<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
(TENDER OFFER STATEMENT PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
(AMENDMENT NO. 35)
PARAMOUNT COMMUNICATIONS INC.
(NAME OF SUBJECT COMPANY)
QVC NETWORK, INC.
COMCAST CORPORATION
BELLSOUTH CORPORATION
(BIDDERS)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
699216 10 7
(CUSIP Number of Class of Securities)
<TABLE>
<S> <C> <C>
Neal S. Grabell Stanley L. Wang Walter H. Alford
QVC Network, Inc. Comcast Corporation BellSouth Corporation
Goshen Corporate Park 1234 Market Street 1155 Peachtree Street, N.E.
West Chester, PA 19380 Philadelphia, PA 19107 Atlanta, GA 30367
(610) 430-1000 (215) 981-7510 (404) 249-2050
</TABLE>
(Names, Addresses and Telephone Numbers of Persons Authorized
to Receive Notices and Communications on Behalf of Bidders)
Copy to:
<TABLE>
<S> <C> <C>
Pamela S. Seymon Dennis S. Hersch Alan C. Stephenson
Wachtell, Lipton, Rosen & Katz Davis Polk & Wardwell Cravath, Swaine & Moore
51 West 52nd Street 450 Lexington Avenue One Worldwide Plaza
New York, NY 10019 New York, NY 10017 825 Eighth Avenue
(212) 403-1000 (212) 450-4000 New York, NY 10019
(212) 474-1000
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
This Statement amends and supplements the Tender Offer Statement on
Schedule 14D-1 filed with the Securities and Exchange Commission (the
"Commission") on October 27, 1993, as previously amended and supplemented (the
"Schedule 14D-1"), by QVC Network, Inc., a Delaware corporation ("QVC"), Comcast
Corporation, a Pennsylvania corporation ("Comcast"), and BellSouth Corporation,
a Georgia corporation ("BellSouth"). This Statement relates to a tender offer to
purchase 61,657,432 of the outstanding shares of Common Stock, par value $1.00
per share (the "Shares"), of Paramount Communications Inc., a Delaware
corporation ("Paramount"), or such greater number of Shares as equals 50.1% of
the Shares outstanding plus the Shares issuable upon the exercise of the then
exercisable stock options, as of the expiration of the Offer, and the associated
Rights, at a price of $104 per Share (and associated Right), net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated October 27, 1993 (the "Offer to
Purchase"), as amended and supplemented by the Supplement thereto, dated
November 12, 1993 (the "First Supplement"), the Second Supplement thereto, dated
December 23, 1993 (the "Second Supplement"), the Third Supplement thereto, dated
February 1, 1994 (the "Third Supplement"), the amendments thereto and the
related original and revised Letters of Transmittal (which together constitute
the "Offer"), which have been annexed to and filed with the Schedule 14D-1 as
Exhibits (a)(1), (a)(17), (a)(46), (a)(67), (a)(2), (a)(18), (a)(47) and
(a)(68), respectively. Capitalized terms used and not defined herein shall have
the meanings assigned such terms in the Offer and the Schedule 14D-1.
The purpose of this Amendment is to amend Item 11 of the Schedule 14D-1
filed with the Securities and Exchange Commission to make certain typographical
and conforming changes to the Third Supplement and related documents being
mailed to Paramount stockholders and to file certain documents described in the
Third Supplement.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C> <C>
(a)(1) -- Offer to Purchase, dated October 27, 1993.*
(a)(2) -- Letter of Transmittal.*
(a)(3) -- Notice of Guaranteed Delivery.*
(a)(4) -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees.*
(a)(5) -- Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.*
(a)(6) -- Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9.*
(a)(7) -- Press release issued by QVC on October 21, 1993.*
(a)(8) -- Form of Summary Advertisement, dated October 27, 1993.*
(a)(9) -- Text of Letter from QVC to Paramount, dated October 29, 1993.*
(a)(10) -- Press release issued by QVC on October 29, 1993.*
(a)(11) -- Form of Letter to Participants in the Dividend Reinvestment Plan of
Paramount Communications Inc.*
(a)(12) -- Text of Letter from Paramount to QVC, dated October 29, 1993.*
(a)(13) -- Text of Letter from Paramount to QVC advisor, dated November 1, 1993.*
(a)(14) -- Text of Letter from QVC advisor to Paramount, dated November 2, 1993.*
(a)(15) -- Press release issued by QVC on November 5, 1993.*
(a)(16) -- Press release issued by QVC on November 5, 1993.*
(a)(17) -- Supplement to the Offer to Purchase, dated November 12, 1993.*
(a)(18) -- Revised Letter of Transmittal.*
(a)(19) -- Revised Notice of Guaranteed Delivery.*
</TABLE>
- ---------------
* Previously filed.
2
<PAGE> 3
<TABLE>
<S> <C> <C>
(a)(20) -- Revised Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.*
(a)(21) -- Revised Form of Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.*
(a)(22) -- Press release issued by QVC on November 11, 1993.*
(a)(23) -- Press release issued by QVC on November 12, 1993.*
(a)(24) -- Revised Form of Letter to Participants in the Dividend Reinvestment Plan of
Paramount Communications, Inc.*
(a)(25) -- Press release issued by QVC on November 16, 1993.*
(a)(26) -- Amended Complaint in Viacom International Inc. v. Tele-Communications, Inc.,
et al., dated November 9, 1993, and filed in the United States District
Court for the Southern District of New York.*
(a)(27) -- Text of letter from QVC to Paramount, dated November 19, 1993.*
(a)(28) -- Press release issued by QVC on November 20, 1993.*
(a)(29) -- Press release issued by QVC on November 22, 1993.*
(a)(30) -- Press release issued by QVC on November 23, 1993.*
(a)(31) -- Press release issued by QVC on November 23, 1993.*
(a)(32) -- Press release issued by QVC on November 24, 1993.*
(a)(33) -- Press release issued by QVC on December 1, 1993.*
(a)(34) -- Press release issued by QVC on December 9, 1993.*
(a)(35) -- Press release issued by QVC on December 10, 1993.*
(a)(36) -- Press release issued by QVC on December 14, 1993.*
(a)(37) -- Text of letter from Paramount advisor to QVC, dated December 14, 1993.*
(a)(38) -- Text of letter from QVC advisor to Paramount advisor, dated December 14,
1993.*
(a)(39) -- Press release issued by QVC on December 15, 1993.*
(a)(40) -- Press release issued by QVC on December 16, 1993.*
(a)(41) -- Text of letter from Paramount advisor to QVC advisor, dated December 17,
1993.*
(a)(42) -- Text of letter from QVC advisor to Viacom advisor, dated December 17, 1993.*
(a)(43) -- Text of letter from QVC to Paramount, dated December 20, 1993.*
(a)(44) -- Press release issued by QVC on December 20, 1993.*
(a)(45) -- Press release issued by QVC on December 20, 1993.*
(a)(46) -- Second Supplement to the Offer to Purchase, dated December 23, 1993.*
(a)(47) -- Second Revised Letter of Transmittal.*
(a)(48) -- Second Revised Notice of Guaranteed Delivery.*
(a)(49) -- Second Revised Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.*
(a)(50) -- Second Revised Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.*
(a)(51) -- Second Revised Form of Letter to Participants in the Dividend Reinvestment
Plan of Paramount Communications Inc.*
(a)(52) -- Press release issued by QVC on December 22, 1993.*
(a)(53) -- Press release issued by QVC on December 27, 1993.*
</TABLE>
- ---------------
* Previously filed.
3
<PAGE> 4
<TABLE>
<S> <C> <C>
(a)(54) -- Press release issued by QVC on January 7, 1994.*
(a)(55) -- Press release issued by QVC on January 10, 1994.*
(a)(56) -- Text of letter from QVC advisor to Paramount, dated January 11, 1994.*
(a)(57) -- Text of letter from Paramount to QVC advisor, dated January 13, 1994.*
(a)(58) -- Text of letter from Paramount advisor to QVC advisor, dated January 13,
1994.*
(a)(59) -- Text of letter from QVC advisor to Paramount advisor, dated January 14,
1994.
(a)(60) -- Text of letter from Paramount advisor to QVC advisor, dated January 18,
1994.*
(a)(61) -- Text of letter from Paramount advisor to QVC advisor, dated January 18,
1994.*
(a)(62) -- Press release issued by QVC on January 19, 1994.*
(a)(63) -- Text of letter from QVC advisor to Paramount, dated January 20, 1994.*
(a)(64) -- Text of letter from Paramount to QVC, dated January 21, 1994.*
(a)(65) -- Text of letter from QVC advisor to Paramount, dated January 24, 1994.*
(a)(66) -- Text of letter from Paramount advisor to QVC advisor, dated January 27,
1994.*
(a)(67) -- Third Supplement to the Offer to Purchase, dated February 1, 1994.*
(a)(68) -- Third Revised Letter of Transmittal.*
(a)(69) -- Third Revised Notice of Guaranteed Delivery.*
(a)(70) -- Third Revised Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.*
(a)(71) -- Third Revised Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.*
(a)(72) -- Third Revised Form of Letter to Participants in the Dividend Reinvestment
Plan of Paramount Communications Inc.*
(a)(73) -- Press release issued by QVC on February 1, 1994.*
(a)(74) -- Press release issued by QVC on February 1, 1994.
(b)(1) -- Commitment Letters, dated September 30, 1993, by and between QVC and certain
banks.*
(b)(2) -- Commitment Letters, dated November 19, 1993, by and between QVC and certain
banks.*
(b)(3) -- Bank Credit Agreement, dated as of January 7, 1994, by and between QVC and
certain banks.*
(b)(4) -- Amendment to Bank Credit Agreement, dated as of February 1, 1994, by and
between QVC and certain banks.
(c)(1) -- Commitment Letter, dated October 15, 1993, by and among QVC and certain
investors named therein.*
(c)(2) -- Stockholders Agreement, dated July 16, 1993, among Liberty Media
Corporation, Comcast Corporation, Arrow Investments, L.P. and certain
affiliates and subsidiaries of such parties.*
(c)(3) -- Agreement Among Stockholders, dated October 15, 1993.*
(c)(4) -- Proposed form of merger agreement delivered by QVC to Paramount.*
(c)(5) -- First Amended and Supplemental Complaint in QVC Network, Inc. v. Paramount
Communications Inc. filed October 28, 1993 in the Delaware Chancery Court.*
(c)(6) -- Voting Trust Agreement, dated as of October 28, 1993, between QVC and G.
William Miller.*
</TABLE>
- ---------------
* Previously filed.
4
<PAGE> 5
<TABLE>
<S> <C> <C>
(c)(7) -- Informational request from QVC to Paramount, dated November 1, 1993.*
(c)(8) -- Fair bidding procedures delivered by QVC to Paramount on November 1, 1993.*
(c)(9) -- Proposed form of merger agreement delivered by QVC to Paramount on November
1, 1993.*
(c)(10) -- Commitment Letter, dated November 11, 1993, by and among QVC and certain
investors named therein.*
(c)(11) -- Memorandum of Understanding, dated November 11, 1993, by and between QVC and
BellSouth.*
(c)(12) -- Liberty-QVC Agreement, dated November 11, 1993, by and between QVC and
Liberty.*
(c)(13) -- Agreement Among Stockholders, dated November 11, 1993, among QVC, Advance,
Arrow, BellSouth, Comcast and Cox.*
(c)(14) -- Understanding Among Stockholders, dated November 11, 1993, among Arrow,
BellSouth, Comcast and Liberty.*
(c)(15) -- Agreement Containing Consent Order and Interim Agreement, dated November 12,
1993, among the FTC, Liberty, and TCI.*
(c)(16) -- BellSouth Commitment Letter, dated November 19, 1993, by and between
BellSouth and QVC.*
(c)(17) -- Memorandum Opinion and Preliminary Injunction Order in QVC Network, Inc. v.
Paramount Communications, Inc., C.A. No. 13208, both dated November 24,
1993, entered by Delaware Chancery Court.*
(c)(18) -- Revised Memorandum Opinion, dated November 26, 1993, in QVC Network, Inc. v.
Paramount Communications, Inc., C.A. No. 13208, entered by Delaware Chancery
Court.*
(c)(19) -- Order, dated December 9, 1993, in Paramount Communications Inc. v. QVC
Network, Inc., C.A. No. 13208, entered by Delaware Supreme Court.*
(c)(20) -- Proposed form of merger agreement delivered by Paramount to QVC on December
14, 1993.*
(c)(21) -- Text of letter from QVC advisor to Paramount advisor, dated December 10,
1993.*
(c)(22) -- Text of letter from Paramount advisor to QVC advisor, dated December 14,
1993.*
(c)(23) -- Agreement and Plan of Merger, between Paramount and QVC, dated as of
December 22, 1993.*
(c)(24) -- Exemption Agreement, between Paramount and QVC, dated December 22, 1993.*
(c)(25) -- Voting Agreement, dated December 22, 1993, among BellSouth, Comcast, Cox,
Advance and Arrow.*
(c)(26) -- First Amendment, dated as of December 27, 1993, to Agreement and Plan of
Merger, between Paramount and QVC.*
(c)(27) -- Letter Agreement, dated as of December 20, 1993, by and among QVC, Comcast,
Cox, Advance and BellSouth.*
(c)(28) -- Text of Letter, dated January 5, 1994, from Paramount and agreed to by QVC.*
(c)(29) -- First Amendment, dated as of January 27, 1994, to QVC Exemption Agreement.*
(c)(30) -- Proposed Form of Agreement and Plan of Merger between QVC and Paramount,
delivered by Paramount on January 27, 1994.*
(c)(31) -- Letter Agreement, dated as of February 1, 1994, by and among QVC, Comcast,
Cox, Advance and BellSouth.
</TABLE>
- ---------------
* Previously filed.
5
<PAGE> 6
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.
QVC NETWORK, INC.
By: /s/ Neal S. Grabell
Neal S. Grabell
Senior Vice President,
General Counsel and
Corporate Secretary
Dated: February 2, 1994
<PAGE> 7
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.
COMCAST CORPORATION
By: /s/ Stanley L. Wang
Stanley L. Wang
Senior Vice President
Dated: February 2, 1994
<PAGE> 8
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.
BELLSOUTH CORPORATION
By: /s/ Charles C. Miller, III
Charles C. Miller, III
Vice President --
Strategic Planning and
Corporate Development
Dated: February 2, 1994
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
-------- ----------------------------------------------------------------------------
<S> <C> <C>
(a)(1) -- Offer to Purchase, dated October 27, 1993.*
(a)(2) -- Letter of Transmittal.*
(a)(3) -- Notice of Guaranteed Delivery.*
(a)(4) -- Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees.*
(a)(5) -- Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.*
(a)(6) -- Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9.*
(a)(7) -- Press release issued by QVC on October 21, 1993.*
(a)(8) -- Form of Summary Advertisement, dated October 27, 1993.*
(a)(9) -- Text of Letter from QVC to Paramount, dated October 29, 1993.*
(a)(10) -- Press release issued by QVC on October 29, 1993.*
(a)(11) -- Form of Letter to Participants in the Dividend Reinvestment Plan of
Paramount Communications Inc.*
(a)(12) -- Text of Letter from Paramount to QVC, dated October 29, 1993.*
(a)(13) -- Text of Letter from Paramount to QVC advisor, dated November 1, 1993.*
(a)(14) -- Text of Letter from QVC advisor to Paramount, dated November 2, 1993.*
(a)(15) -- Press release issued by QVC on November 5, 1993.*
(a)(16) -- Press release issued by QVC on November 5, 1993.*
(a)(17) -- Supplement to the Offer to Purchase, dated November 12, 1993.*
(a)(18) -- Revised Letter of Transmittal.*
(a)(19) -- Revised Notice of Guaranteed Delivery.*
(a)(20) -- Revised Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.*
(a)(21) -- Revised Form of Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.*
(a)(22) -- Press release issued by QVC on November 11, 1993.*
(a)(23) -- Press release issued by QVC on November 12, 1993.*
(a)(24) -- Revised Form of Letter to Participants in the Dividend Reinvestment Plan of
Paramount Communications, Inc.*
(a)(25) -- Press release issued by QVC on November 16, 1993.*
(a)(26) -- Amended Complaint in Viacom International Inc. v. Tele-Communications, Inc.,
et al., dated November 9, 1993, and filed in the United States District
Court for the Southern District of New York.*
(a)(27) -- Text of letter from QVC to Paramount, dated November 19, 1993.*
(a)(28) -- Press release issued by QVC on November 20, 1993.*
(a)(29) -- Press release issued by QVC on November 22, 1993.*
(a)(30) -- Press release issued by QVC on November 23, 1993.*
</TABLE>
- ---------------
* Previously filed.
<PAGE> 10
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
-------- ----------------------------------------------------------------------------
<S> <C> <C>
(a)(31) -- Press release issued by QVC on November 23, 1993.*
(a)(32) -- Press release issued by QVC on November 24, 1993.*
(a)(33) -- Press release issued by QVC on December 1, 1993.*
(a)(34) -- Press release issued by QVC on December 9, 1993.*
(a)(35) -- Press release issued by QVC on December 10, 1993.*
(a)(36) -- Press release issued by QVC on December 14, 1993.*
(a)(37) -- Text of letter from Paramount advisor to QVC, dated December 14, 1993.*
(a)(38) -- Text of letter from QVC advisor to Paramount advisor, dated December 14,
1993.*
(a)(39) -- Press release issued by QVC on December 15, 1993.*
(a)(40) -- Press release issued by QVC on December 16, 1993.*
(a)(41) -- Text of letter from Paramount advisor to QVC advisor, dated December 17,
1993.*
(a)(42) -- Text of letter from QVC advisor to Viacom advisor, dated December 17, 1993.*
(a)(43) -- Text of letter from QVC to Paramount, dated December 20, 1993.*
(a)(44) -- Press release issued by QVC on December 20, 1993.*
(a)(45) -- Press release issued by QVC on December 20, 1993.*
(a)(46) -- Second Supplement to the Offer to Purchase, dated December 23, 1993.*
(a)(47) -- Second Revised Letter of Transmittal.*
(a)(48) -- Second Revised Notice of Guaranteed Delivery.*
(a)(49) -- Second Revised Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.*
(a)(50) -- Second Revised Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.*
(a)(51) -- Second Revised Form of Letter to Participants in the Dividend Reinvestment
Plan of Paramount Communications Inc.*
(a)(52) -- Press release issued by QVC on December 22, 1993.*
(a)(53) -- Press release issued by QVC on December 27, 1993.*
(a)(54) -- Press release issued by QVC on January 7, 1994.*
(a)(55) -- Press release issued by QVC on January 10, 1994.*
(a)(56) -- Text of letter from QVC advisor to Paramount, dated January 11, 1994.*
(a)(57) -- Text of letter from Paramount to QVC advisor, dated January 13, 1994.*
(a)(58) -- Text of letter from Paramount advisor to QVC advisor, dated January 13,
1994.*
(a)(59) -- Text of letter from QVC advisor to Paramount advisor, dated January 14,
1994.
(a)(60) -- Text of letter from Paramount advisor to QVC advisor, dated January 18,
1994.*
(a)(61) -- Text of letter from Paramount advisor to QVC advisor, dated January 18,
1994.*
(a)(62) -- Press release issued by QVC on January 19, 1994.*
(a)(63) -- Text of letter from QVC advisor to Paramount, dated January 20, 1994.*
(a)(64) -- Text of letter from Paramount to QVC, dated January 21, 1994.*
(a)(65) -- Text of letter from QVC advisor to Paramount, dated January 24, 1994.*
(a)(66) -- Text of letter from Paramount advisor to QVC advisor, dated January 27,
1994.*
(a)(67) -- Third Supplement to the Offer to Purchase, dated February 1, 1994.*
</TABLE>
- ---------------
* Previously filed.
<PAGE> 11
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
-------- ----------------------------------------------------------------------------
<S> <C> <C>
(a)(68) -- Third Revised Letter of Transmittal.*
(a)(69) -- Third Revised Notice of Guaranteed Delivery.*
(a)(70) -- Third Revised Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.*
(a)(71) -- Third Revised Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.*
(a)(72) -- Third Revised Form of Letter to Participants in the Dividend Reinvestment
Plan of Paramount Communications Inc.*
(a)(73) -- Press release issued by QVC on February 1, 1994.*
(a)(74) -- Press release issued by QVC on February 1, 1994.
(b)(1) -- Commitment Letters, dated September 30, 1993, by and between QVC and certain
banks.*
(b)(2) -- Commitment Letters, dated November 19, 1993, by and between QVC and certain
banks.*
(b)(3) -- Bank Credit Agreement, dated as of January 7, 1994, by and between QVC and
certain banks.*
(b)(4) -- Amendment to Bank Credit Agreement, dated as of February 1, 1994, by and
between QVC and certain banks.
(c)(1) -- Commitment Letter, dated October 15, 1993, by and among QVC and certain
investors named therein.*
(c)(2) -- Stockholders Agreement, dated July 16, 1993, among Liberty Media
Corporation, Comcast Corporation, Arrow Investments, L.P. and certain
affiliates and subsidiaries of such parties.*
(c)(3) -- Agreement Among Stockholders, dated October 15, 1993.*
(c)(4) -- Proposed form of merger agreement delivered by QVC to Paramount.*
(c)(5) -- First Amended and Supplemental Complaint in QVC Network, Inc. v. Paramount
Communications Inc. filed October 28, 1993 in the Delaware Chancery Court.*
(c)(6) -- Voting Trust Agreement, dated as of October 28, 1993, between QVC and G.
William Miller.*
(c)(7) -- Informational request from QVC to Paramount, dated November 1, 1993.*
(c)(8) -- Fair bidding procedures delivered by QVC to Paramount on November 1, 1993.*
(c)(9) -- Proposed form of merger agreement delivered by QVC to Paramount on November
1, 1993.*
(c)(10) -- Commitment Letter, dated November 11, 1993, by and among QVC and certain
investors named therein.*
(c)(11) -- Memorandum of Understanding, dated November 11, 1993, by and between QVC and
BellSouth.*
(c)(12) -- Liberty-QVC Agreement, dated November 11, 1993, by and between QVC and
Liberty.*
(c)(13) -- Agreement Among Stockholders, dated November 11, 1993, among QVC, Advance,
Arrow, BellSouth, Comcast and Cox.*
(c)(14) -- Understanding Among Stockholders, dated November 11, 1993, among Arrow,
BellSouth, Comcast and Liberty.*
</TABLE>
- ---------------
* Previously filed.
<PAGE> 12
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
-------- ----------------------------------------------------------------------------
<S> <C> <C>
(c)(15) -- Agreement Containing Consent Order and Interim Agreement, dated November 12,
1993, among the FTC, Liberty, and TCI.*
(c)(16) -- BellSouth Commitment Letter, dated November 19, 1993, by and between
BellSouth and QVC.*
(c)(17) -- Memorandum Opinion and Preliminary Injunction Order in QVC Network, Inc. v.
Paramount Communications, Inc., C.A. No. 13208, both dated November 24,
1993, entered by Delaware Chancery Court.*
(c)(18) -- Revised Memorandum Opinion, dated November 26, 1993, in QVC Network, Inc. v.
Paramount Communications, Inc., C.A. No. 13208, entered by Delaware Chancery
Court.*
(c)(19) -- Order, dated December 9, 1993, in Paramount Communications Inc. v. QVC
Network, Inc., C.A. No. 13208, entered by Delaware Supreme Court.*
(c)(20) -- Proposed form of merger agreement delivered by Paramount to QVC on December
14, 1993.*
(c)(21) -- Text of letter from QVC advisor to Paramount advisor, dated December 10,
1993.*
(c)(22) -- Text of letter from Paramount advisor to QVC advisor, dated December 14,
1993.*
(c)(23) -- Agreement and Plan of Merger, between Paramount and QVC, dated as of
December 22, 1993.*
(c)(24) -- Exemption Agreement, between Paramount and QVC, dated December 22, 1993.*
(c)(25) -- Voting Agreement, dated December 22, 1993, among BellSouth, Comcast, Cox,
Advance and Arrow.*
(c)(26) -- First Amendment, dated as of December 27, 1993, to Agreement and Plan of
Merger, between Paramount and QVC.*
(c)(27) -- Letter Agreement, dated as of December 20, 1993, by and among QVC, Comcast,
Cox, Advance and BellSouth.*
(c)(28) -- Text of Letter, dated January 5, 1994, from Paramount and agreed to by QVC.*
(c)(29) -- First Amendment, dated as of January 27, 1994, to QVC Exemption Agreement.*
(c)(30) -- Proposed Form of Agreement and Plan of Merger between QVC and Paramount,
delivered by Paramount on January 27, 1994.*
(c)(31) -- Letter Agreement, dated as of February 1, 1994, by and among QVC, Comcast,
Cox, Advance and BellSouth.
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
THIRD SUPPLEMENT TO THE OFFER TO PURCHASE DATED OCTOBER 27, 1993
QVC NETWORK, INC.
HAS INCREASED THE PRICE OF
ITS OFFER TO PURCHASE FOR CASH
61,657,432 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
PARAMOUNT COMMUNICATIONS INC.
TO
$104 NET PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, FEBRUARY 14, 1994,
UNLESS THE OFFER IS EXTENDED.
------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, AT LEAST 61,657,432
SHARES, OR SUCH GREATER NUMBER OF SHARES AS EQUALS 50.1% OF THE SHARES
OUTSTANDING PLUS THE NUMBER OF SHARES ISSUABLE UPON THE EXERCISE OF THE THEN
EXERCISABLE STOCK OPTIONS, AS OF THE EXPIRATION OF THE OFFER, BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER. THE OFFER IS
ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION 2 OF THIS THIRD
SUPPLEMENT.
------------------------
IMPORTANT
QVC AND PARAMOUNT ARE PARTIES TO AN EXEMPTION AGREEMENT. UNDER THE TERMS OF
THE EXEMPTION AGREEMENT, IF, AT THE EXPIRATION DATE, A NUMBER OF SHARES THAT
WOULD SATISFY THE MINIMUM CONDITION SHALL HAVE BEEN VALIDLY TENDERED AND NOT
WITHDRAWN PURSUANT TO THE OFFER, QVC NEVERTHELESS WOULD BE REQUIRED, UNDER
CERTAIN CIRCUMSTANCES, TO EXTEND THE EXPIRATION DATE FOR A PERIOD OF UP TO TEN
BUSINESS DAYS. SEE SECTION 4 OF THE SECOND SUPPLEMENT AND SECTION 3 OF THIS
THIRD SUPPLEMENT.
Any stockholder desiring to tender all or any portion of his Shares (and the
associated Rights) should either (a) complete and sign one of the Letters of
Transmittal (or a facsimile thereof) accompanying the Offer to Purchase, the
First Supplement, the Second Supplement or this Third Supplement in accordance
with the instructions in such Letter of Transmittal and mail or deliver it
together with the certificate(s) representing tendered Shares and, if separate,
the certificate(s) representing the associated Rights, and any other required
documents, to the Depositary or tender such Shares (and the associated Rights)
pursuant to the procedures for book-entry transfer set forth in Section 3 of the
Offer to Purchase or (b) request his broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for him. A stockholder whose
Shares and, if applicable, Rights are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if he desires to
tender such Shares and, if applicable, Rights. Stockholders will be required to
tender one Right for each Share tendered in order to effect a valid tender of
such Share.
A stockholder who desires to tender his Shares and, if applicable, Rights
and whose certificates representing such Shares (and Rights, if applicable) are
not immediately available or who cannot comply with the procedures for
book-entry transfer on a timely basis may tender such Shares (and Rights, if
applicable) by following the procedures for guaranteed delivery set forth in
Section 3 of the Offer to Purchase.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of this Third Supplement. Additional copies of the
Offer to Purchase, the First Supplement, the Second Supplement, this Third
Supplement, the third revised Letter of Transmittal, the third revised Notice of
Guaranteed Delivery and other related materials may be obtained from the
Information Agent or from brokers, dealers, commercial banks and trust
companies.
------------------------
The Dealer Manager for the Offer is:
[LOGO]
February 1, 1994
<PAGE> 2
To: All Holders of Shares of Common Stock
(Including the Associated Common Stock
Purchase Rights) of Paramount Communications Inc.:
INTRODUCTION
The following information amends and supplements the Offer to Purchase,
dated October 27, 1993 (the "Offer to Purchase"), the Supplement, dated November
12, 1993 (the "First Supplement"), the Second Supplement, dated December 23,
1993 (the "Second Supplement"), and the amendments thereto, of QVC Network,
Inc., a Delaware corporation ("QVC"). Pursuant to this Third Supplement, QVC is
now offering to purchase 61,657,432 shares of Common Stock, par value $1.00 per
share (the "Shares"), of Paramount Communications Inc., a Delaware corporation
("Paramount"), or such greater number of Shares as equals 50.1% of the Shares
outstanding plus the Shares issuable upon the exercise of the then exercisable
stock options, as of the expiration of the Offer (such number being referred to
as the "Minimum Number of Shares"), and the associated Common Stock Purchase
Rights (the "Rights") issued pursuant to the Rights Agreement, dated as of
September 7, 1988, between Paramount and Chemical Bank, as Rights Agent, as
amended (the "Rights Agreement"), at a price of $104 per Share (and associated
Right), net to the seller in cash, without interest thereon (the "Offer Price"),
upon the terms and subject to the conditions set forth in the Offer to Purchase,
as amended and supplemented by the First Supplement, the Second Supplement and
this Third Supplement (together, the "Supplements"), the amendments thereto and
in the related Letters of Transmittal (which, together with the Offer to
Purchase, the Supplements and the amendments thereto, constitute the "Offer").
Unless the context requires otherwise, all references to Shares shall include
the Rights, and all references to the Rights shall include all benefits that may
inure to holders of the Rights pursuant to the Rights Agreement.
Except as otherwise set forth in this Third Supplement or in the third
revised (blue) Letter of Transmittal, the terms and conditions previously set
forth in the Offer to Purchase, the First Supplement, the Second Supplement and
the amendments thereto remain applicable in all respects to the Offer, and this
Third Supplement should be read in conjunction with the Offer to Purchase, the
First Supplement, the Second Supplement, the amendments thereto and the third
revised (blue) Letter of Transmittal. Unless the context requires otherwise,
terms not defined herein have the meanings ascribed to them in the Offer to
Purchase, the First Supplement, the Second Supplement and the amendments
thereto.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE FOLLOWING CONDITIONS
HAVING BEEN MET: (I) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE
EXPIRATION DATE THE MINIMUM NUMBER OF SHARES (SUCH CONDITION BEING REFERRED TO
AS THE "MINIMUM CONDITION") AND (II) THE BOARD OF DIRECTORS OF PARAMOUNT HAVING
AMENDED THE RIGHTS AGREEMENT TO MAKE THE RIGHTS INAPPLICABLE TO THE OFFER AND
THE QVC SECOND-STEP MERGER (AS DEFINED BELOW) OR THE RIGHTS BEING OTHERWISE
INAPPLICABLE TO THE OFFER AND THE QVC SECOND-STEP MERGER (SUCH CONDITION BEING
REFERRED TO AS THE "RIGHTS CONDITION"). SEE SECTION 2 OF THIS THIRD SUPPLEMENT,
WHICH SETS FORTH IN THEIR ENTIRETY THE CONDITIONS TO THE OFFER. CONSUMMATION OF
THE QVC SECOND-STEP MERGER WOULD BE SUBJECT TO APPROVAL BY QVC'S AND PARAMOUNT'S
STOCKHOLDERS. SEE SECTION 11 OF THE OFFER TO PURCHASE AND SECTION 4 OF THE
SECOND SUPPLEMENT.
IN THE EVENT THE OFFER IS CONSUMMATED, QVC INTENDS TO EFFECTUATE A
SECOND-STEP MERGER (AS REVISED, THE "QVC SECOND-STEP MERGER"), PURSUANT TO WHICH
EACH SHARE THEN OUTSTANDING (OTHER THAN ANY SHARES HELD IN THE TREASURY OF
PARAMOUNT, SHARES OWNED BY QVC OR ANY WHOLLY OWNED SUBSIDIARY OF QVC OR
PARAMOUNT AND DISSENTING SHARES) WILL BE CONVERTED INTO THE RIGHT TO RECEIVE
1.2361 SHARES OF QVC COMMON STOCK, .2386 SHARES OF A NEW SERIES OF CUMULATIVE
NON-CONVERTIBLE EXCHANGEABLE PREFERRED STOCK, PAR VALUE $.10 PER SHARE (THE "QVC
MERGER PREFERRED STOCK"), OF QVC HAVING THE PRINCIPAL TERMS DESCRIBED IN SECTION
3 OF THE SECOND SUPPLEMENT AND .32 WARRANTS ("WARRANTS") TO PURCHASE QVC COMMON
STOCK HAVING THE PRINCIPAL TERMS DESCRIBED IN SECTION 3 OF THE SECOND SUPPLEMENT
(COLLECTIVELY, THE "QVC SECOND-STEP MERGER CONSIDERATION").
QVC and Paramount are parties to an Exemption Agreement, dated as of
January 21, 1994, as amended (the "QVC Exemption Agreement"), in which Paramount
has agreed, subject to certain exceptions, that upon delivery by QVC of a
Completion Certificate (as defined in the QVC Exemption Agreement), it will
<PAGE> 3
take all necessary action to amend the Rights Agreement to make it inapplicable
to the Offer and to take all appropriate action so that the restrictions on
business combinations in (i) Article XI of Paramount's Certificate of
Incorporation and (ii) Section 203 of Delaware Law will not apply to the
consummation of the Offer. See Section 4 of the Second Supplement and Section 3
of this Third Supplement.
Procedures for tendering Shares are set forth in Section 3 of the Offer to
Purchase. Tendering stockholders may continue to use the original (pink) Letter
of Transmittal and the original (pink) Notice of Guaranteed Delivery
accompanying the Offer to Purchase, the revised (blue) Letter of Transmittal and
the revised (blue) Notice of Guaranteed Delivery accompanying the First
Supplement, the second revised (blue) Letter of Transmittal and the second
revised (blue) Notice of Guaranteed Delivery accompanying the Second Supplement,
or the third revised (blue) Letter of Transmittal and the third revised (blue)
Notice of Guaranteed Delivery accompanying this Third Supplement. While the
original, the revised and the second revised Letters of Transmittal refer to the
Offer to Purchase, the First Supplement and the Second Supplement, respectively,
stockholders using such documents to tender their Shares (and associated Rights)
nevertheless will receive $104 per Share (and associated Right) for each Share
(and associated Right) validly tendered and not withdrawn and accepted for
payment pursuant to the Offer, subject to the conditions of the Offer.
STOCKHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED AND NOT WITHDRAWN THEIR SHARES
(AND ASSOCIATED RIGHTS) PURSUANT TO THE OFFER ARE NOT REQUIRED TO TAKE ANY
FURTHER ACTION IN ORDER TO RECEIVE, SUBJECT TO THE CONDITIONS OF THE OFFER, THE
INCREASED OFFER PRICE OF $104 PER SHARE (AND ASSOCIATED RIGHT), IF THE SHARES
(AND ASSOCIATED RIGHTS) ARE ACCEPTED FOR PAYMENT AND PAID FOR BY QVC PURSUANT TO
THE OFFER, EXCEPT AS MAY BE REQUIRED BY THE GUARANTEED DELIVERY PROCEDURE IF
SUCH PROCEDURE WAS UTILIZED. SEE SECTION 3 OF THE OFFER TO PURCHASE.
THE OFFER TO PURCHASE, THE SUPPLEMENTS, THE AMENDMENTS THERETO AND THE
RELATED LETTERS OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE
READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
1. AMENDED TERMS OF THE OFFER. The Offer is being made for 61,657,432
Shares (and associated Rights) or such greater number of Shares (and associated
Rights) as equals 50.1% of the Shares outstanding plus the Shares issuable upon
the exercise of the then exercisable stock options, as of the Expiration Date.
Based upon information included in the New Viacom-Paramount Merger Agreement (as
defined in Section 3 of this Third Supplement), as of January 19, 1994, there
were 121,865,001 Shares outstanding and options to purchase 2,581,763 Shares
outstanding. The price per Share to be paid pursuant to the Offer has been
increased from $92 per Share (and associated Right) to $104 per Share (and
associated Right), net to the seller in cash and without interest thereon. All
stockholders whose Shares (and associated Rights) are validly tendered and not
withdrawn and accepted for payment pursuant to the Offer (including Shares (and
associated Rights) tendered prior to the date of this Third Supplement) will
receive the increased price.
Pursuant to the QVC Exemption Agreement, the Expiration Date has been
extended to 12:00 midnight, New York City time, on Monday, February 14, 1994,
unless and until QVC, in accordance with the terms of the QVC Exemption
Agreement, shall have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by QVC, shall expire. See Section 4 of
the Second Supplement, as amended, for certain requirements to extend the
Expiration Date.
This Third Supplement, the third revised (blue) Letter of Transmittal and
other relevant materials will be mailed to record holders of Shares and Rights
whose names appear on Paramount's stockholder list and the list of holders of
Rights, if any, and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list and list of holders of Rights or, if applicable,
who are listed as participants in a clearing agency's security position listing
for subsequent transmittal to beneficial owners of Shares and/or Rights.
2. CONDITIONS TO THE OFFER. The conditions to the Offer are hereby
amended and restated in their entirety as follows:
Notwithstanding any other provision of the Offer, QVC will not be required
to accept for payment or pay for any Shares tendered pursuant to the Offer, and
may terminate or amend the Offer and may postpone the
2
<PAGE> 4
acceptance for payment of and payment for Shares tendered, if (i) the Minimum
Condition shall not have been satisfied, (ii) the Rights Condition shall not
have been satisfied, (iii) the Paramount Board of Directors shall not have taken
all necessary actions so as to make the restrictions on business combinations
contained in the supermajority voting requirement of Article XI of Paramount's
Certificate of Incorporation inapplicable to the Offer and the QVC Second-Step
Merger (the "Supermajority Condition"), (iv) the Paramount Board of Directors
shall not have taken all necessary actions so as to make the restrictions on
business combinations contained in Section 203 of Delaware Law inapplicable to
QVC in connection with the Offer and the QVC Second-Step Merger (the "Section
203 Condition"), or (v) at any time on or after December 22, 1993, and prior to
the acceptance for payment of Shares, any of the following conditions shall not
exist:
(a) no governmental entity or federal or state court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is in effect and which
materially restricts, prevents or prohibits consummation of the Offer, the QVC
Second-Step Merger or any transaction contemplated by the proposed QVC merger
agreement attached as an exhibit to the QVC Exemption Agreement (the "Proposed
QVC Merger Agreement"); provided that QVC shall have used its reasonable best
efforts to cause any such decree, judgment, injunction or other order to be
vacated or lifted (the "Injunction Condition");
(b) each of the representations and warranties of Paramount contained in
the Proposed QVC Merger Agreement (as if such agreement were duly executed by
Paramount) shall be true and correct, except (i) for changes specifically
permitted by the Proposed QVC Merger Agreement and except that the truth and
correctness of representations contained in the Proposed QVC Merger Agreement
which relate to any agreements with respect to the transactions contemplated by
the Proposed QVC Merger Agreement (other than the Proposed QVC Merger Agreement)
between the parties to the Proposed QVC Merger Agreement which by the terms of
the Proposed QVC Merger Agreement terminate upon consummation of the QVC
Second-Step Merger will not be a condition to the consummation of the Offer and
(ii) that those representations and warranties which address matters only as of
a particular date shall be true and correct as of such date, except in any case
for such failures to be true and correct which would not, individually or in the
aggregate, have a Paramount Material Adverse Effect (as defined in the Proposed
QVC Merger Agreement);
(c) Paramount shall have performed or complied in all material respects
with all agreements and covenants required by the Proposed QVC Merger Agreement
(as if such agreement were duly executed by Paramount) to be performed or
complied with by it;
(d) since December 22, 1993, there shall have been no change, occurrence or
circumstance in the business, results of operations or financial condition of
Paramount or any Paramount subsidiary having or reasonably likely to have,
individually or in the aggregate, a material adverse effect on the business,
results of operations or financial condition of Paramount and its subsidiaries,
taken as a whole;
(e) the New Viacom-Paramount Merger Agreement (as defined in Section 3 of
this Third Supplement) shall have been terminated in accordance with its terms;
and
(f) QVC and Paramount shall not have agreed (including pursuant to the
terms of the QVC Exemption Agreement) that QVC will terminate the Offer or
postpone the acceptance for payment of or payment for Shares thereunder;
and, in the reasonable judgment of QVC in any such case, and regardless of the
circumstances (including any action or inaction by QVC or any of its affiliates)
giving rise to any such condition, it is inadvisable to proceed with such
acceptance for payment or payment.
The foregoing conditions are for the sole benefit of QVC and may be
asserted by QVC regardless of the circumstances giving rise to any such
condition or may be waived by QVC in whole or in part at any time and from time
to time in its sole discretion. The failure by QVC at any time to exercise any
of the foregoing rights will not be deemed a waiver of any such right; the
waiver of any such right with respect to particular facts and circumstances will
not be deemed a waiver with respect to any other facts and circumstances; and
each such right will be deemed an ongoing right that may be asserted at any time
and from time to time.
3
<PAGE> 5
3. BACKGROUND OF THE OFFER SINCE DECEMBER 23, 1993; CONTACTS WITH
PARAMOUNT. The discussion set forth in Section 10 of the Offer to Purchase,
Section 5 of the First Supplement and Section 3 of the Second Supplement and the
amendments thereto is hereby amended and supplemented as follows:
On January 7, 1994, Viacom announced a proposed merger of Viacom and
Blockbuster Entertainment Corporation ("Blockbuster"). In addition, Viacom
announced certain changes to the terms of the Viacom Offer (the "First
Viacom-Blockbuster Offer"), including an increase in the price per Share to be
paid pursuant to the First Viacom-Blockbuster Offer and a reduction in the
consideration to be paid in their contemplated second-step merger. According to
public filings on Schedule 14D-9, at a meeting of the Paramount Board held on
January 12, 1994, the Paramount Board unanimously recommended that stockholders
reject the First Viacom-Blockbuster Offer and not tender any of their Shares
pursuant to such offer and reaffirmed its recommendation that holders of Shares
tender such Shares pursuant to the Offer as such Offer existed on the date
thereof.
On January 18, 1994, Viacom increased the consideration to be offered
pursuant to the Viacom-Blockbuster Offer (the "Second Viacom-Blockbuster Offer")
and altered the consideration to be paid in their contemplated second-step
merger. According to public filings on Schedule 14D-9, at a meeting of the
Paramount Board held on January 21, 1994, the Paramount Board unanimously
recommended that stockholders reject the Offer as such Offer existed on the date
thereof and recommended that stockholders tender their Shares pursuant to the
Second Viacom-Blockbuster Offer. By letter to QVC dated January 21, 1994,
Paramount terminated the QVC Merger Agreement. On such date, Paramount and
Viacom entered into a merger agreement (the "New Viacom-Paramount Merger
Agreement").
Pursuant to the QVC Exemption Agreement, on February 1, 1994, QVC notified
Paramount that a number of Shares that would satisfy the Minimum Condition of
the Offer had not been validly tendered prior to the previously scheduled
Expiration Date and that QVC was extending the Expiration Date to 12:00
midnight, New York City time, on February 14, 1994. On February 1, 1994,
Paramount's legal advisor notified QVC that the minimum condition of the Second
Viacom-Blockbuster Offer had not been satisfied and that Viacom was extending
the expiration date of its offer to February 14, 1994.
On February 1, 1994, QVC issued a press release in which it announced that
it had extended the Expiration Date to 12:00 midnight, New York City time, on
Monday, February 14, 1994. As of 12:00 midnight, New York City time, on January
31, 1994, approximately 19,037,288 Shares had been tendered in the Offer. A copy
of the press release is attached to the Schedule 14D-1, and the foregoing
description is qualified in its entirety by reference to such exhibit.
QVC Revised Offer and Second-Step Merger. QVC has amended its proposal to
acquire Paramount by increasing the Offer Price for approximately 50.1% of the
Shares outstanding from $92 per Share to $104 per Share (and associated Right),
to be followed by the QVC Second-Step Merger of Paramount with QVC or its
subsidiary, pursuant to the terms of a merger agreement, in which each then
outstanding Share (other than Shares held in the treasury of Paramount, Shares
owned by QVC or any wholly owned subsidiary of QVC or Paramount and Dissenting
Shares) would be converted into the right to receive 1.2361 shares of QVC Common
Stock, .2386 shares of QVC Merger Preferred Stock and .32 Warrants. The terms of
the QVC Merger Preferred Stock, the Exchange Debentures issuable in exchange for
the QVC Merger Preferred Stock and the Warrants are those described in Section 3
of the Second Supplement. See Section 3 of the Second Supplement. On February 1,
1994, QVC issued a press release describing the terms of the Offer and the QVC
Second-Step Merger Consideration, a copy of which has been filed as an exhibit
to the Schedule 14D-1.
The QVC Exemption Agreement provides, among other things, that, in the
event that (1) Paramount's Board of Directors intends to recommend to the
stockholders of Paramount the acceptance of the Offer or (2) such number of
Shares that would satisfy the Minimum Condition shall have been validly tendered
and not withdrawn in the Offer at the Expiration Date and, as of such Expiration
Date, QVC has waived all conditions to the Offer (other than the Minimum
Condition, the Rights Condition, the Supermajority Condition, the Section 203
Condition and the Injunction Condition), then QVC shall promptly execute and
deliver to the Company the Proposed QVC Merger Agreement (with representations
and warranties dated as of the date of execution of such Proposed QVC Merger
Agreement, unless otherwise specified therein, and with such other changes as
may be necessary to reflect the terms of the Offer as it then exists, changes in
the
4
<PAGE> 6
consideration offered under the executed Proposed QVC Merger Agreement and
changes related thereto) and Paramount will execute the Proposed QVC Merger
Agreement (with representations and warranties dated as of the date of execution
of such Proposed QVC Merger Agreement, unless otherwise specified therein)
within one business day of receipt thereof.
Under the terms of the QVC Exemption Agreement, Paramount has agreed,
subject to certain exceptions, that upon delivery by QVC of a Completion
Certificate (as defined in the QVC Exemption Agreement), it will take all
necessary action to amend the Rights Agreement to make it inapplicable to the
Offer and to take all appropriate action so that the restrictions on business
combinations in (i) Article XI of Paramount's Certificate of Incorporation and
(ii) Section 203 of Delaware Law will not apply to the consummation of the
Offer.
The Proposed QVC Merger Agreement provides, among other things, that as
soon as practicable after the purchase of Shares pursuant to the Offer, the
approval of the QVC Second-Step Merger by the stockholders of QVC and Paramount
and the satisfaction of the other conditions set forth in the Proposed QVC
Merger Agreement, Paramount will be merged with and into QVC or a subsidiary
thereof in accordance with the relevant provisions of Delaware Law. In such
event, following consummation of the QVC Second-Step Merger, QVC will continue
as the surviving corporation (the "Surviving Corporation").
Alternatively, if counsel to QVC is unable to deliver an opinion, in form
and substance reasonably satisfactory to QVC, that the QVC Second-Step Merger
will qualify as a reorganization under section 368(a) of the Internal Revenue
Code of 1986, as amended, QVC may elect to cause the QVC Second-Step Merger to
be effected by causing a subsidiary of QVC to merge with and into Paramount. In
such event, the separate corporate existence of such subsidiary will cease, and
Paramount will continue as the Surviving Corporation as a wholly owned
subsidiary of QVC.
Based on the terms of the Offer and the Proposed QVC Merger Agreement, it
is anticipated that Wachtell, Lipton, Rosen & Katz, special counsel to QVC, will
be unable to deliver the opinion referred to in the immediately preceding
paragraph. As a result, exchanges of Shares pursuant to the Offer and the QVC
Second-Step Merger will be taxable transactions to stockholders of the Company
for Federal income tax purposes. See Section 5 of this Third Supplement.
QVC intends to provide in the executed Proposed QVC Merger Agreement that
at the Effective Time, in the event the Offer has already been consummated, each
Share that is issued and outstanding immediately prior to the Effective Time
(other than Shares held in the treasury of Paramount, Shares owned by QVC or any
wholly owned subsidiary of QVC or Paramount and Dissenting Shares) will be
converted into the right to receive the QVC Second-Step Merger Consideration.
Based on the proposed terms of the QVC Second-Step Merger, appraisal rights
will be available to stockholders who have not voted in favor of the QVC
Second-Step Merger or consented thereto in writing and who have properly
demanded in writing appraisal of the Shares held by such stockholders in
accordance with Delaware Law and who have not withdrawn such demand or otherwise
forfeited appraisal rights.
The terms of the QVC Exemption Agreement are more fully described in
Section 4 of the Second Supplement and the Proposed QVC Merger Agreement is
substantially the same as the QVC Merger Agreement which is described in the
Second Supplement. The foregoing summary description is qualified in its
entirety by reference to the QVC Exemption Agreement and the Proposed QVC Merger
Agreement, each of which has been filed as an exhibit to the Schedule 14D-1 and
is incorporated herein by reference.
4. SOURCE AND AMOUNT OF FUNDS. The discussion set forth in Section 12 of
the Offer to Purchase, Section 7 of the First Supplement and Section 5 of the
Second Supplement is hereby amended and supplemented as follows:
As a result of the increase in the Offer Price, QVC estimates that
approximately $6.4 billion will be required to acquire the Minimum Number of
Shares pursuant to the Offer. The necessary funds are expected to be provided
from the following sources: (i) $3.5 billion to be obtained from commitments to
purchase from
5
<PAGE> 7
QVC newly issued shares of QVC Common Stock and QVC Preferred Stock and (ii) up
to $3.25 billion in bank financing.
In connection with the Offer, QVC has entered into an amendment to the Bank
Credit Agreement. The terms and conditions of the Bank Credit Agreement, as
amended (the "Amended Bank Credit Agreement"), are, except as summarized below,
substantially similar to the terms and conditions of the Bank Credit Agreement
previously described in the Schedule 14D-1 and filed as Exhibit (b)(3) thereto.
Under the Amended Bank Credit Agreement, each Co-Arranger has increased its
commitment to approximately $541,666,666. In aggregate, the maximum amount of
the Permanent Facilities has been increased $250 million to $3.25 billion by
increasing the Term Loan Facility to $2.25 billion. In addition, the maximum
amount of the Tender Offer Facilities has also been increased to $3.25 billion.
The quarterly amortization schedule remains unchanged except that the final
payment on the Term Loans, due December 31, 2000, has been increased to $400
million.
The Amended Bank Credit Agreement requires QVC to apply the proceeds of all
permitted debt issuances and, with certain specified exceptions, permitted
equity issuances towards mandatory prepayments of principal in the inverse order
of maturity until $750 million of the Term Loans shall have been prepaid through
the use of proceeds from asset sales and permitted issuances of debt or equity,
and thereafter, 75% of the additional proceeds from permitted issuances of debt
and equity will be so applied (or will be applied to permanent reductions of
commitments under the Revolving Facilities if the Term Loans have been repaid in
full).
The Amended Bank Credit Agreement provides that the maximum consolidated
leverage ratio will be 6.0:1, reducing to 4.5:1 on and after July 31, 1996.
The definitions of Applicable Base Rate Margin and Applicable Eurodollar
Margin have been amended to be 1.25% and 2.25%, respectively, on the Term Loans
and Revolving Loans prior to the earlier of BellSouth's investment being
converted in full into QVC Common Stock and QVC Preferred Stock or the date the
contemplated loan from BellSouth is repaid in full from a permitted issuance of
equity undertaken for that purpose.
As contemplated in the Amended Bank Credit Agreement, the increased Tender
Offer Loan proceeds may be used to raise the cash portion of the Offer to the
extent there is a corresponding reduction in the amount of QVC Merger Preferred
Stock being offered in connection therewith. The Amended Bank Credit Agreement
permits QVC to further increase the cash portion of the Offer to the extent such
increase comes from additional investments by Cox, Advance, Comcast and
BellSouth (the "Equity Investors"). In addition, under certain circumstances,
other changes would be permitted to the Offer and the QVC Second-Step Merger.
The text of the amendment to the Bank Credit Agreement has been filed as Exhibit
(b)(4) to the Schedule 14D-1, which is incorporated herein by reference, and the
foregoing summary description is qualified in its entirety by reference to such
exhibit.
QVC and the Equity Investors have agreed to enter into definitive
documentation (the "Definitive Equity Agreements") with respect to the
previously described proposed investments by the Equity Investors in QVC. The
previously described proposed investments remain substantially the same except
that: (i) the price per share of QVC Common Stock to be purchased by each of the
Equity Investors has been reduced to $52 per share; (ii) the conversion price of
the QVC Preferred Stock to be purchased by the Equity Investors and the
valuation price of the QVC Common Stock for purposes of determining the Equity
Investors' rights to elect directors, have been reduced to $55 per share; and
(iii) BellSouth has agreed to purchase an additional $500 million of QVC Common
Stock at $42 per share, on the same terms previously described (other than with
respect to price per share). As a result, Comcast, Advance and Cox will each
acquire 4,807,692 shares of QVC Common Stock and 250,000 shares of QVC Preferred
Stock for an aggregate purchase price of $500 million, and BellSouth will
acquire 31,135,531 shares of QVC Common Stock and 500,000 shares of QVC
Preferred Stock for an aggregate purchase price of $2 billion. On February 1,
1994, QVC and the Equity Investors entered into a letter agreement (the "Equity
Investors Letter") containing the revised terms of the Equity Investors'
commitments and the Offer. The text of the Equity Investors Letter has been
filed as Exhibit (c)(31) to the Schedule 14D-1, which is incorporated herein by
reference, and the foregoing summary description is qualified in its entirety by
reference to such exhibit.
6
<PAGE> 8
It is contemplated that the obligation of QVC and each of the Equity
Investors to consummate the proposed equity investments will be subject to
certain conditions, including (i) the parties having performed and complied in
all material respects with all of their agreements, obligations and conditions
under the Definitive Equity Agreements, (ii) the accuracy in all material
respects of the representations and warranties made by the parties in the
Definitive Equity Agreements, (iii) the absence of any orders enjoining or
restraining the transactions contemplated by the Definitive Equity Agreements,
or certain related agreements, or certain other pending or threatened actions,
proceedings, orders, decrees or injunctions inconsistent with the transactions
contemplated by such agreements, (iv) QVC having accepted for payment 50.1% of
the Shares outstanding pursuant to the Offer, (v) the availability of sufficient
funds to consummate the Offer and the QVC Second-Step Merger, (vi) the absence
of any defaults or events of default under the Amended Bank Credit Agreement,
(vii) certain additional conditions specific to BellSouth's investment and
(viii) certain other customary conditions.
It is contemplated that pursuant to the Definitive Equity Agreements, prior
to certain necessary stockholder and/or regulatory approvals, Comcast, Advance
and Cox may acquire non-voting stock in lieu of their contemplated investments.
As previously described in the Offer, until the satisfaction of certain
regulatory and other requirements, the funds otherwise to be provided by
BellSouth's purchase of QVC Common Stock and QVC Preferred Stock will be
provided through the contribution by a subsidiary of BellSouth of $2 billion to
a partnership formed with a subsidiary of QVC for the purpose of making a loan
to QVC in the amount of the BellSouth subsidiary's contribution.
5. CERTAIN TAX CONSEQUENCES. The discussion set forth in Section 5 of the
Offer to Purchase, Section 2 of the First Supplement and Section 6 of the Second
Supplement is hereby amended and supplemented as follows:
As discussed in this Third Supplement, it is anticipated that exchanges of
Shares pursuant to the Offer or the QVC Second-Step Merger will be taxable
transactions for Federal income tax purposes. A Paramount stockholder who holds
Shares as a capital asset and who exchanges Shares for cash in the Offer or for
QVC Common Stock, QVC Merger Preferred Stock and Warrants in the QVC Second-Step
Merger will recognize capital gain or loss for Federal income tax purposes equal
to the difference between the fair market value of the cash, QVC Common Stock,
QVC Merger Preferred Stock and Warrants received and such Paramount
stockholder's tax basis in the Shares exchanged therefor. A Paramount
stockholder who exchanges Shares in the QVC Second-Step Merger will include the
fair market value of the Warrants received, in addition to the fair market value
of the QVC Common Stock and the QVC Merger Preferred Stock received, in the
amount realized by such stockholder for purposes of computing the amount of
capital gain or loss recognized by such stockholder. Such stockholder will have
a tax basis in the QVC Common Stock, QVC Merger Preferred Stock and Warrants
received equal to their fair market value. The holding period for the QVC Common
Stock, QVC Merger Preferred Stock and Warrants will commence on the day after
the QVC Second-Step Merger.
6. PRICE RANGE OF SHARES; DIVIDENDS. The discussion set forth in Section
6 of the Offer to Purchase, Section 3 of the First Supplement and Section 7 of
the Second Supplement is hereby supplemented as follows:
According to publicly available sources, Paramount paid a cash dividend of
$.20 per Share on January 14, 1994. The high and low sales prices per Share on
the NYSE as reported by the Dow Jones News Service for the current quarter
through January 31, 1994, were $83 1/2 and $73 1/2, respectively. On January 31,
1994, the closing price per Share reported on the NYSE was $79 5/8. On January
31, 1994, the closing price per share of QVC Common Stock reported on the NASDAQ
was $44. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE
SHARES AND FOR QVC COMMON STOCK.
7. MISCELLANEOUS. QVC, Comcast and BellSouth, as applicable, have filed
with the Commission amendments to the Schedule 14D-1 pursuant to Rule 14d-3 of
the General Rules and Regulations under the Exchange Act furnishing certain
additional information with respect to the Offer, and may file further
amendments thereto. The Tender Offer Statement on Schedule 14D-1 and any and all
amendments thereto, including exhibits, may be examined and copies may be
obtained from the Commission in the same manner as
7
<PAGE> 9
described in Section 8 of the Offer to Purchase with respect to information
concerning Paramount (except that the amendments will not be available at the
regional offices of the Commission).
This document is issued by QVC, Comcast and BellSouth and has been approved
by Botts & Company Limited, a Member of FIMBRA, for the purposes of Section 57
of the UK Financial Services Act 1986.
Except as modified by this Third Supplement, the terms set forth in the
Offer to Purchase, the First Supplement, the Second Supplement, the amendments
thereto and the related Letters of Transmittal remain applicable in all respects
to the Offer, and this Third Supplement should be read in conjunction with the
Offer to Purchase, the First Supplement, the Second Supplement, the amendments
thereto and all related Letters of Transmittal.
QVC NETWORK, INC.
February 1, 1994
8
<PAGE> 10
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and Rights and any other required documents should be sent or delivered by each
stockholder of Paramount or his broker, dealer, commercial bank, trust company
or other nominee to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
(212) 858-2103
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand or Overnight Delivery:
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station Attn: Reorganization New York, New York 10004
New York, New York 10274-0084 Operations Department Attn: Securities
Attn: Reorganization Transfer Window,
Operations Department Confirm Facsimile Subcellar One
by Telephone:
(212) 858-2103
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of this Third Supplement, the Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at QVC's
expense. You may also contact your broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
<TABLE>
<S> <C>
77 Water Street 37 Sun Street
New York, New York 10005 London, England EC2M 2PY
(212) 269-5550 (Collect) 44 71 247 8263 (Collect)
(800) 669-5550 (Toll-Free)
</TABLE>
The Dealer Manager for the Offer is:
[LOGO]
711 Fifth Avenue
New York, New York 10022
(212) 339-2470
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
PARAMOUNT COMMUNICATIONS INC.
PURSUANT TO THE OFFER TO PURCHASE DATED OCTOBER 27, 1993,
THE SUPPLEMENT THERETO DATED NOVEMBER 12, 1993,
THE SECOND SUPPLEMENT THERETO DATED DECEMBER 23, 1993,
AND
THE THIRD SUPPLEMENT
THERETO DATED FEBRUARY 1, 1994
BY
QVC NETWORK, INC.
------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY,
FEBRUARY 14, 1994, UNLESS THE OFFER IS EXTENDED.
------------------------
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
(212) 858-2103
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand or Overnight Delivery:
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station Attn: Reorganization New York, New York 10004
New York, New York 10274-0084 Operations Department Attn: Securities Transfer
Attn: Reorganization Window, Subcellar One
Operations Department Confirm Facsimile
by Telephone:
(212) 858-2103
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This third revised Letter of Transmittal or the previously circulated
original (pink), revised (blue) or second revised (blue) Letter of Transmittal
is to be completed by stockholders either if certificates for Shares and/or
Rights (each as defined below) are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is utilized, if tenders of
Shares and/or Rights are to be made by book-entry transfer to an account
maintained by IBJ Schroder Bank & Trust Company (the "Depositary") at The
Depository Trust Company ("DTC"), Midwest Securities Trust Company ("MSTC") or
Philadelphia Depository Trust Company ("PDTC") (each a "Book-Entry Transfer
Facility" and collectively referred to as the "Book-Entry Transfer Facilities"),
pursuant to the procedures set forth in Section 3 of the Offer to Purchase,
dated October 27, 1993 (the "Offer to Purchase"). Stockholders who tender Shares
or Rights by book-entry transfer are referred to herein as "Book-Entry
Stockholders." Holders of shares will be required to tender one Right for each
Share tendered in order to effect a valid tender of such Share. If the
Distribution Date (as defined in the Offer to Purchase) does not occur prior to
the Expiration Date (as defined in the Third Supplement to the Offer to Purchase
dated February 1, 1994), a tender of Shares will also constitute a tender of the
associated Rights. If the Distribution Date occurs and the certificates
representing Rights ("Rights Certificates") are distributed by Paramount to
holders of Shares prior to the time a holder's Shares are tendered pursuant to
the Offer, in order for Rights (and the corresponding Shares) to be validly
tendered, Rights Certificates representing a number of Rights equal to the
number of Shares tendered must be delivered to the Depositary or, if available,
a Book-Entry Confirmation (as defined in the Offer to Purchase) must be received
by the Depositary with respect thereto. If the Distribution Date occurs and
Rights Certificates are not distributed prior to the time Shares are tendered
pursuant to the Offer, Rights may be tendered prior to a stockholder receiving
Rights Certificates by use of the guaranteed delivery procedure described in
Section 3 of the Offer to Purchase. In any case, a tender of Shares constitutes
an agreement by the tendering stockholder to deliver Rights Certificates
representing a number of Rights equal to the number of Shares tendered pursuant
to the Offer to the Depositary within five business days after the date Rights
Certificates are distributed. QVC reserves the right to require that the
Depositary receive Rights Certificates, or a Book-Entry Confirmation, if
available, with respect to such Rights, prior to accepting the related Shares
for payment pursuant to the Offer if the Distribution Date occurs prior to the
Expiration Date.
Holders of Shares and Rights whose certificates for such Shares (the "Share
Certificates") or, if applicable, Rights Certificates, are not immediately
available (including, if the Distribution Date has occurred, because Rights
Certificates have not yet been distributed), or who cannot deliver their Share
Certificates or, if applicable, their Rights Certificates, and all other
required documents to the Depositary on or prior to the Expiration Date or who
cannot complete the procedures for book-entry transfer on a timely basis, must
tender their Shares and Rights according to the guaranteed delivery procedures
set forth in Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE BACK COVER AND BACK COVER.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
<PAGE> 2
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number: Transaction Code Number:
/ /CHECK HERE IF RIGHTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number: Transaction Code Number:
/ / CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
/ / CHECK HERE IF RIGHTS ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
Window Ticket Number (if any):
Date of Execution of Notice of Guaranteed Delivery:
Name of Institution which Guaranteed Delivery:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S) (PLEASE FILL IN, IF BLANK, SHARE CERTIFICATE(S) AND
EXACTLY AS NAME(S) APPEAR(S) ON SHARE(S) TENDERED
SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------------
SHARE TOTAL NUMBER OF
CERTIFICATE SHARES REPRESENTED BY NUMBER OF
NUMBER(S)* SHARE CERTIFICATE(S)* SHARES TENDERED**
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
TOTAL SHARES
- ------------------------------------------------------------------------------------------------------------------------------
* NEED NOT BE COMPLETED BY BOOK-ENTRY STOCKHOLDERS.
** UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL SHARES REPRESENTED BY CERTIFICATES DELIVERED TO THE DEPOSITARY ARE
BEING TENDERED. SEE INSTRUCTION 4.
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF RIGHTS TENDERED*
------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S) (PLEASE FILL IN, IF BLANK, RIGHTS CERTIFICATE(S) AND
EXACTLY AS NAME(S) APPEAR(S) ON RIGHTS TENDERED
RIGHTS CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
RIGHTS RIGHTS REPRESENTED BY
CERTIFICATE RIGHTS NUMBER OF
NUMBER(S)** CERTIFICATE(S)** RIGHTS TENDERED***
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
TOTAL RIGHTS
- ------------------------------------------------------------------------------------------------------------------------------
* IF THE TENDERED RIGHTS ARE REPRESENTED BY SEPARATE CERTIFICATES, COMPLETE THE CERTIFICATE NUMBERS OF SUCH RIGHTS CERTIFICATES.
STOCKHOLDERS TENDERING RIGHTS WHICH ARE NOT REPRESENTED BY SEPARATE CERTIFICATES SHOULD RETAIN A COPY OF THIS LETTER OF
TRANSMITTAL IN ORDER TO ACCURATELY COMPLETE A LETTER OF TRANSMITTAL IF RIGHTS CERTIFICATES ARE RECEIVED.
** NEED NOT BE COMPLETED BY BOOK-ENTRY STOCKHOLDERS.
*** UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL RIGHTS REPRESENTED BY CERTIFICATES DELIVERED TO THE DEPOSITARY ARE
BEING TENDERED. SEE INSTRUCTION 4.
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to QVC Network, Inc., a Delaware corporation
("QVC"), the above described shares of Common Stock, par value $1.00 per share
(the "Shares"), of Paramount Communications Inc., a Delaware corporation
("Paramount"), and the associated Common Stock Purchase Rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of September 7, 1988, between
Paramount and Chemical Bank, as Rights Agent, as amended (the "Rights
Agreement"), at a price of $104 per Share (and associated Right), net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated October 27, 1993 (the
"Offer to Purchase"), as amended and supplemented by the Supplement, dated
November 12, 1993 (the "First Supplement"), the Second Supplement, dated
December 23, 1993 (the "Second Supplement"), the Third Supplement thereto, dated
February 1, 1994 (the "Third Supplement" and, together with the First Supplement
and the Second Supplement, the "Supplements"), receipt of which is hereby
acknowledged, the amendments thereto and in this Letter of Transmittal (which,
together with the Offer to Purchase, the Supplements, the amendments thereto and
the related Letters of Transmittal, constitute the "Offer"). Unless the context
otherwise requires, all references to Shares shall include the Rights, and all
references to the Rights shall include all benefits that may inure to the
holders of Rights pursuant to the Rights Agreement. The undersigned understands
that QVC reserves the right to transfer or assign, in whole or from time to time
in part, to one or more of its subsidiaries or affiliates the right to purchase
all or any portion of the Shares and Rights tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares and Rights tendered herewith in accordance with the terms and subject
to the conditions of the Offer, the undersigned hereby sells, assigns, and
transfers to, or upon the order of, QVC all right, title and interest in and to
all of the Shares and Rights that are being tendered hereby and any and all
dividends on the Shares (other than regular quarterly cash dividends, not in
excess of $.20 per Share, having a customary and usual record date) or any
distribution (including, without limitation, the issuance of additional Shares
pursuant to a stock dividend or stock split, the issuance of other securities or
the issuance of rights (other than the separation of the Rights from the Shares)
for the purchase of any securities) with respect to the Shares or Rights (other
than the Redemption Price (as defined in the Offer to Purchase)) that is
declared or paid by Paramount on or after October 26, 1993 and is payable or
distributable to stockholders of record on a date prior to the transfer into the
name of QVC or its nominees or transferees on Paramount's stock transfer records
of the Shares and Rights purchased pursuant to the Offer (except that if the
Rights are redeemed by the Paramount Board of Directors, tendering stockholders
who are holders of record as of the applicable record date will be entitled to
receive and retain the Redemption Price) (a "Distribution"), and constitutes and
irrevocably appoints the Depositary the true and lawful agent, attorney-in-fact
and proxy of the undersigned to the full extent of the undersigned's rights with
respect to such Shares and Rights (and any Distributions) with full power of
substitution (such power of attorney and proxy being deemed to be an irrevocable
power coupled with an interest), to (a) deliver Share Certificates and Rights
Certificates (and any Distributions), or transfer ownership of such Shares or
Rights on the account books maintained by the Book-Entry Transfer Facilities,
together in either such case with all accompanying evidences of transfer and
authenticity, to or upon the order of QVC upon receipt by the Depositary, as the
undersigned's agent, of the purchase price, (b) present such Shares and Rights
(and any Distributions) for transfer on the books of Paramount and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares and Rights (and any Distributions), all in accordance with the terms of
the Offer.
The undersigned understands that if the Distribution Date (as defined in
the Offer to Purchase) has occurred and Rights Certificates have been
distributed to holders of Shares prior to the time Shares are tendered herewith,
in order for Rights (and the corresponding Shares) to be validly tendered,
Rights Certificates representing a number of Rights equal to the number of
Shares being tendered herewith must be delivered to the Depositary or, if
available, a Book-Entry Confirmation (as defined in Instruction 2) must be
received by the Depositary with respect thereto. If the Distribution Date has
occurred and Rights Certificates have not been distributed prior to the time
Shares and Rights are tendered herewith, the undersigned agrees to deliver
Rights Certificates representing a number of Rights equal to the number of
Shares tendered herewith to the Depositary within five business days after the
date such Rights Certificates are distributed. The undersigned understands that
QVC reserves the right to require that the Depositary receive Rights
Certificates, or a Book-Entry Confirmation, if available, with respect to such
Rights, prior to accepting Shares for payment, if the Distribution Date occurs
prior to the Expiration Date. In that event, payment for Shares tendered and
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of, among other things, such Rights Certificates.
<PAGE> 4
The undersigned hereby irrevocably appoints William F. Costello and Neal S.
Grabell, and each of them, the attorneys-in-fact and proxies of the undersigned,
each with full power of substitution, to vote in such manner as each such
attorney and proxy or his substitute shall, in his sole discretion, deem proper,
and otherwise act (including pursuant to written consent) with respect to all of
the Shares and Rights tendered hereby which have been accepted for payment by
QVC prior to the time of such vote or action (and any Distributions) which the
undersigned is entitled to vote at any meeting of stockholders (whether annual
or special and whether or not an adjourned meeting) of Paramount, or by written
consent in lieu of such meeting, or otherwise. This power of attorney and proxy
is coupled with an interest in Paramount and in the Shares and Rights and is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares and Rights by QVC in accordance with the
terms of the Offer. Such acceptance for payment shall revoke, without further
action, any other power of attorney or proxy granted by the undersigned at any
time with respect to such Shares and Rights (and any Distributions) and no
subsequent powers of attorney or proxies will be given (and if given will be
deemed not to be effective) with respect thereto by the undersigned. The
undersigned understands that QVC reserves the right to require that, in order
for Shares and Rights to be deemed validly tendered, immediately upon QVC's
acceptance for payment of such Shares and Rights, QVC is able to exercise full
voting rights with respect to such Shares, Rights and other securities,
including voting at any meeting of stockholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares and
Rights tendered hereby (and any Distributions) and that, when the same are
accepted for payment by QVC, QVC will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or QVC to be necessary or desirable to complete the
sale, assignment and transfer of the Shares and Rights tendered hereby (and any
Distributions). In addition, the undersigned shall promptly remit and transfer
to the Depositary for the account of QVC any and all other Distributions in
respect of the Shares and Rights tendered hereby, accompanied by appropriate
documentation of transfer and, pending such remittance or appropriate assurance
thereof, QVC shall be entitled to all rights and privileges as owner of any such
Distributions, and may withhold the entire purchase price or deduct from the
purchase price of Shares and Rights tendered hereby the amount or value thereof,
as determined by QVC in its sole discretion.
All authority herein conferred or herein agreed to be conferred shall not
be affected by, and shall survive, the death or incapacity of the undersigned
and any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, legal representatives, successors and assigns of the
undersigned. Except as stated in the Offer to Purchase, the First Supplement,
the Second Supplement and the Third Supplement, this tender is irrevocable.
The undersigned understands that tenders of Shares and Rights pursuant to
any one of the procedures described in Section 3 of the Offer to Purchase and in
the instructions hereto will constitute a binding agreement between the
undersigned and QVC upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates or Rights Certificates not tendered or accepted for payment in the
name(s) of the undersigned. Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail the check for the purchase price and/or
return any Share Certificates or Rights Certificates not tendered or accepted
for payment (and accompanying documents, as appropriate) to the undersigned at
the address shown below the undersigned's signature. In the event that both the
"Special Delivery Instructions" and the "Special Payment Instructions" are
completed, please issue the check for the purchase price and/or return any Share
Certificates or Rights Certificates not tendered or accepted for payment in the
name(s) of, and deliver said check and/or return certificates to, the person or
persons so indicated. Stockholders tendering Shares or Rights by book-entry
transfer may request that any Shares or Rights not accepted for payment be
returned by crediting such account maintained at such Book-Entry Transfer
Facility as such stockholder may designate by making an appropriate entry under
"Special Payment Instructions." The undersigned recognizes that QVC has no
obligation pursuant to the "Special Payment Instructions" to transfer any Shares
and Rights from the name of the registered holder thereof if QVC does not accept
for payment any of such Shares and Rights.
<PAGE> 5
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6, AND 7)
To be completed ONLY if Share Certificates and/or Rights Certificates not
tendered or not purchased and/or the check for the purchase price of Shares
and/or Rights purchased are to be issued in the name of someone other than the
undersigned, or if Shares and/or Rights tendered by book-entry transfer which
are not purchased are to be returned by credit to an account maintained at a
Book-Entry Transfer Facility other than that designated on the front cover.
Issue check and/or certificates to:
Name
- -----------------------------------------------------------------------------
(PLEASE PRINT)
Address
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
- -------------------------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 ON BACK COVER)
/ / Credit unpurchased Shares and/or Rights tendered by book-entry transfer to
the Book-Entry Transfer Facility account set forth below:
/ / DTC / / MSTC / / PDTC
- -------------------------------------------------------------------------------
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6, AND 7)
To be completed ONLY if Share Certificates and/or Rights Certificates not
tendered or not purchased and/or the check for the purchase price of Shares
and/or Rights purchased are to be sent to someone other than the undersigned, or
to the undersigned at an address other than that shown on the front cover.
Mail check and/or certificates to:
Name
- -------------------------------------------------------------------------------
(PLEASE PRINT)
Address
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
- -------------------------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
<PAGE> 6
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF OWNER(S)
DATED:
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
Share Certificate(s) or Rights Certificate(s) or on a security position listing
or by person(s) authorized to become the registered holder(s) by certificates
and documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, please provide the necessary
information. See Instruction 5.)
Name(s):
(PLEASE PRINT)
Capacity (Full Title):
Address:
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
Tax Identification or Social Security No.:
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
Name:
Name of Firm:
Address:
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
Dated:
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder (which term, for purposes of this document, shall include any
participant in a Book-Entry Transfer Facility whose name appears on a security
position listing as the owner of Shares or Rights) of the Shares and Rights
tendered herewith, unless such holder has completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the inside front cover hereof or (ii) if such Shares or Rights
are tendered for the account of a firm that is a bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing of
the Securities Transfer Agent's Medallion Program (an "Eligible Institution").
In all other cases, all signatures on this Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be used either if Share Certificates or Rights Certificates
are to be forwarded herewith or, unless an Agent's Message (as defined in the
Offer to Purchase) is utilized, if tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Share Certificates, or timely confirmation (a "Book-Entry
Confirmation") of a book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility, as well as a Letter of Transmittal
(or a facsimile hereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message in the case of a book-entry
delivery, and any other documents required by the Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth herein prior to the
Expiration Date and, unless and until QVC declares that the Rights Condition (as
defined in the Second Supplement) is satisfied, Rights Certificates, or
Book-Entry Confirmation of a transfer of Rights into the Depositary's account at
a Book-Entry Transfer Facility, if available (together with, if Rights are
forwarded separately from Shares, a properly completed and duly executed Letter
of Transmittal (or a facsimile hereof) with any required signature guarantee, or
an Agent's Message in the case of a book-entry delivery, and any other documents
required by the Letter of Transmittal), must be received by the Depositary at
one of its addresses set forth herein prior to the Expiration Date or, if later,
within five business days after the date such Rights Certificates are
distributed. Stockholders whose Share Certificates or Rights Certificates are
not immediately available (including, if the Distribution Date has occurred,
because Rights Certificates have not yet been distributed) or who cannot deliver
their Share Certificates or Rights Certificates and all other required documents
to the Depositary prior to the Expiration Date or who cannot complete the
procedures for delivery by book-entry transfer on a timely basis may tender
their Shares and Rights by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender
must be made by or through an Eligible Institution; (ii) a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in the form made
available by QVC, must be received by the Depositary on or prior to the
Expiration Date; and (iii) the Share Certificates or Rights Certificates (or a
Book-Entry Confirmation) representing all tendered Shares or Rights, in proper
form for transfer, together with a Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry delivery, an Agent's Message) and
any other documents required by the Letter of Transmittal, must be received by
the Depositary (a) in the case of Shares, within five New York Stock Exchange,
Inc. ("NYSE") trading days after the date of execution of such Notice of
Guaranteed Delivery or (b) in the case of Rights, within a period ending on the
later of (i) five NYSE trading days after the date of execution of such Notice
of Guaranteed Delivery or (ii) five business days after Rights Certificates are
distributed to stockholders by Paramount, all as provided in Section 3 of the
Offer to Purchase. If Share Certificates and Rights Certificates are forwarded
separately to the Depositary, a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) must accompany each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, RIGHTS CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE
RISK OF THE TENDERING STOCKHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares or Rights will be purchased. All tendering stockholders, by
execution of this Letter of Transmittal or facsimile hereof, waive any right to
receive any notice of the acceptance of their Shares and Rights for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and Rights and any other
required information should be listed on a separate schedule attached hereto and
separately signed on each page thereof in the same manner as this Letter of
Transmittal is signed.
4. PARTIAL TENDERS. (Not applicable to stockholders who tender by
book-entry transfer.) If fewer than all the Shares or Rights evidenced by any
certificate submitted are to be tendered, fill in the number of Shares or Rights
which are to be tendered in the box entitled "Number of Shares Tendered" or
"Number of Rights Tendered" as appropriate. In such case, new certificate(s) for
the remainder of the Shares or Rights that were evidenced by your old
certificate(s) will be sent to you, unless otherwise provided in the appropriate
box marked "Special Payment Instructions" and/or "Special Delivery Instructions"
on this Letter of Transmittal, as soon as practicable after the Expiration Date.
All Shares and Rights represented by certificates delivered to the Depositary
will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
and Rights tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the certificate(s) without alteration,
enlargement or any change whatsoever.
<PAGE> 8
If any of the Shares or Rights tendered hereby are owned of record by two
or more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares or Rights are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to QVC of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares or Rights listed and transmitted hereby, no endorsements of certificates
or separate stock powers are required unless payment is to be made to or
certificates for Shares or Rights not tendered or purchased are to be issued in
the name of a person other than the registered owner(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares or Rights listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner(s) appear(s) on the
certificates. Signatures on such certificates or stock powers must be guaranteed
by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, QVC
will pay or cause to be paid any stock transfer taxes with respect to the
transfer and sale of purchased Shares to it or its order pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or if certificates
for Shares not tendered or purchased are to be registered in the name of, any
person other than the registered holder, or if tendered certificates are
registered in the name of any person other than the person(s) signing this
Letter of Transmittal, the amount of any stock transfer taxes (whether imposed
on the registered holder or such person) payable on account of the transfer to
such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes or exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of and/or certificates for unpurchased Shares or Rights are to be
returned to a person other than the signer of this Letter of Transmittal or if a
check is to be sent and/or such certificates are to be returned to someone other
than the signer of this Letter of Transmittal or to an address other than that
shown on the front cover hereof, the appropriate boxes on this Letter of
Transmittal should be completed. Stockholders tendering Shares or Rights by
book-entry transfer may request that Shares or Rights not purchased be credited
to such account maintained at such Book-Entry Transfer Facility as such
stockholder may designate hereon. If no such instructions are given, such Shares
or Rights not purchased will be returned by crediting the account at the
Book-Entry Transfer Facility designated above. See Instruction 1.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at its addresses set forth below.
Requests for additional copies of the Offer to Purchase, the First Supplement,
the Second Supplement, the Third Supplement and this Letter of Transmittal may
be directed to the Information Agent or to brokers, dealers, commercial banks or
trust companies.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to a $50 penalty. In addition, payments that are made
to such stockholder or other payee with respect to Shares or Rights purchased
pursuant to the Offer may be subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any such payments made to the stockholder or other payee. Backup withholding
is not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or Rights or of the last transferee appearing on the transfers attached
to, or endorsed on, the Shares or Rights. If the Shares or Rights are in more
than one name or are not in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.
<PAGE> 9
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares or Rights has been lost, destroyed or stolen, the
stockholder should promptly notify the Depositary. The stockholder will then be
instructed as to the steps that must be taken in order to replace the
certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates have
been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN
AGENT'S MESSAGE TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON
OR PRIOR TO THE EXPIRATION DATE.
<PAGE> 10
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
- --------------------------------------------------------------------------------
PAYOR'S NAME: IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
PART 1 -- PLEASE PROVIDE YOUR TIN IN THE SOCIAL SECURITY NUMBER OR
BOX AT RIGHT AND CERTIFY BY SIGNING AND EMPLOYER ID NUMBER
DATING BELOW. ------------------------------
---------------------------------------------------------------------------------
PART 2 -- CERTIFICATES -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
SUBSTITUTE (or
FORM W-9 I am waiting for a number to be issued to me) and
DEPARTMENT OF THE TREASURY (2) I am not subject to backup withholding because: (a) I am exempt from backup
INTERNAL REVENUE SERVICE
withholding, or (b) I have not been notified by the Internal Revenue Service
(the "IRS") that I am subject to backup withholding as a result of a failure
to report all interest or dividends, or (c) the IRS has notified me that I
am no longer subject to backup withholding.
PAYOR'S REQUEST FOR TAXPAYER CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
IDENTIFICATION NUMBER ("TIN") notified by the IRS that you are currently subject to backup withholding because
of underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out such item (2).
---------------------------------------------------------------------------------
PART 3
SIGNATURE DATE AWAITING TIN / /
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of payment, 31% of all
reportable payments made to me will be withheld, but that such amounts will be
refunded to me if I then provide a Taxpayer Identification Number within sixty
(60) days.
Signature Date
<PAGE> 11
FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY
EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR SHARES
AND RIGHTS AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH
STOCKHOLDER OF PARAMOUNT OR HIS BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY
OR OTHER NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH BELOW:
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
(212) 858-2103
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand or Overnight Delivery:
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station Attn: Reorganization New York, New York 10004
New York, New York 10274-0084 Operations Department Attn: Securities Transfer
Attn: Reorganization Window, Subcellar One
Operations Department Confirm Facsimile by Telephone:
(212) 858-2103
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, the First Supplement,
the Second Supplement, the Third Supplement, this Letter of Transmittal and
other tender offer materials may be obtained from the Information Agent as set
forth below, and will be furnished promptly at QVC's expense. You may also
contact your broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
<TABLE>
<S> <C>
77 Water Street 37 Sun Street
New York, New York 10005 London, England EC2M 2PY
(212) 269-5550 (Collect) 44 71 247 8263 (Collect)
(800) 669-5550 (Toll-Free)
</TABLE>
The Dealer Manager for the Offer is:
[LOGO]
711 Fifth Avenue
New York, New York 10022
(212) 339-2470
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
PARAMOUNT COMMUNICATIONS INC.
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates representing
shares of Common Stock, par value $1.00 per share (the "Shares"), of Paramount
Communications Inc., a Delaware corporation ("Paramount"), or, if applicable,
certificates for the associated Common Stock Purchase Rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of September 7, 1988, between
Paramount and Chemical Bank, as Rights Agent, as amended (the "Rights
Agreement"), are not immediately available (including, if a Distribution Date
(as defined in the Offer to Purchase (as defined below)) has occurred, because
certificates for Rights have not yet been distributed by Paramount) or time will
not permit all required documents to reach IBJ Schroder Bank & Trust Company
(the "Depositary") on or prior to the Expiration Date (as defined in the Third
Supplement (as defined below)), or the procedures for delivery by book-entry
transfer cannot be completed on a timely basis. This Notice of Guaranteed
Delivery may be delivered by hand or sent by facsimile transmission or mail to
the Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
(212) 858-2103
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand or Overnight Delivery:
P.O. Box 84 (212) 858-2611 One State Street
Bowling Green Station Attn: Reorganization New York, New York 10004
New York, New York 10274-0084 Operations Department Attn: Securities Transfer
Attn: Reorganization Window, Subcellar One
Operations Department Confirm Facsimile by Telephone:
(212) 858-2103
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO
A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
LADIES AND GENTLEMEN:
The undersigned hereby tenders to QVC Network, Inc., a Delaware corporation,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated October 27, 1993 (the "Offer to Purchase"), as amended and supplemented by
the Supplement thereto, dated November 12, 1993, the Second Supplement thereto,
dated December 23, 1993, and the Third Supplement thereto, dated February 1,
1994 (the "Third Supplement"), and in the related Letters of Transmittal,
receipt of each of which is hereby acknowledged, and the amendments to the
foregoing (which together constitute the "Offer"), the number of Shares and
Rights indicated below pursuant to the guaranteed delivery procedures set forth
in Section 3 of the Offer to Purchase.
Number of Shares:
Number of Rights:
Certificate No(s). (if available):
If Share(s) or Right(s) will be tendered by book-entry transfer, check one box.
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number:
Date:
Name(s) of Record Holder(s):
Address(es):
Area Code and Telephone Number(s):
Signature(s):
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
<PAGE> 2
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of the
Securities Transfer Agent's Medallion Program, hereby (a) represents that the
tender of Shares and/or Rights effected hereby complies with Rule 14e-4 under
the Securities Exchange Act of 1934, as amended, and (b) guarantees to deliver
to the Depositary, at one of its addresses set forth above, the certificates
representing all tendered Shares and/or Rights, in proper form for transfer, or
a Book-Entry Confirmation (as defined in the Offer to Purchase), together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in the case of a book-entry delivery, and any
other documents required by the Letter of Transmittal within (a) in the case of
Shares, five New York Stock Exchange, Inc. ("NYSE") trading days after the date
of execution of this Notice of Guaranteed Delivery, or (b) in the case of
Rights, a period ending on the later of (i) five NYSE trading days after the
date of execution of this Notice of Guaranteed Delivery and (ii) five business
days after the date certificates for Rights are distributed to holders of Shares
by the Rights Agent.
<TABLE>
<S> <C>
Name of Firm:
------------------------------ --------------------------------
(AUTHORIZED SIGNATURE)
Address: Title:
----------------------------------- --------------------------
- -------------------------------------------- Name:
(ZIP CODE) ---------------------------
(PLEASE TYPE OR PRINT)
Area Code and
Telephone Number: Date:
-------------------------- --------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES OR RIGHTS WITH THIS NOTICE OF
GUARANTEED DELIVERY. CERTIFICATES FOR SHARES OR RIGHTS SHOULD BE SENT WITH YOUR
LETTER OF TRANSMITTAL.
<PAGE> 1
ALLEN & COMPANY INCORPORATED
711 FIFTH AVENUE
NEW YORK, NEW YORK 10022
(212) 832-8000
QVC NETWORK, INC.
HAS INCREASED THE PRICE OF
ITS OFFER TO PURCHASE FOR CASH
61,657,432 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
PARAMOUNT COMMUNICATIONS INC.
TO
$104 NET PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY,
FEBRUARY 14, 1994, UNLESS THE OFFER IS EXTENDED.
February 1, 1994
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by QVC Network, Inc., a Delaware corporation
("QVC"), to act as financial advisor and Dealer Manager in connection with QVC's
offer to purchase 61,657,432 shares of Common Stock, par value $1.00 per share
(the "Shares"), of Paramount Communications Inc., a Delaware corporation
("Paramount"), or such greater number of Shares as equals 50.1% of the Shares
outstanding plus the number of Shares issuable upon the exercise of the then
exercisable stock options, as of the expiration of the Offer, and the associated
Common Stock Purchase Rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of September 7, 1988, between Paramount and Chemical Bank,
as Rights Agent, as amended (the "Rights Agreement"), at a price of $104 per
Share (and associated Right), net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated October 27, 1993 (the "Offer to Purchase"), as amended and
supplemented by the Supplement thereto, dated November 12, 1993 (the "First
Supplement"), the Second Supplement thereto, dated December 23, 1993 (the
"Second Supplement") and the Third Supplement thereto, dated February 1, 1994
(the "Third Supplement" and, together with the First Supplement and the Second
Supplement, the "Supplements"), the amendments thereto and in the related
Letters of Transmittal (which, together with the Offer to Purchase, the
Supplements and the amendments thereto, constitute the "Offer"). Holders of
Shares will be required to tender one Right for each Share tendered in order to
effect a valid tender of such Share. If the Distribution Date (as defined in the
Offer to Purchase) does not occur prior to the Expiration Date (as defined in
the Third Supplement), a tender of Shares will constitute a tender of the
associated Rights. If the Distribution Date occurs and the certificates
representing Rights ("Rights Certificates") are distributed by Paramount to
holders of Shares prior to the time a holder's Shares are tendered pursuant to
the Offer, in order for Rights (and the corresponding Shares) to be validly
tendered, Rights Certificates representing a number of Rights equal to the
number of Shares tendered must be delivered to the Depositary (as defined below)
or, if available, a Book-Entry Confirmation (as defined in the Offer to
Purchase) must be received by the Depositary with respect thereto. If the
Distribution Date occurs and Rights Certificates are not distributed prior to
the time Shares are tendered pursuant to the Offer, Rights may be tendered prior
to a stockholder receiving Rights Certificates by use of the guaranteed delivery
procedure described in Section 3 of the Offer to Purchase. In any case, a tender
of Shares constitutes an agreement by the tendering stockholder to deliver
Rights Certificates representing a number of Rights equal to the number of
Shares tendered pursuant to the Offer to the Depositary within five business
days after the date Rights Certificates are distributed. QVC reserves the right
to require that the Depositary receive Rights Certificates, or a Book-Entry
Confirmation, if
<PAGE> 2
available, with respect to such Rights, prior to accepting the related Shares
for payment pursuant to the Offer, if the Distribution Date occurs prior to the
Expiration Date. Holders of Shares and Rights whose certificates for such Shares
(the "Share Certificates") or, if applicable, Rights Certificates, are not
immediately available (including, if the Distribution Date has occurred, because
Rights Certificates have not yet been distributed), or who cannot deliver their
Share Certificates or, if applicable, their Rights Certificates, and all other
required documents to the Depositary on or prior to the Expiration Date, or who
cannot complete the procedures for book-entry transfer on a timely basis, must
tender their Shares and Rights according to the guaranteed delivery procedures
set forth in Section 3 of the Offer to Purchase. Unless the context otherwise
requires, all references to Shares shall include the Rights, and all references
to the Rights shall include all benefits that may inure to holders of Rights
pursuant to the Rights Agreement.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares or, if applicable, Rights registered in your
name or in the name of your nominee.
The Offer is conditioned upon, among other things, at least 61,657,432
Shares, or such greater number of Shares as equals 50.1% of the Shares
outstanding plus the number of Shares issuable upon the exercise of the then
exercisable stock options, as of the expiration of the Offer, being validly
tendered and not withdrawn prior to the expiration of the Offer. The Offer is
also subject to other terms contained in the Offer to Purchase and the
Supplements. See the Introduction and Section 2 of the Third Supplement.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Third Supplement, dated February 1, 1994.
2. The third revised (blue) Letter of Transmittal to tender Shares and
Rights for your use and for the information of your clients. Facsimile
copies of the third revised (blue) Letter of Transmittal may be used to
tender Shares and Rights.
3. The third revised (blue) Notice of Guaranteed Delivery for Shares
and Rights to be used to accept the Offer if certificates for Shares or
Rights are not immediately available or if such certificates and all other
required documents cannot be delivered to IBJ Schroder Bank & Trust Company
(the "Depositary") by the Expiration Date or if the procedure for
book-entry transfer cannot be completed by the Expiration Date.
4. A printed revised form of the letter which may be sent to your
clients for whose accounts you hold Shares registered in your name or in
the name of your nominee, with space provided for obtaining such clients'
instructions with regard to the Offer.
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
6. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER, PRORATION PERIOD AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY,
FEBRUARY 14, 1994, UNLESS THE OFFER IS EXTENDED.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal and any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery of
Shares or Rights, and any other required documents should be sent to the
Depositary and either Share Certificates representing the tendered Shares (and,
if applicable, Rights Certificates representing the tendered Rights) should be
delivered to the Depositary, or such Shares (and, if applicable, tendered
Rights) should be tendered by book-entry transfer into the Depositary's account
maintained at one of the Book Entry Transfer Facilities (as described in the
Offer to Purchase), all in accordance with the instructions set forth in the
Letter of Transmittal, the Offer to Purchase and the Supplements.
<PAGE> 3
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or, if applicable, Rights Certificates, or
other required documents on or prior to the Expiration Date or to comply with
the book-entry transfer procedures on a timely basis, a tender may be effected
by following the guaranteed delivery procedures specified in Section 3 of the
Offer to Purchase.
QVC will not pay any commissions or fees to any broker, dealer or other
person (other than the Dealer Manager and the Information Agent, as described in
the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer.
QVC will, however, upon request, reimburse you for customary clerical and
mailing expenses incurred by you in forwarding any of the enclosed materials to
your clients. QVC will pay or cause to be paid any stock transfer taxes payable
on the transfer of Shares to it, except as otherwise provided in Instruction 6
of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed material may be obtained from, the
Dealer Manager or the Information Agent, at their respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
ALLEN & COMPANY INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF QVC, THE DEALER MANAGER, PARAMOUNT, THE
DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE> 1
QVC NETWORK, INC.
HAS INCREASED THE PRICE OF
ITS OFFER TO PURCHASE FOR CASH
61,657,432 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
PARAMOUNT COMMUNICATIONS INC.
TO
$104 NET PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY,
FEBRUARY 14, 1994, UNLESS THE OFFER IS EXTENDED.
February 1, 1994
To Our Clients:
Enclosed for your consideration are the Third Supplement, dated February 1,
1994 (the "Third Supplement"), to the Offer to Purchase, dated October 27, 1993
(the "Offer to Purchase"), as amended and supplemented by the Supplement, dated
November 12, 1993 (the "First Supplement"), the Second Supplement, dated
December 23, 1993 (the "Second Supplement" and, together with the Third
Supplement and the Second Supplement, the "Supplements") and the amendments
thereto, and the third revised (blue) Letter of Transmittal (which, together
with the Supplements, the Offer to Purchase, the amendments thereto and the
related Letters of Transmittal, constitute the "Offer") relating to the offer by
QVC Network, Inc., a Delaware corporation ("QVC"), to purchase 61,657,432 shares
of Common Stock, par value $1.00 per share (the "Shares"), of Paramount
Communications Inc., a Delaware corporation ("Paramount"), or such greater
number of Shares as equals 50.1% of the Shares outstanding plus the number of
Shares issuable upon the exercise of the then exercisable stock options, as of
the expiration of the Offer, and the associated Common Stock Purchase Rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of September 7,
1988, between Paramount and Chemical Bank, as Rights Agent, as amended (the
"Rights Agreement"), at a price of $104 per Share (and associated Right), net to
the seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, the Supplements, the amendments
thereto and the related Letters of Transmittal. Holders of Shares will be
required to tender one Right for each Share tendered in order to effect a valid
tender of such Share. If the Distribution Date (as defined in the Offer to
Purchase) does not occur prior to the Expiration Date (as defined in the Third
Supplement), a tender of Shares will constitute a tender of the associated
Rights. If the Distribution Date occurs and the certificates representing Rights
("Rights Certificates") are distributed by Paramount to holders of Shares prior
to the time a holder's Shares are tendered pursuant to the Offer, in order for
Rights (and the corresponding Shares) to be validly tendered, Rights
Certificates representing a number of Rights equal to the number of Shares
tendered must be delivered to the Depositary (as defined herein) or, if
available, a Book-Entry Confirmation (as defined in the Offer to Purchase) must
be received by the Depositary with respect thereto. If the Distribution Date
occurs and Rights Certificates are not distributed prior to the time Shares are
tendered pursuant to the Offer, Rights may be tendered prior to a stockholder
receiving Rights Certificates by use of the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase. In any case, a tender of Shares
constitutes an agreement by the tendering stockholder to deliver Rights
Certificates representing a number of Rights equal to the number of Shares
tendered pursuant to the Offer to the Depositary within five business days after
the date Rights Certificates are distributed. QVC reserves the right to require
that the Depositary receive Rights Certificates, or a Book-Entry Confirmation,
if available, with respect to such Rights, prior to accepting the related Shares
for payment pursuant to the Offer if the Distribution Date occurs prior to the
Expiration Date. Holders of Shares and Rights whose certificates for such Shares
(the "Share Certificates") or, if applicable, Rights Certificates, are not
immediately available (including, if the Distribution Date has occurred, because
Rights Certificates have not yet been distributed), or who cannot deliver their
Share Certificates or, if applicable, their Rights Certificates, and all other
required documents to the Depositary on or prior to the Expiration Date, or who
cannot complete the procedures for book-entry transfer on a timely basis, must
tender their Shares and Rights according to the guaranteed delivery procedures
set forth in Section 3 of the Offer to Purchase. Unless the context otherwise
requires, all references to Shares shall include the Rights, and all references
to the Rights shall include all benefits that may inure to holders of Rights
pursuant to the Rights Agreement.
<PAGE> 2
WE ARE THE HOLDER OF RECORD OF SHARES AND RIGHTS HELD BY US FOR YOUR
ACCOUNT. A TENDER OF SUCH SHARES AND RIGHTS CAN BE MADE ONLY BY US AS THE HOLDER
OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER
SHARES AND RIGHTS HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares and Rights held by us for your account
pursuant to the terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $104 per Share, including the associated Right,
net to you in cash without interest thereon, upon the terms and subject to
the conditions set forth in the Offer.
2. The Offer is being made for 61,657,432 Shares, or such greater
number of Shares as equals 50.1% of the Shares outstanding plus the number
of Shares issuable upon the exercise of the then exercisable stock options,
as of the expiration of the Offer.
3. The Offer is conditioned upon, among other things, at least
61,657,432 Shares, or such greater number of Shares as equals 50.1% of the
Shares outstanding plus the number of Shares issuable upon the exercise of
the then exercisable stock options, as of the expiration of the Offer,
being validly tendered and not withdrawn prior to the expiration of the
Offer. The Offer is also subject to other terms contained in the Offer to
Purchase, the First Supplement, the Second Supplement and the Third
Supplement. See the Introduction and Section 2 of the Third Supplement.
4. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, stock transfer taxes on the purchase of Shares or
Rights by QVC pursuant to the Offer.
5. The Offer, proration period and withdrawal rights will expire at
12:00 midnight, New York City time, on Monday, February 14, 1994, unless
the Offer is extended.
6. Payment for Shares purchased pursuant to the Offer will in all
cases be made only after timely receipt by IBJ Schroder Bank & Trust
Company (the "Depositary") of (a) Share Certificates and, if applicable,
Rights Certificates or timely confirmation of the book-entry transfer of
such Shares and, if applicable, Rights into the account maintained by the
Depositary at The Depository Trust Company, Midwest Securities Trust
Company or Philadelphia Depository Trust Company (collectively, the "Book-
Entry Transfer Facilities"), pursuant to the procedures set forth in
Section 3 of the Offer to Purchase, (b) a Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase), in connection with a book-entry delivery, and (c) any other
documents required by the Letter of Transmittal. Accordingly, payment may
not be made to all tendering stockholders at the same time depending upon
when certificates for or confirmations of book-entry transfer of such
Shares (or Rights, if available) into the Depositary's account at a
Book-Entry Transfer Facility are actually received by the Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth on the back page of this letter. If you
authorize the tender of your Shares and Rights, all such Shares and Rights will
be tendered unless otherwise specified on the next page of this letter. An
envelope to return your instructions to us is enclosed. Your authorization to
tender Shares shall be deemed authorization to tender the associated Rights
regardless of whether they separate from the Shares. Your instructions should be
forwarded to us in ample time to permit us to submit a tender on your behalf
prior to the expiration of the Offer.
<PAGE> 3
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares or Rights residing in any jurisdiction in which the
making of the Offer or the acceptance thereof would not be in compliance with
the securities, blue sky or other laws of such jurisdiction. However, QVC may,
in its discretion, take such action as it may deem necessary to make the Offer
in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction. QVC will apply to the securities regulatory authorities in Canada
for relief from various requirements of securities legislation and policies in
the Canadian provinces. If such relief is not granted in a province, the Offer
will be deemed not to have been made to holders of Shares in such province nor
will tenders be accepted from or on behalf of such holders.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of QVC by Allen & Company Incorporated, the Dealer Manager for the Offer,
or one or more registered brokers or dealers that are licensed under the laws of
such jurisdiction.
<PAGE> 4
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH 61,657,432 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
PARAMOUNT COMMUNICATIONS INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Third Supplement, dated February 1, 1994 (the "Third Supplement"), to the Offer
to Purchase, dated October 27, 1993 (the "Offer to Purchase"), as amended and
supplemented by the Supplement thereto, dated November 12, 1993, the Second
Supplement thereto, dated December 23, 1993, and the amendments thereto and the
third revised (blue) Letter of Transmittal (which documents, together with the
related Letters of Transmittal, constitute the "Offer") in connection with the
offer by QVC Network, Inc., a Delaware corporation ("QVC"), to purchase
61,657,432 shares of Common Stock, par value $1.00 per share (the "Shares"), of
Paramount Communications Inc., a Delaware corporation, or such greater number of
Shares as equals 50.1% of the Shares outstanding plus the number of Shares
issuable upon the exercise of the then exercisable stock options, as of the
expiration of the Offer, and the associated Common Stock Purchase Rights (the
"Rights").
This will instruct you to tender to QVC the number of Shares and Rights
indicated below (or, if no number is indicated below, all Shares and Rights)
which are held by you for the account of the undersigned, upon the terms and
subject to the conditions set forth in the Offer.
Number of Shares to Be Tendered*
- ------------------------------ Shares
Number of Rights to Be Tendered*
- ------------------------------ Rights
Date:
- ------------------------------
- ---------------
* Holders of Shares are required to tender one Right for each Share tendered in
order to effect a valid tender of such Share. If the Distribution Date (as
defined in the Offer to Purchase) occurs and certificates representing Rights
("Rights Certificates") have been distributed by Paramount to holders of
Shares prior to the time a holder's Shares are tendered pursuant to the Offer,
such holders will be required to validly tender Rights Certificates
representing a number of Rights equal to the number of Shares being tendered
in order to effect a valid tender of such Shares. If the Distribution Date
does not occur prior to the Expiration Date (as defined in the Third
Supplement), a tender of Shares will also constitute a tender of the
associated Rights and only the line with respect to "Number of Shares to Be
Tendered" should be filled in. See Section 3 of the Offer to Purchase. Unless
otherwise indicated, it will be assumed that all Shares and Rights held by us
for your account are to be tendered.
SIGN HERE
Signature(s)
(Print Name(s))
(Print Address(es))
(Area Code and Telephone Number(s))
(Taxpayer Identification or
Social Security Number(s))
<PAGE> 1
QVC NETWORK, INC.
HAS INCREASED THE PRICE OF
ITS OFFER TO PURCHASE FOR CASH
61,657,432 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
PARAMOUNT COMMUNICATIONS INC.
TO
$104 NET PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY,
FEBRUARY 14, 1994, UNLESS THE OFFER IS EXTENDED.
February 1, 1994
To Participants in the Dividend Reinvestment Plan of Paramount Communications
Inc.:
Enclosed for your consideration are the Third Supplement, dated February 1,
1994 (the "Third Supplement"), to the Offer to Purchase, dated October 27, 1993
(the "Offer to Purchase"), as amended and supplemented by the Second Supplement
thereto, dated December 23, 1993 (the "Second Supplement") and the Supplement
thereto, dated November 12, 1993 (the "First Supplement" and, together with the
Second Supplement and the Third Supplement, the "Supplements") and a third
revised (blue) Letter of Transmittal (which, together with the Offer to
Purchase, the Supplements, the amendments thereto and the related Letters of
Transmittal, constitute the "Offer"), relating to the offer by QVC Network,
Inc., a Delaware corporation ("QVC"), to purchase 61,657,432 shares of Common
Stock, par value $1.00 per share (the "Shares"), of Paramount Communications
Inc., a Delaware corporation ("Paramount"), or such greater number as equals
50.1% of the Shares outstanding plus the number of Shares issuable upon the
exercise of the then exercisable stock options, as of the expiration of the
Offer, and the associated Common Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of September 7, 1988, between
Paramount and Chemical Bank, as Rights Agent, as amended (the "Rights
Agreement"), at a price of $104 per Share (and associated Right), net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase, the Supplements, the amendments
thereto and the related Letters of Transmittal. Holders of Shares will be
required to tender one Right for each Share tendered in order to effect a valid
tender of such Share. If the Distribution Date (as defined in the Offer to
Purchase) does not occur prior to the Expiration Date (as defined in the Third
Supplement), a tender of Shares will constitute a tender of the associated
Rights. If the Distribution Date occurs and the certificates representing Rights
("Rights Certificates") are distributed by Paramount to holders of Shares prior
to the time a holder's Shares are tendered pursuant to the Offer, in order for
Rights (and the corresponding Shares) to be validly tendered, Rights
Certificates representing a number of Rights equal to the number of Shares
tendered must be delivered to the Depositary (as defined herein) or, if
available, a Book-Entry Confirmation (as defined in the Offer to Purchase) must
be received by the Depositary with respect thereto. If the Distribution Date
occurs and Rights Certificates are not distributed prior to the time Shares are
tendered pursuant to the Offer, Rights may be tendered prior to a stockholder
receiving Rights Certificates by use of the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase. In any case, a tender of Shares
constitutes an agreement by the tendering stockholder to deliver Rights
Certificates representing a number of Rights equal to the number of Shares
tendered pursuant to the Offer to the Depositary within five business days after
the date Rights Certificates are distributed. QVC reserves the right to require
that the Depositary receive Rights Certificates, or a Book-Entry Confirmation,
if available, with respect to such Rights, prior to accepting the related Shares
for payment pursuant to the Offer if the Distribution Date occurs prior to the
Expiration Date. Holders of Shares and Rights whose certificates for such Shares
(the "Share Certificates") or, if applicable, Rights Certificates, are not
immediately available (including, if the Distribution Date has occurred, because
Rights Certificates have not yet been distributed), or who cannot deliver their
Share Certificates or, if applicable, their Rights Certificates, and all other
required documents to the Depositary on or prior to the Expiration Date, or who
cannot complete the procedures for book-entry transfer on a timely basis, must
tender their Shares and Rights according to the guaranteed delivery procedures
set forth in Section 3 of the Offer to Purchase. Unless the context otherwise
requires, all references to Shares shall include the Rights, and all references
to the Rights shall include all benefits that may inure to holders of Rights
pursuant to the Rights Agreement.
<PAGE> 2
OUR NOMINEE IS THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT AS A
PARTICIPANT IN PARAMOUNT'S DIVIDEND REINVESTMENT PLAN (THE "PLAN"). A TENDER OF
SUCH SHARES (AND ASSOCIATED RIGHTS) CAN BE MADE ONLY BY US THROUGH OUR NOMINEE
AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY
YOU TO TENDER SHARES (AND ASSOCIATED RIGHTS) HELD IN YOUR PLAN ACCOUNT.
We request instructions as to whether you wish to have us instruct our
nominee to tender on your behalf any or all of the Shares (and associated
Rights) held in your Plan account, upon the terms and subject to the conditions
set forth in the Offer.
Please note the following:
1. The tender price is $104 per Share, including the associated Right,
net to you in cash, without interest thereon, upon the terms and subject to
the conditions set forth in the Offer.
2. The Offer is being made for 61,657,432 Shares, or such greater number
as equals 50.1% of the Shares outstanding plus the number of Shares issuable
upon the exercise of the then exercisable stock options, as of the
expiration of the Offer.
3. The Offer is conditioned upon, among other things, at least
61,657,432 Shares or, such greater number of Shares as equals 50.1% of the
Shares outstanding plus the number of Shares issuable upon the exercise of
the then exercisable stock options, as of the expiration of the Offer, being
validly tendered and not withdrawn prior to the expiration of the Offer. The
Offer is also subject to other terms contained in the Offer to Purchase, the
First Supplement, the Second Supplement and the Third Supplement. See
Section 1 of the Offer to Purchase and the Introduction and Section 2 of the
Third Supplement.
4. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter
of Transmittal, stock transfer taxes on the purchase of Shares or Rights by
QVC pursuant to the Offer.
5. The Offer, proration period and withdrawal rights will expire at
12:00 midnight, New York City time, on Monday, February 14, 1994, unless the
Offer is extended.
6. Payment for Shares purchased pursuant to the Offer will in all cases
be made only after timely receipt by IBJ Schroder Bank & Trust Company (the
"Depositary") of (a) Share Certificates and, if applicable, Rights
Certificates or timely confirmation of the book-entry transfer of such
Shares and, if applicable, Rights into the account maintained by the
Depositary at The Depository Trust Company, Midwest Securities Trust Company
or Philadelphia Depository Trust Company (collectively, the "Book-Entry
Transfer Facilities"), pursuant to the procedures set forth in Section 3 of
the Offer to Purchase, (b) a Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees
or an Agent's Message (as defined in the Offer to Purchase), in connection
with a book-entry delivery, and (c) any other documents required by the
Letter of Transmittal. Accordingly, payment may not be made to all tendering
stockholders at the same time depending upon when certificates for or
confirmations of book-entry transfer of such Shares (or Rights, if
available) into the Depositary's account at a Book-Entry Transfer Facility
are actually received by the Depositary.
If you wish to have us tender any or all of the Shares (and associated
Rights) held in your Plan account, please so instruct us by completing,
executing and returning to us the instruction form contained in this letter and
the Substitute Form W-9 by 5:00 p.m., New York City time, on Friday, February
11, 1994, unless the Offer is extended. If you authorize the tender of such
Shares (and associated Rights), all such Shares (and associated Rights) will be
tendered unless otherwise specified in your instructions. An envelope in which
to return your instructions to us is enclosed. Your authorization should be
forwarded to us in ample time to permit us to instruct our nominee to submit a
tender on your behalf prior to the expiration of the Offer.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares or Rights residing in any jurisdiction in which the
making of the Offer or the acceptance thereof would not be in compliance with
the securities, blue sky or other laws of such jurisdiction. However, QVC may,
in its discretion, take such action as it may deem necessary to make the Offer
in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction. QVC will apply to the securities regulatory authorities in Canada
for relief from various requirements of securities legislation and policies in
the Canadian provinces. If such relief is not granted in a province, the Offer
will be deemed not to have been made to holders of Shares in such province nor
will tenders be accepted from or on behalf of such holders.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of QVC by Allen & Company Incorporated, the Dealer Manager for the Offer,
or one or more registered brokers or dealers that are licensed under the laws of
such jurisdiction.
Very truly yours,
CHEMICAL BANK
Plan Administrator
<PAGE> 3
- --------------------------------------------------------------------------------
PAYOR'S NAME: CHEMICAL BANK
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT SOCIAL SECURITY NUMBER OR
RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. EMPLOYER ID NUMBER
------------------------------------------------------------------------------------------
SUBSTITUTE PART 2 -- CERTIFICATES -- Under penalties of perjury, I certify that:
FORM W-9 (1) The number shown on this form is my correct Taxpayer Identification Number (or I am
waiting for a number to be issued to me and I have checked the box in part 3 below) and
DEPARTMENT OF THE TREASURY (2) I am not subject to backup withholding because: (a) I am exempt from backup
INTERNAL REVENUE SERVICE withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS")
that I am subject to backup withholding as a result of a failure to report all interest
or dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding.
PAYOR'S REQUEST FOR TAXPAYER CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been
IDENTIFICATION NUMBER ("TIN") notified by the IRS that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received another
notification from the IRS that you are no longer subject to backup withholding, do not
cross out item (2).
------------------------------------------------------------------------------------------
SIGNATURE DATE PART 3
AWAITING TIN / /
<CAPTION>
</TABLE>
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
3 OF SUBSTITUTE FORM W-9.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Administration Office or (2) I
intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number by the time of
payment, 31% of all reportable payments made to me will be withheld, but
that such amounts will be refunded to me if I then provide a Taxpayer
Identification Number within sixty (60) days.
Signature Date
- --------------------------------------------------------------------------------
<PAGE> 4
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
61,657,432 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
OF
PARAMOUNT COMMUNICATIONS INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Third Supplement, dated February 1, 1994 (the "Third Supplement"), to the Offer
to Purchase, dated October 27, 1993 (the "Offer to Purchase"), as supplemented
and amended by the Supplement thereto, dated November 12, 1993, the Second
Supplement thereto, dated December 23, 1993, and the amendments thereto, and the
related third revised (blue) Letter of Transmittal (such documents, together
with any amendment thereto and the related Letters of Transmittal, constitute
the "Offer"), in connection with the offer by QVC Network, Inc., a Delaware
corporation ("QVC"), to purchase 61,657,432 shares of Common Stock, par value
$1.00 per share (the "Shares"), of Paramount Communications Inc., a Delaware
corporation ("Paramount"), or such greater number of Shares as equals 50.1% of
the Shares outstanding plus the number of Shares issuable upon the exercise of
the then exercisable stock options, as of the expiration of the Offer, and the
associated Common Stock Purchase Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of September 7, 1988, between Paramount and Chemical
Bank, as Rights Agent, as amended. The undersigned understand(s) that the Offer
applies to Shares allocated to the account of the undersigned in Paramount's
Dividend Reinvestment Plan (the "Plan").
This will instruct you as Dividend Reinvestment Agent, to instruct your
nominee to tender to QVC the number of Shares (and associated Rights) indicated
below (or, if no number is indicated below, all Shares and associated Rights)
that are held for the Plan account of the undersigned, upon the terms and
subject to the conditions set forth in the Offer.
<TABLE>
<CAPTION>
NUMBER OF SHARES
TO BE TENDERED: SIGN HERE
- ---------------------------------------------- ---------------------------------------------
<S> <C>
- ------------------------------ ---------------------------------------------
SHARES* ---------------------------------------------
</TABLE>
- ---------------
* Unless otherwise indicated, it will be assumed that all Shares in your Plan
account are to be tendered. Pursuant to the Offer, you are required to tender
one Right for each Share tendered. Therefore, a number of Rights equal to the
number of Shares tendered will be also tendered.
<TABLE>
<CAPTION>
SIGNATURE(S)
<S> <C>
Dated: , 199 ---------------------------------------------
---------------------------------------------
Please type or print name(s)
---------------------------------------------
---------------------------------------------
Please type or print address
---------------------------------------------
Area Code and Telephone Number
---------------------------------------------
Taxpayer Identification or
Social Security Number
</TABLE>
<PAGE> 1
For Immediate Release:
West Chester, PA (February 1, 1994) -- QVC (NASDAQ: QVCN) announced today that
it has increased the cash portion of its tender offer for 50.1 percent of the
outstanding Paramount shares to $104 per share in cash. This raises the amount
of cash being offered to Paramount shareholders by $750 million.
In addition, the consideration to be offered Paramount stockholders in the
proposed second-step merger of QVC and Paramount has been changed so that each
share of Paramount common stock then outstanding will be converted into the
right to receive 1.2361 shares of QVC common stock, .2386 shares of a new
series of cumulative non-convertible exchangeable preferred stock of QVC and
.32 warrants to purchase QVC common stock. The terms of the preferred stock and
the warrants are the same as those previously announced by QVC. This represents
a shift from QVC's previously announced offer, from the back end to the front
end by $500 million of QVC common stock and $250 million in the new series of
cumulative non-convertible exchangeable preferred.
BellSouth Corporation has agreed to purchase $500 million of QVC common stock
at $42 a share. Beyond increasing the cash portion of its offer, QVC has
reduced the pressure on its publicly traded common stock by reducing the
amount of publicly traded QVC stock in the back end of its offer by 13.6
percent.
As previously announced, QVC's tender offer has been extended to expire at
12:00 midnight, New York City time, on Monday, February 14, 1994.
# # #
Contacts
Press: Investors:
Michael Rourke of QVC William F. Costello of QVC
(212) 371-5999 (215) 430-8938
Donald Van de Mark of QVC Diana Brainerd of
(212) 371-5999 Abernathy/MacGregor/Scanlon
(212) 371-5999
<PAGE> 1
[CONFORMED COPY]
AMENDMENT ("this Amendment") dated as of February 1, 1994
among QVC NETWORK, INC. (the "Borrower") and the lending institutions party to
the Credit Agreement referred to below (the "Banks"). All capitalized terms
used herein and not otherwise defined herein shall have the respective meanings
provided such terms in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, the Borrower and the Banks have executed and
delivered a Credit Agreement dated as of January 7, 1994 (as in effect prior to
the effectiveness of this Amendment, the "Credit Agreement");
WHEREAS, the Borrower and the Banks wish to amend the Credit
Agreement as herein provided;
NOW, THEREFORE, it is agreed:
1. Schedule I to the Credit Agreement is hereby replaced
in its entirety by the Schedule I attached hereto as Annex A.
2. Section 3.02(A)(b) is hereby amended by changing the
figure "$150,000,000" opposite December 31, 2000 in the table contained in such
Section to read "$400,000,000".
3. Section 3.02(A)(g) is hereby amended by changing the
references to "Section 7.05 (f)(y) and "Section 7.05 (f)(x)" therein to read
"Section 7.05 (g)(y)" and "Section 7.05(g)(x)", respectively.
4. The phrase "Additional Net Equity Issuance Proceeds"
in Section 3.02 (A)(e) is hereby changed to read "Net Equity Issuance
Proceeds".
5. Section 4.01(g) is hereby amended by adding after
the phrase "the expiration date of the Tender Offer" the two places it appears
therein the phrase "or a Permitted Tender Offer Amendment".
<PAGE> 2
6. Section 4.01 (j) is hereby amended to change the
reference to "$1,500,000,000" therein to read "$2,000,000,000".
7. Section 7.03(f) is hereby amended by changing the
reference therein to "$1,500,000,000" to read "the aggregate cash contribution
made to Finance Co. by BellSouth on or prior to the Tender Offer Closing Date".
8. Section 7.09 is hereby amended in its entirety to
read:
"7.09 Consolidated Indebtedness to EBITDA. The Borrower
will not permit (A) the ratio of (i) Consolidated Indebtedness on the
last day of each of the first full three fiscal quarters commencing
after the Merger Borrowing Date, respectively to (ii) the Annualized
EBITDA ending on such respective dates to be greater than 6.0:1; (B)
the ratio of (i) Consolidated Indebtedness on the last day of any
fiscal quarter ending thereafter and prior to July 31, 1995 to (ii)
EBITDA for the period of four consecutive fiscal quarters (taken as
one accounting period) ending at the end of such fiscal quarter to be
greater than 6.0:1; (C) the ratio of (i) Consolidated Indebtedness on
the last day of any fiscal quarter ending on and after July 31, 1995
and prior to July 31, 1996 to (ii) EBITDA for the period of four
consecutive fiscal quarters (taken as one accounting period) ending at
the end of such fiscal quarter to be greater than 5.5:1; and (D) the
ratio of (i) Consolidated Indebtedness on the last day of any fiscal
quarter ending on and after July 31, 1996, to (ii) EBITDA for the
period of four consecutive fiscal quarters (taken as one accounting
period) ending at the end of such fiscal quarter to be greater than
4.5:1."
9. The definition of "Applicable Base Rate Margin"
contained in Section 9 is hereby amended by deleting the phrase "1% and (B)"
contained therein and replacing same with the following:
"1.25%; (B) with respect to Term Loans and Revolving Loans prior
to the Effective Equity Date, 1.25%; and (C) on and after the
Effective Equity Date".
10. The definition of "Applicable Eurodollar Margin"
contained in Section 9 is hereby amended by deleting the phrase "2% and (B)"
contained therein and replacing same with the following:
-2-
<PAGE> 3
"2.25%; (B) with respect to Term Loans and Revolving Loans prior to
the Effective Equity Date, 2.25%; and (C) on and after the Effective
Equity Date".
11. The definition of "BellSouth Conditions" contained
in Section 9 is hereby amended to read in its entirety:
"BellSouth Conditions" shall mean the conditions, as specified in
the Investment Agreement, that remain, as of the Tender Offer Closing
Date, to be satisfied before BellSouth is obligated pursuant to the
Investment Agreement to purchase Investor Voting Preferred and
Borrower Common Stock (allocated between same in a no greater than 1:2
ratio)."
12. The definition of "Investor Voting Preferred"
contained in Section 9 is hereby amended by deleting all of such definition
beginning with the phrase "and, to the extent issued" and replacing same with:
"and, to the extent issued, the shares of the Borrower's
Series E Convertible Exchangeable Preferred Stock issued to
BellSouth pursuant to the Investment Agreement upon
satisfaction of all remaining BellSouth Conditions, plus, in
any event, shares thereof representing payment in lieu of cash
dividends."
13. The definition of "Maximum Price Per Share" contained
in Section 9 is hereby amended by (i) changing the figure "$92" therein to read
"$105" and (ii) changing clause (x) therein in its entirety to read:
"(x) funded solely with the proceeds of (i) the sale of Investor
Preferred and/or Borrower Common Stock for cash proceeds in excess of
$1,500,000,000 and/or (ii) a capital contribution in excess of
$2,000,000,000 made by BellSouth in Finance Co.".
14. The definition of "Offer to Purchase" contained in
Section 9 is hereby amended to add after the reference to "December 31, 1993"
the phrase ", as amended by a Permitted Tender Offer Amendment,".
15. The definition of "Term Loan Reduction" contained in
Section 9 is hereby amended to change the figure "$500,000,000" contained
therein to read "$750,000,000".
-3-
<PAGE> 4
16. The definition of "Subordinated Finance Co. Note"
contained in Section 9 is hereby amended by deleting the phrase "of
$1,500,000,000" contained therein.
17. Section 9 is hereby amended by adding the following
definitions in appropriate alphabetical order:
"Effective Equity Date" shall mean the earlier of (i) the
BellSouth Equity Investment Date or (ii) the date on which the
Subordinated Finance Co. Note has been repaid in full from the
issuance of equity of the Borrower as contemplated by Section
3.02(A)(e)(v).
"Permitted Tender Offer Amendment" (i) shall include an amendment
to the Offer to Purchase as in effect on January 31, 1994 solely to
increase the cash price per share paid pursuant to the Tender Offer to
$105 funded through utilizing (I) the proceeds of the Tender Offer
Loans made available as a result of the effectiveness of the Amendment
dated as of February 1, 1994 to this Agreement, with a corresponding
reduction in the amount of the Merger Preferred to be issued upon the
Merger and (II) an increase in the BellSouth cash contribution to
Finance Co. to $2,000,000,000, with a corresponding reduction in the
Borrower Common Stock to be issued upon the Merger, (ii) may include
an amendment to such Offer to Purchase to (I) further increase the
aggregate cash purchase price per Share payable pursuant to the Tender
Offer to an amount equal to the Maximum Price Per Share as
contemplated in clause (x) of the definition of Maximum Price Per
Share, (II) provide for the issuance of contingent share price support
securities of the Borrower as to which the Borrower has no mandatory
cash payment obligations (whether by redemption, puts, etc.) , (III)
reduce the amount of Borrower Common Stock to be issued upon the
Merger and/or (IV) remove the Borrower's call rights in respect of the
Merger Warrants.
18. The reference to "BellSouth Equity Investment Date"
in Section 7.01(c)(x), 7.05(g) and in the definition of Conversion Date is
hereby changed to read "Effective Equity Date".
19. The reference to "61,607,894" in Section 4.01 (h)
and in the definition of Differential is hereby changed to read "61,657,432".
-4-
<PAGE> 5
20. The reference to "$3,000,000,000" in the definitions
of Total Tender Offer Commitment and Minimum Assignment Amount is hereby
changed to "$3,250,000,000".
21. Each of the Banks hereby agrees and consents to any
modification to the Investor Documents and/or Bell South Documents solely (i)
to give effect to an increased size of investment as contemplated by clause (x)
of the definition of Maximum Price Per Share, (ii) to reduce the per share
purchase price of the Borrower Common Stock to be acquired by the Specified
Equity Investors and BellSouth, (iii) to change the conversion price for the
Investor Preferred, (iv) to increase the dividend rate applicable to the
Investor Preferred to a percentage not in excess of 9% and/or (v) to permit any
Permitted Tender Offer Amendment. To the extent that, as a result of any
modification discussed in clause (i) of the preceding sentence, any of the
Specified Equity Investors and/or BellSouth is to increase its investment
(which increase will be no more heavily weighted in favor of Borrower
Preferred Stock than the original allocation), references to the size of the
investment by such Specified Equity Investor and/or BellSouth in the Credit
Agreement shall be correspondingly increased.
22. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document.
23. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which counterparts when executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument. A complete set
of counterparts shall be lodged with the Borrower and the Administrative Agent.
24. This Amendment and the rights and obligations of the
parties hereunder shall be construed in accordance with and governed by the law
of the State of New York.
25. This Amendment shall become effective on the date
when the Borrower and each of the Banks shall have signed a copy hereof
(whether the same or different copies) and shall have delivered (including by
way of facsimile transmission) the same to White & Case, 1155 Avenue of the
Americas, New York, New York 10036, Attention: Marvin J. Miller, Esq.
(Facsimile No.: (212) 354-8113).
-5-
<PAGE> 6
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
QVC NETWORK, INC.
By: /s/ William F. Costello
Title: Executive Vice President
and Chief Financial Officer
CHEMICAL BANK
By: /s/ James Ferguson
Title: Managing Director
THE BANK OF NOVA SCOTIA
By: /s/ Stephen Lockhart
Title: Vice President
BARCLAYS BANK PLC
By: /s/ Andrew Wynn
Title: Director
/s/ Craig Lewis
Title: Associate
LTCB TRUST COMPANY
By: /s/ Fumi Kamoshida
Title: Senior Vice President
NATIONSBANK OF TEXAS N.A.
By: /s/ Thomas F. Carter
Title: Senior Vice President
-6-
<PAGE> 7
TORONTO DOMINION
(TEXAS), INC.
By: /s/ C.A. Clause
Title: Vice President
-7-
<PAGE> 8
ANNEX A
SCHEDULE I
COMMITMENTS
<TABLE>
<CAPTION>
TENDER OFFER TERM LOAN REVOLVING LOAN
BANK TO PERCENTAGE COMMITMENT COMMITMENT COMMITMENT
<S> <C> <C> <C> <C>
Chemical Bank 16.66666667 $ 541,666,666.65 $ 375,000,000.00 $ 166,666,666.65
The Bank of
Nova Scotia 16.66666667 $ 541,666,666.67 $ 375,000,000.00 $ 166,666,666.67
Barclays Bank
PLC 16.66666667 $ 541,666,666.67 $ 375,000,000.00 $ 166,666,666.67
LTCB Trust
Company 16.66666667 $ 541,666,666.67 $ 375,000,000.00 $ 166,666,666.67
NationsBank
of Texas,
N.A. 16.66666667 $ 541,666,666.67 $ 375,000,000.00 $ 166,666,666.67
Toronto
Dominion
(Texas), Inc. 16.66666667 $ 541,666,666.67 $ 375,000,000.00 $ 166,666,666.67
----------- ----------------- ----------------- -----------------
Totals: 100% $3,250,000,000.00 $2,250,000,000.00 $1,000,000,000.00
</TABLE>
<PAGE> 1
QVC NETWORK, INC.
1365 ENTERPRISE DRIVE
GOSHEN CORPORATE PARK
WEST CHESTER, PA 19380
February 1, 1994
Gentlemen:
Reference is made to the Equity Commitment Letter, dated
November 11, 1993, by and among QVC Network, Inc. ("QVC"), Comcast
Corporation, Advance Publications, Inc. and Cox Enterprises, Inc.,
and to the BellSouth Commitment Letter, dated November 19, 1993, by and
between QVC and BellSouth Corporation, in connection with the proposed
acquisition of Paramount Communications Inc. ("Paramount"). The parties hereto
agree to the terms of the offer to purchase 50.1% of the common stock of
Paramount and the proposed second-step merger of QVC and Paramount, both as
described in the attached Term Sheet (the "Term Sheet"). The parties hereto
also agree to amend the commitment letters referred to above as described in
the Term Sheet.
Sincerely,
QVC NETWORK, INC.
By: /s/ Neal S. Grabell
-----------------------
Acknowledged and Agreed to:
ADVANCE PUBLICATIONS, INC.
By: /s/ Donald E. Newhouse
--------------------------
BELLSOUTH CORPORATION
By: /s/ Charles C. Miller, III
--------------------------
COMCAST CORPORATION
By: /s/ Stanley Wang
--------------------------
COX ENTERPRISES, INC.
By: /s/ James C. Kennedy
--------------------------
<PAGE> 2
TERM SHEET
TERMS TO OUTSIDE INVESTORS
COMMON STOCK: BellSouth to purchase additional $500 million
at $42 per share
All Investors reset previously committed
purchases of common stock to $52
CONVERTIBLE PREFERRED
SERIES E: Conversion price to be lowered to $55 per
share; other terms unchanged
INVESTOR STOCK OPTIONS: Remain at $60 per share
REVISED BID STRUCTURE
FINANCING SOURCES: BellSouth to purchase an additional $500
million of common stock as described above
QVC to raise an additional $250 million
through additional bank borrowings
USES: $250 million to replace same amount of
liquidation preference in QVC merger
preferred (new ratio to be .2386 Paramount
Share)
$500 million to replace QVC common stock
(new ratio to be 1.2361 per Paramount Share)
TENDER OFFER: Increased to $104 per Paramount Share
WARRANT: No changes.
