Letterhead of
                      Paradise Music & Entertainment, Inc.

September 28, 1998

Messrs. John Loeffler, Jon Small,
Brian Doyle and Richard Flynn
C/o Paradise Music & Entertainment, Inc.
53 West 23rd Street - 11th Floor
New York, NY 10010

Gentlemen:

This letter will memorialize our agreement with respect to the terms on which
amended and restated employment agreements (the "Agreements") for each of you
(the "Executives") will be prepared, negotiated and executed at the earliest
practicable opportunity.

1. Form of Agreement. Except as set forth below with respect to (i) the term of
the Agreements, (ii) certain provisions relating to compensation, and (iii)
certain provisions relating to non-competition, the form of Agreement will
reflect (without amendment, modification or supplementation) all of the
operative terms, benefits and conditions now contained in the employment
agreements covering the Executives as of the date hereof .

2. Term. The term of the Agreements (the "Term") will commence on the first
regularly scheduled pay period after the date on which such Agreements are
executed and expire on June 30, 2001. All parties agree to use their best
efforts to negotiate in good faith and to execute such Agreements as soon as
practicable after the date hereof.

3. Non-Compete.

            A. Non-compete. The non-competition section of the existing
      employment agreements will be amended in the new Agreements to provide
      that if any Executive leaves the employ of the Company voluntarily (other
      than for "Good Reason" as defined below), or is terminated for cause (but
      only for cause), that such Executive will (i) surrender for cancellation
      all securities of the Company owned by such Executive equal to the amount
      of stock that such Executive received pursuant to that certain Exchange
      Agreement dated as of October 9, 1996, (ii) forfeit all accrued, but
      unpaid, compensation through the date of such Executive's departure, and
      (iii) pay to the Company 25% of the gross client profit (defined as
      revenues minus cost of goods sold) for any Clients or Artists (as defined
      in the existing employment agreements) originated, or developed since
      October 9, 1996 by the Executive or the subsidiary employing Executive
      (the "Termination Payments"). Termination Payments will be paid to the
      Company on all gross client profit earned by the Executive or the
      subsidiary employing Executive for remainder of the Term. A list of
      Clients and Artists affected by the 25% gross client profit allocation
      will be provided to the Board and appended to each Employment Agreement.
      The terms, conditions and payments described in subsections (i) through
      (iii) above are hereafter referred to as the "Non-compete Consideration".
<PAGE>

Messrs. Loeffler, Small, Flynn and Doyle
Paradise Music & Entertainment, Inc.
September 28, 1998
Page 2


      The definition of cause contained in Section 7(b) of the existing
      employment agreements shall be amended and restated in its entirety to
      read as follows:

                  "(b) Commission of a willful or intentional act which has
            materially injured the reputation, business or business
            relationships of the Employer, including the violation of the terms
            of Sections 10 and 11 hereof, which is not cured within 30 days
            after Executive has received a written notice from the Company
            stating in reasonable detail the willful or intentional act(s) at
            issue and the nature of the injury or damage."

            B. Good Reason. For purposes of this Agreement, "Good Reason" shall
      mean (i) any breach of this Agreement by the Company, (ii) a material
      diminution of an Executive's responsibilities, loss of title or position
      with the Company or the subsidiary employing the Executive, or the failure
      to reelect the Executive to the Board of Directors of the Company, (iii) a
      material reduction in any Executive's base salary from that stated in this
      Agreement or other benefits as in effect at the time in question, or (iv)
      the failure by a successor to the Company to assume this Agreement.

4. Compensation.

            A. Base Salaries. The base salaries ("Base Salaries") for Messrs.
      Loeffler, Small, Doyle and Flynn will be $200,000 per annum, payable in
      accordance with the Company's existing payroll practices. In recognition
      of his performance for fiscal year 1998, Mr. Small's Base Salary will be
      $320,000 per annum for fiscal year 1999 and for so long as Mr. Small earns
      during any subsequent fiscal year of the Term an amount of Base Salary and
      compensation from his Tier 3 Bonus (as described below) in an amount
      greater than $320,000 per annum, Mr. Small shall be entitled to draw his
      compensation at the rate of $320,000 per annum. In the event that Picture
      Vision earns less than $320,000 (a "Picture Vision Shortfall")in Net
      Profit (as hereafter defined) in any fiscal year, then Mr. Small's Base
      Salary for the next fiscal year shall be reduced (but not below $200,000
      per annum) by the amount of such Picture Vision Shortfall. The President
      and CEO of the Company shall be entitled to receive a fee of $25,000 per
      annum, payable in accordance with the Company's existing payroll practices
      in addition to Base Salary or the compensation from any Bonus.

            B. Tier 1, Tier 2 and Tier 3 Bonuses. For purposes hereof, the term
      "Net Profit" shall mean pretax income as determined by the Company's
      auditors in accordance with generally accepted accounting principles
      consistently applied ("GAAP") (without any chargeback of corporate
      overhead but after accounting for the payment of the Base Salary actually
      received by such Executive in such year. A Tier 1 Net Profit threshold
      will be established for each Executive as follows:

      Name:                Tier 1 Net Profit Threshold:

      John Loeffler        $200,000 in Net Profit from Rave.

      Jon Small            $0 from Picture Vision for any fiscal year that Mr. 
                           Small's Base Salary is $320,000, otherwise up to 
                           $200,000 in Net Profits from Picture Vision.

      Brian Doyle          An aggregate of $400,000 in Net Profits from the 
      and Richard Flynn    operations of All Access Entertainment, Inc. ("All 
                           Access") and PUSH Records, Inc. ("PUSH").

      For purposes hereof, the losses of one subsidiary, if any, will not be
      offset against the Net Profits generated by the other subsidiary other
      than as set forth in subsection D below.
<PAGE>

Messrs. Loeffler, Small, Flynn and Doyle
Paradise Music & Entertainment, Inc.
September 28, 1998
Page 3


                  (i) An Executive will be entitled to receive (the "Tier 1
            Bonus") 50% of each dollar of Net Profit earned by the operating
            subsidiary that pays his Base Salary up to the Net Profit Threshold.

                  (ii) Messrs. Loeffler, Doyle and Flynn will be entitled to
            receive (the "Tier 2 Bonus") equal to 15% of each dollar of Net
            Profit earned by the operating subsidiary that pays his Base Salary
            above the Net Profit Threshold. Mr. Small shall have no Tier 2 Bonus
            for so long as his Base Salary is $320,000. In such event, the first
            $200,000 in Net Profit shall be allocated 100% to the Company until
            the Company has earned $200,000 and thereafter (the "Tier 3 Bonus"),
            Net Profit from Picture Vision shall be allocated 75% to the Company
            and 25% to Mr. Small. In the event that Mr. Small's Base Salary has
            been reduced by any Picture Vision Shortfall, then the next $X in
            Net Profit (where "X" equals the Picture Vision Shortfall for the
            previous year) shall be allocated to Mr. Small (in lieu of a Tier 2
            Bonus) such that Mr. Small shall have received compensation in such
            year up to $320,000, then the next $200,000 in Net Profits shall be
            allocated to the Company. Thereafter, Net Profits shall be allocated
            75% to the Company and 25% to Mr. Small.

            C. Messrs. Doyle and Flynn shall prepare (prior to the execution of
      the Agreements) a realistic projection of the anticipated results of
      operations for PUSH for fiscal year 1998 (the "PUSH Budget"). The PUSH
      Budget shall be reviewed and approved by the Board of Directors of the
      Company. If PUSH amends the PUSH Budget to produce, license, market or
      distribute records which are not reflected on the PUSH Budget as approved
      (as was the case with the signing of Blessid Union of Souls in fiscal year
      1998), such amendments must be approved by the Board of Directors and the
      results of operations projected in such amended budget shall be deemed the
      new PUSH Budget. Prior to June 1 of each fiscal year, PUSH shall prepare a
      PUSH Budget for the next fiscal year which budget shall be submitted to
      the Board for its approval. Once approved by the Board, such PUSH Budget
      will establish the operating budget, subject to amendment as provided
      above, for the ensuing fiscal year.

            D. Net Profit for each operating subsidiary shall be computed on a
      quarterly basis prior to the date on which the Company files its
      consolidated results of operation with the SEC for the period covered. To
      the extent that the results of operations for a subsidiary indicate that
      they have earned Net Profit, then a Tier 1 Bonus (but not a Tier 2 or Tier
      3 Bonus) shall be paid to the appropriate Executive on such Net Profit.
      The maximum Tier 1 Bonus that will be paid for any quarter is 25% of the
      maximum Tier 1 Bonus that an Executive could earn over the course of a
      full year. If the results of operation for such quarter indicate that the
      operating subsidiary has an operating loss, then such loss shall be
      carried forward (as would any earned but unpaid Tier 1 Bonus amounts from
      the previous quarter) and aggregated into the results for the next
      succeeding quarter; provided, however, that any cumulative losses for any
      fiscal year up to $200,000 shall not be carried forward into the next
      succeeding fiscal year. Losses in excess of $200,000 for any operating
      subsidiary (and, in the case of PUSH, $200,000 worse than the PUSH Budget,
      as amended, for the year at issue) ("Excess Losses"), shall be carried
      forward into the next fiscal year and these losses must be recouped before
      any Tier 1, Tier 2 and Tier 3 Bonuses are paid to the Executive affiliated
      with such operating subsidiary. In the case of PUSH and All Access
      Entertainment Management Group, Inc. ("All Access"), Excess Losses for
      either PUSH or All Access shall offset, on a dollar-for-dollar basis, Net
      Profit from the other entity before any Bonus is paid to either Messrs.
      Flynn and Doyle.

            E. Tier 2 and Tier 3 Bonuses shall only be paid on Net Profit earned
      above the Tier 1 Net Bonus Threshold on a subsidiary's operating results
      for any fiscal year after such results have been (i) audited by the
      Company's auditors and (ii) reported to the SEC on Form 10-K or any
      successor form.

            F. It is understood and agreed that Tier 1 and Tier 2 Bonuses earned
      on the results of operations for PUSH and/or All Access can be allocated
      to Messrs. Flynn and Doyle 50%/50% or in such other manner as mutually
      determined in their sole discretion.
<PAGE>

Messrs. Loeffler, Small, Flynn and Doyle
Paradise Music & Entertainment, Inc.
September 28, 1998
Page 4


            G. Tier 1, Tier 2 and Tier 3 Bonuses earned for any fiscal year can
      be taken in cash or stock, at the option of the Executive, and paid
      currently, or paid into the Company's deferred compensation plan to be
      established prior to the Offering. If paid into the deferred compensation
      plan in cash, the trustee of the plan will invest them in the same manner
      as if they were pension funds contributions (e.g., in mutual funds, etc.).
      If paid into the deferred compensation plan in the form of stock, the
      Company will promptly issue to the plan for the benefit of the
      contributing Executive an amount of stock equal to (i) the amount of the
      deferred bonus contributed by the Executive, (ii) divided by the market
      price of the Company's common stock (as determined under the plan). For
      the first $30,000 contributed in stock, the Company shall contribute an
      additional $30,000 in stock.

            H. If a subsidiary earns over $500,000 in Net Profit in any year
      (after deducting Tier 1, Tier 2 and Tier 3 Bonuses paid), the Executive
      will earn one restricted share of stock for each $5.00 in Net Profit over
      the $500,000 threshold up to an aggregate of 25,000 shares.

            I. In addition to participation in all of the above-described plans,
      after PUSH has recouped (i) all cumulative losses for such subsidiary (as
      determined as of June 30th of each previous fiscal year , plus (ii) a
      cumulative 20% annualized return on such investment, plus (iii) the cost
      (as computed by the Company's auditors in accordance with GAAP) associated
      with the distribution of the Bonus Shares (as defined), the Messrs. Doyle
      and Flynn will be awarded 291,000 shares (the "Bonus Shares"). Such Bonus
      Shares can be (i) earned on a pro rata basis as cumulative Net Profit is
      earned by the label and (ii) allocated as determined by Messrs. Flynn and
      Doyle. If the Bonus Shares are taken as deferred compensation, they will
      not be matched by the Company.

5. Prior Advances; 144 Stock Sales. In exchange for the Non-compete
Consideration, any amounts deemed advances relating to the existing employment
agreements in place for fiscal year 1998 are forgiven. The proceeds from Mr.
Loeffler's Rule 144 stock sales will be applied towards repayment of $63,000 of
the currently outstanding $129,000 loan which has previously been advanced to
Mr. Loeffler by the Company. The proceeds from the sale of stock pursuant to SEC
Rule 144 for Messrs. Small, Flynn, and Doyle are to be converted into stock at
the rate of $2 7/8ths per share.

6. Client Accounts and Funds. "Client Funds", which shall be defined herein to
mean monies advanced by a third party to any subsidiary of the Company for use
by that subsidiary in connection with the production of a particular project,
shall not be available to or used by the Company for any other purpose
whatsoever including, without limitation, for capital expenditures unrelated to
such production or as collateral for any pledge or security interest granted by
the Company, it being understood that, at all times the subsidiary in receipt of
such Client Funds shall have the sole right to deposit and maintain such Client
Funds within a bank account or accounts maintained and managed by such
subsidiary and the Company shall have no right to access any such account(s).
Should the Company violate the terms and conditions of the preceding sentence
and attempt, in any way, to access or utilize such Client Funds for any purpose,
the parties hereto agree that such attempt shall subject the applicable
subsidiary to irreparable injury, for which money damages are insufficient as a
remedy, and, therefore, in addition to such legal remedies to which the
subsidiary and its principal(s) may be entitled, the subsidiary and its
principal(s) shall be entitled to enjoin the Company from accessing or utilizing
such Client Funds in any manner. Notwithstanding the foregoing, the Company
shall have the right to require each subsidiary to remit to the Company only
those amounts from available cash flow (after payment of production
expenditures, SG&A and a reasonable reserve) which constitute net profits of
such subsidiary not previously distributed. The Company agrees to cause its
Board of Directors to adopt a proper resolution approving the terms and
conditions of this provision and to take all other corporate action necessary to
ensure that this provision is enforceable, including without limitation, making
any required amendments to the Company's Certificate of Incorporation and
Bylaws. This provision is the essence of this Agreement and shall survive the
termination this Agreement for any reason.
<PAGE>

Messrs. Loeffler, Small, Flynn and Doyle
Paradise Music & Entertainment, Inc.
September 28, 1998
Page 5


7. Termination of This Agreement. In the event that the Company has not obtained
a firm commitment for a bridge financing in an amount equal to or greater than
$600,000 and closed on at least the first advance under such financing on or
before October 30, 1998 (and such date has not been extended in writing by all
of the parties hereto), then this letter agreement and the terms and conditions
set forth herein, including, without limitation, Section 3 hereof, shall
immediately terminate and be deemed of no force and effect.

8. Miscellaneous. This letter may be amended, modified, superseded, canceled,
renewed or extended, and the terms and conditions hereof may be waived, only by
a written instrument signed by each of the parties hereto, or in the case of a
waiver, signed by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies that any party may otherwise have at law or in equity. This letter
shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to principles of conflicts of law. All of the
parties hereto, for themselves and their respective officers and directors
individually, jointly and severally, hereby consent to the jurisdiction of the
courts in and for the State of New York with respect to any disputes or other
matters arising over this letter and the transactions contemplated hereby. This
letter is not assignable except by operation of law or as specifically set forth
herein. All pronouns and any variations thereof refer to the masculine, feminine
or neuter, singular or plural, as the identity of the person or persons may
required. This letter may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

<PAGE>

Messrs. Loeffler, Small, Flynn and Doyle
Paradise Music & Entertainment, Inc.
September 28, 1998
Page 6


If the above is satisfactory to you and adequately reflects our understanding,
please acknowledge by executing in the space below provided.

PARADISE MUSIC & ENTERTAINMENT, INC.


By: /s/ John Loeffler
    --------------------------
    John Loeffler, Chairman


/s/ John Loeffler                                /s/ Jon Small
-----------------------------                    -----------------------------
    John Loeffler, an Executive                      Jon Small, an Executive


/s/ Brian Doyle                                  /s/ Richard Flynn
-----------------------------                    -----------------------------
    Brian Doyle, an Executive                        Richard Flynn, an Executive


ACKNOWLEDGED AND ACCEPTED BY:


/s/ Thomas Edelman                               /s/ P. Thomas Cohen
-----------------------------                    -----------------------------
    Thomas Edelman, Director                         P. Thomas Cohen, Director