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EXHIBIT 6
November 27, 1995
LIBERTY MEDIA CORPORATION
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Mr. Xxxxx Xxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Dear Sir:
Reference is made to the agreement between Liberty Media
Corporation ("Rockies") and Xxxxx Xxxxxx ("Xxxxxxx"), 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 Xxxxxxx 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
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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 Xxxxxxx 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 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
Xxxxxxx or Newco and, in the event Xxxxxxx or Newco
receive any proceeds from an attempted disposition of
such Pledged Shares, then Xxxxxxx 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 Xxxxxxx
will have a right to require Rockies to purchase, the
Pledged Silver Company Shares at any
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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, Xxxxxxx 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 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, Silver
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 divesture 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
Xxxxxxx and Silver that Xxxxxxx use all reasonable
efforts to take, and, subject to any applicable
fiduciary duties of Xxxxxxx, 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 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
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(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
Xxxxxxx, that Xxxxxxx has ceased to use his
reasonable efforts to 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
Stockholders 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
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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 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) Xxxxxxx 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
Xxxxxxx (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
Xxxxxxx (or abstains from voting) and the
outcome of such vote is inconsistent with
such preference (including, except as set
forth below, decisions relating to Xxxxxxx'x
employment with Silver), in either case other
than (x) any decision to terminate Xxxxxxx'x
employment with Silver for Cause, (y) any
decision relating to Xxxxxxx'x compensation
by Silver or any of its subsidiaries (except
as provided for by the Silver Term Sheet), or
(z) any decision relating to a Fundamental
Matter (except as set forth in (x), (y) and
(z) above, a "Qualifying Disagreement"), then
Xxxxxxx shall be entitled to deliver notice
of his election (a "Management Election") to
exercise his management
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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 Xxxxxxx:
(A) Xxxxxxx 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 Xxxxxxx, 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
Xxxxxxx.
(iii) Xxxxxxx 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)
Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx and/or the Dodgers Stockholder
Group on the Silver Board of Directors shall
immediately resign (other than the
representative(s) to be designated by Xxxxxxx
pursuant to clause (i)) and (B)
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following a Management Election, if so
requested by Xxxxxxx, 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 Xxxxxxx'x 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 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
entertainment products, services and
programming, and electronic
retailing."
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6. Covenant of Xxxxxxx. Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx hereby consents and agrees to the
taking of any action by any of Xxxxxxx, 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 Xxxxxxx (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 Xxxxxxx
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 cause
the conditions to each of the respective parties'
obligations to consummate the foregoing transactions
to be satisfied.
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 Xxxxxxx 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
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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/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
ACCEPTED AND AGREED
this 27th day of November, 1995
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
