutilated Debenture, or in lieu of or in substitution for a
lost, stolen or destroyed Debenture, a new Debenture for the principal amount of
this Debenture so mutilated, lost, stolen or destroyed but only upon receipt of
evidence of such loss, theft or destruction of such Debenture, and of the
ownership hereof, and indemnity, if requested, all reasonably satisfactory to
the Obligor.

         Section 9. No indebtedness of the Obligor is senior to this Debenture
in right of payment, whether with respect to interest, damages or upon
liquidation or dissolution or otherwise. Without the Holder's consent, the
Obligor will not and will not permit any of their subsidiaries to, directly or
indirectly, enter into, create, incur, assume or suffer to exist any
indebtedness of any kind, on or with respect to any of its property or assets
now owned or hereafter acquired or any interest therein or any income or profits
there from that is senior in any respect to the obligations of the Obligor under
this Debenture.

         Section 10. This Debenture shall be governed by and construed in
accordance with the laws of the State of New Jersey, without giving effect to
conflicts of laws thereof. Each of the parties consents to the jurisdiction of
the Superior Courts of the State of New Jersey sitting in Hudson County, New
Jersey and the U.S. District Court for the District of New Jersey sitting in
Newark, New Jersey 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 conveniens to the bringing of any
such proceeding in such jurisdictions.

                                       13
<PAGE>

         Section 11. If the Obligor fails to strictly comply with the terms of
this Debenture, then the Obligor shall reimburse the Holder promptly for all
fees, costs and expenses, including, without limitation, attorneys' fees and
expenses incurred by the Holder in any action in connection with this Debenture,
including, without limitation, those incurred: (i) during any workout, attempted
workout, and/or in connection with the rendering of legal advice as to the
Holder's rights, remedies and obligations, (ii) collecting any sums which become
due to the Holder, (iii) defending or prosecuting any proceeding or any
counterclaim to any proceeding or appeal; or (iv) the protection, preservation
or enforcement of any rights or remedies of the Holder.

         Section 12. Any waiver by the Holder of a breach of any provision of
this Debenture shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Debenture. The failure of the Holder to insist upon strict adherence to any term
of this Debenture on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Debenture. Any waiver must be in writing.

         Section 13. If any provision of this Debenture is invalid, illegal or
unenforceable, the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances. If it shall be found
that any interest or other amount deemed interest due hereunder shall violate
applicable laws governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum permitted rate of interest.
The Obligor covenants (to the extent that it may lawfully do so) that it shall
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Obligor from paying all or any portion of the
principal of or interest on this Debenture as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this indenture, and the Obligor (to the extent
it may lawfully do so) hereby expressly waives all benefits or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impeded the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law has
been enacted.

         Section 14. Whenever any payment or other obligation hereunder shall be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.

         Section 15. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT ANY OF THEM 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 OR ANY TRANSACTION DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES' ACCEPTANCE OF THIS
AGREEMENT.

                   [REMAINDER OF PAGE INTENTIONLLY LEFT BLANK]

                                       14
<PAGE>

         IN WITNESS WHEREOF, the Obligor has caused this Secured Convertible
Debenture to be duly executed by a duly authorized officer as of the date set
forth above.

                                     JAG MEDIA HOLDINGS, INC.

                                     By:_______________________________
                                     Name:  Thomas J. Mazzarisi
                                     Title: Chairman and Chief Executive Officer

                                       15
<PAGE>

                                   EXHIBIT "A"

                              NOTICE OF CONVERSION

        (TO BE EXECUTED BY THE HOLDER IN ORDER TO CONVERT THE DEBENTURE)

TO:

         The undersigned hereby irrevocably elects to convert $_________________
of the principal amount of the above Debenture into Shares of Common Stock of
JAG Media Holdings, Inc., according to the conditions stated therein, as of the
Conversion Date written below.

CONVERSION DATE:                            ____________________________________

APPLICABLE CONVERSION PRICE:                ____________________________________

SIGNATURE:                                  ____________________________________

NAME:                                       ____________________________________

ADDRESS:                                    ____________________________________

AMOUNT TO BE CONVERTED:                     $___________________________________

AMOUNT OF DEBENTURE UNCONVERTED:            $___________________________________

CONVERSION PRICE PER SHARE:                 $___________________________________

NUMBER OF SHARES OF COMMON
STOCK TO BE ISSUED:                         ____________________________________

PLEASE ISSUE THE SHARES OF COMMON
STOCK IN THE FOLLOWING NAME AND
TO THE FOLLOWING ADDRESS:                   ____________________________________

ISSUE TO:                                   ____________________________________

AUTHORIZED SIGNATURE:                       ____________________________________

NAME:                                       ____________________________________

TITLE:                                      ____________________________________

PHONE NUMBER:                               ____________________________________

BROKER DTC PARTICIPANT CODE:                ____________________________________

ACCOUNT NUMBER:                             ____________________________________

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