Private Media Group (PRVT)

6.1 Organization, Qualification and Corporate Power.

(a) The Company is duly organized, validly existing, and in good standing under the laws of the province of Ontario. Each of the Company Subsidiaries is duly organized, validly existing and in good standing under the laws of its respective jurisdiction of organization. Sellers have made available to Buyer the Organizational Documents of the Company and the Company Subsidiaries and the Company’s minute books (containing the records of meetings of the stockholders, the Board of Directors, and any committees of the Board of Directors); and stock certificate and stock record books; and all of such documents and records are correct and complete in all material respects. Neither the Company nor any Company Subsidiary is in default under, or in violation of any provision of, its Organizational Documents.

(b) The Company and each Company Subsidiary is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required, except where the failure to qualify would not have a Material Adverse Effect, and Section 6.1(b) of the Disclosure Schedule sets forth each such jurisdiction. The Company and each Company Subsidiary has full corporate power and authority to carry on its business as presently conducted, and to own and use the properties owned and used by it.

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(c) Section 6.1(c) of the Disclosure Schedule lists the officers and directors of the Company and each of the Company Subsidiaries.

(d) The Company has full power and authority to execute and deliver all documents and agreements to be executed by the Company as contemplated hereunder, and to perform its obligations thereunder. The execution and delivery by the Company of the documents and agreements to be executed by it as contemplated hereunder, and the performance of its obligations thereunder, have been duly and validly authorized by the Company, and no other proceedings on the part of the Company are necessary for the execution and delivery of the documents and agreements to be executed by the Company as contemplated hereunder, and the performance of its obligations thereunder. The affirmative votes of the holders of two-thirds of the issued and outstanding Company Shares (collectively, the “Requisite Vote”) are the only votes of the holders of the Company Shares necessary under all applicable Laws and the Company Organizational Documents to approve the Transaction, this Agreement and all other agreements, transactions and actions contemplated hereby and thereby, and the Company has obtained the Requisite Vote. All documents and agreements to be executed by the Company as contemplated hereunder constitute the valid and legally binding obligations of the Company enforceable in accordance with their terms and conditions, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar law now or hereafter in effect relating to creditors’ rights generally and subject to general principles of equity.

6.2 Capitalization. The Sellers and Holdco are the sole legal and beneficial owners of 100% of the issued and outstanding shares in the capital of the Company, free and clear of any restrictions on transfer, Taxes, Security Interests, options, warrants, purchase rights, contracts, commitments, equities, claims and demands. All of the Company Shares have been duly authorized, are validly issued, fully paid and nonassessable, and are held of record by Sellers and Holdco. The Company Shares represent the entire issued and outstanding shares and other equity securities of the Company. There are no (i) outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights or other contracts or commitments that could require the Company to issue, sell, or otherwise cause to become outstanding any of its shares, (ii) outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to the Company, or (iii) voting trusts, proxies, or other agreements or understandings with respect to the voting of the shares of the Company. The Company has no subsidiaries or equity interests in any Person other than the Company Subsidiaries. The Company owns 100% of the issued and outstanding shares of each Company Subsidiary, free and clear of any Security Interests, commitments, equities, claims and demands. Sureflix Digital Logistics, Inc. has conducted no business and has no assets, liabilities or obligations, known or unknown, contingent or otherwise. The Company is a “private issuer” as defined in Section 2.4 of National Instrument 45-106.

6.3 Noncontravention. The execution and delivery of all documents and agreements to be executed by the Company as contemplated hereunder, and the consummation of the transactions contemplated hereby and thereby, will not (except, in the case of clauses (a) and (b) only, as will not have a Material Adverse Effect) (a) violate any Legal Requirement to which the Sellers, the

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Company or any Company Subsidiary is subject, (b) violate any provision of the Organizational Documents of the Company, or any resolutions adopted by the Board of Directors of the Company, or (c) conflict with, result in a breach of, constitute a default under, result in the acceleration of, or create in any Party the right to accelerate, terminate, modify, or cancel, or require any notice or consent under, any Material Agreement, or contract to which the Company or any Company Subsidiary is a party, or by which it is bound, or to which any of its assets is subject (or result in the imposition of any Security Interest upon any such asset). Neither the Company nor any Company Subsidiary is required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of, any government or governmental agency or other third party in order for the Parties to consummate the transactions contemplated by this Agreement.

6.4 Broker’s Fees. As of the date of this Agreement, neither the Company nor any Company Subsidiary has any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated hereunder. Effective as of the Effective Time, neither the Company nor any Company Subsidiary shall have any liability, obligation or expense to any broker, finder or agent with respect to the transactions contemplated hereunder.

6.5 Predecessors, Partnerships, Subsidiaries and Affiliates. With the exception of Holdco and Entruphema Inc., the Company does not have any predecessor corporation, partnership or other entity, through merger, amalgamation, consolidation or otherwise. The Company has not ever owned any subsidiary other than the Company Subsidiaries, nor has it been a member of a partnership or joint venture, nor has it ever had any Affiliate, other than Sellers or the Company Subsidiaries, nor has it ever invested in the equity capital of any entity.

6.1 Organization, Qualification and Corporate Power.

(a) The Subsidiaries are companies duly organized, validly existing, and in good standing under the laws of the state of their organization. Sellers have made available to Buyer the Organizational Documents of the Subsidiaries and the Subsidiaries’ minute books (containing the records of meetings of the stockholders, the board of directors, and any committees of the board of directors); and stock and member certificate and member record books; and all of such documents and records are correct and complete in all material respects. Each of the Subsidiaries is not in default under, or in violation of any provision of, its Organizational Documents.

(b) Each of the Subsidiaries is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required, except where the failure to qualify would not have a Material Adverse Effect, and Section 6.1(b) of the Disclosure Schedule sets forth each such jurisdiction. Each of the Subsidiaries has full corporate power and authority to carry on its business as presently conducted, and to own and use the properties owned and used by it.

(c) Section 6.1(c) of the Disclosure Schedule lists the managers, alternate managers, officers and directors of each of the Subsidiaries.

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(d) The Subsidiaries have full power and authority to execute and deliver all documents and agreements to be executed by the Subsidiaries as contemplated hereunder, and to perform their respective obligations thereunder. The execution and delivery by the Subsidiaries of the documents and agreements to be executed by them as contemplated hereunder, and the performance of their respective obligations thereunder, have been duly and validly authorized by the Subsidiaries, and no other proceedings on the part of the Subsidiaries are necessary for the execution and delivery of the documents and agreements to be executed by the Subsidiaries as contemplated hereunder, and the performance of their respective obligations thereunder. All documents and agreements to be executed by the Subsidiaries as contemplated hereunder constitute the valid and legally binding obligations of the Subsidiaries enforceable in accordance with their terms and conditions, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar law now or hereafter in effect relating to creditors’ rights generally and subject to general principles of equity.