CONFORMED COPY

                        THIRD AMENDMENT dated as of June 9, 2000 (this
                  "Amendment"), to the Credit Agreement dated as of February 26,
                  1999 (the "Credit Agreement"), among PLAYBOY ENTERPRISES,
                  INC., a Delaware corporation (the "Company"), PEI HOLDINGS,
                  INC., a Delaware corporation and wholly owned subsidiary of
                  the Company ("PHI"), the financial institutions from time to
                  time party thereto (the "Lenders") and CREDIT SUISSE FIRST
                  BOSTON, a bank organized under the laws of Switzerland, acting
                  through its New York branch, as administrative agent (in such
                  capacity, the "Administrative Agent"), as collateral agent and
                  as issuing bank.


            A. The parties hereto have entered into the Credit Agreement,
pursuant to which the Lenders have agreed to extend credit to the Borrower (as
defined in the Credit Agreement) on the terms and subject to the conditions set
forth therein.

            B. The Company and PHI have requested that the Lenders agree to
amend certain provisions of the Credit Agreement, and the Lenders are willing,
on the terms and subject to the conditions set forth below, to amend the Credit
Agreement as provided herein.

            C. Capitalized terms used and not otherwise defined herein shall
have the meanings assigned to them in the Credit Agreement.

            Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto hereby agree as follows:

            SECTION 1. Amendment of Credit Agreement. The Credit Agreement is
hereby amended as follows:

            (a) The definition of "Applicable Percentage" in Section 1.01 of the
Credit Agreement is amended by deleting clause (a) of the proviso after the
chart therein and replacing such clause (a) with the following: " (a) from the
Second Amendment Effective Date until the Determination Date next following
December 31, 2000, the Applicable Percentage shall be determined by reference to
Category 1 and".

            (b) The definition of "Catalog Operations Sale" in Section 1.01 of
the Credit Agreement is amended to read as follows:

            "Catalog Operations Sale" shall mean any sale, transfer or other
      disposition of all or substantially all of the catalog sales operations
      conducted by a division of Critics' Choice Video, Inc. and the assets and
      property used by such division to conduct such operations (it being
      understood that such assets and property include, but are not limited to,
      leasehold interests of Playboy Enterprises International, Inc. and the
      Company used by such division of Critics' Choice Video, Inc.)."


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                                                                               2


            (c) The definition of "Consolidated EBITDA" in Section 1.01 of the
Credit Agreement is hereby amended by deleting clause (ii) of the last sentence
therein and replacing such clause (ii) with the following:

            "(ii) following a Catalog Operations Sale that consists of a sale,
            transfer or disposition of all or substantially all of the catalog
            sales operations related to the Critics' Choice Video division of
            Critics' Choice Video, Inc., for any four-fiscal quarter period that
            includes the fiscal quarter ending on December 31, 2000,
            Consolidated EBITDA for such period shall be increased by the
            product of (x) $1,500,000 and (y) a fraction, the numerator of which
            is the number of days in the fiscal quarter ending December 31, 2000
            included in such four-fiscal quarter period which occurred after the
            consummation of the Catalog Operations Sale and the denominator of
            which is 92 and".

            (d) The following new definition of "Expression of Interest" is
hereby added to Section 1.01 of the Credit Agreement in the appropriate
alphabetical position:

            "Expression of Interest" means any of the following items with
      respect to a potential sale by Playboy Online of Equity Interests issued
      by Playboy Online: (a) a draft term sheet describing the terms of such
      sale prepared by a potential purchaser of such Equity Interests, (b)
      written comments from a potential purchaser responding to a term sheet
      prepared by Playboy Online, (c) a letter of interest from a potential
      purchaser of such Equity Interests describing proposed terms relating to
      such sale or (d) a certificate of an officer of Playboy Online that (i)
      attaches a copy of a draft stock purchase agreement relating to such a
      sale that has been sent to a potential purchaser of such Equity Interests,
      (ii) lists the dates of and participants in the meetings and negotiations
      that have taken place between Playboy Online and such potential purchaser
      and (iii) certifies that such officer believes in good faith that such
      potential purchaser has expressed a genuine interest in proceeding to
      negotiate and execute final documentation for such sale.

            (e) Section 6.04(e) of the Credit Agreement is amended to read as
      follows:

            "(e) investments in or loans and advances to Playboy Online (in each
      case made prior to the time that Playboy Online has made one or more sales
      (excluding sales to Affiliates of the Loan Parties or directors, officers
      or employees of an Unrestricted Subsidiary) of any Equity Interests of
      Playboy Online for an aggregate consideration that exceeds $20,000,000)
      that are (A) made during the period commencing on February 26, 1999 and
      ending on December 31, 1999 and that do not exceed $7,500,000 in the
      aggregate or (B) made after December 31, 1999 and that do not exceed (1)
      $10,000,000 in the aggregate for all such investments, loans and advances
      made pursuant to this clause (B) on or before June 8, 2000, (2)
      $13,500,000 (less the amount of any investments repaid pursuant to the
      proviso to this clause (e)) for all such investments, loans and advances
      made pursuant to this clause (B) on or before July 31, 2000, (3)
      $16,000,000 (less the amount of any investments repaid pursuant to the
      proviso to this clause (e)) for all such investments, loans and advances
      made pursuant to this clause (B) on or before the later of (a) August 31,
      2000 and (b) the date that the Borrower has delivered to the
      Administrative Agent an Expression of Interest (or a copy thereof), and
      (4) $17,500,000 (less the amount of any investments repaid pursuant to the
      proviso to this clause (e)) for all such investments, loans and advances
      made pursuant to this clause (B) at any time; provided, that not later
      than the Business Day following the receipt by Playboy Online of Net Cash
      Proceeds from the sale by Playboy Online of any Equity Interests of
      Playboy Online, the Company shall cause Playboy Online to repay, redeem or
      repurchase investments made pursuant to this clause (e) in an aggregate
      amount equal


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                                                                               3


      to (i) in the case of an underwritten public offering of the common stock
      of Playboy Online pursuant to an effective registration statement filed
      with the Securities and Exchange Commission, the amount, if any, by which
      the amount of all investments, loans and advances made in Playboy Online
      pursuant this Section 6.04(e) exceeds $10,000,000 and (ii) in the case of
      all other such sales, the lesser of (A) 10% of the amount of such Net Cash
      Proceeds and (B) the amount, if any, by which the amount of all
      investments, loans and advances made in Playboy Online pursuant to this
      Section 6.04(e) exceeds $10,000,000. Notwithstanding the provisions of
      Section 2.13(b), if any investment in Playboy Online is repaid,
      repurchased or redeemed as required by the proviso to the preceding
      sentence, such repurchase, redemption or repayment shall not constitute an
      Asset Sale that is subject to Section 2.13(b)."

            SECTION 2. Representations and Warranties. Each of the Company and
PHI represents and warrants to each Lender that, on and as of the date hereof,
and after giving effect to the amendments provided for in Section 1 of this
Amendment:

            (a) The representations and warranties set forth in Article III of
      the Credit Agreement are true and correct in all material respects with
      the same effect as if made on and as of the date hereof, except to the
      extent such representations and warranties expressly relate to an earlier
      date.

            (b) No Event of Default or Default has occurred and is continuing.

            (c) The aggregate amount of investments made in Playboy Online
pursuant to Section 6.04(e) of the Credit Agreement is greater than $9,500,000.

            SECTION 3. Effectiveness. This Amendment shall become effective upon
the execution of counterparts of the signature pages hereto by the Company, PHI,
the Administrative Agent and Lenders constituting the Required Lenders;
provided, that the amendments set forth in Section 1 shall not become effective
until each of the following conditions precedent shall have been satisfied, and
if any of such conditions shall not have been satisfied by June 16, 2000, then
the provisions of Section 1 shall terminate and cease to be of any force or
effect:

            (a) The Borrower shall have paid to the Administrative Agent, for
      the account of each Lender that shall have executed this Amendment at or
      prior to noon New York City time on June 9, 2000, in immediately available
      funds, an amendment fee equal to 0.125% of the aggregate outstanding Term
      Loans, Revolving Credit Exposure and unused Revolving Credit Commitment of
      such Lender on the date hereof.

            (b) The Administrative Agent shall have received (i) such evidence
      as the Administrative Agent or Cravath, Swaine & Moore, counsel to the
      Administrative Agent, shall reasonably have requested as to the corporate
      power and authority of the Company and PHI to enter into and perform their
      obligations under this Amendment, (ii) a completed (or substantially
      completed) private placement memorandum with respect to a private sale of
      Equity Interests by Playboy Online and (iii) a certificate of a Financial
      Officer certifying as to such matters as the Administrative Agent may
      reasonably request, including that the representations and warranties of
      the Borrower in this Amendment and in the Credit Agreement are true and
      correct after giving effect to this Amendment.

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                                                                               4


The Administrative Agent shall notify the Lenders of the satisfaction of the
foregoing conditions, and such notice shall, in the absence of manifest error,
conclusively evidence the satisfaction of such conditions.

            SECTION 4. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

            SECTION 5. Expenses. The Borrower shall pay all reasonable
out-of-pocket fees and expenses incurred by the Administrative Agent in
connection with the preparation, negotiation, execution and delivery of this
Amendment, including, but not limited to, the reasonable fees, disbursements and
other charges of Cravath, Swaine & Moore, counsel to the Administrative Agent.

            SECTION 6. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall be an original but all of which,
when taken together, shall constitute but one instrument. Delivery of an
executed counterpart of a signature page of this Amendment by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart of this Amendment.

            SECTION 7. Headings. Section headings used herein are for
convenience of reference only, are not part of this Amendment and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Amendment.

            SECTION 8. Effect of Amendment. Except as specifically stated
herein, the Credit Agreement shall continue in full force and effect in
accordance with the provisions thereof. As used therein, the terms "Agreement",
"herein", "hereunder", "hereinafter", "hereto", "hereof" and words of similar
import shall, unless the context otherwise requires, refer to the Credit
Agreement as modified hereby.


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                                                                               5


            IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the date first
above written.

                              PLAYBOY ENTERPRISES, INC,

                                 by
                                    /s/  Robert D. Campbell
                                    --------------------------------
                                    Name:  Robert D. Campbell
                                    Title: Senior Vice President, Treasurer


                              PEI HOLDINGS, INC.,

                                 by
                                    /s/  Robert D. Campbell
                                    --------------------------------
                                    Name:  Robert D. Campbell
                                    Title: Treasurer


                              CREDIT SUISSE FIRST BOSTON, individually and as
                              Administrative Agent, Collateral Agent and
                              Issuing Bank,

                                 by
                                    /s/  Joel Glodowski
                                    --------------------------------
                                    Name:  Joel Glodowski
                                    Title: MD


                                 by
                                    /s/  Julia P. Kingsbury
                                    --------------------------------
                                    Name:  Julia P. Kingsbury
                                    Title: Vice President


                              BANK OF AMERICA, N.A.,

                                 By
                                    /s/  Peter J. Gates Jr.
                                    --------------------------------
                                    Name:  Peter J. Gates Jr.
                                    Title: Senior Vice President


                              FIRST DOMINION FUNDING II,

                                 by
                                    /s/  David Lerner
                                    --------------------------------
                                    Name:  David Lerner
                                    Title: Authorized Signatory

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                                                                               6

                              FIRST DOMINION FUNDING III,

                                 by
                                    /s/  David Lerner
                                    --------------------------------
                                    Name:  David Lerner
                                    Title: Authorized Signatory


                              FRANKLIN FLOATING RATE TRUST,

                                 by
                                    /s/  Chauncey Lufkin
                                    --------------------------------
                                    Name:  Chauncey Lufkin
                                    Title: Vice President


                              MOUNTAIN CAPITAL CLO I LTD.,

                                  by
                                    /s/  Darren P. Riley
                                    --------------------------------
                                    Name:  Darren P. Riley
                                    Title: Director


                              GALAXY CLO 1999-1, LTD.,

                                 by
                                    /s/  Sabour Moini
                                    --------------------------------
                                    Name:  Sabour Moini
                                    Title: Authorized Signatory


                              HARRIS TRUST & SAVINGS BANK,

                                 by
                                    /s/  Scott F. Geik
                                    --------------------------------
                                    Name:  Scott F. Geik
                                    Title: Managing Director

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                                                                               7

                              ING BANK,

                                 by
                                    --------------------------------
                                    Name:
                                    Title:


                              KZH ING-2 LLC,

                                 by
                                    --------------------------------
                                    Name:
                                    Title:


                              KZH ING-3 LLC,

                                 by
                                    /s/  Susan Lee
                                    --------------------------------
                                    Name:  Susan Lee
                                    Title: Authorized Agent


                              KZH SOLEIL LLC,

                                 by
                                    --------------------------------
                                    Name:
                                    Title:


                              KZH SOLEIL-2 LLC,

                                 by
                                    /s/  Susan Lee
                                    --------------------------------
                                    Name:  Susan Lee
                                    Title: Authorized Agent


                              LASALLE BANK N.A.,

                                 by
                                    /s/  Kyle Freimuth
                                    --------------------------------
                                    Name:  Kyle Freimuth
                                    Title: Vice President

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                                                                               8

                              PPM AMERICA, INC., as Attorney-in-fact, on behalf
                              of Jackson National Life Insurance Company,

                                 by
                                    /s/  Michael J. Harrington
                                    --------------------------------
                                    Name:  Michael J. Harrington
                                    Title: Vice President


                              PPM SPYGLASS FUNDING TRUST,

                                 by
                                    /s/  Ashley R. Hamilton
                                    --------------------------------
                                    Name:  Ashley R. Hamilton
                                    Title: Authorized Agent


                              SRF TRADING, INC.,

                                 by
                                    --------------------------------
                                    Name:
                                    Title: