Private Media Group (PRVT)

7. CONDITIONS TO OBLIGATIONS OF BUYER AND MERGER SUBS TO CLOSE

The obligations of Buyer and Merger Subs to consummate the transactions to be performed by them in connection with the Closing is subject to satisfaction of the following conditions:

(a) The representations and warranties of Sellers and the Subsidiaries set forth in Articles 5 and 6 shall be true and correct in all material respects (except for representations and warranties having a “materiality” standard which shall be true and correct in all respects) at and as of the date of this Agreement and at and as of the Closing Date as though made on and as of those dates and Buyer shall have received certificates from each of the Sellers and appropriate officers of the Subsidiaries to that effect.

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(b) Sellers and the Subsidiaries shall have performed and complied with all covenants, agreements and conditions required to be performed by them on or before the Closing Date and Buyer shall have received certificates from each of the Sellers and appropriate officers of the Subsidiaries to that effect.

(c) No action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any Federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (iii) affect adversely the right of Buyer to effect the Mergers or to control the Subsidiaries, or (iv) affect adversely the right of the Subsidiaries to own their assets and to operate the Companies Business; and no such injunction, judgment, order, decree, ruling, or charge shall be in effect.

(d) The Parties shall have received all authorizations, consents, and approvals of governments and governmental agencies needed to satisfy the representations and warranties specified in Sections 4.2, 4.3, 5.3 and 6.3 above.

(e) The Sellers shall have procured all other third party consents needed to satisfy the representations and warranties specified in Sections 5.3 and 6.3 above.

(f) Sellers shall have delivered to Buyer certificates dated as of the Closing, signed by the Secretary or other appropriate officer of each Subsidiary, certifying that attached thereto is a true, correct and complete copy of the Organizational Documents of each such Subsidiary as in effect on the Closing Date.

(g) Sellers shall have delivered to Buyer a certificate dated as of a recent date from the Secretary of State of California (and other than in the case of ThinkForward, Delaware) to the effect that each Subsidiary is validly existing and in good standing in its state of organization and in each state where such Subsidiary is qualified to do business.

(h) The Subsidiaries shall have taken all necessary action to authorize the execution and performance of this Agreement and all other documents, agreements and transactions contemplated in this Agreement and shall have delivered to Sellers true copies, certified by a responsible officer, of resolutions or written consents evidencing such action.

(i) Sellers shall have delivered evidence to Buyers of the authority and incumbency of the Persons acting on behalf of the Subsidiaries in connection with the execution of any document delivered pursuant to this Agreement.

(j) Buyer shall have received the unconditional resignation of the present directors and officers of the Subsidiaries and the Managers and Alternate Managers of the Companies and Mama’s, together with a waiver and release of claims by Sellers, such directors and officers and Managers against the Subsidiaries arising on or prior to the Closing Date, in form and substance acceptable to Buyer in Buyer’s sole discretion.

(k) Each of Sellers and Game Link shall have entered into his or her respective Employment Agreement, and the same shall be in full force and effect.

(l) Game Link and 537 Stevenson Street L.L.C. shall have entered into a new lease agreement for the Leased Premises on terms and conditions in form and substance as annexed hereto as Exhibit “C.”

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(m) Buyer shall have received from counsel to the Subsidiaries, a legal opinion addressed to the Buyer and Merger Subs and dated the Closing Date in form and substance as annexed hereto as Exhibit “E”.

(n) The Ackrell Letter Agreement shall have been executed and delivered by the parties thereto.

All actions to be taken by Sellers and the Subsidiaries in connection with the consummation of the transactions contemplated hereby, and all certificates, opinions, instruments, and other documents reasonably required to effect the transactions contemplated hereby, will be reasonably satisfactory in form and substance to Buyer. Buyer may waive any condition specified in this Article 7.