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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934*
Home Shopping Network, Inc.
______________________________________________________________________________
(Name of Issuer)
Common Stock, par value $.01 per share
______________________________________________________________________________
(Title of Class of Securities)
437351109
______________________________________________________________________________
(CUSIP Number)
Michael Drayer, Esq.
Silver King Communications, Inc.
12425 28th Street North
St. Petersburg, Florida 33716
(813) 573-0339
______________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 27, 1995
______________________________________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to re-
port the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [X]. (A
fee is not required only if the reporting person: (1) has a previous state-
ment on file reporting beneficial ownership of more than five percent of the
class of securities described in Item 1; and (2) has filed no amendment sub-
sequent thereto reporting beneficial ownership of less than five percent of
such class. See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page should be filled out for a reporting per-
son's initial filing on this form with respect to the subject class of securi-
ties, and for any subsequent amendment containing information which would al-
ter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 15 pages
CUSIP No. 437351109
___________________________________________________________________________
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of
Above Persons
Silver King Communications, Inc.
59-2712887
____________________________________________________________________________
(2) Check the Appropriate Box if a Member of a Group
(a) [ ]
(b) [ ]
_____________________________________________________________________________
(3) SEC Use Only
______________________________________________________________________________
(4) Source of Funds
OO
______________________________________________________________________________
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
[ ]
______________________________________________________________________________
(6) Citizenship or Place of Organization
Delaware
______________________________________________________________________________
Number of (7) Sole Voting Power 0 shares
Shares Bene- _______________________________________________________________
ficially (8) Shared Voting Power 37,566,702 shares
Owned by (See Item 5.)
Each Report- (9) Sole Dispositive Power 0 shares
ing Person _______________________________________________________________
With (10) Shared Dispositive Power 37,566,702 shares
(See Item 5.)
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
37,566,702 shares
(See Item 5.)
______________________________________________________________________________
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
[X]
Excludes shares of Common Stock and options to purchase Common Stock
owned by the executive officers and directors of Silver King.
______________________________________________________________________________
(13) Percent of Class Represented by Amount in Row (11)
41%
Because each share of Class B Stock generally is entitled to ten
votes per share while the Common Stock is entitled to one vote per
share, the Reporting Person may be deemed to beneficially own equity
securities of the Company representing approximately 80% of the
voting power of the Company.
______________________________________________________________________________
(14) Type of Reporting Person (See Instructions)
CO
Page 2 of 15 pages
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Statement of
SILVER KING COMMUNICATIONS, INC.
Pursuant to Section 13(d) of the
Securities Exchange Act of 1934
in respect of
HOME SHOPPING NETWORK, INC.
This Report on Schedule 13D (the "Schedule 13D") re-
lates to the common stock, par value $.01 per share, of Home
Shopping Network, Inc., a Delaware corporation (the "Company").
This Report is filed by Silver King Communications, Inc. (some-
times referred to herein as the "Reporting Person").
Item 1. Security and Issuer
The class of equity securities to which this state-
ment relates is the common stock, par value $.01 per share, of
the Company (the "Common Stock"), which has its principal ex-
ecutive offices at 2501 118th Avenue North, St. Petersburg,
Florida 33716.
Pursuant to Rule 13d-3 promulgated under the Securi-
ties Exchange Act of 1934 (the "Exchange Act"), this Report
also relates to the shares of Common Stock issuable upon con-
version of shares of Class B Common Stock, par value $.01 per
share, of the Company (the "Class B Common Stock"). Each share
of Common Stock is entitled to one vote per share. Pursuant to
the Company's Amended and Restated Certificate of Incorporation
(the "Company Charter"), each share of Class B Common Stock is
convertible into one share of Common Stock, is generally en-
titled to ten votes per share and, so long as there are fewer
than 22,800,000 shares of Class B Common Stock outstanding, the
holders of Class B Common Stock vote together as a single class
with the holders of Common Stock on all matters submitted to
Company stockholders, except that the holders of Common Stock
are entitled to elect 25% of the members of the Board of
Directors of the Company voting as a separate class.
Page 3 of 15 pages
Item 2. Identity and Background
This Report is being filed by Silver King Communica-
tions, Inc. ("Silver King") (Commission File No. 0-20570; IRS
Identification No. 59-2712887), a Delaware corporation whose
principal business and office address is 12425 28th Street
North, St. Petersburg, Florida 33716. Silver King is princi-
pally engaged in the ownership and operation of television sta-
tions, which stations at present primarily broadcast retail
sales programming produced by a subsidiary of the Company.
The name, business address and present principal oc-
cupation or employment and the name, address and principal
business of any corporation or other organization in which such
employment is conducted of (i) each of the executive officers
and directors of Silver King, (ii) each person controlling
Silver King and (iii) the executive officers and directors of
any corporation controlling Silver King are set forth in Sched-
ule 1 attached hereto and incorporated herein by reference.
During the last five years, neither Silver King nor,
to the best of its knowledge, any of the persons named on
Schedule 1 (the "Schedule 1 Persons") has (i) been convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or pro-
hibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such
laws. To the best knowledge of Silver King, each of its execu-
tive officers and directors is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration
The consideration to be paid by Silver King to the
Silver Company (as defined in Item 4 below) in the Exchange (as
defined in Item 4 below) is 4,855,436 shares of common stock,
par value $.01 per share, of Silver King (the "Silver King Com-
mon Stock"), for 17,566,702 shares of Common Stock, and
6,082,000 shares of Class B stock, par value $.01 per share, of
Silver King (the "Silver King Class B Stock"), for 20,000,000
shares of Class B Common Stock, all of which Company securities
(the "TCI HSN Shares") will be acquired by the Silver Company
immediately prior to the Exchange in the merger (the "Liberty/
Silver Merger") of Liberty HSN, Inc., an indirect wholly-owned
subsidiary of Tele-Communications, Inc. ("TCI"), with and into
the Silver Company. The shares to be issued by Silver King in
Page 4 of 15 pages
the Exchange are sometimes referred to herein as the "Silver
King Exchange Securities".
Item 4. Purpose of Transaction
Commencing in August 1995 and from time to time
thereafter, Barry Diller, the Chairman of the Board of Direc-
tors and Chief Executive Officer of Silver King and a director
of the Company, and representatives of TCI have discussed the
possible acquisition by Silver King of TCI's equity interest in
the Company, as well as the possible appointment of Mr. Diller
as the Chairman of the Board of Directors of the Company. On
November 27, 1995, the Company issued a press release in which
it announced that Mr. Diller were appointed its Chairman of the
Board. In connection therewith, Mr. Diller and certain members
of his proposed Company management team had been granted
options to purchase an aggregate of 16,000,000 shares of Common
Stock at an exercise price of $8.50 per share, which shares
would represent approximately 15% of the outstanding Common
Stock and Class B Common Stock (assuming the exercise of all
such options). In addition, at separate meetings of the Boards
of Directors of the Company and Silver King held on November
27, 1995, the Board of Directors of the Company (as described
below) and the Board of Directors of Silver King approved the
acquisition by Silver King of the TCI HSN Shares in a two step
transaction. In the first step, the Silver Company (the entity
controlled by Barry Diller in which Liberty Media Corp., a
wholly owned subsidiary of TCI ("Liberty") owns a substantial
equity stake, pursuant to a Stockholders Agreement, dated as of
August 24, 1995, as amended by an amendment thereto (the "First
Amendment"), dated as of November 27, 1995, by and between Mr.
Diller and Liberty (as amended, the "Stockholders Agreement"))
would acquire TCI's interest in the Company pursuant to an
Agreement and Plan of Merger, dated as of November 27, 1995, by
and among the Silver Company, Liberty Program Investments, Inc.
and Liberty HSN, Inc. (the "Liberty HSN Merger Agreement"). In
the second step, the TCI HSN Shares acquired by the Silver
Company in the Liberty/Silver Merger would immediately
thereafter be exchanged for the Silver King Exchange Securities
(the "Exchange") pursuant to an Exchange Agreement, dated as of
November 27, 1995, by and between Silver King and the Silver
Company (the "Exchange Agreement"). Each of the Stockholders
Agreement, the First Amendment, the Liberty HSN Merger
Agreement, the Exchange Agreement and the Company press release
is filed as an Exhibit hereto and is incorporated herein by
reference.
In connection with the acquisition of the TCI HSN
Shares, Silver King and Liberty requested the Board of Direc-
tors of the Company to consider the proposed transaction and to
approve the acquisition of beneficial ownership of the TCI HSN
Page 5 of 15 pages
Shares by Silver King, the Silver Company, Mr. Diller and Lib-
erty for purposes of Section 203 of the Delaware General Corpo-
ration Law. Prior to there being any agreement, arrangement or
understanding relating to the acquisition of the TCI HSN
Shares, Silver King was advised by the Company that the Company
Board of Directors, upon the recommendation of a special com-
mittee of the independent directors, had approved such transac-
tion for purposes of Section 203.
All of the Silver King Exchange Securities will be-
come subject to the terms of the Stockholders Agreement. The
Stockholders Agreement provides Mr. Diller with effective con-
trol over the voting of all equity securities of Silver King
owned by Liberty, Mr. Diller and certain of their respective
affiliates, subject to certain restrictions. For a description
of the terms of the Stockholders Agreement as well as the pro-
visions relating to voting authority over Silver King securi-
ties, see the Schedule 13D, dated August 28, 1995, filed with
the Securities and Exchange Commission (the "SEC") by TCI and
Barry Diller, in respect of Silver King (as amended, the "TCI/
Diller Schedule 13D") and the amendment thereto, dated November
30, 1995 and filed with the SEC, which Schedule 13D and amend-
ment are filed as Exhibits hereto and incorporated herein by
reference.
Following the Liberty/Silver Merger and the Exchange
and assuming the consummation of certain transactions pursuant
to the Stockholders Agreement but without giving effect to (i)
a pending merger transaction involving Silver King and Savoy
Pictures Entertainment, Inc. (in which approximately 6,000,000
shares of Silver King Common Stock would be issued) or (ii) the
exercise of options to acquire Silver King Common Stock that
were granted to Mr. Diller, none of which options is currently
exercisable or exercisable within 60 days, it is currently
expected that Liberty, Mr. Diller and their respective
affiliates (including the Silver Company) will collectively
beneficially own 5,359,054 shares of Silver King Common Stock
and 8,082,000 shares of Silver King Class B Stock, which shares
constitute approximately 66% of the outstanding equity
securities of Silver King. Such Silver King securities would,
primarily by virtue of the fact that the shares of Silver King
Class B Stock are entitled to ten votes per share while the
Silver King Common Stock is entitled to one vote per share,
represent approximately 89% of the voting power of the
outstanding equity securities of Silver King.
By virtue of its acquisition of the TCI HSN Shares,
Silver King would beneficially own shares of Common Stock and
Class B Common Stock representing approximately 41% of the
outstanding equity securities of the Company, which shares
Page 6 of 15 pages
would represent approximately 80% of the voting power of the
outstanding equity securities of the Company. Because there
are currently fewer than 22,800,000 shares of Class B Common
Stock outstanding, pursuant to the Company Charter, the holders
of the Class B Common Stock generally will vote together as a
class with the holders of the Common Stock with respect to all
matters presented to the stockholders of the Company. As a
result, Silver King would have the power to elect a majority of
the members of the Board of Directors of the Company and to
determine the outcome of the vote with respect to substantially
all matters presented to a vote of the stockholders of the Com-
pany or by which such stockholders act by written consent. So
long as Mr. Diller is entitled to vote the shares of Silver
King stock held by the Silver Company, under the terms of the
Stockholders Agreement Mr. Diller will have indirect voting
control of the Company by virtue of his voting control of
Silver King (based upon the anticipated equity capital struc-
ture of each of Silver King and the Company upon the consumma-
tion of the foregoing transactions and certain other transac-
tions pursuant to the Stockholders Agreement).
Pursuant to the Stockholders Agreement, Mr. Diller
has agreed that, if so requested by Liberty, following the
Liberty/Silver Merger and the Exchange, he will use his reason-
able best efforts to cause one designee of Liberty to serve or
continue to serve on the Board of Directors of the Company.
The consummation of the Liberty/Silver Merger and the
Exchange is subject to the satisfaction of a number of condi-
tions, including, but not limited to, approval of the stock-
holders of Silver King to authorize the shares of Silver King
Common Stock and Silver King Class B Stock required to consum-
mate the Exchange and to approve certain other amendments to
its Amended and Restated Certificate of Incorporation, and the
receipt of certain regulatory consents and approvals.
Subsequent to execution of the documents summarized
herein, the Company announced that Mr. James G. Held was
appointed by the Board of Directors of the Company as the Chief
Executive Officer and President of the Company. Pursuant to
the terms of Mr. Held's employment agreement with the Company,
it is contemplated that Mr. Held will be elected a director of
the Company.
In reaching any conclusion as to its future course of
action in connection with the Company, the Reporting Person
will take into consideration various factors, such as other
business opportunities available to the Reporting Person, de-
velopments with respect to the business of the Company and of
the Reporting Person, and general economic and stock market
Page 7 of 15 pages
conditions, including, but not limited to, the market price of
the Common Stock.
Other than as described herein, neither Silver King
nor, to the best of Silver King's knowledge, any of its execu-
tive officers, directors or controlling persons, has any pre-
sent plans or proposals which relate to or would result in:
(a) the acquisition by any person of securities of the Company,
or the disposition of securities of the Company; (b) an ex-
traordinary corporate transaction, such as a merger, reorgani-
zation or liquidation, involving the Company or any of its sub-
sidiaries; (c) a sale or transfer of a material amount of as-
sets of the Company or of any of its subsidiaries; (d) any
change in the present Board of Directors or management of the
Company, including any plans or proposals to change the number
or terms of directors or to fill any existing vacancies on the
Board of Directors of the Company; (e) any material change in
the present capitalization or dividend policy of the Company;
(f) any other material change in the Company's business or cor-
porate structure; (g) changes in the Company Charter, the Com-
pany's by-laws or instruments corresponding thereto or other
actions which may impede the acquisition of control of the Com-
pany by any person; (h) causing a class of securities of the
Company to be delisted from a national securities exchange or
to cease to be authorized to be quoted in any inter-dealer quo-
tation system of a registered national securities association;
(i) a class of equity securities of the Company becoming eli-
gible for termination of registration pursuant to Section
12(g)(4) of the Exchange Act; or (j) any action similar to any
of those enumerated above.
Notwithstanding anything contained herein, the Re-
porting Person reserves the right, depending on other relevant
factors, to change its intention with respect to any and all of
the matters referred to in the preceding paragraph.
The foregoing summary descriptions are qualified in
their entirety by reference to the Exhibits attached hereto,
including the agreements referred to above and the press re-
leases, dated November 27, 1995, issued by each of the Company
and Silver King, which Exhibits are hereby incorporated by ref-
erence herein.
Item 5. Interest in Securities of the Issuer
(a)-(b) Upon consummation of the Liberty/Silver
Merger and the Exchange, Silver King will own 17,566,702 shares
of Common Stock and 20,000,000 shares of Class B Common Stock,
which shares represent approximately 41% of the outstanding
Page 8 of 15 pages
Common Stock and Class B Common Stock and approximately 80% of
the outstanding voting power of the Company stock, based upon
information contained in the Company's report on Form 10-Q,
dated November 6, 1995 and filed with the SEC.
As a result of the Liberty HSN Merger Agreement and
the Exchange Agreement, Silver King and the Silver Company may
be deemed to share beneficial ownership of the TCI HSN Shares
with Liberty. Upon consummation of the Exchange, Silver King
will have the sole power to vote or to direct the voting of and
sole power to dispose of or direct the disposition of all
shares of which it has beneficial ownership.
The amounts set forth above do not include any Com-
pany securities owned by any of the Schedule 1 Persons or that
may be owned by such persons upon the exercise of outstanding
options to purchase Common Stock. To the knowledge of Silver
King, the number of shares of Common Stock beneficially owned
by any of the Schedule 1 Persons (beneficial ownership of which
is expressly disclaimed by Silver King) is set forth below:
No. of Shares of
Common Stock
Individual Beneficially Owned
Barry Diller 130,000 (includes options to
purchase 30,000 shares of
Common Stock; excludes op-
tions to purchase 13,460,000
shares of Common Stock, none
of which is currently exer-
cisable or becomes exer-
cisable in the next 60 days)
Lia Afriat-Hernandez 1810 (includes options to
purchase 1800 shares of Com-
mon Stock)
James M. Lawless 2,000
RMS Limited Partnership 100
(c) On November 21, 1995, James M. Lawless purchased
2,000 shares of Common Stock at a purchase price of $7.875 per
share, which purchase was effected on the New York Stock Ex-
change (the "NYSE") through an open-market transaction. On
October 4, 1995, RMS Limited Partnership sold 900 shares of
Common Stock at a sale price of $8.50 per share, which sale was
effected on the NYSE through an open-market transaction.
Page 9 of 15 pages
Except as otherwise reported herein, neither the Reporting Per-
son nor, to its knowledge, any Schedule 1 Person has executed
transactions in Company securities during the past 60 days.
(d) There is no person that has the right to receive
or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the Company securities beneficially
owned by the Reporting Person.
The foregoing summary descriptions in this Item 5 of
certain documents are qualified in their entirety by reference
to such documents, which are filed as Exhibits hereto and are
incorporated herein by reference.
Item 6. Contracts, Arrangements, Understandings or Relation-
ship with Respect to the Securities of the Issuer
The information set forth in Item 4 above is hereby
incorporated herein by reference.
Pursuant to the First Amendment, Liberty and
Mr. Diller have agreed, among other things, to take all actions
reasonably necessary, including actions to be taken by Silver
King's stockholders, to approve and consummate the transactions
contemplated by the Liberty HSN Merger Agreement and the
Exchange Agreement.
Pursuant to the Liberty HSN Merger Agreement, Liberty
HSN will be merged with and into the Silver Company. In the
Liberty/Silver Merger, the Silver Company will acquire the TCI
HSN Shares, and the outstanding shares of common stock of
Liberty HSN will be exchanged for additional shares of Silver
Company non-voting common stock. Consummation of the merger is
conditioned upon satisfaction of regulatory requirements, as
well as other conditions set forth in the Liberty HSN Merger
Agreement. In the Liberty HSN Merger Agreement, the Silver
Company has agreed not to amend or otherwise alter or waive any
of its rights or obligations under the Exchange Agreement in
any material respect, without the prior written consent of
Liberty HSN's parent.
Pursuant to the Exchange Agreement, the Silver Com-
pany will exchange the TCI HSN Shares received in the Liberty/
Silver Merger for 4,855,436 shares of Silver King Common Stock
and 6,082,000 shares of Silver King Class B Stock. Consumma-
tion of the Exchange is conditioned upon Silver King stock-
holder approval of matters related to the Exchange (including
approval of amendments to the Amended and Restated Certificate
of Incorporation of Silver King to authorize the Silver King
Page 10 of 15 pages
stock required to consummate the Exchange) and satisfaction of
regulatory requirements, as well as other conditions set forth
in the Exchange Agreement. The Silver Company has agreed not
to amend or otherwise alter or waive any of its rights or obli-
gations under the Liberty HSN Merger Agreement in any material
respect, without the prior written consent of Silver King.
The foregoing summary descriptions of each of the
First Amendment, the Liberty HSN Merger Agreement and the
Exchange Agreement are qualified in their entirety by reference
to such agreements, which are filed as Exhibits hereto and,
together with the other Exhibits hereto, are incorporated here-
in by reference.
Item 7. Material to be Filed as Exhibits
1. Definitive Term Sheet regarding Stockholders Agree-
ment, dated as of August 24, 1995, by and between
Liberty Media Corporation and Mr. Diller.
2. Letter Agreement, dated November 13, 1995, by and
between Liberty Media Corporation and Mr. Diller.
3. Letter Agreement, dated November 16, 1995, by and
between Liberty Media Corporation and Mr. Diller.
4. First Amendment to Stockholders Agreement, dated as
of November 27, 1995, by and between Liberty Media
Corporation and Mr. Diller.
5. Agreement and Plan of Merger, dated as of November
27, 1995, by and among Silver Management Company,
Liberty Program Investments, Inc. and Liberty HSN,
Inc.
6. Exchange Agreement, dated as of November 27, 1995, by
and between Silver Management Company and Silver King
Communications, Inc.
7. Press Release, dated November 27, 1995, issued by
Home Shopping Network, Inc.
8. Press Release, dated November 27, 1995, issued by
Silver King Communications, Inc.
9. Report on Schedule 13D, dated August 28, 1995, filed
by Tele-Communications, Inc. and Barry Diller, with
respect to Silver King Communications, Inc. (the
"TCI/Diller Schedule 13D").
Page 11 of 15 pages
10. Amendment to TCI/Diller Schedule 13D, dated November
30, 1995.
Page 12 of 15 pages
SIGNATURE
After reasonable inquiry and to the best of his knowledge
and belief, the undersigned certifies that the information in
this statement is true, complete and correct.
Dated: December 8, 1995
SILVER KING COMMUNICATIONS, INC.
By: /s/Steven H. Grant
Name: Steven H. Grant
Title: Executive Vice President
Page 13 of 15 pages
SCHEDULE 1
Directors, Executive Officers and Controlling Persons of
Silver King Communications, Inc. ("Silver King")
Principal Business or
Principal Occupation Organization in which such
Name and Business Address Employment is Conducted
Barry Diller Chairman of the Board Ownership and operation of
and Chief Executive television stations
Officer and Director
of Silver King
12425 28th Street North
St. Petersburg, FL 33716
James M. Lawless President and Director Ownership and operation of
of Silver King television stations
12425 28th Street North
St. Petersburg, FL 33716
Steven H. Grant Vice Chairman of the Board Ownership and operation of
and Executive Vice television stations
President, Chief Financial/
Administrative Officer and
Treasurer and Director of
Silver King
12425 28th Street North
St. Petersburg, FL 33716
Vincent F. Barresi President and Chief Ownership and operation of
Operating Officer, WNAB-TV television station
Channel 58 Nashville, Inc.
3201 Dickerson Pike
Nashville, TN 37207
Michael A. Green Management Consultant, Business consulting
A.T. Kearney Management
Consulting
10877 Wilshire Boulevard
Los Angeles, CA 90024
Kenneth T. MacDonald Retired
P.O. Box 51
Paoli, PA 19301
Page 14 of 15 pages
Russell I. Pillar President and Chief Telephone communications
Executive Officer, software and technology
Precision Systems, Inc.
11800 30th Court North
St. Petersburg, FL 33716
Michael Drayer Executive Vice President, Ownership and operation of
General Counsel and television stations
Corporate Secretary of
Silver King
12425 28th Street North
St. Petersburg, FL 33716
Lia Afriat-Hernandez Executive Vice President -- Ownership and operation of
Compliance/Programming television stations
of Silver King
12425 28th Street North
St. Petersburg, FL 33716
Joseph J. Centorino Senior Vice President -- Ownership and operation of
Engineering of Silver King television stations
12425 28th Street North
St. Petersburg, FL 33716
Joan E. Halfaker Vice President, Controller Ownership and operation of
and Assistant Secretary/ television stations
Treasurer of Silver King
12425 28th Street North
St. Petersburg, FL 33716
RMS Limited c/o C. Thomas Burton Real estate development
Partnership 50 West Liberty Street and investments
Suite 650
Reno, NV 89501
Roy M. Speer 23 Spanish Main Investor
P.O. Box F41414
Freeport, Grand Bahamas
Page 15 of 15 pages
EXHIBIT INDEX
Seq. Pg. No.
1. Definitive Term Sheet regarding Stock-
holders Agreement, dated as of August 24,
1995, by and between Liberty
Media Corporation and Mr. Diller.
2. Letter Agreement, dated November 13,
1995, by and between Liberty Media
Corporation and Mr. Diller.
3. Letter Agreement, dated November 16,
1995, by and between Liberty Media
Corporation and Mr. Diller.
4. First Amendment to Stockholders Agree-
ment, dated as of November 27, 1995, by
and between Liberty Media Corporation
and Mr. Diller.
5. Agreement and Plan of Merger, dated as of
November 27, 1995, by and among Silver
Management Company, Liberty Program
Investments, Inc. and Liberty HSN, Inc.
6. Exchange Agreement, dated as of Novem-
ber 27, 1995, by and between Silver
Management Company and Silver King
Communications, Inc.
7. Press Release, dated November 27, 1995,
issued by Home Shopping Network, Inc.
8. Press Release, dated November 27, 1995,
issued by Silver King Communications,
Inc.
9. Report on Schedule 13D, dated August 28,
1995, filed by Tele-Communications, Inc.
and Barry Diller, with respect to Silver
King Communications, Inc. (the "TCI/
Diller Schedule 13D").
10. Amendment to TCI/Diller Schedule 13D,
dated November 30, 1995.
EXHIBIT 1
LIBERTY MEDIA CORPORATION
8101 East Prentice Avenue, Suite 500
Englewood, Colorado 80111
August 24, 1995
Mr. Barry Diller
1940 Coldwater Canyon
Beverly Hills, California 90120
Dear Sir:
Reference is made to the Term Sheet attached hereto
pursuant to which, subject to the prior receipt of any required
approvals of the Board of Directors of Silver King
Communications, Inc. ("Silver") under Section 203 of the
Delaware General Corporation Law, we have entered into certain
agreements with respect to the equity securities of Silver, all
as more fully described in the Term Sheet.
The Term Sheet contemplates that the agreements
contained therein will be superseded by definitive agreements
and instruments which will contain provisions incorporating and
expanding upon the agreements set forth therein, together with
other provisions customary in the case of transactions of this
type, and such other provisions as are reasonable and
appropriate in the context of the transactions contemplated
hereby. Notwithstanding the foregoing, the parties expressly
acknowledge that the Term Sheet and this agreement, subject to
the prior receipt of any such required approvals of the Board
of Directors of Silver, will constitute a binding agreement
between them, subject to the terms and preconditions set forth
herein and in the Term Sheet, until such definitive agreements
are executed and delivered. If such definitive agreements are
not executed and delivered, then, subject to the receipt of any
such required approvals of the Board of Directors of Silver,
the Term Sheet and this agreement shall constitute such
definitive agreements.
Mr. Barry Diller August 24, 1995
If the foregoing is acceptable to you, please execute
the copy of this agreement in the space below, at which time
this instrument will constitute a binding agreement between us.
Very truly yours,
LIBERTY MEDIA CORPORATION
By: /s/ Peter R. Barton
Name: Peter R. Barton
Title: President
ACCEPTED AND AGREED
this 24th day of August, 1995
/s/ Barry Diller
Barry Diller
PROJECT NET TERM SHEET
Subject to the prior receipt of any required
approvals of the Board of Directors of Silver King
Communications, Inc., a Delaware corporation ("Silver"), for
purposes of Section 203 of the Delaware General Corporation Law
("Section 203"), the following constitute the proposed terms
upon which Liberty Media Corporation, a Delaware corporation
("Rockies"), and Barry Diller ("Lasorda") and/or a corporation,
partnership or trust at least 90% owned and controlled by
Lasorda ("Dodgers") will enter into certain agreements with
respect to the equity securities of Silver. It is contemplated
that, if the required Section 203 approvals are obtained from
the Board of Directors of Silver, definitive agreements will be
entered into containing the detailed terms of the matters set
forth herein.
Transaction At a meeting of the Silver Board of
Overview: Directors, Rockies will present to the
Board a proposal whereby:
(x) Dodgers and/or Lasorda will purchase
the Initial Shares and the Additional
Shares from Silver and will be granted
the Options by Silver (each, as
defined in the Silver Term Sheet);
(y) Lasorda will agree to become initially
the Chairman of the Board and Chief
Executive Officer of Silver and to
become a member of the Silver Board of
Directors; and
(z) Subject to the approval of the Silver
Board of Directors, Rockies, Dodgers
and Lasorda will enter into the Silver
Stockholders Agreement.
As soon as practicable following receipt of
all required approvals by the Silver Board
of the arrangements contemplated by clauses
(x) and (y) above (and the execution and
delivery of the Silver Term Sheet by the
applicable parties thereto), Rockies and
Dodgers will enter into the Silver
Stockholders Agreement described below.
I. Silver Company Arrangements.
Formation of Promptly following the date of this Term
Silver Company: Sheet, Rockies and Dodgers will form an
entity ("Silver Company"), with Rockies
holding a convertible non-voting
participating preferred equity interest and
Dodgers holding a common equity interest
initially constituting all of the voting
equity interest in the Silver Company.
The capital contributions to the Silver
Company will be as follows:
1. Rockies will contribute the Silver
Option (as defined below) and an amount in
cash equal to the aggregate exercise price
of the Silver Option.
2. Dodgers will contribute [$100] in
cash.
Rockies and Dodgers will use all reasonable
efforts to seek and obtain FCC approval for
the exercise of the Silver Option by the
Silver Company and the transactions
contemplated hereby.
Following the occurrence of a Change in Law
(as defined below), (i) Rockies; equity
interest in the Silver Company will convert
into voting common equity interest having
the same pro rata rights, powers and
preferences as Dodgers; equity interest in
the Silver Company and (ii) Rockies or its
designee shall be required to purchase (and
Dogers will be required to sell) Dodgers'
entire equity interest in the Silver
Company for an amount equal to the cash
amount invested in the Silver Company by
Dodgers plus interest on such amount at the
Agreed Rate from the date of such
contribution to the date of such purchase,
compounded annually (the "Dodgers Interest
Purchase Price"). The "Agreed Rate" shall
equal the rate of interest per annum in
effect from time to time and publicly
announced by the Bank of New York as its
prime rate of interest.
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Other than as set forth above, there will
be no additional contributions to the
Silver Company without the consent of each
holder of a voting or non-voting equity
interest in the Silver Company. At all
times, the percentage equity economic
interest in the Silver Company of each of
Rockies and Dodgers will be in proportion
to the fair market value of the relative
contributions that have been made by such
Stockholder to the Silver Company (with the
fair market value of the Silver Option
determined by reference to the "spread"
between the market price per share of the
Silver Common Stock and the applicable
exercise price per share of such option).
The capitalization of the Silver Company
will be structured in a manner reasonably
acceptable to the parties in light of
relevant tax, regulatory and capital
commitment considerations.
Management: The business and affairs of the Silver
Company will be managed by a Board of
Directors elected by the holders of a
majority of the voting equity interests in
the Silver Company. Notwithstanding the
foregoing, the taking of any action by the
Silver Company with respect to (i) to the
extent permitted by applicable law, any
Fundamental Matter (as defined below) (as
applied to the Silver Company, mutatis
mutandis) or (ii) any acquisition or
disposition (including pledges) of the
Silver Option or any other Silver
Securities held by the Silver Company, in
either case, will require the unanimous
approval of each holder of a voting or non-
voting equity interest in the Silver
Company.
Transfers of Except as otherwise specifically provided
Interests: in this Term Sheet, no transfers or other
dispositions (including pledges), directly
or indirectly, of any interest in the
Silver Company will be permitted without
the consent of each Stockholder, provided,
that Rockies shall be entitled to transfer
all or part of its interest in the Silver
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Company to members of the Rockies
Stockholder Group.
At such time as (i) Lasorda is no longer
the Chairman of the Board and/or Chief
Executive Officer and/or President of
Silver or (ii) the Dodgers Stockholder
Group ceases to own its Eligible
Stockholder Amount (as defined below) of
Silver Securities, Dodgers shall be
required to sell its entire interest in the
Silver Company to Rockies (or Rockies'
designee) at a price equal to the Dodgers
Interest Purchase Price.
II. Silver Stockholders Agreement.
Scope: Simultaneously with the formation of the
Silver Company, Rockies and Lasorda will
enter into the Silver Stockholders
Agreement, which will govern, among other
matters, (i) all equity securities of
Silver, including any securities
exercisable or exchangeable for or
convertible into equity securities of
Silver (collectively, the "Silver
Securities") held by Rockies or Lasorda
(each, a "Stockholder") and their
respective controlled affiliates (such
Stockholder, together with, in the case of
Rockies, the controlled affiliates of
Rockies and Rockies; publicly held parent
corporation ("Rockies Parent"), and, in the
case of Lasorda, his 90% owned and
controlled affiliates, is referred to as a
"Stockholder Group"), (ii) the formation
and capitalization of the Silver Company,
(iii) the exchange of certain shares of
Silver Common Stock owned by Dodgers for
shares of Silver Class B Stock owned by
Rockies or the Silver Company and (iv) the
right of Lasorda to vote the Silver
Securities held by the Rockies Stockholder
Group pursuant to the conditional proxy
described below under the caption "Dodgers
Management Rights," subject to the
limitations described herein. Each
Stockholder Group will agree that it will
not enter into any other agreement with
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respect to its Silver Securities other than
as contemplated hereby. Notwithstanding
the foregoing, prior to the time that
Rockies acquires Dodgers' interest in the
Silver Company in the manner described in
this Term Sheet, the Silver Company shall
not be deemed to be a member of either the
Rockies Stockholder Group or the Dodgers
Stockholder Group and, except as
specifically set forth in this Term Sheet,
any Silver Securities held by the Silver
Company (including the option currently
held by Rockies to acquire shares of Silver
Class B Stock (the "Silver Option") and the
shares of Silver Class B Stock subject to
the Silver Option) shall not be deemed to
be held by either the Rockies Stockholder
Group or the Dodgers Stockholder Group.
Dodgers Lasorda shall be entitled to exercise
Management voting authority and authority to act by
Rights: written consent over all Silver Securities
owned by each member of the Rockies
Stockholder Group, on all matters submitted
to a vote of Silver stockholders or by
which Silver stockholders may act by
written consent pursuant to a conditional
proxy (which proxy shall be valid for the
full term that this Term Sheet and the
Silver Stockholders Agreement that replaces
this Term Sheet are effective and is
irrevocable and coupled with an interest
for purposes of Section 212 of the Delaware
General Corporation Law); provided, that
each Stockholder agrees, and agrees to
cause each member of its Stockholder Group,
to take or cause to be taken all reasonable
actions required (including to vote or
execute a written consent with respect to
the Silver Securities held by the Silver
Company) (i) prior to a Change in Law (as
defined below), to the extent permitted by
law, to prevent the taking of any action by
Silver with respect to a Fundamental Matter
without the consent of both Stockholders
and (ii) following a Change in Law, (A) for
the election of a slate of directors of
Silver, two of whom will be designated by
Rockies and the remainder of whom will be
designated by Dodgers and (B) to prevent
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the taking of any action by Silver with
respect to a Fundamental Matter without the
consent of both Stockholders.
Following a Change in Law, subject to
applicable law and fiduciary duties and
except with respect to (x) any Fundamental
Matters, (y) any decision to terminate
Lasorda's employment with Silver for Cause
and (z) any decision relating to Lasorda's
compensation by Silver (except as provided
for by the Silver Term Sheet), Rockies
shall be required to use its reasonable
best efforts to cause its designees on the
Silver Board of Directors to vote with
respect to any matter presented to a vote
of the Silver Board of Directors in the
manner instructed by Lasorda.
For purposes of this Term Sheet and the
Silver Stockholders Agreement, a "Change in
Law" shall be deemed to have occurred at
such time as Rockies is entitled to
exercise full ownership and control over
its Silver Securities (including the pro
rata portion of the Silver Securities held
by the Silver Company represented by
Rockies equity interest in the Silver
Company) notwithstanding Silver's ownership
of its broadcast licenses.
Fundamental 1. Any transaction not in the
Matters: business, launching new or additional
channels or engaging in any new field of
business, in any case, which will result
in, or will have a reasonable likelihood of
resulting in, Rockies or any member of its
Stockholder Group being required under law
to divest itself of all or any part of its
Silver Securities, or interests therein
(including its interest in the Silver
Company), or any other material assets of
such entity, or which will render such
entity's continued ownership of such stock
or assets illegal or subject to the
imposition of a fine or penalty or which
will impose material additional
restrictions or limitations on such
entity's full rights of ownership
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(including, without limitation, voting)
thereof or therein.
2. The acquisition, disposition
(including pledges), grant or issuance,
directly or indirectly, by Silver or any of
its subsidiaries, of any assets (including
debt and/or equity securities) or business
(by merger, consolidation or otherwise), or
the incurrence of any indebtedness, in any
such case (in one transaction or a series
of related transactions), with a value of
10% or more of the market value of Silver's
outstanding equity securities at the time
of such transaction.
3. Any material amendments to the
Certificate of Incorporation or Bylaws of
Silver.
4. Engaging in any line of business
other than media, communications and
entertainment products, services and
programming.
5. The settlement of any litigation,
arbitration or other proceeding which is
other than in the ordinary course of
business and which involves any material
restriction on the conduct of business by
Silver or its affiliates or the continued
ownership of its assets by Silver or any of
its affiliates (in each case, including
Rockies).
6. Any transaction (other than those
contemplated by this Term Sheet) between
Silver and its affiliates, on the one hand,
and Lasorda and his affiliates, on the
other hand, subject to exceptions relating
to the size of the proposed transaction and
those transactions which are otherwise on
an arm's length basis.
Termination of A Stockholder shall cease to be entitled to
Rights: exercise any rights under this Term Sheet
and the Stockholders Agreement as of the
date that its Stockholder Group
collectively ceases to own the equivalent
of 1,100,000 shares of Silver Common Stock
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in the case of Dodgers and 1,000,000 shares
of Silver Common Stock in the case of
Rockies (including, in the case of Rockies,
the proportionate number of Silver
Securities represented by Rockies' equity
interest in the Silver Company), in each
case determined on a fully diluted basis
(taking into account, in the case of
Rockies, the shares issuable upon exercise
of the Silver Option and, in the case of
Dodgers, all unexercised Options, whether
or not then exercisable, and all Silver
Additional Shares) (as to each Stockholder,
its "Eligible Stockholder Amount").
In addition, Lasorda and each member of his
Stockholder Group shall cease to be
entitled to exercise any rights under this
Term Sheet and the Silver Stockholders
Agreement with respect to the following
matters at such time as Lasorda is no
longer Chairman of the Board and/or Chief
Executive Officer and/or President of
Silver:
(i) the matters covered under the
caption "Dodgers Management Rights";
(ii) the matters covered under the
caption "Share Exchange"; and
(iii) the Dodgers right of first refusal
in connection with certain transfers
of Silver Securities by the Rockies
Stockholder Group pursuant to the
second paragraph under the caption
"Transfers of Silver Securities".
In addition, at such time as Lasorda is no
longer Chairman of the Board and/or Chief
Executive Officer and/or President of
Silver, the Rockies Stockholder Group shall
no longer have any obligations under this
Term Sheet or the Silver Stockholders
Agreement with respect to the matters
covered under the caption "Transfers of
Silver Securities", except with respect to
the Silver Put.
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Notwithstanding the provisions of the
previous two paragraphs, in the event that
prior to the date of the exercise of the
Silver Option by the Silver Company,
Lasorda's employment with Silver is
terminated (x) by Silver without Cause (as
defined in the Silver Term Sheet) or (y)
Lasorda for Good Reason (as defined in the
Silver Term Sheet, then to the extent that
(i) during the period from such termination
until the exercise of the Silver Option by
the Silver Company, Lasorda continues to
indicate a good faith intention to become
Chairman of the Board and/or Chief
Executive Officer and/or President of
Silver promptly following the exercise of
the Silver Option by the Silver Company and
(ii) upon such exercise of the Silver
Option Lasorda does become the Chairman of
the Board and/or Chief Executive Officer
and/or President of Silver, such
termination of Lasorda's employment will
not have the effects specified in the
preceding two paragraphs.
Share Exchange: So long as the Dodgers Stockholder Group
holds the Eligible Stockholder Amount of
Silver Securities, then Dodgers shall have
the right, exercisable from time to time,
to require that Rockies or the Silver
Company exchange, on a share for share
basis, shares of Silver Class B Stock owned
by Rockies or the Silver Company, as the
case may be, for vested shares of Silver
Common Stock owned by Dodgers (in each case
not subject to any liens (other than
pursuant to the Silver Stockholders
Agreement)). Notwithstanding the
foregoing, neither Rockies nor the Silver
Company shall be required to exchange any
shares of Silver Class B Stock for shares
of Silver Common Stock to the extent that,
after giving effect to such exchange,
Rockies will cease to own Silver Securities
constituting at least 50% of the total
voting power of Silver, determined on a
fully diluted basis (taking into account
the pro rata portion of the Silver
Securities held by the Silver Company
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represented by Rockies equity interest in
the Silver Company).
Transfers Subject to the other provisions of this
of Silver Term Sheet and the Silver Stockholders
Securities: Agreement, no Stockholder shall transfer or
otherwise dispose of (including pledges),
directly or indirectly, any Silver
Securities other than (w) transfers of
Silver Securities by Lasorda in order to
pay taxes arising from the granting,
vesting and/or exercise of the Options and/
or the payment of bonuses on repayment of
the Lasorda Note (as defined in the Silver
Term Sheet), (x) transfers of Silver
Securities by Rockies to members of the
Rockies Stockholder Group or by Lasorda or
Dodgers to members of the Dodgers
Stockholder Group, (y) a pledge or grant of
a security interest in vested Silver
Securities (other than the pledge of the
Additional Shares and the excess shares
(each as defined in the Silver Term Sheet))
in connection with bona fide indebtedness
in connection with which the pledgee of the
applicable Silver Securities agrees that,
upon any default or exercise of its rights
under such pledge or security arrangement,
it will offer to sell the pledged Silver
Securities to the non-pledging Stockholder
(or its designee) for an amount equal to
the lesser of the applicable amount of such
indebtedness and the fair market value of
such pledged Silver Securities, and
(z) transfers of Options or Silver
Securities to Silver by Dodgers or its
affiliates in connection with a "cashless"
exercise of the Options (which shall be
permitted pursuant to the terms thereof).
In addition to the foregoing, but subject
to a right of first refusal of the other
Stockholder (which right shall be
assignable): (i) following the fifth
anniversary of the date of the Silver
Stockholders Agreement either Stockholder
may transfer all but not less than all of
the Silver Securities held by its
Stockholder Group (and, in the case of
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Rockies, its entire interest in the Silver
Company) to an unaffiliated third party,
(ii) following the time that Lasorda is no
longer the Chairman of the Board and/or
Chief Executive Officer and/or President of
Silver, Lasorda may transfer all but not
less than all of the Silver Securities held
by its Stockholder Group to an unaffiliated
third party, and (iii) either Stockholder
may transfer any portion of the Silver
Securities held by its Stockholder Group to
an unaffiliated third party, provided that,
following such transfer (A) such
Stockholder Group retains its Eligible
Stockholder Amount of Silver Securities and
(B) in the case of Rockies, the outstanding
shares of Silver Class B Stock and Silver
Common Stock held by Rockies and Dodgers
(and the members of their respective
Stockholder Groups) and the Silver Company
collectively represent 50.1% of the voting
power of the outstanding Silver Securities
on a fully diluted basis. Notwithstanding
the previous sentence (but subject to the
conditions contained in the proviso in
clause (iii) above), either Stockholder may
transfer any of its Silver Securities in
one or more transactions that comply with
the requirements of Rule 144 or 145 (as
applicable) under the Securities Act of
1933 without regard to the right of first
refusal described in the previous sentence.
Except as otherwise specifically provided
in this Term Sheet, neither Stockholder
shall be entitled to assign any of its
rights under the Silver Stockholders
Agreement; and following any transfer of
Silver Securities in accordance with the
provisions of the previous paragraph (other
than to a member of the Stockholder Group
of such Stockholder), the assignee of such
Silver Securities shall not have any rights
or obligations under the Stockholders
Agreement with respect to such Silver
Securities.
If Lasorda ceases to be the Chairman of the
Board and/or Chief Executive Officer and/or
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President of Silver (except as a result of
a termination by Silver for Cause)
following the third anniversary of the date
of this Term Sheet, then during the forty-
five day period following the date that
Lasorda so ceases to be the Chairman of the
Board and/or Chief Executive Officer and/or
President of Silver, Dodgers will be
entitled to elect to "put" all, but not
less than all, of the Silver Securities
held by its Stockholder Group to Rockies at
their Appraised Value (the "Silver Put").
The purchase price for the Silver Put shall
be payable, at Rockies' election, in cash
or in any publicly traded class or series
of common equity securities of Rockies or
its parent (including any class or series
of common equity securities of Rockies
Parent intended to track the business and
assets of Rockies), as to which securities
Dodgers will receive customary registration
rights. For purposes of the payment of
such purchase price, the value of such
common equity securities of Rockies or
Rockies Parent shall be the average of the
closing trading prices of such securities
for the 20 trading days ending on the
second complete trading day prior to the
consummation of such purchase. In order to
determine Appraised Value, promptly
following the exercise of the Silver Put,
each of Dodgers and Rockies shall select an
independent investment banking firm who
shall promptly make a determination of
Appraised Value. If the higher of the two
such determinations is greater than 110% of
the lower of such determinations, then a
third independent investment banking firm
shall be selected by such first two
investment banking firms, which third
investment banking firm shall promptly
determine Appraised Value. The Appraised
Value shall be the average of the first two
appraisals, if only two appraisals are
required, or if three appraisals are
required, the average of the two appraisals
closest in value (or if there are not two
closest appraisals, the average of all
three such appraisals). In making their
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determinations, such investment banking
firms shall be instructed that the
Appraised Value shall be equal to (i) the
fair market value of Silver on a going
concern basis in a transaction in which the
applicable buyer acquires all outstanding
Silver Securities multiplied by (ii) the
fraction corresponding to the percentage of
the fully diluted equity of Silver
represented by the Silver Securities owned
by the Dodgers Stockholder Group. Such
investment banking firms shall also be
instructed to assume in making their
determination that (i) Lasorda is no longer
the Chairman of the Board and/or Chief
Executive Officer and/or President of
Silver and (ii) that there is no
controlling stockholder of Silver.
Following the determination of the
Appraised Value, Rockies shall be entitled
within a 60 day period to elect to either
pay the applicable purchase price in the
manner set forth above for the Silver
Securities held by the Dodgers Stockholder
Group or, in the alternative (and
notwithstanding the exercise of the Silver
Put), to elect to cause Silver to conduct
an "auction" in which all of the
outstanding Silver Securities shall be sold
to a third party (and, in the event of such
an election, each Stockholder agrees to
cooperate in conducting such "auction" and
consummating such sale as promptly and
efficiently as practicable); provided, that
any member of a Stockholder Group acting
alone or together with a group of bidders
may bid in and/or be the purchaser in such
auction.
Notwithstanding any other provision of the
Term Sheet, prior to any transfer or other
disposition (other than a pledge or grant
of a security interest in compliance with
clause (y) of the first paragraph under the
caption "Transfers of Silver Securities")
of Silver Class B Stock (other than
pursuant to the provisions described under
the caption "Share Exchange" or to a member
of such Stockholder's Stockholder Group, to
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the other Stockholder or, if the non-
transferring Stockholder so elects, to a
purchaser designated by the non-
transferring Stockholder in connection with
the exercise by such non-transferring
Stockholder of its right of first refusal
pursuant to the Silver Stockholders
Agreement), all shares of Silver Class B
Stock proposed to be so transferred or
otherwise disposed of shall be exchanged
with the non-transferring Stockholder or
the Silver Company, as the case may be, for
shares of Silver Common Stock, on a share
for share basis, and to the extent such
non-transferring Stockholder or the Silver
Company, as the case may be, does not own
sufficient shares of Silver Common Stock to
make such an exchange, such transferring
Stockholder shall convert, or cause to be
converted, such shares of Silver Class B
Stock into shares of Silver Common Stock
(or such other Silver Securities into which
such shares are then convertible) prior to
such transfer.
All transfers and exchanges contemplated by
this Term Sheet and the Silver Stockholders
Agreement shall be subject to limited
periods of suspension in order to prevent
liability under the federal securities
laws.
Subject to the restrictions on the transfer
of its Silver Securities contained herein
and in the Silver Stockholders Agreement,
each Stockholder shall be entitled to
customary demand and incidental
registration rights with respect to the
Silver Securities held by its Stockholder
Group.
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EXHIBIT 2
[Liberty Media Corporation Letterhead]
November 13, 1995
Mr. Barry Diller
1940 Coldwater Canyon
Beverly Hills, California 90120
Dear Sir:
Reference is made to the definitive term sheet,
attached to our letter to you, dated August 24, 1995, pursuant
to which you ("Diller") and we ("Liberty") have entered into
certain agreements with respect to the equity securities of
Silver King Communications, Inc. (the "Company"), all as
described therein (the "Term Sheet"). This letter amends the
Term Sheet.
Pursuant to Section I ("Silver Company Arrangements")
of the Term Sheet, upon a Change in Law (as defined in the Term
Sheet), will convert into voting common equity of the Silver
Company having the same pro rata rights, powers and preferences
as Diller's equity interest in the Silver Company. Liberty and
Diller hereby agree that such conversion of Liberty's equity
interest shall not be automatic and that, prior to any such
conversion, the parties will promptly make all necessary
filings and obtain all required consents under federal and
state law, including pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder.
Except as expressly amended by the foregoing, the
Term Sheet shall remain in full force and effect.
Very truly yours,
LIBERTY MEDIA CORPORATION
By:/s/ David Koff
Name: David Koff
Title: Vice President
Acknowledged and agreed to
as of the date first written
above:
/s/ Barry Diller
Barry Diller
EXHIBIT 3
Barry Diller
1940 Coldwater Canyon
Beverly Hills, CA 90210
November 16, 1995
Liberty Media Corporation
8101 E. Prentice Ave., Ste. 500
Englewood, CO 80111
Attn: President
Dear Sir:
Reference is made to the definitive term sheet,
attached to your letter to me, dated August 24, 1995, as
amended by your letter to me of even date herewith, pursuant to
which you ("Liberty") and I ("Diller") have entered into
certain agreements with respect to the equity securities of
Silver King Communications, Inc. (the "Company"), all as
described therein (the "Term Sheet"). This letter further
amends the Term Sheet.
I agree that at such time as Liberty is permitted to
convert its non-voting equity interest in the Silver Company
(as defined in the Term Sheet) into a voting equity interest, I
will, and will use my reasonable best efforts to cause Silver
Company to, make all necessary filings (including under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder) and to
otherwise obtain all required governmental and regulatory
consents and approvals in connection with such conversion, in
each such case as promptly as practicable.
Very truly yours,
/s/ Barry Diller
Barry Diller
Acknowledged and agreed to as
of the date first written above:
LIBERTY MEDIA CORPORATION
By: /s/ David Koff
Name: David Koff
Title: Vice President
EXHIBIT 4
November 27, 1995
LIBERTY MEDIA CORPORATION
8101 East Prentice Avenue, Suite 500
Englewood, Colorado 80111
Mr. Barry Diller
1940 Coldwater Canyon
Beverly Hills, California 90210
Dear Sir:
Reference is made to the agreement between Liberty
Media Corporation ("Rockies") and Barry Diller ("Lasorda"),
dated August 24, 1995 (including the related term sheet
included therein, the "Prior Agreement"), relating to the
securities of Silver King Communications, Inc. ("Silver").
Capitalized terms not otherwise defined in this letter
agreement (this "Agreement") shall have the meanings ascribed
to such terms in the Prior Agreement. Subject to the prior
receipt of any required approvals of the Board of Directors of
Home Shopping Network, Inc. ("House") under Section 203 of the
Delaware General Corporation Law (the "DGCL"), Rockies and
Lasorda hereby agree to the following amendments to the Prior
Agreement and the additional agreements contained herein, each
of which shall be incorporated in the Silver Stockholders
Agreement:
1. Merger and Exchange of Securities.
(a) Subject to the satisfaction of certain
conditions contained herein and contained in the
definitive merger agreement entered into among
Liberty Program Investments, Inc. ("Rockies
Sub"), Liberty HSN, Inc. ("Rockies House Sub")
and Silver Company in connection herewith (the
"Merger Agreement"), Rockies House Sub will be
merged with and into Silver Company (the
"Merger"), which will be the surviving
corporation in the Merger. In the Merger,
Rockies Sub, the sole stockholder of Rockies
House Sub, will receive 3,363,262 shares (the
"Merger Consideration Shares") of the Class B
Common Stock, par value $.01 per share, of
Silver Company (the "Silver Company Non-Voting
Stock"). At the time of the Merger, Rockies
House Sub will own 17,566,702 shares of House
Common Stock and 20,000,000 shares of House
Class B Common Stock (collectively, the "House
Shares"). Notwithstanding the foregoing, the
Merger Consideration Shares to be received by
Rockies in the Merger shall be such amount as is
necessary to cause the percentage equity
economic interest of each of Rockies and Dodgers
in Silver Company to be in proportion to the
relative fair market values of the contributions
of the parties to Silver Company; provided, that
notwithstanding the provisions of the Prior
Agreement the value of the Silver Option shall
be determined by reference to the imputed value
of a share of Silver Common Stock to be received
by Silver Company in the Exchange.
(b) Subject to the satisfaction of certain
conditions contained herein and contained in the
definitive exchange agreement entered into among
Silver Company and Silver in connection herewith
(the "Exchange Agreement"), immediately
following the Merger, Silver Company will
exchange (the "Exchange") the 20,000,000 shares
of House Class B Common Stock for 6,082,000
shares of Silver Class B Stock and the
17,566,702 shares of House Common Stock for
4,855,436 shares of Silver Common Stock
(collectively, the "Exchange Shares").
(c) Immediately following Rockies' receipt of the
Merger Consideration Shares in the Merger,
Rockies will transfer up to one-third of the
aggregate number of shares of Silver Company
Non-Voting Stock owned by it (subject to
adjustment in the event the SP Merger (as
defined below) is not consummated) to a
corporation ("Newco") which will be wholly owned
by Lasorda in exchange for a non-interest
bearing secured promissory note of Newco in the
principal amount of $1,000 (the "Note"). The
Note and the related pledge and security
agreement will have such terms and provisions as
may be reasonably acceptable to Rockies, which
terms and provisions shall include, among other
matters, that the Note will (i) be non-recourse
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to Newco, (ii) be secured by a pledge of all of
the shares of Silver Company Non-Voting Stock
transferred to Newco (the "Pledged Silver
Company Shares") and by a pledge of all of the
authorized and issued shares of Newco (the
"Pledged Newco Shares", and collectively with
the Pledged Silver Company Shares, the "Pledged
Shares"), (iii) mature on the 20th anniversary
of the date of issue and (iv) not be prepayable
at the option of the holder. The Pledged Shares
may not be assigned, transferred, sold, disposed
of, pledged or otherwise encumbered in any
manner (including, but not limited to, with
respect to the voting thereof) and any attempted
disposition of the Pledged Shares shall
constitute a breach of the pledge agreement
entitling Rockies to exercise upon such pledge
and obtain full ownership of such Pledged Shares
immediately and without any notice to Lasorda or
Newco and, in the event Lasorda or Newco receive
any proceeds from an attempted disposition of
such Pledged Shares, then Lasorda and/or Newco
shall be deemed to hold such proceeds in a
constructive trust for the benefit of Rockies
and shall promptly pay over to Rockies the
amount of any such proceeds. In addition, in
the event any dividends are paid or
distributions made on the Pledged Shares, then
notwithstanding the provisions of the pledge
agreement, such dividends or distributions will
be paid or distributed directly to Rockies.
Newco will have no other assets or liabilities
and will engage in no other business except as
contemplated by this paragraph (c).
Rockies will have a right to purchase, and
Lasorda will have a right to require Rockies to
purchase, the Pledged Silver Company Shares at
any time for $1,000 in cash. Rockies will have
the right to purchase all of the outstanding
shares of capital stock of Newco at any time for
$1,000 in cash.
To the extent that the Pledged Shares are
entitled to vote upon or consent to any matter
to be presented to the stockholders of Newco or
Silver Company, as the case may be, Lasorda and/
or Newco hereby grants to Rockies (or any person
to which the Note is transferred) an irrevocable
proxy (which proxy shall be deemed coupled with
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an interest) to vote such shares or consent to
any action.
The Note shall be transferable at any time
without the consent of Newco and any transferee
shall succeed to any and all of Rockies rights
with respect to the Note and the Pledged Shares
and the other related arrangements contemplated
by this paragraph (c).
The Note and the other arrangements described in
this paragraph (c) shall have such other terms
and conditions as the parties may reasonably
agree in furtherance of the foregoing.
2. Restructuring Transaction. (a) At any time
following the consummation of the Exchange that
Rockies is no longer a subsidiary of Rockies'
Parent (and provided that a Change in Law has
not theretofore otherwise occurred), but in no
event prior to the earliest to occur of (i) the
termination of the Agreement and Plan of Merger
between Savoy Pictures Entertainment, Inc.
("Savoy"), Silver and a wholly owned subsidiary
of Silver (the "SP Merger Agreement"), (ii) the
eighteen month anniversary of the consummation
of the merger between Savoy and a wholly owned
subsidiary of Silver (the "SP Merger"), and
(iii) the consummation of the sale, transfer or
other disposition by Silver of that number of
Silver's broadcast licenses (including any such
licenses acquired by Silver in connection with
the SP Merger) (the "Licenses") required in
connection with any divestiture of Licenses
which is required pursuant to any Federal
Communications Commission ("FCC") rule or
regulation, or in accordance with any conditions
or requirements specified in any waiver
therefrom, as a result of Silver exceeding, as a
result of the consummation of the SP Merger, the
limitation on the number of Licenses permitted
to be owned by any individual or entity, Rockies
may request by written notice to Lasorda and
Silver that Lasorda use all reasonable efforts
to take, and, subject to any applicable
fiduciary duties of Lasorda, as a director or
officer of Silver, to the stockholders of
Silver, use all reasonable efforts to cause
Silver to take, such actions as may be
reasonably necessary, including, but not limited
-4-
to, to file any required applications with the
FCC and any other governmental or regulatory
agency, to obtain any required FCC or other
governmental or regulatory consents and
approvals, and to undertake any restructuring of
Silver's assets, liabilities and businesses, in
order that Rockies would be permitted to
exercise ownership rights (including voting
rights) with respect to the Silver Securities
owned by it (including its pro rata interest in
any Silver Securities held by the Silver
Company) (the "Restructuring Transaction").
(b) Simultaneously with or immediately following the
consummation of the Restructuring Transaction,
Rockies or its designee shall be required to
purchase (and Dodgers will be required to sell)
Dodgers' entire equity interest in the Silver
Company for an amount equal to the Dodgers
Interest Purchase Price.
(c) The terms of the Silver Company Non-Voting Stock
shall provide that (i) such shares are
convertible at the option of the holder thereof
into a like number of shares of voting common
stock of Silver Company, subject only to the
receipt of any required governmental or
regulatory consents or approvals and the
termination of any applicable waiting period
under the HSR Act required in connection with
such conversion and (ii) following notice by the
holder thereof to Silver Company of its
intention to convert such shares, Silver Company
shall, and shall cause each of its subsidiaries
and affiliates (including Silver) to, seek any
required consents or approvals, and make any and
all required filings and obtain any and all such
consents and approvals with or from any
governmental or regulatory agency, including the
FCC, and the termination of any applicable
waiting period under the HSR Act in connection
with such conversion, in each case as promptly
as practicable.
(d) If a Restructuring Transaction has not occurred
within 365 days following the notice referred to
in paragraph 2(a) (or, if earlier, such time as
Rockies reasonably determines, after
consultation with Lasorda, that Lasorda has
ceased to use his reasonable efforts to
-5-
consummate a Restructuring Transaction as
required by this Section 2), and a Change in Law
has not otherwise occurred by such date, then
notwithstanding the restrictions on transfer of
the Silver Securities described under the
caption "Transfers of Silver Securities" in the
Prior Agreement, the Rockies Stockholder Group
will be entitled to sell any and all of its
Silver Securities (including its entire equity
interest in the Silver Company), subject only to
(i) a right of first refusal of Dodgers (or its
designee), (ii) Rockies' obligation to swap
shares of Silver Class B Stock so proposed to be
sold for shares of Silver Common Stock owned by
the Dodgers Stockholder Group pursuant to the
paragraph of the Prior Agreement entitled "Share
Exchange" (but without regard to the limitation
in the last sentence thereof), and (iii)
Rockies' further obligation to convert shares of
Silver Class B Stock into shares of Silver
Common Stock prior to such a sale (other than to
a member of the Dodgers Stockholder Group).
Such person or entity (other than a member of
the Dodgers Stockholder Group) shall acquire
such Silver Securities and/or interest in the
Silver Company free and clear of any rights or
obligations under the Prior Agreement, this
Agreement or the Silver Stockholders Agreement;
provided, that such person or entity shall be
entitled to such reasonable demand and
incidental registration rights with respect to
its Silver Securities (including those shares
represented by its interest in the Silver
Company) as was Rockies under the Prior
Agreement and/or the Silver Stockholders
Agreement prior to such sale. Except as
specifically provided in this paragraph, the
sale by Rockies permitted herein will not
otherwise alter the rights and obligations of
the parties set forth in the Prior Agreement (as
amended by this Agreement).
3. Management Structure. The Silver Stockholders
Agreement shall provide that upon the earlier to
occur of (i) the Restructuring Transaction
(which will result in a Change in Law following
the consummation thereof) and (ii) a Change in
Law (which the parties agree shall include, for
purposes of this Agreement and the Prior
Agreement, any change in law, rule or
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regulation, or change in the circumstances of
any party or Silver (including, but not limited
to, in the case of Rockies, a change in the
ownership of a majority of the outstanding
common stock of Rockies) or any other event, the
effect of which is or would be to permit Rockies
or any holder of Rockies' interest in the Silver
Company to exercise ownership rights (including
voting rights) with respect to the Silver
Securities owned by it (including its pro rata
portion of any Silver Securities held by the
Silver Company)), whether before or after the
Merger and/or the Exchange, the management
rights of the parties with respect to Silver
shall be as follows:
(i) Lasorda thereafter would be entitled to
designate a mutually agreeable number of
the members of the Board of Directors of
Silver and Rockies would be entitled to
designate the remainder of the directors of
Silver (which number designated by Rockies
shall, in any event, constitute a majority
of the number of directors constituting the
entire Silver Board of Directors). In the
event that (A) any of Rockies' designees on
the Silver Board of Directors vote in a
manner inconsistent with the expressed
preference of Lasorda (or, unless required
by applicable law, abstain from voting)
with respect to any matter voted upon by
the Silver Board of Directors, and the
outcome of such vote is inconsistent with
such preference or (B) any member of the
Rockies Stockholder Group votes any of its
Silver Securities with respect to any
matter presented for a vote of the
stockholders of Silver in a manner
inconsistent with the expressed preference
of Lasorda (or abstains from voting) and
the outcome of such vote is inconsistent
with such preference (including, except as
set forth below, decisions relating to
Lasorda's employment with Silver), in
either case other than (x) any decision to
terminate Lasorda's employment with Silver
for Cause, (y) any decision relating to
Lasorda's compensation by Silver or any of
its subsidiaries (except as provided for by
the Silver Term Sheet), or (z) any decision
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relating to a Fundamental Matter (except as
set forth in (x), (y) and (z) above, a
"Qualifying Disagreement"), then Lasorda
shall be entitled to deliver notice of his
election (a "Management Election") to
exercise his management rights as a result
of the occurrence of such Qualifying
Disagreement in the manner and to the
extent set forth below.
(ii) Following a Management Election by Lasorda:
(A) Lasorda shall be entitled to exercise
his voting authority or authority to act by
written consent over all Silver Securities
then owned by each member of the Rockies
Stockholder Group and the Dodgers
Stockholder Group on all matters submitted
to a vote of Silver stockholders, or by
which Silver stockholders may act by
written consent, pursuant to a conditional
proxy (which proxy shall be valid for the
full remaining term that the Prior
Agreement and the Silver Stockholders
Agreement that supersedes (to the extent
set forth therein) the Prior Agreement is
effective and shall be irrevocable and
coupled with an interest for purposes of
Section 212 of the DGCL), provided, that
each Stockholder agrees, and agrees to
cause each member of its Stockholder Group,
to take or cause to be taken all reasonable
actions required (x) for the election of a
slate of directors of Silver, two of whom
will be designated by Rockies and the
remainder of whom will be designated by
Lasorda, and (y) to prevent the taking of
any action by Silver or its subsidiaries
with respect to a Fundamental Matter
without the consent of both Stockholders;
and (B) subject to applicable law and
fiduciary duties and except with respect to
any Fundamental Matters and any matter
referred to in clause (x) or (y) under
clause (i) above, Rockies shall be required
to use its reasonable best efforts to cause
its designees on the Silver Board of
Directors to vote with respect to any
matter presented to a vote of the Silver
Board of Directors in the manner instructed
by Lasorda.
-8-
(iii) Lasorda shall cease to be entitled to
exercise any rights under this Agreement or
the Stockholders Agreement with respect to
the matters set forth in this Section 3
upon the occurrence of any of the
following: (x) Lasorda is no longer
Chairman of the Board and/or Chief
Executive Officer and/or President of
Silver and (y) the Dodgers Stockholder
Group ceases to own its Eligible
Stockholder Amount of Silver Securities.
(iv) Each of Rockies and Lasorda agrees, and
agrees to cause each member of its
Stockholder Group, to take all reasonable
actions required (including to vote or
execute a written consent with respect to
the Silver Securities held by the Silver
Company) in order to give effect to the
provisions of this Section 3. In this
connection, (A) following the earlier to
occur of the events specified in clauses
(i) and (ii) of the introductory paragraph
of this Section 3, if so requested by
Rockies, all representatives of Lasorda
and/or the Dodgers Stockholder Group on the
Silver Board of Directors shall immediately
resign (other than the representative(s) to
be designated by Lasorda pursuant to clause
(i)) and (B) following a Management
Election, if so requested by Lasorda, all
representatives of Rockies on the Silver
Board of Directors shall resign immediately
(other than two persons designated by
Rockies).
4. Contribution to Silver Company. In the event
that (a) a Change in Law occurs prior to the
date upon which Rockies is required to transfer
the Silver Option and cash to the Silver Company
and (b) the change in structure described in
this Section would not result in any material
delay or additional review of Lasorda's
application to the FCC regarding a change in
control of Silver (the "CINC Approval"), or
otherwise materially delay the consummation of
such change in control, then Rockies shall not
be required to make such contribution but shall
instead exercise the Silver Option promptly
following the receipt of the CINC Approval. All
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shares of Silver Class B Stock received by it
upon such exercise shall be held by Rockies and
shall immediately become subject to the Silver
Stockholders Agreement. In such event, the
parties shall use their respective commercially
reasonable efforts to amend the Merger Agreement
and the Exchange Agreement to provide that
Rockies shall exchange the House Shares directly
with Silver in exchange for the Exchange Shares
on the basis set forth in the Exchange
Agreement, mutatis mutandis. Such transaction
would be structured in a manner reasonably
acceptable to the parties in light of relevant
tax and regulatory considerations. In such
event, the management structure described in
Section 3 would apply as to the parties
respective management rights as to Silver.
5. Fundamental Matters. Upon the consummation of
the Merger and the Exchange, the indicated
paragraphs of the definition of the term
"Fundamental Matters" in the Prior Agreement
shall be amended in their entirety to read as
follows:
"(2) The acquisition, disposition
(including pledges), directly or
indirectly, by Silver or any of its
subsidiaries, of any assets (including
debt and/or equity securities) or
business (by merger, consolidation or
otherwise), the grant or issuance of
any debt or equity securities of
Silver or any of its subsidiaries, the
redemption, repurchase or
reacquisition of any debt or equity
securities of Silver or any of its
subsidiaries by Silver or any such
subsidiary, or the incurrence of any
indebtedness, or any combination of
the foregoing, in any such case, in
one transaction or any series of
transactions in a six month period,
with a value of 10% or more of the
market value of Silver's outstanding
equity securities at the time of such
transaction."
"(4) Engaging in any line of business other
than media, communications and
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entertainment products, services and
programming, and electronic
retailing."
6. Covenant of Lasorda. Lasorda hereby covenants
and agrees with Rockies that, if so requested by
Rockies, following the Merger he will use his
reasonable best efforts to cause one designee of
Rockies to serve or continue to serve on the
Board of Directors of House.
7. Consent of Rockies and Lasorda Regarding Certain
Transactions. For purposes of the provisions of
the Prior Agreement and this Agreement regarding
Dodgers Management Rights and Fundamental
Matters, each of Rockies and Lasorda hereby
consents and agrees to the taking of any action
by any of Lasorda, the Silver Company or Silver,
which action is reasonably necessary or
appropriate to approve and consummate the
transactions (including the related amendments
to the Silver Certificate of Incorporation and
other actions to be taken by the Silver
stockholders (including the approval by Silver
stockholders of the additional options to
purchase Silver Common Stock to be granted to
Lasorda (which grant shall be made in respect
of, and subject to, the consummation of each of
the Exchange and the SP Merger), as approved by
the Compensation Committee of the Silver Board
of Directors in connection herewith))
contemplated by each of the Merger Agreement,
the Exchange Agreement and the SP Merger
Agreement, provided, that the applicable parties
shall not enter into, or permit any material
amendment to, or waiver or modification of
material rights or obligations under the SP
Merger Agreement without the prior written
consent of Rockies (which consent shall not be
unreasonably withheld).
8. Reasonable Efforts. Each of Rockies and Lasorda
agrees to use, and to cause each of its
respective officers, directors, employees,
affiliates and representatives to use, all
reasonable efforts and take all reasonable
actions required or necessary to consummate the
transactions contemplated by this Agreement and
the Prior Agreement (including, without
limitation, the Merger and the Exchange) and to
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entertainment products, services and
programming, and electronic retailing."
9. Liabilities under the Federal Securities Laws.
The exercise of any rights hereunder or under
the Prior Agreement or the Silver Stockholders
Agreement by either Rockies or Dodgers and/or
Lasorda shall be subject to such reasonable
delay as may be required to prevent the other
Stockholder Group from incurring any liability
under the federal securities laws.
10. Miscellaneous. This agreement shall be governed
by and construed in accordance with the laws of
the State of New York applicable to agreements
to be fully performed therein and without regard
to principles of conflict of laws. This
Agreement, together with the Prior Agreement,
incorporates the entire understanding of the
parties with respect to the subject matter
herein and therein and supersedes all previous
understandings, discussions, negotiations and
agreements with respect to such subject matter.
The Prior Agreement, as amended pursuant to the
specific terms of this Agreement, is hereby
ratified and confirmed in all respects;
provided, however, that in the event of any
conflict between the terms of this Agreement and
the terms of the Prior Agreement, the terms of
this Agreement shall be deemed to supersede the
conflicting terms of the Prior Agreement. This
Agreement may be executed in counterparts,
(including its rights and obligations under the
Prior Agreement) each of which shall be deemed
an original and all of which shall constitute
one and the same instrument. Except as
otherwise provided herein, neither party may
assign this Agreement without the prior written
consent of the other party.
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If the foregoing is acceptable to you, please execute
the copy of this agreement in the space below, at which time
this Agreement will constitute a binding agreement between us.
Very truly yours,
LIBERTY MEDIA CORPORATION
By: /s/ Robert R. Bennett
Name: Robert R. Bennett
Title: Executive Vice President
ACCEPTED AND AGREED
this 27th day of November, 1995
By: /s/ Barry Diller
Barry Diller
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EXHIBIT 5
AGREEMENT AND PLAN OF MERGER
DATED AS OF NOVEMBER 27, 1995
BY AND AMONG
SILVER MANAGEMENT COMPANY,
LIBERTY PROGRAM INVESTMENTS, INC.
AND LIBERTY HSN, INC.
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER AND RELATED MATTERS............. 2
SECTION 1.1 The Merger................................. 2
SECTION 1.2 Conversion of Stock........................ 3
SECTION 1.3 Exchange of Certificates................... 3
SECTION 1.4 Certificate of Incorporation of the
Surviving Corporation.................... 4
SECTION 1.5 Bylaws of the Surviving Corporation........ 4
SECTION 1.6 Directors and Officers of the Surviving
Corporation.............................. 4
SECTION 1.7 Closing.................................... 4
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SILVER CO....... 4
SECTION 2.1 Organization and Qualification............. 4
SECTION 2.2 Authorization and Validity of Agreement.... 5
SECTION 2.3 Validity of Merger Consideration Shares.... 5
SECTION 2.4 Capitalization............................. 6
SECTION 2.5 No Approvals or Notices Required; No
Conflict with Instruments................ 7
SECTION 2.6 Brokers or Finders......................... 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ROCKIES SUB
AND ROCKIES HOUSE SUB.................. 9
SECTION 3.1 Organization and Qualification............. 9
SECTION 3.2 Authorization and Validity of Agreement.... 9
SECTION 3.3 Capitalization; Validity of Stock.......... 10
SECTION 3.4 Assets of Rockies House Sub................ 10
SECTION 3.5 Liabilities of Rockies House Sub........... 11
SECTION 3.6 No Approvals or Notices Required; No
Conflict with Instruments................ 11
SECTION 3.7 Brokers or Finders......................... 12
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Page
ARTICLE IV
COVENANTS AND OTHER AGREEMENTS.............. 12
SECTION 4.1 Reasonable Efforts......................... 12
SECTION 4.2 Public Announcements....................... 13
SECTION 4.2 Confidentiality............................ 14
SECTION 4.3 House Shares............................... 14
SECTION 4.4 Notification of Certain Matters............ 14
SECTION 4.5 No Amendment of Exchange Agreement......... 15
ARTICLE V
CONDITIONS..................... 15
SECTION 5.1 Conditions Precedent to the Obligations
of Silver Co., Rockies Sub and Rockies
House Sub................................ 15
(a) Absence of Injunctions................ 15
(b) No Proceedings or Adverse Enactments.. 15
(c) HSR Act............................... 16
(d) Receipt of Governmental Approvals
and Consents........................ 16
(e) Satisfaction of Conditions to the
Exchange............................ 16
SECTION 5.2 Conditions Precedent to the Obligations
of Rockies Sub and Rockies House Sub..... 16
(a) Accuracy of Representations and
Warranties.......................... 16
(b) Performance of Agreements............. 17
(c) Silver Co. Capital Contribution....... 17
(d) Capitalization of Silver Co. and
Validity of Stock Prior to Closing.. 17
(e) No Impediments to the Exchange........ 17
(f) No Proceedings or Adverse Enactments
Affecting Merger Consideration
Shares.............................. 17
(g) Lasorda Management Role............... 17
(h) Officer's Certificates................ 18
(i) Other Deliveries...................... 18
(j) No Adverse Change or Development...... 18
(k) Audited Financial Statements.......... 19
(l) Consummation of SP Merger............. 19
SECTION 5.3 Conditions Precedent to the Obligations of
Silver Co................................ 19
(a) Accuracy of Representations and
Warranties.......................... 19
(b) Performance of Agreements............. 20
-ii-
Page
(c) Officer's Certificates................ 20
(d) Other Deliveries...................... 20
ARTICLE VI
TERMINATION..................... 20
SECTION 6.1 Termination and Abandonment................ 20
SECTION 6.2 Effect of Termination...................... 21
ARTICLE VII
MISCELLANEOUS.................... 21
SECTION 7.1 Failure to Consummate the Exchange......... 21
SECTION 7.2 Further Assurances......................... 21
SECTION 7.3 Expenses................................... 22
SECTION 7.4 Notices.................................... 22
SECTION 7.5 Entire Agreement........................... 23
SECTION 7.6 Assignment; Binding Effect; Benefit........ 23
SECTION 7.7 Amendment.................................. 23
SECTION 7.8 Extension; Waiver.......................... 23
SECTION 7.9 Survival................................... 24
SECTION 7.10 Interpretation............................. 24
SECTION 7.11 Severability............................... 25
SECTION 7.12 Counterparts............................... 25
SECTION 7.13 Applicable Law............................. 25
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November
27, 1995, by and among Silver Management Company, a Delaware
corporation ("Silver Co."), Liberty Program Investments, Inc.,
a Wyoming corporation ("Rockies Sub") and an indirect wholly-
owned subsidiary of Liberty Media Corporation, a Delaware
corporation ("Rockies"), and Liberty HSN, Inc., a Colorado
corporation and a wholly-owned subsidiary of Rockies Sub
("Rockies House Sub").
RECITALS:
WHEREAS, Rockies House Sub owns 17,566,702 shares of
the Common Stock, par value $.01 per share (the "House Common
Stock"), of Home Shopping Network, Inc., a Delaware corporation
("House"), and 20,000,000 shares of the Class B Common Stock,
par value $.01 per share (the "House Class B Stock"), of House
(collectively, the "House Shares");
WHEREAS, the House Board of Directors has approved
the transactions contemplated hereby and the Exchange Agreement
(as hereinafter defined) being entered into simultaneously
herewith (including for purposes of Section 203 of the Delaware
General Corporation Law (the "DGCL"));
WHEREAS, immediately following the consummation of
the merger contemplated hereby, Silver Co. desires to exchange
(the "Exchange") with Silver King Communications, Inc., a
Delaware corporation ("Silver"), all of the shares of House
Common Stock which it will acquire as a result of such merger
for newly issued shares of Common Stock, par value $.01 per
share (the "Silver Common Stock"), of Silver and all of the
shares of House Class B Stock which it will acquire as a result
of such merger for newly issued shares of Class B Common Stock,
par value $.01 per share (the "Silver Class B Stock"), of
Silver, all pursuant to that certain Exchange Agreement, dated
as of the date hereof, by and between Silver Co. and Silver
(the "Exchange Agreement");
WHEREAS, Rockies Sub, Rockies House Sub and Silver
Co. wish to set forth their agreement as to the terms and
conditions upon which Rockies House Sub will be merged with and
into Silver Co., as a result of which merger Silver Co. will be
the surviving corporation.
NOW, THEREFORE, in consideration of the premises and
of the respective covenants, representations, warranties and
agreements herein contained, the parties hereto agree as
follows:
ARTICLE I
THE MERGER AND RELATED MATTERS
SECTION 1.1 The Merger. (a) Upon the terms and subject
to the conditions of this Agreement, at the Effective Time (as
such term is defined in Section 1.1(b) hereof), Rockies House
Sub shall be merged with and into Silver Co. (the "Merger") in
accordance with the provisions of the DGCL and the Colorado
Business Corporation Act (the "Colorado Code"), the separate
corporate existence of Rockies House Sub shall cease, and
Silver Co. shall continue as the surviving corporation under
the laws of the State of Delaware (the "Surviving
Corporation").
(b) The Merger shall become effective at the time
(the "Effective Time") of the later to occur of (i) the filing
with the Delaware Secretary of State of a certificate of merger
(the "Certificate of Merger") in such form as is required by,
and executed in accordance with, the applicable provisions of
the DGCL and (ii) the filing of appropriate articles of merger
(the "Articles of Merger") with the Colorado Secretary of State
in accordance with the provisions of Section 7-111-105 of the
Colorado Code, or at such later time as may be agreed to by
Rockies Sub and Silver Co. and specified in the Certificate of
Merger and the Articles of Merger. Provided that this
Agreement has not been terminated pursuant to Article VI, the
parties will cause the Certificate of Merger to be filed with
the Delaware Secretary of State and the Articles of Merger to
be filed with the Colorado Secretary of State as soon as
practicable after the Closing (as defined in Section 1.7).
(c) The Merger shall have the effects set forth in
Sections 259, 260 and 261 of the DGCL and in Section 7-111-106
of the Colorado Code. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the
properties, rights, privileges, powers and franchises of
Rockies House Sub and Silver Co. shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Rockies
House Sub and Silver Co. shall become the debts, liabilities
and duties of the Surviving Corporation. If, at any time after
the Effective Time, the Surviving Corporation considers or is
advised that any deeds, bills of sale, assignments, assurances
or any other actions or things are necessary or desirable to
vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in, to or
under any of the rights, properties or assets of either Rockies
House Sub or Silver Co., or otherwise to carry out the intent
and purposes of this Agreement, the officers and directors of
the Surviving Corporation will be authorized to execute and
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deliver, in the name and on behalf of each of Rockies House Sub
and Silver Co., all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of
each of Rockies House Sub and Silver Co., all such other
actions and things as may be necessary or desirable to vest,
perfect or confirm any and all right, title and interest in, to
and under such rights, properties or assets in the Surviving
Corporation or otherwise carry out the intent and purposes of
this Agreement.
SECTION 1.2 Conversion of Stock. At the Effective Time:
(a) By virtue of the Merger and without any action
on the part of the holder thereof, the outstanding shares of
common stock of Rockies House Sub, par value $1.00 per share,
shall be converted into and represent the right to receive, and
shall be exchangeable for, as provided in Section 1.3 hereof,
an aggregate of 3,363,262 newly issued, fully paid and
nonassessable shares of the Class B Common Stock, par value
$.01 per share of Silver Co. (the "Silver Co. Class B Common
Stock"). The shares of Silver Co. Class B Common Stock to be
issued as consideration in the Merger are collectively referred
to herein as the "Merger Consideration Shares." At the
Effective Time, all such shares of common stock of Rockies
House Sub shall automatically be cancelled and retired and
cease to exist. Following the Effective Time, such shares
shall no longer be deemed to be outstanding, and each holder of
a certificate representing any such shares shall cease to have
any rights with respect thereto, except the right to receive
the shares of Silver Co. Class B Common Stock to be issued in
consideration therefor upon the surrender of such certificate
in accordance with Section 1.3 hereof, without interest.
(b) Each share of Class A Common Stock, par value
$.01 per share of Silver Co. (the "Silver Co. Class A Common
Stock") then issued and outstanding shall remain issued and
outstanding and unchanged by the Merger.
(c) Each share of Class B Common Stock, par value
$.01 per share, of Silver Co. (the "Silver Co. Class B Common
Stock") then issued and outstanding shall remain issued and
outstanding and unchanged by the Merger.
SECTION 1.3 Exchange of Certificates. At the Closing (as
defined below), upon surrender to Silver Co. of the
certificates which immediately prior to the Effective Time
represented the outstanding shares of common stock of Rockies
House Sub, Silver Co. shall deliver to Rockies Sub the Merger
Consideration Shares payable in respect of such shares. The
stock certificate or certificates representing the Merger
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Consideration Shares delivered to Rockies Sub pursuant to this
Agreement shall be dated the Closing Date (as defined below)
and shall be issued to and registered in the name of Rockies
Sub, or a designee of Rockies Sub, if Rockies Sub so directs.
SECTION 1.4 Certificate of Incorporation of the Surviving
Corporation. The certificate of incorporation of Silver Co. as
in effect immediately prior to the Effective Time shall be the
certificate of incorporation of the Surviving Corporation after
the Merger until thereafter amended as provided by law.
SECTION 1.5 Bylaws of the Surviving Corporation. The
bylaws of Silver Co. as in effect immediately prior to the
Effective Time, shall be the bylaws of the Surviving
Corporation after the Merger until thereafter amended as
provided by law.
SECTION 1.6 Directors and Officers of the Surviving
Corporation. The directors and officers of Silver Co.
immediately prior to the Effective Time shall be (until their
respective successors are elected and qualified) the directors
and officers of the Surviving Corporation after the Merger.
SECTION 1.7 Closing. The Closing of the transactions
contemplated by this Agreement (the "Closing") shall take place
(i) at the offices of Baker & Botts, L.L.P., 885 Third Avenue,
New York, New York 10022, at 10:00 a.m., local time, on the
second business day following the day on which the last of the
conditions set forth in Sections 5.1(c), 5.1(d), 5.1(e), 5.2(b)
(other than any actions to be taken at the Closing), 5.2(c),
5.2(e), 5.2(l) and 5.3(b) (other than any actions to be taken
at the Closing) hereof is fulfilled or waived (subject to
applicable law) or (ii) at such other time and place and on
such other date as Silver Co. and Rockies Sub shall agree (the
"Closing Date").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SILVER CO.
Silver Co. hereby makes the following representations and
warranties to Rockies Sub and Rockies House Sub:
SECTION 2.1 Organization and Qualification. Silver
Co. (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation; (ii) has all requisite corporate power and
authority to carry on its business as it is now conducted and
to own, lease and operate the properties it now owns, leases or
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operates at the places currently located and in the manner
currently used and operated and (iii) is duly qualified or
licensed and in good standing to do business in each
jurisdiction in which the properties owned, leased or operated
by it or the nature of the business conducted by it makes such
qualification or license necessary. Silver Co. has delivered
or made available to Rockies Sub true and complete copies of
its certificate of incorporation and bylaws, each as amended to
date and currently in effect (respectively, the "Silver Co.
Charter" and the "Silver Co. Bylaws").
SECTION 2.2 Authorization and Validity of Agreement.
The execution, delivery and performance of this Agreement by
Silver Co. and the consummation of the transactions
contemplated hereby have been duly and validly authorized by
the board of directors of Silver Co. and by the requisite vote
of the stockholders of Silver Co. entitled to vote thereon.
Silver Co. has full corporate power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder and to consummate the Merger and the other
transactions contemplated hereby. No other corporate
proceedings on the part of Silver Co. or any of its
subsidiaries are necessary to authorize the execution and
delivery of this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Silver Co. and, assuming
the due authorization, execution and delivery of this Agreement
by Rockies Sub and Rockies House Sub, constitutes a legal,
valid and binding obligation of Silver Co. enforceable against
it in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors'
rights generally or by principles governing the availability of
equitable remedies.
SECTION 2.3 Validity of Merger Consideration Shares.
The shares of Silver Co. Class B Common Stock to be issued to
Rockies Sub pursuant to the Merger, upon issuance and delivery
in accordance with the terms and conditions of this Agreement,
will be duly authorized, validly issued, fully paid and non-
assessable, and except as contemplated by this Agreement or the
definitive term sheet attached to the letter to Barry Diller
("Lasorda") from Rockies, dated August 24, 1995, as amended by
the letter to Lasorda, dated as of the date hereof, pursuant to
which Rockies and Lasorda have entered into certain agreements
with respect to the equity securities of Silver, all as
described therein (as amended, the "Term Sheet"), will be free
of any liens, claims, charges, security interests, pledges,
voting or stockholder agreements, encumbrances or equities of
any kind whatsoever, will not be issued in violation of any
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preemptive rights and will vest in Rockies Sub full rights with
respect thereto, including the right to vote such Merger
Consideration Shares on all matters properly presented to the
stockholders of Silver Co. or to consent to the taking of
certain actions, all to the extent set forth in the Silver Co.
Charter. The shares of Silver Co. Class B Common Stock to be
issued in the Merger will have identical rights, powers,
privileges and preferences as the Silver Co. Class B Common
Stock outstanding immediately prior to the Closing Date.
SECTION 2.4 Capitalization. As of the Closing Date,
the authorized capital stock of Silver Co. shall consist of (i)
1 share of Silver Co. Class A Common Stock, of which 1 share
shall be issued and outstanding and held beneficially and of
record by Arrow Holdings, LLC, a California limited liability
company ("Arrow") and (ii) 3,978,262 shares of Silver Co. Class
B Common Stock, of which 615,000 shares shall be issued and
outstanding and held beneficially and of record by Rockies Sub
(assuming the contribution of the Silver Option and cash equal
to the exercise price thereof pursuant to (and as defined in)
the Term Sheet); as of the Closing Date, no other shares of
capital stock of Silver Co. shall be issued and outstanding or
held by Silver Co. in its treasury. The respective rights,
preferences, privileges, limitations and restrictions of the
Silver Co. Class A Common Stock and the Silver Co. Class B
Common Stock shall be as set forth in the Silver Co. Charter.
Except pursuant to this Agreement and the transactions
contemplated by the Term Sheet, as of the Closing Date, there
shall be no outstanding or authorized subscriptions, options,
warrants, calls, rights, commitments or any other agreements of
any character to or by which Silver Co. will be a party or by
which it shall be bound which, directly or indirectly, will
obligate Silver Co. to issue, deliver or sell or cause to be
issued, delivered or sold any shares of capital stock or other
equity interests of Silver Co. or any securities convertible
into, or exercisable or exchangeable for, or evidencing the
right to subscribe for any such shares of capital stock or
other equity interests of Silver Co. or obligating Silver Co.
to grant, extend or enter into any such subscription, option,
warrant, call or right. All shares of Silver Co. Class A
Common Stock and Silver Co. Class B Common Stock subject to
issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they
are issuable, shall be duly authorized, validly issued, fully
paid and non-assessable and not subject to preemptive rights.
Other than as contemplated by the Term Sheet or the Silver Co.
Charter, as of the Closing Date, there shall be no obligations,
contingent or otherwise, of Silver Co. or any of its
subsidiaries to repurchase, redeem or otherwise acquire any
shares of Silver Co. Class A Common Stock or Silver Co. Class B
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Common Stock or the capital stock of any subsidiary or to
provide funds to make any material investment (in the form of a
loan, capital contribution or otherwise) in any such subsidiary
or any other entity other than guarantees of obligations of
subsidiaries entered into in the ordinary course of business.
SECTION 2.5 No Approvals or Notices Required; No
Conflict with Instruments. The execution and delivery by
Silver Co. of this Agreement do not, and the performance by
Silver Co. of its obligations hereunder and the consummation of
the transactions contemplated hereby, including the issuance of
the Merger Consideration Shares, will not:
(i) conflict with or violate the Silver Co.
Charter or the Silver Co. Bylaws or the charter or
bylaws of any subsidiary of Silver Co., in each case
as amended to date;
(ii) require any consent, approval, order or
authorization of or other action by any court,
administrative agency or commission or other
governmental authority or instrumentality, foreign,
United States federal, state or local (each such
entity a "Governmental Entity" and each such action a
"Governmental Consent") or any registration,
qualification, declaration or filing with or notice
to any Governmental Entity (a "Governmental Filing"),
in each case on the part of or with respect to Silver
Co., the absence or omission of which would, either
individually or in the aggregate, have a material
adverse effect on the transactions contemplated
hereby or on the business, assets, results of
operations or financial condition of Silver Co.,
except for (A) the filing of the Certificate of
Merger with the Delaware Secretary of State, (B) the
filing of the Articles of Merger with the Colorado
Secretary of State, and (C) the Governmental Filings
required pursuant to the pre-merger notification
requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR Act") and the
expiration or termination of any applicable waiting
period with respect to the Merger under the HSR Act;
(iii) require, on the part of Silver Co., any
consent by or approval of (a "Contract Consent") or
notice to (a "Contract Notice") any other person or
entity (other than a Governmental Entity), the
absence or omission of which would, either
individually or in the aggregate, have a material
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adverse effect on the transactions contemplated
hereby or on the business, assets, results of
operations or financial condition of Silver Co.;
(iv) conflict with, result in any violation or
breach of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any
obligation or the loss of any material benefit under
or the creation of any lien, security interest,
pledge, charge, claim, option, right to acquire,
restriction on transfer, voting restriction or
agreement, or any other restriction or encumbrance of
any nature whatsoever on any assets pursuant to (any
such conflict, violation, breach, default, right of
termination, cancellation or acceleration, loss or
creation, a "Violation") any "Contract" (which term
shall mean and include any note, bond, indenture,
mortgage, deed of trust, lease, franchise, permit,
authorization, license, contract, instrument,
employee benefit plan or practice, or other
agreement, obligation, commitment or concession of
any nature) to which Silver Co. is a party, by which
Silver Co. or any of its assets or properties is
bound or pursuant to which Silver Co. is entitled to
any rights or benefits, except for such Violations
which would not, either individually or in the
aggregate, have a material adverse effect on the
transactions contemplated hereby or on the business,
assets, results of operations or financial condition
of Silver Co.; or
(v) assuming that the Governmental Consents and
Governmental Filings specified in clause (ii) of this
Section 2.5 are obtained, made and given (and any
related waiting period is terminated or otherwise
expires), result in a Violation of, under or pursuant
to any law, rule, regulation, order, judgment or
decree applicable to Silver Co. or by which any of
its properties or assets are bound.
SECTION 2.6 Brokers or Finders. No agent, broker,
investment banker, financial advisor or other person or entity
is or will be entitled, by reason of any agreement, act or
statement by Silver Co. or any of its directors, officers,
employees or affiliates, to any financial advisory, broker's,
finder's or similar fee or commission, to reimbursement of
expenses or to indemnification or contribution in connection
with any of the transactions contemplated by this Agreement,
except as set forth in Schedule 2.6 hereto.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ROCKIES SUB
AND ROCKIES HOUSE SUB
Each of Rockies Sub and Rockies House Sub hereby
makes the following representations and warranties to Silver
Co.:
SECTION 3.1 Organization and Qualification. Each of
Rockies Sub and Rockies House Sub (i) is a corporation duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation; (ii) has all
requisite corporate power and authority to carry on its
business as it is now conducted and to own, lease and operate
the properties it now owns, leases or operates at the places
currently located and in the manner currently used and operated
and (iii) is duly qualified or licensed and in good standing to
do business in each jurisdiction in which the properties owned,
leased or operated by it or the nature of the business
conducted by it makes such qualification or license necessary.
Each of Rockies Sub and Rockies House Sub has delivered or made
available to Silver Co. true and complete copies of its
certificate of incorporation and bylaws, each as amended to
date and currently in effect (respectively, the "Rockies Sub
Charter," the "Rockies House Sub Charter," the "Rockies Sub
Bylaws" and the "Rockies House Sub Bylaws.")
SECTION 3.2 Authorization and Validity of Agreement.
The execution, delivery and performance of this Agreement by
each of Rockies Sub and Rockies House Sub and the consummation
of the transactions contemplated hereby have been duly and
validly authorized by the board of directors of each of Rockies
Sub and Rockies House Sub and by the stockholder(s) of Rockies
House Sub. Each of Rockies Sub and Rockies House Sub has full
corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and to
consummate the Merger and the other transactions contemplated
hereby. No other corporate proceedings on the part of either
Rockies Sub or Rockies House Sub or any of their respective
subsidiaries are necessary to authorize the execution and
delivery of this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by each of Rockies Sub and
Rockies House Sub and, assuming the due authorization,
execution and delivery of this Agreement by Silver Co.,
constitutes a legal, valid and binding obligation of each of
Rockies Sub and Rockies House Sub, enforceable against it in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or
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other similar laws affecting creditors' rights generally or by
principles governing the availability of equitable remedies.
SECTION 3.3 Capitalization; Validity of Stock. The
authorized capital stock of Rockies House Sub consists solely
of 5000 shares of common stock, par value $1.00 per share (the
"Rockies House Sub Common Stock"), of which 1000 shares of
Rockies House Sub Common Stock are issued and outstanding, all
of which are held of record and owned beneficially by Rockies
Sub. No shares are reserved for issuance upon exercise of
outstanding stock options, no shares are held by Rockies House
Sub in its treasury, and no shares are held by any subsidiary
of Rockies House Sub. The shares of Rockies House Sub Common
Stock held by Rockies Sub are duly authorized, validly issued,
fully paid and non-assessable, and are held by Rockies Sub free
of any liens, claims, charges, security interests, pledges,
voting or stockholder agreements, encumbrances or equities of
any kind whatsoever. Such shares were not issued in violation
of any preemptive rights.
SECTION 3.4 Assets of Rockies House Sub. Rockies
House Sub's assets consist solely of the House Shares. Rockies
House Sub is the record and beneficial owner of the House
Shares, and such shares are held by Rockies House Sub free of
any liens, claims, charges, security interests, pledges, voting
or stockholder agreements, encumbrances or equities, other than
pursuant to this Agreement, the Term Sheet and certain voting
restrictions contained in the Stipulation and Agreement of
Compromise, Settlement and Release entered into in the action
entitled 7547 Corp. v. Liberty Media Corp., et al. in the
Delaware Chancery Court and approved by such court on January
27, 1995 (the "Sec. 203 Settlement Agreement"). Except for
this Agreement, the Term Sheet, certain voting restrictions
contained in the Sec. 203 Settlement Agreement and the
transactions contemplated hereby and thereby, there are no
agreements, arrangements, warrants, options, puts, calls,
rights or other commitments or understandings of any character
to which Rockies House Sub, Rockies Sub or Rockies is a party
or by which any of them is bound and relating to the sale,
purchase, redemption, conversion, exchange, registration,
voting or transfer of any of the House Shares. Following the
Effective Time, the Surviving Corporation will hold the House
Shares, free and clear of any liens, claims, charges, security
interests, pledges, voting or stockholder agreements,
encumbrances or options (other than any of the foregoing
created by Silver Co. or the Surviving Corporation), and will
have full rights of ownership with respect to the House Shares,
including the right to vote the House Shares on all matters
properly presented to the stockholders of House to the extent
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and in the manner set forth in the certificate of incorporation
of House as in effect on the date hereof.
SECTION 3.5 Liabilities of Rockies House Sub. At
the Closing, Rockies House Sub will have no liabilities,
whether contingent or fixed or otherwise (other than as may
arise pursuant to this Agreement or the transactions
contemplated hereby). Since its formation, Rockies House Sub
has conducted no business other than the holding of the House
Shares.
SECTION 3.6 No Approvals or Notices Required; No
Conflict with Instruments. The execution and delivery by each
of Rockies Sub and Rockies House Sub of this Agreement do not,
and the performance by each of Rockies Sub and Rockies House
Sub of their respective obligations hereunder and the
consummation of the transactions contemplated hereby will not:
(i) conflict with or violate the Rockies Sub
Charter, the Rockies House Sub Charter, the Rockies
Sub Bylaws or the Rockies House Sub Bylaws;
(ii) require any Governmental Consent or
Governmental Filing, in each case on the part of or
with respect to each of Rockies Sub and any
subsidiary of Rockies Sub, the absence or omission of
which would, either individually or in the aggregate,
have a material adverse effect on the transactions
contemplated hereby, except for (A) the filing of the
Articles of Merger with the Colorado Secretary of
State and (B) the Governmental Filings required
pursuant to the pre-merger notification requirements
of the HSR Act and the expiration or termination of
any applicable waiting period with respect to the
Merger under the HSR Act;
(iii) require, on the part of Rockies Sub,
Rockies House Sub or House any stockholder approval
that has not been obtained;
(iv) except for any required consent or waiver
under the Second Amended and Restated Credit
Agreement, dated as of August 30, 1994 (as amended by
the First Amendment thereto, dated as of March 29,
1995, and as further amended by the Second Amendment
thereto, dated as of June 28, 1995 and by the Third
Amendment thereto, dated as of September 28, 1995)
among House and certain of its subsidiaries, LTCB
Trust Company as Agent, and the banks that are
signatories thereto (the "House Credit Agreement"),
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require, on the part of Rockies Sub or any subsidiary
of Rockies Sub any Contract Consent or Contract
Notice, the absence or omission of which would,
either individually or in the aggregate, have a
material adverse effect on the transactions
contemplated hereby;
(v) except for any required consent or waiver
under the House Credit Agreement, conflict with or
result in any Violation of any Contract to which
Rockies Sub or any subsidiary of Rockies Sub is a
party, or by which Rockies Sub or any subsidiary of
Rockies Sub, or any of their respective assets or
properties is bound, except for such Violations which
would not, either individually or in the aggregate,
have a material adverse effect on the transactions
contemplated hereby; or
(vi) assuming that the Governmental Filings
specified in clause (ii) of this Section 3.6 are
obtained, made and given, result in a Violation of,
under or pursuant to any law, rule, regulation,
order, judgment or decree applicable to Rockies Sub
or any subsidiary of Rockies Sub or by which any of
their respective properties or assets are bound,
except for such Violations which would not, either
individually or in the aggregate, have a material
adverse effect on the transactions contemplated
hereby.
SECTION 3.7 Brokers or Finders. No agent, broker,
investment banker, financial advisor or other person or entity
is or will be entitled, by reason of any agreement, act or
statement by Rockies Sub or Rockies House Sub, any of their
respective subsidiaries, directors, officers, employees or
affiliates, to any financial advisory, broker's, finder's or
similar fee or commission, to reimbursement of expenses or to
indemnification or contribution in connection with any of the
transactions contemplated by this Agreement.
ARTICLE IV
COVENANTS AND OTHER AGREEMENTS
SECTION 4.1 Reasonable Efforts. Subject to the
terms and conditions of this Agreement and applicable law, each
of the parties shall use its reasonable efforts to take, or
cause to be taken, all actions, and do, or cause to be done,
all things reasonably necessary, proper or advisable to
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consummate and make effective the transactions contemplated by
this Agreement as soon as reasonably practicable, including
such actions or things as either party hereto may reasonably
request in order to cause any of the conditions to such other
party's obligation to consummate such transactions specified in
Article V to be fully satisfied. Without limiting the
generality of the foregoing, the parties shall (and shall cause
their respective subsidiaries, and use their reasonable efforts
to cause their respective affiliates, directors, officers,
employees, agents, attorneys, accountants and representatives,
to) consult and fully cooperate with and provide reasonable
assistance to each other in (1) obtaining all necessary
Contract Consents and Governmental Consents, and giving all
necessary Contract Notices to and making all necessary
Governmental Filings and all other necessary filings with and
applications and submissions to any Governmental Entity or
other person or entity; (2) filing all applicable Pre-Merger
Notification and Report Forms required under the HSR Act as a
result of the transactions contemplated by this Agreement and
promptly complying with any requests for additional information
and documentary material that may be requested pursuant to the
HSR Act; (3) lifting any permanent or preliminary injunction or
restraining order or other similar order issued or entered by
any court or Governmental Entity (an "Injunction") of any type
referred to in Section 5.1; (4) providing all such information
about such party, its subsidiaries and its officers, directors,
partners and affiliates and making all applications and filings
as may be necessary or reasonably requested in connection with
any of the foregoing; and (5) in general, consummating and
making effective the transactions contemplated hereby;
provided, however, that in order to obtain any consent,
approval, waiver, license, permit, authorization, registration,
qualification or other permission or action or the lifting of
any Injunction referred to in clauses (i) and (iii) of this
sentence, no party shall be required to (x) pay any
consideration, to divest itself of any of, or otherwise
rearrange the composition of, its assets or to agree to any
conditions or requirements which are materially adverse or
burdensome or (y) amend, or agree to amend, in any material
respect any Contract. Prior to making any application to or
filing with any Governmental Entity or other person or entity
in connection with this Agreement, each of Silver Co. and
Rockies Sub shall provide the other party with drafts thereof
and afford the other party a reasonable opportunity to comment
on such drafts.
SECTION 4.2 Public Announcements. Each party agrees
that it shall not, and shall use its reasonable efforts to
cause its affiliates, directors, officers, employees and
authorized representatives not to, issue any press release,
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make any public announcement or furnish any written statement
to its employees or stockholders generally concerning the
transactions contemplated by this Agreement without the consent
of the other party (which consent shall not be unreasonably
withheld), except to the extent required by applicable law or
any listing agreement with or other applicable requirements of
a national securities exchange or the applicable requirements
of the NASD (and in such case such party shall, to the extent
consistent with timely compliance with such requirement,
consult with the other party prior to making the required
release, announcement or statement).
SECTION 4.3 Confidentiality. Each party shall, and
shall use its reasonable efforts to cause its officers,
employees and authorized representatives to, (i) hold in
confidence all confidential information obtained by it from the
other party or such other party's officers, employees or
authorized representatives pursuant to this Agreement (unless
such information is or becomes publicly available or readily
ascertainable from public or published information or trade
sources through no wrongful act of such first party) and
(ii) use all such data and information solely for the purpose
of consummating the transactions contemplated hereby, except,
in either case, as may be otherwise required by law or legal
process or as may be necessary or appropriate in connection
with the enforcement of, or any litigation concerning, this
Agreement. In the event a party is required by applicable law
or legal process to disclose any confidential information of
the other party, such first party will provide the other party
with prompt notice thereof to enable such other party to seek
an appropriate protective order. In the event this Agreement
is terminated, each party shall promptly return, if so
requested by the other party, all nonpublic documents obtained
from such other party in connection with the transactions
contemplated hereby and any copies thereof which may have been
made by such first party and shall use its reasonable efforts
to cause its officers, employees and authorized representatives
to whom such documents were furnished promptly to return such
documents and any copies thereof any of them may have made.
SECTION 4.4 House Shares. Silver Co. shall not,
directly or indirectly, transfer, assign, sell, pledge or
otherwise encumber or authorize or propose the transfer,
assignment, sale, pledge or encumbrance of any of the House
Shares acquired or to be acquired by it pursuant to the Merger
except in connection with the consummation of the Exchange.
SECTION 4.5 Notification of Certain Matters.
Rockies Sub and/or Rockies House Sub shall give prompt notice
to Silver Co., and Silver Co. shall give prompt notice to
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Rockies Sub, of the occurrence, or failure to occur, of any
event, which occurrence or failure to occur would be likely to
cause (a) any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect,
(b) any material failure of Silver Co. or Rockies Sub and
Rockies House Sub, as the case may be, or of any officer,
director, employee or agent thereof, to comply with or satisfy
any covenant or agreement to be complied with or satisfied by
it under this Agreement or (c) the failure to be satisfied of
any condition to the parties' respective obligations to
consummate the transactions contemplated hereby and by the
Exchange Agreement. Notwithstanding the foregoing, the
delivery of any notice pursuant to this Section shall not limit
or otherwise affect the remedies available hereunder to the
party receiving such notice.
SECTION 4.6 No Amendment of Exchange Agreement.
Silver Co. shall not amend or otherwise alter or waive any of
its rights or obligations (including any conditions on its
obligations to consummate the transactions contemplated thereby
or any amendment to Silver's obligations to consummate the
transactions contemplated thereby) under the Exchange Agreement
in any material respect without the prior written consent of
Rockies Sub.
ARTICLE V
CONDITIONS
SECTION 5.1 Conditions Precedent to the Obligations
of Silver Co., Rockies Sub and Rockies House Sub. The
obligations of each of Silver Co., Rockies Sub and Rockies
House Sub to consummate the transactions contemplated by this
Agreement are subject to the satisfaction at or prior to the
Closing Date of each of the following conditions, any or all of
which may be waived in whole or in part by the parties, to the
extent permitted by applicable law:
(a) Absence of Injunctions. No Injunction or other
legal restraint or prohibition preventing consummation of the
transactions contemplated hereby as provided herein shall be in
effect.
(b) No Proceedings or Adverse Enactments. There
shall not have been any action taken, or any statute, rule,
regulation, order, judgment or decree enacted, promulgated,
entered, issued or enforced by any Governmental Entity, and
there shall be no action, suit, proceeding or investigation
pending or threatened which makes the transactions contemplated
-15-
by this Agreement illegal or imposes, or is reasonably likely
to result in the imposition of, material damages or penalties
in connection therewith.
(c) HSR Act. All applicable waiting periods under
the HSR Act shall have expired or been terminated without
commencement of litigation by the appropriate governmental
enforcement agency to restrain the transactions contemplated
hereby.
(d) Receipt of Governmental Approvals and Consents.
All Governmental Consents as are required in connection with
the consummation of the transactions contemplated hereby shall
have been obtained and shall be in full force and effect and
all Governmental Filings as are required in connection with the
consummation of such transactions shall have been made, and all
waiting periods, if any, applicable to the consummation of such
transactions imposed by any Governmental Entity shall have
expired, other than those which, if not obtained, in force or
effect, made or expired (as the case may be) would not, either
individually or in the aggregate, have a material adverse
effect on the transactions contemplated hereby.
(e) Satisfaction of Conditions to the Exchange. All
of the conditions to the respective parties' obligations to
consummate the Exchange as set forth in Article V of the
Exchange Agreement shall have been satisfied without regard to
any waiver thereof, except for those conditions which by their
nature may only be satisfied as of the closing of the Exchange
and any waivers permitted by Section 4.6 hereof.
SECTION 5.2 Conditions Precedent to the Obligations
of Rockies Sub and Rockies House Sub. The obligation of each
of Rockies Sub and Rockies House Sub to consummate the
transactions contemplated by this Agreement is also subject to
the satisfaction, at or prior to the Closing Date, of each of
the following conditions, any or all of which may be waived in
whole or in part by Rockies Sub or Rockies House Sub, to the
extent permitted by applicable law:
(a) Accuracy of Representations and Warranties. All
representations and warranties of Silver Co. contained in this
Agreement shall, if specifically qualified by materiality, be
true and correct and, if not so qualified, be true and correct
in all material respects in each case as of the Closing Date
(except to the extent such representations and warranties speak
as of a specified earlier date), except for changes expressly
permitted or contemplated by this Agreement.
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(b) Performance of Agreements. Silver Co. shall
have performed in all material respects all obligations and
agreements, and complied in all material respects with all
covenants and conditions, contained in this Agreement to be
performed or complied with by it at or prior to the Closing
Date.
(c) Silver Co. Capital Contribution. The capital
contributions to Silver Co. contemplated by the first two
paragraphs of the section entitled "Formation of Silver
Company" of the Term Sheet shall have been consummated.
(d) Capitalization of Silver Co. and Validity of
Stock Prior to Closing. Immediately prior to the Closing, (i)
one share of Silver Co. Class A Common Stock shall be issued
and outstanding and held beneficially and of record by Arrow
and 615,000 shares shall be reserved for issuance upon
conversion of outstanding shares of Silver Co. Class B Common
Stock and (ii) 615,000 shares of Silver Co. Class B Common
Stock shall be issued and outstanding and held beneficially and
of record by Rockies Sub; no other shares of capital stock of
Silver Co. shall be authorized for issuance and no other shares
of capital stock of Silver Co. shall be outstanding or reserved
for issuance, and no shares shall be held by Silver Co. in its
treasury, except as specifically contemplated by this
Agreement.
(e) No Impediments to the Exchange. There shall be
no circumstance or condition as of the Closing, in the good
faith judgment of Rockies Sub, that will prevent or impede the
consummation of the Exchange immediately following the Closing.
(f) No Proceedings or Adverse Enactments Affecting
Merger Consideration Shares. There shall not have been any
action taken, or any statute, rule, regulation, order, judgment
or decree enacted, promulgated, entered, issued or enforced by
any Governmental Entity, and there shall be no action, suit or
proceeding pending or threatened which would, as of or after
the Closing, impose material limitations on the ability of
Rockies Sub effectively to exercise full rights of ownership of
the Merger Consideration Shares (including, to the extent such
Merger Consideration Shares have voting rights, the right to
vote such shares on all matters properly presented to the
stockholders of Silver Co.).
(g) Lasorda Management Role. Lasorda shall be the
Chief Executive Officer and/or Chairman of the Board and/or
President of Silver and shall be the Chairman of the Board of
House.
-17-
(h) Officer's Certificates. Rockies Sub shall have
received a certificate of Silver Co. dated the Closing Date,
signed by an executive officer of Silver Co. certifying that
the conditions set forth in Sections 5.1(e), 5.2 (a) and 5.2(b)
have been satisfied, which certification shall have been given
by such officers after due inquiry.
(i) Other Deliveries. All other documents and
instruments required under this Agreement to have been
delivered by Silver Co. to Rockies Sub or Rockies House Sub at
or prior to the Closing or as Rockies Sub or Rockies House Sub
shall have reasonably requested, shall have been delivered by
Silver Co.
(j) No Adverse Change or Development. Except with
respect to the Reserved Matters (as defined below), subsequent
to August 31, 1995, there shall not have occurred any change or
development in or affecting the assets, liabilities, business,
operations, or financial condition of Silver which in any case
or in the aggregate would, in the reasonable judgment of the
Board of Directors of Rockies, represent a material adverse
effect upon Silver and its subsidiaries, taken as a whole. For
purposes of this paragraph (j), the term "Reserved Matters"
shall mean any information relating to the assets, liabilities,
business operations or financial condition of Silver which is
contained in, is reasonably discernable from, results from, or
which is or has become known to, as applicable, any of the
following:
(i) any reports or statements filed by Silver
with the SEC with respect to periods subsequent
to August 31, 1995 and prior to the date of this
Agreement;
(ii) any information delivered to Rockies or
its representatives prior to the date of this
Agreement, in connection with any investigation,
discussions, reviews or analyses of the business
and affairs of Silver conducted by Rockies or
its representatives, or otherwise; and
(iii) with respect to any current or recurring
negative financial or operating trend,
information with respect to Silver, any
continuance (including any continued or
accelerated deterioration) thereof, beyond the
date hereof, which information is contained in
the Reserved Matters referred to in clauses (i)
and (ii) above.
-18-
(k) Audited Financial Statements. Except to the
extent contained in the matters referred to in clauses (i) and
(ii) of the Reserved Matters, the audited financial statements
of Silver, as of and for the fiscal year ended August 31, 1995,
contained in the Annual Report on Form 10-K of Silver for the
fiscal year ended August 31, 1995, as amended, shall have been
prepared in accordance with generally accepted accounting
principles, applied on a consistent basis throughout the fiscal
year ended August 31, 1995 (except as may be indicated in the
notes thereto), and shall have fairly presented the
consolidated financial position of Silver and its consolidated
subsidiaries as of August 31, 1995 and the consolidated results
of its operations and cash flows for the fiscal year ended
August 31, 1995, except for such failures to have been prepared
and/or to have fairly presented the foregoing as do not,
individually or in the aggregate, represent a material adverse
effect on the assets, liabilities, business, operations or
financial condition of Silver and its subsidiaries, taken as a
whole.
(l) Consummation of SP Merger. The merger between
Savoy Pictures Entertainment, Inc. ("Savoy") and a wholly-owned
subsidiary of Silver (the "SP Merger") shall have been
consummated in accordance with that certain Agreement and Plan
of Merger, dated as of the date hereof, between Silver and
Savoy (the "SP Merger Agreement") or, in the event the SP
Merger Agreement has previously been terminated, the failure to
obtain a Governmental Consent of the FCC required in connection
with the consummation of the SP Merger shall not have been a
material factor in the failure of the SP Merger to have been
consummated.
SECTION 5.3 Conditions Precedent to the Obligations
of Silver Co. The obligation of Silver Co. to consummate the
transactions contemplated by this Agreement is also subject to
the satisfaction, at or prior to the Closing Date, of each of
the following conditions, any or all of which may be waived in
whole or in part by Silver Co., to the extent permitted by
applicable law:
(a) Accuracy of Representations and Warranties. All
representations and warranties of Rockies Sub and Rockies House
Sub contained in this Agreement shall, if specifically
qualified by materiality, be true and correct and, if not so
qualified, be true and correct in all material respects in each
case as of the date of this Agreement and (except to the extent
such representations and warranties speak as of a specified
earlier date) on and as of the Closing Date, with the same
force and effect as though made on and as of the Closing Date,
-19-
except for changes expressly permitted or contemplated by this
Agreement.
(b) Performance of Agreements. Each of Rockies Sub
and Rockies House Sub shall have performed in all material
respects all obligations and agreements, and complied in all
material respects with all covenants and conditions, contained
in this Agreement to be performed or complied with by them at
or prior to the Closing Date.
(c) Officer's Certificates. Silver Co. shall have
received a certificate of each of Rockies Sub and Rockies House
Sub dated the Closing Date, signed by an executive officer of
Rockies Sub or Rockies House Sub, as the case may be,
certifying that the conditions set forth in Sections 5.3 (a) or
(b) have been satisfied, which certification shall have been
given by such officers after due inquiry.
(d) Other Deliveries. All other documents and
instruments required under this Agreement to have been
delivered by Rockies Sub or Rockies House Sub to Silver Co. at
or prior to the Closing, or as Silver Co. shall reasonably
request, shall have been delivered by Rockies Sub or Rockies
House Sub.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination and Abandonment. This
Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing,
(i) by mutual written consent of Rockies Sub and Silver Co.; or
(ii) by either Rockies Sub or Silver Co.: (A) if the Closing
shall not have occurred before May 30, 1996 (provided, that if
the Merger shall not have been consummated as of such date as a
result of the failure to have been satisfied of the condition
contained in Section 5.2(l) and such condition, in the
reasonable opinion of the parties, is likely to have been
satisfied on or prior to August 30, 1996, then such date shall
be extended to August 30, 1996); provided that the right to
terminate this Agreement pursuant to this clause (ii)(A) shall
not be available to any party whose failure to perform any of
its obligations under this Agreement required to be performed
by it at or prior to the Closing has resulted in the failure of
the Closing to occur before such date, (B) if there has been a
material breach by the other party of any of its
representations, warranties, covenants or agreements contained
in this Agreement and such breach shall not have been cured
-20-
within five business days after written notice thereof shall
have been received by the party alleged to be in breach or
(C) if any court of competent jurisdiction or other competent
Governmental Entity shall have issued an order, decree or
ruling or taken any other action permanently restraining,
enjoining or otherwise prohibiting any of the transactions
contemplated by this Agreement and such order, decree, ruling
or other action shall have become final and nonappealable.
SECTION 6.2 Effect of Termination. In the event of
any termination of this Agreement by Rockies Sub, Rockies House
Sub or Silver Co. pursuant to Section 6.1, this Agreement
forthwith shall become void, and there shall be no liability or
obligation on the part of any party hereto, except that
Sections 4.3 and 7.3 shall survive the termination of this
Agreement and except that nothing herein will relieve a party
from liability for any breach of this Agreement occurring prior
to such termination.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Failure to Consummate the Exchange. In
the event that the Merger is consummated, but, for any reason
whatsoever, the Exchange is not consummated immediately
thereafter and on the same date in a manner reasonably
satisfactory (and in accordance with the Exchange Agreement) to
Rockies Sub and its counsel, then, notwithstanding any
provision of this Agreement apparently to the contrary, (i)
Rockies Sub and Rockies House Sub shall have no further
obligations under this Agreement (except as provided in Section
6.2) and (ii) in addition to any other rights or remedies which
Rockies Sub and Rockies House Sub may have pursuant hereto or
at law or in equity, Rockies Sub, for itself and on behalf of
Rockies House Sub, shall have the unconditional right to
rescind the transactions consummated pursuant to this
Agreement, in which event Silver Co. shall take all such
actions as may be necessary to make such rescission fully
effective, including, but not limited to, upon the request of
Rockies Sub, transferring the House Shares held by the
Surviving Corporation to Rockies Sub upon delivery by Rockies
Sub of the Merger Consideration Shares.
SECTION 7.2 Further Assurances. From and after the
Closing Date, each of Silver Co., Rockies Sub and Rockies House
Sub shall, at any time and from time to time, make, execute and
deliver, or cause to be made, executed and delivered, such
instruments, agreements, consents and assurances and take or
-21-
cause to be taken all such actions as may reasonably be
requested by any other party hereto to effect the purposes and
intent of this Agreement.
SECTION 7.3 Expenses. Except as otherwise provided
herein, all costs and expenses, including, without limitation,
fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing
shall occur.
SECTION 7.4 Notices. All notices, requests,
demands, waivers and other communications required or permitted
to be given under this Agreement shall be in writing and shall
be deemed to have been duly given on (i) the day on which
delivered personally or by telecopy (with prompt confirmation
by mail) during a business day to the appropriate location
listed as the address below, (ii) three business days after the
posting thereof by United States registered or certified first
class mail, return receipt requested, with postage and fees
prepaid or (iii) one business day after deposit thereof for
overnight delivery. Such notices, requests, demands, waivers
or other communications shall be addressed as follows:
(a) if to Silver Co. to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Pamela S. Seymon, Esq.
Telecopier No.: 212-403-2000
(b) if to Rockies Sub or Rockies House Sub, to such
party, care of:
Liberty Media Corporation
8101 East Prentice Avenue, Suite 500
Englewood, Colorado 80111
Attention: Peter M. Barton, President
Telecopier No.: (303) 721-5415
with a copy to:
Baker & Botts, L.L.P.
885 Third Ave.
New York, NY 10022-4834
Attention: Frederick McGrath, Esq.
Telecopier: (212) 705-5125
-22-
or to such other person or address as any party shall specify
by notice in writing to the other party.
SECTION 7.5 Entire Agreement. This Agreement
(including the documents referred to herein) constitutes the
entire agreement with respect to the subject matter hereof
between the parties and supersedes all prior agreements and
understandings, oral and written, between the parties with
respect to the subject matter hereof.
SECTINO 7.6 Assignment; Binding Effect; Benefit.
Neither this Agreement nor any of the rights, benefits or
obligations hereunder may be assigned by any party without the
prior written consent of the other parties hereto. Subject to
the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and
their respective successors and assigns. Nothing in this
Agreement, expressed or implied, is intended to confer on any
person other than the parties or their respective successors
and assigns, any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
SECTION 7.7 Amendment. This Agreement may be
amended prior to the Effective Time by Silver Co. and Rockies
Sub, by action taken by their respective Boards of Directors at
any time before or after approval of the Merger by the
stockholders of Silver Co. and Rockies House Sub, but after any
such approval, no amendment shall be made which by law requires
further approval by such stockholders without such further
approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of Silver Co.
and Rockies Sub.
SECTION 7.8 Extension; Waiver. Rockies Sub or
Silver Co. may, to the extent legally allowed, (i) extend the
time specified herein for the performance of any of the
obligations of the other party, (ii) waive any inaccuracies in
the representations and warranties of the other party contained
herein or in any document delivered pursuant hereto,
(iii) waive compliance by the other party with any of the
agreements or covenants of such other party contained herein or
(iv) waive any condition to such waiving party's obligation to
consummate the transactions contemplated hereby or to any of
such waiving party's other obligations hereunder. Any
agreement on the part of a party hereto to any such extension
or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. Any such extension
or waiver by any party shall be binding on such party but not
on the other party entitled to the benefits of the provision of
this Agreement affected unless such other party also has agreed
to
-23-
such extension or waiver. No such waiver shall constitute a
waiver of, or estoppel with respect to, any subsequent or other
breach or failure to comply strictly with the provisions of
this Agreement. The failure of any party to insist on strict
compliance with this Agreement or to assert any of its rights
or remedies hereunder or with respect hereto shall not
constitute a waiver of such rights or remedies. Whenever this
Agreement requires or permits consent or approval by any party,
such consent or approval shall be effective if given in writing
in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 7.8.
SECTION 7.9 Survival. The representations and
warranties made by Silver Co. in Sections 2.1, 2.2, 2.4, 2.5
and 2.6 shall survive the Closing until the expiration of the
statute of limitations period applicable to claims that may be
asserted against Silver Co. in respect of the matters covered
thereby; the representations and warranties made by each of
Rockies Sub and Rockies House Sub in Sections 3.1, 3.2, 3.4,
3.5, 3.6 and 3.7 shall survive the Closing until the expiration
of the statute of limitations period applicable to claims that
may be asserted against each of Rockies Sub and Rockies House
Sub in respect of the matters covered thereby; the
representations and warranties of Silver Co. in Section 2.3 and
of each of Rockies Sub and Rockies House Sub in Section 3.3
shall survive indefinitely. No other representations or
warranties of the parties contained in this Agreement shall
survive the Closing. In addition, the covenants and agreements
in Sections 4.3, 4.4, and 4.6 and Article VII shall also
survive the Closing until the expiration of the statute of
limitations period applicable to claims that may be asserted in
respect of the matters covered thereby.
SECTION 7.10 Interpretation. When a reference is
made in this Agreement to Sections, Articles or Schedules, such
reference shall be to a Section, Article or Schedule (as the
case may be) of this Agreement unless otherwise indicated.
When a reference is made in this Agreement to a "party" or
"parties", such reference shall be to a party or parties to
this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the
words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words
"without limitation". The use of any gender herein shall be
deemed to be or include the other genders and the use of the
singular herein shall be deemed to be or include the plural
(and vice versa), wherever appropriate. The use of the words
"hereof", "herein", "hereunder" and words of similar import
-24-
shall refer to this entire Agreement, and not to any particular
article, section, subsection, clause, paragraph or other
subdivision of this Agreement, unless the context clearly
indicates otherwise.
SECTION 7.11 Severability. If any provision of this
Agreement or the application thereof to any person or
circumstance is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions
hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect
and shall in no way be affected, impaired or invalidated
thereby, provided that, if any provision hereof or the
application thereof shall be so held to be invalid, void or
unenforceable by a court of competent jurisdiction, then such
court may substitute therefor a suitable and equitable
provision in order to carry out, so far as may be valid and
enforceable, the intent and purpose of the invalid, void or
unenforceable provision. To the extent that any provision
shall be judicially unenforceable in any one or more states,
such provision shall not be affected with respect to any other
state, each provision with respect to each state being
construed as several and independent.
SECTION 7.12 Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed to be
an original, and all of which together shall be deemed to be
one and the same instrument.
SECTION 7.13 Applicable Law. This Agreement and the
legal relations between the parties shall be governed by and
construed in accordance with the laws of the State of Delaware,
without regard to the conflict of laws rules thereof.
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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement and Plan of Merger as of the date first above
written.
SILVER MANAGEMENT COMPANY
/s/ Barry Diller
By: Barry Diller
Title: President
LIBERTY PROGRAM INVESTMENTS, INC.
/s/ Robert R. Bennett
By: Robert R. Bennett
Title: Executive Vice President
LIBERTY HSN, INC.
/s/ Robert R. Bennett
By: Robert R. Bennett
Title: Executive Vice President
-26-
EXHIBIT 6
EXCHANGE AGREEMENT
DATED AS OF NOVEMBER 27, 1995
BY AND BETWEEN
SILVER KING COMMUNICATIONS, INC.
AND
SILVER MANAGEMENT COMPANY
TABLE OF CONTENTS
Page
ARTICLE I
SALE AND EXCHANGE OF SHARES................ 2
SECTION 1.1 Exchange of Shares......................... 2
SECTION 1.2 Closing.................................... 2
ARTICLE II
REPRESENTATION AND WARRANTIES OF SILVER....... 3
SECTION 2.1 Organization and Qualification............. 3
SECTION 2.2 Authorization and Validity of
Agreement................................ 3
SECTION 2.3 Validity of Silver Shares, etc............. 4
SECTION 2.4 Capitalization............................. 4
SECTION 2.5 No Approvals of Notices Required; No
Conflict with Instruments................ 6
SECTION 2.6 DGCL Sec. 203.............................. 8
SECTION 2.7 Opinion of Advisor......................... 8
SECTION 2.8 Broker or Finders.......................... 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SILVER CO..... 9
SECTION 3.1 Organization and Qualification............. 9
SECTION 3.2 Authorization and Validity
of Agreement............................. 10
SECTION 3.3 Ownership and Validity of House
Shares................................... 10
SECTION 3.4 No Approvals or Notices Required; No Conflict
with Instruments......................... 10
SECTION 3.5 Brokers or Finders......................... 11
ARTICLE IV
COVENANTS AND OTHER AGREEMENTS............ 12
SECTION 4.1 Silver Stockholders Meeting................ 12
SECTION 4.2 Proxy Statement............................ 12
SECTION 4.3 Reasonable Efforts......................... 13
SECTION 4.4 Public Announcements....................... 14
SECTION 4.5 Confidentiality............................ 14
-i-
Page
SECTION 4.6 Merger Agreement........................... 15
SECTION 4.7 Notification of Certain Matters............ 15
ARTICLE V
CONDITIONS PRECEDENT............... 16
SECTION 5.1 Conditions Precedent to the Obligations of
Silver and Silver Co..................... 16
(a) Absence of Injunctions................ 16
(b) No Proceedings or Adverse Enactments.. 16
(c) Stockholder Approvals................. 16
(d) Consummation of the Merger............ 16
(e) HSR Act............................... 16
(f) Receipt of Governmental Approvals
and Consents........................ 17
SECTION 5.2 Conditions of Precedent to the
Obligations of Silver Co................. 17
(a) Accuracy of Representations and
Warranties.......................... 17
(b) Performance of Agreements............. 17
(c) No Proceedings or Adverse Enactments
Affecting Silver Shares............. 17
(d) Control of Silver..................... 18
(e) Officer's Certificates................ 18
(f) Other Deliveries...................... 18
(g) Lasorda Management Role............... 18
SECTION 5.3 Conditions Precedent to the Obligations
of Silver................................ 18
(a) Accuracy of Representations and
Warranties.......................... 18
(b) Performance of Agreements............. 18
(c) Officer's Certificates................ 18
(d) Other Deliveries...................... 19
(e) Lasorda Management Role............... 19
(f) No Adverse Change or Development...... 19
(g) Audited Financial Statements.......... 20
ARTICLE VI
TERMINATION................... 21
SECTION 6.1 Termination and Abandonment................ 21
SECTION 6.2 Effect of Termination...................... 21
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Page
ARTICLE VII
MISCELLANEOUS.................. 21
SECTION 7.1 Further Assurances......................... 21
SECTION 7.2 Expenses................................... 22
SECTION 7.3 Notices.................................... 22
SECTION 7.4 Entire Agreement........................... 23
SECTION 7.5 Assignment; Binding Effect; Benefit........ 23
SECTION 7.6 Amendment.................................. 23
SECTION 7.7 Extension; Waiver.......................... 23
SECTION 7.8 Survival................................... 24
SECTION 7.9 Interpretation............................. 24
SECTION 7.10 Severability............................... 25
SECTION 7.11 Counterparts............................... 25
SECTION 7.12 Applicable Law............................. 25
-iii-
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT, dated as of November 27, 1995, by
and between SILVER KING COMMUNICATIONS, INC., a Delaware
corporation ("Silver"), and SILVER MANAGEMENT COMPANY, a
Delaware corporation ("Silver Co.").
RECITALS:
WHEREAS, upon consummation of the transactions
contemplated by the Agreement and Plan of Merger (the "Merger
Agreement"), dated the date hereof by and among Silver Co.,
Liberty Program Investments, Inc., a Wyoming corporation, and
Liberty HSN, Inc., a Colorado corporation ("Rockies House
Sub"), pursuant to which Rockies House Sub will be merged with
and into Silver Co. (the "Merger"), Silver Co. will own
17,566,702 shares of the Common Stock, par value $.01 per share
(the "House Common Stock"), of Home Shopping Network, Inc., a
Delaware corporation ("House"), and 20,000,000 shares of the
Class B Common Stock, par value $.01 per share (the "House
Class B Stock"), of House (such shares of House Common Stock
and House Class B Stock held by Silver Co. are collectively
referred to herein as the "House Shares");
WHEREAS, the House Board of Directors has approved
the transactions contemplated hereby and the Merger Agreement
being entered into simultaneously herewith (including for
purposes of Section 203 of the Delaware General Corporation Law
(the "DGCL"));
WHEREAS, Silver desires to acquire, and Silver Co.
desires to transfer to Silver, the House Shares;
WHEREAS, in exchange for the House Shares, Silver Co.
desires to acquire, and Silver desires to issue to Silver Co.,
the number of shares of Silver's Common Stock, par value $.01
per share (the "Silver Common Stock"), and the number of shares
of Silver's Class B Common Stock, par value $.01 per share (the
"Silver Class B Stock") described in Section 1.1 below;
NOW, THEREFORE, in consideration of the premises and
the respective representations, warranties, covenants and
agreements set forth herein, the parties hereto agree as
follows:
ARTICLE I
SALE AND EXCHANGE OF SHARES
SECTION 1.1 Exchange of Shares. In reliance on the
representations and warranties and other agreements of the
other party contained herein and upon the terms and subject to
the conditions set forth herein, on the Closing Date (as
defined in Section 1.2) the parties will make the following
exchange (the "Exchange"):
(i) Silver Co. will transfer, assign and convey
to Silver, and Silver will acquire and accept from
Silver Co., all shares of House Common Stock and all
shares of House Class B Stock held by Silver Co.
immediately following the Merger, and
(ii) Silver will issue, convey and deliver to
Silver Co., and Silver Co. will acquire and accept
from Silver, 4,855,436 shares of Silver Common Stock
in exchange for the 17,566,702 shares of House Common
Stock and 6,082,000 shares of Silver Class B Stock in
exchange for the 20,000,000 shares of House Class B
Stock (such shares of Silver Common Stock and Silver
Class B Stock are collectively referred to herein as
the "Silver Shares").
SECTION 1.2 Closing. The Exchange shall take place
at a Closing (the "Closing") which shall be (i) at the offices
of Baker & Botts, L.L.P., 885 Third Avenue, New York, New York
10022, at 10:00 a.m., local time, on the second business day
following the day on which the last of the conditions set forth
in Sections 5.1(c), 5.1(d), 5.1(e), 5.1(f), 5.2(b) (other than
any actions to be taken at the Closing), 5.2(c) and 5.3(b)
(other than any actions to be taken at the Closing) hereof is
fulfilled or, if legally permissible, waived or (ii) at such
other time and place and on such other date as Silver and
Silver Co. shall agree (the "Closing Date"). At the Closing,
simultaneously with the delivery by Silver Co. of certificates
representing the House Shares, with appropriate stock powers
attached, duly endorsed, and with any necessary documentary or
transfer tax stamps duly affixed and cancelled, Silver will
deliver to Silver Co. a certificate or certificates
representing the Silver Common Stock and Silver Class B Stock
to be issued, conveyed and delivered to Silver Co. pursuant to
Section 1.1, with any necessary documentary or transfer tax
stamps duly affixed and cancelled, dated the Closing Date, and
such certificates shall be issued to and registered in the name
of Silver Co. The House Shares and the Silver Shares shall be
so delivered, in each case, free and clear of all liens,
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claims, charges, preemptive rights and other encumbrances other
than pursuant to the Merger Agreement and this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SILVER
Silver hereby makes the following representations and
warranties to Silver Co.:
SECTION 2.1 Organization and Qualification. Silver
(i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation; (ii) has all requisite corporate power and
authority to carry on its business as it is now conducted and
to own, lease and operate the properties it now owns, leases or
operates at the places currently located and in the manner
currently used and operated and (iii) is duly qualified or
licensed and in good standing to do business in each
jurisdiction in which the properties owned, leased or operated
by it or the nature of the business conducted by it makes such
qualification or license necessary, except, in the case of
clause (iii) where the failure to be so qualified or licensed,
or in good standing would not have a material adverse effect on
the business, assets or condition (financial or otherwise) of
Silver and its subsidiaries, taken as a whole. Silver has
delivered or made available to Silver Co. true and complete
copies of its Amended and Restated Certificate of Incorporation
and Amended and Restated By-Laws, each as amended to date and
currently in effect (respectively, the "Silver Charter" and the
"Silver Bylaws").
SECTION 2.2 Authorization and Validity of Agreement.
(a) The execution, delivery and performance of this Agreement
by Silver and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the board of
directors of Silver.
(b) Except for the approval of (x) this Agreement,
(y) the issuance of the Silver Shares and (z) the Silver
Charter Amendment (as defined below) by the stockholders of
Silver:
(i) Silver has full corporate power and
authority to execute and deliver this Agreement and
to perform its obligations hereunder and to
consummate the Exchange and the other transactions
contemplated hereby,
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(ii) no other corporate proceedings on the part
of Silver or any of its subsidiaries are necessary to
authorize the execution and delivery of this
Agreement or the consummation of the transactions
contemplated hereby,
(iii) this Agreement has been duly and validly
executed and delivered by Silver and, assuming the
due authorization, execution and delivery of this
Agreement by Silver Co., constitutes a legal, valid
and binding obligation of Silver, enforceable against
it in accordance with its terms, except as such
enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights generally or
by principles governing the availability of equitable
remedies.
SECTION 2.3 Validity of Silver Shares, etc. Subject
to the filing and effectiveness of the Silver Charter Amendment
as contemplated in Section 4.1, the shares of Silver Common
Stock and Silver Class B Stock to be issued by Silver to Silver
Co. pursuant to the Exchange, upon issuance and delivery in
accordance with the terms and conditions of this Agreement,
will be duly authorized, validly issued, fully paid and non-
assessable, and, except as set forth on Schedule 2.3, will be
free of any liens, claims, charges, security interests,
preemptive rights, pledges, voting or stockholder agreements,
encumbrances or equities of any kind whatsoever, will not be
issued in violation of any preemptive rights and will vest in
Silver Co. full rights with respect thereto, including the
right to vote the Silver Shares on all matters properly
presented to the stockholders of Silver to the extent set forth
in the Silver Charter. The Silver Charter, upon amendment as
contemplated by Section 4.1, will provide that the Silver Class
B Stock to be authorized for issuance pursuant to this
agreement will have identical rights, powers, privileges and
preferences as the outstanding Silver Class B Stock. In
addition, the issuance of the Silver Shares will not violate
the stockholder voting rights, policies and requirements of the
National Association of Securities Dealers, Inc. ("NASD"),
assuming such issuance is approved by the stockholders of
Silver pursuant to the DGCL and in accordance with Section 6(i)
of Part III of Schedule D of the NASD By-Laws (the "NASD
Shareholder Approval Policy").
SECTION 2.4 Capitalization. (a) The authorized
capital stock of Silver consists of (i) 30,000,000 shares of
Silver Common Stock, (ii) 2,415,945 shares of Silver Class B
Stock, and (iii) 50,000 shares of Preferred Stock, par value
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$.01 per share (the "Silver Preferred Stock"), of which, as of
November 20, 1995, (x) 6,975,882 shares of Silver Common Stock
are issued and outstanding, 2,295,347 shares are reserved for
issuance upon exercise of outstanding stock options and
2,415,945 shares are reserved for issuance upon conversion of
existing Silver Class B Stock, no shares are held by Silver in
its treasury and no shares are held by any subsidiary of
Silver; (y) 2,415,945 shares of Silver Class B Stock are issued
and outstanding, no shares are reserved for issuance upon
exercise of outstanding stock options, no shares are held by
Silver in its treasury and no shares are held by any subsidiary
of Silver; and (z) no shares of Silver Preferred Stock are
issued or outstanding, reserved for issuance upon exercise of
outstanding stock options, or held by Silver in its treasury or
by any subsidiary of Silver, and no series of Silver Preferred
Stock has been designated or authorized.
(b) All issued and outstanding shares of Silver
Common Stock and Silver Class B Stock have been validly issued
and are fully paid and nonassessable, are not subject to and
have not been issued in violation of any preemptive rights and
have not been issued in violation of any federal or state
securities laws. The respective rights, preferences,
privileges, limitations and restrictions of the Silver Common
Stock, the Silver Class B Stock and Silver Preferred Stock are
as set forth in the Silver Charter. Except as set forth on
Schedule 2.4 or as disclosed on the reports, forms, schedules,
registration statements and proxy statements originally filed
with the SEC (as defined below) by Silver with respect to
periods or events after January 1, 1994 and prior to the date
hereof (the "Silver SEC Reports") pursuant to the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder
(respectively the "Securities Act" and the "Exchange Act"),
there are no outstanding or authorized subscriptions, options,
warrants, calls, rights, commitments or any other agreements of
any character to or by which Silver or any of its subsidiaries
is a party or is bound which, directly or indirectly, obligate
Silver or any of its subsidiaries to issue, deliver or sell or
cause to be issued, delivered or sold any shares of capital
stock or other equity interests of Silver or any securities
convertible into, or exercisable or exchangeable for, or
evidencing the right to subscribe for any such shares of
capital stock or other equity interests or obligating Silver or
any of its subsidiaries to grant, extend or enter into any such
subscription, option, warrant, call or right. All shares of
Silver Common Stock, Silver Class B Stock and/or Silver
Preferred Stock subject to issuance as aforesaid, upon issuance
on the terms and conditions specified in the instruments
pursuant to which they are issuable, shall be duly authorized,
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validly issued, fully paid and non-assessable and not subject
to preemptive rights. Except as is disclosed in the Silver SEC
Reports or as set forth in Schedule 2.4, there are no
obligations, contingent or otherwise, of Silver or any of its
subsidiaries to repurchase, redeem or otherwise acquire any
shares of Silver Common Stock, Silver Class B Stock or Silver
Preferred Stock or the capital stock of any subsidiary or to
provide funds to make any material investment (in the form of a
loan, capital contribution or otherwise) in any such subsidiary
or any other entity other than guarantees of obligations of
subsidiaries entered into in the ordinary course of business.
SECTION 2.5 No Approvals or Notices Required; No
Conflict with Instruments. The execution and delivery by
Silver of this Agreement do not, and the performance by Silver
of its obligations hereunder and the consummation of the
transactions contemplated hereby including the issuance of the
Silver Shares will not:
(i) assuming the Silver Charter Amendment is
approved and is filed and becomes effective as
contemplated in Section 4.1, conflict with or violate
the Silver Charter, as so amended, or the Silver
Bylaws or the charter or bylaws of any subsidiary of
Silver, in each case as amended to date;
(ii) require any consent, approval, order or
authorization of or other action by any court,
administrative agency or commission or other
governmental authority or instrumentality, foreign,
United States federal, state or local (each such
entity a "Governmental Entity" and each such action a
"Governmental Consent") or any registration,
qualification, declaration or filing with or notice
to any Governmental Entity (a "Governmental Filing"),
in each case on the part of or with respect to Silver
or any subsidiary of Silver, the absence or omission
of which would, either individually or in the
aggregate, have a material adverse effect on the
transactions contemplated hereby or on the business,
assets, results of operations or financial condition
of Silver and its subsidiaries, taken as a whole,
except for (A) the filing of the Silver Charter
Amendment with the Delaware Secretary of State (as
contemplated by Section 4.1), (B) the filing with the
Securities and Exchange Commission (the "SEC") of the
Proxy Statement (as defined in Section 4.2) required
in connection with this Agreement and the
transactions contemplated hereby and (C) the
Governmental Filings required pursuant to the pre
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merger notification requirements of the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder
(the "HSR Act") and the expiration or termination of
any applicable waiting period with respect to the
Exchange under the HSR Act;
(iii) require, on the part of Silver or any
subsidiary of Silver, any consent by or approval of
(a "Contract Consent") or notice to (a "Contract
Notice") any other person or entity (other than a
Governmental Entity), the absence or omission of
which would, either individually or in the aggregate,
have a material adverse effect on the transactions
contemplated hereby or on the business, assets,
results of operations or financial condition of
Silver and its subsidiaries, taken as a whole, other
than the approval by the Silver stockholders of the
Silver Charter Amendment pursuant to the DGCL and the
issuance of the Silver Shares in accordance with the
NASD Shareholder Approval Policy;
(iv) except as set forth on Schedule 2.5,
conflict with, result in any violation or breach of
or default (with or without notice or lapse of time,
or both) under, or give rise to a right of
termination, cancellation or acceleration of any
obligation or the loss of any material benefit under
or the creation of any lien, security interest,
pledge, charge, claim, option, right to acquire,
restriction on transfer, voting restriction or
agreement, or any other restriction or encumbrance of
any nature whatsoever on any assets pursuant to (any
such conflict, violation, breach, default, right of
termination, cancellation or acceleration, loss or
creation, a "Violation") any "Contract" (which term
shall mean and include any note, bond, indenture,
mortgage, deed of trust, lease, franchise, permit,
authorization, license, contract, instrument,
employee benefit plan or practice, or other
agreement, obligation, commitment or concession of
any nature) to which Silver or any subsidiary of
Silver is a party, by which Silver, any subsidiary of
Silver or any of their respective assets or
properties is bound or pursuant to which Silver or
any subsidiary of Silver is entitled to any rights or
benefits, except for such Violations which would not,
either individually or in the aggregate, have a
material adverse effect on the transactions
contemplated hereby or on the business, assets,
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results of operations or financial condition of
Silver and its subsidiaries, taken as a whole; or
(v) assuming that the Silver Charter Amendment
has been approved and filed and become effective
pursuant to the DGCL as contemplated in Section 4.1,
that the Silver stockholders have approved the
issuance of the Silver Shares in accordance with the
NASD Shareholder Approval Policy, and that the
Governmental Consents and Governmental Filings
specified in clause (ii) of this Section 2.5 are
obtained, made and given, result in a Violation of,
under or pursuant to any law, rule, regulation,
order, judgment or decree applicable to Silver or any
subsidiary of Silver or by which any of their
respective properties or assets are bound.
SECTION 2.6 DGCL Sec. 203. The Exchange and the
related transactions contemplated hereby have been approved in
all respects by the Board of Directors of House, including for
purposes of Section 203 of the DGCL, and following the
Exchange, Silver shall not be subject to the restrictions on
"business combinations" with "interested stockholders"
contained therein.
SECTION 2.7 Opinion of Advisor. Silver's Board of
Directors has received the written opinion of CS First Boston
(the "CS First Boston Opinion") (a copy of which opinion has
been delivered to Silver Co.) that, as of the date of this
Agreement, the terms of the Exchange are fair to Silver's
stockholders from a financial point of view.
SECTION 2.8 Brokers or Finders. Other than pursuant
to a written agreement with CS First Boston (a copy of which
has been previously furnished to Silver Co.) and as disclosed
in Schedule 2.8, no agent, broker, investment banker, financial
advisor or other person or entity is or will be entitled, by
reason of any agreement, act or statement by Silver or any of
its subsidiaries, directors, officers, employees or affiliates,
to any financial advisory, broker's, finder's or similar fee or
commission, to reimbursement of expenses or to indemnification
or contribution in connection with any of the transactions
contemplated by this Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SILVER CO.
Silver Co. hereby makes the following representations and
warranties to Silver:
SECTION 3.1 Organization and Qualification. Silver
Co. (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation; (ii) has all requisite corporate power and
authority to carry on its business as it is now conducted and
to own, lease and operate the properties it now owns, leases or
operates at the places currently located and in the manner
currently used and operated and (iii) is duly qualified or
licensed and in good standing to do business in each
jurisdiction in which the properties owned, leased or operated
by it or the nature of the business conducted by it makes such
qualification or license necessary. As of the date hereof,
Silver Co. has no subsidiaries. As of the Closing, Silver Co.
will have no subsidiaries other than Silver, and by its
execution and delivery of this Agreement, Silver Co. shall not
be deemed to have made any representations, warranties,
covenants or other agreements with respect to or on behalf of
Silver (it being understood that any breach by Silver of any of
its representations, warranties, covenants or other agreements
made herein shall not be considered in determining the truth,
accuracy, completeness or performance of, or compliance with,
any representation, warranty, covenant or agreement made by
Silver Co. herein). Silver Co. has delivered or made available
to Silver true and complete copies of its certificate of
incorporation and bylaws, each as amended to date and currently
in effect (respectively, the "Silver Co. Charter" and the
"Silver Co. Bylaws").
SECTION 3.2 Authorization and Validity of Agreement.
The execution, delivery and performance of this Agreement by
Silver Co. and the consummation of the transactions
contemplated hereby have been duly and validly authorized by
the board of directors and by the requisite vote of the
stockholders of Silver Co. entitled to vote thereon. Silver
Co. has full corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder
and to consummate the Exchange and the other transactions
contemplated hereby. No other corporate proceedings on the
part of Silver Co. are necessary to authorize the execution and
delivery of this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Silver Co. and, assuming
the due authorization, execution and delivery of this Agreement
by
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Silver, constitutes a legal, valid and binding obligation of
Silver Co., enforceable against it in accordance with its
terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other
similar laws affecting creditors' rights generally or by
principles governing the availability of equitable remedies.
SECTION 3.3 Ownership and Validity of House Shares.
Upon consummation of the Merger and immediately prior to the
Exchange, Silver Co. will own beneficially and of record the
House Shares, free of any liens, claims, charges, security
interests, pledges, voting or stockholder agreements,
encumbrances or equities. Except for this Agreement, the
Merger Agreement, the definitive term sheet, attached to the
letter to Barry Diller ("Lasorda") from Rockies, dated August
24, 1995, as amended by the letter to Lasorda, dated as of the
date hereof, pursuant to which Rockies and Lasorda have entered
into certain agreements with respect to the equity securities
of Silver, all as described therein (the "Term Sheet"), and the
transactions contemplated hereby and thereby and except for
certain voting restrictions contained in the Stipulation and
Agreement of Compromise, Settlement and Release entered into in
the action entitled 7547 Corp. v. Liberty Media Corp., et al.
in the Delaware Chancery Court and approved by such court on
January 27, 1995 (the "Sec. 203 Settlement Agreement"), there
are no agreements, arrangements, warrants, options, puts,
calls, rights or other commitments or understandings of any
character to which Silver Co. is a party or by which it is
bound and relating to the issuance, sale, purchase, redemption,
conversion, exchange, registration, voting or transfer of any
of the House Shares. Upon consummation of the Exchange, Silver
will hold the House Shares free and clear of any liens, claims,
charges, security interests, pledges, voting or stockholder
agreements, encumbrances or options (other than any of the
foregoing created by Silver), and will have full rights of
ownership with respect to the House Shares, including the right
to vote the House Shares on all matters properly presented to
the stockholders of House to the extent set forth in the
certificate of incorporation of House as in effect on the date
hereof.
SECTION 3.4 No Approvals or Notices Required; No
Conflict with Instruments. The execution and delivery by
Silver Co. of this Agreement do not, and the performance by
Silver Co. of its obligations hereunder and the consummation of
the transactions contemplated hereby will not:
(i) conflict with or violate the Silver Co.
Charter or the Silver Co. Bylaws;
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(ii) require any Governmental Consent or
Governmental Filing, in each case on the part of or
with respect to each of Silver Co., the absence or
omission of which would, either individually or in
the aggregate, have a material adverse effect on the
transactions contemplated hereby, except for the
Governmental Filings required pursuant to the pre-
merger notification requirements of the HSR Act, and
the expiration or termination of any applicable
waiting period with respect to the Exchange under the
HSR Act;
(iii) require, on the part of Silver Co. any
Contract Consent or Contract Notice, the absence or
omission of which would, either individually or in
the aggregate, have a material adverse effect on the
transactions contemplated hereby;
(iv) conflict with or result in any Violation of
any Contract to which Silver Co. is a party, or by
which Silver Co., or any of its assets or properties
is bound, except for such Violations which would not,
either individually or in the aggregate, have a
material adverse effect on the transactions
contemplated hereby; or
(v) assuming that the Governmental Consents and
Governmental Filings specified in clause (ii) of this
Section 3.4 are obtained, made and given, result in a
Violation of, under or pursuant to any law, rule,
regulation, order, judgment or decree applicable to
Silver Co. or by which any of its properties or
assets are bound, except for such Violations which
would not, either individually or in the aggregate,
have a material adverse effect on the transactions
contemplated hereby.
SECTION 3.5 Brokers or Finders. No agent, broker,
investment banker, financial advisor or other person or entity
is or will be entitled, by reason of any agreement, act or
statement by Silver Co., any of its directors, officers,
employees or affiliates (other than Silver), to any financial
advisory, broker's, finder's or similar fee or commission, to
reimbursement of expenses or to indemnification or contribution
in connection with any of the transactions contemplated by this
Agreement.
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ARTICLE IV
COVENANTS AND OTHER AGREEMENTS
SECTION 4.1 Silver Stockholders Meeting. Silver
will take all action necessary in accordance with Delaware law,
the Silver Charter, the Silver Bylaws and the requirements of
the NASD and the SEC to convene a meeting of its stockholders
(the "Silver Stockholders Meeting") as promptly as practicable
to consider and vote upon (a) an amendment to the Silver
Charter (the "Silver Charter Amendment") (i) increasing the
authorized number of shares of Silver Class B Stock by the
amount necessary to permit the issuance and delivery of the
Silver Shares to Silver Co. in accordance with Section 1.1 and
the transactions contemplated hereby (together with amendments
to such other provisions as may be reasonably necessary to
reflect such increase in the authorized capital stock of
Silver) and (ii) deleting all provisions in the Silver Charter
which require that the holders of the Silver Common Stock and
the Silver Class B Stock vote as separate classes on certain
specified matters so long as at least 2,280,000 shares of
Silver Class B Stock are outstanding and (b) approval of the
issuance of the Silver Shares in accordance with the NASD
Shareholder Approval Policy (the "NASD Vote"). The Board of
Directors of Silver shall recommend that the stockholders of
Silver vote in favor of the Silver Charter Amendment and the
transactions contemplated hereby (including the NASD Vote).
Silver shall use its best efforts to solicit from its
stockholders proxies in favor of such approvals.
SECTION 4.2 Proxy Statement. (a) Silver shall
prepare and file with the SEC, as soon as reasonably
practicable, a preliminary proxy statement and a form of proxy
for use at the Silver Stockholders Meeting relating to the vote
of Silver's stockholders with respect to the Silver Charter
Amendment, the NASD Vote and the transactions contemplated
hereby (together with any amendments or supplements thereto, in
each case in the form or forms mailed to Silver's stockholders,
the "Proxy Statement"). Silver will use all reasonable efforts
to have, or cause, the Proxy Statement to be cleared by the SEC
as promptly as practicable and to cause the Proxy Statement to
be mailed to stockholders of Silver at the earliest possible
date. Silver Co. shall promptly furnish to Silver such
information regarding Silver Co. and its officers and directors
as may be reasonably requested by Silver for inclusion in the
Proxy Statement.
(b) Silver covenants that none of the information
concerning Silver, its subsidiaries, or any of its affiliates,
directors, officers, employees, agents or representatives which
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is included or incorporated by reference in the Proxy Statement
will, at the time the Proxy Statement or any amendment or
supplement thereto is filed with the SEC, at the time of
mailing of the Proxy Statement or any amendment or supplement
thereto to Silver's stockholders or at the time of the Silver
Stockholders Meeting, be false or misleading with respect to
any material fact, or omit to state any material fact necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Silver covenants that the Proxy Statement shall comply as to
form in all material respects with the applicable provisions of
the Exchange Act and the rules and regulations thereunder.
(c) Silver Co. covenants that none of the
information supplied or to be supplied by Silver Co. or any of
its affiliates (other than Silver), directors, officers,
employees, agents or representatives in writing specifically
for inclusion in the Proxy Statement will, at the time the
Proxy Statement or any amendment or supplement thereto is filed
with the SEC, at the time of mailing of the Proxy Statement or
any amendment or supplement thereto to Silver's stockholders or
at the time of the Silver Stockholders Meeting, be false or
misleading with respect to any material fact, or omit to state
any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
SECTION 4.3 Reasonable Efforts. Subject to the
terms and conditions of this Agreement and applicable law, each
of the parties shall use its reasonable efforts to take, or
cause to be taken, all actions, and do, or cause to be done,
all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by
this Agreement as soon as reasonably practicable, including
such actions or things as either party hereto may reasonably
request in order to cause any of the conditions to such other
party's obligation to consummate such transactions specified in
Article V to be fully satisfied. Without limiting the
generality of the foregoing, the parties shall (and shall cause
their respective subsidiaries, and use their reasonable efforts
to cause their respective affiliates, directors, officers,
employees, agents, attorneys, accountants and representatives,
to) consult and fully cooperate with and provide reasonable
assistance to each other in (i) the preparation and filing with
the SEC of the Proxy Statement and any necessary amendments of
or supplements thereto; (ii) seeking to have the Proxy
Statement cleared by the SEC as soon as reasonably practicable
after filing with the SEC; (iii) obtaining all necessary
Governmental Consents and Contract Consents, and giving all
necessary Contract Notices to and making all necessary
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Governmental Filings and other necessary filings with and
applications and submissions to, any Governmental Entity or
other person or entity; (iv) filing all applicable Pre-Merger
Notification and Report Forms required under the HSR Act as a
result of the transactions contemplated by this Agreement and
promptly complying with any requests for additional information
and documentary material that may be requested pursuant to the
HSR Act; (v) lifting any permanent or preliminary injunction or
restraining order or other similar order issued or entered by
any court or Governmental Entity (an "Injunction") of any type
referred to in Section 5.1; (vi) providing all such information
about such party, its subsidiaries and its officers, directors,
partners and affiliates and making all applications and filings
as may be necessary or reasonably requested in connection with
any of the foregoing; and (vii) in general, consummating and
making effective the transactions contemplated hereby;
provided, however, that in order to obtain any consent,
approval, waiver, license, permit, authorization, registration,
qualification or other permission or action or the lifting of
any Injunction referred to in clauses (iii) and (v) of this
sentence, no party shall be required to (x) pay any
consideration, to divest itself of any of, or otherwise
rearrange the composition of, its assets or to agree to any
conditions or requirements which are materially adverse or
burdensome or (y) amend, or agree to amend, in any material
respect any Contract. Prior to making any application to or
filing with any Governmental Entity or other person or entity
in connection with this Agreement, each of Silver and Silver
Co. shall provide the other party with drafts thereof and
afford the other party a reasonable opportunity to comment on
such drafts.
SECTION 4.4 Public Announcements. Each party agrees
that it shall not, and shall use its reasonable efforts to
cause its affiliates, directors, officers, employees and
authorized representatives not to, issue any press release,
make any public announcement or furnish any written statement
to its employees or stockholders generally concerning the
transactions contemplated by this Agreement without the consent
of the other party (which consent shall not be unreasonably
withheld), except to the extent required by applicable law or
any listing agreement with or other applicable requirements of
a national securities exchange or the applicable requirements
of the NASD (and in such case such party shall, to the extent
consistent with timely compliance with such requirement,
consult with the other party prior to making the required
release, announcement or statement).
SECTION 4.5 Confidentiality. Each party shall, and
shall use its reasonable efforts to cause its officers,
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employees and authorized representatives to (i) hold in
confidence all confidential information obtained by it from the
other party or such other party's officers, employees or
authorized representatives pursuant to this Agreement (unless
such information is or becomes publicly available or readily
ascertainable from public or published information or trade
sources through no wrongful act of such first party) and
(ii) use all such data and information solely for the purpose
of consummating the transactions contemplated hereby, except,
in either case, as may be otherwise required by law or legal
process or as may be necessary or appropriate in connection
with the enforcement of, or any litigation concerning, this
Agreement. In the event a party is required by applicable law
or legal process to disclose any confidential information of
the other party, such first party will provide the other party
with prompt notice thereof to enable such other party to seek
an appropriate protective order. In the event this Agreement
is terminated, each party shall promptly return, if so
requested by the other party, all nonpublic documents obtained
from such other party in connection with the transactions
contemplated hereby and any copies thereof which may have been
made by such first party and shall use its reasonable efforts
to cause its officers, employees and authorized representatives
to whom such documents were furnished promptly to return such
documents and any copies thereof any of them may have made.
SECTION 4.6 Merger Agreement. Silver Co. shall not
amend or otherwise alter or waive any of its rights or
obligations (including any conditions on its obligations to
consummate the transactions contemplated thereby) under the
Merger Agreement in any material respect without the prior
written consent of Silver.
SECTION 4.7 Notification of Certain Matters. Silver
shall give prompt notice to Silver Co., and Silver Co. shall
give prompt notice to Silver, of the occurrence, or failure to
occur, of any event, which occurrence or failure to occur would
be likely to cause (a) any representation or warranty contained
in this Agreement to be untrue or inaccurate in any material
respect, (b) any material failure of Silver or Silver Co., as
the case may be, or of any officer, director, employee or agent
thereof, to comply with or satisfy any covenant or agreement to
be complied with or satisfied by it under this Agreement or (c)
the failure to be satisfied of any condition to the parties'
respective obligations to consummate the transactions
contemplated hereby and by the Merger Agreement.
Notwithstanding the foregoing, the delivery of any notice
pursuant to this Section shall not limit or otherwise affect
the remedies available hereunder to the party receiving such
notice.
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ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1 Conditions Precedent to the Obligations
of Silver and Silver Co. The obligations of each of Silver and
Silver Co. to consummate the transactions contemplated by this
Agreement are subject to the satisfaction at or prior to the
Closing Date of each of the following conditions, any or all of
which may be waived in whole or in part by the parties, to the
extent permitted by applicable law:
(a) Absence of Injunctions. No Injunction or other
legal restraint or prohibition preventing consummation of the
transactions contemplated hereby as provided herein shall be in
effect.
(b) No Proceedings or Adverse Enactments. There
shall not have been any action taken, or any statute, rule,
regulation, order, judgment or decree enacted, promulgated,
entered, issued or enforced by any Governmental Entity, and
there shall be no action, suit, proceeding or investigation
pending or threatened which makes the transactions contemplated
by this Agreement illegal or imposes, or is reasonably likely
to result in the imposition of, material damages or penalties
in connection therewith.
(c) Stockholder Approvals. The Silver Charter
Amendment and the transactions contemplated hereby shall have
been approved by the requisite vote of the stockholders of
Silver under Delaware law, the Silver Charter, the Silver
Bylaws, and the Silver Charter Amendment shall have been filed
with the Delaware Secretary of State in accordance with the
DGCL and become effective under the DGCL. The issuance of the
Silver Shares shall have been approved by the requisite vote of
the stockholders of Silver in accordance with the NASD
Shareholder Approval Policy.
(d) Consummation of the Merger. Immediately prior
in time to the Closing, the Merger and the transactions
contemplated thereby shall have been consummated in accordance
with the Merger Agreement.
(e) HSR Act. All applicable waiting periods under
the HSR Act shall have expired or been terminated without
commencement of litigation by the appropriate governmental
enforcement agency to restrain the transactions contemplated
hereby.
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(f) Receipt of Governmental Approvals and Consents.
All Governmental Consents as are required in connection with
the consummation of the transactions contemplated hereby shall
have been obtained and shall be in full force and effect and
all Governmental Filings as are required in connection with the
consummation of such transactions shall have been made, and all
waiting periods, if any, applicable to the consummation of such
transactions imposed by any Governmental Entity shall have
expired, other than those which, if not obtained, in force or
effect, made or expired (as the case may be) would not, either
individually or in the aggregate, have a material adverse
effect on the transactions contemplated hereby.
SECTION 5.2 Conditions Precedent to the Obligations
of Silver Co. The obligation of Silver Co. to consummate the
transactions contemplated by this Agreement is also subject to
the satisfaction, at or prior to the Closing Date, of each of
the following conditions, any or all of which may be waived in
whole or in part by Silver Co., to the extent permitted by
applicable law:
(a) Accuracy of Representations and Warranties. All
representations and warranties of Silver contained in this
Agreement shall, if specifically qualified by materiality, be
true and correct and, if not so qualified, be true and correct
in all material respects in each case as of the date of this
Agreement and (except to the extent such representations or
warranties speak as of a specified earlier date) on and as of
the Closing Date, with the same force and effect as though made
on and as of the Closing Date, except for changes expressly
permitted or contemplated by this Agreement.
(b) Performance of Agreements. Silver shall have
performed in all material respects all obligations and
agreements, and complied in all material respects with all
covenants and conditions, contained in this Agreement to be
performed or complied with by it at or prior to the Closing
Date.
(c) No Proceedings or Adverse Enactments Affecting
Silver Shares. There shall not have been any action taken, or
any statute, rule, regulation, order, judgment or decree
enacted, promulgated, entered, issued or enforced by any
Governmental Entity, and there shall be no action, suit or
proceeding pending or threatened which would, as of or after
the Closing, impose material limitations on the ability of
Silver Co. effectively to exercise full rights of ownership of
the Silver Shares (including, to the extent such Silver Shares
have voting rights, the right to vote such shares on all
matters properly presented to the stockholders of Silver).
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(d) Control of Silver. Immediately after the
Exchange, Silver Co. shall have "control" (as defined in
Section 368(c) of the Internal Revenue Code of 1986, as
amended) of Silver, and Silver Co. shall own a majority of the
voting power of the outstanding equity securities of Silver.
(e) Officer's Certificates. Silver Co. shall have
received a certificate of Silver, dated the Closing Date,
signed by an executive officer of Silver Co. certifying that
the conditions set forth in Sections 5.2 (a) and (b) have been
satisfied, which certification shall have been given by such
officer after due inquiry.
(f) Other Deliveries. All other documents and
instruments required under this Agreement to have been
delivered by Silver to Silver Co. at or prior to the Closing or
as Silver Co. shall have reasonably requested, shall have been
delivered by Silver.
(g) Lasorda Management Role. Lasorda shall be
Chairman of the Board and/or Chief Executive Officer and/or
President of Silver and shall be Chairman of the Board of
House.
SECTION 5.3 Conditions Precedent to the Obligations
of Silver. The obligation of Silver to consummate the
transactions contemplated by this Agreement is also subject to
the satisfaction, at or prior to the Closing Date, of each of
the following conditions, any or all of which may be waived in
whole or in part by Silver, to the extent permitted by
applicable law:
(a) Accuracy of Representations and Warranties. All
representations and warranties of Silver Co. contained in this
Agreement shall, if specifically qualified by materiality, be
true and correct and, if not so qualified, be true and correct
in all material respects, in each case as of the Closing Date
(except to the extent such representations and warranties speak
as of a specified earlier date), except for changes expressly
permitted or contemplated by this Agreement.
(b) Performance of Agreements. Silver Co. shall
have performed in all material respects all obligations and
agreements, and complied in all material respects with all
covenants and conditions, contained in this Agreement to be
performed or complied with by them at or prior to the Closing
Date.
(c) Officer's Certificates. Silver shall have
received a certificate of Silver Co. dated the Closing Date,
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signed by an executive officer of Silver Co. certifying that
the conditions set forth in Sections 5.3 (a) and (b) have been
satisfied, which certification shall have been given by such
officer after due inquiry.
(d) Other Deliveries. All other documents and
instruments required under this Agreement to have been
delivered by Silver Co. to Silver at or prior to the Closing,
or as Silver shall reasonably request, shall have been
delivered by Silver Co.
(e) Lasorda Management Role. Lasorda shall be
Chairman of the Board and/or Chief Executive Officer and/or
President of Silver and the Chairman of the Board of House;
provided, however, that to the extent the failure of the
foregoing condition to be satisfied is primarily the result of
any action by Lasorda (including his resignation, his
termination or removal for Cause (as defined in the Silver Term
Sheet), or his failure to cause himself to be elected or
appointed to such positions at Silver at any time following the
Control Date (as defined in the Term Sheet)), then the
condition set forth in this Section 5.3(e) shall nevertheless
be deemed satisfied.
(f) No Adverse Change or Development. Except with
respect to the Reserved Matters (as defined below), subsequent
to December 31, 1994, there shall not have occurred any change
or development in or affecting the assets, liabilities,
business, operations, or financial condition of House which in
any case or in the aggregate would, in the reasonable judgment
of the Board of Directors of Silver, represent a material
adverse effect upon House and its subsidiaries, taken as a
whole. For purposes of this paragraph (f), the term "Reserved
Matters" shall mean any information relating to the assets,
liabilities, business, operations or financial condition of
House which is contained in, is reasonably discernable from,
results from, or which is or has become known to, as
applicable, any of the following:
(i) any reports or statements filed by House
with the SEC with respect to periods subsequent to
December 31, 1994 and prior to the date of this
Agreement;
(ii) any information obtained or reviewed by, or
otherwise delivered to, Silver or to Barry Diller or
his representatives ("Diller") as a result of or in
connection with Diller's service on the Board of
Directors of House or the Executive Committee thereof
prior to the date of this Agreement, in connection
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with any investigation, discussions, reviews or
analyses of the business and affairs of House
conducted by Diller, or otherwise;
(iii) with respect to any current or recurring
negative financial or operating trend, information
with respect to House (which trends may include, but
are not limited to, sales, cost of goods sold,
inventories, liquidity, commission payments to cable
operators and the rate of returned goods), any
continuance (including any continued or accelerated
deterioration) thereof, beyond the date hereof, which
information is contained in the Reserved Matters
referred to in clauses (i) and (ii) above; and
(iv) any adverse changes or developments which
are directly or indirectly caused by Diller and/or
senior management of House (including, but not
limited to, its Chairman of the Board) hired or
appointed subsequent to November 22, 1995, including
but not limited to, the adoption, implementation,
expansion or change in any Board of Directors or
managerial directives or accounting and financial
reporting policies and/or any other changes in the
nature or manner of operation of House's business.
(g) Audited Financial Statements. Except to the
extent contained in the matters referred to in clauses (i) and
(ii) of the Reserved Matters, the audited financial statements
of House, as of and for the fiscal year ended December 31,
1994, contained in the Annual Report on Form 10-K of House for
the fiscal year ended December 31, 1994, as amended, shall have
been prepared in accordance with generally accepted accounting
principles, applied on a consistent basis throughout the fiscal
year ended December 31, 1994 (except as may be indicated in the
notes thereto), and shall have fairly presented the
consolidated financial position of House and its consolidated
subsidiaries as of December 31, 1994 and the consolidated
results of its operations and cash flows for the fiscal year
ended December 31, 1994, except for such failures to have been
prepared and/or to have fairly presented the foregoing as do
not, individually or in the aggregate, represent a material
adverse effect on the assets, liabilities, business, operations
or financial condition of House and its subsidiaries, taken as
a whole.
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ARTICLE VI
TERMINATION
SECTION 6.1 Termination and Abandonment. This
Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing,
(i) by mutual written consent of Silver Co. and Silver; (ii) by
either Silver Co. or Silver: (A) if the Closing shall not have
occurred before August 30, 1996 (or, if earlier, the
termination of the Merger Agreement pursuant to Section
6.1(ii)(A)), provided, that the right to terminate this
Agreement pursuant to this clause (ii)(A) shall not be
available to any party whose failure to perform any of its
obligations under this Agreement required to be performed by it
at or prior to the Closing has resulted in the failure of the
Closing to occur before such date, (B) if there has been a
material breach by the other party of any of its
representations, warranties, covenants or agreements contained
in this Agreement and such breach shall not have been cured
within five business days after written notice thereof shall
have been received by the party alleged to be in breach or
(C) if any court of competent jurisdiction or other competent
Governmental Entity shall have issued an order, decree or
ruling or taken any other action permanently restraining,
enjoining or otherwise prohibiting any of the transactions
contemplated by this Agreement and such order, decree, ruling
or other action shall have become final and nonappealable or
(iii) by Silver or Silver Co., if the required approvals of the
stockholders of Silver contemplated by this Agreement shall not
have been obtained by reason of the failure to obtain the
required vote upon a vote taken at a meeting of stockholders
duly convened therefor or at any adjournment thereof.
SECTION 6.2 Effect of Termination. In the event of
any termination of this Agreement by Silver Co. or Silver
pursuant to Section 6.1, this Agreement forthwith shall become
void, and there shall be no liability or obligation on the part
of any party hereto, except that Sections 4.5 and 7.2 shall
survive the termination of this Agreement and except that
nothing herein will relieve a party from liability for any
breach of this Agreement occurring prior to such termination.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Further Assurances. From and after the
Closing Date, each of Silver and Silver Co. shall, at any time
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and from time to time, make, execute and deliver, or cause to
be made, executed and delivered, such instruments, agreements,
consents and assurances and take or cause to be taken all such
actions as may reasonably be requested by any other party
hereto to effect the purposes and intent of this Agreement.
SECTION 7.2 Expenses. Except as otherwise provided
herein, all costs and expenses, including, without limitation,
fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing
shall occur.
SECTION 7.3 Notices. All notices, requests,
demands, waivers and other communications required or permitted
to be given under this Agreement shall be in writing and shall
be deemed to have been duly given on (i) the day on which
delivered personally or by telecopy (with prompt confirmation
by mail) during a business day to the appropriate location
listed as the address below, (ii) three business days after the
posting thereof by United States registered or certified first
class mail, return receipt requested, with postage and fees
prepaid or (iii) one business day after deposit thereof for
overnight delivery. Such notices, requests, demands, waivers
or other communications shall be addressed as follows:
(a) if to Silver to:
Silver King Communications, Inc.
12425 28th Street North
St. Petersburg, Florida 33716
Attention: Steven H. Grant
Telecopier: (813) 572-1349
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019-5150
Attention: Pamela S. Seymon, Esq.
Telecopier No.: (212) 403-2000
(b) if to Silver Co., to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019-5150
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Attention: Pamela S. Seymon, Esq.
Telecopier No.: (212) 403-2000
with a copy to the following:
Liberty Media Corporation
8101 East Prentice Avenue, Suite 500
Englewood, Colorado 80111
Attention: Peter M. Barton, President
Telecopier No.: (303) 721-5415
Baker & Botts, L.L.P.
885 Third Avenue
New York, New York 10022-4834
Attention: Frederick McGrath, Esq.
Telecopier No.: (212) 705-5125
or to such other person or address as any party shall specify
by notice in writing to the other party.
SECTION 7.4 Entire Agreement. This Agreement
(including the documents referred to herein) constitutes the
entire agreement between the parties and supersedes all prior
agreements and understandings, oral and written, between the
parties with respect to the subject matter hereof.
SECTION 7.5 Assignment; Binding Effect; Benefit.
Neither this Agreement nor any of the rights, benefits or
obligations hereunder may be assigned by any party without the
prior written consent of the other parties hereto. Subject to
the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and
their respective successors and assigns. Nothing in this
Agreement, expressed or implied, is intended to confer on any
person other than the parties or their respective successors
and assigns, any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
SECTION 7.6 Amendment. This Agreement may be
amended, superseded or cancelled, only by a written instrument
specifically stating that it amends, supersedes or cancels this
Agreement, executed by all parties hereto.
SECTION 7.7 Extension; Waiver. Silver Co. or Silver
may, to the extent legally allowed, (i) extend the time
specified herein for the performance of any of the obligations
of the other party, (ii) waive any inaccuracies in the
representations and warranties of the other party contained
herein or in any document delivered pursuant hereto,
(iii) waive compliance by the other party with any of the
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agreements or covenants of such other party contained herein or
(iv) waive any condition to such waiving party's obligation to
consummate the transactions contemplated hereby or to any of
such waiving party's other obligations hereunder. Any
agreement on the part of a party hereto to any such extension
or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. Any such extension
or waiver by any party shall be binding on such party but not
on the other party entitled to the benefits of the provision of
this Agreement affected unless such other party also has agreed
to such extension or waiver. No such waiver shall constitute a
waiver of, or estoppel with respect to, any subsequent or other
breach or failure to comply strictly with the provisions of
this Agreement. The failure of any party to insist on strict
compliance with this Agreement or to assert any of its rights
or remedies hereunder or with respect hereto shall not
constitute a waiver of such rights or remedies. Whenever this
Agreement requires or permits consent or approval by any party,
such consent or approval shall be effective if given in writing
in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 7.7.
SECTION 7.8 Survival. The representations and
warranties made by Silver in Sections 2.1, 2.2, 2.4, 2.5, 2.6,
2.7 and 2.8 shall survive the Closing until the expiration of
the statute of limitations period applicable to claims that may
be asserted against Silver in respect of the matters covered
thereby; the representations and warranties made by Silver Co.
in Sections 3.1, 3.2 and 3.5 shall survive the Closing until
the expiration of the statute of limitations period applicable
to claims that may be asserted against Silver Co. in respect of
the matters covered thereby; the representations and warranties
of Silver in Section 2.3, and of Silver Co. in Section 3.3,
shall survive indefinitely; no other representations and
warranties of the parties contained in this Agreement shall
survive the Closing. In addition, the covenants and agreements
in Section 4.5 and Article VII shall also survive the Closing
until the expiration of the statute of limitations period
applicable to claims that may be asserted in respect of the
matters covered thereby.
SECTION 7.9 Interpretation. When a reference is
made in this Agreement to Sections, Articles or Schedules, such
reference shall be to a Section, Article or Schedule (as the
case may be) of this Agreement unless otherwise indicated.
When a reference is made in this Agreement to a "party" or
"parties", such reference shall be to a party or parties to
this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
-24-
meaning or interpretation of this Agreement. Whenever the
words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words
"without limitation". The use of any gender herein shall be
deemed to be or include the other genders and the use of the
singular herein shall be deemed to be or include the plural
(and vice versa), wherever appropriate. The use of the words
"hereof", "herein", "hereunder" and words of similar import
shall refer to this entire Agreement, and not to any particular
article, section, subsection, clause, paragraph or other
subdivision of this Agreement, unless the context clearly
indicates otherwise. Notwithstanding anything herein to the
contrary, for purposes of this Agreement Silver shall not be
deemed to be a subsidiary or an affiliate of Silver Co., and
the subsidiaries, directors, officers, employees and affiliates
of Silver shall not be deemed to be subsidiaries, directors,
officers, employees or affiliates of Silver Co.
SECTION 7.10 Severability. If any provision of this
Agreement or the application thereof to any person or
circumstance is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions
hereof, or the application of such provision to persons or
circumstances other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect
and shall in no way be affected, impaired or invalidated
thereby, provided that, if any provision hereof or the
application thereof shall be so held to be invalid, void or
unenforceable by a court of competent jurisdiction, then such
court may substitute therefor a suitable and equitable
provision in order to carry out, so far as may be valid and
enforceable, the intent and purpose of the invalid, void or
unenforceable provision. To the extent that any provision
shall be judicially unenforceable in any one or more states,
such provision shall not be affected with respect to any other
state, each provision with respect to each state being
construed as several and independent.
SECTION 7.11 Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed to be
an original, and all of which together shall be deemed to be
one and the same instrument.
SECTION 7.12 Applicable Law. This Agreement and the
legal relations between the parties shall be governed by and
construed in accordance with the laws of the State of Delaware,
without regard to the conflict of laws rules thereof.
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IN WITNESS WHEREOF, the parties hereto have executed
this Exchange Agreement as of the date first above written.
SILVER KING COMMUNICATIONS, INC.
/s/ Steven H. Grant
By: Steven H. Grant
Title: Executive Vice President
SILVER MANAGEMENT COMPANY
/s/ Barry Diller
By: Barry Diller
Title: President
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EXHIBIT 7
[Home Shopping Network, Inc. Letterhead]
FOR IMMEDIATE RELEASE NOVEMBER 27, 1995
HSN/PR00436 CONTACT: LOUISE I. CLEARY
DILLER APPOINTED CHAIRMAN OF HSN'S BOARD OF DIRECTORS
ST. PETERSBURG, FLORIDA -- Home Shopping Network,
Inc. (NYSE:HSN) announced today that Barry Diller, currently an
HSN director, has been appointed as its new chairman of the
board. In addition, Diller and certain members of his proposed
management team have been granted options to purchase
approximately 15 million shares of the company's common stock
at a price of $8.50 per share.
HSN also announced that its board of directors has
been advised of a proposed transaction by Liberty Media
Corporation, which owns shares representing approximately 80
percent of the voting stock of HSN, in which Liberty would
transfer its HSN shares to Silver King Communications, Inc. in
exchange for securities of Silver King. Details of the
proposed exchange were not released, but consummation of the
transaction would be subject to certain conditions, including
the approval of Silver King shareholders. Diller became
chairman of the board and chief executive officer of Silver
King in August 1995. Silver King owns 12 television stations
which broadcast HSN's programming.
The board of directors of HSN will meet today to
consider any action it deems appropriate regarding this
proposed transaction.
# # #
EXHIBIT 8
FOR IMMEDIATE RELEASE
SILVER KING COMMUNICATIONS ANNOUNCES THAT IT HAS AGREED
TO MERGE WITH SAVOY PICTURES ENTERTAINMENT AND PURCHASE A
CONTROLLING INTEREST IN HOME SHOPPING NETWORK
New York, NY (November 27, 1995)--Silver King Communications,
Inc. (NASDAQ: SKTV) today entered into a merger agreement with
Savoy Pictures Entertainment, Inc. (NASDAQ: SPEI) pursuant to
which Savoy will become a wholly-owned subsidiary of Silver
King. In a separate action, Silver King today entered into an
agreement to acquire Liberty Media Corp's (NASDAQ: LBTYA)
controlling interest in Home Shopping Network, Inc. (NYSE:
HSN) through an exchange of Silver King stock and Liberty
Media's HSN stock. Silver King Communications and Home
Shopping Network will remain publicly traded companies.
Under the terms of the Savoy merger, stockholders of Savoy will
receive 0.2 shares of Silver King Common Stock per share of
Savoy Common Stock. Consummation of the merger is conditioned
upon receipt of stockholder approvals and necessary regulatory
approvals, including a temporary waiver of current broadcast
station ownership restrictions from the FCC.
Silver King has agreed to acquire Liberty Media's controlling
interest in HSN at the exchange ratio of 0.2764 shares of
Silver King Common Stock per share of HSN Common Stock owned by
Liberty Media and 0.3041 shares of Silver King Class B Stock
per share of HSN Class B stock owned by Liberty Media.
Consummation of the exchange is conditioned upon receipt of
Silver King stockholder approval and necessary regulatory
approvals.
Silver King Chairman Barry Diller said, "These steps will add
early fiber to the Company, quickening our ability to proceed
with our ambitions for the development of Silver King.
Obviously, I did then and do now believe in the future of
electronic retailing, just as I did then and do now believe in
the future of free, over-the-air broadcasting."
Savoy Pictures Chairman Victor Kaufman said, "We believe this
agreement is a sweeping step consistent with Savoy's stated
goal to concentrate more of its interests in television.
Placing Savoy in the hands of Barry Diller is both an
opportunity for Savoy shareholders and a chance to be part of a
company which, under Barry's guidance, will be a significant
force in the television business."
Upon completion of these transactions, current shareholders of
Savoy will own approximately six million newly-issued shares of
Silver King Common Stock representing nearly 20.8 percent of
the economic interest and six percent of the voting interest in
Silver King, on a fully diluted basis. The Shares to issued in
exchange for Liberty Media's HSN stock will be subject to the
terms of the stockholders agreement between Liberty Media and
Barry Diller.
Chemical Bank is the agent bank for Silver King and Savoy under
their respective credit facilities and will be the financial
advisor to the combined entity on revising the debt structure.
Savoy Pictures Entertainment, through its SF Broadcasting
Companies, owns a 75% interest in four VHF television stations:
WLUK (Green Bay), KHON (Honolulu), WVUE (New Orleans), WALA
(Mobile). Savoy owns rights to and participates in the
exploitaton of motion pictures through various means. The
Company is also in the television production and programming
business.
Home Shopping Network pioneered the television shopping
industry in 1982. Its 24-hour programming reaches
approximately 65 million households via cable affiliates and
broadcast station affiliates.
Silver King Communications, the nation's sixth largest
television group, owns and operates 12 independent full-power
UHF broadcast television stations which serve eight of the 12
largest markets in the United States, including New York, Los
Angeles, Chicago, and Philadelphia. The stations reach
approximately 28 million television households.
CONTACTS:
Silver King Communications, Inc:
Jason Stewart, Director of Corporate Communications
(212) 371-5999
Steven Grant, Chief Financial Officer (813) 573-0339
Savoy Pictures Entertainment, Inc:
Stacy Alper, Vice President and Secretary
(212) 247-5892
Home Shopping Network, Inc:
Louise Cleary, Director of Public Relations (813)
572-8585, ext. 7420
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EXHIBIT 9
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934*
Silver King Communications, Inc.
_______________________________________________________________________
(Name of Issuer)
Common Stock, par value $.01 per share
_______________________________________________________________________
(Title of Class of Securities)
827740101
_______________________________________________________________________
(CUSIP Number)
Stephen M. Brett, Esq. Pamela S. Seymon, Esq.
Senior Vice President and Wachtell, Lipton, Rosen &
General Counsel Katz
Tele-Communications, Inc. 51 West 52nd Street
5619 DTC Parkway New York, New York 10019
Englewood, CO 80111 (212) 403-1000
(303) 267-5500
_______________________________________________________________________
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 24, 1995
_______________________________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this
statement [X]. (A fee is not required only if the reporting
person: (1) has a previous statement on file reporting
beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment
*The remainder of this cover page should be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent
amendment containing information which would alter disclosures
provided in a prior cover page.
subsequent thereto reporting beneficial ownership of less than
five percent of such class. See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for
other parties to whom copies are to be sent.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
Note: This Statement constitutes an original report on
Schedule 13D of each of Barry Diller and the
Reporting Group (as defined in Item 2) and Amendment
No. 2 of a Report on Schedule 13D of Tele-
Communications, Inc.
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CUSIP No. 827740101
_______________________________________________________________________
(1) Names of Reporting Persons S.S. or I.R.S.
Identification Nos. of Above Persons
Tele-Communications, Inc.
84-1260157
_______________________________________________________________________
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
_______________________________________________________________________
(3) SEC Use Only
_______________________________________________________________________
(4) Source of Funds
_______________________________________________________________________
(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
_______________________________________________________________________
(6) Citizenship or Place of Organization
Delaware
_______________________________________________________________________
Number of (7) Sole Voting Power 0 shares
Shares Bene-
ficially ____________________________________________________________
Owned by (8) Shared Voting Power 2,503,618 shares
Owned by
Each ______________________________________________________________
Reporting (9) Sole Dispositive Power 0 shares
Person
_____________________________________________________________
With (10) Shared Dispositive Power 2,503,618 shares
_______________________________________________________________________
(11) Aggregate Amount Beneficially Owned by Each
Reporting Person
2,503,618 shares
_______________________________________________________________________
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [X]
-3-
Excludes shares beneficially owned by the executive
officers and directors of TCI. See Item 5. Excludes
options to purchase an aggregate of 1,895,847 shares
of Common Stock granted to Mr. Diller, none of which
are currently vested or exercisable and none of which
become exercisable within 60 days. The shares of
Common Stock issuable upon exercise of such options
represent approximately 23% of the outstanding Common
Stock as of June 26, 1995, treating the shares
subject to such options as outstanding.
_______________________________________________________________________
(13) Percent of Class Represented by Amount in Row (11)
28.0%
Because each share of Class B Stock generally is
entitled to ten votes per share while the Common
Stock is entitled to one vote per share, the
Reporting Persons may be deemed to beneficially own
equity securities of the Company representing
approximately 75% of the voting power of the Company.
_______________________________________________________________________
(14) Type of Reporting Person (See Instructions)
CO
-4-
CUSIP No. 827740101
_______________________________________________________________________
(1) Names of Reporting Persons S.S. or I.R.S.
Identification Nos. of Above Persons
Barry Diller
_______________________________________________________________________
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
_______________________________________________________________________
(3) SEC Use Only
_______________________________________________________________________
(4) Source of Funds
PF
_______________________________________________________________________
(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
______________________________________________________________________
(6) Citizenship or Place of Organization
United States
_______________________________________________________________________
Number of (7) Sole Voting Power 0 shares
Shares Bene-
ficially _____________________________________________________________
Owned by (8) Shared Voting Power 2,503,618 shares
Owned by
Each _____________________________________________________________
Reporting (9) Sole Dispositive Power 0 shares
Person
_____________________________________________________________
With (10) Shared Dispositive Power 2,503,618 shares
_______________________________________________________________________
(11) Aggregate Amount Beneficially Owned by Each
Reporting Person
2,503,618 shares
_______________________________________________________________________
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [X]
Excludes shares beneficially owned by the executive
officers and directors of TCI. See Item 5.
Excludes
-5-
options to purchase an aggregate of 1,895,847 shares
of Common Stock granted to Mr. Diller, none of which
are currently vested or exercisable and none of which
become exercisable within 60 days. The shares of
Common Stock issuable upon exercise of such options
represent approximately 23% of the outstanding Common
Stock as of June 26, 1995, treating the shares
subject to such options as outstanding.
_______________________________________________________________________
(13) Percent of Class Represented by Amount in Row (11)
28.0%
Because each share of Class B Stock generally is
entitled to ten votes per share while the Common
Stock is entitled to one vote per share, the
Reporting Persons may be deemed to beneficially own
equity securities of the Company representing
approximately 75% of the voting power of the Company.
_______________________________________________________________________
(14) Type of Reporting Person (See Instructions)
IN
-6-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Statement Of
TELE-COMMUNICATIONS, INC.
and
BARRY DILLER
Pursuant to Section 13(d) of the
Securities Exchange Act of 1934
in respect of
SILVER KING COMMUNICATIONS, INC.
This Report on Schedule 13D (the "Schedule 13D")
relates to the common stock, par value $.01 per share (the
"Common Stock"), of Silver King Communications, Inc., a
Delaware corporation (the "Company"). The Report on Schedule
13D originally filed by Tele-Communications, Inc., a Delaware
corporation ("TCI"), on August 15, 1994, as amended by
Amendment No. 1 thereto (collectively, the "TCI Schedule 13D"),
is hereby amended and supplemented to include the information
contained herein, and this Report constitutes Amendment No. 2
to the TCI Schedule 13D. In addition, this Report also
constitutes the initial Report on Schedule 13D of TCI and Mr.
Barry Diller, with respect to the Common Stock. Such persons
constitute a "group" for purposes of Rule 13d-5 under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), with respect to their respective beneficial ownership of
the Common Stock.
The summary descriptions contained in this Report of
certain agreements and documents are qualified in their
entirety by reference to the complete texts of such agreements
and documents, filed as Exhibits hereto and incorporated herein
by reference.
Item 1. Security and Issuer
The class of equity securities to which this
statement relates is the Common Stock of the Company, which has
its principal executive offices at 12425 28th Street North, St.
Petersburg, Florida 33716. The business of the Company is the
ownership and operation of television broadcast stations.
Pursuant to Rule 13d-3 promulgated under the Exchange Act, this
Report also relates to the shares of Common Stock issuable upon
(i) conversion of the 2,000,000 shares of the Company's Class B
Common Stock, par value $.01 per share ("Class B Stock") which
TCI has the right to acquire from RMS Limited Partnership
("RMS") upon the exercise of the Class B Option (as defined
below) granted to Liberty Media Corporation ("Liberty"), a
wholly owned subsidiary of TCI, by RMS and (ii) the exercise of
certain options to purchase up to 1,895,847 shares of the
Common Stock of the Company at an exercise price of $22.625
that the Company has granted to Mr. Diller (the "Options").
Each share of Common Stock is entitled to one vote per share.
Each share of Class B Stock is (a) convertible into one share
of Common Stock, (b) is generally entitled to ten votes per
share and (c) votes together with the Common Stock as a class,
except that (i) the holders of the Common Stock are entitled to
elect 25% of the members of the Board of Directors of the
Company voting as a separate class and (ii) so long as there
are at least 2,280,000 shares of Class B Stock outstanding, the
holders of the Class B Stock are entitled to vote as a separate
class with respect to certain fundamental corporate
transactions involving the Company, such as a merger,
reorganization, recapitalization, dissolution, or sale of
substantially all of its assets. According to the Company's
quarterly report on Form 10-Q, dated June 30, 1995 and filed
with the Securities and Exchange Commission (the "June 30
Company 10-Q"), as of June 26, 1995, there were 2,415,945
shares of Class B Stock outstanding. The Reporting Persons
have been advised that all such shares are held by RMS. In
connection with the exercise of the Class B Option, Liberty is
entitled to require RMS to convert the remaining shares of
Class B Stock owned by it at the time of exercise of the Class
B Option into a like number of shares of Common Stock, which
conversion would result in their being fewer than 2,280,000
shares of Class B Stock outstanding and in which event the
Reporting Persons believe that the holders of the Class B Stock
will no longer be entitled to a separate class vote with
respect to such fundamental corporate transactions and will
generally vote together as a class with the holders of the
Common Stock with respect to all matters presented to the
stockholders of the Company, with each share of Common Stock
entitled to one vote per share and each share of Class B Stock
entitled to ten votes per share. Accordingly, because the
Reporting Persons would own shares of Common Stock and Class B
Stock representing approximately 75% of the voting power of the
outstanding equity securities of the Company following the
exercise of the Class B Option and the conversion of the
remaining 415,945 shares of Class B Stock held by RMS not
subject to the Class B Option into shares of Common Stock, the
Reporting Persons believe that they would be able to
effectively control the outcome of the vote on substantially
all matters presented to the stockholders of the Company.
-2-
Item 2. Identity and Background
This Report is being filed by TCI and Mr. Diller.
The business address of TCI is 5619 DTC Parkway, Englewood,
Colorado 80111. TCI is principally engaged in the acquisition,
development and operation of cable systems, assets and
interests and cable television programming assets and
interests. Mr. Diller's present principal occupation is
Chairman of the Board of Directors and Chief Executive Officer
of the Company, and his principal address is 1940 Coldwater
Canyon, Beverly Hills, CA 90210. Mr. Diller is a citizen of
the United States. All references to Mr. Diller include all
entities beneficially owned by him.
The name, business address and present principal
occupation or employment and the name, address and principal
business of any corporation or other organization in which such
employment is conducted, of (i) each of the executive officers
and directors of TCI, (ii) each person controlling TCI, and
(iii) the executive officers of any corporation controlling
TCI, are set forth in Schedule 1 attached hereto and
incorporated herein by reference.
During the last five years, neither TCI nor Mr.
Diller nor, to the best of TCI's knowledge, any of the persons
named on Schedule 1, has (i) been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding or
administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities
law or finding any violation with respect to such law. To the
best knowledge of TCI, each of its executive officers and
directors is a citizen of the United States, except as
specifically set forth in Schedule 1 hereto.
TCI and Mr. Diller are hereinafter sometimes referred
to individually as a "Reporting Person" and are sometimes
referred to collectively as the "Reporting Persons" or the
"Reporting Group."
Liberty and Mr. Diller entered into an agreement,
dated as of August 24, 1995, with respect to their ownership of
equity securities of the Company (the "Stockholders Agreement",
a copy of which is attached as an Exhibit hereto and
incorporated by reference herein). The Stockholders Agreement
sets forth certain of the Reporting Persons' agreements with
respect to, among other things, dispositions, acquisitions and
voting of the equity securities of the Company (the "Company
-3-
Securities") beneficially owned by such Reporting Persons. As
a result of the Stockholders Agreement, each Reporting Person
may be deemed to share with each other Reporting Person
beneficial ownership of all Company Securities held by the
Reporting Persons and to constitute a "group" within the
meaning of Rule 13d-5 promulgated under the Exchange Act with
respect to the Common Stock. It is contemplated that the
Reporting Persons will enter into further definitive
documentation regarding the terms of the Stockholders
Agreement. Each Reporting Person disclaims beneficial
ownership of the Company Securities held by the other Reporting
Person.
Information contained herein with respect to each
Reporting Person and its executive officers, directors and
controlling persons, is given solely by such Reporting Person,
and no other Reporting Person has responsibility for the
accuracy or completeness of information supplied by such other
Reporting Person.
Item 3. Source and Amount of Funds or Other Consideration
The information contained in Item 3 of the TCI
Schedule 13D is hereby incorporated by reference herein.
As set forth below, as of August 24, 1995, Mr. Diller
acquired beneficial ownership of an aggregate of 220,994 shares
of Common Stock at a purchase price of $22.625 per share in
cash or $4,999,989.25 in the aggregate (the "Initial Shares).
The funds utilized by Mr. Diller in purchasing the Initial
Shares are personal funds.
As set forth below, as of August 24, 1995, Mr. Diller
has also acquired beneficial ownership of an aggregate of
220,994 additional shares of Common Stock at a purchase price
of $22.625 per share or $4,999,989.25 in the aggregate (the
"Additional Shares"). Of such aggregate purchase price, $2,210
is payable in cash and the remainder is payable by means of the
delivery to the Company of the Note (as defined below). See
Item 6.
Item 4. Purpose of Transaction
On February 11, 1993, Liberty, which was then an
independent publicly traded company and is now a wholly owned
subsidiary of TCI, acquired from RMS a transferable option (the
"Class B Option") to purchase 2,000,000 shares of Class B
Stock. As previously reported in the TCI Schedule 13D, the
Class B Option was amended in September 1994 to, among other
things, extend the exercise period and provide for certain
-4-
staged increases of the exercise price of the Class B Option.
The current exercise price of the Class B Option is $1.50 per
share, and such exercise price will increase to $1.75 on
February 12, 1996.
The Company's primary business is the ownership and
operation of television broadcast stations. The Communications
Act of 1934, as amended (the "Act"), and the related rules and
regulations of the Federal Communications Commission (the "FCC
Rules") currently prohibit any person or entity (i) holding a
5% or greater voting stock interest in, or (ii) serving as an
officer or director or (iii) entitled to representation on the
board of directors of, a cable television system, from holding
any such interest in a television broadcast station whose Grade
B contour overlaps in whole or in part the service area of such
cable system. TCI's ownership of substantial cable television
system assets makes it unlikely that Liberty or TCI would be
able to obtain the necessary consents or waivers under the FCC
Rules (as currently in effect) in order to exercise the Class B
Option and, by virtue of the special voting rights attributable
to the Class B Stock receivable upon exercise of the Class B
Option, assume voting control of the Company. Thus, as
previously disclosed, Liberty and TCI have, from time to time,
considered assigning the Class B Option to a third party who
would be qualified to assume voting control of the Company.
In August 1995 Mr. Diller and representatives of TCI
began informal discussions regarding the possibility of
entering into a joint venture controlled by Mr. Diller in order
to permit the exercise of the Class B Option and the assumption
by Mr. Diller of voting control of the Company. Pursuant to
the terms of the Class B Option, upon exercise of the Class B
Option, RMS will be required to convert all shares of Class B
Stock owned by it which are not subject to the Class B Option
into Common Stock. As a result, pursuant to the Company's
Restated Certificate of Incorporation, because there would be
less than 2,280,000 shares of Class B Stock outstanding, the
Reporting Persons believe that the holders of the Class B Stock
would vote with the holders of the Common Stock on
substantially all matters presented to stockholders of the
Company and would be entitled to cast ten votes per share upon
matters considered for approval at any meeting of stockholders.
See Item 1.
On August 24, 1995 Mr. Diller and representatives of
TCI met to discuss a proposal (the "Proposal") pursuant to
which, among other things, Mr. Diller would make an equity
investment in the Company and be granted certain options to
acquire Common Stock and, in connection therewith, Mr. Diller
would agree to become Chairman of the Board and Chief Executive
-5-
Officer of the Company. See Item 6. Subsequently, at a
special meeting of the Board of Directors of the Company on
August 24, 1995, representatives of TCI outlined the Proposal
to the Board and Mr. Diller discussed with the Board his views
regarding the future direction of the Company's business. In
addition, representatives of TCI also outlined certain proposed
arrangements between Mr. Diller and TCI pursuant to the
Stockholders Agreement, which arrangements are further
described in Item 1 and Item 6 of this Report. After review of
the Proposal and such arrangements, the Board of Directors
informed the Reporting Persons that it had approved the
Proposal (including the purchase of the Initial Shares and the
Additional Shares and the grant of the Options to Mr. Diller)
and the arrangements between Mr. Diller and TCI (including for
purposes of Section 203 of the Delaware General Corporation
Law), and that Mr. Diller had been appointed Chairman of the
Board and Chief Executive Officer the Company.
Pursuant to the Stockholders Agreement, Mr. Diller
will be entitled to exercise voting control over all equity
securities of the Company beneficially owned or to be
beneficially owned by TCI and him, including the shares of
Class B Stock which will be acquired pursuant to the exercise
of the Class B Option. Mr. Diller and the Company intend to
file promptly the necessary applications with the FCC for the
transfer of control of the Company to an entity in which he
will exercise voting control; and upon receipt of such approval
and such other regulatory approvals as may be required
(including, if applicable, pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended), Mr. Diller
intends to cause the exercise of the Class B Option and to
acquire voting control of the Company. Following the exercise
of the Class B Option, subject to applicable law (including the
FCC Rules), Mr. Diller intends to seek majority representation
on the Board of Directors of the Company. See Item 6.
Except as otherwise disclosed in this Schedule 13D,
the Reporting Persons have not made any decision concerning
their course of action with respect to the Company. The
Reporting Persons could decide, depending on market and other
factors, to dispose of shares of the Company Securities
beneficially owned by each of them, to acquire additional
Company Securities, or to take any other available course of
action. In this regard, the Reporting Persons intend to
continuously review their investment in the Company and may in
the future determine to change their present plans and
proposals relating to the Company, including determining to
abandon or delay their plans to acquire control of the Company.
In reaching any conclusion as to their future course of action,
the Reporting Persons will take into consideration various
-6-
factors, including without limitation the Company's business
and financial condition and prospects, other developments
concerning the Company, the effect of the Act and the FCC
regulations and policies of the Federal Communications
Commission (the "FCC") applicable to the Company and the
Reporting Persons, other business opportunities available to
the Reporting Persons, developments with respect to the
business of the Reporting Persons, developments in the
television industry generally, general economic conditions and
money and stock market conditions.
Other than as described herein, none of Mr. Diller,
TCI, or to the best of TCI's knowledge, any of its executive
officers, directors or controlling persons, have any present
plans or proposals which relate to or would result in: (a) the
acquisition by any person of additional securities of the
Company, or the disposition of securities of the Company; (b)
an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of
its subsidiaries; (c) a sale or transfer of a material amount
of assets of the Company or of any of its subsidiaries; (d) any
change in the present Board of Directors or management of the
Company, including any plans or proposals to change the number
or terms of directors or to fill any existing vacancies on the
Board of Directors of the Company; (e) any material change in
the present capitalization or dividend policy of the Company;
(f) any other material change in the Company's business or
corporate structure; (g) changes in the Company's charter, by-
laws or instruments corresponding thereto or other actions
which may impede the acquisition of control of the Company by
any person; (h) causing a class of securities of the Company to
be deleted from a national securities exchange or to cease to
be authorized to be quoted in any inter-dealer quotation system
of a registered national securities association; (i) a class of
equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Exchange Act; or (j) any action similar to any of those
enumerated above.
Notwithstanding anything contained herein, the
Reporting Persons reserve the right, depending on other
relevant factors, to purchase additional securities of the
Company, dispose of all or a portion of their holdings of
securities in the Company, or change their intention with
respect to any and all of the matters referred to in the
preceding paragraph.
-7-
The summary description contained herein is qualified
in its entirety by reference to the Exhibits attached hereto,
which are hereby incorporated by reference herein.
Item 5. Interest in Securities of the Issuer
The information contained in Item 5 of the TCI
Schedule 13D and in Item 3 above is hereby incorporated by
reference herein.
TCI currently holds 61,630 shares of Common Stock and
holds the Class B Option, which is currently exercisable, to
acquire 2,000,000 shares of Class B Stock from RMS at a current
exercise price of $1.50 per share, which shares, based upon
information contained in the June 30 Company 10-Q, represent
approximately 24% of the outstanding Common Stock. TCI's
ability to exercise the Class B Option is subject to, among
other things, the receipt of required governmental approvals,
including under the FCC Rules to the change in control of the
Company that would be deemed to occur under applicable FCC
rules as a result of TCI's exercise of the Class B Option. The
exercise of the Class B Option, as well as the voting,
disposition and other transfer of the shares of Class B Stock
underlying the Class B Option, are subject to the terms of the
Stockholders Agreement.
As described in Item 6 below, Mr. Diller has acquired
beneficial ownership of the 220,994 Initial Shares and the
220,994 Additional Shares, representing an aggregate of 441,988
shares of Common Stock. Based on information contained in the
June 30 Company 10-Q and including the shares of Common Stock
beneficially owned by Mr. Diller as outstanding, such shares
represent approximately 6% of the outstanding Common Stock.
Such amount does not include the options to purchase an
additional 1,895,847 shares of Common Stock, none of which is
currently vested and none of which is currently exercisable or
becomes exercisable in the next 60 days. Based on information
contained in the June 30 Company 10-Q and including the shares
of Common Stock subject to the Options as well as the shares of
Common Stock beneficially owned by Mr. Diller as outstanding,
the shares of Common Stock subject to the Options, together
with the Initial Shares and the Additional Shares, represent
approximately 26% of the outstanding Common Stock.
Based on information contained in the June 30 Company
10-Q and including the shares of Class B Stock subject to the
Class B Option as outstanding shares of Common Stock as well as
the shares of Common Stock beneficially owned by Mr. Diller,
TCI and Mr Diller collectively beneficially own shares of
Common Stock representing approximately 28% of the outstanding
-8-
Common Stock. Assuming that Mr. Diller and Liberty elect to
require the holder of the remaining 415,945 shares of Class B
Stock not subject to the Class B Option to convert such shares
into Common Stock in connection with the exercise of the Class
B Option, the Company Securities beneficially owned by the
Reporting Persons would constitute approximately 75% of the
voting power of the outstanding equity securities of the
Company. Such amounts do not include the Options, none of
which is currently vested and none of which is currently
exercisable or becomes exercisable in the next 60 days.
The summary description contained herein is qualified
in its entirety by the Exhibits attached hereto, which are
hereby incorporated by reference herein.
Item 6. Contracts, Arrangements, Understandings or
Relationship with Respect to the Securities of the
Issuer
The information set forth in Item 2 and Item 4 above
is hereby incorporated by reference herein.
Pursuant to the Stockholders Agreement, Liberty and
Mr. Diller will form an entity (the "Silver Company"), to which
Liberty will contribute the Class B Option as well as an amount
in cash equal to the aggregate exercise price thereof, and Mr.
Diller will contribute an amount in cash to be agreed upon.
Mr. Diller will initially hold a common equity interest in the
Silver Company constituting all of the voting stock of the
Silver Company, and Liberty will hold a convertible non-voting
preferred participating equity interest. Mr. Diller will
control the Company Securities held by the Silver Company,
except that, subject to applicable law, the approval of both
Liberty and Mr. Diller will be required in connection with
certain Fundamental Matters relating to the Company (as set
forth in the Stockholders Agreement). Liberty and Mr. Diller
have agreed to use all reasonable efforts to seek and obtain
approval under FCC rules and regulations for the exercise of
the Class B Option.
At such time as Liberty may be permitted to exercise
full ownership and control over the Company Securities owned by
it (a "Change in Law"), including its pro rata share of Company
Securities held by the Silver Company, Liberty's equity
interest in the Silver Company will be converted into voting
common equity of the Silver Company having the same pro rata
rights, powers and preferences as Mr. Diller's interest in the
Silver Company, and Liberty or its designees will purchase Mr.
Diller's equity interest in the Silver Company for an amount
equal to the amount invested by Mr. Diller in the Silver
-9-
Company plus interest thereon at the prime rate in effect from
time to time from the date of such investment to the date of
such purchase.
The Stockholders Agreement also provides that Mr.
Diller is entitled to exercise voting authority and authority
to act by written consent over all Company Securities owned by
any of the Reporting Persons and certain of their affiliates on
all matters submitted to a vote of the Company's stockholders
or by which the Company's stockholders may act by written
consent. In connection therewith, Liberty will provide Mr.
Diller with a conditional proxy, which proxy shall be valid for
the full term of the Stockholders Agreement and will be
irrevocable. The Reporting Persons have agreed to take, and to
cause certain of their affiliates to take, all reasonable
actions required, subject to applicable law, to prevent the
taking of any action by the Company with respect to a
Fundamental Matter without the consent of each of Mr. Diller
and Liberty and, following a Change in Law, to elect a slate of
directors of the Company, two of whom will be designated by
Liberty and the remainder of whom will be designated by Mr.
Diller. Subject to applicable law and fiduciary duties,
Liberty will use its reasonable best efforts to cause its
designees on the Board of Directors of the Company to vote in
the manner instructed by Mr. Diller with respect to any matter
presented to the Board of Directors, except with respect to
Fundamental Matters and certain matters relating to Mr.
Diller's employment with the Company.
In addition, pursuant to the Stockholders Agreement,
Mr. Diller may exchange shares of Common Stock owned by him and
certain of his affiliates for shares of Class B Stock owned by
Liberty or held by the Silver Company, provided that, after
such exchange, Liberty will not cease to own Company Securities
(including its pro rata portion of any Company Securities held
by the Silver Company) constituting at least 50% of the total
voting power of the Company. The Stockholders Agreement also
contains provisions applicable to Mr. Diller and Liberty
relating to rights of first refusal on permitted sales of
Company Securities and, under certain limited circumstances,
the right of Mr. Diller to require Liberty to purchase his
Company Securities.
The foregoing summary description of certain
provisions of the Stockholders Agreement is qualified in its
entirety by reference to the definitive term sheet of the
Stockholders Agreement, attached hereto as an Exhibit and
incorporated herein by reference.
-10-
The Company and Mr. Diller entered into a definitive
term sheet, dated as of August 24, 1995 (the "Equity
Compensation Agreement"), regarding Mr. Diller's purchase of
shares of Common Stock from the Company and the granting to Mr.
Diller of certain options to purchase Common Stock of the
Company, as well as Mr. Diller's agreement to become the
Chairman of the Board of Directors and Chief Executive Officer
of the Company. The definitive term sheet regarding such
agreement is set forth as an Exhibit hereto and is hereby
incorporated herein by reference. It is contemplated that the
Company and Mr. Diller will enter into further definitive
documentation regarding the terms of the Equity Compensation
Agreement.
On August 24, 1995, pursuant to the Equity
Compensation Agreement, Mr. Diller acquired beneficial
ownership of the 220,994 Initial Shares at a purchase price of
$22.625 per share, for an aggregate purchase price of
$4,999,989.25 million.
Immediately following Mr. Diller's acquisition of
beneficial ownership of the Initial Shares but prior to Mr.
Diller becoming Chairman of the Board and Chief Executive
Officer of the Company, Mr. Diller (i) acquired beneficial
ownership of 220,994 Additional Shares at a purchase price of
$22.625 per share payable by delivery of the Note (as defined
below) plus the sum of $2,210 payable in cash and (ii) was
granted the Options to purchase an aggregate of up to an
additional 1,895,847 shares of Common Stock at an exercise
price of $22.625 per share. The non-cash purchase price for
the Additional Shares is in the form of a non-interest bearing
promissory note of Mr. Diller (the "Note") in the principal
amount of $4,997,779.25. The Note is non-recourse but will be
secured by the Additional Shares and will be initially
oversecured by a portion of the Initial Shares purchased by
Diller having a fair market value on the purchase date of 20%
of the principal amount of the Note (the "Excess Shares"). The
Note may be prepaid in whole or in part at any time without
penalty; upon payment of the first $2,498,889.63 the security
interest on 50% of the Additional Shares and on all of the
Excess Shares will be released. All amounts outstanding under
the Note will mature on the earlier to occur of (i) the
termination of Mr. Diller's employment (x) by the Company for
Cause (as defined in the Equity Compensation Agreement) (which
shall be the only basis for the Company's termination of Mr.
Diller's employment) or (y) prior to the Control Date (as
defined in the Equity Compensation Agreement), by Mr. Diller
without Good Reason (as defined in the Equity Compensation
Agreement) and (ii) August 24, 1997. In addition, Mr. Diller
has been granted a bonus arrangement, contractually independent
-11-
from the Note, under which he will be paid (i) on August 24,
1996, a bonus of $2,498,989.63, and (ii) on August 24, 1997, a
bonus of $2,498,989.62, except that both bonuses will be paid
immediately (to the extent not previously paid) upon a Change
in Control (as defined in the Equity Compensation Agreement) of
the Company or the termination of Mr. Diller's employment with
the Company for any reason other than (a) by the Company for
Cause or (b) by Mr. Diller prior to the Control Date without
Good Reason. There is no right to offset the note payments
against the bonuses, either on the part of Mr. Diller or on the
part of the Company.
The Options vest in four equal annual installments
commencing on the first anniversary of the date of grant, and
the Options are exercisable until the tenth anniversary of the
date of grant (subject to earlier termination in the
circumstances described below). The number of shares included
in the Initial Shares, the Additional Shares and the shares
subject to purchase under the Options are equal to 20% of the
outstanding common equity securities of the Company, on a fully
diluted basis, on the date of issuance of the Options. The
Options have been granted in tandem with the grant of an
equivalent number of comparable stock appreciation rights
vesting according to the same schedule as the Options, which
SARs shall become exercisable only in the event of the
occurrence of a Change in Control of the Company (the
"Conditional SARs"). All unvested Options (as well as the
Conditional SARs) become vested and exercisable upon the
occurrence of a Change in Control of the Company. The number
and type of shares subject to the Options (as well as the
Conditional SARs) and/or the applicable exercise price are
subject to appropriate adjustment in the event of a stock
split, stock dividend, reclassification or similar event
occurring after the date of issuance.
The Equity Compensation Agreement provides that, to
the extent that Mr. Diller becomes obligated to pay any taxes
under Section 4999 of the Internal Revenue Code (or any
successor or similar provision) in connection with such a
Change in Control of the Company, the Company shall make a
"gross-up" payment to Mr. Diller in respect of any such tax
payment.
The Options (as well as the Conditional SARs) are
non-transferable and may not be sold, assigned, transferred or
pledged without the consent of the Board of Directors of the
Company. The Options (as well as the Conditional SARs) will
terminate immediately upon termination of Mr. Diller's
employment by the Company for Cause or 90 days following a
termination of employment by Mr. Diller without Good Reason.
-12-
Mr. Diller will be entitled to customary rights for
the registration under the Securities Act of 1933 of the Common
Stock.
Following the execution of the equity arrangements
discussed above, Mr. Diller became the Chairman of the Board
and Chief Executive Officer of the Company. The Equity
Compensation Agreement provides that if Mr. Diller subsequently
so requests, the Board of Directors will appoint Mr. Diller as
Chairman of the Board and/or Chief Executive Officer and/or
President.
The Equity Compensation Agreement provides that Mr.
Diller will receive an amount in cash (up to $1 million) to
cover any taxes payable by Mr. Diller, on an after-tax basis,
by virtue of the purchase of Initial Shares and Additional
Shares at the per share purchase price. Mr. Diller initially
will forgo the receipt of any salary in respect of his
services. The Company will pay or reimburse Mr. Diller for his
out-of-pocket expenses related to his employment with the
Company on a basis consistent with Mr. Diller's historic
reimbursement. Subject to any required approvals of the Board
of Directors, Mr. Diller will also be entitled to participate
in any incentive compensation plan maintained by the Company
for its management and/or key employees. In addition, the
Company has agreed to indemnify (and advance expenses to)
Diller in connection with (i) his serving as Chairman of the
Board and/or Chief Executive Officer and/or President of the
Company and (ii) his and his affiliates entering into the
arrangements contemplated by the Equity Compensation Agreement
to the fullest extent permitted by law. If Mr. Diller's
employment is terminated by the Company for any reason other
than for Cause before August 24, 1996, Mr. Diller will receive
a severance payment equal to two times the amount, if any, by
which $4,999,989.25 exceeds the fair market value of the
Additional Shares; provided, that such severance payment shall,
in no event, exceed $2 million in the aggregate. The Company
will also reimburse Diller and his affiliates for the fees and
expenses of their counsel in connection with the negotiation of
the Equity Compensation Agreement and the definitive agreements
contemplated by the Equity Compensation Agreement.
The foregoing summary description of certain
provisions of the Equity Compensation Agreement is qualified in
its entirety by reference to the definitive term sheet of the
Equity Compensation Agreement, which is attached hereto as an
Exhibit and incorporated herein by reference.
-13-
Item 7. Material to be Filed as Exhibits
1. Written Agreement between TCI and Mr. Diller
regarding Joint Filing of Schedule 13D.
2. Definitive Term Sheet regarding Stockholders
Agreement, dated as of August 24, 1995, by and between Liberty
Media Corporation and Mr. Diller.
3. Definitive Term Sheet regarding Equity Compensation
Agreement, dated as of August 24, 1995, by and between the
Company and Mr. Diller.
4. Press Release issued by the Company and Mr. Diller,
dated August 25, 1995.
-14-
SIGNATURE
After reasonable inquiry and to the best of his knowledge
and belief, the undersigned certifies that the information in
this statement is true, complete and correct.
Dated: August 28, 1995
TELE-COMMUNICATIONS, INC.
By: /s/Peter R. Barton
Name:
Title:
/s/Barry Diller
Barry Diller
-15-
EXHIBIT 10
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934*
Silver King Communications, Inc.
______________________________________________________________
(Name of Issuer)
Common Stock, par value $.01 per share
______________________________________________________________
(Title of Class of Securities)
827740101
______________________________________________________________
(CUSIP Number)
Stephen M. Brett, Esq. Pamela S. Seymon, Esq.
Senior Vice President Wachtell, Lipton, Rosen & Katz
and General Counsel 51 West 52nd Street
Tele-Communications, Inc. New York, New York 10019
5619 DTC Parkway (212) 403-1000
Englewood, CO 80111
(303) 267-5500
______________________________________________________________
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 27, 1995
______________________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box [ ].
*The remainder of this cover page should be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
Check the following box if a fee is being paid with this
statement [ ]. (A fee is not required only if the reporting
Page 1 of 16 pages
person: (1) has a previous statement on file reporting
beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of less than
five percent of such class. See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
Note: This Statement constitutes Amendment No. 1 of a
Report on Schedule 13D of each of Barry Diller and
the Reporting Group and Amendment No. 3 of a Report
on Schedule 13D of Tele-Communications, Inc.
Page 2 of 16 pages
CUSIP No. 827740101
______________________________________________________________
(1) Names of Reporting Persons S.S. or I.R.S.
Identification Nos. of Above Persons
Tele-Communications, Inc.
84-1260157
______________________________________________________________
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
______________________________________________________________
(3) SEC Use Only
______________________________________________________________
(4) Source of Funds
OO
______________________________________________________________
(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
______________________________________________________________
(6) Citizenship or Place of Organization
Delaware
______________________________________________________________
Number of (7) Sole Voting Power 0 shares
Shares Bene- ___________________________________________
ficially (8) Shared Voting Power 13,441,054 shares
Owned by ___________________________________________
Each Report- (9) Sole Dispositive Power 0 shares
ing Person ___________________________________________
With (10) Shared Dispositive Power 13,441,054 shares
_______________________________________________________________
(11) Aggregate Amount Beneficially Owned by Each
Reporting Person
13,441,054 shares
_______________________________________________________________
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [X]
Excludes options to purchase 625,000 shares of Common
Stock granted to Mr. Diller on November 27, 1995,
which are subject to consummation of the
transactions, and options to purchase 1,895,847
Page 3 of 16 pages
shares of Common Stock granted on August 24, 1995,
none of which are currently vested or exercisable and
none of which will become exercisable within 60 days.
See Item 6.
_______________________________________________________________
(13) Percent of Class Represented by Amount in Row (11)
66%
Because each share of Class B Stock generally is
entitled to ten votes per share while the Common
Stock is entitled to one vote per share, the
Reporting Persons may be deemed to beneficially own
equity securities of the Company representing
approximately 89% of the voting power of the Company.
_______________________________________________________________
(14) Type of Reporting Person (See Instructions)
CO
Page 4 of 16 pages
CUSIP No. 827740101
_______________________________________________________________
(1) Names of Reporting Persons S.S. or I.R.S.
Identification Nos. of Above Persons
Barry Diller
______________________________________________________________
(2) Check the Appropriate Box if a Member of a Group
(a) [X]
(b) [ ]
______________________________________________________________
(3) SEC Use Only
______________________________________________________________
(4) Source of Funds
______________________________________________________________
(5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
______________________________________________________________
(6) Citizenship or Place of Organization
United States
______________________________________________________________
Number of (7) Sole Voting Power 0 shares
Shares Bene- __________________________________________
ficially (8) Shared Voting Power 13,441,054 shares
Owned by __________________________________________
Each Report- (9) Sole Dispositive Power 0 shares
ing Person __________________________________________
With (10) Shared Dispositive Power 13,441,054 shares
______________________________________________________________
(11) Aggregate Amount Beneficially Owned by Each
Reporting Person
13,441,054 shares
______________________________________________________________
(12) Check if the Aggregate Amount in Row (11) Excludes
Certain Shares [X]
Excludes options to purchase 625,000 shares of Common
Stock granted to Mr. Diller on November 27, 1995,
which are subject to consummation of the
transactions, and options to purchase 1,895,847
shares of Common Stock granted on August 24, 2995,
none of which are currently vested or exercisable and
none of which will become exercisable within 60 days.
See Item 6.
Page 5 of 16 pages
_______________________________________________________________
(13) Percent of Class Represented by Amount in Row (11)
66%
Because each share of Class B Stock generally is
entitled to ten votes per share while the Common
Stock is entitled to one vote per share, the
Reporting Persons may be deemed to beneficially own
equity securities of the Company representing
approximately 89% of the voting power of the Company.
_______________________________________________________________
(14) Type of Reporting Person (See Instructions)
IN
Page 6 of 16 pages
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment to
SCHEDULE 13D
Statement Of
TELE-COMMUNICATIONS, INC.
and
BARRY DILLER
Pursuant to Section 13(d) of the
Securities Exchange Act of 1934
in respect of
SILVER KING COMMUNICATIONS, INC.
This Report on Schedule 13D (the "Schedule 13D")
relates to the common stock, par value $.01 per share (the
"Common Stock"), of Silver King Communications, Inc., a
Delaware corporation (the "Company"). The Report on Schedule
13D originally filed by Tele-Communications, Inc., a Delaware
corporation ("TCI"), on August 15, 1994, as amended by
Amendment No. 1 and Amendment No. 2 thereto (collectively, the
"TCI Schedule 13D"), is hereby amended and supplemented to
include the information contained herein, and this Report
constitutes Amendment No. 3 to the TCI Schedule 13D. In
addition, the Report on Schedule 13D originally filed by each
of Mr. Barry Diller (the "Barry Diller Schedule 13D") and the
Reporting Group (the "Reporting Group Schedule 13D") on August
29, 1995 is hereby amended and supplemented to include the
information contained herein, and this Report constitutes
Amendment No. 1 to the Barry Diller Schedule 13D and the
Reporting Group Schedule 13D. Barry Diller and TCI (each, a
"Reporting Person") constitute a "group" for purposes of Rule
13d-5 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), with respect to their respective
beneficial ownership of the Common Stock and are collectively
referred to as the "Reporting Group." Capitalized terms not
defined herein have the meanings provided in the prior Reports
on Schedule 13D referred to in this paragraph.
The summary descriptions contained in this Report of
certain agreements and documents are qualified in their
entirety by reference to the complete texts of such agreements
and documents, filed as Exhibits hereto and incorporated herein
by reference. Information contained herein with respect to
each
Page 7 of 16 pages
Reporting Person and its executive officers, directors and
controlling persons is given solely by such Reporting Person,
and no other Reporting Person has responsibility for the
accuracy or completeness of information supplied by such other
Reporting Person.
Item 3. Source and Amount of Funds or Other Consideration
The information set forth in Item 3 of the TCI
Schedule 13D, the Barry Diller Schedule 13D and the Reporting
Group Schedule 13D is hereby amended and supplemented by adding
the following information:
The consideration to be paid by the Silver Company to
the Company in the Exchange (as defined below) is 17,566,702
shares of common stock (the "HSN Common Stock"), par value $.01
per share, of Home Shopping Network, Inc. ("HSN") for 4,855,436
shares of Common Stock and 20,000,000 shares of Class B common
stock, par value $.01 per share, of HSN (the "HSN Class B
Stock"), for 6,082,000 shares of Class B Stock, all of which
HSN securities (the "TCI HSN Shares") will be acquired by the
Silver Company immediately prior to the Exchange (as defined in
Item 4 below) in the merger (the "Liberty/Silver Merger") of
Liberty HSN, Inc., an indirect wholly-owned subsidiary of TCI,
with and into the Silver Company. The shares to be issued by
the Company in the Exchange ares sometimes referred to herein
as the "Company Exchange Securities". See Item 6.
Item 4. Purpose of Transaction
The information set forth in Item 4 of the TCI
Schedule 13D, the Barry Diller Schedule 13D and the Reporting
Group Schedule 13D is hereby amended and supplemented by adding
the following information:
Commencing in August 1995 and from time to time
thereafter, Mr. Diller and representatives of TCI have
discussed the possible acquisition by the Company of TCI's
equity interest in HSN, as well as the possible appointment of
Mr. Diller as the Chairman of the Board of HSN. On November
27, 1995, HSN announced that Mr. Diller had been appointed its
Chairman of the Board and that Mr. Diller and certain members
of his proposed management team had been granted options to
purchase shares of HSN Common Stock. In addition, at separate
meetings of the Boards of Directors of HSN and the Company held
on November 27, 1995, the HSN Board of Directors and the Board
of Directors of the Company approved the acquisition by the
Company of the TCI HSN Shares in a two step transaction. In
the first step, the Silver Company (the entity controlled by
Page 8 of 16 pages
Barry Diller in which Liberty owns a substantial equity stake,
in each case, pursuant to the Stockholders Agreement) would
acquire TCI's interest in HSN pursuant to an Agreement and Plan
of Merger, dated as of November 27, 1995, by and among the
Silver Company, Liberty Program Investments, Inc. and Liberty
HSN, Inc. (the "Liberty HSN Merger Agreement"). In the second
step, the TCI HSN Shares acquired by the Silver Company in the
Liberty/Silver Merger would be exchanged for the Company
Exchange Securities (the "Exchange") pursuant to an Exchange
Agreement, dated as of November 27, 1995, by and between the
Company and the Silver Company (the "Exchange Agreement").
Each of the Liberty HSN Merger Agreement and the Exchange
Agreement is filed as an Exhibit hereto and is incorporated
herein by reference.
In connection with the acquisition of the TCI HSN
Shares, the Company and Liberty requested the Board of
Directors of HSN to consider the proposed transaction and to
approve the acquisition of beneficial ownership of the TCI HSN
Shares by the Company, the Silver Company, Mr. Diller and
Liberty for purposes of Section 203 of the Delaware General
Corporation Law. The Reporting Persons were advised by HSN,
prior to there being any agreement, arrangement or
understanding relating to the acquisition of the TCI HSN
Shares, that the HSN Board of Directors, upon the
recommendation of a special committee of the independent
directors, had approved such transaction.
Separately, on November 27, 1995, the Board of
Directors of the Company approved a merger (the "Savoy Merger")
of a subsidiary of the Company with and into Savoy Pictures
Entertainment, Inc. ("Savoy"), pursuant to an Agreement and
Plan of Merger, dated as of November 27, 1995, by and among the
Company, a wholly-owned subsidiary of the Company and Savoy, as
a result of which Savoy would become a wholly-owned subsidiary
of the Company (the "Savoy Merger Agreement"). In connection
with the Savoy Merger Agreement, Liberty, Mr. Diller, Arrow
Holdings, LLC and the Silver Company entered into a voting
agreement, dated as of November 27, 1995 (the "Silver Savoy
Voting Agreement"), pursuant to which they agreed, among other
things, to vote in favor of certain matters to be submitted to
Company stockholders in connection with the Savoy Merger and
related transactions. Each of the Savoy Merger Agreement and
the Silver Savoy Voting Agreement is filed as an Exhibit hereto
and is incorporated herein by reference.
In connection with the Savoy Merger and the Exchange,
the Board of Directors has approved, and will submit to
stockholders of the Company for approval at a special meeting
of Company stockholders, among other matters, certain
Page 9 of 16 pages
amendments to the Company's Amended and Restated Certificate of
Incorporation (the "Company Charter") to increase the number of
authorized shares of Common Stock and Class B Stock and to
eliminate the provisions of the Company Charter providing that
the holders of the Common Stock and Class B Stock will each
vote as separate classes in connection with certain matters
specified in the Company Charter at any time that there are at
least 2,280,000 shares of Class B Stock outstanding.
In connection with the foregoing transactions,
Liberty and Mr. Diller entered into an amendment, dated as of
November 27, 1995 (the "First Amendment"), to the Stockholders
Agreement, filed as an Exhibit hereto and incorporated herein
by reference.
All of the Company Exchange Securities will become subject to
the terms of the Stockholders Agreement, as amended by the
First Amendment. In addition, Liberty and Mr. Diller have
entered into certain letter agreements regarding certain
regulatory matters in connection with the formation of the
Silver Company, which letter agreements are filed as Exhibits
hereto and incorporated herein by reference.
See also Item 6 for a description of certain
provisions of the First Amendment, the Exchange Agreement and
the Liberty HSN Merger Agreement relating to the matters
identified in paragraphs (a) through (j) of Item 4 of this
Schedule.
The foregoing summary descriptions are qualified in
their entirety by reference to the Exhibits attached hereto,
which are hereby incorporated by reference herein.
Item 5. Interest in Securities of the Issuer
The information set forth in Item 5 of the TCI
Schedule 13D, the Barry Diller Schedule 13D and the Reporting
Group Schedule 13D is hereby amended and supplemented by adding
the following information:
Upon consummation of the Liberty/Silver Merger and
the Exchange, the Silver Company will own an additional
4,855,436 shares of Common Stock and 6,082,000 shares of Class
B Stock, which shares, together with the 503,618 shares of
Common Stock and 2,000,000 shares of Class B Stock beneficially
owned by Liberty, Mr. Diller and the Silver Company (as
previously disclosed in the Schedule 13D), represent
approximately 66% of the outstanding Common Stock and Class B
Stock, based upon information contained in the Company's annual
report on Form 10-K, dated November 22, 1995 and filed with the
SEC (the "1995 10-K") and treating as outstanding the shares of
Page 10 of 16 pages
Company stock to be issued in the Exchange (but not the
approximately 6,000,000 shares of Common Stock to be issued in
the Savoy Merger).
Based on information contained in the 1995 10-K,
including the shares of Company stock to be issued in the
Exchange as outstanding and assuming that the Common Stock and
Class B Stock vote together as a single class, TCI, Mr. Diller
and the Silver Company collectively beneficially own shares of
Common Stock and Class B Stock representing approximately 89%
of the voting power of the equity securities of the Company.
In the event that the holders of the Common Stock and Class B
Stock vote separately, TCI, Mr. Diller and the Silver Company
collectively would beneficially own shares of Common Stock
representing approximately 45% of the voting power of the
outstanding Common Stock. As previously disclosed in the
Reporting Group Schedule 13D, upon exercise of the Class B
Option, Liberty is entitled to require the holder of the
remaining outstanding shares of Class B Stock to convert such
shares into a like number of shares of Common Stock.
The foregoing amounts do not include the Options or
the additional options to acquire up to 625,000 shares of
Common Stock (the "Additional Options") at an exercise price of
$30.75 per share granted to Mr. Diller on November 27, 1995,
which Additional Options are subject to consummation of the
Exchange and the Savoy Merger as well as approval by the
Company's stockholders. None of the Options or Additional
Options is currently vested or currently exercisable or becomes
exercisable in the next 60 days.
On August 29, 1995, Peter R. Barton, an Executive
Vice President of TCI and the President of Liberty, purchased
3,000 shares of Common Stock for $32.50 per share in an open
market transaction using personal funds.
Item 6. Contracts, Arrangements, Understandings or
Relationship with Respect to the Securities of the
Issuer
The information set forth in Item 6 of the TCI
Schedule 13D, the Barry Diller Schedule 13D and the Reporting
Group Schedule 13D is hereby amended and supplemented by adding
the following information, as well as the information set forth
in Item 4 above:
Pursuant to the First Amendment, Liberty and Mr.
Diller have agreed, among other things, to take all actions
reasonably necessary, including actions to be taken by Company
Page 11 of 16 pages
stockholders, to approve and consummate the transactions
contemplated by the Liberty HSN Merger Agreement, the Exchange
Agreement and the Savoy Merger Agreement.
Pursuant to the First Amendment, at any time
following consummation of the Exchange that Liberty is no
longer a subsidiary of TCI (and provided that a Change in Law
(as defined in the Stockholders Agreement) has not occurred),
but in no event prior to the earliest to occur of (i) the
termination of the Savoy Merger Agreement, (ii) the eighteen-
month anniversary of the consummation of the Savoy Merger, and
(iii) the consummation of the sale, transfer or other
disposition by the Company of that number of FCC licenses owned
or controlled by it that is required pursuant to FCC rules and
regulations, or in accordance with any conditions specified in
any waiver therefrom, as a result of the Savoy Merger, Liberty
may request by written notice to Mr. Diller and the Company
that Mr. Diller use all reasonable efforts to take and, subject
to any applicable fiduciary duties of Mr. Diller as a director
or officer of the Company, use all reasonable efforts to cause
the Company to undertake any restructuring of the Company's
assets, liabilities and businesses in order that Liberty would
be permitted to exercise its ownership rights (including voting
rights) with respect to the securities of the Company owned by
it (including its pro rata interest in any Company securities
held by the Silver Company) (a "Restructuring Transaction").
In the event that a Restructuring Transaction has not occurred
within 365 days following delivery of the notice described in
the previous sentence (or, if earlier, such time as Liberty
reasonably determines, after consultation with Mr. Diller, that
Mr. Diller has ceased to use his reasonable efforts to
consummate a Restructuring Transaction), and a Change in Law
has not otherwise occurred by such date, then, notwithstanding
the restrictions in the Stockholders Agreement regarding
"Transfers of Silver Securities," Liberty may sell any and all
of its Company securities (as well as its interest in the
Silver Company), subject only to (x) a right of first refusal
by Mr. Diller (or his designee), (y) Liberty's obligation, at
Mr. Diller's request, to exchange shares of Class B Stock held
by it for shares of Common Stock owned by Mr. Diller and
certain of his affiliates (without regard to the limitation in
the Stockholders Agreement that would permit Liberty to retain
shares of Company stock representing at least 50% of the total
voting power of the Company), and (z) Liberty's further
obligation to convert shares of Class B Stock into Common Stock
prior to such a sale (other than to Mr. Diller and certain of
his affiliates). A third party who acquires Company securities
or Silver Company securities from Liberty pursuant to the
previous sentence will acquire such securities free and clear
of any rights or obligations under the Stockholders Agreement,
Page 12 of 16 pages
other than certain registration rights with respect to Company
securities that are provided for in the Stockholders Agreement.
The First Amendment also sets forth certain
agreements between Liberty and Mr. Diller relating to the
Company's management structure in the event that a Change in
Law occurs.
The First Amendment also contains certain amendments
clarifying the Fundamental Matters.
In the First Amendment, Mr. Diller agrees to use his
reasonable best efforts, if requested by Liberty, to cause one
designee of Liberty to serve on the HSN Board of Directors
following the Liberty/Silver Merger.
Pursuant to the Liberty HSN Merger Agreement, Liberty
HSN will be merged with and into the Silver Company. In the
Liberty/Silver Merger, the TCI HSN Shares will be exchanged for
additional shares of Silver Company non-voting common stock.
Consummation of the merger is conditioned upon satisfaction of
regulatory requirements, as well as other conditions set forth
in the Liberty HSN Merger Agreement. In the Liberty HSN Merger
Agreement, the Silver Company has agreed not to amend or
otherwise alter or waive any of its rights or obligations under
the Exchange Agreement in any material respect, without the
prior written consent of Liberty HSN's parent.
Pursuant to the Exchange Agreement, the Silver
Company will exchange the TCI HSN Shares received in the
Liberty/Silver Merger for 4,855,436 shares of Common Stock and
6,082,000 shares of Class B Stock. Consummation of the
Exchange is conditioned upon Company stockholder approval of
matters related to the Exchange (including approval of
amendments to the Company Charter to authorize the Company
stock required to consummate the Exchange) and satisfaction of
regulatory requirements, as well as other conditions set forth
in the Exchange Agreement. The Silver Company has agreed not
to amend or otherwise alter or waive any of its rights or
obligations under the Liberty HSN Merger Agreement in any
material respect, without the prior written consent of the
Company.
In connection with the Exchange and the Savoy Merger,
the Company has granted Mr. Diller the Additional Options. The
Additional Options are subject to stockholder approval, as well
as to downward adjustment in the event that either the Exchange
or the Savoy Merger is not consummated. In the event that
neither transaction is consummated, the Additional Options will
be cancelled. The Additional Options vest in four equal annual
Page 13 of 16 pages
installments commencing on the first anniversary of the date of
grant, and the Additional Options are exercisable until the
tenth anniversary (subject to earlier termination in the
circumstances described below). The Additional Options have
been granted in tandem with the grant of an equivalent number
of comparable stock appreciation rights vesting according to
the same schedule as the Additional Options, which SARs shall
become exercisable only in the event of the occurrence of a
Change in Control of the Company (as defined in the Company's
1995 Stock Incentive Plan) (the "Conditional SARs"). All
unvested Additional Options (as well as the Conditional SARs)
become vested and exercisable upon the occurrence of a Change
in Control of the Company. The number and type of shares
subject to the Additional Options (as well as the Conditional
SARs) and/or the applicable exercise price are subject to
appropriate adjustment in the event of a stock split, stock
dividend, reclassification or similar event occurring after the
date of issuance. The Additional Options (as well as the
Conditional SARs) are nontransferable and may not be sold,
assigned, transferred or pledged without the consent of the
Board of Directors of the Company. The Additional Options (as
well as the Conditional SARs) will terminate immediately upon
termination of Mr. Diller's employment by the Company for Cause
or 90 days following a termination of employment by Mr. Diller
without Good Reason (each as defined in the 1995 Stock
Incentive Plan). Mr. Diller will be entitled to customary
rights for the registration under the Securities Act of 1933
for the Common Stock issued upon exercise of the Additional
Options.
The foregoing summary descriptions of each of the
First Amendment, the Savoy Merger Agreement, the Liberty HSN
Merger Agreement and the Exchange Agreement are qualified in
their entirety by reference to such agreements, which are filed
as Exhibits hereto and are incorporated herein by reference.
Reference is also made to the Silver Savoy Voting
Agreement and the two letter agreements regarding cooperation
in connection with certain regulatory matters between Mr.
Diller and Liberty, each of which is filed as an Exhibit hereto
and incorporated herein by reference.
Item 7. Material to be Filed as Exhibits
1. Written Agreement between TCI and Mr. Diller
regarding Joint Filing of Schedule 13D.*
_______________
* Previously filed.
Page 14 of 16 pages
2. Definitive Term Sheet regarding Stockholders
Agreement, dated as of August 24, 1995, by and
between Liberty Media Corporation and Mr. Diller.*
3. Definitive Term Sheet regarding Equity Compensation
Agreement, dated as of August 24, 1995, by and
between the Company and Mr. Diller.*
4. Press Release issued by the Company and Mr. Diller,
dated August 25, 1995.*
5. Letter Agreement, dated November 13, 1995, by and
between Liberty Media Corporation and Mr. Diller.
6. Letter Agreement, dated November 16, 1995, by and
between Liberty Media Corporation and Mr. Diller.
7. First Amendment to Stockholders Agreement, dated as
of November 27, 1995, by and between Liberty Media
Corporation and Mr. Diller.
8. Agreement and Plan of Merger, dated as of November
27, 1995, by and among Silver Management Company,
Liberty Program Investments, Inc. and Liberty HSN,
Inc.
9. Exchange Agreement, dated as of November 27, 1995, by
and between Silver Management Company and Silver King
Communications, Inc.
10. Agreement and Plan of Merger, dated as of November
27, 1995, by and among Silver King Communications,
Inc., Thames Acquisition Corp. and Savoy Pictures
Entertainment, Inc.
11. Voting Agreement, dated as of November 27, 1995, by
and among Certain Stockholders of the Company and
Savoy Pictures Entertainment, Inc.
Page 15 of 16 pages
SIGNATURE
After reasonable inquiry and to the best of his knowledge
and belief, the undersigned certifies that the information in
this statement is true, complete and correct.
Dated: November 30, 1995
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
Name: Stephen M. Brett
Title: Executive Vice
President and
General Counsel
/s/ Barry Diller
Barry Diller
Page 16 of 16 pages