Document:

Exhibit 10.1

[A portion of this exhibit has been omitted and separately filed with Securities
and Exchange  Commission  pursuant to Rule 406 promulgated  under the Securities
Act of 1933, as amended]

                                    AGREEMENT

         This Agreement  made and entered into this 9th day of July,  1999, by
and between Penn National Gaming, Inc., a Pennsylvania  corporation ("Penn") and
American Digital Communications, Inc., a Wyoming corporation ("TrackPower").

                                   BACKGROUND

         The parties have  entered  into a binding  Letter of Intent dated April
29, 1999  pertaining to the subject  matter  hereof.  The parties intend to more
fully set forth  herein the  rights and  obligations  of the  parties  under the
binding Letter of Intent.

         Penn,  through  its  subsidiaries,   Mountainview  Thoroughbred  Racing
Association   and   Pennsylvania   National   Turf  Club,   Inc.   (the  "Racing
Associations") owns and operates Penn National Race Course ("Penn National"),  a
thoroughbred racetrack located in Grantville,  Pennsylvania.  In connection with
the racing  activities  at Penn  National,  the Racing  Associations  import and
export  simulcast  signals of races  conducted at Penn National as well as races
conducted at other racetracks  throughout the United States and its territories,
possessions and commonwealths (the "Territory").  In addition, Penn, through the
Racing  Associations,  conducts a telephone  account wagering system pursuant to
Section 218 of the  Pennsylvania  Race Horse Industry  Reform Act, and the rules
and  regulations  thereunder (the  "Pennsylvania  Racing Law") pursuant to which
patrons place wagers on Penn National races and simulcast  races from throughout
North America.

         TrackPower   has  entered  into  an  agreement   with  Loral   SpaceCom
Corporation  dated January 26, 1999 (the "Skynet  Agreement")  pursuant to which
TrackPower  may distribute  programming on up to 4 channels on Loral's  Echostar
Satellite. TrackPower has determined not to distribute its programming under the
Skynet Agreement.

         TrackPower  has entered into an agreement with  Transponder  Encryption
Service  Corporation  dated June 4, 1999 (the "TESC Agreement" and together with
the Skynet Agreement,  the "Satellite  Agreements") pursuant to which TrackPower
may distribute encrypted programs on four video channels and one data channel on
certain designated satellites.

         Penn  National  desires  to  engage  TrackPower  as  the  non-exclusive
distributor  of races  conducted  at Penn  National or  simulcast  through  Penn
National pursuant to the terms and provisions hereof.

<PAGE>

         TrackPower desires to engage Penn National as its exclusive hub through
which all betting on racing programs  conducted by or through  TrackPower to any
venue in the Territory including direct television broadcast,  cable television,
Internet or other forms of distribution  of such  programming  (the  "TrackPower
Network"),  will be conducted by or through the Penn National  telephone account
wagering  system  conducted by Penn National  pursuant to the  applicable  laws.
TrackPower  has also agreed to grant Penn  National a right of first  refusal to
serve as the hub for the TrackPower Network outside the Territory.

         NOW THEREFORE,  in consideration of the mutual covenants and agreements
herein contained,  and intending to be legally bound hereby,  the parties hereto
agree as follows:

1.  Distribution

         1.1 TrackPower  represents and warrants to Penn that attached hereto as
(i)  Exhibit  A and made a part  hereof is a true and  correct  copy of the TESC
Agreement.   TrackPower  will  promptly   forward  to  Penn  any  amendments  or
modifications to the TESC Agreement. TrackPower agrees to pay and perform all of
its  obligations  under the TESC  Agreement  as and when the same become due and
will  promptly  notify  Penn of any  defaults  that exist or, upon the giving of
notice or the  running of time would exist by any party,  under  either the TESC
Agreement.

         1.2 During the term hereof,  TrackPower  shall  maintain all technology
and equipment required or necessary to produce a television program of each race
conducted at Penn National and to distribute the same on the TrackPower  Network
as well as to receive simulcasting from other racetracks and distribute the same
on the TrackPower Network. The hardware and software required in connection with
the operation of the TrackPower  Network is described on Schedule 1.2,  attached
hereto and made a part hereof. In that regard, TrackPower will maintain all such
software and hardware in a condition meeting  prevailing  industry norms so that
the programming on the TrackPower  Network will be competitive  with programming
produced by other racing networks and racetracks.

         1.3 TrackPower shall, at its cost,  maintain and operate the TrackPower
Network and all equipment and software relating thereto,  twenty fours hours per
day,  three  hundred  sixty five days per year on at least four  channels on the
designated  Satellite  (subject to acts of God,  labor disputes and other events
beyond the control of TrackPower).

         1.4  TrackPower  agrees that the  TrackPower  network  signal  shall be
encoded or otherwise  broadcast in a manner consistent with applicable laws, the
Interstate  Horse  Racing Act of 1967,  and the  requirements  of Penn and other
originating racetracks.

         1.5 TrackPower shall furnish,  at its cost,  decoders to each recipient
of the encoded TrackPower Racing Network signal from or through Penn National.

                                       2

<PAGE>

         1.6  TrackPower  agrees that Penn  National  will be the  exclusive hub
operator  for the  TrackPower  Racing  Network  and all  races  disseminated  or
distributed by TrackPower to any venue (open TV, cable  television,  Internet or
other form of  telecommunication)  in the Territory and that all betting on such
races  distributed by TrackPower  shall be conducted  through the Penn telephone
account wagering network. In addition, should TrackPower determine to distribute
the TrackPower  Network outside the Territory,  Penn National shall have a right
of first refusal, exercisable for 20 business days after notice from TrackPower,
to serve as the hub for the  area  beyond  the  Territory.  Notwithstanding  the
foregoing, in the event Penn cannot or decides not to offer any wagering product
proposed by TrackPower in any jurisdiction,  TrackPower may, if such declination
continues for seven business days after written notice from  TrackPower to Penn,
within the following 20 business days,  agree with another hub operator to offer
such wagering product in the jurisdiction specifically rejected by Penn.

         1.7 TrackPower shall be entitled to receive all subscriber fees paid by
subscribers enrolling in the TrackPower Racing Network. TrackPower agrees to use
its best efforts to maximize the number of subscribers by advertising, marketing
and promotions campaigns. TrackPower and Penn agree to use their best efforts to
develop a  marketing/advertising/promotions  campaign  plan by not later than 90
days after the date hereof.

         1.8 TrackPower  agrees to pay Autotote,  as and when due, any fees that
are incurred as a result of the interface between the TrackPower  Network system
and the Autotote system utilized at Penn National.  In the event Penn terminates
Autotote, TrackPower shall make such payments to Autotote's successor or to Penn
if such  services are provided  directly by Penn.  TrackPower  agrees to use its
best efforts to continue to develop software to be used in the TrackPower Racing
Network, which shall meet prevailing industry norms, all of which costs shall be
the responsibility of TrackPower.  TrackPower and Penn shall, from time to time,
set minimum standards and goals for such software developments.

2.  Obligations of Penn

         2.1 Penn  shall,  at its cost,  and in  consultation  with  TrackPower,
negotiate   simulcast   agreements  with  thoroughbred  and  harness  racetracks
throughout  North America to be distributed on the  TrackPower  Racing  Network.
Penn shall also be responsible for submitting  such simulcast  agreements to the
Pennsylvania  State Horse Racing  Commission for approval in accordance with the
Pennsylvania  Racing Law, if required to do so, or for complying  with any other
applicable laws.

         2.2  Penn  shall  take all  action  necessary  to seek  all  regulatory
approvals  from the  Pennsylvania  State Horse Racing  Commission  and any other
government  regulatory  body having  jurisdiction  over the  distribution of the
TrackPower Racing Network.

         2.3 Penn shall assist  TrackPower  in  formatting  and  scheduling  the
content of the TrackPower Racing Network programming.

                                       3
<PAGE>

         2.4 Penn shall use its best efforts to cause the  customers  registered
on  its  telephone  account  wagering  network  to  become  subscribers  on  the
TrackPower  Racing Network and, in that regard,  to actively  solicit and market
such transition.

         2.5 Penn shall make available to the TrackPower  Racing Network the new
Penn Players Choice player tracking system and, at its cost and expense, upgrade
and  expand  such  system  to  accommodate  the needs of the  TrackPower  Racing
Network.  Penn shall make  available to TrackPower  all available  wagering data
pertaining  to  wagering  on the  races  distributed  on the  TrackPower  Racing
Network.

         2.6 Penn shall, at its cost,  secure handheld  automated  devices (Tiny
Tim's)  distributed  through  Autotote to be leased,  without  cost,  to premium
players identified by Penn and TrackPower.

3.  Fees to TrackPower

         Penn  shall pay or cause to be paid to  TrackPower  for the  signal and
data sent to the TrackPower Network subscribers the following payments:

         3.1  While  the  TrackPower  Racing  Network  operates  on an  operator
assisted (telephone) basis, the following fees shall be payable:

SITUATION                                                 FEE PAYABLE AS A % OF
                                                          AMOUNT WAGERED

Existing Penn Telephone Account Customers                      [  ]*

New Customers - supplemental simulcast fee payable             [  ]*

New Customers - no supplemental simulcast fee payable          [  ]*

         3.2 When the TrackPower  Racing Network  operates on an automated basis
(no operator), the following fees shall be payable:

SITUATION                                                 FEE PAYABLE AS A % OF
                                                          AMOUNT WAGERED

Existing Penn Telephone Account Customers                       [  ]*

New Customers - supplemental simulcast fee payable              [  ]*

New Customers - no supplemental simulcast fee payable           [  ]*

* Confidential percentage omitted.

                                       4

<PAGE>

         3.3 The fee shall be payable monthly, by the tenth day of the following
month.  At the  time  the fee is paid,  Penn  shall  furnish  to  TrackPower  an
accounting and reconciliation for all customer accounts.

4.  Warrants.  TrackPower  shall grant to Penn a warrant (the  "Warrant") in the
form attached  hereto as Exhibit "C"  pertaining to the purchase of an aggregate
of 5,000,000  shares of  TrackPower's  common stock,  par value $0.001 per share
(the "Common Stock"),  upon the terms and conditions more fully set forth in the
Warrant.  The  Warrant  shall vest,  and shall be  exercisable  at the  exercise
prices, as set forth in the following table:

      From and after:       Number of Shares Exercisable       Exercise Price
      ---------------       ----------------------------       --------------
      April 29, 1999                 1,000,000                 $1.58/share
      April 29, 2000                 1,000,000                 $1.82/share
      April 29, 2001                 1,000,000                 $2.05/share
      April 29, 2002                 1,000,000                 $2.29/share
      April 29, 2003                 1,000,000                 $2.53/share

         The Warrant shall expire on April 30, 2004.

5.  Representations and Warranties

         5.1      TrackPower represents and warrants to Penn as follows:

                  5.1.1 Organization. TrackPower is a corporation duly organized
and  existing  under the laws of Wyoming and is qualified  and in good  standing
under  the laws of each  other  jurisdiction  in  which  such  qualification  is
necessary.

                  5.1.2  Authority.  TrackPower  has  the  requisite  power  and
authority  to own its  properties  and  assets  and  carry  on its  business  as
presently  conducted and to execute and deliver and perform this Agreement.  All
requisite  corporate  action  has been  taken by  TrackPower  to  authorize  the
execution, delivery and performance of this Agreement.

                  5.1.3 No  Contravention.  TrackPower  is not  prevented by any
law,  rule,  regulation,  order or decree from entering  into this  Agreement or
performing its obligation  hereunder.  No consent,  approval or authorization of
(or  declaration  or  filing  with)  any  governmental  agency  on the  part  of
TrackPower  is required in  connection  with the  execution and delivery of this
Agreement,  the  consummation of the  transactions  contemplated  hereby and the
performance of its obligations hereunder.

                  5.1.4  Licenses.   TrackPower  holds  and  will  maintain  all
licenses required by any governmental  body having  jurisdiction over TrackPower
and the  TrackPower  Network  with respect to the  operation  of the  TrackPower
Network and the exercise by TrackPower of its duties and obligations hereunder.

                                       5
<PAGE>

                  5.1.5 Legal  Compliance.  During the term  hereof,  TrackPower
shall at all times  abide by all  applicable  federal,  state  and  local  laws,
regulations,  rules and orders  pertaining  to the  operation of the  TrackPower
Network and the performance of its obligations hereunder.

                  5.1.6 Litigation.  TrackPower is not a party to nor threatened
by any civil or criminal  litigation  which could have a material adverse effect
on the financial or business  condition of TrackPower or limit,  in any material
way, the ability of TrackPower to perform its obligations hereunder.

                  5.1.7  Satellite  Agreements.  The TESC  Agreement  is in full
force and effect and none of the parties thereto is in default thereof. No party
to the TESC Agreement has given any formal or informal notice that another party
is in default or that any party  intends to default  under or terminate the TESC
Agreement.

                  5.1.8 No  Proceedings.  None of the  officers or  directors of
TrackPower  are or within  the past five years  have  been,  the  subject of any
government or court  proceedings which could impact the ability of TrackPower or
such officers and directors to operate the TrackPower  Network and perform their
obligations  hereunder without being in violation of any applicable law, rule or
regulation of any governmental body or any ruling of any court.

                  5.1.9  Warrants.  TrackPower  has taken all  corporate  action
necessary to authorize the grant of the Warrants to Penn pursuant to paragraph 4
hereof and,  during the term  hereof,  will reserve such number of shares of its
Common Stock for issuance  under the Warrants as are  necessary or  appropriate,
from time to time.

                  5.1.10 SEC Compliance. TrackPower has complied, and during the
term hereof will continue to be in compliance,  with the Securities Exchange Act
of 1934, as amended, and the rules and regulations  thereunder,  including,  but
not limited to,  filing all  reports  and other  documents  required to be filed
thereunder.

                  5.1.11 Continuing Representations.  TrackPower agrees that the
foregoing  representations  and  warranties  shall be  deemed  to be  continuing
representations  and  warranties  and shall  remain in full force and effect and
shall  pertain to the facts and  circumstances  existing  during the entire term
hereof.  TrackPower  shall  promptly  notify Penn of any facts or  circumstances
which arise after the date hereof  which would  constitute a violation or breach
of any such continuing representations and warranties.

         5.2      Penn represents and warrants to TrackPower as follows:

                  5.2.1  Organization.  Penn is a corporation duly organized and
existing  under the laws of  Pennsylvania  and is qualified and in good standing
under  the laws of each  other  jurisdiction  in  which  such  qualification  is
necessary.

                                       6
<PAGE>

                  5.2.2 Authority. Penn has the requisite power and authority to
own its properties  and assets and carry on its business as presently  conducted
and to execute and deliver and perform this Agreement.  All requisite  corporate
action  has  been  taken  by Penn  to  authorize  the  execution,  delivery  and
performance of this Agreement.

                  5.2.3  No  Contravention.  Penn is not  prevented  by any law,
rule,  regulation,  order  or  decree  from  entering  into  this  Agreement  or
performing its obligation  hereunder.  No consent,  approval or authorization of
(or declaration or filing with) any  governmental  agency on the part of Penn is
required in connection  with the execution and delivery of this  Agreement,  the
consummation of the transactions  contemplated hereby and the performance of its
obligations hereunder, except as provided in Section 8.5 below.

                  5.2.4  Licenses.  Penn holds and will  maintain  all  licenses
required by any governmental body having jurisdiction over Penn and the exercise
by Penn of its duties and obligations hereunder.

                  5.2.5 Legal Compliance.  During the term hereof, Penn shall at
all times abide by all applicable  federal,  state and local laws,  regulations,
rules and orders  pertaining to the operation of the TrackPower  Network and the
performance of its obligations hereunder.

                  5.2.6 Litigation. Penn is not a party to nor threatened by any
civil or criminal  litigation  which could have a material adverse effect on the
financial  or business  condition  of Penn or limit,  in any  material  way, the
ability of Penn to perform its obligations hereunder.

                  5.2.7 No  Proceedings.  None of the  officers or  directors of
Penn are or within the past five years have been,  the subject of any government
or court proceedings which could impact the ability of Penn or such officers and
directors to perform their  obligations  hereunder without being in violation of
any applicable law, rule or regulation of any governmental body or any ruling of
any court.

                  5.2.8  Continuing   Representations.   Penn  agrees  that  the
foregoing  representations  and  warranties  shall be  deemed  to be  continuing
representations  and  warranties  and shall  remain in full force and effect and
shall  pertain to the facts and  circumstances  existing  during the entire term
hereof.  Penn shall  promptly  notify  TrackPower of any facts or  circumstances
which arise after the date hereof  which would  constitute a violation or breach
of any such continuing representations and warranties.

6.  Term and Termination

         6.1 Term.  The term of this  Agreement  shall be for five years  ending
April 30, 2004.  Penn shall, at its sole  discretion,  have the option to extend
the  Term  hereof  for  an  additional  five  years   commencing  May  1,  2004.
Notwithstanding  anything herein to the contrary, the term hereof shall end upon
the termination of the TESC Agreement due to no fault of TrackPower.

                                       7
<PAGE>

         6.2 Termination  by Penn  National.  Penn National may terminate  this
Agreement for any of the following reasons:

                  6.2.1  TrackPower  shall be in default in any material respect
in the performance of any of its obligations  hereunder or otherwise commits any
material  breach of this  Agreement  and such  default  continues  uncured for a
period of thirty days after notice thereof from Penn to TrackPower.

                  6.2.2  TrackPower shall fail to maintain the TESC Agreement in
full force and effect or shall commit any breach  thereunder  which would permit
any other party thereto to terminate such Agreement.

                  6.2.3  Immediately  upon  the  occurrence  of  the  filing  by
TrackPower  of  a  petition  in  bankruptcy,   filing  a  petition  seeking  any
reorganization,  arrangement, composition or similar relief under any federal or
state law regarding insolvency or relief for debtors or making an assignment for
the benefit of creditors or the appointment of a receiver,  manager,  trustee or
similar  officer  for  the  business  or  property  of  TrackPower,  or,  if any
involuntary  petition or  proceeding  in  bankruptcy or insolvency is instituted
against  TrackPower  and not stayed or enjoined or discharged  within sixty days
thereafter.

                  6.2.4  Immediately upon the occurrence or filing of an action,
whether  administrative,  regulatory  or  otherwise,  seeking the  suspension or
termination  of any  racing  or  gaming  license  in any  jurisdiction  in which
TrackPower requires a license in order to maintain the TrackPower Racing Network
and to perform its duties and obligations hereunder.

         6.3 Termination by TrackPower.  TrackPower may terminate this Agreement
for any of the following reasons:

                  6.3.1 Penn shall be in default in any material  respect in the
performance  of  any of its  obligations  hereunder  or  otherwise  commits  any
material  breach of this  Agreement  and such  default  continues  uncured for a
period of thirty days after notice thereof from TrackPower to Penn.

                  6.3.2 Immediately upon the occurrence of the filing by Penn of
a  petition  in  bankruptcy,  filing  a  petition  seeking  any  reorganization,
arrangement,  composition  or  similar  relief  under any  federal  or state law
regarding  insolvency  or relief  for  debtors or making an  assignment  for the
benefit of  creditors  or the  appointment  of a receiver,  manager,  trustee or
similar  officer for the  business or property of Penn,  or, if any  involuntary
petition or proceeding  in  bankruptcy or insolvency is instituted  against Penn
and not stayed or enjoined or discharged thereafter.

                  6.3.3  Immediately upon the occurrence or filing of an action,
whether  administrative,  regulatory  or  otherwise,  seeking the  suspension or
termination  of any racing or gaming license in any  jurisdiction  in which Penn
requires  a  license  in  order  to  maintain  and to  perform  its  duties  and
obligations hereunder.

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<PAGE>

7.  Intellectual Property Rights

         7.1 All  intellectual  property  rights,  including  but not limited to
rights in and to patents,  copyrights,  mask work rights,  trademarks, and trade
secret  rights,  related to the  equipment,  hardware,  software,  tradenames or
trademarks  directly  or  indirectly  provided  by  either  party  under  or  in
connection with this Agreement at any time during the term (including extensions
thereof), belong and shall continue to belong exclusively to the party providing
the same.

         7.2 Each party shall  immediately  notify the other if it ever  becomes
aware of any  impairment or  infringement,  or imminent  threat of impairment or
infringement,  of the other's rights. Neither party shall take any steps against
any  alleged  infringer  unless and until  requested  to do so in writing by the
provider of the rights; provided, however, that if the owner of the rights fails
to take action as to any  infringement  that has or is likely to have a material
adverse effect on the operation of the TrackPower Network,  the other may, after
the giving of at least  fourteen  days prior written  notice to the owner,  take
reasonable  action to stop or abate the  infringement at the owner's expense and
the owner will cooperate in any such action.

         7.3 This Section 7 shall survive the  termination or expiration of this
Agreement without time limitation.

         7.4 License of Intellectual Property.

                  7.4.1 Each party hereby grants to the other the  non-exclusive
right,  license and  authority to use each such party's  respective  trademarks,
service  marks,  trade names,  logotypes  and variances  thereof  (collectively,
"Marks") in connection  with the  advertising  and  promotion of the  TrackPower
Network.

                  7.4.2  Penn and  TrackPower  have each  granted  the other the
non-exclusive  right,  license and  authority to use each such party's Marks and
acknowledge  and agree  that it is  essential  to the  proper  marketing  of the
products  and  services  offered  by each of them  and to the  preservation  and
promotion of the excellent  reputation  and acceptance by the public at large of
the goods and services  offered by each of them,  and the goodwill and integrity
of each  party's  respective  Marks that high  uniform  standards of quality and
service be maintained, and that uniform display of each party's respective Marks
be used in the  distribution  of such  products  and  services  to the public at
large. Accordingly,  Penn and TrackPower each covenant and agree, as part of the
consideration for the execution of this Agreement, as follows:

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<PAGE>

                  7.4.2.1 The right to use the Marks of the other party  granted
under  Section  7.4.1  above are  personal  to such  party  and  cannot be sold,
assigned, transferred,  hypothecated, pledged, liened, charged or encumbered, in
whole or in part, except in accordance with the terms of this Agreement;

                  7.4.2.2 Each party has the sole and exclusive right to use its
Marks  (except for certain  rights  granted  under  existing and future  license
agreements and for the rights granted hereunder) and neither party shall, during
the term of this  Agreement  nor after the  expiration  or  termination  hereof,
directly or indirectly  impugn,  contest,  or aid or permit any act impugning or
contesting the validity of the other party's Marks or take any action whatsoever
in derogation of the other party's Marks nor shall either party assert any claim
to the  goodwill,  reputation  or  ownership  thereof  by virtue of the  license
granted hereunder.

                  7.4.2.3 Each of Penn and TrackPower  will  advertise,  promote
and display the Marks of the other only in the manner  specified  or approved in
writing by such other party.  Each party shall  advertise the Marks of the other
only in a professional and responsible manner and no advertising or other use of
such other party's  Marks shall contain any statement or material  which may, in
the sole subjective judgment of such other party, be misleading, in bad taste or
inconsistent with such other party's marketing strategy or public image.

                  7.4.2.4 Each of Penn and TrackPower acknowledge and agree that
nothing  contained in this Agreement shall give either of them any right,  title
or interest in or to the Marks of the other,  except the right to use such Marks
in strict accordance with the terms of this Agreement. Each party further agrees
that any and all  goodwill  associated  with the Marks,  including  any goodwill
which may be  deemed to arise  from the use by a party of the Marks of the other
party,  inures  directly  and  exclusively  to such other  party and no monetary
amount shall be assigned or attributed to any goodwill associated with a party's
use of the Marks of the other party.

                  7.4.2.5 Each party will promptly notify the other, in writing,
of any  infringement  or potential  infringement  of such other party's Marks of
which it has  become  aware.  Neither  party  shall  have any right to bring any
action or proceeding relating to such infringement or potential  infringement of
the other party's Marks or which involves, directly or indirectly, any issue the
litigation  of which may affect the  interest  of such other party in its Marks,
without the express prior written consent of such other party; and

                  7.4.2.6 On the termination of this Agreement, each party shall
immediately  and completely  discontinue  all use of the other party's Marks and
shall not thereafter operate or do business under any trademark, service mark or
trade name or in any manner or style  that may tend to give the  general  public
the  impression  that  it  is,  either   directly  or  indirectly,   associated,
affiliated, licensed by or related to the other party.

                                       10
<PAGE>

8.  Miscellaneous

         8.1 Entire Agreement.  This Agreement contains the entire agreement and
understanding  between the parties  hereto  with  respect to the subject  matter
hereof and supersedes all prior or  contemporaneous  agreements  with respect to
such subject matter.

         8.2 Binding  Nature.  This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective  successors and permitted
assigns.  Neither party shall assign any of its obligations  hereunder,  without
the express  written  permission  of the other party,  except to an affiliate of
such party.

         8.3 Amendments. This Agreement may not be modified or amended except in
writing signed by each of the parties hereto.

         8.4 Dispute Resolution. Any dispute arising hereunder shall be resolved
by  arbitration  in  Philadelphia,  Pennsylvania  before a single  arbitrator in
accordance  with the  rules of civil  arbitration  of the  American  Arbitration
Association. The decision or award of the arbitrator shall be final, binding and
conclusive on the Parties hereto and may be entered for enforcement in any court
having jurisdiction.

         8.5 Racing  Commission  Approval.  This Agreement  shall not be binding
upon  either  party  unless  and until the same  shall  have been filed with the
Pennsylvania  State Horse Racing Commission and, if necessary,  approved by such
Commission.

         8.6 Notices. All notices, demands and requests of any kind which either
party may be  required  or may  desire to serve upon the other  party  hereto in
connection with this Agreement shall be delivered only by courier or other means
of  personal  service,  which  provides  written  verification  of receipt or by
registered or certified mail return receipt  requested (the "Notice").  Any such
Notice or demand so delivered by registered  or certified  mail or courier shall
be deposited in the United  States  mail,  or in the case of courier,  deposited
with the courier,  with postage  thereon  fully  prepaid.  All Notices  shall be
addressed to the parties to be served as follows:

              (a)  If to Penn:               Copy to:

Joseph A. Lashinger, Jr., Esquire       Robert P. Krauss, Esquire
Penn National Gaming, Inc.              Mesirov Gelman Jaffe Cramer & Jamieson,
825 Berkshire Boulevard                 LLP
Suite 200                               1735 Market Street
Wyomissing, PA  19610                   Philadelphia, PA  19103
Fax No.:  (610)  373-4966               Fax No.:  (215)  994-1111

                                       11
<PAGE>

    (b)      If to TrackPower:                           Copy to:

_______________________________                 _______________________________

_______________________________                 _______________________________

_______________________________                 _______________________________

_______________________________                 _______________________________

                  Either of the parties  hereto may at any time and from time to
time change the address to which notice shall be sent hereunder by notice to the
other party given under this Section. All such notices,  requests,  demands, and
other  communications shall be effective when received at the respective address
set forth above or as then in effect pursuant to any such change.

         8.7 Governing Law. This Agreement shall be construed in accordance with
and governed by the  internal  laws of the  Commonwealth  of  Pennsylvania  with
respect to contracts made and performed in the Commonwealth.

         8.8  Relationship  of the Parties.  This  Agreement does not constitute
TrackPower and Penn as partners,  joint  venturers or make TrackPower or Penn an
agent of the other.

         8.9  Public  Announcements.  No  public  announcement  relating  to the
existence of this Agreement or the matters  contemplated  by this Agreement will
be made without the prior approval of the other party,  which approval shall not
be unreasonably withheld.  Notwithstanding the foregoing,  either party may make
such public  announcements,  after  notifying the other,  as are required by the
securities laws pertaining to the trading of the Common Stock of either party.

         8.10  Counterparts.  This  Agreement  may be  executed in any number of
counterparts,  each of which when so executed will be deemed an original and all
of which when taken  together shall be one in the same  instrument.  One or more
counterparts of this Agreement may be delivered by facsimile  transmission  with
the  intention  that it or they will have the same effect as the  delivery of an
original counterpart hereof.

         8.11 Force Majeure.  Neither  TrackPower nor Penn will be liable to the
other for any  failure or delay in  performance  hereunder  if and to the extent
such  failure  or delay was due to a cause  beyond  the  reasonable  control  of
TrackPower or Penn, as the case may be, including,  without limitation,  acts or
failure to act of governmental  authorities or others whose actions are required
by law, strikes,  lockouts and other labor disturbances,  riot, insurrection or,
electrical or cable failure, and/or acts of God (force majeure). The party whose
performance  is prevented or delayed by an event of force  majeure will promptly
give  notice  to the  other  of the  occurrence  of such an  event  and will use
commercially  reasonable  efforts to remove such event as soon as  possible  and
thereafter  resume  performance  in  accordance  with the terms  and  provisions
hereof.

                                       12
<PAGE>

         8.12 Severability. In the event any term or provision of this Agreement
becomes or is  declared  by a court of  competent  jurisdiction  to be  illegal,
invalid or  unenforceable,  such  provision  shall be deleted and this Agreement
shall continue in full force and effect without such provision; provided that no
such deletion will be effective if it materially changes the economic benefit of
this Agreement to either party hereto.

         8.13  Further  Assurances.  The  parties  acknowledge  that the subject
matter hereof  pertains to a new and developing  technology.  Accordingly,  each
party agrees to cooperate with the other, in good faith, to resolve any disputes
between  themselves or with third parties  arising out of or in connection  with
the performance of any duty or obligation hereunder.

         8.14 Audit.  TrackPower  shall permit Penn or any  governmental  agency
having jurisdiction over the conduct of the TrackPower Network to review,  audit
and copy any records of TrackPower pertaining to TrackPower  subscribers and the
betting activity of such subscribers upon reasonable notice to TrackPower.

         IN WITNESS WHEREOF,  the undersigned have executed this Agreement as of
the day and year first above written.

                                          PENN NATIONAL GAMING, INC.

                                          BY:___________________________

                                          AMERICAN DIGITAL COMMUNICATIONS, INC.

                                          BY:___________________________

                                       13

<PAGE>

Sent Via Fax and First Class Mail
---------------------------------

                                                     July 20, 1999

Mr. John Simmonds - Chairman/CEO
Mr. Graham Simmonds - Director/Bus. Development
American Digital Communications
580 Granite Court
Pickering, Ontario
Canada LIW3Z4

Dear John and Graham:

         This  Letter  Agreement  is  designed  to act as a  binding  amendatory
agreement between Penn National Gaming, Inc. and American Digital Communications
(t/a TrackPower,  Inc.).  This agreement is designed to coordinate with terms of
an earlier  agreement  entered  into by the same  parties  on July 9, 1999.  The
agreement of July 9th is commonly referred to as the "hubbing  agreement".  This
agreement shall be known as Addendum #1.

         Whereas,  the hubbing  agreement dealt with product  controlled by Penn
National,  this  agreement  deals with product that grows out of an  arrangement
originated by  TrackPower.  This  agreement  relates  solely to the Irish Racing
Product  along  with the  Racing  Channel  and  Channel 4 racing  product  being
broadcast from the United Kingdom and/or the Republic of Ireland. Therefore, the
only material  changes shall be to those economic terms of the original  hubbing
agreement.

          In consideration  of TrackPower  obtaining the exclusive rights to the
in-home distribution of the aforementioned British and Irish racing product into
the United States;  and in  consideration  of Penn's agreement to act as the hub
operator for this product in the

<PAGE>

United States,  the parties have mutually agreed to the following economic terms
for this product only:

                  1.       The first  __%* of  takeout  will be  applied  to the
                           United Kingdom tote fee.

                  2.       The next payment from takeout will be for pari-mutuel
                           taxes in the state licensing jurisdiction  (estimated
                           at __%*).

                  3.       TrackPower  shall  remain  responsible  for any  fees
                           payable for the  exclusive  in-home  rights that they
                           have obtained.

                  4.       Following  the  payment  of the UK tote fee and those
                           pari-mutuel  taxes  levied  by  the  state  licensing
                           jurisdiction  in the United States,  there shall be a
                           __%/__%* split of the  balance  amount  between  Penn
                           National Gaming, Inc. and American Digital
                           Communications.

                  5.       Penn  shall  have  non-exclusive  rights  to use this
                           product  throughout  their  racing  system,  such  to
                           include,  but  not be  limited  to,  its  racetracks,
                           off-track network and any Internet service,  which it
                           may own and operate.

         Parties hereto agree that this is the entire agreement and there are no
additional terms or agreements.

         It is agreed that the parties  executing this agreement  shall have the
authority to execute this agreement.

         This  agreement may not be modified or amended except in writing signed
by each of the parties hereto.

         All material  non-financial  covenants,  representations and warranties
contained in the hubbing agreement are incorporated herein by reference.

* Confidential Percentage Omitted.

<PAGE>

         All notices, demands and requests of any kind which either party may be
required or may desire to serve upon the other party hereto in  connection  with
this  Agreement  shall be  delivered  only by courier or other means of personal
service,  which  provides  written  verification  of receipt or by registered or
certified  mail return  receipt  requested  (the  "Notice").  Any such notice or
demand  so  delivered  by  registered  or  certified  mail or  courier  shall be
deposited in the United States mail, or in the case of courier,  deposited  with
the courier,  with postage thereon fully prepaid. All notices shall be addressed
to the parties to be served as follows:

     (a)    If to Penn:                                    Copy to:

            Joseph A. Lashinger, Jr., Esq.            Robert P. Krauss, Esq.
            Penn National Gaming, Inc.                Mesirov, Gelman, Jaffe,
            825 Berkshire Blvd., Suite 200            Cramer & Jamieson, LLP
            Wyomissing, PA 19610                      1735 Market Street
            Fax No.: (610) 373-4966                   Philadelphia, PA 19103
                                                      Fax No.: (215) 994-1111

     (b)    If to TrackPower                          Copy to:

            Graham Simmonds                           John Simmonds
            TrackPower, Inc.                          TrackPower, Inc.
            580 Granite Court                         580 Granite Court
            Pickering, Ontario                        Pickering, Ontario
            Canada LIW3Z4                             Canada LIW3Z4

         This  agreement  shall not be binding  upon either party until the same
shall be submitted to the appropriate licensing jurisdiction  commission and, if
necessary, approved by such commission.

<PAGE>

         The execution of this document by the  responsible  corporate  officers
shall be binding upon the parties, their successors and assigns.

                                           Very truly yours,

                                           PENN NATIONAL GAMING, INC.

                                           By: ___________________________
                                               Name:
                                               Title:

                                           AMERICAN DIGITAL COMMUNICATIONS

_______________________                    By: ___________________________
Witness                                        Name:  John Simmonds
                                               Title: Chairman/CEO

<PAGE>

                                                     October 1, 1999

Mr. John Simmonds - Chairman/CEO
Mr. Graham Simmonds - Director/Bus. Development
TrackPower, Inc.
580 Granite Court
Pickering, Ontario
Canada LIW3Z4

Dear John and Graham:

         This is an Addendum Agreement identified as Addendum #2 to the original
Hubbing   Agreement  of  July  9,  1999  between  Penn  National  Gaming,   Inc.
(hereinafter  referred to as "Penn") and TrackPower,  Inc. (hereinafter referred
to as  "TrackPower")  (collectively  the "Parties").  It is the intention of the
parties hereto to define the rights,  duties and  responsibilities  between Penn
and  TrackPower  as a result of a separate  agreement  entered into between eBet
Limited (Australia) and Penn National Gaming, Inc.  (hereinafter  referred to as
"eBet Agreement").

         The eBet  Agreement  will provide  interactive  wagering  technology to
Penn. It is Penn's desire to have TrackPower  benefit as a participant under the
eBet Agreement.

         Penn has formed a wholly-owned  subsidiary  known as eBetUSA,  Inc. The
operating license created under the eBet Agreement for the interactive  wagering
technology will reside with eBetUSA; and, whereas

         TrackPower plans to maintain a separate and distinct wagering site on a
closed-loop  subscriber  based  service  across the Internet and agrees to offer
such in compliance with all applicable  laws,  rules and regulations as directed
by Penn and will complete such at its own cost; and

         Penn has agreed to allow  TrackPower to participate as permitted  under
the terms of the eBet agreement (attached hereto); and

<PAGE>

         The Parties hereto agree that TrackPower will  hereinafter have two (2)
types of  subscribers;  the first  being  identified  as a EchoStar  Interactive
subscriber, and the second being identified as a PC subscriber; and

         The Parties hereto agree that both subscribers  will eventually  employ
the interactive wagering technology for sending,  receiving and wagering-related
data; and

         WHEREFORE,  the Parties hereto agree that the  applicable  terms of the
eBet Limited/Penn  National Gaming, Inc. agreement shall be incorporated herein.
The eBet  Participation  Agreement  has a ___ percent (__%)* based licensing fee
payable by eBetUSA,  Inc. to eBet  Limited for use of the  interactive  wagering
technology. It is agreed that this licensing fee is no longer required under the
terms of an equity  conversion by eBet Limited in eBetUSA,  Inc. and when and if
that occurs, the TrackPower liability hereunder shall also terminate; and

         THEREFORE,  Penn and  TrackPower  hereby agree that for the period that
eBetUSA,  Inc., Penn or any of its other  subsidiaries,  is obligated to pay the
base  licensing fee to eBet Limited,  TrackPower  will pay,  within fifteen (15)
days following the close of each month, to eBetUSA, Inc. the following

                                                            EchoStar Interactive
                                     PC Subscriber                Subscriber
                                     -------------                ----------
         Existing Telebet Account         ___%*                      ___%*
         Customer

         New Telebet Account              ___%*                      ___%*
         Customer, Supplemental
         Simulcast Fee Payable

         New Telebet Account              ___%*                      ___%*
         Customer, Supplemental
         Simulcast Fee Not Payable

         The Parties  further  agree that the  percentages  defined in the above
table shall apply to all gross wagering revenue placed  interactively using eBet
Limited's  interactive wagering technology.  In the case of any wagering revenue
placed by TrackPower

* Confidential percentage omitted.

<PAGE>

subscribers over the telephone to Telebet phone  operators,  no license fee will
be payable but this shall not alter the existing agreement between Parties as to
these customers.

         The Parties  additionally  agree that this Addendum is conditioned upon
the approval of all relevant regulatory authorities.

         The Parties agree that the terms of the original Hubbing  Agreement and
Addendum #1 are incorporated with the terms of this Addendum Agreement.

         The  Parties  agree that the person  executing  this  agreement  is the
responsible and fully authorized party to enforce this transaction; and

         It is agreed that this  agreement  shall be binding  upon the  parties,
their heirs, successors and assigns (where permitted).

         It is agreed hereto this ____ day of October, 1999.

                                      Very truly yours,

                                      PENN NATIONAL GAMING, INC.

                                      By: ___________________________
                                          Name:
                                          Title:

                                      TRACKPOWER, INC.

________________________              BY: ___________________________
Witness                                   Name:
                                          Title:EXHIBIT 10.2

[A  portion of this  exhibit  has been  omitted  and  separately  filed with the
Securities and Exchange  Commission  pursuant to Rule 406 promulgated  under the
Securities Act of 1933, as amended]

                            SATELLITE CAPACITY LEASE

         This Satellite  Capacity Lease (the "Lease" or  "Agreement"),  is made
and effective as of this Fourth (4th) day of June, 1999, by and between American
Digital  Communications,  Inc.,  a  Wyoming  corporation  ("Network"),  having a
principal  place of business at 745 Fifth avenue,  suite 900, New York, New York
10151,  and  Transponder  Encryption  Services  Corporation  ("TESC"),  having a
principal  place of business at 90 Inverness  Circle East,  Englewood,  Colorado
80112.

RECITALS

         A.  Network is in the  business  of  producing  and/or  distributing  a
certain video programming  service ("Video  Programming  Service") and a certain
data programming  service ("Data  Programming  Service") (the Video Programming
Service and the Data Programming Service are sometimes  collectively referred to
herein as the "Programming  Service", as more particularly  described in Section
1.3.1 below) for viewing by end-users  located in the  Territory  (as defined in
Section 1.4 below).

         B. TESC is in the business of  distributing  programming  services in a
digitally-compressed  and encrypted  format via satellites  using Ku-Band and/or
Ka-Band frequencies (the "DTH System").

         C. Network desires to lease four video channels and one data channel of
capacity  on the DTH System  for the  purpose of  transmitting  the  Programming
Service in a digitally  encrypted format for receipt on a subscription  basis by
end-users in the Territory via one or more Ku-Band and/or KaBand satellite(s) to
be selected by TESC from time to time in its sole  judgment  (any of which shall
be hereinafter referred to as the "Satellite"), which are directly or indirectly
owned  and/or  operated  in whole or in part by TESC and are located at the 61.5
degrees west longitude orbital position.

         D. Subject to the terms and conditions set forth below,  TESC agrees to
allow  Network  to lease  such  capacity  on the  Satellite  for the  purpose of
transmitting the Programming Service in a digitally encrypted format for receipt
on a subscription basis by end-users in the Territory.

<PAGE>

         NOW,  THEREFORE,  in  consideration  of the  mutual  promises  and  the
covenants hereinafter set forth, and for other good and valuable  consideration,
the receipt of which is hereby acknowledged, Network and TESC agree as follows:

1.     LEASE

         1.1 Service Subscribers.  A "Service Subscriber" is hereinafter defined
to mean any customer in the Territory  which  receives any portion or all of the
Programming  Service  from the  Satellite  in an  encrypted  format.  A  Service
Subscriber  may  include,  but shall not be limited  to,  hotel and motel  guest
rooms,  private  offices,  and patient rooms in hospitals.  For  residential  or
commercial  Service  Subscribers,  each  single  residential  dwelling  unit  or
commercial  establishment  regardless of the number of televisions or integrated
receiver-decoders  ("IRDs") within the unit or establishment that are authorized
to  receive  the  Programming  Service  shall be deemed  to be a single  Service
Subscriber.  For hotel/motel rooms,  hospital patient rooms and private business
offices,  each television authorized to receive the Programming Service shall be
deemed to be a single Service Subscriber.  For bulk-billed Service  Subscribers,
the  number  of  Service  Subscribers  per  account  shall be  determined  on an
equivalent  billing unit basis,  assuming one hundred percent (100%) penetration
Notwithstanding  the foregoing,  the following  subscribers  to the  Programming
Service shall not be considered "Service Subscribers":  (a) TESC's and/or any of
its Affiliates'  test sites;  (b) TESC's and/or any of its Affiliates,  retailer
showrooms; and (c) employees of TESC and/or any of its Affiliates.  For purposes
of this Lease,  "Affiliate" shall mean, with respect to a person or entity,  any
other person or entity  directly or  indirectly  controlling,  controlled  by or
under common control with such person or entity.

           1.2    Grant of Rights

                  1.2.1.1 By TESC.  Subject to the terms and  conditions of this
Lease,  TESC hereby agrees to lease four (4) video  channels,  at  approximately
three (3) megabits per second each,  of capacity on the Satellite to Network for
the sole purpose of transmitting  the Video  Programming  Service in a digitally
compressed and encrypted format (or any other transmission  method determined by
TESC in its sole discretion) on a twenty-four (24) hour per day, 7 days per week
subscription  (as opposed to a transaction,  demand  purchase,  pay-per-view  or
pay-per-block)  basis to end-users  in the  Territory  without any  transport or
"bulk" rights granted or permitted.

                  1.2.1.2  Subject to the terms and  conditions  of this  Lease,
TESC hereby agrees to lease one (1) data  channel,  at up to one (1) megabit per
second,  of  capacity  on the  Satellite  to  Network  for the sole  purpose  of
transmitting  the  Data  Programming  Service  in  a  digitally  compressed  and
encrypted  format (or any other  transmission  method  determined by TESC in its
sole discretion) on a multiple-hour  per day format 7 days per week subscription
(as opposed to a transaction,  demand purchase,  pay-per-view or  pay-per-block)
basis to  end-users in the  Territory  without any  transport  or "bulk"  rights
granted or permitted.

<PAGE>

                  1.2.2 By Network.  Subject to the terms and conditions of this
Lease,  Network grants TESC the rights to: (i) offer and sell  subscriptions  to
any or all  portions  of the  Programming  Service  to  residential,  commercial
(public and private), SMATV, hotel/motel and other bulk-billed subscribers; (ii)
authorize and deauthorize IRDs to receive any or all portions of the Programming
Service for residential, commercial (public and private), SMATV, hotel/motel and
other bulk-billed subscribers; and (iii) to transport any or all portions of the
Programming  Service to  residential  complexes,  apartment  buildings and other
multi-unit  residential and business office complexes;  hotels, motels and other
places of public lodging; hospitals,  nursing homes and other health and medical
care facilities;  prisons, reform schools and other correctional facilities,  in
each case previously set forth in this subsection  (iii) served by a centralized
receiving antenna or "SMATV" system. Network represents and warrants that it has
all rights necessary to grant TESC the rights  contracted for by TESC under this
Lease,  including but not limited to transmitting  and  transporting  any or all
portions  of  the   Programming   Service  and   activating   and   deactivating
subscriptions to any or all portions of the Programming Service.

           1.3    Programming Service

                  1.3.1 The Programming  Service is comprised of the programming
elements set forth on the  Programming  Schedule  attached  hereto as Exhibit A,
which is incorporated herein by this reference.  Network acknowledges and agrees
that the Programming Service will not directly or indirectly  advertise,  market
promote or otherwise reference any distributor of programming  services which is
not owned and/or operated by TESC and/or its Affiliates.

                  1.3.2 If there is a material change in the programming content
set forth in Exhibit A hereto,  as  determined  in TESC's  reasonable  judgment,
Network must notify TESC in writing at least thirty (30) days in advance of such
programming  content  change.  In  addition,  Network  must  provide  TESC  with
sufficient  proof as  determined  in TESC's  reasonable  judgment,  of  Networks
license  rights to the new  content  upon  request.  In the  event  that the new
programming lineup does not contain substantially similar content as the initial
programming  lineup set forth in Exhibit A hereto,  TESC shall have the  option,
exercisable in its sole  discretion,  to cease  transmission  of the Programming
Service  effective thirty (30) days after delivery of written notice to Network.
In the  event  that  Network  does not  provide  TESC with  sufficient  proof of
Networks  license  rights to the new content  upon  request  TESC shall have the
option,  exercisable  in  its  sole  discretion  to  cease  transmission  of the
Programming  Service  effective  immediately  upon delivery of written notice to
Network.  In the event that TESC ceases  transmission of the Programming Service
pursuant to this Section 1.3.2, this Lease shall  automatically  terminate.  Any
such termination shall be Without prejudice to any other rights or remedies that
TESC might have under this Lease, at law, in equity or otherwise.

                  1.3.3 Telecast Scheduling.  TESC shall have the absolute right
but not the  obligation  to transmit  any content it deems  appropriate,  on any
channel or channels during any time period in which no content has been provided
by Network for transmission  during such time, or if the content supplied is not
transmitted by TESC because of poor transmission  quality,  technical  problems,
non-payment,  a refusal by TESC to transmit the content  provided

<PAGE>

by Network for any of the reasons  set forth in Section  10.2,  or for any other
reason.  TESC shall have the absolute right but not the obligation,  in its sole
discretion,  to blackout or to refrain from blacking out any  programming in any
market at any time.

                  1.4  Territory.  The  "Territory"  shall  mean the  geographic
boundaries  of  the  United  States  and  its  territories,   possessions,   and
commonwealths. TESC is hereby authorized to distribute, exhibit or authorize any
third party to distribute  or exhibit the  Programming  Service,  in whole or in
part, to any location in the Territory,  subject to all applicable  laws,  rules
and regulations, including without limitation the laws, rules and regulations of
the U.S. Government, the government of any foreign country, and their respective
agencies.

2. TERM This Lease  shall  commence  on the date first  written  above and shall
continue for four (4) years  thereafter,  unless  terminated  sooner as provided
herein (the "Term").  TESC will use  reasonable  commercial  efforts to commence
transmitting  the  Video  Programming  Service  via the  Satellite  for  revenue
generating  purposes by July 1, 1999 (the  "Commencement  Date").  TESC will use
reasonable  commercial  efforts to commence  transmitting  the Data  Programming
Service via the Satellite for revenue  generating  purposes  within a reasonable
period  of time  following  Network's  delivery  of the data  signal  to  TESC's
Affiliate's Uplink Facility.  Network agrees that upon the expiration or earlier
termination  of this  Lease,  if TESC  has  already  sold  subscriptions  to the
Programming Service,  then, at Tesac's option, Network shall continue to provide
TESC the Programming  Service under the terms and conditions outlined herein for
a period of time ("Programming Service Extension") that is the shorter of twelve
(12)  months  or that  number  of  months  necessary  for  TESC to  provide  the
Programming Service to Service Subscribers who bought a multi-month subscription
to the Programming Service prior to the receipt by TESC of notice of termination
of the Lease. Network's obligation to pay Base Rent under Section 3.2 below will
not apply during a Programming Service Extension.

3.       RENT AND RESIDUAL REVENUES,  RESIDUAL THIRD PARTY DATA REVENUES; RETAIL
         PRICE OF PROGRAMMING; PAYMENTS AND DUE DATES

         3.1      Rent and Residual Revenues.

                  3.1.1  Subject  to the right  hereby  granted  to TESC and its
Affiliates  to offset any amounts due to Network  hereunder  against any amounts
due to TESC and/or any of its Affiliates  from Network or any Affiliate  thereof
(including without limitation the payment of Base Rent under Section 3.2 below),
TESC shall be entitled to retain [ ](1)  percent of Video  Programming  Service
Revenues  (as defined in Section  3.1.2  below) from each  Reporting  Period (as
defined in Section 3.3.1 below) as rent ("Video  Rent") and the remaining [ ](2)
percent  shall be  payable to  Network  (the  "Residual  Video  Revenues").  For
example, if [ ]: (3).

-----------------
(1) Confidential number omitted

(2) Confidential number omitted

(3) Confidential paragraph omitted

<PAGE>

                  3.1.2 "Video  Programming  Service  Revenues" for a particular
Reporting  Period shall be calculated  by  multiplying  the then current  retail
price per  month  for a  single-family  subscription  to the  Video  Programming
Service by the  average of the sum of (a) the number of Service  Subscribers  to
the Video  Programming  Service  as of the last day of the  Reporting  Period in
question;  and (b) the number of Service  Subscribers  as of the last day of the
immediately  preceding  Reporting Period. For example,  if. (i) there are 30,000
Service Subscribers as of the last day of the Reporting Period in question; (ii)
20,000  Service  Subscribers  as of the  last day of the  immediately  preceding
Reporting  Period;  and (iii)  the  retail  price per month for a  single-family
subscription  to the Video  Programming  Service is $24.99,  then there would be
$624,750 in Video  Programming  Service  Revenues  for the  Reporting  Period in
question,  which is equal to $24.99 (the then current retail price per month for
a single-family subscription to the Video Programming Service) times 25,000 (the
average  of the sum of number of Service  Subscribers  as of the last day of the
current  Reporting  Period and the number of Service  Subscribers as of the last
day of the immediately  preceding  Reporting Period or (30,000 + 20,000) divided
by 2).

                  3.2.1  Subject  to the right  hereby  granted  to TESC and its
Affiliates  to offset any amounts due to Network  hereunder  against any amounts
due to TESC and/or any of its Affiliates  from Network or any Affiliate  thereof
(including without limitation the payment of Base Rent under Section 3.4 below),
TESC shall be entitled to retain [ ](4)  percent of Data  Service  Revenues  (as
defined  in Section  3.2.2  below)  from each  Reporting  Period (as  defined in
Section  3.3.1  below) as rent ("Data  Rent") and the  remaining [ ](5)  percent
shall be payable to Network (the "Residual Data Revenues").  For example,  if; [
](6).

                  3.2.2  "Data  Service  Revenues"  for a  particular  Reporting
Period shall  include all  revenues  generated by Network on or from the Network
Data Programming on the Service  including,  but not limited to, advertising and
sponsorship,  electronic  or other  commerce,  and/or  products and services for
which a Service Subscriber pays (including subscriptions, if any) Network a fee.
Notwithstanding anything to the contrary contained herein, Data Service Revenues
shall not include  revenues  derived  from data  related to gambling or wagering
activities.

                  3.3-1 "Reporting Period" for all Programming  Service Revenues
means the period  between the 22nd day of one calendar month and the 21st day of
the following calendar, as such Reporting Period may change from time to time in
TESC's sole  discretion.  The Video  Programming  Service  Revenues and the Data
Programming  Service Revenues are sometimes  collectively  referred to herein as
the Programming Service Revenues.

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(6) Confidential paragraph omitted

<PAGE>

                  3.3.2 Notwithstanding  Sections 3.1.2 and 3.2.2, TESC shall be
entitled to adjust  Programming  Service Revenues for any given Reporting Period
to account for: (i) differences  between Programming Service Revenues previously
calculated and Programming  Service  revenues  actually  collected by TESC; (ii)
Programming  Service  refunds and credits  that have  previously  been issued by
TESC;  and/or  (iii)  sales  tax  assessed  on  Programming  Service  that  has
previously been remitted by TESC. Network  acknowledges and agrees that revenues
actually  collected by TESC from a particular  Service  Subscriber will first be
applied  towards the payment of  outstanding  balances  due for any DISH Network
programming  services  purchased  by that  Service  Subscriber  and then will be
applied  towards the payment of any  outstanding  balance due from that  Service
Subscriber for the Programming Service.

         3.4     Base Rent

                  3.4.  Base  Video  Rent.  In  addition  to any  other  amounts
specified  herein,  Network  agrees to pay TESC US$[ ](7) per calendar month for
transmission of the Video Programming  Service (the "Base Video Rent"). The Base
Video Rent  payment  for each  calendar  month  during the Term shall be due and
payable  in  advance  on the  last  business  day of the  immediately  preceding
calendar  month.  Network's  obligation  to pay the  Base  Video  Rent  shall be
absolute,  and shall not be  contingent  in any way on  commercial  viability or
success of the Video Programming Service, or on amounts actually being collected
from Service Subscribers.

                  3.4.2  Base  Data  Rent.  In  addition  to any  other  amounts
specified  herein,  Network  agrees to pay TESC US$[ ](8) per calendar month for
transmission of the Data  Programming  Service (the "Base Data Rent").  The Base
Data Rent payment for each calendar month during the Term commencing upon launch
of the data channel shall be due and payable in advance on the last business day
of the immediately  preceding  calendar month.  Network's  obligation to pay the
Base Data Rent  shall be  absolute,  and shall not be  contingent  in any way on
commercial  viability or success of the Data Programming  Service, or on amounts
actually being collected from Service  Subscribers.  The Base Video Rent and the
Base Data Rent are sometimes collectively referred to herein as the "Base Rent."

                  3.5  Residual  Third Party Video  Revenues.  In the event that
TESC  transmits  any  third  party  audio or video  content  on the  programming
channels  during any residual  time  between  transmissions  of Network's  Video
Programming,  i.e., at times during which  Network's  Video  Programming  is not
being transmitted, for reasons other than those set forth in Section 10.2 or due
to termination or suspension by TESC of such transmissions pursuant to any other
term or  condition  of this  Agreement,  then TESC shall be entitled to retain [
](9) percent of Third Party Video  Programming  Service  Revenues (as defined in
Section 3.5.1 below) as rent ("Third

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(8) Confidential number omitted

(9) Confidential number omitted

<PAGE>

Party Video Rent") and the remaining [ ](10) percent shall be payable to Network
(the "Residual Third Party Video Revenues").

                  3.5.1 "Third Party Video  Programming  Service Revenues" for a
Particular  period  shall be  defined  as the net  receipts  to TESC from  third
parties  resulting  from the lease of the video  channels  which are the subject
matter of this Agreement,  to third parties during the period in which the video
channels are actively in use by Network as contemplated  hereunder but the Video
Programming  Service is not being transmitted at such time.  Notwithstanding the
foregoing, Third Party Video Programming Service Revenues shall not include, and
in no event shall  Network be  entitled  to , any portion of revenues  generated
from the sale of  times  on the  video  channel  during  which  Network's  Video
Programming  is not being  transmitted  due to the  reasons set forth in Section
10.2 or due to termination or suspension by TESC of such transmissions  pursuant
to any other, term or condition of this agreement.

         3.6  Retail  Price of  Programming  Service.  The  retail  price  for a
single-family  subscription to the Video  Programming  Service will initially be
set at US$19.95 per month and US$150 per year per Service Subscriber. The retail
price for a single-family  subscription to the Data Programming  Service will be
mutually agreed by the Parties.  Any subsequent  changes to these rates shall be
mutually  agreed upon by Network and TESC. The retail price for the  Programming
Service for hotel and motel rooms shall be mutually  agreed upon by the parties.
The retail price for the Programming Service for private offices,  patient rooms
in  hospitals,  public and private  commercial  establishments  and  bulk-billed
consumers shall be determined by TESC in its sole judgment.

                  3.7      Payments and Due Dates

                  3.7.1 Residual  Revenues for a given Reporting Period shall be
paid by TESC no later than  forty-five  (45) days after the end of the  calendar
month in which the Reporting Period ends.

                  3.7.2 Any payment  not made by Network to TESC  within  thirty
(30) days after it is due shall accrue  interest at the rate of one percent (1%)
per month, compounded monthly from the date such amount is due until it is paid.

                  3.7.3 Any  payment not made by TESC to Network  within  thirty
(30) days after it is due shall accrue  interest at the rate of one percent (1%)
per month, compounded monthly from the date such amount is due until it is paid.

4.   REPORTS; BOOKS AND RECORDS; AUDIT RIGHTS

         4.1 Reports.  Within forty-five (45) days after the end of the calendar
month in which the relevant  Reporting Period ends, TESC shall supply to Network
the  total  number of

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(10) Confidential number omitted

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Service  Subscribers as of the last day of the relevant Reporting Period and the
immediately preceding Reporting Period. Subject to technical  feasibility,  TESC
will  use  reasonable   commercial   efforts  to  supply  Network  with  reports
delineating  Subscriber  Information  and  indicating  the number of new Service
Subscribers   activated   during  mutually   agreed  upon   intervals.   Network
acknowledges  and agrees that all information  provided by TESC to Network under
this  Section 4.1 is deemed  proprietary  to TESC,  and Network  represents  and
agrees that it will treat all such  information  confidential in the same manner
as all Subscriber  Information (as hereinafter defined in Section 11.11.2 below)
under Section 11.11.2 of this Lease.

         4.2 Books and Records. TESC shall maintain for a period of at least two
(2)  years,  during  the  Term  and for one (1) year  thereafter,  complete  and
accurate records pertaining to distribution of the Programming  Service pursuant
to this Lease.

                  4.3 Audit  Rights.  No more than once every twelve (12) months
during the term and on a one-time  basis only for one (1) year  thereafter,  and
upon at least thirty (30) business days advance  written  notice,  Network shall
have the right through a nationally recognized  independent  accounting firm, to
perform an audit at TESC's  offices,  during normal business hours, of the books
and records of TESC with  respect to the  Programming  Service only for the sole
purpose of verifying Residual Revenue payments. Such audit shall be conducted at
Network's sole cost, and Network shall promptly  provide TESC with a copy of any
such  audit.  If during the course of an audit  Network  uncovers  that TESC has
failed to make any Residual Revenue payment or made any underpayments of greater
than ten percent (10%) with respect to any Residual  Revenue  payment made, TESC
shall pay to Network,  in addition to the unpaid or underpaid  Residual  Revenue
payment,  the  reasonable  costs and expenses  incurred by Network in connection
with such  audit.  Network  shall,  and  hereby  agrees to  obtain  the  written
agreement of any  representative  or agent  conducting  such audit on its behalf
(including,  without  limitations  accountants  and attorneys) to,  maintain the
confidential treatment of all audited information of TESC in accordance with the
provisions of Section 11.11.  Performance  and acceptance of an audit by Network
of TESC's  books and  records  shall be  conclusively  deemed as  acceptance  by
Network of full and final  payment by TESC with respect to all accounts  covered
by such audit;  provided that any unpaid or underpaid Residual Revenues revealed
by such  audit and any audit  expenses  required  to be paid by TESC  under this
Section 4.3 are actually paid in full by TESC.

5.   MARKETING AND SALES

           5.1    Marketing and Press Releases by Network

                  5.1.1 Marketing by Network.  Network will use its best efforts
to market and promote the Programming Service to prospective Service Subscribers
throughout  the  Territory.  In no event will  Network or any of its  Affiliates
directly or indirectly use any TESC Identifying

<PAGE>

Information  in connection  with the marketing and promotion of the  Programming
Service  without TESC's prior written  approval which approval TESC may withhold
in  its  sole  discretion.   For  purposes  of  this  Lease,  "TESC  Identifying
Information"  shall mean any logos,  trademarks,  service marks,  trade names or
other  information  in any form now or hereafter  used by TESC and/or any of its
Affiliates  to identify  itself or  themselves  or any of its or their  products
and/or services.  Network shall provide to TESC, at least thirty (30) days prior
to first use, an example of any advertising or promotional  materials to be used
by Network and/or any of its Affiliates that directly or indirectly use any TESC
Identifying  Information  in connection  with the marketing and promotion of the
Programming  Service,  which use has not,  within the past twelve  months,  been
approved  by TESC in  exactly  the form  intended  for use.  TESC may reject and
prohibit Network and its Affiliates from using such materials, for any reason or
no reason in its sole and absolute  discretion.  In the event that TESC does not
grant  written  approval of marketing  materials  within five (5) business  days
after receiving them from Network,  the marketing  materials  submitted shall be
deemed  rejected and Network and its Affiliates  shall be prohibited  from using
such materials. In the event that Network or any of its Affiliates: (i) directly
or indirectly  uses any TESC  Identifying  Information  in  connection  with the
marketing and promotion of the Programming  Service without TESC's prior written
approval;  or (ii) is  required  to,  but fails to  provide  TESC with  proposed
advertising  or  promotional  materials at least thirty (30) days prior to first
use, TESC shall be entitled to terminate this Lease effective  immediately  upon
delivery of written  notice to Network.  Any such  termination  shall be without
prejudice to any other rights or remedies that TESC might have under this Lease,
at law,  in equity or  otherwise.  Notwithstanding  the  foregoing,  Network may
market and promote the Programming Service as being available on a "high-powered
DBS service"  (or words of  substantially  the same  import).  All  advertising,
marketing and promotional  materials  utilized by Network in connection with the
Programming  Service:  (a) will not directly or  indirectly  advertise,  market,
promote or otherwise refer to any  distributor of programming  services which is
not owned  and/or  operated by TESC and/or it  Affiliates;  and (b) in the event
that TESC  exercises  the  Option  set forth in  Exhibit A hereto,  will  direct
prospective  Service  Subscribers  solely  to  the  toll-free  telephone  number
established by Network under Section 5.4.5 below.

                  5.1.2 Press  Releases by Network.  In no event will Network or
any  of  its  Affiliates   directly  or  indirectly  use  any  TESC  Identifying
Information in any press release issued by Network and/or its Affiliates without
TESC's prior  written  approval,  which  approval  TESC may withhold in its sole
discretion.  Network  shall  provide to TESC, at least thirty (30) days prior to
release  and in exactly the form  intended  to be  publicly  released by Network
and/or any of its  Affiliates,  any and all press  releases  which  directly  or
indirectly  use any TESC  Identifying  Information  (as defined in Section 5.1.1
above).  TESC may reject and prohibit  Network and its Affiliates  from publicly
releasing  such  press  releases,  for any  reason  or no reason in its sole and
absolute discretion. In the event that TESC does not grant written approval of a
press release within five (5) business days after receiving it from Network, the
press release  submitted shall be deemed rejected and Network and its Affiliates
shall be prohibited from publicly releasing it. In the event that Network and/or
any of its  Affiliates:  (i) directly or  indirectly  uses any TESC  Identifying
Information in any press release issued by Network and/or its Affiliates without
TESC's prior written approval, or (ii) is required to, but

<PAGE>

fails to provide  TESC with a proposed  press  release at least thirty (30) days
prior to release,  TESC shall be entitled to immediately terminate this Lease by
providing  written notice to Network to that effect.  Any such termination shall
be without  prejudice to any other rights or remedies that TESC might have under
this Lease, at law, in equity or otherwise.

         5.2  Marketing  by  TESC.  TESC  shall  have  the  right,  but  not the
obligation,  to market and  promote  the all or any  portion of the  Programming
Service in a  substantially  similar  manner as it markets  and  promotes  other
programming  services transmitted in a digitally compressed and encrypted format
via the then current satellite used by TESC to transmit the Programming Service.
TESC  shall  also have the right but not the  obligation  to direct  prospective
Service  Subscribers  who contact TESC or any of its  Affiliates  with inquiries
about the Programming  Service to the toll-free  telephone number established by
Network under Section 5.4.5 below. Network agrees to permit TESC to use Networks
trademarks to market the Programming Service to customers.

         5.3 Electronic  Programming Guide. Network acknowledges and agrees that
the Programming Service will not be included in the electronic programming guide
("EPG") generally available to DISH Network customers,  and that the Programming
Service  will only be included in the EPG of  individuals  who  subscribe to the
Programming Service. Subject to technical feasibility,  TESC will use reasonable
commercial efforts to include all or portions of the Programming  Service in the
EPG of individuals who subscribe to other  adult-oriented  programming  services
offered on DISH Network.  Notwithstanding the foregoing, TESC reserves the right
to alter,  substitute,  delete or  otherwise  modify the  display of  individual
program titles on the EPG, as TESC determines its sole and absolute discretion.

         5.4      Sales.

                  5.4.1  Until  such  time,  if  ever,  that  TESC  in its  sole
discretion  decides  otherwise,  TESC shall be  responsible  for  receiving  and
processing  orders for the  Programming  Service.  At all times during the Term,
TESC shall be  responsible  for  billing and  collecting  payment  from  Service
Subscribers,  and the authorization and  deauthorization  of IRDs to receive the
Programming  Service;  provided,  however,  that TESC shall have  absolutely  no
obligation to authorize,  and hereby expressly  retains the right to deauthorize
any IRD which TESC  determines in its sole judgment is: (i) located  outside the
Territory, or (ii) which is within the control of any person who may not legally
purchase  the  programming  service or to whom the  Programming  Service may not
legally  be  sold;  provided,  further,  that  TESC  shall  have  absolutely  no
obligation to authorize an IRD to receive the Programming Service unless Network
provides TESC with a street mailing  address  (i.e..  not a post office box) for
the prospective Service Subscriber.

                  5.4.2   Network   acknowledges   and  agrees   that  under  no
circumstances   shall  Network  collect  any  payment  for  Programming  Service
subscriptions  directly from any Service  Subscriber,  and that all payments for
Programming  Service  subscriptions  will be made directly to TESC. In the event
that,  notwithstanding  Network's best efforts to comply with this  requirement,
any  Service  Subscriber  forwards  any  payment to Network  rather than to TESC

<PAGE>

directly,  Network  shall  immediately  forward the payment,  together  with any
applicable  sales or similar taxes,  to TESC without  deduction or offset of any
kind, and shall instruct the Service Subscriber that all future payments for the
Programming Service must be made to TESC directly.

                  5.4.3  Network will use its best efforts to market and sell to
Service  Subscribers one of TESC's  programming  packages that includes at least
ten (10) basic  programming  services.  TESC may, as a condition  of  furnishing
certain  programming   services  to  Service   Subscribers,   including  without
limitation,  the Programming  Service,  pay-per-view and a la carte programming,
impose  additional  access  fees if a Service  Subscriber  does not  maintain  a
minimum level of programming  services as determined by TESC, as such additional
access fee may change from time to time in TESC's sole discretion

                  5.4.4  Network  further   acknowledges  and  agrees  that  the
distribution of the Programming  Service to Service  Subscribers by TESC via the
DTH System is subject to the terms and  conditions of the  Residential  Customer
Agreement  attached  hereto as Exhibit B, as such agreement may change from time
to time in TESC's sole discretion

         5.5 TESC's  Announcements.  If Network delivers the Programming service
in a format which provides for the insertion and integration of announcements by
TESC,  then TESC shall be  entitled  to the same amount of time per each hour of
delivery of the  Programming  Service as Network  allots for any other  operator
distributing  the  Programming  Service,  but in no event less than a reasonable
amount of time in accordance with industry standards. In addition to and without
limitation of the foregoing,  Network will schedule at least one (1) thirty (30)
second  video spot for  announcements  by TESC per four hours of delivery of the
Programming  Service.  Such spots will be distributed  roughly evenly throughout
the hours of delivery of the Programming  Service,  unless the parties  mutually
agree otherwise.

         5.6      Packaging Requirements.

                  5.6.1  TESC  may  offer  a  la  carte   subscriptions  to  the
Programming  Service or bundle the sale of the  Programming  Service with any of
TESC's new or existing programming packages or services.

                  5.6.2 In the event that TESC elects to bundle the  Programming
Service with any other programming package(s) or service(s)  (collectively,  the
"Bundled  Service"),  the  number of  Service  Subscribers  attributable  to the
Bundled Service as of the last day of any given Reporting  Period shall be equal
to the quotient of the amount of Bundled  Service  Revenues  attributable to the
Programming  Service under Section 5.6.3 below during that particular  Reporting
Period  divided by the then current  retail price per month for a  single-family
subscription to the Programming  Service. For example, if $100,000.00 in Bundled
Service Revenues are attributable to the Programming Service under Section 5.6.3
below during a given reporting month and the then current retail price per month
for a single-family  subscription to the  Programming  Service is $24.99,  there
would be 4,002 Service Subscribers attributable to the Bundled Service as of the
last day of that reporting month.

<PAGE>

                  5.6.3 "Bundled  Service  Revenues" for a particular  Reporting
Period shall be calculated in the same manner as  Programming  Service  Revenues
under Sections 3 above. The percentage of Bundled Service Revenues  attributable
to each particular programming package or service comprising the Bundled Service
shall be equal to the quotient of the then current  retail price per month for a
single-family  subscription  to the  relevant  programming  package  or  service
divided  by  the  sum  of  the  then  current   retail   prices  per  month  for
single-family  subscriptions to each of the individual  programming packages or
services  constituting  the Bundled  Service.  For example,  if TESC bundles the
Video  Programming  Service ($24.99 per month for a single-family  subscription)
with  "Channel  X"  ($15.99  per month  for a  single-family  subscription)  and
"Channel  Y"  ($9.99  per  month  for a  single-family  subscription),  then the
percentage of Bundled Service  Revenues  attributable  to the Video  Programming
Service is equal to the  quotient of then  current  retail price per month for a
single-family  subscription to the Programming  Service  ($24.99) divided by the
sum of the then current retail prices per month for single-family  subscriptions
to the Video  Programming  Service,  Channel X and Channel Y ($50.97),  or forty
nine percent (49%).

6    RECEPTION AND DISTRIBUTION OF THE PROGRAMMING SERVICE

           6.1 Signal Delivery by Network.  Network shall be solely  responsible
for all costs of production  programming and delivery of the Programming Service
to TESC's,  uplink  facility  in  Cheyenne,  Wyoming  (the  "Uplink  Facility"),
including the acquisition, delivery and installation of any equipment, including
non-standard broadcast equipment,  necessary to receive the Programming Services
at the Uplink Facility. Network will initially deliver the Programming Service's
signal to the Uplink  Facility  via a domestic  communications  satellite(s)  or
backhaul mutually agreed to in advance in writing. Network will transmit to TESC
a  high-quality  signal for the  Programming  Service from a satellite and shall
keep TESC  apprised of both the satellite and  transponder it is  using for such
transmission.  The signal which  carries the  Programming  Service to the Uplink
Facility may be  encrypted  at the sole option and expense of Network;  provided
that Network  provides TESC with a primary and secondary IRD capable of decoding
the signal at least  twenty-one (21) days  prior to commencement of the delivery
of encrypted  signals.  TESC  acknowledges that Network has provided TESC with a
primary and secondary IRD which are capable of decoding Network's current signal
within  a  sufficient  period  of time  prior to  commencement  of  delivery  of
Network's  current  signal.  Network  agrees that,  if it intends to deliver the
Programming Service's signal to the Uplink Facility in a digital format, it will
provide  TESC,  twenty-one  (21) days prior to the  Commencement  Date,  with a
primary  and  secondary  IRD in order  that  TESC may  receive  the  Programming
Service's digital signal from the Network's satellite. In the event that TESC or
any of its Affiliates  are required under any applicable  federal state or local
law or  regulation  to provide  the  Programming  Service  in a  close-captioned
format,  Network agrees, at Network's sole cost and expense  (including  without
limitation the payment of any additional production costs associated therewith),
to deliver the  Programming  Service to the Uplink Facility in a close captioned
format.

<PAGE>

         6.1.1 Network represents that up to the time of execution hereof two of
the video  channels which are the subject  matter of this  Agreement,  have been
delivered via satellites  and services owned and operated by Loral SkyNet,  Inc.
("Loral"). Network warrants and represents that prior to execution hereof it has
obtained all  necessary  written  consents,  approvals and waivers from Loral in
order to transfer the said channels from Loral's satellite,  to TESC's satellite
hereunder and to fully perform under this Agreement without claim of any kind by
Loral and/or any of its  affiliates,  against  Network  and/or its Affiliates or
TESC  and/or  its  Affiliates.  Network  and  its  Affiliates  hereby  agree  to
indemnify,  defend (through counsel of the relevant TESC Indemnitees choice) and
hold harmless the TESC Indemnitees from, against and with respect to any and all
direct and indirect claims damages,  liabilities,  costs and expenses (including
the payment of reasonable  attorney fees in advance) incurred in connection with
any civil,  criminal  administrative  and other  claim  against  any of the TESC
Indemnities arising out of or relating in any way to Network's relationship with
Loral and the transfer of the two channels as described above.

         6.2      Signal Transmission by TESC.

                  6.2.1  Network  is  responsible  for  providing  to  TESC,  at
Networks sole cost and expense,  all equipment necessary for TESC to receive the
Programming Service.  Except as otherwise set forth in the immediately preceding
sentence,  TESC shall be responsible for the costs of compression encryption and
transmission  of the  Programming  Service  from the Uplink  Facility to the DTH
System and to Service Subscribers;  provided however, that if Network desires to
change the technology  used to deliver or encode the signal after the date first
set forth above,  Network  agrees to give TESC written  notice of the technology
that will be used to deliver  and/or  encode the signal at least sixty (60) days
prior to the date  upon  which  Network  intends  to  commence  delivery  and/or
encoding of the Programming Service using that technology. Network agrees to pay
all  reasonable  additional  costs to be  incurred  by TESC in order to receive,
decode, compress, digitize, transmit or any other manipulation of the signal due
to such change in  technology  within  fifteen (15) days after  delivery of such
notice.  In the event that Network  fails to pay such costs in a timely  manner,
then  TESC may at its  option by notice to  Network  cease  transmission  of the
Programming  Service  from the DTH System and  terminate  this  Lease.  Any such
termination shall be without prejudice to any other fights or remedies that TESC
might have under this Lease, at law, in equity or otherwise.

                  6.2.2  In  the  event  that  Network  desires  to  change  the
satellite  transmitting the Programming Service to the Uplink Facility,  Network
agrees to give TESC written notice of the satellite and transponder  location by
which the Programming  Service will be delivered to the Uplink Facility at least
sixty  (60) days  prior to the date  upon  which  Network  intends  to  commence
delivery of the  Programming  Service via  satellite or to switch the  satellite
used to deliver the  Programming  Service to the Uplink  Facility.  In the event
that the satellite indicated by Network in any such notice cannot be received by
TESC using exisiting antennas at the Uplink Facility,  Network agrees to pay all
reasonable  costs  associated with the purchase of appropriate  downlink antenna
equipment for, and the  installation  and  integration of such

<PAGE>

equipment at, the Uplink  Facility  within  fifteen (15) days after  delivery of
such  notice.  In the event  that  Network  fails to pay such  costs in a timely
manner,  then TESC may, at its option,  by notice to Network delete  carriage of
the Programming  Service from the DTH System and terminate this Lease.  Any such
termination shall be without prejudice to any other rights or remedies that TESC
might have under this Lease, at law, in equity or otherwise.

                  6.2.3 Network will ensure that all satellite  transmissions to
TESC have a high-quality  signal for the Programming Service and shall keep TESC
apprised  of  both  the  satellite  and   transponder   it  is  using  for  such
transmissions.  Satellite signals carrying the Programming Service to the Uplink
Facility  may be  encrypted  at the sole option and expense of Network  provided
that Network provides TESC with a primary and secondary IRD capable of decoding
the signal at least  twenty-one  (21) days prior to commencement of the delivery
of encrypted  signals.  TESC  acknowledges that Network has provided TESC with a
primary and secondary IRD which are capable of decoding Network's current signal
within a sufficient period of time prior to commencement of delivery of Networks
current  signal.  Network agrees that, if it intends to deliver the  Programming
Service's  signal to the Uplink  Facility in a digital  format,  it will provide
TESC,  twenty  (21) days  prior to the  Commencement  Date,  with a primary  and
secondary IRD in order that TESC may receive the Programming  Service's  digital
signal from the Network's  satellite.  Notwithstanding  anything to the contrary
set forth herein, Network acknowledges and agrees that TESC has no obligation to
distribute  the  Programming  Service via the DTH System in any manner which is
now, or at any time hereafter may be, prohibited under applicable  local,  state
or federal laws and regulations,  including without limitation  statutes,  laws,
rules, regulations and orders enforced, administered,  promulgated or pronounced
by the Federal  Communications  Commission or any successor  agency thereto,  as
amended from time to time.

7.   REPRESENTATIONS, WARRANTIES  AND COVENANTS

           7.1  General  Representations,   Warranties  and  Covenants.  Network
represents, warrants and covenants to TESC that: (i) it has and will continue to
have full and sole authority,  ability and right to enter into and fully perform
this Lease; (ii) it has not and will not during the Term enter into an agreement
or arrangement  which limits the full performance of its obligations  hereunder;
(iii) it is and will remain in full compliance with all applicable local,  state
and federal laws and regulations,  including  without  limitation such statutes,
laws,  rules,  regulations  and orders  enforced,  administered,  promulgated or
pronounced by the Federal  Communications  Commission  or any  successor  agency
thereto,  as amended from time to time;  (iv) it is under no obligation and will
not become subject to any obligation  that might  interfere with its performance
of this  Lease;  (v) it has all  rights  necessary  to grant  TESC the  right to
distribute the Progranuning  Services and to use Network's  trademarks,  service
marks,  logos and related  trade usages as permitted  hereunder;  (vi) no civil,
criminal,  administrative  or other claims have ever been filed against  Network
its Affiliates or any  predecessor  entity of either alleging a violation of any
federal, state, local or other gambling, wagering,  obscenity,  indecency and/or
similar laws; and (vii) it will comply with all of its representations,

<PAGE>

warranties,  obligations,  covenants and responsibilities herein contained.  All
representations,  warranties  and  covenants  made  under  this  Section 7 shall
survive  the  termination  or earlier  expiration  of this Lease for a period of
three (3) years following expiration or earlier  termination.  In the event that
Network's  representation  and warranty under  subsection (vi) above  ultimately
proves  untrue,  TESC  shall be  entitled  to  terminate  this  Lease  effective
immediately  upon delivery of written  notice to Network.  Any such  termination
shall be without  prejudice to any other rights or remedies that TESC might have
under this Lease, at law, in equity or otherwise.

         7.2  Representations,  Warranties and Covenants as to Content.  Network
represents,  warrants and covenants that all programming included as part of the
Programming  Service  (whether or not set forth on Exhibit A hereto) will not be
obscene, libelous, slanderous, or defamatory, or in violation of any gambling or
wagering  laws, or any other  federal  state,  local or other laws,  nor will it
contain any material which violates or infringes any copyright, right of privacy
or literary or dramatic  right of any person or entity.  Network is  responsible
for making (and hereby represents and warrants that it will pay as and when due)
all  copyright,  royalty or other  performance  rights  payments  through to the
viewer,  including,  without  limitation  payments to ASCAP,  BMI, SESAC and any
other  applicable  music   performance   society  or  other  applicable   entity
(collectively  referred to as the "Performance  Right Fees") with respect to all
programming  included as part of the  Programming  Services  (whether or not set
forth on  Exhibit A  hereto).  In the event  that  Network  breaches  any of its
representations and warranties under this Section 7.2, TESC shall be entitled to
terminate this Lease  effective  immediately  upon delivery of written notice to
Network.  Any such termination shall be without prejudice to any other rights or
remedies that TESC might have under this Lease, at law, in equity or otherwise.

8.    INDEMNIFICATION

         8.1  Indemnification  by Network  and its  Affiliates.  Network and its
Affiliates  hereby agree to indemnify,  defend (through  counsel of the relevant
TESC  Indemnitees  choice)  and hold  harmless  TESC,  its  Affiliates,  and the
directors,  officers,  employees  and  agents  of  TESC  and/or  any  of  TESC's
Affiliates (collectively, the "TESC Indemnities") from, against and with respect
to any and all claims, damages,  liabilities,  costs and expenses (including the
payment of reasonable  attorney fees in advance) incurred in connection with any
civil  criminal,  administrative  and  other  claim  against  any  of  the  TESC
Indemnities  arising out of or relating in any way to: (i)  Network's  breach of
any  material  provision  of this  Lease;  (ii) the  breach  of any of  Networks
representations or warranties herein;  (iii) material or programming supplied by
Network  and/or  any of its  Affiliates  (whether  or not set forth in Exhibit A
hereto),  including without limitation any claims alleging that the transmission
of any programming  provided by Network and/or any of its Affiliates (whether or
not set  forth  in  Exhibit  A  hereto)  is  obscene,  libelous,  slanderous  or
defamatory, violates any gambling or wagering laws, or violates or infringes any
copyright,  right of  privacy or  literary  or  dramatic  right of any person or
entity;  (iv) Networks and/or any of its Affiliates'  advertising and marketing;
(v) the  transmission  of

<PAGE>

any programming as part of the Programming  Service (whether or nor set forth on
Exhibit A hereto) which violates or requires  payment of any Performance  Rights
Fees;  (vi) any other  materials,  including  advertising or  promotional  copy,
supplied  and/or  approved by Network,  (vii) the use of any logos,  trademarks,
service marks,  trade names or other TESC Identifying  Information  inconsistent
with TESC's written  instructions or this Lease;  and/or (vii) TESC ceasing to
transmit the Programming Service for any reason permitted hereunder;.

           8.2  Indemnification  by TESC. TESC shall indemnify and hold harmless
each of Network, its Affiliates,  directors,  officers,  employees and agents of
Network,  (collectively,  the  "Network  Indemnities")  from,  against  and with
respect  to any  and  all  claims,  damages,  liabilities,  costs  and  expenses
(including  reasonable  attorneys'  fees) incurred in connection  with any claim
against the Network Indemnities arising out of (i) TESC's breach of any material
provision of this Lease;  and/or (ii) TESC's  advertising  and  marketing of the
Programming Service (unless materials are provided or approved by Network).

           8.3 Notice of  Indemnification  Claim.  Should  either  party wish to
assert a claim for indemnification, such party shall do so by promptly notifying
the other party in writing of such claim. The indemnifying party shall undertake
the  defense of any such claim or action  and  permit the  indemnified  party to
participate  therein at the indemnified  party's expense.  The settlement of any
such claim or action by an indemnified party,  without the indemnifying  parties
prior written consent, shall release the indemnifying parry from its obligations
hereunder  with  respect to such  claim or action so  settled.  The  indemnities
contained in this Article 8 shall continue throughout the Term and shall survive
the termination of this Lease.

9.  LIMITATION  OF LIABILITY IN NO EVENT SHALL TESC OR ANY  AFFILIATE OF TESC BE
LIABLE  FOR ANY  EXEMPLARY,  SPECIAL,  INCIDENTAL  OR  CONSEQUENTIAL  DAMAGES TO
NETWORK (INCLUDING  WITHOUT  LIMITATION,  ANY PAYMENT FOR LOST BUSINESS,  FUTURE
PROFITS, LOSS OF GOODWILL, REIMBURSEMENT FOR EXPENDITURES OR INVESTMENTS MADE OR
COMMITMENTS ENTERED INTO, CREATION OF CLIENTELE,  ADVERTISING COSTS, TERMINATION
OF EMPLOYEES OR EMPLOYEES SALARIES,  OVERHEAD OR FACILITIES INCURRED OR ACQUIRED
BASED UPON THE  BUSINESS  DERIVED OR  ANTICIPATED  UNDER  THIS  LEASE),  WHETHER
FORESEEABLE OR NOT, CLAIMS UNDER DEALER TERMINATION,  PROTECTION, NON-RENEWAL OR
SIMILAR  LAWS,  FOR  ANY  CAUSE  WHATSOEVER  WHETHER  OR NOT  CAUSED  BY  TESC'S
NEGLIGENCE,  GROSS  NEGLIGENCE  OR  WILLFUL  MISCONDUCT.  IN NO EVENT  SHALL ANY
PROJECTIONS OR FORECASTS BY TESC BE BINDING AS COMMITMENTS OR PROMISES BY TESC.

<PAGE>

10.   TERMINATION

           10.1    Termination by Either Party

                    10.1.1  Termination.  Subject to Section 10.1.2 below, upon
thirty (30) days prior written notice (or ten (10) days in the case of a payment
default),  either  party may  terminate  this Lease in the event:  (i) the other
party has made any material misrepresentation; (ii) the other party has breached
any of the material warranties,  covenants or material obligations; or (iii) the
other party becomes insolvent or seeks relief under any insolvency  statute,  is
placed in receivership  or liquidation,  or makes any assignment for the benefit
of creditors. The right of a party to terminate this Lease in any such instances
shall be in  addition  to any other  rights or  remedies  it may have under this
Lease, at law, in equity or otherwise.

                  10.1.2  Opportunity to Cure. Upon receiving  written notice of
termination  due to breach or default as specified in Section 10.1.1 above,  the
notified party shall use its reasonable efforts to immediately  commence to cure
such breach or default;  provided  however,  that the notified party shall have:
(i) up to a  maximum  of  thirty  (30)  days (or ten (10)  days in the case of a
payment default),  if needed, from the receipt of such notice to cure the breach
or default:  or (ii),  except in the case of a payment default,  if such cure is
capable of cure but  cannot be  reasonably  completed  in such  period,  and the
notified party has commenced and is diligently pursuing such cure, then for such
longer period  necessary to complete such cure, but in no event to exceed ninety
(90) days in total.  If such  breach or default is timely  cured,  the notice of
termination shall be null and void.

10.2   Termination by TESC.

                  10.2.1  If TESC  determines,  in its sole  judgment,  that the
activities  contemplated under this Lease or any other circumstances,  including
without  limitation  an increase in obscenity  prosecutions  or  prospective  or
current   customer  or  citizen   protests  against   gambling,   wagering,   or
adult-oriented  products or services,  may: (i)  adversely  impact the business,
reputation, interests, or goodwill of TESC and/or any of its Affiliates, or (ii)
result  in  the  institution  of  civil,   criminal,   administrative  or  other
proceedings  against  TESC  and/or  any of its  Affiliates,  TESC may take  such
actions as it deems  necessary  in its sole  judgment to protect  the  business,
reputation,  interests, and goodwill of TESC and/or any of its Affiliates and to
prevent the institution of any such  proceedings  against TESC and/or any of its
Affiliates, including without limitation termination of the Lease and suspension
and/or  restriction  of the  transmission  of the  Programming  Services  in the
Territory or any portion of the Territory,  or to certain  Service  Subscribers.
TESC  shall  have no  liability  or  obligations  to Network as a result of such
actions,  and in the event that TESC elects to terminate  the Lease,  TESC shall
have no further obligations to Network whatsoever, except that TESC shall not be
relieved of its  obligations to pay moneys due or which become due to Network as
of or  subsequent to such  termination.  Any such  termination  shall be without
prejudice to any other rights or remedies that TESC might have under this Lease,
at law, in equity or otherwise.

                   10.2.2 This Lease shall terminate automatically should any of
the following  occur,  unless TESC notifies  Network to the contrary in writing:
(i)  Network  becomes  insolvent,   or  voluntary  or  involuntary   bankruptcy,
insolvency or similar proceedings are instituted against

<PAGE>

Network;  (ii) Network,  for more than twenty (20)  consecutive  days,  fails to
maintain  operations as a going  business;  (iii) Network,  for more than twenty
(20)  consecutive  days,  ceases to actively  market and promote the Programming
Service;  (iv) Network,  or any officer,  director,  substantial  shareholder or
principal of the Network is convicted  in a court of competent  jurisdiction  of
any offenses  substantially  related to the business conducted by the Network in
connection  with this  Lease;  (v) Network  fails to comply with any  applicable
local, state and federal laws and regulations, including without limitation such
statutes,   laws,   rules,   regulations  and  orders  enforced,   administered,
promulgated  or  pronounced  by the  Federal  Communications  Commission  or any
successor agency thereto,  as amended from time to time; (vi) Network  falsifies
any  documents,  records or reports  required  hereunder;  (vi) Network fails to
renew, or loses, due to suspension,  cancellation or revocation, for a period of
fifteen (15) days or more, any license,  permit or similar document or authority
required by law or governmental authority having jurisdiction, that is necessary
in carrying out the  provisions  of this Lease and to maintain its  corporate or
other  business  status,  as in effect as of the  effective  date of this Lease;
(viii)  Network  makes  any   representation   or  promise  on  behalf  of  TESC
inconsistent  with the  representations  or promises that TESC has  specifically
authorized  Network to make on behalf of TESC in this Lease;  or (ix) any actual
or alleged fraud, misrepresentation, or illegal action of any sort by Network in
connection with this Lease. Any such termination under this Section 10.2.2 shall
be without  prejudice to any other rights or remedies that TESC might have under
this Lease, at law, in equity or otherwise.

11.  MISCELLANEOUS

         11.1 Network's Ownership of Programming  Service. All rights, title and
interest in and to the Programming  Service, and all advertising and promotional
materials produced by Network,  ideas, formats and concepts contained therein or
used in connection  therewith  (including all copyrights)  shall, as between the
parties,  at all times be the sole property of Network,  and TESC shall not make
any claim to the contrary.

         11.2 Counterparts.  This Lease may be executed in one or more identical
counterparts,  each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.

           11.3  Assignment.  Network  shall not assign  this Lease  without the
prior written consent of TESC,  which consent may be withheld in TESC's sole and
absolute discretion, except to an Affiliate of Network; provided, however, that,
such  Affiliate  is:  (i) at least as  creditworthy  as  Network  at the time it
originally  executed  this Lease;  (ii) is not a direct or indirect  provider of
direct to home  programming;  and (iii) Network  unconditionally  guarantees the
full and timely payment and  performance of the  Affiliate's  obligations  under
this Lease. In furtherance and without limitation of the foregoing,  any merger,
reorganization  or  consolidation  of  Network  shall be  deemed  an  assignment
requiring TESC's consent hereunder. In furtherance and without limitation of the
foregoing,  in the event  that any  person or entity

<PAGE>

who,  as of  the  date  first  written  above,  did  not  possess,  directly  or
indirectly, the power to direct or cause the direction of management or policies
of Network,  whether by virtue of the ownership of voting stock,  by contract or
otherwise, later comes into possession of such power, that will be considered an
assignment  requiring  TESC's consent  hereunder.  TESC may assign this Lease in
whole  or in part at any time  without  Network's  consent.  In the  event  that
Network  assigns or attempts to assign this Lease in  violation  of this Section
11.3, TESC shall be entitled to terminate this Lease effective  immediately upon
delivery of written  notice to Network.  Any such  termination  shall be without
prejudice to any other rights or remedies that TESC might have under this Lease,
at law, in equity or otherwise.

           11.4  Relationship  of the Parties.  The  relationship of the parties
hereto is that of independent  contractors.  Nothing  contained  herein shall be
deemed  to  create,  and  the  parties  hereto  do not  intend  to  create,  any
relationship of  employee/employer,  partnership,  joint venture or agency,  nor
shall any similar  relationship be deemed to exist between them.  Network hereby
represents that it is not dependent upon TESC for a major part of its business.

           11.5 Force Majeure.  Notwithstanding anything to the contrary in this
Lease,  neither  party  shall be liable to the other for  failure to fulfill its
obligations  hereunder  if such  failure is caused by or arises out of an act of
force majeure  including acts of God, war, strike,  riot labor dispute,  natural
disaster,  technical  failure  (including  the  failure  of all or  part  of the
Network's domestic communications satellite or TESC's Satellite, or transponders
on which the  Programming  Service is delivered by Network to TESC or by TESC to
Service   Subscribers,   or  of  the  related  uplinking  or  other  equipment),
governmental  order or  regulation  or any other  reason  beyond the  reasonable
control of the party whose  performance  is prevented  during the period of such
occurrence.  The Term of this Lease shall be suspended  during the period when a
party  is  unable  to  fulfill  its  obligations  hereunder  by  reason  of such
occurrence.  In addition, the shared revenue payable by TESC shall be reduced on
a prorated basis if by reason of force majeure,  a Service  Subscriber  receives
the Programming  Service for less than a full month and the Programming  Service
charge to such Service  Subscriber  is reduced  accordingly.  If a Force Majeure
event is reasonably expected to continue for more than three (3) months,  either
party may terminate this  Agreement by providing  thirty (30) days prior written
notice to the other party.  TESC shall have the right to preempt the Programming
Service if there is a total or substantial  in-orbit failure of a satellite that
prevents TESC and/or its Affiliates from continuing a significant portion of the
DISH Network without such preemption

           11.6 Waiver.  The failure of either party at arty time to enforce any
right or remedy  available to it under this Lease or  otherwise  with respect to
any breach or failure by the other party shall not be  construed  to be a waiver
of such right or remedy with respect to any other breach or failure by the other
party.

           11.7 Notices.  Except as otherwise  expressly  set forth herein,  any
notices to be given  pursuant  to this  Lease  ("Notice")  shall be in  writing,
signed by the party issuing them, and sent by: (i) facsimile transmission;  (ii)
first class certified mail postage prepaid;  or (iii) overnight courier service,
charges  prepaid,  to the party to be  notified,  addressed to such party at the
following  address,  or sent by facsimile to the following  fax number,  or such
other

<PAGE>

address or fax number as such party may have  substituted by notice given to the
others  in  accordance  with this  Section.  The  sending  of such  notice  with
confirmation  or receipt  thereof  (in the case of  facsimile  transmission)  or
receipt  of  such  notice  (in the  case of  delivery  by  certified  mail or by
overnight courier service) shall constitute the giving thereof.

                 If to Network:     American Digital Communications, Inc.
                                    745 Fifth Avenue, Suite 900
                                    New York New York 10151
                                    Attention: John G. Simmonds
                 Fax No.:

                 If to TESC:        Transponder Encryption Services Corporation
                                    90 Inverness Circle East
                                    Englewood, Colorado 80112
                                    Attn: Mark Jackson, President
                                    Fax No.: (303) 723-1999

                 with a copy to:    Transponder Encryption Services Corporation
                                    90 Inverness Circle East
                                    Englewood, Colorado 80112
                                    Attn: R- Stanton Dodge, Corporate Counsel
                                    Fax No.: (303) 723-1699

           11.8  Governing Law and Exclusive  Jurisdiction,  This Lease shall be
construed by and governed in accordance  with the laws of the State of Colorado,
without  regard to its choice of law  provisions.  The federal and state  courts
located in the State of Colorado shall have exclusive  jurisdiction  to hear and
determine any claims, disputes, actions or suits which may arise under or out of
this Lease. The parties voluntarily consent to the personal jurisdiction of, and
waive any objection as to venue in, such courts for such purposes.

           11.9  Severability.  The parties  agree that each  provision  of this
Lease shall be construed as separable and divisible  from every other  provision
and  that  the   enforceability  of  any  one  provision  shall  not  limit  the
enforceability,  in  whole  or in  part,  of any  other  provision  hereof.  The
invalidation or unenforceability of any of the provision contained in this Lease
shall in no way affect  any of the other  provisions  hereof or the  application
thereof and the same shall remain in full force and effect.  In the event that a
court of competent jurisdiction determines that any term or provision herein, or
the application  thereof to any person,  entity,  or circumstance,  shall to any
extent be  invalid or  unenforceable,  it shall be  construed  by  limiting  and
reducing it so as to be enforceable under then applicable law.

         11.10 Entire Agreement, Exhibits, Amendments, Captions and Construction

<PAGE>

                           11.10.1 This Lease  (including  any Exhibits  hereto)
contains  the entire  understanding  of the parties  with respect to the subject
matter hereof and  supersedes any and all prior or  contemporaneous  agreements,
representations or undertakings  between the parties with respect to the subject
matter  hereof.  The captions  used herein are for  reference  purposes only and
shall not be used in the interpretation of this Lease. In the case of a conflict
between the provisions of this Lease and any Exhibit this Lease shall prevail.

                           11.10.2  This  Lease  has  been  fully  reviewed  and
negotiated by the parties hereto and their respective counsel.  Accordingly,  in
interpreting  this Lease,  no weight  shall be placed upon which party hereto or
its counsel drafted the provision being interpreted.

                           11.10.3 No waiver,  modification  or amendment of any
of the terms or conditions of this Lease shall be effective unless  memorialized
in a writing that has been signed by both parties hereto.

           11.11           Confidentiality.

                           11.11.1 Each party  agrees,  and it is of the essence
under this Lease, that they and their employees, representatives and agents have
maintained  and will  maintain  in  confidence,  the  terms and  provisions  and
existence of this Lease, as well as all data, summaries,  reports or information
of all kinds,  whether  oral or written  acquired or devised or developed in any
manner from the disclosing  party personnel or files, and that they have not and
will not reveal the same to any persons not  employed  by the  disclosing  party
except: (i) at the written direction of such party; (ii) to the extent necessary
to comply with the law, the valid order of a court of competent jurisdiction, or
a requirement of the Securities and Exchange  Commission or any successor agency
thereto,  in which event the disclosing party shall so notify the other party as
promptly as practicable  (and, if possible prior to making any  disclosure)  and
shall seek confidential treatment of such information;  (iii) in connection with
any  arbitration  proceeding;  (iv) as part of its  normal  reporting  or review
procedure to its partners,  parent company, its auditors,  its attorneys and its
investment bankers, and such parent company, auditors,  attorneys and investment
bankers agree to be bound by the  provisions of this Section  11.11;  and (v) in
order to enforce any of its rights pursuant to this Lease.

                           11.11.2  Network  acknowledges  and  agrees  that all
subscribers who subscribe to the Programming  Service shall be deemed  customers
of TESC for a purposes  relating  to  programming  services  (including  but not
limited to video,  audio and data) and the  hardware  necessary  to receive such
services.  Network acknowledges and agrees that the names,  addresses,  profiles
and other identifying information of such subscribers ("Subscriber Information")
are as between Network and TESC, the sole and exclusive property of TESC. During
the term of this Lease and at all times thereafter,  Network agrees that it will
treat all Subscriber Information strictly confidential, and will not directly or
indirectly disclose any

<PAGE>

Subscriber  Information  or directly or indirectly  use, or permit any others to
use, any Subscriber  Information for any purpose. By example,  but not by way of
limitation,  Network  shall  not  directly  or  indirectly  use  any  Subscriber
Information  for the purpose of soliciting,  or to permit any others to solicit,
subscribers  to subscribe to the  Programming  Service or any other  programming
services.

                  11.11.3 Each party  agrees that a breach of these  obligations
of confidentiality will result in the substantial likelihood of irreparable harm
and injury to the other  party,  for which  monetary  damages  alone would be an
inadequate  remedy,  and which  damages are  difficult  to  accurately  measure.
Accordingly,  each party  agrees that the other  party shall have the right,  in
addition to any other remedies available,  to obtain immediate injunctive relief
as well as other equitable  relief allowed by the federal and state courts.  The
foregoing  remedy of  injunctive  relief is agreed to without  prejudice  to the
other  party's to exercise any other rights and remedies it may have,  including
without limitation,  the right to terminate this Lease and seek damages or other
contractual, legal or equitable relief The foregoing confidentiality obligations
will survive termination of this Lease.

                  11.11.4 In the event that Network derives an economic benefit,
in any form, from a violation of its obligations  under Section 11.11.2,  it is
hereby  agreed  that such  economic  benefit  is the  property  of TESC and that
Network shall deliver the cash value of the economic benefit to TESC immediately
upon receipt of the economic  benefit.  It is further  agreed that Network shall
hold such  economic  benefit in trust for the benefit of TESC until such time as
its cash  value is  delivered  to TESC.  The  foregoing  is  agreed  to  without
prejudice  to TESC to  exercise  any  other  rights  and  remedies  it may have,
including without limitations the right to terminate this Lease and seek damages
or other contractual,  legal or equitable relief The confidentiality obligations
set  forth  in this  Section  11.11  will  survive  termination  of  this  Lease
indefinitely.

                  11.12  Compliance with Law.  Network  acknowledges  and agrees
that TESC's  ability to Perform  under this Lease is subject to, all  applicable
federal  state  and  local  laws,  rules  and  regulations,   including  without
limitation:  (1) all  provisions of the  Communications  Act of 1934, as amended
from  time  to  time  during  the  term of this  Lease;  and (2) the  rules  and
regulations  of the Federal  Communications  Commission or any successor  agency
thereto, as amended from time to time.

                  11.13  Benefits.  This Lease shall be binding upon,  and shall
redound to the  benefit  of,  both of the  parties  hereto and their  respective
successors and assigns.

                  11.14  Remedies  Cumulative.  It is agreed that the rights and
remedies  herein  provided in case of default or breach by either  party of this
Lease are  cumulative and shall not affect in any manner any other remedies that
the other party may have by reason of such  default or breach.  The  exercise of
any right or remedy herein  provided shall be without  prejudice to the right to
exercise any other right or remedy provided herein, at law, or in equity.

<PAGE>

                  11.15  Attorney-Fees.  In the  event of any suit or  action to
enforce or interpret this Lease or any provision  thereof,  the prevailing party
shall be entitled to recover its costs,  expenses and reasonable  attorney fees,
both at trial and on appeal, in addition to all other sums allowed by law.

                  11.16  Corporate  Guarantee.  Upon  execution  of this  Lease,
Network will provide the TESC Parties with: (i) a guarantee (the "Guarantee") in
the form set forth in Exhibit C hereto  executed  by  Simmonds  Capital  Limited
("Guarantor"),  an  Ontario,  Canada  corporation  having a  principal  place of
business at 580 Granite Court,  Pickering,  Ontario  LIW3Z4  Canada;  and (ii) a
resolution  of the Board of Directors  of Simmonds  Capital  Limited  approving,
adopting,  ratifying and confirming the Guarantee, which has been duly certified
by the Secretary of Guarantor. In the event that Network fails to provide either
document to TESC as scheduled in this Section  11.16,  TESC shall be entitled to
terminate this Lease  effective  immediately  upon delivery of written notice to
Network.  Any such termination shall be without prejudice to any other rights or
remedies that TESC might have under this Lease, at law, in equity or otherwise.

11.17         Insurance Requirements.

                           11.17.1 Network shall, at its sole expense,  keep the
following  insurance  coverages in full force and effect during the term of this
Lease:

                                    (a) Commercial  General  Liability  coverage
which includes Premises/Operations,  Products/Completed Operations,  Contractual
Liability,  Independent  Contractors,  Broad Form Property Damage,  and Personal
Advertising  Injury  with  limits of not less  than One  Million  United  States
Dollars ($1,000,000.00) per occurrence;

                                    (b)   Broadcasters    Liability    insurance
coverage which includes  Personal/Advertising Injury, Bodily Injury and Property
Damage  with  limits  of  not  less  than  One  Million  United  States  Dollars
($1,000,000) per occurrence and

                                    (c) Umbrella  Liability  insurance  coverage
following  the form  underlying  policies  with  limits of not less  than Ten
Million United States Dollars ($10,000,000) per occurrence.

                           11.17.2  TESC,  its  Affiliates  and the officers and
employees  of each  shall be named as  additional  insureds  on all of the above
coverages.  Network  for  itself  and its  insurer  hereby  waives any rights of
subrogation against TESC, its Affiliates and the officers and employees of each.

<PAGE>

                           11.17.3 The foregoing coverages shall be evidenced by
a certificate of insurance  acceptable to TESC. Such certificate shall be issued
by an insurance  carrier with an A.M. Best rating of "A-" or better and shall be
provided,  with such endorsements as required hereunder,  to TESC upon execution
of this Lease by Network. Such insurance certificate shall provide: (i) that the
coverages thereon shall not be substantially modified or canceled without thirty
(30) days' prior written notice to TESC; and (ii) that TESC shall be notified in
writing of  Network's  failure to renew any  policy on the  certificate  by each
policy  anniversary date during the term of this Lease. The foregoing  insurance
shall be provided in the form of "occurrence" policies.

                           11.17.4  Network's  indemnity  obligations  set forth
above shall not be negated or reduced by virtue of Network's insurance carrier's
denial of insurance  coverage for the  occurrence  or event which is the subject
matter of the claim or refusal to defend TESC and/or any of its Affiliates.

                           11.17.5  Compliance by Network with the  requirements
of this section as to carrying  insurance and  furnishing  proof thereof to TESC
shall not  relieve  network of its  indemnity  liability  set forth above or its
liability to TESC specified in any other provision of this Lease.

IN WITNESS  WHEREOF,  the parties  hereto have entered into this Lease as of the
date first set forth above.

AMERICAN DIGITAL COMMUNICATIONS,            TRANSPONDER ENCRYPTION
INC. (NETWORK)                              SERVICES CORPORATION

__________________                          _______________________
John G. Simmonds                            Mark Jackson
Chairman & CEO                              President

<PAGE>

EXHIBIT A

                              Programming Schedule

The Video  Programming  Service consists of four (4) video channels of racetrack
programming which is largely comprised of horse racing. The Programming  Service
is currently  identified  as  "TrackPower",  by Network,  and shall be deemed to
include the same service  operated under any other name in the future.  The Data
Programming  Service will consist of one (1) data channel  programming  which is
largely  comprised  of  wagering  related  information,  and  shall be deemed to
include the same service operated under any other name in the future.

<PAGE>

EXHIBIT B

Residential Customer Agreement

<PAGE>

EXHIBIT C

                               Corporate Guarantee

                 To induce Transponder Encryption Services Corporation ("TESC")
to enter into the Satellite  Capacity  Lease (the  "Lease")  dated June 4th 1999
between the TESC and American  Digital  Communications,  Inc.  ("Network"),  the
undersigned  ("Guarantor")  hereby  unconditionally  guarantees  and promises to
perform any and all of NETWORK's obligations under the Lease.

         1 .  This  Guarantee  is a  continuing  guarantee  which  shall  remain
effective  until all of  NETWORK's  obligations  under the Lease have been fully
performed.

         2. The obligations  hereunder are joint and several, and independent of
the  obligations  of  NETWORK.  A separate  action or actions may be brought and
prosecuted against Guarantor whether or not action is brought against NETWORK or
whether NETWORK is joined in any such action or actions (provided, however, that
Guarantor may bring NETWORK into any such action as permitted  under  applicable
law) and Guarantor  waives the benefit of any statute of  limitations  affecting
its liability under this Guarantee or the enforcement hereof.

         3.  This  Guarantee   shall  not  be  impaired  by  any   modification,
supplement,  extension  or  amendment of any contract or agreement to which TESC
and NETWORK  may  hereafter  agree,  nor by any  modification,  release or other
alteration  of any of the  indebtedness  thereby  guaranteed  or of any security
therefor,  nor by any agreements or arrangements whatever with NETWORK or anyone
else.

         4. Guarantor  waives any and all right to assert against TESC any claim
or defense  based upon an election  of  remedies  by TESC  which,  in any manner
impairs,  affects,  reduces,  releases,   destroys  and/or  extinguishes  TESC's
subrogation  rights and or  Guarantor's  right to proceed  against  NETWORK  for
reimbursement,  and/or any other  rights of  Guarantor  against  NETWORK  and/or
against any other person or security, including, but not limited to, any defense
based upon an election of remedies by TESC under the terms of the Rules of Civil
Procedure  of the State of Colorado,  and/or any similar law of Colorado,  or of
any other State, or of the United States.  Guarantor waives any right to require
TESC to: (a)  proceed  against  NETWORK;  (b)  proceed  against  or exhaust  any
security  held from  NETWORK;  or (c)  pursue any other  remedy in TESC's  power
whatsoever.  Any and all present and future debts and  obligations of NETWORK to
Guarantor are hereby waived and  postponed in favor of and  subordinated  to the
full payment and performance to TESC. Guarantor waives all

<PAGE>

presentments,  demands for performance,  notices of  non-performance,  protests,
notices  of  protest,  notices  of  dishonor,  notices  of  default,  notices of
acceptance  of this  Guarantee,  notice  of any and all other  notices  to which
Guarantor  might  otherwise be entitled,  and the right to a trial in any action
hereunder or arising out of TESC's transactions with NETWORK.

         5.  Guarantor  agrees to pay an  attorney  fees and all other costs and
expenses  which may be incurred by TESC in the  enforcement of this Guarantee or
any claim hereunder or under any other  instrument or guarantee,  to the maximum
extent permitted by law.

         6. This Guarantee shall be governed by and construed in accordance with
the laws of the State of Colorado.  The federal and state courts in the State of
Colorado  shall have  exclusive  jurisdiction  to bear and determine any claims,
disputes,  actions or suits which may arise under or out of this Guarantee.  The
parties agree and voluntarily consent to the personal  jurisdiction of and waive
any  objection  to venue in, such courts for such  purposes  and agree to accept
service of process  outside the State of Colorado in any matter to be  submitted
to any such court pursuant hereto.

         7. No modification of this Guarantee shall be effective for any purpose
unless it is in writing and executed by an officer of TESC authorized to do so.

IN WITNESS  WHEREOF,  the  undersigned  Guarantor  has executed  this  Guarantee
effective as of the 4th day of June, 1999.

Witness                                              GUARANTOR:
                                                     Simmonds Capital Limited

STATE OF COLORADO )
COUNTY OF APAPAHOE )

This  guarantee  was  acknowledged  before  me this  ____,  by as of  ______,  a
corporation having a principal place of business at 5701 S. Santa Fe, Littleton,
CO 80120. WITNESS my hand and official seal.

SEAL

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