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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
SCHEDULE 13E-3/A
RULE 13e-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE
SECURITIES EXCHANGE ACT OF 1934)
---------------------
(Amendment No. 2)
TELEMUNDO GROUP, INC.
(NAME OF THE ISSUER)
TELEMUNDO GROUP, INC.
TLMD STATION GROUP, INC.
TLMD ACQUISITION CO.
APOLLO INVESTMENT FUND III, L.P.
BASTION CAPITAL FUND, L.P.
(NAME OF PERSON(S) FILING STATEMENT)
SERIES A COMMON STOCK, PAR VALUE $.01 PER SHARE;
SERIES A COMMON STOCK PURCHASE WARRANTS
(TITLE OF CLASS OF SECURITIES)
87943M306
87943M124
---------
(CUSIP NUMBER OF CLASS OF SECURITIES)
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<S> <C> <C>
ROLAND A. HERNANDEZ PAUL D. TOSETTI, ESQ. EDMUND KAUFMAN
PRESIDENT AND CHIEF LATHAM & WATKINS IRELL & MANELLA, LLP
EXECUTIVE OFFICER 633 WEST FIFTH STREET 333 SOUTH HOPE STREET
TELEMUNDO GROUP, INC. LOS ANGELES, CA 90071 LOS ANGELES, CA 90071
2290 WEST 8TH AVENUE (213) 485-1234 (213) 620-1555
HIALEAH, FL 33010
(305) 884-8200
</TABLE>
PATRICK J. DOOLEY, ESQ.
AKIN, GUMP, STRAUSS,
HAUER & FELD, L.L.P.
590 MADISON AVENUE
NEW YORK, NY 10022
(212) 872-1000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON
BEHALF OF PERSON(S) FILING STATEMENT)
--------------------
This statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
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b. [_] The filing of a registration statement under the Securities Act of
1933.
c. [_] A tender offer.
d. [_] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: [X]
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
TRANSACTION VALUATION(1) AMOUNT OF FILING FEE(2)
$538,497,696 $107,699.54
- --------------------------------------------------------------------------------
(1) For purposes of calculation of the filing fee only. Assumes the purchase,
at a purchase price of $44.00 per share of common stock, of 12,238,584
shares of common stock of the Issuer, representing all of such common stock
outstanding on a fully diluted basis (assuming the exercise of options and
warrants to acquire shares of common stock and excluding shares of common
stock owned by the Issuer). The above calculation is based on the most
recent publicly available data for the Issuer.
(2) The amount of the filing fee equals 1/50th of 1% of the transaction value.
[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: $107,699.54 FILING PARTY: TELEMUNDO GROUP, INC.
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FORM OR REGISTRATION NO.: SCHEDULE 14A
------------
DATE FILED: FEBRUARY 18, 1998
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2
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INTRODUCTION
This Amendment No. 2 to the Rule 13e-3 Transaction Statement on Schedule
13E-3 is being filed with the Securities and Exchange Commission (the
"Commission") on behalf of Telemundo Group, Inc. (the "Company"), TLMD Station
Group, Inc. ("Purchaser"), TLMD Acquisition Co. ("Sub"), Apollo Investment Fund
III, L.P. ("Apollo") and Bastion Capital Fund, L.P. ("Bastion") with respect to
a proposed merger pursuant to which Sub will be merged with and into the Company
(the "Merger") and the Company, as the surviving corporation in the Merger, will
become a wholly-owned subsidiary of Purchaser.
The following cross-reference sheet is being supplied pursuant to General
Instruction F to Schedule 13E-3 and shows the location of the information
required by Schedule 13E-3 in the amended preliminary Proxy Statement (the
"Preliminary Proxy Statement") of the Company and filed with the Commission
on April 20, 1998. The information set forth in the Preliminary Proxy
Statement, including all annexes, schedules and exhibits thereto, is hereby
expressly incorporated by reference as set forth in the following cross-
reference sheet and in the responses to each item of this Schedule 13E-3, and
such responses are qualified in their entirety by the provisions of the
Preliminary Proxy Statement. The cross-reference sheet indicates the caption in
the Preliminary Proxy Statement under which the responses are incorporated
herein by reference. If any such item is inapplicable or the answer thereto is
in the negative and is omitted from the Preliminary Proxy Statement, it is so
indicated in the cross-reference sheet.
3
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CROSS REFERENCE SHEET
Pursuant to General Instruction F to Schedule 13E-3
ALL REFERENCES ARE TO PORTIONS OF THE
SCHEDULE 13E-3 ITEM PRELIMINARY PROXY STATEMENT WHICH ARE
NUMBER AND CAPTION INCORPORATED HEREIN BY REFERENCE
------------------------------- ----------------------------------------
1. Issuer and Class of Security
Subject to the Transaction
(a)............................ "SUMMARY--The Companies;" "THE COMPANIES."
(b)............................ "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT."
(c)............................ "SUMMARY--Price Range of Common Stock and
Warrants;" "PRICE RANGE OF COMMON STOCK AND
WARRANTS."
(d)............................ "PRICE RANGE OF COMMON STOCK AND WARRANTS."
(e)............................ Not applicable.
(f)............................ "SPECIAL FACTORS--Current Relationships and
Transactions."
2. Identity and Background
(a)-(d) and (g)............... "SUMMARY--The Companies;" "THE COMPANIES;"
"SPECIAL FACTORS--Current Relationships and
Transactions;" "DIRECTORS AND EXECUTIVE
OFFICERS OF TELEMUNDO;" "DIRECTORS AND
EXECUTIVE OFFICERS OF THE PURCHASER AND
SUB."
(e)-(f)....................... Not applicable.
4
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ALL REFERENCES ARE TO PORTIONS OF THE
SCHEDULE 13E-3 ITEM PRELIMINARY PROXY STATEMENT WHICH ARE
NUMBER AND CAPTION INCORPORATED HEREIN BY REFERENCE
------------------------------- ----------------------------------------
3. Past Contacts, Transactions or
Negotiations
(a)............................ "SUMMARY--Current Relationships and
Transactions; Interests of Certain
Persons;" "SPECIAL FACTORS--Background of
the Merger;" "--Recommendations of the
Special Committee and the Board of
Directors; Fairness of The Merger;" "--
Current Relationships and Transactions;"
"--Interests of Certain Persons;" "--
Financing for the Merger;" "THE MERGER
AGREEMENT;" "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT."
(b)............................ "SUMMARY--Current Relationships and
Transactions; Interests of Certain
Persons;" "--Financing for the Merger;" "--
Litigation Related to the Merger; "SPECIAL
FACTORS--Background of the Merger;" "--
Recommendations of the Special Committee
and the Board of Directors; Fairness of the
Merger;" "--Current Relationships and
Transactions;" "--Interests of Certain
Persons;" "--Financing for the Merger;" "--
Certain Litigation Related to the Merger;"
"EXECUTIVE COMPENSATION;" "THE MERGER
AGREEMENT;" "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT."
4. Terms of the Transaction
(a)........................... "QUESTIONS AND ANSWERS ABOUT THE MERGER AND
THE INCENTIVE PLAN;" "SUMMARY;" "SPECIAL
FACTORS--Purpose and Structure of the
Merger;" "--Certain Effects of the Merger;
Plans for Telemundo After the Merger;" "--
Risk that the Merger Will Not be
Consummated;" "--Current Relationships and
Transactions;" "--Interests of Certain
Persons;" "--Financing for the Merger;" "--
Certain Federal Regulatory Matters;" "--
Certain Federal Income Tax Consequences;"
"THE MERGER AGREEMENT;" "Annex A."
5
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ALL REFERENCES ARE TO PORTIONS OF THE
SCHEDULE 13E-3 ITEM PRELIMINARY PROXY STATEMENT WHICH ARE
NUMBER AND CAPTION INCORPORATED HEREIN BY REFERENCE
------------------------------- ------------------------------------------
(b).......................... "SUMMARY--Current Relationships and
Transactions; Interests of Certain
Persons;" "--Background of the Merger;" "--
Recommendations; Fairness of the Merger;"
"--Certain Effects of the Merger; Plans for
Telemundo After the Merger;" "THE SPECIAL
MEETING--Record Date and Voting;" "SPECIAL
FACTORS--Purpose and Structure of the
Merger;" "--Certain Effects of the Merger;
Plans for Telemundo After the Merger;" "--
Current Relationships and Transactions;"
"--Interests of Certain Persons;" "--
Background of the Merger;"
"--Recommendations of the Special Committee
and the Board of Directors; Fairness of the
Merger;" "--Certain Federal Income Tax
Consequences;" "THE MERGER AGREEMENT;"
"ANNEX A."
5. Plans or Proposals of the Issuer
or Affiliate
(a)-(b)........................ "SUMMARY--Certain Effects of the Merger;
Plans for Telemundo After the Merger;"
"--Financing for the Merger;" "SPECIAL
FACTORS--Certain Effects of the
Merger; Plans for Telemundo After the
Merger;" "--Financing for the Merger--
Network Sale."
(c)............................ "SUMMARY--Current Relationships and
Transactions; Interests of Certain
Persons;" "SPECIAL FACTORS--Certain Effects
of the Merger; Plans for Telemundo After
the Merger;" "--Interests of Certain
Persons."
(d)-(e)....................... "SUMMARY--Certain Effects of the Merger;
Plans for Telemundo After the Merger;"
"--Financing for the Merger;" "SPECIAL
FACTORS--Purpose and Structure of the
Merger;" "--Certain Effects of the Merger;
Plans for Telemundo After the Merger;" "--
Financing for the Merger;" "PRICE RANGE OF
COMMON STOCK AND WARRANTS."
(f)........................... "SUMMARY--Certain Effects of the Merger;
Plans for Telemundo After the Merger;"
"SPECIAL FACTORS--Certain Effects of the
Merger; Plans for Telemundo After the
Merger."
(g)........................... Not Applicable.
6. Source and Amounts of Funds
or Other Consideration
(a)........................... "SUMMARY--Financing for the Merger;"
"SPECIAL FACTORS--Financing for the
Merger."
(b)............................ "EXPENSES."
6
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ALL REFERENCES ARE TO PORTIONS OF THE
SCHEDULE 13E-3 ITEM PRELIMINARY PROXY STATEMENT WHICH ARE
NUMBER AND CAPTION INCORPORATED HEREIN BY REFERENCE
------------------------------- ----------------------------------------
(c)............................ "SUMMARY--Financing for the Merger;"
"SPECIAL FACTORS--Financing for the
Merger."
(d)............................ Not applicable.
7. Purpose(s), Alternatives,
Reasons and Effects
(a)-(c)........................ "QUESTIONS AND ANSWERS ABOUT THE MERGER
AND THE INCENTIVE PLAN;" "SUMMARY--Certain
Effects of the Merger; Plans for Telemundo
After the Merger;" "THE SPECIAL MEETING--
General;" "SPECIAL FACTORS--Background of
the Merger;" "--Recommendations of the
Special Committee and the Board of
Directors; Fairness of the Merger; "--
Purpose and Structure of the Merger;" "--
Certain Effects of the Merger; Plans for
Telemundo After the Merger."
(d)............................ "QUESTIONS AND ANSWERS ABOUT THE MERGER
AND THE INCENTIVE PLAN;" "SUMMARY;"
"SPECIAL FACTORS--Recommendations of the
Special Committee and the Board of
Directors; Fairness of the Merger;" "--
Opinion of Lazard Freres & Co. LLC;" "--
Opinion of Salomon Brothers Inc;" "--
Purpose and Structure of the Merger;" "--
Certain Effects of the Merger; Plans for
Telemundo After the Merger;" "--Current
Relationships and Transactions;" "--
Interests of Certain Persons;" "--
Financing for the Merger;" "--Certain
Litigation Related to the Merger;" "--
Accounting Treatment of the Merger;" "--
Certain Federal Income Tax Consequences;"
"--Appraisal Rights;" "THE MERGER
AGREEMENT;" "ANNEX E."
8. Fairness of the Transaction
(a)-(b)........................ "QUESTIONS AND ANSWERS ABOUT THE MERGER
AND THE INCENTIVE PLAN;" "SUMMARY--Our
Recommendations to Stockholders;" "--
Fairness Opinions of Financial Advisors;"
"--Recommendations; Fairness of the
Merger;" "SPECIAL FACTORS--Background of
the Merger;" "--Recommendations of the
Special Committee and the Board of
Directors; Fairness of the Merger;" "--
Opinion of Lazard Freres & Co. LLC; "--
Opinion of Salomon Brothers Inc;" "ANNEX
B" "ANNEX C."
7
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ALL REFERENCES ARE TO PORTIONS OF THE
SCHEDULE 13E-3 ITEM PRELIMINARY PROXY STATEMENT WHICH ARE
NUMBER AND CAPTION INCORPORATED HEREIN BY REFERENCE
------------------------------- ----------------------------------------
(c)............................ "QUESTIONS AND ANSWERS ABOUT THE MERGER AND
THE INCENTIVE PLAN;" "SUMMARY--Record Date;
Voting Power;" "THE SPECIAL MEETING--Record
Date and Voting;" "SPECIAL FACTORS--
Recommendations of the Special Committee
and the Board of Directors; Fairness of the
Merger;" "THE MERGER AGREEMENT--Certain
Covenants--Stockholders' Meetings;" "--
Conditions to Obligations to Effect the
Merger."
(d)............................ "Summary--Current Relationships and
Transactions; Interests of Certain
Persons;" "--Fairness Opinions of Financial
Advisors; "SPECIAL FACTORS--Background of
the Merger;" "--Recommendations of the
Special Committee and the Board of
Directors; Fairness of the Merger;"
"--Opinion of Salomon Brothers Inc;"
"ANNEX C."
(e)............................ "QUESTIONS AND ANSWERS ABOUT THE MERGER AND
THE INCENTIVE PLAN;" "SUMMARY--Our
Recommendations to Stockholders;" "THE
SPECIAL MEETING--General;" "SPECIAL
FACTORS--Background of the Merger;" "--
Recommendations of the Special Committee
and the Board of Directors; Fairness of the
Merger."
(f)............................ "SPECIAL FACTORS--Background of the
Merger;" "--Recommendations of the Special
Committee and the Board of Directors;
Fairness of the Merger."
9. Reports, Opinions, Appraisals
and Certain Negotiations
(a)-(c)........................ "SUMMARY--Fairness Opinions of Financial
Advisors;" "SPECIAL FACTORS--Background of
the Merger;" "--Recommendations of the
Special Committee and the Board of
Directors; Fairness of the Merger;" "--
Opinion of Lazard Freres & Co. LLC;" "--
Opinion of Salomon Brothers Inc;" "WHERE
YOU CAN FIND MORE INFORMATION;" "ANNEX B;"
"ANNEX C."
8
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ALL REFERENCES ARE TO PORTIONS OF THE
SCHEDULE 13E-3 ITEM PRELIMINARY PROXY STATEMENT WHICH ARE
NUMBER AND CAPTION INCORPORATED HEREIN BY REFERENCE
------------------------------- ----------------------------------------
10. Interest in Securities of the Issuer
(a)........................ "SUMMARY--Share Ownership of Certain
Stockholders and Management;" "--Current
Relationships and Transactions; Interests
of Certain Persons;" "THE SPECIAL MEETING--
Record Date and Voting;" "SPECIAL FACTORS--
Current Relationships and Transactions;"
"--Interests of Certain Persons;"
"EXECUTIVE COMPENSATION;" "SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT."
(b)........................ Not applicable.
11. Contracts, Arrangements or
Understandings with Respect
to the Issuer's Securities... "QUESTIONS AND ANSWERS ABOUT THE MERGER AND
THE INCENTIVE PLAN;" "SUMMARY--Share
Ownership of Certain Stockholders and
Management;" "Current Relationships and
Transactions; Interests of Certain
Persons;" "Certain Effects of the
Merger; Plans for Telemundo After the
Merger;" "--Financing for the Merger;" "THE
SPECIAL MEETING--Record Date and Voting;"
"SPECIAL FACTORS--Background of the
Merger;" "--Current Relationships and
Transactions;" "--Certain Effects of the
Merger; Plans for Telemundo After the
Merger;" "--Interests of Certain Persons;"
"--Financing for the Merger;" "EXECUTIVE
COMPENSATION;" "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT;"
"THE MERGER AGREEMENT;" "ANNEX A."
12. Present Intention and
Recommendation of Certain
Persons with Regard to the
Transaction
(a)-(b)...................... "QUESTIONS AND ANSWERS ABOUT THE MERGER AND
THE INCENTIVE PLAN;" "SUMMARY--Our
Recommendations to Stockholders;" "--Share
Ownership of Certain Stockholders and
Management;" "--Recommendations; Fairness
of the Merger;" "THE SPECIAL MEETING--
Record Date and Voting;" "SPECIAL FACTORS--
Recommendations of the Special Committee
and the Board of Directors; Fairness of the
Merger;" "--Current Relationships and
Transactions."
9
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ALL REFERENCES ARE TO PORTIONS OF THE
SCHEDULE 13E-3 ITEM PRELIMINARY PROXY STATEMENT WHICH ARE
NUMBER AND CAPTION INCORPORATED HEREIN BY REFERENCE
------------------------------- ----------------------------------------
13. Other Provisions of the
Transaction
(a)........................... "SUMMARY--Appraisal Rights;" "THE SPECIAL
MEETING--Appraisal Rights; " "SPECIAL
FACTORS--Appraisal Rights;" "THE MERGER
AGREEMENT--Consideration to be Received in
the Merger;" "ANNEX E;" "ANNEX A."
(b)............................ Not applicable.
(c)............................ Not applicable.
14. Financial Information
(a) .......................... "SUMMARY SELECTED HISTORICAL FINANCIAL
DATA;" "SELECTED HISTORICAL FINANCIAL
DATA;" "WHERE YOU CAN FIND MORE
INFORMATION."
(b) .......................... Not applicable.
15. Persons and Assets Employed,
Retained or Utilized
(a)........................... "SUMMARY--Current Relationships and
Transactions; Interests of Certain
Persons;" "--Certain effects of the
Merger; Plans for Telemundo After the
Merger;" "--Financing for the Merger;"
"SPECIAL FACTORS--Certain Effects of the
Merger; Plans for Telemundo After the
Merger" "--Interests of Certain Persons;"
"--Financing for the Merger;" "THE MERGER
AGREEMENT--Certain Covenants--Conduct of
Business;" "EXPENSES;" "ANNEX A."
(b)........................... "WHO CAN HELP ANSWER YOUR QUESTIONS;"
"SUMMARY--Fairness Opinions of Financial
Advisors;" "THE SPECIAL MEETING--Voting,
Revocation and Solicitation of Proxies;"
"SPECIAL FACTORS--Background of the
Merger;" "--Opinion of Lazard Freres & Co.
LLC;" "--Opinion of Salomon Brothers Inc."
16. Additional Information......... The information set forth in the
Preliminary Proxy Statement and all
Annexes thereto is incorporated herein by
reference in its entirety.
10
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ALL REFERENCES ARE TO PORTIONS OF THE
SCHEDULE 13E-3 ITEM PRELIMINARY PROXY STATEMENT WHICH ARE
NUMBER AND CAPTION INCORPORATED HEREIN BY REFERENCE
------------------------------- ----------------------------------------
17. Material to be Filed as
Exhibits........................ Separately included herewith.
11
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Item 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) The information concerning the Issuer and its principal executive
office set forth on in the sections entitled "SUMMARY--The Companies;" and "THE
COMPANIES" is incorporated herein by reference.
(b) The information set forth in the section entitled "SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" is incorporated herein by
reference.
(c) The information set forth in the sections entitled "SUMMARY--Price
Range of Common Stock and Warrants;" and "PRICE RANGE OF COMMON STOCK AND
WARRANTS" is incorporated herein by reference.
(d) The information set forth in the section entitled "PRICE RANGE OF
COMMON STOCK AND WARRANTS" is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the section entitled "SPECIAL
FACTORS--Current Relationships and Transactions" is incorporated herein by
reference.
Item 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) The persons filing this Statement are the Company (the
issuer of the classes of equity securities that are the subject of the Rule
13e-3 transaction), Purchaser, Sub, Apollo and Bastion. The information set
forth in the sections entitled "THE COMPANIES;" "SPECIAL FACTORS--Current
Relationships and Transactions;" "DIRECTORS AND EXECUTIVE OFFICERS OF
TELEMUNDO;" and "DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER AND SUB" is
incorporated herein by reference.
(e) and (f) During the last five years, none of the Company, Purchaser,
Sub, Apollo and Bastion and, to the best of their knowledge, any of their
respective executive officers, directors, partners or controlling persons, (i)
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors), or (ii) was a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
further violations of, or prohibiting activities, subject to, federal or state
securities laws or finding any violation of such laws.
12
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Item 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a) The information set forth in the sections entitled "SUMMARY--
Current Relationships and Transactions; Interests of Certain Persons;" "SPECIAL
FACTORS--Background of the Merger;" "--Recommendations of the Special Committee
and the Board of Directors; Fairness of the Merger;" "--Current Relationships
and Transactions;" "--Interests of Certain Persons;" "--Financing for the
Merger;" "THE MERGER AGREEMENT;" and "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT" is incorporated herein by reference.
(b) The information set forth in the sections entitled "SUMMARY--
Current Relationships and Transactions; Interests of Certain Persons;" "--
Financing for the Merger;" "--Litigation Related to the Merger;" "SPECIAL
FACTORS--Background of the Merger;" "--Recommendations of the Special Committee
and the Board of Directors; Fairness of the Merger;" "--Current Relationships
and Transactions;" "--Interests of Certain Persons;" "--Financing for the
Merger;" "--Certain Litigation Related to the Merger;" "EXECUTIVE COMPENSATION;"
"THE MERGER AGREEMENT;" and "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT" is incorporated herein by reference.
Item 4. TERMS OF THE TRANSACTION.
(a) The information set forth in the sections entitled "QUESTIONS AND
ANSWERS ABOUT THE MERGER AND THE INCENTIVE PLAN;" "SUMMARY;" "SPECIAL FACTORS--
Purpose and Structure of the Merger;" "--Certain Effects of the Merger; Plans
for Telemundo After the Merger;" "--Risk that the Merger Will Not be
Consummated;" "--Current Relationships and Transactions;" "--Interests of
Certain Persons;" "--Financing for the Merger;" "--Certain Federal Regulatory
Matters;" "--Certain Federal Income Tax Consequences;" "THE MERGER AGREEMENT;"
and "ANNEX A" is incorporated herein by reference.
(b) The information set forth in the sections entitled "SUMMARY--
Current Relationships and Transactions; Interests of Certain Persons;"
"--Background of the Merger;" "--Recommendations; Fairness of the Merger;"
"--Certain Effects of the Merger; Plans for Telemundo After the Merger;" "THE
SPECIAL MEETING--Record Date and Voting;" "SPECIAL FACTORS--Purpose and
Structure of the Merger;" "--Certain Effects of the Merger; Plans for Telemundo
After the Merger;" "--Current Relationships and Transactions;" "--Interests of
Certain Persons;" "--Background of the Merger;" "--Recommendations of the
Special Committee and the Board of Directors; Fairness of the Merger;"
"--Certain Federal Income Tax Consequences;" "THE MERGER AGREEMENT;" and "ANNEX
A" is incorporated herein by reference.
Item 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a)-(b) The information set forth in the sections entitled "SUMMARY--
Certain Effects of the Merger; Plans for Telemundo After the Merger;" "--
Financing for the Merger;" "SPECIAL FACTORS--Certain Effects of the Merger;
Plans for Telemundo After the Merger" and "--Financing for the Merger--Network
Sale" is incorporated herein by reference.
(c) The information set forth in the sections entitled "SUMMARY--
Current Relationships and Transactions; Interests of Certain Persons;" "SPECIAL
FACTORS--Certain Effects of
13
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the Merger; Plans for Telemundo After the Merger;" and "--Interests of Certain
Persons" is incorporated herein by reference.
(d)-(e) The information set forth in the sections entitled "SUMMARY--
Certain Effects of the Merger; Plans for Telemundo After the Merger;"
"--Financing for the Merger;" "SPECIAL FACTORS--Purpose and Structure of the
Merger;" "--Certain Effects of the Merger; Plans for Telemundo After the
Merger;" "--Financing for the Merger;" and "PRICE RANGE OF COMMON STOCK AND
WARRANTS" is incorporated herein by reference.
(f) The information set forth in the sections entitled "SUMMARY--
Certain Effects of the Merger; Plans for Telemundo After the Merger;" and
"SPECIAL FACTORS--Certain Effects of the Merger; Plans for Telemundo After the
Merger" is incorporated herein by reference.
(g) Not applicable.
Item 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION
(a) The information set forth in the sections entitled "SUMMARY--
Financing for the Merger;" and "SPECIAL FACTORS--Financing for the Merger" is
incorporated herein by reference.
(b) The information set forth in the section entitled "EXPENSES" is
incorporated herein by reference.
(c) The information set forth in the sections entitled "SUMMARY--
Financing for the Merger;" and "SPECIAL FACTORS--Financing for the Merger" is
incorporated herein by reference.
(d) Not applicable.
Item 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a)-(c) The information set forth in the sections entitled "QUESTIONS
AND ANSWERS ABOUT THE MERGER AND THE INCENTIVE PLAN;" "SUMMARY--Certain Effects
of the Merger; Plans for Telemundo After the Merger;" "THE SPECIAL MEETING--
General;" "SPECIAL FACTORS--Background of the Merger;" "--Recommendations of the
Special Committee and the Board of Directors; Fairness of the Merger; "--Purpose
and Structure of the Merger;" and "--Certain Effects of the Merger; Plans for
Telemundo After the Merger" is incorporated herein by reference.
(d) The information set forth in the sections entitled "QUESTIONS AND
ANSWERS ABOUT THE MERGER AND THE INCENTIVE PLAN;" "SUMMARY;" "SPECIAL FACTORS--
Recommendations of the Special Committee and the Board of Directors; Fairness of
the Merger;" "--Opinion of Lazard Freres & Co. LLC;" "--Opinion of Salomon
Brothers Inc;" "--Purpose and Structure of the Merger;" "--Certain Effects of
the Merger; Plans for Telemundo After the Merger;" "--Current Relationships and
Transactions;" "--Interests of Certain Persons;" "--Financing for the Merger;"
"--Certain Litigation Related to the Merger;" "--Accounting Treatment of the
Merger;" "--Certain Federal Income Tax Consequences;" "--Appraisal Rights;" "THE
MERGER AGREEMENT;" and "ANNEX E" is incorporated herein by reference.
14
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ITEM 8. FAIRNESS OF THE TRANSACTION.
(a)-(b) The information set forth in the sections entitled "QUESTIONS
AND ANSWERS ABOUT THE MERGER AND THE INCENTIVE PLAN;" "SUMMARY--Our
Recommendations to Stockholders;" "--Fairness Opinions of Financial Advisors;"
"--Recommendations; Fairness of the Merger;" "SPECIAL FACTORS--Background of the
Merger;" "--Recommendations of the Special Committee and the Board of Directors;
Fairness of the Merger;" "--Opinion of Lazard Freres & Co. LLC;" "--Opinion of
Salomon Brothers Inc;" "ANNEX B" and "ANNEX C" is incorporated herein by
reference. Each of Lazard Freres & Co. LLC and Salomon Brothers Inc has
consented to the inclusion of its opinion as an exhibit hereto and to the
references to such opinion in this Transaction Statement.
(c) The information set forth in the sections entitled "QUESTIONS AND
ANSWERS ABOUT THE MERGER AND THE INCENTIVE PLAN;" "SUMMARY--Record Date; Voting
Power;" "THE SPECIAL MEETING--Record Date and Voting;" "SPECIAL FACTORS--
Recommendations of the Special Committee and the Board of Directors; Fairness of
the Merger;" "THE MERGER AGREEMENT--Certain Covenants--Stockholders' Meetings;"
and "--Conditions to Obligations to Effect the Merger" is incorporated herein by
reference.
(d) The information set forth in the sections entitled "SUMMARY--
Current Relationships and Transactions; Interests of Certain Persons;" "--
Fairness Opinions of Financial Advisors;" "SPECIAL FACTORS--Background of the
Merger;" "--Recommendations of the Special Committee and the Board of Directors;
Fairness of the Merger;" "--Opinion of Salomon Brothers Inc;" and "ANNEX C" is
incorporated herein by reference.
(e) The information set forth in the sections entitled "QUESTIONS AND
ANSWERS ABOUT THE MERGER AND THE INCENTIVE PLAN;" "SUMMARY--Recommendations;
Fairness of the Merger;" "THE SPECIAL MEETING--General;" "SPECIAL FACTORS--
Background of the Merger;" and "--Recommendations of the Special Committee and
the Board of Directors; Fairness of the Merger" is incorporated herein by
reference.
(f) The information set forth in the sections entitled "SPECIAL
FACTORS--Background of the Merger;" and "--Recommendations of the Special
Committee and the Board of Directors; Fairness of the Merger" is incorporated
herein by reference.
Item 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a)-(c) The information set forth in the sections entitled "SUMMARY--
Fairness Opinions of Financial Advisors;" "SPECIAL FACTORS--Background of the
Merger;" "--Recommendations of the Special Committee and the Board of Directors;
Fairness of the Merger;" "--Opinion of Lazard Freres & Co. LLC;" "--Opinion of
Salomon Brothers Inc;" "WHERE YOU CAN FIND MORE INFORMATION;" and "ANNEX
B" and "ANNEX C" is incorporated herein by reference.
Item 10. INTEREST IN SECURITIES OF THE ISSUER.
(a) The information set forth in the sections entitled "SUMMARY--Share
Ownership of Certain Stockholders and Management;" "--Current Relationships and
Transactions; Interests of Certain Persons;" "THE SPECIAL MEETING--Record Date
and Voting;" "SPECIAL FACTORS--Current Relationships and Transactions;"
"--Interests of Certain Persons;" "EXECUTIVE COMPENSATION;" and "SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" is incorporated herein by
reference.
15
<PAGE>
(b) Not applicable.
Item 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES.
The information set forth in the sections entitled "QUESTIONS AND
ANSWERS ABOUT THE MERGER AND THE INCENTIVE PLAN;" "SUMMARY--Share Ownership of
Certain Stockholders and Management;" "--Current Relationships and Transactions;
Interests of Certain Persons;" "--Certain Effects of the Merger; Plans for
Telemundo After the Merger;" "--Financing for the Merger;" "THE SPECIAL MEETING
- --Record Date and Voting;" "SPECIAL FACTORS--Background of the Merger;" "--
Current Relationships and Transactions; "--Certain Effects of the Merger; Plans
for Telemundo After the Merger;" "--Interests of Certain Persons;" -- Financing
for the Merger;" "EXECUTIVE COMPENSATION;" SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT;" "THE MERGER AGREEMENT" and "ANNEX A" is
incorporated herein by reference.
Item 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION
(a)-(b) The information set forth in the sections entitled "QUESTIONS AND
ANSWERS ABOUT THE MERGER AND THE INCENTIVE PLAN;" "SUMMARY--Our Recommendations
to Stockholders;" "--Recommendations; Fairness of the Merger;" "--Share
Ownership of Certain Stockholders and Management;" "THE SPECIAL MEETING--Record
Date and Voting;" "SPECIAL FACTORS--Recommendations of the Special Committee and
the Board of Directors; Fairness of the Merger" and "--Current Relationships and
Transactions" is incorporated herein by reference.
Item 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) The information set forth in the sections entitled "SUMMARY--Appraisal
Rights;" "THE SPECIAL MEETING--Appraisal Rights;" "SPECIAL FACTORS--Appraisal
Rights;" "THE MERGER AGREEMENT--Consideration to be Received in the Merger;" and
"ANNEX E" and "ANNEX A" is incorporated herein by reference.
(b) Not applicable.
(c) Not applicable.
Item 14. FINANCIAL INFORMATION.
(a) The information set forth in the sections entitled "SUMMARY
SELECTED HISTORICAL FINANCIAL DATA;" "SELECTED HISTORICAL FINANCIAL DATA;" and
"WHERE YOU CAN FIND MORE INFORMATION" is incorporated herein by reference.
Pursuant to Instruction D and Instruction F to Schedule 13E-3, the following are
incorporated by reference:
(i) The "Consolidated Financial Statements" from the Company's Annual
Report on Form 10-K for the year ended December 31, 1997.
(b) Not applicable.
16
<PAGE>
Item 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The information set forth in the sections entitled "SUMMARY--
Current Relationships and Transactions; Interests of Certain Persons; "--Certain
Effects of the Merger; Plans for Telemundo After the Merger;" "--Financing for
the Merger;" "SPECIAL FACTORS--Certain Effects of the Merger; Plans for
Telemundo After the Merger;" "--Interests of Certain Persons;" "--Financing for
the Merger;" "THE MERGER AGREEMENT--Certain Covenants--Conduct of Business;"
"EXPENSES;" and "ANNEX A" is incorporated herein by reference.
(b) The information set forth in the sections entitled "WHO CAN HELP
ANSWER YOUR QUESTIONS;" "SUMMARY--Fairness Opinions of Financial Advisors;"
"THE SPECIAL MEETING--Voting, Revocation and Solicitation of Proxies;" "SPECIAL
FACTORS--Background of the Merger;" "--Opinion of Lazard Freres & Co. LLC;" and
"--Opinion of Salomon Brothers Inc" is incorporated herein by reference.
Item 16. ADDITIONAL INFORMATION.
The information set forth in the Preliminary Proxy Statement and all
Annexes thereto is incorporated herein by reference in its entirety.
Item 17. EXHIBITS
(a) None.
(b)(1) Opinion of Lazard Freres & Co. LLC (incorporated by reference to
ANNEX B to the Preliminary Proxy Statement).
(b)(2) Opinion of Salomon Brothers Inc (incorporated by reference to ANNEX C
to the Preliminary Proxy Statement).
(c)(1) Agreement and Plan of Merger, dated as of November 24, 1997, by and
among TLMD Station Group, Inc., TLMD Acquisition Co. and Telemundo
Group, Inc. (incorporated by reference to ANNEX A to the Preliminary
Proxy Statement).
(c)(2) Agreement, dated as of November 17, 1997, by and among Apollo Investment
Fund III, L.P., Bastion Capital Fund, L.P., Liberty Media Corporation
and Sony Pictures Entertainment Inc. (previously filed)
(c)(3) Amendment, dated as of November 24, 1997, by among Apollo Investment
Fund III, L.P., Bastion Capital Fund, L.P., Liberty Media Corporation
and Sony Pictures Entertainment Inc. (previously filed)
(c)(4) Senior Secured Credit Facilities Commitment Letter, dated November 23,
1997, by and among Credit Suisse First Boston, Canadian Imperial Bank of
Commerce, Apollo Investment Fund III, L.P., Bastion Capital Fund, L.P.,
Liberty Media Corporation and Sony Pictures Entertainment Inc. (filed
herewith).
(c)(5) Senior Discount Debentures Commitment Letter, dated November 23, 1997,
by and among Credit Suisse First Boston Corporation, CIBC Oppenheimer
Corp., Apollo Investment Fund III, L.P., Bastion Capital Fund, L.P.,
Liberty Media Corporation and Sony Pictures Entertainment Inc. (filed
herewith).
(d) Preliminary copy of Letter to Stockholders, preliminary copy of Notice
of Special Meeting of Stockholders, preliminary Proxy Statement and
preliminary Proxy Card (incorporated by reference to the Preliminary
Proxy Statement).
(e) Section 262 of the Delaware General Corporation Law, as amended
(incorporated by reference to ANNEX E to the Preliminary Proxy
Statement).
(f) Not applicable.
(g) Consolidated Financial Statements (incorporated by reference from the
Company's Annual Report on Form 10-K for the year ended December 31,
1997).
17
<PAGE>
SIGNATURES
After due inquiry and to the best of its knowledge and belief, each of
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
TELEMUNDO GROUP, INC.
By: /s/ Peter J. Housman, II
--------------------------------
Name: Peter J. Housman, II
Title: Chief Financial Officer
and Treasurer
Dated: April 23, 1998
TLMD STATION GROUP, INC.
By: /s/ Edward M. Yorke
--------------------------------
Name: Edward M. Yorke
Title: President
Dated: April 23, 1998
TLMD ACQUISITION CO.
By: /s/ Edward M. Yorke
--------------------------------
Name: Edward M. Yorke
Title: President
Dated: April 23, 1998
APOLLO INVESTMENT FUND III, L.P.
By: Apollo Advisors, L.P., its
General Partner
By: Apollo Capital Management II,
Inc., its General Partner
By: /s/ Michael D. Weiner
-------------------------------
Name: Michael D. Weiner
Title: Vice President
Dated: April 23, 1998
BASTION CAPITAL FUND, L.P.
By: Bastion Partner, L.P., its
General Partner
By: Villaco, its General Partner
By: /s/ Daniel D. Villanueva
-------------------------------
Name: Daniel D. Villanueva
Title: President
Dated: April 23, 1998
18
<PAGE>
EXHIBIT INDEX
Exhibit No. Page
- ---------- ----
(b)(1) Opinion of Lazard Freres Incorporated by reference to
& Co. LLC ANNEX B to the Preliminary Proxy
Statement.
(b)(2) Opinion of Salomon Incorporated by reference to
Brothers Inc ANNEX C to the Preliminary Proxy
Statement.
(c)(1) Agreement and Plan of Incorporated by reference to
Merger, dated as of November ANNEX A to the Preliminary Proxy
24, 1997, by and among TLMD Statement.
Station Group, Inc., TLMD
Acquisition Co. and Telemundo
Group, Inc.
(c)(2) Agreement, dated as of Previously filed with the Schedule 13E-3
November 17, 1997, by and on February 18, 1998.
among Apollo Investment Fund
III, L.P., Bastion Capital
Fund, L.P., Liberty Media
Corporation and Sony Pictures
Entertainment Inc.
(c)(3) Amendment, dated as of Previously filed with the Schedule 13E-3
November 24, 1997, by and on February 18, 1998.
among Apollo Investment Fund
III, L.P., Bastion Capital
Fund, L.P., Liberty Media
Corporation and Sony Pictures
Entertainment Inc.
(c)(4)
Senior Secured Credit Facilities
Commitment Letter, dated
November 23,1997, by and among
Credit Suisse First Boston,
Canadian Imperial Bank of
Commerce, Apollo Investment
Fund III, L.P., Boston Capital
Fund, L.P., Liberty Media
Corporation and Sony Pictures
Entertainment Inc.
(c)(5)
Senior Discount Debentures
Commitment Letter, dated
November 23, 1997,
by and among Credit Suisse First
Boston Corporation, CIBC
Oppenheimer Corp., Apollo
Investment Fund III, L.P., Boston
Capital Fund, L.P., Liberty Media
Corporation and Sony Pictures
Entertainment Inc.
(d) Preliminary copy of Letter Incorporated by reference to the
to Stockholders, preliminary Preliminary Proxy Statement.
copy of Notice of Special
Meeting of Stockholders,
preliminary Proxy Statement
and preliminary Proxy Card.
(e) Section 262 of the Delaware Incorporated by reference to
General Corporation Law, as ANNEX E to the Preliminary Proxy
amended. Statement.
(g) Consolidated Financial Incorporated by reference from the
Statements Company's Annual Report on Form 10-K
for the year ended December 31, 1997.
19
<PAGE>
EXHIBIT (C)(4)
CREDIT SUISSE FIRST BOSTON CANADIAN IMPERIAL BANK OF COMMERCE
Eleven Madison Avenue 425 Lexington Avenue
New York, NY 10010 New York, NY 10017
November 23, 1997
Apollo Investment Fund III
1301 Avenue of the Americas
New York, NY 10019
Attn: Edward Yorke
Liberty Media Corporation
8101 East Prentice Avenue
Suite 500
Englewood, CO 80111
Attn: David Koff
Sony Pictures Entertainment Inc.
10202 West Washington Boulevard
Culver City, CA 90232-3195
Attn: Yair Landau
Bastion Capital Fund, L.P.
1999 Avenue of the Stars, Suite 2960
Los Angeles, California 90067
Attn: Guillermo Bron
Senior Secured Credit Facilities
--------------------------------
Commitment Letter
-----------------
Ladies and Gentlemen:
You have advised Credit Suisse First Boston ("CSFB") and Canadian
----
Imperial Bank of Commerce ("CIBC" and, together with CSFB, "we", "us" or the
----
Arrangers") that Apollo Investment Fund III ("Apollo"), Liberty Media
------
Corporation ("Liberty"), Sony Pictures Entertainment Inc. ("SPE") and Bastion
------- ---
Capital Fund, L.P. ("Bastion" and, together with Apollo, Liberty and SPE, the
-------
"Sponsors" or "you") intend to form a company ("Holdings") that will, through a
- --------- --- --------
newly formed wholly owned subsidiary ("Newco"), acquire (the "Acquisition") all
----- -----------
of the outstanding capital stock of Telemundo Group, Inc. ("Target"). In
------
connection with the Acquisition, Target will refinance (the "Refinancing")
-----------
$192.0 million aggregate principal amount of its 7/10 1/2% Senior Notes due 2006
and its existing $20.0 million working capital facility (the "Target W/C
----------
Facility"). References to the "Company" mean Holdings and its subsidiaries after
- -------- -------
giving effect to the Acquisition and the Network Sale (as defined).
<PAGE>
You have advised us that the total funds necessary to consummate the
Acquisition and the Refinancing and to pay related fees and expenses will be
approximately $753.6 million (excluding the assumption of $5.6 million in
capital leases) plus any amounts then outstanding under the Target W/C Facility.
(The approximate sources and uses of the funds necessary to consummate the
Transactions are set forth on Annex I to the Summary of Principal Terms and
-------
Conditions attached hereto as Exhibit A (the "Term Sheet")). Such funds will be
--------- ----------
provided by (i) a cash common equity contribution to Holdings of not less than
$267.1 million from the Sponsors (with Apollo and Bastion contributing 50.1% and
Liberty and SPE contributing the balance), which is contributed to Newco as
common equity (the "Equity Contribution"), (ii) the issuance and sale by
-------------------
Holdings of senior discount debentures (the "Debentures") for gross proceeds of
----------
not less than $100.0 million and not more than $125.0 million, which proceeds
are contributed to Newco as common equity, (iii) borrowings of $319.4 million by
Newco under senior secured credit facilities aggregating $350.0 million (the
"Credit Facilities"); provided, however, that, as Borrower may elect upon
- ------------------ -------- -------
closing, the amount by which gross proceeds of the Debentures exceed $100.0
million shall (a) reduce the amount of the Tranche A of the Credit Facilities or
(b) be utilized to repay funded debt thereof, and (iv) the concurrent sale (the
"Network Sale") by Target to Liberty and SPE of its Spanish-language television
------------
network (the "Network") for not less than $67.1 million. The (a) Acquisition,
-------
(b) Refinancing, (c) Equity Contribution, (d) issuance and sale of the
Debentures, (e) initial borrowings under the Credit Facilities, and (f) Network
Sale are collectively referred to herein as the "Transactions."
------------
You have requested that the Arrangers (i) commit to provide the Credit
Facilities and (ii) agree to structure, arrange and syndicate the Credit
Facilities. You have received from us (or one of our affiliates), by a separate
letter, a commitment with respect to the Debentures.
In connection with the foregoing, each of the Arrangers is pleased to
advise you of its commitment to provide 50% of the entire amount of the Credit
Facilities, and the Arrangers are pleased to advise you of their agreement to
act as exclusive advisors and arrangers for the Credit Facilities, in each case
upon the terms and subject to the conditions set forth or referred to in this
commitment letter and in the Term Sheet (together, the "Commitment Letter").
-----------------
As consideration for the Arrangers' commitment hereunder and agreement
to perform the services described herein, you agree, jointly and severally, to
pay to the Arrangers the nonrefundable fees set forth in the Term Sheet and in
the fee letter dated the date hereof and delivered herewith (the "Fee Letter").
----------
The Arrangers' commitments hereunder and agreements to perform the
services described herein are subject to the satisfaction of each of the
conditions set forth or referred to in the Term Sheet.
You agree that the Arrangers will act as the sole and exclusive
advisors and arrangers for the Credit Facilities and will be awarded the titles
set forth in the Term Sheet, and will, in such capacities, perform the duties
and exercise the authority set forth in the Term Sheet and as customarily
performed and exercised by them in such roles. The Arrangers, in their
discretion, may appoint one or more collateral agents for the Credit Facilities
(which may include
2
<PAGE>
the Arrangers and their affiliates). You agree that no other agents, advisors,
co-agents or arrangers will be appointed, no other titles will be awarded and no
compensation (other than that expressly contemplated by the Term Sheet and the
Fee Letter) will be paid in connection with the Credit Facilities unless you and
we shall so agree.
We intend to syndicate the Credit Facilities to a group of financial
institutions (together with the Arrangers, the "Lenders") identified by us in
-------
consultation with you. The Arrangers intend to commence syndication efforts
promptly upon the execution of this Commitment Letter, and each of you agrees to
assist the Arrangers in completing a syndication satisfactory to them. Such
assistance shall include (i) each of you using commercially reasonable efforts
to ensure that the syndication efforts benefit materially from your respective
existing lending relationships, (ii) direct contact between your respective
senior management and advisors and the proposed Lenders (and each of you using
your best efforts to cause direct contact between senior management and advisors
of the Company and the proposed Lenders), (iii) assistance in the preparation of
a Confidential Information Memorandum and other marketing materials to be used
in connection with the syndication and (iv) the hosting, with the Arrangers, of
one or more meetings with prospective Lenders.
The Arrangers (with CSFB acting as book runner) will manage all
aspects of the syndication, including decisions as to the selection of
institutions to be approached and when they will be approached, when their
commitments will be accepted, which institutions will participate, what titles
(if any) they will be awarded, the allocations of the commitments among the
Lenders and the amount and distribution of fees among the Lenders. To assist the
Arrangers in their syndication efforts, each of you agrees to promptly prepare
and provide to the Arrangers all information with respect to the Company and the
Transactions and the other transactions contemplated hereby, including all
financial information and projections (the "Projections") as we may reasonably
-----------
request in connection with the arrangement and syndication of the Credit
Facilities. Each of you hereby represents and covenants that (i) all written
information other than the Projections (the "Information") that has been or will
-----------
be made available to the Arrangers by any of you or your representatives in
connection with the Transactions is or will be complete and correct in all
material respects and does not or will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading in light of the
circumstances under which such statements are made and (ii) the Projections that
have been or will be made available to the Arrangers by any of you or your
representatives in connection with the Transactions have been or will be
prepared in good faith based upon what you believe to be reasonable assumptions.
Each of you agrees to supplement the Information and the Projections from time
to time until the completion of the syndication so that the representation and
covenant in the preceding sentence remain correct without regard to when such
Information and Projections were furnished. You understand that in arranging and
syndicating the Credit Facilities we may use and rely on the Information and
Projections without responsibility for independent verification thereof.
You hereby agree, jointly and severally, (i) to indemnify and hold
harmless each of CSFB and its affiliates and the respective officers, directors,
employees, advisors and agents of each (each, a "CSFB Indemnified Person") and
-----------------------
CIBC and its affiliates and the respective
3
<PAGE>
officers, directors, employees, advisors and agents of each (each, a
"CIBC Indemnified Person", and, together with a CSFB Indemnified Person, the
-----------------------
"indemnified persons") from and against any and all losses, claims, damages and
-------------------
liabilities to which any such indemnified person may become subject arising out
of or in connection with this Commitment Letter, the Credit Facilities, the use
of the proceeds thereof, the Transactions or any related transaction or any
claim, litigation, investigation or proceeding relating to any of the foregoing
("Proceedings"), regardless of whether any indemnified person is a party,
thereto, and to reimburse each indemnified person upon demand for any reasonable
legal or other expenses incurred in connection with investigating or defending
any of the foregoing; provided, however, that with respect to a CSFB Indemnified
-------- -------
Person or CIBC Indemnified Person, the foregoing indemnity will not apply to
losses, claims, damages, liabilities or related expenses to the extent they are
found by a court of competent jurisdiction in a final non-appealable judgment to
have resulted from the willful misconduct or gross negligence of any CSFB
Indemnified Person or CIBC Indemnified Person, respectively, and (ii) to
reimburse the Arrangers and their affiliates on demand for all reasonable
out-of-pocket expenses (including due diligence expenses, syndication expenses,
consultants' fees and expenses, travel expenses, and reasonable fees, charges
and disbursements of counsel) incurred in connection with the Credit Facilities
and any related documentation (including, without limitation, this Commitment
Letter, the Fee Letter and the definitive financing documentation) or the
administration, amendment, modification or waiver thereof. No indemnified person
shall be liable for or entitled to any indirect or consequential damages in
connection with its activities related to the Credit Facilities.
Promptly after receipt by an indemnified person of notice of the
commencement of any Proceedings, such indemnified person will, if a claim in
respect thereof is to be made against you, notify you in writing of the
commencement thereof; provided, however, that the omission so to notify you will
-------- --------
not relieve you from any liability which you may have hereunder except to the
extent you have been materially prejudiced by such failure. In case any such
Proceedings are brought against any indemnified person and it notifies you of
the commencement thereof, you will be entitled to participate therein, and, to
the extent that you may elect by prior written notice delivered to such
indemnified person, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified person; provided, however, that if the
-------- -------
defendants in any such Proceedings include both such indemnified person and one
or more of you and such indemnified person shall have concluded that there may
be legal defenses available to it which are different from or additional to
those available to you, such indemnified person shall have the right to select
separate counsel to assert such legal defenses and to otherwise participate in
the defense of such Proceedings on behalf of such indemnified person. Upon
receipt of notice from you to such indemnified person of your election so to
assume the defense of such Proceedings and approval by such indemnified person
of counsel, you shall not be liable to such indemnified person for expenses
incurred by such indemnified person in connection with the defense thereof
(other than reasonable costs of investigation) unless (i) such indemnified
person shall have employed separate counsel in connection with the assertion of
legal defenses in accordance with the proviso to the preceding sentence, (ii)
you shall not have employed counsel reasonably satisfactory to such indemnified
person to represent such indemnified person within a reasonable time after
notice of commencement of the Proceedings or (iii) you shall have authorized in
writing the employment of counsel for such indemnified person.
4
<PAGE>
This Commitment Letter and the Arrangers' commitments hereunder shall
not be assignable by any of you without the prior written consent of the
Arrangers (and any purported assignment without such consent shall be null and
void), is intended to be solely for the benefit of the parties hereto and is not
intended to confer any benefits upon, or create any rights in favor of, any
person other than the parties hereto. This Commitment Letter may not be amended
or waived except by an instrument in writing signed by each of you and the
Arrangers. This Commitment Letter may be executed in any number of counterparts,
each of which shall be an original, and all of which, when taken together, shall
constitute one agreement. Delivery of an executed signature page of this
Commitment Letter by facsimile transmission shall be as effective as delivery of
a manually executed counterpart hereof. This Commitment Letter and the Fee
Letter are the only agreements that have been entered into between us with
respect to the Credit Facilities and set forth the entire understanding of the
parties with respect thereto.
This Commitment Letter shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
conflicts of laws principles thereof. EACH OF THE PARTIES HERETO IRREVOCABLY
AGREES TO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM
BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS
COMMITMENT LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER. Each of you
irrevocably and unconditionally submits to the exclusive jurisdiction of any
state or federal court sitting in the City of New York over any suit, action or
proceeding arising out of or relating to this Commitment Letter. Service of any
process, summons, notice or document by registered mail addressed to a Sponsor
at its address set forth above shall be effective service of process against
such Sponsor for any such suit, action or proceeding brought in any such court.
Each of you irrevocably and unconditionally waives any objection to the laying
of venue of any such suit, action or proceeding brought in any such court and
any claim that any such suit, action or proceeding has been brought in an
inconvenient forum. A final judgment in any such suit, action or proceeding
brought in any such court may be enforced in any other courts to whose
jurisdiction you are or may be subject, by suit upon judgment.
This Commitment Letter is delivered to you on the understanding that
neither this Commitment Letter nor the Fee Letter nor any of their terms or
substance shall be disclosed, directly or indirectly, to any other person except
(i) on a confidential basis to your respective officers, agents and advisors who
are directly involved in the consideration of this matter or (ii) as may be
compelled in a judicial or administrative proceeding or as otherwise required by
law (in which case you agree to inform us promptly thereof); provided, however,
-------- -------
that you may disclose this Commitment Letter and its terms and substance (but
not the Fee Letter or its terms and substance), on a confidential basis, to
Target and its directors, officers, employees, agents and advisors.
The reimbursement, indemnification and confidentiality provisions
contained herein and in the Fee Letter shall remain in full force and effect
regardless of whether definitive financing documentation shall be executed and
delivered and notwithstanding the termination of this Commitment Letter or the
Arrangers' commitment hereunder; provided, however, that the
-------- -------
5
<PAGE>
Sponsors' obligations, liabilities and representations hereunder and thereunder
shall terminate upon the closing of the transactions contemplated hereby and
thereby.
If the foregoing correctly sets forth our agreement, please indicate
your acceptance of the terms hereof and of the Fee Letter by returning to us
executed counterparts hereof and of the Fee Letter, not later than 5:00 p.m.,
New York City time, on December 5, 1997. The Arrangers' commitments and
agreements contained herein will expire at such time in the event the Arrangers
have not received such executed counterparts in accordance with the immediately
preceding sentence. In the event that the initial borrowing in respect of the
Credit Facilities does not occur on or before June 30, 1998, then this
Commitment Letter and the Arrangers' commitments and undertakings hereunder
shall automatically terminate (the date of such termination, the "Drop-Dead
---------
Date") unless the Arrangers shall, in their sole discretion, agree to an
extension; provided, however, that so long as the Sponsors and Target have used
-------- -------
their reasonable best efforts to consummate the Transactions on or before June
30, 1998, if the Transactions have not been consummated on or before June 30,
1998 solely because approval of the Federal Communications Commission ("FCC")
---
has not been obtained or the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 shall not have expired or been terminated,
the Arrangers agree to extend the Drop-Dead Date to August 31, 1998.
6
<PAGE>
The Arrangers are pleased to have been given the opportunity to assist
you in connection with this important financing.
Very truly yours,
CREDIT SUISSE FIRST BOSTON
By: /s/
-----------------------------
Name:
Title:
By: /s/ Jeff Howe
-----------------------------
Name: Jeff Howe
Title: Director
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/
-----------------------------
Name:
Title:
Accepted and agreed to as
of the date first written above by:
<TABLE>
<CAPTION>
APOLLO INVESTMENT FUND III BASTION CAPITAL FUND, LP
<S> <C>
By: Apollo Advisors II, L.P., By: Bastion Partner, L.P.,
its General Partner its General Partner
By: Apollo Capital Management II, Inc., By: Bron Corp.,
its General Partner its General Partner
By: /s/ Edward Yorke By: /s/ Guillermo Bron
------------------ ------------------
Edward Yorke Guillermo Bron
Vice President President
LIBERTY MEDIA CORPORATION SONY PICTURES ENTERTAINMENT INC.
By: /s/ David Koff By: /s/ Yair Landau
------------------ ------------------
Name: David Koff Name: Yair Landau
Title: Vice President Title: Executive Vice President
</TABLE>
7
<PAGE>
CONFIDENTIAL EXHIBIT A
November 23, 1997
Senior Secured Credit Facilities
---------------------------------
Summary of Principal Terms and Conditions/1/
--------------------------------------------
<TABLE>
<S> <C>
Borrower: A wholly owned subsidiary ("Newco" or the
- --------- "Borrower") of a corporation ("Holdings") to
be formed by Apollo Investment Fund III,
Liberty Media Corporation, Sony, Pictures
Entertainment Inc. and Bastion Capital Fund,
L.P. to acquire (the "Acquisition")
Telemundo Group, Inc. ("Target"). References
to the "Company" mean Holdings and its
subsidiaries after giving effect to the
Acquisition.
Advisors and Arrangers: CSFB and CIBC will act as sole advisors and
- ----------------------- arrangers for the Credit Facilities (the
"Arrangers"), and will perform the duties
customarily associated with such roles.
Administrative Agent: CSFB will act as administrative and
- --------------------- collateral agent for the Credit Facilities
(the "Administrative Agent"), and will
perform the duties customarily associated
with such role.
Co-Syndication Agents: CSFB and CIBC will act as Co-Syndication
- ---------------------- Agents for the Credit Facilities (the "Co-
Syndication Agents"), and will perform the
duties customarily associated with such
roles.
Documentation Agent: CIBC will act as Documentation Agent for the
- -------------------- Credit Facilities (the "Documentation
Agent"), and will perform the duties
customarily associated with such role.
Lenders: The Arrangers and a syndicate of other
- -------- financial institutions (the "Lenders")
reasonably acceptable to the Borrower and
the Co-Syndication Agents.
Type of Facilities: Senior secured credit facilities aggregating
- ------------------- $350.0 million (the "Credit Facilities"),
comprised of (i) a reducing revolving credit
facility of $150.0 million (the "Revolving
Credit Facility"), (ii) a Tranche A term
loan facility of $100.0 million (the
"Tranche A Facility") and (iii) a Tranche B
term loan facility of $100 million (the
"Tranche B Facility" and, together with the
"Tranche A Facility," the "Term Loan
Facilities");
</TABLE>
- --------------------------
/1/ All capitalized terms used but not defined herein have the meanings given
to them in the Commitment Letter to which this term sheet is attached.
8
<PAGE>
<TABLE>
<S> <C>
provided, however, that, as Borrower may
elect upon closing, the amount by which
gross proceeds of the Debentures exceed
$100.0 million shall (a) reduce the amount
of the Tranche A Facility or (b) be utilized
to repay funded debt thereof.
Availability and The Term Loan Facilities will be available
- ---------------- in a single drawing on the date of the
Maturity closing of the Acquisition (the "Closing
- -------- Date"). The Tranche A Facility will mature
seven years from the Closing Date and the
Tranche B Facility will mature eight and
one-half years from the Closing Date. The
Term Loan Facilities will amortize in
quarterly installments pursuant to
schedules to be agreed upon.
The Revolving Credit Facility will be
available on a revolving basis during the
period commencing on the Closing Date and
ending on the seventh anniversary, thereof
(the "Termination Date"). The commitment
under the Revolving Credit Facility (the
"Revolving Credit Commitment") will be
reduced from time to time pursuant to a
schedule to be agreed upon and pursuant to
provisions described under "Mandatory
Prepayments and Reductions in Commitments."
Purpose: On the Closing Date, proceeds aggregating
- -------- approximately $319.4 million from the sum of
(x) borrowings under the Term Loan
Facilities (which will be fully drawn) and
(y) a $119.4 million borrowing under the
Revolving Credit Facility will be used to
finance, in part, the Acquisition and the
Refinancing and to pay related fees and
expenses); provided, however, that, as
Borrower may elect upon closing, the amount
by which gross proceeds of the Debentures
exceed $100.0 million shall (a) reduce the
amount of the Tranche A Facility or (b) be
utilized to repay funded debt thereof. In
addition, the Target W/C Facility shall be
refinanced with proceeds from the Revolving
Credit Facility. The additional funds
necessary to consummate the Acquisition and
the Refinancing will be provided by (i) a
cash common equity contribution to Holdings
of not less than $267.1 million from the
Sponsors (with Apollo and Bastion
contributing 50.1% and Liberty and SPE
contributing the balance), which is
contributed to Newco as common equity (the
"Equity Contribution"), (ii) the issuance
and sale by Holdings of senior discount
debentures on the terms and conditions set
forth in the commitment letter, dated the
date hereof, to you with respect thereto
(the "Debentures") for gross proceeds of up
to $125.0 million (but not less than $100
million), which proceeds are contributed to
Newco as
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
common equity, and (iii) the concurrent sale
(the "Network Sale") by Target to Liberty
and SPE of its Spanish language television
network (the "Network") for not less than
$67.1 million. The approximate sources and
uses of the funds necessary to consummate
the Transactions are set forth on Annex I.
The (a) Acquisition, (b) Refinancing, (c)
initial borrowings under the Credit
Facilities, (d) Equity Contribution, (e)
issuance and sale of the Debentures and (f)
Network Sale are referred to herein as the
"Transactions."
Following the Transactions, the Revolving
Credit Facility will be used to provide for
working capital and general corporate
purposes and, subject to a sublimit to be
agreed upon, letter of credit requirements.
Guarantees: All obligations of the Borrower under the
- ----------- Credit Facilities will be unconditionally
guaranteed by Holdings and each existing and
subsequent acquired or organized domestic
subsidiary of Holdings as fully as is
permitted by applicable law.
Security: The Credit Facilities will be secured as
- --------- fully as is permitted by applicable law by
substantially all the assets of Holdings and
each existing and subsequently acquired or
organized subsidiary of Holdings
(collectively, the "Collateral"), including
but not limited to (i) a first priority
pledge of all the capital stock of the
Borrower and each existing and each
subsequently acquired or organized
subsidiary of the Borrower (including each
License Subsidiary (as defined)) and (ii)
perfected first priority security interests
in, and mortgages on, substantially all
tangible and intangible assets of Holdings
and each existing and subsequently acquired
or organized subsidiary of Holdings
(including, but not limited to, accounts
receivable, inventory, general intangibles,
intellectual property, real property,
material contracts (including affiliation
and programming agreements), cash and
proceeds of the foregoing, but excluding FCC
licenses to the extent security interests
therein may not be perfected under
applicable law).
Notwithstanding the foregoing, (i) the
assets of the Borrower's Puerto Rican
subsidiary (the "PR Sub") shall be excluded
from the lien securing the Credit
Facilities, (ii) the PR Sub shall grant a
security interest in such assets to the
Borrower for the purpose of securing the
currently outstanding promissory notes
payable by the PR Sub to the Borrower, (iii)
such promissory notes shall be pledged to
secure the Credit Facilities, and (iv)
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
65% of the voting stock and 100% of the non-
voting stock of the PR Sub will be pledged
to secure the Credit Facilities (the capital
of the PR Sub having been restructured so
that substantially all of the economic
interest therein will be owned by the
holders of the non-voting stock).
Furthermore, the Borrower will be permitted
to transfer the FCC License for its Puerto
Rican station from the U.S. License
Subsidiary in which it is currently held if
(i) the Borrower believes in good faith that
such transfer would substantially reduce the
likelihood of the Borrower being subject to
a material tax liability, (ii) such FCC
License shall be transferred to a newly
formed directly owned Puerto Rican
subsidiary of the Borrower and (iii) 65% of
the voting stock and 100% of the non-voting
stock of such newly formed subsidiary shall
be pledged to secure the Credit Facilities
(the capital of such subsidiary being
structured so that substantially all of the
equity interest therein will be owned by the
holders of the non-voting stock).
All the above-described pledges, security
interests and mortgages shall be created on
terms, and pursuant to documentation,
reasonably satisfactory to the Lenders and,
subject to limited exceptions to be agreed
upon, none of the Collateral shall be
subject to any other pledges, security
interests or mortgages.
Interest Rates and Fees: The interest rate under the Credit
- ------------------------ Facilities will be, at the Borrower's
option, (i) Adjusted LIBOR plus the
Applicable Margin or (ii) the Base Rate plus
the Applicable Margin. The Applicable Margin
for the Revolving Credit Facility and the
Tranche A Facility will be determined by a
grid based on Total Borrower Debt to EBITDA
and will initially be (a) 187.5 basis points
for Adjusted LIBOR loans and (b) 87.5 basis
points for Base Rate loans. The Applicable
Margin for the Tranche B Facility will be
(a) 212.5 basis points for Adjusted LIBOR
loans and (b) 112.5 basis points for Base
Rate Loans.
The Borrower may elect interest periods of
1, 3 or 6 months for LIBOR borrowings, as
long as no interest period extends beyond
the Termination Date. Calculation of
interest shall be on the basis of the actual
number of days elapsed in a 360-day year and
interest shall be payable at the end of each
interest period and, in any event, at least
every three months. Adjusted LIBOR will at
all times include statutory reserves.
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
Commitment fees on the undrawn portion of
the Revolving Credit Commitment will be
determined by a grid based on Total Borrower
Debt to EBITDA and will initially be 0.50%
per annum. Commitment fees will accrue from
the Closing Date and be payable quarterly in
arrears and upon the termination of any
commitment, in each case for the 360-day
year.
During the continuance of any payment
default or any Event of Default, interest
will accrue at the applicable interest rate
plus 2.0% per annum.
The definitive documentation for the Credit
Facilities (the "Credit Documents") will
include customary protective provisions for
such matters as increased costs, funding
losses, illegality, capital adequacy, taxes
and "breakage" costs.
Mandatory Usual for facilities and transactions of
- --------- this type and others to be agreed upon,
Prepayments and including, but not limited to, prepayment
- --------------- with agreed-upon percentages of excess cash
Reductions in flow and net proceeds from asset sales,
- ------------- warranty or insurance claims and any debt or
Commitments: equity securities issuances. Under certain
- ------------ circumstances to be agreed upon, mandatory
prepayments with excess cash flow or
proceeds from asset sales, debt or equity
securities issuances will not apply.
Prepayments will be applied toward
amortization payments (in inverse order of
maturity) pro rata between the Term Loan
Facilities prior to application toward the
Revolving Credit Facility; provided that
Lenders under the Tranche B Facility may
waive any prepayment, in which case, the
waived portion of any such prepayment will
be allocated to the Tranche A Facility
before allocation toward the Revolving
Credit Facility.
Voluntary Prepayments Loans under the Term Loan Facilities may be
- --------------------- prepaid at any time in whole or in part at
and Reductions in the option of the Borrower, in a minimum
- ----------------- principal amount and in multiples to be
Commitments: agreed upon, without premium or penalty
- ------------ (except breakage costs). Such prepayments
will be applied toward amortization payments
(in inverse order of maturity) pro rata
between the Term Loan Facilities.
The unutilized portion of the Revolving
Credit Commitment may be reduced at any time
at the option of the Borrower and loans may
be repaid at any time at the option of the
Borrower, in a minimum principal amount,
without premium or penalty (except breakage
costs).
</TABLE>
12
<PAGE>
<TABLE>
<S> <C>
Conditions Precedent Usual for facilities and transactions of
- -------------------- this type and others to be agreed upon,
to Initial Extension including, but not limited to, interest rate
- -------------------- and foreign currency hedging strategy and
of Credit: the conditions set forth on Annex II.
- ----------
Conditions to All Each extension of credit under the Credit
- ----------------- Facilities will be subject to the (i)
Extension of Credit: absence of any Default or Event of Default,
- -------------------- (ii) continued accuracy of representations
and warranties (except representations and
warranties which are made only as of a prior
date) and (iii) absence of any material
adverse change with respect to the financial
condition, operations, assets or prospects
of Holdings, the Borrower and their
subsidiaries, taken as a whole, or their
respective abilities to perform their
obligations under the Credit Documents.
Representations and Usual for facilities and transactions of
- ------------------- this type and others to be agreed upon,
Warranties: including, but not limited to, accuracy of
- ----------- financial statements and information; no
material adverse change; absence of
litigation; no violation of agreements or
instruments; compliance with laws; payment
of taxes; ownership of properties; solvency;
effectiveness of regulatory, approvals
(including FCC licenses); labor matters;
subject to the second paragraph under
"Security" above, the licenses for all
Puerto Rican operations shall be held by
corporations incorporated in one of the 50
states of the United States; and
environmental matters.
Affirmative Covenants: Usual for facilities and transactions of
- ---------------------- this type and others to be agreed upon,
including, but not limited to, maintenance
of corporate existence and rights;
performance of obligations; delivery of
audited financial statements, other
financial information and notices of default
and litigation; maintenance of properties in
good working order; maintenance of
insurance; compliance with laws; inspection
of books and properties; further assurances;
payment of taxes; and segregation of each
material FCC license in separate
subsidiaries (the "License Subsidiaries").
Negative Covenants: Usual for facilities and transactions of
- ------------------- this type and others to be agreed upon,
including, but not limited to, limitations
on dividends on, and redemptions and
repurchases of, capital stock (other than
Debentures to the extent that certain tests
to be agreed upon are met); limitations on
prepayments, redemptions or repurchases of
debt; limitations on liens and
</TABLE>
13
<PAGE>
<TABLE>
<S> <C>
sale-leaseback transactions; limitations on
loans and investments; limitations on
preferred stock and debt issuances;
limitations on mergers, acquisitions and
asset sales; limitations on transactions
with affiliates, including transfers of
licenses to non-United States affiliates
(but subject to the second paragraph under
"Security" above); limitations on dividend
and other restrictions affecting
subsidiaries; limitations on issuance of
subsidiary capital stock; limitations on
changes in business; limitations on
amendment of debt and other material
agreements; limitations on capital
expenditures; and maintenance of the passive
holding company nature of Holdings.
Selected Financial Usual for facilities and transactions of
- ------------------ this type and others to be agreed upon,
Covenants: including, but not limited to, (i) maximum
- ---------- ratio of Total Debt of Borrower to EBITDA,
(ii) maximum ratio of Senior Debt of
Borrower to EBITDA, (iii) minimum ratio of
EBITDA to Interest Expense of Borrower and
(iv) minimum ratio of EBITDA to fixed
charges of Borrower.
Events of Default: Usual for facilities and transactions of
- ------------------ this type and others to be agreed upon,
including, but not limited to, nonpayment of
principal, interest, fees or letter of
credit reimbursement obligations; violation
of covenants; incorrectness of
representations and warranties in any
material respect; cross default and cross
acceleration; bankruptcy; material
judgments; ERISA; actual or asserted
invalidity of the guarantees or the security
documents; Chance of Control (defined as
reduction of the ownership of the Sponsors
in the aggregate or of Liberty or SPE in the
Company to below minimum levels to be agreed
upon); and termination, nonrenewal or
renewal on material adverse terms of any
material FCC license or, if renewal thereof
shall have been applied for, the non-renewal
or renewal on material adverse terms of any
other FCC license.
Assignments and Lenders will be permitted to assign loans
- --------------- and commitments to other Lenders (or their
Participations: affiliates) without restriction, or to other
- --------------- financial institutions with the consent of
the Administrative Agent and the Borrower,
which is not to be unreasonably withheld.
The Administrative Agent will receive a
customary processing and recordation fee,
payable by the assignor and/or the assignee,
with each assignment. Assignments will be by
novation.
</TABLE>
14
<PAGE>
<TABLE>
<S> <C>
Lenders will be permitted to participate in
loans and commitments to other financial
institutions without restriction. Voting
rights of participants shall be limited to
matters in respect of (i) reductions of
principal, interest or fees; (ii) extensions
of maturity; and (iii) certain releases of
collateral or guarantees.
Expenses and All out-of-pocket expenses of the Lenders
- ------------ for enforcement costs and documentary taxes
Indemnification associated with the Credit Facility are to
- --------------- be paid by the Borrower.
The Borrower and the guarantors will,
jointly and severally, indemnify the
Arrangers, the Administrative Agent, the Co-
Syndication Agents, the Documentation Agent,
the Lenders and their respective officers,
directors, employees, affiliates, agents and
controlling persons and hold them harmless
from and against all costs and expenses
(including fees, disbursements and other
charges of counsel) and all liabilities of
any such indemnified person arising out of
or relating to any claim or any litigation
or other proceedings (regardless of whether
any such indemnified person is a party
thereto) that relate to the Credit Documents
or any documents related thereto, any
extension of credit thereunder, the
Transactions or any transactions connected
therewith; provided, however, that no
indemnified person will be indemnified for
costs, expenses or liabilities determined by
a court of competent jurisdiction in a final
non-appealable judgment to have resulted
from its own gross negligence or willful
misconduct.
Governing Law
- -------------
and Forum: New York.
- ----------
Waiver of Jury Trial: In customary form.
- ---------------------
Counsel to Agent: Dewey Ballantine LLP.
- -----------------
</TABLE>
15
<PAGE>
Annex I
Sources and Uses of Funds/a/
(in millions of U.S. dollars)
(all figures are approximate)
<TABLE>
<CAPTION>
Source of Funds Uses of Funds
--------------- -------------
<S> <C> <C> <C>
Credit Facilities $319.4/b//c/ Acquisition $526.6
Assumed Capital Leases 5.6 Option Proceeds (25.0)/c/
------
501.6
Debentures 100.0/d/ Assumed Capital Leases 5.6
Equity Contribution 267.1 Refinancing 192.0
Network Sale 67.1 Fees and Expenses 60.0
------ ------
Total Sources $759.2 Total Uses $759.2
====== ======
</TABLE>
____________________
/a/ Does not include Refinancing to Target W/C Facility.
/b/ Excludes additional availability of $30.6 million under the Revolving
Credit Facility.
/c/ The Company, at its option, may replace up to $25.0 million of borrowings
under the Credit Facilities used to fund the Transactions with additional
proceeds from issuance of the Debentures.
/d/ Reflects cashless exercise.
16
<PAGE>
Annex II
CONDITIONS
----------
The commitments of Credit Suisse First Boston ("CSFB") and Canadian
----
Imperial Bank of Commerce ("CIBC" and, together with CSFB, the "Arrangers")
---- ---------
pursuant to the Senior Secured Credit Facilities Commitment Letter dated
November 23, 1997 (the "Commitment Letter"), between the Arrangers, on the one
-----------------
hand, and Apollo Investment Fund III, Liberty Media Corporation, Sony Pictures
Entertainment Inc. and Bastion Capital Fund, L.P., on the other hand, shall be
subject to the following conditions (capitalized terms used but not defined
herein shall, unless otherwise specified, have the meanings assigned to such
terms in the Commitment Letter):
(i) Liberty and SPE together shall own (through Holdings) not less
than 49.9% of the economic interests of Target and Holdings shall own 100%
of the capital stock of Newco;
(ii) after the date of the Commitment Letter, no information or other
matter relevant to the Transactions becomes known to the Arrangers that the
Arrangers in good faith believe is inconsistent in a material and adverse
manner with (a) any information or other matter relevant to the
Transactions disclosed to the Arrangers prior to the date of the Commitment
Letter or (b) any information in or other matter relevant to the
Transactions obtained by the Arrangers during their due diligence
investigation;
(iii) there shall not have occurred, exist or become known to the
Arrangers any event, condition or change in or affecting the Company that,
singly or in the aggregate, could reasonably be expected to have a Material
Adverse Effect;
(iv) the preparation, execution and delivery of definitive
documentation satisfactory to the Arrangers, in connection with the Credit
Facilities;
(v) each of the Transactions shall have been consummated or shall be
consummated simultaneously on the Closing Date;
(vi) the definitive agreement relating to the acquisition shall be
substantially the same as the draft Agreement and Plan of Merger by and
among TLMD Station Group, Inc., TLMD Acquisition Co. and Telemundo Group,
Inc. delivered to Arrangers on the date hereof; the affiliation agreement
between the Company and the Network ("Affiliation Agreement") shall be as
---------------------
described on the summary thereof delivered to Arrangers on the date hereof;
the Arrangers shall be reasonably satisfied with any operating agreements
of the Company; and the Arrangers shall be reasonably satisfied as of the
Closing Date that the definitive documentation with respect to each of the
Transactions is consistent with, and sets forth the transactions
contemplated by, the term sheet to which this Annex II is attached;
17
<PAGE>
(vii) the Arrangers shall be reasonably satisfied as to the amount
and nature of any environmental and employee health and safety exposures to
which the Company may be subject, and the plans of the Company with respect
thereto (it being understood that satisfaction with the review of Phase I
environmental assessment reports, which shall be concluded prior to
December 23, 1997 (and any follow-up investigations thereto) shall
constitute satisfaction with such matters);
(viii) all requisite governmental authorities (including the FCC and
any antitrust or banking authorities in the Applicable Jurisdictions or any
other relevant jurisdiction) and third parties shall have approved or
consented to the Transactions and the other transactions contemplated by
the Commitment Letter to the extent required, in each case to the extent
failure to obtain such consent or approval, singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, and there
shall be no governmental or judicial action, actual or threatened, that has
a reasonable likelihood of materially restraining, preventing or imposing
burdensome conditions on the Transactions or the other transactions
contemplated hereby (it being understood that FCC approval shall be deemed
to have been obtained upon receipt of an initial favorable ruling from the
FCC unless the Arrangers in good faith believe that such initial ruling is
reasonably uncertain to become final and non-appealable);
(ix) the Arrangers shall have received an opinion (and related
going-concern valuation) reasonably satisfactory in all respects to the
Arrangers, as applicable, from an independent valuation firm reasonably
satisfactory to the Arrangers, in each case to the effect that, after
giving effect to the Transactions, neither Target nor the Company will (a)
be insolvent, (b) be rendered insolvent by the indebtedness incurred in
connection therewith, (c) be left with unreasonably small capital with
which to engage in its business or (d) have incurred debts beyond its
ability to pay such debts as they mature;
(x) after giving effect to the Transactions and the affiliation
agreements to be entered into in connection therewith, the ratio of (a)
consolidated total debt of the Company (excluding the Debentures) as of the
Closing Date to (b) EBITDA of the Company (calculated with such adjustments
which result from the sale of the Network and the execution of the
Affiliation Agreement and are reflected in the business plan previously
provided to the Arrangers and such other adjustments as may be agreed to by
the parties) for the twelve-month period ending with the fiscal quarter
immediately preceding the Closing Date shall not be greater than 7.0x;
(xi) after giving effect to the Transactions and the affiliation
agreements to be entered into in connection therewith, the ratio of (a)
consolidated total debt and preferred stock of the Company as of the
Closing Date to (b) EBITDA of the Company (calculated with such adjustments
which result from the sale of the Network and the execution of the
Affiliation Agreement and are reflected in the business plan previously
provided to the Arrangers and such other adjustments as may be agreed to by
the parties) for the twelve-month period ending with the fiscal quarter
immediately preceding the Closing Date shall not be greater than 9.75x;
18
<PAGE>
(xii) the Arrangers shall be satisfied that, following the
Transactions, the Company will have not less than $25.0 million (subject to
reduction to reflect seasonal working capital needs of the Target) of
availability under the Revolving Credit Facility for working capital
purposes;
(xiii) customary closing conditions for transactions similar to the
Credit Facilities, as applicable, including, without limitation, (a) the
accuracy of all representations and warranties, (b) the absence of any
defaults, prepayment events or creation of liens under debt instruments or
other agreements as a result of the Transactions and the other transactions
contemplated by the Commitment Letter, (c) the absence of any material
change in the capital, corporate and organizational structure of the
Company (d) first-priority perfected security interests in the Collateral,
(e) compliance with applicable laws and regulations (including employee
health and safety, margin regulations and environmental laws), (f)
obtaining evidence of reasonably satisfactory insurance, (g) evidence of
authority, (h) consents of all relevant persons, and (i) the receipt by the
Arrangers of reasonably satisfactory legal opinions (including as to
perfection of security interests in the Collateral and as to FCC licenses
and FCC approvals);
(xiv) there shall not have occurred after the date of the Commitment
Letter (a) any general suspension (other than temporary "circuit breakers")
of trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in any Applicable
Jurisdiction, (b) the declaration of a banking moratorium or any suspension
of payments in respect of banks in any Applicable Jurisdiction, (c) the
commencement of a war, armed hostilities or other international or national
calamity or emergency, directly or indirectly involving any Applicable
Jurisdiction, which makes it, in the Arrangers' discretion, impracticable
or inadvisable to provide the Credit Facilities, (d) any limitations
(whether or not mandatory) imposed by any governmental authority on the
nature or extension of credit or further extension of credit by banks or
other lending institutions, which makes it, in the Arrangers' discretion,
impracticable or inadvisable to provide the Credit Facilities, (e) in the
case of the foregoing clauses (c) and (d), a material escalation or
worsening thereof, which makes it, in the Arrangers' discretion,
impracticable or inadvisable to provide the Credit Facilities, or (f) any
other material adverse change in banking or capital market conditions that
has had or reasonably could have a material adverse effect on the
syndication of leveraged bank credit facilities that the Arrangers shall
reasonably determine makes it impracticable to consummate the syndication
of the Credit Facilities, prior to the terminations of the marketing period
with respect thereto;
(xv) the receipt by the Arrangers on or before the Closing Date, of
financial statements of the Company (including notes thereto), consisting
of (a) audited balance sheets as of December 31, 1996 and 1997, (b) audited
statements of operations, cash flows and stockholders' equity for each of
the three fiscal-years ending December 31, 1995, 1996 and 1997, (c)
consolidated and consolidating financial statements for each of the three
fiscal years ending December 31, 1995, 1996 and 1997 and supporting
19
<PAGE>
documentation satisfactory to the Arrangers, (d) comparable unaudited
financial statements covering all quarterly or other appropriate periods
subsequent to January 1, 1998 (and for comparable periods in the preceding
year), and (e) pro forma balance sheet as of the end of the fiscal quarter
immediately preceding the Closing Date and pro forma statements of
operations and cash flows for the year ending December 31, 1997 and the
period from January 1, 1998 to the end of the fiscal quarter immediately
preceding the Closing Date (it being understood that if the Closing Date
shall be prior to March 15, 1998, the Company shall provide financial
statements for only those periods as would be required for a public
offering registered under the Securities Act of 1933, as amended (the
"Securities Act"); all such financial statements, historical or pro forma,
---------------
delivered pursuant to this paragraph (xiv) shall be in compliance with the
requirements of Regulation S-X for a public offering registered under the
Securities Act and shall not be materially inconsistent with financial
statements previously provided to the Arrangers; and
(xvi) payment of fees and expenses, including reasonable fees and
expenses of the Arrangers' counsel.
"Material Adverse Effect" shall mean a material adverse effect on (i)
-----------------------
the business, results of operations, financial condition or prospects of Target
and its subsidiaries taken as a whole or the Company and its subsidiaries taken
as a whole or (ii) the validity or enforceability of any of the documents
entered into in connection with the Transactions or the other transactions
contemplated by the Commitment Letter or the rights, remedies and benefits
available to the parties thereunder.
"Applicable Jurisdiction" means the United States and New York State.
-----------------------
20
<PAGE>
EXHIBIT (c)(5)
CREDIT SUISSE FIRST BOSTON CORPORATION CIBC OPPENHEIMER CORP.
Eleven Madison Avenue 425 Lexington Avenue
New York, NY 10010 New York, New York 10017
November 23, 1997
Apollo Investment Fund III
1301 Avenue of the Americas
NewYork, NY 10019
Attn: Edward Yorke
Liberty Media Corporation
8101 East Prentice Avenue
Suite 500
Englewood, CO 80111
Attn: David Koff
Sony Pictures Entertainment Inc.
10202 West Washington Boulevard
Culver City, CA 90232-3195
Attn: Yair Landau
Bastion Capital Fund, L.P.
1999 Avenue of the Stars
Suite 2960
Los Angeles, California 90067
Attn: Guillermo Bron
Senior Discount Debentures
--------------------------
Commitment Letter
-----------------
Ladies and Gentlemen:
You have advised Credit Suisse First Boston Corporation ("CSFBC") and
-----
CIBC Oppenheimer Corp. ("CIBC" and, together with CSFBC, "we", "us" or the
---- -- --
"Arrangers") that Apollo Investment Fund III ("Apollo"), Liberty Media
--------- ------
Corporation ("Liberty"), Sony Pictures Entertainment Inc. ("SPE") and Bastion
------- ---
Capital Fund, L.P. ("Bastion" and, together with Apollo, Liberty and SPE, the
-------
"Sponsors" or "you") intend to form a company ("Holdings") that will, through a
-------- --- --------
newly formed wholly owned subsidiary ("Newco"), acquire (the "Acquisition") all
----- -----------
of the outstanding capital stock of Telemundo Group, Inc. ("Target"). In
------
connection with the Acquisition, Target will refinance (the "Refinancing")
-----------
$192.0 million aggregate principal amount of its 7/10 1/2% Senior Notes due
2006 and its existing $20.0 million working capital facility
<PAGE>
(the "Target W/C Facility"). References to the "Company" mean Holdings and its
-------------------
subsidiaries after giving effect to the Acquisition and the Network Sale (as
defined).
You have advised us that the total funds necessary to consummate the
Acquisition and the Refinancing and to pay related fees and expenses will be
approximately $753.6 million (excluding the assumption of $5.6 million in
capital leases) plus any amounts then outstanding under the Target W/C Facility.
(The approximate sources and uses of the funds necessary to consummate the
Transactions are set forth on Annex I to the Summary of Principal Terms and
-------
Conditions attached hereto as Exhibit A (the "Term Sheet")). Such funds will be
--------- ----------
provided by (i) a cash common equity contribution to Holdings of not less than
$267.1 million from the Sponsors (with Apollo and Bastion contributing 50.1% and
Liberty and SPE contributing the balance), which is contributed to Newco as
common equity (the "Equity Contribution"), (ii) the issuance and sale by
-------------------
Holdings of senior discount debentures (the "Debentures") for gross proceeds of
----------
not less than $100.0 million and not more than $125.0 million, which proceeds
are contributed to Newco as common equity, (iii) borrowings of $319.4 million by
Newco under senior secured credit facilities aggregating $350.0 million (the
"Credit Facilities"); provided, however, as Borrower may elect upon closing, the
----------------- -------- -------
amount by which gross proceeds of the Debentures exceed $100.0 million shall (a)
reduce the amount of the Tranche A of the Credit Facilities or (b) be
contributed as equity to Target and utilized to repay funded debt thereof, and
(iv) the concurrent sale (the "Network Sale") by Target to Liberty and SPE of
------------
its Spanish-language television network (the "Network") for not less than $67.1
-------
million. The (a) Acquisition, (b) Refinancing, (c) Equity Contribution, (d)
issuance and sale of the Debentures, (e) initial borrowings under the Credit
Facilities, and (f) Network Sale are collectively referred to herein as the
"Transactions."
------------
Reference is made to the engagement letter dated the date hereof
between you and the Arrangers (the "Engagement Letter"). Pursuant to the
-----------------
Engagement Letter, you have agreed to engage the Arrangers to act as
underwriters, initial purchasers or placement agents in connection with the sale
of the Debentures pursuant to a public or private offering (the "Debenture
---------
Offering"). You have received from us (or one of our affiliates), by a separate
- --------
letter, a commitment with respect to the Credit Facilities.
The Arrangers hereby commit to underwrite, place or purchase, upon the
terms and subject to the conditions as set forth or referred to in the Term
Sheet (together with this letter, the "Commitment Letter"), Debentures for
-----------------
aggregate gross proceeds in an amount you designate, which shall be not less
than $100.0 million and not greater than $125.0 million (but in any event not
greater than 50% of the aggregate net proceeds to Newco of the Equity
Contribution). The Company will use its commercially reasonable best efforts to
issue the Debentures in an underwritten public offering or private placement
pursuant to Rule 144A under the Securities Act of 1933 prior to any purchase by
the Arrangers. The underwriting, placement or purchase of the Debentures shall
take place as of the date of the consummation of the Transactions, which date
will be designated to us in writing by you no later than five days prior to such
date.
2
<PAGE>
As consideration for the Arrangers' commitment hereunder and agreement
to perform the services described herein, you agree, jointly and severally, to
pay to the Arrangers the nonrefundable fees set forth in the Term Sheet and in
the Senior Discount Debentures Fee Letter dated the date hereof and delivered
herewith (the "Fee Letter").
----------
In the event of an underwriting or placement of the Debentures, you
agree to cause the Company to enter into an underwriting or placement agency
agreement in the form customarily utilized by the Arrangers. We may syndicate
the purchase of the Debentures to a group of financial institutions (together
with the Arrangers, the "Purchasers") identified by us in consultation with you.
----------
If so, the Arrangers intend to commence syndication efforts promptly upon the
execution of this Commitment Letter, and each of you agrees to assist the
Arrangers in completing a syndication satisfactory to them. Such assistance
shall include (i) each of you using commercially reasonable efforts to ensure
that the syndication efforts benefit materially from your respective existing
lending relationships, (ii) direct contact between your respective senior
management and advisors and the proposed Purchasers (and each of you using your
best efforts to cause direct contact between senior management and advisors of
the Company and the proposed Purchasers), (iii) assistance in the preparation of
a Confidential Information Memorandum and other marketing materials to be used
in connection with the syndication and (iv) the hosting, with the Arrangers, of
one or more meetings with prospective Purchasers. The Arrangers will manage all
aspects of any syndication, including decisions as to the selection of
institutions to be approached and when they will be approached, when their
commitments will be accepted, which institutions will participate, what titles
(if any) they will be awarded, the allocations of the commitments among the
Purchasers and the amount and distribution of fees among the Purchasers.
To assist the Arrangers in any underwriting, placement, purchase or
syndication efforts, each of you agrees to promptly prepare and provide to the
Arrangers all information with respect to the Company and the Transactions and
the other transactions contemplated hereby, including all financial information
and projections (the "Information"), as we may reasonably request. Each of you
-----------
hereby represents and covenants that (i) all written information other than the
Projections (the "Information") that has been or will be made available to the
-----------
Arrangers by any of you or your representatives in connection with the
Transactions is or will be complete and correct in all material respects and
does not or will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such
statements are made and (ii) the Projections that have been or will be made
available to the Arrangers by any of you or your representatives in connection
with the Transactions have been or will be prepared in good faith based upon
what you believe to be reasonable assumptions. Each of you agrees to supplement
the Information and the Projections from time to time until the completion of
the syndication so that the representation and covenant in the preceding
sentence remain correct without regard to when such Information and Projections
were furnished. You understand that in any underwriting, placement, purchase or
syndication we may use and rely on the Information and Projections without
responsibility for independent verification thereof.
3
<PAGE>
You hereby agree, jointly and severally, (i) to indemnify and hold
harmless each of CSFB and its affiliates and the respective officers, directors,
employees, advisors and agents of each (each, a "CSFB Indemnified Person") and
-----------------------
CIBC and its affiliates and the respective officers, directors, employees,
advisors and agents of each (each, a "CIBC Indemnified Person", and, together
-----------------------
with a CSFB Indemnified Person, the "indemnified persons") from and against any
-------------------
and all losses, claims, damages and liabilities to which any such indemnified
person may become subject arising out of or in connection with this Commitment
Letter, any offering, underwriting, placement, purchase or syndication of the
Debentures, the use of the proceeds thereof, the Transactions or any related
transaction or any claim, litigation, investigation or proceeding relating to
any of the foregoing, regardless of whether any indemnified person is a party
thereto, and to reimburse each indemnified person upon demand for any reasonable
legal or other expenses incurred in connection with investigating or defending
any of the foregoing; provided, however, that with respect to a CSFB Indemnified
-------- -------
Person or a CIBC Indemnified Person, as the case may be, the foregoing indemnity
will not apply to losses, claims, damages, liabilities or related expenses to
the extent they are found by the final non-appealable judgment of a court of
competent jurisdiction to arise from the willful misconduct or gross negligence
of any CSFB Indemnified Person or CIBC Indemnified Person, respectively, and
(ii) to reimburse the Arrangers and their respective affiliates on demand for
all reasonable out-of-pocket expenses (including due diligence expenses,
syndication expenses, consultants' fees and expenses, travel expenses, and
reasonable fees, charges and disbursements of counsel) incurred in connection
with any offering, underwriting, placement, purchase or syndication of the
Debentures and any related documentation (including, without limitation, this
Commitment Letter, the Fee Letter and the definitive financing documentation) or
the administration, amendment, modification or waiver thereof. No indemnified
person shall be liable for or entitled to any indirect or consequential damages
in connection with its activities related to any offering, underwriting,
placement, purchase or syndication of the Debentures.
Promptly after receipt by an indemnified person of notice of the
commencement of any Proceedings, such indemnified person will, if a claim in
respect thereof is to be made against you, notify, you in writing of the
commencement thereof; provided, however, that the omission so to notify you will
-------- -------
not relieve you from any liability which you may have hereunder except to the
extent you have been materially prejudiced by such failure. In case any such
Proceedings are brought against any indemnified person and it notifies you of
the commencement thereof, you will be entitled to participate therein, and, to
the extent that you may elect by prior written notice delivered to such
indemnified person, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified person; provided, however, that if the
-------- -------
defendants in any such Proceedings include both such indemnified person and one
or more of you and such indemnified person shall have concluded that there may
be legal defenses available to it which are different from or additional to
those available to you, such indemnified person shall have the right to select
separate counsel to assert such legal defenses and to otherwise participate in
the defense of such Proceedings on behalf of such indemnified person. Upon
receipt of notice from you to such indemnified person of your election so to
assume the defense of such Proceedings and approval by such indemnified person
of counsel, you shall not be liable to such indemnified person for expenses
incurred by such indemnified person in connection with the defense thereof
(other than reasonable costs of investigation) unless (i) such indemnified
4
<PAGE>
person shall have employed separate counsel in connection with the assertion of
legal defenses in accordance with the proviso to the preceding sentence, (ii)
you shall not have employed counsel reasonably satisfactory to such indemnified
person to represent such indemnified person within a reasonable time after
notice of commencement of the Proceedings or (iii) you shall have authorized in
writing the employment of counsel for such indemnified person.
This Commitment Letter and the Arrangers' commitment hereunder shall
not be assignable by any of you without the prior written consent of the
Arrangers (and any purported assignment without such consent shall be null and
void), are intended to be solely for the benefit of the parties hereto are not
intended to confer any benefits upon, or create any rights in favor of, any
person other than the parties hereto. This Commitment Letter may not be amended
or waived except by an instrument in writing signed by each of you and the
Arrangers. This Commitment Letter may be executed in any number of counterparts,
each of which shall be an original, and all of which, when taken together, shall
constitute one agreement. Delivery of an executed signature page of this
Commitment Letter by facsimile transmission shall be as effective as delivery of
a manually executed counterpart hereof. This Commitment Letter and the Fee
Letter are the only agreements that have been entered into between us relating
to our commitment with respect to the Debentures and set forth the entire
understanding of the parties with respect thereto.
This Commitment Letter shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
conflicts of laws principles thereof. EACH OF THE PARTIES HERETO IRREVOCABLY
AGREES TO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM
BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS
COMMITMENT LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER. Each of you
irrevocably and unconditionally submits to the exclusive jurisdiction of any
state or federal court sitting in the City of New York over any suit, action or
proceeding arising out of or relating to this Commitment Letter. Service of any
process, summons, notice or document by registered mail addressed to a Sponsor
at its address set forth above shall be effective service of process against
such Sponsor for any such suit, action or proceeding brought in any such court.
Each of you irrevocably and unconditionally waives any objection to the laying
of venue of any such suit, action or proceeding brought in any such court and
any claim that any such suit, action or proceeding has been brought in an
inconvenient forum. A final judgment in any such suit, action or proceeding
brought in any such court may be enforced in any other courts to whose
jurisdiction each of you is or may be subject, by suit upon judgment.
This Commitment Letter is delivered to you on the understanding that
neither this Commitment Letter nor the Fee Letter nor any of their terms or
substance shall be disclosed, directly or indirectly, to any other person except
(i) on a confidential basis to your officers, agents and advisors who are
directly involved in the consideration of this matter or (ii) as may be
compelled in a judicial or administrative proceeding or as otherwise required by
law (in which case you agree to inform us promptly thereof); provided, however,
-------- -------
that you may disclose this Commitment Letter and its terms and substance (but
not the Fee Letter or its terms and substance), on a confidential basis, to
Target and its directors, officers, employees, agents and advisors.
5
<PAGE>
Our commitment will terminate at 5:00 p.m., New York City time, on
December 5, 1997, unless on or prior to such time you sign and return an
enclosed counterparty of this Commitment Letter, the Fee Letter and the
Engagement Letter and, if so accepted on or prior to such time, the commitment
will terminate at 5:00 p.m., New York City time, on the earliest of (i) the
termination of an agreement pursuant to which the Acquisition is to be
consummated or the date the Company consummates, or notifies the Arrangers that
it has elected not to consummate, the Acquisition, (ii) the date of issuance of
the Debentures and (iii) the Drop-Dead Date. The "Drop-Dead Date" shall be June
--------------
30, 1998; provided, however, that so long as the Sponsors and Target have used
-------- -------
their reasonable best efforts to consummate the Transactions on or before June
30, 1998, if the Transactions have not been consummated on or before June 30,
1998 solely because approval of the Federal Communications Commission ("FCC")
---
has not been obtained or the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 shall not have expired or been terminated,
the Arrangers agree to extend the Drop-Dead Date to August 31, 1998. In
addition, the commitment shall terminate in the event that (a) after completion
of a prospectus, offering memorandum or comparable document relating to the
Debenture Offering, the Arrangers shall have delivered a written notice to the
Company recommending that the Company proceed with the marketing effort for the
Debenture Offering and the Company elects (which election shall be made within
one business day following receipt of such notice) not to then proceed with such
marketing effort or (b) following the marketing effort with respect to the
Debenture Offering, (x) the Arrangers are prepared to enter into a customary
underwriting, placement agency or purchase agreement providing for the
underwriting, placement or purchase of the Debentures (and the terms of such
Debentures are consistent in all material respects with the Term Sheet) and (y)
the Company elects not to enter into such agreement or, having entered into such
agreement, the Debenture Offering is not consummated for any reason other than
the failure by the Arrangers to comply with their obligations under such
agreement. The reimbursement, indemnification and confidentiality provisions
contained herein and in the Fee Letter shall remain in full force and effect
regardless of whether definitive financing documentation shall be executed and
delivered and notwithstanding the termination of this Commitment Letter or the
Arrangers' commitment hereunder; provided, however, that the Sponsors'
-------- -------
obligations, liabilities and representations hereunder and thereunder shall
terminate upon the closing of the transactions contemplated hereby and thereby.
If the foregoing correctly sets forth our agreement, please indicate
your acceptance of the terms hereof and of the Fee Letter by returning to us
executed counterparts hereof and of the Fee Letter.
6
<PAGE>
The Arrangers are pleased to have been given the opportunity to assist
you in connection with this important financing.
<TABLE>
<CAPTION>
Very truly yours,
<S> <C>
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Mark Kenelley
-----------------
Name: Mark Kennelley
Title: Managing Director
CIBC OPPENHEIMER CORP.
By: /s/
-----------------
Name:
Title:
Accepted and agreed to as of
the date first written above by:
APOLLO INVESTMENT FUND III BASTION CAPITAL FUND, L.P.
By: Apollo Advisors II, L.P., By: Bastion Partner, L.P.,
its General Partner its General Partner
By: Apollo Capital Management II, Inc., By: Bron Corp.,
its General Partner its General Partner
By: /s/ Edward Yorke By: /s/ Guillermo Bron
------------------------- -------------------------
Edward Yorke Guillermo Bron
Vice President President
LIBERTY MEDIA CORPORATION SONY PICTURES ENTERTAINMENT INC.
By: /s/ David Koff By: /s/ Yair Landau
------------------------- ---------------------------------
Name: David Koff Name: Yair Landau
Title: Vice President Title: Executive Vice President
</TABLE>
7
<PAGE>
EXHIBIT A
CONFIDENTIAL
November 23, 1997
Senior Discount Debentures
--------------------------
Summary of Principal Terms and Conditions
-----------------------------------------
<TABLE>
<S> <C>
Issuer: A corporation ("Holdings") to be formed by Apollo
Investment Fund III, Liberty Media Corporation, Sony Pictures Entertainment Inc.
and Bastion Capital Fund, L.P. to acquire (the "Acquisition")
Telemundo Group, Inc. ("Target").
Initial Purchasers/ Credit Suisse First Boston Corporation ("CSFBC") and CIBC
- ------------------- Oppenheimer Corp. ("CIBC" and, together with CSFB, the
Underwriters/Placement "Arrangers").
- ----------------------
Agents:
- ------
Book-Running Managers: CSFBC, whose name shall appear on the left side of any
- --------------------- prospectus, offering circular or similar document, and CIBC.
Type of Securities: Senior Discount Debentures (the "Debentures").
- ------------------
Amount: Not less than $100.0 million and not more than $125.0 million
- ------ aggregate gross proceeds.
Maturity: Ten years.
- --------
Guarantees: None.
- ----------
Ranking: The Debentures will be general unsecured obligations of Holdings,
- ------- ranking pari passu in right of payment with all unsecured
unsubordinated obligations of Holdings and senior in right of
payment to all debt of Holdings that is expressly subordinated to
the Debentures.
Yield/Interest: The Debentures will be issued at a substantial discount from
- -------------- their principal amount at maturity and will accrete to par by the
end of the fifth year. Thereafter, interest will accrue and be
payable in cash semiannually. The yield (the "Discount Debenture
Yield") will equal the greater of (a) 12 1/2% and (b) the sum of
(x) the yield on the Treasury Note maturing on the tenth
anniversary of the day immediately preceding the issue date (or,
if no Treasury Note matures on such date, the yield determined by
linear interpolation of the yields on the Treasury Notes maturing
immediately prior to and immediately following such date) plus
(y) 650 basis points (calculated on a semi-annual bond equivalent
basis).
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
Use of Proceeds: On the date of closing of the Acquisition (the "Closing Date"),
- --------------- proceeds from the issuance and sale by Holdings of Debentures for
gross proceeds of not less than $100.0 million and not more than
$125.0 million which proceeds are contributed to Newco as common
equity, will be used to finance, in part, the Acquisition and the
Refinancing and to pay related fees and expenses. The additional
funds necessary to consummate the Acquisition and the Refinancing
will be provided by (i) a cash common equity contribution to
Holdings of not less than $267.1 million from the Sponsors (with
Apollo and Bastion contributing 50.1% and Liberty and SPE
contributing the balance), which is contributed to Newco as
common equity (the "Equity Contribution"), (ii) borrowings of
$319.4 million by Newco under senior secured credit facilities
aggregating $350.0 million (the "Credit Facilities"); provided,
however, that, as Borrower may elect upon closing, the amount by
which gross proceeds of the Debentures exceed $100.0 million
shall (a) reduce the amount of the Tranche A Facility or (b) be
utilized to repay funded debt thereof, and (iii) the concurrent
sale (the "Network Sale") by Target to Liberty and SPE of its
Spanish-language television network (the "Network") for not less
than $67.1 million. The approximate sources and uses of the
funds necessary to consummate the Transactions are set forth on
Annex I.
The (a) Acquisition, (b) Refinancing, (c) issuance and sale of
the Debentures, (d) Equity Contribution, (e) initial borrowings
under the Credit Facilities and (f) Network Sale are referred to
herein as the "Transactions."
Mandatory Redemption: No sinking fund requirement.
- --------------------
Optional Redemption: Non-callable for five years. Redeemable beginning in the sixth
- ------------------- year at a premium (declining to par at the end of the eighth year
after the issue date), plus accrued and unpaid interest.
Optional Equity During the first three years, redeemable at a premium of the
- --------------- accredited value with the proceeds of one or more public common
Redemption: equity offerings; provided that after such redemption not less
- ---------- than 65% of the aggregate principal amount at maturity of
Debentures originally issued is outstanding.
Change of Control Put: 101%
- ---------------------
Conditions Precedent Usual for transactions of this type and others to be agreed upon,
- -------------------- including the condition set forth in Annex II.
to Purchaser:
- ------------
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
Covenants: Including, but not limited to, limitation on indebtedness and
- --------- subsidiary preferred stock; limitation on restricted payments;
limitation on sales of assets and subsidiary stock; limitation on
dividend and other restrictions affecting subsidiaries;
limitation on mergers, consolidations or transfers of assets;
limitation on transactions with affiliates, including transfers
of licenses to non-United States affiliates; limitation on asset
swaps; reports to holders.
Events of Default: Including, but not limited to, non-payment of principal or
- ----------------- interest, violation of covenants, cross-acceleration and
cross-payment default to other debt in excess of an amount to be
agreed upon, bankruptcy and judgments.
Registration Rights In the event the Debentures are not sold pursuant to an
- ------------------- underwritten public offering, Holdings will file within 60 days
and Cooperation: following the date of issuance (the "Issue Date") of the
- --------------- Debentures, and will use all reasonable efforts to cause to
become effective as soon thereafter as practicable, an exchange
offer registration statement (if not prohibited by the SEC) with
respect to a registered offering to exchange the Debentures for
debentures (the "Exchange Debentures") which will be identical to
the Debentures except for the absence of certain transfer
restrictions. Promptly after such exchange offer registration
statement is effective, Holdings will offer the Exchange
Debentures in exchange for the Debentures. If such exchange
offer is not so consummated or is prohibited by the SEC, Holdings
will file within 120 days of the Issue Date, and will use all
reasonable efforts to cause to become effective as soon
thereafter as practicable, a shelf registration statement with
respect to resales of the Debentures. Holdings will keep such
shelf registration statement effective and available (subject to
customary exceptions) until it is no longer needed to permit
unrestricted resales of the Debentures by the Arrangers, but in
no event longer than two years from the date of issuance of the
Debentures to the Arrangers. If, within 180 days from the issue
date of the Debentures, a shelf registration statement for
resales of the Debentures has not been declared effective, or, if,
after becoming effective, the shelf registration statement
ceases to be effective or ceases to be useable in connection with
resales of the Debentures (subject to customary exceptions),
interest will accrue and be payable at a rate of 0.5% per annum
at the end of each 90-day period; provided, however, that in no
event shall the interest on the Debentures increase by more than
an aggregate of 2.0% per annum.
Holdings will, at its expense, assist the Arrangers in connection
</TABLE>
10
<PAGE>
<TABLE>
<S> <C>
with resales of any of the Debentures, including making its and
the Company's senior officers available to the Arrangers,
including making them available to assist in the preparation of
marketing materials relating to any resales, to participate in
due diligence sessions and to participate in road shows or other
presentations to prospective purchasers of the Debentures.
Counsel to Arrangers: Dewey Ballantine LLP.
- --------------------
</TABLE>
11
<PAGE>
Annex I
Sources and Uses of Funds/a/
----------------------------
(In millions of U.S. dollars)
(all figures are approximate)
<TABLE>
<CAPTION>
Source of Funds Uses of Funds
--------------- -------------
<S> <C> <C> <C>
Credit Facilities $319.4/b/ /c/ Acquisition $526.6
Assumed Capital
Leases 5.6 Option Proceeds (25.0)/d/
-----
$501.6
Assumed Capital
Debentures 100.0/c/ Leases 5.6
Equity Contribution 267.1 Refinancing 192.0
Network Sale 67.1 Fees and Expenses 60.0
----- -----
Total Sources $759.2 Total Uses $759.2
====== ======
</TABLE>
- ---------------------------------
a Does not include Refinancing to Target W/C Facility.
b Excludes additional availability of 30.6 million under the Revolving Credit
Facility.
c The Company, at its option, may replace up to $25.0 million of borrowings
under the Credit Facilities used to fund the Transactions with additional
proceeds from issuance of the Debentures.
d Reflects cashless exercise.
12
<PAGE>
Annex II
CONDITIONS
The commitments of Credit Suisse First Boston Corporation ("CSFBC")
-----
and CIBC Oppenheimer Corp. ("CIBC" and, together with CSFB, the "Arrangers")
---- ---------
pursuant to the Senior Discount Debentures Commitment Letter dated November 23,
1997 (the "Commitment Letter"), between CSBC, on the one hand, and Apollo
-----------------
Investment Fund III, Liberty Media Corporation, Sony Pictures Entertainment Inc.
and Bastion Capital Fund, L.P., on the other hand, shall be subject to the
following conditions (capitalized terms used but not defined herein shall,
unless otherwise specified, have the meanings assigned to such terms in the
Commitment Letter);
(i) Liberty and SPE together shall own (through Holdings) not less
than 49.9% of the economic interests of Target and Holdings shall own 100%
of the capital stock of Newco;
(ii) after the date of the Commitment Letter, no information or
other matter relevant to the Transactions becomes known to the Arrangers
that the Arrangers in good faith believe is inconsistent in a material and
adverse manner with (a) any information or other matter relevant to the
Transactions disclosed to the Arrangers prior to the date of the Commitment
Letter or (b) any information or other matter relevant to the Transactions
obtained by the Arrangers during their due diligence investigation;
(iii) there shall not have occurred, exist or become known to the
Arrangers any event, condition or change in or affecting the Company that,
singly or in the aggregate, could reasonably be expect to have a Material
Adverse Effect;
(iv) the preparation, execution and delivery of definitive
documentation satisfactory to the Arrangers, in connection with the
offering and sale of the Debentures;
(v) each of the Transactions shall have been consummated or shall be
consummated simultaneously on the Closing Date;
(vi) the definitive agreement relating to the acquisition shall be
substantially the same as the draft Agreement and Plan of Merger by and
among TLMD Station Group, Inc., TLMD Acquisition Co. and Telemundo Group,
Inc., delivered to Arrangers on the date hereof; the affiliation agreement
between the Company and the Network ("Affiliation Agreement") shall be as
---------------------
described on the summary thereof delivered to Arrangers on the date hereof;
the Arrangers shall be reasonably satisfied with any operating agreements
of the Company; and the Arrangers shall be reasonably satisfied as of the
Closing Date that the definitive documentation with respect to each of the
Transactions is consistent with, and sets forth the transactions
contemplated by, the term sheet to which this Annex II is attached;
13
<PAGE>
(vii) The Arrangers shall be reasonably satisfied as to the amount
and nature of any environmental and employee health and safety exposures to
which the Company may be subject, and the plans of the Company with respect
thereto (it being understood that satisfaction with the review of Phase I
environmental assessment reports, which shall be concluded prior to
December 22, 1997 (and any follow-up investigations thereto) shall
constitute satisfaction with such matters);
(viii) all requisite governmental authorities (including the FCC
and any antitrust or banking authorities in the Applicable Jurisdictions or
any other relevant jurisdiction) and third parties shall have approved or
consented to the Transactions and the other transactions contemplated by
the Commitment Letter to the extent required, in each case to the extent
failure to obtain such consent or approval, singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, and there
shall be no governmental or judicial action, actual or threatened, that has
a reasonable likelihood of materially restraining, preventing or imposing
burdensome conditions on the Transactions or the other transactions
contemplated hereby (it being understood that FCC approval shall be deemed
to have been obtained upon receipt of an initial favorable ruling from the
FCC unless the Arrangers in good faith believe that such initial ruling is
reasonably uncertain to become final and non-appealable);
(ix) the Arrangers shall have received an opinion (and related
going-concern valuation) reasonably satisfactory in all respects to the
Arrangers, as applicable, from an independent valuation firm reasonably
satisfactory to the Arrangers, in each case to the effect that, after
giving effect to the Transactions, neither Target nor the Company will (a)
be insolvent, (b) be rendered insolvent by the indebtedness incurred in
connection therewith, (c) be left with unreasonably small capital with
which to engage in its business or (d) have incurred debts beyond its
ability to pay such debts as they mature;
(x) after giving effect to the Transactions and the affiliation
agreements to be entered into in connection therewith, the ratio of (a)
consolidated total debt of the Company (excluding the Debentures) as of the
Closing Date to (b) EBITDA of the Company (calculated with such adjustments
which result from the sale of the Network and the execution of the
Affiliation Agreement and are reflected in the business plan previously
provided to the Arrangers and such other adjustments as may be agreed to by
the parties) for the twelve-month period ending with the fiscal quarter
immediately preceding the Closing Date shall not be greater than 7.0x;
(xi) after giving effect to the Transactions and the affiliation
agreements to be entered into in connection therewith, the ratio of (a)
consolidated total debt and preferred stock of the Company as of the
Closing Date to (b) EBITDA of the Company (calculated with such adjustments
which result from the sale of the Network and the execution of the
Affiliation Agreement and are reflected in the business plan previously
provided to the Arrangers and such other adjustments as may be agreed to by
the parties) for the twelve-month period ending with the fiscal quarter
immediately preceding the Closing Date shall not be greater than 9.75x;
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(xii) the Arrangers shall be satisfied that, following the
Transactions, the Company will have not less than $25.0 million (subject to
reduction to reflect seasonal working capital needs of the Target) of
availability under the Revolving Credit Facility for working capital
purposes;
(xiii) customary closing conditions for transactions similar to the
issuance of the Debentures, including without limitation (a) the accuracy
of all representations and warranties, (b) the absence of any defaults,
prepayments events or creation of liens under debt instruments or other
agreements as a result of the Transactions and the other transactions
contemplated by the Commitment Letter, (c) the absence of any material
change in the capital, corporate and organizational structure of the
Company, (d) compliance with applicable laws and regulations (including
employee health and safety, margin regulations and environmental laws), (e)
obtaining evidence of reasonably satisfactory insurance, (f) evidence of
authority, (g) consents of all relevant persons, and (h) the receipt by the
Arrangers of reasonably satisfactory legal opinions (including as to FCC
licenses and FCC approvals);
(xiv) there shall not have occurred after the date of the
Commitment Letter (a) any general suspension (other than temporary "circuit
breakers") of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in any
Applicable Jurisdiction, (b) the declaration of a banking moratorium or any
suspension of payments in respect of banks in any Applicable Jurisdiction,
(c) the commencement of a war, armed hostilities or other international or
national calamity or emergency, directly or indirectly involving any
Applicable Jurisdiction, which makes it, in the Arrangers' discretion,
impracticable or inadvisable to purchase or resell the Debentures, (d) any
limitation (whether or not mandatory) imposed by any governmental authority
on the nature or extension of credit or further extension of credit by
banks or other lending institutions, which makes it, in the Arrangers'
discretion, impracticable or inadvisable to provide the Credit Facilities
or (e) in the case of the foregoing clauses (c) and (d), a material
escalation or worsening thereof, which makes it, in the Arrangers'
discretion, impracticable or inadvisable to provide the Credit Facilities;
(xv) the receipt by the Arrangers on or before the Closing Date, of
financial statements of the Company (including notes thereto), consisting
of (a) audited balance sheets as of December 31, 1996 and 1997, (b) audited
statements of operations, cash flows and stockholders' equity for each of
the three fiscal-years ending December 31, 1995, 1996 and 1997, (c)
consolidated and consolidating financial statements for each of the three
fiscal years ending December 31, 1995, 1996 and 1997 and supporting
documentation satisfactory to the Arrangers, (d) comparable unaudited
financial statements covering all quarterly or other appropriate periods
subsequent to January 1, 1998 (and for comparable periods in the preceding
year), and (e) pro forma balance sheet as of the end of the fiscal quarter
immediately preceding the Closing Date and pro forma statements of
operations and cash flows for the year ending December 31, 1997 and the
period from January 1, 1998 to the end of the fiscal quarter immediately
preceding the Closing Date (it being understood that if the Closing Date
shall be prior to March 15,
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1998, the Company shall provide financial statements for only those periods
as would be required for a public offering registered under the Securities
Act of 1933, as amended (the "Securities Act") all such financial
--------------
statements, historical or pro forma, delivered pursuant to this paragraph
(xiv) shall be in compliance with the requirements of Regulation S-X for a
public offering registered under the Securities Act and shall not be
materially inconsistent with financial statements previously provided to
the Arrangers; and
(xvi) payment of fees and expenses, including reasonable fees and
expenses of the Arrangers' counsel.
"Material Adverse Effect" shall mean a material adverse effect on (i)
-----------------------
the business, results of operations, financial condition or prospects of
Target and its subsidiaries taken as a whole or the Company and its
subsidiaries taken as a whole or (ii) the validity or enforceability of any
of the documents entered into in connection with the Transactions or the
other transactions contemplated by the Commitment Letter or the rights,
remedies and benefits available to the parties thereunder.
"Applicable Jurisdiction" means the United States and New York State.
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16
