Private Media Group (PRVT)

Section 12.3 Withholding Rights

PMG, Corporation or Callco shall be entitled to deduct and withhold from any dividend or consideration otherwise payable to any holder of Exchangeable Shares such amounts as PMG, Corporation or Callco is required to deduct and withhold with respect to such payment under the Income Tax Act (Canada), United States tax laws or any other relevant provisions of provincial, state, local or foreign tax laws. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes hereof as having been paid to such holder of the Exchangeable Shares in respect of which such deduction and withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing authority.

To the extent that such amount so required to be deducted or withheld from any payment to a holder exceeds the cash portion of the consideration otherwise payable to the holder, PMG, Corporation or Callco shall promptly notify the holder and unless such holder remits the difference in cash to PMG, Corporation or Callco, before the tax amount is required to be remitted to the taxing authority, then PMG, Corporation or Callco may sell or otherwise dispose of or offset such portion of the consideration (including, without limitation, any of the PMG Common Stock) as is necessary to provide sufficient funds to PMG, Corporation or Callco to enable it to comply with such deduction or withholding requirement and PMG, Corporation or Callco shall give an accounting to the holder with respect thereto and shall pay over to such holder and remit any unapplied balance of the net proceeds of such sale or offset that was not remitted to such taxing authority in satisfaction of a deducting or withholding requirement.

In order to assist PMG, Corporation and Callco in complying with any such deduction and withholding requirement, the relevant holder shall, to the extent applicable, deliver to PMG, Corporation or Callco (i) if such holder is an individual, trust or corporation, a declaration sworn by the individual, a trustee or a director, as the case may be, before a commissioner for oaths to the effect that such holder, is not and will not be, on the date of payment, a non-resident of Canada for the purposes of the Income Tax Act (Canada) or (ii) if such holder is a partnership, a declaration sworn by a general partner before a commissioner for oaths to the effect that such holder is a Canadian partnership, as defined in the Income Tax Act (Canada).