Related Party Transactions and Outside Related Director Information

Private Media Group, Inc. (PRVT)

11/15/2005 Proxy Information

In December 2001 Private borrowed $4.0 million from Commerzbank AG pursuant to a Note originally due December 20, 2002 in order to expand the Company’s 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 the Company. Upon the Note becoming prepayable, the Company is 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 4,950,000 shares of Common 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 Common Stock owned by Slingsby Enterprises with a 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. The Company continues to engage in discussions with Consipio with a view towards reaching final agreement on a restructured Note. 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 In any event, the Company does not believe that the acceleration of the Note by Consipio, if not rescinded, will have a material adverse effect on the Company, as the Note is fully collateralized by 4,950,000 shares of Private Media Group, Inc. Common Stock pursuant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.

Effective December 31, 2002, the Company completed the purchase of all of the outstanding stock of Barbuda B.V., from companies indirectly beneficially owned by Berth Milton. The principal asset of Barbuda B.V. was an approximately 6,300 square meter office facility and additional parking under construction, located in Barcelona, Spain. Construction was completed in September 2004. The purpose of this transaction was to acquire this property as the Company’s European headquarters. Since the acquisition, the Company reevaluated its need for additional space and as of February 2005 no longer owned the property.

The consideration paid by Private’s subsidiary to the seller for the Barbuda B.V. stock was EUR 9,956,950. The fair market value of the principal asset of Barbuda B.V., the real estate, was based upon independent appraisals. The consideration payable to the seller consisted of EUR 3,387,581 cash, paid in December 2002, and a note payable in the amount of EUR 6,569,369 (the “Barbuda Note”). The Barbuda Note bears interest at a rate of EURIBOR+1% payable annually and was originally due and payable on December 31, 2004. The amount payable on the Barbuda Note at December 31, 2004 was EUR 0.7 million. In January 2005, the Company and the seller agreed to a EUR 2.2 million reduction of the purchase price of the Barbuda B.V. stock based upon an adjustment to the fair market value of the real estate following completion of construction. Of this EUR 2.2 million adjustment, EUR 0.7 million was applied as an offset to retire the Barbuda Note and the remaining EUR 1.5 million was reflected as an increase in the related party receivable, described below.

The Company has short-term loans to an entity controlled by Mr. Milton in the amount of EUR 4.2 million and 4.2 million at December 31, 2003 and 2004, respectively. The loans bear interest at the rate of EURIBOR+1% per annum and have no maturity date. During 2003 and 2004 the highest amounts outstanding were EUR 4.5 million and EUR 4.2 million, respectively. Advances and repayments since June 30, 2002 are related to the acquisition of the Barbuda B.V. stock from an entity controlled by Mr. Milton, discussed above. In January 2005 the amount of the receivable was increased by EUR 1.5 million to reflect an adjustment in the purchase price of the Barbuda B.V. stock, as described above. As of September 30, 2005, EUR 5.9 million remained outstanding on these loans, including interest.

In May 2003 EUR 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.

The foregoing transactions were approved by a majority of our disinterested directors and are believed to be on terms no less favorable to us than could be obtained from unaffiliated third parties on an arms-length basis.