FIFTH AMENDMENT
                                       TO
                              EMPLOYMENT AGREEMENT


         This Fifth Amendment, dated as of April 1, 1997, is to Employment
Agreement made and entered into as of June 1, 1992 (as heretofore amended, the
"Employment Agreement") by and between GRAFF PAY-PER-VIEW INC. (now Spice
Entertainment Companies, Inc.), a Delaware corporation (the "Company"), and J.
ROGER FAHERTY (the "Executive").

                                  Introduction

         The parties entered into the Employment Agreement on June 1, 1992, and
thereafter entered into amendments one through four at February 22, 1993, June
15, 1993, March 23, 1994 and March 20, 1996, respectively, and now desire to
further amend certain provisions of the Employment Agreement, setting forth
herein the revised terms and conditions of the Executive's continued employment
by the Company and its subsidiaries from and after the date of this Amendment.
The Employment Agreement presently provides for automatic grant to Executive of
Options in each year of his employment beginning in 1998. The Executive and the
Company desire to eliminate such provision and, in lieu thereof, issue hereby an
option to purchase a fixed number of shares contingent upon meeting agreed upon
performance goals as established by the Compensation Committee of the Board of
Directors. The Company and Executive also desire to conform certain provisions
of the Employment Agreement to the standard employment agreement being developed
by the Company for execution between the Company and other senior executive
officers.

         Accordingly, in consideration of the mutual covenants and agreements
set forth herein and the mutual benefits to be derived here from, and intending
to be legally bound hereby, the Company and the Executive agree as follows:

         1. All defined terms used in this Amendment, unless otherwise defined
herein, shall have the meanings ascribed to them in the Employment Agreement.


         2. The last two sentences of subparagraph 8(a) of the Employment
Agreement as heretofore amended are hereby deleted in their entirety. In
consideration for the surrender of Employee's rights therein the Company has
granted Executive a non-plan Option in the form of Exhibit A hereto. The
provisions of subparagraph 8(b) and 8(c) of the Employment Agreement shall apply
to such Options. Nothing herein shall be construed to limit Executive's
participation in any further grant of Options pursuant to any Stock Option Plan
of the Company and the grant of the Options hereby shall not be taken into
consideration with respect to any such grant.

         3. The Company shall employ the Executive, on the terms set forth in
this Agreement as its Chairman and Chief Executive Officer and throughout the
term of the Agreement the Board of Directors shall appoint Executive to such
position.

         4. The parties desire to conform the last sentence of Paragraph 2 to
reflect the term of the Agreement is a six-year term. Therefore, such last
sentence shall read as follows:

                  "Therefore, upon each January 1 of a Year, this Agreement
                  shall be effective for a six-year term unless prior thereto
                  such notice of non-renewal has been given."

         5. The  first  paragraph  of  subparagraph  3(a)  shall be deleted  
and the  following  substituted therefore:

                  3(a) Death or Disability. If the Executive dies during the
                  Term, the Term shall terminate as of the date of the
                  Executive's death. If Executive becomes Totally Disabled (as
                  that term is defined below) for one hundred eighty (180) days
                  in the aggregate during any consecutive twelve-month period
                  during the Term, the Company shall have the right to terminate
                  the Term by giving the Executive thirty (30) days' prior
                  written notice thereof, and upon the expiration of such
                  thirty-day period, the Executive's employment under this
                  Agreement shall terminate. If the Executive resumes his duties
                  within thirty (30) days after receipt of a notice of
                  termination and continues to perform such duties for four (4)
                  consecutive weeks thereafter, the Term shall continue and the
                  notice of termination shall be considered null and void and of
                  no effect. Upon termination of the Term under this Section
                  7.1, the Company shall have no further obligations or
                  liabilities under this Agreement, except to pay the
                  Executive's estate or the Executive, as the case may be: (i)
                  the portion, if any, that remains unpaid of the Base Salary
                  for periods worked by the Executive plus one year's Base
                  Salary; and (ii) the amount of any expenses reimbursable in
                  accordance with Section 4 above; and (iii) any amounts due
                  under any Company benefit, welfare or pension plan. Any stock
                  options or other compensation plan benefits not vested at the
                  time of the termination of the Agreement under this Section
                  7.1 shall immediately become fully vested and options shall
                  remain exercisable for one year following such termination,
                  subject to earlier termination if the option's maximum term
                  occurs sooner.

         6. Paragraph 12 shall be deleted in its entirety and the following 
substituted therefore:

                  Change in Control.
                  a.      Definitions.  For purposes of this  Paragraph  (12), 
         a "Change on Control" shall mean a change in control of a nature that 
         would be required to be reported in response to Item 5(f) of Schedule 
         14A of  Regulation 14A, as in effect on the date of this  Agreement,  
         promulgated  under the  Securities  Exchange  Act of 1934,  as
         amended (the "Exchange Act"); provided,  that whether or not required 
         to be reported under such Item 5(f), without limitation,  such a 
         Change in Control  shall be deemed to have  occurred if (I) any  
         "person" or "group" (as such terms are used in  Sections  13(d) and 
         14(d) of the  Exchange  Acts) is or  becomes  the  "beneficial  owner" 
         (as defined in Rule 13d-3 under the Exchange Act), directly or 
         indirectly,  of securities of the Company representing 25% or more of 
         the combined voting power of the Company's then outstanding securities;
         or (II) during any period of two consecutive  years,  individuals who, 
         at the beginning of such period,  constitute the Board cease for any
         reason to  constitute at least a majority  thereof  unless the 
         election,  or the  nomination  for election by the Company's 
         stockholders,  of each new director was approved by Executive; 
         provided, however, that notwithstanding the foregoing,  no Change of 
         Control shall be deemed to have occurred pursuant to either clause (I) 
         or (II) above in the event of (and  notwithstanding any resultant 
         change in the membership of the Board) an acquisition is made by any 
         group comprised of senior  officers of the Company,  including  
         Executive,  of 25% or more of the combined voting power of the 
         Company's then outstanding securities.

                  b. Termination Payment. Notwithstanding any provision of this
         Agreement, if, within eighteen (18) months following a Change in 
         Control of the Company, (a) Executive's employment by the Company shall
         be terminated by the Company other than as a result of the Executive 
         becoming Totally Disabled or (b) Executive terminates the Term for any 
         reason, then Executive shall be entitled to the benefits provided 
         below:

                     i.    The Company shall pay Executive full Base Salary
                           through the date of termination (the "Termination
                           Date") at the rate in effect at that time, will pay
                           Executive for any vacation earned but not taken and
                           the amount, if any, of any bonus for a past Company
                           fiscal year which has not yet been awarded or paid;

                     ii.   In lieu of any further salary requirements to
                           Executive for periods subsequent to the Termination
                           Date, the Company, subject to the limitation
                           described below, shall pay to executive on the 60th
                           day following the Termination Date a lump sum amount
                           equal to four times the Base Salary (the 
                           "Termination Payment");

                     iii.  All stock  options held by Executive  shall be fully 
                           vested and remain  outstanding  for their full 
                           original term unless sooner exercised; and

                     iv.   The repayment of all indebtedness owed by the
                           Employee to the Company shall be changed by
                           eliminating all payments for a five-year period with
                           the repayment to commence in ten equal installments
                           of principal and interest with the first payment due
                           at the end of the sixth calendar year after Change 
                           in Control.

         c.       Certain Additional Payments by the Company.

                     i.    Anything in this  Agreement  to the contrary  
                           notwithstanding,  in the event it shall be
                           determined  that any  payment or  distribution  to 
                           or for the  benefit of the  Executive (whether paid 
                           or payable or distributed or distributable pursuant 
                           to the terms of this Agreement  or  otherwise,  but  
                           determined  without  regard to any  additional  
                           payments required  under this  Section (a  "Payment")
                           would be subject to the excise tax imposed by 
                           Section 4999 of the Code or any interest or 
                           penalties are incurred by the  Executive with 
                           respect to such excise tax (such excise tax, 
                           together  with any such interest and penalties, are  
                           hereinafter collectively  referred to as the "Excise
                           Tax"), then the Executive  shall be entitled to 
                           receive an additional  payment (a Gross-Up  Payment) 
                           in an amount such  that  after  payment  by the  
                           Executive of all  taxes  (including  any interest or
                           penalties  imposed  with  respect  to  such  taxes),
                           including,   without limitation,  any income  taxes 
                           (and any  interest  and  penalties  imposed  with 
                           respect hereto) and Excise Tax imposed  upon the 
                           Gross-Up  Payment,  the  Executive  retains an
                           amount of the Gross-Up Payment equal to the Excise 
                           Tax imposed upon the Payment.

                                    Subject to the provisions of Paragraph  
         12(c), all  determinations required to be made under this Paragraph 
         12(c), including whether and when Gross-Up Payment is required and the 
         amount of such Gross-Up Payment and the assumptions to be utilized in 
         arriving at such determination, shall be made by an independent public 
         accounting firm selected by Executive and reasonably acceptable to the 
         Company (the "Accounting Firm"); provided, however, that the 
         Accounting Firm shall not determine that no Excise Tax is payable by 
         the Executive unless it delivers to the Executive a written opinion 
         (the Accounting Opinion) that failure to report the Excise Tax on the 
         Executive's applicable federal income tax return would not result in 
         the imposition of a negligence or similar penalty.  In the event that 
         the Accounting Firm has served, at any time during the two years 
         immediately preceding a Change in Control Date, as accountant or 
         auditor for the individual, entity or group that is involve in 
         effecting or has any material interest in the Change in Control, the 
         Executive shall appoint another nationally recognized accounting firm 
         to make the determinations and perform the other functions specified 
         in this Paragraph 12(c). All fees and expenses of the Accounting Firm 
         shall be borne solely by the Company. Within 15 business days of the 
         receipt of notice from the Executive that there has been a Payment, or 
         such earlier time as is requested by the Company, the Accounting Firm 
         shall make all determinations required under this Paragraph 12(c), 
         shall provide to the Company and the Executive a written report 
         setting forth such determinations, together with detailed supporting 
         calculations, and, if the Accounting Firm determines that no Excise 
         Tax is payable, shall deliver the Accounting Opinion to the Executive. 
         Any Gross-Up Payment, as determined pursuant to this Paragraph 12(c), 
         shall be paid by the Company to the Executive within five days of the 
         receipt of the Accounting Firm's determination. Subject to the 
         remainder of this Paragraph 12(c), any determination by the Accounting 
         Firm shall be binding upon the Company and the Executive. As a result
         of the uncertainty in the application of Section 4999 of the Code at 
         the time of the initial determination by the Accounting Firm hereunder,
         it is possible that Gross-Up Payments which will not have been made by 
         the Company should have been made (Underpayment), consistent with the 
         calculations required to be made hereunder. In the event that it is 
         ultimately determined in accordance with the procedures set forth in 
         Paragraph 12(c) that the Executive is required to make a payment of 
         any Excise Tax, the Accounting Firm shall determine the amount of the 
         Underpayment that has occurred and any such Underpayment shall be 
         promptly paid by the Company to or for the benefit of the Executive.

                                    The  Executive  shall  notify  the  Company
         in  writing  of any  claims by the Internal Revenue Service that, if 
         successful, would require the payment by the Company of the Gross-Up 
         Payment. Such notification shall be given as soon as practicable but 
         no later than 30 days after the Executive actually receives notice in 
         writing of such claim and shall apprise the Company of the nature of 
         such claim and the date on which such claim is requested to be paid; 
         provided, however, that the failure of the Executive to notify the 
         Company of such claim (or to provide any required information with 
         respect thereto) shall not affect any rights granted to the Executive 
         under this Paragraph 12(c) except to the extent that the Company is 
         materially prejudiced in the defense of such claim as a direct result 
         of such failure. The Executive shall not pay such claim prior to the 
         expiration of the 30-day period following the date on which he gives 
         such notice to the Company (or such shorter period ending on the date 
         that any payment of taxes with respect to such claim is due). If the 
         Company notifies the Executive in writing prior to the expiration of 
         such period that it desires to contest such
         claim, the Executive shall:

                           (i)      give the Company any information reasonably
                  requested by the Company relating to such claim;

                           (ii) take such action in connection with contesting
                  such claim as the Company shall reasonably request in writing
                  from time to time, including, without limitation, accepting
                  legal representation with respect to such claim by an
                  attorney selected by the Company and reasonably acceptable to 
                  the Executive;

                           (iii)    cooperate  with the Company in good faith 
                  in order effectively to contest such claim; and

                           (iv)     if the  Company  elects not to assume and 
                  control  the  defense of such claim, permit the Company to
                  participate in any proceedings relating to such claim;

         provided, however, that the Company shall bear and pay directly all
         costs and expenses (including additional interest and penalties)
         incurred in connection with such contest and shall indemnify and hold
         the Executive harmless, on an after-tax basis, for any Excise Tax or
         income tax (including interest and penalties with respect thereto)
         imposed as a result of such representation and payment of costs and
         expenses. Without limitation on the foregoing provisions of this
         Paragraph 12(c), the Company shall have the right, as its sole option,
         to assume the defense of an control all proceedings in connection with
         such contest, in which case it may pursue or forego any and all
         administrative appeals, proceedings, hearings and conferences with the
         taxing authority in respect of such claim, and may either direct the
         Executive to pay the tax claimed and sue for a refund or contest the
         claim in any permissible manner, and the Executive agrees to prosecute
         such contest to a determination before any administrative tribunal, in
         a court of initial jurisdiction and in one or more appellate courts, as
         the Company shall determine; provided, however, that if the Company
         directs the Executive to pay such claim and sue for a refund, the
         Company shall advance the amount of such payment to the Executive, on
         an interest-free basis, and shall indemnify and hold the Executive
         harmless, on an after-tax basis, from any Excise Tax or income tax
         (including interest or penalties with respect thereto) imposed with
         respect to such advance or with respect to any imputed income with
         respect to such advance; and further provided, that any extension of
         the statute of limitations relating to payment of taxes for the taxable
         year of the Executive with respect to which such contested amount is
         claimed to be due is limited solely to such contested amount.
         Furthermore, the Company's right to assume the defense of and control
         the contest shall be limited to issues with respect to which a Gross-Up
         Payment would be payable hereunder and the Executive shall be entitled
         to settle or contest, as the case may be, any other issue raised by the
         Internal Revenue Service or any other taxing authority.

                                    If,  after the receipt by the  Executive 
         of an amount  advanced by the Company pursuant to Paragraph 12(c) the 
         Executive becomes entitled to receive any refund with respect to such 
         claim, the Executive shall (subject to the Company's complying with the
         requirements of Paragraph 12(c) promptly pay to the Company the amount 
         of such refund (together with any interest paid or credited thereon 
         after taxes applicable thereto).  If, after the receipt by the 
         Executive of an amount advanced by the Company pursuant to Paragraph 
         12(c) a determination is made that the Executive shall not be entitled 
         to any refund with respect to such claim, and the Company does not 
         notify the Executive in writing of its intent to contest such denial 
         of refund prior to the expiration of 30 days after such determination, 
         then such advance shall be forgiven and shall not be required to be 
         repaid and the amount of such advance shall offset, to the extent 
         thereof, the amount of Gross-Up Payment required
         to be paid.

         7. Paragraph 13(a) is hereby deleted and the following substituted 
therefore:

                           (a) Executive recognizes that in each of the highly
                           competitive businesses in which the Company is
                           engaged, personal contact is of primary importance in
                           securing new customers and in retaining the accounts
                           and goodwill of present customers and protecting the
                           business of the Company. The Executive, therefore,
                           agrees that during the Employment Period and, if the
                           Date of Termination occurs by reason of the Executive
                           terminating his employment for reasons other than
                           Total Disability or Good Reason or change in control,
                           for a period of one year after the Date of
                           Termination, he will not, with respect to the adult
                           television, cable and pay-per-view entertainment
                           industry, or any other electronically disseminated
                           adult entertainment media, in the United States,
                           Canada and Europe (the "Relevant Geographic Area"),
                           (i) accept employment or render service to any Person
                           that is engaged in a business directly competitive
                           with the business then engaged in by the Company or
                           any of its affiliated companies or (ii) enter into or
                           take part in or lend his name, counsel, or assistance
                           to any business, either as proprietor, principal,
                           investor, partner, director, officer, executive,
                           consultant, advisor, agent, independent contractor,
                           or in any other capacity whatsoever, for any purpose
                           that would be competitive with the business of the
                           Company or any of its affiliated companies (all of
                           the foregoing activities are collectively referred to
                           as the "Prohibited Activity").

         8. Miscellaneous.

                         (a)     The  Employment  Agreement,  as amended  by  
this  Amendment  and  the previous amendments, constitutes the entire 
understanding and agreement between the Company and the Executive regarding its 
subject matter and supersedes all prior negotiations and agreements, whether 
oral or written, between them with respect to its subject matter. This Agreement
 may not be modified except by a written agreement signed by the Executive and 
a duly authorized officer of the Company.

                         (b)     This Amendment may be executed in several  
counterparts,  each of which shall be deemed to be an original but all of which 
together will constitute one and the same instrument.

                         (c)     The Company shall pay Executive's reasonable  
legal fees in connection with this amendment.

                         IN WITNESS WHEREOF, this Agreement has been executed
by the Executive and on behalf of the Company by its duly authorized officer on 
the date first written above.


                                       GRAFF PAY-PER-VIEW INC.
                                       (Now Spice Entertainment Companies, Inc.)



                                        By:  /s/ Daniel J. Barsky
                                             ________________________________
                                             Name:  Daniel J. Barsky
                                             Title: Senior Vice President
                                                    and General Counsel



                                        By:  /s/ J. Roger Faherty
                                             ________________________________
                                             J. Roger Faherty