THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  HAVE  NOT  BEEN

     REGISTERED  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED (THE "ACT").

     THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE

     OF AN EFFECTIVE  REGISTRATION  STATEMENT FOR THE SECURITIES UNDER SAID

     ACT, OR AN OPINION OF COUNSEL IN FORM,  SUBSTANCE AND SCOPE  CUSTOMARY

     FOR OPINIONS OF COUNSEL IN COMPARABLE  TRANSACTIONS  THAT REGISTRATION

     IS NOT REQUIRED  UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR

     REGULATION S UNDER SAID ACT.





                                         CALLABLE SECURED CONVERTIBLE NOTE



Del Mar, California

July 13, 2004                                                          $114,000



     FOR  VALUE  RECEIVED,  PACIFICAP  ENTERTAINMENT  HOLDINGS,  INC.,  a Nevada

corporation  (hereinafter called the "Borrower"),  hereby promises to pay to the

order of AJW PARTNERS,  LLC or registered  assigns (the "Holder") the sum of One

Hundred Fourteen  Thousand Dollars  ($114,000),  on July 13, 2006 (the "Maturity

Date"),  and to pay interest on the unpaid principal  balance hereof at the rate

of ten percent  (10%) per annum from July 13, 2004 (the "Issue  Date") until the

same becomes due and  payable,  whether at maturity or upon  acceleration  or by

prepayment or otherwise.  Any amount of principal or interest on this Note which

is not paid when due shall bear  interest at the rate of fifteen  percent  (15%)

per annum from the due date thereof until the same is paid ("Default Interest").

Interest  shall  commence  accruing on the issue date,  shall be computed on the

basis of a  365-day  year and the  actual  number of days  elapsed  and shall be

payable,  quarterly  on March 31, June 30,  September 30 and December 31 of each

year  beginning on September 30, 2004. All payments due hereunder (to the extent

not converted into common stock, $.001 par value per share, of the Borrower (the

"Common  Stock") in  accordance  with the terms  hereof) shall be made in lawful

money of the United  States of America,  provided  that the first two (2) year's

interest payment shall be payable on the date hereof. All payments shall be made

at such  address as the Holder shall  hereafter  give to the Borrower by written

notice made in accordance with the provisions of this Note.  Whenever any amount

expressed  to be due by the  terms of this Note is due on any day which is not a

business day, the same shall instead be due on the next  succeeding day which is

a business  day and, in the case of any  interest  payment date which is not the

date on which this Note is paid in full,  the  extension of the due date thereof

shall not be taken  into  account  for  purposes  of  determining  the amount of

interest due on such date. As used in this Note,  the term  "business day" shall

mean any day other than a Saturday, Sunday or a day on which commercial banks in

the city of New York,  New York are  authorized  or required by law or executive



                                       1

<PAGE>

order to remain closed.  Each  capitalized  term used herein,  and not otherwise

defined,  shall have the meaning  ascribed  thereto in that  certain  Securities

Purchase  Agreement,  dated  June 8,  2004,  pursuant  to  which  this  Note was

originally issued (the "Purchase Agreement").



     This Note is free from all  taxes,  liens,  claims  and  encumbrances  with

respect to the issue  thereof and shall not be subject to  preemptive  rights or

other  similar  rights  of  stockholders  of the  Borrower  and will not  impose

personal  liability  upon the holder  thereof.  The  obligations of the Borrower

under  this Note  shall be secured by that  certain  Security  Agreement  by and

between the Borrower and the Holder of even date herewith.



         The following terms shall apply to this Note:



                          Article I. CONVERSION RIGHTS



        1.1 Conversion Right. The Holder shall have the right from time to time,

and at any time on or prior to the earlier of (i) the Maturity Date and (ii) the

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