1
EXHIBIT 10.37
A.Prot. 1997/13 Vorab-Ausfertigung
NOTARIAL DEED
PURCHASE & SALE AGREEMENT
Negotiated at Basel/Switzerland, this 16th (sixteenth) day of January 1997
(nineteen hundred and ninety-seven)
Before me, the undersigned notary
XXXXXXX XXXXX
in my offices in Basel, Switzerland, today appeared
1. Attorney-at-Law Xx.Xxxx-Xxxx Xxxxxxxxxx, born August 9, 1961, German
citizen, with business address x/x XXXXX XXXXXXXXX XXXXX,
Xxxxxxxxxxxxxxx 00-00, D-60311 Frankfurt am Main, and private domicile
at Xxxxxxx-Xxxx-Xxx. 0X, X-00000 Xxxxxxxx, known by person,
not acting on his own behalf, but as representative with authority of
representation and exempted from the restrictions imposed by Section
181 German Civil Code in the name and on behalf of
a) HSN Home Shopping Network GmbH x.Xx., a German company limited
by shares in process of incorporation with head office at
Xxxxxxxxxxx. 00 - 00, X-00000 Xxxxxxxxx xx Xxxx, Xxxxxxx,
to be registered in the Commercial Register at the local
court of Frankfurt am Main, according the attached certified
copy of the Deed of Incorporation dated December 12, 1996, and
the attached written power of attorney dated January 15, 1996
(recte 1997)
-hereinafter "HSN GmbH"-
b) Home Shopping Network Inc., 00000 00xx Xxxxx Xxxxx, Xx.
Xxxxxxxxxx, Xxxxxxx 00000, U.S.A., according the
aforementioned power of attorney
-hereinafter "HSN"-
2
2
2. Attorney-at-Law Xxxxxxx Xxxxxxxx, born June 8, 1964, German citizen,
with business address x/x Xxxxxxxxxxxx Xxxxxxx - Xxxxxxxx & Xx.XX,
Xxxxxxxxxx Xxx. 91 - 95, D-90762 Furth, and with private domicile at
Hallerwiese 10, D-90419 Nurnberg, identified by his German
Personalausweis,
not acting on his own behalf but
a) as representative with authority of representation and
exempted from the restrictions imposed by Section 181 of the
German Civil Code for Quelle Xxxxxxxxxxx XX & Co., a German
limited partnership with head office at Xxxxxxxxxx Xxxxxxx 00
- 00, X-00000 Xxxxx, Xxxxxxx, registered with the Commercial
Register at the local court of Furth under HRA 2425,
according the attached certified power of attorney dated
December 17, 1996, and the attached certified extracts from
the Commercial Register concerning the partnership (HRA 2425)
and its unlimited partner (HRB 4990) dated December 13, 1996,
-hereinafter "QUELLE"-
b) as representative without authority of representation and
waiving any personal liability for Xx. Xxxxxx Xxxxx, born
______________________, German citizen, with private domicile
at Xxxxx-Xxxx-Xxx. 0. X-00000 Xxxxxxx, Xxxxxxx
-hereinafter "XXXXX"-
c) as representative without authority of representation and
waiving any personal liability for Xx. Xxxxx Xxxxxx, born
______________________, German citizen, with private domicile
at Xxxxxxxx-Xxxxx-Str. 14, D-82343 Pocking,
-hereinafter "XX. XXXXXX"-
The persons appeared requested this Deed including certain Exhibits hereto to be
recorded in the English language. The acting Notary Public who is in sufficient
command of the English language ascertained that the persons appeared are also
in command of the English language. After having been instructed by the acting
Notary, the persons appeared waived the right to obtain the assistance of a
sworn interpreter and to obtain a certified German translation of this Deed
including the English Exhibits hereto.
The persons appeared, acting as indicated, asked for the Notarization of the
following:
3
3
PREAMBLE
WHEREAS, HSN sells a variety of consumer goods and services by means of customer
interactive electronic retail sales programmes which are transmitted via
satellite to cable television systems, affiliated broadcast television stations
and satellite dish receivers (hereinafter "HSN GmbH Business"). HSN GmbH is a
German limited liability company, newly formed for purposes of engaging in the
German electronic retail market and is indirectly wholly owned by HSN.
WHEREAS, H.O.T. Home Order Television GmbH & Xx.XX (hereinafter "H.O.T.") is
Germany's first and only television shopping network, operating a teleshopping
T.V. programme comprising in particular the distribution of products and
merchandise by means of interactive home-ordering television (hereinafter
"H.O.T. Business").
WHEREAS, HSN GmbH intends to acquire a 29% partnership interest in H.O.T. and a
29% share interest in H.O.T.'s General Partner, Home Order Television
Verwaltungs GmbH (hereinafter "General Partner").
WHEREAS, Quelle and Xxxxx (hereinafter also referred to as "Sellers") are
willing to sell an aggregate interest of 29% in the Limited Partnership and
an aggregate interest of 29% in the General Partner.
WHEREAS, Xx. Xxxxxx acceeds to this Agreement with respect to the provisions set
forth below in Section 2.5, Section 5 and Section 12 in his capacity as
shareholder of the General Partner and in his capacity as a limited partner of
H.O.T.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
Section 1 CURRENT STATUS
1.1 H.O.T.'s aggregate liability capital ("Haftkapital") of DM 5,000,000.00
(hereinafter "Liability Capital") is held as follows:
Quelle holds an aggregate partnership interest ("Beteiligung
am Festkapital") in the amount of DM 2,500,000.00.
Xxxxx holds an aggregate partnership interest in the amount of
DM 2,000,000.00.
4
4
Xx. Xxxxxx holds an aggregate partnership interest in the
amount of DM 500,000.00.
The above partnership interests, save for Xx. Xxxxxx'x, are hereinafter
referred to as the "Partnership Interests".
1.2 The General Partner's aggregate nominal share capital of DM 50,000.00
(hereinafter "Share Capital") is held as follows:
Quelle holds a share in the nominal amount of DM 25,000.00.
Xxxxx holds a share in the nominal amount of DM 20,000.00.
Xx. Xxxxxx holds a share in the nominal amount of DM 5,000.00.
The above shares, save for Xx. Xxxxxx'x, are hereinafter referred to as
the "Shares".
1.3 Sellers and Xx. Xxxxxx have entered into a cooperation agreement by
written instrument dated December 7, 1995 which amended the former
cooperation agreement, originally entered into by Quelle and Pro 7
Televisions GmbH, in the meantime renamed into ProSieben Media
Aktiengesellschaft (hereinafter "ProSieben") under the notarial deed of
the notary public Xx. Xxxxxx Xxxxxxxxx, Basel, of April 24, 1995 (deed
roll A.Prot. 1995/34), to the effect that, as to the cooperation
agreement, ProSieben was succeeded by Xxxxx and Xx. Xxxxxx (hereinafter
jointly referred to as the "Existing Cooperation Agreement").
Section 2 SALE AND ASSIGNMENT OF PARTNERSHIP INTERESTS AND SHARES
2.1 Sellers hereby sell to HSN GmbH with economic effect ("mit
wirtschaftlicher Wirkung") as of the Effective Date (as defined in
Section 6.1) and hereby assign with effect of the Closing Date (as
defined in Section 6.4) each a portion of their respective Partnership
Interests in the following amounts:
Quelle DM 950,000.00
Xxxxx XX 500,000.00
(hereinafter the "Acquired Partnership Interests").
5
5
The Acquired Partnership Interests in the aggregate amount of DM
1,450,000.00 equal a 29% partnership interest of HSN GmbH in HOT. The
transfer in rem ("dinglicher Ubergang") shall be subject to the
conditions precedent set forth in Section 6.4. and the registration of
HSN GmbH in the Commercial Register as successor in title to the
Acquired Partnership Interests ("Sonderrechtsnachfolge"). No additional
conditions precedent exist as to the acquisition of the Acquired
Partnership Interests. The passing of risk occurred as of the Effective
Date (defined in Section 6.1).
2.2 Sellers hereby sell with economic effect as of the Effective Date and
hereby assign as of the Closing Date by way of partitioning their
Shares in the General Partner the following fractions of shares,
including all rights and obligations pertaining thereto:
Quelle DM 9,500.00
Xxxxx XX 5,000.00
(hereinafter the "Acquired Shares").
Consent of General Partner to the above partitioning of Shares is
attached in copy hereto as Exhibit 2.2. The assignment of the Shares is
made subject to the compliance with the conditions precedent described
under Section 6.4. No additional conditions precedent exist as to the
assignment of the Acquired Shares. The passing of risk occurred as of
the Effective Date.
2.3 HSN GmbH purchases the above Acquired Partnership Interests and
Acquired Shares and hereby accepts their transfer and assignment
subject to terms and conditions of this Agreement.
2.4 Sellers shall not dispose of any of the above Partnership Interests
sold to HSN GmbH between the Effective Date and the registration in the
Commercial Register of HSN GmbH as successor in law without prior
written consent of HSN GmbH. Further, Sellers shall not exercise any
rights conferred with the Acquired Partnership Interests without prior
written approval of HSN GmbH. Sellers shall account for and shall be
severally liable for any breach of the foregoing undertakings.
2.5 Sellers and Xx. Xxxxxx each hereby waive any rights of first refusal,
preemptive rights or any rights of similar nature granted to them under
the existing H.O.T. partnership agreement (hereinafter "Existing
Partnership Agreement"), or the existing Articles of Association for
the General Partner (hereinafter "Existing Articles of Associations")
6
6
or the Existing Cooperation Agreement and consent hereby to the
transfer of the Acquired Partnership Interests and of the Acquired
Shares to HSN GmbH.
Section 3 PURCHASE PRICE
3.1 The Purchase Price to be paid by HSN GmbH for the Acquired Partnership
Interests and the Acquired Shares shall be
US$ 15,000,000.00
(in words: 15 million US-Dollars)
(hereinafter the "Purchase Price"). Permission of the Deutsche
Bundesbank pursuant to Section 3 Wahrungsgesetz is attached hereto as
Exhibit 3.1.
3.2 The Purchase Price for the Acquired Partnership Interests and
the Acquired Shares is payable as follows:
3.2.1 The first installment of US$ 5,000,000.00 was placed in escrow
under the escrow agreement dated November 20, 1996, with any
interest on such account payable to Sellers after HSN GmbH
has been reimbursed for all of its escrow-related costs. The
first installment shall be released upon the Closing Date (as
defined in Section 6.3).
3.2.2 The second installment of US$ 5,000,000.00 shall become due
and payable on April 1, 1997.
3.2.3. The third installment of US$ 5,000,000.00 shall become due and
payable on September 1, 1997.
3.3 Any monies payable under these provisions to Sellers shall be paid into
Quelle's account with Deutsche Bank AG, Nurnberg, account no.0000000,
sort code 760 700 12, swift code deutdemm 760. Quelle shall arrange
that the monies received in the above account shall be distributed to
the other Sellers in proportion to their Partnership Interests and
Shares sold hereunder. With payment into the above account, Sellers'
respective payment demands against the HSN GmbH are deemed to be
fulfilled.
7
7
Section 4 BALANCE SHEET ADJUSTMENT AS OF AUGUST 31, 1996
4.1 Sellers shall make a payment to H.O.T. equal to the net deficit ("nicht
durch Eigenkapital gedecker Fehlbetrag") as shown in the Management
Accounts as of August 31, 1996, attached hereto as Exhibit 4.1, which
have been prepared by H.O.T.'s management in accordance with generally
accepted German principles of accounting and preparation of balance
sheets in keeping the continuity and valuation principles compared to
H.O.T.'s former audited annual accounts (hereinafter "Management
Accounts"). Such payment shall be referred to as Balance Sheet
Adjustment Payment.
4.2 HSN GmbH will not have any responsibility for any liability, which for
purposes of this Clause shall include any liabilities within the
meaning of Section 266(3)(C) HGB, any accruals to be provided for in
connection with employee benefits (such as Christmas and holiday pay),
tax accruals, deferred payments ("erhaltene Anzahlungen") and accruals
for pending or conditional sales ("bedingte Umsatze") (hereinafter
jointly "Liabilities") of which H.O.T. or the Sellers were aware or
should have been aware of, except as reflected in the Management
Accounts. Sellers shall, in lieu of any other remedies, be jointly and
severally liable for putting H.O.T. in the same financial position that
it would have been in if the liabilities were properly disclosed in the
Management Accounts and had thereby increased the Balance Sheet
Adjustment Payment.
4.3 All payments of Sellers and Xx. Xxxxxx identified as partner
contributions ("Gesellschafterzuschusse") provided to H.O.T. since
September 1, 1996, shall be credited against any Balance Sheet
Adjustment Payment determined in accordance with the provisions above.
If and to the extent, the aggregate amount of these partner
contributions exceed the Balance Sheet Adjustment Payment (hereinafter
the "Excess Amount"), such Excess Amount shall be credited against
Sellers' obligation to compensate losses of H.O.T. as from September 1,
1996. In such case HSN GmbH shall make a contribution to H.O.T.
equalling 29/71 times the Excess Amount within ten (10) banking days
after the Closing Date.
Section 5 CHANGES TO THE CORPORATE STRUCTURE AND THE CORPORATE GOVERNANCE
5.1 Immediately after the Closing Date, the parties to this Agreement
8
8
5.1.1 will cause a general meeting of the partners of the H.O.T. to
be convened and that the Existing Partnership Agreement of the
Limited Partnership shall be amended in accordance with the
approved terms as set forth in Exhibit 5.1.1 hereto;
5.1.2 shall undertake jointly to arrange for filing of the certified
application to the Commercial Register regarding the change of
title in the Partnership Interests and the amendment of the
Partnership Agreement, and HSN GmbH shall take all action to
deliver such application to the Commercial Register received
pursuant to Section 6.4.2 to the competent court for
registration of the above changes.
5.2 Immediately after the Closing Date, the Parties shall cause a general
meeting of the shareholders of the General Partner to be convened and
that
5.2.1 the Existing Articles of Association shall be changed in
accordance with the approved terms set forth in Exhibit 5.2.1
hereto in notarial form before the notary public Xx. Xxxxxxx
Xxxx von Stosch, Munchen, Maximilianplatz, 10;
5.2.2 the existing rules of procedure for the managing directors
shall be changed in accordance with the approved terms as
set forth in Exhibit 5.2.2 hereto;
5.2.3 the existing rules of procedure for the advisory board shall
be changed in accordance with the approved terms as set forth
in Exhibit 5.2.3 hereto.
5.3 The Parties hereto hereby execute the Joint Venture Agreement as set
forth in Exhibit 5.3 hereto, which shall supersede and replace the
Existing Joint Venture Agreement as from the Closing Date (An English
translation of Exhibit 5.3 is also attached to this deed, but does not
form part of the deed and shall not be deemed to be notarized).
5.4 The Partnership Agreement, the Articles of Association, the Joint
Venture Agreement, rules of procedure for the managing directors and
the rules of procedure for the advisory board, as amended in each case
in accordance with the above provisions, shall ensure that all actions
set forth in Exhibit 5.4 shall require the approval of 90% or more of
the shareholders of the General Partner, the partners of the Limited
Partnership, or their authorized representatives appointed to the
advisory board (hereinafter "Veto Right Issues"). All of the Veto Right
Issues may be amended by the shareholders of the General Partner or the
limited partners of the Limited Partnership by a 90% supermajority.
9
9
Section 6 EFFECTIVE DATE, SIGNING DATE, CLOSING DATE
6.1 Effective Date shall be September 1, 1996, 0.00 hours (hereinafter
"Effective Date").
6.2 Signing Date shall mean the day on which this Agreement shall be
notarized (hereinafter "Signing Date").
6.3 Closing Date shall mean the day on which the conditions precedent
under Section 6.4 are complied with (hereinafter "Closing Date).
6.4 On the Closing Date all of the following conditions must be fulfilled:
6.4.1 premerger clearance of the Federal Cartel Office, Berlin, was
received in accordance with Section 24a GWB or any of the time
periods contained in Section 24a GWB have lapsed without the
issuance of an injunction prohibiting the transaction
contemplated hereunder;
6.4.2 delivery of the duly certified applications to the Commercial
Register pursuant to Section 5.1.2 by Sellers to HSN GmbH.
Section 7 REPRESENTATIONS AND WARRANTS of HSN GmbH AND HSN
7.1 HSN GmbH represents and warrants with regard to Section 7.1.1 and
Section 7.1.2 as of the Signing Date and HSN represents and warrants
with regard to Section 7.1.3 as of the Signing Date
7.1.1 Organization
HSN GmbH is a limited liability company in formation ("GmbH i.
Gr.") duly organized, validly existing and in good standing
under the laws of the Federal Republic of Germany and has the
necessary power and authority to conduct its business.
7.1.2 Corporate Power
HSN GmbH has the corporate power and authority to execute and
deliver this Agreement and to consumate the transactions
contemplated hereunder. The execution and delivery of this
Agreement by HSN GmbH and the
10
10
consummation by HSN GmbH of the transactions contemplated
hereunder, have been duly authorized by HSN GmbH's
shareholders and no other corporate proceeding on the part of
HSN GmbH is necessary to authorize this Agreement or the
consummation of the transactions contemplated hereunder.
7.1.3 No Competitive Restrictions
The execution and implementation of this Agreement does not
constitute a violation of any non-compete restrictions HSN is
subject to in relation to any third parties.
7.2 If and to the extent, that representations and warranties of HSN GmbH
or HSN, as the case may be, are untrue, misleading or broken, HSN GmbH
shall (i) put Sellers in a position as if such representations and
warranties were true by making the representations and warranties true
("Naturalrestitution") or, at Sellers option, shall (ii) pay damages
for nonfulfilment of the representations and warranties
("Schadensersatz in Geld").
Section 8. REPRESENTATIONS AND WARRANTIES OF SELLERS
8.1 Sellers represent and warrant as of the Effective Date, unless provided
otherwise, hereinafter:
8.1.1 Compliance with Articles
The execution of this Agreement and the performance of all
obligations undertaken hereunder have, as of the Signing Date,
been validly authorized by all necessary corporate action, and
the obligations undertaken by Sellers under this Agreement
constitute valid, legal and binding, obligations enforceable
against each of them in accordance with the terms of such
authorization.
8.1.2 Corporate Power
Each of Sellers, as of the Signing Date, is either a
corporation duly incorporated and validly existing in all
respects under the laws of the jurisdiction of their
respective incorporation or an individual with full power
11
11
and authority to own its assets and to carry on the H.O.T.
business as presently conducted.
8.1.3 No Breach of Third Party Obligations
Neither the execution and the delivery by Sellers of this
Agreement nor the performance or observance of any of their
obligations hereunder does or will, as of the Signing Date,
conflict with, or result in a breach or violation of any
judgement, order or decree, indenture, mortgage, trust deed,
agreement or other instrument, arrangement, obligation or duty
in each case by which either Seller is bound at the date
hereof or cause any limitation on any of either Sellers'
powers whatsoever, howsoever imposed, or on the right or
ability of the directors of either Seller to exercise such
powers, to be exceeded.
8.1.4 Existence of Partnership Interests and Shares
As of the Signing Date, all Partnership Interests and Shares
listed in Section 1 above exist in the amounts set out
therein, are fully paid up and have not been repaid; the
Partnership Interests and the Shares and all rights attaching
thereto are free and clear of any third-party rights and have
not been pledged, assigned, charged or used as a security
other than as listed in Exhibit 8.1.4; Sellers have all
right, authority and power to transfer the Partnership
Interests and Shares.
Sellers and Xx. Xxxxxx are as of the Signing Date the only
partners in H.O.T. and the only shareholders in the General
Partner, and there are no options or agreements outstanding
which call for the grant to any other person of any
partnership or other interest in H.O.T. or the General
Partner, as the case may be.
8.1.5 Bankruptcy
As of the Signing Date, no bankruptcy or judicial composition
proceedings concerning the assets of H.O.T. or the General
Partner or any of the Sellers exist pursuant to the Bankruptcy
or Reorganisation Code or the Avoidance Law
("Anfechtungsgesetz") and there are no grounds which could
justify the voidance of this Agreement and that the
participation of each Seller in
12
12
H.O.T. or the General Partner does not represent the whole or
a substantial part of the assets of any of the Sellers within
the meaning of Section 419 BGB.
8.1.6 Powers
As of the Signing Date, H.O.T. is a limited partnership duly
constituted and validly existing in all respects under the
laws of the Federal Republic of Germany with full power and
authority to own its assets and to carry on its business as
previously conducted.
As of the Signing Date, General Partner is a limited liability
company duly constituted and validly existing in all respects
under the laws of Germany with full power and authority to own
its assets and to carry on its business as previously
conducted.
8.1.7 AGREEMENTS
To the best knowledge of Sellers, all material agreements,
rights and duties binding on H.O.T. and/or enforceable against
H.O.T., in particular those specified hereunder, are made in
the ordinary course of business and have no material negative
effect on the financial condition or the H.O.T. Business, and
to the best knowledge of Sellers, those agreements and rights
remain unchanged and no circumstances exist, including the
transaction contemplated hereunder, which will impair or
endanger the unaltered continuation of these agreements. The
foregoing statements apply to all of the agreements of H.O.T.
including but not limited to the following agreements and
obligations:
8.1.7.1 employment agreements and pension and benefit plans
for Xxxxx, Xx. Xxxxxx, general managers, Prokurists
and senior employees ("leitende Angestellte") of
H.O.T. and/or General Partner;
8.1.7.2 other employment contracts and service agreements
providing for an annual remuneration of more than DM
100,000.00, bonus, commission entitlements or similar
pension and benefit plans or having a termination
period of more than one year;
13
13
8.1.7.3 any consultancy agreements providing for an annual
remuneration of an average more than DM 50,000.00, or
having a termination period of more than six months;
8.1.7.4 any material technical assistance, programming,
licence, and production agreements;
8.1.7.5 material agreements with customers or suppliers as
well as agreements with customers and suppliers
outside the ordinary course of business, in
particular any agreements granting deductions,
discounts, credits or prepayments;
8.1.7.6 material rental and lease agreements, other than
usual leasing agreements relating to office
equipment;
8.1.7.7 loan, credit, guarantee and security agreements,
letters of credit and surety undertakings of any
nature, and loans to employees in excess of two
months' salaries;
8.1.7.8 material sales representative, agency and
distribution agreements;
8.1.7.9 insurance policies taken out by H.O.T. or the General
Partner, other than insurances for company cars;
8.1.7.10 restrictive covenants or agreements limiting any of
H.O.T.'s or General Partner's rights to deal in
certain products or in certain territories, or any
other restrictive covenants or agreements limiting
H.O.T.'s or General Partner's business as carried out
prior to the Signing Date;
8.1.7.11 any material agreements with or other rights and
obligations to Sellers or any of their relatives
according to Section 15 AO or any entity in which any
or several of them has a financial interest of more
than 5%, a list of which is set out in Exhibit
8.1.7.11;
8.1.7.12 any other material agreements and/or commitments
involving a consideration or liability per
agreement or in total of more than DM 50,000.00 per
annum for H.O.T. or the General Partner or providing
for performance beyond June 30, 1997;
14
14
8.1.7.13 works council agreements and agreements with trade
unions, other than industry-wide regional or
supraregional collective bargaining agreements;
8.1.7.14 all rights of third parties regarding the acquisition
of rights to H.O.T. or the General Partner.
8.1.8 Performance of Agreements
H.O.T. and the General Partner have performed and complied,
to the best knowledge of Sellers, with all material
obligations under the agreements referred to in Section 8.1.7
above and have done everything which is necessary in order to
be in a position to meet obligations under these agreements
when they become due. To the best knowledge of Sellers, none
of the parties referred to in Section 8.1.7 above is entitled
to terminate or modify its obligations thereunder as a result
of the execution of this Agreement. To the best knowledge of
Sellers, H.O.T. and General Partner have fulfilled all
requirements of these agreements and no event has occurred
which, but for the passage of time, would constitute a default
of such agreements. Prices on all agreements, bids, orders and
quotes of H.O.T. or the General Partner which were fully
enforceable against H.O.T. or the General Partner or given by
H.O.T. or the General Partner to any affiliates of ProSieben
as of the Signing Date, are calculated above cost and are
negotiated at arm's length.
H.O.T has in effect a transponder lease agreement through
April 2005 for a monthly lease payment not exceeding DM
850,000.00 as from January 1, 1997 per month exclusive of
V.A.T. and that SES has approved and consented to the
sub-leasing of the transponder agreement to H.O.T. in due
form.
8.1.9 Intellectual Property Rights
To the best knowledge of Sellers, H.O.T. owns and/or retains
all intellectual property rights used in the present or
planned business activities of H.O.T. or the General Partner,
including the rights from notifications, and to the best
knowledge of Sellers
15
15
8.1.9.1 these rights are the unencumbered and unlimited
property of H.O.T. or the General Partner and no
rights of third parties to these intellectual
property rights or their use exist;
8.1.9.2 none of the intellectual property rights have been
charged, nor have been threatened to be charged
with infringement and there exists no basis on which
any of these rights are threatened with nullification
or invalidation;
8.1.9.3 neither these intellectual property rights nor their
use infringes upon the intellectual property rights
of third parties;
8.1.9.4 all payment of fees and other measures needed to
maintain the intellectual property rights have been
undertaken fully and in a timely manner; and
8.1.9.5 the business of H.O.T. or the General Partner does
not infringe any intellectual property right of a
third party.
8.1.10 Software
To the best knowledge of Sellers, the software developed, used
and applied by H.O.T. or the General Partner (hereinafter "the
Software"), the copyrights relating thereto and the rights
accruing thereunder are not charged, burdened or encumbered in
any way or any rights of any employees or sub-contractors
whether arising under the Employees Invention Act
("Arbeitnehmer-erfindungsgesetz") or on any other legal basis
attaching thereto. To the best knowledge of Sellers all source
codes relating to the developed Software are the unlimited
property of H.O.T. or the General Partner and have only been
supplied to third parties in the ordinary course of business.
All maintenance agreements relating to the Software have been
duly and completely performed.
8.1.11 Insurances
To the best knowledge of Sellers, H.O.T. or the General
Partner, as the case may be, maintain in full force and effect
for their own benefit, policies of insurance valid for a
period of at least up to December 31, 1996 against fire,
water, theft and any other usually insured business risks, in
particular with
16
16
regard to statutory liabilities and business interruption in
adequate amounts to provide reasonable protection for the
business and assets of H.O.T. or the General Partner. To the
extent, H.O.T. or the General Partner have benefitted or
benefit of umbrella insurance agreements taken out by Sellers,
ProSieben or any of their affiliates, H.O.T. or the General
Partner do not owe any outstanding premiums nor shall H.O.T.
or the General Partner be charged back for any such premiums
by Sellers or their respective affiliates, relating to periods
prior to the Closing Date.
8.1.12 Assets
To the best knowledge of Sellers, all assets of H.O.T. are in
a condition which is commensurate with the H.O.T. Business or
General Partner's business and in an adequate condition to
carry on the H.O.T. Business in substantially the same fashion
as carried out prior to the Closing Date. To the best
knowledge of Sellers, H.O.T. or the General Partner, as the
case may be, are in the lawful possession or are the
unrestricted owners, as the case may be, of all such assets
which are necessary to carry out the H.O.T. Business in the
same fashion as prior to the Closing Date. Except as disclosed
in Exhibit 8.1.12 each of the material assets of H.O.T. is the
absolute property of H.O.T. free from any mortgage, charge,
pledge, lien, encumbrance, license, lease, right of
pre-emption or any other third party interest and none of the
assets of the same subject to any hire, hire purchase,
conditional or credit sale or any other agreement for payment
on deferred terms.
8.1.13 Permits and Licenses
H.O.T. has obtained all material licenses, permissions and
consents necessary to carry on its business as presently
conducted and is not in breach of any of the same. The current
media law situation, as understood by the Sellers, is
described in Exhibit 8.1.13.
8.1.14 Litigation and Compliance
To the best knowledge of Sellers, there is no litigation or
administration or arbitration proceeding before any court,
judicial, administrative or governmental authority or
arbitrators or other body to which H.O.T. or the
17
17
General Partner is a party, nor to the best of their knowledge
is any of such event pending or threatened against them or
against any of their assets which might have a material
adverse effect on their ability to duly and punctually
perform and observe all of their obligations hereunder,
except as set forth in Exhibit 8.1.14.
8.1.15 Taxes and Accounts
To the best knowledge of Sellers, H.O.T. and General Partner
have duly complied with all material legal requirements
relating to taxation and H.O.T. and General Partner have in
particular
8.1.15.1 properly kept all material records and documents
required to be kept;
8.1.15.2 properly and punctually made all returns and provided
accurate information to the German tax authorities
and any other German body concerned as so required;
8.1.15.3 paid all taxation charged, assessed, levied or
payable in accordance with the relevant statute or
legislation as and when it became due;
8.1.15.4 deducted taxation from all payments where required so
to do by law and accounted to the appropriate fiscal
body for taxation so deducted;
8.1.15.5 not become liable and have not been liable to pay any
interest, penalty, fine or sum or similar nature in
respect of taxation;
8.1.15.6 not entered into any dispute with any fiscal
authority.
8.1.15.7 accrued sufficient amounts at the Effective Date in
the Management Accounts to address any material tax
liabilities.
8.1.16 Foreign Tax Returns
No taxes or tax returns have become due by H.O.T. or General
Partner outside of the Federal Republic of Germany, except for
the Republic of Austria.
18
18
8.1.17 Employee Benefits
To the best knowledge of Sellers, all obligations whether
arising by operation of law, by agreement or by past custom,
for payments and contributions with respect to direct or
indirect pension and retirement benefits or other compensation
or benefits such as anniversary payments to the employees of
H.O.T. or the General Partner and pension fund old age pension
liabilities for the period prior to the Effective Date have
been paid by H.O.T. and the General Partner or full provision
therefor has been made in the Management Accounts to cover
fully their current value.
8.1.18 Business Plan
The business plan exhibited hereto as Exhibit 8.1.18 shows a
substantially accurate view of the state of affairs and the
financial position of H.O.T. based on reasonable assumptions
and projections as of August 31, 1996.
8.1.19 Management Accounts
The Management Accounts as attached hereto in Exhibit 4.1 show
a substantially accurate view of the state of affairs and the
financial position of H.O.T. as at and for the financial
period ending on August 31, 1996, and the profits and losses
of H.O.T. for the period ended on such date. Substantial for
purposes of this Section shall mean any discrepancy at or
exceeding DM. 1,000,000.00 (Deutsche Xxxx one million) and for
purposes of this Section, the DM 1,000,000.00 basket shall not
constitute a deductible and therefore the whole amount will be
taken into account for determining the remedies in accordance
with Section 9 below, if and to the extent the discrepancy
exceeds DM 1,000,000.00 ("Freigrenze").
8.1.20 Absence of Material Changes
Since the Effective Date, H.O.T. and the General Partner have
carried on their businesses in the ordinary and usual course.
8.1.21 Accurate Disclosure
To the best knowledge of Sellers, there is no material effect
or material matter relevant to the H.O.T. Business, H.O.T.
assets, and H.O.T. or the
19
19
General Partner, as the case may be, which has not been
disclosed to HSN GmbH or which might render any information
contained in the documents attached to this Agreement
materially misleading or inaccurate.
8.2 Sellers shall account for all of the above representations and
warranties jointly and severally with exception of the representations
given under Sections 8.1.1 through 8.1.5.
8.3 If and to the extent any of the above representations and warranties
are made subject to the best knowledge, best knowledge shall mean
actual knowledge of Sellers or any actual knowledge they should have
obtained after due inquiry of the managing directors of General Partner
and Xx. Xxxxxxx Xxxxxxxxx, inhouse counsel to H.O.T. Sellers shall not
account for any knowledge they failed to obtain due to slight
negligence ("leichte Fahrlassigkeit").
Section 9 REMEDIES
9.1 In the event of any breach or non-fulfilment by either of the Sellers
of any of the warranties and representations contained in Section 8,
Sellers shall be liable, at the Seller's election, for putting HSN
GmbH, H.O.T. and/or the General Partner, into the same financial
position that it would have been in if the warranties and
representations contained in Section 8 had been correct or had not been
breached, or, at Sellers' election, HSN GmbH can claim damages for
non-performance ("Schadensersatz wegen Nichterfullung"). Any remedies
granted under Section 4 above, shall be without prejudice to those
remedies set forth hereunder, if and to the extent such remedies result
from the breach or non-fulfilment of any of the warranties and
representations contained in Section 8. To the extent any breach or
non-fulfilment of any of the warranties and representations contained
in Section 8 has been remedied by the way of the Balance Sheet
Adjustment Payment, Sellers shall not have to account for hereunder
("no double dip").
9.2 HSN GmbH is entitled to rescind the Agreement only if any of the
Acquired Partnership Interests or any of the Acquired Shares are
legally defective.
9.3 In case of rescission pursuant to Section 9.2 above, the revocation of
the Agreement ("Ruckabwicklung des Vertrages") is made in accordance
with the provisions of the German Civil Code on the condition that
Sellers have to reimburse HSN GmbH for all reasonable costs and
expenses incurred in conjunction with the preparation, the
20
20
negotiation and completion of this Agreement, including all legal, tax
and economic due diligence in connection with this Agreement. Section
352 BGB shall not apply.
9.4 In the event of any breach or non-fulfilment by Sellers of any of the
representations and warranties contained in Section 8 of this
Agreement, HSN GmbH will give to Sellers written notice of such breach
or non-fulfilment stating the nature thereof and the amount involved
to the extent that such amount has been determined at the time when
such notice was given. Section 377 HGB shall not apply.
9.5 Any other remedies of HSN GmbH, regardless of the underlying legal
basis therefor, including but not limited to, reduction of Purchase
Price, recission of contract, damages arising under culpa in
contrahendo or clausula rebus sic stantibus, are expressly excluded
hereby.
9.6 The maximum aggregate liability of each Seller in respect of all claims
arising hereunder shall not exceed the amount of the Purchase Price
plus the aggregate amount of the contributions made by HSN GmbH between
the Effective Date until the Closing Date plus any reasonable attorney
fees spent in connection with the transactions contemplated hereunder
up to an amount of DM 300,000.00, allocable to each Seller in
proportion to the amount of the Purchase Price received by each Seller.
9.7 No liability shall attach to Sellers where the aggregate amount of
claims is less than DM 100,000.00, such claims, however, not being
ignored for the purpose of calculating the liability of Seller under
this Agreement once the threshold is exceeded ("Freigrenze").
Section 10 STATUTE OF LIMITATION
10.1 All claims of HSN GmbH arising under this Agreement against Sellers are
time barred as from March 31, 1998. Exempted herefrom are all claims of
the HSN GmbH in respect of tax liabilities which shall expire six (6)
months after the date of the final, non appealable assessment of the
relevant liability of H.O.T. and/or the General Partner, in any event,
not prior to March 31, 1998.
10.2 As to the defect of title, the statutory provisions shall apply.
21
21
Section 11 ADDITIONAL UNDERTAKINGS
11.1 H.O.T. and ProSieben entered into a sublease agreement regarding
certain transponder services in the format as exhibited hereto in
Exhibit 11.1 (however, the transponder agreement referenced in Section
3 of the "Vereinbarung betreffend Transponderkapazitat will not be
attached as part of Exhibit 11.1).
11.2 HSN guarantees the payment of the Purchase Price owed in accordance
with Section 3.1 above. To the extent the Joint Venture Agreement, as
defined in Section 5.3 above, provides for non-compete undertakings of
the parties to the Joint Venture Agreement, HSN herewith acceedes to
the respective undertakings.
11.3 If the pre-merger clearance referred to under Section 6.4.1 above shall
not be withheld with final effect, this Agreement shall be rescinded in
accordance with the provisions of the German Civil Code. Section 352
BGB shall not apply.
Section 12 MISCELLANEOUS
12.1 Any notices or other communications in connection with this Agreement
need to be made in writing and shall be delivered or sent by registered
mail, fax or telecopy to the addresses below or to such other addresses
which may be specified by the Parties in the future in writing.
to HSN GmbH: Home Shopping Network GmbH
Xxxxxxxxxxx. 00-00
X-00000 Xxxxxxxxx xx Xxxx
to Seller 1: Quelle Xxxxxxxxxxx XX & Co.
Xxxxxxxxxx Xxx. 00-00
X-00000 Xxxxx
Attention: Xx. Xxxxxxx Xxxxxxx
00
00
with a copy to
Attorney-at-Law Xxxxxxx Xxxxxxxx
Xxxxxxxxxxx Holding-Stiftung & Co. KG
Xxxxxxxxxx Xxx. 00-00
X-00000 Xxxxx
to Seller 2: Xxxxxx Xxxxx
Xxxxx-Xxxx-Xxx.0
X-00000 Xxxxxxx
with a copy to
Attorney-at-Law Xx. Xxxxxxxx-X. Xxxxx
Rechtsanwalte Bosebeck Droste
Xxxxxxxxxxx. 0
X-00000 Xxxxxxx
to Xx. Xxxxxx: Xx. Xxxxx Xxxxxx
Xxxxxxxx-Xxxxx-Xxx. 00
X-00000 Xxxxxxx
with a copy to
Attorney-at-Law Xx. Xxxxxxxx-X. Xxxxx
Rechtsanwalte Bosebeck Droste
Xxxxxxxxxxx. 0
X-00000 Xxxxxxx
to HSN: Home Shopping Network Inc.
11831 00xx Xxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000, X.X.X.
Attention: Xxxxxxx XxXxxxxx
23
23
with a copy to
Attorney-at-Law Xx. Xxxx-Xxxx Xxxxxxxxxx
Doser Amereller Xxxxx
Xxxxxxxxxxx. 00-00
X-00000 Xxxxxxxxx xx Xxxx
12.2 The costs and expenses of this Agreement, including legal, financial
and advisory fees, shall be borne by the party commissioning the
respective cost. The costs incurred with regard to the notarisation of
this Agreement shall be borne by HSN GmbH. The costs incurred with the
premerger cartel clearance are borne by H.O.T.
12.3 All Exhibits to this Agreement constitute an integral part of this
Agreement.
12.4 This Agreement and the Exhibits referred to under Section 12.3 comprise
the Agreement between the Parties containing the subject matter of the
Agreement and replace all oral and written declarations of intention
made by the Parties in connection with the contractual negotiations.
Changes or/and amendments to this Agreement need to be made in writing
or by way of a notarial instrument, as the case may be.
12.5 The Agreement shall be governed by the laws of the Federal Republic of
Germany. As to the dispute resolution the Parties hereto will enter
into a separate arbitration agreement of even date.
12.6 In the event that one or more provisions of this Agreement shall be, or
shall be deemed to be invalid or unenforceable, or this Agreement is
incomplete, the validity and enforceability of the other provisions of
this Agreement shall not be affected hereby. In such cases the Parties
hereto agree hereby on such valid and enforceable provision or on
provisions completing the Agreement which are commensurate with the
commercial intent of this Agreement. The same applies if it turns out
that there are gaps in this Agreement.
(continued on next page)
24
IN WITNESS THEREOF this Notarial Deed including the Exhibits hereto (except the
English translation of Exhibit 5.3, which is not notarized) has been read aloud
to the persons appeared. The persons appeared then confirmed and approved this
Deed including the Exhibits hereto and signed this Deed. All this was done at
the day herebelow written in the presence of me, the Notary Public, who also
signed this Deed and affixed my official Seal.
Basel, this 16th (sixteenth) day of January 1997 (nineteen hundred and
ninety-seven)
/s/ Xxxx-Xxxx Xxxxxxxxxx
/s/ Xxxxxxx Xxxxxxxx
/s/ Xxxxxxx Xxxxx
Notary
[NOTARY SEAL]
