Playboy, Spice Modify Acquisition Terms

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Chicago -- Playboy Enterprises Inc. and Spice Entertainment
Companies announced last week a modification of their agreement last February.

Under the terms of the new agreement, Spice shareholders
will receive the sum of $3.60 in cash and 0.1371 shares of PEI Class B Stock, subject to a
collar designed to provide a minimum value of $2.20 or a maximum value of $2.88 per Spice
share. The initial deal called for Spice shareholders to receive 0.1 Playboy shares at a
minimum value of $2.11 or a maximum value of $2.69 per share.

The total transaction value, including the assumption of
debt, is expected to be approximately $100 million, plus the value of the assets to be
retained by Spice shareholders. Those assets include ownership of Spice's digital
operations center for video and Internet broadcasts; its option to acquire outstanding
stock or assets of Emerald Media Inc., a leading provider of adult entertainment in the
C-Band market; and certain rights to a library of adult films.

Closing of the transaction is expected to occur during the
end of the second or beginning of the third quarter, Playboy said.

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