<PAGE>


                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Employment
Agreement"), made as of January 15, 2000, between SFX ENTERTAINMENT, INC., a
Delaware corporation (the "Employer"), and MICHAEL G. FERREL (the "Executive").

         WHEREAS, the Executive is currently employed by the Employer, pursuant
to an Employment Agreement, dated as of May 28, 1998, between the Executive and
the Employer (the "Original Employment Agreement"); and

         WHEREAS, the Board of Directors of the Employer (the "Board") has
determined that it is in the best interests of the Employer to enter into a new
employment agreement with the Executive which shall amend and restate in its
entirety the Original Employment Agreement, in order to be assured of the
Executive's continued services as a member of senior management of the Employer
upon the terms and provisions and subject to the conditions hereinafter set
forth; and

         WHEREAS, in order to retain the services of the Executive, the Employer
has agreed to issue to the Executive options to purchase shares of stock of the
Employer and, pursuant to such agreement, on the review and recommendation of
the Compensation Committee (the "Compensation Committee") of the Board, the
Employer has granted to the Executive options to purchase a total of 400,000
shares of Class A Common Stock, par value $.0l per share, of the Employer (the
"Class A Stock"), having a term of five (5) years, of which 250,000 options are
exercisable at an exercise price of $3.67 per share and 150,000 options are
exercisable at an exercise price of $16.08 per share (collectively, the "January
2000 Options"), which options fully vest on the date of this Employment
Agreement, and to simultaneously forgive and renounce all Company rights
connected with any loans made to the Executive prior to the effective date of
this agreement; and

         WHEREAS, the Compensation Committee and the Board approved the terms
and conditions of this Employment Agreement;

         NOW, THEREFORE, for good and valuable consideration, the sufficiency
and receipt of which are hereby acknowledged, the Employer and the Executive
agree as follows:

         1.       Employment. Upon the terms and subject to the conditions of
this Employment Agreement, the Employer hereby employs the Executive and the
Executive hereby accepts employment by the Employer.

         2.       Term.

         2.1      The term of the Executive's employment hereunder shall
commence as of the date hereof and continue until the fifth anniversary thereof,
unless terminated earlier in accordance with the provisions of this Employment
Agreement; provided, however, that this Employment Agreement shall automatically
be renewed for additional one-year periods thereafter unless and until
terminated by the Employer or the Executive as of the end of such five-year
initial period or


<PAGE>

at the end of any renewal period by written notice given at least 30 days prior
to the scheduled termination or scheduled renewal of this Employment Agreement.
The date of the commencement of employment pursuant to this Employment Agreement
is hereinafter referred to as the "Effective Date," the term of employment
pursuant to this Employment Agreement is hereinafter referred to as the "Term"
and the last date of employment pursuant to this Employment Agreement is
hereinafter referred to as the "Termination Date."

         3.       Executive's Position, Duties, and Authority.

         3.1      The Employer shall employ the Executive, and the Executive
shall serve, as President, Chief Executive Officer and as a Member of the Office
of the Chairman of the Employer and of any successor by merger, acquisition of
substantially all of the assets of the Employer or otherwise.

         3.2      The Executive shall have executive duties, functions,
authority and responsibilities commensurate with the office or offices he from
time to time holds with the Employer.

         3.3      The Executive shall serve without additional remuneration as
(a) a member of any committee of the Board, as determined by the Board; and (b)
a director and/or officer of one or more of the Employer's subsidiaries, if
appointed to such position by the Employer.

         4.       Duties.

         4.1      Full-time Services. The Executive shall devote substantially
all of his business time to the business and affairs of the Employer and to the
fulfillment of his duties hereunder in a diligent and competent fashion to the
best of his abilities; provided, however, that the Executive may engage in other
activities such as charitable, educational, religious and similar types of
activities, to the extent that such activities do not prohibit or prevent the
performance of the Executive's duties under this Employment Agreement, or
inhibit or conflict in any material way with the business of the Employer.

         4.2      Business Opportunities. The Executive covenants and agrees
that for so long as he is actively employed by the Employer he shall inform the
Employer of each business opportunity related to the business of the Employer of
which he becomes aware, and that he will not, directly or indirectly, exploit
any such opportunity for his own account nor will he render any services to any
other person or business or acquire any interest of any type in any other
business, which is in competition with the Employer; provided, however, that the
foregoing shall not be deemed to prohibit the Executive from acquiring, solely
as an investment (a) up to 10% of any securities of a partnership, trust,
corporation or other entity so long as he remains a passive invest or in such
entity and such entity is not, directly or indirectly, in competition with the
Employer, or (b) up to 0.5% of any securities of any publicly traded
partnership, trust, corporation or other entity provided he remains a passive
investor in such entity.



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<PAGE>

         5.       Location of Employment. Unless the Executive consents
otherwise in writing, the headquarters for performance of his services hereunder
shall be the principal offices of the Employer in New York, New York, or at such
other location within 25 miles of the residence of the Executive as the
Executive shall approve of.

         6.       Base Salary. During the Term, the Employer shall pay or cause
to be paid to the Executive an initial base salary per annum (the "Base Salary")
which shall initially be $525,000, payable in monthly installments. Upon each
anniversary of the commencement of the Executive's employment hereunder, the
Base Salary then in effect shall be increased by an amount equal to the greater
of (a) five percent of the Base Salary then in effect or (b) the product of (i)
the Base Salary then in effect and (ii) the percentage increase in the Consumer
Price Index during the previous twelve full calendar months. In addition, the
Board shall review the Executive's Base Salary at least annually and may by
action of the Board, after and pursuant to the affirmative recommendation of the
Compensation Committee, increase, but not decrease, such Base Salary, as such
salary may have been increased, at any time and from time to time during the
Term.

         7.       Bonus; Option Grant.

         7.1      The Executive shall be entitled to receive an annual incentive
bonus (the "Bonus") consisting of (a) a guaranteed cash bonus of $300,000 per
annum (the "Cash Bonus), payable on each anniversary of this Employment
Agreement, plus (b) an additional discretionary bonus payable in cash, stock,
options or other compensation, during the continuance of the Executive's
employment hereunder as determined by the Board, after and pursuant to the
affirmative recommendation of the Compensation Committee.

         7.2      The Employer hereby confirms the grant to the Executive of the
January 2000 Options, to be evidenced by option grant documentation to be
entered into by the Employer and the Executive.

         8.       Expenses. The Employer shall pay or reimburse the Executive
for all reasonable expenses actually incurred or paid by the Executive during
the Term of employment in the performance of the Executive's services hereunder
upon presentation of expense statements or vouchers or such other supporting
information as the Employer may reasonably require of the Executive.

         9.       Benefits. During the Term, the Executive shall be eligible to
participate in any pension or profit-sharing plan or program of the Employer now
existing or established hereafter, in accordance with and to the extent that he
is eligible under the general provisions thereof. The Executive shall also be
eligible to participate in any group life insurance, hospitalization, medical,
health and accident, disability or similar plan or program of the Employer, now
existing or established hereafter, in accordance with and to the extent that he
is eligible under the general provisions thereof.

         10.      Existing Life Insurance. The Employer shall have the right to
obtain life insurance on the life of Executive and to be the beneficiary of such
policy. The Executive shall cooperate in assisting the Employer to obtain such
insurance. The Employer shall continue to pay



                                       3
<PAGE>

all premiums on such policies and shall maintain such policies, subject to the
insurability of the Executive, if required to keep such policies in effect
during the Term.

         11.      Indemnification. The Executive shall be entitled in connection
with his employment hereunder and in connection with his services as a director
of the Employer to the benefit of the indemnification provisions contained on
the date hereof in the bylaws and certificate of incorporation of the Employer,
as the same may hereafter be amended (not including any amendments or additions
that limit or narrow, but including any that add to or broaden, the protection
afforded to the Executive), to the fullest extent permitted by applicable law.
The Employer shall in addition cause the Executive to be indemnified in
accordance with Section 145 of the Delaware General Corporation Law to the
fullest extent permitted by said Section, in Executive's capacity as an officer
and a director, to the extent required to make the Executive whole in connection
with any loss, costs or expense indemnifiable thereunder. The indemnification
obligations of the Employer hereunder shall survive from the date hereof until
three (3) months after the expiration of the applicable statute of limitations
with respect to any claim made against the Executive for which the Executive
seeks indemnification (the "Survival Period") and shall survive thereafter with
respect to any indemnification claim as to which the Employer has received
notice on or prior to the end of the Survival Period. The Employer shall prepay
in full, and maintain in full force and effect during the Survival Period for
the benefit of the Executive, on an "occurrence" basis, the Employer's current
directors and officers errors and omissions insurance policy, or a similar
insurance policy providing equivalent coverage from a financially reputable
carrier, in form and substance reasonably acceptable to the Executive.

         12.      Confidential Information.

         The Executive acknowledges that his employment by the Employer has
brought and will bring him into close contact with confidential proprietary
information of the Employer, including information regarding costs, profits,
markets, sales, products, key personnel, pricing policies, operational methods,
technical processes, other business affairs and methods, plans for future
developments, and other information not readily available to the public, the
disclosure of which to third parties would in each case have a material adverse
effect on the Employer's business operations (the "Confidential Information").
In recognition of the foregoing, the Executive covenants and agrees that:

         (a) he will keep secret all Confidential Information and will not
intentionally disclose Confidential Information to anyone outside of the
Employer and its representatives other than in the course of performance of his
duties hereunder, either during or for a one year period after the Term except
with the Employer's written consent, provided that (i) the Executive shall have
no such obligation to the extent Confidential Information is or becomes publicly
known other than as a result of the Executive's breach of his obligations
hereunder and (ii) the Executive may, after giving prior notice to the Employer
to the extent practicable under the circumstances, disclose such matters to the
extent required by applicable laws or governmental regulations or judicial or
regulatory process; and

         (b) he will, at the Executive's option, either (i) deliver promptly to
the Employer on termination of his employment by the Employer or at any other
time the Employer may so request, and at the Employer's request, all memoranda,
notes, records, reports and other



                                       4
<PAGE>

documents (and all copies thereof) relating to the Employer's business, which he
obtained while employed by, or otherwise serving or acting on behalf of, the
Employer and which he may then possess or have under his control (the
"Records"); or (ii) in lieu of subclause (i) above, the Executive shall destroy
all of the Records and shall deliver to the Employer a certificate to that
effect.

         13.      Termination.

         13.1     For purposes of this Employment Agreement the following
definitions shall apply:

         13.1.1   "Cause" shall mean:

         (a) the Executive is convicted of a felony involving moral turpitude
which would render the Executive unable to perform his duties set forth in this
Employment Agreement; or

         (b) the Executive engages in conduct that constitutes willful gross
neglect or willful gross misconduct in carrying out his duties under this
Employment Agreement, resulting, in either case, in material economic harm to
the Employer, unless the Executive believed in good faith that such act or
nonact was in the best interests of the Employer.

         13.1.2   A "Change in Control" shall mean the occurrence of any one of
the following events:

         (a) any "person," as such term is used in Sections 3(a)(9) and 13(d) of
the Securities Exchange Act of 1934, as amended (other than the Executive or
members of management on the date hereof or otherwise appointed by the Board
which is comprised of a majority of "incumbent directors" or entities controlled
by them), becomes a "beneficial owner," as such term is used in Rule 13d-3
promulgated under that Act, of 25% or more of the voting power of the Employer;

         (b) all or substantially all of the assets or business of the Employer
is disposed of pursuant to a merger, consolidation or other transaction (unless
the shareholders of the Employer immediately prior to such merger, consolidation
or other transaction beneficially own, directly or indirectly, in substantially
the same proportion as they owned the voting power of the Employer, all of the
voting power or other ownership interests of the entity or entities, if any,
that succeed to the business of the Employer);

         (c) the Employer combines with another company and is the surviving
corporation but, immediately after the combination, the shareholders of the
Employer immediately prior to the combination hold, directly or indirectly, 50%
or less of the voting power of the combined company; or

         (d) the majority of the Board consists of individuals other than
"incumbent directors," which term means members of the Board as of the date of
this Employment Agreement, except that any person who becomes a director
subsequent to such date whose election or nomination was supported by two-thirds
of the directors who then comprise the incumbent directors shall be considered
an incumbent director.



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<PAGE>

         13.1.3   "Constructive Termination Without Cause" shall mean a
termination of the Executive's employment at his initiative as provided in this
Section 13 following the occurrence, without the Executive's written consent, of
one or more of the following events:

         (a) a reduction in the Executive's then current Base Salary or failure
by the Employer to fulfill its obligations under Sections 6, 7, 8 or 9 above;

         (b) the failure to elect or reelect the Executive to any of the
positions described in Section 3 hereof or the removal of him from any such
position;

         (c) a material diminution in the Executive's duties or the assignment
to the Executive of duties which are materially inconsistent with his duties or
which materially impair the Executive's ability to function as the President,
Chief Executive Officer and Member of the Office of the Chairman of the
Employer; or

         (d) the failure of the Employer to obtain the assumption in writing of
its obligation to perform this Employment Agreement by any successor to all or
substantially all of the assets of the Employer within 15 days after a merger,
consolidation, sale or similar transaction.

         13.2     Termination by the Employer for Cause.

         A termination for Cause shall not take effect unless all of the
provisions of this Section 13.2 are complied with. The Executive shall be given
written notice by the Board of the intention to terminate him for Cause, such
notice (a) to state in detail the particular act or acts or failure or failures
to act that constitute the grounds on which the proposed termination for Cause
is based and (b) to be given within three months of the Board learning of such
act or acts or failure or failures to act. The Executive shall have 10 business
days after the date that such written notice has been given to the Executive in
which to cure such conduct, to the extent such cure is possible. If he fails to
cure such conduct, the Executive shall then be entitled to a hearing before the
Board. Such hearing shall be held within 15 business days of such notice to the
Executive, provided he requests such hearing within 10 business days of the
written notice from the Board of the intention to terminate him for Cause. If,
within five business days following such hearing, the Executive is furnished
written notice by the Board confirming that, in its judgment, grounds for Cause
on the basis of the original notice exist, he shall thereupon be terminated for
Cause.

         13.2.1   In the event the Employer terminates the Executive's
employment for Cause, he shall be entitled to:

         (a) the Base Salary through the date the of termination of his
employment for Cause; and

         (b) a Bonus for the year in which he was terminated equal to the Bonus
for the year prior to such termination, prorated over the time elapsed during
the year in which he was terminated.



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<PAGE>

         13.2.2   In the event the Employer terminates the Executive's
employment for Cause, the Executive shall have no further obligations or
liability to the Employer (except his obligations under Sections 12 and 16,
which shall survive).

         13.3     Termination Without Cause or Constructive Termination Without
Cause. In the event the Executive's employment is terminated without Cause,
other than due to disability or death, or in the event there is a Constructive
Termination Without Cause, the Executive shall be entitled to:

         (a) the Base Salary through the date of termination of the Executive's
employment;

         (b) the Base Salary, at the annualized rate in effect on the date of
termination of the Executive's employment (or in the event a reduction in Base
Salary is the basis for a Constructive Termination Without Cause, then the Base
Salary in effect immediately prior to such reduction), for a period of 36 months
following such termination or until the end of the Term, whichever is longer;
provided that, at the Executive's option, the Employer shall pay him the present
value of such salary continuation payments in a lump sum within thirty (30) days
of the effective date of such termination (using as the discount rate 75% of the
prime rate (as published by The Wall Street Journal) for the first business day
of the month in which such termination occurs);

         (c) a Bonus for the unexpired Term not less than the $300,000.00
guaranteed cash bonus provided in Section 7.1(a) multiplied by all of the
year(s) and month(s) remaining in the then unexpired Term; provided that, at the
Executive's option, the Employer shall pay him the present value of such salary
and bonuses in a lump sum within thirty (30) days of the effective date of such
termination (using as the discount rate 75% of the prime rate (as published by
The Wall Street Journal) for the first business day of the month in which such
termination occurs); and

         (d) all benefits provided in Section 9 hereof until the end of the
Term, with no additional cost or charge payable by the Executive.

         13.4     Additional Rights Following a Change in Control. In the event
of a Change in Control, the Executive shall be entitled to act with respect to
this Employment Agreement as provided in section 13.5, and to all payments and
benefits provided in section 13.3, provided that such payments, together with
the additional consideration described in this section, shall be paid in a lump
sum and without any discount or reduction, or in the case of non-monetary
consideration, delivered to the Executive before or contemporaneously with the
consummation of the Change in Control. In addition, all previously granted but
unvested options to purchase Company stock immediately shall vest fully in the
Executive and remain exercisable for the full period of the initial option grant
or ten years, whichever is greater. In addition: (a) any application of Section
13.1.3(d) of this Employment Agreement by the Employer or the Company shall be
suspended from the Employer's or the Company's entry into any agreement
contemplating a Change in Control, and deemed stricken from this Employment
Agreement and rescinded upon the consummation of any Change in Control; and (b)
Section 16 of this Employment Agreement immediately, and without additional
action, shall be deemed and rendered null, void, and without any effect as
against the Executive upon the consummation of the Change in Control. The
Executive shall forfeit any rights granted pursuant to this Section



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13.4 if the Executive, in his sole and absolute discretion and without any
obligation whatsoever to do so, determines that he will accept a written offer
to remain with the surviving company in an executive position with equivalent
duties, authority and responsibility as the Executive currently holds (other
than as a non-employee director).

         13.4.1   Payment Following a Change in Control. In the event that the
termination of the Executive's employment is as a result of a Change in Control
and the aggregate of all payments or benefits made or provided to the Executive
under this Employment Agreement and under all other plans and programs of the
Employer (the "Aggregate Payment") is determined to constitute a Parachute
Payment, as such term is defined in Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended (the "Internal Revenue Code"), the Employer shall pay
to the Executive, prior to the time any excise tax imposed by Section 4999 of
the Internal Revenue Code ("Excise Tax") is payable with respect to such
Aggregate Payment, an additional amount which, after the imposition of all
income and excise taxes thereon, is equal to 120% of the Excise Tax on the
Aggregate Payment The determination of whether the Aggregate Payment constitutes
a Parachute Payment and, if so, the amount to be paid to the Executive and the
time of payment pursuant to this subsection shall be made by an independent
auditor (the "Auditor") jointly selected by the Employer and the Executive and
paid by the Employer. The Auditor shall be a nationally recognized United States
public accounting firm which has not, during the two years preceding the date of
its selection, acted in any way on behalf of the Employer or any affiliate
thereof. If the Executive and the Employer cannot agree on the firm to serve as
the Auditor, then the Executive and the Employer shall each select one
accounting firm and those two firms shall jointly select the accounting firm to
serve as the Auditor.

         13.5     Voluntary Termination. In the event of a termination of
employment by the Executive on his own initiative other than (i) a termination
due to death or disability; (ii) a Constructive Termination without Cause; or
(iii) a Change in Control (which event may be represented to third parties, at
the Executive's sole option as a voluntary separation mutually agreed to between
and among the Employer, the Company, and the Executive), the Executive shall
have the same entitlements as provided in Section 13.2 above for a termination
for Cause. A voluntary termination under this Section 13.5 (i), (ii), or (iii)
shall be effective upon reasonable prior written notice to the Employer, need
not be provided in the event of termination due to death or the consummation of
a Change in Control, and in no event shall the occurrence of any event
contemplated by Section 13.5 (i), (ii), or (iii) be deemed as the Executive's
breach of this Employment Agreement.

         13.6     Stock Options. Notwithstanding anything to the contrary, upon
termination for any reason whatsoever, the Executive shall have the immediate
right to exercise any stock options in full, whether or not such option is fully
exercisable on the date of termination, for the remainder of the original term
of each such stock option.

         13.7     No Mitigation; No Offset. In the event of any termination of
employment under this Employment Agreement, the Executive shall be under no
obligation to seek other employment and there shall be no offset against amounts
due the Executive under this Employment Agreement on account of any remuneration
attributable to any subsequent employment that he may obtain.



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<PAGE>

         13.8     Option Adjustment. The number of options issuable pursuant to
this Section 13 and the per share exercise price thereof shall be subject to
appropriate adjustment to give effect to any increase or decrease in the number
of issued shares resulting from a reorganization, recapitalization, stock split,
spin-off or other similar action.

         14.      Disability.

         14.1     If during his active employment hereunder the Executive shall
become physically or mentally disabled, whether totally or partially, so that he
is prevented from performing his usual duties for a period of six consecutive
months, the Employer shall, nevertheless, pay the Executive his full Base Salary
and Bonus in respect of the period ending on the last day of the sixth
consecutive month of disability (such last day being referred to herein as the
"Disability Date") and the following additional provisions shall apply:

         14.2     If the Executive has not resumed his usual duties on or prior
to the Disability Date, the Executive's employment shall terminate and the
Employer shall pay, unless prior to the date the Executive became physically or
mentally disabled a notice of termination was delivered to the Executive, 75% of
his Base Salary from the Disability Date through the end of the Term (without
giving effect to any early termination provisions contained in this Employment
Agreement) and, except as provided in Section 14.4, the Employer shall have no
obligation to pay Bonus to the Executive in respect of periods after the
Disability Date. Any Base Salary payable pursuant to this Section 14.2 shall be
reduced by the amount of any benefits payable to the Executive under any group
or individual disability insurance plan or policy, the premiums for which are
paid primarily by the Employer;

         14.3     Unless the Employer exercises its option under Section 14.4 to
restore the Executive to his full compensation, duties, functions, authority and
responsibilities hereunder, the Executive shall have no obligations or
liabilities hereunder from and after the Disability Date (except for his
obligations under Sections 12 and 16, which shall survive); and

         14.4     If during the Term and subsequent to a Disability Date, the
Executive shall recover fully from a disability, the Employer, by action of the
Board, shall have the right (exercisable within sixty days after notice from the
Executive of such recovery), but not the obligation, to restore the Executive to
employment and to full compensation and his full level of duties, functions,
authority and responsibilities hereunder.

         15.      Death of Executive.

         15.1     Upon the Executive's death, whether prior to or subsequent to
his Disability Date and prior to the delivery of a notice of termination, this
Employment Agreement and all of the Employer's obligations to pay salary and
Bonus hereunder shall terminate except as provided in Sections 15.2 through
15.4.

         15.2     The Executive's estate or designated beneficiary shall be
entitled to receive (a) any unpaid portions of the Executive's Base Salary in
respect of the period ending on the Executive's date of death, (b) unpaid Bonus
in respect of years prior to the year of death, and (c) immediately vested
options to purchase 50,000 shares of Class A Stock at an exercise price equal to
the exercise price of the last stock option granted by the Employer to the
Executive prior to the



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<PAGE>

Executive's death. In addition, the Employer shall pay to such estate or
beneficiary an amount equal to the present value of all the remaining Base
Salary, calculated assuming annual compound interest at 75% of the prime rate
(as published in The Wall Street Journal) for the first business day of the
month in which the Executive's death occurs.

         15.3     The Base Salary and Bonus payable pursuant to this Section 15
shall be reduced by the value of any benefits payable to the Executive's estate
or designated beneficiary under any life insurance plan or policy the premiums
for which are paid primarily by the Employer, other than such insurance
identified in Section 10.

         16.      Non-competition.

         16.1     During the Term, the Executive will not, without the prior
written approval of the Board, become employed by, or become an officer,
director, or general partner of, any partnership, corporation or other entity
which acts as a producer or venue operator in the live entertainment business or
which acts as a marketing and management company specializing in the
representation of team sports athletes (the "Prohibited Business").

         16.2     Subject to the following proviso, for a period of one year
following the termination of the Executive's employment hereunder, the Executive
will not become employed by, or become an officer, director or general partner
of, any partnership, corporation or other entity which is primarily engaged in
the Prohibited Business; provided however, that during such one year period the
Employer shall employ the Executive as a consultant with compensation at a rate
equal to fifty percent of the Employer's Base Salary immediately prior to such
termination. If the Employer elects not to employ the Executive as a consultant
for such one year period as provided herein, the provisions of this Section 16.2
shall not apply and the Executive shall be free to engage in any activity
referred to herein

         17.      Notices. All notices, requests, consents and other
communications, required or permitted to be given hereunder, shall be in writing
and shall be deemed to have been duly given if delivered personally or sent by
prepaid telegram, or mailed first class, postage prepaid, by registered or
certified mail, as follows (or to such other or additional address as either
party shall designate by notice in writing to the other in accordance herewith):

         17.1     If to the Employer:

         SFX Entertainment, Inc.
         650 Madison Avenue, 16th Floor
         New York, New York 10022
         Attention:  Board of Directors

         17.2     If to the Executive:

         Michael G. Ferrel
         525 East 72nd Street, Apt. 19A
         New York, New York 10021



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<PAGE>

         17.3     Copies of all communications given hereunder shall also be
delivered or sent, in like fashion, to Winston & Strawn (attention: Jonathan
Goldstein, Esq.) at 200 Park Avenue, New York, New York 10166.

         18.      General.

         18.1     Governing Law. This Employment Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York.

         18.2     Captions. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Employment Agreement

         18.3     Entire Agreement. This Employment Agreement including any
Exhibits attached hereto, sets forth the entire agreement and understanding of
the parties relating to the subject matter hereof, and supersedes all prior
and/or contemporaneous agreements, arrangements and understandings, written or
oral, between the parties with respect to such subject matter (including,
without limitation, the Original Employment Agreement), except as specifically
provided herein.

         18.4     Successors and Assigns. This Employment Agreement, and the
Executive's rights and obligations hereunder, may not be assigned by the
Executive, except that the Executive may designate pursuant to Section 18.6 one
or more beneficiaries to receive any amounts that would otherwise be payable
hereunder to the Executive's estate. This Employment Agreement shall be binding
on any successor to the Employer, whether by merger, acquisition of
substantially all of the Employer's assets or otherwise, as fully as if such
successor were a signatory hereto and the Employer shall cause such successor
to, and such successor shall, expressly assume the Employer's obligations
hereunder. Notwithstanding anything else herein contained, the term "Employer",
as used in this Employment Agreement, shall include all such successors.

         18.5     Amendments; Waivers. This Employment Agreement cannot be
changed, modified or amended, and no provision or requirement hereof may be
waived, without an affirmative vote of the Board after the affirmative
recommendation of the Compensation Committee of the Board, and the consent in
writing of the Executive and the Employer. The failure of a party at any time or
times to require performance of any provision hereof shall in no manner affect
the right of such party at a later time to enforce the same. No waiver by a
party of the breach of any term or covenant contained in this Employment
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Employment Agreement.

         18.6     Beneficiaries. Whenever this Employment Agreement provides for
any payment to the Executive's estate, such payment may be made instead to such
beneficiary or beneficiaries as the Executive may have designated in a writing
filed with the Employer. The Executive shall have the right to revoke any such
designation and to redesignate a beneficiary or beneficiaries by written notice
to the Employer (and to any applicable insurance company) to such effect.



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<PAGE>

         IN WITNESS WHEREOF, the parties have duly executed this Employment
Agreement as of the date first above written.

                                      SFX ENTERTAINMENT, INC.

                                      By: /s/ Robert F.X. Sillerman
                                         --------------------------------------
                                      Name:
                                      Title:


                                      /s/ Michael G. Ferrel
                                      -----------------------------------------
                                      MICHAEL G. FERREL




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