EXHIBIT 10.6
SECOND AMENDMENT TO THE TAX SHARING AGREEMENT
by and among
AT&T CORP.,
LIBERTY MEDIA CORPORATION,
for itself and each member of the Liberty Group,
TELE-COMMUNICATIONS, INC.,
LIBERTY VENTURES GROUP LLC,
LIBERTY MEDIA GROUP LLC,
TCI STARZ, INC.,
TCI CT HOLDINGS, INC.
and
each Covered Entity listed on the signature pages hereof,
dated as of September 24, 1999
SECOND AMENDMENT TO THE TAX SHARING AGREEMENT
---------------------------------------------
This Second Amendment, dated as of September 24, 1999 (this "Second
Amendment"), to the Tax Sharing Agreement dated as of March 9, 1999, as amended
by the First Amendment (the "First Amendment") to the Agreement dated as of May
28, 1999 (the "Agreement") is entered into by and among AT&T Corp., a New York
corporation ("AT&T"), Liberty Media Corporation, a Delaware corporation
("Liberty"), for itself and on behalf of each member of the Liberty Group, Tele-
Communications, Inc., a Delaware corporation, Liberty Ventures Group LLC, a
Delaware limited liability company, Liberty Media Group LLC, a Delaware limited
liability company, TCI Starz, Inc., a Colorado corporation, TCI CT Holdings,
Inc., a Delaware corporation, each Covered Entity listed on the signature pages
hereof, and any entities which become parties to the Agreement pursuant to
Section 23 thereto. Unless otherwise stated herein, capitalized terms used in
this Second Amendment shall have the meaning ascribed to such terms in the
Agreement.
WHEREAS, the parties have entered into the Agreement, which governs
the sharing, allocation and reimbursement of federal, state, local and foreign
taxes by the members of the Common Stock Group and the Liberty Group;
WHEREAS, the Capital Stock Committee of the AT&T Board of Directors
has adopted the resolutions attached as Exhibit A to the Second Supplement to
the Inter-Group Agreement, dated as of September 24, 1999 (the "Second
Supplement"), approving and authorizing the repurchase by AT&T from time to time
of up to 135 million shares of Liberty Media Group Tracking Stock (as such
number shall be adjusted from time to time to reflect stock splits, stock
dividends, stock combinations and similar events affecting the Liberty Media
Group Tracking Stock), in accordance with the terms and conditions set forth in
the resolution of the Capital Stock Committee and the Second Supplement (the
"Stock Repurchase Program");
WHEREAS, the parties intend that certain Tax Items arising from or
related to the Stock Repurchase Program shall be considered Tax Items
attributable to the Liberty Group; and
WHEREAS the parties now wish to amend the Agreement in certain
respects to clarify the intent of the parties with respect to sharing,
allocation and reimbursement of federal, state, local and foreign taxes by the
members of the Common Stock Group and the Liberty Group and to make such other
amendments, as provided herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereby amend the Tax Sharing Agreement and agree as follows:
1. The Agreement, as amended by the First Amendment, is amended by
inserting in Section 1: "`Repurchase Transactions' shall have the meaning set
forth in the Second Supplement."
2. The Agreement, as amended by the First Amendment, is amended by
inserting in Section 3(d)(i) the words "the adoption by the Capital Stock
Committee of the AT&T Board of Directors of the resolutions attached as Exhibit
A to the Second Supplement or any action taken by AT&T or any other member of
the Common Stock Group in good faith in accordance with the terms of the Second
Supplement or Second Amendment in connection with the Stock Repurchase Program
or any Repurchase Transaction or" after the words "(except in the case of
clauses (i), (ii) and (iii), to the extent arising out of or relating to" and
before the words "actions taken by AT&T at the request of Liberty...."
3. The Agreement, as amended by the First Amendment, is amended by
inserting as Section 3(d)(xi):
"(xi) Liberty Stock Repurchase Program. Except as set forth in the
--------------------------------
second sentence of this Section 3(d)(xi) with respect to the Excluded Buyback
Tax Items (as defined below) and in addition to (but without duplication of) any
Tax Item for which Liberty is responsible (other than pursuant to this Section
3(d)(xi)) under this Agreement, any Tax Item (including, without limitation, any
gain recognized under Code Section 311(b) and any fee or interest income)
arising from or relating to: (I) any agreement required to be entered into by
AT&T in connection with any Repurchase Transaction or the negotiation, review,
execution or delivery of the Second Amendment or the Second Supplement; (II) any
Repurchase Transaction entered into in accordance with the terms of the Second
Supplement and the applicable Repurchase Notice (as defined in the Second
Supplement); (III) any action taken in good faith by AT&T or any member of the
Common Stock Group in accordance with the terms of the Second Supplement or the
Second Amendment; (IV) AT&T's performance of its obligations under the Second
Supplement (or the Second Amendment) relating to the Stock Repurchase Program in
accordance with the terms of the Second Supplement (or the Second Amendment);
(V) any transaction undertaken by any member of the Liberty Group in connection
with the Stock Repurchase Program, any Repurchase Transaction or any transaction
related thereto; (VI) any excess loss account in the stock of Liberty or any
other member of the Liberty Group; and (VII) any excess loss account in the
stock of any member of the Common Stock Group to the extent that such excess
loss account would not have existed but for the creation or increase in the
excess loss accounts, if any, in the stock of Liberty and the Covered Entities
(to the extent such stock in the Covered Entities is held directly or indirectly
by Liberty Ventures Group LLC or TCI), determined on a collective basis, shall
be for the account of the Liberty Group, and Liberty shall pay AT&T any Tax (or
any reduction in any Tax refund, credit or other benefit) attributable thereto.
Any Tax Item arising from or relating to: (A) any excess loss account in the
stock of any member of the Common Stock Group (except as provided in clause
(VII) above of this Section 3(d)(xi)) or (B) the disposition by any member of
the Common Stock Group in a Repurchase Transaction of Liberty Media Group
Tracking Stock held for the account of the Common Stock Group (the foregoing Tax
Items specified in this sentence shall be referred to as "Excluded Buyback Tax
Items"), shall be for the account of AT&T.
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4. The words "the date hereof" shall be deleted in each place that
they appear in the Agreement and in lieu thereof shall be inserted the words
"March 9, 1999."
5. Except as otherwise expressly provided herein, the Agreement
shall continue in full force and effect without modification.
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IN WITNESS WHEREOF, each of the parties has caused this Second
Amendment to be executed by its respective duly authorized officer as of the
date first set forth above.
AT&T CORP.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title:
LIBERTY MEDIA CORPORATION, for itself and for
each member of the Liberty Group
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
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Each of the Covered Entities listed below on this page hereby executes this
Second Amendment as a member of the Liberty Group to acknowledge that such
Person is bound by this Second Amendment as a member of the Liberty Group:
LIBERTY SP, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
LIBERTY AGI, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
LMC INTERACTIVE, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
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TELE-COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title:
LIBERTY VENTURES GROUP LLC
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title:
LIBERTY MEDIA GROUP LLC
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
TCI STARZ, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title:
TCI CT HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
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