Promissory Note of Paradise Music & Entertainment


                                 PROMISSORY NOTE

23,960.25                                                 Dated:  August 7, 1998

      SECTION 1. General.

      1.1 PARADISE MUSIC & ENTERTAINMENT, INC., having an address at 53 West
23rd Street, New York, New York 10010 (referred to as the "Maker"), for value
received, hereby promises to pay on or before the first anniversary of this
Promissory Note (the "Maturity Date"), PAUL THOMAS COHEN, (hereinafter referred
to as the "Holder" or "Payee"), or order, the principal amount of the
outstanding balance of this Promissory Note together with interest on the unpaid
balance of the principal amount hereof from time to time outstanding at the rate
per annum of 10.00% on the Maturity Date. Such interest shall accrue from the
date hereof until the obligation of the Maker with respect to this Promissory
Note shall be fully discharged, and be paid quarterly, in arrears. Interest
hereon shall be computed on the basis of a 365-day year. All payments of
principal and interest on this Promissory Note shall be in such coin or currency
of the United States of America as at the time of payment shall be legal tender
for payment of public and private debts.

      1.2 The Maker shall have the right at any time to prepay the whole (or at
any time and from time to time to prepay any part) of the unpaid principal
amount of this Promissory Note, without premium or penalty; provided, however,
that interest on the principal amount hereof to be so prepaid accrued to the
date of such prepayment shall be paid concurrently therewith.

      SECTION 2. Conversion.

      The holder of this Promissory Note may, at any time and from time to time,
upon written notice, convert the unpaid principal amount of this Promissory Note
together with all interest accrued thereon into shares of the Company's Common
Stock at the price per share of $2 7/8ths per share, which price represents the
fair market value of said restricted securities at the time that this Promissory
Note has been made, executed and delivered. If the Company shall at any time by
subdivision, combination or reclassification of securities or otherwise, change
any of the securities into which this Promissory Note is convertible into a
different number, the conversion price shall be adjusted accordingly. In the
event that the Company merges with or into another corporation, the conversion
price immediately prior to the merger shall remain unchanged and this Promissory
Note shall be convertible into shares of Common Stock of the surviving
corporation based upon the conversion price.

      SECTION 3. Non-Negotiability of Promissory Note.

      This Promissory Note shall not be transferred, assigned, conveyed or
negotiated by the holder. The Maker may deem and treat the holder of this
Promissory Note as the absolute owner of this Promissory Note for the purpose of
receiving payment hereon or on account hereof and for all other purposes, and
the Maker shall not be affected by any notice to the contrary.

      SECTION 4. Events of Default and Remedies.

      4.1 The entire principal amount of this Promissory Note together with all
accrued interest hereon, at the option of the holder hereof exercised by written
notice to the Maker at its address then in effect or as set forth herein, shall
forthwith become and be due and payable if any one or more of the following
events (herein called "Events of Default") shall have occurred (for any reason
whatsoever and 


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                               Promissory Note of Paradise Music & Entertainment


whether such happening shall be voluntary or involuntary or come about or be
effected by operational law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administration or governmental body) and be continuing at the time of such
notice, that is to say:

            (a) if default shall be made in the due and punctual payment of the
principal or interest of this Promissory Note when and as the same shall become
due and payable (the "Default Amount"), whether on the Maturity Date, by
acceleration or otherwise, and such default shall have continued for a period of
fifteen (15) days. During any period in which the Maker is in default pursuant
to this subsection (a), additional interest shall accrue at the penalty rate of
one and one-half percent per (1 1/2%) month on such Default Amount;

            (b) if the Maker shall: (i) admit in writing its inability to pay
its debts generally as they become due; (ii) file a petition in bankruptcy or a
petition to take advantage of any insolvency act; (iii) make an assignment for
the benefit of creditors; (iv) consent to the appointment of a receiver of
itself or of the whole or any substantial part of its property; (v) have a
petition in bankruptcy filed against it, be adjudicated a bankrupt; or (vi) file
a petition or answer seeking reorganization or arrangement under the Federal
bankruptcy laws or any other applicable lay or statute of the Unites States of
America or any State, district or territory thereof;

            (c) if a court of competent jurisdiction shall enter, except at the
direct or indirect request of the holder of this Promissory Note, an order,
judgment, or decree appointing, without the consent of the Maker, a receiver of
the Maker of the whole or any substantial part of its property, or approving a
petition filed against it seeking reorganization or arrangement of the Maker
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any State, district or territory thereof, and such
order, judgment or decree shall not vacated or set aside or stayed within
seventy-five (75) days from the date of entry thereof; or

            (d) if, under the provisions of any other law for the relief or aid
of debtors, any court of competent jurisdiction shall assume custody or control
of the Maker's assets or of the whole or any substantial part of its property
and such custody or control shall not be terminated or stayed within
seventy-five (75) days from the date of assumption of such custody or control.

      4.2 In the case any one or more of the Events of Default specified is
Section 5.1 hereof shall have occurred and be continuing, the holder of this
Promissory Note may proceed to protect and enforce its rights either by suit in
equity and/or by action at law, whether for the specific performance of any
covenant or agreement contained in this Promissory Note, or the holder of this
Promissory Note may proceed to enforce the payment of all sums due upon this
Promissory Note or to enforce any other legal or equitable right of the holder
of this Promissory Note.

      4.3 No remedy herein conferred upon the holder is intended to be exclusive
of any other remedy and each and every such remedy shall be cumulative and shall
be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or otherwise.


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                               Promissory Note of Paradise Music & Entertainment


      4.4 No course of dealing between the Maker and the holder or any delay on
the part of the holder hereof in exercising any rights hereunder shall operate
as a waiver of any rights of the holder hereof.

      SECTION 5. Section Headings.

      The Section headings contained herein are for the purpose of convenience
of reference only and are not intended to define or limit the contents of any
such Section.

      SECTION 6. Severability.

      In the event that one or more of the provisions of this Promissory Note
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Promissory Note, but his Promissory Note shall
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.

      SECTION 7. Governing Law.

      This Promissory Note shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed entirely within such State. The Maker and Payee hereby consent to the
jurisdiction of the Federal and State Courts in and for the State of New York.

PARADISE MUSIC & ENTERTAINMENT, INC.


By  /s/ John Loeffler
    --------------------------------
    John Loeffler, President & CEO


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