PARTNERSHIP AGREEMENT

                                FOR GSAC PARTNERS


         This Partnership Agreement ("Agreement") is being executed this 18th
day of November, 1996, but made effective as of the 31st day of May, 1996, by
and between PAVILION PARTNERS, a Delaware general partnership, and EXIT 116
REVISITED, INC., a New Jersey corporation. For and in consideration of the
mutual covenants herein contained, the parties to this Agreement hereby form and
create a general partnership, under and pursuant to the Partnership Act for the
purposes and upon the terms, provisions, and conditions as hereinafter set
forth:

                                    ARTICLE I

                                   Definitions

         As used in this Agreement, the following terms shall have the
respective meanings indicated:

         Affiliate: With respect to any Person, any other Person that directly
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the Person specified. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and under "common control with") when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly , whether through the ownership of voting
securities, by contract or otherwise. The provisions of Section 13.05 hereof
supplement and amend this definition.

         Amphitheater: The existing outdoor entertainment facility located in
Holmdel, New Jersey and commonly known as the Garden State Arts Center.

         Amphitheater Fiscal Year: The fiscal year of the Partnership for
financial accounting purposes. The first Amphitheater Fiscal Year shall end on
October 31, 1996. Subsequent Amphitheater Fiscal Years shall end on each
subsequent October 31st thereafter.

         Amphitheater Season: The portion of each calendar year which is
included between the period of time from May 1 to September 30 of such calendar
year, being the contemplated portion of each calendar year during which the
Amphitheater will be open for the presentation of events, performances and
shows. The first Amphitheater Season for purposes of this Agreement shall
commence May 1, 1996 and end on September 30, 1996.

         Ardee:  Exit 116 Revisited, Inc., a New Jersey corporation.

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         Artist Agreement: Any agreement or contract (written or oral) between
the Partnership and an artist, entertainer or performer by which such artist,
entertainer or performer agrees to appear and perform at a live concert or other
performance at the Amphitheater.

         Available Cash: After payment of any and all outstanding Deficit Loans,
the remaining cash (if any) held by the Partnership at the end of any
Amphitheater Season which, in the reasonable judgment of the Managing Partner,
is not required or reasonably expected to be required for the payment of
Operating Expenses between the end of such Amphitheater Season and the
commencement of the next succeeding Amphitheater Season.

         Capital Account: The tax capital account maintained by the Partnership
for each Partner in accordance with and as required by the provisions of Section
8.05 of this Agreement.

         Club Show: Any live entertainment event presented in an enclosed venue
with a maximum capacity for 3500 people or less.

         Code: The Internal Revenue Code of 1986, as amended.

         CPI Index: Consumer Price Index for All Urban Consumers (all U.S.
cities), 1982 -84 equals 100 Base, published monthly by the U.S. Department of
Labor's Bureau of Labor Statistics, or any successor publication.

         Defensive NY Amphitheater: Any Fully Restricted Facility which is being
proposed for development or construction in the Restricted NY Area which meets
both of the following criteria:

                  (a) the proposal to develop or construct such Fully Restricted
         Facility is made by a third party ("Developer"), including a
         governmental authority issuing a request for proposal, who is not
         affiliated with or related to either Partner or any Affiliate of either
         Partner; and

                  (b) neither Partner (nor any of its Affiliates) at any time
         after the date hereof encouraged, supported, instigated or assisted in
         any manner the Developer's decision to announce the proposal to (i)
         construct or develop such Fully Restricted Facility or (ii) seek bids
         from third parties for the construction, development or management of
         such Fully Restricted Facility.

         Deficit Loan: A loan extended by the Partners to the Partnership
pursuant to the provisions of Section 6.02 hereof.

         Development Costs: All costs and other expenses incurred by the
Partnership, or by the Partners before formation of the Partnership, in
connection with the design, planning, preparation, commencement, carrying out
and completion of the Renovation Work, including each and all of the following:

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                  (a) All costs directly associated with or attributable to the
         actual construction work related to the Renovation Work including (i)
         all costs associated with obtaining materials and services related to
         the Renovation Work and (ii) all fees and other sums payable to any
         contractor or construction manager relating to or in connection with
         the Renovation Work.

                  (b) All costs which are directly associated with or
         attributable to the research, development or design of the Renovation
         Work such as (i) predevelopment costs incurred in connection with the
         Renovation Work, (ii) all fees and payments made to architects, land
         planners, engineers and other consultants which are directly
         attributable to the design of the Renovation Work, (iii) all attorneys'
         fees and other consultants' fees incurred in connection with and
         directly attributable to the planning, developing, and designing of the
         Renovation Work and (iv) all fees, costs and expenses paid or incurred
         in connection with the obtaining of all necessary development,
         construction and use permits.

                  (c) The reasonable and necessary costs incurred in connection
         with responding to NJHA's Request for Proposal related to the
         privatization of the Amphitheater such as (i) travel and lodging
         expenses for personnel involved in the negotiation of the Lease
         Agreement and the Memorandum of Understanding and (ii) legal expenses
         incurred in connection with the negotiation of the Lease Agreement and
         Memorandum of Understanding.

                  (d) The types and categories of costs included in the
         construction budget attached hereto as Exhibit "B".

Notwithstanding any provision of the Lease Agreement to the contrary, for
purposes of this Agreement, the term "Development Costs" shall include, subject
to the provisions of Section 12.11 hereof, costs related to the negotiation,
documentation and finalization of the contractual and business arrangement
between the Partnership and NJHA as finally culminated in the Lease Agreement
(including, without limitation, legal fees and travel and lodging, costs).

         Development Cost Amount: The total amount of Development Costs actually
paid, incurred or expended.

         Development Cost Notice: Shall have the meaning assigned to such term
pursuant to Section 5.02(a) hereof.

         Downing Stadium: The entertainment facility located on Randall's Island
under the Triborough Bridge and commonly called Downing Stadium, in its current
condition and configuration.

         Final Budgeted Amount for Construction: The final budgeted amount for
the Development Cost Amount which the Managing Partner determines (and provides
notice of to Ardee) pursuant

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to the provisions of Section 12.11 hereof, as such final budgeted amount may be
revised as a result of an agreement with NJHA to revise or modify the design for
the Renovation Work as contemplated in Section 12.11(b)(ii) hereof.

         Fully Restricted Facility: Any amphitheater, bowl, greenfield or other
outdoor or open-air venue primarily designed for the presentation of live
entertainment events other than sports stadiums with a capacity for 45,000
persons or more.

         Lease Agreement: That certain Lease Agreement to be hereafter executed
as contemplated by the provisions of the Memorandum of Understanding, and by
which NJHA, as landlord, shall lease and demise to the Partnership, as tenant,
the Amphitheater, as such Lease Agreement may be amended from time to time.

         Major Actions: Any acts taken, sums expended or obligations incurred on
behalf of the Partnership for any of the following activities:

                  (a) incurring any indebtedness or borrowing any sums of money
         on behalf of the Partnership other than (i) Deficit Loans and (ii)
         trade payables; and other accounts payable incurred in the ordinary
         course of the business of the Partnership and consistent with the then
         effective Operating Budget;

                  (b) acquiring, on behalf of the Partnership, any of the
         following:

                           (i) any interest in real property other than the
                  leasehold estate created by the Lease Agreement; and

                           (ii) any personal property which is either (i) not
                  related to the ownership, use, operation or maintenance of the
                  Amphitheater or (ii) not capable of being purchased or leased
                  in a manner consistent with expenditures contemplated in the
                  then effective Operating Budget.

                  (c) agreeing, to modify, alter or otherwise amend any of the
         provisions of the Lease Agreement or any Major Operational Agreement,
         other than waivers or modifications made in the ordinary course of
         business;

                  (d) executing or delivering a Mortgage;

                  (e) expending any funds of the Partnership for Operating
         Expenses in amounts which exceed the amounts permitted to be expended
         in the Partnership's then effective Operating Budget; provided,
         however, Ardee's consent shall not be unreasonably withheld to any
         request made by the Managing Partner for the expending of funds of the
         Partnership for Operating Expenses in amounts which exceed the amounts
         permitted to be expended in the Partnership's then effective Operating
         Budget;

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                  (f) executing or otherwise entering into any Major Operational
         Agreement;

                  (g) executing a construction contract for any part of the
         Renovation Work; provided, however, (i) if Ardee fails to provide
         comments to, or reasons for refusing, its approval of, any proposed
         construction contract presented to it by the Managing Partner within
         five (5) business days, then Ardee shall be deemed to have approved
         such construction contract and (ii) Ardee shall not unreasonably
         withhold its consent to any proposed construction contract presented to
         it by the Managing Partner;

                  (h) subject to the provisions of Section 12.04 hereof,
         adopting or modifying an Annual Operating Budget for any Amphitheater
         Fiscal Year;

                  (i) selling, or agreeing to sell, the Amphitheater or any
         material portion thereof;

                  (j) entering into any contractual or business arrangement with
         a Partner or the Affiliate of any Partner; and

                  (k) engaging in any other business venture or entrepreneurial
         activity other than that directly related to the Partnership Purposes.

         Major Operational Action: Any Major Action which involves day-to-day
decisions affecting the use, operation and maintenance of the Amphitheater
including, without limitation, (i) executing, entering into or amending any
Major Operational Agreement, (ii) expending funds of the Partnership for
Operating Expenses in amounts which exceed amounts permitted to be expended in
the Partnership's then effective Operating Budget, (iii) executing a
construction contract for any part of the Renovation Work, and (iv) adopting or
modifying any Annual Operating Budget for any Amphitheater Fiscal Year.

         Managing Operational Agreement: Any material agreement relating to the
operation, use or maintenance of the Amphitheater such as, by way of example,
(i) food and beverage concession agreements, (ii) merchandise concession
agreements, (iii) sponsorship agreements, (iv) Artist Agreements, (v) employment
agreements with any of the Amphitheater's personnel and (vi) material service
contracts such as agreements for the provision of security services at the
Amphitheater or operation of the parking lots.

         Managing Partner:  Pavilion.

         Memorandum of Understanding: That certain Agreement Concerning Outdoor
Entertainment Facility dated 1995 and entered into by and among, (i) Delsener
Slater Enterprises, Ltd., an Affiliate of Ardee, (ii) Pavilion and (iii) NJHA.

         Mortgage: Any mortgage, deed of trust or other instrument creating a
lien on the Partnership's interest in the Amphitheater as security for repayment
of any liability or indebtedness.

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         Most Favorable Offer: Shall have the meaning assigned to such term
pursuant to the provisions of Section 12.02(c)(1) hereof.

         NJHA: New Jersey Highway Authority, a body corporate and politic
created and existing under and by virtue of the New Jersey Highway Authority
Act, as amended.

         Non-Artist Operating Agreements: All Major Operational Agreements other
than Artist Agreements.

         Non-Expanded Amphitheater Season: Any Amphitheater Season which ends
prior to substantial completion of the Renovation Work.

         Offensive NY Amphitheater: Any Fully Restricted Facility which is being
proposed for construction or development in the Restricted NY Area other than
Defensive NY Amphitheaters.

         Operating Budget: The budget of Operating Expenses of the Partnership
to be prepared each year in accordance with and pursuant to the provisions of
Section 12.04 hereof.

         Operating Expenses: The overhead and operating, expenses of the
Partnership which relate to the day-to-day operation of the Amphitheater such as
salaries for employees and staff for the Amphitheater, rent and other payments
due to NJHA or others pursuant to the Lease Agreement, utility costs for the
Amphitheater, insurance costs relating to the maintenance of casualty and
liability insurance for the Amphitheater, interest and required principal
amortization on the Partnership's indebtedness, costs relating to maintenance,
repair and upkeep of the Amphitheater and the personal property and equipment
used in connection with the operation of the Amphitheater and costs for the
purchase of office supplies and equipment. Notwithstanding anything to the
contrary implied by the immediately preceding sentence, none of the following
types of expenditures or expenses shall be "Operating Expenses" for purposes of
this Agreement:

                  (a) the costs directly attributable to or associated with the
         booking, production, presentation or promotion of any performance or
         event at the Amphitheater such as artist costs, advertising costs and
         costs of staging; and

                  (b) costs or expenses which must be incurred as the result of
         any emergency, casualty or other unforeseeable occurrence at the
         Amphitheater.

         Partially Restricted Facility: Any arena, auditorium, building, hall,
stadium or other venue primarily designed for the presentation of live
entertainment events other than Fully Restricted Facilities.

         Partners: Pavilion and Ardee. The term "Partners" shall not include any
assignee of a Partner's Partnership Interest, unless (i) the other Partner
agrees to admit such assignee to the

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Partnership or (ii) such assignee acquired such Partnership Interest in
accordance with, pursuant to and in compliance with the provisions of Sections
18.04 or 18.05 hereof.

         Partnership:  The Partnership created by this Agreement.

         Partnership Act: The Delaware Uniform Partnership Act, Title VI,
Chapter 15 of the Delaware Code (1974 revision), as amended from time to time.

         Partnership Interest: All of the interest of any Partner in the
Partnership, including its (i) right to a distributive share of the profits and
losses of the Partnership, (ii) right to a distributive share of the assets of
the Partnership, and (iii) right to participate in the management of the affairs
of the Partnership.

         Partnership Purposes: The purposes for which the Partnership is formed
as set forth in Section 3.01 of this Agreement.

         Pavilion: Pavilion Partners, a Delaware general partnership whose sole
general partners are SM/PACE, Inc. and Amphitheater Entertainment Partnership.

         Percentage Interest: The respective Partnership Interest of each
Partner in the Partnership expressed as a percentage of the Partnership
Interests owned by all Partners. The Percentage Interest of Pavilion is
sixty-six and two-thirds percent (66-2/3%) and the Percentage Interest of Ardee
is thirty-three and one-third percent (33-1/3%).

         Permitted Rate: The lesser of (a) two percent (2%) per annum over the
Prime Rate or (b) the maximum non-usurious interest rate permitted by applicable
law from time to time in effect.

         Person: Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof, or any other form of entity.

         Prime Rate: The prime rate of interest per annum announced, from time
to time, by major U.S. money center banks as published daily in the "Money
Rates" column of The Wall Street Journal; provided, however, that if The Wall
Street Journal should ever cease, for any reason, to publish such rate on a
daily basis, then the Prime Rate shall be the rate of interest designated, and
in effect from time to time, by Citibank, N.A., in New York, New York as its
prime rate or base rate charged on commercial loans.

         Qualified Liabilities: Shall have the meaning assigned to such term
pursuant to Section 6.01(c) hereof.

         Qualified Operational Shortfall: Shall have the meaning assigned to
such term pursuant to Section 6.01(b) hereof.

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         Qualified Shortfall Notice: Shall have the meaning assigned to such
term pursuant to Section 6.01(a) hereof.

         Renovation Work: Such renovation, rehabilitation, construction and
upgrade activities at the Amphitheater necessary to increase the Arnphitheater's
covered seating capacity to approximately 7,000 and lawn seating capacity to
approximately 10,500 and to otherwise upgrade the Amphitheater's concession
plazas and the Parking Facilities as more fully described on Exhibit "C"
attached hereto.

         Restricted Area: The geographical area encompassed by the Restricted NJ
Area and the Restricted NY Area.

         Restricted NJ Area: The geographical area located in the State of New
Jersey described on Exhibit "A-1" attached hereto.

         Restricted NY Area: The geographical area located in the State of New
York described on Exhibit "A-2" attached hereto. The Partners hereby acknowledge
that Jones Beach Amphitheater is not located in the Restricted NY Area.

         Restricted Facility: Any Partially Restricted Facility or Fully
Restricted Facility.

         Tax Year: The fiscal year of the Partnership for federal income tax
purposes.

         Upfront Advances: All concessionaire grants or advances received or
receivable by the Partnership prior to the first event, performance or
presentation held at the Amphitheater after completion of the Renovation Work.
Any amounts received from a concessionaire which are properly attributable to
operations during any Non-Expanded Amphitheater Season shall not be included as
a part of Upfront Advances but shall instead be included in the Partnership's
income from operations during such Non-Expanded Amphitheater Season.

         Waterloo: The premises located in Stanhope, New Jersey at which live
concerts and other entertainment events are presented from time to time and
which is commonly referred to as "Waterloo Village".


                                   ARTICLE II

                            Name of Business: Offices

         2.01 Partnership Name. The name of the Partnership shall be GSAC
Partners. In addition to the foregoing name, the activities and business of the
Partnership may be conducted in the Managing Partner's discretion, under such
other names as may be designated from time to time by the Managing Partner;
provided, however the Managing Partner may not use, without the prior

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consent of Ardee, any assumed name for the Partnership which includes within it
the name of Ardee, Pavilion, the partners of Pavilion or any of their respective
Affiliates. The Partners shall execute and file such certificates, if any, as
are required by the provisions of any assumed name law or statute in any
jurisdiction in which the Partnership conducts business, as may be required to
reflect the Partnership's operation under such names.

         2.02 Partnership Offices. The principal place of business of the
Partnership shall be at 515 Post Oak Blvd., Suite 300, Houston, Texas 77027. The
Partnership shall also maintain an office at the Amphitheater during the
Amphitheater Season which will be staffed by the employees of the Partnership
who will manage, operate and maintain the Amphitheater.

                                   ARTICLE III

                      Purpose and Power of the Partnership

         3.01 Purposes. The character and purposes of the specific business to
be conducted by the Partnership are (i) to lease, operate, use and maintain the
Amphitheater (including the booking, promotion, production and presentation of
live entertainment events at the Amphitheater), (ii) to perform and fulfill all
obligations and duties of the "Tenant" under the terms and provisions to be
contained in the Lease Agreement and (iii) to take any and all other actions
which may be incidental to or otherwise reasonably related to the foregoing
business and purposes.

         3.02 Powers. The Partnership shall have the power, in fulfilling the
purposes set forth in Section 3.01, to conduct any business or take any action
which is lawful and which is not prohibited by the Partnership Act.

                                   ARTICLE IV

                               Term of Partnership

         The Partnership shall begin on the date first set forth above and shall
continue for a term of twenty-two (22) years from such date unless sooner
dissolved pursuant to Section 17.01 hereof or by operation of law.
Notwithstanding the foregoing, if the term of the Lease Agreement should be
extended, for any reason whatsoever, beyond the twenty-two (22) year term
referred to in the immediately preceding sentence, then the term of the
Partnership shall be automatically extended to expire upon such extended term of
the Lease Agreement.

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                                    ARTICLE V

          Initial Contributions and Contributions for Development Costs

         5.01 Initial Contribution.

                  (a) Upon execution of this Agreement, Pavilion shall convey,
         and does hereby convey, to the Partnership all of its rights, titles
         and interests in, under or created by the Memorandum of Understanding.

                  (b) Upon execution of this Agreement, Ardee shall convey, and
         does hereby convey, or shall cause Delsener Slater Enterprises, Ltd. to
         convey, to the Partnership, all of Delsener Slater Enterprises, Ltd.'s
         rights, titles and interests in, under or created by the Memorandum of
         Understanding.

                  (c) It is hereby specifically agreed by and between the
         Partners that the fair market value of the assets being conveyed to the
         Partnership pursuant to Section 5.01 is equal to $0.00. As a result,
         the initial balance of the Capital Account of Pavilion and Ardee,
         following completion of the initial contribution required pursuant to
         the provisions of this Section 5.01 shall each be $0.00.

         5.02 Development Costs. Except as otherwise provided herein, Pavilion
and Ardee shall be obligated from time to time to contribute to the capital of
the Partnership, in proportion to their respective Percentage Interests, a
sufficient amount of funds to provide to the Partnership enough cash to pay and
discharge all Development Costs as and when payable. In furtherance of the
foregoing, the following provisions shall apply:

                  (a) If the Partnership does not have adequate funds available
         to it to pay any Development Costs when due, then the Managing Partner
         shall deliver a notice ("Development Cost Notice") to the Partners
         specifying the amount of funds needed to pay such Development Costs and
         stating that each Partner is obligated to contribute to the Partnership
         its Percentage Interest of the amount of funds needed to pay such
         Development Costs.

                  (b) Following delivery of a Development Cost Notice to the
         Partners by the Managing Partner, each Partner shall be obligated to
         contribute to the capital of the Partnership, within fifteen (15) days
         following receipt of such Development Cost Notice, its respective
         Percentage Interest of the total amount of Development Costs identified
         in such Development Cost Notice.

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Without the prior consent of both Partners, no construction contract for the
Renovation Work may be executed on behalf of the Partnership which does not
satisfy the criteria specified in clause (g) of the definition of "Major Action"
in Article I hereof.

         5.03 Upfront Advances. The Partnership shall use any and all Upfront
Advances exclusively for the payment of Development Costs. To the extent that
any of the Upfront Advances have not been used to pay Development Costs after
all Development Costs have been fully paid and discharged, then, notwithstanding
the provisions of Article VII hereof, that remaining portion of the Upfront
Advances shall be. distributed to the Partners in proportion to their respective
Percentage Interests.

         5.04 Prior Development Costs.

                  (a) Pavilion hereby represents and warrants to Ardee that
         attached hereto as Exhibit "D- 1" is a true, correct, complete and
         accurate schedule of all Development Costs paid by Pavilion through
         September 30, 1996. Ardee hereby represents and warrants to Pavilion
         that attached hereto as Exhibit "D-2" is a true, correct, complete and
         accurate schedule of all Development Costs which have been paid by
         Ardee through September 30, 1996.

                  (b) All amounts paid for Development Costs prior to the
         execution hereof shall be deemed to have been contributed to the
         capital of the Partnership by the Partner that paid such amounts and
         shall be added to the balance of such Partner's Capital Account.

                  (c) In order that the Partners, contributions for Development
         Costs paid prior to the execution of this Agreement will be in
         proportion to their respective Percentage Interests, the. following
         provisions shall apply:

                           (1) Upon execution hereof, but subject to the
                  provisions of clause (d) of this Section 5.04, Ardee shall
                  contribute to the capital of the Partnership immediately
                  available funds in the amount by which one-half of the
                  Development Costs paid by Pavilion through September 30, 1996
                  (as reflected on Exhibit "D-1 attached hereto) exceeds all of
                  the Development Costs paid by Ardee through September 30, 1996
                  (as reflected on Exhibit "D-2" attached hereto).

                           (2) Upon final determination by the Partners of the
                  amount of Development Costs paid by each between September 30,
                  1996 and the execution of this Agreement ("Pending Costs"),
                  Ardee shall contribute to the capital of the Partnership
                  immediately available funds in the amount by which one-half of
                  Pavilion's Pending Costs exceeds all of Ardee's Pending Costs.

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Amounts contributed to the capital of the Partnership by Ardee pursuant to this
Section 5.04(c) shall be fully utilized by the Partnership to pay and discharge
Development Costs before any Development Cost Notice is provided pursuant to
Section 5.02(a) hereof.

                  (d) Each Partner shall have the right to review the books,
         records, invoices and other supporting documentation relating, to the
         Development Costs paid by the other Partner through September 30, 1996
         for a period of ninety (90) days following the execution of this
         Agreement (such ninety (90) day period being herein called the "Review
         Period"). If, as a result of the review of such books, records,
         invoices and other documentation during, the Review Period, one of the
         Partners disputes the other Partner's determination of the amount of
         Development Costs paid by the other Partner through September 30, 1996,
         then such Partner shall have the right to require that such dispute be
         settled in accordance with the provisions of Article XVI hereof so long
         as notice of such dispute is provided to the other Partner prior to the
         expiration of the Review Period. If the amount of Development Costs
         actually paid by either of the Partners through September 30, 1996
         should be changed as a result of any such dispute, then upon final
         settlement of such dispute, the amount of the capital contribution
         required to be made by Ardee pursuant to Section 5.04(c)(1) hereof
         shall be appropriately increased or decreased with a distribution to,
         or contribution by, Ardee, as necessary. If neither Partner provides
         notice of a dispute pursuant to this Section 504(d) prior to the
         expiration of the Review Period, then such Partner shall be deemed to
         have accepted the amounts specified in Exhibits "D-1" and "D-2"
         attached hereto as the amount of Development Costs paid by each Partner
         through September 30, 1996.

         5.05 Development Cost Draw Requests. Copies of each draw request from
the Partnership's contractor for the Renovation Work, together with all back-up
information and written comments or approvals from the Partnership's architect,
shall be provided to Ardee immediately upon receipt by the Managing Partner.
Ardee shall have the right to review and comment upon each such draw request and
require the Managing Partner to assert or reserve any claims, on behalf of the
Partnership, which Ardee believes are available as a result of its review of any
such draw request and other support documentation. However, none of the
provisions contained in this Section 5.05 shall be read to negate, limit, lessen
or otherwise affect either Partner's obligation to make all capital
contributions otherwise required to be made pursuant to the provisions of this
Article V.

         5.06 Security for Ardee's Development Cost Contribution Obligation. As
security for the performance of its obligations to make contributions to the
Partnership required by the provisions of Section 5.02 of this Agreement, Ardee
does hereby grant to the Partnership a security interest (the "Security
Interest") in the Pledged Account (as hereinafter defined). As used herein, the
term "Pledged Account" shall mean Merrill Lynch Pierce Fenner & Smith
Incorporated Account No. 546-07B79 (formerly Account No. 546-07A11) maintained
in the name of Ardee, as well as the Cash Securities Account and any other
account of Ardee maintained with respect thereto. The following provisions shall
apply with respect to the Security Interest:

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                  (a) Attached hereto as Exhibit "E" is (i) a true, correct and
         complete copy of the most recent Account Statement received by Ardee
         with respect to the Pledged Account and (ii) a letter issued by Merrill
         Lynch confirming the assets held in the Pledged Account as of November
         12, 1996 (such Account Statement and letter being herein collectively
         called the "Merrill Lynch Statement"). The securities listed in the
         Merrill Lynch Statement continue to be held in the Pledged Account as
         of the date hereof and none of such securities have been removed from
         the Pledged Account since November 12, 1996 (except as required to fund
         the payment required to be made to the Partnership pursuant to the
         provisions of Section 5.04(c)(1) hereof). Ardee agrees that, for so
         long as this Agreement shall remain in effect, the Pledged Account will
         contain nothing but cash or obligations backed by the full faith and
         credit of the government of the United States of America.
         Notwithstanding anything to the contrary contained herein, Ardee may
         withdraw from the Pledged Account (i) interest received from time to
         time on account of the assets held in the Pledged Account and (ii) such
         funds as may be required to fund directly to the Partnership capital
         contributions to be made by Ardee pursuant to the provisions of
         Sections 5.02 or 5.04 hereof.

                  (b) Upon execution of this Agreement, Ardee shall (i) execute
         and deliver to the Managing Partner one or more counterparts of a UCC-1
         describing the Pledged Account in a form reasonably acceptable to the
         Managing Partner and (ii) execute and cause Merrill Lynch Pierce Fenner
         & Smith Incorporated to execute and deliver to the Managing Partner a
         Pledged Collateral Account Agreement pertaining to the Pledged Account
         in a form reasonably acceptable to the Managing Partner.

                  (c) Upon full and final satisfaction and discharge of Ardee's
         obligations to make contributions to the Partnership required by the
         provisions of Section 5.02 of this Agreement, the Partnership shall
         release the Security Interest by executing a UCC-3 and simultaneously
         authorizing Merrill Lynch Pierce Fenner & Smith Incorporated to release
         to Ardee, the funds then remaining in the Pledged Account.

                  (d) If Ardee discharges all or any portion of its obligations
         required by the provisions of Section 5.02 of this Agreement by
         applying thereto funds other than those included in the Pledged
         Account, then the Partnership shall release from the Security Interest
         a portion of the amount deposited in the Pledged Account in an amount
         not more than the amount so discharged by Ardee with funds not included
         in the Pledged Account.

                  (e) Notwithstanding the provisions of Section 19.02 hereof or
         any other provision to the contrary herein, THE LAW OF THE STATE OF
         TEXAS SHALL GOVERN AND CONTROL THE CREATION, PERFECTION AND ENFORCEMENT
         OF THE SECURITY INTEREST AND THE OTHER PROVISIONS CONTAINED IN THIS
         SECTION 5.06.

                                       13
<PAGE>

                                   ARTICLE VI

                  Operational Cash Shortfalls and Deficit Loans

         6.01 Operational Shortfalls. Subject to the provisions of Section 6.02
hereof, the following provisions shall apply:

                  (a) If a Qualified Operational Shortfall occurs at any time,
         then the Managing Partner shall deliver a notice ("Qualified Shortfall
         Notice") to the Partners specifying the amount of funds needed to cover
         such Qualified Operational Shortfall and stating, that each Partner is
         obligated to contribute to the capital of the Partnership its
         Percentage Interest of the amount of funds needed to cover such
         Qualified Operational Shortfall. Following delivery of a Qualified
         Shortfall Notice to the Partners by the Managing Partner, each Partner
         shall be obligated to contribute to the capital of the Partnership,
         within fifteen (15) days following receipt of such Qualified Shortfall
         Notice, its respective Percentage Interest of the amount of funds
         needed to cover the Qualified Operational Shortfall as set forth in
         such Qualified Shortfall Notice.

                  (b) As used herein, the term "Qualified Operational Shortfall"
         shall mean the occurrence or happening, at any time, in the Managing
         Partner's reasonable discretion, of the circumstance of the Partnership
         having an insufficient amount of cash to pay or cover the Qualified
         Liabilities (herein defined) of the Partnership as they become due.

                  (c) As used herein, the term "Qualified Liabilities" shall
         mean any and all debts, liabilities, expenses, charges or other
         obligations of the Partnership other than Development Costs. The term
         "Qualified Liabilities" shall include, without limitation, costs
         associated with the engagement of performers at the Amphitheater,
         advertising costs, promotion costs, employee costs and rental
         obligations under the Lease.

         6.02 Deficit Loan for the Non-Expanded Amphitheater Seasons.

                  (a) Obligation During the Non-Expanded Amphitheater Seasons
         Only. Notwithstanding the provisions of Section 6.01 hereof, if a
         Qualified Operational Shortfall occurs at any time during any
         Non-Expanded Amphitheater Season, then Pavilion and Ardee shall each
         extend a loan ("Deficit Loan") to the Partnership in an amount equal to
         fifty percent (50%) of such cash deficit within fifteen (15) days
         following receipt of written notice of the existence of such cash
         deficit from the Managing Partner.

                  (b) Deficit Loan Terms. No distributions shall be made to the
         Partners pursuant to Article VII hereof at any time during which any
         Deficit Loan remains unpaid and outstanding. Each Deficit Loan shall
         bear interest at a variable rate of interest per annum equal to the
         Permitted Rate and shall be repayable as soon as the Partnership has
         funds

                                       14
<PAGE>

         available therefor. Each payment made by the Partnership on the Deficit
         Loans shall be applied and apportioned between the Deficit Loans in
         proportion to the principal balance of each Deficit Loan.

                                   ARTICLE VII

                               Cash Distributions

         7.01 Distribution of Available Cash. Except as provided in Section 7.02
or Section 7.03 hereof, all Available Cash shall be distributed by the
Partnership within 60 days after the end of each Amphitheater Season to the
Partners in proportion to their respective Percentage Interests.

         7.02 Distribution for Non-Expanded Amphitheater Seasons Only.
Notwithstanding the provisions of Section 7.01 hereof, with respect to each
Non-Expanded Amphitheater Season only, cash in an amount equal to the net income
from operations of the Partnership (as determined pursuant to generally accepted
accounting principles) during the Amphitheater Fiscal Year in which such
Non-Expanded Amphitheater Season occurs shall be distributed by the Partnership,
within sixty (60) days after the end of such Non-Expanded Amphitheater Season,
to the Partners, fifty percent (50%) to Pavilion and fifty percent (50%) to
Ardee.

         7.03 Distributions Following Sale of Amphitheater. Following a sale or
other disposition of all or substantially all of the Partnership's interest in
the Amphitheater, no further distributions shall be made pursuant to Sections
7.01 or 7.02 hereof. Instead, all distributions thereafter shall be governed by
the provisions of Section 17.03 hereof.

         7.04 Non-Cash Receipts. All non-cash goods, benefits or services
received in kind by the Partnership as a result of the operation and
exploitation of the Amphitheater shall be Partnership assets to be either (i)
used by the Partnership for valid business purposes consistent with the then
effective Annual Operating Budget or (ii) distributed to the Partners pursuant
to the provisions of this Agreement in the same manner as if such non-cash
goods, benefits or services were cash in an amount equal to their respective
fair market values. The determination of the fair market value of any such
non-cash item shall be made jointly by the Partners prior to the distribution of
such item to the Partners.

                                  ARTICLE VIII

                                 Tax Allocations

         8.01 General Provisions. Except as provided to the contrary elsewhere
in this Article VIII, all of the Partnership's income, gains, losses and
deductions for each Tax Year shall be allocated between the Partners in
accordance with the following provisions:

                                       15
<PAGE>

                  (a) Until each Partner has been allocated an amount of the
         Partnership's income pursuant to this Section 8.01 (a), net of any
         losses or deductions allocated pursuant to this Section 8.01(a), in an
         amount equal to the aggregate cash distributions made to such Partner
         pursuant to Section 7.02 hereof with respect to the Non-Expanded
         Amphitheater Seasons, the Partnership's income, gains, losses and
         deductions shall be allocated fifty percent (50%) to Pavilion and fifty
         percent (50%) to Ardee.

                  (b) All income, gains, losses and deductions of the
         Partnership not allocated pursuant to Section 8.01(a) hereof, shall be
         allocated between the Partners in proportion to their respective
         Percentage Interests.

         8.02 Gain or Loss Upon Sale of the Amphitheater. Notwithstanding the
provisions of Section 8.01 hereof, but subject to the provisions of Section 8.03
of this Agreement, the following provisions shall apply:

                  (a) The gain, if any, recognized by the Partnership upon any
         disposition of all or substantially all of the Partnership's interest
         in the Amphitheater shall be allocated as follows:

                           (1) First, to the Partners whose Capital Accounts
                  have a negative balance, in proportion to and to the extent of
                  such negative balances;

                           (2) Second, to the Partners in the minimum amounts
                  necessary to cause the balances of their respective Capital
                  Accounts to be in the ratios of their respective Percentage
                  Interests; and

                           (3) Any remaining gains shall be allocated between
                  the Partners in proportion to their respective Percentage
                  Interests.

                  (b) The loss, if any, recognized by the Partnership, upon the
         disposition of all or substantially all of its interest in the
         Amphitheater shall be allocated as follows:

                           (1) First, to the Partners in the minimum amounts
                  necessary to cause the balances in their respective Capital
                  Accounts to be in the ratios of their respective Percentage
                  Interests.

                           (2) Second, any remaining amount shall be allocated
                  between the Partners in proportion to their respective
                  Percentage Interests.

                  (c) The allocation of any gain or loss from the disposition of
         all or substantially all of the Partnership's interest in the
         Amphitheater pursuant to this Section 8.02 shall be made after the
         allocations required to be made pursuant to Section 8.01 hereof for the
         Tax Year in which such disposition occurred.

                                       16
<PAGE>

         8.03 Section 704(c) Allocations. Income, gain, loss and deduction with
respect to any item of property contributed to the Partnership shall, solely for
federal income tax purposes, be allocated between the Partners so as to take
into account any difference between the fair market value of such item of
property and its adjusted basis for federal income tax purposes on the date of
such contribution, in accordance with the requirements of Section 704(c) of the
Code. All allocations under this Section 8.03 shall be made in such a manner as
the Managing Partner shall determine reasonably reflects the requirements of
Section 704(c) of the Code. No allocations pursuant to this Section 8.03 shall
be reflected as an adjustment to any Partner's Capital Account.

         8.04 Transferor/Transferee Allocations. If a Partnership Interest is
transferred during any Tax Year, the income, gains, losses and deductions
allocable in respect of that Partnership Interest shall be prorated between the
Transferor and the Transferee on the basis of the number of days in the year
that each was the holder of that Partnership Interest without regard to the
results of the Partnership operations during the period before and after the
transfer, unless either the transferor or the transferee elects to use an
allocation based on the results as of the record date of transfer, to the extent
permitted by the Code, and agrees to reimburse the Partnership for the cost of
making and recording such allocation. A transferee of a Partnership Interest
shall succeed to the Capital Account of the transferor.

         8.05 Capital Accounts. The Partnership shall maintain a capital account
for each Partner, the initial balance of each of which shall be zero. Each
Partner's capital account shall be increased (i) by any income and gains
allocated to that Partner for federal income tax purposes pursuant to Article
VIII hereof, and (ii) by the amount of cash and the fair market value of any
property contributed to the Partnership by that Partner (net of liabilities
secured by such contributed property that the Partnership is considered to
assume or take subject to under Section 752 of the Code). Each Partner's capital
account shall be decreased (i) by any deductions and losses allocated to that
Partner for federal income tax purposes pursuant to Article VIII hereof, and
(ii) by the amount of cash and the fair market, value of any property
distributed by the Partnership to that Partner (net of liabilities secured by
such distributed property that such Partner is considered to assume or take
subject to under Section 752 of the Code). The foregoing provisions and the
other provisions of this Agreement relating to the maintenance of Capital
Accounts are intended to comply with the U.S. Treasury Regulations issued
pursuant to Section 704(b) of the Code, and shall be interpreted and applied in
a manner consistent with such regulations. If a Partner's Capital Account has a
deficit balance following liquidation (as defined in Section
1.704-1(b)(2)(ii)(g) of the U.S. Treasury Regulations promulgated under Section
704 of the Code) of the Partner's interest in the Partnership (after taking into
account all Capital Account adjustments for the Tax Year in which liquidation
occurs), such Partner shall, by the end of such Tax Year (or, if later, within
ninety (90) days after the date of such liquidation), contribute to the
Partnership an amount necessary to increase the balance in its Capital Account
to $0.00.

                                       17
<PAGE>

                                   ARTICLE IX

                        Ownership of Partnership Property

         All real or personal property acquired by the Partnership shall be
owned by the Partnership, such ownership being, subject to the other terms and
provisions of this Agreement. Each Partner hereby expressly waives the right to
require partition of any Partnership property or any part thereof.

                                    ARTICLE X

                              Voluntary Withdrawal

         No Partner shall have the right to, and each Partner agrees that it
will not, withdraw voluntarily from the Partnership. In the event any Partner
withdraws from the Partnership in contravention of this Agreement, such
withdrawing Partner shall be liable to the other Partner for all damages
attributable to its breach of this Agreement. The withdrawal of a Partner in
contravention of this Article X shall not cause the Partnership to be dissolved,
and such withdrawing Partner shall be deemed to be an assignee of a Partner's
Partnership Interest and shall have only the rights provided a Partner's
assignee under the provisions of the Partnership Act.

                                   ARTICLE XI

                                 Fiscal Matters

         11.01 Fiscal Year. The fiscal year of the Partnership for federal
income tax purposes shall end on October 31 of each calendar year or such other
fiscal year as may be required pursuant to the application of the provisions of
the Code or the U.S. Treasury Regulations promulgated thereunder. The fiscal
year of the Partnership for financial accounting purposes shall end on October
31 of each calendar year or such other fiscal year as may be selected by the
Managing Partner from time to time.

         11.02 Books and Records. Proper books and records shall be kept by the
Managing Partner with reference to all Partnership transactions, and each
Partner shall at all reasonable times during business hours have access thereto.
All items of income and deductions recognized during a Tax Year shall be
allocated as of the end of each Tax Year, based on the facts and circumstances
existing as of the end of that year. Interim reports may be based on the facts
and circumstances existing at the time of these reports subject to year-end
adjustments. Monthly reports of operating expenses and income shall be prepared,
or cause to be prepared, by the Managing Partner as of the end of each calendar
month and a copy thereof provided to the Partners within thirty (30) days after
the end of each such calendar month. Year end financial statements shall be
prepared, or caused to be prepared, by the Managing Partner as of the end of
each financial fiscal year of the Partnership and a copy thereof provided to the
Partners within 120 days after the end of each such financial fiscal year.

                                       18
<PAGE>

         11.03 Partnership Bank Accounts. All funds of the Partnership shall be
deposited in its name in an account or accounts maintained at a national or
state bank. Checks shall be drawn upon the Partnership and may be signed by such
persons as may be designated from time to time by the Managing Partner;
provided, however, any single check (other than amounts payable in connection
with the settlement of a show) in an amount greater than $10,000 may not be
signed or issued on behalf of the Partnership by the Managing Partner unless and
until Ardee has provided written approval by facsimile, which approval may not
be unreasonably withheld. In furtherance of the foregoing, the Managing Partner
shall promulgate a one page "check request approval form" for purposes of
describing any check which requires the approval of Ardee which will describe
the payee and the purpose of the check and provide a signature line for an
authorized representative of Ardee to provide approval.

         11.04 Tax Matters and Reports. Any provision hereof to the contrary
notwithstanding, solely for federal income tax purposes, each of the Partners
hereby recognizes that the Partnership will be subject to all provisions of
Subchapter K of Chapter 1 of Subtitle A of the Code; provided, however, the
filing, of U.S. Partnership Returns of Income shall not be construed to extend
the purposes of the Partnership or expand the obligations or liabilities of the
Partners. The Managing Partner shall be the "tax matters partner" for all
purposes related to federal, state and local income tax laws.

         11.05 Tax Returns. The Managing Partner shall cause to be prepared and
filed all tax returns and statements, if any, which must be filed on behalf of
the Partnership with any taxing authority, and shall submit copies of all such
returns and statements to the Partners. All fees, charges and other expenses
payable to third party professionals such as attorneys or accountants relating
to the preparation and filing of tax returns and statements or otherwise
reporting of financial results of the Partnership, shall be properly chargeable
as expenses of the Partnership.

         11.06 Deduction of Expenses. The Partnership shall treat as an expense
for federal income tax purposes all amounts which may be considered as ordinary
and necessary business expenses deductible under applicable rules of the Code
and the regulations promulgated thereunder. Notwithstanding the foregoing, the
Managing Partner may, from time to time, elect on behalf of the Partnership to
capitalize certain expenditures which might otherwise be considered ordinary and
necessary business expenses for federal income tax purposes, and such elections
shall be binding on all Partners.

         11.07 Section 754 Election. In the case of distribution of Partnership
property within the provisions of Section 734 of the Code or in the case of a
transfer of a Partnership interest permitted by this Agreement made within the
provisions of Section 743 of the Code, the Partnership shall file an election
under Section 754 of the Code in accordance with the procedures set forth in the
applicable Treasury Regulation upon the request of any Partner if such
requesting Partner agrees to pay all costs incurred by the Partnership in
connection with the making of such an election.

                                       19
<PAGE>

         11.08 Reimbursement of Expenses. Provided that any such costs and
expenses are within the limits contained in the then effective Operating Budget,
the Partnership shall be obligated to reimburse the Partners and their
respective Affiliates and employees for any and all out-of-pocket costs and
expenses for items such as delivery charges, travel costs, long distance
telephone and fax charges and postage expenses to the extent that such costs and
expenses relate to the business of the Partnership. Notwithstanding the
foregoing, it is specifically understood and acknowledged that nothing contained
in this Section 11.08 shall obligate the Partnership to reimburse any Partner or
any of its Affiliates for any salaries or overhead expenses.


                                   ARTICLE XII

                        Management of Partnership Affairs

         12.01 Major Actions.

         (a) Except as provided in clause (b) of this Section 12.01, no Major
Action may be taken by the Partnership or by any Partner on behalf of the
Partnership without first obtaining prior written approval from both of the
Partners. The terms and conditions to be contained in the Lease Agreement must
also be mutually approved by the Partners.

         (b) Notwithstanding the provisions of clause (a) of this Section 12.01,
capital expenditures paid or incurred to satisfy any legal requirements
(including requirements imposed pursuant to the provisions of the Lease
Agreement) or which may be necessary to cure or correct any health or safety
danger to patrons or employees of the Amphitheater may be authorized by the
Managing Partner without the consent and approval of Ardee.

         12.02 Management Vested in the Managing Partner.

         (a) All responsibility and authority relating to the operations,
business and management of the Partnership, except for the taking of Major
Actions, shall be exclusively vested in the Managing Partner. The Managing
Partner is hereby exclusively authorized to take any and all actions reasonably
necessary or required to carry out the Partnership Purposes, including, without
limitation, the hiring and retaining of such employees and other personnel
(subject to the provisions of clause (c) of this Section 12.02) as may be
reasonably necessary, in the discretion of the Managing Partner, to efficiently
and effectively use, operate and maintain the Amphitheater and otherwise fulfill
the Partnership Purposes. Notwithstanding the foregoing, the Managing Partner
agrees to generally consult with Ardee, and reasonably consider any comments
provided by Ardee, in connection with the management of the business of the
Partnership in a reasonable manner and at reasonable times upon the request of
Ardee.

         (b) The following provisions shall apply with respect to Non-Artist
Operating Agreements:

                                       20
<PAGE>

                  (1) If there are two or more competing offers for any
         Non-Artist Operating Agreement and Pavilion and Ardee cannot mutually
         agree upon which of such offers shall be accepted, then the offer
         ("Most Favorable Offer") containing the most favorable economic and
         financial terms, considered as a whole, to the Partnership shall be
         selected by the Partnership.

                  (2) If Pavilion proposes that the Partnership accept an offer
         for a specific Non-Artist Operating Agreement for which there is not a
         competing, offer and Ardee has not, within thirty (30) days after
         formal written notice of the proposal to accept such offer on behalf of
         the Partnership, either (i) approved such offer for such Non-Artist
         Operating Agreement or (ii) procured a competing offer for such
         Non-Artist Operating Agreement, then Pavilion shall have the authority
         to execute and enter into the originally proposed Non-Artist Operating
         Agreement with no further action or approval from Ardee.

         (c) Notwithstanding the provisions of Section 12.02(a) hereof, it is
understood and agreed that decisions related to the filling of the following
positions shall require approval of both Partners: the general manager, the
marketing, director, the head of security (if any) and the controller; provided,
however, Ardee agrees not to unreasonably withhold its consent to individuals
proposed to be hired in those positions by the Managing Partner.

         (d) Pavilion shall not be entitled to (i) any fee for its services to
be rendered pursuant to this Section 12.02 or (ii) allocate or otherwise charge
to the Partnership any of its general and administrative expenses or other
internal overhead costs.

         12.03 Booking and Promotional Responsibility.

                  (a) Ardee shall be primarily responsible for the activities
         related to (i) booking (or otherwise engaging) talent for appearance at
         the Amphitheater and (ii) advertising, marketing and promoting concerts
         and performances at the Amphitheater.

                  (b) Ardee hereby agrees to provide the necessary time and
         services as may be required to cause (i) the Amphitheater to be
         properly and adequately booked and engaged consistent with past
         practices at the Amphitheater and (ii) each event or performance at the
         Amphitheater to be appropriately advertised, promoted and marketed
         consistent with past practices at the Amphitheater.

                  (c) For purposes of clause (b), it is hereby expressly
         acknowledged and agreed that the phrase "consistent with past
         practices" shall not refer to or mean that (i) the total number of
         performances booked at the Amphitheater will, in all years, be equal to
         or in excess of the number of performances booked in prior years, since
         the total number of performances booked is often subject to the total
         number of performers on tour during any particular Amphitheater Season
         or (ii) the quality of performers booked at the Amphitheater will, in
         all years, be comparable to the quality of performers booked in prior
         years, since the

                                       21
<PAGE>

         quality of performances booked is often subject to the quality of the
         performers on tour during any particular Amphitheater Season.

                  (d) Ardee shall not be entitled to (i) any fees for its
         services to be rendered pursuant to this Section 12.03 or (ii) allocate
         or otherwise charge to the Partnership any of its general and
         administrative expenses or other internal overhead costs.

                  (e) An advertising or marketing budget for each event to be
         presented at the Amphitheater shall be proposed by Ardee and subject to
         the approval of the Managing Partner. Upon adoption of such marketing
         or advertising budget for each such event, Ardee may thereafter
         implement all decisions in connection with the marketing and promotion
         of such event subject to the restrictions contained in the mutually
         approved budget.

                  (f) So long as Ardee, or any Affiliate of Ardee, is involved
         in the booking or promotion of live entertainment events at Jones Beach
         Amphitheater, Ardee hereby covenants and agrees with Pavilion and the
         Partnership as follows:

                           (1) Ardee shall provide oral notice to Pavilion of
                  each offer made to performers for appearance at the Jones
                  Beach Amphitheater promptly following the making of each such
                  offer.
                           (2) Pavilion shall have the right, upon the
                  conclusion of each Amphitheater Season, to review and inspect
                  at Ardee's offices all artist contracts and other related
                  documentation for the performances presented at the Jones
                  Beach Amphitheater during such Amphitheater Season.

         Pavilion covenants and agrees that it will not make use of any of the
         information provided to it by Ardee pursuant to the provisions of this
         Section 12.03(f) in connection with decisions related to the making of
         booking offers at facilities (other than the Amphitheater) which are
         under the control of Pavilion or any of its Affiliates.

         12.04 Annual Operating Budgets. On or before November 30 of each
calendar year during the existence of the Partnership, commencing on November
30, 1996, the Managing Partner shall provide to Ardee (i) a proposed Operating
Budget for the next Amphitheater Fiscal Year setting forth in reasonable detail
the various categories of Operating Expenses and the budgeted amounts for each
such category to be incurred by the Partnership during such Amphitheater Fiscal
Year and (ii) such reasonable information and materials related to the proposed
Operating Budget as may be reasonably requested by Ardee. If a final Operating
Budget for any Amphitheater Fiscal Year is not adopted by mutual agreement
between the Partners within thirty (30) days after submission by the Managing
Partner of a proposed Operating Budget for such Amphitheater Fiscal Year, then,
so long as no such final Operating Budget has been mutually approved, the
Operating Budget for such Amphitheater Fiscal Year shall be deemed to include
all line items as to which unanimous agreement between the Partners has been
reached and, with respect to each other line item, the Operating Budget for such
Amphitheater Fiscal Year shall be deemed to be the greater of (i) the smallest
amount for such line

                                       22
<PAGE>

item approved by the Partners, (ii) the amount for the same line items specified
in the Operating Budget for the immediately preceding Amphitheater Fiscal Year
with such line item increased in the same proportion and amount by which the CPI
Index most recently reported prior to the first day of such Amphitheater Fiscal
Year exceeds the CPI Index most recently reported prior to the first day of the
immediately preceding Amphitheater Fiscal Year or (iii) if such Operating Budget
relates to the first Amphitheater Fiscal Year following the last Non-Expanded
Amphitheater Season, the amount for the same line item specified in the
Operating Budget for the immediately preceding Amphitheater Fiscal Year with
such line item increased in such amount as is necessary to address increased
operational or logistical requirements attributable to the expansion of the
Amphitheater's capacity as a result of the Renovation Work. For purposes hereof,
the Operating Budget for the first Amphitheater Fiscal Year shall be deemed to
be a budget of Operating Expenses containing the actual amount of Operating
Expenses paid and incurred by the Partnership during the first Amphitheater
Fiscal Year.

         12.05 Responsibilities of the Partners. Subject to the other provisions
of this Agreement, the following provisions shall govern the services to be
rendered by each Partner pursuant to the terms of this Agreement:

                  (a) The Managing Partner shall manage, or cause to be managed,
         the affairs of the Partnership in a prudent and businesslike manner.
         The Managing Partner shall act as a fiduciary hereunder and in good
         faith in the performance of its obligations hereunder, but shall have
         no liability or obligation to the Partners or the Partnership for any
         decision made or action taken in connection with the discharge of its
         duties hereunder if such decision or action is (i) not a direct
         violation of, or in excess of the authority granted by, the provisions
         of this Agreement and (ii) made or taken in good faith and in the best
         interests of the Partnership, irrespective of whether the same may be
         reasonably prudent or whether bad judgment or negligence (excluding
         gross negligence) was exercised or involved in connection therewith.

                  (b) Ardee shall fulfill its obligations specified in Section
         12.03 hereof in a prudent and businesslike manner. Ardee shall act as a
         fiduciary hereunder and in good faith in the performance of its
         obligations hereunder, but shall have no liability or obligation to the
         Partners or the Partnership for any decision made or action taken in
         connection with the discharge of its duties hereunder if such decision
         is (i) not a direct violation of, or in excess of the authority granted
         by, the provisions of this Agreement and (ii) made or taken in good
         faith and in the best interests of the Partnership, irrespective of
         whether the same may be reasonably prudent or whether bad judgment or
         negligence (excluding gross negligence) was exercised or involved in
         connection therewith.

         12.06 Indemnification. Each Partner and all of such Partner's partners,
agents, employees, officers, directors, shareholders and other representatives
shall be indemnified and held harmless by the Partnership, to the extent of the
assets of the Partnership, from and against any and all claims, demands,
liabilities, costs (including, without limitation, the cost of litigation and
reasonable

                                       23
<PAGE>

attorneys' fees), damages and causes of action of any nature whatsoever arising
out of a claim asserted by any third party and relating to the management of the
affairs of the Partnership, except where the claim at issue is based upon (i)
the proven gross negligence or willful misconduct of the indemnified party or
(ii) an action taken by the indemnified party in direct violation of, or in
excess of the authority granted by, the provisions of this Agreement. The
indemnification rights herein contained shall be cumulative of, and in addition
to, any and all rights, remedies and recourses to which the indemnified parties
described herein shall be entitled, whether pursuant to some other provision of
this Agreement, at law or in equity.

         12.07 Artist Agreements. Subject to the right of a Partner to require
that competitive bids be made on behalf of the Partnership for the booking of
certain live concerts at the Amphitheater in accordance with, and pursuant to,
the provisions of Section 13.02(b)(2)(B)(ii)(y) hereof or Section
13.02(d)(3)(ii) hereof, the entering into of any Artist Agreement, as with other
Major Actions, shall be subject to the unanimous approval of the Partners. If
either Partner refuses to approve the engagement of a particular performer or
show at the Amphitheater on behalf of the Partnership which the other Partner
("Promoting Partner") desires to engage for performance at the Amphitheater,
then the Promoting Partner shall have the light, subject to availability of the
Amphitheater, to rent the Amphitheater from the Partnership on a Cost Only Basis
(herein defined) for purposes of presenting such performer or show for its own
account. As used herein, the term "Cost Only Basis" shall mean, with respect to
any concert or event, the right to rent the Amphitheater from the Partnership
(subject to the Partnership's right to operate, through its concessionaires, all
concession operations at the Amphitheater) in exchange for reimbursing to the
Partnership (i) all of the Partnership's night of show expenses and (ii) the
portion of the Partnership's annual overhead costs which are appropriately
allocable to such concert or event (including rental obligations to NJHA,
insurance costs, utility costs and house staff costs).

         12.08 Action Without Meeting. Any action required by the Partnership
Act or by this Agreement to be taken at a meeting of the Partners, or any action
which may be taken at a meeting of the Partners, may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all of the Partners entitled to participate in the management of the Partnership
pursuant to the terms of the Partnership Act and such consent shall have the
same force and effect as a vote of the Partners.

         12.09 Transactions with Partners and Affiliates of Partners. Except as
may be expressly contemplated or permitted by the provisions of this Agreement,
the Partnership shall not enter into any contracts, agreements or other business
relationships with either of the Partners or any of the Affiliates of either of
the Partners unless and except (i) all of the terms, provisions and conditions
of such contract, agreement or business arrangement have been fully described
and revealed to the other Partner and (ii) the other Partner has expressly
consented in writing to such contract, agreement or other business relationship.
To the extent that either of the Partners or any of the Affiliates of either of
the Partners should hereafter enter into any contract, agreement or other
business arrangement with the Partnership which satisfies the provisions of the
immediately preceding sentence, all rights accruing to such Partner or such
Affiliate under such contract, agreement or other

                                       24
<PAGE>

business arrangement shall be the sole and exclusive property of such
contracting party and neither the Partnership nor the other Partner or its
Affiliates shall have any participation rights therein or thereto.

         12.10 Loaned Employees. Notwithstanding the provisions of Section 12.09
hereof, but subject to the provisions hereof relating to the Partnership's
Operating Budget, the Managing Partner shall have the express right and
authority to fill the staffing needs of the Partnership by causing employees of
(i) the Managing Partner, (ii) the partners of the Managing Partner, (iii)
Affiliates of the partners of the Managing Partner, (iv) Ardee or (v) Affiliates
of Ardee to provide services to the Partnership on a full- or part-time basis.
Each such employee who is so loaned to the Partnership shall have all or such
appropriate portion of his or her salary and benefit costs reimbursed by the
Partnership to the actual employer of such employee. The Managing Partner shall
include in the proposed Operating Budget submitted pursuant to the provisions of
Section 12.04 hereof for each Amphitheater Fiscal Year a list identifying each
employee that is then being loan to the Partnership pursuant to the provisions
of this Section 12.10 and the details as to the portion of his or her salary and
benefit costs being reimbursed by the Partnership to the actual employer of such
employee.

         12.11 Employee/Travel Related Development Costs. To the extent that any
Development Costs consist of (i) the wages, benefits or other related costs of
an employee of either Partner (or the Affiliate of either Partner) performing
duties related to the designing, planning or construction of the Renovation Work
or (ii) the travel and lodging expenses of any such employee incurred in
connection with the designing, planning or construction of the Renovation Work,
it is expressly stipulated, agreed and acknowledged that only that portion of
such wages, benefits, costs and expenses which are appropriately and properly
allocable to the planning, designing and construction of the Renovation Work
shall be included as Development Costs for purposes of this Agreement.

         12.12 Special Provisions for Termination of Lease for Excess Artist
Share. Reference is made to the fact that it is currently anticipated that the
Lease will contain provisions creating in favor of the Partnership a right
("Economic Termination Option") to terminate the Lease in the event that (i)
artist costs at the Amphitheater exceed a specified percentage of gross ticket
revenues at the Amphitheater and (ii) the Partnership and NJHA are unable to
mutually agree to modifications to the rental obligations under the Lease. The
following provisions shall apply with respect to the Economic Termination
Option:

                  (A) Within forty-five (45) days following the conclusion of
         each Applicable Time Period (herein defined), the Managing Partner
         shall provide to Ardee the Managing Partner's calculation of the Artist
         Share (as such term is defined in the Lease Agreement) for such
         Applicable Time Period. As used herein, the term "Applicable Time
         Period" shall mean any one or more relevant periods of time during
         which the Artist Share is to be measured pursuant to the provisions of
         the Lease for purposes of determining whether the Economic Termination
         Option is available for exercise by the Partnership.

                                       25
<PAGE>

                  (B) If one of the Partners ("Terminating Partner") should
         desire to exercise the Economic Termination Option at a time when it is
         available for exercise, such Partner must provide written notice
         thereof at least thirty (30) days prior to the deadline for the
         exercise of the Economic Termination Option. If, at any time after
         delivery of a notice pursuant to the provisions of the immediately
         preceding sentence by a Terminating Partner, NJHA and the Partnership
         should mutually agree to modifications to the rental obligations under
         the Lease to the satisfaction of both Partners, then such notice shall
         automatically, and with no further action required by any party, be
         revoked and of no further force or effect.

                  (C) If the other Partner ("Non-Termination Partner") does not
         wish to terminate the Lease pursuant to the Economic Termination
         Option, then the Non-Terminating, Partner must provide written notice
         thereof to the Terminating Partner and agree to purchase the
         Terminating Partner's interest in the Partnership for an amount equal
         to (i) the Terminating Partner's Percentage Interest multiplied by (ii)
         the Partnership's then unamortized Development Costs (with the express
         understanding that the Partnership's Development Costs shall be
         amortized for these purposes on a straight-line basis over 240 months
         commencing on the first public performance at the Facility following
         completion of the Renovation Work).

                  (D) If the Non-Terminating Partner fails to provide notice of
         its decision to purchase the Terminating Partner's interest in the
         Partnership on or before the date which is ten (10) days before the
         deadline to exercise the Economic Termination Option, then the Managing
         Partner shall be obligated to exercise, on behalf of the Partnership,
         the Economic Termination Option in a timely manner.


                                  ARTICLE XIII

                                Other Activities

         13.01 Generally. Subject to the provisions of Section 13.02 hereof,
this Agreement shall not preclude or limit in any respect the right of any
Partner to engage or invest in any business activity of any nature or
description, including, those which may be similar to the business of the
Partnership. Neither the Partnership nor any Partner shall have any right by
virtue of this Agreement or any relationships created hereby in or to such other
ventures or activities or to the income or proceeds derived therefrom.

         13.02 Restrictions on Competition. Notwithstanding any of the other
provisions contained in this Agreement, the Partners hereby agree, stipulate and
acknowledge as follows:

                  (a) Fully Restricted Facilities in the Restricted NJ Area.
         Subject to the specific exceptions contained in this Section 13.02, the
         relationship created by this Agreement shall be an exclusive
         arrangement between the Partners (and their Affiliates) for the
         booking,

                                       26
<PAGE>

         production, presentation and promotion of live concerts featuring
         musical or comedic entertainers at Fully Restricted Facilities in the
         Restricted NJ Area. Accordingly, each Partner hereby covenants and
         agrees with the Partnership that neither it nor any of its Affiliates
         shall, directly or indirectly, become engaged or involved in any manner
         whatsoever with respect to the booking, production, presentation or
         promotion of any live musical or comedic concert (other than concerts
         presented at the Amphitheater) to be presented at a Fully Restricted
         Facility in the Restricted NJ Area.

                  (b) Limited Exception for Waterloo. Notwithstanding the
         provisions of clause (a) of this Section 13.02, each Partner (and its
         respective Affiliates) shall have a limited right to book, present,
         promote and produce live concerts featuring musical or comedic
         entertainers at Waterloo which satisfy any one or more of the following
         conditions:

                           (1) an identical live concert featuring the same
                  musical or comedic entertainers will also be presented at the
                  Amphitheater during, the same Amphitheater Season;

                           (2) such live concert (A) cannot be booked for
                  presentation at the Amphitheater, despite the best efforts of
                  such Partner to so book such live concert at the Amphitheater,
                  because the featured musical or comedic entertainers are not
                  willing to perform at the Amphitheater and (B) such Partner
                  shall have (i) provided notice to the other Partner that,
                  notwithstanding the exercise of its best efforts to the
                  contrary, such Partner has been unable to book such live
                  concert for appearance at the Amphitheater and that such
                  Partner (or its Affiliate) intends to attempt to book such
                  live concert at Waterloo and (ii) agreed to (x) notify the
                  other Partner of the terms of any offer made for the booking
                  of such live concert at Waterloo simultaneously with the
                  making of such offer and (y) make competitive bids on behalf
                  of the Partnership for the booking, of such live concert at
                  the Amphitheater as may be directed by the other Partner; or

                           (3) such live concert cannot be booked for
                  presentation at the Amphitheater, despite the best efforts of
                  such Partner to so book such live concert at the Amphitheater,
                  because there is no available date on the Amphitheater's
                  calendar which reasonably coincides with the touring schedule
                  of the musical or comedic entertainers featured in such live
                  concert.

If either Partner (or any of its Affiliates) intends to book, present, promote
or produce any live concert at Waterloo pursuant to the provisions of this
Section 13.02(b), then such Partner shall be required, as a condition precedent
to the rights created in this Section 13.02, to provide written notice thereof
to the other Partner with a specific description of the concert involved and the
reasons for the provisions of Section 13.02(b) apply to such concert. If
Waterloo should, at any time during the term of this Partnership, be
significantly, materially or substantially improved or upgraded in any manner
which would cause Waterloo to be a facility more comparable to the Amphitheater,
then

                                       27
<PAGE>

either Partner may, by written notice to the other, terminate the provisions
contained in this Section 13.02(b).

                  (c) Limited Exception for Downing Stadium. Notwithstanding the
         provisions of clause (d) of this Section 13.02, each Partner (and its
         respective Affiliates) shall have a limited right to book, present,
         promote and produce live concerts featuring, musical or comedic
         entertainers at Downing Stadium without being required to comply with
         the requirements set forth in clauses (1) through (3) of Section
         13.02(d) hereof. If Downing Stadium should, at any time during the term
         of this Partnership, be significantly, substantially or materially
         improved or upgraded in any manner, then either partner may, by written
         notice to the other, terminate the provisions contained in this Section
         13.02(c).

                  (d) Partially Restricted Facilities in the Restricted NJ Area
         and Fully Restricted Facilities in the Restricted NY Area. Each Partner
         hereby covenants and agrees with the Partnership that neither it nor
         any of its Affiliates shall, directly or indirectly, become engaged or
         involved in any manner whatsoever with respect to the booking,
         production, presentation or promotion of any live musical or comedic
         concert (other than Club Shows) to be presented during any Amphitheater
         Season in a Partially Restricted Facility in the Restricted NJ Area or
         in a Fully Restricted Facility in the Restricted NY Area unless and
         except such Partner has first complied with all of the following
         requirements:

                           (1) such Partner shall have exercised its best
                  efforts to book such live concert for presentation at the
                  Amphitheater,

                           (2) such Partner shall have provided notice to the
                  other Partner that, notwithstanding the exercise of its best
                  efforts to the contrary, such Partner has been unable to book
                  such live concert for appearance at the Amphitheater and that
                  such Partner (or its Affiliate) intends to attempt to book
                  such live concert at a Partially Restricted Facility in the
                  Restricted NJ Area or at a Fully Restricted Facility in the
                  Restricted NY Area; and

                           (3) such Partner shall have agreed to (i) notify the
                  other Partner of the terms of any offer made for the booking
                  of such live concert at any Partially Restricted Facility in
                  the Restricted NJ Area or at any Fully Restricted Facility in
                  the Restricted NY Area simultaneously with the making, of such
                  offer and (ii) make competitive bids on behalf of the
                  Partnership for the booking of such live concert at the
                  Amphitheater as may be directed by the other Partner.

                  (e) Venue Ownership in New Jersey. The relationship created by
         this Agreement shall be an exclusive arrangement between the Partners
         (and their Affiliates) for the ownership and management of Restricted
         Facilities in the NJ Area. Accordingly, each of the Partners (and all
         of their respective Affiliates) shall be precluded from being involved
         and

                                       28
<PAGE>

         hereby covenants not to become involved in any manner whatsoever,
         directly or indirectly, in the ownership or management of any
         Restricted Facility in the Restricted NJ Area.

                  (f) Venue Ownership in New York. Each Partner hereby covenants
         and agrees with the Partnership as follows:

                           (1) Neither Partner (nor its Affiliates) shall become
                  involved in any manner whatsoever, directly or indirectly, in
                  the ownership or management of any Defensive NY Amphitheater
                  unless (i) such ownership or management interest is owned
                  through a partnership with the other Partner on mutually
                  agreeable terms or (ii) the other Partner has elected to
                  refrain from participating in the ownership or management of
                  such Defensive NY Amphitheater.

                           (2) Neither Partner (nor its Affiliates) shall become
                  involved in any manner whatsoever, directly or indirectly, in
                  the ownership or management of any Offensive NY Amphitheater
                  unless (A) such Partner (or its Affiliate) shall have complied
                  with the provisions of Section 13.04 hereof with respect to
                  such Partner's (or its Affiliate's) interest in such Offensive
                  NY Amphitheater and (B) either (i) the other Partner
                  voluntarily agrees that such Offensive NY Amphitheater will
                  not have a negative impact on the profitability of the
                  operation and ownership of the Amphitheater or (ii) an
                  arbitration proceeding conducted in accordance with the
                  provisions of Section 13.02(g) hereof results in a final
                  decision that such Offensive NY Amphitheater will not have a
                  negative impact on the profitability of the ownership and
                  operation of the Amphitheater.

If either Partner or any of its Affiliates shall acquire any ownership or
management interest with respect to a Defensive NY Amphitheater or an Offensive
NY Amphitheater pursuant to the foregoing provisions, then, so long as such
Partner (or its Affiliate) continues to be involved in the ownership or
management thereof, the restrictions contained in Section 13.02(a) hereof shall
not apply with respect to such Defensive NY Amphitheater or Offensive NY
Amphitheater, as applicable.

                  (g) Arbitration Proceeding for an Offensive NY Amphitheater.
         If either Partner (or any of its Affiliates) proposes to become
         involved in the ownership or management of any Offensive NY
         Amphitheater, then such Partner shall have the right to commence an
         arbitration proceeding pursuant to the provisions of this Section
         13.02(g) for the sole purpose of determining whether such Offensive NY
         Amphitheater will have a negative impact on the profitability of the
         ownership and operation of the Amphitheater. The following provisions
         shall govern the commencement and conduct of any such arbitration
         proceeding:

                           (1) The Partner ("Requesting Partner") initiating
                  such arbitration proceeding shall provide written notice
                  ("Notice Request") to the other Partner of the Requesting
                  Partner's desire to commence such arbitration proceeding. The
                  Notice Request shall include a description of the location,
                  seating capacity (both fixed and

                                       29
<PAGE>

                  lawn) and general design of the proposed Offensive NY
                  Amphitheater which will be the subject of such arbitration
                  proceeding.

                           (2) If the parties are unable to mutually select and
                  designate a person to serve as the arbitrator in such
                  arbitration proceeding within thirty (30) days after delivery
                  of the Request Notice, then the American Arbitration
                  Association will select the person who will serve as the
                  arbitrator. If possible, the arbitrator will be a person
                  involved in the live entertainment business, either as a
                  promoter or facility operator.

                           (3) Once the arbitrator has been selected, each
                  Partner shall have forty-five (45) days to prepare and present
                  to the arbitrator and the other Partner a written statement
                  ("Position Paper") supporting, its position as to whether or
                  not the Offensive NY Amphitheater in question will have a
                  negative impact on the profitability of the ownership and
                  operation of the Amphitheater. In addition, each Partner shall
                  have fifteen (15) days following receipt of the other
                  Partner's Position Paper to prepare and present to the
                  arbitrator and the other Partner a written statement
                  ("Response Paper") responding to the other Partner's Position
                  Paper.

                           (4) As soon as reasonably practicable following the
                  deadline for the provision of each Partner's Position Paper
                  and Response Paper, the arbitrator will arrange for a meeting
                  ("Final Hearing") with both Partners at which each Partner
                  will be given the opportunity to present an oral presentation
                  in the presence of the other Partner and the arbitrator in
                  support of its position. The arbitrator will set the rules for
                  the conducting of the Final Hearing.

                           (5) Within fifteen (15) days of the Final Hearing,
                  the arbitrator will provide notice to each Partner of his
                  determination as to whether the Offensive NY Amphitheater in
                  question will have a negative impact on the profitability of
                  the ownership and operation of the Amphitheater. The
                  determination of the arbitrator will be final and binding on
                  both parties for all purposes hereof.

                           (6) For all purposes of this Section 13.02, an
                  Offensive NY Amphitheater will only be deemed to "have a
                  negative impact on the profitability of the ownership and
                  operation of the Amphitheater" if the construction,
                  development and subsequent use and operation of such Offensive
                  NY Amphitheater is more likely than not to result in, all else
                  being equal, a seven and one-half percent (7-1/2%) or more
                  reduction in the gross revenues derived by the Partnership
                  from the use and operation of the Amphitheater.

                           (7) The Partners acknowledge that the mere
                  designation and creation of the Restricted NY Area in this
                  Agreement shall not constitute an admission by either Partner
                  that the construction of a Fully Restricted Facility in the
                  Restricted NY Area

                                       30
<PAGE>

                  will automatically result in a negative impact on the
                  profitability of the ownership and operation of the
                  Amphitheater.

                  (h) Effect of Affiliate Violation. If an Affiliate of either
         Partner should engage in any activity prohibited by, or otherwise
         violate the restrictions contained in, this Section 13.02, then, as
         between the Partners, such Partner shall be deemed to have violated the
         provisions of this Section 13.02.

                  (i) Covenant as to Use of Certain Information. Each Partner
         covenants and agrees with the other that it will not make use of any of
         the Applicable Booking Information in connection with decisions related
         to the making, of booking offers at facilities (other than the
         Amphitheater) in which such Partner or any of the Affiliates of such
         Partner have any financial or ownership interest. As used in the
         immediately preceding sentence, the term "Applicable Booking
         Information" shall mean information provided by one Partner to the
         other Partner concerning the terms of any offer made for the booking of
         a live concert at a facility other than the Amphitheater pursuant to
         the provisions contained in Section 13.02(b)(2)(B)(ii)(x) hereof or
         Section 13.02(d)(3)(i) hereof.

         13.03 Remedies and Enforceability. If the provisions of Section 13.02
should be held to be unenforceable because of the scope, duration or area of its
applicability, the tribunal making such determination shall have the power to
modify such scope, duration or area or all of them, and such provisions shall
then be applicable in such modified form. Since a violation of the provisions of
Section 13.02 will result in irreparable harm, the non-defaulting party shall be
entitled to an injunction restraining the commission or continuation of any
violation of the provisions of Section 13.02 or any other appropriate decree of
specific performance. Such remedies shall not be exclusive and shall be in
addition to any other remedy expressly provided for under the terms of this
Agreement or permitted at law or in equity.

         13.04 Terms of Offer. If either Partner (or any of its Affiliates)
("Developing Partner") desires to become involved in any manner whatsoever,
directly or indirectly, in the ownership or management of any Offensive NY
Amphitheater, then the Developing Partner shall extend an offer to the Other
Partner ("Passive Partner") to acquire one-third (1/3rd) of the Developing
Partner's interest in such Offensive NY Amphitheater in accordance with the
following terms, provisions and requirements:

                  (a) The Developing Partner shall provide prompt written notice
         to the Passive Partner upon the commencement of negotiation concerning
         the Developing Partner's involvement in any proposed Offensive NY
         Amphitheater.

                                       31
<PAGE>

                  (b) Upon request of the Passive Partner at any time following
         the notice given pursuant to clause (a), the Developing Partner shall
         provide an oral report as to the current status of the proposed
         development of such Offensive NY Amphitheater.

                  (c) The Developing Partner shall provide to the Passive
         Partner copies of all written drafts, letters, budgets or other
         documentation pertaining to the development of such proposed Offensive
         NY Amphitheater.

                  (d) Within five (5) days following, the execution of a binding
         agreement ("Development Agreement") pursuant to which the Developing
         Partner agrees to become involved in any manner whatsoever, directly or
         indirectly, in the ownership or management of such proposed Offensive
         NY Amphitheater, the Developing Partner shall provide a true, correct,
         complete and accurate copy thereof to the Passive Partner.

                  (e) Following, receipt of such Development Agreement, the
         Passive Partner shall have the right and option ("Qualified Option"),
         exercisable in its sole discretion, to acquire one-third of the
         Developing Partner's interest in and to such proposed Offensive NY
         Amphitheater under and pursuant to the terms of the Development
         Agreement in exchange for the payment by the Passive Partner to the
         Developing Partner of one-third of its costs incurred to date, and the
         assumption of one-third of the Developing Partner's ongoing financial
         obligations, in connection with such proposed Offensive NY
         Amphitheater.

                  (f) The Qualified Option may be exercised by the Passive
         Partner at any time within thirty (30) days after receipt of such
         Development Agreement by providing written notice thereof to the
         Developing, Partner.

                  (g) If, at any time after delivery of such Development
         Agreement to the Passive Partner, whether before or after the deadline
         for the Passive Partner's decision to exercise the Qualified Option,
         (i) any of the terms or provisions contained in the Development
         Agreement should be modified or (ii) the design, size or scope of such
         proposed Offensive NY Amphitheater should be materially, significantly
         or substantially modified, then the Developing Partner shall provide
         prompt written notice of such modification to the Passive Partner, and
         the Qualified Option shall be extended until the date which is thirty
         (30) days after the provision of such notice.

         13.05 Modification of Affiliate Definition. For all purposes of this
Agreement, the following provisions shall supplement and amend the definition of
the term "Affiliate":

                  (a) Irrespective of whether Ron Delsener owns any capital
         stock of Ardee, Ron Delsener shall be deemed to be an Affiliate of
         Ardee for all purposes hereof until the date which is five (5) years
         after completion of a transfer by sale of a controlling ownership
         interest in Ardee to a third party purchaser that is not related to or
         affiliated with Ron Delsener or Mitch Slater or, if later, the date on
         which Ron Delsener's employment with

                                       32
<PAGE>

         Ardee and all of its Affiliates is terminated. Notwithstanding the
         foregoing, for purposes of Section 12.03(f) only, Ron Delsener shall
         not be deemed to be an Affiliate of Ardee at any time after the
         completion of a transfer by sale of a controlling, ownership interest
         in Ardee to a third party purchaser that is not related to or
         affiliated with Ron Delsener or Mitch Slater or, if later, the date on
         which Ron Delsener's employment with Ardee and all of its Affiliates is
         terminated.

                  (b) At all times during the term of this Partnership, Brian
         Becker shall be an Affiliate of Pavilion. The provisions of this clause
         (b) shall apply irrespective of whether Brian Becker controls Pavilion.

                  (c) Irrespective of whether Mitch Slater owns any capital
         stock of Ardee, Mitch Slater shall be deemed to be an Affiliate of
         Ardee for all purposes hereof until the date which is five (5) years
         after completion of a transfer by sale of a controlling ownership
         interest in Ardee to a third party purchaser that is not related to or
         affiliated with Ron Delsener or Mitch Slater or, if later, the date on
         which Mitch Slater's employment with Ardee and all of its Affiliates is
         terminated. Notwithstanding the foregoing, for purposes of Section
         12.03(f) only, Mitch Slater shall not be deemed to be an Affiliate of
         Ardee at any time after the date on which Mitch Slater's employment
         with Ardee and all of its Affiliates is terminated.

                  (d) Irrespective of whether Louis Messina owns any capital
         stock of PACE Entertainment Corporation ("PACE"), Louis Messina shall
         be deemed to be an Affiliate of Pavilion for all purposes hereof until
         the date which is three (3) years after the date on which Louis
         Messina's employment with PACE and all of its Affiliates is terminated.

                                   ARTICLE XIV

                           [Intentionally Left Blank]

                                   ARTICLE XV

                              Defaults and Remedies

         15.01 Default by Partner. If any Partner ("Defaulting Partner") fails
to timely perform any of its obligations contained in this Agreement, or
materially violates the terms of this Agreement, then the other Partner
("Non-Defaulting Partner") shall have the right to give the Defaulting Partner a
notice ("Default Notice") specifically setting forth the nature of such failure
or violation and stating that the Defaulting Partner shall have a period of ten
(10) days to pay any sums of money specified therein as due and owing, to the
Partnership or to any Partner or, if the failure or violation is a non-monetary
default and is capable of being cured, thirty (30) days to cure such default
specified therein. If the monies specified in the Default Notice are not paid
within such ten (10) day period, or if such non-monetary failures or violations
are not capable of being cured or, if capable of being cured, such Defaulting
Partner has not cured such non-monetary failures or violations within such

                                       33
<PAGE>

thirty (30) day period (if such non-monetary default is not capable of being
cured within thirty (30) days and if efforts to cure such non-monetary default
have commenced and are continuing, then within a ninety (90) day period), then a
"Partner Default" shall be deemed to have occurred with respect to such
Defaulting Partner. If a Defaulting Partner cures in all material respects all
of its failures or violations which are capable of being cured within the
aforesaid notice and cure periods, then such defaults shall be deemed no longer
to exist and such Partner shall be deemed no longer to constitute a Defaulting
Partner.

         15.02 Rights and Remedies. Upon the occurrence of a Partner Default,
the Non-Defaulting Partner and the Partnership shall each have the following
rights, options and remedies which shall be cumulative and may be exercised
concurrently or independently in the sole and absolute discretion of the
Non-Defaulting Partner:

                  (a) The right to bring an action at law by or on behalf of the
         Partnership or the Non-Defaulting Partner in order to recover the
         amounts owed, if any, and any incidental or consequential damages
         arising from such default (including, without limitation, reasonable
         attorneys' fees and disbursements incurred by the Partnership or the
         Non-Defaulting Partner, as the case may be, in prosecuting any such
         action).

                  (b) The right to bring any proceeding in the nature of
         injunction, specific performance or other equitable remedy, it being
         acknowledged by each of the Partners that damages at law may be an
         inadequate remedy for such default.

                  (c) If a sum of money is owed to the Partnership, the
         Non-Defaulting, Partner may advance the sum of money owed to the
         Partnership by the Defaulting Partner with the following results:

                           (i) The sum thus advanced shall be deemed to be a
                  loan from the Non- Defaulting Partner to the Defaulting
                  Partner;

                           (ii) The principal balance of such deemed loan shall
                  be due and payable in whole upon written demand from the
                  Non-Defaulting Partner to the Defaulting Partner;

                           (iii) The principal balance of such deemed loan shall
                  bear interest at the Permitted Rate compounded monthly; and

                           (iv) All distributions from the Partnership that
                  would otherwise be made to the Defaulting, Partner (whether
                  before or after dissolution of the Partnership) shall,
                  instead, be paid to the Non-Defaulting, Partner until such
                  loan and all interest accrued thereon has been repaid in full.

                  (d) If a sum of money is owed to the Non-Defaulting Partner,
         the Non-Defaulting Partner may require that all distributions that
         would otherwise be made to the Defaulting

                                       34
<PAGE>

         Partner (whether before or after dissolution of the Partnership) shall,
         instead, be paid to the Non-Defaulting, Partner until all such amounts
         owed have been repaid in full.

                  (e) If a Partner Default should occur with respect to Pavilion
         by reason of a failure to perform or fulfill any monetary obligation
         created pursuant to the terms of this Agreement, and if Ardee has
         advanced the sum of money necessary to cure such failure, then Ardee,
         as the Non-Defaulting Partner, shall have the express right and
         authority, by notice to Pavilion, to remove Pavilion as the Managing
         Partner and substitute Ardee as the Managing Partner for all purposes
         under this Agreement in consideration for a reasonable fee to be
         thereafter paid by the Partnership.

                  (f) If a Partner Default should occur with respect to Ardee,
         then Pavilion shall have the right, as the Non-Defaulting, Partner, by
         notice to Ardee, to (i) terminate Ardee as the party primarily
         responsible for booking or otherwise engaging talent for appearance at
         the Amphitheater as specified in Section 12.03 hereof and (ii) either
         (A) assume the responsibility for the activities related to booking or
         otherwise engaging talent for appearance at the Amphitheater in
         consideration for a reasonable fee to be thereafter paid by the
         Partnership or (B) engage a third party to perform and fulfill the
         responsibility related to booking or otherwise engaging talent for
         appearance at the Amphitheater upon terms reasonably acceptable to
         Pavilion.


                                   ARTICLE XVI

                     Dispute Resolution and Confidentiality

         16.01 Generally. Except for disagreements involving, the taking of a
proposed Major Operational Action, which shall be governed by the provisions of
Section 12.07 hereof, in the event of any dispute, difference or question
("Dispute") between any of the Partners or assignees of the Partners or the
Partnership ("Disputing Parties"), which cannot be otherwise informally resolved
by the Disputing Parties themselves, the Disputing Parties will utilize the
procedures specified in this Article XVI (the "Procedure") to resolve the
Dispute. The Disputing Party seeking to initiate the Procedure (the "Initiating
Party") shall give written notice to the other Partners, assignees of the
Partners and the Partnership, describing, in general terms the nature of the
Dispute, the Initiating Party's claim for relief and identifying one or more
individuals with authority to settle the Dispute on such Party's behalf. The
Disputing Parties receiving such notice (the "Responding Party", whether one or
more) shall have ten (10) business days within which to designate by written
notice to the Initiating Party, one or more individuals with authority to settle
the Dispute on such Party's behalf The individuals so designated shall be known
as the "Authorized Individuals."

         16.02 Negotiations. The Authorized Individuals shall be entitled to
make such investigation of the Dispute as they deem appropriate, but agree to
promptly, and in no event later than thirty (30) days from the date of the
Initiating Party's written notice, meet to discuss resolution of the Dispute.

                                       35
<PAGE>

The Authorized Individuals shall meet at such times and places and with such
frequency as they may agree. The Disputing Parties agree to participate in good
faith in the direct negotiations to resolve the Dispute. If the Dispute has not
been resolved within thirty (30) days from the date of their initial meeting,
the Disputing Parties shall cease direct negotiations and shall submit the
Dispute to arbitration in accordance with the following procedure.

         16.03 Arbitration. All Disputes will be settled by arbitration by an
arbitrator mutually acceptable to the Disputing Parties in an arbitration
proceeding conducted in (i) Houston, Texas (if Ardee is the Initiating Party) or
(ii) in New York, New York (if Pavilion is the Initiating Party), in accordance
with the rules as then in effect of the American Arbitration Association. If the
Disputing, Parties hereto cannot agree on an arbitrator within ten (10) business
days of the initiation of the arbitration proceeding, an arbitrator shall be
selected for the Disputing Parties by the American Arbitration Association. The
decision of such arbitrator shall be final (except that errors of law shall be
subject to appeal) , and judgment upon the award rendered by the arbitration may
be entered in any court having jurisdiction thereof. The costs (including,
without limitation, reasonable fees and expenses of counsel and experts for the
Disputing Parties) of such arbitration (including the costs to enforce or
preserve the rights awarded in the arbitration) shall be borne by the Disputing
Parties in the amounts and proportions specified by the arbitrator in his final
decision.

         Section 16.04 Confidentiality. No Partner (or assignee) shall, directly
or indirectly, disclose or provide to any other person (other than the partners,
Affiliates, attorneys, employees, agents and representatives of such Partner)
any nonpublic information of a confidential nature concerning the business or
operations of the Partnership (including, without limitation, any and all
Partnership business records, data, or other information regarding the business
of the Partnership or the Partnership assets), except as is required by law or
statute (including federal securities laws) or in governmental filings or
judicial, administrative or arbitration proceedings or as authorized by the
Managing Partner in furtherance of the Partnership Purposes. In the event that
any Partner is required in connection with judicial, administrative or
arbitration proceedings (by oral questions, interrogatories, requests for
information or document subpoena, civil investigative demand or similar process)
to disclose any such information, that Partner shall provide the other Partner
with prompt prior notice of such request so that the other Partner may seek an
appropriate protective order to take other appropriate action. Each Partner (and
assignee) agrees that any unauthorized disclosure of such information would not
be adequately compensable in damages and, thus, agrees that, in the event of any
such disclosure, the Partnership shall, in addition to any claim for damages for
breach of this Agreement, be entitled to seek and obtain equitable relief by way
of injunction or otherwise in a court of competent jurisdiction. This
confidentiality provision may be enforced by specific performance.

                                       36
<PAGE>

                                  ARTICLE XVII

                           Dissolution and Termination

         17.01 Dissolution. The Partnership shall be dissolved upon the
occurrence of any of the following:

         (a) The unanimous agreement of the Partners;

         (b) The expiration of the Partnership's term as specified pursuant to
Article IV hereof,

         (c) The sale, transfer, assignment or termination of all or
substantially all of the Partnership's ownership interest in the Amphitheater
including, without limitation, termination of the Lease Agreement upon
expiration of its term or otherwise; or

         (d) If the Lease Agreement has not been executed and entered into by
and between the Partnership and NJHA on or before January 31, 1997, then upon
the election of either Partner at any time thereafter and before execution of
the Lease Agreement, such election to be made by notice to the other Partner.

The dissolution shall be effective on the day on which the event occurs causing,
dissolution ("Effective Date of Dissolution"), but the Partnership shall not
terminate until the assets have been distributed in accordance with the
provisions of this Agreement.

         17.02 Nondissolution Events. None of the following, events shall
constitute or cause the dissolution of the Partnership, with the result that,
upon the happening of any one or more of these events, no one shall have the
right to compel the termination and liquidation of the Partnership:

         (i) the bankruptcy, dissolution or liquidation of a Partner; or

         (ii) the withdrawal of a Partner.

Each Partner waives its right and power either to dissolve the Partnership, or
to seek a court decree of dissolution.

         17.03 Distributions Upon Dissolution. On dissolution of the
Partnership, the Partners shall proceed diligently to wind up the affairs of the
Partnership and distribute its assets. The Managing Partner shall decide which
Partnership assets are to be sold for cash and which are to be distributed in
kind. The Partnership's assets, or the proceeds of their sale, shall be applied
or distributed in the following order of priority:

                                       37
<PAGE>

                  (a) In payment of all liabilities of the Partnership to
         creditors other than Partners. If any liability is contingent or
         uncertain in amount, a reserve equal to the maximum amount for which
         the Partnership could be reasonably held liable shall be established.
         Upon the satisfaction or other discharge of that contingency, the
         amount of the reserve not required, if any, will be treated as income
         to the extent previously treated as a deduction.

                  (b) In payment of any loans owed by the Partnership to any
         Partner.

                  (c) After all adjustments required to be made to the Capital
         Accounts of the Partners pursuant to the provisions hereof as a result
         of the allocation of all of the Partnership's income, gains, losses and
         deductions through the Partnership's final Tax Year have been
         completed, to the Partners in proportion to and to the extent of the
         balances in their respective Capital Accounts.


                                  ARTICLE XVIII

                              Transfer Restrictions

         18.01 Partner Interest. Except for a transfer of a Partnership Interest
as permitted in strict accordance with the provisions of Sections 18.04 or 18.05
hereof, neither Partner shall have the right to sell, assign, convey, transfer,
pledge, mortgage or hypothecate, by operation of law or otherwise, all or any
portion of its Partnership Interest without the prior consent of the other
Partner, it being agreed and acknowledged that such consent may be withheld in
such other Partner's sole discretion for any reason whatsoever. Any purported
sale, assignment, mortgage, conveyance, transfer, pledge or hypothecation of any
Partner's Partnership Interest in violation of the provisions of this Section
18.01 shall be voidable at the option of the other Partner.

         18.02 Ardee's Stock.

                  (a) No capital stock of Ardee may, at any time, be issued to,
         sold, conveyed or otherwise transferred to any Person other than to Ron
         Delsener, Mitch Slater or any person taking under either such
         individual's Last Will and Testament upon his death except in
         accordance with the following provisions:

                           (1) Issued and outstanding shares of capital stock of
                  Ardee may be sold to a third party purchaser provided that
                  prior notice thereof ("Ardee Stock Sale Notice") is provided
                  to Pavilion. To be validly provided, an Ardee Stock Sale
                  Notice must include the identity of the purchaser, the number
                  of shares being sold, the resulting ownership of the issued
                  and outstanding capital stock upon completion of the sale and
                  a copy of any employment contracts to be entered into upon
                  completion of the sale between Ardee, as employer, and Ron
                  Delsener or Mitch Slater, as employees. Copies of any
                  employment contracts to be provided to Pavilion pursuant

                                       38
<PAGE>

                  to the provisions of the immediately preceding sentence may,
                  at the option of Ardee, be modified to eliminate references to
                  the terms of compensation payable to the employees thereunder
                  and shall, in any event, be subject to the confidentiality
                  provisions set forth in Section 16.04 hereof.

                           (2) If, at any time following completion of a sale of
                  capital stock of Ardee permitted by the provisions of clause
                  (1) of this Section 18.02(a), one or both of Ron Delsener and
                  Mitch Slater do not control the operation of Ardee, by
                  contract, voting control or otherwise, then Pavilion shall
                  have the right and option, by notice to Ardee, to terminate
                  all management rights, powers and authorities granted to Ardee
                  pursuant to the provisions of this Agreement, including
                  (without limitation) (i) the right to approve Major Actions
                  pursuant to Section 12.01 hereof, (ii) the right to act as the
                  party primarily responsible for booking talent at the
                  Amphitheater and for advertising concerts at the Amphitheater
                  pursuant to Section 12.03 hereof and (iii) the right to
                  approve the adoption of Annual Operating Budgets pursuant to
                  Section 12.04 hereof. In order to avoid ambiguity, uncertainty
                  or doubt, it is hereby expressly stipulated and acknowledged
                  by the Partners that an exercise of Pavilion's right created
                  pursuant to the provisions of the immediately preceding
                  sentence to terminate all management rights, powers and
                  authorities granted to Ardee pursuant to the provisions of
                  this Agreement shall not have the effect of modifying the
                  provisions contained herein relating to the financial rights
                  or obligations of Ardee under this Agreement (such as, by way
                  of example, capital contribution obligations and rights to
                  receive distributions) or in any way alter the requirements of
                  Section 19.04 that amendments to this Agreement shall require
                  the approval of all of the Partners.

                  (b) Simultaneously with the execution of this Agreement, Ardee
         shall cause (A) Ron Delsener to execute a certificate or other
         instrument in form reasonably acceptable to Pavilion in which he
         confirms that (i) he is the owner of all of the issued and outstanding
         capital stock of Ardee (subject to that certain Stock Purchase
         Agreement ("SFX Stock Agreement") dated October 11, 1996 and entered
         into with SFX Broadcasting, Inc., a copy of which has been previously
         provided to Pavilion), (ii) his stock ownership interest in Ardee will
         be burdened by and encumbered with the transfer restrictions contained
         in this Section 18.02 and (iii) all share certificates evidencing the
         capital stock in Ardee will include an appropriate legend which
         references the transfer restrictions contained in this Section 18.02
         and (B) SFX Broadcasting, Inc. to execute a certificate or other
         instrument in form reasonably acceptable to Pavilion confirm that the
         execution of this Agreement is approved by SFX Broadcasting, Inc. and
         is not a violation of any term, provision or covenant contained in the
         SFX Stock Agreement.

         18.03 Ownership Interests in Pavilion. No ownership interest in
Pavilion may, at any time, be issued to, sold, conveyed or otherwise transferred
to any Person other than to PACE Entertainment Corporation, a Texas corporation,
Sony Music Entertainment, Inc., a Delaware

                                       39
<PAGE>

corporation, Viacom Inc., a Delaware corporation, or any Affiliate of any such
party without the prior written consent of Ardee.

         18.04 Sale of Partnership Interest. If (i) one Partner ("Selling
Partner") receives a written offer from a third party ("Proposed Purchaser") to
purchase all or substantially all of the Partnership's interest in the
Amphitheater which the Selling Partner desires to accept on behalf of the
Partnership and (ii) the other Partner ("Non-Selling Partner") is unwilling to
consent to the sale of the Amphitheater to the Proposed Purchaser upon the terms
and conditions contained in such offer, then the Selling Partner shall have the
right, subject to the provisions of Section 18.06 hereof, to sell all, but not
less than all, of its Partnership Interest if, but only if, the Selling Partner
complies with all of the following provisions:

                  (a) The Selling Partner shall provide prompt written notice to
         the Non-Selling Partner upon the commencement of negotiation concerning
         any proposed sale of the Selling- Partner's Partnership Interest to the
         Proposed Purchaser.

                  (b) Upon request of the Non-Selling Partner at any time
         following the notice given pursuant to clause (a), the Selling Partner
         shall provide an oral report as to the status of the negotiations for
         the proposed sale of the Selling Partner's Partnership Interest to the
         Proposed Purchaser.

                  (c) The Selling Partner shall provide to the Non-Selling
         Partner copies of all written drafts, letters or other documentation
         pertaining to such proposed sale of the Selling Partner's Partnership
         Interest to the Proposed Purchaser.

                  (d) Within five (5) days following the execution of a
         definitive agreement ("Purchase Agreement") pursuant to which the
         Selling Partner agrees to sell its Partnership Interest to the Proposed
         Purchaser, the performance of each party thereto being conditioned
         expressly upon the provisions of this Section 18.04, the Selling
         Partner shall provide a true, correct, complete and accurate copy
         thereof to the Non-Selling Partner.

                  (e) Following receipt of a Purchase Agreement, the Non-Selling
         Partner shall have the right and option ("Purchase Option"),
         exercisable in its sole discretion, to purchase the Selling Partner's
         Partnership Interest upon the same terms, provisions and conditions
         contained in such Purchase Agreement.

                  (f) The Purchase Option may be exercised by the Non-Selling,
         Partner at any time within thirty (30) days after receipt of a Purchase
         Agreement by providing written notice thereof to the Selling Partner.
         If the Non-Selling Partner should exercise the Purchase Option in a
         timely manner, then the Selling Partner shall be required, at the
         closing of the sale of the Selling Partner's Partnership Interest to
         the Non-Selling Partner, to execute such reasonable documentation as
         may be requested or required by the NonSelling Partner to indicate the
         Selling Partner's agreement that it and its Affiliates will continue to
         be bound

                                       40
<PAGE>

         by the restrictions, limitations and covenants contained in the Article
         XIII of this Agreement for a period commencing on the date of the
         closing of such sale to the Non-Selling Partner and continuing through
         and until the third (3rd) anniversary date of the closing of such sale.
         The closing of the sale of a Selling Partner's Partnership Interest to
         a Non-Selling Partner pursuant to a timely exercise of the Purchase
         Option shall occur on or before the later of (i) sixty (60) days
         following the exercise of the Purchase Option or (ii) the outside date
         for closing the transaction contemplated by the Purchase Agreement
         which was the subject of the Purchase Option.

                  (g) If, at any time after delivery of a Purchase Agreement to
         the Non-Selling Partner, whether before or after the deadline for the
         Non-Selling Partner's decision to exercise the Purchase Option, any of
         the terms or provisions contained in such Purchase Agreement should be
         amended by agreement between the Selling Partner and the Proposed
         Purchaser, then the Selling Partner shall provide prompt written notice
         of such modification to the Non-Selling Partner, and the Purchase
         Option shall be extended until the date which is thirty (30) days after
         the provision of such notice of such amendment.

                  (h) If the Non-Selling Partner does not exercise the Purchase
         Option within thirty (30) days after receipt of a Purchase Agreement
         (or, if applicable, after receipt of notification pursuant to clause
         (g) of an amendment to a Purchase Agreement), then the Selling Partner
         may thereafter complete the proposed sale of its Partnership Interest
         to the Proposed Purchaser upon the same terms, conditions and
         provisions contained in the Purchase Agreement previously provided to
         the Non-Selling Partner in accordance with the provisions thereof,
         provided that the following provisions are complied with at the closing
         of the sale:

                           (1) The Proposed Purchaser must execute such
                  reasonable documentation as may be requested or required by
                  the Non-Selling Partner to indicate the Proposed Purchaser's
                  agreement to be bound by all of the terms, provisions,
                  agreements, covenants and restrictions contained herein to the
                  same extent, and in the same manner as if, the Proposed
                  Purchaser had been an original party hereto.

                           (2) The Selling Partner must execute such reasonable
                  documentation as may be requested or required by the
                  Non-Selling Partner to indicate the Selling Partner's
                  agreement that it and its Affiliates will continue to be bound
                  by the restrictions, limitations and covenants contained in
                  Article XIII of this Agreement for a period commencing on the
                  date of the closing of such sale to the Proposed Purchaser and
                  continuing through and until the third (3 )rd) anniversary
                  date of the closing of such sale.

         Upon completion of such sale of the Selling Partner's Partnership
         Interest to the Proposed Purchaser in accordance with the foregoing
         provisions, the Proposed Purchaser shall be admitted as a new Partner
         in the Partnership in place of the Selling Partner.

                                       41
<PAGE>

         18.05 Transfers/Pledges to Owners. The following limited exceptions
shall apply to the restrictions created in Section 18.01 hereof:

                  (a) Pavilion, with prior notice to Ardee, may transfer or
         pledge its Partnership Interest to any one or more of PACE
         Entertainment Corporation, Sony Music Entertainment Inc., Viacom Inc.
         or a Person wholly-owned by one or more of such corporations.

                  (b) Ardee, with prior notice to Pavilion, may transfer or
         pledge its Partnership Interest to any one or more of Ron Delsener,
         Mitch Slater or a Person wholly-owned by one or both of such
         individuals.

Upon (i) completion of any transfer of a Partner's Partnership Interest
(including a foreclosure of a pledge previously made pursuant to the provisions
of this Section 18.05) permitted by the foregoing provisions of this Section
18.05 and (ii) the acquiring party executing such reasonable documentation as
may be required by the other Partner to indicate the acquiring party's agreement
to be bound by all of the terms, provisions, agreements, covenants and
restrictions contained herein to the same extent, and in the same manner as if,
such acquiring party had been an original party hereto, the acquiring party
shall be admitted as a new Partner in the Partnership in place of the
transferring Partner.

         18.06 No Violation of Lease Agreement. Notwithstanding anything to the
contrary contained in this Article XVIII, neither Partner shall have the right
to transfer its Partnership Interest to a third party, or permit a transfer of
any ownership interest, direct or indirect, in such Partner in a manner which
could result in a violation of any restriction, covenant or provision contained
in the Lease Agreement or could otherwise cause the Tenant to be in default
under any provision of the Lease Agreement. Any purported transfer of a
Partnership Interest by either Partner or of any ownership interest, direct or
indirect, in either Partner which violates the provisions contained in the
immediately preceding sentence shall (i) be null and void, ab initio and (ii) be
deemed to be the occurrence of a Partner Default with respect to such Partner.


                                   ARTICLE XIX

                            Miscellaneous Provisions

         19.01 Notices. All notices, offers, approvals, elections, consents,
acceptances, waivers, reports, requests and other communications required or
permitted to be given hereunder (all of the foregoing hereinafter collectively
referred to as "Communications") shall be in writing, and shall be deemed to
have been duly given if delivered personally with receipt acknowledged or sent
by registered or certified mail or equivalent, if available, return receipt
requested, or by facsimile, telex or cablegram (which shall be confirmed by a
writing sent by registered or certified mail or equivalent on the same day that
such facsimile, telex or cablegram is sent), or by recognized overnight courier
for next day delivery, addressed or sent to the parties at the following,
addresses and facsimile

                                       42
<PAGE>

numbers or to such other additional address or facsimile number as any party
shall hereafter specify by Communication to the other parties:

         Pavilion:                  c/o SM/PACE, Inc.
                                    515 Post Oak Blvd., Suite 300
                                    Houston, Texas 77027
                                    Facsimile No.: (713) 693-8617
                                    ATTN: Mr. Jeffrey B. Lewis

         with a copy to:            Michael F. Rogers
                                    Gardere Wynne Sewell & Riggs, L.L.P.
                                    333 Clay Avenue, Suite 800
                                    Houston, Texas 77009
                                    Facsimile No.: (713) 308-5555

                                            and

                                    Sony Music Entertainment Inc.
                                    550 Madison Avenue
                                    New York, New York 10022-3211
                                    ATTN: David H. Johnson
                                    Facsimile No.: (212) 8333-8083

                                            and

                                    Sony Music Entertainment Inc.
                                    550 Madison Avenue
                                    New York, New York 10022-3211
                                    ATTN: Marvin Cohn
                                    Facsimile No.: (212) 833-4007

Ardee:                              Exit 116 Revisited, Inc.
                                    27 East 67th Street
                                    New York, New York 10021
                                    ATTN: Ron Delsener
                                    Facsimile No.: (212) 879-1926

with a copy to:                     Saretsky Katz & Dranoff, P.C.
                                    950 Third Avenue
                                    New York, N.Y. 10022
                                    ATTN: Mr. Alan G. Katz

                                       43
<PAGE>

         19.02 Delaware Law to Apply. This Agreement shall be construed under
and in accordance with laws of the State of Delaware.

         19.03 Other Instruments. The parties hereto covenant and agree that
they will execute such other and further instruments and documents as are or may
become necessary or convenient to effectuate and carry out the Partnership
created by this Agreement.

         19.04 Amendment. This Agreement may be amended or modified by the
Partners from time to time but only upon approval by all of the Partners
contained in a written instrument.

         19.05 Headings. The headings used in this Agreement are used for
administrative purposes only and do not constitute substantive matter to be
considered in construing the terms of terms of this Agreement.

         19.06 Parties Bound. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, legal representatives, successors, and assigns where permitted
by this Agreement.

         19.07 Legal Construction. In case any one or more of the provisions
contained in this Partnership Agreement shall, for any reason, be held to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other provision thereof and this
Partnership Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.

         19.08 Counterparts. This Partnership Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original.

         19.09 Gender. Wherever the context shall so require, all words herein
in the male gender shall be deemed to include the female or neuter gender, all
singular words shall include the plural, and all plural words shall include the
singular.

         19.10 Affiliate Liability. Notwithstanding anything to the contrary
contained herein, or implied hereby, in no event shall any Person, except for
the Partners and the general partners of Pavilion, be liable for the
responsibilities, obligations or liabilities of either of the Partners
hereunder. In that connection, it is specifically agreed and acknowledged that,
except for the general partners of Pavilion, no officer, shareholder, director
or other Affiliate of a Partner shall be liable for any of the responsibilities,
liabilities or obligations of any Partner hereunder.

         19.11 Prior Agreements Superseded. This Agreement (i) is an amendment
and restatement of the Partnership Agreement dated May 31, 1996 and entered into
by and between the Partners and (ii) supersedes any prior understandings or
written or oral agreements between the parties respecting the within subject
matter.

                                       44
<PAGE>

         19.12 Failure to Execute Lease Agreement.

                  (a) Except as expressly provided in clause (b) of this Section
         19.12, neither Partner (nor any of its Affiliates) shall execute at any
         time a Lease Agreement with NJHA providing for the use, operation and
         possession of the Amphitheater during the 1997 Amphitheater Season
         unless such Lease Agreement is in favor of the Partnership and approved
         for execution by both of the Partners. The provisions of this Section
         19.12 shall (i) survive dissolution and termination of the Partnership
         and (ii) not preclude Ardee and its Affiliates from booking the
         Amphitheater consistent with past practices after dissolution and
         termination of the Partnership.

                  (b) If, upon final completion of negotiations with NJHA of the
         terms to be included in the Lease Agreement, one of the Partners
         refuses to approve the execution of the final negotiated form of the
         Lease Agreement ("Final Lease Form"), then the other Partner shall have
         the right, notwithstanding the provisions of clause (a) of this Section
         19.12, to thereafter execute and enter into, on its own behalf or
         together with other partners, a Lease Agreement with NJHA upon the same
         terms and provisions contained in the Final Lease Form.


              (The remainder of this page is intentionally blank.]

                                       45
<PAGE>

EXECUTED as of the day and year first written above.


                                       PAVILION PARTNERS, a
                                       Delaware general partnership


                                       By: SM/PACE, Inc., a Texas corporation


                                                By: /s/ Brian E. Becker
                                                   ----------------------------
                                                Name:  BRIAN E. BECKER
                                                Title: CHIEF EXECUTIVE OFFICER


                                       EXIT 116 REVISITED, INC.,
                                       a New Jersey corporation


                                       By: /s/ Mitchell Slater  
                                          -------------------------------------
                                          Name:  Mitchell Slater
                                          Title: President

<PAGE>

                                  Exhibit "A- I

                               Restricted NJ Area


         The "Restricted NJ Area" shall consist of the entire state of New
Jersey except for (i) the counties of Camden, Gloucester, Salem and Cumberland
and (ii) the portion of Burlington County which lies west of Highway 206.

<PAGE>

                                  Exhibit "A-2"

                               Restricted NY Area


The "Restricted NY Area" shall consist of all of the following:

         (a) That portion of Westchester County, New York which lies south of
Tarrytown, New York and within two and one-half (2-1/2) miles of the eastern
shoreline of the Hudson River.

         (b) That portion of Bronx County, New York which lies within two and
one-half (2-1/2) miles of the eastern shoreline of the Hudson River.

         (c) All of Manhattan Island, New York.

         (d) That portion of Kings County, New York which lies west of Flatbush
Avenue.

         (e) All of Staten Island, New York.

         (f) All of Rockland County, New York.

<PAGE>

PNC BANK ARTS CENTER CONSTRUCTION BUDGET


                                                                     Budget
         Cost Item                Budget Souce                      11/19/96


--------------------------------------------------------------------------------
CONSTRUCTION HARD COST

       Cost Item                  Budget Source                  Budget 11/19/96
--------------------------------------------------------------------------------

                                    [DELETED]










--------------------------------------------------------------------------------
CONSTRUCTION HARD COST SUBTOTAL                                    5,572,338
--------------------------------------------------------------------------------

                                    [DELETED]


            Subtotal                                               6,140,626

                                    EXHIBIT B
                               

<PAGE>

PNC BANK ARTS CENTER CONSTRUCTION BUDGET


                                                                     Budget
         Cost Item                Budget Souce                      11/19/96

--------------------------------------------------------------------------------
TOTAL GNP HARD COST                                                6,575,626
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
INSTALLED EQUIPMENT
--------------------------------------------------------------------------------

                                    [DELETED]

--------------------------------------------------------------------------------
INSTALLED EQUIPMENT SUBTOTAL                                         665,000
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
GRAND TOTAL HARD COST                                              7,240,626
--------------------------------------------------------------------------------

EQUIPMENT

                                    [DELETED]

                                    EXHIBIT B

<PAGE>

PNC BANK ARTS CENTER CONSTRUCTION BUDGET

OSNOVBUD

                                                                     Budget
         Cost Item                Budget Souce                      11/19/96

                                    [DELETED]

--------------------------------------------------------------------------------
EQUIPMENT SUBTOTAL                                                   978.375
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
A & E CONSULTANTS AND MISC
--------------------------------------------------------------------------------

                                    [DELETED]

--------------------------------------------------------------------------------
A & E CONSULTANTS AND MISC. SUBTOTAL                                 796,960
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
OVERHEAD                              1.42%                          130,000
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
TOTAL PROJECT COSTS                                                9,145,961
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Overhead Detail Analysis 

Total Overhead                                                       130,000
--------------------------------------------------------------------------------

                                    EXHIBIT B

<PAGE>

                                   EXHIBIT "C"

1.       Parking Lot Improvements - A sufficient number of new onsite parking
         spaces will be constructed by expanding existing parking lots and
         creating new parking areas. Not less than 1,700 new onsite parking
         spaces will be built, prior to the Opening Date. Additional on-site
         parking built at any time after the Commencement Date will be
         considered part of the Renovation Work for purposes of this Lease. The
         parking lots will be lighted and include drainage, storm water
         collection systems and detention basins so that there will be no net
         increase in the present runoff. The parking lots will consist of 4
         inches of dense graded aggregate base course, 3 inches of a stabilized
         base course, I-2 and 1 1/2inches of bituminous concrete surface course,
         I-4. Parking lot areas will be evaluated in an effort to obtain
         sufficient cut on site to accommodate the required fill but outside
         fill may be required.

2.       On Site Facility Improvements -

(a)      Main Plaza Improvements - A new box office will be constructed at the
         front of the main entry as well as entry gates and structures
         consisting of 11 regular gates and 1 handicapped gate. The existing
         buildings within the main plaza area will be reconfigured to create a
         concession area and additional restroom facilities. Without negating
         Tenant's general obligations to repair and maintain the Amphitheater
         through the Term, it is hereby expressly recognized, agreed and
         acknowledged that Tenant does not intend to, and shall not be required
         to, cause the pavement in the plaza area to be replaced as a part of
         the Renovation Work. The plans for the Renovation Work shall provide
         for and include a first aid and security building.

(b)      East and West Plaza Improvements - The 2 existing plazas will be
         expanded by approximately 40,000 square feet of asphalt paving with
         minimal disruption to the existing trees. That surface will consist of
         4 inches of crushed stone subbase, 3 inches of asphalt binder course
         and 1 1/2inches of asphalt wearing course. Additional lighting will be
         installed on the plazas. The existing restrooms will be expanded by
         approximately 4,200 square feet and the points of service in the
         concession building will be expanded by adding an additional 6,000
         square feet of concession buildings divided equally between the 2
         plazas. Access walkways from the main entry plaza to both the east and
         west plazas will be constructed.

(c)      Reserved Fixed Seating - The fixed seating will be increased by
         approximately 1,725 seats which will be added in and among the existing
         seats where aisle ways are deleted and to the back of the existing seat
         area underneath the existing overhang. All work shall meet applicable
         DCA codes and ADA requirements. Twenty to thirty box seats may be added
         by removing three rows of seats. A mixing booth will be added near the
         center of the facility.

(d)      Lawn Seating Area - The lawn seating area will be increased to 10,500
         capacity which is an increase of 5,000 over the existing capacity.
         Cross aisle retaining walls will be required along the handrails and
         access stair requirements. The pergola will be demolished and the
         existing

<PAGE>

         gates utilized elsewhere on the project. The proximity of the new lawn
         seating to the parking lot, main plaza and Meyner Center tracts will
         necessitate a reconfiguration of the perimeter fence, but such
         reconfiguration will not interfere with the operations of the Meyner
         Reception Center.

3.       General - All clearing work performed in connection with the
         improvements described above shall comply with public law,
         PL1993-Chapter 106, which states in general terms that for every area
         cleared of trees an equal area must be re-forested elsewhere. In
         addition, all improvements described above shall provide for drainage,
         storm water collection systems and detention basins so that there will
         be no net increase in the present runoff. Landscaping other than mature
         trees will be replaced consistent with existing landscape. Most of the
         large trees in the area of the expanded plazas and hill seating will be
         removed. Tree removal will be mitigated in accordance with applicable
         criteria/laws.

<PAGE>

EXHIBIT D-1

PAVILION'S DEVELOPMENT COSTS AS OF SEPTEMBER 30, 1996

RENOVATION DETAIL

Architect/Engineer Fees             $177,069
Development Costs                   $92,042
Construction                        $598
Professional Fees                   $5,000
Graphic Design/Artwork              $1,065
Consulting                          $112,515
Total Renovation                    $388,289


START-UP DETAIL

Delivery and Postage                $    474
Donations/Charities                 $    500
Legal                               $ 89,924
Meals and Entertainment             $  7,859
Mileage and Parking                 $  2,170
Miscellaneous                       $  1,875
Printing/Office Supplies            $  2,154
Telephone                           $    699
Transportation                      $  3,995
Travel and Lodging                  $ 30,707
                                    --------
Total Start-up                      $140,357
                                    ========


TOTAL RENOVATION COSTS THROUGH 9.30.96            $528,646
                                                  ========

<PAGE>

                                   EXHIBIT D-2

Airfare

December 6th                                                  $ 1,341.00

December 19th                                                     836.00

May 10th                                                        1,509.85
                                                              ----------
                                                              $ 3,686.86


Ground Transportation

GSAC presentation                                             $ 1,298.56

Highway Authority meeting                                         333.50
                                                              ----------
                                                               $1,632.06


Legal Fees & Disbursements

Fees                                                          $49,136.24

Disbursements                                                   1,595.12
                                                              ----------

Total Expenses                                                $56,050.28
                                                              ==========


Source: OneCLE Business Contracts.