Private Media Group (PRVT)

Section 1.1 Definitions

Where used herein or in any amendments hereto or in any communications required or permitted to be given hereunder, the following capitalized terms shall have the following meanings, unless the context otherwise requires:

“Act” means the Business Corporations Act (Ontario), as amended, consolidated or re-enacted from time to time.

“Additional Transfer Documents” means such documents and instruments of transfer as may be required to effect a transfer of Exchangeable Shares under the Act or the constating

documents of Corporation and such additional documents or instruments as Corporation, Callco or PMG, as the case may be, may reasonably require.

“Affiliate” has the meaning ascribed thereto in the Act.

“Automatic Exchange Rights” means the benefit of the obligation of PMG to effect the automatic exchange of Exchangeable Shares for PMG Common Stock pursuant to Section 2.7 hereof.

“Automatic Redemption Date” has the meaning ascribed thereto in the Exchangeable Share Provisions.

“Board of Directors” means the board of directors of Corporation.

“Business Day” has the meaning ascribed thereto in the Exchangeable Share Provisions.

“Call Rights” means, collectively, the Liquidation Call Right, the Redemption Call Right, the Retraction Call Right and the Insolvency Exchange Call Right and “Call Right” shall mean any one of such Call Rights.

“Canadian Dollar Equivalent” has the meaning ascribed thereto in the Exchangeable Share Provisions.

“Control Transaction” has the meaning ascribed thereto in the Exchangeable Share Provisions.

“Designated Place” means, with respect to the presentation and surrender of Exchangeable Share certificates and the pick-up by Holders of Exchangeable Share Consideration, the principal executive offices of Corporation or such other reasonable place as may be specified by the Board of Directors by notice to the Holders of Exchangeable Shares.

“Effective Date” has the meaning ascribed thereto in the Exchangeable Share Provisions.

“Exchangeable Share Consideration” has the meaning ascribed thereto in the Exchangeable Share Provisions.

“Holders” means Eric Johnson, Erik Schannen and Michel Lozier, and any other Holders of Exchangeable Shares who becomes a party to this Agreement, from time to time.

“Insolvency Event” means the institution by Corporation of any proceeding to be adjudicated bankrupt or insolvent or to be dissolved or wound-up, or the consent of Corporation to the institution of bankruptcy, insolvency, dissolution or winding-up proceedings against it, or the filing of a petition, answer or consent seeking dissolution or winding-up under any bankruptcy, insolvency or analogous laws, including the Companies Creditors’ Arrangement Act (Canada) and the Bankruptcy and Insolvency Act (Canada), and the failure by Corporation to contest in good faith any such proceedings commenced in respect of Corporation within fifteen (15) days of becoming aware thereof, or the consent by

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Corporation to the filing of any such petition or to the appointment of a receiver, or the making by Corporation of a general assignment for the benefit of creditors, or the admission in writing by Corporation of its inability to pay its debts generally as they become due, or Corporation not being permitted, pursuant to liquidity or solvency requirements of applicable law, to redeem any Retracted Shares (as defined herein) pursuant to Article 5 of the Exchangeable Share Provisions.

“Liquidation Amount” has the meaning ascribed thereto in the Exchangeable Share Provisions.

“Liquidation Date” has the meaning ascribed thereto in the Exchangeable Share Provisions.

“Person” includes an individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization or association or other form of business enterprise, trustee, executor, administrator and other legal representative.

“PMG Common Stock” means PMG’s common stock, par value of US$0.001 per share in the capital of PMG.

“PMG Liquidation Price” means in respect of each Exchangeable Share, the Exchangeable Share Consideration payable pursuant to Section 2.7 at the Liquidation Event Effective Time.

“Redemption Date” has the meaning ascribed thereto in the Exchangeable Share Provisions.

“Redemption Price” has the meaning ascribed thereto in the Exchangeable Share Provisions.