Exhibit 10.1.1

Portions  of  this  exhibit  have  been  omitted   pursuant  to  a  request  for
confidential  treatment filed with the Securities and Exchange  Commission.  The
omissions have been indicated by asterisks  ("*****"),  and the omitted text has
been filed separately with the Securities and Exchange Commission.

                              AFFILIATION AGREEMENT

      THIS AGREEMENT made as of the 1st day of November,  1992 is by and between
SPICE, INC., a New York corporation ("Network"), and Satellite Services, Inc., a
Delaware corporation ("Affiliate").

      1. RIGHTS:

            (a)  Grant of  Rights.  Network  hereby  grants  to  Affiliate,  and
Affiliate  hereby accepts,  the following  rights  relating to the  pay-per-view
television  programming  service known as "Spice," whether in its current analog
format or in any other digitized,  compressed,  modified,  replaced or otherwise
manipulated format (the "Service"):

                  (i)  the  non-exclusive  right,  but not  the  obligation,  to
exhibit,  distribute,  subdistribute  and authorize the reception of the Service
(for the purposes  described  in Section 4 (e)  hereof),  by cable or other wire
transmission service, whether now existing or developed in the future, ("Cable")
in the  Distribution  Areas (as  defined  herein) of the  System or Systems  (as
defined herein),  if any, set forth by Affiliate on Schedule 1, as such Schedule
1 may be added to or deleted from,  from time to time,  pursuant to the terms of
this Agreement;

                  (ii)  the  non-exclusive  right,  but not the  obligation,  to
exhibit,  distribute,  subdistribute  and authorize the reception of the Service
(for the purposes  described in Section 4(e) hereof) by satellite master antenna
television systems ("SMATV"),  by multipoint  distribution  services ("MDS"), by
multichannel multipoint distribution services ("MMDS"), by Satellite (as defined
below), and by any other means of distribution whether now existing or developed
in the future (all such technologies  including SMATV, MDS, MMDS,  Satellite and
any other means of distribution  whether now existing or developed in the future
(other  than  cable)  shall  be  referred  to  hereinafter,   collectively,   as
"Alternative  Technologies")  in (A) Operating  Areas (as defined  herein),  (B)
other areas of counties in which Operating Areas are wholly or partially located
but which areas are not the subject of a cable  television  franchise or license
or, if a cable  television  franchise  or license  exists,  the operator of such
franchise or license is not distributing the Service,  and (C) areas of counties
(which are  contiguous  to such  counties  where an Operating  Area is wholly or
partially located) which are not the subject of a cable television  franchise or
license or, if a cable television  franchise or license exists,  the operator of
such franchise or license is not  distributing  the Service (the areas described
in subsections  (A), (B), and (C) of this Section  1(a)(ii) shall be referred to
hereinafter, collectively, as a System's "Distribution Area"); and

<PAGE>

                  (iii) the  non-exclusive  right,  but not the  obligation,  to
exhibit,  distribute,  subdistribute  and authorize the reception of the Service
(for the purposes  described in Section 4(e) hereof)  nationwide  (including the
fifty United States,  the District of Columbia and the territories,  possessions
and  commonwealths  of the United  States)  to any person or entity  ("Satellite
Subscribers") by means of equipment  capable of receiving  audio/visual  signals
and/or  programming  directly from a satellite,  including,  but not limited to,
C-Band and Ku-Band  signals,  as digitized,  compressed,  modified,  replaced or
-otherwise  manipulated,  whether  now  existing  or  developed  in the  future,
including  tier-bit  access  rights  ("Satellite").  Without  the prior  written
authorization  of  Network,  the  Service  may  not be  exhibited  or  otherwise
distributed  to  Satellite  Subscribers  in:  Tennessee,  Mississippi,  Alabama,
Oklahoma, North Carolina or Utah.

            The rights set forth in this Section 1(a), and elsewhere  under this
Agreement,  are also granted  hereby to any affiliate of  Affiliate.  As used in
this  Agreement,  an affiliate of Affiliate shall include any entity meeting the
requirements  of  paragraphs  I.1, II or III of Exhibit A hereto,  regardless of
whether such entity is a cable television system.

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

                  (b) Affiliate shall have the right to elect to include,  under
this Agreement,  and to demand  authorization  from Network,  if necessary,  any
cable  television  system  consisting  of Cable  which,  (i)  meets  the  System
Qualifications  of Exhibit A hereto,  and (ii)  either  carries  the  Service or
commits to carry the Service,  by giving  Network  written  notice within thirty
(30) days of the  commencement  of such carriage  (individually,  a "System" or,
collectively,  "Systems"). Upon receipt of such notice or upon the launch of the
Service by a System, Schedule 1 hereof shall be deemed to include such System(s)
as of the later of: (i) the launch  date of the  Service on such  System(s),  or
(ii) the date of acquisition of such System(s) by Affiliate.  Any  then-existing
agreement with Network applicable to any such System for carriage of the Service
shall  terminate and shall cease to be effective  with respect to such System as
of the  effective  date of the  addition  or deemed  addition  of such System to
Schedule 1. Affiliate shall have the right, in Affiliate's sole  discretion,  to
discontinue  carriage of the service on any or all Systems, and to delete any or
all Systems from  Schedule 1, by providing  Network with written  notice  within
thirty (30) days of such deletion or discontinuance;  provided, however, if such
deletion or  discontinuance  is due to political,  legal or community issues, no
such notice by Affiliate will be required to delete or discontinue the Service.

                  (c)  Notwithstanding  any  provision of this  Agreement to the
contrary,  Affiliate shall not  intentionally  authorize any use of the Service:
(i) in a room



                                       2
<PAGE>

open to the public in a commercial establishment (including, without limitation,
public areas of any  restaurant,  tavern,  bar,  club,  fraternal  organization,
hospital or correctional facility), or (ii) in any communal room in an otherwise
residential building (including without limitation,  any lobby or social room in
an apartment  house,  dormitory,  drilling rig or similar  place).  Furthermore,
Affiliate  shall take all reasonable  precautions to prevent such  impermissible
uses from occurring through the facilities of a System.

      2. TERM:

            (a)  Unless   terminated  sooner  pursuant  to  the  terms  of  this
Agreement,  the Term of this Agreement shall consist of the Initial Term and any
number of Renewal Terms.  The Initial Term of this Agreement shall commence upon
the date of complete execution of this Agreement and shall terminate on November
30, 2002 unless terminated sooner pursuant to the terms of this Agreement.

            (b) This Agreement shall automatically renew for successive five (5)
year periods (each a "Renewal  Term") after the Initial  Term,  and each Renewal
Term, unless either, (i) this Agreement is terminated earlier in accordance with
the terms hereof, or (ii) Affiliate provides a minimum of sixty (60) days' prior
written  notice  to  Network  of its  intent to  terminate  this  Agreement,  in
Affiliate's sole discretion, prior to the end of the Initial Term or any Renewal
Term. As used herein, the word "Term" shall mean, collectively, the Initial Term
and any number of Renewal Terms.

      3. CONTENT OF THE SERVICE:

            (a) Throughout the Term,  the Service shall be  commercial-free  and
shall  consist  of  twenty-four  (24) hours per day of high  quality,  non-rated
cable-version adult programming  intended for an adult audience,  similar to the
program schedule attached hereto as Exhibit B, but also including special Events
as  described in Section 5 below.  Notwithstanding  the  foregoing,  the Service
shall not contain any programming  depicting  rape,  necrophilia,  sadism,  sado
masochism,  bestiality,  bondage,  incest or programming involving or suggesting
sexual activity with, between or among, minors. Network agrees that, during each
calendar  month of the  Term,  Network  will  send  one (1) copy of its  monthly
program schedule to Affiliate, in care of: Vice President, Programming.

            (b)  During  the Term,  Network  shall  provide  the  Service in its
entirety  to  Affiliate.  When  the  phrase  "in its  entirety"  is used in this
section,  it means that each subscriber of Affiliate receiving the Service shall
receive, at all points in time, the same programming received at each such point
in time by any other  subscriber  to the Service,  and if any  subscriber to the
Service is receiving,  at such point in time, programming that is different than
the programming received by any subscriber of Affiliate receiving the Service at
that point in time,  Affiliate shall have the unconditional right to elect which
programming  it  desires  to  receive  and  utilize  at  any  System  and  which
programming it will authorize for reception.


                                       3
<PAGE>

      4. DELIVERY AND DISTRIBUTION OF THE SERVICE:

            (a) During the Term,  Network shall,  at its own expense,  deliver a
signal of the Service to the earth  station of each  System,  to each  Satellite
Subscriber and to any other location in the continental United States designated
by Affiliate by transmitting such signal via a domestic  satellite commonly used
for transmission of domestic cable television  programming and shall, at its own
expense,  fully encode the satellite signal of the Service utilizing  scrambling
technology  commonly used in the domestic cable television  industry.  Except as
otherwise  provided in this Section 4(a),  Affiliate  shall, at its own expense,
furnish an earth station and all other  facilities  necessary for the receipt of
such satellite transmission and the delivery of such signal to the Service Cable
Subscribers  and PPV Cable  Subscribers  (each as defined  below).  In the event
Network either (i) changes the satellite to which the Service is transmitted, to
a satellite not  susceptible to viewing by a System's or Systems'  then-existing
earth  station  equipment,  or (ii)  changes the  technology  used by Network to
encrypt the Service,  to a technology not compatible with a System's or Systems'
then existing  descrambling  equipment,  then Affiliate  shall have the right to
delete  from  Schedule  1 of this  Agreement,  immediately,  any such  System or
Systems,  and to  discontinue  carriage  of the  Service  on any such  System or
Systems,  provided that this termination  right shall not apply to any System or
Systems if, (1) Network  agrees,  unconditionally,  to reimburse  such System or
Systems,  as the case may be, (A) for the cost of acquiring and  installing  new
equipment necessary to descramble the signal of the Service,  and/or (B) for the
cost of acquiring and installing  equipment reasonably necessary for such System
or Systems to receive the Service from such new  satellite;  (2) physical  space
exists at the  then-existing  headend or earth station site to  accommodate  the
necessary  equipment;  and (3) current zoning and other restrictions permit such
additional equipment.

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

            (c) The  Systems,  if any,  may  distribute  the  Service as a fully
pre-emptible service. Network agrees that Affiliate will have complete authority
to control  and to  designate  the  channel(s)  over which the  Service is to be
carried on each System.


                                       4
<PAGE>

            (d) Each System  retains and  reserves  any and all rights in and to
all signal  distribution  capacity contained within the bandwidth of the Service
as received at each System, including, without limitation, the vertical blanking
interval and audio subcarriers (and any other portions of the bandwidth that may
be  created  as a result of the  conversion  of the  signal of the  Service to a
digital  format).  Network shall not use any portion of the bandwidth other than
as provided  herein  without the prior  written  consent of  Affiliate.  Nothing
herein shall preclude  Affiliate from  exercising and exploiting  such rights by
any  means  and in any  locations  freely  and  without  restriction;  provided,
however,  that any such use by  Affiliate or the Systems  shall not degrade,  or
otherwise  interfere  with,  the  picture  quality  of the  Service or the audio
portion of the Service signal which is the principal audio carriage frequency of
the Service.

            (e) Each System or other  distribution  facility or  enterprise  may
offer the Service, (i) as a Subscription (as defined below) service, and/or (ii)
as a PPV (as defined below) service.

            (f) In  each  of the  Systems,  Affiliate  shall  employ  reasonable
security measures to prevent pirating,  theft or unauthorized  exhibition of the
Service, or any portion thereof, or of any advertising or promotional materials.
Except as provided in Section 4(g) below,  neither Affiliate,  nor any affiliate
of Affiliate,  shall authorize  others to copy, tape or otherwise  reproduce any
part of the Service without Network's prior written authorization and shall take
reasonable  and  practical  security  measures  to prevent the  unauthorized  or
otherwise  unlawful  copying,  taping or other  reproduction of the Service,  by
others, through the facilities of any System. Affiliate shall not be responsible
for home taping by anyone viewing the Service.  Network  acknowledges  that this
Section  4(f) does not  restrict  Affiliate's  practice  of (i)  connecting  its
subscribers'  videotape recorders,  VCRs or other devices susceptible to use for
home  duplication of video  programming  to the facilities of a System;  or (ii)
promoting home taping of the Service by subscribers.

            (g)  Affiliate  and any System  shall  have the right,  at their own
expense,  to make taped copies of any transmissions of the Service  programming,
which  taped  programming  may be  used by  such  System  for one or more of the
purposes described in Section 4(e) above, for exhibition and sale at times other
than at the times of original satellite transmission by Network.

            (h) Network hereby grants  Affiliate the right to receive the signal
of the Service, to digitize,  compress,  modify, replace or otherwise manipulate
the signal, and to transmit the signal as so altered (the "Altered Signal") to a
satellite or to a central  location for  redistribution  to terrestrial or other
reception sites capable of receiving and utilizing the Altered  Signal.  Network
hereby grants Affiliate the right to deliver the Altered Signal for the uses set
forth in  Section  1(a) of this  Agreement,  provided  that no such  alteration,
transmission,  redistribution,  reception  or other use will cause a change in a
viewer's  perception of the principal video or principal  audio  presentation of
the Service. Furthermore,  Network shall not change the signal of the Service in
such a way as to technically or technologically  defeat, or otherwise  interfere
with, Affiliate's rights under this Section 4(h).


                                       5
<PAGE>

      5. FEES:

            (a) In  consideration  of the terms and conditions set forth herein,
Affiliate  shall pay the Fees set forth below.  Each of the four  categories  of
Fees defined below (PPV Satellite Fees,  Service  Satellite Fees, PPV Cable Fees
and Service Cable Fees) shall be calculated,  stated and reported separately. As
used herein, the following terms will have the following meanings:

                  (i) "PPV  Satellite  Subscriber"  means  someone who is both a
Satellite  Subscriber  and who utilizes the Service as a PPV service by making a
purchase  through  Affiliate or an affiliate of Affiliate.  "PPV Satellite Fees"
are those Fees payable by Affiliate to Network in  connection  with sales of the
Service to PPV Satellite Subscribers.

                  (ii) "Service Satellite  Subscriber" means someone who is both
a Satellite  Subscriber and a Service Subscriber (as defined below) who utilizes
the Service as a Subscription  service.  "Service Satellite Fees" are those Fees
payable  by  Affiliate  to Network in  connection  with sales of the  Service to
Service Satellite Subscribers.

                  (iii) "PPV Cable Subscriber" means someone who is provided the
Service by Affiliate or an  affiliate of Affiliate  hereunder,  who utilizes the
Service as a PPV  service  and who  receives  the  Service  by means  other than
Satellite.  "PPV Cable Fees" are those Fees  payable by  Affiliate to Network in
connection with sales of the Service to PPV Cable Subscribers.

                  (iv)  "Service  Cable   Subscriber"  means  someone  who  both
receives the Service by means other than  Satellite and is a Service  Subscriber
and who utilizes the Service as a Subscription service. "Service Cable Fees" are
those Fees  payable by  Affiliate  to  Network in  connection  with sales of the
Service to Service Cable Subscribers.

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

                  (vi)  "Pay-per-view" or "PPV" means the authorization of a PPV
Satellite Subscriber or PPV Cable Subscriber to receive at least a single motion
picture,  event or other program  included in the Service for a fee separate and
distinct from fees paid by such PPV Satellite Subscriber or PPV Cable Subscriber
for other television or audio services.  Viewing  segments may include,  but are
not  limited  to,  pay-per-view,  pay-per-night,  pay-per-weekend,  or any other
continuous segment of seventy-two (72) or fewer consecutive hours of the Service
received on a pay-per-view basis.

                  (vii)  "Subscription"  means  the  authorization  of a Service
Cable  Subscriber  or Service  Satellite  Subscriber to receive the Service as a
monthly


                                       6
<PAGE>

subscription  service  either on an a la carte  basis or as part of a package of
other services, or both.

                  (viii)  "Service  Subscriber"  means  each  customer  to  whom
Affiliate or an affiliate of Affiliate  knowingly provides the Service directly,
through an affiliate, or, as permitted by this Agreement, through a third party,
as a Subscription service.

                  (ix) "Special Event" means an occasional,  high-profile  adult
comedy or sports event or program  (other than a motion picture or other typical
adult  dramatic  or  comedy  program)  produced   originally  for  the  Service,
premiering on the Service,  and first  appearing on the Service no more than one
(1) year from its completion date. Network may not include more than one Special
Event on the Service in any six (6) month period (except that,  with the consent
of Affiliate (such consent to be in Affiliate's sole and exclusive  discretion),
Network may include a Special Event on the Service more  frequently than once in
a six (6) month period), and no adult comedy,  sports event or program event may
be treated  as a Special  Event for more than  twelve  (12)  exhibitions  on the
Service.  Further, no adult comedy,  sports event or program may be treated as a
Special Event unless Network provides  Affiliate with at least seventy-five (75)
days prior written notice of the premiere on the Service of such Special Event.

                  (x)  "Addressable  Subscriber"  means a PPV  Cable  Subscriber
whose television set is connected on the PPV Cable Subscriber's  premises, or by
interdiction,  to  equipment,  issued by  Affiliate,  that allows the channel on
which the  Service is  received  to be turned on or off (i.e.,  "authorized"  or
"deauthorized")  from a central  location,  controlled  by the  operator  of the
System.

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

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

            (b) Subscription

                  (i) For each calendar  month during the Term,  Affiliate  will
pay Network as a Service Cable Fee for each Service  Cable  Subscriber an amount
equal  to the  greater  of  (A)  *****  or  (B)  *****  of  the  Gross  Receipts
attributable  to such Service  Cable  Subscriber.  When the Service is sold to a
Service Cable Subscriber in combination with other services for a package charge
(as,  for example,  in a tier or in a package of a la carte or other  services),
the Gross Receipts  attributable  to a Service Cable  Subscriber for the Service
shall be equal to the total  charge for the tier or package of services  sold in
combination with the Service, multiplied by a fraction, the numerator of


                                       7
<PAGE>

which is $1.59 and the  denominator of which is the numerator plus the aggregate
of the net effective  rates per  subscriber  charged to Affiliate by each of the
other service  providers of the services included in the tier or package of a la
carte  or  other  services;  provided,  however,  that the  amounts  charged  to
Affiliate for each of the services in the package or tier shall not be disclosed
by Affiliate to Network but, at Network's request, in order to assure Network of
compliance  with this  provision,  Affiliate  shall  make such  charges  and any
pertinent calculations available to a representative of KPMG Peat Marwick (which
representative is neither Network's nor Affiliate's) on a confidential basis, at
Network's cost.  This provision shall survive  termination or expiration of this
Agreement.  Affiliate shall pay a Service  Satellite Fee to Network of $7.00 per
month for each Service Satellite  Subscriber  regardless of whether such Service
Satellite Subscriber purchases the Service alone, as an a la carte service or as
part of a tier or package of a la carte or other  services and regardless of the
Gross Receipts attributable thereto.

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

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

            (c) PPV

                  (i) For each  customer of Affiliate  who receives and pays for
one (1) complete and technically  satisfactory viewing of one viewing segment of
the  Service as a PPV  service  as a PPV Cable  Subscriber,  Affiliate  will pay
Network a PPV Cable Fee in an amount  equal to the greater of, (A) (i) ***** for
orders taken from the date of full execution  hereof through  November 30, 1995,
(ii) ***** for orders  taken from  December 1, 1995  through  November  30, 1998
(iii) ***** for orders taken from December 1, 1998 through November 30, 2001 and
(iv) ***** for orders from December 1, 2001 through the end of the Initial Term,
or (B)  the  Network  Share  of the  Gross


                                       8
<PAGE>

Receipts  paid  by  such  PPV  Cable  Subscriber.  With  respect  to  PPV  Cable
Subscribers,  "Network Share" shall equal the following  percentage of the Gross
Receipts paid by each PPV Cable Subscriber: ***** percent ***** from the date of
execution of this Agreement by both parties hereof through November 30, 1995 and
*****  percent  ***** from December 1, 1995 through the end of the Initial Term.
For each  customer of  Affiliate  who receives and pays for one (1) complete and
technically  satisfactory viewing of one viewing segment of the Service as a PPV
service  as a  PPV  Satellite  Subscriber,  Affiliate  will  pay  Network  a PPV
Satellite  Fee in an amount  equal to the  greater  of (C) (i) ***** for  orders
taken from the date of full  execution  hereof through  November 30, 1995,  (ii)
***** for orders taken from  December 1, 1995 through  November 30, 1998,  (iii)
***** for orders taken from December 1, 1998 through November 30, 2001, and (iv)
***** for orders  taken from  December  1, 2001  through  the end of the Initial
Term, or (D) the Network Share of the Gross  Receipts paid by such PPV Satellite
Subscriber. With respect to PPV Satellite Subscribers,  the Network Share of the
Gross Receipts shall be *****.  Notwithstanding  the foregoing,  each System and
each Satellite  distributor  shall have the right to discount the price of a PPV
viewing of the service during the first thirty (30) days after the launch of the
Service  in such  System or by such  Satellite  distributor,  respectively,  and
during no more than two (2) ten (10) day periods each calendar  year. For orders
taken  during  such first  thirty  (30) days and  during  each such ten (10) day
period, Affiliate shall be required to pay to Network minimum PPV Satellite Fees
or PPV  Cable  Fees  (as the  case  may  be) of  *****  per  each  complete  and
technically  satisfactory  viewing of a viewing  segment of the Service as a PPV
service,  rather than the minimum PPV Satellite Fees or PPV Cable Fees specified
in either (A) or (C) of this Section 5(c)(i). Furthermore, there shall be no PPV
Satellite  Fee or PPV Cable Fee (as the case may be)  payable  by  Affiliate  to
Network  for any PPV viewing of the  Service by a  subscriber  who pays for such
viewing by  remitting  a coupon  provided by  Affiliate  or by an  affiliate  of
Affiliate to  subscribers  that have not ordered a PPV movie or event in the six
(6) months immediately preceding the issuance of such coupon.

                  (ii)  In lieu of the PPV  Satellite  Fees or PPV  Cable  Fees
payable as calculated  pursuant to Section 5(c)(i) above, for each PPV Satellite
Subscriber  or PPV Cable  Subscriber  (as the case may be) who receives and pays
for one (1) complete and  technically  satisfactory  viewing of a Special  Event
included in the Service,  Affiliate  will pay Network a PPV Satellite Fee or PPV
Cable Fee (as the case may be)  equal to the  greater  of (A) a  minimum  dollar
amount to be set by Network or (B) ***** of the Gross  Receipts paid by such PPV
Satellite   Subscriber   or  PPV  Cable   Subscriber   (as  the  case  may  be).
Notwithstanding the above,  however, any and all PPV Satellite Fees or PPV Cable
Fees paid by Affiliate to Network for any Special  Event shall be subject in all
respects to Section 13(g) of this Agreement (including the minimum dollar amount
payable by Affiliate hereunder).

                  (iii) The PPV Cable  Fees  and/or PPV  Satellite  Fees (as the
case may be) payable by Affiliate to Network  hereunder  for  exhibition  to PPV
Cable  Subscribers  and PPV Satellite  Subscribers (as the case may be) during a
Reporting  Period (as  defined  below)  during the Term shall be due and payable
forty-five (45) days after the end of the calendar month which includes the last
day of the Reporting  Period.  (The term "Reporting  Period" shall mean the days
from the end of each System's or Satellite


                                       9
<PAGE>

distributor's  last monthly reporting period (which date may vary in each System
or for each  Satellite  distributor  from the 20th of the calendar  month to the
last  day of the  calendar  month)  to the  end  of the  System's  or  Satellite
distributor's  then current monthly reporting  period.) Affiliate shall have the
right,  however,  to make credit adjustments to any month's payment in an amount
equal to the portion of a previous  month's PPV Cable Fees and/or PPV  Satellite
Fees which represents an overpayment.

            (d) Addressable Subscribers Volume Discount

                  (i) On the first day of each calendar quarter of the Term, for
orders taken during such  calendar  quarter of the Term,  the Network Share with
respect to PPV Cable  Subscribers  as determined  above may be reduced below the
Network  Share  otherwise  stated  above  based upon the  number of  Addressable
Subscribers in all of the Systems on the first day of such calendar quarter,  as
follows:

<TABLE>
<CAPTION>
If the Number of Addressable Subscribers in      Then, the Network Share for each Month of
all Systems on the First Day of a Calendar       such Calendar Quarter Hereunder Shall be
Quarter is:                                      Reduced By the Following Percentage of the
                                                 Gross Receipts:
<S>                                                                    <C>
        2,000,000 - 2,999,999                                          *****
        3,000,000 - 3,999,999                                          *****
        4,000,000 - 4,999,999                                          *****
        5,000,000 - 5,999,999                                          *****
        6,000,000 - 6,999,999                                          *****
</TABLE>

            (e) Each System shall have the right to expend funds for a market or
community  research  survey  regarding  adult,  and other  types of,  television
programming.  Any System which  launches the Service  after  undertaking  such a
survey  shall be fully  reimbursed  for the costs of such  survey from the Gross
Receipts received by the System from Subscription and Pay-Per-View  sales of the
Service, or portions thereof, before any such system incurs an obligation to pay
Fees hereunder.  Affiliate shall submit to Network complete documentation of the
costs incurred by each such System for such survey. Network shall have the right
(in accordance  with Section 6(b)) to inspect and audit the books and records of
any System which has claimed  reimbursement of such survey costs, but only those
books and records relating to such survey.

            (f) Any amounts payable by Network to Affiliate  pursuant to Section
7 hereof  shall be due and  payable  forty-five  (45) days  after the end of the
pertinent calendar month during the Term.

            (g)  Notwithstanding  any other  provision of this  Agreement to the
contrary,  no Fees shall be payable  for PPV  Satellite  Subscribers,  PPV Cable
Subscribers,  Service Satellite Subscribers or Service Cable Subscribers if they
are (i) employees of Affiliate or any  affiliated  party who are not charged for
the  Service;  or (ii)  public  officials,  administrative  personnel  or public
buildings that are not charged for the Service;  or (iii)  subscribers  who have
not paid their cable television bill for a given


                                       10
<PAGE>

month and are subsequently disconnected; or (iv) subscribers who, in the good
faith exercise of reasonable judgment by an employee either of Affiliate or of
an affiliate of Affiliate, are excused from paying for the Service either
because such subscriber claims that the Service was not properly ordered or
because such subscriber claims that a complete and technically satisfactory
viewing of the Service was not received.

            (h) Network  shall have the right to  renegotiate  the PPV Satellite
Fees, PPV Cable Fees,  Service  Satellite Fees and Service Cable Fees applicable
to any Renewal Term upon written notice to Affiliate at least twelve (12) months
prior to the end of the Initial Term or Renewal Term immediately  preceding such
Renewal Term. Any such revised Fees ("Renewal Fees") shall be effective upon the
commencement  of such Renewal Term. Said Renewal Fees shall be effective for the
five (5) year Renewal Term.

            (i) The PPV Satellite Fees, PPV Cable Fees,  Service  Satellite Fees
and Service  Cable Fees and any Renewal  Fees  payable by  Affiliate  to Network
hereunder,  and any  amounts  payable  by  Network  to  Affiliate  or any System
pursuant  to  Sections  5 or 7 hereof,  that are  unpaid  after they are due and
payable shall accrue interest at one and one-half  percent (1-1/2%) per month or
the highest lawful rate,  whichever is less,  from the due date until payment is
received  by  Network,  a System  or  Affiliate,  (as the  case  may  be).  Each
delinquent  party shall be liable to the owed party for all reasonable costs and
expenses (including, without limitation, reasonable counsel fees, disbursements,
and  administrative  or court costs) in  connection  with the  collection of any
overdue amounts.

      6. REPORTS:

            (a)  Affiliate  shall  send to  Network,  along  with  the  payments
described  in Section 5 hereof,  statements  on a form  mutually  acceptable  to
Affiliate and Network.  Each statement shall set forth information  necessary to
the  calculation of the PPV Satellite  Fees, PPV Cable Fees,  Service  Satellite
Fees and Service Cable Fees paid.  Each of the four  categories of Fees shall be
calculated, stated and reported separately.

                  (i) The statement  accompanying each month's Service Satellite
Fees  and  Service  Cable  Fees  shall  include  the  number  of  Service  Cable
Subscribers and Service  Satellite  Subscribers as of the first day of the month
and the number as of the last day of the month and the average thereof, and such
other  information  as may be  necessary  for  the  calculation  of the  Service
Satellite Fees and Service Cable Fees paid.

                  (ii) The  statement  accompanying  each month's PPV  Satellite
Fees and PPV Cable Fees shall  include the number of PPV  Satellite  Subscribers
and PPV  Cable  Subscribers;  the  Gross  Receipts  paid by such  PPV  Satellite
Subscribers  and PPV Cable  Subscribers;  the  aggregate  number of  Addressable
Subscribers  as of the first day of that  calendar  quarter in all Systems;  and
such  other  information  as may be  necessary  for the  calculation  of the PPV
Satellite Fees and PPV Cable Fees paid.


                                       11
<PAGE>

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

            (c) Affiliate  and Network each agree to keep and maintain  accurate
books  and  records  of all  matters  directly  relating  to this  Agreement  in
accordance with generally accepted  accounting  principles.  During the Term and
for one (1) year after the termination of this Agreement, such books and records
of each party shall be  available to the other party for  inspection  and audit,
during normal business hours, at the inspecting  party's  expense,  at the other
party's offices upon reasonable notice to the other party. Each party's right to
perform  such audit  shall be limited  to once in any twelve  (12) month  period
during the Term and shall be  limited to an audit with  respect to amounts to be
paid in the  then-current  and prior  calendar year only. If either party audits
the other  party's books  hereunder,  the  inspecting  party must make any claim
against  the other  party  within the  earlier  of,  three (3) months  after the
inspecting  party or the  inspecting  party's  representative  leaves  the other
party's  offices,  or  twenty-four  (24) months  after the close of the earliest
month  which is the  subject of such  claim.  If a claim is not made within such
time, then the Fees and reports shall be deemed final and uncontestable, and the
inspecting  party  will be  deemed  to have  waived  its  right to  collect  any
shortfalls  from the other party for the  period(s)  audited.  Each System which
takes a credit  against Gross Receipts for repayment of survey costs pursuant to
Section 5(c) hereof must comply fully with Section 5(c) and this Section 6(c).

      7. PROMOTION:

            (a) Network  agrees to spend  marketing  monies within the Operating
Areas of the Systems in an amount  relative  to all  marketing  monies  spent by
Network that is equal to or greater than the ratio of the number of  Affiliate's
cable  television  subscribers  in the Systems to the total  number of Network's
cable   television   subscribers,   including   Affiliate's   cable   television
subscribers. Specifically, but not in limitation of the foregoing, Network shall
do the following:

                  (i) No later  than  fifty  (50) days prior to the first day of
each  calendar  month,  Network  shall make  available to Affiliate  its monthly
program schedule for such month and such trailers and other publicity  materials
as Network may have available to be used for  advertising and publicity for such
month.  Affiliate  may, at its sole expense,  make copies of such  materials and
make such copies available solely for use by the Systems.

                  (ii)  Commencing  upon  launch of the  Service  on any  System
and/or the commencement of the sale of the Service to PPV Subscribers or Service
Subscribers  (as the  case may be),  and  throughout  the  Term,  Network  shall
contribute  ***** per copy for any catalogue or guide utilized by the Systems or
by any  Satellite  distributor  which  includes  listings for the Service and at
least one (1), 1/4 page promotion


                                       12
<PAGE>

for the Service,  whether or not a subscriber  receives such  catalogue or guide
without  charge.  Each  System  or  distributor  of  the  Service  to  Satellite
Subscribers  shall be entitled to claim the  contribution  provided  for in this
Section 7(a)(ii) by providing Network with appropriate  documentation  verifying
the content and quantity of guides or catalogues for which such  contribution is
sought,   no  more  often  than  once  per  month.   Network  shall  remit  such
contributions  to the appropriate  Systems or Satellite  distributor  later than
forty-five (45) days after receipt of such appropriate documentation.

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

            (c) Affiliate acknowledges that the names and marks "SPICE" (and the
names of  certain  programs  which  appear  in the  Service)  are the  exclusive
property of Network and its  suppliers  and that  Affiliate has not and will not
acquire any  proprietary  rights  therein by reason of this  Agreement.  Network
shall have the right to approve any of  Affiliate's  mentioning or using of such
names or marks and  publicity  about  Network  or the  products  or  programming
included  in the  Service.  Uses of such names and marks in routine  promotional
materials  or  presentations  such as program  guides,  program  listings,  bill
stuffers and video  promotions,  including,  but not limited to, barker channels
and   cross-channel   promotions,   shall  be  deemed  approved  unless  Network
specifically  notifies Affiliate to the contrary prior to such use by Affiliate.
Affiliate shall,  however,  comply with all of Network's clear,  unambiguous and
reasonable  advance  written  instructions  regarding  the  content  or  use  of
advertising or promotional  materials  provided to Affiliate by Network prior to
Affiliate's use of such materials;  provided,  however, that, Affiliate reserves
the  right in its sole and  absolute  discretion  to use or  decline  to use any
advertising or promotional material provided by Network.

            (d) Network  agrees that in the event Network does any direct on-air
marketing and sale of products or services, including, but not limited to, sales
through "800", "900" or "976" telephone services, Network will:

                  (i) provide  Affiliate  with lists of the names of respondents
from within the zip code areas of the Systems who respond to such direct  on-air
marketing and sales, for use by Affiliate or the Systems, and


                                       13
<PAGE>

                  (ii) Network shall *****.

            (e)  Network  and  Affiliate  hereby   acknowledge  that  (i)  their
interests  are  often in  direct  conflict,  (ii)  their  relationship  is often
adversarial,  and (iii) Network could cause  Affiliate  significant  harm by the
nature  of  Network's  communications  to  Affiliate's  subscribers  or  to  the
governmental  entities or to franchise or licensing  authorities  whose opinions
and actions could  adversely  affect cable  television  systems  affiliated with
Affiliate.  Therefore,  Network  shall  not  initiate  communications  with  any
subscribers or franchise or licensing  authorities or  governmental  entities in
the  Operating  Area of any cable  television  system  which  meets  the  System
Qualifications  of Exhibit A without  Affiliate's  prior written  approval,  and
under no  circumstances  shall  Network  engage in any  communications  with any
subscribers or franchise or licensing  authority or  governmental  entity in the
Operating Area of any of such systems which would, or could, adversely interfere
with the  relationship  between  Affiliate or any  affiliate of  Affiliate,  and
subscribers, or the relationship between Affiliate or any affiliate of Affiliate
and any  governmental  entity or  community  in any such  Operating  Area.  This
provision  shall  not  apply,  (x)  to  any  national  advertising,  (y)  to any
proceeding before any judicial body, or (z) to any communications  with Congress
or with any other branch or agency of the federal government.  This Section 7(e)
shall survive the expiration or termination of this Agreement (regardless of the
reason for such expiration or termination) for a period of two (2) years.

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

            (g)  Network  shall not  provide  to any third  party any  telephone
number  of,  or  any  information  about  (whether  personally  identifiable  or
otherwise), any subscriber to any cable television system which meets the System
Qualifications of Exhibit A.

      8. WARRANTIES AND INDEMNITIES:

            (a) Network represents and warrants to Affiliate that (i) Network is
a corporation duly organized and validly existing under the laws of the State of
New York;  (ii) Network has the power and authority to enter into this Agreement
and to fully  perform  its  obligations  hereunder;  (iii)  Network  is under no
contractual or other legal  obligation which shall in any way interfere with its
full, prompt and complete performance  hereunder;  (iv) the individual executing
this  Agreement on behalf of Network has the  authority to do so; (v) Network is
in compliance with all laws, rules,  regulations,  and court and  administrative
decrees to which it is subject  including,  without  limitation,  all applicable
rules and regulations of the Federal Communications Commission (the "FCC"); (vi)
Network  has,  or will have  acquired at the  pertinent  time all or part of the
Service is made  available to  Affiliate,  good title to,  and/or each and every
property  right  (whether  relative  to  tangible or  intangible  property),  or
license,  usage or other right necessary or appropriate whatsoever to effectuate
the acts or performances


                                       14
<PAGE>

contemplated  by, or satisfy the  obligations  imposed on it  pursuant  to, this
Agreement,  including all permits,  rights,  licenses and  approvals  necessary,
required or appropriate for any and all performances through to the premises and
to the listeners frequenting the premises of Service Cable Subscribers,  Service
Satellite  Subscribers,  PPV Cable  Subscribers  and PPV Satellite  Subscribers;
(vii) neither the Service, any program related thereto, or any component thereof
is subject to, or the subject of, any lien,  encumbrance,  charge,  lis pendens,
administrative proceeding,  governmental investigation, or litigation pending or
threatened;  and (viii) the obligations  created by this  Agreement,  insofar as
they  purport to be binding on  Network,  constitute  legal,  valid and  binding
obligations of Network enforceable in accordance with their terms.

            (b) Affiliate  represents and warrants to Network that (i) Affiliate
is a corporation duly organized and validly existing under the laws of the State
of  Delaware;  (ii)  Affiliate  has the power and  authority  to enter into this
Agreement and to fully perform its  obligations  hereunder;  (iii)  Affiliate is
under no contractual or other legal  obligation which shall in any way interfere
with  its  full,  prompt  and  complete  performance  hereunder;  and  (iv)  the
individual  executing this Agreement on behalf of Affiliate has the authority to
do so.

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

            (d) Network  represents,  covenants,  and warrants  that the Service
complies,  and will  continue to comply,  in all  respects  with the  commercial
matter limitations of the Children's  Television Act of 1990, Public Law 101-437
(October 18, 1990) and the regulations of the FCC promulgated  thereunder as the
same may apply to cable  television  systems and cable  operators,  including 47
C.F.R.  ss. 76.225,  76.305,  and as the same may from  time-to-time  be amended
("Children's   Television   Regulations");   provided   further,   that  Network
represents, covenants and warrants that it will provide to Affiliate all records
demonstrating such compliance under the Children's Television Regulations as are
necessary for Affiliate to timely demonstrate its compliance as a cable operator
with the commercial  matter  limitations and record keeping  requirements of the
Children's  Television  Regulations.  Network further represents,  covenants and
warrants  that the  Service  complies  and will  continue  to  comply,  with all
origination cablecasting regulations of the FCC, including but not limited to 47
C.F.R. ss.ss. 76.205 - 76.221 (political equal time, personal attack,  lotteries
and  sponsorship  identification),  as the same may from time to time be amended
("Origination  Cablecasting  Requirements"),  and  that  Network  shall  provide
Affiliate  all  necessary  documentation  required  thereunder  for


                                       15
<PAGE>

Affiliate to timely meet its documentation  and public file  requirements  under
the  Origination  Cablecasting  Requirements.   In  the  event  that  any  other
programming  offered by the Service shall be among the kind of programming which
is  regulated  by  federal,  state or local law, as the same may apply to pay or
cable television systems and operators,  then Network shall provide to Affiliate
all statements, records or other documents reasonably necessary for Affiliate to
demonstrate  timely  compliance as an operator or distributor with such laws and
regulations.

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

            (f) Without  limiting the provisions of Section 8(e) or Section 8(g)
hereof,   Network  will  indemnify,   defend  and  forever  hold  Affiliate  and
Affiliate's  affiliated  companies,  and  each of  Affiliate's  and  Affiliate's
affiliated companies' respective officers,  directors,  employees,  partners and
agents,  harmless  from and  against any and all  losses,  liabilities,  claims,
costs, damages and expenses (including,  without limitation, fines, forfeitures,
attorneys' fees, disbursements and administrative or court costs) arising out of
the  content of the Service or the use and  delivery  of the Service  under this
Agreement  (including,   but  not  limited  to,  sponsorship,   promotional  and
advertising  spots, any background music and anything else inserted by any party
other than Affiliate),  including,  without limitation, any losses, liabilities,
claims,  costs, damages and expenses based upon any lien,  encumbrance,  charge,
lis pendens,  administrative proceeding,  government investigation or litigation
relating to the Service,  any program included therein or any component thereof,
or based upon  alleged or proven  libel,  slander,  defamation,  invasion of the
right of privacy or the right of  publicity,  or  violation or  infringement  of
copyright  (including  music  performance  rights  for any and all  performances
through to subscribers),  literary or music synchronization rights, obscenity or
any other form or forms of speech (whether or not protected by the  Constitution
of the United  States or any State) or  otherwise  arising out of the content of
the Service.

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


                                       16
<PAGE>


            (h) In  connection  with any  indemnification  provided  for in this
Section  8, each party  shall so  indemnify  the other only if such other  party
claiming  indemnity shall give the indemnifying party prompt notice of any claim
or  litigation  to  which  its  indemnity  applies;  it  being  agreed  that the
indemnifying party shall have the right to assume the full defense of any or all
negotiations,   claims  or  litigation  to  which  its  indemnity  applies.  The
indemnified  party will cooperate fully (at the cost of the indemnifying  party)
with the indemnifying  party in such defense and in the settlement of such claim
or litigation,  and the indemnified party shall make no compromise or settlement
of any such claim without the prior written consent of the  indemnifying  party.
The settlement of any claim or action by the indemnified party without the prior
written consent of the indemnifying  party shall release the indemnifying  party
from its obligations hereunder with respect to such claim or action so settled.

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

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

      9. EARLY TERMINATION RIGHTS:

            (a) In addition  to  Network's  other  rights at law or in equity or
pursuant to other  provisions  of this  Agreement,  Network may, by so notifying
Affiliate,  terminate this Agreement:  (i) if Affiliate is in material breach of
this Agreement,  provided,  however,  that if such breach is of the type that is
curable,  then Network shall not exercise its termination or other rights at law
or in equity  hereunder  unless  Network has, by so notifying  Affiliate,  given
Affiliate  at least thirty (30) days to fully cure such  material  breach and to
demonstrate  to Network that such material  breach has been cured,  and provided
further,  that if such breach is confined to a System or to a limited  number of
Systems,  Network shall have the right to terminate  this  Agreement  only as to
such System or Systems; or (ii) if Affiliate has filed a petition in bankruptcy,
is  insolvent,  or has  sought  relief  under  any law  related  to  Affiliate's
financial condition or its ability to meet its payment obligations;  or (iii) if
any involuntary petition in bankruptcy has been filed against Affiliate,  or any
relief  under any such law has been  sought  by any  creditor(s)  of  Affiliate,
unless such involuntary petition is dismissed,  or such relief is denied, within
thirty (30) days after it has been filed or sought.

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


                                       17
<PAGE>

such breach is of the type that is curable,  then  Affiliate  shall not exercise
its termination or other rights at law or in equity  hereunder  unless Affiliate
has, by so notifying  Network,  given Network at least thirty (30) days from the
time such notice is sent, to fully cure such material  breach and to demonstrate
to Affiliate  that such material  breach has been cured;  or (ii) if Network has
filed a petition in bankruptcy,  is insolvent or has sought relief under any law
related to  Network's  financial  condition  or its  ability to meet its payment
obligations;  or (iii) if any involuntary  petition in bankruptcy has been filed
against  Network,  or any  relief  under  any such law has  been  sought  by any
creditor(s) of Network,  unless such involuntary petition is dismissed,  or such
relief is denied,  within thirty (30) days after it has been filed or sought; or
(iv) on at least  fifteen  (15) days'  notice in the event of any Force  Majeure
provided for in Section 10 of this  Agreement  which  continues for a continuous
period of thirty (30) days.

      10. FORCE MAJEURE:


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

      11. NOTICES:

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

To Network:             532 Broadway
                        New York, New York 10012

                        Attention: President


                                       18
<PAGE>

To Affiliate:           Terrace Tower II
                        5619 DTC Parkway
                        Englewood, Colorado 80111

                        Attention: President

                        With copies to:  - Vice President, Programming
                                         - Vice President, Pay Per View
                                         - Corporate Counsel, Business Affairs

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

      12. CONFIDENTIALITY: PRESS RELEASES:

      Neither  Affiliate  nor  Network  shall  disclose  (whether  orally  or in
writing,  or by press  release or otherwise) to any third party (other than each
party's respective officers, directors and employees, in their capacity as such,
and  their  respective  auditors  or  attorneys,  provided,  however,  that  the
disclosing  party agrees to be  responsible  for any breach of the provisions of
this  Section  12  by  such  officers,  directors  or  employees,   auditors  or
attorneys),  any  information  with respect to the terms and  provisions of this
Agreement and neither party hereto shall  disclose any  information  obtained in
any inspection and/or audit of the other party's books and records,  except: (i)
to the extent necessary (but redacted to the greatest extent possible) to comply
with law or the valid order of an administrative  agency or a court of competent
jurisdiction,  in which event the party making such  disclosure  shall so notify
the other as promptly as  practicable  (and,  if possible,  prior to making such
disclosure) and shall seek confidential  treatment of such information;  (ii) as
part of its normal  reporting  or review  procedure to its parent  company,  its
auditors or its attorneys,  provided,  however, that the disclosing party agrees
to be  responsible  for any breach of the  provisions of this Section 12 by such
parent company, its auditors or attorneys;  (iii) in order to enforce its rights
or perform  its  obligations  pursuant to this  Agreement;  and (iv) if mutually
agreed by Affiliate and Network,  in advance of such disclosure,  in writing. In
addition,  Network  shall not use or disclose  information  (whether  personally
identifiable information or not) to any third party regarding Affiliate's or any
affiliate of Affiliate's cable television  subscribers or Satellite  subscribers
and shall not engage in any direct  mailing or telephone  solicitation,  for any
purpose, to cable television  subscribers or Satellite  subscribers of Affiliate
or any affiliate of Affiliate.  This Section 12 shall survive the  expiration or
termination  of this Agreement  regardless of the reason for such  expiration or
termination.


                                       19
<PAGE>

      13. MISCELLANEOUS:

            (a)  Assignment;  Binding  Effect;  Reorganization.  This Agreement,
including both its  obligations  and benefits,  shall redound to the benefit of,
and be binding on the  respective  transferees  and  successors of, the parties,
except that neither this  Agreement  nor either  party's  rights or  obligations
hereunder  shall be assigned or  transferred  by either party  without the prior
written  consent of the other  party;  provided,  however,  no consent  shall be
necessary in the event of an assignment to a successor  entity  resulting from a
merger,  acquisition or consolidation by either party or assignment to an entity
under  common   control,   controlled   by  or  in  control  of  either   party.
Notwithstanding  the foregoing,  Network shall give Affiliate  thirty (30) days'
prior  written  notice of a change in the control or ownership of the Service or
Network. In such event, this Agreement may, in the sole discretion of Affiliate,
be terminated.  For purposes of this  paragraph,  the term  "control"  means the
power  to  direct  the  management  and  policies  of  an  entity,  directly  or
indirectly,  whether through the ownership of voting securities,  by contract or
otherwise.

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

            (c) Taxes.  Affiliate shall be responsible to pay all income, sales,
use and other taxes arising out of Affiliate's  exhibition of the Service by the
Systems,   Affiliate's  storage,   possession  or  use  of  any  advertising  or
promotional  materials  and/or any  personal  property or other  taxes  imposed,
assessed or levied  against  Affiliate by any  governmental  authority.  Network
shall be responsible to pay all income,  sales,  use and other taxes arising out
of its provision of the Service to Affiliate and the Systems, Network's storage,
possession  or  use of its  advertising  or  promotional  materials  and/or  any
personal property or other taxes imposed, assessed or levied by any governmental
authority.

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


                                       20
<PAGE>

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

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

            (g) *****. Network agrees that ***** of this Agreement,  signed by a
duly  authorized  officer of Network,  stating  that Network has  satisfied  its
obligations under this section.

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


                                       21
<PAGE>

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

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

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

      IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as of
the date first above written.

AFFILIATE:                                  NETWORK:

SATELLITE SERVICES, INC.                    SPICE, INC.,
a Delaware corporation                      a New York corporation


By:      /s/ Jedd Palmer            By:     [SIGNATURE ILLEGIBLE]
         Jedd Palmer,                       Name:  _______________________
         Vice President,                    Title: _______________________
         Programming


                                       22
<PAGE>

                                   SCHEDULE 1

                    To Affiliation Agreement By and Between

                                Spice, Inc. and

                            Satellite Services, Inc.

                             Dated November 1, 1992

                                    SYSTEMS

                                [TO BE PROVIDED]


                                       23
<PAGE>

                                    EXHIBIT A

                     To Affiliation Agreement By and Between

                                 Spice, Inc. and

                            Satellite Services, Inc.

                             Dated November 1, 1992

                              System Qualifications

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

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

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

      3. that either a franchise or license is not required or a valid franchise
or license is in effect  through the Term of this Agreement or the franchisee or
licensee has held a valid cable television franchise or license and continues to
operate in the  franchise or license area under a claim of right or is otherwise
lawfully operating or franchisee or licensee has held a valid cable franchise or
license and is continuing to operate while diligently  pursuing,  in good faith,
its  available  judicial  remedies.  For  the  above  purposes,  in the  event a
franchise  or license  expires  before the end of the Term,  such  franchise  or
license  shall  be  deemed  valid  for so  long as  franchisee  or


                                       24
<PAGE>

licensee  is  negotiating  in good  faith  with  the  franchising  or  licensing
authority for a franchise or license renewal;

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

II. In the event TCI's direct or indirect  equity interest in a System or in the
entity  managing such System  decreases  because of a refinancing  of the entity
(other than as  described  in  Paragraph  III below)  which owns or manages such
System, and provided TCI's interest does not decrease to zero, such System shall
continue to qualify under Paragraph I hereof,  provided however,  TCI's interest
in such System shall  increase to the level  required  under  Paragraph I hereof
within eighteen (18) months of the decrease.

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


                                       25
<PAGE>

                                    EXHIBIT B

                     To Affiliation Agreement By and Between

                                 Spice, Inc. and

                            Satellite Services, Inc.

                             Dated November 1, 1992

                                PROGRAM SCHEDULE


                                       26
<PAGE>

                                    EXHIBIT C

                     To Affiliation Agreement By and Between

                                 Spice, Inc. and

                            Satellite Services, Inc.

                              Dated November 1,1992

                            TECHNICAL SPECIFICATIONS

                                     GENERAL

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

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

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

                        A.    Loss of video

                        B.    Loss of audio

                        C.    Video signal to noise <45db

                        D.    Audio signal to noise <.45db

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

                              VIDEO SPECIFICATIONS

Parameter                                         Space Segment    Total System

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

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

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

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

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


                                       27
<PAGE>

                              VIDEO SPECIFICATIONS

Parameter                                         Space Segment    Total System

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

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

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

                              AUDIO SPECIFICATIONS

Parameter                                         Space Segment    Total System

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

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

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

3.4    Distortion:                                <.5% at TT       <.7% at TT
       At 10db above TT distortion shall not
       exceed 3%. Distortion shall be measured
       at 1004Hz.

3.5    Wow and Flutter:                                            <.1%rms

3.6    Crosstalk:                                 >65db            >65db

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


                                       28