EMPLOYMENT AGREEMENT

                  Employment Agreement ("Agreement") made and entered as of this
1st day of January,  1997, by and between Spice  Entertainment  Companies,  Inc.
(the  "Company" or  "Employer"),  a Delaware  corporation,  and Steve Saril (the
"Executive")  (collectively the Company and the Executive are referred to as the
"Parties").

                                  INTRODUCTION

                  WHEREAS,  the Parties desire to enter into an Agreement and to
set forth herein the terms and conditions of the  Executive's  employment by the
Company. Accordingly, in consideration of the mutual covenants and agreement set
forth herein and the mutual benefits to be derived herefrom, and intending to be
legally bound hereby, the Company and the Executive agree as follows:

         1.       Employment.

                  1.1 Duties.  The Company  shall  employ the  Executive  on the
terms and conditions set forth in this Agreement,  as its Senior Vice President,
Sales & Marketing.  The Executive  accepts such  employment with the Company and
shall  perform  and  fulfill  such  duties  as are  assigned  to  him  hereunder
consistent  with his status as a senior  executive of the Company,  devoting his
best efforts and all of his professional time and attention,  to the performance
and  fulfillment  of his duties and to the  advancement of the best interests of
the  Company,  subject  only to the  direction,  approval,  and  control  of the
Company's  President and/or Chief Executive Officer,  and specific directives of
the Board of Directors of the Company  (collectively,  "Senior Management").  In
addition, and without any additional  consideration,  Executive is and/or may be
requested  to serve as a director or as an  employee  and officer of the Company
and any or all subsidiaries of the Company.  Unless  otherwise  indicated by the
context, the "Company" shall include the Company and all its subsidiaries.

                  1.2 Place of Performance. In connection with his employment by
the Company,  the Executive  shall be based at the Company's  current  corporate
facilities  located in the New York City  Metropolitan  area except for required
travel on Company business.

         2.       Term.

         The  Executive's  employment  under this Agreement shall commence as of
January 1, 1997 (the "Commencement Date") and shall continue uninterrupted up to
and  including  the hour of midnight of December 31, 2000 (the  "Term"),  unless
otherwise  terminated as provided for in Sections 7.1 or 7.3. If the Company has
not agreed to renew this  Agreement  and/or  extend the term by 90 days prior to
the expiration of the Term, the Executive may terminate  this  Agreement,  which
termination shall be for "Good Reason," as that term is defined in Section 7.4.1
below.
         3.       Compensation.

                  3.1 Base Salary. During the Term the Executive shall receive a
minimum annual salary (the "Base Salary")  payable in installments at such times
as the Company customarily pays its other senior executive employees (but in any
event no less often than twice per month), and calculated as follows:

                           3.1.1    The Base Salary to be paid to Executive 
during the Term shall be $250,000; and

                           3.1.2 For each Year after the year commencing January
1, 1997, and in conformance with Company policy, the  Company  shall  review the
Executive's  performance  and may,  in the sole determination of the Company,  
increase,  but not decrease, the Executive's Base Salary and other benefits that
the Company deems  appropriate.  (As used herein "Year" shall refer to a twelve-
month period ending December 31.)

                  3.2 Health  Insurance and Other Benefits.  During the Term the
Executive shall be provided all employee benefits provided by the Company to its
management  and  all  other  Company  salaried   employees,   including  without
limitation,  all medical  insurance and life insurance plans or arrangements and
shall be entitled to participate in all pension,  profit  sharing,  stock option
and any other employee benefit plan or arrangement established and maintained by
the Company,  all subject,  however,  to the Company  rules and policies then in
effect regarding  participation therein.  During the Term, the benefits provided
to  Executive,  as described  in the  preceding  sentence,  shall not be reduced
except in accordance with the general  reduction of such benefits  applicable to
all salaried employees generally, but then only to the extent that such benefits
are reduced for such other salaried employees.

         4.       Reimbursement of Expenses.

         The   Executive   shall  be   reimbursed   for  all  items  of  travel,
entertainment and miscellaneous  expenses which the Executive  reasonably incurs
in connection  with the performance of his duties  hereunder,  provided that the
Executive  submits to the Company on proper forms provided by the Company,  such
statements  and other  evidence  supporting  such  expenses  as the  Company may
reasonably  require  and  provided  such  expenses  meet  the  Company's  policy
concerning such matters.

         5.       Stock Options.

         The Executive is entitled to participate in all Company  employee stock
option  programs as  determined  by the Stock Option  Committee of the Company's
Board of Directors  and approved by the  Company's  shareholders  and  Executive
shall be granted  stock options on a basis  consistent  with grants to similarly
situated employees.

         6.       Vacations.

         The Executive shall be entitled to not less than four (4) weeks of paid
vacation in any calendar  year  (prorated in any Year during which the Executive
is employed hereunder for less than the entire Year).

         7.       Termination of Employment.

                  7.1 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 to 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.

                  7.2 "Totally Disabled," as used herein, shall mean a mental or
physical  condition  which in the reasonable  opinion of an independent  medical
doctor  selected  by the  Company,  subject to the  Executive's  approval,  such
approval  not to be  unreasonably  withheld,  renders  the  Executive  unable or
incompetent  to  carry  out the  material  duties  and  responsibilities  of the
Executive under this Agreement.

                  7.3  Discharge  for  Cause.  The  Company  may  discharge  the
Executive  for "Cause" upon  written  notice (as defined in Section  11.1),  and
thereby immediately terminate his employment under this Agreement.  For purposes
of this  Agreement,  the Company shall have "Cause" to terminate the Executive's
employment  if the  Executive,  in the  reasonable  good faith  judgment  of the
Company,  (i) materially  breaches any of his agreements,  duties or obligations
under this  Agreement  and has not cured such breach  within ten (10) days after
Company's  written  notice;  (ii) willfully fails to carry out a material lawful
directive  of the Board of  Directors,  the  Chairman  of the Board,  and/or the
President of the Company;  (iii)  embezzles or converts to his own use any funds
of the Company or any client or customer of the  Company;  (iv)  converts to his
own use or destroys, any property of the Company having a significant value; (v)
is in material  violation of any of the Company  policies  and/or  procedures as
identified  in the  Company  Employee  Manual;  or (vi) is  habitually  drunk or
intoxicated.  If Executive is discharged for Cause,  he shall receive only those
amounts earned but not distributed under the relevant plan,  program or practice
of the Company.  The Company and the  Executive  acknowledge  that the Company's
business may be considered  controversial  in some  localities and may result in
civil or  criminal  litigation  against  the Company  based upon  obscenity  and
similar laws. The Parties agree that,  notwithstanding  the other  provisions of
this Section,  the naming of Executive in any such suit,  and any  conviction of
Executive or plea bargain,  settlement or other  disposition of such  litigation
relating to Executive,  shall not be  considered  Cause for the  termination  of
Executive's  employment,  so long as the  conduct of  Executive  upon which such
claim was based consisted of Executive carrying out his duties in good faith and
in accordance with directions of management of the Company.

                  7.4      Termination by Executive. Executive may terminate the
Term of his employment:

                           7.4.1    either (i) upon failure by the Company to 
comply with the material  provisions  of this  Agreement, which failure is not 
cured within ten (10) days after written notice or (ii) the Company  elects  not
to renew the Term as provided in Section 2 (either of the foregoing are referred
to herein as "Good Reason") or (iii) there is a change in the Company's 
Chairman, Chief Executive Officer or President from the individual currently 
holding such titles (any such event is referred to as an "Executive Change"); or

                           7.4.2    upon a "Change in Control of the Company"  
(as defined i  Section 7.6.1  below) upon thirty (30) days' prior written notice
given at any time within eighteen (18) months after a Change in Control; or

                           7.4.3    for any reason  other than Good  Reason or  
following  a Change in  Control of  the  Company, which  termination  shall  be 
considered a "Voluntary Termination" by Executive.

                  7.5 Severance upon Termination.  If the Executive's employment
is terminated by the Company  without Cause,  or the Executive  shall  terminate
employment for Good Reason other than upon an Executive  Change or upon a Change
in Control of the Company,  then the Company  shall pay the Executive in lieu of
other damages,  an amount (the "Severance  Payments")  equal to his then current
Base Salary payable in  installments at the same time the Company pays salary to
its other senior executive  employees payable over the longer of (i) the balance
of the Term or (ii) two years (the period over which the Severance  Payments are
made is referred to as the "Severance Period"). If Executive shall terminate his
employment upon an Executive Change, then the Company shall pay the Executive in
lieu of other  damages,  an amount  equal to the  Executive's  then current Base
Salary  payable in  installments  over one year,  which  shall be the  Severance
Period.  The Company shall have no liability to make any  severance  payments as
provided  for in this  paragraph  unless  (i) the  Executive  executes a General
Release in a form  substantially  as set forth in Exhibit A attached  hereto and
(ii)   Executive   complies  with  all  provisions  in  Section  8  (Restrictive
Covenants). In addition, (i) any Company stock options not vested at the time of
termination  shall  immediately  become vested and remain  exercisable for their
term as if Executive's  employment had not been  terminated and (ii) the Company
shall  maintain  during the  Severance  Period all  employee  benefit  plans and
programs  which  the  Executive   participated  in  immediately  prior  to  such
termination other than bonus,  incentive compensation and similar plans based on
performance, provided Executive's participation is permissible under the general
terms and provisions of such plans. If Executive causes a Voluntary Termination,
he shall  receive  only  those  amounts  earned  but not  distributed  under the
relevant plan, program or practice of the Company.

                  7.6      Change In Control.

                           7.6.1    Definitions.  For  purposes of this  Section
7.6,  a "Change in  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 Act) 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 a vote of at least three-
fourths  of the directors  then still in office who were  directors at the
beginning of the period; 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  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.

                           7.6.2.   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:

                                    (1)     The Company shall pay Executive full
Base Salary through 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;

                                    (2)     In  lieu  of  any   further   salary
payments  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 sum  of (i) the  Base  Salary and (ii) cash  bonuses and  other  cash
compensation  paid to  Executive during the  12 months preceding the Termination
Date ("Termination Payment"); and

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

                           7.6.3    Certain Additional Payments by the Company.

                                    (1)     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 7.6.3 (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  thereto) 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 Payments.

                                    (2)     Subject to the  provisions  of 
Section  7.6.3(3),  all  determinations  required to be made under  this Section
7.6.3,  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 Deloitte & Touche LLP (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  Deloitte & Touche LLP 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 involved 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 Section 7.6.3 (which  accounting  firm shall
then be referred to as the Accounting Firm hereunder).  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 Section 7.6.3, 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 Section
7.6.3,  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
Section 7.6.3,  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 Section
7.6.3(3) 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.

                                    (3)     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
Executive  under this  Section 7.6.3  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 to effectively 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
         Section 7.6.3, the Company shall have the right, at its sole option, to
         assume the defense of and 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.

                                    (4)     If,   after   the  receipt   by  the
Executive of an amount advanced by the Company  pursuant to Section 7.6.3(3) 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
Section  7.6.3(3))  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 Section  7.6.3(3) 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.

         8.       Restrictive Covenants.

                  8.1 Covenant Not to Compete. 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 Executive's  employment is terminated  for Cause,  for one year following the
Termination  Date,  or for any other  reason other than the  Executive  becoming
Totally  Disabled or the Executive  terminating  his employment for Good Reason,
during the Severance  Period,  he will not, with respect to the adult television
entertainment  industry,  the adult movie 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").  For these purposes, the
adult  television  entertainment  industry  shall refer to television  channels,
networks or programming services which are or would be if operated in the United
States subject to regulation under Section 505 of the  Telecommunications Act of
1996,  regardless of the basis on which such programming is sold or the means by
which such programming is distributed.

                  8.2      Non-Disclosure of Information.  The Executive shall:

                           8.2.1    Never, directly or  indirectly, disclose  to
any person  or entity for any reason, or use for his own  personal benefit,  any
"Confidential Information" as hereinafter defined; and

                           8.2.2    At all times take all reasonable precautions
necessary  to protect  from loss or disclosure  by Executive or his subordinates
any and all documents or  other  information containing, referring, or  relating
to  such Confidential  Information.  Upon  termination of  employment  with  the
Company for any reason,  the Executive shall promptly return to  the Company any
and all documents or other tangible  property containing  referring, or relating
to such Confidential  Information,  whether prepared by him or others.

                           8.2.3    Notwithstanding   any   provision   to   the
contrary in  Section 8,  this  paragraph  shall not  apply to information  which
the Executive is called upon by legal  process  (including, without  limitation,
by subpoena or discovery  requirement)  to disclose or any information which has
become part of the public domain or is otherwise  publicly disclosed  through no
fault or action of the Executive.

                           8.2.4    For     purposes    of    this    Agreement,
"Confidential Information" shall mean any information relating in any way to the
business of the Company disclosed to or known to the Executive as a  consequence
of,  result of, or through  the  Executive's employment by the Company which may
consist of, but not be limited to, technical and non-technical information about
the  Company's  proprietary   products,  processes,  programs, concepts,  forms,
business methods,  data, any and all financial and accounting data,   employees,
marketing,    customers,  customer    lists,  and   services   and   information
corresponding   thereto  acquired  by  the  Executive  during  the  term  of the
Executive's  employment  by  the Company.  Confidential  Information  shall  not
include  any of such items  which are  published  or are  otherwise  part of the
public domain, or freely available from trade sources or otherwise.

                           8.2.5    Upon  termination of  this Agreement for any
reason,  the  Executive  shall return to a designated officer of the Company all
equipment  and/or  tangible  property  then in  the  Executive's  possession  or
custody which belongs  or relates to the Company, including, without limitation,
copies  or  reproductions  of  correspondence, memoranda,   reports,  notebooks,
drawings,  photographs,  data base, or  any  other   documents or electronically
stored  information which constitutes Confidential Information.

                  8.3 Trade Secrets - Intellectual  Property  Rights.  Executive
shall provide the Company with any  copyrightable  work, trade secrets and other
protectable  intellectual  property  developed or produced by Executive while in
the  employ of the  Company  pursuant  to this  Agreement  (collectively,  "Work
Product").

                           8.3.1    All Work Products  shall be considered works
made for hire and shall be the exclusive property of the Company and the Company
shall  be considered  the author  and/or  creator of  such  work  for  worldwide
copyright purposes and renewals and extensions thereof. The Company may request,
at its  own cost and expense,  that Executive  assist the  Company in  obtaining
worldwide patent, copyright and other property rights for the Work Product.

                           8.3.2    If Executive's  rights in  the  Work Product
cannot be assigned to the Company,  the Executive waives enforcement of all such
rights against the Company. The Executive further agrees to join in any  action,
at the Company's sole  cost and expense,  to enforce or  to procure a  waiver of
such rights.

                           8.3.3    If the rights of the Work Product  cannot be
waived  or  the Work  Product is  not  deemed a "work  for hire," the  Executive
hereby  grants the  Company  and  its  assigns a worldwide royalty-free  license
to  reproduce,   distribute,  modify,  publicly  display, sublicense and  assign
such rights in all media or distribution  technologies now known and hereinafter
developed or devised.

                           8.3.4    The Executive  hereby  appoints  the Company
as  his attorney  in fact to  execute  and file  any patent, copyright  or other
lawful application with respect to the Work Product.

                  8.4  Conflict  of  Interest.  Executive  shall  exercise  good
judgment and maintain high ethical standards in the course of his dealings so as
to preclude the  possibility  of a conflict  between the interest of the Company
and his own personal interest. Executive,  therefore, has an obligation to avoid
any activity,  agreement,  personal interest, or other relationship or situation
which:  (i) conflicts  with the Company's best interest;  (ii)  interferes  with
Executive's  responsibility  to serve  the  Company  to the best of  Executive's
ability; or (iii) gives the appearance of self dealing.

                           8.4.1    This policy  requires  that Executive  shall
not have any  relationship,  nor engage  in any  activity that  might impair the
independence  or judgment  in  the execution  of Executive's  duties.  Executive
shall not have any direct or indirect  personal financial interests in suppliers
of  property,  goods or services  that would  affect his decisions or actions on
the Company's behalf.  Executive  shall not  accept gifts, benefits,  or unusual
hospitality  that would  be  reasonably  likely to  influence  Executive  in the
performance of his duties.

                           8.4.2    If  any   possible   conflict   of  interest
situation arises, the Executive is responsible to immediately disclose the facts
to the President or Chief Executive Officer of the Company so that an evaluation
may  determine  whether a  problem  exists  and,  if so, to eliminate it.

                  8.5 Injunctive  Relief/Legal  Remedies. The Parties agree that
the remedy at law for any breach by Executive of this Agreement and specifically
the provisions of Section 8  ("Restrictive  Covenants"),  will be inadequate and
that the Company or any of its subsidiaries or other successors or assigns shall
be entitled to injunctive  relief without bond. Such injunctive relief shall not
be exclusive,  but shall be in addition to any other rights and remedies Company
or any of its  subsidiaries  or their  successors or assigns might have for such
breach.
 
                           8.5.1    The    Employee    acknowledges:   (i)  that
compliance  with   the  restrictive   provisions   contained  in  Section  8  is
necessary  to  protect  the business  and  goodwill  of  the  Company  and   its
subsidiaries,  and (ii)  that  a  breach  of  this  Agreement  will  result   in
irreparable and continuing damage to the Company, for which monetary damages may
not provide adequate relief. Consequently,  Employee agrees that in the event of
a breach or  threatened  breach of any of the  restrictive  covenants  described
herein,  the Company,  at its discretion,  shall be entitled to seek both: (i) a
preliminary  and/or  permanent  injunction  in order to prevent such damage,  or
continuation of such damage, and (ii) monetary damages as determinable.  Nothing
herein, however, shall be construed to restrict and/or prohibit the Company from
pursuing any and all other remedies; the employee acknowledges that all remedies
are cumulative.

                           8.5.2    If any legal action  arises to  enforce  the
Company's  trade secrets,  the prevailing  party shall be entitled  to recover  
any and all  damages,  as well as all costs and  expenses, including  reasonable
attorney's  fees  incurred in enforcing or  attempting to enforce the Company's 
trade secrets.

         9.       Nature of Company Business.

         Executive  acknowledges  that the  Company,  through one or more of its
affiliated  companies,  is currently  involved in (i) producing and distributing
television  networks  which feature  explicit and cable version adult movies and
features and other programming  depicting sexual situations and/or nudity,  (ii)
producing  and  distributing  adult movies and  features and (iii)  distributing
adult  telephone  "chat"  lines  and may  engage  in  other  related  businesses
(collectively, the "Adult Business"). Executive acknowledges that he will likely
be  exposed,  from time to time,  to one or more  aspects of the Adult  Business
during the  course of his  employment  by the  Company.  Furthermore,  Executive
confirms that he is currently  comfortable  working for a company engaged in the
Adult  Business and working in an  environment  where some or all aspects of the
Adult Business are present.  If, at any time,  Executive's view on the foregoing
changes or  Executive  otherwise  becomes  uncomfortable  with the nature of the
Company's business,  Executive agrees to promptly inform Senior Management.  The
Company will work with the  Executive to explore  mutually  acceptable  means of
accommodating  Executive's concerns which, both parties acknowledge,  may result
in  the  termination  of  Executive's  employment.  Termination  of  Executive's
employment  occasioned  by  Executive's  desire  not to be  associated  with the
Company  as a  result  of the  nature  of its  business  shall be  treated  as a
Voluntary Termination by Employee without Good Reason.

         10.      Arbitration.

                  10.1 Any and all disputes,  controversies  and claims  arising
out of, or relating to, this Agreement, or with respect to the interpretation of
this Agreement, or the rights or obligations of the Parties and their successors
and  permitted  assigns,  whether by  operation  of law or  otherwise,  shall be
settled and determined by  arbitration  in New York City, New York,  pursuant to
the then existing rules of the American  Arbitration  Association  ("AAA"),  for
commercial  arbitration.  Each party shall pay their own legal fees.  The losing
party shall pay the fees and costs  imposed by the AAA; if neither party clearly
prevails in the  arbitration,  the parties  shall request that the AAA appointed
arbitrator apportion the AAA's fees and costs between the parties.

                  10.2 If the  Executive  disputes  a  determination  that Cause
exists for terminating his employment  hereunder pursuant to Section 7.3, or the
Company  disputes  the  determination  that Good Reason  exists for  Executive's
termination of his employment  pursuant to Section 7.4,  either party  disputing
this  determination  shall serve the other with  written  notice of such dispute
("Dispute  Notice")  within  ten  (10)  days  after  receipt  of the  Notice  of
Termination.  Within ten (10) days thereafter,  the Executive or the Company, as
the case may be, shall in accordance  with the Rules of the AAA, file a petition
with the AAA for arbitration of the dispute.  If the Executive  serves a Dispute
Notice  upon the  Company,  an amount  equal to the  portion of the Base  Salary
Executive  would be entitled to receive  shall be placed in an  interest-bearing
escrow account mutually agreeable to the Parties by the Company,  or the Company
shall  deliver an  irrevocable  letter of credit for such amount  plus  interest
containing terms mutually  agreeable to the Parties.  If the AAA determines that
Cause existed for the termination, the escrowed funds and accrued interest shall
be released and returned to the Company. However, if the AAA determines that the
Executive  was  terminated  without  Cause or that  Executive  resigned for Good
Reason,  the Company agrees that the escrowed funds and accrued  interests shall
be released  and paid to the  Executive  within five (5) working days after such
determination.

                  10.3 The Parties  covenant  and agree that the decision of the
AAA shall be final and binding and hereby waive their right to appeal therefrom.

         11.      Miscellaneous.

                  11.1 Notices. Any notice, demand or communication  required or
permitted  under  this  Agreement  shall  be in  writing  and  shall  either  be
hand-delivered  to the other party or mailed to the addresses set forth below by
registered or certified  mail,  return receipt  requested,  or sent by overnight
express mail or courier or facsimile to such address, if a party has a facsimile
machine.  Notice  shall be  deemed  to have been  given  and  received  (i) when
hand-delivered or after three (3) business days when deposited in the U.S. Mail,
(ii) when transmitted and received by facsimile or sent by express mail properly
addressed to the other party. The addresses are:

         To the Company:

                  Spice Entertainment Companies, Inc.
                  536 Broadway, 7th Floor
                  New York, New York 10012
                  Facsimile:  (212) 226-6354
                  Attn:  President

         To the Executive:

                  Steve Saril
                  [INTENTIONALLY OMITTED]

                  The  foregoing  addresses may be changed at any time by either
party by notice given in the manner herein provided.

                  11.2   Integration;    Modification.   This   Agreement,   the
Indemnification Agreement executed contemporaneously herewith, together with the
Company's  Employee Manual in the form attached hereto as Exhibit B, constitutes
the entire  understanding  and  agreement  between the Company and the Executive
regarding  its  subject  matter,  and  supersedes  all  prior  negotiations  and
agreements or interpretations,  whether oral or written.  This Agreement may not
be  modified  except by written  agreement  signed by the  Executive  and a duly
authorized officer of the Company.

                  11.3 Binding Effect.  This Agreement shall be binding upon and
inure to the  benefit of the  parties,  including  and their  respective  heirs,
executors,  successors  and  assigns,  except  that  this  Agreement  may not be
assigned by the Executive.

                  11.4  Waiver of  Breach.  No  waiver  by  either  party of any
condition  or of the breach by the other of any term or  covenant  contained  in
this Agreement,  whether conduct or otherwise,  in any one (1) or more instances
shall be  deemed or  construed  as a further  or  continuing  waiver of any such
condition  or breach or a waiver of any other  condition,  or the  breach of any
other term or covenant  set forth in this  Agreement.  Moreover,  the failure of
either party to exercise any right  hereunder  shall not bar the later  exercise
thereof with respect to other future breaches.

                  11.5     Governing Law.  This  Agreement shall be  governed by
the internal laws of the State of New York.

                  11.6  Headings.  The  headings  of the  various  sections  and
paragraphs  have been  included  herein  for  convenience  only and shall not be
considered in interpreting this Agreement.

                  11.7  Counterparts.  This Agreement may be executed in several
counterparts,  each of which shall be deemed to be an original  but all of which
together will constitute one (1) and the same instrument.

                  11.8     Due  Authorization.  The Company  represents that all
corporate  action required to authorize the execution, delivery and  performance
of this Agreement has been duly taken.

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


                                            SPICE ENTERTAINMENT COMPANIES, INC.



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


                                            June 13, 1997
                                            ________________________________
                                            Date

                                            EXECUTIVE:

                                            /s/ Steve Saril
                                            ________________________________
                                            Steve Saril

                                            June 13, 1997
                                            ________________________________
                                            Date