Exhibit 10.2.1

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 asterisks  ("*****"),  and the omitted text has
been filed separately with the Securities and Exchange Commission.

                              AFFILIATION AGREEMENT

      THIS  AGREEMENT made as of the 10th day of February 1993 is by and between
PLAYBOY  ENTERTAINMENT  GROUP,  INC., a Delaware  corporation  ("Network"),  and
SATELLITE SERVICES, INC., a Delaware corporation ("Affiliate").

      1.    RIGHTS:

            (a)  Grant of  Rights.  Network  hereby  grants  to  Affiliate,  and
Affiliate  hereby  accepts,  the  following  rights  relating  to the pay  cable
television  programming service currently known as "PLAYBOY  TELEVISION" (and as
it may be renamed from time to time by Network),  whether in its current  analog
format or in any other format, whether digitized, compressed, modified, replaced
or otherwise manipulated (the "Service"):

                  (i)  the  non-exclusive  right,  but not  the  obligation,  to
exhibit, distribute, subdistribute and authorize the reception of the Service by
cable or other wire transmission  service,  whether now existing or developed in
the future,  ("Cable")  in the  Distribution  Areas (as  defined  herein) of the
System  or  Systems.(as  defined  herein),  if any,  set forth by  Affiliate  on
Schedule 1, as such  Schedule 1, may be added to or deleted  from,  from time to
time, pursuant to the terms of this Agreement;

                  (ii)  the  non-exclusive  right,  but not the  obligation,  to
exhibit, distribute, subdistribute and authorize the reception of the Service by
satellite   master  antenna   television   systems   ("SMATV");   by  multipoint
distribution  services  ("MDS"),  and by  multichannel  multipoint  distribution
services  ("MMDS"),  in (A) Operating Areas (as herein defined) of Systems,  (B)
other  areas of  counties  in which  Operating  Areas of  Systems  are wholly or
partially  located  but which  areas are not the  subject of a cable  television
franchise or license or, if a cable  television  franchise or license  exists in
such area,  the operator of such  franchise or license is not  distributing  the
Service, and (C) areas of counties (which areas are contiguous to counties where
an Operating Area of a System is wholly or partially  located) which are not the
subject of a cable  television  franchise  or license or, if a cable  television
franchise  or license  exists in such area,  the  operator of such  franchise or
license is not  distributing  the Service (the areas  described in (A), (B), and
(C) of  this  Section  1(a)(ii)  shall  be  referred  to  herein  as a  System's
"Distribution Area");

                  (iii) in the event Network offers or grants to any third party
the right to  authorize  the service for  reception,  or the right to  otherwise
exhibit,  distribute, or authorize the reception of the Service, in the District
of  Columbia,   the  United   States,   or  its   territories,   possessions  or
commonwealths, to anyone by means of equipment capable


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of receiving  audio/visual  signals and/or programming directly from a satellite
(other than a C-Band  satellite),  including;  but not limited" to, K or Ku-Band
signals,  whether now  existing or developed  in the future  ("DBS");  or by any
other means of distribution not otherwise  mentioned in this Agreement,  whether
now existing or developed in the future, *****.

                  (iv)  the  non-exclusive  right,  but not the  obligation,  to
exhibit,  distribute (pursuant to the terms of this Agreement) and authorize the
reception  of the Service,  nationwide  (including,  collectively,  in the fifty
United States;  the District of Columbia,  and the territories,  possessions and
commonwealths  of  the  United  States)  to any  person  or  entity  ("Satellite
Subscribers"),  by means of equipment capable of receiving  audio/visual signals
and/or programming  directly from a C-Band satellite,  in an analog format or as
digitized,  compressed,  modified, replaced or otherwise manipulated,  including
tier-bit  access  rights  and the right to  include  tier-bit  :messages  on the
Service on any three (3_)  consecutive  days of each  calendar  month,  provided
that, if such three (3) days are not the first consecutive Thursday,  Friday and
Saturday of a month, Affiliate, (or an affiliate of Affiliate) will give Network
written notice of the days  Affiliate  selects no less than seven (7) days prior
to the first day of the month in which the selected days occur.  Notwithstanding
the  foregoing,  if:  (i) upon the  expiration  of two  years  after the date of
execution of this  Agreement,  Affiliate's  Retail  Satellite Sales (as computed
below) does not equal or exceed  Network's  Retail  Satellite Sales (as computed
below),  then Affiliate's  tier-bit messaging rights hereunder may be terminated
by Network as of the end of such two-year period; or (ii) upon the expiration of
five years after the date of execution  of this  Agreement,  Affiliate's  Retail
Satellite Sales does not equal or exceed Network's Retail Satellite Sales,  then
Affiliate's  tier-bit messaging rights hereunder may be terminated by Network as
of the end of such five-year period.  "Affiliate's Retail Satellite Sales" shall
equal the total dollar  amount of retail  sales (net of  discounts  and credits)
accrued by Affiliate  or an  affiliate of Affiliate  for sales of the Service to
PPV Satellite  Subscribers (as defined herein) and Service Satellite Subscribers
(as  defined  herein)  during the days on which  Affiliate  or an  affiliate  of
Affiliate  exercised  tier-bit  messaging rights in the three months immediately
prior to the  expiration  of the two- or five-year  periods (as the case may be)
set forth above. "Network's Retail Satellite Sales" shall equal the total dollar
amount of retail sales (net of discounts  and  credits),  accrued by Network for
sales of the Service to Satellite  Subscribers  during three-day  periods in the
three  months  immediately  prior to the  expiration  of the  two- or  five-year
periods  (as the case may be) set  forth  above,  which  three-day  periods  are
comparable to the days on which Affiliate exercised tier-bit messaging rights in
such three-month period. Affiliate, or an affiliate of Affiliate,  shall utilize
a port for access to Network's tier-bit for the purpose of tier-bit access which
port is assigned  to, or is owned or leased by,  Affiliate,  or an  affiliate of
Affiliate,  unless Network has consented to the utilization by Affiliate or such
affiliate of Affiliate of another port, with such consent not to be unreasonably
withheld or delayed.

            The rights set forth in this Section 1(a), and elsewhere  under this
Agreement, are also granted hereby to any affiliate of Affiliate. Any use of the
Service  under this  Agreement  by such an  affiliate  of  Affiliate,  or by any
permitted subdistributee, shall be subject to the obligations and limitations of
this Agreement. As used in this


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<PAGE>

Agreement,  an  "affiliate of  Affiliate"  shall include any entity  meeting the
requirements  of  paragraphs  1.1, II or III of Exhibit A hereto  regardless  of
whether such entity is a cable television system.

            "Operating  Area"  of a cable  television  system  shall  mean  that
geographic  area  where the owner of the  system is  authorized  by  appropriate
governmental  authority  to  operate  an audio or  video  distribution  facility
through Cable and is operating an audio or video  distribution  facility through
cable within such area; provided, however, that if a franchise or license is not
required for the  distribution  of television  services by Cable in a particular
geographic  area, then the Operating Area of a system shall mean that geographic
area where the system is  operating  regardless  of the presence or absence of a
franchise or license.

            (b) Affiliate  shall have the right,  upon written notice to Network
within  thirty  (30) days  thereof,  to elect to launch the  Service  in, and to
include under this Agreement, any cable television system which meets the System
Qualifications of Exhibit A hereto  (individually,  a "System" or, collectively,
"Systems").  Upon receipt of such a notice, Schedule 1 hereof shall be deemed to
include such System(s) as of the later of: (i) the launch date of the Service on
such System(s), (ii) the date such System(s) first satisfies the requirements of
Exhibit A hereto,  or (iii) the date set forth in such  notice if such notice is
properly  given  pursuant  to Section 11 of this  Agreement.  Any  then-existing
agreement with Network  applicable to any such System or Systems for carriage of
the Service shall be  extinguished  and shall cease to be effective with respect
to such System as of the effective  date of: the addition or deemed  addition of
such System to Schedule 1. Affiliate shall have the right,  in Affiliate's  sole
and absolute  discretion,  to discontinue  carriage of the Service on any or all
Systems,  and to delete any or all Systems from Schedule 1, by providing Network
with no less than sixty  (60) days prior  written  notice of such  deletion  and
discontinuance; provided, however, if such deletion and discontinuance is due to
political,  legal or community pressure,  such sixty (60) days' notice shall not
be required prior to such deletion or  discontinuance  but,  instead,  Affiliate
shall give  notice to Network  and  Network  shall have ten (10) days to propose
and, if agreed to by Affiliate in its sole and absolute discretion, to implement
a plan to cure such pressure.  If such plan is not successful,  as determined by
Affiliate  in its sole and  absolute  discretion,  within  ten (10)  days  after
commencement  of  implementation  of such plan,  then Affiliate may  immediately
discontinue  carriage  of the  Service  from  such  System(s)  and  delete  such
System(s) from Schedule 1. After such discontinuance and deletion, the System(s)
shall cooperate with Network to the extent reasonably necessary to determine the
feasibility  of  re-launching  the Service in such System (s),  which  re-launch
shall be in the sole and absolute discretion of Affiliate.

            (c) Notwithstanding any provision of this Agreement to the contrary,
Affiliate  shall  not  intentionally  authorize  any  use  of the  Service  in a
commercial establishment including; without limitation, any restaurant,  tavern,
bar,  club,  fraternal  organization,  hospital,  correctional  facility  or any
communal  room  in  an  otherwise   residential  building  (including,   without
limitation, any lobby or social room in an apartment house, dormitory,  drilling
rig  or  similar  place);  provided,   however,  that  affiliate  may  authorize
Pay-per-view (as defined herein) exhibitions of the Service and


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<PAGE>

Subscriptions  (as defined  herein) to the Service in sorority,  fraternity  and
dormitory rooms;  provided  further,  that Affiliate may authorize  Pay-per-view
exhibitions of the Service,  but not Subscriptions to the Service, in individual
rooms of transient occupancy,  such as hotel, motel and hospital guest rooms and
jail cells, except that sorority houses, fraternity houses and dormitories shall
not be considered places of transient  occupancy for purposes of this Agreement.
Furthermore,  Affiliate  shall take all  reasonable  precautions to prevent such
impermissible  uses from occurring  through the facilities of a cable television
system which is a System.

            (d) (d) For the first  thirty (30) days  following  commencement  of
carriage of the Service by a System, such System may provide the service, to its
employees,  only,  free of charge  without any obligation to sell or promote the
Service to customers (the "Test Period").  At the end of the Test Period in each
System,  such System may  determine to  terminate  carriage of the Service or to
continue carriage pursuant to the terms of this Agreement.  Any determination by
a System to terminate carriage of the Service will not result in any charge, fee
or penalty to Affiliate or to such System.

      2.    TERM:

            (a)  Unless   terminated  sooner  pursuant  to  the  terms  of  this
Agreement,  the "Term" of this  Agreement  shall consist,  collectively,  of the
Initial Term and any number of Renewal Terms. The Initial Term of this Agreement
shall commence upon the date of execution hereof and shall terminate on December
31, 2001,  unless  terminated  sooner  pursuant to the terms of this  Agreement.
Notwithstanding the foregoing, Network and Affiliate hereby ratify the terms and
conditions  (including,  but not limited to, the payments  made by Affiliate and
affiliates of Affiliate) of carriage of the Service by cable television  systems
that met the System Qualifications of Exhibit A hereto, for the period ending on
the date of execution hereof.

            (b) This Agreement shall automatically renew for successive five (5)
year periods (each,  a "Renewal  Term") after the expiration of the initial Term
and each Renewal Term, unless either,  (i) this Agreement is terminated  earlier
in accordance with the terms hereof, or (ii) Affiliate,  in Affiliate's sole and
absolute discretion, elects to terminate this Agreement pursuant to Section 5(h)
hereof.

      3.    CONTENT OF THE SERVICE:

            (a)  Throughout  the Term,  the  programming  on the  Service  shall
consist of not less than ten (10) hours per day  (initially,  from 8:00 p.m.  to
6:00 a.m.  prevailing  Eastern Time) of high-quality  adult  programming  with a
sexual  theme  and  format,  (including,  but  not  limited  to,  R-rated  (or R
equivalent  non-rated)  and NC-17 rated (or NC-17  equivalent  non-rated)  cable
version motion pictures)  substantially similar to the program schedule attached
hereto as Exhibit B-1. The Service shall not contain any third party promotional
material,   including   without   limitation,   commercials,    advertising   or
infomercials,   except  that  the  Service  may  contain   program   sponsorship
billboards,  or  acknowledgements.  Nothing in this paragraph shall be deemed to
limit  Network's  rights set forth in Section  7(e).  The content of the Service
shall also, be consistent with


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<PAGE>

Network's  standards and practices as of this date,  attached  hereto as Exhibit
B-2.  Notwithstanding  anything  in the  foregoing  which  may  be  inconsistent
herewith,  the  Service  shall  not  contain  any  programming  depicting  rape,
necrophilia;  sadism, sadomasochism,  bondage, incest, bestiality or programming
involving or suggesting sexual activity with, between, or among minors.  Network
shall,  during  each  month of the Term,  send one copy of its  monthly  program
schedule to Affiliate, in care of: Vice President, Programming.

            (b)  During  the Term,  Network  shall  provide  the  Service in its
entirety to Affiliate. When the phrase "in its entirety" is used in this Section
3(b), it means that each subscriber of Affiliate  receiving the Service shall be
able to receive,  at all points in time, all  programming  received at each such
point in time by any other  subscriber to the Service,  and if any subscriber to
the service is receiving,  at such point in time,  programming that is different
than the programming  received by any Subscriber (as defined  herein)  receiving
the Service at such point in time,  Affiliate shall have the unconditional right
to elect  which of such  programming  it desires to receive  and  utilize at any
System,  and which of such  programming  it will  authorize for reception by PPV
Satellite  Subscribers (as defined herein) and Service Satellite Subscribers (as
defined herein);  provided,  however, that the foregoing rights of Affiliate and
obligations of Network shall not apply to limited testing by Network in specific
selected systems.

      4.    DELIVERY AND DISTRIBUTION OF THE SERVICE:

            (a) During the Term,  Network shall,  at its own expense,  deliver a
signal  of the  Service  to the earth  station(s)  of each  System,  to each PPV
Satellite  Subscriber and to each Service Satellite  Subscriber and to any other
location  within the continental  United States  designated by Affiliate (in its
sole and  absolute  discretion),  by  transmitting  such  signal  via a domestic
satellite   commonly  used  for   transmission  of  domestic  cable   television
programming  and  shall,  at its own  expense,  continue  to  fully  encode  the
satellite signal of the Service utilizing scrambling technology commonly used in
the domestic cable  television  industry.  Except as otherwise  provided in this
Section 4(a), Affiliate shall, at its own expense,  furnish an earth station and
all other  facilities  necessary for the receipt of such satellite  transmission
and the  delivery of such  signal to the PPV Cable  Subscribers  and/or  Service
Cable  subscribers  (each as defined  herein).  In the event Network  either (i)
changes the  technology  used by Network to encrypt the Service to a  technology
not compatible with a System's or Systems' then-existing descrambling equipment,
or (ii) changes the satellite to which the Service is transmitted to a satellite
not susceptible to viewing by a System's or Systems' then-existing earth station
equipment, Affiliate shall then have the right to delete from Schedule 1 of this
Agreement,  immediately,  such System or Systems, and to discontinue carriage of
the Service,  immediately; from such System or Systems; provided that this right
of deletion and discontinuance  shall not apply to any System or Systems if, (1)
Network agrees, unconditionally, to reimburse such system or Systems, either, as
the case may be,  (A) for the cost to such  System or  Systems  to  acquire  and
install new equipment  necessary  for such System or Systems to  descramble  the
signal of the Service, and/or (B) for the cost to purchase and install equipment
reasonably necessary for such System or Systems to receive the Service from such
new satellite; (2) physical space exists at the then-existing


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<PAGE>

head-end or earth station site to accommodate the necessary  equipment;  and (3)
current zoning and other restrictions permit such additional equipment.

            (b) Network  shall provide to each System  distributing  the Service
and to each PPV Satellite Subscriber and to each Service. Satellite Subscriber a
video and audio signal of the Service of a technical  quality  equivalent to the
greater of the following:  (i) comparable to the technical  quality of audio and
video signals delivered by other cable television  programming services; or (ii)
the technical  standards  set forth in Exhibit c hereof.  If, at any time during
the Term, Network converts to a digital or other non-analog format,  Network and
Affiliate shall negotiate in good faith to agree upon replacement specifications
for Exhibit C; provided,  however,  that the technical  quality of the video and
audio  signal  under  the  replacement  specifications  shall not be of a lesser
technical  quality  than the video  and  audio  signal  quality  of the  service
required  hereunder  in the month  immediately  preceding  the  conversion  to a
digital or other  non-analog  format.  Each System  will  deliver to its Service
Cable  Subscribers and PPV cable  Subscribers a principal video and audio signal
of the  Service  of a  technical  quality  at least  comparable  to other  cable
television  programming  services,  but in no event  higher  than the  technical
quality provided by Network hereunder.

            (c) The  Systems,  if any,  shall carry the Service no less than ten
(10)  hours per day,  but may carry the  Service  any number of hours per day in
excess of ten (10) if the Service is made available for more than ten (10) hours
per day. Other than as specifically permitted in this Agreement,  Affiliate will
not insert or remove any material into or from the Service.  Notwithstanding the
foregoing,  Network  hereby  grants each System which does not, at the pertinent
time,  have  another   pre-emptible  or  unused,   technically  capable  channel
available,  permission  to  pre-empt  such ten (10)  hours  of the  Service  for
exhibition of up to four (4) Pay-per-view,  (as defined below) events (which may
not be movies) per month, (including replays of any such events);  provided that
Affiliate  shall not pre-empt such ten (10) hours of the service for  exhibition
of  Pay-per-view  events or  features,  the  content  of which is  substantially
similar to the content of the Service  Network;  agrees that Affiliate will have
complete  authority to control,  to designate and to change the channel(s)  over
which the Service is to be carried on each system.

            (d) Each System  retains and  reserves  any and all rights in and to
all signal  distribution  capacity contained within the bandwidth of the Service
after  receipt at each  System,  including,  without  limitation,  the  vertical
blanking  interval  and  audio  sub-carriers  (and  any  other  portions  of the
bandwidth that may be created as a result of the conversion of the signal of the
Service to a compressed,  digital or non-analog  format),  Network shall not use
any of the  bandwidth  other than as provided  herein  without the prior written
consent of Affiliate.  Nothing herein shall preclude  Affiliate from  exercising
and exploiting such rights by any means and in any locations  freely and without
restriction;  provided,  however,  that any such use by Affiliate or the Systems
shall not  degrade,  or otherwise  interfere  with,  the picture  quality of the
Service or the audio portion of the Service signal which is the principal  audio
carriage  frequency  of  the  Service.  In  the  event  Affiliate  offers  to  a
third-party  provider of cable television  programming services (which is not an
affiliate of Affiliate) the right to use portions of


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<PAGE>

the signal  distribution  capacity contained within the bandwidth of the Service
(other  than the  portion of the  bandwidth  used by the  service and other than
portions of the  bandwidth  made usable by conversion by Affiliate of the signal
of the Service to a compressed,  digital, or non-analog format), Affiliate shall
give Network prior written notice of the financial  terms and conditions of such
offer.  Upon such notice,  Network shall have a right of first refusal to accept
Affiliate's offer to use portions of the signal distribution  capacity contained
within the  bandwidth  of the Service  (other than the portion of the  bandwidth
used by the service  and other than  portions  of the  bandwidth  made usable by
conversion by Affiliate of the signal of the Service to a  compressed,  digital,
or  non-analog  format) upon the same  financial  terms and  conditions as those
offered by Affiliate to such  unaffiliated  third-party.  Network shall have ten
(10) days after such notice to  exercise  in writing its right of first  refusal
and to accept the grant  pursuant to such  financial  terms and  conditions.  If
Network does not exercise  its right of first  refusal  within such ten (10) day
period,  then Network shall be deemed to have rejected such grant and waived all
rights to such portions of the signal distribution capacity contained within the
bandwidth of the Service signal.

            (e) Each System or other  distribution  facility or  enterprise  may
offer the Service,  (i) as a Subscription (as defined below) service and/or (ii)
as a  Pay-per-view  service  marketed  and sold in any of the ways  described in
Section 5(a)(vii); provided, however, that if the Service is sold in combination
with other programming  services,  the Service shall be sold in no less than ten
(10)  consecutive  hour  segments.  The  Service  (in no less than ten (10) hour
segments) may be sold in combination with other services (e. g., in a package of
services or in a tier);  provided that the Service,  and/or viewing  segments of
the Service as described in Section 5(a)(vii), must always also be available for
sale through each  television  distribution  facility  selling the Service under
this Agreement on a purely a la carte basis.

            (f)  Neither  Affiliate,  nor  any  affiliate  of  Affiliate,  shall
authorize  others to copy,  tape or otherwise  reproduce any part of the Service
without  Network's  prior written  authorization,  and each of the systems shall
take reasonable and practical  security  measures to prevent the unauthorized or
otherwise  unlawful  copying,  taping or other  reproduction  of the  Service by
others through the facilities of the system.  Affiliate shall not be responsible
for home taping by anyone viewing the Service.  Network  acknowledges  that this
Section  4(f) does not restrict  Affiliate's  or any  affiliate  of  Affiliate's
practice of (i) connecting its subscribers,  videotape recorders, video cassette
recorders,  or other devices  susceptible  to use for home  duplication of video
programming  to the  facilities of a System;  or (ii)  promoting home taping for
personal use by Subscribers (as defined below).

            (g) Network hereby grants  Affiliate the right to receive the signal
of  the  Service,   to  digitize,   replace,   compress,   modify  or  otherwise
technologically  manipulate the signal, and to transmit the signal as so altered
(the "Altered  Signal") to a satellite,  or to a location within the continental
United States designated by Affiliate (in its sole and absolute discretion), for
redistribution  to terrestrial or other reception sites capable of receiving and
utilizing  the Altered  Signal.  Network  hereby  grants  Affiliate the right to
deliver the Altered Signal (without substitutions, delays or preemptions (except


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<PAGE>

as otherwise  permitted under Section 4(c) of this  Agreement)) for the uses set
forth in  Section  1(a) of this  Agreement,  provided  that no such  alteration,
transmission,  redistribution,  reception  or other  use will  cause a  material
change in a  viewer's  perception  of the  principal  video or  principal  audio
presentation of the Service. Furthermore, Network shall not change the signal of
the  Service  in such a way as to  technically  or  technologically  defeat,  or
otherwise  interfere  with,  Affiliate's  rights under this Section 4(g). In the
event  Network  interferes  with or otherwise  prevents  receipt,  digitization,
compression,  modification,  manipulation  or  utilization  of the signal of the
Service by  Affiliate  pursuant to this Section  4(g),  and fails to remedy such
interference  within fifteen (15) days after written notice of such interference
is given by Affiliate,  then Affiliate shall have the right to delete any or all
Systems  from  Schedule 1 of this  Agreement,  immediately,  and to  discontinue
carriage, immediately, of the Service on any or all such Systems.

      5.    FEES:

            (a) In  consideration  of the terms and conditions set forth herein,
Affiliate shall, subject to the provisions of Section 5(f) and Section 7(b), pay
the Fees (as def fined herein) set forth below.  Each of the four  categories of
Fees defined below (PPV Satellite Fees,  Service  Satellite Fees, PPV Cable Fees
and Service Cable Fees) shall be calculated, stated and reported separately from
the others.  As used in this  Agreement,  the following terms have the following
meanings:

                  (i) "PPV  Satellite  Subscriber"  means  someone who, (1) is a
Satellite  Subscriber,  (2)  receives a complete  and  technically  satisfactory
viewing  of a  viewing  segment  of the  Service  as a PPV  service,  and (3) is
authorized  to receive the Service by or through  Affiliate  or an  affiliate of
Affiliate  pursuant to the terms of this  Agreement.  "PPV  Satellite  Fees" are
those Fees  payable by  Affiliate to Network in  connection  with sales!  of the
Service to PPV Satellite Subscribers.

                  (ii) "Service Satellite  Subscriber" means someone who, (1) is
a Satellite subscriber,  (2) utilizes the Service as a Subscription service, and
(3) is authorized to receive the service by or through Affiliate or an affiliate
of Affiliate  pursuant to the terms of this Agreement.  "Service Satellite Fees"
are those Fees payable by Affiliate to Network in  connection  with sales of the
Service to service Satellite Subscribers.

                  (iii)  "PPV  Cable  Subscriber"  means  someone  who,  (.1) is
provided  the  Service by or through  Affiliate  or an  affiliate  of  Affiliate
pursuant to the terms of this Agreement, (2) receives a complete and technically
satisfactory  viewing of a viewing segment of the Service as a PPV service,  and
(3)  receives  the Service by means other than  Satellite.  "PPV Cable Fees" are
those Fees  payable by  Affiliate  to  Network in  connection  with sales of the
Service to PPV Cable Subscribers.

                  (iv) "Service Cable Subscriber" means someone who (1) receives
the  Service by means  other  than  Satellite,  (2)  utilizes  the  Service as a
Subscription service, and (3) receives the Service by or through Affiliate or an
affiliate of


                                       8
<PAGE>

Affiliate  pursuant  to the terms of this  Agreement.  "Service  Cable Fees" are
those Fees  payable by  Affiliate  to  Network in  connection  with sales of the
service to Service Cable Subscribers.

                  (v)   "Subscribers"   mean,   collectively,    PPV   Satellite
Subscribers,  Service Satellite  Subscribers,  PPV Cable Subscribers and Service
Cable Subscribers.

                  (vi) "Fees" means,  collectively,  PPV Satellite Fees, Service
Satellite  Fees,  PPV Cable Fees and Service  Cable Fees payable by Affiliate to
Network  during the Initial Term.  Fees payable by Affiliate to Network during a
Renewal Term are referred to herein as Renewal Fees.

                  (vii)  "Pay-per-view"  or "PPV" means the  authorization  of a
subscriber  (such as a PPV  Satellite  Subscriber  or PPV Cable  Subscriber)  to
receive at least one  viewing  segment of the  Service  for a fee  separate  and
distinct  from  fees  paid by such  subscriber  for  other  television  or audio
services.  Viewing  segments may  include,  but are not limited to, any five (5)
consecutive hour segment,  any reasonable  portion of a single night's (or days)
performance of the Service, pay-per-night, pay per-weekend, or any other segment
of the Service representing a reasonable viewing period.

                  (viii)  "Subscription" means the authorization of a subscriber
(such as a Service Cable Subscriber or Service Satellite  Subscriber) to receive
the Service as a subscription  service (on a monthly basis,  on an annual basis,
or on some other basis representing a reasonable  subscription period) either on
an a la carte basis or as part of a package of other services, or both.

                  (ix) "Addressable  Subscriber" means a cable television system
subscriber  whose  television set is connected on the  subscriber's  premises to
equipment operated by Affiliate,  or an affiliate of Affiliate,  that allows the
channel  on  which  the  service  is  received  to be  turned  on or off  (i.e.,
"authorized"  or  "de-authorized")  from a central  location,  controlled by the
operator of the pertinent System or such operator's agent or designee.

                  (x) "Gross  Receipts"  means the amount billed for the Service
to  a  PPV  Cable  Subscriber,  PPV  Satellite  Subscriber,   Service  Satellite
Subscriber or Service Cable  Subscriber (as the case may be) less all applicable
taxes,  franchise  fees or other  charges,  levies  or  assessments  imposed  by
governmental  entities or agencies thereof  attributable to the purchase or sale
of the Service or any portion thereof.

                  (xi)  "Network  Share"  means that  portion of Gross  Receipts
which is payable by  Affiliate  to Network as Fees or Renewal  Fees  pursuant to
this Agreement.

                  (xii) "Gross Receipts Per Addressable  Subscriber"  mean Gross
Receipts  attributable to purchases  (including  Pay-per-view  and  subscription
purchases) of the Service in a System in a Reporting  Period (as defined  below)
divided by the number of  Addressable  Subscribers in such System as of the last
day of such Reporting Period (as


                                       9
<PAGE>

determined by Affiliate on the first day of the calendar  quarter which includes
said last day of the  pertinent  Reporting  Period,  or as adjusted  pursuant to
Section 5(d) hereof).

            (b) Subscription

                  (i) For each calendar month during the indicated calendar year
during the Initial  Term,  Affiliate  will pay  Network a Service  Cable Fee per
Service Cable Subscriber in such month in an amount equal to the following:

                                                Service Cable Fee
        For the Calendar Year              Per Service Cable Subscriber
        ---------------------              ----------------------------

                 1992                                 *****
                 1993                                 *****
                 1994                                 *****
                 1995                                 *****

For each  calendar  month  during the  calendar  years of the Initial Term after
1995,  Affiliate  will  pay  Network  a  Service  Cable  Fee per  Service  Cable
Subscriber in such month equal to the greater of (A) *****,  or (B) ***** of the
Gross Receipts  attributable to each such Service Cable Subscriber,  except that
such ***** shall be subject to reduction as provided in Section 5(d) below. When
the Service is sold to a Service  Cable  Subscriber  in  combination  with other
services for a package  charge (as, for example,  in a tier or in a package of a
la carte or other  services),  the Gross Receipts deemed to be attributable to a
Service  cable  subscriber  for the  Service  shall be equal to the total  Gross
Receipts  for the tier or  package  of  services  sold in  combination  with the
service,  multiplied  by a fraction,  the  numerator  of which is the a la carte
retail charge for the service  otherwise charged by the pertinent System and the
denominator  of which is the  numerator  plus  the  aggregate  of the a la carte
retail charges  otherwise charged by the pertinent System for the other services
included in the tier or package of a la carte or other services.

                  (ii) During the Initial  Term,  Affiliate  shall pay a monthly
Service  Satellite  Fee  to  Network-per  Service  Satellite  Subscriber  in the
indicated  calendar  year of the amount  indicated  (regardless  of whether such
Service  Satellite  Subscribers  purchase  the Service  alone,  as an a la carte
service  or as part of a tier or  package  of a la carte or other  services  and
regardless  of the  amount  of  Gross  Receipts  attributable  to  such  Service
Satellite Subscribers) as follows:

                                                                For any and
                     For the First        For the next          all
                     24,999 Service       15,000 Service        additional
                     Satellite            Satellite             Service
                     Subscribers          Subscribers           Subscribers
                     ----------------     ----------------      ----------------

1993                 *****                *****                 *****
1994                 *****                *****                 *****


                                       10
<PAGE>

                                                                For any and
                     For the First        For the next          all
                     24,999 Service       15,000 Service        additional
                     Satellite            Satellite             Service
                     Subscribers          Subscribers           Subscribers
                     ----------------     ----------------      ----------------

1995                 *****                *****                 *****
1996                 *****                *****                 *****
1997                 *****                *****                 *****
1998                 *****                *****                 *****
1999                 *****                *****                 *****
2000                 *****                *****                 *****
2001                 *****                *****                 *****

                  (iii) The number of service  Satellite  Subscribers or Service
Cable  Subscribers  (as the case may be) for whom Affiliate shall pay each month
shall be the  average  of (A) the  number of Service  Satellite  Subscribers  or
Service  Cable  Subscribers  (as the case may be) on the first day of the month,
and (B) the number of Service Satellite Subscribers or Service Cable Subscribers
(as the case may be) on the last day of the month. Service Satellite Subscribers
or Service  Cable  Subscribers  (as the case may be) shall include each occupied
dwelling (whether a single family home or a multiunit  building),  drilling rig,
nursing home room,  dormitory  room,  fraternity  room,  sorority room, or other
location in which the Service is received.  If Affiliate provides the Service to
multiple dwelling complexes, including, but not limited to, apartment buildings,
on a bulk-rate  basis,  the number of Service  Satellite  Subscribers or Service
Cable  Subscribers  (as the case may be)  attributable  to each  such  bulk-rate
subscriber shall be equal to the total monthly retail rate charged a complex for
the Service divided by the standard  monthly retail rate charged a non-bulk rate
Service  Satellite  Subscriber or Service Cable  Subscriber (as the case may be)
for  the  service  in  the  applicable  System  or by  the  pertinent  satellite
distributor,  as the  case may be.  The  monthly  number  of  Service  Satellite
Subscribers  and the monthly number of Service Cable  Subscribers  shall each be
calculated, stated and reported separately from the other.

                  (iv) The Service Cable Fees and Service Satellite Fees payable
by Affiliate to Network hereunder shall be due and payable  forty-five (45) days
after the end of the calendar month to which they relate.

            (c) PPV

                  For  each  PPV  Cable   Subscriber   and  each  PPV  Satellite
Subscriber  who  receives  and  pays  for  one  (1)  complete  and   technically
satisfactory  viewing  of one (1)  viewing  segment  of the  Service  during the
Initial  Term,  Affiliate  will pay Network a PPV Cable Fee or PPV Satellite Fee
(as the case may be) in an amount equal to the greater of: (A) *****, or (B) the
Network  Share of the Gross  Receipts  paid by such PPV Cable  Subscriber or PPV
Satellite  Subscriber  to Affiliate.  "Network  Share" shall equal ***** percent
***** of the Gross  Receipts  paid by each PPV  Satellite  Subscriber  and shall
equal  *****  percent  *****  of the  Gross  Receipts  paid  by each  PPV  Cable
Subscriber,


                                       11
<PAGE>

except that such ***** percent ***** paid by each PPV Cable  Subscriber shall be
subject to reduction as provided in Section 5(d) below.

            (d) During the Initial Term, the Network Share in any System for Any
Reporting  Period shall be subject to reduction (from the ***** percent ***** of
Gross Receipts  otherwise payable by Affiliate to Network  hereunder) based upon
the  aggregate  number  of cents in Gross  Receipts  attributable  to PPV  Cable
Subscribers  and Service  Cable  Subscribers  in such  System in such  Reporting
Period as measured against the number of Addressable  Subscribers in such System
during such Reporting Period (provided,  however, that the number of Addressable
Subscribers  in each  System  shall be  determined  by  Affiliate  on the  first
calendar  day of each  calendar  quarter  and each such  number  of  Addressable
Subscribers  so  determined  shall be applied for each  Reporting  Period  which
concludes during that pertinent calendar quarter; provided, however, that if the
number of Addressable  Subscribers in a System  increases or decreases more than
*****  percent  ***** in a  calendar  quarter,  then the  number of  Addressable
Subscribers  attributable  to such System for Reporting  Periods which  conclude
during  such  calendar  quarter  shall be equal to the  average of the number of
Addressable  Subscribers  in  such  System  on the  first  calendar  day of such
calendar quarter and the number of Addressable Subscribers in such System on the
first calendar day of the succeeding calendar quarter;  provided,  further, that
Affiliate  shall make  appropriate  adjustments  in its  payments  to Network to
properly pay under this provision), as follows:

For the calendar years 1993, 1994, and 1995:

If the Gross Receipts Per                            Then, the Network Share For
Addressable Subscriber In A                          Such Calendar Month for
System in a Calendar Month                           purchases by PPV Cable
Is:                                                  Subscribers in such System
                                                     shall be:

(A)   equal to or greater than $.42 but
      less than $.62                                 (A-1)    *****
(B)   equal to or greater than $.62                  (B-1)    *****

For the calendar years 1996, 1997 and 1998:
If the Gross Receipts Per                            Then the Network Share For
Addressable Subscriber In A                          Such Calendar Month for
System in a Calendar Month                           purchases by PPV Cable
Is:                                                  Subscribers and Service
                                                     Cable Subscribers in such
                                                     System shall be:

(C)   equal to or greater than $.46 but
      less than $.68                                 (C-1)    *****


                                       12
<PAGE>

(D)   equal to or greater than $.68                  (D-1)    *****

For the calendar years 1999, 2000 and 2001:
If the Gross Receipts Per                            Then the Network Share For
Addressable Subscriber In A                          Such Calendar Month for
System in a Calendar Month                           purchases by PPV Cable
Is:                                                  Subscribers and Service
                                                     Cable Subscribers in such
                                                     System shall be:

(E)   equal to or greater than $.50 but
      less than $.75                                 (E-1)    *****
(F)   equal to or greater than $.75                  (F-1)    *****

            (e) The PPV Cable Fees and PPV  Satellite  Fees payable by Affiliate
to  Network  hereunder  for each PPV  Cable  Subscriber  and each PPV  Satellite
Subscriber who receives and pays for one complete and  technically  satisfactory
Pay-per-view  viewing of a segment of the  Service  pursuant  to this  Agreement
during a Reporting  Period  during the Term shall be due and payable  forty-five
(45) days after the last day of the calendar  month which  includes the last day
of the Reporting  Period.  The term "Reporting  Period" shall mean the days from
the end of each  System's or Satellite  distributor's  prior  monthly  reporting
period  (which  date may vary in each System or for each  Satellite  distributor
from the 20th of the calendar  month to the last day of the  calendar  month) to
the  end of  the  System's  or  Satellite  distributor's  then  current  monthly
reporting period.  Affiliate shall have the right,  however, to make adjustments
to any month's  payment in an amount equal to the portion of a previous  month's
PPV cable Fees and/or PPV  Satellite  Fees which  represents an  overpayment  or
underpayment.

            (f)  Notwithstanding  any other  provision of this  Agreement to the
contrary,  no Fees shall be payable  for PPV  Satellite  Subscribers,  PPV Cable
Subscribers,  Service Satellite Subscribers or Service Cable Subscribers if such
Subscribers  are (i)  employees of Affiliate or of an affiliate of Affiliate who
are not  charged  for the  Service;  or (ii)  public  officials,  administrative
personnel or public  buildings  that are not charged for the  Service;  or (iii)
subscribers who have not paid their cable  television bill for a given month and
are  subsequently  disconnected;  or (iv)  subscribers  who,  in the good  faith
exercise of  reasonable  judgment by an employee  either of  Affiliate  or of an
affiliate of Affiliate,  are excused from paying for the Service  either because
such  subscriber  claims  that the Service  was not  properly  or  intentionally
ordered or because  such  subscriber  claims  that a  complete  and  technically
satisfactory  viewing of the Service was not received.  In addition,  except for
the  categories of Subscribers  described in (i),  (ii),  (iii) and (iv) of this
paragraph,  Affiliate  shall not  provide  the  Service or any  viewing  segment
thereof to persons who are not charged therefor.


                                       13
<PAGE>

            (g) Any  undisputed  PPV  Satellite  Fees,  PPV Cable Fees,  Service
Satellite Fees and Service Cable Fees payable by Affiliate to Network hereunder,
and any  undisputed  amounts  payable  by  Network  to  Affiliate  or any System
pursuant to Section 7 hereof,  that are unpaid  after they are due and  payable,
shall  accrue  interest at one and  one-half  percent  (1-1/2%) per month or the
highest  lawful  rate,  whichever  is less,  from the due date until  payment is
received  by Network,  a System or  Affiliate,  (as the case may be);  provided,
however,  that any  dispute  which has the effect of  suspending  the accrual of
interest under this sentence must be a good faith dispute. Each delinquent party
shall be liable  to the  other  party  for all  reasonable  costs  and  expenses
(including,  without  limitation,  reasonable counsel fees,  disbursements,  and
administrative  or court costs) in  connection  with the  collection of any such
overdue  amounts.  In the event of a good faith  dispute  regarding  any Fees or
Renewal  Fees,  no such  disputed  Fees or Renewal  Fees shall be subject to the
terms or conditions of this Section 5(g).

            (h) Network  shall have the right to  renegotiate  the PPV Satellite
Fees, PPV Cable Fees,  Service Satellite  Fees>and Service Cable Fees applicable
to any Renewal Term upon written notice to Affiliate at least twelve (12) months
,prior to the end of the Initial Term or the Renewal Term immediately  preceding
such  Renewal  Term.   Any  such  Renewal  Fees  shall  be  effective  upon  the
commencement of such Renewal Term. Said Renewal Fees shall be effective for such
five (5) year Renewal  Term. If no agreement  regarding  Renewal Fees is reached
upon the expiration of the Initial Term or any Renewal Term, Affiliate may elect
in its sole and absolute  discretion  either to terminate  this  Agreement or to
provide the Service under this  Agreement to  Subscribers at a rate equal to the
Renewal Fee  established  by Network in  connection  with such  renewal and such
subscribers.

      6.    REPORTS:

            (a) For all Reporting Periods after the Test Period, Affiliate shall
send to Network  along with the  payments,  if any, due under  Section 5 hereof,
informational statements on a form mutually acceptable to Affiliate and Network.
Each statement shall set forth  information  necessary to the calculation of the
Fees or  Renewal.  Fees  paid.  Each of the four  categories  of Fees`  shall be
calculated, stated, and reported separately from the others.

                  (i) The  statements  accompanying  each month's  Service Cable
Fees  and  Service   Satellite   Fees,   respectively,   shall  include,   on  a
System-by-System and Satellite  distributor-by-Satellite  distributor basis, the
number of Service Cable  Subscribers and Service  Satellite  Subscribers and, in
the case of Systems, the number of basic subscribers, as of the first day of the
month  and as of the  last  day of the  month,  and  the  average  thereof,  and
commencing in 1996 in the case of Systems,  the Cross Receipts  attributable  to
Service Cable Subscribers, the number of Addressable Subscribers as of the first
calendar  day of the  calendar  quarter  which  includes  the  last  day of such
Reporting  Period,  and the Cross Receipts per  Addressable  Subscriber for each
System;  and such other  information as may be necessary for the  calculation of
the Service Cable Fees and Service Satellite Fees paid.


                                       14
<PAGE>

                  (ii) The  statement  accompanying  each month's PPV Cable Fees
shall include, on a System-by-System  basis, the number of PPV Cable Subscribers
(in the form of the number of Pay-per-view  purchases of the Service); the Cross
Receipts  paid  by  such  PPV  Cable  Subscribers  at  each  price  level;  on a
System-by-System  basis.,  the  number of basic  subscribers,  and the number of
Addressable  Subscribers  as of the first  calendar day of the calendar  quarter
which includes the last day of such Reporting Period, and the Gross Receipts per
Addressable  Subscriber  for each System;  and such other  information as may be
necessary for the calculation of the PPV Cable Fees paid.

                  (iii) The  statement  accompanying  each months PPV  Satellite
Fees shall include the number,  of PPV Satellite  Subscribers in the form of the
number of Pay-per-view purchases of the Service; the Gross Receipts paid by such
PPV Satellite  Subscribers;  and such other  information as may be necessary for
the calculation of the PPV Satellite Fees paid.

                  (iv) In November 1998,  Affiliate  shall provide  Network with
information  necessary  to allow  Network  to  determine  whether  its  right of
termination provided for in Section 9(a)(v)(B) is operable.

            (b) Network shall send to Affiliate,  not later than forty-five (45)
days after the end of each calendar month for which payment  pursuant to Section
7 hereof is due, a statement on a form  mutually  acceptable  to  Affiliate  and
Network which sets forth all pertinent  information to compute the amount due to
Affiliate for such  calendar  month.  Network  shall  deliver such  statement to
Affiliate  prior to or along with the amount payable to Affiliate as provided in
this Agreement.

            (c) Affiliate  and Network each agree to keep and maintain  accurate
books  and  records  of all  matters  directly  relating  to this  Agreement  in
accordance with generally accepted  accounting  principles.  During the Term and
for two (2) years after the  termination or expiration of this  Agreement,  such
books and  records  of each  party  shall be  available  to the other  party for
inspection and audit,  during normal business  hours, at the inspecting  party's
expense and at the other party's  offices,  upon reasonable  notice to the other
party.  Each party's right to perform such audit shall be limited to once in any
nine (9) month  period  during the Term (and,  in the case of Network  audits of
Affiliate,  Network's  rights under this sentence shall consist of one (1) audit
in any nine (9) month period of any System,  whether the audit of such System is
conducted  at the System or at another  office or place of business of Affiliate
or an affiliate of  Affiliate)  and shall be limited to an audit with respect to
amounts to be paid in the then-current  and prior calendar year only,  provided,
however,  that if  Affiliate  requires  that  Network  conduct  such  audits  at
individual  System  locations,  Network  shall  be  limited  to  audits  of  the
then-current and two prior calendar years only. If either party audits the other
party's books  hereunder,  the inspecting  party must make any claim against the
other party within the earlier of, three (3) months after the  inspecting  party
or the inspecting party's  representative  leaves the other party's offices,  or
twenty-four  (24)  months  after the close of the  earliest  month  which is the
subject of such audit or  inspection  (which  twenty-four  (24) months  shall be
extended  to  thirty-six  (36)  months for Systems if  Affiliate  requires  that
Network conduct audits at individual system locations).  Furthermore,  any claim
must


                                       15
<PAGE>

relate to the then-current  calendar year or the immediately  preceding calendar
year only,  provided,  however,  that if Affiliate requires that Network conduct
audits  at  individual  System  locations,   such  claims  must  relate  to  the
then-current calendar year or the immediately preceding two calendar years only.
If a claim is not made within such time,  then all amounts paid during such time
period shall be deemed final and  uncontestable and the inspecting party will be
deemed to have waived its right to collect any  shortfalls  from the other party
for the period(s) audited.

      7.    PROMOTION:

            (a) Commencing  three months after the  commencement  of the sale of
the  Service  to  the  customers  of  any  System,   and  immediately  upon  the
commencement  of the sale of the  Service to  Satellite  Subscribers  under this
Agreement  (as the case may be) Network shall  contribute  $.02 per copy for any
pay-per-view  catalogue or pay-per view guide  utilized by the Systems or by any
Satellite  distributor  of the  Service  under  this  Agreement  which  includes
;listings  for the  Service  and at  least  one  (1),  one  quarter  (1/4)  page
advertisement  for  the  service,  whether  or not a  subscriber  receives  such
catalogue or guide without charge once each calendar  month  throughout the Term
hereof,  each System and each  Satellite  distributor  of the Service under this
Agreement shall be entitled to claim the contribution  from Network provided for
in this  Section  7(a) by  providing.  Network  with  appropriate  documentation
verifying  the quantity and content of the guides or  catalogues  for which such
contribution  is  sought.   Network  shall  remit  such   contributions  to  the
appropriate  Systems and Satellite  distributors  no later than  forty-five (45)
days after receipt of such documentation.

            (b) Notwithstanding the provisions of Section 5 of this Agreement to
the contrary, any System which launches the Service ***** after the Test Period,
if any, that the System carries the Service;  provided,  however,  that the Test
Period, if any, in any System shall terminate immediately upon the first sale of
the service in the System to a customer; provided, further, that Affiliate shall
expend an amount of funds,  in any System  which  launches  the  Service  (which
amount is in the aggregate  equal to or greater than the amount of Service Cable
Fees or PPV Cable Fees *****  during  such *****  period in the  absence of this
paragraph),  either to, (Y) reimburse Affiliate or an affiliate of Affiliate for
the  costs of a market  or  community  research  survey  regarding  programming,
including adult  programming,  undertaken in connection with, or preparatory to,
the launch of the  Service  on the  pertinent  System,  (ii)  acquire  equipment
necessary to descramble the signal of the Service, or (iii) advertise or promote
the Service using methods and expenditures  mutually  agreeable to Affiliate and
Network.   Furthermore,   each  System  shall   provide   Network  with  written
documentation   (such  as  receipts  or  invoices)   reflecting   such  System's
expenditures  under this paragraph no later than  forty-five (45) days after the
ninetieth  day after the  expiration  of the Fee  Waiver  Period.  If and to the
extent that by ninety (90) days after the  expiration of the Fee Waiver  Period,
any System has expended an amount of funds under the preceding sentence which is
less than the  amount of the  Service  Cable  Fees and PPV Cable  Fees so waived
during the Fee Waiver Period,  then the difference  shall be remitted to Network
promptly.  Affiliate  shall not be eligible to take  advantage of this paragraph
more than once for any System.


                                       16
<PAGE>

            (c) Network may not,  without  Affiliate's  prior  written  consent,
undertake marketing tests or surveys,  rating polls or any other research in the
systems in connection with the Service. With respect to any test, survey, rating
poll or research  which  applies to a System or Systems for which  Network seeks
Affiliate's  consent,  Network shall notify Affiliate of the nature and scope of
each such project and, upon  Affiliate's  prior written  consent to such project
(which  consent may be withheld in  Affiliate's  sole and absolute  discretion),
Affiliate  will, to the extent  permitted by applicable lam and company  policy,
cooperate  in  such  research  by  rendering  such  assistance  as  Network  may
reasonably  request and as Affiliate can reasonably  provide,  the cost of which
assistance shall be borne by Network.  Network shall provide Affiliate,  without
cost to Affiliate, with the results of such research to the extent it applies to
z System or Systems.  Furthermore,  Network shall  otherwise keep the results of
all research relating to a System or Systems  confidential  under the provisions
of Section  12 hereof  and shall  retain  the  results  of such  research  in an
aggregate  form  only,  which  results do not  identify  any  subscriber,  cable
television system or cable television operator.

            (d) Network shall have the right to review and approve,  in advance,
any of Affiliate's publicity, and the publicity of any affiliate of Affiliate or
any subdistributee under this Agreement, about the Service, which approval shall
not be unreasonably withheld or delayed.  Affiliate has not and will not acquire
any proprietary  rights in any trade names,  trademarks,  service marks or logos
associated  with Network or its parent  corporation  (the  "Marks") by reason of
this Agreement or otherwise.  Affiliate further  acknowledges the great value of
the goodwill  associated with the Marks and the public renown and recognition of
the same, and that the Marks have a distinctiveness and a secondary meaning that
is firmly  associated in the minds of the trade and general  public with Playboy
Enterprises,  Inc. and/or Network, and that any additional goodwill in the Marks
which may be created  through the use of the Marks by Affiliate shall redound to
the sole benefit of Playboy  Enterprises,  Inc: and/or Network,  as the case may
be.  Affiliate  may use the Marks only for the  promotion  of the  programs  and
program services of Network which Affiliate or any affiliate of Affiliate or any
subdistributee  under  this  Agreement  distributes,  and such  use  shall be in
accordance  with  any  further  clear,  unambiguous,  reasonable  prior  written
instructions  that may be issued by Network from time to time.  Affiliate  shall
submit any  initial  use of the Marks to Network  for  Network's  prior  written
approval at least ten (l0)  working  days prior to their  intended  distribution
which approval  shall not be  unreasonably  withheld or delayed.  Any use of any
Mark that is not consistent  with prior approved uses requires the prior express
written approval of Network;  which approval shall not be unreasonably  withheld
or  delayed.  Any  such  submission  or  request  for  approval  shall  be  made
simultaneously to General Manager,  Playboy Television,  9242 Beverly Boulevard,
Beverly Hills,  California  90210 and to General Counsel,  Playboy  Enterprises,
Inc., 680 N. Lake Shore Drive, Chicago,  Illinois 60611. Network, through either
of such officers,  may,  pursuant to the terms hereof,  disapprove of any use of
any  Marks by  Affiliate,  which  use does  not  meet the  requirements  hereof.
Affiliate will not disseminate any material that has not been approved or deemed
approved by Network in accordance  with the terms hereof.  Network shall use its
best  efforts  to either  approve  or  disapprove  any such use  within  one (1)
business day of Network's receipt of material for approval.  Notwithstanding the
foregoing,  any such  approval  must be  granted  or  withheld  within  five (5)
business days of


                                       17
<PAGE>

Network's  receipt  of  materials  for  approval.  Failure by Network to respond
within five (5)  business  days of Network's  receipt of materials  for approval
will not be deemed approval. However, if Affiliate or any affiliate of Affiliate
or any  subdistributee  under this Agreement  resubmits such materials after the
end of said five (5)  business  day  period,  then  Network  shall  have two (2)
additional  business  days to respond,  after which,  in the absence of response
from Network,  the use of such materials shall be deemed approved.  For purposes
of this Section 7, Network's disapprovals must be given in writing but approvals
may  be  given  telephonically.  Unless  otherwise  specified  by  Network,  all
materials,  involving the Marks shall include the following notice: "PLAYBOY AND
RABBIT HEAD DESIGN ARE MARKS OF AND USED UNDER LICENSE WITH PLAYBOY ENTERPRISES,
INC."

            (e) Network shall not, as a part of the Service,  include any direct
on-air  marketing or sales of products or services,  including,  but not limited
to, sales through "800",  "900" or "976" telephone  services (or other telephone
services which impose a charge in addition to the telephone  service  provider's
charge for placing the call);  provided,  however,  that the Service may contain
commercials  for the  Network  or  merchandise  or  services  offered by Playboy
Enterprises,  Inc.  or a  subsidiary  thereof  ("Network  commercials")  if such
Network  Commercials  do not exceed an  average  (measured  monthly)  of two (2)
minutes  per hour of the  service.  Network  agrees  that in the  event  Network
includes any Network Commercials on the Service in excess of such average of two
(2) minutes per hour,  Network  shall pay to Affiliate  ten percent (l0%) of Net
Sales receipts on all revenues,  merchandise, or services sold to respondents in
the Systems' zip code areas by such  Network  Commercials  in excess of such two
(2) minutes per hour on the Service. For purposes of this paragraph, "Net Sales"
shall mean gross sales less taxes, fees, returns and allowances, freight out and
cash discounts.  Furthermore,  Network agrees that in the event Network does any
direct on-air  marketing and sale of goods,  merchandise or products  offered by
Playboy  Enterprises,  Inc.  or a  subsidiary  thereof,  Network  shall  provide
Affiliate with lists of the names of respondents  from within the zip code areas
of the Systems who respond to such direct on-air marketing and sales, for use by
Affiliate or any System or Systems.  Any amounts payable by Network to Affiliate
hereunder  shall be due and  payable  forty-five  (45) days after the end of the
calendar month during the Term to which such amounts relate.

            (f)  Network  and  Affiliate  hereby   acknowledge  that  (i)  their
interests  are  often in  direct  conflict,  (ii)  their  relationship  is often
adversarial,  and (iii) Network could cause  Affiliate  significant  harm by the
nature  of  Network's  communications  to  Affiliate's  subscribers  or  to  the
governmental  entities or franchise or licensing  authorities whose opinions and
actions  could  adversely  affect  cable  television   systems  affiliated  with
Affiliate.  Therefore,  Network shall not engage in any communications  with any
cable television subscribers or franchise or licensing authority or governmental
entity in the operating Area of any cable television  system which satisfies the
requirements of Exhibit A hereto which would, or could, adversely interfere with
the   relationship   between   Affiliate  or  any  affiliate  of  Affiliate  and
subscribers,   or  the  relationship  between  Affiliate  or  any  affiliate  of
Affiliate,  and any  governmental  entities or community  in any such  operating
Area. This provision shall not apply to any proceeding before any judicial body,
to communications with Congress or any other branch or agency of the Federal


                                       18
<PAGE>

government,  or to the  contents of Playboy  Magazine.  This  Section i(g) shall
survive the  expiration or termination of this Agreement for a period of two (2)
years regardless of the reason for such expiration or termination.

            (g)  Network  shall not  promote  on the  Service  any  other  cable
programming  service which is affiliated  with Network without the prior written
consent of Affiliate.

            (h) Network shall make available to Affiliate, each System, and each
distributor to Satellite Subscribers,  such promotional materials,  at no charge
to Affiliate or to any System,  to be used by  Affiliate,  such Systems and each
distributor  to  Satellite  Subscribers  to  advertise  and  promote the Service
programming,  provided,  however.,  that  Network  shall have no  obligation  to
provide  any such  materials  to  Affiliate  if  Network is not  providing  such
materials to any other cable television system operator or satellite  television
programming  distributor.  Network shall exercise  reasonable efforts to provide
such materials,  if available,  to Affiliate no later than fifty (50) days prior
to the first day of the calendar month to which they relate.

      8.    WARRANTIES AND INDEMNITIES:

            (a) Network represents and warrants to Affiliate that (i) Network is
a corporation  duly organized,  validly  existing and in good standing under the
laws of the State of Delaware; (ii) Network has the power and authority to enter
into this  Agreement  and to fully  perform  its  obligations  hereunder;  (iii)
Network is under no contractual or other legal obligation which shall in any way
interfere with its full,  prompt and complete  performance  hereunder;  (iv) the
individual executing this Agreement on behalf of Network has the authority to do
so; (v) Network is in compliance with all laws, rules, regulations and court and
administrative decrees to which it is subject including, without limitation, all
applicable rules and regulations of the Federal  Communications  Commission (the
"FCC"),  the  non-compliance  with which might adversely affect Affiliate;  (vi)
Network  has,  or will have  acquired  at the time all or part of the Service is
made available to Affiliate, good title to, and/or each and every property right
(whether  relative to tangible or  intangible  property),  or license,  usage or
other right  necessary  or  appropriate  whatsoever  to  effectuate  the acts or
performances  contemplated by, or satisfy the obligations imposed on it pursuant
to, this  Agreement,  including  all permits,  rights,  licenses  and  approvals
necessary,  required or appropriate for any and all performances  through to the
premises  and to  the  listeners  frequenting  the  premises  of  Service  Cable
subscribers,  service  Satellite  Subscribers,  PPV  Cable  Subscribers  and PPV
Satellite  Subscribers;  (vii) neither the Service, any program related thereto,
or  any  component  thereof  is  subject  to,  or  the  subject  of,  any  lien,
encumbrance,  charge,  lis  pendens,  administrative  proceeding,   governmental
investigation,   or  litigation  pending  or  threatened;  (viii)  the  use  and
exhibition of the Service by Affiliate, as contemplated by this Agreement,  will
not  cause  Affiliate  to  violate  any  law,  rule,   regulation  or  court  or
administrative  decree  which  in each  case is  constitutional;  and  (ix)  the
obligations created by this Agreement,  insofar as they purport to be binding on
Network,  constitute legal, valid and binding obligations of Network enforceable
in accordance with their terms.


                                       19
<PAGE>

            (b) Affiliate  represents and warrants to Network that (i) Affiliate
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware;  (ii)  Affiliate  has the power and  authority to
enter into this Agreement and to fully perform its obligations hereunder;  (iii)
Affiliate is under no contractual or other legal  obligation  which shall in any
way interfere with its full, prompt and complete performance hereunder; (iv) the
individual  executing this Agreement on behalf of Affiliate has the authority to
do so;  and (v) the  obligations  created  by this  Agreement,  insofar  as they
purport  to be  binding  on  Affiliate,  constitute  legal,  valid  and  binding
obligations of Network enforceable in accordance with their terms.

            (c) Network  represents  and warrants to Affiliate  that neither the
service  nor any  material  provided  to  Affiliate  by  Network  in  connection
therewith  including.,   without  limitation,  any  advertising  or  promotional
materials,  will  contain any material  which will libel,  slander or defame any
person, and the Service and such additional materials provided to Affiliate will
not, when exhibited,  transmitted or otherwise exploited in accordance herewith,
violate,  infringe upon or give rise to any finally sustained adverse claim with
respect to any contract right,  common law right or any other right of any party
(including,  without limitation, any copyright,  trademark, literary or dramatic
right, music synchronization right, right of privacy or publicity or violate any
law, or (when exhibited by Affiliate as contemplated  hereby) cause Affiliate or
any affiliate of Affiliate to violate any law.

            (d) Network  represents,  covenants,  and warrants  that the Service
complies,  and will  continue to comply,  in all  respects  with the  commercial
matter limitations of the Children's  Television Act of 1990, Public Law 101-937
(October 18, 1990) and the regulations of the FCC promulgated  thereunder as the
same may apply to cable  television  systems and cable  operators,  including 47
C.F.R.  ss. 76.225,  76.305,  and as the same may from  time-to-time  be amended
("Children's   Television   Regulations");   provided   further,   that  Network
represents, covenants and warrants that it will provide to Affiliate all records
demonstrating such compliance under the Children's Television Regulations as are
necessary for Affiliate to timely demonstrate its compliance as a cable operator
with the commercial  matter  limitations and record keeping  requirements of the
Children's Television Regulations, it being acknowledged by Affiliate that as of
the date of this  Agreement,  the  providing of a letter to  Affiliate  pursuant
hereto  substantially  in the form attached hereto as Exhibit D shall constitute
full  compliance  with the  record-keeping  information  requirements  under the
Children's  Television Act regulations existing as of the date hereof;  provided
further  that the Service  contains  neither  commercial  matter nor  children's
programming  as those terms are defined in such  regulations;  provided  further
that Network represents,  covenants and warrants that the Service complies,  and
will continue to comply,  with all origination  cablecasting  regulations of the
FCC,  including but not limited to 47 C.F.R. ss. ss. 76.205 - 76.221  (political
equal time, personal attack, lotteries and sponsorship  identification),  as the
same may from time to time be amended ("Origination Cablecasting Requirements"),
and that Network shall provide  Affiliate all necessary  documentation  required
thereunder  for  Affiliate  to timely  meet its  documentation  and public  file
requirements under the Origination Cablecasting Requirements.  In the event that
any  other  programming  offered  by the  Service  shall  be  among  the kind of
programming which is regulated by federal,


                                       20
<PAGE>

state  or  local  law,  as the same may  apply  to pay  television  systems  and
operators,  then Network shall provide to Affiliate all  statements,  records or
other  documents  reasonably  necessary  for  Affiliate  to  demonstrate  timely
compliance as an operator or distributor with such laws and regulations.

            (e) Affiliate and Network shall each  indemnify,  defend and forever
hold  harmless  the other,  the  other's  affiliated  companies  and each of the
other's (and the other's affiliated companies)  respective officers,  directors,
employees,   partners  and  agents,   against  and  from  any  and  all  losses,
liabilities, claims, costs, damages and expenses (including, without limitation,
fines,  forfeitures,  attorney's fees, disbursements and administrative or court
costs)  arising  out of any  breach by it of any term of this  Agreement  or any
warranty, covenant or representation contained herein.

            (f) Without limiting the provisions of Section 8(e) or Section 8 (g)
hereof,  Network  will  indemnify,   defend  and  forever  hold  Affiliate  ,and
Affiliate's  affiliated  companies',  and each of  Affiliate's  and  Affiliate's
affiliated companies' respective officers,  directors,  employees,  partners and
agents harmless from and against any and all losses, liabilities, claims, costs,
damages  and  expenses  (including,   without  limitation,  fines,  forfeitures,
attorney's fees, disbursements and administrative or court costs) arising out of
the  content of the Service or the use and  delivery of the Service  (including,
but  not  limited  to,  sponsorship,  promotional  and  advertising  spots,  any
background music and anything else inserted by Network or any party acting under
authority of Network),  including,  without limitation, any losses, liabilities,
claims,  costs, damages and expenses based upon any lien,  encumbrance,  charge,
lis pendens,  administrative proceeding,  government investigation or litigation
relating to the Service,  any program  included in the Service or any  component
thereof, or based upon alleged or proven libel, slander, defamation, invasion of
the right of privacy or  publicity,  or violation or  infringement  of copyright
(including  music  performance  rights for any and all  performances  through to
subscribers),  literary or music synchronization rights,  obscenity or any other
form or forms of speech  (whether or not  protected by the  Constitution  of the
United  States or any  State) or  otherwise  arising  out of the  content of the
Service as  furnished  by Network  hereunder  without any  interruption,  delay,
editing or alteration  except as required or otherwise caused by Network.  In no
event  shall  the  foregoing   indemnification   include  any   compensation  or
reimbursement for loss of prospective  profits or anticipated sales arising from
any breach or alleged breach of Network's representations and warranties.

            (g) Without  limiting the provisions of Section 8(e) or Section 8(f)
hereof, Network shall indemnify,  defend and forever hold harmless Affiliate and
Affiliate's  affiliated  companies,  and  each of  Affiliate's  and  Affiliate's
affiliated  companies respective officers,  directors,  employees,  partners and
agents from and against any and all losses, liabilities,  claims, costs, damages
and expenses  (including,  without limitation,  fines,  forfeitures,  attorneys'
fees,  disbursements,  court or  administrative  costs) or any  other  losses or
liabilities  of whatever  nature,  arising from any  violation by Network of the
Origination  Cablecasting  Requirements,  including  required  documentation and
public file requirements, or of the Children's Television.  Regulations,  either
with respect to the


                                       21
<PAGE>

service or with respect to any of the compliance demonstration or record keeping
requirements of the Children's Television Regulations.

            (h) In  connection  with any  indemnification  provided  for in this
Section  8, each party  shall so  indemnify  the other only if such other  party
claiming  indemnity shall give the indemnifying party prompt notice of any claim
or  litigation  to  which  its  indemnity  applies;  it  being  agreed  that the
indemnifying party shall have the right to assume the full defense of any or all
negotiations,   claims  or  litigation  to  which  its  indemnity  applies.  The
indemnified  party will cooperate fully (at the cost of the indemnifying  party)
with the indemnifying  party in such defense and in the settlement of such claim
or litigation,  and the indemnified party shall make no compromise or settlement
of any such claim without the prior written consent of the  indemnifying  party.
The settlement of any claim or action by the indemnified party without the prior
written consent of the indemnifying  party shall release the indemnifying  party
from its obligations hereunder with respects to such claim or action so settled.
In addition,  with regard to any indemnification  relating to any prosecution or
claim arising from an alleged  violation of statutory law concerning the content
of the service,  Network shall so indemnify,  defend and hold harmless Affiliate
as provided for in Section 8(f) hereof, only if each of the following conditions
is met:

            (i) As soon as practicable  after actual receipt by Affiliate's Vice
            President,  Programming,  of  actual  notice  of  commencement  of a
            prosecution or claim involving the content of the Service, Affiliate
            or a  representative  of  Affiliate  shall  notify  both the General
            Counsel's  office  of  Network  in  Chicago  at (312)  751-8000  and
            Network's President in Beverly Hills at (310) 246-4000,  or at other
            numbers  hereafter  specified by Network by giving  Affiliate  prior
            written  notice of such other numbers.  Such telephone  notification
            shall be followed,  within a reasonable  period of time, by a letter
            to Network  containing copies of all papers in the possession of the
            Vice President,  Programming of Affiliate, served in connection with
            such alleged  violation of law and giving  whatever  information  is
            then in actual possession of Affiliate's Vice President, Programming
            regarding the incident.  After said initial  notifications,  Network
            shall  be  solely   responsible   for  further   investigation   and
            information gathering about the incident.

            (ii)  Unless  otherwise  specified  in this  Section 8 (h) , Network
            shall  be  required  to  select  and pay for  counsel  to  represent
            Affiliate in any action relating to the content of the Service,  and
            to which Affiliate is a party defendant, cross-claimant, third-party
            plaintiff, or counterclaimant. If Affiliate elects to engage its own
            counsel (in addition to any counsel selected and paid for by Network
            and  acting as  Affiliate's  counsel)  in  connection  with any such
            prosecution  or claim  described  herein,  it shall do so at its own
            cost and expense. Nothing herein shall abrogate Network's obligation
            to indemnify, defend and hold harmless Affiliate.


                                       22
<PAGE>

            (i)  Network  represents,  warrants  and  covenants  that (i) it has
obtained errors and omissions  liability  insurance covering the Service and all
elements  thereof  from  a  nationally   recognized  insurance  carrier  and  in
accordance  with industry  standards;  (ii) such insurance  shall remain in full
force and  effect  throughout  the Term;  (iii)  Affiliate  shall be named as an
additional  insured on such policy; and (iv) Network will provide Affiliate with
documentation to such effect upon the execution hereof.

            (j) The  representations,  warranties and  indemnities  contained in
this Section 8 shall  continue  throughout  the Term and the  indemnities  shall
survive the expiration or termination of this Agreement regardless of the reason
for such expiration or termination.

      9.    EARLY TERMINATION RIGHTS:

            (a) In addition  to  Network's  other  rights at law or in equity or
pursuant to other  provisions  of this  Agreement,  Network may, by so notifying
Affiliate,  terminate this Agreement:  (i) if Affiliate is in material breach of
this Agreement,  provided,  however,  that if such breach is of the type that is
curable,  then Network shall not exercise its termination or other rights at law
or in equity hereunder unless Network has, by so notifying Affiliate in writing,
given Affiliate at least thirty (30) days to fully cure such material breach and
to demonstrate to Network that such material breach has been cured, and provided
further,  that if such breach is confined to a System or to a limited  number of
Systems,  Network shall have the right to terminate  this  Agreement  only as to
such System or Systems; or (ii) if Affiliate has filed a petition in bankruptcy,
is  insolvent,  or has  sought  relief  under  any law  related  to  Affiliate's
financial condition or its ability to meet its payment obligations;  or (iii) if
any involuntary petition in bankruptcy has been filed against Affiliate,  or any
relief  under any such law has been  sought by any  creditor  (s) of  Affiliate,
unless such involuntary petition is dismissed,  or such relief is denied, within
thirty (30) days after it has been filed or sought;  or (iv) upon 120 days prior
written  notice,  if  Network   terminates   delivery  of  the  Service  to  all
distribution technologies;  provided that if Network commences distribution of a
new service that contains any programming which is substantially  similar to any
programming   included  in  the  Service  within  twelve  (12)  months  of  such
termination., Affiliate may, in its sole and absolute discretion, elect to carry
such new service pursuant to the terms and conditions of this Agreement;  or (v)
if by December 31, 1998,  Affiliate is not then making the Service  available in
Systems   representing   the  lesser  of  (A)  four  million  cable   television
subscribers;  or (B)  Systems  representing  forty  percent  (40%) of the  cable
television  subscribers  in systems  which are then both managed and directly or
indirectly owned at least ten percent (10%) by Tele-Communications, Inc. ("TCI")
or a subsidiary of TCI,  then,  at any time during  January,  1999,  Network may
terminate  this  Agreement  as of the later of 120 days after the giving of such
notice or the minimum time  necessary for Affiliate to terminate its carriage of
the Service in compliance with applicable law.

            (b) In addition to  Affiliate's  other rights at law or in equity or
pursuant to other  provisions  of this  Agreement,  and in addition to any other
right to terminate provided  hereunder,  Affiliate may, by so notifying Network,
terminate  this  Agreement:  (i)  if  Network  is in  material  breach  of  this
Agreement, provided, however, if such breach is


                                       23
<PAGE>

of the type that is curable,  then Affiliate  shall not exercise its termination
or other  rights at law or in  equity  hereunder  unless  Affiliate  has,  by so
notifying  Network,  given  Network at least thirty (30) days from the time such
notice is sent,  to fully  cure  such  material  breach  and to  demonstrate  to
Affiliate that such material breach has been cured; or (ii) if Network has filed
a petition  in  bankruptcy,  is  insolvent  or has sought  relief  under any law
related to  Network's  financial  condition  or its  ability to meet its payment
obligations;  or (iii) if any involuntary  petition in bankruptcy has been filed
against  Network,  or any  relief  under  any such law has  been  sought  by any
creditor(s) of Network,  unless such involuntary petition is dismissed,  or such
relief is denied,  within thirty (30) days after it has been filed or sought; or
(iv) on at least  fifteen  (15) days'  notice in the event that  delivery of the
Service is discontinued  or interrupted for a continuous  period of fifteen (15)
days.

      10.   FORCE MAJEURE:

            Except as herein  provided to the  contrary,  neither  Affiliate nor
Network  shall  have  any  rights   against  the  other  party  hereto  for  the
non-operation  of  facilities  or the  non-furnishing  of the  Service  if  such
non-operation or  non-furnishing is due to an act of God;  inevitable  accident;
fire; lockout;  strike, or other labor dispute; riot or civil commotion;  flood;
hurricane;   tornado;   earthquake;  war;  act  of  government  or  governmental
instrumentality  (whether federal,  state or local); failure of performance by a
common carrier;  failure in whole or in part of technical  facilities;  or other
cause (financial  inability  excepted) beyond such party's  reasonable  control.
Notwithstanding  the foregoing,  in the event of non-operation or non-furnishing
of  the  service,  Affiliate  shall  have  the  right,  immediately,  to  insert
programming of its choice on the channel  otherwise  identified with the Service
until such time as the Service is fully  operational  again.  In addition,  with
respect to Service Cable Subscribers and Service Satellite  Subscribers,  credit
will be given to  Affiliate,  however,  on that portion of the Service  which is
affected  by any  interruption  during any month equal to the product of (x) the
Fees  which  would be due for such month  assuming  no  interruption  of Service
during such month,  multiplied by (y) a fraction,  the numerator of which is the
total number of hours of  interruption  of the Service during such month and the
denominator  of which is the total  number of hours of the  Service  which would
have been  provided  during such month  absent such  interruption(s),  provided,
however,  that such credit shall be given to Affiliate  only if Affiliate  shall
pass on  proportionate  credit to its  Service  Cable  Subscribers  and  Service
Satellite Subscribers, as the case may be.

      11.   NOTICES:

            Any notice or report given under this Agreement shall be in writing,
shall be sent postage  prepaid by  registered or certified  mail return  receipt
requested or by hand or  messenger  delivery,  or by Federal  Express or similar
overnight delivery service, or by facsimile transmission, to the other party, at
the  following  address  (unless  either  party at any time or times  designates
another  address for itself by  notifying  the other party  thereof by certified
mail, in which case all notices to such party  thereafter  shall be given at its
most recently so designated address):


                                       24
<PAGE>

            To Network:
                                       3242 Beverly Boulevard
                                       Beverly Hills, California 90210
                                       Facsimile Number: (310) 246-4065

                                       Attention:  Programming Distribution
                                       cc:   Associate General Counsel
                                             Playboy Enterprises, Inc.
                                             680 North Lake Shore Drive
                                             Chicago, Illinois 60611

            To Affiliate:
                                       Terrace Tower II
                                       5619 DTC Parkway.
                                       Englewood, Colorado 80111
                                       Facsimile Number: (303)488-3219

                                       Attention: President
                                       cc:   Vice President, Programming
                                       cc:   Corporate Counsel -
                                             Business Affairs
                                       cc:   Vice President, Pay-Per-View

      Notice or  report  given by  personal  delivery  shall be deemed  given on
delivery. Notice or report given by mail shall be deemed given on the earlier to
occur of actual receipt thereof or on the fifth day following mailing thereof in
accordance  with the notice  requirements  of this Section 11.  Notice or report
given by Federal Express or similar  overnight  delivery service shall be deemed
given on the next  business  day  following  delivery of the notice or report to
such service with instructions for overnight delivery. Notice or report given by
facsimile transmission,  if receipt is electronically confirmed, shall be deemed
given on the day of  transmission if a business day, or on the next business day
after the day of transmission if not transmitted on a business day.

      12.   CONFIDENTIALITY: PRESS RELEASES:

            Neither  Affiliate nor Network shall disclose  (whether orally or in
writing,  or by press release or otherwise) to, any third party (other than each
party's  respective  officers,  directors,  and employees,  in their capacity as
such, and their respective auditors or attorneys;  provided,  however,  that the
disclosing  party agrees to be  responsible  for any breach of the provisions of
this  Section  12  by  such  officers,  directors  or  employees,   auditors  or
attorneys),  any  information  with respect to the terms and  provisions of this
Agreement,  any information contained in any report delivered under the terms of
this  Agreement,   any  information   regarding   Affiliate's  (or  a  System's)
subscribers (including but not limited to, the number of such subscribers or the
number of Addressable  Subscribers)  and neither party hereto shall disclose any
information  obtained in any inspection  and/or audit of the other party's books
and records,  except:  (i) to the extent necessary (but redacted to the greatest
extent possible) to comply with law or with the


                                       25
<PAGE>

valid order of an administrative agency or a court of competent jurisdiction, in
which  event the  party  making  such  disclosure  shall so notify  the other as
promptly as practicable (and, if possible,  prior to making such disclosure) and
shall  seek  confidential  treatment  of such  information;  (ii) as part of its
normal reporting or review procedure to its parent company,  its auditors or its
attorneys; provided, however, that the disclosing party agrees to be responsible
for any breach of the provisions of this Section 12 by such parent company,  its
auditors  or  attorneys;  (iii) in order to enforce  its  rights or perform  its
,obligations  pursuant  to this  Agreement;  and  (iv)  if  mutually  agreed  by
Affiliate and Network,  in advance of such disclosure,  in writing. In addition,
Network shall not use or disclose information  (whether personally  identifiable
information or not) to any third party regarding Affiliate's or any affiliate of
Affiliate's  Subscribers and shall not engage in any direct mailing or telephone
solicitation,  for any purpose,  to Subscribers of Affiliate or any affiliate of
Affiliate,  unless such Subscriber has previously initiated a communication with
Network;  provided,  however,  that the  foregoing  sentence  shall not apply to
information  obtained by Network or an affiliate of Network in  connection  with
sales of products  or services  other than the  Service.  This  Section 12 shall
survive the expiration or termination of this Agreement regardless of the reason
for such expiration or termination.

      13.   MISCELLANEOUS:

            (a)  Assignment:  Binding  Effect;  Reorganization.  This Agreement,
including both its obligations and benefits, shall redound to the benefit of the
respective  transferees and successors of the parties,  except that neither this
Agreement nor either party's rights or obligations  hereunder  shall be assigned
or  transferred  by either party without the prior written  consent of the other
party;  provided,  however,  no consent  shall be  necessary  in the event of an
assignment  to a  successor  entity  resulting  from a  merger,  acquisition  or
consolidation  by either party or assignment to an entity under common  control,
controlled  by or in control of either  party.  Notwithstanding  the  foregoing,
Network  shall  give  Affiliate  written  notice of a change in the  control  or
ownership  of the Service or Network not later than the five (5) days after such
change in control or ownership occurs provided,  however, that Network shall use
reasonable  efforts to give Affiliate  thirty (30) days notice in advance of any
such  change in control  or  ownership.  In the event of any such  change in the
ownership or control of Network or the Service,  this Agreement may, in the sole
and  absolute  discretion  of  Affiliate,  be  terminated.  For purposes of this
paragraph,  the term  "control"  means the power to direct  the  management  and
policies of an entity, directly or indirectly,  whether through the ownership of
voting securities, by contract or otherwise; provided, however, that no transfer
of ownership or management of Network or the Service to any direct descendent of
Hugh Hefner,  either from Hugh Hefner or from another direct  descendent of Hugh
Hefner, shall be deemed to be a change o(euro) control hereunder. In addition to
the  foregoing,  upon one hundred  twenty  (120) days' prior  written  notice to
Affiliate,  Network  may assign this  Agreement  or any portion of its rights or
obligations hereunder without Affiliate's consent, provided that, as a result of
such  assignment,  the Service  shall no longer  generally  be  identified  as a
"Playboy"  Service by or through  the use of the Marks  therein  and the Service
shall no longer include any  "Playboy-identified"  programming.  Upon receipt of
such  notice,  Affiliate  may elect to  terminate  this  Agreement,  at any time
thereafter, upon, ninety (90)


                                       26
<PAGE>

days' prior written notice to Network (or its assignee),  to be effective on the
date contained in Affiliate's notice.

            (b)  Service  Combinations.  In the event that the Service is merged
with; or Network  acquires control of, or Network is acquired by or merges with,
or control of Network is acquired  by, or the Service is acquired  by, any other
programming  service or the owner thereof, if Affiliate has (at the time of such
merger or acquisition)  an affiliation  agreement with any such other service or
entity,  Affiliate  shall have the option to choose to continue  carriage of the
Service  and of such  other  service,  as the case  may be,  under  either  this
Agreement or under such other affiliation agreement.  If Affiliate does not have
an affiliation agreement with such other service or entity, Affiliate shall have
the  option to elect to have this  Agreement  continue  to apply to the  service
after such merger or acquisition,  or to any surviving service after such merger
or acquisition.

            (c) Entire Agreement;  Amendments:  Waivers. This Agreement contains
the entire  understanding  of the  parties  and  supersedes  and  abrogates  all
contemporaneous  and prior  understandings  of the parties,  whether  written or
oral,  relating to the subject matter hereof. This Agreement may not be modified
except in writing  executed by both parties hereto.  Any waiver of any provision
of, or right  included in, this  Agreement  must be in writing and signed by the
party whose rights are being waived and no waiver by either Affiliate or Network
of any breach of any  provision  hereof  shall be or be deemed to be a waiver of
any  preceding or subsequent  breach of the same or any other  provision of this
Agreement.

            (d) Governing  Law. The  obligations  of Affiliate and Network under
this  Agreement  are subject to all  applicable  federal,  state and local laws,
rules and regulations  (including,  but not limited to the Communications Act of
1934,  as the  same  may be  amended  from  time  to  time,  and the  rules  and
regulations  of the FCC  promulgated  thereunder)  and  this  Agreement  and all
matters or issues collateral  thereto shall be governed by the laws of the State
of New York (except with respect to issues regarding perpetuity,  which shall be
governed by the laws of the State of Colorado),  without regard to choice of law
rules.

            (e)  Relationship.  Neither  Affiliate nor Network shall be, or hold
itself out as, the agent of the other under this  Agreement.  No  subscriber  of
Affiliate shall be deemed to have any privity of contract or direct  contractual
or other  relationship  with  Network by virtue of this  Agreement  or Network's
delivery  of the  service to  Affiliate  hereunder.  Likewise,  no  supplier  of
advertising  or  programming or anything else included in the service by Network
shall be deemed to have any privity of contract or direct  contractual  or other
relationship with Affiliate by virtue of this Agreement or Affiliate's  carriage
of the Service  hereunder.  Nothing  contained herein shall be deemed to create,
and the parties do not intend to create,  any  relationship  of partners,  joint
venturers or agents,  as between  Affiliate  and Network,  and neither  party is
authorized  to or shall act  toward  third  parties  or the public in any manner
which would indicate any such relationship with the other. Network disclaims any
present or future right, interest or estate in or to the transmission facilities
of Affiliate and any  affiliate of the Affiliate and the parents,  subsidiaries,
partnerships or joint venturers controlling the Systems on which


                                       27
<PAGE>

the Service is transmitted,  such disclaimer  being to acknowledge  that neither
Affiliate  nor the  transmission  facilities  of the  Systems  (nor  the  owners
thereof) are common carriers.

            (f) *****.

            (g)  Severability.  The  invalidity  under  applicable  law  of  any
provision of this Agreement shall not affect the validity of any other provision
of this Agreement,  and in the event that any provision  hereof is determined to
be invalid or otherwise illegal, this Agreement shall remain effective and shall
be construed in accordance with its terms as if the invalid or illegal provision
were not contained herein;  provided however,  that both parties shall negotiate
in good faith with respect to an equitable  modification  of the  provision,  or
application  thereof,  held  to be  invalid  and  provisions  logically  related
thereto.  Notwithstanding  the  foregoing,  if any  legislation  is enacted,  or
administrative  ruling,  or court decree or order or  stipulated  settlement  is
issued which materially  deprives Affiliate of the overall net economic benefits
of this  Agreement with respect to the cable  exhibition of the service,  and if
the parties fail to reach an agreement after good faith  negotiation,  Affiliate
shall have the right to terminate  this  Agreement  upon thirty (30) days' prior
written notice to Network.

            (h)  No  Inference  Against  Author.   Network  and  Affiliate  each
acknowledge  that  this  Agreement  was fully  negotiated  by the  parties  and,
therefore, no provision of this Agreement shall be interpreted against any party
because such party or its legal representative drafted such provision.

            (i) No Third Party  Beneficiaries.  The provisions of this Agreement
are for the exclusive benefit of the parties hereto and their permitted assigns,
and no third party shall be a  beneficiary  of, or have any rights by virtue of,
this Agreement.

            (j)  Headings.  The  titles and  headings  of the  sections  in this
Agreement  are  for  convenience  only  and  shall  not in any  way  affect  the
interpretation of this Agreement.

            (k)  Non-recourse.   Notwithstanding   anything  contained  in  this
Agreement to the contrary,  it is expressly understood and agreed by the parties
hereto that each and every  representation,  warranty,  covenant undertaking and
agreement  made in this  Agreement  on the  part of any of the  parties  to this
Agreement  was not made nor  intended  to be made as a personal  representation,
warranty,  covenant,  undertaking, or agreement on the part of any incorporator,
stockholder,  director,  officer,  partner,  employee or agent, past, present or
future,  or any of them, and any recourse,  whether in common law, in equity, by
statute or otherwise, against any of them is hereby forever waived and released.

            The parties hereto have executed this Agreement as of the date first
above written.


                                       28
<PAGE>

AFFILIATE:                                   NETWORK:

SATELLITE SERVICES, INC.                     PLAYBOY ENTERTAINMENT GROUP,
a Delaware corporation                       INC., a Delaware corporation

By:     /s/ Jedd Palmer                      By:     /s/ Michael K. Fleming
          JEDD PALMER                                MICHAEL K. FLEMING

Title:  Vice President, Programming          Title:  S.R. V.P. - General Mgr.
                                                     PLAYBOY TELEVISION
                                                     PLAYBOY ENTERTAINMENT GROUP


                                       29
<PAGE>

                                   SCHEDULE 1

                     To Affiliation Agreement By and Between

                      Playboy Entertainment Group, Inc. and

                            Satellite Services, Inc.

                             Dated February 10, 1993

                                     SYSTEMS

                              TCI OWNED AND MANAGED

HEADEND NAME       FRANCHISE NAME               COUNTY                STATE
------------       --------------               ------                -----

Maricopa           Maricopa (Rio Verde)         Maricopa              Arizona

Scottsdale         Scottsdale                   Maricopa              Arizona
                   North Scottsdale             Maricopa              Arizona
                   Shadow Mountain              Maricopa              Arizona
                   Maricopa                     Maricopa              Arizona

Alameda            Alameda                      Alameda               California
                   Alameda Nas                  Alameda               California

Brentwood          Contra Costa East            Contra Costa East     California
                   Brentwood                    Contra Costa East     California
Chino              Pomona                       Los Angeles           California
                   Chino                        San Bernardino
                                                South                 California
                   Carbon Canyon                San Bernardino
                                                South                 California
                   Chino Hills                  San Bernardino
                                                South                 California

Cupertino          Cupertino                    Santa Clara West      California
                   Los Altos                    Santa Clara West      California
                   Santa Clara                  Santa Clara West      California

Davis              Davis                        Yolo                  California
                   Yolo                         Yolo                  California

Foster City        Foster City                  San Mateo             California
                   Hillsborough                 San Mateo             California

Hacienda Heights   La Puente                    Los Angeles           California
                   Pico River                   Los Angeles           California
                   Baldwin Park                 Los Angeles           California

Hayward            Hayward                      Alameda               California
                   Alameda                      Alameda               California
                   San Leandro                  Alameda               California

<PAGE>

HEADEND NAME       FRANCHISE NAME               COUNTY                STATE
------------       --------------               ------                -----

                   San Lorenzo                  Alameda               California

Lakeview/Nuevo     Perris                       Riverside West        California
                   Lakeview/Nuevo               Riverside West        California

Los Angeles        Los Angeles                  Los Angeles           California

Martinez           Contra Costa North           Contra Costa East     California
                   Contra Costa South           Contra Costa East     California
                   Lafayette North              Contra Costa East     California
                   Lafayette South              Contra Costa East     California
                   Martinez                     Contra Costa East     California
                   North Orinda                 Contra Costa East     California
                   Pleasant Hill                Contra Costa East     California
                   Walnut Creek                 Contra Costa East     California
                   Moraga                       Contra Costa East     California
                   South Orinda                 Contra Costa East     California
                   Danville                     Contra Costa East     California
                   Clyde                        Contra Costa East     California
                   Concord Naval                Contra Costa East     California
                   Weapons Station

Moreno Valley      Moreno Valley                Riverside West        California

Palo Alto          Palo Alto                    Santa Clara West      California
                   Atherton                     San Mateo             California
                   East Palo Alto               San Mateo             California
                   Menlo Park                   San Mateo             California
                   Stanford                     Santa Clara West      California

Perris             Perris                       Riverside West        California

San Jose           San Jose                     Santa Clara West      California
                   Campbell                     Santa Clara West      California
                   Santa Clara County           Santa Clara West      California
                   Cupertino                    Santa Clara West      California
                   Los Gatos                    Santa Clara West      California

Scotts Valley      Santa Cruz                   Santa Cruz            California
                   Santa Cruz County            Santa Cruz            California
                   Scotts Valley                Santa Cruz            California

South Whittier     South Whittier               Los Angeles           California

Sunnyvale          Sunnyvale                    Santa Clara West      California

Tracy              Tracy                        San Joaquin           California
                   San Joaquin                  San Joaquin           California

Vacaville          Vacaville                    Solano West           California
                   Solano                       Solano West           California

Walnut Creek       Walnut Creek                 Contra Costa East     California
                   Contra Costa                 Contra Costa East     California

<PAGE>

HEADEND NAME       FRANCHISE NAME               COUNTY                STATE
------------       --------------               ------                -----

Woodcrest          Woodcrest                    Riverside West        California

Castle Rock        Castle Rock                  Douglas               Colorado
                   Acres Green                  Douglas               Colorado
                   The Pinery                   Douglas               Colorado
                   Franktown                    Douglas               Colorado
                   Parker                       Douglas               Colorado
                   Perry Park Douglas           Colorado
                   Sedalia Douglas              Colorado
                   Louviers Douglas             Colorado
                   Roxborough Village           Douglas               Colorado

Denver Metroplex   Arvada                       Jefferson/Adams       Colorado
                   Jefferson North              Jefferson             Colorado
                   Westminster                  Jefferson/Adams       Colorado
                   Aurora                       Adams                 Colorado
                   Fitzsimmons Army Med         Adams                 Colorado
                   Aurora                       Arapahoe              Colorado
                   Commerce City                Adams                 Colorado
                   Englewood                    Arapahoe              Colorado
                   Broadway Estates             Arapahoe              Colorado
                   Arapahoe                     Arapahoe              Colorado
                   Greenwood Village            Arapahoe              Colorado
                   Sheridan                     Arapahoe              Colorado
                   Cherry Hills Village         Arapahoe              Colorado
                   Federal Heights              Adams                 Colorado
                   Adams                        Adams                 Colorado
                   Buckley AFB                  Denver                Colorado
                   Holly Hills                  Arapahoe              Colorado
                   Lakewood                     Jefferson             Colorado
                   Golden                       Jefferson             Colorado
                   Jefferson South (Lakewood)   Jefferson             Colorado
                   Douglas                      Douglas               Colorado
                   Adams County SMATVS          Adams                 Colorado
                   Chapparal Subdivision        Arapahoe              Colorado

Hollywood          Hollywood                    Broward               Florida

Miami              Opa Locka                    Dade                  Florida
                   Miami                        Dade                  Florida

Carpentersville    Algonquin                    Kane/McHenry          Illinois
                   Crystal Lake                 McHenry               Illinois
                   West Dundee                  Kane                  Illinois
                   Lake in the Hills            McHenry               Illinois
                   East Dundee                  Kane                  Illinois
                   Cary                         McHenry               Illinois
                   Fox River Grove              McHenry               Illinois
                   Carpentersville              Kane                  Illinois
                   Lakewood                     McHenry               Illinois
                   Oakwood Hills                McHenry               Illinois
                   McHenry                      McHenry               Illinois
                   Sleepy Hollow                Kane                  Illinois

<PAGE>

HEADEND NAME       FRANCHISE NAME               COUNTY                STATE
------------       --------------               ------                -----

                   Huntley                      McHenry               Illinois
                   Kane                         Kane                  Illinois
                   Lakemoor                     McHenry               Illinois
                   Wauconda                     Lake                  Illinois

Galesburg          Galesburg                    Knox                  Illinois
                   East Galesburg               Knox                  Illinois
                   Knoxville                    Knox                  Illinois
                   Knox                         Knox                  Illinois

Mendota            Mendota                      La Salle              Illinois

Monmouth           Monmouth                     Warren                Illinois
                   Warren                       Warren                Illinois

Hammond            Hammond                      Lake                  Indiana
                   East Chicago                 Lake                  Indiana

Bossier City       Bossier City                 Bossier               Louisiana
                   Bossier                      Bossier               Louisiana
                   Barksdale AFB                Bossier               Louisiana
                   Haughton                     Bossier               Louisiana
                   Fillmore                     Bossier               Louisiana
                   Princeton                    Bossier               Louisiana

Baltimore          Baltimore                    Baltimore             Maryland

Berlin             Berlin                       Worcester             Maryland
                   Worcester                    Worcester             Maryland

Ocean City         Ocean City                   Worcester             Maryland
                   Sussex                       Sussex                Maryland
                   Fenwick Island               Sussex                Maryland

Grand Rapids       Grand Rapids                 Kent                  Michigan
                   East Grand Rapids            Kent                  Michigan
                   Grand Rapids Township        Kent                  Michigan
                   Ada                          Kent                  Michigan
                   Cascade                      Kent                  Michigan
                   Lowell                       Kent                  Michigan

Grandville         Grandville                   Kent                  Michigan
                   Georgetown                   Ottawa                Michigan
                   Byron                        Kent                  Michigan
                   Dorr                         Allegan               Michigan
                   Jamestown                    Ottawa                Michigan

Lake Orion         Independence                 Oakland               Michigan
                   Clarkston                    Oakland               Michigan
                   Lake Orion                   Oakland               Michigan
                   Orion                        Oakland               Michigan

Rochester          Auburn Hills                 Oakland               Michigan
                   Rochester Hills              Oakland               Michigan

<PAGE>

HEADEND NAME       FRANCHISE NAME               COUNTY                STATE
------------       --------------               ------                -----

                   Oakland                      Oakland               Michigan
                   Rochester                    Oakland               Michigan
                   Troy                         Oakland               Michigan

Royal Oak          Royal Oak                    Oakland               Michigan
                   Berkley                      Oakland               Michigan
                   Clawson                      Oakland               Michigan
                   Ferndale                     Oakland               Michigan
                   Huntington Woods             Oakland               Michigan
                   Pleasant Ridge               Oakland               Michigan
                   Troy                         Oakland               Michigan

Walker             Walker                       Kent                  Michigan
                   Alpine                       Kent                  Michigan
                   Plainfield                   Kent                  Michigan
                   Cannon                       Kent                  Michigan
                   Sparta                       Kent                  Michigan
                   Wright                       Ottawa                Michigan
                   Talmadge                     Ottawa                Michigan
                   Grand Rapids                 Kent                  Michigan
                   Grand Rapids Township        Kent                  Michigan

Wyoming            Wyoming                      Kent                  Michigan
                   Kentwood                     Kent                  Michigan
                   Gaines                       Kent                  Michigan

Bellevue           Bellevue                     Sarpy                 Nebraska
                   Offutt AFB                   Sarpy                 Nebraska
                   Sarpy                        Sarpy                 Nebraska

La Vista           La Vista                     Sarpy                 Nebraska
                   Ralston                      Douglas               Nebraska
                   Papillon                     Sarpy                 Nebraska
                   Douglas                      Douglas               Nebraska
                   Omaha                        Douglas               Nebraska

Gallup             Gallup                       McKinley              New Mexico
                   Gamerco                      McKinley              New Mexico

Brookhaven         Brookhaven                   Suffolk               New York
                   Patchogue                    Suffolk               New York
                   Bellport                     Suffolk               New York
                   Lake Grove                   Suffolk               New York
                   Poquott                      Suffolk               New York

Mamaroneck         Mamaroneck (Town)            Westchester           New York
                   Mamaroneck (Village)         Westchester           New York
                   Larchmont                    Westchester           New York
Bristow            Bristow                      Creek                 Oklahoma

Claremore          Claremore                    Rogers                Oklahoma

Drumright          Drumright                    Creek                 Oklahoma

<PAGE>

HEADEND NAME       FRANCHISE NAME               COUNTY                STATE
------------       --------------               ------                -----

Tulsa              Sand Springs                 Tulsa                 Oklahoma
                   Tulsa                        Tulsa                 Oklahoma
                   Broken Arrow                 Tulsa                 Oklahoma
                   Owasso                       Tulsa                 Oklahoma
                   Glenpool                     Tulsa                 Oklahoma
                   Sapulpa                      Creek                 Oklahoma
                   Jenks                        Tulsa                 Oklahoma
                   Creek                        Creek                 Oklahoma
                   Kiefer                       Creek                 Oklahoma
                   Catoosa                      Rogers                Oklahoma
                   Tulsa                        Tulsa                 Oklahoma
                   Rogers                       Rogers                Oklahoma
                   Wagoner                      Wagoner               Oklahoma
                   Osage                        Osage                 Oklahoma
                   Rolling Hills                Wagoner               Oklahoma

Abilene            Abilene                      Taylor                Texas
                   Tye                          Taylor                Texas
                   Dyess AFB                    Taylor                Texas
                   Taylor                       Taylor                Texas

Jacksonville       Jacksonville                 Cherokee              Texas
                   Cherokee                     Cherokee              Texas

Tyler              Tyler                        Smith                 Texas
                   Smith                        Smith                 Texas
                   Whitehouse                   Smith                 Texas

                              CAGUAS CABLE SYSTEMS

Caguas             Caguas                       n/a                 Puerto Rico

Cayey              Cayey-Cidra                  n/a                 Puerto Rico

Barranquitas       Barranquitas                 n/a                 Puerto Rico

Humacao            Humacao                      n/a                 Puerto Rico

                             LENFEST COMMUNICATIONS

Sellersville       Bedminster                   Bucks               Pennsylvania
                   Blooming Glen                Bucks               Pennsylvania
                   Chalfont                     Bucks               Pennsylvania
                   Colmar                       Montgomery          Pennsylvania
                   Dublin                       Bucks               Pennsylvania
                   Earlington                   Montgomery          Pennsylvania
                   East Greenville              Montgomery          Pennsylvania
                   Elroy                        Montgomery          Pennsylvania
                   Fountainville                Bucks               Pennsylvania
                   Franconia                    Montgomery          Pennsylvania
                   Green Lane                   Montgomery          Pennsylvania
                   Hatfield                     Montgomery          Pennsylvania
                   Harleysville                 Montgomery          Pennsylvania
                   Hilltown                     Bucks               Pennsylvania

<PAGE>

HEADEND NAME       FRANCHISE NAME               COUNTY                STATE
------------       --------------               ------                -----

                   Lansdale                     Montgomery          Pennsylvania
                   Line Lexington               Montgomery          Pennsylvania
                   Lederach                     Montgomery          Pennsylvania
                   Mainland                     Montgomery          Pennsylvania
                   Milford Square               Bucks               Pennsylvania
                   Penasburg                    Montgomery          Pennsylvania
                   Perkasie                     Bucks               Pennsylvania
                   Perkiomenville               Montgomery          Pennsylvania
                   Pipersville                  Bucks               Pennsylvania
                   Plumsteadville               Bucks               Pennsylvania
                   Quakertown                   Bucks               Pennsylvania
                   Richlandtown                 Bucks               Pennsylvania
                   Salford                      Montgomery          Pennsylvania
                   Salfordville                 Montgomery          Pennsylvania
                   Sellersville                 Bucks               Pennsylvania
                   Schwensksville               Montgomery          Pennsylvania
                   Silverdale                   Bucks               Pennsylvania
                   Skippack                     Montgomery          Pennsylvania
                   Souderton                    Montgomery          Pennsylvania
                   Spinnerstown                 Bucks               Pennsylvania
                   Spring Mount                 Montgomery          Pennsylvania
                   Sumneytown                   Montgomery          Pennsylvania
                   Telford                      Bucks               Pennsylvania
                   Telford                      Montgomery          Pennsylvania
                   Trumbauersville              Bucks               Pennsylvania
                   Tylersport                   Montgomery          Pennsylvania
                   Woxall                       Montgomery          Pennsylvania
                   Zieglersville                Montgomery          Pennsylvania
                   Perkaskie Borough            Bucks               Pennsylvania
                   Sellersville Borough         Bucks               Pennsylvania
                   West Rockhill Township       Bucks               Pennsylvania
                   East Rockbill Township       Bucks               Pennsylvania
                   Telford Borough              Montgomery          Pennsylvania
                   Souderton Borough            Montgomery          Pennsylvania
                   Hatfield Borough             Montgomery          Pennsylvania
                   Hatfield Township            Montgomery          Pennsylvania
                   Franconia Township           Montgomery          Pennsylvania
                   Quakertown Borough           Bucks               Pennsylvania
                   Richland Township            Bucks               Pennsylvania
                   Milford Township             Bucks               Pennsylvania
                   Richlandtown Borough         Bucks               Pennsylvania
                   Trumbauersville Borough      Bucks               Pennsylvania
                   Silverdale Borough           Bucks               Pennsylvania
                   Lower Salford Township       Montgomery          Pennsylvania
                   Salford Township             Montgomery          Pennsylvania
                   Upper Salford Township       Montgomery          Pennsylvania
                   Lower Frederick Township     Montgomery          Pennsylvania
                   Green Lane Borough           Montgomery          Pennsylvania
                   Marlborough Township         Montgomery          Pennsylvania
                   Bedminster Township          Bucks               Pennsylvania
                   Dublin Borough               Bucks               Pennsylvania
                   Upper Frederick Township     Montgomery          Pennsylvania

<PAGE>

HEADEND NAME       FRANCHISE NAME               COUNTY                STATE
------------       --------------               ------                -----

                          US CABLE OF NORTHERN INDIANA

Griffith           Cedar Lake                   Lake                Indiana
                   Crook Co. Uninc.             Cook                Illinois
                   Crown Point                  Lake                Indiana
                   Dyer                         Lake                Indiana
                   Ford Heights                 Cook                Illinois
                   Glenwood                     Cook                Illinois
                   Griffith                     Lake                Indiana
                   Highland                     Lake                Indiana
                   Hobart                       Lake                Indiana
                   Lake Co. Uninc.              Lake                Indiana
                   Lake Station                 Lake                Indiana
                   Lowell                       Lake                Indiana
                   Lynwood                      Cook                Illinois
                   Merrillville                 Lake                Indiana
                   Munster                      Lake                Indiana
                   New Chicago                  Lake                Indiana
                   Porter Co. Uninc.            Porter              Indiana
                   St. John                     Lake                Indiana
                   Schererville                 Lake                Indiana
                   Whiting                      Lake                Indiana
                   Will Co. Uninc.              Will                Illinois

                             US CABLE OF LAKE COUNTY

North Chicago      North Chicago                Lake                Illinois
                   Antioch                      Lake                Illinois
                   Fox Lake                     Lake                Illinois
                   Green Oaks                   Lake                Illinois
                   Gurnee                       Lake                Illinois
                   Knollwood & Shields          Lake                Illinois
                   Lake Bluff                   Lake                Illinois
                   Lake Forest                  Lake                Illinois
                   Lake Villa                   Lake                Illinois
                   Libertyville Township        Lake                Illinois
                   Lindenhurst                  Lake                Illinois
                   Park City                    Lake                Illinois
                   Third Lake                   Lake                Illinois
                   Venetian Village             Lake                Illinois
                   Wadsworth                    Lake                Illinois
                   Waukegan                     Lake                Illinois
                   Winthrop Harbor              Lake                Illinois
                   Zion                         Lake                Illinois

                               COLUMBIA ASSOCIATES

Beaverton          Beaverton                    Washington          Oregon
                   Tigard                       Washington          Oregon
                   Lake Osweg                   Clackamas           Oregon
                   Hillsboro                    Washington          Oregon
                   Washington Co. Uninc.        Washington          Oregon

<PAGE>

HEADEND NAME       FRANCHISE NAME               COUNTY                STATE
------------       --------------               ------                -----

                   King City                    Washington          Oregon
                   Cornelius                    Washington          Oregon
                   Tualatin                     Washington          Oregon
                   Sherwood                     Washington          Oregon
                   Rivergrove                   Clackamas           Oregon
                   North Plains                 Washington          Oregon
                   Banks                        Washington          Oregon
                   Durham                       Washington          Oregon
                   Wilsonville                  Washington          Oregon
                   Aloha                        Washington          Oregon
                   Wash Co-La                   Washington          Oregon
                   Gaston                       Washington          Oregon
                   Clackamas Co. Uninc.         Clackamas           Oregon

<PAGE>

                                    EXHIBIT A

                     To Affiliation Agreement By and Between

                      Playboy Entertainment Group, Inc. and

                            Satellite Services, Inc.

                             Dated February 10, 1993

                              System Qualifications

I. Affiliate  represents and warrants the following regarding each System listed
on Schedule I hereof:

            1.  that (a)  either  Tele-Communications,  Inc.  or  Liberty  Media
Corporation  (Tele-Communications,  Inc. and Liberty Media  Corporation shall be
hereinafter referred to as "TCI"; any reference to TCI herein shall be deemed to
be a reference to either Tele-Communications, Inc. or Liberty Media Corporation,
or  both,  as  is  necessary  to  qualify  the  greatest  number  of  television
distribution  facilities hereunder) or its nominee owns, directly or indirectly,
at least a  twenty-five  percent  (25%)  interest in the general  manager of the
System  pursuant to a valid written  agreement in full force and effect;  or (b)
TCI or its nominee owns, directly or indirectly, a ten percent (10%) interest in
such  System  or owns an  interest  or  obligation  by which  TCI,  directly  or
indirectly,  owns a  right  (whether  conditional  or not)  to  convert  into or
acquire,  directly or  indirectly,  an interest  equal to at least the  required
interest.  An  "indirect"  ownership  is an interest  resulting  from  ownership
through any series of ownership interests, including corporations, partnerships,
joint ventures or other forms of business  organizations;  an indirect  interest
shall  be  quantified  in  amount  by a  series  of  percentage  multiplications
commencing  with TCI's  direct  interest and  multiplying  that by the next most
proximate  percentage  interest and, then,  multiplying in turn each  succeeding
ownership interest in the order of their progression away from TCI by the result
of the immediately  preceding  multiplication  until the most distant percentage
interest is multiplied;

            2. that  Affiliate  or an agent has been  authorized,  pursuant to a
valid written  agreement in full force and effect, to make and execute decisions
on behalf of each such System with  respect to the  Service,  including  but not
limited  to  billing  and  collection  of fees,  selection  of  programming  and
Affiliate continues  throughout the Term to exercise such authority with respect
to matters affecting the distribution of the Service by such System;

            3. That  either a  franchise  or license is not  required or a valid
franchise  or license is in effect  through  the Term of this  Agreement  or the
franchisee  or licensee has held a valid cable  television  franchise or license
and continues to operate in the franchise or license area under a claim of right
or is otherwise  lawfully  operating or  franchisee or licensee has held a valid
cable  franchise  or  license  and is  continuing  to operate  while  diligently
pursuing, in good faith, its available judicial remedies. For the

<PAGE>

above  purposes,  in the event a franchise or license  expires before the end of
the  Term,  such  franchise  or  license  shall be  deemed  valid for so long as
franchisee  or licensee is  negotiating  in good faith with the  franchising  or
licensing authority for a franchise or license renewal;

            4. that, except as permitted under this Agreement,  Affiliate is not
subdistributing and will not in the future  subdistribute,  nor does it claim to
be authorized to subdistribute,  the Service through any cable television system
which does not satisfy the requirements set forth above.

II. In the event TCI's direct or indirect  equity interest in a System or in the
entity  managing such System  decreases,  and provided  TCI's  interest does not
decrease  to zero,  such System  shall  continue  to qualify  under  Paragraph I
hereof, provided however, (i) at the time of diminution of TCI's interest in the
System,  TCI  reasonably  expects that its interest will return to the necessary
level, and (ii) TCI's interest in such System does in fact increase to the level
required under Paragraph I hereof within eighteen (18) months of the decrease.

III.  In the event  Affiliate,  or any of the  entities  which  owns or  manages
Systems which qualify hereunder, effects a corporate separation,  reorganization
or restructuring (including,  but not limited to, by a distribution of stock, or
other assets or rights, to its shareholders,  partners or joint venturers),  the
Systems of the entity resulting from such transaction (including all interim and
supporting  entities) and/or all of such resulting  entities,  in the aggregate,
will continue to qualify under Paragraph I hereof,  so as to continue to qualify
to distribute  the Service  under the terms and  conditions  hereof,  as if such
separation, reorganization or other restructuring had not occurred.

<PAGE>

                                   EXHIBIT B-1

                     To Affiliation Agreement By and Between

                      Playboy Entertainment Group, Inc. and

                            Satellite Services, Inc.

                             Dated February 10, 1993

                                PROGRAM SCHEDULE

                                  See Attached.

<PAGE>

                                   EXHIBIT B-1

                  [FEBRUARY PLAYBOY AT NIGHT PROGRAM SCHEDULE]

<PAGE>

                                   EXHIBIT B-2

                     To Affiliation Agreement By and Between

                      Playboy Entertainment Group, Inc. and

                            Satellite Services, Inc.

                             Dated February 10, 1993

                             STANDARDS AND PRACTICES

      Playboy Television is a targeted,  differentiated  pay-per-view television
network featuring stylized eroticism and a variety of entertainment programs for
men and women.

      The service's  programming  ranges from sensuous imagery to unusual candid
interviews;  lifestyle information;  news, music and dance with a sensual flair;
and fast-paced, off-beat comedy.

      Original  programming,  both  produced  and  acquired,  is the mainstay of
Playboy  Television.  The remainder of the line-up  consists of acquired  motion
pictures.  As a rule, Playboy Television does not accept motion pictures shot on
videotape.

      Playboy  Television  does not produce  programming  with scenes  depicting
violent  behavior.  As  a  matter  of  policy,  Playboy  Television  limits  the
acquisition  of programs and films that contain  violent scenes our policy is to
limit such elements and to avoid  completely any scenes which link sexuality and
eroticism  with  violence,   directly  or  indirectly.  As  a  result  of  these
guidelines, Playboy Television is less violent than programming that can be seen
on HBO,  Cinemax,  Showtime,  The Movie  Channel,  Viewer's  Choice and  Request
Television.

      Nudity is not restricted on Playboy  Television and includes both male and
female full-frontal nude scenes. The extreme sexual explicitness associated with
the majority of adult films is forbidden or strictly edited.  Graphic  close-ups
of genitals are forbidden.  There is no rape,  sadism,  sadomasochism,  bondage,
incest, bestiality or child pornography.

      Playboy  Television  licenses both non-rated and MPAA films. Some explicit
(non-rated)  adult films are aired with strict  editing to the standards  stated
herein.  Because of the nature of our  service,  strong or explicit  language is
included in Playboy Television programming.

      Playboy Television's broadcast standards and practices code is designed to
present  programming  consistent with the level of taste and quality established
by Playboy over its more than 35 years as an  internationally  recognized  media
and entertainment company.

<PAGE>

                                    EXHIBIT C

                     To Affiliation Agreement By and Between

                      Playboy Entertainment Group, Inc. and

                            Satellite Services, Inc.

                             Dated February 10, 1993

                            TECHNICAL SPECIFICATIONS

                                     GENERAL

1.1 All specifications are to be adhered to anywhere in the contiguous 48 United
States.  This  specification uses a 5 meter reference antenna which is peaked at
the  center of the  orbital  box.  It is the  responsibility  of the  Network to
provide center of the box times on a monthly basis.

1.2 The  specification  is divided into space  segment and total  system.  Total
system is defined as the additional noise contribution by the originating studio
and transport facility to the input to the uplink.

1.3 System  availability  based on total system 99.998% per year calculated on a
monthly  basis  excluding sun outage.  The system shall be declared  unavailable
under the following:

            A.    Loss of video
            B.    Loss of audio
            C.    Video signal to noise <45db
            D.    Audio signal to noise <45db

1.4 This specification is for analog service. A specification for digital system
will be added at a later date when equipment is developed.

                              VIDEO SPECIFICATIONS

Parameter                                    Space Segment          Total System

2.1   Frequency response:                     .25db box            .5db box

2.2   Signal to Noise Ratio:
Definition: 1v p/p vid to RMS
noise, 4.2 Mhz weighted.                      52db                 50.3db

2.3   Chrominance/luminance delay:            <20 ns               <50ns

<PAGE>

Parameter                                    Space Segment          Total System

2.4   2T K Factor:                            <2%                  <3%

2.5   Differential Gain:                      <.2db                <.45db

2.6   Differential Phase:                     +/-1(degree)         <+/-2(degree)

2.7   Insertion gain/loss:                    <2 IRE               <4 IRE

2.8   Video formats, waveforms,
timing shall adhere to latest
FCC requirements. All other
parameters not specified shall
conform to NTSC Engineering
Report #7.

                              AUDIO SPECIFICATIONS

Parameter                                    Space Segment        Total System

3.1   Frequency Response:                     <.5db box            <1db box

3.2   Video/Audio Sync:                       <10 m/sec            <20 m/sec

3.3   Signal to Noise Ratio:
Definition: RMS test tone to RMS
noise with 15Khz weighting. This
parameter to be measured with
program video or full field color
bar test pattern.                             >56db                >55db

3.4   Distortion: At l0db above TT
distortion shall not exceed 3%.
Distortion shall be measured at 1004Hz.       <.5% at TT           <.7% at TT

3.5   Wow and Flutter:                                             <.1%rms

3.6   Crosstalk:                              >65db                >65db

3.7   Insertion gain/loss:                    <.5db                <1d

<PAGE>

                                    EXHIBIT D

                     To Affiliation Agreement By and Between

                      Playboy Entertainment Group, Inc. and

                            Satellite Services, Inc.

                             Dated February 10, 1993

[DATE]

Satellite Services Inc.
5619 DTC Parkway, Suite 915
Englewood, CO 80111

RE:   CHILDREN'S TELEVISION REGULATION CERTIFICATION

Dear ______________:

Please be advised  that  Playboy  Entertainment  Group,  Inc.  produces  neither
"commercial  matter" nor "children's  programming" as those terms are used in 47
U.S.C.  Section  303a  and  C.F.R.  Section  76.225;  neither  does  it  produce
programming  designed to service children's  educational and informational needs
as contemplated by 47 U.S.C. Section 303b and applied regulations.

Please let me know if Satellite Services Inc. or its affiliates needs additional
information from Playboy  Entertainment  Group, Inc. to satisfy  compliance with
the Act.

Sincerely,

Playboy Entertainment Group, Inc.

By:    _________________________
Name:  _________________________
Title: _________________________

<PAGE>

                                    EXHIBIT E

                     To Affiliation Agreement By and Between

                      Playboy Entertainment Group, Inc. and

                            Satellite Services, Inc.

                             Dated February 10, 1993

                           LIST OF AGREEMENTS EXCLUDED
                      FROM THE OPERATION OF SECTION 13 (f)

1.    *****

2.    *****

3.    *****

4.    *****

5.    *****

6.    *****