Document:

Exhibit 10.3

                       FIRST AMENDMENT TO CREDIT AGREEMENT

                                  July 30, 2004

PEI Holdings
680 North Lakeshore Drive
Chicago, Illinois 60611

Ladies and Gentlemen:

            Reference is hereby made to that certain Credit Agreement, dated as
of March 11, 2003 (the "Credit Agreement"), among PEI Holdings, Inc., a Delaware
corporation ("Borrower"), the financial institutions from time to time a party
thereto ("Lenders"), and Bank of America, N.A., as Agent for the Lenders
("Agent"). Unless otherwise defined herein, capitalized terms used herein shall
have the meanings provided to such terms in the Credit Agreement.

            Borrower has requested that Required Lenders agree to amend the
Credit Agreement in certain respects and Required Lenders have agreed to such
amendments, on the terms, and subject to the conditions, contained herein.

            Therefore, Borrower and Required Lenders hereby agree as follows:

            1. Amendment. The Credit Agreement is hereby amended by amending and
restating the definition of "Adjusted EBITDA" contained in Section 1.01 of the
Credit Agreement as follows:

            "Adjusted EBITDA" means net income, less income or plus loss from
      discontinued operations and extraordinary items, plus income taxes, plus
      interest expense, plus depreciation, depletion, and amortization
      (including programming amortization), plus restructuring charges, plus
      non-cash expenses or losses or any other non-cash charges, and minus cash
      investments in programming (plus for purposes of calculating Adjusted
      EBITDA for any period ending between, and including, June 30, 2004 and
      March 31, 2005, the following items: (a) the amount paid to Logix
      Development Corporation pursuant to that certain Settlement Agreement
      dated February 18, 2004 not to exceed $8,500,000 and (b) the redemption
      premium incurred in connection with the repayment of certain bonds, not to
      exceed $3,850,000, each solely to the extent deducted in the determination
      of net income and not otherwise added back in the calculation of Adjusted
      EBITDA), all determined for Playboy and its Restricted Subsidiaries on a
      consolidated basis and in accordance with GAAP.

<PAGE>

            2. Scope. Except as amended hereby, the Credit Agreement remains
unchanged and in full force and effect.

            3. Effectiveness. This First Amendment to Credit Agreement shall be
effective on July 30, 2004 when executed by Required Lenders and Agent and
agreed to by Borrower.

            4. Counterparts. This First Amendment to Credit Agreement may be
executed in one or more counterparts, each of which shall constitute an
original, but all of which taken together shall be one and the same instrument.

            5. Governing Law. THIS FIRST AMENDMENT TO CREDIT AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE;
PROVIDED THAT BORROWER, AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING
UNDER FEDERAL LAW.

                                              Very truly yours,

                                              BANK OF AMERICA, N.A., as Agent

                                              By /s/ Paul Folino
                                                --------------------------------
                                              Its Assistant Vice President
                                                  ------------------------------

                                              BANK OF AMERICA, N.A., as a Lender

                                              By /s/ Craig W. McGuire
                                                --------------------------------
                                              Its Vice President
                                                  ------------------------------

                                              LASALLE BANK NATIONAL ASSOCIATION,
                                              as a Lender

                                              By /s/ Kyle Freimuth
                                                --------------------------------
                                              Its Vice President
                                                  ------------------------------

ACKNOWLEDGED AND AGREED TO
THIS 29th DAY OF July, 2004:

PEI HOLDINGS, INC., as Borrower

By  Robert D. Campbell
  ------------------------------------
Its Treasurer
    ----------------------------------

                                      -2-Exhibit 10.4

                            SECOND AMENDMENT TO LEASE

      SECOND AMENDMENT TO LEASE, made as of this _28th_ day of June, 2004,
between LEXINGTON BUILDING CO. LLC, a New York limited liability company having
an address at c/o Winter Management Corp., 730 Fifth Avenue, New York, New York
10019 ("Landlord"), and PLAYBOY ENTERPRISES INTERNATIONAL, INC., a Delaware
corporation having an address at 680 North Lake Shore Drive, Chicago, Illinois
60611 ("Tenant").

                              W I T N E S S E T H:

      WHEREAS, Lexington Building Co. ("Lexington"), predecessor-in-interest to
Landlord, and Tenant entered into a Lease, dated as of August 11, 1992 (the
"Original Lease"), whereby Tenant leased from Lexington the entire third (3rd)
floor (the "3rd Floor Space") and the entire twenty-third (23rd) floor,
including the terrace on the 23rd floor of the Building (the "23rd Floor Space")
and a portion of the fourth (4th) floor (the "4C Space") (collectively, the
"Original Premises") in the building known as 730 Fifth Avenue, New York, New
York (the "Building");

      WHEREAS, Lexington Building Co. L.P. ("Lexington L.P."),
predecessor-in-interest to Landlord, and Tenant entered into a letter agreement,
dated as of August 11, 1992 (the "Letter Agreement"), whereby Lexington L.P.
granted Tenant certain rights with respect to additional space on the fourth
(4th) floor of the Building during the Initial Term (as defined in the Original
Lease);

      WHEREAS, pursuant to the Lease and the Letter Agreement, Tenant had an
option to lease Space 4B (as defined in the Original Lease);

      WHEREAS, by letter from Lexington L.P. to Tenant, dated as of July 23,
1998 (the "Space 4B Extension Letter"), Lexington L.P. extended the time by
which Tenant had to exercise Tenant's option to lease Space 4B (as defined in
the Original Lease, the "4B Space") to September 15, 1998 and, by letter from
Tenant to Lexington L.P., dated as of September 3, 1998 (the "Space 4B Exercise
Letter"), Tenant exercised its option to lease the 4B Space in accordance with
the terms and provisions set forth in the Original Lease;

      WHEREAS, Tenant, pursuant to the Letter Agreement had a right of first
offer to lease Space 4A (as defined in the Original Lease, the "4A Space") and
Lexington L.P., by letter to Tenant, dated March 24, 1999 (the "Offer Letter"),
offered to lease to Tenant a portion of the 4A Space;

      WHEREAS, by letter to Tenant, dated as of April 7, 1999 (the "ROFO
Extension Letter"), Lexington L.P. extended the time to exercise Tenant's right
of first offer as described in the Offer Letter to May 1, 1999 and, by letter to
Lexington L.P., dated as of April 27, 1999 (the "ROFO Exercise Letter"), Tenant
exercised its right of first offer as to a portion of the 4A Space described in
the Offer Letter (the "Partial 4A Space");

      WHEREAS, Tenant represents that Playboy Acquisition Corp. merged with and
into Playboy Enterprises, Inc. and the name of the surviving corporation has
been changed to Playboy Enterprises International, Inc. ("Playboy
International"), all as evidenced by that certain Certificate of Merger, dated
as of March 15, 1999;

      WHEREAS, pursuant to that certain First Amendment to Lease (the "First
Amendment") between Lexington L.P. and Tenant, dated as of December 8, 1999,
whereby Tenant leased from Lexington L.P. the Partial 4A Space and the Original
Lease was modified in certain other respects (the Original Lease, the Letter
Agreement, the Space 4B Extension Letter, the Space 4B Exercise Letter, the
Offer Letter, the ROFO Extension Letter, the ROFO Exercise Letter and the First
Amendment shall be collectively referred to herein as the "Lease"; the Original
Premises, the 4B Space and the Partial 4A Space shall be collectively referred
to herein as the "Existing Premises");

      WHEREAS, Landlord has succeeded to the interest of Lexington and Lexington
L.P. under the Lease;

<PAGE>

      WHEREAS, the present Expiration Date of the Lease is August 31, 2004;

      WHEREAS, Landlord and Tenant desire (i) that Tenant lease additional
premises consisting of the remaining portion of the 4A Space (the "Additional
4th Floor Space") and a portion of the fifth (5th) floor (the "5th Floor Space")
in the Building as more particularly shown on the floor plans attached hereto as
Exhibit A-1, (ii) to extend the term of the Lease, and (iii) to modify the Lease
in certain other respects as hereinafter set forth; and

      WHEREAS, upon the leasing of the Additional 4th Floor Space, Tenant will
be leasing the entire rentable portion of the fourth (4th) floor in the Building
(the "4th Floor Space"), such entire rentable portion being as more particularly
shown on Exhibit A-2 hereto.

      NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth below, Landlord and Tenant hereby agree as follows:

            1. Definitions. Unless otherwise defined herein, all capitalized
terms used herein shall have the meanings ascribed to them in the Lease.
References in this Agreement to the "Lease" shall be deemed to mean the Lease,
as amended hereby.

            2. Term.

                  A. The term of the Lease with respect to the 3rd Floor Space,
the 4C Space, the 4B Space and the Partial 4A Space only is hereby extended upon
and subject to the same terms, covenants and conditions as in the Lease, except
as otherwise set forth herein, for a period (the "Extended Term") commencing on
September 1, 2004 (the "Extended Term Commencement Date") and ending on August
31, 2019 (the "Extended Term Expiration Date"). As of the date hereof, the
"Term", as defined in the Lease, shall mean the original term as extended by the
Extended Term, and the "Expiration Date", as defined in the Lease, shall mean
the Extended Term Expiration Date, unless the term of the Lease, as extended
hereby, shall sooner terminate pursuant to the terms of the Lease or by law.

                  B. Notwithstanding the foregoing, the Term of the Lease with
respect to the 23rd Floor Space shall expire on August 31, 2004. Tenant shall
vacate and surrender the 23rd Floor Space on or before August 31, 2004 in vacant
and broom clean condition and otherwise in the condition required by Article 21
of the Lease. If Tenant fails to so vacate and surrender the 23rd Floor Space by
such date, then the provisions of Paragraph 57D shall apply to the 23rd Floor
Space, except that in lieu of the amounts set forth therein, at Landlord's
option, Tenant shall pay to Landlord $500 per day for the first 30 days
following August 31, 2004 and $1000 per day thereafter until Tenant shall have
vacated and surrendered the 23rd Floor Space in the condition required by
Article 21 of the Lease; it being understood that in the event that Tenant so
fails to vacate and surrender the 23rd Floor Space by August 31, 2004, (i)
Tenant shall not be deemed in default under the Lease with respect to the 3rd
Floor Space, the 4th Floor Space or the Fifth Floor Space and (ii) none of the
provisions of Paragraph 57D shall apply to the 3rd Floor Space, the 4th Floor
Space or the 5th Floor Space.

            3. Additional Premises.

                  A. The Additional 4th Floor Space shall be delivered to Tenant
on the Extended Term Commencement Date vacant and in broom clean condition.
Effective as of the Extended Term Commencement Date, the Additional 4th Floor
Space shall be deemed to be included in the Premises for all purposes of the
Lease and all references in the Lease and this Agreement to the "Demised
Premises", "Premises", "premises", or "demised premises" shall be deemed to
include the Additional 4th Floor Space. Except as otherwise herein provided, all
other terms and conditions of the Lease, including those applicable to items of
Fixed Rent and Additional Rent payable pursuant to the Lease, shall be deemed to
be, and shall remain, as set forth in the Lease throughout the remainder of the
Term of the Lease, as amended hereby. Tenant expressly waives any right to
rescind the Lease, as amended hereby, with respect to the Additional 4th Floor
Space under Section 223-a of the New York Real Property Law or under any present
or future statute of similar import then in force and further expressly waives
the right to recover any damages, direct or indirect, which may result from
Landlord's failure to deliver

                                       2
<PAGE>

possession of the Additional 4th Floor Space on the Extended Term Commencement
Date, however in such event (provided Tenant is not responsible for the
inability to obtain possession) the Rent Commencement Date for the Fixed Rent
and any Additional Rent payable for the Additional 4th Floor Space shall be
extended on a day for day basis until the date on which Landlord delivers
possession of the Additional 4th Floor Space to Tenant in the condition required
hereunder.

                  B. If Landlord does not deliver the Additional 4th Floor
Space, the 5th Floor Space or any Option Space on the applicable date when
Landlord is obligated to do so, Tenant shall have the same termination rights
with respect to those spaces as are set forth in the Original Lease in Paragraph
56G with respect to an Additional Space. Similarly, as provided in Paragraph
56G, Landlord shall use its best efforts to cause the eviction of any holdover
tenants in any such spaces, including without limitation instituting and
diligently prosecuting an action for summary possession in a court of
appropriate jurisdiction; it being understood that Landlord shall not be
obligated to pay or otherwise compensate any holdover tenants to relinquish
possession of any such space.

                  C. Notwithstanding anything herein to the contrary, in the
event that any of the rents payable under the Lease are abated due to casualty
or any other matter which results in rent being abated, the Rent Commencement
Date, as defined below, with respect to any space subject to such an abatement
shall be tolled on a day for day basis.

                  D. As used herein, the term "Rent Commencement Date" shall
mean:

                        (a) with respect to the 3rd Floor Space and the 4th
Floor Space (other than the Additional 4th Floor Space), December 1, 2004;

                        (b) with respect to the Additional 4th Floor Space,
December 1, 2004, as such date may be extended as provided in Paragraph 3A
above; and

                        (c) with respect to the Fifth Floor Space, one hundred
twenty (120) days after the 5th Floor Space Commencement Date, as defined below.

                  E. Subject to Paragraph 6F hereof, effective as of the date on
which Landlord shall deliver vacant, broom clean possession to Tenant of the 5th
Floor Space (such date being the "5th Floor Space Commencement Date") and ending
on the Extended Term Expiration Date, the 5th Floor Space shall be deemed to be
included in the Premises for all purposes of the Lease. Effective as of the 5th
Floor Space Commencement Date, all references in the Lease and this Agreement to
the "Demised Premises", "Premises", "premises", or "demised premises" shall be
deemed to include the 5th Floor Space. Except as otherwise herein provided, all
other terms and conditions of the Lease, including those applicable to items of
Fixed Rent and Additional Rent payable pursuant to the Lease, shall be deemed to
be, and shall remain, as set forth in the Lease throughout the remainder of the
Extended Term of the Lease, as amended hereby. Subject to Paragraph 3B above,
Tenant expressly waives any right to rescind the Lease, as amended hereby, with
respect to the 5th Floor Space under Section 223-a of the New York Real Property
Law or under any present or future statute of similar import then in force and
further expressly waives the right to recover any damages, direct or indirect,
which may result from Landlord's failure to deliver possession of the 5th Floor
Space on the 5th Floor Space Commencement Date.

                  F. Tenant acknowledges that the 5th Floor Space currently is
leased to another tenant under a lease that is scheduled to expire on July 31,
2007 and that Landlord currently anticipates that the 5th Floor Space
Commencement Date shall occur on August 1, 2007. Landlord shall use reasonable
efforts (without being obligated to incur any costs n connection therewith) to
obtain such other tenant's agreement to surrender possession of the 5th Floor
Space to Landlord prior to July 31, 2007. Tenant acknowledges, however, that any
such agreement must be acceptable to Landlord in its sole and absolute
discretion, and Landlord shall have no liability to Tenant if Landlord does not
enter into any such agreement for any reason whatsoever. Following July 31,
2007, Landlord's obligations with respect to the Fifth Floor Space shall be as
set forth in the second sentence of Paragraph 3B above.

                                       3
<PAGE>

            4. Fixed Rent and Additional Rent. Except as otherwise provided in
this Section below or as otherwise provided in this Agreement, the terms and
conditions of the Lease, including those applicable to Fixed Rent and Additional
Rent payable pursuant to the Lease, shall be deemed to be, and shall remain, as
set forth in the Lease through the Extended Term Expiration Date. The Lease is
hereby amended as follows:

                  A. Tenant shall pay to Landlord Fixed Rent with respect to the
3rd Floor Space as follows: (a) from the Rent Commencement Date with respect to
the 3rd Floor Space through August 31, 2009, at a rental rate of $1,428,660.00
per annum, (b) from September 1, 2009 through August 31, 2014, at a rental rate
of $1,555,652.00 per annum, and (c) from September 1, 2014 through the Extended
Term Expiration Date, at a rental rate of $1,682,644.00 per annum, and otherwise
in accordance with the terms of the Lease.

                  B. Tenant shall pay to Landlord Fixed Rent with respect to the
4th Floor Space as follows: (a) from the Rent Commencement Date with respect to
the 4th Floor Space through August 31, 2009, at a rental rate of $1,428,660.00
per annum, (b) from September 1, 2009 through August 31, 2014, at a rental rate
of $1,555,652.00 per annum, and (c) from September 1, 2014 through the Extended
Term Expiration Date, at a rental rate of $1,682,644.00 per annum, and otherwise
in accordance with the terms of the Lease. Notwithstanding anything herein to
the contrary, if the Additional 4th Floor Space is not delivered on the Extended
Term Commencement Date, the Fixed Rent payable with respect to the 4th Floor
Space shall be proportionately reduced until the Rent Commencement Date with
respect to the Additional 4th Floor Space shall have occurred.

                  C. Tenant shall pay to Landlord Fixed Rent with respect to the
5th Floor Space as follows: (a) from the Rent Commencement Date with respect to
the 5th Floor Space through August 31, 2009, at a rental rate of $444,555.00 per
annum, (b) from September 1, 2009 through August 31, 2014, at a rental rate of
$484,071.00 per annum, and (c) from September 1, 2014 through the Extended Term
Expiration Date, at a rental rate of $523,587.00 per annum, and otherwise in
accordance with the terms of the Lease.

                  D. Anything to the contrary provided for hereinabove
notwithstanding, Tenant shall not be obligated to pay the Fixed Rent, Tenant's
Operating Payment and Tenant's Tax Payment provided for herein until the
applicable Rent Commencement Date. Tenant shall, however, continue to be
obligated during such periods to pay any and all Additional Rent with respect to
the 3rd Floor Space, the 4th Floor Space and the 5th Floor Space and other
charges payable by Tenant hereunder in accordance with the terms of the Lease,
as amended hereby.

                  E. Tenant shall continue to pay Additional Rent, including
without limitation Tenant's Tax Payment and Additional Rent payment with respect
to increases in Operating Expenses in accordance with terms of the Lease, except
that as of the Extended Term Commencement Date (a) the term "Landlord's Basic
Tax Liability", as defined in Paragraph 38A(c) of the Original Lease shall mean
the liability of Landlord for the fiscal year commencing on July 1, 2004 and
ending June 30, 2005 for Taxes and "Tax Year" shall mean the twelve month period
commencing July 1, 2005 and each twelve (12) month period thereafter; (b) the
term "Tenant's Operating Proportionate Share", as defined in Paragraph 38A(d) of
the Original Lease, shall mean 16.74% (such percentage includes both the 3rd
Floor Space and the 4th Floor Space), (c) the term "Tenant's Tax Proportionate
Share", as defined in Paragraph 38A(d) of the Original Lease, shall mean 14.18%
(such percentage includes both the 3rd Floor Space and the 4th Floor Space), (d)
the term "Landlord's Base Operating Year", as defined in Paragraph 38A(f) of the
Original Lease, shall mean the calendar year commencing on January 1, 2005.

                  F. Notwithstanding anything herein to the contrary, if the
Additional 4th Floor Space is not delivered on the Extended Term Commencement
Date, Tenant's Operating Proportionate Share and Tenant's Tax Proportionate
Share shall be proportionately reduced until the Additional 4th Floor Space has
been delivered to Tenant in the condition required hereunder.

                  G. As of the Rent Commencement Date with respect to the 5th
Floor Space, Tenant shall make Tenant's Tax Payment and Additional Rent payment
with respect to

                                       4
<PAGE>

increases in Operating Expenses in accordance with the terms of Article 38 of
the Original Lease and as modified by this Agreement, except that with respect
to the 5th Floor Space (a) the term "Tenant's Operating Proportionate Share", as
defined in Paragraph 38A(d) of the Original Lease (as amended hereby), shall
mean 2.61%, and (b) the term "Tenant's Tax Proportionate Share", as defined in
Paragraph 38A(d) of the Original Lease (as amended hereby), shall mean 2.21%.

                  H. The phrase "expiration of the Abatement Period" in the
third line of Paragraph 38B(a) of the Original Lease shall be deleted and the
term "Extended Term Commencement Date" shall be inserted in lieu thereof.

                  I. The phrase "expiration of the Abatement Period" in the
third line of Paragraph 38C of the Original Lease is hereby deleted and the term
"Extended Term Commencement Date" is inserted in lieu thereof.

            5. Electricity; HVAC; Elevators.

                  A. From and after the Extended Term Commencement Date, Tenant
shall compensate Landlord for supplying Tenant with electrical current to the
3rd Floor Space and the 4th Floor Space on a submetering basis in accordance
with the terms of Article 41 of the Original Lease. From and after the 5th Floor
Space Commencement Date, Tenant shall compensate Landlord for supplying Tenant
with electrical current to the 5th Floor Space on a submetering basis in
accordance with the terms of Article 41 of the Original Lease.

                  B. The reference in the first sentence of Paragraph 39 A.3. of
the Original Lease to "six (6) tons" is hereby deleted and the phrase "ten (10)
tons" is inserted in lieu thereof.

                  C. Landlord agrees that the provisions of Section 40 B.2. of
the Original Lease shall apply to (i) any work performed to renovate the
Existing Premises, the Additional 4th Floor Space, the 5th Floor Space and any
Option Space and (ii) Tenant's move into any portion of the Premises subject to
the Lease.

            6. Landlord's Contribution/Work.

                  A. Landlord shall make a contribution in the amount of sums
expended by Tenant on Tenant's permanent leasehold improvements in the 3rd Floor
Space, the 4th Floor Space and the 5th Floor Space to prepare such portions of
the Premises for Tenant's occupancy during the Extended Term ("Tenant's Extended
Term Work"), but in no event greater than (i) $2,222,360 in the aggregate with
respect to the 3rd Floor Space and the 4th Floor Space collectively (the "3rd
Floor/4th Floor Contribution"), and (ii) $444,555 in the aggregate with respect
to the 5th Floor Space (the "5th Floor Contribution"). Notwithstanding the
foregoing, Tenant shall have the right from time to time, by notice to Landlord,
to reallocate up to a maximum aggregate of $350,000 from the 3rd Floor/4th Floor
Contribution to the 5th Floor Contribution. Each of the 3rd Floor/4th Floor
Contribution and the 5th Floor Contribution shall be made and conditioned upon
the same terms and conditions as applied to the Landlord's Contribution in
Section 54E of the Original Lease. The 3rd Floor/4th Floor Contribution only
shall be applied to Tenant's Extended Term Work within the 3rd Floor Space and
the 4th Floor Space, and the 5th Floor Contribution only shall be applied to
Tenant's Extended Term Work within the 5th Floor Space. There shall be no time
period by which Tenant must incur the expenses which are reimbursable from the
3rd Floor/4th Floor Contribution and/or the 5th Floor Contribution.

                  B. Notwithstanding anything to the contrary contained herein,
with respect to Tenant's Extended Term Work only, Section Article 54E of the
Original Lease shall be amended as follows:

                        (a) the definition of "Soft Costs", as defined in the
first paragraph, shall be deemed to include the cost of consulting fees,
telephone and data wiring and Tenant's furniture and equipment installed in the
Premises; with respect to Tenant's Extended

                                       5
<PAGE>

Term Work, no more than 15% in the aggregate of each of the 3rd Floor/4th Floor
Contribution and the 5th Floor Contribution may be applied to Soft Costs;

                        (b) the first sentence of the last paragraph shall be
deleted, and the following shall be substituted therefor: "Pro Rata
Installments" shall mean the cost of the portion of Tenant's Extended Term Work
with respect to the applicable portion of the Premises (i.e., the 3rd Floor
Space and the 4th Floor Space collectively or the 5th Floor Space) and covered
by such request for payment by Tenant multiplied by a fraction, the numerator of
which shall be the maximum amount of the 3rd Floor/4th Floor Contribution (as
the same may have been decreased as a result of reallocation pursuant to the
terms of Paragraph 6A above), as the case may be, or the 5th Floor Contribution
(as the same may have been increased as a result of reallocation pursuant to the
terms of Paragraph 6A above), as the case may be, and the denominator of which
shall be the then projected cost of Tenant's Extended Term Work with respect to
3rd Floor Space and the 4th Floor Space collectively, or the 5th Floor Space, as
the case may be. The projected cost of Tenant's Extended Term Work shall be
reasonably estimated by Tenant, subject to Landlord's reasonable approval.
Tenant shall provide reasonably detailed evidence of such estimated costs to
Landlord upon request. Such estimates shall be updated by Tenant from time to
time (subject to Landlord's reasonable approval), and the Pro Rata Percentage
shall be revised in accordance with and subject to the last paragraph of Section
54E.

                        (c) Subparagraph (c) of Section 54E shall be deleted.

                  C. Other than Sections 54E, 54H and 54K, as any of the
foregoing may have been amended hereby, Article 54 of the Original Lease shall
not apply to Tenant's Extended Term Work or to the work to be performed by
Landlord pursuant to Section 6F below.

                  D. Tenant's Extended Term Work shall be performed in
accordance with, and subject to, the applicable terms and conditions of the
Lease, including without limitation Articles 3 and 53 of the Original Lease,
except that the following shall be deleted therefrom: (i) Sections 53B(a) and
53B(b) of the Original Lease; and (ii) the words "this Article or under" in the
fourth line and the words "and Section 57K" in the fifth line of Section 53B(c)
of the Original Lease.

                  E. In connection with Tenant's Extended Term Work, Tenant
shall have the right to select its own general contractor and subcontractor
subject to Landlord's prior approval, which approval shall not be unreasonably
withheld or delayed, except with respect to any party or entity providing work
or services to or on the Building plumbing lines or electrical or life safety
systems, in which case, such approval shall be granted or withheld in Landlord's
sole and absolute discretion unless such contractor is on a Building approved
list provided to Tenant by Landlord, which list may be changed from time to
time. Upon request of Tenant, Landlord shall provide Tenant with a current
Building list of approved contractors. Notwithstanding anything in the Lease to
the contrary, except as provided in Section 40B2 and Section 53A(b) of the
Original Lease, Tenant shall not have any obligation to reimburse Landlord for
any costs incurred by Landlord in connection with Tenant's Extended Term Work,
including without being limited to, overhead, supervision or profit.

                  F. Notwithstanding anything in the Lease to the contrary: (a)
Tenant shall be deemed to have accepted the 3rd Floor Space and the 4th Floor
Space (other than the Additional 4th Floor Space) in their respective "as is"
condition as of the Extended Term Commencement Date; (b) Tenant shall accept
possession of the Additional 4th Floor Space in its "as is" condition on the
Extended Term Commencement Date vacant and in broom clean condition, (c) Tenant
shall accept possession of the 5th Floor Space in its "as is" condition on the
5th Floor Space Commencement Date vacant and in broom clean condition, (d)
Landlord shall not be required to perform any work to the 3rd Floor Space, the
4th Floor Space or the 5th Floor Space, except that Landlord shall (i) deliver
an ACP-5 certificate for the Additional 4th Floor Space and the 5th Floor Space
to Tenant within fifteen (15) days of the applicable commencement date for such
space, and (ii) provide all legally required points for connection to the
Building's Class "E" fire alarm system on the fourth and fifth floor of the
Building for the Additional 4th Floor Space and the 5th Floor Space
respectively, as reasonably requested by Tenant, and (e) except as expressly set
forth in this Agreement, Landlord shall not provide any free rent, rent
abatement, or work allowance or

                                       6
<PAGE>

contribution to Tenant with respect to the 3rd Floor Space, the 4th Floor Space
or the 5th Floor Space. Any ACP-5 Certificate delivered pursuant to the terms
hereof, including without limitation Paragraph 15E(i) shall indicate that the
space is a "no asbestos project" and in the event that there is asbestos in such
space, Landlord at its cost and expense shall cause the removal or encapsulation
of such asbestos.

                  G. Notwithstanding anything to the contrary contained in the
Lease or herein, effective as of the date hereof, Section 54K of the Original
Lease shall be deemed deleted and shall be replace with the following:

                  "K. Notwithstanding anything herein to the contrary, if
            Landlord defaults with respect to its obligations to pay any portion
            of the 3rd Floor/4th Floor Contribution and/or the 5th Floor
            Contribution, following ten (10) days' notice to Landlord, Tenant
            may, any time after the expiration of such ten day period, send a
            further notice to Landlord, containing a statement in capitalized
            letters and bold type: "LANDLORD'S FAILURE TO PAY THE 3RD FLOOR/4TH
            FLOOR CONTRIBUTION AND/OR THE 5TH FLOOR CONTRIBUTION [OR PORTION OF
            SUCH CONTRIBUTION] AS PROVIDED IN THE LEASE WITHIN FIVE (5) BUSINESS
            DAYS OF THE DELIVERY OF THIS NOTICE SHALL ENTITLE TENANT TO A RENT
            OFFSET RIGHT UNDER THE LEASE." If Landlord has not timely paid any
            such amounts due within five (5) business days of the delivery of
            such second notice, Tenant shall have the right to offset any such
            payment against the next ensuing installments of Fixed Rent and
            Additional Rent due hereunder, with interest at the Interest Rate
            for the period from the expiration of such five (5) business day
            period until the earlier of the date paid to Tenant by Landlord or
            so offset by Tenant."

                  H. Landlord hereby consents, with respect to the concept and
intent only, to Tenant's installation of an interior staircase which shall be
located between the 4th Floor Space and the 5th Floor Space (the "Staircase");
it being understood that: (i) Landlord's consent to such proposed Staircase
remains subject to Landlord's review and approval of final construction and
engineering plans and specifications and compliance by the Tenant with
Paragraphs 3 and 53 of the Lease and the other applicable provisions of the
Lease relating to Alterations, (ii) Tenant shall pay to Landlord, within thirty
(30) days of demand, as Additional Rent, Landlord's actual reasonable
third-party architectural and engineering costs and expenses for reviewing said
plans and specifications and inspecting the Staircase, and (iii) Tenant shall be
obligated to remove the Staircase, restore the ceiling and the slab to the
condition existing as of the date hereof and repair any damage caused by such
removal and/or restoration work in connection with the same prior to the
expiration or sooner termination of the Lease.

            7. HVAC. Heating, ventilation and air-conditioning shall be supplied
to the Premises in accordance with the provisions of Article 39 of the Original
Lease.

            8. Unenforceability. If any of the provisions of the Lease, or the
application thereof to any person or circumstance, shall, to any extent, be
invalid or unenforceable, the remainder of the Lease or the application of such
provision or provisions to persons or circumstances other than those as to whom
or which it is held invalid or unenforceable shall not be affected thereby, and
every provision of the Lease shall be valid and enforceable to the fullest
extent permitted by law.

            9. Brokerage. Tenant and Landlord represent to each other that it
dealt with no broker or brokers other than Cushman & Wakefield, Inc. and Newmark
& Company Real Estate, Inc. (collectively, the "Brokers") in the negotiation of
this Agreement. Tenant and Landlord hereby agree to indemnify and hold the
non-breaching party harmless from any and all claims, liabilities, suits, costs
and expenses, including reasonable attorneys' fees and disbursements arising out
of any inaccuracy or alleged inaccuracy of the above representation. Landlord
shall pay the Brokers a commission pursuant to separate agreements with each of
the Brokers. The provisions of the Article shall survive the termination or
expiration of this Agreement.

                                       7
<PAGE>

            10. Inapplicable Provisions. As of the date hereof, Section 35B; the
second sentence of Section 41(a); Article 52; Sections 56A through E; and
Section 57M of the Original Lease shall be deemed deleted in its entirety.
Article 44 of the Original Lease and Article 7 of the First Amendment shall not
apply to this Agreement. Articles 4 and 5 of the First Amendment shall not apply
to the Extended Term. The Letter Agreement hereby is null and void and of no
further force or effect.

            11. Non-Liability and Indemnification. As of the date hereof,
Article 48 of the Original Lease shall be deemed deleted in its entirety and
shall be replaced with the following:

            "A. To the fullest extent permitted by law, neither Landlord nor
      Landlord's Agents, officers, directors, shareholders, partners, members or
      principals (disclosed or undisclosed) shall be liable to Tenant or
      Tenant's agents, employees, contractors, invitees or licensees or any
      other occupant of the Premises for any injury to Tenant or to any other
      person or for any damage to, or theft or other loss of, any of Tenant's
      property or of the property of any other person, except to the extent such
      damage or theft results from the negligence or willful misconduct of
      Landlord or Landlord's Agents. Tenant waives, to the full extent permitted
      by law, any claim for consequential damages in connection therewith and
      Landlord and Landlord's Agents shall not be liable, to the extent of
      Tenant's insurance coverage, for any loss or damage to any person or
      property even if due to the negligence of Landlord or Landlord's Agents.
      Any Building employee to whom any property shall be entrusted by or on
      behalf of Tenant shall be deemed to be acting as Tenant's agent with
      respect to such property and neither Landlord nor Landlord's Agents shall
      be liable for any loss of or damage to any such property by theft or
      otherwise, except to the extent such damage or theft results from the
      negligence or wilful misconduct of Landlord or Landlord's Agents.

            B. To the fullest extent permitted by law, neither Tenant nor
      Tenant's Agents, officers, directors, shareholders, partners, members or
      principals (disclosed or undisclosed) shall be liable to Landlord or
      Landlord's agents, employees, contractors, invitees or licensees or any
      other occupant of the Premises for any injury to Landlord or to any other
      person or for any damage to, or theft or other loss of, any of Landlord's
      property or of the property of any other person, except to the extent such
      damage or theft results from the negligence or willful misconduct of
      Tenant or Tenant's Agents. Landlord waives, to the full extent permitted
      by law, any claim for consequential damages in connection therewith and
      Tenant and Tenant's Agents shall not be liable, to the extent of
      Landlord's insurance coverage, for any loss or damage to any person or
      property even if due to the negligence of Tenant or Tenant's Agents.

            C. To the fullest extent permitted by law but except as otherwise
      expressly provided herein, Tenant hereby indemnifies and agrees to hold
      Landlord, its agents, officers, directors, shareholders, partners, members
      or principals (disclosed or undisclosed) harmless from and against any and
      all loss, cost, liability, claim, damage, fine, penalty and expense
      (individually and collectively, the "Claim") including attorneys' fees and
      disbursements in connection with or arising from or alleged to arise from
      (a) any default by Tenant in the performance or observance of any of the
      terms of this Lease, or (b) the manner of use of the Premises by Tenant or
      any person claiming under Tenant, or (c) the negligence or wilful
      misconduct of Tenant or Tenant's agents, employees, contractors or
      invitees. The aforementioned indemnity and hold harmless shall apply
      whether the Claim is between Landlord and Tenant or a third party. Subject
      to the provisions of Paragraph 48E below, Tenant shall pay to Landlord as
      Additional Rent, within thirty (30) days following rendition by Landlord
      to Tenant of bills or statements therefor, sums equal to all losses,
      costs, liabilities, claims, damages, fines, penalties and expenses
      referred to in this Section.

                                       8
<PAGE>

            D. To the fullest extent permitted by law but except as otherwise
      expressly provided herein, Landlord agrees to indemnify and save Tenant
      and its agents, employees and servants harmless from all claims (including
      reasonable costs and expenses of defending against such claims) arising or
      alleged to arise from (i) any default by Landlord in the performance or
      observance of any of the terms of this Lease or (ii) the negligence or
      willful misconduct of Landlord or Landlord's agents, employees,
      contractors or invitees, occurring during the Term of this Lease, in or
      adjacent to the common areas of the Building (except to the extent any
      such injury, death or property damage results from the negligence or
      willful misconduct of Tenant).

            E. In connection with the foregoing indemnities, (i) the indemnitor
      may employ counsel of its choice (subject to the indemnitee's consent,
      which consent shall not be unreasonably withheld or delayed, it being
      understood that indemnitor's insurance counsel is deemed approved), (ii)
      the indemnitee shall promptly notify the indemnitor of any claim covered
      by the indemnity, (iii) the indemnitee shall cooperate with the indemnitor
      in the defense of such claim, and (iv) the indemnitee shall not settle, or
      confess judgment to, such claim without the prior written consent of the
      indemnitor, which consent shall not be unreasonably withheld or delayed.

            F. Notwithstanding anything to the contrary contained herein, Tenant
      shall look only to Landlord's estate in the Real Property (or the proceeds
      thereof, including, but not limited to, sale, financing, refinancing and
      insurance proceeds and condemnation awards) for the satisfaction of
      Tenant's remedies for the collection of a judgment (or other judicial
      process) requiring the payment of money by Landlord in the event of any
      default by Landlord hereunder, and no other property or assets of Landlord
      or its agents, directors, officers, shareholders, partners, members or
      principals (disclosed or undisclosed) shall be subject to levy, execution
      or other enforcement procedure for the satisfaction of Tenant's remedies
      with respect to this Lease, the relationship of Landlord and Tenant
      hereunder or under law or Tenant's use or occupancy of the Premises or any
      other liability of Landlord to Tenant.

            G. The provisions of this Article shall survive the expiration or
      sooner termination of this Lease."

            12. Insurance. As of the date hereof, Article 49 of the Original
Lease shall be deemed deleted in its entirety and shall be replaced with the
following:

                  "A. Tenant, at its expense, shall maintain at all times during
      the Term (a) "all risk" property insurance covering Tenant's property and
      improvements and betterments to a limit of not less than the full
      replacement cost thereof, and (b) comprehensive general liability
      insurance covering bodily injury, personal injury and property damage
      liability, and shall include contractual liability that covers the
      indemnifications and hold harmless contained in this Lease, and products
      and completed operations liability with such limits as may reasonably be
      requested by Landlord from time to time, but not less than $25,000,000 for
      any one occurrence. The policy or policies evidencing such insurance
      referred to in clause (b) of the preceding sentence shall include Landlord
      and such parties as Landlord shall designate as an additional insured. The
      limits of such insurance shall not limit the liability of Tenant. All
      policies required to be maintained pursuant to the provisions of this
      Lease shall be issued by an insurance company or companies having a Best's
      rating (or any successor publication of comparable standing) of at least
      A-/VII and authorized to do business in the State of New York. All
      policies required to be maintained pursuant to the provisions of this
      Lease shall have a written undertaking from the insurer to notify all
      insureds thereunder at least thirty (30) days prior to cancellation
      thereof. Upon the execution of this Lease, Tenant shall deliver to
      Landlord and any additional insureds certificates of insurance evidencing
      any

                                       9
<PAGE>

      such policy. Such certificate shall indicate that Tenant's insurance
      policy includes contractual liability insurance. Tenant shall procure,
      maintain and place such insurance and pay all premiums and charges
      therefor and upon failure to do so Landlord may, but shall not be
      obligated to, procure, maintain and place such insurance or make such
      payments, and in such event the Tenant agrees to pay the amount thereof,
      plus interest at the annual rate ("Interest Rate") equal to two (2)
      percentage points above the rate then most recently announced by Citibank,
      N.A., New York, New York, or its successor, as its corporate base lending
      rate, which rate may change from time to time, but in no event shall such
      Interest Rate exceed the maximum rate permitted by law, to Landlord on
      demand and said sum shall be in each instance collectible as Additional
      Rent on the first day of the month following the date of payment by
      Landlord. During such times as Tenant shall be performing any Alteration,
      Tenant shall carry or cause to be carried (and shall provide Landlord with
      evidence thereof) (i) worker's compensation insurance covering all persons
      employed in connection with the Alteration in statutory limits, (ii)
      builder's risk insurance, completed value non-reporting form, covering all
      physical loss, in an amount reasonably satisfactory to Landlord or
      equivalent insurance as part of the insurance required pursuant to Section
      49A(a) hereof, and (iii) such other insurance, and in such amounts as
      Landlord deems reasonably necessary to protect Landlord's interest in the
      Premises and the Building from any act or omission of Tenant's contractors
      and subcontractors. Tenant's failure to provide and keep in force the
      aforementioned insurance shall be regarded as a material default hereunder
      entitling Landlord to exercise any or all of the remedies provided in this
      Lease in the event of Tenant's default.

                  B. Subject to Paragraph 6E hereof, Tenant shall refer all
      contractors, contractors' representatives, and installers or service
      representatives rendering any service for Tenant to Landlord for approval
      before performance of their services. No work is to be provided by such
      contractors, their representatives, installers or service representatives
      without such approval. If contractors, contractor's representatives,
      installers or service representatives are introduced to the Building and
      approved, such approval shall be subject to receipt of certificates of
      insurance evidencing worker's compensation insurance, and comprehensive
      general liability insurance in amounts of no less than $2,000,000.00 or
      otherwise acceptable to Landlord. Such certificates are to contain
      provisions that obligate the insurer to notify Landlord 10 days in
      advance, in the event of cancellation, or material change of the coverage.
      The contractors liability insurance is to contain a general aggregate
      limit on a per project basis and shall include Landlord and other named
      parties as additional insureds.

                  C. Each party agrees to have included in each of its insurance
      policies a waiver of the insurer's right of subrogation against the other
      party during the term of this Lease. If such waiver, agreement or
      permission shall not be, or shall cease to be, obtainable from either
      party's then current insurance company, the insured party shall so notify
      the other party promptly after learning thereof, and shall use its
      commercially reasonable efforts to obtain the same from another insurance
      company described herein. Nothing contained in this Section shall be
      deemed to relieve either party of any duty imposed elsewhere in this Lease
      to repair, restore or rebuild."

            13. Notices. As of the date hereof, Article 52 of the Original Lease
shall be deemed deleted in its entirety and shall be replaced with the
following:

                  "A. Every notice (other than rent bills and Landlord's
      Statements, which may be given by ordinary United States mail or by hand
      delivery), demand, consent, approval, request or other communication
      (collectively, "notices") which may be or is required to be given under
      this Lease or by law shall be in writing and shall be sent either (a) by
      United States certified or registered mail, postage prepaid, return
      receipt requested, or (b) by nationally

                                       10
<PAGE>

      recognized overnight courier service (which shall include, without
      limitation, Express Mail) or hand delivery (against confirmation of
      delivery or rejection of delivery), and shall be addressed:

                  B.    if to Landlord, to:

                           Lexington Building Co. LLC
                           c/o Winter Management Corp.
                           730 Fifth Avenue
                           New York, New York 10019
                           Attention: Managing Member

                  C.    if to Tenant, to:

                           Playboy Enterprises International, Inc.
                           680 North Lake Shore Drive
                           Chicago, Illinois 60611
                           Attention: General Counsel

                           With a copy to:

                           Playboy Enterprises International, Inc.
                           730 Fifth Avenue
                           New York, New York  10019
                           Attention: Director of Administrative Services

      and the same shall be deemed delivered (a) five (5) business days after
      deposited in the United States mail, (b) the day following delivery to an
      overnight courier or (c) when delivered by hand. A copy of any notice to
      Landlord shall also be delivered to Landlord's counsel, Patterson,
      Belknap, Webb & Tyler, LLP, 1133 Avenue of the Americas, New York, New
      York 10036, Attention: Kenneth L. Sankin, Esq. A copy of any default or
      termination notice to Tenant shall also be sent to Tenant's counsel,
      Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New York,
      New York 10004, Attention: Jonathan L. Mechanic, Esq. A notice given by
      counsel for Landlord or Tenant shall be deemed a valid notice if addressed
      and sent in accordance with the provisions of this Article. Either party
      may designate, by similar written notice to the other party, any other
      address for such purposes. Each of the parties hereto waives personal or
      any other service other than as provided for in this Article.
      Notwithstanding the foregoing, either party hereto may give the other
      party telegraphic notice of the need of emergency repairs. Notices
      requesting after hours services pursuant to Article 39 may be given by
      delivery to the Building Manager or any other person in the Building
      designated by Landlord to receive such notices."

            14. Security.

                  A. Tenant acknowledges that Landlord currently is holding the
sum of $124,621.26 as security under the Lease. Tenant shall, simultaneously
with the execution and delivery of this Agreement, deliver to Landlord the
additional sum of $775,378.74, so that from and after the date hereof and for
the remainder of the term of the Lease, as hereby extended, Landlord shall hold
the sum of $900,000.00 (either in the form of cash or a Letter of Credit that
meets all of the requirements of Section 57K of the Original Lease) as security
pursuant to Article 33 and Section 57K of the Original Lease. Landlord agrees
that it will accept a Letter of Credit issued by Bank of America that may be
presented in New York City for payment and otherwise meets the requirements of
Section 57K of the Original Lease.

                  B. As of the date hereof, Section 57K(b) of the Original Lease
shall be deemed deleted in its entirety and shall be replaced with the
following:

                                       11
<PAGE>

                  "Provided that Tenant shall not then be in default beyond any
      applicable grace period under any of its obligations to pay Fixed Rent or
      Additional Rent (under Articles 38 and 41 of the Lease) then, promptly on
      (i) December 1, 2008 (the "First Reduction Date"), Tenant shall have the
      right to request a reduction in the security deposited with Landlord
      hereunder to $600,000.00, or if Tenant shall have delivered a Letter of
      Credit to Landlord, then, on such First Reduction Date, Tenant shall be
      permitted to deliver a new Letter of Credit to Landlord in lieu of the
      Letter of Credit then being held by Landlord in an amount equal to
      $600,000.00, and (ii) December 1, 2012 (the "Second Reduction Date"),
      Tenant shall have the right to request a further reduction in the security
      deposited with Landlord hereunder to $300,000.00, or if Tenant shall have
      delivered a Letter of Credit to Landlord, then, on such Second Reduction
      Date, Tenant shall be permitted to deliver a new Letter of Credit to
      Landlord in lieu of the Letter of Credit then being held by Landlord in an
      amount equal to $300,000.00. Landlord shall simultaneously with such
      delivery of a new Letter of Credit return the prior Letter of Credit to
      Tenant. Alternatively, in lieu of a new Letter of Credit, Tenant may
      deliver an amendment to the existing Letter of Credit reflecting the
      appropriate reduction in the security, which amendment shall be in form
      and substance reasonably satisfactory to Landlord. Upon the request of
      Tenant, Landlord shall cooperate with Tenant in connection with obtaining
      such amendment to the existing Letter of Credit from the issuer of the
      same, including providing any required certificate to the issuer of the
      Letter of Credit in order to effectuate such reduction within ten (10)
      days of the written request of Tenant. In no event shall the security
      deposited with Landlord hereunder be reduced below an amount equal to
      $300,000.00. Landlord's and Tenant's rights with respect to the reduced
      security deposit or each Letter of Credit to be provided in accordance
      with this Section, shall be the same as if such reduced security deposit
      or each such Letter of Credit had in each instance been provided for as
      the original security deposit or Letter of Credit hereunder."

                  C. The term "Letter of Credit," as used in the Lease, shall
mean a letter of credit that meets all of the requirements of Section 57K of the
Original Lease.

            15. Expansion Options.

                  A. Tenant shall have the following options to be exercised by
an Election Notice as hereinafter provided, to include in the Premises under the
Lease for the balance of the Term (as extended by the Extended Term), the
following spaces in the Building (collectively, the "Option Space") upon and
subject to the terms and conditions of this Article:

                        (i) Tenant shall have the option (the "Suite 500
Option") to lease from Landlord those certain premises located on the fifth
(5th) floor of the Building containing 10,131 rentable square feet of space more
particularly described on Exhibit B attached hereto ("Suite 500") on the terms
hereinafter set forth by delivering to Landlord an Election Notice with respect
thereto at any time on or prior to June 30, 2006, time being of the essence,
subject to Section 15C below.

                        (ii) Tenant shall have the option (the "Suite 502
Option") to lease from Landlord those certain premises located on the fifth
(5th) floor of the Building containing 11,873 rentable square feet of space more
particularly described on Exhibit C attached hereto ("Suite 502") on the terms
hereinafter set forth by delivering to Landlord an Election Notice with respect
thereto at any time on or prior to May 31, 2009, time being of the essence,
subject to Section 15C below.

                        (iii) Tenant shall have the option (the "Suite 602
Option") to lease from Landlord those certain premises located on the sixth
(6th) floor of the Building containing 4,592 rentable square feet of space more
particularly described on Exhibit D attached hereto ("Suite 602") on the terms
hereinafter set forth by delivering to Landlord an Election Notice with respect
thereto at any time on or prior to February 1, 2006, time being of the essence,
subject to Section 15C below.

                                       12
<PAGE>

                        (iv) Tenant shall have the option (the "Suite 604
Option") to lease from Landlord those certain premises located on the sixth
(6th) floor of the Building containing 6,056 rentable square feet of space more
particularly described on Exhibit E attached hereto ("Suite 604") on the terms
hereinafter set forth by delivering to Landlord an Election Notice with respect
thereto at any time on or prior to October 31, 2006, time being of the essence,
subject to Section 15C below.

                        (v) Tenant shall have the option (the "Suite 600
Option") to lease from Landlord those certain premises located on the sixth
(6th) floor of the Building containing 5,389 rentable square feet of space more
particularly described on Exhibit F attached hereto ("Suite 600") on the terms
hereinafter set forth by delivering to Landlord an Election Notice with respect
thereto at any time on or prior to June 30, 2011, time being of the essence,
subject to Section 15C below.

                        (vi) Tenant shall have the option (the "Suite 603
Option") to lease from Landlord those certain premises located on the sixth
(6th) floor of the Building containing 3,623 rentable square feet of space more
particularly described on Exhibit G attached hereto ("Suite 603") on the terms
hereinafter set forth by delivering to Landlord an Election Notice with respect
thereto at any time on or prior to July 31, 2008, time being of the essence,
subject to Section 15C below.

                        (vii) Tenant acknowledges that those certain premises
located on the sixth (6th) floor of the Building containing 12,250 rentable
square feet of space more particularly described on Exhibit H attached hereto
("Suite 605") currently are vacant. Following the leasing by Landlord of Suite
605 to a third party and Suite 605 again becoming available for lease if such
third party or the then tenant under such lease (the "Third Party Lease") elects
not to extend its lease, whether pursuant to the Third Party Lease or otherwise,
Tenant shall have the option (the "Suite 605 Option") to lease Suite 605 from
Landlord on the terms hereinafter set forth by delivering to Landlord an
Election Notice with respect thereto. The Suite 605 Option shall be exercised by
Tenant within ninety (90) days, time being of the essence, of delivery of
Landlord's notice that Suite 605 is available for leasing and the estimated
delivery date for Suite 605.

Each Election Notice delivered by Tenant must designate the Option Space that
Tenant is electing to lease by the delivery of such Election Notice. Tenant's
delivery of an Election Notice shall be irrevocable. Landlord and Tenant hereby
acknowledge and agree that the rentable square footages with respect to each of
the Option Spaces as set forth in Section 15(i)-(vii) above (a) are not subject
to change after the date hereof, and (b) shall be used to calculate the annual
Fixed Rent of the applicable Option Space by Landlord upon its receipt of
Tenant's Election Notice with respect to such Option Space.

                  B. Tenant and Landlord hereby acknowledge that the estimated
delivery dates (the "Estimated Delivery Dates") with respect to each Option
Space are set forth below (assuming that Tenant were to timely deliver an
Election Notice with respect thereto):

                Space                         Estimated Delivery Date
                ----------              -----------------------------------

                Suite 500               January 1, 2008

                Suite 502               December 1, 2010

                Suite 602               February 1, 2007

                Suite 604               May 1, 2008

                Suite 600               January 1, 2013

                                       13
<PAGE>

                Space                         Estimated Delivery Date
                ----------              -----------------------------------

                Suite 603               February 1, 2010

                Suite 605               Day following the expiration
                                        of the Third Party Lease, as
                                        such lease may be extended
                                        whether pursuant to the Third
                                        Party Lease or
                                        otherwise.

                  C. If Landlord terminates (or reasonably expects to terminate,
whether by voluntary agreement or otherwise) a lease with respect to an Option
Space on account of a default by the tenant thereunder (or if Landlord
reasonably expects a default by the tenant to occur in the future), Landlord may
elect in its sole discretion to accelerate the Estimated Delivery Dates with
respect to any Option Space (whether or not Tenant previously shall have
delivered an Election Notice to lease such particular Option Space). If Landlord
elects to accelerate any such Estimated Delivery Date, Landlord shall deliver
notice to Tenant with respect thereto, which notice shall set forth the new
Estimated Delivery Date, and if Tenant shall not previously have delivered an
Election Notice to lease such particular Option Space, Tenant shall have ninety
(90) days from the delivery of such notice to deliver an Election Notice to
Landlord with respect to such Option Space, time being of the essence. If Tenant
timely delivers an Election Notice with respect thereto, Tenant shall lease such
Option Space on all of the terms and conditions contained in this Article,
except that possession of such Option Space shall be delivered to Tenant as soon
as such space is vacant and available for delivery to Tenant (but no sooner than
thirty (30) days after Tenant's delivery of the Election Notice). If Landlord
shall so accelerate an Estimated Delivery Date for any Option Space and if
Tenant previously shall have delivered an Election Notice to lease such Option
Space, then upon Landlord's delivery of notice of such new Estimated Delivery
Date, such accelerated date automatically shall be the Estimated Delivery Date,
provided that such accelerated date may not be earlier than thirty (30) days
after Landlord's delivery of notice of such new Estimated Delivery Date. If any
date is accelerated pursuant to the foregoing, all other provisions of this
Article will otherwise be fully applicable with respect to any such Option
Space.

                  D. In the event Tenant shall not elect to exercise the option
provided in this Article 15 with respect to any such Option Space, Tenant shall
have no further rights under this Article with respect to such Option Space, and
Landlord shall be free to lease such Option Space to any other party or parties,
except that if Landlord shall have exercised its right to accelerate an
Estimated Delivery Date and Tenant does not deliver an Election Notice, then
Tenant shall have the option ("Second Option") to lease such Option Space when
it becomes "available for leasing"; it being understood that that an Option
Space will not be "available for leasing" if the tenant of such Option Space
elects to extend its lease, whether or not pursuant to the terms of its lease.
Tenant shall have the right to exercise the Second Option with respect to such
Option Space, provided Tenant exercises such Second Option within ninety (90)
days, time being of the essence, of delivery of Landlord's notice that such
Option Space is available for leasing and the new Estimated Delivery Date. If
Tenant does not exercise its Second Option pursuant to the preceding sentence
with respect to any such Option Space, Tenant shall have no further rights under
this Article with respect to such Option Space and Landlord shall be free to
lease such Option Space to any other party or parties.

                  E. The terms and conditions upon which any Option Space shall
be leased by Tenant shall be as follows:

                        (i) Such Option Space shall be added to and form a part
of the Premises with the same force and effect as if originally demised under
the Lease, and the terms "Premises," "Demised Premises," "premises," or "demised
premises" as used in the Lease shall include such Option Space. The term of the
Lease with respect to such Option Space shall commence on the date (the "Option
Space Commencement Date") on which the Delivery Conditions (as defined below)
with respect to such Option Space are satisfied and possession of

                                       14
<PAGE>

such Option Space is delivered to Tenant and shall be coterminus with the Term
(as the same may have been or may be further extended). "Delivery Conditions"
shall mean (i) that the Option Space in question is vacant and broom clean, with
all prior tenants' personal property removed therefrom, but otherwise "as is" on
the date on which possession of the Option Space in question is delivered to
Tenant and (ii) Landlord shall deliver an ACP-5 certificate for the applicable
Option Space (which ACP-5 certificate shall indicate that such space is a
"no-asbestos project") within fifteen (15) days of the Option Space Commencement
Date and (iii) Landlord shall provide all legally required points for connection
to the Building's Class "E" fire alarm system to the applicable Option Space as
reasonably requested by Tenant.

                        (ii) The annual Fixed Rent for the Option Space in
question shall be deemed to be 100% of the FMV of such Option Space. The FMV for
any Option Space shall be determined in accordance with Section 56H of the
Original Lease in the same manner that applied to Non-Contiguous Additional
Space leased during the Initial Term, except that:

                              (a) The parties acknowledge that Suite 500 will be
leased to Tenant with the current build-out intact. Accordingly, in determining
FMV, the appraisers will be instructed to take into account the fit-out of the
existing installation and that such fit-out will not require Tenant to perform
any work therein to prepare the same for its occupancy, and the fact that
Landlord shall not provide a work allowance or contribution with respect thereto
shall not be taken into account in determining the FMV for Suite 500 and the FMV
shall not be reduced as a result of Landlord not so providing a work allowance
or contribution;

                              (b) any brokerage commissions payable with respect
to the Option Space shall be taken into account in determining FMV;

                              (c) With respect to any Option Space, the term
"Additional Space Commencement Date" shall mean the Option Space Commencement
Date; and

                              (d) The terms and conditions set forth in this
Article 15 also shall be taken into account in determining FMV for any Option
Space, and, as to any Option Space, in the event of any inconsistency between
the terms and conditions of Section 56H of the Original Lease and this Article
15, this Article 15 shall control.

                        (iii) The Additional Rent payable by Tenant for such
Option Space shall be payable without any change of the provisions of Article 38
of the Original Lease, except that (x) the term "Tenant's Operating
Proportionate Share" shall be 2.67% with respect to Suite 500, 3.13% with
respect to Suite 502, 1.21% with respect to Suite 602, 1.60% with respect to
Suite 604, 1.42% with respect to Suite 600, 0.96% with respect to Suite 603, and
3.23% with respect to Suite 605, and (b) the term "Tenant's Tax Proportionate
Share" shall be 2.26% with respect to Suite 500, 2.65% with respect to Suite
502, 1.03% with respect to Suite 602, 1.35% with respect to Suite 604, 1.20%
with respect to Suite 600, 0.81% with respect to Suite 603, and 2.74% with
respect to Suite 605 and (y) Landlord's Basic Tax Liability, Tax Year and
Landlord's Base Operating Year shall be determined as provided in Section 56H of
the Original Lease.

                        (iv) Electrical energy shall be furnished to the Option
Space on a submetered basis in the manner provided to the Premises in accordance
with Article 5 hereinabove.

                  F. Tenant's rights under this Article 15 are subject to
Section 56G of the Original Lease, except that (i) with respect to any Option
Space, the term "Additional Space Commencement Date," as used in Sections 56G(d)
and (e), shall mean the Estimated Delivery Date with respect to such Option
Space, and (ii) that if Landlord shall have exercised its right to accelerate an
Estimated Delivery Date and Tenant does not deliver an Election Notice, then
Section 56G(e) will not be applicable with respect to such Option Space.

                                       15
<PAGE>

                  G. The parties hereto acknowledge that, notwithstanding
anything herein to the contrary, Tenant's rights set forth in this Article (i)
with respect to Suites 603 and 605, as well as Suite 600 (unless, as to Suite
600 only, Tenant also shall have leased Suite 602 pursuant to this Article 15,
in which case this Section 15G(i) shall not apply to Suite 600), shall be
subject and subordinate in all respects to all existing and future extension
and/or renewal rights and options with respect to such Option Space held by any
existing tenants thereof (and any assignee(s) of their interests in their
respective leases) (whether or not such extensions and/or renewal rights and
options are contained in such leases or otherwise), and (ii) Tenant's rights
with respect to Suite 500, Suite 502, Suite 600 (but only if Tenant shall have
leased Suite 602), Suite 602 and Suite 604 shall be superior to all existing and
future extension and/or renewal rights and options with respect to such Option
Space held by any existing or future tenants or their assignees (it being
understood that Tenant's rights described in this Section 15G(ii) are subject to
the provisions of Section 15C and 15D above).

                  H. Except as expressly set forth in this Article 15, Article
56 (other than Sections 56H(a) and 56H(b)) of the Original Lease shall not apply
to the Option Space.

            16. Renewal Option.

                  A. Provided that the named Tenant (i.e., Playboy Enterprises
International, Inc.) and/or a successor corporation or a related corporation of
the named Tenant shall (i) be the tenant under the Lease and be in actual
physical occupancy of at least the entire 3rd Floor Space and the entire 4th
Floor Space, and (ii) shall not be in default in its obligation to pay Fixed
Rent or Additional Rent beyond the expiration of any applicable notice and cure
period at the time of the exercise of this option or at the time of the
commencement of the Renewal Term (as hereinafter defined) (subject to the cure
rights set forth in Section 56G(b) of the Original Lease), Tenant shall have the
right (the "Renewal Option") to renew the term of the Lease with respect to all
of the Premises then leased by Tenant for one additional five (5) year term
commencing on the day after the Extended Term Expiration Date and ending on
August 31, 2024 (the "Renewal Term"), which date shall thereupon be and become
the Expiration Date of the Lease, as amended by this Agreement.

                  Except as specifically set forth herein, Tenant's exercise of
the Renewal Option shall be subject to the provisions of Section 56F of the
Original Lease, except that:

                        (a) the phrase beginning with "Tenant shall have the
right" and ending with "(including, without limitation, the provisions of
Articles 38 and 41), except that:" contained in Section 56F(a) of the Original
Lease shall be deemed deleted;

                        (b) all references to the phrase "then Term or Renewal
Term, as the case may be," contained in clause (x) of Section 56F(a)(i) of the
Original Lease shall be deemed to mean the Extended Term;

                        (c) the phrase "except as provided in Subparagraph (b)
below" contained in Section 56F(a)(ii) of the Original Lease shall be deemed to
be deleted;

                        (d) the phrase "Second Renewal Term" contained in
Section 56F(a)(iii) of the Original Lease shall be deemed to mean the Renewal
Term;

                        (e) the phrase "one (1) year" in the fourth to last
sentence of Section 56F(a) of the Original Lease shall be deemed deleted and the
phrase "fifteen (15) months" shall be substituted therefor;

                        (f) both the penultimate sentence, and the last
sentence, of Section 56F(a) of the Original Lease shall be deemed deleted; and

                        (g) Section 56F(b) of the Original Lease shall be deemed
deleted.

                                       16
<PAGE>

                  C. Subsections 56G(a), (b) (c) and (f) of the Original Lease
shall apply to Tenant's rights under this Article the extent that the same would
have applied with respect to the Renewal Terms.

                  D. The FMV for the Renewal Term shall be determined in
accordance with those provisions of Section 56H of the Original Lease that were
applicable to the Renewal Terms, except that:

                        (a) the parenthetical "(including only applicable
Non-Contiguous Additional Space)" set forth in Section 56H(a) shall not apply;

                        (b) the last two sentences of Section 56H(a) shall not
apply;

                        (c) the "Rent Appraisal Date" shall mean the
commencement date of the Renewal Term; and

                        (d) any brokerage commissions actually payable with
respect to the Renewal Term shall be taken into account in determining FMV.

                  E. Landlord shall not be obligated to perform any work in the
Premises to prepare the same for Tenant's occupancy during the Renewal Term.

                  F. This Article 16 supersedes Section 56F of the Original
Lease with respect to Tenant's future renewal rights (i.e., Tenant shall have no
right to renew the term of the Lease for the Renewal Terms (as defined in such
Section 56F).

            17. Ratification. Except as modified hereby, the Lease shall remain
in full force and effect, and as modified hereby, the Lease is ratified and
confirmed in all respects.

            18. Certification.

                  A. Tenant hereby certifies that (a) the Lease is in full force
and effect and has not been further modified or amended, (b) there exists no
event of default which remains uncured as of the date hereof, and (c) Tenant has
made no demand against Landlord and has no present right to make such demand
with respect to charges, liens, defenses, counterclaims, offsets, claims, or
credits against the payment of Fixed Rent or Additional Rent or the performance
of Tenant's obligations under the Lease.

                  B. Landlord hereby certifies that (a) the Lease is in full
force and effect and has not been further modified or amended, (b) there exists
no event of default which remains uncured as of the date hereof, and (c)
Landlord has made no demand against Tenant and has no present right to make such
demand with respect to the payment of Fixed Rent or Additional Rent or the
performance of Tenant's obligations under the Lease.

            19. Memorandum of Lease. Landlord and Tenant agree that the
Memorandum of Lease required under Paragraph 60.01 of the Lease shall be amended
to reflect the modifications to the Lease provided for herein and such amended
Memorandum shall be recorded at Tenant's request at Tenant's sole cost and
expense.

            20. Subordination. The parties acknowledge and agree that Landlord
shall be obligated to deliver to Tenant a "subordination, non-disturbance and
attornment agreement" from the holder of any current or future Superior
Instrument, which subordination, non-disturbance and attornment agreement must
meet the requirements set forth in Section 47A of the Original Lease.

            21. No Waiver. This Agreement may not be orally changed or
terminated, nor any of its provisions waived, except by an agreement in writing
signed by the party against whom enforcement of any changes, termination or
waiver is sought.

            22. Successors and Assigns. This Agreement shall be binding upon,
and inure to the benefit of the parties hereto, their respective legal
representatives, successors and assigns.

                                       17
<PAGE>

            23. Not Binding. Tenant acknowledges that this Agreement shall not
be binding on Landlord or Tenant until Landlord and Tenant shall each have
executed this Agreement and a counterpart thereof shall have been delivered to
the other.

            24. Authority. Tenant and Landlord each hereby represents and
warrants that it has full right, power and authority to enter into this
Agreement and that the person executing this Agreement on behalf of Tenant and
Landlord, respectively, is duly authorized to do so.

            25. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which when
taken together shall constitute one and the same instrument.

            26. Guaranty. As a material inducement to Landlord to enter into
this Agreement and as a condition to the effectiveness hereof, Tenant shall
cause to be delivered to Landlord a guaranty of Tenant's obligations under the
Lease (as amended hereby), executed by Playboy Enterprises, Inc. (the
"Guarantor"), in form and substance satisfactory to Landlord. Tenant
acknowledges and agrees that a default by the Guarantor under the guaranty shall
be deemed a default under the Lease, as amended hereby and as the same may
hereafter be amended from time to time.

                                       18
<PAGE>

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

                                        LEXINGTON BUILDING CO. LLC

                                        By: /s/ Benjamin J. Winter
                                           -------------------------------------
                                            Title: Managing Member

                                        By: /s/ Bernard Spitzer
                                           -------------------------------------
                                            Title: Managing Member

                                        PLAYBOY ENTERPRISES INTERNATIONAL, INC.

                                        By: /s/ Howard Shapiro
                                           -------------------------------------
                                           Name: Howard Shapiro
                                           Title: Ex. V.P.

                                       19

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}]]