PLAYBOY ENTERPRISES INC
EXH. 10.1 - AMENDED AND REST. PTVLA OPER. AGMT
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<DESCRIPTION>EXH. 10.1 - AMENDED AND REST. PTVLA OPER. AGMT
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                                                                  Exhibit 10.1













                          SECOND AMENDED AND RESTATED
                              OPERATING AGREEMENT
                                      FOR
                        PLAYBOY TV - LATIN AMERICA, LLC
                    A CALIFORNIA LIMITED LIABILITY COMPANY












Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission. The
omissions have been indicated by asterisks ("***"), and the omitted text has
been filed separately with the Securities and Exchange Commission.

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                                        TABLE OF CONTENTS

                                                                                                         Page

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ARTICLE 1            DEFINITIONS...........................................................................1

ARTICLE 2            ORGANIZATIONAL MATTERS................................................................8

           2.1       Formation.............................................................................8

           2.2       Name..................................................................................9

           2.3       Term..................................................................................9

           2.4       Office and Agent......................................................................9

           2.5       Addresses of the Members, the Managers and the General Manager........................9

           2.6       Purpose of Company....................................................................9

ARTICLE 3            CAPITAL CONTRIBUTIONS.................................................................9

           3.1       Capital Contribution..................................................................9

           3.2       Additional Capital Contributions.....................................................10

           3.3       Optional Capital Contributions.......................................................10

           3.4       Capital Accounts.....................................................................10

           3.5       No Interest..........................................................................10

           3.6       Iberia Agreements....................................................................11

ARTICLE 4            ALLOCATIONS OF NET INCOME AND NET LOSSES AND DISTRIBUTIONS...........................11

           4.1       Allocations of Net Income and Net Loss...............................................11

           4.2       Distribution of Distributable Cash by the Company....................................11

           4.3       Form of Distribution.................................................................11

           4.4       Restriction on Distributions.........................................................12

                     4.4.1     Restriction................................................................12

                     4.4.2     Method of Determination....................................................12

                     4.4.3     Personal Liability.........................................................12

           4.5       Return of Distributions..............................................................12

           4.6       Withholding..........................................................................12

ARTICLE 5            MANAGEMENT AND CONTROL OF THE COMPANY................................................13

           5.1       The Management Committee.............................................................13

                     5.1.1     General Scope of Authority.................................................13

                     5.1.2     Veto Rights................................................................13

           5.2       Members of the Management Committee; Appointment and Removal; Voting.................14

           5.3       Meetings of the Management Committee.................................................15

           5.4       Delegation of Authority; General Manager and Other Officers..........................15

                     5.4.1     General Power to Delegate Authority........................................15

                     5.4.2     The General Manager........................................................16

                     5.4.3     Duties of the General Manager..............................................16

                     5.4.4     Additional Officers........................................................17

                     5.4.5     Officers Serve at the Pleasure of the Management Committee.................17

           5.5       Interested Party Transactions........................................................17

                     5.5.1     Approval...................................................................17

                     5.5.2     Termination and Remedies...................................................17

                     5.5.3     Priority of Payments.......................................................17

           5.6       Performance of Duties; Liability of Managers.........................................18

                     5.6.1     Standards..................................................................18

           5.7       Management Company...................................................................18

           5.8       Insurance............................................................................18

ARTICLE 6            BUSINESS PLANS AND ANNUAL BUDGETS....................................................18

           6.1       The Business Plan....................................................................18

                     6.1.1     The Business Plan..........................................................18

                     6.1.2     Additions to Business Plan.................................................18

           6.2       Annual Budgets.......................................................................18

                     6.2.1     Adjustment to Annual Budget................................................18

                     6.2.2     Required Local Programming Expenditures Allocations........................19

                     6.2.3     Adjustment to Company Produced Programming Budget and Marketing Budget.....19

ARTICLE 7            [INTENTIONALLY OMITTED]..............................................................19

ARTICLE 8            MEMBERS..............................................................................19

           8.1       Limited Liability....................................................................19

           8.2       Admission of Additional Members......................................................20

           8.3       Withdrawals or Resignations..........................................................20

           8.4       Termination of Membership Interest...................................................20

           8.5       Remuneration To Members..............................................................20

           8.6       Members Are Not Agents; No Management Authority......................................20

           8.7       Meetings of Members..................................................................20

                     8.7.1     Date, Time and Place of Meetings of Members; Secretary.....................20

                     8.7.2     Power to Call Meetings.....................................................20

                     8.7.3     Notice of Meeting..........................................................20

                     8.7.4     Manner of Giving Notice; Affidavit of Notice...............................21

                     8.7.5     Validity of Action.........................................................21

                     8.7.6     Quorum.....................................................................21

                     8.7.7     Adjourned Meeting; Notice..................................................21

                     8.7.8     Waiver of Notice or Consent................................................21

                     8.7.9     Action by Written Consent Without a Meeting................................21

                     8.7.10    Telephonic Participation by Member at Meetings.............................22

                     8.7.11    Record Date................................................................22

                     8.7.12    Proxies....................................................................22

ARTICLE 9            TRANSFER AND ASSIGNMENT OF INTERESTS.................................................23

           9.1       Transfer and Assignment of Interests.................................................23

           9.2       Further Restrictions on Transfer of Interests........................................23

           9.3       Right of First Offer.................................................................23

           9.4       Right of First Refusal...............................................................24

           9.5       Substitution of Members..............................................................25

           9.6       Effective Date of Permitted Transfers................................................26

           9.7       Rights of Legal Representatives......................................................26

           9.8       PEGI Buy-Up Option...................................................................26

           9.9       Claxson Control Over Membership Interest.............................................27

           9.10      Playboy Television B.V. and PTVLA U.S., LLC..........................................28

           9.11      Venus Operations.....................................................................29

ARTICLE 10           CONSEQUENCES OF DEATH, DISSOLUTION RETIREMENT OR BANKRUPTCY OF MEMBER................30

           10.1      Withdrawal Dissolution Event.........................................................30

           10.2      Purchase Price.......................................................................30

           10.3      Notice of Intent to Purchase.........................................................30

           10.4      Election to Purchase Less Than All of the Former Member's Interest...................31

           10.5      Payment of Purchase Price............................................................31

           10.6      Closing of Purchase of Former Member's Interest......................................31

           10.7      Purchase Terms Varied by Agreement...................................................31

ARTICLE 11           ACCOUNTING, RECORDS, REPORTING BY MEMBERS............................................31

           11.1      Books and Records....................................................................31

           11.2      Delivery to Members and Inspection...................................................32

                     11.2.1    Delivery Upon Request......................................................32

                     11.2.2    Inspection.................................................................32

                     11.2.3    Authorized Persons.........................................................32

                     11.2.4    PEI Additional Right of Inspection.........................................32

           11.3      Statements...........................................................................33

                     11.3.1    Annual Report..............................................................33

                     11.3.2    Monthly Report.............................................................33

                     11.3.3    Tax Information............................................................33

           11.4      Financial and Other Information......................................................33

           11.5      Filings..............................................................................33

           11.6      Bank Accounts........................................................................33

           11.7      Accounting Decisions and Reliance on Others..........................................34

           11.8      Tax Matters for the Company Handled by Managers and Tax Matters Member...............34

ARTICLE 12           DISSOLUTION AND WINDING UP...........................................................34

           12.1      Term.................................................................................34

           12.2      Dissolution Events...................................................................34

           12.3      Effect of Dissolution................................................................36

           12.4      Dissolution..........................................................................36

           12.5      Certificate of Dissolution...........................................................37

           12.6      Winding Up...........................................................................37

           12.7      Distributions in Kind................................................................37

           12.8      Order of Payment of Liabilities Upon Dissolution.....................................37

                     12.8.1    Distributions to Members...................................................37

                     12.8.2    Payment of Debts...........................................................37

           12.9      Certificate of Cancellation..........................................................38

           12.10     No Action for Dissolution............................................................38

ARTICLE 13           INDEMNIFICATION AND INSURANCE........................................................38

           13.1      Indemnification of Agents............................................................38

           13.2      Insurance............................................................................38

ARTICLE 14           NON-COMPETITION......................................................................39

           14.1      Prohibited Activities................................................................39

           14.2      Separate Covenants...................................................................39

           14.3      Intent; Severability.................................................................39

           14.4      Injunctive Relief....................................................................39

ARTICLE 15           MEMBER REPRESENTATIONS AND WARRANTIES................................................40

           15.1      Representations and Warranties by Each Member........................................40

                     15.1.1    Experience.................................................................40

                     15.1.2    No Advertising.............................................................40

                     15.1.3    Investment Intent..........................................................40

                     15.1.4    Purpose of Entity..........................................................40

                     15.1.5    Economic Risk..............................................................40

                     15.1.6    No Registration of Membership Interest.....................................40

                     15.1.7    Membership Interest in Restricted Security.................................40

                     15.1.8    No Obligation to Register..................................................40

                     15.1.9    No Disposition in Violation of Law.........................................41

                     15.1.10   Investment Risk............................................................41

                     15.1.11   Restrictions on Transferability............................................41

                     15.1.12   Information Reviewed.......................................................41

                     15.1.13   No Representations By Company..............................................41

                     15.1.14   Consultation with Attorney.................................................42

                     15.1.15   Tax Consequences...........................................................42

                     15.1.16   No Assurance of Tax Benefits...............................................42

           15.2      Indemnity............................................................................42

ARTICLE 16           DISPUTE RESOLUTION...................................................................42

           16.1      Alternate Dispute Resolution.........................................................42

           16.2      Notification and Negotiation.........................................................42

           16.3      Arbitration Rules....................................................................43

           16.4      Selection of Arbitrators.............................................................43

           16.5      Arbitration Procedures...............................................................43

           16.6      Effect of Arbitration................................................................44

           16.7      Statute of Limitations...............................................................44

           16.8      Service of Process...................................................................44

           16.9      Additional Arbitration Provisions....................................................44

           16.10     Availability of Equitable Relief.....................................................44

ARTICLE 17           MISCELLANEOUS........................................................................44

           17.1      Additional Documents and Acts........................................................44

           17.2      Time is of the Essence...............................................................44

           17.3      Remedies Cumulative..................................................................45

           17.4      Currency; Payments...................................................................45

           17.5      Governing Law........................................................................45

           17.6      Authority............................................................................45

           17.7      Assignment; No Third Party Beneficiary...............................................45

           17.8      Agreement Negotiated.................................................................46

           17.9      Waivers; Remedies Cumulative, Amendments, etc........................................46

           17.10     Notices..............................................................................46

           17.11     Public Announcements.................................................................47

           17.12     Survival.............................................................................47

           17.13     Confidentiality......................................................................47

                     17.13.1   General Confidentiality Requirements.......................................48

                     17.13.2   Exceptions to the General Confidentiality Requirements.....................48


                                   EXHIBITS

EXHIBIT A              CAPITAL CONTRIBUTION AND ADDRESSES OF MEMBERS......................................A-1
EXHIBIT B              TAX ALLOCATIONS....................................................................B-1
EXHIBIT C              CALCULATION OF FAIR MARKET VALUE...................................................C-1
EXHIBIT D              EXISTING AFFILIATE AGREEMENTS......................................................D-1
EXHIBIT E              RESTRICTED TRANSFEREES.............................................................E-1
EXHIBIT F              APPROVED COMPANY NAMES.............................................................F-1
EXHIBIT G              REGISTRATION RIGHTS................................................................G-1
EXHIBIT H              RELATED DOCUMENTS..................................................................H-1
EXHIBIT I              EXISTING PTV BV AGREEMENTS.........................................................I-1
EXHIBIT J              EXISTING PTV US AGREEMENTS.........................................................J-1
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                                                                EXECUTION COPY


                          SECOND AMENDED AND RESTATED
                              OPERATING AGREEMENT
                                      FOR
                        PLAYBOY TV - LATIN AMERICA, LLC
                    A CALIFORNIA LIMITED LIABILITY COMPANY


         This Second Amended and Restated Operating Agreement is made and
entered into on December 23, 2002, effective as of April 1, 2002 (the
"Effective Date"), by and between Playboy Entertainment Group, Inc., a
Delaware corporation (together with its permitted successors and assigns
"PEGI") and Lifford International Co. Ltd., an International Business Company
incorporated under the laws of the British Virgin Islands (together with its
permitted successors and assigns "Lifford"), with reference to the following
facts:

         A. On June 14, 1996, Articles of Organization for Playboy TV - Latin
America, LLC, a limited liability company organized under the laws of the
State of California (the "Company"), were filed with the California Secretary
of State, and PEGI and Bloomfield Mercantile, Inc. executed an operating
agreement (the "Initial Operating Agreement").

         B. On November 4, 1998, Bloomfield Mercantile, Inc. assigned all of
its rights and obligations under the Initial Operating Agreement to Lifford
and Lifford was admitted as a Member to the Company.

         C. On November 10, 1998, PEGI and Lifford amended and restated the
Initial Operating Agreement (the "Amended and Restated Operating Agreement")
in its entirety effective as of June 14, 1996.

         D. Concurrently with the execution of this Agreement, PEGI and
Claxson are closing the restructuring (the "Restructuring") of the joint
venture relationships between Playboy Enterprises, Inc., a Delaware
corporation ("PEI"), and its Affiliates, on the one hand, and Claxson
Interactive Group Inc., an International Business Company incorporated under
the laws of the British Virgin Islands ("Claxson") and its Affiliates, on the
other hand.

         E. Concurrently with the execution of this Agreement, Claxson is
contributing Venus to the Company pursuant to the Venus Contribution Agreement
(the "Venus Contribution").

         F. The parties desire to amend and restate the Amended and Restated
Operating Agreement, as hereafter amended and restated, in its entirety as of
the Effective Date.

         NOW, THEREFORE, the parties by this Agreement amend and restate the
Amended and Restated Operating Agreement in its entirety under the laws of the
State of California upon the terms and subject to the conditions of this
Agreement.

                                  ARTICLE 1
                                  DEFINITIONS

         When used in this Agreement, the following terms shall have the
meanings set forth below:

         "AAA" has the meaning set forth in Section 16.3.

         "Act" means the Beverly-Killea Limited Liability Company Act,
codified in the California Corporations Code, Section 17000 et seq., as the
same may be amended from time to time.

         "Additional Buy-Up Option" has the meaning set forth in Section 9.8.

         "Adult-Oriented" means, with respect to a Channel or program, that
such Channel or program features content that is comparable to or more
explicit than the content that is exhibited on the Channels in the Territories
as of the date of this Agreement; it being understood that content that would
be rated no more restrictively than "R" by the Motion Picture Association of
America is not "Adult-Oriented" content as such rating standards are currently
in effect.

         "Adult-Oriented Television Business" means the business of owning or
operating an Adult-Oriented television service or distributing, supplying or
producing Adult-Oriented programming in the Media.

         "Affiliate" means any Person, directly or indirectly through one or
more intermediaries, controlling, controlled by, or under common control with
the specified Person. The term "control" (and "controlled" and "controlling,"
respectively), as used in the immediately preceding sentence, means the
possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of the specified Person (whether by the holding
of shares or other equity interests, the possession of voting rights or
otherwise).

         "Agent" has the meaning set forth in Section 13.1.

         "Agreement" means this Second Amended and Restated Operating
Agreement, as originally executed and as amended from time to time in
accordance with the terms hereof.

         "Amended Affiliation Agreement" means that certain Amended
Affiliation Agreement, executed concurrently herewith and effective as of the
Effective Date, by and between the Company and PTV BV.

         "Amended and Restated Operating Agreement" has the meaning set forth
in the recitals.

         "Annual Budget" has the meaning set forth in Section 6.2.

         "Articles" means the Articles of Organization for the Company
originally filed with the California Secretary of State and as amended from
time to time.

         "Bankruptcy" with respect to a Member means: (a) the filing of an
application by a Member for, or such Member's consent to, the appointment of a
trustee, receiver, or custodian of such Member's other assets; (b) the entry
of an order for relief with respect to a Member in proceedings under the
Bankruptcy Code, as amended or superseded from time to time; (c) the making by
a Member of a general assignment for the benefit of creditors; (d) the entry
of an order, judgment, or decree by any court of competent jurisdiction
appointing a trustee, receiver, or custodian of the assets of a Member unless
the proceedings and the person appointed are dismissed within ninety (90)
days; or (e) the failure by a Member generally to pay such Member's debts as
the debts become due within the meaning of Section 303(h)(l) of the Bankruptcy
Code, as determined by the Bankruptcy Court, or the admission in writing of
such Member's inability to pay its debts as they become due.

         "Bankruptcy Code" means the United States Bankruptcy Code, 11 U.S.C.
101 et seq.

         "Basic Cable" has the meaning currently or hereafter commonly
understood in the television industry, but will also include for all purposes
of this Agreement any broadcast or other transmission (whether by satellite or
otherwise) to television sets or other television devices, now or hereafter
known, of a program service (other than any free television terrestrial
broadcast station) (a) that is included as part of a package of program
services for which members of the public pay a periodic fee for the right to
receive such package of program services, and (b) for which program service a
separate fee is not generally charged for the right to receive the particular
service in question.

         "Branded" means a television service or a Program or block of
Programs where PEGI's or any PEGI Affiliate's name or trademarks are used
either in connection or close affiliation with the service or the Program or
block of Programs, or any related advertising.

         "Business Plan" has the meaning set forth in Section 6.1.

         "Capital Account" means with respect to any Member the capital
account that the Company establishes and maintains for such Member pursuant to
Section 3.4 and Article 1 of Exhibit B.

         "Capital Call" has the meaning set forth in Section 3.3.

         "Capital Call Due Date" has the meaning set forth in Section 3.3.

         "Capital Contribution" means the total value of cash and fair market
value of property (including promissory notes or other obligation to
contribute cash or property) contributed and/or services rendered or to be
rendered to the Company by Members, other than the Venus Contribution.

         "Caribbean Basin" means the following territories: Anguilla, Antigua
and Barbuda, Aruba, Barbados, Bermuda, The British Virgin Islands, The Cayman
Islands, Cuba, Dominica, Dominican Republic, Grenada, Haiti, Jamaica,
Montserrat, St. Kitts & Nevis, St. Lucia, St. Vincent and the Grenadines,
Trinidad and Tobago, and the Turks and Caicos Islands.

         "Channels" means Playboy TV - Latin America, the television program
service based on PEGI's Playboy television network as programmed by PEGI in
the United States from time-to-time, the Spice Networks and Venus, and any
other television program service added from time-to-time, in each case, as
provided for reception within the Territory by PTVLA in accordance with this
Agreement and the Program Supply Agreement (each, a "Channel").

         "Cisneros Group" means (i) Gustavo A. Cisneros, Ricardo J. Cisneros,
their respective wives and direct descendants or any entity, including trusts,
in which Gustavo A. Cisneros and/or Ricardo J. Cisneros or their respective
wives and direct descendants hold, directly or indirectly, at least 50.1% of
the economic benefit or the total shares, participations or interests in
(however designated) corporate stock, partnership interests, limited liability
company interests, or any equivalents thereof of such entity, and which is
controlled, directly or indirectly, by any of such persons; or (ii) any
entity, including trusts, which is controlled, directly or indirectly, by any
of Gustavo A. Cisneros and/or Ricardo J. Cisneros or their respective wives
and direct descendants.

         "Claim" has the meaning set forth in Section 15.2.

         "Claxson" has the meaning set forth in the recitals.

         "Claxson Guarantee Obligation" has the meaning set forth in Section
12.2.3.

         "Code" means the Internal Revenue Code of 1986, as amended from time
to time, the provisions of succeeding law, and to the extent applicable, the
Treasury Regulations.

         "Company" has the meaning set forth in the recitals.

         "Company Produced Programming" shall mean Programs produced by the
Company for exhibition on the Channels.

         "Company Produced Programming Budget" has the meaning set forth in
Section 6.2.1.

         "Corporations Code" means the California Corporations Code, as
amended from time to time, and the provisions of succeeding law.

         "CPI" means the Consumer Price Index for all Urban Consumers as
released by the Bureau of Labor Statistics, U.S. Department of Labor. If the
Bureau of Labor Statistics, U.S. Department of Labor (i) substantially revises
the methodology (in contrast to benchmark adjustments or other corrections of
previously published data), (ii) discontinues publication of any of the data
referred to above or (iii) temporarily discontinues publication of any of the
data referred to above, the parties shall select a substitute for the revised
or discontinued data, in order to provide substitute data to lead to the same
adjustment result, insofar as possible, as would have been achieved by
continuing the use of the original data as it may have fluctuated had it not
been revised or discontinued.

         "Dissolution Event" has the meaning set forth in Section 12.2.

         "Distributable Cash" means the amount of cash that the Management
Committee deems available for distribution to the Members, taking into account
all debts, liabilities and obligations of the Company then due and amounts
that the Management Committee deems necessary to place into reserves for
customary and usual claims with respect to the Company's business.

         "Distribution Agreement" means that certain Amended Distribution
Agreement, dated as of December 23, 2002 and effective as of April 1, 2002,
between the Company and PEGI.

         "DTM" has the meaning set forth in Section 3.6.

         "DTM Arrangement" has the meaning set forth in Section 3.6.

         "EBITDA" means, for any period, the consolidated earnings from
continuing operations of the Company and its Subsidiaries for such period
before interest expense, income taxes, the cumulative effect of changes in
accounting principle, depreciation of property and equipment, amortization of
intangible assets, amortization of investments in entertainment programming
and amortization of deferred financing fees.

         "Economic Interest" means a Member's share of one or more of the
Company's Net Income, Net Losses, and distributions of the Company's assets
pursuant to this Agreement and the Act, but shall not include any other rights
of a Member, including, but not limited to, the right to vote or participate
in the management, or except as provided in Section 17106 of the Corporations
Code, any right to information concerning the business and affairs, of the
Company.

         "Effective Date" is defined in the preamble.

         "Existing PTV BV Agreements" has the meaning set forth in Section
9.10(a).

         "Existing PTV US Agreements" has the meaning set forth in Section
9.10(a).

         "Fair Market Value" with respect to the Company or any asset thereof
means the value determined pursuant to Exhibit C.

         "Fiscal Year" means the Company's fiscal year, which shall be the
calendar year.

         "Former Member" has the meaning set forth in Section 10.1.

         "Former Member's Interest" has the meaning set forth in Section 10.1.

         "Fully-Participating Member" has the meaning set forth in Section
3.3.1.

         "GAAP" has the meaning set forth in Section 11.1.

         "General Manager" has the meaning set forth in Section 5.4.2.

         "Iberia" means Spain, Portugal and Andorra.

         "Initial Operating Agreement" has the meaning set forth in the
recitals.

         "Initial Option Percentage" has the meaning set forth in Section 9.8.

         "Lifford" has the meaning set forth in the preamble.

         "Lifford Managers" has the meaning set forth in Section 5.2.1.

         "Lifford US" has the meaning set forth in Section 9.10(b).

         "Major Currency" as used herein shall mean US Dollars, UK Pounds,
Euros or Japanese Yen.

         "Majority Interest" means one or more Percentage Interests of Members
that taken together exceed fifty percent (50%) of the aggregate of all
Percentage Interests.

         "Management Co." means Claxson USA, Inc., a Florida corporation
(formerly known as Cisneros Television Services Inc.)

         "Management Committee" has the meaning set forth in Section 5.1.1.

         "Management Services Agreement" means the Management Services
Agreement entered into as of November 1, 1996 between the Company and
Management Co. relating to the provision of services by Management Co., as
amended by the First Amendment to the Management Services Agreement dated as
of August 31, 1999, and as further amended by the Amended and Restated
Management Services Agreement dated as of the date hereof.

         "Manager" has the meaning set forth in Section 5.2.1.

         "Marketable Security" shall mean common stock or an American
Depositary Receipt that is listed for trading on the New York Stock Exchange,
the NASDAQ National Market System, or the London Stock Exchange.

         "Marketing Budget" has the meaning set forth in Section 6.2.1.

         "Media" means all forms of television exhibition, transmission and
distribution whether now existing or developed in the future and whether on a
subscription, pay-per-view, video-on-demand or free basis, including but not
limited to the following: (i) conventional VHF or UHF television broadcast,
(ii) Basic Cable and pay cable, (iii) "over the air pay" subscription
television (STV), (iv) direct broadcasting by satellite (DBS), (v) master
antenna television systems (MATV), (vi) multipoint distribution services
(MDS), (vii) multichannel multipoint distribution services (MMDS), (viii)
satellite master antenna television systems (SMATV), and (ix) microwave
transmission. Except as otherwise provided in the Program Supply Agreement,
Media shall exclude Streaming.

         "Member" means each Person who (a) is an initial signatory to this
Agreement or has been admitted to the Company as a Member in accordance with
this Agreement and (b) has not resigned, withdrawn, been expelled or
dissolved.

         "Member Offerees" has the meaning set forth in Section 9.3.

         "Membership Interest" means a Member's entire interest in the Company
including the Member's Economic Interest, the right to vote on or participate
in the management, and the right to receive information concerning the
business and affairs, of the Company.

         "Negotiated Purchase Price" has the meaning set forth in Section 9.3.

         "Net Income" and "Net Losses" have the meanings set forth in Article
2 of Exhibit B hereto.

         "Non-Contributing Member" has the meaning set forth in Section 3.3.1.

         "Notice" has the meaning set forth in Section 16.2.

         "Offer Notification" has the meaning set forth in Section 9.3.

         "Offered Membership Interest" has the meaning set forth in
Section 9.3.

         "Optional Capital Contribution" has the meaning set forth in
Section 3.3.

         "PEGI" has the meaning set forth in the preamble.

         "PEGI Buy-Up Option" has the meaning set forth in Section 9.8.

         "PEGI Managers" has the meaning set forth in Section 5.2.1.

         "PEI" has the meaning set forth in the recitals.

         "PEI Representatives" has the meaning set forth in Section 11.2.4.

         "PEI Stock" has the meaning set forth in Section 9.8(b).

         "Percentage Interest" means the percentage of a Member set forth
opposite the name of such Member under the column "Member's Percentage
Interest" in Exhibit A hereto, as such percentage may be adjusted from time to
time pursuant to the terms of this Agreement.

         "Person" means an individual, general partnership, limited
partnership, limited liability company, corporation, trust, estate, real
estate investment trust, association or any other entity.

         "Program" or "Programming" means any television program which is, or
may be scheduled to be, broadcast or transmitted on the Channels.

         "Program Supply Agreement" means the Amended Program Supply
Agreement, executed concurrently herewith and effective as of the Effective
Date, between PEGI and the Company with respect to the supply of programming
for the Channels and the license of certain trademarks.

         "Proposed Purchaser" has the meaning set forth in Section 9.4(a).

         "PTV BV" has the meaning set forth in Section 9.10(a).

         "PTV Holdings" has the meaning set forth in Section 9.10(a).

         "PTV UK" has the meaning set forth in Section 3.6.

         "PTV US" has the meaning set forth in Section 9.10(a).

         "PTV US Affiliation Agreement" means that certain Affiliation
Agreement, dated as of December 23, 2002 and effective as of April 1, 2002, by
and between the Company and PTV US.

         "Purchase Notification" has the meaning set forth in Section 9.3.

         "Reference Rate" means the reference rate as set forth from time to
time by The Bank of America Corporation.

         "Related Documents" means those agreements set forth on Exhibit H
attached hereto.

         "Remaining Members" has the meaning set forth in Section 10.1.

         "Remediable Breach" has the meaning set forth in Section 12.2.2(b).

         "Renewal" has the meaning set forth in Section 5.4.5.

         "Required Expenditure Adjustment" has the meaning set forth in
Section 6.2.3.

         "Response" has the meaning set forth in Section 16.2.

         "Restructuring" has the meaning set forth in the recitals.

         "Rules" has the meaning set forth in Section 16.3.

         "SEC" means the U.S. Securities and Exchange Commission.

         "Second Option Percentage" has the meaning set forth in Section 9.8.

         "Securities Act" has the meaning set forth in Section 15.1.6.

         "Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended.

         "Selling Member" has the meaning set forth in Section 9.3.

         "Shortfall" has the meaning set forth in Section 6.2.3.

         "Spice Networks" means collectively, Spice, Spice 2, Spice Platinum,
The Hot Zone, The Hot Network, Vivid TV, and successor networks, if any, as
PEGI may include from time-to-time, as programmed by PEGI.

         "Streaming" means ***.

         "Subsequent Transfer Offer Period" has the meaning set forth in
Section 9.3.

         "Subsequent Third-Party Transfer Offer Period" has the meaning set
forth in Section 9.4(b).

         "Subsidiary" means, with respect to any Person at any time, any
corporation, partnership, limited liability company or other entity, a
majority of the equity interests of which shall, at the time as of which any
determination is made, be owned, controlled or held by such Person either
directly or through Subsidiaries of such Person.

         "Tax Matters Member" shall be Lifford or such Member's successor as
designated pursuant to Section 11.8.

         "Term" has the meaning set forth in Section 12.1.

         "Terms" has the meaning set forth in Section 9.3.

         "Territory" means (a) Mexico and each country comprising Central and
South America; (b) Iberia; (c) the Caribbean Basin; and (d) the territories
and possessions of each of the foregoing, if any.

         "Third Party" has the meaning set forth in Section 17.13.2(a).

         "Third Party Buyer" has the meaning set forth in Section 9.3.

         "Third Party Transfer Notice" has the meaning set forth in Section
9.4(a).

         "Third-Party Transfer Offer Period" has the meaning set forth in
Section 9.4(b).

         "Transfer" has the meaning set forth in Section 9.1.

         "Transfer Offer Period" has the meaning set forth in Section 9.3.

         "Treasury Regulations" has the meaning set forth in Exhibit B.

         "Unbranded" means a television service or a Program or block of
Programs where PEGI's or any PEGI Affiliate's name or trademarks are not used
either in connection or close affiliation with the service or the Program or
block of Programs or any related advertising other than in customary
production, logo credits or end sequences of such Program or block of
Programs, for use solely in the credit block in advertising for such Program,
where applicable.

         "Venus" means that certain premium and pay-per-view adult content
channel, launched in 1994, and owned and distributed throughout Latin America
by Claxson and its Subsidiaries and Affiliates.

         "Venus Argentina" has the meaning set forth in Section 9.11.

         "Venus Assets" has the meaning set forth in the Venus Contribution
Agreement.

         "Venus Contribution" has the meaning set forth in the recitals.

         "Venus Contribution Agreement" means that certain Venus Contribution
Agreement dated as of December 23, 2002, by and among Claxson, Lifford, the
Company and PEGI.

         "Venus Entities" has the meaning set forth in Section 9.11.

         "Venus International" has the meaning set forth in Section 9.11.

         "Web Site Revenue Share Agreement" means the Web Site Revenue Share
Agreement, executed concurrently herewith and effective as of the Effective
Date, by and among Playboy.com, Inc., a Delaware corporation, Claxson and
PTVLA.

         "Withdrawal Dissolution Event" means, with respect to any Member, one
or more of the following: the expulsion, Bankruptcy, dissolution or occurrence
of any other event that terminates the continued membership of any Member
unless the other Member(s) consent to continue the business of the Company
pursuant to Section 10.1.

         "Zagasse" has the meaning set forth in Section 9.10(b).

                                  ARTICLE 2
                            ORGANIZATIONAL MATTERS

         2.1 Formation. Pursuant to the Act, the Members formed a limited
liability company under the laws of the State of California by filing the
Articles with the California Secretary of State and entering into the Initial
Operating Agreement. The rights and liabilities of the Members shall be
determined pursuant to the Act and this Agreement. To the extent that the
rights or obligations of any Member are different by reason of any provision
of this Agreement than they would be in the absence of such provision, this
Agreement shall, to the extent permitted by the Act, control.

         2.2 Name. The name of the Company shall be "Playboy TV - Latin
America, LLC." The Management Committee shall be permitted to change the name
of the Company to any of the names set forth on Exhibit F attached hereto at
any time, or to any other name which does not appear on Exhibit F with the
approval of the PEGI Managers, within twenty-four (24) months from the date
hereof. The business of the Company may be conducted under such name or, upon
compliance with applicable laws, any other name set forth on Exhibit F. The
General Manager shall file any fictitious name certificates and similar
filings, and any amendments thereto, that the Management Committee considers
appropriate or advisable. Notwithstanding the foregoing, if there is no PEGI
Manager on the Management Committee or PEGI is no longer a Member, at PEGI's
request the Articles shall be amended to change the name of the Company to a
name that does not contain or utilize any Playboy trademarks or any
confusingly similar designation or mark.

         2.3 Term. The term of this Agreement shall be co-terminus with the
period of duration of the Company provided in the Articles, unless extended or
sooner terminated as hereinafter provided.

         2.4 Office and Agent. The Company shall continuously maintain an
office and registered agent in the State of California as required by the Act.
The principal office of the Company shall be as the Management Committee may
determine. The Company also may have such offices, anywhere within and without
the State of California, as the Management Committee from time to time may
determine, or the business of the Company may require. The registered agent
shall be as stated in the Articles or as otherwise determined by the
Management Committee.

         2.5 Addresses of the Members, the Managers and the General Manager.
The respective addresses of the Members are set forth on Exhibit A, which
exhibit will be modified from time to time to reflect changes therein. The
respective addresses of the Managers and the General Manager shall be
maintained in the books of the Company and made available to any Member on
request.

         2.6 Purpose of Company. The purpose of the Company is to engage in
any lawful activity for which a limited liability company may be organized
under the Act. Notwithstanding the foregoing, without the majority approval of
the Management Committee and subject to the veto right under Section 5.1.2(a),
the Company shall not engage in any business other than (i) the Adult-Oriented
Television Business in the Territory; (ii) licensing programming to third
parties in the Territory, except for Company Produced Programming, which can
be distributed worldwide to PEGI or one of its Affiliates pursuant to the
terms of the Distribution Agreement; (iii) development and marketing of
Adult-Oriented commercial websites, subject to any restrictions set forth in
the Web Site Revenue Share Agreement, targeted to Spanish and Portuguese
language audiences in the Territory, including the PTVLA websites, Venus
commercial website and Spice websites; and (iv) such other activities
ancillary and related thereto as may be necessary, advisable or appropriate,
in the reasonable opinion of the Management Committee to further the
businesses set forth in clauses (i) - (iii) above. Notwithstanding any
territorial or other restrictions contained in this Agreement, the parties
hereto acknowledge that the distribution of the Channels in Puerto Rico in the
Spanish language via DirecTV Latin America, LLC, so long as such distribution
is conducted solely in Puerto Rico in Spanish via DTH, shall not be deemed to
violate any such territorial restrictions.

                                  ARTICLE 3
                             CAPITAL CONTRIBUTIONS

         3.1 Capital Contribution. Each Member has contributed the amounts set
forth on Exhibit A as of the Effective Date. Exhibit A shall be revised to
reflect any additional contributions contributed in accordance with Section
3.3. Notwithstanding anything to the contrary contained herein, the parties
agree and acknowledge that the Venus Contribution shall have no impact on the
Capital Accounts of Lifford and PEGI.

         3.2 Additional Capital Contributions. No Member shall be required to
make any additional Capital Contributions.

         3.3 Optional Capital Contributions. The Management Committee may
reasonably determine in good faith from time to time, that additional Capital
Contributions from the Members (each, an "Optional Capital Contribution") are
necessary or appropriate for the conduct of the Company's business, including
without limitation, expansion or diversification thereof. Upon the Management
Committee making such a determination, the Company shall provide written
notice of such request for additional Capital Contributions (a "Capital Call")
to each Member not less than thirty (30) days prior to the date such Optional
Capital Contributions are due (the "Capital Call Due Date"). Such notice shall
set forth the aggregate amount of the Capital Call, the purposes for which
such Capital Contributions will be used and the date on which Optional Capital
Contributions are due. No Member shall be obligated to make any such Capital
Contributions. However, each Member shall have the opportunity, but not the
obligation, to participate in a Capital Call on a pro rata basis in accordance
with its Percentage Interest by making an Optional Capital Contribution. In
addition, a Member may elect to make its Optional Capital Contribution
conditional (a "Conditional Capital Contribution") upon the other Members
making their respective Optional Capital Contributions, in which event such
Conditional Capital Contribution shall be deemed made, if at all, only at such
time as the other Members make their respective Optional Capital
Contributions. If a Member elects to make a Conditional Capital Contribution
and the other Members decline or fail to make their respective Optional
Capital Contributions, then the Company shall immediately return the
Conditional Capital Contribution to the Member making such Conditional Capital
Contribution and such Conditional Capital Contribution shall be deemed never
to have been made. Immediately following any Optional Capital Contribution by
a Member, the Percentage Interests shall be adjusted to reflect the new
relative proportions of the Capital Accounts of the Members. Each of Lifford
and PEGI will have the right, by written notice to the General Manager and the
other Members at least five (5) business days prior to the Capital Call Due
Date, to fund its Optional Capital Contributions through retention by the
Company of the fees payable under the Related Documents then accrued, to the
extent sufficient to cover such requirements, subject to the timely review and
approval of the other Members of the offset amount.

         3.3.1 If a Member (a "Non-Contributing Member") does not make an
Optional Capital Contribution equal to its pro rata share of the Capital Call
by the Capital Call Due Date, the Company shall notify each Member that made
an Optional Capital Contribution equal to its pro rata share of such Capital
Call (each, a "Fully-Participating Member") that such Fully-Participating
Member may, within the fourteen (14) day period from the date of such notice,
increase its Optional Capital Contribution to the Company to cover amounts
that the Non-Contributing Member declined to contribute on a pro rata basis,
in which case the Percentage Interests of the Members shall be adjusted to
reflect the new relative proportions of the Capital Accounts of the Members.

         3.4 Capital Accounts. The Company has established an individual
Capital Account for each Member in accordance with Article 1 of Exhibit B
hereto. If a Member transfers all or a part of its Membership Interest in
accordance with this Agreement, such Member's Capital Account attributable to
the transferred Membership Interest shall carry over to the new owner of such
Membership Interest pursuant to Treasury Regulations Section
l.704-l(b)(2)(iv)(l). Each Member's Capital Account as of the Effective Date
is set forth in Exhibit A hereto.

         3.5 No Interest. No Member shall be entitled to receive any interest
on its Capital Contributions.

         3.6 Iberia Agreements. The parties acknowledge that Playboy TV UK
Limited ("PTV UK") has entered into certain agreements through Desarrollos
Tecnicos Multimedia s.l. ("DTM") as listed on Exhibit D hereto, relating to
the distribution of Spice Platinum and The Adult Channel in Iberia (the "DTM
Arrangement"). Promptly following the Closing, the Company shall have the
right to determine the following:

                  (1) Whether to permit DTM to continue to enter into
         agreements on behalf of PTV UK and its Affiliates in the Territory;
         and

                  (2) Whether to require that the agreements that DTM has
         entered into on behalf of PTV UK and its Affiliates be transferred to
         the Company or terminated, and PTVI or one of its Affiliates shall
         bear all costs associated with such termination.

The Company shall inform PEGI of its decision with regard to these matters
promptly, and promptly thereafter PEGI shall cause PTV UK to use its
commercially reasonable efforts to implement the decision of the Company. If
the Company elects to cause the DTM Arrangement to be transferred to the
Company, such transfer shall be made for no additional consideration. In the
event that agreements required by the Company to be transferred to the Company
are not assignable according to their terms, PEGI shall cause PTV UK to use
its commercially reasonable efforts to terminate such agreements as promptly
as practicable in accordance with the terms of such agreements, and PTVI or
one of its Affiliates shall bear all costs associated with such termination.
Until such time as the transfer of the DTM Arrangement to the Company is
complete, PEGI shall pay over to the Company all of the net revenues that it
receives from the DTM Arrangement, less a distribution fee of twenty percent
(20%) of such revenues. In the event that the Company wishes to receive the
Spice Platinum feed or The Adult Channel feed for distribution through the DTM
Arrangement in Iberia following the transfer of such agreements, the Company
and PEGI shall negotiate in good faith the terms under which such feed will be
supplied, taking into account the revenues likely to be derived by the Company
from such feed and the fixed costs of Spice Platinum and The Adult Channel.

                                  ARTICLE 4
          ALLOCATIONS OF NET INCOME AND NET LOSSES AND DISTRIBUTIONS

         4.1 Allocations of Net Income and Net Loss. Net Income and Net Loss
shall be allocated to the Members in accordance with Article 1 of Exhibit B.

         4.2 Distribution of Distributable Cash by the Company. Subject to
applicable law and any limitations contained elsewhere in this Agreement, the
Management Committee shall cause the Company to distribute Distributable Cash
on a quarterly basis to the Members, which distributions shall be made to the
Members in proportion to their Percentage Interests as of the end of the
relevant quarter.

         4.3 Form of Distribution. Except as provided in Section 12.7, a
Member, regardless of the nature of the Member's Capital Contribution, has no
right to demand and receive any distribution from the Company in any form
other than money. No Member may be compelled to accept from the Company a
distribution of any asset in kind in lieu of a proportionate distribution of
money being made to other Members. Except upon a dissolution and the winding
up of the Company, no Member may be compelled to accept a distribution of any
asset in kind.

         4.4 Restriction on Distributions.

         4.4.1 Restriction. No distribution shall be made if, after giving
effect to the distribution:

         (a) The Company would not be able to pay its debts as they become due
in the usual course of business.

         (b) The Company's total assets would be less than the sum of its
total liabilities.

         4.4.2 Method of Determination. The Management Committee may base a
determination that a distribution is not prohibited on any of the following:
(i) financial statements prepared on the basis of accounting practices and
principles that are generally consistent with those used to prepare the
Company's audited financial statements; (ii) a fair valuation; or (iii) any
other method that is reasonable in the circumstances.

         Except as provided in Section 17254(e) of the Corporations Code, the
effect of a distribution is measured as of the date the distribution is
authorized if the payment occurs within one hundred twenty (120) days after
the date of authorization, or the date payment is made if it occurs more than
one hundred twenty (120) days of the date of authorization.

         4.4.3 Personal Liability. A Member or Manager who votes for a
distribution in violation of this Agreement or the Act is personally liable to
the Company for the amount of the distribution that exceeds what could have
been distributed without violating this Agreement or the Act if it is
established that the Member or Manager did not act in compliance with the
terms of this Agreement. Any Member or Manager who is so liable shall be
entitled to compel contribution from (a) each other Member or Manager who also
is so liable and (b) each Member for the amount the Member received with
knowledge of facts indicating that the distribution was made in violation of
this Agreement or the Act.

         4.5 Return of Distributions. Except for distributions made in
violation of the Act or this Agreement, no Member shall be obligated to return
any distribution to the Company or pay the amount of any distribution for the
account of the Company or to any creditor of the Company. The amount of any
distribution returned to the Company by a Member or paid by a Member for the
account of the Company or to a creditor of the Company shall be added to the
account or accounts from which it was subtracted when it was distributed to
the Member.

         4.6 Withholding. Notwithstanding any other provision of this
Agreement, the Management Committee is authorized to take any action that it
determines to be necessary or appropriate to cause the Company to comply with
any federal, state, local or foreign withholding requirement with respect to
any payment, allocation or distribution by the Company to any Member or other
person. Any amount withheld pursuant to the preceding sentence shall be
treated as a distribution to the Member to which such amount would have been
distributed under this Agreement but for the withholding. If any such
withholding requirement with respect to any Member exceeds the amount
distributable to such Member under this Agreement, or if any such withholding
requirement was not satisfied with respect to any item previously paid,
allocated or distributed to such Member, such Member or any successor or
assignee with respect to such Member's interest hereby indemnifies and agrees
to hold harmless the other Members and the Company for such excess amount or
such unsatisfied withholding requirement, as the case may be, and any
penalties assessed on such amounts.

                                  ARTICLE 5
                     MANAGEMENT AND CONTROL OF THE COMPANY

         5.1 The Management Committee.

         5.1.1 General Scope of Authority. The business and affairs of the
Company shall be managed by a management committee of the Company (the
"Management Committee") appointed and constituted in the manner provided in
Section 5.2 hereof. The Management Committee shall be responsible for all
aspects of the operations and development of the Company and, except as
otherwise expressly provided for in this Agreement, the Management Committee
shall have exclusive authority and full discretion with respect to the
management of the business of the Company and shall have the exclusive right,
power and authority to cause the Company to do, or cause to be done, all acts
and actions which in its sole judgment are necessary, proper, convenient or
desirable in order to operate and conduct the business of the Company and to
carry out and fulfill the purposes of the Company.

         5.1.2 Veto Rights. Notwithstanding anything to the contrary contained
in this Agreement: (i) the Lifford Managers may (so long as Lifford or any of
its Affiliates is a Manager) and the PEGI Managers may (so long as PEGI or any
of its Affiliates is a Manager) veto any decision of the Management Committee
to perform, or cause the Company to perform, any of the acts or transactions
described in subsections (d) and (h) below; and (ii) the Lifford Managers may
(so long as Lifford and its Affiliates hold, in aggregate, Percentage
Interests equal to at least 10%) and the PEGI Managers may (so long as PEGI
and its Affiliates hold, in aggregate, Percentage Interests equal to at least
10%) veto any decision of the Management Committee to perform, or cause the
Company to perform, any of the following acts or transactions:

         (a) any material change in the basic business of the Company as
defined in Section 2.6;

         (b) any material acquisition or sale by the Company of any business
(whether by asset purchase, stock purchase, merger or other business
combination);

         (c) any borrowing by the Company or making or guaranteeing loans by
the Company or incurrence or guaranteeing of obligations of others by the
Company in the aggregate at any time exceeding the lesser of (i) one times
EBITDA of the Company for the most recent Fiscal Year or (ii) $5.0 million;
provided, however, that the Company may not pledge, transfer, assign or
otherwise encumber its rights under any agreements with PEI (or its
Affiliates), including without limitation, any of the Related Documents, in
connection with the foregoing;

         (d) the sale of all or substantially all of the assets of the Company
or the merger, consolidation or reorganization of the Company with or into
another Person;

         (e) the acceptance of any additional capital other than Optional
Capital Contributions from any Member pursuant to Section 3.3;

         (f) the issuance of Membership Interests except in connection with an
Optional Capital Contribution for a Member pursuant to Section 3.3;

         (g) other than pursuant to the Related Documents, transactions with
any Member or any Affiliate of any Member;

         (h) commencement by the Company of a voluntary case under the
Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect; or consent by the Company to the entry of an order
for relief in an involuntary case, or to the conversion of an involuntary case
to a voluntary case under any such law; or consent by the Company to the
appointment of or taking of possession by a receiver, trustee or other
custodian for all or substantially all of its property; or making by the
Company of a general assignment for the benefit of creditors;

         (i) any amendment, modification or waiver relating to a Related
Document;

         (j) any distribution by the Company on the Membership Interests other
than distributions of Distributable Cash;

         (k) loans by the Company to any Member or any Affiliate of any
Member;

         (l) the selection or replacement of the Company's accountants if the
selected or replacement accountants are not one of the following firms:
PricewaterhouseCoopers, LLP, KPMG, LLP, Ernst & Young, LLP or Deloitte &
Touche LLP; or

         (m) (i) filing any tax return or (ii) making any tax election or
taking any position with respect to any examination audit or proceeding by a
taxing authority that could have an adverse impact on any Member or the
Company.

         5.2 Members of the Management Committee; Appointment and Removal;
Voting.

         5.2.1 For so long as Lifford (or its Affiliates) and PEGI (or its
Affiliates) are the only Members, the Management Committee shall consist of
five members, three representatives selected by Lifford (the "Lifford
Managers") and two representatives selected by PEGI (the "PEGI Managers"). The
number of Managers shall not be amended without the approval of both the
Lifford and the PEGI Managers. No other Member shall have the right to appoint
Managers. Each member of the Management Committee is referred to as a
"Manager", and, collectively, as the "Managers". A Manager need not be a
resident of the State of California or a citizen of the United States. To the
fullest extent permitted by law, no Manager shall be deemed an agent or
sub-agent of the Company. Each Member, by execution of this Agreement, agrees
to, consents to, and acknowledges the delegation of powers and authority to
such Managers and the Management Committee, and to the actions and decisions
of such Managers and the Management Committee within the scope of such
Manager's and Management Committee's authority as provided herein. No Manager
shall have the authority in his capacity as a Manager to enter into any
transaction on behalf of the Company.

         5.2.2 Each of Lifford and PEGI shall have the absolute and
unconditional right from time to time to designate the Managers appointed by
it by delivery of written notice to the Members. A Manager may be removed with
or without cause at the sole discretion of the Member that appointed that
Manager by delivery of written notice to the other Members. A vacancy on the
Management Committee may only be filled by the Member that originally
appointed the Manager whose death, disability, removal or resignation created
such vacancy. Each of Lifford and PEGI shall also have the right to appoint
alternates to each Manager by designating the name of such alternates in a
written notice to the other Members. In case of the absence of a Manager, any
individual designated as an alternate for that Manager shall have the right
and power to exercise all rights and powers of the absent Manager.

         5.2.3 The Lifford Managers and PEGI Managers will be designated by
each such Member within thirty days (30) days after the date hereof by written
notice to the other Member and to the Company. Such individuals will serve on
the Management Committee until their death, disability, removal or
resignation.

         5.2.4 Except as provided in Section 5.1.2 or as otherwise
specifically provided in this Agreement, the affirmative vote of Managers
holding the Majority Interests shall be required for any decision or approval
of the Management Committee or to cause the Company to engage in any act or
transaction. The Managers shall have voting power in proportion to the ratio
of Percentage Interests held by the Member appointing them. All Managers
appointed by a Member will collectively exercise such voting power and each
Member entitled to designate Managers will designate one Manager to vote on
behalf of all Managers appointed by such Member in the event of a disagreement
among the Managers appointed by such Member.

         5.3 Meetings of the Management Committee.

         5.3.1 Regular quarterly meetings of the Management Committee shall be
held without call or notice at such time as shall from time to time be fixed
by standing resolution of the Management Committee. Special meetings of the
Management Committee may be held at any time whenever called by any Manager.
Written Notice of a special meeting of the Management Committee shall be given
to the other Managers by the Manager calling the meeting at least seventy-two
(72) hours before such special meeting.

         5.3.2 All meetings of the Management Committee shall be held at such
location as the Management Committee shall agree by majority vote; provided,
however, at least one (1) meeting per year shall be held in Miami or Los
Angeles as the Management Committee shall agree by majority vote. The presence
of at least one Lifford Manager and at least one PEGI Manager at a duly
noticed meeting of the Management Committee shall constitute a quorum for the
transaction of business; provided, however, that with respect to the taking of
any action for which the vote of any Managers may be excluded or any matter
for which a unanimous vote is required to take action (e.g., pursuant to
Section 5.1.2), the presence of at least one Manager appointed by each Member
whose Managers are entitled to vote on such action shall constitute a quorum
for purpose of taking such action. Managers may participate in a meeting
through the use of conference telephone or similar communications equipment,
and such Managers shall be considered present in person as long as all
Managers participating in such meeting can hear one another.

         5.3.3 Every act of the Management Committee taken at any meeting of
the Management Committee, however called and noticed or wherever held, shall
be as valid as though made or performed at a meeting duly held after regular
call and notice, if a quorum is present and if, either before or after the
meeting, each of the Managers not present or who, though present, has prior to
the meeting or at its commencement, protested the lack of proper notice to
such Manager, signs a written waiver of notice or a written consent to holding
such meeting or approval of the minutes thereof.

         5.3.4 Any action required or permitted to be taken at any meeting of
the Management Committee may be taken without a meeting if one Lifford Manager
and one PEGI Manager consent thereto in writing, and the writing is filed with
the minutes of proceedings of the Management Committee.

         5.4 Delegation of Authority; General Manager and Other Officers.

         5.4.1 General Power to Delegate Authority. The Management Committee
may delegate the right, power and authority to manage the day-to-day business,
affairs, operations and activities of the Company to any officer of the
Company or Management Co. pursuant to the Management Services Agreement, or to
any other Person with the prior approval of the PEGI Managers, subject to the
ultimate direction, control and supervision of the Management Committee;
provided, however, that no officer or other Person, including without
limitation Management Co., shall be authorized to take any action or engage in
any activity where unanimous approval of the Management Committee is required
or where the approval of a specified Person is required, without first
obtaining the required approvals.

         5.4.2 The General Manager. The Members intend that the Management
Committee delegate the management of the day-to-day business, affairs,
operations and activities of the Company to a general manager (the "General
Manager"). Subject to the supervisory powers of the Management Committee, the
General Manager shall have general and active management of the business of
the Company and shall see that all orders and resolutions of the Management
Committee are carried into effect. The General Manager shall have the power to
execute any agreements and instruments on behalf of the Company, except where
the execution thereof shall be expressly reserved by the Management Committee
or delegated by the Management Committee to some other officer or agent of the
Company. The General Manager shall have such other powers and duties as may be
prescribed by the Management Committee or this Agreement.

         5.4.3 Duties of the General Manager. Unless and until any of the
following duties are delegated to another officer by the Management Committee,
the General Manager shall:

         (a) attend all meetings of the Management Committee and all meetings
of the Members, unless directed not to do so by the Management Committee, and
record all the proceedings of the meetings in a book to be kept for that
purpose;

         (b) give, or cause to be given, notice of all special meetings of the
Management Committee and all meetings of the Members;

         (c) keep, or cause to be kept, at the principal executive office, a
register, or a duplicate register, showing the names of all Members and their
addresses, their Percentage Interests, and all documents described in this
Agreement or required under the Act to be maintained at the principal
executive office of the Company;

         (d) keep and maintain, or cause to be kept and maintained, adequate
and correct books and records of accounts of the properties and business
transactions of the Company, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital, Membership Interests and
Economic Interests, which books of account shall at all reasonable times be
open to inspection by any Manager or his/her representatives;

         (e) have or supervise the custody of the funds and securities of the
Company, keep or cause to be kept full and accurate accounts of receipts and
disbursements in books belonging to the Company, and deposit or cause to be
deposited all monies and other valuable effects in the name and to the credit
of the Company in such depositories as may be designated by the Management
Committee;

         (f) disburse or cause to be disbursed the funds of the Company as may
be ordered by the Management Committee, taking proper vouchers for such
disbursements, and render to the Management Committee, at their regular
meetings, or when Members so require, at a meeting of the Members, an account
of the financial condition of the Company; and

         (g) prepare or cause to be prepared the various financial statements
and reports required to be delivered to the Members in this Agreement.

         5.4.4 Additional Officers. The Company may have such other officers
with such powers and duties as the Management Committee shall determine from
time to time.

         5.4.5 Officers Serve at the Pleasure of the Management Committee.
Subject to whatever rights an officer may have under a contract of employment
with the Company, all officers of the Company shall serve at the pleasure of
the Management Committee. Other than the renewal on substantially similar
terms of the employment agreement of an officer, including, but not limited to
the General Manager, of the Company (a "Renewal"), the Company shall not enter
into any new employment agreement or amend any existing employment agreement
with an officer of the Company, including, but not limited to, the General
Manager, without the prior approval of the PEGI Managers during any of the
following time periods: (i) the period of time commencing upon the receipt of
an Offer Notification from Lifford pursuant to Section 9.3 hereof and expiring
on the later of (a) the date that PEGI may no longer exercise its right of
first offer or (b) the date of closing on PEGI's purchase of the additional
Membership Interests pursuant to such right of first offer; (ii) the period of
time commencing upon the receipt of a Third-Party Transfer Notice pursuant to
Section 9.4 hereof and expiring on the later of (a) the date that PEGI may no
longer exercise its right of first refusal of (b) the date of closing on
PEGI's purchase of the additional Membership Interests pursuant to such right
of first refusal; and (iii) the period of time commencing upon PEGI's notice
that it is exercising its buy-up option pursuant to Section 9.8 hereof and
expiring upon the closing of PEGI's purchase of additional Membership
Interests pursuant to such buy-up option; provided, however, that any Renewal
during any such time periods shall not be for a term extending beyond the end
of such time periods and shall not result in the Company being subject to any
liabilities with respect to such officer after the end of such time periods.

         5.5 Interested Party Transactions.

         5.5.1 Approval. Except for transactions provided in the Related
Documents, the Company shall only engage in a transaction with a Member or any
Affiliate of a Member if the transaction is on terms and conditions fair and
reasonable to the Company and at least as favorable to the Company as those
generally available in a similar transaction between parties operating at
arm's length and is approved by the Management Committee. A transaction shall
conclusively be deemed to have met the above requirements if, after full
disclosure, the transaction is unanimously approved by the Management
Committee. In addition, any transaction between the Company and any member of
the Cisneros Group, for so long as any such member directly or indirectly
holds an interest in Claxson, shall be subject to the approval of the PEGI
Managers. Each Member agrees to disclose to the Management Committee the
nature and extent of the interest of such Member and its Affiliates in any
transaction to be acted on by the Management Committee pursuant to this
Section 5.5.1 prior to such action. Subject to applicable law, if a Member or
an Affiliate thereof engages in a transaction with the Company, such Member
and/or such Affiliate shall have the same rights and obligations with respect
thereto as a Person who is not a Member.

         5.5.2 Termination and Remedies. With respect to any contract between
the Company and a Member or any Affiliate of a Member, including but not
limited to every Related Document, the Managers appointed by the Members
independent of such contract shall have the right, acting by majority vote, to
determine what actions, if any, should be taken upon the other party's default
or non-performance and to cause the Company to exercise any and all remedies
it may have under such contract or applicable law, including without
limitation, the termination of such contract.

         5.5.3 Priority of Payments. The General Manager and the Management
Committee shall cause any payments made to Lifford and its Affiliates to be
made pari passu with payments to be made to PEGI and its Affiliates.

         5.6 Performance of Duties; Liability of Managers.

         5.6.1 Standards. A Manager shall not be liable to the Company or to
any Member for any loss or damage sustained by the Company or any Member,
unless the loss or damage shall have been the result of fraud, deceit, gross
negligence, reckless or intentional misconduct, or a knowing violation of law
by the Manager. The Managers shall perform their managerial duties in good
faith, in a manner they reasonably believe to be in the best interests of the
Company and its Members, and with such care, including reasonable inquiry, as
an ordinarily prudent person in a like position would use under similar
circumstances. A Manager who so performs the duties of Manager shall not have
any liability by reason of being or having been a Manager of the Company.

         5.7 Management Company. The Members intend that the General Manager
delegate certain of the day-to-day operational and financial responsibilities
of the Company to Management Co., subject to the terms and conditions of the
Management Services Agreement. Such services shall be rendered under the
supervision of the General Manager and, as set forth in the Management
Services Agreement, shall include, without limitation, the following services:
financial management, payroll services and accounting; collections and
accounts payable; facilities acquisition and management; and management of day
to day business and legal affairs.

         5.8 Insurance. The Members shall cause the Company to secure errors
and omissions and other customary liability insurance for the Company covering
exhibitions of programming by the Company, which insurance policies shall meet
Claxson's customary standards, and liability and other insurance covering the
activities of the Company consistent with good business customs and practices
in the Territory and the other locations in which the Company conducts
business. All insurance policies shall name each Member and their respective
Affiliates as named insureds.

                                  ARTICLE 6
                       BUSINESS PLANS AND ANNUAL BUDGETS

         6.1 The Business Plan.

         6.1.1 The Business Plan. The Management Committee and the General
Manager shall conduct the business of the Company in accordance with the three
year Business Plans and the Annual Budgets (each as defined below), as
adjusted from time to time by the Management Committee. The financial model
for the operation of the Company and the Channels, as annually updated
pursuant to Section 6.1.2, is the "Business Plan." On or before March 15,
2003, the Management Committee shall deliver to the Members a copy of the
revised Business Plan for the Company for fiscal years 2003 through 2005.

         6.1.2 Additions to Business Plan. The Business Plan shall be updated
annually by the Management Committee not later than sixty (60) days prior to
the conclusion of the then current Fiscal Year and each Business Plan so
adopted shall cover the next three (3) consecutive Fiscal Years.

         6.2 Annual Budgets. The annual update to the Business Plan shall
include a budget for the coming Fiscal Year (the "Annual Budget"). The General
Manager will prepare the Annual Budget and present it to the Management
Committee for approval at least sixty (60) days prior to commencement of the
applicable Fiscal Year. The approved Annual Budget for a given Fiscal Year
will supersede the data contained in the Business Plan for that Fiscal Year.

         6.2.1 Adjustment to Annual Budget. Beginning January 1, 2003 and
ending December 31, 2003, the Company shall spend *** to produce Company
Produced Programming (the "Company Produced Programming Budget") and shall
spend *** for marketing purposes (the "Marketing Budget"). For each subsequent
Fiscal Year during the term of the Program Supply Agreement, the Company shall
spend the Company Produced Programming Budget and the Marketing Budget, each
of which shall be adjusted each Fiscal Year by any change in the CPI. ***.
Subject to Section 6.2.3, the Company shall not spend less than the annual
Marketing Budget and Company Produced Programming Budget for that Fiscal Year
without the prior written approval of the PEGI Managers.

         6.2.2 Required Local Programming Expenditures Allocations. Beginning
on January 1, 2003 and ending on December 31, 2003, the Company shall spend:
(i) at least *** of the Company Produced Programming Budget to produce Branded
Company Produced Programming; and (ii) no more than *** of the Company
Produced Programming Budget to produce Unbranded Company Produced Programming.
In each of Fiscal Years 2004 through 2007, the Company shall spend at least
*** of the Company Produced Programming Budget to produce Branded Company
Produced Programming and no more than *** of the Company Produced Programming
Budget to produce Unbranded Company Produced Programming. In each of Fiscal
Years 2008 through 2012, the Company shall spend at least *** of the Company
Produced Programming Budget to produce Branded Company Produced Programming
and no more than *** of the Company Produced Programming Budget to produce
Unbranded Company Produced Programming.

         6.2.3 Adjustment to Company Produced Programming Budget and Marketing
Budget. In the event that the Company would be unable to meet its obligations
as they become due if it met its payment obligations to PEGI pursuant to the
Program Supply Agreement (a "Shortfall"), the Management Committee, in its
sole discretion, may reduce the amount of the annual Company Produced
Programming Budget and annual Marketing Budget by an amount equal to the
Shortfall in order to allow the Company to make such payments to PEGI (a
"Required Expenditure Adjustment"); provided, however, that the Management
Committee shall cause any payments made to PEGI or Lifford and their
respective Affiliates or members of the Cisnero Group, thereafter to be
reduced pari passu with such Required Expenditure Adjustment; provided,
further, that if the cash flow provided from operations of the Company after
any Required Expenditure Adjustment is sufficient to enable the Company to
make all or any part of the annual Company Produced Programming Budget or
annual Marketing Budget in effect prior to such Required Expenditure
Adjustment, then the Company shall fund the maximum possible local Company
Produced Programming Budget and Marketing Budget until such initial annual
required Company Produced Programming Budget or annual Marketing Budget has
been met. The Management Committee shall make no more than two (2) such
Required Expenditure Adjustments during the Term.

                                  ARTICLE 7
                            [INTENTIONALLY OMITTED]

                                  ARTICLE 8
                                    MEMBERS

         8.1 Limited Liability. Except as required under the Act or as
expressly set forth in this Agreement, no Member shall be personally liable
for any debt, obligation, or liability of the Company, whether that liability
or obligation arises in contract, tort, or otherwise. In the event any Member
becomes personally liable for any debt, obligation or liability of the Company
arising from any action or approval of the Members or Management Committee
taken without the approval of such Member or the Managers appointed by such
Member where such approval is required under the terms hereof, then, in
addition to any other rights set forth herein, the Members taking or who
appointed the Managers taking such action shall indemnify and hold harmless
such Member from and against any liability, loss, claim or damage, including
but not limited to, reasonable attorneys fees and cost, arising from or
relating to such action.

         8.2 Admission of Additional Members. Subject to Sections 5.1.2 and
9.2, the Management Committee may admit to the Company additional Members. Any
additional Members shall obtain Membership Interests and will participate in
the management, Net Income, Net Losses, and distributions of the Company on
such terms as are determined by the Management Committee.

         8.3 Withdrawals or Resignations. No Member may withdraw or resign
from the Company.

         8.4 Termination of Membership Interest. Upon the transfer of a
Member's Membership Interest in violation of this Agreement or the occurrence
of a Withdrawal Dissolution Event as to such Member that does not result in
the dissolution of the Company, the Membership Interest of a Member shall be
terminated by the Managers designated by the other Members or such Membership
Interest shall be purchased by the Company or remaining Members as provided
herein. Each Member acknowledges and agrees that such termination or purchase
of a Membership Interest upon the occurrence of any of the foregoing events is
not unreasonable under the circumstances existing as of the Effective Date.

         8.5 Remuneration To Members. Except as otherwise authorized in, or
pursuant to, this Agreement, no Member is entitled to remuneration for acting
in the Company business, subject to the entitlement of Managers or Members
winding up the affairs of the Company to reasonable compensation.

         8.6 Members Are Not Agents; No Management Authority. Pursuant to this
Agreement and the Articles, the management of the Company is vested in the
Management Committee. No Member, acting solely in the capacity of a Member, is
an agent of the Company nor can any Member in such capacity bind nor execute
any instrument on behalf of the Company. The Members shall have no power to
participate in the management of the Company except as expressly authorized by
this Agreement and except as expressly required by the Act.

         8.7 Meetings of Members.

         8.7.1 Date, Time and Place of Meetings of Members; Secretary.
Meetings of Members may be held at such date, time and place within or without
the State of California as the Management Committee may fix from time to time.
No annual or regular meetings of Members is required. At any Members' meeting,
the General Manager shall preside at the meeting and shall act as secretary of
the meeting.

         8.7.2 Power to Call Meetings. Unless otherwise prescribed by the Act,
meetings of the Members may be called by the Management Committee acting by
majority vote or by any Member or group of Members holding more than fifteen
percent (15%) of the Percentage Interests for the purpose of addressing any
matters on which the Members may vote.

         8.7.3 Notice of Meeting. Written notice of a meeting of Members shall
be sent or otherwise given to each Member not less than ten (10) nor more than
sixty (60) days before the date of the meeting. The notice shall specify the
place, date and hour of the meeting and the general nature of the business to
be transacted. No other business may be transacted at such meeting without the
consent of all Members. Upon written request to the General Manager by any
Person entitled to call a meeting of Members, the General Manager shall
immediately cause notice to be given to the Members entitled to vote that a
meeting will be held at a time requested by the Person calling the meeting,
not less than ten (10) days nor more than sixty (60) days after the receipt of
the request. If the notice is not given within twenty (20) days after the
receipt of the request, the Person entitled to call the meeting may give the
notice.

         8.7.4 Manner of Giving Notice; Affidavit of Notice. Notice of any
meeting of Members shall be given either personally or by first-class mail or
telegraphic or other written communication, charges prepaid, addressed to the
Member at the address of that Member appearing on the books of the Company or
given by the Member to the Company for the purpose of notice.

         8.7.5 Validity of Action. Any action approved at a meeting other than
by unanimous approval of those entitled to vote, shall be valid only if the
general nature of the proposal so approved was stated in the notice of meeting
or in any written waiver of notice.

         8.7.6 Quorum. The presence in person or by proxy of the holders of a
Majority Interest shall constitute a quorum at a meeting of Members. The
Members present at a duly called or held meeting at which a quorum is present
may continue to do business until adjournment, notwithstanding the loss of a
quorum, if any action taken after loss of a quorum (other than adjournment) is
approved by at least Members holding a Majority Interest.

         8.7.7 Adjourned Meeting; Notice. Any Members' meeting, whether or not
a quorum is present, may be adjourned from time to time by the vote of the
majority of the Membership Interests represented at that meeting, either in
person or by proxy, but in the absence of a quorum, no other business may be
transacted at that meeting, except as provided in Section 8.7.6. When any
meeting of Members is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place are announced at a
meeting at which the adjournment is taken, unless a new record date for the
adjourned meeting is subsequently fixed, or unless the adjournment is for more
than forty-five (45) days from the date set for the original meeting, in which
case the Managers shall set a new record date. At any adjourned meeting the
Company may transact any business that might have been transacted at the
original meeting.

         8.7.8 Waiver of Notice or Consent. The actions taken at any meeting
of Members however called and noticed, and wherever held, have the same
validity as if taken at a meeting duly held after regular call and notice, if
a quorum is present either in person or by proxy, and if, either before or
after the meeting, each of the Members entitled to vote, who was not present
in person or by proxy, signs a written waiver of notice or consents to the
holding of the meeting or approves the minutes of the meeting. All such
waivers, consents or approvals shall be filed with the Company records or made
a part of the minutes of the meeting.

         Attendance of a Member or its representative at a meeting shall
constitute a waiver of notice of that meeting, except when the Member or such
representative objects, at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or convened, and
except that attendance at a meeting is not a waiver of any right to object to
the consideration of matters not included in the notice of the meeting if that
objection is expressly made at the meeting. Neither the business to be
transacted nor the purpose of any meeting of Members need be specified in any
written waiver of notice.

         8.7.9 Action by Written Consent Without a Meeting. Any action that
may be taken at a meeting of Members may be taken without a meeting, if a
consent in writing setting forth the action so taken, is signed and delivered
to the Company within sixty (60) days of the record date for that action by
Members having not less than the minimum number of votes that would be
necessary to authorize or take that action at a meeting at which all Members
entitled to vote on that action at a meeting were present and voted. All such
consents shall be filed with the General Manager and shall be maintained in
the Company records. Any Member giving a written consent, or the Member's
proxy holders, may revoke the consent by a writing received by the General
Manager before written consents of the number of votes required to authorize
the proposed action have been filed.

         Unless the consents of all Members entitled to vote have been
solicited in writing, notice of any Member approval without a meeting by less
than unanimous written consent, shall be given at least ten (10) days before
the consummation of the action authorized by such approval to those Members
entitled to vote who have not consented in writing.

         8.7.10 Telephonic Participation by Member at Meetings. Members may
participate in any Members' meeting through the use of any means of conference
telephones or similar communications equipment as long as all Members
participating can hear one another. A Member so participating is deemed to be
present in person at the meeting.

         8.7.11 Record Date.

         (a) Fixed By Managers or Members. To enable the Company to determine
the Members of record entitled to notices of any meeting or to vote, or
entitled to receive any distribution or to exercise any rights in respect of
any distribution or to exercise any rights in respect of any other lawful
action, the Management Committee or Members representing more than fifteen
percent (15%) of the Percentage Interests, may fix, in advance, a record date,
that is not more than sixty (60) days nor less than ten (10) days prior to the
date of the meeting and not more than sixty (60) days prior to any other
action.

         (b) If Not Fixed. If no record date is fixed, the record date for
determining Members entitled to notice of or to vote at a meeting of Members
shall be at the close of business on the business day preceding the day on
which notice is given or, if notice is waived, at the close of business on the
business day preceding the day on which the meeting is held. The record date
for determining Members entitled to give consent to Company action in writing
without a meeting shall be the day on which the first written consent is
given. The record date for determining Members for any other purpose shall be
at the close of business on the day on which the Management Committee adopts
the resolution relating thereto, or the sixtieth (60th) day prior to the date
of the other action, whichever is later.

         8.7.12 Proxies. Every Member entitled to vote on any matter shall
have the right to do so either in person or by one or more agents authorized
by a written proxy signed by the person and filed with the General Manager. A
proxy shall be deemed signed if the Member's name is placed on the proxy
(whether by manual signature, typewriting, telegraphic transmission,
electronic transmission or otherwise) by the Member or the Member's attorney
in fact. A proxy may be transmitted by an oral telephonic transmission if it
is submitted with information from which it may be determined that the proxy
was authorized by the Member or the Member's attorney in fact. A validly
executed proxy that does not state that it is irrevocable shall continue in
full force and effect unless revoked by the Person executing it, before the
vote pursuant to that proxy, by a writing delivered to the General Manager
stating that the proxy is revoked, or by a subsequent proxy executed by, or
attendance at the meeting and voting in person by, the Person executing the
proxy; provided, however, that no proxy shall be valid after the expiration of
eleven (11) months from the date of the proxy, unless otherwise provided in
the proxy. The revocability of a proxy that states on its face that it is
irrevocable shall be governed by the provisions of Corporations Code Sections
705(e) and 705(f) or any successor provisions.

                                  ARTICLE 9
                     TRANSFER AND ASSIGNMENT OF INTERESTS

         9.1 Transfer and Assignment of Interests. No Member shall be entitled
to transfer, assign, sell, encumber or in any way alienate or dispose of
(each, a "Transfer"), including to an Affiliate, all or any portion of its
Membership Interest if such Transfer: (i) is to a party which is materially
less creditworthy than the transferring Member (taking into account the
obligations of such transferring Member's Affiliates under this Agreement and
the Related Documents); or, (ii) would cause the termination or dissolution of
the Company. Notwithstanding the foregoing, a Member shall be entitled to
pledge all of such Member's Membership Interest as collateral as part of a
blanket pledge of all of such Member's assets to a financial institution.
Transfers in violation of this Article 9 shall be null and void and the
transferee shall have no right to vote or participate in the management of the
business, property and affairs of the Company, to exercise any rights of a
Member or to receive the share of one or more of the Company's Net Income, Net
Losses and distributions of the Company's assets to which the transferor would
otherwise be entitled. After the consummation of any transfer of any part of a
Membership Interest, the Membership Interest so transferred shall continue to
be subject to the terms and provisions of this Agreement and any further
transfers shall be required to comply with all the terms and provisions of
this Agreement. If the secured party receiving a pledge of an Economic
Interest of a Member forecloses on such Economic Interest, such Person shall
not be admitted as a Member, shall not be entitled to further transfer or
otherwise dispose of such Economic Interest without the approval of the
Members and shall have no rights of a Member other than the right to receive
the share of one or more of the Company's Net Income, Net Losses and
distributions of the Company's assets to which the pledging Member would
otherwise be entitled.

         9.2 Further Restrictions on Transfer of Interests. In addition to
other restrictions found in this Agreement, no Member shall Transfer all or
any part of its Membership Interest: (a) without compliance with Section
15.1.9, and (b) if the Membership Interest to be transferred, assigned, sold
or exchanged, when added to the total of all other Membership Interests sold
or exchanged in the preceding twelve (12) consecutive months prior thereto,
would cause the termination of the Company under the Code, as determined by
the Managers. Notwithstanding anything to the contrary contained in this
Agreement, Lifford (nor any of its respective Affiliates which may hold
Membership Interests, collectively) shall not Transfer any Membership Interest
to any of the Persons set forth on Exhibit E or any of such Persons'
Affiliates, successors or assigns.

         9.3 Right of First Offer. In addition to other restrictions found in
this Agreement, in the event any Member (such Member being herein referred to
as the "Selling Member"), desires to Transfer any of its Membership Interest
to any Person which is not an Affiliate of such Selling Member, and, in the
case of Lifford, any member of the Cisneros Group (a "Third Party Buyer"),
such Selling Member must first make a bona fide offer in good faith (including
as to price and terms) to Transfer such Membership Interest to the other
Members (such other Members being referred to as the "Member Offerees") on a
pro rata basis and must Transfer such Membership Interest to any Member
Offeree that accepts such offer as set forth below. In the event any such
Selling Member desires to Transfer such offered Membership Interest, such
Selling Member will notify in writing (the "Offer Notification") the Company
and the Member Offerees of such desire setting forth the amount of the
Membership Interest proposed to be Transferred and the proposed purchase price
thereof (the "Offered Membership Interest") and other terms of the proposed
sale (the "Terms"); provided, that the consideration must be in United States
Dollars and must constitute a bona fide, good faith offer. For a period of
thirty (30) days following the receipt of the Offer Notification, the Selling
Member and the Member Offerees shall negotiate in good faith to agree upon a
final purchase price and terms for the Offered Membership Interest (a
"Negotiated Purchase Price"). If the Selling Member and the Member Offerees
agree on a Negotiated Purchase Price, then the Member Offerees shall purchase
the Offered Membership Interest at the Negotiated Purchase Price. If the
Selling Member and the Member Offerees are unable in good faith to agree on a
purchase price and terms, the Member Offerees shall have the right for a
period of fifteen (15) days following the end of the thirty (30) day
negotiation period, to elect to purchase all or any portion of its pro rata
share of such Offered Membership Interest on the Terms originally set forth in
the Offer Notification (the "Transfer Offer Period"). If the Member Offeree
elects not to purchase the Offered Membership Interest prior to the
termination of the forty-five (45) day period, such Member Offeree shall be
deemed to have waived its right to purchase the Offered Membership Interest
under this Section 9.3 (but not under any other section of this Agreement). If
any Member Offeree desires to purchase such Offered Membership Interest, it
will notify in writing (the "Purchase Notification") the Selling Member of
such desire. In the event that any Member Offeree does not elect to purchase
its full pro rata share of any such Offered Membership Interest, such
unpurchased Offered Membership Interest will be offered by the Selling Member
to the other Member Offerees (if any) subscribing to purchase the Offered
Membership Interest on a pro rata basis for a period of fifteen (15) days
commencing on the expiration of the Transfer Offer Period (the "Subsequent
Transfer Offer Period"); provided, however, that if there is only one other
Member, there shall be no Subsequent Transfer Offer Period. In the event that,
after compliance with the foregoing provisions of this Section 9.3, the Member
Offerees, taken together, fail to purchase all of the Offered Membership
Interest, then (i) the Member Offerees shall have no right to purchase any of
the Offered Membership Interest (other than pursuant to Section 9.4 or 9.8
below), and (ii) such Selling Member may offer to Transfer all of the Offered
Membership Interest to any Person; provided, however, that any such Transfer
must be made in accordance with the provisions set forth in Section 9.4 below.
The closing of any purchase by the Member Offerees of any of the Offered
Membership Interest as provided in this Section 9.3 will take place at the
offices of the Company on such date as designated by the Member Offerees
occurring within fifteen (15) days after the expiration of the Subsequent
Transfer Offer Period, or if there be none, the Transfer Offer Period. At such
closing, the Member Offerees will be entitled to receive customary
representations and warranties from the Selling Member regarding ownership and
title of the Offered Membership Interest and the Company will evidence such
Transfer on the books of the Company.

         9.4 Right of First Refusal.

         (a) Subject to, and after compliance with, the requirements set forth
in Section 9.3 above, in the event any Selling Member desires to Transfer any
of its Membership Interest to any Third Party Buyer who shall have made a
written bona fide offer to purchase such Membership Interest, which, in the
Selling Member's reasonable judgment, has a substantial likelihood of closing
and is not subject to a financing or other material contingency other than
applicable antitrust or similar clearances, provided, that such offer may be
subject to a financing contingency if such offer is accompanied by financing
commitments from institutions of national standing in the United States or
other international institutions of comparable standing on usual and customary
terms, the Selling Member will promptly furnish to the Company and all Member
Offerees written notification (the "Third Party Transfer Notice") of such
desire to Transfer such Membership Interest and of the bona fide offered price
for such Membership Interest, the method of payment of such offered price
(which must be in either cash in a Major Currency or Marketable Securities,
provided that such Marketable Securities must be freely tradable upon the
receipt thereof by the Selling Member), the identity of the prospective
purchaser or purchasers (the "Proposed Purchaser") and all other pertinent
terms and conditions of such bona fide offer to purchase such Membership
Interest.

         (b) For a period of thirty (30) days commencing on the date that the
Member Offerees receive the Third-Party Transfer Notice (provided, that, in
the event that the price for the Membership Interest set forth in the Third
Party Transfer Notice is less than *** of the price set forth in the Offer
Notification delivered by the Selling Member to the other Members pursuant to
Section 9.3, or the consideration is different than, or the terms are more
favorable to the third party than the terms set forth in the Offer
Notification, such period shall be extended for an additional five (5)
business days, the Member Offerees will have the right to elect to purchase on
a pro rata basis all (but not less than all) of the Membership Interest on the
same terms and conditions as described in the Third-Party Transfer Notice and
at the bona fide offer price using cash in a Major Currency if the Proposed
Purchaser is using cash in a Major Currency, or using its own Marketable
Securities or cash, if the Proposed Purchaser intends to use its own
Marketable Securities as consideration (the "Third Party Transfer Offer
Period"); provided, that if PEGI is a Member Offeree and desires to use PEI
Stock as its own Marketable Securities, (i) the PEI Stock so used shall have
the registration rights set forth on Exhibit G hereto; (ii) the closing of
PEGI's purchase and the transfer of the PEI Stock shall occur on the effective
date of the registration statement filed by PEI with respect to such PEI
Stock; and (iii) the number of shares of PEI Stock issued with respect to such
payment will be determined at the time the registration statement filed by PEI
with respect to such PEI Stock becomes effective by dividing (x) the aggregate
consideration by (y) the average closing trading price for PEI Stock for the
twenty (20) trading days ending on the trading day three trading days prior to
the effective date of such registration statement. Any Member Offeree desiring
to purchase any Membership Interest must notify the Selling Member in writing
of such desire. In the event that any Member Offeree does not elect to
purchase its full pro rata share of any Membership Interest proposed to be
Transferred, such unpurchased Membership Interest will be offered by the
Selling Member to the other Member Offerees (if any) subscribing to purchase
Membership Interests on a pro rata basis for a period of 15 days commencing on
the expiration of the Third-Party Transfer Offer Period (the "Subsequent Third
Party Transfer Offer Period"); provided, however, that if there is only one
other Member, there shall be no Subsequent Third Party Transfer Offer Period.
No such Membership Interest may be made available for purchase by any Proposed
Purchaser pursuant to the remaining provisions of this Section 9.4 unless and
until all Member Offerees have had an opportunity to purchase all such
Membership Interest in accordance with the provisions of this clause (b).

         (c) Except as otherwise provided in Section 9.4(b), the closing of
any purchase by the Member Offerees of any Membership Interest as provided in
this Section 9.4 will take place at the offices of the Company on such date as
designated by the Member Offerees occurring within 15 days after the
expiration of the Subsequent Third-Party Transfer Offer Period, or if there be
none, the Third-Party Transfer Offer Period. At such closing, the Member
Offerees will be entitled to receive customary representations and warranties
from the Selling Member regarding ownership and title of the subject
Membership Interest and the Company will evidence such Transfer on the books
of the Company.

         (d) In the event that, after compliance with the foregoing provisions
of this Section 9.4, the Member Offerees fail to purchase all of the
Membership Interest proposed to be Transferred by the Selling Member, then for
a period of one-hundred-twenty (120) days commencing on the date that no
Member Offeree remains entitled to exercise its right to purchase any
Membership Interest in accordance with the foregoing provisions of this
Section 9.4, the Selling Member may Transfer to the Proposed Purchaser any of
the Membership Interest described in the Third-Party Transfer Notice which the
Member Offerees are not purchasing; provided, however, that (1) any such
Transfer to the Proposed Purchaser must be made for the consideration and upon
the terms and conditions set forth in the Third-Party Transfer Notice, (2) any
such transfer to the Proposed Purchaser remains subject to those restrictions
on transfers contained in this Agreement, including the restrictions on
transfer included in this Article 9, and (3) at the closing of any such
Transfer, the Proposed Purchaser executes and delivers to the Company a
counterpart of, or an agreement adopting, this Agreement. Such Member Offerees
who fail to purchase all of the Membership Interest proposed to be transferred
by the Selling Member shall be deemed to have consented to the Transfer of the
Membership Interest to the Third-Party Transferee. If the Selling Member shall
not consummate the Transfer of such remaining Membership Interest to the
Proposed Purchaser within such one-hundred-twenty (120) day period, such
Membership Interest shall remain subject to the provisions of this Agreement
and the Seller Member shall not thereafter Transfer any such Membership
Interest to any Person without again first complying with all of the
provisions of this Agreement.

         9.5 Substitution of Members. A transferee of a Membership Interest
shall have the right to become a substitute Member only if (a) the
requirements of Sections 9.1 and 9.2 relating to securities and tax
requirements hereof are met, (b) the requirements of Sections 9.3 and 9.4
relating to rights of first offer and rights of first refusal are met, (c)
such Person executes an instrument reasonably satisfactory to the Management
Committee accepting and adopting the terms and provisions of this Agreement,
and (c) such Person pays any reasonable expenses in connection with its
admission as a new Member. The admission of a Member shall not result in the
release of the Member who assigned the Membership Interest from any liability
that such Member may have to the Company.

         9.6 Effective Date of Permitted Transfers. Any permitted transfer of
all or any portion of a Membership Interest shall be effective as of the first
business day following the date upon which the requirements of Sections 9.1,
9.2, 9.3, 9.4 and 9.5 have been met. The General Manager shall promptly
provide the Members with written notice of such transfer. Any transferee of a
Membership Interest shall take subject to the restrictions on transfer imposed
by this Agreement.

         9.7 Rights of Legal Representatives. If a Member who is an individual
dies or is adjudged by a court of competent jurisdiction to be incompetent to
manage the Member's person or property, the Member's executor, administrator,
guardian, conservator, or other legal representative may exercise all of the
Member's rights for the purpose of settling the Member's estate or
administering the Member's property, including any power the Member has under
this Agreement to give an assignee the right to become a Member. If a Member
is a corporation or other entity and is dissolved or terminated, the powers of
that Member may be exercised by its legal representative or successor.

         9.8 PEGI Buy-Up Option.

         (a) Starting on December 23, 2002 and continuing through December 23,
2012, PEGI (or its Affiliates who are then Members of the Company) has the
option to acquire up to *** of additional Membership Interests in the Company
(the applicable percentage from time to time being the "Initial Option
Percentage") by purchasing such additional Membership Interests from Lifford
(and any of its Affiliates which hold Membership Interests, collectively) (the
"PEGI Buy-Up Option") provided, however; (i) that if PEGI (and its Affiliates,
collectively) Transfers Membership Interests to any Person(s) which is not an
Affiliate of PEGI, the Initial Option Percentage will be adjusted downward,
pro rata, in accordance with the decline in PEGI's and its Affiliates'
aggregate Membership Interests in the Company; (ii) in the event that Lifford
receives additional Membership Interests in the Company, the Initial Option
Percentage shall be increased in accordance with the then outstanding
Membership Interests of the Company such that following the exercise by PEGI
of its option to acquire the Initial Option Percentage pursuant to this
Section 9.8, PEGI and any third Person not affiliated with Lifford shall hold
*** of the Membership Interests of the Company. Starting on December 23, 2007
and continuing through December 23, 2008, PEGI (or its Affiliates who are then
Members of the Company) has the option (the "Additional Buy-Up Option") to
acquire up to the remaining *** of additional Membership Interest in the
Company (the applicable percentage from time to time being the "Second Option
Percentage") by purchasing all of the additional Membership Interests owned by
Lifford (and any of its Affiliates which hold Membership Interests,
collectively); provided, that PEGI (or its Affiliates) has previously or
concurrently exercised its option to acquire the entire Initial Option
Percentage, it being the intent of the Members that PEGI would own *** of the
Membership Interests following PEGI's purchase of the Second Option
Percentage, and payment therefor.

         (b) PEGI's buy-in price for the Initial Option Percentage and the
Second Option Percentage will be *** at the time of purchase (as determined in
accordance with Exhibit C). PEGI may pay the purchase price for the Initial
Option Percentage ***, which election will be set forth in PEGI's notice that
it is exercising its buy-up option; ***. The closing of any purchase by PEGI
as provided in this Section 9.8 shall take place at the offices of the Company
(i) on such date as mutually agreed to by PEGI and Lifford, ***, or (ii) ***.
At such closing, PEGI will be entitled to receive customary representations
and warranties from Lifford (and any of its Affiliates which hold Membership
Interests, collectively) regarding ownership and title of the purchased
Membership Interest and the Company will evidence such Transfer on the books
of the Company. ***. In the event PEGI fails to timely pay for any additional
Percentage Interests for which it exercised its buy-up option, Lifford may
elect either: (i) to terminate permanently PEGI's right to purchase such
Percentage Interests; or (ii) to cause the Company to withhold any payments
otherwise due to PEGI under this Agreement or the Program Supply Agreement or
any other agreement that requires the Company to make payments to PEGI or its
Affiliates and to pay such amounts to Lifford until Lifford is paid in full
(including interest at the Reference Rate from the date such payment was due)
for such additional interests, and Lifford will then transfer such interests
to PEGI.

         (c) ***

         (d) In the event Lifford sells Membership Interests representing
fifty and one-tenths percent (50.1%) or more of the Company to a third party
after giving PEGI the opportunity to exercise its right of first offer and
right of first refusal pursuant to Sections 9.3 and 9.4 of this Agreement
(which Lifford may do at any time), the Additional PEGI Buy-Up Option will
terminate.

         9.9 Claxson Control Over Membership Interest. Subject to a Member's
right to transfer and assign its Membership Interest pursuant to the right of
first offer in Section 9.3, right of first refusal in Section 9.4 and PEGI's
Buy-Up Option in Section 9.8, at all times during the term of this Agreement,
Claxson will, directly or indirectly, (i) own 100% of the Membership Interest
owned by Lifford on the date of this Agreement, (ii) retain all voting rights
with respect to such Membership Interest, (iii) retain all rights to
participate in the management of the business, property and affairs of the
Company with respect to such Membership Interest, and (iv) retain all rights
to the Economic Interest with respect to such Membership Interest, subject to
Claxson's right to pledge all of its indirect Membership Interest as
collateral as part of a blanket pledge of all such Member's assets to a
financial institution.

         9.10 Playboy Television B.V. and PTVLA U.S., LLC

         (a) The Members hereby agree and acknowledge that Playboy Television
B.V., a Netherlands limited liability company ("PTV BV") has been created by
the Members and their Affiliates to distribute the Channels in Spain and
Mexico, that Playboy TV Holdings, LLC, a Delaware limited liability company
("PTV Holdings"), has been created by the Members and their Affiliates to
serve as a holding company for PTV BV, and that PTVLA U.S., LLC, a Delaware
limited liability company ("PTV US") has been created by the Members and their
Affiliates to distribute the Channels in the United States, Canada and Puerto
Rico. A true, correct and complete list of Contracts to which either or both
of PTV Holdings or PTV BV is a party ("Existing PTV BV Agreements") is
attached hereto as Exhibit I. A true, correct and complete list of Contracts
to which PTV US is a party ("Existing PTV US Agreements") is attached hereto
as Exhibit J. At all times during the Term, Claxson and PEI will, directly or
indirectly, (i) own the same percentage ownership interest in PTV Holdings or
PTV US as they may hold in the Company from time to time; (ii) in the event of
transfer of any Membership Interest, transfer a corresponding percentage of
such Equity Interest to the same purchaser so long as such transfer does not
have a material adverse tax effect on any member of PTV Holdings or PTV US;
(iii) retain all voting rights with respect to such Equity Interests, (iv)
retain all rights to participate in the management of the business, property
and affairs of PTV Holdings and PTV US with respect to such Equity Interests.
Without the prior written consent of the PEGI Managers, Claxson and Lifford
shall not, and shall cause their respective Subsidiaries and Affiliates
(including without limitation PTV Holdings, PTV BV and PTV US) not to:

         (i) take any action with respect to PTV Holdings, PTV BV or PTV US
         that would require the consent of the PEGI Managers as set forth in
         Section 5.1.2, determined as if the definition of "Company" contained
         therein included, for the purposes of this Section 9.10(a)(i) only,
         PTV Holdings, PTV BV and PTV US;

         (ii) authorize the issuance of or issue any additional Equity
         Interests in PTV Holdings, PTV BV or PTV US, other than to the
         Company in connection with a capital contribution;

         (iii) allow or permit PTV Holdings to conduct any business other than
         owning all of the issued and outstanding Equity Interests of PTV BV;

         (iv) allow or permit PTV BV to conduct any business other than the
         licensing of rights from PEGI and the sublicensing of such rights in
         the territory of Spain and Mexico in the English, Spanish and
         Portuguese languages as contemplated and permitted by the Amended
         Affiliation Agreement;

         (v) allow or permit PTV US to conduct any business other than the
         licensing of rights from PTVLA and the sublicensing of such rights to
         PEGI in the territory of the United States, Canada and Puerto Rico in
         the Spanish language as contemplated and permitted by the PTV US
         Affiliation Agreement and the Distribution Agreement;

         (vi) amend or modify the certificate of formation, deed of
         incorporation, operating agreement, by-laws or any other constitutive
         or organizational document of PTV Holdings, PTV BV or PTV US;

         (vii) sell any of the assets of PTV Holdings, PTV BV or PTV US,
         except in the ordinary course of business, or merge, consolidate or
         reorganize PTV Holdings, PTV BV or PTV US with or into another
         Person, other than another wholly owned Subsidiary of the Company; or

         (viii) take any action with respect to PTV Holdings, PTV BV or PTV US
         that would have a disproportionate adverse impact (financial or
         otherwise) on PEGI or its Subsidiaries or Affiliates.

         (b) In the event that PEGI at any time acquires additional Membership
Interests in the Company, whether pursuant to Section 9.3, 9.4 of 9.8 hereof
or otherwise, at the closing of the acquisition by PEGI of such Membership
Interests, PEGI shall have the right, exercisable by written notice to Lifford
not later than two days prior to the date of such closing:

         (i) with respect to PTV Holdings and PTV BV, to elect that either:
         (i) Lifford or its Affiliates shall contribute to PEGI a
         corresponding membership interest in PTV Holdings, and in the event
         that PEGI so elects, Claxson shall cause Zagasse Corp., N.V., a
         Netherlands Antilles limited liability company ("Zagasse"), or any
         other Affiliate of Claxson that then holds an interest in PTV
         Holdings, to contribute to PEGI for no additional consideration and
         at no additional cost to PEGI a corresponding membership interest in
         PTV Holdings simultaneously with the closing of PEGI's acquisition of
         additional Membership Interests in the Company, such that following
         such closing, PEGI's membership interest in PTV Holdings shall be
         equal to PEGI's Membership Interest in the Company. Notwithstanding
         the foregoing, in the event that PEGI acquires 100% of the Membership
         Interests in the Company, PEGI may, in lieu of acquiring all of the
         membership interests in PTV Holdings, elect to dissolve PTV Holdings
         and PTV BV. In such event, Claxson shall, and shall cause its
         Subsidiaries to, take all actions necessary or desirable to effect
         such dissolution simultaneously with, and effective as of, the
         closing of PEGI's acquisition of additional Membership Interests in
         the Company; and

         (ii) with respect to PTV US, to elect that either: (i) Lifford or its
         Affiliates shall contribute to PEGI a corresponding membership
         interest in PTV US, and in the event that PEGI so elects, Claxson
         shall cause Lifford US, Inc., a Delaware corporation ("Lifford US"),
         or any other Affiliate of Claxson that then holds an interest in PTV
         US, to contribute to PEGI for no additional consideration and at no
         additional cost to PEGI a corresponding membership interest in PTV US
         simultaneously with the closing of PEGI's acquisition of additional
         Membership Interests in the Company, such that following such
         closing, PEGI's membership interest in PTV US shall be equal to
         PEGI's Membership Interest in the Company. Notwithstanding the
         foregoing, in the event that PEGI acquires 100% of the Membership
         Interests in the Company, PEGI may, in lieu of acquiring all of the
         membership interests in PTV US, elect to dissolve PTV US. In such
         event, Claxson shall, and shall cause its Subsidiaries to, take all
         actions necessary or desirable to effect such dissolution
         simultaneously with, and effective as of, the closing of PEGI's
         acquisition of additional Membership Interests in the Company.

         9.11 Venus Operations

         (a) The Members hereby agree and acknowledge that Contribution
S.R.L., an Argentine limited liability company ("Venus Argentina"), and Venus
TV International, Inc., a British Virgin Islands corporation ("Venus
International", and together with Venus Argentina, the "Venus Entities") will
be acquired by the Company to own and operate the Venus Channels in the
Territory. Without the prior written consent of the PEGI Managers, the Company
shall not, and shall cause Venus Argentina and Venus International not to:

         (i) Transfer the Venus Assets from the Venus Entities to any other
         Person, including without limitation the Company or any of its
         Subsidiaries or Affiliates;

         (ii) allow or permit the Transfer of any assets from any other
         Person, including the Company and any of its Subsidiaries or
         Affiliates, to either or both of the Venus Entities;

         (iii) allow or permit the Venus Entities to own any assets other than
         the Venus Assets;

         (iv) operate the Venus Entities other than as stand-alone entities,
         provided, however, that the Company may manage either or both of the
         Venus entities;

         (v) allow or permit the Venus Channels to be operated other than as
         businesses separate and distinct from the other Channels and
         businesses of the Company, provided, however, that the Company may
         manage either or both of the Venus entities;

         (vi) commingle any of the assets of a Venus Entity with any other
         assets of the Company and its Subsidiaries and Affiliates; or

         (vii) merge the Venus Entities, merge any other Person into a Venus
         Entity or otherwise combine the operations of the Venus Entities with
         any other Person.

                                  ARTICLE 10
                      CONSEQUENCES OF DEATH, DISSOLUTION
                      RETIREMENT OR BANKRUPTCY OF MEMBER

         10.1 Withdrawal Dissolution Event. Upon the occurrence of a
Withdrawal Dissolution Event, the Company shall dissolve unless the remaining
Members (the "Remaining Members") holding all of the remaining Membership
Interests consent within ninety (90) days of the Withdrawal Dissolution Event
to the continuation of the business of the Company. If the Remaining Members
consent to the continuation of the business of the Company, the Remaining
Members and/or, if applicable pursuant to Section 10.4, the Company shall
purchase, and the Member whose actions or conduct resulted in the Withdrawal
Dissolution Event ("Former Member") or such Former Member's legal
representative shall sell, the Former Member's Membership Interest ("Former
Member's Interest") as provided in this Article 10 to avoid dissolution of the
Company.

         10.2 Purchase Price. The purchase price for the Former Member's
Interest shall be the lesser of (i) the positive Capital Account balance of
the Former Member or (ii) the Fair Market Value of the Former Member's
Interest. Notwithstanding the foregoing, if the Withdrawal Dissolution Event
results from a breach of this Agreement by the Former Member, the purchase
price paid by the Remaining Members and/or the Company shall be reduced by an
amount equal to the damages suffered by such purchasing parties as a result of
such breach.

         10.3 Notice of Intent to Purchase. Within thirty (30) days after the
General Manager has notified the Remaining Members as to the purchase price of
the Former Member's Interest determined in accordance with Section 10.2, each
Remaining Member shall notify the General Manager in writing of its desire to
purchase a portion of the Former Member's Interest. The failure of any
Remaining Member to submit a notice within the applicable period shall
constitute an election on the part of the Member not to purchase any of the
Former Member's Interest. Each Remaining Member so electing to purchase shall
be entitled to purchase a portion of the Former Member's Interest in the same
proportion that the Percentage Interest of the Remaining Member bears to the
aggregate of the Percentage Interests of all of the Remaining Members electing
to purchase the Former Member's Interest.

         10.4 Election to Purchase Less Than All of the Former Member's
Interest. If any Remaining Member elects to purchase none or less than all of
its pro rata share of the Former Member's Interest, then the Remaining Members
can elect to purchase more than their pro rata share. If the Remaining Members
fail to purchase the entire interest of the Former Member, the Company shall
purchase any remaining share of the Former Member's Interest.

         10.5 Payment of Purchase Price. The purchase price shall be paid by
the Remaining Members and/or the Company, as the case may be, at the closing
one-fifth (1/5) in cash and the balance of the purchase price in four equal
annual principal installments, plus accrued interest, and be payable each year
on the anniversary date of the closing. Any such payment by the Company shall
be made solely out of Distributable Cash allocable to the Remaining Members.
The unpaid principal balance shall accrue interest at the current applicable
federal rate as provided in the Code for the month in which the initial
payment is made, but the Company and the Remaining Members shall have the
right to prepay in full or in part at any time without penalty. The obligation
to pay the balance due shall be evidenced by a promissory note, and if
purchased by a Remaining Member, secured by a pledge of the Membership
Interest being purchased.

         10.6 Closing of Purchase of Former Member's Interest. The closing for
the sale of a Former Member's Interest pursuant to this Article 10 shall be
held on a business day at the principal office of the Company no later than
sixty (60) days after the determination of the purchase price. At the closing,
the Former Member or such Former Member's legal representative shall deliver
to the Company or the Remaining Members an instrument of transfer (containing
warranties of title and no encumbrances) conveying the Former Member's
Interest. The Former Member or such Former Member's legal representative, the
Company and the Remaining Members shall do all things and execute and deliver
all papers as may be necessary fully to consummate such sale and purchase in
accordance with the terms and provisions of this Agreement.

         10.7 Purchase Terms Varied by Agreement. Nothing contained herein is
intended to prohibit Members from agreeing upon other terms and conditions for
the purchase by the Company or any Member of the Membership Interest of any
Member in the Company desiring to retire, withdraw or resign, in whole or in
part, as a Member.

                                  ARTICLE 11
                   ACCOUNTING, RECORDS, REPORTING BY MEMBERS

         11.1 Books and Records. The books and records of the Company shall be
kept, and the financial position and the results of its operations recorded,
in accordance with United States generally accepted accounting principles as
in effect from time to time ("GAAP") and the accounting methods followed for
United States federal income tax purposes. The books and records of the
Company shall reflect all the Company transactions and shall be appropriate
and adequate for the Company's business. The Company shall maintain at its
principal office all of the following:

         (a) A current list of the full name and last known business or
residence address of each Member, together with the Capital Contributions,
Capital Account and Percentage Interest of each Member;

         (b) A current list of the full name and business or residence address
of each Manager;

         (c) A copy of the Articles and any and all amendments thereto
together with executed copies of any powers of attorney pursuant to which
amendments thereto have been executed;

         (d) Copies of the Company's federal, state, and local income tax or
information returns and reports, if any, for the six (6) most recent taxable
years;

         (e) A copy of this Agreement and any and all amendments thereto
together with executed copies of any powers of attorney pursuant to which this
Agreement or any amendments thereto have been executed;

         (f) Copies of the financial statements of the Company, if any, for
the six (6) most recent Fiscal Years; and

         (g) The Company's books and records as they relate to the internal
affairs of the Company for at least the current and past four (4) Fiscal
Years.

         11.2 Delivery to Members and Inspection.

         11.2.1 Delivery Upon Request. Upon the request of any Member for
purposes reasonably related to the interest of that Person as a Member, the
General Manager shall promptly deliver to the requesting Member, at the
expense of the Company, a copy of the information required to be maintained by
Sections 11.1(a), (b) and (d), and a copy of this Agreement, as amended. The
General Manager shall promptly furnish to a Member a copy of any amendment to
the Articles or this Agreement executed by a Manager pursuant to a power of
attorney from the Member.

         11.2.2 Inspection. Each Member has the right, upon reasonable request
for purposes reasonably related to the interest of the Person as Member to:

         (a) inspect and copy during normal business hours any of the Company
records described in Sections 11.1(a) through (g); and

         (b) obtain from the General Manager, promptly after their becoming
available, a copy of the Company's federal, state, and local income tax or
information returns for each Fiscal Year.

         11.2.3 Authorized Persons. Any request, inspection or copying by a
Member under this Section 11.2 may be made by that Person or that Person's
agent or attorney.

         11.2.4 PEI Additional Right of Inspection. Upon reasonable notice,
the Company shall, and shall cause the Company's independent public
accountants and outside counsel and each of the Company's employees, agents
and representatives to: (i) afford the officers, employees and authorized
agents, independent public accountants, outside counsel, financing sources and
representatives of PEI (the "PEI Representatives") access, during normal
business hours, to the offices, properties, other facilities, books and
records of the Company and to the Company's independent public accountants and
outside counsel and those employees, agents and representatives of the Company
who have any knowledge relating to the business, assets and properties of the
Company or the Channels and (ii) furnish promptly to the PEI Representatives
such additional financial and operating data and other information regarding
the business, assets and properties of the Company or the Channels as PEI may
from time to time reasonably request; provided, however, that PEI shall not be
entitled to exercise such rights of inspection more than once in a twelve (12)
month period, unless Lifford or any of its Affiliates are in breach of this
Agreement, in which case there shall be no limit on the number of such
inspections.

         11.3 Statements.

         11.3.1 Annual Report. The General Manager shall cause an audited
annual report to be sent to each of the Members not later than forty-five (45)
days after the close of the Fiscal Year 2002, and not later than thirty (30)
days after the close of Fiscal Year 2003 and every year thereafter or sooner
if the reporting obligations of PEI or Claxson are accelerated due to a change
in applicable SEC or other regulatory requirements. The report shall contain a
balance sheet as of the end of the Fiscal Year and an income statement and
statement of changes in financial position for the Fiscal Year. The report
shall be prepared in accordance with GAAP consistently applied and fairly
present the results of operations and financial condition of the Company and
its Subsidiaries for the periods covered thereby. Such financial statements
shall be accompanied by the report thereon, if any, of the independent
accountants engaged by the Company.

         11.3.2 Monthly Report. The General Manager shall cause a monthly
report to be sent to each of the Members not later than twenty (20) days after
the end of each month during a Fiscal Year, subject to customary year-end
adjustments. The report shall contain a balance sheet as of the last day of
such month and an income statement and statement of changes in financial
position for the period then ended. The report shall be prepared in accordance
with GAAP consistently applied and fairly present the results of operations
and financial condition of the Company and its Subsidiaries for the periods
covered thereby subject to customary year-end adjustments. Such financial
statements will be unaudited but will prepared on a consistent basis with the
Company's audited annual report described above.

         11.3.3 Tax Information. The General Manager shall cause to be
prepared at least annually, at Company expense, information necessary for the
preparation of the Members' federal and state income tax returns. The General
Manager shall send or cause to be sent to each Member within ninety (90) days
after the end of each taxable year such information as is necessary to
complete federal, state, and local income tax or information returns, and a
copy of the Company's federal, state, and local income tax or information
returns for that year.

         11.4 Financial and Other Information. The General Manager shall
provide such financial and other information relating to the Company, as a
Member may reasonably request.

         11.5 Filings. The General Manager, at Company expense, shall cause
the income tax returns for the Company to be prepared and timely filed with
the appropriate authorities. Within seventy five (75) days after the close of
the taxable year, the General Manager shall deliver to the Managers copies of
such returns for their approval pursuant to Section 5.1.2(m) prior to the
filing due date. The General Manager, at Company expense, shall also cause to
be prepared and timely filed, with appropriate federal and state regulatory
and administrative bodies, amendments to, or restatements of, the Articles and
all reports required to be filed by the Company with those entities under the
Act or other then current applicable laws, rules, and regulations. If a
Manager required by the Act to execute or file any document fails, after
demand, to do so within a reasonable period of time or refuses to do so, any
other Manager or Member may prepare, execute and file that document with the
California Secretary of State.

         11.6 Bank Accounts. The General Manager shall maintain the funds of
the Company in one or more separate bank accounts in the United States or the
European Union in the name of the Company and in any other jurisdiction where
the applicable laws of such jurisdiction require the Company to maintain such
an account and shall not permit the funds of the Company to be commingled in
any fashion with the funds of any other Person.

         11.7 Accounting Decisions and Reliance on Others. All decisions as to
accounting matters, except as otherwise specifically set forth herein, shall
be made by the Management Committee. A Manager may rely upon the advice of the
Company's accountants as to whether such decisions are in accordance with
accounting methods followed for federal income tax purposes.

         11.8 Tax Matters for the Company Handled by Managers and Tax Matters
Member. The Management Committee shall from time to time cause the Company to
make such tax elections as it deems to be in the best interests of the
Company; provided, however, that the Management Committee shall not (i) file
any tax return or (ii) make any tax election or take any position with respect
to any examination audit or proceeding by a taxing authority that could have
an adverse impact on PEGI or the Company without PEGI's prior written consent.
Any failure by the Management Committee to approve unanimously any matter
described in Section 5.1.2(l) will be resolved in accordance with the
procedures specified in Article 16; provided, however, that the sole
arbitrator described in Section 16.4 shall appoint one or more impartial
experts to testify on the disputed matters and shall base his or her decision
on such expert testimony, taking into account the interests of both parties.
The Tax Matters Member (the equivalent to the Tax Matters Partner as defined
in Code Section 6231) shall represent the Company (at the Company's expense)
in connection with all examinations of the Company's affairs by tax
authorities, including resulting judicial and administrative proceedings, and
shall expend the Company's funds for professional services and costs
associated therewith. The Tax Matters Member shall oversee the Company's tax
affairs in the overall best interests of the Company. If for any reason the
Tax Matters Member can no longer serve in that capacity or ceases to be a
Member or Manager, as the case may be, Members holding a Majority Interest may
designate another to be Tax Matters Member.

                                  ARTICLE 12
                          DISSOLUTION AND WINDING UP

         12.1 Term. The term (the "Term") of the Company shall commence on the
date the Articles are filed with the Secretary of State of California and
terminate on the earlier to occur of the termination of the Company as
provided in the Articles or the earlier dissolution of the Company pursuant to
the terms of this Article 12.

         12.2 Dissolution Events. The Company may be dissolved prior to the
termination date set forth in the Articles upon the happening of any of the
following events (each, a "Dissolution Event"):

         12.2.1 Either Lifford or PEGI may elect to dissolve the Company if
controlling ownership of the other Member changes (other than a change to an
Affiliate of such Member); provided, however, that the parties acknowledge
that Claxson and PEI are publicly held and that no change in their ownership
will constitute a change of control of Lifford or PEGI, as the case may be, as
long as Lifford or PEGI remain a controlled subsidiary of Claxson or PEI, as
the case may be. Any such dissolution will be effective as of the later of (i)
the last day of the Fiscal Year in which such dissolution event occurs or (ii)
the date six (6) months after such dissolution event occurs.

         12.2.2 Any Member may without prejudice to any other remedies it may
have elect to dissolve the Company by notice in writing to the other Members
on or after the occurrence of any of the following:

         (a) the commission of one or more material breaches of this Agreement
by the Company or another Member which are not capable of remedy;

         (b) the commission of a material breach of this Agreement by the
Company or another Member which is capable of remedy (a "Remediable Breach")
which shall not have been remedied within a period of thirty (30) days after
the party in breach has been given notice in writing specifying that
Remediable Breach and requiring it to be remedied; provided, however, that
such thirty (30) day period shall be extended for such additional period, not
to exceed one-hundred-twenty (120) days, as shall be reasonably necessary if
that Remediable Breach is incapable of remedy within that thirty (30) day
period and during that additional period the party in breach shall diligently
endeavor to remedy that Remediable Breach, but only if such extension would
not reasonably be expected to have a material adverse effect on the party
giving notice of such breach. However, in respect of the breach of any
obligation to make payment hereunder, the cure period shall not be extended as
provided in the foregoing proviso.

         (c) the bankruptcy, insolvency, general assignment for the benefit of
creditors or similar event or the appointment of a trustee, receiver or
similar person for any Member holding a Majority Interest or of the Company;

         (d) the uncured material breach of one or more of the Program Supply
Agreement or the Distribution Agreement by another Member or their Affiliates
or the Company, unless in the event of a breach by the Company, the party
seeking dissolution hereunder caused such breach; or

         (e) the institution by such Member of a legal proceeding against
another Member to enforce against the other Member either (i) a final arbitral
award or (ii) a final judgment, in each case arising out of or relating to
this Agreement, the Program Supply Agreement or the Distribution Agreement.

         12.2.3 Any failure by the Company to make payments due to PEGI under
the Program Supply Agreement shall be deemed to constitute a material breach
hereunder by Claxson and Lifford. Each of Claxson and Lifford hereby
unconditionally and irrevocably guarantees, as primary obligor and not merely
as a surety, and as a guaranty of payment when due and not of collectibility,
to PEGI and its successors and assigns the prompt payment and satisfaction in
full of any amounts due and owing by the Company to PEGI and its successors
and assigns pursuant to the Program Supply Agreement in an amount equal to the
outstanding obligation multiplied by the Percentage Interest in the Company
then owned by Lifford and its Affiliates (the "Claxson Guarantee Obligation"),
and each of Claxson and Lifford hereby (a) further agrees that if the Company
shall fail to pay, or otherwise satisfy, in full any of such amounts when they
become due, whether at stated maturity, by acceleration, demand or otherwise,
it shall promptly pay the same up to amount of the Claxson Guarantee
Obligation, and (b) waives, for the benefit of PEGI and its successors and
assigns, (i) any right to require PEGI to proceed against the Company or any
guarantor, or to proceed against, exhaust or have resort to any security held
from the Company or any other guarantor, or any balance of any deposit account
or credit on the books of PEGI, (ii) any right to set-offs, recoupments and
counterclaims; (iii) notices, demands, presentments, protests, notices of
protest and notices of dishonor and notices of any action or inaction or
default under this Agreement or the Program Supply Agreement; (iv) any right
of subrogation, reimbursement or indemnification that it may have against the
Company and any right of contribution it may have against any other guarantor
and (v) to the fullest extent permitted by law, any defenses or benefits that
may be derived from or afforded by law which limit the liability of or
exonerate it or sureties, or which may conflict with the terms of this Section
12.2.3. The obligations of each of Claxson and Lifford pursuant to this
Section 12.2.3 shall continue and remain in full force and effect or be
reinstated, as the case may be, in the event that all or any part of any
payment made by the Company to PEGI under the Program Supply Agreement is
rescinded or recovered directly or indirectly from PEGI as a preference,
fraudulent transfer or conveyance or otherwise. PEGI, Claxson and Lifford
acknowledge that any payment obligation of Claxson or Lifford hereunder shall
be limited to Lifford's (or its Affiliate's) Membership Percentage Interest at
the time of such failure to make payment multiplied by the amount of the
payment due and further, that the payment of such payments due shall
constitute a cure of such breach. In the event that PEGI exercises the PEGI
Buy-Up Option, the provisions of this Section 12.2.3 shall terminate in their
entirety.

         12.2.4 PEI hereby unconditionally and irrevocably guarantees, as
primary obligor and not merely as a surety, and as a guaranty of payment when
due and not of collectibility, to the Company and its successors and assigns
the prompt payment and satisfaction in full of any amounts due and owing by
PEGI to the Company, its successors and assigns pursuant to the Program Supply
Agreement, and the Distribution Agreement, and PEI hereby (a) further agrees
that if PEGI shall fail to pay, or otherwise satisfy, in full any of such
amounts when they become due, whether at stated maturity, by acceleration,
demand or otherwise, it shall promptly pay, or otherwise satisfy, the same and
(b) waives, for the benefit of the Company and its successors and assigns, (i)
any right to require the Company to proceed against PEGI or any other
guarantor, or to proceed against, exhaust or have resort to any security held
from PEGI or any guarantor or any balance of any deposit account or credit on
the books of the Company; (ii) any right to set-offs, recoupments and
counterclaims; (iii) notices, demands, presentments, protests, notices of
protest and notices of dishonor and notice of any action or inaction or
default under the Program Supply Agreement or the Distribution Agreement; (iv)
any right of subrogation, reimbursement or indemnification that it may have
against PEGI and any right of contribution it may have against any other
guarantor and (v) to the fullest extent permitted by law, any defenses or
benefits that may be derived from or afforded by law which limit the liability
of or exonerate it or sureties, or which may conflict with the terms of this
Section 12.2.4. The obligations of PEI pursuant to this Section 12.2.4 shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of any payment made by PEGI to the
Company under the Distribution Agreement is rescinded or recovered directly or
indirectly from the Company as a preference, fraudulent transfer or conveyance
or otherwise, PEGI, Claxson and Lifford acknowledge that any payment
obligation of PEI hereunder shall be limited to PEGI's (or its Affiliate's)
Membership Percentage Interest at the time of such failure to make payment
multiplied by the amount of the payment due and further, that the payment of
such payments due shall constitute a cure of such breach. In the event that
PEGI exercises the PEGI Buy-Up Option, the provisions of this Section 12.2.4
shall terminate in their entirety.

         12.3 Effect of Dissolution. Upon dissolution of the Company, the
Related Documents will automatically terminate and all rights and obligations
of the respective parties thereunder will terminate, except for any provisions
that expressly survive such termination or claims, etc. that have arisen prior
to such termination. Upon dissolution of the Company, each Member shall have
the right to compel the Company to be promptly wound-up and liquidated.

         12.4 Dissolution. The Company shall be dissolved, its assets shall be
disposed of, and its affairs wound up on the first to occur of the following:

         (a) Upon the election of the applicable Member(s) following the
happening of any Dissolution Event;

         (b) Upon the entry of a decree of judicial dissolution pursuant to
Section 17351 of the Corporations Code;

         (c) The occurrence of a Withdrawal Dissolution Event and the failure
of the Remaining Members to consent to continue the business of the Company
within ninety (90) days after the occurrence of such event or the failure of
the Company or the Remaining Members to purchase the Former Member's Interest
as provided in Article 10; or

         (d) The sale of all or substantially all of the assets of the
Company.

         12.5 Certificate of Dissolution. As soon as possible following the
occurrence of any of the events specified in Section 12.4, the Managers
appointed by Members whose breach or Withdrawal Dissolution Event have not
caused the dissolution of the Company or, if none, the Members, shall execute
a Certificate of Dissolution in such form as shall be prescribed by the
California Secretary of State and file the Certificate as required by the Act.

         12.6 Winding Up. Upon dissolution, the Company shall continue solely
for the purpose of winding up its affairs in an orderly manner, liquidating
its assets, and satisfying the claims of its creditors. The Managers appointed
by Members whose breach or Withdrawal Dissolution Event have not caused the
dissolution of the Company or, if none, the Members, shall be responsible for
overseeing the winding up and liquidation of Company, shall take full account
of the liabilities of Company and assets, shall (subject to PEGI's right under
Section 12.7) either cause its assets to be sold or distributed, and if sold
as promptly as is consistent with obtaining the Fair Market Value thereof,
shall cause the proceeds therefrom, to the extent sufficient therefor, to be
applied and distributed as provided in Section 12.8. The Persons winding up
the affairs of the Company shall give written notice of the commencement of
winding up by mail to all known creditors and claimants whose addresses appear
on the records of the Company. The Managers or Members winding up the affairs
of the Company shall be entitled to reasonable compensation for such services.

         12.7 Distributions in Kind. Any non-cash asset distributed to one or
more Members shall first be valued at its Fair Market Value to determine the
Net Income or Net Loss that would have resulted if such asset were sold for
such value, such Net Income or Net Loss shall then be allocated pursuant to
Article 4, and the Members' Capital Accounts shall be adjusted to reflect such
allocations. The amount distributed and charged to the Capital Account of each
Member receiving an interest in such distributed asset shall be the Fair
Market Value of such interest (net of any liability secured by such asset that
such Member assumes or takes subject to). The Fair Market Value of such asset
shall be determined by the Managers or by the Members or if any Member objects
by an independent appraiser in accordance with Exhibit C, with a single
appraiser selected by the Manager or liquidating trustee and approved by the
Members; provided, however, that the Fair Market Value of the physical
embodiment of any intellectual property shall be determined based on its value
to a third party (i.e., to a Person other than the owner of such intellectual
property). Notwithstanding the foregoing, PEGI may elect in lieu of or in
addition to any other form of distribution to have distributed to it in kind
or destroyed any assets of the Company that are Playboy-branded, contain
Playboy-identified content or are otherwise identified as a Playboy-related
product.

         12.8 Order of Payment of Liabilities Upon Dissolution.

         12.8.1 Distributions to Members. After determining that all known
debts and liabilities of the Company in the process of winding-up, including,
but not limited to, debts and liabilities to Members that are creditors of the
Company, have been paid or adequately provided for, the remaining assets shall
be distributed to the Members in accordance with their positive Capital
Account balances, after taking into account income and loss allocations for
the Company's taxable year during which liquidation occurs. Such liquidating
distributions shall be made by the end of the Company's taxable year in which
the Company is liquidated, or, if later, within ninety (90) days after the
date of such liquidation.

         12.8.2 Payment of Debts. The payment of a debt or liability, whether
the whereabouts of the creditor is known or unknown, has been adequately
provided for if the payment has been provided for by either of the following
means:

         (a) Payment thereof has been assumed or guaranteed in good faith by
one or more financially responsible persons or by the United States government
or any agency thereof, and the provision, including the financial
responsibility of the Person, was determined in good faith and with reasonable
care by the Members or Managers to be adequate at the time of any distribution
of the assets pursuant to this Section.

         (b) The amount of the debt or liability has been deposited as
provided in Section 2008 of the Corporations Code.

         This Section 12.8.2 shall not prescribe the exclusive means of making
adequate provision for debts and liabilities.

         12.9 Certificate of Cancellation. The Managers or Members who filed
the Certificate of Dissolution shall cause to be filed in the office of, and
on a form prescribed by, the California Secretary of State, a certificate of
cancellation of the Articles upon the completion of the winding up of the
affairs of the Company.

         12.10 No Action for Dissolution. Except as expressly permitted in
this Agreement, a Member shall not take any voluntary action that directly
causes a Dissolution Event. The Members acknowledge that irreparable damage
would be done to the goodwill and reputation of the Company if any Member
should bring an action in court to dissolve the Company under circumstances
where dissolution is not required by Section 12.4. This Agreement has been
drawn carefully to provide fair treatment of all parties. Accordingly, except
where the Managers have failed to liquidate the Company as required by this
Article 12, each Member hereby waives and renounces its right to initiate
legal action to seek the appointment of a receiver or trustee to liquidate the
Company or to seek a decree of judicial dissolution of the Company on the
ground that (a) it is not reasonably practicable to carry on the business of
the Company in conformity with this Agreement, or (b) dissolution is
reasonably necessary for the protection of the rights or interests of the
complaining Member. Damages for breach of this Section 12.10 shall be monetary
damages only (and not specific performance), and the damages may be offset
against distributions by the Company to which such Member would otherwise be
entitled.

                                  ARTICLE 13
                         INDEMNIFICATION AND INSURANCE

         13.1 Indemnification of Agents. The Company shall and hereby agrees
to indemnify any Person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding by
reason of the fact that such Person is or was a Member, Manager, officer,
employee or other agent of the Company or that, being or having been such a
Member, Manager, officer, employee or agent, such Person is or was serving at
the request of the Company as a manager, director, officer, employee or other
agent of another limited liability company, corporation, partnership, joint
venture, trust or other enterprise (all such persons being referred to
hereinafter as an "Agent"), to the fullest extent permitted by applicable law
in effect on the Effective Date and to such greater extent as applicable law
may hereafter from time to time permit. The Managers shall be authorized, on
behalf of the Company, to enter into indemnity agreements from time to time
with any Person entitled to be indemnified by the Company hereunder, upon such
terms and conditions as the Managers deem appropriate in their business
judgment.

         13.2 Insurance. The Company shall have the power to purchase and
maintain insurance on behalf of any Person who is or was an Agent of the
Company against any liability asserted against such Person and incurred by
such Person in any such capacity, or arising out of such Person's status as an
Agent, whether or not the Company would have the power to indemnity such
Person against such liability under the provisions of Section 13.1 or under
applicable law.

                                  ARTICLE 14
                                NON-COMPETITION

         14.1 Prohibited Activities. (a) PEI and its Subsidiaries may not
directly or indirectly, alone or as a partner, joint venturer, member,
consultant, agent, independent contractor or stockholder of or lender to, any
company or business, ***; (b) Claxson and its Subsidiaries may not directly or
indirectly, alone or as a partner, joint venturer, member, consultant, agent,
independent contractor or stockholder of, or lender to, any company or
business, ***; (c) Claxson and PEI and their respective Subsidiaries may not
***; and (d) if this Agreement or the Program Supply Agreement any Related
Document is terminated due to a breach by PEI, Claxson or any of their
respective Subsidiaries, ***.

         14.2 Separate Covenants. The agreements contained in Section 14.1
shall be construed as a series of separate and distinct covenants, one for
each (a) activity of PEI and its Subsidiaries and Claxson and its
Subsidiaries, as the case may be, (b) capacity in which each of PEI and its
Subsidiaries and Claxson and its Subsidiaries, as the case may be, are
prohibited from competing and (c) territory in which PEI and its Subsidiaries
and Claxson and its Subsidiaries, as the case may be, are carrying on or
prohibited from carrying on such activity.

         14.3 Intent; Severability. Each of PEI, PEGI and Claxson intends that
Section 14.1 satisfy the terms of, and be enforceable in accordance with
California Business and Professions Code Section 16602.5, which authorizes any
member who sells its interest in a limited liability company to enter into an
agreement with the buyer of such interest to refrain from carrying on a
similar business within the counties or cities in which a limited liability
company carries on a like business therein. Each of PEI, on behalf of itself
and its Subsidiaries (including, without limitation, PEGI), and Claxson, on
behalf of itself and its Subsidiaries, recognizes that the territorial and
time restrictions set forth herein are reasonable, not burdensome and are
properly required by law for the adequate protection of the Company, PEI and
its Subsidiaries and Claxson and its Subsidiaries. If such territorial or time
restrictions or any other provision contained herein shall be deemed to be
illegal, unenforceable or unreasonable by a court of competent jurisdiction,
each of PEI and its Subsidiaries and Claxson and its Subsidiaries agrees and
submits to the reduction of such territorial or time restriction or other
provision to such an area or period as such court shall deem reasonable.

         14.4 Injunctive Relief. Each of PEI, PEGI and Claxson acknowledges
that (a) the covenants and the restrictions contained in Section 14.1 are a
material factor to such party's execution of this Agreement and are necessary
and required for the protection of the Company, PEI and its Subsidiaries and
Claxson and its Subsidiaries, (b) such covenants relate to matters that are of
a special, unique and extraordinary character that gives each of such
covenants a special, unique and extraordinary value, and (c) a breach of any
of such covenants will result in irreparable harm and damages to the Company,
PEI and its Subsidiaries or Claxson and its Subsidiaries, as the case may be,
in an amount difficult to ascertain and that cannot be adequately compensated
by a monetary award. Accordingly, in addition to any of the relief to which
the Company, PEI and its Subsidiaries or Claxson and its Subsidiaries, as the
case may be, may be entitled at law or in equity, the Company, PEI and its
Subsidiaries and Claxson and its Subsidiaries, as the case may be, shall be
entitled to temporary and/or permanent injunctive relief from any breach or
threatened breach of the provisions of Section 14.1 without proof of actual
damages that have been or may be caused to such Persons by such breach or
threatened breach.

                                  ARTICLE 15
                     MEMBER REPRESENTATIONS AND WARRANTIES

         15.1 Representations and Warranties by Each Member. Each Member
hereby represents and warrants to, and agrees with, the other Members, and the
Company, as follows:

         15.1.1 Experience. By reason of such Member's business or financial
experience, such Member is capable of evaluating the risks and merits of an
investment in the Membership Interest and of protecting such Member's own
interests in connection with this investment.

         15.1.2 No Advertising. Such Member has not seen, received, been
presented with, or been solicited by any leaflet, public promotional meeting,
newspaper or magazine article or advertisement, radio or television
advertisement, or any other form of advertising or general solicitation with
respect to the sale of the Membership Interest.

         15.1.3 Investment Intent. Such Member is acquiring the Membership
Interest for investment purposes for such Member's own account only and not
with a view to or for sale in connection with any distribution of all or any
part of the Membership Interest. No other Person will have any direct or
indirect beneficial interest in or right to the Membership Interest.

         15.1.4 Purpose of Entity. Such Member was not organized for the
specific purpose of acquiring the Membership Interest.

         15.1.5 Economic Risk. Such Member is financially able to bear the
economic risk of an investment in the Membership Interest, including the total
loss thereof.

         15.1.6 No Registration of Membership Interest. Such Member
acknowledges that the Membership Interest has not been registered under the
Securities Act of 1933 (as amended, the "Securities Act"), or qualified under
the California Corporate Securities Law of 1968, as amended, or any other
applicable blue sky laws in reliance, in part, on such Member's
representations, warranties, and agreements herein.

         15.1.7 Membership Interest in Restricted Security. Such Member
understands that the Membership Interest is a "restricted security" under the
Securities Act in that the Membership Interest will be acquired from the
Company in a transaction not involving a public offering, and that the
Membership Interest may be resold without registration under the Securities
Act only in certain limited circumstances and that otherwise the Membership
Interest must be held indefinitely. In this connection, such Member
understands the resale limitations imposed by the Securities Act and is
familiar with SEC Rule 144, as presently in effect, and the conditions which
must be met in order for such SEC Rule 144 to be available for resale of
"restricted securities".

         15.1.8 No Obligation to Register. Such Member represents, warrants,
and agrees that the Company is under no obligation to register or qualify the
Membership Interest under the Securities Act or under any state securities
law, or to assist such Member in complying with any exemption from
registration and qualification.

         15.1.9 No Disposition in Violation of Law. Without limiting the
representations set forth above, and without limiting the other provisions of
this Agreement relating to the transfer of Membership Interests, such Member
will not make any disposition of all or any part of the Membership Interest
which will result in the violation by such Member or by the Company of the
Securities Act, the California Corporate Securities Law of 1968, or any other
applicable securities laws. Without limiting the foregoing, such Member agrees
not to make any disposition of all or any part of the Membership Interest
unless and until:

         (a) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement and any applicable requirements
of state securities laws; or

         (b) (i) Such Member has notified the Company of the proposed
disposition and has furnished the Company with a detailed statement of the
circumstances surrounding the proposed disposition, and (ii) such Member has
furnished the Company with a written opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require
registration of any securities under the Securities Act or the consent of or a
permit from appropriate authorities under any applicable state securities law;
and

         (c) In the case of any disposition of all or any part of the
Membership Interest pursuant to SEC Rule 144, in addition to the requirements
set forth above, such Member shall promptly forward to the Company a copy of
any Form 144 filed with the SEC with respect to such disposition and a letter
from the executing broker satisfactory to the Company evidencing compliance
with SEC Rule 144. If SEC Rule 144 is amended or if the SEC's interpretations
thereof in effect at the time of any such disposition have changed from its
present interpretations thereof, such Member shall provide the Company with
such additional documents as the General Manager may reasonably require.

         15.1.10 Investment Risk. Such Member acknowledges that the Membership
Interest is a speculative investment which involves a substantial degree of
risk of loss by such Member of its entire investment in the Company, that such
Member understands and takes full cognizance of the risk factors related to
the purchase of the Membership Interest.

         15.1.11 Restrictions on Transferability. Such Member acknowledges
that there are substantial restrictions on the transferability of the
Membership Interest pursuant to this Agreement, that there is no public market
for the Membership Interest and none is expected to develop, and that,
accordingly, it may not be possible for such Member to liquidate such Member's
investment in the Company.

         15.1.12 Information Reviewed. Such Member has received and reviewed
all information such Member considers necessary or appropriate for deciding
whether to purchase the Membership Interest.

         15.1.13 No Representations By Company. No Person has at any time
represented, guaranteed or warranted to such Member that such Member may
freely transfer the Membership Interest, that a percentage of profit and/or
amount or type of consideration will be realized as a result of an investment
in the Membership Interest, that past performance or experience on the part of
the Managers or any other Person in any way indicates the predictable results
of the ownership of the Membership Interest or of the overall Company
business, that any cash distributions from Company operations or otherwise
will be made to the Members by any specific date or will be made at all, or
that any specific tax benefits will accrue as a result of an investment in the
Company.

         15.1.14 Consultation with Attorney. Such Member has been advised to
consult with such Member's own attorney regarding all legal matters concerning
an investment in the Company and the tax consequences of participating in the
Company, and has done so, to the extent such Member considers necessary.

         15.1.15 Tax Consequences. Such Member acknowledges that the tax
consequences to such Member of investing in the Company will depend on such
Member's particular circumstances, and such Member will look solely to, and
rely upon, such Member's own advisers with respect to the tax consequences of
this investment.

         15.1.16 No Assurance of Tax Benefits. Such Member acknowledges that
there can be no assurance that the Code or the Treasury Regulations will not
be amended or interpreted in the future in such a manner so as to deprive the
Company and the Members of some or all of the tax benefits they might now
receive, nor that some of the deductions claimed by the Company or the
allocations of items of income, gain, loss, deduction, or credit among the
Members may not be challenged by the Internal Revenue Service.

         15.2 Indemnity. Each Member shall indemnify and hold harmless the
Company, each and every Manager, each and every other Member, and any
officers, directors, shareholders, managers, members, employees, partners,
agents, attorneys, accountants, registered representatives, and control
persons of any such entity who was or is a party or is threatened to be made a
party to any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (a "Claim"), by
reason of or arising from any misrepresentation or misstatement of facts or
omission to represent or state facts made by such Member including, but not
limited to, the information and representations in this Agreement, against
losses, liabilities, and expenses of the Company, each and every Manager, each
and every other Member, and any officers, directors, shareholders, managers,
members, employees, partners, attorneys, accountants, agents, registered
representatives, and control persons of any such Person (including attorneys'
fees, judgments, fines, and amounts paid in settlement, payable as incurred)
incurred by such Person in connection with such action, suit, proceeding, or
the like.

                                  ARTICLE 16
                              DISPUTE RESOLUTION

         16.1 Alternate Dispute Resolution. Except as set forth in Section
16.10, any dispute arising out of or relating to this Agreement shall be
resolved in accordance with the procedures specified in this Article 16, which
shall be the sole and exclusive procedures for the resolution of any such
disputes; provided, however, that this Article shall not apply to any dispute
concerning the validity, ownership or control of the trademarks licensed by
PEI to the Company pursuant to the Program Supply Agreement or the copyrights
to any programming supplied by PEGI pursuant to the Program Supply Agreement,
and instead any such dispute shall be litigated in a court of law. The Company
and the Members intend that these provisions shall be valid, binding,
enforceable and irrevocable and shall survive any termination of this
Agreement or any of the other Related Documents.

         16.2 Notification and Negotiation. If the Company or any Member
wishes to assert a dispute with the Company or any other Member arising out of
or relating to this Agreement, such Person shall promptly notify the Company
and/or such other Member in writing of such dispute and shall attempt in good
faith to resolve any dispute arising out of or relating to this Agreement
promptly by negotiation between executives who have authority to settle the
controversy. Within five (5) business days of the receipt by a party of a
notice of the existence of a Dispute ("Notice"), the receiving party shall
submit a written response to the other party ("Response"). Both the Notice and
the Response shall include (i) a statement of each party's position with
regard to the Dispute and a summary of arguments supporting that position; and
(ii) the name and title of the senior executive who will represent that party
in attempting to resolve the Dispute pursuant to this Section. Within five (5)
business days of receipt of the Response, the designated executives shall meet
and attempt to resolve the Dispute. All reasonable requests for information
made by one party to the other will be honored. All negotiations pursuant to
this clause shall be confidential and shall be treated as compromise and
settlement negotiations, and no oral or documentary representations made by
the parties during such negotiations shall be admissible for any purpose in
any subsequent proceedings. If any Dispute is not resolved for any reason
within twenty (20) days of receipt of Notice (or within such longer period as
to which the parties have agreed in writing), then, on the request of any
party the Dispute shall be submitted to arbitration in accordance with
Sections 16.3 to 16.9 herein.

         16.3 Arbitration Rules. Any Dispute not timely resolved in accordance
with Section 16.2 shall be finally and exclusively settled by arbitration in
accordance with the International Arbitration Rules of the American
Arbitration Association ("AAA") then in effect (the "Rules"), except as
modified herein. The arbitration shall be held in Los Angeles, California. The
arbitration proceedings shall be conducted, and the award shall be rendered,
in the English language.

         16.4 Selection of Arbitrators. If the Dispute (including claims and
counterclaims) is for less than $5 million, there shall be one arbitrator. The
parties shall have fifteen (15) days from the receipt by the respondent of the
demand for arbitration to agree on an arbitrator. If the parties fail to
timely agree, on the request of any party such arbitrator shall be appointed
by the AAA in accordance with the Rules and the procedures set forth herein.
If the Dispute (including claims and counterclaims) is for more than $5
million, there shall be three neutral and impartial arbitrators of whom the
claimant and the respondent shall each appoint one, within fifteen (15) days
of the receipt by respondent of a copy of the demand for arbitration. The two
arbitrators so appointed shall select a third arbitrator to serve as presiding
arbitrator, such selection to be made within twenty (20) days of the selection
of the second arbitrator. If any arbitrator is not appointed within the time
limits set forth herein, such arbitrator(s) shall be appointed by the AAA in
accordance with the Rules and the procedures set forth herein. There shall be
no restriction on the nationality of any arbitrator. Any arbitrator appointed
by the AAA shall be either a retired judge with experience in international
commercial cases or a practicing attorney with at least 15 years experience
with large commercial cases and experience as an international arbitrator. The
AAA shall send simultaneously to each party an identical list of at least nine
arbitrator candidates, and each party shall be permitted to strike two names
from the list, rank the remaining arbitrators in order of preference and
return the list to the AAA within ten (10) days of the transmittal date. If a
party does not return the list within the time specified, all persons named
therein shall be considered acceptable. From among the persons who remain on
both lists and in accordance with the designated order of mutual preference,
the AAA shall invite the acceptance of an arbitrator to serve.

         16.5 Arbitration Procedures. The hearing on the merits shall be held
as expeditiously as possible, if practicable no later than four (4) months
after the appointment of a single arbitrator or five (5) months after the
appointment of the third arbitrator, as applicable. The hearing shall, if
practicable, last no longer than ten (10) days, which shall be consecutive, if
possible. The award, which shall be in writing and shall briefly and concisely
state the findings of fact and conclusions of law on which it is based, shall
be rendered, if practicable, within twenty (20) days of the close of the
hearing. In rendering an award, the arbitrator(s) shall be required to follow
the law of the State of California. The arbitrator(s) are not empowered to
award damages in excess of compensatory damages and each party hereby
irrevocably waives any right to recover such damages with respect to any
dispute resolved by arbitration. The arbitrator(s) shall have the authority to
award the costs of the arbitration (including attorneys' fees and expenses) to
the prevailing party. The award shall be final and binding upon the parties
and shall be the sole and exclusive remedy between the parties regarding any
claims, counterclaims, issues or accounting presented to the arbitral
tribunal. Judgment upon any award may be entered in any court having
jurisdiction thereof. Any costs or fees (including attorneys' fees and
expenses) incident to enforcing the award shall be charged against the party
resisting such enforcement.

         16.6 Effect of Arbitration. By agreeing to arbitration, the parties
do not intend to deprive any court of its jurisdiction to issue a pre-arbitral
injunction, pre-arbitral attachment or other order in aid of arbitration
proceedings and the enforcement of any award. Without prejudice to such
provisional remedies as may be available under the jurisdiction of a national
court, the arbitral tribunal shall have full authority to grant provisional
remedies or modify or vacate any temporary or preliminary relief issued by a
court, and to award damages for the failure of any party to respect the
arbitral tribunal's orders to that effect.

         16.7 Statute of Limitations. The statute of limitations of the State
of California applicable to the commencement of a lawsuit shall apply to the
commencement of an arbitration hereunder, except that no defenses shall be
available based upon the passage of time during any negotiation or mediation
called for by the preceding paragraphs of this Article 16.

         16.8 Service of Process. The Company and each Member agrees that
service by registered or certified mail, return receipt requested, delivered
to such party at the address provided in Section 17.10 (Notices) will be
deemed in every respect effective service of process upon such Person for all
purposes of these provisions relating to mediation and arbitration. The
Company and each Member irrevocably submits to the jurisdiction of the courts
of the State of California and to any federal court located within such state
for the purpose of any action or judgement with respect to this Agreement,
regardless of where any alleged breach or other action, omission, fact or
occurrence giving rise thereto occurred. The Company and each Member hereby
irrevocably waives any claim that any action or proceeding brought in
California has been brought in any inconvenient forum.

         16.9 Additional Arbitration Provisions. The Company and each Member
shall take all actions necessary for awards and other judgements resulting
from the provisions set forth above to be recognized and enforceable in the
respective jurisdictions of organization of the Company, the Members and the
other parties to the Related Documents and, to the extent necessary, in other
jurisdictions in the Territory.

         16.10 Availability of Equitable Relief. Notwithstanding the foregoing
provisions of this Article 16, the Company and the Members acknowledge that a
material breach of this Agreement, the Program Supply Agreement or the
Distribution Agreement by a party thereto may result in irreparable harm to
the Company or a Member for which there is no adequate remedy at law.
Accordingly, if the Company or any Member reasonably believes that the Company
or another Member, as the case may be, (i) has materially breached this
Agreement, the Program Supply Agreement or the Distribution Agreement and (ii)
said breach will create irreparable harm to such Person for which there is not
adequate remedy at law, the allegedly harmed party shall be entitled to
preliminary, temporary or permanent equitable relief in any Federal or State
Court of competent jurisdiction located in the State of California.

                                  ARTICLE 17
                                 MISCELLANEOUS

         17.1 Additional Documents and Acts. Each Member agrees to execute and
deliver such additional documents and instruments and to perform such
additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions, and conditions of this Agreement and
the transactions contemplated hereby.

         17.2 Time is of the Essence. All dates and times in this Agreement
are of the essence.

         17.3 Remedies Cumulative. The remedies under this Agreement are
cumulative and shall not exclude any other remedies to which any Person may be
lawfully entitled.

         17.4 Currency; Payments.

         17.4.1 All amounts due from one Member to another Member, from the
Company to one or more Members or from one or more Members to the Company
pursuant to this Agreement and the other Related Documents shall be paid in
U.S. Dollars. If any portion of such payment is calculated on the basis of
revenues received in other currencies, such revenues shall be calculated using
the exchange rate published in the Wall Street Journal or as quoted by the
Central Bank of any country in the Territory, as of the business day
immediately preceding the date on which the payment initially is due. Such
exchange rate shall also apply to any portion of a payment which is permitted
to be deferred, regardless of whether such deferred payment is represented by
a promissory note or other instrument.

         17.4.2 All payments owing pursuant to this Agreement and the other
Related Documents will be made by wire transfer of immediately available
funds, net of any withholding required by applicable law. Each Member and the
Company will from time to time designate one or more accounts into which such
payments will be made and may designate one or more Affiliates to receive such
payments.

         17.4.3 Unless otherwise indicated, any payment hereunder or under the
other Related Documents not made when due will bear interest from the date due
to and including the date of payment in full at a rate equal to the Reference
Rate as in effect on the date payment was due.

         17.4.4 Each Member agrees for the benefit of the other Members that
if any payment owing by it under this Agreement is precluded or limited by a
restriction imposed by the jurisdiction of organization or operation of such
Member or the jurisdiction where such Member's funds are deposited, then an
Affiliate of such Member not subject to such restriction shall make the
required payment.

         17.5 Governing Law. This Agreement has been negotiated and entered
into in the State of California and all questions with respect to this
Agreement and the relationships of the parties hereunder will be governed by
the internal laws of the State of California, regardless of the choice of law
principles of California or any other jurisdiction.

         17.6 Authority. Each Member represents that (i) it has full power and
authority to enter into and perform this Agreement, (ii) this Agreement is the
valid and binding obligation of such Member, enforceable against it in
accordance with its terms, and (iii) the performance by such Member of its
obligations under this Agreement does not violate any law, rule or regulation
binding on such Member or such Member's charter documents.

         17.7 Assignment; No Third Party Beneficiary. Neither the Company nor
any Member shall assign its rights or delegate its obligations hereunder
without written consent of all of the Members except to an Affiliate of the
Company or such Member; provided that no such assignment shall relieve the
assignor of its obligations. The provisions of this Agreement are for the
benefit only of the Company and the Members, and no third party may seek to
enforce or benefit from these provisions except that the Persons indemnified
by the Company pursuant to Section 13.1 shall be third party beneficiaries of
this Agreement with respect to such Section only and shall have independent
standing to enforce or benefit from such Section. References to a party by
name herein shall also be deemed to be references to such party's permitted
successors and assigns.

         17.8 Agreement Negotiated. The Members are sophisticated and have
been represented by lawyers throughout the negotiation and execution of this
Agreement who have carefully negotiated the provisions hereof. As a
consequence, the parties do not believe the presumption of California Civil
Code Section 1654 and similar laws or rules relating to the interpretation of
contracts against the drafter of any particular clause should be applied in
this case and therefore waive its effects.

         17.9 Waivers; Remedies Cumulative, Amendments, etc.

         17.9.1 No failure or delay by the Company or any Member in exercising
any right, power or privilege under this Agreement shall operate as a waiver
thereof nor shall any single or partial exercise by any of them of any right,
power or privilege preclude any further exercise thereof or the exercise of
any other right, power or privilege.

         17.9.2 The rights and remedies herein provided are cumulative and not
exclusive of any rights and remedies provided by law.

         17.9.3 No provision of this Agreement may be amended, modified,
waived, discharged or terminated, other than by the express written agreement
of all of the Members nor may any breach of any provision of this Agreement be
waived or discharged except with the express written consent of the party(ies)
not in breach.

         17.10 Notices. All notices, requests, demands and other
communications required to be given under this Agreement shall be in writing
and shall conclusively be deemed to have been duly given to each Member (a)
when hand delivered, (b) the next business day if sent by a generally
recognized overnight courier service that provides written acknowledgement by
the addressee of receipt, or (c) when received, if sent by facsimile (with
appropriate answer back) or other generally accepted means of electronic
transmission addressed as follows:

                     If to PEGI to:

                     Playboy Entertainment Group, Inc.
                     Attention:  President
                     2706 Media Center Drive
                     Los Angeles, CA 90065
                     United States of America
                     Fax Number:  (323) 276-4500

                     with a copy to:

                     Playboy Enterprises, Inc.
                     Attention:  General Counsel
                     680 North Lake Shore Drive
                     Chicago, IL 60611
                     United States of America
                     Fax Number:  (312) 266-2042

                     if to Lifford to:

                     Lifford International Co. Ltd.
                     c/o Claxson Interactive Group Inc.
                     Attention:  General Counsel
                     404 Washington Avenue
                     8th Floor
                     Miami Beach, Florida 33139
                     Fax Number:  (305) 894-3606

                     with a copy to:

                     L. Kevin O'Mara, Esq.
                     Clifford Chance US LLP
                     200 Park Avenue
                     New York, New York 10166
                     United States of America
                     Fax Number: (212) 878-8375

                     if to the Company to:

                     Playboy TV - Latin America, LLC
                     c/o Claxson Interactive Group Inc.
                     Attention:  General Counsel
                     404 Washington Avenue
                     8th Floor
                     Miami Beach, Florida 33139
                     Fax Number:  (305) 894-3606

                     with copies to PEGI and Claxson

or to such other address, or facsimile transmission number as the relevant
addressee may hereafter by notice hereunder substitute.

         17.11 Public Announcements. Unless otherwise unanimously agreed by
the Management Committee or as required by law or by the stock exchange on
which any Member's stock, or the stock of any direct or indirect parent of a
Member, is traded, no public announcement will be made by any of the Company,
any Member, any Manager, the General Manager or any other officer of the
Company or any of their respective Affiliates with respect to the subject
matter of this Agreement.

         17.12 Survival. Notwithstanding the termination of this Agreement,
the dissolution of the Company, or a Member's ceasing to be a Member under
this Agreement, the following sections of this Agreement, as set forth as of
the Effective Date or as hereafter amended by agreement in writing signed by
both PEGI and Lifford, shall survive indefinitely and be enforceable by PEGI
or Lifford: Section 12.7, Section 13.1, Article 14, Article 16 and this
Section 17.12.

         17.13 Confidentiality. Unless otherwise unanimously agreed by the
Management Committee or as required by law or by the stock exchange on which
any Member's stock, or the stock of any direct or indirect parent of a Member,
is traded, no public announcement will be made by any of the Company, any
Member, any Manager, the General Manager or any other officer of the Company
or any of their respective Affiliates with respect to the subject matter of
this Agreement.

         17.13.1 General Confidentiality Requirements. Each Member shall and
shall cause its Affiliates to, maintain the confidentiality of all information
of a confidential or proprietary nature, which it may have or acquire
regarding customers, business, finances, assets or affairs of the Company or
the other Members or its Affiliates, except for any information, which is (a)
generally available to the public or becomes generally available to the public
other than through disclosure in violation of this Agreement, (b) required to
be disclosed by applicable law or to enforce the provisions of this Agreement
and the Related Documents, or (c) disclosed to its representatives (which term
shall be deemed to include their banks, private investors, independent
accountants and legal counsel); provided, such Member causes such
representatives to comply with the confidentiality requirements of this
Agreement.

         17.13.2 Exceptions to the General Confidentiality Requirements.

         (a) Notwithstanding anything stated to the contrary in Section
17.12.1 above, to the extent any Member invites a third party to participate
as an equity or non-equity investor or other provider of finance (a "Third
Party") in or to such Member or its respective Affiliates, the Members agree
that such Member may provide to such Third Party and its representatives
(which term shall be deemed to include their banks, private investors,
independent accountants and legal counsel), subject to the execution of an
appropriate confidentiality agreement, copies of (i) this Agreement, (ii) the
Related Documents, (iii) any other agreement by and between any of the parties
that relate to the Company and transactions contemplated by this Agreement and
the Related Documents, and (iv) any other financial or other information that
would be reasonable in the circumstances for a potential investor to require.
Notwithstanding the foregoing, no such information will be provided until a
confidentiality agreement to the benefit of the Members, in a form and
substance reasonably acceptable to the Members, has been signed by the Third
Party.

         (b) Notwithstanding anything stated to the contrary in Section
17.13.1 above, Claxson, PEI and the Members may provide to any institutional
investors and analysts and their representatives (which term shall be deemed
to include their independent accountants and legal counsel), subject to the
execution of an appropriate confidentiality agreement, such information
concerning the Company as is conventional to assist (i) such institutional
investors in deciding whether to invest or (ii) such analysts to prepare their
reports; provided, however, that no information may be disclosed to any entity
pursuant to this Section 17.13.2(b) without the prior written consent of the
Management Committee, with such consent only being withheld upon reasonable
determination by the Management Committee that the disclosure of such
information would reasonably be expected to cause harm, including with respect
to its competitive position, to the Company.

                           [SIGNATURE PAGE FOLLOWS]
<page>

         IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Agreement, effective as of the Effective Date.


                                        PLAYBOY ENTERTAINMENT GROUP, INC.


                                        By: /s/ James L. English
                                           ---------------------------------
                                           Name:  James L. English
                                           Title: President


                                        LIFFORD INTERNATIONAL CO. LTD.


                                        By:  /s/ Amaya Ariztoy
                                           ---------------------------------
                                           Name:    Amaya Ariztoy
                                           Title:   Attorney-in-Fact


Solely in connection with Article 14, Section 9.8 and 12.2.4 and Exhibit G of
this Agreement, agreed to and accepted by:


                                        PLAYBOY ENTERPRISES, INC.

                                        By:  /s/ Linda Havard
                                           ---------------------------------
                                           Name:    Linda G. Havard
                                           Title:   Executive Vice President
                                                    and Chief Financial Officer


Solely in connection with Article 14, Sections 9.9, 9.10 and 12.2.3 and
Exhibit G, agreed to and accepted by:


                                        CLAXSON INTERACTIVE GROUP INC.

                                       By:  /s/ Roberto Vivo-Chaneton
                                           ---------------------------------
                                           Name:    Roberto Vivo-Chaneton
                                           Title:   Chief Executive Office

<page>


                                   EXHIBIT A

                    CAPITAL CONTRIBUTION / CAPITAL ACCOUNT
                           AND ADDRESSES OF MEMBERS

                              AS OF APRIL 1, 2002



                               [EXHIBIT OMITTED]

<page>


                                   EXHIBIT B

                                TAX ALLOCATIONS



                               [EXHIBIT OMITTED]

<page>

                                   EXHIBIT C

                                CALCULATION OF
                               FAIR MARKET VALUE



                               [EXHIBIT OMITTED]

<page>


                                   EXHIBIT D

                         EXISTING AFFILIATE AGREEMENTS



                               [EXHIBIT OMITTED]

<page>


                                   EXHIBIT E

                            RESTRICTED TRANSFEREES



                               [EXHIBIT OMITTED]

<page>


                                   EXHIBIT F

                            APPROVED COMPANY NAMES


                               [EXHIBIT OMITTED]

<page>


                                   EXHIBIT G

                              REGISTRATION RIGHTS



                               [EXHIBIT OMITTED]

<page>


                                   EXHIBIT H

                               RELATED DOCUMENTS



                               [EXHIBIT OMITTED]

<page>

                                   EXHIBIT I

                          EXISTING PTV BV AGREEMENTS


                               [EXHIBIT OMITTED]

<page>


                                   EXHIBIT J

                          EXISTING PTV US AGREEMENTS


                               [EXHIBIT OMITTED]



</TEXT>
</DOCUMENT>
