EXHIBIT 10.3

                  NOTEHOLDER PREFERRED SHARE EXCHANGE AGREEMENT

Dated for reference the 30th day of December, 2002

AMONG:

                        ECLIPSE ENTERTAINMENT GROUP, INC.
                             of 10520 Venice Blvd.,
                              Culver City, CA 90232
                                    ("ECLE")

                              ANCIENT WARRIORS LLC
                            of 2265A Westwood Blvd.,
                              Los Angeles, CA 90064
                                     ("AW")

                             ECLIPSE RELEASING, INC.
                             of 10520 Venice Blvd.,
                              Culver City, CA 90232
                                     ("ECR")

                         (collectively the "Companies")

                                       AND

                                  THOMAS HUDSON
                           of 16906 S.E. 58th Street,
                               Bellevue, WA 98006

                                 ROBERT S. ANGEL
                         of 1800 Westlake Avenue North,
                          Suite 102, Seattle, WA 98109

                               MICHAEL J. WIESMANN
                              of 2225 94th Ave. NE,
                               Bellevue, WA. 98004

                                 MARTIN MCCURRY
                             of 12935 169th Ave. NE,
                                Redmond, WA 98052

                                   JOEY FIORE
                             of 1 Green Meadow Lane,
                              Cincinnati, OH 45242

                                RONALD M. ROSELLA
                            of 1228 - 2nd Avenue N.,
                                Seattle, WA 98109

                          WESTERN PACIFIC FUNDING CORP.
                               12935 169th Ave. NE
                                Redmond, WA 98052
<PAGE>
                                THOMAS DE DONATO
                              of 10257 NE 64th St.
                               Kirkland, WA 98003

                                 RUSSELL K. NOMI
                             of 17450 S.E. 40th Pl.,
                               Bellevue, WA 98008

                                 FRANCO COLUMBU
                            of 2265A Westwood Blvd.,
                              Los Angeles, CA 90064

                                   ALEC ROSSA
                              of 3902 Gibson Court,
                           Victoria, BC Canada V8N 6E2

                                  BRENT NELSON
                             of 10900 NE 8th Street,
                               Bellevue, WA 98004

              (the "noteholder" or collectively the "noteholders")

WHEREAS:

     A.   Eclipse  Entertainment  Group, Inc. is a public company engaged in the
          business of media and entertainment.

     B.   ECLE  has two  subsidiaries  Eclipse  Releasing,  Inc.,  a 100%  owned
          subsidiary and Ancient Warriors LLC., a 75% owned subsidiary.

     C.   ECLE, ECR and AW have received funding through various diverse funding
          instruments and agreements from a group of investors (the "noteholder"
          or collectively the "noteholders").

     D.   ECLE, ECR and AW wish to determine the appropriate payout structure to
          the  noteholders  and  to  obtain  sufficient  additional  funding  to
          aggressively  pursue the sales of the  movie,  Ancient  Warriors  (the
          "Movie")  and to  determine  and  organize a more viable  strategy and
          business focus for ECLE.

     E.   ECLE,  ECR, AW and the Noteholders  wish to agree on a  reorganization
          structure  to allow the  parties to  maximize  the  return  from their
          investments and maximize the return to shareholders.

Now therefore this agreement  witnesseth that in consideration of one dollar and
other good and valuable consideration the parties hereto agree as follows:

1.   ECLE agrees to transfer all right title and interest,  which they currently
     hold in and to the Movie to ECR.

2.   ECR agrees to authorize and create Ancient Warriors Series A to F Preferred
     Shares having the terms and conditions set out in Schedule A hereto.

3.   The Noteholders  agree to cancel their notes and any  outstanding  interest
     accruing  thereunder in exchange for the  appropriate  number and series of
     Ancient Warriors Series A to F Preferred Shares pursuant to Schedule B

4.   The parties hereto agree that the noteholder  priority list attached hereto
     as Schedule B sets out the order in which each Ancient  Warriors  Preferred
     Share shall be redeemed  from the  proceeds  from the sale of Movie and the
     number and series of Preferred Shares to be issued to each noteholder. More
     specifically,  the  proceeds  from the Movie  shall first be used to redeem
     Ancient  Warriors  Series  A  Preferred  Shares  of  the  Ancient  Warriors
<PAGE>
     Preferred  Share  Priority  List,  and upon  redemption  in full of all the
     Ancient  Warriors  Series A Preferred  Shares,  the proceeds  shall then be
     applied to the  redemption of the next highest  series of Ancient  Warriors
     Preferred Shares in alphabetical order.

5.   The parties  agree that should more than one  Shareholder  be included in a
     Series  of  Preferred  Shares,  then  each  Share in that  Series  shall be
     redeemed by the Company on a pro rata basis.

6.   As a bonus for agreeing to cancel their  existing  notes and exchange  them
     for Ancient Warriors Preferred Shares each Ancient Warriors Preferred Share
     shall  provide  the  holder  thereof  with an  irrevocable  option,  at the
     Preferred  Shareholders  request,  to exchange  all or any portion of their
     Preferred  Shares for a  predetermined  number of ECLE common shares at the
     rates and subject to the terms set out in Schedule A

7.   The  failure  of  any  noteholders  to  execute  this  document  shall  not
     invalidate the agreement entered into between the noteholders executing the
     agreement and the Companies  contained  herein.  Any noteholder who chooses
     not to execute this  agreement will not be able to rely upon or receive any
     of the benefits accruing hereunder.

MISCELLANEOUS

8.   All of the representations, warranties, covenants and agreements of each of
     the parties hereto shall survive the Closing.

9.   The parties shall  indemnify  and save the  Companies  and their  officers,
     directors and employees, from any and all actions taken or results achieved
     in furtherance of this  agreement,  whether arising out of or in connection
     with any breach of any  representation,  warranty,  covenant,  agreement or
     condition of that party contained herein, or not.

11.  All  notices  and  other  communications  required  or  permitted  by  this
     Agreement  to be given or made by any party to the other  shall be given or
     made in  writing  and be  delivered  by hand or double  registered  mail or
     conveyed by telex or facsimile transmission to the parties at the following
     addresses and numbers and to the attention of the following persons:

     (a)  if to any of the parties As above.

     or to such other  addresses,  numbers,  or persons as the  parties may give
     each other notice of from time to time.  Proof of delivery or  transmission
     in such manner shall constitute proof of receipt.

14.  Time shall be of the essence hereof.

15.  This Agreement  constitutes the entire agreement between the parties hereto
     and supersedes all prior contracts,  agreements and understandings  between
     the  parties.   There  are  no  representations,   warranties,   collateral
     agreements  or  conditions  affecting  this  transaction  other than as are
     expressed or referred to herein in writing.

16.  This  Agreement  shall be governed by and construed in accordance  with the
     laws of the  State  of  Nevada.  The  courts  of  Nevada  shall  have  sole
     jurisdiction  to hear and  determine  all  manner of  disputes  and  claims
     arising out of or in any way  connected  with the  construction,  breach or
     alleged,  threatened or anticipated  breach of this Agreement and determine
     all questions as to the validity, existence or enforceability hereof.

17.  This  Agreement  shall  enure to the  benefit  of and be  binding  upon the
     respective heirs, successors and assigns of the parties hereto.

18.  Should any provision or provisions or conditions of this  Agreement be void
     or not enforceable,  it or they shall be considered  separate and severable
<PAGE>
     from this  Agreement  and its remaining  provisions  and  conditions  shall
     remain in force and be binding  upon the parties  hereto as though the said
     provision or provisions or conditions had never been included.

19.  The  Schedules  (if any) attached to this  Agreement  are  incorporated  by
     reference as fully as though  contained  in the body  hereof.  Wherever any
     term or condition,  expressed or implied, of such Schedules conflicts or is
     at variance  with any term or  condition  of this  Agreement,  such term or
     condition of this Agreement shall prevail.

20.  This Agreement and any certificate or other writing delivered in connection
     herewith may be executed in any number of counterparts and any party hereto
     may execute any counterpart, each of which when executed and delivered will
     be deemed to be an original and all of which counterparts of this Agreement
     or such other writing as the case may be, taken  together will be deemed to
     be one and the same  instrument.  The  execution  of this  Agreement or any
     other writing party hereto will not become effective until all counterparts
     hereof have been executed by all the parties hereto.

Executed and agreed to by direct  signature or  execution  of  counterpart  copy
hereof;


----------------------------------
ECLIPSE ENTERTAINMENT GROUP, INC.


----------------------------------      ----------------------------------------
ANCIENT WARRIORS, LLC.                  ECLIPSE RELEASING, INC.


----------------------------------      ----------------------------------------
THOMAS HUDSON                           ROBERT S. ANGEL


----------------------------------      ----------------------------------------
MICHAEL J. WIESMANN                     MARTIN MCCURRY


----------------------------------      ----------------------------------------
JOEY FIORE                              RONALD M. ROSELLA


----------------------------------      ----------------------------------------
WESTERN PACIFIC FUNDING CORP.           THOMAS DE DONATO


----------------------------------      ----------------------------------------
RUSSELL K. NOMI                         FRANCO COLUMBU


----------------------------------      ----------------------------------------
ALEC ROSSA                              BRENT NELSON
<PAGE>
                                  SCHEDULE "A"

The Directors of Eclipse  Releasing Inc. (herein the "Company") have resolved to
create six series of Preferred Shares to be described as follows:

                  "Ancient Warriors Series A Preferred Shares"
                  "Ancient Warriors Series B Preferred Shares"
                  "Ancient Warriors Series C Preferred Shares"
                  "Ancient Warriors Series D Preferred Shares"
                  "Ancient Warriors Series E Preferred Shares"
                  "Ancient Warriors Series F Preferred Shares"

The special rights and restrictions attaching to each Series of Ancient Warriors
Preferred Shares are as follows

     i)   the  Ancient  Warriors  Preferred  Shares  of all  series  shall  have
          attached  thereto a par value of one dollar ($1.00) which shall be the
          amount paid up with respect to each share;

     ii)  the Ancient Warriors  Preferred Shares shall be issued on a dollar for
          dollar  basis  in  exchange  for  the  notes  and  interest   accruing
          thereunder which have been issued against the Movie;

     iii) the Ancient Warrior Preferred Shares shall pay interest at the rate of
          5% annually,  payable in cash or stock in Eclipse Entertainment Group,
          Inc., (hereafter ECLE) as determined by the Company

     iv)  the  Ancient  Warriors  Preferred  Shares of all  series  shall be non
          voting;

     v)   the Ancient Warriors Preferred Shares shall be redeemable and shall be
          redeemed by the Company  from any and all the revenue  received by the
          Company from the Movie. The Ancient Warriors Preferred Shares shall be
          redeemed by the Company in the following order:

          Ancient  Warriors  Series  A  Preferred  Shares,   and  upon  complete
          redemption  of  this  series,  then  the  Ancient  Warriors  Series  B
          Preferred Shares,  and upon complete  redemption of this series,  then
          the Ancient  Warriors  Series C Preferred  Shares,  and upon  complete
          redemption  of  this  series,  then  the  Ancient  Warriors  Series  D
          Preferred Shares,  and upon complete  redemption of this series,  then
          the Ancient  Warriors  Series E Preferred  Shares,  and upon  complete
          redemption  of  this  series,  then  the  Ancient  Warriors  Series  F
          Preferred Shares;

     vi)  Any Ancient Warrior Preferred Share converted to common shares of ECLE
          shall be issued  pursuant to such terms and conditions as are required
          by  any  Regulatory   Authorities   having   jurisdiction   over  such
          transaction;

     vii) the Ancient  Warrior  Preferred  Shares  shall rank in priority to the
          common shares as to dividends;
<PAGE>
    viii) the  holders  of  the  Ancient  Warrior   Preferred  Shares  shall  be
          entitled,  on the  distribution  of  assets of the  Company  or on the
          liquidation,   dissolution  or  winding-up  of  the  Company,  whether
          voluntary or  involuntary,  or on any other  distribution of assets of
          the  Company  among its  members  for the  purpose  of  winding up its
          affairs, to receive,  before any distribution shall be made to holders
          of the common shares or any other shares of the Company ranking junior
          to the Ancient Warrior  Preferred  Shares with respect to repayment of
          capital,  (if any) the amount paid up with  respect to each  preferred
          share  held  by  them,   together   with  all   declared   and  unpaid
          non-cumulative  dividends (if any and if preferential)  thereon. After
          payment to holders of Ancient Warrior  Preferred Shares of the amounts
          so payable to them, they shall not be entitled to share in any further
          distribution  of the  property  or  assets  of the  Company  except as
          specifically  provided in the special rights and restrictions attached
          to any particular series.
<PAGE>
                                   SCHEDULE B

<TABLE>
<CAPTION>
                                                               PAID         INTEREST PAYABLE      ANCIENT WARRIOR
CATEGORY       INVESTOR NAME                    AMOUNT         FROM        (THRU DEC 31, 2002)    PREFERRED SHARES
--------       -------------                    ------         ----        -------------------    ----------------
<S>            <C>                             <C>           <C>           <C>                   <C>
    A          TOM HUDSON                        30,000          ECLE                              30,000 Series A
               ROB ANGEL                         10,000          ECLE                              10,000 Series A
               WESTERN PACIFIC FUNDING           10,000          ECLE                              10,000 Series A
               JOEY FIORE                        40,000          ECLE                              40,000 Series A
               RUSS NOMI                          2,500          ECLE                               2,500 Series A

    B          TOM HUDSON                       300,000          ECLE            42,375.00        342,375 Series B
               ROB ANGEL                         50,000           ECR             1,875.00         51,875 Series B

    C          WESTERN PACIFIC FUNDING          100,000       ECLE/AW            13,812.50        113,813 Series C
               JOEY FIORE                       100,000          ECLE            18,000.00        118,000 Series C
               ROB ANGEL                         50,000       ECLE/AW             6,093.75         56,094 Series C
               RUSS NOMI                         25,000       ECLE/AW             3,270.31         28,270 Series C

    D          MIKE WIESMANN                     50,000            AW             6,750.00         56,750 Series D
               FRANCO GROUP                     300,000            AW            60,000.00        360,000 Series D
               BRENT NELSON                     100,000          ECLE            16,000.00        116,000 Series D
               JOEY FIORE                       300,000          ECLE            49,500.00        349,500 Series D

    E          RON ROSELLA                      120,000          ECLE            18,150.00        138,150 Series E
               MIKE WIESMANN                    120,000          ECLE            18,150.00        138,150 Series E
               MARTY MCCURRY                    120,000          ECLE            18,150.00        138,150 Series E
               BRENT NELSON                     200,000          ECLE            32,000.00        232,000 Series E

    F          ALEC ROSSA                       115,000          ECLE            37,566.67        152,567 Series F
               BRENT NELSON                     660,128          ECLE           105,620.48        765,748 Series F

    G          FRANCO GROUP                     400,000            AW                 0.00        400,000 Series G
                                             ----------                        -----------
                         TOTAL                3,202,628                         447,313.71
</TABLE>