Exhibit 10.4

            Binding Letter of Intent dated March 7, 2001 amending the
  Operating Agreement, Program Supply Agreement and Trademark License Agreement
                    relating to Playboy TV International, LLC

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

<PAGE>

                            PLAYBOY ENTERPRISES, INC.
                           680 NORTH LAKE SHORE DRIVE
                                CHICAGO, IL 60611

                                  March 7, 2001

Via Electronic and Regular Mail

William Fisher, President
Playboy TV International LLC
404 West Washington Avenue, 8th Floor
Miami Beach, FL 33139

            Re:   Binding Letter of Intent

Dear William:

      This letter (including the attachment hereto, the "Amendment Letter
Agreement") sets forth the binding agreement by and among Playboy Enterprises,
Inc. (on behalf of itself and Playboy Entertainment Group, Inc.), Carlyle
Investments LLC, Carlton Investments LLC and Playboy TV International LLC
("PTVI") (each, a "Party" and collectively, the "Parties") relating to certain
pre-existing agreements among the Parties, on the following terms and
conditions. It is agreed that this letter constitutes an agreement and is
legally binding on the Parties.

1.    Amendment of Pre-existing PTVI Agreements. The Parties agree to amend the
      pre-existing agreements by and among the Parties pursuant to the terms set
      forth in Attachment 1.

2.    Timing. The Parties agree to negotiate in good faith and execute a
      definitive version of the amendments incorporating the terms and
      conditions set forth in Attachment 1 (the "Definitive Amendments"). The
      Parties agree to use their respective best efforts to execute such
      Definitive Amendments as soon as possible. Notwithstanding the intention
      to execute the Definitive Amendments, the Parties agree that the terms of
      Attachment 1 shall be deemed to take effect immediately upon execution of
      this Amendment Letter Agreement.

3.    Default Agreement. This Amendment Letter Agreement constitutes a legally
      binding and enforceable agreement between the Parties hereto with respect
      to the provisions hereof. In the event that the Parties fail to execute
      the Definitive Amendments, the terms of this Amendment Letter Agreement
      shall be deemed the definitive amendments to the pre-existing agreements
      among the Parties. Notwithstanding the foregoing, except as indicated in
      this Amendment Letter Agreement or as subsequently modified in the
      Definitive Amendments, the agreements previously entered into among the
      Parties shall remain in full force and effect.

4.    Confidentiality. Except as provided herein, the existence and the terms of
      this Amendment Letter Agreement and the amendments contemplated herein
      shall be maintained in

<PAGE>

      confidence by the parties hereto and their respective officers, directors
      and employees. Except as compelled to be disclosed by judicial or
      administrative process or by other requirements of law, legal process,
      rule or regulation (including to the extent required in connection with
      any filings made by the parties or their controlling affiliates with the
      Securities and Exchange Commission) all public announcements, notices or
      other communications regarding such matters to third parties, including
      without limitation any disclosure regarding the transactions contemplated
      hereby, shall require the prior approval of all parties.

5.    General. This Letter Agreement shall be governed by, and construed and
      enforced in accordance with, the laws of the State of Delaware, without
      giving effect to principles of conflicts of law. For convenience, this
      Letter Agreement may be signed in more than one counterpart and signature
      pages may be exchanged by facsimile.

                  [Remainder of page intentionally left blank.]


<PAGE>

            If you determine that the foregoing is acceptable, we would
appreciate acknowledgment of that determination by the execution and delivery to
us of the enclosed copy of this letter.

            We look forward to your favorable consideration of this letter.

                                    Very truly yours,

                                    Playboy Enterprises, Inc.


                                    By: /s/ Linda Havard
                                        --------------------------

                                    Name: Linda Havard
                                          ------------------------

                                    Title: Chief Financial Officer
                                           -----------------------

The foregoing is agreed to and accepted.

Carlyle Investments LLC


By:    /s/ Steven Bandel
       --------------------------------

Name:  Steven Bandel
       --------------------------------

Title: President
       --------------------------------

The foregoing is agreed to and accepted

Carlton Investments LLC


By:    /s/ Steven Bandel
       --------------------------------

Name:  Steven Bandel
       --------------------------------

Title: President
       --------------------------------

Playboy TV International LLC


By:    /s/ William Fisher
       --------------------------------

Name:  William Fisher
       --------------------------------

Title: President
       --------------------------------


 .<PAGE>

                                  ATTACHMENT 1

                          AMENDMENTS TO PTVI AGREEMENTS

PARTIES                        (1) Carlyle Investments LLC and Carlton
                               Investments LLC (as successors to VSI,
                               "Carlyle/Carlton"), (2) PEGI, (3) PEI and (4)
                               PTVI.

BACKGROUND                     o     PTVI and PEI, together with Playboy.com,
                                     Inc. and Morehaven Investments, Inc., have
                                     entered into a binding letter of intent of
                                     even date herewith, including the exhibits
                                     attached thereto (the "Letter Agreement")
                                     that, among other things, relates to
                                     PTVI's participation in Playboy.com's
                                     local internet businesses and PTVI's
                                     creation and operation of web pages
                                     promoting the local PTVI channels (the "TV
                                     Web Pages" or "Interim TV Web Sites,"
                                     where applicable, collectively the "TV
                                     Sites")

                               o     The Letter Agreement contains various terms
                                     relating to the creation and operation of
                                     the TV Sites, including content control
                                     matters.

                               o     The Parties have agreed to amend the PTVI
                                     Operating Agreement, the PTVI Program
                                     Supply Agreement and the PTVI Trademark
                                     License Agreement as described in this term
                                     sheet to provide for the funding and
                                     operation of the TV Sites and to reflect
                                     various other agreements of the parties.

                               o     The Parties acknowledge that they have
                                     been negotiating, and continue to
                                     negotiate, certain other amendments to the
                                     PTVI Operating Agreement, the PTVI Program
                                     Supply Agreement and the PTVI Trademark
                                     License Agreement. Notwithstanding the
                                     amendments contained herein, and the
                                     expectation that they will immediately
                                     take effect, the Parties acknowledge that
                                     such negotiations will continue, on a
                                     timely basis and in good faith.

DEFINITIONS                    Certain terms are defined in the body of this
                               term sheet.  Capitalized terms used but not
                               defined in this term sheet will have the
                               meaning given to them in the PTVI Operating
                               Agreement, the PTVI Program Supply Agreement or
                               the PTVI Trademark License Agreement, as
                               applicable.


<PAGE>

AMENDMENTS TO
OPERATING AGREEMENT

FUNDING OBLIGATION;            o     To initially fund the creation and launch
INCREASE TO MAXIMUM                  of the TV Sites, Carlyle/Carlton and PEGI
FUNDING CAP                          will make Capital Contributions to PTVI,
                                     pro rata in accordance with their
                                     respective membership interests, subject to
                                     an aggregate maximum of $5 million (the
                                     "Contribution"). The Contribution will be
                                     funded pursuant to the Web Channel Annual
                                     Budget (defined below) until fully funded.

                               o     The Parties agree that no Member will be
                                     entitled to special or priority
                                     distributions with respect to the
                                     Contribution.

                               o     The Contribution will be in addition to
                                     each Member's obligation to make Mandatory
                                     Additional Cash Contributions, effectively
                                     increasing the maximum aggregate amount of
                                     Mandatory Additional Cash Contributions to
                                     $105 million. The Members will continue to
                                     fund PTVI's deficits with respect of its
                                     other business activities through
                                     Mandatory Additional Cash Contributions as
                                     contemplated by the Operating Agreement.

INDEPENDENT BUDGET             o     The Contribution will be specifically
                                     allocated to the creation and launch of
                                     the TV Sites in an independent budget that
                                     is determined and approved in a manner
                                     consistent with, but not made part of,
                                     PTVI's Annual Budgets (each, a "Web
                                     Channel Annual Budget"). The first Web
                                     Channel Annual Budget will be presented to
                                     PTVI's Management Committee as soon as
                                     reasonably practicable, but not later than
                                     June 15, 2001.

                               o     No funds of PTVI other than the
                                     Contribution will be allocated to fund the
                                     creation and operation of the TV Sites.

ADJUSTMENT TO BUY-UP OPTION    o     For purposes of determining Founders' Price
                                     in connection with an exercise by PEGI of
                                     the Buy-Up Option in Year 2, Year 3 or
                                     Year 4, the Capital Contributions included
                                     in the calculation of Founders' Price will
                                     include the actual amount of the


                                       2
<PAGE>

                                     Contribution made as of the measuring date,
                                     less amounts distributed, if any, to the
                                     Members from costs recouped by PTVI.

                               o     In all other respects, the Buy-Up Option
                                     will remain in full force and effect.

AMENDMENTS TO PROGRAM
SUPPLY AGREEMENT

AMENDMENTS TO                  o     ***
CALCULATION OF PROGRAM
LICENSE FEE

AMENDED SCOPE OF RIGHTS UNDER  o     The scope of the grant of rights under the
PROGRAM SUPPLY AGREEMENT             Program Supply Agreement will be amended
                                     to include the activities expressly
                                     contemplated by the Letter Agreement
                                     (including with respect to the TV Sites)
                                     and to acknowledge that such activities are
                                     subject to the other requirements of such
                                     agreement.

                               o     The duration of such increase in scope will
                                     be co-terminus with the transaction
                                     contemplated by the Letter Agreement,
                                     unless sooner terminated in accordance with
                                     the terms of the Program Supply Agreement.
AMENDMENTS TO
TRADEMARK LICENSE
AGREEMENT

AMENDED SCOPE OF RIGHTS UNDER  o     The scope of the grant of rights under the
TRADEMARK LICENSE                    Trademark License Agreement will be
AGREEMENT                            amended to include the activities
                                     expressly contemplated by the Letter
                                     Agreement (including with respect to the TV
                                     Sites) and to acknowledge that such
                                     activities are subject to the other
                                     requirements of such agreement.

                               o     The duration of such increase in scope will
                                     be co-terminus with the transaction
                                     contemplated by the Letter Agreement,
                                     unless sooner terminated in accordance with
                                     the terms of the Trademark License
                                     Agreement.


                                       3