Sample Business Contracts


Affiliation Agreement [Amendment No. 1] - Spice Inc. and Satellite Services Inc.


                                 AMENDMENT NO. 1
                                    TO SPICE
                              AFFILIATION AGREEMENT

THIS AMENDMENT,  made as of Sept. 29, 1994, is by and between Spice, Inc., a New
York  corporation   ("Network"),   and  Satellite  Services,  Inc.,  a  Delaware
corporation  ("Affiliate"),  and,  with the  exception  of  paragraph 13 hereto,
amends  that  certain  Affiliation  Agreement  dated as of November 1, 1992 (the
"Agreement") between Network and Affiliate.  All capitalized terms not otherwise
defined herein shall have the meaning ascribed to such terms in the Agreement.

      NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the parties hereto agree as follows:

      1. Section 4(a) is hereby amended to read in its entirety as follows:

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

<PAGE>

      2. Sections  5(a)(i) through (iv) are amended to read in their entirety as
follows:

                  "(i) "PPV  Satellite  Subscriber"  means someone who is both a
Satellite  Subscriber  and who utilizes the Service as a PPV service by making a
purchase through Affiliate or an affiliate of Affiliate.  Except for purposes of
Section 5(c) hereof,  PPV Satellite  Subscribers  shall include  Combination PPV
Satellite Subscribers.  "PPV Satellite Fees" are those Fees payable by Affiliate
to Network in connection with sales of the Service to PPV Satellite Subscribers.

                  (ii) "Service Satellite  Subscriber" means someone who is both
a Satellite  Subscriber and a Service Subscriber (as defined below) who utilizes
the Service as a  Subscription  service.  Except for  purposes  of Section  5(b)
hereof,   Service  Satellite   Subscribers  shall  include  Combination  Service
Satellite  Subscribers.  "Service  Satellite  Fees" are those  Fees  payable  by
Affiliate  to  Network  in  connection  with  sales of the  Service  to  Service
Satellite Subscribers.

                  (iii) "PPV Cable Subscriber" means someone who is provided the
Service by Affiliate or an  affiliate of Affiliate  hereunder,  who utilizes the
Service as a PPV  service  and who  receives  the  Service  by means  other than
Satellite.  Except for purposes of Section 5(c)  hereof,  PPV Cable  Subscribers
shall include Combination PPV Cable Subscribers.  "PV Cable Fees" are those Fees
payable by Affiliate to Network in  connection  with sales of the Service to PPV
Cable Subscribers.

                  (iv)  "Service  Cable   Subscriber"  means  someone  who  both
receives the Service by means other than  Satellite and is a Service  Subscriber
and who utilizes the Service as a Subscription  service.  Except for purposes of
Section 5(b) hereof, Service Cable Subscribers shall include Combination Service
Cable  Subscribers.  "Service Cable Fees" are those Fees payable by Affiliate to
Network in connection with sales of the Service to Service Cable Subscribers."

      3.  Section  5(a)(x)  of the  Agreement  is hereby  amended to read in its
entirety as follows:

            (x)  "Addressable   Subscriber"  means  a  cable  television  system
subscriber  whose  television set is connected (or who has been issued equipment
by the operator of the cable  television  system to permit a connection)  on the
subscriber's  premises, or by interdiction,  to equipment operated by Affiliate,
or an  affiliate of  Affiliate,  that allows the channel on which the Service is
received to be turned on or off (i.e.,  "authorized" or  "deauthorized")  from a
central  location,  controlled by the operator of the  pertinent  System or such
operator's agent or designee."

            4. Attached  hereto is Exhibit B to the  Agreement,  and any and all
references  in the  Agreement to Exhibit B is hereby deemed to be a reference to
Exhibit B attached hereto.

            5.  Sections  5(b)(i)  through  (iii) of the  Agreement  are  hereby
amended to read in their entirety as follows:

            (b) Subscription


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<PAGE>

                  (i) For each calendar  month during the Term,  Affiliate  will
pay Network as a Service Cable Fee for each Service  Cable  Subscriber an amount
equal  to the  greater  of  (A)  *****,  or (B)  *****  of  the  Gross  Receipts
attributable  to such Service  Cable  Subscriber.  When the Service is sold to a
Service Cable Subscriber in combination with other services (excluding a package
which contains the cable  television  service known as "Spice 2" (the "Multiplex
Service")) for a package charge (as, for example, in a tier or in a package of a
la carte or other services),  the Gross Receipts attributable to a Service Cable
Subscriber  for the Service  shall be equal to the total  charge for the tier or
package of  services  sold in  combination  with the  Service,  multiplied  by a
fraction,  the numerator of which is ***** and the  denominator  of which is the
numerator plus the aggregate of the net effective  rates per subscriber  charged
to Affiliate by each of the other service  providers of the services included in
the tier or package of a la carte or other services; provided, however, that the
amounts  charged to  Affiliate  for each of the  services in the package or tier
shall not be disclosed by  Affiliate  to Network but, at Network's  request,  in
order to assure Network of compliance with this provision,  Affiliate shall make
such charges and any pertinent  calculations  available to a  representative  of
KPMG Peat Marwick (which representative is neither Network's nor Affiliate's) on
a  confidential   basis,   at  Network's  cost.  This  provision  shall  survive
termination or expiration of this Agreement.

Affiliate shall pay a Service  Satellite Fee to Network in the following amounts
for each Service Satellite  Subscriber (based on the subscription term purchased
by such  Satellite  Subscriber),  regardless  of whether such Service  Satellite
Subscriber  purchases the Service alone as an a la carte service or as part of a
tier or  package of a la carte or other  services  and  regardless  of the Gross
Receipts attributable thereto:

                                                  Service Satellite Fee
                                                  Per Service Satellite
                       Service Term               Subscriber
                       ------------               ---------------------

                        1 Month                         *****
                        3 Months                        *****
                        6 Months                        *****
                        1 Year                          *****

Notwithstanding  the  foregoing,  if the  Service  is  sold to a  Service  Cable
Subscriber in combination  with the Multiplex  Service (a  "Combination  Service
Cable  Subscriber"),  Affiliate will pay Network as a Service Cable Fee for each
Combination  Service  Cable  Subscriber  an amount  equal to the  greater of (A)
*****,  or (B)  ***** of the Gross  Receipts  attributable  to such  Combination
Service  Cable  Subscriber  for  purchase of both the Service and the  Multiplex
Service.  If the Service and the Multiplex  Service are sold in combination with
other services for a package charge (as, for example,  in a tier or in a package
of a  la  carte  or  other  services),  the  Gross  Receipts  attributable  to a
Combination  Service Cable Subscriber for the Service and the Multiplex  Service
shall be equal to the total  charge for the tier or package of services  sold in
combination with the Service,  multiplied by a fraction,  the numerator of which
is $2.19 and the denominator of which is the numerator plus the aggregate of the
net  effective  rates per  subscriber  charged to Affiliate by each of the other
service  providers of the services included in the tier or package of a la carte
or other services;  provided, however, that the amounts charged to Affiliate for
each of the  services in the package or tier shall not be disclosed by Affiliate
to Network but,


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<PAGE>

at  Network's  request,  in order to  assure  Network  of  compliance  with this
provision,  Affiliate  shall make such  charges and any  pertinent  calculations
available to a  representative  of KPMG Peat Marwick  (which  representative  is
neither  Network's nor Affiliate's) on a confidential  basis, at Network's cost.
This provision shall survive termination or expiration of this Agreement.

If the Service is sold to a Service Satellite Subscriber in combination with the
Multiplex Service (a "Combination  Service Satellite  Subscriber"),  the Service
Satellite  Fees for both the Service and the  Multiplex  Service shall equal the
following amounts for each Combination  Service Satellite  Subscriber,  based on
the  subscription   term  purchased  by  such  Combination   Service   Satellite
Subscriber:

                                            Service Subscription
                                            Fee Per Combination Service
                 Service Term               Satellite Subscriber
                 ------------               ---------------------------

                  1 Month                              *****
                  3 Months                             *****
                  6 Months                             *****
                  1 Year                               *****

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

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


                                       4
<PAGE>

calendar  month to which they  relate.  In the event that the Service is sold to
Service Satellite Subscribers or Combination Service Satellite Subscribers for a
term greater than one month, the Service  Satellite Fees payable with respect to
such Service Satellite  Subscriber or Combination  Service Satellite  Subscriber
shall be due and  payable  forty-five  (45) days  after the end of the  calendar
month in which  delivery of the  Service to such  Service  Satellite  Subscriber
commences;  provided that if Affiliate  does not receive full payment for a term
(or gives a credit),  Affiliate  shall receive a like credit against the Service
Satellite Fees.

      6.  Section  5(c)(i)  of the  Agreement  is hereby  amended to read in its
entirety as follows:

            "(c) PPV

                  (i) For each  customer of Affiliate  who receives and pays for
one (1) complete and technically  satisfactory viewing of one viewing segment of
the  Service as a PPV  service  as a PPV Cable  Subscriber,  Affiliate  will pay
Network a PPV Cable Fee in an amount  equal to the greater of, (A) (i) ***** for
orders taken from the date of full execution  hereof  through  October 31, 1995,
(ii) ***** for orders taken from November 1, 1995 through October 31, 1998 (iii)
***** for orders taken from  November 1, 1998 through  October 31, 2001 and (iv)
***** for orders from  November 1, 2001 through the end of the Initial  Term, or
(B) the Network Share of the Gross  Receipts paid by such PPV Cable  Subscriber.
With respect to PPV Cable Subscribers, "Network Share" shall equal the following
percentage of the Gross Receipts paid by each PPV Cable  Subscriber:  ***** from
the date of execution of this Agreement by both parties  hereof through  October
31, 1995 and ***** from  November 1, 1995  through the end of the Initial  Term.
For each  customer of  Affiliate  who receives and pays for one (1) complete and
technically  satisfactory viewing of one viewing segment of the Service as a PPV
service as a PPV Satellite  Subscriber (provided that it is technically feasible
to sell the Service on a PPV basis to PPV Satellite Subscribers), Affiliate will
pay  Network a PPV  Satellite  Fee in an amount  equal to the greater of (C) (i)
***** for orders taken from the date of full execution  hereof  through  October
31, 1995,  (ii) ***** for orders taken from November 1, 1995 through October 31,
1998,  (iii) ***** for orders taken from  November 1, 1998  through  October 31,
2001,  and (iv) ***** for orders taken from  November 1, 2001 through the end of
the Initial Term,  or (D) the Network  Share of the Gross  Receipts paid by such
PPV Satellite Subscriber. With respect to PPV Satellite Subscribers, the Network
Share of the Gross Receipts shall be *****.

Notwithstanding the foregoing,  if the Service is sold to a PPV Cable Subscriber
in combination  with the Multiplex  Service as a PPV service (a "Combination PPV
Cable  Subscriber"),  Affiliate  will  pay  Network  a PPV  Cable  Fee for  each
Combination PPV Cable  Subscriber who receives and pays for one (1) complete and
technically  satisfactory  viewing of one viewing segment of each of the Service
and the  Multiplex  Service in an amount  equal to the greater of, (A) (i) *****
for orders  taken from the date of full  execution  hereof  through  October 31,
1995,  (ii) ***** for orders  taken from  November 1, 1995  through  October 31,
1998,  (iii) ***** for orders taken from  November 1, 1998  through  October 31,
2001 and (iv) ***** for orders  from  November  1, 2001  through  the end of the
Initial Term,  or (B) the Network  Share of the Gross  Receipts paid by such PPV
Cable Subscriber.  With respect to Combination PPV Cable  Subscribers,  "Network
Share"  shall equal ***** of the Gross  Receipts  paid by each  Combination  PPV
Cable  Subscriber.  If the  Service  is sold to a PPV  Satellite  Subscriber  in
combination  with the Multiplex  Service as a PPV


                                       5
<PAGE>

service  (provided that it is technically  feasible to sell the Service on a PPV
basis to PPV Satellite  Subscribers) (a "Combination Satellite PPV Subscriber"),
Affiliate will pay Network a PPV Satellite Fee for each PPV Satellite Subscriber
who receives and pays for one (1) complete and technically  satisfactory viewing
of one  viewing  segment  of each of the  Service  and  the  Multiplex  Service,
Affiliate will pay Network a PPV Satellite Fee in an amount equal to the greater
of (C) (i) ***** for orders taken from the date of full execution hereof through
October 31,  1995,  (ii) ***** for orders  taken from  November 1, 1995  through
October 31,  1998,  (iii) ***** for orders  taken from  November 1, 1998 through
October 31, 2001,  and (iv) ***** for orders taken from November 1, 2001 through
the end of the Initial Term, or (D) the Network Share of the Gross Receipts paid
by such  Combination PPV Satellite  Subscriber.  With respect to Combination PPV
Satellite Subscribers, the Network Share of the Gross Receipts shall be *****.

Notwithstanding the foregoing,  each System and each Satellite distributor shall
have the right to discount the price of a PPV viewing of the Service  during the
first thirty (30) days after the launch of the Service in such System or by such
Satellite  distributor,  respectively,  and during no more than two (2) ten (10)
day periods each calendar  year.  For orders taken during such first thirty (30)
days and during  each such ten (10) day period,  Affiliate  shall be required to
pay to Network minimum PPV Satellite Fees or PPV Cable Fees (as the case may be)
of ***** per each  complete and  technically  satisfactory  viewing of a viewing
segment of the Service as a PPV service,  rather than the minimum PPV  Satellite
Fees or PPV Cable Fees  specified in this Section  5(c)(i).  Furthermore,  there
shall be no PPV  Satellite  Fee or PPV Cable Fee (as the case may be) payable by
Affiliate to Network for any PPV viewing of the Service by a subscriber who pays
for such viewing by remitting a coupon  provided by Affiliate or by an affiliate
of  Affiliate to  subscribers  that have not ordered a PPV movie or event in the
six (6) months immediately preceding the issuance of such coupon.

Notwithstanding  the  foregoing,  if in any month the sum of the PPV Cable  Fees
payable  hereunder and the PPV Cable Fees payable  under the  agreement  between
Network  and  Affiliate  for the  distribution  of the  Multiplex  Service  (the
"Multiplex Agreement") (excluding PPV Cable Fees attributable to Combination PPV
Cable Subscribers under this Agreement and the Multiplex Agreement) do not equal
or exceed an amount equal to the product of the Minimum  Average  Percentage (as
defined  herein)  multiplied by the sum of the Gross  Receipts paid by PPV Cable
Subscribers  (excluding  Combination PPV Cable  Subscribers) who receive and pay
for one (l) complete and technically satisfactory viewing of one viewing segment
of either the Service or the Multiplex  Service (the "Minimum Average PPV Fee"),
Affiliate shall pay' to Network the Minimum Average PPV Fee in lieu of PPV Cable
Fees under this  Agreement  and the  Multiplex  Agreement.  For purposes of this
Agreement, the Minimum Average Percentage shall mean the arithmetic mean average
of the Network Share payable  under this  Agreement in the pertinent  month with
respect  to PPV Cable  Subscribers  to the  Service  and the  Network  Share (as
defined in the Multiplex Agreement) payable under the Multiplex Agreement in the
pertinent month with respect to PPV Cable Subscribers to the Multiplex Service."

      7.  Section  5(c)(iii) of the  Agreement is hereby  amended to read in its
entirety as follows:

      "(iii) The PPV Cable Fees and/or PPV  Satellite  Fees (as the case may be)
payable  by  Affiliate  to  Network   hereunder  for  exhibition  to  PPV  Cable
Subscribers,  Combination PPV Cable Subscribers,  PPV Satellite Subscribers, and


                                       6
<PAGE>

Combination  PPV Satellite  Subscribers  (as the case may be) during a Reporting
Period (as defined  below)  during the Term shall be due and payable  forty-five
(45) days after the end of the calendar month which includes the last day of the
Reporting Period.  (The term "Reporting Period" shall mean the days from the end
of each System's or Satellite distributor's last monthly reporting period (which
date may vary in each System or for each Satellite  distributor from the 20th of
the  calendar  month to the last day of the  calendar  month)  to the end of the
System's or Satellite  distributors  then  current  monthly  reporting  period.)
Affiliate  shall have the right,  however,  to make  credit  adjustments  to any
month's  payment in an amount  equal to the  portion of a previous  month's  PPV
Cable Fees and/or PPV Satellite Fees which represents an overpayment."

      8. The first  sentence of Section 5(e). of the Agreement is hereby amended
to read as follows:

            (e) Each System shall have the right to expend funds for a market or
community  research  survey,  which survey shall be primarily for the purpose of
determining the market response to adult television programming."

      9.   Commencing   as  of  the  date  of  execution   of  this   Amendment,
notwithstanding  anything set forth in Section  7(a)(ii) of the Agreement to the
contrary  regarding  payment by Network of certain  contributions to Systems and
Satellite distributors for certain catalogues or guides used by such Systems and
Satellite   distributors,   Network  shall  remit  such   contributions  to  the
appropriate  Systems and Satellite  distributors  no later than  forty-five (45)
days after  receipt of the  documentation  required  to be  provided  to Network
pursuant to Section 7(a)(ii) of the Agreement.

      10.  Section  7(b)  of the  Agreement  is  hereby  amended  to read in its
entirety as follows:

      "7(b) Network shall send to Affiliate, not later than forty-five (45) days
after the end of each  calendar  month for which  payment  pursuant to Section 7
hereof is due, a  statement  on a form  mutually  acceptable  to  Affiliate  and
Network which sets forth all pertinent  information to compute the amount due to
Affiliate for such  calendar  month.  Network  shall  deliver such  statement to
Affiliate  prior to or along with the amount payable to Affiliate as provided in
this Agreement. Notwithstanding the foregoing, in the event that Network is paid
gross  shopping  revenue by a  fulfillment  agency or other agent on a quarterly
basis,  Network shall send to Affiliate  the reports and payments  hereunder not
later than forty-five (45) days after the end of each such quarter, which report
and payment shall relate to such quarter.

      11.  Section  7(d)  of the  Agreement  is  hereby  amended  to read in its
entirety as follows:

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

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


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<PAGE>

            (ii) Network shall pay to Affiliate *****.

Network  agrees that no direct on-air  marketing or sale of products or services
will advertise, promote, sell, or contain any: (1) illegal products or services;
(2) products or items which invade the body;  or (3) sexual  appliances or items
used for simulated sexual intercourse.

      12. Section 8(f) is hereby amended to read in its entirety as follows:

      (f)  Without  limiting  the  provisions  of Section  8(e) or Section  8(g)
hereof,   Network  will  indemnify,   defend  and  forever  hold  Affiliate  and
Affiliate's  affiliated  companies,  and  each of  Affiliate's  and  Affiliate's
affiliated companies' respective officers,  directors,  employees,  partners and
agents,  harmless  from and  against any and all  losses,  liabilities,  claims,
costs, damages and expenses (including,  without limitation, fines, forfeitures,
attorneys'  fees,  disbursements  and  administrative  or court  costs)  arising
directly  or  indirectly  out of:  (1) sales or  marketing  of any  products  or
services by, through, or on the Service  (including,  but not limited to, claims
related to product liability, patent, trademark,  copyright infringement,  right
of privacy or publicity,  personal  injury,  express or implied  warranties,  or
obscenity,)  or (2) the content of the Service (in its  entirety) or the use and
delivery of the Service  under this  Agreement  (including,  but not limited to,
sponsorship,  promotional  and  advertising  spots,  any  background  music  and
anything else inserted by any party other than  Affiliate),  including,  without
limitation, any losses,  liabilities,  claims, costs, damages and expenses based
upon any lien,  encumbrance,  charge,  lis pendens,  administrative  proceeding,
government  investigation  or  litigation  relating to the Service,  any program
included  therein or any  component  thereof,  or based  upon  alleged or proven
libel,  slander,  defamation,  invasion  of the right of privacy or the right of
publicity,   or  violation  or  infringement  of  copyright   (including   music
performance  rights  for any  and  all  performances  through  to  subscribers),
literary or music synchronization  rights,  obscenity or any other form or forms
of speech (whether or not protected by the  Constitution of the United States or
any State) or otherwise arising out of the content of the Service.

      13. The parties  agree that all the  obligations,  terms,  provisions  and
conditions set forth in the  Agreement,  as amended by Sections 1, 3, 8, 10, 11,
and 12 hereby, shall apply to the exhibition, distribution, subdistribution, and
authorized  reception of the television  programming  service currently known as
"Spice  2" (the  "Multiplex  Service"),  as if the  Multiplex  Service  were the
"Service"  as defined in the  Agreement,  with the  exception  of the  following
amendments  to the  Agreement  applicable  only to the  Multiplex  Service  (the
agreement  for the  provision  of the  Multiplex  Service,  as described in this
paragraph, shall be referred to herein as the Multiplex Agreement):

            a. Section 4 of the  Multiplex  Agreement  is hereby  amended by the
addition of the following new Section 4(i):

                  "4(i) Notwithstanding  anything contained in this Agreement to
the contrary,  no System or Satellite  Distributor  shall  exhibit,  distribute,
subdistribute  or authorize the  reception of the Service  unless such System or
Satellite  Distributor is also  exhibiting,  distributing,  of  authorizing  the
reception of the pay-per-view television programming service known as "Spice" or
"Spice 1" (the "Base  Service");  provided,  however,  that this paragraph shall
apply


                                       8
<PAGE>

only if such System or Satellite Distributor has rights to exhibit,  distribute,
subdistribute or authorize the reception of the Base Service."

            b. Section 4 of the  Multiplex  Agreement  is hereby  amended by the
addition of the following new Section 4(j):

                  "4(j) Notwithstanding  anything contained in this Agreement to
the  contrary,  the  Service  may not be carried by a System  more hours per day
(based on weekly averages of hours of carriage) than the Base Service is carried
by such System; provided,  however, that this paragraph shall apply only if such
System  has  rights to  exhibit,  distribute,  subdistribute  or  authorize  the
reception of the Base Service."

            c. Section  5(b)(i) of the Multiplex  Agreement is hereby amended to
read in its entirety as follows:

      "(b) Subscription

                  (i) For each calendar  month during the Term,  Affiliate  will
pay Network as a Service Cable Fee for each Service  Cable  Subscriber an amount
equal  to the  greater  of  (A)  *****,  or (B)  *****  of  the  Gross  Receipts
attributable  to such Service  Cable  Subscriber.  When the Service is sold to a
Service Cable Subscriber in combination with other services (excluding a package
which  includes the Base  Service) for a package  charge (as, for example,  in a
tier or in a  package  of a la carte  or other  services),  the  Gross  Receipts
attributable to a Service Cable Subscriber for the Service shall be equal to the
total charge for the tier or package of services  sold in  combination  with the
Service,  multiplied  by a fraction,  the  numerator  of which is the a la carte
retail price for the Service, and the denominator of which is the numerator plus
the  aggregate  of the a la carte rates  charged for each of the other  services
including in the tier or package; provided, however, that the amounts charged to
Affiliate for each of the services in the package or tier shall not be disclosed
by Affiliate to Network but, at Network's request, in order to assure Network of
compliance  with this  provision,  Affiliate  shall  make such  charges  and any
pertinent calculations available to a representative of KPMG Peat Marwick (which
representative is neither Network's nor Affiliate's) on a confidential basis, at
Network's cost.  This provision shall survive  termination or expiration of this
Agreement.  Affiliate  shall  pay a  Service  Satellite  Fee to  Network  in the
following  amounts  for  each  Service  Satellite   Subscriber,   based  on  the
subscription term purchased by such Satellite Subscriber,  regardless of whether
such Service Satellite  Subscriber purchases the Service alone, as an a la carte
service  or as part of a tier or  package  of a la carte or other  services  and
regardless of the Gross Receipts attributable thereto:

                                            Service Satellite Fee
                                            Per Service Satellite
              Service Term                  Subscriber
              ------------                  ----------------------

               1 Month                             *****
               3 Months                            *****
               6 Months                            *****
               1 Year                              *****


                                       9
<PAGE>

Notwithstanding  the foregoing,  if the Service is sold in combination  with the
Base Service to Service  Cable  Subscribers  or Service  Satellite  Subscribers,
Service Cable Fees and Service  Satellite Fees shall be paid in accordance  with
Section 5 of the  Affiliation  Agreement  dated as of November  1, 1992  between
Spice, Inc. and Satellite Services, Inc. (the "Base Agreement"), as amended, and
no Service Cable Fees or Service Satellite Fees shall be payable hereunder,"

            d. Section  5(b)(iii) of the Agreement is hereby  amended to read in
its entirety as follows:

                  "(iii) The  Service  Cable  Fees and  Service  Satellite  Fees
payable by Affiliate to Network  hereunder  shall be due and payable  forty-five
(45) days after the end of the calendar month to which they relate. In the event
that the Service is sold to Service  Satellite  Subscribers  for a term  greater
than one month, the Service  Satellite fees payable with respect to such Service
Satellite Subscriber shall be due and payable forty-five (45) days after the end
of the calendar month in which delivery of the Service to such Service Satellite
Subscriber  commences;  provided that if Affiliate does not receive full payment
for a term (or gives a credit),  Affiliate  shall receive a like credit  against
the Service Satellite Fees."

            e. Section  5(c)(i) of the Multiplex  Agreement is hereby amended to
read in its entirety as follows:

      "(c) PPV

                  (i) For each  customer of Affiliate  who receives and pays for
one (l) complete and technically  satisfactory viewing of one viewing segment of
the  Service as a PPV  service  as a PPV Cable  Subscriber,  Affiliate  will pay
Network a PPV Cable Fee in an amount  equal to the greater of, (A) (i) ***** for
orders taken from the date of full execution  hereof through  February 28, 1996,
(ii) ***** for orders  taken from March 1, 1996  through  October 31, 1998 (iii)
***** for orders taken from  November 1, 1998 through  October 31, 2001 and (iv)
***** for orders from  November 1, 2001 through the end of the Initial  Term, or
(B) the Network Share of the Gross  Receipts paid by such PPV Cable  Subscriber.
For purposes of this  subparagraph,  "Network  Share" shall equal the  following
percentage of the Gross Receipts paid by each PPV Cable  Subscriber:  ***** from
the date of execution of this Agreement by both parties hereof through  February
28,  1996;  ***** from March 1, 1996 through  October 31,  1998;  and ***** from
November  1, 1998  through  the end of the Initial  Term.  For each  customer of
Affiliate   who  receives  and  pays  for  one  (1)  complete  and   technically
satisfactory viewing of one viewing segment of the Service as a PPV service as a
PPV Satellite  Subscriber,  Affiliate will pay Network a PPV Satellite Fee in an
amount  equal  to  *****  of the  Gross  Receipts  paid  by such  PPV  Satellite
Subscriber.

Notwithstanding the foregoing,  each System and each Satellite distributor shall
have the right to discount the price of a PPV viewing of the Service  during the
first thirty (30) days after the launch of the Service in such System or by such
Satellite  distributor,  respectively,  and during no more than two (2) ten (10)
day periods each calendar  year.  For orders taken during such first thirty (30)
days and during  each such ten (10) day period,  Affiliate  shall be required to
pay to Network minimum PPV Satellite Fees or PPV Cable Fees (as the case may be)
of ***** per each  complete and  technically  satisfactory  viewing of a viewing
segment of the Service as a PPV


                                       10
<PAGE>

service,  rather than the minimum PPV Satellite Fees or PPV Cable Fees specified
in this Section 5(c)(i). Furthermore, there shall be no PPV Satellite Fee or PPV
Cable Fee (as the case may be)  payable  by  Affiliate  to  Network  for any PPV
viewing of the Service by a subscriber  who pays for such viewing by remitting a
coupon provided by Affiliate or by an affiliate of Affiliate to subscribers that
have  not  ordered  a PPV  movie  or  event  in the six (6)  months  immediately
preceding the issuance of such coupon.

Notwithstanding  the foregoing,  if the Service is sold in combination  with the
Base Service to PPV Cable  Subscribers or PPV Satellite  Subscribers,  PPV Cable
Fees and PPV Satellite Fees shall be paid in accordance with the Base Agreement,
as  amended,  and no PPV  Cable  Fees or PPV  Satellite  Fees  shall be  payable
hereunder.  In  addition,  if in any month  Minimum  Average PPV Fees are due in
accordance with Section  5(c)(i) of the Base Agreement,  no PPV Cable Fees shall
be due and payable hereunder for such month under this Agreement with respect to
PPV Cable Subscribers."

            f. Section 5(d) of the Multiplex  Agreement is hereby deleted in its
entirety.

            g. Section 5 of the  Multiplex  Agreement  is hereby  amended by the
addition of the following new Section 5(j):

                  "(j)  Notwithstanding  anything contained in this Agreement to
the  contrary,  the  retail  price of the  Service  charged  to a Service  Cable
Subscriber,  a PPV Cable Subscriber,  a Satellite Service  Subscriber,  or a PPV
Satellite  Subscriber  shall not exceed the standard retail price  (exclusive of
special promotions) charged by such System or Satellite  distributor in the same
month to a Service Cable Subscriber, a PPV Cable Subscriber, a Satellite Service
Subscriber, or a PPV Satellite Subscriber (as the case may be and as those terms
are  defined  in the  Base  Agreement)  receiving  the Base  Service;  provided,
however,  that this  paragraph  shall  apply  only if such  System or  Satellite
Distributor has rights to exhibit,  distribute,  subdistribute  or authorize the
reception of the Base Service."

                  h.  Section  7(a)(ii)  of the  Multiplex  Agreement  is hereby
deleted in its entirety.

                  i. Exhibit B of the Multiplex  Agreement is hereby replaced by
Exhibit B-1 attached hereto.

                  j. The parties shall execute such further documents (including
without  limitation an  Affiliation  Agreement in the same form as the Multiplex
Agreement as described herein) to give effect to this paragraph.

      14. This Amendment,  the Agreement,  and the Multiplex  Agreement shall be
construed and enforced to give effect to each provision hereof and thereof.  Any
reference in the  Agreement to itself,  or in this  Amendment to the  Agreement,
shall be deemed a reference to the  Agreement  as modified  and amended  hereby,
unless otherwise stated. The Agreement, as so modified and amended, shall be and
remain in full force and effect.


                                       11
<PAGE>

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

                                           SPICE, INC.,
                                           a New York corporation


                                           By: /s/ Steven Saril
                                              ----------------------------------

                                           Name:   Steven Saril
                                                --------------------------------

                                           Title: Executive Vice President
                                                 -------------------------------
                                                  Sales and Marketing

AGREED:
Satellite Services, Inc.,
a Delaware corporation


By: /s/ Jedd S. Palmer
   --------------------------------
Name: Jedd S. Palmer
Title: Vice President, Programming


                                       12

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