Document:

EXHIBIT 4.12

                          REGISTRATION RIGHTS AGREEMENT

      REGISTRATION  RIGHTS  AGREEMENT  (this  "AGREEMENT"),  dated as of June 8,
2004, by and among Pacificap Entertainment Holdings,  Inc., a Nevada corporation
with its  headquarters  located at 12868 Via Latina,  Del Mar,  California 92014
(the  "COMPANY"),  and each of the undersigned  (together with their  respective
affiliates  and any assignee or  transferee  of all of their  respective  rights
hereunder, the "INITIAL INVESTORS").

      WHEREAS:

      A. In connection with the Securities  Purchase  Agreement by and among the
parties hereto of even date herewith (the "SECURITIES PURCHASE AGREEMENT"),  the
Company  has  agreed,  upon the terms and  subject to the  conditions  contained
therein,  to issue  and  sell to the  Initial  Investors  (i)  callable  secured
convertible notes in the aggregate principal amount of up to Two Million Dollars
($2,000,000)  (the  "NOTES") that are  convertible  into shares of the Company's
common stock (the "COMMON STOCK"), upon the terms and subject to the limitations
and  conditions  set forth in such Notes and (ii) warrants (the  "WARRANTS")  to
acquire an  aggregate of 2,000,000  shares of Common  Stock,  upon the terms and
conditions  and  subject  to the  limitations  and  conditions  set forth in the
Warrants; and

      B. To induce the Initial  Investors to execute and deliver the  Securities
Purchase  Agreement,  the  Company  has agreed to provide  certain  registration
rights  under  the  Securities  Act of  1933,  as  amended,  and the  rules  and
regulations  thereunder,  or any similar  successor statute  (collectively,  the
"1933 ACT"), and applicable state securities laws;

      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  Company  and each of the
Initial Investors hereby agree as follows:

      1. DEFINITIONS.

            A. As used in this  Agreement,  the  following  terms shall have the
following meanings:

                  (I) "INVESTORS" means the Initial Investors and any transferee
or assignee who agrees to become bound by the  provisions  of this  Agreement in
accordance with Section 9 hereof.

                  (II) "REGISTER,"  "REGISTERED," and "REGISTRATION"  refer to a
registration  effected  by  preparing  and filing a  Registration  Statement  or
Statements  in  compliance  with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
basis ("RULE 415"),  and the  declaration or ordering of  effectiveness  of such
Registration  Statement by the United States Securities and Exchange  Commission
(the "SEC").

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                  (III)  "REGISTRABLE  SECURITIES"  means the Conversion  Shares
issued or  issuable  upon  conversion  or  otherwise  pursuant  to the Notes and
Additional Notes (as defined in the Securities  Purchase  Agreement)  including,
without limitation,  Damages Shares (as defined in the Notes) issued or issuable
pursuant to the Notes,  shares of Common  Stock issued or issuable in payment of
the Standard  Liquidated  Damages Amount (as defined in the Securities  Purchase
Agreement), shares issued or issuable in respect of interest or in redemption of
the Notes in accordance  with the terms  thereof) and Warrant  Shares  issuable,
upon exercise or otherwise pursuant to the Warrants and Additional  Warrants (as
defined in the Securities Purchase  Agreement),  and any shares of capital stock
issued or issuable as a dividend on or in exchange for or otherwise with respect
to any of the foregoing.

                  (IV) "REGISTRATION  STATEMENT" means a registration  statement
of the Company under the 1933 Act.

            B.  Capitalized  terms used herein and not otherwise  defined herein
shall  have  the  respective  meanings  set  forth  in the  Securities  Purchase
Agreement or the Convertible Note.

      2. REGISTRATION.

            A. MANDATORY  REGISTRATION.  The Company shall  prepare,  and, on or
prior to  forty-five  (45)  days from the date of  Closing  (as  defined  in the
Securities  Purchase  Agreement)  (the  "FILING  DATE"),  file  with  the  SEC a
Registration  Statement on Form S-3 (or, if Form S-3 is not then  available,  on
such  form  of  Registration   Statement  as  is  then  available  to  effect  a
registration  of the  Registrable  Securities,  subject  to the  consent  of the
Initial Investors, which consent will not be unreasonably withheld) covering the
resale of the Registrable Securities underlying the Notes and Warrants issued or
issuable  pursuant to the  Securities  Purchase  Agreement,  which  Registration
Statement,  to the  extent  allowable  under  the  1933  Act and the  rules  and
regulations  promulgated  thereunder (including Rule 416), shall state that such
Registration  Statement  also covers  such  indeterminate  number of  additional
shares of Common Stock as may become  issuable  upon  conversion of or otherwise
pursuant to the Notes and exercise of the Warrants to prevent dilution resulting
from stock splits, stock dividends or similar transactions. The number of shares
of Common Stock initially  included in such  Registration  Statement shall be no
less than an amount  equal to two (2) times the sum of the number of  Conversion
Shares that are then issuable upon conversion of the Notes and Additional  Notes
(based on the Variable  Conversion Price as would then be in effect and assuming
the Variable  Conversion  Price is the Conversion  Price at such time),  and the
number of Warrant  Shares that are then  issuable upon exercise of the Warrants,
without regard to any limitation on the Investor's  ability to convert the Notes
or exercise the  Warrants.  The Company  acknowledges  that the number of shares
initially  included  in the  Registration  Statement  represents  a  good  faith
estimate of the maximum number of shares  issuable upon  conversion of the Notes
and upon exercise of the Warrants.

            B. UNDERWRITTEN OFFERING. If any offering pursuant to a Registration
Statement pursuant to Section 2(a) hereof involves an underwritten offering, the
Investors who hold a majority in interest of the Registrable  Securities subject
to such underwritten offering, with the consent of a majority-in-interest of the
Initial  Investors,  shall  have the right to select  one legal  counsel  and an
investment banker or bankers and manager or managers to administer the offering,
which  investment  banker or bankers or manager or managers  shall be reasonably
satisfactory to the Company.

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            C.  PAYMENTS BY THE COMPANY.  The Company shall use its best efforts
to obtain effectiveness of the Registration Statement as soon as practicable. If
(i) the Registration  Statement(s) covering the Registrable  Securities required
to be filed by the Company  pursuant to Section  2(a) hereof is not filed by the
Filing Date or declared  effective by the SEC on or prior to one hundred  twenty
(120)  days from the date of Closing  (as  defined  in the  Securities  Purchase
Agreement), or (ii) after the Registration Statement has been declared effective
by the SEC, sales of all of the Registrable  Securities  cannot be made pursuant
to the  Registration  Statement,  or (iii)  the  Common  Stock is not  listed or
included for  quotation on the Nasdaq  National  Market  ("NASDAQ"),  the Nasdaq
SmallCap Market ("NASDAQ SMALLCAP"), the New York Stock Exchange (the "NYSE") or
the American  Stock  Exchange (the "AMEX") after being so listed or included for
quotation,  or (iv) the Common Stock ceases to be traded on the Over-the-Counter
Bulletin  Board (the "OTCBB") or any  equivalent  replacement  exchange prior to
being listed or included for  quotation  on one of the  aforementioned  markets,
then the Company will make payments to the Investors in such amounts and at such
times as shall be determined pursuant to this Section 2(c) as partial relief for
the  damages to the  Investors  by reason of any such delay in or  reduction  of
their  ability to sell the  Registrable  Securities  (which  remedy shall not be
exclusive  of any other  remedies  available  at law or in equity).  The Company
shall pay to each holder of the Notes or Registrable  Securities an amount equal
to the then  outstanding  principal  amount  of the Notes  (and,  in the case of
holders of Registrable Securities, the principal amount of Notes from which such
Registrable  Securities  were  converted)   ("OUTSTANDING   PRINCIPAL  AMOUNT"),
multiplied by the Applicable Percentage (as defined below) times the sum of: (i)
the number of months  (prorated for partial months) after the Filing Date or the
end of the  aforementioned  one hundred twenty (120) day period and prior to the
date the  Registration  Statement is declared  effective  by the SEC,  provided,
however,  that there  shall be excluded  from such  period any delays  which are
solely  attributable  to changes  required by the Investors in the  Registration
Statement  with respect to  information  relating to the  Investors,  including,
without  limitation,  changes to the plan of distribution,  or to the failure of
the Investors to conduct their review of the Registration  Statement pursuant to
Section  3(h) below in a  reasonably  prompt  manner;  (ii) the number of months
(prorated for partial  months) that sales of all of the  Registrable  Securities
cannot be made pursuant to the  Registration  Statement  after the  Registration
Statement has been declared effective (including, without limitation, when sales
cannot be made by reason of the  Company's  failure to  properly  supplement  or
amend the  prospectus  included  therein  in  accordance  with the terms of this
Agreement, but excluding any days during an Allowed Delay (as defined in Section
3(f));  and (iii) the number of months  (prorated  for partial  months) that the
Common  Stock is not listed or  included  for  quotation  on the OTCBB,  Nasdaq,
Nasdaq  SmallCap,  NYSE or AMEX or that  trading  thereon  is  halted  after the
Registration  Statement  has  been  declared  effective.  The  term  "APPLICABLE
PERCENTAGE"  means two  hundredths  (.02).  (For  example,  if the  Registration
Statement  becomes  effective  one (1) month  after the end of such one  hundred
twenty  (120) day  period,  the  Company  would pay $5,000 for each  $250,000 of
Outstanding Principal Amount. If thereafter, sales could not be made pursuant to
the  Registration  Statement  for an  additional  period of one (1)  month,  the
Company  would  pay an  additional  $5,000  for  each  $250,000  of  Outstanding
Principal  Amount.)  Such  amounts  shall be paid in cash or,  at the  Company's
option,  in shares of Common Stock priced at the Conversion Price (as defined in
the Notes) on such payment date.

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            D.  PIGGY-BACK  REGISTRATIONS.  Subject to the last sentence of this
Section 2(d), if at any time prior to the expiration of the Registration  Period
(as  hereinafter  defined)  the Company  shall  determine to file with the SEC a
Registration  Statement  relating  to an  offering  for its own  account  or the
account of others under the 1933 Act of any of its equity securities (other than
on Form S-4 or Form S-8 or their then equivalents  relating to equity securities
to be issued solely in connection with any acquisition of any entity or business
or equity  securities  issuable in  connection  with stock  option or other bona
fide,  employee  benefit plans),  the Company shall send to each Investor who is
entitled to  registration  rights under this Section 2(d) written notice of such
determination  and, if within fifteen (15) days after the effective date of such
notice, such Investor shall so request in writing,  the Company shall include in
such Registration  Statement all or any part of the Registrable  Securities such
Investor  requests  to be  registered,  except that if, in  connection  with any
underwritten  public  offering  for the  account  of the  Company  the  managing
underwriter(s)  thereof  shall  impose a  limitation  on the number of shares of
Common Stock which may be included in the  Registration  Statement  because,  in
such  underwriter(s)'   judgment,   marketing  or  other  factors  dictate  such
limitation  is necessary to  facilitate  public  distribution,  then the Company
shall be obligated to include in such  Registration  Statement only such limited
portion of the  Registrable  Securities  with respect to which such Investor has
requested  inclusion hereunder as the underwriter shall permit. Any exclusion of
Registrable  Securities  shall be made pro rata among the  Investors  seeking to
include  Registrable  Securities  in  proportion  to the  number of  Registrable
Securities sought to be included by such Investors;  provided, however, that the
Company  shall not exclude  any  Registrable  Securities  unless the Company has
first excluded all outstanding securities, the holders of which are not entitled
to  inclusion  of such  securities  in such  Registration  Statement  or are not
entitled to pro rata inclusion with the  Registrable  Securities;  and provided,
further,  however,  that,  after  giving  effect  to the  immediately  preceding
proviso,  any exclusion of  Registrable  Securities  shall be made pro rata with
holders of other  securities  having the right to include such securities in the
Registration Statement other than holders of securities entitled to inclusion of
their securities in such Registration Statement by reason of demand registration
rights.  No right to registration of Registrable  Securities  under this Section
2(d) shall be construed to limit any  registration  required  under Section 2(a)
hereof.  If an  offering  in  connection  with which an  Investor is entitled to
registration  under this Section  2(d) is an  underwritten  offering,  then each
Investor  whose  Registrable   Securities  are  included  in  such  Registration
Statement shall,  unless  otherwise  agreed by the Company,  offer and sell such
Registrable Securities in an underwritten offering using the same underwriter or
underwriters and, subject to the provisions of this Agreement, on the same terms
and  conditions  as other shares of Common Stock  included in such  underwritten
offering.  Notwithstanding  anything  to the  contrary  set  forth  herein,  the
registration rights of the Investors pursuant to this Section 2(d) shall only be
available in the event the Company fails to timely file, obtain effectiveness or
maintain  effectiveness  of any  Registration  Statement to be filed pursuant to
Section 2(a) in accordance with the terms of this Agreement.

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            E.  ELIGIBILITY  FOR FORM S-3, SB-2 OR S-1;  CONVERSION TO FORM S-3.
The Company  represents and warrants that it meets the  requirements for the use
of Form S-3, SB-2 or S-1 for  registration of the sale by the Initial  Investors
and any other  Investors of the  Registrable  Securities.  The Company agrees to
file all reports  required  to be filed by the Company  with the SEC in a timely
manner so as to remain  eligible  or become  eligible,  as the case may be,  and
thereafter to maintain its eligibility,  for the use of Form S-3. If the Company
is not currently eligible to use Form S-3, not later than five (5) business days
after the  Company  first meets the  registration  eligibility  and  transaction
requirements for the use of Form S-3 (or any successor form) for registration of
the  offer  and  sale by the  Initial  Investors  and  any  other  Investors  of
Registrable Securities,  the Company shall file a Registration Statement on Form
S-3 (or such successor form) with respect to the Registrable  Securities covered
by the Registration Statement on Form SB-2 or Form S-1, whichever is applicable,
filed  pursuant to Section 2(a) (and include in such  Registration  Statement on
Form S-3 the information required by Rule 429 under the 1933 Act) or convert the
Registration Statement on Form SB-2 or Form S-1, whichever is applicable,  filed
pursuant to Section  2(a) to a Form S-3  pursuant to Rule 429 under the 1933 Act
and  cause  such  Registration  Statement  (or such  amendment)  to be  declared
effective no later than  forty-five  (45) days after  filing.  In the event of a
breach by the Company of the  provisions of this Section 2(e),  the Company will
be required to make payments pursuant to Section 2(c) hereof.

      3. OBLIGATIONS OF THE COMPANY.

      In connection with the  registration of the  Registrable  Securities,  the
Company shall have the following obligations:

            A. The Company  shall  prepare  promptly,  and file with the SEC not
later than the Filing Date, a Registration  Statement with respect to the number
of Registrable  Securities provided in Section 2(a), and thereafter use its best
efforts to cause such Registration  Statement relating to Registrable Securities
to become  effective as soon as possible after such filing but in no event later
than one  hundred  twenty  (120)  days from the date of  Closing),  and keep the
Registration  Statement  effective  pursuant to Rule 415 at all times until such
date  as is  the  earlier  of (i)  the  date  on  which  all of the  Registrable
Securities have been sold and (ii) the date on which the Registrable  Securities
(in the opinion of counsel to the Initial  Investors) may be immediately sold to
the public without registration or restriction  (including,  without limitation,
as to  volume by each  holder  thereof)  under  the 1933 Act (the  "REGISTRATION
PERIOD"),  which Registration Statement (including any amendments or supplements
thereto  and  prospectuses  contained  therein)  shall not  contain  any  untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated therein, or necessary to make the statements therein not misleading.

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            B. The Company shall  prepare and file with the SEC such  amendments
(including  post-effective  amendments)  and  supplements  to  the  Registration
Statements  and  the  prospectus  used  in  connection  with  the   Registration
Statements as may be necessary to keep the Registration  Statements effective at
all times during the Registration  Period, and, during such period,  comply with
the  provisions  of  the  1933  Act  with  respect  to  the  disposition  of all
Registrable  Securities of the Company  covered by the  Registration  Statements
until such time as all of such  Registrable  Securities have been disposed of in
accordance  with the intended  methods of  disposition  by the seller or sellers
thereof as set forth in the Registration Statements.  In the event the number of
shares available under a Registration Statement filed pursuant to this Agreement
is insufficient to cover all of the  Registrable  Securities  issued or issuable
upon  conversion  of the Notes and exercise of the  Warrants,  the Company shall
amend the Registration  Statement,  or file a new Registration Statement (on the
short form available  therefor,  if applicable),  or both, so as to cover all of
the Registrable  Securities,  in each case, as soon as  practicable,  but in any
event within fifteen (15) days after the necessity therefor arises (based on the
market price of the Common Stock and other relevant factors on which the Company
reasonably elects to rely). The Company shall use its best efforts to cause such
amendment  and/or new  Registration  Statement  to become  effective  as soon as
practicable  following the filing  thereof,  but in any event within thirty (30)
days  after  the date on which  the  Company  reasonably  first  determines  (or
reasonably should have determined) the need therefor.  The provisions of Section
2(c) above shall be  applicable  with respect to such  obligation,  with the one
hundred  twenty  (120) days running  from the day the Company  reasonably  first
determines (or reasonably should have determined) the need therefor.

            C. The Company  shall  furnish to each  Investor  whose  Registrable
Securities  are included in a  Registration  Statement and its legal counsel (i)
promptly  (but in no event more than two (2)  business  days)  after the same is
prepared  and  publicly  distributed,  filed with the SEC,  or  received  by the
Company, one copy of each Registration Statement and any amendment thereto, each
preliminary  prospectus and prospectus and each amendment or supplement thereto,
and, in the case of the Registration Statement referred to in Section 2(a), each
letter  written  by or on behalf of the  Company  to the SEC or the staff of the
SEC,  and each item of  correspondence  from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought confidential
treatment),  and (ii) promptly (but in no event more than two (2) business days)
after the Registration  Statement is declared  effective by the SEC, such number
of  copies  of  a  prospectus,  including  a  preliminary  prospectus,  and  all
amendments and supplements thereto and such other documents as such Investor may
reasonably  request in order to facilitate the  disposition  of the  Registrable
Securities  owned by such  Investor.  The Company will  immediately  notify each
Investor by facsimile of the effectiveness of each Registration Statement or any
post-effective  amendment.  The Company will promptly (but in no event more than
five (5) business  days)  respond to any and all comments  received from the SEC
(which comments shall promptly be made available to the Investors upon request),
with a view towards causing each Registration Statement or any amendment thereto
to be declared effective by the SEC as soon as practicable,  shall promptly file
an  acceleration  request as soon as practicable  (but in no event more than two
(2) business days) following the resolution or clearance of all SEC comments or,
if  applicable,  following  notification  by the SEC that any such  Registration
Statement  or any  amendment  thereto  will not be  subject  to review and shall
promptly file with the SEC a final  prospectus as soon as practicable (but in no
event more than two (2) business days) following receipt by the Company from the
SEC of an order declaring the Registration Statement effective.  In the event of
a breach by the Company of the provisions of this Section 3(c), the Company will
be required to make payments pursuant to Section 2(c) hereof.

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            D. The Company  shall use  reasonable  efforts to (i)  register  and
qualify the Registrable Securities covered by the Registration  Statements under
such other  securities  or "blue sky" laws of such  jurisdictions  in the United
States  as the  Investors  who hold a  majority-in-interest  of the  Registrable
Securities  being  offered  reasonably  request,  (ii) prepare and file in those
jurisdictions  such  amendments   (including   post-effective   amendments)  and
supplements  to such  registrations  and  qualifications  as may be necessary to
maintain the effectiveness  thereof during the Registration  Period,  (iii) take
such other  actions as may be  necessary  to  maintain  such  registrations  and
qualifications in effect at all times during the Registration  Period,  and (iv)
take all  other  actions  reasonably  necessary  or  advisable  to  qualify  the
Registrable Securities for sale in such jurisdictions;  provided,  however, that
the  Company  shall not be required in  connection  therewith  or as a condition
thereto to (a)  qualify to do business  in any  jurisdiction  where it would not
otherwise be required to qualify but for this Section 3(d),  (b) subject  itself
to general  taxation  in any such  jurisdiction,  (c) file a general  consent to
service of process in any such  jurisdiction,  (d) provide any undertakings that
cause the Company undue expense or burden, or (e) make any change in its charter
or bylaws,  which in each case the Board of Directors of the Company  determines
to be contrary to the best interests of the Company and its shareholders.

            E. In the event  Investors  who hold a  majority-in-interest  of the
Registrable  Securities  being  offered in the offering  (with the approval of a
majority-in-interest  of the  Initial  Investors)  select  underwriters  for the
offering,  the Company  shall enter into and  perform its  obligations  under an
underwriting  agreement,  in  usual  and  customary  form,  including,   without
limitation,  customary  indemnification and contribution  obligations,  with the
underwriters of such offering.

            F. As promptly as  practicable  after  becoming aware of such event,
the Company shall notify each  Investor of the happening of any event,  of which
the Company has knowledge,  as a result of which the prospectus  included in any
Registration  Statement,  as then in effect,  includes an untrue  statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the  statements  therein not  misleading,  and use its best
efforts  promptly  to prepare a  supplement  or  amendment  to any  Registration
Statement to correct such untrue statement or omission,  and deliver such number
of copies of such  supplement or amendment to each Investor as such Investor may
reasonably  request;  provided  that,  for not more  than  ten (10)  consecutive
trading days (or a total of not more than twenty (20) trading days in any twelve
(12) month period),  the Company may delay the disclosure of material non-public
information  concerning  the  Company  (as well as  prospectus  or  Registration
Statement  updating)  the  disclosure  of which at the time is not,  in the good
faith opinion of the Company,  in the best interests of the Company (an "ALLOWED
DELAY");  provided,  further,  that the Company  shall  promptly  (i) notify the
Investors  in writing of the  existence  of (but in no event,  without the prior
written consent of an Investor,  shall the Company disclose to such investor any
of the facts or circumstances  regarding) material non-public information giving
rise to an Allowed  Delay and (ii) advise the  Investors in writing to cease all
sales under such Registration Statement until the end of the Allowed Delay. Upon
expiration of the Allowed  Delay,  the Company shall again be bound by the first
sentence  of this  Section  3(f) with  respect to the  information  giving  rise
thereto.

            G. The Company shall use its best efforts to prevent the issuance of
any  stop  order  or  other  suspension  of  effectiveness  of any  Registration
Statement,  and, if such an order is issued,  to obtain the  withdrawal  of such
order at the  earliest  possible  moment and to notify each  Investor  who holds
Registrable Securities being sold (or, in the event of an underwritten offering,
the  managing  underwriters)  of the  issuance of such order and the  resolution
thereof.

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            H. The Company  shall permit a single firm of counsel  designated by
the Initial Investors to review such  Registration  Statement and all amendments
and  supplements   thereto  (as  well  as  all  requests  for   acceleration  or
effectiveness  thereof) a  reasonable  period of time prior to their filing with
the SEC, and not file any  document in a form to which such  counsel  reasonably
objects and will not request acceleration of such Registration Statement without
prior  notice to such  counsel.  The  sections  of such  Registration  Statement
covering  information with respect to the Investors,  the Investor's  beneficial
ownership  of  securities  of the Company or the  Investors  intended  method of
disposition of Registrable  Securities shall conform to the information provided
to the Company by each of the Investors.

            I. The  Company  shall  make  generally  available  to its  security
holders as soon as  practicable,  but not later than  ninety (90) days after the
close of the period covered  thereby,  an earnings  statement (in form complying
with the  provisions  of Rule 158 under the 1933 Act)  covering  a  twelve-month
period  beginning not later than the first day of the Company's  fiscal  quarter
next following the effective date of the Registration Statement.

            J. At the request of any Investor, the Company shall furnish, on the
date that  Registrable  Securities are delivered to an underwriter,  if any, for
sale in connection  with any  Registration  Statement or, if such securities are
not being sold by an underwriter,  on the date of  effectiveness  thereof (i) an
opinion,  dated as of such date,  from  counsel  representing  the  Company  for
purposes of such  Registration  Statement,  in form,  scope and  substance as is
customarily  given  in  an  underwritten  public  offering,   addressed  to  the
underwriters, if any, and the Investors and (ii) a letter, dated such date, from
the Company's  independent certified public accountants in form and substance as
is customarily given by independent certified public accountants to underwriters
in an underwritten public offering,  addressed to the underwriters,  if any, and
the Investors.

            K. The  Company  shall  make  available  for  inspection  by (i) any
Investor,  (ii) any underwriter  participating in any disposition  pursuant to a
Registration Statement,  (iii) one firm of attorneys and one firm of accountants
or other agents  retained by the Initial  Investors,  (iv) one firm of attorneys
and one firm of accountants or other agents retained by all other Investors, and
(v) one firm of attorneys retained by all such underwriters  (collectively,  the
"INSPECTORS") all pertinent financial and other records, and pertinent corporate
documents and properties of the Company,  including without limitation,  records
of conversions by other holders of convertible  securities issued by the Company
and  the  issuance  of  stock  to  such  holders  pursuant  to  the  conversions
(collectively,  the "RECORDS"),  as shall be reasonably deemed necessary by each
Inspector to enable each Inspector to exercise its due diligence responsibility,
and cause  the  Company's  officers,  directors  and  employees  to  supply  all
information which any Inspector may reasonably  request for purposes of such due
diligence;  provided,  however, that each Inspector shall hold in confidence and
shall not make any  disclosure  (except to an  Investor)  of any Record or other
information which the Company  determines in good faith to be confidential,  and
of which determination the Inspectors are so notified, unless (a) the disclosure
of such Records is necessary to avoid or correct a  misstatement  or omission in
any Registration Statement,  (b) the release of such Records is ordered pursuant
to a  subpoena  or other  order  from a court or  government  body of  competent
jurisdiction,  or (c) the  information  in such Records has been made  generally
available  to the public  other than by  disclosure  in violation of this or any
other agreement.  The Company shall not be required to disclose any confidential
information  in such Records to any  Inspector  until and unless such  Inspector
shall  have  entered  into  confidentiality  agreements  (in form and  substance
satisfactory   to  the  Company)   with  the  Company   with  respect   thereto,
substantially  in the form of this Section 3(k).  Each  Investor  agrees that it
shall,  upon learning that disclosure of such Records is sought in or by a court
or  governmental  body of competent  jurisdiction  or through other means,  give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate  action to prevent  disclosure  of, or to obtain a protective  order
for,  the  Records  deemed  confidential.   Nothing  herein  (or  in  any  other
confidentiality  agreement between the Company and any Investor) shall be deemed
to limit the Investor's ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations.

                                       8
<PAGE>

            L. The Company shall hold in confidence  and not make any disclosure
of  information  concerning  an  Investor  provided  to the  Company  unless (i)
disclosure  of such  information  is  necessary  to comply with federal or state
securities  laws, (ii) the disclosure of such  information is necessary to avoid
or correct a misstatement or omission in any Registration  Statement,  (iii) the
release of such  information  is ordered  pursuant  to a subpoena or other order
from a court  or  governmental  body of  competent  jurisdiction,  or (iv)  such
information  has been made  generally  available  to the  public  other  than by
disclosure in violation of this or any other agreement.  The Company agrees that
it shall,  upon  learning  that  disclosure  of such  information  concerning an
Investor  is  sought  in  or  by a  court  or  governmental  body  of  competent
jurisdiction  or through other means,  give prompt notice to such Investor prior
to making such disclosure,  and allow the Investor, at its expense, to undertake
appropriate  action to prevent  disclosure  of, or to obtain a protective  order
for, such information.

            M. The  Company  shall  (i)  cause  all the  Registrable  Securities
covered by the Registration  Statement to be listed on each national  securities
exchange on which  securities  of the same class or series issued by the Company
are then listed,  if any, if the listing of such Registrable  Securities is then
permitted under the rules of such exchange, or (ii) to the extent the securities
of the same  class  or  series  are not then  listed  on a  national  securities
exchange,   secure  the  designation  and  quotation,  of  all  the  Registrable
Securities  covered by the Registration  Statement on Nasdaq or, if not eligible
for  Nasdaq,  on  Nasdaq  SmallCap  or,  if not  eligible  for  Nasdaq or Nasdaq
SmallCap, on the OTCBB and, without limiting the generality of the foregoing, to
arrange for at least two market makers to register with the National Association
of Securities  Dealers,  Inc.  ("NASD") as such with respect to such Registrable
Securities.

            N. The Company shall provide a transfer agent and  registrar,  which
may be a single  entity,  for the  Registrable  Securities  not  later  than the
effective date of the Registration Statement.

            O.  The  Company  shall   cooperate  with  the  Investors  who  hold
Registrable   Securities   being  offered  and  the  managing   underwriter   or
underwriters,  if any, to  facilitate  the timely  preparation  and  delivery of
certificates  (not bearing any  restrictive  legends)  representing  Registrable
Securities to be offered  pursuant to a  Registration  Statement and enable such
certificates to be in such denominations or amounts,  as the case may be, as the
managing  underwriter or  underwriters,  if any, or the Investors may reasonably
request  and   registered  in  such  names  as  the  managing   underwriter   or
underwriters,  if any, or the  Investors  may  request,  and,  within  three (3)
business  days  after  a  Registration   Statement  which  includes  Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel  selected by the Company to deliver,  to the transfer  agent
for the Registrable  Securities (with copies to the Investors whose  Registrable
Securities  are included in such  Registration  Statement) an instruction in the
form  attached  hereto as EXHIBIT 1 and an  opinion of such  counsel in the form
attached hereto as EXHIBIT 2.

                                       9
<PAGE>

            P. At the  request of the holders of a  majority-in-interest  of the
Registrable  Securities,  the Company  shall  prepare and file with the SEC such
amendments   (including   post-effective   amendments)   and  supplements  to  a
Registration   Statement  and  any  prospectus   used  in  connection  with  the
Registration  Statement  as may be  necessary  in  order to  change  the plan of
distribution set forth in such Registration Statement.

            Q. From and after the date of this Agreement, the Company shall not,
and shall not agree to,  allow the holders of any  securities  of the Company to
include any of their securities in any Registration Statement under Section 2(a)
hereof or any amendment or supplement  thereto under Section 3(b) hereof without
the  consent  of  the  holders  of a  majority-in-interest  of  the  Registrable
Securities.

            R. The Company shall take all other reasonable  actions necessary to
expedite and facilitate  disposition by the Investors of Registrable  Securities
pursuant to a Registration Statement.

      4. OBLIGATIONS OF THE INVESTORS.

      In connection with the  registration of the  Registrable  Securities,  the
Investors shall have the following obligations:

            A. It shall  be a  condition  precedent  to the  obligations  of the
Company to complete the registration  pursuant to this Agreement with respect to
the  Registrable  Securities of a particular  Investor that such Investor  shall
furnish to the  Company  such  information  regarding  itself,  the  Registrable
Securities  held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such  Registrable  Securities  and shall execute such documents in connection
with such registration as the Company may reasonably request. At least three (3)
business  days prior to the first  anticipated  filing date of the  Registration
Statement, the Company shall notify each Investor of the information the Company
requires from each such Investor.

            B. Each Investor,  by such Investor's  acceptance of the Registrable
Securities,  agrees to cooperate with the Company as reasonably requested by the
Company  in  connection  with the  preparation  and  filing of the  Registration
Statements  hereunder,  unless such Investor has notified the Company in writing
of such  Investor's  election  to  exclude  all of such  Investor's  Registrable
Securities from the Registration Statements.

            C. In the  event  Investors  holding a  majority-in-interest  of the
Registrable  Securities  being  registered  (with the  approval  of the  Initial
Investors)  determine to engage the services of an  underwriter,  each  Investor
agrees  to  enter  into  and  perform  such  Investor's   obligations  under  an
underwriting  agreement,  in  usual  and  customary  form,  including,   without
limitation,  customary  indemnification and contribution  obligations,  with the
managing  underwriter  of such  offering  and take  such  other  actions  as are
reasonably  required in order to expedite or facilitate  the  disposition of the
Registrable Securities, unless such Investor has notified the Company in writing
of such  Investor's  election  to  exclude  all of such  Investor's  Registrable
Securities from such Registration Statement.

                                       10
<PAGE>

            D. Each  Investor  agrees that,  upon receipt of any notice from the
Company of the  happening of any event of the kind  described in Section 3(f) or
3(g),  such Investor will  immediately  discontinue  disposition  of Registrable
Securities  pursuant to the  Registration  Statement  covering such  Registrable
Securities  until such Investor's  receipt of the copies of the  supplemented or
amended  prospectus  contemplated by Section 3(f) or 3(g) and, if so directed by
the Company,  such Investor  shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a  certificate  of  destruction)
all  copies in such  Investor's  possession,  of the  prospectus  covering  such
Registrable Securities current at the time of receipt of such notice.

            E. No Investor  may  participate  in any  underwritten  registration
hereunder  unless such Investor (i) agrees to sell such  Investor's  Registrable
Securities on the basis provided in any  underwriting  arrangements in usual and
customary  form  entered into by the Company,  (ii)  completes  and executes all
questionnaires,  powers of attorney,  indemnities,  underwriting  agreements and
other  documents  reasonably  required  under  the  terms  of such  underwriting
arrangements,  and (iii)  agrees to pay its pro rata  share of all  underwriting
discounts  and  commissions  and any expenses in excess of those  payable by the
Company pursuant to Section 5 below.

      5. EXPENSES OF REGISTRATION.

      All   reasonable   expenses,   other  than   underwriting   discounts  and
commissions,   incurred   in   connection   with   registrations,   filings   or
qualifications pursuant to Sections 2 and 3, including,  without limitation, all
registration,  listing and qualification fees, printers and accounting fees, the
fees and  disbursements of counsel for the Company,  and the reasonable fees and
disbursements  of one  counsel  selected by the  Initial  Investors  pursuant to
Sections 2(b) and 3(h) hereof shall be borne by the Company.

      6. INDEMNIFICATION.

      In the event any  Registrable  Securities  are included in a  Registration
Statement under this Agreement:

                                       11
<PAGE>

            A. To the extent permitted by law, the Company will indemnify,  hold
harmless  and defend (i) each  Investor who holds such  Registrable  Securities,
(ii) the directors,  officers,  partners,  employees, agents and each person who
controls  any  Investor  within the  meaning  of the 1933 Act or the  Securities
Exchange Act of 1934, as amended (the "1934 ACT"), if any, (iii) any underwriter
(as  defined  in the 1933  Act)  for the  Investors,  and  (iv)  the  directors,
officers,  partners, employees and each person who controls any such underwriter
within  the  meaning  of the  1933  Act or  the  1934  Act,  if  any  (each,  an
"INDEMNIFIED  PERSON"),  against any joint or several losses,  claims,  damages,
liabilities  or expenses  (collectively,  together with actions,  proceedings or
inquiries by any regulatory or self-regulatory  organization,  whether commenced
or  threatened,  in respect  thereof,  "CLAIMS") to which any of them may become
subject  insofar as such Claims  arise out of or are based upon:  (i) any untrue
statement  or alleged  untrue  statement  of a material  fact in a  Registration
Statement or the omission or alleged  omission to state  therein a material fact
required  to  be  stated  or  necessary  to  make  the  statements  therein  not
misleading;  (ii) any untrue statement or alleged untrue statement of a material
fact contained in any preliminary prospectus if used prior to the effective date
of such Registration Statement, or contained in the final prospectus (as amended
or  supplemented,  if the  Company  files any  amendment  thereof or  supplement
thereto with the SEC) or the omission or alleged  omission to state  therein any
material fact  necessary to make the  statements  made therein,  in light of the
circumstances  under which the statements therein were made, not misleading;  or
(iii) any  violation  or alleged  violation  by the Company of the 1933 Act, the
1934 Act, any other law,  including,  without  limitation,  any state securities
law, or any rule or regulation  thereunder  relating to the offer or sale of the
Registrable  Securities (the matters in the foregoing  clauses (i) through (iii)
being,  collectively,  "Violations").  Subject to the  restrictions set forth in
Section  6(c) with  respect to the number of legal  counsel,  the Company  shall
reimburse the Indemnified Person, promptly as such expenses are incurred and are
due and payable,  for any  reasonable  legal fees or other  reasonable  expenses
incurred by them in connection with  investigating  or defending any such Claim.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information  furnished in writing to the Company by any Indemnified  Person
or underwriter for such Indemnified  Person expressly for use in connection with
the preparation of such Registration  Statement or any such amendment thereof or
supplement  thereto, if such prospectus was timely made available by the Company
pursuant  to  Section  3(c)  hereof;  (ii)  shall not apply to  amounts  paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company,  which consent shall not be unreasonably  withheld;  and
(iii) with respect to any preliminary prospectus, shall not inure to the benefit
of any Indemnified  Person if the untrue  statement or omission of material fact
contained in the  preliminary  prospectus was corrected on a timely basis in the
prospectus,  as then amended or  supplemented,  such  corrected  prospectus  was
timely made  available by the Company  pursuant to Section 3(c) hereof,  and the
Indemnified  Person was  promptly  advised in writing  not to use the  incorrect
prospectus  prior to the use giving  rise to a  Violation  and such  Indemnified
Person,  notwithstanding  such advice,  used it. Such indemnity  shall remain in
full force and effect  regardless of any  investigation  made by or on behalf of
the  Indemnified  Person  and shall  survive  the  transfer  of the  Registrable
Securities by the Investors pursuant to Section 9.

                                       12
<PAGE>

            B. In  connection  with  any  Registration  Statement  in  which  an
Investor is  participating,  each such Investor agrees severally and not jointly
to  indemnify,  hold  harmless  and  defend,  to the same extent and in the same
manner set forth in Section 6(a), the Company,  each of its  directors,  each of
its  officers who signs the  Registration  Statement,  each person,  if any, who
controls  the Company  within the  meaning of the 1933 Act or the 1934 Act,  any
underwriter  and  any  other  shareholder  selling  securities  pursuant  to the
Registration  Statement  or any of its  directors  or officers or any person who
controls such  shareholder or underwriter  within the meaning of the 1933 Act or
the  1934  Act  (collectively  and  together  with  an  Indemnified  Person,  an
"INDEMNIFIED PARTY"), against any Claim to which any of them may become subject,
under the 1933 Act, the 1934 Act or otherwise,  insofar as such Claim arises out
of or is based upon any Violation by such  Investor,  in each case to the extent
(and only to the extent)  that such  Violation  occurs in  reliance  upon and in
conformity  with written  information  furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and subject to
Section 6(c) such Investor will reimburse any legal or other expenses  (promptly
as such  expenses are incurred and are due and payable)  reasonably  incurred by
them in connection  with  investigating  or defending any such Claim;  provided,
however,  that the indemnity  agreement contained in this Section 6(b) shall not
apply to amounts paid in settlement of any Claim if such  settlement is effected
without the prior written  consent of such Investor,  which consent shall not be
unreasonably withheld;  provided,  further,  however, that the Investor shall be
liable under this Agreement (including this Section 6(b) and Section 7) for only
that amount as does not exceed the net proceeds to such  Investor as a result of
the sale of Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect  regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the   Registrable   Securities   by  the   Investors   pursuant  to  Section  9.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement  contained  in this  Section  6(b)  with  respect  to any  preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the  preliminary  prospectus
was  corrected  on a  timely  basis  in  the  prospectus,  as  then  amended  or
supplemented.

            C. Promptly  after receipt by an  Indemnified  Person or Indemnified
Party  under  this  Section  6 of  notice  of the  commencement  of  any  action
(including any  governmental  action),  such  Indemnified  Person or Indemnified
Party  shall,  if a  Claim  in  respect  thereof  is  to  be  made  against  any
indemnifying  party under this  Section 6, deliver to the  indemnifying  party a
written notice of the commencement  thereof,  and the  indemnifying  party shall
have the right to participate in, and, to the extent the  indemnifying  party so
desires,  jointly with any other indemnifying party similarly noticed, to assume
control  of the  defense  thereof  with  counsel  mutually  satisfactory  to the
indemnifying  party and the Indemnified  Person or the Indemnified Party, as the
case may be; provided,  however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel  with the fees and expenses to be
paid by the  indemnifying  party,  if,  in the  reasonable  opinion  of  counsel
retained by the indemnifying  party, the  representation  by such counsel of the
Indemnified  Person or  Indemnified  Party and the  indemnifying  party would be
inappropriate  due to actual  or  potential  differing  interests  between  such
Indemnified  Person or Indemnified Party and any other party represented by such
counsel  in such  proceeding.  The  indemnifying  party  shall  pay for only one
separate legal counsel for the Indemnified  Persons or the Indemnified  Parties,
as applicable,  and such legal counsel shall be selected by Investors  holding a
majority-in-interest  of the Registrable Securities included in the Registration
Statement   to   which   the   Claim   relates   (with   the   approval   of   a
majority-in-interest of the Initial Investors), if the Investors are entitled to
indemnification  hereunder,  or the  Company,  if the  Company  is  entitled  to
indemnification  hereunder, as applicable. The failure to deliver written notice
to the  indemnifying  party within a reasonable time of the  commencement of any
such action shall not relieve such  indemnifying  party of any  liability to the
Indemnified  Person or  Indemnified  Party  under this  Section 6, except to the
extent  that the  indemnifying  party is actually  prejudiced  in its ability to
defend such action. The indemnification required by this Section 6 shall be made
by  periodic   payments  of  the  amount   thereof  during  the  course  of  the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.

                                       13
<PAGE>

      7. CONTRIBUTION.

      To the extent any  indemnification  by an indemnifying party is prohibited
or  limited  by  law,  the  indemnifying   party  agrees  to  make  the  maximum
contribution  with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided,  however, that
(i) no contribution shall be made under  circumstances where the maker would not
have been  liable for  indemnification  under the fault  standards  set forth in
Section  6, (ii) no  seller  of  Registrable  Securities  guilty  of  fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution  from any seller of Registrable  Securities who was not
guilty of such fraudulent  misrepresentation,  and  (iii)contribution  (together
with any  indemnification  or other  obligations  under this  Agreement)  by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.

      8. REPORTS UNDER THE 1934 ACT.

      With a view to making  available to the Investors the benefits of Rule 144
promulgated  under the 1933 Act or any other  similar rule or  regulation of the
SEC that may at any time permit the investors to sell  securities of the Company
to the public without registration ("RULE 144"), the Company agrees to:

            A. make and keep public  information  available,  as those terms are
understood and defined in Rule 144;

            B.  file  with the SEC in a timely  manner  all  reports  and  other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company  remains  subject to such  requirements  (it being  understood  that
nothing herein shall limit the Company's  obligations  under Section 4(c) of the
Securities  Purchase  Agreement)  and the  filing  of  such  reports  and  other
documents is required for the applicable provisions of Rule 144; and

            C.  furnish  to  each   Investor  so  long  as  such  Investor  owns
Registrable  Securities,  promptly upon request,  (i) a written statement by the
Company that it has complied  with the reporting  requirements  of Rule 144, the
1933 Act and the 1934 Act,  (ii) a copy of the most recent  annual or  quarterly
report of the  Company  and such other  reports  and  documents  so filed by the
Company,  and (iii) such other  information  as may be  reasonably  requested to
permit  the  Investors  to sell such  securities  pursuant  to Rule 144  without
registration.

      9. ASSIGNMENT OF REGISTRATION RIGHTS.

      The rights under this Agreement shall be  automatically  assignable by the
Investors to any transferee of all or any portion of Registrable  Securities if:
(i) the  Investor  agrees in writing with the  transferee  or assignee to assign
such rights,  and a copy of such  agreement is furnished to the Company within a
reasonable time after such assignment,  (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such  transferee or assignee,  and (b) the  securities  with
respect to which such  registration  rights are being  transferred  or assigned,
(iii)  following  such transfer or assignment,  the further  disposition of such
securities by the  transferee  or assignee is restricted  under the 1933 Act and
applicable  state  securities  laws,  (iv) at or  before  the time  the  Company
receives the written notice  contemplated  by clause (ii) of this sentence,  the
transferee or assignee  agrees in writing with the Company to be bound by all of
the  provisions  contained  herein,  (v) such  transfer  shall have been made in
accordance  with  the  applicable   requirements  of  the  Securities   Purchase
Agreement,  and (vi) such transferee  shall be an "ACCREDITED  INVESTOR" as that
term defined in Rule 501 of Regulation D promulgated under the 1933 Act.

                                       14
<PAGE>

      10. AMENDMENT OF REGISTRATION RIGHTS.

      Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with written consent of the Company, each of the Initial
Investors  (to  the  extent  such  Initial   Investor  still  owns   Registrable
Securities)  and  Investors  who hold a  majority  interest  of the  Registrable
Securities.  Any amendment or waiver effected in accordance with this Section 10
shall be binding upon each Investor and the Company.

      11. MISCELLANEOUS.

            A. A person  or  entity  is  deemed  to be a holder  of  Registrable
Securities  whenever  such  person or entity  owns of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two or more  persons  or  entities  with  respect  to the  same
Registrable  Securities,  the Company shall act upon the basis of  instructions,
notice  or  election  received  from the  registered  owner of such  Registrable
Securities.

            B. Any  notices  required or  permitted  to be given under the terms
hereof shall be sent by certified or registered mail (return receipt  requested)
or delivered personally or by courier (including a recognized overnight delivery
service) or by facsimile and shall be effective five (5) days after being placed
in the mail,  if mailed by regular  United  States  mail,  or upon  receipt,  if
delivered  personally or by courier  (including a recognized  overnight delivery
service) or by facsimile,  in each case addressed to a party.  The addresses for
such communications shall be:

                           If to the Company:

                           Pacificap Entertainment Holdings, Inc.
                           12868 Via Latina
                           Del Mar, California  92014
                           Attention: President
                           Telephone:  858-481-2207
                           Facsimile:   858-481-2207

                                       15
<PAGE>

                           With a copy to:

                           Sichenzia Ross Friedman Ference LLP
                           1065 Avenue of the Americas
                           New York, New York  10018
                           Attention:  Gregory Sichenzia, Esq.
                           Telephone:  212-930-9700
                           Facsimile:   212-930-9725

If to an Investor:  to the address set forth  immediately  below such Investor's
name on the signature pages to the Securities Purchase Agreement.

                           With a copy to:

                           Ballard Spahr Andrews & Ingersoll, LLP
                           1735 Market Street
                           51st Floor
                           Philadelphia, Pennsylvania  19103
                           Attention:  Gerald J. Guarcini, Esq.
                           Telephone:  215-865-8625
                           Facsimile:  215-864-8999
                           Email:  guarcini@ballardspahr.com

            C.  Failure of any party to exercise  any right or remedy under this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

            D. THIS  AGREEMENT  SHALL BE ENFORCED,  GOVERNED BY AND CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES
OF  CONFLICT  OF  LAWS.  THE  PARTIES  HERETO  HEREBY  SUBMIT  TO THE  EXCLUSIVE
JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED NEW YORK, NEW YORK WITH
RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO
IN CONNECTION HEREWITH OR THE TRANSACTIONS  CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES   IRREVOCABLY  WAIVE  THE  DEFENSE  OF  AN  INCONVENIENT  FORUM  TO  THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING.  BOTH PARTIES FURTHER AGREE THAT SERVICE
OF  PROCESS  UPON A PARTY  MAILED BY FIRST  CLASS  MAIL SHALL BE DEEMED IN EVERY
RESPECT  EFFECTIVE  SERVICE  OF  PROCESS  UPON THE  PARTY  IN ANY  SUCH  SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY  OTHER  MANNER   PERMITTED  BY  LAW.   BOTH  PARTIES   AGREE  THAT  A  FINAL
NON-APPEALABLE  JUDGMENT IN ANY SUCH SUIT OR PROCEEDING  SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER  JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL  MANNER.  THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE  ARISING  UNDER
THIS  AGREEMENT  SHALL  BE  RESPONSIBLE  FOR ALL FEES  AND  EXPENSES,  INCLUDING
ATTORNEYS'  FEES,  INCURRED  BY THE  PREVAILING  PARTY IN  CONNECTION  WITH SUCH
DISPUTE.

                                       16
<PAGE>

            E. In the event that any  provision of this  Agreement is invalid or
unenforceable  under any applicable  statute or rule of law, then such provision
shall be deemed  inoperative  to the extent that it may conflict  therewith  and
shall be deemed  modified  to  conform  with such  statute  or rule of law.  Any
provision  hereof which may prove invalid or  unenforceable  under any law shall
not affect the validity or enforceability of any other provision hereof.

            F. This  Agreement,  the  Notes,  the  Warrants  and the  Securities
Purchase Agreement (including all schedules and exhibits thereto) constitute the
entire  agreement  among the parties  hereto with respect to the subject  matter
hereof  and  thereof.  There  are  no  restrictions,   promises,  warranties  or
undertakings, other than those set forth or referred to herein and therein. This
Agreement and the Securities  Purchase Agreement  supersede all prior agreements
and  understandings  among the parties hereto with respect to the subject matter
hereof and thereof.

            G. Subject to the  requirements of Section 9 hereof,  this Agreement
shall be  binding  upon and  inure  to the  benefit  of the  parties  and  their
successors and assigns.

            H. The headings in this  Agreement are for  convenience of reference
only and  shall  not  form  part of,  or  affect  the  interpretation  of,  this
Agreement.

            I. This Agreement may be executed in two or more counterparts,  each
of which shall be deemed an original but all of which shall  constitute  one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party. This Agreement, once executed by
a party, may be delivered to the other party hereto by facsimile transmission of
a copy of this Agreement  bearing the signature of the party so delivering  this
Agreement.

            J.  Each  party  shall  do and  perform,  or  cause  to be done  and
performed,  all such further acts and things,  and shall execute and deliver all
such other  agreements,  certificates,  instruments and documents,  as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

            K. Except as  otherwise  provided  herein,  all  consents  and other
determinations  to be made by the Investors  pursuant to this Agreement shall be
made by Investors holding a majority of the Registrable  Securities,  determined
as if the all of the  Notes  then  outstanding  have  been  converted  into  for
Registrable Securities.

                                       17
<PAGE>

            L. The Company  acknowledges  that a breach by it of its obligations
hereunder will cause  irreparable  harm to each Investor by vitiating the intent
and purpose of the transactions  contemplated hereby.  Accordingly,  the Company
acknowledges  that the  remedy at law for breach of its  obligations  under this
Agreement will be inadequate and agrees,  in the event of a breach or threatened
breach by the Company of any of the provisions  under this Agreement,  that each
Investor shall be entitled,  in addition to all other available  remedies in law
or in  equity,  and  in  addition  to the  penalties  assessable  herein,  to an
injunction or injunctions  restraining,  preventing or curing any breach of this
Agreement and to enforce  specifically the terms and provisions hereof,  without
the necessity of showing  economic  loss and without any bond or other  security
being required.

            M. The  language  used in this  Agreement  will be  deemed to be the
language  chosen by the parties to express their mutual intent,  and no rules of
strict construction will be applied against any party.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       18
<PAGE>

      IN WITNESS WHEREOF, the Company and the undersigned Initial Investors have
caused this Agreement to be duly executed as of the date first above written.

PACIFICAP ENTERTAINMENT
HOLDINGS, INC.

/s/ Ed Litwak
-------------
Ed Litwak
President

AJW PARTNERS, LLC

By:  SMS Group, LLC

/s/ Corey S. Ribotsky
---------------------
Corey S. Ribotsky
Manager

AJW OFFSHORE, LTD.

By:  First Street Manager II, LLC

/s/ Corey S. Ribotsky
---------------------
Corey S. Ribotsky
Manager

AJW QUALIFIED PARTNERS, LLC

By:  AJW Manager, LLC

/s/ Corey S. Ribotsky
---------------------
Corey S. Ribotsky
Manager

NEW MILLENNIUM CAPITAL PARTNERS, II, LLC

By:  First Street Manager II, LLC

/s/ Corey S. Ribotsky
---------------------
Corey S. Ribotsky
Manager

                                       19EXHIBIT 4.13

                          GUARANTY AND PLEDGE AGREEMENT

      GUARANTY  AND PLEDGE  AGREEMENT  (this  "Agreement"),  dated as of June 8,
2004, among Pacificap  Entertainment  Holdings,  Inc., a Nevada corporation (the
"Company"), Michael Riley (the "Pledgor"), and the pledgees signatory hereto and
their  respective  endorsees,   transferees  and  assigns   (collectively,   the
"Pledgees").

                              W I T N E S S E T H:

      WHEREAS,  pursuant  to a  Securities  Purchase  Agreement,  dated the date
hereof, between Company and the Pledgees (the "Purchase Agreement"), Company has
agreed to issue to the Pledgees and the  Pledgees  have agreed to purchase  from
Company certain of Company's 10% Callable  Secured  Convertible  Notes,  due two
years from the date of issue (the "Notes"), which are convertible into shares of
Company's  Common  Stock,  par value $.001 per share (the  "Common  Stock").  In
connection  therewith,  Company  shall issue the Pledgees  certain  Common Stock
purchase warrants (the "Warrants"); and

      WHEREAS,  as a  material  inducement  to the  Pledgees  to enter  into the
Purchase Agreement, the Pledgees have required and the Pledgor has agreed (i) to
unconditionally guarantee the timely and full satisfaction of all obligations of
the Company,  whether matured or unmatured, now or hereafter existing or created
and  becoming  due  and  payable  (the  "Obligations")  to the  Pledgees,  their
successors,  endorsees,  transferees or assigns under the Transaction  Documents
(as  defined in the  Purchase  Agreement)  to the extent of the  Collateral  (as
defined  in  Section  5  hereof),  and  (ii) to  grant  to the  Pledgees,  their
successors,  endorsees, transferees or assigns a security interest in all of the
shares  of  Common  Stock  currently  owned by the  Pledgor  (collectively,  the
"Shares"),  as collateral  security for Obligations.  Terms used and not defined
herein shall have the meaning ascribed to them in the Purchase Agreement.

      NOW, THEREFORE, in consideration of the foregoing recitals, and the mutual
covenants contained herein, the parties hereby agree as follows:

      1.  Guaranty.  To  the  extent  of  the  Collateral,  the  Pledgor  hereby
absolutely,  unconditionally and irrevocably  guarantees to the Pledgees,  their
successors,  endorsees, transferees and assigns the due and punctual performance
and  payment  of the  Obligations  owing  to  the  Pledgees,  their  successors,
endorsees, transferees or assigns when due, all at the time and place and in the
amount  and  manner  prescribed  in,  and  otherwise  in  accordance  with,  the
Transaction  Documents,  regardless of any defense or set-off counterclaim which
the Company or any other person may have or assert, and regardless of whether or
not the Pledgees or anyone on behalf of the Pledgees  shall have  instituted any
suit,  action or  proceeding  or  exhausted  its  remedies or taken any steps to
enforce any rights  against  the Company or any other  person to compel any such
performance  or observance or to collect all or part of any such amount,  either
pursuant to the provisions of the Transaction  Documents or at law or in equity,
and regardless of any other condition or contingency.  The Pledgor shall have no
obligation  whatsoever  to the Pledgees  beyond the  Collateral  pledged for the
Obligations set forth herein.

<PAGE>

      2. Waiver of Demand.  The Pledgor hereby  unconditionally:  (i) waives any
requirement that the Pledgees,  in the event of a breach in any material respect
by the Company of any of its  representations  or warranties in the  Transaction
Documents,  first make demand upon,  or seek to enforce  remedies  against,  the
Company or any other person before demanding  payment of enforcement  hereunder;
(ii) covenants  that this  Agreement  will not be discharged  except by complete
performance of all the Obligations to the extent of the Collateral; (iii) agrees
that this Agreement shall remain in full force and effect without regard to, and
shall not be affected  or  impaired,  without  limitation,  by, any  invalidity,
irregularity  or  unenforceability  in  whole  or in  part  of  the  Transaction
Documents or any limitation on the liability of the Company  thereunder,  or any
limitation  on the  method  or  terms of  payment  thereunder  which  may now or
hereafter  be  caused or  imposed  in any  manner  whatsoever;  and (iv)  waives
diligence, presentment and protest with respect to, and notice of default in the
performance  or payment of any  Obligation by the Company under or in connection
with the Transaction Documents.

      3.  Release.  The  obligations,  covenants,  agreements  and duties of the
Pledgor hereunder shall not be released,  affected or impaired by any assignment
or  transfer,  in  whole  or in  part,  of  the  Transaction  Documents  or  any
Obligation,  although made without  notice to or the consent of the Pledgor,  or
any  waiver by the  Pledgees,  or by any other  person,  of the  performance  or
observance  by the Company or the Pledgor of any of the  agreements,  covenants,
terms or conditions contained in the Transaction Documents, or any indulgence in
or the  extension  of the  time  or  renewal  thereof,  or the  modification  or
amendment  (whether  material or  otherwise),  or the  voluntary or  involuntary
liquidation,  sale or other  disposition  of all or any  portion of the stock or
assets  of  the  Company  or  the  Pledgor,  or  any  receivership,  insolvency,
bankruptcy,  reorganization, or other similar proceedings, affecting the Company
or the  Pledgor or any assets of the Company or the  Pledgor,  or the release of
any proper from any security for any  Obligation,  or the impairment of any such
property or security,  or the release or discharge of the Company or the Pledgor
from the performance or observance of any agreement, covenant, term or condition
contained in or arising out of the Transaction Documents by operation of law, or
the merger or consolidation of the Company, or any other cause,  whether similar
or dissimilar to the foregoing.

      4. Subrogation.

            (a) Unless and until complete  performance of all the Obligations to
the extent of the Collateral,  the Pledgor shall not be entitled to exercise any
right of subrogation to any of the rights of the Pledgees against the Company or
any  collateral  security or guaranty  held by the  Pledgees  for the payment or
performance  of the  Obligations,  nor shall the Pledgor seek any  reimbursement
from the Company in respect of payments made by the Pledgor hereunder.

            (b) In the extent that the Pledgor shall become obligated to perform
or pay any sums  hereunder,  or in the event that for any reason the  Company is
now or shall hereafter  become  indebted to the Pledgor,  the amount of such sum
shall at all times be subordinate  as to lien,  time of payment and in all other
respects,  to the amounts owing to the Pledgees under the Transaction  Documents
and the  Pledgor  shall  not  enforce  or  receive  payment  thereof  until  all
Obligations  due to the Pledgees  under the  Transaction  have been performed or
paid.  Nothing herein contained is intended or shall be construed to give to the
Pledgor any right of subrogation in or under the Transaction  Documents,  or any
right to participate in any way therein,  or in any right,  title or interest in
the assets of the Pledgees.

                                       2
<PAGE>

      5.  Security.   As  collateral  security  for  the  punctual  payment  and
performance, when due, by the Company of all the Obligations, the Pledgor hereby
pledges  with,  hypothecates,  transfers  and assigns to the Pledgees all of the
Shares and all proceeds,  shares and other  securities  received,  receivable or
otherwise  distributed  in respect of or in exchange for the Shares,  including,
without  limitation,  any shares and other securities into which such Shares may
be convertible or exchangeable  (collectively,  the "Additional  Collateral" and
together  with the  Shares,  the  "Collateral").  Simultaneously  herewith,  the
Pledgor  shall  deliver to the  Pledgees  the  certificate(s)  representing  the
Shares,  stamped with a bank  medallion  guarantee,  along with a stock transfer
power duly  executed  in blank by the  Pledgor,  to be held by the  Pledgees  as
security.  Any  Collateral  received  by the Pledgor on or after the date hereof
shall be immediately  delivered to the Pledgees together with any executed stock
powers or other transfer documents requested by the Pledgees,  which request may
be made at any time prior to the date when the Obligations  shall have been paid
and otherwise satisfied in full.

      6. Voting Power, Dividends, Etc. and other Agreements.

            (a) Unless and until an Event of Default  (as set forth in Section 7
hereof) has occurred, the Pledgor shall be entitled to:

                  (i) Exercise all voting and/or consensual powers pertaining to
the Collateral, or any part thereof, for all purposes;

                  (ii)  Receive and retain  dividends  paid with  respect to the
Collateral; and

                  (iii)  Receive  the  benefits  of any  income  tax  deductions
available to the Pledgor as a shareholder of the Company.

            (b) The  Pledgor  agrees  that it will not sell,  assign,  transfer,
pledge, hypothecate, encumber or otherwise dispose of the Collateral.

            (c) The Pledgor and the Company  jointly and severally  agree to pay
all costs including all reasonable attorneys' fees and disbursements incurred by
the Pledgees in enforcing this Agreement in accordance with its terms.

      7. Default and Remedies.

            (a) For the  purposes of this  Agreement,  "Event of Default"  shall
mean:

                  (i)  default  in or under  any of the  Obligations  after  the
            expiration, without cure, of any applicable cure period;

                  (ii) a breach in any material respect by the Company of any of
            its representations or warranties in the Transaction Documents; or

                                       3
<PAGE>

                  (iii) a breach in any  material  respect by the Pledgor of any
            of its representations or warranties in this Agreement.

            (b) the Pledgees  shall have the following  rights upon any Event of
Default:

                  (i) the rights and remedies provided by the Uniform Commercial
            Code as  adopted  by the State of New York (the  "UCC") (as said law
            may at any time be amended);

                  (ii) the right to receive and retain all  dividends,  payments
            and  other  distributions  of  any  kind  upon  any  or  all  of the
            Collateral;

                  (iii) the right to cause  any or all of the  Collateral  to be
            transferred  to its own name or to the name of its designee and have
            such transfer recorded in any place or places deemed  appropriate by
            the Pledgees; and

                  (iv) the  right to sell,  at a public  or  private  sale,  the
            Collateral  or any part thereof for cash,  upon credit or for future
            delivery, and at such price or prices in accordance with the UCC (as
            such law may be amended  from time to time).  Upon any such sale the
            Pledgees shall have the right to deliver, assign and transfer to the
            purchaser  thereof the  Collateral so sold.  The Pledgees shall give
            the  Pledgor  not less  than ten (10)  days'  written  notice of its
            intention  to make any such sale.  Any such  sale,  shall be held at
            such time or times during ordinary  business hours and at such place
            or places as the  Pledgees  may fix in the notice of such sale.  The
            Pledgees  may  adjourn  or  cancel  any sale or cause the same to be
            adjourned  from time to time by  announcement  at the time and place
            fixed for the  sale,  and such sale may be made at any time or place
            to which the same may be so adjourned. In case of any sale of all or
            any part of the  Collateral  upon terms  calling for payments in the
            future, any Collateral so sold may be retained by the Pledgees until
            the selling price is paid by the purchaser thereof, but the Pledgees
            shall  incur  no  liability  in the  case  of the  failure  of  such
            purchaser to take up and pay for the  Collateral so sold and, in the
            case of such failure,  such  Collateral  may again be sold upon like
            notice.  The Pledgees,  however,  instead of exercising the power of
            sale herein  conferred  upon them, may proceed by a suit or suits at
            law or in equity to  foreclose  the  security  interest and sell the
            Collateral,  or any portion thereof, under a judgment or decree of a
            court or courts of competent  jurisdiction,  the Pledgor having been
            given due notice of all such  action.  The  Pledgees  shall incur no
            liability  as a  result  of a sale  of the  Collateral  or any  part
            thereof.  All  proceeds  of  any  such  sale,  after  deducting  the
            reasonable  expenses  and  reasonable  attorneys'  fees  incurred in
            connection  with such sale,  shall be applied  in  reduction  of the
            Obligations,  and  the  remainder,  if  any,  shall  be  paid to the
            Pledgor.

      8.  Application  of  Proceeds;  Release.  The  proceeds  of  any  sale  or
enforcement of or against all or any part of the Collateral,  and any other cash
or  collateral at the time held by the Pledgees  hereunder,  shall be applied by
the Pledgees  first to the payment of the  reasonable  costs of any such sale or
enforcement,  then to reimburse the Pledgees for any damages,  costs or expenses
incurred by the Pledgees as a result of an Event of Default, then to the payment
of the  principal  amount or stated valued (as  applicable)  of, and interest or
dividends  (as  applicable)  and any  other  payments  due in  respect  of,  the
Obligations.  The remainder,  if any,  shall be paid to the Pledgor.  As used in
this  Agreement,  "proceeds"  shall mean  cash,  securities  and other  property
realized in respect of, and distributions in kind of, the Collateral,  including
any thereof received under any reorganization, liquidation or adjustment of debt
of any issuer of securities included in the Collateral.

                                       4
<PAGE>

      9. Representations and Warranties.

            (a) The Pledgor hereby represents and warrants to the Pledgees that:

                  (i) the Pledgor has full power and  authority  and legal right
            to pledge the Collateral to the Pledgees  pursuant to this Agreement
            and this Agreement constitutes a legal, valid and binding obligation
            of the Pledgor, enforceable in accordance with its terms.

                  (ii) the execution, delivery and performance of this Agreement
            and other  instruments  contemplated  herein  will not  violate  any
            provision  of any  order or  decree  of any  court  or  governmental
            instrumentality  or of any  mortgage,  indenture,  contract or other
            agreement  to which the  Pledgor is a party or by which the  Pledgor
            and the Collateral may be bound, and will not result in the creation
            or imposition  of any lien,  charge or  encumbrance  on, or security
            interest  in,  any  of  the  Pledgor's  properties  pursuant  to the
            provisions of such mortgage, indenture, contract or other agreement.

                  (iii) the Pledgor is the sole record and  beneficial  owner of
            all of the Shares; and

                  (iv) the  Pledgor  owns the  Collateral  free and clear of all
            Liens.

            (b) The Company represents and warrants to the Pledgees that:

                  (i) it has no  knowledge  that any of the  representations  or
            warranties  of the  Pledgor  herein  are  incorrect  or false in any
            material respect;

                  (ii) all of the Shares  were  validly  issued,  fully paid and
            non-assessable; and

                  (iii) the Pledgor is the record holder of the Shares.

      10. No Waiver;  No  Election  of  Remedies.  No failure on the part of the
Pledgees to exercise,  and no delay in  exercising,  any right,  power or remedy
hereunder  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise by the  Pledgees of any right,  power or remedy  preclude  any other or
further  exercise  thereof or the exercise of any other right,  power or remedy.
The  remedies  herein  provided  are  cumulative  and are not  exclusive  of any
remedies  provided by law. In  addition,  the exercise of any right or remedy of
the Pledgees at law or equity or under this  Agreement  or any of the  documents
shall not be deemed to be an election of Pledgee's rights or remedies under such
documents or at law or equity.

                                       5
<PAGE>

      11.  Termination.  This Agreement shall terminate on the date on which all
Obligations have been performed, satisfied, paid or discharged in full.

      12. Further  Assurances.  The parties hereto agree that, from time to time
upon the written request of any party hereto, they will execute and deliver such
further documents and do such other acts and things as such party may reasonably
request in order fully to effect the  purposes of this  Agreement.  The Pledgees
acknowledge  that  they  are  aware  that  Pledgor  shall  have  no  obligations
whatsoever to the Pledgees beyond the Collateral pledged for the Obligations set
forth herein,  and no request for further  assurance may or shall  increase such
Obligations.

      13. Miscellaneous.

            (a) Modification.  This Agreement contains the entire  understanding
between the parties with respect to the subject  matter hereof and  specifically
incorporates  all prior oral and  written  agreements  relating  to the  subject
matter  hereof.  No portion  or  provision  of this  Agreement  may be  changed,
modified,  amended,  waived,  supplemented,  discharged,  canceled or terminated
orally or by any course of dealing,  or in any manner other than by an agreement
in writing, signed by the party to be charged.

            (b)  Notice.  Any  and  all  notices  or  other   communications  or
deliveries  required or permitted to be provided  hereunder  shall be in writing
and  shall be deemed  given and  effective  on the  earliest  of (i) the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  telephone  number  specified in this Section  prior to 6:30 p.m. (New
York City time) on a Business Day (as defined in the Purchase  Agreement),  (ii)
the Business Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile  telephone  number specified in this
Agreement later than 6:30 p.m. (New York City time) on any date and earlier than
11:59 p.m.  (New York City time) on such date,  (iii) the Business Day following
the  date of  mailing,  if  sent  by  nationally  recognized  overnight  courier
services,  or (iv) upon  actual  receipt  by the  party to whom  such  notice is
required to be given. The address for such notices and  communications  shall be
as follows:

         If to the Company:         Pacificap Entertainment Holdings, Inc.
                                    12268 Via Latina
                                    Del Mar, California  92914
                                    Attention: President
                                    Telephone:  858-481-2207
                                    Facsimile:   858-481-2207

                                       6
<PAGE>

         With copies to:            Sichenzia Ross Friedman Ference LLP
                                    1065 Avenue of the Americas
                                    New York, New York  10018
                                    Attention:  Gregory Sichenzia, Esq.
                                    Telephone:  212-930-9700
                                    Facsimile:   212-930-9725

         If to the Pledgor:         Michael Riley
                                    c/o Pacificap Entertainment Holdings, Inc.
                                    12268 Via Latina
                                    Del Mar, California 92914
                                    Telephone: 858-481-2207
                                    Facsimile: 858-481-2207

         If to the Pledgees:        AJW Partners, LLC
                                    AJW Offshore, Ltd.
                                    AJW Qualified Partners, LLC
                                    New Millennium Capital Partners II, LLC
                                    1044 Northern Boulevard
                                    Suite 302
                                    Roslyn, New York  11576
                                    Facsimile No.:  (516) 739-7115
                                    Attn:  Corey S. Ribotsky

         With copies to:            Ballard Spahr Andrews & Ingersoll, LLP
                                    1735 Market Street, 51st Fl.
                                    Philadelphia, PA 19103
                                    Facsimile No.: (215) 864-8999
                                    Attn:  Gerald J. Guarcini, Esquire

            (c)  Invalidity.  If any  part of this  Agreement  is  contrary  to,
prohibited  by, or deemed invalid under  applicable  laws or  regulations,  such
provision  shall be  inapplicable  and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.

            (d) Benefit of Agreement.  This Agreement  shall be binding upon and
inure to the parties hereto and their respective successors and assigns.

            (e) Mutual  Agreement.  This  Agreement  embodies  the arm's  length
negotiation  and mutual  agreement  between the parties  hereto and shall not be
construed against either party as having been drafted by it.

                                       7
<PAGE>

            (f) New York Law to Govern.  This Agreement shall be governed by and
construed and enforced in accordance  with the internal laws of the State of New
York without  regard to the  principals of conflicts of law thereof.  Each party
hereby  irrevocably  submits  to the  exclusive  jurisdiction  of the  state and
Federal  courts sitting in the city of New York,  borough of Manhattan,  for the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or discussed  herein,  and hereby  irrevocably
waives,  and agrees not to assert in any suit,  action or proceeding,  any claim
that it is not personally  subject to the jurisdiction of any such court or that
such suit,  action or  proceeding  is improper.  Each party  hereby  irrevocably
waives  personal  service of process and consents to process being served in any
such suit,  action or  proceeding by mailing a copy thereof to such party at the
address in effect for  notices to it under this  agreement  and agrees that such
service  shall  constitute  good and  sufficient  service of process  and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.

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                                       8
<PAGE>

      IN WITNESS  WHEREOF,  the parties  hereto have  caused this  Guaranty  and
Pledge Agreement to be duly executed by their respective  authorized  persons as
of the date first indicated above.

                              PACIFICAP ENTERTAINMENT
                              HOLDINGS, INC.

                              By:  /s/ Ed Litwak
                                   -------------------------
                                   Ed Litwak
                                   President

                              PLEDGEES:

                              AJW PARTNERS, LLC

                              By:      SMS Group, LLC

                                       By:  /s/ Corey S. Ribotsky
                                           -------------------------
                                           Corey S. Ribotsky
                                           Manager

                              AJW OFFSHORE, LTD.

                              By:  First Street Manager II, LLC

                                   By:  /s/ Corey S. Ribotsky
                                           -------------------------
                                           Corey S. Ribotsky
                                           Manager

                              AJW QUALIFIED PARTNERS, LLC

                              By:  AJW Manager, LLC

                                   By:  /s/ Corey S. Ribotsky
                                           -------------------------
                                           Corey S. Ribotsky
                                           Manager

                              NEW MILLENNIUM CAPITAL PARTNERS II, LLC

                              By:  First Street Manager II, LLC

                                   By:  /s/ Corey S. Ribotsky
                                           -------------------------
                                            Corey S. Ribotsky
                                            Manager

                    [Signatures Continued on Following Page]

                                       9
<PAGE>

                              PLEDGOR:

                              /s/ Michael Riley
                              -------------------------
                              Michael Riley

                                       10

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