Private Media Group (PRVT)

12. Related party transactions

The Company has short-term loans receivable from an entity controlled by the Company’s principal shareholder of EUR 6.7 million and EUR 7.0 million at December 31, 2007 and 2008 respectively. The loans bear interest at a rate of EURIBOR+1% payable annually. In connection with the acquisition of Game Link LLC and eLine LLC by the Company on January 20, 2009, in order to induce the sellers to consummate the acquisition, the borrower entered into an agreement with the Company and the sellers with regard to the partial repayment of the loan. Under the agreement, in each of the fiscal years ended December 31, 2009, 2010, and 2011, the borrower is required to repay not less than EUR one million, either in cash or in Private common stock valued at its fair market value as determined by the disinterested directors of Private, to be applied first to accrued interest and then to principal of the loan.

An affiliate of the Company’s principal shareholder, has guaranteed a 7% Note due to Consipio, see Note 9. In addition, the Note is fully collateralized by 4,950,000 shares of Private Media Group, Inc. Common Stock pursuant to the same guaranty agreement. As of December 31, 2008, the outstanding balance on the Note was $2,5 million (EUR 1.8 million).

In December 2007 the Company’s principal shareholder and affiliates of the Company’s principal shareholder agreed to guarantee a bank line of credit agreement of Euro 1.0 million entered into by one of the Company’s European subsidiaries. As of December 31, 2008, the credit facility was fully utilized.

12.
Related party transactions

The Company has short-term loans receivable from an entity controlled by the Company’s principal
shareholder of EUR 6.7 million and EUR 7.0 million at December 31, 2007 and 2008 respectively. The loans bear interest at a rate of EURIBOR+1% payable annually. In connection with the acquisition of Game Link LLC and eLine LLC by the
Company on January 20, 2009, in order to induce the sellers to consummate the acquisition, the borrower entered into an agreement with the Company and the sellers with regard to the partial repayment of the loan. Under the agreement, in each of
the fiscal years ended December 31, 2009, 2010, and 2011, the borrower is required to repay not less than EUR one million, either in cash or in Private common stock valued at its fair market value as determined by the disinterested directors of
Private, to be applied first to accrued interest and then to principal of the loan.

An affiliate of the Company’s principal
shareholder, has guaranteed a 7% Note due to Consipio, see Note 9. In addition, the Note is fully collateralized by 4,950,000 shares of Private Media Group, Inc. Common Stock pursuant to the same guaranty agreement. As of December 31, 2008, the
outstanding balance on the Note was $2,5 million (EUR 1.8 million).

In December 2007 the Company’s principal shareholder and
affiliates of the Company’s principal shareholder agreed to guarantee a bank line of credit agreement of Euro 1.0 million entered into by one of the Company’s European subsidiaries. As of December 31, 2008, the credit facility
was fully utilized.

11. Related party transactions

The Company has short-term loans receivable from an entity controlled by the Company’s principal shareholder of EUR 6.4 million and EUR 6.7 million at December 31, 2006 and 2007 respectively. The loans bear interest at a rate of EURIBOR+1% payable annually.

In May 2003 Euro 1.65 million of a related party note payable was re-financed by an institutional lender at the same interest rate as on the note payable, EURIBOR + 1%. The loan is repayable in equal monthly installments over a four year period starting June 29, 2004. The loan is guaranteed by the Company’s principal shareholder and affiliates of the Company’s principal shareholder.

In December 2007 the Company’s principal shareholder and affiliates of the Company’s principal shareholder agreed to guarantee a bank line of credit agreement of Euro 1.0 million entered into by one of the Company’s European subsidiaries.

11. Related party transactions

The Company has short-term loans receivable from an entity controlled by the Company’s principal shareholder of EUR 5.9 million and EUR 6.4 million at December 31, 2005 and 2006 respectively. The loans bear interest at a rate of EURIBOR+1% payable annually.

In May 2003 Euro 1.65 million of a related party note payable was re-financed by an institutional lender at the same interest rate as on the note payable, EURIBOR + 1%. The loan is repayable in equal monthly installments over a four year period starting June 29, 2004. The loan is guaranteed by the Company’s principal shareholder and affiliates of the Company’s principal shareholder.

15. Related party transactions

In December 2001 we borrowed $4.0 million from Commerzbank AG pursuant to a Note originally due December 20, 2002 in order to expand our product portfolio. Subsequently the maturity of the Note was extended to March 2003. The Note bears interest at an annual rate of 7%, payable quarterly, with the entire principal amount and accrued interest due on maturity. The Note is prepayable in full upon the sale of equity by us. Upon the Note becoming prepayable, we are required to repay the entire principal amount of the Note together with the greater of (1) accrued interest payable on the Note or (2) a prepayment premium equal to $200,000. The Note is secured by a guaranty from Slingsby Enterprises and a pledge by Slingsby Enterprises of 5,600,000 shares of our Series A Preferred Stock. The lender and Slingsby Enterprises have also agreed that if the Note remains unpaid at maturity, Commerzbank may elect to exchange the Note for Series A Preferred Stock or common stock owned by Slingsby Enterprises to the value of $5.0 million. In April 2003 the Note was acquired by Consipio Holding b.v. from Commerzbank AG, and Consipio and Private reached an agreement-in-principle with Consipio to extend the maturity of the Note for five years, with interest on the Note being increased to 9.9% per annum. However, Consipio and Private have been unable to reach final agreement on other terms and conditions relating to the restructured Note. Accordingly, in December 2003 Consipio notified Private and Slingsby Enterprises that Private was in default under the Note, and demanded immediate payment of the outstanding principal under the Note. The Company continues to make all regularly scheduled interest payments on the Note and believes that it has valid defenses to the demand for immediate repayment of the Note, should Consipio seek to enforce immediate repayment. As of December 31, 2005 the outstanding principal under the Note was $ 2.9 million (or EUR 2.5 million). In any event, the Company does not believe that the acceleration of the Note by Consipio, if not rescinded, will have a material adverse effect on the Company, as the Note is fully collateralized by 4,950,000 shares of Private Media Group, Inc. Common Stock pursuant to the guaranty agreement from Slingsby. Slingsby Enterprises is beneficially owned by Berth H. Milton, Chairman of the Board of Directors.

The Company has short-term loans receivable from entities controlled by the Company’s principal shareholder of EUR 4.2 million and EUR 5.9 million at December 31, 2004 and 2005 respectively. The increase in related party receivable of during 2005 was principally due to a claim of EUR 1.5 million related to the purchase of a real estate property located in Barcelona, Spain. The loans bear interest at a rate of EURIBOR+1% payable annually. The balance of these loans at December 31, 2005 totaled EUR 5.9 million which includes accrued interest.

As of December 31, 2004, the Company had a note payable to an entity controlled by the Company’s principal shareholder. The amount payable at December 31, 2004 was EUR 0.7 million. The note was subject to interest at a rate of EURIBOR+1% payable annually. The note was originally payable at December 31, 2004, but was re-negotiated to expire December 31, 2008. In 2005 the note was repaid in its entirety via an offset against a claim related to the purchase of the real estate property located in Barcelona, Spain.

In May 2003 Euro 1.65 million of a related party note payable was re-financed by an institutional lender at the same interest rate as on the note payable, EURIBOR + 1%. The loan is repayable in equal monthly installments over a four year period starting June 29, 2004. The loan is guaranteed by the Company’s principal shareholder and affiliates of the Company’s principal shareholder.

14. Related party transactions

The Company has short-term loans receivable from entities controlled by the Company’s principal shareholder of EUR 4,187 thousand and EUR 4,220 thousand at December 31, 2003 and 2004 respectively. The loans bear interest at a rate of EURIBOR+1% payable annually. The balance of these loans at December 31, 2004 totaled EUR 4,220 thousand which includes accrued interest.

The Company has a note payable to an entity controlled by the Company’s principal shareholder. The amount payable at December 31, 2003 and 2004 was EUR 2,237 thousand and EUR 728 thousand, respectively. The note bears interest at a rate of EURIBOR+1% payable annually. The note was originally payable at December 31, 2004, but has been re-negotiated and expires December 31, 2008.

In May 2003 Euro 1.65 million of the related party note payable was re-financed by an institutional lender at the same interest rate as on the Note Payable, EURIBOR + 1%. The loan is repayable in equal monthly installments over a four year period starting June 29, 2004. The loan is guaranteed by the Company’s principal shareholder and affiliates of the Company’s principal shareholder.

In December 2001 we borrowed $4.0 million from Commerzbank AG pursuant to a Note originally due December 20, 2002 in order to expand our product portfolio. Subsequently the maturity of the Note was extended to March 2003. The Note bears interest at an annual rate of 7%, payable quarterly, with the entire principal amount and accrued interest due on maturity. The Note is prepayable in full upon the sale of equity by us. Upon the Note becoming prepayable, we are required to repay the entire principal amount of the Note together with the greater of (1) accrued interest payable on the Note or (2) a prepayment premium equal to $200,000. The Note is secured by a guaranty from Slingsby Enterprises and a pledge by Slingsby Enterprises of 5,600,000 shares of our Series A Preferred Stock. The lender and Slingsby Enterprises have also agreed that if the Note remains unpaid at maturity, Commerzbank may elect to exchange the Note for Series A Preferred Stock or common stock owned by Slingsby Enterprises to the value of $5.0 million. In April 2003 the Note was acquired by Consipio Holding b.v. from Commerzbank AG, and Consipio and Private reached an agreement-in-principle with Consipio to extend the maturity of the Note for five years, with interest on the Note being increased to 9.9% per annum. However, Consipio and Private have been unable to reach final agreement on other terms and conditions relating to the restructured Note. Accordingly, in December 2003 Consipio notified Private and Slingsby Enterprises that Private was in default under the Note, and demanded immediate payment of the outstanding principal under the Note. The Company continues to make all regularly scheduled interest payments on the Note and believes that it has valid defenses to the demand for immediate repayment of the Note, should Consipio seek to enforce immediate repayment. As of December 31, 2004 the outstanding principal under the Note was $ 3.1 million (or EUR 2.2 million). In any event, the Company does not believe that the acceleration of the Note by Consipio, if not rescinded, will have a material adverse effect on the Company, as the Note is fully collateralized by 4,950,000 shares of Private Media Group, Inc. Common Stock pursuant to the guaranty agreement from Slingsby. Slingsby Enterprises is beneficially owned by Berth H. Milton, Chairman of the Board of Directors.