AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of the 15th day of
August,   1996,  by  and  between  Alliance   Entertainment  Corp.,  a  Delaware
corporation  having its principal office at 110 East 59th Street,  New York, New
York  10022 (the  "Company"),  and Joseph J.  Bianco,  residing  at 23 West 12th
Street, New York, New York 10012 (the "Executive").


                       R E C I T A L S:


          WHEREAS,  the Company considers it essential and in the best interests
of its  stockholders  to more closely align the interests of the Executive  with
those of its shareholders and that the Executive support the mission, values and
strategy of the Company and desires to retain the services of the Executive; and

          WHEREAS,  the  Executive  desires  to accept  such  employment  by the
Company, upon the terms and conditions hereinafter set forth.

          NOW,   THEREFORE,   in  consideration  of  the  mutual  covenants  and
agreements set forth herein, the parties agree as follows:

          1.  Employment and Duties.  The Company agrees to employ the Executive
as  Co-Chairman  of the Company and the Executive  accepts such  employment  and
agrees to perform  all  duties  and  services  consistent  with the  Executive's
position.  As  Co-Chairman,  the Executive  shall be the second highest  ranking
officer of the Company.  The Executive agrees to devote substantially all of the
Executive's  business  time,  attention  and energy to perform  the  Executive's
duties and services hereunder.

          2. Term of Employment.  The term of the Executive's  employment  under
this  Agreement  shall  commence  on March  15,  1995 and shall end on the fifth
anniversary  of such date,  unless  sooner  terminated  as provided in Section 5
hereof (the "Employment Period"); provided, however, that commencing on


<PAGE>



March 15, 2000, and each March 15 thereafter,  the term of this Agreement  shall
automatically  be renewed for one (1) additional  year unless,  not earlier than
210 days nor later  than 180 days prior to such date,  either  party  shall have
provided  written  notice  that such party  elects not to renew the term of this
Agreement.

            3.    Compensation and Benefits.

                  3.1 Base Salary.  For the year commencing  March 15, 1996, the
Company  shall pay the  Executive  a base salary of Five  Hundred  Seventy-Eight
Thousand ($578,000) Dollars per annum ("Base Salary").  The Base Salary for each
year  after  the  first  year  may be  increased  from  time to time in the sole
discretion  of the Board and in any event will be increased  annually to reflect
corresponding  increases in the United  States  Department  of Labor,  Bureau of
Labor Statistics,  Consumer Price Index, All Urban Consumers, United States City
Average,  all items  (1982-88  = 100).  Base  Salary  shall be  payable  at such
intervals as salaries are paid by the Company to its other executive employees.

                  3.2 Bonus.  In addition to Base  Salary,  with respect to each
fiscal year during the  Employment  Period,  the Executive  shall be entitled to
participate  in,  and be  eligible  for  annual  bonuses  under,  the  Company's
Executive  Incentive  Plan or other annual bonus  program which shall be no less
favorable to the Executive  than the Executive  Incentive  Plan.  Any such bonus
amount  (a  "Bonus")  shall  be  payable  at  such  time  as  executive  bonuses
customarily  are paid by the  Company,  but in no event later than 30 days after
the end of the Company's  fiscal year. The Executive's  target Bonus shall be an
amount equal to sixty percent (60%) of Base Salary and the  Executive's  maximum
Bonus  shall  be equal to  ninety  percent  (90%)  of Base  Salary,  subject  to
satisfaction of applicable  performance  goals  established by the  Compensation
Committee of the Company's  board of directors (the  "Compensation  Committee").
Notwithstanding  the  foregoing,  in any year  the  Compensation  Committee  may
recommend for good reason a reduction in bonus for such year.

                  3.3 Benefit Plans.  During the Employment  Period, the Company
shall  provide  Executive  with the use of the office in the  Company's New York
City   headquarters   currently   occupied  by   Executive,   with   appropriate
administrative  services,  including a  secretary,  and the  Executive  shall be
entitled to  participate  in all plans  adopted  for the general  benefit of the
Company's  employees  or executive  employees,  such as pension  plans,  medical
plans, disability plans, investment plans and group or other insurance plans and
benefits,  to  the  extent  that  the  Executive  is  and  remains  eligible  to
participate  therein and subject to the eligibility  provisions of such plans in
effect from time to time;  provided,  however,  that such benefits  shall not be
less, in the aggregate, than



<PAGE>



those in effect on March 15, 1995.  The  Executive  has  received,  and shall be
eligible to continue to receive, grants of performance units under the Company's
Long-Term  Incentive  and  Share  Award  Plan and such  other  stock  option  or
incentive plans as may be maintained by the Company, in such amounts and at such
times as shall be determined by the Compensation Committee.  The Executive shall
be  reimbursed  for  his  reasonable  out-of-pocket  expenses  incurred  in  the
performance  of his duties upon  submission of appropriate  evidence  thereof in
conformity with normal Company policy for executive officers.  In addition,  the
Executive  shall receive a per diem of $1,000 for each day or portion thereof he
is working in Florida.

                  3.4  Automobile.   The  Company  shall  provide  [two]  luxury
automobiles for the exclusive use and benefit of the Executive.  The automobiles
shall be of a type similar to the automobiles  currently provided by the Company
for the benefit of the Executive. With respect to any automobile provided to the
Executive  pursuant  to this  Section  3.4  which is  subject  to a  lease,  the
Executive  shall have the right to purchase the automobile at the termination of
the term of such lease. With respect to any automobile provided to the Executive
pursuant to this Section 3.4 which is owned by the Company,  the Executive shall
have the right to purchase such automobile at its depreciated book value.

     4. Vacation.  For each year during the Employment Agreement,  the Executive
shall be entitled to paid  vacation in accordance  with the  Company's  standard
policy for executive officers.

            5.    Termination.

                  5.1 Death. This Agreement shall  automatically  terminate upon
the death of the  Executive,  whereupon the Company shall be obligated to pay to
the  Executive's  estate any unpaid Base  Salary and pro rata Bonus,  if any, as
determined by the  Compensation  Committee,  through the date of death.  Amounts
payable  under this Section 5.1 shall be payable at the times and  intervals set
forth in Sections 3.1 and 3.2 hereof.

                  5.2 Disability.  The Company shall have the right to terminate
this Agreement  during the  continuance  of any Disability of the Executive,  as
hereinafter  defined,  upon  fifteen  (15) days' prior  notice to the  Executive
during the continuance of the Disability. "Disability" for purposes of



<PAGE>



this  Section  5.2  shall  mean an  inability  by the  Executive  to  perform  a
substantial portion of the Executive's duties hereunder by reason of physical or
mental  incapacity of disability for a total of one hundred eighty (180) days or
more in any  consecutive  period of three hundred and sixty-five  (365) days, as
determined by the Board of Directors in its good faith judgment. In the event of
a  termination  by reason of the  Executive's  Disability,  the Company shall be
obligated  to assist the  Executive  in  obtaining  payment  under the  existing
disability  insurance  maintained  for the  Executive  by the  Company.  Amounts
payable  under this Section 5.2 shall be payable at the times and  intervals set
forth in Sections 3.1 and 3.2 hereof.

                  5.3 Termination for Cause.  Upon the early termination of this
Agreement by the Company for Cause,  the Company  shall only be obligated to pay
the Executive his Base Salary  pro-rated to the date of termination and any then
accrued  benefits.  For purposes of this  Agreement,  "Cause" shall mean (i) any
willful and continuing material failure by the Executive to perform his material
duties under this Agreement,  taken as a whole; (ii) the Executive's  conviction
of or plea of nolo contendere to a Felony;  (iii) the Executive's  conviction of
fraud or  embezzlement  against the  Company;  (iv) any  willful or  intentional
misconduct having the effect of materially injuring the business of the Company,
or (v) any willful and material breach by the Executive of any of the provisions
of the Confidentiality and Non-Competition  Agreement attached hereto as Exhibit
A. Termination for Cause shall become effective upon notice to the Executive.

                  5.4 Termination by Executive for Other than Good Reason.  Upon
the early  termination  of this  Agreement by the  Executive for other than Good
Reason, the Company shall be obligated to: (i) pay the Executive his Base Salary
pro-rated to the date of termination  plus any then accrued  benefits;  (ii) pay
the Executive, on a monthly basis or more frequently, a consulting fee of 75% of
the Executive's  Base Salary at the time of termination  through March 15, 2000,
or if this Agreement is renewed pursuant to Section 2, through the date to which
this Agreement has been renewed;  (iii) provide that all options  granted to the
Executive under the Company's  Long-Term Incentive and Share Award Plan and such
other stock option or incentive  plans as may be maintained by the Company shall
vest upon such  termination;  (iv) transfer to the Executive all right and title
to the automobiles provided to the Executive pursuant to Section 3.4 herein; (v)
transfer to the Executive for



<PAGE>



consideration  of $10,000 all right and title to the Company's  facility located
on Lake Tenanah in Roscoe,  New York;  (vi) pay all premiums with respect to the
split dollar life insurance policy  maintained by the Company on the Executive's
life existing as of the date of this Agreement;  (vii) provide  coverage for the
Executive  under the  Company's  automobile  insurance  policies,  for which the
Company shall be reimbursed by the  Executive;  and (viii) provide the Executive
coverage  under the Company's  medical plans and life  insurance  plans or other
similar medical and life insurance coverage,  or the economic equivalent of such
coverage,  for so  long  as the  Executive  shall  live.  For  purposes  of this
Agreement,  "Good  Reason" shall mean any of the  following:  (i) a reduction or
adverse  change in, or a change  which is  inconsistent  with,  the  Executive's
responsibilities, duties, authority, power, functions, title, working conditions
or status; or (ii) a reassignment to another geographic location more than fifty
(50) miles from the Executive's place of employment;  or (iii) a material breach
by the Company of this Agreement.

                  5.5   Termination   for  Other  Reason.   If  the  Executive's
employment is terminated  during the term of this Agreement by the Executive for
Good  Reason  or by  the  Company  other  than  by  reason  of (i)  death,  (ii)
Disability,  or (iii) for Cause, then the Company shall pay the Executive a cash
lump sum in an amount  equal to (i) four (4) times his Base  Salary in effect at
the time of his  termination  of  employment,  plus (ii) the higher of the Bonus
which the  Executive  received in the prior  fiscal  year,  or the target  Bonus
applicable to the Executive in the fiscal year of such termination.  Such amount
shall be  payable no later  than  thirty  (30) days  following  the  Executive's
termination  pursuant to this  Section  5.5. For the three year period after the
Executive's  termination  of  employment  pursuant  to  this  Section  5.5,  the
Executive  shall  be  (i)  entitled  to  continued  participation  in all of the
Company's  employee  benefit plans,  including,  without  limitation,  continued
accrual for retirement  benefits,  and all of the other benefits and perquisites
provided for under this Agreement (other than those benefits set forth in clause
(vi)  below)  or  (ii)  provided  the  economic  equivalent  of  such  continued
participation and perquisites.  In addition,  the Company shall be obligated to:
(i)  provide  that all  options  granted to the  Executive  under the  Company's
Long-Term  Incentive  and  Share  Award  Plan and such  other  stock  option  or
incentive  plans as may be  maintained  by the  Company  shall  vest  upon  such
termination;  (ii)  transfer  to  the  Executive  all  right  and  title  to the
automobiles provided to the Executive pursuant to



<PAGE>



Section 3.4 herein; (iii) transfer to the Executive for consideration of $10,000
all right and title to the Company's facility located on Lake Tenanah in Roscoe,
New York;  (iv) pay all premiums with respect to the split dollar life insurance
policy maintained by the Company on the Executive's life existing as of the date
of this  Agreement;  (v) provide  coverage for the Executive under the Company's
automobile insurance policies,  for which the Company shall be reimbursed by the
Executive;  and (vi) provide the Executive  coverage under the Company's medical
plans  and life  insurance  plans or other  similar  medical  or life  insurance
coverage,  or the  economic  equivalent  of  such  coverage,  for so long as the
Executive shall live.

                  5.6  Nature  of  Payments.   Any  payments   pursuant  to  the
provisions  of this  Section 5 shall not be  subject  to any  requirement  as to
mitigation or offset.

                  5.7 Tax Gross-up.  Anything in this  Agreement to the contrary
notwithstanding,  in the  event it  shall be  determined  that  any  payment  or
distribution made, or benefit provided,  by the Company to or for the benefit of
the Executive (whether paid or payable or distributed or distributable  pursuant
to the terms of this Agreement or otherwise,  but  determined  without regard to
any additional  payments required under this Section 5.7) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the  Internal  Revenue Code
of 1986, as amended and then in effect (the "Code") (or any similar  excise tax)
or any interest or penalties are incurred by the Executive  with respect to such
excise tax (such excise tax, together with any such interest and penalties,  are
hereinafter  collectively  referred to as the "Excise Tax"),  then the Executive
shall be entitled to receive an additional payment (a "Gross-Up  Payment") in an
amount such that after payment by the Executive of all Federal,  state, local or
other taxes  (including  any interest or  penalties  imposed with respect to any
such  taxes),  including,  without  limitation,  any such income  taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up  Payment,  the Executive  retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.

            (i) Subject to the provisions of paragraph (ii) of this Section 5.7,
all determinations required to be made under this Section 5.7, including whether
and when a Gross-Up  Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination,



<PAGE>



shall be made by Coopers & Lybrand (the  "Accounting  Firm") which shall provide
detailed supporting calculations both to the Company and the Executive within 20
calendar days of the receipt of written notice from the Executive that there has
been a Payment,  or such earlier  time as is  requested  by the Company.  In the
event  that the  Accounting  Firm is serving as  accountant  or auditor  for the
individual, entity or group effecting the change in control, the Executive shall
have the right by written  notice to the Company to appoint  another  nationally
recognized accounting firm to make the determinations  required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and  expenses of the  Accounting  Firm shall be borne solely by the Company
and shall be paid by the  Company  upon demand of the  Executive  as incurred or
billed by the Accounting Firm. Any Gross-Up Payment,  as determined  pursuant to
this Section 5.7, shall be paid by the Company to the Executive within five days
of the receipt of the Accounting  Firm's  determination.  If the Accounting Firm
determines that no Excise Tax is payable by the Executive,  it shall furnish the
Executive with an unqualified written opinion in form and substance satisfactory
to the  Executive  that  failure to report  the  Excise  Tax on the  Executive's
applicable  federal  income tax return would not result in the  imposition  of a
negligence or similar penalty. As a result of the uncertainty in the application
of  Section  4999 of the Code at the time of the  initial  determination  by the
Accounting Firm hereunder,  it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment"), consistent
with the  calculations  required  to be made  hereunder.  In the event  that the
Company  exhausts its remedies  described in paragraph  (ii) of this Section 5.7
and the  Executive  thereafter  is required to make a payment of any Excise Tax,
the  Accounting  Firm shall  determine the amount of the  Underpayment  that has
occurred  and any such  Underpayment  shall be paid by the Company to or for the
benefit of the  Executive  within  five days of the  receipt  of the  Accounting
Firm's  determination.  All  determinations  made  by  the  Accounting  Firm  in
connection with any Gross-Up Payment or Underpayment  shall be final and binding
upon the Company and the Executive.

            (ii) The Executive  shall notify the Company in writing of any claim
asserted in writing by the Internal  Revenue  Service to the Executive  that, if
successful,  would  require the payment by the Company of the Gross-Up  Payment.
Such  notification  shall be given as soon as practicable  but not later than 60
days after the Executive is informed in writing



<PAGE>



of such claim and shall  apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid.  The  Executive  shall not pay
such claim prior to the  expiration of the 30-day  period  following the date on
which it gives such notice to the Company (or such shorter  period ending on the
date that any  payment  of taxes  with  respect  to such  claim is due).  If the
Company notifies the Executive in writing prior to the expiration of such period
that it desires to contest  such claim,  the  Executive  shall at the  Company's
expense:

      a.    give the Company any information reasonably requested by the
Company relating to such claim,

      b. take such  action  in  connection  with  contesting  such  claim as the
Company  shall  reasonably  request  in  writing  from time to time,  including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,

      c.    cooperate with the Company in good faith in order effectively
to contest such claim, and

      d.    permit the Company to participate in any proceedings relating
to such claim;

provided,  however, that the Company shall bear and pay directly as incurred all
costs and expenses  (including  additional  interest and penalties)  incurred in
connection  with  such  contest  and  shall  indemnify  and hold  the  Executive
harmless, on an after-tax basis, for any Excise Tax or any Federal, state, local
or other  income or other tax  (including  interest and  penalties  with respect
thereto)  imposed as a result of such  representation  and  payment of costs and
expenses.  Without  limitation on the foregoing  provisions of this Section 5.7,
the Company shall control all proceedings  taken in connection with such contest
and,  at its sole  option,  may  pursue  or  forego  any and all  administrative
appeals,  proceedings,  hearings and  conferences  with the taxing  authority in
respect of such claim and may, at its sole option,  either  direct the Executive
to pay the tax  claimed  and  sue for a  refund  or  contest  the  claim  in any
permissible  manner,  and the  Executive  agrees to prosecute  such contest to a
determination  before  any  administrative  tribunal,  in  a  court  of  initial
jurisdiction  and  in  one or  more  appellate  courts,  as  the  Company  shall
determine;  provided,  however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the



<PAGE>



amount of such payment to the  Executive,  on an  interest-free  basis and shall
indemnify  and hold the  Executive  harmless,  on an after-tax  basis,  from any
Excise Tax or  Federal,  state,  local or other  income or other tax  (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance;  and further
provided that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which such contested
amount  is  claimed  to be due is  limited  solely  to  such  contested  amount.
Furthermore,  the  Company's  control of the contest  shall be limited to issues
with  respect to which a Gross-Up  Payment  would be payable  hereunder  and the
Executive shall be entitled to settle or contest,  as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

            (iii) If, after the receipt by the  Executive of an amount  advanced
by the Company  pursuant to paragraph  (ii) of this  Section 5.7, the  Executive
becomes entitled to receive any refund with respect to such claim, the Executive
shall  (subject to the Company's  complying with the  requirements  of paragraph
(ii) of this Section 5.7)  promptly pay to the Company the amount of such refund
(together  with any interest  paid or credited  thereon  after taxes  applicable
thereto)  upon receipt  thereof.  If,  after the receipt by the  Executive of an
amount advanced by the Company pursuant to paragraph (ii) of this Section 5.7, a
determination  is made that the  Executive  shall not be  entitled to any refund
with  respect to such claim and the  Company  does not notify the  Executive  in
writing of its intent to contest such denial of refund  prior to the  expiration
of 30 days after such  determination,  then such  advance  shall be forgiven and
shall not be required to be repaid and the amount of such advance  shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

            6.  Confidentiality  and  Non-Competition  Agreement.  The Executive
shall  be  bound  by  the  terms  of  the  Confidentiality  and  Non-Competition
Agreement, a copy of which is annexed hereto as Exhibit A, during the Employment
Period and for such period  following the  Employment  Period as is set forth in
the Confidentiality and Non-Competition Agreement. The Executive and the Company
shall  execute  a copy  of the  Confidentiality  and  Non-Competition  Agreement
simultaneously with the execution of this Agreement.



<PAGE>



            7.  Settlement of  Performance  Unit Awards.  As  consideration  for
entering into this Amended and Restated Employment Agreement and for waiving any
rights the  Executive  has to receive  amounts  payable to the  Executive  under
grants made prior to the date of this Agreement of Performance Unit Awards under
the  Company's  Long-Term  Incentive  and Share Award Plan,  the Company  hereby
agrees to pay to the Executive $2,100,000 on the date of this Agreement.

            8.    Miscellaneous Provisions.

                  8.1 Entire Agreement.  This Agreement and the  Confidentiality
and Non-Competition  Agreement attached hereto as Exhibit A set forth the entire
agreement  and  understanding  between the parties  with  respect to the subject
matter   hereof  and   supersede  all  prior   agreements,   arrangements,   and
understandings  between the parties with respect to the subject  matter  hereof.
Upon execution of this  Agreement and the  Confidentiality  and  Non-Competition
Agreement,  the employment agreement between the Executive and the Company dated
March 15, 1995, shall be superseded and shall be of no further force and effect.

                  8.2  Modification.  This  Agreement may be amended,  modified,
superseded, canceled, renewed or extended, and the terms or covenants hereof may
be waived,  only by a written  instrument  executed by both of the parties or in
the case of a waiver, by the party waiving compliance.

                  8.3 Waiver.  The failure of either  party at any time or times
to require  performance  of any  provision  hereof in no manner shall affect the
right at a later time to enforce the same. No waiver by either party of a breach
of any term or  covenant  contained  in this  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 any other term or
covenant contained in this Agreement.

     8.4  Notices.  All  notices,  demands,  consents  or  other  communications
hereunder  shall be in  writing  and shall be given (and shall be deemed to have
been duly given) upon the earlier of receipt,  one business day after being sent
by telecopier or three business days after being sent by registered or certified
mail to the parties at the addresses set forth above or to such other address as
either party shall hereafter specify by notice to the other party. Irrespective



<PAGE>



of the foregoing, notice of change of address shall be effective only upon
receipt.

                  8.5  Governing  Law.  This  Agreement  shall be  construed  in
accordance  with and governed by the laws of the State of New York applicable to
contracts made and to be performed wholly within such state.

                  8.6  Arbitration.  Any  controversy or claim arising out of or
relating to this Agreement,  the making,  interpretation  or the breach thereof,
other than a claim solely for  injunctive  relief for any alleged  breach of the
provisions of the Confidentiality and Non-Competition  Agreement as to which the
parties  shall  have the right to apply for  specific  performance  to any court
having equity  jurisdiction,  shall be resolved by  arbitration in New York, New
York in  accordance  with  the  Commercial  Arbitration  Rules  of the  American
Arbitration  Association and judgment upon the award tendered by the arbitrators
may be entered in any court  having  jurisdiction  thereof  and any party to the
arbitration  may, if such party so elects,  institute  proceedings  in any court
having  jurisdiction for the specific  performance of any such award. The powers
for the  arbitrator or  arbitrators  shall  include,  but not be limited to, the
awarding of injunctive  relief. The arbitrator shall include in any award in the
prevailing party's favor the amount of his or its reasonable attorney's fees and
expenses and all other reasonable costs and expenses of the arbitration.  In the
event the arbitrator  does not rule in favor of the prevailing  party in respect
of all the claims  alleged by such party,  the  arbitrator  shall include in any
award in favor of the prevailing party the amount of his or its reasonable costs
and  expenses  of the  arbitration  as he deems  just and  equitable  under  the
circumstances.  Except as provided  above,  each party shall bear his or its own
attorney's  fees and expenses and the parties shall bear equally all other costs
and expenses of the arbitration.

                  8.7 Assignability.  This Agreement, and the Executive's rights
and obligations hereunder, may not be assigned by the Executive. The Company may
assign its rights, together with its obligations hereunder,  only to a successor
by merger or by the  purchase  of all or  substantially  all of the  assets  and
business of the Company and such rights and  obligations  shall inure to, and be
binding upon, any such successor.



<PAGE>



                  8.8 Binding  Effect.  This Agreement shall be binding upon and
shall  inure  to  the  benefit  of  the  parties  and  their   respective  legal
representatives, heirs, permitted successors and permitted assigns.

                  8.9  Headings and Word  Meanings.  Headings and titles in this
Agreement  are for  convenience  of  reference  only and shall not  control  the
construction or  interpretation  of any provisions  hereof.  The words "herein,"
"hereof,"  "hereunder" and words of similar  import,  when used anywhere in this
Agreement, refer to this Agreement as a whole and not merely to a subdivision in
which such words appear.  unless the context  otherwise  requires.  The singular
shall include the plural unless the context otherwise requires.

                  8.10  Separability.  Any term or provision  of this  Agreement
which  is  invalid  or  unenforceable  in any  jurisdiction  shall,  as to  such
jurisdiction,   be   ineffective   to  the   extent   of  such   invalidity   or
unenforceability  without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or  enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction.


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


                                   THE COMPANY

                                    ALLIANCE ENTERTAINMENT CORP.


                                    By: /s/Elliot B. Newman
                                        -------------------------------------


                                    THE EXECUTIVE


                                     /s/Joseph J. Bianco
                                     ------------------------------------------
                                     Joseph J. Bianco



<PAGE>



                               Exhibit A



               CONFIDENTIALITY AND NON-COMPETITION AGREEMENT


     THIS  CONFIDENTIALITY  AND  NON-COMPETITION  AGREEMENT  (the  "Agreement"),
entered into and effective as of the 15th day of August, 1996, is by and between
ALLIANCE ENTERTAINMENT CORP. (the "Company") and Joseph J. Bianco ("Employee").

            In  Consideration of Employee's  employment by the Company,  and for
other good and  valuable  consideration,  the receipt  and  adequacy of which is
hereby acknowledged, the parties agree as follows:

            1. Confidential  Information.  By virtue of Employee's employment at
the  Company,  Employee  may  obtain  confidential  or  proprietary  information
developed, or to be developed, by the Company.  "Confidential Information" means
all information,  whether in oral, written,  graphic or  machine-readable  form,
including but not limited to all: software used or developed in whole or in part
by the Company (including source code); algorithms;  computer processing systems
and techniques; price lists; customer lists; procedures;  improvements, concepts
and ideas; business plans and proposals; technical plans and proposals; research
and development; budgets and projections; technical memoranda, research reports,
designs and  specifications;  new product and service  develpments;  comparative
analyses of competitive products,  services and operating procedures;  and other
information,  data and documents now existing or later  acquired by the Company,
regardless of whether any of such  information,  data or documents  qualify as a
"trade secret" under  applicable  Federal or State law. All such  information is
collectively referred to as the "Confidential Information".

            2.  Non-Disclosure.  The Employee agrees that, except as directed by
the Company,  he will not at any time (during the term of Employee's  employment
by the Company or at any time thereafter), except as may be expressly authorized
by the  Company  in  writing,  disclose  to any  person or use any  Confidential
Information  whatsoever  for  any  purpose  whatsoever,  or  permit  any  person
whatsoever  to examine  and/or make copies of any  reports or any  documents  or
software  (whether in written form or stored on magnetic,  optical or other mass
storage  media)  prepared by him or that come into his  possession  or under his
control  by  reason  of  his  employment  by the  Company  or by  reason  of any
consulting  or  software  development  services he has  performed  or may in the
future perform for the


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Company which contain or are derived from Confidential Information. The Employee
further agrees that while employed at the Company,  no Confidential  Information
shall be removed from the Company's business premises, without the prior written
consent of the Company.

     3. Company Property. As used in this Agreement, the term "Company Property"
means all documents,  papers, computer printouts and disks, records, customer or
prospect  lists,  files,  manuals,  supplies,  computer  hardware and  software,
equipment,  inventory  and  other  materials  that have  been  created,  used or
obtained by the Company,  or otherwise  belonging to the Company, as well as any
other  materials  containing  Confidential  Information  as defined in Section 1
above. Employee recognizes and agrees that:

     3.1 All Company Property shall be and remain the property of the Company;

     3.2 Employee  will  preserve,  use and hold Company  Property  only for the
benefit of the Company and to carry out the Company's business; and

            3.3  When  Employee's   employment  is  terminated,   Employee  will
immediately deliver to the Company all Company Property, including all copies or
any  other  types of  reproductions  which  Employee  has in his  possession  or
control.

            4.  Non-Solicitation.  During the period of his employment and for a
period of one (1) year after  termination  of his employment at Alliance for any
reason,  Employee shall not, on his own behalf or on behalf of any person,  firm
or  corporation,  or in any  capacity  whatsoever,  (i)  solicit  any persons or
entities  with  which  Alliance  had  contracts  or  was  negotiating  contracts
regarding products or services during the term of Employee's employment, or (ii)
induce, suggest, persuade or recommend to any such persons or entities that they
terminate,  alter or refrain from renewing or extending, their relationship with
Alliance or become a client of Employee or any third party,  and Employee  shall
not himself and shall not induce or permit any other person to approach any such
person or entity for any purpose.  Should  Employee  become aware that any other
Employee  or third  party  has  engaged  in such  conduct,  Employee  agrees  to
immediately advise Alliance of the circumstances of any such conduct.



<PAGE>



            5. Restrictive  Covenant.  Employee acknowledges that his employment
with the Company will enable him to obtain knowledge about the computer software
the Company develops or uses, as well as of the  entertainment  and other fields
in which the Company  does  business,  and will also enable him to form  certain
relationships  with individuals and entities in the geographic area in which the
Company furnishes its services.  Employee further acknowledges that the goodwill
and other  proprietary  interests  of the Company  will suffer  irreparable  and
continuing damage in the event Employee enters into competition with the Company
within one (1) year subsequent to the termination of his employment.  Therefore,
Employee  agrees that during the term of his  employment and for a period of one
(1) year  thereafter,  regardless of the cause of the  termination of Employee's
employment,  he will not,  without prior written consent of the Company,  engage
directly or indirectly in any conduct,  activity,  or business  whatsoever which
would  provide  revenue to  Employee or to any third  party,  with any person or
entity  manufacturing,  distributing or supplying a product or service competing
with the Company's products or services.  Employee further acknowledges that his
employment with the Company constitutes fair and adequate  consideration for his
agreement not to engage in such conduct  within one (1) year of the  termination
of his employment, regardless of the cause of such termination. Employee further
agrees that should the Company,  in its sole  discretion,  determine  that it is
desirable or  appropriate  to make any payment to Employee upon  termination  of
employment  ("Severance  Pay"),  such  Severance Pay shall be deemed  additional
consideration  for Employee's  binding  obligation not to engage in such conduct
during the one (1) year period. However, and notwithstanding any other provision
of this Agreement,  it is understood and agreed by the Company and Employee that
any decision made by the Company regarding  Severance Pay, regardless of whether
termination  occurs with or without cause,  shall in no way discharge or release
Employee from the  obligation  not to engage in such conduct  during the one (1)
year period.

     6. Work Product.  Employee  agrees that,  during the term of his employment
with the Company:

            6.1 He will disclose  promptly and fully to the Company all works of
authorship, inventions, discoveries, improvements, designs, processes, software,
or any  improvements,  enhancements,  or documentation of or to the same that he
makes, works on or conceives, individually or jointly with others, in the course
of his employment by the Company or



<PAGE>



with the use of the Company's time, materials or facilities,  in any way related
or  pertaining  to or  connected  with  the  present  or  anticipated  business,
development,  work or  research  of the  Company  or which  results  from or are
suggested  by any work he may do for the  Company and  whether  produced  during
normal business hours or on personal time (collectively the "Work Product");

            6.2 All Work  Product  of the  Employee  shall be deemed to be "work
made for hire" within the meaning of { 101 of the  Copyright  Act and all rights
to copyright shall be vested entirely in the Company. If for any reason the Work
Product is deemed  not to be "work  made for hire," and its rights to  copyright
are thereby in doubt, this Agreement shall constitute an irrevocable  assignment
by the Employee to the Company of all right, title and interest in the copyright
of all Work Product  created under this  Agreement.  The parties intend that any
and all copyright and other  intellectual  property  rights in the Work Product,
including,  without  limitation,  any and all rights of whatever kind and nature
now or hereafter to distribute  and  reproduce  such Work Product in any and all
media throughout the world,  are the sole property of the Company.  The Employee
hereby  agrees to  assist  the  Company  in any  manner  as shall be  reasonably
requested  by the Company to protect the  Company's  interest in such  copyright
and/or other intellectual property rights, and to execute and deliver such legal
instruments  or documents as the Company  shall request in order for the Company
to register the Company's  worldwide copyright in the Work Product with the U.S.
Copyright  Office and to register and protect the  Company's  copyright or other
intellectual property rights in the Work Product throughout the world. Likewise,
the  Employee  hereby  agrees to assist  the  Company  by  executing  such other
documents  and  instruments  which the Company  deems  necessary to enable it to
evidence,  perfect and protect its right,  title and interest in and to the Work
Product.

            6.3 Employee  shall make and maintain  adequate and current  written
records and  evidence of all Work  Product,  including  drawings,  work  papers,
graphs,  computer  records and any other  document which shall be and remain the
property of the  Company,  and which shall be  surrendered  to the Company  upon
request and upon the  termination  of  Employee's  employment  with the Company,
regardless of cause. The provisions of this section and the term Work Product as
used  herein do not apply to any  invention  for which no  equipment,  supplies,
facilities  or  confidential,  proprietary  or trade secret  information  of the
Company was used, and which was developed entirely on



<PAGE>



Employee's own time,  while not on the Company's  business  premises,  and which
does not relate to the Company's business,  unless: (i) the invention relates to
the Company's actual or demonstratively anticipated research development or (ii)
the invention results from any work performed by Employee for the Company.

            7.  Enforcement.  The breach or threatened breach by Employee of any
of the  provisions  of  this  Agreement  shall:  (i)  constitute  cause  for the
termination of Employee's employment and (ii) entitle the Company to a permanent
injunction or other  injunctive  relief in order to prevent or restrain any such
breach   or   threatened   breach  by   Employee   or  his   partners,   agents,
representatives,  servants,  independent contractors,  or any and all persons or
entities  directly or  indirectly  acting for or with  Employee.  The rights and
remedies of the Company under this Agreement  shall be in addition to and not in
limitation  of any of the rights,  remedies,  and  monetary or other  damages or
redress available to it at law or equity.

            8. Acknowledgment.  Employee acknowledges that he has carefully read
and considered the provisions of this Agreement, and having done so, agrees that
the restrictions  set forth are fair and reasonably  required for the protection
of the  interests  of  the  Company.  In the  event  that,  notwithstanding  the
foregoing,  any part of the  covenants  set forth shall be held to be invalid or
unenforceable,  the remaining  parts thereof shall  nevertheless  continue to be
valid and enforceable as though the invalid or unenforceable  parts had not been
included  therein.  In the event that any provision of this  Agreement  shall be
declared  by  a  court  of  competent   jurisdiction   to  be   unreasonable  or
unenforceable,  the court shall enforce the provision in a way which it deems to
be reasonable and enforceable.

     9.  Survival.  This Agreement  shall survive any  termination of Employee's
employment, whether or not for cause.

            10. The Company  Defined.  As used in this Agreement,  the term "the
Company"  includes the Company,  any assignee or other  successor in interest of
the Company,  and any parent,  subsidiary,  or other  corporation or partnership
under common ownership or control with the Company.

     11.  Notices.  All notices in accordance  with this  Agreement  shall be in
writing and given by hand delivery,  overnight  express  delivery,  or certified
U.S. mail, return


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receipt  requested,  and properly addressed to the party for whom it is intended
at the following addresses or such other address as is most recently noticed for
such party:


            If to the Company:           Alliance Entertainment Corp.
                                         110 E. 59th Street
                                         New York, New York 10022

                                         Attn: Joseph Bianco
                                         Chairman and Chief
                                         Financial Officer

            If to Employee:              Joseph J. Bianco
                                         23 West 12th Street
                                         New York, New York 10012

            12.  Miscellaneous.  This  Agreement  is  legally  binding  on  both
Employee and the Company and benefits their  successors  and assigns.  It may be
executed in counterparts,  each of which shall be deemed an original, but all of
which together shall constitute one and the same  instrument.  It represents the
parties' entire understanding regarding the subject matter of this Agreement and
supersedes any and all other prior agreements regarding the same subject matter.
The terms and provisions of this Agreement  cannot be terminated,  modified,  or
amended  except in a writing  signed by the party  against whom  enforcement  is
sought.  This  Agreement  shall be construed in accordance  with the laws of the
State of New York, and any suit, action or proceeding arising out of or relating
to this  Agreement  shall be commenced and  maintained in any court of competent
subject-matter  jurisdiction  in the State of New York,  with exclusive venue in
New  York  County.  In any  suit,  action  or  proceeding  arising  out of or in
connection  with this  Agreement,  the prevailing  party shall be entitled to an
award of the amount of attorneys' fees and disbursements actually billed to such
party, including fees and disbursements on one or more appeals.

     13.  No  Guarantee  of  Employment.  Nothing  in this  Agreement  shall  be
interpreted  or  construed  to  be a  guarantee  of  ongoing  employment,  or to
otherwise  limit the Company's right to terminate  Employee's  employment at any
time.



<PAGE>



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


EMPLOYEE:                                          ALLIANCE ENTERTAINMENT CORP.

/s/Joseph J. Bianco                                /s/Anil K. Narang
-------------------------                          -------------------------
      (signature)                                    (signature)

Joseph J. Bianco                                   Anil K. Narang
------------------------                           -------------------------
     (name printed)                                  (name printed)

                                                   President & Vice Chairman
                                                   -------------------------
                                                      (title)






























<PAGE>





                                                                 August 27, 1996


Alliance Entertainment Corp.
110 East 59th Street
New York, New York 10022

Dear Sirs,

     Reference is made to that certain Amended and Restated Employment Agreement
dated  as of the 15th day of  August,  1996  (the  "Agreement")  by and  between
Alliance  Entertainment Corp. (the "Company") and the undersigned.  As a further
inducement  to the  Company to enter into the  Agreement  and for other good and
valuable  consideration,  receipt of which is hereby  acknowledged,  this letter
will confirm the following:

     1. It is understood and agreed by the undersigned  that the cash payment to
be made by the Company  pursuant to Section 7 of the  Agreement is being made by
the  Company for the purpose of  retaining  for the Company the  services of the
undersigned over the term of the Agreement.

     2. In the event that the actions or inactions of the undersigned constitute
a willful and  continuing  material  failure by the  undersigned  to perform his
material duties under the Agreement,  taken as a whole (a "Willful Breach"), the
undersigned  will be  obligated to pay over to the Company a pro rata portion of
the payment originally received pursuant to Section 7 of the Agreement, such pro
rata amount to be calculated by multiplying  the total amount of such payment by
a  fraction  equal  to the  remaining  portion  of the  term  of the  Agreement.
Notwithstanding  anything  in this  paragraph  2 to the  contrary,  the  Company
understands  and  agrees  that the  exercise  by the  undersigned  of his rights
pursuant to Section 5.4 of the Agreement  shall not  constitute a Willful Breach
as such term is used in this letter.

     3. The  undersigned  agrees that he will not take,  or cause the Company to
take, any action or inaction which in turn would cause the undersigned to commit
a Willful Breach of the Agreement.

     4. In the event that the  undersigned  ceases to perform his services prior
to the expiration of the term of the  Agreement,  and a bona fide dispute arises
as to whether such cessation constitutes a Willful Breach, the undersigned shall
not be  obligated  to make the  repayment  contemplated  by  paragraph 2 of this
letter, unless and until it is finally judicially determined that such cessation
was a Willful Breach.







<PAGE>





     If the foregoing  correctly sets forth our  understanding,  please indicate
your acceptance  hereof in the space provided  below,  whereupon this letter and
you acceptance shall constitute a binding agreement between us.

                                Very truly yours,


                               /s/Joseph J. Bianco
                               --------------------------------
                               Joseph J. Bianco

Accepted and agreed as of the date first written:


By:/s/Joseph J. Bianco
----------------------------




























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                                 August 15, 1996


Alliance Entertainment Corp.
110 East 59th Street
New York, New York

Gentlemen:

     Reference is made to the Amended and Restated Employment Agreements,  dated
as of the date hereof,  between  Alliance  Entertainment  Corp.  and each of the
undersigned.  Each of the  undersigned  agrees he will not exercise his right to
terminate  their  respective  agreements  other than for good reason pursuant to
Section 5.4 thereof in a manner that would  violate or cause a default under any
existing credit agreement of the Alliance Entertainment Corp. with any bank.

                                                   Yours very truly,


                                                   /s/Joseph Bianco
                                                   ----------------------------
                                                   Joseph Bianco

                                                   /s/Anil K. Narang
                                                   ----------------------------
                                                   Anil K. Narang