OPTION  AGREEMENT,  granted  April 1,  1997,  between  SPICE
ENTERTAINMENT COMPANIES,  INC.  (hereinafter  called  the  "Company"),  and J.
ROGER FAHERTY (hereinafter called the "Optionee").

         The  Company  and  the  Optionee  have  amended  Optionee's  employment
agreement dated June 1, 1992 as previously amended (the "Employment  Agreement")
eliminating  Optionee's  entitlement to automatic  grant of options each year of
Optionee's  employment  beginning  1998.  The  Optionee  hereby  is  granted  in
consideration of such amendment and in lieu of such automatic option,  the right
to purchase four hundred  thousand  (400,000)  shares of its commons stock,  par
value $.01 per share (hereinafter called the "Common Shares").

         NOW,  THEREFORE,  in consideration of the mutual covenants  hereinafter
set forth and for other good and  valuable  consideration,  the  parties  hereto
agree as follows:

         1. Grant of Option.  In  consideration  of the  foregoing,  the Company
hereby grants Optionee the right and option (hereinafter called the "Option") to
purchase  all or any part of an aggregate  of four  hundred  thousand  (400,000)
Common Shares on the terms and conditions herein set forth.

         2.       Exercise Price.  The purchase price of the Common Shares
subject to the Option shall be two dollars and twelve and one half cents($2.125)
per share, the fair market value of such Common Shares as determined on the date
hereof.

         3.       Limitation of Exercisability of Options.  The Option shall be 
exercisable as follows:

                  (a)      100,000 Options shall be exercisable immediately.

                  (b) 150,000  Options shall be  exercisable  on the earlier of:
(i) when the market price of the Company's common stock shall be $4.00, (ii) the
Company has EBITDA of $7,300,000 for 1997 as reflected in the Company's  audited
statement  or (iii) in six years from the date of grant if the Optionee is still
employed as an officer by the Company or an affiliate thereof.  If the principal
market  for the  Company's  common  stock is a national  exchange  or The Nasdaq
National Market,  market price shall mean the average of the last sale prices of
such common stock for twenty (20)  consecutive  trading  days.  If the principal
market for the Company's  common stock is not a national  exchange or The Nasdaq
National  Market,  market price shall mean the average of the closing bid prices
of such common stock for twenty (20) consecutive trading days.

                  (c) 150,000 Options shall be exercisable on the earlier of (I)
satisfaction  of upon such  conditions as shall be reasonably  determined by the
Board of Directors and the Optionee after the completion of the Company's budget
for 1998 or (ii) in six years  from the date of grant if the  Optionee  is still
employed as an officer by the Company or an affiliate thereof.

                  (d) If the  criteria in either  paragraph  (a) or (b) have not
been met,  then the board shall set forth new  criteria for  subsequent  periods
consistent with the goals set forth in such paragraph (b) or (c).

                  (e) Any  dispute  relating  to  such  determination  shall  be
settled by arbitration  pursuant to Section 11(a), (c) and (d) of the Employment
Agreement with such provision surviving termination of such agreement.

         In the event  that  there is a "Change  in  Control"  as defined in the
Employment  Agreement  (provided that the percentage  change applicable shall be
fifteen  percent (15%) and not  twenty-five  percent (25%)) or if the Employment
Agreement  is  terminated  for any reason  other than  cause,  all of the Common
Shares covered hereby shall be immediately exercisable.

         4.       Expiration of Option.  The Option shall not be exercisable 
after April 1, 2007.

         5.       No Rights as Shareholder.  The Optionee shall have none of the
rights of a stockholder with respect to any of the Common Shares subject to  the
Option until such shares shall be issue to him upon the exercise of the Option.

         6.       Adjustments Upon Changes in Capitalization.

                  (a) In the event that prior to the  exercise  of the Option in
full,  the  outstanding  common  stock of the  Company  is  changed by reason of
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up,  combination  of shares,  stock  dividends or the like, an appropriate
adjustment  shall be made by the Board of  Directors in the number of shares and
option price per share subject to the unexercised  portion of the Option. If the
Company shall be reorganized,  consolidated or merged with another  corporation,
or if all or  substantially  all of the assets of the  Company  shall be sold or
exchanged, the Optionee shall, at the time of issuance of the stock under such a
corporate event, be entitled to receive upon the exercise of his Option the same
number  and kind of shares  of stock or the same  amount  of  property,  cash or
securities  as he would have been entitled to receive had Optionee been a holder
of the number of Common  Shares  covered by his Option  immediate  prior to such
event;

                  (b)  Any  adjustment  in the  number  of  shares  shall  apply
proportionately to only the unexercised portion of the Option granted hereunder.
If fractions of a share would result from any such  adjustment,  the  adjustment
shall be revised to the next lower whole number of shares.

         7.       Method of Exercise of Option.

                  a) Subject to the terms and conditions of this Agreement,  the
Option may be  exercised  by  written  notice to the  Company  at its  principal
office,  presently located at 536 Broadway, New York, NY 10012, attention of the
Secretary.  Such notice  shall state the election to exercise the Option and the
number of Common  Shares in  respect  of which it is being  exercised,  shall be
signed by the  person or persons so  exercising  the Option and shall  either be
accompanied by payment in full, by check payable to the order of the Company, of
the  purchase  price of said shares in which event the Company  shall  deliver a
certificate  or  certificates  representing  said shares as soon as  practicable
after  the  notice  shall  be  received  by  the  Company.  The  certificate  or
certificates  for the Common  Shares as to which the  option  shall have been so
exercised shall be registered in the name of the person or persons so exercising
the Option and shall be delivered  as aforesaid to or upon the written  order of
the person or persons exercising the Option.

                  (b) In lieu of cash payment,  with the consent of the Board of
Directors,  the  Optionee  may elect to deliver  either (i) a bank or  certified
check equal to the aggregate par value of the Common Shares being purchased with
the balance of the purchase  price  therefore  being paid in the form a Note for
such  amount as approved  by the Board or (ii)  shares of the  Company's  common
stock owned by the Optionee  having a fair market value  (determined in the sole
discretion of the Board of Directors)  equal to such purchase price.  The Option
shall be deemed to have been  exercised  with respect to any  particular  Common
Shares if,  and only if,  the  preceding  provisions  of this  Section 7 and the
provisions of Section 8 hereof shall have been complied with, in which event the
Option shall be deemed to have been exercised.

          8.   Registration Rights. Optionee (including any successor or assign
shall have  the  registration  rights  set  forth  in  Section  8(b)  and  8(c) 
of the Employment   Agreement.   Such  provisions  shall  survive  termination  
of  the Employment Agreement for any reason.

         9.       Restrictions on Issuance.

                  (a)  Unless  prior to the  exercise  of the  Option the Common
Shares  issuable upon such exercise have been registered with the Securities and
Exchange  Commission  pursuant to the  Securities  Act of 1933, as amended,  the
notice of exercise shall be accompanied by a representation  or agreement of the
individual  exercising  the Option of the Company to the effect that such shares
are  being  acquired  for  investment  and  not  with a view  to the  resale  or
distribution  thereof  or such other  documentation  as may be  required  by the
Company,  unless in the opinion of counsel to the Company,  such representation,
agreement or documentation is not necessary to comply with said Act.

                  (b) The Company  shall be not  obligated  to issue and deliver
any Common  Shares  until they have been listed on each  securities  exchange on
which Common shares may then be listed nor until there has been a  qualification
under or compliance with such state or federal laws, rules or regulations as the
Company may deem applicable.  The Company shall use reasonable efforts to obtain
such listing, qualification and compliance.

                  (c) The Common Shares issued upon exercise of the Option shall
bear the following legend if required by counsel for the Company:

         THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD,  TRANSFERRED,
         PLEDGED,  HYPOTHECATED OR OTHERWISE  DISPOSED OF UNLESS THEY HAVE FIRST
         BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS  AMENDED,  OR
         UNLESS, IN THE OPINION OF COUNSEL FOR THE COMPANY, SUCH REGISTRATION IS
         NOT REQUIRED.

         10. Company Obligation.  The Company shall at all times during the term
of the Option reserve and keep available such number of Common Shares as will be
sufficient to satisfy the requirements of this Agreement, shall pay all original
issue and/or  transfer taxes with respect to the issue and/or transfer of shares
by the  Company  pursuant  hereto  and all other fees and  expenses  necessarily
incurred by the Company in  connection  therewith and will from time to time use
its best efforts to comply with all laws and regulations which in the opinion of
counsel for the Company shall be applicable thereto.

         11.      Transferability of Option.  The Option shall be transferable. 
More particularly, but without limiting the generality of the foregoing, the 
Option may be assigned, transferred or otherwise disposed of, or pledged or 
hypothecated in any way (whether by operation of law or otherwise).

         12.      Definition of Certain Terms.  As used herein, the Optionee 
shall include the individual named Optionee, as well as any successor or 
assignees.

         13.      Governing Law.  This Option Agreement shall be construed in 
accordance with and governed by the laws of the State of New York.

         14.      Conflict.  In the event of any conflict between the Plan and 
the Option, the terms of the Plan shall take precedence.
<PAGE>
         IN WITNESS  WHEREOF,  the Company has caused this  Agreement to be duly
executed  by its  officers  thereunto  duly  authorized,  and the  Optionee  has
hereunto set his hand and seal, all on the day and year first above written.

SPICE ENTERTAINMENT COMPANIES, INC.

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

AGREED TO AND ACCEPTED:

/s/ J. Roger Faherty
________________________________
J. Roger Faherty, Optionee