<PAGE>



                                                                    EXHIBIT 10.1


                          SECOND AMENDED AND RESTATED
                              OPERATING AGREEMENT
                                      FOR
                        PLAYBOY TV - LATIN AMERICA, LLC
                     A CALIFORNIA LIMITED LIABILITY COMPANY












Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by ("***"), and each page containing confidential
information is footnoted with the phrase "FOIA Confidential Treatment". The
omitted text has been filed separately with the Securities Exchange Commission.

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ARTICLE 1             DEFINITIONS.........................................................................    1

ARTICLE 2             ORGANIZATIONAL MATTERS..............................................................    8

      2.1      Formation..................................................................................    8

      2.2      Name.......................................................................................    9

      2.3      Term.......................................................................................    9

      2.4      Office and Agent...........................................................................    9

      2.5      Addresses of the Members, the Managers and the General Manager.............................    9

      2.6      Purpose of Company.........................................................................    9

ARTICLE 3             CAPITAL CONTRIBUTIONS...............................................................    9

      3.1      Capital Contribution.......................................................................    9

      3.2      Additional Capital Contributions...........................................................   10

      3.3      Optional Capital Contributions.............................................................   10

      3.4      Capital Accounts...........................................................................   10

      3.5      No Interest................................................................................   10

      3.6      Iberia Agreements..........................................................................   11

ARTICLE 4             ALLOCATIONS OF NET INCOME AND NET LOSSES AND DISTRIBUTIONS..........................   11

      4.1      Allocations of Net Income and Net Loss.....................................................   11

      4.2      Distribution of Distributable Cash by the Company..........................................   11

      4.3      Form of Distribution.......................................................................   11

      4.4      Restriction on Distributions...............................................................   12

               4.4.1    Restriction.......................................................................   12

               4.4.2    Method of Determination...........................................................   12

               4.4.3    Personal Liability................................................................   12

      4.5      Return of Distributions....................................................................   12

      4.6      Withholding................................................................................   12

ARTICLE 5             MANAGEMENT AND CONTROL OF THE COMPANY...............................................   13

      5.1      The Management Committee...................................................................   13

               5.1.1    General Scope of Authority........................................................   13

               5.1.2    Veto Rights.......................................................................   13

      5.2      Members of the Management Committee; Appointment and Removal; Voting.......................   14

      5.3      Meetings of the Management Committee.......................................................   15

      5.4      Delegation of Authority; General Manager and Other Officers................................   15
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               5.4.1    General Power to Delegate Authority...............................................   15

               5.4.2    The General Manager...............................................................   16

               5.4.3    Duties of the General Manager.....................................................   16

               5.4.4    Additional Officers...............................................................   17

               5.4.5    Officers Serve at the Pleasure of the Management Committee........................   17

      5.5      Interested Party Transactions..............................................................   17

               5.5.1    Approval..........................................................................   17

               5.5.2    Termination and Remedies..........................................................   17

               5.5.3    Priority of Payments..............................................................   17

      5.6      Performance of Duties; Liability of Managers...............................................   18

               5.6.1    Standards.........................................................................   18

      5.7      Management Company.........................................................................   18

      5.8      Insurance..................................................................................   18

ARTICLE 6             BUSINESS PLANS AND ANNUAL BUDGETS...................................................   18

      6.1      The Business Plan..........................................................................   18

               6.1.1    The Business Plan.................................................................   18

               6.1.2    Additions to Business Plan........................................................   18

      6.2      Annual Budgets.............................................................................   18

               6.2.1    Adjustment to Annual Budget.......................................................   18

               6.2.2    Required Local Programming Expenditures Allocations...............................   19

               6.2.3    Adjustment to Company Produced Programming Budget and Marketing Budget............   19

ARTICLE 7             [INTENTIONALLY OMITTED].............................................................   19

ARTICLE 8             MEMBERS.............................................................................   19

      8.1      Limited Liability..........................................................................   19

      8.2      Admission of Additional Members............................................................   20

      8.3      Withdrawals or Resignations................................................................   20

      8.4      Termination of Membership Interest.........................................................   20

      8.5      Remuneration To Members....................................................................   20

      8.6      Members Are Not Agents; No Management Authority............................................   20

      8.7      Meetings of Members........................................................................   20

               8.7.1    Date, Time and Place of Meetings of Members; Secretary............................   20

               8.7.2    Power to Call Meetings............................................................   20
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               8.7.3    Notice of Meeting.................................................................   20

               8.7.4    Manner of Giving Notice; Affidavit of Notice......................................   21

               8.7.5    Validity of Action................................................................   21

               8.7.6    Quorum............................................................................   21

               8.7.7    Adjourned Meeting; Notice.........................................................   21

               8.7.8    Waiver of Notice or Consent.......................................................   21

               8.7.9    Action by Written Consent Without a Meeting.......................................   21

               8.7.10   Telephonic Participation by Member at Meetings....................................   22

               8.7.11   Record Date.......................................................................   22

               8.7.12   Proxies...........................................................................   22

ARTICLE 9             TRANSFER AND ASSIGNMENT OF INTERESTS................................................   23

      9.1      Transfer and Assignment of Interests.......................................................   23

      9.2      Further Restrictions on Transfer of Interests..............................................   23

      9.3      Right of First Offer.......................................................................   23

      9.4      Right of First Refusal.....................................................................   24

      9.5      Substitution of Members....................................................................   25

      9.6      Effective Date of Permitted Transfers......................................................   26

      9.7      Rights of Legal Representatives............................................................   26

      9.8      PEGI Buy-Up Option.........................................................................   26

      9.9      Claxson Control Over Membership Interest...................................................   27

      9.10     Playboy Television B.V. and PTVLA U.S., LLC................................................   28

      9.11     Venus Operations...........................................................................   29

ARTICLE 10            CONSEQUENCES OF DEATH, DISSOLUTION RETIREMENT OR BANKRUPTCY OF MEMBER...............   30

      10.1     Withdrawal Dissolution Event...............................................................   30

      10.2     Purchase Price.............................................................................   30

      10.3     Notice of Intent to Purchase...............................................................   30

      10.4     Election to Purchase Less Than All of the Former Member's Interest.........................   31

      10.5     Payment of Purchase Price..................................................................   31

      10.6     Closing of Purchase of Former Member's Interest............................................   31

      10.7     Purchase Terms Varied by Agreement.........................................................   31

ARTICLE 11            ACCOUNTING, RECORDS, REPORTING BY MEMBERS...........................................   31

      11.1     Books and Records..........................................................................   31

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      11.2     Delivery to Members and Inspection.........................................................   32

               11.2.1   Delivery Upon Request.............................................................   32

               11.2.2   Inspection........................................................................   32

               11.2.3   Authorized Persons................................................................   32

               11.2.4   PEI Additional Right of Inspection................................................   32

      11.3     Statements.................................................................................   33

               11.3.1   Annual Report.....................................................................   33

               11.3.2   Monthly Report....................................................................   33

               11.3.3   Tax Information...................................................................   33

      11.4     Financial and Other Information............................................................   33

      11.5     Filings....................................................................................   33

      11.6     Bank Accounts..............................................................................   33

      11.7     Accounting Decisions and Reliance on Others................................................   34

      11.8     Tax Matters for the Company Handled by Managers and Tax Matters Member.....................   34

ARTICLE 12            DISSOLUTION AND WINDING UP..........................................................   34

      12.1     Term.......................................................................................   34

      12.2     Dissolution Events.........................................................................   34

      12.3     Effect of Dissolution......................................................................   36

      12.4     Dissolution................................................................................   36

      12.5     Certificate of Dissolution.................................................................   37

      12.6     Winding Up.................................................................................   37

      12.7     Distributions in Kind......................................................................   37

      12.8     Order of Payment of Liabilities Upon Dissolution...........................................   37

               12.8.1   Distributions to Members..........................................................   37

               12.8.2   Payment of Debts..................................................................   37

      12.9     Certificate of Cancellation................................................................   38

      12.10    No Action for Dissolution..................................................................   38

ARTICLE 13            INDEMNIFICATION AND INSURANCE.......................................................   38

      13.1     Indemnification of Agents..................................................................   38

      13.2     Insurance..................................................................................   38

ARTICLE 14            NON-COMPETITION.....................................................................   39

      14.1     Prohibited Activities......................................................................   39

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      14.2     Separate Covenants.........................................................................   39

      14.3     Intent; Severability.......................................................................   39

      14.4     Injunctive Relief..........................................................................   39

ARTICLE 15            MEMBER REPRESENTATIONS AND WARRANTIES...............................................   40

      15.1     Representations and Warranties by Each Member..............................................   40

               15.1.1   Experience........................................................................   40

               15.1.2   No Advertising....................................................................   40

               15.1.3   Investment Intent.................................................................   40

               15.1.4   Purpose of Entity.................................................................   40

               15.1.5   Economic Risk.....................................................................   40

               15.1.6   No Registration of Membership Interest............................................   40

               15.1.7   Membership Interest in Restricted Security........................................   40

               15.1.8   No Obligation to Register.........................................................   40

               15.1.9   No Disposition in Violation of Law................................................   41

               15.1.10  Investment Risk...................................................................   41

               15.1.11  Restrictions on Transferability...................................................   41

               15.1.12  Information Reviewed..............................................................   41

               15.1.13  No Representations By Company.....................................................   41

               15.1.14  Consultation with Attorney........................................................   42

               15.1.15  Tax Consequences..................................................................   42

               15.1.16  No Assurance of Tax Benefits......................................................   42

      15.2     Indemnity..................................................................................   42

ARTICLE 16            DISPUTE RESOLUTION..................................................................   42

      16.1     Alternate Dispute Resolution...............................................................   42

      16.2     Notification and Negotiation...............................................................   42

      16.3     Arbitration Rules..........................................................................   43

      16.4     Selection of Arbitrators...................................................................   43

      16.5     Arbitration Procedures.....................................................................   43

      16.6     Effect of Arbitration......................................................................   44

      16.7     Statute of Limitations.....................................................................   44

      16.8     Service of Process.........................................................................   44

      16.9     Additional Arbitration Provisions..........................................................   44

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      16.10    Availability of Equitable Relief...........................................................   44

ARTICLE 17            MISCELLANEOUS.......................................................................   44

      17.1     Additional Documents and Acts..............................................................   44

      17.2     Time is of the Essence.....................................................................   44

      17.3     Remedies Cumulative........................................................................   45

      17.4     Currency; Payments.........................................................................   45

      17.5     Governing Law..............................................................................   45

      17.6     Authority..................................................................................   45

      17.7     Assignment; No Third Party Beneficiary.....................................................   45

      17.8     Agreement Negotiated.......................................................................   46

      17.9     Waivers; Remedies Cumulative, Amendments, etc..............................................   46

      17.10    Notices....................................................................................   46

      17.11    Public Announcements.......................................................................   47

      17.12    Survival...................................................................................   47

      17.13    Confidentiality............................................................................   47

               17.13.1  General Confidentiality Requirements..............................................   48

               17.13.2  Exceptions to the General Confidentiality Requirements............................   48
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                                    EXHIBITS

EXHIBIT A           CAPITAL CONTRIBUTION AND ADDRESSES OF MEMBERS.........................................   A-1
EXHIBIT B           TAX ALLOCATIONS.......................................................................   B-1
EXHIBIT C           CALCULATION OF FAIR MARKET VALUE......................................................   C-1
EXHIBIT D           EXISTING AFFILIATE AGREEMENTS.........................................................   D-1
EXHIBIT E           RESTRICTED TRANSFEREES................................................................   E-1
EXHIBIT F           APPROVED COMPANY NAMES................................................................   F-1
EXHIBIT G           REGISTRATION RIGHTS...................................................................   G-1
EXHIBIT H           RELATED DOCUMENTS.....................................................................   H-1
EXHIBIT I           EXISTING PTV BV AGREEMENTS............................................................   I-1
EXHIBIT J           EXISTING PTV US AGREEMENTS............................................................   J-1
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                                       i
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                          SECOND AMENDED AND RESTATED
                              OPERATING AGREEMENT
                                      FOR
                        PLAYBOY TV - LATIN AMERICA, LLC
                     A CALIFORNIA LIMITED LIABILITY COMPANY

         This Second Amended and Restated Operating Agreement is made and
entered into on December 23, 2002, effective as of April 1, 2002 (the
"EFFECTIVE Date"), by and between Playboy Entertainment Group, Inc., a Delaware
corporation (together with its permitted successors and assigns "PEGI") and
Lifford International Co. Ltd., an International Business Company incorporated
under the laws of the British Virgin Islands (together with its permitted
successors and assigns "LIFFORD"), with reference to the following facts:

         A.       On June 14, 1996, Articles of Organization for Playboy TV -
Latin America, LLC, a limited liability company organized under the laws of the
State of California (the "COMPANY"), were filed with the California Secretary
of State, and PEGI and Bloomfield Mercantile, Inc. executed an operating
agreement (the "INITIAL OPERATING AGREEMENT").

         B.       On November 4, 1998, Bloomfield Mercantile, Inc. assigned all
of its rights and obligations under the Initial Operating Agreement to Lifford
and Lifford was admitted as a Member to the Company.

         C.       On November 10, 1998, PEGI and Lifford amended and restated
the Initial Operating Agreement (the "AMENDED AND RESTATED OPERATING
AGREEMENT") in its entirety effective as of June 14, 1996.

         D.       Concurrently with the execution of this Agreement, PEGI and
Claxson are closing the restructuring (the "RESTRUCTURING") of the joint
venture relationships between Playboy Enterprises, Inc., a Delaware corporation
("PEI"), and its Affiliates, on the one hand, and Claxson Interactive Group
Inc., an International Business Company incorporated under the laws of the
British Virgin Islands ("CLAXSON") and its Affiliates, on the other hand.

         E.       Concurrently with the execution of this Agreement, Claxson is
contributing Venus to the Company pursuant to the Venus Contribution Agreement
(the "VENUS CONTRIBUTION").

         F.       The parties desire to amend and restate the Amended and
Restated Operating Agreement, as hereafter amended and restated, in its
entirety as of the Effective Date.

         NOW, THEREFORE, the parties by this Agreement amend and restate the
Amended and Restated Operating Agreement in its entirety under the laws of the
State of California upon the terms and subject to the conditions of this
Agreement.

                                   ARTICLE 1
                                  DEFINITIONS

         When used in this Agreement, the following terms shall have the
meanings set forth below:

         "AAA" has the meaning set forth in Section 16.3.

         "ACT" means the Beverly-Killea Limited Liability Company Act, codified
in the California Corporations Code, Section 17000 et seq., as the same may be
amended from time to time.

<PAGE>

         "ADDITIONAL BUY-UP OPTION" has the meaning set forth in Section 9.8.

         "ADULT-ORIENTED" means, with respect to a Channel or program, that
such Channel or program features content that is comparable to or more explicit
than the content that is exhibited on the Channels in the Territories as of the
date of this Agreement; it being understood that content that would be rated no
more restrictively than "R" by the Motion Picture Association of America is not
"Adult-Oriented" content as such rating standards are currently in effect.

         "ADULT-ORIENTED TELEVISION BUSINESS" means the business of owning or
operating an Adult-Oriented television service or distributing, supplying or
producing Adult-Oriented programming in the Media.

         "AFFILIATE" means any Person, directly or indirectly through one or
more intermediaries, controlling, controlled by, or under common control with
the specified Person. The term "control" (and "controlled" and "controlling,"
respectively), as used in the immediately preceding sentence, means the
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of the specified Person (whether by the holding
of shares or other equity interests, the possession of voting rights or
otherwise).

         "AGENT" has the meaning set forth in Section 13.1.

         "AGREEMENT" means this Second Amended and Restated Operating
Agreement, as originally executed and as amended from time to time in
accordance with the terms hereof.

         "AMENDED AFFILIATION AGREEMENT" means that certain Amended Affiliation
Agreement, executed concurrently herewith and effective as of the Effective
Date, by and between the Company and PTV BV.

         "AMENDED AND RESTATED OPERATING AGREEMENT" has the meaning set forth
in the recitals.

         "ANNUAL BUDGET" has the meaning set forth in Section 6.2.

         "ARTICLES" means the Articles of Organization for the Company
originally filed with the California Secretary of State and as amended from
time to time.

         "BANKRUPTCY" with respect to a Member means: (a) the filing of an
application by a Member for, or such Member's consent to, the appointment of a
trustee, receiver, or custodian of such Member's other assets; (b) the entry of
an order for relief with respect to a Member in proceedings under the
Bankruptcy Code, as amended or superseded from time to time; (c) the making by
a Member of a general assignment for the benefit of creditors; (d) the entry of
an order, judgment, or decree by any court of competent jurisdiction appointing
a trustee, receiver, or custodian of the assets of a Member unless the
proceedings and the person appointed are dismissed within ninety (90) days; or
(e) the failure by a Member generally to pay such Member's debts as the debts
become due within the meaning of Section 303(h)(l) of the Bankruptcy Code, as
determined by the Bankruptcy Court, or the admission in writing of such
Member's inability to pay its debts as they become due.

         "BANKRUPTCY CODE" means the United States Bankruptcy Code, 11 U.S.C.
101 et seq.

         "BASIC CABLE" has the meaning currently or hereafter commonly
understood in the television industry, but will also include for all purposes
of this Agreement any broadcast or other transmission (whether by satellite or
otherwise) to television sets or other television devices, now or hereafter
known, of a program service (other than any free television terrestrial
broadcast station) (a) that is included as part of a package of program
services for which members of the public pay a periodic fee


                                       2
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for the right to receive such package of program services, and (b) for which
program service a separate fee is not generally charged for the right to
receive the particular service in question.

         "BRANDED" means a television service or a Program or block of Programs
where PEGI's or any PEGI Affiliate's name or trademarks are used either in
connection or close affiliation with the service or the Program or block of
Programs, or any related advertising.

         "BUSINESS PLAN" has the meaning set forth in Section 6.1.

         "CAPITAL ACCOUNT" means with respect to any Member the capital account
that the Company establishes and maintains for such Member pursuant to Section
3.4 and Article 1 of EXHIBIT B.

         "CAPITAL CALL" has the meaning set forth in Section 3.3.

         "CAPITAL CALL DUE DATE" has the meaning set forth in Section 3.3.

         "CAPITAL CONTRIBUTION" means the total value of cash and fair market
value of property (including promissory notes or other obligation to contribute
cash or property) contributed and/or services rendered or to be rendered to the
Company by Members, other than the Venus Contribution.

         "CARIBBEAN BASIN" means the following territories: Anguilla, Antigua
and Barbuda, Aruba, Barbados, Bermuda, The British Virgin Islands, The Cayman
Islands, Cuba, Dominica, Dominican Republic, Grenada, Haiti, Jamaica,
Montserrat, St. Kitts & Nevis, St. Lucia, St. Vincent and the Grenadines,
Trinidad and Tobago, and the Turks and Caicos Islands.

         "CHANNELS" means Playboy TV - Latin America, the television program
service based on PEGI's Playboy television network as programmed by PEGI in the
United States from time-to-time, the Spice Networks and Venus, and any other
television program service added from time-to-time, in each case, as provided
for reception within the Territory by PTVLA in accordance with this Agreement
and the Program Supply Agreement (each, a "CHANNEL").

         "CISNEROS GROUP" means (i) Gustavo A. Cisneros, Ricardo J. Cisneros,
their respective wives and direct descendants or any entity, including trusts,
in which Gustavo A. Cisneros and/or Ricardo J. Cisneros or their respective
wives and direct descendants hold, directly or indirectly, at least 50.1% of
the economic benefit or the total shares, participations or interests in
(however designated) corporate stock, partnership interests, limited liability
company interests, or any equivalents thereof of such entity, and which is
controlled, directly or indirectly, by any of such persons; or (ii) any entity,
including trusts, which is controlled, directly or indirectly, by any of
Gustavo A. Cisneros and/or Ricardo J. Cisneros or their respective wives and
direct descendants.

         "CLAIM" has the meaning set forth in Section 15.2.

         "CLAXSON" has the meaning set forth in the recitals.

         "CLAXSON GUARANTEE OBLIGATION" has the meaning set forth in Section
12.2.3.

         "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, the provisions of succeeding law, and to the extent applicable, the
Treasury Regulations.

         "COMPANY" has the meaning set forth in the recitals.

         "COMPANY PRODUCED PROGRAMMING" shall mean Programs produced by the
Company for exhibition on the Channels.

         "COMPANY PRODUCED PROGRAMMING BUDGET" has the meaning set forth in
Section 6.2.1.


                                       3
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         "CORPORATIONS CODE" means the California Corporations Code, as amended
from time to time, and the provisions of succeeding law.

         "CPI" means the Consumer Price Index for all Urban Consumers as
released by the Bureau of Labor Statistics, U.S. Department of Labor. If the
Bureau of Labor Statistics, U.S. Department of Labor (i) substantially revises
the methodology (in contrast to benchmark adjustments or other corrections of
previously published data), (ii) discontinues publication of any of the data
referred to above or (iii) temporarily discontinues publication of any of the
data referred to above, the parties shall select a substitute for the revised
or discontinued data, in order to provide substitute data to lead to the same
adjustment result, insofar as possible, as would have been achieved by
continuing the use of the original data as it may have fluctuated had it not
been revised or discontinued.

         "DISSOLUTION EVENT" has the meaning set forth in Section 12.2.

         "DISTRIBUTABLE CASH" means the amount of cash that the Management
Committee deems available for distribution to the Members, taking into account
all debts, liabilities and obligations of the Company then due and amounts that
the Management Committee deems necessary to place into reserves for customary
and usual claims with respect to the Company's business.

         "DISTRIBUTION AGREEMENT" means that certain Amended Distribution
Agreement, dated as of December 23, 2002 and effective as of April 1, 2002,
between the Company and PEGI.

         "DTM" has the meaning set forth in Section 3.6.

         "DTM ARRANGEMENT" has the meaning set forth in Section 3.6.

         "EBITDA" means, for any period, the consolidated earnings from
continuing operations of the Company and its Subsidiaries for such period
before interest expense, income taxes, the cumulative effect of changes in
accounting principle, depreciation of property and equipment, amortization of
intangible assets, amortization of investments in entertainment programming and
amortization of deferred financing fees.

         "ECONOMIC INTEREST" means a Member's share of one or more of the
Company's Net Income, Net Losses, and distributions of the Company's assets
pursuant to this Agreement and the Act, but shall not include any other rights
of a Member, including, but not limited to, the right to vote or participate in
the management, or except as provided in Section 17106 of the Corporations
Code, any right to information concerning the business and affairs, of the
Company.

         "EFFECTIVE DATE" is defined in the preamble.

         "EXISTING PTV BV AGREEMENTS" has the meaning set forth in Section
9.10(a).

         "EXISTING PTV US AGREEMENTS" has the meaning set forth in Section
9.10(a).

         "FAIR MARKET VALUE" with respect to the Company or any asset thereof
means the value determined pursuant to EXHIBIT C.

         "FISCAL YEAR" means the Company's fiscal year, which shall be the
calendar year.

         "FORMER MEMBER" has the meaning set forth in Section 10.1.

         "FORMER MEMBER'S INTEREST" has the meaning set forth in Section 10.1.

         "FULLY-PARTICIPATING MEMBER" has the meaning set forth in Section
3.3.1.

         "GAAP" has the meaning set forth in Section 11.1.


                                       4
<PAGE>

         "GENERAL MANAGER" has the meaning set forth in Section 5.4.2.

         "IBERIA" means Spain, Portugal and Andorra.

         "INITIAL OPERATING AGREEMENT" has the meaning set forth in the
recitals.

         "INITIAL OPTION PERCENTAGE" has the meaning set forth in Section 9.8.

         "LIFFORD" has the meaning set forth in the preamble.

         "LIFFORD MANAGERS" has the meaning set forth in Section 5.2.1.

         "LIFFORD US" has the meaning set forth in Section 9.10(b).

         "MAJOR CURRENCY" as used herein shall mean US Dollars, UK Pounds,
Euros or Japanese Yen.

         "MAJORITY INTEREST" means one or more Percentage Interests of Members
that taken together exceed fifty percent (50%) of the aggregate of all
Percentage Interests.

         "MANAGEMENT CO." means Claxson USA, Inc., a Florida corporation
(formerly known as Cisneros Television Services Inc.)

         "MANAGEMENT COMMITTEE" has the meaning set forth in Section 5.1.1.

         "MANAGEMENT SERVICES AGREEMENT" means the Management Services
Agreement entered into as of November 1, 1996 between the Company and
Management Co. relating to the provision of services by Management Co., as
amended by the First Amendment to the Management Services Agreement dated as of
August 31, 1999, and as further amended by the Amended and Restated Management
Services Agreement dated as of the date hereof.

         "MANAGER" has the meaning set forth in Section 5.2.1.

         "MARKETABLE SECURITY" shall mean common stock or an American
Depositary Receipt that is listed for trading on the New York Stock Exchange,
the NASDAQ National Market System, or the London Stock Exchange.

         "MARKETING BUDGET" has the meaning set forth in Section 6.2.1.

         "MEDIA" means all forms of television exhibition, transmission and
distribution whether now existing or developed in the future and whether on a
subscription, pay-per-view, video-on-demand or free basis, including but not
limited to the following: (i) conventional VHF or UHF television broadcast,
(ii) Basic Cable and pay cable, (iii) "over the air pay" subscription
television (STV), (iv) direct broadcasting by satellite (DBS), (v) master
antenna television systems (MATV), (vi) multipoint distribution services (MDS),
(vii) multichannel multipoint distribution services (MMDS), (viii) satellite
master antenna television systems (SMATV), and (ix) microwave transmission.
Except as otherwise provided in the Program Supply Agreement, Media shall
exclude Streaming.

         "MEMBER" means each Person who (a) is an initial signatory to this
Agreement or has been admitted to the Company as a Member in accordance with
this Agreement and (b) has not resigned, withdrawn, been expelled or dissolved.

         "MEMBER OFFEREES" has the meaning set forth in Section 9.3.

         "MEMBERSHIP INTEREST" means a Member's entire interest in the Company
including the Member's Economic Interest, the right to vote on or participate
in the management, and the right to receive information concerning the business
and affairs, of the Company.


                                       5
<PAGE>

         "NEGOTIATED PURCHASE PRICE" has the meaning set forth in Section 9.3.

         "NET INCOME" and "NET LOSSES" have the meanings set forth in Article 2
of EXHIBIT B hereto.

         "NON-CONTRIBUTING MEMBER" has the meaning set forth in Section 3.3.1.

         "NOTICE" has the meaning set forth in Section 16.2.

         "OFFER NOTIFICATION" has the meaning set forth in Section 9.3.

         "OFFERED MEMBERSHIP INTEREST" has the meaning set forth in Section
9.3.

         "OPTIONAL CAPITAL CONTRIBUTION" has the meaning set forth in Section
3.3.

         "PEGI" has the meaning set forth in the preamble.

         "PEGI BUY-UP OPTION" has the meaning set forth in Section 9.8.

         "PEGI MANAGERS" has the meaning set forth in Section 5.2.1.

         "PEI" has the meaning set forth in the recitals.

         "PEI REPRESENTATIVES" has the meaning set forth in Section 11.2.4.

         "PEI STOCK" has the meaning set forth in Section 9.8(b).

         "PERCENTAGE INTEREST" means the percentage of a Member set forth
opposite the name of such Member under the column "Member's Percentage
Interest" in EXHIBIT A hereto, as such percentage may be adjusted from time to
time pursuant to the terms of this Agreement.

         "PERSON" means an individual, general partnership, limited
partnership, limited liability company, corporation, trust, estate, real estate
investment trust, association or any other entity.

         "PROGRAM" or "PROGRAMMING" means any television program which is, or
may be scheduled to be, broadcast or transmitted on the Channels.

         "PROGRAM SUPPLY AGREEMENT" means the Amended Program Supply Agreement,
executed concurrently herewith and effective as of the Effective Date, between
PEGI and the Company with respect to the supply of programming for the Channels
and the license of certain trademarks.

         "PROPOSED PURCHASER" has the meaning set forth in Section 9.4(a).

         "PTV BV" has the meaning set forth in Section 9.10(a).

         "PTV HOLDINGS" has the meaning set forth in Section 9.10(a).

         "PTV UK" has the meaning set forth in Section 3.6.

         "PTV US" has the meaning set forth in Section 9.10(a).

         "PTV US AFFILIATION AGREEMENT" means that certain Affiliation
Agreement, dated as of December 23, 2002 and effective as of April 1, 2002, by
and between the Company and PTV US.

         "PURCHASE NOTIFICATION" has the meaning set forth in Section 9.3.

                                       6
<PAGE>

         "REFERENCE RATE" means the reference rate as set forth from time to
time by The Bank of America Corporation.

         "RELATED DOCUMENTS" means those agreements set forth on Exhibit H
attached hereto.

         "REMAINING MEMBERS" has the meaning set forth in Section 10.1.

         "REMEDIABLE BREACH" has the meaning set forth in Section 12.2.2(b).

         "RENEWAL" has the meaning set forth in Section 5.4.5.

         "REQUIRED EXPENDITURE ADJUSTMENT" has the meaning set forth in Section
6.2.3.

         "RESPONSE" has the meaning set forth in Section 16.2.

         "RESTRUCTURING" has the meaning set forth in the recitals.

         "RULES" has the meaning set forth in Section 16.3.

         "SEC" means the U.S. Securities and Exchange Commission.

         "SECOND OPTION PERCENTAGE" has the meaning set forth in Section 9.8.

         "SECURITIES ACT" has the meaning set forth in Section 15.1.6.

         "SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

         "SELLING MEMBER" has the meaning set forth in Section 9.3.

         "SHORTFALL" has the meaning set forth in Section 6.2.3.

         "SPICE NETWORKS" means collectively, Spice, Spice 2, Spice Platinum,
The Hot Zone, The Hot Network, Vivid TV, and successor networks, if any, as
PEGI may include from time-to-time, as programmed by PEGI.

         "STREAMING" means ***.

         "SUBSEQUENT TRANSFER OFFER PERIOD" has the meaning set forth in
Section 9.3.

         "SUBSEQUENT THIRD-PARTY TRANSFER OFFER PERIOD" has the meaning set
forth in Section 9.4(b).

         "SUBSIDIARY" means, with respect to any Person at any time, any
corporation, partnership, limited liability company or other entity, a majority
of the equity interests of which shall, at the time as of which any
determination is made, be owned, controlled or held by such Person either
directly or through Subsidiaries of such Person.

         "TAX MATTERS MEMBER" shall be Lifford or such Member's successor as
designated pursuant to Section 11.8.

         "TERM" has the meaning set forth in Section 12.1.

         "TERMS" has the meaning set forth in Section 9.3.

         "TERRITORY" means (a) Mexico and each country comprising Central and
South America; (b) Iberia; (c) the Caribbean Basin; and (d) the territories and
possessions of each of the foregoing, if any.

         "THIRD PARTY" has the meaning set forth in Section 17.13.2(a).

         "THIRD PARTY BUYER" has the meaning set forth in Section 9.3.


                                                    FOIA Confidential Treatment
                                       7
<PAGE>

         "THIRD PARTY TRANSFER NOTICE" has the meaning set forth in Section
9.4(a).

         "THIRD-PARTY TRANSFER OFFER PERIOD" has the meaning set forth in
Section 9.4(b).

         "TRANSFER" has the meaning set forth in Section 9.1.

         "TRANSFER OFFER PERIOD" has the meaning set forth in Section 9.3.

         "TREASURY REGULATIONS" has the meaning set forth in EXHIBIT B.

         "UNBRANDED" means a television service or a Program or block of
Programs where PEGI's or any PEGI Affiliate's name or trademarks are not used
either in connection or close affiliation with the service or the Program or
block of Programs or any related advertising other than in customary
production, logo credits or end sequences of such Program or block of Programs,
for use solely in the credit block in advertising for such Program, where
applicable.

         "VENUS" means that certain premium and pay-per-view adult content
channel, launched in 1994, and owned and distributed throughout Latin America
by Claxson and its Subsidiaries and Affiliates.

         "VENUS ARGENTINA" has the meaning set forth in Section 9.11.

         "VENUS ASSETS" has the meaning set forth in the Venus Contribution
Agreement.

         "VENUS CONTRIBUTION" has the meaning set forth in the recitals.

         "VENUS CONTRIBUTION AGREEMENT" means that certain Venus Contribution
Agreement dated as of December 23, 2002, by and among Claxson, Lifford, the
Company and PEGI.

         "VENUS ENTITIES" has the meaning set forth in Section 9.11.

         "VENUS INTERNATIONAL" has the meaning set forth in Section 9.11.

         "WEB SITE REVENUE SHARE AGREEMENT" means the Web Site Revenue Share
Agreement, executed concurrently herewith and effective as of the Effective
Date, by and among Playboy.com, Inc., a Delaware corporation, Claxson and
PTVLA.

         "WITHDRAWAL DISSOLUTION EVENT" means, with respect to any Member, one
or more of the following: the expulsion, Bankruptcy, dissolution or occurrence
of any other event that terminates the continued membership of any Member
unless the other Member(s) consent to continue the business of the Company
pursuant to Section 10.1.

         "ZAGASSE" has the meaning set forth in Section 9.10(b).

                                   ARTICLE 2
                             ORGANIZATIONAL MATTERS

         2.1      FORMATION. Pursuant to the Act, the Members formed a limited
liability company under the laws of the State of California by filing the
Articles with the California Secretary of State and entering into the Initial
Operating Agreement. The rights and liabilities of the Members shall be
determined pursuant to the Act and this Agreement. To the extent that the
rights or obligations of any Member are different by reason of any provision of
this Agreement than they would be in the absence of such provision, this
Agreement shall, to the extent permitted by the Act, control.

         2.2      NAME. The name of the Company shall be "Playboy TV - Latin
America, LLC." The Management Committee shall be permitted to change the name
of the Company to any of the names set forth on Exhibit F attached hereto at
any time, or to any other name which does not appear on Exhibit F


                                       8
<PAGE>

with the approval of the PEGI Managers, within twenty-four (24) months from the
date hereof. The business of the Company may be conducted under such name or,
upon compliance with applicable laws, any other name set forth on Exhibit F.
The General Manager shall file any fictitious name certificates and similar
filings, and any amendments thereto, that the Management Committee considers
appropriate or advisable. Notwithstanding the foregoing, if there is no PEGI
Manager on the Management Committee or PEGI is no longer a Member, at PEGI's
request the Articles shall be amended to change the name of the Company to a
name that does not contain or utilize any Playboy trademarks or any confusingly
similar designation or mark.

         2.3      TERM. The term of this Agreement shall be co-terminus with
the period of duration of the Company provided in the Articles, unless extended
or sooner terminated as hereinafter provided.

         2.4      OFFICE AND AGENT. The Company shall continuously maintain an
office and registered agent in the State of California as required by the Act.
The principal office of the Company shall be as the Management Committee may
determine. The Company also may have such offices, anywhere within and without
the State of California, as the Management Committee from time to time may
determine, or the business of the Company may require. The registered agent
shall be as stated in the Articles or as otherwise determined by the Management
Committee.

         2.5      ADDRESSES OF THE MEMBERS, THE MANAGERS AND THE GENERAL
MANAGER. The respective addresses of the Members are set forth on EXHIBIT A,
which exhibit will be modified from time to time to reflect changes therein.
The respective addresses of the Managers and the General Manager shall be
maintained in the books of the Company and made available to any Member on
request.

         2.6      PURPOSE OF COMPANY. The purpose of the Company is to engage
in any lawful activity for which a limited liability company may be organized
under the Act. Notwithstanding the foregoing, without the majority approval of
the Management Committee and subject to the veto right under Section 5.1.2(a),
the Company shall not engage in any business other than (i) the Adult-Oriented
Television Business in the Territory; (ii) licensing programming to third
parties in the Territory, except for Company Produced Programming, which can be
distributed worldwide to PEGI or one of its Affiliates pursuant to the terms of
the Distribution Agreement; (iii) development and marketing of Adult-Oriented
commercial websites, subject to any restrictions set forth in the Web Site
Revenue Share Agreement, targeted to Spanish and Portuguese language audiences
in the Territory, including the PTVLA websites, Venus commercial website and
Spice websites; and (iv) such other activities ancillary and related thereto as
may be necessary, advisable or appropriate, in the reasonable opinion of the
Management Committee to further the businesses set forth in clauses (i) - (iii)
above. Notwithstanding any territorial or other restrictions contained in this
Agreement, the parties hereto acknowledge that the distribution of the Channels
in Puerto Rico in the Spanish language via DirecTV Latin America, LLC, so long
as such distribution is conducted solely in Puerto Rico in Spanish via DTH,
shall not be deemed to violate any such territorial restrictions.

                                   ARTICLE 3
                             CAPITAL CONTRIBUTIONS

         3.1      CAPITAL CONTRIBUTION. Each Member has contributed the amounts
set forth on EXHIBIT A as of the Effective Date. EXHIBIT A shall be revised to
reflect any additional contributions contributed in accordance with Section
3.3. Notwithstanding anything to the contrary contained herein, the parties
agree and acknowledge that the Venus Contribution shall have no impact on the
Capital Accounts of Lifford and PEGI.


                                       9
<PAGE>

         3.2      ADDITIONAL CAPITAL CONTRIBUTIONS. No Member shall be required
to make any additional Capital Contributions.

         3.3      OPTIONAL CAPITAL CONTRIBUTIONS. The Management Committee may
reasonably determine in good faith from time to time, that additional Capital
Contributions from the Members (each, an "OPTIONAL CAPITAL CONTRIBUTION") are
necessary or appropriate for the conduct of the Company's business, including
without limitation, expansion or diversification thereof. Upon the Management
Committee making such a determination, the Company shall provide written notice
of such request for additional Capital Contributions (a "CAPITAL CALL") to each
Member not less than thirty (30) days prior to the date such Optional Capital
Contributions are due (the "CAPITAL CALL DUE DATE"). Such notice shall set
forth the aggregate amount of the Capital Call, the purposes for which such
Capital Contributions will be used and the date on which Optional Capital
Contributions are due. No Member shall be obligated to make any such Capital
Contributions. However, each Member shall have the opportunity, but not the
obligation, to participate in a Capital Call on a pro rata basis in accordance
with its Percentage Interest by making an Optional Capital Contribution. In
addition, a Member may elect to make its Optional Capital Contribution
conditional (a "CONDITIONAL CAPITAL CONTRIBUTION") upon the other Members
making their respective Optional Capital Contributions, in which event such
Conditional Capital Contribution shall be deemed made, if at all, only at such
time as the other Members make their respective Optional Capital Contributions.
If a Member elects to make a Conditional Capital Contribution and the other
Members decline or fail to make their respective Optional Capital
Contributions, then the Company shall immediately return the Conditional
Capital Contribution to the Member making such Conditional Capital Contribution
and such Conditional Capital Contribution shall be deemed never to have been
made. Immediately following any Optional Capital Contribution by a Member, the
Percentage Interests shall be adjusted to reflect the new relative proportions
of the Capital Accounts of the Members. Each of Lifford and PEGI will have the
right, by written notice to the General Manager and the other Members at least
five (5) business days prior to the Capital Call Due Date, to fund its Optional
Capital Contributions through retention by the Company of the fees payable
under the Related Documents then accrued, to the extent sufficient to cover
such requirements, subject to the timely review and approval of the other
Members of the offset amount.

                  3.3.1    If a Member (a "NON-CONTRIBUTING MEMBER") does not
make an Optional Capital Contribution equal to its pro rata share of the
Capital Call by the Capital Call Due Date, the Company shall notify each Member
that made an Optional Capital Contribution equal to its pro rata share of such
Capital Call (each, a "FULLY-PARTICIPATING MEMBER") that such
Fully-Participating Member may, within the fourteen (14) day period from the
date of such notice, increase its Optional Capital Contribution to the Company
to cover amounts that the Non-Contributing Member declined to contribute on a
pro rata basis, in which case the Percentage Interests of the Members shall be
adjusted to reflect the new relative proportions of the Capital Accounts of the
Members.

         3.4      CAPITAL ACCOUNTS. The Company has established an individual
Capital Account for each Member in accordance with Article 1 of EXHIBIT B
hereto. If a Member transfers all or a part of its Membership Interest in
accordance with this Agreement, such Member's Capital Account attributable to
the transferred Membership Interest shall carry over to the new owner of such
Membership Interest pursuant to Treasury Regulations Section
l.704-l(b)(2)(iv)(l). Each Member's Capital Account as of the Effective Date is
set forth in EXHIBIT A hereto.

         3.5      NO INTEREST. No Member shall be entitled to receive any
interest on its Capital Contributions.

         3.6      IBERIA AGREEMENTS. The parties acknowledge that Playboy TV UK
Limited ("PTV UK") has entered into certain agreements through Desarrollos
Tecnicos Multimedia s.l. ("DTM") as


                                      10
<PAGE>

listed on EXHIBIT D hereto, relating to the distribution of Spice Platinum and
The Adult Channel in Iberia (the "DTM ARRANGEMENT"). Promptly following the
Closing, the Company shall have the right to determine the following:

                  (1)      Whether to permit DTM to continue to enter into
         agreements on behalf of PTV UK and its Affiliates in the Territory;
         and

                  (2)      Whether to require that the agreements that DTM has
         entered into on behalf of PTV UK and its Affiliates be transferred to
         the Company or terminated, and PTVI or one of its Affiliates shall
         bear all costs associated with such termination.

The Company shall inform PEGI of its decision with regard to these matters
promptly, and promptly thereafter PEGI shall cause PTV UK to use its
commercially reasonable efforts to implement the decision of the Company. If
the Company elects to cause the DTM Arrangement to be transferred to the
Company, such transfer shall be made for no additional consideration. In the
event that agreements required by the Company to be transferred to the Company
are not assignable according to their terms, PEGI shall cause PTV UK to use its
commercially reasonable efforts to terminate such agreements as promptly as
practicable in accordance with the terms of such agreements, and PTVI or one of
its Affiliates shall bear all costs associated with such termination. Until
such time as the transfer of the DTM Arrangement to the Company is complete,
PEGI shall pay over to the Company all of the net revenues that it receives
from the DTM Arrangement, less a distribution fee of twenty percent (20%) of
such revenues. In the event that the Company wishes to receive the Spice
Platinum feed or The Adult Channel feed for distribution through the DTM
Arrangement in Iberia following the transfer of such agreements, the Company
and PEGI shall negotiate in good faith the terms under which such feed will be
supplied, taking into account the revenues likely to be derived by the Company
from such feed and the fixed costs of Spice Platinum and The Adult Channel.

                                   ARTICLE 4
           ALLOCATIONS OF NET INCOME AND NET LOSSES AND DISTRIBUTIONS

         4.1      ALLOCATIONS OF NET INCOME AND NET LOSS. Net Income and Net
Loss shall be allocated to the Members in accordance with Article 1 of EXHIBIT
B.

         4.2      DISTRIBUTION OF DISTRIBUTABLE CASH BY THE COMPANY. Subject to
applicable law and any limitations contained elsewhere in this Agreement, the
Management Committee shall cause the Company to distribute Distributable Cash
on a quarterly basis to the Members, which distributions shall be made to the
Members in proportion to their Percentage Interests as of the end of the
relevant quarter.

         4.3      FORM OF DISTRIBUTION. Except as provided in Section 12.7, a
Member, regardless of the nature of the Member's Capital Contribution, has no
right to demand and receive any distribution from the Company in any form other
than money. No Member may be compelled to accept from the Company a
distribution of any asset in kind in lieu of a proportionate distribution of
money being made to other Members. Except upon a dissolution and the winding up
of the Company, no Member may be compelled to accept a distribution of any
asset in kind.


                                      11
<PAGE>

         4.4      RESTRICTION ON DISTRIBUTIONS.

                  4.4.1    RESTRICTION. No distribution shall be made if, after
giving effect to the distribution:

                  (a)      The Company would not be able to pay its debts as
they become due in the usual course of business.

                  (b)      The Company's total assets would be less than the
sum of its total liabilities.

                  4.4.2    METHOD OF DETERMINATION. The Management Committee
may base a determination that a distribution is not prohibited on any of the
following: (i) financial statements prepared on the basis of accounting
practices and principles that are generally consistent with those used to
prepare the Company's audited financial statements; (ii) a fair valuation; or
(iii) any other method that is reasonable in the circumstances.

                  Except as provided in Section 17254(e) of the Corporations
Code, the effect of a distribution is measured as of the date the distribution
is authorized if the payment occurs within one hundred twenty (120) days after
the date of authorization, or the date payment is made if it occurs more than
one hundred twenty (120) days of the date of authorization.

                  4.4.3    PERSONAL LIABILITY. A Member or Manager who votes
for a distribution in violation of this Agreement or the Act is personally
liable to the Company for the amount of the distribution that exceeds what
could have been distributed without violating this Agreement or the Act if it
is established that the Member or Manager did not act in compliance with the
terms of this Agreement. Any Member or Manager who is so liable shall be
entitled to compel contribution from (a) each other Member or Manager who also
is so liable and (b) each Member for the amount the Member received with
knowledge of facts indicating that the distribution was made in violation of
this Agreement or the Act.

         4.5      RETURN OF DISTRIBUTIONS. Except for distributions made in
violation of the Act or this Agreement, no Member shall be obligated to return
any distribution to the Company or pay the amount of any distribution for the
account of the Company or to any creditor of the Company. The amount of any
distribution returned to the Company by a Member or paid by a Member for the
account of the Company or to a creditor of the Company shall be added to the
account or accounts from which it was subtracted when it was distributed to the
Member.

         4.6      WITHHOLDING. Notwithstanding any other provision of this
Agreement, the Management Committee is authorized to take any action that it
determines to be necessary or appropriate to cause the Company to comply with
any federal, state, local or foreign withholding requirement with respect to
any payment, allocation or distribution by the Company to any Member or other
person. Any amount withheld pursuant to the preceding sentence shall be treated
as a distribution to the Member to which such amount would have been
distributed under this Agreement but for the withholding. If any such
withholding requirement with respect to any Member exceeds the amount
distributable to such Member under this Agreement, or if any such withholding
requirement was not satisfied with respect to any item previously paid,
allocated or distributed to such Member, such Member or any successor or
assignee with respect to such Member's interest hereby indemnifies and agrees
to hold harmless the other Members and the Company for such excess amount or
such unsatisfied withholding requirement, as the case may be, and any penalties
assessed on such amounts.


                                      12
<PAGE>

                                   ARTICLE 5
                     MANAGEMENT AND CONTROL OF THE COMPANY

         5.1      THE MANAGEMENT COMMITTEE.

                  5.1.1    GENERAL SCOPE OF AUTHORITY. The business and affairs
of the Company shall be managed by a management committee of the Company (the
"MANAGEMENT COMMITTEE") appointed and constituted in the manner provided in
Section 5.2 hereof. The Management Committee shall be responsible for all
aspects of the operations and development of the Company and, except as
otherwise expressly provided for in this Agreement, the Management Committee
shall have exclusive authority and full discretion with respect to the
management of the business of the Company and shall have the exclusive right,
power and authority to cause the Company to do, or cause to be done, all acts
and actions which in its sole judgment are necessary, proper, convenient or
desirable in order to operate and conduct the business of the Company and to
carry out and fulfill the purposes of the Company.

                  5.1.2    VETO RIGHTS. Notwithstanding anything to the
contrary contained in this Agreement: (i) the Lifford Managers may (so long as
Lifford or any of its Affiliates is a Manager) and the PEGI Managers may (so
long as PEGI or any of its Affiliates is a Manager) veto any decision of the
Management Committee to perform, or cause the Company to perform, any of the
acts or transactions described in subsections (d) and (h) below; and (ii) the
Lifford Managers may (so long as Lifford and its Affiliates hold, in aggregate,
Percentage Interests equal to at least 10%) and the PEGI Managers may (so long
as PEGI and its Affiliates hold, in aggregate, Percentage Interests equal to at
least 10%) veto any decision of the Management Committee to perform, or cause
the Company to perform, any of the following acts or transactions:

                  (a)      any material change in the basic business of the
Company as defined in Section 2.6;

                  (b)      any material acquisition or sale by the Company of
any business (whether by asset purchase, stock purchase, merger or other
business combination);

                  (c)      any borrowing by the Company or making or
guaranteeing loans by the Company or incurrence or guaranteeing of obligations
of others by the Company in the aggregate at any time exceeding the lesser of
(i) one times EBITDA of the Company for the most recent Fiscal Year or (ii)
$5.0 million; provided, however, that the Company may not pledge, transfer,
assign or otherwise encumber its rights under any agreements with PEI (or its
Affiliates), including without limitation, any of the Related Documents, in
connection with the foregoing;

                  (d)      the sale of all or substantially all of the assets
of the Company or the merger, consolidation or reorganization of the Company
with or into another Person;

                  (e)      the acceptance of any additional capital other than
Optional Capital Contributions from any Member pursuant to Section 3.3;

                  (f)      the issuance of Membership Interests except in
connection with an Optional Capital Contribution for a Member pursuant to
Section 3.3;

                  (g)      other than pursuant to the Related Documents,
transactions with any Member or any Affiliate of any Member;


                                      13
<PAGE>

                  (h)      commencement by the Company of a voluntary case
under the Bankruptcy Code or any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect; or consent by the Company to the entry
of an order for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case under any such law; or consent by the
Company to the appointment of or taking of possession by a receiver, trustee or
other custodian for all or substantially all of its property; or making by the
Company of a general assignment for the benefit of creditors;

                  (i)      any amendment, modification or waiver relating to a
Related Document;

                  (j)      any distribution by the Company on the Membership
Interests other than distributions of Distributable Cash;

                  (k)      loans by the Company to any Member or any Affiliate
of any Member;

                  (l)      the selection or replacement of the Company's
accountants if the selected or replacement accountants are not one of the
following firms: PricewaterhouseCoopers, LLP, KPMG, LLP, Ernst & Young, LLP or
Deloitte & Touche LLP; or

                  (m)      (i) filing any tax return or (ii) making any tax
election or taking any position with respect to any examination audit or
proceeding by a taxing authority that could have an adverse impact on any
Member or the Company.

         5.2      MEMBERS OF THE MANAGEMENT COMMITTEE; APPOINTMENT AND REMOVAL;
VOTING.

                  5.2.1    For so long as Lifford (or its Affiliates) and PEGI
(or its Affiliates) are the only Members, the Management Committee shall
consist of five members, three representatives selected by Lifford (the
"LIFFORD MANAGERS") and two representatives selected by PEGI (the "PEGI
MANAGERS"). The number of Managers shall not be amended without the approval of
both the Lifford and the PEGI Managers. No other Member shall have the right to
appoint Managers. Each member of the Management Committee is referred to as a
"MANAGER", and, collectively, as the "MANAGERS". A Manager need not be a
resident of the State of California or a citizen of the United States. To the
fullest extent permitted by law, no Manager shall be deemed an agent or
sub-agent of the Company. Each Member, by execution of this Agreement, agrees
to, consents to, and acknowledges the delegation of powers and authority to
such Managers and the Management Committee, and to the actions and decisions of
such Managers and the Management Committee within the scope of such Manager's
and Management Committee's authority as provided herein. No Manager shall have
the authority in his capacity as a Manager to enter into any transaction on
behalf of the Company.

                  5.2.2    Each of Lifford and PEGI shall have the absolute and
unconditional right from time to time to designate the Managers appointed by it
by delivery of written notice to the Members. A Manager may be removed with or
without cause at the sole discretion of the Member that appointed that Manager
by delivery of written notice to the other Members. A vacancy on the Management
Committee may only be filled by the Member that originally appointed the
Manager whose death, disability, removal or resignation created such vacancy.
Each of Lifford and PEGI shall also have the right to appoint alternates to
each Manager by designating the name of such alternates in a written notice to
the other Members. In case of the absence of a Manager, any individual
designated as an alternate for that Manager shall have the right and power to
exercise all rights and powers of the absent Manager.

                  5.2.3    The Lifford Managers and PEGI Managers will be
designated by each such Member within thirty days (30) days after the date
hereof by written notice to the other Member and to


                                      14
<PAGE>

the Company. Such individuals will serve on the Management Committee until
their death, disability, removal or resignation.

                  5.2.4    Except as provided in Section 5.1.2 or as otherwise
specifically provided in this Agreement, the affirmative vote of Managers
holding the Majority Interests shall be required for any decision or approval
of the Management Committee or to cause the Company to engage in any act or
transaction. The Managers shall have voting power in proportion to the ratio of
Percentage Interests held by the Member appointing them. All Managers appointed
by a Member will collectively exercise such voting power and each Member
entitled to designate Managers will designate one Manager to vote on behalf of
all Managers appointed by such Member in the event of a disagreement among the
Managers appointed by such Member.

         5.3      MEETINGS OF THE MANAGEMENT COMMITTEE.

                  5.3.1    Regular quarterly meetings of the Management
Committee shall be held without call or notice at such time as shall from time
to time be fixed by standing resolution of the Management Committee. Special
meetings of the Management Committee may be held at any time whenever called by
any Manager. Written Notice of a special meeting of the Management Committee
shall be given to the other Managers by the Manager calling the meeting at
least seventy-two (72) hours before such special meeting.

                  5.3.2    All meetings of the Management Committee shall be
held at such location as the Management Committee shall agree by majority vote;
provided, however, at least one (1) meeting per year shall be held in Miami or
Los Angeles as the Management Committee shall agree by majority vote. The
presence of at least one Lifford Manager and at least one PEGI Manager at a
duly noticed meeting of the Management Committee shall constitute a quorum for
the transaction of business; provided, however, that with respect to the taking
of any action for which the vote of any Managers may be excluded or any matter
for which a unanimous vote is required to take action (e.g., pursuant to
Section 5.1.2), the presence of at least one Manager appointed by each Member
whose Managers are entitled to vote on such action shall constitute a quorum
for purpose of taking such action. Managers may participate in a meeting
through the use of conference telephone or similar communications equipment,
and such Managers shall be considered present in person as long as all Managers
participating in such meeting can hear one another.

                  5.3.3    Every act of the Management Committee taken at any
meeting of the Management Committee, however called and noticed or wherever
held, shall be as valid as though made or performed at a meeting duly held
after regular call and notice, if a quorum is present and if, either before or
after the meeting, each of the Managers not present or who, though present, has
prior to the meeting or at its commencement, protested the lack of proper
notice to such Manager, signs a written waiver of notice or a written consent
to holding such meeting or approval of the minutes thereof.

                  5.3.4    Any action required or permitted to be taken at any
meeting of the Management Committee may be taken without a meeting if one
Lifford Manager and one PEGI Manager consent thereto in writing, and the
writing is filed with the minutes of proceedings of the Management Committee.

         5.4      DELEGATION OF AUTHORITY; GENERAL MANAGER AND OTHER OFFICERS.

                  5.4.1    GENERAL POWER TO DELEGATE AUTHORITY. The Management
Committee may delegate the right, power and authority to manage the day-to-day
business, affairs, operations and activities of the Company to any officer of
the Company or Management Co. pursuant to the Management


                                      15
<PAGE>

Services Agreement, or to any other Person with the prior approval of the PEGI
Managers, subject to the ultimate direction, control and supervision of the
Management Committee; provided, however, that no officer or other Person,
including without limitation Management Co., shall be authorized to take any
action or engage in any activity where unanimous approval of the Management
Committee is required or where the approval of a specified Person is required,
without first obtaining the required approvals.

                  5.4.2    THE GENERAL MANAGER. The Members intend that the
Management Committee delegate the management of the day-to-day business,
affairs, operations and activities of the Company to a general manager (the
"GENERAL MANAGER"). Subject to the supervisory powers of the Management
Committee, the General Manager shall have general and active management of the
business of the Company and shall see that all orders and resolutions of the
Management Committee are carried into effect. The General Manager shall have
the power to execute any agreements and instruments on behalf of the Company,
except where the execution thereof shall be expressly reserved by the
Management Committee or delegated by the Management Committee to some other
officer or agent of the Company. The General Manager shall have such other
powers and duties as may be prescribed by the Management Committee or this
Agreement.

                  5.4.3    DUTIES OF THE GENERAL MANAGER. Unless and until any
of the following duties are delegated to another officer by the Management
Committee, the General Manager shall:

                  (a)      attend all meetings of the Management Committee and
all meetings of the Members, unless directed not to do so by the Management
Committee, and record all the proceedings of the meetings in a book to be kept
for that purpose;

                  (b)      give, or cause to be given, notice of all special
meetings of the Management Committee and all meetings of the Members;

                  (c)      keep, or cause to be kept, at the principal
executive office, a register, or a duplicate register, showing the names of all
Members and their addresses, their Percentage Interests, and all documents
described in this Agreement or required under the Act to be maintained at the
principal executive office of the Company;

                  (d)      keep and maintain, or cause to be kept and
maintained, adequate and correct books and records of accounts of the
properties and business transactions of the Company, including accounts of its
assets, liabilities, receipts, disbursements, gains, losses, capital,
Membership Interests and Economic Interests, which books of account shall at
all reasonable times be open to inspection by any Manager or his/her
representatives;

                  (e)      have or supervise the custody of the funds and
securities of the Company, keep or cause to be kept full and accurate accounts
of receipts and disbursements in books belonging to the Company, and deposit or
cause to be deposited all monies and other valuable effects in the name and to
the credit of the Company in such depositories as may be designated by the
Management Committee;

                  (f)      disburse or cause to be disbursed the funds of the
Company as may be ordered by the Management Committee, taking proper vouchers
for such disbursements, and render to the Management Committee, at their
regular meetings, or when Members so require, at a meeting of the Members, an
account of the financial condition of the Company; and

                  (g)      prepare or cause to be prepared the various
financial statements and reports required to be delivered to the Members in
this Agreement.


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<PAGE>

                  5.4.4    ADDITIONAL OFFICERS. The Company may have such other
officers with such powers and duties as the Management Committee shall
determine from time to time.

                  5.4.5    OFFICERS SERVE AT THE PLEASURE OF THE MANAGEMENT
COMMITTEE. Subject to whatever rights an officer may have under a contract of
employment with the Company, all officers of the Company shall serve at the
pleasure of the Management Committee. Other than the renewal on substantially
similar terms of the employment agreement of an officer, including, but not
limited to the General Manager, of the Company (a "RENEWAL"), the Company shall
not enter into any new employment agreement or amend any existing employment
agreement with an officer of the Company, including, but not limited to, the
General Manager, without the prior approval of the PEGI Managers during any of
the following time periods: (i) the period of time commencing upon the receipt
of an Offer Notification from Lifford pursuant to Section 9.3 hereof and
expiring on the later of (a) the date that PEGI may no longer exercise its
right of first offer or (b) the date of closing on PEGI's purchase of the
additional Membership Interests pursuant to such right of first offer; (ii) the
period of time commencing upon the receipt of a Third-Party Transfer Notice
pursuant to Section 9.4 hereof and expiring on the later of (a) the date that
PEGI may no longer exercise its right of first refusal of (b) the date of
closing on PEGI's purchase of the additional Membership Interests pursuant to
such right of first refusal; and (iii) the period of time commencing upon
PEGI's notice that it is exercising its buy-up option pursuant to Section 9.8
hereof and expiring upon the closing of PEGI's purchase of additional
Membership Interests pursuant to such buy-up option; provided, however, that
any Renewal during any such time periods shall not be for a term extending
beyond the end of such time periods and shall not result in the Company being
subject to any liabilities with respect to such officer after the end of such
time periods.

         5.5      INTERESTED PARTY TRANSACTIONS.

                  5.5.1    APPROVAL. Except for transactions provided in the
Related Documents, the Company shall only engage in a transaction with a Member
or any Affiliate of a Member if the transaction is on terms and conditions fair
and reasonable to the Company and at least as favorable to the Company as those
generally available in a similar transaction between parties operating at arm's
length and is approved by the Management Committee. A transaction shall
conclusively be deemed to have met the above requirements if, after full
disclosure, the transaction is unanimously approved by the Management
Committee. In addition, any transaction between the Company and any member of
the Cisneros Group, for so long as any such member directly or indirectly holds
an interest in Claxson, shall be subject to the approval of the PEGI Managers.
Each Member agrees to disclose to the Management Committee the nature and
extent of the interest of such Member and its Affiliates in any transaction to
be acted on by the Management Committee pursuant to this Section 5.5.1 prior to
such action. Subject to applicable law, if a Member or an Affiliate thereof
engages in a transaction with the Company, such Member and/or such Affiliate
shall have the same rights and obligations with respect thereto as a Person who
is not a Member.

                  5.5.2    TERMINATION AND REMEDIES. With respect to any
contract between the Company and a Member or any Affiliate of a Member,
including but not limited to every Related Document, the Managers appointed by
the Members independent of such contract shall have the right, acting by
majority vote, to determine what actions, if any, should be taken upon the
other party's default or non-performance and to cause the Company to exercise
any and all remedies it may have under such contract or applicable law,
including without limitation, the termination of such contract.

                  5.5.3    PRIORITY OF PAYMENTS. The General Manager and the
Management Committee shall cause any payments made to Lifford and its
Affiliates to be made pari passu with payments to be made to PEGI and its
Affiliates.

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<PAGE>

         5.6      PERFORMANCE OF DUTIES; LIABILITY OF MANAGERS.

                  5.6.1    STANDARDS. A Manager shall not be liable to the
Company or to any Member for any loss or damage sustained by the Company or any
Member, unless the loss or damage shall have been the result of fraud, deceit,
gross negligence, reckless or intentional misconduct, or a knowing violation of
law by the Manager. The Managers shall perform their managerial duties in good
faith, in a manner they reasonably believe to be in the best interests of the
Company and its Members, and with such care, including reasonable inquiry, as
an ordinarily prudent person in a like position would use under similar
circumstances. A Manager who so performs the duties of Manager shall not have
any liability by reason of being or having been a Manager of the Company.

         5.7      MANAGEMENT COMPANY. The Members intend that the General
Manager delegate certain of the day-to-day operational and financial
responsibilities of the Company to Management Co., subject to the terms and
conditions of the Management Services Agreement. Such services shall be
rendered under the supervision of the General Manager and, as set forth in the
Management Services Agreement, shall include, without limitation, the following
services: financial management, payroll services and accounting; collections
and accounts payable; facilities acquisition and management; and management of
day to day business and legal affairs.

         5.8      INSURANCE. The Members shall cause the Company to secure
errors and omissions and other customary liability insurance for the Company
covering exhibitions of programming by the Company, which insurance policies
shall meet Claxson's customary standards, and liability and other insurance
covering the activities of the Company consistent with good business customs
and practices in the Territory and the other locations in which the Company
conducts business. All insurance policies shall name each Member and their
respective Affiliates as named insureds.

                                   ARTICLE 6
                       BUSINESS PLANS AND ANNUAL BUDGETS

         6.1      THE BUSINESS PLAN.

                  6.1.1    THE BUSINESS PLAN. The Management Committee and the
General Manager shall conduct the business of the Company in accordance with
the three year Business Plans and the Annual Budgets (each as defined below),
as adjusted from time to time by the Management Committee. The financial model
for the operation of the Company and the Channels, as annually updated pursuant
to Section 6.1.2, is the "BUSINESS PLAN." On or before March 15, 2003, the
Management Committee shall deliver to the Members a copy of the revised
Business Plan for the Company for fiscal years 2003 through 2005.

                  6.1.2    ADDITIONS TO BUSINESS PLAN. The Business Plan shall
be updated annually by the Management Committee not later than sixty (60) days
prior to the conclusion of the then current Fiscal Year and each Business Plan
so adopted shall cover the next three (3) consecutive Fiscal Years.

         6.2      ANNUAL BUDGETS. The annual update to the Business Plan shall
include a budget for the coming Fiscal Year (the "ANNUAL BUDGET"). The General
Manager will prepare the Annual Budget and present it to the Management
Committee for approval at least sixty (60) days prior to commencement of the
applicable Fiscal Year. The approved Annual Budget for a given Fiscal Year will
supersede the data contained in the Business Plan for that Fiscal Year.

                  6.2.1    ADJUSTMENT TO ANNUAL BUDGET. Beginning January 1,
2003 and ending December 31, 2003, the Company shall spend *** to produce
Company Produced Programming (the


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"COMPANY PRODUCED PROGRAMMING BUDGET") and shall spend *** for marketing
purposes (the "MARKETING BUDGET"). For each subsequent Fiscal Year during the
term of the Program Supply Agreement, the Company shall spend the Company
Produced Programming Budget and the Marketing Budget, each of which shall be
adjusted each Fiscal Year by any change in the CPI. *** Subject to Section
6.2.3, the Company shall not spend less than the annual Marketing Budget and
Company Produced Programming Budget for that Fiscal Year without the prior
written approval of the PEGI Managers.

                  6.2.2    REQUIRED LOCAL PROGRAMMING EXPENDITURES ALLOCATIONS.
Beginning on January 1, 2003 and ending on December 31, 2003, the Company shall
spend: (i) at least *** of the Company Produced Programming Budget to produce
Branded Company Produced Programming; and (ii) no more than *** of the Company
Produced Programming Budget to produce Unbranded Company Produced Programming.
In each of Fiscal Years 2004 through 2007, the Company shall spend at least ***
of the Company Produced Programming Budget to produce Branded Company Produced
Programming and no more than *** of the Company Produced Programming Budget to
produce Unbranded Company Produced Programming. In each of Fiscal Years 2008
through 2012, the Company shall spend at least *** of the Company Produced
Programming Budget to produce Branded Company Produced Programming and no more
than *** of the Company Produced Programming Budget to produce Unbranded
Company Produced Programming.

                  6.2.3    ADJUSTMENT TO COMPANY PRODUCED PROGRAMMING BUDGET
AND MARKETING BUDGET. In the event that the Company would be unable to meet its
obligations as they become due if it met its payment obligations to PEGI
pursuant to the Program Supply Agreement (a "SHORTFALL"), the Management
Committee, in its sole discretion, may reduce the amount of the annual Company
Produced Programming Budget and annual Marketing Budget by an amount equal to
the Shortfall in order to allow the Company to make such payments to PEGI (a
"REQUIRED EXPENDITURE ADJUSTMENT"); provided, however, that the Management
Committee shall cause any payments made to PEGI or Lifford and their respective
Affiliates or members of the Cisnero Group, thereafter to be reduced pari passu
with such Required Expenditure Adjustment; provided, further, that if the cash
flow provided from operations of the Company after any Required Expenditure
Adjustment is sufficient to enable the Company to make all or any part of the
annual Company Produced Programming Budget or annual Marketing Budget in effect
prior to such Required Expenditure Adjustment, then the Company shall fund the
maximum possible local Company Produced Programming Budget and Marketing Budget
until such initial annual required Company Produced Programming Budget or
annual Marketing Budget has been met. The Management Committee shall make no
more than two (2) such Required Expenditure Adjustments during the Term.

                                   ARTICLE 7
                            [INTENTIONALLY OMITTED]

                                   ARTICLE 8
                                    MEMBERS

         8.1      LIMITED LIABILITY. Except as required under the Act or as
expressly set forth in this Agreement, no Member shall be personally liable for
any debt, obligation, or liability of the Company, whether that liability or
obligation arises in contract, tort, or otherwise. In the event any Member
becomes personally liable for any debt, obligation or liability of the Company
arising from any action or approval of the Members or Management Committee
taken without the approval of such Member or the Managers appointed by such
Member where such approval is required under the terms hereof, then, in
addition to any other rights set forth herein, the Members taking or who
appointed the


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Managers taking such action shall indemnify and hold harmless such Member from
and against any liability, loss, claim or damage, including but not limited to,
reasonable attorneys fees and cost, arising from or relating to such action.

         8.2      ADMISSION OF ADDITIONAL MEMBERS. Subject to Sections 5.1.2
and 9.2, the Management Committee may admit to the Company additional Members.
Any additional Members shall obtain Membership Interests and will participate
in the management, Net Income, Net Losses, and distributions of the Company on
such terms as are determined by the Management Committee.

         8.3      WITHDRAWALS OR RESIGNATIONS. No Member may withdraw or resign
from the Company.

         8.4      TERMINATION OF MEMBERSHIP INTEREST. Upon the transfer of a
Member's Membership Interest in violation of this Agreement or the occurrence
of a Withdrawal Dissolution Event as to such Member that does not result in the
dissolution of the Company, the Membership Interest of a Member shall be
terminated by the Managers designated by the other Members or such Membership
Interest shall be purchased by the Company or remaining Members as provided
herein. Each Member acknowledges and agrees that such termination or purchase
of a Membership Interest upon the occurrence of any of the foregoing events is
not unreasonable under the circumstances existing as of the Effective Date.

         8.5      REMUNERATION TO MEMBERS. Except as otherwise authorized in,
or pursuant to, this Agreement, no Member is entitled to remuneration for
acting in the Company business, subject to the entitlement of Managers or
Members winding up the affairs of the Company to reasonable compensation.

         8.6      MEMBERS ARE NOT AGENTS; NO MANAGEMENT AUTHORITY. Pursuant to
this Agreement and the Articles, the management of the Company is vested in the
Management Committee. No Member, acting solely in the capacity of a Member, is
an agent of the Company nor can any Member in such capacity bind nor execute
any instrument on behalf of the Company. The Members shall have no power to
participate in the management of the Company except as expressly authorized by
this Agreement and except as expressly required by the Act.

         8.7      MEETINGS OF MEMBERS.

                  8.7.1    DATE, TIME AND PLACE OF MEETINGS OF MEMBERS;
SECRETARY. Meetings of Members may be held at such date, time and place within
or without the State of California as the Management Committee may fix from
time to time. No annual or regular meetings of Members is required. At any
Members' meeting, the General Manager shall preside at the meeting and shall
act as secretary of the meeting.

                  8.7.2    POWER TO CALL MEETINGS. Unless otherwise prescribed
by the Act, meetings of the Members may be called by the Management Committee
acting by majority vote or by any Member or group of Members holding more than
fifteen percent (15%) of the Percentage Interests for the purpose of addressing
any matters on which the Members may vote.

                  8.7.3    NOTICE OF MEETING. Written notice of a meeting of
Members shall be sent or otherwise given to each Member not less than ten (10)
nor more than sixty (60) days before the date of the meeting. The notice shall
specify the place, date and hour of the meeting and the general nature of the
business to be transacted. No other business may be transacted at such meeting
without the consent of all Members. Upon written request to the General Manager
by any Person entitled to call a meeting of Members, the General Manager shall
immediately cause notice to be given to the Members entitled to


                                      20
<PAGE>

vote that a meeting will be held at a time requested by the Person calling the
meeting, not less than ten (10) days nor more than sixty (60) days after the
receipt of the request. If the notice is not given within twenty (20) days
after the receipt of the request, the Person entitled to call the meeting may
give the notice.

                  8.7.4    MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice
of any meeting of Members shall be given either personally or by first-class
mail or telegraphic or other written communication, charges prepaid, addressed
to the Member at the address of that Member appearing on the books of the
Company or given by the Member to the Company for the purpose of notice.

                  8.7.5    VALIDITY OF ACTION. Any action approved at a meeting
other than by unanimous approval of those entitled to vote, shall be valid only
if the general nature of the proposal so approved was stated in the notice of
meeting or in any written waiver of notice.

                  8.7.6    QUORUM. The presence in person or by proxy of the
holders of a Majority Interest shall constitute a quorum at a meeting of
Members. The Members present at a duly called or held meeting at which a quorum
is present may continue to do business until adjournment, notwithstanding the
loss of a quorum, if any action taken after loss of a quorum (other than
adjournment) is approved by at least Members holding a Majority Interest.

                  8.7.7    ADJOURNED MEETING; NOTICE. Any Members' meeting,
whether or not a quorum is present, may be adjourned from time to time by the
vote of the majority of the Membership Interests represented at that meeting,
either in person or by proxy, but in the absence of a quorum, no other business
may be transacted at that meeting, except as provided in Section 8.7.6. When
any meeting of Members is adjourned to another time or place, notice need not
be given of the adjourned meeting if the time and place are announced at a
meeting at which the adjournment is taken, unless a new record date for the
adjourned meeting is subsequently fixed, or unless the adjournment is for more
than forty-five (45) days from the date set for the original meeting, in which
case the Managers shall set a new record date. At any adjourned meeting the
Company may transact any business that might have been transacted at the
original meeting.

                  8.7.8    WAIVER OF NOTICE OR CONSENT. The actions taken at
any meeting of Members however called and noticed, and wherever held, have the
same validity as if taken at a meeting duly held after regular call and notice,
if a quorum is present either in person or by proxy, and if, either before or
after the meeting, each of the Members entitled to vote, who was not present in
person or by proxy, signs a written waiver of notice or consents to the holding
of the meeting or approves the minutes of the meeting. All such waivers,
consents or approvals shall be filed with the Company records or made a part of
the minutes of the meeting.

                  Attendance of a Member or its representative at a meeting
shall constitute a waiver of notice of that meeting, except when the Member or
such representative objects, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened, and except that attendance at a meeting is not a waiver of any right
to object to the consideration of matters not included in the notice of the
meeting if that objection is expressly made at the meeting. Neither the
business to be transacted nor the purpose of any meeting of Members need be
specified in any written waiver of notice.

                  8.7.9    ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any
action that may be taken at a meeting of Members may be taken without a
meeting, if a consent in writing setting forth the action so taken, is signed
and delivered to the Company within sixty (60) days of the record date for that
action by Members having not less than the minimum number of votes that would
be necessary to authorize or take that action at a meeting at which all Members
entitled to vote on that action at a meeting


                                      21
<PAGE>

were present and voted. All such consents shall be filed with the General
Manager and shall be maintained in the Company records. Any Member giving a
written consent, or the Member's proxy holders, may revoke the consent by a
writing received by the General Manager before written consents of the number
of votes required to authorize the proposed action have been filed.

                  Unless the consents of all Members entitled to vote have been
solicited in writing, notice of any Member approval without a meeting by less
than unanimous written consent, shall be given at least ten (10) days before
the consummation of the action authorized by such approval to those Members
entitled to vote who have not consented in writing.

                  8.7.10   TELEPHONIC PARTICIPATION BY MEMBER AT MEETINGS.
Members may participate in any Members' meeting through the use of any means of
conference telephones or similar communications equipment as long as all
Members participating can hear one another. A Member so participating is deemed
to be present in person at the meeting.

                  8.7.11   RECORD DATE.

                  (a)      FIXED BY MANAGERS OR MEMBERS. To enable the Company
to determine the Members of record entitled to notices of any meeting or to
vote, or entitled to receive any distribution or to exercise any rights in
respect of any distribution or to exercise any rights in respect of any other
lawful action, the Management Committee or Members representing more than
fifteen percent (15%) of the Percentage Interests, may fix, in advance, a
record date, that is not more than sixty (60) days nor less than ten (10) days
prior to the date of the meeting and not more than sixty (60) days prior to any
other action.

                  (b)      IF NOT FIXED. If no record date is fixed, the record
date for determining Members entitled to notice of or to vote at a meeting of
Members shall be at the close of business on the business day preceding the day
on which notice is given or, if notice is waived, at the close of business on
the business day preceding the day on which the meeting is held. The record
date for determining Members entitled to give consent to Company action in
writing without a meeting shall be the day on which the first written consent
is given. The record date for determining Members for any other purpose shall
be at the close of business on the day on which the Management Committee adopts
the resolution relating thereto, or the sixtieth (60th) day prior to the date
of the other action, whichever is later.

                  8.7.12   PROXIES. Every Member entitled to vote on any matter
shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the General
Manager. A proxy shall be deemed signed if the Member's name is placed on the
proxy (whether by manual signature, typewriting, telegraphic transmission,
electronic transmission or otherwise) by the Member or the Member's attorney in
fact. A proxy may be transmitted by an oral telephonic transmission if it is
submitted with information from which it may be determined that the proxy was
authorized by the Member or the Member's attorney in fact. A validly executed
proxy that does not state that it is irrevocable shall continue in full force
and effect unless revoked by the Person executing it, before the vote pursuant
to that proxy, by a writing delivered to the General Manager stating that the
proxy is revoked, or by a subsequent proxy executed by, or attendance at the
meeting and voting in person by, the Person executing the proxy; provided,
however, that no proxy shall be valid after the expiration of eleven (11)
months from the date of the proxy, unless otherwise provided in the proxy. The
revocability of a proxy that states on its face that it is irrevocable shall be
governed by the provisions of Corporations Code Sections 705(e) and 705(f) or
any successor provisions.


                                      22
<PAGE>

                                   ARTICLE 9
                      TRANSFER AND ASSIGNMENT OF INTERESTS

         9.1      TRANSFER AND ASSIGNMENT OF INTERESTS. No Member shall be
entitled to transfer, assign, sell, encumber or in any way alienate or dispose
of (each, a "TRANSFER"), including to an Affiliate, all or any portion of its
Membership Interest if such Transfer: (i) is to a party which is materially
less creditworthy than the transferring Member (taking into account the
obligations of such transferring Member's Affiliates under this Agreement and
the Related Documents); or, (ii) would cause the termination or dissolution of
the Company. Notwithstanding the foregoing, a Member shall be entitled to
pledge all of such Member's Membership Interest as collateral as part of a
blanket pledge of all of such Member's assets to a financial institution.
Transfers in violation of this Article 9 shall be null and void and the
transferee shall have no right to vote or participate in the management of the
business, property and affairs of the Company, to exercise any rights of a
Member or to receive the share of one or more of the Company's Net Income, Net
Losses and distributions of the Company's assets to which the transferor would
otherwise be entitled. After the consummation of any transfer of any part of a
Membership Interest, the Membership Interest so transferred shall continue to
be subject to the terms and provisions of this Agreement and any further
transfers shall be required to comply with all the terms and provisions of this
Agreement. If the secured party receiving a pledge of an Economic Interest of a
Member forecloses on such Economic Interest, such Person shall not be admitted
as a Member, shall not be entitled to further transfer or otherwise dispose of
such Economic Interest without the approval of the Members and shall have no
rights of a Member other than the right to receive the share of one or more of
the Company's Net Income, Net Losses and distributions of the Company's assets
to which the pledging Member would otherwise be entitled.

         9.2      FURTHER RESTRICTIONS ON TRANSFER OF INTERESTS. In addition to
other restrictions found in this Agreement, no Member shall Transfer all or any
part of its Membership Interest: (a) without compliance with Section 15.1.9,
and (b) if the Membership Interest to be transferred, assigned, sold or
exchanged, when added to the total of all other Membership Interests sold or
exchanged in the preceding twelve (12) consecutive months prior thereto, would
cause the termination of the Company under the Code, as determined by the
Managers. Notwithstanding anything to the contrary contained in this Agreement,
Lifford (nor any of its respective Affiliates which may hold Membership
Interests, collectively) shall not Transfer any Membership Interest to any of
the Persons set forth on EXHIBIT E or any of such Persons' Affiliates,
successors or assigns.

         9.3      RIGHT OF FIRST OFFER. In addition to other restrictions found
in this Agreement, in the event any Member (such Member being herein referred
to as the "SELLING MEMBER"), desires to Transfer any of its Membership Interest
to any Person which is not an Affiliate of such Selling Member, and, in the
case of Lifford, any member of the Cisneros Group (a "THIRD PARTY BUYER"), such
Selling Member must first make a bona fide offer in good faith (including as to
price and terms) to Transfer such Membership Interest to the other Members
(such other Members being referred to as the "MEMBER OFFEREES") on a pro rata
basis and must Transfer such Membership Interest to any Member Offeree that
accepts such offer as set forth below. In the event any such Selling Member
desires to Transfer such offered Membership Interest, such Selling Member will
notify in writing (the "OFFER NOTIFICATION") the Company and the Member
Offerees of such desire setting forth the amount of the Membership Interest
proposed to be Transferred and the proposed purchase price thereof (the
"OFFERED MEMBERSHIP INTEREST") and other terms of the proposed sale (the
"TERMS"); provided, that the consideration must be in United States Dollars and
must constitute a bona fide, good faith offer. For a period of thirty (30) days
following the receipt of the Offer Notification, the Selling Member and the
Member Offerees shall negotiate in good faith to agree upon a final purchase
price and terms for the Offered Membership Interest (a "NEGOTIATED PURCHASE
PRICE"). If the Selling Member and the Member Offerees agree on a Negotiated
Purchase Price, then the Member Offerees shall purchase the Offered Membership
Interest at


                                      23
<PAGE>

the Negotiated Purchase Price. If the Selling Member and the Member Offerees
are unable in good faith to agree on a purchase price and terms, the Member
Offerees shall have the right for a period of fifteen (15) days following the
end of the thirty (30) day negotiation period, to elect to purchase all or any
portion of its pro rata share of such Offered Membership Interest on the Terms
originally set forth in the Offer Notification (the "TRANSFER OFFER PERIOD").
If the Member Offeree elects not to purchase the Offered Membership Interest
prior to the termination of the forty-five (45) day period, such Member Offeree
shall be deemed to have waived its right to purchase the Offered Membership
Interest under this Section 9.3 (but not under any other section of this
Agreement). If any Member Offeree desires to purchase such Offered Membership
Interest, it will notify in writing (the "PURCHASE NOTIFICATION") the Selling
Member of such desire. In the event that any Member Offeree does not elect to
purchase its full pro rata share of any such Offered Membership Interest, such
unpurchased Offered Membership Interest will be offered by the Selling Member
to the other Member Offerees (if any) subscribing to purchase the Offered
Membership Interest on a pro rata basis for a period of fifteen (15) days
commencing on the expiration of the Transfer Offer Period (the "SUBSEQUENT
TRANSFER OFFER PERIOD"); provided, however, that if there is only one other
Member, there shall be no Subsequent Transfer Offer Period. In the event that,
after compliance with the foregoing provisions of this Section 9.3, the Member
Offerees, taken together, fail to purchase all of the Offered Membership
Interest, then (i) the Member Offerees shall have no right to purchase any of
the Offered Membership Interest (other than pursuant to Section 9.4 or 9.8
below), and (ii) such Selling Member may offer to Transfer all of the Offered
Membership Interest to any Person; provided, however, that any such Transfer
must be made in accordance with the provisions set forth in Section 9.4 below.
The closing of any purchase by the Member Offerees of any of the Offered
Membership Interest as provided in this Section 9.3 will take place at the
offices of the Company on such date as designated by the Member Offerees
occurring within fifteen (15) days after the expiration of the Subsequent
Transfer Offer Period, or if there be none, the Transfer Offer Period. At such
closing, the Member Offerees will be entitled to receive customary
representations and warranties from the Selling Member regarding ownership and
title of the Offered Membership Interest and the Company will evidence such
Transfer on the books of the Company.

         9.4      RIGHT OF FIRST REFUSAL.

                  (a)      Subject to, and after compliance with, the
requirements set forth in Section 9.3 above, in the event any Selling Member
desires to Transfer any of its Membership Interest to any Third Party Buyer who
shall have made a written bona fide offer to purchase such Membership Interest,
which, in the Selling Member's reasonable judgment, has a substantial
likelihood of closing and is not subject to a financing or other material
contingency other than applicable antitrust or similar clearances, provided,
that such offer may be subject to a financing contingency if such offer is
accompanied by financing commitments from institutions of national standing in
the United States or other international institutions of comparable standing on
usual and customary terms, the Selling Member will promptly furnish to the
Company and all Member Offerees written notification (the "THIRD PARTY TRANSFER
NOTICE") of such desire to Transfer such Membership Interest and of the bona
fide offered price for such Membership Interest, the method of payment of such
offered price (which must be in either cash in a Major Currency or Marketable
Securities, provided that such Marketable Securities must be freely tradable
upon the receipt thereof by the Selling Member), the identity of the
prospective purchaser or purchasers (the "PROPOSED PURCHASER") and all other
pertinent terms and conditions of such bona fide offer to purchase such
Membership Interest.

                  (b)      For a period of thirty (30) days commencing on the
date that the Member Offerees receive the Third-Party Transfer Notice
(provided, that, in the event that the price for the Membership Interest set
forth in the Third Party Transfer Notice is less than *** of the price set
forth in the Offer Notification delivered by the Selling Member to the other
Members pursuant to Section 9.3, or the consideration is different than, or the
terms are more favorable to the third party than the terms set


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                                      24
<PAGE>

forth in the Offer Notification, such period shall be extended for an
additional five (5) business days, the Member Offerees will have the right to
elect to purchase on a pro rata basis all (but not less than all) of the
Membership Interest on the same terms and conditions as described in the
Third-Party Transfer Notice and at the bona fide offer price using cash in a
Major Currency if the Proposed Purchaser is using cash in a Major Currency, or
using its own Marketable Securities or cash, if the Proposed Purchaser intends
to use its own Marketable Securities as consideration (the "THIRD PARTY
TRANSFER OFFER PERIOD"); provided, that if PEGI is a Member Offeree and desires
to use PEI Stock as its own Marketable Securities, (i) the PEI Stock so used
shall have the registration rights set forth on EXHIBIT G hereto; (ii) the
closing of PEGI's purchase and the transfer of the PEI Stock shall occur on the
effective date of the registration statement filed by PEI with respect to such
PEI Stock; and (iii) the number of shares of PEI Stock issued with respect to
such payment will be determined at the time the registration statement filed by
PEI with respect to such PEI Stock becomes effective by dividing (x) the
aggregate consideration by (y) the average closing trading price for PEI Stock
for the twenty (20) trading days ending on the trading day three trading days
prior to the effective date of such registration statement. Any Member Offeree
desiring to purchase any Membership Interest must notify the Selling Member in
writing of such desire. In the event that any Member Offeree does not elect to
purchase its full pro rata share of any Membership Interest proposed to be
Transferred, such unpurchased Membership Interest will be offered by the
Selling Member to the other Member Offerees (if any) subscribing to purchase
Membership Interests on a pro rata basis for a period of 15 days commencing on
the expiration of the Third-Party Transfer Offer Period (the "SUBSEQUENT THIRD
PARTY TRANSFER OFFER PERIOD"); provided, however, that if there is only one
other Member, there shall be no Subsequent Third Party Transfer Offer Period.
No such Membership Interest may be made available for purchase by any Proposed
Purchaser pursuant to the remaining provisions of this Section 9.4 unless and
until all Member Offerees have had an opportunity to purchase all such
Membership Interest in accordance with the provisions of this clause (b).

                  (c)      Except as otherwise provided in Section 9.4(b), the
closing of any purchase by the Member Offerees of any Membership Interest as
provided in this Section 9.4 will take place at the offices of the Company on
such date as designated by the Member Offerees occurring within 15 days after
the expiration of the Subsequent Third-Party Transfer Offer Period, or if there
be none, the Third-Party Transfer Offer Period. At such closing, the Member
Offerees will be entitled to receive customary representations and warranties
from the Selling Member regarding ownership and title of the subject Membership
Interest and the Company will evidence such Transfer on the books of the
Company.

                  (d)      In the event that, after compliance with the
foregoing provisions of this Section 9.4, the Member Offerees fail to purchase
all of the Membership Interest proposed to be Transferred by the Selling
Member, then for a period of one-hundred-twenty (120) days commencing on the
date that no Member Offeree remains entitled to exercise its right to purchase
any Membership Interest in accordance with the foregoing provisions of this
Section 9.4, the Selling Member may Transfer to the Proposed Purchaser any of
the Membership Interest described in the Third-Party Transfer Notice which the
Member Offerees are not purchasing; provided, however, that (1) any such
Transfer to the Proposed Purchaser must be made for the consideration and upon
the terms and conditions set forth in the Third-Party Transfer Notice, (2) any
such transfer to the Proposed Purchaser remains subject to those restrictions
on transfers contained in this Agreement, including the restrictions on
transfer included in this Article 9, and (3) at the closing of any such
Transfer, the Proposed Purchaser executes and delivers to the Company a
counterpart of, or an agreement adopting, this Agreement. Such Member Offerees
who fail to purchase all of the Membership Interest proposed to be transferred
by the Selling Member shall be deemed to have consented to the Transfer of the
Membership Interest to the Third-Party Transferee. If the Selling Member shall
not consummate the Transfer of such remaining Membership Interest to the
Proposed Purchaser within such one-hundred-twenty (120) day period, such
Membership Interest shall remain subject to the provisions of this Agreement
and the Seller Member shall not thereafter Transfer


                                      25
<PAGE>

                  (e)      any such Membership Interest to any Person without
again first complying with all of the provisions of this Agreement.

         9.5      SUBSTITUTION OF MEMBERS. A transferee of a Membership
Interest shall have the right to become a substitute Member only if (a) the
requirements of Sections 9.1 and 9.2 relating to securities and tax
requirements hereof are met, (b) the requirements of Sections 9.3 and 9.4
relating to rights of first offer and rights of first refusal are met, (c) such
Person executes an instrument reasonably satisfactory to the Management
Committee accepting and adopting the terms and provisions of this Agreement,
and (c) such Person pays any reasonable expenses in connection with its
admission as a new Member. The admission of a Member shall not result in the
release of the Member who assigned the Membership Interest from any liability
that such Member may have to the Company.

         9.6      EFFECTIVE DATE OF PERMITTED TRANSFERS. Any permitted transfer
of all or any portion of a Membership Interest shall be effective as of the
first business day following the date upon which the requirements of Sections
9.1, 9.2, 9.3, 9.4 and 9.5 have been met. The General Manager shall promptly
provide the Members with written notice of such transfer. Any transferee of a
Membership Interest shall take subject to the restrictions on transfer imposed
by this Agreement.

         9.7      RIGHTS OF LEGAL REPRESENTATIVES. If a Member who is an
individual dies or is adjudged by a court of competent jurisdiction to be
incompetent to manage the Member's person or property, the Member's executor,
administrator, guardian, conservator, or other legal representative may
exercise all of the Member's rights for the purpose of settling the Member's
estate or administering the Member's property, including any power the Member
has under this Agreement to give an assignee the right to become a Member. If a
Member is a corporation or other entity and is dissolved or terminated, the
powers of that Member may be exercised by its legal representative or
successor.

         9.8      PEGI BUY-UP OPTION.

                  (a)      Starting on December 23, 2002 and continuing through
December 23, 2012, PEGI (or its Affiliates who are then Members of the Company)
has the option to acquire up to *** of additional Membership Interests in the
Company (the applicable percentage from time to time being the "INITIAL OPTION
PERCENTAGE") by purchasing such additional Membership Interests from Lifford
(and any of its Affiliates which hold Membership Interests, collectively) (the
"PEGI BUY-UP OPTION") provided, however; (i) that if PEGI (and its Affiliates,
collectively) Transfers Membership Interests to any Person(s) which is not an
Affiliate of PEGI, the Initial Option Percentage will be adjusted downward, pro
rata, in accordance with the decline in PEGI's and its Affiliates' aggregate
Membership Interests in the Company; (ii) in the event that Lifford receives
additional Membership Interests in the Company, the Initial Option Percentage
shall be increased in accordance with the then outstanding Membership Interests
of the Company such that following the exercise by PEGI of its option to
acquire the Initial Option Percentage pursuant to this Section 9.8, PEGI and
any third Person not affiliated with Lifford shall hold *** of the Membership
Interests of the Company. Starting on December 23, 2007 and continuing through
December 23, 2008, PEGI (or its Affiliates who are then Members of the Company)
has the option (the "ADDITIONAL BUY-UP OPTION") to acquire up to the remaining
*** of additional Membership Interest in the Company (the applicable percentage
from time to time being the "SECOND OPTION PERCENTAGE") by purchasing all of
the additional Membership Interests owned by Lifford (and any of its Affiliates
which hold Membership Interests, collectively); provided, that PEGI (or its
Affiliates) has previously or concurrently exercised its option to acquire the
entire Initial Option Percentage, it being the intent of the Members that PEGI
would own *** of the Membership Interests following PEGI's purchase of the
Second Option Percentage, and payment therefor.


                                                    FOIA Confidential Treatment

                                      26
<PAGE>

                  (b)      PEGI's buy-in price for the Initial Option
Percentage and the Second Option Percentage will be *** at the time of purchase
(as determined in accordance with EXHIBIT C). PEGI may pay the purchase price
for the Initial Option Percentage ***, which election will be set forth in
PEGI's notice that it is exercising its buy-up option; ***. The closing of any
purchase by PEGI as provided in this Section 9.8 shall take place at the
offices of the Company (i) on such date as mutually agreed to by PEGI and
Lifford, ***, or (ii) ***. At such closing, PEGI will be entitled to receive
customary representations and warranties from Lifford (and any of its
Affiliates which hold Membership Interests, collectively) regarding ownership
and title of the purchased Membership Interest and the Company will evidence
such Transfer on the books of the Company. *** In the event PEGI fails to
timely pay for any additional Percentage Interests for which it exercised its
buy-up option, Lifford may elect either: (i) to terminate permanently PEGI's
right to purchase such Percentage Interests; or (ii) to cause the Company to
withhold any payments otherwise due to PEGI under this Agreement or the Program
Supply Agreement or any other agreement that requires the Company to make
payments to PEGI or its Affiliates and to pay such amounts to Lifford until
Lifford is paid in full (including interest at the Reference Rate from the date
such payment was due) for such additional interests, and Lifford will then
transfer such interests to PEGI.

                  (c)      ***

                  (d)      In the event Lifford sells Membership Interests
representing fifty and one-tenths percent (50.1%) or more of the Company to a
third party after giving PEGI the opportunity to exercise its right of first
offer and right of first refusal pursuant to Sections 9.3 and 9.4 of this
Agreement (which Lifford may do at any time), the Additional PEGI Buy-Up Option
will terminate.

         9.9      CLAXSON CONTROL OVER MEMBERSHIP INTEREST. Subject to a
Member's right to transfer and assign its Membership Interest pursuant to the
right of first offer in Section 9.3, right of first refusal in Section 9.4 and
PEGI's Buy-Up Option in Section 9.8, at all times during the term of this
Agreement, Claxson will, directly or indirectly, (i) own 100% of the Membership
Interest owned by Lifford on the date of this Agreement, (ii) retain all voting
rights with respect to such Membership Interest, (iii) retain all rights to
participate in the management of the business, property and affairs of the
Company with respect to such Membership Interest, and (iv) retain all rights to
the Economic Interest with respect to such Membership Interest, subject to
Claxson's right to pledge all of its indirect Membership Interest as collateral
as part of a blanket pledge of all such Member's assets to a financial
institution.

         9.10     PLAYBOY TELEVISION B.V. AND PTVLA U.S., LLC

                  (a)      The Members hereby agree and acknowledge that
Playboy Television B.V., a Netherlands limited liability company ("PTV BV") has
been created by the Members and their Affiliates to distribute the Channels in
Spain and Mexico, that Playboy TV Holdings, LLC, a Delaware limited liability
company ("PTV HOLDINGS"), has been created by the Members and their Affiliates
to serve as a holding company for PTV BV, and that PTVLA U.S., LLC, a Delaware
limited liability company ("PTV US") has been created by the Members and their
Affiliates to distribute the Channels in the United States, Canada and Puerto
Rico. A true, correct and complete list of Contracts to which either or both of
PTV Holdings or PTV BV is a party ("EXISTING PTV BV AGREEMENTS") is attached
hereto as EXHIBIT I. A true, correct and complete list of Contracts to which
PTV US is a party ("EXISTING PTV US AGREEMENTS") is attached hereto as EXHIBIT
J. At all times during the Term, Claxson and PEI will, directly or indirectly,
(i) own the same percentage ownership interest in PTV Holdings or PTV US as
they may hold in the Company from time to time; (ii) in the event of transfer
of any Membership Interest, transfer a corresponding percentage of such Equity
Interest to the same purchaser so long as such transfer does not have a
material adverse tax effect on any member of PTV Holdings or PTV US; (iii)
retain all voting rights with respect to such Equity Interests, (iv) retain all
rights to participate in the management of


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                                      27
<PAGE>

the business, property and affairs of PTV Holdings and PTV US with respect to
such Equity Interests. Without the prior written consent of the PEGI Managers,
Claxson and Lifford shall not, and shall cause their respective Subsidiaries
and Affiliates (including without limitation PTV Holdings, PTV BV and PTV US)
not to:

                  (i)      take any action with respect to PTV Holdings, PTV BV
                  or PTV US that would require the consent of the PEGI Managers
                  as set forth in Section 5.1.2, determined as if the
                  definition of "Company" contained therein included, for the
                  purposes of this Section 9.10(a)(i) only, PTV Holdings, PTV
                  BV and PTV US;

                  (ii)     authorize the issuance of or issue any additional
                  Equity Interests in PTV Holdings, PTV BV or PTV US, other
                  than to the Company in connection with a capital
                  contribution;

                  (iii)    allow or permit PTV Holdings to conduct any business
                  other than owning all of the issued and outstanding Equity
                  Interests of PTV BV;

                  (iv)     allow or permit PTV BV to conduct any business other
                  than the licensing of rights from PEGI and the sublicensing
                  of such rights in the territory of Spain and Mexico in the
                  English, Spanish and Portuguese languages as contemplated and
                  permitted by the Amended Affiliation Agreement;

                  (v)      allow or permit PTV US to conduct any business other
                  than the licensing of rights from PTVLA and the sublicensing
                  of such rights to PEGI in the territory of the United States,
                  Canada and Puerto Rico in the Spanish language as
                  contemplated and permitted by the PTV US Affiliation
                  Agreement and the Distribution Agreement;

                  (vi)     amend or modify the certificate of formation, deed
                  of incorporation, operating agreement, by-laws or any other
                  constitutive or organizational document of PTV Holdings, PTV
                  BV or PTV US;

                  (vii)    sell any of the assets of PTV Holdings, PTV BV or
                  PTV US, except in the ordinary course of business, or merge,
                  consolidate or reorganize PTV Holdings, PTV BV or PTV US with
                  or into another Person, other than another wholly owned
                  Subsidiary of the Company; or

                  (viii)   take any action with respect to PTV Holdings, PTV BV
                  or PTV US that would have a disproportionate adverse impact
                  (financial or otherwise) on PEGI or its Subsidiaries or
                  Affiliates.

                  (b)      In the event that PEGI at any time acquires
additional Membership Interests in the Company, whether pursuant to Section
9.3, 9.4 of 9.8 hereof or otherwise, at the closing of the acquisition by PEGI
of such Membership Interests, PEGI shall have the right, exercisable by written
notice to Lifford not later than two days prior to the date of such closing:

                  (i)      with respect to PTV Holdings and PTV BV, to elect
                  that either: (i) Lifford or its Affiliates shall contribute
                  to PEGI a corresponding membership interest in PTV Holdings,
                  and in the event that PEGI so elects, Claxson shall cause
                  Zagasse Corp., N.V., a Netherlands Antilles limited liability
                  company ("Zagasse"), or any other Affiliate of Claxson that
                  then holds an interest in PTV Holdings, to contribute to PEGI
                  for no additional consideration and at no additional cost to
                  PEGI a corresponding membership


                                      28
<PAGE>

                  interest in PTV Holdings simultaneously with the closing of
                  PEGI's acquisition of additional Membership Interests in the
                  Company, such that following such closing, PEGI's membership
                  interest in PTV Holdings shall be equal to PEGI's Membership
                  Interest in the Company. Notwithstanding the foregoing, in
                  the event that PEGI acquires 100% of the Membership Interests
                  in the Company, PEGI may, in lieu of acquiring all of the
                  membership interests in PTV Holdings, elect to dissolve PTV
                  Holdings and PTV BV. In such event, Claxson shall, and shall
                  cause its Subsidiaries to, take all actions necessary or
                  desirable to effect such dissolution simultaneously with, and
                  effective as of, the closing of PEGI's acquisition of
                  additional Membership Interests in the Company; and

                  (ii)     with respect to PTV US, to elect that either: (i)
                  Lifford or its Affiliates shall contribute to PEGI a
                  corresponding membership interest in PTV US, and in the event
                  that PEGI so elects, Claxson shall cause Lifford US, Inc., a
                  Delaware corporation ("LIFFORD US"), or any other Affiliate
                  of Claxson that then holds an interest in PTV US, to
                  contribute to PEGI for no additional consideration and at no
                  additional cost to PEGI a corresponding membership interest
                  in PTV US simultaneously with the closing of PEGI's
                  acquisition of additional Membership Interests in the
                  Company, such that following such closing, PEGI's membership
                  interest in PTV US shall be equal to PEGI's Membership
                  Interest in the Company. Notwithstanding the foregoing, in
                  the event that PEGI acquires 100% of the Membership Interests
                  in the Company, PEGI may, in lieu of acquiring all of the
                  membership interests in PTV US, elect to dissolve PTV US. In
                  such event, Claxson shall, and shall cause its Subsidiaries
                  to, take all actions necessary or desirable to effect such
                  dissolution simultaneously with, and effective as of, the
                  closing of PEGI's acquisition of additional Membership
                  Interests in the Company.

         9.11     VENUS OPERATIONS

                  (a)      The Members hereby agree and acknowledge that
Contribution S.R.L., an Argentine limited liability company ("VENUS
ARGENTINA"), and Venus TV International, Inc., a British Virgin Islands
corporation ("VENUS INTERNATIONAL", and together with Venus Argentina, the
"VENUS ENTITIES") will be acquired by the Company to own and operate the Venus
Channels in the Territory. Without the prior written consent of the PEGI
Managers, the Company shall not, and shall cause Venus Argentina and Venus
International not to:

                  (i)      Transfer the Venus Assets from the Venus Entities to
                  any other Person, including without limitation the Company or
                  any of its Subsidiaries or Affiliates;

                  (ii)     allow or permit the Transfer of any assets from any
                  other Person, including the Company and any of its
                  Subsidiaries or Affiliates, to either or both of the Venus
                  Entities;

                  (iii)    allow or permit the Venus Entities to own any assets
                  other than the Venus Assets;

                  (iv)     operate the Venus Entities other than as stand-alone
                  entities, provided, however, that the Company may manage
                  either or both of the Venus entities;

                  (v)      allow or permit the Venus Channels to be operated
                  other than as businesses separate and distinct from the other
                  Channels and businesses of the Company, provided, however,
                  that the Company may manage either or both of the Venus
                  entities;

                  (vi)     commingle any of the assets of a Venus Entity with
                  any other assets of the Company and its Subsidiaries and
                  Affiliates; or


                                      29
<PAGE>

                  (vii)    merge the Venus Entities, merge any other Person
                  into a Venus Entity or otherwise combine the operations of
                  the Venus Entities with any other Person.

                                  ARTICLE 10
                       CONSEQUENCES OF DEATH, DISSOLUTION
                       RETIREMENT OR BANKRUPTCY OF MEMBER

         10.1     WITHDRAWAL DISSOLUTION EVENT. Upon the occurrence of a
Withdrawal Dissolution Event, the Company shall dissolve unless the remaining
Members (the "REMAINING MEMBERS") holding all of the remaining Membership
Interests consent within ninety (90) days of the Withdrawal Dissolution Event
to the continuation of the business of the Company. If the Remaining Members
consent to the continuation of the business of the Company, the Remaining
Members and/or, if applicable pursuant to Section 10.4, the Company shall
purchase, and the Member whose actions or conduct resulted in the Withdrawal
Dissolution Event ("FORMER MEMBER") or such Former Member's legal
representative shall sell, the Former Member's Membership Interest ("FORMER
MEMBER'S INTEREST") as provided in this Article 10 to avoid dissolution of the
Company.

         10.2     PURCHASE PRICE. The purchase price for the Former Member's
Interest shall be the lesser of (i) the positive Capital Account balance of the
Former Member or (ii) the Fair Market Value of the Former Member's Interest.
Notwithstanding the foregoing, if the Withdrawal Dissolution Event results from
a breach of this Agreement by the Former Member, the purchase price paid by the
Remaining Members and/or the Company shall be reduced by an amount equal to the
damages suffered by such purchasing parties as a result of such breach.

         10.3     NOTICE OF INTENT TO PURCHASE. Within thirty (30) days after
the General Manager has notified the Remaining Members as to the purchase price
of the Former Member's Interest determined in accordance with Section 10.2,
each Remaining Member shall notify the General Manager in writing of its desire
to purchase a portion of the Former Member's Interest. The failure of any
Remaining Member to submit a notice within the applicable period shall
constitute an election on the part of the Member not to purchase any of the
Former Member's Interest. Each Remaining Member so electing to purchase shall
be entitled to purchase a portion of the Former Member's Interest in the same
proportion that the Percentage Interest of the Remaining Member bears to the
aggregate of the Percentage Interests of all of the Remaining Members electing
to purchase the Former Member's Interest.

         10.4     ELECTION TO PURCHASE LESS THAN ALL OF THE FORMER MEMBER'S
INTEREST. If any Remaining Member elects to purchase none or less than all of
its pro rata share of the Former Member's Interest, then the Remaining Members
can elect to purchase more than their pro rata share. If the Remaining Members
fail to purchase the entire interest of the Former Member, the Company shall
purchase any remaining share of the Former Member's Interest.

         10.5     PAYMENT OF PURCHASE PRICE. The purchase price shall be paid
by the Remaining Members and/or the Company, as the case may be, at the closing
one-fifth (1/5) in cash and the balance of the purchase price in four equal
annual principal installments, plus accrued interest, and be payable each year
on the anniversary date of the closing. Any such payment by the Company shall
be made solely out of Distributable Cash allocable to the Remaining Members.
The unpaid principal balance shall accrue interest at the current applicable
federal rate as provided in the Code for the month in which the initial payment
is made, but the Company and the Remaining Members shall have the right to
prepay in full or in part at any time without penalty. The obligation to pay
the balance due shall be evidenced by a promissory note, and if purchased by a
Remaining Member, secured by a pledge of the Membership Interest being
purchased.


                                      30
<PAGE>

         10.6     CLOSING OF PURCHASE OF FORMER MEMBER'S INTEREST. The closing
for the sale of a Former Member's Interest pursuant to this Article 10 shall be
held on a business day at the principal office of the Company no later than
sixty (60) days after the determination of the purchase price. At the closing,
the Former Member or such Former Member's legal representative shall deliver to
the Company or the Remaining Members an instrument of transfer (containing
warranties of title and no encumbrances) conveying the Former Member's
Interest. The Former Member or such Former Member's legal representative, the
Company and the Remaining Members shall do all things and execute and deliver
all papers as may be necessary fully to consummate such sale and purchase in
accordance with the terms and provisions of this Agreement.

         10.7     PURCHASE TERMS VARIED BY AGREEMENT. Nothing contained herein
is intended to prohibit Members from agreeing upon other terms and conditions
for the purchase by the Company or any Member of the Membership Interest of any
Member in the Company desiring to retire, withdraw or resign, in whole or in
part, as a Member.

                                  ARTICLE 11
                   ACCOUNTING, RECORDS, REPORTING BY MEMBERS

         11.1     BOOKS AND RECORDS. The books and records of the Company shall
be kept, and the financial position and the results of its operations recorded,
in accordance with United States generally accepted accounting principles as in
effect from time to time ("GAAP") and the accounting methods followed for
United States federal income tax purposes. The books and records of the Company
shall reflect all the Company transactions and shall be appropriate and
adequate for the Company's business. The Company shall maintain at its
principal office all of the following:

                  (a)      A current list of the full name and last known
business or residence address of each Member, together with the Capital
Contributions, Capital Account and Percentage Interest of each Member;

                  (b)      A current list of the full name and business or
residence address of each Manager;

                  (c)      A copy of the Articles and any and all amendments
thereto together with executed copies of any powers of attorney pursuant to
which amendments thereto have been executed;

                  (d)      Copies of the Company's federal, state, and local
income tax or information returns and reports, if any, for the six (6) most
recent taxable years;

                  (e)      A copy of this Agreement and any and all amendments
thereto together with executed copies of any powers of attorney pursuant to
which this Agreement or any amendments thereto have been executed;

                  (f)      Copies of the financial statements of the Company,
if any, for the six (6) most recent Fiscal Years; and

                  (g)      The Company's books and records as they relate to
the internal affairs of the Company for at least the current and past four (4)
Fiscal Years.


                                      31
<PAGE>

         11.2     DELIVERY TO MEMBERS AND INSPECTION.

                  11.2.1   DELIVERY UPON REQUEST. Upon the request of any
Member for purposes reasonably related to the interest of that Person as a
Member, the General Manager shall promptly deliver to the requesting Member, at
the expense of the Company, a copy of the information required to be maintained
by Sections 11.1(a), (b) and (d), and a copy of this Agreement, as amended. The
General Manager shall promptly furnish to a Member a copy of any amendment to
the Articles or this Agreement executed by a Manager pursuant to a power of
attorney from the Member.

                  11.2.2   INSPECTION. Each Member has the right, upon
reasonable request for purposes reasonably related to the interest of the
Person as Member to:

                  (a)      inspect and copy during normal business hours any of
the Company records described in Sections 11.1(a) through (g); and

                  (b)      obtain from the General Manager, promptly after
their becoming available, a copy of the Company's federal, state, and local
income tax or information returns for each Fiscal Year.

                  11.2.3   AUTHORIZED PERSONS. Any request, inspection or
copying by a Member under this Section 11.2 may be made by that Person or that
Person's agent or attorney.

                  11.2.4   PEI ADDITIONAL RIGHT OF INSPECTION. Upon reasonable
notice, the Company shall, and shall cause the Company's independent public
accountants and outside counsel and each of the Company's employees, agents and
representatives to: (i) afford the officers, employees and authorized agents,
independent public accountants, outside counsel, financing sources and
representatives of PEI (the "PEI REPRESENTATIVES") access, during normal
business hours, to the offices, properties, other facilities, books and records
of the Company and to the Company's independent public accountants and outside
counsel and those employees, agents and representatives of the Company who have
any knowledge relating to the business, assets and properties of the Company or
the Channels and (ii) furnish promptly to the PEI Representatives such
additional financial and operating data and other information regarding the
business, assets and properties of the Company or the Channels as PEI may from
time to time reasonably request; provided, however, that PEI shall not be
entitled to exercise such rights of inspection more than once in a twelve (12)
month period, unless Lifford or any of its Affiliates are in breach of this
Agreement, in which case there shall be no limit on the number of such
inspections.

         11.3     STATEMENTS.

                  11.3.1   ANNUAL REPORT. The General Manager shall cause an
audited annual report to be sent to each of the Members not later than
forty-five (45) days after the close of the Fiscal Year 2002, and not later
than thirty (30) days after the close of Fiscal Year 2003 and every year
thereafter or sooner if the reporting obligations of PEI or Claxson are
accelerated due to a change in applicable SEC or other regulatory requirements.
The report shall contain a balance sheet as of the end of the Fiscal Year and
an income statement and statement of changes in financial position for the
Fiscal Year. The report shall be prepared in accordance with GAAP consistently
applied and fairly present the results of operations and financial condition of
the Company and its Subsidiaries for the periods covered thereby. Such
financial statements shall be accompanied by the report thereon, if any, of the
independent accountants engaged by the Company.

                  11.3.2   MONTHLY REPORT. The General Manager shall cause a
monthly report to be sent to each of the Members not later than twenty (20)
days after the end of each month during a Fiscal Year, subject to customary
year-end adjustments. The report shall contain a balance sheet as of the last
day of


                                      32
<PAGE>

such month and an income statement and statement of changes in financial
position for the period then ended. The report shall be prepared in accordance
with GAAP consistently applied and fairly present the results of operations and
financial condition of the Company and its Subsidiaries for the periods covered
thereby subject to customary year-end adjustments. Such financial statements
will be unaudited but will prepared on a consistent basis with the Company's
audited annual report described above.

                  11.3.3   TAX INFORMATION. The General Manager shall cause to
be prepared at least annually, at Company expense, information necessary for
the preparation of the Members' federal and state income tax returns. The
General Manager shall send or cause to be sent to each Member within ninety
(90) days after the end of each taxable year such information as is necessary
to complete federal, state, and local income tax or information returns, and a
copy of the Company's federal, state, and local income tax or information
returns for that year.

         11.4     FINANCIAL AND OTHER INFORMATION. The General Manager shall
provide such financial and other information relating to the Company, as a
Member may reasonably request.

         11.5     FILINGS. The General Manager, at Company expense, shall cause
the income tax returns for the Company to be prepared and timely filed with the
appropriate authorities. Within seventy five (75) days after the close of the
taxable year, the General Manager shall deliver to the Managers copies of such
returns for their approval pursuant to Section 5.1.2(m) prior to the filing due
date. The General Manager, at Company expense, shall also cause to be prepared
and timely filed, with appropriate federal and state regulatory and
administrative bodies, amendments to, or restatements of, the Articles and all
reports required to be filed by the Company with those entities under the Act
or other then current applicable laws, rules, and regulations. If a Manager
required by the Act to execute or file any document fails, after demand, to do
so within a reasonable period of time or refuses to do so, any other Manager or
Member may prepare, execute and file that document with the California
Secretary of State.

         11.6     BANK ACCOUNTS. The General Manager shall maintain the funds
of the Company in one or more separate bank accounts in the United States or
the European Union in the name of the Company and in any other jurisdiction
where the applicable laws of such jurisdiction require the Company to maintain
such an account and shall not permit the funds of the Company to be commingled
in any fashion with the funds of any other Person.

         11.7     ACCOUNTING DECISIONS AND RELIANCE ON OTHERS. All decisions as
to accounting matters, except as otherwise specifically set forth herein, shall
be made by the Management Committee. A Manager may rely upon the advice of the
Company's accountants as to whether such decisions are in accordance with
accounting methods followed for federal income tax purposes.

         11.8     TAX MATTERS FOR THE COMPANY HANDLED BY MANAGERS AND TAX
MATTERS MEMBER. The Management Committee shall from time to time cause the
Company to make such tax elections as it deems to be in the best interests of
the Company; provided, however, that the Management Committee shall not (i)
file any tax return or (ii) make any tax election or take any position with
respect to any examination audit or proceeding by a taxing authority that could
have an adverse impact on PEGI or the Company without PEGI's prior written
consent. Any failure by the Management Committee to approve unanimously any
matter described in Section 5.1.2(l) will be resolved in accordance with the
procedures specified in Article 16; provided, however, that the sole arbitrator
described in Section 16.4 shall appoint one or more impartial experts to
testify on the disputed matters and shall base his or her decision on such
expert testimony, taking into account the interests of both parties. The Tax
Matters Member (the equivalent to the Tax Matters Partner as defined in Code
Section 6231) shall represent the Company (at the Company's expense) in
connection with all examinations of the Company's affairs by tax authorities,
including resulting judicial and administrative proceedings, and shall expend
the Company's funds for


                                      33
<PAGE>

professional services and costs associated therewith. The Tax Matters Member
shall oversee the Company's tax affairs in the overall best interests of the
Company. If for any reason the Tax Matters Member can no longer serve in that
capacity or ceases to be a Member or Manager, as the case may be, Members
holding a Majority Interest may designate another to be Tax Matters Member.

                                  ARTICLE 12
                           DISSOLUTION AND WINDING UP

         12.1     TERM. The term (the "TERM") of the Company shall commence on
the date the Articles are filed with the Secretary of State of California and
terminate on the earlier to occur of the termination of the Company as provided
in the Articles or the earlier dissolution of the Company pursuant to the terms
of this Article 12.

         12.2     DISSOLUTION EVENTS. The Company may be dissolved prior to the
termination date set forth in the Articles upon the happening of any of the
following events (each, a "DISSOLUTION EVENT"):

                  12.2.1   Either Lifford or PEGI may elect to dissolve the
Company if controlling ownership of the other Member changes (other than a
change to an Affiliate of such Member); provided, however, that the parties
acknowledge that Claxson and PEI are publicly held and that no change in their
ownership will constitute a change of control of Lifford or PEGI, as the case
may be, as long as Lifford or PEGI remain a controlled subsidiary of Claxson or
PEI, as the case may be. Any such dissolution will be effective as of the later
of (i) the last day of the Fiscal Year in which such dissolution event occurs
or (ii) the date six (6) months after such dissolution event occurs.

                  12.2.2   Any Member may without prejudice to any other
remedies it may have elect to dissolve the Company by notice in writing to the
other Members on or after the occurrence of any of the following:

                  (a)      the commission of one or more material breaches of
this Agreement by the Company or another Member which are not capable of
remedy;

                  (b)      the commission of a material breach of this
Agreement by the Company or another Member which is capable of remedy (a
"REMEDIABLE BREACH") which shall not have been remedied within a period of
thirty (30) days after the party in breach has been given notice in writing
specifying that Remediable Breach and requiring it to be remedied; provided,
however, that such thirty (30) day period shall be extended for such additional
period, not to exceed one-hundred-twenty (120) days, as shall be reasonably
necessary if that Remediable Breach is incapable of remedy within that thirty
(30) day period and during that additional period the party in breach shall
diligently endeavor to remedy that Remediable Breach, but only if such
extension would not reasonably be expected to have a material adverse effect on
the party giving notice of such breach. However, in respect of the breach of
any obligation to make payment hereunder, the cure period shall not be extended
as provided in the foregoing proviso.

                  (c)      the bankruptcy, insolvency, general assignment for
the benefit of creditors or similar event or the appointment of a trustee,
receiver or similar person for any Member holding a Majority Interest or of the
Company;

                  (d)      the uncured material breach of one or more of the
Program Supply Agreement or the Distribution Agreement by another Member or
their Affiliates or the Company, unless in the event of a breach by the
Company, the party seeking dissolution hereunder caused such breach; or


                                      34
<PAGE>

                  (e)      the institution by such Member of a legal proceeding
against another Member to enforce against the other Member either (i) a final
arbitral award or (ii) a final judgment, in each case arising out of or
relating to this Agreement, the Program Supply Agreement or the Distribution
Agreement.

                  12.2.3   Any failure by the Company to make payments due to
PEGI under the Program Supply Agreement shall be deemed to constitute a
material breach hereunder by Claxson and Lifford. Each of Claxson and Lifford
hereby unconditionally and irrevocably guarantees, as primary obligor and not
merely as a surety, and as a guaranty of payment when due and not of
collectibility, to PEGI and its successors and assigns the prompt payment and
satisfaction in full of any amounts due and owing by the Company to PEGI and
its successors and assigns pursuant to the Program Supply Agreement in an
amount equal to the outstanding obligation multiplied by the Percentage
Interest in the Company then owned by Lifford and its Affiliates (the "CLAXSON
GUARANTEE OBLIGATION"), and each of Claxson and Lifford hereby (a) further
agrees that if the Company shall fail to pay, or otherwise satisfy, in full any
of such amounts when they become due, whether at stated maturity, by
acceleration, demand or otherwise, it shall promptly pay the same up to amount
of the Claxson Guarantee Obligation, and (b) waives, for the benefit of PEGI
and its successors and assigns, (i) any right to require PEGI to proceed
against the Company or any guarantor, or to proceed against, exhaust or have
resort to any security held from the Company or any other guarantor, or any
balance of any deposit account or credit on the books of PEGI, (ii) any right
to set-offs, recoupments and counterclaims; (iii) notices, demands,
presentments, protests, notices of protest and notices of dishonor and notices
of any action or inaction or default under this Agreement or the Program Supply
Agreement; (iv) any right of subrogation, reimbursement or indemnification that
it may have against the Company and any right of contribution it may have
against any other guarantor and (v) to the fullest extent permitted by law, any
defenses or benefits that may be derived from or afforded by law which limit
the liability of or exonerate it or sureties, or which may conflict with the
terms of this Section 12.2.3. The obligations of each of Claxson and Lifford
pursuant to this Section 12.2.3 shall continue and remain in full force and
effect or be reinstated, as the case may be, in the event that all or any part
of any payment made by the Company to PEGI under the Program Supply Agreement
is rescinded or recovered directly or indirectly from PEGI as a preference,
fraudulent transfer or conveyance or otherwise. PEGI, Claxson and Lifford
acknowledge that any payment obligation of Claxson or Lifford hereunder shall
be limited to Lifford's (or its Affiliate's) Membership Percentage Interest at
the time of such failure to make payment multiplied by the amount of the
payment due and further, that the payment of such payments due shall constitute
a cure of such breach. In the event that PEGI exercises the PEGI Buy-Up Option,
the provisions of this Section 12.2.3 shall terminate in their entirety.

                  12.2.4   PEI hereby unconditionally and irrevocably
guarantees, as primary obligor and not merely as a surety, and as a guaranty of
payment when due and not of collectibility, to the Company and its successors
and assigns the prompt payment and satisfaction in full of any amounts due and
owing by PEGI to the Company, its successors and assigns pursuant to the
Program Supply Agreement, and the Distribution Agreement, and PEI hereby (a)
further agrees that if PEGI shall fail to pay, or otherwise satisfy, in full
any of such amounts when they become due, whether at stated maturity, by
acceleration, demand or otherwise, it shall promptly pay, or otherwise satisfy,
the same and (b) waives, for the benefit of the Company and its successors and
assigns, (i) any right to require the Company to proceed against PEGI or any
other guarantor, or to proceed against, exhaust or have resort to any security
held from PEGI or any guarantor or any balance of any deposit account or credit
on the books of the Company; (ii) any right to set-offs, recoupments and
counterclaims; (iii) notices, demands, presentments, protests, notices of
protest and notices of dishonor and notice of any action or inaction or default
under the Program Supply Agreement or the Distribution Agreement; (iv) any
right of subrogation, reimbursement or indemnification that it may have against
PEGI and any right of contribution it may have against any other


                                      35
<PAGE>

guarantor and (v) to the fullest extent permitted by law, any defenses or
benefits that may be derived from or afforded by law which limit the liability
of or exonerate it or sureties, or which may conflict with the terms of this
Section 12.2.4. The obligations of PEI pursuant to this Section 12.2.4 shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of any payment made by PEGI to the
Company under the Distribution Agreement is rescinded or recovered directly or
indirectly from the Company as a preference, fraudulent transfer or conveyance
or otherwise, PEGI, Claxson and Lifford acknowledge that any payment obligation
of PEI hereunder shall be limited to PEGI's (or its Affiliate's) Membership
Percentage Interest at the time of such failure to make payment multiplied by
the amount of the payment due and further, that the payment of such payments
due shall constitute a cure of such breach. In the event that PEGI exercises
the PEGI Buy-Up Option, the provisions of this Section 12.2.4 shall terminate
in their entirety.

         12.3     EFFECT OF DISSOLUTION. Upon dissolution of the Company, the
Related Documents will automatically terminate and all rights and obligations
of the respective parties thereunder will terminate, except for any provisions
that expressly survive such termination or claims, etc. that have arisen prior
to such termination. Upon dissolution of the Company, each Member shall have
the right to compel the Company to be promptly wound-up and liquidated.

         12.4     DISSOLUTION. The Company shall be dissolved, its assets shall
be disposed of, and its affairs wound up on the first to occur of the
following:

                  (a)      Upon the election of the applicable Member(s)
following the happening of any Dissolution Event;

                  (b)      Upon the entry of a decree of judicial dissolution
pursuant to Section 17351 of the Corporations Code;

                  (c)      The occurrence of a Withdrawal Dissolution Event and
the failure of the Remaining Members to consent to continue the business of the
Company within ninety (90) days after the occurrence of such event or the
failure of the Company or the Remaining Members to purchase the Former Member's
Interest as provided in Article 10; or

                  (d)      The sale of all or substantially all of the assets
of the Company.

         12.5     CERTIFICATE OF DISSOLUTION. As soon as possible following the
occurrence of any of the events specified in Section 12.4, the Managers
appointed by Members whose breach or Withdrawal Dissolution Event have not
caused the dissolution of the Company or, if none, the Members, shall execute a
Certificate of Dissolution in such form as shall be prescribed by the
California Secretary of State and file the Certificate as required by the Act.

         12.6     WINDING UP. Upon dissolution, the Company shall continue
solely for the purpose of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors. The
Managers appointed by Members whose breach or Withdrawal Dissolution Event have
not caused the dissolution of the Company or, if none, the Members, shall be
responsible for overseeing the winding up and liquidation of Company, shall
take full account of the liabilities of Company and assets, shall (subject to
PEGI's right under Section 12.7) either cause its assets to be sold or
distributed, and if sold as promptly as is consistent with obtaining the Fair
Market Value thereof, shall cause the proceeds therefrom, to the extent
sufficient therefor, to be applied and distributed as provided in Section 12.8.
The Persons winding up the affairs of the Company shall give written notice of
the commencement of winding up by mail to all known creditors and claimants
whose addresses appear on the records of the Company. The Managers or


                                      36
<PAGE>

Members winding up the affairs of the Company shall be entitled to reasonable
compensation for such services.

         12.7     DISTRIBUTIONS IN KIND. Any non-cash asset distributed to one
or more Members shall first be valued at its Fair Market Value to determine the
Net Income or Net Loss that would have resulted if such asset were sold for
such value, such Net Income or Net Loss shall then be allocated pursuant to
Article 4, and the Members' Capital Accounts shall be adjusted to reflect such
allocations. The amount distributed and charged to the Capital Account of each
Member receiving an interest in such distributed asset shall be the Fair Market
Value of such interest (net of any liability secured by such asset that such
Member assumes or takes subject to). The Fair Market Value of such asset shall
be determined by the Managers or by the Members or if any Member objects by an
independent appraiser in accordance with EXHIBIT C, with a single appraiser
selected by the Manager or liquidating trustee and approved by the Members;
provided, however, that the Fair Market Value of the physical embodiment of any
intellectual property shall be determined based on its value to a third party
(i.e., to a Person other than the owner of such intellectual property).
Notwithstanding the foregoing, PEGI may elect in lieu of or in addition to any
other form of distribution to have distributed to it in kind or destroyed any
assets of the Company that are Playboy-branded, contain Playboy-identified
content or are otherwise identified as a Playboy-related product.

         12.8     ORDER OF PAYMENT OF LIABILITIES UPON DISSOLUTION.

                  12.8.1   DISTRIBUTIONS TO MEMBERS. After determining that all
known debts and liabilities of the Company in the process of winding-up,
including, but not limited to, debts and liabilities to Members that are
creditors of the Company, have been paid or adequately provided for, the
remaining assets shall be distributed to the Members in accordance with their
positive Capital Account balances, after taking into account income and loss
allocations for the Company's taxable year during which liquidation occurs.
Such liquidating distributions shall be made by the end of the Company's
taxable year in which the Company is liquidated, or, if later, within ninety
(90) days after the date of such liquidation.

                  12.8.2   PAYMENT OF DEBTS. The payment of a debt or
liability, whether the whereabouts of the creditor is known or unknown, has
been adequately provided for if the payment has been provided for by either of
the following means:

                  (a)      Payment thereof has been assumed or guaranteed in
good faith by one or more financially responsible persons or by the United
States government or any agency thereof, and the provision, including the
financial responsibility of the Person, was determined in good faith and with
reasonable care by the Members or Managers to be adequate at the time of any
distribution of the assets pursuant to this Section.

                  (b)      The amount of the debt or liability has been
deposited as provided in Section 2008 of the Corporations Code.

                  This Section 12.8.2 shall not prescribe the exclusive means
of making adequate provision for debts and liabilities.

         12.9     CERTIFICATE OF CANCELLATION. The Managers or Members who
filed the Certificate of Dissolution shall cause to be filed in the office of,
and on a form prescribed by, the California Secretary of State, a certificate
of cancellation of the Articles upon the completion of the winding up of the
affairs of the Company.


                                      37
<PAGE>

         12.10    NO ACTION FOR DISSOLUTION. Except as expressly permitted in
this Agreement, a Member shall not take any voluntary action that directly
causes a Dissolution Event. The Members acknowledge that irreparable damage
would be done to the goodwill and reputation of the Company if any Member
should bring an action in court to dissolve the Company under circumstances
where dissolution is not required by Section 12.4. This Agreement has been
drawn carefully to provide fair treatment of all parties. Accordingly, except
where the Managers have failed to liquidate the Company as required by this
Article 12, each Member hereby waives and renounces its right to initiate legal
action to seek the appointment of a receiver or trustee to liquidate the
Company or to seek a decree of judicial dissolution of the Company on the
ground that (a) it is not reasonably practicable to carry on the business of
the Company in conformity with this Agreement, or (b) dissolution is reasonably
necessary for the protection of the rights or interests of the complaining
Member. Damages for breach of this Section 12.10 shall be monetary damages only
(and not specific performance), and the damages may be offset against
distributions by the Company to which such Member would otherwise be entitled.

                                  ARTICLE 13
                         INDEMNIFICATION AND INSURANCE

         13.1     INDEMNIFICATION OF AGENTS. The Company shall and hereby
agrees to indemnify any Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding
by reason of the fact that such Person is or was a Member, Manager, officer,
employee or other agent of the Company or that, being or having been such a
Member, Manager, officer, employee or agent, such Person is or was serving at
the request of the Company as a manager, director, officer, employee or other
agent of another limited liability company, corporation, partnership, joint
venture, trust or other enterprise (all such persons being referred to
hereinafter as an "AGENT"), to the fullest extent permitted by applicable law
in effect on the Effective Date and to such greater extent as applicable law
may hereafter from time to time permit. The Managers shall be authorized, on
behalf of the Company, to enter into indemnity agreements from time to time
with any Person entitled to be indemnified by the Company hereunder, upon such
terms and conditions as the Managers deem appropriate in their business
judgment.

         13.2     INSURANCE. The Company shall have the power to purchase and
maintain insurance on behalf of any Person who is or was an Agent of the
Company against any liability asserted against such Person and incurred by such
Person in any such capacity, or arising out of such Person's status as an
Agent, whether or not the Company would have the power to indemnity such Person
against such liability under the provisions of Section 13.1 or under applicable
law.

                                  ARTICLE 14
                                NON-COMPETITION

         14.1     PROHIBITED ACTIVITIES. (a) PEI and its Subsidiaries may not
directly or indirectly, alone or as a partner, joint venturer, member,
consultant, agent, independent contractor or stockholder of or lender to, any
company or business, ***; (b) Claxson and its Subsidiaries may not directly or
indirectly, alone or as a partner, joint venturer, member, consultant, agent,
independent contractor or stockholder of, or lender to, any company or
business, ***; (c) Claxson and PEI and their respective Subsidiaries may not
***; and (d) if this Agreement or the Program Supply Agreement any Related
Document is terminated due to a breach by PEI, Claxson or any of their
respective Subsidiaries, ***.

         14.2     SEPARATE COVENANTS. The agreements contained in Section 14.1
shall be construed as a series of separate and distinct covenants, one for each
(a) activity of PEI and its Subsidiaries and Claxson and its Subsidiaries, as
the case may be, (b) capacity in which each of PEI and its Subsidiaries and
Claxson and its Subsidiaries, as the case may be, are prohibited from competing
and


                                                    FOIA Confidential Treatment

                                      38
<PAGE>
(c) territory in which PEI and its Subsidiaries and Claxson and its
Subsidiaries, as the case may be, are carrying on or prohibited from carrying
on such activity.

         14.3     INTENT; SEVERABILITY. Each of PEI, PEGI and Claxson intends
that Section 14.1 satisfy the terms of, and be enforceable in accordance with
California Business and Professions Code Section 16602.5, which authorizes any
member who sells its interest in a limited liability company to enter into an
agreement with the buyer of such interest to refrain from carrying on a similar
business within the counties or cities in which a limited liability company
carries on a like business therein. Each of PEI, on behalf of itself and its
Subsidiaries (including, without limitation, PEGI), and Claxson, on behalf of
itself and its Subsidiaries, recognizes that the territorial and time
restrictions set forth herein are reasonable, not burdensome and are properly
required by law for the adequate protection of the Company, PEI and its
Subsidiaries and Claxson and its Subsidiaries. If such territorial or time
restrictions or any other provision contained herein shall be deemed to be
illegal, unenforceable or unreasonable by a court of competent jurisdiction,
each of PEI and its Subsidiaries and Claxson and its Subsidiaries agrees and
submits to the reduction of such territorial or time restriction or other
provision to such an area or period as such court shall deem reasonable.

         14.4     INJUNCTIVE RELIEF. Each of PEI, PEGI and Claxson acknowledges
that (a) the covenants and the restrictions contained in Section 14.1 are a
material factor to such party's execution of this Agreement and are necessary
and required for the protection of the Company, PEI and its Subsidiaries and
Claxson and its Subsidiaries, (b) such covenants relate to matters that are of
a special, unique and extraordinary character that gives each of such covenants
a special, unique and extraordinary value, and (c) a breach of any of such
covenants will result in irreparable harm and damages to the Company, PEI and
its Subsidiaries or Claxson and its Subsidiaries, as the case may be, in an
amount difficult to ascertain and that cannot be adequately compensated by a
monetary award. Accordingly, in addition to any of the relief to which the
Company, PEI and its Subsidiaries or Claxson and its Subsidiaries, as the case
may be, may be entitled at law or in equity, the Company, PEI and its
Subsidiaries and Claxson and its Subsidiaries, as the case may be, shall be
entitled to temporary and/or permanent injunctive relief from any breach or
threatened breach of the provisions of Section 14.1 without proof of actual
damages that have been or may be caused to such Persons by such breach or
threatened breach.

                                  ARTICLE 15
                     MEMBER REPRESENTATIONS AND WARRANTIES

         15.1     REPRESENTATIONS AND WARRANTIES BY EACH MEMBER. Each Member
hereby represents and warrants to, and agrees with, the other Members, and the
Company, as follows:

                  15.1.1   EXPERIENCE. By reason of such Member's business or
financial experience, such Member is capable of evaluating the risks and merits
of an investment in the Membership Interest and of protecting such Member's own
interests in connection with this investment.

                  15.1.2   NO ADVERTISING. Such Member has not seen, received,
been presented with, or been solicited by any leaflet, public promotional
meeting, newspaper or magazine article or advertisement, radio or television
advertisement, or any other form of advertising or general solicitation with
respect to the sale of the Membership Interest.

                  15.1.3   INVESTMENT INTENT. Such Member is acquiring the
Membership Interest for investment purposes for such Member's own account only
and not with a view to or for sale in connection with any distribution of all
or any part of the Membership Interest. No other Person will have any direct or
indirect beneficial interest in or right to the Membership Interest.


                                      39
<PAGE>

                  15.1.4   PURPOSE OF ENTITY. Such Member was not organized for
the specific purpose of acquiring the Membership Interest.

                  15.1.5   ECONOMIC RISK. Such Member is financially able to
bear the economic risk of an investment in the Membership Interest, including
the total loss thereof.

                  15.1.6   NO REGISTRATION OF MEMBERSHIP INTEREST. Such Member
acknowledges that the Membership Interest has not been registered under the
Securities Act of 1933 (as amended, the "SECURITIES ACT"), or qualified under
the California Corporate Securities Law of 1968, as amended, or any other
applicable blue sky laws in reliance, in part, on such Member's
representations, warranties, and agreements herein.

                  15.1.7   MEMBERSHIP INTEREST IN RESTRICTED SECURITY. Such
Member understands that the Membership Interest is a "restricted security"
under the Securities Act in that the Membership Interest will be acquired from
the Company in a transaction not involving a public offering, and that the
Membership Interest may be resold without registration under the Securities Act
only in certain limited circumstances and that otherwise the Membership
Interest must be held indefinitely. In this connection, such Member understands
the resale limitations imposed by the Securities Act and is familiar with SEC
Rule 144, as presently in effect, and the conditions which must be met in order
for such SEC Rule 144 to be available for resale of "restricted securities".

                  15.1.8   NO OBLIGATION TO REGISTER. Such Member represents,
warrants, and agrees that the Company is under no obligation to register or
qualify the Membership Interest under the Securities Act or under any state
securities law, or to assist such Member in complying with any exemption from
registration and qualification.

                  15.1.9   NO DISPOSITION IN VIOLATION OF LAW. Without limiting
the representations set forth above, and without limiting the other provisions
of this Agreement relating to the transfer of Membership Interests, such Member
will not make any disposition of all or any part of the Membership Interest
which will result in the violation by such Member or by the Company of the
Securities Act, the California Corporate Securities Law of 1968, or any other
applicable securities laws. Without limiting the foregoing, such Member agrees
not to make any disposition of all or any part of the Membership Interest
unless and until:

                  (a)      There is then in effect a registration statement
under the Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration statement and any
applicable requirements of state securities laws; or

                  (b)      (i) Such Member has notified the Company of the
proposed disposition and has furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and (ii) such Member
has furnished the Company with a written opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require
registration of any securities under the Securities Act or the consent of or a
permit from appropriate authorities under any applicable state securities law;
and

                  (c)      In the case of any disposition of all or any part of
the Membership Interest pursuant to SEC Rule 144, in addition to the
requirements set forth above, such Member shall promptly forward to the Company
a copy of any Form 144 filed with the SEC with respect to such disposition and
a letter from the executing broker satisfactory to the Company evidencing
compliance with SEC Rule 144. If SEC Rule 144 is amended or if the SEC's
interpretations thereof in effect at the time of any such


                                      40
<PAGE>

disposition have changed from its present interpretations thereof, such Member
shall provide the Company with such additional documents as the General Manager
may reasonably require.

                  15.1.10  INVESTMENT RISK. Such Member acknowledges that the
Membership Interest is a speculative investment which involves a substantial
degree of risk of loss by such Member of its entire investment in the Company,
that such Member understands and takes full cognizance of the risk factors
related to the purchase of the Membership Interest.

                  15.1.11  RESTRICTIONS ON TRANSFERABILITY. Such Member
acknowledges that there are substantial restrictions on the transferability of
the Membership Interest pursuant to this Agreement, that there is no public
market for the Membership Interest and none is expected to develop, and that,
accordingly, it may not be possible for such Member to liquidate such Member's
investment in the Company.

                  15.1.12  INFORMATION REVIEWED. Such Member has received and
reviewed all information such Member considers necessary or appropriate for
deciding whether to purchase the Membership Interest.

                  15.1.13  NO REPRESENTATIONS BY COMPANY. No Person has at any
time represented, guaranteed or warranted to such Member that such Member may
freely transfer the Membership Interest, that a percentage of profit and/or
amount or type of consideration will be realized as a result of an investment
in the Membership Interest, that past performance or experience on the part of
the Managers or any other Person in any way indicates the predictable results
of the ownership of the Membership Interest or of the overall Company business,
that any cash distributions from Company operations or otherwise will be made
to the Members by any specific date or will be made at all, or that any
specific tax benefits will accrue as a result of an investment in the Company.

                  15.1.14  CONSULTATION WITH ATTORNEY. Such Member has been
advised to consult with such Member's own attorney regarding all legal matters
concerning an investment in the Company and the tax consequences of
participating in the Company, and has done so, to the extent such Member
considers necessary.

                  15.1.15  TAX CONSEQUENCES. Such Member acknowledges that the
tax consequences to such Member of investing in the Company will depend on such
Member's particular circumstances, and such Member will look solely to, and
rely upon, such Member's own advisers with respect to the tax consequences of
this investment.

                  15.1.16  NO ASSURANCE OF TAX BENEFITS. Such Member
acknowledges that there can be no assurance that the Code or the Treasury
Regulations will not be amended or interpreted in the future in such a manner
so as to deprive the Company and the Members of some or all of the tax benefits
they might now receive, nor that some of the deductions claimed by the Company
or the allocations of items of income, gain, loss, deduction, or credit among
the Members may not be challenged by the Internal Revenue Service.

         15.2     INDEMNITY. Each Member shall indemnify and hold harmless the
Company, each and every Manager, each and every other Member, and any officers,
directors, shareholders, managers, members, employees, partners, agents,
attorneys, accountants, registered representatives, and control persons of any
such entity who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative (a "CLAIM"), by reason of or arising
from any misrepresentation or misstatement of facts or omission to represent or
state facts made by such Member including, but not limited to, the information
and


                                      41
<PAGE>

representations in this Agreement, against losses, liabilities, and expenses of
the Company, each and every Manager, each and every other Member, and any
officers, directors, shareholders, managers, members, employees, partners,
attorneys, accountants, agents, registered representatives, and control persons
of any such Person (including attorneys' fees, judgments, fines, and amounts
paid in settlement, payable as incurred) incurred by such Person in connection
with such action, suit, proceeding, or the like.

                                  ARTICLE 16
                               DISPUTE RESOLUTION

         16.1     ALTERNATE DISPUTE RESOLUTION. Except as set forth in Section
16.10, any dispute arising out of or relating to this Agreement shall be
resolved in accordance with the procedures specified in this Article 16, which
shall be the sole and exclusive procedures for the resolution of any such
disputes; provided, however, that this Article shall not apply to any dispute
concerning the validity, ownership or control of the trademarks licensed by PEI
to the Company pursuant to the Program Supply Agreement or the copyrights to
any programming supplied by PEGI pursuant to the Program Supply Agreement, and
instead any such dispute shall be litigated in a court of law. The Company and
the Members intend that these provisions shall be valid, binding, enforceable
and irrevocable and shall survive any termination of this Agreement or any of
the other Related Documents.

         16.2     NOTIFICATION AND NEGOTIATION. If the Company or any Member
wishes to assert a dispute with the Company or any other Member arising out of
or relating to this Agreement, such Person shall promptly notify the Company
and/or such other Member in writing of such dispute and shall attempt in good
faith to resolve any dispute arising out of or relating to this Agreement
promptly by negotiation between executives who have authority to settle the
controversy. Within five (5) business days of the receipt by a party of a
notice of the existence of a Dispute ("NOTICE"), the receiving party shall
submit a written response to the other party ("RESPONSE"). Both the Notice and
the Response shall include (i) a statement of each party's position with regard
to the Dispute and a summary of arguments supporting that position; and (ii)
the name and title of the senior executive who will represent that party in
attempting to resolve the Dispute pursuant to this Section. Within five (5)
business days of receipt of the Response, the designated executives shall meet
and attempt to resolve the Dispute. All reasonable requests for information
made by one party to the other will be honored. All negotiations pursuant to
this clause shall be confidential and shall be treated as compromise and
settlement negotiations, and no oral or documentary representations made by the
parties during such negotiations shall be admissible for any purpose in any
subsequent proceedings. If any Dispute is not resolved for any reason within
twenty (20) days of receipt of Notice (or within such longer period as to which
the parties have agreed in writing), then, on the request of any party the
Dispute shall be submitted to arbitration in accordance with Sections 16.3 to
16.9 herein.

         16.3     ARBITRATION RULES. Any Dispute not timely resolved in
accordance with Section 16.2 shall be finally and exclusively settled by
arbitration in accordance with the International Arbitration Rules of the
American Arbitration Association ("AAA") then in effect (the "RULES"), except
as modified herein. The arbitration shall be held in Los Angeles, California.
The arbitration proceedings shall be conducted, and the award shall be
rendered, in the English language.

         16.4     SELECTION OF ARBITRATORS. If the Dispute (including claims
and counterclaims) is for less than $5 million, there shall be one arbitrator.
The parties shall have fifteen (15) days from the receipt by the respondent of
the demand for arbitration to agree on an arbitrator. If the parties fail to
timely agree, on the request of any party such arbitrator shall be appointed by
the AAA in accordance with the Rules and the procedures set forth herein. If
the Dispute (including claims and counterclaims) is for more than $5 million,
there shall be three neutral and impartial arbitrators of whom the claimant and
the respondent shall each appoint one, within fifteen (15) days of the receipt
by respondent of a copy of the demand for


                                      42
<PAGE>

arbitration. The two arbitrators so appointed shall select a third arbitrator
to serve as presiding arbitrator, such selection to be made within twenty (20)
days of the selection of the second arbitrator. If any arbitrator is not
appointed within the time limits set forth herein, such arbitrator(s) shall be
appointed by the AAA in accordance with the Rules and the procedures set forth
herein. There shall be no restriction on the nationality of any arbitrator. Any
arbitrator appointed by the AAA shall be either a retired judge with experience
in international commercial cases or a practicing attorney with at least 15
years experience with large commercial cases and experience as an international
arbitrator. The AAA shall send simultaneously to each party an identical list
of at least nine arbitrator candidates, and each party shall be permitted to
strike two names from the list, rank the remaining arbitrators in order of
preference and return the list to the AAA within ten (10) days of the
transmittal date. If a party does not return the list within the time
specified, all persons named therein shall be considered acceptable. From among
the persons who remain on both lists and in accordance with the designated
order of mutual preference, the AAA shall invite the acceptance of an
arbitrator to serve.

         16.5     ARBITRATION PROCEDURES. The hearing on the merits shall be
held as expeditiously as possible, if practicable no later than four (4) months
after the appointment of a single arbitrator or five (5) months after the
appointment of the third arbitrator, as applicable. The hearing shall, if
practicable, last no longer than ten (10) days, which shall be consecutive, if
possible. The award, which shall be in writing and shall briefly and concisely
state the findings of fact and conclusions of law on which it is based, shall
be rendered, if practicable, within twenty (20) days of the close of the
hearing. In rendering an award, the arbitrator(s) shall be required to follow
the law of the State of California. The arbitrator(s) are not empowered to
award damages in excess of compensatory damages and each party hereby
irrevocably waives any right to recover such damages with respect to any
dispute resolved by arbitration. The arbitrator(s) shall have the authority to
award the costs of the arbitration (including attorneys' fees and expenses) to
the prevailing party. The award shall be final and binding upon the parties and
shall be the sole and exclusive remedy between the parties regarding any
claims, counterclaims, issues or accounting presented to the arbitral tribunal.
Judgment upon any award may be entered in any court having jurisdiction
thereof. Any costs or fees (including attorneys' fees and expenses) incident to
enforcing the award shall be charged against the party resisting such
enforcement.

         16.6     EFFECT OF ARBITRATION. By agreeing to arbitration, the
parties do not intend to deprive any court of its jurisdiction to issue a
pre-arbitral injunction, pre-arbitral attachment or other order in aid of
arbitration proceedings and the enforcement of any award. Without prejudice to
such provisional remedies as may be available under the jurisdiction of a
national court, the arbitral tribunal shall have full authority to grant
provisional remedies or modify or vacate any temporary or preliminary relief
issued by a court, and to award damages for the failure of any party to respect
the arbitral tribunal's orders to that effect.

         16.7     STATUTE OF LIMITATIONS. The statute of limitations of the
State of California applicable to the commencement of a lawsuit shall apply to
the commencement of an arbitration hereunder, except that no defenses shall be
available based upon the passage of time during any negotiation or mediation
called for by the preceding paragraphs of this Article 16.

         16.8     SERVICE OF PROCESS. The Company and each Member agrees that
service by registered or certified mail, return receipt requested, delivered to
such party at the address provided in Section 17.10 (Notices) will be deemed in
every respect effective service of process upon such Person for all purposes of
these provisions relating to mediation and arbitration. The Company and each
Member irrevocably submits to the jurisdiction of the courts of the State of
California and to any federal court located within such state for the purpose
of any action or judgement with respect to this Agreement, regardless of where
any alleged breach or other action, omission, fact or occurrence giving rise
thereto occurred. The


                                      43
<PAGE>

Company and each Member hereby irrevocably waives any claim that any action or
proceeding brought in California has been brought in any inconvenient forum.

         16.9     ADDITIONAL ARBITRATION PROVISIONS. The Company and each
Member shall take all actions necessary for awards and other judgements
resulting from the provisions set forth above to be recognized and enforceable
in the respective jurisdictions of organization of the Company, the Members and
the other parties to the Related Documents and, to the extent necessary, in
other jurisdictions in the Territory.

         16.10    AVAILABILITY OF EQUITABLE RELIEF. Notwithstanding the
foregoing provisions of this Article 16, the Company and the Members
acknowledge that a material breach of this Agreement, the Program Supply
Agreement or the Distribution Agreement by a party thereto may result in
irreparable harm to the Company or a Member for which there is no adequate
remedy at law. Accordingly, if the Company or any Member reasonably believes
that the Company or another Member, as the case may be, (i) has materially
breached this Agreement, the Program Supply Agreement or the Distribution
Agreement and (ii) said breach will create irreparable harm to such Person for
which there is not adequate remedy at law, the allegedly harmed party shall be
entitled to preliminary, temporary or permanent equitable relief in any Federal
or State Court of competent jurisdiction located in the State of California.

                                  ARTICLE 17
                                 MISCELLANEOUS

         17.1     ADDITIONAL DOCUMENTS AND ACTS. Each Member agrees to execute
and deliver such additional documents and instruments and to perform such
additional acts as may be necessary or appropriate to effectuate, carry out and
perform all of the terms, provisions, and conditions of this Agreement and the
transactions contemplated hereby.

         17.2     TIME IS OF THE ESSENCE. All dates and times in this Agreement
are of the essence.

         17.3     REMEDIES CUMULATIVE. The remedies under this Agreement are
cumulative and shall not exclude any other remedies to which any Person may be
lawfully entitled.

         17.4     CURRENCY; PAYMENTS.

                  17.4.1   All amounts due from one Member to another Member,
from the Company to one or more Members or from one or more Members to the
Company pursuant to this Agreement and the other Related Documents shall be
paid in U.S. Dollars. If any portion of such payment is calculated on the basis
of revenues received in other currencies, such revenues shall be calculated
using the exchange rate published in the Wall Street Journal or as quoted by
the Central Bank of any country in the Territory, as of the business day
immediately preceding the date on which the payment initially is due. Such
exchange rate shall also apply to any portion of a payment which is permitted
to be deferred, regardless of whether such deferred payment is represented by a
promissory note or other instrument.

                  17.4.2   All payments owing pursuant to this Agreement and
the other Related Documents will be made by wire transfer of immediately
available funds, net of any withholding required by applicable law. Each Member
and the Company will from time to time designate one or more accounts into
which such payments will be made and may designate one or more Affiliates to
receive such payments.


                                      44
<PAGE>

                  17.4.3   Unless otherwise indicated, any payment hereunder or
under the other Related Documents not made when due will bear interest from the
date due to and including the date of payment in full at a rate equal to the
Reference Rate as in effect on the date payment was due.

                  17.4.4   Each Member agrees for the benefit of the other
Members that if any payment owing by it under this Agreement is precluded or
limited by a restriction imposed by the jurisdiction of organization or
operation of such Member or the jurisdiction where such Member's funds are
deposited, then an Affiliate of such Member not subject to such restriction
shall make the required payment.

         17.5     GOVERNING LAW. This Agreement has been negotiated and entered
into in the State of California and all questions with respect to this
Agreement and the relationships of the parties hereunder will be governed by
the internal laws of the State of California, regardless of the choice of law
principles of California or any other jurisdiction.

         17.6     AUTHORITY. Each Member represents that (i) it has full power
and authority to enter into and perform this Agreement, (ii) this Agreement is
the valid and binding obligation of such Member, enforceable against it in
accordance with its terms, and (iii) the performance by such Member of its
obligations under this Agreement does not violate any law, rule or regulation
binding on such Member or such Member's charter documents.

         17.7     ASSIGNMENT; NO THIRD PARTY BENEFICIARY. Neither the Company
nor any Member shall assign its rights or delegate its obligations hereunder
without written consent of all of the Members except to an Affiliate of the
Company or such Member; provided that no such assignment shall relieve the
assignor of its obligations. The provisions of this Agreement are for the
benefit only of the Company and the Members, and no third party may seek to
enforce or benefit from these provisions except that the Persons indemnified by
the Company pursuant to Section 13.1 shall be third party beneficiaries of this
Agreement with respect to such Section only and shall have independent standing
to enforce or benefit from such Section. References to a party by name herein
shall also be deemed to be references to such party's permitted successors and
assigns.

         17.8     AGREEMENT NEGOTIATED. The Members are sophisticated and have
been represented by lawyers throughout the negotiation and execution of this
Agreement who have carefully negotiated the provisions hereof. As a
consequence, the parties do not believe the presumption of California Civil
Code Section 1654 and similar laws or rules relating to the interpretation of
contracts against the drafter of any particular clause should be applied in
this case and therefore waive its effects.

         17.9     WAIVERS; REMEDIES CUMULATIVE, AMENDMENTS, ETC.

                  17.9.1   No failure or delay by the Company or any Member in
exercising any right, power or privilege under this Agreement shall operate as
a waiver thereof nor shall any single or partial exercise by any of them of any
right, power or privilege preclude any further exercise thereof or the exercise
of any other right, power or privilege.

                  17.9.2   The rights and remedies herein provided are
cumulative and not exclusive of any rights and remedies provided by law.

                  17.9.3   No provision of this Agreement may be amended,
modified, waived, discharged or terminated, other than by the express written
agreement of all of the Members nor may any breach of any provision of this
Agreement be waived or discharged except with the express written consent of
the party(ies) not in breach.


                                      45
<PAGE>

         17.10    NOTICES. All notices, requests, demands and other
communications required to be given under this Agreement shall be in writing
and shall conclusively be deemed to have been duly given to each Member (a)
when hand delivered, (b) the next business day if sent by a generally
recognized overnight courier service that provides written acknowledgement by
the addressee of receipt, or (c) when received, if sent by facsimile (with
appropriate answer back) or other generally accepted means of electronic
transmission addressed as follows:

                  If to PEGI to:

                  Playboy Entertainment Group, Inc.
                  Attention:  President
                  2706 Media Center Drive
                  Los Angeles, CA 90065
                  United States of America
                  Fax Number:  (323) 276-4500

                  with a copy to:

                  Playboy Enterprises, Inc.
                  Attention:  General Counsel
                  680 North Lake Shore Drive
                  Chicago, IL 60611
                  United States of America
                  Fax Number:  (312) 266-2042

                  if to Lifford to:

                  Lifford International Co. Ltd.
                  c/o Claxson Interactive Group Inc.
                  Attention:  General Counsel
                  404 Washington Avenue
                  8th Floor
                  Miami Beach, Florida 33139
                  Fax Number:  (305) 894-3606

                  with a copy to:

                  L. Kevin O'Mara, Esq.
                  Clifford Chance US LLP
                  200 Park Avenue
                  New York, New York 10166
                  United States of America
                  Fax Number:  (212) 878-8375


                                      46
<PAGE>

                  if to the Company to:

                  Playboy TV - Latin America, LLC
                  c/o Claxson Interactive Group Inc.
                  Attention:  General Counsel
                  404 Washington Avenue
                  8th Floor
                  Miami Beach, Florida 33139
                  Fax Number:  (305) 894-3606

                  with copies to PEGI and Claxson

or to such other address, or facsimile transmission number as the relevant
addressee may hereafter by notice hereunder substitute.

         17.11    PUBLIC ANNOUNCEMENTS. Unless otherwise unanimously agreed by
the Management Committee or as required by law or by the stock exchange on
which any Member's stock, or the stock of any direct or indirect parent of a
Member, is traded, no public announcement will be made by any of the Company,
any Member, any Manager, the General Manager or any other officer of the
Company or any of their respective Affiliates with respect to the subject
matter of this Agreement.

         17.12    SURVIVAL. Notwithstanding the termination of this Agreement,
the dissolution of the Company, or a Member's ceasing to be a Member under this
Agreement, the following sections of this Agreement, as set forth as of the
Effective Date or as hereafter amended by agreement in writing signed by both
PEGI and Lifford, shall survive indefinitely and be enforceable by PEGI or
Lifford: Section 12.7, Section 13.1, Article 14, Article 16 and this Section
17.12.

         17.13    CONFIDENTIALITY. Unless otherwise unanimously agreed by the
Management Committee or as required by law or by the stock exchange on which
any Member's stock, or the stock of any direct or indirect parent of a Member,
is traded, no public announcement will be made by any of the Company, any
Member, any Manager, the General Manager or any other officer of the Company or
any of their respective Affiliates with respect to the subject matter of this
Agreement.

                  17.13.1  GENERAL CONFIDENTIALITY REQUIREMENTS. Each Member
shall and shall cause its Affiliates to, maintain the confidentiality of all
information of a confidential or proprietary nature, which it may have or
acquire regarding customers, business, finances, assets or affairs of the
Company or the other Members or its Affiliates, except for any information,
which is (a) generally available to the public or becomes generally available
to the public other than through disclosure in violation of this Agreement, (b)
required to be disclosed by applicable law or to enforce the provisions of this
Agreement and the Related Documents, or (c) disclosed to its representatives
(which term shall be deemed to include their banks, private investors,
independent accountants and legal counsel); provided, such Member causes such
representatives to comply with the confidentiality requirements of this
Agreement.

                  17.13.2  EXCEPTIONS TO THE GENERAL CONFIDENTIALITY
REQUIREMENTS.

                  (a)      Notwithstanding anything stated to the contrary in
Section 17.12.1 above, to the extent any Member invites a third party to
participate as an equity or non-equity investor or other provider of finance (a
"THIRD PARTY") in or to such Member or its respective Affiliates, the Members
agree that such Member may provide to such Third Party and its representatives
(which term shall be deemed to include their banks, private investors,
independent accountants and legal counsel), subject to the execution of an
appropriate confidentiality agreement, copies of (i) this Agreement, (ii) the
Related


                                      47
<PAGE>

Documents, (iii) any other agreement by and between any of the parties that
relate to the Company and transactions contemplated by this Agreement and the
Related Documents, and (iv) any other financial or other information that would
be reasonable in the circumstances for a potential investor to require.
Notwithstanding the foregoing, no such information will be provided until a
confidentiality agreement to the benefit of the Members, in a form and
substance reasonably acceptable to the Members, has been signed by the Third
Party.

                  (b)      Notwithstanding anything stated to the contrary in
Section 17.13.1 above, Claxson, PEI and the Members may provide to any
institutional investors and analysts and their representatives (which term
shall be deemed to include their independent accountants and legal counsel),
subject to the execution of an appropriate confidentiality agreement, such
information concerning the Company as is conventional to assist (i) such
institutional investors in deciding whether to invest or (ii) such analysts to
prepare their reports; provided, however, that no information may be disclosed
to any entity pursuant to this Section 17.13.2(b) without the prior written
consent of the Management Committee, with such consent only being withheld upon
reasonable determination by the Management Committee that the disclosure of
such information would reasonably be expected to cause harm, including with
respect to its competitive position, to the Company.

                            [SIGNATURE PAGE FOLLOWS]


                                      48
<PAGE>

         IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Agreement, effective as of the Effective Date.


                                    PLAYBOY ENTERTAINMENT GROUP, INC.



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


                                    LIFFORD INTERNATIONAL CO. LTD.



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


SOLELY IN CONNECTION WITH ARTICLE 14, SECTION 9.8 AND 12.2.4 AND EXHIBIT G OF
THIS AGREEMENT, AGREED TO AND ACCEPTED BY:


                                    PLAYBOY ENTERPRISES, INC.



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


SOLELY IN CONNECTION WITH ARTICLE 14, SECTIONS 9.9, 9.10 AND 12.2.3 AND EXHIBIT
G, AGREED TO AND ACCEPTED BY:


                                    CLAXSON INTERACTIVE GROUP INC.



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


                                      49
<PAGE>


                                   EXHIBIT A

                     CAPITAL CONTRIBUTION / CAPITAL ACCOUNT
                            AND ADDRESSES OF MEMBERS

                              AS OF APRIL 1, 2002

                               [EXHIBIT OMITTED]


                                      A-1

<PAGE>

                                   EXHIBIT B

                                TAX ALLOCATIONS

                               [EXHIBIT OMITTED]


                                      B-1

<PAGE>

                                   EXHIBIT C

                                 CALCULATION OF
                               FAIR MARKET VALUE

                               [EXHIBIT OMITTED]


                                      C-1
<PAGE>

                                   EXHIBIT D

                         EXISTING AFFILIATE AGREEMENTS

                               [EXHIBIT OMITTED]




                                      D-1

<PAGE>

                                   EXHIBIT E

                             RESTRICTED TRANSFEREES

                               [EXHIBIT OMITTED]


                                      E-1

<PAGE>

                                   EXHIBIT F

                               [EXHIBIT OMITTED]


                                      F-1

<PAGE>

                                   EXHIBIT G

                              REGISTRATION RIGHTS

                               [EXHIBIT OMITTED]


                                      G-1

<PAGE>

                                   EXHIBIT H

                               RELATED DOCUMENTS

                               [EXHIBIT OMITTED]


                                      H-1
<PAGE>

                                   EXHIBIT I

                           EXISTING PTV BV AGREEMENTS

                               [EXHIBIT OMITTED]


                                      I-1

<PAGE>

                                   EXHIBIT J

                           EXISTING PTV US AGREEMENTS

                               [EXHIBIT OMITTED]


                                      J-1