Private Media Group (PRVT)

4. REPRESENTATIONS AND WARRANTIES OF BUYER AND MERGER SUBS

Buyer and Merger Subs, jointly and severally, represent and warrant to the Members and the Sellers as follows:

4.1 Organization and Good Standing. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. Buyer has delivered to Sellers copies of its Organizational Documents, and all such copies are true and correct copies of such documents. Buyer 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. Buyer 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. Merger Subs are corporations duly organized, validly existing and in good standing under the laws of their respective jurisdictions of incorporation. The Merger Subs were formed solely for the purpose of engaging in the transactions contemplated by this Agreement and have engaged in no other business activities.

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4.2 Authorizations. Each of Buyer and the Merger Subs has full corporate power and authority to execute and deliver this Agreement and all other documents and agreements to be executed by it as contemplated hereunder, and to perform its obligations hereunder and thereunder. The execution and delivery by Buyer and the Merger Subs of this Agreement and all other documents and agreements to be executed by it as contemplated hereunder, and the performance of their obligations hereunder and thereunder have been duly and validly authorized, and no other proceedings on the part of Buyer or the Merger Subs are necessary for the execution and delivery of this Agreement and all other documents and agreements to be executed by it as contemplated hereunder, and, except for approval of Buyer’s shareholders following the Closing which is required to be obtained by Buyer under Nasdaq Rule 4350(i)(1)(C) and Section 9.14, and except for filings required to effect the Mergers under the CGCL and DCGL, the performance of their obligations hereunder and thereunder. This Agreement and all other documents and agreements to be executed by Buyer and/or the Merger Subs as contemplated hereunder constitute the valid and legally binding obligations of such Party enforceable against it 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.

4.3 Noncontravention. The execution and delivery of this Agreement by Buyer and the Merger Subs, and all other documents and agreements to be executed by it as contemplated hereunder, and the consummation of the transactions contemplated hereby and thereby, will not (a) violate any Legal Requirement to which Buyer or the Merger Subs is subject, (b) violate any provision of any of Buyer’s or Merger Subs’ Organizational Documents or any resolution adopted by their governing body, or (c) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any Party the right to accelerate, terminate, modify, or cancel, or require any notice or consent under, any material agreement, contract, lease, license, instrument, or other arrangement to which Buyer or Merger Subs is a party, or by which it is bound, or to which any of its assets are subject (or result in the imposition of any Security Interest upon any such assets). Except for approval of Buyer’s shareholders following the Closing which is required to be obtained by Buyer under Nasdaq Rule 4350(i)(1)(C) and Section 9.14, and except for filings required to effect the Mergers under the CGCL and DCGL, neither Buyer nor the Merger Subs 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.

4.4 Merger Consideration Shares. The Merger Consideration Shares to be issued to Sellers pursuant to this Agreement are duly authorized and, when issued, shall be validly issued, fully paid and non-assessable. Buyer has sufficient authorized but unissued shares of Private Common Stock to issue the shares constituting the Merger Consideration Shares. Following the Release Dates, Buyer will have sufficient authorized but unissued shares of Private Common Stock to issue the shares (if any) constituting the Private Initial Deferred Shares or any portion thereof. Following the Earnout Periods, Buyer will have sufficient authorized but unissued shares of Private Common Stock to issue the Earnout Shares (if any) to be issued to Sellers. The issuance of the Private Shares in the Merger to the Sellers will be made in compliance in all material respects with all applicable federal and state securities laws and the rules and regulations of Nasdaq.

4.5 Investment Intent. Buyer is acquiring the Shares for its own account, for investment purposes only and not with a view to the distribution (as such term is used in Section 2(11) of the Securities Act) of such Shares.

4.6 SEC Documents; Parent Financial Statements. A true and complete copy of each annual, quarterly and other report, proxy statement and registration statement filed by Buyer with the Securities and Exchange Commission (the “SEC”) since January 1, 2007 (the “SEC Documents”) is available on the website maintained by the SEC at www.sec.gov. Since January 1, 2007, Buyer has in

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all material respects filed with the SEC all reports and proxy statements required to be filed by it pursuant to the Securities Act and the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder. As of their respective filing dates, (and if amended or superseded by a filing prior to the date of this Agreement, the date of such filing) the SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such SEC Documents, and none of the SEC Documents contained on their filing dates any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except to the extent superseded by a subsequently filed SEC Document filed prior to the date of this Agreement. The consolidated financial statements of Buyer included in the SEC Documents complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated and consistent with each other (except as may be indicated in the notes thereto, except in the case of pro forma statements, or, in the case of unaudited financial statements, except as permitted under Form 10-Q under the Exchange Act) and fairly presented the consolidated financial position of the Buyer and its consolidated subsidiaries as of the respective dates thereof and the consolidated results of the Buyer’s operations and cash flows for the periods indicated (subject to, in the case of unaudited statements, normal and recurring year end audit adjustments). Buyer does not intend to correct or restate any aspect of, nor is there any basis for any correction or restatement of in any material respect the consolidated financial statements of Buyer included in the SEC Documents.

4.7 Litigation. Other than as disclosed in the SEC Documents, there is no action pending or, to the knowledge of Buyer, threatened in writing, or to the Knowledge of Buyer any investigation by any governmental entity or other third party, against Buyer or any of its subsidiaries, in each case, other than those that are not reasonably expected to have a Material Adverse Effect on Buyer.