EX-4.16 Shareholders Agreement



 





Exhibit 4.16




SHAREHOLDERS AGREEMENT




This SHAREHOLDERS AGREEMENT (the “Shareholders Agreement”) dated as of July 4, 2007, is entered
into by and among:



GLOBOSAT PROGRAMADORA LTDA., a Brazilian limited liability company (sociedade limitada), with
headquarters at Rua Itapiru 1209, Rio Comprido, Rio de Janeiro, RJ, Brazil (hereinafter referred to
as “Globosat”); and



PLAYBOY TV LATIN AMERICA, LLC, a California Limited Liability company with offices at 1550 Biscayne
Boulevard, Miami, FL, 33132, USA (hereinafter referred to as “PTVLA”);



and, as intervening party,



PB BRASIL ENTRETENIMENTO S.A., a Brazilian corporation (sociedade anônima), with headquarters at
Rua Itapiru 1209 (part), Rio Comprido, Rio de Janeiro, RJ, Brazil (hereinafter referred to as the
“Venture”);



WHEREAS:




	 	(i)	 	Globosat has a recognized and extensive experience in the business of production,
programming and/or distribution of audiovisual contents through Television and Other
Media in Brazil, being a well-known company with fifteen (15) years in the
business of television production and a wide range of client and supplier contacts;
	 
	 	(ii)	 	PTVLA is a joint venture between Claxson and PEGI and both have recognized worldwide
expertise in the business of adult entertainment, including the development and production
of Adult Content for Television and Other Media;
	 
	 	(iii)	 	Claxson and PEGI combined own 100% (one hundred percent) of the interest in PVTLA;




 









 












	 	(iv)	 	PTVLA has recognized expertise in the business of development and production of Adult
Content for Television and Other Media in Latin America;
	 
	 	(v)	 	Globosat and PTVLA believe that mutual benefit could be obtained by collaborating in
the development and exploitation of business opportunities specially regarding the
development, operation, distribution, production and commercial exploitation of Adult
Content for Television and Other Media in Brazil;
	 
	 	(vi)	 	Globosat and PTVLA are willing to enter into an association to develop and exploit
Adult Content in Television and Other Media in Brazil, through the Venture, as a separate
corporate joint venture vehicle, pursuant to the terms set forth herein, in the by-laws
(Estatuto Social) of the Venture and in the Parent Company Agreement;
	 
	 	(vii)	 	on December 15th, 2006, Globosat and PTVLA executed a Memorandum of
Understanding, as amended on February 6, 2007 (the “MOU”), in order to outline the means
through which the association shall be implemented and to establish some common general
guidelines with respect to the conduct of the business, corporate structure, management,
restrictions on transfer of Shares and distribution of profits, among other issues, as well
as the basic terms and conditions of the Agreements that shall rule the Venture’s business
and activities;
	 
	 	(viii)	 	also on December 15th, 2006, Globosat, Claxson and PEGI executed the Parent
Company Agreement, as amended on the date hereof, in order to set forth additional rights
and obligations in connection with the Venture, including, but not limited to,
non-competition provisions (the “Parent Company Agreement”, copy of which is attached
hereto as Exhibit (viii));
	 
	 	(ix)	 	on April 18, 2007, and in accordance with the Laws of Brazil, the Venture — a joint
venture legal entity to carry out the development and exploitation of Adult Content in
Television and Other Media in Brazil — was incorporated;
	 
	 	(x)	 	on the date hereof, the subscribed and fully paid capital stock of the Venture is R$
7.500,00 (seven thousand and five hundred Reais), represented by seven thousand and five
hundred (7.500) no-par value, common nominative




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	 	 	shares, 100% owned by the Shareholders, duly recorded in the Venture’s books as follows:





	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Shareholder	 	 	Shares	 	 	 	Total (%)	 	 
	 	Globosat
	 	 	 	4.500	 	 	 	 	60	%	 
	 	PTVLA
	 	 	 	3.000	 	 	 	 	40	%	 
	 	Total
	 	 	 	7.500	 	 	 	 	100	%	 
	 






	 	(xi)	 	the Shareholders desire to set their rights, obligations and responsibilities in
connection with and arising from the Venture and its management, as well as the general
principles that shall govern their relationship as shareholders of the Venture, pursuant to
the terms of article 118 of the Brazilian Corporate Law; and
	 
	 	(xii)	 	on the date hereof, the Shareholders are also executing and
delivering — or causing
the execution and delivery of — certain Agreements in connection with the Venture and its
business, as provided herein;





NOW, THEREFORE, in consideration of the mutual agreements, understandings, and other good and
valuable consideration as set forth herein, the receipt and sufficiency of which is hereby
acknowledged, the Shareholders and the Venture hereby execute this Shareholders Agreement to set
forth their full understanding as follows:



SECTION I

DEFINITIONS AND INTERPRETATION




1.1.      As used in this Shareholders Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and the plural forms of the terms
defined):



     “Abril”: shall mean Editora Abril S.A.



     “ADSL”: shall have the meaning ascribed to it in the definition of “Closed ADSL
Systems”.



     “Adult Content”: shall mean Content that consist predominantly of sexual themes and
that is comparable to or more explicit than the content exhibited on the preexisting adult
channels of the Shareholders; provided that, for the purposes of this Shareholders
Agreement, Non-Adult Content shall not be deemed as Adult Content;



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     “Advertising Sales Services Agreement”: shall have the meaning ascribed to it in
Section 17.2.



     “Affected Shareholder”: shall have the meaning ascribed to it in Section 8.4.



     “Affiliate Agreements”: shall mean any Agreement between the Venture and any of its
Shareholders or any of their respective Affiliate Companies.



     “Affiliate Company”: shall mean, with respect to any Shareholder, any other Person
who, directly or indirectly, through one or more intermediaries, Controls, is Controlled by
or is under common Control with such Person, excluding, with respect to Globosat,
Globosat’s Ventures.



     “Agreement”: shall mean 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, license
fee, franchising or insurance policy, in each case as amended, supplemented, waived or
otherwise modified from time to time.



     “ANATEL”: shall mean the Brazilian telecommunications agency (Agencia Nacional de
Telecomunicações).



     “Annual Budget”: shall have the meaning ascribed to it in Section 6.2.



     “Annual Business Plan”: shall have the meaning ascribed to it in Section 6.2.



     “Assets”: shall mean all assets, tangible or not, related to distribution and/or any
other form of exploitation of Adult Content and channels via Television and Other Media in
Brazil.



     “Back-Office Services”: shall mean any back-office service, including, but not limited
to, administrative, financial, accounting, data processing, legal, commercial, human
resources and marketing.



     “Board of Officers”: shall mean, with respect to the Venture, the Diretoria referred
to in article 143 of the Brazilian Corporate Law, and with respect to any other Person, the
board of officers or other similar body.



     “Brazil”: shall mean the Federative Republic of Brazil (República Federativa do
Brasil).



     “Brazilian Channels”: shall mean Sexy Hot channel and any other channel that the
Venture decides to launch, which is originally produced and/or distributed through
Television in Brazil.



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     “Brazilian Code of Civil Procedure”: shall mean Brazilian Federal Law no. 5.869 of
January 11, 1973, as amended from time to time.



“Brazilian Corporate Law”: shall mean Brazilian Federal Law no. 6.404 of December 15,
1976, as amended from time to time.



     “Business Day”: shall mean any day other than a Saturday, Sunday or a day on which
commercial banking institutions are authorized or required by law to be closed in Rio de
Janeiro, Brazil.



     “Buy-Up Exercise Period”: shall have the meaning ascribed to it in Section 9.1.



     “Buy-Up Notice”: shall have the meaning ascribed to it in Section 9.1.1.



     “Buy-Up Option”: shall have the meaning ascribed to it in Section 9.1.



     “CADE”: shall mean the Brazilian antitrust authority (Conselho Administrativo de
Defesa Econômica).



     “Claxson”: shall mean Claxson Interactive Group, Inc., a British Virgin Island
corporation, with offices at 1550 Biscayne Boulevard, Miami, FL, 33132, USA.



     “Closed ADSL Systems”: shall mean a distribution or transmission system that delivers
Television programming directly via asymmetric digital subscriber lines (“ADSL”) to any
point or device at which the transmission enters the subscribers premises, solely in
accordance with the requirements herein, and solely from servers located within the private
domain of the ADSL service carrier; provided that use of any form of the Internet
for any portion of such transmission shall not be permitted.



     “Confidential Information”: shall mean, except for information which is in the public
domain or obtained in the ordinary course of business, without limitation, the following:
(i) information concerning the affairs, contracts and other property of the Venture or any
other Shareholder or any transaction in which the Venture or any other Shareholder have
been concerned or interested relating to the purpose of the Venture; (ii) the names and
addresses of any clients or suppliers of the Venture, or any other Shareholder; (iii)
information on the terms of the negotiation of this Shareholders Agreement, the MOU or of
the Definitive Agreements and those documents themselves; (iv) information relating to the
business methods of the Venture or technologies used or created by the Venture or any of
its controlled Affiliate Companies, and (v) the Initial Business Plan of the Venture, as
well as any amendment thereto.



     “Constrained Shares”: shall have the meaning ascribed to it in Section 8.4.



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     “Constrained Shares Court Disbursement”: shall have the meaning ascribed to it in
Section 8.4.1.



     “Content”: shall mean any work or video content, brand, trademark, programming and/or
any other content developed, produced, managed, exploited and/or distributed by means of
Television or Other Media.



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



     “Controversy”: shall have the meaning ascribed to it in Section 21.1.



     “Customized Channels”: shall mean the Adult Content channels that result from the
customization of channels originally produced and/or distributed by PTVLA outside Brazil.



     “DTH”: shall mean direct to home satellite system.



     “Defaulting Shareholder”: shall have the meaning ascribed to it in Section 15.1.



     “Definitive Agreements”: shall mean this Shareholders Agreement, Technical Services
Agreements, License Agreement, Globosat Content Sub-license Agreement, Globosat Trademark
License Agreement, Trademark Coexistance Agreement, Advertising Sales Services Agreement,
Distribution Agreement and Net Brasil’s Agency Agreement.



     “Distribution Agreement”: shall mean the distribution Agreement to be executed on the
date hereof by and between the Venture and Net Brasil, aiming the distribution of Venture’s
Content and channels through Net Brasil’s Affiliate Systems, as the same may be amended,
supplemented or otherwise modified from time to time, under the terms and conditions set
forth therein.



     “Fair Market Value”: shall mean the value determined in accordance with Section X.



     “Fiscal Year”: shall mean a calendar year.



     “GCP”: shall mean Globo Comunicação e Participações S.A., a Brazilian corporation,
with headquarters at Rua Lopes Quintas 303, Jardim Botânico, Rio de Janeiro, RJ, Brazil.



     “Globo Restrictions”: shall have the meaning ascribed to it in Section 19.1.9.



     “Globosat”: shall have the meaning ascribed to it in the preamble of this Shareholders
Agreement.



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     “Globosat Assets”: shall have the meaning ascribed to it in Section 11.2.(v).



     “Globosat Content Sub-license Agreement”: shall mean the content supply Agreement to
be executed on the date hereof among Globosat and the Venture.



     “Globosat Trademark License Agreement”: shall mean the trademark license Agreement to
be executed on the date hereof among Globosat and the Venture.



     “Globosat’s Ventures”: shall mean Telecine Programação de Filmes Ltda., Canal Brazil
S.A. and USA Brasil Programadora Ltda.



     “Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof, and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, including but not
limited to CADE.



     “Iberia”: shall mean Andorra, Portugal and Spain.



     “IGP-M”: shall mean the inflation rate denominated Índice Geral de Preços ao Mercado,
published by the Fundação Getúlio Vargas, provided that in the event the IGP-M rate
is less than zero in any one-year period, than, for the purpose of this Shareholders
Agreement, the IGP-M rate shall be deemed to be equal to zero.



     “Initial Business Plan”: shall have the meaning ascribed to it in Section 6.1.



     “International Channels”: shall mean channels produced by PTVLA outside Brazil that
the Venture decides to launch and/or distribute through Television in Brazil.



     “Internet”: shall mean any non-proprietary  ̄ i.e., accessible to the general public
regardless of physical location, means of access and whether or not a fee is charged by an
internet service provider for such access  ̄ digital network based on the Internet Protocol
or a similar or successor protocol that interconnects computers or similar receiving
devices so as to allow open two-way access for the origination and reception of data
sufficient to convey audio-visual programming.



     “IPTV”: shall mean a video content transmission, exhibition and distribution system
via a platform based on the Internet where the end user accesses the television Content
(whether on a linear or VOD basis) via a set-top-box connected to a TV set, provided
that, for the purposes of this Shareholders Agreement, other forms of distribution via
a platform based on the Internet



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where the end user accesses the content via a computer or PC set shall not be deemed
IPTV or Television.



     “Latin America”: shall mean America’s continent countries (including Mexico and all
countries in Central America, South America, the Caribbean, as defined in PTVLA’s current
Agreements with PEGI, and Puerto Rico), except (i) Canada, (ii) the United States of
America (USA, but including Puerto Rico), their respective territories, military bases and
possessions, and (iii) Brazil.



     “Law”: shall mean all applicable provisions of all (i) constitutions, treaties,
statutes, laws (including the common law), codes, rules, regulations, ordinances or orders
of any Governmental Authority, (ii) governmental approvals and (iii) orders, decisions
(whether condemnatory or homologatory), injunctions, judgments, awards and decrees of or
Agreements with any Governmental Authority.



     “License Agreement”: shall mean the content supply and trademark license Agreement to
be executed on the date hereof among PTVLA, PEGI and the Venture, as described in Section
17.6.



     “Liens”: shall mean any liens, burdens, encumbrances, mortgages, security interests,
repurchase obligations, claims, disputes, usufructs, options, rights of first and last
refusal, put, call and any other restrictions or liabilities, whether contractual or not,
of any kind whatsoever.



     “Material Capital Investments”: shall mean any investments which individually exceeds
R$ 500.000,00 (five hundred thousand Reais), adjusted annually by the IGP-M, or a year
investment exceeding the maximum foreseen in the Annual Budget.



     “MATV”: shall mean master antenna television systems.



     “MDS”: shall mean multipoint distribution services.



     “MFN”: shall mean any contractual provision by which a party to certain Agreement
grants to the other party of the same Agreement the right to replace and modify the terms
of such Agreement in order to reflect more favorable Agreements and/or terms (those terms
taken as a whole) provided for in another equivalent or similar Agreement for the same type
of services executed by the first party with a third party.



     “MMDS”: shall mean multichannel multipoint distribution services.



     “MOU”: shall have the meaning ascribed to it in the preamble of this Shareholders
Agreement.



     “Net Brasil”: shall mean Net Brasil S.A.



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     “Net Brasil’s Affiliate System”: shall mean each wired cable television system (“CATV
System”), satellite master antenna television system (“SMATV” System), DTH System, MMDS
System, Closed ADSL Systems, IPTV, Internet and any other form of television distribution
system other than Standard Broadcast Television, (i) which hold all required licenses
issued by the Ministry of Communication of Brazil and/or ANATEL authorizing it to receive a
television signal and retransmit it to its subscribers and (ii) which has contractually
authorized Net Brasil to negotiate and execute Agreements with programmers on its behalf
for purpose of acquiring the rights to exhibit programs and/or channels on such systems.



     “Net Brasil Agency Agreement”: shall mean the Agreement to be executed on the date
hereof by and between the Venture and Net Brasil targeted to distribute the Adult Content,
included but not limited to the Brazilian Channels, the Customized Channels and the
International Channels through any Net Brasil’s Non Affiliate System company for Television
and Other Media.



     “Net Brasil Distribution Agreement”: shall mean the distribution Agreement already
executed by and between Globosat and Net Brasil targeted to distribute the Globosat
channels through Sky Brasil Serviços Ltda. and Net Serviços de Comunicação S.A.



     “Net Brasil’s Non Affiliate System”: shall mean any form of Television distribution
system (i) which holds all required licenses issued by the Ministry of Communication of
Brazil and/or ANATEL authorizing each to receive a television signal and retransmit each
through Television and Other Media, or by Closed ADSL System, or by Internet, or by IPTV,
to its subscribers in Brazil, and (ii) which is not a Net Brasil’s Affiliate System.



     “New Business Plan”: shall have the meaning ascribed to it in Section 6.4.



     “Non-Adult Content”: shall mean Content that would be rated “R” or less restrictively
by the Motion Picture Association of America; including, but not limited to, (i) the
content on the existing Claxson’s channels (Infinito, HTV, Fashion TV, I-Sat, Space,
MuchMusic and Retro) or other services that are similar in scope and content to Claxson’s
existing channels (except for PTVLA’s channels other than Playboy Lifestyle channel); and
(ii) the content on the existing channels of Globosat (Multishow, GNT, Telecine Channels,
Canal Brasil) or other services that are similar in scope and content to Globosat’s
existing channels (other than ForMan and SexyHot), all of which shall not be deemed Adult
Content.



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     “Non-Affected Shareholder”: shall have the meaning ascribed to it in Section 8.4.



     “Non-Competition Provisions”: shall mean the provisions set forth in Section XII
below.



     “Non-Defaulting Shareholder”: shall have the meaning ascribed to it in Section 15.1.



     “Officer”: shall mean any member of a Board of Officers (Diretoria).



     “Operating Reserve”: shall mean, until December 31st, 2008 the cash reserve
to be maintained by the Venture in an amount at any given time equal to the operating costs
of the Venture for the immediately preceding two-month period; and after December
31st, 2008, the cash reserve to be maintained by the Venture in an amount at any
given time equal to the operating costs of the Venture for the immediately preceding
three-month period.



     “Other Media”: shall mean all forms of exhibition, transmission and/or distribution of
Content existing or to be developed in the future, including but not limited to: (i)
Internet, (ii) telecommunications, including but not limited to Wireless, video content
delivered not as part of a Television service by ADSL, satellite, cable (whether on a VOD,
NVOD basis), CD-ROM, DVD/Home Video (as well as any other physical video media support) and
portable media players, Portuguese language radio and Print Media. Notwithstanding any
other provision herein, Other Media shall not include Television.



     “Other Media Net Revenues”: shall mean all revenues effectively earned by the Venture
from the distribution of any Playboy Unbranded Adult Content via the Other Media in Brazil,
less (i) all the applicable Taxes and, (ii) the participation due to any third party
distributors.



     “Parent Companies”: shall mean Globosat, Claxson and PEGI, as well as their respective
Affiliate Companies.



     “Parent Company Agreement”: shall have the meaning ascribed to it in the preamble of
this Shareholders Agreement.



     “Parties”: shall mean the parties to this Shareholders Agreement.



     “Pay TV Operator”: shall mean any third party authorized to distribute the Venture’s
Content via Television in Brazil.



     “PEGI”: shall mean Playboy Entertainment Group, Inc., a Delaware corporation with
headquarters at 2706 Media Center Drive, Los Angeles, CA, 90065, USA.



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     “PEI”: shall mean Playboy Enterprises, Inc., a Delaware corporation with offices at
680 North Lakeshore Drive, Chicago, Illinois, 60611, USA.



     “Permitted Transferee”: shall have the meaning ascribed to it in Section 8.1.(i).



     “Person”: shall mean an individual, a corporation, a partnership, a limited liability
company, a joint venture, an association, a trust, an unincorporated association or any
other entity or organization.



     “Playboy Branded Adult Content”: shall mean all Adult Content as well as stills and
other ancillary Content related to such video Content owned or licensed by PEGI or its
Affiliate Companies where Playboy Trademarks are used in connection, or closely associated,
with such Content, or any related advertising.



     “Playboy Brazil Magazine Assets”: shall mean the assets related to the rights
currently granted in Brazil to Abril in print media, Internet and Wireless related
specifically to the Playboy Branded Adult Content.



     “Playboy Lifestyle Content”: shall mean all Content related to and associated with the
Playboy Lifestyle programming service.



     “Playboy Trademarks”: shall mean the Playboy trademarks which are based on the
“Rabbit-head” trademark or any use of the words “Playboy”, “Playmate” or “Bunny”.



     “Playboy Unbranded Adult Content”: shall mean all Adult Content as well as stills and
other ancillary Adult Content related to such video Content owned or licensed by PEGI or
its Affiliate Companies where the Playboy Trademarks are not used in connection, or closely
associated, with such Content, or any related advertising, including without limitation,
such Adult Content associated with the Playboy Unbranded Trademarks. Playboy Unbranded
Adult Content specifically excludes all Content owned and distributed by Club Jenna, Inc.
and its subsidiaries.



     “Playboy Unbranded Trademarks”: shall mean such trademarks owned or licensed by PEGI
which are not based on the “Rabbit-head” trademark or any use of the words “Playboy”,
“Playmate” or “Bunny”, including without limitation, the Spice trademarks, Spice:xcess,
fresh! and shorteez. Playboy Unbranded Trademarks specifically excludes all Trademarks
associated with all Content owned and distributed by Club Jenna, Inc. and its subsidiaries.



     “Preexisting Agreements”: shall mean the Agreements regarding the distribution of
Adult Content in Television and/or Other Media in Brazil, listed on Exhibit 1.A attached
hereto, that have been executed by the Shareholders up



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to the date of the Venture’s incorporation, that may not be transferred or sublicensed
to the Venture, regardless of the obligation of the Shareholders to use their best efforts
to transfer or sublicense the rights and economic interest arising from or in connection
with such Agreements to the Venture, as set forth herein.



     “Print Media”: shall mean any printed material sold in connection or packaged with
DVD/Home Video or any other physical video media support already existing or to be
developed in the future that is not associated with the Playboy Trademarks and/or Playboy
Branded Adult Content. For the avoidance of doubt, Print Media shall not include any form
of printed material not sold in connection or packaged with DVD/Home Video or any other
physical video media support already existing or to be developed in the future.



     “Profits Available for Distribution”: shall mean all cash and funds of the Venture
after (i) all the deductions set forth by the applicable Brazilian Laws and (ii) the
deduction of the Operating Reserve.



     “PTVLA”: shall have the meaning ascribed to it in the preamble of this Shareholders
Agreement.



     “PTVLA Assets”: shall have the meaning ascribed to it in Section 11.1.(v).



     “Purchasing Shareholder”: shall have the meaning ascribed to it in Section 14.1.3.1.



     “Real”, “Reais” or “R$”: shall mean the lawful currency of Brazil.



     “Relevant Matter”: shall mean any matter listed in Sections 5.2 and 5.3.



     “Rights”: shall have the meaning ascribed to it in Section 8.3.



     “Selling Shareholder”: shall have the meaning ascribed to it in Section 14.1.3.1.



     “Shareholders”: shall mean, jointly, Globosat and PTVLA. “Shareholders Agreement”:
shall mean this Shareholders Agreement, as amended from time to time pursuant to its terms.



     “Shareholders’ Meeting”: shall mean, with respect to the Venture, any Assembléia Geral
referred to in articles 121 and followings of the Brazilian Corporate Law, and with respect
to any other Person, any similar shareholders’ meeting.



     “Shares”: shall mean any share in the capital stock of the Venture, any right to
acquire shares in the capital stock of the Venture, any security convertible into shares in
the capital stock of the Venture and any Rights.



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     “SMATV”: shall mean satellite master antenna television systems.



     “Tax” or “Taxes”: shall mean all federal, state, local or foreign taxes, including all
interest, penalties and additions imposed by Law with respect to such amounts and any
interest in respect of such penalties and additions.



     “Technical Services”: shall mean any services related to subtitling services and
engineering services, including but not limited to playout, uplink and satellite
transponder space and related services.



     “Technical Services Agreements”: shall mean the technical services Agreements to be
executed on the date hereof by and between the Venture and any of the Shareholders, aiming
the rendering of Technical Services.



     “Television” shall mean all of the following forms of exhibition, transmission and/or
distribution of content existing or to be developed in the future: (a) all forms of linear
and non linear television offered directly by the Venture or through a third party (e.g.
cable or satellite operator) in conjunction with linear services whether on a subscription,
pay-per-view, “video on demand”, “a la carte”, or free basis, including, without
limitation, (i) conventional VHF or UHF television broadcast, (ii) basic cable and pay
cable, (iii) “over the air pay” subscription television (STV), (iv) direct broadcasting by
satellite (DBS), (v) MATV, (vi) MDS, (vii) MMDS, (viii) SMATV, (ix) microwave transmission,
and (x) IPTV. It is understood that any form of linear transmission of continuous
programming services with Playboy Branded Adult Content specifically targeted to Brazil
shall be deemed Television to be exclusively exploited by the Venture; provided that PEGI,
pursuant to the terms of the Parent Company Agreement, will use commercially reasonable
efforts to block, through industry accepted standards and technology, the distribution of
these types of services not targeting Brazil, in Brazil.



     “Television Net Revenue”: shall mean all revenues effectively earned by the Venture
from the distribution of any channel (the Customized Channels, the International Channels
and the Brazilian Channels, including the Playboy Lifestyle Channel) via Television or the
license of Adult Content from such channels via Television in Brazil, less (i) all
applicable Taxes and (ii) the participation due to the Pay TV Operators.



     “Term”: shall have the meaning ascribed to it in Section 14.1.



     “Termination Date”: shall have the meaning ascribed to it in Section 15.2.



     “Termination Event”: shall have the meaning ascribed to it in Section 15.1.



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     “Termination Notice”: shall have the meaning ascribed to it in Section 15.3.1.



     “Trademarks”: shall mean any and all brands, patent, trademark, trade secret, trade
name and service mark related to the Adult Content in Television or Other Media, including
but not limited to, the Playboy Trademarks and the Playboy Unbranded Trademarks.



     “Trademark and Content Standards”: shall mean the brand and trademark guidelines,
quality and content standards of PTVLA and PEGI set forth in Exhibit 13.1.



     “Trademark Coexistence Agreement”: shall have the meaning ascribed to it in Section
17.7.



     “Transfer”: shall have the meaning ascribed to it in Section 8.1.



     “Transferring Shareholder”: shall have the meaning ascribed to it in Section 8.1. (i).



     “US$” or “Dollars”: shall mean the lawful currency of the United States of America.



     “Venture”: shall have the meaning ascribed to it in the preamble of this Shareholders
Agreement.



     “Venture Wind Up”: shall have the meaning ascribed to it in Section 15.2.2.



     “Venture’s Annual General Shareholders’ Meeting”: shall mean, with respect to the
Venture, any annual general meeting of the Venture’s Shareholders held pursuant to articles
132 and followings of the Brazilian Corporate Law.



     “Venture’s Original Content”: shall mean any Content originally produced by the
Venture.



     “Way-out Notice”: shall have the meaning ascribed to it in Section 14.1.3.1.



     “Way-out Option”: shall have the meaning ascribed to it in Section 14.1.3.



     “Wireless”: shall mean distribution of Content via a mobile telecommunications
network.



1.2.     Reference in this Shareholders Agreement to Sections are sections to this Shareholders
Agreement, unless the context otherwise requires. The recitals to this Shareholders Agreement shall
be deemed to form part hereof.



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1.3.     Headings are inserted for convenience only and shall not affect the interpretation of this
Shareholders Agreement.



1.4.     The use of the word “including” in this Shareholders Agreement when following any general
statement, term or matter shall not be construed to limit such statement, term or matter to the
specific items or matters set forth immediately following such word or to similar items or matters,
but shall be deemed to refer to all other items or matter that could reasonably fall within the
broadest possible scope of such general statement, term or matter.



SECTION II

PURPOSES OF THE SHAREHOLDERS AGREEMENT




2.1.     Subject to the terms and conditions set forth herein, the purpose of this Shareholders
Agreement is to (i) rule and regulate the terms and conditions under which the Venture will
develop, exploit, own, operate, distribute, produce and market Adult Content for any form of
commercial exploitation in Television and Other Media in Brazil, during the Term; (ii) establish
some common general guidelines with respect to the conduct of the business, corporate structure,
management, restrictions on transfer of Shares, distribution of profits and non competition, among
other issues; and (iii) regulate the terms and conditions under which the Venture shall develop its
business and activities.



2.2.     The Shareholders agree that this Shareholders Agreement is entered into between them and will
be performed by each of them in a spirit of mutual cooperation, trust and confidence. Each
Shareholder undertakes to use all means commercially reasonably available to achieve the objectives
of this Shareholders Agreement and to ensure compliance by the Venture and such Shareholder’s
Affiliate Companies with its obligations. Accordingly, each of the Shareholders (i) agrees that it
will use its commercial reasonable efforts to promote the business and profitability of the
Venture, (ii) shall do and execute or cause to be done and executed all such acts, deeds, documents
and things as may be within its power, including but not limited to the passing of resolutions to
ensure that all provisions of this Shareholders Agreement are observed and performed, and (iii)
take all commercially reasonable necessary measures — including but not limited to the holding of
Shareholders’ Meetings — in order to implement the corporate structure of the Venture in
accordance with the terms and



15









 








conditions provided for in this Shareholders Agreement and in any other Agreements executed by the
Shareholders in connection with the Venture.



2.3.     The Shareholders hereby agree that not only the current issued and outstanding Shares of the
Venture held by each of the Shareholders shall be subject to this Shareholders Agreement, but also
(i) any and all Shares acquired, by any means, by any of the Shareholders, (ii) any and all
securities convertible into or exchangeable for any such Shares, (iii) any and all options,
warrants or other rights to acquire any such Shares, and (iv) any and all equity held as a result
of stock splits, issuances in exchange for or in replacement of or upon conversion of such Shares,
or otherwise in connection with a combination of capital stock, recapitalization, merger,
consolidation or other corporate reorganization, in all cases held by any of the Shareholders.



SECTION III

PURPOSES OF THE VENTURE AND UNDERTAKINGS




3.1.     The Shareholders hereby agree that the purposes of the Venture shall be:




	 	(i)	 	to exploit, develop, own, license, operate, distribute,
produce, program and market Adult Content and Playboy Lifestyle Content in
Television and Other Media in Brazil during the Term — including all the
preexisting businesses and brands as of the date of the MOU (including but not
limited to SexyHot, ForMan, Playboy, Venus, GChannel, Private and two
pay-per-view channels (currently branded as Playboy Movies and Venus XXL)
and/or their respective successors or rebranded channels) and the Adult
Content businesses and brands to be launched during the Term without any
charge, to the extent and subject to the limitations and rights held by PTVLA
and PEGI with respect to the Adult Content, and subject to the restrictions
provided herein and in any other Agreements executed in connection with the
Venture. The exploitation and development of Adult Content in Television and
the Other Media in Brazil by the Parent Companies shall be made jointly
through the Venture in accordance with and subject to the provisions set forth
herein, in the Parent Company Agreement and in any other Agreements executed
in connection with the Venture;




16









 












	 	(ii)	 	to exploit Playboy Branded Adult Content solely with respect
to Television and Other Media, subject to the restrictions set forth in
Section 3.2 (ii) herein;
	 
	 	(iii)	 	to customize Television channels and/or any other Adult
Content originally produced outside Brazil (including but not limited to the
preexisting Television channels already produced by PTVLA in Television or
Other Media aiming at its distribution in Brazil during the Term), subject to
the Trademark and Content Standards; and
	 
	 	(iv)	 	to produce and/or distribute the Venture’s Original Content
for purposes of exploitation by the Venture in Television and Other Media, as
applicable, in Brazil or outside Brazil. PTVLA shall inform to the Venture
whether PTVLA or PEGI shall be the exclusive distributor for the Venture’s
Original Content in Latin America (outside Brazil) and Iberia. PEGI shall be
the exclusive distributor for the Venture’s Original Content worldwide outside
of Latin America and Iberia. The Shareholders shall negotiate in good faith
the terms and conditions for such distributor Agreements, including the
commissions to be paid to PTVLA and PEGI.





3.2.     In order to achieve the Venture’s purposes, as set forth in Section 3.1 above:




	 	(i)	 	the Shareholders hereby undertake to comply with the
Non-Competition Provisions, as set forth in Section XII below;
	 
	 	(ii)	 	subject to the provisions set forth in Section 3.2.1 below,
the Venture shall have the exclusive right to exploit, develop, own, license,
operate, distribute and market in Brazil through Television and the Other
Media all the Playboy Unbranded Adult Content existing as of the date of the
MOU or in the future owned and/or operated by the Shareholders and/or PEGI
during the Term and — with respect to the Playboy Branded Adult Content and
the Venture’s Original Content which is based on a Playboy Trademark —, the
exclusive right to exploit, develop, own, license, operate, distribute and
market in Brazil through




17









 












	 	 	 	Television only, including the exclusive license for the branding, the use
of the adult channel feeds existing as of the date of the MOU or in the
future distributed by the Shareholders as well as the license of the Adult
Content to be developed by the Venture during the Term. For this purpose,
Globosat and PTVLA shall make available to the Venture all the
abovementioned rights, including, but not limited to, the Globosat Assets
and the PTVLA Assets, to the extent they are directly entitled to such
Assets, without any additional charge other than the fees set forth in
Section 17.6.2;
	 
	 	(iii)	 	the Venture shall have the exclusive right to use and
exploit in Brazil the Shareholders’ and PEGI’s existing as of the date of the
MOU or in the future owned and/or licensed trademarks, including the Playboy
Trademarks and Playboy Unbranded Trademarks, in connection with the Adult
Content for Television and Other Media, subject to PEGI’s rights to use or
license the Playboy Trademarks and Playboy Unbranded Trademarks in connection
with the licensing of Adult Content to third parties permitted herein and the
limitations, scope and extent of rights held by the Shareholders for such
trademarks (for example, the use of the Playboy Trademarks is limited to
Television);
	 
	 	(iv)	 	the Venture shall have the exclusive right to use and exploit
in Brazil through Television and Other Media all the Adult Content library
existing as of the date of the MOU or in the future produced and/or owned by
the Shareholders, subject to the limitations, scope and extent of rights held
by the Shareholders for such Adult Content library or as otherwise provided
herein;
	 
	 	(v)	 	the Shareholders shall license or sub-license to the Venture
all of the existing as of the date of the MOU or future library Adult Content,
broadcast Agreements, Trademarks and the distribution rights in Brazil,
including but not limited to the right to exploit Playboy, Venus, Private,
GChannel, Sexy Hot, ForMan channels and two pay-per-view channels (currently
branded as Playboy Movies and Venus XXL) and/or their respective successors or
rebranded channels). The Shareholders shall use commercial




18









 












	 	 	 	reasonable efforts to sub-license to the Venture any Adult Content owned
or licensed with rights for Television and Other Media in Brazil and agree
to sub-license to the Venture any future Adult Content owned or licensed
with rights for Television and Other Media in Brazil subject to the rights
restrictions set forth herein regarding the Playboy Branded Adult Content
and Playboy Trademarks; excluding content owned or controlled by Club
Jenna, Inc. and its subsidiaries; provided that, in any case, the
Shareholders shall make or cause to make that the Venture receives all the
economic benefits of the Adult Content licensed hereunder as of the date
hereof;
	 
	 	(vi)	 	PTVLA shall not, by any means, Transfer any of its currently
existing or future Trademarks and Adult Content under the License Agreement
with respect to Brazil, or any interest therein, to any Person. Exhibit
3.2.(vi) attached hereto presents a list of such currently existing Trademarks
and Adult Content under the License Agreement;
	 
	 	(vii)	 	the Venture may acquire and exploit in Television and Other
Media the rights related to any Adult Content from any third parties, except
that PEGI and/or PTVLA (subject to the terms and conditions of the Agreements
between PEGI and PTVLA) shall be the exclusive suppliers of programming for
the Playboy Branded Adult Content, provided, however that the Venture will
produce and/or supply the Venture’s Original Content that is based on a
Playboy Trademark, subject to the compliance by the Venture of the Trademark
and Content Standards.
	 
	 	(viii)	 	upon Venture’s request, PTVLA shall, at its own expenses, make available its
existing feeds of the International Channels that are currently being
distributed provided that the Venture pays for all downlink and other related
services;
	 
	 	(ix)	 	the Venture shall have the right to make local inserts of
advertisement or Brazilian content, at its sole discretion following the
Trademark and Content Standards set forth in Exhibit 13.1 attached hereto;




19









 












	 	(x)	 	in proportion with their respective voting percentage
interest, each Shareholder may contribute capital to the Venture in the amount
necessary to meet the Venture’s annual financial requirements set forth in the
approved Annual Budget then in effect or as otherwise mutually approved by the
Shareholders pursuant to Section 6.2, taking into account available cash
reserves;
	 
	 	(xi)	 	PTVLA shall not, by any means, without Venture’s approval,
discontinue the following International Channels and/or any distribution
agreements related to such International Channels in Brazil: Playboy, Venus,
Private and GChannel/ForMan and/or their respective successors or rebranded
channels;
	 
	 	(xii)	 	Should PTVLA descontinue any other International Channel in
Brazil, the Venture shall have the option to, at its sole discretion, (i)
produce, at its owns cost and in compliance with the License Agreement, a
Brazilian Channel using the brands, trademarks and content of the discontinued
International Channel; or (ii) license and distribute a third party Adult
Channel to replace the discontinued International Channel at the Venture’s
sole cost and discretion; and
	 
	 	(xiii)	 	PTVLA may discontinue one or both of the pay-per-view channels (Playboy
Movies and Vênus XXL) in Brazil upon the earliest of (i) December
31st, 2007 provided that such channels are not distributed by Net
Serviços S/A or Sky Brasil Serviços Ltda on such date or (ii) the completion
of the distribution agreements with Net Serviços S/A and Sky Brasil Serviços
Ltda respectively, provided that such pay-per-view channels are not included
in such distribution agreements.






3.2.1. Notwithstanding the provisions set forth in Section 3.2.2., the Preexisting
Agreements shall remain in full force and effect during the Term.




3.2.2. The Shareholders hereby covenant (i) to make reasonable best efforts to obtain the
consent of the other parties to their respective Preexisting Agreements



20









 






for the transfer to the Venture of such Agreements, and (ii) to employ commercially
reasonable efforts to cause any renewal of their respective Preexisting Agreements be
entered into by the Venture.




3.2.3. In the event any of the Preexisting Agreements is not transferred to the Venture, as
set forth in Section 3.2.2 above, the Shareholders shall take any and all actions in order
to enter into any reasonable arrangement (such as subcontracting, sublicensing or
subleasing) designed to provide the Venture with any and all benefits, revenues, direct
costs and rights under any title arising from the Preexisting Agreements, in relation to
Adult Content.




3.2.4. Notwithstanding the provisions set forth in Sections 3.2.2 and 3.2.3 above, the
Shareholders hereby undertake to transfer to the Venture all Preexisting Agreements listed
in Exhibit 1.A attached hereto immediately after the termination or expiration of the term
of each of the Preexisting Agreements, as applicable, except with respect to the Playboy
Brazil Magazine Assets, which shall be subject to the Parent Company Agreement.



3.3.      In addition to Sections 3.1 and 3.2 above, regarding the Adult Content distribution, in order
to achieve the Venture’s purposes, the Venture shall:




	 	(i)	 	distribute the Brazilian Channels, the Customized Channels
and the International Channels;
	 
	 	(ii)	 	make its reasonable commercial efforts in order to secure
distribution for Playboy Lifestyle channel or its successor channel in Brazil;
	 
	 	(iii)	 	bear all costs — including, but not limited to, costs
related to set top boxes and decoders — related to (a) the production,
delivery, marketing and/or distribution of the Brazilian Channels; (b) the
down-link of the original satellite feed, marketing, distribution and
customization of the Customized Channels; (c) the down-link of the satellite
feed, marketing and distribution of the International Channels; (d) the
development, production and distribution of the Adult Content through Other
Media; and (e) the development, production and distribution of the Adult
Content;




21









 












	 	(iv)	 	be entitled to all revenues earned with and all the benefits
related to the distribution, advertisement sales and any other means of
exploitation in Brazil of the Brazilian Channels, the Customized Channels and
the International Channels, as well as all Adult Content through Television
and/or Other Media except as otherwise provided in the Parent Company
Agreement or in the License Agreement. For such purpose and, subject to the
rights and restrictions set forth herein regarding the Playboy Branded Adult
Content, the Playboy Trademarks and the Playboy Unbranded Adult Content, the
Venture shall have full, unlimited access to the Adult Content already
produced and/or acquired or to be produced and/or acquired by PTVLA, Claxson
and PEGI that is authorized to be commercially exploited in Latin America,
except as otherwise provided for herein, in the Definitive Agreements or in
the Parent Company Agreement.;
	 
	 	(v)	 	determine, at its sole discretion, the business to be
developed by the Venture, according to the relevant Business Plan and Annual
Budget;
	 
	 	(vi)	 	determine, at its sole discretion, which channels shall be
customized, as well as the launching date of each Customized Channel in
Brazil;
	 
	 	(vii)	 	have the right to request, and PTVLA shall, at its own
expenses, make available to the Venture, the International Channels, as
currently being distributed. At its sole discretion, the Venture shall have
the right to modify any International Channel in order to insert local
advertisement and/or any other Brazilian content in accordance with the
Trademark & and Content Standards;
	 
	 	(viii)	 	as soon as practicable after the date hereof, take all the necessary
measures in order to discontinue the ForMan channel and to replace, in the Net
Brasil Distribution Agreement, the ForMan channel by GChannel. The GChannel
will be re-branded as ForMan and will be exploited by PTVLA internationally in
accordance with the Trademark Coexistence Agreement. In such




22









 












	 	 	 	case, the Shareholders and the Venture shall comply with all the
obligations assumed by Globosat under the Net Brasil Distribution
Agreement regarding the distribution of a channel dedicated to homosexual
theme (including but not limited to the obligations to exhibit at least
two-hundred (200) new titles per year and to distribute a channel on a “24
hour/7day” basis), provided that, in this regard, the terms and
conditions of all distribution and licensing Agreements in full force on
the date hereof are fully complied and that all necessary governmental and
regulatory approvals are fully met; provided, further, that the
terms and conditions of the Net Brasil Distribution Agreement shall not
become more burdensome to Globosat as a result of the implementation of
the provisions set forth herein. For the avoidance of doubt, the resulting
channel must be an International Channel on an “a la carte” format; and
	 
	 	(ix)	 	ensure that, subject to the provisions of Section 3.1.(iv)
above, the negotiation of the distribution agreements related to the Adult
Content exploited by the Venture pursuant to the Distribution Agreement and
the Net Brasil Agency Agreement shall be exclusively carried out by Net
Brasil, which shall act as set forth in Sections 17.3 and 17.4 below.





SECTION IV

MANAGEMENT OF THE VENTURE




4.1.      The Venture shall be managed by a Board of Officers (Diretoria) that shall be composed of two
(02) Officers, a Chief Executive Officer (Diretor Presidente or CEO) and a Chief Financial Officer
(Diretor Financeiro or CFO), who shall both be resident in Brazil and who do not need to be
shareholders of the Venture. The Officers shall have the powers specified in this Shareholders
Agreement, in the by-laws of the Venture and in the Brazilian Corporate Law.




4.1.1. The Chief Executive Officer (Diretor Presidente) shall determine the guidelines for
the Venture’s business under the supervision of the Shareholders, supervising all of its
activities, including the implementation of resolutions and directives, as established by
the Shareholders. Subject to the provisions of this Shareholders Agreement, the by-laws of
the Venture and the Brazilian Corporate



23









 






Law, the Chief Executive Officer (Diretor Presidente) shall represent the Venture, both
before the courts and elsewhere, before public authorities and agencies, whether federal,
state or municipal: (i) solely; or (ii) jointly with the Chief Financial Officer; or (iii)
jointly with a proxy, duly appointed under the provisions of the by-laws. The Chief
Executive Officer shall also have powers to manage the Venture’s business in general and to
practice all acts of management necessary or convenient for the accomplishment of the
Venture’s purposes, including all such actions as are necessary or desirable in connection
with the Venture’s business or the achievement of the Venture’s purposes, as set forth in
Section III above.




4.1.2. The Chief Financial Officer (Diretor Financeiro) shall be responsible for carrying
out the financial and accounting policy, directives and activities of the Venture, as
established by the Shareholders and in accordance with the relevant Business Plan and
Annual Budget.




4.1.3. All fees to be paid by Venture in accordance with any Affiliates Agreements,
including PTVLA and Globosat’s rendering services under the Technical Service Agreements
not previously approved by the other Shareholder or that exceeds the amounts already set
forth in the Annual Budget, shall require the written approval of the Shareholders not
rendering the services.



4.2.      The Officers (diretores) shall be elected for a term of 3 (three) years — reelection being
permitted —, unless earlier removed or replaced or in the event of vacancies due to resignation,
death or operation of Law; provided that each Officer shall serve until his or her successor is
elected.



4.3.      For so long as Globosat holds more than 50% (fifty percent) of the Venture’s corporate
capital, Globosat shall be entitled to solely elect and remove the Chief Executive Officer (Diretor
Presidente) of the Venture.



4.4.      For so long as PTVLA holds at least 20% (twenty percent) of the Venture’s corporate capital,
PTVLA shall be entitled to jointly with Globosat elect and remove the Chief Financial Officer
(Diretor Financeiro) of the Venture, subject to the provisions set forth in Section 5.2.(xiii)
below.



4.5.      The Board of Officers shall implement and develop the Venture’s purpose according to this
Shareholders Agreement, to the Shareholders’ decisions taken either



24









 








by a duly conveyed Shareholders’ Meeting or according to the relevant Business Plan and Annual
Budget.



4.6.      The Shareholders hereby agree that the Venture’s headquarters shall be located in Rio de
Janeiro, Brazil, having its address at Globosat’s headquarters or at another location in Rio de
Janeiro selected by the Shareholders. In any case, any and all costs related to the Venture’s
headquarters shall be borne by the Venture.



SECTION V

SHAREHOLDERS’ MEETINGS




5.1.      The Shareholders’ Meetings shall be governed by this Shareholders Agreement, the by-laws of
the Venture and the Brazilian Corporate Law.



5.2.      For so long as PTVLA holds at least 20% (twenty percent) of the Venture’s corporate capital,
the following matters submitted for approval by the Shareholders’ Meeting of the Venture shall be
approved only upon the favorable vote of Globosat and PTVLA:




	 	(i)	 	any material change in the corporate purpose of the Venture;
	 
	 	(ii)	 	the adoption and approval of the Annual Budget, which shall
include the annual media marketing plan, the Annual Business Plan of the
Venture, and the New Business Plan as well as any additions or amendments
thereto;
	 
	 	(iii)	 	any Material Capital Investments acquisition or any sale of
material assets of the Venture (including the sale of all or substantial part
of the assets of the Venture), with exception of acquisition and sales of
Adult Content, unless such sales and acquisitions are under terms outside the
ordinary course of business;
	 
	 	(iv)	 	entering into any distribution or content sale Agreement on
an exclusive basis, with the exception of any other Agreement that is
necessary to ensure the carriage of the Adult Content under the terms and
conditions of the Net Brazil Distribution Agreement. For the avoidance of
doubt, the distribution of all Adult Content





25









 











	 	 	 	to third parties shall not be limited or restricted by any provision set
forth in such Agreements other than MFN provisions;
	 
	 	(v)	 	any incurrence of indebtedness by the Venture (other than
trade debt arising in the ordinary course of the Venture’s business as
contemplated in the relevant Annual Budget) or the guarantee of any loan or
other obligation of any Shareholder or Affiliate Company;
	 
	 	(vi)	 	approval of capital calls or capital increases of the Venture
(other than as specifically contemplated in the relevant approved Annual
Budget or Annual Business Plan), except in the event there is a need of
investments for the Venture to be able to meet any material obligation;
	 
	 	(vii)	 	approval of capital reductions of the Venture;
	 
	 	(viii)	 	issuance of Shares, Rights or of other equity of the Venture, except as
provided in item (vi) above;
	 
	 	(ix)	 	filing a petition under bankruptcy rules;
	 
	 	(x)	 	selection or replacement of the Venture’s independent
accountants;
	 
	 	(xi)	 	distribution of dividends contrary to the provisions of
Sections 7.1, 7.1.1, 7.1.2, 7.1.3 and 7.1.4 below;
	 
	 	(xii)	 	any merger, reorganization or business combination involving
the Venture;
	 
	 	(xiii)	 	appointment and dismissal of the Venture’s CFO, except in the event of
breach of the CFO’s fiduciary duties;
	 
	 	(xiv)	 	dissolution or liquidation of the Venture;
	 
	 	(xv)	 	approval of contracts or capital expenditures, (a) in excess
of the levels approved in the Annual Budget or in the Annual Business




26









 












	 	 	 	Plan or (b) that are individually or in the aggregate in excess of R$
250,000.00 (two-hundred and fifty thousand Reais), annually increased by
the IGP-M (with the exception of (1) any new Affiliate Agreements or any
new distribution Agreements or any renewals to allow the carriage of the
Venture’s Content on Net Brasil’s Affiliate System that are on arms-length
terms, and (2) distribution, licensing, rights acquisitions and sales
Agreements that (I) do not exceed the levels approved in the Annual Budget
or in the Annual Business Plan, or (II) are under terms and conditions
within the ordinary course of business);
	 
	 	(xvi)	 	approval of any Affiliate Agreement between the Venture with
any of the Shareholders and/or their respective Affiliate Companies or
modifications thereto, excluding (a) the Definitive Agreements and the
Preexisting Agreements, and (b) any other Agreement that is necessary to
ensure the carriage of the Venture’s Content under the terms and conditions of
the Net Brasil Distribution Agreement. For the avoidance of doubt, the
distribution of all Venture’s Content to third parties shall not be limited or
restricted by any provision set forth in such Agreements other than MFN
provisions;
	 
	 	(xvii)	 	the launch and/or discontinuation by the Venture of an Adult Content
channel;
	 
	 	(xviii)	 	the tax election/tax returns that could have a material impact on PTVLA,
Claxson or PEGI; and
	 
	 	(xix)	 	approval of amendments and modifications by the Shareholders
to the Venture’s by-laws, as the case may be, except as provided in item (vi)
above.






5.2.1. Notwithstanding any other provision herein to the contrary, the Parties acknowledge
that (x) Sky Brasil Serviços Ltda. (“Sky”) has an outstanding debt with PTVLA with respect
to the carriage of the Playboy TV channel since January 1st, 2006 (the “Sky
Debt”) and (y) Galaxy Brasil Ltda. (“DirecTV”) has an outstanding debt with PTVLA with
respect to the carriage of the Playboy TV channel since November, 2006 (the “DirecTV
Debt”). Consequently, the Parties



27









 






hereby agree that until the earlier of (i) the first anniversary from the date hereof, or
(ii) the date that the Sky Debt and the DirecTV Debt are paid to PTVLA, the execution of
the new distribution agreement between the Venture and Sky for the Playboy TV channel after
the date hereof shall be subject to and require the prior written approval of PTVLA.




5.2.2 In the event of any conflict or inconsistency between the terms and conditions in the
by-laws and this Shareholders Agreement, the terms and conditions of this Shareholder
Agreement shall control and prevail in all respects.




5.2.3 In addition, according to the Venture’s by-laws, the Board of Officers shall submit
for the sole approval of Globosat certain matters related to the management of the Venture.
If any of the matters defined in the By-Laws conflict with (i) this Shareholders Agreement
or (ii) specifically Section 5.2 above, the approval of PTVLA will be required.



5.3.      For so long as PTVLA is a shareholder of the Venture, the following matter submitted for
approval by the Shareholders’ Meeting of the Venture shall be approved only upon the favorable vote
of Globosat and PTVLA




	 	(i)	 	the use by the Venture of the Playboy Trademarks, the Playboy
Unbranded Trademarks, the Playboy Branded Adult Content and the Playboy
Unbranded Adult Content outside the guidelines provided by PTVLA in accordance
with the provisions of this Shareholders Agreement, the Trademark and Content
Standards or as otherwise agreed in this Shareholders Agreement.





5.4.      Each of the Shareholders covenants and agrees that it shall vote with respect to its Shares in
accordance with the terms and conditions set forth in this Shareholders Agreement, and cause the
Venture and each Shareholders’ Affiliate Companies to comply with, accomplish and give effect to
the terms and conditions set forth in this Shareholders Agreement, in the by-laws of the Venture
and in all applicable Laws (including but not limited to the Brazilian Corporate Law).



28









 








SECTION VI

BUSINESS PLANS




6.1.      The Shareholders hereby undertake to prepare and approve an initial business plan setting
forth the terms by which the Venture’s business shall be conducted for the first five (05) Fiscal
Years as of the date hereof (the “Initial Business Plan”), which is attached hereto as Exhibit 6.1.




6.1.1. The Parties hereby agree and acknowledge that the Initial Business Plan did not
contemplate certain amounts to be paid or reimbursed by the Venture pursuant the
Globosat Content Sub-license Agreement and hereby approve a revision of the
Initial Business Plan in order to provide for such payments and reimbursement.



6.2.      On an annual basis, the Shareholders shall concomitantly (i) review the Initial Business Plan,
(ii) approve an annual business plan (the “Annual Business Plan”) and (iii) approve an annual
budget (the “Annual Budget”).



6.3.      On an annual basis, at least thirty (30) days before the date in which the Venture’s Annual
General Shareholders’ Meeting (Assembléia Geral Ordinária) shall be held, the Venture’s Chief
Executive Officer shall present to the Shareholders a proposed Annual Budget and a proposed Annual
Business Plan.



6.4.      After the first five (05) Fiscal Years following the date hereof and then thereafter, every
three (03) Fiscal-Year period, the Venture’s Chief Executive Officer shall propose for the approval
of the Venture’s Shareholders a new and revised business plan, which shall replace the ongoing
business plan and shall be in effect for the following three (03) Fiscal Years (the “New Business
Plan”). In the event of approval by the Venture’s Shareholders of the New Business Plan, such New
Business Plan shall replace and automatically cancel the ongoing business plan (whether the Initial
Business Plan or the relevant New Business Plan, as the case may be).



6.5.      In the event, notwithstanding good faith discussions, the Venture’s Shareholders fail to
approve either an Annual Budget or an Annual Business Plan prior to the commencement of any Fiscal
Year of the Venture, the Shareholders hereby agree that the Venture’s business shall be conducted
in accordance with the ongoing Annual Budget or Annual Business Plan, as the case may be, until the
Venture’s Shareholders approve a new Annual Budget or Annual Business Plan, as the case may be, for
the relevant Fiscal Year, provided that each line item of the Annual Budget or Annual Business
Plan, as the case may be, shall be adjusted in accordance with (i) the variation of the IGP-M rate
for the immediately preceding twelve-month-period, plus (ii) any
variation provided for such Fiscal Year in connection with or arising from the terms and conditions
of the obligations already undertaken by the Venture; provided that there will be no IGP-M
increase for line items that automatically adjust each year.



29









 








SECTION VII

DIVIDEND POLICY AND FINANCIAL AND ACCOUNTING PRACTICES




7.1.      Subject to the provisions set forth in Sections 7.1.1, 7.1.2, 7.1.3 and 7.1.4 below, the
Shareholders shall ensure that any dividend distribution by the Venture shall be made (i) in cash
(in Reais), (ii) in the proportion of the Shareholders’ respective percentage of the total
corporate capital of the Venture, and (iii) within thirty (30) days as of the end of each quarter,
unless otherwise mutually agreed by the Shareholders.




7.1.1. The Shareholders hereby agree that all the Profits Available for Distribution shall
be distributed by way of dividend to the Shareholders, subject to the provisions set forth
in Section 7.1 above.




7.1.2. In order to comply with the Brazilian Corporate Law, the Shareholders hereby
undertake to set forth a provision in the Venture’s by-laws permitting the Shareholders in
meeting to approve the drawing of up to half-yearly balance sheets or of balance sheets for
lesser periods and the distribution of dividends on account of the profits shown on such
balance sheets.




7.1.3. The Shareholders hereby agree that the Venture shall not make any dividend
distributions if such distribution would not be allowed under Brazilian Laws (including
without limitation the Brazilian Corporate Law, any new Laws or any new official
interpretation of current Brazilian Laws).




7.1.4. The Shareholders hereby agree that (i) the Venture shall not be liable for any
remittance costs or Taxes arising from or in connection with any dividend distributions to
the Shareholders and (ii) any remittance costs or Taxes arising from or in connection with
such dividend distributions shall be borne exclusively by the beneficiary of the dividends.



7.2.      The Board of Officers shall cause the Venture to maintain complete and accurate books and
records in accordance with the applicable Laws and with generally accepted
accounting principles, which books and records shall be maintained at the principal office of the
Venture.



30









 








7.3.      The financial year of the Venture shall be the Fiscal Year.



7.4.      The Board of Officers shall deliver one copy of the Venture’s annual financial statements to
the Shareholders, within ninety (90) days of the end of each Fiscal Year. The Board of Officers
shall also deliver quarterly financial statements to the Shareholders within thirty (30) days from
the end of each quarter. It is hereby understood that the Venture’s financial statements shall be
prepared on a consolidated basis, in Reais and in accordance with generally accepted accounting
principles and consistency applicable in the United States of America (US GAAP).



SECTION VIII

TRANSFER OF SHARES




8.1.      No Shareholder shall, directly or indirectly, under any circumstances, offer, sell, assign,
transfer, pledge, grant option, swap, contribute to the capital of another Person, or otherwise in
any manner dispose of or encumber (each of such actions, a “Transfer”) any of its Shares, or any
interest therein, except as in the exact terms as provided for as follows:




	 	(i)	 	Subject to the provisions of this Section 8.1, any Shareholder (a
“Transferring Shareholder”) may Transfer all or a portion of its Shares (I) to any
Person which is a directly or indirectly wholly owned subsidiary of PEI and/or
Claxson or GCP, (II) to GCP, in case of Globosat, and (III) to PEGI, in case of
PTVLA (each a “Permitted Transferee”), provided that such Transferring
Shareholder: (a) provides written notice to the other Shareholder at least five
(5) days prior to any such Transfer, (b) on or before the date of such Transfer,
delivers to the other Shareholder the written Agreement of the Permitted
Transferee to be bound by the terms of this Shareholders Agreement, (c) in the
event of item (I) above, guarantees in writing that such Permitted Transferee will
remain a wholly-owned subsidiary of the Transferring Shareholder with 100% (one
hundred percent) of its voting and beneficial equity owned by such Transferring
Shareholder for as long as the Permitted Transferee




31









 












	 	 	 	owns such Shares, (d) guarantees in writing the performance of the obligations
of such Permitted Transferee under the Shareholders Agreement, and (e)
guarantees, on or before the date of such Transfer, in writing that none of
the Persons listed in Exhibit 8.1.(i) are direct or indirect shareholders of
such Permitted Transferee. In the event that a Shareholder Transfers a portion
of its Shares pursuant to this Section 8.1.(i), the Transferring Shareholder
and the Permitted Transferee shall, for all the purposes of the Shareholders
Agreement, be treated as if they were a single shareholder, and shall be
represented by the Transferring Shareholder;
	 
	 	(ii)	 	In addition to the provisions set forth in Section 8.1.(i) above, any
Transfer of Shares or an interest therein shall be conditional upon: (a) the
receipt of all necessary governmental and third party consents and approvals
required as a result of the Transfer, the cost of which shall be exclusively borne
by the Transferring Shareholder; and (b) the Transfer not resulting in a breach of
any applicable Laws, license, permit, or other approval, or any Agreement to which
the Venture, the Transferring Shareholder or the Transfer is subject; and
	 
	 	(iii)	 	The Shareholders hereby agree that neither of them shall make any
Transfer of Shares under Section 8.1.(i) above during the four (4) years
immediately following the date of execution of this Shareholders Agreement and
that any Transfer of Shares contrary to this Section 8.1 shall be void and without
effect and the Venture shall refrain from registering such Transfer in its proper
books and records.





8.2.      In the event of occurrence of any change in Control of a Shareholder or of any Permitted
Transferee to which a Shareholder has transferred Shares pursuant to Section 8.1.(i) above, the
Shareholders hereby undertake to promptly inform such fact to the other Shareholder, by means of a
written notice to the other Shareholder given no later than thirty (30) Business Days from the date
of the occurrence of such change in Control; provided that, in the event of occurrence of
any change in the Control of a Shareholder or of any Permitted Transferee to which a Shareholder
has transferred Shares pursuant to Section 8.1.(i) above, then PTVLA, Globosat and any of their
legal or contractual successors — whether singular or universal
successors —, as the case may be,
shall remain irrevocably bound by the terms of this Shareholders Agreement



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and of any other Definitive Agreements, the Parent Company Agreement and any other future
Agreements executed and delivered — or caused to be executed or delivered — in connection with
the Venture and its business.



8.3.      Subject to Section 5.2 and upon the issuance of any additional Shares by the Venture, each
Shareholder shall have the right to purchase a pro rata portion of such Shares, or any securities
convertible into Shares, to be issued, according to the number of Shares held by such Shareholder.
Subject to Section 5.2, any rights to acquire shares or securities convertible into Shares that the
Shareholders are or may become entitled to by virtue of their shareholding in the Company, such as,
without limitation, preemptive rights, subscription warrants and share splits (the “Rights”) may
not be Transferred to any third parties, except as in the exact terms as provided for in Section
8.1 above.




8.3.1. Any Transfer of Rights contrary to this Section 8.3 shall be void and without effect
and the Venture shall refrain from registering such Transfer in its proper books and
records.



8.4.      In case the Shares owned by any of the Shareholders are subject to attachment, seizure,
judicial attachment or any other constraining measure (medida constritiva) (the “Constrained
Shares”), and in case such constraint is not lifted within thirty (30) days from the date in which
the constraining measure becomes effective, such fact shall be immediately communicated by the
holder of the Constrained Shares (the “Affected Shareholder”) to the other Shareholder (the
“Non-Affected Shareholder”), through a written notice, with copy to the Venture, and such notice
shall be considered an offer of sale of the Constrained Shares by the Affected Shareholder to the
Non-Affected Shareholder, who shall, in its sole discretion, decide whether or not to purchase the
Constrained Shares. For the purposes of this Section 8.4, and regardless of the abovementioned
notice, knowledge by the Non-Affected Shareholder of said constraining measure not lifted in such
thirty (30) day-period shall also be considered deemed an offer of sale of the Constrained Shares
by the Affected Shareholder to the Non-Affected Shareholder.




8.4.1. For the purposes of Section 8.4 above, the price of the Constrained Shares shall be
its Fair Market Value, as defined in Section X below, on the date of the constraining
measure. If the Non-Affected Shareholder accepts such offer to purchase the Constrained
Shares, the Non-Affected Shareholder shall pay in court the amount corresponding to the
valuation of the Constrained Shares made by the court expert (“Constrained Shares Court
Disbursement”), in order to lift



33









 






such constraining measure, and acquire the Constrained Shares, provided that, in case the
Fair Market Value exceeds the amount of the Constrained Shares Court Disbursement, the
difference shall be paid by the Non-Affected Shareholder to the Affected Shareholder,
within thirty (30) days as of the date of the Constrained Shares Court Disbursement.
Nonetheless, in case the amount corresponding to the Constrained Shares Court Disbursement
exceeds the Fair Market Value, the Affected Shareholder shall be held liable before the
Non-Affected Shareholder for such difference between the Constrained Shares Court
Disbursement and the Fair Market Value. The Shareholders hereby agree and acknowledge that
the failure to reimburse such difference within thirty (30) days counted from the date of
the Constrained Shares Court Disbursement shall be considered a default of the Affected
Shareholder’s reimbursement obligations and the amount due shall be subject to foreclosure
based on extra-judicial title.



8.5.      For all purposes of this Shareholders Agreement and subject to Section 5.2, any and all
Transfer of Shares between or among Shareholders shall be made as follows:




	 	(i)	 	the Shares shall be Transferred free and clear of any Liens of any
nature whatsoever; and
	 
	 	(ii)	 	any Transfer shall not be subject or conditioned to the granting of
any covenants, representations or warranties whatsoever, and shall be carried out
on an “as is” basis, except for the provisions of Section 8.5.(i) above.





SECTION IX

BUY-UP OPTION




9.1.      Subject to the terms and conditions set forth herein, PTVLA shall have the option to buy not
less than 100% (one hundred percent) of Globosat’s Shares in the Venture at the Fair Market Value
(“Buy-Up Option”), provided that PTVLA shall only be entitled to exercise the Buy-Up Option in one
of the following periods: (i) between January 1st and December 31st of 2014;
(ii) between January 1st and December 31st of 2018; (iii) between January
1st and December 31st of 2022; and (iv) between January 1st and
December 31st of 2026 (each a “Buy-Up Exercise Period”).




9.1.1. In order to exercise the Buy-Up Option, PTVLA shall, at any moment during any Buy-Up
Exercise Period, give notice in writing (“Buy-Up Notice”) to



34









 






Globosat informing its intention to exercise the Buy-Up Option, at the price per Share
equal to the Fair Market Value.




9.1.2. The closing of the Buy-Up Option shall occur on the tenth (10th) Business
Day following the determination of the Fair Market Value of the Globosat’s Shares in
connection with this Section 9.1, subject to the provisions set forth in Section X below.
The closing of the Buy-Up Option shall take place at the Venture’s headquarters or such
other location as the Shareholders may mutually agree, and the price of the Shares subject
to the Buy-Up Option shall be paid in cash at the closing, against execution, by Globosat
and PTVLA, of the transfer instrument required to perfect the sale.




9.1.3. The Buy-Up Option can only be exercisable by PTVLA in the event PEGI has previously
or contemporaneously exercised its buy-up option to acquire one hundred percent (100%) of
the total capital stock of PTVLA; provided that PEGI and PTVLA shall deliver to Globosat
all reasonable commercial evidence of the fulfillment of such condition precedent prior to
the delivery of the Buy-Up Notice.




9.1.4. In the event of the exercise of the Buy-Up Option by PTVLA, pursuant to the terms of
this Shareholders Agreement, Globosat undertakes not to, and shall cause its Affiliate
Companies not to compete, directly or indirectly, with the activities of the Venture,
specifically related to the exploitation, development, operation, distribution, production
and commercialization of Adult Content in Television and Other Media in Brazil. This
non-competition covenant is valid within Brazil and shall be enforceable, and in full force
and effect for a period of one (01) year from the date of the transfer of the Shares
subject to the Buy-Up Option.




9.1.5. The Shareholders hereby agree that, in the determination of the Fair Market Value in
connection with the Buy-Up Option, the independent experts shall consider in such
determination the non-competition provision set forth in Section 9.1.4 as a relevant
evaluation feature.



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SECTION X

DETERMINATION OF THE FAIR MARKET VALUE




10.1.      The Shareholders hereby agree that the following procedure shall regulate the determination
the Fair Market Value of the Shares:




10.1.1. As used in this Shareholders Agreement, the term “Fair Market Value” shall mean the
price at which a willing seller would sell and a willing buyer would buy the asset for
which the determination of value is being made, having full knowledge of the facts, in an
arm’s length transaction without time constraints, and without being under any compulsion
to buy or sell. The determination of the Fair Market Value of an asset shall, without
duplication of deduction, be reduced by the amount of any Liens relating to such asset. The
Fair Market Value of a fractional interest in an asset shall be equal to the appropriate
pro rata portion of the Fair Market Value for the entire asset, without any further
reduction on account of the fractional ownership.




10.1.2. As soon as practicable after the receipt of any notice or the occurrence of any
event requiring the determination of the Fair Market Value of the Shares, the Shareholders
shall confer and use their reasonable best efforts to determine the same. If the
Shareholders mutually agree upon the determination of the Fair Market Value of the Shares,
such determination shall be final and binding upon the Shareholders for all purposes. If
any Shareholder shall give notice to the other Shareholder requesting determination of such
amount or value by appraisal, or the Shareholders have been unable to agree on the Fair
Market Value, then the Shareholders shall consult for the purpose of appointing a
mutually-acceptable qualified independent expert, with extensive experience in television
and media market evaluation. If the Shareholders are unable to agree on an expert within a
three-day period, each Shareholder shall select one (01) independent expert, with extensive
experience in television and media market evaluation, within a ten (10)-day period, which
shall provide its own determination within thirty (30) days after its appointment. In the
event that the two experts’ determination are not identical or differ by ten percent (10%)
or less, then the Fair Market Value shall be the average of those two determinations and
the Fair Market Value as so determined shall be final and binding upon the Shareholders for
all purposes. In the event that the two experts’ determinations differ by more than ten
percent (10%) and the Shareholders cannot then agree on the Fair Market Value, then the
experts shall jointly choose a third expert, with extensive experience in television and
media market evaluation, within a three (03)-day period, which shall also provide with its
own determination. Such third independent expert shall report its determination with thirty
(30) days after its



36









 






appointment. The Fair Market Value shall be the average of the two determinations that are
closest in their determinations of the Fair Market Value (i.e., the outlier will be
disregarded). In the event that the third expert’s determination falls halfway between the
other two experts’ determinations (or within a maximum five percent variation with respect
to such halfway point), the third expert’s determination shall be the Fair Market Value.
The Fair Market Value as so determined shall be final and binding upon the Shareholders for
all purposes.




10.1.3. Any expert selected pursuant to this provision shall not be affiliated with any
Shareholder nor shall it have provided other investment banking services to such
Shareholder during the preceding twelve (12) months and shall be a first rank investment
banking firm or other qualified firm of comparable standing with prior experience in
appraising assets comparable to the asset(s) at issue. If any Shareholder fails to appoint
an independent expert as required under this provision, such Shareholder shall forfeit its
rights to appoint an independent expert, and the determination of the Fair Market Value by
the independent expert appointed by the other Shareholder shall be final and binding for
all purposes hereunder. If the Shareholders agree on an expert, then the Venture shall pay
the fees and costs of the appraisal; otherwise, each Shareholder shall pay the fees and
costs of the expert it selects and the fees and costs of the third expert shall be borne by
the Shareholder whose expert provided the disregarded determination, or if there is no
disregarded determination, then the costs of the third expert shall be borne by the
Shareholders equally.




10.1.4. The independent experts shall determine the Fair Market Value of the Shares based
on market accepted standards and techniques, including but not limited to the discounted
cash flow of the Venture.



SECTION XI

REPRESENTATIONS AND WARRANTIES




11.1.      PTVLA hereby represents and warrants to Globosat that the following statements have been
materially true, accurate and complete as of the date of the execution of the MOU and shall remain
true, accurate and complete as of the date hereof:



37









 









	 	(i)	 	PTVLA (a) is a private limited liability company duly formed and validly
existing in accordance with the Laws of its jurisdiction, (b) is in regular operation,
(c) has full corporate power and authority to own or hold, and operate its properties,
business and assets, and to carry out its business as it is now being conducted, (d)
is substantially in compliance with any and all material Laws of the United States of
America applicable to it or to the conduct of its business, and (e) has obtained all
the required material approvals, licenses, authorizations, registrations and permits
from relevant federal, state and municipal authorities for carrying out of its
business and activities;
	 
	 	(ii)	 	PTVLA has full corporate power and authority to execute and deliver this
Shareholders Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Shareholders
Agreement, and the performance of its obligations hereunder, have been duly authorized
by all corporate bodies of PTVLA. The legal representatives of the PTVLA who sign this
Shareholders Agreement are duly empowered to execute the present Shareholders
Agreement, without any restriction;
	 
	 	(iii)	 	except as provided for in Section XIX below, no registration, declaration or
filing with, and no consent, authorization or approval of, any Governmental Authority
or other Person is required for the execution or delivery by PTVLA of this
Shareholders Agreement, or for the assumption by PTVLA of the obligations contemplated
herein;
	 
	 	(iv)	 	neither the execution or delivery of, nor the performance or consummation by
PTVLA of its obligations under this Shareholders Agreement (a) violate, conflict with
or result in a material breach or termination of, or otherwise give any other
contracting party additional rights or compensation under, or the right to terminate,
or constitute a default under the terms of, any material Agreement to which PTVLA is a
party or by which PTVLA is bound or subject to, (b) violate any judicial order
against, or binding upon, PTVLA, or (c) constitute a violation by PTVLA of any
applicable Law or of any organizational documents of PTVLA;




38









 












	 	(v)	 	Exhibit 11.1.(v) contains a list of all Assets, Trademarks and substantially
all existing Adult Content (including Playboy Branded Adult Content and Playboy
Unbranded Adult Content) owned, developed, exploited, operated, distributed, produced
and/or marketed by PTVLA which shall be transferred (directly or indirectly, including
but not limited to through capital contributions, licensing or sublicensing
Agreements) or licensed to the Venture in accordance with the provisions of this
Shareholders Agreement (the “PTVLA Assets”). PTVLA has the power and authority
necessary to effectively transfer and license the PTVLA Assets, which are free and
clear of all Liens (other than Liens that do not create a material adverse effect on
the use of the PTVLA Assets) and are in good standing and are not the subject of any
challenge in all material respects. To PTVLA’s knowledge, there have been no claims
made and the PTVLA has not received any notice that any of the material PTVLA Assets
is invalid or conflicts with the asserted rights of others, except for those conflicts
which would not reasonably be expected to cause a material adverse effect on the
Venture’s business;
	 
	 	(vi)	 	there are no actions, suits, claims, proceedings or investigations pending
or, to the best of PTVLA’s knowledge, threatened against it in any court or before or
by any Governmental Authority, agency, instrumentality or any arbitrator in which, in
PTVLA’s good-faith opinion, there is a reasonable possibility of an adverse decision
that could, whether individually or in the aggregate, materially and adversely affect
PTVLA’s ability to perform its obligations under this Shareholders Agreement. There
are no judgments, decrees, injunctions, or orders of any court, Governmental
Authority, agency, instrumentality or arbitrator against PTVLA that could, whether
individually or in the aggregate, materially and adversely affect its ability to
perform its obligations under this Shareholders Agreement;
	 
	 	(vii)	 	all payments and expenditures in connection with the Venture and this
Shareholders’ Agreement will be recorded properly and accurately in the accounts of
PTVLA;
	 
	 	(viii)	 	PTVLA is the sole and lawful owner and holder of three thousand (3.000) common
Shares, representing forty percent (40%) of the total and voting corporate capital of
the Venture. On the date hereof, all Shares




39









 












	 	 	 	issued by the Venture and held by PTVLA are free and clear of any Liens of any
nature whatsoever and will continue to be free and clear of any Liens of any nature
whatsoever thereafter;
	 
	 	(ix)	 	the representations and warranties contained in this Section 11.1 do not
contain any untrue statement of a material fact and do not omit any material fact that
would make the statements made herein misleading. To the best of PTVLA’s knowledge,
there is no fact that materially and adversely affects the PTVLA Assets or PTVLA’s
ability to perform its obligations under this Shareholders Agreement; and
	 
	 	(x)	 	to the best of PTVLA’s knowledge, information and belief, the performing
rights in all musical compositions contained in the Adult Content licensed by PTVLA to
the Venture under the License Agreement are: (i) controlled by a performing rights
society having jurisdiction in the Territory, (ii) controlled by PTVLA, or (iii) in
the public domain. PTVLA does not represent or warrant the payment of such music
performing royalty rights, except with respect to the distribution agreements set
forth in Exhibit 11.1(x), which shall be the solely responsible for any costs related
to it and shall promptly defend and hold the Venture and Globosat harmless from any
penalty or liability arising therefrom.





11.2.      Globosat hereby represents and warrants to PTVLA that the following statements have been
materially true, accurate and complete as of the date of the execution of the MOU and shall remain
true, accurate and complete as of the date hereof:




	 	(i)	 	Globosat (a) is a private limited liability company duly incorporated and
validly existing in accordance with the Laws of Brazil, (b) is in regular operation,
(c) has full corporate powers and authority to own or hold, and operate its
properties, business and assets, and to carry out its business as it is now being
conducted, (d) is substantially in compliance with any and all material Laws of Brazil
applicable to it or to the conduct of its business, and (e) has obtained all the
required material approvals, licenses, authorizations, registrations and permits from
relevant federal, state and municipal authorities for carrying out of its business and
activities;




40









 












	 	(ii)	 	Globosat has full corporate power and authority to execute and deliver this
Shareholders Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Shareholders
Agreement, and the performance of its obligations hereunder, have been duly authorized
by all corporate bodies of Globosat. The legal representatives of Globosat who sign
this Shareholders Agreement are duly empowered to execute the present Shareholders
Agreement, without any restriction;
	 
	 	(iii)	 	except as provided for in Section XIX below, no registration, declaration or
filing with, and no consent, authorization or approval of, any Governmental Authority
or other Person is required for the execution or delivery by Globosat of this
Shareholders Agreement, or for the assumption by Globosat of the obligations
contemplated herein;
	 
	 	(iv)	 	neither the execution or delivery of, nor the performance or consummation by
Globosat of its obligations under this Shareholders Agreement (a) violate, conflict
with or result in a material breach or termination of, or otherwise give any other
contracting party additional rights or compensation under, or the right to terminate,
or constitute a default under the terms of, any material Agreement to which Globosat
is a party or by which Globosat is bound or subject to, (b) violate any judicial order
against, or binding upon, Globosat, or (c) constitute a violation by Globosat of any
applicable Law or of any organizational documents of Globosat;
	 
	 	(v)	 	Exhibit 11.2.(v) contains a list of all Assets, Trademarks and substantially
all existing Adult Content owned, developed, exploited, operated, distributed,
produced and/or marketed by Globosat which shall be transferred (directly or
indirectly, including but not limited to through capital contributions, licensing or
sublicensing Agreements) to the Venture in accordance with the provisions of this
Shareholders Agreement (the “Globosat Assets”). Globosat has the power and authority
necessary to effectively transfer the Globosat Assets, which are free and clear of all
Liens (other than Liens that do not create a material adverse effect on the use of the
Globosat Assets) and are in good standing and are not the subject of any challenge in
all material respects.




41









 












	 	 	 	To Globosat’s knowledge, there have been no claims made and Globosat has not
received any notice that any of the material Globosat Assets is invalid or
conflicts with the asserted rights of others, except for those conflicts which
would not reasonably be expected to cause a material adverse effect on the
Venture’s business;
	 
	 	(vi)	 	there are no actions, suits, claims, proceedings or investigations pending
or, to the best of Globosat’s knowledge, threatened against it in any court or before
or by any Governmental Authority, agency, instrumentality or any arbitrator in which,
in Globosat’s good-faith opinion, there is a reasonable possibility of an adverse
decision that could, whether individually or in the aggregate, materially and
adversely affect Globosat’s ability to perform its obligations under this Shareholders
Agreement. There are no judgments, decrees, injunctions, or orders of any court,
Governmental Authority, agency, instrumentality or arbitrator against Globosat that
could, whether individually or in the aggregate, materially and adversely affect its
ability to perform its obligations under this Shareholders Agreement;
	 
	 	(vii)	 	all payments and expenditures in connection with the Venture and this
Shareholders’ Agreement will be recorded properly and accurately in the accounts of
Globosat;
	 
	 	(viii)	 	Globosat is the sole and lawful owner and holder of four thousand and five hundred
(4.500) common Shares, representing sixty percent (60%) of the total and voting
corporate capital of the Venture. On the date hereof, all Shares issued by the Venture
and held by Globosat are free and clear of any Liens of any nature whatsoever and will
continue to be free and clear of any Liens of any nature whatsoever thereafter; and
	 
	 	(ix)	 	the representations and warranties contained in this Section 11.2 do not
contain any untrue statement of a material fact and do not omit any material fact that
would make the statements made herein misleading. To the best of Globosat’s knowledge,
there is no fact that materially and adversely affects the Globosat Assets or
Globosat’s ability to perform its obligations under this Shareholders Agreement.




42









 











11.3.      On or before August 1, 2007, each of the Shareholders shall deliver to the other Shareholder
a legal opinion, in English language, by law offices legally authorized to practice law at their
respective jurisdictions, attesting that (i) each Shareholder, as the case may be, has full
corporate power and authority to execute and deliver this Shareholders Agreement and the Definitive
Agreements, (ii) each Shareholder, as the case may be, is able to perform its obligations herein
and to consummate the transactions contemplated hereby, (iii) the execution and delivery of this
Shareholders Agreement and the Definitive Agreements, and the performance of its obligations
provided herein, have been duly authorized by all requisite corporate actions of the relevant
Shareholder, and (iv) the legal representatives of the relevant Shareholder who sign this
Shareholders Agreement and the Definitive Agreements are duly empowered to execute such documents,
without any restriction.



SECTION XII

NON COMPETITION




12.1.      Except as otherwise provided herein, during the Term, any exploitation and/or development of
Adult Content in Television and/or Other Media in Brazil by the Shareholders shall be made jointly
through the Venture and in accordance with the provisions set forth herein.



12.2.      PTVLA shall not, and shall cause each of its Affiliate Companies, not to, directly or
indirectly (whether individually or jointly with any other Person) engage in, own an interest in or
manage any Adult Content business for Television or Other Media, and/or for any Person that has a
similar purpose to any of the Venture’s purposes (as provided for herein) in or specifically
targeted to Brazil. For purpose of this Shareholders Agreement, it is understood that PEGI shall
not be deemed an Affiliate Company of PTVLA and that PEGI’s existing businesses in Brazil are not a
violation of this provision of this Shareholders Agreement.



12.3.      Globosat shall not, and shall cause each of its Affiliate Companies, not to, directly or
indirectly (whether individually or jointly with any other Person) engage in, own an interest in or
manage any Adult Content business for Television or Other Media, and/or for any Person that has a
similar purpose to any of the Venture’s purpose (as provided for herein) in or specifically
targeted to any country of the world (with the exception of the activities of the Venture in Brazil
pursuant to this Shareholders Agreement).



43









 









12.3.1. Globosat shall exercise its voting rights in any of the Globosat’s Ventures and use
its best efforts to exercise its rights and powers to cause Globosat’s Ventures not to
engage in the Adult Content business for Television and the Other Media throughout Brazil
and the world.




12.3.2. The non-competition provisions set forth in this Shareholders Agreement shall not
apply to the exploitation, by Globosat and its Affiliate Companies, of Adult Content
through Wireless, Internet and print media; provided that: (i) any such exploitation is not
branded with a United States based Adult Content magazine (including, but not limited to,
Penthouse, Hustler and Playgirl); (ii) exploitation through Internet and Wireless shall
only be in connection with print media; and (iii) the Venture shall be provided with any
and all benefits, revenues, direct costs and rights from such exploitation through Internet
and Wireless.




12.3.3. For the avoidance of doubt, the non-competition provisions set forth in this
Shareholders Agreement shall not apply to the distribution of Adult Content to consumers by
Globosat and its Affiliate Companies through companies whose purpose is the distribution of
linear services, whether on subscription, pay-per-view, video-on-demand, a la carte, free
basis; or DVD/Home Video, including, but not limited to, Sky Brasil Serviços Ltda., Net
Serviços S/A, Globofilmes and SIGLA — Sistema Globo de Gravações Audiovisuais Ltda.



     12.4.      Notwithstanding the foregoing, the Venture may produce and distribute the Venture’s Original
Content for purposes of the exploitation through Television and Other Media in Brazil or outside
Brazil in accordance with Section III above.



     12.5.      For the avoidance of doubt, the Non Competition Provisions shall not be applied to the
Playboy Lifestyle Channel or any similar programming. For further avoidance of doubt, nothing in
this Shareholders Agreement shall be construed as a limitation to the Venture’s capacity in
competing with Club Jenna, Inc. and its subsidiaries, in Brazil.



SECTION XIII

USE OF TRADEMARKS AND VENTURE’S CORPORATE NAME




13.1.      The Venture shall comply with the Trademark and Content Standards as set forth in Exhibit
13.1 attached hereto.



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13.2.      The Shareholders hereby agree that the Venture’s corporate name shall be “PB Brasil
Entretenimento S.A.” or as otherwise mutually agreed by the Shareholders. Notwithstanding anything
to the contrary in this Shareholders Agreement, PEGI has given the Shareholders and the Venture,
pursuant to the Parent Company Agreement, permission to gratuitously use the tradename “Playboy” as
part of Venture’s corporate name. The Shareholders acknowledge, accept and agree that each of the
Shareholders and the Venture have no rights to the tradename “Playboy” not specified herein, in the
Parent Company Agreement or in any other Agreements executed in connection with the Venture and
will not incur any rights and will retain no rights whatsoever to the tradename “Playboy” during
and after the Venture’s use of such tradename other than as specified herein, in the Parent Company
Agreement and in any other Agreements executed in connection with the Venture. In addition to the
foregoing, immediately following the expiration or termination of the Venture’s right to use the
Playboy Trademarks, the Venture will change its name so that the tradename “Playboy” is no longer
part of the Venture’s name and the Venture will immediately destroy all stationery, business cards
and other materials containing the tradename “Playboy”.



SECTION XIV

TERM




14.1.      Except for the provisions set forth in Sections 9.1.4 and 15.1.3 — which shall remain in
full force and effect for the respective periods set forth therein —, the Shareholders hereby
agree that the Shareholders Agreement shall remain in full force and effect for a period of twenty
(20) years counted from the date of the execution of this Shareholders Agreement (the “Term”). The
Term may be extended upon mutual agreement of the Shareholders.




14.1.1. The Shareholders hereby agree that it is their intention, and that they will make
every commercially reasonable effort, to extend the Term for an additional five-year period
on commercially reasonable terms, taking into consideration all events and factors which
occurred during the Term and in furtherance of this intention.




14.1.2. The Shareholders hereby undertake to meet to negotiate in good faith the extension
of the Term no later than two (02) years prior to the expiration of the
Term, provided that such negotiation shall terminate no later than one (01) year prior to
the expiration of the Term.



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14.1.3. Subject to the terms and conditions set forth herein and notwithstanding any other
provision herein, each Shareholder shall have the right to sell to the other Shareholder
100% (and not less than 100%) of its Shares at the Fair Market Value determined in
accordance with Section X of this Shareholders Agreement (the “Way-out Option”), provided
that the Shareholders shall only be entitled to exercise the Way-out Option upon the
occurrence of any of the following: (i) within the first five-year period commencing
January 1, 2008, the annual revenue of the Venture is, for any three (3) Fiscal Years,
thirty percent (30%) below the revenue projected in each of the relevant Annual Business
Plans approved by the Shareholders; or (ii) after the first five-year period commencing
January 1, 2008, the annual revenue of the Venture is, for three (3) consecutive Fiscal
Years, thirty percent (30%) below the revenue projected in each of the relevant Annual
Business Plans approved by the Shareholders.




14.1.3.1. To exercise the Way-Out Option, any Shareholder (the “Selling Shareholder”)
shall, within sixty (60) days as of the date of the release of the relevant audited
financial statement, give notice in writing (a “Way-Out Notice”) to the other Shareholder
(the “Purchasing Shareholder”) informing its intention to exercise the Way-Out Option, at
the price per Share equal to the Fair Market Value.




14.1.3.2. The Shareholders hereby agree that the Purchasing Shareholder shall not be
obligated to purchase the Selling Shareholders’ Shares unless the Purchasing Shareholder
gives notice to the Selling Shareholder within thirty (30) days from the receipt of a
Way-Out Notice informing its intention to purchase the Selling Shareholders’ Shares in
accordance with the terms and conditions of Section 14.1.3 and its sub-items.




14.1.3.3. The closing of the Way-Out Option shall occur on the tenth (10th)
Business Day following the determination of the Fair Market Value of the Selling
Shareholders’ Shares in connection with this Section 14.1.3 and its sub-items, subject to
the provisions set forth in Section X. The closing of the Way-Out Option shall take place
at the Venture’s headquarters or such other location as the Shareholders may mutually
agree, and the price of the Shares subject to
the Way-Out Option shall be paid in cash at the closing, against execution, by the
Shareholders, of the transfer instrument required to perfect the sale.



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14.1.3.4. In the event of the exercise of the Way-Out Option pursuant to the terms of this
Shareholders Agreement, the Selling Shareholder undertakes not to, and shall cause its
Affiliate Companies not to compete, directly or indirectly, with the activities of the
Venture, specifically related to the exploitation, development, operation, distribution,
production and commercialization of Adult Content in Television and Other Media in Brazil.
This non-competition covenant is valid within Brazil and shall be enforceable, and in full
force and effect for a period of 1 (one) year from the date of the transfer of the Shares
subject to the Way-Out Option.




14.1.3.5. In the event (a) both Shareholders timely send a Way-Out Notice in accordance
with the terms set forth herein, or (b) the Purchasing Shareholder does not timely provide
the notice referred to in Section 14.1.3.2, or (c) the Shareholders do not reach an
agreement with respect to the transfer of the Selling Shareholder’s Shares in connection
with the timely exercise of a Way-Out Option in accordance with the terms and conditions of
Section 14.1.3 and its sub-items, then the Shareholders agree that (i) the Venture shall be
promptly dissolved in compliance with the Venture Wind-Up process set forth in Section 15.2
of this Shareholders Agreement, (ii) the Shareholders shall vote for the dissolution of the
Venture at the applicable Shareholders Meeting, and (iii) that no further costs or expenses
shall be incurred by the Venture or behalf the Venture by any of the Shareholders unless it
is related to dissolution of the Venture or otherwise required by law.



SECTION XV

TERMINATION




15.1.      Notwithstanding the provisions set forth in Section XIV above, the occurrence of any of the
following events (“Termination Event”) with respect to a Shareholder (the “Defaulting Shareholder”)
shall entitle the other Shareholder (the “Non-Defaulting Shareholder”) to exercise, at its sole
discretion, the rights set forth in Section 15.1.1 below:




	 	(i)	 	the commencement by or against a Defaulting Shareholder of bankruptcy,
insolvency, dissolution, liquidation, judicial reorganization,
composition with creditors or any similar proceeding, that is not dismissed or
withdrawn within sixty (60) days; or




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	 	(ii)	 	a breach by a Defaulting Shareholder of a material obligation that has not
been cured within sixty (60) days from the receipt of a written notice to that effect
from the Non-Defaulting Shareholder; or
	 
	 	(iii)	 	the cessation, expropriation or threat of expropriation of a Defaulting
Shareholder’s business or a substantial part thereof.






15.1.1. Upon the occurrence of a Termination Event, the Non-Defaulting Shareholder shall
have the right to terminate the Shareholders Agreement, pursuant to Section 15.3 below.




15.1.2. The rights set forth in Section 15.1.1 above shall not be deemed an exclusive
remedy in the event of a Termination Event and shall not prevent the Non-Defaulting
Shareholder (whether or not it has exercised those rights) from seeking specific
performance and/or claiming the damages actually suffered in connection with such
Termination Event.




15.1.3. In the event of termination of the Shareholders Agreement pursuant to a Termination
Event, the Defaulting Shareholder undertakes not to, and shall cause its Affiliate
Companies (including, but not limited to, Claxson and GCP, as the case may be) not to
compete, directly or indirectly, with the activities of the Venture, specifically related
to the exploitation, development, operation, distribution, production and commercialization
of Adult Content in Television and Other Media in Brazil, except for the Playboy Brazil
Magazine Assets and Club Jenna. This non-competition covenant is valid within Brazil and
shall be enforceable, and in full force and effect as of the date of the Termination Event
and for a period of two (02) years counted from the date the Defaulting Shareholder ceases
to own any Shares in the Venture.




15.1.3.1. In the event the Defaulting Shareholder is PTVLA, the Shareholders
recognize that PEGI has certain obligations provided for in the Parent Company
Agreement.



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15.2.      In the event of termination of the Venture or of non-renewal of its expired Term (the
“Termination Date”), the Shareholders hereby agree to adopt the following procedure:




15.2.1. Within 15 (fifteen) days following the Termination Date, the Venture shall, by
means of a capital reduction, or through any other procedure mutually agreed by the
Shareholders, transfer the PTVLA Assets back to PTVLA and the Globosat Assets back to
Globosat.




15.2.2. After the transfer of the assets mentioned in Section 15.2.1 is concluded, the
Shareholders shall take all necessary measures in order to initiate a winding up procedure
with respect to the Venture (the “Venture Wind Up”).




15.2.3. After the transfer of the assets mentioned in Section 15.2.1 is concluded and prior
to the Venture Wind Up, the Venture shall remove any Playboy Trademark from any and all of
the Venture’s assets to be sold to third parties as a result of the Venture Wind Up. In the
event, for any reason whatsoever, it is not feasible to remove a Playboy Trademark from a
given asset, such asset shall be immediately destroyed and shall not be sold to third
parties as a result of the Venture Wind Up.




15.2.4. Notwithstanding the provisions set forth in Sections 15.2.2 and 15.2.3 above, the
Shareholders may elect not to proceed with the Venture Wind Up, in the event a Shareholder
agrees to sell its Shares to the other Shareholder.



15.3      In the event of termination of this Shareholder Agreement pursuant to Section 15.1.1 above,
the Shareholders hereby agree to adopt the following procedure:




15.3.1 The Non-Defaulting Shareholder shall, within a period of thirty (30) days counted
from the date it became aware of a Termination Event, give notice in writing (the
“Termination Notice”), to the Defaulting Shareholder informing (i) the exercise of its
right to terminate this Shareholder Agreement, and (ii) whether it elects to purchase all
of the Defaulting Shareholder’s Shares, at the price per Share equal to the Fair Market
Value, or if it elects to proceed with the Venture Wind Up, in which case the procedure set
forth in Sections 15.2.2 and 15.2.3 shall be observed.



49









 






15.3.2. Prior to the acquisition of the Defaulting Shareholder’s Shares or to the
Venture Wind Up, as the case may be, within 15 (fifteen) days from the date of receipt of
the Termination Notice by the Defaulting Shareholder, the Venture shall, by means of a
capital reduction, or through any other procedure mutually agreed by the Shareholders,
transfer the PTVLA Assets back to PTVLA and the Globosat Assets back to Globosat.




15.3.3. For the purposes of item (ii) of Section 15.3.1 above, the Fair Market Value shall
be determined in accordance with the procedure set forth in Section X above; provided
that, (i) in the determination of the Fair Market Value, the appraisers shall take into
consideration the transfer of the PTVLA Assets back to PTVLA and the transfer of the
Globosat Assets back to Globosat; (ii) all costs related to the determination of the Fair
Market Value shall be borne, exclusively, by the Defaulting Shareholder, including, but not
limited to, all fees due to the appraiser(s) appointed by the Shareholders.




15.3.4. Within sixty (60) days from the date that the Fair Market Value has been duly
determined in accordance with Section 15.3.3 above, the Defaulting Shareholder shall sell
and, the Non-Defaulting Shareholder shall purchase, all of the Defaulting Shareholder’s
Shares, at the price per Share equal to the Fair Market Value.



15.4.      In the event of termination of this Shareholder Agreement, whether as a result of the
provisions set forth in Section 15.2 above or in Section 15.3 above, all Agreements executed by the
Venture and the Shareholders or their respective Affiliate Companies as a result of this
Shareholder Agreement shall be automatically terminated.



15.5.      The Uncured Material Breach (as respectively defined in the License Agreement and in the
Globosat Content Sub-license Agreement) of the License Agreement or of the Globosat Content
Sub-license Agreement, as the case may be, by either party to the License Agreement or to the
Globosat Content Sub-license Agreement, as the case may be, shall be deemed a breach by the same
party of this Shareholders Agreement, and without prejudice to any rights or claims it may have
under law, the Shareholders shall have all of their respective rights and remedies available under
this Shareholders Agreement as the non breaching party, including the termination of this
Shareholders Agreement, the License Agreement and the Globosat Content Sub-license Agreement. In
addition, PTVLA shall be entitled to all of its subrogation rights pursuant to the License
Agreement.



50









 








SECTION XVI

REGISTRATION OF THE SHAREHOLDERS AGREEMENT




16.1.      For the purposes of Article 118 and its paragraphs of the Brazilian Corporate Law, the
Shareholders hereby agree that an executed copy of the Shareholders Agreement shall be kept at the
headquarters of the Venture.



16.2.      Promptly after the execution of the Shareholders Agreement and as long as it remains in
effect, the Shareholders shall cause the Register of Nominative Shares, as well as all
certificates, if any, related to the common Shares of the Venture to bear a legend as follows:




“A transferência, compra e venda das ações representadas por este
registro estão sujeitas às restrições previstas em um acordo de
acionistas. Uma cópia deste acordo de acionistas está arquivada na
sede social da PB Brasil Entretenimento S.A., cujas cláusulas
referentes a tais restrições podem ser examinadas durante o
expediente normal da companhia.”



SECTION XVII

OTHER AGREEMENTS




17.1.      It is agreed that the Shareholders may render Technical Services to the Venture by means of
the execution of a Technical Services Agreement. The Shareholder interested in rendering Technical
Services to the Venture shall present its technical and operational conditions, as well as the
price (which shall be in Reais, annually increased in accordance with IGP-M) to be paid by the
Venture in consideration for the rendering of such Technical Services. The Venture will choose the
Shareholder that will render the Technical Services, according to the most favorable price,
commercially reasonable technical and operational conditions offered.




17.1.1. In the event any of the Shareholders and/or any of its Affiliate Companies enters
into any Agreement regarding Technical Services (or, with respect to Globosat, Agreements
by means of which the Affiliates Companies of Globosat will act on the sale of the Adult
Content) with any Person (other than



51









 






Claxson, PEGI, GCP or Globosat’s wholly-owned subsidiaries, as the case may be) with more
favorable terms than those set forth in Technical Services Agreements entered into with the
Venture, than the terms of such Technical Services Agreements shall be replaced or modified
to reflect such more favorable terms.




17.1.2. Notwithstanding the provisions of Sections 17.1 and 17.1.1 above, the Shareholders
hereby agree that Back-Office Services will be provided by Globosat to the Venture based on
commercially reasonable fees negotiated in good faith that will be set forth in the Annual
Budget and Annual Business Plan.



17.2.      The Shareholders hereby agree that Globosat shall be exclusively responsible for any and all
advertising sales of the Venture, according to Globosat’s regular business conditions already in
practice, pursuant to an Advertising Sales Services Agreement to be executed on the date hereof.



17.3.      In their capacity as the only Shareholders of the Venture, Globosat and PTVLA shall cause the
Venture to execute a Distribution Agreement with Net Brasil granting to Net Brasil’s Affiliate
System the right to exhibit, carry and authorize the reception in residential and/or
non-residential establishments of the Adult Content, in Television and Other Media.




17.3.1. The negotiation of the distribution Agreements of the Adult Content owned and/or
operated by the Venture with the clients shall be carried out by Net Brasil, in the same
terms and conditions of the Net Brasil Distribution Agreement. The Venture shall supervise
such negotiations with the clients and the Venture’s Board of Officers shall approve such
distribution Agreements with clients, subject to Section 5.2.



17.4.      In their capacity as the only Shareholders of the Venture, Globosat and PTVLA shall also
cause the Venture to execute the Net Brasil Agency Agreement by which
the Venture shall — subject
to the terms thereof — appoint Net Brasil as its exclusive agent for the purpose of soliciting,
promoting, marketing to and negotiating with Net Brasil’s Non Affiliate System for the carriage of
Adult Content on such Net Brasil’s Non Affiliate System through Television and Other Media, during
the Term; provided that, for so long as the Net Brasil Agency Agreement is valid and
effective, the Venture shall not enter into any Agreement with any Net Brasil’s Non Affiliate
System with respect to



52









 








the carriage of Adult Content on such Net Brasil’s Non Affiliate System unless such Agreement was
negotiated by Net Brasil.




17.4.1. The Shareholders hereby agree that the Net Brasil Agency Agreement shall set forth
that Net Brasil shall be entitled to receive, on a monthly basis, a commission equal to 10%
(ten percent) of the total amount received by the Venture from Net Brasil’s Non Affiliate
System in Television and Other Media.




17.4.2. For the avoidance of doubt, the Shareholders hereby agree that Net Brasil shall not
be entitled to receive the commission referred to in Section 17.4.1 above in the event that
Net Brasil negotiates a less favorable price than those related to the Net Brasil Affiliate
System.




17.4.3. The distribution and exhibition of Adult Content by Net Brasil’s Non Affiliate
System shall be negotiated by Net Brasil in accordance with the terms and conditions
settled in the Net Brasil Agency Agreement to be executed between the Venture and Net
Brasil or as otherwise instructed by the Venture to Net Brasil. The Venture shall supervise
such negotiations and the Venture’s Board of Officers shall approve such Net Brasil Agency
Agreement and any distribution Agreements regarding Net Brasil’s Non-Affiliate System.



17.5.      For the avoidance of doubt, the distribution of all Adult Content to third parties shall not
be limited or restricted by any provision set forth in such Agreements other than MFN provisions.



17.6.      In their capacity as the only Shareholders of the Venture, Globosat and PTVLA shall also
cause the Venture to execute a license Agreement with PTVLA in order to set forth the terms and
conditions by which PTVLA shall make available, on an exclusive basis, to the Venture, to the
extent PTVLA has or controls those rights, without any additional charge other than the fees owed
to PTVLA set forth in Section 17.6.2 below, all the Adult Content for the Television and Other
Media businesses already produced and/or distributed and/or to be produced and/or distributed by
PTVLA in Latin America and/or targeted for exploitation in Latin America by means of Television and
the Other Media (including but not limited to exclusive license to the Venture for the use and
exploitation of the Playboy Unbranded Adult Content and exclusive license to the Venture for the
Playboy Unbranded Trademarks in Television and Other Media in Brazil during the Term) (“License
Agreement”), except that the Playboy Branded Content and the Playboy Trademarks shall be
available to the Venture solely for



53









 








Television. The Venture shall have the right to use and exploit the above mentioned Adult Content
in the Other Media and Television, provided that Playboy Branded Adult Content may only be
used and exploited in Television. Such Adult Content may be customized or not, in Brazil, at the
Venture’s sole discretion and expense, subject to Section 3.1 above.




17.6.1. Globosat also shall make available to the Venture all the Adult Content already
produced or the Adult Content’s licensed which may be transferred to the Venture, as well
as the trademarks, in accordance with the Globosat Content Sub-license Agreement and the
Globosat Trademark License Agreement.




17.6.2. In consideration for the licensing of Adult Content rights to the Venture pursuant
to this Shareholders Agreement, PTVLA shall be entitled to receive, per year, during the
Term, the lesser of (i) 9.5% (nine point five percent) of the Television Net Revenues for
such relevant year payable monthly, or (ii) R$18,000,000.00 (eighteen million Reais)
annually, provided that this amount shall be annually adjusted, starting on January
1st, 2008, in accordance with the variation of the IGP-M rate for the
immediately preceding year.



17.7.      On the date hereof, Globosat and PTVLA will also execute a trademark coexistence agreement
regarding the use of the ForMan Trademark (“Trademark Coexistence Agreement”).



SECTION XVIII

CONFIDENTIALITY




18.1.      Each Shareholder undertakes to the other Shareholder that it (i) will not at any time, either
during or after the Term of this Shareholders Agreement and/or any of the Definitive Agreements,
use or divulge to any Person nor publish, or disclose or permit to be published or disclosed, any
secret or Confidential Information relating to the Venture or any other Shareholder which it has
received or obtained, or may receive or obtain (whether or not, in the case of documents, they are
marked as confidential), except in the proper course of the provision of services on behalf of the
Venture; and (ii) will not at any time, either during or after the Term of this Shareholders
Agreement, except as required by the Venture or by the other Shareholder, retain, duplicate or
remove from the Venture’s premises Confidential Information relating to the Venture or any other
Shareholder in whatsoever form, which is supplied by the Venture or any other Shareholder to it or
which comes to its notice during the period of this



54









 








Shareholders Agreement and/or any of the Definitive Agreements; except to the extent disclosure is
required as a matter of Law or regulation (including the rules and regulations of a stock exchange
or a regulatory agency) or such information is in the public domain by means not contrary to this
confidentiality provision.



SECTION XIX

SUBMISSION TO CADE




19.1.      The Shareholders recognize that the transactions contemplated herein have already been
submitted to the approval of CADE. Nevertheless, the Shareholders shall remain jointly responsible
and shall take all necessary measures for the timely submission of any other documents regarding
the transactions contemplated herein to CADE (including a executed copy of this Shareholders
Agreement), as well as to endeavor to obtain such authority’s full approval of the transactions
contemplated herein.




19.1.1. The Shareholders are currently jointly represented before CADE by one (01)
Brazilian law firm, contracted by consensus among the Shareholders.




19.1.2. The Shareholders shall share the expenses, costs and fees related to the filing
(including attorneys’ fees) pro rata in accordance with their respective voting percentage
interest in the Venture, including the preparation, execution and delivery of the
Definitive Agreements (with the exception of the Shareholders Agreement) and compliance
herewith, whether or not the transactions contemplated hereby shall be consummated.




19.1.3. All the documents related to this Shareholders Agreement shall be filed before the
CADE by the Shareholders within fifteen (15) days after the signature of this Shareholders
Agreement.




19.1.4. The Shareholders 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
Shareholders Agreement and the MOU.




19.1.5. Each of the Shareholders shall (i) provide the law firm in charge of the filing
before CADE, as established in Section 19.1.1 above, with any and all information required
to prepare the necessary documentation to obtain the



55









 






approval from the antitrust authorities, subject to the failure to comply with such
obligation pursuant to Section 19.1.6 below; (ii) consult with each other prior to any
filing or application relating to the transactions contemplated by this Shareholders
Agreement, the MOU or any other Agreement; (iii) share all relevant information relating to
such filings and conversations, to the extent that the information provided is not
confidential to such Shareholder; (iv) allow the law firm in charge of the filing to
provide the other Shareholder copies of all filings supplied by such Shareholder or any of
its Affiliate Companies to any Governmental Authority, in connection with this Shareholders
Agreement, the MOU or any other Agreement and the transactions contemplated hereby, to the
extent that the information provided is not confidential to such Shareholder; and (v)
provide each other with advance notice of any meetings regarding such filings or other
communications and, at any other Shareholder’s request, the opportunity to participate in
such meetings and conversations. Notwithstanding the foregoing, nothing in this Section
19.1 and its sub-items shall be construed to restrict the ability of any Shareholder or any
of its Affiliate Companies to comply with applicable Laws, provided that the other
Shareholder, as far as practicable, is given reasonable notice and reasonable ability to
consult before any such compliance is effected.




19.1.6. The Shareholders further agree that each Shareholder is fully and solely
responsible for the supply of any information relating to such Shareholder or any of its
Affiliate Companies requested by CADE (or any other Governmental Authority) in connection
with the filings hereunder, and that any penalty imposed by CADE under Brazilian Federal
Law no. 8.884 of June 11, 1994, as amended from time to time, or by any other Governmental
Authority for failure to provide such information shall be borne by the Shareholder that
failed to comply with such Law, and, accordingly, such Shareholder shall indemnify,
promptly defend and hold the other Shareholder harmless from any penalty or liability
arising therefrom.




19.1.7. The Shareholders shall take all necessary measures in order to contribute to CADE’s
prompt and full approval and to ensure the practical results intended by CADE’s decision,
preserving the full intent of the terms agreed to pursuant to this Shareholders Agreement.




19.1.8. If CADE imposes any conditions or restrictions to the Venture or imposes amendments
of any terms and conditions set forth in this Shareholders



56









 





Agreement, in the MOU and/or in the Definitive Agreements, the Shareholders shall make
their good-faith efforts, at their own exclusive costs, to reach a joint and mutual
agreement with regard to the restrictions and/or orders imposed by CADE. If, upon mutual
agreement by the Shareholders, the conditions, restrictions and/or amendments to this
Shareholders Agreement, the MOU and/or the Definitive Agreements are considered to
materially affect the Venture, any Shareholder may terminate this Venture without any
liability. The Shareholders agree that, in such case, no indemnification or payments of
whatever nature shall be due by any Shareholder to the others.



19.1.9. Notwithstanding anything to the contrary in this Shareholders Agreement, in the MOU
or any other Agreement, Globosat shall not be required to agree to any restrictions on its
business or that of any of its Affiliate Companies in order to gain any governmental
approval necessary for the consummation of the transactions contemplated hereby or by any
other Agreement. In the event that any Governmental Authority proposes to impose any such
restrictions or requires concessions on the business of Globosat, GCP and/or any of its
Affiliate Companies in order to gain any governmental approval and such restrictions and
concessions, individually and in the aggregate, do or will, in Globosat’s good-faith view,
directly or indirectly adversely affect or otherwise affect in any respect any of Globosat,
GCP and/or any of its Affiliate Companies (including any position inconsistent with any
interest of any of Globosat, GCP and/or any of its Affiliate Companies to any Governmental
Authority) (collectively, the “Globo Restrictions”), Globosat shall have the right to
determine, in its reasonable discretion, whether or not to accept such Globo Restrictions,
and shall negotiate such Globo Restrictions — but only so long and to the extent that such
restrictions and concessions continue, individually and in the aggregate, to constitute
Globo Restrictions — with the relevant authorities on behalf of the Shareholders,
provided that Globosat shall determine, in its sole discretion, whether or not to
accept such Globo Restrictions and/or to terminate the Venture without any liability. The
Shareholders hereby agree that, in such case, no indemnification or payments of whatever
nature shall be due by Globosat, GCP and/or any of its Affiliate Companies to any other
Shareholder nor shall PTVLA be liable to Globosat for any indemnification or payments of
whatever nature.



57









 








SECTION XX

INDEMNIFICATION




20.1.      Each Shareholder shall, and shall ensure that its agents or representatives comply with all
Laws applicable to its performance of this Shareholders Agreement and in connection with the
Venture. Each Shareholder shall indemnify, defend and hold the other Shareholder and the Venture —
and their respective Affiliate Companies, directors, officers, employees and representatives —
harmless from and against any claim, loss, damages actually suffered, liability, expense or cost of
whatever nature which the other Shareholder or the Venture — or their respective Affiliate
Companies, directors, officers, employees and representatives — may suffer through or arising from
or in connection with such Shareholder’s, or any of its agents or representatives acting on its
behalf, breach of any obligation, commitment, warranty, undertaking or covenant contained in this
Shareholders Agreement.



SECTION XXI

DISPUTE RESOLUTION




21.1.      In the event of a failure, on any duly convened Shareholders’ Meeting to achieve consensus on
any Relevant Matter submitted to such meetings, or in the event of any disputes, differences, or
questions arising from or related to this Shareholders Agreement or to the subject matter thereof
(the “Controversy”), regardless of whether such failure is due to abstention from voting, tied
voting or the absence of a quorum to do business, the CEO shall immediately refer the Controversy
to the legal representatives of each of the Shareholders, who shall make their best commercial
efforts to amicably resolve the Controversy within a period of sixty (60) days from the date on
which it was referred to them by the CEO.




21.1.1. In case the Shareholders amicably resolve the Controversy within the 60
(sixty)-day period referred to in Section 21.1 above, a Shareholders’ Meeting shall
be duly convened in order to submit such Relevant Matter for the Shareholders’
approval.




21.1.2. All Controversies that cannot be resolved by the Shareholders by discussion
pursuant to this Section XXI might be settled in accordance with Section 22.10
below.



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SECTION XXII

GENERAL PROVISIONS




22.1.      The Venture is the sole Party beneficiary to this Shareholders Agreement and shall (i)
observe and enforce its provisions, in accordance with any applicable Laws (including but not
limited to the Brazilian Corporate Law), and (ii) refrain from registering, enforcing or acting in
any other manner whatsoever in connection with any actions or omissions in breach of this
Shareholders Agreement.




22.1.1 Notwithstanding the provision set forth in item 1.1 of the Parent Company
Agreement, the Parties to this Shareholders Agreement, acknowledge that all
definitions used in the Parent Company Agreement shall have the same meaning
ascribed to them in this Shareholders Agreement, except as otherwise set forth
therein.



22.2.      The Shareholders hereby acknowledge and agree that each and every obligation of the
Shareholders under this Shareholders Agreement shall be subject to specific performance within the
terms of article 118 of the Brazilian Corporate Law. In addition to the foregoing, the Shareholders
acknowledge that this Shareholders Agreement constitutes extrajudicial title for enforcement for
all the purposes of articles 461, 466-A and following of the Brazilian Code of Civil Procedure.



22.3.      Except as otherwise provided in this Shareholders Agreement, no Shareholder shall, by any
means, Transfer its rights and/or duties under this Shareholders Agreement, in whole or in part, to
any Person, without the prior written consent of the other Shareholder. This Shareholders Agreement
shall be binding upon and shall inure to the benefit of the Shareholders and their respective
administrators, successors, legal representatives and permitted assigns. This Shareholders
Agreement is not intended and shall not be construed to create any rights in any Persons other than
the Shareholders and their respective successors and permitted assigns, and no Person shall assert
any rights as a third party beneficiary hereunder.



22.4.      If a transfer of Shares to a Permitted Transferee occurs, the rights and/or duties of the
Transferring Shareholder hereunder shall automatically be transferred to the Permitted Transferee,
subject to the provisions of Section 8.1 above.



22.5.      This Shareholders Agreement together with any document referred to herein constitutes the
entire agreement between the Shareholders and supersedes any prior agreements, understandings or
arrangements between them, whether oral or in writing, relating to the subject matter hereof
(including without limitation, the MOU) and no representations, undertaking or promise shall be
taken to have been given or be implied



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from anything said or written in negotiations between the Shareholders prior to this Shareholders
Agreement, except as set out in this Shareholders Agreement, in the Parent Company Agreement and/or
in the Definitive Agreements.



22.6.      No amendment or modification to this Shareholders Agreement shall be effective unless in
writing and signed by duly empowered representatives of all Shareholders and the Venture. In the
event of the amendment or modification of this Shareholders Agreement in accordance with its terms,
the Shareholders shall meet within thirty (30) calendar days following such amendment or
modification or as soon thereafter as practicable for the purpose of adopting any amendment to the
by-laws of the Venture that may be legally required as a result of such amendment or modification
to this Shareholders Agreement.



22.7.      In case of any conflict between the provisions of the by-laws of the Venture and the terms of
this Shareholders Agreement, the terms of this Shareholders Agreement shall prevail to the extent
permissible by the applicable Laws. In such event, the Shareholders shall amend, to the extent
permissible by the applicable Laws, the by-laws of the Venture accordingly (which by-laws are
attached hereto as Exhibit 22.7 to reconcile such conflict.




22.7.1. If any provision or part of a provision of this Shareholders Agreement shall be, or
be found to be by any court of competent jurisdiction to be, invalid or unenforceable, such
invalidity or enforceability shall not affect the other provisions or parts of this
provision or of this Shareholders Agreement, all of which shall remain in full force and
effect. Notwithstanding the foregoing, in the case of any conflict between the terms of
this Shareholders Agreement and the applicable Laws, the Shareholders shall take such
action as may be necessary or desirable to the extent permissible by the applicable Laws,
including the amendment of this Shareholders Agreement, to give effect to the intentions
and essential terms contemplated in this Shareholders Agreement, preserving, to the extent
possible, the main intentions and terms originally negotiated by the Shareholders.



22.8.      All notices and other communications required or permitted hereunder shall be made in
writing. Such notices shall be delivered personally, sent by facsimile transmission, confirmed in
writing, courier or registered mail, return receipt requested, postage prepaid, to the addresses
and facsimile numbers below, unless notice of change of addresses and/or facsimile numbers has been
given in writing in accordance with this



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Section, in which case any notices shall be sent to such new addresses and/or facsimile numbers.
The Shareholder giving notification or communication as provided for in this Shareholders Agreement
shall obtain dated evidence of delivery and the notification or communication shall be deemed to
have been given on the date indicated in the proof of delivery.




			
	          	 	If to Globosat, to:

Globosat Programadora Ltda.

Rua Itapiru 1209 — parte

Rio Comprido — CEP: 20.251-032

Rio de Janeiro, RJ — Brazil

Attn: Sr. Alberto Pecegueiro

Tel: 55-21-2503-7763

Fax: 55-21-2273-2770


With copy to Globosat:

Av. Afrânio de Melo Franco 135 — 4o andar

Leblon — CEP 22.430-060

Rio de Janeiro, RJ — Brazil

Attn: Simone Nunes Lahorgue

Tel.: 55-21-2540-4495

Fax: 55-21-2540-4727


If to PTVLA, to:

Playboy TV Latin America, LLC

1550 Biscayne Boulevard

Miami, FL, 33132, USA

Attn: General Counsel

Tel.: 1-305-894-3500

Fax: 1-305-894-4803


With Copy to PEGI:

Playboy Entertainment Group, Inc.

2706 Media Center Drive

Los Angeles, CA 90065, USA

Attn: Business and Legal Affairs

Tel: 1-323-276-4000

Fax: 1-323-276-4502





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22.9.      The failure of any Shareholder to enforce or exercise, at any time or for any period of time,
any term of or any right or remedy in connection with or arising pursuant to or under this
Shareholders Agreement does not constitute, and shall not be construed as, a waiver of such term or
right or remedy and shall in no way affect that Shareholder’s right later to enforce or exercise
it.



22.10.      This Shareholders Agreement and the obligations and rights established herein, and any other
documents and Agreements that shall be executed by the Shareholders as a result of the
incorporation of the Venture, shall be construed in accordance with and shall always be subject to
the Laws of Brazil.



22.11.      Any dispute, controversy or claim arising out of, relating to, or in connection with, this
Shareholders Agreement and any other documents and Agreements that shall be executed by the
Shareholders as a result of the incorporation of the Venture, or the performance, breach,
termination or validity thereof, shall be submitted to the central courts of the district of Rio de
Janeiro, State of Rio de Janeiro, excluding any other, however privileged it may be.




22.11.1. PTVLA hereby irrevocably waives any immunity from jurisdiction of any kind to
which it may be or may come to be entitled, be it for the purposes of service of process,
performance, pledge, granting of a judicial or non-judicial warranty, performance warranty
(garantia de execução) or any other acts regarding negotiations, arbitration, lawsuits or
other kinds of judicial or non-judicial proceedings, hereby undertaking never to allege in
its favor such immunities from jurisdiction in any negotiation, arbitration, lawsuit or any
other kind of judicial or non-judicial proceeding related to its obligations, liabilities
or other matters related to this Shareholders Agreement or the transactions contemplated
hereby (including any liability for the payment of money).




22.11.2. On the date of execution of this Shareholders Agreement, PTVLA shall present to
the Venture and/or to Globosat certified copies of valid powers-of-attorney, each
appointing a natural person resident in Brazil to receive service of process on behalf of
each of PTVLA in all judicial or non-judicial proceedings related to this Shareholders
Agreement.



22.12.      This Shareholders Agreement was originally drafted and negotiated in Portuguese and it shall
be executed in Portuguese and English, provided, however, that
the Portuguese version shall prevail; provided, further that the English version of this
Shareholders Agreement shall be a relevant element of interpretation in order to determine the
actual meaning and spirit borne in mind by the Shareholders.



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IN WITNESS WHEREOF the Shareholders have caused this Shareholders Agreement to be executed in three
(03) counterparts of like form and content, for one sole effect, in the presence of the two (02)
undersigned witnesses.



Rio de Janeiro, July 4, 2007



/s/ Alberto
Pecegueiro          /s/
Rosana Codaro




GLOBOSAT PROGRAMADORA LTDA.




/s/ Alejando Iglesias




PLAYBOY TV LATIN AMERICA, LLC



/s/ Alberto
Pecegueiro          /s/
Mario Mannarino




Intervening Party:




PB BRASIL ENTRETENIMENTO S.A.




Witnesses:






1. /s/
Alessandra Guedes

Name:

ID no.:







2. /s/
Leidjane Ribeiro de Lima

Name:

ID no.:









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