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                                                                    EXHIBIT 10.3

                              SETTLEMENT AGREEMENT

            This Settlement Agreement (the "Agreement") is entered into this
30th day of September, 2003, by and between James L. Long, whose address is 3845
Saint James Court, Boca Raton, FL 33434-3368, phone number: (561) 483-7440, fax
number: (561) 483-7443 ("Long") and Jill Kelly Productions Holding, Inc., a
Nevada corporation ("JKXJ"), for mutual consideration and the purposes expressed
herein.

                                    RECITALS

            WHEREAS, Jill Kelly Productions, Inc. ("JKP"), a Delaware
corporation and a wholly owned subsidiary of JKXJ, and Long entered into four
separate Production and Distribution Agreements, each dated August 4, 2000 (the
"Production and Distribution Agreements"), each attached hereto as Exhibit A and
incorporated herein by reference;

            WHEREAS, the Production and Distribution Agreements provide that
Long would contribute capital for the completion of each production and that
Long would be repaid his capital contribution by JKP and receive forty percent
(40%) of the net profit;

            WHEREAS, it is the desire of JKXJ and Long to amend certain terms of
the Production and Distribution Agreements;

            NOW THEREFORE, in exchange for the mutual premises and consideration
contained herein and for other good and valuable consideration, receipt of which
is hereby acknowledged, it is agreed as follows:

      1. Capital Contributions. The Production and Distribution Agreements
provide in Section 4 that "[t]he investor will be paid his capital contribution
first and then the capital contribution of JKP will be returned. Following the
full repayment of the capital contributions, the net profit will be distributed
40% to the Investor and 60% to JKP." Long is owed a total of $130,000 (the
"Obligation") under the Production and Distribution Agreements of which $10,000
has been paid to Long in cash from JKP.

      2. Series A Preferred Shares. The Obligation shall be paid in the form of
1,200 Series A Preferred Shares of JKXJ (the "Preferred Shares") and 120,000
warrants (the "Warrants") to purchase common stock of JKXJ. Each Warrant
entitles the holder to purchase one share of the JKXJ's common stock at an
exercise price of $0.25 per Warrant for a period of five years from issuance. In
order to receive the Preferred Shares and the Warrants, Long must complete the
Subscription Agreement attached hereto at Exhibit B and the Investor
Questionnaire attached hereto as Exhibit C. Such payment of the Obligation shall
discharge in full Long's obligation to pay for the Preferred Shares and Warrants
notwithstanding the payment obligation of Long under the Subscription Agreement
referred to below.

      3. Royalties. Long will continue to be entitled to 40% of the net profit
under the Production and Distribution Agreements.

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      4. Full Force and Effect. Besides for Section 4, the remaining sections
and portions of the Production and Distribution Agreements remain in full force
and effect.

      5. Miscellaneous.

            (a) Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under applicable law, then such invalidity,
illegality or unenforceability shall not affect the other provisions of this
Agreement.

            (b) This Agreement may be executed in separate counterparts, each of
which is deemed to be an original hereof, and all of which taken together shall
constitute one and the same agreement.

            (c) Descriptive headings in this Agreement are inserted for
convenience of reference only and are not intended to be part of or affect the
meaning or interpretation of this Agreement.

            (d) The parties hereto acknowledge that the transactions
contemplated by this Agreement and the exhibits hereto bear a reasonable
relation to the state of New York. This Agreement shall be enforced in
accordance with, and all questions regarding the construction, validity,
interpretation and purpose of this agreement shall be governed by, the internal
laws of the state of New York, without giving effect to provisions thereof
regarding conflict of laws. Any action to enforce the terms of this Agreement
shall be brought exclusively in the state and/or federal courts situate in the
county and state of New York. Service of process in any action by Long or JKXJ
to enforce the terms of this Agreement may be made by serving a copy of the
summons and complaint, in addition to any other relevant documents, by
commercial overnight courier to JKXJ and Long, respectively, at the address set
forth in this Agreement.

            (f) Except as otherwise provided herein, any notice provided for in
this Agreement must be in writing and must be either (a) hand delivered, (b)
mailed by registered or certified first class mail, postage prepaid with return
receipt requested, (c) sent by reputable overnight courier service for next
business morning delivery, or (d) sent by telecopy to the recipient at the
address/telecopy number below indicated:

      If to JKXJ:       Jill Kelly Productions Holdings, Inc.
                        P.O. Box 691447
                        Los Angeles, CA 90069
                        Attn.:  Robert Friedland
                        Telephone: (310) 360-7900
                        Facsimile: (310) 360-7933

      With a copy to:   Gottbetter & Partners, LLP
                        488 Madison Avenue
                        New York, New York 10022

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                        Attn.: Adam S. Gottbetter, Esq.
                        Telephone: (212) 400-6900
                        Facsimile: (212) 400-6901

      If to Long:       to the address in the preamble

or such other address/telecopy number or to the attention of such other person
as the recipient party shall have specified by prior written notice to the
sending party.

            Any notice under this Agreement shall be deemed to have been given
(i) on the date such notice is hand delivered, (ii) three (3) days after the
date of mailing if mailed by certified or registered mail, (iii) on the business
day next following the day notice is sent via overnight courier service, or (iv)
as of the beginning of the next day if such notice is sent by telecopy.

            (g) This Agreement embodies the complete agreement and understanding
between the parties with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements and/or representations by or
between the parties, written or oral, related to the subject matter hereof in
any way.

            (h) No waiver of any of the provisions hereof shall be effective
unless in writing and signed by the party to be charged with such waiver. No
waiver shall be deemed a continuing waiver or waiver in respect of any
subsequent breach or default, whether of similar or different nature, unless
expressly so stated in writing.

            (i) Each party hereto shall cooperate and shall take such further
action and shall execute and deliver such further documents as may be reasonably
requested by any other party in order to carry out the provisions and purposes
of this Agreement.

            (j) Notwithstanding any rule of law or custom to the contrary,
neither this Agreement nor any other agreement or document collateral to or
otherwise relating to this Agreement shall be interpreted or construed against
any party merely by reason of the fact that such agreement or document was
prepared by or at the direction of such party or that such party caused this
Agreement to be drafted.

                            [Signature Page Follows]

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the day and year first above written.

                                            JILL KELLY PRODUCTIONS HOLDING, INC.

                                            By: /s/ Robert Friedland
                                                -----------------------------
                                                Robert Friedland, President

                                            /s/ James Long
                                            -----------------------------
                                            Name:  James Long