Exhibit
10.1





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.







PLAYBOY
ENTERTAINMENT GROUP, INC.
 
 
 
 March
31, 2008
 
 
 Melinda
C. Witmer,
 Executive
Vice President and
 Chief
Programming Officer
 Time
Warner Cable LLC
 290
Harbor Drive
 Stamford,
CT 06902
 
 Re:
                First
      Amendment to the Affiliation Agreement by and between Playboy
      Entertainment Group, Inc.; Spice Entertainment, Inc.; and Spice Hot
      Entertainment, Inc. (collectively “Playboy”) and Time Warner Cable Inc.dated
      as of July 8, 2004 (the “Affiliation Agreement”)
 
 Dear
Melinda:
 
 This
letter agreement, when duly executed by Time Warner Cable LLC (as a successor to
Time Warner Cable Inc.) (“TWC”) and Playboy below, shall
constitute TWC’s and Playboy’s first amendment to the Affiliation Agreement,
and, except as set forth in Paragraphs 13 and 14 below, shall be effective as of
the date indicated above (the “Amendment
Date”).  Terms that are capitalized but not defined herein
shall have the meanings ascribed to them in the Affiliation
Agreement.
 
 For
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Playboy and TWC hereby agreed to amend the Affiliation Agreement
as follows:
 
 1.
              The following definitions are
      added to Section 1(a) of the Affiliation
  Agreement:
 
 “Multiplex”means the packaging of Pay Per View
Purchases as a single offering, such that for a single payment a purchasing
Subscriber is permitted to view one or more “Multiplex Services” (as defined
below), together with other adult channels as determined by Affiliate, all for a
single payment for a period not to exceed twenty four (24)
hours.
   2706
MEDIA CENTER DRIVE, LOS ANGELES, CALIFORNIA  90065 323.276.4075 / FAX
323.276.4502
 
  “Multiplex
Services” means the Playboy
TV Service and/or the Spice Services actually distributed by
Affiliate.
 
 “Offering
Percentage”means the percentage, derived on a
monthly basis based on reports provided by Affiliate, calculated by dividing:
(a) the number of Affiliate’s Subscribers that have the Playboy TV SVOD Service
available to them from a Time Warner Cable System; by (b) the total number of
Affiliate’s Subscribers in Time Warner Cable Systems that offer
SVOD.
 
 “Qualifying
Benchmark”means the status
whereby:
 
 (1)       Either:
 (a) Affiliate’s Offering Percentage is
***** for a given calendar month *****.  Notwithstanding the
foregoing, if for any month during the Term the Offering Percentage is less than
***** will be deemed satisfied for the ***** if, at the end of such *****
period, the Offering Percentage has increased to *****; or
 
 (b) the Playboy TV SVOD Service is made
available by Affiliate for purchase by Subscribers in Systems managed by
Affiliate’s *****.  If during the Term, (i) solely as the direct
result of a divestiture of all or part of Time Warner Cable Systems in the *****
divisions that are Time Warner Cable Systems as of the date hereof, the total
Subscribers in Time Warner Cable Systems in the *****, and; (ii) the number of
total Subscribers in Time Warner Cable Systems in the ***** beginning as of the
first day of any calendar month during the Term following the effective date of
such divestiture then Affiliate shall no longer be deemed to have satisfied the
NY/NJ/LA Requirement;
 
 and
 
 (2)     
Spice-branded VOD Services are made available to a ***** of those Subscribers
that receive Video-On-Demand services from a Time Warner Cable System (as
determined based on reports provided by Affiliate) ***** at any point during the
Term, including without limitation the Amendment Date.  The parties
acknowledge and agree that on the Amendment Date, Affiliate has satisfied
the ***** (and acknowledge and agree that Affiliate makes the Spice-branded
VOD Services available in the systems described on Schedule A hereto) and
that *****.
 
 Notwithstanding anything to the
contrary, Affiliate shall be deemed to have satisfied the Qualifying Benchmark
for the period ***** and continuing for ***** thereafter.
 
 2.
              Subsection 4(b) of the Affiliation
      Agreement, “Playboy TV SVOD Service Description”, is amended by the
      replacement of the third sentence of such subsection with the following
      sentences:
 
 The Playboy TV SVOD Service shall
consist of a minimum offifty (50) hoursof VOD Programs each
month.  In the event Playboy makes any other or any additional, larger
SVOD package offerings available to any distributor, TWC will have the right but
not the obligation to make such offerings available to Subscribers under the
same terms applicable to the Playboy TV SVOD Service.  Notwithstanding
the foregoing,
  2
  the Playboy SVOD Service shall not
include full-length movie assets (currently known as “Playboy Director’s Cut”)
that are featured as part of the Spice Services.
 
 3.
              Subsection 4(f) of the Affiliation
      Agreement, “VOD Package Service(s)”, is amended by inserting the following
      after the last sentence of  Subsection
    4(f):
 
 Within ninety (90) days following the
execution of the First Amendment, Network will offer the following VOD Package
Services:
 
 (i)Too
Hot for TV VOD Package Service.Subject to the terms of this
Section 4(f), Playboy will make available to Affiliate a VOD Package Service
entitled “Too Hot for TV” consisting offourteen (14) hoursof Programs (the VOD Package Service
referred to herein as the “Too Hot for TV VOD
Package Service”). The
Programs in the Too Hot for TV VOD Package Service shall be
professionally-produced adult full-length programs selected by Playboy, edited
to comply with the TVMA rating, and shall focus on real people in unusual or
novel sexually oriented situations with the level of depicted explicitness being
the same as (or less explicit than) programming shown on premium channels such
as HBO, Showtime and Cinemax. The depiction of sex in these episodes may be real
or simulated.
 
 (ii)Gay
Targeted VOD Package Service.Subject to the terms of this Section
4(f),Playboy will make available
to Affiliate a VOD Package Service consisting oftwenty (20) hoursof Programs (the VOD Package Service
referred to herein as the “Gay Targeted VOD
Package Service”). The
Programs in the Gay Targeted VOD Package Service shall be
professionally-produced adult programs selected by Playboy, targeted to the male
gay community, edited to a standard no more explicit than the Partially Edited
Standards.  Each Program in the Gay targeted VOD Package Service: (v)
shall depict homosexual situations and nudity among consenting adults; (w) may
depict erect genitalia, male on male fellatio and simulated or implied sexual
intercourse; (x) shall not depict actual anal penetration, licking or anal
sexual play of any kind; (y) shall not depict male ejaculation, sexual violence
or excessive nonsexual violence, incest, sadism, sadomasochism, forced bondage
in scenes containing sexual activity or forced bondage carrying sexual innuendo
or sexual connotations, illegal or irresponsible drug usage, minors or scenes
with adults being depicted as minors; and (z) shall not include racist or sexist
language.
 
 (iii)International
VOD Service.  Subject to the terms of
this Section 4(f), Playboy will make available to Affiliate a VOD Package
Service consisting oftwenty (20) hoursof Programs (currently referred to as
“Caliente”). The Programs in the
 International VOD Package Service shall
be professionally-produced internationally produced adult programs featuring
foreign men and women in the language and locations of each country, the
languages being other than English (and at any particular time, not more thanten (10) hoursof Programs in such package shall be in
a Hispanic language), edited to be no more explicit than the Partial Edited
Standards.
 
 4.
              Subsection 4(j) of the Affiliation
      Agreement, “Services Provided in Entirety”, is amended by the deletion of
      the word “national” in the penultimate sentence in the
      subsection.




3


5.
              Subsection 4(k) of the Affiliation
      Agreement, “High Definition Programming”, is amended by the deletion of
      all but the first sentence of the Subsection, and inserting the following
      prior to the first sentence: “Network represents and warrants that no
      distributor has, or will have at any time during the Term after October 1,
      2007, the exclusive rights to distribute HD
    Programs.”
 
 6.
              A new Subsection 4(n) is added to
      the Affiliation Agreement by inserting the
    following:
 
 (n)  Multiplex
Offering.  Affiliate may include Playboy TV Service and/or any Spice
Service distributed by Affiliate in a Multiplex.
 
 7.
              Paragraph 8 of the Affiliation
      Agreement, “Fees”, is amended by adding before Subsection 8(a) the
      following:
 
 Service
Fees.For each calendar
month of the Term, Affiliate shall pay to Network, in consideration of the
licenses granted herein, the applicable fees for each Service carried by each
System during such calendar month, calculated in accordance with the provisions
set forth below (for each Service, the “Fee”). With respect to any particular
calendar month during which Affiliate has satisfied the Qualifying Benchmark,
the applicable Fees are those set forth in Subsection 8(a) below. With respect
to any particular calendar month during which Affiliate has not satisfied the
Qualifying Benchmark, the applicable Fees are those set out in Subsection 8(b)
through Subsection 8(g) and Subsection 8(i) below.
 
 8.
              Subsection 8(a) of the Affiliation
      Agreement, “Service Fees”, is deleted in its entirety and replaced with
      the following:
 
 (a)Qualifying
Benchmark Rates.If, for a particular
calendar month, Affiliate has satisfied the Qualifying Benchmark, then the Fees
set forth in Subsections 8(a)(1) – 8(a)(11) shall be applicable for the
respective Services.
 
 (1) For Systems carrying the Playboy TV
Service for Pay Per View Purchase, the monthly Fee for Pay Per View Purchases of
the Playboy TV Service shall equal the greater of (x) ***** or (y)*****;
 
 (2) For Systems carrying the Playboy TV
Service as a Subscription Purchase (without making the Playboy TV SVOD Service
available to Subscribers in such System), the monthly Fee for Playboy TV Service
Subscription Purchases shall equal the greater of (x) ***** or (y)
*****;
 
 (3) For Systems carrying the Playboy TV
Service as a Subscription Purchase (with Playboy TV SVOD Service included as
part of a Playboy TV Service Subscription Purchase at no additional cost), the
monthly Fee for the Playboy TV Service Subscription Purchase and Playboy TV SVOD
Services shall equal the greater of (x) ***** or (y) *****;
  4
  (4) For Systems offering the Playboy TV
SVOD Service to its Subscribers for an additional access fee, the monthly Fee
for the Playboy TV SVOD Service Subscription Purchase shall equal
*****;
 
 (5) For Systems carrying the Spice
Services for Pay Per View Purchase, the monthly Fee for Pay Per View Purchases
of the Spice Services shall equal the greater of (x) ***** or (y)
*****;
 
 (6) For Systems carrying any VOD Package
Service (including any VOD Package Service carrying HD Programs), the monthly
Fee for the VOD Purchases of VOD Programs (except the VOD Purchase of VOD
Programs from the Too Hot for TV VOD Package Service) shall equal the greater of
(x) *****or (y) *****;
 
 (7) For Systems carrying the Playboy TV
En Español Service for Pay Per View Purchase, the monthly Fee for Pay Per View
Purchases of the Playboy TV En Español Service shall equal the greater of (x)
***** or (y) *****;
 
 (8) For Systems carrying the Playboy TV
En Español Service as a Subscription Purchase (without making the Playboy TV En
Español SVOD Services available to Subscribers in such System), the monthly Fee
for Playboy TV En Español Service Subscription Purchases shall equal the greater
of (x) ***** or (y) *****;
 
 (9) For Systems carrying the Playboy TV
En Español Service as a Subscription Service (with Playboy TV En Español SVOD
Services included as part of their Playboy TV En Español Subscription Purchase
at no additional cost), the monthly Fee for the Playboy TV En Español Service
and Playboy TV En Español SVOD Services shall equal the greater of (x) ***** or
(y) *****;
 
 (10) For Systems offering Playboy TV En
Español SVOD Service to its Subscribers for an additional access fee, the
monthly Fee for the Playboy TV En Español SVOD Service shall equal
*****;
  (11)  In
the event that Affiliate offers a Multiplex, Network will be entitled to a
percentage of the gross receipts with respect to such Multiplex carriage as set
forth below.  In each month that Affiliate offers a Multiplex
including the Multiplex Services, or a Multiplex including any combination of
such Multiplex Services, with or without other third party adult programming
services, the corresponding fee payable to Network for such Multiplex carriage
shall be determined by use of the following formula(s):
 
 *****
 
 Plus
 
 *****
 
 For
any period in which Affiliate does not meet the Qualifying Benchmark, the fee
owed for distribution of any Multiplex Service in a Multiplex shall be
  5
  computed
as set forth in this Subsection 8(a)(11), provided that the percentage set forth
in the computation shall be increased to match the rate paid by Affiliate to
Network for distribution of the Playboy TV Service and Spice Services on a PPV
basis as set forth below.
 
 9.
              Subsection 8(i) of the Affiliation
      Agreement, “VOD Package Service(s) Charge”, is amended by deleting the
      words “For each System carrying the VOD Package Service(s) hereunder, the
      Fee for the” and inserting before the first line the
      following:
 
 For Systems carrying the Too Hot for TV
VOD Package Service, the monthly Fee for the VOD Purchases of Too Hot for TV VOD
Programs shall equal the greater of (x) ***** or (y) *****.  For each
System carrying any other VOD Package Services, in the event Affiliate is not
satisfying the Qualifying Benchmark, the Fee for such”
  10.
                The following shall be added as a
      new Subsection 10(d)(i) to the Affiliation
      Agreement:
 Network acknowledges that during the
Term of the Affiliation Agreement and prior to the Amendment Date, Affiliate
incurred ***** in marketing expenses for the promotion of the Playboy TV Service
in the ***** which Affiliate did not deduct from Fees due as Affiliate was
entitled to pursuant to Section 10(d) of the Affiliation Agreement,
*****.  Accordingly, Network agrees that Affiliate may deduct these
fees from fees owed by Affiliate to Network with respect to distribution of the
Services on the *****, and Network waives any claims or rights associated with
documentation requirements associated with such payment.  Network and
Affiliate further agree that all requirements set forth in the third full
sentence of Subsection 10(d) have been satisfied or are deemed satisfied, and
Network hereby waives any claims or rights associated with such documentation
requirements.
  11.
                  Effective on the Amendment Date,
      Subsection 10(d) of the Affiliation Agreement, “Marketing Allowance” shall
      be deleted in its entirety and the following shall be inserted as a new
      Subsection 10(d) of the Affiliation
      Agreement:
  Network shall provide marketing support
to Affiliate in an annual amount of ***** of the Term (the “Marketing Fund”),
which amount shall accrue to Affiliate *****in equal amounts of*****.  The Marketing Fund
shall be used by Affiliate in collaboration with Playboy, subject to the
provisions of Section 10(a) of the Affiliation Agreement, to fund the creation
and implementation of subscriber acquisition, retention and/or upgrade marketing
campaigns and marketing efforts and campaigns (“Marketing Campaigns”), which may
include, without limitation, outdoor/billboard media, direct mail, print
advertising, radio advertising commercial spots, and/or other media advertising,
in Affiliate’s sole discretion.  *****  Network shall
reimburse expenditures for Marketing Campaigns up to level of the then-current
accrued Marketing Fund promptly but in no event later than ***** after Affiliate
provides notice by e-mail to ***** (or an alternative email address specified by
Network by written notice to Affiliate)
  6
  of such expenditure.  In the
case of Multiple Network Promotions, Network shall only be responsible to fund
***** of such Multiple Network Promotion.  Notwithstanding the
foregoing, Network shall pay the *****.
  12.
                    Section 2 of the Affiliation
      Agreement, “Rights”, is amended to add a new Subsection (d) as
      follows:
 (d) Other Rights. Network grants to
Affiliate the limited, non-exclusive, non-transferable, non-assignable,
non-sublicenseable right to distribute and make available solely to current
Subscription Purchasers the Playboy TV Service and the Playboy TV SVOD Service
*****.  Affiliate shall use reasonable efforts to terminate any
unauthorized access to the Playboy TV Service and/or the Playboy TV SVOD
Service, as applicable, resulting from Affiliate’s exploitation of its rights
under this Section 2(d). In the event Network discovers any such unauthorized
access, Network shall provide Affiliate with written notice
thereof.  Affiliate shall use reasonable efforts with respect to the
security of the Services to the extent made accessible by Affiliate *****,
including, but not limited to, by utilizing appropriate generally accepted
techniques intended to prevent the material unauthorized access, copying and
distribution of the Playboy TV Service and/or the Playboy TV SVOD Service or any
portion thereof.  Any incremental fee charged for providing these
Services ***** under this subsection shall be considered revenue for
Subscription Purchases of the Playboy TV Service.
 13.
                      Effective upon the earlier of: (i)
      termination of carriage ofSpice and Spice 2in Affiliate’sCincinnati, Ohiodivision; or (ii) seventy-five (75) days
      following the Amendment Date, the definition of “Spice Services” in
      Section 1(a) of the Affiliation Agreement is amended to delete after the
      words “known as” the phrase‘“Spice,” “Spice 2,”’.
 14.
                      Effective upon the earlier (i)
      termination of carriage of Spice and Spice 2 in Affiliate’s Cincinnati,
      Ohio division; or (ii) seventy-five (75) days following the Amendment
      Date, Subsections 4(e)(i) & (ii) of the Affiliation Agreement are
      deleted in their entirety and replaced with the phrase “This subsection
      intentionally left
      blank.”
 15.
                      Affiliate acknowledges that
      Network will cease distributing the Spice and Spice 2 Services
      seventy-five (75) days following the Amendment Date and agrees that
      Network will have no obligation to provide such Services in the
      future.  Within***** from the Amendment Date,
      Network shall pay to Affiliate *****.  Affiliate shall ***** in
      the Operating Area of ***** to promote any or all of Network’s Services
      and/or any tier or level of service upon which any of Network’s Services
      are
      carried.
 16.
                      For a period of ***** from the
      last date that Network ceases to distribute either the ***** (or earlier,
      if agreed to by Affiliate’s*****, Network shall, at its
      expense, at any particular time pitch twice to the ***** the VOD Packages
      available to the ***** as of the Amendment
      Date.
  7
 Except as expressly set forth herein,
all other terms and conditions of the Affiliation Agreement remain in full force
and effect.
 
 Your signature below indicates your
understanding and agreement with the above terms and
conditions.
 
 Sincerely,
 
 PLAYBOY ENTERTAINMENT GROUP,
INC.
 
 By:
              /s/ Bob
    MeyersName:
              Bob MeyersTitle:
              Executive Vice President and
      PresidentSPICE ENTERTAINMENT,
      INC.By:
              /s/ Bob
    MeyersName:
              Bob MeyersTitle:
              Executive Vice President and
      PresidentSPICE HOT ENTERTAINMENT,
      INC.By:
              /s/ Bob
    MeyersName:
              Bob MeyersTitle:
              Executive Vice President and
      President
 
 AGREED AND
      ACCEPTED:TIME WARNER CABLE
      LLCBY:
              /s/ Melinda C.
      WitmerNAME:
              Melinda C.
      WitmerTITLE:
              Executive Vice
      Presidentand Chief Programming
      Officer
  8
  EXHIBIT AMarket/VOD Catcher
      Location
                Division
                Spice XX
                Spice
      XAlbany
                Albany
                XAppleton/Greenbay
                Appleton/Greenbay
                XAustin
                Austin
                XIndianapolis
                BHN
                XBirmingham
                BHN
                XDetroit
                BHN
                XCentral
    Florida
                BHN
                XCentral
    Florida
                BHN
                XTampa
                BHN
                XBakersfield
                BHN
                XTampa
                BHN
                XBinghamton
                Binghamton
                XBuffalo
                Buffalo
                XGastonia
                Charlotte
                XCharlotte
                Charlotte
                XCincinnati
                Cincinnati
                
                XDayton
                Cincinnati
                XWilmington
                Eastern
      CarolinaGreensboro
                Greensboro
                XHawaii
                Hawaii
                XKansas City
                Kansas City
                XLA
                LA
                XLA
                LA
                XLA
                LA
                XLA
                LA
                XPortland
                Maine
                XAugusta
                Maine
                XColumbus
                Mid-Ohio
                XChillicothe
                Mid-Ohio
                XNewark
                Mid-Ohio
                XMilwaukee
                Milwaukee
                XDothan
                National
                XDenver
                National
                XTerre Haute
                National
                XClarksburg
                National
                XRichmond
                National
                XFt.Benning
                National
                XTerre Haute
                National
                XClarksburg
                National
                XLincoln
                Nebraska
                XDallas
                North Texas
                XCanton
                Northeast
    Ohio
                XElyria
                Northeast
    Ohio
                XCleveland
                Northeast
    Ohio
                XLiberty/Hudson
      Valley
                NYC
                XStaten
    Island
                NYC
                XBrooklyn/Queens
                NYC
                XManhattan
                NYC
                XRaleigh
                Raleigh
                XRochester
                Rochester
                XSan Antonio
                San Antonio
                XSan Diego
                San Diego
                XSouth
    Carolina
                South
    Carolina
                XEl Paso
                Southwest
                XNederland
                Southwest
                XWichita
    Falls
                Southwest
                XLeFeria
                Southwest
                X
  9
  Laredo
                Southwest
                XCorpus
    Christi
                Southwest
                XSyracuse
                Syracuse
                XWaco
                Waco
                X
 
 
 10