EXHIBIT (C)(3)
SONY PICTURES ENTERTAINMENT INC.
00000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000-0000
November 24, 1997
Liberty Media Corporation
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Apollo Investment Fund III, LP
1301 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Bastion Capital Fund, LP
1999 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Gentlemen:
Reference is made to that certain Agreement and Plan of Merger by and among TLMD
Station Group, Inc. ("Station Co."), TLMD Acquisition Co. ("Acquisition Co.")
and Telemundo Group, Inc. (the "Company") dated as of November 24, 1997 (the
"Merger Agreement"), and to that certain Agreement dated as of November 17, 1997
by and among Apollo Investment Fund III, LP ("Apollo Fund"), Bastion Capital
Fund, LP ("Bastion Capital"), Liberty Media Corporation ("Liberty Media") and
Sony Pictures Entertainment Inc. ("SPE") (the "Bid Agreement"). Capitalized
terms used herein but not herein defined shall have the meanings given in the
Bid Agreement, and if not defined therein, in the Merger Agreement.
1. Aggregate Equity Contributions. The Merger Agreement provides for total
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consideration of $44 per share of common stock of the Company, plus additional
interest in certain circumstances as therein set forth, which amount is in
excess of the funding set forth in Exhibit A to the Bid Agreement. The parties
hereby agree that, notwithstanding the provisions of Section 2 of the Bid
Agreement, the aggregate equity commitment of the parties shall be $273.2
million and each party's equity commitment shall be as follows: SPE--$68.2
million; Liberty Media--$68.2 million; and Station Holdings--$136.8 million, of
which $93.0 million shall be funded by Apollo Fund and $43.8 million shall be
funded by Bastion Capital. To the extent any additional amounts are payable as
a result of the payment of Additional Amounts pursuant to Section 2.7 of the
Merger Agreement or required to fund working capital requirements anticipated at
Closing and to pay related fees and costs, such amounts shall be funded 50% by
an increase in the purchase price for the Network Assets (which shall be funded
by an increase in the Network Interest Price paid to Network Co.) and (y) 50% by
additional equity contributions to Station Co. by SPE, Liberty Media and Station
Holdings, which amount shall be allocated as follows: 50.1%--Station Holdings;
24.95%--SPE and 24.95%--Liberty Media.
Liberty Media Corporation
Apollo Investment Fund III, L.P.
Bastion Capital Fund, L.P.
November 24, 1997
2. Network Interest Price. Based upon a total Merger Consideration of $44 per
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share, the Network Interest Price shall be $73.2 million (subject to adjustment
as provided in Paragraph 1 above).
3. Major Decisions. Between the date of the Merger Agreement and the date of
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the Closing under the Merger Agreement, the parties hereby agree that it shall
be a "Major Decision", as that term is used in the Bid Agreement, for Station
Co. or Acquisition Co. to take any action including, but not limited to, the
waiver of any condition to Station Co.'s or Acquisition Co.'s obligation to
consummate the Merger.
4. Payments for Filings. Section 5.8(b) of the Merger Agreement provides that
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as promptly as practicable following the date of the Merger Agreement, the
Company, Station Co. and Acquisition Co. will file all necessary applications
with the Federal Communications Commission. The Merger Agreement further
contemplates the filing of a Notification and Report Form under the HSR Act.
The parties hereby agree to cooperate in good faith to prepare and file all
applications with the FCC and under the HSR Act on a timely basis. Further, all
application or notification fees, and attorneys fees relating to the preparation
and filing of such applications and notifications, in connection therewith will
be divided one-third each among Station Holdings, Liberty Media and SPE.
5. Termination Fee Payable by the Company. Section 7.4(a) of the Merger
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Agreement provides that the Company shall pay to Station Co. a termination fee
of up to $17.5 million under certain circumstances. The parties hereby agree
that to the extent such a payment is received, the parties will: first, recover,
in the aggregate up to $2.5 million of their out-of-pocket fees and expenses
related to the transactions contemplated by the Merger (including but not
limited to fees and expenses of their respective counsel, accountants and other
representatives), allocated one-third each among Station Holdings, Liberty Media
and SPE, provided that if the out-of-pocket fees and expenses of one party are
less than its allocated one-third interest, such remaining amount shall be
allocated equally among the other parties to cover their out-of-pocket fees and
expenses; second, pay to the Arrangers (as defined in the Senior Secured Credit
Facilities Fee Letter and the Senior Discount Debentures Fee Letter (together,
the "Bank Letters"), each dated as of the date hereof) from the remaining
termination fee the Break-Up Fee (as defined in the Bank Letters); and, third,
the remaining portion of the termination fee shall be divided one-third each
among Station Holdings, Liberty Media and SPE.
6. Termination Fee Payable by Station Co. Section 7.4(b) of the Merger
-------------------------------------
Agreement provides for the payment by Station Co. of a termination fee under
certain circumstances. To the extent the Station Co. is obligated to make such
payment, it shall be paid one-third by each of Station Holdings
Liberty Media Corporation
Apollo Investment Fund III, L.P.
Bastion Capital Fund, L.P.
November 24, 1997
(which will be funded by Apollo Fund and Bastion Capital in the same proportion
as their respective equity contribution to Station Holdings set forth in
Paragraph 1 above), SPE and Liberty Media.
7. Transfers by Bastion. Section 3(i) of the Bid Agreement shall be amended to
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add a second paragraph which shall read in full as follows: "Bastion Capital may
at any time Transfer all of its common stock in Station Holdings to any Bastion
Controlled Affiliate (to be defined), provided (i) such Transfer does not
require any filing of a change of control or license transfer application under
the Communications Act and (ii) such Transfer does not, directly or indirectly,
result in any requirement that any party be required to modify any internal
relationship or relationship with affiliates, divest or limit its rights with
respect to any assets, agree to any restriction of its activities or modify any
transaction with other affiliates in order to continue to hold and vote its
interest in Station Co."
8. Acceptable Order. The parties agree that they will make such reasonable
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modifications and adjustments to their respective relationships and arrangements
with respect to Station Co. contemplated by this Agreement as may be required in
order to obtain the consents and approvals required to consummate the
Acquisition (including, if and to the extent reasonably required, reducing its
general voting power with respect to its shares of Common Stock or substituting
for its Common Stock other equity securities or rights in respect thereof), so
long as such modifications and adjustments do not modify in any material respect
the arrangements set forth in Section 6(a) of the Bid Agreement or modify in
any material respect the economic arrangement among and between the parties as
contemplated by this Agreement. Notwithstanding the foregoing, no party will be
required to modify any internal relationship or relationship with affiliates,
divest or limit its rights with respect to any assets, agree to any restriction
of its activities or modify any transaction with affiliates (except, in each
case, as contemplated by the preceding sentence) in order to obtain any
necessary consent or approval in order to consummate the Acquisition.
9. Termination Provision. Section 11 of Bid Agreement shall no longer be
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effective from and after the execution of the Merger Agreement.
Liberty Media Corporation
Apollo Investment Fund III, L.P.
Bastion Capital Fund, L.P.
November 24, 1997
Sincerely,
SONY PICTURES ENTERTAINMENT INC.
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
Executive Vice President
Agreed to and Accepted by:
LIBERTY MEDIA CORPORATION
By: /s/ Xxxxx Xxxx
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APOLLO INVESTMENT FUND III, L.P.
By: Apollo Advisors II, L.P., its General Partner
By: Apollo Capital Management II, Inc., its
General Partner
By: /s/ Xxxxxx Xxxxx
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BASTION CAPITAL FUND, L.P.
By: Bastion Partner, L.P., its General Partner
By: Bron Corp., its General Partner
By: /s/ Xxxxxxxxx Xxxx
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