Private Media Group (PRVT)

10.2 Breaches by the Sellers.

(a) Subject to the terms and conditions contained in this Article 10, the Sellers agree to indemnify, defend and hold harmless Buyer from and against the entirety of any such Adverse Consequences that Buyer suffers through and after the date of the claim for indemnification (including any Adverse Consequences that Buyer suffers after the end of any applicable survival period) resulting from, arising out of or otherwise related to the following: (i) any breach or inaccuracy in any representations, warranties, covenants or agreements of the Company or the Sellers contained in this Agreement (regardless of whether such breach involves a Third Party Claim), provided Buyer makes a written claim for indemnification against such Sellers in the event of a breach of the Company’s and Sellers representations and warranties contained in Articles 5 or 6 or any of the Company’s or Sellers covenants or agreements contained herein in the manner set forth in Section 13.7 hereof within the applicable survival period, (ii) any liability (whether known, unknown, contingent or otherwise) not included in the Financial Statements or specifically disclosed in the Disclosure Schedules, other than those which have arisen after the Balance Sheet Date and which are incurred in the Ordinary Course of Business, or (iii) any Pre-Closing Taxes that remain unpaid as of the Effective Time and for which adequate reserves (excluding any reserve for deferred Taxes established to reflect timing differences between book and tax income) have not been established on the face of the Financial Statements, other than those which have accrued in the Ordinary Course of Business following the Balance Sheet Date (each, a “Seller Indemnification Event”).

(b) Notwithstanding the foregoing, in the event of an inaccuracy in, or breach of, any of the representations and warranties contained in Articles 5 and 6 (other than the Surviving Representations, excluding Section 6.14), a breach of the Tax Representations or a claim pursuant to Section 10.2(a)(iii), Sellers shall not have any obligation to indemnify Buyer until Buyer shall have suffered Adverse Consequences resulting from, arising out of or otherwise relating to all breaches of this Agreement by the Sellers (including breaches of the Surviving Representations, excluding Section 6.14) in excess of the applicable Indemnification Threshold, in which case the Sellers shall be obligated to indemnify Buyer only for such Adverse Consequences in excess of such Indemnification Threshold. The Parties intend that the applicable Indemnification Threshold shall not apply in the event of an inaccuracy in, or breach of, any of the Surviving Representations (excluding Section 6.14), or any covenant contained herein, or any inaccuracy, breach or other matter involving fraud, willful misrepresentation or gross negligence by any Seller or the Company, and accordingly the Sellers shall be obligated to indemnify Buyer for all Adverse Consequences resulting from, arising out of or otherwise relating to any such inaccuracy, breach or other matter. For avoidance of doubt, in determining whether an Indemnification Threshold is met, all Adverse Consequences resulting from, arising out of or otherwise relating to any and all events giving rise to indemnification under Section 10.2(a) shall be aggregated together.

(c) Notwithstanding anything to the contrary in this Agreement, any amount payable by a Seller or the Sellers pursuant to this Article 10 in respect of any Adverse Consequences resulting from a claim under (i) Section 10.2(a)(i) arising out of a breach or inaccuracy in the representations and warranties contained in Section 6.17 or (ii) Section 10.2(a)(iii) shall be net of any Tax credits or other Tax benefits actually received by the Company post Closing that are attributable to the period of time prior to the Closing (such as any Scientific Research and Experimental Development credits applicable to the period of time prior to the Closing).

57

(d) For purposes of this Section 10.2, “Buyer” shall include Buyer, Sub and each of their respective Affiliates, officers, directors, employees, agents and attorneys and, after Closing shall also include the Company, Amalco and each of their respective Affiliates, officers, directors, employees, agents and attorneys.

(e) Notwithstanding anything to the contrary in this Agreement, the obligations of each Seller under this Agreement are several and not joint.

(f) Buyer shall use its commercially reasonable efforts to mitigate any Adverse Consequences which would otherwise give rise to indemnification obligations under this Agreement.

(g) Notwithstanding anything to the contrary in this Agreement, the aggregate liability (after taking into account the applicable Indemnification Threshold, if applicable) of each Seller under this Agreement shall in no event exceed an amount having a value equal to that portion of the Amalgamation Consideration paid or to be paid to such Seller, with the Amalgamation Consideration Shares valued for this purpose at the average closing price of Private Shares on the Trading Market over the ten (10) trading day period ending two (2) trading days prior to the date of the final determination of such claim in accordance with this Article 10.

10.2 Breaches by the Sellers

(a) In the event that (i) any of Sellers breaches any of such Seller’s representations, warranties or covenants contained herein (regardless of whether such breach involves a Third Party Claim), (ii) such breach has occurred within the applicable survival period pursuant to Section 10.1 hereof, and (iii) Buyer makes a written claim for indemnification against such breaching Seller in the event of a breach by such Seller of any of such Seller’s representations and warranties contained in Articles 5 or 6 or any of such Seller’s covenants contained herein in the manner set forth in Section 14.7 hereof within such survival period (an “Indemnification Event”), then subject to the other terms and conditions contained in this Article 10, the breaching Party agrees to indemnify Buyer from and against the entirety of any such Adverse Consequences that Buyer suffers through and after the date of the claim for indemnification (including any Adverse Consequences that Buyer suffers after the end of any applicable survival period) resulting from, arising out of or otherwise related to such breach. Notwithstanding the foregoing, in the event of a breach by Sellers of any of the representations and warranties contained in Articles 5 and 6 (other than Sections 5.1, 5.2, 5.5, 6.1, 6.2, 6.3, 6.4, 6.15, 6.17 and 6.20), Sellers shall not have any obligation to indemnify Buyer until Buyer shall have suffered Adverse Consequences resulting from, arising out of or otherwise relating to all breaches of this Agreement by the Sellers (including breaches of Sections 5.1, 5.2, 5.5, 6.1, 6.2, 6.4, 6.15, 6.17 and 6.20) in excess of the Indemnification Threshold, above which such Sellers shall be obligated to indemnify Buyer for such Adverse Consequences (in excess of the Indemnification Threshold). The Parties intend that the Indemnification Threshold shall not apply in the event of a breach by any Seller of a representation or warranty contained in Sections 5.1, 5.2, 5.5, 6.1, 6.2, 6.4, 6.15, 6.17 and 6.20, or any covenant contained herein, or any breach involving fraud by any Seller, and accordingly the breaching Seller shall be obligated to indemnify Buyer for all Adverse Consequences resulting from, arising out of or otherwise relating to any such breach. For purposes of this Section 10.2, “Buyer” shall include Buyer, Merger Subs, their Affiliates, officers, directors, employees, agents and attorneys and, after Closing shall also include each Subsidiary and its Affiliates, officers, directors, employees, agents and attorneys.

(b) The provisions of Sections 9.7(a) and 9.7(b), and not Section 10.2(a), shall be applicable to the matters described in Sections 9.7(a) and 9.7(b).

(c) Notwithstanding anything to the contrary in this Agreement, the obligations of each Seller under this Agreement are several and not joint.

(d) Notwithstanding anything to the contrary in this Agreement, the aggregate monetary liability (after taking into account the Indemnification Threshold, if applicable) of any particular Seller under this Agreement shall in no event exceed Seventy-Five Percent (75%) of the Merger Consideration Shares paid (or to be paid) to such Seller (or One Hundred Percent (100%) in the case of fraud by such Seller); it being intended that, if and to the extent that such Seller’s aggregate liability exceeds the portion of the Merger Consideration Shares previously paid to such Seller, any amount thereafter payable to such Seller shall be taken into account in determining such limitation.

(e) Buyer shall use its commercially reasonable efforts to mitigate any Adverse Consequences which would otherwise give rise to indemnification obligations under this Agreement.

(f) Buyer shall use its commercially reasonable efforts to pursue applicable insurance policies (which efforts shall not require the initiation of litigation), and in the event the Buyer receives any recovery in excess of unreimbursed Adverse Consequences, the amount of such recovery shall be applied first, to any obligations of Sellers to Buyers then outstanding, second, as a refund of any payments made by the Sellers in respect of indemnification claims pursuant to this Article 10 which

45

would not have been so paid had such recovery been obtained prior to such payment (subject to any restrictions on the disposition of such funds under this Agreement), and third, any excess to the Buyer. If Buyer fails to pursue recoveries under any “occurrence” based insurance policies or other collateral sources, then the Sellers Representative, subject to payment in full by Sellers of the applicable indemnified claim, shall have the right of subrogation to pursue such insurance policies and may take any reasonable actions necessary to pursue such rights of subrogation in its name or the name of the party from whom subrogation is obtained. Buyer shall reasonably cooperate, and cause its representatives (including the surviving corporations) to reasonably cooperate, with the Sellers Representative to pursue any such subrogation claim.

10.3 Breaches by Buyer. In the event that (i) Buyer breaches any of its representations, warranties and covenants contained herein (regardless of whether such breach involves a Third Party Claim) (ii) such breach has occurred within the applicable survival period pursuant to Section 10.1 hereof, and (iii) Sellers make a written claim for indemnification against the breaching party in the manner set forth in Section 14.7 hereof within such survival period, then Buyer agrees to indemnify Sellers from and against the entirety of any Adverse Consequences that such Parties may suffer through and after the date of the claim for indemnification (including any Adverse Consequences that such Parties may suffer after the end of, any applicable survival period) resulting from, arising out of, or otherwise relating to the breach. Notwithstanding anything to the contrary in this Agreement, the aggregate liability (after taking into account the Indemnification Threshold, if applicable) of Buyer to Sellers under this Agreement shall in no event exceed the amount of the Merger Consideration paid or to be paid to the Sellers, with the Merger Consideration Shares valued for this purpose at the Private Per Share Issue Price.