EXHIBIT 10.2

 

--------------------------------------------------------------------------------

 

PARTICIPATION AGREEMENT

 

By and Among

 

GLOBO COMUNICAÇÕES E PARTICIPAÇÕES S.A.,

 

THE NEWS CORPORATION LIMITED

 

and

 

THE DIRECTV GROUP, INC.

 

Dated as of October 8, 2004

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

PARTICIPATION AGREEMENT, dated as of October 8, 2004, by and among Globo
Comunicações e Participações S.A., a sociedade anônima, The News Corporation
Limited, an Australian corporation and The DirecTV Group Inc., a Delaware
corporation (formerly known as Hughes Electronics Corporation). Capitalized
terms used herein without definition shall have the meaning set forth in, and
shall be construed and interpreted in accordance with, Annex A.

 

W I T N E S S E T H

 

A. Globo and News, together with Liberty, indirectly own and operate Sky Brasil,
which provides DTH subscription programming services in Brazil. As of the date
hereof, Globo, News and Liberty own directly or indirectly approximately 40.3%,
49.7% and 10%, respectively, of the registered capital of Sky Brasil, except
that such ownership percentages do not reflect the conversion into equity of any
unconverted or uncapitalized Quotaholder Funding (including without limitation
Quotaholder Funding that News or any Affiliate thereof has made to Sky Brasil in
lieu of Quotaholder Funding by Globo or any Affiliate thereof).

 

B. News is subject to certain non-compete covenants contained in Section 6.6 of
the Master Agreement, Section 8.1 of the Sky Brasil Quotaholders Agreement and
Section 1 of the Schedule of General Terms to the MCOP MOU (collectively, the
“Covenants”), and has requested from Globo a waiver of such covenants with
respect to its acquisition in December 2003 of an indirect 34% equity interest
in DirecTV and the present and continuing ownership by News or any of its
Affiliates of two competing DTH platforms pursuant to the common ownership of
Sky Brasil and DTV Brasil (the “DirecTV Acquisition”). As a result of the
DirecTV Acquisition, News indirectly owns equity interests in DTVLA and DTV
Brasil, a competing DTH platform to Sky Brasil operating in Brazil.

 

C. In connection with the foregoing, subject to the terms and conditions hereof,
(i) News desires to assume certain financial and other obligations relating to
Sky Brasil, MCOP and other related News and Globo ventures as provided herein
and in the Sky Purchase Agreement; (ii) News and Globo desire to make certain
changes to their existing arrangements regarding Sky Brasil, including pursuant
to the Amended Sky Brasil Quotaholders Agreement and certain other agreements
entered into as of the date hereof; and (iii) News, DirecTV and Globo desire to
agree on the terms and conditions for the combination of Sky Brasil and DTV
Brasil, including with respect to their common ownership, governance and
operation and to the migration of the subscribers of the DTV Brasil platform to
Sky Brasil as the surviving platform.

 

D. In order to effect the proposed combination of Sky Brasil and DTV Brasil,
News and Globo, together with DirecTV, DTVLA and GLA, have entered into a
Combination Agreement as of the date hereof. Upon the occurrence of the Closing

 

1

--------------------------------------------------------------------------------

thereunder, subject to the terms and conditions therein, DirecTV will cause GLA
to contribute all of its equity interests in TV Capital to Sky Brasil in
exchange for equity interests in Sky Brasil. At the Closing, Affiliates of
Globo, News (or DirecTV, in the event that News shall have already transferred
its entire interest in Sky Brasil to DirecTV) and, if applicable, Liberty,
holding direct interests in Sky Brasil will enter into the Closing Sky Brasil
Quotaholders Agreement, relating, among other things, to the governance and
funding of Sky Brasil and the Combined Businesses.

 

E. News, DirecTV and Globo desire to agree to certain rights and obligations
that will apply if the Closing under the Combination Agreement does not occur
within certain time periods described herein.

 

F. In connection with the foregoing transactions contemplated by the Parties,
News and Globo have agreed to certain exchange and transfer rights applicable to
their interests in Sky Brasil under the Amended Sky Brasil Quotaholders
Agreement and, following Closing, the Closing Sky Brasil Quotaholders Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made herein, and of the mutual benefits to be
derived herefrom, the parties hereto agree as follows:

 

1. Waiver.

 

1.1 Temporary Waiver. From the date hereof until the earlier to occur of (a) the
date on which the Release and Waiver becomes effective pursuant to Section 1.2
or (b) the date on which the waiver and covenant described herein are deemed
automatically revoked pursuant to Section 1.3, Globo, on its own behalf and on
behalf of the other members of the Globo Group party to the agreements
containing the Covenants, hereby, subject to any revocation pursuant to Section
1.3, (x) fully waives the applicability of the Covenants to the DirecTV
Acquisition, and (y) covenants that it will not commence any legal proceedings
(in court, arbitration or any other forum) against News or any of its Affiliates
in connection therewith to the same extent, in both cases (x) and (y), as if the
Release and Waiver were in effect (the “Temporary Waiver”).

 

1.2 Release and Waiver. Simultaneously with the execution and delivery of this
Participation Agreement, Globo and News shall execute and deliver the Release
and Waiver, which shall only become effective as set forth herein. The Release
and Waiver shall automatically become effective upon the earlier to occur of (a)
the Closing and receipt of all Required Approvals, (b) the Exchange Rights
becoming effective pursuant to Section 1.4(a), (c) the Exchange Rights becoming
effective pursuant to Section 1.4(b) and (d) any cure of the breach of the
Covenants resulting from the DirecTV Acquisition in accordance with the publicly
announced Cure Plan. Subject to Section 1.4(b), in the event that the Temporary
Waiver is deemed to be automatically

 

2

--------------------------------------------------------------------------------

revoked pursuant to Section 1.3, the Release and Waiver shall automatically
terminate without having become effective and neither party thereto shall have
any right or obligation thereunder.

 

1.3 Remedies; Expiry of Waiver. In the event the conditions described in any of
clauses (a), (b) or (c) (except for (c)(y)) below apply, then (i) the Temporary
Waiver shall be deemed to be automatically revoked and no longer have any force
or effect and (ii) Globo and the other members of the Globo Group shall have the
remedies set forth in the applicable clause below. Subject to Section 1.4(b),
the rights and remedies of Globo and the Globo Group set forth in this Section
1.3 (including any exercise thereof) shall not limit the rights of Globo and the
other members of the Globo Group to damages under law, equity or otherwise with
respect to any breach by News or any of its Affiliates of the Covenants, and all
such rights are expressly reserved.

 

(a) Effective January 1, 2005, if (x) the Required Approvals have been received
or waived but the Closing has not occurred for a reason other than failure to
meet the conditions specified in clauses (B) and (C) of the definition of
Specified Closing Conditions and (y) either (1) News, DirecTV or any of their
respective Affiliates has a Competing Interest in a Competing Platform or (2)
News, DirecTV and their respective Affiliates no longer have a Competing
Interest in a Competing Platform as a result of a breach of any obligation of
News, DirecTV or any of their respective Affiliates under any Transaction
Agreement, then the following remedies shall apply:

 

(i) At Globo’s request (the “Disposition Right”), News shall, and shall cause
its Affiliates (including, without limitation, DirecTV and its Affiliates, and
Sky Brasil and its Controlled Affiliates) to promptly dispose of any Competing
Interest in a Competing Platform; provided that this Disposition Right (A) may
not be exercised by Globo prior to January 1, 2007 if Globo has exercised any of
its Transfer Rights (other than Transfers within the Globo Group, pursuant to a
pledge or hypothecation prior to any foreclosure and sale, as payment on any
indemnity obligation or in accordance with Sections 4.4 through 4.7 of the
Amended Sky Brasil Quotaholders Agreement) or its Exchange Rights pursuant to
Section 1.3(b) and (B) may not be exercised at all if a Globo Transfer Event has
occurred.

 

(ii) All non-competition covenants applicable to the Globo Group, and all
obligations of any member of the Globo Group to provide Content to Sky Brasil on
an exclusive basis (but for the avoidance of doubt, none of the rights of any
member of the Globo Group to be an exclusive provider) under this Participation
Agreement, any other Transaction Agreement, the Agency Agreement, any Related
Agency Agreement or otherwise shall automatically expire, and, without limiting
the generality of the foregoing, there shall be no

 

3

--------------------------------------------------------------------------------

further restriction on any member of the Globo Group with regard to offering
Content to, or owning an interest in or managing, any other DTH platform.

 

(iii) Until the earlier to occur of (A) the date on which each of News, DirecTV
and their respective Affiliates no longer has a Competing Interest in a
Competing Platform and (B) a Globo Transfer Event, Globo’s consent shall be
required to hire or fire the President of Sky Brasil, as set forth in Section
3.7(a)(xv) of the Amended Sky Brasil Quotaholders Agreement.

 

(b) Effective January 1, 2006, and in addition to any remedies otherwise
available pursuant to this Section 1.3, if (x) the Required Approvals have been
received or waived but the Closing has not occurred for a reason other than
failure to meet the conditions specified in clauses (B) and (C) of the
definition of Specified Closing Conditions and (y) either (1) News, DirecTV or
any of their respective Affiliates has a Competing Interest in a Competing
Platform that is not as of January 1, 2006 the subject of an ongoing Required
Disposition or (2) News, DirecTV and their respective Affiliates no longer have
a Competing Interest in a Competing Platform as a result of a breach of any
obligation of News, DirecTV or any of their respective Affiliates under any
Transaction Agreement, the following remedy shall apply:

 

(i) Upon the effective termination of the Combination Agreement, Globo and each
other applicable member of the Globo Group shall have, with immediate effect,
the right to exercise Exchange Rights on the terms set forth in the Exchange
Rights Agreement; provided that if prior to January 1, 2006 Globo gives notice
hereunder that it expects to exercise the Exchange Rights effective as of
January 1, 2006 if the Combination Agreement is terminated pursuant to Section
7.1(a)(iii) thereof, the Parties shall, upon request by a member of the Globo
Group, cause the commencement of the valuation procedures set forth in Article 3
of the Exchange Rights Agreement in a sufficiently timely manner during 2005
such that the closing of such exercise of Exchange Right can occur as early as
January 2, 2006.

 

(c) Effective on the later of (i) January 1, 2006 or April 1, 2006, in the event
that on January 1, 2006, the Parties reasonably expect to obtain the Required
Approvals and effect the Closing within 90 days, or (ii) the Announced Cure
Date, in the event that DirecTV publicly announces a Cure Plan upon termination
of the Combination Agreement, and in addition to any other remedies that may be
available pursuant to Section 1.3(b) above, if (x) the Closing has not occurred
for any reason (whether or not due to a failure to meet a Specified Closing
Condition) and (y) in the case of clause (i) below only, either (1) News,
DirecTV or any of their respective Affiliates has a Competing Interest in a
Competing Platform or (2) News, DirecTV and their respective Affiliates no
longer have a Competing Interest in a Competing Platform as a result of a

 

4

--------------------------------------------------------------------------------

breach of any obligation of News, DirecTV or any of their respective Affiliates
under any Transaction Agreement, then the following remedies shall also apply:

 

(i) The remedies set forth in clauses (i) through (iii) of Section 1.3(a) shall
apply, notwithstanding the failure to meet any Specified Closing Condition.

 

(ii) Upon termination of the Combination Agreement, Globo, News and each of
their respective Affiliates shall have the right to exercise the Transfer Rights
on the terms set forth in the Amended Sky Brasil Quotaholders Agreement.

 

(d) For the avoidance of doubt, News, DirecTV and their respective Affiliates
shall be deemed to hold a Competing Interest in a Competing Platform (including
for purposes of this Section 1.3 and Section 3.2) even if such Competing
Interest is held through Sky Brasil or DTV Brasil, except to the extent
permitted by the Amended Sky Brasil Quotaholders Agreement or the Closing Sky
Brasil Quotaholders Agreement, as applicable.

 

1.4 Exchange Rights.

 

(a) In the event the Closing occurs prior to receipt of all Required Approvals,
the Exchange Rights shall become effective immediately upon notification by
Globo to News at any time during the 12 months following Closing that the
Release and Waiver is effective.

 

(b) If, on January 1, 2006, (x) the Closing has not occurred because of a
failure to meet a Specified Closing Condition, (y) News, DirecTV and their
respective Affiliates no longer have a Competing Interest in a Competing
Platform (other than as a result of a breach of Section 8.6) and (z) the
Exchange Rights and the Release and Waiver are not already effective, then, upon
notice by News to Globo at any time during the following 12 months that the
Exchange Rights are immediately effective, the Release and Waiver shall become
immediately effective, it being understood that in such case, the remedies set
forth in Section 1.3 shall continue to be available except for the remedies set
forth in Section 1.3(a)(ii) and (iii). If, after the expiry of such 12 month
period, News fails to provide notice to Globo that the Exchange Rights are
immediately effective, the Release and Waiver shall automatically terminate
without having become effective and neither party thereto shall have any right
or obligation thereunder.

 

(c) The Exchange Rights shall also become effective (i) upon Closing and receipt
of all Required Approvals, (ii) as set forth in Section 1.3(b), or (iii) upon
News ceasing to be in violation of the Covenants due to the DirecTV Acquisition
under the terms of a Cure Plan, provided that, in the case of this clause (iii)
so long as News is

 

5

--------------------------------------------------------------------------------

seeking Governmental Approval to effect the News/DirecTV Transfer, the Exchange
Rights shall not become effective until the date on which (1) approval from each
of ANATEL and CADE (in both cases to the extent required) has been obtained to
effect the News/DirecTV Transfer or (2) News, DirecTV or any of their respective
Controlled Affiliates fails to use commercially reasonable efforts to effect
such transfer in accordance with applicable Law, including by failing to take
any necessary legal action to obtain such approvals.

 

(d) Notwithstanding anything to the contrary in this Section 1.4, no Exchange
Right shall be effective prior to January 1, 2006.

 

1.5 PanAmSat Release and DTH Techco Releases. No later than January 1, 2005,
News shall promptly cause: (A) PanAmSat to execute and deliver the PanAmSat
Release; (B) each of the beneficiaries of the Globo guarantees of the DTH Techco
Financing Agreements to execute and deliver the DTH Techco Releases; except that
News’ obligation to deliver DTH Techco Releases with respect to such DTH Techco
Financing Agreements that terminated prior to January 1, 2005 shall be limited
to having used its commercially reasonable efforts to obtain such DTH Techco
Releases, so long as it continues to use commercially reasonable efforts until
June 1, 2005 with respect to the DTH Techco Releases not obtained by January 1,
2005.

 

2. Relief from Obligations. Effective immediately and irrevocably:

 

2.1 Sky Brasil, MCOP and DTH Techco Indemnification. News shall defend,
indemnify, hold harmless and pay and reimburse Globo and its Affiliates with
respect to any Losses relating to any obligation of Globo or any of its
Affiliates that was, is or becomes due:

 

(a) under the Sky Brasil Transponder Agreements and the MCOP Transponder
Agreements, except for the PanAmSat Settlement Amount (which shall be paid in
accordance with Section 2.3);

 

(b) under the DTH Techco Financings; and

 

(c) all other Losses (including without limitation funding obligations and other
Losses arising or resulting from or in connection with any partnership or
membership interest held by Globo or any of its Affiliates) relating to:

 

(i) MCOP and its subsidiaries (including but not limited to Losses under the
MCOP Agreements);

 

(ii) DTH Techco and its subsidiaries (including but not limited to Losses under
the DTH Techco Financing Agreements); and

 

6

--------------------------------------------------------------------------------

(iii) Sky Partners, Programco and Serviceco and any subsidiaries of any of the
foregoing;

 

provided, however, that, in the case of Section 2.1(c), News shall not be
obligated to indemnify Globo or its Affiliates for any such Losses resulting
from any allocation for U.S. income tax purposes of any item of income, gain,
loss, deduction or credit from MCOP, DTH Techco, Sky Partners, Programco or
Serviceco with respect to the period from the date Globo or any of its
Affiliates became an owner of the applicable entity through December 31, 2003,
so long as DTH USA, Inc. is not deemed the “tax matters partner” for any such
entity for any year after 2003. The indemnification obligations of News pursuant
to this Section 2.1 shall be subject to Section 9.2.

 

2.2 DTH USA Inc. DirecTV and Globo have agreed to enter into an MCOP Purchase
and Sale Agreement pursuant to which Globo will transfer and sell to DirecTV its
indirect interests in DTH USA, Inc. (or MCOP, in certain circumstances), DTH
Techco and Sky Partners, subject to the certain terms and conditions to be
included therein.

 

2.3 PanAmSat Payment. News and Globo shall use commercially reasonable efforts
to negotiate with PanAmSat to reduce the $12,200,000 in principal and all
interest accruing thereon (collectively, the “PanAmSat Claim Amount”) due by
MCOP and guaranteed by Globo under the MCOP Transponder Agreements. The amount
that PanAmSat agrees to accept in full satisfaction of the PanAmSat Claim Amount
shall constitute the “PanAmSat Settlement Amount.” Upon request by Globo, News
shall pay to PanAmSat on behalf of Globo the lesser of (i) the PanAmSat
Settlement Amount and (ii) $3,600,000. If the PanAmSat Settlement Amount exceeds
$3,600,000, such excess shall be paid to PanAmSat by Globo and News, provided
that Globo’s share shall not exceed its Closing Percentage Interest in Sky
Brasil.

 

2.4 Termination of Certain Agreements. The Master Agreement and all prior
agreements between News and Globo with respect to the funding of Sky Brasil are
hereby terminated in all respects and no party thereto, or any of its directors,
officers, representatives, stockholders or Affiliates shall remain liable
thereunder, except in each case in connection with any breach of Section 6.6 of
the Master Agreement prior to the date hereof, and except that the R$7,570,994
due from Sky Brasil and its Affiliates to Globo and its Affiliates with respect
to programming that is owned by any member of the Globo Group and that was
provided to Sky Brasil during July 2003, together with interest thereon (which
interest has accrued and shall continue to accrue at the IGPM rate from and
after August 15, 2003), shall be payable by Sky Brasil to Globo or its
designated Affiliate on or prior to February 28, 2005 without any right of
offset against any other amount owed by Globo or any Affiliate thereof to Sky
Brasil or any Affiliate thereof.

 

7

--------------------------------------------------------------------------------

3. Combination of Platforms.

 

3.1 Funding of Sky Brasil. News shall indemnify, hold harmless and pay and
reimburse Globo and its Affiliates against any Loss arising or resulting from or
in connection with any claim by a Sky Brasil Quotaholder with respect to any Sky
Brasil Funding Obligation occurring prior to the Signing Date. The
indemnification obligations of News pursuant to this Section 3.1 shall be
subject to Section 9.2.

 

3.2 Business Covenant. From and after the execution of this Participation
Agreement and until the second anniversary of a Globo Transfer Event:

 

(a) Neither News, DirecTV, nor any of their respective Affiliates (including
without limitation, until the Closing, Sky Brasil and DTV Brasil, respectively),
will directly or indirectly own an interest in or manage any Content
distribution system (other than, in the case of DTH Content distribution systems
only, Sky Brasil or, so long as the Temporary Waiver or the Release and Waiver
is in effect, DTV Brasil) in or specifically targeted to Brazil by means of DTH,
cable, Internet or broadcast, provided that News or any of its Affiliates shall
be allowed to own interests in Internet sites that are not specifically designed
to serve, and are not specifically marketed to, the Brazilian market, but that
are accessible to Brazilians via the Internet, including, without limitation,
the Fox News and Canal Fox websites, and provided, further, that any member of
the Sky Brasil Group shall have the right to own an interest in DTV Brasil.
Notwithstanding the foregoing, News and its Affiliates and the Sky Brasil Group
shall be permitted to own an indirect interest in a Competing Cable Platform if:

 

(i) News or any of its Affiliates, as applicable, acquires and holds such
interest after the date hereof solely through its acquisition of an ownership
interest in a Competing Cable Owner and fully divests of any interest in such
Competing Cable Platform (such that neither News nor any Affiliate thereof holds
any interest in such Competing Cable Platform) within two years of the date of
acquisition; or

 

(ii) (x) Globo, TV Globo and their respective Affiliates do not own any direct
or indirect equity interest whatsoever or have any management right or
management involvement in any Competing Cable Platform and (y) immediately upon
such acquisition, the Competing Cable Platform becomes bound without restriction
by the same terms as are set forth in the Agency Agreement and the Related
Agency Agreements, as in effect immediately prior to such acquisition (the
“Competing Cable Platform Agency Agreement”).

 

In order for the acquisition of a Competing Cable Platform to fall within the
exception contained in Section 3.2(a)(ii), at the time of such acquisition, any
necessary consents to the Competing Cable Platform Agency Agreement shall have
been obtained.

 

8

--------------------------------------------------------------------------------

(b) Neither Globo, TV Globo nor any of their respective Affiliates or any other
member of the Globo Group will directly or indirectly own an interest in or
manage any DTH platform other than Sky Brasil or, following the Closing, DTV
Brasil, in or specifically targeted to Latin America.

 

3.3 Transponder Agreements. News shall cause Sky Brasil to enter into a new
Transponder Agreement on Arms-Length Terms, which such new Transponder Agreement
(i) shall not in any case require Globo or any Affiliate thereof to issue any
guarantee or have any other financial obligation in connection therewith and
(ii) shall give Globo and its Affiliates the right to use such transponders to
feed signals to cable head ends and other facilities developed for the
distribution of video and audio programming, and, subject to existing
restrictions, to use excess capacity for their own needs, in each case in this
clause (ii) on a cost basis and provided that Sky Brasil has such rights under
such Transponder Agreement.

 

3.4 Migration. Following the Closing, News and DirecTV shall use commercially
reasonable efforts to complete the migration of DTV Brasil subscribers to Sky
Brasil as the surviving platform, and otherwise effect the Migration, within two
years of Closing.

 

4. Certain Transfers and Exchanges of Ownership Interests.

 

4.1 Permitted News Transfer. News shall have the right to, or to cause the
applicable member of the News Group to, transfer to DirecTV or its designated
Affiliate the aggregate equity interest of the News Group in Sky Brasil
(including, without limitation, the 2003 Promissory Note and all other rights to
receive Quotas in connection with any uncapitalized or unconverted Quotaholder
Funding), representing the aggregate Percentage Interest of the News Group in
Sky Brasil at such time, provided that concurrently with any such transfer,
DirecTV assumes the obligations set forth in clauses (a) through (b) below of
this Section 4.1 (including without limitation its agreement to remain
responsible for the performance in full of such obligations by any other member
of the DirecTV Group in the event any such member directly assumes any such
obligation). In the event of any such transfer to, and assumption by, DirecTV or
its designated Affiliate, News shall have none of the rights, and shall be
released from the obligations, set forth below (except that News shall not be
released from any obligation or liability relating to any prior breach thereof
by any member of the News Group):

 

(a) the rights and obligations set forth in Sections 2.1, 2.3, 3.1, 3.3, 3.4 and
8.8; and

 

(b) the rights and obligations of News or its applicable Affiliate under the
applicable Sky Brasil Quotaholders Agreement as a quotaholder of Sky Brasil,
except as set forth therein;

 

9

--------------------------------------------------------------------------------

provided that News shall not be released from any, and shall continue to be
bound by each, other provision of this Participation Agreement, the Combination
Agreement and the other Transaction Agreements to which it is a party, unless
otherwise expressly set forth therein.

 

5. Representations and Warranties of Globo. Globo represents and warrants to
News and DirecTV as of the date hereof as follows:

 

5.1 Authorization, Etc. Globo (and each Affiliate thereof that is or will be a
party to any Related Agreement) has full corporate or limited liability company
power and authority to execute and deliver this Participation Agreement and the
Related Agreements to which it (or such Affiliate, as applicable) is or will be
a party, to perform its (or such Affiliate’s, as applicable) obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Participation Agreement and the
Related Agreements to which Globo (or any such Affiliate, as applicable) is or
will be a party, the performance of Globo’s (or such Affiliate’s, as applicable)
obligations hereunder and thereunder, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all requisite
corporate or limited liability company action of Globo (or such Affiliate, as
applicable). Globo has duly executed and delivered this Participation Agreement,
and Globo and each such Affiliate has (or, on any other relevant date of
execution and delivery contemplated by this Participation Agreement, will have)
duly executed and delivered the Related Agreements to which it is or will be a
party. This Participation Agreement and the Related Agreements constitute (or
will constitute, when executed and delivered on the relevant date) the legal,
valid and binding obligation of Globo or such Affiliate, enforceable against
Globo or such Affiliate in accordance with their respective terms.

 

5.2 No Conflicts, Etc.

 

(a) Except as set forth in Schedule 5.2, the execution, delivery and performance
of this Participation Agreement and the Related Agreements by Globo (and each of
its Affiliates that is or will be a party to any Related Agreement) and the
consummation of the transactions contemplated hereby and thereby do not and will
not violate, conflict with, contravene, result in a violation or breach of or
default under (with or without the giving of notice or the lapse of time or
both), create in any other Person a right or claim of termination, amendment,
modification, acceleration or cancellation of, or result in the creation of any
Lien (or any obligation to create any Lien) upon any of the properties or assets
of Globo or any such Affiliate under, (i) any provision of any of the
Organizational Documents of Globo or such Affiliate or (ii) any Contract, or any
other agreement or instrument to which Globo or such Affiliate is a party or by
which their respective properties or assets may be bound, except, in the case of
this clause (ii), for violations, breaches and defaults that, individually and
in the aggregate, would not reasonably be expected to have or result in a
Material Adverse Effect on Globo and such Affiliates, taken as a whole.

 

10

--------------------------------------------------------------------------------

(b) Except as set forth on Schedule 5.2(b), no Governmental Approval or other
Consent is required to be obtained or made by Globo or such Affiliate in
connection with the execution, delivery and performance of this Participation
Agreement or any Related Agreement or the consummation of the transactions
contemplated hereby or thereby, except for Consents the failure of which to be
made or obtained, individually and in the aggregate, would not reasonably be
expected to have or result in a Material Adverse Effect on Globo.

 

(c) The Transaction Agreements are the only agreements to which Globo, any of
its Affiliates or, to the Knowledge of Globo, any member of the Sky Brasil Group
is a party with respect to the transactions contemplated thereby, other than (i)
Contracts that do not, and will not, have any material adverse effect upon any
right or obligation of News, DirecTV or any of their respective Affiliates under
any Transaction Agreement and (ii), as otherwise agreed.

 

5.3 Litigation. Except as set forth in Schedule 5.3, there is no Litigation
pending or, to the Knowledge of Globo or its Affiliates, threatened by, against
or affecting Globo or any of its Affiliates, or any of their respective
properties or assets, or any outstanding Orders against any such Persons, that,
individually or in the aggregate (in the case of any such Litigation, if
adversely determined), would reasonably be expected to have or result in a
material adverse effect on the ability of Globo or its Affiliates to perform its
obligations under or otherwise comply with this Participation Agreement or any
Related Agreement.

 

6. Representations and Warranties of News.

 

News represents and warrants to Globo as of the date hereof as follows:

 

6.1 Authorization, Etc. News (and each Affiliate thereof that is or will be a
party to any Related Agreement) has full corporate or limited liability company
power and authority to execute and deliver this Participation Agreement and the
Related Agreements to which it (or such Affiliate, as applicable) is or will be
a party, to perform its (or such Affiliate’s, as applicable) obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Participation Agreement and the
Related Agreements to which News (or any such Affiliate, as applicable) is or
will be a party, the performance of News’ (or any such Affiliate’s, as
applicable) obligations hereunder and thereunder, and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized by all
requisite corporate or limited liability company action of News (or such
Affiliate, as applicable). News has duly executed and delivered this
Participation

 

11

--------------------------------------------------------------------------------

Agreement, and News and each such Affiliate has (or, on any other relevant date
of execution and delivery contemplated by this Participation Agreement, will
have) duly executed and delivered the Related Agreements to which it is or will
be a party. This Participation Agreement and the Related Agreements constitute
(or will constitute, when executed and delivered on the relevant date) the
legal, valid and binding obligation of News or such Affiliate, enforceable
against News or such Affiliate in accordance with their respective terms.

 

6.2 No Conflicts, Etc.

 

(a) The execution, delivery and performance of this Participation Agreement and
the other Related Agreements by News (and each of its Affiliates that is or will
be party to any Related Agreement) and the consummation of the transactions
contemplated hereby and thereby do not and will not violate, conflict with,
contravene, result in a violation or breach of or default under (with or without
the giving of notice or the lapse of time or both), create in any other Person a
right or claim of termination, amendment, modification, acceleration or
cancellation of, or result in the creation of any Lien (or any obligation to
create any Lien) upon any of the properties or assets of News or such Affiliate
under, (i) any provision of any of the Organizational Documents of News or such
Affiliate or (ii) any Contract, or any other agreement or instrument to which
News or such Affiliate is a party or by which their respective properties or
assets may be bound, except, in the case of this clause (ii), for violations,
breaches and defaults that, individually and in the aggregate, would not
reasonably be expected to have or result in a Material Adverse Effect on News
and such Affiliates, taken as a whole.

 

(b) Except as set forth on Schedule 6.2(b), no Governmental Approval or other
Consent is required to be obtained or made by News or such Affiliate in
connection with the execution, delivery and performance of this Participation
Agreement or other Related Agreement or the consummation of the transactions
contemplated hereby or thereby, except for Consents the failure of which to be
made or obtained, individually and in the aggregate, would not reasonably be
expected to have or result in a Material Adverse Effect on News.

 

(c) The Transaction Agreements are the only agreements to which News, any of its
Affiliates or, to the Knowledge of News, any member of the Sky Brasil Group is a
party with respect to the transactions contemplated thereby, other than (i)
Contracts that do not, and will not, have any material adverse effect upon any
right or obligation of Globo, DirecTV or any of their respective Affiliates
under any Transaction Agreement or any adverse effect upon any right or
obligation of Globo, DirecTV or any of their respective Affiliates under the
Agency Agreement or any Related Agency Agreement and (ii) as otherwise agreed.

 

12

--------------------------------------------------------------------------------

6.3 Litigation. Except as set forth in Schedule 6.3, there is no Litigation
pending or, to the Knowledge of News or its Affiliates, threatened by, against
or affecting News or any of its Affiliates, or any of their respective
properties or assets, or any outstanding Orders against any such Persons, that,
individually or in the aggregate (in the case of any such Litigation, if
adversely determined), would reasonably be expected to have or result in a
material adverse effect on the ability of News or its Affiliates to perform its
obligations under or otherwise comply with this Participation Agreement.

 

7. Representations and Warranties of DirecTV. DirecTV hereby represents and
warrants to Globo as of the date hereof as follows:

 

7.1 Authorization, Etc. DirecTV (and each Affiliate thereof that is or will be a
party to any Related Agreement) has full corporate or limited liability company
power and authority to execute and deliver this Participation Agreement and the
Related Agreements to which it (or such Affiliate, as applicable) is or will be
a party, to perform its (or such Affiliate’s, as applicable) obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Participation Agreement and the
Related Agreements to which DirecTV (or any such Affiliate) is or will be a
party, the performance of DirecTV’s (or such Affiliate’s, as applicable)
obligations hereunder and thereunder, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by all requisite
corporate or limited liability company action of DirecTV and such Affiliates.
DirecTV has duly executed and delivered this Participation Agreement, and
DirecTV and each such Affiliate has (or, on any other relevant date of execution
and delivery contemplated by this Participation Agreement, will have) duly
executed and delivered the other Related Agreements to which it is a party. This
Participation Agreement and the Related Agreements constitute (or will
constitute, when executed and delivered on the relevant date) the legal, valid
and binding obligation of DirecTV or such Affiliate, enforceable against DirecTV
or such Affiliate in accordance with their respective terms.

 

7.2 No Conflicts, Etc.

 

(a) The execution, delivery and performance of this Participation Agreement and
the Related Agreements by DirecTV (and, if applicable, its Affiliates) and the
consummation of the transactions contemplated hereby and thereby do not and will
not violate, conflict with, contravene, result in a violation or breach of or
default under (with or without the giving of notice or the lapse of time or
both), create in any other Person a right or claim of termination, amendment,
modification, acceleration or cancellation of, or result in the creation of any
Lien (or any obligation to create any Lien) upon any of the properties or assets
of DirecTV or such Affiliate under, (i) any provision of any of the
Organizational Documents of DirecTV or such Affiliate or (ii) any Contract, or
any other agreement or instrument to which DirecTV or such Affiliate is a party
or by which its respective properties or assets may be bound, except, in the
case of this

 

13

--------------------------------------------------------------------------------

clause (iii), for violations, breaches and defaults that, individually and in
the aggregate, would not reasonably be expected to have or result in a Material
Adverse Effect on DirecTV and such Affiliates, taken as a whole.

 

(b) Except as set forth on Schedule 7.2(b), no Governmental Approval or other
Consent is required to be obtained or made by DirecTV or such Affiliate in
connection with the execution, delivery and performance of this Participation
Agreement or other Related Agreement or the consummation of the transactions
contemplated hereby or thereby, except for Consents the failure of which to be
made or obtained, individually and in the aggregate, would not reasonably be
expected to have or result in a Material Adverse Effect on DirecTV.

 

(c) The Transaction Agreements are the only agreements to which DirecTV, any of
its Affiliates or, to the Knowledge of DirecTV, any member of the DTV Brasil
Group is a party with respect to the transactions contemplated thereby, other
than (i) Contracts that do not, and will not, have any material adverse effect
upon any right or obligation of Globo, News or any of their respective
Affiliates under any Transaction Agreement or any adverse effect upon any right
or obligation of Globo, News or any of their respective Affiliates under the
Agency Agreement or any Related Agency Agreement and (ii) as otherwise agreed.

 

7.3 Litigation. Except as set forth in Schedule 7.3, there is no Litigation
pending or, to the Knowledge of DirecTV or its Affiliates, threatened by,
against or affecting DirecTV or any of its Affiliates, or any of their
respective properties or assets, or any outstanding Orders against any such
Persons, that, individually or in the aggregate (in the case of any such
Litigation, if adversely determined), would reasonably be expected to have or
result in a material adverse effect on the ability of DirecTV or its Affiliates
to perform its obligations under or otherwise comply with this Participation
Agreement.

 

8. Other Covenants.

 

8.1 Public Announcements. No Party shall, or shall permit any of its Affiliates
(or in the case of the Sky Parties, Sky Brasil or any other member of the Sky
Brasil Group, and in the case of DirecTV, DTV Brasil or any other member of the
DTV Brasil Group), to issue any press release or make any public announcement in
respect of this Participation Agreement, any of the other Transaction Agreements
or the transactions contemplated hereby or thereby without the prior written
consent of News, DirecTV and Globo, except as required by applicable Law,
Governmental Authority or the rules or regulations of any stock exchange upon
which any securities of such party are listed. In the event of any such required
announcement, the announcing party, as far as practicable, shall provide News,
DirecTV and Globo with the proposed announcement reasonably in advance of making
such announcement and shall use commercially reasonable efforts to

 

14

--------------------------------------------------------------------------------

incorporate any comments made by such parties, as applicable, thereon.
Notwithstanding the foregoing, News and DirecTV shall publicly announce in
Brazil on the Signing Date the plans for the Migration (including, without
limitation, the identification of Sky Brasil as the surviving platform) subject
to the prior approval of Globo over the text of such announcement.

 

8.2 Confidentiality.

 

(a) Subject to this Section 8.2, the Parties acknowledge that the Existing
Confidentiality Agreements shall remain in full force and effect in accordance
with their terms, provided that (i) the terms of all obligations of the Parties
to each other under the Existing Confidentiality Agreements shall be deemed
extended until Closing and (ii) the Existing Confidentiality Agreements shall be
deemed amended to permit use of Evaluation Material (as defined therein) both
for evaluating and for consummating the transactions contemplated by the
Confidential Agreements, and each Party shall cause its Affiliates to comply
with the provisions of the Existing Confidentiality Agreements, as amended by
this Participation Agreement, as if each of them was party thereto. For the
purposes of this Section 8.2, Affiliates shall include Sky Brasil and DTV
Brasil, as appropriate.

 

(b) During the Interim Period, the confidentiality safeguards and procedures set
forth in Annex I shall also apply. During the Interim Period, Annex I shall
govern in the event of any conflict between Annex I and any other
confidentiality provisions applicable to the Parties.

 

(c) Each Party shall, and shall cause its Affiliates to (each, with respect to
Confidential Information disclosed or provided to it, a “Receiving Party”),
subject to the terms of this Section 8.2, keep confidential and not disclose
Confidential Information to any Person, and to use Confidential Information
solely for the purposes of performing its obligations under, and consummating
the transactions contemplated by, the Confidential Agreements. A Party (the
“First Party”) may disclose Confidential Information to the First Party’s
Affiliates and to those of its and its Affiliates’ Representatives who in each
case:

 

(i) has a need to know (but only to the extent that each has a need to know);
and

 

(ii) has agreed to be bound by the same confidentiality obligations contained
herein, provided that such First Party shall be responsible for any breach
hereunder by any such Affiliate or Representative.

 

15

--------------------------------------------------------------------------------

(d) The obligations of confidentiality under Section 8.2(c) do not extend to
Confidential Information that (whether before or after this Participation
Agreement is executed):

 

(i) is or becomes known or available to a Receiving Party on a non-confidential
basis from a third party, which third party is not prohibited from disclosing
such Confidential Information to the Receiving Party by any legal, contractual
or fiduciary obligation and which has represented to the Receiving Party (and
which the Receiving Party has no reason to disbelieve after due inquiry) that it
is entitled to disclose such information to the Receiving Party on such basis;

 

(ii) at the time of disclosure, is within the public domain or, after
disclosure, comes into the public domain, other than by a breach or breaches of
any obligation under this Section 8.2 or other confidentiality obligation of the
Receiving Party or any Affiliate or Representative thereof owed to any Party or
Affiliate thereof;

 

(iii) is required by Law or the rules or regulations of any securities exchange
to be disclosed, provided that the Party required to make such disclosure first
notifies and consults with the other Parties;

 

(iv) a Party wishes to disclose in good faith, with the prior written approval
of the non-disclosing Parties (which approval shall not be unreasonably
withheld), to: (A) bona fide prospective financiers in connection with any
proposal by such Party to finance any investment by it or its Affiliates in Sky
Brasil or DTV Brasil or, including in the case of Globo and its Affiliates,
pursuant to any Globo Monetization in accordance with clause (e)(iii) below; or
(B) a bona fide potential third-party assignees of such Party for purposes of a
permitted assignment to be made in accordance with any of the Confidential
Agreements to the extent reasonably necessary for such third party to determine
whether it desires to acquire such interest, provided that any information which
is disclosed pursuant to this Section 8.2(d)(iv) may only be disclosed if the
recipient executes a confidentiality agreement with all Parties hereto in a form
that is at least as restrictive as the terms of this Section 8.2 or the
disclosing party agrees to be responsible for any breach hereunder by any such
recipient.

 

(e) Notwithstanding anything in the Confidential Agreements or the Existing
Confidentiality Agreements to the contrary:

 

(i) in the event that any Party (the “Disclosing Party”) is requested in any
suit or proceeding or by any Governmental Authority to disclose any Confidential
Information, such Disclosing Party shall give the Party to which

 

16

--------------------------------------------------------------------------------

such Confidential Information relates (or, in the case of Confidential
Information relating to Sky Brasil, DTV Brasil or any of their respective
Controlled Affiliates, all the other Parties) prompt written notice so that the
applicable Party or Parties (each, an “Affected Party”) may seek an appropriate
order or other remedy protecting such Confidential Information from disclosure,
and such Disclosing Party will cooperate with each Affected Party, at such
Affected Party’s expense (or, as applicable, at the expense of Sky Brasil, DTV
Brasil or the applicable Controlled Affiliate thereof), to obtain such order or
remedy. If in the absence of any such order or remedy such Disclosing Party is
compelled to disclose the Confidential Information, or if the Affected Parties
waive their right to seek such order or remedy, the Disclosing Party may,
without liability under the Confidential Agreements or the Existing
Confidentiality Agreements, disclose that portion of the Confidential
Information that it is legally required to disclose, provided that (A) the
Disclosing Party gives written notice of the Confidential Information to be
disclosed as far in advance of its disclosure as is practicable and consults
with the Affected Parties (including in relation to the content of any such
disclosure), and (B) uses reasonable efforts to obtain assurances that
confidential treatment will be accorded to such Confidential Information.

 

(ii) Globo and its Affiliates may (after consultation with News, including as to
the content of any disclosure, to the extent such disclosure would otherwise be
restricted pursuant to this Section 8.2), without liability under any
Confidential Agreement or the Existing Confidentiality Agreements, disclose the
existence of the Confidential Agreements and the related negotiations, and all
or any part of the Confidential Agreements, to any or all of Globo’s creditors
in connection with the ongoing renegotiation of its debt obligations.

 

(iii) Globo and its Affiliates may, without liability under any Confidential
Agreement or the Existing Confidentiality Agreements, but subject to prior
written notice to News at least five (5) Business Days prior to such disclosure,
disclose the existence of this Agreement, and all or any part of this Agreement,
the Exchange Rights Agreement, the applicable Quotaholders Agreement and the
Articles of Association of the Company, in each case as it may be amended from
time to time, to any financial institution pursuant to a Globo Monetization,
provided that any information which is disclosed pursuant to this Section
8.2(e)(iii) may only be disclosed if the recipient executes a confidentiality
agreement with all Parties hereto in a form that is at least as restrictive as
the terms of this Section 8.2 or the disclosing party agrees to be responsible
for any breach hereunder by any such recipient.

 

(f) The provisions of this Section 8.2 shall not restrict Sky Brasil or DTV
Brasil from using any Confidential Information (other than Confidential
Information relating specifically to any Party or Affiliate thereof) to conduct
its business

 

17

--------------------------------------------------------------------------------

in the ordinary course, and shall not restrict the Parties and their Affiliates
from filing the Transaction Agreements (and any other agreement, document or
information requested by CADE or ANATEL) with CADE and ANATEL to the extent
required by CADE or ANATEL, as applicable. In the event that CADE or ANATEL
makes any Transaction Agreement or other Confidential Information publicly
available, such disclosure by CADE or ANATEL shall not result in the liability
of any Party hereunder for breach of this Section 8.2, and, in that case, such
Transaction Agreement or other information shall no longer constitute
Confidential Information.

 

(g) Notwithstanding anything to the contrary in the foregoing, the Parties
acknowledge that the applicable Quotaholders Agreements shall not constitute
Confidential Information and shall be made publicly available.

 

8.3 Reasonable Best Efforts; Governmental Approvals.

 

(a) Subject to Section 8.3(c), each of the Parties shall cooperate with one
another and use all reasonable best efforts to prepare all necessary
documentation (including furnishing all information required under the
communications and competition Laws of Brazil), to effect and obtain promptly
all applicable Governmental Approvals and notifications necessary to consummate
the transactions contemplated by this Participation Agreement and the other
Transaction Agreements. Each of the Parties shall provide the other Parties with
copies of all filings made by such Party or any of its Affiliates (and the Sky
Parties shall provide DirecTV with copies of filings made by members of the Sky
Brasil Group, and DirecTV shall provide the Sky Parties with copies of filings
made by members of the DTV Brasil Group) with any Governmental Authority and,
upon request, any other information supplied by such Party or any of its
Affiliates (or Sky Brasil or DTV Brasil, as applicable) to a Governmental
Authority, in each case in connection with this Participation Agreement or any
other Transaction Agreement and the transactions contemplated hereby or thereby.

 

(b) Subject to Section 8.3(c), the Parties will jointly determine who shall lead
all filings and conversations with, responses to, and all other communication
with the Governmental Authorities in Brazil relating to the consummation of the
transactions contemplated by this Participation Agreement or any other
Transaction Agreement. Each of the Parties shall: (i) consult with one another
prior to any filing or application relating to the transactions contemplated by
this Participation Agreement or any other Transaction Agreement, (ii) share all
relevant information relating to such filings and conversations, and (iii)
provide each other with advance notice of any meetings regarding such filings or
other communications and, at any other Party’s request, the opportunity to
participate in such meetings and conversations. Notwithstanding the foregoing,
nothing in this Section 8.3 shall be construed to restrict the ability of any
Party or any of its Affiliates to comply with applicable Laws (provided that the
other Parties, as far as practicable, are given reasonable notice and reasonable
ability to consult before any such compliance is effected).

 

18

--------------------------------------------------------------------------------

(c) Notwithstanding anything to the contrary in this Participation Agreement or
any other Transaction Agreement, none of the Parties shall be required to agree
to any restrictions on its business or that of any of its Affiliates or any
member of the DTV Brasil Group or the Sky Brasil Group in order to gain any
Governmental Approval necessary for the consummation of the transactions
contemplated hereby, or by any other Transaction Agreement. In the event that
any Governmental Authority proposes to impose any such restrictions or requires
concessions on the business of Sky Brasil, DTV Brasil or the Combined Businesses
in order to gain any Governmental Approval and such restrictions and
concessions, individually and in the aggregate, do not and will not, in Globo’s
good-faith view, directly or indirectly adversely affect or otherwise affect in
any material respect any member of the Globo Group (by including a position
inconsistent with any position taken by any member of the Globo Group to any
Governmental Authority) (collectively, the “Non-Globo Restrictions”), News shall
have the right to determine, in its reasonable discretion after consultation
with Globo, whether or not to accept such Non-Globo Restrictions, and shall
negotiate such Non-Globo Restrictions (but only so long and to the extent that
such restrictions and concessions continue, individually and in the aggregate,
to constitute Non-Globo Restrictions) with the relevant authorities on behalf of
the Parties, provided that Globo shall determine, in its sole discretion,
whether or not to accept, and shall negotiate, all restrictions and concessions
relating to Sky Brasil, DTV Brasil or the Combined Businesses to the extent any
such restriction or concession does not constitute a Non-Globo Restriction.

 

(d) The Parties further agree that each Party is fully and solely responsible
for the supply of any information relating to such Party or any of its
Affiliates requested by CADE (or any other Governmental Authority) in connection
with the filings hereunder, and that any penalty imposed by CADE under Law No.
8884/94 or by any other Governmental Authority for failure to provide such
information shall be borne by the Party that failed to comply with such law
which Party shall indemnify, promptly defend and hold the other Parties harmless
from any penalty or liability arising therefrom.

 

8.4 Further Assurances. From time to time, each Party shall execute and deliver
or cause to be executed and delivered such additional instruments, documents,
conveyances or assurances and take or cause to be taken such other actions as
shall be necessary, or otherwise reasonably be requested by any other Party, to
confirm and assure the rights and obligations provided for in this Participation
Agreement and any other Transaction Agreement and render effective the
consummation of the transactions contemplated hereby or thereby, or otherwise to
carry out the intent and purposes of this Participation Agreement and the other
Transaction Agreements. Each Party shall furnish to the other Parties such
reasonable assistance as such other Party may reasonably request in connection
with the foregoing.

 

19

--------------------------------------------------------------------------------

8.5 Actions by Affiliates/Affiliate Transactions.

 

(a) Where any provision of this Participation Agreement, the Combination
Agreement, the Amended Sky Brasil Quotaholders Agreement or the Closing Sky
Brasil Quotaholders Agreement indicates or requires that an Affiliate of News,
DirecTV or Globo shall take any specified action (or refrain from taking any
specified action), then, regardless of whether such Transaction Agreement
specifically provides that the applicable Party do so, the applicable Party
shall cause such Affiliate or Affiliates, as the case may be, to take or refrain
from taking such action (including, in the case of DirecTV, causing DTVLA or GLA
as its Affiliates to take or refrain from taking such action). Each Party shall
be responsible for the failure of any of its Affiliates to take or refrain from
taking any action as required by the applicable Transaction Agreement.
“Affiliates” as used in this Section 8.5 shall include Sky Brasil, DTV Brasil
and their respective Controlled Affiliates, as applicable, to the extent so
specified in any provision of such Transaction Agreement.

 

(b) For purposes of this Participation Agreement and any other Transaction
Agreement (other than the Combination Agreement), the obligation of Globo and
its Affiliates to cause Sky Brasil, DTV Brasil or any Controlled Affiliate
thereof to take or refrain from taking an action shall be limited to (i)
proposing, recommending and voting as a Quotaholder or shareholder at any
Quotaholder or shareholder meeting attended by Globo or Affiliate thereof or
(ii) if applicable, causing its designee director to propose, recommend and vote
at any board meeting attended by such designee director, in each case in support
of causing such entity to take or refrain from taking any action required by
this Participation Agreement or such Transaction Agreement. Notwithstanding the
above, any vote or approval by Globo pursuant to the antepenultimate sentence of
Section 13.12 of the applicable Quotaholders Agreement shall not constitute
approval for the purposes of this paragraph. This paragraph will also be
applicable to News and its Affiliates during the period in which Globo has a
veto right under the applicable Quotaholders Agreement with respect to the
hiring and firing of the President of Sky Brasil in accordance with Section
1.3(a)(iii) hereof, but only to the extent that Globo exercises its rights
thereunder to veto any hiring or firing proposed by News with respect to the
President of Sky Brasil. Each Sky Party to which this Section 8.5(b) applies
shall use commercially reasonable efforts to attend quotaholder or shareholder
meetings and to cause its designee director to attend board meetings.

 

8.6 Transfers of Equity Interests. Until the Closing or the termination of the
Combination Agreement, except for transfers to any assignee permitted under
Section 10.7 (which transfer shall be permitted but not required in the event of
any such assignment and provided such transfer is permitted under the terms of
any applicable quotaholders agreement or articles of association), (i) neither
News nor any of the DTV Parties shall, or shall permit any of their respective
Affiliates to, transfer or otherwise Contribute any interest it or such
Affiliate owns, directly or indirectly, in any member of

 

20

--------------------------------------------------------------------------------

the DTV Brasil Group to any Person that is not a member of the News Group or the
DirecTV Group, as applicable, or otherwise dispose of a Competing Interest in
DTV Brasil, except pursuant to the exercise by Globo of its Disposition Right or
as specifically required by a final and permanent order or decree of a
Governmental Authority which order or decree is not appealable to such
Governmental Authority and (ii) none of the Sky Parties shall, or shall permit
any of its Affiliates to, transfer or otherwise Contribute any interest it or
such Affiliate owns, directly or indirectly, in Sky Brasil to any Person that is
not a member of the News Group or the Globo Group, as applicable.

 

8.7 Encryption and Related Technologies. News shall cause NDS Limited to make
available to Sky Brasil, on a most favored nations basis (vis-à-vis similar
agreements between NDS Limited and other Affiliates of News), encryption and
other related technologies and services applicable to the DTH Business (as
defined in the Amended Sky Brasil Quotaholders Agreement or the Closing Sky
Brasil Quotaholders Agreement, as applicable).

 

8.8 Organizational Documents. The Parties shall amend the Articles of
Association of TV Capital, DTV Brasil and Sky Brasil to be in the form of, and
file at Closing, (i) the Amended TV Capital Articles of Association, (ii) the
Amended DTV Brasil Articles of Association and (iii) the Closing Sky Brasil
Articles of Association, in each case with the Junta Comercial do Estado de São
Paulo.

 

9. Indemnification.

 

9.1 Indemnification. Subject to Sections 9.2 and 10.2, each Party will indemnify
and hold each other Party, their respective Affiliates and each officer,
director, employee, representative and successor and permitted assign of any of
the foregoing (collectively, the “Indemnified Parties”) harmless, and agrees to
protect, save and keep harmless the Indemnified Parties from payment, and hereby
assumes liability for the payment, of any Losses, arising or resulting from or
in connection with (a) any breach by such Party of a representation or warranty
contained herein or (b) any failure by such Party to perform any agreement or
covenant contained herein.

 

9.2 Payment Adjustments, Etc.

 

(a) Any indemnification payment made pursuant to this Participation Agreement or
the Combination Agreement in respect of any claim (i) shall be net of an amount
equal to (x) any insurance proceeds realized by and paid to the Indemnified
Party minus (y) any related costs and expenses, including the aggregate cost of
pursuing any related insurance claims plus any correspondent increases in
insurance premiums or other chargebacks, and (ii) in the case of any payment
made to any member of the DTV Brasil Group or the Sky Brasil Group, shall be (A)
reduced (but not below zero) by an amount equal to the Revenue Tax benefits, if
any, attributable to such claim and (B) increased by

 

21

--------------------------------------------------------------------------------

an amount equal to the Revenue Taxes, if any, attributable to the receipt of
such indemnity payment, but only as and to the extent that such Tax benefits are
actually realized, or such Revenue Taxes are actually paid, as the case may be,
by the Indemnified Party or any consolidated, combined or unitary group of which
such Indemnified Party is a member. For the avoidance of doubt, any
indemnification payment made pursuant to this Participation Agreement or the
Combination Agreement in respect of a Revenue Tax deficiency for a period shall
be reduced by the amount of any refund of Revenue Taxes paid by the Indemnified
Party in another period, if such refund results from the assessment of such
Revenue Tax deficiency. The Indemnified Party shall use its reasonable efforts
to make insurance claims relating to any claim for which it is seeking
indemnification pursuant to this Article 9; provided that the Indemnified Party
shall not be obligated to make such an insurance claim if the Indemnified Party
in its reasonable judgment believes that the cost of pursuing such an insurance
claim together with any correspondent increase in insurance premiums or other
chargebacks to the Indemnified Party would exceed the value of the claim for
which the Indemnified Party is seeking indemnification pursuant to this Article
9. All sums payable by the Indemnifying Party in accordance with this Article 9
shall be paid without any deduction, withholding, counterclaim or set-off.

 

9.3 Procedure for Indemnification.

 

(a) In the case of any claim asserted by a third party against an Indemnified
Party for which indemnification is required under this Participation Agreement,
notice shall be given (the “Claim Notice”) by the Indemnified Party to the Party
required to provide such indemnification (the “Indemnifying Party”) promptly
after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and the Indemnified Party shall permit the Indemnifying
Party (at the expense of such Indemnifying Party) to assume the defense of any
claim or any litigation resulting therefrom, provided that (i) counsel for the
Indemnifying Party who shall conduct the defense of such claim or litigation
shall be reasonably satisfactory to the Indemnified Party, and the Indemnified
Party may participate in such defense at such Indemnified Party’s expense, and
(ii) the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its indemnification obligation under
this Participation Agreement except to the extent that such failure results in a
lack of actual notice to the Indemnifying Party and such Indemnifying Party is
materially prejudiced as a result of such failure to give notice. The
Indemnifying Party shall have thirty (30) days from receipt of the Claim Notice
(the “Notice Period”) to notify the Indemnified Party whether or not it elects
to assume the defense of the Indemnified Party against such claim or demand. If
the Sky Parties collectively act as the Indemnifying Party, no action shall be
taken by them as “Indemnifying Party” without the agreement of all Sky Parties.

 

22

--------------------------------------------------------------------------------

(b) In the event that the Indemnifying Party notifies the Indemnified Party
within the Notice Period that it elects to defend the Indemnified Party against
such claim or demand, the Indemnifying Party shall have the right to defend the
Indemnified Party by appropriate proceedings, provided that, except with the
prior written consent of the Indemnified Party, no Indemnifying Party, in the
defense of any such claim or litigation, shall consent to entry of any judgment
or enter into any settlement that provides for injunctive or other nonmonetary
relief affecting the Indemnified Party or that does not include as an
unconditional term thereof the giving by each claimant or plaintiff to such
Indemnified Party of a release from all liability with respect to such claim or
litigation. In the event that the Indemnified Party shall (i) in good faith
determine that (x) the conduct of the defense of any claim subject to
indemnification hereunder or any proposed settlement of any such claim by the
Indemnifying Party might be expected to affect adversely the Indemnified Party’s
Tax liability or (y) that the Indemnified Party may have available to it one or
more defenses or counterclaims that are inconsistent with one or more of those
that may be available to the Indemnifying Party in respect of such claim or any
litigation relating thereto or (ii) in the case of any Globo Indemnitee, notify
the Indemnifying Party in writing that there is a reasonable probability that
such claim or demand is reasonably likely to adversely affect the rights or
ability of Globo or any Affiliate thereof to perform under the Agency Agreement
or any related agreement, the Indemnified Party shall have the right at all
times to take over and assume control over the defense, settlement, negotiations
or litigation relating to any such claim at the sole cost of the Indemnifying
Party, provided that if the Indemnified Party does so take over and assume
control, the Indemnified Party shall not consent to entry of any judgment or
settle such claim or litigation (except, in any case described by clause (ii)
above, as may relate to Globo’s rights and obligations under the Agency
Agreement or any related agreement) without the written consent of the
Indemnifying Party, such consent not to be unreasonably withheld. “Globo
Indemnitee” as used herein means Globo, any of its Affiliates and each officer,
director, employee, representative and successor and permitted assign of any of
the foregoing. In the event that the Indemnifying Party does not accept the
defense of any matter for which indemnification is required, the Indemnified
Party shall have the full right to defend against any such claim or demand, and
shall be entitled to settle or agree to pay in full such claim or demand at the
expense of the Indemnifying Party. In any event, the Parties shall cooperate in
the defense of any claim or litigation subject to this Article 9 and the records
of each shall be available to the other with respect to such defense. Each
Indemnifying Party’s obligation under this Article 9 shall not affect the other
Parties’ right to seek any other remedy upon a default by the Indemnifying Party
under this Agreement.

 

(c) In the event that an Indemnified Party has a claim against the Indemnifying
Party which does not involve a claim or demand being asserted by a third party,
the Indemnified Party shall send a written notice with respect to such claim to
the Indemnifying Party promptly following its discovery of the existence of the
facts giving rise to such claim. The Indemnifying Party shall have fifteen (15)
Business Days from

 

23

--------------------------------------------------------------------------------

the date such notice is received during which to notify the Indemnified Party in
writing of any objections it has to the Indemnified Party’s notice or claims for
indemnification. If the Indemnifying Party does not deliver such written notice
of objection within such fifteen (15) day period, the Indemnifying Party shall
be deemed to have accepted the claim. If the Indemnifying Party rejects the
claim, then the Indemnified Party shall have the right (but not the obligation)
to appoint an Independent Accountant to review the claim and determine its
validity. If following receipt of the decision of the Independent Accountant
either party is not satisfied with the decision of the Independent Accountant,
or in the event the Indemnified Party does not appoint an Independent
Accountant, the Indemnified Party shall have the right to require that the claim
be resolved in accordance with Section 10.5. The fees and expenses of any
Independent Accountant shall be borne 50% by the Indemnifying Party and 50% by
the Indemnified Party.

 

(d) The indemnification required by this Article 9 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or expense, loss, damage or liability is
incurred. Any payments due under this Article 9 shall be made by the
Indemnifying Party by wire transfer of immediately available funds within 30
Business Days of demand by the Indemnified Party.

 

9.4 Dilution Protection. Under no circumstances shall payment of any indemnity
obligation under any Transaction Agreement by any Person other than a member of
the Globo Group result in any dilution of the Percentage Interest in Sky Brasil
or, following the Closing, DTV Brasil held by Globo or any other member of the
Globo Group.

 

10. Miscellaneous.

 

10.1 Terms Generally. The words “hereby”, “herein”, “hereof”, “hereunder” and
words of similar import refer to this Participation Agreement as a whole
(including the Exhibits and Schedules hereto) and not merely to the specific
section, paragraph or clause in which such word appears. All references herein
to Articles, Sections, Exhibits, Annexes and Schedules shall be deemed
references to Articles and Sections of, and Exhibits, Annexes and Schedules to,
this Participation Agreement unless the context shall otherwise require. The
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”. The definitions given for terms in this Article
10 and elsewhere in this Participation Agreement shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. Except as otherwise expressly provided herein, all references to
“dollars” or “$” shall be deemed references to the lawful money of the United
States of America.

 

24

--------------------------------------------------------------------------------

10.2 Liability. Notwithstanding anything to the contrary in this Participation
Agreement:

 

(a) In the event of any breach of a representation or warranty or of any
covenant by any Sky Party with respect to any member of the Sky Brasil Group,
such Sky Party shall only be liable (x) if such breach did not result from any
act or failure to act by any other Sky Party, Liberty or any Affiliate of any of
the foregoing, and (y) to the extent of its Pro-Rata Share of any Loss incurred
by any DirecTV Party, subject always to Section 8.5(b);

 

(b) Globo shall not have any liability to any DirecTV Party with respect to any
breach of covenant included in Section 2.3;

 

(c) Globo shall not have any liability to any News Party with respect to any
Loss suffered by a DirecTV Party; and

 

(d) In the event that Globo has any liability for any breach of representation
or warranty, breach of covenant or otherwise under this Participation Agreement,
the Combination Agreement, the Parent Content Agreement, the Amended Sky Brasil
Quotaholders Agreement or any other agreement between or among Globo or its
Affiliates, on the one hand, and one or more of the other Parties hereto or
their respective Affiliates, on the other hand, permitting any member of the
Globo Group to settle such member’s indemnity obligation through the transfer of
Sky Brasil Quotas, Globo shall have the option to meet part or all of its
indemnification or other monetary obligations by (i) transferring to the
applicable Indemnified Party or other recipient such number of Sky Brasil Quotas
(including, if applicable, Sky Brasil Quotas issuable upon conversion or
capitalization of any Quotaholder Funding made by a member of the Globo Group)
representing a capitalization in Reais equal to the product of the US Dollar
Indemnity and the Applicable Factor, based on a value of R$1 per Quota, provided
that any indemnity payable in the form of Sky Brasil Quotas shall be paid to
DirecTV or its designated Affiliate or (in the event DirecTV or such Affiliate
is not already a Quotaholder of Sky Brasil) News or its designated Affiliate
whereupon DirecTV or News, as applicable, shall have the obligation to indemnify
the applicable member of the Sky Brasil Group or the DTV Brasil Group or such
other Indemnified Party in cash for the amount of the applicable Loss, or (ii)
setting off such indemnification or other obligations against any
indemnification or other obligations the applicable Indemnified Party may have
to Globo, to the extent that such Indemnified Party may have indemnification or
other obligations to Globo. Notwithstanding anything to the contrary herein,
Globo shall have no obligation to transfer Quotas as payment on its indemnity
obligations, or otherwise make any indemnity payment based on its Pro-Rata Share
of any Liability, until (x) the occurrence of the Value Determination Date and
(y) the earlier of (i) the date the Sky Brasil Articles of Association have been
amended and the applicable Governmental Approvals have been received, each to
the extent necessary

 

25

--------------------------------------------------------------------------------

under applicable Law and (ii) 270 days after any such indemnity payment is due,
provided that, with respect to (y), Globo News and DirecTV will take all
reasonable actions to effect the conditions in clause (y)(i); if, after the
occurrence of the Value Determination Date, Globo is unable to transfer such
Quotas within such 270 day period because of a failure to amend the Sky Brasil
Articles of Association and obtain any necessary Governmental Approval, Globo
shall be required to make such indemnity payments pursuant to the second
sentence of Section 9.3(d), as if the expiry of such 270 day period was the date
of demand by the Indemnified Party.

 

10.3 Expenses. Except as set forth below in this Section 10.3 or as otherwise
specifically provided for in this Participation Agreement or another Transaction
Agreement, the Parties shall bear their respective expenses, costs and fees
(including attorneys’ fees) in connection with the transactions contemplated
hereby, including the preparation, execution and delivery of this Participation
Agreement and the other Transaction Agreements and compliance herewith or
therewith, whether or not the transactions contemplated hereby or thereby shall
be consummated, except that Sky Brasil and DTV Brasil shall bear all expenses
incurred after the date hereof (other than attorneys’ fees incurred by the
Parties) in connection with the Required Approvals.

 

10.4 Notices. All notices and other communications required or permitted by this
Participation Agreement shall be made in writing and any such notice or
communication shall be delivered in person, transmitted by telex or telecopier,
mailed via certified or registered mail, return receipt requested, with postage
prepaid, or sent by courier service, and shall be deemed given when so received
if delivered personally or by telex or telecopy (provided that a copy is also
sent by certified or registered mail or by internationally recognized courier
service), or if mailed, seven calendar days after the date of mailing (three
calendar days in the case of an internationally recognized courier service), as
follows:

 

Globo:

 

Globo Comunicações e Participações S.A.

Avenida de Afranio de Melo Franco, 135

Rio de Janeiro, 22430 – 060

Brasil

Attn: Mr. Jorge Nobrega and Mrs. Rossana Fontenele

Tel: +55-21-2540-4491

Fax: +55-21-2512-5046

 

26

--------------------------------------------------------------------------------

with a copy to:

 

TV Globo Ltda.

Rua Marques de São Vicente, 30

Rio de Janeiro, 22451-040

Brasil

Attn: Ms. Simone Lahorgue Nunes

Tel: +55-21-2540-1057

Fax: +55-21-2540-1086

 

with a copy to:

 

Debevoise & Plimpton LLP

919 Third Avenue

New York, NY 10022

U.S.A.

Attn: Mr. Michael J. Gillespie

Tel: +1-212-909-6463

Fax: +1-212-909-6836

 

News:

 

The News Corporation Limited

1211 Avenue of the Americas

New York, NY 10036

U.S.A.

Attn: Mr. Lawrence A. Jacobs

Tel: +1-212-852-7720

Fax: +1-212-852-7896

 

with a copy to:

 

Hogan & Hartson L.L.P.

875 Third Avenue

New York, NY 10022

U.S.A.

Attn: Mr. Ira S. Sheinfeld

Tel: +1-212-918-8212

Fax: +1-212-918-3100

 

27

--------------------------------------------------------------------------------

DirecTV:

 

The DIRECTV Group, Inc.

2250 East Imperial Highway

El Segundo, CA 90245

U.S.A.

Attn: General Counsel

Tel: +1-310-964-0808

Fax: + 1-310-964-4991

 

with a copy to:

 

DIRECTV Latin America, LLC

1211 Avenue of the Americas

New York, NY 10036

U.S.A.

Attn: General Counsel

Tel: +1-212-462-5036

Fax: +1-212-462-5060

 

10.5 Governing Law, Jurisdiction, Process, Etc.

 

(a) This Participation Agreement will be governed by and construed in accordance
with the laws of the State of New York, United States of America (regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law to the extent such principles or rules are not mandatorily applicable by
statute and would require the application of the laws of another jurisdiction).

 

(b) Each of the Parties irrevocably consents and agrees that any legal action,
suit or proceeding commenced to enforce any right under this Participation
Agreement shall be commenced only in the courts of the State of New York, County
of New York, or of the U.S. District Court for the Southern District of New
York. Each of the Parties irrevocably submits to the jurisdiction of those
courts for any such legal action, suit or proceeding, and waives, to the fullest
extent permitted by law, the right to commence any such legal action, suit or
proceeding in any other court or venue and any objection which it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in any such courts, and any claim that any such suit, action or
proceeding brought in such courts has been brought in an inconvenient forum, and
further agrees that a final judgment in any such suit, action or proceeding
brought in such courts shall be conclusive and binding on such Party.

 

(c) News hereby irrevocably designates News America Incorporated, with an office
at 1211 Avenue of the Americas, New York, New York 10036, as its designee,
appointee and agent to receive, for and on its behalf service of process in such

 

28

--------------------------------------------------------------------------------

jurisdiction in any legal action or proceedings solely with respect to the
enforcement of any right under this Participation Agreement, and such service
will be deemed complete upon delivery thereof to News America Incorporated,
provided that in the case of any such service upon News America Incorporated,
the Party effecting such service will also deliver a copy thereof to News by
facsimile and internationally recognized courier service in accordance with
Section 10.4 hereto.

 

(d) News (if News America Incorporated is dissolved) hereby irrevocably
designates Corporation Service Company (or, upon notice to the other Party
hereto, any other agent) as its designee, appointee and agent to receive, for
and on its behalf service of process in such jurisdiction and in any legal
action or proceedings, solely with respect to the matters set forth in Section
10.5(c) above, and such service will be deemed complete upon delivery thereof to
such process agent, provided that in the case of any such service upon the
process agent, the Party effecting such service has also delivered a copy
thereof to News by facsimile and internationally recognized courier service in
accordance with Section 10.4 hereto. News will take all such action as may be
necessary to continue said appointment in full force and effect or to appoint
another agent so that News will at all times have an agent for service of
process for the above purposes in New York, New York. In the event of the
transfer of all or substantially all of the assets and business of the process
agent (whether Corporation Service Company or otherwise) to any other
corporation by consolidation, merger, sale of assets or otherwise, such other
corporation will be substituted hereunder for the process agent with the same
effect as if named herein in place of Corporation Service Company or such other
agent. Nothing herein will affect the right of any Party to serve process in any
other manner permitted by applicable law, provided that no service shall be
deemed complete unless a copy of such service is also delivered to News by
facsimile and internationally recognized courier service in accordance with
Section 10.4. Each Party expressly acknowledges that the foregoing waiver is
intended to be irrevocable under the laws of the State of New York and of the
United States of America.

 

(e) Globo hereby irrevocably designates Corporation Service Company, with an
office at 1133 Avenue of the Americas, Suite 3100, New York, New York 10036, as
its designee, appointee and agent to receive, for and on its behalf service of
process in such jurisdiction in any legal action or proceedings solely with
respect to the enforcement of any right under this Participation Agreement, and
such service will be deemed complete upon delivery thereof to Corporation
Service Company, provided that in the case of any such service upon Corporation
Service Company, the Party effecting such service has also delivered a copy
thereof to Globo by facsimile and internationally recognized courier service in
accordance with Section 10.4. Globo will take all such action as may be
necessary to continue said appointment in full force and effect or to appoint
another agent so that Globo will at all times have an agent for service of
process for the above purposes in New York, New York. In the event of the
transfer of all or substantially all of the assets and business of the process
agent (whether Corporation

 

29

--------------------------------------------------------------------------------

Service Company or otherwise) to any other corporation by consolidation, merger,
sale of assets or otherwise, such other corporation will be substituted
hereunder for the process agent with the same effect as if named herein in place
of Corporation Service Company or such other agent. Nothing herein will affect
the right of any Party to serve process in any other manner permitted by
applicable law, provided that no service shall be deemed complete unless a copy
of any such service is also delivered to Globo by facsimile and internationally
recognized courier service in accordance with Section 10.4. Each Party expressly
acknowledges that the foregoing waiver is intended to be irrevocable under the
laws of the State of New York and of the United States of America.

 

(f) Each Party hereto acknowledges and agrees that the other Parties would be
irreparably damaged in the event that the provisions of this Participation
Agreement were not performed in accordance with their specific terms or were
otherwise breached. Accordingly, each of the Parties agrees that money damages
would not be a sufficient remedy for the other Parties hereto for any such
non-performance or breach by it, and that in addition to all other remedies the
other Parties hereto may have, they shall be entitled to specific performance
and to injunctive or other equitable relief as a remedy for or to prevent any
such non-performance or breach or to seek to enforce specifically this
Participation Agreement and the terms and provisions hereof. Each Party hereto
agrees not to oppose the granting of such relief in the event a court determines
that such a nonperformance or breach has occurred, and to waive any requirement
for the securing or posting of any bond in connection with such remedy.

 

10.6 Binding Effect. This Participation Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective heirs,
successors and permitted assigns.

 

10.7 Assignment.

 

(a) This Participation Agreement shall not be assignable or otherwise
transferable by any Party hereto without the prior written consent of the other
Parties, and any purported assignment or other transfer without such consent
shall be void and unenforceable; provided that Globo shall have the right to
assign all or any part of its rights and obligations hereunder to TV Globo or
any other member of the Globo Group, and provided further that each of News and
DirecTV shall have the right to assign its rights and obligations hereunder to
its Controlled Affiliates. In the event of any assignment by Globo to a
Controlled Affiliate, Globo shall remain responsible for the performance in full
by such Controlled Affiliate, and in the event any such assignment by TV Globo
or a Controlled Affiliate of TV Globo, TV Globo shall be responsible for the
performance in full by such Controlled Affiliate. In the event of any assignment
by News or DirecTV to a Controlled Affiliate thereof, News or DirecTV, as
applicable, shall remain responsible for the performance in full by such
Controlled Affiliate. News shall also have the right to assign certain of its
rights and obligations under this Participation

 

30

--------------------------------------------------------------------------------

Agreement upon a transfer of the entire aggregate interest in Sky Brasil held by
the News Group to DirecTV (or any Affiliate thereof) in accordance with Section
4.1. For the avoidance of doubt, notwithstanding any permitted assignment
hereunder, in no case will the assigning party have the right to assign or
otherwise be released from any of its obligations under Section 3.2, 8.1, 8.2,
8.3 or (except in the case of assignment pursuant to Section 4.1) any obligation
already applicable to such assigning Party and its Controlled Affiliates.

 

(b) For the avoidance of doubt, the exercise by News, DirecTV or any of their
respective Affiliates of any Transfer Right to a third-party with respect to its
equity interest in Sky Brasil will not by itself release any such Party or
Affiliate thereof from any of its obligations (i) under this Participation
Agreement or (ii) under any other Transaction Agreement, except to the extent
specifically set forth in such other Transaction Agreement or otherwise
specifically agreed by the parties thereto.

 

(c) For the avoidance of doubt, the exercise by any member of the Globo Group of
any Exchange Right or of any Transfer Right to a third-party, in each case with
respect to its equity interest in Sky Brasil shall not release such member of
the Globo Group from any of its obligations (i) under this Participation
Agreement or (ii) under any other Transaction Agreement, except to the extent
specifically set forth in such other Transaction Agreement or otherwise
specifically agreed by the parties thereto. Notwithstanding anything to the
contrary herein, Globo shall be permitted to assign its Exchange Rights under
this Participation Agreement or other Transaction Agreement in order to effect a
Globo Monetization.

 

(d) Notwithstanding Section 10.7(a), promptly upon a reorganization of News
resulting in News Corporation, a Delaware company, or any other Affiliate of
News (“News Parent”), becoming the ultimate parent of News and its Controlled
Affiliates, the rights and obligations of News under this Participation
Agreement shall be deemed immediately transferred to and assumed by News Parent,
and each reference to News hereunder and thereunder shall be deemed a reference
to News Parent, it being understood that News shall be a Controlled Affiliate of
News Parent. Promptly following such reorganization, News Parent shall execute
and deliver to the other Parties hereto a joinder to the Transaction Agreements
or other instrument confirming that it is party to and bound by the Transaction
Agreements to the same extent that News was bound immediately prior to such
reorganization, whereupon News shall be released therefrom.

 

10.8 No Third-Party Beneficiaries. Except as provided in Sections 1.3, 3.1 and
3.3 and Article 2 with respect to the Affiliates of any relevant Party, Section
8.7 with respect to Sky Brasil and Article 9 with respect to the Indemnified
Parties relating to any relevant Party, Sky Brasil and DTV Brasil, nothing in
this Participation Agreement shall confer any rights upon any person or entity
other than the Parties and their respective heirs, successors and permitted
assigns.

 

31

--------------------------------------------------------------------------------

10.9 Amendment; Waivers, Etc. No amendment, modification or discharge of this
Participation Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the Party against whom
enforcement of the amendment, modification, discharge or waiver is sought. Any
such waiver shall constitute a waiver only with respect to the specific matter
described in such writing and shall in no way impair the rights of the Party
granting such waiver in any other respect or at any other time. Neither the
waiver by any of the Parties of a breach of or a default under any of the
provisions of this Participation Agreement, nor the failure by any of the
Parties, on one or more occasions, to enforce any of the provisions of this
Participation Agreement or to exercise any right or privilege hereunder, shall
be construed as a waiver of any other breach or default of a similar nature or
as a waiver of any of such provisions, rights or privileges hereunder.

 

10.10 Remedies. The rights and remedies herein provided are cumulative and none
is exclusive of any other, or of any rights or remedies that any Party may
otherwise have at law or in equity. The rights and remedies of any Party based
upon, arising out of or otherwise in respect of any inaccuracy or breach of any
representation, warranty, covenant or agreement or failure to fulfill any
condition shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement as to which there is no inaccuracy or breach.

 

10.11 Entire Agreement. This Participation Agreement, the other Transaction
Agreements (including the Ancillary Closing Agreements (when executed and
delivered)), the Existing Confidentiality Agreements and any other operational
agreements between any Party hereto and Sky Brasil constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, between the Parties with respect to the subject matter hereof. For the
avoidance of doubt, the Master Agreement shall only continue to the extent set
forth in Section 2.4 of this Participation Agreement.

 

10.12 Severability. Any term or provision of this Participation Agreement which
is invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without rendering invalid, illegal or unenforceable the
remaining terms and provisions of this Participation Agreement or affecting the
validity, illegality or enforceability of any of the terms or provisions of this
Participation Agreement in any other jurisdiction. If any provision of this
Participation Agreement is so broad as to be unenforceable, the provision shall
be interpreted to be only so broad as is enforceable. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the Parties shall negotiate in good faith to modify this Participation
Agreement so as to effect the original intent of the Parties as closely as
possible in a mutually

 

32

--------------------------------------------------------------------------------

acceptable manner in order that the transactions contemplated herein are
consummated as originally contemplated to the fullest extent possible.

 

10.13 Construction. The parties have participated jointly in the negotiation and
drafting of this Participation Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Participation Agreement shall be
construed as if drafted jointly by the parties and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Participation Agreement.

 

10.14 Headings. The headings contained in this Participation Agreement are for
purposes of convenience only and shall not affect the meaning or interpretation
of this Participation Agreement.

 

10.15 Counterparts. This Participation Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.

 

33

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have duly executed this Participation Agreement
as of the date first above written.

 

GLOBO COMUNICAÇÕES E PARTICIPAÇÕES S.A.

By:

 

/s/ Ronnie Vaz Moreira

--------------------------------------------------------------------------------

Name:

 

Ronnie Vaz Moreira

Title:

 

Chief of Operations

By:

 

/s/ Stefan Alexander

--------------------------------------------------------------------------------

Name:

 

Stefan Alexander

Title:

 

Chief Financial Officer

THE NEWS CORPORATION LIMITED

By:

 

/s/ Arthur M. Siskind

--------------------------------------------------------------------------------

Name:

 

Arthur M. Siskind

Title:

  Senior Executive Vice President and Group General Counsel

THE DIRECTV GROUP, INC.

By:

 

/s/ Bruce B. Churchill

--------------------------------------------------------------------------------

Name:

 

Bruce B. Churchill

Title:

 

Executive Vice-President

   

and Chief Financial Officer

 

34

--------------------------------------------------------------------------------

ANNEX A

 

COMMON DEFINITIONS

 

Whenever used in any Transaction Agreement to which this Annex A is attached,
the following terms shall have the respective meanings given to them below or in
the Transaction Agreements indicated below. Failure of any of the following
definitions to appear in any Transaction Agreement to which this Annex A is
attached shall not affect the meaning or interpretation of such definition or
such Transaction Agreement.

 

2003 Promissory Note: the Promissory Note, dated September 23, 2003, issued by
Sky Brasil in favor of News America Incorporated, in the principal amount of
$5,500,000.

 

2004 Sky Equity Funding: (i) all capital contributions and (ii) all other
funding or advances (but excluding for the avoidance of doubt the amount of
R$7,570,994 plus accrued interest owed by Sky Brasil to Globo with respect to
programming, the payment of which has been deferred and is now payable on or
prior to February 28, 2005 pursuant to Section 2.4 of the Participation
Agreement and other funding through the deferral of trade receivables) made to
Sky Brasil by or on behalf of any quotaholder thereof and not yet capitalized or
converted as of the Value Determination Date, in each case whether in the form
of AFACs, debt or otherwise and including without limitation all such
contributions, funding and advances made by News or an Affiliate thereof in lieu
of Globo or an Affiliate thereof, and including without limitation the September
2003 Loan Amount.

 

AFACs: Adiantamentos para Futuro Aumento de Capital.

 

Affected Party: as defined in Section 8.2(e)(i) of the Participation Agreement.

 

Affiliate: of a Person means a Person that directly or indirectly through one or
more intermediaries, Controls, is Controlled by, or is under common Control
with, the first Person, including any Controlled Affiliate, except (a) in the
case of News, excluding DirecTV and its Controlled Affiliates and the DTV Brasil
Group, (b) in the case of each Sky Party, excluding the Sky Brasil Group, (c) in
the case of DirecTV and DTVLA, excluding News and its Controlled Affiliates and
the DTV Brasil Group and (d) in the case of Sky Brasil and its Controlled
Affiliates, excluding DTV Brasil and its Controlled Affiliates, except, in each
of the foregoing clauses (a) through (d), as specifically otherwise indicated in
any Transaction Agreement.

 

Agency Agreement: Contrato de Comissão, dated as of September 23, 2004, between
Net Brasil S.A. and Sky Brasil.

 

Alternative Transaction: as defined in Section 5.3(a) of the Combination
Agreement.

 

1

--------------------------------------------------------------------------------

Amended DTV Brasil Articles of Association: the Articles of Association of DTV
Brasil, as amended and restated as of the Closing Date, in form and substance
reasonably satisfactory to Globo, News (to the extent it has not already
transferred its entire interest in Sky Brasil to DirecTV by the Closing Date)
and DirecTV.

 

Amended TV Capital Articles of Association: the Articles of Association of TV
Capital, as amended and restated as of the Closing Date, in form and substance
reasonably satisfactory to Globo, News (to the extent it has not already
transferred its entire interest in Sky Brasil to DirecTV by the Closing Date)
and DirecTV.

 

Amended Sky Brasil Articles of Association: the Articles of Association of Sky
Brasil, as amended and restated as of the Signing Date.

 

Amended Sky Brasil Quotaholders Agreement: the Second Amended and Restated
Quotaholders Agreement, entered into as of the Signing Date, among DTH Comercio
e Partiçipacões Ltda., News DTH do Brasil Comércio e Partiçipacões Ltda.,
Liberty Brasil Ltda. and Sky Brasil. The Amended Sky Brasil Quotaholders
Agreement amends and replaces in its entirety the Sky Brasil Quotaholders
Agreement.

 

ANATEL: Agencia Nacional de Telecomunicações.

 

ANATEL Approval: full, final and unconditional approval by ANATEL of the
transactions contemplated by the Transaction Agreements.

 

Ancillary Closing Agreements: the Amended DTV Brasil Articles of Association,
the Closing Sky Brasil Quotaholders Agreement, the Closing Sky Brasil Articles
of Association, the Amended TV Capital Articles of Association and the Releases.

 

Announced Cure Date: the date specified in the Cure Plan by which News will no
longer continue to be in breach of the Covenants resulting from the DirecTV
Acquisition, which date shall be within 180 days of the date the Combination
Agreement is terminated and the Cure Plan is publicly announced, provided that,
if the Combination Agreement is terminated after January 1, 2006, the Announced
Cure Date shall be within 135 days of the date the Combination Agreement is
terminated.

 

Applicable Factor: the Closing Factor or the Termination Factor, as applicable.

 

Arms-Length Terms: means, with respect to any Contract and any party thereto, on
terms and conditions (in the case of Contracts relating to Content, including
but not limited to volume discounts, if appropriate) at least as favorable for
such party as could reasonably be expected to be obtained in arms-length
negotiations by such party with an unrelated Person.

 

2

--------------------------------------------------------------------------------

Articles of Association: as to any Person, its articles of association or
contrato social, as amended from time to time.

 

Balance Sheet: as to any Person, any balance sheet provided by an
internationally recognized accounting firm as part of such Person’s annual
audited financial statements.

 

Brazil Clean Room Agreement: the Clean Room Agreement among DirecTV, DTVLA,
Darlene, Globo and News, dated as of July 2, 2003.

 

Brazil Confidentiality Agreement: the Confidentiality Agreement among DirecTV,
DTVLA, Darlene, Globo and News, dated as of July 2, 2003.

 

Brazilian GAAP: Brazilian generally accepted accounting principles.

 

Business Day: any day, other than a Saturday or a Sunday or a day on which
banking institutions in Rio de Janeiro or São Paulo, in the Federative Republic
of Brazil or in New York, NY, are authorized or obligated by law or executive
order to close.

 

CADE: the Conselho Administrativo de Defesa Economica.

 

Central Bank of Brazil: The Central Bank of the Federative Republic of Brazil
(BACEN)

 

Cisneros Content: means any Content owned or produced, or any channel or
commercial unit of Content a material portion of which is controlled or
programmed by a member of the Cisneros Group, and shall include all Claxson
channels.

 

Cisneros Group: means the Cisneros Group of Companies, a Venezuelan corporation,
and its Controlled Affiliates.

 

Claim Notice: as defined in Section 9.3 of the Participation Agreement.

 

Claxson: means Claxson Interactive Group, Inc., an Argentinean corporation.

 

Closing: as defined in Section 2.1 of the Combination Agreement.

 

Closing Date: as defined in Section 2.1 of the Combination Agreement.

 

Closing Factor: as defined in the applicable Quotaholders Agreement.

 

Closing Percentage Interest: with respect to any Party, the Percentage Interest
of such Party in Sky Brasil immediately following the Closing.

 

Closing Sky Brasil Articles of Association: the Articles of Association of Sky
Brasil, as amended and restated as of the Closing Date, in form and substance
reasonably satisfactory to Globo and either News (to the extent it has not
already transferred its entire interest in Sky Brasil to DirecTV) or DirecTV.

 

3

--------------------------------------------------------------------------------

Closing Sky Brasil Quotaholders Agreement: the amended and restated Quotaholders
Agreement of Sky Brasil, executed and delivered at the Closing Date, in
substantially the form attached to the Combination Agreement as Exhibit 1.

 

Combination Agreement: the Brazil Business Combination Agreement, by and among
News, Globo, Liberty, DirecTV, DTVLA and GLA, dated as of the Signing Date.

 

Combined Businesses: the DTV Brasil Business and the business and operations of
Sky Brasil (each of them individually and taken together, whether or not they
have been merged at the operational level).

 

Competing Cable Owner: a Person that directly or indirectly holds an equity
interest in a Competing Cable Platform, provided such equity interest comprises
no more than 10% of the total consolidated assets of such Person.

 

Competing Cable Platform: a Content distribution system in or specifically
targeted to Brazil by means of cable.

 

Competing Cable Platform Agency Agreement: as defined in Section 3.2(a)(ii) of
the Participation Agreement.

 

Competing Interest: with respect to any Content distribution system (other than
those with respect to which a Shutdown has been completed), any direct or
indirect interest in, or any contractual or other rights relating to the
management of, or any right (conditional or otherwise) to acquire any such
interest or rights in, such system.

 

Competing Platform: a DTH satellite system (other than Sky Brasil) for the
distribution of subscription programming services directly to any subscriber in
Brazil (whether residential, non-residential or otherwise).

 

Confidential Agreements: the Transaction Agreements excluding the applicable
Quotaholders Agreements, Sky Brasil Articles of Association, the Amended Sky
Brasil Articles of Association and the Closing Sky Brasil Articles of
Association.

 

Confidential Information: (a) the Confidential Agreements and (b) following the
Closing, (x) the Evaluation Material (as defined in the Brazil Confidentiality
Agreement) and (y) all other information, written or oral, disclosed or provided
to any Party, its Affiliates or their respective Representatives (including any
representatives such Party or any of its Affiliates designated to serve on any
board or similar governing body of Sky Brasil, DTV Brasil or any of their
respective Controlled Affiliates) relating to (i) any other Party or Affiliate
thereof and

 

4

--------------------------------------------------------------------------------

disclosed in connection with or pursuant to any Confidential Agreement
(including any negotiation thereof or performance thereunder) or (ii) the
business or operations of Sky Brasil, DTV Brasil or any Controlled Affiliate
thereof, including, but not limited to, all notes, market and other analyses,
compilations, forecasts, studies, strategic plans, financial position,
operations, prospects, terms of contracts or other documents that contain or
reflect such information.

 

Consent: any consent, approval, authorization, waiver, permit, grant, franchise,
concession, agreement, license, certificate, exemption, order, registration,
declaration, filing, report or notice of, with or to any Person.

 

Content: means all video, audio, and audiovisual signals, (including, without
limitation, channels, specific programs, pay-per-view events, walled garden,
digital enhancements and interactive services) that can be viewed or interacted
with by end users through the use of a television screen or video monitor.
Except as specifically otherwise indicated, “Content” excludes cross-promotions,
barker channels relating to the Sky Brasil and advertisement insertions.

 

Continuing DTV Affiliate Agreement: as defined in Section 4.6(b) of the
Combination Agreement.

 

Continuing Sky Party Agreement: as defined in Section 3.6(b) of the Combination
Agreement.

 

Contract: any oral or written contract, agreement, covenant, commitment,
arrangement, understanding, settlement, indenture, note, bond, loan, instrument,
lease, guarantee, conditional sales contract, mortgage, deed of trust, security
agreement, royalty, license, franchise or insurance policy, in each case as
amended, supplemented, waived or otherwise modified

 

Contribute: contribute, assign, transfer, convey and deliver.

 

Control: (including the terms “controlled by,” “controlling” and “under common
control with”) means the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

 

Controlled Affiliate: shall mean, with respect to a Person, any Affiliate that
is Controlled by the first Person.

 

Covenants: as defined in Recital B of the Participation Agreement.

 

Cure Plan: a plan pursuant to which News ceases to be in violation of the
Covenants that is (i) developed in consultation with Globo and that takes into
account any comments of Globo, (ii) grounded on the principles of the
Transaction Agreements, (iii) specifies an Announced Cure Date and (iv) is
publicly announced by DirecTV upon termination of the Combination Agreement, in
each case to the extent not violative of applicable Law.

 

5

--------------------------------------------------------------------------------

Current Operating Expenses: with respect to each of Sky Brasil and DTV Brasil,
its current operating expenses (including without limitation amounts payable as
of the Signing Date under Sky Brasil Programming Agreements or DTV Brasil
Programming Agreements, as applicable) that are paid consistent with past
practice in the ordinary course, but no more than 90 days after the date payment
is first due.

 

Darlene: Darlene Investments, LLC, a Cayman Islands limited liability company.

 

DirecTV: The DIRECTV Group, Inc. (formerly known as Hughes Electronics
Corporation), a Delaware corporation.

 

DirecTV Acquisition: as defined in Recital B of the Participation Agreement.

 

DirecTV Group: DirecTV, its Controlled Affiliates including DTVLA and the DTV
Brasil Quotaholders, and DTV Brasil and DTV Brasil Sub.

 

DirecTV Party: DirecTV and its Affiliates, and their respective officers,
directors, employees, agents, advisers, representatives, successors and
permitted assigns.

 

DirecTV Registration Rights Agreement: the Registration Rights Agreement, dated
as of the Signing Date, by and between Globo and DirecTV.

 

DirecTV Threshold Amount: as defined in Section 8.1(b) of the Combination
Agreement.

 

Disclosing Party: as defined in Section 8.2(e)(i) of the Participation
Agreement.

 

Disposition Right: as defined in Section 1.3(a)(i) of the Participation
Agreement.

 

DTH: direct-to-home.

 

DTH Techco: DTH Techco Partners, a Delaware general partnership.

 

DTH Techco Financing Agreements: the agreements, documents and instruments
listed in Schedule 1 to this Annex A. For the avoidance of doubt, each reference
to a draft agreement, document or instrument in Schedule 1 shall be understood
to include a reference to any subsequent drafts or executed copies of such
agreement, document or instrument, including as may have been amended, and each
reference to an agreement, document or instrument or draft agreement, document
or instrument in Schedule 1 shall be understood to include a reference to all
guarantees and affirmations or other confirmations of guarantees issued by Globo
or any other member of the Globo Group in connection therewith, and all
amendments, supplements, waivers and modifications of such agreements,
guarantees, affirmations, confirmations and other documents and instruments.

 

6

--------------------------------------------------------------------------------

DTH Techco Release: the release in full of each member of the Globo Group from
all obligations in connection with the relevant DTH Techco Financing Agreements
(including, for the avoidance of doubt, all guarantees relating thereto issued
by Globo) in a form acceptable to Globo, provided that Globo shall accept any
form that is reasonable.

 

DTH USA Inc.: DTH USA Inc., a Delaware corporation.

 

DTV Affiliate Agreements: as defined in Section 4.6(a) of the Combination
Agreement.

 

DTV Brasil Ancine Sub: DirecTV Programações Videofonograficas Ltda., a Brazilian
limitada.

 

DTV Brasil: Galaxy Brasil Ltda., a Brazilian limitada.

 

DTV Brasil Business: the business and operations of DTV Brasil as conducted in
the DTV Brasil Ordinary Course of Business.

 

DTV Brasil Group: TV Capital, DTV Brasil and the DTV Brasil Subs.

 

DTV Brasil Licenses: as defined in Section 4.7 of the Combination Agreement.

 

DTV Brasil Material Adverse Effect: any event, occurrence, fact, condition,
change, development, circumstance or other effect that, individually or in the
aggregate, is or would be reasonably (a) expected to have a materially adverse
effect on the DTV Brasil Business as of the date of determination, excluding any
such effect resulting from (i) changes in the Brazilian economy or the
programming distribution industry in general, (ii) any public announcement of
any of the Transaction Agreements, (iii) changes in applicable law with respect
to which the DTV Brasil Group is using commercially reasonable efforts to be in
compliance or (iv) delay in obtaining Required Approvals which the Parties are
using commercially reasonable efforts to obtain in accordance with Section 8.3
of the Participation Agreement or (b) likely to have any material adverse effect
or otherwise materially restrict the ability of any member of the DirecTV Group
to perform its obligations under any Transaction Agreement (including without
limitation with respect to the Migration); provided that the exclusion set forth
in clause (a)(iv) above shall not apply for purposes of Section 6.1(b) of the
Combination Agreement.

 

DTV Brasil Material Contracts: as defined in Section 4.8(a) of the Combination
Agreement.

 

DTV Brasil Ordinary Course of Business: the ordinary course of business of DTV
Brasil consistent with past practice since February 24, 2004, and if no relevant
past practice since February 24, 2004 exists, in compliance, in all material
respects, with all applicable Laws.

 

7

--------------------------------------------------------------------------------

DTV Brasil Programming Agreements: as defined in Section 4.8(a)(i) of the
Combination Agreement.

 

DTV Brasil Quotaholders: TV Capital and GLA.

 

DTV Brasil Quotas: at any time, the issued quotas, par value R$1, of DTV Brasil
at such time.

 

DTV Brasil Subs: the Controlled Affiliates of DTV Brasil at any given time,
including, without limitation, DTV Brasil Ancine Sub and Galaxy Latin America
Brasil Ltda. to the extent that DTV Brasil Ancine Sub or Galaxy Latin America
Brasil Ltda. is a Controlled Affiliate of DTV Brasil at such time.

 

DTV Brasil Transponder Agreements: as defined in Section 4.8(ii) of the
Combination Agreement.

 

DTV Existing Brazilian Content: means the channels listed on Annex I to the
Parent Content Agreement.

 

DTV Indemnitees: as defined in Section 8.2(a) of the Combination Agreement.

 

DTVLA: DIRECTV Latin America, LLC, a Delaware limited liability company.

 

DTVLA Credit Agreement: Credit Agreement, dated as of February 24, 2004, among
DTVLA, as borrower, DirecTV, as lender, and the Material Subsidiaries (as
defined in the Credit Agreement) of DTVLA, as guarantors.

 

DTV Parties: DirecTV, DTVLA and GLA.

 

DTV Related Person: as defined in Section 4.6(a) of the Combination Agreement.

 

Equity Funding: with respect to any entity, Quotaholder Funding of such entity
convertible into equity of such entity.

 

Evaluation Material: as defined in the Brazil Confidentiality Agreement.

 

Exchange Rights: the right to exchange the equity interest in Sky Brasil for
Stock of News or DirecTV or cash in accordance with the Exchange Rights
Agreement.

 

Exchange Rights Agreement: the Exchange Rights Agreement by and among Globo,
News and DirecTV dated as of the Signing Date.

 

Exhibit: as used in any Transaction Agreement, the exhibit to such Transaction
Agreement (unless the context otherwise requires).

 

8

--------------------------------------------------------------------------------

Existing Confidentiality Agreements: the Brazil Confidentiality Agreement and
the Brazil Clean Room Agreement.

 

FGTS: Fundo de Garantia pelo Tempo de Serviço.

 

First Party: as defined in Section 8.2(c) of the Participation Agreement.

 

GLA: GLA Brasil Ltda., a Brazilian limitada.

 

Globo: Globo Comunicações e Participações S.A., a Brazilian sociedade anônima.

 

Globo Designee: the applicable Globo Controlled Affiliate acting as the
representative or agent of Sky Brasil and, after Closing, the Combined
Businesses, in the acquisition of DTH rights in Content pursuant to the Agency
Agreement.

 

Globo Group: Globo, its Controlled Affiliates and, for so long as Globo and TV
Globo are under common Control, TV Globo and its Controlled Affiliates.

 

Globo Indemnitee: as defined in Section 9.3(b) of the Participation Agreement.

 

Globo Monetization: an assignment, transfer, hypothecation, pledge or other
disposition by Globo or an Affiliate, or the granting by Globo or an Affiliate
of a security interest in all or a portion of its Sky Brasil Quotas, to one or
more financial institutions where the purpose of the transaction is the
monetization of all or a portion of the face value of any Exchange Right
available to Globo or its Affiliate.

 

Globo Prohibited Transferee: any Person set forth in Schedule 2 to this Annex A
or, in each case, any Affiliate thereof, it being understood that, to the extent
any such entity is Controlled by or for the benefit of any individual, any other
entity Controlled by or for the benefit of any member of the same immediate
family as such first individual shall be deemed to be an Affiliate of the first
entity.

 

Globo Transfer: the sale, exchange, monetization or other transfer by Globo or
any member of the Globo Group of any equity interest in Sky Brasil, provided
that pledges, mortgages and hypothecations of equity to financial institutions
(including pursuant to a Globo Monetization) shall not be deemed to be a Globo
Transfer unless and until such equity is sold following a foreclosure by the
lender or creditor thereunder.

 

Globo Transfer Event: a Globo Transfer (other than within the Globo Group) that
results, or any such Globo Transfer that would have resulted (in the event such
Globo Transfer is not completed due to failure to obtain any necessary
Governmental Approval and Globo delivers notice to News that it elects to have
such proposed Globo Transfer treated as a Globo Transfer Event), in the Globo
Group ceasing to own at least 25% of the equity constituting the Retained Sky
Interest of Globo.

 

9

--------------------------------------------------------------------------------

Governmental Approval: any Consent of, with or to any Governmental Authority.

 

Governmental Authority: any nation or government, any state or other political
subdivision thereof; any entity, authority or body exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including, without limitation, any government authority, agency,
department, board, commission or instrumentality of Brazil, any federal, state
or municipality of Brazil or any political subdivision thereof; any court,
tribunal or arbitrator; and any self-regulatory organization.

 

Income Tax: any Tax computed in whole or in part based on or by reference to net
income or based on or by reference to gross receipts (including all interest and
penalties thereon and additions thereto).

 

Indebtedness: as applied to any Person, means, without duplication, as principal
or guarantor, any financial or capital debt, including without limitation (a)
all indebtedness for borrowed money, (b) all obligations evidenced by a note,
bond, debenture, letter of credit, draft, banker’s acceptance or similar
instrument, (c) that portion of obligations with respect to capital leases that
is properly classified as a liability on a balance sheet in conformity with
Brazilian GAAP, (d) notes payable and drafts accepted representing extensions of
credit, (e) any obligation owed for all or any part of the deferred purchase
price of property or services, which purchase price is due more than six months
from the date of incurrence of the obligation in respect thereof and (f) all
indebtedness and obligations of the types described in the foregoing clauses (a)
through (e) to the extent secured by any Lien on any property or asset owned or
held by that Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of that Person.

 

Indemnified Parties: (a) as used in the Participation Agreement, as defined in
Section 9.1 of the Participation Agreement, (b) as used in the Combination
Agreement as defined in Section 8.4 of the Combination Agreement or (c) as used
in the Parent Content Agreement, as defined in Section 5.1 of the Parent Content
Agreement.

 

Indemnifying Party: as used in the Participation Agreement, as defined in
Section 9.3 of the Participation Agreement.

 

Independent Accountant: any accounting firm approved (which approval shall not
be unreasonably withheld) by both the applicable Indemnifying Party and
Indemnified Party.

 

Individual Sky Party Threshold Amount: as defined in Section 8.2(b) of the
Combination Agreement.

 

10

--------------------------------------------------------------------------------

Interim Period: the period from the Signing Date to the earlier of: (i) the
Closing, and (ii) the date on which none of News, DirecTV or any of their
respective Affiliates (including without limitation Sky Brasil and its
Controlled Affiliates) has a Competing Interest in a Competing Platform.

 

Knowledge: with respect to any Person other than natural persons, the actual
knowledge of its officers, directors and senior management and, in the case of
natural persons, the actual knowledge of such person.

 

Law: all applicable provisions of all (a) constitutions, treaties, statutes,
laws (including the common law), codes, rules, regulations, ordinances or orders
of any Governmental Authority, (b) Governmental Approvals and (c) orders,
decisions, injunctions, judgments, awards and decrees of or agreements with any
Governmental Authority.

 

Liability: any financial or capital debt or other liability or obligation of any
kind or nature (whether known or unknown, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, conditional or otherwise and whether or
not required to be reflected by Brazilian GAAP) and including all applicable
interest, expense and Taxes thereon.

 

Liberty: Liberty Media International Inc., a Delaware corporation.

 

Liberty Consent: Liberty Acknowledgment, Consent and Agreement, dated as of the
Signing Date, by Liberty.

 

Lien: any mortgage, pledge, deed of trust, hypothecation, right of others,
claim, security interest, encumbrance, burden, title defect, title retention
agreement, lease, sublease, license, occupancy agreement, easement, covenant,
condition, encroachment, voting trust agreement, interest, option, right of
first offer, negotiation or refusal, proxy, lien, charge or other restrictions
or limitations of any nature whatsoever, including any such lien as may arise
under any Contract.

 

Limitada: sociedade limitada.

 

Litigation: any action, cause of action, claim, demand, suit, proceeding,
citation, summons, subpoena, inquiry or investigation of any nature, civil,
criminal, regulatory or otherwise, in law or in equity, pending or threatened,
by or before any court, tribunal, arbitrator or other Governmental Authority.

 

Loss: any claims, demands, damage, disbursement, expense, tax, liability,
judgment, loss, deficiency, obligation, penalty, royalty, Litigation, settlement
or out-of-pocket cost, of any kind or nature (whether civil or criminal, or
based on negligence, trespass, intentional tort, strict liability, contribution
or indemnification, whether absolute or contingent, accrued or unaccrued,
liquidated or unliquidated or otherwise and whether or not resulting from third
party claims), whether foreseeable

 

11

--------------------------------------------------------------------------------

or unforeseeable, including interest or other carrying costs, penalties, and
related reasonable legal, accounting and other professional fees and expenses
(including in connection with the investigation or defense of any of the
foregoing or in asserting, preserving or enforcing rights).

 

Master Agreement: Master Agreement, dated as of November 1, 1995, between News
and Globo, as amended by the Letter Agreement, dated October 13, 2000, between
Globo and News.

 

Material Adverse Effect: with respect to any Person, any event, occurrence,
fact, condition, change, development, circumstance or other effect that is or
would be (a) materially adverse to the financial condition of such Person and
its Controlled Affiliates, taken as a whole, as of the date of determination or
(b) reasonably likely to have any material adverse affect or otherwise
materially restrict the ability of such Person and its Controlled Affiliates,
taken as a whole, to perform their obligations under the Transaction Agreements.

 

MCOP: Sky Multi-Country Partners, a Delaware general partnership.

 

MCOP Agreements: the agreements, documents and instruments listed on Schedule 4
to this Annex A. For the avoidance of doubt, each reference to a draft
agreement, document or instrument in Schedule 4 shall be understood to include a
reference to any subsequent drafts or executed copies of such agreement,
document or instrument, including as may have been amended, and each reference
to an agreement, document or instrument or draft agreement, document or
instrument in Schedule 4 shall be understood to include a reference to all
guarantees and affirmations or other confirmations of guarantees issued by Globo
or any other member of the Globo Group in connection therewith, and all
amendments, supplements, waivers and modifications of such agreements,
guarantees, affirmations, confirmations and other documents and instruments.

 

MCOP MOU: the Multi-Country DTH Platform Memorandum of Understanding (including
the Schedule of Terms), between News, Globo, Grupo Televisa, S.A. and
Tele-Communications International, Inc. (now known as Liberty Media
International Inc.), dated on or about July 24, 1996.

 

MCOP Transponder Agreements: the Transponder Service Agreement between PanAmSat
and MCOP, dated as of March 5, 1998, as amended, supplemented, waived or
modified, any related agreement and all guarantees and affirmations of
guarantees issued by Globo in connection with the foregoing.

 

Migration: the migration of DTV Brasil subscribers to Sky Brasil as the
surviving platform, and the use by Sky Brasil as surviving platform of all
material assets (including without limitation the uplink facility and other
operational facilities as may be agreed by News, DirecTV and Globo) of DTV
Brasil.

 

12

--------------------------------------------------------------------------------

New Brazilian Content: means, with respect to any individual Platform, Content
not carried by such Platform on the Signing Date (i) that is originally produced
predominantly in the Portuguese language or the principal market for which is
the Brazilian market (as measured by economic value, viewer demand or number of
subscribers), (ii) that, or the production of which, predominantly involves
Brazilians or (iii) that consists predominantly of event coverage, news,
commentary and/or analysis related to such events, whether acquired from third
parties or originally created, where a portion of such Content, and the
marketability of which, is significantly driven by (a) Brazilian athletes
participating in events, in an individual or collective manner or (b) events
which take place in Brazil. For purposes of this definition, events shall mean
events (x) owned, organized or promoted by a Brazilian Person or other Person
whose operations and/or activities are located principally in Brazil or (y) a
substantial portion of the Content of which is Brazilian soccer teams or an
event that includes a Brazilian national soccer team. Further, for purposes of
this definition, none of the following shall be deemed New Brazilian Content:
(1) events described by clause (iii) in the first sentence of this definition
that were completed more than twelve months earlier, (2) solely instructional or
educational events that have athletes as participants and (3) events described
by clause (iii) in the first sentence of this definition but in which the
participants are predominantly under the age of 16. Any particular commercial
unit of Content acquired or distributed as such by the applicable Platform shall
not be deemed New Brazilian Content solely by virtue of the inclusion in it of
immaterial amounts of Content that qualify as New Brazilian Content under the
definition above (e.g., small amounts of interstitial Portuguese language
programming or, in the case of 24-hour channels, small blocks of Brazilian
programming not exceeding an average of 1 hour per day each week, but in any
case no more than 3 hours in any one day, (the “Daily Average”) and an average
of 7 hours per week, but in any case no more than 10 hours in any one week, (the
“Weekly Average”), where such averages are calculated on a four-week basis.
Repeat showings of any item of Content twice within 24 hours from the original
transmission shall not count towards the Daily Average or the Weekly Average.
The restriction contained in this definition shall also apply to Content
benefiting from an ANCINE scheme and that are produced with funds from an ANCINE
scheme. For the avoidance of doubt, Content carried by DTV Brasil at any time
that (A) satisfies any of clauses (i), (ii) or (iii) in the first sentence of
this defintion (regardless of whether or not carried by DTV Brasil at the
Signing Date but subject to the other provisions of this definition) and (y) is
not carried by Sky Brasil at such time shall constitute New Brazilian Content,
and shall be subject to News’ and Globo’s rights and obligations in connection
therewith, for purposes of carriage by Sky Brasil, and Existing Brazilian
Content (other than Globo Content that is renewed as of June 30, 2011) shall
constitute New Brazilian Content upon expiry of the applicable Content provider
Contracts. Any other Content that, as of the date hereof, does not currently
constitute Brazilian Content but that, upon renewal of the term of the
applicable Content provider Contract, has suffered such material change so as to
cause it to fall within clause (i), (ii) or (iii) of the first sentence of this
definition shall also constitute New Brazilian Content.

 

13

--------------------------------------------------------------------------------

News: The News Corporation Limited, an Australian corporation.

 

News Group: News and its Controlled Affiliates.

 

News Parent: as defined in Section 10.7(d) of the Participation Agreement.

 

News Party: News and its Affiliates, and their respective officers, directors,
employees, agents, advisers, representatives, successors and permitted assigns.

 

News Prohibited Transferee: as set forth on Schedule 5 or, in each case, any
Affiliate thereof, (it being understood that, to the extent any such entity is
Controlled by or for the benefit of any individual, any other entity Controlled
by or for the benefit of any member of the same immediate family shall be deemed
to be an Affiliate of the first entity).

 

News Registration Rights Agreement: the Registration Rights Agreement, dated as
of the Signing Date, by and between Globo and News.

 

Non-Globo Restrictions: as defined in Section 8.3(c) of the Participation
Agreement.

 

Non-Permitted Liabilities: means, with respect to each member of the DTV Brasil
Group and each member of the Sky Brasil Group, (i) Liabilities of such member
relating to any period or portion thereof occurring on or prior to the Signing
Date (other than Liabilities relating to (v) interest accruing after the Signing
Date with respect to any Liability relating to any period or portion thereof
occurring on or prior to the Signing Date, (w) claims by any Person alleging an
employment relationship with such member, (x) consumer-related claims brought by
current or past subscribers, (y) the Liabilities set forth in Schedule 6 and (z)
Current Operating Expenses), in each case whenever arising, and whether or not
subject to any extension or installment program, to the extent that such
Liabilities (or portions thereof) exceed in aggregate R$27,909,498 (in the case
of the DTV Brasil Group) or R$29,160,218 (in the case of the Sky Brasil Group),
in each case as adjusted for inflation in accordance with Sistema Especial de
Liquidação e de Custódia, published by the Central Bank of Brazil, (ii)
Liabilities relating to any minimum subscriber guarantee or other financial
commitment to a Content provider (other than, in the case of Sky Brasil, the
Telecine Services) which guarantee or commitment is in effect as of the Signing
Date or the Closing Date, including, in the case of DTV Brasil, any and all
Liabilities under, with respect to or in connection with, the Shortfall
Guarantee Agreement, executed February 12, 2004, between DirecTV and Brasil
Distribution, L.L.C.,and (iii) all Indebtedness (other than the Indebtedness set
forth in Schedule 5.9(a) or 5.9(b) of the Combination Agreement) in existence on
the Closing Date.

 

Notice Period: as defined in Section 9.3(a) of the Participation Agreement.

 

14

--------------------------------------------------------------------------------

Order: orders, judgments, decrees, investigations or injunctions issued by any
Governmental Authority.

 

Organizational Documents: as to any Person, its (i) certificate or articles of
incorporation or similar corporate charter, or other instrument of organization,
(ii) contrato social, Articles of Association, by-laws or other similar
instrument and (iii) and other governing corporate documents or organizational
documents.

 

PanAmSat: PanAmSat International Systems, Inc., a Delaware corporation, as
successor-in-interest to PanAmSat Corporation, a Delaware corporation.

 

PanAmSat Claim Amount: as defined in Section 2.3 of the Participation Agreement.

 

PanAmSat Release: the release in full of each member of the Globo Group from all
obligations under the Sky Brasil Transponder Agreements and the MCOP Transponder
Agreements (including, for the avoidance of doubt, all guarantees relating
thereto issued by Globo) to be executed and delivered by PanAmSat in a form
acceptable to Globo, provided that Globo shall accept any form that is
reasonable.

 

PanAmSat Settlement Amount: as defined in Section 2.3 of the Participation
Agreement.

 

Parent Content Agreement: the Parent Content Agreement, dated as of the Signing
Date, by and among Globo, News and DirecTV.

 

Participation Agreement: the Participation Agreement, dated as of the Signing
Date, by and among Globo, News and DirecTV.

 

Parties: as used in any agreement, the parties to such agreement (unless the
context otherwise requires) and their successors and permitted assigns.

 

Partnership Agreements: the agreements, documents and instruments listed on
Schedule 6 to this Annex A. For the avoidance of doubt, each reference to a
draft agreement, document or instrument in Schedule 7 shall be understood to
include a reference to any subsequent drafts or executed copies of such
agreement, document or instrument, including as may have been amended, and each
reference to an agreement, document or instrument or draft agreement, document
or instrument in Schedule 7 shall be understood to include a reference to all
guarantees and affirmations or other confirmations of guarantees issued by Globo
or any other member of the Globo Group in connection therewith, and all
amendments, supplements, waivers and modifications of such agreements,
guarantees, affirmations, confirmations and other documents and instruments.

 

15

--------------------------------------------------------------------------------

Partnership Releases: each of the releases to be entered into in substantially
the form of Exhibit 1 attached to the Participation Agreement.

 

Paying Subscribers: subscribers that have been DTV Brasil subscribers
continuously for at least six months immediately preceding the Closing and that,
at the Closing, were current with their payments on the service, it being
understood that, for the purpose of this definition, a subscriber shall be
deemed current with its payment if its payment for any unpaid invoice is not
more than thirty (30) days past due.

 

Percentage Interest: the percentage equal to the quotient of (i) the number of
issued and outstanding Sky Brasil Quotas owned by a Quotaholder at any time
divided by (ii) the aggregate number of Quotas issued and outstanding at such
time, in the case of each of clauses (i) and (ii), on a fully-diluted basis
after giving effect, either through a deemed or an actual conversion in
accordance with Section 4.4 of the Amended Sky Brasil Quotaholders Agreement or
the Closing Sky Brasil Quotaholders Agreement, as applicable, of the Sky 2004
Sky Equity Funding and all other uncapitalized or unconverted Equity Funding
made by all Quotaholders, provided that any such conversion shall only be a
deemed capitalization or conversion and not an actual capitalization or
conversion unless approved in accordance with the Amended Sky Brasil
Quotaholders Agreement or the Closing Sky Brasil Quotaholders Agreement, as
applicable.

 

Permitted Liens: (a) Liens reserved against in the Balance Sheet, to the extent
so reserved, (b) Liens for Taxes not yet due and payable, or which are being
contested in good faith and by appropriate proceedings if adequate reserve with
respect thereto are maintained on the books of DTV Brasil or Sky Brasil, as
applicable, in accordance with Brazilian GAAP, (c) statutory preferences created
or existing solely pursuant to applicable Laws and (d) those Liens that (i) are
set forth in Schedule 8 hereto] and (ii) individually and in the aggregate with
all other Permitted Liens, do not and will not materially detract from the value
of any of the property or assets of DTV Brasil or Sky Brasil, as applicable, or
materially interfere with the use thereof as currently used, or otherwise be
reasonably likely to have or result in a DTV Brasil Material Adverse Effect or
Sky Brasil Material Adverse Effect.

 

Person: any natural person, firm, partnership, association, corporation,
company, limited liability company, trust, joint stock company, business trust,
unincorporated association, joint venture, investment fund, Governmental
Authority or other entity.

 

Programco: Sky Entertainment Programming Latin America, LLC, a Delaware limited
liability company.

 

Promancor: Promancor S.A., a Uruguayan sociedade anônima.

 

16

--------------------------------------------------------------------------------

Pro-Rata Share: with respect to any Sky Party, the Percentage Interest of such
Sky Party in Sky Brasil as of the date the applicable representation or warranty
is given, or as of the date the applicable covenant is breached.

 

Quotaholder Funding: with respect to any entity, any capital contribution or
other funding or advance (including through the deferral of trade receivables
but excluding the amount of R$7,570,994 plus accrued interest owed by Sky Brasil
to Globo with respect to programming, the payment of which has been deferred and
is now payable on or prior to February 28, 2005 pursuant to Section 2.4 of the
Participation Agreement), whether in the form of AFACs, debt or otherwise.

 

Quotaholders Agreement: at any time on or after Closing, the Closing Sky Brasil
Quotaholders Agreement and at all other times, the Amended Sky Brasil
Quotaholders Agreement, in each case as may be amended from time to time.

 

Quotas: with respect to any entity, the issued and outstanding quotas of such
entity.

 

Real / Reais: the lawful currency of the Federative Republic of Brazil.

 

Receiving Party: as defined in Section 8.2(c) of the Participation Agreement.

 

Related Agency Agreements: at any time, the agreements to or by which Net Brasil
S.A. (or other Globo Designee) is party or is otherwise bound pursuant to the
Agency Agreement relating to broadcast or other Brazilian Content to be carried
by Sky Brasil or, after the Closing, DTV Brasil and such other agreements by
which Sky Brasil, DTV Brasil or a member of the Globo Group may be bound at such
time with respect to any Content to be provided to Sky Brasil or DTV Brasil by a
member of the Globo Group or otherwise in connection with the Agency Agreement.

 

Related Agreements: the Combination Agreement, the Amended Sky Brasil
Quotaholders Agreement, the Amended Sky Brasil Articles of Association, the News
Registration Rights Agreement, the DirecTV Registration Rights Agreement, the
Exchange Rights Agreement, the Parent Content Agreement, the Sky Purchase
Agreement and, if there is no Closing as described in Section 1.3 of the
Participation Agreement, the Releases.

 

Release and Waiver: the Release and Waiver of Claims entered into on the Signing
Date by and between Globo and News.

 

Releases: the PanAmSat Release, the Partnership Releases, the DTH Techco
Releases and the Sky Affiliates Releases.

 

Relevant Affiliate: with respect to any Sky Party or DTV Party, each of its
Affiliates that shall be a party to any Ancillary Closing Agreement.

 

17

--------------------------------------------------------------------------------

Replacement Content: any Globo Content offered in replacement of or in addition
to then-current Globo Content, provided that (a) the resulting per-subscriber
cost of all Globo Content at such time is not changed as a result, (b) the
distribution terms and packaging of such replacements are substantially the same
as the Globo Content being replaced and (c) such replacements are commercially
reasonable, including as to the timing of such changes and the format and type
of such replacement Content.

 

Representatives: as to any Person, its accountants, counsel, consultants
(including actuarial, environmental and industry consultants), officers,
directors, employees, agents and other advisors and representatives.

 

Required Approvals: the Governmental Approvals set forth or required to be set
forth on Schedules 3.4(b) and 4.4(b) to the Combination Agreement.

 

Required Disposition: any ongoing disposition in full by News, DirecTV and their
respective Affiliates of the Competing Interest held by them in a Competing
Platform which is occurring pursuant to the exercise by Globo of the Disposition
Right and which Globo, News and DirecTV reasonably expect to be completed within
90 days of the exercise of such Disposition Right, subject to one 90-day
extension period if necessary to obtain regulatory approvals that News, DirecTV
and their respective Affiliates have been using commercially reasonable efforts
to obtain.

 

Retained Sky Interest: with respect to Globo or News, (a) at any time prior to
the Closing, the Sky Brasil Quotas held by the Globo Group or the News Group, as
applicable, as of the Signing Date or (b) at any time on or after the Closing,
the Sky Brasil Quotas held by the Globo Group or the News Group, as applicable,
as of Closing, in each case (i) after giving effect to the conversion of all
2004 Sky Equity Funding and any other Equity Funding made but not yet
capitalized or converted as of the Signing Date or the Closing Date, as
applicable, in accordance with Sections 4.4 through 4.7 of the Amended Sky
Brasil Quotaholders Agreement or the Closing Sky Brasil Quotaholders Agreement,
as applicable, provided that any such conversion shall only be a deemed and not
an actual conversion until the Value Determination Date, (ii) as adjusted to
include additional securities of Sky Brasil issued in respect thereof (including
debt or securities convertible, exchangeable or exercisable for such securities)
by way of stock or quota dividend, stock or quota split, reverse split,
reorganization, reclassification, recapitalization or other corporate action and
(iii) in the case of Globo, as may be reduced pursuant to a transfer by Globo of
Sky Brasil Quotas pursuant to Section 10.2(d) of the Participation Agreement or
Section 8.7(c) of the Combination Agreement or pursuant to Section 4.5 of the
Amended Sky Brasil Quotaholders Agreement or the Closing Sky Brasil Quotaholders
Agreement.

 

Revenue Taxes: means any and all Taxes on gross revenues of any kind imposed by
Brazilian tax authorities, including, without limitation, PIS and COFINS.

 

18

--------------------------------------------------------------------------------

Schedule: as used in any Transaction Agreement, the schedule to such Transaction
Agreement (unless the context otherwise requires).

 

Section: as used in any Transaction Agreement, the section to such Transaction
Agreement (unless the context otherwise requires).

 

Serviceco: Sky Latin America, LLC, a Delaware limited liability company.

 

Shutdown: with respect to any company, the full and permanent shut down of all
operations and business of such company (including without limitation with
respect to the distribution of programming services to subscribers).

 

Signing Date: the date on which the Participation Agreement and the Related
Agreements are executed and delivered.

 

Sky Brasil Funding Obligations: any and all obligations as a quotaholder, under
the Amended Sky Brasil Quotaholders Agreement, the Articles of Association, any
agreement relating to the funding of Sky Brasil, any approved budget or
otherwise, and whether arising prior to, on or after the Signing Date, to make
any capital contributions to, provide any other funding or advance (whether
through the deferral of trade receivables or in the form of AFACs, debt or
otherwise) to, or provide any guarantees (other than, subject to the provisions
of the Participation Agreement and the Combination Agreement, those in effect as
at the Signing Date) for the benefit of Sky Brasil.

 

Sky Brasil Group: means Sky Brasil and each of the Sky Brasil Subs.

 

Sky Brasil Information: as defined in Annex I of the Participation Agreement.

 

Sky Brasil Licenses: as defined in Section 3.7 of the Combination Agreement.

 

Sky Brasil Material Adverse Effect: any event, occurrence, fact, condition,
change, development or effect that, individually or in the aggregate, is or
would be reasonably (a) expected to have a materially adverse effect on the
business and operations of Sky Brasil, as conducted in the ordinary course, as
of the date of determination excluding any such effect resulting from (i)
changes in the Brazilian economy or the programming distribution industry in
general, (ii) any public announcement of any of the Transaction Agreements,
(iii) changes in applicable law with respect to which the Sky Brasil Group is
using commercially reasonable efforts to be in compliance or (iv) delay in
obtaining Required Approvals which the Parties are using commercially reasonable
efforts to obtain in accordance with Section 8.3 of the Participation Agreement
or (b) likely to have any material adverse effect or otherwise materially
restrict the ability of any Sky Party or any member of the Sky Brasil Group to
perform its obligations under any Transaction Agreement; provided that the
exclusion set forth in clause (a)(iv) above shall not apply for purposes of
Section 6.1(b) of the Combination Agreement.

 

19

--------------------------------------------------------------------------------

Sky Brasil Material Contracts: as defined in Section 3.8(a) of the Combination
Agreement.

 

Sky Brasil Programming Agreements: Contracts pursuant to which any member of the
Sky Brasil Group acquires, or has any rights or obligations to distribute or
carry, Content, including affiliate, distribution or similar Contracts,
including without limitation the Agency Agreement and the Related Agency
Agreements.

 

Sky Brasil Quotaholders: as defined in Section 3.2(a) of the Combination
Agreement.

 

Sky Brasil Quotaholders Agreement: the Amended and Restated Quotaholders’
Agreement, dated as of July 31, 1997, among DTH Comercio e Participações Ltda.,
News DTH do Brasil Comércio e Participações Ltda., TCI International Brasil
Ltda. and Sky Brasil, as amended (other than pursuant to the Amended Sky Brasil
Quotaholders Agreement).

 

Sky Brasil Quotas: at any time, the issued and outstanding quotas of Sky Brasil,
par value R$1.00, at such time.

 

Sky Brasil Subs: the Controlled Affiliates of Sky Brasil at any given time,
including, without limitation, Promancor and Net Sat USA to the extent that
Promancor or Net Sat USA is a Controlled Affiliate of Sky Brasil at such time.

 

Sky Brasil Transponder Agreements: the Second Amended and Restated Transponder
Purchase and Sale Agreement between PanAmSat and Sky Brasil, dated as of March
5, 1998, as amended, supplemented, waived or modified, any related agreements
and all guarantees and affirmations and confirmations of guarantees issued by
Globo in connection with the foregoing.

 

Sky Parties: Globo and News.

 

Sky Partners: Sky Latin America Partners, a Delaware general partnership.

 

Sky Party Agreements: as defined in Section 3.6(a) of the Combination Areement.

 

Sky Party Indemnitees: as defined in Section 8.1(a) of the Combination
Agreement.

 

Sky Purchase Agreement: the MCOP Purchase and Sale Agreement, to be entered into
between Globo and DirecTV pursuant to which Globo will transfer and sell to
DirecTV its indirect interest in DTH USA, Inc. (or, in certain circumstances,
MCOP), DTH Techco and Sky Partners, subject to certain terms and conditions to
be included therein.

 

Sky Related Person: as defined in Section 3.6(a) of the Combination Agreement.

 

20

--------------------------------------------------------------------------------

Specified Closing Conditions: (A) receipt of the Required Approvals or, if
agreed by the applicable parties, such parties’ reasonable expectation that the
Required Approvals will be received, provided News and DirecTV and their
respective Controlled Affiliates are and have been using their respective
commercially reasonable efforts to obtain such Required Approvals, (B) (i)
conditions to the Closing, the satisfaction of which is in the sole control of
Globo or any of its Controlled Affiliates and (ii) the conditions set forth in
Section 6.3(b) and (c) of the Combination Agreement to the extent the failure to
meet such conditions is due solely to the failure of Globo or any of its
Controlled Affiliates to execute and deliver any such Ancillary Closing
Agreement or execute the Closing Sky Brasil Articles of Association and (C)
immaterial procedural Closing conditions such as delivery of stock certificates,
if applicable (provided that, in the case of clause (C), such immaterial
procedural Closing conditions are met within ten days thereof).

 

Stock: (i) with respect to News, its ordinary shares, preferred limited voting
ordinary shares and American Depositary Shares representing ordinary shares or
preferred limited voting ordinary shares (or, following the reorganization of
News resulting in News Parent becoming the ultimate parent of News and its
subsidiaries, the analogous classes of stock of News Parent) and (ii) with
respect to DirecTV, its common stock.

 

Subscriber Contribution: as defined in Section 1.2 of the Combination Agreement.

 

Subscriber Report: as defined in Section 1.2 of the Combination Agreement.

 

Tax Returns: any report, return, declaration, claim for refund, information
report or return or statement required to be supplied to a taxing authority in
connection with Taxes, including any schedule or attachment thereto or amendment
thereof.

 

Taxes: means all taxes of any kind, including all federal, state, provincial,
territorial, municipal, local or foreign income, profits, franchise, gross
receipts, environmental, customs, duties, net worth, sales, use, goods and
services, withholding, value added, ad valorem, employment, social security
(including COFINS, PIS, CSLL and other social contributions on profits and for
educational funds), workers’ compensation (including INSS), disability,
occupation, pension, real property (including State or Municipal Real Estate Tax
(IPTU, ITBI)), personal property (tangible and intangible), stamp, transfer,
conveyance, production, excise, bank account withdrawals (CMPF), financial
transaction (including IOF and CPMF), payroll, severance (including FGTS),
excise (IPI), services (ISS), import, export, value added (ICMS), remittances of
royalties abroad (CIDE-Royalties), remittances of payments for international
programming abroad (CONDECINE) and other taxes, withholdings, duties, levies,
imposts and other similar charges and assessments (including any and all fines,
penalties and additions attributable to or otherwise imposed on or with respect
to any such taxes, charges, fees, levies or other assessments, and interest
thereon) imposed by or on behalf of any taxing authority or Governmental Agency,
against the taxpayer or Person as defined in the applicable legislation.

 

21

--------------------------------------------------------------------------------

Telecine: Telecine Programaçao de Filmes Ltda., a Brazilian limitada.

 

Telecine Services: any and all programming services and all multiplexes thereof,
provided from time to time by Telecine.

 

Televisa: means GrupoTelevisa S.A., a Mexican corporation.

 

Televisa Content: means any Content owned or produced, or any channel or
commercial unit of Content a material portion of which is controlled or
programmed by a member of the Televisa Group.

 

Televisa Group: means Televisa and its Controlled Affiliates.

 

Temporary Waiver: as defined in Section 1.1 of the Participation Agreement.

 

Terminated DTV Affiliate Agreement: as defined in Section 4.6(b) of the
Combination Agreement.

 

Terminated Sky Party Agreements: as defined in Section 3.6(b) of the Combination
Agreement.

 

Termination Factor: as defined in the applicable Quotaholders Agreement.

 

Transaction Agreements: the Participation Agreement, the Combination Agreement,
the Release and Waiver, the Related Agreements and the Ancillary Closing
Agreements, as may be amended from time to time.

 

Transfer: any transfer, sale, assignment, exchange, mortgage, pledge,
hypothecation or other disposition of any Quotas or any interest therein.

 

Transfer Rights: the rights to Transfer Sky Brasil Quotas set forth in Article
IX of the Amended Sky Brasil Quotaholders Agreement or Article IX of the Closing
Sky Brasil Quotaholders Agreement, as applicable.

 

Transponder Agreements: with respect to any DTH platform, one or more Contracts
relating to the use of transponder capacity by such platform.

 

TV Capital: TV Capital Participações Ltda., a Brazilian limitada.

 

TV Capital Quotas: at any time, the issued and outstanding quotas of TV Capital
at such time.

 

TV Globo: TV Globo Ltda., a Brazilian sociedade anônima.

 

22

--------------------------------------------------------------------------------

US Dollar Indemnity: with respect to any indemnity obligation of a member of the
Globo Group, such indemnity obligation as originally expressed in US Dollars, or
(if originally expressed in Reais) the US Dollar equivalent of such indemnity
obligation converted at the average of the buy and sell exchange rates listed as
PTAX 800, option 5, as disclosed by the Central Bank of Brazil on the Business
Day immediately preceding the date of payment.

 

Value Determination Date: the earlier to occur of (i) the Closing and (ii)
following termination of the Combination Agreement, the date on which News
ceases to be in breach of the Covenants resulting from the DirecTV Acquisition
in accordance with the publicly announced Cure Plan.

 

23