
<PAGE>
 
                                                                  EXHIBIT (C)(3)

                       ALL AMERICAN COMMUNICATIONS, INC.
                              2114 Pico Boulevard
                            Santa Monica, CA  90405


November 20, 1995

Pearson Television Limited
Teddington Studios
Teddington Lock, Teddington
Middlesex TW11 9NT
Attn:  Ms. Sara Tingay

Dear Sirs and Madams:

In connection with your consideration of a possible transaction with All
American Communications, Inc., you have requested certain information concerning
the Company.  Certain terms used herein (e.g., the "Company" and "you" or "your"
are used as defined in the last paragraph hereof).  As a condition to your being
furnished such information, you agree to treat any "Evaluation Material" (as
hereinafter defined) in accordance with the provisions of this letter and to
take or abstain from taking certain other actions herein set forth.

The terms "Evaluation Material" means information concerning the Company
(whether prepared by the Company, its advisors or otherwise and irrespective of
the form of communication) which is furnished to you or to your Representatives
(as hereinafter defined) now or in the future by or on behalf of the Company,
along with all notes, analyses, studies, interpretations or other documents
prepared by you or your Representatives which contain, reflect or are based
upon, in whole or in part, the information furnished to you or your
Representatives pursuant hereto.

The term "Evaluation Material" does not include information which (i) is already
in your possession, provided that such information is not known by you after due
inquiry to be subject to another confidentiality agreement with or other
obligation of secrecy to the Company or another party, or (ii) is or becomes
generally available to the public other than as a result of a disclosure by you
or any of your directors, officers, employees, agents,
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Pearson Television Limited
November 20, 1995
Page 2


representatives or advisors ("Representatives"), or (iii) becomes available to
you on a non-confidential basis from a source other than the Company or its
advisors, provided that such source is not known by you after due inquiry to be
bound by a confidentiality agreement with or other obligation of secrecy to the
Company or another party.

You hereby agree that the Evaluation Material will be used solely for the
purposes of evaluating a possible transaction between the Company and you, will
not be used in any way detrimental to the Company, and that such information
will be kept confidential by you and your Representatives; provided, however,
that (i) any of such information may be disclosed to your Representatives who
need to know such information for the purpose of evaluating any such possible
transaction between the Company and you (it being understood that such
Representatives shall be informed by you of the confidential nature of such
information and shall be directed by you to treat such information
confidentially and you shall be responsible for any breach of this agreement by
any of the foregoing), (ii) any disclosure of such information may be made to
which the Company consents in writing.  You agree, at your sole expense, to take
all reasonable measures (including but not limited to court proceedings) to
restrain you Representatives from prohibited or unauthorized disclosure or use
of the Evaluation Material.

In the event that you (or any other person to whom you are permitted to disclose
Evaluation Material) are requested in any proceeding or are required by
applicable law to disclose any Evaluation Material, you will give the Company
prompt notice of such request or requirement so that the Company may seek an
appropriate protective order or other appropriate remedy.  If in the absence of
a protective order, or other appropriate remedy, you (or such other person) are
nonetheless compelled by law to disclose Evaluation Material, you (or such other
person) may disclose such information (but only to the extent so required)
without liability hereunder; provided, however, that you give the Company
written notice of the information to be disclosed as far in advance of its
disclosure as is practicable and, upon the Company's request and at the
Company's expense, use your best reasonable efforts to obtain reliable
assurances that confidential treatment will be accorded to such information,
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Pearson Television Limited
November 20, 1995
Page 3


including without limitation, by cooperating with the Company to obtain an
appropriate protection order.

You hereby acknowledge that you are aware, and that you will advise your
Representatives who are informed as to the matters which are the subject of this
letter, that the United States securities laws prohibit any person who has
received from an issuer material, non-public information concerning the issuer
or the matters which are the subject of this letter from purchasing or selling
securities of such issuer or from communicating such information to any other
person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities.

In addition, except as required by law or regulatory authority, without the
prior written consent of the Company, you will not, and will cause your
Representatives not to, and the Company agrees that it will not, disclose to any
person that Evaluation Material has been made available to you or that
discussions or negotiations are taking place concerning a possible transaction
between the Company and you or any of the terms, conditions or other facts with
respect to any such possible transaction, including the statue thereof.  You
have advised us that the regulatory authorities applicable to Pearson plc as a
quoted company may require disclosure of the possible transaction after the
parties have reached written agreement on the material terms of the transaction
in the event of significant "leaks" of the transaction; however, nothing herein
shall relieve any party from its responsibility for any breach of this letter
agreement.  Without limiting the generality of the foregoing, you further agree
that prior to the execution of any definitive agreement with the Company,
without the prior written consent of the Company, you will not, directly or
indirectly, enter into any agreement, arrangement or understanding, with any
person regarding a possible transaction involving the Company (other than with
your representatives or with your banks or similar financial institutions
providing credit to you).  The term "person" as used in this letter agreement
shall be broadly interpreted to include the media and any corporation,
partnership, group, individual or other entity.
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Pearson Television Limited
November 20, 1995
Page 4


You hereby acknowledge that the Evaluation Material is being furnished to you in
consideration of your agreement that without the prior written consent of the
Board of Directors of the company, for a period of two years from the date
hereof, you and your affiliates (as such term is defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) will not (and
you and they will not assist, provide or arrange financing to or for others or
encourage others to), directly or indirectly, acting alone or as part of a
group, acquire or agree, offer, seek or propose to acquire ownership (including,
but not limited to, beneficial ownership as defined in Rule 13d-3 under the
Exchange Act) of any of the assets or businesses of the Company or any
securities issued by the Company, or any rights or options to acquire such
ownership (including from a third party), or otherwise seek or propose to
influence or control (including by proxy solicitation or otherwise) the
management or policies of the Company, make any public announcement with respect
to any of the foregoing, request permission (without the Company's consent) to
do any of the foregoing or enter into any discussions, negotiation, arrangement
or understanding with any third party with respect to the foregoing.

Although the Company may include in the Evaluation Material information known to
it which it believes to be relevant for the purpose of your investigation, you
understand that neither the Company nor any of its directors, officers,
employees, representatives or advisors has made or makes any representation or
warranty as to the accuracy or completeness of the Evaluation Material.  You
agree that neither the Company nor any of the directors, officers, employees,
representatives or advisors shall have any liability to you or any of your
directions, officers, employees, representatives or advisors resulting from the
use or content of the Evaluation Material.

In the event that you or we do not proceed with a transaction within a
reasonable time, and, in any event, within five days after being so requested by
the Company, you shall promptly redeliver to the Company all written Evaluation
Material and shall deliver or promptly destroy any other written material
containing or reflecting any information in the Evaluation Material (whether
prepared by the Company, its advisors or otherwise) and will not retain any
copies, extracts or other reproductions in whole or in part of such written
material.  All
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Pearson Television Limited
November 20, 1995
Page 5


documents, memoranda, notes and other writings whatsoever prepared by you or any
of your advisors based on or including any of the information in the Evaluation
Material shall be destroyed, and such destruction shall be certified in writing
to the Company by an authorized officer supervising such destruction.  For this
purpose, a "writing" includes data in computer format.  Notwithstanding the
foregoing, one copy of written Evaluation Material and other written material
containing or reflecting Evaluation material may be retained in a confidential
manner by the Secretary of Pearson plc in the event such company is required to
maintain such copy as a result of the submission of such material to its Board
of Directors in connection with a determination by such Board.  In addition,
notwithstanding the return or destruction (or, as provided above, the retention)
of the Evaluation material, you and your Representatives will continue to be
bound by your obligations of confidentiality hereunder.

For eighteen months from the date of this letter agreement, you agree not to (i)
initiate or maintain contact (except for those contacts made in the ordinary
course of business) with any officer, director or significant employee of the
Company or any customer, client, or account of the Company regarding the
Company's business, operation, prospects or finances, or (ii) solicit for
employment any current key management employee of the Company or breach the
provisions of Schedule I hereto, except, in either case, with the express
permission of the Company.

You agree that unless and until a definitive agreement between the Company and
you with respect to any transaction referred to in the first paragraph of this
letter has been executed and delivered, neither the Company nor you will be
under any legal obligation of any kind whatsoever with respect to such a
transaction by virtue of this or any written or oral expression with respect to
such a transaction by any of its directors, officers, employees, agents,
representatives or advisors or representatives thereof except, in the case of
this letter, for the matters specifically agreed to herein. You further
acknowledge and agree that the Company reserves the right, in its sole
discretion, to reject any and all proposals made by you or on your behalf with
regard to a transaction between the Company and you, and to terminate
discussions and negotiations with you at any time.
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Pearson Television Limited
November 20, 1995
Page 6


You acknowledge that any breach of this Agreement would cause irreparable harm
to the Company and the Company could not be made whole by money damages.  It is
understood and agreed therefore that money damages would not be a sufficient
remedy for any breach of this letter agreement and that the Company shall be
entitled to specific performance and injunctive or other equitable relief as a
remedy for any such breach and you further agree to waive any requirement for
the security or posting of any bond in connection with such remedy.  Such remedy
shall not be deemed to be the exclusive remedy for breach of this agreement but
shall be in addition to all other remedies available at law or in equity to the
Company.

It is agreed that no failure or delay by the Company in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any right, power or privilege hereunder.  The
agreements set forth in this letter agreement may be modified or waived only by
a separate writing between the Company and you expressly so modifying or waiving
such agreements.

Unless the context indicates otherwise, the term (i) "the Company" shall include
All American Communications, Inc. and its direct and indirect subsidiaries
(including Mark Goodson Productions, LLC, and the assets and business acquired
from Mark Goodson Productions, L.P. and the Child's Play Company) and the  term
"you" shall include Pearson Television Limited and its direct or indirect
subsidiaries and its controlling persons, including Pearson plc and Grundy
Worldwide Limited (and members
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Pearson Television Limited
November 20, 1995
Page 7

of the Grundy Group).  This letter shall abe governed by, and construed in
accordance with, the laws of the State of Delaware.

Very truly yours,


ALL AMERICAN COMMUNICATIONS, INC.


By:   /s/  Thomas Bradshaw
      -----------------------

Confirmed and Agreed to:


PEARSON TELEVISION LIMITED


By:  /s/ Sara Tingay
     -------------------------
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Pearson Television Limited
November 20, 1995
Page 8


                                   SCHEDULE I
                                   ----------


Capitalized terms used herein without definition shall have the meaning set
forth in the attached letter agreement.

________________________________________________________________________________
1.   During the eighteen months from the date of the letter agreement, you shall
     not solicit for any employment David Hasselhof or Pamela Anderson.
