Document:

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                                                                    EXHIBIT 10.2

                            As of September 20, 2002

RuffNation Films, LLC
c/o Grubman Indursky & Schindler, P.C.
Carnegie Hall Tower
152 West 57th Street
New York, New York 10019
Attention: Theodore P. Harris, Esq.

Ladies and Gentlemen:

Reference is made to the standard form joint venture agreement of Sony Music, a
Group of Sony Music Entertainment Inc. ("Sony" or the "Sony Venturer"), attached
hereto as Exhibit A (the "Basic Agreement"). Unless specifically provided to the
contrary below, all terms defined in the Basic Agreement which are used in this
"short form agreement shall be used as defined in the Basic Agreement. The Basic
Agreement, as modified and as supplemented by the provisions below, shall
constitute a binding and enforceable agreement (hereinafter, "this agreement")
between you (the "Promoter Venturer") and Sony regarding the Venture (as defined
below). Notwithstanding the foregoing, you and we hereby agree to negotiate in
good faith those provisions of the Basic Agreement not referenced below, and to
subsequently, and expeditiously, endeavor to execute an amended agreement (the
"Final Agreement"). In the event that a Final Agreement is executed by you and
Sony, such Final Agreement shall supersede this agreement. In the event that a
Final Agreement is not executed, the provisions of this agreement shall remain
binding and enforceable. In the event of any conflict between the Basic
Agreement and the provisions described below, the provisions described below
shall control. The Final Agreement will include all of the provisions of this
short form agreement, and shall otherwise be in the form of the Basic Agreement,
except in such respects as you and Sony shall otherwise agree. The failure or
refusal of you or us to enter into such Final Agreement shall not in any manner
impede or compromise the enforceability and effectiveness of this agreement. The
parties hereby agree that the provisions contained in the limited partnership
agreement (the "Prior Agreement"), dated as of February 21, 1997 and with effect
as of July 1, 1998, between Ruffson Holdings LLC, Ruffboy Inc., Sony and
Rufftouch Partners, solely to the extent applicable to this agreement, shall be
deemed reasonable; provided, however, that the parties hereby agree that certain
terms contained in the Prior Agreement are expressly not applicable (e.g.,
overhead payments, royalties, marketing commitments and other financial terms)
and Sony, in its sole, good faith discretion shall determine which terms are
applicable. For the avoidance of doubt, this agreement contains the entire
understanding of the parties relating to its subject matter. No change or
termination of this agreement shall be binding upon Sony unless it is made by an
instrument signed by an authorized officer of Sony. No change of this agreement
shall be binding upon you unless it is made by an instrument signed by you.

A. GENERAL

1. General Structure. You and Sony have formed Charles Street a Delaware limited
liability company, of which you own fifty percent (50%) and Sony own fifty
percent (50%) end which shall comprise two separate (and uncrossed) but
interrelated business operations as more particularly described below. You are

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in the business of producing and marketing feature-length motion pictures. The
feature-length motion pictures produced and marketed by you during the Film Term
(as defined in paragraph 3), shall be referred to herein as "Films". During the
Initial Film Term, you shall fund the creation, production and marketing of two
Films. You and Sony hereby acknowledge that the first such motion picture is
entitled "Snipes" and stars the artist p/k/a Nelly (the "First Film"). You
represent and warrant that the First Film will be initially commercially
released in the United States in October 2002. Sony shall have the exclusive
right, throughout the world and in perpetuity, to manufacture, market,
distribute and otherwise exploit Audiovisual Records intended for home use which
embody each of the Films (including, without limitation, any DVD thereof) (each,
a "Home Video"), and audio-only soundtrack Albums created in connection with
each Film (other than the First Film) (each, a "Soundtrack Album"), each on
behalf of the Film Venture and on the terms an which Sony customarily provides
such services to its wholly-owned home video components and record labels
(subject to any different or more specific terms herein or subsequently agreed
by you and Sony). The cooperative venture described above pursuant to which you
will fund the creation, production and marketing of Films and Sony will be
entitled to exploit Home Videos embodying Films and the corresponding Soundtrack
Albums shall be referred to herein as the "Film Venture". In addition, you shall
furnish recording artists to the Label Venture (as defined below) signed by and
to Promoter Venturer, Principal (as defined below) or any entity owned or
controlled by Promoter Venturer or Principal (collectively, the "Label") as of
the date hereof and during the Label Term, subject to the teens and conditions
hereof, and Sony shall have the exclusive right, throughout the world, an behalf
of the Label Venture, to manufacture, market, distribute and otherwise exploit
Records embodying the musical performances of Approved Artists (as defined in
subparagraph 8(b) below) on the terms on which Sony customarily provides such
services to its wholly-owned home video components or record labels (subject to
any different or more specific terms herein or subsequently agreed by you and
Sony) (the "Label Venture") (the Label Venture and the Film Venture are together
referred to herein as the "Venture"). You shall run the Venture on a day-to-day
basis, subject to the terms hereof. The offices of the Venture shall be located
in or around a location as shall be selected jointly by the Venturers. The
Venture shall transact business under the name "Charles Street" and such name
shall be the exclusive property of the Venture in perpetuity.

2. Owner/Copyright. (a) All rights, under copyright, under contract or
otherwise, in the Home Videos, Soundtrack Albums and all materials embodied
thereon (including, without limitation, the master recordings and all Records
derived therefrom but specifically excluding the Films), and other properties
produced or acquired in connection therewith, and all ancillary rights, shall be
owned and controlled by the Film Venture throughout the world and in perpetuity.
Without limiting the generality of the foregoing, the Film Venture and any
Person authorized by the Film Venture shall have the unlimited, exclusive
rights, throughout the world: (i) to manufacture Horne Videos and Soundtrack
Albums, in any form and by any method now or hereafter known; (ii) to sell,
transfer or otherwise deal in the same under any trademarks, trade names and
labels, or to refrain from such manufacture, sale and dealing; (iii) to
reproduce, adapt, transmit, distribute, communicate, make available and
otherwise use the master recordings embodied an the Home Videos and as part of
the Soundtrack Albums in any medium and in any manner, including but not limited
to use in audiovisual works, without payment of any compensation to you or any
other Person except the payments, if any, which may be expressly prescribed for
the use concerned under paragraph 16 or owing to any third parties for inclusion
of performances as part of the Soundtrack Album; and (iv) subject to
subparagraph 2(b), to publicly perform, exhibit, publicly display, make

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available or to permit the public performance of the master recordings embodied
on the Home Videos and the Soundtrack Albums by means of radio broadcast, cable
transmission, satellite transmission, television broadcast, digital audio
transmission or any other method how or hereafter known. For the avoidance of
doubt, this paragraph shall not operate to grant the Film Venture rights to any
sequel motion picture of the First Film unless such sequel is produced during
the Film Term.

         (b) Notwithstanding anything to the contrary in subparagraph 2(a)
above, you shall own all right, title and interest (including the copyright
therein) in and to the Films; provided, however, that you hereby license to the
Film Venture the exclusive, perpetual right, throughout the world, to exploit
the Film solely in the form of Home Videos and to manufacture, distribute,
advertise and otherwise exploit the same. Notwithstanding anything to the
contrary in subparagraph 2(a) above, Sony shall not have the right to exploit
the Home Video by means of television broadcast. As between you and Sony, the
Films shall be owned exclusively by you: provided, however, that all revenue
attributable, directly or indirectly, to such Films and the exploitation thereof
by any means, in any manner, through any medium (including, without limitation,
exploitation of the Home Videos by means of television broadcast), shall be
deemed to be property of the Film Venture hereunder.

         (c) For the avoidance of doubt, Article 7 of the Basic Agreement shall
apply to each Recording made, furnished to or otherwise acquired by the Label
Venture.

3. Term. (a)(1) The term of this agreement with respect to the Film Venture
(hereinafter, the "Film Term") shall commence as of the date first written
above, and shall continue in force until 9 months following the Initial release
of the Home Video embodying the second Film produced and marketed hereunder (the
"Second Film") (unless such Period is extended or suspended as provided herein),
but in no event shall the initial Film Term continue later than 12 months after
Delivery to Sony of the Second Film. After the and of the Film Term, (A) the
Film Venture shall continue to function with respect to catalog Home Videos and
Soundtrack Albums, (B) Sony Venturer may continue to incur marketing costs
(pursuant to a budget approved by you; provided that such approval is not
unreasonably withheld or delayed) in connection with any Home Video or
Soundtrack Album, which costs shall be deemed an expense of the Film Venture,
and (C) you shall be responsible for running the Film Venture on a day-to-day
basis.

     (2)  The  term  of  this  agreement  with  respect  to  the  Label  Venture
(hereinafter,  the "Label  Term")  shall  commence as of the date first  written
above,  and  shall  continue  in force  until the later of the Film Term and the
expiration  of the  term of the  distribution  agreement  (as  such  term may be
extended)  ("P&D  Term")  to be  entered  into  between a Person  controlled  by
Principal (the "Indie Label") and RED Distribution, Inc. (the "RED P&D") (unless
such period is extended or suspended as provided  herein).  After the end of the
Label Term,  you shall cease to be exclusive to Sony with respect to  furnishing
to the Label Venture  artists  signed to the Label and new signings of acts; the
Label Venture shall continue to function with respect to (a) catalog and (b) new
product from acts then under contract  (i.e..  under  contracts  assigned to the
Label Venture pursuant to subparagraph 8(a) prior to the expiration of the Label
Term), and you shall be responsible for running the Label Venture on a day-today
basis.  You represent and warrant that, as of the data first written above,  the
term of the RED P&D expires three years after the initial  commercial release of
the first album  distributed by RED  Distribution,  Inc., under the RED P&D. You

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shall give Sony 30 day`s prior notices (the "Term Notice") before the expiration
of the P&D Term.  Sony shall have the option,  exercisable  within 30 days after
Sony receives the Term Notice,  to enter into a distribution  agreement with the
Indie Label on the same terms  contained in the RED P&D, except that the term of
such agreement  shall be for a period of 3 years from  commencement  of the term
(but in no event  shall  the term of such  agreement  end  later  than the Label
Term).

                  (b) The Promoter Venturer grants the Sony Venturer two (2)
consecutive options to extend the Film Term for additional Contract Periods
("Option Periods"), each continuing in force until 12 months following your
delivery to Sony Venturer of the DVD embodying the second of two additional
Films, but in no event earlier than 6 months following the initial release in
the United States of the second of such two additional Films, each upon all the
terms and conditions contained herein. The Films produced and marketed by you
during the Option Periods shall be referred to herein as "Option Films". The
Sony Venturer may exercise each of those options by sending the Promoter
Venturer a notice not later than the expiration date of the Contract Period
which is then in effect (the "Current Contract Period"). If the Sony Venturer
exercises such an option, the Option Period concerned will begin immediately
after the end of the Current Contract Period.

                  (c) Notwithstanding anything to the contrary contained in this
paragraph 3, if the Sony Venturer has not exercised its option to extend the
Film Term for a further Contract Period as of the date on which the current
Contract Period would otherwise expire, the following shall apply:

          (i)  The Promoter  Venturer  shall send the Sony  Venturer  notice (an
               "Option Warning") that its option has not yet been exercised.

          (ii) The Sony Venturer shall have the right to exercise the applicable
               Contract  Period  option  by  sending  a notice  to the  Promoter
               Venturer hot later than the date ten (10) business days after its
               receipt of the Option Warning (the "Extension Period").

          (iii)The current  Contract  Period shall end on either the last day of
               the Extension  Period or the date of the Sony  Venturer`s  notice
               (the "Termination Notice") to the Promoter Venturer that the Sony
               Venturer  does not wish to exercise  such  option,  whichever  is
               sooner.

          (iv) For the avoidance of doubt,  nothing  herein shall limit the Sony
               Venturer`s  right to send a  Termination  Notice to the  Promoter
               Venturer  at any  time,  nor  limit  the Sony  Ventures  right to
               exercise a Contract Period Option in accordance with section 3(b)
               above,  notwithstanding  any failure by the Promoter  Venturer to
               send Sony an Option  Warning in accordance  with section  3(c)(1)
               above.

4. Key  Man/Exclusivity.  (a) Christopher  Schwartz (the  "Principal")  shall be
treated as a so-called key man. During each of the Film Term and the Label Term,
neither you nor the key man shall be allowed  (either as an individual or d/b/a,

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or  through  any  partnership  of which he or it is a partner,  or  through  any
corporation or other legal entity  controlled by him or it) to furnish recording
artists or films to companies other than Sony or the Venture (except pursuant to
subparagraph 8(g) below), or to market or promote recording artists or films for
such companies.  The key man shall render his exclusive  services to the Venture
throughout the Film Term and the Label Term in respect of finding end furnishing
recording artists and the making, marketing, distribution and other exploitation
of films and Records; provided,  however, that the key man may furnish recording
artists to the India Label;  provided  further that such  recording  artists are
distributed  under the RED P&D. For the avoidance of doubt,  (i) during the Film
Term and the Label Term the  Principal  may not create a record label or, except
pursuant to subparagraph  8(g) below,  furnish artists to any company other than
Sony, the Venture and/or the Label and (ii) the Principal shall not be deemed in
breach  of this  subparagraph  4(a)  solely  due to  Principal  being the CEO of
TriMedia  Entertainment  Group  Inc.  ("TriMedia");   provided,   however,  that
Principal`s  duties as CEO of TriMedia are consistent with his duties  hereunder
and that such position  does not  constitute a conflict of interest with respect
to the Venture.

(b) Principal  represents and warrants that he controls Promoter  Venturer.  The
Promoter  Venturer  hereby agrees that if Principal  ceases to control  Promoter
Venturer  at any time during the Film Term or the Label  Term,  then,  at Sony`s
option, (i) Promoter Venturer will assign all of its rights under this agreement
to  Principal  (or an entity of which  Principal  is the  principal  or which is
otherwise owned and/or controlled by Principal),  and such assignee shall assume
all of Promoter Venturer`s obligations  hereunder,  or (ii) this agreement shall
continue  in full force and effect  with  Promoter  Venturer.  In  addition,  if
Principal ceases to control  Promoter  Venturer at any time during the Film Term
or the  Label  Term,  Principal  hereby  agrees  to  grant  Sony  the  right  to
participate  in any future venture or entity  involved,  in whole or in part, in
the film or record business under similar terms to the terms hereunder, provided
that an  agreement  between the  parties Is entered  into within one year of the
date that the  Principal  notifies  Sony that he has ceased to control  Promoter
Venturer.

5. Business Plan and Budget.  At least 45 days prior to the commencement of each
Contract Year or at such other time prior to the  commencement  of each Contract
Year as the Sony Venturer shall reasonably request,  the Promoter Venturer shall
submit to the Sony  Venturer a detailed  business  plan for the  Venture for the
approval of the Sony Venturer (as so approved by the Sony Venturer, the "Plan").
Promoter  Venturer shall submit to the Sony Venturer the detailed  business plan
for the for the Initial  Contract Year of the Venture within 90 days of the date
first  written  above for the approval of the Sony  Venturer.  For each Contract
Year  thereafter,  the Plan shall contain  information  of a type  substantially
similar to that included in the Plan for the initial  Contract Year,  including,
without  limitation,  the particular line items on the budget contained  herein.
The Plan shall,  among other things,  include a projected  release  schedule,  a
projected  profit and loss  statement  with all  appropriate  line items for the
upcoming  fiscal year, and  projections for the number of each Record to be sold
during the upcoming  Contract  Year.  Approval of each Plan by the Sony Venturer
shall not be unreasonably  withheld nor delayed.  The Venture shall not make any
material  expenditure or incur any material expense not provided for in the Plan
for the  relevant  Contract  Year or otherwise  provided  for in this  agreement
without the prior written consent of each Venturer.  For the avoidance of doubt,
no monies  payable or paid by you or Sony Venturer in respect of overhead  costs
of the Venture shall be deemed  expenses of, or charged to, the Venture,  except
as specifically provided for herein (e.g.,  manufacturing and distribution costs
and marketing costs (subject to subparagraph 10(a)).

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6.  Distribution  Fee/Manufacturing.  (a) (1) The Sony Venturer shall perform or
shall cause to be performed distribution in the United States for the Venture in
a  manner  consistent  with  Parent`s  or its  Affiliates`  performance  of such
services for  similarly  situated  joint  ventures,  partnerships  or affiliated
labels of Parent.  Subject to the  provisions of this  subparagraph  6(a),  with
respect  to  the  Film  Venture,  the  fee  for  such  distribution  (the  "Film
Distribution  Fee") shall be (i) in respect of the initial Film Term, (A) 20% of
the Net  Billings  of the Film  Venture,  (B) 19%,  rather  than 20%, of the Net
Billings,  on a  prospective  basis,  solely with respect to Net Billings of the
Film Venture with respect to a particular  Film in excess of Ten Million Dollars
($10.000,000)  and  (C)  18%,  rather  than  19%,  of  the  Net  Billings,  on a
prospective basis,  solely with respect to Net Billings of the Film Venture with
respect to a particular Film in excess of Fifteen Million Dollars  ($15,000,000)
(in each owe excluding  mutually  approved co-op  advertising  costs;  provided,
however,  that,  co-op  advertising  costs  not in  excess of 3% shall be deemed
approved);  (ii) in  respect  of the  first  Option  Period,  (A) 19% of the Net
Billings of the Film Venture, (B) 18%. rather than 19%, of the Net Billings,  on
a  prospective  basis,  solely with  respect to Net Billings of the Film Venture
with respect to a particular Film in excess of Ten Million Dollars ($10,000,000)
and (C) 17%,  rather  than 18%, of the Net  Billings,  on a  prospective  basis,
solely  with  respect to Net  Billings  of the Film  Venture  with  respect to a
particular Film in excess of Fifteen Million Dollars ($15,000,000) (in each case
excluding mutually approved co-op advertising  casts;  provided,  however,  that
co-op advertising costs not in excess of 3% shall be deemed approved); and (iii)
in respect of the second Option Period,  (A) 18% of the Not Billings of the Film
Venture,  (B)17%,  rather than 18%, of the Net Billings, on a prospective basis,
solely  with  respect to Net  Billings  of the Film  Venture  with  respect to a
particular  Film in excess of Ten  Million  Dollars  ($10,000,000)  and (C) 16%,
rather than 17%,  of the Net  Billings,  on a  prospective  basis,  solely with
respect to Net Billings of the Film Venture with respect to a particular Film in
excess of Fifteen Million Dollars ($15,000,000) (in each case excluding mutually
approved co-op  advertising  costs;  provided,  however,  that co-op advertising
costs  not in  excess of 3% shall be deemed  approved).  The  Promoter  Venturer
hereby acknowledges and agrees that it is anticipated that Columbia Tristar Home
Entertainment  ("Columbia Tristar") will perform distribution,  on behalf of the
Sony  Venturer,  in the United States and/or Canada of the Home Video  embodying
the First Film.  Notwithstanding  anything herein to the contrary, (1) the terms
of the  distribution  with  respect to the Home Video  embodying  the First Film
(including,  without  limitation,  the  distribution  fee  and all  other  costs
associated  therewith)  shall be as agreed in writing  between Sony and Columbia
Tristar  (the  "Columbia  Tristar  Agreement"),  and (11) to the extent the Sony
Venturer  causes  another  Person to perform  distribution  in the United States
and/or Canada of Home Videos embodying any Film for the Film Venture,  the terms
of the  distribution  with  respect  to such  Horse  Video  (including,  without
limitation, the distribution fee and all other costs associated therewith) shall
be as agreed in  writing  between  Sony and such  other  Person  (and Sony shall
provide you with a redacted copy of such  agreement);  provided that solely with
respect to Home Videos  embodying a Film (other than the First Film),  you shall
have approval over the material terms of such distribution  agreement other than
the  distribution  fee, which approval shall not be unreasonably  withheld.  The
Sony  Venturer  shall  provide  Promoter  Venturer  with a redacted  copy of the
Columbia Tristar Agreement promptly following the full execution thereof.

         (2) With respect to the Label Venture, the fee for such distribution
(the "Label Distribution Fee"; the Label Distribution Fee and the Film
Distribution Fee are collectively referred to herein as the "Distribution Fee")
shall be (i) in respect of the Initial Label Term, (A) 20% of the Net Billings

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of the Label  Venture,  (B)19%,  rather  than  20%,  of the Net  Billings,  on a
prospective  basis,  solely with respect to Net Billings of the Label Venture in
any Contract Year in excess of Ten Million  Dollars  ($10,000;000)  and (C) 18%,
rather  than 19%,  of the Net  Billings,  on a  prospective  basis,  solely with
respect to Net Billings of the Label  Venture in any Contract  Year in excess of
Twenty Million Dollars  ($20,000,000)  (in each case excluding co-op advertising
costs);  (ii) in respect of the first Option Period, (A) 19% of the Net billings
of the Label  Venture,  (B) 19%,  rather  than 18%,  of the Net  Billings,  on a
prospective  basis,  solely with respect to Net Billings of the Label Venture in
any Contract Year in excess of Ten Million  Dollars  ($10,000,000)  end (C) 17%,
rather  than 18%,  of the Not  Billings,  on a  prospective  basis,  solely with
respect to Net Billings of the Label  Venture in any Contract  Year in excess of
Twenty Million Dollars  (320,000,000)  (in each case excluding co-op advertising
casts);  and (iii) in respect of the second  Option  Period,  (A) 18% of the Net
Billings of the Label Venture, (B) 17% rather than 18%, of the Net Billings,  on
a prospective basis, solely with respect to Net Billings of the Label Venture in
any Contract Year in excess of Ten Million  Dollars  ($10,000,000)  and (C) 16%,
rather  than 17%,  of the Net  Billings,  an a  prospective  basis,  solely with
respect to Net Billings of the Label  Venture in any Contract  Year in excess of
Twenty Million Dollars  ($20,000,000)  (in each case excluding co-op advertising
costs).

                  (b) Distribution. promotion. and other customary label
services outside the United States shall be performed by Affiliates or Licensees
of Parent an the terms and subject to the payment of the license fees set forth
on Schedule 8 hereto.

                  (c) To the extent not covered by subparagraphs 6(a) or 6(b)
above, all products, Master Recordings and other assets of the Venture, whether
tangible or intangible, of the Venture shall be exploited as the Venturer`s
shall mutually determine.

Sony will also handle all manufacturing for the Venture, which services shall be
at the prices in the U.S. equal to those charged to Sony`s  wholly-owned  record
labels for such services, as such prices may vary from time to time.

7. Accounting. Within 45 days after the close of each fiscal quarter of the
Venture, the Sony Venturer on behalf of each of the Film Venture and the Label
Venture shall cause to be prepared and submitted to each Venturer a statement of
profit and loss for such fiscal quarter. Within 90 days after the close of each
fiscal year of the Venture, the Sony Venturer on behalf of each of the Film
Venture and the Label Venture shall cause to be prepared and submitted to each
Venturer the following financial statements: (i) a balance sheet of the Film
Venture and the Label Venture, as applicable, as at the end of the fiscal year
and (ii) a statement of profit and loss for such fiscal year, which shows the
items necessary to calculate the Profits for such fiscal year. For the avoidance
of doubt, the Film Venture and the Label Venture shall be uncrossed and shall be
accounted for an a separate basis. The Promoter Venturer may, at its own
expense, examine the Sony Venturer`s books and records which report the number
of Records manufactured, the sales of Records and other transactions solely to
the extent, if at all, they relate to the calculation of Revenues, Gross
Billings and Profit of the Film Venture or the Label Venture. The Promoter
Venturer may make those examinations only for the purpose of verifying the
accuracy of the statements sent to the Promoter Venturer under this paragraph.
The Promoter Venturer may make such an examination for a particular statement
only once, and only within three (3) years after the date when the Sony Venturer

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sends such statement to the Promoter Venturer. Notwithstanding anything to the
contrary in this paragraph 7, the accounting hereunder shall be in a manner
consistent with the provisions regarding accounting contained in the Prior
Agreement.

B. LABEL VENTURE

7A. Line of Credit. (a) During the Label Term and provided that neither the
Promoter Venturer nor Principal is in default under any provision of this
agreement, Sony Venturer will loan the Label Venture the funds It needs to cover
the Label Venture`s cash needs specifically authorized in subparagraph 8(c) or
as otherwise approved in writing by Sony (the "Label Venture Loans"). The loans
will bear interest at a rate equal to the rate of interest per annum publicly
announced by the Chase Manhattan Bank in effect at its principal offices in New
York City as its "prime rate". Interest shall be calculated monthly on the
average of the amount of Label Venture Loans outstanding at the beginning and
the end of each month based en the "prime rate" as of the end of such month. The
loans will be repaid out of the first available cash of the Label Venture. The
Sony Venturer shall have no obligation to make Label Venture Loans after the
expiration or earlier termination of the Label Term, except as specifically set
forth herein with respect to Artist Term Contracts assigned to the Label Venture
pursuant to subparagraph 8(a) prior to the expiration of the Label Term.

         (b) To provide security for the repayment of the Label Venture Loans in
accordance with this agreement, the Label Venture shall and hereby does grant to
the Sony Venturer or Its designee a first lien on, and a first priority security
interest in all assets of the Label Venture, including, without limitation, a
security interest in, or collateral assignment of, the Label Venture`s interests
in any asset, whether tangible or intangible, or other property owned and/or
controlled, directly or indirectly, by the Label Venture, including, without
limitation, copyrights, Artist Agreements, Master Recordings, royalties, bank
accounts or any proceeds thereof. The Promoter Venturer hereby appoints the Sony
Venturer and its designees, and each art them, its true and lawful
attorney-in-fact and agent with full power of substitution, for the Promoter
Venturer (on behalf of the Label Venture), in any and all capacities, to sign,
deliver and file with any appropriate public or governmental office, such
mortgages, security agreements, financing statements, assignments and other
documents and instruments contemplated by this subsection. Copies of any such
documents and instruments signed, delivered or filed an behalf of the Promoter
Venturer shall be promptly provided to the Promoter Venturer.

8. Designated and Approved Artists. (a) During the Label Term, Sony Venturer
shall have the exclusive right on an artist-by-artist basis and subject in each
case to your written approval. which approval shall not be unreasonably withheld
or delayed, to require Label (including, for the avoidance of doubt, the Indie
Label) to assign, convey and/or transfer all of Label`s rights and obligations
in and to any particular recording artist (each, a "Designated Artist") whose
Records are or have been distributed under the RED P&D, to the Label Venture for
exploitation by the Label Venture. The foregoing shall include all recording
contracts, agreements, permissions and consents relating to each Approved Artist
(as defined in subparagraph 8(b) below). The Label Venture shall have the
exclusive right, throughout the world, to the services of each Approved Artist
and to exploit Master Recordings embodying the performances of each such
Approved Artist, which rights, for the avoidance of doubt, shall survive the end
of the Label Term in accordance with the Artist Term Contract (as defined below)
concerned.

                                        8
<PAGE>

     (b)  Promptly  following  Sony  Venturer`s  notice  to you of a  Designated
Artist,  you shall  deliver to Sony Venturer for its review all  agreements  and
documents  that are  reasonably  related to the  assignment  of such  Designated
Artist  to the  Label  Venture  and which are  necessary  for Sony  Venturer  to
evaluate your rights and obligations with respect to such Designated  Artist and
the  suitability of furnishing such  Designated  Artist`s  services to the Label
Venture (such agreements and documents shall include, but not be limited to, all
recording  agreements (each, an "Artist Term Contract"),  license agreements and
copies of alt payments,  option  notices).  Once Sony Venturer has  designated a
Designated  Artist  for  exploitation  by the  Label  Venture,  unless  you have
notified Sony that you do not approve the assignment of such  Designated  Artist
to the Label Venture  pursuant to subparagraph  8(a) above neither you nor Label
shall amend or modify any agreement  related to such  Designated  Artist without
Sony Venturer`s prior written consent in each instance,  which consent shall not
be unreasonably withheld or delayed. In the event Sony Venturer consents to such
amendment or  modification,  you shall  provide Sony Venturer with copies of all
correspondence,  documents  and  copies of  executed  amendments.  modifications
and/or agreement related thereto. If it is determined by Sony Venturer that such
Designated Artist Is suitable for furnishing to the Label Venture, Sony Venturer
shall give you notice of Sony`s  exercise of its right to assign such Designated
Artist to the  Venture  (the  "Assignment  Notice`),  and you shall  notify Sony
whether you approve of such assignment (each such approved Designated Artist, an
"Approved  Artist").  Such assignment shall be deemed effective (the "Assignment
Effective Date") as of the date such notice is sent by you to Sony.

     (c) You and Sony shall  mutually  determine  in good faith the terms of the
assignment to the Label Venture of the rights to each  Approved  Artist,  taking
into consideration,  among other things, your out-of-packet costs incurred prior
to the  Assignment  Effective  Date  in  connection  with  the  Approved  Artist
concerned  and all monies  received by or credited to you under the RED P&D with
respect to such Approved Artist of the Assignment  Effective Date, Sony Venturer
shall  loan  the  Label  Venture  all  monies  (including,  without  limitation,
Recording  Costs,  other Advances and  royalties)  with respect to the creation,
marketing  and   exploitation  of  Records   embodying  the  Approved   Artist`s
performances  on a  prospective  basis;  provided,  however,  there  will  be no
so-called "double recoupment".  All such costs shall be deemed an expense of the
Label  Venture.  Upon exercise of the  assignment  right by Sony  Venturer,  the
revenues  derived from the  exploitation  or  Recordings  embodying  the musical
performances   of  Approved   Artists  shall  become  subject  to  a  50/50  net
profit-spilt  arrangement  by  and  between  you  following  recoupment  of  all
Recording Costs and Advances and other payments in connection therewith (as more
particularly  described  in  paragraph  9  below)  and Sony  Venturer,  and Sony
Venturer shall supply marketing and promotion services for such Approved Artist,
subject to a mutually approved budget.

     (d) You and Label each  warrants  and  represents  that (A) for each artist
signed to Label, that there is an agreement granting artists exclusive recording
services to you (and for each artist that signs to Label  during the Label Term,
that there shall be an agreement  granting the foregoing  rights to Label);  and
(B) that none of  Label`s  artist  agreements  or the RED P&D  contain  or shall
contain any  restrictions,  limitations,  or third-party  approvals  which would
prevent Label from freely performing Label`s obligations to Sony Venturer or the
Label Venture under this paragraph 8 (including,  without limitation,  assigning
the rights to Artist`s recording services and to Artist Term Contracts) or which
would prevent the Label Venture from freely  exercising  its rights with respect
to an Approved Artist.  Label shall disclose to each artist signed to Label, the
Sony Venturers and the Label Venture`s rights under this agreement and you shall
furnish to Sony  Venturer and the Label Venture in a form  satisfactory  to Sony
Venturer documentation of such disclosure.

                                        9
<PAGE>

     (e) For the  avoidance  of doubt,  neither you nor the Label shall have the
right to put any artists to the Label Venture  (i.e.,  Sony Venturer  shall have
the right to  accept  or reject  each  Designated  Artist);  it being  expressly
acknowledged  by the you  that  the  failure  or  refusal  by Sony  Venturer  to
designate  any artist shall not be deemed or construed to be a waiver by Sony of
any of Its rights under this agreement, nor deemed to be a breach hereof.

     (f) As of the  Assignment  Effective  Date,  Sony  shall  have the right to
produce  and  alter  artwork  for the  packaging  and  advertising  of the Label
Venture`s Records  previously  released,  subject to the terms of the applicable
Artist Term Contract.  Sony shall provide the services of its in-house  Creative
Services  department  in  connection  with the  production  of  artwork  for the
packaging  and  advertising  of  the  Label  Venture`s  Records  not  previously
released.  Any mutually  agreed costs  associated  therewith  shall be deemed an
expense of the Label Venture.

     (g) (i) During the Label Term (the "First  Refusal  Period")  neither  you,
Principal or any entity  owned or  controlled  by you or Principal  ("Controlled
Entity") will furnish the services of any Designated Artist to perform or render
any  services  for the purpose of making  Records or  Recordings  for any Person
except Sony (or the India Label in accordance with the terms of this agreement),
unless:  (1) you first notify Sony of the Identities of all proposed  parties to
the agreement  pursuant to which those Records or Recordings  are to be made and
all of its Key Provisions (as defined in section (11) below),  and (2) you offer
to submit that  Designated  Artist to Sony under this  agreement an the basis of
the same Key  Provisions  described in your  notice,  if Sony accepts that offer
within 30 days of its  receipt of your  notice,  the  Designated  Artist will be
deemed an Approved  Artist under this  agreement,  on the terms described in the
preceding  sentence.  If Sony does not accept  that  offer  within 30 days after
receipt of your notice, you may then enter into that proposed agreement with the
same parties  mentioned in your notice,  provided that the  agreement  which you
enter into with those parties is upon Key  Provisions not less favorable to you,
Principal,  or the  Controlled  Entity  than those set forth in your  notice and
offer to Sony,  within 60 days after the  earlier of: (1) the end of that 30-day
period,  or (2) the date of Sony`s notice to you rejecting  your offer.  If that
agreement is not entered into within that B0-day period,  neither you, Principal
nor any Controlled Entity will furnish the services of that Designated Artist to
perform or render any services for the purpose of making  Records or  Recordings
for any Person  except Sony  during the First  Refusal  Period  unless you first
offer to enter into an agreement  with Sony as provided in the first sentence of
this paragraph.

          (ii) The term "Key  Provisions," as used in this paragraph,  means all
     provisions  regarding length of term, recording  commitment.  compensation,
     and all  other  payments  in  connection  with  such  proposed  Records  or
     Recordings  (including,  without limitation,  recording costs and recording
     budgets).

                                       10
<PAGE>

9. Label Venture  Profile.  Subject to the next  sentence,  the Label  Venture`s
distributable  positive  Profits  shall be paid 50% to Sony  Venturer and 50% to
you. No Profits shall be distributed until the line of credit has been repaid in
full  (together  with any accrued and unpaid  interest  thereon),  except as set
forth in the following sentence. Notwithstanding that the line of credit has not
been  repaid in full,  the Label  Venture  shall pay  through to you 50% of your
share  (i.e.,  25%) of the  distributable  positive  Profits  earned  from  arty
particular  Artist  Agreement;  provided  that the  account  under  such  Artist
Agreement is in a recouped position.  Thereafter Profits shall be distributed in
accordance with the first sentence of this paragraph 9. The Profits of the Label
Venture with respect to any period shall be equal to the Revenue (i.e.,  the sum
of (i) Net Billings in the U.S. for such period,  (ii) Net Matrix income outside
of the U.S.  for such  period  (calculated  as  provided  in Schedule B attached
hereto),  and (iii) all other  revenues of the Label Venture not included in the
foregoing  representing  monies actually  received by, or credited to, the Label
Venture during such period) less any and alt costs (without duplication) paid or
incurred by the Label Venture in connection  with the  acquisition,  creation or
exploitation of Master  Recordings,  Videos,  Records,  Audiovisual  Records and
other tangible and  intangible  assets of the Label Venture or otherwise paid or
incurred by the Label Venture during such period, as more specifically described
in the Basic Agreement, including, without limitation, (1) the Distribution Fee,
(2)  Manufacturing  Costs, (3) Royalty Costs, (4) Marketing Costs, (5) Recording
Costs, (6) Union Payments.

9A. Label Venture Buy-Out.  At any time (i) during the 30-day period  commencing
18 months following the date of expiration or termination of the Label Term (the
"Label  Buyout  Trigger  Date"),  or (ii) for every two year period  thereafter,
during the 30-day period  commencing on each biennial  anniversary  of the Label
Buy-Out  Trigger Date,  either  Venturer  shall have the option,  exercisable by
sending the other Venturer a notice (the "Label Buy-Out  Election  Notice"),  to
trigger the buy-out provisions of this paragraph 9A.

     (a) A Venturer (the "Label Offeror") may deliver the Label Buy-Out Election
Notice  to the other  Venturer  (the  "Label  Offeree")  and the  Label  Venture
containing  the  following  terms:  (i)  statement  of Intent to  Implement  the
buy/sell  option  pursuant to the  provisions  or this  paragraph 9A, and (ii) a
valuation stating the aggregate dollar amount (the "Label Buy/Sell Price") which
the  Label  Offeror  would be  willing  to  receive  in  exchange  for the Label
Offeror`s  interest in the Label  Venture.  The Label Offeree will then have the
obligation  either to (i)  purchase all of the Label  Offeror`s  Interest in the
Label  Venture at the Label  Buy/Sell  Price,  or (ii) sell its  interest in the
Label Venture to the Label Offeror for the Label Buy/Sell Price.  Within 30 days
after  receipt of the Label  Buy-Out  Election  Notice by the Label Offeree (the
"Label Buy-Out Option Period"), the Label Offeree shall notify the Label Offeror
as to whether  the Label  Offeree  will elect to  purchase  the Label  Offeror`s
interest  in the Label  Venture or will elect to sell its  interest in the Label
Venture to the Label  Offeror.  If the Label  Offeree  does not notify the Label
Offeror of its election  prior to the expiration of Label Buy-Out Option Period,
the Label Offeree shall for all purposes be conclusively  deemed to have elected
to sell its  interest in the Label  Venture to the Label  Offeror as provided in
this paragraph 9A..

     (b) (1) If either Venturer  purchases the other Venturer`s  Interest in the
Label Venture  pursuant to this Article 9A, then the selling Venturer shall also
be  entitled  to receive  the  balance  of all  undistributed  Profits,  if any,
attributable to his ownership interest in the Label Venture up to the end of the

                                       11
<PAGE>

last  complete   calendar  month   preceding  the  Label  Buy-Out  Closing  Date
("Termination  Date").  The Sony Venturer shall deliver to the Promoter Venturer
financial statements in order to determine the Profits  distributable to each of
the Venturers as of the  Termination  Date. At the Label Buy-Out  Closing (or as
soon as practicable after such financial  statements are delivered) the Venturer
which sold its interest  shall be entitled to receive from the Label Venture (or
the purchasing  Venturer) an amount equal to such Profits.  Additionally,  fifty
percent (50%) of any amounts  allocated to the Sony Venturer pursuant to section
16(B)(2) and not otherwise recouped pursuant to section 16(A)(2) shall be either
(i)  deducted  from the price to be, paid by the Sony  Venturer to purchase  the
Promoter  Venturer`s Interest in the Label Venture or (ii) added to the price to
be paid by the Promoter Venturer to purchase the Sony Venturer`s interest in the
Label Venture.

                  (2) If the Promoter Venturer purchases the Sony Venturer`s
interest in the Label Venture, then all outstanding Label Venture Loans
(together with any accrued and unpaid interest thereon) and all unpaid or
unreimbursed costs incurred by the Sony Venturer or its Affiliates that are
reimbursable under this agreement and any other unpaid obligations of the Label
Venture to the Sony Venturer, Parent or their Affiliates shall be due and shall
be paid or repaid to the Sony Venturer or its Affiliates by the Promoter
Venturer or otherwise at the Label Buy-Out Closing. If the Sony Venturer
purchases the Promoter Venturer`s interest in the Label Venture, then an amount
equal to all outstanding Label Venture Loans (together with any accrued and
unpaid interest thereon) and all unpaid or unreimbursed costs incurred by the
Sony Venturer or its Affiliates that are reimbursable under this agreement and
any other unpaid obligations of the Label Venture. to the Sony Venturer. Parent
or their Affiliates shall be deducted from the Label Buy/Sell Price.

                  (3) If the amount payable by the Sony Venturer would equal a
negative amount as a result of the deductions provided for in this paragraph 9A,
then the Sony Venturer shall pay $1.00 to the Promoter Venturer and such amount
shall constitute payment in full for the acquisition of all of the Promoter
Venturers interest in the Label Venture and the Sony Venturer and Parent shall
have no further obligation to the Promoter Venturer hereunder.

     (c) Label Buy-Out Closing. The closing of any purchase provided for in this
paragraph  9A (the "Label  Buy-Out  Closing")  shall be held at such time and in
such place as the  parties  may agree (such  date,  the "Label  Buy-Out  Closing
Data"); provided, however, that in no event shall the Label Buy-Out Closing Date
be later  than the  date 60 days  following  the  date  that the  Label  Buy-Out
Election  Notice  was  delivered  to the Label  Offeree.  At the  Label  Buy-Out
Closing,  the selling  Venturer  shall  execute  and  deliver to the  purchasing
Venturer  assignments  of  interest,   deeds,  bills  of  safe,  instruments  of
conveyance  and other  instruments  as the  purchasing  Venturer may  reasonably
require,  to give the purchasing  Venturer (or its designee) title to all of the
selling  Venturer`s right,  title and interest in and to the Label Venture.  The
applicable  purchase price shall be payable in cash by wire transfer of same day
funds.  If the Label Offeree  notifies the Label Offeror of its election to sell
its  interest in the Label  Venture to the Label  Offeror and the Label  Offeror
defaults in its  obligations  on the Label Buy-Out  Closing Date to purchase the

                                       12
<PAGE>

Label Offeree`s interest in the Label Venture, then the Label Offeree shall have
the option, exercisable at any time within 90 days after the failed purchase, to
purchase Label Offeror`s  interest in the Label Venture for a price equal to 50%
of the Label Buy/Sell Price.

     (d) If the Sony Venturer acquires the Promoter  Venturer`s  interest in the
Label Venture  pursuant to this paragraph 9A,  effective as of the Label Buy-Out
Closing Date the Promoter  Venturer shall have no further  consent,  approval or
consultation  rights  with  respect  to  the  Label  Venture  pursuant  to  this
agreement, any Artist Agreement and/or any other rights acquisition agreement if
the Promoter Venturer acquires the Sony Venturers  interest in the Label Venture
pursuant to this  paragraph 9A,  affective as of the Label Buy-Out  Closing Date
the Sony Venturer shall have no further consent, approval or consultation rights
with  respect  to the  Label  Venture  pursuant  to this  agreement  any  Artist
Agreement and/or any other rights acquisition agreement.

     (e) Indemnification  after Label Buy-Out.  After the Label Buy-Out Closing,
the Venturer that purchased the interest of the other  Venturer shall  indemnify
end hold  harmless the Venturer  that sold its interest in the Label Venture and
its  Affiliates  against all losses,  liabilities,  damages,  costs and expenses
(including reasonable attorneys` fees and expenses) relating to the business and
operations of the Label Venture both before and after the Label Buy-Out Closing;
provided,  that such indemnification shall not release the indemnified party for
any obligation  arising as a result of such  Indemnified  party`s breach of this
agreement.

     (f)  Post-Label  Buy-Out.  If the Sony  Venturer  sells its interest to the
Promoter  Venturer  under this  paragraph  9A,  the Sony  Venturer  will  retain
customary  record  industry  sell-off  rights in  respect  of  existing  Records
inventory  for a period of nine  months  after the Label  Buy-Out  Closing  (the
"Label Sell-Off Period"), which rights will be exclusive (solely with respect to
current  configurations  or  Records)  for the  first  six  months  of the Label
Sell-Off Period and non-exclusive thereafter,  and the parties will cooperate in
the transition (in accordance  with custom and practice in the Record  Industry,
including processing returns and credits) of the Label Venture`s distribution to
one or more third parties following the Label Buy-Out Closing.

C. FILM VENTURE

10. Home Videos and Soundtrack Albums.

     (a) Home Videos.  Sony Venturer shall have the exclusive  right  throughout
the world and in perpetuity,  to manufacture,  market,  distribute and otherwise
exploit  Home Videos in any and all  formats,  by any and all means now known or
hereinafter created, including,  without limitation, DVDs, on behalf of the Film
Venture.  You shall  deliver  each Home Video to Sony  Venturer  for a exclusive
distribution on Home Video by the Film Venture and its licensees  throughout the
world  and in  perpetuity,  by  delivering  all of the  materials  described  in
Schedule  A  hereto,  to  Sony`s  New York  City  offices,  in time  for  Sony`s
production and release schedules,  such that Sony may release each Home Video 30
days after the  initial  theatrical  release  in the  United  States of the Film
embodied  on such Home  Video.  Costs  incurred  by you in  connection  with the

                                       13
<PAGE>

production of the Films,  including but not limited to Home Videos  Delivered to
Sony Venturer, shall be deemed expenses of the Film Venture; provided,  however,
that in no event  shall (i) costs in excess of $2.5  million  (the  "First  Film
Cap") be  charged to the Film  Venture  in respect of the First Film  (including
costs  allocated  with the Home Video  embodying the First Film),  (ii) costs in
excess of $1.5 million (the "Second Film Cap") be charged to the Film Venture in
respect of the  Second  Film  (including  costs  associated  with the Home Video
embodying the Second Film), and (iii) coats in excess of $2 million with respect
to the first  Option  Period and costs in excess of $2.5 million with respect to
the second  Option Period (as  applicable,  the "Option Film Cap") be charged to
the Film Venture in respect of any Option Film (including  costs associated with
the Home Video embodying such Option Film).

     (b) Soundtrack  Albums.  (1) Sony Venturer shall have the exclusive  right,
throughout the world and in perpetuity,  to manufacture,  market, and distribute
Soundtrack  Albums (other then the soundtrack album 16 connection with the First
Film),  on behalf of the Venture.  Sony  Venturer and Principal  shall  mutually
approve the significant  elements of earn Soundtrack  Album;  provided that such
approval is not unreasonably  withheld or delayed by Principal.  Notwithstanding
the  foregoing,  Sony Venturer  shall have complete  creative  control over each
Soundtrack Album (including,  without  limitation,  the right to determine which
master  recordings are embodied  therein),  subject to Principal`s  pre-existing
third-party contractual obligations; provided, however, that Sony Venturer shall
meaningfully  consult with  Principal  (provided that Principal is available for
such consultation)  regarding such creative elements Sony Venturer, on behalf of
the Film Venture, shall pay all costs incurred by the Film Venture in accordance
with a mutually  approved budget in connection with the production and marketing
of each Soundtrack  Album, and such costs s all be deemed an expense of the Film
Venture.

         (2) In  connection  with the master  recording  owned or controlled by
Sony Venturer that is licensed by the Film Venture for inclusion on a Soundtrack
Album,  the Film Venture shall be charged  license rates  consistent  with those
rates  charged  to  unaffiliated  third  parties  for the master  concerned  for
comparable  projects.  In  connection  with  each  roaster  recording  owned  or
controlled  by a third party that is licensed by the Film Venture for  inclusion
on a Soundtrack  Album,  the Sony Venture shall pay all licensing fees on behalf
of the Film  Venture  and such  fees  shall be  deemed  an  expense  of the Film
Venture.

         (c) (1) Provided you have fulfilled all your material obligations under
this agreement, Sony, on behalf of the Film Venture, shall release the Home
Video in respect of the First Film (the "First Home Video") in thin United
States within 3 months following the initial commercial release in the United
States of the First Film. If Sony fails to do so you may notify Sony, within 60
days after the and of the 3 month period concerned, that you intend to terminate
the Film Term unless Sony releases the First Home Video within 60 days after
Sony`s receipt of your notice (the "First Video Cure Period"). If Sony falls to
release the First Home Video in the United States before the end of the First
Video Cure Period you may terminate the Film Term by giving Sony notice within
30 days after the ,end of the First Video Cure Period. On receipt by Sony of
your termination notice, the Film Term shall end and all parties shall be deemed
to have fulfilled all of their obligations hereunder except those obligations
which survive the end of the Film Term. Your only remedy for failure by Sony to
release the First Home Video in the United States shall be termination in
accordance with this section 10(c)(1). If you fail to give Sony either of the
notices described in the foregoing provisions of this section 10(c)(1), within
the time periods specified, your right to terminate shall lapse.

                                       14
<PAGE>

     (2) (A) Provided you have  fulfilled  all your material  obligations  Under
this  agreement,  Sony, on behalf of the Film  Venture,  shall release each Home
Video  (other  than the First Home Video) in the United  States  within a months
following  the  Initial  commercial  release  in the  United  States of the Film
embodied on such Home Video. If Sony fails to do so you may notify Sony,  within
60 days  after  the end of the 3 month  period  concerned,  that you  intend  to
release or license that Home Video in the United States if Sony does not release
that Home Video in the in the United States within 60 days after Sony`s  receipt
of your notice ("Cure  Period").  If Sony fails to release the Home Video before
the end of the Cure Period in the in the United States, you shall have the right
to release or enter into an agreement  for the release of such Home Video in the
United States with a third party licensee on terms and conditions to be approved
by the Sony  Venturer  (the  "Outside  Licensing  Right").  If you exercise your
Outside  Licensing  Right  and you  distribute  any Home  Video,  then you shall
promptly  reimburse Sony for any  out-of-pocket  costs actually incurred by Sony
with respect to such Home Video (end for the  avoidance of doubt,  other than as
specifically  set  forth  herein  Sony  shell  not be  entitled  to share in the
proceeds  of the  distribution  of such  Home  Video or any other  revenue  with
respect to the applicable Film embodied  thereon).  If you exercise your Outside
Licensing  Right and a third party licensee  distributes any Home Video then (A)
you shall promptly reimburse the Film Venture for master use costs actually paid
or incurred by the Film  Venture in respect of such Home Video,  and (B) if Sony
has incurred-marketing costs equal to or in excess of $40,000 in respect of such
Home Video,  an additional 50% of Promoter  Venturer`s net revenue in respect of
such Home Video shall be paid to the Film Venture.  Your only remedy for failure
by Sony to release a Home Video in the United  States shall be to exercise  your
Outside Licensing Right in accordance with this subsection  10(c)(2)(A).  If you
fall to give Sony any of the notices  described in the  foregoing  provisions of
this subsection 10(c)(2)(A) within the appropriate time period specified in this
agreement,  your rights Under this  subsection  10(c)(2)(A)  shall lapse. A Home
Video shall be deemed released.  for the purposes of this subsection 10(c)(2)(A)
only, when Sony has announced its availability or sale.

           (B) If  Sony  fails  to  comply  with  the  first  sentence  of
subsection  10(c)(2)(A)  in  respect of two  consecutive  Home  Videos,  you may
terminate  the Film Term by giving Sony  notice  within 30 days after the end of
the Cure  Period with  respect to the second Home Video not  released by Sony on
receipt  by Sony of your  termination  notice,  the Film Term  shall end and all
parties  shall be deemed to have  fulfilled all of their  obligations  hereunder
except those obligations which survive the end of the Film Term.

     (3) Provided you have  fulfilled all your material  obligations  under this
agreement, Sony, on behalf of the Film Venture, shall release each Home Video in
each territory  (other than the United  States)  within 3 months  following your
written  request to Sony to release the Home Video  concerned  in the  territory
concerned (each such territory,  a "Release  Territory"),  but in no event shall
Sony be obligated to release a Home Video in any territory outside of the United
States  earlier than 3 months  following the initial  commercial  release in the
United  States of the Film  embodied on such Home Video.  If Sony fails to do so
you may  notify  Sony,  within  60  days  after  the  end of the 3 month  period
concerned,  that you intend to release or license that Home Video in the Release
Territory  concerned  if Sony does not  release  that  Home  Video in the in the
Release  Territory  concerned within 60 days after Sony`s receipt of your notice
("Release  Territory  Cure  Period").  If Sony fails to  release  the Home Video
before the end of the Release  Territory  Cure  Period in the Release  Territory
concerned, you shad have the right to release or enter into an agreement for the
release  of  such  Horne  Video  in  the  Release  Territory  concerned  with  a

                                       15
<PAGE>

third-party  licensee an terms and  conditions to be reasonably  approved by the
Sony Venturer (the  "Release  Territory  Outside  Licensing  Right").  Your only
remedy for  failure by Sony to  release a Home  Video in any  Release  Territory
shall  be  to  exercise  your  Release  Territory  Outside  Licensing  Right  in
accordance  with  this  section  10(c)(3).  If you fail to give  Sony any of the
notices  described in the foregoing  provisions of this section  10(c)(3) within
the appropriate time period specified in this agreement,  your rights under this
section 10(c)(3) shall lapse.

        (d)   Sony shall notify you no later than 3 months prior to the proposed
initial  theatrical  release of each Film (other than the First Film)  (each.  a
"Proposed Film Release Date") if Sony does not intend to manufacture, market and
distribute  a  Soundtrack  Album in  respect  of a  particular  Film;  provided,
however,  that you have  notified  Sony of the  Proposed  Film Release Date with
respect to such Film at least 4 months prior to such Proposed Film Release Date;
provided  further that if you have  notified  Sony of the Proposed  Film Release
Date with  respect to such Film more than 4 months prior to such  Proposed  Film
Release  Date,  then Sony shall so notify you no later than 30 days after Sony`s
receipt of your notice of the Proposed  Film Release  Date. If Sony notifies you
that It does not intend to manufacture, market and distribute a Soundtrack Album
in  respect of a  particular  Film,  then you may  authorize  another  Person to
manufacture,  market and distribute such Soundtrack  Album. If Sony notifies you
that it intends to  manufacture,  market and  distribute a  Soundtrack  Album in
respect of a particular  Film, then you and Sony shall coordinate the release of
the Film and the Soundtrack Album in respect of such Film.

11.  Marketing and Funding  Obligations.  (a) For the  avoidance of doubt.  Sony
Venturer shall not be responsible for paying or  contributing  any monies to you
or an behalf of the Film  Venture  (including,  without  limitation,  any profit
advances,  loans, overhead,  production or salary costs), except marketing costs
in respect of Home Videos as specifically set forth in subparagraph 11(c) below.

         (b) (1) The Promoter Venturer shall have responsibility for and agrees
to undertake all activities  relating to the marketing,  publicity and promotion
of Films on behalf of the Film Venture, subject to any marketing fund budget set
forth to the Plan and the limitations  set forth in the next sentence.  Prior to
undertaking  any such  marketing,  publicity or promotion  activities or related
expenditures,  the Promoter  Venturer  will  consult  with the Sony  Venturer in
respect of a detailed  marketing  campaign  outline  with  respect to each Film,
covering,   among   other   things,   home  video   production,   advertisement,
merchandising and promotion expenses and plans.

                  (2) The Sony Venture shall have responsibility for and agrees
to undertake all activities  relating to the marketing,  publicity and promotion
of Home Videos and  Soundtrack  Albums on behalf of the Venture,  subject to the
limitations  set forth in subparagraph  11(c).  Sony shall consult with Promoter
Ventures in respect of all significant  elements of Sony`s marketing plan in the
United  States in  respect  of each Home  Video and  Soundtrack  Album  released
hereunder; provided that Promoter Venturer is available for such consultation.

                                       16
<PAGE>

     (c) You shall pay all production and marketing casts in connection with the
Films (the "PV Amount").  In respect of the First Film, actual coats incurred by
you not in  excess of the First  Film Cap shall be deemed  expenses  of the Film
Venture, unless a higher amount is preapproved by Sony in writing. In respect of
each Film  (other  than the First  Film),  actual  costs  incurred by you not in
excess of the Second Film Cap (or the Option Film Cap, as  applicable)  shall be
deemed  expenses of the Film Venture,  unless a higher amount is pre-approved by
Sony in  writing.  Sony  shall pay on behalf of the Film  Venture  out-of-pocket
marketing  costs in  connection  with Home Videos  embodying  each of Film (such
costs together with all other costs paid by Sony hereunder,  the "Sony Amount").
All such costs  incurred by Sony shall be deemed  expenses of the Film  Venture.
For the avoidance of doubt,  you shall be solely  responsible for all other Film
Venture costs (including,  without limitation,  overhead costs and salary costs)
except as  specifically  set forth in  subparagraph  10(b)  above and  excluding
manufacturing and distribution costs.

12.  Home  Video   Royalties.   Subject  to  (a)  Sony  Venturer`s   receipt  of
documentation satisfactory to Sony Venturer and (b) each Venturer`s pre-approval
of such costs in each  instance,  the Film Venture  will pay actual  third-party
royalty costs (including artist and producer royalties and synchronization fees,
if any) in connection with Home Videos  distributed  hereunder,  but in no event
shall (i) any such costs be payable to Promoter  Venturer or Principal,  or (ii)
any such costs be payable prior to the Breakeven  Point (as defined in paragraph
15 below) with respect to the Film concerned.

13.  Sony  Tracks.  Sony  Venturer  shall  license  to the Film  Venture  master
recordings  owned or controlled by Sony Venturer  solely for inclusion in a Film
(other  than  the  First  Film),  on Home  Videos  embodying  such  Film and the
Soundtrack Album released in connection therewith;  provided,  however, that the
artist concerned  consents to such license.  Sony Venturer shall charge the Film
Verdure  licensing fees in connection  therewith at a mutually  determined  rate
consistent  with the rates charged by Sony to other third parties for comparable
projects.  Sony  Venturer  will use best  reasonable  efforts  to  refrain  from
licensing master  recordings owned or controlled by Sony Venturer  embodied on a
Soundtrack  Album  hereunder  to any Person  other than the Film  Venture  for 6
months  following  the  initial  commercial  release  of  the  Soundtrack  Album
concerned;  provided,  however,  that in no event shall Sony`s failure to comply
with this sentence be deemed a breach of this agreement.

14.  Holdback.  You shall not  license,  release  or cause  the  release  of any
television  broadcasts  embodying a Film, in whole or in part, prior to the date
that is 6 months after the date of the initial  release in the United  States of
the Home Video released by Sony in connection with the Film concerned.

15. Film Venture Net Profits.  Subject to the next sentence,  in respect of each
Film  (including the Home Video  embodying  such Film and the  Soundtrack  Album
associated therewith),  the Film Venture`s  distributable positive Profits shall
be paid as follows: (x) to Sony Venturer an amount equal to the total Profits in
respect of such Film  multiplied  by a fraction,  the  numerator of which is the
aggregate Sony Amount in respect of such Film,  and the  denominator of which is
the sum of (i) the aggregate Sony Amount in respect of such Film and (ii) the PV
Amount in  respect of such Film  (provided,  however,  in no event  shall the PV
Amount exceed for purposes of this  paragraph 16 more than, as  applicable,  the
First Film Cap,  the  Second  Film Cap or the  Option  Film Cap (the  "Capped PV

                                       17
<PAGE>

Amount"), and (y) to you an amount equal to the total Profits in respect of such
film multiplied by a fraction, the numerator of which is the Capped PV Amount in
respect  of  such  Film,  and the  denominator  of  which  is the sum of (i) the
aggregate  Sony  Amount in respect of such Film and (ii) the Capped PV Amount in
respect of such Film until such time (the  "Breakeven  Point") that (a) Sony has
recovered the aggregate Sony Amount in respect of such Film  previously  paid by
Sony on behalf of Film Venture, and (ii) you have recovered the Capped PV Amount
in respect of such Film previously paid by you on behalf of Film Venture.  After
the Breakeven Point has been reached, the Film Venture`s  distributable positive
Profits in respect  of such Film  shall be paid fifty  percent  (50%) to you and
fifty percent (50%) to Sony Venturer,  for the avoidance of doubt, the fact that
one or more of the Films is unrecouped shall not affect the Profits payable with
respect to any other Film.  The Profits of the Film  Venture  with  respect to a
particular  Film (or Horne Video  embodying such Film and the  Soundtrack  Album
released in connection  therewith)  with respect to any period shall be equal to
the Revenue in respect of such Film  (including  the Home Video  embodying  such
Film and the Soundtrack  Album associated  therewith)  (i.e., the sum of (i) Net
Billings in the U.S. for such period, (ii) Net Matrix Income outside of the U.S.
for such period  (calculated  as provided  in Schedule B attached  hereto),  and
(iii) all other  revenues  of the Film  Venture not  included  in the  foregoing
representing  monies  actually  received  by, or credited  to, the Film  Venture
during such period) less any and all actual costs (without  duplication) paid or
incurred by the Film Venture  with  respect to a particular  Film (or Home Video
embodying such Film and the soundtrack  Album released in connection  therewith)
in  connection  with  the  acquisition,   creation  or  exploitation  of  Master
Recordings,   Videos.  Records,  Audiovisual  Records  and  other  tangible  and
intangible  assets of the Film Venture or otherwise paid or incurred by the Film
Venture  during  such  period,  as  more  specifically  described  in the  Basic
Agreement,   including,  without  limitation,  (1)  the  Distribution  Fee,  (2)
Manufacturing Costs, (3) Royalty Costs, (4) Union Payments;  Provided,  however.
such costs shall not, include the Capped PV Amounts or the Sony Amount.  For the
avoidance of doubt,  you shall be solely  responsible for any amount incurred an
behalf of the Film Venture in excess of the sum of the Sony Amount and Capped PV
Amount.

15A. Film Venture Buy-Out.  At any time (i) during the 30-day period  commencing
18 months  following the date of expiration or termination of the Film Term (the
"Film  Buy-Out  Trigger  Date"),  or (ii) for every two year period  thereafter,
during the 30-day period  commencing on each  biennial  anniversary  of the Film
Buy-Out  Trigger Date,  either  Venturer  shall have the option,  exercisable by
sending the other  Venturer a notice (the "Film Buy-Out  Election  Notice"),  to
trigger the buy-out provisions of this paragraph 15A.

     (a) A Venturer (the "Film  Offeror") may deliver the Film Buy-Out  Election
Notice to the other Venturer (the TOM Offeree") and the Film Venture  containing
the following  terms:  (i) statement of intent to implement the buy/sell  option
pursuant to the provisions of this  paragraph 15A, and (ii) a valuation  stating
the aggregate  dollar amount (the "Film Buy/Sell  Price") which the Film Offeror
would be willing to receive in exchange for the Film  Offeror`s  interest in the
Film  Venture.  The Film  Offeree  will then have the  obligation  either to (i)
purchase  all of the Film  Offeror`s  interest  in the Film  Venture at the Film
Buy/Self  Price,  or (ii)  sell its  interest  in the Film  Venture  to the Film
Offeror for the Film  Buy/Sell  Price.  Within 30 days after receipt of the Film
Buy-Out  Election Notice by the Film Offeree (the "Film Buy-Out Option Period"),
the Film  Offeree  shall  notify the Film Offeror as to whether the Film Offeree
will elect to purchase  the Film  Offerees  interest in the Film Venture or will
elect to call its interest in the Film Venture to the Film Offeror.  If the Film

                                       18
<PAGE>

Offeree does not notify the Film Offeror of its election prior to the expiration
of Film  Buys-out  Option  Period,  the Film  Offeree  shell for all purposes be
conclusively  deemed to have elected to sell its interest in the Film Venture to
the Film Offeror as provided in this paragraph 15A.

     (b) (1) If either Venturer  purchases the other  Venturers  interest in the
Film Venture  pursuant to this Article 15A, then the selling Venturer shall also
be  entitled  to receive  the  balance  of all  undistributed  Profits,  if any,
attributable to its ownership  interest in the Film Venture up to the end of the
last  complete   calendar  month   preceding  the  Film  Buy-Out   Closing  Date
("Termination  Date").  The Sony Venturer shall deliver to the Promoter Venturer
financial statements in order to determine the Profits  distributable to each of
the Venturers as of the  Termination  Date.  At the Film Buy-Out  Closing (or as
soon as practicable after such financial  statements are delivered) the Venturer
which sold its  interest  shall be entitled to receive from the Film Venture (or
the purchasing  Venturer) an amount equal to such Profits.  Additionally,  fifty
percent (50%) of any amounts allocated to the Sony Venturer pursuant to section
16(B)(2) and not otherwise recouped pursuant to section 16(A)(2) shall be either
(i)  deducted  from the price to be paid by the Sony  Venturer to  purchase  the
Promoter  Venturer`s  interest in the Film Venture or (ii) added to the price to
be paid by the Promoter Venturer to purchase the Sony Venturers  interest in the
Film Venture.

           (2) If the amount payable by the Sony Venturer would equal a
negative  amount as a result of the  deductions  provided for in this  paragraph
15A,  then the Sony Venturer  shall pay $1.00 to the Promoter  Venturer and such
amount  shall  constitute  payment  in full  for the  acquisition  of all of the
Promoter  Venturer`s  interest in the Film Venture  and.  the Sony  Venturer and
Parent shall have no further obligation to the Promoter Venturer hereunder.

     (c) Film Buy-Out Closing.  The closing of any purchase provided for in this
paragraph,  15A (the "Film Buy-Out  Closing")  shall be held at such time and in
such place as the  parties  may agree  (such  data,  the "Film  Buy-Out  Closing
Date"); provided,  however, that in no event shall the Film Buy-Out Closing Date
be later than the date 60 days following the date that the Film Buy-Out Election
Notice was  delivered  to the Film  Offeree.  At the Film Buy-Out  Closing,  the
selling   Venturer  shall  execute  and  deliver  to  the  purchasing   Venturer
assignments  of interest,  deeds,  bills of sale,  instruments of conveyance and
other instruments as the purchasing Venturer may reasonably require, to give the
purchasing  Venturer (or its  designee)  title to all of the selling  Venturer`s
right,  title and Interest in and to the Film Venture.  The applicable  purchase
price shall be payable in each by wire  transfer of same day funds.  If the Film
Offeree  notifies  the Film  Offeror of its election to sell its interest in the
Film  Venture  to  the  Film  Offeror  and  the  Film  Offeror  defaults  in its
obligations  on the Film Buy-Out  Closing  Date to purchase  the Film  Offeree`s
interest  in the Film  Venture,  then the Film  Offeree  shall have the  option,
exercisable  at any time within 90 days after the failed  purchase,  to purchase
Film Offeror`s interest in the Film Venture for a price equal to 50% of the Film
Buy/Sell Price.

     (d) If the Sony Venturer acquires the Promoter  Venturer`s  Interest in the
Film Venture  pursuant to this paragraph  15A.  effective as of the Film Buy-Out
Closing Date the Promoter  Venturer shall have no further  consent,  approval or
consultation  rights with respect to the Film Venture pursuant to this agreement
and/or any other rights acquisition  agreement if the Promoter Venturer acquires
the Sony Venturer`s interest in the Film Venture pursuant to this paragraph 15A,
effective as of the Film Buy-Out  Closing Date the Sony  Venturer  shall have no

                                       19
<PAGE>

further  consent,  approval  or  consultation  rights  with  respect to the Film
Venture  pursuant  to  this  agreement  and/or  any  other  rights   acquisition
agreement.

     (e) Indemnification after Film Buy-Out. After the Film Buy-Out Closing, the
Venturer that purchased the interest of the other  Venturer shall  indemnify and
hold  harmless the  Venturer  that sold its interest in the Film Venture and its
Affiliates  against  all  losses,  liabilities,   damages,  costs  and  expenses
(including reasonable attorneys` fees and expenses) relating to the business and
operations  of the Film Venture both before and after the Film Buy-Out  Closing;
provided that such  indemnification  shall not release the indemnified party for
any obligation  arising as a result of such  indemnified  party`s breach of this
agreement.

     (f)  Post-Film  Buy-Out.  If the Sony  Venturer  sells its  Interest to the
Promoter  Venturer  under this  paragraph  15A,  the Sony  Venturer  will retain
customary  record  industry  sell-off  rights in  respect  of  existing  Records
Inventory for a period of nine months after the Film Buy-Out  Closing (the "Film
Sell-Off  Period"),  which  rights will be  exclusive  (solely  with  respect to
current configurations of Records) for the first six months of the Film Sell-Off
Period and  nonexclusive  thereafter,  and the  parties  will  cooperate  in the
transition  (in  accordance  with custom and  practice  in the Record  Industry,
including processing returns end credits) of the Film Venture`s  distribution to
one or more third. parties following the Film Buy-Out Closing.

D. TAX MATTERS

16.      Tax-allocations

Except  as  provided in this Section D, paragraph 17, Film Venture Net Income or
Net  Loss  should  be  allocated  pro-rata  according to the allocations of Book
Profits  and  Losses  according  to  Section  C,  paragraph  15.A)

A) Net Income from the Label  Venture for any tax year will be  allocated to the
Venturers as follows:

          1.   First,  to each  Venturer  having  an  adjusted  capital  account
               deficit (as defined in Regulation Section  1.704-1(b)(2)(11)(d)),
               in  proportion  to and to the  extent  of  such  capital  account
               deficit;

          2.   Second, to the Sony Venturer to onset losses previously allocated
               pursuant 18(B)(2) and not otherwise  previously recouped pursuant
               to this section 10(A)(2).

          3.   Third, 50% to the Sony Venturer and 50% to the Promoter Venturer.

B) Net Loss for the  Label  Venture  for any tax year will be  allocated  to the
Venturers as follows:

          1.   First, 50% to the Sony Venturer and 50% to the Promoter  Venturer
               until the Promoter Venturer`s Capital Account is reduced to zero;
               and

          2.   Second, 100% to the Sony Venturer.

                                       20
<PAGE>

Net Income and Net Loss: the net Income and net loss of the Venture, in each
case, determined in accordance with the same principles employed in determining
the Venture`s taxable income for U.S. Federal income tax purposes, taking into
account the full amount of any recognized gains and all items of expanse
including the full amount of all recognized losses. For purposes of this
computation, taxable income shall include every item requiring a separate
computation under section 702(e) of the Internal Revenue Code ("IRC") and shall
include any item not deductible for tax purposes and not includible for tax
purposes.

17.      Special Allocations

(a)  The Venture shall maintain a separate  Capital Account for each of the Sony
     Venturer and the Promoter  Venturer in accordance  with IRC Section  704(b)
     ("Capital  Account").  In  addition,  the  provisions  of  the  Regulations
     promulgated  under Code Section 704(b) relating to qualified income offset,
     minimum gain  chargeback,  minimum gain chargeback with respect to Venturer
     nonrecourse  debt,  the  allocation  or  nonrecourse   deductions  and  the
     allocation of items of  deduction,  loss,  or  expenditure  relating to the
     Venturer nonrecourse debt are hereby incorporated by reference and shall be
     applied to the  allocation  of  Venture  items of income,  gain,  loss,  or
     deduction in the manner provided in such Regulations.

(b)  As a contribution to the capital of the Venture,  the Sony Venturer and the
     Promoter  Venturer  shall each transfer to the Venture One Hundred  Dollars
     ($100).  In exchange  therefor,  each of the Sony Venturer and the Promoter
     Venturer  shall  receive  50% of the equity  interest in the  Venture.  For
     capital  account  maintenance  purposes,  any film and/or artist  contracts
     contributed to the partnership will have a fair market value of zero.

(c)  To the extent an  adjustment to the adjusted tax basis of any Venture asset
     pursuant to section  734(b) of the Code or 743(b) of the Code is  requited,
     pursuant  to  Regulations  section  1.704-1(b)(2)(iv)(m)(2)  or  Regulation
     section  1.704.1(b)(2)(iv)(m)(4),  to be taken into account in  determining
     Capital  Accounts as the result of a distribution to a Venturer in complete
     liquidation of his interest in the Venture,  the amount of such  adjustment
     to the  Capital  Accounts  shall  be  treated  as an item  of gain  (if the
     adjustment  decreases  the basis of the  asset) or loss (if the  adjustment
     decreases such basis) and such gain or loss shall be specifically allocated
     to the Venturers in accordance  with their  interests in the Venture in the
     event that Regulations Section  1.704-1(b)(2)(iv)(m)(2)  applies, or to the
     Venturers to whom such  distribution was made in the event that Regulations
     Section 1.704-1(b)(2)(iv)(m)(4) applies.

18.      Tax Matters

(a)  The Sony Venturer shall be the patty designated to receive all notices from
     the  Internal  Revenue  Service  which  pertain  to the tax  affairs of the
     Venture.  The Sony  Venturer  shall be designated  the Tax Matters  Partner
     under  the  Code,  with all the  rights,  duties,  powers  and  obligations
     provided for in sections 6221 through 6233, inclusive, of the Code.

(b)  The Sony  Venturer  shall  prepare or cause to be prepared on behalf of the
     Venture all tax returns or reports and upon request shall forward copies of

                                       21
<PAGE>

     all such tax returns or reports to the Promoter  Venturer.  For purposes of
     filling their tax returns,  each of the Sony Venturer and Promoter Venturer
     agree to treat items  relating to the Venture in a manner  consistent  with
     the  treatment  of such  item on any tax  return  or  report  filed  by the
     Venture.

(c)  The Sony  Venturer  shall  determine  and make  any and all  elections  for
     federal,  state, local and foreign tax purposes,  without  limitation,  any
     election,  if permitted by  applicable  law to adjust the basis of Property
     pursuant to Code Sections 754, 734(b). and 743(b).

This agreement has been entered into in the State of New York, and the validity,
interpretation  and legal affect of this agreement shall be governed by the laws
of  the  State  of  New  York applicable to contracts entered into and performed
entirely  within the State of New York, with respect to the determination of any
claim,  dispute  or  disagreement  which  may  arise  out of the interpretation,
performance  or  breach  of  this  agreement.

                                        Very truly yours,

                                        SONY MUSIC, a Group of Sony Music
                                        Entertainment Inc.

                                        By
                                           ------------------------------------
                                           Ron Wilcox
                                           EVP, BA & NT, SMEI
                                           SVP, BA & ADM., Sony Music, a Group
                                           of SMEI
ACCEPTED AND AGREED:
RUFFNATION FILMS, LLC

By
  ---------------------------------

(Indie Label)
(with respect to paragraphs 3 and 8)

By
  ---------------------------------

-----------------------------------
CHRISTOPHER SCHWARTZ
(with respect to paragraph 4)

Taxpayer identification number (special security number or employer
identification number __________________. Under the penalties of perjury,
certify that this information is true and complete.

                                    ---------------------------
                                    For RUFFNATION FILMS, LLC

                                       22
<PAGE>

                        ASSENT AND GUARANTY OF PRINCIPAL

To induce Sony to enter into the foregoing agreement (the "Joint Venture
Agreement") with RuffNation Films, LLC (the "Promoter Venturer"):

1. Christopher Schwartz (the "Principal"):

         (a) represents to Sony that he has read the Joint Venture Agreement and
has consulted with or has had the opportunity to consult with a lawyer chosen by
him for the purpose of having the legal effect of each of the provisions
contained in the Joint Venture Agreement explained to him;

         (b) assents to the execution of the Joint Venture Agreement and agrees
to be bound by all grants, restrictions, and other provisions of the Joint
Venture Agreement relating to the Principal;

         (c) acknowledges that neither Sony nor the Venture shall have any
obligation to make any payments to the Principal in connection with the
submission of artists by the Principal or the production and/or marketing
services rendered by the Principal or the fulfillment of the Principal`s other
obligations under the Joint Venture Agreement; and

         (d) agrees that if during the Term RuffNation Films, LLC ("Promoter
Venturer") shall cease to be entitled to furnish any of Principal`s services as
contemplated by the Joint Venture Agreement, Principal shall, at the Sony
Venturer`s (or the Venture`s) request, take all such steps and actions as shall
give to the Sony Venturer (or the Venture) the same rights, privileges and
benefits as the Sony Venturer (or the Venture) would have had under the Joint
Venture Agreement and such rights, privileges and benefits shall be enforceable
on the Sony Venturer`s (or the Venture`s) behalf against the Principal and all
the terms and conditions contained in the Joint Venture Agreement shall be
effective.

2. (a) The Principal:

                  (1) guarantees, absolutely and unconditionally, the full
performance by the Promoter Venturer of all of the Promoter Venturers
representations, warranties, and obligations under the Joint Venture Agreement;

                  (2) agrees to Indemnify and hold Sony and the Venture harmless
from any loss, damage, liability or expense (including but riot limited to
attorneys` fees and legal expenses) which arise from any failure by the Promoter
Venturer to fulfill the Promoter Venturer`s representations, warranties, or
obligations under the Joint Venture Agreement, or which are incurred by Sony or
the Venture in the enforcement of Sony or the Venture`s rights under this
guaranty of the Joint Venture Agreement as they apply to the Promoter Venturer);
and

                  (3) shall notify Sony and, if applicable, the Venture promptly
in writing if the Promoter Venturer shall cease to be entitled to Principal`s
production services.

<PAGE>

         (b) The Principal`s liability under this guaranty Is direct and
immediate, and is not conditioned upon the pursuit by Sony or the Venture of any
remedy Sony or the Venture may have against the Promoter Venturer. This guaranty
shall not be revocable at any time or for any reason, including. without
limitation, any modification of the Joint Venture Agreement with or without
notice to the Principal. No failure by Sony or the Venture to exercise any of
Sony`s or the Venture`s rights shall operate as a waiver of those rights or any
other rights or remedies.

As of September 20, 2002

                                       --------------------------
                                       CHRISTOPHER SCHWARTZ

                                       SONY MUSIC, a Group of Sony Music
                                       Entertainment Inc.

                                        By
                                          -----------------------------------
                                           Ron Wilcox
                                           EVP, BA & NT, SMEI
                                           SVP, BA & ADM., Sony Music, a Group
                                           of SMEI

<PAGE>

<PAGE>

                                                                      Exhibit A

                             JOINT VENTURE AGREEMENT

                                     BETWEEN

                                   SONY MUSIC,
                                   A GROUP OF
                         SONY MUSIC ENTERTAINMENT, INC.

                                       AND

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

                           DATED AS OF _________, 2003

<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                              <C>
1.  DEFINITIONS...................................................................................................1
         1.01     Definitions in this Joint Venture Agreement.....................................................1
         1.02     Other Definitional Provisions..................................................................11

2.  FORMATION OF THE VENTURE.....................................................................................11
         2.01     Purpose and Formation..........................................................................11
         2.02     Name...........................................................................................12
         2.03     Principal Office...............................................................................12
         2.04     Limited Liability Company......................................................................12
         2.05     Contributions to the Venture...................................................................12

3.  TERM OF THE VENTURE..........................................................................................12
         3.01     Term...........................................................................................12
         3.02     Option Periods.................................................................................12

4.  MANAGEMENT...................................................................................................13
         4.01     General........................................................................................13
         4.02     Promoter Venturer Responsibilities and Authority...............................................16
         4.03     Sony Venturer Responsibilities and Authority...................................................20
         4.04     Employment Agreement...........................................................................22
         4.05     Business Plan; Management Reporting............................................................22

5.  FINANCE......................................................................................................22
         5.01     Fiscal Year....................................................................................22
         5.02     Budgets and Expenditures.......................................................................22
         5.03     Venture Loans..................................................................................22
         5.04     Profit Advances................................................................................22
         5.05     Books and Records..............................................................................22
         5.06     Financial Statements...........................................................................22

6.  ARTIST AGREEWNTS; RECORDING PROCEDURES.......................................................................22
         6.01     Artist Agreements..............................................................................22
         6.02     Flow-Through Clause............................................................................22
         6.03     Studio Selection...............................................................................22
         6.04     Delivery of Master Recordings..................................................................22
         6.05     Compliance with Other Requirements.............................................................22
         6.06     Obscenity and Violence.........................................................................22

7.  RIGHTS IN RECORDINGS.........................................................................................22
         7.01     Ownership of Rights............................................................................22
         7.02     Copyright Registration.........................................................................22
         7.03     Power of Attorney..............................................................................22

8.  MANUFACTURING AND DISTRIBUTION...............................................................................22
         8.01     Manufacturing..................................................................................22
         8.02     Distribution...................................................................................22
         8.03     Label Services.................................................................................22
         8.04     Other Services.................................................................................22

                                      (i)
<PAGE>

9.  BUY-OUT OPTION...............................................................................................22
         9.01     Buy-out Option.................................................................................22
         9.02     Payments and Recoupment of Advances and Loans..................................................22
         9.03     Buy-out Closing................................................................................22
         9.04     Acquisition of Promoter Venturer`s Interest....................................................22
         9.05     Indemnification after Buy-out..................................................................22
         9.06     Post-Buyout....................................................................................22

10.  CERTAIN AGREEMENTS..........................................................................................22
         10.01    Exclusivity....................................................................................22
         10.02    Affiliated Transactions........................................................................22
         10.03    Life Insurance.................................................................................22

11.  CAPITAL ACCOUNTS............................................................................................22
         11.01    Establishment of Accounts......................................................................22
         11.02    Withdrawal.....................................................................................22
         11.03    Provision of Services..........................................................................22
         11.04    Allocations of Net Income......................................................................22
         11.05    Allocation of Loses............................................................................22
         11.06    Special Allocations............................................................................22
         11.07    Calculation and Distribution of Profits........................................................22

12.  TAX MATTERS.................................................................................................22
         12.01    Tax Matters Partner............................................................................22
         12.02    Tax Returns....................................................................................22
         12.03    Tax Status.....................................................................................22
         12.04    Tax Obligations................................................................................22
         12.05    Section 754 Election...........................................................................22

13.  SUSPENSION AND FORCE MAJEURE................................................................................22
         13.01    Suspension by the Sony Venturer................................................................22
         13.02    Force Majeure..................................................................................22

14.  TERMINATION OF VENTURE......................................................................................22
         14.01    Termination....................................................................................22
         14.02    Right to Initiate Buy-out......................................................................22
         14.03    Liquidation and Distribution...................................................................22
         14.04    Promoter Venturer Obligations with Respect to Certain Terminations.............................22
         14.05    Continuation of Venture After Expiration of the Term...........................................22

15.  REPRESENTATIONS AND WARRANTIES..............................................................................22
         15.01    Representations and Warranties of the Sony Venturer............................................22
         15.02    Representations and Warranties of the Promoter Venturer........................................22

                                      (ii)
<PAGE>

16.  INDEMNIFICATION.............................................................................................22
         16.01    Indemnification by the he Promoter Venturer....................................................22

17.  TRANSFER AND CHANGE OF CONTROL..............................................................................22
         17.01    Transfer of Venture Interests..................................................................22
         17.02    Change Control of Promoter Venturer............................................................22

18.  MISCELLANEOUS...............................................................................................22
         18.01    Confidentiality................................................................................22
         18.02    Titles and Headings............................................................................22
         18.03    Entire Agreement...............................................................................22
         18.04    Notices........................................................................................22
         18.05    Agreements, Approval and Consent...............................................................22
         18.06    Amendment......................................................................................22
         18.07    Waiver.........................................................................................22
         18.08    Severability...................................................................................22
         18.09    Governing Law..................................................................................22
         18.10    Successors.....................................................................................22
         18.11    Counterparts...................................................................................22
         18.12    Third Parties..................................................................................22
         18.13    Further Assurances.............................................................................22
</TABLE>

                                     (iii)
<PAGE>

                             JOINT VENTURE AGREEMENT

     JOINT VENTURE  AGREEMENT,  dated as ____________,  2003 (the "Joint Venture
Agreement")  between SONY MUSIC,  A GROUP OF SONY MUSIC  ENTERTAINMENT,  INC., a
Delaware corporation (the "Sony Venturer"), and ____________________, a ________
[corporation] (the "Promoter Venturer").

     In consideration of the premises and of the mutual covenants and agreements
hereinafter set forth, the parties agree as follows:

1.       DEFINITIONS

     1.01  Definitions  in this Joint  Venture  Agreement.  For purposes of this
Joint Venture Agreement, the following terms shall have the following meanings:

          "A& R": artists and repertoire.

          "Act":  the Delaware  Limited  Liability  Company Act, as amended from
     time to time and any successor thereto.

          "Adjusted Capital Account Deficit":  with respect to any Venturer, the
deficit balance, if any, in such Venturer`s Capital Account as of the end of the
relevant  fiscal year or other  period,  after  giving  effect to the  following
adjustments:

               (i) Credit to such  Capital  Account for any  amounts  which such
Venturer is  expressly  obligated  to  restore,  or is treated as  obligated  to
restore,  with respect to any deficit balance in its Capital Account pursuant to
any   provision  of  this  Joint  Venture   Agreement  or  Regulation   Sections
1.704-1(b)(2)(ii)(b)(3) and 1.704-1(b)(2)(ii)(c);

               (ii) Credit to such  Capital  Account for any amounts  which such
Venturer is (or would be) deemed to be  obligated to restore with respect to any
deficit  balance  in  its  Capital  Account  pursuant  to  Regulation   Sections
1.704-2(g)(1) and 1.704-2(i)(5) or any successor provisions thereto; and

               (iii)  Debit to such  Capital  Account  the  items  described  in
Sections 1.704-I(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)
(d)(6) of the Regulations.

The foregoing  definition  of Adjusted  Capital  Account  Deficit is intended to
comply with the provisions of Section  1.704-1(b)(2)(ii)(d)  of the  Regulations
and shall be interpreted consistently therewith.

          "Administrative  Services  Fee":  for any period,  the fee paid to the
Sony Venturer by the Venture pursuant to subparagraph 4.03(h).

          "Affiliate":  with respect to any Person, any other Person, controlled
by,  controlling,  or under common control with, such Person including,  without
limitation, stockholders, and joint venturers and other partners.

<PAGE>

          "Album(s)":  one or more  audio-only  Records,  at  least  forty  (40)
minutes in playing time,  and embodying at least eight (8) Master  Recordings of
different musical compositions sold in a single package.

          "Artist":  an  individual or group who creates  musical  recordings or
performances,  including a musical  recording  or  performing  group.  A musical
recording or performing  group  consisting  of more than one performer  shall be
deemed to be a single Artist hereunder.

          "Artist  Advance":  All sums paid or  credited  to or on behalf of any
Artist in accordance  with the applicable  Artist  Agreement,  other than Artist
royalties or mechanical royalties payable thereunder.

          "Artist Agreements": agreements entered into from time to time between
the Venture and Artists or other Persons furnishing the services of Artists,  in
each case,  regarding,  inter alia,  the  production of Master  Recordings to be
acquired by the Venture,  and other agreements  regarding the acquisition by the
Venture of rights in, inter alia Master Recordings.

          "Artist Delivery Commitment": as defined in subparagraph 4.02(c).

          "Artist`s Recording Commitment" or "Recording Commitment":  as defined
in Appendix A.

          "Artwork": as defined in subparagraph 4.03(f).

          "Audiovisual Record": any Record which embodies, reproduces, transmits
or otherwise  communicates  visual images  whether or not the  interaction  of a
consumer  is  possible  or  necessary  for the visual  images to be  utilized or
viewed.

          "Business Activities": as defined in subparagraph 4.01(c).

          "Buy-out Closing": closing of the purchase provided for in Article 9.

          "Buy-out Election Notice": as defined in paragraph 9.01.

          "Buy-out Price Notice": as defined in paragraph 9.01.

          "Buy-out  Trigger Date": the expiration date of the Term, as such date
may be extended in accordance herewith, or if earlier, upon the occurrence of an
event described in clause (ii), (iii) or (iv) of paragraph 14.01.

          "Capital Account": as defined in paragraph 11.01.

          "Carrying  Value":  with  respect to any Venture  asset,  such asset`s
adjusted  basis for U.S.  federal  income tax purposes,  except that the initial
Carrying  Value of any asset  contributed  by a Venturer to the Venture shall be
the fair  market  value of such  asset and the  Carrying  Values of all  Venture
assets  shall be adjusted  to equal their  respective  fair  market  values,  in
accordance with the rules set forth in Regulations Section 1.704-1(b)(2)(iv)(f),
except as otherwise  provided  herein,  as of (a) the date of the acquisition of
any additional Venture interest by any new or existing in exchange for more than

                                       2
<PAGE>

a de minimis capital contribution; (b) the date of the distribution of more than
a de minimis  amount of Venture  property to a Venturer;  (c) the date a Venture
interest is  relinquished  to the Venture or (d) the date of the  termination of
the Venture under Section  708(b)(i)(B)  of the Code;  provided,  however,  that
adjustments  pursuant  to clauses  (a),  (b) and (c) above shall be made only if
such adjustments are deemed necessary or appropriate by the Venturers to reflect
the relative  economic  interests of the  Venturers.  The Carrying  Value of any
Venture asset distributed to any Venturer shall be adjusted immediately prior to
such  distribution  to  equal  its  fair  market  value.  Depreciation  shall be
calculated  by reference to Carrying  Value,  instead of tax basis once Carrying
Value differs from tax basis.

                  "Club  Operations":  any direct sales to  consumers  through a
record club (for  example,  sales  through  Columbia  House or BMG Direct in the
United States, or Bertelsmann in Europe).

          "Code": the Internal Revenue Code of 1986, as amended.

          "Contract Period": the Initial Contract Period or any Option Period.

          "Contract  Year":  each  successive  12-month  period during the Term,
beginning on the  Effective  Date,  as such periods may be suspended or extended
from time to time as provided herein.

          "Controlled Entitles":  any Person controlled by, controlling or under
common  control with any of the Principals or the Promoter  Venturer.  For these
purposes,  "control" means the possession,  directly or indirectly, of the power
to  direct or cause the  direction  of the  management  of any  Person,  whether
through ownership of voting securities, by contract or otherwise.

          "Deliver"  or  "Delivery"  or  "Delivered":  when used with respect to
Master  Recordings - means the actual receipt by the  representative of the Sony
Venturer or the Parent  designated in each instance of fully mixed  (including a
mix in the 5.1 surround  sound mode),  edited,  and  unequalized  and  equalized
Recordings (including but not limited to a final two-track equalized tape copy),
satisfactory  to the Sony Venturer or the Parent for the manufacture and sale of
Records,  and all original and  duplicate  Recordings  of the material  recorded
including  each  multi-track  master,  together  with  all  necessary  licenses,
approvals,  consents and permissions, and all materials required to the Promoter
Venturer to the Sony Venturer for use in packaging and marketing of the Records.
A Recording shall not be considered  satisfactory  hereunder  unless:  (a) it is
commercially  and  technically   satisfactory  to  the  Sony  Venturer  for  the
manufacture and sale of Records;  (b) the Artist`s performance recorded in it is
"first  class" (as that term is  understood  in the record  industry);  (c) that
performance  is  at  least  of  the  quality  of  the  Artist`s  prior  recorded
performances  hereunder,  or, if there are no such prior  recorded  performances
hereunder,  then of the  demonstration  recordings of the Artist`s  performances
submitted  to the  Sony  Venturer;  and  (d)  the  Artist`s  performance  in the
Recording  concerned  is in the  same  style  as  the  Artist`s  prior  recorded
performances  or  those  demonstration  recordings,  and  the  musical  material
recorded in the Recording concerned is of the same genre as the musical material
recorded in those prior recorded  performances or demonstration  recordings.  An
Album shall not be considered  satisfactory unless the proportionate  number and
playing  time of the  Compositions  in it  written  by the  Artist  is at  least
substantially  equivalent to the  proportionate  number and playing time of such
Compositions  in each of the Artist`s  previous  Albums.  In addition,  a Record
shall not be considered  satisfactory if the Record includes any endorsements or
so-called  "commercial  tie-ins" not approved by writing,  or if it contains any
material  (e.g.,  lyrics) which Sony deems patently  offensive or which,  in the
judgment of its attorneys, might subject Sony or Sony`s Licensees to unfavorable
regulatory  action,  violate  any law,  infringe  the rights of any  Person,  or
subject  Sony,  the Venture or Sony`s  Licensees to liability for any reason- In
lieu of the physical delivery to the Sony Venturer`s  designated  representative
of all of the original and duplicate Master Recordings  concerned,  the Promoter
Venturer or Artist may provide written notice to the Sony Venturer`s  designated

                                       3
<PAGE>

representative  in a form  acceptable  to the Sony Venturer  which,  to the Sony
Venturer`s  satisfaction,  enables  the Sony  Venturer  at the  Sony  Venturer`s
discretion  to control  and/or to take  possession of the original and duplicate
Master  Recordings  concerned at the studios or other  facilities  at which such
Master Recordings are maintained.  Each Master Recording shall be clearly marked
to  identify  the Artist  concerned  as the  recording  artist,  and to show the
title(s) of the  Composition(s)  and recording  date(s).  The Promoter  Venturer
shall Deliver to the Sony Venturer as part of the Delivery obligations hereunder
a  track-by-track  list  ("Personnel  List") of all featured  vocal  performers,
background vocal performers and instrumental performers on each Master Recording
identifying their performances.  The payment of any movies due in respect of the
Delivery of Master  Recordings  hereunder  shall not be deemed to be a waiver of
the Promoter  Venturer`s  obligation to obtain and furnish clearly marked Master
Recordings  as  aforesaid,  the  Personnel  List  and  all  necessary  licenses,
approvals,  consents and  permissions  and shall not be deemed to be a waiver of
these Delivery obligations. For purposes of calculating any time periods tied to
Delivery of Master  Recordings  hereunder,  only, and  notwithstanding  anything
expressed or implied elsewhere herein, completion of Delivery shall be deemed to
have occurred upon the last day of the month in which Sony receives  notice from
the Promoter Venturer confirming that the Promoter Venturer has Delivered all of
the Master  Recordings  concerned and fulfilled  all of these  obligations  with
respect thereto.

          "Depreciation":  for any period,  an amount equal to the depreciation,
amortization,  or other cost  recovery  deduction  allowable  with respect to an
asset for such year or other  period,  except that if the  Carrying  Value of an
asset  differs  from its adjusted  basis for federal  income tax purposes at the
beginning of such year or other  period,  Depreciation  shall be  determined  in
accordance with the principles of section 704(c) of the Code.

          "Direct Club Operation":  a Club Operation  conducted  directly by the
Sony Venturer and not by another Person through a licensing arrangement with the
Sony Venturer (with respect to distribution in the United States).  For example,
Columbia House in the United States is not a "Direct Club Operation".

          "Disability  of the  Principal":  means  illness or other  physical or
mental  disability or incapacity of the Principal  which, in the Sony Venturer`s
judgment the Sony  Venturer  has  substantially  prevented  the  Principal  from
performing the  Principal`s  duties during any period of 90 consecutive  days or
for 90 days during any period of 180 consecutive  days, and which can reasonably
be  expected to  continue  in the  judgment of a physician  selected by the Sony
Venturer.

          "Dissolution  Event": any event which would cause a dissolution of the
Venture pursuant to Section 18-80I of the Act.

                                       4
<PAGE>

          "Distribution  Fee":  for any the fee paid to the Sony Venturer by the
Venture pursuant to paragraph 8.02.

          "Effective Date": [INSERT DATE]

          "Employment  Agreements":  the employment  agreements,  in the form of
Exhibit A, to be entered  into  between the  Venture and each of the  Principals
pursuant to paragraph 4.04.

          "Fund Calculation Formula": sixty-six and two-thirds percent (66 2/3%)
of whichever of the following amounts is less:

               (i) the amount of the  royalties  credited  on USNRC Net Sales of
the Album recorded pursuant to the Artist concerned`s Recording Commitment under
the  applicable  Artist  Agreement  which was released most recently  before the
Delivery of the Album  concerned,  as  determined  by the Sony Venturer from the
Sony Venturer`s most recent monthly trial balance  accounting  statement  before
the date on which the Album  concerned  is Delivered or required to be Delivered
under  the  applicable  Artist  Agreement  (whichever  date is  earlier),  after
deduction of reserves for returns and credits; or

               (ii) the average of the amounts of such  royalties on the two (2)
Albums recorded pursuant to the Artist  concerned`s  Recording  Commitment under
the applicable  Artist  Agreement  which were released most recently  before the
Delivery of the Album concerned.

          "GAAP":  generally accepted accounting principles in the United States
in effect from time to time.

          "Gross Billings":  or any period,  all monies actually received by, or
credited to, the Ventures  with respect to  exploitations  of Master  Recordings
hereunder,  including  but not  limited to monies  payable  to the  Venture as a
result  of  the  distribution  of  Records   embodying  such  Master  Recordings
throughout the Territory in accordance with paragraph 8.02,  exploitation of the
Master Recordings in the so-called  "special products" market, and the licensing
of such Master Recordings to third parties,  but excluding actual free goods and
actual discounts, but before provision for returns, reserves or credits.

          "Inception of Recording": the first recording of performances or other
sounds  with a view to the  eventual  fixation  of a  Master  Recording.  Master
Recordings "from the Inception of Recording" include,  without  limitation,  all
rehearsal recordings,  "outtakes", and other preliminary or alternative versions
of  Recordings  hereunder  which are  created  during the  production  of Master
Recordings hereunder.

          "Indemnified Parties": as defined in subparagraph 16.01(a).

          "Initial Contract Period": as defined in paragraph 3.01.

          "Interim Statement": as defined in paragraph 9.01.

                                       5
<PAGE>

          "Licensees":  a licensee of rights from the Sony Venturer,  including,
without limitation,  wholly or partly owned  subsidiaries,  affiliates and other
divisions and components of the Parent.

          "Losses": as defined in subparagraph 16.01(a).

          "Manufacturing  Costs":  for any  period,  all costs and  expenditures
incurred or paid by the Venture in connection with the  manufacturing of Records
(whether sold,  scrapped or remaining in inventory)  embodying Master Recordings
which are customarily  recognized as manufacturing  costs in the U.S.  recording
industry,  whether payable by or on behalf of the Venture, to the Sony Venturer,
Parent,  any of its  Affiliates  or  other  third  parties,  including,  without
limitation, the following:

               (a) the costs of manufacturing,  pressing and duplicating Records
in  all  configurations  which  embody  Master  Recordings,  including,  without
limitation,  black-vinyl  discs,  cassette  tapes and  compact  discs,  and also
including,  without limitation,  the costs of making the glass masters, loop bin
masters, metal parts and masters (including lacquer, copper and other equivalent
masters), mothers, stampers and test pressings;

               (b)  the  costs  of  manufacturing  and  reproducing  the  Record
packaging,  including but not limited to liner notes,  inserts,  jackets,  jewel
boxes and labels, for Records embodying Master Recordings;

               (c) the costs of preparing the  packaging  for Records  embodying
Master Recordings so that such Records are in condition for distribution; and

               (d) the costs of storage  and  warehousing  of Records  embodying
Master Recordings at the Record  manufacturing  facilities  (including,  without
limitation, per unit charges for refurbishing,  restocking, scrapping, drilling,
disposal and obsolescence).

          "Marketing Costs": for any period, all costs and expenditures incurred
or paid by the Venture in connection with the marketing,  advertising (including
so-called  "cooperative  advertising")  and promotion of Master  Recordings  and
Records  embodying Master  Recordings in the United States which are customarily
recognized as marketing,  advertising and promotion costs in the U.S.  recording
industry,  whether  payable to or on behalf of the Venture by the Sony Venturer,
Parent,  any of  its  Affiliates  or  other  third  parties  including,  without
limitation, the following:

               (a) the costs of marketing and selling Records  embodying  Master
Recordings,  including, without limitation, the costs of creating, producing and
delivering   audiovisual   reproductions  of  Artist`s  performances  of  Master
Recordings in the form of "videos", all advertising costs, radio,  television or
online  promotion  (including,   without  limitation,   independent   promotion,
contests,  research samplers, radio dates and time buys), the costs of materials
relating to or utilized in connection  with the  preparation  of  advertising or
merchandising campaigns and displays,  tickets for Artist`s public performances,
touring  support costs,  press and publicity  costs,  internet  marketing  costs

                                       6
<PAGE>

(including web site development and  maintenance),  retail  marketing,  giveaway
product including  promotional and commercial product and any payment to or cost
incurred by Parent for the services of its marketing, promotion and/or publicity
departments or that are otherwise authorized by the Promoter Venturer;

               (b) the  costs of  creating  and  producing  Record  artwork  and
packaging,  including,  without limitation, the cost of artwork, photographs and
color separations for Record covers, sleeves and other packaging elements; and

               (c) all other costs of marketing and selling (including,  but not
limited to, merchandising,  advertising and promoting) Records or other types of
recordings   embodying  Master   Recordings  or  otherwise   exploiting   Master
Recordings.

          "Master  Recordings":  each Recording made,  furnished to or otherwise
acquired by the Venture under this Joint Venture Agreement, an Artist Agreement,
or any other agreement.

          "Material  Default":  Any one (1) or more of the  following  acts by a
Principal:

               (a) The Principal`s  conviction  (treating a nolo contendere plea
as a conviction) of a felony (whether or nor any right to appeal has been or may
be exercised);

               (b)   The   commission   of   fraud,    embezzlement   or   other
misappropriation by the Principal:

               (c) The Principal`s  failure to perform the Principal`s  material
duties under this Joint  Venture  Agreement,  which  failure is not cured within
thirty (30) days after the date on which the Venture or the Sony Venturer  gives
the Promoter Venturer written notice of such failure;

               (d)  The   Principal`s   material   breach  of  the   Principal`s
obligations  with  respect to the  Statement of Policy  concerning  conflicts of
interest or any other rules or regulations of employment which may be adopted or
amended from time to time by the Venture,  a copy of which is attached hereto as
Appendix C; and/or

               (e) The failure by the  Principal to comply with Sections 317 and
507 of the  Federal  Communications  Act of 1934,  as  amended,  the  rules  and
regulations promulgated thereunder, any other laws and regulations governing the
Principal`s  promotion  activities  hereunder,  and the applicable  standards of
conduct set forth in the  Recording  Industry  Association  of America  brochure
entitled  "An Action  Program for the  Recording  Industry",  a copy of which is
attached hereto as Appendices D, F and F.

          "Maximum Overhead Amount": as defined in subparagraph 4.05(a).

          "Minimum Delivery Commitment": as defined in subparagraph 4.02(c).

          "Multiple Record Set" two (2) or more Records packaged and/or marketed
as a single unit.

                                       7
<PAGE>

          "Net Billings":  for  exploitations of Master Recordings in the United
States for any period,  Gross  Billings  less  amounts  required  for  reserves,
returns and credits and other  allowances in accordance  with Parent`s  standard
practices.

          "Net  Income" and "Net Loss":  for a tax year,  the net income and net
loss of the  Venture,  in each  case,  determined  in  accordance  with the same
principles employed in determining the Venture`s taxable income for U.S. federal
income tax purposes, taking into account the full amount of any recognized gains
and all items of expense including the full amount of all recognized losses. For
purposes of this computation,  taxable income shall include every item requiring
separate  computation  under  section  702(a) of the Code and shall  include any
items not deductible for tax purposes and not includible for tax purposes.

          "Net Matrix Income":  for exploitation of Master Recordings outside of
the  United  States  for any  period,  the sum of (i) all  royalties  listed  on
Schedule B received  by or credited to the  Venture,  and (ii) any other  income
received by or credited to the Venture not included in Gross  Billings  which is
readily and directly  attributable to the sale or other exploitation of a Master
Recording  outside the United  States and which is not  reflected in clause (i),
less amounts required for reserves,  returns,  credits, "free goods",  discounts
and other allowances.

          "Option Period(s)": as defined in paragraph 3.02.

          "Overhead  Costs":  for any period,  all overhead  expenditures of the
Venture, including,  without limitation, such items as rent, salaries, benefits,
office supplies, equipment and facilities, travel and entertainment expenditures
for whatever purpose (including,  without limitation,  for promotional Tours) if
incurred by an employee or agent of the Venture or the Promoter  Venturer,  fees
and expenses of accountants and legal counsel,  insurance  expenses  (including,
without  limitation,  life insurance),  and the costs for the preparation of tax
returns, if any, of the Venture.

          "Parent": Sony Music Entertainment Inc.

          "Person":  any natural person,  legal entity, or other organized group
of  persons  or   entities,   including,   without   limitation,   corporations,
partnerships,  limited  liability  companies,  limited  liability  partnerships,
business trusts, joint stock companies, trusts,  unincorporated associations and
joint ventures.  (All pronouns,  whether personal or impersonal,  which refer to
Persons include natural persons and other Persons.)

          "Plan": as defined in subparagraph 4.45(a).

          "Principal(s)": [INSERT NAMES].

          "Profit  Advances":  means the  guaranteed  payments  to the  Promoter
Venturer pursuant to paragraph 5.05, and any other advances or payments to or on
behalf of the  Promoter  Venturer  to be  recouped  by the Sony  Venturer  under
subparagraph 11.07(d).

          "Profits": as defined in paragraph 11.07.

          "Promoter Party(ies)": as defined in subparagraph 4.02(e).

                                       8
<PAGE>

          "Recording":  every recording of sound,  whether or not coupled with a
visual image,  by any method and on any  substance or material,  or in any other
farm or format,  whether now or hereafter known,  which is used or useful in the
recording,  production and/or manufacture of Records or for any other commercial
exploitation.

          "Recording   Costs":   all  costs   and   expenditures,   other   than
Manufacturing  Costs and Marketing  Costs,  incurred or paid in connection  with
producing, recording and delivering Master Recordings or Records to the Venture,
including, without limitation:

               (a) all union scale  payments,  advances and other payments to or
on behalf of Artists  and to any other  individuals  or  entities  rendering  or
furnishing  services in connection  with the  production and recording of Master
Recordings  (including,  without  limitation,  fees  and  advances  paid  to the
producer(s) of Master Recordings);

               (b) all other  payments which are made pursuant to any applicable
law or regulation or the provisions of any collective  bargaining agreement with
any union or guild (including, without limitation, payroll taxes and payments to
union pension and welfare funds) in connection with the production and recording
of Master Recordings; and

               (c) all  amounts  paid or  incurred  for studio or hall  rentals,
tape, engineering,  editing, mixing, dubbing, rehearsal, remixing,  instrumental
rentals  and  cartage,   mastering,   the  costs  of  cutting  reference  discs,
transportation  and  accommodations,   immigration  clearances  for  individuals
involved  in the  recording  process  and any  so-called  "per  diems" or living
allowances  for any  individuals  (including  Artists and  producers)  rendering
services in connection with the production and recording of Master Recordings.

          "Recording Fund": as defined in the Standard Form Agreement.

          "Record(s)":   all   forms   of   reproductions,    transmissions   or
communications of Recordings now or hereafter known, manufactured,  distributed,
transmitted or communicated  primarily for home use, school use, juke box use or
use in means of transportation, including, without limitation, Records embodying
or reproducing sound alone and Audiovisual Records.

          "Regulations":  Treasury  regulations  promulgated  under the Code, as
amended from time to time.

          "Revenue":  for  any  period,  the sum of (i) Net  Billings  for  such
period,  (ii) Net Matrix Income for such period and (iii) all other  revenues of
the Venture not included in the foregoing, representing monies actually received
by, or credited to, the Venture during such period  (excluding  Venture  Loans).
Notwithstanding the foregoing,  or anything to the contrary expressed or implied
elsewhere in this Joint Venture Agreement, with respect to receipts payable from
a Club Operation, Revenue shall specifically not include any profits received by
the Sony Venturer, Parent or any of their Affiliates as a joint venturer in such
Club Operation (e.g., the Columbia House Company).

          "Royalty Costs": for any period, all royalties paid or incurred by the
Venture, including, without limitation, the following:

                                       9
<PAGE>

               (a)  royalties  to  artists,   producers,  sample  licensors  and
copyright owners; and

               (b)  royalties  for the  mechanical  reproduction  of the musical
compositions recorded in Master Recordings in Records and synchronization of the
musical compositions in Videos and Audiovisual Records.

          "Side":  a  Retarding  of a  continuous  performance  of a  particular
arrangement  or version of a Composition,  not less than two and  one-quarter (2
1/4) minutes in playing tune.

          "SMSP": Sony Music`s special products operations in the United States.

          "Sony Music": Sony Music, a Group of the Parent.

          "Special  Packaging  Cost(s)":  costs  paid or  incurred  by the  Sony
Venturer, the Parent or any of their Affiliates in creating and producing Record
covers,  sleeves,  and other packaging elements,  or in developing,  hosting and
maintaining websites (including the Artist Venture sites defined paragraph 7A.01
below) in excess of the following  amounts:  (a) Ten Thousand Dollars  ($10,000)
per Record far design of artwork  (including  expenses for reproduction  rights)
and for separations;  (b) for Records manufactured for distribution  anywhere in
the  Territory,  packaging  manufacturing  costs  equal  to those  necessary  to
manufacture the following  packaging elements in the applicable  territory:  (1)
for vinyl LP`s,  a  four-color  jacket and a  one-color  inner  sleeve;  (2) for
cassettes  including  digital compact  cassettes,  a six-panel inlay card with a
four-color  front panel and black and white other panels,  and a standard  color
Norelco box; and (3) for compact  discs and other  configurations  not described
above, an eight-page (i.e.,  eight faces) booklet with four-color front and back
pages and black and white other pages,  and a standard color jewel box.  "Color"
in the preceding sentence means those colors for which the Sony Venturer, Parent
or their affiliates are charged a standard fee. The packaging  elements referred
to in  sections  (b)(1),  (2),  and (3) above are  deemed for  purposes  of this
definition to be on standard  weight paper or cardboard;  and (c) Seven Thousand
Five Hundred Dollars ($7,500) for website development, hosting and maintenance.

          "Standard Form Agreement": as defined in section 4.02(e)(3).

          "Term": as defined in paragraph 3.01.

          "Territory": the universe.

          "Through Normal Retail Channels": sales other than as follows: through
any Club Operation;  through any Direct Club Operation;  any catalog Record sold
by the Venture,  the Sony Venturer,  the Parent or its Affiliates to educational
institutions  or  libraries,  or to  other  clients  of the  Venture,  the  Sony
Venturer,  the Parent or its Affiliates for their  promotion or sales  incentive
purposes;  any  Records  sold  in  conjunction  with  a  substantial  television
advertising  campaign,  during  the  calendar  semi-annual  period in which that
campaign  begins  or either of the next such  period;  any  non-catalog  Records
created on a custom basis for clients of the  Venture,  the Sony  Venturer,  the
Parent or its affiliates;  any Master Recordings leased by the Venture, the Sony
Venturer,  the  Parent or its  Affiliates  to others for their  distribution  of
Records; for promotional purposes; as surplus,  overstock,  or scrap; as cutouts
after the  listing of such  Records  has been  deleted  from the  catalog of the

                                       10
<PAGE>

Venture,  the Sony  Venturer,  the Parent or its  Affiliates  or the  particular
Licensee; as "free", "no charge" or "bonus" Records (whether or not intended for
resale);  to  employees  of the Venture,  the Sony  Venturer,  the Parent or its
Affiliates and their  relatives;  to radio  stations;  in territories  where the
Recordings  concerned  are in the  public  domain;  Records  intended  for  free
distribution as "samplers" to automobile or audio equipment  purchasers (whether
or not postage,  handling,  or similar charges are made), or distributed for use
on transportation carriers.

          "Union  Payments":  royalties  to all unions and guilds and  otherwise
paid pursuant to all collective bargaining agreements based on the sale or other
exploitation of Records and Audiovisual  Records  embodying Master Recordings or
any other exploitation of Master Recordings,  including, without limitation, the
AF of M Music  Performance  Trust Fund and Special  Payments  Fund and AFTRA (so
called  "contingent  scale" payments) and all other union payments accruing with
respect to sales or other exploitation of Master Recordings during such period.

          "Venture":  the limited liability company formed pursuant to paragraph
2.04.

          "Venture Loans": as defined in subparagraph 5.03(a)

          "Venturer": each of the Sony Venturer and the Promoter Venturer.

          "Video":  an  audiovisual  work  owned or  controlled  by the  Venture
featuring,  primarily, the audio soundtrack of one (1) or more Master Recordings
hereunder.

     1.02 Other Definitional Provisions.

          (a) The words "hereof`,  "herein" and "hereunder" and words of similar
import  when used in this  Joint  Venture  Agreement  shall  refer to this Joint
Venture  Agreement as a whole and not to any particular  provision of this Joint
Venture  Agreement,  and Article,  paragraph,  section,  subsection,  clause and
subclause  references  are to this Joint  Venture  Agreement,  unless  otherwise
specified.

          (b) The meanings given to terms defined herein, or by reference to any
other  agreement,  shall be equally  applicable  to both the singular and plural
forms of such terms.

2.   FORMATION OF THE VENTURE

     2.01 Purpose and  Formation.  The Sony  Venturer and the Promoter  Venturer
hereby form a joint  venture for the purpose of engaging in the  recorded  music
business,  including,  without limitation, the production, sale and exploitation
of sound  Recordings,  music videos,  Audiovisual  Records and other audiovisual
Recordings  embodying  Master  Recordings.  The business of the Venture shall be
specifically limited to the purposes and duration provided in this Joint Venture
Agreement.  Subject  to the  terms and  conditions  contained  herein,  the Sony
Venturer  and the  Promoter  Venturer  shall  each  have a fifty  percent  (50%)
interest in the Venture.

                                       11
<PAGE>

     2.02  Name.

          (a) The Venture shall do business under the name "___________________"
or such  other  name  or  names  as the  parties  hereto  shall  mutually  agree
consistent with the Act. Except as otherwise set forth herein,  the name and any
trade or service names, marks, emblems or logos used by the Venture shall be the
property of the Venture,  and none of the parties hereto shall have any right to
use,  and each of them agrees not to use, any of such names,  marks,  emblems or
logos other than on behalf of the Venture or as otherwise agreed.

          (b)  None  of the  Promoter  Venturer,  the  Principal,  any of  their
Affiliates  or the Venture  shall have any  authority to use any name,  trade or
name, mark, emblem, logo or label of Parent or any of its Affiliates without the
express written consent of the Sony Venturer.

     2.03  Principal  Office.  The  offices  of the  Venture  will be located at
__________________________________________________,  or such other  location  as
may be selected jointly by the Venturers.

     2.04 Limited  Liability  Company.  The Venture shall be a limited liability
company  formed  pursuant to the  provisions  of the Act and this Joint  Venture
Agreement.  The sole members of the Venture  shall be the Sony  Venturer and the
Promoter  Venturer,  otherwise  permitted  hereunder and under the Act. The Sony
Venturer  shall  cause to be filed on behalf of the  Venture  a  certificate  of
formation  in  accordance  with  the Act  that  shall  provide  such  provisions
consistent  with this Joint  Venture  Agreement  as may be agreed to by the Sony
Venturer  and  the  Promoter  Venturer.   This  Joint  Venture  Agreement  shall
constitute a "limited  liability  company  agreement" under Section 18-101(7) of
the Act.

     2.05  Contributions to the Venture.  As contributions to the capital of the
Venture,  the Sony Venturer and the Promoter Venturer shall each transfer to the
Venture Hundred Dollars ($100). In exchange therefor,  each of the Sony Venturer
and the  Promoter  Venturer  shall  receive  50% of the equity  interest  in the
Venture.

3.   TERM OF THE VENTURE

     3.01 Term.  The term of this  agreement  (hereinafter,  the  "Term")  shall
commence  as of  _______________  and shall  continue  in force  for an  initial
Contract  Period  consisting  of ______  (__)Contract  Year(s) which will end on
_________________  (unless  such  Period is extended  or  suspended  as provided
herein) and the additional period or periods,  if any, for which the Term may be
extended  through  the Sony  Venturer`s  exercise  of one or more of the options
granted to the Sony Venturer below.

3.02  Option Periods.

          (a) The Promoter  Venturer grants the Sony Venturer  ____________ (__)
consecutive   options  to  extend  the  Term  for  additional  Contract  Periods
consisting of __________ (___) Contract Year(s) ("Option Periods") each upon all
the terms and conditions  contained herein.  The Sony Venturer may exercise each
of those  options by sending the  Promoter  Venturer a notice not later than the
expiration  date of the Contract  Period  which is then in effect (the  "current
Contract  Period").  If the Sony Venturer  exercises such an option,  the Option
Period  concerned will begin  immediately  after the end of the current Contract
Period.

                                       12
<PAGE>

          (b)  Notwithstanding  anything  to  the  contrary  contained  in  this
paragraph  3.02, if the Sony Venturer has not exercised its option to extend the
Term for a further  Contract Period as of the which the current  Contract Period
would otherwise expire, the following shall apply:

               (i) The Promoter Venturer shall send the Sony Venturer notice (an
"Option Warning") that its option has not yet been exercised.

               (ii) The Sony  Venturer  shall  have the  right to  exercise  the
applicable  Contract Period option by sending a notice to the Promoter  Venturer
not later than the date ten (10)  business  days after its receipt of the Option
Warning (the "Extension Period").

               (iii) The current  Contract  Period  shall end on either the last
day of the  Extension  Period  or the date of the Sony  Venturer`s  notice  (the
"Termination  Notice") to the Promoter  Venturer that the Sony Venturer does not
wish to exercise such option, whichever is sooner.

               (iv) For the avoidance of doubt,  nothing  herein shall limit the
Sony Venturer`s right to send a Termination  Notice to the Promoter  Venturer at
any time,  nor limit the Sony  Venturer`s  right to  exercise a Contract  Period
Option in accordance with section 3.02(a) above,  notwithstanding any failure by
the Promoter  Venturer to send Sony an Option Warning in accordance with section
3.02(b)(i) above.

4.   MANAGEMENT

     4.01 General.

          (a) During the Term, except as otherwise  explicitly set forth herein,
the  business  of the  Venture  will  be  managed  by  mutual  agreement  of the
Venturers. During the Term, neither Venturer shall incur any liability,  expense
or  obligation  on  behalf  of the  Venture  that  is not  expressly  authori2ed
hereunder.  Without  limiting the generality of the foregoing,  during the Term,
the mutual written  agreement of each of the Venturers shall be required for the
following:

                    (i) any financial  commitment  not  expressly  included in a
budget agreed to by the Venturers pursuant to subparagraph  4.05(a) or otherwise
explicitly provided for in ibis Joint Venture Agreement;

                    (ii) any  transaction  riot in the  ordinary  course  of the
business of the Venture,  including,  without limitation, the disposition of any
assets or rights other than in the ordinary course;

                    (iii) the making of any loans by the Venture;

                    (iv) any real estate  transaction  (including  the rental of
real property)  (for the avoidance of doubt,  each and every real lease shall be
entered into solely in the name of the Promoter Venturer, and not in the name of
the  Venture,  the Sony  Venturer,  Parent or any of their  Affiliates,  and the
Promoter  Venturer  shall be solely  responsible  for any and all Overhead Costs
attributable to such lease (including, without limitation, all rent, costs of

                                       13
<PAGE>

office supplies, costs of equipment and facilities, and insurance expense));

                    (v)  except as  expressly  provided  in this  Joint  Venture
Agreement,  any license (except as specifically  permitted  hereunder),  sale or
transfer or other disposition of any assets (including,  without limitation, the
Venture`s  Artist  Agreements) or rights of the except in the ordinary course of
business (for the avoidance of doubt,  the Sony Venturer shall, on behalf of the
Venture,  have the exclusive authority grant all such licenses and make all such
sales and other  transfers  in the ordinary  course of business  (subject to any
restrictions for in this Joint Venture Agreement));

                    (vi) the granting of any powers of attorney on behalf of the
Venture;

                    (vii) the  granting of any  security  interest in any of the
assets of the Venture;

                    (viii) the  commencement  or  settlement  of any  lawsuit on
behalf of the Venture;

                    (ix) the entering on behalf of the Venture into any business
other than that for which this  Venture  was  formed or the  acquisition  of any
other business, company, partnership or enterprise on behalf of the Venture;

                    (x)  any  other  act  which  would  make  it  impossible  or
impractical to carry on the business of the Venture;

                    (xi) the opening,  closing or amendment of signatory  powers
on any  bank,  trust or other  account  in the name of the  Venture  (except  as
provided in subparagraph 4.03(a));

                    (xii) the purchase (or other  acquisition) of, or investment
in,  fixed  assets  in  excess  of  $25,000  in any  one or  related  series  of
transactions or in excess of $50,000 in any Contract Year;

                    (xiii) any transfer,  license,  sale or other disposition of
any of the Venture`s assets, including, without limitation, the Venture`s Artist
Agreements;

                    (xiv) any agreement or other  transaction  not  specifically
provided for herein  between the Venture and any Venturer or the  Principal,  or
any of their respective Affiliates including, but not limited to, the use of any
Artist  Agreement  that  (i)  is  not  substantially  in the  form  of the  Sony
Venturer`s  Standard Form  Agreement or (ii) contains terms but are in excess of
the limits set forth in Appendix A;

                    (xv)  the  entering  into  of  any  agreement  which  can be
terminated by its terms by the other party upon change in control,  ownership or
termination of any employee  (i.e.,  key-man  clause) or which requires  payment
upon the occurrence of any such event;

                                       14
<PAGE>

(xvi) the entering into of any agreement  which would (A)  materially  interfere
with the  prompt  performance  of any  Principals`  or the  Promoter  Venturer`s
obligations  to the  Venture or (B)  contain any  material  restrictions  on the
ability of the Venture to conduct its business;

                    (xvii) any increase, decrease or other change in the capital
contributions, advances or obligations to be made by or of the Venturers;

                    (xviii)  any  borrowings,   the  creation  of  guarantee  or
suretyship obligations, or the incurring of any other indebtedness or contingent
indebtedness  of any kind (other than Venture Loans  pursuant to paragraph  5.03
and unsecured  short-term trade  obligations  incurred in the ordinary course of
the business of the Venture);

                    (xix) except as explicitly set forth herein,  and subject to
subparagraph 15.02(k) below, entering into any employment,  consulting, union or
similar  agreement,  or adopting  any  employee  benefit,  investment  or profit
sharing  plan in the name of or  otherwise  on  behalf  of the  Venture,  or any
amendment,  modification or extension to any such agreement or plan,  including,
without  limitation,  any such  employment,  consulting,  union or other similar
agreement (or the  amendment,  modification  or extension  thereof) to which the
Principal is a party (whether as an employee, consultant or otherwise);

                    (xx)  all   arrangements  for  the  exploitation  of  rights
acquired by the Venture,  except the  distribution  arrangements  referred to in
paragraph 8.02 and except as otherwise specifically provided hereunder;

                    (xxi) the taking of any action,  the  foreseeable  effect of
which  would be to  jeopardize  the status of the Venture as a  partnership  for
federal and/or state income purposes; and

                    (xxii) the  waiver of any  exclusivity  provisions  under an
Artist Agreement (e-g., by the granting of a so-called  "sideman" clearance to a
third  party) or under any other  exclusive  arrangement  to which  Venture is a
party.

          (b) Each  Venturer  shall  designate  by  written  notice to the other
Venturer an individual or individuals to act on its behalf in the conduct of the
business and affairs of the Venture.  The designation of a representative may be
changed by either  Venturer in its sole  discretion  upon written notice of such
change to the other Venturer.  Subject to paragraph  I8.04 below,  each Venturer
shall be entitled to rely on any communication  received from the representative
of the other Venturer as being authorized by such other Venturer.

          (c) The Promoter Venturer and Affiliates are fully aware of, have been
advised  and agree that the Sony  Venturer,  Parent and one or more of  Parent`s
Affiliates  currently  conduct,  and  may in the  future  conduct,  directly  or
indirectly  through its  investments  in other  Persons or  otherwise,  business
activities  ("Business  Activities") in the same line of business as the Venture
for the benefit of the Sony Venturer, Parent and/or its Affiliates,  without any
benefit to the  Venture,  or any  Promoter  Party (as  defined  in  subparagraph
4.02(e) below).  Without limiting the generality of the definition thereof,  the
term  Business  Activities  shall  include:  (i)  the  investment,  directly  or
indirectly,  in entities which do business with, or clients of, or which compete

                                       15
<PAGE>

directly or  indirectly  with,  the Venture  and (ii)  competition,  directly or
indirectly,  with respect to Artists. Each Promoter Party hereby consents to the
conduct of any Business  Activities  and agrees that such conduct or competition
will not constitute  any breach of this Joint Venture  Agreement or of corporate
or  partnership  opportunity,  breach of fiduciary  responsibility,  conflict of
interest or otherwise  impose any  obligation or liability on the Sony Venturer,
Parent or their respective  Affiliates.  The Promoter Parties recognize that the
manufacture  and  sale of  Records  is  speculative  and that  neither  the Sony
Venturer,   Parent  nor  their   respective   affiliates  make  any  warranties,
representations  or  guarantees  with  respect to the number of units of Records
hereunder which will be sold.

     4.02 Promoter Venturer Responsibilities and Authority.

          (a) A&R.  The  Promoter  Venturer  shall have  responsibility  for the
identification  and  submission of all Artists,  to the terms and  conditions of
this Joint Venture Agreement. During the Term, the Promoter Venturer will follow
the  procedure  set  forth  below in  connection  with  Master  Recordings  made
hereunder:

               (i) Prior to the  commencement  of  recording  each  instance the
Promoter  Venturer and the Sony  Venturer  shall  mutually  agree on each of the
following,  in  order,  before  the  Promoter  Venturer  proceeds  further:  (A)
selection of Producer; (B) selection of material, including, without limitation,
the -number of  Compositions  to be recorded.  (The Sony  Venturer  shall not be
deemed  unreasonable  in  rejecting  any  request to record an Album which would
constitute a Multiple  Record Set);  and (C) selection of dates of recording and
studios  where  recording is to take place,  including  the cost of recording at
such studios.  (The Sony Venturer shall only  disapprove the use of a particular
studio  if it is not a  first-class  recording  studio,  if  its  use  would  be
inconsistent  with any union agreements of the Sony Venturer,  the Parent or its
Affiliates,  if the Sony  Venturer  anticipates  that its use would  cause labor
difficulties for other reasons, or if the Sony Venturer anticipates that its use
would require  expenditures  inconsistent with the approved recording budget) No
"live"  Recording shall be recorded  without the Sony  Venturer`s  prior written
consent. The scheduling and booking of all studio time shall be done by the Sony
Venturer in accordance  with the Promoter  Venturer`s  reasonable  requests.  In
addition,  at least fourteen (14) days prior to the date of the first  recording
session for the recording of any Recordings,  the Promoter Venturer shall submit
to the Sony Venturer writing, for the Sony Ventures written approval, a proposed
budget setting forth, in itemized detail, all anticipated Recording Costs.

               (ii) The  Promoter  Venturer  shall  notify  (or shall  cause the
Artist concerned to notify) the appropriate Local of the American  Federation of
Musicians in advance of each recording session.

               (iii) As and when reasonably  required by the Sony Venturer,  the
Promoter  Venturer  shall allow (and shall cause the Artist  concerned to allow)
the Sony Venturer`s and Parent`s  representatives to attend any or all recording
sessions hereunder.

               (iv) The Promoter  Venturer  shall timely  supply (or shall cause
the Artist  concerned to timely  supply) the Sony  Venturer with all of the that
the Venture  needs in order:  (A) to make payments due or required in connection
with Master Recordings  hereunder;  (B) to comply with any other obligations the
Sony Venturer may have in connection with the making of such Master  Recordings;

                                       16
<PAGE>

and (C) to prepare to release Records derived from such Master  Recordings.  The
Promoter  Venturer shall be solely  responsible  for and shall pay any penalties
incurred for late payment caused by the Promoter  Venturer`s delay in submitting
union contract forms, report forms or invoices, or other documents.

               (v) The  submission  of Master  Recordings  To the  Venture  will
constitute the Promoter Venturer`s  representation that the Promoter Venturer or
the Artist concerned has obtained all necessary  licenses,  approvals,  consents
and permissions.

               (vi)  No  Master   Recordings   shall  be  made  by  or   include
unauthorized Sampling ("Sampling," as herein, refers to the use and reproduction
of pre-existing musical material, hereinafter "Sampled Material," which is owned
or  controlled  by any Person  other  than the  Promoter  Venturer  or would not
otherwise be subject to the Venture`s  rights under  paragraph 7.01 below,  in a
Master Recording hereunder.)  Concurrently with the Delivery to the Venture of a
Master Recording,  the Promoter Venturer shall notify (or shall cause the Artist
concerned to notify) the Sony  Venturer in writing of the names and addresses of
all recording artists,  record companies,  songwriters and publishers and/or any
other  Persons who have any right,  title or interest of any kind in any Sampled
Material embodied in that Master Recording. The Promoter Venturer and the Artist
concerned shall responsible for obtaining all consents and licenses necessary or
desirable in connection  with the use and  reproduction,  and in connection with
the licensing of the use and reproduction, of any Sampled Material in any Master
Recording hereunder, so that the Venture shall enjoy perpetual otherwise granted
to the Venture pursuant to paragraph 7.01 with respect to Master Recordings.  At
Sony Venturer`s request,  the Promoter Venturer shall supply (or shall cause the
Artist  concerned to supply) the Sony Venturer with fully executed copies of any
such consents,  licenses and other related documentation.  The Promoter Venturer
shall be solely  responsible  for and shall  account  for and pay to any and all
Persons who own or control  Material any monies or other  compensation  to which
such Persons are entitled as a result of any use hereunder by the Venture of any
Master Recording  embodying such Sampled Material.  Notwithstanding  anything to
the contrary  expressed or implied herein,  no monies be earned by or payable to
the Promoter  Venturer  hereunder or  otherwise  in  connection  with any Record
embodying  any  Sampled  Material,  and no Master  Recording  embodying  Sampled
Material  shall be deemed  Delivered  hereunder  unless  and until the  Promoter
Venturer has obtained (or has caused the Artist  concerned to have  obtained) on
behalf of the Venture all rights required hereunder with respect to such Sampled
Material,  and, if the Sony Venturer requests,  until the Sony Venturer receives
documentation reasonably satisfactory to the Sony Venturer with respect thereto.

               (vii) The Sony  Venturer  will pay on behalf of the  Venture  all
Recording Costs incurred in connection with Master Recordings recorded hereunder
consistent with the approved budget and all required union payments.

               (viii) Nothing in this agreement  shall obligate the Sony Ventura
to continue or permit the continuation of any recording session or project, even
if previously  approved hereunder,  if the Sony Venturer reasonably  anticipates
that the  Recording  Costs plus all other Artist  Advances  attributable  to the
recording  session or project  concerned shall exceed hundred ten percent (110%)

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<PAGE>

of those specified in the approved budget therefor, or that the Recordings being
produced  shall not be  commercially  satisfactory  to the Sony Venturer for the
manufacture and sale of Records.

          (b) Omitted without implication.

          (c) Minimum Delivery Requirement.  The Promoter Venturer shall Deliver
to the Sony Venturer all  Recordings  required to be delivered  under the Artist
Agreements  on or before the  earlier  of; (a) the date ten (10)  business  days
after such  Recordings are delivered to the Promoter  Venturer,  or (b) the date
ten (10) business days after the last date on which such Recordings are required
to be delivered the Promoter Venturer under the Artist Agreement concerned,  but
no later than ten (10)  business  days after the time  delivery in Appendix A in
any event (the "Artist Delivery  Commitment").  The Promoter  Venturer shall use
its best  efforts to ensure  that  timely and  completely  satisfies  its Artist
Delivery  Commitment in accordance  with the  applicable  Artist  Agreement (the
"Minimum  Delivery  Commitment").  If such Minimum  Delivery  Commitment  is not
satisfied,  then,  pursuant to paragraph  11.01,  the Sony  Venturer may suspend
obligations  hereunder  until such albums are  Delivered.  The Term of the Joint
Venture  Agreement will  automatically be extended during the period of any such
suspension. If such suspension for more than four months, then the Sony Venturer
may, at its election and without  limitation of its rights, by written notice to
the Promoter  Venturer  (x)  terminate  the Term,  as of the date such notice is
sent, and upon termination by the Sony Venturer the buy-out provisions set forth
in Article 9 shall apply or (y)  liquidate  the Venture in  accordance  with the
provisions of Article 14.

          (d) Omitted without implication.

          (e) Artist Submission.

          (i) The Promoter  Venturer,  the Principal and every Controlled Entity
(each, a "Promoter  Party",  and  collectively,  the "Promoter  Parties")  shall
submit to the Venture every Artist with whom any of the Promoter  Parties either
is, as of the date hereof, party to a recording agreement, or with whom any such
Promoter Party proposes to enter into a recording  agreement;  provided that any
such proposed Artist that does not comply with the limitations set forth in this
Joint  Venture  Agreement  shall be  subject to the prior  approval  of the Sony
Venturer.  (A performing  group will be deemed a single "Artist" the purposes of
this  paragraph.)  Prior to  submitting  to the Sony  pursuant to the  preceding
sentence,  an Artist who is a party to a management  agreement with the Promoter
Venturer, Principal or any Controlled Entity, such party shall fully disclose to
each such  obligation  to submit such Artist to the Sony  Venturer in accordance
herewith and shall  furnish to the Sony Venturer in a form  satisfactory  to the
Sony  Venturer  documentation  executed by each such Artist  acknowledging  such
disclosure.  Artists  shall  be  submitted  to  the  Sony  Venturer  by way of a
demonstration record or tape consisting of at least completed and fully mixed 45
rpm record sides or the equivalent  thereof  ("demo") or, at the Sony Venturer`s
election  either  in lieu  of,  or in  addition  thereto,  by way of a  personal
audition at a place designated by the Sony Venturer. Concurrently with each such
submission,  the Promoter Venturer, the Principal or any Controlled Entity shall
send  notice  to Sony  Music`s  Senior  Vice  President,  Business  Affairs  and
Administration of the name of each artist being submitting to the Sony Venturer.
Unless the Sony Venturer  notifies the Promoter  Venturer,  the Principal or any
Controlled Entity, as applicable,  within thirty (30) days after such notice and
the delivery to the Sony Venturer of such demo, or such  audition,  whichever is

                                       18
<PAGE>

later,  that the Sony Venturer has accepted the particular  Artist,  such Artist
shall be  deemed to be by the Sony  Venturer  (each  such  Artist,  a  "Rejected
Artist").  The submission to the Sony Venturer of any Artist shall  constitute a
warranty and  representation  by the  Promoter  Venturer,  the  Principal or the
Controlled Entity that there is or will be an Artist Agreement for such Artist`s
services  which enables the Promoter  Venturer,  the Principal or the Controlled
Entity to perform its  obligations to the Sony Venturer under this agreement and
that the Venture  shall be entitled to the services of such Artist in accordance
with the terms of this agreement.

               (ii) The Promoter  Parties  warrant and represent the  following:
(A) During the Term,  none of the Promoter  Parties will furnish the services of
any Artist for the purpose of making Records or Recordings for any Person except
the  Venture;   (B)  no  Promoter   Party  has  entered  into  any   agreements,
arrangements,  or understanding  with any Person other than the Venture prior to
the commencement  date of the Term regarding the recording  services of Rejected
Artists (a "Third Party Label Agreement"),  including,  without limitation,  any
such  agreement,  arrangement  or  understanding  pursuant to which any Promoter
Party shall have the right to submit one or more such  Rejected  Artists to such
Person (or any  subsidiary  or  thereof) or such  Person (or any  subsidiary  or
affiliate  thereof) such Rejected Artists;  and (C) none of the Promoter Parties
will with respect to or enter into a Third Party Label Agreement with any Person
other than the Sony Venturer  during the provided that any Promoter  Party shall
have the tight to enter into an agreement with respect to the recording services
of  any  particular  Rejected  Artist  on an  individual  basis  subject  to the
provisions of subsection  4.02(e)(ii)(B)  above. The Promoter  Venturer warrants
and  represents  that no Person has or shall have the right to use or the use of
your name or the name "[NAME OF  VENTURE]",  the logo,  trademark or other trade
symbol of any of the Promoter  Parties , or the names,  portraits,  pictures and
likenesses of the Principals or any Controlled  Entity,  in connection  with any
Records or Master Recordings embodying the performances of any Rejected Artist.

               (iii) (A) Every Artist  Agreement  for an Artist  accepted by the
Sony  Venturer  hereunder  will  contain,  at  minimum,  the  terms set forth in
paragraph 6.01 hereof and Appendix A hereto,  unless the Sony Venturer  approves
otherwise in writing in advance.  Each Artist Agreement will be the same form as
the Parent`s  current  standard form of exclusive term  agreement  regarding the
rendition or furnishing of the services of a recording artist (as such forms may
be  revised  by the  Parent  from time to  time),  except  as the  Parent  shall
otherwise agree in writing, a copy of which is attached as Exhibit C hereto (the
"Standard Form Agreement").

                    (B) The  Promoter  Venturer  warrants  and  represents  that
Schedule A hereto  attached lists all Artists who are parties to an agreement in
respect of their exclusive  recording services with any Promoter Party as of the
Effective  Date and that the Promoter  Venturer has furnished Sony with true and
complete copies of all such agreements.

                    (C)  Where  applicable,   immediately   following  the  Sony
Venturer`s  acceptance  of an Artist,  the  Promoter  Venturer  shall cause that
Artist to enter into an exclusive term  recording  agreement with the Venture in
accordance  with  paragraph  6.01 and  Appendix A hereto or as  provided in this
section  4.02(e)(iii).  The Promoter Venturer shall deliver a duplicate original
of each such  agreement  to the Sony  Venturer  within  ten (10) days  after its
execution.

                                       19
<PAGE>

                    (f) Obligation to Advise Sony Venturer-,  Consultation.  The
Promoter  Venturer shall provide the Sony Venturer with prompt written notice of
all  significant  Occurrences in connection  with the business and operations of
the Venture,  including,  without  limitation,  the entering  into of any Artist
Agreement. Such notice shall be directed to the offices specified for notices in
paragraph  18.04.  The Promoter  Venturer  shall  furnish the Sony Venturer with
fully executed  copies of all agreements or contracts  entered into on behalf of
the  including  all  Artist  Agreements  or any  other  agreement  creating  any
financial obligation for the Venture.

                    (g)  Right of First  Refusal.  The  Promoter  Parties  shall
submit  to  the  Sony  Venturer  every  business  transaction  (together  with a
description of the terms thereof) that any Promoter Party proposes to enter into
with a third party and that  involves any of the same lines of business as those
engaged in by the Sony Venturer,  Parent or any of their  Affiliates  (including
music publishing and merchandising).  The Sony Venturer,  Parent or any of their
Affiliates  shall have a right enter into such business  transaction with any or
all of the Promoter  Parties,  on the same terms as those  submitted to the Sony
Venturer and, in the event the Sony Venturer,  Parent or any of their Affiliates
exercises  such right,  the Promoter  Parties  shall have no right to enter into
such business  transaction with such third party. In the event the Sony Venturer
elects  not to enter  into  such  transaction,  the  Promoter  Patties  shall be
entitled to enter into such business  transaction only with such third party and
only pursuant to the same terms as submitted to the Sony Venturer_

                    (h) Legal and Business Affairs.  The Promoter Venturer shall
have all legal affairs and business  affairs  responsibilities  for the Venture.
The Promoter Venturer shall have  responsibility  for the negotiation,  drafting
and execution, on behalf of the Venture, of all Artist Agreements, and all other
agreements,  licenses,  approvals,  consents and  permissions  necessary for the
exploitation  of Master  Recordings  and all other  products  and  assets of the
Venture, whether tangible or intangible,  subject to the terns and conditions of
this Joint  Venture  Agreement.  The Sony  Venturer  shall have no obligation to
provide any legal services to or on behalf of the Venture.  Notwithstanding  the
preceding three sentences, the Sony Venturer shall have the right to approve the
selection of any legal representative to act on behalf of the Venture, including
any attorney  retained to represent the Venture in connection  with any claim or
litigation.  The Sony Venturer  shall also have the right to approve and control
the course of any litigation or settlement of any such claim, and to approve any
settlement relating thereto.

     4.03 Sony Venturer Responsibilities and Authority.

          (a)  Financial  and  Accounting  Matters.  Subject  to the  terms  and
conditions of this Joint Venture  Agreement,  the Sony Venturer will control the
financial and accounting of the Venture, including,  without limitation, the (i)
collection of all Revenues and receipts of the Venture,  (ii)  investment of all
funds of the Venture and (iii) disbursement of all payments by the Venture.  The
Promoter Venturer will provide the Sony Venturer with all information  necessary
to make all such  payments on a timely  basis.  The Sony  Venturer may, if it so
chooses, in its sole discretion,  select all accountants and other professionals
that perform  services for the Venture_  Unless the Sony Venturer  agrees to the
contrary in writing in each  instance,,  and without  limiting the generality of
subparagraph  4.02(h) above,  the Sony Venturer shall have no obligation for the
day-to-day  business  and  legal  affairs  of the  Venture  (including,  without
limitation,  the drafting,  negotiation and execution, on behalf of the Venture,
of Artist Agreements and all other agreements, licenses, approvals, consents and
permissions  necessary for the  exploitation of Master  Recordings and all other

                                       20
<PAGE>

products and assets of the Venture, whether tangible or intangible,  pursuant to
this Joint Venture Agreement);  provided,  however, that the Sony Venturer shall
have  exclusive  authority  and  responsibility  on  behalf of the  Venture  for
business and legal  affairs  pertaining  to so-called  "ancillary"  licensing of
Recordings, Records and other assets of the Venture to third parties (subject to
any limitations in respect thereof elsewhere in this Joint Venture Agreement).

          (b) Manufacturing. The Sony Venturer, through itself, Parent and their
respective  Licensees and Affiliates,  shall have exclusive  responsibility  for
providing manufacturing services to the Venture as specified in paragraph 8.01.

          (c) Distribution.  The Sony Venturer at all times shall have exclusive
responsibility for providing  distribution  services to the Venture as specified
in paragraph  8_02,  and otherwise  exploiting  Master  Recordings and all other
assets of the Venture, whether tangible or intangible,  throughout the Territory
in any manner and in any medium.

          (d) Royalties.  The Sony Venturer shall have exclusive  responsibility
on behalf of the Venture for the  disbursement  of payments  of, the  accounting
for, and the preparation of royalty statements to Artists concerning,  royalties
(including  mechanical  royalties) for each Master  Recording in accordance with
the terms of the applicable  Artist  Agreement and such royalties.  The Promoter
Venturer shall provide to the Sony Venturer  information  necessary to determine
the amount and the recipient of royalties.  If the Promoter  Venturer incurs any
cost which  would  constitute  a  recoupable  item under the  applicable  Artist
Agreement, Promoter Venturer will promptly notify the Sony Venturer of such cost
and its recoupability under such Artist Agreement.

          (e)  Other   Administrative   Matters.  The  Sony  Venturer  shall  be
responsible  for such other  administrative  services to the Venture as the Sony
Venturer and the Promoter Venturer shall mutually agree.

          (f) Artwork.  The Sony  Venturer,  in  consultation  with the Promoter
Venturer  shall have  responsibility  for the  preparation  and  delivery to the
Venture of all the artwork (the  "Artwork")  for all Records in connection  with
the initial  release of such  Record,  together  with any third  party  releases
related  thereto.  Matters  relating to  trademarks,  copyrights or other notice
elements of the Artwork or background  thereof,  including,  without limitation,
UPC  symbols,  or  any  disclosures  deemed  advisable  by the  Sony  Venturer`s
attorneys  shall be subject to the Sony  Venturer`s  discretion.  Subject to any
rights of any  unaffiliated  third  party  therein,  the Artwork and all related
material  delivered  pursuant to this  paragraph,  including the  copyrights and
renewals and extensions of copyright therein and thereto,  shall be the property
of the Venture  throughout  the world in  perpetuity.  The logo of Parent  shall
appear on all Artwork in the Sony Venturer`s discretion.

          (g)  Marketing   and   Promotion.   The  Sony   Venturer   shall  have
responsibility  for and  agrees to  undertake  all  activities  relating  to the
marketing,  publicity and  promotion of Recordings  and Artists on behalf of the
Venture,  subject to any  marketing  fund budget set forth in the Plan  (defined
below  in  subparagraph  4.05(a))  and the  limitations  set  forth  in the next
sentence.  Prior to  undertaking  any such  marketing,  publicity  or  promotion

                                       21
<PAGE>

activities or related the Sony Venturer will consult with the Promoter  Venturer
in respect of a detailed  marketing  campaign outline with respect to each Album
(or other recording  project) and Artist,  covering,  among other things,  video
production, advertisement, merchandising and promotion expenses and plans_

          (h)  Administrative  Services  Fee.  As  compensation  for the various
services  agreed  to be  performed  by the  Sony  Venturer  hereunder,  the Sony
Venturer shall be entitled to deduct and retain from Revenues of the Venture, an
amount (the  "Administrative  Services  Fee") equal to ________  (__%)of the Net
Billings.  In addition,  the Venturer shall  reimburse the Sony Venturer and its
Affiliates for any out-of-pocket expenses incurred by them (except to the extent
directly related to the  manufacturing  and distribution  referred to in Article
8).

     4.04  Employment  Agreement.  Each Principal shall enter into an Employment
the Venture in the form  attached  hereto as Exhibit B to provide  the  services
required to be provided herein by the Promoter Venturer.  The Sony Venturer,  in
its sole discretion, shall be permitted to enforce the Employment Agreements and
to take all action with  respect  thereto on behalf of the  Venture  without the
consent of the Promoter Venturer.

     4.05 Business Plan; Management Reporting.

          (a) Business  Plan and Budgets.  At least sixty (60) days prior to the
commencement  of  each  Contract  Year  or at  such  other  time  prior  to  the
commencement of each Contract Year as the Sony Venturer shall request,  Venturer
shall  submit to the Sony  Venturer a detailed  business  plan for the  Venture,
which shall include an overhead budget for the next Contract the approval of the
so approved by the Sony Venturer (the "Plan"). The Plan for the Initial Contract
Year is attached  hereto as Exhibit B. For each  Contract Year  thereafter,  the
Plan shall contain information of a type substantially  similar to that included
in the Plan attached hereto as Exhibit B,  including,  without  limitation,  the
particular the budget  contained  herein.  The Plan,  among other things,  shall
include overhead, marketing and recording fund budgets not inconsistent with the
parameters set forth in paragraph  5.02. The Plan shall also include a projected
release  schedule,  a projected  profit and loss statement with all  appropriate
items for the  upcoming  fiscal  year,  and  projections  for the number of each
Record to be sold during the upcoming  Contract  Year.  Approval of each Plan by
the Sony Venturer shall not be  unreasonably  withheld and shall not be withheld
by the Sony  Venturer  solely  for the  reason  that the  overall  amount of the
overhead  budget is too high so long as such overall amount overhead budget does
not exceed the Maximum  Overhead  Amount.  "Maximum  Overhead  Amount" means the
amounts specified below for each Contract Year, which amount may be increased or
reduced by the mutual of the Venturers  based on the performance of the Venture,
including  the  Venture`s  profitability.  If the parties shall not reach on the
Plan  prior  to the  beginning  of  army  Contract  Year,  the  budget  for  the
expenditures  for such  Contract Year shall be equal to the  applicable  Maximum
Overhead  Amount.  The Venture shall not make any material  expenditure or incur
any material expense not provided for in the Plan for Me relevant  Contract Year
or otherwise  provided  for in this Joint  Venture  Agreement  without the prior
written  consent of each Venturer.  The Maximum  Overhead Amount for each of the
respective Contract Years of the Term is set forth below:

                                       22
<PAGE>

               Contract Year                 Maximum Overhead Amount

For the avoidance  doubt,  following the  expiration or termination of the Term,
the  obligation  of the Sony Venturer to provide  loans,  Venture Loans or other
funding to cover the  Overhead  Costs shall cease  altogether.

          (b)  Management_  Information  Systems  and  Reporting.  The  Promoter
Venturer, with the assistance of the Sony Venturer,  shall and maintain standard
management  reporting  systems and will  prepare  standard  periodic  management
reports regarding,  among other things,  release schedules,  Artist signings and
negotiations,   marketing  plans  and  financial  results,  including  overhead,
marketing  and   recording   expenditures.   To  facilitate   the  Transfer  and
presentation  of  management,  financial  and  other  information  to  the  Sony
Venturer, the Venture shall prepare and maintain its books and records and other
information systems in a manner compatible with the reasonable information needs
and  requirements of the Sony Venturer and shall use such accounting  principles
as are required by the Sony Venturer. Without limiting the foregoing, guidelines
with respect to financial documents and records, including,  without limitation,
documentation required to support  disbursements,  shall be the same as those of
the Sony Venturer and its Affiliates. In particular, original receipts or copies
of original invoices and/or receipts shall be required for all disbursements and
Venture expenses.

5.   FINANCE

     5.01 Fiscal Year.  The fiscal year of the Venture  shall end on March 31 of
each year and the  taxable  year shall be  determined  under  Section 706 of the
Code.

     5.02 Budgets and Expenditures.

     (a)  Overhead  Budgets.  The Overhead  Costs for a Contract  Year shall not
exceed the overall amount for the overhead budget set forth in the Plan for such
Contract Year approved by the Sony Venturer.  Each overhead budget shall specify
in  reasonable  detail  each line item of expense to be  incurred by the Venture
related to Overhead Costs for the Contract Year concerned. Each line item of the
overhead expenditures of the Venture for each Contract Year shall not exceed the
amount for such line item set forth in the Plan for such Contract Year. Overhead
Costs will be expended by the Venture in accordance  with the approved  overhead
budget for such year.

     (b)  Recording  Funds;  Artist  Royalties.  Unless  the  Promoter  Venturer
receives  the prior  approval of the Sony  Venturer,  the Venture  shall only be
entitled to expend sums in respect of an Artist Agreement in accordance with the
requirements of paragraph 6.01 hereof, Appendix A and the Plan.

     (c) Other  Expenditures.  All other expenditures not otherwise provided for
this paragraph  5.02 shall be made only pursuant to the mutual  agreement of the
Venturers (and a budget agreed to in advance by the Venturers).  Unless the Sony
Venturer  consents or the  expenditure  is included in the Plan for the Contract
Year concerned,  the Venture will not incur  expenditures for performed or goods
provided  by  third  parties  that  any of  Parent,  the  Sony  Venturer  or any
Affiliates  of either of them is  prepared  to perform or provide at the same or
lower cost.

                                       23
<PAGE>

(d) Expenditures upon  Termination.  In the event the Term of this Joint Venture
Agreement  is  terminated  prior  to the end of a  Contract  Year,  the  amounts
specified  in the  budget  for such year  (including,  without  limitation,  the
Maximum  Overhead  Amount)  shall  be pro  rated  or  otherwise  adjusted  in an
appropriate  manner to reflect such termination and the expenditures to the date
of such  termination.  The  expenditures  of the Venture  for such period  shall
comply with the budget as so adjusted.

     5.03 Venture Loans.

          (a) During the Term and provided that none of the Promoter  Parties is
in default under any provision of this Joint Venture  Agreement  (including each
of the schedules,  exhibits,  appendices and other documents attached hereto) or
any  agreement  related  thereto  between any of them and the Venture,  the Sony
Venturer, the Parent or any of their Affiliates,  and subject to the limitations
set forth below,  the Sony Venturer,  from time to time, shall make, or cause to
be made, loans to the Venture or on the Venture`s behalf ("Venture  Loans"),  as
required  for the  operations  of the  Venture,  on the basis  provided  in this
paragraph 5.03.  Venture Loans may be used by the Venture for approved operating
expenses, to the extent funds are required (taking into account anticipated cash
receipts of the Venture) solely:

               (i) to finance Recording Costs paid by the Venture, not in excess
of the amounts set forth in the Plan;

               (ii) to finance Manufacturing Costs paid by the Venture;

               (iii) to finance  Overhead  Costs paid by the Venture,  not in of
the amounts set forth in the Plan;

               (iv) to  finance  Marketing  Costs  paid by the  Venture,  not in
excess of the amounts set forth the Plan;

               (v) to finance the Profit  Advances  paid  pursuant to  paragraph
5.05;

               (vi) to finance Royalty Costs;

               (vii) to finance the Distribution Fee;

               (viii) to finance the Administrative Services Fee;

               (ix) to finance Union Payments; and

               (x) to finance all other costs of the business of the Venture and
approved as part of the Plan,  or  otherwise  approved  by the Sony  Venturer in
writing in each instance.

          (b) The amount of outstanding  Profit  Advances and any other expenses
(including  Recording  Costs)  incurred  by the Sony  Venturer,  Parent or their
Affiliates  prior to the Effective  Date shall be Venture Loans under this Joint
Venture Agreement.

                                       24
<PAGE>

          (c) All  funds  of the  Venture  not used to pay  expenditures  of the
Venture shall be applied to repay interest on any outstanding  Venture Loans and
then to repay the principal amount of Venture Loans.

          (d) Interest  shall accrue on all  outstanding  Venture Loans from the
date that the  Venture  Loans are made or  deemed  to be made  hereunder  to the
Venture  until the date that Venture Loan has been repaid to or recovered by the
Sony Venturer. Interest shall accrue at a rate equal to the rate of interest per
annum publicly  announced by The Chase Manhattan Bank in effect at its principal
offices in New York City as its "prime  rate",  plus one percent  (1%)  interest
shall be  calculated  monthly on the average  Venture Loans  outstanding  at the
beginning and the end of each month based on the "prime rate" (plus one percent)
as of the end of such month.

          (e) The Sony  Venturer  shall have no obligation to make Venture Loans
after the expiration or earlier termination of the Term; provided,  that, to the
extent the Sony  Venturer  continues  as a  Venturer  in the  Venture  after the
termination  or  expiration  of the Term of this  agreement in  accordance  with
paragraph  14.05  hereof,  the  foregoing  clause shall not apply respect of any
funding obligation of the Venture (i) pursuant to an Artist Agreement,  the term
of which  survives  such  termination  or  expiration  of the Term hereof (e.g.,
Recording  Funds  pursuant to  paragraph  6 of  Appendix A hereto),  or (ii) any
approved  Marketing Costs in respect of an Artist Album Delivered in fulfillment
of the Recording  Commitment pursuant to any such Artist Agreement.  In no event
shall the Sony  Venturer  have any  obligation  to make Venture  Loans after the
earlier to occur of (i) the  Buy-out  Closing  Date  (defined in Article 9), and
(ii) the termination of the Venture in accordance with paragraph 14.01.

          (f) To provide  security  for the  repayment  of the Venture  Loans in
accordance  with this Joint  Venture  Agreement,  the Venture shall grant to the
Sony  Venturer  or  designee  a first  lien on,  and a first  priority  security
interest  in,  all  assets of the  Venture,  including,  without  limitation,  a
security  interest in, or collateral  assignment of, the Venture`s  interests in
any asset,  whether  tangible or  intangible,  or other  property  owned  and/or
controlled,   directly  or  indirectly,  by  the  Venture,  including,   without
limitation,  copyrights, Artist Agreements,  Master Recordings,  royalties, bank
accounts or any proceeds thereof. The Promoter Venturer agrees, on behalf of the
Venture,  to execute  (and  acknowledge,  if  requested)  and  deliver  all such
documents and other instruments and to perform all such acts as may be necessary
or appropriate to grant, convey, assign, transfer,  perfect, record or otherwise
effectuate  the  purposes of this  including  executing a security  agreement in
substantially  the form  attached  hereto as Appendix B. The  Promoter  Venturer
hereby appoints the Sony Venturer and its designees,  and each of them, its true
and lawful attorney-in-fact and agent, with full power of substitution,  for the
Promoter  Venturer (on behalf of the  Venture),  in any and all  capacities,  to
sign, deliver and file with any appropriate public or governmental  office, such
mortgages, security agreements,  statements, assignments and other documents and
instruments  contemplated by this  subsection.  Copies of any such documents and
instruments signed,  delivered or filed on behalf of the Promoter Venturer shall
be promptly provided to the Promoter Venturer.

     5.04 Profit Advances. Promptly after the complete execution and delivery of
this Joint Venture Agreement,  the Venture shall pay the Promoter Venturer, as a
guaranteed payment for services a Profit Advance of ____________________,  which
Profit  Advance  shall be  recoupable  by the Sony  Venturer  from the  share of
Profits  otherwise payable to the Promoter Venturer in accordance with paragraph
11.07.

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     5.05 Books and Records.

          (a) At all times during the  continuance  of the Venture,  each of the
Sony Venturer and the Promoter  Venturer shall keep or cause to be kept full and
complete books of account  accordance with GAAP applied on a consistent basis in
which they shall enter folly and accurately each transaction of the Venture. The
Sony Venturer and the Promoter Venturer shall maintain such books and records on
a basis  consistent  with a  system  of  accounts  and  records  and  reasonable
operating guidelines established by the Sony Venturer or accountants selected by
the Sony  Venturer.  The Promoter  Venturer shall provide the Sony Venturer with
such information as the Sony Venturer may reasonably  request to enable the Sony
Venturer  to keep or cause to be kept full and  complete  books and  accounts in
accordance with this  subparagraph  5_06(a).  Such books of account shall at all
times be maintained at the principal office of the Sony Venturer. All such books
and records of the Venture shall be open to the  inspection  and  examination of
the Venturers or their representatives  during reasonable business hours. Except
as  otherwise  provided  herein,  neither the  Promoter  Venturer nor any of its
Affiliates  shall have any right to  inspect or examine  any books or records of
Parent or any of its Affiliates.

          (b) In  addition  to  the  account  books  described  in  subparagraph
5.06(a),  the Venturers shall maintain  complete files and records regarding the
business of the Venture at the Venture`s  principal office.  Each Venturer shall
have unlimited access to such files and records at all times;  provided that The
books,  records  and  files of each  Venturer  maintained  with  respect  to its
business  unrelated to the Venture,  including  the books,  records and files of
Parent and its  Affiliates  relating  to the  distribution  and  manufacture  of
records, may not be reviewed by the Venture,  except as provided in subparagraph
5.07(b).

     5.06 Financial Statements.

          (a) Within 90 days after the close of each fiscal year of the Venture,
the Sony  Venturer  on behalf of the  Venture  shall  cause to be  prepared  and
submitted to each Venturer the following financial statements:

               (i) a balance  sheet of the  Venture  as at the end of the fiscal
year; and

               (ii)  statement  of profit and loss for such fiscal  year,  which
shows the items necessary to calculate the Profits for such fiscal year.

Any  subsequent  adjustment  in the  calculation  of Profits and any  additional
payment to the  Promoter  Venturer,  if any,  will be  promptly  remitted to the
Promoter Venturer.  If the Promoter Venturer was overpaid Profits,  the Promoter
Venturer will promptly reimburse the Venture for such overpayment.

          (b) (i) The Promoter  Venturer  may, at its own  expense,  examine the
Sony   Venturer`s   books  and  records  which  report  the  number  of  Records
manufactured,  sales of Records and other transactions  solely to the extent, if
at all, they relate to the calculation of Revenues, Gross Billings and Profit of
the Venture.  Promoter Venturer may make those examinations only for the purpose
of verifying the accuracy of the  statements  sent the Promoter  Venturer  under
this paragraph  5.07. The Promoter  Venturer may make such an examination  for a

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particular  statement  only once,  and only  within two (2) years after the date
when the Sony Venturer sends such statement to the Promoter Venturer.  (The Sony
Venturer  will be deemed  conclusively  to have sent the Promoter  Venturer each
statement on the date  prescribed in  subparagraph  5.07(a)  unless the Promoter
Venturer  notifies the Sony Venturer  otherwise,  with respect to any statement,
within  60  days  after  such  date.)  The  Promoter  Venturer  may  make  those
examinations  only during the Sony Venturer`s  usual business hours,  and at the
place where it keeps the books and records to be examined. The Promoter Venturer
will  required to notify the Sony Venturer at least 30 days before the date when
the Promoter Venturer plans to begin any such examination. The Sony Venturer may
postpone for 30 days the commencement of the Promoter Venturer`s  examination by
giving  notice to the Promoter  Venturer not later than 10 business  days before
the intended  commencement date specified in the Promoter  Venturer`s notice. If
the Sony Venturer postpones the commencement of such examination, the running of
the time within which the examination  may be made will be suspended  during the
postponement.  If the Promoter  Venturer`s  examination  has not been  completed
within one month from the time it begins,  the Promoter Venturer shall terminate
such  examination  within  seven  business  days (or such later date as the Sony
Venturer may permit) after receipt of a notice from the Sony Venturer requesting
such  termination.  The  Promoter  Venturer  will not be entitled to examine any
manufacturing records or any other records that do not specifically report sales
or other distributions of Records or other transactions  directly related to the
Venture.

               (ii) If the Promoter  Venturer has any  objections to a financial
statement of the Venture,  will give the Sony  Venturer  written  notice of such
objections and its reasons for them within two (2) years after the date when the
Sony Venturer sent the Promoter  Venturer such  financial  statement.  (The Sony
Venturer  will be deemed  conclusively  to have sent the Promoter  Venturer each
statement on the date  prescribed in  subparagraph  5.07(a)  unless the Promoter
Venturer  notifies the Sony Venturer  otherwise,  with respect to any statement,
within 60 days after such date.) each statement will become conclusively binding
on the  Promoter  Venturer  at the end of such two  (2)-year  period  unless the
Promoter  Venturer  objects,  and the Promoter  Venturer will no longer have any
right to make any other  objections  to it. The Promoter  Venturer will not have
the  right to sue or bring  any  legal  action  against  the  Sony  Venturer  in
connection with any financial statements or Profit distributions or allocations,
unless the  Promoter  Venturer  commences  such suit  within  that two  (2)-year
period.  If the Promoter  Venturer  commences  suit on any  controversy or claim
concerning accountings rendered under this Joint Venture Agreement, the scope of
the proceeding will be limited to  determination of the correctness of financial
statements  for the  accounting  periods  concerned,  and the court will have no
authority to consider any other issues or award any relief of any Profits  found
owing.  The  preceding  sentence  will  not  apply  to any  item in a  financial
statement if the Promoter  Venturer  establishes  that the item was fraudulently
reported.  The Promoter Venturer will not have any right to terminate this Joint
Venture Agreement or avoid the performance of its obligations under it by reason
of any claim under this subparagraph  5.07(b).

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<PAGE>

6.   ARTIST AGREEWNTS; RECORDING PROCEDURES

     6.01 Artist Agreements.

          (a) All Artist to be entered into between Venture and any Artist shall
be  substantially  in the form attached hereto as Exhibit C (as such form may be
revised by the Sony Venturer from time to time) (the "Standard Form Agreement");
provided that the recording funds, artist advances and royalty rates and certain
other terms set forth in each Artist  Agreement  shall conform to the parameters
specified  in this  Joint  Venture  Agreement  and  Appendix  A hereto.  Without
limiting the generality of the preceding sentence,  unless the Promoter Venturer
receives the prior approval of the Sony Venturer,  the Venture shall be entitled
to enter into only those Artist Agreements that:

               (i) provide for a firm  commitment  of no more than one (1) Album
from the Artist,  and options  granting  the a total of not fewer than seven (7)
Albums from such Artist;

               (ii) provide for Artist royalties of no more than the percentages
set forth

               (iii) except as set forth in this subparagraph  6.01(a),  provide
for  Recording  Costs  (including  Artist  advances) of no more than the maximum
amounts set forth in Appendix A;

               (iv)  provide  for a  mechanical  license  from the Artist to the
Venture for reproduction and distribution of any Composition written in whole or
in part by any Artist,  producer or  affiliate  thereof on Records at a rate not
exceeding  seventy-five  percent (75%) of the minimum compulsory  statutory rate
for the  reproduction of Compositions  on phonorecords  for  distribution in the
United  States,  nor  exceeding  seventy-five  percent  (75%)  of the  generally
prevailing  rate  in  Canada,   on  phonorecords  for  distribution  in  Canada,
calculated  in each case as of the date such album was Delivered or obligated to
be Delivered under such Artist Agreement,  with an aggregate maximum  mechanical
royalty obligation by the Venture not in excess of ten (10) times that amount in
respect of any Artist Album;

               (v)  provide  that (i) the  Venture may reject any request by the
Artist to record an Album which would constitute a Multiple Record Set; and (ii)
that the Artist must advise the Venture of the content of each medley  before it
is recorded; and

               (vi) provide that the Artist`s  submission  of  Recordings to the
Venture  shall  constitute  that  Artist`s  representation  that such Artist has
obtained all necessary licenses, approvals, consents and permissions.

          (b) Without limiting the generality of anything  subparagraph 6.01 (a)
above,  the Promoter  Venturer  shall notify the Sony  Venturer in writing as to
every Contract Period Option (as defined in Appendix A) contained in each Artist
Agreement  not later than one hundred and twenty  (120) days before the last day
on which the applicable option is exercisable,  and the Venturers shall mutually
approve  the  exercise  of any such  option,  subject to the  remainder  of this
subparagraph  6.01(b).  In the event the  Venturers  agree  that the  applicable
Contract Period Option should be exercised, the Promoter Venturer shall exercise

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<PAGE>

such option no earlier than sixty and no than thirty (30) days before,  the last
day on which the applicable  option is  exercisable,  and the Promoter  Venturer
shall Sony Venturer a copy of each such exercise of such option. If the Promoter
Venturer does not exercise any Contract Period Option it is required to exercise
hereunder as and when required hereunder, the Sony Venturer shall have the right
to cause such Artist Agreement (along with the then-current  unrecouped balance,
if any) to be  assigned  to the Sony  Venturer,  the Parent or their  Affiliates
(and, accordingly,  shall have the right to exercise the option concerned on the
Sony Venturer`s,  the Parent`s or their Affiliates`  behalf). If any such Artist
Agreement is assigned to the Sony  Venturer,  Parent or their  Affiliates  under
this subparagraph  6.01(b),  neither the Venture nor the Promoter Venturer shall
have any further right, title or interest in such Artist Agreement (financial or
otherwise)  or rights so  assigned or in any Master  Recordings  made under that
Artist Agreement subsequent to such assignment.

     6.02 Flow-Through  Clause.  Each Artist Agreement shall contain a provision
that provides  that the Artist will  entitled to terminate the Artist  Agreement
concerned by reason of a breach by the Promoter  Venturer or the Venture  unless
such Artist  notifies  the Sony  Venturer  of such breach or alleged  breach and
affords the Sony  Venturer an  opportunity  to cure such breach on the Venture`s
behalf.

     6.03 Studio  Selection.  The Promoter  Venturer shall not permit the use of
any studio if (i) its use would be inconsistent with any of the union agreements
of Parent or any of Affiliates,  (ii) the Sony Venturer anticipates that its use
would cause labor  difficulties for other reasons or would require  expenditures
inconsistent  with the amounts  set forth in the  applicable  Artist  Agreement,
(iii) its use  would  otherwise  in any way  hinder or  prevent  the  recording,
manufacture or release of the applicable  Master  Recordings or (iv) such studio
is owned in whole or in part by any  Principal or the Promoter  Venturer  unless
the rate  for the use  thereof  would be no  greater  than the  market  rate for
comparable facilities.

     6.04 Delivery of Master  Recordings.  The Promoter  Venturer  shall provide
that each Master Recording shall be Delivered to the Venture for the manufacture
and sale of Records.

     6.05 Compliance with Other  Requirements.  The Master  Recordings  shall be
produced in accordance  and otherwise  comply with the rules and  regulations of
the American Federation of Musicians,  the American Federation of Television and
Radio  Artists  and all other  unions  having  Jurisdiction,  including  without
limitation  paragraph  31 of the  1990-1993  AFTRA  Code  of Fair  Practice  for
Phonograph  Recordings (or the comparable provision of any successor agreement)-
All Persons  rendering  services in connection with the Master  Recordings shall
fully comply with the provisions of the immigration  Reform Control Act of 1986.
Each Artist is or will become and will remain, to the extent necessary to enable
the  performance of this Joint Venture  Agreement,  a member in good standing of
all labor unions or guilds, membership in which may be lawfully required for the
performance of each Artist`s services under the applicable Artist Agreement.

     6.06 Obscenity and Violence. The Sony Venturer shall be permitted to reject
on behalf of the  Venture any Master  Recording  if such  Master  Recording,  as
determined in the sole good faith opinion of the Sony Venturer`s counsel,  shall
(i) be  objectionable  on the basis of obscenity or violence,  (ii) constitute a
potential  defamation  or libel of, or violate any  personal,  property or other
right of, any Person or (iii)  constitute  a potential  violation  of any law or
governmental  regulation.  If the Sony  Venturer  rejects  any Master  Recording

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<PAGE>

pursuant to this paragraph 6.06, then such Master Recording shall not count as a
Master  Recording  Delivered to the Sony Venturer in  fulfillment of the Minimum
Delivery Commitment pursuant to subparagraph 4.02(c).

7.   RIGHTS IN RECORDINGS

     7.01 Ownership of Rights.

          (a) Each Master Recording shall,  from the Inception of Recording,  be
considered a work made for hire for the Venture. If any such Master Recording is
determined  not to be a work made for hire for the  Venture,  it shall be deemed
transferred  to the Venture by this Joint Venture  Agreement and the  applicable
Artist Agreement, together with all rights in it. All Master Recordings shall be
deemed to be recorded on the  Venture`s  behalf by the Artist  concerned and all
Records or other duplications whatever form now or hereafter known, manufactured
therefrom,   together  with  the  performances  embodied  therein,  shall,  from
Inception of Recording,  be the sole property of the Venture in perpetuity  free
from any claims by the Promoter Parties,  the Artist and all other Persons.  All
rights, under copyright,  udder contract or otherwise, in the Master Recordings,
including  under  representations  and warranties made in respect  thereof,  and
other properties produced or acquired in connection therewith, and all ancillary
rights,  shall be owned and  controlled  by the  Venture.  For the  avoidance of
doubt, the foregoing provisions of this subparagraph 7.01(a) shall also apply as
between the Promoter  Parties,  on the one hand, and the Sony  Venturer,  on the
other hand, with respect to all Master Recordings  recorded  hereunder (e.g., if
the  Principal  renders any  services as a producer  in  connection  with Master
Recordings  recorded in  fulfillment  of an Artist`s  Recording  Commitment  (as
defined in Appendix  A)), then the  foregoing  provisions  of this  subparagraph
7.01(a) shall apply in respect of the Principal`s  contributions with respect to
such Master Recordings).

          (b) Without limiting the foregoing,  the Sony Venturer and Parent,  on
behalf of the Venture, and any Person authorized by the Sony Venturer or Parent,
on behalf of the Venture, shall have the unlimited, exclusive rights, throughout
the  Territory:  (a) to  manufacture  Records,  form  and by any  method  now or
hereafter known,  derived from the Master Recordings;  (b) to sell,  transfer or
otherwise deal in the same under any trademarks,  trade names and labels,  or to
refrain  manufacture,  sale and  dealing;  (c) to  reproduce,  adapt,  transmit,
distribute,  communicate  and otherwise use the Master  Recordings in any medium
and any manner,  including but not limited to use in audiovisual works,  without
payment of any  compensation  to the Promoter  Venturer or any Artist except the
payments,  if any,  which  may be  expressly  prescribed  for the use  concerned
hereunder or under the applicable Artist Agreement;  and (d) to publicly perform
or to permit the public  performance of the Master  Recordings by means of radio
broadcast, cable transmission,  satellite transmission,  television broadcast or
any other method now or hereafter known.

     7.02 Copyright  Registration.  The Sony Venturer, on behalf of the Venture,
shall  have   exclusive   responsibility   for  and  authority   over  copyright
registrations  and for such  other  administrative  matters in  connection  with
rights  arising out of Master  Recordings  and any other rights  acquired by the
Venture,  and shall have the exclusive right to copyright each Master Recording,
apply for such  registrations in the name of the Venture as author and owner and
to secure any and all  renewals  and  extensions  of  copyright  throughout  the
Territory.  The Promoter Venturer,  on behalf of the Venture,  shall furnish the

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Sony  Venturer  promptly  with  all  information,   instruments,  and  documents
requested by the Sony Venturer for such purposes. The Sony Venturer,  Parent and
their  Affiliates and designees may sign such  instruments  and documents in the
name of the  Venture  and  make  such  disposition  of them as is  necessary  or
desirable to accomplish the foregoing. The Sony Venturer shall provide copies of
all copyright registrations to the Promoter Venturer upon the written request of
the Promoter Venturer.

     7.03  Power  of  Attorney.   Each  of  the  Promoter  Parties   irrevocably
authorizes,  empowers,  and  appoints  the Sony  Venturer as its true and lawful
attorney (a) to initiate and compromise  any claim or action against  infringers
of the rights of the Venture in Master Recordings and (b) to execute in the name
of any  party  hereto,  as the  case  may  be,  any  and  all  documents  and/or
instruments  necessary or desirable to accomplish  the  foregoing.  The power of
attorney granted herein is coupled with an interest and is irrevocable.

7A.  NAME AND LIKENESS RIGHTS
     7A.01.  The- Venture shall have the perpetual right,  without any liability
to any  Person,  to  use  and to  authorize  other  Persons  to  use  the  names
(including,  without  limitation,  all professional,  group and other assumed or
fictitious  names or  sobriquets),  likenesses and  biographical  material of or
relating to each Promoter Party on and in connection  with the  exploitation  of
Records  hereunder,  on  Internet  websites  and for  purposes  of  advertising,
promotion and trade and in connection  with the  marketing and  exploitation  of
Records  hereunder and general  goodwill  advertising  (advertising  designed to
create  goodwill  and  prestige  and not for the purpose of selling any specific
product or  service)  without  the  payment of  additional  compensation  to any
Promoter  Party.  Sony  and  its  Licensees  shall  have  the  exclusive  right,
throughout  the world,  and shall have the  exclusive  right to authorize  other
Persons,  to create,  maintain  and host any and all  websites  relating  to the
Venture and each Artist and to register and use the name and "[Venture].com" and
any  variations  thereof which embody the Artist`s name or the Venture`s name as
Uniform  Resource  Locators  (or  "URL`s"),  addresses  or domain names for each
website created by Sony in of the Artist or the Venture (each an "Artist/Venture
Site").  All such websites and all rights thereto and derived therefrom shall be
Venture`s  property  throughout  the Territory and in  perpetuity.  The Promoter
Venturer  warrants and represents  that the use of such names,  likenesses,  and
biographical  materials as  described  above in this  paragraph  7A.01 shall not
infringe upon the rights of any Person.

8.   MANUFACTURING AND DISTRIBUTION

     8.01 Manufacturing.  All Record pressing and other  manufacturing  services
obtained by the Venture the United  States shall be obtained  solely from Parent
and Its  Affiliates on the same terms that similarly  situated  joint  ventures,
partnerships  or affiliated  labels of Parent obtain such services and at prices
equal  to the  internal  charges  incurred  by  such  similarly  situated  joint
ventures,  partnerships or affiliated labels of Parent for such services as such
terms and prices may vary from time to time.

     8.02 Distribution.

          (a) The Sony shall  perform  or shall  cause  Parent to  perform  U.S.
distribution  for the  Venture  in a  manner  consistent  with  Parent`s  or its
Affiliates,  performance of such services for similarly situated joint ventures,

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<PAGE>

partnerships  or  affiliated  labels  of  Parent.  The  such  distribution  (the
"Distribution  Fee")  shall  be  __________  (__%)  of the Net  Billings  of the
Venture.

          (b)  Distribution,  promotion,  and  other  customary  label  services
outside the United  States  shall be  performed  by  Affiliates  or Licensees of
Parent on the terms and subject to the payment of the fees set forth on Schedule
B hereto.

          (c) To the extent  not  covered by  paragraphs  (a) or (b) above,  all
products, Master Recordings and other assets of the Venture, whether tangible or
intangible,  of the  Venture  shall  be  exploited  as the Sony  Venturer  shall
determine.

          8.03 Label  Services.  In respect of label  services  referenced to in
subparagraph 4.03(e), the Parent shall be entitled to charge the Venture and the
Venture shall reimburse the Parent for those costs incurred by the Parent and/or
the Sony  Venturer  in  providing  such  label  services  which are  customarily
incurred as costs paid to third parties.

          8.04 Other Services.  For any services (other than the  manufacturing,
distribution,  administrative and label services referred to in paragraph 403 or
goods  furnished  to  the  Venture  by  the  Sony  Venturer,   Parent  or  their
Affiliates),  the Sony Venturer shall be entitled to charge the Venture a fee to
be mutually  agreed upon by the Venturers plus any actual  expenses  incurred by
the Sony  Venturer,  Parent or their  Affiliates  related the  provision of such
services or goods.  All charges to the Venture by the Sony  Venturer,  Parent or
any of their shall be paid  monthly by the  Venture (or by the Sony  Venturer on
behalf of the  Venture),  except as otherwise  specified  in this Joint  Venture
Agreement.

9.   BUY-OUT OPTION

     9.01 Buy-out Option. Either Venturer shall have the option,  exercisable by
sending the other Venturer a notice (the "Buy-out  Election Notice") not earlier
than the Buy-out  Trigger Date, and not later than sixty (60) days following the
Buy-out  Trigger Date, to trigger the buyout  provisions of this paragraph 9.01.
Within 30 days after such  Buy-out  Election  Notice,  the Sony  Venturer  shall
render a good faith  estimate  of the  status of the  accounts  of the  Venture,
including undistributed Profits, outstanding Venture loans and unrecouped Profit
Advances  (the  "Interim  Statement").  Within  30 days  after the date the Sony
Venturer  delivers the Interim  Statement,  the Promoter  Venturer shall deliver
written notice (the "Buy-out  Price  Notice") to the Sony Venturer  specifying a
price  (which price shall be for 50% of the equity  value of the  Venture).  The
Sony Venturer will then have an irrevocable  option for a period of 30 days from
receipt of the Buy-out Price Notice to agree to purchase,  which  purchase shall
occur within 30 days after the Sony  Venturer has sent notice of its exercise of
such  option,  the  Promoter  Venturer`s  share  of the  Venture  for the  price
specified  in the  Buy-out  Price  Notice  (subject  to  adjustment  pursuant to
paragraph  9.02). If the Sony Venturer does not exercise the option prior to its
expiration,  then the Promoter Venturer shall purchase the Sony Venturer`s share
of the Venture for the price  specified in the Buy-out Price Notice  (subject to
adjustment pursuant to paragraph 9.02) on the date that is 60 days after sending
the Buy-out Price Notice.  In the event the ,Promoter  Venturer fails to fulfill
such  obligation to purchase the Venture by such date,  the Promoter  Venturer`s
equity interest in the Venture shall be forfeited to the Sony Venturer.

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     9.02 Payments and Recoupment of Advances and Loans.

          (a) If either Venturer purchases the other Venturer`s  interest in the
Venture  pursuant  to this  Article 9, then the selling  Venturer  shall also be
entitled to receive the balance of all undistributed if any, attributable to its
ownership  interest  in the  Venture  up to the  end  of the  Term  as it may be
terminated.  The Sony Venturer shall deliver to the Promoter  Venturer within 90
days after the end of the Term  financial  statements  in order to determine the
Profits distributable to each of the Venturers as of the end of the Term. At the
Buyout  Closing (or as soon as practicable  after such financial  statements are
delivered)  the Venturer  which sold its  interest  shall be entitled to receive
from the Venture (or the  purchasing  Venturer) an amount equal to such Profits.
Additionally,  (A) one hundred percent (100%) of the unrecouped  Profit Advances
shall be either (i) deducted  from the price to be paid by the Sony  Venturer to
purchase  the  Promoter  Venturer`s  interest in the Venture or (u) added to the
price to be paid by the  Promoter  Venturer  to  purchase  the  Sony  Venturer`s
interest  in the  Venture  and  percent  of any  amounts  allocated  to the Sony
Venturer pursuant to subparagraph  11.05(b) and not otherwise  recouped pursuant
to subparagraph  11.04(b) shall be either (1) deducted from the price to be paid
by the Sony Venturer to purchase the Promoter Venturer`s interest in the Venture
or (ii) added to the price to be paid by the  Promoter  Venturer to purchase the
Sony Venturer`s interest in the Venture.

          (b) If the Promoter Venturer purchases the Sony Venturer`s interest in
Venture, then all outstanding Venture Loans and all unpaid or unreimbursed costs
incurred by the Sony Venturer or its Affiliates that are reimbursable under this
Joint Venture  Agreement and any other unpaid  obligations of the Venture to the
Sony  Venturer,  Parent  or their  Affiliates  shall be due and shall be paid or
repaid to the Sony  Venturer  or its  Affiliates  by the  Promoter  Venturer  or
otherwise at the Buy-out Closing.

          (c) If the amount  payable by the Sony Venturer would equal a negative
amount as a result of the deductions  provided for in this paragraph  9.02, then
the Sony Venturer shall pay $1.00 to the Promoter Venturer and such amount shall
constitute payment in full for the acquisition of all of the Promoter Venturer`s
interest in the Venture and the Sony  Venturer  and Parent shall have no further
obligation to the Promoter Venturer hereunder.

     9.03  Buy-out  Closing.  Subject  to  paragraph  9.01,  the  closing of any
purchase provided for in this Article 9 (the "Buy-out Closing") shall be held at
such time and place as the parties may agree (such date,  the  "Buy-out  Closing
Date"). The applicable  purchase price shall be payable in cash by wire transfer
of same day funds.

     9.04  Acquisition  of Promoter  Venturer`s  Interest.  If the Sony Venturer
acquires the Promoter  Venturer`s  interest in the Venture pursuant to paragraph
9.01,  effective as of the Buy-out Closing Date the Promoter Venturer shall have
no further  consent,  approval  or  consultation  rights  pursuant to this Joint
Venture Agreement, any Artist and/or any other rights acquisition agreement.

     9.05 Indemnification after Buy-out. After the Buy-out Closing, the Venturer
that  purchased  the interest of the other  Venturer  shall  indemnify  and hold
harmless the Venturer  That sold its interest in the Venture and its  Affiliates
against  all  losses,  liabilities,   damages,  costs  and  expenses  (including
reasonable attorneys` fees and expenses) relating to the business and operations

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of the Venture  both before and after the Buy-out  Closing;  provided  that such
indemnification  shall not  release  the  indemnified  party for any  obligation
arising as a result of a breach of this Joint Venture Agreement.

     9.06  Post-Buyout.  If the Sony Venturer sells its interest to the Promoter
Venturer  under this Article 9, the Sony Venturer will retain  customary  record
industry  sell-off rights in respect of existing Records  inventory for a period
of nine months after the Buy-out Closing (the "Sell-Off  Period"),  which rights
will be (solely with respect to current configurations of Records) for the first
six months of the Sell-Off Period and non-exclusive thereafter,  and the parties
will cooperate in the transition (in accordance  with custom and practice in the
Record  industry,  including  processing  returns and credits) of the  Venture`s
distribution to one or more third parties following the Buy-out Closing.

10.  CERTAIN AGREEMENTS

     10.01 Exclusivity. At all times during the Term, the Principal(s) shall, as
a material obligation of the Promoter Venturer hereunder, oversee the day-to-day
administration  of the Promoter  Venturer  and the Venture  (except as expressly
provided in this Joint Venture Agreement). The Promoter Parties acknowledge that
the Principal(s`) services are of a special,  unique and extraordinary character
which  gives them a peculiar  value,  and that,  in the event of a breach of any
condition,  representation,  warranty,  covenant or agreement  contained in this
Joint Venture  Agreement or in the Employment  Agreement,  the Sony Venturer and
the Venture shall be caused irreparable  injury,  including loss of goodwill and
harm to  reputation,  which cannot be adequately  compensated  in monetary Other
than (i) with respect to the Principal(s),  pursuant to the terms of [his] [her]
[their]  Employment  Agreement(s)  with  the  Venture,  or  (ii)  as  explicitly
otherwise permitted by the terms of this agreement,  during the Term none of the
Promoter  Parties,  shall  engage or hold any  interest in any way,  directly or
indirectly,  in the  recorded  music  business or any other  aspect of the music
business,  including,  without  limitation,   submitting  or  assisting  in  the
submission of any artists to any recording  company or any  publishing  company,
directly or indirectly. The Promoter Venturer acknowledges that each Principal`s
services are unique and extraordinary. If a Principal commits an act of Material
Default during the Term,  then the Principal shall not, at any time prior to the
of (i) insert  last day of Term,  each such date as  extended by one (1) day for
each day that the Initial Period the applicable Option Period, as applicable, is
extended or  suspended  as expressly  provided  elsewhere in this Joint  Venture
Agreement,  and  (ii)  the date  one (1)  after  the  date on which  the Term is
terminated  pursuant to clause (C) of  subparagraph  14.01 (ii) below (such date
that is the  earlier  of the dates  specified  in  clauses  (i) and (ii) of this
sentence,  the  "Non-Competition  Date"),  engage in record  production,  record
distribution,   video  production,  video  distribution,  music  related  artist
management,  music related artist  merchandising or other music related business
in the United States nor will such Principal accept  employment,  consult for or
participate,  directly or indirectly,  in the ownership or management of any the
United States engaged in such a business.  Without limiting the Venture`s or the
Sony  Venturer`s  other  remedies,  in the  event of the  Principal`s  actual or
threatened breach of this paragraph,  the Venture and the Sony Venturer shall be

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entitled to injunctive relief to enforce it. Prior To the  Nom-Competition  pate
none of the Promoter  virtue of any action taken or information  supplied by any
of the Promoter  Parties,  hire, offer hire, entice away, or in any other manner
persuade or attempt to persuade any officer,  employee,  agent,  representative,
customer or performer of the Venture,  the Sony Venturer,  Sony Music, Parent or
any Affiliate to discontinue his or her relationship with the Venture,  the Sony
Venturer, Sony Music, Parent or any Affiliate. Without limiting the Venture`s or
the Sony Venturer`s other remedies, in the event of a Promoter Party`s actual or
threatened breach of this paragraph,  the Venture and the Sony Venturer shall be
entitled to injunctive relief to enforce it.

     10.02 Affiliated Transactions. Except as contemplated by this Joint Venture
Agreement,  the  Venture  shall nor,  and each  Venturer  agrees it shall not on
behalf of the Venture, directly or indirectly, enter into or permit to exist any
transactions (including without limitation the purchase, sale, lease or exchange
of any property or rendering of any services) with any  stockholder or Affiliate
of or any Controlled Entity or any transaction in which such Venturer (or in the
case of the  Promoter  Venturer,  any  Promoter  Party) has a direct or indirect
interest (other than the indirect  interest held by virtue of an interest in the
Venture),  unless (i) the nature of such relationship or interest has been fully
disclosed to the other  Venturer and (ii) such other  Venturer has  consented to
such  transaction;  provided  that this  paragraph  10.02 shall not restrict any
transaction between the Venture and Parent or its Affiliates; provided, further,
that any material transaction between the Venture and Parent that is not already
contemplated  in this Joint Venture  Agreement  will not be entered into without
the approval of the Promoter Venturer.

     10.03  Life  Insurance.  The  Sony  Venturer  may  in its  sole  discretion
throughout  the Term  obtain or cause the  Venture  to obtain  insurance  on the
Principal(s)  and any Artist in such amounts as the Sony Venturer  determines in
the name and for the benefit of the  Venture,  and, the cost and expense of such
insurance shall be an expense of the Venture.  The Principal(s) shall (and shall
cause each Artist to) cooperate in physical  examinations,  supply  information,
and documents, and otherwise cooperate fully with the Sony Venturer, as the Sony
Venturer  may  request  in  connection  with any such  insurance.  The  Promoter
Venturer and the  Principal(s)  represent  and warrant  that, to the best of the
Promoter Venturers and the Principals`  knowledge,  the Principal(s) are in good
health and do not suffer from any medical  condition  which might interfere with
the  timely  performance  of their  obligations  under this  Joint  Venture  The
Promoter  Venturer will not be deemed in breach of this Joint Venture  Agreement
by reason of the inability to obtain any such insurance,  unless it results from
failure by the  Promoter  Venturer or the  Principal(s)  or any Artist to comply
with  the  Promoter  Venturer`s  and  the  Principals`  obligations  under  this
paragraph 10.03.

11.  CAPITAL ACCOUNTS

     11.01  Establishment  of Accounts.  The Venture  shall  maintain a separate
capital  account (a "Capital  Account")  for each of the Sony  Venturer  and the
Promoter   Venturer.   Each   capital   contribution   made   by   a   Venturer,
including-contributions to the Venture made pursuant to paragraph 2.05, shall be
credited to the Capital Account of such the date such contribution of capital is
paid to the Venture.  Each Venturer`s  Capital Account shall be increased by (i)
the  amount  of cash and the  Carrying  Value of any asset  contributed  by such
Venturer  to the  pursuant  to  this  Joint  Venture  Agreement  and  (ii)  such
Venturer`s  allocable share of Net Income and any special  allocations of income
or gain;  and decreased by (x) the amount of cash and the Carrying  Value of any
property  distributed  to such  Venturer by the  Venture  pursuant to this Joint
Venture  Agreement and (y) such  Venturer`s  allocable share of Net Loss and any
special  allocations of loss or deduction.  Venture Loans made to the Venture by
the Sony Venturer pursuant to paragraph 5.03 shall not constitute  contributions
to capital  unless  the Sony  Venturer  shall so elect in its sole and  absolute
discretion.  It is the  intention  of  Venturers  that each  Venturer`s  Capital

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<PAGE>

Account shall be  maintained  in accordance  with the rules set forth in Section
1.704-1(b)(2)(iv)  of the  Regulations  promulgated  under Section 704(b) of the
Code,  as they may be amended or  revised,  and to the extent that the rules set
forth therein with respect to the maintenance of Capital Account balances differ
from the provisions of this paragraph  11.01,  the rules set forth therein shall
apply.

     11.02 Withdrawal.  A Venturer shall not be entitled to withdraw all or arty
pan of its  Capital  Account or to receive  any  distribution  from the  Venture
except (i) solely  pursuant to  paragraph  11. 07, (ii) as  otherwise  agreed in
writing by the other Venturer or (iii) upon  dissolution of the Venture pursuant
to the provisions of this Joint Venture Agreement

     11.03 Provision of Services. Services, if any, rendered to the Venture by a
Venturer (or an Affiliate of a Venturer)  shall not constitute a contribution to
the capital of the Venture and shall not be  reimbursable  by the Venture except
as specifically  provided in this Joint Venture Agreement or as otherwise agreed
by the Venturers.

     11.04 Allocations of Net Income.  Except as provided in paragraph 14.03 and
after giving effect to the special  allocations set forth in paragraph 11.06, if
any, Net Income for any tax year will be allocated to the Venturers as follows:

          (a)  First,  to each  Venturer  having  an  Adjusted  Capital  Account
Deficit,  in proportion to and to the extent of such  Adjusted  Capital  Account
Deficit;

          (b) Second, to the Sony Venturer to offset losses previously allocated
pursuant to subparagraph 11.05(b) and not otherwise previously recouped pursuant
to this subparagraph 11-04(b);

          (c) Third, 50% to the Sony and 50% to the Promoter  Venturer to offset
losses previously allocated pursuant to subparagraph  11.05(a) and nor otherwise
previously recouped pursuant to this subparagraph 11.04(c);

          (d) Fourth,  100% (up to the aggregate  amount of the Profit  Advances
distributed to the Promoter Venturer) to the Sony Venturer; and

          (e) Fifth, 50% to the Sony Venturer and 50% to the Promoter Venturer.

     11.05 Allocation of Loses.  Except as provided in paragraph 14.03 and after
giving effect to the special  allocations set forth in paragraph  11.06, if any,
Net Loss for any tax year will be allocated to the Venturers as follows:

          (a) First, 50% to the Sony Venturer and 50p%% to the Promoter Venturer
until the Promoter Venturer`s Capital Account is reduced to Zero; and

          (b) Second, 100% to the Sony Venturer.

     11.06 Special Allocations.

          (a) The provisions of the Regulations  promulgated  under Code Section
relating to the qualified income offset,  minimum gain chargeback,  minimum gain
chargeback  with  respect  to  Venturer  nonrecourse  debt,  the  allocation  of
nonrecourse  deductions  and the  allocation  of  items  of  deduction,  loss or

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<PAGE>
expenditure  relating to Venturer  nonrecourse  debt are hereby  incorporated by
reference  and shall be applied to the  allocation  of Venture  items of income,
gain, loss or deduction in the manner provided in such Regulations_ However, The
Venturers do not intend that the "deficit restoration  obligation"  described in
Section  1.704-1(b)(2)(ii)(e)  of the  Regulations  or any  successor  provision
thereto be incorporated into this Joint Venture Agreement.  For purposes of this
paragraph  11.06,   nonrecourse  deductions  (other  than  Venturer  nonrecourse
deductions) shall be allocated between the Venturers equally.

          (b) In the event that items of income,  gain,  loss or  deduction  are
allocated to one or more  Venturers  pursuant to  subparagraph  11.06(a)  above,
subsequent  items of income,  gain,  loss or  deduction  will first be allocated
(subject to the provisions of subparagraph  11.06(a)  hereof) the Venturers in a
manner  designed to result in each  Venturer  having a Capital  Account equal to
what it would have been had the  original  allocation  of profits or losses,  or
items thereof pursuant to subparagraph 11.06(a) hereof, not occurred.

          (c) To the  extent  an  adjustment  to the  adjusted  tax basis of any
Venture  asset  pursuant to section  734(b) of the Code or 743(b) of the Code is
required,   pursuant  to  Regulations   section  1-704-1   (b)(2)(iv)(m)(2)   or
Regulations  section  1-704-1  (b)(2)(iv)(m)(4),  to be taken  into  account  in
determining  Capital  Accounts as the result of a distribution  to a Venturer in
complete  liquidation  of his  interest  in the  Venture,  the  amount  of  such
adjustment to the Capital  Accounts  shall be treated as an item of gain (if the
adjustment  increases  the  basis  of the  asset)  or loss  (if  the  adjustment
decreases such basis) and such gain or loss shall be specially  allocated to the
Venturers in  accordance  with their  interests in the Venture in the event that
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Venturers to whom
such   distribution   was   made  in  the   event   that   Regulations   Section
1.704-1(b)(2)(iv)(m)(4) applies.

     11.07 Calculation and Distribution of Profits.

          (a) The Profits of the Venture, if any, will be calculated by the Sony
Venturer as specified below on an annual basis in respect of each fiscal year.

          (b) The  "Profits"  of the Venture with respect to any be equal to the
Revenue  less any and all costs  (without  duplication)  paid or incurred by the
Venture in connection with the  acquisition,  creation or exploitation of Master
Recordings,   Videos,  Records,  Audiovisual  Records  and  other  tangible  and
intangible  assets of the Venture or  otherwise  paid or incurred by the Venture
during such period,  including,  without limitation,  the costs of the following
items:

               (i) the Distribution Fee during such period;

               (ii) the Administrative Services Fee during such period;

               (iii)  all  Manufacturing  Costs  paid or  incurred  during  such
period;

               (iv) all Royalty Costs during such period;

               (v) the costs of  registering  and securing  copyrights in Master
Recordings, the videos and any artwork associated therewith;

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<PAGE>

               (vi) tax payments  (including,  without  limitation,  sales, use,
value added,  receipts,  inventory,  or similar taxes), if any, on behalf of the
Venture;

               (vii) all  Marketing  Costs paid or incurred  during such period,
including, without limitation, any cooperative advertising costs;

               (viii) all Recording Costs paid or incurred during such period;

               (ix) all Overhead Costs paid or incurred during such period;

               (x) all interest accruing on the Venture Loans; and

               (xi) all charges paid or incurred  during the period  pursuant to
paragraphs 8.03 and 8.04.

(Nothing set forth in this  paragraph  11.07 or elsewhere in this Joint  Venture
Agreement  shall permit the deduction or  recoupment of any fee,  charge or cost
more than once in the calculation of Profits  hereunder.)

          (c) All expenditures  (whether or not treated as capital  expenditures
under GAAP or other accounting rules, including without limitation, expenditures
for furniture,  fixtures or equipment) shall be treated as expenses and shall be
deducted fully in the calculation of Profits in subparagraph 11.07(b).

          (d) Profits  shall not he  distributed  to either  Venturer  except in
accordance with this  subparagraph  11.07(d).  Within 90 days after the start of
any fiscal year, the Venture shall  distribute to each Venturer such  Venturer`s
share of the Profits not previously distributed to such Venturer with respect to
any preceding  fiscal  years,  but only if as of such 90th day all Venture Loans
have been  repaid and only to the extent  that the  Venture  has cash  available
therefor and net working capital after such distribution  remains  positive.  In
order to recoup the Profit  Advances,  no Profits  shall be  distributed  to the
Promoter Venturer until the Sony Venturer shall have been distributed Profits in
an  amount  equal  to  the  Profit  Advances  paid  to  the  Promoter  Venturer.
Thereafter, the Profits shall be distributed 50% to each Venturer.

12.  TAX MATTERS

     12.01 Tax Matters Partner.  The Sony Venturer shall be the party designated
to receive all notices from the Internal  Revenue  Service  which pertain to the
tax  affairs of the  Venture.  The Sony  Venturer  shall be  designated  the Tax
Matters  Partner  under  the  Code,  with all the  rights,  duties,  powers  and
obligations provided for in sections 6221 through 6233, inclusive, of the Code.

     12.02 Tax Returns.  The Sony Venturer  shall cause to be prepared on behalf
of the Venture all tax returns or reports and upon request shall forward  copies
of all such tax returns and reports to the  Promoter  Venturer.  For purposes of
filing their tax returns,  each of the Sony  Venturer and the Promoter  Venturer
agree to treat items  relating to the  Venture in a manner  consistent  with the
treatment of such item on any tax return or report filed by the Venture.

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     12.03 Tax Status.  The Venturers intend that the Venture will be treated as
a partnership  for federal,  state and local tax purposes and will be subject to
all provisions of Subchapter K of Chapter 1 of Subtitle A of the Code.

     12.04 Tax  Obligations.  The Sony Venturer and the Promoter  Venturer shall
each be solely responsible for their liabilities for all taxes due to any taxing
authority and nothing  hereunder  shall be construed to require either to pay or
reimburse any tax payable by the other_

     12.05 Section 754  Election.  The Venture will elect to adjust the basis of
the  Venture`s  assets under Section 754 of the Code in the event of the sale of
an interest in the Venture.

13.  SUSPENSION AND FORCE MAJEURE

     13.01 Suspension by the Sony Venturer.

          (a) If the  Promoter  Venturer  fails to fulfill the Minimum  Delivery
Commitment  or any  Principal  breaches  any  obligation  under  his  Employment
Agreement  or a  Principal  commits  an act of  Material  Default  or any of the
Promoter Parties fails to fulfill any other material obligation under this joint
Venture  Agreement,  in addition to any other rights or remedies  which the Sony
Venturer may have, the Sony Venturer shall have the right to extend the duration
of the then-current  Contract suspend the making of all Venture Loans until such
failure  or  breach is cured  (for the  avoidance  of doubt and  notwithstanding
anything to the contrary elsewhere in this Joint Venture Agreement,  the Term of
this Joint Venture Agreement will automatically be extended during the period of
any such suspension).

          (b) The  services of the  Principals  as set forth this Joint  Venture
Agreement  (and in  each of the  applicable  Employment  Agreements)  are of the
essence.  If, at any time during the Term, any Principal shall become  Disabled,
Then the Sony Venturer may, at its election and without limitation of rights, by
written  notice to the  Promoter  Venturer,  suspend its  obligations  hereunder
(and/or  extend  the Term) for a period of time  equal to the  duration  of such
inability.  If such  inability  shall  continue  for a period  in  excess  of 30
consecutive  days (or  sooner  if it is  evident  prior to that  time  that such
inability is permanent or not curable), or if any Principal shall die during the
Term,  then the Sony  Venturer  may, at its election and without  limitation  of
other rights or remedies, by written notice to the Promoter Venturer,  terminate
the Term,  effective  as of the date such  notice is  received,  and the buy-out
provisions  set forth in Article 9 shall apply,  provided  that,  if there is no
buy-out   pursuant  to  Article  9,  then  there  shall  be  a  liquidation  and
distribution of the Venture`s assets pursuant to paragraph 14.03.

          13.02 Force  Majeure.  With respect to the services to be furnished to
the Venture by the Sony Venturer,  Parent and their Affiliates  pursuant to this
Joint Venture  Agreement,  the Sony  Venturer  shall not be deemed in default of
this Joint Venture  Agreement to the extent the performance of such  obligations
is delayed or becomes  impossible  or  impractical  by reason of any act of God;
inevitable accident, fire; lockout, strike or other labor dispute; riot or civil
commotion; act of public enemy; enactment,  rule, order or act of any government
or governmental  instrumentality  (whether  federal,  state,  local or foreign);
failure of technical facilities;  failure or delay of transportation facilities,
or other cause of a similar or different nature that materially hampers or makes
commercially   impractical  the  normal  business   operations  of  such  person
(hereinafter  referred to as a "force  majeure  contingency").  By notice to the
Promoter Venturer, during the duration of any such force majeure contingency the

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Sony Venturer may suspend such obligations that become impossible or impractical
to by  reason  of such  force  majeure  contingency.  In the  event  of any such
suspension,  specific dates,  periods and time requirements  referred to in this
Joint Venture Agreement shall be postponed or extended accordingly.

14.  TERMINATION OF VENTURE

     14.01  Termination.  Except as set forth in this  Article  14, no  Venturer
shall have the right to cause a dissolution of the Venture, to cause involuntary
bankruptcy  proceedings  to be commenced  against the  Venture,  or to cause the
Venture to cause the commencement of any case,  proceeding or other action under
law relating to bankruptcy,  insolvency,  reorganization or relief of debtors or
seeking appointment of a receiver,  trustee, custodian or other similar official
for it or any of its assets. If one of the following events shall occur:

          (i) the Venturers  shall have mutually  agreed in writing to terminate
this Joint Venture Agreement;

          (ii) (A) either  Venturer  shall have breached any term or covenant of
this Joint Venture  Agreement,  and such breach shall not have been cured within
thirty  days  after  receipt  of notice of such  breach  from the  non-breaching
Venturer (solely for purposes of this clause, any breach of any term or covenant
of this Joint Venture  Agreement by a Promoter Party shall be deemed a breach by
the  Promoter  Venturer)  or (B) the  Promoter  Venturer  fails to  fulfill  the
Promoter Venturer`s Minimum Delivery Commitment or any Principal breaches his or
her Employment  Agreement and such failure or breach (if capable of being cured)
is not cured within 30 days of after notice of breach or (C) a Principal commits
an act of Material Default;

          (iii)  either  Venturer  becomes  insolvent  or either  of them  shall
commence,  or there  shall be  commenced  against  either  of  them,  any  case,
proceeding  or other action under any law  relating to  bankruptcy,  insolvency,
reorganization  or relief of  debtors  or  seeking  appointment  of a  receiver,
trustee,  custodian or other  similar  official for it or for any of its assets;
provided that in the case of any involuntary  case,  proceeding or action,  such
case,  proceeding  or action  either  (A)  results  in the entry of an order for
relief or a similar  order  against  such  Venturer or (B)  remains  unlifted or
unstayed for a period of 30 consecutive days;

          (iv) the employment of any Principal is terminated  pursuant to his or
her  Employment  Agreement or any  Principal  shall become  unable to render his
services  pursuant to his  Employment  Agreement or hereunder such that the Sony
Venturer  shall  have  the  right  to take  actions  specified  in  subparagraph
13.01(b);

          (v) either  Venturer  shall have  acquired  all of the interest of the
other Venturer;

          (vi) the occurrence of the latest date for  dissolution of the Venture
set forth in its certificate of formation;

          (vii) the Sony Venturer shall opt to dissolve the Venture  pursuant to
the terms set forth elsewhere in this Joint Venture Agreement;

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          (viii) the occurrence of a Dissolution Event;

          (ix) upon the mutual agreement of the Venturers, the Venture commences
any case,  proceeding  or other  action  under any law  relating to  bankruptcy,
insolvency,  reorganization,  or relief of debtors or seeking  appointment  of a
receiver,  trustee, custodian or other similar official for it or for any of its
assets;

          (x) the Sony Venturer`s interest in the Venture is acquired by a third
party (other than as permitted by paragraph 17.01); or

          (xi) the Promoter  Venturer`s interest in the Venture is acquired by a
third party (other than as provided in paragraph 17.01);

then the Term  shall,  notwithstanding  anything  to the  contrary  set forth in
paragraph 14.05 and to paragraph  14.02,  immediately  terminate and the Venture
shall be dissolved  (pursuant to paragraph 14.02 below),  provided that (x) upon
the occurrence of an event set forth in clause (ii)(A)  above,  the  termination
shall be at the election of the non-breaching  Venturer; (y) upon the occurrence
of event set forth in clause (iii) above, the Term shall  immediately  terminate
unless the Venturer  that is not  insolvent or is not the of an  involuntary  or
voluntary  bankruptcy  proceeding  makes an election  within ninety (90) days to
continue  the  venture;  and (2) upon the  occurrence  of an event  set forth in
clause (ii)(B), clause (ii)(C) or clause (iv) above, the termination shall be at
the  election of the Sony  Venturer.  Unless the right to purchase  set forth in
paragraph 14.02 within the periods set forth in such  paragraph,  as promptly as
possible  after the  termination  of the Term of this  Joint  Venture  Agreement
pursuant  to this  Article  14,  the  Venturers  shall  cause the  Venture to be
dissolved or liquidated in accordance with the provisions of paragraph 14.03 and
applicable law.

     14.02 Right to Initiate Buy-out.  Upon the occurrence of an event described
in clause (n),  (iii) or (iv) of paragraph  14.01,  the Venturer that is not the
subject of the events described in the clause  concerned,  or the  non-breaching
Venturer  shall have the right to initiate  the buy-out  provision  set forth in
paragraph  9_01 as of the end of the quarter period last ended prior to the date
of exercise of such right to purchase,  provided that upon the  occurrence of an
event set forth in sections 14.01(ii)(B), 14.01(ii)(C) or 14.01(iv) the right to
exercise  the buy out  provision  shall be at the election of Sony  Venturer.  A
Venturer exercise its option to initiate the buy-out provision  pursuant to this
paragraph 14.02 by delivering  notice of such election to the other Venturer not
later than 90 days after the occurrence of the event described in the applicable
clause of paragraph 14.01.

     14.03 Liquidation and Distribution.

          (a) Upon the  dissolution  and final  termination  of the Venture,  if
there is no buy-out  pursuant to paragraph  14.02 the Sony  Venturer  shall take
account of the Venture`s  assets and liabilities  and, subject to the provisions
of subparagraph 14.03(b),  shall use its best efforts to liquidate the Venture`s
assets as promptly as is consistent  with  obtaining  fair market value therefor
and the  therefrom,  together  with,  as to those  assets that were unable to be
liquidated,  assets distributed in kind, shall be applied and distributed in the
following order:

                                       41
<PAGE>

                  First,  to the  payment  of all debts and  liabilities  of the
         Venture to creditors  (including any outstanding Venture Loans pursuant
         to  paragraph  5.03 and any  charges  for  services  rendered  or costs
         incurred by either  Venturer that are to be reimbursed by or charged to
         the  Venture  under  this  Joint  Venture  Agreement)  in the  order of
         priority  provided  by law or  contract,  and then to the  expenses  of
         liquidation.
                  Second,  to the  establishment  of any reserves  that the Sony
         Venturer may deem reasonably necessary for any contingent or unforeseen
         liabilities or  obligations of the Venture  arising out of the business
         of the Venture.
                  Third,  to the  Sony  Venturer  up to an  amount  equal to the
         amount of the Profit  Advances  paid to The Promoter  Venturer  that is
         unrecouped by the Venture from the Promoter Venturer`s share of Profits
         hereunder.
                  Fourth,  to the Sony  Venturer  up to any amount  equal to the
         amount  allocated  pursuant to subparagraph  11.05(b) and not otherwise
         previously recouped pursuant to subparagraph 11.04(b).
                  Fifth,  any balance then  remaining  shall be  distributed  in
         accordance with the extent of positive  Capital Account  balances.  For
         purposes of the  application  of this paragraph  14.03 and  determining
         Capital  Accounts on  liquidation,  all  unrealized  gains,  losses and
         accrued  income  and  deductions  of the  Venture  shall be  treated as
         realized and

         recognized  immediately before the date of distribution,  and all items
         of  income,  gain,  loss  and  deduction  with  respect  to the year of
         liquidation  shall be allocated  among the  Venturers  so that,  to the
         extent  possible,  the Venturers`  Capital  Account  balances equal the
         amounts the Venturers would be entitled to receive if the distributions
         were made in  accordance  with  paragraph  11.07 of this Joint  Venture
         Agreement.
                 Finally,  any balance then remaining  shall be distributed  pro
         rata to the Venturers in  accordance  with their  respective  ownership
         interests in the Venture.

               (b) If any Venturer has a deficit  balance in its Capital Account
following the liquidation of its interest in the Venture,  as determined  taking
into account all Capital  Account  adjustments  for the Venturer`s  taxable year
during  which  liquidation  occurs  (other  than  those  made  pursuant  to this
requirement),  such Venturer is unconditionally  obligated to restore the amount
of such deficit  balance to the Venture by the end of such taxable or, if later,
within ninety (90) days after the of such  liquidation,  which amount shall upon
liquidation of the Venture, be paid to creditors of the Venturer  distributed to
the other Venturers in accordance with their positive  Capital Account  balances
in accordance with this paragraph 14.03.

     14.04 Promoter Venturer  Obligations with Respect to Certain  Terminations.
In the event of the dissolution and final termination of the Venture pursuant to
paragraph 14.03 as a either a material  breach by the Promoter  Venturer of This
Joint Venture Agreement or a material Principal of any of his or her obligations
hereunder (or under any Employment  Agreement] or other related agreement,  then
the Promoter  Venturer shall  immediately  pay, or cause to be paid, to the Sony
Venturer  an amount in cash equal the sum of (i) any  unrecouped  portion of the
Profit  Advances  and  (ii) to the  extent  not  paid to the  Sony  Venturer  in
connection with the liquidation of the Venture,  the aggregate amount of Venture
Loans  outstanding at the time of  termination  of the Joint Venture  Agreement.
Such payment shall not affect any other rights or remedies of the Venturers with
respect to this Joint Venture Agreement or the Venture.

                                       42
<PAGE>

     14.05  Continuation  of Venture After  Expiration  of the Term.  During the
Term, the Principals and the Promoter Venturer will their exclusive  services in
accordance with the terms and conditions  hereof.  After the Term, the foregoing
services  of the  Principals  and  the  Promoter  Venturer,  including,  without
limitation, the services identified in subparagraphs 4.02(a) and 4.02(e) hereof,
will cease to be  exclusive to the Sony  Venturer and to the Venture.  After the
Term, except as otherwise  provided in paragraph 14.01 hereof and subject to the
next sentence,  the continue to function and to administer,  market, promote and
exploit Master  Recordings  hereunder,  including  Master  Recordings  embodying
performances  by Artists and  furnished  to the  Venture  pursuant to any Artist
Agreement,  which Artist  Agreement was entered into prior to the  expiration or
termination  of the Term,  irrespective  of whether the Recordings are Delivered
before or after the Term,  to the terms and  conditions  of this  Joint  Venture
Agreement,  after the Term, the Sony Venturer shall have exclusive authority for
the  management  of the affairs of the Venture and the Promoter  Venturer  shall
have no right to consent or approval  with respect  thereto  including,  without
limitation, under third party agreements.

15.  REPRESENTATIONS AND WARRANTIES

     15.01  Representations  and  Warranties  of the  Sony  Venturer.  The  Sony
Venturer hereby represents and warrants to the Promoter Venturer as follows:

          (a)  The  Sony  Venturer  is a  corporation  duly  organized,  validly
existing  and in  good  standing  under  the  laws  of the  jurisdiction  of its
organization  and has full  corporate  power and authority to own its properties
and to carry on its  business  as now  conducted  and as  proposed  herein to be
conducted.

          (b) The Sony  Venturer  has full  corporate  power  and  authority  to
execute,  deliver  and perform the terms and  provisions  of this Joint  Venture
Agreement  and has taken  all  necessary  and  appropriate  corporate  action to
authorize  the  execution,  delivery  and  performance  of  this  Joint  Venture
Agreement.  This Joint Venture  Agreement has been duly and validly  authorized,
executed and delivered on behalf of the Sony Venturer and constitutes the legal,
valid and binding  obligation of the Sony  Venturer,  enforceable  against it in
accordance  with  its  terms,   except  as  enforceability  may  be  limited  by
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  laws
relating to or affecting  creditors`  rights generally and by general  equitable
principles  (regardless  of  whether  such  enforceability  is  considered  in a
proceeding in equity or in law).

          (c) Neither the execution and delivery of this Joint Venture Agreement
nor the  consummation of the transactions  contemplated  herein will (i) violate
any  provision  of the  certificate  of  incorporation  or  by-laws  of the Sony
Venturer,  (ii)  violate,  conflict with or result in a breach of, or constitute
(or with notice or lapse of time or both would  constitute)  a default under the
terms of, any instrument, contract or other agreement to which the Sony Venturer
is a party or by or to which its property or assets may be bound or subject,  or
(iii) violate any law, rule, regulation, order, judgment,  injunction, decree or
award of any court,  administrative  agency or  governmental  body  against,  or
currently  binding  upon,  the  Sony  Venturer,  or (iv)  require  any  consent,
approval,  order or  authorization  of, or  registration  or filing with, or the
giving of notice to, any sons-or governmental or public body or authority.

                                       43
<PAGE>

          15.02  Representations  and Warranties of the Promoter  Venturer.  The
Promoter  Venturer  hereby  represents  and  warrants  to the Sony  Venturer  as
follows:

          (a) The Promoter  Venturer is a corporation  duly  organized,  validly
existing  and in  good  standing  under  the  laws  of the  jurisdiction  of its
organization  and has full  corporate  power and authority to own its properties
and to carry on its business as now conducted and as proposed to be conducted.

          (b) Except as  previously  disclosed to Venturer,  all of  outstanding
capital stock of the Promoter Venturer is held beneficially and of record by the
Principals.

          (c) The Promoter  Ventures has full  corporate  power and authority to
execute,  deliver  and perform the terms and  provisions  of this Joint  Venture
Agreement and has taken all necessary and appropriate  corporate and stockholder
action to  authorize  the  execution,  delivery  and  performance  of this Joint
Venture  Agreement.  This  Joint  Venture  Agreement  has been duly and  validly
authorized,  executed  and  delivered  on behalf of the  Promoter  Venturer  and
constitutes the legal,  valid and binding  obligation of the Promoter  Venturer,
enforceable  against it in accordance with its terms,  except as  enforceability
may be limited by bankruptcy,  insolvency,  reorganization,  moratorium or other
similar laws  relating to or affecting  creditors`  rights  generally by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or in law).

          (d)  Neither  .the  execution  and  delivery  of  this  Joint  Venture
Agreement nor the consummation of the transactions  contemplated herein will (i)
violate any  provision of the  certificate  of  incorporation  or by-laws of the
Promoter  Venturer,  (ii)  violate,  conflict  with or result in a breach of, or
constitute (or with notice or lapse of time or both would  constitute) a default
under the terms of, any  instrument,  contract or other  agreement  to which the
Promoter  Venturer  or the  Principal  is a party or by or to which any of their
property  or  assets  may be bound or  subject,  (iii)  violate  any law,  rule,
regulation,  order,  judgment,   injunction,  decree  or  award  of  any  court,
administrative  agency or governmental body against,  or currently binding upon,
the Promoter Venturer or the Principal,  or (iv) require any consent,  approval,
order or  authorization  of, or  registration  or filing with,  or the giving of
notice to, any person or governmental or public body or authority.

          (e)  Neither  the  Promoter  its  property or assets is a party to, or
subject  to, any  litigation  or, to the  knowledge  of the  Promoter  Venturer,
threatened litigation.

          (f) No Person has or shall have any right,  title or interest in or to
any  of the  assets  of the  Venture  as a  result  of the  Promoter  Venturer`s
participation in the Venture.

          (g) No Promoter Party shall, through its acts or omissions,  permit or
cause any liens,  encumbrances  or claims  against any of the Venture`s  assets,
whether tangible or intangible, or the Venture itself.

          (h) The Master  Recordings  shall be produced in  accordance  with the
rules and  regulations  of the American  Federation of  Musicians,  the American
Federation  of  Television  and  Radio  Artists  and  all  other  unions  having
jurisdiction, including without limitation paragraph 31 of the 1990 - 1993 AFTRA
Code of Fair Practice for Phonograph  Recordings (or the comparable provision of
any successor agreement);  all Persons rendering services in connection with the
Master  Recordings  shall fully comply with the  provisions  of the  Immigration

                                       44
<PAGE>

Reform  Control Act of 1986;  and each Artist is or will become and will remain,
to the  extent  necessary  to  enable  the  performance  of this  Joint  Venture
Agreement,  a member in good standing of all labor unions or guilds,  membership
in which may be lawfully  required for the performance of each Artist`s services
under the applicable Artist Agreement.

          (i) The Promoter Venturer shall comply with the restrictions,  if any,
contained in each Artist Agreement.

          (j) Except as expressly provided by the explicit tetras set forth this
Joint Venture Agreement,  none of the Promoter Parties shall at any time hire or
engage any employees,  consultants or other any capacity,  whether pursuant to a
written  agreement,  as an employee at will or  otherwise,  in the name of or on
behalf of the  Venture_  To the extent,  if at all,  that the  Promoter  Parties
determine in the exercise of its reasonable  business judgment that the services
of any Persons, other than the Principal, are required in order for the Promoter
Venturer to fulfill its obligations under this Joint Venture Agreement, then the
services  of such  Persons  shall be engaged or hired by the  Promoter  Venturer
solely in the name of the Promoter Venturer (and not in the name of the Venture,
the Sony Venturer, Parent or its Affiliates), and the Promoter Venturer shall be
solely responsible for the fulfillment of any and all obligations, financial and
otherwise,  to such  Persons at its sole cost and  expense,  including,  without
limitation,  any and all  obligations  (financial and otherwise) with respect to
salary,  benefits,  federal and state unemployment taxes, Social Security taxes,
income tax  withholding,  workers  compensation,  employee  health  and  safety,
anti-discrimination  laws,  U.S.  immigration  laws,  and any  other  applicable
federal and state labor laws and regulations.  All employee  policies adopted by
the Promoter Venturer shall be reasonable.  Upon the Sony Venturer`s  reasonable
request  in each  instance,  the  Promoter  Venturer  shall  furnish to the Sony
Venturer all agreements,  supporting  documentation and assurances  requested by
the Sony  Venturer  which  evidence  that such Persons  shall look solely to the
Promoter  Venturer,  and not to the Venture,  the Sony  Venturer,  Parent or its
Affiliates, for the fulfillment of any such obligations.

16.  INDEMNIFICATION

     16.01 Indemnification by the he Promoter Venturer.

          (a) The  Promoter  Venturer  shall  at all  times  indemnify  and hold
harmless Parent, the Sony Venturer,  the Venture, any licensees of Parent or the
Venture,  and their Affiliates,  officers,  employees and agents  (collectively,
"Indemnified  Parties")  from and against any and all claims,  losses,  damages,
liabilities,  costs and expenses,  including without limitation,  legal expenses
and reasonable counsel fees incurred by any of them (collectively,  "Losses") or
alleged  breach by the Promoter the Principal and any  Controlled  Entity of any
representation  or warranty made by any of them in this Joint Venture  Agreement
or any related agreement or any other act or omission by the Promoter  Venturer,
the Principal or any Controlled  Entity  (directly or through or by any of their
agents,  employees or other representatives);  provided that the claim concerned
has been settled or has resulted in a judgment against a party indemnified under
this  subparagraph  16.01(a);  provided  further  that such other party shall be

                                       45
<PAGE>

promptly  notified of the  existence  of the claim,  demand,  action or right of
action, and shall be given reasonable  opportunity to participate in the defense
thereof.  Pending the  resolution  of any such claim,  the Venture may  withhold
monies  which would  otherwise be payable to the  Promoter  Venturer  under this
Joint Venture Agreement in an amount consistent with such claim. If no action or
other proceeding for the recovery on such claim has been commenced within twelve
(12)  months  after its  assertion  the Venture  shall not  continue to withhold
monies in connection with that particular claim under this subparagraph 16.01(a)
unless  the  Sony  Venturer  believes  in  its  reasonable  judgment  that  such
proceeding  may be  instituted  notwithstanding  the  passage of that time.  The
Venture  shall  release  such  monies if the  Promoter  Venturer  makes  bonding
arrangements,  satisfactory  in the sole  discretion  of the Sony  Venturer,  to
assure  the  Sony   Venturer   of  payment  of  the  amount  of  any   potential
indemnification obligation under this subparagraph 16.01(a).

          (b) If any  Indemnified  Party pays more than $5,000 in  settlement of
any such claim,  the Promoter  Venturer shall not be obligated to reimburse such
Indemnified  Party for the amount in excess thereof unless the Promoter Venturer
has consented to the settlement, except as provided in the next sentence. If the
Promoter Venturer does not consent to any settlement  proposed by an Indemnified
Party for an amount exceeding $5,000, the Promoter Venturer shall nonetheless be
required to reimburse the Indemnified  Party for the full amount paid unless the
Promoter  Venturer  shall have made bonding  arrangements,  satisfactory  in the
reasonable  discretion  of the Sony  Venturer,  to assure the Sony  Venturer  of
reimbursement of all Losses that any Indemnified  Putty may incur as a result of
such claim.

17.  TRANSFER AND CHANGE OF CONTROL

     17.01 Transfer of Venture Interests.  Neither Venturer shall make or permit
any  sale,  transfer,  assignment,  pledge,  lien  or  other  disposition  of or
encumbrance (whether voluntary,  involuntary,  by operation of law or otherwise)
of any interest in this Joint Venture Agreement,  the Venture or any property or
assets of the Venture,  without the prior written  consent of all the Venturers,
provided that the Sony Venturer may transfer its interest in whole or in part to
an  Affiliate  of  the  Sony  Venturer  or  to  any  Person   acquiring  all  or
substantially  all of the assets of the Sony Venturer or to any  partnership  or
other  venture in which such  persons  may  participate,  and such rights may be
similarly  assigned to any assignee.  No such assignment  shall relieve the Sony
Venturer of any of the Sony Venturer`s  obligations hereunder_ The Sony Venturer
may also assign its rights to Parent or any  Affiliate  if advisable in the Sony
Venturer`s  sole  discretion  to implement  the license  granted.  Any purported
assignment by a Venturer in violation of this paragraph shall be void.

     17.02 Change Control of Promoter  Venturer.  The  Principals)  shall ensure
that there is no change in control of the Promoter Venturer.

18.  MISCELLANEOUS

     18.01  Confidentiality.  Each Venturer  agrees that it shall,  and it shall
instruct in writing its respective attorneys, accountants and other professional
advisors (collectively,  "Advisors") to, hold in confidence and not communicate,
transmit,  publish,  disseminate  or  otherwise  disclose  any of the  terms and
conditions  of  this  agreement  or  any  fact,  matter,  event  or  surrounding
circumstance  leading to or  relating to the  negotiation  thereof to which such
party was privy or of which it was otherwise  made aware (e.g.,  by being copied

                                       46
<PAGE>

on  correspondence  or  by  being  advised  of  such  fact,  matter,   event  or
circumstance  by another  party the  negotiation)  (collectively,  "Confidential
Information");  provided,  however,  that nothing in this paragraph  18.01 shall
prohibit disclosure of such Confidential  Information:  (a) by each party to its
respective  financial  officers,   management,  bankers  or  others  as  may  be
reasonably necessary in the operation of its business;  (b) by each party to its
respective  Advisors to the extent that such  disclosure  is the opinion of such
Advisors  required  to  enable  such  Advisors  fully  to  represent  the  party
concerned;  (e) in connection with any governmental or judicial  proceeding;  or
(d) to any judicial, governmental or regulatory body; provided, however, in each
such instance described in the preceding clauses (c) and (d), the business terms
of this Joint  Venture  Agreement or any related  agreement  including,  without
limitation,  any Employment  Agreement shall not be disclosure unless such terms
are specifically at issue in the judicial or governmental  proceeding concerned.
At the Sony Venturer`s request,  the Promoter Parties shall of their Advisors to
execute a confidentiality  statement in accordance with the preceding  sentence.
The Promoter  Venturer and the Sony  Venturer  agree that the  disclosure of any
Confidential  Information  or any such material terms in the context of a formal
press announcement or press shall be subject to the Promoter  Venturer`s and the
Sony Venturer`s mutual approval.

     18.02 Titles and Headings.  Titles and headings of Articles and  paragraphs
herein are inserted for convenience of reference only and are not intended to be
a part of, or to affect the meaning or  interpretation  of,  this Joint  Venture
Agreement.

     18.03 Entire Agreement.  This Joint Venture Agreement,  the Exhibits hereto
and  any  other  documents   contemplated   hereby  [(including  the  Employment
Agreements)] constitute the entire agreement among the parties pertaining to the
subject  matter hereof and supersede all prior and  contemporaneous  agreements,
understandings and  representations,  whether oral or written, of the parties in
connection therewith the incorporated or specifically referred to herein.

     18.04  Notices.  Except as  otherwise  specifically  provided  herein,  all
notices  hereunder  shall be in  writing  and shall be given by courier or other
personal delivery or registered or certified mail.

(a) if to the Sony Venturer to:

                  -----------------------------------------
                  -----------------------------------------
                  -----------------------------------------
                  Attention:
                           --------------------------------

                  With a copy to:

                  -----------------------------------------
                  -----------------------------------------
                  Attention:
                           --------------------------------

(b) if to the Promoter Venturer to:

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<PAGE>

                  -----------------------------------------
                  -----------------------------------------
                  -----------------------------------------
                  Attention:
                           --------------------------------
                  With a copy to:

                  -----------------------------------------
                  -----------------------------------------
                  -----------------------------------------
                  Attention:
                           --------------------------------

or to such other  address or addresses as may be designated in writing by either
Venturer.  Notices  shall be deemed  given when  mailed,  except  that notice of
change of address  shall be  effective  only from the date of its  receipt.  Any
party`s  inadvertent  failure to send any of the copies  referred to above shall
not  constitute  a  breach  of  this  Joint  Venture  Agreement  or  impair  the
effectiveness of the notice concerned.

     18.05 Agreements, Approval and Consent.

          (a) As to all  matters  treated  herein  to be  determined  by  mutual
agreement,  or as to which any approval or consent is required,  such agreement,
approval  or consent  will not be  unreasonably  withheld  (except as  otherwise
expressly provided in this agreement).

          (b) The agreement, approval or consent of any Promoter Party, whenever
required  (including,   without  limitation,   written  agreement,  approval  or
consent), shall be deemed to have been given unless the Promoter Party concerned
notifies the Sony Venturer  within ten (10) business days  following the date of
the Sony Venturer`s request to the Promoter Party concerned therefor.

     18.06 Amendment.  This Joint Venture Agreement may not be changed,  waived,
discharged or terminated (except as explicitly  provided herein), in whole or in
part,  except by an  instrument  in  writing  signed by the party  against  whom
enforcement of such change, waiver, discharge or termination is sought.

     18.07  Waiver.  The  failure  of any party to object to any  breach  of, or
non-compliance  with, any provision of this Joint Venture Agreement shall not be
construed  as a lapse  of,  or as a waiver  of,  any  right or  remedy  upon the
occurrence of any other breach of, or non-compliance with, the same or any other
provision of this Joint  Venture  Agreement.  No exercise or any right or remedy
under this agreement will limit the Sony Venturer`s  right to recover damages by
reason of any default or breach of this agreement or any of the Sony  Venturer`s
other rights or remedies_ All remedies,  rights,  undertakings,  and obligations
contained  in this  agreement  shall  be  cumulative  and  none of  shall  be in
limitation  of any other  remedy,  right,  undertaking,  or obligation of either
party.

     18.08 Severability. If any provision of this Joint Venture Agreement should
be determined to be invalid, illegal or unenforceable, in whole or in part, such
provision  or portion  shall be deemed to be severed or limited,  and this Joint
Venture  Agreement  shall be considered to be thus amended to give effect to the
intention of the parties hereto insofar as that is possible.

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<PAGE>

     18.09 Governing Law. THIS JOINT VENTURE  AGREEMENT HAS BEEN ENTERED INTO IN
THE STATE OF NEW YORK, AND THE VALIDITY, INTERPRETATION AND LEGAL EFFECT OF THIS
JOINT VENTURE  AGREEMENT  SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS  ENTERED INTO AND PERFRMED  ENTIRELY WITHIN THE STATE OF
NEW YORK (WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES UNDER NEW YORK
STATE LAW). THE NEW YORK COURTS (STATE AND FEDERAL) SHALL HAVE SOLE JURISDICTION
OF ANY CONTROVERSIES  REGARDIN THIS JOINT VENTURE AGREMENT;  ANY ACTION OR OTHER
PROCCEDING WHICH INVOLVES SUCH A CONTROVERSY SHALL BE BROUGHT IN THOSE COURTS IN
NEW YORK COUNTY AND NOT  ELSEWHERE.  THE PARTIES WAIVE ANY AND ALL OBJECTIONS TO
VENUE IN THOSE COURTS AND HEREBY SUBMIT TO THE JURISDICTION OF THOSE COURTS. ANY
PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY, AMONG OTHER METHODS, BE ERVED UPON
THE PROMOTER VENTURER BY DELIVERING IT OR MAILING IT, BY REGISTERED OR CERTIFIED
MAIL,  DIRECTED TO THE DDRESS FIRST ABOVE  WRITTEN OR SUCH OTHER  ADDRESS AS THE
PROMOTER  VENTURER MAY DESIGNATE  PURSUANT TO PARAGRAPH  18.04. ANY SUCH PROCESS
MAY,  AMONG OTHER METHODS,  BE SERVED UPON ANY PERSON WHO APPROVES,  RATIFIES OR
ASSENTS TO THIS JOINT  VENTURE  AGREEMENT  TO INDUCE THE SONY  VENTURER TO ENTER
INTO IT, BY  DELIVERING  THE PROCESS OR MAILING IT BY  REGISTERED  OR  CERTIFIED
MAIL,  DIRECTED TO THE ADDRESS  FIRST ABOVE WRITTEN OR SUCH OTHER ADDRESS AS THE
PERSON  CONCERNED MAY DESIGNATE IN THE MANNER  DESCRIBED IN PARAGRAPH 18.04. ANY
SUCH  DELIVERY OR MAIL SERVICE SHALL BE DEEMED TO HAVE THE SAME FORCE AND EFFECT
AS PERSONAL SERVICE WITHIN THE STATE OF NEW YORK.

     18.10 Successors. This Joint Venture Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties hereto and their  respective
successors and permitted assigns.

     18.11   Counterparts.   This  Joint  Venture   Agreement  in  one  or  more
counterparts,  each of which shall be deemed an original  and all of which taken
together shall constitute a single agreement.

     18.12 Third Parties.  Except as expressly  provided  herein or as otherwise
agreed by the parties  hereto,  the  provisions of this Agreement are solely for
the benefit of the parties  hereto and shall not,  except of the Sony  Venturer,
for the benefit of Parent and its Affiliates,  inure to the benefit of any third
party.

     18.13 Further Assurances. Each party agrees (and acknowledge, if requested)
and deliver  such  additional  documents  and  instruments  and to perform  such
additional acts as may be or appropriate to effectuate, carry out and perform of

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<PAGE>

the terms,  provisions,  conditions and purposes of this Joint Venture Agreement
and all the  transactions  contemplated by this Joint Venture  Agreement and all
other agreements delivered in connection herewith.

                                       50
<PAGE>

     IN WITNESS  WHEREOF,  the Venture  Agreement  to be executed  under seal by
their duly authorized officers as of the day and first above written.

                           SONY MUSIC, a Group of Sony Music Entertainment Inc.

                           By:
                              -------------------------------------------------
                              Name:
                              Title:

                           [PROMOTER VENTURER]

                           By:
                             --------------------------------------------------
                              Name:
                              Title:

                                       51
<PAGE>

                                    EXHIBIT A

                            Employment Agreement Form

                           (Reference: Paragraph 4.04)

                                       52
<PAGE>

                                    EXHIBIT B

                     Business Plan for Initial Contract Year

                        (Reference: Subparagraph 4.05(a))

                                       53
<PAGE>

                                    EXHIBIT C

                           Sony Artist Agreement Form

                           (Reference: Paragraph 6.01)

                                       54
<PAGE>

                                   APPENDIX A

to the Joint Venture  Agreement  (the "Joint  Venture  Agreement")  between Sony
Music,  a Group of Sony Music  Entertainment  Inc.  (the "Sony  Venturer"),  and
[NAM-] (the "Promoter Venturer") dated as of ____________ [SMU _____]. All terms
defined  in the Joint  Venture  Agreement  shall have the same  meanings  below,
unless expressly set forth otherwise.

1. TERM

          (a) The term of each Artist  Agreement shall begin during the Term and
shall  continue  for a first  Contract  Period  ending on date  seven (7) months
following the initial  Release United States of the Album  Delivered in complete
satisfaction  of the  Artist`s  Recording  Commitment  for such  first  Contract
Period,  bat in no event later than the date twelve  (12) months  following  the
completion of Delivery of all  Recordings  constituting  the Artist`s  Recording
Commitment for such first Contract Period.

          (b) The Venture  will have not fewer than seven (7)  separate  options
(each a "Contract  Period  Option") to extend the term of each Artist  Agreement
for additional Contract Periods (sometimes,  hereinafter, referred to as "Option
Periods")  on the same terms and  conditions  applicable  to the first  Contract
Period.  The Venture  may  exercise  each of those  Contract  Period  Options by
sending  the  Artist a notice  not later than the  expiration  date of  Contract
Period which is then in "current Contract  Period").  If the Venture exercises a
Contract Period Option, the Option Period begin immediately after the end of the
current  Contract  Period  and shall  continue  until the date  seven (7) months
following  the Initial  Release in the United  States of the Album  Delivered in
complete  satisfaction  of the  Artist`s  Recording  Commitment  for that Option
Period but in no later than the date twelve (12) months following the completion
of Delivery of all Recordings constituting the Artist`s Recording Commitment for
that Option Period.

2. RECORDING  COMMITMENT.  During each Contract Period,  the Artist will perform
for the recording of Recordings  sufficient to constitute  one (1) Album,  cause
those  Recordings  to be produced,  and Deliver them to the Sony  Venturer  (the
"Recording Commitment").  No Artist Agreement shall obligate the Venture to more
than one Album in any Contract Period without the prior written  approval of the
Sony Venturer.  The Recording Commitment for each Contract Period will be within
the first three (3) months of the Contract Period concerned.

3. No advances  (other than union scale payments) shall be payable to the Artist
without the prior written approval of Sony.

4.  TERRITORY.  The rights  acquired  by the  Venture  pursuant  to each  Artist
Agreement shall not be than universe-wide.

5. CERTAIN OTHER  PROVISIONS.  Each Artist Agreement shall contain the following
provisions:

          (a)  "Each  Master   Recording  made  under  this  agreement  will  be
consindered a "work made for hire" within the meaning of U.S. Copyright Law. The

                                       55
<PAGE>

Venture shall have all rights  throughout  the world in perpetuity to distribute
and otherwise exploit any Master Recording made hereunder."

          (b) "This agreement is subject to assignment to Sony Music, a Group of
Sony Music Entertainment Inc. ("Sony"),  in accordance with an agreement between
[PROMOTER VENTURER]  ("________") and Sony dated as of ______________,  and Sony
shall have the right to exercise, implement or enforce any rights granted to the
Venture  hereunder on Venture`s behalf. In the event of a default by the Venture
in performing any of its obligations  under this agreement,  duplicate notice of
such default will be sent to Sony Music Entertainment Inc., Law Department,  550
Madison Avenue, New York, New York, 10022-3211, Attention: Senior Vice President
and General Counsel,  and to Sony`s Senior Vice President,  Business Affairs and
Administration,  at the same  address,  simultaneously  with the  giving of such
notice  to  ____________,  and  Sony  shall  cure  each  default  on  behalf  of
________________."

          (c) (This  subparagraph  V(c) shall apply only if the Artist concerned
is a  California  resident  or if the  financial  terms of the Artist  Agreement
concerned  sufficient so that it is reasonably likely that the following amounts
can be paid without  exceeding  the  maximums  presented  in  subparagraph  V(g)
below.)

               (i) "The aggregate amount of the compensation paid to each of you
under this agreement shall not be less than the  "Designated  Dollar Amount" (as
defined below) per Fiscal Year.  "Fiscal  Year",  in this  paragraph,  means the
annual  period  beginning  on the date of  commencement  of the  term,  and each
subsequent  annual  period  through the seventh such annual  period,  during the
term.  [You  warrant  and  represent  that all  payments  made to you under this
agreement during each Fiscal Year shall be distributed equally among you.]

               (ii) If [each of you has] [you  have] not  received  compensation
equal to the  Designated  Dollar Amount under this  agreement for a Fiscal Year,
shall pay you the amount of the  deficiency  before the end of that Fiscal Year;
at least forty (40) days  before the end of each  Fiscal  Year you shall  notify
___________ if [each of you has] [you have] not received  compensation  equal to
the  Designated  Dollar Amount under this agreement for that Fiscal Year, and of
the amount of the deficiency.  Each such payment shall constitute an Advance and
shall be applied in  reduction  of any and all monies due or becoming due to you
under this agreement.  ____________ may not withhold or require you to repay any
payment made to you pursuant to or subject to this subparagraph.

               (iii) As in this  subparagraph,  the  "Designated  Dollar Amount"
shall be:

                    (A) Nine Thousand Dollars ($9,000) for the first Fiscal Year
of this agreement;

                    (B) Twelve Thousand Dollars  ($12,000) for the second Fiscal
Year of this agreement; and

                    (C) Fifteen Thousand Dollars ($15,000) for each of the third
through seventh years of this agreement.

                                       2
<PAGE>

               If in any Fiscal Year the  aggregate  amount of the  compensation
paid to you under this  agreement  exceeds the Designated  Dollar  Amount,  such
excess  compensation  shall apply to reduce the Designated Dollar Amount for any
subsequent Fiscal Years.

               (iv) You  acknowledge  that this  paragraph  is included to avoid
compromise of `s rights (including ________`s  entitlement injunctive relief) by
reason of a finding of  applicability of California law, but does not constitute
a concession by __________ that California law is actually applicable.]"

          (d) "In the event the  Venture  elects  not to  exercise  an option to
extend the term of this  agreement,  you will promptly  notify Sony Music of the
same. Each such notice shall be in writing and shall be sent by courier or other
personal  delivery or by registered or certified mail to the following  address:
Sony Music, 550 Madison Avenue, New York, New York 10022-3211, Attention: Senior
Vice President, Business Affairs and Administration."

          (e) Unless the Promoter  Venturer  receives the prior written approval
of the Sony  Venturer in each  instance,  the Venture  shall only be entitled to
enter into Artist Agreements that:

               (i) provide for Artist  royalties of no more than the percentages
set forth under subparagraph V(t);

               (ii) provide for  Recording  Funds  (inclusive  of all  Recording
Costs and Artist  advances) of no more than the  applicable  minimum and maximum
amounts set forth under  subparagraph  V(g) below,  as calculated  and otherwise
defined therein; and

               (iii) provide for mechanical royalties not in excess of the rates
and maximums prescribed in section 5.02(b)(4) of the Joint Venture Agreement.

          (f) In each  instance,  the  royalty  payable to the  Artist  under an
Artist  Agreement will not exceed the amount of a royalty  computed at a rate of
________  (__%)  percent For Top Line Net Sales of Albums sold for  distribution
Through Normal Retail  Channels in the United States,  with such  reductions (as
specified  in the  Standard  Form  Agreement)  on all sales  for  which  reduced
royalties  are payable  under the Standard Form  Agreement,  including,  without
limitation,  a  royalty  rate for any  Record  in the  audio-only  compact  disc
configuration and any Record in a New Technology  Configuration not in excess of
eighty percent (80%) of the otherwise  applicable royalty rate prescribed in the
Artist Agreement such terms are defined in the Standard form Agreement).

          (g) (i) The  Advances  payable in respect  of any Album  Delivered  in
fulfillment of any Artist`s  Recording  Commitment shall the difference  between
the Recording Fund specified below, less all Recording Costs incurred respect of
such Album.

               (ii)  The   Recording   Fund  for  the  First   Album   shall  be
$____________.  The  Recording  Fund for each  subsequent  Album of an  Artist`s
Recording  Commitment shall be computed pursuant to the Fund Calculation Formula
(subject to Section V(g)(iii)).

                                       3
<PAGE>

               (iii)  Notwithstanding  section V(g)(ii) above, no such Recording
Fund for any Artist in respect  of any Album  shall be more than the  applicable
maximum or less than the applicable minimum prescribed below:

                                      Minimum     Maximum

            (A) The second Album Delivered
            by an Artist pursuant to an Artist
            Agreement

            (B) The third Album Delivered by
            an Artist pursuant to an Artist
            Agreement

            (C) The fourth Album Delivered
            by an Artist pursuant to an Artist
            Agreement

            (D) The fifth Album Delivered by
            an Artist pursuant to an Artist
            Agreement

            (E) The sixth Album Delivered by
            an Artist pursuant to an Artist
            Agreement

            (F) The seventh Album Delivered by
            an Artist pursuant to an Artist
            Agreement

            (G) The eighth Album Delivered by
            an Artist pursuant to an Artist
            Agreement

                                       4
<PAGE>

                                   APPENDIX B

                       Form of Security Interest Agreement

                        (Reference: Subparagraph 5.03(f))

                                       5
<PAGE>

                                   APPENDIX C

              STATEMENT OF POLICY CONCERNING CONFLICTS OF INTEREST
              ----------------------------------------------------

         1. It is the policy of [NAME OF VENTURE]. a [Delaware limited liability
company]  Venturer avoid any conflict  between their personal  interests and the
interests of the Venture.

         2. No employee of the Venture or the  Promoter  Venturer  should be, or
even  seem to be,  subject  to  influences,  interests  or  relationships  which
conflict with the best  interests of the Venture.  An employee of the Venture or
the Promoter Venturer must report any actual or possible conflict of interest to
each of the Promoter Venturer and the Sony Venturer.

         3. A conflict  of interest  exists when a Venture or Promoter  Venturer
employee is in a position to compete  with,  rather than help,  the Venture.  It
also exists when an  advantage  employee  (or an  employee`s  immediate  family)
stands to profit by a decision he or she may make on behalf of the Venture.  And
it exists when an employee can make a business  decision not on the basis of the
Venture`s interest but rather for his or her own personal advantage.

         4. Any employee who violates,  or shall have  violated,  the policy set
forth in this  Statement of Policy  concerning  conflicts  of interest  shall be
subject to such action, including dismissal, as may be deemed appropriate by the
Promoter Venturer or the Sony Venturer.

                                       6
<PAGE>

                                   APPENDIX D

            SECTION 317 OF THE COMMUNICATIONS ACT OF 1934, as amended

              Announcement With Respect to Certain Matter Broadcast
              -----------------------------------------------------

         (a)  (1)......All  matter broadcast by any radio1 station for which any
money,  service or other valuable  consideration is directly or indirectly paid,
or promised to or charged or accepted by, the station so broadcasting,  from any
person, shall, at the time the same is to broadcast, be announced as paid for or
furnished,  as the case may be by such person:  provided, that "service or other
valuable  consideration`"`  shall not include any service or property  furnished
without  charge or at a nominal  charge  for use on, or in  connection  with,  a
broadcast unless it is so furnished in consideration  for an identification in a
broadcast  of any person,  product,  service,  trademark or brand name beyond an
identification  which  is  reasonably  related  to the  use of such  service  or
property on the broadcast.

                  (2)......Nothing  in this section shah preclude the Commission
from requiring that an appropriate announcement shall be made at the time of the
broadcast  in the case of any  political  program or any program  involving  the
discussion   of  any   controversial   issue  for  which  any  films,   records,
transcriptions,  talent,  scripts, or other material or service of any kind have
been furnished,  without charge or at a nominal charge,  directly or indirectly,
as an inducement to the broadcast of such program.

         (b) In any case  where a report  has been made to a radio  station,  as
required by Section 507 of this Act, of circumstances  which would have required
an announcement  under this section had the consideration  been received by such
radio station, an appropriate announcement shall be made by such radio station.

         (c) The  licensee  of each  radio  station  shall  exercise  reasonable
diligence  to  connection  with any  program  or program  matter for  broadcast,
information  to enable such licensee to make the  announcement  required by this
section.

         (d) The Commission  may waive the  requirement  of an  announcement  as
provided in this  section in any case or class of cases with respect to which it
determines that the public interest,  convenience, or necessity does not require
the broadcasting of such announcement.

         (e) The Commission shall prescribe appropriate rules and regulations to
carry out the provisions of this section.

                                       7
<PAGE>

                                   APPENDIX E

            SECTION 508 OF THE COMMUNICATIONS ACT OF 1934, as amended

                          Disclosure of Certain Payment
                          -----------------------------

         (a) Subject to subsection (d),  employee of a radio station who accepts
or agrees to accept  from any person  (other  than such  station)  or any person
(other than such  station) who pays or agrees to pay such  employee,  any money,
service,  or other valuable  consideration  for the broadcast of any matter over
such  station  shall,  in advance of such  broadcast,  disclose the fact of such
acceptance or agreement to such station.

         (b) Subject to subsection  (d), any person who, in connection  with the
production or preparation of any program or program matter which is intended for
broadcasting  over any radio  station,  accepts or agrees to accept,  or pays or
agrees to any money,  service or other valuable  consideration for the inclusion
of any matter as a part of such program or program matter,  shall, in advance of
such broadcast,  disclose the fact of such acceptance or payment or agreement to
the payee`s  employer,  or to the person for whom such program or program matter
is being produced, or to the licensee of such station over which such program is
broadcast.

         (c) Subject to  subsection  (d),  any person who  supplies to any other
person any program or program matter which is intended for broadcasting over any
radio station shall, in advance of such broadcast, disclose to such other person
any information of which he has knowledge, or which has been disclosed to him as
to any money, service or other valuable  consideration which any person has paid
or accepted,  or has agreed to pay or accept, for the inclusion of any matter as
a part of such program or program matter.

         (d)  The  provisions  of  this  section  requiring  the  disclosure  of
information  shall not apply in any case where,  because of a waiver made by the
Commission  under Section  317(d),  an  announcement  is not required to be made
under Section 317.

          (e) The  inclusion  in the  program of the  announcement  required  by
Section 317 shall constitute the disclosure required by this section.

         (f) The term "service or other valuable  consideration" as used in this
section shall not include any service or property furnished without charge or at
a nominal charge for use on, or in connection with, a broadcast, or for use on a
program which is intended for broadcasting over any radio station,  unless it is
so furnished in consideration for an identification in such broadcast or in such
program of any  person,  product,  service,  trademark,  or brand name beyond an
identification  which  is  reasonably  related  to the  use of such  service  or
property in such broadcast or such program.

         (g) Any person who violates any  provision of this section  shall,  for
each such violation,  be fined not more than $10,000 or imprisoned not more than
one year, or both.

                                       8
<PAGE>

                                   APPENDIX F

                                       9
<PAGE>

                                   SCHEDULE A

                               Delivery Materials

A.   VIDEO

     A first  generation  Digital  Beta master on Sony  Digital  Beta  videotape
conforming to NTSC RS170A specifications with non-drop frame SMPTE tithe code in
the following sequence and format:

          a) Start SMPTE time code at 57:30:00 and run continuously to end tape.

          b) Sixty (60)  seconds of color bars  starting at  58:00:00  with 1kHz
tones at 0 VU +/-db to be Recorded on all active audio tracks.

          c) Sixty (60) seconds of black, no tones, starting at 59:00:00.

          d) FBl Warning  (to be supplied by Sony).  THIS MUST START AT ONE HOUR
EVEN (1:00:00:00).

          e) One (1) second of black.

          f) Sony Music (or label) logo (to be supplied by Sony).

          g) One (1) to two (2) seconds of black.

          h) The  Program.  A  copyright  notice  reading  "(C) 2001 Sony  Music
Entertainment  Inc." or such other notice as Sony designates will run at the end
of the Program

          i) After the Program and credits, MOS (no audio), black with time code
to end tape.

B.   AUDIO

     1. With the Digital Beta "0" reference level set at -20db,  average program
levels should be -10db, with program peaks not to exceed -5db.

     2. Stereo audio derived from the original first  generation  sound mix will
be laid onto Audio  Tracks 1 and 2 of the Digital  Beta  master.  Tracks 3 and 4
will be left open  (unless  required  for foreign  language  dubbing or separate
music and effects tracks if requested by Sony).

C.       ADDITIONAL DELIVERY MATERIALS

          (a)  Broadcast  and other uses  (other than Home Video and MTV use) of
Videos derived from Master Recordings: 80% of Licensee`s Gross Receipts.

<PAGE>

          (b) Home Video Use: 20% of the  applicable  Royalty Base Price Royalty
Base Price (rather than Gross  Receipts) in respect of NRC Net Sales;  and 10.8%
of the applicable  Royalty Base Price (rather than Gross Receipts) in respect of
sales through a club operation.

          (c)(1) The basic  royalty on NRC Net Sales of  Mid-Price  Home  Videos
shall be 13.6% of the applicable Royalty Base Price.

               (2) The basic  royalty on NRC Net Sales  Videos shall be 10.8% of
the applicable Royalty Base Price.

          (d)MTV use: 90% of Licensee`s Gross Receipts.

     2.02 With  respect to the  exploitation  by  Licensees  of Long Form Videos
embodied in Audiovisual  Records (other than Screen Savers)  derived from Master
Recordings, the Sony Venturer shall credit to the Venture royalties equal to the
respective  percent  of the  applicable  Licensee`s  Gross  Receipts  or royalty
specified below:

          (a)  Broadcast and other uses (other than Home Video use):

               (1) If the applicable Licensee secures the broadcast or other use
or exhibition: 80% of Licensee`s Gross Receipts.

               (2) If the applicable Licensee and the Venture jointly secure the
broadcast or other use or exhibition: 90% of Licensee`s Gross Receipts.

               (3) If the Venture secures  broadcast or other use or exhibition:
100% of Licensee`s Gross Receipts.

          (b) Home Video Use: 20% of the  applicable  Royalty Base Price (rather
than Gross  Receipts) in respect of NRC Net Sales;  and 10.8% of the  applicable
Royalty Base Price  (rather than Gross  Receipts) in respect of sales  through a
club operation.

          (c)(1) The basic  royalty on NRC Net Sales of  Mid-Price  Home  Videos
shall be 13.6% of the applicable Royalty Base Price.

               (2) The basic  royalty  on NRC Net Sales of  Budget  Home  Videos
shall be 10.8% of the applicable Royalty Base Price.

     2.03 With respect to the exploitation by Licensees of Screen Savers derived
from Master  Recordings,  the Sony Venturer  shall credit to the Venture a basic
royalty equal to 18% of the applicable Royalty Base Price on NRC Net Sales.

3.   MISCELLANEOUS ROYALTY PROVISIONS

     Notwithstanding  anything  to the  contrary  contained  in Articles 4 and 5
hereof:

                                       2
<PAGE>

     3.01 No  royalties  shall be  credited to the Venture in respect of Records
sold or  distributed  as cutouts  after listing of such Records has been deleted
from the applicable  catalog, or as "bonus" Records (whether or not intended for
resale).

     3.02 With respect to Records  embodying  Master  Recordings,  together with
other  Recordings,  the royalty  rate to be  credited  to the  Venture  shall be
computed by a fraction, the numerator of which is the number of Sides consisting
of Master Recordings hereunder, and the denominator of which is the total number
of Sides contained on such Record.

     3.03 No royalty  shall be credited to the Venture  with  respect to Records
received by members of a club operation in an  introductory  offer in connection
with  joining it, or upon  recommending  that another join it, or as a result of
the purchase of Records, including,  without limitation,  Records distributed as
"bonus" or "free" Records, or Records for which the club operation is not paid.

     3.04 Except as otherwise  indicated,  all royalties specified in Articles 1
and 2 hereof shall be based on 100% of Net Sales.

     3.05 The Sony  Venturer  shall  compute the royalties to be credited to the
Venture  hereunder in the same  national  currency in which the Sony Venturer is
credited for the sale or exploitation  concerned by The Licensee concerned,  and
the Sony Venturer shall credit those Sony  Venturer.  For purposes of accounting
to the Venture  hereunder,  the Sony Venturer  shall  accounting and payment for
that safe. (For the purposes of this paragraph,  only, any royalties made to the
Sony  Venturer  and  retained by the  Licensee by reason of that charge shall be
deducts any taxes from its payments to the Sony Venturer,  the Sony Venturer may
deduct a  proportionate  amount of those taxes from  royalties to be credited to
the  Venture  hereunder.  If any  law,  any  government  ruling,  or  any  other
restriction affects the amount of the payments which a Licensee can remit to the
Sony  Venturer,   the  Sony  Venturer  may  deduct  from  royalties   Licensee`s
remittances to the Sony Venturer. If the Sony Venturer cannot collect payment in
the United States in U.S.  Dollars,  the Sony Venturer  shall not be required to
account to the  Venture  for that sale,  except as  provided in the next two (2)
sentences.  The Sony Venturer Promoter Venturer`s share of royalties which would
be credited to the Venture  hereunder  on the foreign  sales  concerned,  to the
extent such monies are available for that purpose,  and only to year  concerned.
All such  deposits  shall  constitute  payments to the Promoter  Venturer of the
Promoter Venturers share of Profits for accounting  purposes for the fiscal year
concerned.

4.   DEFINITIONS

Except as expressly  provided  herein,  all terms  defined in the Joint  Venture
Agreement to which this  Schedule B is attached  shall have the same meanings in
this Schedule B.  Notwithstanding  the preceding  sentence,  the following terms
shall have the meanings set forth below:

     4.01-"Broadcast"   -  any  broadcast   transmission,   including,   without
limitation,    over-the-air   transmission,   cable   transmission,    satellite
transmission  or any other manner of broadcast  now known or which may hereafter
come into existence.

                                       3
<PAGE>

     4.02(a)  "Budget  Home  Video" - a Home Video  embodied  on an  Audiovisual
Record  bearing a Gross  Royalty Base more than 50% lower than the Gross Royalty
Base  applicable  to the top line  standard  videos  in the  same  configuration
released by the Licensee concerned in the territory  concerned ("Top Line Video,
Base").

          (b)  "Mid-Price  Home  Video" -  Audiovisual  Record  bearing  a Gross
Royalty Base between 25% lower and 50% lower than such Top Line Video Base.

     4.03 (a) "Budget  Record" - a Record,  whether or not previously  bearing a
Gross  Royalty  Base more than  thirty-two  percent  (32%)  lower than the Gross
Royalty Base applicable to the Top Line Records in the same configuration (e.g.,
whether it is a tape  cassette,  compact disc, or vinyl Record and whether it is
an Album,  Single or Audiovisual Record) released by Sony or Sony`s Licensees in
the country concerned.

          (b) "Mid-Price Record" - a Record, whether or not previously released,
bearing a Gross Royalty Base at least fifteen  percent (15%),  but not more than
thirty-two  percent (32%),  lower than the Gross Royalty Base  applicable to the
Top  Line  Records   (defined  in  subparagraph   4.03(c)  below)  in  the  same
configuration.

          (c) "Top Line" Record - a Record  bearing the same Gross  Royalty Base
as the  majority  (or  plurality)  of  the  new  Record  releases  in  the  same
configuration (other Sony`s best selling artists.

     4.04 "Club Sales" - any direct sales to consumers  conducted by  mail-order
or on a membership (for example, sales through Bertelsmann in Europe).

     4.05 "Container  Change" - the applicable  percentage,  specified below, of
the Gross Royalty Base (less all taxes) applicable to the Records concerned:

          (a} Analog vinyl Records  (including Singles and 12-inch singles)- ten
percent (10%).

          (b) Analog cassette Records - twenty percent (20%).

          (c) Compact discs,  New Technology  Configurations  and Records in all
other configurations - twenty-five percent (25%).

Container  Charges will not be deducted for Singles packaged only in stock paper
sleeves or for Audiovisual Records sold for home use.

          4.06 "Gross Receipts" - all moneys actually earned and received by the
Licensee concerned from the exploitation concerned.

          4.07 "Home Video" - when used in connection  with the  exploitation of
Videos,  means the use or  license of Videos  embodied  on  Audiovisual  Records
intended for use in personal residences,  including, without limitation,  Screen
Savers, put exclusive of Children`s Home Videos.

                                       4
<PAGE>

          4.08  "Infinity  Digital  Series" - the budget and  mid-price  product
lines of classical  Records (other than Audiovisual  Records) released under the
Sony Classical label and Budget Records or Mid-Price Records).

          4.09 "Royalty Base Price" - the amount specified below ("Gross Royalty
Base") applicable to the Records  concerned,  less all excise,  purchase,  value
added or similar taxes and less the  applicable  Container  Charge.  The Royalty
Base Price for Records sold through any club  Operation will be the same as that
for the identical  Records Sold Through Normal Retail  Channels in the territory
concerned.

          (a) WITH RESPECT TO RECORDS (OTHER THAN AUDIOVISUAL  RECORDS) SOLD FOR
DISTRIBUTION IN CANADA:  The Gross Royalty Base for a Record  reproducing  sound
only is the amount computed under section (1) or section (2) below, whichever is
lower:

               (1) twice the  subdistributor  price published by Sony applicable
to the price series of the unit concerned at the  commencement of the accounting
period in which the sale occurs, less ten percent (10%); or

               (2)  the  prevailing   industry   suggested   retail  list  price
applicable to Records in the same  configuration  and the same  wholesale  price
category as the unit concerned. In this section (2):

                    (i)  A  "major  U.S.   Record   company"   means  one  which
distributes  its  own  Records  directly  to  wholesalers  and  retailers  on  a
nationwide basis throughout the United States. (Those companies,  at the date of
this  agreement,  are Sony, BMG  Entertainment,  The FEW Group,  Universal Music
Group and The Warner Music Group.)

                    (ii)  The  "wholesale  price"  of a  Record  distributed  by
corresponding  most closely in amount to a subdistributor  price for a Record in
the same configuration published by Sony.

                    (iii) The "wholesale price category" of a Record distributed
by Sony  includes:  (A) that Record;  and (B) Records in the same  configuration
sold by other  major U.S.  Record  companies  whose  wholesale  prices for those
Records  correspond  most closely in amount to Sony`s  published  subdistributor
price for the Sony-distributed Record concerned.

                    (iv)  "Prevailing  industry  suggested  retail  list  price"
Records in the  wholesale  price  category  concerned  by the major U.S.  Record
companies which publish suggested retail list prices.

Royalties will be calculated  separately  with respect to each price services in
which  units of a  particular  Record  release  are sold  during the  semiannual
accounting  period  concerned.  References  to published  prices in this section
refer to those in effect at the commencement of the accounting period concerned.

                                       5
<PAGE>

          (b) WITH RESPECT TO RECORDS (OTHER THAN AUDIOVISUAL  RECORDS) SOLD FOR
DISTRIBUTION  OUTSIDE OF THE UNITED STATES AND CANADA: The Gross Royalty Base is
the applicable amount specified in sections(1)  through (4) below, in the county
of sale, at the commencement of the accounting period concerned, plus taxes:

               (1) The manufacturer`s suggested retail list price of the Records
concerned.

               (2) If there is no suggested  list price,  the Gross Royalty Base
will  be the  base  used  for  computing  mechanical  royalties  on the  Records
concerned   by  agreement   between   Record   manufacturers   and  a  licensing
organization,  such as BIEM,  if that base is intended as an  equivalent of or a
substitute for an actual or hypothetical retail price.

               (3) If the  foregoing  base has been  replaced in the past, or is
replaced in the future,  by a different  substantial  number of the major Record
companies in the country  concerned  (for example,  a  manufacturer`s  published
price to  dealers  ("p.p.d.")  with an uplift or other  adjustment  intended  to
convert  it to a  retail-related  base),  the  Gross  Royalty  Base  will be the
Licensee`s p.p.d. for the Records concerned  multiplied by the uplift adopted by
such  Record  companies,  provided  that  uplift  is  supported  by  a  reliable
industry-wide market survey.

               (4) If  neither  subsections  (1),  (2) or (3)  apply,  the Gross
Royalty Base will be the Licensee`s p.p.d. for the Records concerned  multiplied
by one hundred twenty-six percent (126%).

          (c)WITH  RESPECT TO  AUDIOVISUAL  RECORDS SOLD FOR  DISTRIBUTION:  The
Gross Royalty Base is the  manufacturer`s  published price to dealers ("p.p.d.")
in the county concerned at the commencement of the semi-annual accounting period
concerned.

          (d) WITH  RESPECT TO SCREEN  SAVERS SOLD FOR  DISTRIBUTION:  The Gross
Royalty Base is the manufacturer`s  published price to dealers ("p.p.d.") in the
country  concerned at the  commencement  of the  semi-annual  accounting  period
concerned.

     4.10 "Licensee" - a Person to whom the Sony Venturer sublicenses the rights
acquired by the Venture hereunder outside the United States and to whom the Sony
Venturer  also  licenses  the rights to  manufacture  and/or sell Records from a
substantial  portion of  Recordings  owned or controlled by the Sony Venturer in
the territory concerned.

     4.11 "Master Recording" - as defined in the Joint Venture Agreement.

     4.12 "MTV" - a television  channel devoted  exclusively to the presentation
of music Videos in more than one country.

     4.13.  "Net  Receipts" - means Gross  Receipts  less Third Party  Payments,
duplication  costs  and any  other  out-of-pocket  expenses  arising  out of the
exploitation concerned.

     4.14.  "Net  Sales" - 100% of gross  sales less  returns  and  credits.  In
respect of any territory as to which the Sony Venturer is credited for less than
100% of gross sales,  then "Net Sales" in respect of such  territory  shall mean

                                       6
<PAGE>

the percentage which the Sony Venturer actually receives in such territory, less
returns and credits.  Notwithstanding the two preceding sentences, in respect of
Canada, "Net Sales" shall mean 92.5% of gross sales, less returns and credits.

     4.15. "New Technology Configurations" - shall mean Records in the following
configurations:  mini-discs,  digital  compact  cassettes,  digital audio tapes,
laser  discs,  CD-ROM  and  other  Records  embodying,  employing  or  otherwise
utilizing  any  non-analog  technology  (whether  or not  presently  existing or
hereafter created or developed),  but specifically  excluding audio-only compact
discs.

     4.16  (a)  "Records"  -  all  forms  of  reproductions,   transmissions  or
communications  of  Master  Recordings  now or  hereafter  known,  manufactured,
distributed,  transmitted or communicated for home use, school use, juke box use
or use in  means  of  transportation,  including,  without  limitation,  Records
embodying or reproducing sound alone and Audiovisual Records.

          (b)"Audiovisual  Record"  - any  Record  which  embodies,  reproduces,
transmits or otherwise communicates visual images whether or not the interaction
of a consumer is possible or necessary  for the visual  images to be utilized or
viewed.

     4.17 "Reissue  Label" - a label,  such as the Legacy label,  used primarily
for reissues of Master Recordings released previously.

     4.18 "Sales  Through  Normal Retail  Channels" - refers to sales of Records
other than (a) Club Sales; (b) sales by third parties other than the Licensee in
the territory concerned; and (c) sales by any "special products operations."

     4.19 "Screen Savers" - shall mean any computer  software  application which
displays  the purpose  of,  among other  things,  preventing  damage to computer
monitors.

     4.20 "Side" - a  Recording  of a  continuous  performance  of a  particular
arrangement  or  version  of a  composition,  not less than two and one  quarter
(2-1/4) minutes in playing time.

     4.21  (a)"Single"  - a vinyl  audio-only  Record not more than  twelve (12)
inches in diameter or the equivalent in non-vinyl configurations.

          (b)"Twelve-inch  Single"/"Maxi-Single" - a vinyl audio-only Record not
more than  twelve  (12)  inches  in  diameter  or the  equivalent  in  non-vinyl
configurations  which is initially  priced,  marketed and sold as a  Twelve-inch
Single or Maxi-Single.

          (c)  "Extended  Play Record" or "EP" - an  audio-only  Record which is
initially priced, marketed and sold as an EP, and does not constitute an Album.

          (d) "Album" - one (1) or more audio-only Records, at least thirty-five
(35) minutes in playing time, and sold in a single package.

     4.22. "Third Party Payments" - all applicable royalties,  fees, advances or
other payments of any  description  paid or payable to third parties arising out

                                       7
<PAGE>

of  the  exploitation  concerned,  including,  without  limitation,  artist  and
producer royalties and payments pursuant to any applicable collective bargaining
agreements in connection  with such sales,  but excluding  mechanical  royalties
arising out of the exploitation concerned.

     4.23.  (a)"Video" - except as otherwise  provided in subparagraphs  (b) and
(c) below, an audiovisual work featuring, primarily, the audio soundtrack of one
(1) or more Master Recordings hereunder.

          (b)"Short  Form  Video" - a Video  embodying  no more than two musical
compositions.

          (c) "Long Form Video" - all Videos exclusive of Short Form Videos.

     4.24 "Recording" - every Recording of sound,  whether or not coupled with a
visual image,  by any method and on any  substance or material,  or in any other
form or format,  whether now or hereafter known,  which is used or useful in the
Recording,  production,  manufacture distribution and/or transmission of Records
or for any other commercial exploitation.

     4.25 "Person" - any natural person,  legal entity, or other organized group
of persons or entities.  (All pronouns,  whether  personal or impersonal,  which
refer to Persons include natural persons and other Persons.)

                                       8
<PAGE>

                                   SCHEDULE A

         List of Artists Currently Under Contract with a Promoter Party

<PAGE>

                                   SCHEDULE B

     Calculation of Royalty for  Exploitation of Master  Recordings  Outside the
United States

1.   RECORD ROYALTIES (OTHER THAN AUDIOVISUAL RECORDS)

     1.01 ROYALTIES ON SALES OF MASTER RECORDINGS BY LICENSEES.  With respect to
Net Sales by Licensees of Records  (other than  Audiovisual  Records)  made from
Master  Recordings,  the Sony  Venturer will credit to the Venture the following
royalties:

          (a) Except as provided in  subparagraphs  (b), (c) and (d) below,  the
Sony  Venturer  will  credit to the  Venture a basic  royalty  of the  following
percentage of the applicable  Royalty Base Price in respect of Net Sales Through
Normal Retail Channels ("NIRC Net Sales"):

               (i) 20% on Net Sales of Records (other than Singles,  Twelve-inch
Singles, Maxi-Singles and FPS).

               (ii)  13.6%  on  Net  Sales  of  Singles,   Twelve-inch  Singles,
Maxi-Singles and EPs.

          (b) The basic  royalty on NRC Net Sales of Mid-Price  Records shall be
12.4% of the applicable Royalty Base Price.

          (c) The basic  royalty on Club Sales,  Budget  Records,  Records  sold
through any Licensee`s  "special  products  operations"  (such as to educational
institutions,  libraries,  or to clients for their  promotion or sales incentive
purposes)  shall be 10%  (based on Net  Sales) of the  applicable  Royalty  Base
Price;  and on sales  of  Records  derived  from  Master  Recordings  leased  or
otherwise   furnished  by  a  Licensee  to  others  for  their  manufacture  and
distribution of Records,  the basic royalty shall be 10% (based on Net Sales) of
the same retail base price  reported to the  Licensee in the country  concerned.
The royalty rate on any Record sold in conjunction with a substantial television
advertising  campaign shall be one-half (1/2) of the royalty rate hereunder that
would  otherwise  apply if the  Record  concerned  sold  Through  Normal  Retail
Channels.

     1.02  SYNCHRONIZATION  FEES.  The Sony Venturer shall credit to the Venture
the following  royalties  with respect to the license by Licensees of audio-only
Master  Recordings  for use in  synchronization  with  motion  pictures or other
audiovisual  works.  The royalty  shall be 75% of the Gross  Receipts  (less any
duplication  costs and other  out-of-pocket  costs  associated  with the license
concerned) of the Licensee in the country concerned.

2.   VIDEO ROYALTIES

     2.01 With  respect to the  exploitation  by  Licensees of Short Form Videos
embodied on Audiovisual  Records (other than Screen Savers)  derived from Master
Recordings, the Sony Venturer shall credit to the Venture royalties equal to the
respective  percent  of the  applicable  Licensee`s  Gross  Receipts  or royalty
specified below:

<PAGE>

          (a)  Broadcast  and other  uses than Home Video and MTV use) of Videos
derived from Master Recordings: 80% of Licensee`s Gross Receipts.

          (b) Home Video Use: 18% of the  applicable  Royalty Base Price (rather
than Gross  Receipts) in respect of NRC Net Sales;  and 10.8% of the  applicable
Royalty Base Price  (rather than Gross  Receipts) in respect of sales  through a
club operation.

          (c) (1) The basic royalty on NRC Sales of Mid-Price  Home Videos shall
be 13.6% of the applicable Royalty Base Price.

               (2) The basic  royalty NRC Net Sales of Budget Home Videos  shall
be 10.8% of the applicable Royalty Base Price.

          (d) MTV use,: 90% of Licensee`s Gross Receipts.

     2.02 With  respect to the  exploitation  by  Licensees  of Long Form Videos
embodied  on  Audiovisual   Records  (other  than  Screen  derived  from  Master
Recordings, the Sony Venturer shall credit to the Venture royalties equal to the
respective  percent  of the  applicable  Licensee`s  Gross  Receipts  or royalty
specified below:

          (a) Broadcast and other uses (other than Home Video use):

               (1) If the applicable Licensee secures the broadcast or other use
or exhibition: 80% of Licensee`s Gross Receipts.

               (2) If the applicable  Licensee and the secure broadcast or other
use or exhibition: 90% of Licensee`s Gross Receipts.

               (3) If the Venture secures  broadcast or for exhibition.  100% of
Licensee`s Gross Receipts.

          (b) Home Video Use: 18% of the  applicable  Royalty Base Price (rather
than Gross  Receipts) in respect of NRC Net Sales;  and 10.8% of the  applicable
Royalty Base Price  (rather than Gross  Receipts) in respect of sales  through a
club operation.

          (c) (1) The basic  royalty on NRC Net Sales of  Mid-Price  Home Videos
shall be 13.6% of the applicable Royalty Base Price.

               (2) The basic  royalty  on NRC Net Sales of  Budget  Home  Videos
shall be 10.8% of the applicable Royalty Base Price.

     2.03 With respect to the  exploitation  by Licensees of Screen  Savers from
Recordings,  the Sony Venturer shall credit to the Venture a basic royalty equal
to 18% of the applicable Royalty Base Price on NRC Net Sales.

                                    2

<PAGE>

3. MISCELLANEOUS ROYALTY PROVISIONS.  Notwithstanding  anything to the contained
in Articles 4 and 5 hereof:

     3.01 No  royalties  shall be  credited to the Venture in respect of Records
sold or  distributed  as cutouts  after listing of such Records has been deleted
from  the  applicable  catalog,  for  promotional  purposes  (such  as to  radio
stations),  or as "free", "no charge",  or so-called "bonus" Records (whether or
not intended for resale).

     3.02 With respect to Records  embodying  Master  Recordings,  together with
other  Recordings,  the royalty  rate to be  credited  to the  Venture  shall be
computed by a fraction, the numerator of which is the number of Sides consisting
of Master Recordings hereunder, and the denominator of which is the total number
of Sides contained on such Record.

     3.03 No royalty  shall be credited to the Venture  with  respect to Records
received by members of a club operation in an  introductory  offer in connection
joining it, or upon  recommending  that  another  join it, or as a result of the
purchase of a required number of Records, including, without limitation, Records
distributed  as  "bonus"  or  "free"  Records,  or  Records  for  which the club
operation is not paid.

     3.04 Except as otherwise  indicated,  all royalties specified in Articles 1
and 2 hereof shall be based on 100% of Net Sales.

     3.05 The Sony  Venturer  shall  compute the royalties to be credited to the
Venture  hereunder in the same  national  currency in which the Sony Venturer is
credited for the sale or exploitation  concerned by the Licensee concerned,  and
the Sony Venturer  shall credit those  royalties to the Venture at the same rate
of  exchange  at which  the  applicable  Licensee  pays the Sony  Venturer.  For
purposes of accounting to the Venture  hereunder,  the Sony Venturer shall treat
any sale or exploitation  outside of the United States as a sale or exploitation
made during the same (6) month  period in which the Sony  Venturer  receives the
applicable  accounting  and  payment  for that sale.  (For the  purposes of this
paragraph,  only, any royalties  credited by a Licensee to the Sony Venturer but
charged in  recoupment of a prior advance made to the Sony Venturer and retained
by the Licensee by reason of that shall be deemed paid to the Sony  Venturer and
received by the Sony  Venturer when the Sony  Venturer  receives the  Licensee`s
accounting the credit and charge  concerned.) If any Licensee  deducts any taxes
from  its  payments  to the  Sony  Venturer,  the  Sony  Venturer  may  deduct a
proportionate amount of those taxes from royalties to be credited to the Venture
hereunder.  If any law, any government ruling, or any other restriction  affects
the amount of the payments which a Licensee can remit to the Sony Venturer,  the
Sony Venturer may deduct from royalties to be credited to the Venture  hereunder
an amount  proportionate  to the reduction in the Licensee`s  remittances to the
Sony Venturer.  If the Sony Venturer cannot collect payment in the United States
in U.S.  Dollars,  the Sony  Venturer  shall not be  required  to account to the
Venture for that sale,  except as provided  in the next two (2)  sentences.  The
Sony  Venturer  shall,  at the Promoter  Venturer`s  request and at the Promoter

                                        3
<PAGE>

Venturer`s  expense,  deduct from the monies so blocked and deposit in a foreign
depository the equivalent in local currency of the Venturer`s share of royalties
which would be credited to the Venture hereunder on the foreign sales concerned,
to The extent such monies are available for that purpose, and only to the extent
to which Profits are otherwise  distributable  to the Promoter  Venturer for the
fiscal  year  concerned.  All such  deposits  shall  constitute  payments to the
Promoter Venturer of the Venturer`s share of Profits for accounting purposes for
the fiscal year concerned.

4. DEFINITIONS.  Except as expressly  provided herein,  all terms defined in the
Joint Venture Agreement to which this Schedule B is attached shall have the same
meanings  in this  Schedule  B.  Notwithstanding  the  preceding  sentence,  the
following terms shall have the meanings set forth below;

     4.01  "Broadcast"  -  any  broadcast   transmission,   including,   without
limitation,    over-the-air   transmission,   cable   transmission,    satellite
transmission  or any other manner of broadcast  now known or which may hereafter
come into existence.

     4.02 (a)  "Budget  Home Video" - a Home Video  embodied  on an  Audiovisual
Record  bearing a Gross  Royalty Base more than 50% lower than the Gross Royalty
Base line  standard  videos in the same  configuration  released by the Licensee
concerned in the territory concerned ("Top Line Video Base").

          (b)"Mid-Price  Home  Video" - a Home  Video on an  Audiovisual  Record
bearing a Gross  Royalty Base between 25% and 50% lower than such Top Line Video
Base.

     4.03 (a) "Budget Record - a Record,  previously  released,  bearing a Gross
Royalty Base more than  thirty-two  percent  (32%) lower than the Gross  Royalty
Base applicable to the Top Line Records in the same configuration (e.g., whether
it is a tape cassette,  compact disc, or vinyl Record and whether it is an Album
or a Single) released by Sony or Sony`s Licensees in the country concerned.

          (b) "Mid-Price Record" - a Record, whether or not previously released,
bearing a Gross Royalty Base at least fifteen  percent (15%),  but not more than
thirty-two  percent (32%),  lower than the Gross Royalty Base  applicable to the
Top  Line  Records   (defined  in  subparagraph   4.03(c)  below)  in  the  same
configuration.

          (c) "Top Lane" Record - a Record  bearing the same Gross  Royalty Base
as the  majority  (or  plurality)  of  the  new  Record  releases  in  the  same
configuration (other than classical releases,  including but not limited to Sony
Classical and Masterworks releases) of Sony`s best selling artists.

     4.04 "Club Sales" - any direct sales to  consumers  by  mail-order  or on a
membership sales through Bertelsmann in Europe).

     4.05 "Container  Charge" - the applicable  percentage,  specified below, of
the Gross Royalty Base (less all taxes) applicable to the Records concerned:

          (a) Analog vinyl Records  (including Singles and 12-inch singles)- ten
percent (10%).

          (b) Analog cassette Records - twenty percent (20%).

                                       4
<PAGE>

          (c) Compact discs,  New Technology  Configurations  and Records in all
other configurations - twenty-five percent (25%).

Container  Charges  will not be deducted  Singles  packaged  only in stock paper
sleeves or for Audiovisual Records sold for home use.

     4.06 "Gross  Receipts" - all moneys  actually  and received by the Licensee
concerned from the exploitation concerned

     4.07  "Home  Video" - when  used in  connection  with the  exploitation  of
Videos,  means the use or  license of Videos  embodied  on  Audiovisual  Records
intended for use in personal residences,  including, without limitation,  Screen
Savers, but exclusive of Children`s Home Videos.

     4.08 "Infinity  Digital Series" - the budget and mid-price product lines of
classical  Records  (other than  Audiovisual  Records)  released  under the Sony
Classical  label  and  internally  Infinity  Digital,  Digital  Focus,  The  St.
Petersburg Classics, among others. (For purposes hereof, Infinity Digital Series
Records shall not be Budget Records or Mid-Price Records).

     4.09 "Royalty Base Price",  - the amount  specified  below ("Gross  Royalty
Base") applicable to the Records  concerned,  less all excise,  purchase,  value
added or similar taxes and less the  applicable  Container  Charge.  The Royalty
Base Price for Records sold through any Club  Operation will be the same as that
for the identical  Records Sold Through Normal Retail  Channels in the territory
concerned.

          (a) WITH RESPECT TO RECORDS (OTHER THAN AUDIOVISUAL  RECORDS) SOLD FOR
DISTRIBUTION IN CANADA - The Gross Royalty Base for a Record  reproducing  sound
only is the amount computed under section (1) or section whichever is lower:

               (1) the subdistributor  price published by Sony applicable to the
price series of the unit concerned at the commencement of the accounting  period
in which the sale occurs, less ten percent (10%); or

               (2)  the  prevailing   industry   suggested   retail  list  price
applicable to Records in the same  configuration  and the same  wholesale  price
category as the unit concerned_ In this section (2):

                    (i)  A  "major  U.S.   Record   company"   means  one  which
distributes  its  own  Records  directly  to  wholesalers  and  retailers  on  a
nationwide basis throughout the United States- (Those companies,  at the date of
this agreement, are Sony, the WEA group, BMG, Capitol/EM1 and Universal.)

                    (ii)  The  "wholesale  price"  of a  Record  distributed  by
another major U.S. record company means its published price  corresponding  most
closely  in  amount  to  a  subdistributor  price  for  a  Record  in  the  same
configuration published by Sony.

                                       5
<PAGE>

                    (iii) The "wholesale price category" of a Record distributed
by Sony includes:  (A) that Record;  and (13) Records in the same  configuration
sold by other  major U.S.  record  companies  whose  wholesale  prices for those
Records  correspond  most closely in amount to Sony`s  published  subdistributor
price for the Sony-distributed Record concerned.

                    (iv) "Prevailing industry suggested retail list price" means
the  average of retail list prices to Records in the  wholesale  price  category
concerned by the major U.S. Record companies which publish suggested retail list
prices.

Royalties  will be  calculated  separately  with respect to each price series in
which  units of a  particular  Record  release  are sold  during the  semiannual
accounting  period  concerned.  published prices in this section refer to at the
commencement of the accounting period concerned.

          (b) WITH RESPECT TO RECORDS (OTHER THAN AUDIOVISUAL  RECORDS) SOLD FOR
DISTRIBUTION  OUTSIDE OF THE UNITED STATES AND CANADA: The Gross Royalty Base is
the  applicable  amount  specified  in sections  (1)  through (4) below,  in the
country of sale, at the commencement of the accounting  period  concerned,  plus
taxes:

               (1) The manufacturer`s suggested retail list price of the Records
concerned.

               (2) If there is no suggested  list price,  the Gross Royalty Base
will  be the  base  used  for  computing  mechanical  royalties  on the  Records
concerned   by  agreement   between   Record   manufacturers   and  a  licensing
organization,  such as BIEM,  if that base is intended as an  equivalent of or a
substitute for an actual or hypothetical retail price.

               (3) If the  foregoing  base has been  replaced in the past, or is
replaced in the future, by a different base by a substantial number of the major
record  companies  in the  country  concerned  (for  example,  a  manufacturer`s
published dealers  ("p.p.d.") with other adjustment  intended to convert it to a
retail-related  base), the Gross Royalty Base will be the Licensee`s  p.p.d. for
the Records concerned multiplied by the uplift adopted by such record companies,
provided that uplift is supported by a industry-wide market survey.

               (4) If  neither  subsections  (1),  (2) or (3)  apply,  the Gross
Royalty Base will be the Licensee`s p.p.d. for the Records concerned  multiplied
by one hundred twenty-six percent (126%).

          (c) WITH RESPECT TO AUDIOVISUAL.  RECORDS SOLD FOR  DISTRIBUTION:  The
Gross Royalty Base is the manufacturer`s published price to dealers ("p.p.d." in
the country  concerned at the commencement of the semi-animal  accounting period
concerned.

          (d) WITH  RESPECT TO SCREEN  SAVERS SOLD FOR  DISTRIBUTION:  The Gross
Royalty Base is the manufacturer`s  published price to dealers ("p.p.d.") in the
country  concerned at the  commencement  of the  semi-annual  accounting  period
concerned.

     4.10 "Licensee" - a Person to whom the Sony Venturer sublicenses the rights
acquired by the Venture hereunder outside the United States and to whom the Sony
Venturer  also  licenses  the rights to  manufacture  and/or sell Records from a

                                       6
<PAGE>

substantial  portion of  Recordings  owned or controlled by the Sony Venturer in
the territory concerned.

     4.11 "Master Recording" - as defined in the Joint Venture Agreement.

     4.12 "MTV" - a television  channel devoted  exclusively to the presentation
of music Videos in more than one country.

     4.13 "Net  Receipts" - means  Gross  Receipts  less Third  Party  Payments,
duplication  costs  and any  other  out-of-pocket  expenses  arising  out of the
exploitation concerned.

     4.14 "Net Sales" - 100% of gross sales less returns and credits. In respect
of any territory as to which the Sony Venturer is credited for less than 100% of
gross  sales,  then "Net  Sales" in  respect  of such  territory  shall mean the
percentage  which the Sony Venturer  actually  receives in such territory,  less
returns and credits.  Notwithstanding the two preceding sentences, in respect of
Canada, "Net Sales" shall mean 92.5% and credits.

     4.15 "New Technology  Configurations" - shall mean Records in the following
configurations:  mini-discs,  digital  compact  cassettes,  digital audio tapes,
laser  discs,  CD-ROM  and  other  Records  embodying,  employing  or  otherwise
utilizing  any  non-analog  technology  (whether  or not  presently  existing or
hereafter created or developed),  but specifically  excluding audio-only compact
discs.

     4.16  (a)  "Records"  -  all  forms  of  reproductions,   transmissions  or
communications  of  Master  Recordings  now or  hereafter  known,  manufactured,
distributed,  transmitted or  communicated  primarily for home use,  school use,
juke box use or use in means of transportation,  including,  without limitation,
Records embodying or reproducing sound alone and Audiovisual Records.

          (b)  "Audiovisual  Record" - any Record  which  embodies,  reproduces,
transmits or otherwise  communicates visual images whether or not interaction of
a consumer  is  possible or  necessary  for the visual  images to be utilized or
viewed.

     4.17 "Reissue  Label" - a label,  such as the Legacy label,  used primarily
for reissues of Master Recordings released previously.

     4.18 "Sales Through Normal Retail  Channels" - refers of Records other than
(a) Club third other than the Licensee in the territory concerned; and (c) sales
by any "special products operations".

     4.19 "Screen Savers" - shall mean any computer  software  application which
displays moving images for the purpose of, among other things, preventing damage
to computer monitors.

     4.20 "Side" - a  Recording  of a  continuous  performance  of a  particular
arrangement  or  version  of a  composition,  not less than two and one  quarter
(2-1/4) minutes in playing time.

     4.21 (a)  "Single"  - a vinyl  audio-only  Record  not more than  seven (7)
inches in diameter, or the equivalent in non-vinyl configurations.

                                       7
<PAGE>

          (b)"Twelve-inch  Single"/"Maxi-Single" - a vinyl audio-only Record not
more than  twelve  (12)  inches  in  diameter  or the  equivalent  in  non-vinyl
configurations  which is initially  priced,  marketed and sold as a  Twelve-inch
Single or Maxi-Single.

          (c)"Extended  Play  Record" or "EP" - an  audio-only  Record  which is
initially priced, marketed and sold as an EP, and does not constitute an Album.

          (d)"Album" - one (1) or more audio-only  Records, at least thirty-five
(35) minutes in playing time, and sold in a single package.

     4.22 "Third Party  Payments" - all  applicable  royalties,  fees,  or other
payments of any description  paid or payable to third parties arising out of the
exploitation  concerned,  including,  without  limitation,  artist and  producer
royalties  and  payments  pursuant  to  any  applicable   collective  bargaining
agreements in connection  with such sales,  but excluding  mechanical  royalties
arising out of the exploitation concerned.

     4.23 (a) "Video" - otherwise  provided in subparagraphs  (b) and (c) below,
an audiovisual  work featuring,  primarily,  the audio  soundtrack of one (1) or
more Recordings hereunder.

          (b) "Short  Form Video" - a Video  embodying  no more than two musical
compositions.

          (c) "Long Form Video" - all Videos exclusive of Short Form Videos.

     4.24 "Recording" - every recording of sound,  whether or not coupled with a
visual image,  by any method and on any  substance or material,  or in any other
forth or format,  whether now or hereafter  known,  which is used the recording,
production   and/or   manufacture  of  Records  or  for  any  other   commercial
exploitation.

     4.25 "Person" - any natural person,  legal entity, or other organized group
of persons or entities.  (All pronouns,  whether  personal or impersonal,  which
refer to Persons include natural persons and other Persons.)

                                       8
<PAGE>

                        ASSENT AND GUARANTY OF PRINCIPAL

     To induce the Sony  Venturer  to enter  into the  foregoing  joint  venture
agreement with the Promoter Venturer (the "Joint Venture Agreement"):

1. [NAME] (each, a "Principal"):

          (a)  represents to the Sony Venturer that he or she has read the Joint
Venture  Agreement and has consulted with or has had the  opportunity to consult
with a lawyer chosen by him or her for the purpose of having the legal effect of
each of the provisions contained in the Joint Venture Agreement explained to him
or her;

          (b) assents to the execution of the Joint Venture Agreement and agrees
to be bound by all  grants,  restrictions,  and  other  provisions  of the Joint
Venture Agreement relating to the Principal;

          (c) acknowledges  that neither the Sony Venturer nor the Venture shall
have any obligation to make any payments to the Principal in connection with the
submission of Artists by the Principal or the  production  services  rendered by
the Principal or the fulfillment of the Principal`s  other obligations under the
Joint Venture Agreement; and

          (d) agrees that if during the Term the Promoter  Venturer  shall cease
to be entitled to furnish any of  Principal`s  services as  contemplated  by the
Joint  Venture  Agreement,  Principal  shall,  at the  Sony  Venturer`s  (or the
Venture`s) request, take all such steps and actions as give to the Sony Venturer
(or the Venture) the same  rights,  privileges  and benefits as the Sony (or the
Venture)  would  have had under the Joint  Venture  Agreement  and such  rights,
privileges  and benefits  shall be  enforceable  on the Sony  Venturer`s (or the
Venture`s)  behalf  against  the  Principal  and all the  terms  and  conditions
contained in the Joint Venture Agreement shall be effective.

2. (a) Each Principal:

               (i)  guarantees,   absolutely  and   unconditionally,   the  full
performance  by  the  Promoter  Venturer  of  all  of  the  Promoter  Venturer`s
representations, warranties, and obligations under the Joint Venture Agreement;

               (ii)  agrees  to  indemnify  and hold the Sony  Venturer  and the
Venture harmless from any loss, damage,  liability or expense (including but not
limited to attorneys`  fees and legal  expenses) which arise from any failure by
the  Promoter  Venturer  to fulfill  the  Promoter  Venturer`s  representations,
warranties,  or  obligations  under the Joint  Venture  Agreement,  or which are
incurred  by the Sony  Venturer or the  Venture in the  enforcement  of the Sony
Venturer`s or the Venture`s rights this guaranty of the Joint Venture  Agreement
as they apply to the Promoter Venturer); and

               (iii) shall  notify the Sony  Venturer  and, if  applicable,  the
Venture promptly in writing if the Promoter  Venturer shall cease to be entitled
to Principal`s production services, Principal`s production services.

<PAGE>

          (b) The  Principal`s  liability  under  this  guaranty  is direct  and
immediate,  and is not conditioned  upon the pursuit by the Sony Venturer or the
Venture may have  against the  Promoter  Venturer.  This  guaranty  shall not be
revocable  at any time or for any reason,  including,  without  limitation,  any
modification  of the  Joint  Venture  Agreement  with or  without  notice to the
Principal. No failure by the Sony Venturer or the Venture to exercise any of the
Sony  Venturer`s  or the  Venture`s  rights  shall  operate as a waiver of those
rights or any other rights or remedies.

As of ______________, 2003

                                     --------------------------------------
                                     [NAME]

                                     [NAME]

                                     --------------------------------------
                                     [NAME]

                                     SONY MUSIC, a Group of Sony Music
                                     Entertainment, Inc.

                                     By:
                                        ------------------------------------
                                        Name:
                                        Title:

--------
1        All references to Radio apply in like manner to Television.

<PAGE><PAGE>
                                                                EXHIBIT 10.3

                                 LOAN AGREEMENT

         THIS AGREEMENT (the "Agreement") is made and entered into this 1st day
of November, 2002, by and between Trimedia Entertainment Group, Inc., a Delaware
corporation (the "Borrower") and Gemini Growth Fund, LP, a Delaware limited
partnership (the "Lender").

                              W I T N E S S E T H :

         WHEREAS, the Borrower has requested that Lender make a loan to Borrower
of up to $250,000 (the "Loan"); and

         WHEREAS, Lender has agreed to make such a loan available to Borrower
upon the terms and conditions hereinafter set forth.

         NOW, THEREFORE, it is agreed as follows:

     SECTION 1.  Definitions.  All of the terms defined in this Agreement  shall
                -------------
have such defined meanings when used in the other Loan Documents (as hereinafter
defined) and any certificates,  reports or other documents or instruments issued
under or delivered  pursuant to this Agreement  unless the context shall require
otherwise.  For purposes of this  Agreement,  the following terms shall have the
following meanings:

     1.1  "Affiliate"  shall  mean an entity  that is a member of a  "controlled
group of  corporations"  (within the meaning of Section  414(b) of the  Internal
Revenue  Code),  an  "affiliated  service  group" (within the meaning of Section
414(m) of the Internal  Revenue  Code),  or a group of trades or business  under
common  control  (within the meaning of Section  414(c) of the Internal  Revenue
Code) that also includes the Borrower as a member.

     1.2  "Agreement"  shall  include  this  Agreement  as amended,  modified or
supplemented from time to time.

     1.3  "Authorized  Officer"  shall mean the Chief  Executive  Officer or the
President  of the  Borrower or such other  person  designated  in writing to the
Lender, who is authorized to act on behalf of the Borrower hereunder.

     1.4  "Business  Day"  means  a day  upon  which  banks  are  open  for  the
transaction of business of the nature required by this Agreement in Texas.

     1.5 "Capital  Expenditure":  means any payment made  directly or indirectly
for the purpose of acquiring or  constructing  fixed  assets,  real  property or
equipment  which in accordance  with GAAP would be added as a debit to the fixed
asset  account  of  the  Person  making  such  expenditure,  including,  without
limitation,  amounts paid or payable under any  conditional  sale or other title
retention  agreement or under any lease or other  periodic  payment  arrangement
which is of such a nature  that  payment  obligations  of the  lessee or obligor
thereunder would be required by generally accepted  accounting  principles to be
capitalized  and shown as  liabilities  on the  balance  sheet of such lessee or
obligor.

<PAGE>

     1.6 "Cash Flow"  means an amount  equal to (i) the  Borrower`  Consolidated
EBITDA,   minus   (ii)  the   Borrower`s   Consolidated   non-financed   Capital
Expenditures.

     1.7 "Capital Lease" means any lease of property  (real,  personal or mixed)
which,  in accordance with GAAP,  should be capitalized on the lessee`s  balance
sheet or for which the  amount of the asset and  liability  thereunder  as if so
capitalized should be disclosed in a note to such balance sheet.

     1.8 "Change of  Control"  means (a) a Change of  Ownership;  (b) during any
period of twelve consecutive  calendar months,  individuals who at the beginning
of such period constituted the board of directors of the Borrower (together with
any new  directors  whose  election by the board of directors of the Borrower or
whose  nomination for election by the shareholders of Borrower was approved by a
vote of at least  two-thirds  of the  directors  then still in office who either
were directors at the beginning of such period or whose  elections or nomination
for election was  previously so approved)  cease for any reason other than death
or  disability to  constitute a majority of the  directors  then in office.  For
purposes of this Agreement, neither the reincorporation of U.S. Patriot, Inc. to
a Delaware corporation, the merger with U.S. Patriot, Inc. into Borrower nor the
election  or  appointment  of  directors  in the next 90 days as a result of the
merger shall be deemed a Change of Control.

     1.9 "Change of Ownership"  means any person or group of persons (other than
the Lender  and/or the  shareholders  of the Borrower on the Closing  Date) that
shall have  acquired  beneficial  ownership  (within  the  meaning of Rule 13d-3
promulgated  by the  Securities  and Exchange  Commission  under the  Securities
Exchange Act of 1934, as amended) of forty percent (40%) or more  (computed on a
fully diluted  basis) of the issued and  outstanding  shares of capital stock of
Borrower  having the right to vote for the  election  of  directors  of Borrower
under ordinary circumstances.

     1.10 "Closing Date" means the date first set forth above.

     1.11 "Committed Amount" means the principal amount of $250,000 which Lender
has agreed to lend to Borrower as evidenced by the Convertible Note.

     1.12 "Common Stock" shall have the meaning as defined in Section 3.3.

     1.13 DELETED.

     1.14 "Consolidated EBITDA" means, for any Person for any period:

          (i) the  consolidated  net income of such Person and its  Consolidated
     Subsidiaries for such period (after Income Taxes), but excluding:

               (a) any gain arising from the sale of capital assets,

               (b) any gain arising from any write-up of assets,

                                        2
<PAGE>

               (c) earnings of any other Person, substantially all of the assets
          of  which  have  been  acquired  by such  Person  or its  consolidated
          Subsidiaries  in any  manner,  to the extent that such  earnings  were
          realized by such other Person prior to the date of such acquisition.

               (d)   earnings   of  any  Person  in  which  the  Person  or  its
          Consolidated Subsidiaries has an ownership interest (other than wholly
          owned Subsidiaries of such Person), unless such earnings have actually
          been received by the Person or its  Consolidated  subsidiaries  in the
          form of cash distributions,

               (e)  earnings of any Person to which  assets of the Person or its
          Consolidated   Subsidiaries  shall  have  been  sold,  transferred  or
          disposed of, or into which the Person shall have merged, to the extent
          that such earnings arise prior to the date of such transaction,

               (f) any gain arising from the  acquisition  of any  securities of
          such Person or any of its Consolidated subsidiaries, and

               (g) any extraordinary  gain realized by such Person or any of its
          Consolidated subsidiaries during such period.

          (ii) plus the following,  but only in each case to the extent incurred
     by the Borrower and its  Consolidated  Subsidiaries  during such period and
     deducted in the calculation above for such period,

               (a) all income and franchise taxes,

               (b) all Interest Expense,

               (c) all depreciation expense, and

               (d) all amortization expense.

     1.15 "Consolidated  Subsidiary" or "Consolidated  Subsidiaries"  means, for
any  Person,  any  Subsidiary  or other  entity the  accounts  of which would be
consolidated with those of such Person in its consolidated  financial statements
as of such date in accordance with GAAP.

     1.16 "Current  Assets" means, at any particular time, all amounts which, in
conformity  with GAAP,  would be  included as current  assets on a  consolidated
balance  sheet of the Borrower and its  Subsidiaries;  provided  however,  there
shall be excluded  therefrom (a) all prepaid  expenses of every type and nature,
(b) all amounts due from partners,  officers,  stockholders or other Affiliates,
and all loans due from employees, and (c) all deferred charges.

     1.17 "Current  Liabilities"  means,  at any  particular  time,  all amounts
(including  deferred taxes) which, in conformity with GAAP, would be included as
current  liabilities  on a  consolidated  balance  sheet of the Borrower and its
Subsidiaries.

     1.18  "Current  Ratio"  means  the  ratio  of  Current  Assets  to  Current
Liabilities.
                                        3
<PAGE>

     1.19 "Debt" means,  with respect to any Person on any date of determination
(without  duplication),  (i)  all  obligations  for  borrowed  money,  (ii)  all
obligations evidenced by bonds, debentures, notes or similar instruments,  (iii)
all  obligations  to pay the  deferred  purchase  price of  property or services
except trade accounts  payable  arising in the ordinary course of business which
are paid when due in accordance  with  ordinary-course  payment terms,  (iv) all
obligations  arising under acceptance  facilities or facilities for the discount
or sale of accounts  receivable,  (v) all direct or  contingent  obligations  in
respect  of  letters  of  credit,  (vi)  lease  obligations  (other  than  lease
obligations  with  respect to  operating  leases)  that have been (or under GAAP
should be)  capitalized  for financial  reporting  purposes,  (vii)  liabilities
secured  (or for  which the  holder of any  obligations  or  liabilities  has an
existing right,  contingent or otherwise, to be so secured) by any Lien existing
on  property  owned or  acquired  by that  Person  and  (viii)  all  guaranties,
endorsements and other contingent  obligations for liabilities or obligations or
the  maintenance  of financial  condition of others,  including  obligations  to
repurchase  or purchase  properties  or to  maintain  or cause to  maintain  any
financial condition.

     1.20  "Default" or "Event of Default" means the occurrence of all or any of
the events  specified in Section 7 and/or set forth in the Convertible  Note (as
defined below).

     1.21  "Indebtedness"  means with respect to any Person, all indebtedness of
such  Person  for  borrowed  money,  all  indebtedness  of such  Person  for the
acquisition of property other than purchases of products and  merchandise in the
ordinary  course of business,  indebtedness  secured by a lien,  pledge or other
encumbrance on the property of such Person whether or not such  indebtedness  is
assumed,  all  liability of such Person by way of  endorsements  (other than for
collection  or deposit in the ordinary  course of business);  all  guarantees of
Indebtedness  of any  other  Person by such  Person  (including  any  agreement,
contingent  or  otherwise,   to  purchase  any  obligation   representing   such
Indebtedness or property constituting security therefor, or to advance or supply
funds for such purpose or to maintain  working capital or other balance sheet or
income statement condition,  or any other arrangement in substance effecting any
of the foregoing); all leases and other items which in accordance with Generally
Accepted Accounting Principles are classified as liabilities on a balance sheet.

     1.22  "Interest  Expense"  means,  with  respect  to any Person and for any
period (without  duplication),  all interest on that Person`s Debt, whether paid
in cash or accrued as a  liability  and  payable in cash  during any  subsequent
period  (including,  without  limitation,  the  interest  component  of  Capital
Leases), as determined by GAAP.

     1.23  "Liabilities"  mean all liabilities,  obligations and indebtedness of
any and every kind and nature (including, without limitation, lease obligations,
accrued interest, charges, expenses,  attorneys` fees and other sums) chargeable
to the Borrower and made to or for the benefit of the Borrower,  whether arising
under this  Agreement or arising under the Note or any of the Loan  Documents of
the  Borrower,  whether  heretofore,  now or hereafter  owing,  arising,  due or
payable from Borrower to the Lender and however evidenced,  credited,  incurred,
acquired or owing, whether primary,  secondary,  direct,  contingent,  fixed, or
otherwise, including obligation of performance.

     1.24 "Liens" shall have the meaning set forth in Section 3.9.

                                        4
<PAGE>

     1.25 "Loan  Amount"  means the  principal  amount of up to  $250,000  which
Lender has agreed to lend Borrower at Lender`s sole option.

     1.26 "Loan  Documents"  means this  Agreement,  the  Convertible  Note, the
Pledge  Agreement,  the Warrant,  the  Security  Agreement,  and all  documents,
instruments,  certificates,  reports  and  all  other  written  matters  whether
heretofore,  now, or hereafter  executed by or on behalf of the Borrower  and/or
delivered to Lender in connection herewith.

     1.27  "Convertible  Note"  or  "Note"  means  one or  more  Senior  Secured
Promissory  Notes,  to be  executed  by the  Borrower  in favor  of the  Lender,
substantially in the form of Exhibit 1 attached hereto.

     1.28 "Material  Adverse Effect" shall have the meaning set forth in Section
3.1.

     1.29 "Net Income" or "Net Loss"  means,  with respect to any Person for any
period,  the net income or net loss of such Person determined in accordance with
GAAP,  after  payment  of  income  Taxes  but  excluding  any  extraordinary  or
non-recurring items.

     1.30  "Obligation"  shall  mean the  principal  amount  of the  Loan,  plus
fourteen percent (14%) interest per annum (subject to adjustment)  together with
such costs and  reimbursements  as may be due under the Loan  Agreement  and the
Note.

     1.31 "Pledge Agreement",  if any, means the pledge agreement of approximate
even date herewith executed by pledgor in favor of the Lender.

     1.32  "Registrable  Securities" shall mean (i) the Common Stock issued upon
conversion of the  Convertible  Notes,  or (ii) any Common Stock issued upon the
exercise of the Warrant,  right or other security which is issued in conjunction
with this  transaction by way of stock  dividend;  any other  distribution  with
respect to or in exchange for, or in replacement  of Common Stock;  stock split;
or in  connection  with  a  combination  of  shares,  recapitalization,  merger,
consolidation or other reorganization.

     1.33  "Person"  means an  individual,  partnership,  corporation,  business
trust, joint stock company,  trust,  unincorporated  organization,  association,
joint venture or a government or agency or political subdivision thereof.

     1.34  "Security   Agreement"  means  that  certain  Security  Agreement  of
approximate even date herewith executed by the Borrower in favor of the Lender.

     1.35  "Subsidiary"  means any corporation or limited  liability  company of
which at least a 50% of the outstanding securities having ordinary voting powers
for the election of Board of Directors  (or similar  governing  body) are at the
time owned by Borrower.  As used herein,  the term "Borrower" shall be deemed to
include all of Borrower`s Subsidiaries, if any.

     1.36  "Termination  Date" means the earlier of: (a) November 30, 2003;  (b)
the  date  of  the  occurrence  and  continuance  of an  Event  of  Default  (as
hereinafter defined);  (c) the date of repayment of the Loan Amount plus accrued
interest;  (d) the date of the  closing of a  secondary  public  offering by the

                                        5
<PAGE>

Borrower  and/or its  shareholders;  or (e) the date of the Change of Control of
the Borrower.

     1.37 "Warrant",  if any means that certain warrant of approximate even date
herewith executed by the Borrower in favor of the Lender.

     SECTION 2. Loan.
                ----

     2.1  Committed  Loan Amount.  Subject to the terms and  conditions  of this
          ----------------------
Agreement,  the Lender agrees to loan to the Borrower  $250,000  pursuant to the
terms of the Convertible Note and the other Loan Documents upon the execution of
this Agreement. The Lender shall provide such funds (via check or wire transfer)
to the Borrower  within five (5) business  days of receipt by the Lender of such
Loan  Documents  duly  executed by Borrower,  or within such  shorter  period as
Borrower and Lender mutually agree.  Nothing set forth herein shall prohibit the
Borrower from making  prepayments  without  penalty at any time and from time to
time (subject to prior  conversion  rights).  All provisions of the  Convertible
Note are incorporated herein by reference. Any conflicts between the Convertible
Note and this Loan Agreement  shall be resolved by reference to the  Convertible
Note. Upon execution of this Agreement,  contemporaneous with the funding of the
Loan, Borrower shall promptly pay to the order of the Lender a commitment fee in
the amount of 1% and an origination  fee of 4%. Such fees shall be applicable to
any further lending from Lender to Borrower.

     2.2 Payments of Interest and  Principal.  Interest on the Loan Amount shall
         -------------------
accrue at the rate of fourteen  percent (14%) per annum from the date of receipt
of funds by  Lender,  and shall be payable  via wire  transfer  in cash.  Unless
earlier  repaid in  accordance  with payment  provisions  set forth in the Note,
Borrower shall pay to Lender on the Termination Date the entire principal amount
of the outstanding  Convertible Notes, via wire transfer,  together with accrued
interest thereon and any fees then owed.

     2.3 Use of Proceeds. The proceeds of the Loan shall be used by the Borrower
        ----------------
in accordance with the provisions of Schedule 2.3 hereof.

     2.4 Conversion.       Terms found in the Convertible Note.
         ----------

     SECTION 3. Representations and Warranties. In order to induce the Lender to
enter  into  this  Agreement  and to  make  the  Loan  available,  the  Borrower
represents   and   warrants  to  the  Lender  as  of  the  Closing  Date  (which
representations  and  warranties  shall  survive the  delivery of the  documents
mentioned herein, and the termination of this Agreement) as follows:

     3.1 Organization.
         -------------
          (a) The Borrower and each  Subsidiary,  if any, is a corporation  duly
     organized,  validly  existing  and in good  standing  under the laws of the
     jurisdiction  of its  respective  formation,  has  the  power  to  own  its
     respective  properties  and to carry on its  respective  businesses  as now
     being conducted and is duly qualified to do business in every  jurisdiction
     in the United  States of America for which the failure to so qualify  would
     have a material impact on the financial condition,  operations, business or
     prospects of the Borrower ("Material Adverse Effect").
                                        6
<PAGE>

          (b) Schedule  3.1 sets forth true and complete  copies of the Articles
              -------------
     of  Incorporation  and  Bylaws,  as in  effect on the date  hereof,  of the
     Borrower and all other corporate  formation and governing documents of each
     of the Subsidiaries.  Except as set forth in Schedule 3.1(b),  the Borrower
     does not own or control, directly or indirectly, any equity interest in any
     corporation, company, limited liability company, association,  partnership,
     limited partnership, joint venture or other entity.

     3.2  Power  and  Authority.  The  Borrower  is duly  authorized  under  all
          ---------------------
applicable  provisions of law, its Articles of Incorporation,  and its Bylaws to
execute,  deliver and perform this Agreement, the Convertible Note and the other
Loan  Documents to which it is a party,  and all other action on the part of the
Borrower  required for the lawful  execution,  delivery and performance  thereof
have been duly taken. This Agreement and the other Loan Documents,  if any, upon
the due execution and delivery thereof,  are valid and enforceable  instruments,
obligations or agreements of the parties,  in accordance  with their  respective
terms,  except as to  enforcement  of creditors  rights  generally.  Neither the
execution of this Agreement and the Loan  Documents,  nor the  fulfillment of or
compliance  with their  provisions  and terms,  conflicts  with,  or has or will
result in a breach of the terms,  conditions or  provisions  of, or constitute a
violation of or default under: (a) any applicable law,  regulation,  order, writ
or decree;  or (b) any agreement or instrument to which the Borrower is a party,
or create any lien,  charge or encumbrance upon any of the property or assets of
any of them pursuant to the terms of any agreement or instrument to which any of
them is a party or by which any of them are bound  except  those in favor of the
Lender expressly created hereunder.

     3.3  Capitalization.  As of the date hereof, the total number of authorized
          --------------
shares of common stock of the Borrower (the "Common  Stock") is  100,000,000  of
which 1 share is  issued  and  outstanding  and the total  number of  authorized
shares of preferred stock of the Borrower (the "Preferred Stock") is 20,000,0000
shares,no sharesof which are issued and outstanding.  Borrower does not have any
authorized  shares of preferred  stock.  The outstanding  capitalization  of the
Borrower  as of the date hereof is set forth in  Schedule  3.3  annexed  hereto.
Except as otherwise disclosed in Schedule 3.3, there are no warrants, options or
preemptive  rights  authorized  or  outstanding  with  respect  to  any  of  the
Borrower`s capital stock. The Borrower shall not issue any derivative securities
without the express  written  consent of the Lender.  Following  the merger with
U.S. Patriot,  Inc. with the Borrower,  each share of U.S. Patriot,  Inc. common
stock and preferred stock, as the case may be, will be converted into and become
one validly issued, fully paid and non-assessable share of Borrower common stock
or preferred stock, as the case may be.

     3.4 Stock Ownership. The stockholders, which are reflected on Schedule 3.3,
         ---------------
are holders of all of the issued and  outstanding  Common  Stock and,  except as
contemplated  by the Loan Documents and Schedule 3.3, there are no  commitments,
agreements  or  undertakings  with respect to the issuance of any equity or debt
securities of the Borrower.

     3.5 Material Liabilities.  The sole outstanding material liabilities of the
         --------------------
Borrower are set forth on Schedule 3.5 annexed hereof.

     3.6 Proceeds of  Convertible  Note.  The Borrower shall use the proceeds of
         ------------------------------
the Convertible Note solely for those purposes set forth on Schedule 2.3 hereof.

                                        7
<PAGE>

3.7      Registration  Rights.  Except as set forth in Schedule 3.7, there are
         --------------------
no  registration  rights  agreements with respect to anyof the Borrower`s
capital stock.

     3.8 Material Agreements.  Except for those agreements set forth on Schedule
        --------------------
3.8 hereof,  there are no other  material  agreements to which the Borrower is a
party.

     3.9 Title to  Assets.  Except  as set forth on  Schedule  3.9  hereof,  the
        ------------------
Borrower has good and marketable title to all of its properties and assets,  all
of  which  are  free  and  clear  of any  and  all  liens,  mortgages,  pledges,
encumbrances  or  charges  of  any  kind  or  nature  whatsoever  (collectively,
"Liens").

     3.10 Litigation.  There are no pending or threatened actions or proceedings
         ------------
before any court,  any state,  provincial  or federal  regulatory  body,  or any
self-regulatory  organization  arbitrator or governmental or administrative body
or agency which would have a Material  Adverse  Effect or in any way  materially
affect or call into  question  the power and  authority of the Borrower to enter
into or perform this Agreement and the Loan Documents.

     3.11 Taxes. The Borrower has filed all income tax returns (if any) required
         -------
to be filed by it and all taxes due thereon have been paid,  and no  controversy
in respect of  additional  income  taxes,  municipal,  state or federal,  of the
Borrower is pending or threatened.

     3.12 Agreements or Restrictions Affecting the Borrower. The Borrower is not
         --------------------------------------------------
a party to or  otherwise  bound by any  contract or  agreement or subject to any
restrictions   which  would  have  Material  Adverse  Effect  or  restricts  the
Borrower`s  ability to enter into this Agreement or any of the other of the Loan
Documents  or the  Borrower`s  ability to effect the  transactions  contemplated
therein and herein.

     3.13 Governmental Approval. No approval of any federal, state, municipal or
          ---------------------
other local governmental authorities is necessary to carry out the terms of this
Agreement and the Loan  Documents,  and no consents or approvals are required in
the making or performance of this Agreement and the Loan Documents.

     3.14 Board of Directors. The Board of Directors of the Borrower consists of
          -------------------
Chris Schwartz.  Following the merger with U.S. Patriot,  the Board of Directors
shall be expanded  to include  such  number of  directors  required by the rules
promulgated by the Securities and Exchange Commission.

     3.15 No Untrue Statements. None of this Agreement or the Loan Documents nor
          ---------------------
any other agreements, reports, schedules, certificates or instruments heretofore
or  simultaneously  with the  execution of this  Agreement  delivered to Lender,
contains any misrepresentation or untrue statement of fact or omits to state any
fact necessary to make any of such agreements, reports, schedules,  certificates
or instruments not misleading.

     3.16 Employee Benefit Plans.
          ----------------------

         (a) Borrower has disclosed to Lender in writing prior to the execution
of the Agreement and has listed on Schedule 3.16 all Borrower Benefit Plans. If
there are any such plans, attached,to Schedule 3.16 are correct and complete

                                        8
<PAGE>

copies, in each case of all Borrower Benefit Plans. For purposes of this
Agreement, "Borrower Benefit Plans" means all pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive plan, all other written
employee agreements or programs, all medical, vision, dental, or other health
plans, all life insurance plans, and all other employee benefit plans or fringe
benefit plans, including, without limitation, "employee benefit plans" as that
term is defined in Section 3(3) of ERISA maintained by, sponsored in whole or in
part by, or contributed to by, the Borrower or any of its Affiliates for the
benefit of managers, members, employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries and under which
managers, members, employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries are eligible to participate. Any
of the Borrower Benefit Plans which is an "employee welfare benefit plan," as
that term is defined in Section 3(l) of ERISA, or an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA, is referred to herein
as a "Borrower ERISA Plan." Any Borrower ERISA Plan which is also a "defined
benefit plan" (as defined in Section 414(j) of the Internal Revenue Code or
Section 3(35) of ERISA) is referred to herein as a "Borrower Pension Plan."
Neither Borrower nor any Affiliate has an "obligation to contribute" (as defined
in ERISA Section 4212) to a "multiemployer plan" (as defined in ERISA Sections
4001(a)(3) and 3(37)(A)). Each "employee pension benefit plan," as defined in
Section 3(2) of ERISA, ever maintained by the Borrower or any Affiliate that was
intended to qualify under Section 401(a) of the Internal Revenue Code and with
respect to which any Affiliate has any liability, is disclosed as such in
Schedule 3.16.

         (b) Borrower has attached to Schedule 3.16 correct and complete copies
of the following documents: (i) all trust agreements or other funding
arrangements for such Borrower Benefit Plans (including insurance contracts),
and all amendments thereto; (ii) with respect to any such Borrower Benefit Plans
or amendments, all determination letters, rulings, opinion letters, information
letters, or material advisory opinions issued by the Internal Revenue Service,
the United States Department of Labor, or the Pension Benefit Guaranty
Corporation after December 31, 1994; (iii) annual reports or returns, audited or
unaudited financial statements, actuarial valuations and reports, and summary
annual reports prepared for any Borrower Benefit Plan with respect to the most
recent plan year; and (iv) the most recent summary plan descriptions and any
material modifications thereto.

         (c) All Borrower Benefit Plans are in material compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
laws, the breach or violation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the Borrower.
Each Borrower ERISA Plan currently maintained by Borrower which is intended to
be qualified under Section 401(a) of the Internal Revenue Code has received a
favorable determination letter from the Internal Revenue Service, and Borrower
is not aware of any circumstances which will or could reasonably result in
revocation of any such favorable determination letter. Each trust created under
any Borrower ERISA Plan, which is an "employee pension benefit plan" as defined
in Section 3(2) of ERISA, has been determined to be exempt from tax under
Section 501(a) of the Internal Revenue Code and Borrower is not aware of any
circumstance which will or could reasonably result in revocation of such
exemption. With respect to each Borrower Benefit Plan to the best knowledge of
Borrower, no event has occurred which will or could reasonably give rise to a
loss of any intended tax consequences under the Internal Revenue Code or to any
tax under Section 511 of the Internal Revenue Code that is reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect on Borrower.
                                        9
<PAGE>

There is no material pending or, to the best knowledge of the Borrower,
threatened litigation relating to any Borrower ERISA Plan.

         (d) No Affiliate has engaged in a transaction with respect to any
Borrower Benefit Plan that, assuming the taxable period of such transaction
expired as of the date of this Agreement, would subject any Affiliate to a
material tax or penalty imposed by either Section 4975 of the Internal Revenue
Code or Section 502(i) of ERISA in amounts which are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Borrower. Neither
Borrower nor, to the best of Borrower`s knowledge, any administrator or
fiduciary of any Borrower Benefit Plan (or any agent of any of the foregoing)
has engaged in any transaction, or acted or failed to act in any manner which
could subject Borrower to any direct or indirect liability (by indemnity or
otherwise) for breach of any fiduciary, co-fiduciary, or other duty under ERISA,
where such liability, individually or in the aggregate, is reasonably likely to
have a Material Adverse Effect on the Borrower. To its best knowledge, no oral
or written representation or communication with respect to any aspect of the
Borrower Benefit Plans has been made to employees of the Borrower or any
Affiliate which is not in accordance with the written or otherwise preexisting
terms and provisions of such plans, where any liability with respect to such
representation or disclosure is reasonably likely to have a Material Adverse
Effect on Borrower.

         (e) Since the date of the most recent actuarial valuation, there has
been (i) no material change in the financial position or funded status of any
Borrower Pension Plan, (ii) no change in the actuarial assumptions with respect
to any Borrower Pension Plan, and (iii) no increase in benefits under any
Borrower Pension Plan as a result of plan amendments or changes in applicable
Law, any of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Borrower. No Borrower Pension Plan has
an "accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA. All contributions with respect to
a Borrower Pension Plan have or will be timely made and there is no lien or
expected to be a lien under Internal Revenue Code Section 412(n) or ERISA
Section 302(f) or tax under Internal Revenue Code Section 4971. Neither the
Borrower nor any Affiliate has provided, or is required to provide, security to
a Borrower Pension Plan pursuant to Section 401(a)(29) of the Internal Revenue
Code. All premiums required to be paid under ERISA Section 4006 have been timely
paid by Borrower, except to the extent any failure would not have a Material
Adverse Effect on Borrower.

         (f) No liability under Title IV of ERISA has been or is expected to be
incurred by the Borrower or any Affiliate with respect to any defined benefit
plan currently or formerly maintained by any of them that has not been satisfied
in full (other than liability for Pension Benefit Guaranty Corporation premiums,
which have been paid when due), except to the extent any failure would not have
a Material Adverse Effect on Borrower.

         (g) The Borrower and any Affiliate have no obligations for retiree
health and retiree life benefits under any of the Borrower Benefit Plans other
than with respect to benefit coverage mandated by applicable Law.

         (h) Except as disclosed in Schedule 3.16(h), neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated

                                       10
<PAGE>

hereby will, by themselves, (1) result in any payment (including, without
limitation, severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any manager, director or any employee of the Borrower
or Affiliate under any Borrower Benefit Plan or otherwise, (2) increase any
benefits otherwise payable under any Borrower Benefit Plan, or (3) result in any
acceleration of the time of payment or vesting of any such benefit.

         (i) Except as set forth in the Schedule 3.16, Borrower does not
                                        --------------
maintain or otherwise pay for life insurance policies (other than group term
life policies on employees) with respect to any manager, director, officer or
employee. Schedule 3.16 lists each such insurance policy and includes a copy of
         --------------
each agreement with a party other than the insurer with respect to the payment,
funding or assignment of such policy. To the best of Borrower`s knowledge,
neither Borrower nor any Borrower Pension Plan or Borrower Benefit Plan owns any
individual or group insurance policies issued by an insurer which has been found
to be insolvent or is in rehabilitation pursuant to a state proceeding.

     SECTION 4. Conditions Precedent to Making Loan.
                ------------------------------------

         The Lender shall not be obligated to make the Loan until all of the
following conditions have been satisfied by proper evidence, execution and/or
delivery to the Lender of the following items, all in form, and substance
reasonably satisfactory to the Lender:

     (a)  The Convertible Note;

     (b)  This Agreement;

     (c)  Pledge Agreement,  Patent & Trademark  Filing,  and Delivery of Master
          pledging  and  securing  intellectual  property of the motion  picture
          "Snipes".

     (d)  A Security Agreement and UCC-1 for the Borrower and any Subsidiary;

     (e)  Guaranty of U.S. Patriot Inc. and 1025 Investments, Inc.

     (f)  Subordination by certain Lenders with Liens on Snipes.

     (g)  Unanimous  consent of the Board of  Directors  of the Borrower and all
          Subsidiaries,  certified  by the  Secretary  of the Borrower as of the
          Closing  Date,  approving  or  otherwise  ratifying  the  transactions
          contemplated  by  this  Agreement,  and  approving  the  form  of this
          Agreement and the Loan Documents, and authorizing execution, delivery,
          and performance thereof;

     (h)  Specimen  signatures  of the officer of the  Borrower  and  Subsidiary
          executing  this  Agreement  and the Loan  Documents,  and the  officer
          authorized  to  borrow  under  the Loan  Documents,  certified  by the
          Secretary of the Borrower or Subsidiary;

     (i)  A copy of the Articles of  Incorporation,  certified by an official of
          the Borrower`s  jurisdiction of formation or incorporation and further
          certified  by the  Secretary  of Borrower  not to have been altered or
          amended since certification by such official; and a copy of the Bylaws
          of the Borrower, certified as true and correct by the Secretary of the
          Borrower;

                                       11
<PAGE>

     (j)  Such  other  instruments,   documents  or  items  as  the  Lender  may
          reasonably request;

     (k)  No Event of Default shall have  occurred and be continuing  under this
          Agreement,  the Convertible Note or any other Loan Document, nor shall
          the  Borrower be in default  under any other  document or agreement to
          which it is a party or by which it or any of its  properties or assets
          are bound; and

     (l)  Payment of the  origination  and commitment fees referenced in Section
          2.1 hereof.

     SECTION 5. Affirmative  Covenants.  The Borrower covenants that, so long as
              -------------------------
any portion of the  Liabilities  remains unpaid and unless the Lender  otherwise
consents in writing, it will:

     5.1  Taxes  and  Liens.  Promptly  pay,  or cause to be  paid,  all  taxes,
         ------------------
assessments  and other  governmental  charges  which may  lawfully  be levied or
assessed upon the income or profits of the Borrower, or upon any property, real,
personal or mixed, belonging to the Borrower, or upon any part thereof, and also
any lawful claims for labor, material and supplies which if unpaid, might become
a lien or charge  against any such  property;  provided,  however,  the Borrower
shall not be required to pay any such tax, assessment,  charge, levy or claim so
long as the validity thereof shall be actively contested in good faith by proper
proceedings; but provided further that any such tax, assessment, charge, levy or
claim shall be paid or bonded in a manner  satisfactory to the Lender  forthwith
upon the commencement of proceedings to foreclose any lien securing the same.

     5.2 Business and Existence.  Do or cause to be done all things necessary to
         ----------------------
preserve  and to keep in full  force and effect any  licenses  necessary  to the
business of the Borrower,  its corporate existence and rights of its franchises,
trade names,  trademarks,  and permits  which are  reasonably  necessary for the
continuance of its business;  and continue to engage principally in the business
currently operated by the Borrower.

     5.3 Insurance and Properties.  Keep its business and properties  insured at
         -------------------------
all times with responsible  insurance companies and carry such types and amounts
of insurance as are required by all federal,  state and local governments in the
areas  which  Borrower  does  business  and as are  usually  carried by entities
engaged  in the  same or  similar  business  similarly  situated.  In  addition,
Borrower shall maintain in full force and effect policies of liability insurance
in amounts at least equal to that currently in effect.

     5.4 Maintain Property.  Maintain its property in good order and repair and,
         ------------------
from time to time, make all needed and proper repairs,  renewals,  replacements,
additions  and  improvements  thereto,  so that the  business  carried on may be
properly and  advantageously  conducted at all times in accordance  with prudent
business  management,  and maintain  annually  adequate reserves for maintenance
thereof.

                                       12
<PAGE>

     5.5 True Books.  Keep true books of record and account in which full,  true
         ----------
and correct  entries will be made of all of its dealings and  transactions,  and
set aside on its books such  reserves as may be required by  Generally  Accepted
Accounting  Principles,   consistently  applied,  with  respect  to  all  taxes,
assessments,  charges,  levies and claims referred to in Section 5.1 hereof, and
with respect to its business in general, and include such reserves in interim as
well as year-end financial statements.

     5.6 Pay Indebtedness to Lender and Perform Other  Covenants.  (a) Make full
         -------------------------------------------------------
and timely payment of the principal of and interest on the Convertible  Note and
all other  indebtedness  of the Borrower to the Lender,  whether now existing or
hereafter  arising,  including the payment of fees; and (b) duly comply with all
terms and covenants contained in this Agreement, the Convertible Note, the other
Loan  Documents  and any other  instruments  and  documents  given to the Lender
pursuant to this Agreement.

     5.7 Right of Inspection. Permit any person designated by the Lender, at the
        --------------------
Lender`s  expense,  to  visit  and  inspect  any of the  properties,  books  and
financial reports of the Borrower, all at such reasonable times upon forty-eight
(48) hours prior notice to Borrower,  and as often as the Lender may  reasonably
request, provided the Lender does not interfere with the daily operations of the
Borrower.

     5.8 Observance of Laws.  Conform to and duly observe all laws,  regulations
         ------------------
and other valid  requirements  of any  regulatory  authority with respect to the
conduct of its business.

     5.9  Borrower`s  Knowledge  of Default.  Upon an officer or director of the
          ---------------------------------
Borrower  obtaining  knowledge of, or threat of, an Event of Default  hereunder,
cause such  officer to  promptly,  within no more than ten (10)  business  days,
deliver to the Lender notice thereof  specifying the nature thereof,  the period
of existence thereof, and what action the Borrower proposes to take with respect
thereto.

     5.10 Notice of  Proceedings.  Upon an officer or  director of the  Borrower
         ------------------------
obtaining  knowledge of any material  litigation,  dispute or proceedings  being
instituted  or  threatened  against  the  Borrower,  or  any  attachment,  levy,
execution or other process being instituted  against any assets of the Borrower,
cause such officer to promptly, within no more than ten (10) business days, give
the  Lender  written  notice  of such  litigation,  dispute,  proceeding,  levy,
execution or other process.

     5.11  Payment  of  Lender`s  Expenses.  If at any time or times  hereafter,
           --------------------------------
Lender employs counsel in connection with the execution and  consummation of the
transactions contemplated by this Agreement or to commence, defend or intervene,
file a petition,  complaint,  answer,  motion or other pleading,  or to take any
action in or with respect to any suit or  proceeding  (bankruptcy  or otherwise)
relating to this Agreement or any other Loan Document,  or any other  agreement,
guaranty,  Convertible Note,  instrument or document  heretofore,  now or at any
time or times  hereafter  executed by Borrower and  delivered  to Lender,  or to
enforce any rights of Lender hereunder whether before or after the occurrence of
any Event of Default, or to collect any of the Liabilities,  then in any of such
events,  all of the reasonable  attorneys` fees arising from such services,  and

                                       13
<PAGE>

any  expenses,  costs  and  charges  relating  thereto,  shall  be  part  of the
Liabilities,  payable on demand.  In connection the initial loan  documentation,
counsel fees shall fees shall not exceed $5,000.

     5.12 Lender`s Representative. Borrower hereby grants to a representative of
          ------------------------
the Lender the right to attend and observe all Meetings of the Borrower`s  Board
of Directors  held during the period  commencing  on the Closing Date and for so
long as any Liabilities are due and owing to Lender, provided that said designee
is reasonably acceptable to the Board of Directors of the Borrower. The Borrower
shall  cause  such  designee  to  receive  written  notice  of all  meetings  of
Borrower`s  Board of  Directors as if such  designee was a member of  Borrower`s
Board of Directors. Lender`s designee shall be reimbursed for all reasonable and
customary out of pocket expenses relating to his service on the Board and or any
Committee thereof, and shall receive such compensation,  if any, all as shall be
commensurate with  reimbursements  and payments  received by other  non-employee
directors.  Borrower hereby agrees to provide  Lender`s  designee with a copy of
all written  consents of Borrower`s  Board of Directors within ten business days
after the date of any such consent. If this loan is still outstanding six months
from the date of funding, Lender shall have the right to nominate two members to
the Borrower`s Board of Directors,  and Borrower shall take all action necessary
to get such nominees elected immediately.  Lender`s  representative on the Board
shall be paid reasonable and customary director`s fees, expenses and options and
shall be insured under a D & O policy acceptable to Lender.

     5.13  Financial  Reporting.  The Borrower  shall provide to Lender  audited
          ----------------------[
annual  financial  statements,  audited  by  mutually  agreed  upon  independent
certified public accounting firm. Said financial statements shall be prepared in
accordance with Generally Accepted Accounting Principles,  consistently applied,
and shall be delivered to Lender  within ninety (90) days after the close of the
Borrower`s fiscal year. The report of the auditor that accompanies the financial
statements shall not contain any  qualifications or limitations.  The Borrower`s
fiscal  year ends on  December  31, and shall not be changed  without  the prior
written  consent of the Lender.  The Borrower shall provide to Lender  unaudited
monthly financial statements (including month to date and year to date actual to
prior  periods)  and a report  in the  form of  Exhibit  2,  both  presented  in
accordance with Generally Accepted Accounting Principles ("GAAP"),  consistently
applied, and shall be delivered to Lender within twenty-five (25) days after the
close of the  Borrower`s  month.  Borrower  shall also deliver any other reports
reasonably  requested by Lender. If the reports are not delivered within 25 days
of the month or request date,  whichever is  applicable,  then the Borrower will
pay a late fee of $250 per day until the report is delivered.  Lender shall keep
all non public  financial  statements  and other reports  deleivered by Borrower
confindential.

     5.14 Financial  Covenants.  As of the date hereof and until the Termination
          ---------------------
Date, the Borrower must maintain the following ratios:

         (a) Cash Interest Coverage. Until the Termination Date, the Borrower
shall maintain a Consolidated EBITDA ratio, based on any of the Borrower`s
quarterly financial statements (as determined on the last day of each fiscal
quarter for the immediately preceding quarter), of 2.0 or greater. The
Consolidated EBITDA ratio is defined as Consolidated EBITDA divided by Interest
Expense (Consolidated EBITDA / Interest Expense).

                                       14
<PAGE>

         (b) Cash Flow Coverage Ratio. The ratio of (a) the Borrower`s Cash Flow
to (b) the sum of (i) the Borrower`s consolidated Interest Expense plus (ii) the
Borrower`s scheduled payments of principal (including the principal component of
Capital Leases) to be paid during the 12 months following any date of
determination shall at all times exceed 1.5 to 1.0. Compliance with the ratio
will be tested as of the last day of each month, with Cash Flow and Interest
Expense being calculated for the twelve months then ended.

         (c) Current Ratio. The Borrower will at all times maintain a Current
Ratio of not less than 1.5 to 1.0. The Current Ratio shall be calculated and
tested quarterly as of the last day of each fiscal quarter of the Borrower.

         (d) Actual versus Budget. The Borrower shall on a quarterly basis
achieve 75 percent of its budgeted revenue and income. Budget numbers shall be
those delivered to Lender contemporaneously herewith and then on an annual
calendar basis.

         5.15 Certificate of Covenant Compliance On the last day of each March,
              ----------------------------------
June, October and December, the Borrower will issue a Certificate of Covenant
Compliance, executed by either the Chief Executive Officer or Chief Financial
Officer in the form of Schedule 5.15 attached hereto. If the Borrower is not in
compliance with the covenants specified in Sections 5 and 6 herein, the Borrower
will modify the Certificate of Covenant Compliance by stating the exception and
providing a detailed explanation of the non-compliance.

     SECTION 6. Negative  Covenants.  The Borrower covenants and agrees that, so
                --------------------
long as any  portion  of the  Liabilities  remains  unpaid and unless the Lender
otherwise gives its prior written consent, it will not, directly or indirectly:

     6.1 Mortgages,  Liens, Etc. Incur,  create,  assume or permit to exist, any
         -----------------------
mortgage,  pledge, security interest,  encumbrance,  lien or charge of any kind,
including  liens  arising  under  conditional  sales  or other  title  retention
agreements  upon any of its assets or properties of any character  other than in
the  ordinary  course of  business,  without  the prior  written  consent of the
Lender.

     6.2 Capital  Expenditures.  Make or become  committed to make,  directly or
         ---------------------
indirectly, any capital expenditures (including written limitation,  capitalized
leases)  amounting to in excess of $50,000 in the  aggregate,  without the prior
written consent of the Lender.

     6.3 Loans and Investments. Lend or advance money, credit or property to any
         ---------------------
Person,  or invest in (by capital  contribution  or  otherwise),  or purchase or
repurchase the stock or indebtedness  or assets or properties of any Person,  or
agree to do any of the foregoing, other than in the ordinary course of business,
without the prior written consent of the Lender.

     6.4  Guarantees.  Assume,  endorse or otherwise  become or remain liable in
          ------------
connection  with the  obligations  (including  accounts  payable)  of any  other
Person, other than in the ordinary course of business.

     6.5 Sale of Assets,  Dissolution,  Etc. Transfer,  sell,  assign,  lease or
         ----------------------------------
otherwise  dispose  of  any of its  properties  or  assets,  or  any  assets  or

                                       15
<PAGE>

properties  necessary or desirable for the proper  conduct of its  business,  or
transfer,  sell,  assign or otherwise  dispose of any of its  Convertible  Note,
accounts,  or  contract  rights  to any  Person,  or  change  the  nature of its
business,  wind-up,  liquidate  or dissolve,  or agree to any of the  foregoing,
other than in the ordinary course of business, without the prior written consent
of the Lender.

     6.6  Acquisition  of Assets.  Permit the purchase,  acquisition or lease of
          ----------------------
assets of any Person or Persons,  other than in the ordinary course of business,
without the prior written consent of Lender.

     6.7 Compensation. The Borrower must not increase the compensation of any of
         ------------
its  officers  or  consultants  making  more than  $100,000  per year,  hire any
relative of any officer, director or shareholder of the Borrower, or pay a bonus
to any such person.

     6.8  Indebtedness.   Incur,   create,   assume  or  permit  to  exist,  any
          -------------
indebtedness  or  obligation  or enter  into or  extend  or amend  any  material
agreement or lease in excess of $100,000,  without the prior written  consent of
Lender.

     6.9 Subsidiaries. Establish or form a partially or wholly owned subsidiary.
         ------------

     SECTION 7. Events of Default.
                 -----------------

     7.1 Defaults.  Each of the following  shall  constitute an Event of Default
         ---------
(an "Event of Default") hereunder: (a) the failure to pay when due any principal
or interest  hereunder or under the Convertible Note and the continuance of such
failure  for a period  of ten  (10)  business  days  thereafter;  (b) any  other
violation  by the Borrower of any recital,  funding  condition,  representation,
warranty,  covenant or agreement  contained  in this  Agreement or in any of the
Loan  Documents;  or any  violation  by the  Borrower  of any  recital,  funding
condition,  representation,  warranty,  covenant or  agreement  contained in any
other  document or  agreement  to which the Borrower and the Lender are parties;
(c) any change in the majority of the Board of Directors or of the management or
in the control of the Borrower which is not contemplated in Section 5.12 or 3.14
herein or previously  approved by the advance written consent of the Lender; (d)
execution of any  agreement,  letter,  memorandum  of  understanding  or similar
document  relating to the transfer,  disposition or sale of all or substantially
all of the assets of the Borrower to anyone  without the approval of the Lender;
(e)  an  assignment  for  the  benefit  of  creditors  by the  Borrower;  (f) an
application  for the appointment of a receiver or liquidator for the Borrower or
any of its material  assets;  (g) an issuance of an attachment or the entry of a
judgment  against  the  Borrower  in excess  of  $50,000;  (h) a default  by the
Borrower with respect to any other  indebtedness in excess of $50,000 due to the
Lender;  (i) the  making or  sending  of a notice of  intended  bulk sale by the
Borrower;  (l)  the  issuance  of  a  determination  by  a  court  of  competent
jurisdiction that one or more Loan Documents or one or more material  provisions
of any Loan Document is unenforceable,  or the issuance of an injunction against
the  enforcement of any such Loan Document or material  provision;  (m) upon the
reasonable  determination  by the Lender that there has been a Material  Adverse
Effect;  and (n) the  occurrence of an Activity  Event of Default (as defined in
Section 8.6  herein).  Upon the  occurrence  of any of the  foregoing  Events of
Default,  the Convertible  Note and the Loan will be considered to be in default
and the entire unpaid principal sum hereof, together with accrued interest, will
at the option of the holder thereof become  immediately due and payable in full.
Upon  the  occurrence  of an  Event  of  Default,  the  Borrower  agrees  to pay

                                       16
<PAGE>

reasonable  collection costs and expenses,  including reasonable attorneys` fees
and  interest  (cash only,  not stock) at the lesser of: (i) 18% per annum (cash
only, not stock) or (ii) the maximum rate allowed under applicable law, from the
date of the default at the maximum rate  permitted by law computed on the unpaid
principal balance.

     SECTION 8. SBIC Provisions.  The Borrower acknowledges that the Lender is a
                ----------------
small business  investment  company licensed by the United States Small Business
Administration,   and  makes  the  following  representations,   warranties  and
covenants to Lender:

     8.1 Small  Business  Concern.  The Borrower  represents and warrants to the
         -------------------------
Lender that the Borrower,  taken together with its "affiliates" (as that term is
defined  in 13 C.F.R.  ss.121.103),  is a "Small  Business  Concern"  within the
meaning of 15 U.S.C.  ss.662(5),  that is Section  103(5) of the Small  Business
Investment Act of 1958, as amended (the "Act"), and the regulations  thereunder,
including 13 C.F.R.  ss.107, and meets the applicable size eligibility  criteria
set forth in 13 C.F.R.  ss.121.301(c)(1)  or the industry  standard covering the
industry in which the  Borrower is  primarily  engaged as set forth in 13 C.F.R.
ss.121.301(c)(2).  Neither the  Borrower nor any of its  subsidiaries  presently
engages  in any  activities  for which a small  business  investment  company is
prohibited from providing funds by the SBIC Act, including 13 C.F.R. ss.107.

     8.2 Small Business Administration  Documentation.  On or before the Closing
          --------------------------------------------
Date, Lender shall have received SBA Form 480 (Size Status  Declaration) and SBA
Form 652 (Assurance of Compliance) which have been completed and executed by the
Borrower,  and SBA Form 1031 (Portfolio Finance Report),  Parts A and B of which
have been completed by the Borrower (the "SBA Documents").

     8.3 Inspection. The Borrower will permit the Lender or its representatives,
         -----------
at  Borrower`s  expense,  and  examiners  of the SBA to visit  and  inspect  the
properties  and  assets of the  Borrower,  to examine  its books of account  and
records,  and to discuss the Borrower`s affairs,  finances and accounts with the
Borrower`s officers,  senior management and accountants,  all at such reasonable
times as may be requested by the Lender or SBA.

     8.4  Informational  Covenant.  Within  sixty (60) days after the end of the
          -----------------------
fiscal year of the Borrower,  the Borrower will furnish or cause to be furnished
to Lender information  required by the SBA concerning the economic impact of the
Lender`s  investment,  for (or as of the end of)each fiscal year,  including but
not limited to,  board  minutes,  information  concerning  full-time  equivalent
employees;  Federal, state and local income taxes paid; gross revenue; source of
revenue growth;  after-tax profit and loss; and Federal,  state and local income
tax  withholding.  Such  information  shall be  forwarded  by Borrower on a form
provided by the Lender.  The Borrower also will furnish or cause to be furnished
to the  Lender  such other  information  regarding  the  business,  affairs  and
condition  of the  Borrower  as the  Lender  may  from  time to time  reasonably
request.

     8.5 Use of Proceeds. Subject to Section 2.3, the Borrower certifies that it
         ----------------
will use the  proceeds  from the Loan for the  purposes  and in the  amounts set
forth on Schedule 2.3. The Borrower will deliver to the Lender from time to time
promptly following the Lender`s request, a written report,  certified as correct
by an officer,  verifying  the purposes and amounts for which  proceeds from the
Loan have been  disbursed.  Subject to Section 2.3, the Borrower  will supply to

                                       17
<PAGE>

the Lender such additional  information  and documents as the Lender  reasonably
requests with respect to its use of proceeds, and will permit the Lender to have
access to any and all  Borrower  records and  information  and  personnel as the
Lender deems  necessary to verify how such proceeds have been or are being used,
and to assure that the  proceeds  have been used for the  purposes  specified on
Schedule 2.3.

     8.6 Activities and Proceeds.
         ------------------------

         (a) Neither the Borrower nor any of its affiliates (as defined in
above) will engage in any activities or use directly or indirectly the proceeds
from the Loan for any purpose for which a small business investment company is
prohibited from providing funds by the SBIC Act, including 13 C.F.R. ss.107.

         (b) Without obtaining the prior written approval of the Lender, the
Borrower will not change within one (1) year of the Closing Date the Borrower`s
business activity from that described on Schedule 8.6 to a business activity
which a small business investment company is prohibited from providing funds by
the SBIC Act. The Borrower agrees that any such changes in its business activity
without such prior written consent of the Lender will constitute a material
breach of the obligations of the Borrower under this Agreement and the Loan
Documents (an "Activity Event of Default").

     SECTION 9. Miscellaneous.
               ---------------
     9.1 Registration Rights.
         -------------------

         (a) Registrable Securities shall be fully registered and freely
tradeable within 180 days from the closing of the Loan. If the Borrower for any
reason fails to have the Registrable Securities fully registered within 180 days
from closing of the Loan, then, at the option of Lender, for each full calendar
month that the Registrable Securities are not fully registered, Borrower shall
issue 0.1 % of its common shares then outstanding computed on a fully diluted
basis per day until the shares are registered.

         (b) If at any time after the date hereof, the Borrower shall file a
registration statement relating to any of its securities, it will notify the
Holder in writing and, upon the Holder`s request, will include the offer and
sale of Registrable Securities in such registration statement. In the event that
the Borrower fails include Registrable Securities in a piggy back statement as
required herein, the Borrower shall give notice demanding a registration and 105
days after the notice the Borrower shall prepare and file a registration
statement with the SEC with respect to such Registrable Securities. If the
Borrower fails to file within said time period, then, at the option of Lender,
for each full calendar month that the Registrable Securities are not fully
registered, Borrower shall Borrower shall issue 0.1 % of its common shares then
outstanding computed on a fully diluted basis per day until the shares are
registered.

         (c) Whenever required to include Registrable Securities in any
registration or to effect the registration of any Registrable Securities
pursuant to this Agreement, the Borrower shall, as expeditiously as reasonably
possible prepare and file with the SEC a registration statement with respect to

                                       18
<PAGE>

such Registrable Securities and use its absolute best lawful efforts to cause
such registration statement to become effective, and use its absolute best
efforts to keep such registration statement effective until all such Registrable
Securities have been distributed. In addition, the Borrower shall use its best
lawful efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders, provided that the
Borrower shall not be required in connection therewith or as a condition thereto
to qualify as a broker-dealer in any states or jurisdictions or to do business
or to file a general consent to service of process in any such states or
jurisdictions.

         (d) All expenses, other than underwriting discounts and commissions
incurred in connection the registrations contemplated herein, including, without
limitation, all registration, filing and qualification fees, printers` and
accounting fees, fees and disbursements of counsel for the Borrower, and the
reasonable fees and disbursements of one counsel for the selling Holders, shall
be borne by the Borrower.

         (e) Subject to the terms and conditions of this Agreement and the
Convertible Notes, the right to cause the Borrower to register Registrable
Securities pursuant to this Agreement may be assigned by Holder to any
transferee or assignee of such securities; provided that said transferee or
assignee is a transferee or assignee of at least five percent (5%) of the
Registrable Securities.

     9.2  Computation  of  Interest  and Payment and  Prepayment  of  Principal.
          ---------------------------------------------------------------------
Interest on the Convertible Note shall be computed on the basis of a year of 365
days. If any principal amount under the Convertible Note becomes due and payable
on other than a Business Day, the maturity thereof shall be extended to the next
succeeding  Business Day and interest on such principal  shall be payable at the
then applicable rate during such extension period.

     9.3 Waiver of Default.  The Lender may, by written  notice to the Borrower,
          ---------------
at any time and from  time to time,  waive any  default  in the  performance  or
observance  of any  condition,  covenant  or other  term  hereof or any Event of
Default  which shall have  occurred  hereunder  and its  consequences.  Any such
waiver  shall be for such  period  and  subject to such  conditions  as shall be
specified in any such notice.  In the case of any such waiver,  the Borrower and
the Lender shall be restored to their former  position and rights  hereunder and
under the other Loan  Documents,  and any Event of  Default  so waived  shall be
deemed to be cured and not  continuing;  but no such waiver  shall extend to any
subsequent or other Event of Default, or impair any right consequent thereon.

     9.4 Amendments and Waivers. The Lender and the Borrower may, subject to the
        -----------------------
provisions of this  section,  from time to time,  enter into written  agreements
supplemental  hereto for the purpose of adding any  provisions to this Agreement
or the other Loan  Documents  or changing or waiving in any manner the rights or
requirements  of the  Lender  or of the  Borrower  hereunder.  Any such  written
supplemental agreement or waiver shall be binding upon the Borrower and Lender.

     9.5 Notices.  Except in cases where it is expressly  herein  provided  that
         --------
such notice,  request or demand is not effective  until received by the party to
whom  it is  addressed,  all  notices,  requests  and  demands  to or  upon  the

                                       19
<PAGE>

respective  parties  hereto under this  Agreement  and all other Loan  Documents
shall be deemed to have been given or made when  deposited in the mail,  postage
prepaid by registered or certified mail, return receipt requested,  addressed as
follows or to such other  address as may be hereafter  designated  in writing by
the respective parties.

                  The Borrower:             Trimedia Entertainment Group, Inc.
                                            101 Charles Drive
                                            Bryn Mawr PA 19010
                                            Attention:  Chris Schwartz
                                            Phone:  (610) 660-5906
                                            Fax  (610) 660-5905

                  The Lender:               Gemini Growth Fund, LP
                                            700 Gemini
                                            Houston, Texas 77058
                                            Attention:  Larry St. Martin
                                            Phone:  (281) 488-8484
                                            Fax:  (281) 488-8404

     9.6 No Waiver; Cumulative Remedies. No waiver of any provision hereof shall
         ------------------------------
be deemed to operate  as a waiver of any other  provision  hereof.  In the event
that the  Borrower  shall be deemed to have waived any  provision  hereof at any
time,  such waiver shall not be deemed to have  extended to any other  provision
hereof at the time such waiver was deemed to have occurred or at any other time.
No failure to exercise and no delay in  exercising,  on the part of Lender,  any
right,  power or privilege  hereunder,  shall operate as a waiver  thereof;  nor
shall 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.  The rights and remedies herein and in the other Loan
Documents  provided are  cumulative  and not exclusive of any rights or remedies
provided by law.

     9.7 Survival of Agreements. All agreements,  representations and warranties
         ----------------------
made herein shall survive the  execution and delivery of this  Agreement and the
other  Loan  Documents  and the making and  renewal of loans  hereunder  and the
termination of this Agreement and the other Loan Documents.

     9.8 Governing Law. This Agreement and the legal relations among the parties
         --------------
hereto  shall be governed by and  construed in  accordance  with the laws of the
State of Texas  without  regard to its  conflicts of law  doctrine.  Each of the
parties hereto irrevocably consents to the jurisdiction of the federal and state
courts located in Dallas County, the State of Texas.

     9.9  Enforceability of Agreement.  Should any one or more of the provisions
         -----------------------------
of this Agreement be determined to be illegal or unenforceable as to one or more
of the parties,  all other  provisions  nevertheless  shall remain effective and
binding on the parties hereto, up to the full amount permitted by law.

     9.10 Usury Savings Clause.  Notwithstanding  any other provision herein, in
          ---------------------
the event that the aggregate  interest  rate charged  under the Loan  Documents,
including  all charges or fees in connection  therewith  deemed in the nature of
interest,  exceeds the maximum legal rate,  then the Lender shall have the right

                                       20
<PAGE>

to make such adjustments as are necessary to reduce the aggregate  interest rate
to the maximum legal rate. The Borrower waives any right to prior notice of such
adjustment  and further  agrees that such  adjustment  may be made by the Lender
subsequent to notification from the Borrower that the aggregate interest charged
exceeds the maximum legal rate.  There are no unwritten oral  agreement  between
Borrower and Lender.

     9.11  Execution  of  Counterparts.  This  Agreement  may be executed in any
           ----------------------------
number of  counterparts,  each of which  shall be deemed  to be an  original  as
against  any party  whose  signature  appears  thereon,  and all of which  shall
together constitute one and the same instrument.

     9.12  Stamp  or  Other  Taxes.  The  Borrower  agrees  to pay  any  and all
           ------------------------
documentary,  intangible  stamp or excise  taxes  now or  hereafter  payable  in
respect to this  Agreement  and the other  Loan  Documents  or any  modification
thereof,  and shall hold the Lender harmless with respect thereto.  The Borrower
further  agrees  that Lender may deduct  from any  account of the  Borrower  the
amount of any such documentary or intangible stamp or tax payable,  the decision
of the Lender as to the amount thereof to be conclusive, absent manifest error.

     9.13 Intentionally deleted

     9.14 Fees and  Expenses.  The Borrower  shall  reimburse the Lender for all
         --------------------
past and future fees and expenses  (including but not limited to the origination
and commitment fee, reasonable  out-of-pocket costs, legal expenses (as detailed
above),  offering fees,  advisory and consulting fees,  travel and communication
expenses, and reproduction costs) incurred in connection with the Loan Documents
("Fees and Expenses").  Fees and Expenses  incurred  through the Closing Date by
the Borrower will be netted  against the initial  proceeds  received  under this
Agreement.  Fees and Expenses  incurred after the Closing Date shall promptly be
paid by the Borrower upon receipt from Lender of an invoice  itemizing such Fees
and Expenses.  Fees and Expenses  incurred  hereof to an affiliate of the Lender
shall be included with the Borrower`s Liabilities.

     9.15  Assignability.  This  Agreement  shall  inure to the  benefit  and be
           -------------
binding upon the parties  hereto and their  respective  successors and permitted
assigns.  This Agreement and the  Convertible  Note will not be  assignable,  in
whole or in part,  by the  Borrower,  without the prior  written  consent of the
Lender.  This Agreement may be assigned or transferred,  in whole or in part, by
the Lender upon written  notice to the  Borrower.  A change in control of either
party shall be deemed to be an  assignment.  Any purported  assignment  effected
without such consent shall be null and void.

     9.16 Complete  Agreement.  This Agreement  constitutes the entire agreement
         --------------------
between the parties and supersedes all agreements, representations,  warranties,
statements, promises and understanding, whether oral or written, with respect to
the subject matter hereof.

                            [SIGNATURE PAGE FOLLOWS]

                                       21
<PAGE>

         IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written.

WITNESS:                          GEMINI GROWTH FUND, LP
                                  By: GEMINI GROUP, LLC, its
                                      GENERAL PARTNER

______________________________    By:_________________________
Name:                               Scott Cook, Authorized Member

WITNESS:                          Trimedia Entertainment Group, Inc

______________________________    By:  __________________________
Name:                                 Chris Schwartz
                                      President

                                       22
<PAGE>

                                   ATTACHMENTS
                                  -------------

Exhibit 1             Form of Convertible Note
Exhibit 2             Financial Summary

Schedule 2.3          Use of Proceeds
Schedule 3.1          Organization
Schedule 3.1(b)       Subsidiaries
Schedule 3.3          Outstanding Equity Rights
Schedule 3.5          Material Liabilities
Schedule 3.8          Material Agreements
Schedule 3.16         Employee Benefit Plans
Schedule 5.15         Certificate of Covenant Compliance
Schedule 8.6          Business Activity

                                       23
<PAGE>

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