Exhibit 10.3

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.


                              AMENDED AND RESTATED
                        AFFILIATION AND LICENSE AGREEMENT
                          FOR DTH SATELLITE EXHIBITION
                                 OF PROGRAMMING








         PLAYBOY TV, TWO ADULT MOVIE CHANNELS AND PLAYBOY TV EN ESPANOL








                                  DIRECTV, INC.

                                       and

                      PLAYBOY ENTERTAINMENT GROUP, INC. and
                          SPICE HOT ENTERTAINMENT, INC.

<PAGE>

                              AMENDED AND RESTATED
                        AFFILIATION AND LICENSE AGREEMENT
                          FOR DTH SATELLITE EXHIBITION
                                 OF PROGRAMMING


      AMENDED AND RESTATED  AGREEMENT made as of August 1, 2007 (the  "Effective
Date"),  by and  between  PLAYBOY  ENTERTAINMENT  GROUP,  INC.,  and  SPICE  HOT
ENTERTAINMENT,  INC., each of which is a Delaware  corporation  having an office
located at Media Center  Drive.,  Los Angeles,  California  90065  (collectively
referred  to  herein  as   "Programmer"),   and  DIRECTV,   INC.,  a  California
corporation,  having an office  located at 2230 East Imperial  Hwy., El Segundo,
California 90245 ("Affiliate").

WITNESSETH:

      WHEREAS,  Affiliate  and  Programmer  entered  into  a  written  agreement
entitled  Amended  and  Restated  Affiliation  and  License  Agreement  for  DTH
Satellite  Exhibition  of  Programming  dated  September  16, 2006 (the "Current
Playboy   Agreement"),   whereby  Programmer  granted  Affiliate  the  right  to
distribute  various  television  networks owned and operated by Programmer  that
feature adult films, related programming and interstitial material (individually
the "Service," or collectively the "Services", as defined in Section 1(b) below)
via the DTH  Distribution  System (as defined in Section  1(a)(ii) below) in the
United States (the "Territory") as restricted herein;

      WHEREAS,  the parties  desire to amend  various terms of the Agreement and
herein restate the Agreement in its entirety; and

      WHEREAS, this Agreement supersedes all prior understandings and agreements
relating to the subject matter herein, including without limitation, the Current
Playboy Agreement and any amendments or extensions thereto;

      NOW,  THEREFORE,  FOR GOOD AND  VALUABLE  CONSIDERATION,  THE  RECEIPT AND
ADEQUACY OF WHICH ARE HEREBY ACKNOWLEDGED, IT IS MUTUALLY AGREED AS FOLLOWS:

      1. Grant of Rights.

         (a) Distribution; Certain Definitions.

            (i)  Programmer  hereby  grants to Affiliate,  and Affiliate  hereby
accepts,  the non-exclusive right to distribute the Service in the Territory via
the DTH Distribution System (as defined below) to DIRECTV Subscribers during the
Term (as defined in Section  6(a)  below),  as follows:  (i) with respect to the
Playboy TV Service (as

EXECUTION VERSION                      2

<PAGE>

defined  in  Section  1(b)  below),   distribution  shall  include   residential
subscribers,  hotels, motels, private offices,  multiple dwelling facilities and
oil rigs  (provided,  however,  that  Affiliate  shall  not  have  the  right to
distribute  the Service in any common areas to which the public has free access)
on a subscription (a la carte or package) basis (the  "Subscription  Offerings")
and on a pay-per-view,  pay-per-block and pay-per-night basis (collectively, the
"PPV Offerings"),  in blocks of at least sixty (60) minutes each (or such period
as the parties shall agree) for up to twenty four (24) hours; provided, however,
that any  partial  exhibition  of the  Service  which  consists  only of  motion
pictures  must be no shorter  than sixty (60) minutes (any block of time, a "PPV
Program"); and (ii) with respect to each of Movie Channel 1, Movie Channel 2 and
Playboy TV en Espanol  Services  (as each is  defined  in Section  1(b)  below),
distribution may include Subscription Offerings and PPV Offerings to residential
subscribers,  hotels, motels, private offices,  multiple dwelling facilities and
oil rigs  (provided,  however,  that  Affiliate  shall  not  have  the  right to
distribute the Service in any common areas to which the public has free access).
Affiliate shall determine in its sole  discretion  whether to sell  Subscription
Offerings  on  an  a la  carte  or  package  basis.  Affiliate  shall  have  the
non-exclusive  right to use the name of or logo for "Playboy  TV," "Club Jenna,"
"Spice:Xcess,"  and  "Playboy  TV en  Espanol"  as such  names or  logos  may be
changed, altered and amended by Programmer, or the names, titles or logos of the
Service  or any of its  programs,  or the  names,  voices,  photographs,  music,
likenesses or  biographies  of any  individual  participant  or performer in, or
contributor  to, any program or any variations  thereof,  all of which are being
licensed  exclusively  for use in connection with the  distribution,  promotion,
marketing  and sale of the  Service as  provided  herein.  Any further use shall
require  Affiliate's   notification  to  Programmer  and  Programmer's   written
approval, not to be unreasonably withheld.

            (ii) The term "DTH Distribution  System" shall mean the distribution
system  for  video  and  other  programming  services  whereby  the  programming
satellite  signal or feed is received  from  Programmer's  delivery  source by a
DIRECTV  turnaround  earth-station  facility which  compresses and processes the
signal or feed and then  uplinks it to a DTH  communications  satellite  (a "DTH
Satellite") for transmission to DIRECTV  Subscribers.  DTH  Distribution  System
shall also include any other method of  distribution  that  Affiliate  currently
and/or  subsequently uses to deliver the Service feed(s) to DIRECTV  Subscribers
as  part  of  Affiliate's   provision  of  television   services  consisting  of
multi-channel  linear  programming  (which may be combined with other services),
including,   without  limitation,   MMDS  and   territorial-based   transmission
infrastructures  such  as  Internet  protocol  (excluding  distribution  via the
Internet or the World Wide Web;  provided that if at any time Programmer  offers
the right to  distribute  the Service via the  Internet or World Wide Web to any
other  distributor of the Service,  Programmer will offer the same rights on the
same terms and conditions to distribute the Service on the Internet or the World
Wide Web to Affiliate)),  fiber optic, twisted pairs and coaxial cable, provided
that in  connection  with such  delivery  methods,  Affiliate  complies with the
following:  (i) the end users to whom  Affiliate  distributes  the  Service  are
DIRECTV  Subscribers;  (ii) the branding and packaging  that is received by such
DIRECTV  Subscribers  is  substantially  the same as the branding and  packaging
received by DIRECTV  Subscribers that receive the Service via Affiliate's direct
to home  satellites.  During the Term (as defined in Section 6(a)),  the Service
(as defined  below)

EXECUTION VERSION                      3

<PAGE>

shall be distributed via a DTH Satellite at the orbital location which transmits
to the greatest number of DIRECTV Subscribers.  "DIRECTV Subscribers" shall mean
those customers (both residential and  non-residential)  authorized by Affiliate
to receive a DIRECTV  branded DTH service via the DTH  Distribution  System to a
customer's  Set-Top Box (as defined  below),  provided that nothing herein shall
prohibit the transfer of Service  programming by a DIRECTV  Subscriber from such
Subscriber's  Set-Top Box to a portable  viewing device.  "Service  Subscribers"
shall  mean  DIRECTV   Subscribers   authorized  by  Affiliate  to  receive  the
Subscription   Offerings  and/or  PPV  Offerings.   "Internet"  shall  mean  the
electronic   communications   network  that  connects   computer   networks  and
organizational  computer facilities around the world. "World Wide Web" means the
hypertext   transfer   protocol-based,   distributed   information  system  that
facilitates  sharing  information and content via the Internet.  A "Set-Top Box"
means a device that  connects to, or is  integrated  as part of, a television or
other video output  display device  ("Display  Device") and also connects to the
source  of  Affiliate's  audio/visual  signal,  the  content  of  which  then is
displayed on the Display Device.

            (iii) *****

            (iv)  Affiliate  shall  have  the  right,  but not  the  obligation,
exercisable  in its absolute  sole  discretion,  to distribute  the  programming
service  commonly  known as "Playboy en Espanol"  upon delivery to Programmer of
not less  than  thirty  (30)  days  prior  written  notice  thereof.  References
throughout  this  Agreement to Playboy en Espanol shall be applicable  only upon
Affiliate's  launch,  if any,  of Playboy en  Espanol  via the DTH  Distribution
System.

            (v)  Affiliate  shall be  permitted to  authorize  satellite  master
antenna television system ("SMATV") operators (including telephone companies and
similar  service  providers)  that serve  multiple  dwelling  unit  buildings or
complexes,  commercial  or  business  establishments  with  multiple  television
viewing  sites or master  planned  communities  and the like to  distribute  the
Service in the  Territory  via such SMATV  systems  directly to end users within
such buildings or  establishments  for DTH reception  only,  provided,  however,
that: (i) such SMATV operator shall not have the right to distribute the Service
in any common areas to which the public has free access and (ii) Affiliate shall
be responsible for each such SMATV operator's  compliance with all the terms and
conditions of this  Agreement  including but not limited to, the service  charge
due for each  individual  purchase of the Service,  whether on a PPV Offering or
Subscription Offering basis.

         (b) The Service.  The "Service" shall,  individually and  collectively,
mean and consist of the national feed (or, if Programmer uses multiple feeds for
the Service for the purpose of serving  multiple time zones,  such other of such
multiple  feeds  designated  by  Affiliate)  of the three  programming  services
described in clauses (i) through (iii) below,  and Playboy TV en Espanol and the
VOD Service at such time, if any, that Affiliate  elects to launch Playboy TV en
Espanol and/or the VOD Service. Each Service,  except the VOD Service,  shall be
presented on a 24-hour per day, 7 days a week schedule,  as described  below and
in the "Descriptions and Limitations of the Service," attached hereto as Exhibit
A. The

EXECUTION VERSION                      4

<PAGE>

Service  shall be  delivered  to  Affiliate  in its  entirety,  meaning that the
programming  (including,  without  limitation,  all  other  information  related
thereto (e.g.,  data)) on the Service as received by any Service Subscriber at a
given point in time shall be the same as the  programming  received by all other
subscribers  to the  Service  at such  point in time  (excluding  insertions  by
individual  video service  providers to permit the  customization of a feed with
respect to promoting such video service  provider not to exceed four minutes per
hour;  provided that the insertions do not change the content of a Program,  and
only preempt  interstitial  programming).  In the event that  Programmer  grants
individual  service  providers  the right to  insert  customized  insertions  as
provided  hereinabove,  Programmer shall notify Affiliate and Affiliate shall be
granted the same such rights.

            (i) Playboy TV. The programming  service  commonly known as "Playboy
TV"  ("Playboy  TV")  shall  consist  of  entertainment  programming  for  adult
audiences as more fully  described in the  "Description  and  Limitation  of the
Services" Section attached hereto as Exhibit A. Affiliate shall refer to Playboy
TV as "Playboy  TV," or other name  mutually  agreed to by the parties,  and may
list  Playboy TV on the  program  guide as  "PBTV."  Affiliate  shall  include a
marketing  description  of Playboy TV in Affiliate's  programming  guide that is
viewed by Subscribers that is mutually agreed upon by the parties.

            (ii) Movie Channel 1. The service known as "Movie Channel 1" ("Movie
Channel 1") shall consist of  entertainment  programming  for adult audiences as
more fully described in the "Description and Limitation of the Services" Section
attached  hereto as Exhibit A. Affiliate shall refer to Movie Channel 1 as "Club
Jenna," or other name approved by Affiliate, and may list Movie Channel 1 on the
program  guide as "JENNA" or as otherwise  agreed to by the  Parties.  Affiliate
shall  include a marketing  description  of Movie  Channel 1 in the  programming
guide that is viewed by Subscribers that is mutually agreed upon by the parties.
Notwithstanding  the  foregoing,  upon thirty (30) days prior written  notice by
Affiliate to Programmer,  Affiliate shall have the right to permanently  replace
the programming  currently  distributed on Movie Channel 1 (i.e.,  "Club Jenna")
with the Programmer controlled service currently known as "Fresh!".

            (iii)  Movie  Channel  2. The  service  known as "Movie  Channel  2"
("Movie  Channel  2")  shall  consist  of  entertainment  programming  for adult
audiences as more fully  described in the  "Description  and  Limitation  of the
Services"  Section  attached hereto as Exhibit A. Affiliate shall refer to Movie
Channel 2 as "Spice:Xcess", and may list Movie Channel 2 on the program guide as
"XCSS" or as  otherwise  agreed to by the  Parties.  Affiliate  shall  include a
marketing description of Movie Channel 2 in the programming guide that is viewed
by Subscribers that is mutually agreed upon by the parties.  Movie Channel 1 and
Movie Channel 2 may be referred to collectively as the "Movie Channels".

            (iv) [This section intentionally left blank.]

            (v) [This section intentionally left blank.]


EXECUTION VERSION                       5

<PAGE>

            (vi) Playboy TV en Espanol.  Playboy TV en Espanol  shall consist of
native and dubbed Spanish-language entertainment programming for adult audiences
as more fully  described in the  "Description  and  Limitation  of the Services"
Section  attached  hereto as Exhibit A. Affiliate  shall refer to the Service as
"Playboy en Espanol," or other name mutually  agreed to by the parties,  and may
list the  channel  on the  program  guide as "PBE"  Affiliate  shall  include  a
marketing  description of Playboy TV en Espanol in the programming guide that is
mutually agreed upon by the parties.

            (vii) VOD  Service.  The  collection  of VOD  Packages  (as  defined
herein)  offered to  distributors  of the Service  for use in the  distributors'
Video-On-Demand  service,  wherein  each Package is offered in its entirety to a
subscriber's  premises  by means of the DTH  Distribution  System  for use in an
"On-Demand"   environment   where  the  subscriber  can  start  and  stop  video
programming  at any time and the content is delivered to  subscribers as part of
the same  service  that the  subscriber  receives  his or her linear  television
service (specifically excluding delivery via the Internet/World Wide Web.) A VOD
Package is  defined  as those  bundles  of adult  programs  consisting  of adult
content  offered  to  multi-channel  video  distributors  of  television  in the
Territory (for example any cable operator,  satellite  television  provider,  or
other  facilities-based  provider  such as  Verizon,  Bell  South  or  AT&T,  in
connection with such other provider's multi-channel video distribution business,
but not such  other  provider's  cellular  phone,  World Wide Web,  Internet  or
wireless  businesses (an "MCVP")) for distribution on a VOD basis to subscribers
with specific distribution  requirements  including requirements with respect to
the  user  interface.   Notwithstanding  the  terms  of  this  paragraph,   upon
Affiliate's   election  and  written  request,   Programmer  agrees  to  provide
customized  VOD  Packages  for use by  Affiliate  in its VOD service  offered to
Subscribers  to the extent that use of  Programmer's  VOD  Packages as set forth
above is commercially  unreasonable  given the technology  deployed by Affiliate
for so long as Affiliate's use of Programmer's VOD Packages remains commercially
unreasonable.

            (viii) [This section intentionally left blank.]

            (ix)  Programmer  represents  and  warrants  that (A) it reviews all
programming  contained in the Service for compliance with the  restrictions  and
limitations  set forth in Exhibit A, and (B) the  Service  shall  reflect  adult
content subject to the  restrictions and limitations set forth in Exhibit A, and
shall not contain or depict any acts otherwise prohibited by Exhibit A.

            (x) All right,  title and interest in and to the entire  contents of
the Service,  including, but not limited to, films and recordings thereof, title
or titles,  names,  trademarks,  concepts,  stories,  plots,  incidents,  ideas,
formulas, formats, general content and any other literary, musical, artistic, or
other  creative  material  included  therein  shall,  as between  Programmer and
Affiliate, remain vested in Programmer.

            (xi) Each of the Playboy TV,  Movie  Channel 1, Movie  Channel 2 and
Playboy TV en Espanol (if applicable)  shall be offered on a simultaneous  basis
and

EXECUTION VERSION                      6

<PAGE>

distributed by Affiliate to its Subscribers a minimum of 24 hours per day, seven
days per week, on a separate and distinct channel.

            (xii)  At any  time  during  the  Term  and in  any  portion  of the
Territory,  Affiliate shall be permitted to offer other "branded" or "unbranded"
adult programming  competitive to the Service,  it being acknowledged and agreed
by the parties that Affiliate's  offering of such other adult  programming shall
not constitute a breach of this Agreement.

            (xiii)  Programmer  shall not propose or impose upon Affiliate,  nor
shall Affiliate be obligated to pay, any surcharge or other cost (other than the
License Fees provided for in Section 2 hereof) for receipt and  distribution  of
the Service.

         (c) Other Distribution Rights and Obligations. In addition, the parties
agree as follows:

            (i) Subject to  Programmer's  obligations  hereunder and Affiliate's
rights under Section 17,  Affiliate shall  distribute the Service as transmitted
by  Programmer,  in its entirety,  in the order and at the time  transmitted  by
Programmer  without any intentional and willful  editing,  delays,  alterations,
interruptions,   deletions  or   additions   ("Alterations"),   excepting:   (A)
Affiliate's commercial or other announcements, only if permitted under Section 3
hereof,  (B) Affiliate's  electronic guides (including without  limitation,  any
mosaic or similar guides),  (C) news bulletins and other public announcements as
may be required by  emergencies  or  applicable  law; and (D) the use of digital
video  recorders at the DIRECTV  Subscriber's  premises for playback either on a
television  display  or  a  mobile  device  ("DVRs"),   videocassette  recorders
("VCRs"),   or  other  similar  devices  by  DIRECTV   Subscribers.   Programmer
acknowledges  that the DTH System requires and applies  digital  compression and
encryption  processes  prior to  transmission  and decryption and  decompression
processes upon reception and agrees that such  processing does not constitute an
Alteration of the Service.  Programmer  shall fully encrypt the satellite signal
of the Service utilizing  encryption  technology  commonly used in the satellite
distribution  industry.  Affiliate shall at all times provide Affiliate with two
operational  receivers  and  decoders  per Service as  necessary  to receive and
decode the Service.

            (ii)  Subject to the terms and  conditions  of this  Agreement,  the
terms and conditions  upon which  Affiliate  distributes  the Service to Service
Subscribers,  including,  without  limitation,  the packaging of the Service and
retail price charged,  shall be determined by Affiliate in its sole  discretion.
Affiliate  shall use reasonable  efforts to provide  Programmer  with sixty (60)
days' prior written notice of any retail price change.

            (iii) Subject to the limitations  contained in Section 17 below, and
Exhibit B, as applicable, with respect to the PPV Offerings, Affiliate may offer
a  multiple  channel  offering,  such  that for a single  payment  a  purchasing
Subscriber  is  permitted  to view  Movie  Channel 1 and Movie  Channel 2 and/or
Playboy TV together  with other adult

EXECUTION VERSION                      7

<PAGE>

channels as determined  by Affiliate  (as  restricted by Section 17 herein) (the
"Cascade"), all for one fee (the "Cascade Fee").

            Notwithstanding  Affiliate's current intention,  Affiliate shall not
be obligated to offer the Service  using the  purchasing  mechanism set forth in
this Section 1(c)(iii).

            (iv)  Programmer  shall make the  Service  available  via  satellite
signal from a domestic  communications  satellite commonly used for the delivery
of television  programming  which must be viewable with existing  equipment from
Affiliate's  broadcast  center  in  Los  Angeles,   California  (the  "Broadcast
Center").  As of the  Effective  Date,  the feeds of the  Service are or will be
available on Intelsat Americas 13 ("Programmer's  U.S.  Satellite").  Programmer
may, from time to time, in its sole discretion,  change the satellite being used
for delivery of the Service to Affiliate;  provided, however, that any satellite
used by Programmer  to transmit the Service  shall be a domestic  communications
satellite commonly used for the delivery of television programming which must be
viewable with existing  equipment from the Broadcast  Center  without  Affiliate
incurring  additional costs or requiring Affiliate to enter into any third-party
arrangements  (e.g.,  HITS) for receipt of the signals.  In the event Programmer
either  (i)  changes  Programmer's  U.S.  Satellite  to  a  satellite  or  other
transmission  medium not  susceptible  to viewing or  utilization by Affiliate's
then-existing  earth  station  equipment  without  affecting  the receipt of the
signals of any other  programming  or other services then received (or committed
to be  received)  by  such  Affiliate,  (ii)  changes  the  technology  used  by
Programmer  to  encrypt  the  Service  to  a  technology  not  compatible   with
Affiliate's then-existing descrambling equipment, or (iii) compresses, digitizes
or otherwise  modifies the signal of the Service in such a manner that it cannot
be received or utilized by  Affiliate,  then  Affiliate  shall have the right to
discontinue  carriage of the Service,  immediately;  provided that this right of
discontinuance  and deletion  shall not apply to Affiliate if Programmer  agrees
to: (I) provide Affiliate with the necessary  additional  equipment  required to
receive  the  Service  from  the new  satellite;  and  (II)  promptly  reimburse
Affiliate  for the actual out of pocket cost to acquire  and  install  equipment
necessary for Affiliate to descramble,  receive and/or utilize the signal of the
Service from such new satellite or other transmission medium,  and/or the actual
out of pocket cost to acquire and install  equipment  necessary for Affiliate to
descramble,  receive and/or utilize the signal of the Service. Programmer agrees
to use commercially  reasonable  efforts to provide  Affiliate with at least one
hundred  twenty (120) days' prior written  notice of any satellite or technology
change.   Programmer,  or  its  designee,  shall  maintain  appropriate  back-up
satellite   protection   arrangements  in  accordance  with  customary  industry
standards.  Programmer  and Affiliate  shall use their  respective  commercially
reasonable  efforts  to  maintain  for the  Service  a high  quality  of  signal
transmission  in  accordance  with  their  respective  technical  standards  and
procedures.

            (v) *****

         (d) Rights with Respect to Channel  Capacity.  Affiliate shall have the
right,  in its sole  discretion  and for  Affiliate's  sole  benefit  as between
Programmer

EXECUTION VERSION                       8

<PAGE>

and  Affiliate,  to utilize the channel  capacity  used to transmit  the Service
during any hours which (i) the Service,  or any significant  portion thereof, is
not being  transmitted to Affiliate for any reason;  or (ii) the transmission of
the  Service,  or  any  significant  portion  thereof,  has  been  suspended  or
terminated by Affiliate pursuant to Section 17. Programmer  acknowledges that it
has no  ownership  rights  in, or right to use,  any  channel  or any  amount of
capacity on any DTH Satellite.


      2. Compensation; Most Favored Nation; Programming Account.

         (a)  Compensation.  As full and complete  compensation  for Affiliate's
right  to  distribute  the  Service,  Affiliate  shall  pay  to  Programmer  the
applicable  percentage of Gross Receipts (as defined  below) for each month,  as
such percentage is calculated as set forth on Exhibit B.

            (i) "Gross  Receipts" are defined as the sum of all monies billed to
Subscribers  by  Affiliate  during  any month  (not  including  amounts  owed by
Affiliate  due to taxes other than income or franchise  taxes) for receiving any
part of the Service;  provided,  however,  that Gross Receipts shall in no event
include (i) any charge  specifically  made for access to programming  other than
for the Service or any general access charge, hardware licensing charge or other
charge made on a "blanket"  basis (which shall mean that such charge will relate
to access to all program  services  available from Affiliate by means of the DTH
Distribution  System);  or (ii) any charges  made for  ordering  the Service via
telephone as a PPV  Offering,  which  charges are  additional to the charges for
ordering the Service without using the telephone. Affiliate shall have the right
to offer  Movie  Channel  1,  Movie  Channel 2 and/or  Playboy TV as part of the
Cascade,  as set forth above,  *****.  Other than as set forth above,  Affiliate
shall notify  Programmer prior to packaging the Subscription  Offerings with any
other programming services. *****


            (ii) To the extent that a  Subscriber  prepays any portion of monies
solely in connection  with  Affiliate's  distribution  of the Service,  then the
amount  prepaid shall be included in Gross  Receipts for the month in which such
payment  was  received;  provided  that,  Affiliate's  billing  system  has  the
capability to account for such prepayments. Affiliate shall deduct the amount of
any Credit Transaction (as defined below in Section 2(a)(ii)), as such amount is
reasonably  determined  by  Affiliate,  from the Gross  Receipts of the month in
which such Credit Transaction occurs.

            (iii) "Credit  Transaction"  shall mean any refund (or other payment
or credit) to a DIRECTV  Subscriber in connection  with (A)  prepayments for the
Service,  (B)  Programmer's  inability to transmit the Service to Affiliate  for
distribution  via  the  DTH  Distribution  System  for  any  reason  other  than
Affiliate's  non-performance  of an  obligation  hereunder,  (C) a Force Majeure
Event  or  (D)  credits  (excluding  Discounted  Previews  of  the  Service  not
authorized by Programmer)  allowed by Affiliate in its  commercially  reasonable

EXECUTION VERSION                       9

<PAGE>

judgment   consistent   with   Affiliate's   policies  and  procedures   applied
consistently  to  Programmer  and  Affiliate's   other  sources  of  programming
services.

            (iv) Affiliate shall be responsible for the accounting for all Gross
Receipts and shall account to Programmer  with regard to the Gross  Receipts for
the  Service  on a monthly  basis,  *****.  Affiliate  shall  provide a separate
accounting  for the Playboy TV, Movie  Channel 1, Movie Channel 2 and Playboy TV
en Espanol (if applicable) Services. Each such accounting shall include:

            (A)   the aggregate Gross Receipts for such month;

            (B)   the origin (categorized  separately by residential subscribers
                  (which includes multiple dwelling facilities,  private offices
                  and oil rigs) and hotels/motels, if any) of all Gross Receipts
                  for Subscription Offerings for such month;

            (C)   the  number  of   residential   DIRECTV   Subscribers   as  of
                  approximately  the  fifteenth  calendar  day of such  calendar
                  month;

            (D)   the applicable Programmer Share from Exhibit B;

            (E)   the dollar amount of Programmer's  share of Gross Receipts for
                  such month;

            (F)   the number of Service Subscribers as of approximately the 15th
                  day of such calendar month; and

            (G)   for each PPV  Offering,  the  number  of  Service  Subscribers
                  purchasing  such PPV  Offering  on each  calendar  day of such
                  month; and

            (H)   Hotel/Motel License Fee (as defined below in Section 2(c)).


            (v) Programmer and Affiliate shall accord confidential  treatment to
any  information  contained in the  aforementioned  statement in accordance with
Section 15. At  Programmer's  request and at reasonable  times,  upon reasonable
advance written notice and during normal business hours at Affiliate's  offices,
Affiliate shall permit Programmer's representatives to review, one time per each
year of the Term and one time during the year immediately  after the termination
or expiration of this Agreement, those books and records maintained according to
Affiliate's standard accounting practices which are generally in accordance with
GAAP  required to verify  License  Fees and reports made  hereunder.  Programmer
shall  audit  each  calendar  year of the Term,  if at all,  within one (1) year
following  the end of such  calendar  year,  with such  review  limited to those
records  for  those  months  of

EXECUTION VERSION                      10

<PAGE>

the prior calendar year which have not been  previously  reviewed and those past
months of the current calendar year for which records are available.  Programmer
shall  report  promptly  (but no later  than 30 days  following  completion)  to
Affiliate  the results of such audit,  including  any  deficiency  in payment of
License Fees that  Programmer  believes were  revealed by such audit,  and shall
make any claim  against  Affiliate  with  respect  to the  results of such audit
within one (1) year after  reporting  such results to Affiliate.  From and after
Programmer's  audit of a  particular  period of the Term,  such period  shall be
deemed closed by the parties and,  except as may be  demonstrated by such audit,
Affiliate  shall have no further  liability  in respect of License Fees for such
period. Programmer may not commence a new audit until all prior audits have been
closed and the results have been  presented to Affiliate.  Any such review shall
be at Programmer's  sole cost and expense;  *****. The information  derived from
and  the  process  of  such  review  shall  be  subject  to the  confidentiality
provisions of Section 15.  Notwithstanding  anything herein to the contrary, any
audit  conducted  pursuant  to this  Section  2(a)(v)  shall be  conducted  by a
reputable,  industry  recognized third party auditor or another firm approved in
advance by  Affiliate,  which shall have first  entered  into a  confidentiality
agreement with Affiliate.

         (b)  License  Fee.  As full and  complete  compensation  for the rights
granted  Affiliate  hereunder,  Affiliate shall pay to Programmer,  on a monthly
basis, the "License Fees," calculated  pursuant to Programmer's  Cable Rate Card
in Exhibit B, subject to reduction  and offset for any credits,  discounts,  and
reimbursements  set forth in Exhibit B, annexed  hereto,  *****. As used in this
Section 2 and elsewhere in this Agreement (including Exhibit "B") when referring
to the  payment  of  License  Fees or the  provision  of  subscriber  reports by
Affiliate to  Programmer,  unless  expressly  modified by  "calendar,"  the term
"month" shall refer to Affiliate's  accounting month, which is the approximately
thirty (30) day period  commencing on approximately the middle of each month and
ending on approximately the middle of the next succeeding month. *****.

         (c) Hotel/Motel  License Fee. The parties understand and agree that the
terms of this  Section  2(c),  and not Section  2(a),  shall  govern the case of
monies received from the distribution of the Service to hotels or motels.  In no
event  shall  Affiliate  pay any fees or other  charges  on any  Gross  Receipts
pursuant  to both this  Section  2(c) and any other  section of this  Agreement.
Affiliate shall pay to Programmer a license fee (the "Hotel/Motel  License Fee")
simultaneously  with the  accounting  rendered  to  Programmer  as set  forth in
Section 2(a)(iv).  The Hotel/Motel License Fee shall be equal to the license fee
set forth on Exhibit D attached to this Agreement.

         (d) *****

         (e) *****

*****

      3. Commercial Announcements and Other Advertising.

EXECUTION VERSION                      11

<PAGE>

         (a) Commercial Announcements. Programmer hereby represents and warrants
that  it does  not  make  available  to any  Other  Distributor  of any  Service
commercial announcements of any nature in the schedule of such Service(s). If at
any time during the Term, Programmer provides to any Other Distributor the right
to make commercial announcements within any Service, then Programmer shall offer
such right to Affiliate on terms and  conditions  no less  favorable  than those
offered to such Other  Distributor of the Service(s).  In any event,  the rights
with respect to commercial or promotional  announcements  provided by Programmer
to  Affiliate  shall  be no  less  favorable,  in  terms  of  the  nature,  use,
scheduling,  availability,  length of the announcements and so forth (including,
without  limitation,  the right to cover Programmer's  commercial or promotional
announcements), than those provided to any Other Distributor.

         (b)  Advertising.  If  Programmer  offers  any  Other  Distributor  the
opportunity   to   advertise,   or  includes  any  Other   Distributor   in  any
advertisement(s),  whether  or  not  in  connection  with  the  Service,  in any
publication, recording, service, visual work or audiovisual work, whether or not
Programmer  controls  it,  then  Programmer  shall  provide  Affiliate  with the
opportunity to elect to be included in such advertisement, if such advertisement
is in connection with advertising the Service,  or an opportunity to elect to be
included in a similar advertisement,  if such advertisement is not in connection
with  advertising  the  Service,  on at least as  favorable  terms as such Other
Distributor.  Programmer shall not include Affiliate, or advertise Affiliate, by
any means  without  Affiliate's  prior  written  consent,  which may be given or
withheld by Affiliate in its sole discretion.

      4. Marketing and Promotion of the Service.

         (a) Affiliate  shall market and promote the Service in a similar manner
as Affiliate  markets and promotes other similar premium  programming  services;
provided,  however, that Affiliate may market and promote any other such premium
programming service differently and/or more frequently, if such service provider
provides  Affiliate with material  consideration or compensation  therefore.  In
connection  therewith,  Programmer  shall provide  Affiliate,  upon  Affiliate's
request, with promotional and marketing advice. *****. Affiliate shall publicize
the schedule of the Service in the  Territory in a manner  similar to that which
it employs,  and based on the same factors,  it considers,  in  publicizing  the
schedule of other similar premium programming  services  distributed via the DTH
Distribution  System,  including,  without  limitation,  the  publication of the
Service programming schedule in the television listings and program guides which
Affiliate, as applicable, distributes.

         (b)  Subject  to  Sections  6 and 17,  Affiliate  shall not at any time
during the Term (i) cease  marketing or promoting  the Service or (ii)  withdraw
distribution of the Service in any area of the Territory after the  introduction
thereof in such area; provided that, Affiliate may cease marketing and promoting
the  Service  if  Affiliate,  in its  absolute  sole  determination,  reasonably
believes that marketing or promoting the Service may be  politically  harmful to
Affiliate or its Affiliated  Companies or adversely  affect the corporate  image
that  Affiliate or its  Affiliated  Companies  desires to maintain at such time,
provided  however,  that should  Affiliate cease marketing  and/or promoting the
Service for the

EXECUTION VERSION                      12

<PAGE>

aforementioned  reason,  Affiliate may not market and/or promote any other adult
services comparable to the Service provided by Programmer  hereunder for so long
as Affiliate ceases marketing and/or promoting the Service.

         (c) *****

         (d) [This section intentionally left blank.]

         (e) *****

         (f) Program Guide. During the Term,  Programmer shall provide the daily
programming  schedule  for the Service to Tribune  Media  Service (or such other
service  designated by Affiliate) in order that Affiliate may access the program
schedule for purposes of the on-screen program guide.

      5. Representations. Warranties and Covenants.

         (a) By  Affiliate.  Affiliate  warrants,  represents  and  covenants to
Programmer that:

            (i) to its best  knowledge  after  diligent  review  and  receipt of
advice of legal counsel with  experience  in such  matters,  it is in compliance
with and will comply with all material "Laws" (as defined below) with respect to
its rights and obligations under this Agreement,  including without  limitation,
all  relevant  provisions  of  the  Cable  Television  Consumer  Protection  and
Competition  Act of 1992 which are applicable to Affiliate,  the  Communications
Act of  1934,  the  Communications  Decency  Act of  1996  (as any or all may be
amended and any successor, replacement or similar Laws or statutes), and any and
all  regulations  issued  pursuant  to any of the  foregoing.  As  used  in this
Agreement,  "Laws" mean and include relevant federal,  state, municipal or local
statutes, laws, rules,  regulations,  ordinances,  codes, directives and orders,
including administrative rules or policies and court orders;

            (ii) it has the power and authority to enter into this Agreement and
to fully perform its obligations hereunder;

            (iii) it shall distribute the Service in the Territory in accordance
with and subject to the terms and conditions set forth in this Agreement;

            (iv) it shall not, without Programmer's prior written approval,  use
the name of or logo for "Playboy TV," "Spice Wild," "The Hot Network,"  "The Hot
Zone," "Fresh!," "Club Jenna',  "Spice:Xcess" or "Playboy TV en Espanol," or the
names,  titles or logos of the Service (or any successors thereto) or any of its
programs,  or the names, voices,  photographs,  likenesses or biographies of any
individual  participant or performer in, or  contributor  to, any program or any
variations  thereof,  for any purpose other than in material  intended to advise
Service  Subscribers or potential  Service  Subscribers of the  availability and

EXECUTION VERSION                      13

<PAGE>

scheduling  of the  Service  or as a  channel  identifier.  Affiliate  shall not
publish or  disseminate  any  material  that  violates  restrictions  imposed by
Programmer  or  Programmer's  suppliers and disclosed  upon  reasonable  advance
written notice to Affiliate by Programmer.  The  restrictions  set forth in this
Section 5(a) (iv) shall apply only to the extent they are applied by  Programmer
uniformly with respect to all of its distributors of the Service,  and shall not
apply if Affiliate has received a valid written authorization from a third party
for any of the uses described in this Section 5(a)(iv);

            (v) it has  obtained,  and shall  maintain in full force  during the
Term hereof,  such federal,  state and local  authorizations as are material and
necessary to operate the business it is conducting in connection with its rights
and obligations under this Agreement;

            (vi)  it  has  no  knowledge  of any  misrepresentation,  breach  of
warranty or covenant made by Programmer hereunder;

            (vii) the individual  executing this Agreement on its behalf has the
authority to do so.

         (b) By  Programmer.  Programmer  warrants,  represents and covenants to
Affiliate that:

            (i) to its best  knowledge  after  diligent  review  and  receipt of
advice of legal counsel with  experience  in such  matters,  it is in compliance
with and will  throughout  the Term  continue to comply with all  material  Laws
applicable  to, or with respect to, the Service and the provision of the Service
to Affiliate,  and Programmer's rights and obligations under this Agreement with
respect to the Service and Programmer's obligations hereunder, including without
limitation,  FCC  rules and  regulations  governing  the  Service,  if any,  all
relevant  provisions of the Cable Television Consumer Protection and Competition
Act of 1992, and the  Communications  Act of 1934, the effective portions of the
Communications  Decency  Act of  1996  (as  any or all  may be  amended  and any
successor,  replacement or similar Laws) and any regulations  promulgated  under
any applicable law or any of the foregoing;

            (ii) it has the power and authority to enter into this Agreement and
to fully perform its obligations hereunder;

            (iii) it shall  provide the Service for the  Territory,  at its sole
cost and expense  (together  with any  necessary  equipment,  including  without
limitation,  backup or reserve equipment), in accordance with and subject to the
terms and conditions set forth in this Agreement, *****.

            (iv)  it  shall  promptly   provide   Affiliate  with  any  and  all
promotional  materials of the Service  which it generally  provides to any other
distributor  of the  Service,  at  Programmer's  sole cost and  expense;  and if
Affiliate  shall  request  additional  such  materials,

EXECUTION VERSION                      14

<PAGE>

then Programmer shall promptly provide such materials to Affiliate and Affiliate
shall reimburse Programmer for the reasonable actual costs thereof;

            (v) it has  obtained,  and shall  maintain in full force  during the
Term hereof,  such federal,  state and local  authorizations as are necessary to
comply with Laws or which are material and  necessary to operate the business it
is  conducting  in  connection  with  its  rights  and  obligations  under  this
Agreement;

            (vi) it has  obtained or will obtain at its sole  expense all rights
necessary  for  Affiliate  to use and enjoy its  rights in  connection  with its
distribution  of the  Service,  including,  without  limitation,  obtaining  all
necessary  trademarks,  copyrights,  licenses and any and all other proprietary,
intellectual, property and other use rights necessary in connection with, or for
Affiliate's  distribution  of the  Service,  and at all  times  during  the Term
"PLAYBOY  TV,"  "SPICE  WILD,"  "THE  HOT  NETWORK,"   "FRESH!,"  "CLUB  JENNA",
"SPICE:XCESS"  or "PLAYBOY  TV EN ESPANOL" or the names,  titles or logos of the
Service  (or any  successors  thereto) or any of their  programs,  or the names,
voices,  photographs,   music,  likenesses  or  biographies  of  any  individual
participant  or performer in, or  contributor  to, any program or any variations
thereof) and to perform its  obligations  hereunder and grant the rights granted
pursuant to Section 1;

            (vii)  there are no (and it  covenants  that it shall not enter into
directly or indirectly, allow or otherwise permit any) affiliation, distribution
or any other  agreements,  whether  written or oral,  granting  to  distributors
and/or any other third party,  person or entity any form or type of exclusive or
other  rights  that would limit or  restrict  in any way  Affiliate's  rights to
distribute the Service in the Territory;

            (viii) it shall not, without Affiliate's prior written approval, use
the name of or logo for "DIRECTV," or any variations  thereof,  for any purpose,
without Affiliate's prior written consent;

            (ix) there is no actual and, to Programmer's knowledge,  there is no
pending   investigation   (including,   without   limitation,   a   grand   jury
investigation) involving the Service (or any content included in the Service) or
any  pending  proceeding  against  Programmer  (or  any  of  its  principals  or
Affiliated  Companies)  for the violation of any federal,  state or local law or
regulation,  as applicable,  concerning illegal, indecent or obscene material or
the transmission thereof (the "Obscenity Laws");

            (x) it will notify Affiliate as soon as reasonably practical, but in
no event  more than two  Business  Days,  after  receiving  notification  of, or
becoming aware of, any pending investigation by any governmental  authority,  or
any pending criminal  proceeding against Programmer (or any of its principals or
Affiliated  Companies  (as  defined in Section  8(a)),  which  investigation  or
proceeding  concerns  distribution of the Service or programming in the Service,
including  without  limitation,  investigations  any/or  proceedings  concerning
potential  violations of Obscenity  Laws. For purposes of this Section  5(b)(x),
Programmer  shall be deemed to be aware of any such  investigation or proceeding
if any of the  directors,

EXECUTION VERSION                      15

<PAGE>

officers,  agents,  representatives  or  employees  of  managerial  functions of
Programmer  or an  Affiliated  Company has received any  communication  about or
otherwise becomes aware of any such investigation or proceeding;

            (xi) to the best of Programmer's knowledge after diligent review and
advice of counsel with experience in such matters,  the programming  Service and
all  programming  provided as part thereof that  Programmer  provides  Affiliate
hereunder complies with Obscenity Laws and is not violative of Obscenity Laws in
any jurisdiction in the Territory;

            (xii) it solely  and  exclusively  possesses,  and will at all times
during the Term so possess,  any and all rights necessary to grant Affiliate the
right to distribute the Service and all programming provided as part thereof, as
a whole or in parts, as Subscription  Offering(s)  and PPV  Offering(s),  as the
case may be, in the Territory (it being  understood  and agreed that  Programmer
has granted and may grant similar rights to other third parties);

            (xiii)  nothing  contained  in the Service or in any other  material
supplied by Programmer to Affiliate violates,  infringes,  or conflicts with any
rights of any  person  or  entity  (including,  without  limitation,  copyright,
trademark,  music  performance  and all other  proprietary  and/or  intellectual
rights);

            (xiv)  there are no  outstanding  (or,  to the best of  Programmer's
knowledge,   threatened)   judgments   or  pending   claims,   liens,   charges,
restrictions,  or  encumbrances  on or related to the Service or any programming
provided  as part  thereof  that may  materially  interfere  with the  rights of
Affiliate under this Agreement;

            (xv)  Programmer  is the sole entity that has entered into and shall
enter into agreements and obligations  with other  distributors  with respect to
the Service and to any and all programming provided as part of the Service;

            (xvi) except to the extent expressly permitted hereunder, during the
Term,   the  Service  shall  not  include  any  direct  sales,   advertising  or
infomercials;

            (xvii) the individual executing this Agreement on its behalf has the
authority to do so;


            (xviii) to its best knowledge  after diligent  review and receipt of
advice of legal counsel with  experience  in such  matters,  it is in compliance
with and will  throughout the Term continue to comply with 18 USC 2257 or 28 CFR
75 or any successor legislation or code. Programmer has prepared, maintained and
executed,  and at all times  during the Term and for a period of seven (7) years
thereafter shall,  prepare,  maintain and execute any documents or records,  and
provide  Affiliate with copies of any documents or records which are required by
Title 18, U.S.C. ss. 2257, as amended,  and/or the associated  regulations found
at 28 C.F.R.  75.1 et.  seq.,  as  amended,  and/or  any  successor  statute  or
regulation  ("Section 2257").  Programmer  warrants and represents that it is in
possession of such documents and records,  and maintains them in accordance with
Section  2257.  Programmer  agrees to appoint

EXECUTION VERSION                      16

<PAGE>

a "record  custodian" as required  under Section 2257,  and will keep  Affiliate
apprised of the physical  address  where all  required  records are compiled and
maintained  pursuant  to  Section  2257,  along  with  the  name of the  records
custodian.  Programmer  will display a conspicuous  disclosure  statement on all
depictions of `actual sexually  explicit  conduct'  contained in the Services as
required by Section 2257, which statement  identifies the records  custodian for
the content and describes the physical  location  where the records  relating to
the content may be inspected as required  under  applicable  law. If required by
law,  Programmer  will be  identified  as a  "primary  producer"  in any and all
disclosure  statements  associated  with the Services  pursuant to Section 2257.
Programmer  further agrees to cooperate  with  Affiliate in connection  with any
inspections  or  government   inquiries  initiated  pursuant  to  Section  2257.
Affiliate shall have the right to inspect such documents and records at any time
during  regular  business hours at  Programmer's  location for  maintaining  the
records with five (5) business days' prior written notice from Affiliate.

         6. Term; Effective Date; Termination.

         (a) Term; Effective Date. Subject to certain rights of termination set
forth in this Agreement, the term of the Agreement shall be for the period
commencing on the Effective Date and continuing through October 14, 2009 (the
"Term").

         (b)  Termination  for  Breach  or  Bankruptcy.  This  Agreement  may be
terminated by either party (the "Affected  Party"),  in its  discretion,  at any
time after any of the following occurrences with respect to the other party (the
"Other Party"):

            (i) the breach of any  representation,  warranty  or covenant of the
Other Party or failure by the Other Party,  its successors or assigns to perform
any material  obligation  hereunder  which is not cured within  thirty (30) days
after receipt of written  notice  thereof from the Affected Party or as to which
reasonable  steps to cure have not been commenced within such period (or are not
thereafter  diligently  pursued and completed  within an additional  thirty (30)
days); or

            (ii) the filing of a petition in bankruptcy or for reorganization by
or against the Other Party under any bankruptcy act; the assignment by the Other
Party for the  benefit  of its  creditors,  or the  appointment  of a  receiver,
trustee,  liquidator  or custodian  for all or a  substantial  part of the Other
Party's property, and the order of appointment is not vacated within thirty (30)
days; or the  assignment  or  encumbrance  by the Other Party of this  Agreement
contrary to the terms hereof; or

         (c) Termination by Affiliate. Affiliate may terminate this Agreement:

            (i) subject to Section  1(b)(viii),  immediately  upon prior written
notice, if the Service, or any programming  provided as part thereof (including,
without  limitation,  advertising,  if any), fails to comply in any material way
with Exhibit A hereto and the definition of "Service" in Section 1(b) hereof, as
reasonably  determined  by  Affiliate,  if

EXECUTION VERSION                      17

<PAGE>

Programmer is unable to cure such material failure within fifteen (15) days upon
notice (specifying such failure) thereof ;

            (ii)  if  Affiliate   discontinues  operation  of  the  DTH  System,
immediately upon such discontinuance;

            (iii)  according  to the  provisions  of Section  6(d) or Section 17
hereof;

            (iv)   immediately   following   written  notice  to  Programmer  of
Programmer's  failure to comply with any material  Laws, if Programmer is unable
to cure or  eliminate  the  failure  to comply  with such  material  Laws in any
material respect within fifteen (15) days upon notice  (specifying such failure)
thereof; or

            (v) *****

         (d)  Force  Majeure.   Notwithstanding  any  other  provision  in  this
Agreement,  neither  Programmer  nor  Affiliate  shall have any liability to the
other or any other person or entity with respect to any failure of Programmer or
Affiliate,  as the case may be, to transmit or distribute the Service or perform
its  obligations  hereunder if such failure is due to any failure or degradation
in performance of Programmer's U.S. Satellite or Affiliate's DTH Satellite(s) or
transponders  on any such  satellites  (as  applicable) or of the DTH System (in
which case,  Affiliate shall be excused from its distribution  obligations under
this Agreement), or of any failure of  scrambling/descrambling  equipment or any
other equipment owned or maintained by others  (including,  without  limitation,
Affiliate's  automated  billing and authorization  systems),  any failure at the
origination  and uplinking  center used by  Programmer  or Affiliate,  any labor
dispute, fire, flood, riot, legal enactment,  government regulation, Act of God,
or any cause beyond the  reasonable  control of Programmer or Affiliate,  as the
case may be (a "Force  Majeure"),  *****  provided,  however,  that if Affiliate
determines  in its  sole  discretion  that  it is  commercially  or  technically
unfeasible to cure a Force Majeure with respect to the DTH System or one or more
DTH Satellites and so notifies Programmer,  then either party may terminate this
Agreement  effective  upon  written  notice  to the  other  party.  The  parties
acknowledge  and agree  that  although  the  Service  may at any  given  time be
uplinked to only one of several DTH Satellites, failure or degradation in any of
such DTH  Satellites  may require  Affiliate to reduce the number of programming
services (in particular the number of PPV and/or adult  services)  available for
allocation  among  all of the DTH  Satellites,  with such  reduction  including,
without  limitation,  curtailment  or  termination  of the  distribution  of the
Service by Affiliate,  at Affiliate's sole discretion.  Accordingly,  Programmer
further  acknowledges  and  agrees  that the  provisions  set forth in the first
sentence of this  Section  6(d) shall apply and shall  exculpate  Affiliate  and
excuse the performance of Affiliate  hereunder in the event of such a failure or
degradation  of any of the  DTH  Satellites  or  the  transponders  on any  such
satellite,  regardless of whether the satellite to which the Service is uplinked
at the time of such failure or degradation is itself the subject of such failure
or degradation. In the event Affiliate determines in its sole discretion that it
is unable to cure,  or it is  commercially  impracticable  to cure,  such  Force
Majeure  during  the

EXECUTION VERSION                      18

<PAGE>

remaining  Term of this  Agreement,  then Affiliate may terminate this Agreement
immediately upon notice to Programmer.

         (e) Survival.  Termination of this Agreement pursuant to this Section 6
shall not relieve either party of any of its  liabilities  or obligations  under
this Agreement, including without limitation those set forth below in Section 8,
which shall have accrued on or prior to the date of such termination.

         (f) *****

         (g) Rights to Limit  Distribution.  Programmer shall have the rights to
limit  distribution  of Movie  Channel  1 and  Movie  Channel  2 as set forth in
Exhibit B hereof.

      7. Separate Entities. No officer,  employee, agent, servant or independent
contractor of either party hereto or their respective subsidiaries or affiliates
shall at any time be deemed  to be an  employee,  servant  or agent of the other
party  for any  purpose  whatsoever,  and the  parties  shall  use  commercially
reasonable  efforts  to  prevent  any such  misrepresentation.  Nothing  in this
Agreement  shall  be  deemed  to  create  any   joint-venture,   partnership  or
principal-agent relationship between Programmer and Affiliate, and neither shall
hold itself out in its  advertising  or in any other manner which would indicate
any such relationship with the other.

      8. Indemnification; Limitation of Liability.

         (a) By Programmer. Programmer shall indemnify, defend and hold harmless
each  of  Affiliate,  its  Affiliated  Companies  (as  defined  below)  and  the
directors,  officers,  employees,  and agents of  Affiliate  and its  Affiliated
Companies  (collectively,  the "Affiliate  Indemnitees")  from, against and with
respect  to any and all  claims,  criminal  and  civil  liabilities,  costs  and
expenses (including reasonable attorneys' and experts' fees) ("Claims") incurred
to third parties (including without limitation, any Governmental Authorities) in
connection with any claim against any of the Affiliate  Indemnitees  arising out
of (i) Programmer's breach of its representations,  warranties and covenants set
forth in this Agreement, (ii) the Service or material or programming supplied by
Programmer  pursuant to this Agreement,  (iii) the  distribution or cablecast of
any  programming  of the Service which  violates or requires  payment for use or
performance of any copyright, right of privacy or literary, music performance or
dramatic right, (iv) Programmer's  advertising and marketing of the Service, (v)
any acts or omissions by audio text suppliers  (including,  without  limitation,
the content of any of the audio text service) and all employees and  contractors
thereof,  (vi) any other materials,  including  advertising or promotional copy,
supplied or  permitted  by  Programmer,  and/or (vii) any claim for payment by a
third party as a result of Affiliate's  distribution of the Service.  As used in
this Agreement, "Affiliated Company(ies)" shall mean, with respect to any person
or  entity,  any other  person or entity  directly  or  indirectly  controlling,
controlled  by or under common  control  (i.e.,  the power to direct  affairs by
reason of ownership of voting stock,  by contract or otherwise) with such person
or entity and any  member,  director,  officer  or  employee  of such  person or
entity.

EXECUTION VERSION                      19

<PAGE>

         (b) By Affiliate.  Affiliate shall indemnify,  defend and hold harmless
each  of  Programmer,  Programmer's  Affiliated  Companies  and  the  directors,
officers,  employees  and  agents  of  Programmer  and  Programmer's  Affiliated
Companies  (collectively,  the "Programmer  Indemnitees") from, against and with
respect  to any and all  claims,  liabilities,  costs  and  expenses  (including
reasonable  attorneys' and experts' fees) incurred to third parties  arising out
of (i) Affiliate's breach of its  representations,  warranties and covenants set
forth in this Agreement,  (ii) Affiliate's  distribution of the Service by means
of the DTH  Distribution  System (except with respect to claims  relating to the
content of the Service,  including  advertising or promotional  copy supplied or
permitted by  Programmer),  (iii)  Affiliate's  advertising and marketing of the
Service and the DTH System,  and (iii) any other  materials  used by  Affiliate,
including  advertising  or  promotional  copy,  not  supplied  or  permitted  by
Programmer.

         (c)   Procedure   for    Indemnification    Claims.    The   respective
indemnification obligations of each of the parties pursuant to Sections 8(a) and
8(b),  above,  shall be conditioned  upon strict  compliance  with the following
procedures  for  indemnification  claims based upon or arising out of any claim,
action or proceeding by any person not a party to this Agreement. If at any time
a claim shall be made, or an action or proceeding shall be commenced,  against a
party to this Agreement (the "Aggrieved  Party") which could result in liability
of  the  other  party  (the  "Indemnifying  Party")  under  its  indemnification
obligations  under  this  Agreement,  the  Aggrieved  Party  shall  give  to the
Indemnifying  Party notice of that claim,  action or proceeding  within five (5)
Business Days following receipt of service of any claim, action or proceeding by
the Party  (except  that  failure  to give that  notice  shall  not  excuse  the
Indemnifying Party except to the extent that it is materially prejudiced by that
failure).  The notice shall state the basis for the claim,  action or proceeding
and the amounts  claimed,  (to the extent that amount is  determined at the time
when the notice is given) and shall permit the Indemnifying  Party to assume the
defense  of any such  claim,  action  or  proceeding  (including  any  action or
proceeding  resulting  from any such claim)  with  counsel  which is  reasonably
acceptable to the Aggrieved Party.  Failure by the Indemnifying  Party to notify
the  Aggrieved  Party of its election to defend the claim,  action or proceeding
within a reasonable  time, but in no event more than fifteen (15) days after the
notice shall have been given to the Indemnifying Party, shall be deemed a waiver
by the  Indemnifying  Party  of  its  right  to  defend  the  claim,  action  or
proceeding;  provided,  however, that the Indemnifying Party shall not be deemed
to have  waived  the  right to  contest  and  defend  against  any  claim of the
Aggrieved Party for  indemnification  under this Agreement based upon or arising
out of that claim, action or proceeding.

            (i) *****
*****

      9. Notices.  Except as set forth below, all notices  hereunder shall be in
writing  and  delivered  by  hand  or sent by  certified  mail,  return  receipt
requested,  fax, an overnight  delivery  service to the  receiving  party at its
address set forth above or as otherwise designated by written notice.  Notice to
Programmer shall be provided as follows:

EXECUTION VERSION                     20

<PAGE>



If by mail, facsimile        Playboy Entertainment Group, Inc.
or overnight or              2706 Media Center Drive.
personal delivery:           Los Angeles, California 90065
                             Attention:  Senior Vice President,
                             Business and Legal Affairs
                             Fax:  (323) 276-4502

                             Playboy Entertainment Group, Inc.
                             2706 Media Center Drive.
                             Los Angeles, California 90065
                             Attention:  Executive Vice President,
                             Sales and Affiliate Relations
                             Fax:  (323) 276-4505

With a courtesy copy to:     Playboy Enterprises, Inc.
                             680 N. Lake Shore Drive
                             Chicago, Illinois 60611
                             Attn:  General Counsel
                             Fax:  (312) 266-2042


Notice to Affiliate shall be provided as follows:


If by mail                   DIRECTV, Inc.
or facsimile:                P.O. Box 92424
                             Los Angeles, California 90009
                             Attention:  Executive Vice President, Programming
                             Fax:  (310) 535-5416
                             cc:  General Counsel
                             Fax:  (310) 964-4991
                             cc:  Legal & Business Affairs
                             Fax:  (310) 964-4880

If by overnight or           DIRECTV, Inc.
personal delivery:           2230 East Imperial Highway
                             El Segundo, California 90245
                             Attention: Executive Vice President, Programming
                             cc:  General Counsel
                             cc:  Legal & Business Affairs

      Notice given by mail shall be  considered to have been given five (5) days
after the date of mailing,  postage prepaid certified or registered mail. Notice
given by facsimile  machine  shall be  considered to have been given on the date
receipt  thereof is  electronically  acknowledged.  Notice given by an overnight
delivery  service  shall be  considered  to have been given on the next business
day.

EXECUTION VERSION                      21

<PAGE>

      10. Waiver.  The failure of any party to insist upon strict performance of
any  provision  of this  Agreement  shall  not be  construed  as a waiver of any
subsequent breach of the same or similar nature.  Subject to Section 8(d) above,
all rights and remedies  reserved to either party shall be cumulative  and shall
not be in  limitation  of any other right or remedy which such party may have at
law or in equity.

      11. Binding  Agreement;  Assignment.  This Agreement shall be binding upon
the parties hereto and their respective  successors and assigns,  except that it
may not be assigned by transfer,  by operation of law or otherwise,  without the
prior  written  consent  of  the  non-transferring  party,  which  shall  not be
unreasonably  withheld;  provided,  however,  that (i)  Affiliate may assign its
rights and  obligations  under this  Agreement,  in whole or in part  (including
without  limitation,  Affiliate's  right to  distribute  the  Service)  (A) to a
successor  entity to Affiliate's  DTH business;  (B) to a third party as part of
preparing to go or going  public;  or (C) to a third party,  provided  Affiliate
remains  primarily liable for the performance of such third party's  obligations
hereunder and (ii) Programmer may assign its rights and  obligations  under this
Agreement,  in whole or in  part,  (A) to a  successor  entity  to  Programmer's
business;  provided,  however,  that such  assignment  shall be  subject  to the
limitations  relating to Change in Control set forth in Section 6(c)(v) hereof);
or (B) to a third party as part of preparing to go or going  public,  so long as
the  controlling  stockholder(s)  of  Programmer  and  substantially  all of the
members of management of the  Programmer  remain the same  following the initial
public offering and for the duration of the Term.

      12. Laws of California; Consent to California Jurisdiction. This Agreement
shall be governed by and construed in  accordance  with the laws of the State of
California  applicable to contracts made and fully performed therein,  except to
the extent that the parties'  respective  rights and  obligations are subject to
mandatory local, State and Federal laws or regulations.  All actions relating to
this  Agreement  shall be brought,  and the parties  hereto consent to exclusive
jurisdiction (in personam and in rem) and venue for all actions relating to this
Agreement,  in the courts located in Los Angeles County,  California;  provided,
however,  that any  judgments  or court  orders  obtained may be enforced in any
other  jurisdiction.  Programmer  represents  that CT Corporation  System is its
authorized agent for service of process in Los Angeles, California.

      13. Entire Agreement and Section  Headings.  This Agreement sets forth the
entire agreement and understanding of the parties relating to the subject matter
hereof,  and supersedes all prior  agreements,  arrangements,  or understandings
relating  to the subject  matter  hereof  (whether  written,  oral or  implied),
including,  without limitation, the Current Playboy Agreement and any amendments
thereto. This Agreement shall not be modified other than in a writing, signed by
each of the parties hereto.  The section headings hereof are for the convenience
of the parties only and shall not be given any legal effect or otherwise  affect
the interpretation of this Agreement.

      14. Severability.  The parties agree that each provision of this Agreement
shall be construed as separable  and  divisible  from every other  provision and
that the enforceability of

EXECUTION VERSION                      22

<PAGE>

any one provision  shall not limit the  enforceability,  in whole or in part, of
any other provision hereof. In the event that a court of competent  jurisdiction
determines that a restriction contained in this Agreement shall be unenforceable
because of the extent of time or  geography,  such  restriction  shall be deemed
amended to conform to such extent of time and/or  geography  as such court shall
deem reasonable.


      15. Confidentiality.

         (a)  Generally.  The parties agree that they and their  employees  have
maintained  and will maintain,  in confidence,  the terms and provisions of this
Agreement,  as well as all data, summaries,  reports,  proprietary  information,
trade secrets and information of all kinds, whether oral or written, acquired or
devised or developed in any manner from the other party's  personnel or files or
any  proprietary  or subscriber  information  provided by one party to the other
party  (the  "Confidential  Information"),  and that  they have not and will not
reveal the same to any persons not employed by the other party  except:  (i) (A)
at the written  direction of such party;  (B) to the extent  necessary to comply
with the law or the valid order of a court of competent  jurisdiction,  in which
event the  disclosing  party  shall so notify  the other  party as  promptly  as
practicable  (and, if possible,  prior to making any  disclosure) and shall seek
confidential   treatment  of  such  information,   or  in  connection  with  any
arbitration proceeding;  (C) as part of its normal reporting or review procedure
to its parent company, its financial advisors,  auditors and its attorneys,  and
such parent  company,  financial  advisors,  auditors and attorneys  agree to be
bound by the provisions of this Section 15; (D) to independent contractors hired
by  either  party in the  ordinary  course  of  business,  bona  fide  potential
investors, insurers and financing entities; provided, however, that such persons
described  above agree to be bound by the  provisions of this Section 15; or (E)
in order to enforce any of its rights pursuant to this Agreement;  however, that
such person described above agrees to be bound by the provisions of this Section
15; or (ii)(A)  at the time of  disclosure  to the  recipient  the  Confidential
Information  is in the public domain;  or (B) after  disclosure to the recipient
the  Confidential  Information  becomes  part of the  public  domain by  written
publication  through no fault of the recipient.  During the Term,  neither party
shall issue an independent press release, or discuss with a member of the press,
this Agreement or the transactions contemplated hereby without the prior written
consent of the other party.

         (b) Programmer's  Further Obligations.  Notwithstanding  Section 15(a),
Programmer  specifically  acknowledges  and agrees that any lists of Affiliate's
customers or users, and all information  related to such customers and users, is
confidential and proprietary information of Affiliate and cannot be disclosed by
Programmer or used by Programmer for any purpose or use  whatsoever,  other than
for its review at  Affiliate's  offices  as part of  Programmer's  audit  rights
hereunder to determine if Programmer has been paid the License Fees due to it by
Affiliate.  Also notwithstanding  Section 15(a), Programmer further acknowledges
and agrees that under no circumstances will it in any way: disclose  information
(whether   personally   identifiable  or  not)  to  any  third  party  regarding
Affiliate's  customers  or users or engage in any direct  mailing  or  telephone
solicitation  which  Affiliate's  customers  or  users  do  not  previously  and
expressly  approve  (whether  orally or in writing) or previously

EXECUTION VERSION                      23

<PAGE>

and expressly  request  (whether orally or in writing),  or which Affiliate does
not previously and expressly approve in writing in Affiliate's sole discretion.

      16. Injunctive Relief.  Notwithstanding  anything in this Agreement to the
contrary,  Programmer  and  Affiliate  each  shall  have  the  right  to  obtain
injunctive  relief,  if  necessary,  in order to  prevent  the other  party from
willfully breaching its obligations under this Agreement.

      17.  Cessation  of  Program  Distribution.  If  Affiliate  in  good  faith
reasonably believes that Affiliate's  provision of any of the programming on the
Service  either  violates  any  material  Law or  could  be  found by a court or
administrative  agency  to  violate  any  material  Law (a  "Law  Violation"  or
"Potential Law Violation") or reasonably believes in good faith at any time that
any of the programming on the Service is adversely affecting the corporate image
that  Affiliate  desires to  maintain  at such time (an "Image  Problem")  then,
notwithstanding  anything to the  contrary in this  Agreement,  (a)  immediately
following  written  notice  to  Programmer  in the  case of a Law  Violation  or
Potential  Law  Violation,  or (b) no sooner  than  thirty  (30) days  following
written  notice to  Programmer  in the case of an Image  Problem  and only after
consultation with Programmer and providing Programmer the opportunity to propose
a plan to resolve  the Image  Problem (if  Affiliate  elects to  terminate  this
Agreement  as  provided  in this  Section  17);  Affiliate  may  terminate  this
Agreement,  or Affiliate may cease distributing the offending programming or the
Service (in any portion of the Territory,  or the entire Territory, as Affiliate
shall  determine  in its  sole  discretion  based  on  the  genesis  of the  Law
Violation;  Potential Law Violation or Image Problem) until Affiliate determines
in Affiliate's  sole  discretion that there will be no Image Problem because the
Service  programming at that  subsequent  time is consistent  with the corporate
image that Affiliate then desires to maintain or Affiliate reasonably determines
that a Law  Violation  or  Potential  Law  Violation  will not again  occur.  If
Affiliate,  pursuant to this Section 17 and due to an Image Problem,  desires to
cease  distributing the Service,  Affiliate shall provide Programmer with notice
thereof  setting forth in reasonable  detail the nature of Affiliate's  concerns
and provide Programmer with the opportunity to propose changes in the Service to
address Affiliate's concerns.

      18. Survival of Representations  and Warranties.  All  representations and
warranties  contained  herein  or made by the  parties,  and  each of  them,  in
connection  herewith shall survive any independent  investigation made by either
party.

      19. Counterparts.  This Agreement may be executed in several counterparts,
each of which shall be deemed an  original  and all such  counterparts  together
shall  constitute but one and the same  instrument.  The parties also agree that
this  Agreement  shall be  binding  upon the  faxing  by each  party of a signed
signature page thereof to the other party. If such a

EXECUTION VERSION                      24
<PAGE>

faxing occurs, the parties agree that they will each also immediately post, by
Federal Express, a fully executed original counterpart of the Agreement to the
other party.

      IN WITNESS WHEREOF,  the undersigned parties have caused this Agreement to
be  executed  by their duly  authorized  representatives  as of the day and year
first above written.

DIRECTV, INC.


By:  /s/ Toby Berlin
     ----------------------------------------

Toby Berlin
Vice President, Programming Acquisitions


PLAYBOY ENTERTAINMENT GROUP, INC.


By:  /s/ Jonathan Blinderman/
     ----------------------------------------


SPICE HOT ENTERTAINMENT, INC.


By:  /s/ Jonathan Blinderman/
     ----------------------------------------

EXECUTION VERSION                      25

<PAGE>

                                    EXHIBIT A


                   DESCRIPTIONS AND LIMITATIONS OF THE SERVICE

From and after the Effective  Date and at all times during the Term, the Service
(including Playboy TV En Espanol, if applicable) shall be provided by Programmer
to Affiliate on a full-time turnaround basis (i.e., 24 hours per day, seven days
a week)

The  programming  content  of  the  Service  shall  comply  with  the  following
limitations and restrictions:

(i)  With  respect  to the  services  making  up the  Service,  the  programming
contained  therein shall (subject to specific channel  descriptions set forth in
this Agreement):

*****

(ii) All programming services may:

      (A) Include nudity and sexual  situations as a matter of course;  however,
there shall be no depiction of any sexual acts prohibited by this Exhibit A.

      (B) Include explicit and graphic language; *****.

(iii) The Movie Channels shall comply with the following:

      (A) Movies on the Movie  Channels  shall be  scheduled  to start  every 90
minutes,  and on a staggered basis,  with attention given to creating  appealing
double feature, three-hour blocks.

      (B) The movies  broadcast on the Movie Channels shall generally range from
70 to 85 minutes in length.

      (C) *****

(iii)  Subject to specific  channel  descriptions  set forth in this  Agreement,
Programmer  may  determine the content of its  programming  services in its sole
discretion,  including the substitution or withdrawal of scheduled programs, and
of commercial, promotional or other announcements, consistent with the terms and
conditions of this Agreement.

(v) Programming Service Specific Restrictions.

      (A) Playboy TV. *****

      (B) Movie Channel 1. *****

      (C) Movie Channel 2. *****

EXECUTION VERSION                     26

<PAGE>


      (D) Playboy TV en Espanol Service. *****

      (E) *****

EXECUTION VERSION                      27

<PAGE>

*****


EXECUTION VERSION                      28

<PAGE>


                                    EXHIBIT B


          PROGRAMMER'S CABLE RATE CARD FOR NON-HOTEL/MOTEL DISTRIBUTION


                               *****                                *****

*****                          *****                                *****
*****                          *****                                *****
*****                          *****                                *****

                                                      *****

EXECUTION VERSION                      29

<PAGE>


                                    EXHIBIT C

                    MONTHLY PROGRAM SCHEDULES FOR THE SERVICE


                                 (see attached)

EXECUTION VERSION                      30

<PAGE>

                                    EXHIBIT D

               PROGRAMMER'S RATE CARD FOR HOTEL/MOTEL DISTRIBUTION


                               *****                                *****

*****                          *****                                *****
*****                          *****                                *****
*****                          *****                                *****

EXECUTION VERSION                      31

<PAGE>




                                    EXHIBIT E

         PROGRAMMERS RATE CARD FOR PLAYBOY TV EN ESPANOL (IF APPLICABLE)


*****                          *****                                *****
*****                          *****                                *****


EXECUTION VERSION                      32