Private Media Group (PRVT)

10.4 Matters Involving Third Parties

(a) If any third party shall notify any Party (the “Indemnified Party”) with respect to any matter (a “Third Party Claim”) which may give rise to a claim for indemnification against any other Party (the “Indemnifying Party”) under this Article 10, then the Indemnified Party shall promptly notify each Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is materially prejudiced by such delay.

(b) Any Indemnifying Party will have the right to assume and control (at its sole cost and expense) the defense of the Third Party Claim (unless the Third Party Claim involves Taxes) with counsel of its choice reasonably satisfactory to the Indemnified Party, so long as (i) the Indemnifying Party notifies the Indemnified Party in writing within fifteen (15) days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party elects to assume such defense, (ii) the Third Party Claim involves only money damages and does not seek an injunction or other equitable relief, and (iii) settlement of, or an adverse judgment with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely to establish a precedental custom or practice materially adverse to the continuing business interests of the Indemnified Party; provided, however, that the Indemnifying Party must conduct the defense of the Third Party Claim actively and diligently thereafter in order to preserve its rights in this regard; and provided further, that the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim.

(c) The Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be withheld unreasonably); provided however, that if the Indemnified Party notifies the Indemnifying Party in writing of the material terms of, and requesting the Indemnifying Party to consent to, such judgment or settlement and the Indemnifying Party does not respond in writing thereto within fifteen (15) days after receipt of such notice and request, the Indemnifying Party shall be deemed to have consented to the entry of such judgment or settlement. The Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (not to be unreasonably withheld); provided however, that if the Indemnified Party notifies the Indemnifying Party in writing of the material terms of, and requesting the Indemnifying Party to consent to, such judgment or settlement and the Indemnifying Party does not respond in writing thereto within fifteen (15) days after receipt of such notice and request, the Indemnifying Party shall be deemed to have consented to the entry of such judgment or settlement.

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(d) In the event none of the Indemnifying Parties assumes and conducts the defense of a Third Party Claim not involving Taxes in accordance with subsection (b) above, or in the event of a Third Party Claim involving Taxes, (i) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner it reasonably and in good faith may deem appropriate after consultation with, and (subject to the provisos contained in Section 10.4(c) above) with the consent of, the Indemnifying Party in connection therewith (which consent shall not be unreasonably withheld), (ii) the Indemnifying Party will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys’ fees and expenses), (iii) the Indemnifying Party may retain separate co-counsel at its sole cost and expense and participate in the defense of such Third Party Claim, and (iv) the Indemnifying Party will remain responsible for any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, or otherwise relating to the Third Party Claim to the fullest extent provided in this Article 10

10.5 Characterization of Adverse Consequences. All indemnification payments under this Article 10 made by or on behalf of Sellers shall be deemed adjustments to the Amalgamation Consideration.

10.6 Other Remedies and Provisions. The Parties specifically acknowledge and agree that monetary damages will not be an adequate remedy for a breach of any of the restrictive covenants contained in Section 9.3 hereof, and that irreparable injury will result to Buyer or the Subsidiaries or their successors in interest in the event of any such breach. Accordingly, Sellers agree that Buyer, the Subsidiaries, and their successors in interest shall be entitled to equitable relief in any court of competent jurisdiction, including, without limitation, a temporary or permanent injunction, restraining and enjoining Sellers, or any Person with which any of them is associated or by which any of them is employed, from further violations of such provisions, without the need to post any security or bond, and in addition to whatever other remedies at Law or in equity or otherwise Buyer may have.

10.4 Matters Involving Third Parties

(a) If any third party shall notify any Party (the “Indemnified Party”) with respect to any matter (a “Third Party Claim”) which may give rise to a claim for indemnification against any other Party (the “Indemnifying Party”) under this Article 10, then the Indemnified Party shall promptly notify each Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced.

(b) Any Indemnifying Party will have the right to assume and control (at its sole cost and expense) the defense of the Third Party Claim (unless the Third Party Claim involves Taxes) with counsel of its choice reasonably satisfactory to the Indemnified Party, so long as (i) the Indemnifying Party notifies the Indemnified Party in writing within 15 days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party elects to assume such defense, (ii) the Third Party Claim involves only money damages and does not seek an injunction or other equitable relief, and (iii) settlement of, or an adverse judgment with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely to establish a precedental custom or practice materially adverse to the continuing business interests of the Indemnified Party; provided, however, that the Indemnifying Party must conduct the defense of the Third Party Claim actively and diligently thereafter in order to preserve its rights in this regard; and provided further, that the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim.

(c) The Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be withheld unreasonably); provided however, that if the Indemnified Party notifies the Indemnifying Party in writing of the material terms of, and requesting the Indemnifying Party to consent to, such judgment or settlement and the Indemnifying Party does not respond in writing thereto

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within 15 days after receipt of such notice and request, the Indemnifying Party shall be deemed to have consented to the entry of such judgment or settlement. The Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (not to be unreasonably withheld); provided however, that if the Indemnified Party notifies the Indemnifying Party in writing of the material terms of, and requesting the Indemnifying Party to consent to, such judgment or settlement and the Indemnifying Party does not respond in writing thereto within 15 days after receipt of such notice and request, the Indemnifying Party shall be deemed to have consented to the entry of such judgment or settlement.

(d) In the event none of the Indemnifying Parties assumes and conducts the defense of a Third Party Claim not involving Taxes in accordance with subsection (b) above, or in the event of a Third Party Claim involving Taxes, (i) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner it reasonably and in good faith may deem appropriate after consultation with, and (subject to the provisos contained in Section 10.4(c) above) the consent of, the Indemnifying Party in connection therewith (which consent shall not be unreasonably withheld), (ii) the Indemnifying Party will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys’ fees and expenses), (iii) the Indemnifying Party may retain separate co-counsel at its sole cost and expense and participate in the defense of such Third Party Claim, and (iv) the Indemnifying Party will remain responsible for any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, or otherwise relating to the Third Party Claim to the fullest extent provided in this Section 10.

10.5 Characterization of Adverse Consequences. All indemnification payments under this Article 10 by or on behalf of Sellers shall be deemed adjustments to the Merger Share Consideration.

10.6 Other Remedies and Provisions. The Parties specifically acknowledge and agree that monetary damages will not be an adequate remedy for a breach of any of the restrictive covenants contained in Section 9.3 hereof, and that irreparable injury will result to Buyer or the Subsidiaries or their successors in interest in the event of any such breach. Accordingly, Sellers agree that Buyer, the Subsidiaries, and their successors in interest shall be entitled to equitable relief in any court of competent jurisdiction, including, without limitation, a temporary or permanent injunction, restraining and enjoining Sellers, or any Person with which any of them is associated or by which any of them is employed, from further violations of such provisions, without the need to post any security or bond, and in addition to whatever other remedies at Law or in equity or otherwise Buyer may have.

10.7 Recoupment From Merger Consideration Shares. (a) The Parties agree that any indemnification to which Buyer is entitled under this Agreement or any Net Worth Merger Consideration Adjustment shall be satisfied as a setoff against the Merger Consideration Shares. Further, if an Indemnification Event (in excess of the Indemnification Threshold), a claim under Section 9.7 or a Net Worth Merger Consideration Adjustment Event is pending at a time when Buyer is required to deliver any of the Merger Consideration Shares to Sellers, then Buyer shall have the right, upon notice to the Sellers’ Representative, to withhold Merger Consideration Shares from delivery to Sellers, including Private Closing Shares which Sellers are required to deliver to Buyer during the Restriction Period (“Holdback”), equal to (i) in the case of an Indemnification Event (in excess of the Indemnification Threshold) or a claim under Section 9.7, the total amount for which Sellers may become liable as a result thereof, until final determination of the pending claims, and (ii) in the case of a Net Worth Merger Consideration Adjustment Event, the total amount for which Sellers may become liable as a result thereof to the extent payable from the Private Initial Deferred Shares, Private Closing Shares or Earnout Shares, as the case may be, in accordance with Section 2.8(b)(iii).

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(b) Further, if one or more Indemnification Events (in excess of the Indemnification Threshold) or claims under Section 9.7 are pending during the Restriction Period and Buyer in good faith determines that the Private Initial Deferred Shares are insufficient in amount to cover the amount of claims for which Sellers may become liable, then upon notice to the Sellers, Sellers shall deliver to Buyer, as a Holdback, such number of Private Closing Shares as Buyer in good faith determines are sufficient to cover the amount for which Sellers may become liable until final determination of the pending claims. In addition, if a Net Worth Merger Consideration Adjustment Event is pending during the Restriction Period, then upon notice to the Sellers, Sellers shall deliver to Buyer, as a Holdback, such number of Private Closing Shares sufficient to cover the amount for which Sellers may become liable as a setoff from the Private Closing Shares until final determination of the pending claims.

(c) The amount of Merger Consideration Shares held back by Buyer shall be determined in good faith by Buyer, not to exceed the good faith dollar estimate of any Adverse Consequences Buyer may incur as a result of the breach underlying such claim. Merger Consideration Shares shall be held back (and applied to the setoff, if any) in the following order: first, from the Private Initial Deferred Shares, second, from the Private Closing Shares, and then from the Earnout Shares.

(d) For purposes of determining the number of the Merger Consideration Shares which Buyer may setoff against in satisfaction of Indemnification Events or claims under Section 9.7 which are finally determined, the Merger Consideration Shares shall be valued 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 Section 10. The number of the Merger Consideration Shares which Buyer may setoff against in satisfaction of a Net Worth Merger Consideration Adjustment shall be determined in accordance with Section 2.8.

(e) As and when there is a final determination of pending claims or a Net Worth Merger Consideration Adjustment Event, and application of any setoff, any remaining Merger Consideration Shares shall be promptly released from the Holdback.

(f) Other than in the case of fraud, the setoff and/or Holdback of the Merger Consideration Shares pursuant to this Section 10.7 shall be the sole and exclusive legal remedy (i.e. other than equitable remedies) of Buyer for the breach of any and all representations and warranties of the Sellers contained in this Agreement.