Private Media Group (PRVT)

7. CONDITIONS TO OBLIGATIONS OF BUYER AND SUB TO CLOSE

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

(a) The representations and warranties of Sellers and the Company set forth in Articles 5 and 6 shall be true and correct in all material respects (except for representations and warranties having a “materiality” or “Material Adverse Effect” 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 Company to that effect.

(b) Sellers and the Company 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 Company 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, provincial, 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transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (iii) affect adversely the right of Buyer to effect the Transaction or to control the Company, or (iv) affect adversely the right of the Company to own their assets and to operate the Company’s Business; and no such injunction, judgment, order, decree, ruling, or charge shall be in effect.

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(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 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 a certificate dated as of the Closing, signed by the Secretary or other appropriate officer of the Company, certifying that attached thereto is a true, correct and complete copy of the Organizational Documents of the Company and each Company Subsidiary as in effect on the Closing Date.

(g) Sellers shall have delivered to Buyer (i) evidence of good standing with respect to the Company from the Province of Ontario, as of a recent date before the Closing, (ii) a certificate dated as of a recent date from the Secretary of State of Delaware to the effect that Sureflix Digital Distribution Inc. is validly existing and in good standing in the state of Delaware, and (iii) evidence of good standing with respect to Sureflix Digital Logistics Inc. from the Federation of Saint Christopher and Nevis, as of a recent date before the Closing.

(h) The Company 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 Buyer 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 Company 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 Company and the Company Subsidiaries, together with a waiver and release of claims by Sellers and such directors and officers against the Company and the Company Subsidiaries arising on or prior to the Closing Date, in the form attached hereto as Exhibit G.

(k) Each of Sellers and the Company shall have entered into his or her respective Employment Agreement and a form of proprietary information and invention assignment agreement approved by Buyer, acting reasonably, and the same shall be in full force and effect without amendment or modification.

(l) Each of Sellers and at least 90% of the other employees of the Company designated by Buyer shall have confirmed their continued employment with the Company following Closing on employment terms reasonably acceptable to Buyer and entered into a form of proprietary information and invention assignment agreement approved by Buyer, acting reasonably.

(m) Buyer shall have received from counsel to the Company a legal opinion addressed to the Buyer and Sub and dated the Closing Date in the form attached hereto as Exhibit H.

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(n) No Material Adverse Effect shall have occurred between August 7, 2009 and the Closing Date.

(o) Each of Sellers shall have entered into the Exchangeable Share Support Agreement in the form attached hereto as Exhibit B.

(p) The Holdco Amalgamation shall have been effected.

(q) Either: (a) Buyer shall have received written favorable advice from the Department of Canadian Heritage that the transactions contemplated by this Agreement would not be reviewed under the Investment Canada Act, which advice is satisfactory to Buyer in its sole discretion, or (b) the responsible Minister under the Investment Canada Act shall have confirmed to Buyer that he or she has determined, or been deemed to have determined, that the transaction contemplated by this Agreement is not reviewable pursuant to the Investment Canada Act.

All actions to be taken by Sellers and the Company 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.