Without Prejudice For Settlement Discussions Only Subject to FRE 408 and All Local Equivalents Highly Confidential | ||
| 
Without Prejudice For Settlement Discussions Only Subject to FRE 408 and All Local Equivalents Highly Confidential | ||
LLA Proposal (8/26/26) | SteerCo Counterproposal (8/30/26) | LLA Counterproposal (9/9/26) | SteerCo Counterproposal (9/11/26) | ||||||||||||||
Structure Overview | ■Proposal contemplates a re-consolidation of existing RemainCo / UnSub structure | ■Reconsolidation of existing RemainCo / UnSub structure and separation of LPR from LLA into a standalone business (“New LPR”) pursuant to a Transition Services Agreement with LLA | ■Proposal contemplates a re-consolidation of existing RemainCo / UnSub structure | ■Reconsolidation of existing RemainCo / UnSub structure and separation of LPR from LLA into a standalone business (“New LPR”) pursuant to a Transition Services Agreement with LLA | |||||||||||||
UnSub Facility Refinancing | Facility | ■Size: [$410mm] of New Money “First-Out” Notes1 Funded at closing ■New money to be backstopped by AHG and offered to all term loan / bondholders ■Use of Proceeds: Refinancing of existing UnSub debt, transaction fees/expenses | ■Size: $410mm of New Money “First-Out” Notes or Term Loan2, but LLA to pay any prepayment penalty, call premium, exit fees or other similar costs on/from existing UnSub financing ■ Agreed ■New money to be backstopped by AHG and offered to all term loan / bondholders / RCF lenders ■Agreed | ■Size: [$410mm] of New Money “First-Out” Notes1 Agreed ■New money to be backstopped by AHG and offered to all term loan / bondholders ■Agreed | ■Size: $410mm of New Money “First-Out” Notes or Term Loan2, but LLA to pay any prepayment penalty, call premium, exit fees or other similar costs on/from existing UnSub financing ■ Agreed ■New money to be backstopped by AHG and offered to all term loan / bondholders / RCF lenders ■Agreed | ||||||||||||
Tenor | ■5 years | ■TBD | ■5 years | ■TBD | |||||||||||||
Interest Rate | ■6.50% | ■TBD | ■6.50% | ■TBD | |||||||||||||
Security / Collateral | ■First lien, first-out position secured by all collateral subsequent to the reconsolidation of the UnSub to the existing credit group (“ConsolidatedCo”) | ■Agreed | ■First lien, first-out position secured by all collateral subsequent to the reconsolidation of the UnSub to the existing credit group (“ConsolidatedCo”) | ■Agreed | |||||||||||||
Fees | ■Backstop Fees: [ ]% ■OID: [ ]% | ■Backstop Fees: TBD ■OID: TBD | ■Backstop Fees: [ ]% ■OID: [ ]% | ■Backstop Fees: TBD ■OID: TBD | |||||||||||||
Call Protection | ■NC-1, 1/2 coupon, ¼ coupon, par | ■TBD | ■NC-1, 1/2 coupon, ¼ coupon, par | ■TBD | |||||||||||||
| 1 Without Prejudice For Settlement Discussions Only Subject to FRE 408 and All Local Equivalents Highly Confidential | ||
LLA Proposal (8/26/26) | SteerCo Counterproposal (8/30/26) | LLA Counterproposal (9/9/26) | SteerCo Counterproposal (9/11/26) | ||||||||||||||
Existing UnSub RCF | Extended “First-Out” RCF Terms | ■Size: $[140]mm (unchanged from current size) ■Tenor: 5 years ■Rate: S + [400] ■Security / Collateral: First lien, first-out position secured by ConsolidatedCo assets ■Covenants: No financial maintenance covenant ■New RCF commitment and incremental liquidity need to be backstopped | ■Pari treatment with Existing 1L Creditors | ■Size: $[140]mm (unchanged from current size) ■Tenor: 5 years ■Rate: S + [400] ■Security / Collateral: First lien, first-out position secured by ConsolidatedCo assets ■Covenants: No financial maintenance covenant ■New RCF commitment and incremental liquidity need to be backstopped | ■Pari treatment with Existing 1L Creditors | ||||||||||||
Existing 1L Creditors | New “Second-Out” Takeback Debt | ■Size: [$1,250mm] ■Tenor: [7 years] ■Rate: 8.00% ■Call protection: [None] ■Security / Collateral: Second lien position secured by ConsolidatedCo assets ■To discuss mix of takeback loans vs. bonds | ■Takeback debt that results in no more than 4.0x total leverage ■TBD allocation between “First-Out” and “Second-Out” tranches | ■Size: [Agreed]1 ■Tenor: [7 years] ■Rate: 8.00% ■Call protection: [None] ■Security / Collateral: Second lien position secured by ConsolidatedCo assets ■To discuss mix of takeback loans vs. bonds | ■Takeback debt that results in no more than 4.0x total leverage ■TBD allocation between “First-Out” and “Second-Out” tranches | ||||||||||||
Common Equity | ■[75%] of pro forma equity allocated to participating holders on pro rata basis | ■100% of pro forma equity allocated to participating holders on pro rata basis | ■[75%] of pro forma equity allocated to participating holders on pro rata basis | ■100% of pro forma equity allocated to participating holders on pro rata basis | |||||||||||||
LLA | Common Equity | ■[25%] of pro forma equity ■LLA also receives cashless warrants struck at $831mm of Equity Value equal to 51% of equity value ■Customary minority governance rights to be discussed | ■Fully extinguished for no consideration ■N/A | ■[25%] of pro forma equity ■LLA also receives warrants struck at $[●]mm2 of Equity Value; warrant count to be sized such that LLA owns [45%] of pro forma equity assuming cash exercise ■Customary minority governance rights to be discussed | ■Cashless warrants for 5% of pro forma equity struck at an Equity Value resulting in an Existing 1L Creditor recovery equal to 120% of outstanding claim amount (par plus accrued interest) If a transition is initiated within the [5]-year period post-closing, warrants vest upon completion of the TSA (as defined and contemplated herein); otherwise, warrants vest upon the [5th] anniversary of closing ■N/A | ||||||||||||
| 2 Without Prejudice For Settlement Discussions Only Subject to FRE 408 and All Local Equivalents Highly Confidential | ||
LLA Proposal (8/26/26) | SteerCo Counterproposal (8/30/26) | LLA Counterproposal (9/9/26) | SteerCo Counterproposal (9/11/26) | ||||||||||||||
LLA (Cont’d) | Operational Items | ■LLA to provide Central Operating Services for a fixed [5]-year term consistent with current pricing versus market ■N/A ■N/A ■N/A | ■LLA to provide operational services at current cost pursuant to a Transition Services Agreement until earlier of (i) 3 years or (ii) separation is complete ■LLA to pay for all one-time stand up and transaction services costs pursuant to a Transition Services Agreement ■LLA to indemnify New LPR for any operational / separation-related liabilities during separation period ■LLA will commit to network performance and service availability SLAs during the TSA period; SLA violation penalties to follow industry norms | ■Post-Closing, Pre-Transition Commencement: Upon the closing date, LLA to continue providing scheduled shared services on existing terms without modification ■Transition Initiation: For a period of not less than [●] years post-closing, LPR will have the right but not the obligation to, at any time, for any reason, initiate a transition pursuant to a transition services agreement (the “TSA”) ■TSA: Terms and conditions of the TSA shall be reasonable and customary for agreements of this type and otherwise consistent with these terms. In any event, the TSA shall provide for: ►the complete transition to occur not later than [●] years following initiation of the transition; provided, that, such date may be extended by mutual agreement of LPR and LLA at pricing to be set forth in the TSA; ►staggered transition of shared services, subject to a To Be Determined minimum duration by service category, with a commensurate step down in pricing as services are fully transitioned – i.e., LPR will be paying lower costs as services are transitioned; ►pricing grid contemplated by TSA to be mutually agreed; and ►customary cooperation covenants/obligations on the parties to work in good faith to complete transition within deadlines fixed by the TSA ■Subject to Restructuring Agreement: TSA framework outlined above shall be subject to agreement with LLA on the other terms of an LPR restructuring ■N/A ■N/A | ■Post-Closing, Pre-Transition Commencement: [Agreed – subject to diligence] ■Transition Initiation: For a period of not less than [5] years post-closing, LPR will have the right but not the obligation to, at any time, for any reason, initiate a transition pursuant to a transition services agreement (the “TSA”) – subject to diligence ■TSA: Terms and conditions of the TSA shall be reasonable and customary for agreements of this type and otherwise consistent with these terms. In any event, the TSA shall provide for: ►the complete transition to occur not later than [5] years following initiation of the transition; provided, that, such date may be extended by mutual agreement of LPR and LLA at pricing to be set forth in the TSA – subject to diligence; ►[Agreed – subject to diligence] ►[Agreed – subject to diligence]; and ►[Agreed – subject to diligence] ■Subject to Restructuring Agreement: TSA framework outlined above shall be subject to agreement with LLA on the other terms of an LPR restructuring – subject to diligence ■LLA to pay for all one-time stand up and transaction services costs pursuant to a Transition Services Agreement ■LLA to indemnify New LPR for any operational / separation-related liabilities during separation period | ||||||||||||
| 3 Without Prejudice For Settlement Discussions Only Subject to FRE 408 and All Local Equivalents Highly Confidential | ||
LLA Proposal (8/26/26) | SteerCo Counterproposal (8/30/26) | LLA Counterproposal (9/9/26) | SteerCo Counterproposal (9/11/26) | ||||||||||||||
Other | Implement-ation | ■Implementation TBD, subject to reaching targeted participation thresholds, tax and other analyses ■To be discussed | ■Implementation TBD, subject to reaching targeted participation thresholds, tax and other analyses ■Customary mutual releases, subject to customary carve-outs | ■Implementation TBD, subject to reaching targeted participation thresholds, tax and other analyses ■To be discussed | ■Implementation TBD, subject to reaching targeted participation thresholds, tax and other analyses ■Customary mutual releases, subject to customary carve-outs | ||||||||||||
Trade / Other | ■To be discussed | ■Trade / DISH to be discussed | ■To be discussed | ■Trade / DISH to be discussed | |||||||||||||
Other | ■Reject ■To be discussed ■To be discussed | ■LLA to pay New LPR the principal amount of the forgiven intercompany receivable and any LLA professional fees paid by LPR ■LPR / LLA to permit and reasonably cooperate with full financial and operational due diligence ■LPR to pay accrued and continuing AHG advisor fees and expenses commencing with receipt of this term sheet | ■Reject: LPR has no actual or contingent claim against LLA and has not funded advisor fees for LLA1 ■Due diligence cooperation and AHG advisor fee payment to be provided subject to (i) parties’ agreement that LLA and affiliated individuals receive a general release and (ii) withdrawal with prejudice of AHG litigation in NYS court | ■Subject to further diligence, LLA to pay New LPR the principal amount of the forgiven intercompany receivable and any LLA professional fees paid by LPR ■Reject: LPR / LLA to permit and reasonably cooperate with full financial and operational due diligence ■Reject: LPR to pay accrued and continuing AHG advisor fees and expenses commencing with receipt of this term sheet | |||||||||||||
| 4