PARADISE MUSIC & ENTERTAINMENT INC, SB-2, 1996-10-11

PARADISE MUSIC & ENTERTAINMENT INC
SB-2, 1996-10-11

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<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 11, 1996

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

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FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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PARADISE MUSIC & ENTERTAINMENT, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

------------------------------

<TABLE>
<S> <C> <C>
DELAWARE 7929 13-3906452
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION CLASSIFICATION IDENTIFICATION NO.)
OR ORGANIZATION) CODE NUMBER)
</TABLE>

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420 West 45th Street, 5th Floor
New York, NY 10036
(212) 957-9393
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES AND PRINCIPAL PLACE
OF BUSINESS)

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John Loeffler
President
420 West 45th Street, 5th Floor
New York, NY 10036
(212) 957-9393
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

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With copies to:

<TABLE>
<S> <C>
Walter M. Epstein, Esq. Michael DiGiovanna, Esq.
Rubin Baum Levin Constant & Friedman Parker Duryee Rosoff & Haft
30 Rockefeller Plaza 529 Fifth Avenue
New York, NY 10112 New York, New York 10017
(212) 698-7758 (212) 599-0500
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), check the following box. /X/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective Registration Statement for the same offering. / / ______

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier registration statement for the same
offering. / / ______

If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
<PAGE>
CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SECURITY(1) PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Units, each consisting of one share of Common
Stock, par value $.01 per share, and one
Warrant, each to purchase one-half share of
Common Stock................................... 1,150,000(2) $7.00 $8,050,000 $2,439.40
Common Stock, par value $.01 per share, issuable
upon exercise of the Warrants(3)............... 575,000(2) $8.40 $4,830,000 $1,463.64
Representative's Warrants, each to purchase one
Unit, each consisting of one share of Common
Stock, par value $.01 per share, and one
Warrant, each to purchase one-half share of
Common Stock(4)................................ 100,000 $.001 $100 $.04
Units, each consisting of one share of Common
Stock, par value $.01 per share, and one
Warrant, each to purchase one-half share of
Common Stock, issuable upon exercise of the
Representative's Warrants(3)................... 100,000 $7.70 $770,000 $233.34
Common Stock, par value $.01 per share, issuable
upon exercise of the Warrants contained in the
Units issuable upon exercise of the
Representative's Warrant(3).................... 50,000 $8.40 $420,000 $127.28
Common Stock, par value $.01 per share, to be
sold by Selling Stockholders(5) 70,000 $7.00 $490,000 $148.49
Total Registration Fee.......................................................................... $14,560,100 $4,412.18
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933.

(2) Assumes the Representative's over-allotment option to purchase up to 150,000
additional Units is exercised in full.

(3) Pursuant to Rule 416, there are also being registered such indeterminable
additional shares of Common Stock as may become issuable pursuant to
anti-dilution provisions contained in the Warrants and the Representative's
Warrants.

(4) Represents warrants to be issued by the Company to the Representative at the
time of delivery and acceptance of the securities to be sold by the Company
to the public hereunder.

(5) Represents 70,000 shares of Common Stock owned by stockholders of the
Company which are being registered for offer and sale on a delayed basis
pursuant to Rule 415.

------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL SUCH REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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<PAGE>
EXPLANATORY NOTE

This Registration Statement covers the registration of:

(i) 1,150,000 Units ("Units"), including Units to cover over-allotments for
sale by the Company in an underwritten public offering (the "Offering"), each
Unit consisting of:

(a) one share of Common Stock, $.01 par value per share (the "Common
Stock"), of Paradise Music & Entertainment, Inc. (the "Company"), for an
aggregate of 1,150,000 shares of Common Stock; and

(b) one Redeemable Warrant (the "Warrants"), with two Warrants entitling
the holder thereof to purchase one share of Common Stock, for an aggregate
of 575,000 shares of Common Stock;

(ii) the Representative's Warrants, exercisable into 100,000 Units and the
underlying Common Stock and Warrants, for an aggregate of 100,000 Warrants and
150,000 shares of Common Stock; and

(iii) an additional 70,000 shares of Common Stock (the "Selling Stockholder
Securities") for sale by the holders thereof (the "Selling Stockholders").

Following the Prospectus for the Offering are certain pages of the
Prospectus relating solely to the Selling Stockholder Securities, including
alternate front and back cover pages and sections entitled "Public Offering" and
"Selling Stockholders and Plan of Distribution" to be used in lieu of "Offering
by the Selling Stockholders" and "Underwriting" contained in the Prospectus
relating to the Offering. All other sections of the Prospectus for the Offering
are to be used in the Prospectus relating to the Selling Stockholder Securities.
<PAGE>
SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED OCTOBER 11, 1996
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
PARADISE MUSIC & ENTERTAINMENT, INC.
1,000,000 UNITS

CONSISTING OF 1,000,000 SHARES OF COMMON STOCK
AND 1,000,000 REDEEMABLE COMMON STOCK PURCHASE WARRANTS
---------------------

Paradise Music & Entertainment, Inc. (the "Company") is offering (the
"Offering") hereby 1,000,000 Units (the "Units"), each consisting of one share
of its common stock (the "Common Stock") and one redeemable common stock
purchase warrant (the "Warrants"). The shares of Common Stock and Warrants will
be separately transferable immediately upon issuance. Two Warrants will entitle
the registered holder thereof to purchase one share of Common Stock at a price
of $ per share [120% of the initial public offering price of the Units] at any
time commencing on the date of this Prospectus and terminating on ,
2000 [four years from the date of this Prospectus]. The Warrants will be
redeemable at a price of $0.05 per Warrant upon not less than 30 days' written
notice if the average closing bid price of the Common Stock has been equal to or
greater than 120% of the then exercise price of the Warrants for 20 consecutive
trading days ending on the fifth day prior to the notice of redemption. See
"Description of Securities" for additional terms of the Warrants.

Concurrently with the Offering, the Company also has registered on behalf of
certain stockholders (the "Selling Stockholders") an additional 70,000 shares of
Common Stock (the "Selling Stockholder Securities"). The Selling Stockholders
have agreed not to sell any of the Selling Stockholder Securities for at least
days after the closing of the Offering. Sales of Selling Stockholder
Securities or even the potential of such sales at any time may have an adverse
effect on the market prices of the securities offered hereby. The Company will
not receive any proceeds from the sale of the Selling Stockholder Securities.
See "Concurrent Offering by Selling Stockholders."

Prior to the Offering there has been no public market for the Common Stock
or Warrants. It is currently estimated that the initial public offering price of
the Units will be between $6.00 and $7.00 per Unit. For factors considered in
determining the initial public offering price, see "Underwriting." The Company
has applied to have the Common Stock and Warrants approved for quotation on The
Nasdaq SmallCap Market ("Nasdaq") under the symbols " " and " ",
respectively.
--------------------------

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 7 HEREOF.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNTS(1) COMPANY (2)
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<S> <C> <C> <C>
Per Unit................................................................ $ $ $
Total (3)............................................................... $ $ $
</TABLE>

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(1) Does not include additional compensation to Donald & Co. Securities Inc.,
acting as representative (the "Representative") of the several underwriters
identified elsewhere herein (the "Underwriters"), in the form of a
nonaccountable expense allowance of 3% of the gross proceeds of the
Offering. The Company has also agreed to sell to the Representative warrants
to purchase up to 100,000 Units at an exercise price of $ per Unit,
exercisable over a period of four years commencing one year from the date
hereof (the "Representative's Warrants") and to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended (the "Securities Act"). See "Underwriting."

(2) Before deducting estimated expenses payable by the Company, including the
Representative's nonaccountable expense allowance of $ ($ if the
Representative's Over-Allotment Option (as hereinafter defined) is exercised
in full), estimated at $ ($ if the Over-Allotment Option is
exercised in full).

(3) The Company has granted the Representative a 45-day option (the
"Over-Allotment Option") to purchase up to 150,000 Units upon the same terms
and conditions as set forth above, solely to cover over-allotments, if any.
If the Over-Allotment Option is exercised in full, the total Price to
Public, Underwriting Discounts and Proceeds to Company will be $ ,
$ and $ , respectively. See "Underwriting."

The Units are being offered by the Underwriters subject to receipt and
acceptance by the Underwriters, subject to approval of certain legal matters by
counsel and subject to prior sale. The Underwriters reserve the right to
withdraw, cancel or modify the Offering and to reject any order in whole or in
part. It is expected that delivery of certificates will be made against payment
therefor on or about , 1996, at the offices of Donald & Co.
Securities Inc., 65 East 55th Street, New York, New York 10022.
--------------------------

DONALD & CO. SECURITIES INC.

THE DATE OF THIS PROSPECTUS IS , 1996
<PAGE>
[PICTURES TO BE PROVIDED]

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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AND/OR THE WARRANTS OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

The Company intends to furnish its stockholders with annual reports containing
audited financial statements of the Company, after the end of each fiscal year,
and make available such other periodic reports as the Company may deem
appropriate or as may be required by law.

2
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY INFORMATION IS QUALIFIED IN ITS ENTIRETY BY THE MORE
DETAILED INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS. EACH PROSPECTIVE
INVESTOR IS URGED TO READ THIS PROSPECTUS IN ITS ENTIRETY. UNLESS OTHERWISE
INDICATED, ALL REFERENCES TO THE COMPANY IN THIS PROSPECTUS GIVE PRO FORMA
EFFECT TO THE EFFECTIVENESS OF (I) THE EXCHANGE AGREEMENT (THE "EXCHANGE
AGREEMENT") DATED OCTOBER 9, 1996 AMONG THE COMPANY, JOHN LOEFFLER, JON SMALL,
BRIAN DOYLE AND RICHARD FLYNN, AND (II) THE EMPLOYMENT AGREEMENTS (THE
"EMPLOYMENT AGREEMENTS"), EACH DATED OCTOBER 9, 1996 BETWEEN THE COMPANY AND
EACH OF JOHN LOEFFLER, JON SMALL, BRIAN DOYLE AND RICHARD FLYNN. UNLESS
OTHERWISE INDICATED, ALL REFERENCES TO THE COMPANY INCLUDE JOHN LEFFLER MUSIC,
INC. D/B/A RAVE MUSIC AND ENTERTAINMENT ("RAVE"), PICTURE VISION, INC. ("PICTURE
VISION") AND ALL ACCESS ENTERTAINMENT MANAGEMENT GROUP, INC. ("ALL ACCESS"),
EACH OF WHICH IS A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY. UNLESS OTHERWISE
INDICATED, INFORMATION IN THIS PROSPECTUS ASSUMES (I) NO EXERCISE OF THE OVER-
ALLOTMENT OPTION, (II) NO EXERCISE OF THE REPRESENTATIVE'S WARRANTS AND (III) NO
EXERCISE OF ANY OTHER WARRANT OR OPTIONS OF THE COMPANY.

THE COMPANY

GENERAL

The Company is a music and entertainment company focused on providing music
driven content for the expanding music and entertainment industry. The Company's
current businesses include: the production of original music scores and
advertising themes for television, radio and film; the production of music
videos and music specials for television; and music artist management. The
Company's operations are currently conducted through its three wholly-owned
operating subsidiaries: Rave, Picture Vision, and All Access. The Company
provides a range of in-house products and services necessary for music driven
content production which range of in-house products and services are not
typically provided by other independent music companies. The Company believes
that these in-house products and services provide it with certain competitive
advantages potentially resulting in lower costs and greater convenience for its
customers. See "Business."

Following the Offering, the Company's strategy is to: (i) invest in and
expand its current businesses; (ii) establish one record label; and (iii)
commence an acquisition program to acquire or develop small complementary music
driven businesses. Through the implementation of this strategy, the Company
hopes to expand the range of music driven products and services it provides and
the size of its business.

CURRENT BUSINESS

The Company's commercial music production business is conducted through
Rave, which was founded in 1986 by John Loeffler, the President of the Company.
The Company creates original music scores and advertising themes for television,
radio, and film. This business involves developing original music, hiring
musicians, recording music in its digital writing rooms and recording studios
and submitting final, ready to use, compositions. Rave has composed and produced
more than 2,000 commercial scores and has received various awards, including
awards from the American Society of Composers, Authors and Publishers ("ASCAP").
See "Business--Current Business--Commercial Music."

The Company's music video and television music special production business
is conducted through Picture Vision, which was founded in 1984 by Jon Small, an
Executive Vice President of the Company. The Company produces music videos used
to promote music artists as well as music specials for programs for television
networks and other video broadcasters. In connection with this business the
Company, utilizing both in-house capabilities and independent contractors,
directs, produces, story-writes, art directs, scouts locations, produces special
effects, edits, contracts, and manages the production. Picture Vision has
produced numerous music videos and television music video specials for many well
known artists and has won MONITOR and ACE awards. For work he directed for
Picture Vision, Mr. Small was awarded the "1995

3
<PAGE>
Music Video Director Of The Year" by the Country Music Association. See
"Business--Current Business--Video Production."

The Company's music artist management services are provided by All Access,
which currently manages the careers of seven music artists and/or music groups.
All Access was founded in 1994 by Brian Doyle and Richard Flynn, each an
Executive Vice President of the Company. The services provided to clients
include securing recording and publishing contracts, advising on the creative
aspects of their music and public image and organizing the many aspects of
touring, publicity, television appearances, videos, and business affairs. See
"Business--Current Business--Music Artist Management."

Each of the Company's businesses will seek to make substantial use of the
capabilities of its other businesses in order to lower costs and increase
efficiency. There can be no assurance that any such efficiencies will be
achieved.

DEVELOPMENT OF RECORDED MUSIC BUSINESS

The Company will enter into the recorded music business by establishing one
independent record label under a soon-to-be formed subsidiary referred to in the
Prospectus as PRM. It is anticipated that this record label will be a
contemporary label featuring alternative and adult contemporary artists. The
Company will seek to sign artists believed to have commercial appeal, but who
will not require substantial advances or special production facilities.
Typically these artists will be commercially unknown recording artists. The
Company will also seek to hire established producers who are attracted to the
potentially greater independence and flexibility which it is believed can be
offered by an independent music company. PRM will be under the direction of
Brian Doyle and Richard Flynn and will, to the extent practicable, utilize the
in-house recording studios and video production facilities of the Company. Until
it can support a higher level of overhead, PRM will, to the extent practicable,
use the existing resources of the Company, particularly those employed in its
artist management services business. It is anticipated that additional record
labels may be developed or acquired. See "Use of Proceeds" and
"Business--Development of Recorded Music Business."

ACQUISITION PROGRAM

The music and entertainment industry includes six major companies in the
area of recorded music and thousands of smaller independent music companies in
the area of recorded music and the broader music business. The Company believes
that many owners of independent music companies do not enjoy certain benefits
which the Company intends to offer. These benefits include the ability to
provide a broader range of services to their clients and greater liquidity and
potential for capital enhancement through ownership of a publicly traded entity.
Other benefits that the Company believes it can provide acquired companies are
access to capital, management expertise and a broad range of industry contacts.
See "Business-- Acquisition Program."

The Company's acquisition program will concentrate on acquisitions of small
complementary music driven businesses in the music and entertainment industry.
For purposes of this Prospectus, the term "acquisition" includes not only the
purchase of existing businesses but also joint ventures or similar arrangements
with existing business and with individuals seeking to establish businesses in
specific areas of the music and entertainment business. The Company initially
will target acquisitions of up to $5 million. In its business acquisitions, the
Company will seek to acquire established companies and engage in other
acquisitions which the Company believes may generate, under its management,
profits and opportunities for growth. It is anticipated that by targeting
acquisitions in areas in which the Company's existing management has expertise,
the Company will be better able to attempt to achieve operating efficiencies by
merging a portion of the overhead of acquired companies into the Company's
existing infrastructure. The Company intends to use equity, cash, debt
instruments or a combination thereof in making acquisitions. The Company
believes that larger companies are not interested in acquisitions of this size,
while due to the complexity involved in acquiring and integrating additional
smaller entities, smaller companies will not

4
<PAGE>
compete as aggressively for such acquisitions. The Company further believes that
consistent with the broad range of experience of its management combined with
the development of its businesses that it will be able to compete effectively
with other small companies for acquisitions. To accomplish its acquisition
program, the Company, in the future, may need to obtain additional financing.
See "Risk Factors--Future Capital Needs; Uncertainty of Future Funding" and
"Business--Acquisition Program."

The Company has no present agreements, understandings or negotiations
relating to any current or pending acquisitions. There can be no assurance that
the acquisition program will be successful, that companies acquired by the
Company will be profitable or that the Company will be able to achieve
substantial growth. See "Risk Factors."

CORPORATE INFORMATION

The Company was incorporated in Delaware in July 1996. On October 9, 1996
the Company consummated the Exchange Agreement, pursuant to which it issued an
aggregate of 873,000 shares of Common Stock to John Loeffler, Jon Small, Brian
Doyle and Richard Flynn in exchange for all of the outstanding common stock of
each of Rave, Picture Vision and All Access.

The Company's principal executive offices are at 420 West 45th Street, New
York, New York 10036. The Company's telephone number is (212) 957-9393.

THE OFFERING

<TABLE>
<S> <C>
Securities Offered........................... 1,000,000 Units, each Unit consisting of one
share of Common Stock and one Warrant. Two
Warrants entitle the holder thereof to
purchase, at an exercise price of $8.40 per
share, one share of Common Stock at any time
prior to , 2000. The exercise
price of the Warrants is subject to
adjustment and the Warrants are subject to
redemption in certain circumstances. See
"Description of Securities--Warrants."

Common Stock Outstanding Prior to the 1,072,000 shares
Offering...................................

Common Stock Outstanding After the 2,072,000 shares
Offering...................................

Use of Proceeds.............................. The net proceeds of the Offering will be used
for: (i) the establishment of the Company's
recorded music business; (ii) the acquisition
program, (iii) expanding existing businesses;
(iv) the purchase of new equipment; and (v)
working capital and general corporate
purposes. See "Use of Proceeds."

Proposed Nasdaq Trading Symbols(1):

Common Stock...............................

Warrants...................................
</TABLE>

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(1) Notwithstanding quotation on Nasdaq, there can be no assurance that an
active trading market for the Company's securities will develop, or, if
developed, that it will be sustained.

RISK FACTORS

An investment in the securities offered hereby is speculative in nature and
involves a high degree of risk. Prior to making any investment decision,
prospective investors should read and carefully review the "Risk Factors"
section of this Prospectus.

5
<PAGE>
SUMMARY FINANCIAL AND OPERATING DATA

The summary financial information set forth below is derived from the
consolidated financial statements included elsewhere in this Prospectus and
should be read in conjunction with such consolidated financial statements and
the notes thereto.

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
JUNE 30,
--------------------------
<S> <C> <C>
1996 1995
------------ ------------
STATEMENT OF OPERATIONS DATA:
Revenues.......................................................... $ 3,638,192 $ 3,379,848
------------ ------------
Operating expenses:
Cost of sales................................................... 1,939,807 2,096,076
Marketing, selling general and administrative................... 1,610,097 1,386,270
------------ ------------
Total operating expenses.......................................... 3,549,904 3,482,346
------------ ------------
Income (loss) before income taxes................................. 88,288 (102,498)
Income taxes...................................................... 10,500 --
------------ ------------
Net income (loss)................................................. $ 77,788 $ (102,498)
------------ ------------
------------ ------------
Net income (loss) per share(1)(4)................................. $ .08 $ (.10)
------------ ------------
------------ ------------
Shares used in computing net income per share(1)(4)............... 1,035,000 986,500
------------ ------------
------------ ------------
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1996
-------------------------------
<S> <C> <C>
AS
ACTUAL ADJUSTED(2)(3)(4)
---------- -------------------
BALANCE SHEET DATA:
Working capital.............................................. $ 39,754 $ 5,034,754
Total assets................................................. 330,009 5,320,009
Total current liabilities.................................... 190,029 190,029
Retained earnings............................................ 119,160 119,160
Total stockholders' equity................................... 139,980 5,129,980
</TABLE>

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(1) Net income per common and common equivalent share is computed based upon the
weighted average number of shares of Common Stock outstanding during the
periods and gives effect to certain adjustments described below. Pursuant to
the requirements of the Securities and Exchange Commission (the
"Commission"), all stock issued within the 12 months immediately preceding
the initial filing of the Registration Statement for the Offering at a price
below the anticipated initial public offering price, totaling 1,072,000
shares of Common Stock, have been included in the calculation for all
periods presented.

(2) As adjusted to give effect to the sale of 1,000,000 Units in the Offering
(after deduction of underwriting discounts and estimated expenses to be
incurred by the Company in connection with the Offering) at an assumed
initial public offering price of $6.00 per Unit. See "Use of Proceeds" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

(3) As adjusted to give effect to the sale of 70,000 shares of Common Stock
prior to the Offering (after deducting expenses to be incurred by the
Company).

(4) As adjusted to give effect to the issuance of 4,000 shares of Common Stock
to an attorney.

6
<PAGE>
RISK FACTORS

AN INVESTMENT IN THE COMPANY INVOLVES A HIGH DEGREE OF RISK. IN ADDITION TO
THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, PROSPECTIVE INVESTORS SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS BEFORE PURCHASING UNITS OFFERED
HEREBY.

RECENTLY CONSOLIDATED ENTITY; NO ASSURANCE OF FUTURE PROFITABILITY

While the Company's subsidiaries have operating histories, the Company was
recently organized and has no history as a consolidated enterprise. The
integration of the consolidated entities, which will be commenced after the
completion of the Offering, may take a significant amount of time to achieve
successfully, if ever. The failure to successfully integrate the business of
these subsidiaries would have a materially adverse effect on the Company. There
can be no assurance that the Company will achieve or sustain profitability.
Future operating results will depend on many factors, including demand for the
Company's products and services, the level of competition, the Company's ability
to acquire, develop and market new artists, products and services and the
ability of its officers and key employees to manage the Company's business and
control costs. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Business."

DEPENDENCE ON SENIOR MANAGEMENT; ATTRACTION AND RETENTION OF KEY PERSONNEL

The business of the Company is highly dependent on the skill and creativity
of its employees. The success of the Company will be largely dependent on the
skills, experience and efforts of its senior management, especially John
Loeffler, Jon Small, Brian Doyle and Richard Flynn, each of whom has an
employment agreement with the Company, and Robert Klein. In addition, the
Company's success will depend in large part upon its ability to attract and
retain qualified management, marketing and sales personnel. The Company competes
for personnel with other companies and organizations. There can be no assurance
that the Company will be successful in hiring or retaining qualified personnel.
The loss of the services of any of John Loeffler, Jon Small, Brian Doyle or
Richard Flynn, or the Company's inability to hire or retain qualified personnel,
could have a materially adverse effect on the Company. The Company has "key man"
life insurance policies covering the lives of John Loeffler, Jon Small, Brian
Doyle and Richard Flynn. See "Management."

CERTAIN RISKS INHERENT IN THE RECORDED MUSIC INDUSTRY

By entering into the recorded music business, the Company will be subject to
all the risks of establishing a new business. Additionally, the recorded music
industry contains certain particular risks. Each recording is an individual
artistic work, and its commercial success is primarily determined by consumer
taste, which is unpredictable and constantly changing. Accordingly, there can be
no assurance as to the financial success of any particular release, the timing
of such success or the popularity of any particular artist. Furthermore, changes
in the timing of new releases can cause significant fluctuations in quarterly
operating results. There can be no assurance that the Company will be able to
generate sufficient revenues from successful releases to cover the costs of
unsuccessful releases. Following the Offering, the Company will attempt to
contract with one of the major recorded music companies to manufacture and
distribute the Company's recorded music products through such entity's
manufacturing facilities and distribution network. There can be no assurance
that such an agreement will be reached or, if reached, that the terms will be
advantageous to the Company. See "Risk Factors--Quarterly and Yearly
Fluctuations, Seasonality" and "Business--Development of Recorded Music
Business--Manufacturing and Distribution."

In accordance with industry practice, the Company's music products will be
sold primarily on a returnable basis. The Company will establish reserves for
future returns of products based on its return policies and return experience.
An increase in returns over the Company's reserves could adversely affect

7
<PAGE>
the Company's results of operations. The Company may be engaged in licensing
activities involving both the acquisition of rights to certain master recordings
and compositions for its own projects and the granting of rights to third
parties in the master recordings and compositions it owns. There can be no
assurance that the Company will be able to obtain licenses from third parties on
terms satisfactory to the Company or at all. See "Development of Recorded Music
Business."

RISKS ASSOCIATED WITH TALENT DEVELOPMENT

Currently, the Company has not entered into recording contracts with any
artists. The Company will have to pay advances consistent with industry
standards to secure the services of music artists. Should the artist's album not
sell well, or should the artist fail to produce an album, the amount of the
advance already paid to the artist is generally not recovered. There can be no
assurance that the Company will be able to attract artists, or, if the Company
is able to attract such talent, that the Company will be able to develop that
talent successfully or in such a manner that significant sales of artist product
results. There can also be no assurance that any of the artists to whom the
Company makes advances will produce sales revenue for the Company, or if they
do, that such revenue will be sufficient to recoup any advances made to them by
the Company. In addition there can be no assurance that any artist developed by
the Company will not request a release from his or her agreement with the
Company. Because of the highly personal and creative nature of the artist's
contractual obligations to the Company, it is not feasible to force an unwilling
artist to perform the terms of his or her contract with the Company. The loss of
an artist could have a materially adverse effect on the Company. See
"Business--Development of Recorded Music Business-- Relationship with Artists."

MANAGEMENT OF GROWTH

Following the Offering, the Company intends to grow and expand its business
through internal expansion and through acquisitions. If such growth occurs, it
will place demands on the Company's management, employees, operations and
physical resources. To manage such growth, the Company will be required to
continue to implement and improve its operating systems, attract and train
additional qualified personnel and expand its facilities. The failure of the
Company to effectively manage growth could have a materially adverse effect on
the Company. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Business."

RELIANCE ON AND RISKS OF ACQUISITIONS

Following the Offering, the Company will initiate its acquisition program
which will focus on small complementary music and entertainment companies. Some
of these acquisitions could be material in size and scope. The Company believes
that its future growth depends, in part, upon the successful implementation of
this program. The failure of the acquisition program could have a materially
adverse effect on the Company. Many of these activities may require substantial
working capital in addition to the direct acquisition costs. See
"Business--Acquisition Program."

While the Company will continually be searching for acquisition
opportunities, there can be no assurance that the Company will be successful in
identifying attractive acquisitions. If any potential acquisition opportunities
are identified, there can be no assurance that the Company will consummate such
acquisitions or, if any such acquisition does occur, that it will be successful
in enhancing the Company's business. The Company may in the future face
increased competition for acquisition opportunities, which may inhibit the
Company's ability to consummate suitable acquisitions and increase the expense
of completing acquisitions. In addition, to the extent that the Company's
acquisition program results in the acquisition of businesses, such acquisitions
could pose a number of special risks, including the diversion of management's
attention, the assimilation of the operations and personnel of the acquired
companies, the integration of acquired assets with existing assets, adverse
short-term effects on reported operating results, the amortization of acquired
intangible assets and the loss of key employees.

8
<PAGE>
Pursuant to its acquisition program, the Company will issue additional
Common Stock which may dilute investors in the Offering. See "Risk
Factors--Dilution and Dividend Policy" and "Business-- Acquisition Program."

FUTURE CAPITAL NEEDS; UNCERTAINTY OF FUTURE FUNDING

In order to implement its acquisition program or establish additional record
labels or other businesses in the future, the Company may, in the future,
require additional capital. If and when the Company needs additional cash for
such activities, it may make additional equity or debt offerings or may borrow
on the security of existing assets or the assets it is seeking to acquire or
otherwise. The issuance of debt securities or borrowings could result in
increased leverage and reduced or negative working capital. There can be no
assurance that the Company will be able to obtain either equity or debt
financing on terms acceptable to the Company, and the inability to obtain such
financing could limit the Company's growth or have an adverse effect on its
operations. The Company could issue debt or equity securities without the
consent of persons who purchase Units in the Offering. The issuance of
additional Common Stock could result in additional dilution. See "Use of
Proceeds" and "Business--Acquisition Program."

COMPETITION

The Company currently competes with numerous other businesses and
individuals who produce original music scores and advertising themes for
television, radio and film, produce music videos and music specials for
television and provide music artist management. Many of these businesses and
individuals have longer operating histories and greater financial resources than
the Company. Following the Offering, the Company intends to establish an
independent record label. With respect to this and future record labels, the
Company will face intense competition for discretionary consumer spending from
numerous other record companies and other forms of entertainment offered by film
companies, video companies and others. The Company will compete directly with
other recorded music companies, including the six major recorded music
companies, which distribute contemporary music, as well as with other record
companies for signing artists and acquiring music catalogs. Many of these
competitors have significantly longer operating histories, greater financial
resources and larger music catalogs than the Company. The Company's ability to
compete successfully in the recorded music business will be largely dependent
upon its ability to sign and retain successful artists and to introduce music
products which are accepted by consumers. See "Business--Competition."

QUARTERLY AND YEARLY FLUCTUATIONS, SEASONALITY

The Company believes the results of operations of its operating subsidiaries
will be subject to seasonal variations, which variations may initially offset
each other. However, once the Company enters into the recorded music business,
the Company's results of operations from period to period may be materially
affected by the timing of new record releases and, if such releases are delayed
beyond the peak holiday season, the Company's operating results could be
materially adversely affected. Additionally, due to the success of particular
artists, artists touring schedules and the timing of music television specials,
it is possible that the Company could also experience material fluctuations in
revenue from year to year. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

DEPENDENCE UPON MAJOR CUSTOMERS

Approximately $365,000 and $413,000 of commercial music production revenues
for the year ended June 30, 1996 and 1995, respectively, are derived from one
advertising agency. Approximately $700,000 and $185,000 of music talent
management revenues for the years ended June 30, 1996 and 1995, respectively,
are derived from two musical artists. For the years ended June 30, 1996,
approximately $518,000 of video production revenue was derived from two artists
and for the year ended June 30, 1995, approximately $778,000, of video
production revenues was derived from one artist. The loss of such

9
<PAGE>
customer or artists, or the failure to collect amounts owed could have a
materially adverse effect on the Company. Revenues generated by one customer or
client in one year may not be indicative of the revenue which will be generated
by such customer or client in any other year. See "Management's Discussion and
Analysis of Financial Conditon and Results of Operations."

INFRINGEMENT OF COMPANY'S COPYRIGHTED MATERIALS

Infringement of the Company's copyrights, in the form of unauthorized
reproduction and sale of artists' recordings, may occur. If the Company achieves
significant commercial success with one or more of its recordings, its
recordings could be a target of "pirating"--copying and sale in violation of the
Company's copyrights in such recordings. It is impossible to estimate the
potential loss in sales that could result for illegal copying and sales of the
Company's recordings. The Company intends to enforce against unlawful
infringement all copyrights owned by or licensed to it which are material to its
business. See "Business--Copyrights."

POSSIBILITY OF BONUS WITHOUT PROFITS

Based on the Company's compensation system, certain key executives of Rave,
Picture Vision or All Access may be paid bonuses based upon achieving annual
performance targets, even though the Company as a whole may have suffered a loss
for such year. See "Management--Executive Compensation-- Employment Agreements."

NO PRIOR PUBLIC MARKET AND POSSIBLE VOLATILITY OF PRICE

Prior to the Offering, there has been no public market for the Common Stock
and Warrants, and there can be no assurance that an active public market for the
Common Stock and Warrants will develop or be sustained after the Offering. The
stock market generally, and securities of entertainment companies in particular,
have from time to time experienced significant price and volume fluctuations
that are unrelated to the operating performance of any particular company. The
Company believes factors such as quarterly fluctuations in results of
operations, timing of product releases, announcements of new products and
acquisitions by the Company or by its competitors, changes in earnings estimates
by research analysts, changes in accounting treatments or principles and other
factors may cause the market price of the Common Stock and Warrants to
fluctuate, perhaps substantially. These fluctuations, as well as general
economic, political and market conditions, may adversely affect the market
prices of the Common Stock and Warrants. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations." The initial public
offering price of the Units has been determined by negotiations among the
Company and the Representative and may not be indicative of the prices that may
prevail for the Common Stock and the Warrants in the public market, and is not
necessarily related to the Company's asset value, net worth, results of
operations or any other established criteria of value. See "Underwriting."

DILUTION AND DIVIDEND POLICY

The initial public offering price of the Units offered hereby is
substantially higher than the net book value of the currently outstanding Common
Stock. Therefore, purchasers of the Units offered hereby will experience
immediate and substantial dilution in the net tangible book value of the Common
Stock in the amount of $3.52 per share (59%) (based on the assumed initial
public offering price of $6.00 per Unit and assuming no portion of the initial
public offering price is attributable to the Warrants). Existing stockholders
paid an average of $.23 per share of Common Stock. Purchasers of the Common
Stock offered hereby may experience dilution in the future as a result of Common
Stock issued pursuant to the Company's acquisition program. See
"Business--Acquisition Program." The Company has never declared or paid a cash
dividend on its Common Stock and does not expect to pay cash dividends in the
foreseeable future. See "Dividend Policy" and "Dilution."

10
<PAGE>
CONTROL BY CERTAIN STOCKHOLDERS; ANTI-TAKEOVER CONSIDERATIONS

Upon completion of the Offering, the Company's officers and directors and
their respective affiliates will beneficially own approximately 48.9%
(approximately 45.6% if the Over-Allotment Option is exercised in full) of the
Company's outstanding Common Stock. Although no voting agreements or similar
arrangements among such stockholders will exist upon completion of the Offering,
if such stockholders were to act in concert in the future, they would
effectively be able to elect all of the directors of the Company, approve or
disapprove certain matters requiring stockholder approval and otherwise control
the management and affairs of the Company, including the sale of all or
substantially all of the Company's assets. Such concentration of control of the
Company may also have the effect of delaying, deferring or preventing a
third-party from acquiring a majority of the outstanding voting stock of the
Company, may discourage bids for the Company's Common Stock at a premium over
the market price and may adversely affect the market price of and other rights
of the holders of Common Stock. The Company's Certificate of Incorporation
authorizes the Company's Board of Directors to issue up to five million shares
of preferred stock in one or more series, to fix the rights, preferences,
privileges and restrictions granted to or imposed upon any wholly unissued
shares of preferred stock, to fix the number of shares constituting any such
series, and to fix the designation of any such series, without further vote or
action by its stockholders. The rights of the holders of Common Stock will be
subject to, and may be materially adversely affected by, the rights of the
holders of any preferred stock that may be issued in the future. The issuance of
preferred stock could have the effect of making it more difficult for a third
party to acquire a majority of the outstanding voting stock of the Company. The
Company has no present plans to issue shares of preferred stock. Also, Section
203 of the Delaware General Corporation Law restricts certain business
combinations with any "interested stockholder" as defined by such statute. Any
of the foregoing factors may delay, defer or prevent a change in control of the
Company. See "Management," "Principal Stockholders" and "Description of
Securities--Preferred Stock" and "Description of Securities--Delaware
Anti-Takeover Law."

SHARES ELIGIBLE FOR FUTURE SALE

The sale of a substantial number of shares of Common Stock, or the
perception that such sales could occur, could adversely affect prevailing market
prices for the Common Stock. In addition, any such sale or perception could make
it more difficult for the Company to sell equity securities or equity related
securities in the future at a time and price that the Company deems appropriate.
Upon consummation of the Offering, the Company will have a total of 2,072,000
shares of Common Stock outstanding, of which the 1,000,000 shares of Common
Stock included in the Units will be eligible for immediate sale in the public
market without restrictions, unless they are held by "affiliates" of the Company
within the meaning of Rule 144 under the Securities Act, and of which 1,018,000
shares will be "restricted" securities within the meaning of Rule 144 under the
Securities Act. The Company's officers and directors and the Selling
Stockholders (who in the aggregate will hold 1,068,000 shares of Common Stock)
have agreed that they will not directly or indirectly offer, sell, contract to
sell, grant any option to purchase or otherwise dispose of, without the prior
written consent of Donald & Co. Securities Inc., any shares of Common Stock or
any other equity security of the Company, or any securities convertible into or
exercisable or exchangeable for, or warrants, options or rights to purchase or
acquire, Common Stock or any other equity security of the Company, or enter into
any agreement to do any of the foregoing, for a period of two years from the
date of this Prospectus, with respect to the officers and directors, and for a
period of 180 days with respect to the Selling Stockholders who are not also
directors. Upon the expiration of such 180-day period (or earlier upon the
consent of Donald & Co. Securities Inc.), 54,000 of these shares will be
eligible for re-sale and upon the expiration of such two year period (or earlier
upon the consent of Donald & Co. Securities Inc.) the remaining 1,014,000 shares
will become eligible for resale commencing in October 1998 under Rule 144,
subject to volume and other limitations of Rule 144. Donald & Co. Securities
Inc. may, in its sole discretion, and at any time without notice, release all or
any portion of the shares subject to the lock-up agreements. No prediction can
be made as to the effect, if any, that future sales of shares of Common

11
<PAGE>
Stock, or the availability of shares for future sales, will have on the market
price of the Common Stock from time to time or the Company's ability to raise
capital through an offering of its equity securities. See "Principal
Stockholders," "Description of Securities," "Shares Eligible for Future Sale"
and "Underwriting."

CURRENT PROSPECTUS AND STATE REGISTRATION REQUIRED TO EXERCISE WARRANTS

Purchasers of Units will only be able to exercise the Warrants if (i) a
current prospectus under the Securities Act relating to the Common Stock
underlying the Warrants is then in effect and (ii) such Common Stock is
qualified for sale or exempt from qualification under the applicable securities
laws of the states in which the various holders of the Warrants reside. There
can be no assurance that the Company will be able to maintain the effectiveness
of a current prospectus covering the Common Stock underlying the Warrants. The
value of the Warrants may be greatly reduced if a current prospectus, covering
the Common Stock issuable upon the exercise of the Warrants, is not kept
effective or if such Common Stock is not qualified, or exempt from
qualification, in the states in which the holders of Warrants reside. See
"Description of Securities--Warrants."

POTENTIAL ADVERSE EFFECT OF REDEMPTION OF WARRANTS

The Warrants may be redeemed by the Company at a redemption price of $.05
per Warrant upon 30 days' notice if the average closing bid price of the Common
Stock has been equal to or greater than 120% of the then exercise price of the
Warrants (subject to adjustment) for 20 consecutive business days ending on the
fifth day prior to the notice of redemption. Redemption of the Warrants could
force the holders to exercise the Warrants and pay the exercise price at a time
when it may be disadvantageous for the holders to do so, to sell the Warrants at
the then current market price when they might otherwise wish to hold the
Warrants or to accept the redemption price, which, at the time the Warrants are
called for redemption, is likely to be substantially less than the market value
of the Warrants. See "Description of Securities-- Warrants."

POSSIBLE DELISTING OF SECURITIES FROM NASDAQ AND POSSIBLE MARKET ILLIQUIDITY

There can be no assurance that the Company will meet the criteria for
continued listing of securities on Nasdaq. Continued listing criteria generally
include a minimum of $2,000,000 in total assets, $1,000,000 in capital and
surplus, a minimum bid price of $1.00 share of common stock and 100,000 shares
in the public float. In addition, the common stock must have at least two
registered and active market makers, must be held by at least 300 holders and
the market value of its public float must be at least $200,000. If an issuer
does not meet the $1.00 minimum bid price standard, it may remain on Nasdaq if
the market value of its public float is at least $1,000,000 and the issuer has
capital and surplus of at least $2,000,000. If the Company should become unable
to meet the continued listing criteria of Nasdaq and is delisted therefrom,
trading, if any, in the Common Stock and the Warrants would thereafter be
conducted in the over-the-counter market in the so-called "pink sheets" or the
"OTC Bulletin Board Service." As a result, an investor would likely find it more
difficult to dispose of or to obtain accurate quotations as to the value of the
Company's securities. See "Description of Securities."

POSSIBLE ADVERSE EFFECT OF PENNY STOCK RULES ON LIQUIDITY FOR THE COMPANY'S
SECURITIES

If the Company's securities were delisted from Nasdaq, they may become
subject to Rule 15g-9 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which imposes additional sales practice requirements on
broker-dealers which sell penny stocks to persons other than established
customers and institutional accredited investors. For transactions covered by
this Rule, a broker-dealer must make a special suitability determination for the
purchaser and have received the purchaser's written consent to the transaction
prior to sale. Consequently, such Rule may affect the ability of broker-dealers
to

12
<PAGE>
sell the Company's securities and may affect the ability of purchasers in the
Offering to sell any of the securities acquired hereby in the secondary market.

The Commission has adopted regulations which generally define a penny stock
to be any non-Nasdaq equity security that has a market price (as therein
defined) of less than $5.00 per share or an exercise price of less than $5.00
per share, subject to certain exceptions. For any transaction by broker-dealers
involving a penny stock, unless exempt, the rules require delivery, prior to a
transaction in a penny stock, of a risk disclosure document relating to the
penny stock market. Disclosure is also required to be made about compensation
payable to both the broker-dealer and the registered representative and current
quotations for the securities. Finally, monthly statements are required to be
sent disclosing recent price information for the penny stock held in the account
and information on the limited market in penny stocks. If the Company's
securities were subject to the rules on penny stocks, the market liquidity for
the Company's securities could be severely adversely affected.

13
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the Units offered by the
Company hereby are estimated to be approximately $4,800,000 ($5,583,000 if the
Over-Allotment Option is exercised in full), assuming an initial public offering
price of $6.00 per Unit and after deducting underwriting discounts and estimated
expenses of the Offering.

The Company expects to use the net proceeds (assuming no exercise of the
Over-Allotment Option) approximately as follows:

<TABLE>
<CAPTION>
APPROXIMATE APPROXIMATE PERCENTAGE
APPLICATION OF PROCEEDS DOLLAR AMOUNT OF NET PROCEEDS
- -------------------------------------------------------------------------- -------------- ----------------------
<S> <C> <C>
Establishment of the Company's recorded music business(1)................. $ 1,680,000 35.0%
Acquisition program(2).................................................... $ 1,200,000 25.0%
Expanding existing businesses(3).......................................... $ 600,000 12.5%
Purchase of new equipment(4).............................................. $ 360,000 7.5%
Working capital and general corporate purposes(5)......................... $ 960,000 20.0%
-------------- -------
Total................................................................. $ 4,800,000 100.0%
-------------- -------
-------------- -------
</TABLE>

- ------------------------

(1) Represents $800,000 to be used to establish the Company's record label,
which amount includes the base salary of one of the record label's executive
officers, with the balance allocated for the establishment of additional
record labels, if any. There can be no assurance that the Company will
establish more than one record label. If no additional record labels are
established, a portion of this amount will be transferred to working
capital. Such costs include anticipated artist advances for the initial
12-month period, salaries for additional employees, recording costs and
promotion and marketing expenses. If operating revenue from the recorded
music subsidiary is not sufficient to meet its expenses, the Company will
allocate additional funds out of working capital and general corporate
purposes to help pay such expenses. See "Business--Development of Recorded
Music Business."

(2) Represents amounts to be used for implementing the Company's acquisition
program, including amounts to be used for acquiring companies and assets in
accordance with the acquisition program and costs and expenses incurred in
connection with the acquisition program. See "Business-- Acquisition
Program."

(3) Represents $200,000 to be used for expanding each of the Company's existing
businesses, including upgrading facilities and equipment (other than new
recording studio equipment) and expanding marketing and promotion. See
"Business--Current Business."

(4) Represents amounts to be used for new recording studio equipment.

(5) Represents amounts to be used for working capital and general corporate
purposes including corporate overhead, administration and ongoing
professional fees. Does not include any amounts for base salaries, since,
unless otherwise set forth in the foregoing categories, base salaries
payable by the Company during the 12-month period following the date of this
Prospectus (including for the Company's current executive officers) will be
paid from operating revenue. Includes an aggregate of $275,500 in advance of
bonus compensation payable to John Loeffler, Jon Small, Brian Doyle and
Richard Flynn which amounts will be repaid if they are not earned.

The allocation of the net proceeds from the Offering set forth above
represents the Company's best estimates based upon its currently proposed plans
and assumptions relating to its operations (including assumptions regarding the
timing and costs associated with the establishment of the Company's record label
and costs associated with the acquisition program) and certain assumptions
regarding general economic conditions. If any of these factors change, the
Company may find it necessary or advisable to reallocate some of the proceeds
within the above-described categories or to use portions thereof for other

14
<PAGE>
purposes. Any such shifts in the use of proceeds will be at the discretion of
the Company. The Company anticipates, based on its currently proposed plans and
assumptions, that the proceeds of the Offering, together with the Company's
current cash and cash equivalent balances, will be sufficient to satisfy all of
the Company's contemplated cash and capital requirements for at least 12 months
following the consummation of the Offering. Following such 12-month period
additional funds may be needed. The Company has no current arrangements with
respect to, or sources of, additional financing, and there can be no assurance
that additional financing, including any institutional financing, will be
available to the Company if needed on commercially reasonable terms or at all.
Any inability to obtain additional financing when needed could have a material
adverse effect on the Company, including requiring the Company to significantly
curtail or possibly cease its operations. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital
Resources."

If the Representative exercises the Over-Allotment Option in full, the
Company will realize additional net proceeds (after deducting the underwriting
discounts and the Representative's nonaccountable expense allowance) of
$783,000. If the Warrants offered hereby are exercised, the Company will realize
proceeds relating thereto of approximately $3,600,000, before any solicitation
fees which may be paid in connection therewith. Such additional proceeds, if
received, are expected to be used for working capital and general corporate
purposes. See "Underwriting."

Proceeds not immediately required for the purposes described above will be
invested principally in United States government securities, short-term
certificates of deposit, money market funds or other short-term interest-bearing
investments.

DIVIDEND POLICY

Since its inception, the Company has not paid any dividends on the Common
Stock. The Company intends to retain future earnings, if any, that may be
generated from the Company's operations to help finance the operations and
expansion of the Company and, accordingly, does not plan, for the reasonably
foreseeable future, to pay dividends to holders of the Common Stock. Any
decision as to the future payment of dividends will depend on the results of
operations and financial position of the Company and such other factors as the
Company's Board of Directors, in its discretion, deems relevant.

15
<PAGE>
DILUTION

The net tangible book value of the Company at June 30, 1996, after giving
effect to the sale of 70,000 shares of Common Stock subsequent thereto, was
approximately $330,000 or $.31 per share of Common Stock. Net tangible book
value per share represents the amount of total tangible assets less total
liabilities, divided by the number of shares of issued and outstanding Common
Stock. After giving effect to the sale of the 1,000,000 Units offered hereby at
an assumed initial public offering price of $6.00 per Unit, the net tangible
book value of the Company, as of June 30, 1996, would have been approximately
$5,130,000 or $2.48 per share (assuming no portion of the initial public
offering price is attributable to the Warrants). This represents an immediate
increase in net tangible book value of $2.17 per share to existing stockholders
and an immediate dilution of $3.52 per share to new stockholders purchasing
Units in the Offering. The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price................. $ 6.00
Net tangible book value per share of Common Stock at
June 30, 1996(1).................................. $ .31
Increase per share attributable to new
stockholders...................................... 2.17
---------
Net tangible book value per share of Common Stock
after the Offering.................................. 2.48
---------
Dilution per share to new stockholders................ $ 3.52(2)(3)
---------
---------
</TABLE>

- ------------------------

(1) Gives effect to the sale of 70,000 shares of Common Stock subsequent to June
30, 1996 at a price of $3.00 per share less estimated expenses of $15,000
and deferred registration costs of $5,000.

(2) Gives effect to the issuance of 4,000 shares of Common Stock to an attorney
at a price of $3.00 per share, less deferred registration costs of $12,000.

(3) This represents dilution of approximately 59%.

The following table summarizes, on a pro forma basis as of June 30, 1996,
the differences between the number of shares purchased from the Company, the
relative investment in the Company and the average price per share paid by
existing stockholders and investors in the Offering, giving pro forma effect to
the sale by the Company of the Units offered hereby at $6.00 per Unit, assuming
no portion of the initial offering price is attributable to the Warrants.

<TABLE>
<CAPTION>
SHARES OWNED TOTAL CONSIDERATION AVERAGE
------------------------- ------------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Existing stockholders.................................. 1,072,000(1) 51.7% $ 242,820 3.9% $ .23
New stockholders....................................... 1,000,000 48.3 6,000,000 96.1 $ 6.00
------------ ----- ------------ -----
Total.............................................. 2,072,000 100.0% $ 6,242,820 100.0%
------------ ----- ------------ -----
------------ ----- ------------ -----
</TABLE>

- ------------------------

(1) Gives effect to the sale of 70,000 shares of Common Stock subsequent to June
30, 1996 at a price of $3.00 per share less estimated expenses of $15,000
and deferred registration costs of $5,000. Gives effect to the issuance of
4,000 shares of Common Stock to an attorney at a price of $3.00 per share
and includes 873,000 shares of Common Stock issued in exchange for all of
the outstanding shares of Common Stock of Rave, Picture Vision and All
Access.

16
<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of the Company: (i) at
June 30, 1996, and (ii) as adjusted to reflect the issuance and sale by the
Company of the Units offered hereby (at an assumed initial public offering price
of $6.00 per Unit and after deduction of underwriting discounts and estimated
Offering expenses payable by the Company).

<TABLE>
<CAPTION>
AT JUNE 30, 1996
------------------------
<S> <C> <C>
ACTUAL AS ADJUSTED
---------- ------------
Stockholders' Equity:
Preferred Stock, $.01 par value per share; 5,000,000 shares authorized, no shares
issued and outstanding.............................................................. $ -- $ --
Common Stock, $.01 par value per share; 20,000,000 shares authorized; 998,000 shares
currently issued and outstanding; 2,072,000 shares outstanding as
adjusted(1)(2)(3)................................................................... 9,980 20,720
Additional paid in capital(1)(2)(3)................................................... 12,090 4,991,350
Retained earnings..................................................................... 119,160 119,160
Common Stock subscription receivable.................................................. (1,250) (1,250)
---------- ------------
Total capitalization................................................................ $ 139,980 $ 5,129,980
---------- ------------
---------- ------------
</TABLE>

- ------------------------

(1) To record the sale of 1,000,000 Units at the initial public offering price
of $6.00 per share after providing for approximately $600,000 in expenses of
the Offering payable by the Company and $600,000 in underwriting discounts.

(2) Gives effect to the sale of 70,000 shares of Common Stock subsequent to June
30, 1996 at a price of $3.00 per share less estimated expenses of $15,000
and deferred registration costs of $5,000.

(3) Gives effect to the issuance of 4,000 shares of Common Stock to an attorney
subsequent to June 30, 1996, at a price of $3.00 per share, less deferred
registration costs of $12,000.

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<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

<TABLE>
<CAPTION>
JUNE 30, 1996
------------------------------
<S> <C> <C>
AS
ACTUAL ADJUSTED(2)(3)(4)
--------- -------------------
BALANCE SHEET DATA:
Working capital............................................... $ 39,754 $ 5,034,754
Total assets.................................................. 330,009 5,320,009
Total current liabilities..................................... 190,029 190,029
Retained earnings............................................. 119,160 119,160
Total stockholders' equity.................................... 139,980 5,129,980
</TABLE>

- ------------------------

(1) Net income per common and common equivalent share is computed based upon the
weighted average number of shares of Common Stock outstanding during the
periods and gives effect to certain adjustments described below. Pursuant to
the requirements of the Securities and Exchange Commission (the
"Commission"), all stock issued within the 12 months immediately preceding
the initial filing of the Registration Statement for the Offering at a price
below the anticipated initial public offering price, totaling 1,072,00
shares of Common Stock, have been included in the calculation for all
periods presented.

(3) As adjusted to give effect to the sale of 70,000 shares of Common Stock
prior to the Offering (after deducting expenses to be incurred by the
Company).

(4) As adjusted to give effect to the issuance of 4,000 shares of Common Stock
to an attorney, utilizing the "treasury stock method."

18
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The following discussion of the consolidated financial condition and related
results of operations of the Company should be read in conjunction with the
Company's consolidated financial statements and the related notes thereto
included elsewhere in this Prospectus.

While the Company's subsidiaries have operating histories, the Company was
incorporated in Delaware in July 1996 and has no history as a consolidated
enterprise. Management therefore believes that the period to period comparisons
of the Company's results of operations are not indicative of the results that
may be expected for the year ending June 30, 1997. See "Risk Factors--Recently
Consolidated Entity; No Assurance of Future Profitability, --Certain Risks
Inherent in the Recorded Music Industry, --Management of Growth, --Risks
Associated With Talent Development."

During the next twelve months of operations, the Company expects to expand
its three wholly-owned subsidiaries (Rave, Picture Vision, and All Access),
establish its record label, and implement its acquisition program. There can be
no assurance that any of these goals will be achieved by the Company.

The Company's plans include increasing its overhead to accommodate the
anticipated growth of its subsidiaries and the establishment of its record
label, including the hiring of additional personnel. The Company's failure to
expand its business in an efficient manner could have a material adverse effect
upon the Company's business, operating results and financial condition. In
addition, there can be no assurance that the Company will grow at a rate that
will support its increasing overhead and the expenses of its expansion.

GENERAL

The Company currently derives most of its revenues from the sale of original
music scores and advertising themes for television, radio, and film, music
videos used to promote music artists as well as music specials for programs for
television networks and other video broadcasters, and from the management of
music artists. The Company's commercial music production revenues and the
related production costs are recognized upon acceptance of the music production
by the client. Royalty and residual income is recognized when received. Music
video production revenues and related production costs are recorded upon
completion for short term (less than a month) projects. For music video projects
with a longer duration, video production revenues and related production costs
are recorded using the percentage-of-completion method which recognizes income
on the project as work on the project progresses. Music artist management
revenues are recognized based upon the provisions of the individual management
contracts or arrangements.

The Company's operating results will be subject to quarterly fluctuations
and other fluctuations due to a variety of factors, including, seasonality of
concert schedules, video production schedules, the volume and timing of orders
and cancellations and or rescheduling of orders for services. See "Risk
Factors--Quarterly and Yearly Fluctuations."

MANUFACTURING AND DISTRIBUTION

The Company anticipates establishing manufacturing and distribution
contracts for the production and sale of the Company's future music products
(CDs, cassettes, music videos) by entering into manufacturing and distribution
agreements with existing manufacturing and distribution companies at competitive
rates. The Company expects to establish manufacturing and distribution
agreements within the next 12 months with a major manufacturer and distributor
to the music industry or with an independent manufacturer and distributor. There
can be no assurance that such agreements will be reached at all or for

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<PAGE>
terms advantageous to the Company. See "Risk Factors--Certain Risks Inherent in
the Recorded Music Industry."

RESULTS OF OPERATIONS

The following table sets forth, for the years indicated, statement of
operations data as a percentage of revenues.

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------
<S> <C> <C>
1996 1995
--------- ---------
Revenues.................................................................... 100.0% 100.0%
Cost of sales............................................................... 53.3 62.0
--------- ---------
Gross profit................................................................ 46.7 38.0
Marketing, selling, general and administrative.............................. 44.3 41.0
--------- ---------
Income (loss) before income taxes........................................... 2.4% (3.0)%
--------- ---------
--------- ---------
</TABLE>

FISCAL 1996 COMPARED TO FISCAL 1995

Gross revenues increased to $3,638,192 for the fiscal year ended June 30,
1996 from $3,379,848 for the fiscal year ended June 30, 1995, an increase of
$258,344 or 7.6%. The increase in gross revenues was principally attributable to
a full 12 months of operations for one of the Company's subsidiaries (All
Access) in 1996 as compared to only 10 months of operation during 1995, the year
in which the subsidiary commenced operations.

Costs of sales decreased to $1,939,807 for the fiscal year ended June 30,
1996 from $2,096,076, for the fiscal year ended June 30, 1995, a decrease of
$156,269 or 7.5%, primarily due to the decline in video production revenues in
1996 as compared to 1995. Such revenues involve more costs than the other
sources of revenues generated by the Company's subsidiaries.

Gross profit increased to $1,698,385 for the fiscal year ended June 30, 1996
from $1,283,772 for the fiscal year ended June 30, 1995, an increase of $414,613
or 32.3%. Gross profit as a percentage of gross revenues increased to 46.7% for
the fiscal year ended June 30, 1996 from 38.0% for the fiscal year ended June
30, 1995, primarily due to the decline in video production revenues in 1996 and
the increase in music artist management revenues during 1996.

Selling, general and administrative expenses increased to $1,610,097 for the
fiscal year ended June 30, 1996 from $1,386,270 for the fiscal year ended June
30, 1995, an increase of $223,827 or 16.2%. These expenses as percentage of
gross revenues increased to 44.3% for the fiscal year ended June 30, 1996 from
41.0% for the fiscal year ended June 30, 1995, or 3.3%. This increase is due to
the increased revenues in 1996 as compared to 1995 and a full 12 months of
operations for the Company's music artist management subsidiary which typically
has higher marketing, selling, general and administrative expenses than the
Company's commercial music production subsidiary and its music video production
subsidiary.

Income before income taxes increased to $88,288 for the fiscal year ended
June 30, 1996 from a loss of $102,498 for the fiscal year ended June 30, 1995,
an increase of $190,786, which is primarily attributable to the full year of
operations for the Company's music artist management subsidiary in 1996 which
included the months of July and August 1995 which are typically the best revenue
producing months of the year because of the heavy summer touring of the artists
under management.

LIQUIDITY AND CAPITAL RESOURCES

From inception through October 9, 1996, the Company raised $210,000 of
working capital through a private equity placement. See "Certain Transactions."

20
<PAGE>
Net cash provided by operating activities was $63,616 and $40,259 for the
years ended June 30, 1996 and 1995 respectively. The increase in net cash
provided by operating activities during 1996 as compared to 1995 resulted from
income from operations and a reduction of accounts receivable reduced by a
reduction in accounts payable.

Net cash used in investing activities of $24,573 and $84,763 for the years
ended June 30, 1996 and 1995, respectively, was primarly attributable to
purchase of property and equipment.

Net cash used in financing activities of $62,500 for the year ended June 30,
1996 was primarily attributable to the repayment of officers loans. Net cash
provided by financing activities of $72,500 for the year ended June 30, 1995,
was primarily attributable to the issuance of Common Stock and proceeds from
officers loans.

The Company is dependent upon the net proceeds of the Offering to fund the
growth of its activities over the next twelve months. Even if the Offering is
successfully completed, cash generated from operations may not be sufficient to
fund the Company's requirements beyond the next twelve months. Under such
circumstances, the Company would need to raise additional equity or debt
securities or obtain bank or other credit facilities. The sale of additional
equity could result in additional dilution to the Company's stockholders. There
can be no assurance that the Company will be able to sell such securities or
obtain such credit facilities on acceptable terms in the future, if at all. The
Company's inability to fund its capital requirements would have a material
adverse effect upon the Company's business, financial condition and results of
operations.

See "Risk Factors--Recently Consolidated Entity; No Assurance of Future
Profitability, --Certain Risks Inherent in the Recorded Music Industry,
- --Management of Growth."

INFLATION

The impact of inflation on the Company's operating results has been
insignificant in recent years, reflecting generally lower rates of inflation in
the economy. While inflation has not had a material impact on operating results,
there is no assurance that the Company's business will not be affected by
inflation in the future.

21
<PAGE>
BUSINESS

GENERAL

THE MUSIC INDUSTRY

Currently, the production of original music scores and advertising themes
for television, radio and film, the production of music videos and music video
specials for television, and music artist management are carried out by
individuals and/or small privately held niche companies. Generally, each such
individual and/or small company engages in only one of the foregoing businesses.
The Company believes that an integrated broader business can capitalize on the
anticipated growth in the music industry.

The recorded music business, unlike the current businesses of the Company,
is currently dominated by operating divisions of six major multi-billion dollar
international companies: Warner Bros. Records Inc., PolyGram Records, Inc., Sony
Corporation of America, BMG Music, MCA Inc./Universal City Studios, Inc. and
Thorn EMI Music. These six major recorded music companies also have their own
publishing divisions and distribution systems. The remainder of the recorded
music business is represented by numerous small independent recorded music
companies, smaller distribution companies and smaller publishing companies.
These companies are called independents simply because they are not one of the
six major recorded music companies. Collectively, according to Billboard, the
six major recorded music companies accounted for approximately 80% of sales in
1995 for the U.S. recorded music market, with the balance of sales being made by
the numerous independent companies. The Company believes that none of the six
major recorded music companies currently produce original music scores and
advertising themes for television, radio and film, produces music videos and
music video specials for television, or provides music artist management.

Currently, most independent music companies specialize in only one aspect of
the music industry (such as niche-oriented record labels, jingles, video
production, artist management, concert promotion and genre-oriented publishing
or distribution). In response to the consolidation in the recorded music
industry, independent music companies are now increasingly recognizing the need
to adopt new strategies and form strategic alliances in order to stay
competitive.

CURRENT BUSINESS

COMMERCIAL MUSIC

22
<PAGE>
music, hiring musicians, recording music in its digital writing rooms and
recording studios and submitting final, ready to use, compositions. Rave has
composed and produced more than 2,000 commercial scores and has received various
awards, including awards from the American Society of Composers, Authors and
Publishers ("ASCAP").

The Company is one of a number of small music production companies who
specialize in the creation of music scores and advertising themes for
television, radio and film. While there are several companies who produce more
of such music than the Company, such as Crushing Enterprises, Elias Associates,
JSM Music Inc. and tomandandy, the Company believes that it is one of the larger
producers of such music in New York, where a majority of such music is produced.
The Company typically works with advertising agencies to help create the
music soundtracks for commercials. Once the Company has been solicited for its
services it reviews the information provided by its client and produces a rough
version of the proposed production ("demo"). The fees for producing a "demo"
range from $750 to $2,000. The experience of the Company is that it is hired to
produce finished soundtracks based on the demo less than 15% of the time.
The Company utilizes the services of musicians, singers and engineers who
are independent contractors to work with the composer to produce the final
soundtrack in the Company's recording studios. The fee for a final soundtrack
ranges from $5,000 to $15,000. Creative/arranging fees and the fees of the
musicians, singers, engineers and studio expenses are paid by the client. The
Company retains its intellectual property rights in its musical compositions.
Royalty and residual distributions are paid by Broadcast Music, Inc. ("BMI") or
ASCAP to the Company, the composer and the performers for the various uses of
the actual compositions. These residual fees can exceed the creative fees. The
Company currently owns or has the free use of one 24 track analog recording
studio and five digital midi recording studios.
Rave has produced over 2,000 commercials to date, and usually completes an
additional 3 or 4 per week. Rave has received music awards for its work,
including awards from ASCAP. See "Management-- Directors, Executive Officers and
Key Personnel of the Company."
The Company's commercial music business benefits from the availability of
resources of the Company's other businesses. Through its relationships with
various music artists, the music artist management business has provided the
commercial music business with either well-known artists or artists whose style
or sound would be ideal for a particular commercial soundtrack. There can be no
assurance that such efficiencies will be achieved.

VIDEO PRODUCTION

The Company's music video and television music special production business
is conducted through Picture Vision, which was founded in 1984 by Jon Small, an
Executive Vice President of the Company. The Company produces music videos used
to promote music artists as well as music specials for programs for television
networks and other video broadcasters. In connection with this business the
Company, utilizing both in-house capabilities and independent contractors,
directs, produces, story-writes, art directs, scout locations, produces special
effects, edits, contracts, and manages the production. Picture Vision has
produced numerous music videos and television music, video specials for many
well known artists and has won MONITOR and ACE awards. For work he directed for
Picture Vision, Mr. Small was awarded the "1995 Music Video Director Of The
Year" by the Country Music Association.

Once the Company is solicited by a music company and asked to do a music
video, it will receive a copy of the recording and develop a concept for the
video, which is referred to as the "treatment" or the "script." If the concept
is approved, the Company will submit a budget proposal to its client. If the
budget is approved, the production process is commenced. The Company has a very
limited time from concept to budget approval, and therefore, must be very
accurate in its budgeting. The Company gets paid the lump

23
<PAGE>
sum budget amount and retains as profit all amounts not used for production
costs and expenses. The profit for any given job will increase if it is directed
and produced by one of the Company's in-house directors or producers. This is
not always possible as a client may wish to use their own director or producer
or the Company may be producing more jobs than its in-house personnel can
accommodate. The Company does not retain any of the intellectual property rights
in its videos.

Once production begins, the Company hires the crew, which includes, the
actors, the lighting designer, the art director, the wardrobe person and the
hair and make-up artist. The Company also finds the locations for the videos,
rents the appropriate equipment for the production, builds the required sets,
obtains adequate insurance, arranges for meals and produces a shooting schedule.
The video is typically shot in one to five days and a rough copy is then sent to
the appropriate individuals for review. If any editorial changes are requested,
such changes are made and then the final high quality video is delivered. This
entire process typically takes between one and three weeks.

The Company also produces music video television specials, and has also
produced television commercials, the production of which is similar in many ways
to music video production. Following the Offering, the Company will explore the
possibility of expanding its television commercial production operations.

Picture Vision has produced numerous music videos and television music video
specials for many well known artists. The Company has won MONITOR and ACE
awards. For work he directed for Picture Vision, Mr. Small was awarded the "1995
Music Video Director Of The Year" by the Country Music Association. See
"Management--Directors, Executive Officers and Key Personnel of the Company."

The Company's video production business derives benefits from the Company's
other businesses. Producing television commercials involves similar resources
and skills to producing music videos. Through its relationships with various
people in the advertising industry, the commercial music business can create
opportunities in commercials for the video production component of the Company.
There can be no assurance that such efficiencies can be achieved.

MUSIC ARTIST MANAGEMENT

The Company's music artist management services are provided by All Access,
which was founded in 1994 by Brian Doyle and Richard Flynn, each an Executive
Vice President of the Company. In the music industry, artist management means
working with an artist in every facet of his or her career. For developing
artists, the Company provides assistance in the following ways: building a
support team for the artist (including an attorney, an account/business manager
and booking agent); securing appropriate recording and publishing contracts;
promoting sales of records; and developing touring opportunities. For
established artists, the Company provides strategic planning to help maintain
and advance the artists career in areas including touring, recording and record
sales; publishing and ancillary uses of the artists music (such as motion
picture sound tracks). The Company specializes in developing and implementing
strategic plans for its artists that include personalized marketing and
promotion strategies with continuous monitoring and follow through to hopefully
ensure the success of each phase of the plan. Additionally, the Company acts as
a liaison between its clients and all of their other advisors and also offers a
full range of administrative support with respect to every aspect of its clients
careers.

The Company has a variety of sources for new artists. The Company receives
many referrals from within the industry due to its reputation in the music
artist management business. Recorded music companies prefer to work with "known
entities" and will recommend management companies to newly acquired artists who
are unrepresented. Music industry attorneys, who often work with unsigned
artists in the expectation that they may eventually get signed and have a
career, are also a source of referrals. Likewise business managers, accountants,
producers and occasionally publishing companies serve as sources of referrals.
In addition, the Company's representatives spend a good deal of time in small
clubs and local music venues listening to new music and following up industry
leads. The Company receives

24
<PAGE>
approximately five to ten "demo" tapes a month through referrals and directly
from artists in search of management. Various members of the staff will listen
to these tapes weeding out the "better" talent. Only when the Company identifies
what it believes to be an exciting prospect will the Company consider pursuing
that artist. The Company generally will hear an artist four or five times in
live performances before deciding to sign such artist. The Company's philosophy
is to develop a relationship with artists before actually signing them. This
relationship building process can take up to six months before it is mutually
agreed that the artist is ready for management. The artist must demonstrate a
willingness to listen to management, to take advice and direction, and to pursue
his or her career diligently.

The leading commercially successful artists typically have an exclusive
arrangement with a management company. A few management companies have under
contract a large number of artists (more than 10). The majority of management
companies have a relatively small number of artists under contract (less than
10). The balance of the industry consists of a number of very small shops that
principally represent a number of unsigned artists. To maximize client service
and minimize overhead, it is the intention of the Company to maintain a roster
of eight to ten artists (with three or four established artists and four or five
developing artists). In addition, as the Company builds relationships with new
artists, the Company may be working with up to six additional unsigned artists
that are not generating income.

The Company currently manages the careers of seven music artists and/or
music groups. For providing its services, the Company is paid commissions
typically ranging from 15% to 20% of the entertainment related gross earnings
(less certain minimal standard industry costs) of its clients. The Company's
policy, in accordance with industry practice, is to pay up to 5% of commissions
received to certain employees who either identify, develop and/or manage such
artists. With respect to music artist management, the Company's most well known
artists are Carly Simon and Daryl Hall & John Oates, who, collectively,
generated approximately 96% and 99% of the Company's music artist management
revenue in 1996 and 1995, respectively. In accordance with industry practice,
the Company typically does not enter into written management contracts with the
artists it represents.

The Company's music artist management business derives benefits from the
Company's other businesses. Existing clients of the Company's music artist
management business may find the television commercial opportunities provided by
the Company's commercial music division to be attractive. Additionally, with
music videos becoming such an important promotional tool for artists, being able
to provide music video production services gives the music artist management
business an advantage in soliciting potential clients. There can be no assurance
that such efficencies will be achieved.

DEVELOPMENT OF RECORDED MUSIC BUSINESS

GENERAL

The Company will enter into the recorded music business by establishing one
independent record label under a soon-to-be formed subsidiary, PRM. It is
anticipated that this record label will be a contemporary label featuring
alternative and adult contemporary artists. The Company will seek to sign
artists believed to have commercial appeal, but who will not require substantial
advances or special production facilities. Typically these artists will be
commercially unknown recording artists. The Company will also seek to hire
established producers who are attracted to the potentially greater independence
and flexibility which it is believed can be offered by an independent music
company. PRM will be under the direction of Brian Doyle and Richard Flynn and
will, to the extent practicable, utilize the in-house recording studios and
video production facilities of the Company. Until it can support a higher level
of overhead, PRM will, to the extent practicable, use the existing resources of
the Company, particularly those employed in its artist management services
business.

According to Billboard the alternative and adult contemporary segments of
the music industry represents greater than 50% of recorded music sold in the
United States. According to a March, 1995 study by the Recording Industry
Association of America, a trade group whose members manufacture most

25
<PAGE>
of the music recordings produced a the United States, the demographic profile of
consumers under the age of 30 accounted for approximately 53% of music purchases
in 1994 versus approximately 57% in 1990. Consumers over the age of 45 comprised
approximately 16% of the market in 1994 compared with approximately 12% in 1990.
The Company has chosen to position its record label as a contemporary label
featuring alternative and adult contemporary artists because it believes that
these trends will continue and that this format will expand as people over 30
years old continue to purchase music and constitute a growing percentage of
music purchasers.

Following the Offering, the Company will explore the establishment or
acquisition of additional record labels and may also seek to enter other areas
of the recorded music business depending on the opportunities present in such
areas. Currently, the Company has no agreements or plans with respect to such
additional labels and has no agreements or plans to enter into any such other
areas of the recorded music business. There can be no assurance that the Company
will establish any record labels other than its initial label or will ever enter
into any other area of the recorded music business.

PRODUCTION

Record production includes the writing, rehearsing, recording, and
mixing/mastering of musical works. According to Billboard, average production
costs per album for a release by a major music company (not including a video)
is approximately $250,000. Cost variance depends upon the type of music, and its
intended audience. The major music companies have spent between $500,000 and
$1,000,000 to record a rock album for an established artist. Music videos, which
are considered essential for promoting new pop-music releases, average from
between $75,000 to $350,000 to produce and can cost more than $1,000,000 for
releases by established artists.

Average music production costs for the Company's releases will be budgeted
below the industry average. The Company believes that part of the budget savings
will come from the use, to the extent possible, of its integrated facilities and
services by its artists as well as from the willingness of its artists to forgo
the substantial advances and other benefits paid to the top recording artists by
the major music companies. It is also important to note that most independent
music companies do not have the facilities and services which the Company
currently owns and can provide. Consequently, the Company believes that it will
experience a cost advantage over other small independent music companies. The
Company will also try to keep production costs low by utilizing producers and
musicians with whom the Company has a relationship.

The Company's average accompanying video production costs (when applicable)
will be budgeted below the industry average for a high quality video. This will
be possible because, to the extent practicable, videos will be produced by the
Company's video production division.

As an artist gains recognition, it is common practice to allocate larger
production budgets to their subsequent releases. The Company will follow this
strategy on a selective basis.

MANUFACTURING AND DISTRIBUTION

The Company currently has no manufacturing capability. Following the
Offering, the Company anticipates that it will be able to enter into agreements
with other companies to provide for the manufacturing of the Company's products.
There can, however, be no assurance that such an agreement will be reached or,
if reached, that the terms will be advantageous to the Company.

Historically, the strategy of the major music companies has been to control
distribution channels. Nevertheless, the market shares of independent
distributors, rack jobbers (independent contractors that manage music
departments of department stores such as K-Mart and Wal-Mart), mail order
companies, touch-tone 800 number sales, internet sales, and television sales
have all increased, and this growth, fueled by ongoing changes in the
marketplace, is expected by the Company to continue. Another trend is the

26
<PAGE>
consolidation of retail outlets into large retail chains. Of approximately 5,000
record stores nationwide, nearly 90% are affiliated with a retail chain, thus
making it easier to place products in more stores while dealing with fewer
people. The Company also expects that interactive, in-home marketing through the
internet, telephone, satellite relays, or other evolving technologies will have
a significant effect on distribution in the future. However, there is little
agreement as to precisely what this effect will be. The Company believes that
control and ownership of the creative products will be a key factor in the new
market where distribution can be accomplished more quickly and inexpensively.

Typical distribution for an independent recorded music company is through
either a major recorded music company-owned branch system or through independent
distributors. The major recorded music company-owned companies offer national
distribution, consistent market visibility, accounts receivable and collection
administration. Independent distributors offer similar services, but normally on
a much smaller scale.

Currently, the Company has no distribution agreements. Following the
Offering, the Company will commence negotiations for distribution. There can,
however, be no assurance that such an agreement will be reached or, if reached,
that the terms will be advantageous to the Company.

The Company may in the future enter into agreements with one or more foreign
distributors for distribution of its albums outside of the United States. Such
agreements will not be entered into unless the Company believes that one or more
of its albums can be sold profitably in foreign markets or that such
distribution strategically positions the Company for future sales. The Company
has no present plans with respect to foreign sales and there is no assurance
that the Company will develop or pursue any such plans in the future.

PROMOTION

The traditional and most effective means of promoting recorded music is by
radio air play. Obtaining radio air play for a new release is an extremely
competitive process. The trend by radio stations to focus more on particular
music formats has made it easier for independent producers to target those
stations most likely to air a specific recording. Independent regional promoters
are often hired to gain air play and, in certain markets, they are quite
effective in gaining air play for a release. Public and college radio stations
are useful venues for lesser known artists. Music videos have become a vital
means of promoting artists and records.

Songs that are aired on a major radio station are chosen by the program
director, often in conjunction with a format consultant. Once a recording is
aired, the amount of repeat play it receives depends upon listener requests and
feedback, as well as actual sales data. Since listener response and sales depend
in large measure on how often a release is aired, building a commercial hit
depends on an ongoing cycle of air play and sales. Nurturing this cycle requires
constant marketing attention and careful coordination with advertising, concert
schedules and other promotional activities. Other promotional tools include
print advertising, retail promotions and concert tours. Additionally, getting
music video airplay on MTV or VH-1, or other video stations or programs, or on
their niche oriented programs, is also essential to the success of a recording
music artist and their records.

The key to finding an audience for new artists is to properly coordinate all
these promotional activities to maximize awareness and exposure. The Company
will, where possible, use its in-house expertise to direct or assist with the
promotional activities with respect to its artists. By coordinating or providing
assistance with these activities, to the extent practicable, in-house, costs
will be further kept under control. Following the Offering, the Company will
hire additional promotional personnel.

27
<PAGE>
RELATIONSHIP WITH ARTISTS

Following the Offering, the Company's plan is to develop new or emerging
music artists and will, to the extent practicable, also try to sign established
artists. The Company intends to recruit new and emerging artists and to enter
into exclusive, long-term recording contracts (expected to cover an initial
album, with options to record four to seven additional albums, at the Company's
discretion). The Company will concentrate its resources on a small number of
artists, developing a tailored marketing and promotion plan for each, and
implementing a marketing plan for each artist's new release (detailing timing,
media utilization, and follow-up promotions to be employed after each event).
There can be no assurance that the Company will be able to attract new and
emerging music talent or established artists, or, if the Company is able to
attract such talent, that the Company will be able to develop that talent
successfully or in such a manner so as to produce significant sales.

If the Company develops commercially successful music artists, there can be
no assurance that the Company will be able to maintain its relationships with
such artists even if it has entered into exclusive recording contracts with
them. Furthermore, performing artists occasionally request releases from their
exclusive recording agreements. Among the reasons that may cause an artist to
engage in so-called "label jumping" are expectations of greater income, advances
or promotional support by a competing label. There can be no assurance that any
given artist developed by the Company will not determine to request a release
from his or her agreement with the Company. Because of the highly personal and
creative nature of the artist's contractual obligations to the Company, it is
not feasible to force an unwilling artist to perform the terms of his or her
contract with the Company. If the Company does release a "label jumping" artist
from his or her contract, it may be able to obtain an "override royalty" as
consideration for the release. Override royalties are customarily paid by the
released artist's new recording company and are based on a percentage of the
suggested retail selling price or wholesale price (depending on the particular
label in question), subject to certain deductions. Such royalties are payable
with respect to a negotiated number of the artist's albums after release from
his or her existing contract.

The Company will seek to contract with its artists on an exclusive basis for
the marketing of their recordings in return for a percentage royalty on the
retail selling price of the recording. The Company will generally seek to obtain
rights on a worldwide basis. A typical contract for an artist may provide for a
number of albums to be delivered,with advances against royalties being paid upon
delivery of each album, although advances are often made prior to recording. The
Company will generally have an option to take each album that the artist is
contracted to deliver, exercisable within an agreed period of time, usually a
few months following delivery of the previous album. Normally, if an option is
not exercised, the artist has no obligation to deliver additional albums.
Provisions in contracts with established artists vary considerably and may, for
example, require the Company to release a fixed number of albums and/or contain
an option exercisable by the Company covering more than one album. The Company
will seek to obtain rights to exploit product delivered by the artists for the
life of the product's copyright. Under the contracts, advances are normally
recoupable against royalties payable to the artist. The Company will seek to
recoup a portion of certain marketing and tour support costs, if any, against
artist royalties.

Contracts either provide for the artists to deliver completed recordings or
for the Company to undertake the recording with the artist. If the recording
costs are advanced by the Company, they are added to the advances paid to the
artist and recouped against royalties payable to the artist. The Company's staff
is involved in selecting producers, recording studios, any additional musicians
needed and songs to be recorded, as well as supervising the output of recording
sessions, although for experienced artists, such involvement may be less. The
Company will produce music videos of single songs for promotional purposes
(clips) and longer music programs (for example, concert programs). Income from
music videos is derived from the sale of videocassettes and from the publishing
of music included in such videos. It is unlikely that the Company will provide
artist management services to an artist with whom it has entered into a
recording agreement.

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ACQUISITION PROGRAM

The Company's acquisition program will concentrate on small complementary
music driven businesses in the music and entertainment industry. The Company
believes that it can implement its acquisition strategy based on the following:

SIZE. Initially, the Company will focus on transactions of up to $5
million in cost. The Company believes that there are acquisition
opportunities in this price range and that targets of this size often get
overlooked because smaller music companies generally do not have sufficient
capital or the requisite expertise to engage in such transactions while
larger companies typically focus on larger transactions. If the assets of
the Company increase, it may review acquisitions in excess of $5 million.
However, the significant portion of its acquisitions are still expected to
be $5 million or below.

TYPE. The Company will focus its acquisition activities on small
complementary music driven businesses such as independent record labels and
small independent companies in the music and entertainment industry which
operate in, among other areas, the areas of video production, commercial
music, music artist management, marketing, publishing, and music oriented
television production. The Company will focus on what the Company believes
are established companies with a financial performance history.

EFFICIENCY. Targeting acquisitions in areas as to which the Company's
existing management has expertise will allow the Company to attempt to
achieve efficiencies by hopefully permitting the Company to merge much of
the overhead of acquired companies into the Company's existing
infrastructure, thereby hopefully reducing costs.

MOMENTUM. The Company will focus on acquiring companies which are
complementary to the Company's current businesses and which can hopefully be
integrated into the Company's current operations. This will hopefully enable
the Company to strengthen its current businesses while expanding into new
areas of the music industry. If the Company continues to strengthen its core
businesses and expand into other aspects of the music industry, the Company
believes it will become easier for the Company to acquire the pieces which
it needs to hopefully develop and grow according to its strategy.

CONSIDERATION. The Company intends to pursue its acquisition program by
acquiring companies with Common Stock, cash, debt instruments or a
combination thereof.

COMPLEXITY. Due to the complexity involved in acquiring and integrating
additional entities and their assets, many smaller entities with whom the
Company competes do not have the expertise or desire to compete for such
acquisitions.

There can be no assurance that the acquisition program will be successful,
that companies acquired by the Company will be profitable or that the Company
will grow into a profitable mid-sized independent music and entertainment
company. See "Risk Factors."

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COPYRIGHTS

The Company's intended recorded music business, like that of other companies
involved in recorded music, will primarily rest on ownership or control and
exploitation of musical works and sound recordings. The Company's music
products, including its commercial music, are and will be protected under
applicable domestic and international copyright laws.

Although circumstances vary from case to case, rights and royalties relating
to a particular recording typically operate as follows: When a recording is
made, copyright in that recording vests either in the recording artist (and is
licensed to the recording company) or in the record company itself, depending on
the terms of the agreement between them. Similarly, when a musical composition
is written, copyright in the composition vests either in the writer (and is
licensed to a music publishing company) or in a publishing company. A public
performance of a record will result in money being paid to the writer and
publisher. The rights to reproduce songs on soundcarriers are obtained by record
companies or publishers from the writer. The manufacture and sale of a
soundcarrier results in mechanical royalties being payable by the record company
to the performer at industry agreed or statutory rates for the use of the
composition and by the record company to the recording artists for the use of
the recording. The Company operates in an industry in which revenues are
adversely affected by the unauthorized reproduction of recordings for commercial
sale, commonly referred to as "piracy," and by home taping for personal use.

Potential publishing revenues may be derived from the Company's ownership
interest in musical compositions, written in whole or in part by the Company's
recording artists. Management anticipates securing a partial ownership position
in the copyright to compositions written by its recording artists, where such
rights are available and have not been previously sold or assigned. Generally,
revenues from publishing are generated in the form of: (1) mechanical royalties,
paid by the record company to the publisher for the mechanical duplication of
the copyright to a particular composition (as distinct from the copying of the
artist's performance of that composition); (2) performance royalties, collected
and paid by performing rights entities such as ASCAP and BMI for the actual
public performance of the composition as represented by radio airplay, Musak, or
as a theme or jingle broadcast in synchronization with a visual image via
television; (3) sub-publishing revenues derived from copyright earnings in
foreign territories, and publishers in those territories acting as designated
collection agents for the Company; and (4) licensing fees derived from printed
sheet music, uses in synchronization with images as in video or film scores,
computer games and other software applications, and any other use involving the
composition.

COMPETITION

Following the Offering, the Company intends to establish an independent
record label. With respect to this and future record labels, the Company will
face intense competition for discretionary consumer spending from numerous other
record companies and other forms of entertainment offered by film companies,
video companies and others. The Company will compete directly with other
recorded music companies, including the six major recorded music companies,
which distribute contemporary music, as well as with other record companies for
signing artists and acquiring music catalogs. Many of these competitors have
significantly longer operating histories, greater financial resources and larger
music catalogs than the Company. The Company's ability to compete successfully
in the recorded music business

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will be largely dependent upon its ability to sign and retain successful artists
and to introduce music products which are accepted by consumers.

EMPLOYEES/INDEPENDENT CONTRACTORS

As of October 1, 1996, the Company had 25 employees/independent contractors,
of whom 17 were located at the Company's New York offices and 8 were located in
Nashville, Tennessee.

None of the Company's employees is represented by a labor union. The Company
has not experienced any work stoppage and considers relations with its employees
to be good.

FACILITIES

The Company leases office space at three locations. Its headquarters and
commercial music recording studios are located in New York City, where it
sub-leases approximately 9,000 square feet at an annual rate of $50,000,
pursuant to a sub-lease that will expire in May 1997. The Company's artist
management business leases space in New York City at an annual rate of $40,273
until October 31, 1996 and $41,481 thereafter pursuant to a lease that will
expire in February 1997. The Company's music video production business leases
2,050 square feet of office space in Nashville, Tennessee, at an annual rate of
$17,000 pursuant to a lease expiring in August 2000. The Company believes that
its facilities are in good condition and adequate for its current operations. In
the future, the Company will consider integration of its New York facilities.

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MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY PERSONNEL OF THE COMPANY

The Company's directors and executive officers are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- --------------------------------------- --- ------------------------------------------------------------------
<S> <C> <C>
John Loeffler.......................... 45 President, Chief Executive Officer and Chairman of the Board
Jon Small.............................. 49 Executive Vice President and Director
Brian Doyle............................ 40 Executive Vice President and Director
Richard Flynn.......................... 39 Executive Vice President, Secretary and Director
Robert Klein........................... 43 Treasurer and Director
Paul Thomas Cohen...................... 44 Director
Thomas J. Edelman...................... 45 Director
</TABLE>

MR. JOHN LOEFFLER is a co-founder of the Company and has been President,
Chief Executive Officer and Chairman of the Board of Directors since the
Company's inception in 1996. Since 1995, Mr. Loeffler has been the Chief
Executive Officer of Rave. From 1994 to 1995, Mr. Loeffler had been the
President of Rave and from 1994 to October 1996, Mr. Loeffler had been the sole
stockholder of Rave. Rave's roster of staff composers and producers regularly
produced four to five commercial soundtracks per week. Rave's clients include:
Domino's Pizza, Downey Fabric Softner, Hertz and Coca Cola. Mr. Loeffler was
awarded by ASCAP as one of television's "Most Performed" composers in 1988 and
1989 for his title themes of the television shows "Kate & Allie," "Another
World," and NBC's "Friday Nite Videos." He also composed the theme for Channel 4
NBC Evening News, and recently completed the themes for the new syndicated TV
show, "WMAC Masters", ESPN's "Survival of the Fittest", Robin Leach's "Home
Videos of the Stars", the New York Marathon and ESPN's "US Open", as well as two
NBC Summer Olympic '96 Specials. From 1986 to 1994, Mr. Loeffler composed and
produced music for John Leffler Music, an independently owned music production
company, and prior to that, Mr. Loeffler was a composer and producer at Sherman
and Kahan, a commercial music production company in New York City. Since 1979,
he has also been a consulting music director to Grey Advertising. Mr. Loeffler
graduated from Williams College, Cum Laude, in 1973.

MR. JON SMALL has been an Executive Vice President, and a director of the
Company since its inception in 1996. Since September 1996, Mr. Small has been
the Chief Executive Officer of Picture Vision. From 1984 to September 1996, Mr.
Small had been President and the sole stockholder of Picture Vision. Picture
Vision has produced, executively-produced and or directed over 300 video musical
productions of such performers as Whitney Houston, Madonna, Anita Baker, Ray
Charles, Van Morrison, Rod Stewart, Reba McEntire, Billy Joel, Garth Brooks and
Sting. Previously, as a musician/performer, Mr Small toured, or recorded with
The Kinks, The Doobie Brothers, and Billy Joel. While at Picture Vision, Mr.
Small produced and or directed specials for Disney and HBO and has received
several Grammy nominations. While at Picture Vision, Mr. Small also produced and
directed specials and long form programs including NBC's 1994 Thanksgiving
Special "Reba! Live in Concert", the Disney special "Billy Joel Live at Yankee
Stadium", Julio Iglesias's "Non Stop Far East Tour", Van Morrison's "The
Concert", Billy Joel's "Live from Long Island", Anita Baker's "One Night of
Rapture", Hall & Oates' "Live from the Apollo Theater", The Beach Boy's "Live at
Wembley Stadium", and "In Washington D.C.", Diana Ross's "In Central Park",
Donald Fagen's "New York Rock and Soul Revue", and several shows for the ABC
Network's series "Live in Concert". While at Picture Vision, Mr. Small has won
Ace and Monitor awards for Best television Music Specials and has received two
Grammy nominations for his work with Billy Joel. He received Country Music
awards for Best Video of the Year, awards for Cable Excellence (ACE), and
Monitor Awards. He has been awarded Gold Medals by the International Film & TV
Festival. In addition, the Academy of

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Country Music set a precedent by choosing two of Mr. Small's videos out of the
final five in the "Videos of the Year" category.

MR. BRIAN DOYLE has been an Executive Vice President and a director of the
Company since the Company's inception in 1996. Since September 1996, Mr. Doyle
has been the Chief Executive Officer of All Access. He founded All Access in
late 1994 and until September 1996 had been the President and co-owner of All
Access. He currently manages Daryl Hall and John Oates, Carly Simon, and others.
From 1991 to 1994 Mr. Doyle served as CEO/President of Horizon Entertainment and
Management Group, Inc. ("Horizon"). Horizon's clients included Mariah Carey,
John Mellencamp, and Daryl Hall & John Oates. His responsibilities included
managing the overall achievement of the company's strategic objectives,
development and control of the client roster, coordinating worldwide marketing
efforts for clients, serving as artists liaison to MTV, VH-1 and other media
outlets, and interfacing on behalf of clients with record companies and
professional services consultants. In addition, he provided specialized personal
management services for clients including career planning and development, music
development, and song acquisition. Mr. Doyle has also produced HBO and Lifetime
television specials.

MR. RICHARD FLYNN has been an Executive Vice President and Secretary of the
Company since its inception, and has been a director since October 9, 1996.
Since September 1996 Mr. Flynn has been President of All Access. From September
1994 to September 1996, Mr. Flynn has been the Managing Partner and co-owner of
All Access. From March 1990 until September 1994. Mr. Flynn served as General
Counsel to Horizon. He provided legal services to Horizon and its clients Mariah
Carey, John Mellencamp, Daryl Hall & John Oates, and other artists. In addition,
Mr. Flynn assisted in all aspects of artist management for Horizon's clients.
Since 1983, Mr. Flynn has been a practicing attorney in New York State
specializing in entertainment, corporate and public sector law. Since 1989, he
has provided legal representation, financial management, and consulting services
to artists and entertainers, including negotiating recording, publishing,
production, performance and endorsement contracts.

MR. ROBERT KLEIN is a co-founder of the Company and is an Executive Vice
President and Treasurer of the Company, and has been a director of the Company
since its inception. From 1992 to 1996 Mr. Klein was an independent financial
consultant. Prior to that time, from 1990 and 1992 Mr. Klein was a Senior Vice
President of Corporate Finance at Laidlaw Holdings, Inc. From 1986 to 1990 Mr.
Klein worked at D.H. Blair & Company, Inc. Prior to 1986 Mr. Klein worked for
various companies including Shearson Lehman Brothers. Mr. Klein will oversee the
Company's future strategic development and acquisitions.

MR. PAUL THOMAS COHEN has been a director of the Company since October 9,
1996. Prior to that time, since 1987, Mr. Cohen has been an investment banker
and a consultant to the media and entertainment industries. As an advisor to
such clients as Time-Life, Time Inc., The New York Times, NBC, and Rolling Stone
Magazine, he has been involved in licensing, alliances and other strategic
initiatives involving new media activities in both the on-line services and
CD-ROM arenas. From 1984 to 1987, Mr. Cohen served as Co-Executive Officer of
Herzfeld & Stern, a mid-size brokerage firm. Mr. Cohen graduated from Williams
College in 1974 and received an MBA from Columbia University in 1976.

MR. THOMAS J. EDELMAN has been a director of the Company since October 9,
1996. Since 1981, Mr. Edelman has been a director and President of Snyder Oil
Corporation. In 1996, Mr. Edelman was appointed Chairman and Chief Executive
Officer of Patina Oil and Gas Corporation, and affiliate of Snyder Oil
Corporation. He is also chairman and chairman of the board of Lomak Petroleum,
Inc. From 1980 to 1981, Mr. Edelman was a Vice President of The First Boston
Corporation. From 1975 through 1980, Mr. Edelman was with Lehman Brothers Kuhn
Loeb Incorporated. Mr. Edelman received his Bachelor of Arts Degree from
Princeton University and his Masters Degree in finance from Harvard University's
Graduate School of Business Administration. Mr. Edelman is also a director of
Petroleum Heat & Power Co., Inc., a Connecticut-based fuel oil distributor, Star
Gas Corporation, a private company which distributes propane gas and Command
Petroleum Limited, an international exploration and production company
affiliated with Snyder Oil Corporation.

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The Executive Advisory Committee, consisting of Brian Doyle, Richard Flynn,
John Loeffler, Jon Small and Robert Klein, advises the Board of Directors on
important matters affecting the Company.

The Compensation and Stock Option Committee, consisting of Paul Thomas Cohen
and Thomas Edelman makes recommendations to the Board of Directors concerning
compensation, including incentive arrangements, of the Company's officers and
key employees and others and administers the Option Plan and determines the
officers, key employees and others to be granted options under the Option Plan
and the number of shares subject to such options.

The Audit Committee, consisting of Paul Thomas Cohen and Thomas Edelman
reviews the engagement of the Company's independent accountants and the
independence of the accounting firm, the audit and non-audit fees of the
independent accountants and the adequacy of the Option Plan and the Company's
internal control procedures.

All directors of the Company are elected by the stockholders, or in the case
of a vacancy, by the directors then in office, to hold office until the next
annual meeting of stockholders of the Company and until their successors are
elected and qualified or until their earlier resignation or removal.

All officers of the Company serve at the discretion of the Board of
Directors. There are no family relationships between any director, executive
officer or person nominated or chosen to become a director or officer and any
other such persons.

The Company also employs the following key employees and/or advisors:

ROBERT FEAD, Corporate Development Advisor. From 1992 to the present Mr.
Fead has been the President of Burt Bachrach Music Group. From 1987 to 1992 Mr.
Fead was President and Chief Executive Officer of Paramounts Famous Music. From
1985 to 1987 Mr. Fead was President of Alpha Records and from 1984 to 1985 was
President of RCA Records. From 1968 to 1984 Mr. Fead was Director of Marketing
of A&M Records. Mr. Fead will assist in the Company's acquisition activities,
corporate development and label negotiations.

JOHN SIEGLER, President of Rave. Since 1995 Mr. Siegler has been President
of Rave. From 1989 to 1995 Mr. Siegler was a senior producer/composer for Rave.
Mr. Siegler has been a recipient of a number of gold and platinum record awards.
Mr. Siegler is a producer, composer, and performer who has worked, independent
of Rave, with: Bette Midler, Mick Jagger, Jeff Beck, Stevie Nicks, Roger Daltry,
Daryl Hall and John Oates, Meatloaf, Edgar Winter, Richie Havens, Herbie Mann,
Cher, Todd Rundgren, and others. Mr. Siegler has recorded over 100 albums as a
featured musician and musical collaborator.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

The Company has included in its Certificate of Incorporation provisions to
indemnify its directors and officers to the extent permitted by Delaware law.
The Company's Certificate of Incorporation also includes provisions to eliminate
the personal liability of its directors and officers to the Company and its
stockholders to the fullest extent permitted by Delaware law. Under current law,
such exculpation would extend to an officer's or director's breaches of
fiduciary duty, except for (i) breaches of such person's duty of loyalty, (ii)
those instances where such person is found not to have acted in good faith,
(iii) those instances where such person received an improper personal benefit as
the result of such breach and (iv) acts in violation of Section 174 of the
Delaware General Corporation Law.

The Company's By-Laws provide that the Company will indemnify its directors,
officers and employees against judgments, fines, amounts paid in settlement and
reasonable expenses.

The Company will enter into an Indemnification Agreement ("Indemnification
Agreement") with each of its directors and officers. Each Indemnification
Agreement will provide that the Company will indemnify the indemnitee against
expenses, including reasonable attorneys' fees, judgments, penalties, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with any

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<PAGE>
civil or criminal action or administrative proceeding arising out of his or her
performance of his or her duties as a director or officer, other than an action
instituted by the director or officer. Each Indemnification Agreement will
permit the director or officer that is party thereto to bring suit to seek
recovery of amounts due under such Indemnification Agreement and will require
that the Company indemnify the director or other party thereto in all cases to
the fullest extent permitted by applicable law.

It is the position of the Commission that insofar as the foregoing
provisions may be invoked to disclaim liability for damages arising under the
Securities Act, that provision is against public policy as expressed in the
Securities Act and is therefore unenforceable.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following summary compensation table sets forth the aggregate
compensation paid or accrued by the Company for the fiscal years ended June 30,
1996, 1995 and 1994 to John Loeffler, the Company's Chief Executive Officer and
to Brian Doyle, Richard Flynn and Jon Small, each an Executive Vice President of
the Company. No other executive officer received annual compensation in excess
of $100,000 for the fiscal years ended June 30, 1996, 1995 and 1994.

<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
---------------------------------------
<S> <C> <C> <C>
ANNUAL ALL OTHER
NAME AND PRINCIPAL CAPACITIES IN WHICH SERVED YEAR SALARY COMPENSATION(2)
- ---------------------------------------------------------------------------- --------- ---------- ----------------
John Loeffler............................................................... 1996 $ 218,000 $ 71,000
Chief Executive Officer 1995 170,000 77,000
1994 134,000 70,000
Brian Doyle................................................................. 1996 $ 101,000 $ 48,000
Executive Vice President 1995 0 35,000
Richard Flynn............................................................... 1996 $ 101,000 $ 48,000
Executive Vice President 1995 0 35,000
Jon Small................................................................... 1996 $ 88,000 $ 89,000
Executive Vice President 1995 184,000 172,000
1994 113,000 103,000
</TABLE>

- ------------------------

(1) The Company was incorporated in July 1996. Compensation for prior periods
represents amounts paid by Rave, Picture Vision and All Access to their
respective employees. All Access commenced operations in September 1995. See
"Business--Executive Compensation--Employee Agreements."

(2) Includes amounts paid by the Company for the benefit of such executive,
including amounts paid for lodging, transportation, insurance, entertainment
and other perquisites.

As of the date of this Prospectus, the Company has not granted any stock
options.

The Company plans to obtain key-person life insurance coverage in the face
amount of $500,000 for each of Messrs. Loeffler, Small, Doyle and Flynn naming
the Company as beneficiary under such policies.

COMPENSATION OF DIRECTORS

Directors who are not employees or officers of the Company or associated
with the Company will receive $500 for each Board of Directors and committee
meeting attended. In addition all directors may be reimbursed for certain
expenses in connection with attendance at Board of Directors and committee
meetings. Other than with respect to reimbursement of expenses, Directors who
are employees or officers of the Company or who are associated with the Company
will not receive additional compensation for service as a director.

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<PAGE>
EMPLOYMENT AGREEMENTS

In October 1996, the Company entered into the Employment Agreements with
each of John Loeffler, Brian Doyle, Jon Small and Richard Flynn (the
"Executives"). Each of the Employment Agreements becomes effective upon the
closing of the Offering and is for a term of three years. Each of the Executives
is required to devote substantially all of his business efforts to the affairs
of the Company although specific, pre-existing limited non-competitive
activities are permitted. Pursuant to the Employment Agreements, John Loeffler,
who serves as the Company's President, Chief Executive Officer and Chairman of
the Board of Directors, and Messrs. Small, Doyle and Flynn, who each serve as
Executive Vice Presidents of the Company, each earn a base salary of $150,000.
Pursuant to the Employment Agreements several bonus plans have been established
for the benefit of the Executives. Bonuses will be granted on a subsidiary basis
to the extent that certain pre-determined earnings are realized by each such
subsidiary. The maximum annual bonus that can be earned on a subsidiary basis is
$225,000 for each of Messrs. Loeffler, Doyle and Small and $100,000 for Richard
Flynn. A bonus pool equal to 10% of net profits of the Company has been
established. Awards under this bonus pool will be determined by the Compensation
Committee and the Executives will be eligible for bonuses thereunder. The
Executives will participate in this bonus pool based on the determination of the
Board. A bonus program has been established for Brian Doyle and others
designated by him based on cumulative profitability of the recorded music
business to reward him based on a successful launch of the record label. Under
this bonus program, $250,000 will be paid in the first fiscal year in which
cumulative net profits pretax exceed $1,000,000. An additional bonus of $250,000
shall be paid in the first fiscal year in which cumulative profits pretax exceed
$2,000,000. An additional bonus of $100,000 shall be paid in the first fiscal
year in which cumulative net profits pretax exceed $2,400,000. No bonus will be
earned after fiscal 2001 and the maximum bonus will be $600,000. A special
project bonus program has been established as an incentive for successful
consummation of designated special projects. These special projects must be pre
designated by the Company and will provide for a bonus, if the net profits from
the special project exceed $1,000,000. Such bonus is calculated on 15% of net
profits realized therefrom above the salary plus subsidiary based bonus paid in
the period in which the special project was effected. In addition, thereafter
there will be payable 15% of future royalty revenue derived from such special
project. John Loeffler and Jon Small are each entitled to receive an initial
advance on bonus of $56,250. Thereafter, in each subsequent fiscal quarter the
Company may grant additional like advances to each of them to be offset against
bonuses payable. Richard Flynn and Brian Doyle are entitled to receive an
initial advance on bonus of $50,000 and $112,500. Thereafter in each subsequent
fiscal quarter the Company may grant additional advances to be offset against
bonuses payable. The Compensation Committee will review the performance of each
division and the likelihood of such division achieving its bonus target earnings
on a quarterly basis. Each of the Executives has the right to participate in the
benefit plans established by the Company for the benefit of its key executives.
If an Executive is discharged for cause, the Company is entitled to immediately
terminate such Executive's Employment Agreement. If an Executive dies or is
unable to perform his duties on account of illness or other incapacity and such
Executive's Employment Agreement is terminated, he or his legal representative
is to receive the Executive's base salary for the remainder of the term of the
Employment Agreement. If an Executive voluntarily terminates his employment with
the Company, he is entitled to receive compensation accrued through the date of
termination. Additionally, the Employment Agreements contain confidentiality and
non-competition clauses.

STOCK OPTIONS

In October 1996, the Board of Directors adopted and the stockholders
approved the 1996 Option Plan (the "Option Plan"). The Option Plan provides for
the grant of incentive stock options ("ISOs") (within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), non-qualified
stock options ("NQSOs") and/or Stock Appreciation Rights ("SARs") to certain
directors, agents and employees of, and consultants to, the Company. The Option
Plan further provides for the grant of NQSOs to directors, agents of, and
consultants to, the Company, whether or not employees of the

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<PAGE>
Company. The purpose of the Option Plan is to attract and retain exemplary
employees, agents, consultants and directors. Options and SARs granted under the
Option Plan may not be exercisable for terms in excess of 10 years from the date
of grant. In addition, no options or SARs may be granted under the Option Plan
later than 10 years after the Option Plan's effective date. The total number of
shares of Common Stock with respect to which options and SARs will be granted
under the Option Plan is 185,000. The shares subject to and available under the
Option Plan may consist, in whole or in part, of authorized but unissued stock
or treasury stock not reserved for any other purpose. Any shares subject to an
option or SAR that terminates, expires or lapses for any reason, and any shares
purchased pursuant to an option and subsequently repurchased by the Company
pursuant to the terms of the option, shall again be available for grant under
the Option Plan.

The Option Plan will be administered by the Compensation and Stock Option
Committee which will be composed solely of two or more "Non Employee Directors"
within the meaning of paragraph (b)(3) of Rule 16b-3 promulgated under the
Exchange Act, which will determine, in its discretion, among other things, the
recipients of grants, whether a grant will consist of ISOs, NQSOs or SARs, or a
combination thereof, and the number of shares of Common Stock to be subject to
such options or SARs. The exercise price of options granted under the Option
Plan shall not be less than the fair market value per share on the date of
grant, as determined by the Committee.

The Option Plan contains certain limitations applicable only to ISOs granted
thereunder. To the extent that the aggregate fair market value, as of the date
of grant, of the shares to which ISOs become exercisable for the first time by
an optionee during the calendar year exceeds $100,000, the ISO will be treated
as a NQSO. In addition, if an optionee owns more than 10% of the Company's stock
at the time the individual is granted an ISO, the option price per share cannot
be less than 110% of the fair market value per share and the term of the option
cannot exceed five years.

As of the date of this Prospectus, the Company has not granted any stock
options.

37
<PAGE>
PRINCIPAL STOCKHOLDERS

The following table sets forth, as of the date of this Prospectus, certain
information as to the stock ownership of (i) each of the Company's directors,
(ii) the Company's Chief Executive Officer and four most highly compensated
executive officers, (iii) the executive officers and directors as a group and
(iv) all persons known by the Company to be the beneficial owner of more than
five percent of the outstanding Common Stock of the Company prior to the
Offering and giving pro forma effect to the sale of the Units offered hereby.

<TABLE>
<CAPTION>
PERCENTAGE OWNERSHIP OF ALL
COMMON STOCK OUTSTANDING
------------------------------
NUMBER OF SHARES
OF IMMEDIATELY
COMMON STOCK BEFORE IMMEDIATELY
BENEFICIALLY THE AFTER
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) OFFERING(1) THE OFFERING(2)
- ---------------------------------------------- ---------------- ------------- ---------------
<S> <C> <C> <C>
John Loeffler................................. 336,000 31.3% 16.2%
c/o Paradise Music & Entertainment, Inc.
420 West 45th Street
5th Floor
New York, NY 10036
Paul Thomas Cohen............................. 8,000 * *
c/o Paradise Music & Entertainment, Inc.
420 West 45th Street
5th Floor
New York, NY 10036
Brian Doyle................................... 145,500 13.6% 7.0%
c/o Paradise Music & Entertainment, Inc.
420 West 45th Street
5th Floor
New York, NY 10036
Thomas J. Edelman............................. 8,000 * *
c/o Paradise Music & Entertainment, Inc.
420 West 45th Street
5th Floor
New York, NY 10036
Richard Flynn................................. 145,500 13.6% 7.0%
c/o Paradise Music & Entertainment, Inc.
420 West 45th Street
5th Floor
New York, NY 10036
Robert Klein.................................. 85,000(3) 7.9% 4.1%
c/o Paradise Music & Entertainment, Inc.
420 West 45th Street
5th Floor
New York, NY 10036
Jon Small..................................... 286,000(3) 26.7% 13.8%
c/o Paradise Music & Entertainment, Inc.
420 West 45th Street
5th Floor
New York, NY 10036
All executive officers and directors as a
group (7 persons)........................... 1,014,000 94.6% 48.9%
</TABLE>

38
<PAGE>
- ------------------------

* Denotes less than 1%

(1) All shares are beneficially owned and sole voting and investment power is
held by the persons named, except as otherwise noted. See "Description of
Securities--Common Stock."

(2) Does not give effect to any exercise of the Over-Allotment Option or the
Representative's Warrants.

(3) Reflects the transfer of 5,000 shares of Common Stock from Jon Small to
Robert Klein for personal service rendered.

CERTAIN TRANSACTIONS

On October 9, 1996, the Company entered into the Exchange Agreement with
each of John Loeffler, Jon Small, Brian Doyle and Richard Flynn, each of whom
was an executive officer and a director of the Company. Pursuant to the Exchange
Agreement, John Loeffler and Jon Small were each issued 291,000 shares of Common
Stock and Brian Doyle and Richard Flynn were issued 145,500 shares of Common
Stock in exchange for all of the outstanding stock of each of Rave, Picture
Vision and All Access. The Company believes that this transaction was fair from
a financial point of view. This belief is based on the fact that the Exchange
Agreement, and the transactions consummated thereby, were analyzed and approved
by the Company's Board of Directors and by all of its then existing
stockholders.

On October 9, 1996, the Company entered into an Expense Allocation Agreement
(the "Expense Allocation Agreement") with each of All Access, Picture Vision,
Rave and Robert Klein. John Loeffler, Jon Small, Brian Doyle and Richard Flynn
were all directors and/or executive officers of the Company and were also
owners, directors, and executive officers of Rave, Picture Vision and All
Access, respectively, and Robert Klein was an executive officer and director of
the Company, when the Expense Allocation Agreement was executed. Pursuant to the
Expense Allocation Agreement, Rave, Picture Vision and All Access will
contribute, pro rata up to $41,667 each to the Company and Robert Klein will
contribute up to $25,000 if the Offering does not occur or if they terminate
their relationship with the Company prior to the Offering. The Company believes
that this transaction was fair from a financial point of view. This belief is
based on the fact that the Expense Allocation Agreement, and the transactions
contemplated thereby, were analyzed and approved by the Company's Board of
Directors and by all of its then existing stockholders.

On October 9, 1996, the Registrant issued 70,000 shares of its Common Stock
to 11 individuals in a private placement (the "Private Placement") for $3.00 per
share. There were no underwriters involved in the Private Placement. The Common
Stock in the Private Placement was issued only to Accredited Investors, as such
term is defined in the Securities Act. The aggregate offering price of the
Private Placement was $210,000. Mr. Paul Thomas Cohen and Mr. Thomas Edelman,
each directors of the Company, each purchased 8,000 shares of Common Stock in
the Private Placement.

John Loeffler, the President, Chief Executive Officer and a director of the
Company, is also a consultant to Grey Advertising, which is a major client of
the Company's commercial music production division. For such consulting services
Mr. Loeffler is paid approximately $45,000 per year. The Company derived
approximately $365,000 and $413,000 of commercial music production revenues from
Grey Advertising for the year ended June 30, 1996 and 1995, respectively.

OFFERING BY SELLING STOCKHOLDERS

An additional 70,000 shares of Common Stock (the "Selling Stockholder
Securities") have been registered pursuant to the Registration Statement under
the Securities Act, of which this Prospectus forms a part, for sale by the
holders thereof (the "Selling Stockholders"). The Company will not receive
proceeds from the sale of the Selling Stockholder Securities. All of the Selling
Stockholder Securities have been registered, at the Company's expense, under the
Securities Act and are expected to become tradable on or

39
<PAGE>
about the date of this Prospectus, subject to a contractual restriction that
such Common Stock may not be sold for 180 days after the date of this
Prospectus. Sales of Selling Stockholder Securities or even the potential of
such sales could have an adverse effect on the market prices of the Common Stock
and the Warrants. The Company has been informed by the Representative that,
other than the lock-up agreements, there are no agreements between the
Underwriters and any Selling Securityholder regarding the distribution of the
Selling Stockholder Securities. Other than with respect to Paul Thomas Cohen and
Thomas Edelman, each director of the Company, and Walter Epstein, counsel to the
Company, there are no material relationships between any of the Selling
Stockholders and the Company, nor have any such material relationships existed
within the past three years. Additionally, John Loeffler's parents and brother
are Selling Stockholders.

The sale of the securities by the Selling Stockholders may be effected from
time to time in transactions (which may include block transactions by or for the
account of the Selling Stockholders) in the over-the-counter market or in
negotiated transactions, a combination of such methods of sale or otherwise.
Sales may be made at fixed prices which may be changed, at market prices
prevailing at the time of sale, or at negotiated prices.

Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Selling Stockholder Securities may not
simultaneously engage in market making activities with respect to any securities
of the Company for a period of at least two (and possibly nine) business days
prior to the commencement of such distribution. Accordingly, in the event any of
the Underwriters is engaged in a distribution of the Selling Stockholder
Securities, such firm will not be able to make a market in the Company's
securities during the applicable restrictive period. However, the Underwriters
have agreed not to, nor is it obliged to, act as broker/dealer in the sale of
the Selling Stockholder Securities and the selling Securityholders may be
required, and in the event any of the Underwriters is a market maker, will
likely be required, to sell such securities through another broker/dealer. In
addition, each Selling Securityholder desiring to sell Common Stock will be
subject to the applicable provisions of the Exchange Act and the rules and
regulations thereunder, including without limitation Rules 10b-6 and 10b-7,
which provisions may limit the timing of the purchases and sales of share of the
Company's securities by such Selling Securityholder.

The Selling Stockholders and broker-dealers, if any, acting in connection
with such sales might be deemed to be "underwriters within the meaning of
Section 2(11) of the Securities Act and any commission received by them and any
profit on the resale of the securities might be deemed to be underwriting
discounts and commissions under the Securities Act.

DESCRIPTION OF SECURITIES

GENERAL

The Company's authorized capital stock consists of 20,000,000 shares of
Common Stock, $.01 value per share, and 5,000,000 shares of preferred stock,
$.01 par value per share (the "Preferred Stock"). Immediately prior to the
Offering, there were outstanding 1,072,000 shares of Common Stock (held by 17
holders) and no outstanding shares of Preferred Stock.

40
<PAGE>
UNITS

Each Unit consists of one share of Common Stock and one Warrant. Two
Warrants entitle the holder thereof to purchase one share of Common Stock. The
Common Stock and the Warrants included in the Units will be separately
transferable upon issuance. The Units will not trade separately subsequent to
issuance.

COMMON STOCK

Immediately prior to the Offering, there were 1,072,000 shares of Common
Stock outstanding. The holders of the Common Stock are entitled to one vote per
share with respect to all matters on which holders of the Common Stock are
entitled to vote.

Holders of the Common Stock have the right to dividends from funds legally
available therefor, when, as and if declared by the Board of Directors and are
entitled to share ratably in all of the assets of the Company available for
distribution to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the affairs of the Company. Holders of Common Stock
do not have preemptive, subscription, or conversion rights. There are no
redemption or sinking fund provisions for the benefit of the Common Stock in the
Company's Certificate of Incorporation. All outstanding shares of Common Stock
are, and those shares of Common Stock offered hereby will be, validly issued,
fully paid and non-assessable. The Common Stock does not have cumulative voting
rights and, therefore, holders of shares entitled to exercise more than 50% of
the voting power are able to elect 100% of the directors of the Company.

WARRANTS

The holder of two Warrants is entitled, upon payment of the exercise price
of $7.20 per share, to purchase one share of Common Stock. Unless previously
redeemed, the Warrants are exercisable at any time commencing on the date of
this Prospectus through the close of business on , 2000, provided
that at such time a current prospectus relating to the Common Stock is in effect
and the Common Stock is qualified for sale or exempt from qualification under
applicable state securities laws. The Warrants are transferable separately from
the Common Stock issued with such Warrants as part of the Units immediately upon
issuance.

The Warrants are subject to redemption by the Company at any time, upon 30
days' written notice, at a price of $.05 per Warrant, if the "closing price" of
the Common Stock for any 20 consecutive business days ending on the fifth day
prior to the date on which the notice of redemption is given has been equal to
or greater than 120% of the then exercise price of the Warrants. "Closing price"
shall mean the closing bid price if listed on Nasdaq or the closing sale price
if listed on The Nasdaq National Market or a national securities exchange.
Holders of Warrants will automatically forfeit their rights to purchase the
Common Stock issuable upon exercise of such Warrants unless the Warrants are
exercised before the close of business on the business day immediately prior to
the date set for redemption. All of the outstanding Warrants must be redeemed if
any of that class are redeemed. A notice of redemption shall be mailed to each
of the registered holders of the Warrants by first class mail, postage prepaid,
upon 30 days' notice before the date fixed for redemption. The notice of
redemption shall specify the redemption price, the date fixed for redemption,
the place where the Warrant certificates shall be delivered and the redemption
price to be paid and that the right to exercise the Warrants shall terminate at
5:00 p.m. (New York City time) on the business day immediately preceding the
date fixed for redemption.

The Warrants may be exercised upon surrender of the certificate(s) therefor
on or prior to the expiration of the redemption date (as explained above) at the
offices of the Company's warrant agent (the "Warrant Agent") with the
"subscription form" on the reverse side of the certificate(s) completed and
executed as indicated, accompanied by payment (in the form of certified or
cashier's check payable to the order of the Company) of the full exercise price
for the number of Warrants being exercised.

41
<PAGE>
The Warrants contain provisions that protect the holders thereof against
dilution by adjustment of the exercise price per share and the number of shares
issuable upon exercise thereof upon the occurrence of certain events, including
issuances of Common Stock (or securities convertible, exchangeable or
exercisable into Common Stock) at less than the market value, stock dividends,
stock splits, mergers, sale of substantially all of the Company's assets, and
for other extraordinary events, provided, however, that no such adjustment shall
be made upon, among other things, (i) the issuance or exercise of options or
other securities under the Option Plan or other employee benefit plans up to
certain maximum amounts or (ii) the sale or exercise of outstanding options or
warrants or the Warrants offered hereby.

The Company is not required to issue fractional shares of Common Stock, and
in lieu thereof will make a cash payment based upon the current market value of
such fractional shares. The holder of the Warrants will not possess any rights
as a stockholder of the Company unless he or she exercises the Warrants.

PREFERRED STOCK

The Preferred Stock may be issued in series, and shares of each series will
have such rights and preferences as are fixed by the Board of Directors in the
resolutions authorizing the issuance of that particular series. In designating
any series of Preferred Stock, the Board of Directors may, without further
action by the holders of Common Stock, fix the number of shares constituting
that series and fix the dividend rights, dividend rate, conversion rights,
voting rights (which may be greater or lesser than the voting rights of the
Common Stock), rights and terms of redemption (including any sinking fund
provisions) and the liquidation preferences of the series of Preferred Stock. It
is to be expected that the holders of any series of Preferred Stock, when and if
issued, will have priority claims to dividends and to any distributions upon
liquidation of the Company and that they may have other preferences over the
holders of the Common Stock.

The Board of Directors may issue series of Preferred Stock without action of
the stockholders of the Company. The issuance of Preferred Stock may adversely
affect the rights of the holders of the Common Stock. In addition, the issuance
of Preferred Stock may be used as an anti-takeover device without further action
on the part of the shareholders. Furthermore, the issuance of Preferred Stock
may dilute the voting power of holders of the Common Stock (such as by issuing
Preferred stock with super-voting rights) and may render more difficult the
removal of current management, even if such removal may be in the stockholders'
best interests. The Company has no current plans to issue any Preferred Stock.

DELAWARE ANTI-TAKEOVER LAW

The Company is subject to Section 203 of the Delaware General Corporation
Law ("Section 203") which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any "business combination" with any "interested
stockholder" for a period of three years following the date that such
stockholder became an interested stockholder, unless: (i) prior to such date,
the Board of Directors of the corporation, approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder; (ii) upon consummation of the transaction which resulted
in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding for purposes of
determining the number of shares outstanding those shares owned by persons who
are directors and also officers and by employee stock plans in which employee
participants do not have the right to determine confidentially whether shares
held subject to the plan will be tendered in a tender or exchange offer; or
(iii) on or subsequent to such date, the business combination is approved by the
Board of Directors and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at least
66 2/3% of the outstanding voting stock which is not owned by the interested
stockholder. Under Section 203, the restrictions described above also do not
apply to certain business combinations proposed by an interested stockholder
following the announcement or notification of one of certain

42
<PAGE>
extraordinary transactions involving the corporation and a person who had not
been an interested stockholder during the previous three years or who became an
interested stockholder with the approval of a majority of the corporation's
directors and which transaction is approved or not opposed by the majority of
the board of directors then in office.

Section 203 generally defines a business combination to include: (i) any
merger or consolidation involving the corporation and the interested
stockholders; (ii) any sale, transfer, pledge or other disposition of 10% or
more of the assets of the corporation to the interested stockholder; (iii)
subject to certain exceptions, any transaction which results in the issuance or
transfer by the corporation of any stock of the corporation to the interested
stockholder; (iv) any transaction involving the corporation which has the effect
of increasing the proportionate share of the stock of any class or series of the
corporation beneficially owned by the interested stockholder; or (v) the receipt
by the interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the corporation. In
general, Section 203 defines an interested stockholders as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.

These provisions could have the effect of delaying, deferring or preventing
a change of control of the Company which could prevent the Company's
stockholders from realizing a premium through a non-negotiated change in
control. The Company's stockholders, by adopting an amendment to the Certificate
of Incorporation or By-Laws of the Company, may elect not to be governed by
Section 203, effective twelve months after adoption. Neither the Certificate of
Incorporation nor the By-Laws of the Company currently excludes the Company from
the restrictions imposed by Section 203.

DIVIDEND POLICY

The Company has never paid any cash dividends on its Common Stock. The
Company anticipates that in the future, earnings, if any, will be retained for
use in the business of the Company or for other corporate purposes, and it is
not anticipated that cash dividends in respect of the Common Stock will be paid.
See "Dividend Policy."

THE COMPANY'S TRANSFER AGENT

Continental Stock Transfer & Trust Company, New York, NY, will serve as the
Company's Transfer Agent for the Common Stock and Warrants.

SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of the Offering, the Company will have outstanding
2,072,000 shares of Common Stock. All of the shares of Common Stock offered
hereby will be freely tradable without restriction or further registration under
the Securities Act except for any shares purchased by any person who is or
thereby becomes an affiliate of the Company, which shares will be subject to the
resale limitations contained in Rule 144 promulgated under the Securities Act.

Holders of the Warrants included in the Units offered hereby, will be
entitled to purchase an aggregate of 500,000 shares of Common Stock upon
exercise of the Warrants at any time during the four-year period following the
date of this Prospectus, provided that the Company satisfies certain securities
registration requirements with respect to the securities underlying the
Warrants. Any and all shares of Common Stock purchased upon exercise of the
Warrants will be freely tradeable, except for any shares purchased by any person
who is or thereby becomes an affiliate of the Company, provided such
registration requirements are met.

Up to 150,000 additional shares of Common Stock may be purchased by the
Representative through the exercise of the Representative's Warrants. Any and
all of such shares of Common Stock will be

43
<PAGE>
tradable without restriction, provided that the Company satisfies certain
securities registration requirements in accordance with the terms of the
Representative's Warrants. See "Underwriting."

Upon consummation of the Offering, the Company will have a total of
2,072,000 shares of Common Stock outstanding, of which the 1,000,000 shares of
Common Stock included in the Units will be eligible for immediate sale in the
public market without restrictions, unless they are held by "affiliates" of the
Company within the meaning of Rule 144 under the Securities Act and of which
1,018,000 shares will be "restricted" securities within the meaning of Rule 144
under the Securities Act. The Company's officers and directors and the Selling
Stockholders (who in the aggregate will hold 1,068,000 shares of Common Stock)
have agreed that they will not directly or indirectly offer, sell, contract to
sell, grant any option to purchase or otherwise dispose of, without the prior
written consent of Donald & Co. Securities Inc., any shares of Common Stock or
any other equity security of the Company, or any securities convertible into or
exercisable or exchangeable for, or warrants, options or rights to purchase or
acquire, Common Stock or any other equity security of the Company, or enter into
any agreement to do any of the foregoing, for a period of two years from the
date of this Prospectus, with respect to the officers and directors, and for a
period of 180 days with respect to the Selling Stockholders who are not also
directors. Upon the expiration of such 180-day period (or earlier upon the
consent of Donald & Co. Securities Inc.), 54,000 of these shares will be
eligible for re-sale and upon the expiration of such two year period (or earlier
upon the consent of Donald & Co. Securities Inc.) the remaining 1,014,000 shares
will become eligible for resale commencing in October 1998 under Rule 144,
subject to volume and other limitations of Rule 144. Donald & Co. Securities
Inc. may, in its sole discretion, and at any time without notice, release all or
any portion of the shares subject to the lock-up agreements.

In general under Rule 144 as currently in effect, a person (or persons whose
shares are aggregated), including a person who may be deemed to be an affiliate
of the Company as that term is defined under the Securities Act, is entitled to
sell, within any three month period, a number of shares beneficially owned for
at least two years that does not exceed the greater of (i) one percent of the
number of the then outstanding shares of Common Stock or (ii) the average weekly
trading volume in the Common Stock during the four calendar weeks preceding such
sale. Sales under Rule 144 are also subject to certain requirements as to the
manner of sale, notice and the availability of current public information about
the Company. Furthermore, a person who is not deemed to have been an affiliate
of the Company during the ninety days preceding a sale by such person and who
has beneficially owned such shares for at least three years is entitled to sell
such shares without regard to the volume, manner of sale or notice requirements.

Under Rule 701 of the Securities Act, persons who purchase shares upon the
exercise of options granted prior to the effective date of the Offering are
entitled to sell such shares 90 days after the effective date of the Offering
and in reliance on Rule 144 without having to comply with the holding period
requirements of Rule 144 and, in the case of nonaffiliates, without having to
comply with the public information, volume limitation, or notice provisions of
Rule 144.

Prior to the Offering, there has been no public market for the Company's
securities. Following the Offering, the Company cannot predict the effect, if
any, that market sales of the Common Stock, or the availability of such shares
for sale, will have on the market price prevailing from time to time.
Nevertheless, sales by the existing stockholders of substantial amounts of
Common Stock in the public market could adversely affect prevailing market
prices for the Company's securities. In addition, the availability for sale of
substantial amounts of Common Stock acquired through the exercise of the
Warrants and other options or the Representative's Warrants could adversely
affect prevailing market prices for the Common Stock.

The Commission has recently proposed shortening the basic Rule 144 holding
period from two years to one year; no assurance can be given as to when or
whether such change will occur.

44
<PAGE>
UNDERWRITING

The Underwriters named below, for whom Donald & Co. Securities Inc. is
acting as Representative, have severally agreed, subject to the terms and
conditions of the Underwriting Agreement, to purchase from the Company a total
of 1,000,000 Units. The number of Units that each Underwriter has agreed to
purchase is set forth opposite its name:

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF UNITS
- ----------------------------------------------------------------------------- ---------------
<S> <C>
Donald & Co. Securities Inc.
---------------
Total.................................................................... 1,000,000
---------------
---------------
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
are subject to approval of certain legal matters by counsel to the Underwriters
and various other conditions precedent, and that the Underwriters are obligated
to purchase all of the Units offered by this Prospectus (other than the Units
covered by the Over-Allotment Option described below), if any are purchased.

The Company has been advised by the Representative that the Underwriters
propose to offer the Units to the public at the initial offering price set forth
on the cover page of this Prospectus and to certain dealers (who may include
Underwriters) at that price less a concession not in excess of $ per
Unit. The Underwriters may allow, and such dealers may reallow, a concession not
in excess of $ per Unit to certain other dealers. After the Offering,
the offering price and other selling terms may be changed by the Representative.

The Representative has informed the Company that the Underwriters do not
intend to confirm sales to accounts over which they exercise discretionary
authority.

The Company has granted to the Representative an option, exercisable during
the 30-day period after the date of this Prospectus, to purchase from the
Company at the initial public offering price, less underwriting discounts and
the nonaccountable expense allowance, up to an aggregate of 150,000 additional
Units for the sole purpose of covering over-allotments, if any.

The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act.

The Company has also agreed to pay to the Representative an expense
allowance on a nonaccountable basis equal to 3% of the gross proceeds derived
from the sale of the Units underwritten (including the sale of any Units subject
to the Representative's Over-Allotment Option), $25,000 of which has been paid
to date.

The Company has granted the Representative for a period of three years from
the date hereof the right to have the Representative's designee present at all
meetings of the Company's Board of Directors and each of its committees. Such
designee will be entitled to the same notices and communications sent by the
Company to its directors and to attend directors' and committees' meetings, but
will not be entitled to vote thereat. Such designee will also be entitled to
receive the same compensation payable to directors as members of the Board and
its committees and all reasonable expenses in attending such meetings. The
Representative has not named such designee as of the date of this Prospectus.

In connection with the Offering, the Company has agreed to sell to the
Representative, for nominal consideration, the Representative's Warrants. The
Representative's Warrants are exercisable initially at $ per Unit (the
"Exercise Price") for a period of four years commencing one year from the date
hereof. The Representative's Warrants contain antidilution provisions providing
for adjustment of the Exercise Price upon the occurrence of certain events,
including any recapitalization, reclassification, stock

45
<PAGE>
dividend, stock split, stock combination or similar transaction. In addition,
the Representative's Warrants grant to the holders thereof certain demand and
"piggy back" rights for periods of four and six years, respectively, commencing
one year from the date of this Prospectus with respect to the registration under
the Securities Act of the securities directly and indirectly issuable upon
exercise of the Representative's Warrants.

Subject to the rules of the National Association of Securities Dealers, Inc.
(the "NASD"), the Company has agreed to appoint the Representative as warrant
solicitation agent months after the date of this Prospectus, for which the
Representative will be entitled to a 5% fee upon the exercise of the Warrants
solicited by it. No solicitation fee will be paid in connection with the
exercise of the Representative's Warrants. In accordance with the NASD Notice to
Members 81-83, no fee will be paid: (i) upon exercise where the market price of
the underlying Common Stock is lower than the exercise price; (ii) for the
exercise of Warrants held in any discretionary account; (iii) upon the exercise
of Warrants where disclosure of compensation arrangements has not been made in
documents provided to customers both as part of the original offering and at the
time of exercise; or (iv) unless the Representative has been designated in
writing by the holder of the Warrant as having solicited the exercise of the
Warrant. Unless granted an exemption by the Commission from its rule 10b-6, the
Representative and any soliciting broker-dealers will be prohibited from
engaging in any market making activities or solicited brokerage activities with
regard to the Company's securities for a period of two or nine days, whichever
is applicable, prior to any solicitation of the exercise of the Warrants until
the later of the termination of such solicitation activity or the termination
(by waiver or otherwise) of any right that the Representative and soliciting
broker-dealers may have to receive a fee for the exercise of Warrants following
such solicitation. As a result, the Representative and soliciting broker-dealers
may be unable to continue to provide a market for the Company's securities
during certain periods while the Warrants are exercisable.

The Company has agreed that, upon consummation of the Offering, it will
enter into a two year financial consulting agreement with the Representative
pursuant to which the Representative will provide the Company with investment
banking and financial consulting services at a fee of $72,000, at the rate of
$3,000 per month for the twenty-four months subsequent to the consummation of
the Offering. Such services will include consulting with the Company's
management with respect to, among other matters, stockholder relations,
corporate expansion and long term financial planning.

Prior to this offering there has been no public market for any of the
Company's securities. Accordingly, the offering price of the Units and the
exercise price of the Warrants were determined by negotiation between the
Company and the Representative. Factors considered in determining such prices,
in addition to prevailing market conditions, included the history of and the
prospects for the industry in which the Company competes, an assessment of the
Company's management, the prospects of the Company, its capital structure and
such other factors as were deemed relevant.

LEGAL MATTERS

Certain legal matters in connection with the issuance of the securities
offered hereby will be passed upon for the Company by Rubin Baum Levin Constant
& Friedman, New York, New York. Parker, Duryee, Rosoff & Haft, New York, New
York, will pass upon certain legal matters for the Underwriters. Walter M.
Epstein who is of counsel to Rubin Baum Levin Constant & Friedman owns 6,200
shares of Common Stock and is listed as a Selling Stockholder.

EXPERTS

The Consolidated Financial Statements of the Company as of June 30, 1996 and
for the years ended June 30, 1996 and 1995, included herein in the Registration
Statement, of which this Prospectus forms a part, have been audited by
Rothstein, Kass & Company, P.C., independent auditors, as set forth in their
Report thereon appearing elsewhere in the Registration Statement, and are
included in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.

46
<PAGE>
ADDITIONAL INFORMATION

The Company has filed with the Commission, a Registration Statement on Form
SB-2 (together with all amendments, schedules and exhibits thereto, the
"Registration Statement") under the Securities Act with respect to the Common
Stock offered hereby. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information with
respect to the Company and the Common Stock offered hereby, reference is made to
the Registration Statement. Statements made in the Prospectus as to the contents
of any contract, agreement or other document are not necessarily complete; with
respect to each such contract, agreement or other document filed as an exhibit
to the Registration Statement, reference is made to the exhibit for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference. The Registration Statement
and the exhibits thereto may be inspected, without charge, at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices at Northwestern Atrium Center, 500 West Madison Street, Room 1400,
Chicago, IL 60661, and 7 World Trade Center, Suite 1300, New York, NY 10048.
Copies of such material can also be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, the Commission maintains a Web site on the
Internet at http://www.sec.gov that contains reports, proxy and information
statements and other information of issuers that file electronically with the
Commission.

47
<PAGE>
PARADISE MUSIC & ENTERTAINMENT, INC.
AND SUBSIDIARIES

CONTENTS

<TABLE>
<S> <C>
INDEPENDENT AUDITORS' REPORT..................................................... F-2

CONSOLIDATED FINANCIAL STATEMENTS................................................

CONSOLIDATED BALANCE SHEET..................................................... F-3

CONSOLIDATED STATEMENTS OF OPERATIONS.......................................... F-4

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY................................ F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS.......................................... F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS..................................... F-7-F-13
</TABLE>

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
PARADISE MUSIC & ENTERTAINMENT, INC.
New York, New York

We have audited the accompanying consolidated balance sheet of Paradise
Music & Entertainment, Inc. and Subsidiaries as of June 30, 1996, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the years ended June 30, 1996 and 1995. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Paradise
Music & Entertainment, Inc. and Subsidiaries as of June 30, 1996, and the
results of their operations and their cash flows for the years ended June 30,
1996 and 1995 in conformity with generally accepted accounting principles.

Roseland, New Jersey
September 12, 1996, (except for Note 8, as
to which the date is October 9, 1996)

F-2
<PAGE>
PARADISE MUSIC & ENTERTAINMENT, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

JUNE 30, 1996
<TABLE>
<CAPTION>
ASSETS

<S> <C> <C>
CURRENT ASSETS:
Cash.................................................................. $ 82,813
Accounts receivable................................................... 129,715
Prepaid production costs.............................................. 17,255
---------
Total current assets.............................................. $ 229,783

PROPERTY AND EQUIPMENT, less accumulated depreciation and amortization
of $141,415........................................................... 81,154

OTHER ASSETS:
Security deposits..................................................... 14,072
Deferred registration costs........................................... 5,000
---------
19,072
---------
$ 330,009
---------
---------

LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>

CURRENT LIABILITIES:
Deferred revenues..................................................... $ 49,612
Accounts payable...................................................... 81,854
Retirement plan contributions payable................................. 30,000
Accrued expenses and other current liabilities........................ 28,563
---------
Total current liabilities......................................... $ 190,029

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, authorized 5,000,000 shares, none
issued.............................................................. --
Common stock, $.01 par value, authorized 20,000,000 shares, 998,000
issued and outstanding.............................................. 9,980
Capital in excess of par value........................................ 12,090
Retained earnings..................................................... 119,160
Common stock subscription receivable.................................. (1,250)
---------
Total stockholders' equity........................................ 139,980
---------
$ 330,009
---------
---------
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE>
PARADISE MUSIC & ENTERTAINMENT, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED JUNE 30, 1996 AND 1995

<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
REVENUES.............................................................................. $ 3,638,192 $ 3,379,848
------------ ------------
OPERATING EXPENSES:
Cost of sales....................................................................... 1,939,807 2,096,076
Marketing, selling, general and administrative...................................... 1,610,097 1,386,270
------------ ------------
Total operating expenses.......................................................... 3,549,904 3,482,346
------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES..................................................... 88,288 (102,498)

INCOME TAXES.......................................................................... 10,500
------------ ------------
NET INCOME (LOSS)..................................................................... $ 77,788 $ (102,498)
------------ ------------
------------ ------------
INCOME (LOSS) PER COMMON SHARE........................................................ $ .08 $ (.10)
------------ ------------
------------ ------------
WEIGHTED AVERAGE SHARES OUTSTANDING................................................... 1,035,000 986,500
------------ ------------
------------ ------------
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE>
PARADISE MUSIC & ENTERTAINMENT, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

YEARS ENDED JUNE 30, 1996 AND 1995

<TABLE>
<CAPTION>
COMMON
COMMON STOCK CAPITAL IN STOCK
--------------------- EXCESS OF RETAINED SUBSCRIPTION
SHARES AMOUNT PAR VALUE EARNINGS RECEIVABLE
---------- --------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
BALANCES, July 1, 1994............................... 707,000 $ 7,070 $ -- $ 143,870 $ (1,250)
SHARES ISSUED TO ACQUIRE ALL ACCESS ENTERTAINMENT
MANAGEMENT GROUP INC.,
September 1, 1994.................................. 291,000 2,910 12,090
NET LOSS............................................. (102,498)
---------- --------- ----------- ----------- ------------
BALANCES, June 30, 1995.............................. 998,000 9,980 12,090 41,372 (1,250)

NET INCOME........................................... 77,788
---------- --------- ----------- ----------- ------------
BALANCES, June 30, 1996.............................. 998,000 $ 9,980 $ 12,090 $ 119,160 $ (1,250)
---------- --------- ----------- ----------- ------------
---------- --------- ----------- ----------- ------------
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE>
PARADISE MUSIC & ENTERTAINMENT, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED JUNE 30, 1996 AND 1995

<TABLE>
<CAPTION>
1996 1995
---------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)...................................................................... $ 77,788 $ (102,498)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation and amortization........................................................ 23,413 12,981
Increase (decrease) in cash attributable to changes in assets and liabilities:
Accounts receivable................................................................ 41,039 (136,976)
Prepaid production costs........................................................... 109,464 126,190
Other current assets............................................................... 2,607 (519)
Deferred revenues.................................................................. (32,510) (94,118)
Accounts payable................................................................... (130,444) 174,722
Retirement plan contributions payable.............................................. (15,000) 28,000
Accrued expenses and other current liabilities..................................... (12,741) 32,477
---------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES................................................ 63,616 40,259
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property and equipment.................................................... (27,782) (67,482)
Proceeds from (payments for) security deposits......................................... 3,209 (17,281)
---------- -----------
NET CASH USED IN INVESTING ACTIVITIES.................................................... (24,573) (84,763)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on stockholders' loans........................................................ (57,500)
Payments for deferred registration costs............................................... (5,000)
Proceeds from stockholders' loans...................................................... 57,500
Proceeds from issuance of common stock................................................. 15,000
---------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES...................................... (62,500) 72,500
---------- -----------
NET INCREASE (DECREASE) IN CASH.......................................................... (23,457) 27,996
CASH, beginning of year.................................................................. 106,270 78,274
---------- -----------
CASH, end of year........................................................................ $ 82,813 $ 106,270
---------- -----------
---------- -----------
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE>
PARADISE MUSIC & ENTERTAINMENT, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--ORGANIZATION AND NATURE OF OPERATIONS:

Upon the execution of the exchange agreement (the "Agreement") (SEE NOTE 8),
Paradise Music & Entertainment, Inc. and Subsidiaries (the "Company") will be a
music and entertainment company focused on providing music driven content for
the expanding music and entertainment industry. The Company operates in three
areas of the music and entertainment business through its three wholly-owned
operating subsidiaries. The Agreement contemplates that Paradise Music and
Entertainment, Inc. ("Paradise"), which was formed in July 1996, will exchange
873,000 shares of its common stock for all of the capital stock of its
subsidiaries in a transaction to be accounted for as a pooling of interests,
whereby the financial statements for all periods prior to the combination were
restated to reflect the combined operations of its subsidiaries, All Access
Entertainment Management Group, Inc. ("All Access"), a musical artist management
company incorporated in New York, Picture Vision, Inc. ("Picture Vision"), a
video production company incorporated in Tennessee, and John Leffler Music, Inc.
(which operates under the name of Rave Music and Entertainment) ("Rave") a
creator of music scores and advertising themes for television and radio, which
was incorporated in New York. (SEE NOTE 9)

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION--The consolidated financial statements give
effect to the execution of the Agreement (SEE NOTE 8) and include the accounts
of Paradise and its wholly-owned subsidiaries, Rave, Picture Vision and All
Access. All significant intercompany transactions and balances have been
eliminated in consolidation.

REVENUE RECOGNITION--Commercial music production revenues and the related
production costs are recognized upon acceptance of the music production by the
client. Royalty and residual income is recognized when received. For projects
which are short in duration, (primarily less than one month) video production
revenues and related production costs are recorded upon completion of the video.
For projects that have a longer term, video production revenues and related
production costs are recorded using the percentage-of-completion method which
recognizes income as work on the project progresses. Musical talent management
revenues are recognized based upon the provisions of the individual management
contracts.

PROPERTY AND EQUIPMENT--Property and equipment is stated at cost less
accumulated depreciation and amortization. Depreciation and amortization is
computed as follows:

<TABLE>
<CAPTION>
ESTIMATED
ASSET USEFUL LIVES PRINCIPAL METHOD
- ----------------------------------------------------- ---------------- --------------------
<S> <C> <C>

Furniture, fixtures and equipment 5-7 Years Declining-balance

Leasehold improvements Term of Lease Straight-line
</TABLE>

DEFERRED REGISTRATION COSTS--The Company has incurred and will be incurring
additional costs relating to its proposed public offering (SEE NOTE 5). If the
offering is successful, these costs will be charged to capital in excess of par
value. If the offering is not successful, the costs will be charged to
operations.

IMPAIRMENT OF LONG-LIVED ASSETS--The Company periodically assesses the
recoverability of the carrying amount of long-lived assets, including intangible
assets. A loss is recognized when expected future cash flows (undiscounted and
without interest) are less than the carrying amount of the asset. The

F-7
<PAGE>
PARADISE MUSIC & ENTERTAINMENT, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
impairment loss is determined as the difference by which the carrying amount of
the asset exceeds its fair value.

INCOME TAXES--Rave and All Access were "S" corporations prior to the
execution of the exchange agreement and, as a result, earnings and losses have
been included in the personal income tax returns of the respective stockholders.
Accordingly, no provision for federal income tax or benefits from operating
losses has been reflected in the consolidated financial statements for these
subsidiaries.

The Company complies with Statement of Financial Accounting Standards No.
109 (SFAS 109), "Accounting for Income Taxes", which requires an asset and
liability approach to financial reporting of income taxes. Deferred income tax
assets and liabilities are computed annually for differences between financial
statement and tax bases of assets and liabilities that will result in taxable or
deductible amounts in the future, based on enacted tax laws and rates applicable
to the periods in which the differences are expected to effect taxable income.
Valuation allowances are established, when necessary, to reduce the deferred
income tax assets to the amount expected to be realized.

NET INCOME (LOSS) PER COMMON SHARE--Net income (loss) per common share is
computed based on net income (loss) applicable to common shareholders divided by
the weighted average number of common shares outstanding. The weighted average
includes shares issued within one year of the Company's proposed initial public
offering (IPO) with an issue price less than the IPO price, using the treasury
stock method.

FAIR VALUE OF FINANCIAL INSTRUMENTS--The fair value of the Company's assets
and liabilities which qualify as financial instruments under SFAS No. 107
approximate the carrying amounts presented in the consolidated balance sheet.

USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

NOTE 3--PROPERTY AND EQUIPMENT:

Property and equipment is comprised of the following:

<TABLE>
<S> <C>
Furniture, fixtures and equipment................................. $ 191,823

Leasehold improvements............................................ 33,746
---------

225,569

Less accumulated depreciation and amortization.................... 141,415
---------

$ 81,154
---------
---------
</TABLE>

F-8
<PAGE>
PARADISE MUSIC & ENTERTAINMENT, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3--PROPERTY AND EQUIPMENT: (CONTINUED)
Certain property and equipment was jointly purchased by Rave and an
unaffiliated company. Rave recorded 50% of the purchase price (approximately
$75,000) as an asset. At June 30, 1996, the asset was fully depreciated.

NOTE 4--COMMITMENTS AND CONTINGENCIES:

On October 9, 1996, the Company entered into employment contracts with four
of the Company's executives (SEE NOTE 8).

On October 9, 1996, the Company entered into an expense allocation agreement
with Rave, Picture Vision, All Access, and the Company's Treasurer (SEE NOTE 8).

Rave rents office and commercial music recording studio space pursuant to a
sublease arrangement at an annual rate of $50,000, which expires in May 1997.
All Access and Picture Vision rent office space under leases which expire
between 1997 and 2001 and provide for future aggregate minimum annual rent,
exclusive of common area and other expenses, as follows:

<TABLE>
<S> <C>
Year ending June 30:

1997........................................................ $ 93,000

1998........................................................ 17,000

1999........................................................ 17,000

2000........................................................ 17,000

2001........................................................ 3,000
---------

$ 147,000
---------
---------
</TABLE>

Rent expense approximated $114,000 and $107,000 for the years ended June 30,
1996 and 1995, respectively.

NOTE 5--PROPOSED PUBLIC OFFERING:

On May 22, 1996, the Company signed a letter of intent with an investment
banking firm for the purpose of underwriting an initial public offering for the
sale of 1,000,000 units at $6 to $7 per unit. Each unit consists of one share of
common stock and redeemable common stock purchase warrant with two warrants
entitling the holder to purchase one share of common stock.

F-9
<PAGE>
PARADISE MUSIC & ENTERTAINMENT, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6--INCOME TAXES:

The provision for income taxes consists of the following:

Current:

Federal.............................................................. $ 5,500 $ --

State................................................................ 2,000
---------- ---------

7,500 --
---------- ---------

Deferred:

Federal.............................................................. 2,000

State................................................................ 1,000
---------- ---------

3,000 --
---------- ---------

Total.................................................................. $ 10,500 $ --
---------- ---------
---------- ---------
</TABLE>

The tax effect of temporary differences at June 30, 1996 and 1995 is as
follows:

Net operating loss carryforwards..................................... $ -- $ 14,000

Current provision for income taxes................................... (7,500)

Accrual to cash accounting........................................... (3,000) 8,000
---------- ---------

(10,500) 22,000

Valuation allowance.................................................. (22,000)
---------- ---------

Total current and deferred income tax liability...................... $ (10,500) $ --
---------- ---------
---------- ---------
</TABLE>

F-10
<PAGE>
PARADISE MUSIC & ENTERTAINMENT, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6--INCOME TAXES: (CONTINUED)
The following reconciles the computed income tax expense (credit) at the
federal statutory rate to the actual provision for income taxes.

Computed tax expense (credit) at federal statutory rate.................... 34.00% (34.00)%

State provision less federal benefit....................................... 5.10 (5.10)

Surtax and other........................................................... (4.60) 16.60

Non-taxable income resulting from Subchapter "S" election.................. (22.60)

Valuation allowance........................................................ 22.50
--------- ---------

11.90% --
--------- ---------
--------- ---------
</TABLE>

NOTE 7--ECONOMIC DEPENDENCY:

Approximately $365,000 and $413,000 of commercial music production revenues
for the years ended June 30, 1996 and 1995, respectively, are derived from one
advertising agency. Approximately $700,000 and $185,000 of musical talent
management revenues for the years ended June 30, 1996 and 1995, respectively,
are derived from two musical artists. For the years ended June 30, 1996 and
1995, approximately $518,000 and $778,000, respectively, of video production
revenues were derived from two artists. At June 30, 1996, approximately $21,000
was owed in the aggregate to the Company from these artists and customers.

NOTE 8--SUBSEQUENT EVENTS:

On October 9, 1996, the Company completed a private placement for the sale
of 70,000 shares of its common stock for $210,000 ($3.00 per share), prior to
deducting fees and expenses of approximately $15,000. All share amounts give
effect to this transaction.

On October 8, 1996, the Board of Directors adopted and the stockholders
approved the Option Plan. The Option Plan provides for the grant of incentive
stock options ("ISOs") (within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), non-qualified stock options
("NQSOs") to certain directors, agents and employees of, and consultants to, the
Company and Stock Appreciation Rights (SARs). The Option Plan further provides
for the grant of NQSOs to directors, agents of, and consultants to, the Company,
whether or not employees of the Company. The purpose of the Option Plan is to
attract and retain exemplary employees, agents, consultants and directors.
Options and SARs granted under the Option Plan may not be exercisable for terms
in excess of 10 years from the date of grant. In addition, no options or SARs
may be granted under the Option Plan later than 10 years after the Option Plan's
effective date. The total number of shares of Common Stock with respect to which
options and SARs will be granted under the Option Plan is 185,000. The shares
subject to and available under the Option Plan may consist, in whole or in part,
of authorized but unissued stock or treasury stock not reserved for any other
purpose. Any shares subject to an option or SAR that terminates, expires or

F-11
<PAGE>
PARADISE MUSIC & ENTERTAINMENT, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8--SUBSEQUENT EVENTS: (CONTINUED)
lapses for any reason, and any shares purchased pursuant to an option and
subsequently repurchased by the Company pursuant to the terms of the option,
shall again be available for grant under the Option Plan.

On October 9, 1996, the Company issued 873,000 shares of its common stock in
exchange for the outstanding stock of Rave, Picture Vision and All Access in a
transaction accounted for as a pooling of interests. the accompanying
consolidated financial statements for all periods prior to the exchange were
restated to reflect the consolidated operations of the Company's.

On October 9, 1996 the Company entered into employment contracts (the
"Contracts") with four of its executives. Each of these contracts is for a
period of three years and provides for annual base salary of $150,000. In
addition several bonus plans have been established for the benefit of the
executives. Bonuses will be granted on a subsidiary basis to the extent that
certain pre-determined earnings levels are met. A second bonus plan equal to 10%
of net profits has been established. Awards under this bonus plan will be
determined by the Compensation Committee. In addition a special projects bonus
plan has been established as an incentive for successful consummation of
designated special projects. These special projects must be pre-designated by
the Company and will provide for a bonus calculated on an annual basis equal to
15% of the adjusted special projects net profits (as defined in the plan) plus
15% of future royalty revenue. The Company has also established a Record Label
Bonus Plan which provides for bonus payments based on cumulative net profits (as
defined in the plan) of the recorded music business. Under this plan $250,000
will be paid in the first fiscal year in which cumulative net profits exceed
$1,000,000. An additional bonus of $250,000 will be paid in the first fiscal
year in which cumulative net profits exceed $2,000,000 and an additional bonus
of $100,000 will be paid in the first fiscal year in which cumulative net
profits exceed $2,400,000, up to an aggregate maximum of $600,000. No bonus
under the Record Label Bonus Plan shall be payable with respect to any fiscal
year after the fiscal year ending June 30, 2001. Two of the executives are
entitled to receive an initial advance of $56,250 with quarterly advances
thereafter as approved by the Compensation Committee, such advances to be offset
against these bonuses and one executive is entitled to receive an initial
advance of $50,000, to be offset against these bonuses and one executive is
entitled to receive an initial advance of $112,500 with quarterly advances
thereafter as approved by the Compensation Committee, such advances to be offset
against these bonuses.

On October 9, 1996, the Company entered into an expense allocation agreement
with Rave, Picture Vision, All Access, and the Company's Treasurer. The expense
allocation agreement provides that if the IPO is not consummated, or one or more
of Rave, Picture Vision, All Access or the Treasurer withdraws from the Company,
each non-participant will be liable, on a pro-rata basis, for up to $41,667,
other than the Treasurer whose maximum liability is $25,000.

On October 9, 1996, the Company issued 4,000 shares of its common stock to
an attorney. As a result, deferred registration costs will increase by $12,000.

F-12
<PAGE>
PARADISE MUSIC & ENTERTAINMENT, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9--FINANCIAL DATA BY SUBSIDIARY:

The following financial data is presented for the Company's subsidiaries for
the years ended June 30, 1996 and 1995.

<TABLE>
<CAPTION>
1995
-------------------------------

ALL PICTURE
RAVE ACCESS VISION
--------- --------- ---------
<S> <C> <C> <C>

Total revenues.............................. $ 804,041 $ 185,817 $2,389,990

Net income (loss)........................... 55,637 (29,351) (128,784)
</TABLE>

<TABLE>
<CAPTION>
1996
-------------------------------

ALL PICTURE
RAVE ACCESS VISION
--------- --------- ---------
<S> <C> <C> <C>

Total revenues.............................. $ 820,835 $ 726,969 $2,090,388

Net income (loss)........................... (6,731) 48,954 35,565
</TABLE>

Total revenue, and net income (loss) include 10 months of activity in 1995
for All Access.

F-13
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR BY THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES OFFERED HEREBY BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----------
<S> <C>
Prospectus Summary............................. 3
Risk Factors................................... 7
Use of Proceeds................................ 14
Dividend Policy................................ 15
Dilution....................................... 16
Capitalization................................. 17
Selected Consolidated Financial and Operating
Data......................................... 18
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................... 19
Business....................................... 22
Management..................................... 32
Principal Stockholders......................... 38
Certain Transactions........................... 39
Offering by Selling Stockholders............... 39
Description of Securities...................... 40
Shares Eligible for Future Sale................ 43
Underwriting................................... 45
Legal Matters.................................. 46
Experts........................................ 46
Additional Information......................... 47
Index to Financial Statements.................. F-1
</TABLE>

------------------------

UNTIL , 1996 (25 DAYS FROM THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITER AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

1,000,000 UNITS

CONSISTING OF
1,000,000 SHARES OF COMMON STOCK
AND 1,000,000 REDEEMABLE
COMMON STOCK WARRANTS

PARADISE MUSIC &
ENTERTAINMENT, INC.

---------------------

PROSPECTUS

---------------------

DONALD & CO.
SECURITIES INC.

, 1996

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ALTERNATE PROSPECTUS PAGE
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS

PARADISE MUSIC & ENTERTAINMENT, INC.

70,000 SHARES OF COMMON STOCK

This Prospectus relates to 70,000 shares of common stock, $.01 par value per
share (the "Common Stock"), of Paradise Music & Entertainment, Inc. (the
"Company"). See "Selling Stockholders." The holders of the Common Stock are
referred to herein collectively as the "Selling Stockholders." The Common Stock
held by such Selling Stockholders are referred to herein collectively as the
"Selling Stockholder Securities." See "Selling Stockholders and Plan of
Distribution."

The securities offered by this Prospectus may be sold form time to time by
the Selling Stockholders or by their transferees. The distribution of the
securities offered hereby may be effected in one more transactions that may take
place on the over-the-counter market, including ordinary brokers' transactions,
privately negotiated transactions or through sales to one or more dealers for
resale of such securities as principals, at market prices prevailing at the time
of sale, at prices related to such prevailing market prices or at negotiated
prices. Usual and customary or specifically negotiated brokerage fees or
commissions may be paid by the Selling Stockholders.

The Selling Stockholders, and intermediaries through whom such securities
are sold, may be deemed underwriters within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), with respect to the securities offered,
and any profits realized or commissions received may be deemed underwriting
compensation. The Company has agreed to indemnify the Selling Stockholders
against certain liabilities, including liabilities under the Securities Act.

The Company will not receive any of the proceeds form the sale of securities
by the Selling Stockholders.

On , 1996, a registration statement under the Securities Act with
respect to a public offering by the Company (the "Offering") underwritten by the
Underwriters of 1,000,000 Units, each Unit consisting of one share of Common
Stock and one redeemable Common Stock purchase warrant, was declared effective
by the Securities and Exchange Commission (the "Commission"). The Company will
receive approximately $ in net proceeds from the Offering (assuming no
exercise of the Representative's over-allotment option) after payment of
underwriting discounts and commissions and estimated expense of the Offering.

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A SUBSTANTIAL
DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FACTORS SET
FORTH UNDER "RISK FACTORS."

---------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

------------------------

The date of this Prospectus is , 1996.
<PAGE>
ALTERNATE PROSPECTUS PAGE

PUBLIC OFFERING

On the date of this Prospectus, a Registration Statement was declared
effective under the Securities Act with respect to an underwritten offering of
1,150,000 Units, including a 45 day option granted to the Representative by the
Company to purchase 150,000 Units (the "Over-Allotment Option"), by the Company,
each Unit consisting of one share of Common Stock and one Warrant. Two Warrants
entitle the holder thereof to purchase, at an exercise price of $ per share
(subject to adjustment), one share of Common Stock.

SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION

An aggregate of up to 70,000 shares of Common Stock may be offered by
certain stockholders.

The following table sets forth certain information with respect to each
Selling Stockholder for whom the Company is registering securities for resale to
the public. The Company will not receive any of the proceeds from the sale of
such securities. Except as set forth below, there are no material relationships
between any of the Selling Stockholders and the Company, nor have any such
material relationships existed within the past three years, except as specified
below.

<TABLE>
<CAPTION>
NUMBER OF SHARES OF COMMON
STOCK BENEFICIALLY OWNED AND
MAXIMUM NUMBER OF SHARES OF
SELLING STOCKHOLDERS COMMON STOCK TO BE SOLD
- ---------------------------------------------------------------- -----------------------------
<S> <C>
Thomas Bergen................................................... 2,600
Paul Thomas Cohen(1)............................................ 8,000
Louis Cortelizza................................................ 8,000
Thomas J. Edelman(1)............................................ 8,000
Walter M. Epstein(2)............................................ 6,200
Kenneth C. Kehoe................................................ 8,000
Dr. Jay Loeffler(3)............................................. 2,600
John Loeffler Jody A. Loeffler JTWROS(4)........................ 8,000
Charles Moss.................................................... 8,000
John Reetz, Jr.................................................. 8,000
John Siegler.................................................... 2,600
------
Total........................................................... 70,000
</TABLE>

- ------------------------

(1) Is a Director of the Company.

(2) Is legal counsel to the Company.

(3) Dr. Jay Loeffler is the brother of John Loeffler, the President of the
Company.

(4) John Loeffler and Jody A. Loeffler are the parents of John Loeffler, the
President of the Company.

Selling Stockholders may effect such transactions by selling their
securities directly to purchasers, through broker-dealers acting as agents for
the Selling Stockholders or to broker-dealers who may purchase shares as
principals and thereafter sell the securities from time to time in the
over-the-counter market, in negotiated transactions or otherwise. Such
broker-dealers, if any, may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or the purchasers
for whom such broker-dealer may act as agents or to whom they may sell as
principals or otherwise (which compensation as to a particular broker-dealer may
exceed customary commissions).
<PAGE>
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Selling Stockholder Securities may not
simultaneously engage in market making activities with respect to any securities
of the Company for a period of at least two (and possibly nine) business days
prior to the commencement of such distribution. Accordingly, in the event the
Representative is engaged in a distribution of the Selling Stockholders
Securities, the Representative will not be able to make a market in the
Company's securities during the applicable restrictive period. However, the
Representative has not agreed to and is not obliged to act as broker/dealer in
the sale of the Selling Stockholder Securities and the Selling Stockholders may
be required, and in the event the Representative is a market maker, will likely
be required, to sell such securities through another broker/dealer. In addition,
each Selling Stockholder desiring to sell Securities will be subject to the
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including without limitation Rules 10b-6 and 10b-7, which provisions
may limit the timing of the purchases and sales of share of the Company's
securities by such Selling Stockholders.

The Selling Stockholders and broker-dealers, if any, acting in connection
with such sales might be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act and any commission or profit on the resale
of the securities received by them might be deemed to be underwriting discounts
and commissions under the Securities Act.
<PAGE>
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
[ALTERNATE BACK COVER]

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----------
<S> <C>
Prospectus Summary.............................
Risk Factors...................................
Use of Proceeds................................
Dividend Policy................................
Dilution.......................................
Capitalization.................................
Selected Consolidated Financial and Operating
Data.........................................
Management's Discussion and Analysis of
Financial Condition and Results of
Operations...................................
Business.......................................
Management.....................................
Principal Stockholders.........................
Certain Transactions...........................
Public Offering................................
Description of Securities......................
Shares Eligible for Future Sale................
Selling Stockholders and Plan Distribution.....
Legal Matters..................................
Experts........................................
Additional Information.........................
Index to Financial Statements.................. F-1
</TABLE>

------------------------

70,000 SHARES OF COMMON STOCK

PARADISE MUSIC &
ENTERTAINMENT, INC.

---------------------

PROSPECTUS

---------------------

DONALD & CO.
SECURITIES INC.

, 1996

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following are the estimated expenses (other than underwriting discounts
and commissions) of the issuance and distribution of the securities being
registered, all of which will be paid by Paradise Music & Entertainment, Inc.
(the "Registrant").

<TABLE>
<S> <C>
SEC registration fee........................................... $ 4,412.19
NASD filing fee................................................ $ 1,956.01
Representative's Non-Accountable Expense Allowance............. $180,000.00
Nasdaq application fee......................................... $10,000.00
Boston Stock Exchange application fee.......................... $10,000.00
Printing expenses.............................................. $60,000.00
Fees and expenses of counsel................................... $165,000.00
Fees and expenses of accountants............................... $100,000.00
Transfer agent and registrar fees.............................. $ 3,500.00
Blue sky fees and expenses..................................... $35,000.00
Miscellaneous.................................................. $30,131.80
----------
Total...................................................... $600,000.00
----------
----------
</TABLE>

The Registrant intends to pay all expenses of registration, issuance and
distribution, excluding underwriters' discounts, with respect to the shares
being sold by the Registrant.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Under Section 145 of the Delaware General Corporation Law (the "DGCL"), the
Registrant has broad powers to indemnify its directors, officers and other
employees. This section (i) provides that the statutory indemnification and
advancement of expenses provisions of the DGCL are not exclusive, provided that
no indemnification may be made to or on behalf of any director or officer if a
judgment or other final adjudication adverse to the director or officer
establishes that his acts were committed in bad faith or were the result of
active and deliberate dishonesty and were material to the cause of action so
adjudicated, or that he personally gained in fact a financial profit or other
advantage to which he was not legally entitled, (ii) establishes procedures for
indemnification and advancement of expenses that may be contained in the
certificate of incorporation or by-laws, or, when authorized by either of the
foregoing, set forth in a resolution of the stockholders or directors or an
agreement providing for indemnification and advancement of expenses, (iii)
applies a single standard for statutory indemnification for third-party and
derivative suits by providing that indemnification is available if the director
or officer acted in good faith, for a purpose which he reasonably believed to be
in the best interests of the corporation, and, in criminal actions, had no
reasonable cause to believe that his conduct was unlawful, and (iv) permits the
advancement of litigation expenses upon receipt of an undertaking to repay such
advance if the director or officer is ultimately determined not to be entitled
to indemnification or to the extent the expenses advanced exceed the
indemnification to which the director or officer is entitled. Section 145(g) the
DGCL permits the purchase of insurance to indemnify a corporation or its
officers and directors to the extent permitted.

As permitted by Section 145(e) of the DGCL, the Registrant's By-laws provide
that the Registrant shall indemnify its officers and directors, as such, to the
fullest extent permitted by applicable law, and that expenses reasonably
incurred by any such officer or director in connection with a threatened or
actual

II-1
<PAGE>
action or proceeding shall be advanced or promptly reimbursed by the Registrant
in advance of the final disposition of such action or proceeding upon receipt of
an undertaking by or on behalf of such officer or director to repay such amount
if and to the extent that it is ultimately determined that such officer or
director is not entitled to indemnification.

Article Seventh of the Registrant's Certificate of Incorporation provides
that no director of the Registrant shall be held personally liable to the
Registrant or its stockholders for damages for any breach of duty in his
capacity as a director unless a judgment or other final adjudication adverse to
him establishes that (1) he breached his duty of loyalty to the Registrant or
its stockholders, or (2) his acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law, or (3) he personally
gained in fact a financial profit or other advantage to which he was not legally
entitled, or (4) his acts violated Section 174 of the DGCL.

The Registrant's By-Laws provide that the Registrant will indemnify its
directors, officers and employees against judgments, fines, amounts paid in
settlement and reasonable expenses.

The Registrant intends to obtain and maintain liability insurance for the
benefit of its directors and officers.

Under the terms of the Underwriting Agreement, the Underwriters have agreed
to indemnify, under certain conditions, the Registrant, its directors, certain
of its officers and persons who control the Registrant within the meaning of the
Securities Act against certain liabilities.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On October 9, 1996 the Company entered into the Exchange Agreement, pursuant
to which it issued an aggregate of 873,000 shares of Common Stock to John
Loeffler, Jon Small, Brian Doyle and Richard Flynn in exchange for all of the
outstanding common stock of each of Rave, Picture Vision and All Access. The
Registrant claimed an exemption from the registration requirements of the
Securities Act by relying on Section 4(2) of the Securities Act, which allows
for an exemption for transactions by an issuer not involving any public
offering, and the rules and regulations promulgated thereunder.

On October 9, 1996, the Registrant issued 70,000 shares of its Common Stock
to 11 individuals in a private placement (the "Private Placement") for $3.00 per
share. There were no underwriters involved in the Private Placement. The Common
Stock in the Private Placement was issued only to Accredited Investors, as such
term is defined in the Securities Act. The Aggregate offering price of the
Private Placement was $210,000. The Registrant claimed an exemption from the
registration requirements of the Securities Act by relying on Section 4(2) of
the Securities Act, which allows for an exemption for transactions by an issuer
not involving any public offering, and the rules and regulations promulgated
thereunder.

On October 9, 1996 the Company issued 4,000 shares of Common Stock to one
individual for professional service rendered. The Registrant claimed an
exemption from the registration requirements of the Securities Act by relying on
Section 4(2) of the Securities Act, which allows for an exemption for
transactions by an issuer not involving any public offering, and the rules and
regulations promulgated thereunder.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- --------------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement*
3.1 Certificate of Incorporation of the Registrant
3.2 By-Laws of the Registrant
</TABLE>

II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- --------------------------------------------------------------------------------------------------------
<C> <S>
4.1 Specimen of Registrant's Common Stock Certificate*
4.2 Specimen of Registrant's Warrant Certificate*
4.3 Form of Representative's Warrant Agreement including form of Warrant*
4.4 Form of Warrant Agreement between Registrant and Continental Stock Transfer and Trust Company*
5.1 Opinion of Rubin Baum Levin Constant & Friedman regarding legality*
10.1 Exchange Agreement dated as of October 9, 1996 among the Registrant, Brian Doyle, Richard Flynn, John
Loeffler and Jon Small
10.2 Employment Agreement dated as of October 9, 1996 between the Registrant and Brian Doyle
10.3 Employment Agreement dated as of October 9, 1996 between the Registrant and Richard Flynn
10.4 Employment Agreement dated as of October 9, 1996 between the Registrant and John Loeffler
10.5 Employment Agreement dated as of October 9, 1996 between the Registrant and Jon Small
10.6 Expense Allocation Agreement dated as of October 9, 1996 among the Registrant, Rave, Picture Vision, All
Access and Robert Klein
10.7 Form of The Registrant's 1996 Stock Option Plan*
10.8 Lease Agreement dated June 24, 1992 between Not Just Jingles, Inc. and Newmark & Company Real Estate,
Inc.
10.9 Lease Agreement dated October 28, 1994 between the Registrant and Silk & Halpern Realty Associates, Inc.
10.10 Lease Agreement dated April 4, 1995 between the Registrant and Cummins Station L.L.C.
10.11 Sublease Agreement dated September 29, 1996 between the Registrant and Not Just Jingles, Inc.
10.12 Financial Consulting Agreement*
21.1 Subsidiaries of Registrant
23.1 Consent of Rothstein, Kass & Company, P.C.
23.2 Consent of Rubin Baum Levin Constant & Friedman (included in Exhibit 5.1)*
24.1 Power of Attorney (included with the signature page to the registration statement)
27.1 Financial Data Schedule
</TABLE>

- ------------------------

* To be filed by amendment.

(b) Financial Statement Schedules:

All Schedules are omitted because of the absence of conditions under which
they are required or because the required information is included in the
financial statements or notes thereto.

ITEM 17. UNDERTAKINGS.

(a) "The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;

(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high and of the

II-3
<PAGE>
estimated maximum offering range may be reflected in the form of prospectus
filed with the commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein and the
offering of such securities at that tine shall be deemed to be the initial BONA
FIDE offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

(b) The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of the subscription period, to set forth the
results of the subscription offer, the transactions by the underwriters during
the subscription period, the amount of unsubscribed securities to be purchased
by the underwriters, and the terms of any subsequent reoffering thereof. If any
public offering by the underwriters is to be made on terms differing from those
set forth on the cover page of the prospectus, a post-effective amendment will
be filed to set forth the terms of such offering.

(c) The undersigned registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.

(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the act and will be governed by the final adjudication of
such issue.

(e) The undersigned registrant hereby undertakes that

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
thereon, and the offering of such securities at that tine shall be deemed to be
the initial BONA FIDE offering thereof.

II-4
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, New York on
October 9, 1996.

PARADISE MUSIC & ENTERTAINMENT, INC.

BY: /S/ JOHN LOEFFLER
-----------------------------------------
John Loeffler
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF
EXECUTIVE OFFICER

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby severally constitutes and appoints John Loeffler and Walter M.
Epstein, and each of them, his true and lawful attorneys-in-fact and agents,
each acting alone, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement
and all documents relating thereto, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, each
acting alone full power and authority to do and perform each and every act and
thing necessary or advisable to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and power of attorney have been signed by the following
persons in the capacities and on the dates indicated:

SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------

/s/ JOHN LOEFFLER Chairman of the Board, October 9, 1996
- ------------------------------ President and Chief
John Loeffler Executive Officer
(Principal Executive
Officer)

/s/ JON SMALL Executive Vice President, October 9, 1996
- ------------------------------ and Director
Jon Small

/s/ BRIAN DOYLE Executive Vice President October 9, 1996
- ------------------------------ and Director
Brian Doyle

/s/ ROBERT KLEIN Treasurer and Director October 9, 1996
- ------------------------------ (Principal Financial and
Robert Klein Accounting Officer)

/s/ RICHARD FLYNN Executive Vice President, October 9, 1996
- ------------------------------ Secretary and Director
Richard Flynn

/s/ PAUL THOMAS COHEN Director October 9, 1996
- ------------------------------
Paul Thomas Cohen

Director October 9, 1996
- ------------------------------
Thomas J. Edelman

II-5

<PAGE>

CERTIFICATE OF INCORPORATION
OF
PARADISE MUSIC & ENTERTAINMENT, INC.

(A Delaware corporation)

FIRST: The name of the Corporation is:
Paradise Music & Entertainment, Inc.

SECOND: The address of the registered office of the Corporation in
the State of Delaware is c/o United Corporate Services, Inc., 15 East North
Street, City of Dover, County of Kent. The name of its registered agent at such
address is United Corporate Services, Inc.

THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.

FOURTH: The total number of shares of all classes of capital stock
which the Corporation shall have the authority to issue is 25,000,000 shares
divided into two classes of which 5,000,000 shares of par value $.01 per share
shall be designated Preferred Stock and 20,000,000 shares of par value $.01 per
share shall be designated Common Stock.

(a) The Board of Directors of the Corporation is authorized, subject
to limitations prescribed by law and the provisions of this Article FOURTH, to
provide for, from time to time, in one or more series of any number, the
issuance of shares of Preferred Stock, and, by filing a certificate pursuant to
the General Corporation Law of the State of Delaware, to establish the number of
shares to be included in each such series and to fix the designation, relative
rights, preferences, qualifications and limitations of the shares of each such
series. The authority of the Board of Directors with respect to each series
shall include, but not be limited to, determination of each of the following:

1. The number of shares constituting that series and the
distinctive designation of that series;

2. The dividend rate on the shares of the series, whether
dividends shall be cumulative and, if so, from which date or dates, and whether
they shall be payable in preference to, or in another relation to, the dividends
payable on any other class or classes or series of stock;

3. Whether that series shall have voting rights, in addition to
the voting rights provided by law, and, if so, the terms of such voting rights;

<PAGE>

4. Whether that series shall have conversion or exchange
privileges, and, if so, the terms and conditions of such conversion or exchange,
including provision for adjustment of the conversion or exchange rate in such
events as the Board of Directors shall determine;

5. Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such redemption, including
the manner of selecting shares for redemption if less than all such shares are
to be redeemed, the date or dates upon or after which they shall be redeemable,
and the amount per share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates;

6. Whether that series shall be entitled to the benefit of a
sinking fund to be applied to the purchase or redemption of shares of that
series and, if so, the terms and amounts of such sinking fund;

7. The right of the shares of the series to the benefit of
conditions and restrictions upon the creation of indebtedness of the Corporation
or any subsidiary upon the issue of any additional stock (including additional
shares of such series or of any other series) and upon the payment of dividends
or the making of other distributions on and the purchase, redemption or other
acquisition by the Corporation or any subsidiary of, any outstanding stock of
the Corporation;

8. The right of the shares of that series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation and whether such rights shall be in preference to or in another
relation to the comparable rights of any other class or classes or series of
stock; and

9. Any other relative, participating optional or other special,
rights, qualifications, limitations or restrictions of that series.

(b) Shares of any series of Preferred Stock which have
been redeemed (whether through the operation of a sinking fund or otherwise) or
which, if convertible or exchangeable, have been converted into or exchanged for
shares of stock of any other class or classes, shall have the status of
authorized and unissued shares of Preferred Stock of the same series and may be
reissued as a part of the series of which they were originally a part or may be
reclassified and reissued as part of any other series of Preferred Stock or of a
new series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors, all subject to the conditions and restrictions on issuance
set forth in the resolution or resolutions adopted by the Board of Directors
providing for the issue of any series of Preferred Stock.

2
<PAGE>

(c) Except as otherwise provided by the resolution or resolutions
providing for the issue of any series of Preferred Stock, after payment shall
have been made to the holders of Preferred Stock of the full amount of dividends
to which they shall be entitled pursuant to the resolution or resolutions
providing for the issuance of any series of Preferred Stock, the holders of
Common Stock shall be entitled, to the exclusion of the holders of Preferred
Stock of any and all series, to receive such dividends as from time to time may
be declared by the Board of Directors out of any funds legally available
therefor.

(d) Except as otherwise provided by the resolution or resolutions
providing for the issue of any series of Preferred Stock, in the event of any
liquidation, dissolution of winding up of the Corporation, whether voluntary or
involuntary, the holders of Common Stock shall be entitled, after payment shall
have been made to the holders of Preferred Stock of the full amount to which
they shall be entitled pursuant to the resolution or resolutions providing for
the issuance of any series of Preferred Stock, to share, to the exclusion of the
holders of Preferred Stock of any and all series, in all remaining assets of the
Corporation available for distribution to its stockholders ratably according to
the number of shares of Common Stock held by them.

(e) Except as otherwise provided by statute or by any express
provision of this Certificate or as otherwise provided by the resolution or
resolutions providing for the issue of any series of Preferred Stock, all rights
to vote and all voting power shall be exclusively vested in the Common Stock and
the holders thereof shall be entitled to one vote for each share of Common Stock
for the election of directors and upon all other matters.

(f) The Corporation shall be entitled to treat the person in whose
name any share, right or option is registered as the owner thereof, for all
purposes, and shall not be bound to recognize any equitable or other claim to or
interest in such share, right or option on the part of any other person, whether
or not the Corporation shall have notice thereof, save as may be expressly
provided by the laws of the State of Delaware.

FIFTH: The name and mailing address of the sole incorporator is as
follows:

NAME MAILING ADDRESS

H. Leigh Feldman 30 Rockefeller Plaza, 29th Floor
New York, New York 10112

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SIXTH: (a) The number of directors of the Corporation which shall
constitute the whole Board of Directors of the Corporation shall be such as from
time to time may be fixed by or in the manner provided in the By-laws, but in no
case shall the number of directors be less than one. Except as may otherwise be
required by law, vacancies in the Board of Directors of the Corporation and
newly created directorships resulting from any increase in the authorized number
of directors may be filled by a majority of the directors then in office, though
less than a quorum, or by a sole remaining director.

(b) All corporate powers of the Corporation shall be exercised by the
Board of Directors except as otherwise provided herein or by law. In
furtherance of the powers conferred by statute and by law, the Board of
Directors shall have the power to adopt, alter, amend or repeal the By-laws of
the Corporation, without any action on the part of the Corporation's
stockholders.

SEVENTH: (a) A director of the Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breaches
of fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation Law
of the State of Delaware, or (iv) for any transaction from which the director
derived an improper personal benefit; it being the intention of the foregoing
provision to eliminate the liability of the Corporation's directors to the
fullest extent permitted by Section 102(b)(7) of the General Corporation Law of
the State of Delaware, as amended from time to time.

(b) Any repeal or modification of the foregoing subparagraph (a) by
the stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.

(c) If the General Corporation Law of the State of Delaware is
amended after approval by the stockholders of this paragraph SEVENTH to
authorize corporate action further eliminating or limiting the personal
liability of directors, then a director of the Corporation, in addition to the
circumstances in which he is not now personally liable, shall be free of
liability to the fullest extent permitted by the General Corporation Law of the
State of Delaware as so amended.

(d) Each director, officer, employee and agent, past or present, of
the Corporation, and each person who serves or may have served at the request of
the Corporation as a director, trustee, officer, employee or agent of another
corporation, partnership,

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joint venture, trust or other enterprise, and their respective heirs,
administrators and executors, shall be indemnified by the Corporation in
accordance with, and to the fullest extent permitted by, the provisions of the
General Corporation Law of the State of Delaware as it may from time to time be
amended. The provisions of this subparagraph (d) shall apply to any member of
any committee appointed by the Board of Directors as fully as though such person
shall have been an officer or director of the Corporation.

(e) The provisions of this paragraph SEVENTH shall be in addition to
and not in limitation of any other rights, indemnities, or limitations of
liability to which any director or officer may be entitled, as a matter of law
or under the By-laws of the Corporation or any agreement, vote of stockholders
or otherwise.

EIGHTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.

NINTH: Meetings of stockholders may be held
within or without the State of Delaware, as the By-Laws may provide. The books
of the Corporation may be kept (subject to any provision contained in the
statutes) outside the State of Delaware at such place or places as may be
designated from time to time by the Board of Directors or in the By-Laws of the
Corporation. Elections of Directors need not be by written ballot unless the By-
Laws of the Corporation shall so provide.

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TENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in the Certificate of Incorporation, in the
manner now or hereafter prescribed by statute and this Certificate of
Incorporation, and all rights conferred upon officers, Directors and
stockholders herein are granted subject to this reservation.

I, THE UNDERSIGNED, being the sole incorporator hereinbefore named,
for the purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, do make this certificate, hereby declaring and
certifying that this is my act and deed and the facts herein stated are true,
and accordingly have hereunto set my hand this 18th day of July, 1996.

---------------------------------------
H. Leigh Feldman

<PAGE>

BY-LAWS OF

PARADISE MUSIC & ENTERTAINMENT, INC.

(A Delaware corporation)

ARTICLE I

Offices

SECTION 1. REGISTERED OFFICE. The registered office of the Corporation
within the State of Delaware shall be located at United Corporate Services,
Inc., 15 East North Street in the City of Dover, County of Kent.

SECTION 2. OTHER OFFICES. The Corporation may also have an office or
offices other than said registered office at such place or places, either within
or without the State of Delaware, as the Board of Directors shall from time to
time determine or the business of the Corporation may require.

ARTICLE II

Meetings of Stockholders

SECTION 1. PLACE OF MEETINGS. All meetings of the stockholders for the
election of Directors or for any other purpose shall be held at any such place,
either within or without the State of Delaware, as shall be designated from time
to time by the Board of Directors and stated in the notice of meeting or in a
duly executed waiver thereof.

SECTION 2. ANNUAL MEETING. The annual meeting of stockholders shall be
held at such date and time as shall be designated from time to time by the Board
of Directors and stated in the notice of meeting or in a duly executed waiver
thereof. At such annual meeting, the stockholders shall elect, by a plurality
vote, a Board of Directors and transact such other business as may properly be
brought before the meeting.

SECTION 3. SPECIAL MEETINGS. Special meetings of stockholders, unless
otherwise prescribed by statute, may be called at any time by the Board of
Directors or the Chairman of Chairman of the Board, if one shall have been
elected.

SECTION 4. NOTICE OF MEETINGS. Except as otherwise expressly required by
statute, written notice of each annual and special meeting of stockholders
stating the date, place and given to each stockholder of record entitled to vote
thereat not less than ten nor more than sixty days before the date of the
meeting. Business transacted at any special meeting of stockholders shall

<PAGE>

be limited to the purposes stated in the notice. Notice shall be given
personally or by mail and, if by mail, shall be sent in a postage prepaid
envelope, addressed to the stockholder at his address as it appears on the
records of the Corporation. Notice by mail shall be deemed given at the time
when the same shall be deposited in the United States mail, postage prepaid.
Notice of any meeting shall not be required to be given to any person who
attends such meeting, except when such person attends the meeting in person or
by proxy for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened, or who, either before or after the meeting, shall submit a signed
written waiver of notice, in person or by proxy. Neither the business to be
transacted at, nor the purpose of, an annual or special meeting of stockholders
need be specified in any written waiver of notice.

SECTION 5. LIST OF STOCKHOLDERS. The officer who has charge of the stock
ledger of the corporation shall prepare and make, at least ten days before each
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, showing the address of and the
number of shares registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least ten days prior
to the meeting, either at a place within the city, town or village where the
meeting is to be held, which place shall be specified in the notice of meeting,
or, if not specified, at the place where the meeting is to be held. The list
shall be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder who is present.

SECTION 6. QUORUM, ADJOURNMENTS. The holders of a majority of the voting
power of the issued and outstanding stock of the Corporation entitled to vote
thereat, present in person or represented by proxy, shall constitute a quorum
for the transaction of business at all meetings of stockholders, except as
otherwise provided by statute or by the Certificate of Incorporation. If,
however, such quorum shall not be present or represented by proxy at any meeting
of stockholders, the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have the power to adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present or represented by proxy. At such adjourned meeting at which a
quorum shall be present or represented by proxy, any business may be transacted
which might have been transacted at the meeting as originally called. If the
adjournment is for more than thirty days, or, if after adjournment a new record
date is set, a notice of the adjourned

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meeting shall be given to each stockholder of record entitled to vote at the
meeting.

SECTION 7. ORGANIZATION. At each meeting of stockholders, the Chairman of
the Board, if one shall have been elected, or, in his absence or if one shall
not have been elected, the President, shall act as chairman of the meeting. The
Secretary or, in his absence or inability to act, the person whom the chairman
of the meeting shall appoint secretary of the meeting, shall act as secretary of
the meeting and keep the minutes thereof.

SECTION 8. ORDER OF BUSINESS. The order of business at all meetings of
the stockholders shall be as determined by the chairman of the meeting.

SECTION 9. VOTING. Except as otherwise provided by statute or the
Certificate of Incorporation, each stockholder of the corporation shall be
entitled at each meeting of stockholders to one vote for each share of capital
stock of the Corporation standing in his name on the record of stockholders of
the corporation:

(a) on the date fixed pursuant to the provisions of Section 7 of
Article V of these By-Laws as the record date for the determination of
the stockholders who shall be entitled to notice of and to vote at
such meeting; or

(b) if no such record date shall have been so fixed, then at the
close of business on the day next preceding the day on which notice
thereof shall be given, or, if notice is waived, at the close of
business on the date next preceding the day on which the meeting is
held.

Each stockholder entitled to vote at any meeting of stockholders may authorize
another person or persons to act for him by a proxy signed by such stockholder
or his attorney-in-fact, but no proxy shall be voted after three years from its
date, unless the proxy provides for a longer period. Any such proxy shall be
delivered to the secretary of the meeting at or prior to the time designated in
the order of business for so delivering such proxies. When a quorum is present
at any meeting, the vote of the holders of a majority of the voting power of the
issued and outstanding stock of the corporation entitled to vote thereon,
present in person or represented by proxy, shall decide any question brought
before such meeting, unless the question is one upon which by express provision
of statute or of the certificate of incorporation or of these By-Laws, a
different vote is required, in which case such express provision shall govern
and control the decision

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of such question. Unless required by statute, or determined by the chairman of
the meeting to be advisable, the vote on any question need not be by ballot. On
a vote by ballot, each ballot shall be signed by the stockholder voting, or by
his proxy, if there by such proxy, and shall state the number of shares voted.

SECTION 10. INSPECTORS. The Board of Directors may, in advance of any
meeting of stockholders, appoint one or more inspectors to act at such meeting
or any adjournment thereof. If any of the inspectors so appointed shall fail to
appear or act, the chairman of the meeting shall, or if inspectors shall not
have been appointed, the chairman of the meeting may, appoint one or more
inspectors. Each inspector, before entering upon the discharge of his duties,
shall take and sign an oath faithfully to execute the duties of inspector at
such meeting with strict impartiality and according to the best of his ability.
The inspectors shall determine the number of shares of capital stock of the
corporation outstanding and the voting power of each, the number of shares
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the results, and do such acts
as are proper to conduct the election or vote with fairness to all stockholders.
On request of the chairman of the meeting, the inspectors shall make a report in
writing of any challenge, request or matter determined by them and shall execute
a certificate of any fact found by them. No director or candidate for the
office of director shall act as an inspector of an election of Directors.
Inspectors need not be stockholders.

SECTION 11. ACTION BY CONSENT. Whenever the vote of stockholders at a
meeting thereof is required or permitted to be taken for or in connection with
any corporate action, by any provision of statute or of the Certificate of
Incorporation or of these By-Laws, the meeting and vote of stockholders may be
dispensed with, and the action taken without such meeting and vote, if a consent
in writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares of
stock of the corporation entitled to vote thereon were present and voted.

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<PAGE>

ARTICLE III

Board of Directors

SECTION 1. GENERAL POWERS. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors. The Board
of Directors may exercise all such authority and powers of the corporation and
do all such lawful acts and things as are not by statute or the Certificate of
Incorporation directed or required to be exercised or done by the stockholders.

SECTION 2. NUMBER, QUALIFICATIONS, ELECTION AND TERM OF OFFICE. The
number of Directors constituting the initial Board of Directors shall be as
determined in the resolutions of the Incorporator of the Corporation electing
the Initial Board of Directors. Thereafter, the number of Directors may be
fixed, from time to time, by the affirmative vote of a majority of the entire
Board of Directors or by action of the stockholders of the Corporation. Any
decrease in the number of Directors shall be effective at the time of the next
succeeding annual meeting of stockholders unless there shall be vacancies in the
Board of Directors, in which case such decrease may become effective at any time
prior to the next succeeding annual meeting to the extent of the number of such
vacancies. Directors need not be stockholders. Except as otherwise provided by
statute or these By-Laws, the Directors (other than members of the initial Board
of Directors) shall be elected at the annual meeting of stockholders. Each
director shall hold office until his successor shall have been elected and
qualified, or until his death, or until he shall have resigned, or have been
removed, as hereinafter provided in these By-Laws.

SECTION 3. PLACE OF MEETINGS. Meetings of the Board of Directors shall be
held at such place or places, within or without the State of Delaware, as the
Board of Directors may from time to time determine or as shall be specified in
the notice of any such meeting.

SECTION 4. ANNUAL MEETING. The Board of Directors shall meet for the
purpose of organization, the election of officers and the transaction of other
business, as soon as practicable after each annual meeting of stockholders, on
the same day and at the same place where such annual meeting shall be held.
Notice of such meeting need not be given. In the event such annual meeting is
not so held, the annual meeting of the Board of Directors may be held at such
other time or place (within or without the State of Delaware) as shall be
specified in a notice thereof given as hereinafter provided in Section 7 of this
Article III.

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SECTION 5. REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held at such time and place as the Board of Directors may fix. If any
day fixed for a regular meeting shall be a legal holiday at the place where the
meeting is to be held, then the meeting which would otherwise be held on that
day shall be held at the same hour on the next succeeding business day. Notice
of regular meetings of the Board of Directors need not be given except as
otherwise required by statute or these By-Laws.

SECTION 6. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by the Chairman of the Board, if one shall have been elected, or
by two or more Directors of the corporation or by the President.

SECTION 7. NOTICE OF MEETINGS. Notice of each special meeting of the
Board of Directors (and of each regular meeting for which notice shall be
required) shall be given by the Secretary as hereinafter provided in this
Section 7, in which notice shall be stated the time and place of the meeting.
Except as otherwise required by these By-Laws, such notice need not state the
purposes of such meeting. Notice of each such meeting shall be mailed, postage
prepaid, to each director, addressed to him at his residence or usual place of
business, by first class mail, at least two days before the day on which such
meeting is to be held, or shall be sent addressed to him at such place by
telegraph, cable, telex, telecopier or other similar means, or be delivered to
him personally or be given to him by telephone or other similar means, at least
twenty-four hours before the time at which such meeting is to be held. Notice
of any such meeting need not be given to any director who shall, either before
or after the meeting, submit a signed waiver of notice or who shall attend such
meeting, except when he shall attend for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.

SECTION 8. QUORUM AND MANNER OF ACTING. A majority of the entire Board of
Directors shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, and, except as otherwise expressly required
by statute or the Certificate of Incorporation or these By-Laws, the act of a
majority of the Directors present at any meeting at which a quorum is present
shall be the act of the Board of Directors. In the absence of a quorum at any
meeting of the Board of Directors, a majority of the Directors present thereat
may adjourn such meeting to another time and place. Notice of the time and
place of any such adjourned meeting shall be given to all of the Directors
unless such time and place were announced at the meeting at which the
adjournment was taken, in which case such notice shall only be given to the
Directors who were not present

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thereat. At any adjourned meeting at which a quorum is present, any business
may be transacted which might have been transacted at the meeting as originally
called. The Directors shall act only as a Board and the individual Directors
shall have no power as such.

SECTION 9. ORGANIZATION. At each meeting of the Board of Directors, the
Chairman of the Board, if one shall have been elected, or, in the absence of the
Chairman of the Board or if one shall not have been elected, the President (or,
in his absence, another director chosen by a majority of the Directors present)
shall act as chairman of the meeting and preside thereat. The Secretary or, in
his absence, any person appointed by the chairman shall act as secretary of the
meeting and keep the minutes thereof.

SECTION 10. RESIGNATIONS. Any director of the Corporation may resign at
any time by giving written notice of his resignation to the Corporation. Any
such resignation shall take effect at the time specified therein or, if the time
when it shall become effective shall not be specified therein, immediately upon
its receipt. Unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.

SECTION 11. VACANCIES. Any vacancy in the Board of Directors, whether
arising from death, resignation, removal (with or without cause), an increase in
the number of Directors or any other cause, may be filled by the vote of a
majority of the Directors then in office, though less than a quorum, or by the
sole remaining director or by the stockholders at the next annual meeting
thereof or at a special meeting thereof. Each director so elected shall hold
office until his successor shall have been elected and qualified.

SECTION 12. REMOVAL OF DIRECTORS. Any director may be removed, either
with or without cause, at any time, by the holders of a majority of the voting
power of the issued and outstanding capital stock of the Corporation entitled to
vote at an election of Directors.

SECTION 13. COMPENSATION. The Board of Directors shall have authority to
fix the compensation, including fees and reimbursement of expenses, of Directors
for services to the Corporation in any capacity.

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SECTION 14. COMMITTEES. The Board of Directors may, by resolution passed
by a majority of the entire Board of Directors, designate one or more
committees, including an executive committee, each committee to consist of one
or more of the Directors of the Corporation. The Board of Directors may
designate one or more Directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
addition, in the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.

Except to the extent restricted by statute or the Certificate of
Incorporation, each such committee, to the extent provided in the resolution
creating it, shall have and may exercise all the powers and authority of the
Board of Directors and may authorize the seal of the Corporation to be affixed
to all papers which require it. Each such committee shall serve at the pleasure
of the Board of Directors and have such name as may be determined from time to
time by resolution adopted by the Board of Directors. Each committee shall keep
regular minutes of its meetings and report the same to the Board of Directors.

SECTION 15. ACTION BY CONSENT. Unless restricted by the Certificate of
Incorporation, any action required or permitted to be taken by the Board of
Directors or any committee thereof may be taken without a meeting if all members
of the Board of Directors or such committee, as the case may be, consent thereto
in writing, and the writing or writings are filed with the minutes of the
proceedings of the Board of Directors or such committee, as the case may be.

SECTION 16. TELEPHONIC MEETING. Unless restricted by the Certificate of
Incorporation, any one or more members of the Board of Directors or any
committee thereof may participate in a meeting of the Board of Directors or such
committee by a conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other.
Participation by such means shall constitute presence in person at a meeting.

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ARTICLE IV

Officers

SECTION 1. NUMBER AND QUALIFICATIONS. The officers of the Corporation
shall be elected by the Board of Directors and shall include the President, one
or more vice-presidents, the Secretary and the Treasurer. If the Board of
Directors wishes, it may also elect as an officer of the Corporation a Chairman
of the Board and may elect other officers (including one or more Assistant
Treasurers and one or more Assistant Secretaries) as may be necessary or
desirable for the business of the Corporation. Any two or more offices may be
held by the same person, and no officer except the Chairman of the Board need be
a director. Each officer shall hold office until his successor shall have been
duly elected and shall have qualified, or until his death, or until he shall
have resigned or have been removed, as hereinafter provided in these By-Laws.

SECTION 2. RESIGNATIONS. Any officer of the Corporation may resign at any
time by giving written notice of his resignation to the Corporation. Any such
resignation shall take effect at the time specified therein or, if the time when
it shall become effective shall not be specified therein, immediately upon
receipt. Unless otherwise specified therein, the acceptance of any such
resignation shall not be necessary to make it effective.

SECTION 3. REMOVAL. Any officer of the Corporation may be removed, either
with or without cause, at any time, by the Board of Directors at any meeting
thereof.

SECTION 4. CHAIRMAN OF THE BOARD. The Chairman of the Board, if one shall
have been elected, shall be a member of the Board, an officer of the Corporation
and, if present, shall preside at each meeting of the Board of Directors or the
stockholders. He shall advise and counsel with the President, and in his
absence with other executives of the Corporation, and shall perform such other
duties as may from time to time be assigned to him by the Board of Directors.

SECTION 5. THE PRESIDENT. The President shall be the chief executive
officer of the Corporation. He shall, in the absence of the Chairman of the
Board or if a Chairman of the Board shall not have been elected, preside at each
meeting of the Board of Directors or the stockholders. He shall perform all
duties incident to the office of President and chief executive officer and such
other duties as may from time to time be assigned to him by the Board of
Directors.

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<PAGE>

SECTION 6. VICE-PRESIDENT. Each Vice-President shall perform all such
duties as from time to time may be assigned to him by the Board of Directors or
the President. At the request of the President or in his absence or in the
event of his inability or refusal to act, the Vice-President, or if there shall
be more than one, the Vice-Presidents in the order determined by the Board of
Directors (or if there be no such determination, then the Vice-Presidents in the
order of their election), shall perform the duties of the President, and, when
so acting, shall have the powers of and be subject to the restrictions placed
upon the President in respect of the performance of such duties.

SECTION 7. TREASURER. The Treasurer shall

(a) have charge and custody of, and be responsible for, all the funds
and securities of the Corporation;

(b) keep full and accurate accounts of receipts and disbursements in
books belonging to the Corporation;

(c) deposit all moneys and other valuables to the credit of the
Corporation in such depositaries as may be designated by the Board of Directors
or pursuant to its direction;

(d) receive, and give receipts for, moneys due and payable to the
Corporation from any source whatsoever;

(e) disburse the funds of the Corporation and supervise the
investments of its funds, taking proper vouchers therefor;

(f) render to the Board of Directors, whenever the Board of Directors
may require, an account of the financial condition of the Corporation; and

(g) in general, perform all duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to him by
the Board of Directors.

SECTION 8. SECRETARY. The Secretary shall

(a) keep or cause to be kept in one or more books provided for the
purpose, the minutes of all meetings of the Board of Directors, the committees
of the Board of Directors and the stockholders;

(b) see that all notices are duly given in accordance with the
provisions of these By-Laws and as required by law;

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(c) be custodian of the records and the seal of the Corporation and
affix and attest the seal to all certificates for shares of the Corporation
(unless the seal of the Corporation on such certificates shall be a facsimile,
as hereinafter provided) and affix and attest the seal to all other documents to
be executed on behalf of the Corporation under its seal;

(d) see that the books, reports, statements, certificates and other
documents and records required by law to be kept and filed are properly kept and
filed; and

(e) in general, perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the Board of Directors.

SECTION 9. THE ASSISTANT TREASURER. The Assistant Treasurer, or if there
shall be more than one, the Assistant Treasurers in the order determined by the
Board of Directors (or if there be no such determination, then in the order of
their election), shall, in the absence of the Treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties as from time to time may be
assigned by the Board of Directors.

SECTION 10. THE ASSISTANT SECRETARY. The Assistant Secretary, or if there
be more than one, the Assistant Secretaries in the order determined by the Board
of Directors (or if there be no such determination, then in the order of their
election), shall, in the absence of the Secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties as from time to time may be
assigned by the Board of Directors.

SECTION 11. OFFICERS' BONDS OR OTHER SECURITY. If required by the Board
of Directors, any officer of the Corporation shall give a bond or other security
for the faithful performance of his duties, in such amount and with such surety
as the Board of Directors may require.

SECTION 12. COMPENSATION. The compensation of the officers of the
corporation for their services as such officers shall be fixed from time to time
by the Board of Directors. An officer of the Corporation shall not be prevented
from receiving compensation by reason of the fact that he is also a director of
the corporation.

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<PAGE>

ARTICLE V

Stock Certificates and Their Transfer

SECTION 1. STOCK CERTIFICATES. Every holder of stock in the Corporation
shall be entitled to have a certificate, signed by, or in the name of the
Corporation by, the Chairman of the Board or the President or a Vice-President
and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Corporation, certifying the number of shares owned by him in
the corporation. If the Corporation shall be authorized to issue more than one
class of stock or more than one series of any class, the designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restriction of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the Corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in Section 202 of the General Corporation Law of the State of
Delaware, in lieu of the foregoing requirements, there may be set forth on the
face or back of the certificate which the Corporation shall issue to represent
such class or series of stock, a statement that the Corporation will furnish
without charge to each stockholder who so requests the designations, preferences
and relative, participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights.

SECTION 2. FACSIMILE SIGNATURES. Any or all of the signatures on a
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.

SECTION 3. LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost,
stolen, or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen, or
destroyed certificate or certificates, or his legal representative, to give the
Corporation a bond in such sum as it may direct sufficient to indemnify it
against any claim that may be made against the Corporation on account of the

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<PAGE>

alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate.

SECTION 4. TRANSFERS OF STOCK. Upon surrender to the corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its records; provided, however, that the Corporation shall be
entitled to recognize and enforce any lawful restriction on transfer. Whenever
any transfer of stock shall be made for collateral security, and not absolutely,
it shall be so expressed in the entry of transfer if, when the certificates are
presented to the Corporation for transfer, both the transferor and the
transferee request the Corporation to do so.

SECTION 5. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may
appoint, or authorize any officer or officers to appoint, one or more transfer
agents and one or more registrars.

SECTION 6. REGULATIONS. The Board of Directors may make such additional
rules and regulations, not inconsistent with these By-Laws, as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of stock of the Corporation.

SECTION 7. FIXING THE RECORD DATE. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.

SECTION 8. REGISTERED STOCKHOLDERS. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its records as the owner
of shares of stock to receive dividends and to vote as such owner, shall be
entitled to hold liable for calls and assessments a person registered on its
records as the owner of shares of stock, and shall not be bound to recognize any
equitable or other claim to or interest in such

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<PAGE>

share or shares of stock on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise provided by the
laws of Delaware.

ARTICLE VI

Indemnification of Directors and Officers

SECTION 1. GENERAL. The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

SECTION 2. DERIVATIVE ACTIONS. The Corporation shall indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, provided that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the court of Chancery of the State of
Delaware or the

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<PAGE>

court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the court of Chancery or such other court shall deem proper.

SECTION 3. INDEMNIFICATION IN CERTAIN CASES. To the extent that a
director, officer, employee or agent of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in Sections 1 and 2 of this Article VI, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

SECTION 4. PROCEDURE. Any indemnification under Sections 1 and 2 of this
Article VI (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in such Sections 1 and 2.
Such determination shall be made (a) by the Board of Directors by a majority
vote of a quorum consisting of Directors who were not parties to such action,
suit or proceeding, or (b) if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested Directors So directs, by independent legal
counsel in a written opinion, or (c) by the stockholders.

SECTION 5. ADVANCES FOR EXPENSES. Expenses incurred in defending a civil
or criminal action, suit or proceeding may be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to repay
such amount if it shall be ultimately determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article VI.

SECTION 6. RIGHTS NOT-EXCLUSIVE. The indemnification and advancement of
expenses provided by, or granted pursuant to, the other subsections of this
Article VI shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
law, by-law, agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.

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<PAGE>

SECTION 7. INSURANCE. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article VI.

SECTION 8. DEFINITION OF CORPORATION. For the purposes of this Article
VI, references to "the Corporation" include all constituent corporations
absorbed in a consolidation or merger as well as the resulting or surviving
corporation so that any person who is or was a director, officer, employee or
agent of such a constituent corporation or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise shall
stand in the same position under the provisions of this Article VI with respect
to the resulting or surviving corporation as he would if he had served the
resulting or surviving corporation in the same capacity.

SECTION 9. SURVIVAL OF RIGHTS. The indemnification and advancement of
expenses provided by or granted pursuant to this Article VI shall continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.

ARTICLE VII

General Provisions

SECTION 1. DIVIDENDS. Subject to the provisions of statute and the
Certificate of Incorporation, dividends upon the shares of capital stock of the
Corporation may be declared by the Board of Directors at any regular or special
meeting. Dividends may be paid in cash, in property or in shares of stock of the
Corporation, unless otherwise provided by statute or the Certificate of
Incorporation.

SECTION 2. RESERVES. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the Board of Directors may, from time to time, in its absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the

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<PAGE>

Corporation or for such other purpose as the Board of Directors may think
conducive to the interests of the Corporation. The Board of Directors may
modify or abolish any such reserves in the manner in which it was created.

SECTION 3. SEAL. The seal of the Corporation shall be in such form as
shall be approved by the Board of Directors.

SECTION 4. FISCAL YEAR. The fiscal year of the Corporation shall be
fixed, and once fixed, may thereafter be changed, by resolution of the Board of
Directors.

SECTION 5. CHECKS, NOTES, DRAFTS, ETC. All checks, notes, drafts or other
orders for the payment of money of the Corporation shall be signed, endorsed or
accepted in the name of the Corporation by such officer, officers, person or
persons as from time to time may be designated by the Board of Directors or by
an officer or officers authorized by the Board of Directors to make such
designation.

SECTION 6. EXECUTION OF CONTRACTS, DEEDS, ETC. The Board of Directors may
authorize any officer or officers, agent or agents, in the name and on behalf of
the Corporation to enter into or execute and deliver any and all deeds, bonds,
mortgages, contracts and other obligations or instruments, and such authority
may be general or confined to specific instances.

SECTION 7. VOTING OF STOCK IN OTHER CORPORATIONS. Unless otherwise
provided by resolution of the Board of Directors, the Chairman of the Board or
the President, from time to time, may (or may appoint one or more attorneys or
agents to) cast the votes which the Corporation may be entitled to cast as a
shareholder or otherwise in any other corporation, any of whose shares or
securities may be held by the Corporation, at meetings of the holders of the
shares or other securities of such other corporation. In the event one or more
attorneys or agents are appointed, the Chairman of the Board or the President
may instruct the person or persons so appointed as to the manner of casting such
votes or giving such consent. The Chairman of the Board or the president may, or
may instruct the attorneys or agents appointed to, execute or cause to be
executed in the name and on behalf of the Corporation and under its seal or
otherwise, such written proxies, consents, waivers or other instruments as may
be necessary or proper in the circumstances.

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<PAGE>

ARTICLE VIII

Amendments

These By-Laws may be amended or repealed or new by-laws adopted (a) by
action of the stockholders entitled to vote thereon at any annual or special
meeting of stockholders or (b) if the Certificate of Incorporation so provides,
by action of the Board of Directors at a regular or special meeting thereof.
Any by-law made by the Board of Directors may be amended or repealed by action
of the stockholders at any annual or special meeting of stockholders.

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<PAGE>

EXCHANGE AGREEMENT

AMONG

PARADISE MUSIC & ENTERTAINMENT, INC.

BRIAN DOYLE

RICHARD FLYNN

JOHN LOEFFLER

And

JON SMALL

AS OF OCTOBER 9, 1996
<PAGE>

TABLE OF CONTENTS

Page
----

1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2. Exchange of Target Shares . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Basic Transaction. . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Exchange Consideration . . . . . . . . . . . . . . . . . . . . . . 5
(c) Delivery on the Effective Date . . . . . . . . . . . . . . . . . . 5

3. Representations and Warranties Concerning the Transaction . . . . . . . 5
(a) Representations and Warranties of the Transferee . . . . . . . . . 5
(b) Representations and Warranties of the Transferors. . . . . . . . . 6

4. Representations and Warranties Concerning each of the Targets and
its Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(a) Representations and Warranties by Brian Doyle and Richard Flynn
Regarding All Access. . . . . . . . . . . . . . . . . . . . . . . 10
(b) Representations and Warranties of John Loeffler Regarding Rave . . 14
(c) Representations and Warranties of Jon Small Regarding Picture
Vision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

5. Post-Effective Date Covenants . . . . . . . . . . . . . . . . . . . . . 23
(a) General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(b) Litigation Support . . . . . . . . . . . . . . . . . . . . . . . . 23
(c) Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(d) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

6. Conditions to Obligation to Make this Agreement Effective . . . . . . . 24
(a) Conditions to Obligation of the Transferee . . . . . . . . . . . . 24
(b) Conditions to Obligation of the Transferors. . . . . . . . . . . . 25

7. Remedies for Breaches of This Agreement . . . . . . . . . . . . . . . . 26
(a) Survival of Representations and Warranties . . . . . . . . . . . . 26
(b) Indemnification Provisions for Benefit of the Transferee . . . . . 26
(c) Indemnification Provisions for Benefit of the Transferors. . . . . 27
(d) Matters Involving Third Parties. . . . . . . . . . . . . . . . . . 27
(e) Other Indemnification Provisions . . . . . . . . . . . . . . . . . 28

8. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) Tax Periods Ending on or Before the Effective Date . . . . . . . . 29
(b) Tax Periods Beginning Before and Ending After the Effective
Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(c) Cooperation on Tax Matters . . . . . . . . . . . . . . . . . . . . 30

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<PAGE>

Page
----

(d) Tax Sharing Agreements . . . . . . . . . . . . . . . . . . . . . . 30
(e) Certain Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 30

9. Exclusion of Transferors, Readjustment of Share Allocation. . . . . . . 31
(a) Exclusion of Transferor. . . . . . . . . . . . . . . . . . . . . . 31
(b) Allocation of Expenses . . . . . . . . . . . . . . . . . . . . . . 31

10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(a) Press Releases and Public Announcements. . . . . . . . . . . . . . 31
(b) No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . 31
(c) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 31
(d) Succession and Assignment. . . . . . . . . . . . . . . . . . . . . 31
(e) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(f) Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(g) Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(h) Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(i) Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . 32
(j) Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(k) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(l) Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(m) Incorporation of Exhibits, Annexes, and Schedules. . . . . . . . . 33
(n) Specific Performance . . . . . . . . . . . . . . . . . . . . . . . 33
(o) Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . 33

Exhibit A -- Forms of Employment Agreement between the
Transferee and each of the Transferors
Exhibit B -- Form of Expense Allocation Agreement
Schedule A -- Distribution of Shares among Transferors
Schedule B -- Schedule of Costs Incurred
Disclosure Schedule -- Exceptions to Representations and Warranties
Concerning the Target and Its Subsidiaries

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<PAGE>

EXCHANGE AGREEMENT

Agreement entered into as of October 9, 1996, by and among PARADISE
MUSIC & ENTERTAINMENT, INC., a Delaware corporation (the "TRANSFEREE"), BRIAN
DOYLE and RICHARD FLYNN, individuals whotogether own all of the outstanding
capital stock of All Access Entertainment Management Group, Inc., a New York
corporation ("ALL ACCESS"), JOHN LOEFFLER, an individual who owns all of the
outstanding capital stock of John Leffler Music, Inc. d/b/a Rave Music Group,
Inc., a New York corporation ("RAVE"), and JON SMALL, an individual who owns
all of the outstanding capital stock of Picture Vision, Inc., a Tennessee
corporation ("PICTURE VISION"). Brian Doyle, Richard Flynn, John Loeffler
and Jon Small are collectively referred to herein as the "TRANSFERORS," the
Transferee and the each of the Transferors are collectively referred to
herein as the "PARTIES," and All Access, Picture Vision and Rave are
collectively referred to herein as the "TARGETS."

This Agreement contemplates a transaction qualifying as a tax-free
incorporation under Section 351 of the Code in which the Transferee will acquire
from each of the Transferors, and each of the Transferors will transfer to the
Transferee, all of the shares of capital stock of each of the Targets owned
respectively by each of the Transferors in return for the Shares (as such term
is hereinafter defined).

Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.

1. DEFINITIONS.

"ACCREDITED INVESTOR" has the meaning set forth in Regulation D promulgated
under the Securities Act.

"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.

"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.

"ALL ACCESS" has the meaning set forth in the preface above.
<PAGE>

"ALL ACCESS FINANCIAL INFORMATION" means the financial information with
respect to All Access delivered by Brian Doyle and Richard Flynn to the
Transferee as of July 31, 1996.

"ALL ACCESS SHARE" means any share of the Common Stock, no par value per
share, of All Access.

"BASIS" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.

"CODE" means the Internal Revenue Code of 1986, as amended.

"DISCLOSURE SCHEDULE" has the meaning set forth in Section 4 below.

"EFFECTIVE DATE" means the date of this Agreement, October 9, 1996.

"EMPLOYMENT AGREEMENTS" mean the employment agreements entered into between
the Transferee and each of the Transferors, the forms of which are attached
hereto as EXHIBIT A.

"EXCHANGE CONSIDERATION" has the meaning set forth in Section 2(b) below.

"EXPENSE ALLOCATION AGREEMENT" means the Expense Allocation Agreement
between the Transferee and each of the Targets, the form of which is attached
hereto as EXHIBIT B.

"FINANCIAL INFORMATION" means the All Access Financial Information, the
Picture Vision Financial Information and the Rave Financial Information.

"INDEMNIFIED PARTY" has the meaning set forth in Section 7(d) below.

"INDEMNIFYING PARTY" has the meaning set forth in Section 7(d) below.

"INTELLECTUAL PROPERTY" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
cus-

2
<PAGE>

tomer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).

"IPO" means the initial public offering of the Transferee.

"LIABILITY" means any liability (whether known or unknown, whether asserted
or unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for Taxes.

"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).

"PARTIES" has the meaning set forth in the preface above.

"PERSON" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental entity (or any department, agency, or political subdivision
thereof).

"PICTURE VISION" has the meaning set forth in the preface above.

"PICTURE VISION FINANCIAL INFORMATION" means the financial information with
respect to Picture Vision delivered to the Transferee by Jon Small as of July
31, 1996.

"PICTURE VISION SHARE" means any share of the Common Stock, no par value
per share, of Picture Vision.

"RAVE" has the meaning set forth in the preface above.

"RAVE FINANCIAL INFORMATION" means the financial information with respect
to Rave delivered to the Transferee by John Loeffler as of July 31, 1996.

"RAVE SHARE" means any share of the Common Stock, no par value per share,
of Rave.

"SEC" means the United States Securities and Exchange Commission.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for

3
<PAGE>

Taxes not yet due and payable or for Taxes that the taxpayer is contesting in
good faith through appropriate proceedings, (c) purchase money liens and liens
securing rental payments under capital lease arrangements, and (d) other liens
arising in the Ordinary Course of Business and not incurred in connection with
the borrowing of money.

"SHARES" has the meaning set forth in Section 2(b) below.

"SUBSIDIARY" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors.

"TARGETS" has the meaning set forth in the preface above.

"TARGET SHARES" means the All Access Shares, the Picture Vision Shares and
the Rave Shares.

"TAX" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Section 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.

"TAX RETURN" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

"THIRD PARTY CLAIM" has the meaning set forth in Section 7(d) below.

"TRANSFEREE" has the meaning set forth in the preface above.

"TRANSFEREE SHARE" means any share of the Common Stock, par value $.01 per
share, of the Transferee.

"TRANSFERORS" has the meaning set forth in the preface above.

2. EXCHANGE OF TARGET SHARES.

(a) BASIC TRANSACTION. On and subject to the terms and conditions of this
Agreement, the Transferee agrees to acquire from each of the Transferors, and
each of the Transferors agrees to transfer to the Transferee, all of the Target
Shares owned by the Transferors in exchange for the consideration specified in
Section 2(b) below.

4
<PAGE>

(b) EXCHANGE CONSIDERATION. The Transferee agrees to issue to the
Transferors on the Effective Date (the EXCHANGE CONSIDERATION") an aggregate of
873,000 Transferee Shares (the "SHARES"), with the Shares being distributed
among the Transferors as set forth on SCHEDULE A attached hereto.

(c) DELIVERY ON THE EFFECTIVE DATE. On the Effective Date, (A) each of the
Transferors shall deliver to the Transferee the various certificates,
instruments, and documents referred to in Section 6(a) below, (B) the Transferee
shall deliver to each of the Transferors the various certificates, instruments,
and documents referred to in Section 6(b) below, (C) each of the Transferors
shall deliver to Transferee the stock certificates representing all of the
Target Shares owned by the Transferors, endorsed in blank or accompanied by duly
executed assignment documents, and (D) the Transferee shall deliver to each of
the Transferors the consideration listed in Section 2(b) above.

3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION.

(a) REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE. The Transferee
represents and warrants to the Transferors that the statements contained in this
Section 3(a) are correct and complete as of the Effective Date.

(i) ORGANIZATION OF THE TRANSFEREE. The Transferee is a
corporation duly organized, validly existing, and in good standing under
the laws of the State of Delaware.

(ii) AUTHORIZATION OF TRANSACTION. The Transferee has full power
and authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. This
Agreement constitutes the valid and legally binding obligation of the
Transferee, enforceable in accordance with its terms and conditions. Other
than any state and federal securities filings related to the IPO, the
Transferee need not give any notice to, make any filing with, or obtain any
authorization, consent, or approval of, any government or governmental
agency in order to consummate the transactions contemplated by this
Agreement.

(iii) NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or court to which
the Transferee is subject or any provision of its charter or bylaws or (B)
conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which the
Transferee is a party or by which it is bound or to which any of its assets
is subject.

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<PAGE>

(iv) BROKERS' FEES. The Transferee has no Liability or obligation
to pay any fees or commissions to any broker, finder, or agent with respect
to the transactions contemplated by this Agreement for which any Transferor
could become liable or obligated.

(v) INVESTMENT. The Transferee is not acquiring the Target
Shares with a view to, or for sale in connection with, any distribution
thereof within the meaning of the Securities Act.

(b) REPRESENTATIONS AND WARRANTIES OF THE TRANSFERORS.

(i) REPRESENTATIONS AND WARRANTIES OF BRIAN DOYLE AND RICHARD
FLYNN. Each of Brian Doyle and Richard Flynn jointly and severally
represents and warrants to the Transferee that the statements contained in
this Section 3(b)(i) are correct and complete as of the Effective Date with
respect to each of Brian Doyle and Richard Flynn.

a. AUTHORIZATION OF TRANSACTION. Each of Brian Doyle and Richard
Flynn has full power and authority to execute and deliver this Agreement
and to perform his obligations hereunder. This Agreement constitutes the
valid and legally binding obligation of each of Brian Doyle and Richard
Flynn, enforceable in accordance with its terms and conditions. Other than
any state or federal securities filings related to the IPO, neither Brian
Doyle nor Richard Flynn need give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated
by this Agreement.

b. NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which either Brian Doyle or
Richard Flynn is subject or (B) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which either Brian Doyle or Richard Flynn is a party or by
which either of them is bound or to which any of their assets is subject.

c. BROKERS' FEES. Neither Brian Doyle nor Richard Flynn has any
Liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement for which the Transferee could become liable or obligated.

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<PAGE>

d. INVESTMENT. Each of Brian Doyle and Richard Flynn (A) understands
that the Shares have not been registered under the Securities Act, or under
any state securities laws, and are being offered and sold in reliance upon
federal and state exemptions for transactions not involving any public
offering, (B) is acquiring the Shares for his own account for investment
purposes, and not with a view to the distribution thereof, (C) is a
sophisticated investor with knowledge and experience in business and
financial matters, (D) has received certain information concerning the
Transferee and has had the opportunity to obtain additional information as
desired in order to evaluate the merits and the risks inherent in holding
the Shares, and (E) is able to bear the economic risk and lack of liquidity
inherent in holding the Shares.

e. ALL ACCESS SHARES. Brian Doyle and Richard Flynn each hold of
record and own beneficially ten (10) All Access Shares, free and clear of
any restrictions on transfer (other than any restrictions under the
Securities Act and state securities laws), Taxes, Security Interests,
options, warrants, purchase rights, contracts, commitments, equities,
claims, and demands. Other than this Agreement, neither Brian Doyle nor
Richard Flynn is a party to any option, warrant, purchase right, or other
contract or commitment that could require either of them to sell, transfer,
or otherwise dispose of any capital stock of All Access. Neither Brian
Doyle nor Richard Flynn is a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock
of All Access. The All Access Shares owned by Brian Doyle and Richard
Flynn constitute all of the shares of capital stock of All Access.

f. ALL ACCESS FINANCIAL INFORMATION. Brian Doyle and Richard Flynn
do hereby certify that the All Access Financial Information is accurate in
all material respects.

(ii) REPRESENTATIONS AND WARRANTIES OF JOHN LOEFFLER. John
Loeffler represents and warrants to the Transferee that the statements
contained in this Section 3(b)(ii) are correct and complete as of the
Effective Date with respect to himself.

a. AUTHORIZATION OF TRANSACTION. John Loeffler has full power and
authority to execute and deliver this Agreement and to perform his
obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of John Loeffler, enforceable in accordance with its
terms and conditions. Other than any state or federal securities filings
related to the IPO, John Loeffler need not give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement.

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<PAGE>

charge, or other restriction of any government, governmental agency, or
court to which John Loeffler is subject or (B) conflict with, result in a
breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which John Loeffler is a party or by
which he or it is bound or to which any of his or its assets is subject.

c. BROKERS' FEES. John Loeffler has no Liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which the Transferee
could become liable or obligated.

d. INVESTMENT. John Loeffler (A) understands that the Shares have
not been registered under the Securities Act, or under any state securities
laws, and are being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering, (B) is
acquiring the Shares for his own account for investment purposes, and not
with a view to the distribution thereof, (C) is a sophisticated investor
with knowledge and experience in business and financial matters, (D) has
received certain information concerning the Transferee and has had the
opportunity to obtain additional information as desired in order to
evaluate the merits and the risks inherent in holding the Shares, and (E)
is able to bear the economic risk and lack of liquidity inherent in holding
the Shares.

e. RAVE SHARES. John Loeffler holds of record and owns beneficially
200 Rave Shares, free and clear of any restrictions on transfer (other than
any restrictions under the Securities Act and state securities laws),
Taxes, Security Interests, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. Other than this Agreement, John
Loeffler is not a party to any option, warrant, purchase right, or other
contract or commitment that could require him to sell, transfer, or
otherwise dispose of any capital stock of the Target. John Loeffler is not
a party to any voting trust, proxy, or other agreement or understanding
with respect to the voting of any capital stock of Rave. The Rave Shares
owned by John Loeffler constitute all of the shares of capital stock of
Rave.

f. RAVE FINANCIAL INFORMATION. John Loeffler does hereby certify
that the Rave Financial Information is accurate in all material respects.

(iii) REPRESENTATIONS AND WARRANTIES OF JON SMALL. Jon Small
represents and warrants to the Transferee that the statements contained in
this Section 3(b)(iii) are correct and complete as of the Effective Date
with respect to himself.

a. AUTHORIZATION OF TRANSACTION. Jon Small has full power and
authority to execute and deliver this Agreement and to perform his
obligations hereunder. This

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<PAGE>

Agreement constitutes the valid and legally binding obligation of Jon
Small, enforce able in accordance with its terms and conditions. Other than
any state or federal securities filings related to the IPO, Jon Small need
not give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.

b. NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Jon Small is subject or
(B) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which Jon
Small is a party or by which he or it is bound or to which any of his or
its assets is subject.

c. BROKERS' FEES. Jon Small has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Transferee could
become liable or obligated.

d. INVESTMENT. The Transferor (A) understands that the Shares have
not been registered under the Securities Act, or under any state securities
laws, and are being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering, (B) is
acquiring the Shares for his own account for investment purposes, and not
with a view to the distribution thereof, (C) is a sophisticated investor
with knowledge and experience in business and financial matters, (D) has
received certain information concerning the Transferee and has had the
opportunity to obtain additional information as desired in order to
evaluate the merits and the risks inherent in holding the Shares, and (E)
is able to bear the economic risk and lack of liquidity inherent in holding
the Shares.

e. PICTURE VISION SHARES. Jon Small holds of record and owns
beneficially one hundred (100) Picture Vision Shares, free and clear of any
restrictions on transfer (other than any restrictions under the Securities
Act and state securities laws), Taxes, Security Interests, options,
warrants, purchase rights, contracts, commitments, equities, claims, and
demands. Other than this Agreement, Jon Small is not a party to any option,
warrant, purchase right, or other contract or commitment that could require
him to sell, transfer, or otherwise dispose of any capital stock of Picture
Vision. Jon Small is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock
of Picture Vision. The Picture Vision

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<PAGE>

Shares owned by Jon Small constitute all of the shares of capital stock of
Picture Vision.

f. PICTURE VISION FINANCIAL INFORMATION. Jon Small does hereby
certify that the Picture Vision Financial Information is accurate in all
material respects.

4. REPRESENTATIONS AND WARRANTIES CONCERNING EACH OF THE TARGETS AND ITS
SUBSIDIARIES. Each of (i) Brian Doyle and Richard Flynn with respect to All
Access only, (ii) John Loeffler with respect to Rave only and (iii) Jon Small
with respect to Picture Vision only, severally represents and warrants to the
Transferee that the statements contained in this Section 4 with respect to the
respective entities named together with each of the individuals set forth above
are correct and complete as of the Effective Date, except as set forth in the
disclosure schedule delivered by the Transferors to the Transferee on the date
hereof and initialed by the Parties (the "DISCLOSURE SCHEDULE"). Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein, however, unless the Disclosure Schedule
identifies the exception with reasonable particularity and describes the
relevant facts in reasonable detail. Without limiting the generality of the
foregoing, the mere listing (or inclusion of a copy) of a document or other item
shall not be deemed adequate to disclose an exception to a representation or
warranty made herein (unless the representation or warranty has to do with the
existence of the document or other item itself). The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 4.

(a) REPRESENTATIONS AND WARRANTIES BY BRIAN DOYLE AND RICHARD FLYNN
REGARDING ALL ACCESS.

(i) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Each of
All Access and its Subsidiaries is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation. Each of All Access and its Subsidiaries is duly authorized
to conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required. Each of All Access and
its Subsidiaries has full corporate power and authority and all licenses,
permits, and authorizations necessary to carry on the businesses in which
it is engaged and in which it presently proposes to engage and to own and
use the properties owned and used by it. SECTION 4(a)(i) OF THE DISCLOSURE
SCHEDULE lists the directors and officers of each of All Access and its
Subsidiaries. Brian Doyle and Richard Flynn have delivered to the
Transferee correct and complete copies of the charter and bylaws of All
Access and its Subsidiaries (as amended to date). The minute books
(containing the records of meetings of the stockholders, the board of
directors, and any committees of the board of directors), the stock
certificate books, and the stock record books of each of All Access and its
Subsidiaries are correct and complete. None of All Access and its
Subsidiaries is in default under or in violation of any provision of its
charter or bylaws. Transferor acknowledges receipt of the above items.

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<PAGE>

(ii) CAPITALIZATION. The entire authorized capital stock of All
Access consists of two hundred (200) All Access Shares, twenty (20) of
which are issued and outstanding. All of the issued and outstanding All
Access Shares have been duly authorized, are validly issued, fully paid,
and nonassessable, and are held of record by the Person's set forth in
SECTION 4(a)(ii) OF THE DISCLOSURE SCHEDULE. There are no outstanding or
authorized options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, or other contracts or commitments that
could require All Access to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or
similar rights with respect to All Access. There are no voting trusts,
proxies, or other agreements or understandings with respect to the voting
of the capital stock of All Access.

(iii) NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or court to which
any of All Access and its Subsidiaries is subject or any provision of the
charter or bylaws of any of All Access and its Subsidiaries or (ii)
conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which any of
All Access and its Subsidiaries is a party or by which it is bound or to
which any of its assets is subject (or result in the imposition of any
Security Interest upon any of its assets). Other than any state or federal
securities filings related to the IPO, none of All Access and its
Subsidiaries needs to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any government or governmental
agency in order for the Parties to consummate the transactions contemplated
by this Agreement.

(iv) BROKERS' FEES. None of All Access and its Subsidiaries has
any Liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement.

(v) INTELLECTUAL PROPERTY.

a. All Access and its Subsidiaries own or have the right to use
pursuant to license, sublicense, agreement, or permission all Intellectual
Property necessary for the operation of the businesses of the All Access
and its Subsidiaries as presently conducted. Each item of Intellectual
Property owned or used by any of All Access and its Subsidiaries
immediately prior to the Effective Date hereunder will be owned or
available for use by the All Access or the Subsidiary on identical terms
and conditions immediately subsequent to the Effective Date hereunder. Each
of All Access and its

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<PAGE>

Subsidiaries has taken all necessary action to maintain and protect each
item of Intellectual Property that it owns or uses.

b. None of All Access and its Subsidiaries has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and none of Brian Doyle and
Richard Flynn and the directors and officers (and employees with
responsibility for Intellectual Property matters) of All Access and its
Subsidiaries has ever received any charge, complaint, claim, demand, or
notice alleging any such interference, infringement, misappropriation, or
violation (including any claim that any of All Access and its Subsidiaries
must license or refrain from using any Intellectual Property rights of any
third party). To the Knowledge of any of Brian Doyle and Richard Flynn and
the directors and officers (and employees with responsibility for
Intellectual Property matters) of All Access and its Subsidiaries, no third
party has interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property rights of any of All
Access and its Subsidiaries.

c. Section 4(a)(v)(c) of the Disclosure Schedule identifies each
item of Intellectual Property owned by All Access and its Subsidiaries, and
identifies each license, agreement, or other permission which any of All
Access and its Subsidiaries has granted to any third party with respect to
any of its Intellectual Property (together with any exceptions). With
respect to each item of Intellectual Property required to be identified in
Section 4(a)(v)(c) of the Disclosure Schedule:

(A) All Access and its Subsidiaries possess all right, title,
and interest in and to the item, free and clear of any Security
Interest, license, or other restriction;

(B) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;

(C) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to the knowledge of any of
Brian Doyle and Richard Flynn and the directors and officers (and
employees with responsibility for Intellectual Property matters) of
All Access and its Subsidiaries, is threatened which challenges the
legality, validity, enforceability, use, or ownership of the item; and

(D) none of All Access and its Subsidiaries has ever agreed to
indemnify any Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.

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<PAGE>

d. Section 4(a)(v)(d) of the Disclosure Schedule identifies each
item of Intellectual Property that any third party owns and that any of All
Access and its Subsidiaries uses pursuant to license, sublicense,
agreement, or permission. All Access has delivered to the Transferee
correct and complete copies of all such licenses, sublicenses, agreements,
and permissions (as amended to date). With respect to each item of
Intellectual Property required to be identified in Section 4(a)(v)(d) of
the Disclosure Schedule:

(A) the license, sublicense, agreement, or permission covering
the item is legal, valid, binding, enforceable, and in full force and
effect;

(B) the license, sublicense, agreement, or permission will
continue to be legal, valid, binding, enforceable, and in full force
and effect on identical terms following the consummation of the
transactions contemplated hereby;

(C) no party to the license, sublicense, agreement, or
permission is in breach or default, and no event has occurred which
with notice or lapse of time would constitute a breach or default or
permit termination, modification, or acceleration thereunder;

(D) no party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;

(E) with respect to each sublicense, the representations and
warranties set forth in subsections (A) through (D) above are true and
correct with respect to the underlying license;

(F) the underlying item of Intellectual Property is not subject
to any outstanding injunction, judgment, order, decree, ruling, or
charge;

(G) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to the knowledge of any of
Brian Doyle and Richard Flynn and the directors and officers (and
employees with responsibility for Intellectual Property matters) of
All Access and its Subsidiaries, is threatened which challenges the
legality, validity, or enforceability of the underlying item of
Intellectual Property; and

(H) none of All Access and its Subsidiaries has granted any
sublicense or similar right with respect to the license, sublicense,
agreement, or permission.

e. To the Knowledge of any of Brian Doyle and Richard Flynn and the
directors and officers (and employees with responsibility for Intellectual
Property matters) of All Access and its Subsidiaries, none of All Access
and its Subsidiaries will

13
<PAGE>

interfere with, infringe upon, misappropriate, or otherwise come into
conflict with, any Intellectual Property rights of third parties as a
result of the continued operation of its businesses as presently conducted
and as presently proposed to be conducted.

(vi) TITLE TO ASSETS. Except as set forth in Section
4(a)(vi) of the DISCLOSURE SCHEDULE, all Access and its Subsidiaries have
good and marketable title to, or a valid leasehold interest in, the
properties and assets used by them or located on their premises, free and
clear of all Security Interests.

(vii) SUBSIDIARIES. All Access has no Subsidiaries.

(viii) UNDISCLOSED LIABILITIES. None of All Access and its
Subsidiaries has any Liability (and there is no Basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against any of them giving rise to any Liability), which
is not included in the All Access Financial Information.

(ix) LEGAL COMPLIANCE. Each of All Access, its Subsidiaries,
and their respective predecessors and Affiliates has complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal,
state, local, and foreign governments (and all agencies thereof), and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging
any failure to so comply.

(x) CONTRACTS. Prior to the date of this Agreement, All
Access has disclosed to the Transferee all material contracts of All Access
dated prior to the date of this Agreement, and All Access has either
delivered to the Transferee, or given the Transferee the opportunity to
review, all such material contracts.

(xi) DISCLOSURE. The representations and warranties
contained in this Section 4 do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements and information contained in this Section 4 not misleading.

(b) REPRESENTATIONS AND WARRANTIES OF JOHN LOEFFLER REGARDING RAVE.

(i) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Each of
Rave and its Subsidiaries is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation. Each of Rave and its Subsidiaries is duly authorized to
conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required. Each of Rave and its
Subsidiaries has full corporate power and authority and all licenses,
permits, and

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<PAGE>

authorizations necessary to carry on the businesses in which it is engaged
and in which it presently proposes to engage and to own and use the
properties owned and used by it. SECTION 4(b)(i) OF THE DISCLOSURE SCHEDULE
lists the directors and officers of each of Rave and its Subsidiaries. John
Loeffler has delivered to the Transferee correct and complete copies of the
charter and bylaws of each of Rave and its Subsidiaries (as amended to
date). The minute books (containing the records of meetings of the
stockholders, the board of directors, and any committees of the board of
directors), the stock certificate books, and the stock record books of each
of Rave and its Subsidiaries are correct and complete. None of Rave and its
Subsidiaries is in default under or in violation of any provision of its
charter or bylaws.

(ii) CAPITALIZATION. The entire authorized capital stock of
Rave consists of 200 Rave Shares all of which are issued and outstanding.
All of the issued and outstanding Rave Shares have been duly authorized,
are validly issued, fully paid, and nonassessable, and are held of record
by the Person's set forth in SECTION 4(b)(ii) OF THE DISCLOSURE SCHEDULE.
There are no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts
or commitments that could require Rave to issue, sell, or otherwise cause
to become outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or
similar rights with respect to Rave. There are no voting trusts, proxies,
or other agreements or understandings with respect to the voting of the
capital stock of Rave.

(iii) NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or court to which
any of Rave and its Subsidiaries is subject or any provision of the charter
or bylaws of any of Rave and its Subsidiaries or (ii) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which any of Rave and its Subsidiaries
is a party or by which it is bound or to which any of its assets is subject
(or result in the imposition of any Security Interest upon any of its
assets). Other than any state or federal securities filings related to the
IPO, none of Rave and its Subsidiaries needs to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate
the transactions contemplated by this Agreement.

(iv) BROKERS' FEES. None of Rave and its Subsidiaries has
any Liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement.

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<PAGE>

(v) INTELLECTUAL PROPERTY.

a. Rave and its Subsidiaries own or have the right to use pursuant
to license, sublicense, agreement, or permission all Intellectual Property
necessary for the operation of the businesses of the Rave and its
Subsidiaries as presently conducted. Each item of Intellectual Property
owned or used by any of Rave and its Subsidiaries immediately prior to the
Effective Date hereunder will be owned or available for use by the Rave or
the Subsidiary on identical terms and conditions immediately subsequent to
the Effective Date hereunder. Each of Rave and its Subsidiaries has taken
all necessary action to maintain and protect each item of Intellectual
Property that it owns or uses.

b. None of Rave and its Subsidiaries has interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and none of John Loeffler
and the directors and officers (and employees with responsibility for
Intellectual Property matters) of Rave and its Subsidiaries has ever
received any charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including any
claim that any of Rave and its Subsidiaries must license or refrain from
using any Intellectual Property rights of any third party). To the
Knowledge of any of John Loeffler and the directors and officers (and
employees with responsibility for Intellectual Property matters) of Rave
and its Subsidiaries, no third party has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual
Property rights of any of Rave and its Subsidiaries.

c. Section 4(b)(v)(c) of the Disclosure Schedule identifies each
item of Intellectual Property owned by Rave and its Subsidiaries, and
identifies each license, agreement, or other permission which any of Rave
and its Subsidiaries has granted to any third party with respect to any of
its Intellectual Property (together with any exceptions). With respect to
each item of Intellectual Property required to be identified in Section
4(b)(v)(c) of the Disclosure Schedule:

(A) Rave and its Subsidiaries possess all right, title, and
interest in and to the item, free and clear of any Security Interest,
license, or other restriction;

(B) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;

(C) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to the knowledge of any of
John Loeffler and the directors and officers (and employees with
responsibility for Intellectual Property matters) of Rave and its
Subsidiaries, is threatened which

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<PAGE>

challenges the legality, validity, enforceability, use, or ownership
of the item; and

(D) none of Rave and its Subsidiaries has ever agreed to
indemnify any Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.

d. Section 4(b)(v)(d) of the Disclosure Schedule identifies each
item of Intellectual Property that any third party owns and that any of
Rave and its Subsidiaries uses pursuant to license, sublicense, agreement,
or permission. Rave has delivered to the Transferee correct and complete
copies of all such licenses, sublicenses, agreements, and permissions (as
amended to date). With respect to each item of Intellectual Property
required to be identified in Section 4(b)(v)(d) of the Disclosure Schedule:

(A) the license, sublicense, agreement, or permission covering
the item is legal, valid, binding, enforceable, and in full force and
effect;

(D) no party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;

(E) with respect to each sublicense, the representations and
warranties set forth in subsections (A) through (D) above are true and
correct with respect to the underlying license;

(F) the underlying item of Intellectual Property is not subject
to any outstanding injunction, judgment, order, decree, ruling, or
charge;

(G) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to the knowledge of any of
John Loeffler and the directors and officers (and employees with
responsibility for Intellectual Property matters) of Rave and its
Subsidiaries, is threatened which challenges the legality, validity,
or enforceability of the underlying item of Intellectual Property; and

17
<PAGE>

(H) none of Rave and its Subsidiaries has granted any sublicense
or similar right with respect to the license, sublicense, agreement,
or permission.

e. To the Knowledge of any of John Loeffler and the directors and
officers (and employees with responsibility for Intellectual Property
matters) of Rave and its Subsidiaries, none of Rave and its Subsidiaries
will interfere with, infringe upon, misappropriate, or otherwise come into
conflict with, any Intellectual Property rights of third parties as a
result of the continued operation of its businesses as presently conducted
and as presently proposed to be conducted.

(vi) TITLE TO ASSETS. Rave and its Subsidiaries have good
and marketable title to, or a valid leasehold interest in, the properties
and assets used by them or located on their premises, free and clear of all
Security Interests.

(vii) SUBSIDIARIES. Except as set forth in Section 4(b)(vii)
of the Disclosure Schedule, Rave has no Subsidiaries.

(viii) UNDISCLOSED LIABILITIES. None of Rave and its
Subsidiaries has any Liability (and there is no Basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against any of them giving rise to any Liability), which
is not included in the Rave Financial Information.

(ix) LEGAL COMPLIANCE. Each of Rave, its Subsidiaries, and
their respective predecessors and Affiliates has complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal,
state, local, and foreign governments (and all agencies thereof), and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging
any failure to so comply.

(x) CONTRACTS. Prior to the date of this Agreement, Rave
has disclosed to the Transferee all material contracts of Rave dated prior
to the date of this Agreement, and Rave has either delivered to the
Transferee, or given the Transferee the opportunity to review, all such
material contracts.

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<PAGE>

(i) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Each
of Picture Vision and its Subsidiaries is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction
of its incorporation. Each of Picture Vision and its Subsidiaries is duly
authorized to conduct business and is in good standing under the laws of
each jurisdiction where such qualification is required. Each of Picture
Vision and its Subsidiaries has full corporate power and authority and all
licenses, permits, and authorizations necessary to carry on the businesses
in which it is engaged and in which it presently proposes to engage and to
own and use the properties owned and used by it. SECTION 4(c)(i) OF THE
DISCLOSURE SCHEDULE lists the directors and officers of each of Picture
Vision and its Subsidiaries. Jon Small has delivered to the Transferee
correct and complete copies of the charter and bylaws of each of Picture
Vision and its Subsidiaries (as amended to date). The minute books
(containing the records of meetings of the stockholders, the board of
directors, and any committees of the board of directors), the stock
certificate books, and the stock record books of each of Picture Vision and
its Subsidiaries are correct and complete. None of Picture Vision and its
Subsidiaries is in default under or in violation of any provision of its
charter or bylaws.

(ii) CAPITALIZATION. The entire authorized capital stock of
Picture Vision consists of one-thousand (1000) Picture Vision Shares, one-
hundred (100) of which are issued and outstanding. All of the issued and
outstanding Picture Vision Shares have been duly authorized, are validly
issued, fully paid, and nonassessable, and are held of record by the
Person's set forth in SECTION 4(c)(ii) OF THE DISCLOSURE SCHEDULE. There
are no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts
or commitments that could require Picture Vision to issue, sell, or
otherwise cause to become outstanding any of its capital stock. There are
no outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to Picture Vision. There are
no voting trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of Picture Vision.

(iii) NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or court to which
any of Picture Vision and its Subsidiaries is subject or any provision of
the charter or bylaws of any of Picture Vision and its Subsidiaries or (ii)
conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which any of
Picture Vision and its Subsidiaries is a party or by which it is bound or
to which any of its assets is subject (or result in the imposition of any
Security Interest

19
<PAGE>

upon any of its assets). Other than any state or federal securities filings
related to the IPO, none of Picture Vision and its Subsidiaries needs to
give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for
the Parties to consummate the transactions contemplated by this Agreement.

(iv) BROKERS' FEES. None of Picture Vision and its Subsidiaries
has any Liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by
this Agreement.

(v) INTELLECTUAL PROPERTY.

a. Picture Vision and its Subsidiaries own or have the right to use
pursuant to license, sublicense, agreement, or permission all Intellectual
Property necessary for the operation of the businesses of the Picture
Vision and its Subsidiaries as presently conducted. Each item of
Intellectual Property owned or used by any of Picture Vision and its
Subsidiaries immediately prior to the Effective Date hereunder will be
owned or available for use by the Picture Vision or the Subsidiary on
identical terms and conditions immediately subsequent to the Effective Date
hereunder. Each of Picture Vision and its Subsidiaries has taken all
necessary action to maintain and protect each item of Intellectual Property
that it owns or uses.

b. None of Picture Vision and its Subsidiaries has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of third parties, and none of Jon Small and
the directors and officers (and employees with responsibility for
Intellectual Property matters) of Picture Vision and its Subsidiaries has
ever received any charge, complaint, claim, demand, or notice alleging any
such interference, infringement, misappropriation, or violation (including
any claim that any of Picture Vision and its Subsidiaries must license or
refrain from using any Intellectual Property rights of any third party). To
the Knowledge of any of Jon Small and the directors and officers (and
employees with responsibility for Intellectual Property matters) of Picture
Vision and its Subsidiaries, no third party has interfered with, infringed
upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of any of Picture Vision and its Subsidiaries.

c. Section 4(c)(v)(c) of the Disclosure Schedule identifies each
item of Intellectual Property owned by Picture Vision and its Subsidiaries,
and identifies each license, agreement, or other permission which any of
Picture Vision and its Subsidiaries has granted to any third party with
respect to any of its Intellectual Property (together with any exceptions).
With respect to each item of Intellectual Property required to be
identified in Section 4(c)(v)(c) of the Disclosure Schedule:

20
<PAGE>

(A) Picture Vision and its Subsidiaries possess all right,
title, and interest in and to the item, free and clear of any Security
Interest, license, or other restriction;

(B) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;

(C) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to the knowledge of any of
Jon Small and the directors and officers (and employees with
responsibility for Intellectual Property matters) of Picture Vision
and its Subsidiaries, is threatened which challenges the legality,
validity, enforceability, use, or ownership of the item; and

(D) none of Picture Vision and its Subsidiaries has ever agreed
to indemnify any Person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.

d. Section 4(c)(v)(d) of the Disclosure Schedule identifies each
item of Intellectual Property that any third party owns and that any of
Picture Vision and its Subsidiaries uses pursuant to license, sublicense,
agreement, or permission. Picture Vision has delivered to the Transferee
correct and complete copies of all such licenses, sublicenses, agreements,
and permissions (as amended to date). With respect to each item of
Intellectual Property required to be identified in Section 4(c)(v)(d) of
the Disclosure Schedule:

(A) the license, sublicense, agreement, or permission covering
the item is legal, valid, binding, enforceable, and in full force and
effect;

(D) no party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;

(E) with respect to each sublicense, the representations and
warranties set forth in subsections (A) through (D) above are true and
correct with respect to the underlying license;

21
<PAGE>

(F) the underlying item of Intellectual Property is not subject
to any outstanding injunction, judgment, order, decree, ruling, or
charge;

(G) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to the knowledge of any of
Jon Small and the directors and officers (and employees with
responsibility for Intellectual Property matters) of Picture Vision
and its Subsidiaries, is threatened which challenges the legality,
validity, or enforceability of the underlying item of Intellectual
Property; and

(H) none of Picture Vision and its Subsidiaries has granted any
sublicense or similar right with respect to the license, sublicense,
agreement, or permission.

e. To the Knowledge of any of Jon Small and the directors and
officers (and employees with responsibility for Intellectual Property
matters) of Picture Vision and its Subsidiaries, none of Picture Vision and
its Subsidiaries will interfere with, infringe upon, misappropriate, or
otherwise come into conflict with, any Intellectual Property rights of
third parties as a result of the continued operation of its businesses as
presently conducted and as presently proposed to be conducted.

(vi) TITLE TO ASSETS. Picture Vision and its Subsidiaries
have good and marketable title to, or a valid leasehold interest in, the
properties and assets used by them or located on their premises, free and
clear of all Security Interests.

(vii) SUBSIDIARIES. Except as set forth in Section 4(c)(vii)
of the Disclosure Schedule, Picture Vision has no Subsidiaries.

(viii) UNDISCLOSED LIABILITIES. None of Picture Vision and its
Subsidiaries has any Liability (and there is no Basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand against any of them giving rise to any Liability), which
is not included in the Picture Vision Financial Information.

(ix) LEGAL COMPLIANCE. Each of Picture Vision, its
Subsidiaries, and their respective predecessors and Affiliates has complied
with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder)
of federal, state, local, and foreign governments (and all agencies
thereof), and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced against any
of them alleging any failure to so comply.

22
<PAGE>

(x) CONTRACTS. Prior to the date of this Agreement, Picture
Vision has disclosed to the Transferee all material contracts of Picture
Vision dated prior to the date of this Agreement, and Picture Vision has
either delivered to the Transferee, or given the Transferee the opportunity
to review, all such material contracts.

(xi) DISCLOSURE. The representations and warranties contained in
this Section 4 do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
and information contained in this Section 4 not misleading.

5. POST-EFFECTIVE DATE COVENANTS. The Parties agree as follows with
respect to the period following the Effective Date.

(a) GENERAL. In case at any time after the Effective Date any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party
reasonably may request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under
Section 7 below). The Transferors acknowledge and agree that from and after the
Effective Date the Transferee will be entitled to possession of all documents,
books, records (including Tax records), agreements, and financial data of any
sort relating to the Targets and their Subsidiaries.

(b) LITIGATION SUPPORT. In the event and for so long as any Party actively
is contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act, or transaction on or prior to the Effective
Date involving any of the Targets and their Subsidiaries, each of the other
Parties will cooperate with him or it and his or its counsel in the contest or
defense, make available their personnel, and provide such testimony and access
to their books and records as shall be necessary in connection with the contest
or defense, all at the sole cost and expense of the contesting or defending
Party (unless the contesting or defending Party is entitled to indemnification
therefor under Section 7 below).

(i) The Transferors will not take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
artist, client, supplier, or other business associate of any of the Targets
and their Subsidiaries from maintaining the same business relationships
with the Targets and their Subsidiaries after the Effective Date as it
maintained with the Targets and their Subsidiaries prior to the Effective
Date;

23
<PAGE>

(ii) The Transferors and Transferee agree to take any and all
actions reasonably necessary and appropriate to implement the business
plans described in the prospectus used in connection with the IPO and to
reimburse the Transferors as provided in Schedule B.

(d) CERTIFICATES. Each certificate representing the Shares will be
imprinted with a legend substantially in the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THESE SECURITIES UNDER THE SECURITIES ACT OF 1933 OR
AN OPINION OF THE COMPANY'S COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT.

Each holder desiring to transfer any of the Shares first must furnish the
Transferee with (i) a written opinion reasonably satisfactory to the Transferee
in form and substance from counsel reasonably satisfactory to the Transferee by
reason of experience to the effect that the holder may transfer the Shares as
desired without registration under the Securities Act and (ii) a written
undertaking executed by the desired transferee reasonably satisfactory to the
Transferee in form and substance agreeing to be bound by the recoupment
provisions and the restrictions on transfer contained herein.

6. CONDITIONS TO OBLIGATION TO MAKE THIS AGREEMENT EFFECTIVE.

(a) CONDITIONS TO OBLIGATION OF THE TRANSFEREE. The obligation of the
Transferee to consummate the transactions to be performed by it in connection
with this Agreement is subject to satisfaction of the following conditions:

(i) the representations and warranties set forth in Section
3(b) and Section 4 above shall be true and correct in all material respects
at and as of the Effective Date;

(ii) the Transferors shall have performed and complied with all
of their covenants hereunder in all material respects through the Effective
Date;

(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, (C)
affect adversely the right of the Transferee to own the Target Shares and
to control the

24
<PAGE>

Targets and their Subsidiaries, or (D) affect adversely the right of any of
the Targets and their Subsidiaries to own their assets and to operate their
businesses (and no such injunction, judgment, order, decree, ruling, or
charge shall be in effect);

(iv) each of the Transferors shall have entered into an
employment agreement with the Transferee substantially similar to the
Employment Agreements;

(v) each of the Targets shall have entered into the Expense
Allocation Agreement;

(vi) the Board of Directors of each of the Targets shall have
adopted resolutions approving the transfer, in accordance with the
provisions of this Agreement, of the Target Shares owned by the
Transferors, and such resolutions shall be in full force and effect on and
as of the Effective Date; and

(vii) all actions to be taken by the Transferors in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect
the transactions contemplated hereby will, unless otherwise set forth in
this Agreement, be reasonably satisfactory in form and substance to the
Transferee.

The Transferee may waive any condition specified in this Section 6(a) if it
executes a writing so stating at or prior to the Effective Date.

(b) CONDITIONS TO OBLIGATION OF THE TRANSFERORS. The obligation of the
Transferors to consummate the transactions to be performed by the Transferors in
connection with this Agreement are subject to satisfaction of the following
conditions:

(i) the representations and warranties set forth in Section 3(a)
above shall be true and correct in all material respects at and as of the
Effective Date;

(ii) the Transferee shall have performed and complied with all of
its covenants hereunder in all material respects through the Effective
Date;

(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of
any federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or
charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement or (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation (and
no such injunction, judgment, order, decree, ruling, or charge shall be in
effect); and

25
<PAGE>

(iv) the Transferee shall have entered into definitive Employment
Agreements with each of the Transferors;

(v) all actions to be taken by the Transferee in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the
transactions contemplated hereby will, unless otherwise set forth in this
Agreement, be reasonably satisfactory in form and substance to the
Transferors; and

(vi) Transferee shall have received (a) executed Board
resolutions extending the term of its private placement, (b) executed
consents of all subscribers in such private placement to the extension of
the term thereof, and (c) shall be reasonably satisfied that all
appropriate Blue Sky filings have been made.

The Transferors may waive any condition specified in this Section 6(b) if they
execute a writing so stating at or prior to the Effective Date.

7. REMEDIES FOR BREACHES OF THIS AGREEMENT.

(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

All of the representations and warranties of the Parties contained in this
Agreement shall survive the Effective Date hereunder (even if the damaged Party
knew or had reason to know of any misrepresentation or breach of warranty or
covenant at the time of Effective Date) and continue in full force and effect
for a period of one year from the Effective Date (subject to any applicable
statutes of limitations).

(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE TRANSFEREE.

(i) In the event any of the Transferors breach (or in the event
any third party alleges facts that, if true, would mean any of the
Transferors has breached) any of their representations, warranties, and
covenants contained herein, and, if there is an applicable survival period
pursuant to Section 7(a) above, provided that the Transferee makes a
written claim for indemnification against any such Transferor pursuant to
Section 11(g) below within such survival period, then such Transferor
agrees to indemnify the Transferee from and against the entirety of any
Adverse Consequences the Transferee may suffer through and after the date
of the claim for indemnification (including any Adverse Consequences the
Transferee may suffer after the end of any applicable survival period)
resulting from, arising out of, relating to, in the nature of, or caused by
the breach (or the alleged breach).

(ii) Each Transferor agrees to indemnify the Transferee from and
against the entirety of any Adverse Consequences the Transferee may suffer
resulting

26
<PAGE>

from, arising out of, relating to, in the nature of, or caused by any
Liability of the Target controlled by such Transferor immediately prior to
the Effective Date and its Subsidiaries for any Taxes of such Target and
its Subsidiaries with respect to any Tax year or portion thereof ending on
or before the Effective Date (or for any Tax year beginning before and
ending after the Effective Date to the extent allocable (determined in a
manner consistent with Section 8(c)) to the portion of such period
beginning before and ending on the Effective Date), to the extent such
Taxes are not reflected in the reserve for Tax Liability (rather than any
reserve for deferred Taxes established to reflect timing differences
between book and Tax income) shown on the face of such Targets most recent
financial statements (rather than in any notes thereto), as such reserve is
adjusted for the passage of time through the Effective Date in accordance
with the past custom and practice of such Target and its Subsidiaries in
filing their Tax Returns.

(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE TRANSFERORS. In the
event the Transferee breaches (or in the event any third party alleges facts
that, if true, would mean the Transferee has breached) any of its
representations, warranties, and covenants contained herein, and, if there is an
applicable survival period pursuant to Section 7(a) above, provided that the
Transferors make a written claim for indemnification against the Transferee
pursuant to Section 11(g) below within such survival period, then the Transferee
agrees to indemnify the Transferors from and against the entirety of any Adverse
Consequences the Transferors may suffer through and after the date of the claim
for indemnification (including any Adverse Consequences the Transferors may
suffer after the end of any applicable survival period) resulting from, arising
out of, relating to, in the nature of, or caused by the breach (or the alleged
breach).

(d) MATTERS INVOLVING THIRD PARTIES.

(i) If any third party shall notify any Party (the "INDEMNIFIED
PARTY") with respect to any matter (a "THIRD PARTY CLAIM") which may give
rise to a claim for indemnification against any other Party (the
"INDEMNIFYING PARTY") under this Section 7, then the Indemnified Party
shall promptly notify each Indemnifying Party thereof in writing; PROVIDED,
HOWEVER, that no delay on the part of the Indemnified Party in notifying
any Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.

(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (A) the
Indemnifying Party notifies the Indemnified Party in writing within 15 days
after the Indemnified Party has given notice of the Third Party Claim that
the Indemnifying Party will indemnify the Indemnified Party from and
against the entirety of any Adverse Consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified
Party that the

27
<PAGE>

Indemnifying Party will have the financial resources to defend against the
Third Party Claim and fulfill its indemnification obligations hereunder,
(C) the Third Party Claim involves only money damages and does not seek an
injunction or other equitable relief, (D) settlement of, or an adverse
judgment with respect to, the Third Party Claim is not, in the good faith
judgment of the Indemnified Party, likely to establish a precedential
custom or practice materially adverse to the continuing business interests
of the Indemnified Party, and (E) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.

(iii) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 7(d)(ii) above,
(A) the Indemnified Party may retain separate co-counsel at its sole cost
and expense and participate in the defense of the Third Party Claim, (B)
the Indemnified Party will not consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party (not to be withheld
unreasonably), and (C) the Indemnifying Party will not consent to the entry
of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnified Party (not
to be withheld unreasonably).

(iv) In the event any of the conditions in Section 7(d)(ii)
above is or becomes unsatisfied, however, (A) the Indemnified Party may
defend against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it
reasonably may deem appropriate (and the Indemnified Party need not consult
with, or obtain any consent from, any Indemnifying Party in connection
therewith), (B) the Indemnifying Parties will reimburse the Indemnified
Party promptly and periodically for the costs of defending against the
Third Party Claim (including reasonable attorneys' fees and expenses), and
(C) the Indemnifying Parties will remain responsible for any Adverse
Consequences the Indemnified Party may suffer resulting from, arising out
of, relating to, in the nature of, or caused by the Third Party Claim to
the fullest extent provided in this Section 7.

(v) Notwithstanding anything contained in this Section 7(d),
in no event shall the liability to or obligation to indemnify any other
Party of any Transferor exceed the value of his ownership interest in the
Transferee.

(e) OTHER INDEMNIFICATION PROVISIONS. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy any Party may have for breach of representation,
warranty, or covenant. The Transferors hereby agrees that they will not make any
claim for indemnification against any of the Targets and their Subsidiaries by
reason of the fact that they were a director, officer, employee, or agent of any
such entity or were serving at the request of any such entity as a partner,
trustee, director, officer, employee, or agent of another entity (whether such
claim is for judgments, damages, penalties, fines, costs, amounts paid in
settlement, losses, expenses, or otherwise and whether

28
<PAGE>

such claim is pursuant to any statute, charter document, bylaw, agreement, or
otherwise) with respect to any action, suit, proceeding, complaint, claim, or
demand brought by the Transferee against the Transferors (whether such action,
suit, proceeding, complaint, claim, or demand is pursuant to this Agreement,
applicable law, or otherwise).

8. TAX MATTERS. The following provisions shall govern the allocation of
responsibility as between the Transferee and the Transferors for certain tax
matters following the Effective Date:

(a) TAX PERIODS ENDING ON OR BEFORE THE EFFECTIVE DATE. The Transferee
shall prepare or cause to be prepared and file or cause to be filed all Tax
Returns for the Targets and their Subsidiaries for all periods ending on or
prior to the Effective Date which are filed after the Effective Date. The
Transferee shall permit the Transferors to review and comment on each such Tax
Return of their respective Target described in the preceding sentence prior to
filing. The Transferors shall reimburse the Transferee for Taxes of their
respective Targets and their Subsidiaries with respect to such periods within
fifteen (15) days after payment by the Transferee or the Targets and their
Subsidiaries of such Taxes to the extent such Taxes are not reflected in the
reserve for Tax Liability (rather than any reserve for deferred Taxes
established to reflect timing differences between book and Tax income) shown on
the face of the last balance sheet of the Targets prepared prior to the
Effective Date.

(b) TAX PERIODS BEGINNING BEFORE AND ENDING AFTER THE EFFECTIVE DATE. The
Transferee shall prepare or cause to be prepared and file or cause to be filed
any Tax Returns of the Targets and their Subsidiaries for Tax periods which
begin before the Effective Date and end after the Effective Date. The
Transferors shall pay to the Transferee within fifteen (15) days after the date
on which Taxes are paid with respect to such periods an amount equal to the
portion of such Taxes which relates to the portion of such Taxable period ending
on the Effective Date to the extent such Taxes are not reflected in the reserve
for Tax Liability (rather than any reserve for deferred Taxes established to
reflect timing differences between book and Tax income) shown on the face of the
last balance sheet of their respective Targets prepared prior to the Effective
Date. For purposes of this Section, in the case of any Taxes that are imposed on
a periodic basis and are payable for a Taxable period that includes (but does
not end on) the Effective Date, the portion of such Tax which relates to the
portion of such Taxable period ending on the Effective Date shall (x) in the
case of any Taxes other than Taxes based upon or related to income or receipts,
be deemed to be the amount of such Tax for the entire Taxable period multiplied
by a fraction the numerator of which is the number of days in the Taxable period
ending on the Effective Date and the denominator of which is the number of days
in the entire Taxable period, and (y) in the case of any Tax based upon or
related to income or receipts be deemed equal to the amount which would be
payable if the relevant Taxable period ended on the Effective Date. Any credits
relating to a Taxable period that begins before and ends after the Effective
Date shall be taken into account as though the relevant Taxable period ended on
the Effective Date. All determinations necessary to give

29
<PAGE>

effect to the foregoing allocations shall be made in a manner consistent with
prior practice of the Targets and their Subsidiaries.

(i) The Transferee, the Targets and their Subsidiaries and the
Transferors shall cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the filing of Tax Returns
pursuant to this Section and any audit, litigation or other proceeding with
respect to Taxes. Such cooperation shall include the retention and (upon
the other party's request) the provision of records and information which
are reasonably relevant to any such audit, litigation or other proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.
The Targets and their Subsidiaries and the Transferors agree (A) to retain
all books and records with respect to Tax matters pertinent to the Targets
and their Subsidiaries relating to any taxable period beginning before the
Effective Date until the expiration of the statute of limitations (and, to
the extent notified by the Transferee or the Transferors, any extensions
thereof) of the respective taxable periods, and to abide by all record
retention agreements entered into with any taxing authority, and (B) to
give the other party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the other party
so requests, the Targets and their Subsidiaries or the Transferors, as the
case may be, shall allow the other party to take possession of such books
and records.

(ii) The Transferee and the Transferors further agree, upon
request, to use their best efforts to obtain any certificate or other
document from any governmental authority or any other Person as may be
necessary to mitigate, reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the transactions
contemplated hereby).

(iii) The Transferee and the Transferors further agree, upon
request, to provide the other party with all information that either party
may be required to report pursuant to Section 6043 of the Code and all
Treasury Department Regulations promulgated thereunder.

(d) TAX SHARING AGREEMENTS. All tax sharing agreements or similar
agreements with respect to or involving the Targets and their Subsidiaries shall
be terminated as of the Effective Date and, after the Effective Date, the
Targets and their Subsidiaries shall not be bound thereby or have any liability
thereunder.

(e) CERTAIN TAXES. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement (including any New York
City Transfer Tax and any similar tax imposed in

30
<PAGE>

other states or subdivisions), shall be paid by the Transferors when due, and
the Transferors will, at their own expense, file all necessary Tax Returns and
other documentation with respect to all such transfer, documentary, sales, use,
stamp, registration and other Taxes and fees, and, if required by applicable
law, the Transferee will, and will cause its affiliates to, join in the
execution of any such Tax Returns and other documentation.

9. EXCLUSION OF TRANSFERORS, READJUSTMENT OF SHARE ALLOCATION.

(a) EXCLUSION OF TRANSFEROR. If, prior to the Effective Date, it is
determined by the Transferee that the Financial Information of any Target is not
accurate in any material respect then the Parties, other than the Transferor who
controlled such Target prior to the Effective Date, shall determine, in their
sole discretion, whether to renegotiate the amount of Shares allocated to each
Transferor pursuant to this Agreement or to exclude such Transferor from the
Agreement. If any Transferor is so excluded from this Agreement, then the
remaining parties shall readjust the Share allocation set forth on SCHEDULE A.

(b) ALLOCATION OF EXPENSES. Each Transferor will cause his respective
Target to enter into the Expense Allocation Agreement, pursuant to which each
Target shall agree to be liable for one third of the expenses of the Transferee
in connection with the IPO up to the sooner of the date such Target is, for
whatever reason, no longer involved in the transactions, or the Transferee
determines that the IPO will not occur, provided, however, that no Target shall
be responsible for more than $50,000 of such expenses.

10. MISCELLANEOUS.

(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Effective Date without the prior written approval of
the Transferee and the Transferors; PROVIDED, HOWEVER, that any Party may make
any public disclosure it believes in good faith is required by applicable law
(in which case the disclosing Party will use its reasonable best efforts to
advise the other Parties prior to making the disclosure).

(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.

(c) ENTIRE AGREEMENT. This Agreement (including the documents referred to
herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.

(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns.

31
<PAGE>

No Party may assign either this Agreement or any of his or its rights,
interests, or obligations hereunder without the prior written approval of the
Transferee and the Transferors; PROVIDED, HOWEVER, that the Transferee may (i)
assign any or all of its rights and interests hereunder to one or more of its
Affiliates and (ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of which cases the Transferee nonetheless
shall remain responsible for the performance of all of its obligations
hereunder).

(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

(f) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

(g) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient at the
addresses set forth on the signature page hereto. Any Party may send any
notice, request, demand, claim, or other communication hereunder to the intended
recipient at the address set on the signature page hereto using any other means
(including personal delivery, expedited courier, messenger service, telecopy,
telex, ordinary mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any Party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.

(h) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of New York without giving effect
to any choice or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.

(i) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Transferee and the Transferors. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.

32
<PAGE>

(j) SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

(k) EXPENSES. Each of the Parties, the Targets, and their Subsidiaries
will bear his or its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby over and above the reimbursed amount set forth in Section 5(d). The
Transferors agree that none of the Targets or their Subsidiaries has borne or
will bear any of the Transferors' costs and expenses (including any of their
legal fees and expenses) in connection with this Agreement or any of the
transactions contemplated hereby.

(l) CONSTRUCTION. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the authorship of any of the
provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
Party has not breached shall not detract from or mitigate the fact that the
Party is in breach of the first representation, warranty, or covenant.

(m) INCORPORATION OF EXHIBITS, ANNEXES, AND SCHEDULES. The Exhibits,
Annexes, and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.

(n) SPECIFIC PERFORMANCE. Each of the Parties acknowledges and agrees that
the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to the provisions set
forth in Section 10(o) below), in addition to any other remedy to which they may
be entitled, at law or in equity.

(o) SUBMISSION TO JURISDICTION. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in New York, New York, in any
action or proceeding arising out

33
<PAGE>

of or relating to this Agreement and agrees that all claims in respect of the
action or proceeding may be heard and determined in any such court. Each Party
also agrees not to bring any action or proceeding arising out of or relating to
this Agreement in any other court. Each of the Parties waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety, or other security that might be required of any other
Party with respect thereto.

34
<PAGE>

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.

TRANSFEREE: PARADISE MUSIC & ENTERTAINMENT, INC.

By:________________________________
John Loeffler
President

Address for notice:
420 West 45th Street
Fifth Floor
New York, New York 10036

With a copy to:

Walter M. Epstein, Esq.
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
29th Floor
New York, New York 10112

TRANSFERORS: ________________________________
Name: Brian Doyle

Address for notice:
All Access Entertainment Management Group, Inc.
425 Madison Avenue
Suite 802
New York, New York 10036

With a copy to:

Philip G. Nappo III, Esq.
900 Third Avenue - 16th Floor
New York, New York 10022

________________________________
Name: Richard Flynn

35
<PAGE>

Address for notice:

All Access Entertainment Management Group, Inc.
425 Madison Avenue
Suite 802
New York, New York 10036

With a copy to:

Philip G. Nappo III, Esq.
900 Third Avenue - 16th Floor
New York, New York 10022

________________________________
Name: John Loeffler

Address for notice:

Rave Music Group, Inc.
420 West 45th Street
Fifth Floor
New York, New York 10036

________________________________
Name: Jon Small

Address for notice:

Picture Vision, Inc.
209 10th Avenue South
Suite 425
Nashville, Tennessee 37203

36
<PAGE>

SCHEDULE A

DISTRIBUTION OF SHARES AMONG TRANSFERORS

Transferor Number of Shares
- ---------- ----------------

Brian Doyle 145,500
Richard Flynn 145,500
John Loeffler 291,000
Jon Small 291,000

<PAGE>

SCHEDULE B

SCHEDULE OF COSTS INCURRED

Transferor Expenses
- ---------- --------

All Access $13,000
Picture Vision $ 9,000
Rave $ 9,000
<PAGE>

DISCLOSURE SCHEDULE

Section 4(a)(i) Directors of All Access
-----------------------

Brian Doyle
Richard Flynn

Officers of All Access
-----------------------
Name Title
---------------------- -----

Brian Doyle President
Richard Flynn Vice President, Secretary
& Treasurer

All Access has no Subsidiaries

Section 4(a)(ii) Record Holders of All Access Shares(a)(b)
-----------------------------------------
Name Amount
------------------------------------------ ------

Brian Doyle 10
Richard Flynn 10

Section 4(a)(v)(c) Items of Intellectual Property owned by All Access
--------------------------------------------------

None

- ---------------

(a) Specifically excluded from the Exchange Agreement to which this Schedule is
a part are securities or ownership interests owned by Messrs. Doyle and
Flynn in projects set forth on Schedule A to their respective Employment
Agreements.

(b) While not representing ownership interests in All Access or its
Subsidiaries, it is All Access' policy, consistent with industry standards,
to pay certain employees who either identify, develop and/or manage artists
up to 5% of the revenues payable to All Access as a result of its
representation of such artists.
<PAGE>

Licenses, Agreements, or other permissions
which All Access has granted to third parties
with respect to any of its Intellectual Property
------------------------------------------------

None

Section 4(a)(v)(d) Items of Intellectual Property owned by
third parties and used by All Access pursuant
to license, sublicense, agreement, or permission
------------------------------------------------

None

Section 4(a)(vi) All Access leases its office space at 425 Madison
Avenue, Suite 802, and the copier and telecopier used
therein; Certain of the computers used by All Access,
or its business, are leased.

Section 4(b)(i) Directors of Rave
-----------------

John Loeffler

Officers of Rave
----------------
Name Title
---------------- -----

John Loeffler President

Section 4(b)(ii) Record Holders of Rave Shares
-----------------------------
Name Amount
----------------------------- ------
John Loeffler 200
<PAGE>

Section 4(b)(v)(c) Items of Intellectual Property owned by Rave
--------------------------------------------

All items of Intellectual Property including all
musical works, compositions and publishing owned by
John Leffler Music, Inc. except for John Loeffler's
five CD stock music library and any musical works,
compositions or publishing contained therein. Copies
of such Intellectual Property can be inspected at
Rave's offices.

Licenses, Agreements, or other permissions
which Rave has granted to third parties
with respect to any of its Intellectual Property
------------------------------------------------

All Licenses, Agreements, or other permissions which
Rave has granted to third parties with respect to any
of its Intellectual Property other than Licenses,
Agreements, or other permissions which Rave has granted
to third parties with respect to John Loeffler's five
CD stock music library and any musical works,
compositions or publishing contained therein. Copies
of such Licenses can be inspected at Rave's offices.

Section 4(b)(v)(d) Items of Intellectual Property owned by
third parties and used by Rave pursuant
to license, sublicense, agreement, or permission
------------------------------------------------

None

Section 4(b)(vii) Rave has no Subsidiaries

Section 4(c)(i) Directors of Picture Vision
---------------------------

Jon Small

Officers of Picture Vision
--------------------------
Name Title
-------------------------- -----

Jon Small President
Jeanine Small Vice President
<PAGE>

Section 4(c)(ii) Record Holders of Picture Vision Shares
---------------------------------------
Name Amount
--------------------------------------- ------

Jon Small 100

Section 4(c)(v)(c) Items of Intellectual Property
owned by Picture Vision
------------------------------

None

Licenses, Agreements, or other permissions
which Picture Vision has granted to third parties
with respect to any of its Intellectual Property
-------------------------------------------------

None

Section 4(c)(v)(d) Items of Intellectual Property owned by
third parties and used by Picture Vision pursuant
to license, sublicense, agreement, or permission
-------------------------------------------------

None

Section 4(c)(vii) Picture Vision has no Subsidiaries

<PAGE>

EXHIBIT 10-2

EMPLOYMENT AGREEMENT

AGREEMENT made as of the 9th day of October, 1996, by and between
PARADISE MUSIC & ENTERTAINMENT, INC., a Delaware corporation having offices
at 420 West 45th Street, New York, New York 10036 (the "COMPANY"), and BRIAN
DOYLE, an individual with an address at 420 West 45th Street, New York, NY
10036 (the "EXECUTIVE").

W I T N E S S E T H:
WHEREAS, the Executive is currently an executive officer of All Access
Entertainment Management Group, Inc. ("ALL ACCESS"), a privately held company
co-managed by the Executive.

WHEREAS, a registration statement ("REGISTRATION STATEMENT") is to be
filed by the Company in connection with the Company's initial public offering
(the "IPO");

WHEREAS, in connection with and effective simultaneously with the
execution of this Agreement All Access will participate in a closing pursuant
to the terms of an exchange agreement (the "EXCHANGE AGREEMENT") with the
Company and other constituent parties referred to therein;

WHEREAS, the Company and the Executive wish to set forth the terms and
conditions of the Executive's employment by the Company effective as of the
closing date of the IPO ("Effective Date") under the terms of this Agreement;

WHEREAS, it is understood and agreed by the parties hereto that the
Executive shall co-manage with Richard Flynn the normal day to day operations
of the continuing business of All Access after the Effective Date whether in
the form of a separate subsidiary or division ("ALL ACCESS OPERATING") on and
after the Effective Date, subject to the control of the Board of Directors of
the Company with respect to matters not constituting normal day to day
operations.

WHEREAS, it is understood and agreed by the parties hereto that the
Executive shall co-manage with Richard Flynn the normal day to day operations
of the new business to be funded promptly following the IPO, whether in the
form of a separate subsidiary or division (the "Record Label"), subject to
the control of the Board of Directors of the Company with respect to matters
not constituting normal day to day operations.

NOW, THEREFORE, the parties hereto agree as follows:

<PAGE>

1. EMPLOYMENT. The Company agrees to employ the Executive for the Term
specified in Section 2 and in the capacities set forth in Section 3 and the
Executive agrees to accept such employment, upon the terms and conditions
hereinafter set forth.

2. TERM. This Agreement shall be for a term commencing on the
Effective Date and expiring three years thereafter unless otherwise sooner
terminated as provided in this Agreement (the "TERM"). This Agreement shall
automatically be extended for additional one year periods unless either party
advises the other, in a writing delivered not less than 90-days prior to the
expiration of the Term then in effect, of its intention not to extend this
Agreement. If this Agreement is so extended, then the "Term" shall also be
deemed to include such extensions.

3. DUTIES AND RESPONSIBILITIES.

(a) During the Term, the Executive shall serve as an Executive Vice
President and Director of the Company and shall also serve as a co-principal
executive officer (either president or executive vice president) of All
Access Operating and the Record Label with such responsibility and status
commensurate with such position and at least equivalent to that which the
Executive currently holds with All Access. During the Term, the Executive
shall, along with Brian Doyle and subject only to the review of the Board of
Directors regarding matters not involving day to day operations or not
otherwise in the ordinary course of business, determine the policies for and
have full control over the normal day to day operations of All Access
Operating. With respect to any bonus pool which the Company may create which
is solely payable to employees of All Access Operating or the Record Label,
the Executive and Richard Flynn shall determine the allocation and payment of
bonuses thereunder.

(b) In serving the Company, the Record Label and All Access
Operating the Executive shall report to the Board of Directors of the
Company. The Executive and Richard Flynn shall be responsible for the hiring
and firing, and compensation of all other employees under their direction and
consistent with the All Access and/or the Record Label Operating Budget.

(c) For purposes hereof, the All Access Operating Budget for the
fiscal year ending June 30, 1997 has been approved and consists of the budget
presented as of the date hereof with modifications therein based on actual
operations thereafter. Thereafter budgets for annual fiscal periods prepared
on a like basis shall be presented for review and approval by the Company's
Board of Directors. Such review and approval shall be consistent with sound
business practice.

(d) The parties agree that for the twelve month period following
the effective date of the IPO, the Company will, from the proceeds of the
IPO, invest an amount of not less than $200,000 in developing and expanding
the business and operations of All

-2-
<PAGE>

Access Operating in accordance with a budget prepared by Messrs., Doyle and
Flynn, and approved by the Company's Board of Directors (the "Development
Budget").

(e) For purposes hereof, the term Record Label Operating Budget
shall mean all costs and expenses associated with developing and operating
the business and affairs of the Record Label, which budget shall be
established at not less than $650,000 (plus the Base Salary of Brian Doyle)
for the 12 month period following the Effective Date of the IPO ("Initial
Period"). In addition to said $650,000, it is agreed that the Record Label
will pay the Executive a base salary of $150,000 (the "Base Salary").
Thereafter, the Record Label Operating Budget shall be developed by Messrs.
Doyle and Flynn and presented to the Board of Directors for approval. The
Board of Directors shall approve the expenditure of an additional $650,000
(plus the Base Salary of Brian Doyle) for the next 12 month period thereafter
if the following criteria have been met:

(i) a distribution agreement covering the releases of the
Record Label and conforming with normal industry standards has been executed
within the Initial Period with one of the six main record distribution
companies or such other distribution company reasonably acceptable to the
Board of Directors;

(ii) the Record Label has filled the positions of
marketing/sales and radio/promotion with persons having a level of experience
and reputation reasonably acceptable to the Board of Directors;

(iii)the Record Label has released at least two records under
the distribution agreement within the Initial Period; and

(iv)the Company has sold at least 70,000 units under the
distribution agreement during the Initial Period.

(f) During the Term, the Executive shall serve on the Executive
Advisory Committee of the Company, which shall be a committee comprised of
the principal executive officers of each subsidiary or division which shall
advise the Board of Directors on business matters affecting the Company,
including potential business ventures and acquisitions. Messrs. Doyle and
Flynn shall each be entitled to one vote on the Executive Advisory Committee.

(g) The Executive shall, except as provided in Schedule A, devote
substantially all his business efforts to the affairs of the Company. Other
permitted business activities of the Executive shall not be competitive and
shall not conflict with the terms of this Agreement. The Executive will (i)
devote his best efforts, skill and ability to promote the Company's
interests; (ii) carry out his duties in a competent and professional manner;
(iii) work with other employees of the Company in a competent and
professional manner; and (iv) generally promote the best interests of the
Company. Notwithstanding the foregoing, the Executive may engage in
additional activities if such activities are approved by

-3-

<PAGE>

a majority of the Board of Directors. After such approval SCHEDULE A shall be
amended to include such activities.

(h) The Executive's principal place of employment shall be at the
principal offices of the Company (and such locations to which such principal
office shall be relocated) subject to reasonable travel requirements on
behalf of the Company. If during the Term, the Company requires the
Executive to move his principal place of business outside of the greater
metropolitan area (a radius of more than 30 miles from Manhattan) and
Executives chooses not to accept such relocation, then the Executive may so
advise the Company, in writing, and this Agreement shall be deemed null and
void and no longer of any force and effect, and Executive shall be released
from all provisions and restrictions contained herein, including, without
limitation, the restrictions set forth in Section 11 hereof. As severance,
the Company shall forthwith pay the Executive, in equal monthly installments
the balance of his Base Salary for the remainder of the Term then in effect.

4. COMPENSATION.

(a) As compensation for services hereunder and in consideration of
his agreement not to compete as set forth in Section 10 below, the Company
shall pay the Executive during the Term, in accordance with the Company's
normal payroll practices, base salary compensation at an annual rate of
$150,000 (the "BASE SALARY"). Upon the Executive's written request, the
Company shall advance the Executive up to an additional $112,500 on the
Effective Date with such advance to be offset against the Executive's bonus.
The initial advance if requested on or after the date hereof shall be granted
automatically. The next request shall be made no earlier than the end of the
Company's first fiscal quarter following the date hereof; and all subsequent
requests shall be made no earlier than the end of each subsequent fiscal
quarter. Each subsequent request shall be reviewed by, and will be made only
if approved by, the Company's Compensation Committee based upon a
determination as to the likely attainment of budgeted goals after giving
consideration to prior compensation paid to the Executive. If the
Executive's bonus is not enough to offset such advance, then the balance of
such advance which has not been offset shall be offset in six equal monthly
installments against compensation otherwise payable to the Executive.

(b) The Board of Directors shall establish a first tier bonus pool
("TIER I POOL") which the Board of Directors shall allocate among the
Company's divisions (or subsidiaries) with each division receiving its
allocated amount if it meets certain earnings targets after deducting all
expenses and taxes (before giving effect to the Tier I Pool). The amount to
be allocated, the targets ("TARGETS") to be met and the basis for
calculation, all with respect to the Tier I Pool, shall be set annually in
advance by the Board of Directors. For the initial one year period under the
Term of this Agreement the target shall be set forth on SCHEDULE B, attached
hereto. The Executive and Richard Flynn shall determine, in their sole
discretion, the distribution of the Tier I Pool funds allocated to All Access
Operating. It is acknowledged and understood that the Executive and Richard
Flynn shall have the discretion to allocate some or all of said funds to
themselves.

-4-

<PAGE>

(c) The Board of Directors of the Company shall also establish a
second tier bonus pool ("TIER II POOL") which the Board of Directors shall,
in its discretion, allocate to employees of the Company, including employees
of subsidiaries and divisions. The Tier II Pool shall be comprised of 10% of
the Company's net income before taxes above the aggregate net profits before
taxes established as the Targets in the Tier I Pools for said fiscal year.

(d) The Board of Directors of the Company shall also establish the
Record Label Bonus Plan and the Special Bonus Plan attached as Schedules C
and D respectively.

5. BENEFITS.

(a) During the Term, the Executive shall be entitled to participate
in the benefit plans established by the Company for the benefit of its key
executives.

(b) The Executive shall be entitled to four (4) weeks of paid
vacation.

(c) The Company shall establish a plan (the "PLAN") qualified under
Section 401(k) of the Internal Revenue Code of 1986, as amended (the "CODE").
The Plan shall provide for the matching by the Company of employee pre-tax
contributions to the Plan up to the limits allowed by law. The Company shall
assure that the participants in, and provisions of, the Plan are such as to
remain qualified under the Code. The Company shall be entitled to make such
reasonable restrictions on contributions required to avoid any risk of
failing to remain qualified under the Code.

6. KEY MAN INSURANCE. The Company shall have the right to obtain key
man life insurance for the benefit of the Company on the life of the
Executive. If requested by the Company, the Executive shall submit to such
physical examination and otherwise take such actions and execute and deliver
such documents as may be reasonably necessary to enable the Company to obtain
such life insurance. The Executive has no reason to believe that his life is
not insurable with a reputable insurance company at rates now prevailing in
the City of New York for healthy men of his age.

7. DISCHARGE BY COMPANY. The Company shall be entitled to
immediately terminate the Term and to discharge the Executive for cause,
which shall be limited to the following grounds:

(i) Conviction of a felony; or

(ii) Commission of a willful or intentional act which could injure
the reputation, business or business or business relationships of the
Company including the violation of the terms of Sections 10 and 11 hereof;

-5-

<PAGE>

8. DISABILITY, DEATH.

(a) If the Executive shall be unable to perform his duties
hereunder by virtue of illness or physical or mental incapacity or disability
(from any cause or causes whatsoever) in substantially the manner and to the
extent required hereunder prior to the commencement of such disability as
determined by a competent medical doctor (all such causes being herein
referred to as "DISABILITY") and the Executive shall fail to have performed
substantially such duties for 90 consecutive days or for periods aggregating
180 days, whether or not continuous, in any continuous period of one year
(such 90th or 180th day to be known as the "DISABILITY DATE"), the Company
shall have the right to terminate the Executive's employment hereunder as at
the end of any calendar month thereafter upon written notice to him. The
Executive shall be entitled to his Base Salary for the remainder of the Term
payable on the Company's regular payroll schedule and to bonuses earned
through such date determined at the end of the fiscal year in which
Disability occurred, with said bonuses limited to the prorated portion equal
to the portion of the fiscal year prior to termination.

(b) In case of the death of the Executive, this Agreement shall
terminate and the Company shall be obligated to pay to the Executive's estate
or as otherwise directed by the Executive's duly appointed and authorized
legal representative, his Base Salary for the remainder of the Term payable
on the Company's regular payroll schedule and to bonuses earned through such
date determined at the end of the fiscal year in which Death occurred, with
said bonuses limited to the prorated portion equal to the portion of the
fiscal year prior to termination.

9. VOLUNTARY TERMINATION. If the Executive voluntarily terminates his
employment prior to the end of the Term, he shall only be entitled to receive
compensation accrued through the date of termination.

10. CONFIDENTIAL INFORMATION. The Executive recognizes that he will
occupy a position of trust with respect to business and technical information
of a secret or confidential nature which is the property of the Company, or
any of its affiliates, and which has been and will be imparted to him from
time to time in the course of his employment with the Company. In light of
this understanding, the Executive agrees that:

(a) the Executive shall not at any time knowingly use or disclose,
directly or indirectly, any of the confidential information or trade secrets
which is the property of the Company, or any of its affiliates, to any
person, except that he may use and disclose to authorized Company personnel,
licensees or franchisees in the course of his employment; and

(b) within five (5) days from the date upon which his employment
with the Company is terminated, for any reason or for no reason, or otherwise
upon the request of the Company, he shall return to the Company any and all
documents and materials which constitute or contain the confidential
information or trade secrets of the Company, or any of its affiliates.

-6-

<PAGE>

For purposes of this Agreement, the terms "CONFIDENTIAL INFORMATION" or
"TRADE SECRETS" shall include all information of any nature and in any form
which is owned by the Company, or any of its affiliates, and which is not
publicly available or generally known to persons engaged in businesses
similar to that of the Company, or any of its affiliates. Notwithstanding the
foregoing, when the Executive's employment with the Company is terminated,
for whatever reason, the limitations provided in this Section 10 shall not
prevent the Executive from using for his own benefit any information which he
acquired prior to the Effective Date.

11. NON-COMPETITION.

(a) The Executive agrees that his services hereunder are of a
special character, and his position with the Company places him in a position
of confidence and trust with the Company's artists, clients, customers and
employees. The Executive and the Company agree that in the course of
employment hereunder, the Executive has and will continue to develop a
personal acquaintanceship and relationship with the Company's artists,
clients and customers, and a knowledge of those artists', clients' and
customers' affairs and requirements which may constitute the Company's
primary or only contact with such artists, clients and customers. The
Executive consequently agrees that it is reasonable and necessary for the
protection of the goodwill and business of the Company that the Executive
make the covenants contained herein. Accordingly, the Executive agrees that
while he is in the Company's employ the Executive will not, without the prior
written consent of the Company, either directly or indirectly, or in any
capacity whether as a promoter, proprietor, partner, joint venturer,
employee, agent, consultant, director, officer, manager, shareholder (except
as a shareholder holding less than five percent (5%) of a publicly traded
company's issued and outstanding capital stock, or otherwise) work for, act
as a consultant to or own any interest in any direct competitor of the
Company which operates in or provides services essentially the same as the
Company in any portion of the geographic territory where the Company operates
or sells its products or services, except as allowed pursuant to Section 3(c)
of this Agreement. The Executive further agrees that during the Term, and for
the one year period following the Executive's termination of employment with
the Company, the Executive will not solicit, entice, induce or persuade: (i)
any employee, artist, client or customer of the Company; or (ii) any person
or entity had been engaged in negotiations with the Company to become, an
employee, artist, client or customer of the Company during the six month
period prior to the Executive's termination of employment with the Company,
to alter, terminate or refrain from extending or renewing any contractual or
other relationship with the Company, or commence a similar or substantially
similar relationship with the Executive, any entity with whom the Executive
is affiliated or employed by or any direct competitor of the Company.
Notwithstanding the foregoing, when the Executive's employment with the
Company is terminated, for whatever reason, the Executive may continue to do
business, without violating the terms hereof, with, any customer, client or
artist of the Company which was a customer, client or artist of the
Executive, or any company controlled by the Executive, prior to the Effective
Date.

-7-
<PAGE>

(b) As used in this Section 11, the term "COMPANY" shall include
subsidiaries, licensees, sub-licensees and franchisees of the Company, the
term "CUSTOMER" shall mean any person or entity who is then, or who had been
at any time during the one year period immediately preceding the date of
termination of the Executive's employment, a customer of the Company, and the
term "ARTIST OR CLIENT" shall mean any person or entity who is then, or who
had been at any time during the one year period immediately preceding the
date of termination of the Executive's employment, an artist or client
represented by, signed by, working for or collaborating with the Company.

(c) The parties hereto agree that the duration and area for which
the covenant not to compete set forth herein is to be effective are
reasonable. In the event that any court determines that the time period or
the area, or both of them, are unreasonable and that such covenant is to that
extent unenforceable, the parties hereto agree that the covenant shall remain
in full force and effect for the greatest time period and in the greatest
area that would not render it unenforceable.

(d) If the Executive commits a material breach or is about to
commit a material breach, of any of the above provisions, the Company shall
have the right to temporary and preliminary injunctive relief to prevent the
continuance or commission of such breach prior to any hearing on the merits
and to have the provisions of this Agreement specifically enforced by any
court having equity jurisdiction without being required to post bond or other
security and without having to prove the inadequacy of the available remedies
at law, it being acknowledged and agreed that any such breach or threatened
breach will cause irreparable injury to the Company. In addition, the
Company may take all such other actions and remedies available to it under
law or in equity and shall be entitled to such damages as it can show it has
sustained by reason of such breach.

(e) The existence of any claim or cause of action of the Executive
against the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of those covenants
and agreements.

12. RESOLUTION OF DISPUTES. Any dispute by and among the parties hereto
arising out of or relating to this Agreement, the terms, conditions or a
breach thereof, or the rights or obligations of the parties with respect
thereto, shall be arbitrated in the City of New York, New York before and
pursuant to then applicable commercial rules and regulations of the American
Arbitration Association, or any successor organization. The arbitration
proceedings shall be conducted by a panel of three arbitrators, one of whom
shall be selected by the Company, one by the Executive (or his legal
representative) and the third arbitrator by the first two so chosen. The
parties shall use their best efforts to assure that the selection of the
arbitrators shall be completed within 30 days and the parties shall use their
best efforts to complete the arbitration as quickly as possible. In such
proceeding, the arbitration panel shall determine who is a substantially
prevailing party and shall award to such party its reasonable attorneys',
accountants' and other professionals' fees and its costs incurred in
connection with the proceeding. The award of the arbitration panel shall be
final, binding upon the

-8-

<PAGE>

parties and nonappealable and may be entered in and enforced by any court of
competent jurisdiction. such court may add to the award of the arbitration
panel additional reasonable attorneys' fees and costs incurred by the
substantially prevailing party in attempting to enforce such award.

13. ENFORCEABILITY. The failure of either party at any time to require
performance by the other party of any provision hereunder shall in no way
affect the right of that party thereafter to enforce the same, nor shall it
affect any other party's right to enforce the same, or to enforce any of the
other provisions of this Agreement; nor shall the waiver by either party of
the breach of any provision hereof be taken or held to be a waiver of any
subsequent breach of such provision or as a waiver of the provision itself.

14. ASSIGNMENT. This Agreement is a personal contract and the
Executive's rights and obligations hereunder may not be sold, transferred,
assigned, pledged or hypothecated by the Executive. The rights and
obligations of the Company hereunder shall be binding upon and run in favor
of the successors and assigns of the Company. If any assignment or transfer
of rights hereunder is attempted by the Executive contrary to the provisions
hereof, the Company shall have no further liability for payments hereunder.

15. MODIFICATION. This Agreement may not be canceled, changed, modified
or amended orally, and no cancellation, change, modification or amendment
shall be effective or binding, unless it is in writing, signed by both
parties to this Agreement.

16. SEVERABILITY; SURVIVAL. If any provision of this Agreement is held
to be void and unenforceable by a court of competent jurisdiction, the
remaining provisions of this Agreement nevertheless shall be binding upon the
parties with the same effect as though the void or enforceable part has been
severed and deleted.

17. NOTICE. Notices given pursuant to the provisions of this Agreement
shall be sent by certified mail, postage prepaid, or by overnight courier, or
by telex, telecopier or telegraph, charges prepaid, to the following address:

To the Company: Paradise Music & Entertainment, Inc.
420 West 45th Street
New York, New York 10036

with a copy to: Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10112
Attn: Walter M. Epstein, Esq.

To the Executive: Brian Doyle
420 West 45th Street
New York, New York 10036

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<PAGE>

18. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

19. NO CONFLICT. The Executive represents and warrants that he is not
subject to any agreement, instrument, order, judgment or decree of any kind,
or any other restrictive agreement of any character, which would prevent him
from entering into this agreement or which would be breached by the Executive
upon his performance of his duties pursuant to this agreement.

20. ENTIRE AGREEMENT. This agreement represents the entire agreement
between the Company and the Executive with respect to the subject matter
hereof, and all prior agreements relating to the employment of the Executive,
written or oral, are nullified and superseded hereby.

IN WITNESS WHEREOF, the parties have set their hands and seals on and as
of the day and year first above written.

PARADISE MUSIC & ENTERTAINMENT, INC.

By:
------------------------------------------------
Name:
Title:

------------------------------------------------
Brian Doyle

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<PAGE>

SCHEDULE A

The Executive may devote such time as the Executive deems appropriate,
without adversely affecting the Executive's time devoted to the business of
the Company, to work with the following companies:

Baseball Cares
Character References, Inc.
Cyberson Partners, L.P.
Digital Entertainment Marketing, Inc.
The Baseball Players Hall Of Fame
The World Of New York
Uniform Remote Control

<PAGE>

SCHEDULE B

TIER I POOL CALCULATION

Division Target Profitability Tier I Pool Amount
-------- -------------------- ------------------
<S> <C> <C>
All Access Entertainment $325,000 (Year 1) $325,000
Management Group, Inc.(1)(2)(3) $512,500 (Year 2)
$512,500 (Year 3)
$475,000 for all subsequent years

Picture Vision, Inc.(2) $375,000 (All Years) $225,000

John Leffler Music, Inc.(2) $375,000 (All Years) $225,000
Total....................................................................$775,000

</TABLE>

_____________
(1) This amount may be allocated as Messrs. Doyle and Flynn may determine in
their sole discretion.

(2) Target Profitability with respect to each fiscal year shall be determined
by the Company's independent auditors in accordance with generally accepted
accounting principles, consistently applied based on net revenues of the
applicable subsidiary before taxes after deducting all expenses, excluding
(i) costs relating to or arising out of physically relocating the
businesses, (ii) costs of consummating the IPO, the transactions
contemplated under the Exchange Agreement and all other matters relating
thereto including costs directly associated with being a public company,
(iii) the base salary of Richard Flynn, John Loeffler or Jon Small, as the
case may be, (iv) monies expended pursuant to the Development Budget, (v)
rent in excess of current rent unless, based on employee growth, larger
facilities are required or as a result of required lease escalations. It is
understood and agreed that the Executives will be allocated pro rata
amounts of their Tier 1 bonuses to the same extent that their operating
divisions or subsidiaries achieve Target Profitability.

(3) If the Target Profitability in Year 1 exceeds $325,000, the Target
Profitability amounts for years 2 and 3 shall each be reduced by one-half
of such excess up to an aggregate reduction of $75,000.

<PAGE>

SCHEDULE C

SPECIAL BONUS PLAN

Set forth below are the terms of a Special Bonus Plan which has been
established by the Company to reward employees in particular areas of the
Company's business for the profitable completion of designated special projects
in their area of business. To date, two special projects ("Special Projects")
have been identified, one through All Access Entertainment Management Group,
Inc. ("All Access") and one through Picture Vision, Inc. ("Picture Vision").
Additional Special Projects may be submitted to the Compensation Committee for
its approval.

The Special Bonus Plan is as follows:

1. BUSINESS INCLUDED: The Special Projects as identified above.

2. BONUS THRESHOLD: The "Bonus Threshold" for a Special Project shall be
$1,000,000 of Special Project Net Profits.

3. SPECIAL PROJECT NET PROFIT; ADJUSTED SPECIAL PROJECT NET PROFIT: The
term "Special Project Net Profit" shall mean the net earnings from a Special
Project after deduction of all proper allocable costs (excluding costs that
would have been excluded for purposes of computing Tier 1 compensation) but
before income taxes and the bonus determined hereunder, all as determined by the
Company's independent auditors in accordance with generally accepted accounting
principles consistently applied. The term "Adjusted Special Project Net Profit"
shall mean Special Project Net Profits reduced by the amount of Tier 1
compensation paid to the Executive(s) of All Access or Picture Vision, as the
case may be, which relates to the period in which the Special Project Net
Profits were earned. As an example, if All Access produced $2,000,000 of
Special Project Net Profit in fiscal 1997 and paid total Tier 1 compensation of
$500,000, with respect to the corresponding period, the Adjusted Special Project
Net Profits would be $1,500,000 and the bonus would be $225,000. Assuming the
Bonus Threshold has been met for any Special Project, any further royalties or
residuals related thereto ("Future Royalty Revenue") shall be subject to a bonus
as set forth below.

4. BONUS AMOUNT: The bonus shall be 15% of Adjusted Special Project Net
Profits and 15% of Future Royalty Revenue.

5. BONUS DETERMINATION: The bonus determination shall be made and paid
within 45 days after the audited financial statements of the Company for each
fiscal year. The calculation shall be prepared by the Company's independent
auditors and shall be final.

<PAGE>

SCHEDULE D

RECORD LABEL BONUS PLAN

Upon the consummation of the initial public offering by the Company,
an initial record label will be established through a wholly owned subsidiary
("PRM") to be operated under the direction of Brian Doyle and Richard Flynn.
Set forth below is a bonus arrangement to compensate Brian Doyle, Richard Flynn
and others designated by them upon meeting the targets set forth below This
bonus, which is a one-time bonus only, is in addition to any other bonuses of
the Company including, without limitation the Tier I and Tier 2 bonus set forth
in the Employment Agreements of Brian Doyle and Richard Flynn.

The Record Label Bonus Plan is as follows:

1. BUSINESS INCLUDED: The initial record label operated by PRM and all
other record labels thereafter operated by PRM or under the principal direction
of Messrs. Doyle and/or Flynn.

2. BONUS THRESHOLD: No bonus shall be payable until the completion of
the first fiscal year in which the "Cumulative Net Profit" as herein defined of
PRM exceeds $1,000,000. No bonus shall be payable with respect to any fiscal
year after the fiscal year ending June 30, 2001.

3. CUMULATIVE NET PROFIT: Shall mean the cumulative net earnings before
taxes of PRM from inception through the end of its current fiscal year
determined by the Company's independent auditors in accordance with generally
accepted accounting principles consistently applied except that no deduction
shall be made for bonuses payable under the Record Label Bonus Plan and there
shall be added to Cumulative Net Profit the base salary paid by PRM to Brian
Doyle for each year (or partial year).

4. (i) BONUS LEVELS: A bonus of $250,000 shall be payable with respect
to the first fiscal year in which Cumulative Net Profits exceed $1,000,000.

(ii) An additional bonus of $250,000 shall be payable with respect to
the first fiscal year in which Cumulative Net Profits exceed $2,000,000.

(iii) An additional bonus of $100,000 shall be payable with respect
to the first fiscal year in which Cumulative Net Profits exceed $2,400,000.

(iv) The maximum total bonus payable under the Record Label Bonus
shall be $600,000.00.

<PAGE>

5. BONUS DETERMINATION: The bonus determination shall be made and paid
within 45 days after the completion of the audited financial statements of the
Company for a fiscal year. The calculation shall be prepared by the independent
auditors and shall be final.

EMPLOYMENT AGREEMENT

AGREEMENT made as of the 9th day of October, 1996, by and between PARADISE
MUSIC & ENTERTAINMENT, INC., a Delaware corporation having offices at 420 West
45th Street, New York, New York 10036 (the "COMPANY"), and RICHARD FLYNN, an
individual with an address at 420 West 45th Street, New York, NY 10036 (the
"EXECUTIVE").

W I T N E S S E T H:

WHEREAS, the Executive is currently an executive officer of All Access
Entertainment Management Group, Inc. ("ALL ACCESS"), a privately held company
co-managed by the Executive.

WHEREAS, a registration statement ("REGISTRATION STATEMENT") is to be filed
by the Company in connection with the Company's initial public offering (the
"IPO");

WHEREAS, in connection with and effective simultaneously with the execution
of this Agreement All Access will participate in a closing pursuant to the terms
of an exchange agreement (the "EXCHANGE AGREEMENT") with the Company and other
constituent parties referred to therein;

WHEREAS, it is understood and agreed by the parties hereto that the
Executive shall co-manage with Brian Doyle the normal day to day operations of
the continuing business of All Access after the Effective Date whether in the
form of a separate subsidiary or division ("ALL ACCESS OPERATING") on and after
the Effective Date, subject to the control of the Board of Directors of the
Company with respect to matters not constituting normal day to day operations.

WHEREAS, it is understood and agreed by the parties hereto that the
Executive shall co-manage with Brian Doyle the normal day to day operations of
the new business to be funded promptly following the IPO, whether in the form of
a separate subsidiary or division (the "Record Label"), subject to the control
of the Board of Directors of the Company with respect to matters not
constituting normal day to day operations.

NOW, THEREFORE, the parties hereto agree as follows:

<PAGE>

2. TERM. This Agreement shall be for a term commencing on the Effective
Date and expiring three years thereafter unless otherwise sooner terminated as
provided in this Agreement (the "TERM"). This Agreement shall automatically be
extended for additional one year periods unless either party advises the other,
in a writing delivered not less than 90-days prior to the expiration of the Term
then in effect, of its intention not to be extend this Agreement. If this
Agreement is so extended, then the "Term" shall also be deemed to include such
extensions.

3. DUTIES AND RESPONSIBILITIES.

(a) During the Term, the Executive shall serve as an Executive Vice
President, Director and Secretary of the Company and shall also serve as a
co-principal executive officer (either president or executive vice president) of
All Access Operating and the Record Label with such responsibility and status
commensurate with such position and at least equivalent to that which the
Executive currently holds with All Access. During the Term, the Executive
shall, along with Brian Doyle and subject only to the review of the Board of
Directors regarding matters not involving day to day operations or not otherwise
in the ordinary course of business, determine the policies for and have full
control over the normal day to day operations of All Access Operating. With
respect to any bonus pool which the Company may create which is solely payable
to employees of All Access Operating or the Record Label, the Executive and
Brian Doyle shall determine the allocation and payment of bonuses thereunder.

(b) In serving the Company, the Record Label and All Access Operating
the Executive shall report to the Board of Directors of the Company. The
Executive and Brian Doyle shall be responsible for the hiring and firing, and
compensation of all other employees under their direction and consistent with
the All Access and/or the Record Label Operating Budget.

(c) For purposes hereof, the All Access Operating Budget for the
fiscal year ending June 30, 1997 has been approved and consists of the budget
presented as of the date hereof with modifications therein based on actual
operations thereafter. Thereafter budgets for annual fiscal periods prepared on
a like basis shall be presented for review and approval by the Company's Board
of Directors. Such review and approval shall be consistent with sound business
practice.

(d) The parties agree that for the twelve month period following the
effective date of the IPO, the Company will, from the proceeds of the IPO,
invest an amount of not less than $200,000 in developing and expanding the
business and operations of All

-2-

<PAGE>

Access Operating in accordance with a budget prepared by Messrs., Doyle and
Flynn, and approved by the Company's Board of Directors (the "Development
Budget").

(e) For purposes hereof, the term Record Label Operating Budget shall
mean all costs and expenses associated with developing and operating the
business and affairs of the Record Label, which budget shall be established at
not less than $650,000 (plus the Base Salary of Brian Doyle) for the 12 month
period following the Effective Date of the IPO ("Initial Period"). In addition
to said $650,000, it is agreed that the Record Label will pay Mr. Doyle a base
salary of $150,000 (the "Base Salary of Brian Doyle"). Thereafter, the Record
Label Operating Budget shall be developed by Messrs. Doyle and Flynn and
presented to the Board of Directors for approval. The Board of Directors shall
approve the expenditure of an additional $650,000 (plus the Base Salary of Brian
Doyle) for the next 12 month period thereafter if the following criteria have
been met:

(i) a distribution agreement covering the releases of the Record
Label and conforming with normal industry standards has been executed within the
Initial Period with one of the six main record distribution companies or such
other distribution company reasonably acceptable to the Board of Directors;

(ii) the Record Label has filled the positions of marketing/sales
and radio/promotion with persons having a level of experience and reputation
reasonably acceptable to the Board of Directors;

(iii)the Record Label has released at least two records under the
distribution agreement within the Initial Period; and

(iv)the Company has sold at least 70,000 units under the
distribution agreement during the Initial Period.

(f) During the Term, the Executive shall serve on the Executive
Advisory Committee of the Company, which shall be a committee comprised of the
principal executive officers of each subsidiary or division which shall advise
the Board of Directors on business matters affecting the Company, including
potential business ventures and acquisitions. Messrs. Doyle and Flynn shall each
be entitled to one vote on the Executive Advisory Committee.

(g) The Executive shall, except as provided in Schedule A, devote
substantially all his business efforts to the affairs of the Company. Other
permitted business activities of the Executive shall not be competitive and
shall not conflict with the terms of this Agreement. The Executive will (i)
devote his best efforts, skill and ability to promote the Company's interests;
(ii) carry out his duties in a competent and professional manner; (iii) work
with other employees of the Company in a competent and professional manner; and
(iv) generally promote the best interests of the Company. Notwithstanding the
foregoing, the

-3-

<PAGE>

Executive may engage in additional activities if such activities are approved by
a majority of the Board of Directors. After such approval SCHEDULE A shall be
amended to include such activities.

(h) The Executive's principal place of employment shall be at the
principal offices of the Company (and such locations to which such principal
office shall be relocated) subject to reasonable travel requirements on behalf
of the Company. If during the Term, the Company requires the Executive to move
his principal place of business outside of the greater metropolitan area (a
radius of more than 30 miles from Manhattan) and Executives chooses not to
accept such relocation, then the Executive may so advise the Company, in
writing, and this Agreement shall be deemed null and void and no longer of any
force and effect, and Executive shall be released from all provisions and
restrictions contained herein, including, without limitation, the restrictions
set forth in Section 11 hereof. As severance, the Company shall forthwith pay
the Executive, in equal monthly installments the balance of his Base Salary for
the remainder of the Term then in effect.

4. COMPENSATION.

(a) As compensation for services hereunder and in consideration of
his agreement not to compete as set forth in Section 10 below, the Company shall
pay the Executive during the Term, in accordance with the Company's normal
payroll practices, base salary compensation at an annual rate of $150,000 (the
"BASE SALARY"). Upon the Executive's written request, the Company shall advance
the Executive up to an additional $50,000 on the Effective Date with such
advance to be offset against the Executive's bonus. The initial advance if
requested on or after the date hereof shall be granted automatically. The next
request shall be made no earlier than the end of the Company's first fiscal
quarter following the date hereof; and all subsequent requests shall be made no
earlier than the end of each subsequent fiscal quarter. Each subsequent request
shall be reviewed by, and will be made only if approved by, the Company's
Compensation Committee based upon a determination as to the likely attainment of
budgeted goals after giving consideration to prior compensation paid to the
Executive. If the Executive's bonus is not enough to offset such advance, then
the balance of such advance which has not been offset shall be offset in six
equal monthly installments against compensation otherwise payable to the
Executive.

-4-

<PAGE>

acknowledged and understood that the Executive and Brian Doyle shall have the
discretion to allocate some or all of said funds to themselves.

(c) The Board of Directors of the Company shall also establish a
second tier bonus pool ("TIER II POOL") which the Board of Directors shall, in
its discretion, allocate to employees of the Company, including employees of
subsidiaries and divisions. The Tier II Pool shall be comprised of 10% of the
Company's net income before taxes above the aggregate net profits before taxes
established as the Targets in the Tier I Pools for said fiscal year.

(d) The Board of Directors of the Company shall also establish the
Record Label Bonus Plan and the Special Bonus Plan attached as Schedules C and D
respectively.

5. BENEFITS.

(a) During the Term, the Executive shall be entitled to participate
in the benefit plans established by the Company for the benefit of its key
executives.

(b) The Executive shall be entitled to four (4) weeks of paid
vacation.

6. KEY MAN INSURANCE. The Company shall have the right to obtain key man
life insurance for the benefit of the Company on the life of the Executive. If
requested by the Company, the Executive shall submit to such physical
examination and otherwise take such actions and execute and deliver such
documents as may be reasonably necessary to enable the Company to obtain such
life insurance. The Executive has no reason to believe that his life is not
insurable with a reputable insurance company at rates now prevailing in the City
of New York for healthy men of his age.

7. DISCHARGE BY COMPANY. The Company shall be entitled to immediately
terminate the Term and to discharge the Executive for cause, which shall be
limited to the following grounds:

(i) Conviction of a felony; or

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<PAGE>

(ii) Commission of a willful or intentional act which could
injure the reputation, business or business or business relationships of
the Company including the violation of the terms of Sections 10 and 11
hereof;

8. DISABILITY, DEATH.

(a) If the Executive shall be unable to perform his duties hereunder
by virtue of illness or physical or mental incapacity or disability (from any
cause or causes whatsoever) in substantially the manner and to the extent
required hereunder prior to the commencement of such disability as determined by
a competent medical doctor (all such causes being herein referred to as
"DISABILITY") and the Executive shall fail to have performed substantially such
duties for 90 consecutive days or for periods aggregating 180 days, whether or
not continuous, in any continuous period of one year (such 90th or 180th day to
be known as the "DISABILITY DATE"), the Company shall have the right to
terminate the Executive's employment hereunder as at the end of any calendar
month thereafter upon written notice to him. The Executive shall be entitled to
his Base Salary for the remainder of the Term payable on the Company's regular
payroll schedule and to bonuses earned through such date determined at the end
of the fiscal year in which Disability occurred, with said bonuses limited to
the prorated portion equal to the portion of the fiscal year prior to
termination.

(b) In case of the death of the Executive, this Agreement shall
terminate and the Company shall be obligated to pay to the Executive's estate or
as otherwise directed by the Executive's duly appointed and authorized legal
representative, his Base Salary for the remainder of the Term payable on the
Company's regular payroll schedule and to bonuses earned through such date
determined at the end of the fiscal year in which Death occurred, with said
bonuses limited to the prorated portion equal to the portion of the fiscal year
prior to termination.

10. CONFIDENTIAL INFORMATION. The Executive recognizes that he will
occupy a position of trust with respect to business and technical information of
a secret or confidential nature which is the property of the Company, or any of
its affiliates, and which has been and will be imparted to him from time to time
in the course of his employment with the Company. In light of this
understanding, the Executive agrees that:

(a) the Executive shall not at any time knowingly use or disclose,
directly or indirectly, any of the confidential information or trade secrets
which is the property of the Company, or any of its affiliates, to any person,
except that he may use and disclose to authorized Company personnel, licensees
or franchisees in the course of his employment; and

-6-

<PAGE>

(b) within five (5) days from the date upon which his employment with
the Company is terminated, for any reason or for no reason, or otherwise upon
the request of the Company, he shall return to the Company any and all documents
and materials which consti tute or contain the confidential information or trade
secrets of the Company, or any of its affiliates.

For purposes of this Agreement, the terms "CONFIDENTIAL INFORMATION" or "TRADE
SECRETS" shall include all information of any nature and in any form which is
owned by the Company, or any of its affiliates, and which is not publicly
available or generally known to persons engaged in businesses similar to that of
the Company, or any of its affiliates. Notwithstanding the foregoing, when the
Executive's employment with the Company is terminated, for whatever reason, the
limitations provided in this Section 10 shall not prevent the Executive from
using for his own benefit any information which he acquired prior to the
Effective Date.

11. NON-COMPETITION.

(a) The Executive agrees that his services hereunder are of a special
character, and his position with the Company places him in a position of
confidence and trust with the Company's artists, clients, customers and
employees. The Executive and the Company agree that in the course of employment
hereunder, the Executive has and will continue to develop a personal
acquaintanceship and relationship with the Company's artists, clients and
customers, and a knowledge of those artists', clients' and customers' affairs
and requirements which may constitute the Company's primary or only contact with
such artists, clients and customers. The Executive consequently agrees that it
is reasonable and necessary for the protection of the goodwill and business of
the Company that the Executive make the covenants contained herein. Accordingly,
the Executive agrees that while he is in the Company's employ the Executive will
not, without the prior written consent of the Company, either directly or
indirectly, or in any capacity whether as a promoter, proprietor, partner, joint
venturer, employee, agent, consultant, director, officer, manager, shareholder
(except as a shareholder holding less than five percent (5%) of a publicly
traded company's issued and outstanding capital stock, or otherwise) work for,
act as a consultant to or own any interest in any direct competitor of the
Company which operates in or provides services essentially the same as the
Company in any portion of the geographic territory where the Company operates or
sells its products or services, except as allowed pursuant to Section 3(c) of
this Agreement. The Executive further agrees that during the Term, and for the
one year period following the Executive's termination of employment with the
Company, the Executive will not solicit, entice, induce or persuade: (i) any
employee, artist, client or customer of the Company; or (ii) any person or
entity had been engaged in negotiations with the Company to become, an employee,
artist, client or customer of the Company during the six month period prior to
the Executive's termination of employment with the Company, to alter, terminate
or refrain from extending or renewing any contractual or other relationship with
the Company, or commence a similar or substantially similar relationship with
the Executive, any entity with whom the Executive is affiliated or employed by
or any direct competitor of the Company.

-7-

<PAGE>

Notwithstanding the foregoing, when the Executive's employment with the Company
is terminated, for whatever reason, the Executive may continue to do business,
without violating the terms hereof, with, any customer, client or artist of the
Company which was a customer, client or artist of the Executive, or any company
controlled by the Executive, prior to the Effective Date.

(b) As used in this Section 11, the term "COMPANY" shall include
subsidiaries, licensees, sub-licensees and franchisees of the Company, the term
"CUSTOMER" shall mean any person or entity who is then, or who had been at any
time during the one year period immediately preceding the date of termination of
the Executive's employment, a customer of the Company, and the term "ARTIST OR
CLIENT" shall mean any person or entity who is then, or who had been at any time
during the one year period immediately preceding the date of termination of the
Executive's employment, an artist or client represented by, signed by, working
for or collaborating with the Company.

(c) The parties hereto agree that the duration and area for which the
covenant not to compete set forth herein is to be effective are reasonable. In
the event that any court determines that the time period or the area, or both of
them, are unreasonable and that such covenant is to that extent unenforceable,
the parties hereto agree that the covenant shall remain in full force and effect
for the greatest time period and in the greatest area that would not render it
unenforceable.

(d) If the Executive commits a material breach or is about to commit
a material breach, of any of the above provisions, the Company shall have the
right to tempo rary and preliminary injunctive relief to prevent the continuance
or commission of such breach prior to any hearing on the merits and to have the
provisions of this Agreement specifically enforced by any court having equity
jurisdiction without being required to post bond or other security and without
having to prove the inadequacy of the available remedies at law, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Company. In addition, the Company may take all such
other actions and remedies available to it under law or in equity and shall be
entitled to such damages as it can show it has sustained by reason of such
breach.

-8-

<PAGE>

Company, one by the Executive (or his legal representative) and the third
arbitrator by the first two so chosen. The parties shall use their best efforts
to assure that the selection of the arbitrators shall be completed within 30
days and the parties shall use their best efforts to complete the arbitration as
quickly as possible. In such proceeding, the arbitration panel shall determine
who is a substantially prevailing party and shall award to such party its
reasonable attorneys', accountants' and other professionals' fees and its costs
incurred in connection with the proceeding. The award of the arbitration panel
shall be final, binding upon the parties and nonappealable and may be entered in
and enforced by any court of competent jurisdiction. such court may add to the
award of the arbitration panel additional reasonable attorneys' fees and costs
incurred by the substantially prevailing party in attempting to enforce such
award.

13. ENFORCEABILITY. The failure of either party at any time to require
performance by the other party of any provision hereunder shall in no way affect
the right of that party thereafter to enforce the same, nor shall it affect any
other party's right to enforce the same, or to enforce any of the other
provisions of this Agreement; nor shall the waiver by either party of the breach
of any provision hereof be taken or held to be a waiver of any subsequent breach
of such provision or as a waiver of the provision itself.

14. ASSIGNMENT. This Agreement is a personal contract and the Executive's
rights and obligations hereunder may not be sold, transferred, assigned, pledged
or hypothecated by the Executive. The rights and obligations of the Company
hereunder shall be binding upon and run in favor of the successors and assigns
of the Company. If any assignment or transfer of rights hereunder is attempted
by the Executive contrary to the provisions hereof, the Company shall have no
further liability for payments hereunder.

15. MODIFICATION. This Agreement may not be canceled, changed, modified
or amended orally, and no cancellation, change, modification or amendment shall
be effective or binding, unless it is in writing, signed by both parties to this
Agreement.

16. SEVERABILITY; SURVIVAL. If any provision of this Agreement is held to
be void and unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement nevertheless shall be binding upon the parties with
the same effect as though the void or enforceable part has been severed and
deleted.

17. NOTICE. Notices given pursuant to the provisions of this Agreement
shall be sent by certified mail, postage prepaid, or by overnight courier, or by
telex, telecopier or telegraph, charges prepaid, to the following address:

To the Company: Paradise Music & Entertainment, Inc.
420 West 45th Street
New York, New York 10036

with a copy to: Rubin Baum Levin Constant & Friedman

-9-

<PAGE>

30 Rockefeller Plaza
New York, New York 10112
Attn: Walter M. Epstein, Esq.

To the Executive: Richard Flynn
420 West 45th Street
New York, New York 10036

18. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

19. NO CONFLICT. The Executive represents and warrants that he is not
subject to any agreement, instrument, order, judgment or decree of any kind, or
any other restrictive agreement of any character, which would prevent him from
entering into this agreement or which would be breached by the Executive upon
his performance of his duties pursuant to this agreement.

20. ENTIRE AGREEMENT. This agreement represents the entire agreement
between the Company and the Executive with respect to the subject matter hereof,
and all prior agreements relating to the employment of the Executive, written or
oral, are nullified and superseded hereby.

IN WITNESS WHEREOF, the parties have set their hands and seals on and as of
the day and year first above written.

PARADISE MUSIC & ENTERTAINMENT, INC.

By:
--------------------------------------
Name:
Title:

-----------------------------------------
Richard Flynn

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<PAGE>

SCHEDULE A

The Executive may devote such time as the Executive deems appropriate, without
adversely affecting the Executive's time devoted to the business of the Company,
to work with the following companies:

Baseball Cares
Character References, Inc.
Cyberson Partners, L.P.
Digital Entertainment Marketing, Inc.
The Baseball Players Hall Of Fame
The World Of New York
Uniform Remote Control

<PAGE>

SCHEDULE B

TIER I POOL CALCULATION

Division Target Profitability Tier I Pool Amount
-------- -------------------- ------------------

All Access Entertainment $325,000 (Year 1) $325,000(1)
Management Group, $512,500 (Year 2)
Inc.(1)(2)(3) $512,500 (Year 3)
$475,000 for all subsequent
years

Picture Vision, Inc.(2) $375,000 (All Years) $225,000

John Leffler Music, Inc.(2) $375,000 (All Years) $225,000
- -------------------------------------------------------------------------
Total............................................................$775,000

- --------------
(1) This amount may be allocated as Messrs. Doyle and Flynn may determine in
their sole discretion.

(2) Target Profitability with respect to each fiscal year shall be determined
by the Company's independent auditors in accordance with generally accepted
accounting principles, consistently applied based on net revenues of the
applicable subsidiary before taxes after deducting all expenses, excluding
(i) costs relating to or arising out of physically relocating the
businesses, (ii) costs of consummating the IPO, the transactions
contemplated under the Exchange Agreement and all other matters relating
thereto including costs directly associated with being a public company,
(iii) the base salary of Richard Flynn, John Loeffler or Jon Small, as the
case may be, (iv) monies expended pursuant to the Development Budget, (v)
rent in excess of current rent unless, based on employee growth, larger
facilities are required or as a result of required lease escalations. It
is understood and agreed that the Executives will be allocated prorata
amounts of their Tier 1 bonuses to the same extent that their operating
divisions or subsidiaries achieve Target Profitability.

<PAGE>

SCHEDULE C

SPECIAL BONUS PLAN

The Special Bonus Plan is as follows:

1. BUSINESS INCLUDED: The Special Projects as identified above.

2. BONUS THRESHOLD: The "Bonus Threshold" for a Special Project
shall be $1,000,000 of Special Project Net Profits.

3. SPECIAL PROJECT NET PROFIT; ADJUSTED SPECIAL PROJECT NET PROFIT:
The term "Special Project Net Profit" shall mean the net earnings from a Special
Project after deduction of all proper allocable costs (excluding costs that
would have been excluded for purposes of computing Tier 1 compensations) but
before income taxes and the bonus determined hereunder, all as determined by the
Company's independent auditors in accordance with generally accepted accounting
principles consistently applied. The term "Adjusted Special Project Net Profit"
shall mean Special Project Net Profits reduced by the amount of Tier 1
compensation paid to the Executive(s) of All Access or Picture Vision, as the
case may be, which relates to the period in which the Special Project Net
Profits were earned. As an example, if All Access produced $2,000,000 of
Special Project Net Profit in fiscal 1997 and paid total Tier 1 compensation of
$500,000, with respect to the corresponding period, the Adjusted Special Project
Net Profits would be $1,500,000 and the bonus would be $225,000. Assuming the
Bonus Threshold has been met for any Special Project, any further royalties or
residuals related thereto ("Future Royalty Revenue") shall be subject to a bonus
as set forth below.

4. BONUS AMOUNT: The bonus shall be 15% of Adjusted Special Project
Net Profits and 15% of Future Royalty Revenue.

5. BONUS DETERMINATION: The bonus determination shall be made and
paid within 45 days after the audited financial statements of the Company for
each fiscal year. The calculation shall be prepared by the Company's
independent auditors and shall be final.

<PAGE>

SCHEDULE D

RECORD LABEL BONUS PLAN

The Record Label Bonus Plan is as follows:

1. BUSINESS INCLUDED: The initial record label operated by PRM and all
other record labels thereafter operated by PRM or under the principal direction
of Messrs. Doyle and/or Flynn.

4. (i) BONUS LEVELS: A bonus of $250,000 shall be payable with respect
to the first fiscal year in which Cumulative Net Profits exceed $1,000,000.

(ii) An additional bonus of $250,000 shall be payable with respect to
the first fiscal year in which Cumulative Net Profits exceed $2,000,000.

(iii) An additional bonus of $100,000 shall be payable with respect
to the first fiscal year in which Cumulative Net Profits exceed $2,400,000.

(iv) The maximum total bonus payable under the Record Label Bonus
shall be $600,000.00.

<PAGE>

EMPLOYMENT AGREEMENT

AGREEMENT made as of the 9th day of October, 1996, by and between PARADISE
MUSIC & ENTERTAINMENT, INC., a Delaware corporation having offices at 420 West
45th Street, New York, New York 10036 (the "COMPANY"), and JOHN LOEFFLER, with
an address at 420 West 45th Street, New York, NY 10036 (the "EXECUTIVE").

W I T N E S S E T H:
WHEREAS, the Executive is currently the President and Chief Executive
Officer of John Leffler Music, Inc. d/b/a Rave Music Group, Inc. ("RAVE"), a
privately held company controlled by the Executive.

WHEREAS, a registration statement ("REGISTRATION STATEMENT") is to be filed
by the Company in connection with the Company's initial public offering (the
"IPO");

WHEREAS, Rave will participate in a closing pursuant to the terms of an
exchange agreement (the "EXCHANGE AGREEMENT") with the Company and other
constituent parties referred to therein;

WHEREAS, the Company and the Executive wish to set forth the terms and
conditions of the Executive's employment by the Company effective as of the
closing date of the IPO (the "Effective Date") under the terms of this
Agreement; and

WHEREAS, it is understood and agreed by the parties hereto that the
Executive shall retain control over the normal day to day operations of the
continuing business of Rave after the date hereof whether in the form of a
separate subsidiary or division ("RAVE OPERATING") on and after the date hereof,
subject to the control of the Board of Directors of the Company with respect to
matters not constituting normal day to day operations.

NOW, THEREFORE, the parties hereto agree as follows:

2. TERM. This Agreement shall be for a term commencing on the date
hereof and expiring three years hereafter unless otherwise sooner terminated as
provided in this Agreement (the "TERM"). This Agreement shall automatically be
extended for additional one
<PAGE>

year periods unless either party advises the other, in a writing delivered not
less than 90-days prior to the expiration of the Term then in effect, of its
intention not to extend this Agreement. If this Agreement is so extended, then
the "Term" shall also be deemed to include such extensions.

3. DUTIES AND RESPONSIBILITIES.

(a) During the Term, the Executive shall serve as the President and
Chief Executive Officer of the Company and shall also serve as the principal
executive officer of Rave Operating with such responsibility and status
commensurate with such position and at least equivalent to that which the
Executive currently holds with Rave. During the Term, the Executive shall,
subject to the review of the Board of Directors regarding matters not involving
day to day operations or not otherwise in the ordinary course of business,
determine the policies for and have full control over the normal day to day
operations of Rave Operating, including, without limitation, the setting and
granting of bonuses to employees within Rave Operating. In so serving the
Company and Rave Operating the Executive shall report to the Board of Directors
of the Company.

(b) During the Term, the Executive shall also serve as the Chairman
of the Board of Directors of the Company and shall serve on the Executive
Advisory Committee, which shall be a committee comprised of the principal
executive officers of each subsidiary or division which shall advise the Board
of Directors on business matters affecting the Company, including potential
business ventures and acquisitions.

(c) The Executive shall, except as otherwise provided herein, devote
substantially all his business efforts to the affairs of the Company. Other
business activities of the Executive shall not materially conflict with the
terms of this Agreement. The Executive will (i) devote his best efforts, skill
and ability to promote the Company's interests; (ii) carry out his duties in a
competent and professional manner; (iii) work with other employees of the
Company in a competent and professional manner; and (iv) generally promote the
best interests of the Company. Notwithstanding the foregoing, the Executive is
permitted to engage in the activities set forth on SCHEDULE A hereto, and may
engage in additional activities if such activities are approved by a majority of
the Board of Directors, not including the Executive. After such approval
SCHEDULE A shall be amended to include such activities.

(d) The Executive's principal place of employment shall be at the
principal offices of the Company (and such locations to which such principal
office shall be relocated) subject to reasonable travel requirements on behalf
of the Company.

4. COMPENSATION.

(a) As compensation for services hereunder and in consideration of
his agreement not to compete as set forth in Section 10 below, the Company shall
pay the

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<PAGE>

Executive during the Term, in accordance with the Company's normal payroll
practices, base salary compensation at an annual rate of $150,000 (the "BASE
SALARY"). Upon the Executive's written request, the Company shall advance the
Executive up to an additional $56,250 per fiscal quarter commencing from the
date hereof, with such advance to be offset against the Executive's bonus. The
first advance if requested on or after the date hereof shall be granted
automatically. The next request shall be made no earlier than the end of the
Company's first fiscal quarter following the date hereof; and all subsequent
requests shall be made no earlier than the end of each subsequent fiscal
quarter. Each subsequent request shall be reviewed by, and will be made only if
approved by, the Company's Compensation Committee based upon a determination as
to the likely attainment of budgeted goals and consideration of prior
compensation received by the Executive. If the Executive's bonus is not enough
to offset such advance, then the balance of such advance which has not been
offset shall be offset in six equal monthly installments against compensation
otherwise payable to the Executive.

(b) The Board of Directors shall establish a first tier bonus pool
("TIER I POOL") which the Board of Directors shall allocate among the Company's
divisions (or subsidiaries) with each division receiving its allocated amount if
it meets certain earnings targets after deducting all expenses and taxes payable
by such division including, without limitation, such division's allocated amount
of the Company's expenses, including, without limitation, its share of the
Company's legal, accounting, health and administrative expenses, but excluding
expenses incurred in connection with acquisitions which are not completed
(before giving effect to the Tier I Pool). The amount to be allocated, the
targets to be met and the basis for calculation, all with respect to the Tier I
Pool, shall be set annually in advance by the Board of Directors. For the
initial one year period under the Term of this Agreement the target shall be set
forth on SCHEDULE B, attached hereto. The Executive shall determine, in his
sole discretion, how much of the Tier I Pool funds allocated to Rave Operating
shall be distributed to individuals in Rave Operating. It is acknowledged and
understood that the Executive shall have the discretion to allocate some or all
of said funds to the Executive.

(c) The Board of Directors of the Company shall also establish a
second tier bonus pool ("TIER II POOL") which the Board of Directors shall, in
its discretion, allocate to employees of the Company, including employees of
subsidiaries and divisions. The Tier II Pool shall be comprised of 10% of the
Company's net income before taxes above the aggregate net profits before taxes
established as the targets for said fiscal year in the Tier I Pool. In
addition, the Executive may be entitled to participate in the Special Bonus Plan
attached as Schedule C.

5. BENEFITS.

(a) During the Term, the Executive shall be entitled to participate
in the benefit plans established by the Company for the benefit of its key
executives.

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<PAGE>

(b) The Executive shall be entitled to four (4) weeks of paid
vacation.

6. KEY MAN INSURANCE. The Company shall have the right to obtain key man
life insurance for the benefit of the Company on the life of the Executive. If
requested by the Company, the Executive shall submit to such physical
examination and otherwise take such actions and execute and deliver such
documents as may be reasonably necessary to enable the Company to obtain such
life insurance. The Executive has no reason to believe that his life is not
insurable with a reputable insurance company at rates now prevailing in the City
of New York for healthy men of his age.

7. DISCHARGE BY COMPANY. The Company shall be entitled to immediately
terminate the Term and to discharge the Executive for cause, which shall be
limited to the following grounds:

(i) Conviction of a felony; or

(ii) Commission of a willful or intentional act which could
injure the reputation, business or business or business relationships of
the Company including the violation of the terms of Sections 10 and/or 11
hereof;

8. DISABILITY, DEATH.

(a) If the Executive shall be unable to perform his duties hereunder
by virtue of illness or physical or mental incapacity or disability (from any
cause or causes whatsoever) in substantially the manner and to the extent
required hereunder prior to the commencement of such disability as determined by
a competent medical doctor (all such causes being herein referred to as
"DISABILITY") and the Executive shall fail to have performed substantially such
duties for 90 consecutive days or for periods aggregating 180 days, whether or
not continuous, in any continuous period of one year (such 90th or 180th day to
be known as the "DISABILITY DATE"), the Company shall have the right to
terminate the Executive's employment hereunder as at the end of any calendar
month thereafter upon written notice to him. The Executive shall be entitled to
his Base Salary for the remainder of the Term payable on the Company's regular
payroll schedule and to bonuses earned through such date determined at the end
of the fiscal year in which Disability occurred, with said bonuses limited to
the prorated portion equal to the portion of the fiscal year prior to
termination.

-4-
<PAGE>

(b) In case of the death of the Executive, this Agreement shall
terminate and the Company shall be obligated to pay to the Executive's estate or
as otherwise directed by the Executive's duly appointed and authorized legal
representative, his Base Salary for the remainder of the Term payable on the
Company's regular payroll schedule and to bonuses earned through such date
determined at the end of the fiscal year in which Death occurred, with said
bonuses limited to the prorated portion equal to the portion of the fiscal year
prior to termination.

10. CONFIDENTIAL INFORMATION. The Executive recognizes that he will
occupy a position of trust with respect to business and technical information of
a secret or confidential nature which is the property of the Company, or any of
its affiliates, and which has been and will be imparted to him from time to time
in the course of his employment with the Company. In light of this
understanding, the Executive agrees that:

(a) the Executive shall not at any time knowingly use or disclose,
directly or indirectly, any of the confidential information or trade secrets
which is the property of the Company, or any of its affiliates, to any person,
except that he may use and disclose to authorized Company personnel, licensees
or franchisees in the course of his employment; and

(b) within five (5) days from the date upon which his employment with
the Company is terminated, for any reason or for no reason, or otherwise upon
the request of the Company, he shall return to the Company any and all documents
and materials which constitute or contain the confidential information or trade
secrets of the Company, or any of its affiliates.

For purposes of this Agreement, the terms "CONFIDENTIAL INFORMATION" or "TRADE
SECRETS" shall include all information of any nature and in any form which is
owned by the Company, or any of its affiliates, and which is not publicly
available or generally known to persons engaged in businesses similar to that of
the Company, or any of its affiliates. Notwithstanding the foregoing, when the
Executive's employment with the Company is terminated, for whatever reason, the
limitations provided in this Section 10 shall not prevent the Executive from
using for his own benefit any information which he acquired prior to the date
hereof.

11. NON-COMPETITION.

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<PAGE>

continue to develop a personal acquaintanceship and relationship with the
Company's artists, clients and customers, and a knowledge of those artists',
clients' and customers' affairs and requirements which may constitute the
Company's primary or only contact with such artists, clients and customers. The
Executive consequently agrees that it is reasonable and necessary for the
protection of the goodwill and business of the Company that the Executive make
the covenants contained herein. Accordingly, the Executive agrees that while he
is in the Company's employ the Executive will not, without the prior written
consent of the Company, either directly or indirectly, or in any capacity
whether as a promoter, proprietor, partner, joint venturer, employee, agent,
consultant, director, officer, manager, shareholder (except as a shareholder
holding less than five percent (5%) of a publicly traded company's issued and
outstanding capital stock, or otherwise) work for, act as a consultant to or own
any interest in any direct competitor of the Company which operates in or
provides services essentially the same as the Company in any portion of the
geographic territory where the Company operates or sells its products or
services, except as allowed pursuant to Section 3(c) of this Agreement. The
Executive further agrees that during the Term, and for the one year period
following the Executive's termination of employment with the Company, the
Executive will not solicit, entice, induce or persuade: (i) any employee,
artist, client or customer of the Company; or (ii) any person or entity had been
engaged in negotiations with the Company to become, an employee, artist, client
or customer of the Company during the six month period prior to the Executive's
termination of employment with the Company, to alter, terminate or refrain from
extending or renewing any contractual or other relationship with the Company, or
commence a similar or substantially similar relationship with the Executive, any
entity with whom the Executive is affiliated or employed by or any direct
competitor of the Company. Notwithstanding the foregoing, when the Executive's
employment with the Company is terminated, for whatever reason, the Executive
may continue to do business, without violating the terms hereof, with, any
customer, client or artist of the Company which was a customer, client or artist
of the Executive, or any company controlled by the Executive, prior to the date
hereof.

(b) As used in this Section 11, the term "COMPANY" shall include
subsidiaries, licensees, sub-licensees and franchisees of the Company, the term
"CUSTOMER" shall mean any person or entity who is then, or who had been at any
time during the one year period immediately preceding the date of termination of
the Executive's employment, a customer of the Company, and the term "ARTIST OR
CLIENT" shall mean any person or entity who is then, or who had been at any time
during the one year period immediately preceding the date of termination of the
Executive's employment, an artist or client represented by, signed by, working
for or collaborating with the Company.

(c) The parties hereto agree that the duration and area for which the
covenant not to compete set forth herein is to be effective are reasonable. In
the event that any court determines that the time period or the area, or both of
them, are unreasonable and that such covenant is to that extent unenforceable,
the parties hereto agree that the covenant shall remain in full force and effect
for the greatest time period and in the greatest area that would not render it
unenforceable.

-6-
<PAGE>

(d) If the Executive commits a material breach or is about to commit
a material breach, of any of the above provisions, the Company shall have the
right to temporary and preliminary injunctive relief to prevent the continuance
or commission of such breach prior to any hearing on the merits and to have the
provisions of this Agreement specifically enforced by any court having equity
jurisdiction without being required to post bond or other security and without
having to prove the inadequacy of the available remedies at law, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Company. In addition, the Company may take all such
other actions and remedies available to it under law or in equity and shall be
entitled to such damages as it can show it has sustained by reason of such
breach.

12. RESOLUTION OF DISPUTES. Any dispute by and among the parties hereto
arising out of or relating to this Agreement, the terms, conditions or a breach
thereof, or the rights or obligations of the parties with respect thereto, shall
be arbitrated in the City of New York, New York before and pursuant to then
applicable commercial rules and regulations of the American Arbitration
Association, or any successor organization. The arbitration proceedings shall
be conducted by a panel of three arbitrators, one of whom shall be selected by
the Company, one by the Executive (or his legal representative) and the third
arbitrator by the first two so chosen. The parties shall use their best efforts
to assure that the selection of the arbitrators shall be completed within 30
days and the parties shall use their best efforts to complete the arbitration as
quickly as possible. In such proceeding, the arbitration panel shall determine
who is a substantially prevailing party and shall award to such party its
reasonable attorneys', accountants' and other professionals' fees and its costs
incurred in connection with the proceeding. The award of the arbitration panel
shall be final, binding upon the parties and nonappealable and may be entered in
and enforced by any court of competent jurisdiction. such court may add to the
award of the arbitration panel additional reasonable attorneys' fees and costs
incurred by the substantially prevailing party in attempting to enforce such
award.

13. ENFORCEABILITY. The failure of either party at any time to require
performance by the other party of any provision hereunder shall in no way affect
the right of that party thereafter to enforce the same, nor shall it affect any
other party's right to enforce the same, or to enforce any of the other
provisions of this Agreement; nor shall the waiver by either party of the breach
of any provision hereof be taken or held to be a waiver of any subsequent breach
of such provision or as a waiver of the provision itself.

-7-
<PAGE>

fer of rights hereunder is attempted by the Executive contrary to the provisions
hereof, the Company shall have no further liability for payments hereunder.

15. MODIFICATION. This Agreement may not be cancelled, changed, modified
or amended orally, and no cancellation, change, modification or amendment shall
be effective or binding, unless it is in writing, signed by both parties to this
Agreement.

16. SEVERABILITY; SURVIVAL. If any provision of this Agreement is held to
be void and unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement nevertheless shall be binding upon the parties with
the same effect as though the void or enforceable part has been severed and
deleted.

17. NOTICE. Notices given pursuant to the provisions of this Agreement
shall be sent by certified mail, postage prepaid, or by overnight courier, or by
telex, telecopier or telegraph, charges prepaid, to the following address:

To the Company: Paradise Music & Entertainment, Inc.
420 West 45th Street
New York, New York 10036

with a copy to: Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10112
Attn: Walter M. Epstein, Esq.

To the Executive: John Loeffler
420 West 45th Street
New York, New York 10036

18. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

19. NO CONFLICT. The Executive represents and warrants that he is not
subject to any agreement, instrument, order, judgment or decree of any kind, or
any other restrictive agreement of any character, which would prevent him from
entering into this agreement or which would be breached by the Executive upon
his performance of his duties pursuant to this agreement

20. ENTIRE AGREEMENT. This agreement represents the entire agreement
between the Company and the Executive with respect to the subject matter hereof,
and all prior agreements relating to the employment of the Executive, written or
oral, are nullified and superseded hereby.

-8-
<PAGE>

IN WITNESS WHEREOF, the parties have set their hands and seals on and as of
the day and year first above written.

PARADISE MUSIC & ENTERTAINMENT, INC.

By:
--------------------------------
Name:
Title:

-----------------------------------
John Loeffler

-9-
<PAGE>

SCHEDULE A

The Executive may engage in the following activities:

(i) exploit the intellectual property rights in previously created
music in the form of compilation or other usage not in the ordinary course of
the Company's business;

(ii) devote such time as the Executive deems appropriate, without
adversely affecting the Executive's time devoted to the business of the Company,
to work as a consultant to Grey Advertising;

(iii) devote such time as the Executive deems appropriate, without
adversely affecting the Executive's time devoted to the business of the Company,
to work as an executive of Future Call Inc.; and

(iv) devote such time as the Executive deems appropriate, without
adversely affecting the Executive's time devoted to the business of the Company,
to work for Rave Record Production Company.
<PAGE>

SCHEDULE B

TIER I POOL CALCULATION

Division Target Profitability Tier I Pool Amount
- -------- -------------------- ------------------
All Access Entertainment $325,000 (Year 1) $325,000
Management Group, Inc.(1)(2)(3) $512,500 (Year 2)
$512,500 (Year 3)
$475,000 for all
subsequent years

Picture Vision, Inc.(2) $375,000 (All Years) $225,000

John Leffler Music, Inc.(2) $375,000 (All Years) $225,000
- ---------------------------------------------------------------------------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $775,000

- ---------------
(1) This amount may be allocated as Messrs. Doyle and Flynn may determine in
their sole discretion.

(2) Target Profitability with respect to each fiscal year shall be determined
by the Company's independent auditors in accordance with generally accepted
accounting principles, consistently applied based on net revenues of the
applicable subsidiary before taxes after deducting all expenses, excluding
(i) costs relating to or arising out of physically relocating the
businesses, (ii) costs of consummating the IPO, the transactions
contemplated under the Exchange Agreement and all other matters relating
thereto including costs directly associated with being a public company,
(iii) the base salary of Richard Flynn, John Loeffler or Jon Small, as the
case may be, (iv) monies expended pursuant to the Development Budget, (v)
rent in excess of current rent unless, based on employee growth, larger
facilities are required or as a result of required lease escalations. It
is understood and agreed that the Executives will be allocated pro rata
amounts of their Tier 1 bonuses to the same extent that their operating
divisions or subsidiaries achieve Target Profitability.

SCHEDULE C

SPECIAL BONUS PLAN

The Special Bonus Plan is as follows:

1. BUSINESS INCLUDED: The Special Projects as identified above.

2. BONUS THRESHOLD: The "Bonus Threshold" for a Special Project shall be
$1,000,000 of Special Project Net Profits.

4. BONUS AMOUNT: The bonus shall be 15% of Adjusted Special Project Net
Profits and 15% of Future Royalty Revenue.

<PAGE>

EMPLOYMENT AGREEMENT

AGREEMENT made as of the 9th day of October, 1996, by and between PARADISE
MUSIC & ENTERTAINMENT, INC., a Delaware corporation having offices at 420 West
45th Street, New York, New York 10036 (the "COMPANY"), and JON SMALL, with an
address c/o Picture Vision, Inc., 209 Tenth Avenue South, Suite 425, Nashville,
TN 37203 (the "EXECUTIVE").

W I T N E S S E T H:
WHEREAS, the Executive is currently the President of Picture Vision, Inc.
("PICTURE VISION"), a privately held company controlled by the Executive.

WHEREAS, a registration statement ("REGISTRATION STATEMENT") is to be filed
by the Company in connection with the Company's initial public offering (the
"IPO");

WHEREAS, Picture Vision will participate in a closing pursuant to the
terms of an exchange agreement (the "EXCHANGE AGREEMENT") with the Company and
other constituent parties referred to therein;

WHEREAS, it is understood and agreed by the parties hereto that the
Executive shall retain control over the normal day to day operations of the
continuing business of Picture Vision after the date hereof whether in the form
of a separate subsidiary or division ("PICTURE VISION OPERATING") on and after
the date hereof, subject to the control of the Board of Directors of the Company
with respect to matters not constituting normal day to day operations.

NOW, THEREFORE, the parties hereto agree as follows:

3. DUTIES AND RESPONSIBILITIES.

(a) During the Term, the Executive shall serve as an Executive Vice
President of the Company and shall also serve as the principal executive officer
of Picture Vision Operating with such responsibility and status commensurate
with such position and at least equivalent to that which the Executive currently
holds with Picture Vision. During the Term, the Executive shall, subject to the
review of the Board of Directors regarding matters not involving day to day
operations or not otherwise in the ordinary course of business, determine the
policies for and have full control over the normal day to day operations of
Picture Vision Operating, including, without limitation, the setting and
granting of bonuses to employees within Picture Vision Operating. In so serving
the Company and Picture Vision Operating the Executive shall report to the Board
of Directors of the Company.

(b) During the Term, the Executive shall also serve on the Board of
Directors of the Company and shall serve on the Executive Advisory Committee,
which shall be a committee comprised of the principal executive officers of each
subsidiary or division which shall advise the Board of Directors on business
matters affecting the Company, including potential business ventures and
acquisitions.

4. COMPENSATION.

(a) As compensation for services hereunder and in consideration of
his agreement not to compete as set forth in Section 10 below, the Company shall
pay the

-2-
<PAGE>

(b) The Board of Directors shall establish a first tier bonus pool
("TIER I POOL") which the Board of Directors shall allocate among the Company's
divisions (or subsidiaries) with each division receiving its allocated amount if
it meets certain earnings targets after deducting all expenses and taxes payable
by such division including, without limitation, such division's allocated amount
of the Company's expenses, including, without limitation, its share of the
Company's legal, accounting, health and administrative expenses, but excluding
expenses incurred in connection with acquisitions which are not completed
(before giving effect to the Tier I Pool). The amount to be allocated, the
targets to be met and the basis for calculation, all with respect to the Tier I
Pool, shall be set annually in advance by the Board of Directors. For the
initial one year period under the Term of this Agreement the target shall be set
forth on SCHEDULE B, attached hereto. The Executive shall determine, in his
sole discretion, how much of the Tier I Pool funds allocated to Picture Vision
Operating shall be distributed to individuals in Picture Vision Operating. It
is acknowledged and understood that the Executive shall have the discretion to
allocate some or all of said funds to the Executive.

(c) The Board of Directors of the Company shall also establish a
second tier bonus pool ("TIER II POOL") which the Board of Directors shall, in
its discretion, allocate to employees of the Company, including employees of
subsidiaries and divisions. The Tier II Pool shall be comprised of 10% of the
Company's net income before taxes above the aggregate net profits before taxes
established as the targets for said fiscal year in the Tier I Pool. In
addition, the Executive shall be entitled to participate in the Special Bonus
Plan attached as Schedule C.

5. BENEFITS.

(a) During the Term, the Executive shall be entitled to participate
in the benefit plans established by the Company for the benefit of its key
executives.

-3-
<PAGE>

(b) The Executive shall be entitled to four (4) weeks of paid
vacation.

6. KEY MAN INSURANCE. The Company shall have the right to obtain key man
life insurance for the benefit of the Company on the life of the Executive. If
requested by the Company, the Executive shall submit to such physical
examination and otherwise take such actions and execute and deliver such
documents as may be reasonably necessary to enable the Company to obtain such
life insurance. The Executive has no reason to believe that his life is not
insurable with a reputable insurance company at rates now prevailing in the City
of New York for healthy men of his age.

7. DISCHARGE BY COMPANY. The Company shall be entitled to immediately
terminate the Term and to discharge the Executive for cause, which shall be
limited to the following grounds:

(i) Conviction of a felony; or

(ii) Commission of a willful or intentional act which could
injure the reputation, business or business or business relationships of
the Company including the violation of the terms of Sections 10 and/or 11
hereof;

8. DISABILITY, DEATH.

(a) If the Executive shall be unable to perform his duties hereunder
by virtue of illness or physical or mental incapacity or disability (from any
cause or causes whatsoever) in substantially the manner and to the extent
required hereunder prior to the commencement of such disability as determined by
a competent medical doctor (all such causes being herein referred to as
"DISABILITY") and the Executive shall fail to have performed substantially such
duties for 90 consecutive days or for periods aggregating 180 days, whether or
not continuous, in any continuous period of one year (such 90th or 180th day to
be known as the "DISABILITY DATE"), the Company shall have the right to
terminate the Executive's employment hereunder as at the end of any calendar
month thereafter upon written notice to him. The Executive shall be entitled to
his Base Salary for the remainder of the Term payable on the Company's regular
payroll schedule and to bonuses earned through such date determined at the end
of the fiscal year in which Disability occurred, with said bonuses limited to
the prorated portion equal to the portion of the fiscal year prior to
termination.

-4-
<PAGE>

(b) In case of the death of the Executive, this Agreement shall
terminate and the Company shall be obligated to pay to the Executive's estate or
as otherwise directed by the Executive's duly appointed and authorized legal
representative, his Base Salary for the remainder of the Term payable on the
Company's regular payroll schedule and to bonuses earned through such date
determined at the end of the fiscal year in which Death occurred, with said
bonuses limited to the prorated portion equal to the portion of the fiscal year
prior to termination.

10. CONFIDENTIAL INFORMATION. The Executive recognizes that he will
occupy a position of trust with respect to business and technical information of
a secret or confidential nature which is the property of the Company, or any of
its affiliates, and which has been and will be imparted to him from time to time
in the course of his employment with the Company. In light of this
understanding, the Executive agrees that:

(a) the Executive shall not at any time knowingly use or disclose,
directly or indirectly, any of the confidential information or trade secrets
which is the property of the Company, or any of its affiliates, to any person,
except that he may use and disclose to authorized Company personnel, licensees
or franchisees in the course of his employment; and

(b) within five (5) days from the date upon which his employment with
the Company is terminated, for any reason or for no reason, or otherwise upon
the request of the Company, he shall return to the Company any and all documents
and materials which constitute or contain the confidential information or trade
secrets of the Company, or any of its affiliates.

For purposes of this Agreement, the terms "CONFIDENTIAL INFORMATION" or "TRADE
SECRETS" shall include all information of any nature and in any form which is
owned by the Company, or any of its affiliates, and which is not publicly
available or generally known to persons engaged in businesses similar to that of
the Company, or any of its affiliates. Notwithstanding the foregoing, when the
Executive's employment with the Company is terminated, for whatever reason, the
limitations provided in this Section 10 shall not prevent the Executive from
using for his own benefit any information which he acquired prior to the date
hereof.

11. NON-COMPETITION.

-5-
<PAGE>

(b) As used in this Section 11, the term "COMPANY" shall include
subsidiaries, licensees, sub-licensees and franchisees of the Company, the term
"CUSTOMER" shall mean any person or entity who is then, or who had been at any
time during the one year period immediately preceding the date of termination of
the Executive's employment, a customer of the Company, and the term "ARTIST OR
CLIENT" shall mean any person or entity who is then, or who had been at any time
during the one year period immediately preceding the date of termination of the
Executive's employment, an artist or client represented by, signed by, working
for or collaborating with the Company.

(c) The parties hereto agree that the duration and area for which the
covenant not to compete set forth herein is to be effective are reasonable. In
the event that any court determines that the time period or the area, or both of
them, are unreasonable and that such covenant is to that extent unenforceable,
the parties hereto agree that the covenant shall remain in full force and effect
for the greatest time period and in the greatest area that would not render it
unenforceable.

-6-
<PAGE>

(d) If the Executive commits a material breach or is about to commit
a material breach, of any of the above provisions, the Company shall have the
right to temporary and preliminary injunctive relief to prevent the continuance
or commission of such breach prior to any hearing on the merits and to have the
provisions of this Agreement specifically enforced by any court having equity
jurisdiction without being required to post bond or other security and without
having to prove the inadequacy of the available remedies at law, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Company. In addition, the Company may take all such
other actions and remedies available to it under law or in equity and shall be
entitled to such damages as it can show it has sustained by reason of such
breach.

12. RESOLUTION OF DISPUTES. Any dispute by and among the parties hereto
arising out of or relating to this Agreement, the terms, conditions or a breach
thereof, or the rights or obligations of the parties with respect thereto, shall
be arbitrated in the City of New York, New York before and pursuant to then
applicable commercial rules and regulations of the American Arbitration
Association, or any successor organization. The arbitration proceedings shall
be conducted by a panel of three arbitrators, one of whom shall be selected by
the Company, one by the Executive (or his legal representative) and the third
arbitrator by the first two so chosen. The parties shall use their best efforts
to assure that the selection of the arbitrators shall be completed within 30
days and the parties shall use their best efforts to complete the arbitration as
quickly as possible. In such proceeding, the arbitration panel shall determine
who is a substantially prevailing party and shall award to such party its
reasonable attorneys', accountants' and other professionals' fees and its costs
incurred in connection with the proceeding. The award of the arbitration panel
shall be final, binding upon the parties and nonappealable and may be entered in
and enforced by any court of competent jurisdiction. such court may add to the
award of the arbitration panel additional reasonable attorneys' fees and costs
incurred by the substantially prevailing party in attempting to enforce such
award.

13. ENFORCEABILITY. The failure of either party at any time to require
performance by the other party of any provision hereunder shall in no way affect
the right of that party thereafter to enforce the same, nor shall it affect any
other party's right to enforce the same, or to enforce any of the other
provisions of this Agreement; nor shall the waiver by either party of the breach
of any provision hereof be taken or held to be a waiver of any subsequent breach
of such provision or as a waiver of the provision itself.

-7-
<PAGE>

fer of rights hereunder is attempted by the Executive contrary to the provisions
hereof, the Company shall have no further liability for payments hereunder.

16. SEVERABILITY; SURVIVAL. If any provision of this Agreement is held to
be void and unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement nevertheless shall be binding upon the parties with
the same effect as though the void or enforceable part has been severed and
deleted.

17. NOTICE. Notices given pursuant to the provisions of this Agreement
shall be sent by certified mail, postage prepaid, or by overnight courier, or by
telex, telecopier or telegraph, charges prepaid, to the following address:

To the Company: Paradise Music & Entertainment, Inc.
420 West 45th Street
New York, New York 10036

with a copy to: Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10112
Attn: Walter M. Epstein, Esq.

To the Executive: Jon Small
c/o Picture Vision, Inc.
209 Tenth Avenue South - Suite 425
Nashville, TN 37203

18. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

19. NO CONFLICT. The Executive represents and warrants that he is not
subject to any agreement, instrument, order, judgment or decree of any kind, or
any other restrictive agreement of any character, which would prevent him from
entering into this agreement or which would be breached by the Executive upon
his performance of his duties pursuant to this agreement

20. ENTIRE AGREEMENT. This agreement represents the entire agreement
between the Company and the Executive with respect to the subject matter hereof,
and all prior agreements relating to the employment of the Executive, written or
oral, are nullified and superseded hereby.

-8-
<PAGE>

IN WITNESS WHEREOF, the parties have set their hands and seals on and as of
the day and year first above written.

PARADISE MUSIC & ENTERTAINMENT, INC.

By:
--------------------------------
Name:
Title:

-----------------------------------
Jon Small

-9-
<PAGE>

SCHEDULE A

The Executive may devote such time as the Executive deems appropriate, without
adversely affecting the Executive's time devoted to the business of the Company,
to work for Scavenger, Inc.
<PAGE>

SCHEDULE B

TIER I POOL CALCULATION

Division Target Profitability Tier I Pool Amount
- -------- -------------------- ------------------

All Access Entertainment $325,000 (Year 1) $325,000
Management Group, Inc.(1)(2)(3) $512,500 (Year 2)
$512,500 (Year 3)
$475,000 for all
subsequent years

Picture Vision, Inc.(2) $375,000 (All Years) $225,000

- ---------------
(1) This amount may be allocated as Messrs. Doyle and Flynn may determine in
their sole discretion.

(2) Target Profitability with respect to each fiscal year shall be determined
by the Company's independent auditors in accordance with generally accepted
accounting principles, consistently applied based on net revenues of the
applicable subsidiary before taxes after deducting all expenses, excluding
(i) costs relating to or arising out of physically relocating the
businesses, (ii) costs of consummating the IPO, the transactions
contemplated under the Exchange Agreement and all other matters relating
thereto including costs directly associated with being a public company,
(iii) the base salary of Richard Flynn, John Loeffler or Jon Small, as the
case may be, (iv) monies expended pursuant to the Development Budget, (v)
rent in excess of current rent unless, based on employee growth, larger
facilities are required or as a result of required lease escalations. It
is understood and agreed that the Executives will be allocated pro rata
amounts of their Tier 1 bonuses to the same extent that their operating
divisions or subsidiaries achieve Target Profitability.

SCHEDULE C

SPECIAL BONUS PLAN

The Special Bonus Plan is as follows:

1. BUSINESS INCLUDED: The Special Projects as identified above.

2. BONUS THRESHOLD: The "Bonus Threshold" for a Special Project shall be
$1,000,000 of Special Project Net Profits.

4. BONUS AMOUNT: The bonus shall be 15% of Adjusted Special Project Net
Profits and 15% of Future Royalty Revenue.

<PAGE>

EXPENSE ALLOCATION AGREEMENT

AGREEMENT entered into as of October 9, 1996, by and among PARADISE
MUSIC & ENTERTAINMENT, INC., a Delaware corporation (the "COMPANY"), ALL ACCESS
ENTERTAINMENT MANAGEMENT GROUP, INC., a New York corporation ("ALL ACCESS"),
JOHN LEFFLER MUSIC, INC. d/b/a RAVE MUSIC GROUP, INC., a New York corporation
("RAVE"), PICTURE VISION, INC., a Tennessee corporation ("PICTURE VISION") and
ROBERT KLEIN ("Klein"). All Access, Rave and Picture Vision are collectively
referred to herein as the "ENTITIES."

W I T N E S S E T H:

WHEREAS, the Company is contemplating an Initial Public Offering of
its Common Stock, $.01 par value per share (the "IPO"); and

WHEREAS, the Company and the individuals who own all of the
outstanding capital stock of the Entities have entered into a certain Exchange
Agreement dated as of October 9, 1996 (the "EXCHANGE AGREEMENT"); and

WHEREAS, the Company, the Entities and Klein wish to set forth the
terms and conditions of an agreement allocating among the Entities and Klein
expenses to be incurred by the Company in connection with and related to the IPO
(the "EXPENSES") should the IPO not occur or should an Entity and/or Klein
withdraw from the transactions contemplated by the Exchange Agreement.

NOW, THEREFORE, the parties hereto hereby agree as follows:

1. EXPENSE LIABILITY OF THE ENTITIES. (a) If (i) the IPO is not
consummated or (ii) one or more of the Entities withdraws from the transactions
contemplated by the Exchange Agreement, then the Entities, if the IPO does not
occur, or the Entity or Entities withdrawing, shall each be liable as follows:
Klein shall be liable for 10% of the Expenses and Entities shall be liable for
30% of the Expenses (the "EXPENSE LIABILITY"); PROVIDED, HOWEVER, that the
Expense Liability for Klein shall not exceed $25,000 and the Expense Liability
for each of the other Entities shall not exceed $41,666.67 per Entity.

(b) The Company represents, warrants and covenants that except to
the extent provided herein that it has given no investor in the Company's
private placement or any professional or other person, firm or entity performing
services to or for the Company (a "Professional") any representation or
commitment that any signatory hereto (or any officer, director, agent, or
shareholder thereof) shall be liable to any such investor or Professional for
any

<PAGE>

obligation.
2. DURATION OF THE ENTITIES' LIABILITY. Each of the Entities
shall be liable for the Expense Liability actually incurred up to the sooner of
the date that such Entity is no longer involved in the transactions contemplated
by the Exchange Agreement or the date on which it is determined by the Company
that the IPO will not occur.

3. EXPENSE LIABILITY OF KLEIN. If (i) the IPO is not consummated
or (ii) Klein withdraws from the transactions contemplated by the Exchange
Agreement, then Klein's liability with respect to the Expenses shall not exceed
$25,000.

4. DURATION OF KLEIN'S LIABILITY. Klein shall be liable pursuant to
Section 3 above up to the sooner of the date that he is no longer involved in
the transactions contemplated by the Exchange Agreement or the date on which it
is determined by the Company that the IPO will not occur.

5. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

6. ENTIRE AGREEMENT. This agreement represents the entire agreement
between the Company and the Entities with respect to the subject matter hereof,
and any and all prior agreements relating to the allocation of expenses among
the Entities in connection with the IPO, written or oral, are nullified and
superseded hereby.

<PAGE>

IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the day and year first above written.

PARADISE MUSIC & ENTERTAINMENT, INC.

By:
----------------------------------------
Name:
Title:

ALL ACCESS ENTERTAINMENT MANAGEMENT
GROUP, INC.

By:
----------------------------------------
Name:
Title

JOHN LEFFLER MUSIC, INC.

By:
----------------------------------------
Name:
Title:

PICTURE VISION, INC.

By:
----------------------------------------
Name:
Title:

-------------------------------------------
Robert Klein

<PAGE>

--------------------------------------------
STANDARD FORM OF LOFT LEASE
____ REAL ESTATE BOARD OF NEW YORK, INC.
-C-Copyright 1982. All Rights Reserved.
Reproduction in whole or in part prohibited.
--------------------------------------------

Agreement of Lease, made as of this 24th day of June 1992, between NEWARK &
COMPANY REAL ESTATE, INC., AGENT FOR: 410-22 ASSOCIATES with principal offices
at 1501 Broadway, New York, New York 10036
party of the first part hereinafter referred to as OWNER, and NOT JUST JINGLES,
INC.

party of the second part, hereinafter referred to as TENANT,
Witnesseth: Owner hereby leases to Tenant and Tenant hereby hires from Owner
Entire 5th Floor
in the building known as 420 West 45th Street
in the Borough of Manhattan, City of New York, for the term of Four (4) years
Ten (10) months (or unit such term shall sooner cease and expire as hereinafter
provided) to commence on the First day of July nineteen hundred and ninety-two,
and to end on the thirty-first day of May nineteen hundred and ninety-seven both
date inclusive, at an annual rental rate of

FIFTY THOUSAND AND 00/100 ($50,000.00) DOLLARS

which Tenant agrees to pay in lawful money of the United States which shall be
legal tender in payment of all debts and dues, public and private at the time of
payment, in equal monthly installments in advance on the first day of each month
during said term, at the office of Owner or such other place as Owner may
designate, without any set off or deduction whatsoever, except that Tenant shall
pay the first monthly installment(s) on the execution hereof (unless
this lease be a renewal).
In the event that, at the commencement of the term of this lease, or
thereafter, Tenant shall be in default in the payment of rent to Owner pursuant
to the terms of another least with Owner or with Owner's predecessor in
interest, Owner may at Owner's option and without notice to Tenant add the
amount of such arrears to any monthly installment of rent payable hereunder and
the same shall be payable to Owner as additional rent.
The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:

OCCUPANCY: 1. Tenant shall pay the rent as above and as hereinafter
provided.

USE: 2. Tenant shall use and occupy demised premises for
RECORDING STUDIO provided such use is in accordance with the
Certificate of Occupancy for the building, if any, and for no other
purpose.

Alterations: 3. Tenant shall make no changes in or to the demised of any
nature without Owner's prior written consent. Subject to the prior written
consent of Owner, and to the provisions of this article, Tenant at Tenant's
expense, may make alterations, installations, additions or improvements which
are non-structural and which do not affect utility services or plumbing and
electricity lines, in or to the interior of the demised premises using
contractors or mechanics first approved by Owner. Tenant shall, at its
expense, before making any alterations, additions, installations, or
improvements obtain all permits, approval and certificates require by any
governmental or quasi-governmental bodies and (upon completion) certificates
of final approval thereof shall deliver promptly duplicates of all such
permits, approvals and certificates to Owner. Tenant agrees to carry and will
cause Tenant's contractors and sub-contractors to carry such workman's
compensation, general liability, personal and property damage insurance as
Owner may require. If any mechanic's lien is filed against the demised
premises, or the building of which the same forms a part, for work claimed to
have been done for, or materials furnished to, Tenant, whether or not done
pursuant to this article, the same shall be discharged by Tenant within
thirty days thereafter, at Tenant's expense, by filing the bond required by
law or otherwise. All fixtures and all paneling, partitions, railings and
like installations, installed in the premises at any time, either by Tenant
or by Owner on Tenant's behalf, shall, upon installation, become the property
of Owner on Tenant's behalf, shall, upon installation, became the property of
Owner and shall remain

<PAGE>

upon and be surrendered with the demised premises unless Owner, by notice to
Tenant no later than twenty days prior to the date fixed as the termination of
this lease, elects to relinquish Owner's right thereto and to have them removed
by Tenant, in which event the same shall be removed from the demised premises by
Tenant prior to the expiration of the lease, at Tenant's expense. Nothing in
this Article shall be construed to give Owner title to or to prevent Tenant's
removal of trade fixtures, moveable office furniture and equipment, but upon
removal of any such from the premises or upon removal of other installations as
may be required by Owner, Tenant shall immediately and at its expense, repair
and restore the premises to the condition existing prior to installation and
repair any damage to the demised premises or the building due to such removal.
All property permitted or required to be removed, by Tenant at the end of the
term remaining in the premises after Tenant's removal shall be deemed abandoned
and may, at the election of Owner, either be retained as Owner's property or
removed from the premises by Owner, at Tenant's expenses.

Repairs: 4. Owner shall maintain and repair the exterior of and the public
portion of the building. Tenant shall, throughout the term of this lease, take
good care of the demised premises including the bathrooms and lavatory
facilities (if the demised premises encompass the entire floor of the building)
and the windows and window frames and, the fixtures and appurtenances therein
and at Tenant's sole cost and expense promptly make all repairs thereto and to
the building, whether structural or non-structural in nature, caused by or
resulting from the careless, omission, neglect or improper conduct of Tenant,
Tenant's servants, employees, invitees, or licensees, and whether or not arising
from such Tenant conduct or omission, when required by other provisions of this
lease, including Article 6. Tenant shall also repair all damage to the building
and the demised premises caused by the moving of Tenant's fixtures, furniture or
equipment. All the aforesaid repairs shall be of quality or class equal to the
original work or construction. If Tenant fails, after ten days notice, to
proceed with due diligence to make repairs required to be made by Tenant, the
same may be made by the Owner at he expense of Tenant, and the expense of
Tenant, and the expenses thereof incurred by Owner shall be collectible, as
additional rent, after rendition of a bill or statement therefor. If the demised
premises be or become infested with vermin, Tenant shall, at its

<PAGE>

expense, cause the same to be exterminated. Tenant shall give Owner prompt
notice of any defective condition in any plumbing, heating system or electrical
lines located in the demised premises and following such notice. Owner shall
remedy the condition with due diligence, but at the expense of Tenant, if
repairs are necessitated by damage or injury attributable to Tenant, Tenant's
servants, agents, employees, invitees or licensees as aforesaid. Except as
specifically provided in Article 9 or elsewhere in this lease, there shall be no
allowance to the Tenant for a diminution of rental value and no liability on the
part of Owner by reason of inconvenience, annoyance or injury to business
arising from Owner, Tenant or others making or falling to make any repairs,
alterations, additions, or improvements in or to any portion of the building or
the demised premises or in and to the fixtures, appurtenances or equipment
thereof. The provisions of this Article 4 with respect to the making of repairs
shall not apply in the case of fire or other casualty with regard to which
Article 9 hereof shall apply.

Window
Cleaning 5. Tenant will not clean nor require, permit suffer or allow any
window in the demised premises to be cleaned from the outside in violation of
Section 202 of the New York State Labor Law or any other applicable law or of
the Rules of the Board of Standards and Appeals, or of any other Board or body
having or asserting jurisdiction.

Requirements of Law, Fire Insurance, Floor Loads: 6. Prior to the
commencement of the lease term, if Tenant is then in possession, and at all
times thereafter, Tenant shall, at Tenant's sole cost and expense, promptly
comply with all present and future laws, orders, and regulations of all
state, federal, municipal and local governmental, departments, commissions,
and boards and any direction of any public officer pursuant to law, and all
orders, rules and regulations of the New York Board of Fire Underwriters, or
the Insurance Services Officers, or any similar body which shall impose any
violation, order or duty upon Owner or Tenant with respect to the demised
premises, whether or not arising our of Tenant's use or manner of use
thereof, or, with respect to the building, if arising out of Tenant's use or
manner of use of the demised premises or the building or the building
(including the use permitted under the

<PAGE>

------------------------------------------------
------------------------------------------------

STANDARD FORM OF LOFT LEASE
THE REAL ESTATE BOARD OF NEW YORK, INC.

------------------------------------------------
------------------------------------------------

Agreement of Lease, made as of this 28th day of October 1994, between SILK &
HALPERN REALTY ASSOCIATES, INC., as Agent, having offices at 6 East 45th Street,
New York New York 10017 party of the first part
hereinafter referred to as OWNER, and

ALL ACCESS ENTERTAINMENT MANAGEMENT, INC., with offices at 130 West 57th Street,
Suite 12-B, New York, N.Y. 10019

New York, N.Y. 10019 Federal I.D.# ______________________
party of the second part, hereinafter referred to as TENANT,
Witnesseth: Owner hereby leases to Tenant and Tenant hereby hires from Owner
Room 802 as presently divided in the building known as 420 West 45th Street
in the Borough of Manhattan, City of New York, for the term of two (2) Years
Four (4) Months
(or unit such term shall sooner cease and expire as hereinafter provided) to
commence on the 1st day of November nineteen hundred and ninety-four, and to end
on the 28th day of February nineteen hundred and ninety-seven both date
inclusive, at an annual rental rate of

Set forth in paragraph 37 of the Rider attached hereto

<PAGE>

OCCUPANCY 2. Tenant shall use and occupy demised premises for general and
executive offices and legal offices and for no other
purposes.

Tenant
Alterations: 3. Tenant shall make no changes in or to the demised of any
nature without Owner's prior written consent. Subject to the prior written
consent of Owner, and to the provisions of this article, Tenant at Tenant's
expense, may make alterations, installations, additions or improvements which
are non-structural and which do not affect utility services or plumbing and
electricity lines, in or to the interior of the demised premises using
contractors or mechanics first approved by Owner. Tenant shall, before making
any alterations, additions, installations, or improvements, at its expense,
obtain all permits, approval and certificates require by any governmental or
quasi-governmental bodies and (upon completion) certificates of final approval
thereof shall deliver promptly duplicates of all such permits, approvals and
certificates to Owner. Tenant agrees to carry and will cause Tenant's
contractors and sub-contractors to carry such workman's compensation, general
liability, personal and property damage insurance as Owner may require. If any
mechanic's lien is filed against the demised premises, or the building of which
the same forms a part, for work claimed to have been done for, or materials
furnished to, Tenant, whether or not done pursuant to this article, the same
shall be discharged by Tenant within thirty days thereafter, at Tenant's
expense, by filing the bond required by law or otherwise. All fixtures and all
paneling, partitions, railings and like installations, installed in the premises
at any time, either by Tenant or by Owner on Tenant's behalf, shall, upon
installation, become the property of Owner in Tenant's behalf, shall, upon
installation, became the property of Owner and shall remain upon and be
surrendered with the demised premises unless Owner, by notice to Tenant no later
than twenty days prior to the date fixed as the termination of this lease,
elects to relinquish Owner's right thereto and to have them removed by Tenant,
in which event the same shall be removed from the demised premises by Tenant
prior to the expiration of the lease, at Tenant's expense. Nothing in this
Article shall be construed to give Owner title to or to prevent Tenant's removal
of trade fixtures, moveable office furniture and equipment, but upon removal of
any such from the premises or upon removal of other installations as may be
required by Owner, Tenant shall immediately and at its expense, repair and
restore the premises to the condition existing prior to installation and repair
any damage to the demised premises or the building due to such removal. All
property permitted or required to be removed, by Tenant at the end of the term
remaining in the premises after Tenant's removal shall be deemed abandoned and
may, at the election of Owner, either be retained as Owner's property or removed
from the premises by Owner, at Tenant's expenses.

Maintenance and Repairs: 4. Tenant shall, throughout the term of this
lease, take good care of the demised premises including the bathrooms and
lavatory facilities (if the demised premises encompass the entire floor of the
building)

<PAGE>

and the windows and window frames and, the fixtures and appurtenances therein
and at Tenant's sole cost and expense promptly make all repairs thereto and to
the building, whether structural or non-structural in nature, caused by or
resulting from the careless, omission, neglect or improper conduct of Tenant,
Tenant's servants, employees, invitees, or licensees, and whether or not arising
from such Tenant conduct or omission, when required by other provisions of this
lease, including Article 6. Tenant shall also repair all damage to the building
and the demised premises caused by the moving of Tenant's fixtures, furniture or
equipment. All the aforesaid repairs shall be of quality or class equal to the
original work or construction. If Tenant fails, after ten days notice, to
proceed with due diligence to make repairs required to be made by Tenant, the
same may be made by the Owner at he expense of Tenant, and the expense of
Tenant, and the expenses thereof incurred by Owner shall be collectible, as
additional rent, after rendition of a bill or statement therefor. If the demised
premises be or become infested with vermin, Tenant shall, at its expense, cause
the same to be exterminated. Tenant shall give Owner prompt notice of any
defective condition in any plumbing, heating system or electrical lines located
in the demised premises and following such notice. Owner shall remedy the
condition with due diligence, but at the expense of Tenant, if repairs are
necessitated by damage or injury attributable to Tenant, Tenant's servants,
agents, employees, invitees or licensees as aforesaid. Except as specifically
provided in Article 9 or elsewhere in this lease, there shall be no allowance to
the Tenant for a diminution of rental value and no liability on the part of
Owner by reason of inconvenience, annoyance or injury to business arising from
Owner, Tenant or others making or falling to make any repairs, alterations,
additions, or improvements in or to any portion of the building or the demised
premises or in and to the fixtures, appurtenances or equipment thereof. The
provisions of this Article 4 with respect to the making of repairs shall not
apply in the case of fire or other casualty with regard to which Article 9
hereof shall apply.

Requirements of Law, Fire Insurance, Floor Loads: 6. Prior to the
commencement of the lease term, if Tenant is then in possession, and at all
times thereafter, Tenant shall, at Tenant's sole cost and expense, promptly
comply with all present and future laws, orders, and regulations of all
state, federal, municipal and local governmental, departments, commissions,
and boards and any direction of any public officer pursuant to law, and all
orders, rules and regulations of the New York Board of Fire Underwriters,
Insurance Services Officers, or any similar body which shall impose any
violation, order or duty upon Owner or Tenant with respect to the demised
premises, whether or not arising our of Tenant's use or manner of use

<PAGE>

thereof, or, with respect to the building, if arising out of Tenant's use or
manner of use of the demised premises or the building or the building (including
the use permitted under the lease). Northern herein shall require Tenant to make
structural repairs or alterations unless Tenant has, by its manner of use of the
demised premises or method of operation therein, violated any such laws
ordinances, orders, rules, regulations or requirement with respect thereto.
Tenant may, after securing Owner to Owner's satisfaction against all damages,
interest, penalties and expenses, including, but not limited to reasonable
attorney's fees, by cash deposit or by surety bond in any amount and in a
company satisfactory to Owner, contest and appeal any such laws, ordinances,
orders, rules, regulations or requirements provided same is done with all
reasonable promptness and provided such appeal shall not subject Owner to
prosecution for a criminal offense or constitute a default under any lease or
mortgage under which Owner may be obligated, or cause the demised premises or
any part thereof to be condemned or vacated. Tenant shall not do or permit any
act or thing to be done in or to the demised premises which is contrary to law,
or which will invalidate or be in conflict with publicity liability, fire or
other policies of insurance at any time carried by or for the benefit of Owner
with respect to the demised premises or the building of which the demised
premises form a pat, or which shall or might subject Owner to any liability or
responsibility to any person or for property damage. Tenant shall not keep
anything in the demised premises except as now or hereafter permitted by the
Fire Department, Board of Fire Underwriters, Fire Insurance Rating Organization
or other authority having jurisdiction, and then only in such manner and such
quantity so as not to increase the rate of fire insurance applicable to the
building, nor use the premises in a manner which will increase the insurance
rate for the building or any property located therein over that in effect prior
to the commencement of Tenant's occupancy. Tenant shall pay all costs, expenses,
fines, penalties, or damages, which may be imposed upon Owner by reason of
Tenant's failure to comply with the provisions of this article and if by reason
of such failure the fire insurance rate shall, at the beginning of this lease or
at any time thereafter, be higher than it otherwise would be, then Tenant shall
reimburse Owner, as additional rent hereunder, for that portion of all fire
insurance premiums thereafter paid by Owner which shall have been charged
because of such failure by Tenant. In any action or proceeding wherein Owner and
Tenant are parties, a schedule or "make-up" of rate for the building or demised
premises issued by the New York Fire Insurance Exchange, or other body making
fire insurance rate applicable to said premises shall be conclusive evidence of
the facts therein stated and of the several items and charges in the fire
insurance rates then applicable to said premises. Tenant shall not place a load
upon any floor of the demised premises exceeding the floor load per square foot
area which it was designed to carry and which is allowed by law. Owner reserves
the right to prescribe the weight and position of all safes, business machines
and mechanical equipment. Such installations shall be placed and maintained by
Tenant, at Tenant's expense, in settings sufficient, in Owner's judgement,

<PAGE>

to absorb and prevent vibration, noise and annoyance.

Subordination: 7. This lease is subject and subordinate to all ground or
underlying leases and to all mortgages which may now or hereafter affect such
leases or the real property of which demised premises are a part and all
renewals, modifications, consolidations, replacements and extensions of any such
underlying leases and mortgages. This clause shall be self-operative and no
further instrument of subordination shall be required by any ground or
underlying lessor or by any mortgagee, affecting any lease or the real property
of which the demised are a part. In confirmation of such subordination, Tenant
shall execute promptly any certificate that Owner may request.

Property-Loss, Damage, Reimbursement, Indemnity: 8. Owner or its agents
shall not be liable for any damage to property of Tenant or of others entrusted
to employees of the building, nor for loss of or damage to any property of
Tenant by theft or otherwise, nor for any injury or damage to persons or
property resulting from any cause of whatsoever nature, unless caused by or due
to the negligence of Owner, its agents, servants or employees. Owner or its
agents will not be liable for any such damage caused by other tenants or persons
in, upon or about said building or caused by operations in construction of any
private, public or quasi public work.
If at any time any windows of the demised are temporarily closed, darkened or
bricked up, if required by law) for any reason whatsoever including, but not
limited to Owner's own acts, Owner shall not be liable for any damage Tenant may
sustain thereby and Tenant shall not be entitled to any compensation therefor
nor abatement or diminution of rent nor shall the same release Tenant from its
obligations hereunder nor constitutes an eviction. Tenant shall indemnify and
save harmless Owner against and from all liabilities, obligations, damages,
penalties, claims, costs and expenses for which Owner shall not be reimbursed by
insurance, including reasonable attorneys fees, paid, suffered or incurred as a
result of any breach by Tenant, Tenant's agents, contractors, employees,
invitees, or licensees,any covenant or condition of this lease, or the
carelessness, negligence or improper conduct of the Tenant, Tenant's agents,
contractors, employees, invitees or licensees. Tenant's liability under this
lease extends to the acts and omissions of any sub-tenant, and any agent,
contractor, employees, invitees or licensee of any sub-tenant. In case any
action or proceeding is brought against Owner by reason of any such claim,
Tenant, upon written notice from Owner, will, at Tenant's expense, resist or
defend such action or proceeding by counsel approved by Owner in writing, such
approval not to be unreasonably withheld.

Destruction Fire and Other Casualty 9. (a) If the demised premises or any
part thereof shall be damaged by fire or other casualty, Tenant shall give
immediate notice thereof to Owner and this lease shall continue in full force
and effect except as hereinafter set forth. (b) If the demised premises re
partially damaged or rendered partially unusable by fire or other casualty, the
damages thereto shall be repaired by and at the expense of Owner and the rent,
until such repair shall be substantially completed, shall be apportioned

<PAGE>

form the day following the casualty according to the part of the premises which
is usable. (c) If the demised premises are totally damaged or rendered wholly
unusable by fire or other casualty, then the rent shall be proportionately paid
up to the time of the casualty and thenceforth shall cease until the date when
the premises shall have been repaired and restored by Owner, subject to Owner's
right to elect not to restore the same as hereinafter provided. (d) If the
demised premises are rendered wholly unusable or (whether or not the demised
premises are damaged in whole or in part) if the building shall be so damaged
that Owner shall decide to demolish or to rebuild it, then, in any of such
events, Owner shall decide to demolish it or to rebuild it, then, in any of such
events, Owner may elect to terminate this lease by written notice to Tenant,
given within 90 days after such fire or casualty, specifying a date for the
expiration of the lease, which date shall not be more than 60 days after the
giving of such notice, and upon the date specified in such notice term of this
lease shall expires fully lease). Northern herein shall require Tenant to make
structural repairs or alterations unless Tenant has, by its manner of use of the
demised premises or method of operation therein, violated any such laws
ordinances, orders, rules, regulations or requirement with respect thereto.
Tenant may, after securing Owner to Owner's satisfaction against all damages,
interest, penalties and expenses, including, but not limited to reasonable
attorney's fees, by cash deposit or by surety bond in any amount and in a
company satisfactory to Owner, contest and appeal any such laws, ordinances,
orders, rules, regulations or requirements provided same is done with all
reasonable promptness and provided such appeal shall not subject Owner to
prosecution for a criminal offense or constitute a default under any lease or
mortgage under which Owner may be obligated, or cause the demised premises or
any part thereof to be condemned or vacated. Tenant shall not do or permit any
act or thing to be done in or to the demised premises which is contrary to law,
or which will invalidate or be in conflict with publicity liability, fire or
other policies of insurance at any time carried by or for the benefit of Owner
with respect to the demised premises or the building of which the demised
premises form a pat, or which shall or might subject Owner to any liability or
responsibility to any person or for property damage. Tenant shall not keep
anything in the demised premises except as now or hereafter permitted by the
Fire Department, Board of Fire Underwriters, Fire Insurance Rating Organization
or other authority having jurisdiction, and then only in such manner and such
quantity so as not to increase the rate of fire insurance applicable to the
building, nor use the premises in a manner which will increase the insurance
rate for the building or any property located therein over that in effect prior
to the commencement of Tenant's occupancy. Tenant shall pay all costs, expenses,
fines, penalties, or damages, which may be imposed upon Owner by reason of
Tenant;'s failure to comply with the provisions of this article and if by reason
of such failure the fire insurance rate shall, at the beginning of this lease or
at any time thereafter, be higher than it otherwise would be, then Tenant shall
reimburse Owner, as additional rent hereunder, for that portion of all fire
insurance premiums thereafter paid by Owner which shall have been charged

<PAGE>

because of such failure by Tenant. In any action or proceeding wherein Owner and
Tenant are parties, a schedule or "make-up" of rate for the building or demised
premises issued by the New York Fire Insurance Exchange, or other body making
fire insurance rate applicable to said premises shall be conclusive evidence of
the facts therein stated and of the several items and charges in the fire
insurance rates then applicable to said premises. Tenant shall not place a load
upon any floor of the demised premises exceeding the floor load per square foot
area which it was designed to carry and which is allowed by law. Owner reserves
the right to prescribe the weight and position of all safes, business machines
and mechanical equipment. Such installations shall be placed and maintained by
Tenant, at Tenant's expense, in settings sufficient, in Owner's judgement, to
absorb and prevent vibration, noise and annoyance.

10. EMINENT DOMAIN: If the whole or any part of the demised premises
shall be acquired or condemned by Eminent Domain for any public or quasi public
use or purpose, then and in that event, the term of this lease shall cease and
terminate from the date of title vesting in such proceeding and Tenant shall
have no claim for the value of any unexpired term of said lease and assigns to
Owner, Tenant's entire interest in any such award.

11. ASSIGNMENT, MORTGAGE, ETC.: Tenant, for itself, its heirs,
distributees, executors, administrators, legal representatives, successors and
assigns, expressly covenants that it shall not assign, mortgage or encumber this
agreement, nor underlet, or suffer or permit the demised premises or any part
thereof to be used by others, without the prior written consent of Owner in each
instance. Transfer of the majority of the stock of a corporate tenant shall be
deemed an assignment. If this lease be assigned, or if the demised premises or
any part thereof be underlet or occupied by anybody other than Tenant, Owner
may, after default by Tenant, collect rent from the assignee, under-tenant or
occupant, and apply the net amount collected to the rent herein reserved, but no
such assignment, underletting, occupancy or collection shall be deemed a waiver
of this covenant, or the acceptance of the assignee, under-tenant or occupant as
tenant, or a release of Tenant from the further performance by Tenant of
covenants on the part of Tenant herein contained. The consent by Owner to an
assignment or underletting shall not in any wise by construed to relieve Tenant
from obtaining the express consent in writing of Owner to any further assignment
or underletting.

12. ELECTRIC CURRENT: Rates and conditions in respect to submetering or
rent inclusion, as the case may be, to be added in RIDER attached hereto.
Tenant covenants and agrees that at all times its use of electric current shall
not exceed the capacity of existing feeders to the building or the risers or
writing installation and Tenant amy not use any electrical equipment which, in
Owner's opinion, reasonably exercised, will overload such installations or
interfere with the use thereof by other tenants of the building. The change at
any time of the character of electric service shall in no wise make Owner liable
or responsible to Tenant, for any loss, damages or expenses which Tenant may
sustain.

<PAGE>

13. ACCESS TO PREMISES: Owner or Owner's agents shall have the right (but
shall not be obligated) to enter the demised premises in any emergency at any
time, and, at other times, to examine the same and to make such repairs,
replacements and improvements as Owner may deem necessary and reasonably
desirable to the demised premises or to any other portion of the building or
which Owner may elect to perform. Tenant shall permit Owner to use and maintain
and replace pipes and conduits thereon provided they are concealed within the
walls, floor, or ceiling. Owner may, during the progress of any work in the
demised premises, take all necessary materials and equipment into said premises
without the same constituting an eviction nor shall the Tenant be entitled to
any abatement of rent while such work is in progress nor to any damages by
reason of loss or interruption of business or otherwise. Throughout the term
hereof Owner shall have the right to enter the demised premises at reasonable
hours for the purpose of showing the same to prospective purchases or mortgagees
of the building, and during the last six months of the term for the purpose of
showing the same to prospective tenants. If Tenant is not present to open and
permit an entry into the premiss, Owner or Owner's agents may enter the same
whenever such entry may be necessary or permissible by master key or forcibly
and provided reasonable care is exercised to safeguard Tenant's property, such
entry shall not render Owner or its agents liable therefor, nor in any event
shall the obligations of Tenant hereunder be affected. If during the last month
of the term Tenant shall have removed all or substantially all of Tenant's
property therefrom. Owner may immediately enter, alter, renovate or redecorate
the demised premises without limitation or abatement of rent, or incurring
liability to Tenant for any compensation and such act shall have no effect on
this lease or Tenant's obligations hereunder.

14. VAULT, VAULT SPACE, AREA: No vaults, vault space or area, whether or
not enclosed or covered, not within the property line of the building is leased
hereunder, anything contained in or indicated on any sketch, blue print or plan,
or anything contained elsewhere in this lease to the contrary notwithstanding.
Owner makes no representation as to the location of the property line of the
building. All vaults and vault space and all such areas not within the property
line of the building, which tenant may be permitted to use and/or occupy, is to
be used and/or occupied under a revocable license, and if any such license be
revoked, or if the amount of such space or area by diminished or required by any
federal, state or municipal authority or public utility, Owner shall not be
subject to any liability nor shall Tenant be entitled to any compensation or
diminution or abatement of rent, no shall such revocation, diminution, or
requisition be deemed constructive or actual eviction. Any tax, fee or charge of
municipal authorities for such value or area shall be paid by Tenant.

15. OCCUPANCY: Tenant will not at any time use or occupy the demised
premises in violation of the certificate of occupancy issued for the building of
which the demised premises are a part. Tenant has inspected the premises and
accepts them as is, subject to the riders annexed hereto with respect to Owner's
work, if any. In any event, Owner makes no representation as to the condition

<PAGE>

of the premises and Tenant agrees to accept the same subject to violations,
whether or not of record.

16. BANKRUPTCY: (a) Anything elsewhere in this lease to the contrary
notwithstanding, this lease may be cancelled by Owner by the sending of a
written notice to Tenant within a reasonably time after the happening of any one
or more of the following events: (1) the Commencement of a case in bankruptcy or
under the laws of any state naming Tenant as the debtor; or (2) the making by
tenant of an assignment or any other arrangement for the benefit of creditors
under any state statute. Neither Tenant nor any person claiming through or
under Tenant, or by reasonable of any statute or order or court, shall
thereafter be entitled to possession of the premises demised but shall forthwith
quit and surrender the premises. If this lease shall be assigned in accordance
with its terms, the provision of this Article 156 shall be applicable only to
the party then owning Tenant's interest in this lease.

(b) It is stipulated and agreed that in the event of the termination
of this lease pursuant to (a) hereof, Owner shall forthwith, notwithstanding any
other provisions of this lease to the contrary, be entitled to recover from
Tenant as and for liquidated damages an amount equal to the difference between
the rent reserved hereunder for the unexpired portion of the term demised and
the fair and reasonably rental value of the demised premises for the same
period. In the computation of such damages the difference between any
installment of rent becoming due hereunder after the date of termination and the
fair and reasonably rental value of the demised premises for the period for
which such installment was payable shall be discounted to the date of
termination at the rate of four percent (4%) per annum. If such premises or any
part thereof be relet by the Owner for the unexpired term of said lease, or any
part thereof, before presentation of proof of such liquidated damages to any
court, commission or tribunal, the amount of rent reserved upon such reletting
shall be deemed to be the fair and reasonable rental value for the part or the
whole of the premises so re-let during the term of the re-letting. Nothing
herein contained shall limit or prejudice the right of the Owner to provide for
an obtain as liquidated damages by reason of such termination, an amount equal
to the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved, whether
or not such amount be greater, equal to, or less than the amount of the
difference referred to above.

17. DEFAULT: (1) If Tenant defaults in fulfilling any of the covenants of
this lease other than the covenants for the payment of rent or additional rent;
or if the demised premises become vacant or deserted; or if any execution or
attachment shall be issued against Tenant or any of Tenant's property whereupon
the demised premises shall be taken or occupied by someone other than tenant' of
if this lease be rejected under Section 235 of title 11 of the U.S. Code
(bankruptcy code); or if Tenant shall fail to move into or take possession of
the premises within fifteen (15) days after the commencement of the term of this
lease, then, in any one or more of such events, upon Owner serving a

<PAGE>

written five 95) days notice upon Tenant specifying the nature of said default
and upon the expiration of said five (5) days, if Tenant shall have failed to
comply with or remedy such default, or if the said default or omission
complained of shall be of a nature that the same cannot be completely cured or
remedied within said five (5) day period, and if Tenant shall not have
diligently commenced curing such default within such five 95) day period, sand
shall not thereafter with reasonable diligence and in good faith, proceed to
remedy or cure such default, then Owner may serve a written three 93) days'
notice of cancellation of this lease upon Tenant, and upon the expiration of
said three (3) days this lease and the term thereunder shall end and expire as
fully and completely as if the expiration of such three (3) day period were the
day herein definitely fixed for the end and expiration of this lease and the
term thereof and Tenant shall then quit and surrender the demised premises to
owner but Tenant shall remain liable as hereinafter provided.

(2) If the notice provided for in (l) hereof shall have been given,
and the term shall expire as aforesaid; or if tenant shall make default in the
payment of the rent reserved herein or any item of additional rent herein
mentioned or any part of either or in making any other payment herein required;
then and in any of such events Owner may without notice, re-enter the demised
premises either by force or otherwise, and dispossess Tenant by summary
proceedings or otherwise, and the legal representative of Tenant or other
occupancy of demised premises and remove their effects and hold the premises as
if this lease had not bee made, and tenant hereby waives the service of notice
of intention to re-enter or to institute legal proceedings to that end. If
Tenant shall make default hereunder prior to the date fixed as the commencement
of any renewal or extension of this lease, Owner may cancel and terminate such
renewal or extension agreement by written notice.

18. REMEDIES OF OWNER AND WAIVER OF REDEMPTION: In case of any such
default, re-entry, expiration and/or dispossess by summary proceedings or
otherwise, (a) the rent shall become due thereupon and be paid up to the time of
such re-entry, dispossess and/or expiration, (b) Owner may re-let the premises
or nay part or parts thereof, either in the name of Owner or otherwise, for a
term or terms, which may at Owner's option be less than or exceed the period
which would otherwise have constituted the balance of the term of this lease and
may grant concession or free rent or charge a higher rental than that in this
lease, and/or (c) Tenant or the legal representatives of Tenant shall also pay
Owner as liquidated damages for the failure of Tenant to observe and perform
said Tenant's covenants herein contained, any deficiency between the rent hereby
reserved and/or covenanted to be paid and the net amount, if any, of the rents
collected on account of the lease or leases of the demised premises for each
month of the period which would otherwise have constituted the balance of the
term of this lease. The failure of owner to relet the premises or any part or
parts thereof shall not release or affect Tenant's liability for damages. In
computing such liquidated damages there shall be added to the said deficiency
such expenses as Owner may incur in connection with re-letting, such as

<PAGE>

legal expenses, attorneys' fees, brokerage, advertising and for keeping the
demised premises in good order or for preparing the same for re-letting. Any
such liquidated damages shall be paid in monthly installments by tenant on the
rent day specified in this lease and any suit brought to collect the amount of
the deficiency for any month shall not prejudice in any way the rights of Owner
to collect the deficiency for any subsequent month by a similar proceeding.
Owner, in putting the demised premises in good order or preparing the same for
re-rental may, at Owner's option, make such alterations, repair, replacement,
and/or decoration sin the demised premises as Owner, in Owner's sole judgment,
considers advisable and necessary for the purpose of re-letting the demised
premises, and the making of such alterations, repairs, replacement, and/or
decorations shall not operate or be construed to release Tenant from liability
hereunder as aforesaid. Owner shall in no event be liable in any way whatsoever
for failure to relet the demised premises, or in the event that the demised
premises are re-let, for failure to collect the rent thereof under such
re-letting, and in o event shall Tenant be entitled to receive any excess, if
any, of such net rents collected over the sums payable by Tenant to Owner
hereunder. In the event of a breach or threatened breach by tenant of any of
the covenants or provisions hereof, Owner shall have the right of injunction and
the right to invoke any remedy allowed by law or in equity as if re-entry,
summary proceedings and other remedies were not herein provided for. Mention in
this lease of any particular remedy, shall not preclude Owner from any other
remedy, in law or inequity. Tenant hereby expressly waives any and all rights
of redemption granted by or under any present or future laws in the event of
Tenant being evicted or dispossessed for any cause, or in the event of Owner
obtaining possession of demised premises, by reason for the violation by Tenant
of any of the covenants and conditions of this lease, or otherwise.

19. FEES AND EXPENSES: If Tenant shall default in the observance or
performance of any term or covenant on Tenant's part to be observed or performed
under or by virtue of any of the terms or provisions in any article of this
lease, then, unless otherwise provided elsewhere in this lease, Owner may
immediately or at nay time thereafter and without notice perform the obligation
of Tenant thereunder. If Owner, in connection with the foregoing or in
connection with any default by Tenant in the covenant to pay rent hereunder,
makes any expenditures or incurs any obligations for the payment of money,
including but not limited to attorney's fees, in, prosecuting or defending any
action or proceeding, then tenant will reimburse Owner for such sums so paid or
obligations incurred with interest and costs.. The foregoing expenses incurred
by reason of Tenant's default shall be deemed to be additional rent hereunder
and shall be paid by Tenant to Owner within five (5) days of rendition of any
bill or statement to Tenant therefor. If Tenant's lease term shall have expired
at the time of making of such expenditures or incurring of such obligations,
such sums shall be recoverable by Owner as damages.

20. BUILDING ALTERATIONS AND MANAGEMENT: Owner shall have the right at
any time without the same constituting an eviction and without incurring
liability to

<PAGE>

Tenant therefor to change the arrangement and/or location of public entrances,
passageways, doors, doorways, corridors, elevators, stairs, toilets or other
public parts of the building and to change the name, number or designation by
which the building may be known. There shall be no allowance to Tenant for
diminution of rental value and no liability on the part of owner by reason of
inconvenience, annoyance or injury to business arising from Owner or other
Tenants making repairs in the building or anal such alterations, additions and
improvements. Furthermore, Tenant shall not have any claim against Owner by
reason of Owner's imposition of such controls of the manner of access to the
building by tenant's social or business visitors as the Owner may deem necessary
for the security of the building and its occupants.

21. NO REPRESENTATIONS BY OWNER: Neither Owner nor Owner's agents have
made any representations or promises with respect to the physical condition of
the building, the land upon which it is erected or the demised premises, the
rents or the expenses of operation or nay other matter or thing affecting or
r______ to the premises except as herein expressly set forth and no rights,
easements or licenses are acquired by Tenant by implication or otherwise except
as expressly set forth in the provision of this lease. Tenant has inspected the
building and the demised premises and is thoroughly acquainted with their
condition and agrees to take the same "as is " and acknowledges that the taking
of possession of the demised premises by tenant shall be conclusive evidence
that the said premises and the building of which the same form a part were in
good and satisfactory condition at the time such possession was so taken, except
as to latent defects. All understandings and agreements heretofore made between
the parties hereto are merged in this contract, which alone fully and completely
expressed the agreement between Owner and Tenant and any executory agreement
hereafter made shall be ineffective to change, modify, discharge or effect an
abandonment of it in whole or in part, unless such executory agreement is in
writing and signed by the party against whom enforcement of the change,
modification, discharge or abandonment is sought.

22. END OF TERM: Upon the expiration or other termination of the term of
this lease, Tenant shall quit and surrender to Owner the demised premises, broom
clean, in good order and condition, ordinary wear and damages which Tenant is
not required to repair as provided elsewhere in this lease excepted, and Tenant
shall remove all its property. Tenant's obligation to observe or perform this
covenant shall survive the expiration or other termination of this lease. If
the last day of the term of this Lease or any renewal thereof, falls on Sunday,
this lease shall expire at noon on the preceding Saturday unless it be a legal
holiday in which case it shall expire at noon on the preceding business day.

23. QUIET ENJOYMENT. Owner covenants and agrees with Tenant that upon
Tenant paying the rent and additional rent and observing and performing all the
terms, covenants and conditions, on Tenant's part to be observed and performed,
Tenant may peaceably and quietly enjoy the premises hereby demised, subject,
nevertheless, to the terms and conditions of this lease including, but not
limited to, Article 31 hereof and to the ground leases, underlying leases

<PAGE>

and mortgages hereinbefore mentioned.

24. FAILURE TO GIVE POSSESSION: If Owner is unable to give possession of
the demised premises on the date of the commencement of the term hereof, because
of the holding-over or retention of possession of any tenant, undertenant or
occupants or if the demised premises are located in a building being
constructed, because such building has not been sufficiently completed to make
the premises ready for occupancy or because of the fact that a certificate of
occupancy has not been procedure or for any other reason, Owner shall not be
subject to any liability for failure to give possession on said date and the
validity of the lease shall not be impaired under such circumstances, nor shall
the same be construed in any wise to extend the term of this lease, but the rent
payable hereunder shall be abated (provided Tenant is not responsible for
Owner's inability to obtain possession) until after Owner shall have given
Tenant written notice that the premises are substantially ready for Tenant's
occupancy. If permission is given to Tenant to enter into the possession of the
demised premises or to occupy premises other than the demised premises prior to
the date specified as the commencement of the term of this lease. Tenant
covenants and agrees that such occupancy shall be deemed to be under all the
terms, covenants, conditions and provisions of this lease, except as to the
covenant to pay rent. The provisions of this article are intended to constitute
"an express provision to the contrary" within the meaning of Section 223-a of
the New York Real Property Law.

25. NO WAIVER: The failure of Owner to seek redress for violation of, or
to insist upon the strict performance of any covenant or condition of this lease
or of any of the Rules or Regulations, set forth or hereafter adopted by Owner,
shall not prevent a subsequent act which would have originally constituted a
violation from having all the force and effect of an original violation. The
receipt by Owner of rent with knowledge of the breach of any covenant of this
lease shall not be deemed a waiver of such breach and no provision of this lease
shall be deemed to have been waived by Owner unless such waiver be in writing
signed by Owner. No payment by Tenant or receipt by Owner of a lesser amount
than the monthly rent herein stipulated shall be deemed to be other than on
account of the earliest stipulated rent, nor shall any endorsement or statement
of any check or any letter accompanying any check or payment as rent be deemed
an accord and satisfaction, and Owner may accept such check or payment without
prejudice to Owner's agents during the term hereby demised shall be deemed an
acceptance of a surrender of said premises, and no agreement to accept such
surrender shall be valid unless in writing signed by Owner. No employee of
Owner or Owner's agent shall have any power to accept the keys of said premises
prior to the termination of the lease and the delivery of keys to any such agent
or employee shall not operate as a termination of the lease or a surrender of
the premises.

26. WAIVER OF TRIAL BY JURY: It is mutually agreed by and between Owner
and Tenant that the respective parties hereto shall and they hereby do waive
trial by jury in any action, proceeding or counterclaim brought by either of

<PAGE>

the parties hereto against the other (except for personal injury or property
damage) on any matters whatsoever arising out of or in any way connected with
this lease, the relationship of Owner and Tenant, Tenant's use of or occupancy
of said premises, and any emergency statutory or any other statutory remedy. It
is further mutually agreed that in the event Owner commences any summary
proceeding for possession of the premises, Tenant will not interpose any
counterclaim under Article 4.

27. INABILITY TO PERFORM: This Lease and the obligation of Tenant to pay
rent hereunder and perform all of the other covenants and agreements hereunder
on part of Tenant to be performed shall in no wise be affected, impaired or
excused because Owner is unable to fulfill any of its obligations under this
lease or to supply or is delayed in supplying any service expressly or impliedly
to be supplied or is unable to make, or is delayed in making any repair,
additions, alterations or decorations or is unable to supply or is delayed in
supplying any equipment or fixtures if Owner is prevented or delayed from so
doing by reason of strike or labor troubles or any cause whatsoever including,
but not limited to, government preemption in connection with a National
Emergency or by reason of any rule, order or regulation of any department or
subdivision thereof of any government agency or by reason of the conditions of
supply and demand which have been or are affected by war or other emergency.

28. BILLS AND NOTICES: Except as otherwise in this lease provided, a bill,
statement, notice or communication which Owner may desire or be required to give
to Tenant, shall be deemed sufficiently given or rendered if, in writing,
delivered to Tenant personally or sent by registered or certified mail addressed
to Tenant at the building of which the demised premises form a part or at the
last known residence address or business address of Tenant or left at any of the
aforesaid premises addressed to Tenant, and the time of the rendition of such
bill or statement and of the giving of such notice or communication shall be
deemed to be the time when the same is delivered to Tenant, mailed, or left at
the premises as herein provided. Any notice by Tenant to Owner must be served
by registered or certified mail addressed to Owner at the address first herein
above given or at such other address as Owner shall designate by written notice.

29. SERVICES PROVIDED BY OWNERS: As long as Tenant is not in default
under any of the covenants of this lease, Owner shall provide: (a) necessary
elevator facilities on business days from 8 a.m. to 6 p.m. and on Saturdays from
8 a.m. to 1 p.m. and have one elevator subject to call at all other times;
(b) heat to the demised premises when and as required by law, on business days
from 8 a.m. to 6 p.m. and on Saturdays from 8 a.m. to 1 p.m.; (c) water for
ordinary lavatory proposes, but if Tenant uses or consumes water for any other
purposes or in unusual quantities (of which fact Owner shall be the sole judge),
Owner may install a water meter at Tenant's expense which Tenant shall
thereafter maintain at Tenant's expense in good working order and repair to
register such waster consumption and Tenant shall pay for water consumed as
shown on said meter as additional rent as and when bills are rendered;
(d) cleaning service for the demised premises on

<PAGE>

business days at Owner's expense provided that the same are kept in order by
Tenant. If, however, said premises are to be kept clean by Tenant, it shall be
done at Tenant's sole expense, in a manner satisfactory to Owner an no one other
than persons approved by Owner shall be permitted to enter said premises or the
building of which they are a part for such purpose. Tenant shall pay Owner the
cost of removal of any of Tenant's refuse and rubbish from the building; (e) If
the demised premises are serviced by Owner's air conditioning/cooling and
ventilating system, air conditioning/cooling will be furnished to tenant from
May 15th through September 30th on business days (Mondays through Fridays,
holidays excepted) from 8:00 a.m. to 6:00 p.m., and ventilation will be
furnished on business days during the aforesaid hours except when air
conditioning/cooling is being furnished as aforesaid. If Tenant requires air
conditioning/cooling or ventilation for more extended hours or on Saturdays,
Sundays or on holidays, as defined under Owner's contract with Operating
Engineers Local 94-94A, Owner will furnish the same at Tenant's expense. RIDER
to be added in respect to rates and conditions for such additional service;
(f) Owner reserves the right to stop services of the heating, elevators,
plumbing, air-conditioning, power systems or cleaning or other services, if any,
when necessary by reason of accident or for repairs, alterations, replacements
or improvements necessary or desirable in the judgement of Owner for as long as
may be reasonably required by reason thereof. If the building of which the
demised premises are a part supplies manually-operated elevator service, Owner
at any time may substitute automatic-control elevator service and upon ten days'
written notice to Tenant, proceed with alterations necessary therefor without in
any wise affecting this lease or the obligation of Tenant hereunder. The same
shall be done with a minimum of inconvenience to Tenant and Owner shall pursue
the alteration with due diligence.

30. CAPTIONS: The Captions are inserted only as a matter of convenience
and for reference and in no way defined, limit or described the scope of this
lease nor the intent of any provisions thereof.

31. DEFINITIONS: The term "office", or "offices", wherever used in this
lease, shall not be construed to mean premises used as a store or stores, for
the sale or display, at any time, of goods, wares or merchandise, of any kind,
or as a restaurant, shop, booth, bootblack or other stand, barber shop, or for
other similar purposes or for manufacturing. The term "Owner" means a landlord
or lessor, and as used in this lease means only the owner, or the mortgagee in
possession, for the time being of the land and building (or the owner of a lease
of the building or of the land and building) of which the demised premises form
a part, so that in the event of any sale or sales of said land and building or
of said lease, or in the event of a lease of said building, or of the land, and
building, the said Owner shall be and hereby is entirely freed and relieved of
all covenants and obligations of Owner hereunder, and it shall be deemed and
construed without further agreement between the parties or their successors in
interest, or between the parties and the purchaser, at any such sale, or the
said lessee of the building, or of the land and building, that the purchaser or
the lessee of the building has assumed

<PAGE>

and agreed to carry out any and all covenants and obligations of Owner,
hereunder. The word's "re-enter" and "re-entry" as used in this lease are not
restricted to their technical legal meaning. The term "business days" as used
in this lease shall exclude Saturdays (except such portion thereof as is covered
by specific hours in Article 29 hereof), Sundays and all days observed by the
State or Federal Government as legal holidays and those designated as holidays
by the applicable building service union employees service contract or by the
applicable Operating Engineers contract with respect to HVAC service.

32. ADJACENT EXCAVATION--SHORING: If an excavation shall be made upon
land adjacent to the demised premises, or shall be authorized to be made, Tenant
shall afford to the person causing or authorized to cause such excavation,
license to enter upon the demised premises for the purpose of doing such work as
said person shall deem necessary to preserve the wall or the building of which
demised premises form a part from injury or damage and to support the same by
proper foundations without any claim for damages or indemnity against Owner, or
diminution or abatement of rent.

33. RULES AND REGULATIONS: Tenant and Tenant's servants, employees,
agents, visitors, and licenses shall observe faithfully, and comply strictly
with, the Rules and Regulations and such other and further reasonable Rules and
Regulations as Owner or Owner's agents may from time to time adopt. Notice of
any additional rules or regulations shall be given in such manner as Owner may
elect. In case Tenant disputes the reasonableness of any additional Rule or
Regulation hereafter made or adopted by Owner or Owner's agents, the parties
hereto agree to submit the question of the reasonableness of such Rule or
Regulation for decision to the New York office of the American Arbitration
Association, whose determination shall be final and conclusive upon the parties
hereto. The right to dispute the reasonableness of any additional Rule or
Regulation upon Tenant's part shall be deemed waived unless the same shall be
asserted by service of a notice, in writing upon Owner within ten (10) days
after the giving of notice thereof. Nothing in this lease contained shall be
construed to impose upon Owner any duty or obligation to enforce the Rules and
Regulations or terms, covenants or conditions in any other lease, as against any
other tenant and Owner shall not be liable to Tenant for violation of the same
by any other tenant, its servants, employees, agents, visitors or licensees.

34. SECURITY: Tenant has deposited with Owner the sum of $16,291.65 as
security for the faithful performance and observance by Tenant of the terms,
provisions and conditions of this lease; it is agreed that in the event Tenant
defaults in respect of any of the terms, provisions and conditions of this
lease, including, but not limited to, the payment of rent and additional rent,
Owner may use, apply or retain the whole or any part of the security so
deposited to the extent required for the payment of any rent and additional rent
or any other sum as to which Tenant is in default or for any sum which Owner may
expend or may be required to expend by reason of Tenant's default in respect of
any of the terms, covenants and conditions of this lease, including but not
limited to, any damages or deficiency in the re-letting of the premises, whether
such damages or

<PAGE>

deficiency accrued before or after summary proceedings or other re-entry by
Owner. In the event that Tenant shall fully and faithfully comply with all of
the terms, provisions, covenants and conditions of this lease, the security
shall be returned to Tenant after the date fixed as the end of the Lease and
after delivery of entire possession of the demised premises to Owner. In the
event of a sale of the land and building or leasing of the building, of which
the demised premises form a part, Owner shall have the right to transfer the
security to the vendee or lessee and Owner shall thereupon be released by Tenant
from all liability for the return of such security; and Tenant agrees to look to
the new Owner solely for the return of said security, and it is agreed that the
provisions hereof shall apply to every transfer or assignment made of the
security to a new Owner. Tenant further covenants that it will not assign or
encumber or attempt to assign or encumber the monies deposited herein as
security and that neither Owner nor its successors or assigns shall be bound by
any such assignment, encumbrance, attempted assignment or attempted encumbrance.

35. ESTOPPEL CERTIFICATE: Tenant, at any time, and from time to time, upon
at least 10 days' prior notice by Owner, shall execute, acknowledge and deliver
to Owner, and/or to any other person, firm or corporation specified by Owner, a
statement certifying that this Lease is unmodified and in full force and effect
(or, if there have been modifications), stating the dates to which the rent and
additional rent have been paid, and stating whether or not there exists any
default by Owner under this Lease, and, if so, specify each such default.

36. SUCCESSORS AND ASSIGNS: The covenants, conditions and agreements
contained in this lease shall bind and inure to the benefit of Owner and Tenant
and their respective heirs, distributes, executors, administrators, successors,
and except as otherwise provided in this lease, their assigns.

IN WITNESS WHEREOF, Owner and Tenant have respectively signed and sealed
this lease as of the day and year first above written.

<PAGE>

SILK & HALPERN REALTY ASSOCIATES,
INC.

Witness for Owner: By:

/s/ /s/
- ------------------------------- --------------------------------------

ALL ACCESS ENTERTAINMENT
MANAGEMENT, INC.

Witness for Tenant: By:

/s/ /s/
- ------------------------------- --------------------------------------<PAGE>

<PAGE>

ACKNOWLEDGEMENTS

CORPORATE OWNER )
STATE OF NEW YORK, : SS.:
COUNTY OF )

On this ______ day of ____________, 19____, before me personaly came
_________________________ to me known, who being by me duly sworn, did depose
and say that he resides in _________________________: that he is the
____________________ of ______________________________ the corporation described
in and which executed the foregoing instrument, as OWNER: that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and that he signed his name thereto by like order.

CORPORATE TENANT )
STATE OF NEW YORK, : SS.:
COUNTY OF )

On this ______ day of ____________, 19____, before me personaly came
_________________________ to me known, who being by me duly sworn, did depose
and say that he resides in _________________________: that he is the
____________________ of ______________________________ the corporation described
in and which executed the foregoing instrument, as TENANT: that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of
said corporation, and that he signed his name thereto by like order.

INDIVIDUAL OWNER )
STATE OF NEW YORK, : SS.:
COUNTY OF )

On this ______ day of ____________, 19___, before me personaly came
__________________________ to me known, and known to me be the individual
________________________ described in and who, OWNER, executed the foregoing
instrument and acknowledged to me that ______________________________ he
executed the same.

INDIVIDUAL TENANT )
STATE OF NEW YORK, : SS.:
COUNTY OF )

On this ______ day of ____________, 19___, before me personaly came
__________________________ to me known, and known to me be the individual
________________________ described in and who, TENANT, executed the foregoing
instrument and acknowledged to me that ______________________________ he
executed the same.

<PAGE>

FOR VALUE RECEIVED, and in consideration for and ?? inducement to Owner
making the within lease with Tenant, the undersigned guarantees to Owner,
Owner's successors as assigns the full performance and observance of all the
covenants, conditions and agreements, therein provided to be performed and
observed by Tenant, including the "Rules and Regulations" as therein provided,
without requiring any notice of non-payment, non-performance, or non-observance,
or proof, or demand, whereby to charge the undersigned therefor, all of which
the undersigned hereby expressly waives and ex-pressly agrees that the validity
of this agreement and the obligations of the guarantor hereunder shall in no
wise be terminated, affected or impaired by reason of the assertion by Owner
against Tenant of any of the rights or remedies reserved to Owner pursuant to
the provisions of the within lease. The undersigned further covenants and
agrees that this guaranty shall remain and continue in full force and effect as
to any renewal, modification or extension of this lease and during any period
when Tenant is occupying the premises as a "statutory tenant." As a further
inducement to Owner to make this lease and in consideration thereof, Owner and
the undersigned covenant and agree that in any action or proceeding brought by
either Owner or the undersigned against the other or any matters whatsoever
arising out of, under, or by virtue of the terms of this lease of this guarantee
that Owner and the undersigned shall and do hereby waive trial by jury.

Dated: 19
---------------------------- -----

--------------------------------------------
Guarantor

--------------------------------------------
Witness

--------------------------------------------
Guarantor's Residence

--------------------------------------------
Business Address

--------------------------------------------
Firm Name

<PAGE>

STATE OF NEW YORK, ) SS.:
COUNTY OF )

On this ______ day of ____________, 19___, before me personaly came
________________________ to me known, and known to me be the individual
described in and who executed the foregoing Guaranty and acknowledged to me that
he executed the same.

IMPORTANT - PLEASE READ

RULES AND REGULATIONS ATTACHED TO AND MADE A PART OF THIS LEASE IN ACCORDANCE
WITH ARTICLE 33.

1. The sidewalks, entrances, driveways, passages, courts, elevators,
vestibules, stairs, corridors or halls shall not be obstructed or encumbered by
any Tenant or used for any purpose other than for ingress or egress from the
demised premises and for delivery of merchandise and equipment in a prompt and
efficient manner using elevators and passageways designated for such delivery by
Owner. There shall not be used in any space, or in the public hall of the
building, either by any Tenant or by jobbers or others in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and sideguards. If said premises are situated on the ground floor of the
building, Tenant thereof shall further, at Tenant's expense, keep the sidewalk
and curb in front of said premises clean and free from ice, snow, dirt and
rubbish.

2. The water and wash closets and plumbing fixtures shall not be used for
any purposes other than those for which they were designed or constructed and no
sweepings, rubbish, rags, acids or other substances shall be deposited therein,
and the expense of any breakage, stoppage, or damage resulting from the
violation of this rule shall be borne by the Tenant who, or whose clerks,
agents, employees or visitors, shall have caused it.

3. No carpet, rug or other article shall be hung or shaken out of any
window of the building; and no Tenant shall sweep or throw or permit to be swept
or thrown from the demised premises any dirt or other substances into any of the
corridors or halls, elevators, or out of the doors or windows or stairways of
the building and Tenant shall not use, keep or permit to be used or kept any
foul or noxious gas or substance in the demised premises, or permit or suffer
the demised premises to be occupied or used in a manner offensive or
objectionable to Owner or other occupants of the building by reason of noise,
odors, and/or vibrations, or interfere in any way with other Tenants or those
having business therein, nor shall any animals or birds be kept in or about the
building. Smoking or carrying lighted cigars or cigarettes in the elevators of
the building is prohibited.

<PAGE>

4. No awnings or other projections shall be attached to the outside walls
of the building without the prior written consent of Owner.

5. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any Tenant on any part of the outside of the
demised premises or the building or on the inside of the demised premises is the
same is visible from the outside of the premises without the prior written
consent of Owner, except that the name of Tenant may appear on the entrance door
of the premises. In the event of the violation of the foregoing by any Tenant,
Owner may remove same without any liability, and may charge the expense incurred
by such removal to Tenant or Tenant's violating this rule. Interior signs on
doors and directory tablet shall be inscribed, painted or affixed for each
Tenant by Owner at the expense of such Tenant, and shall be of a size, color and
style acceptable to Owner.

6. No Tenant shall mark, paint, drill into, or in any way deface any part
of the demised premises or the building of which they form a part. No boring,
cutting or stringing of wires shall be permitted, except with the prior written
consent of Owner, and as Owner may direct. No Tenant shall lay linoleum, or
other similar floor covering, so that the same shall come in direct contact with
the floor of the demised premises, and, if linoleum or other similar floor
covering is described to be used an interlining of builder's deadening felt
shall be first affixed to the floor, by a paste or other material, soluble in
water, the use of cement or other similar adhesive material being expressly
prohibited.

7. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by any Tenant, nor shall any changes be made in existing
locks or mechanism thereof. Each Tenant must, upon the termination of this
Tenancy, restore to Owner all keys of stores, offices and toilet rooms, either
furnished to, or otherwise procured by, such Tenant, and in the event of the
loss of any keys, so furnished, such Tenant shall pay to Owner the cost thereof.

8. Freight, furniture, business equipment, merchandise and bulky matter
of any description shall be delivered to and removed from the premises only on
the freight elevators and through the service entrances and corridors, and only
during hours and in a manner approved by Owner. Owner reserves the right to
inspect all freight which violates any of these Rules and Regulations of the
lease or which these Rules and Regulations are a part.

9. Canvassing, soliciting and peddling in the building is prohibited and
each Tenant shall cooperate to prevent the same.

10. Owner reserves the right to exclude from the building between the hors
of 6 p.m. and 8 a.m. and at all hours on Sundays, and legal holidays all persons
who do not present a pass

<PAGE>

to the building signed by Owner. Owner will furnish passes to persons for whom
any Tenant requests same in writing. Each Tenant shall be responsible for all
persons for whom he requests such pass and shall be liable to Owner for all acts
of such persons.

11. Owner shall have the right to prohibit any advertising by any Tenant
which in Owner's opinion, tends to impair the reputation of the building or its
desirability as a building for offices, and upon written notice from Owner,
Tenant shall refrain from or discontinue such advertising.

12. Tenant shall not bring or permit to be brought or kept in or on the
demised premises, any inflammable, combustible or explosive fluid, material,
chemical or substance, or cause or permit any orders of cooking or other
processes, or any unusual or other objectionable odors to permeate in or emanate
from the demised premises.

13. If the building contains central air conditioning and ventilation,
Tenant agrees to keep all windows closed at all times and to abide by all rules
and regulations issued by the Owner with respect to such services. If Tenant
requires air conditioning or ventilation after the usual hours, Tenant shall
give notice in writing to the building superintendent prior to 3:00 p.m. in the
case of services required on week days, and prior to 3:00 p.m. on the day in the
case of after hours service required on weekends or on holidays.

14. Tenant shall not move any safe, heavy machinery, heavy equipment,
bulky matter, or fixtures into or out of the building without Owner's prior
written consent. If such safe, machinery, equipment, bulky matter or fixtures
requires special handling, all work in connection therewith shall comply with
the Administrative Code of the City of New York and all other laws and
regulations applicable thereto and shall be done during such hours as Owner may
designate.

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RIDER

Rent per Year

11/1/94-10/31/95 $39,100.00
11/1/95-10/31/96 $40,273.00
11/1/96-2/28/97 $41,481.19

Rent per Month

11/1/94-10/31/95 $3,258.33
11/1/95-10/31/96 $3,356.08
11/1/96-2/28/97 $3,456.77

TERM Two (2) years Four (4) Months
FROM November 1, 1994
TO February 27, 1997

<PAGE>

LEASE AGREEMENT

1. THIS LEASE AGREEMENT, entered into this 4th day of April, 1995,
by and between CUMMINS STATIONS, L.L.C., corporation with its principal office
and place of business in Nashville, Tennessee, hereinafter called "Landlord",
and PICTURE VISION, INC., hereinafter called "Tenant."

WITNESSETH:

2. That the Landlord, for and in consideration of the payments
hereinafter stipulated to be made by Tenant, and ted covenants and agreements
hereinafter contained to be kept and performed by Tenant, does by these presents
hereby lease unto the tenant, and Tenant does by these presents hereby lease
from landlord, for use and occupancy of Suite 425, containing approximately
2,050 square feet and being the leased premises as shown by design attached
hereto as Exhibit "A", and incorporated herein, and being a part of that
building known as Cummins Station, situated on 209 10th Avenue South in
Nashville, Tennessee, on a tract of land owned by Landlord more particular
described in a certain warranty deed of record in the office of The County
Recorder.

3. TO HAVE AND TO HOLD the same for the term of 5 years next ensuing
from and after the 1st day of September, 1996, and ending on the 31st day of
August, 2000, unless the term hereby demised shall be sooner terminated as
hereinafter provided.

4. Tenant shall pay to Landlord as rent at the office of Landlord in
Nashville, Tennessee, or as may be directed the sum of $15,375.00 (See para.
32nd) per annum for the original term hereof, except as noted hereinafter,
payable in installments of $1,281.25 (See para 32nd) per month for each and
every month during the original term hereof, the first such installment being on
the first day of the first calendar month of said term, and another such
installment being due and payable on the first day of each and every succeeding
calendar month of said term, in advance until the full payment of the total sum
shall be made. Lessee agrees to pay to lessor a late charge of five (5%)
percent of any rental not paid promptly on or before due date.

5. This lease is entered into upon the understanding and agreement
that the same shall be subject to the following express terms and conditions and
rules "Exhibit B" attached, each and every one of which the parties hereto
covenant and agree to keep and perform:

FIRST: That Tenant agrees to pay to Landlord the sums herein,
specified during the original an any renewal term hereof without demand, and
without counterclaim, deduction, or set-off, and to comply with the terms and
provisions of this lease.

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SECOND: That Tenant will use and occupy said premises for Video
Production and for no other purpose; that Tenant will keep said demised premises
in good repair and tenantable condition and shall quit and surrender said
premises peaceably at the end of the original or any renewal term hereof in as
good condition as the reasonable use thereof will permit; and that Tenant will
replace at his own expense any and all broken glass in and about said premises,
if due to Tenant's negligence, with glass of the same size and quality,
including all signs thereon. If Tenant fails to make proper repairs, Landlord,
at its option, may make such repairs at Tenant's expense.

THIRD: That no representations, except as are contained herein or
endorsed hereon, have been made to the Tenant respecting the condition of said
premises. The taking possession of the said premises by the Tenant shall be
conclusive evidence against the Tenant that premises were in good and
satisfactory condition when possession of the same was so taken; and the Tenant
will, at the termination of this lease, by lapse of time or otherwise, return
said premises to the Landlord in as good condition as when received, loss by
fire, storm or other casualty and ordinary wear excepted.

FOURTH: That the tenant will not assign this lease nor any interest
hereunder, and will not permit any assignment hereof by operation of law; and
will not sublet said premises or any part thereof; and will not permit the use
of said premises by desk tenants or any parties other than the Tenant, and the
agents and servants of the Tenant, without first obtaining the written consent
of the Landlord, which shall not be unreasonably withheld. Landlord may assign
his lease or any part thereof or right thereunder.

FIFTH: No alterations, additions or improvement to the leased
premises, except such as may be provided for in this lease, shall be made
without first having the consent, in writing, of the Landlord, and any
improvements, additions or alterations made by the Tenant after such consent
shall have been given, including any and all fixtures installed, excepting trade
fixtures, shall at Landlord's option remaining on the premises as the property
of the Landlord, without compensation to Tenant, or shall be removed therefrom
and the premises restored to their original condition at cost to Tenant, at the
expiration or sooner termination of this lease. The Tenant shall at his own
cost repair any damage caused by the removal of trade fixtures restoring the
premises to their original condition at his own expense. The Tenant agrees to
save Landlord harmless on account of claims for mechanics, materialmen, or other
liens in connection with any alterations, additions, or improvements to which
Landlord may give its consent in connection with the leased premises, and Tenant
will, if required by Landlord, furnish such waive or waivers of lien or bond in
form and with
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<PAGE>

surety satisfactory to landlord, as Landlord may required before starting any
work in connection with alterations, additions or improvements to the leased
premises.

SIXTH: That the Tenant will not use or permit upon said premises
anything that will invalidate any policies of insurance now or hereafter carried
on said building or that will increase the rate of insurance on said demised
premises or on the building of which said demised premises are a part; that the
Tenant will not use or permit upon said demised premises anything that may be
dangerous to life or limb; the Tenant will not in any manner deface or injure
said building or any part thereof, or overload the floors of said premises, it
being mutually agreed that in no event shall any weight placed upon said floors
exceed seventy-five pounds per square foot of floor space covered; that the
Tenant will not permit any objectionable noise or odor to escape or be emitted
from said premises in any way tending to create a nuisance, or tending to
disturb any other tenant in said building or the occupants of neighboring
property, or tending to injure the reputation of said building: the Tenant will
comply with all governmental, health and police requirements and regulations
respecting said premises.

SEVENTH: Landlord shall not be held responsible for and is hereby
expressly relived from all liability by reason of any injury, loss or damage to
any person or party in or about the leased premises, unless caused by negligence
of Landlord, whether the loss, injury or damage be to the person or property of
the Tenant or any other person. This provision shall apply especially (but not
exclusively) to damage caused by water, snow, frost, steam, sewage, illuminating
gas, sewer gas, or odors, or by the bursting or leaking of pipes or plumbing
works, and shall apply equally whether such damage be caused by the act or
neglect of other tenants, occupants, or janitors of said building or of any
other persons, and whether such damage be caused or occasioned by anything above
mentioned or referred to, or by any other thing or circumstance, whether of a
like nature, or of a wholly different nature. If any such damage shall be
caused by the acts of neglect of the Tenant, the Landlord may, at its option,
repair such damage, whether caused to the building or the tenants thereof, and
the Tenant shall thereupon reimburse the Landlord the total cost of such damage
both to the building and to the tenants thereof. The Tenant further agrees that
all personal property upon the demised premises shall be at risk of the Tenant
only and that the Landlord shall not be liable for any damage thereto or theft
thereof. Nor shall the Landlord be liable for the stoppage or interruption of
water, light, heat, air conditioning, janitor or elevator service, caused by
riot, strike, accident, or to make needful repairs, or by any cause over which
the Landlord has no control. Nor shall the Landlord be liable for any act or
neglect of the janitors or other employees not authorized by the Landlord. And
such failure, delay or default of the janitors or employees shall not be
construed or considered as an actual or constructive eviction of the Tenant nor

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shall it in any way operate to release the Tenant from the punctual performance
of each and all of the other covenants herein contained by the Tenant to be
performed.

EIGHTH: That if default shall at any time be made by said Tenant in
the payment of the rent hereby reserved, or any installment thereof, or if
default shall be made in any of the other covenants herein contained, to be
kept, observed and performed by the Tenant, or if the leasehold interest shall
be levied on under execution, or in the event of the insolvency or bankruptcy of
the Tenant, or the filing of any petition under the bankruptcy statute,
voluntarily or involuntarily and whether or not resulting in an adjudication in
bankruptcy, or in the event of a partial or general assignment for the benefit
of a creditors, then, an din any of said cases, the Landlord may, at its option,
at once, without notice to the Tenant, termination this lease; and upon the
termination of said lease at the option of the Landlord as aforesaid, or at the
expiration by lapse of time of the term hereby demised, the Tenant will at once
surrender possession of said premises to the Landlord, and remove all effects
therefrom, and if such possession be not immediately surrendered, the Landlord
may forthwith re-enter said premises and repossess itself thereof as of its
former estate and remove all persons and effects therefrom using such force as
may be necessary, without being deemed guilty of any manner of trespass or
forcible entry and detainer. And the Tenant expressly waives the service of any
notice of intention to terminate this lease or to reenter said premises, and
waives the service of any demand for payment of rent or for possessions, and
waives the service of any and every other notice or demand prescribed by any
statute or other law, and agrees that the simple breach of any of the said
covenants shall, of itself, without the service of any notice or demand
whatever, constitute a forcible detainer by the Tenant of said premises, within
the meaning of the statutes of the State of Tennessee. No receipt of monies by
the Landlord from the Tenant, after the termination in any way of this lease, or
after giving of any notice, shall reinstate, continue or extend the term of this
lease or affect any notice given to the Tenant prior to the receipt of such
money, it being agreed that after the service of notice of the commencement of a
suit, or after final judgment for possession of said premises, the Landlord may
receive and collect any rent due, and the payment of said rent shall not waive
or affect said notice, said suit or said judgment. IF the Tenant shall not
remove all effects from said premises as above agreed, the Landlord may, at its
option, remove the same in any manner that the Landlord shall choose and store
the same without liability to the Tenant for loss thereof, and the Tenant will
pay the Landlord, on request, any and all expense incurred in such removal and
also storage on said effects for any length of time during which the same shall
be in the Landlord's possession; or the Landlord may at its option, without
notice, sell the said effects or any of the same for such price as the Landlord
amy deem best and apply the proceeds of such sale upon any amounts due under

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<PAGE>

this lease from the Tenant to the Landlord, including the expenses of the
removal and sale.

NINTH: That in the event the Tenant shall vacate said premises or
abandon the same during the life of this lease, the Landlord may, at its option,
without terminating this lease, but the Landlord shall not be under any
obligation to do so, enter into said premises, remove the Tenant's signs
therefrom, and relet the same for the account of the Tenant, for such rent and
upon terms as shall be satisfactory to the Landlord, without such re-entry
working a forfeiture of the rents to be paid and the covenants to be performed
by the Tenant during the full term of this lease; and for the purpose of such
re-letting the Landlord is authorized to make any repairs, changes, alterations
or additions in or to said demised premises that may be necessary or convenient,
and if a sufficient sum shall not be realized monthly from such re-letting,
after paying all of the costs and expenses of such re-letting the collection of
the rent accruing therefrom each month to satisfy the monthly rent above
provided to be paid by the Tenant, then the Tenant will pay and satisfy such
deficiency each month upon demand therefor.

TENTH: Should the building upon the demised premises be totally
destroyed by fire or other cause, or so damaged that rebuilding or repairs
cannot be completed within one hundred and eighty (180) days from date of fire,
or other cause of damage, this lease shall terminate and the Tenant shall be
allowed an abatement of rent from the date of such damage or destruction.
However, if the damage is such that rebuilding or repairs can be completed
within 180 days, the Landlord covenants and agrees to make such repairs with
reasonable promptness and dispatch, and to allow Tenant an abatement in the rent
for such time as the building is untenantable, or proportionately for such
portion of the leased premises as shall be untenantable and the Tenant covenants
and agrees that the terms of this lease shall not otherwise be affected.

ELEVENTH: If the whole of the demised premises, shall be taken or
condemned by any competent authority for public or quasi public use or purpose,
then, and in that event, the term of this lease shall cease and terminate when
the possession of the demised premises so taken shall be required for such use
or purpose and without apportionment of the award. If any part, less than the
whole, of the demised premises shall be so taken or condemned, then, and in that
event, the Landlord shall have the option exercisable by notice in writing to
the Tenant with sixty (60) days from the notice to Landlord of the taking or
condemnation, to terminate this lease and in the event Landlord does not
exercise its option reserved herein to so terminate this lease, it shall
continue with reference to the portion of the demised premises not taken or
condemned unless the same is rendered untenable by such taking and condemnation
or cannot be made tenantable by repairs to

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<PAGE>

be conducted by Landlord at its expense. In either event, the entire award for
the taking an documentation of the premises shall belong to Landlord, and Tenant
shall have no interest therein; and in the event this lease continues with
reference to the portion of the demised premises not taken , the rental
specified hereunder shall be prorated and adjusted on a square footage basis.
In the event that this lease terminates by a taking or condemnation of the whole
of the demised premises or by the election on the part of Landlord as provided
herein, the current rental shall in either case be apportioned to the date of
termination of the lease.

TWELFTH: That if the Tenant shall move from said premises at any time
prior to the termination of this lease, the Landlord shall have the right to
enter upon said premises for the purpose of decorating the same or making
alterations or changes therein, without such entry in any manner affecting the
obligations of the Tenant hereunder.

THIRTEENTH: Landlord reserves the right to move Tenant to other space
in said building on thirty days' notice, Tenant to have the option within ten
days from the date of sid notice agree with Landlord upon new space. In case
Landlord and Tenant do not agree within said ten days upon terms of removal,
then this lease to become null and void and of no further effect, after thirty
days from the date of above notice, Landlord agrees to pay expenses of moving
Tenant to the new space agreed upon.

FOURTEENTH: The right of the Landlord to terminate this lease as
herein set forth is in addition to and not in exhaustion of such other rights
that the Landlord ash, or causes of action that may accrue to the Landlord
because of the Tenant's failure to fulfill, perform or observe the obligations,
agreements or covenants of this lease, and the exercise or pursuit by the
Landlord of any of the rights or causes of action accruing hereunder shall not
be an exhaustion of such other rights or causes of action that the Landlord
might otherwise have.

FIFTEENTH: No waiver of any condition expressed in this lease shall
be implied by any neglect of the Landlord to declare a forfeiture on account of
the violation of such condition if such violation be repeated or continued
subsequently and no express waiver shall affect any condition other than the one
specified in such waiver, and that one only for the time and in the manner
specifically stated.

SIXTEENTH: That the Tenant will pay all reasonable attorney's fees
and expenses the Landlord incurs in enforcing any of the obligations of the
Tenant under lease, or in any litigation or negotiation in which the Landlord
shall, without its fault, become involved through or on account of this lease.

SEVENTEENTH: A first lien is hereby expressly reserved

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by the Landlord and granted by the Tenant upon the terms of this lease and upon
all interest of the Tenant in this lease hold for the payment of rent and also
for the satisfaction of any cause of action which may accrue to the Landlord by
the provisions of this instrument. A first lien is also expressly reserved by
the Landlord and granted by the Tenant upon all personal property, fixtures,
improvements and all other fixtures erected or put in place or that may be
erected or put in place upon the premises by or through the Tenant or other
occupants for the payment of rent and also for the satisfaction of any causes of
action which may accrue to the Landlord by the provisions of this instrument.

EIGHTEENTH: That the tenant will pay to the Landlord, as liquidated
damages, double rent for all the time the Tenant shall retain possession of said
premises or any part thereof after the termination of this lease, whether by
lapse of time or otherwise; but the provisions of this clause shall not operate
as a waiver by the Landlord of any right of re-entry hereinbefore provided; nor
shall any waiver by the Landlord if its right to terminate this lease for breach
of covenant affect its right to terminate this lease for any later breach of the
same or another covenant.

NINETEENTH: It is understood and agreed that this lease does not
grant any rights to light and air over property, except public streets adjoining
the land on which said building is situated.

TWENTIETH: Tenant covenants to save and hold the Landlord harmless
from violations of the laws of the United States, of the State in which the
demised premises are located, and the ordinances and laws of the city in which
the demised premises are located.

TWENTY-FIRST: That in consideration of the execution of this lease by
the Landlord, the Tenant shall not use said premises for any purpose except that
which is above specified, and in particular will not expose nor offer for sale
on said premises, any alcoholic or other liquors, tobacco, drugs, flowers,
candies, confections, nor any other thing or things whether of a like or of a
wholly different nature, without the written consent of the Landlord, the right
being herein reserved to the Landlord to grant to any person, firm or
corporation the exclusive right and privilege to conduct any particular business
in said building, and such exclusive right and privilege so granted shall be
binding upon the Tenant hereunder the same as though specifically incorporated
in this lease.

TWENTY-SECOND: Tenant shall not install or connect any air
conditioning equipemnt, electric-driven motor or nay electrical, gas or water
appliance or equipment, without first submitting the same to Landlord and
securing its written consent. if such consent is obtained, Tenant shall each
month promptly pay

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the prevailing City or utility district which the demised premises are located,
rates for the gas, electricity and/or water used by the Tenant for the operation
of such appliances, in addition to the rent provided for in Section FIRST of
this lease. With respect to air conditioning or any other electrical, gas or
water appliance or equipment installed by or under Tenant, Landlord shall have
the right to require that the premises be restored to the condition existing
prior to the installation of said appliance, including the removal of any or all
ducts, wiring, piping, etc., and the repair and replacement of all damage caused
by such removal, or at Landlord' option, the right to retain all ducts, writing,
piping, etc., and the right to require the delivery of demised premises in the
condition as changed as the result of the installation of such ducts, wiring,
piping, etc., Unless parties agree to the contrary, nothing herein shall,
however, prevent Tenant from removing the air conditioning or other electrical
units installed by under Tenant, provided tenant is not then in default
hereunder.

TWENTY-THIRD: If Tenant shall fail to remove all effects from said
premises upon termination of this lease for any cause whatsoever, Landlord may
at its option remove the same in any manner that Landlord shall choose and store
said effects without liability to Landlord for loss thereof, and Tenant agrees
to pay Landlord on demand nay and all expenses incurred in such removal,
including court costs and attorney's fees and storage charge on such effects for
any length of time the same shall be in Landlord' possession, or Landlord may at
its option without notice sell said effects or any part of the same at private
sale and without legal proceeds for such price as Landlord may obtain and apply
the proceeds of such sale upon any amounts due under this lease from Tenant to
Landlord and upon the expense incident to the removal and sale of said effects.

TWENTY-FOURTH: Said Tenant shall give to said Landlord or its agent
promptly written notice of any accident to or defects in the water pipes, gas
pipes, air conditioning apparatus, to be remedied by sid Landlord with due
diligence from and after its receipt of any such notice.

TWENTY-FIFTH: This lease is subject and subordinate to all present
mortgages affecting the real estate and improvements thereon of which the
demised premises form a part, and to all renewals and extension thereof, and to
any mortgages which may hereafter be executed affecting the same.

TWENTY-SIXTH: It is agreed between the parties hereto that if the
rent stipulated herein at any time shall not be paid when due, then all
subsequent installments of rent, remaining unpaid, shall forthwith become due
and payable at the option of Landlord with notice to Tenant, and in case the
said Tenant declared bankrupt or voluntarily offers to creditors terms of
composition, or in case a receiver is appointed to take charge of

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and conduct the affairs of Tenant, such claim for further unpaid installments of
rent due under this lease shall be considered liquidated damages and shall
constitute a debt provable in bankruptcy or receivership.

TWENTY-SEVENTH: No act or thing done by Landlord or its agents during
the term hereby granted shall be deemed an acceptance of a surrender of said
premises, and no agreement to accept a surrender of said premises shall be valid
unless the same be made in writing and subscribed by Landlord. The provision in
this case of any particular remedy shall not preclude Landlord from any other
remedy Landlord might have, either in law or in equity, nor shall the waiver of
or redress for any violation of any covenant or condition in this lease
contained or any of the rules and regulations set forth herein in Exhibit "B" or
hereafter adopted by Landlord, prevent a subsequent act, which would have
originally constituted a violation, from having all the force and effect of an
original violation. In case it should be necessary or proper for Landlord to
bring any action under this lease or to consult or place said lease, for any
amount payable by Tenant thereunder, with an attorney concerning or for the
enforcement of any of Landlord's rights hereunder, then Tenant agrees in each
and any such case to pay to Landlord a reasonable attorney's fee. The receipt
by Landlord of rent with knowledge of the breach of any covenant in this lease
contained, shall not be deemed a waiver of such breach. The failure of Landlord
to enforce any of the rules and regulation set forth in Exhibit "B", or
hereafter adopted, against the Tenant and/or any other tenant in the building
shall not be deemed a waiver of such rules and regulations. The receipt by
Landlord of rent from any assignee, under-tenant or occupant of said premises
shall not be deemed a waiver of the covenant in this lease contained, against
assignment, and underletting or an acceptance of the assignee, undertenant or
occupant as Tenant, or a release of Tenant form the further observance or
performance by Tenant of the covenant in this lease contained, on the part of
the Tenant to be observed and performed. No provision of this lease shall be
deemed to have been waived by Landlord unless such waiver be in writing signed
by Landlord. In case of termination of this lease by Landlord under any option
herein provided for, Landlord may re-enter the premises without notice or
demand, an in that event rent shall become due and be apportioned and paid up to
and including the day of such entry.

TWENTY-EIGHTH: The parties hereto agree that if, through no fault of
Tenant, the demised premises shall not be ready for occupancy at the date upon
which the term hereby demised is to begin, the rent under this lease shall not
commence until the said demised premises are ready for occupancy; whereupon this
lease and all the covenants, conditions, and agreements herein contained shall
be given full force and effect, and the allowance of rent herein provided to be
paid by Tenant for such period prior to delivery of the demised premises to said
Tenant for occupancy,

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shall be in full settlement of all claims which Tenant might otherwise have by
reason of said demises premises not being ready for occupancy on the date of the
beginning of the term as set forth herein. The certificate of the architect or
company in charge of the construction of said building shall control
conclusively the date upon which the demised premises are ready for occupancy.
The parties also agree that for the purpose of completing or of making repairs
or alterations in any portion of said building, Landlord may use one or more of
the street entrances, the halls, passageways, and elevators of said building;
provided, however, that there shall be no unnecessary obstruction of the right
of entry to the demised premises while the same are occupied.

TWENTY-NINTH: [ELIMINATED]

THIRTIETH: The Landlord covenants that the Tenant upon paying the
rent and complying with the terms, covenants and conditions aforesaid shall and
may peaceably and quietly have, hold, and enjoy the leased premises for the term
aforesaid.

Further, the Landlord and tenant covenant with each other:

(a) That all rights and remedies of the Landlord under this lease
shall be cumulative, and none shall exclude any other rights and remedies
allowed by law.
(b) that the word "Landlord" and "Tenant" wherever used herein shall
be construed to mean Landlords and tenants in all cases where there is more than
one Landlord or Tenant, and the necessary grammatical changes required to make
the provisions hereof apply either to corporations or individuals, men or women,
shall in all cases be assumed as though in each case fully expressed.

(c) Tenant hereby waives and renounces any and all homestead
exemption rights he may have now, or hereafter, under or by virtue of the
constitution and laws of the State in which the demised premises are located, or
of any other state, or of the United States, as against the payment of said
rental or any portion thereof, or any other obligation or damages that may
accrue under the terms of this agreement.

(d) It is understood and agreed between the parties hereto that
notice from the Landlord mailed or delivered to the premises leased thereunder
shall constitute sufficient notice to the Tenant to comply with the terms of
this contract.

(e) It is further understood and agreed between the parties hereto
that any charges against the Tenant by the Landlord for supplies, services or
work done on the premises by order of the Tenant, or otherwise accruing under
this contract, shall be considered as rent due and shall be included in any lien
for rent

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due and unpaid.

(f) That all covenants, conditions, agreements and undertakings in
this lease shall extend to, and be binding on, the respective heirs, executors,
administrators, successors, and assigns of the respective parties hereto the
same as if they were in every case named.

(g) That this lease embodies the entire agreement of the parties
hereto and that the same may not be altered, changed, or amended except by an
instrument in writing executed by both parties.

(h) That this lease shall be interpreted in accordance with the laws
of the State of Tennessee. If any clause or provision hereof should be
determined to be illegal, invalid or unenforceable under present or future laws
effective during the term of this lease or any renewal term hereof, then and in
that event, it is the express intention of the parties hereto that the remainder
of this lease shall not be affected hereto, and it is also the express intention
of the parties hereto that in lieu of each clause of provision of this lease
which may be determined to be illegal, invalid or unenforceable, there may be
added as a part of this lease a clause of provision as similar in terms to such
illegal, invalid or unenforceable clause or provision as may be possible and be
legal, valid and enforceable.

THIRTY-FIRST: Periodical replacement of fluorescent tubes and bulbs
will be provided by Landlord, but the cost of such replacement tubes or bulbs
will be borne by Tenant.

THIRTY-SECOND: Rental rates are as follows:

9/1/95 - 8/31/97 $15,375.00/yr. or $1,281.25/mo.
9/1/97 - 8/31/2000 $17,425.00/yr. or $1,452.08/mo.

Addenda to Lease:

1. Tenant to pay utilities.

2. Tenant to pay any increases in taxes and insurance over the base
year prorated on a square foot basis.

3. Tenant to pay first and last months' rent in advance.

4. Landlord to provide Tenant build out not to exceed $10.00 per
square foot prorated over term of lease.

-11-

<PAGE>

5. Tenant has option to renew lease for an additional 5 years at the
then prevailing rates.

6. Tenant provided 5 parking permits (1 for Lot A and 4 for Lot B).

-12-

<PAGE>

IN WITNESS WHEREOF, the parties hereto have, on the day and year first
above written, executed this lease agreement in duplicate, on each to be
retained by each of the parties and each such copy to be considered as an
original for all purposes.

CUMMINS STATION, L.L.C.

ATTEST: By: /s/
--------------------------

- --------------------

PICTURE VISION, INC.

ATTEST: By: /s/
--------------------------

- --------------------

-13-

<PAGE>

EXHIBIT "B"

RULES AND REGULATIONS

Rule 1. No sign, picture, advertisement, or notice shall be displayed,
inscribed, painted or affixed, on any part of the outside or inside of said
building, or on or about the premises hereby demised, except on the glass of
the doors and windows of said premises an don the Director Board of the
building, and then only of such color, size, style and materials as shall be
first specified by the Landlord in writing on this lease. No "For Rent" signs
shall be displayed by the Tenant, and no showcases, or obstructions, signs,
flags, barber poles, statuary, or any advertising device of any kind whatever
shall be placed in front of said building or in the passageways, halls, lobbies,
or corridors thereof by the Tenant; and the Landlord reserves the right to
remove all such showcases, obstructions, signs, flags, barber poles, statuary or
advertising devices and all signs other than those provided for, without notice
to the Tenant and at his expense.

Rule 2. The Tenant shall not, without the Landlord's written consent, put
up or operate any steam engine, boiler, machinery or stove upon the premises, or
carry on any mechanical business thereon, or do any cooking thereon, or use or
allow to be used upon the demised premises, oil, burning fluids, camphene,
kerosene for heating, warming or lighting, or anything (except gas or
incandescent electric lights, and those only of such company or companies as may
be supplying the building) for illuminating said premises. No article deemed
extra hazardous on account of fire and no explosives shall be brought into said
premises.

Rule 3. No additional locks shall be placed upon any doors of the
premises. Upon the termination of the lease the Tenant shall surrender to the
Landlord all keys of the premises.

Rule 4. Safes, furniture, boxes or other bulky articles shall be carried
into the premises only with written consent of the Landlord first obtained, and
then only by means of the elevators, by the stairways, or through the windows of
said building as the Landlord amy in writing direct, and at such times an din
such manner and by such persons as the Landlord may direct. Safes and other
heavy articles shall be placed by the Tenant in such places only as may be first
specified in writing by the Landlord, and any damage done to the building or to
tenants or to other persons taking a safe or other heavy article in or out of
the demised premises, from overloading a floor, or in any other manner shall be
paid for by the Tenant causing such damage.

Rule 5. Elevator service and/or self-service elevator will be furnished by
the Landlord daily whenever said service shall, in the Landlord's judgment, be
required for the proper occupation and use

-14-

<PAGE>

of such premises.

Rule 6. Any person employed by the Tenant to do janitor work shall, while
in said building and outside of said demised premises, be subject to and under
the control and direction of the Superintendent of said building ((but not as
agent or servant of said Superintendent or of the Landlord).

The Landlord may retain a pass key to the premises and be allowed
admittance thereto at all times to enable its representatives to examine said
premises from time to time.

Rule 7. The Landlord and its agents shall have the right to enter the
demised premises at all reasonable hours for the purpose of examining or
exhibiting the same.

Rule 8. The Landlord, and its agents, shall have the right to enter the
demised premises at all reasonable hours for the purpose of making any repairs,
alterations, or additions which it or they shall deem necessary for the safety,
preservation or improvement of said premises of said building, and the Landlord
shall be allowed to take all material into and upon said premises that may be
required to make such repairs, improvements and additions, or any alterations
for the benefit of the Tenant without in any way being deemed or held guilty of
an eviction of the Tenant; and the rent reserved shall in no wise abate while
said repairs, alterations, or additions are being made; and the Tenant shall not
be entitled to maintain a set-off or counter-claim for damages against the
Landlord by reason of loss or interruption to the business of the Tenant because
of the prosecution of any such work. All such repairs, decorations,
alterations, additions, and improvements shall be done during ordinary business
hours.

Rule 9. If the Tenant desires telegraphic or telephonic connections, or
the installation of any other electrical writing, the Landlord will, upon
receiving a written request from the Tenant, direct the electricians as to where
and how the wires are to be introduced and run, and without such directions no
boring, cutting or installations of wires will be permitted.

Rule 10. The Tenant shall not allow anything to be placed against or near
the glass in the partitions, between the premises leased and the halls or
corridors of the building, which shall diminish the light in, or prove unsightly
from the halls or corridors.

Rule 11. No electric current, intended for light or power purposes, shall
be used by the Tenants, excepting that furnished or approved by the Landlord;
nor shall electric or other wires be brought into the premises, except upon the
written consent and approval of the Landlord.

-15-

<PAGE>

Rule 12. The Tenant, when closing his office for business at any time,
shall see that all windows are closed, thus avoiding possible damage from fire,
storm, rain or freezing.

Rule 13. The Tenant shall not allow anything to be placed on the outside
window ledges of the premises, nor shall anything be thrown by the Tenn,t or his
employees, out of the windows of the building; nor shall they undertake to
regulate the thermostats, if any, which control the heat or air conditioning.

Rule 14. The water and wash closets and other plumbing fixtures shall not
be used for any purposes other than those for which they were constructed, and
no sweepings, rubbish, rags, or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures shall be borne by the Tenant
who, or whose servants, employees, agents, visitors or licensees, shall have
caused the same.

Rule 15. No bicycle or other vehicle, and no animal shall be brought into
the offices, halls, corridors, elevators or nay other parts of said building, by
the Tenant, his agents or employees.

Rule 16. No person shall disturb the occupants of this or any adjoining
building premises by the use of any musical instruments, unseemly noises,
whistling, singing or in any other way.

Rule 17. The premises leased shall not be used for lodging or sleeping,
nor for any immoral or illegal purposes or for any purpose that will damage the
premises.

Rule 18. The entrances, corridors, passages, stairways and elevators shall
be under the exclusive control of the Landlord nd shall not be obstructed, or
used by the Tenant for any other purpose than ingress and egress to and from the
leased premises.

Rule 19. Canvassing, soliciting and peddling in the building is prohibited
and each Tenant shall co-operate to prevent the same.
Rule 20. All office or other equipment of any electrical or mechanical
nature shall be placed by Tenant in demised premises in approved settings to
absorb or prevent any vibration, noise or annoyance.

Rule 21. No water cooler, air conditioning unit or system or other
apparatus shall be installed or used by any Tenant without the written consent
of landlord.

Rule 22. There shall not be used in any space, or in the public halls of
said building, either by any tenant or by jobbers, or others, in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and side guards.

-16-

<PAGE>

Rule 23. The Landlord reserves the right to make such other and further
reasonable rules and regulations as in its judgment may from time to time be
needful for the safety, care and cleanliness of the premises, and for the
preservation for good order therein, and any such other or further rules or
regulations shall be binding upon the parties hereto with the same force and
effect as if they had been inserted herein at the time of the execution hereof.

<PAGE>

RAVE
- ----

September 24, 1996

This document confirms that Scott Schreer and John Loeffler, through their
companies, Not Just Jingles Inc. and John Leffler Music Inc., have a working
agreement to share equally the costs and rental expenses related to renting the
fifth floor of West 45th Street. The original lease was signed by both
corporate entities in December 1987, and the spirit of this joint responsibility
is still respected by both parties. This working agreement has been in place
since the original lease was renegotiated on July 1, 1992. This 2nd lease ran
from 7/1/92 to 5/31/97.

/s/
John Loeffler - Pres. John Leffler Music Inc.

/s/
Scott Schreer - Pres. Not Just Jingles Inc.

<PAGE>

SUBSIDIARIES

Paradise Music & Entertainment, Inc. has the following subsidiaries,
each of which is wholly-owned:

John Leffler Music, Inc. d/b/a Rave Music Group, Inc.
Picture Vision, Inc.
All Access Entertainment Management Group, Inc.

<PAGE>

CONSENT OF INDEPENDENT AUDITORS

We consent to the use in the Registration Statement of Paradise Music &
Entertainment, Inc. on Form SB-2 of our report dated September 12, 1996 except
for Note 8 as to which the date is October 9, 1996 on the financial statements
of Paradise Music & Entertainment, Inc. and to the reference to our firm under
the caption "Experts" in such Prospectus.

ROTHSTEIN, KASS & COMPANY, P.C.

Roseland, New Jersey
October 10, 1996

<PAGE>
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<PERIOD-END> JUN-30-1996
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