Private Media Group (PRVT)

9.6 Taxes; Litigation

(a) Sellers shall cause to be prepared and cause to be filed, within the time and in the manner provided by law, all Tax Returns of the Company for all periods ending on or before the Closing Date that are due after the Closing Date; provided however that Buyer shall have the right to review such Tax Returns prior to filing. Buyer shall cause to be prepared and cause to be filed, within the time and in the manner provided by law, all Tax Returns of the Company for all periods ending after the Closing Date.

(b) The Parties shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns pursuant to this Section 9.6 and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and, upon the other Party’s request, the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Parties further agree, upon request, to use their commercially reasonable efforts to obtain any certificate or other document from any Governmental Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions contemplated hereby).

51

(c) All transfer, documentary, sales, use, stamp, registration and other such Taxes, and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with consummation of the transactions contemplated by this Agreement (other than stamp, stock or similar taxes payable solely by reason of the issuance of the Amalgamation Consideration Shares) shall be paid when due by the Party incurring such Taxes, fees or charges, and such Party will, at its own expense, file all necessary Tax Returns and other documentation with respect to all such Taxes, fees and charges, as required by applicable law.

9.7 Audits. Subsequent to the Closing Buyer intends to complete an audit of the Company’s financial statements for the fiscal year ended December 31, 2009. Sellers agree to use commercially reasonable efforts to cooperate with Buyer and its independent accountants in connection with such audit.

9.8 No Solicitation. Given the substantial amount of management time and attention that has been and will be devoted by Buyer to the consideration of the proposed transactions contemplated by this Agreement, as well as the professional fees and other resources expended to date and to be expended, until the earlier of (a) the termination of this Agreement, and (b) the Closing, the Sellers and the Company will deal exclusively with Buyer with respect to any transaction described in clauses (i) or (ii) below, and neither the Sellers nor the Company shall, nor shall they authorize or permit any officer, manager, director, employee, investment banker, attorney, accountant or other representative of any of them, directly or indirectly, take any action to knowingly solicit, encourage or facilitate any action that might lead to, or accept any offers, initiate or participate in negotiations or discussions with, or provide any non-public information to, or enter into any letter of intent, preliminary agreement or definitive agreement with any person with respect to (i) any possible merger, amalgamation, acquisition, reorganization, sale of all or substantially all of the assets and properties of the Company, purchase or sale of shares or any other equity interests (or rights to acquire shares or any other equity interests) or change in control of, or any similar transaction or transactions involving, directly or indirectly, the Company, or (ii) any joint venture or partnership or other similar transaction or transactions outside the Ordinary Course of Business.

9.7 Taxes; Litigation

(a) Sellers shall severally and not jointly indemnify Buyer and the Subsidiaries, and hold each of them harmless, from and against any and all Adverse Consequences (from the first dollar) attributable to Taxes (or the non-payment thereof) of any Subsidiary for all taxable periods, ending on or before the Closing Date; all Taxes of any member of an affiliated, consolidated, combined or unitary group of which the any Subsidiary (or any predecessor of any of the foregoing) is or was a member on or prior to the Closing Date, including pursuant to Treasury Regulation §1.1502-6 or any analogous or similar state, local, or foreign law or regulation; and any and all Taxes of any other Person imposed on the any Subsidiary as a transferee or successor, by contract or pursuant to any law, rule, or regulation, which Taxes relate to an event or transaction occurring before the Closing Date. Sellers shall reimburse Buyer for any Taxes of any Subsidiary which are the responsibility of Sellers pursuant to this Section 9.7 within fifteen (15) business days after payment of such Taxes by Buyer. Buyer shall have the benefits of Section 10.7 in recouping indemnification under this Section 9.7(a).

39

(b) Sellers shall cause to be prepared and cause to be filed, within the time and in the manner provided by law, all Tax Returns of the Subsidiaries for all periods ending on or before the Closing Date that are due after the Closing Date. Buyer shall cause to be prepared and cause to be filed, within the time and in the manner provided by law, all Tax Returns of the Subsidiaries for all periods ending after the Closing Date.

(c) The Parties shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns pursuant to this Section 9.7 and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and, upon the other Party’s request, the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Parties further agree, upon request, to use their commercially reasonable efforts to obtain any certificate or other document from any governmental authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including, but not limited to, with respect to the transactions contemplated hereby).

(d) All transfer, documentary, sales, use, stamp, registration and other such Taxes, and all conveyance fees, recording charges and other fees and charges (including any penalties and interest) incurred in connection with consummation of the transactions contemplated by this Agreement (other than stamp, stock or similar taxes payable solely by reason of the issuance of the Merger Consideration Shares) shall be paid by Sellers when due, and Sellers will, at their own expense, file all necessary Tax Returns and other documentation with respect to all such Taxes, fees and charges, as required by applicable law.

9.8 Conduct of Business Prior to Closing. Without in any way limiting any other obligation of the Sellers or any Subsidiary hereunder, during the period from the date hereof to the time of Closing, each of Sellers and the Subsidiaries covenant and agree as follows:

(a) Conduct Business in the Ordinary Course. Prior to Closing, each of Sellers and the Subsidiaries shall conduct the Companies Business only in the Ordinary Course of Business and shall not, without Buyer’s prior written consent, enter into any transaction or refrain from doing any action which, if effected before the date of this Agreement, would constitute a breach of any representation, warranty, covenant or other obligation of the Subsidiaries or Sellers contained herein or have a Material Adverse Effect on the Subsidiaries. If the Subsidiaries or Sellers consider any material change, alteration or modification to the Companies Business that is out of the Ordinary Course of Business, the Subsidiaries and Sellers shall notify Buyer, and such change, alteration or modification shall not be made without consultation with Buyer. If Buyer disagrees with the proposed material change, alteration or modification and the Subsidiary implements such proposal notwithstanding Buyer’s disagreement, this Agreement shall be voidable, at Buyer’s option, by written notice to Sellers given not more than ten (10) days following the date Buyer had actual notice of the implementation of such proposal, such right to be without prejudice to any other rights or remedies available to Buyer. The Sellers shall notify Buyer forthwith of the implementation of any such proposal with which Buyer had disagreed.

40

(b) Continue Insurance. The Subsidiaries shall continue to maintain in full force and effect all policies of insurance or renewals thereof now in effect and shall give all notices and present all claims under all policies of insurance in a due and timely fashion;

(c) Books and Records. Sellers shall cause the Subsidiaries to maintain and the Subsidiaries shall maintain the books and records and all other documents, files, and other data, financial or otherwise relating to the Subsidiaries or their business;

(d) Disposition of Assets. The Subsidiaries shall not dispose of any of the assets of the business, except in the Ordinary Course of Business;

(e) Employee Compensation. The Subsidiaries shall not increase the level of compensation of Sellers or any employee and shall not grant any increased bonuses, benefits or other forms of direct or indirect compensation to any Seller or employee;

(f) Borrowing. The Subsidiaries shall not borrow any funds, under existing credit lines or otherwise;

(g) Contracts. The Subsidiaries shall not enter into any contractual arrangements for the business which would be Material Agreements or Contracts, other than in the Ordinary Course of Business;

(h) Preserve Goodwill. The Subsidiaries shall use their best efforts to carry on the business as currently conducted, and Sellers shall each use their respective best efforts to promote and preserve for Buyer the goodwill of suppliers, clients and others having business relations with the Subsidiaries;

(i) Discharge Liabilities. Except as otherwise provided in this Agreement, the Subsidiaries shall pay and discharge their respective liabilities in the Ordinary Course of Business, except those contested in good faith;

(j) No Change to Organic Documents. No Subsidiary shall adopt any amendment to its Articles of Incorporation, Bylaws, operating agreement or other organizational documents;

(k) Change in Ownership Structure. The Subsidiaries shall not issue, reissue, sell, deliver, transfer, repurchase, redeem, acquire or pledge or authorize or propose the issuance, reissuance, sale, delivery, Transfer, repurchase, redemption, acquisition or pledge of shares or other voting or equity interest or any securities convertible into stock or other equity or voting interests, or any rights, warrants or options to acquire any voting or equity interest;

(l) Tax Matters. The Subsidiaries will not change (i) any of the accounting or Tax principles, practices or methods used by any of them, except as required by changes in applicable Tax laws, nor will the Subsidiaries settle or compromise any Tax liability or agree to any adjustment of any Tax, or make or change any material election with respect to Taxes;

(m) Accounts Payable. Except as otherwise provided in this Agreement, no Subsidiary will change past practice with respect to the payment of accounts payable or the collection of accounts receivable; and

41

(n) Intellectual Property Matters. No Subsidiary will dispose of, permit to lapse, waive, release, or assign any rights or settle any claims with respect to, any material Intellectual Property rights of the Subsidiaries.

9.9 Audits; Audit Fees.

(a) Buyer agrees to pay directly to the auditors or reimburse to the Subsidiaries prior to Closing (at the Companies’ election) 50% of the fees and expenses of Odenberg Ullakko Muranishi & Co. LLP incurred in connection with the review and audit of the 2007 Audited Financial Statements and the 2008 Reviewed Interim Financial Statements, not to exceed $40,000.

(b) Subsequent to the Closing Buyer intends to complete an audit of the Subsidiaries for the 2008 fiscal year, and for the period from the end of the 2008 fiscal year through the Closing Date. Sellers agree to use commercially reasonable efforts to cooperate with Buyer and its independent accountants in connection with such audit.

9.10 No Solicitation. Given the substantial amount of management time and attention that has been and will be devoted by Buyer to the consideration of the proposed transactions contemplated by this Agreement, as well as the professional fees and other resources expended to date and to be expended, until the earlier of (a) the termination of this Agreement, and (b) the Closing, the Sellers and the Subsidiaries, will deal exclusively with Buyer with respect to any transaction described in clauses (a) or (b) below, and neither the Sellers of the Subsidiaries shall, nor shall they authorize or permit any officer, manager, director, employee, investment banker, attorney, accountant or other representative of any of them, directly or indirectly, take any action to knowingly solicit, encourage or facilitate any action that might lead to, or accept any offers, initiate or participate in negotiations or discussions with, or provide any non-public information to, or enter into any letter of intent, preliminary agreement or definitive agreement with any person with respect to (a) any possible merger, acquisition, reorganization, sale of all or substantially all of the assets and properties of any of the Subsidiaries, purchase or sale of membership interests or capital stock (or rights to acquire membership interests or capital stock) or change in control of, or any similar transaction or transactions involving, directly or indirectly, any of the Subsidiaries, or (b) any joint venture or partnership or other similar transaction or transactions outside the ordinary course of business.

9.11 Certain Expenses and Obligations of Sellers. One-half of the legal fees incurred by Sellers and the Subsidiaries to a single law firm designated by the Companies in connection with the transactions contemplated by this Agreement, which half shall not exceed $75,000, and which remain unpaid immediately prior to the Closing, shall be paid at Closing out of the Companies’ then existing cash or by Buyer.