Preview | Registration Rights Agreement |

REGISTRATION RIGHTS AGREEMENT (this Agreement), dated as of September 16, 2005, 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).

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) secured convertible notes in the aggregate principal amount of up to Four Hundred and Fifty Thousand Dollars ($450,000) (the Notes) that are convertible into shares of the Companys 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 450,000 shares of Common Stock, upon the terms and conditions and subject to the limitations and conditions set forth in the Warrants; and

(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).

(iii) Registrable Securities means the Conversion Shares issued or issuable upon conversion or otherwise pursuant to the Notes 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 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.

a. Mandatory Registration. The Company shall prepare, and, on or prior to thirty (30) days from the date of receipt of written demand of the Investors (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 Investors 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.