As filed with the Securities and Exchange Commission on January 17, 1995
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
------------------------
AMENDMENT NO. 14
to
SCHEDULE 14D-1(*)
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
QVC, INC.
(Name of Subject Company)
QVC PROGRAMMING HOLDINGS, INC.
COMCAST CORPORATION
TELE-COMMUNICATIONS, INC.
(Bidders)
Common Stock, $.01 Par Value Per Share
(Title of Class of Securities)
747262 10 3
(CUSIP Number of Class of Securities)
Stanley L. Wang Stephen M. Brett
Comcast Corporation Tele-Communications, Inc.
1500 Market Street 5619 DTC Parkway
Philadelphia, PA 19102 Englewood, CO 80111
(215) 665-1700 (303) 267-5500
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Bidder)
------------------------
Copies to:
Dennis S. Hersch Frederick H. McGrath
Davis Polk & Wardwell Baker & Botts, L.L.P.
450 Lexington Avenue 885 Third Avenue
New York, NY 10017 New York, NY 10022
(212) 450-4000 (212) 705-5000
* This Statement also constitutes Amendment No. 15 to the Schedule 13D filed
by Tele-Communications, Inc. and Amendment No. 36 to the Schedule 13D filed
by Comcast Corporation in each case with respect to the securities of the
Subject Company.
QVC Programming Holdings, Inc., Comcast Corporation and
Tele-Communications, Inc. hereby amend and supplement their Tender Offer
Statement on Schedule 14D-1 filed with the Securities and Exchange Commission
on August 11, 1994 (as previously amended and supplemented, the "Schedule
14D-1") with respect to Bidders' Offer to Purchase for cash all outstanding
shares of Common Stock and Preferred Stock of the Company.
<PAGE>
Information contained in the Schedule 14D-1 as hereby amended and
supplemented with respect to Comcast, Liberty, TCI and the Purchaser and their
respective executive officers, directors and controlling persons is given
solely by such person, and no other person has responsibility for the accuracy
or completeness of information supplied by such other persons.
Capitalized terms used but not defined herein have the meaning
assigned to them in the Offer to Purchase and the Schedule 14D-1.
Item 4. Source and Amount of Funds or Other Consideration.
(a) and (b) The information set forth under "Special Factors
- -- Financing of the Transaction" in the Offer to Purchase is hereby amended
and supplemented to include the information set forth under Item 10 of this
Amendment and to include the following information:
In connection with the Offer, on January 13, 1995, Comcast entered
into a commitment letter (together with the Summaries of Proposed Terms and
Conditions attached thereto, the "Commitment Letter") with certain lenders
(each, a "Managing Agent" and collectively, the "Managing Agents"), pursuant to
which the Managing Agents have agreed, subject to the terms and conditions set
forth therein, to provide the Purchaser with a multi-draw term loan credit
facility in the aggregate principal amount of $1,100,000,000 (the "Tender
Offer Facility" and loans extended thereunder, the "Tender Loans"), and to
provide the Surviving Corporation with a credit facility in the aggregate
principal amount of $1,200,000,000 (the "Permanent Facility"). The proceeds of
the Tender Offer Facility, except for the amount of the Holdback (as
hereinafter defined), are available to be used to finance the purchase of the
Shares pursuant to the Offer. The proceeds of the Permanent Facility are
available to be used to repay the Tender Offer Facility, to pay other amounts,
including merger consideration and transaction costs payable in connection
with the Merger, to issue letters of credit and for general corporate purposes.
The Tender Offer Facility and the Permanent Facility will be
provided pursuant to the terms of, and shall become effective only upon the
execution and delivery of, mutually satisfactory definitive loan documentation
incorporating terms and conditions set forth in the Commitment Letter. It is
expected that the definitive documentation for the Tender Offer Facility will
contain a condition to the Managing Agents' obligations to advance funds under
the Tender Offer Facility that the definitive documentation for the Permanent
Facility is substantially complete.
In addition to the provisions described below, the definitive
documentation relating to the Tender Offer Facility and the Permanent Facility
will contain, among other things, customary representations and warranties,
expense and indemnification provisions and events of default. The definitive
documentation for the Tender Offer Facility and the Permanent Facility will
also contain standard provisions for illegality, inability to determine rate,
indemnification for break funding and increased costs or reduced return,
including without limitation, those arising from reserve requirements, taxes
and capital adequacy.
The Tender Offer Facility. The Tender Loans will mature on the
date which is the earliest of (a) 180 days after the date on which the
purchase of Shares is made pursuant to the Offer, (b) the date of the
consummation of the Merger and (c) the date of the abandonment of the Merger.
A portion of the Tender Offer Facility, as shall be determined by the Managing
Agents to be sufficient to pay, among other things, all interest and fees for
three months from the date of the initial Tender Loans, shall be held back
(the "Holdback") from the initial availability under the Tender Offer
<PAGE>
Facility; provided, that if Comcast guarantees the payment of interest on the
Tender Loans and fees owing to the Managing Agents under the Tender Offer
Facility, the amount of the Holdback shall be zero.
The Tender Loans will be secured by a pledge of all Shares owned
by the Purchaser, including the Shares purchased pursuant to the Offer, Shares
contributed to the Purchaser by Comcast and Liberty, and Shares issued upon
the conversion of Preferred Stock purchased in the Offer or contributed to the
Purchaser by Liberty or Comcast. The aggregate principal amount of the Tender
Loans will be limited to the collateral value of the security for the Tender
Offer Facility, as determined in accordance with Regulation U of the Board of
Governors of the Federal Reserve System.
The Tender Loans will be prepayable at any time by the Purchaser,
in whole or in part (subject to specified minimum principal amounts), on a
voluntary basis, without premium or penalty other than the payment of
customary break funding costs.
The Tender Loans will bear interest, at the Purchaser's option, at
either (a) the Base Rate (as defined in the Credit Agreement for the Tender
Offer Facility (the "Tender Facility Agreement")) or (b) the LIBOR Rate (as
defined in the Tender Facility Agreement) plus 2.5%. Interest will be payable
(a) to the extent bearing interest based upon the Base Rate, quarterly in
arrears, and (b) to the extent based upon the LIBOR Rate, on the last day of
the applicable interest period (but in any event at least quarterly).
In addition to the commitment fee referred to under "The
Commitment Letter" below, the Tender Facility Agreement will provide that a
commitment fee shall be payable from the date that the Tender Facility
Agreement is executed on the daily average unused commitments under the Tender
Offer Facility at a rate per annum of 0.375%.
The Tender Facility Agreement will contain customary covenants,
including without limitation, the following: (1) prohibition on incurrence of
additional indebtedness; (2) prohibition on mergers, acquisitions or asset
sales outside the ordinary course of business; and (3) restrictions on material
amendments to the shareholders, management or other similar agreement or
agreements (the "Joint Ownership and Management Agreements") between Comcast,
Liberty and certain of their respective affiliates.
The Tender Facility Agreement will be subject to certain customary
conditions precedent, including, without limitation, the following: (1) the
Joint Ownership and Management Agreements and the corporate and capital
structure and related documents and agreements of the Purchaser and the
Company shall be in form and substance reasonably satisfactory to the Managing
Agents; (2) the Purchaser shall have purchased, concurrently with the initial
borrowing under the Tender Offer Facility and pursuant to the Offer, at least
that number of Shares which, when added to the number of Shares held by
Purchaser, represents the number of Fully Diluted Shares of the Company which
are necessary to effect the Merger without the affirmative vote of any other
shareholder of the Company; (3) satisfaction of the conditions to the Offer;
(4) receipt by the Purchaser of capital contributions of at least 18,000,000
Shares and such amount of cash as is necessary to consummate the Offer, and to
do so in compliance with the applicable margin regulations; (5) (a) receipt of
all necessary governmental and third party approvals and expiration of all
applicable waiting periods without any action being taken by any competent
authority which restrains, prevents or imposes materially adverse conditions
upon the consummation of the Offer or the Merger and (b) absence of any
judgment, order, injunction or other restraint prohibiting or imposing
materially adverse conditions upon the purchase of Shares pursuant to the
<PAGE>
Offer or the consummation of the Merger and absence of pending or threatened
actions, suits or proceedings with respect to the Purchaser or the Company or
its subsidiaries that could reasonably be expected to have a material adverse
effect on the business, assets, liabilities, condition (financial or otherwise)
or results of operations of the Purchaser or the Company or its subsidiaries
or have a material adverse effect on the Offer, the Merger, the rights or
remedies of the lenders or on the ability of the Purchaser to perform its
obligations under the Tender Offer Facility; (6) satisfaction of the Managing
Agents with the terms of the Offer and the Merger Agreement; (7) receipt by the
lenders of evidence of solvency and related matters satisfactory to the
Managing Agents; (8) the lenders shall have a perfected first priority
security interest in the Shares owned by the Purchaser; (9) evidence that
Purchaser's property is free and clear of all liens and encumbrances, with
certain exceptions (including those in favor of the lenders); (10) absence of a
material adverse change relating to the Company since January 31, 1994; (11)
absence of stock options, warrants or similar rights to acquire the capital
stock of the Company, with certain exceptions; (12) compliance of the Offer,
the Merger and the Tender Loans with all applicable legal requirements,
including, without limitation, Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System; (13) absence of violation of
contractual restrictions as a result of the Offer and the Merger which would
have a material adverse effect on the business, assets, liabilities condition
(financial or otherwise) or results of operations of the Company or which
would have a material adverse effect on the ability of the Purchaser to
perform its obligations under the Tender Facility Agreement; (14) provision by
Comcast or one of its subsidiaries of any additional funding necessary to
complete the Offer and undertakings to complete the Merger in a manner and on
terms reasonably satisfactory to the Managing Agents; (15) receipt by the
lenders of satisfactory legal opinions; and (16) payment of costs, fees,
expenses and other compensation contemplated by the Commitment Letter to the
lenders or the Managing Agents to the extent due.
The Permanent Facility. The Permanent Facility consists of a
$600,000,000 tranche A term loan facility maturing in eight years (the
"Tranche A Term Facility", and loans extended thereunder, the "Tranche A Term
Loans"), a $200,000,000 tranche B term loan facility maturing in nine years
(the "Tranche B Term Facility" and, together with the Tranche A Term Facility,
the "Term Facilities", and loans extended thereunder, the "Tranche B Term
Loans" and, together with the Tranche A Term Loans, the "Term Loans"), a
$350,000,000 revolving credit facility maturing in eight years (the "Revolving
Credit Facility", and loans extended thereunder, the "Revolving Credit Loans")
and a $50,000,000 working capital revolving credit facility maturing in eight
years (the "Working Capital Credit Facility", and loans extended thereunder,
the "Working Capital Loans").
The Term Loans, the Revolving Credit Loans and the Working Capital
Loans (collectively, the "Permanent Facility Loans") will be secured by a
pledge of such portion of the stock and assets (other than receivables sold in
an approved receivables financing program or inventory) of the Surviving
Corporation and its material domestic subsidiaries as the Managing Agents
shall determine.
The Tranche A Term Loans will amortize in quarterly installments
each year in the following aggregate amounts for such year:
Year Ending January 31 Annual Payment
---------------------- --------------
1997 $25,000,000
1998 $50,000,000
1999 $75,000,000
2000 $100,000,000
2001 $100,000,000
2002 $120,000,000
2003 $130,000,000
The Tranche B Term Loans will amortize in quarterly installments
each year in the following aggregate amounts for such year:
Year Ending January 31 Annual Payment
---------------------- --------------
1997 $1,000,000
1998 $1,000,000
1999 $1,000,000
2000 $1,000,000
2001 $1,000,000
2002 $1,000,000
2003 $15,000,000
2004 $179,000,000
Availability under the Revolving Credit Facility will be subject
to mandatory quarterly reductions in an aggregate annual amount (in each case
for the year ended January 31) of $8,750,000 in 1996, $26,250,000 in each of
1997, 1998 and 1999, $35,000,000 in 2000, $61,250,000 in 2001, $78,750,000 in
2002 and $87,500,000 in 2003. Availability under the Revolving Credit
Facility, and if the Revolving Credit Facility has been reduced to zero, the
Working Capital Credit Facility, will be reduced at the time and in the amount
of any Mandatory Prepayment (as defined below) of the Revolving Credit
Facility or the Working Capital Credit Facility, as the case may be.
Availability under the Revolving Credit Facility or Working Capital Credit
Facility may also be reduced, in whole or in part (subject to specified
minimum principal amounts) at the option of the Surviving Corporation.
For a period of 30 consecutive days during any rolling
twelve-month period, there may be no outstanding borrowings under the Working
Capital Credit Facility.
The Permanent Facility Loans will be prepayable at any time by the
Surviving Corporation, in whole or in part (subject to specified minimum
principal amounts), on a voluntary basis, without premium or penalty other
than the payment of customary break funding costs. Commencing in 1997, the
Surviving Corporation will be required to make mandatory prepayments on loans
outstanding under the Permanent Facility (the "Mandatory Prepayments") in an
amount for the fiscal year ended January 31, 1997 equal to 75% of the Excess
Cash Flow (as defined below) of the Surviving Corporation and its subsidiaries
for such year and in an amount for each subsequent fiscal year equal to 50% of
the Excess Cash Flow of the Surviving Corporation and its subsidiaries for
such year. The Mandatory Prepayments will be applied on a pro rata basis to
each of the remaining installments of the Tranche A Term Loans and Tranche B
Term Loans. After payment in full of all Term Loans, prepayments will be
applied to the Revolving Credit Loans and, after payment in full of the
Revolving Credit Loans, to the Working Capital Loans. Mandatory Prepayments
shall not be required if the Leverage Ratio (as defined below) for the
applicable year is equal to or less than 3.5 to 1.
The Tranche A Term Loans, Revolving Credit Loans and Working
Capital Loans will bear interest at a rate per annum, at the Surviving
Corporation's option, of either (a) the Alternate Base Rate (to be defined in
the Credit Agreement for the Permanent Facility (the "Permanent Facility
Agreement")) or (b) LIBOR Rate (to be defined in the Permanent Facility
<PAGE>
Agreement) plus, in either case, a margin to be determined by reference to the
Leverage Ratio then in effect, that will range from 2.5% in the case of LIBOR
Rate loans, or 1.375%, in the case of Alternate Base Rate loans, when the
Leverage Ratio equals or exceeds 5.5 to 1, to 0.875%, in the case of LIBOR
Rate Loans, or 0%, in the case of Alternate Base Rate Loans, when the Leverage
Ratio is less than 3.0 to 1.
The Tranche B Term Loans will bear interest at a rate per annum,
at the Surviving Corporation's option, of either (a) the LIBOR Rate plus 3.0%
or (b) the Alternate Base Rate plus 1.875%.
In addition to the commitment fee referred to under "The
Commitment Letter" below, a commitment fee will be payable under the Permanent
Facility at a rate per annum of 0.375% at all times that the Leverage Ratio is
greater than or equal to 3.0 to 1, and 0.300% at all other times, in each case
on the undrawn availability under the Revolving Credit Facility and Working
Capital Credit Facility.
Interest with respect to the Term Loans and the Revolving Credit
Loans shall be payable (a) to the extent bearing interest based upon the
Alternate Base Rate, quarterly in arrears, and (b) to the extent based upon
LIBOR, on the last day of the applicable interest period (but in any event at
least quarterly).
The Permanent Facility Agreement will contain certain customary
covenants including, without limitation: (1) a limitation on indebtedness of
the Surviving Corporation and its subsidiaries; (2) a limitation on guaranties
of the Surviving Corporation and its subsidiaries; (3) a limitation on liens
and other encumbrances in favor of persons other than the lenders; (4) a
limitation on asset sales; (5) a limitation on investments (including, but not
limited to, investments in joint ventures); (6) a prohibition on making
restricted payments until January 30, 1998, and, thereafter, a limitation of
restricted payments to 50% of Excess Cash Flow; (7) a limitation on payment
of management fees; (8) a limitation on mergers and acquisitions; (9) a
limitation on transactions with affiliates, with certain exceptions to be
negotiated (including the waiver of the Company Repurchase Rights as described
in the Joint Bidding Agreement); (10) a limitation on Comcast's and Liberty's
ability to dispose of their interests in the Surviving Corporation; (11) a
limitation on modifications of existing arrangements between the Company and
Comcast and the Company and TCI pertaining to carriage and commissions and
related matters (other than the waiver of the Company Repurchase Rights); (12)
that the Surviving Corporation shall enter into interest rate protection
agreements in form, substance and amounts acceptable to a majority of the
Managing Agents; (13) that gross revenues of the Surviving Corporation must be
substantially derived from present and related business; and (14) a limitation
on material amendments of the Joint Ownership and Management Agreements,
without the consent of certain of the lenders, which consent will not be
unreasonably withheld.
In addition, the Permanent Facility Agreement will contain the
following financial covenants: (1) the Leverage Ratio will not exceed, during
any period set forth below, the ratio set forth below for such period:
Period Ratio
------ -----
Closing - April 30, 1995 5.8 to 1
May 1, 1995 - April 30, 1996 5.5 to 1
May 1, 1996 - October 31, 1996 5.0 to 1
November 1, 1996 - April 30, 1997 4.75 to 1
May 1, 1997 - April 30, 1998 4.5 to 1
May 1, 1998 - April 30, 1999 4.0 to 1
May 1, 1999 - thereafter 3.5 to 1
(2) the ratio of Operating Cash Flow (as defined below) to cash interest
expense of the Surviving Corporation and its subsidiaries shall not be less
than 1.75 to 1 at any time up to and including January 31, 1996 or less than
2.0 to 1 at any time thereafter; (3) the ratio of Operating Cash Flow to Pro
Forma Debt Service (as defined below) shall not, at any time, be less than 1.1
to 1; (4) the Fixed Charge Ratio (as defined below) shall not, at any time, be
less than 1.0 to 1.
For purposes of such financial covenants, the following terms
shall have the following meanings:
"Debt Service" means, for any period, the sum of all scheduled
cash interest and scheduled principal payments due and scheduled commitment
reductions in such period.
"Excess Cash Flow" means, as of the end of each fiscal year, the
amount, if any, by which Operating Cash Flow for such fiscal year exceeds the
sum of (in each case for such fiscal year) (a) cash interest expense and
commitment fees, (b) capital expenditures, (c) payments of principal of the
Term Loans and reductions of availability of the Revolving Credit Facility, to
the extent such reductions of availability require or result in a mandatory
payment of indebtedness, (d) net cash taxes, (e) cash investments and advances
to joint ventures, (f) other cash investments, (g) payments under charter
affiliation agreements, (h) permitted restricted payments (to the extent used
to pay interest on certain indebtedness permitted persuant to the terms of the
Commitment Letter) and (i) $10,000,000.
"Fixed Charge Ratio" means the ratio of (a) Operating Cash Flow
plus aggregate availability under the Revolving Credit Facility and the
Working Capital Credit Facility, up to a maximum of $20,000,000 through
January 31, 1996, $15,000,000 through January 31, 1997 and $10,000,000 through
January 31, 1998, plus dividends and other payments received in cash from
joint ventures to (b) the sum of: (i) cash interest expense; (ii) commitment
fees; (iii) capital expenditures; (iv) cash investments and advances to joint
ventures; (v) other cash investments; (vi) payments under charter affiliation
agreements; (vii) net operating costs for Q2, On Q or any similar channel or
service to the extent deducted in the calculation of operating income but
added back in the calculation of Operating Cash Flow; (viii) cash taxes; (ix)
permitted restricted payments; and (x) scheduled principal payments and
commitment reductions with respect to the applicable period.
"Leverage Ratio" means, at any time, the ratio of Total Debt to
Operating Cash Flow at such time.
"Operating Cash Flow" means, at any time, operating income
(including net income derived from credit card operations) plus depreciation,
amortization, net operating costs for Q2, On Q or any similar channel or
service (up to an aggregate maximum of $25,000,000 and only to the extent
deducted in determining operating income) until January 31, 1997, management
fees accrued but not paid in cash and all other non-cash charges and
extraordinary items (to the extent deducted in determining operating income)
<PAGE>
for the four immediately preceding fiscal quarters, minus (to the extent not
deducted in determining operating income) any management fees actually paid in
cash during such period.
"Pro Forma Debt Service" means Debt Service for the four
immediately succeeding quarters (assuming no change in interest rates
applicable to variable debt and giving effect to required payments).
"Total Debt" means, as of any date, all indebtedness for borrowed
money plus capitalized leases plus contingent liabilities of the Surviving
Corporation, but not including certain specified subordinated debt of the
Surviving Corporation.
The Permanent Facility Agreement will be subject to certain
customary conditions precedent, including, without limitation, the following:
(1) satisfaction of all conditions to the Merger Agreement; (2) receipt of all
necessary governmental and third party approvals in connection with the
Merger, the transactions contemplated by the Merger Agreement and otherwise
referred to in the Permanent Facility, expiration of all applicable waiting
periods without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon, the
consummation of the Merger and the absence of any judgment, order, injunction
or other restraint prohibiting or imposing materially adverse conditions upon
the consummation of the Merger; (3) the Joint Ownership and Management
Agreements and the corporate and capital structure of the Surviving
Corporation shall be reasonably satisfactory in form and substance to the
Managing Agents; (4) receipt by the lenders of a perfected first priority
security interest in the stock and assets of the Surviving Corporation and its
subsidiaries referred to above to the extent required; (5) termination of any
bank credit agreements of the Company and its subsidiaries (other than the
Permanent Facility) and repayment of all amounts outstanding thereunder
concurrently with the initial funding under the Permanent Facility; (6) the
Company's and its subsidiaries' property shall be free and clear of all liens
and encumbrances, with certain exceptions; (7) absence of material adverse
change in the business, assets, liablities, financial condition or results of
operations of the Company and its consolidated subsidiaries, taken as a whole,
since the funding of the Tender Offer Facility; (8) absence of stock options,
warrants of similar rights to acquire the capital stock of the Company, with
certain exceptions; (9) compliance of the Merger with all applicable legal
requirements, including, without limitation, Regulations G, T, U and X of the
Board of Governors of the Federal Reserve System; (10) the lender's reasonable
satisfaction as to the absence of violation of contractual restrictions as a
result of the Merger which would have a material adverse effect on the
business, assets, liabilities, financial condition or results of operations of
the Surviving Corporation or which would have a material adverse effect on the
ability of the Surviving Corporation to perform its obligations under the
Permanent Facility Agreement; (11) the receipt by the Surviving Corporation
of any additional funding necessary to complete the Merger on terms reasonably
satisfactory to the Managing Agents; (12) receipt by the lenders of
satisfactory legal opinions; and (13) payment of all reasonable costs, fees,
expenses and other compensation payable to the lenders or the Managing Agents
to the extent due.
The Commitment Letter. The Commitment Letter provides that each
Managing Agent will receive a fee equal to 2.25% of its commitment in respect
of the Permanent Facility, with 10% of such fee to be paid upon acceptance of
the Commitment Letter, 40% of such fee to be paid at the time the initial
Tender Loans are made and 50% of such fee to be paid at the time the initial
loans under the Permanent Facility are made, or if no such loans are made, at
the time the Tender Loans become due and payable.
<PAGE>
Regardless of whether any loans are made pursuant to the Tender
Offer Facility or the Permanent Facility or any definitive loan documentation
is executed, for the period commencing on the date of acceptance of the
Commitment Letter and ending on the earlier of the date on which (i)
definitive loan documentation for the Tender Offer Facility is executed and
delivered and (ii) the Commitment Letter will have expired with respect to the
Tender Offer Facility, each of the Managing Agents will receive a fee on the
amount of such Managing Agent's commitment in respect of the Permanent
Facility for the number of days in such period at a rate per annum equal to
0.375%. In addition, regardless of whether any loans are made under the
Permanent Facility or definitive loan documentation for the Permanent Facility
is executed, for the period commencing on the date on which definitive loan
documentation for the Tender Offer Facility is executed and delivered and
ending on the earlier of the date on which (i) definitive loan documentation
for the Permanent Facility is executed and delivered and (ii) the Commitment
Letter will have expired with respect to such facility, each Managing Agent
will receive a fee in the amount of the difference between such Managing
Agent's commitment in respect of the Permanent Facility and such Managing
Agent's commitment in respect of the Tender Offer Facility for the number of
days in such period at a rate per annum of 0.375%.
Comcast has agreed to promptly reimburse each of the Managing
Agents for, or pay directly, all reasonable out-of-pocket costs and
expenses incurred by such Managing Agent in connection with the Tender
Offer Facility and the Permanent Facility. In addition, Comcast has agreed
to indemnify each of the Managing Agents and certain related persons
against certain damages and expenses which may arise out of the execution
and delivery of the Commitment Letter or any of the transactions
contemplated by the Commitment Letter. However, the Joint Bidding
Agreement contains provisions regarding the reimbursement of expenses
relating to the Acquisition incurred by Comcast and Liberty.
The Managing Agents' obligations under the Commitment Letter are
further subject to (1) the absence of any material adverse change in the
business, assets, liabilities, condition (financial or otherwise) or results
of operations of the Purchaser or the Company and its subsidiaries, taken as a
whole; (2) satisfactory completion of due diligence review of the Company, the
Offer and the Merger by the Managing Agents; (3) absence of a material
disruption of or material adverse change in financial, banking or capital
market conditions; (4) development of a strategy for the syndication of the
Permanent Facility acceptable to the Managing Agents and Comcast; and (5)
prior to and during the syndication of the Permanent Facility, absence of
competing financing for Comcast or any of its affiliates, Liberty or certain
of its affiliates, the Company or the Purchaser.
Unless extended in writing at the sole discretion of the Managing
Agents, the obligations of the Managing Agents under the Commitment Letter
with respect to the Tender Offer Facility and the Permanent Facility, as the
case may be, will expire automatically if definitive loan documentation
relating to each such facility is not executed and delivered on or before
April 30, 1995. The terms of the Commitment Letter relating to expense
reimbursement and indemnification will terminate at the time and to the
extent, but only to the extent, that they are expressly superseded by
definitive loan documentation relating to the Tender Offer Facility and the
Permanent Facility.
The Commitment Letter is attached hereto as Exhibit (b)(1), and
the foregoing summary description of the Commitment Letter, the Tender Offer
Facility and the Permanent Facility is qualified in its entirety by reference
<PAGE>
to such exhibit.
Item 10. Additional Information.
(c) and (f) The information set forth under "Introduction", "The
Tender Offer -- 1. Terms of the Tender Offer", "-- 2. Acceptance for Payment
and Payment", "-- 3. Procedure for Tendering Shares", "-- 4. Withdrawal
Rights", "-- 10. Certain Conditions of the Offer" and "-- 11. Certain Legal
Matters; Regulatory Approvals" in the Offer to Purchase is hereby amended and
supplemented to include the following information:
On January 13, 1995, Comcast and TCI issued a press release in
which they announced that all of the conditions to the Offer were not
satisfied by 5:00 P.M., New York City time, January 13, 1995, the date on
which the Offer was scheduled to expire. As a result, the Purchaser has
extended the Expiration Date for the Offer until 5:00 P.M., New York City
time, on Monday, February 6, 1995.
In connection with Comcast's and TCI's efforts to obtain
sufficient financing to satisfy the Financing Condition, on January 13, 1995,
Comcast and the Managing Agents executed the Commitment Letter pursuant to
which the Managing Agents have agreed, subject to the terms and conditions set
forth therein, to provide financing in an amount that will be sufficient, among
other things, for the purchase of Shares pursuant to the Offer and the
consummation of the Merger. Such financing is subject to, among other things,
the negotiation and execution of mutually satisfactory definitive
documentation. In addition, the Offer continues to be conditioned upon the
Financing Condition.
As previously disclosed, although all applicable waiting periods
under the HSR Act relating to the Transaction have expired, Comcast and TCI
have agreed to provide ten days' notice to the FTC prior to consummating the
Offer in order to allow the FTC sufficient time to complete its review and
continue discussions with Comcast and TCI relating to the Transaction.
Comcast and TCI have not yet determined when they intend to give such notice.
In addition, there can be no assurance as to what action, if any, the FTC
intends to take if such notice is given.
As of the close of business on January 12, 1995 approximately
14,796,019 shares of QVC Common Stock, 468 shares of QVC Series B Preferred
Stock and 31,639 shares of QVC Series C Preferred Stock have been tendered
pursuant to the Offer.
A copy of the press release of Comcast and TCI relating to the
foregoing is attached hereto as Exhibit (a)(19) and is hereby incorporated by
reference, and the foregoing description is qualified in its entirety by
reference to such Exhibit.
Item 11. Material to be Filed as Exhibits.
(a)(19) -- Text of Press Release issued by Comcast and TCI on
January 13, 1995.
(b)(1) -- Commitment Letter, dated January 13, 1994 by and
between Comcast and certain banks.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: January 17, 1995
QVC PROGRAMMING HOLDINGS, INC.
By: /s/ JULIAN A. BRODSKY
-----------------------
Name: Julian A. Brodsky
Title: Vice Chairman
COMCAST CORPORATION
By: /s/ JULIAN A. BRODSKY
-----------------------
Name: Julian A. Brodsky
Title: Vice Chairman
TELE-COMMUNICATIONS, INC.
By: /s/ STEPHEN M. BRETT
-----------------------
Name: Stephen M. Brett
Title: Executive Vice
President
EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
(a)(19) Text of Press Release 17
issued by Comcast and
TCI on January 13, 1995.
(b)(1) Commitment Letter, 21
dated January 13, 1994
by and between Comcast
and certain banks.
FOR IMMEDIATE RELEASE
COMCAST AND LIBERTY MEDIA
EXTEND QVC TENDER OFFER
UNTIL FEBRUARY 6
____________________________________
Philadelphia, PA and Englewood, CO -- January 13, 1995: Comcast Corporation
("Comcast") and Tele-Communications, Inc. ("TCI") announced today that all of
the conditions to the tender offer for stock of QVC, Inc. were not satisfied
by 5:00 P.M., New York City time, on January 13, 1995, the time at which the
tender offer was scheduled to expire. As a result, QVC Programming Holdings,
Inc., an acquisition vehicle to be jointly owned by Comcast and Liberty Media
Corporation, a wholly-owned subsidiary of TCI, has extended the expiration
date for the tender offer until 5:00 P.M., New York City time, on Monday,
February 6, 1995.
As a consequence of the extension of the expiration date, holders of QVC
shares are entitled to tender or withdraw their shares pursuant to the tender
offer until 5:00 P.M., New York City time, on February 6, 1995, unless the
offer is further extended.
In connection with Comcast's and TCI's efforts to obtain sufficient
financing to satisfy the financing condition to the tender offer, on January
13, 1995, Comcast and a group of lenders executed a commitment letter pursuant
to which such lenders have agreed, subject to the terms and conditions set
forth therein, to provide financing in an amount that will be sufficient,
among other things, for the purchase of the outstanding shares pursuant to the
tender offer and the consummation of the related merger. Such financing is
subject to, among other things, the negotiation and execution of mutually
satisfactory definitive documentation. In addition, the tender offer
continues to be conditioned upon Comcast's and TCI's obtaining such financing.
Although all applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvements Act relating to the proposed acquisition of QVC, Inc.
by Comcast and TCI have expired, as previously announced, Comcast and TCI have
agreed to provide ten days' notice to the Federal Trade Commission (the "FTC")
prior to consummating the tender offer in order to allow the FTC additional
time to complete its review and continue discussions with Comcast and TCI
relating to the transaction. Comcast and TCI have not yet determined when
they intend to give such notice. In addition, there can be no assurance as to
what action, if any, the FTC intends to take if such notice is given.
As of the close of business on January 12, 1995, approximately 14,796,019
shares of QVC Common Stock, 468 shares of QVC Series B Preferred Stock and
31,639 shares of QVC Series C Preferred Stock had been tendered pursuant to
the tender offer.
Comcast Corporation is principally engaged in the development, management
and operation of cable communications networks. Comcast's consolidated and
prorated affiliated operations currently serve approximately 3.4 million cable
subscribers. Comcast provides cellular telephone services in the Northeast
United States to markets encompassing a population in excess of 7.4 million.
Comcast also has investments in cable programming, telecommunications systems,
and international cable and telephony franchises.
Comcast's Class A and Class A Special Common Stock are traded on the Nasdaq
Stock Market under the symbols CMCSA and CMCSK, respectively.
Liberty is a wholly-owned subsidiary of Tele-Communications, Inc. TCI is
the United States' largest cable television operator, serving 10.9 million
customers in 48 states, Puerto Rico and the District of Columbia. The company
also holds interests in several national cable programming networks.
Tele-Communications, Inc. is traded in the Nasdaq National Market with
Class A and Class B Common Stock and Class B Preferred Stock trading
separately under the symbols of TCOMA, TCOMB and TCOMP, respectively.
FOR FURTHER INFORMATION CONTACT:
Comcast Corporation
William E. Dordelman Kathleen B. Jacoby
Assistant Treasurer Director of Investor Relations
(215) 981-7550 (215) 981-7392
Tele-Communications, Inc.
Steve Smith Vivian Carr
Investor Relations Liberty Media
(303) 267-5048 (303) 721-5406
January 13, 1995
[THIS DOCUMENT HAS BEEN REDACTED FOR CONFIDENTIAL INFORMATION]
Comcast Corporation
1500 Market Street
Philadelphia, PA 19102
Attn: John R. Alchin
Senior Vice President, Treasurer
Dear Sirs:
[
] (each, a "Bank", and collectively, the "Banks") are
pleased to confirm to you that, subject to the terms and conditions
referred to in this letter, the Banks are willing (a) to provide to QVC
Programming Holdings, Inc. (as such term is defined below) a multi-draw
term loan credit facility of $1,100,000,000 (the "Tender Offer Facility")
the proceeds of which will be used in connection with the Tender Offer (as
such term is defined below), which $1,100,000,000 shall be comprised of an
initial commitment of [ ] in the amount of $260,000,000 and an initial
commitment of each of the other Banks in the amount of $210,000,000 and
(b)(i) to provide to QVC, Inc. ("QVC"), following completion of the Merger
(as such term is defined below), a $1,200,000,000 credit facility (the
"Permanent Facility"), consisting of a $600,000,000 eight year tranche A
term loan, a $200,000,000 nine year tranche B term loan, a $350,000,000
eight year revolving credit facility and a $50,000,000 eight year working
capital revolving credit, the proceeds of which will be used to repay the
Tender Offer Facility, to pay other amounts payable in connection with the
Merger, to pay transaction costs, and for general corporate purposes, which
$1,200,000,000 shall be comprised of an initial commitment of [ ] in the
amount of $280,000,000 and an initial commitment of each of the other Banks
in the amount of $230,000,000 and part of which will be syndicated to other
lenders by the Banks. It is understood and agreed that the commitments of
the Banks above shall be the several obligations of the Banks. You agree
that when any lender commits to provide a share of the Permanent Facility,
such lender shall also be entitled to the benefits of the ninth and
eleventh paragraphs of this letter as if such lender was expressly included
thereunder.
The banks have been informed by you that a company ("QVC
Programming Holdings, Inc."), which is wholly owned directly or indirectly
by you and Liberty Media Corporation ("Liberty"), has been formed to make a
tender offer (the "Tender Offer") for any and all outstanding shares of
common stock of QVC, except for those contributed to QVC Programming
Holdings, Inc. by you and Liberty or your and Liberty's affiliates. The
Banks have been further informed that following its purchase of shares
pursuant to the Tender Offer, QVC Programming Holdings, Inc. will, as
promptly as possible, merge into QVC, with QVC being the surviving entity
(the effectiveness thereof being called the "Merger").
The Tender Offer Facility and the Permanent Facility
(collectively, the "Facilities") would be provided pursuant to the terms
of, and shall become effective only upon the execution and delivery of,
mutually satisfactory credit agreements and other definitive loan
documentation incorporating terms and conditions in the Summaries of
Proposed Terms and Conditions (the "Term Sheets") attached hereto and other
terms and conditions customarily included in facilities of this size, type
and purpose or otherwise required by or satisfactory to the Banks. These
terms and conditions will necessarily be further developed during the
course of preparing and negotiating the loan documentation. It is
understood and agreed that the Banks do not intend to enter into the loan
documentation for the Tender Offer Facility unless and until the loan
documentation for the Permanent Facility shall have been substantially
completed.
The Banks' commitment hereunder is further subject to (i) the
absence of any material adverse change in the business, assets,
liabilities, condition (financial or otherwise) or results of operations of
QVC Programming Holdings, Inc. or QVC and its subsidiaries, taken as a
whole, (ii) the satisfactory completion of a due diligence review of QVC,
the Tender Offer and the Merger by the Banks, (iii) there not having
occurred and be continuing, prior to the making of the initial loans under
the Tender Offer Facility, a material disruption of or material adverse
change in financial, banking or capital market conditions since the date
hereof that, in the Banks' reasonable judgment, would have a material
adverse effect on the syndication of the Permanent Facility, it being
understood that the failure of the Banks to successfully syndicate the
Permanent Facility shall not, in and of itself, constitute such a
disruption or change, (iv) the development of a strategy for the
syndication of the Permanent Facility acceptable to the Banks and you and
(v) the Banks' satisfaction that, prior to and during the syndication of
the Permanent Facility, there will be no competing financing for you or any
of your affiliates, Liberty or any of its affiliates for whom Liberty
arranges the financing, QVC or QVC Programming Holdings, Inc. being offered
or arranged other than those that you have disclosed to us prior to the
date hereof, those that consist of amendments, extensions, refinancings or
increases of existing financings for cable television operators or groups
of cable television systems or programming entities or those which in the
reasonable determination of the Banks could not have an adverse effect on
the syndication of the Permanent Facility.
In connection with the syndication of the Permanent Facility, but
without limiting the generality of the foregoing, QVC and you will provide
sufficient information (including financial projections), in form and
substance acceptable to the Banks, for the preparation of an information
package describing QVC and the Permanent Facility, and will assist
generally in all respects in connection with the preparation of such
package, which package would be distributed on a confidential basis to
selected banks and other financial in5titutions reasonably acceptable to
you and the Banks. In addition, you agree to provide all other information
reasonably deemed necessary by the Banks to complete the syndication
successfully, and generally to assist actively in achieving a syndication
that is satisfactory to the Banks and you. Such assistance shall include,
but not be limited to, the managements of QVC and you attending bank
meetings and holding themselves and their advisors available at all
reasonable times to answer questions during the syndication process.
It is understood and agreed that the Banks, in cooperation with
you, will manage all aspects of the syndication. In that connection, the
Banks will, in consultation with you, make all decisions as to the
selection of institutions to be approached, when they will be approached,
when their commitments will be accepted, which institutions will
participate, the final allocation of the commitments among the lenders and
the amounts and distribution of fees paid to the lenders.
It is understood and agreed that the Banks will act as sole and
exclusive Agents and arrangers for the Permanent Facility and will be
entitled to perform all functions and exercise all authority customarily
performed and exercised by them in such capacities. The appointment of any
co-agents for the Permanent Facility would be subject to the approval of
the Banks and you.
Whether or not any loans are made under the Facilities, or loan
docu3nents with respect thereto are executed, you will promptly reimburse
each of the Banks for, or pay directly, all reasonable out-of-pocket costs
and expenses (including but not limited to reasonable fees and
disbursements of Winthrop, Stimson, Putnam & Roberts, special counsel to
the Banks, whose fees and disbursements shall be the only fees and
disbursements of counsel to the Banks reimbursable or payable pursuant to
this paragraph) incurred by such Bank in connection with its review of the
proposed transaction, the syndication of the Permanent Facility and the
preparation, execution and delivery of this letter, the loan documentation
(whether or not executed) and any amendment or modification hereof or
thereof.
You will also indemnify each of the Banks and its directors,
officers, employees and agents against any loss, claim, liability or
expense (including but not limited to reasonable legal fees and
disbursements but excluding expenses covered by the immediately preceding
paragraph of this letter) incurred by any of them in connection with,
arising out of, or in any way related to the execution and delivery of this
letter or any of the transactions contemplated hereby, including but not
limited to any such incurred in connection with any investigation,
testimony, subpoena or litigation, unless and to the extent such loss,
claim, liability or expense is incurred as the result of the gross
negligence or willful misconduct of such Bank, director, officer, employee
or agent as determined by a judgment of a court of competent jurisdiction
that is binding on such Bank, director, officer, employee or agent, final
and not subject to review on appeal.
The terms of this letter may be accepted prior to the close of
business on January 13, 1995 by you in the manner indicated in the final
paragraph of this letter, together with the payment to each of the Banks of
a non-refundable fee equal to 10% of an amount equal to 2.25% of each
Bank's commitment under the Permanent Facility. If this letter is not so
accepted and such fee paid by such date, it shall automatically expire
unless extended in writing by the Banks. By your acceptance of this
latter, you also agree that an amount equal to 40% of an amount equal to
2.25% of each Bank's commitment under the Permanent Facility shall be paid
at the time of the making of the initial loans under the Tender Offer
Facility and an amount equal to 50% of an amount equal to 2.25% of each
Bank's commitment under the Permanent Facility shall be paid at the time of
the making of the initial loans under the Permanent Facility or, if no such
loans are made, at the time that the loans under the Tender Offer Facility
shall have become due and payable.
Unless extended in writing at the sole discretion of the Banks,
all obligations of the Banks under this letter with respect to the Tender
Offer Facility and the Permanent Facility, as the case may be, shall expire
automatically, without further act and regardless of cause or
circumstances, if definitive loan documentation relating to such Facility
is not executed and delivered on or before April 30, 1995. The terms of
this letter as to expense reimbursement and indemnification shall terminate
only at the time, and to the extent, they are expressly superseded by
definitive loan documentation relating to the Facilities.
Whether or not any loans are made or definitive loan
documentation is executed, for the period commencing on the date that you
shall have accepted this letter and ending on the earlier of the date on
which definitive loan documentation for the Tender Offer Facility is
executed and delivered and the date on which this letter shall have expired
with respect to such Facility, you shall pay to each of the Banks, on the
earlier of such dates, a commitment fee on the amount of such Bank's
commitment hereunder in respect of the Permanent Facility for the number of
days in such period (including the first but excluding the last) at a rate
per annum equal to 0.375%. In addition, whether or not any loans under the
Permanent Facility are made or definitive loan documentation for the
Permanent Facility is executed, for the period commencing on the date on
which definitive loan documentation for the Tender Offer Facility is
executed and delivered and ending on the earlier of the date on which
definitive loan documentation for the Permanent Facility is executed and
delivered and the date on which this letter shall have expired with respect
to such Facility, you shall pay to each of the Banks, on the earlier of
such dates, a commitment fee on the amount of the difference between such
Bank's commitment hereunder in respect of the Permanent Facility and such
Bank's commitment hereunder in respect of the Tender Offer Facility for the
number of days in such period (including the first but excluding the last)
at a rate per annum equal to 0.375%.
Upon the acceptance of this letter by you, the Banks shall have
the right to review and approve all public announcements and filings
relating to the transactions contemplated hereby that refer, directly or
indirectly, to any of the Banks or to this letter before they are made
(such approval not to be unreasonably withheld).
This letter is issued in reliance upon the accuracy and
completeness of all information furnished by or for you, QVC Programming
Holdings, Inc. and QVC, sets forth the entire understanding of the parties
as to the scope of the obligations of the Banks and you, shall be construed
in accordance with and governed by the laws of the State of New York and
may neither be amended, supplemented or modified, nor any of your rights or
obligations hereunder assigned, except by the parties hereto in writing.
If the foregoing is satisfactory to you, please have the
enclosed copy of this letter duly executed by an authorized officer and
return it to us. This letter may be executed in any number of
counterparts, each of which shall be deemed to be an original and shall be
binding upon the Borrower and each of the Banks and their respective
successors and assigns.
Very truly yours,
[SIGNATURES OF THE BANKS]
ACCEPTED AND AGREED TO:
COMCAST CORPORATION
By:
------------------------
Name:
Title:
CONFIDENTIAL
QVC, Inc.
Summary of Proposed Terms and Conditions
PERMANENT FACILITY
Borrower: The survivor of the merger ("New QVC") between
QVC, Inc. ("QVC") and QVC Programming Holdings, Inc.
("Acquisition Corp.").
Facilities: Up to $1,200,000,000 in total facilities, comprised
of the following;
1. $600,000,000 eight year amortizing term loan
("Tranche A Term Loan").
2. $200,000,000 nine year amortizing term loan
("Tranche 3 Term Loan", and together with the
Tranche A Term Loan, the "Term Loans").
3. Up to $350,000,000 eight year reducing revolving
credit facility ("Revolving Credit").
4. Up to $50,000,000 eight year working capital
revolving credit facility ("Working Capital Credit").
Managing Agents: [
]
Arranging and
Administrative
Agent: [ ]
Lenders: Managing Agents and a syndicate of financial
institutions to be arranged by the Managing Agents and
acceptable to the Managing Agents and the Borrower.
The Lenders that will participate in the Tranche A Term
Loan, the Revolving credit and the Working Capital
Credit will participate in such Facilities pro rata.
Final Maturity: The Tranche A Term Loan shall mature on the date that
is sight years following the closing.
The Tranche B Term Loan shall mature on the date that
is nine years following the closing.
Loans under the Revolving Credit shall mature on the
date that is eight years following the closing.
Loans under the Working Capital Credit shall mature
on the date that is eight years following the closing.
Borrowings: Borrowings under the Revolving Credit and the
Working Capital Credit shall (A) be in a minimum amount
of $5,000,000 and in integral multiples of $1,000,000
in excess thereof, and (B) be made on (i) one business
day's prior notice for borrowings bearing interest at
the Alternate Base Rate (as hereinafter defined) and
(ii) three business days' prior notice for borrowings
bearing interest based upon LIBOR.
Use of Proceeds: The Facilities will be available to finance:
1. the repayment of the loans (the "Tender Offer
Facility") by the Managing Agents to Acquisition
Corp. which were used to finance the acquisition
by Acquisition Corp. of shares of QVC pursuant to
a cash tender offer (the "Tender Offer") by which
Acquisition Corp. sought to acquire all
outstanding shares of QVC not owned by Acquisition
Corp., which Tender Offer would be followed by a
merger (the "Merger") of Acquisition Corp. into
QVC;
2. the payment of any remaining Merger consideration
to shareholders and to fund related fees and
expenses;
3. general corporate purposes, including working
capital needs; and
4. the issuance of Letters of Credit, such Letters
of Credit not to exceed an amount to be
determined.
Security: Pledge of such portion of the stock and assets
of the Borrower, including stock of any material
domestic subsidiaries of-the Borrower, and such portion
of the assets of any material domestic subsidiaries of
the Borrower, as are available to be pledged to the
Lenders (except for the Borrower's revolving credit
card receivables sold to General Electric Capital Corp.
or another financing company reasonably acceptable to
the Managing Agents, and inventory), and as is
satisfactory to the Managing Agents.
Guaranties: The Lenders may request guaranties from any
direct or indirect domestic subsidiary of the Borrower
providing material levels of Operating cash Flow.
Repayment: Tranche A Term Loan payments, which shall be paid in
quarterly installments;
year ending payment
----------- -------
1/31/97 $25,000,000
1/31/98 $50,000,000
1/31/99 $75,000,000
1/31/00 $100,000,000
1/31/01 $100,000,000
1/31/02 $120,000,000
1/31/03 $130,000,000
Tranche B Term Loan payments, which shall be paid in
quarterly installments:
year ending payment
----------- -------
1/31/97 $1,000,000
1/31/98 $1,000,000
1/31/99 $1,000,000
1/31/00 $1,000,000
1/31/01 $1,000,000
1/31/02 $1,000,000
1/31/03 $15,000,000
1/31/04 $179,000,000
Mandatory
Reduction of
Availability: Availability under the Revolving credit shall be reduced
on a quarterly basis as follows:
year ending reduction
----------- ---------
1/31/96 $8,750,000
1/31/97 $26,250,000
1/31/98 $26,250,000
1/31/99 $26,250,000
1/31/00 $35,000,000
1/31/01 $61,250,000
1/31/02 $78,750,000
1/31/03 $87,500,000
Availability under the Revolving Credit and, if
the Revolving Credit has been reduced to zero, the
Working Capital Credit will also be reduced at the time
and in the amount of any mandatory prepayment of the
Revolving Credit or the Working Capital Credit provided
for under "Mandatory Prepayments" below (determined as
if the entire amount of the Revolving Credit or the
Working Capital Credit, as the case may be, was then
outstanding, with such reduction of the Revolving
Credit applied to the remaining scheduled reductions
thereof in their direct order).
Optional
Reduction of
Availability: Permitted, with respect to the unused portion
of the Revolving Credit or the Working Capital Credit,
at any time in whole or in part in integral multiples
of $5,000,000 and upon three business days' prior
notice. Upon termination or reduction of the Revolving
Credit or the Working Capital Credit, the Borrower
would pay to the Administrative Agent, for the pro rata
account of the Lenders, accrued fees on the portion of
the Revolving Credit and the working Capital Credit
terminated or reduced to the date of termination or
reduction.
Clean-up Period: For a period of 30 consecutive days during any
twelve-month rolling period, there shall be no
borrowings under the Working Capital Credit outstanding
at any time.
Optional
Prepayments: Permitted at any time in whole or in part in a
minimum amount of $5,000,000 and in integral multiples
of $1,000,000 in excess thereof and upon (A) one
business day's prior notice for Alternate Base Rate
borrowings and (B) three business days' prior notice
for borrowings bearing interest based upon LIBOR.
All prepayments shall be accompanied by (a)
payment of accrued interest on the amount prepaid to
the date of prepayment and (b) in the case of a
borrowing bearing interest based upon LIBOR,
compensation of the Lenders for break funding when
billed.
Mandatory
Prepayments: Commencing in 1997 upon receipt of financial
statements for the fiscal year ending January 31, 1997
and each year thereafter upon receipt of the applicable
financial statements, an amount equal to 75% of Excess
Cash Flow for the fiscal year ending January 31, 1997,
and 50% of Excess Cash Flow for each fiscal year ending
thereafter. Prepayments will be applied on a pro rata
basis to the Tranche A Term Loan and the Tranche B Term
Loan, with each such prepayment being applied on a pro
rata basis to each of the remaining installments
thereof. After payment in full of the Term Loans,
prepayments will be applied to the Revolving Credit.
After payment in full of the Revolving Credit,
prepayments will be applied to the Working Capital
Credit. Such prepayments must occur no later than the
earlier of the date such financial statements are
received and the date by which such financial
statements were required to be delivered. Mandatory
Prepayments based on Excess Cash Flow shall not be
required if the Leverage Ratio is equal to or less than
3.5x.
Interest Rates and
Commitment Fees: Borrowings under the Tranche A Term Loan, the
Revolving Credit and the Working Capital Credit will
bear interest at a rate per annum, as selected by the
Borrower, equal to either LIBOR or the Alternate Base
Rate plus, in both cases, the Applicable Margin, which
shall be as follows:
LIBOR Alternate Base
Leverage Ratio Margin Rate Margin
-------------- ------ --------------
greater than
or equal to
5.50x 2.500% 1.375%
greater than
or equal to
5.00x and less
than 5.50x 2.250% 1.125%
greater than
or equal to
4.50x and less
than 5.00x 1.875% 0.7504%
greater than
or equal to
4.00x and less
than 4.50x 1.625% 0.500%
greater than
or equal to
3.50X and less
than 4.00X 1.250% 0.125%
greater than
or equal to
3.OOX and less
than 3.50x 1.000.% 0.000%
less than
3.00x 0.875% 0.000%
Borrowings under the Tranche B Term Loan will bear
interest at a rate per annum, as selected by the
Borrower, equal to either LIBOR or the Alternate Base
Rate plus, in both cases, the Applicable Margin, which
shall be 1.875%, in the case of the Alternate Base
Rate, and 3.000%, in the case of LIBOR.
The Commitment Fee will be, at all times that the
Leverage Ratio is greater than or equal to 3.00x,
.375%, and, at all times that the Leverage Ratio is
less than 3.00x, .300%, in each case of undrawn
availability on the Revolving Credit and the Working
capital Credit.
Computation
and Payment
of Interest: Interest on the Facilities shall be computed on the basis
of a 360 day year or, in the case of loans bearing
interest based upon the Alternate Base Rate and
calculated on the basis of the Prime Rate, a 365 or 366
day, as the case may be, year for the actual number of
days elapsed and shall be payable (1) to the extent
bearing interest based upon the Alternate Base Rate,
quarterly in arrears, and (2) to the extent bearing
interest based upon LIBOR, on the last day of the
applicable interest period (but in any event at least
quarterly).
Default Rate
of Interest: To the extent permitted by applicable law, any payment
of principal and/or interest with respect to the
Facilities which is not paid when due (whether at
stated maturity, by acceleration or otherwise) shall
bear interest, from the date such amount is due until
the date such amount is paid in full, payable on
demand, at a rate per annum equal to the interest rate
otherwise applicable plus 2%.
Upfront Fees: Each Managing Agent will receive fees as described in
the Commitment Letter for the Tender Offer Facility and
the Facilities.
Funding and Yield
Protection: Standard provisions for illegality, inability to determine
rate, indemnification for break funding and increased
cost or reduced return, including without limitation,
those arising from reserve requirements (to the extent
actually incurred), taxes and capital adequacy.
Representations
and Warranties: Customary for facilities of this size, type and
purpose.
Covenants: Customary for facilities of this size, type, and purpose,
including, without limitation, those hereinafter set
forth.
1. For the periods listed below, the Leverage Ratio
shall not exceed the following:
Period Leverage Ratio
------ --------------
Closing
-4/30/95 5.8x
5/i/95-
4/30/96 5.5x
5/l/96-
10/31/96 5.0x
il/l/96-
4/30/97 4.75x
5/l/97-
4/30/98 4.5x
5/i/98-
4/30/99 4.0x
5/l/99-
thereafter 3.5x
2. Ratio of operating Cash Flow to cash interest
expense must at all times be equal to or
greater than 1.75x through 1/32/96, and 2.00x
thereafter.
For purposes of this ratio, as at any time
prior to the last day of the first full
fiscal quarter following the fiscal quarter
in which the initial funding of the Permanent
Facility occurs (the "Closing Quarter"),
interest expense for the period in question
shall be the annualized interest expense for
the period from the date of the initial
funding of the Permanent Facility until the
date of determination; at any time from and
including the last day of such first full
fiscal quarter to but excluding the last day
of the second full fiscal quarter following
the Closing Quarter, interest expense for the
period in question shall be four times the
interest expense for such first full fiscal
quarter; at any time from and including the
last day of such second full fiscal quarter
to but excluding the last day of the third
full fiscal quarter following the Closing
Quarter, interest expense for the period in
question shall be two times the interest
expense for such first two full fiscal
quarters; at any time from and including the
last day of such third full fiscal quarter to
but excluding the last day of the fourth full
fiscal quarter following the Closing Quarter,
interest expense for the period in question
shall be the interest expense for such first
three full fiscal quarters divided by 0.75;
as at the end of the fourth full fiscal
quarter and at all times thereafter, interest
expense for the period in question shall be
the interest expense for the preceding four
fiscal quarters.
3. Ratio of Operating Cash Flow to Pro Forma
Debt Service must, at all times, be equal to
or greater than 1.l0x.
4. Maintain a Fixed Charge Ratio at all times
equal to or greater than 1.00x.
5. Additional Indebtedness of the Borrower and
its subsidiaries to be limited to Parent Junior
Subordinated Debt, Permitted Mortgage
Indebtedness, Permitted Borrower Replacement Debt
and an additional basket of Indebtedness in an
amount to be determined. Indebtedness of Holdco
to be limited to (a) Parent Junior Subordinated
Debt and (b) Indebtedness (i) the terms and
conditions of which (A) do not require any cash
debt service (whether of principal or interest)
at any time prior to and including the final
maturity of the Facilities (or, if such terms and
conditions do require any such cash debt service,
the aggregate principal amount of such
indebtedness shall not exceed $200,000,000, the
terms and conditions of such cash debt service
requirement shall be reasonably satisfactory to
no fewer than four of the Managing Agents, such
Indebtedness shall be included in Covenants 1
through 4 and permission to make restricted
payments in respect of such cash debt service
requirements shall be added to Covenant 10) and
(B) are otherwise reasonably satisfactory to no
fewer than four of the Managing Agents, and (ii)
the first $200,000,000 of net proceeds of which
are used to prepay the Tranche B Term Loan.
6. Limitation on guaranties of the Borrower, its
Subsidiaries and Holdco.
7. Limitations on liens and other encumbrances
in favor of persons other than the Lenders.
8. Limitation on asset sales, with appropriate
basket to be determined.
9. Limitation on investments, including but not
limited to investments in joint ventures.
10. Prohibition of restricted payments until
1/30/98. Commencing in 1998 upon receipt of
the financial statements for the fiscal year
ended 1/31/98, and each year thereafter upon
receipt of the applicable financial
statements, restricted payments are allowed
in an amount up to 50% of Excess Cash Flow
provided that: (i) the Borrower has been in
compliance with the terms of the Facility for
two consecutive quarters without application
of the cure Provisions, (ii) no Event of
Default exists or would exist after such
payment and (iii) the prepayment of the
Facility required to be made to the Lenders
based on Excess Cash Flow shall have been
made (see "Mandatory Prepayments").
11. Prohibition on payment of management fees;
provided, however, that management fees may
be accrued but not paid through 1/30/98, and
after 1/30/98 may be paid (such accruals and
payments to be limited to a percentage of
total revenues to be determined), so long as
there is no Default and the Borrower remains
in compliance with the financial covenants
after giving pro forma effect to the payment
of such management fees.
12. Limitation on mergers and acquisitions;
provided, however, that any wholly-owned
subsidiary of the Borrower may merge into any
other wholly-owned subsidiary of the Borrower
or the Borrower at any time.
13. Limitation on transactions with affiliates,
with exceptions to be negotiated, including
waiver of "Company Repurchase Rights" (as
contemplated by Section 1 of the Letter
Agreement dated August 4, 1994 among Comcast
Corporation, Liberty Media Corporation and
Tele-Communications, Inc. (the "Joint Bidding
Agreement")).
14. (a)(i) Borrower to be at least 51%
beneficially owned by Comcast Corporation and
Liberty Media Corporation, and at least 51%
controlled by Comcast Corporation or its
affiliates ("Comcast") and Liberty Media
Corporation or its affiliates ("Liberty") and
(ii) Borrower to be at least 20% beneficially
owned by each of Liberty Media Corporation
and Comcast Corporation, in each case at all
times prior to the exercise, if any, of the
exit rights provided for in the Joint Bidding
Agreement, and (b) thereafter, the Borrower
shall be at least 51% beneficially owned and
51% controlled by either (i) Comcast or (ii)
Liberty. For purposes hereof, an "affiliate"
of a corporation is another corporation that
controls, is controlled by or is under common
control with such first corporation. For
purposes of this covenant, the term
"beneficially owned" refers to a person's
proportionate direct or indirect attributable
economic interest in the equity securities of
the Borrower. In the event that Holdco is
formed, Holdco shall be substituted in the
place of Borrower for purposes of determining
compliance with this covenant.
15. The arrangements and agreements currently in
effect between QVC and Comcast and QVC and
Tele-Communications, Inc. ("TCI") pertaining
to carriage and commissions and related
matters shall not be altered or modified in
any way that is materially adverse to QVC,
with exceptions to be negotiated, including
waiver of "Company Repurchase Rights" (as
contemplated by Section 1 of the Joint
Bidding Agreement).
16. Borrower shall enter into interest rate
protection agreements, including but not
limited to interest rate swaps and caps, in
form and substance and in amounts acceptable
to a majority of the Managing Agents.
17. Gross revenues of the Borrower must be
substantially derived from present and
related business.
18. The shareholders, management or other similar
agreement or agreements between Comcast and
Liberty, including the Joint Bidding
Agreement (collectively, the "Joint Ownership
and Management Agreements") will not be
amended or supplemented in a material manner
without the consent of the Required Lenders
(such consent not to be unreasonably
withheld).
19. Other covenants determined to be appropriate
by the Managing Agents.
Assignments: Each Managing Agent must at all times retain at
least 20% of its initial Commitment, unless
otherwise consented to by the Borrower. Retention
levels for other Lenders to be determined. The
minimum assignment amount is $10,000,000.
Conditions
Precedent: Customary for facilities of this size, type and
purpose, including, without limitation, the
following:
1. All conditions in the agreement of merger among
Comcast Corporation, Liberty Media Corporation,
Acquisition Corp. and QVC (the "Merger Agreement")
shall have been satisfied, and not waived except
with the consent of the Managing Agents, to the
reasonable satisfaction of the Managing Agents.
2. All necessary governmental (domestic and foreign)
and third party approvals in connection with the
Merger, the transactions contemplated by the
Merger Agreement and otherwise referred to herein
shall have been obtained and remain in effect, and
all applicable waiting periods shall have expired
without any action being taken by any competent
authority which restrains, prevents or imposes
materially adverse conditions upon, the
consummation of the Merger. Additionally, there
shall not exist any judgment, order, injunction or
other restraint prohibiting or imposing materially
adverse conditions upon the consummation of the
Merger.
3. The corporate and capital structure of New QVC,
all agreements relating thereto and all
organizational documents of New QVC shall be
reasonably satisfactory to the Managing Agents,
provided that any such agreements furnished to the
Managing Agents prior to, and in existence at the
time of, the making of the Tender Offer Loans
shall be deemed satisfactory to the Managing
Agents.
4. All material terms of, and the material
documentation for, the Joint Ownership and
Management Agreements shall be satisfactory to' the
Managing Agents.
5. The Lenders shall have a perfected first priority
security interest in the stock and assets of New
QVC and its subsidiaries to the extent required
above.
6. Any prior bank credit agreements to be terminated
and all amounts outstanding thereunder to be
repaid concurrently with the initial funding under
the Facilities, except for Permitted Mortgage
Indebtedness.
7. Borrower's property is free and clear of all liens
and encumbrances, except liens in favor of the
Lenders, Permitted Liens and Permitted Mortgage
Indebtedness.
8. A material adverse change in the business, assets,
liabilities, financial condition or results of
operations of QVC/New QVC and its consolidated
subsidiaries, taken as a whole, has not occurred
since the funding of the Tender Offer Facility.
9. No stock options, warrants or similar rights to
acquire the capital stock of New QVC exist other
than any that are acceptable to the Managing
Agents, and those which are in favor of Barry
Diller, New QVC, Comcast and Liberty.
10. The Lenders have received confirmation reasonably
satisfactory to them that the Merger complies with
all applicable legal requirements, including,
without limitation, Regulation G, T, U and X of
the Board of Governors of the Federal Reserve
system.
11. No violation of contractual restrictions has
occurred as a result of the Merger which would
materially and adversely affect the business,
assets, liabilities, financial condition or
results of operations of QVC/New QVC, or which
would materially and adversely affect the ability
of the Borrower to perform its obligations under
the loan documents.
12. Additional funding necessary to complete the
Merger shall have been provided to the appropriate
entity in a manner and on terms reasonably
satisfactory to the Managing Agents.
13. The Lenders shall have received legal opinions
from counsel, and covering matters, reasonably
acceptable to the Managing Agents.
14. All reasonable costs, fees, expenses (including
reasonable legal expenses) and other compensation
contemplated hereby payable to the Lenders or the
Managing Agents shall have been paid to the extent
due.
15. Other conditions determined to be appropriate by
the Managing Agents.
Events of Default: Customary for facilities of this size, type and
purpose.
Cure Provisions: Default in the Leverage Ratio may be cured by
prepaying outstandings under the Facilities with
cash on hand or from the proceeds of Parent Junior
Subordinated Debt or equity infusions, such that
after such prepayment the ratio would be met.
Defaults in the ratio of Operating Cash Flow to
interest expense, the ratio of Operating Cash Flow
to Pro Forma Debt Service and the Fixed Charge
Ratio may be cured from the proceeds of Parent
Junior Subordinated Debt or equity infusions in an
amount which, if such proceeds were added to
Operating Cash Flow, would result in the ratios
being in compliance. The Cure Provision may be
utilized only four times during the life of the
Facilities and only with respect to
non-consecutive fiscal quarters. Any such cure must
be made within 30 days following the earlier of
<PAGE>
(a) the date on which financial statements are
delivered to the Lenders showing the default in
question and (b) the last date on which such
financial statements were required to be
delivered.
Required Lenders: 51%
Expense and
Indemnification
Provisions: Customary for facilities of this size, type and
purpose.
Governing Law: New York
Miscellaneous
Provisions: Customary for facilities of this size, type and
purpose.
Definitions: "Debt Service" means, for any period, the sum of
all scheduled cash interest and scheduled
principal payments due and scheduled commitment
reductions in such period.
"Excess Cash Flow" means, as of the end of each
fiscal year, the amount, if any, by which
Operating Cash Flow for such fiscal year exceeds
the sum of (in each case for such fiscal year) (a)
cash interest expense and commitment fees, (b)
capital expenditures, (c) payments of principal of
the Term Loans and reductions of availability of
the Revolving Credit, to the extent such
reductions of availability require or result in a
mandatory payment of indebtedness, (d) net cash
taxes, (a) cash investments and advances to joint
ventures, (f) other cash investments, (g) payments
under charter affiliation agreements, (h)
permitted restricted payments (to the extent used
to pay interest on Indebtedness of Holdco
permitted under clause (b) of the second sentence
of covenant 5 above) and (i) $10,000,000.
"Fixed Charge Ratio" means the ratio of (a)
Operating Cash Flow plus aggregate availability
under the Revolving Credit and the Working Capital
Credit, up to a maximum of $20,000,000 through
1/31/96, $15,000,000 through 1/31/97 and
$10,000,000 through 1/31/98, plus dividends and
other payments received in cash from joint
ventures to (b) the sum of: (i) cash interest
expense; (ii) commitment fees; (iii) capital
expenditures; (iv) cash investments and advances
to joint ventures; (v) other cash investments;
(vi) payments under charter affiliation
agreements; (vii) net operating costs for Q2, On Q
or any similar channel or service to the extent
deducted in the calculation of operating income
but added back in the calculation of Operating
Cash Flow; (viii) cash taxes; (ix) permitted
restricted payments; and (x) scheduled principal
payments and commitment reductions with respect to
the applicable period.
"Holdco" means any corporation, partnership or
other entity (i) of which substantially all the
outstanding equity securities are owned by the
securityholders of Borrower, and in substantially
the same proportion, immediately prior to the
transaction pursuant to which Holdco is formed,
and (ii) which, immediately following the
transaction pursuant to which Holdco is formed,
and at all times thereafter, owns all of the
outstanding equity securities of the Borrower.
"Leverage Ratio" means, at any rate, the ratio of
Total Debt to Operating Cash Flow at such time.
"Operating Cash Flow" means, at any time,
operating income (including net income derived
from credit card operations) plus depreciation,
amortization, net operating costs for Q2, On Q or
any similar channel or service (up to an aggregate
maximum of $25,000,000 and only to the extent
deducted in determining operating income) until
1/31/97, management fees accrued but not paid in
cash and all other non-cash charges and
extraordinary items (to the extent deducted in
determining operating income) for the four
immediately preceding fiscal quarters, minus (to
the extent not deducted in determining operating
income) any management fees actually paid in cash
during such period.
"Parent Junior Subordinated Debt" means
subordinated loans to the Borrower or Holdco (to
the extent, in the case of any such loans to
Holdco, that it shall have loaned the proceeds
thereof to the Borrower as Parent Junior
Subordinated Debt) from Comcast, Liberty or any
affiliate of Comcast or Liberty, which are
subordinated to the Facilities on terms and
conditions reasonably satisfactory to the Managing
Agents (which shall include provisions to the
effect that interest may accrue but not be paid on
such loans, for so long as the Borrower is
prohibited from making restricted payments to pay
such interest).
"Permitted Mortgage Indebtedness" means mortgage
indebtedness in existence on the date of the
initial funding of the Facilities or incurred
thereafter, in an aggregate principal amount not
in excess of $20,000,000.
"Permitted Borrower Replacement Debt" means
indebtedness incurred by the Borrower, the
proceeds of which are used to prepay the Tranche B
Term Loan and the terms and conditions of which
shall be reasonably satisfactory to no fewer than
4 of the Managing Agents.
"Pro Forma Debt Service" Means Debt Service for
the four immediately succeeding quarters (assuming
no change in interest rates applicable to variable
debt and giving effect to required payments).
"Total Debt" means, as of any date, all
indebtedness for borrowed money plus capitalized
leases plus contingent liabilities of the
Borrower, but not including Parent Junior
Subordinated Debt.
CONFIDENTIAL
QVC, Inc.
Summary of Proposed Terms and Conditions
TENDER OFFER FACILITY
Borrower: QVC Programming Holdings, Inc. ("Acquisition
Corp.")
Facility: Up to $1,100,000,000 multi-draw Term Loan.
Managing Agents: Each Managing Agent will commit at least $210,000,000
to the Facility.
Arranging and
Administrative
Agent: ("[ ]").
Lenders: Managing Agents only.
Use of Proceeds: The Facility, except for the amount of the
"Holdback", as defined below, shall be used to finance
the acquisition by Acquisition Corp. of shares of QVC,
Inc. ("QVC") pursuant to a cash tender offer (the
"Tender Offer") by which Acquisition Corp. would seek
to acquire all outstanding shares of QVC not owned by
Acquisition Corp., which Tender Offer would be followed
by a merger (the "Merger") of Acquisition Corp. into
QVC, and to pay interest and fees with respect to the
Facility.
Final Maturity: The earlier of (A) 180 days after the date on
which the purchase of shares is made pursuant to the
Tender Offer (B) the date of consummation of the Merger
and (C) the date of abandonment of the Merger.
Holdback: A portion of the Facility, as shall be
determined by the Managing Agents, shall be held back
to be available to pay, inter alia, interest on the
Loans and fees owing to the Lenders under the Facility.
Drawings under the Facility shall be restricted such
that the amount held back (the amount held back at any
time, the "Holdback") shall be sufficient (as
determined by the Managing Agents in their sole
discretion, based on estimated interest rates and fees
owing to the Lenders) to pay all amounts described
above for three months from the date of the initial
Loans; provided, however, that if Comcast Corporation
provides the guaranty described in "Guaranties" below,
the amount of the Holdback shall be zero.
Guaranties: A guaranty of interest on the Loans and commitment
fees owing to the Lenders under the Facility may be
provided by Comcast Corporation.
Availability: Availability will be reduced by the amount of the
Holdback. Furthermore, the aggregate principal amount
of Tender Offer Loans will be limited to the
"collateral value" of the security for this facility as
determined in accordance with Regulation U of the
Federal Reserve Board ("Regulation U").
Security; All shares of QVC purchased pursuant to the Tender
Offer, as well as all shares of QVC contributed to the
capital of the Acquisition Corp.
Prepayments: Permitted at any time in whole or in part in a minimum
amount of $5,000,000 and in integral multiples of
$1,000,000 in excess thereof and upon one business
day's prior notice.
All prepayments shall be accompanied by (a) payment of
accrued interest on the amount prepaid to the date of
prepayment and (b) in the case of a borrowing bearing
interest based upon LIBOR, compensation of the Lenders
for break funding when billed.
Interest Rates and
commitment Fees: For Loans based on the Base Rate, the interest rate
shall be the Prime Rate. The Prime Rate shall be the
prime rate of [ ].
For Loans based on LIBOR, the interest rate shall be
the applicable reserve-adjusted (if incurred) LIBOR
rate plus 2.5%.
The commitment Fee shall be equal to a rate per annum
equal to .375% of the daily unused amount of the
Facility, commencing upon the acceptance by the
Borrower of the Commitment Letter for the Facility.
Computation
and Payment
of Interest: Interest on the Facility shall be computed on the basis
of a 360 day year or, in the case of loans bearing
interest based upon the Base Rate, a 365 or 366 day, as
the case may be, year for the actual number of days
elapsed and would be payable (1) to the extent bearing
interest based upon the Base Rate, quarterly in
arrears, and (2) to the extent bearing interest based
upon LIBOR, on the last day of the applicable interest
period (but in any event at least quarterly).
Default Rate
of Interest: To the extent permitted by applicable law, any payment
of principal and/or interest with respect to the
Facility which is not paid when due (whether at stated
maturity, by acceleration or otherwise) shall bear
interest, from the date such amount is due until the
date such amount is paid in full, payable on demand, at
a rate per annum equal to the interest rate otherwise
applicable plus 2%.
Upfront Fees: Each Managing Agent will receive fees as described
in the Commitment Letter for the Facility.
Funding and Yield
Protection: Standard provisions for illegality, inability to
determine rate, indemnification for break funding and
increased cost or reduced return, including without
limitation, those arising from reserve requirements,
taxes and capital adequacy.
Representations
and Warranties: Customary for a facility of this size, type and purpose.
Covenants: Customary for a facility of this size, type, and purpose,
including, without limitation, the following:
1. QVC will not incur any additional indebtedness.
2. QVC will not merge with or acquire any company,
or make any sales of assets outside the ordinary
course of business.
3. The shareholders, management or other
similar agreement or agreements (the "Joint
Ownership and Management Agreements") between
Comcast Corporation or any of its affiliates
("Comcast") and Liberty Media Corporation or any
of its affiliates (collectively, "Liberty") will
not be amended or supplemented in a material
manner, except with respect to transfers of
ownership interests in, and management control and
responsibilities for, the Borrower between Comcast
and Liberty. For purposes hereof, an "affiliate"
of a corporation is another corporation that
controls, is controlled by or is under common
control with such first corporation.
Assignments: No assignments permitted.
Conditions
Precedent: Customary for a facility of this size, type and
purpose, including, without limitation, the following:
1. QVC and Acquisition Corp. shall have
executed and delivered an agreement of merger
between them (the "Merger Agreement"), which shall
be reasonably satisfactory to the Managing Agents.
There shall not have occurred or exist any default
under the Merger Agreement.
2. All material terms of, and the material
documentation for, the Tender Offer (including
without limitation as to the price per share and
conditions contained in the Offer to purchase), and
any material amendments thereto, shall be
reasonably satisfactory to the Managing Agents.
3. All material terms of, and the material
documentation for, the Joint Ownership and
Management Agreements shall be reasonably
satisfactory to the Managing Agents.
4. Concurrently with the initial borrowing of
Tender Offer Loans, Acquisition Corp. shall
purchase pursuant to the Tender Offer at least that
number of shares which when added to the number of
shares held by Acquisition Corp. represents the
number of fully diluted shares of QVC which are
necessary for Acquisition Corp. to effect the
Merger without the affirmative vote of any other
shareholder of QVC, in accordance with applicable
law and the provisions of the charter documents of
QVC. Such purchased shares shall be free and clear
of all restrictions to purchase imposed by
applicable law or otherwise.
5. All conditions in the Tender Offer shall have been
satisfied, and not waived except with the consent
of the Managing Agents, to the reasonable
satisfaction of the Managing Agents.
6. Acquisition Corp. shall have received capital
contributions of at least 18,000,000 shares of QVC
and such amount of cash as is necessary to
consummate the Tender Offer and to do so in
compliance with applicable margin regulations.
7. All necessary governmental (domestic and foreign)
and third party approvals in connection with the
Tender Offer, the Merger, the transactions
contemplated by the Facility and otherwise referred
to herein shall have been obtained (or, with
respect to the Merger, can be timely obtained) and
remain in effect, and all applicable waiting
periods shall have expired without any action being
taken by any competent authority which restrains,
prevents or imposes materially adverse conditions
upon the consummation of the Tender Offer or the
Merger. Additionally, there shall not exist any
judgment, order, injunction or other restraint
prohibiting or imposing materially adverse
conditions upon the purchase of shares pursuant to
the Tender Offer or the consummation of the Merger,
and no actions, suits or proceedings shall then be
pending or threatened with respect to Acquisition
Corp. or QVC or its subsidiaries that could
reasonably be expected to (i) have a material
adverse effect on the business, assets,
liabilities, condition (financial or otherwise) or
results of operations of Acquisition Corp. or QVC
or its subsidiaries or (ii) have a material adverse
effect on the Tender Offer, the Merger, the rights
or remedies of the Lenders or on the ability of
Acquisition Corp. to perform its obligations under
the Tender Offer Facility.
8. The corporate and capital structure of Acquisition
Corp. and QVC, all agreements relating thereto and
all organizational documents of such entities shall
be reasonably satisfactory to the Managing Agents.
9. All loans and other financing to Acquisition Corp.
shall be in full compliance with all applicable
requirements of the margin regulations.
10. The Lenders shall have received evidence of solvency
and related matters satisfactory to the Managing
Agents.
11. The Lenders shall have a perfected first priority
security interest in the stock of QVC owned by the
Borrower.
12. Borrower's property is free and clear of all liens
and encumbrances, except liens in favor of the
Lenders and Permitted Liens.
13. A material adverse change in the business, assets,
liabilities, condition (financial or otherwise) or
results of operations of QVC has not occurred since
January 31, 1994.
14. No stock options, warrants or similar rights to
acquire the capital stock of QVC exist other than
any that are acceptable to the Managing Agents, and
those which are in favor of Comcast and Liberty.
15. The Lenders have received confirmation reasonably
satisfactory to them that the Tender Offer and the
Merger comply with all applicable legal
requirements, including, without limitation,
Regulation G, T, U and X of the Board of Governors
of the Federal Reserve system.
16. No violation of contractual restrictions has occurred
as a result of the Tender Offer and the Merger
which would materially and adversely affect the
business, assets, liabilities, condition (financial
or otherwise) or results of operations of QVC, or
which would materially and adversely affect the
ability of the Borrower to perform its obligations
under the loan documents.
17. Comcast or one of its subsidiaries has provided
any additional funding necessary to complete the
Tender Offer and undertakings to complete the
Merger in a manner and on terms reasonably
satisfactory to the Managing Agents.
18. The Lenders shall have received legal opinions
from counsel, and covering matters, reasonably
acceptable to the Managing Agents.
19. All costs, fees, expenses (including legal
expenses) and other compensation contemplated
hereby payable to the Lenders or the Managing
Agents shall have been paid to the extent due.
26. Other conditions determined to be appropriate
by the Managing Agents.
Events of Default: Customary for a facility of this size, type and
purpose.
Required Lenders: 51%
Expense and
Indemnification
Provisions: Customary for a facility of this size, type and
purpose.
Governing Law: New York
Miscellaneous
Provisions: Customary for a facility of this size, type and
purpose.
