NBCUniversal Media, LLC, et al. – ‘SC 13D/A’ on 1/18/07 re: Ion Media Networks Inc. – EX-21

On:  Thursday, 1/18/07, at 8:59am ET   ·   Accession #:  947871-7-49   ·   File #:  5-44331

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Amendment to General Statement of Beneficial Ownership   —   Schedule 13D
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 13D/A    Amendment to General Statement of Beneficial          25    117K 
                          Ownership                                              
 2: EX-20       Letter of Intent                                      35    115K 
 3: EX-21       Letter From Nbc and Citadel to the Company            33    111K 

EX-21   —   Letter From Nbc and Citadel to the Company

EX-21
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January 17, 2007                                                                

The Board of Directors                                                          
ION Media Networks, Inc.                                                        
601 Clearwater Park Road                                                        
West Palm Beach, Florida 33401                                                  

Ladies and Gentlemen:                                                           

      Citadel Limited Partnership ("CLP") and NBC Universal, Inc. ("NBCU")
are pleased to present their proposal regarding a transaction (the "Proposed    
Transaction") designed to provide substantial benefits to ION Media Networks,   
Inc. ("ION" or the "Company") and its various stakeholders. The Proposed        
Transaction is the result of extensive negotiations between CLP and NBCU and is 
designed to balance the objectives of CLP, NBCU and the ION stakeholders by (i) 
delivering the per share cash consideration to the holders of the Company's     
Class A common stock contemplated in the November 7, 2005 agreements, (ii)      
offering new subordinated debt to the holders of 14-1/4% and 9-3/4% preferred   
stock pursuant to an exchange offer, (iii) significantly reducing fixed claims  
in the capital structure, and (iv) simplifying the Company's ownership          
structure.                                                                      

        As you are aware, pursuant to the Call Agreement, dated as of November
7, 2005 (the "Call Agreement"), NBCU holds the right (the "Call Right") to      
purchase the shares (the "Call Shares") of Class A common stock and Class B     
common stock of the Company that are beneficially owned by Lowell W. Paxson and 
certain affiliates.                                                             

      The Proposed Transaction contemplates, among other things, that NBCU
will transfer the Call Right to CIG Media LLC, a newly formed Delaware limited  
liability company ("Newco") controlled by CLP. In connection with such transfer,
NBCU will propose that the Company's Board of Directors (the "Board") approve   
Newco as a "permitted transferee" of the Call Right in accordance with, and     
pursuant to, the Call Agreement.                                                

      Since its founding in 1990, Citadel Investment Group, L.L.C. ("CIG")
and its affiliates have grown into one of the world's most sophisticated        
alternative investment institutions. Today, affiliates of CIG deploy            
approximately $13 billion of investment capital across a highly diversified set 
of proprietary investment strategies in nearly all major asset classes in all of
the world's principal markets. CIG and its affiliates maintain offices in Hong  
Kong, Chicago, New York, San Francisco, Tokyo and London. Newco is one of the   
entities for which CLP serves as portfolio manager and CIG provides             
administrative and investment-related services.                                 

     We believe that CLP is particularly well suited to consummate the
Proposed Transaction expeditiously and to play an important role in the         
Company's future. CLP currently manages corporate investments in the media      
sector aggregating in excess of $4 billion. Based on the advice of its FCC      
counsel, CLP does not currently manage any investment that                      

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causes CLP to have incurred any FCC broadcast license attribution. As a result, 
we believe that CLP is an ideal long-term sponsor for the Company, given its    
ability to take control of the Company and desire to work with existing         
management to reposition and grow the business.                                 

       The terms and conditions of the Proposed Transaction are set forth in
the term sheet (the "Term Sheet") enclosed with this letter. We wish to         
highlight for the Board what we believe are the key objectives and benefits of  
the Proposed Transaction:                                                       

       o  Holders of Class A common stock who tender would receive $1.41 per
    share in cash, as of January 17, 2007, with the exact amount
     determined by the formula in the Call Agreement. The Proposed
            Transaction would significantly increase the number of common shares
     outstanding on a fully diluted basis. However, Class A common
         holders who tender will not be impacted by this dilution, as they
            will receive cash consideration representing a 147% premium compared
       to the closing price of the Class A Common Stock on January 16,
2007.                                                   

 o  Holders of 14-1/4% and 9-3/4% preferred stock would have the
          opportunity to exchange their securities at their option for newly
            issued ION subordinated debt. The new subordinated debt would have a
       cash maturity in 2013 and would enhance preferred stockholders'
     current rights through the introduction of debt covenants and
      non-call features. Holders of 14-1/4% preferred stock would be
            offered an exchange ratio of 70% of the current face amount of their
      securities (the accreted value as of May 15, 2006). Holders of
           9-3/4% preferred stock would be offered an exchange ratio of 40% of
          the current face amount of their securities (the accreted value as
of September 30, 2006).                                 

       o  Assuming a successful exchange of the 14-1/4% and 9-3/4% preferred
       stock, CLP and NBCU will own convertible preferred stock at the
 bottom of the pro-forma capital structure, and NBCU would
          significantly reduce the face plus accrued value of its claims. In
        this scenario, NBCU would hold securities that are junior to the
       subordinated debt received by the holders of 14-1/4% and 9-3/4%
   preferred stock and that have a face value of $406 million,
           representing a 41% discount to the par plus accrued value of NBCU's
        current preferred stock. Including the $100 million of preferred
           stock NBCU forfeited as part of the November 2005 transactions, the
            implied discount would be 49%. The convertible preferred stock owned
          by CLP and NBCU would be mandatorily convertible into common stock
         at an initial conversion price of $0.75 per Class A common share.

      o  Prior to the mandatory conversion of the CLP and NBCU convertible
   securities, consummation of the Proposed Transaction with a
    successful exchange would reduce fixed claims in the capital
       structure by approximately $300 million; in addition, recurring
       fixed charges would be reduced by approximately $50 million per
annum.                                                  

       o  Following the mandatory conversion of the CLP and NBCU convertible
        securities, fixed charges would be reduced by an aggregate of $1
billion, and total                                      

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      recurring fixed charges would be reduced by approximately $110
million per annum.                                      

        o  The Company would retain approximately $190 million of subordinated
         debt capacity following consummation of the Proposed Transaction,
         leaving the Company with flexibility to attract new debt capital.

      o  Given an improved capital structure, the stability of a long-term
          sponsor in CLP and a streamlined governance structure, the Company
would be positioned to attract new equity capital.      

As further described in the Term Sheet, both entry into, and  
consummation of, the Proposed Transaction are subject to a number of conditions,
including, without limitation, approval of the Board and absence of a material  
adverse change affecting the Company. We wish to emphasize that CLP and NBCU    
would proceed with the Proposed Transaction only on a consensual basis, with the
approval of the Board.                                                          

         We and our advisors are ready to meet with you and your advisors at any
time. We look forward to scheduling a time to discuss the Proposed Transaction  
and to answer any questions you or they may have about the Proposed Transaction.

        Neither this letter nor the enclosed Term Sheet is intended to be, nor
shall either be, a binding contract between us, but is intended only as a formal
indication of our proposal as of this date, and the parties will be jointly     
bound only in accordance with the terms and conditions to be negotiated and     
contained in mutually executed definitive documentation. The description of the 
Proposed Transaction above is intended to be a summary of the transactions      
described in the Term Sheet and is qualified in its entirety by the attached    
Term Sheet.                                                                     

     We look forward to working with you and the Company's management to
consummate the Proposed Transaction in a timely manner.                         

Very truly yours,                                             

CITADEL LIMITED PARTNERSHIP               NBC UNIVERSAL, INC.                   
By:   Citadel Investment Group, LLC,                                            
its General Partner                                                 

By:    /s/ Matthew Hinerfeld           By:   /s/ Bruce Campbell                 
----------------------------          --------------------------  
Name:  Matthew Hinerfeld               Name:  Bruce Campbell      
      Title:  Managing Director and          Title:  Executive Vice President,
         Deputy General Counsel                 Business Development

3 
TERM SHEET OF PRINCIPAL TRANSACTIONS(1) 

     Set forth below are the principal terms of the proposed transaction
(the "Transaction") with respect to (i) the shares of Class A and Class B Common
Stock of ION Media Network, Inc. (the "Company") (respectively, the "Class A    
Common Stock" and the "Class B Common Stock") and (ii) the Company's 14-1/4%    
Preferred Stock (the "14-1/4% Preferred"), the Company's 9-3/4% Series A        
Preferred Stock (the "9-3/4% Preferred") and the Company's 11% Series B         
Preferred Stock (the "Series B Preferred") owned by NBCU.                       

A.    Overview.                                                           
---------                                                     

     As further described below, as part of the Transaction, among other
  things, (i) NBCU shall assign that certain Call Agreement, dated
  November 7, 2005 (the "Call Agreement") to a newly formed entity
        ("Newco") owned by affiliates of Citadel Limited Partnership (together
         with its affiliates, "CLP"), (ii) Newco will commence a tender offer in
 accordance with the Call Agreement and that certain Stockholder
        Agreement, dated November 7, 2005 (the "Stockholder Agreement"), (iii)
      the Company will also commence a tender offer for the Class A Common
        Stock, other than shares of the Class A Common Stock owned by the Call
       Stockholders (as defined in the Call Agreement) and certain shares of
       Class A Common Stock issued after November 7, 2005 upon the exercise,
        grant or vesting of any Stock-Based Compensation Awards (as defined in
the Stockholder Agreement) or upon conversion or exchange of  
        convertible or exchangeable securities of the Company (the "Ineligible
Shares") and shares held by CLP, (iv) the Company will issue  
        Subordinated Notes and potentially Series A-1 Convertible Preferred to
         CLP and/or Newco to fund the Company tender offer, (v) the Company will
 make an exchange offer for the 14-1/4% Preferred and the 9-3/4%
        Preferred owned by parties other than CLP (the "Exchange Offer"), (vi)
the Series D Non-Convertible Preferred (as defined below), the
      9,386.46875 shares of 14-1/4% Preferred Stock owned by CLP (the "CLP
         14-1/4% Preferred"), and the 262.33603 shares of 9-3/4% Preferred Stock
     owned by CLP (the "CLP 9-3/4% Preferred") will be exchanged for new
         securities of the Company, and (vii) Newco will exercise the Call Right
    (as defined in the Call Agreement) and acquire the Call Shares (as
    defined in the Call Agreement) from the Call Stockholders, in each
case, as more fully described below.                          

       The consummation of the Exchange Offer, the Preliminary Transactions,
        the transfer of the Call Agreement, and the exercise of the Call Right
will be conditioned upon satisfaction of customary terms and  

-----------------------                                                         

(1)      The proposed terms and conditions set forth in this term sheet are     
        intended merely as an outline of certain material terms of a potential
      transaction and are provided for discussion purposes only and do not
         constitute an offer, agreement or binding commitment by or on behalf of
        any party. This term sheet does not include descriptions of all of the
   terms, conditions and other provisions that would be contained in
      definitive documentation relating to the proposed Transaction and is
      not intended to limit the scope of discussion and negotiation of any
         matters not consistent with the specific matters set forth herein. This
       term sheet assumes the accuracy of all information regarding the debt
 and equity capitalization of the Company that has been publicly
       disclosed. In addition, this term sheet is subject to tax, accounting
      and Delaware counsel review by both NBCU and CLP. This term sheet is
      not a binding obligation to consummate the proposed Transaction. Any
    such obligation will be created only be definitive agreements, the
provisions of which will supersede this term sheet.           

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 conditions, including the execution of definitive transaction
 documents mutually acceptable to the parties (the "Definitive
      Transaction Documents"), absence of a MAC, absence of any material
      litigation seeking to restrain or materially alter the Transaction
    (which condition shall only be for the benefit of CLP and NBCU),
    receipt of FCC approval (except as otherwise provided below with
respect to the transfer of the Call Agreement), entry into  
          satisfactory arrangements with management, approval, to the reasonable
       satisfaction of CLP, by the Company's Compensation Committee of any
agreements, benefits or payments to be made to management in
       connection with the Transactions, including the Newco Tender Offer,
         sufficient to satisfy the safe harbor contained in Rule 14d-10 of the
          Exchange Act, approval of the Transaction by the board of directors of
          the Company (the "Board"), including approval of CLP and/or Newco as a
        permitted transferee, and satisfaction of each of the conditions to,
and simultaneous consummation of, all the other transactions
          contemplated hereby (other than the Company Tender Offer and the Newco
      Tender Offer). The Company Tender Offer and the Newco Tender Offer
     will be subject to the satisfaction of the more limited number of
conditions described below.                                 

B.    Transaction Steps                                                   
-----------------                                             

    1.   As promptly as practicable following agreement on this Term
             Sheet, NBCU and CLP will propose the Transaction to the Company
           and seek approval of the Transaction by the Board. As part of
             approving the Transaction, the Board will also approve CLP as a
permitted transferee of the Call Right.           

         2.   CLP and NBCU will work in good faith with the Company to prepare
             and execute the Definitive Transaction Documents as promptly as
practicable.                                      

         3.   As promptly as practicable upon proposing the Transaction to the
             Board, Newco and the Call Stockholders will apply for long-form
FCC approval.                                     

      4.   As promptly as practicable following CLP becoming a permitted
              transferee pursuant to the Call Agreement, CLP and/or Newco will
make any necessary HSR filings.                   

      5.   Upon Board approval of the Transaction, the Company will seek
      from its senior lenders (i) an amendment to increase the
            Restricted Payment basket to $70,000,000 and (ii) confirmation
              that the Transaction does not trigger the Change of Control put.
      If the amendment of the Restricted Payment basket is not
       obtained, the funding of the Company Tender Offer will be
               structured as set forth below in section C(3)(d). This term sheet
       assumes that the Change of Control put does not apply. If
               confirmation is not obtained, the Transaction may be restructured
              such that NBCU retains $250,000,000 of Series B Preferred at all
             times and NBCU and CLP will enter into an agreement designed to
              achieve the relative economics between CLP and NBCU with respect
            to their investment in the Company that would have resulted if
               NBCU's investment in the Series B Preferred has been restructured
in the manner contemplated herein.                

       6.   Upon the earlier of (x) receipt of FCC approval and (y) May 6,
           2007 (such date, the "Commencement Date"), the Call Agreement
              will be transferred to Newco. Simultaneously with such transfer,
Newco will exercise the Call Right, the           

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             Company will commence the Company Tender Offer and the Exchange
    Offer, and Newco will commence the Newco Tender Offer.

         7.   Upon satisfaction of all conditions, including, if not satisfied
          prior to the Commencement Date, receipt of FCC approval, the
               Newco Tender Offer, the Call Right, the Company Tender Offer, the
            Exchange Offer and the Preliminary Transactions will all close
            simultaneously (provided the requisite periods for the various
             offers have been satisfied); provided, however, if FCC approval
              has not been received by June 15, 2007, the Company Tender Offer
             and the Newco Tender Offer will close, notwithstanding that FCC
             approval has not been received, but subject to the satisfaction
               of the other conditions to the Company Tender Offer and the Newco
Tender Offer.                                     

C.    The Transactions.                                                   
----------------                                              

1.   Formation of Newco                                     
------------------                                

             a.   Newco will be a newly formed entity owned by affiliates of
                    CLP and will be structured to comply with FCC rules. Newco's
                    owners shall provide binding commitments to capitalize Newco
               with sufficient financing to consummate the purchase of
                   Subordinated Debt (and, to the extent necessary, Series A-1
                    Convertible Preferred), the Newco Tender Offer, the exercise
                    of the Call Right and the payment of any amounts required to
                  be paid pursuant to the Non-Compete Agreements (as defined
                    below), after application of the Escrow Amount (as described
below).                                 

2.   The Call Right.                                        
--------------                                    

            a.   On the Commencement Date, (i) NBCU will exchange with the
                 Company $200,000,000 in face amount of Series B Preferred
                  for $200,000,000 in face amount of a new series of Company
            preferred stock with terms identical to the Series B
                   Preferred but which shall not be convertible (the "Series D
                    Non-Convertible Preferred"), as described on Schedule F, and
             (ii) NBCU will assign the Call Agreement and transfer
               $200,000,000 in face amount of Series D Non-Convertible
                 Preferred to Newco. Newco will agree to issue to NBCU the
                  NBCU Option I (as described in section C(7)(a) below) upon
            the Call Closing (as defined in the Call Agreement).

              b.   On the Commencement Date, NBCU will also irrevocably assign
                    and transfer to Newco, subject to receipt of FCC approval by
                    Newco, the rights to the proceeds of the escrow account (the
           "Escrow Amount") established pursuant to the Escrow
                   Agreement among the Call Stockholders, NBCU and the Bank of
                   New York, dated November 7, 2005 and, subject to receipt of
            FCC approval by Newco, Newco will assume the payment
              obligations of NBCU to the Company, Mr. Paxson and Mr.
              Goodman under the Paxson Consulting and Noncompetition
                    Agreement between the Company, Mr. Paxson and NBCU, dated as
of November 7,                          

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                  2005 (the "Paxson Non-Compete Agreement"), and the Goodman
                    Noncompetition Agreement between NBCU and Mr. Goodman, dated
                    as of November 7, 2005 (the "Goodman Non-Compete Agreement,"
                and, together with the Paxson Non-Compete Agreement, the
"Non-Compete Agreements").              

     c.   Newco will simultaneously exercise the Call Right.

          d.   The Call Right will close upon receipt of FCC and other
                    regulatory approvals (provided the requisite periods for the
various offers have expired).           

                    i.   At the closing of the exercise of the Call Right, Newco
                       will pay $6,274,141 to the Call Stockholders pursuant
                       to the terms of the Call Agreement, $2,000,000 to the
                      Company and $3,000,000 to Mr. Paxson pursuant to the
                     Paxson Non-Compete Agreement, and $2,250,000 to Mr.
                        Goodman pursuant to the Goodman Non-Compete Agreement.
                     Newco will use the Escrow Amount (including accrued
               interest) to partially satisfy these amounts.

                  ii.  At the closing of the exercise of the Call Right, the
                     Call Stockholders shall immediately transfer all of
                        their Class A Common Stock and Class B Common Stock to
Newco.                        

                   iii. Simultaneously with the closing of the exercise of the
                   Call Right, that certain PMC Management and Proxy
                     Agreement, dated November 7, 2005, shall terminate.

3.   Company Tender Offer                                   
--------------------                              

               a.   On the Commencement Date, the Company will commence a tender
                 offer (the "Company Tender Offer") for all of the Class A
                  Common Stock. Holders of Ineligible Shares will not tender
                    their Class A Common Stock. CLP will agree not to tender the
                   2,728,531 shares of Class A Common Stock it currently holds
in physical form.                       

             b.   The Company Tender Offer and the financing thereof will be
               made in compliance with all applicable laws and will be
               subject only to those conditions contained in the Newco
              Tender Offer. The Company Tender Offer will be made on
                    economic terms identical to the Newco Tender Offer described
                    in section C(4) below, provided, however, the offer price in
                    the Company Tender Offer will be $0.01 higher than the offer
price in the Newco Tender Offer.        

            c.   The Company Tender Offer shall expire simultaneously with
               the Newco Tender Offer (as defined below) (the "Initial
                    Offer Period"), provided, that, the Company Tender Offer may
                  be extended as necessary to obtain any required regulatory
                approvals. The Company Tender Offer may also be extended
                with the consent of CLP and NBCU for an unlimited number

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                    of subsequent periods ("Subsequent Periods"). Promptly after
                 the expiration of the Initial Offer Period and during any
                   Subsequent Period, the Company shall unconditionally accept
                    for payment and pay for, in accordance with the terms of the
                 Company Tender Offer, all of the shares of Class A Common
                   Stock validly tendered pursuant to the Company Tender Offer
and not validly withdrawn.              

             d.   On each closing of the Company Tender Offer (whether after
                  the Initial Offer Period or a Subsequent Period), CLP will
                purchase subordinated debt (the "Subordinated Debt"), as
                 described on Schedule A, in an aggregate principal amount
                    equal to the amount necessary to fund the purchase of shares
                  under the Company Tender Offer; provided, that, (i) if the
                amendment to increase the senior debt Restricted Payment
            basket is not obtained, CLP will purchase Series A-1
               Convertible Preferred (as defined below) for any amount
                  required to be funded in excess of the amount available in
                    the senior debt Restricted Payment basket, but excluding any
                 amounts required to be purchased pursuant to clause (ii),
                   and (ii) CLP will purchase Series A-1 Convertible Preferred
               in an amount equal to $0.01 multiplied by the number of
                shares accepted for payment in the Company Tender Offer.

4.   Newco Tender Offer.                                    
------------------                                

         a.   Simultaneous with the Company Tender Offer, Newco will
                  commence a tender offer (the "Newco Tender Offer") for the
                  Class A Common Stock. Holders of Ineligible Shares and CLP
                 will not tender their Class A Common Stock into the Newco
Tender Offer.                           

           b.   The Newco Tender Offer and the financing thereof will be
               made in compliance with all applicable laws and will be
                conditioned only on those conditions permitted under the
                    Call Agreement and the Stockholder Agreement, including that
                    the consummation of the Newco Tender Offer is not prohibited
                 by applicable law. The Newco Tender Offer will be made on
         economic terms set forth in section 3.5(c) of the
Stockholder Agreement.                  

       c.   The Newco Tender Offer shall expire 20 business days
                    following the commencement of the Newco Tender Offer or such
                 other date as the Company and Newco shall agree and Newco
                shall, promptly after the expiration of the Newco Tender
                   Offer, unconditionally pay for all of the shares of Class A
                  Common Stock validly tendered pursuant to the Newco Tender
                Offer and not validly withdrawn. The consummation of the
                Newco Tender Offer shall satisfy the obligations of NBCU
          under the Stockholder Agreement and NBCU shall not
               thereafter be obligated to surrender to the Company any
         Series B Preferred pursuant to section 3.6 of the
Stockholder Agreement.                  

              d.   Upon conclusion of the Newco Tender Offer, the Company will
               grant Newco a right to put all of the shares of Class A
                 common stock it acquired in the Newco Tender Offer to the
                 Company at a price equal to the Newco Tender Offer price,
              such price to be paid in cash, funded through the sale

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                 of Subordinated Debt to CLP to the extent permitted under
               the senior debt Restricted Payment basket, or if not so
                 permitted, through the issuance of Series A-1 Convertible
                  Preferred. Such put shall be exercisable in the event that
                   the EBITDA of the Company for the last twelve months ending
                 December 31, 2007, or each of the 12 quarters thereafter,
         does not meet or exceed specified EBITDA targets.

           e.   If for any reason the Company Tender Offer, the Exchange
                 Offer and the Preliminary Transactions do not close, then
             NBCU shall grant Newco an option to purchase Series B
                  Preferred with a face amount equal to the product of (1) a
                  fraction, the numerator of which is the aggregate purchase
             price paid by Newco in the Newco Tender Offer and the
              denominator of which is the aggregate of the number of
                   shares outstanding prior to the closing of the Newco Tender
          Offer and Company Tender Offer less the sum of the
                 Ineligible Shares plus 6,126,868 shares multiplied by the
                    Newco Tender Offer price multiplied by (2) $150,000,000. The
               exercise price of their option will be equal to (i) the
                   aggregate number of shares of Class A common stock acquired
                    in by Newco in the Newco Tender offer multiplied by (ii) the
                 Newco Tender Offer price. Newco shall be permitted to pay
               such exercise price in either cash or shares of Class A
common stock, at Newco's discretion.    

5.   The Exchange Offer.                                    
------------------                                

           a.   On the Commencement Date, subject to section C(5)(b) and
                    section C(5)(c) below, (i) CLP will exchange $104,948,971 in
             the aggregate of CLP 14-1/4% Preferred and CLP 9-3/4%
                   Preferred (face plus all accrued amounts, including amounts
               accrued thereon through December 31, 2006) for an equal
                   aggregate principal amount of convertible subordinated debt
                 (the "Convertible Subordinated Debt"),(2) as described on
                  Schedule B, and (ii) NBCU will exchange (together with the
                    CLP exchange, the "Contingent Exchange") its $375,000,000 in
                face amount of Series B Preferred for an equal principal
                  amount of Convertible Subordinated Debt. In the Contingent
                    Exchange, all of the CLP 14-1/4% Preferred will be exchanged
                   before any of the CLP 9-3/4% Preferred are exchanged and to
                the extent that the amount of the Contingent Exchange is
                   reduced pursuant to C(5)(c) below, the CLP 9-3/4% Preferred
                    will be excluded from the Contingent Exchange before any CLP
                   14-1/4% Preferred is excluded from the Contingent Exchange.

            b.   Subject to section C(5)(c) below, the Exchange Offer will
                    provide the holders of (i) $475,252,056 in face amount(3) of
               14-1/4% Preferred with the opportunity to exchange such
  14-1/4% Preferred for Subordinated Debt in

------------------------                                                        
(2)      Total Convertible Subordinated Debt would be approximately             
$480,000,000.                                                 
(3)      As of December 31, 2006, based on May 15, 2006 amounts, the last date  
    dividends were declared by the Board. This amount excludes the CLP
14-1/4% Preferred.                                            

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                  the principal amount of $332,676,439 and (ii) $164,292,539
                  in face amount(4) of 9-3/4% Preferred with the opportunity
                  to exchange such 9-3/4% Preferred for Subordinated Debt in
                  the principal amount of $65,717,016; provided that, to the
                   extent the holders of the 14-1/4% Preferred do not exchange
               into Subordinated Debt, the amount of Subordinated Debt
                    offered to holders of the 9-3/4% Preferred will increase, on
                 a sliding scale basis, up to $73,931,643. The holders who
                 validly exchange will consent to, among other things, the
             amendment of the existing certificates of designation
                   governing the 14-1/4% Preferred and the 9-3/4% Preferred to
              eliminate all restrictive covenants, change of control
             rights, and voting rights (with respect to the 9-3/4%
Preferred) contained therein.           

            c.   Should at least 90% of the 14-1/4% Preferred Stock and at
                   least 90% of the 9-3/4% Preferred Stock validly exchange in
             the Exchange Offer, CLP and NBCU will remain in their
                 existing positions and will not effectuate the Contingent
            Exchange described in section C(5)(a) above and such
               existing positions will be restructured as set forth in
           section C(6) below. If less than 90% of each of the
                   14-1/4% Preferred and the 9-3/4% Preferred validly exchange
                    in the Exchange Offer, the amount of the Contingent Exchange
                    described in section C(5)(a) above will be reduced pro-rata,
                    on a sliding scale basis, in accordance with the methodology
detailed on Schedule G(1).              

6.   The Preliminary Transactions                           
----------------------------                      

         a.   Immediately following the consummation of the Exchange
           Offer, to the extent the Contingent Exchange is not
                   effectuated or has been reduced pursuant to section C(5)(c)
              above, CLP will exchange its remaining (i) CLP 14-1/4%
                Preferred (face plus all accrued amounts thereon through
                    December 31, 2006) for an equal face amount of 8% Series A-1
             Mandatorily Convertible Preferred Stock due 2013 (the
               "Series A-1 Convertible Preferred") and (ii) CLP 9-3/4%
                   Preferred (face plus all accrued amounts, including amounts
                    accrued thereon through December 31, 2006) for an equal face
                 amount of 8% Series A-2 Mandatorily Convertible Preferred
                   Stock due 2013 (the "Series A-2 Convertible Preferred," and
               together with the Series A-1 Convertible Preferred, the
                   "Series A Convertible Preferred"), as described on Schedule
C.                                      

         b.   Immediately following the consummation of the Exchange
                    Offer, regardless of whether the Contingent Exchange occurs,
          (i) CLP will exchange its $200,000,000 of Series D
                    Non-Convertible Preferred it received from NBCU as described
                in section C(2)(a) for $200,000,000 in face amount of 8%
            Series C Mandatorily Convertible Preferred Stock due

-----------------------                                                         
(4)      As of December 31, 2006, based on September 30, 2006 amounts, the last 
         date dividends were declared by the Board. This amount excludes the CLP
9-3/4% Preferred.                                             

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                    2013 (the "Series C Convertible Preferred"), as described on
              Schedule E, and (ii) NBCU will exchange $31,070,000 of
               Series B Preferred for an equal face amount of Series C
Convertible Preferred.                  

         c.   Immediately following the consummation of the Exchange
                Offer, to the extent that the Contingent Exchange is not
                   effectuated or has been reduced pursuant to section C(5)(c)
                  above, NBCU will exchange its remaining Series B Preferred
                    for an equal face amount of Series B Mandatorily Convertible
           Preferred Stock due 2013 (the "Series B Convertible
                  Preferred"), as described on Schedule D. Upon consummation
                   of this step of the Transaction, no Series B Preferred will
remain outstanding.                     

         d.   Immediately following the consummation of the Exchange
                  Offer, NBCU will transfer Convertible Subordinated Debt to
                   CLP in accordance with the methodology detailed on Schedule
G(2).                                   

              e.   NBCU and Newco will enter into an agreement under which the
                 relative seniority of Series A Convertible Preferred over
          Series B Convertible Preferred will be effectively
              eliminated and the seniority of Series A-1 Convertible
                Preferred received by CLP for funding the Company Tender
                  Offer or received upon exercise of the put right described
                  in section C(4)(d) will be addressed. Under the agreement,
             NBCU will transfer to CLP (i) the economic benefit it
                   realizes and (ii) an amount equal to one half of the amount
                  of economic shortfall CLP experiences (after giving effect
                 to clause (i)), in each case as a result of CLP receiving
                    any Series A-1 Convertible Preferred instead of subordinated
                debt for funding the Company Tender Offer (excluding the
                  $0.01 premium) or upon exercise of the put right described
in section C(4)(d).                     

7.   NBCU Options.                                          
------------                                      

              a.   NBCU Option I: As set forth in section C(2)(a) above, Newco
                   will grant NBCU an option (the "NBCU Option I") to purchase
                   the shares of Class A Common Stock and Class B Common Stock
      owned by Newco (and formerly owned by the Call
                 Shareholders), as described on Schedule H. The Definitive
               Transaction Documentation shall contain provisions that
                 prohibit (i) the transfer by CLP of the shares of Class A
                 Common Stock and Class B Common Stock underlying the NBCU
                  Option I, (ii) the issuance by the Company of any share of
                   Class B Common Stock other than pursuant to the exercise of
                the NBCU Option II (as defined below) or (iii) the entry
                    into any agreement or arrangement by CLP or the Company with
             respect to a change of control or other extraordinary
                    corporate transaction of the Company, in each case, prior to
                 the earlier of the business day following (A) the six (6)
                  month anniversary of the Call Closing or (B) the Delisting
Date.                                   

               b.   NBCU Option II: NBCU will irrevocably waive its right to any
                   accrued dividends on its Series B Preferred in exchange for
                an option to acquire shares of Class B Common Stock (the
                    "NBCU Option II") from the Company, as described on Schedule
I.                                      

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            c.   CLP Put Right and NBCU Call Right: If at any time, either
                  (i) NBCU, (ii) a group (as such term defined in Rule 13d-3
                 under the Exchange Act) comprised of NBCU and a holder of
               the NBCU Option I, the NBCU Option II, or other Company
               securities transferred by NBCU or (iii) any third party
                  (other than CLP) that received the Company securities from
                  NBCU acquires securities representing more than 50% of the
                 voting power of the Company outstanding at such time (the
                   "Trigger Event"), Newco will have the right, subject to the
                    receipt of any required FCC approval, to put all its Subject
                  Securities (as defined in Schedule J) to NBCU as described
                   on Schedule J. If CLP does not exercise the put right, NBCU
                 will have a right to call such securities as described on
Schedule J.                             

8.   CLP Warrants.                                          
------------                                      

        a.   The securities held by NBCU will permit and expressly
               contemplate that the Company will issue to CLP warrants
                   representing 100,000,000 shares of Class A Common Stock, as
described on Schedule K.                

9.    NBCU Right of First Offer and Last Offer                
----------------------------------------          

             a.   CLP may seek to transfer any of its Subject Securities, at
               any time subject to the following conditions: CLP shall
                    deliver to NBCU a written notice (the "First Offer Notice"),
                 which shall (i) state CLP's intention to seek to transfer
                 Subject Securities, the amount to be transferred, and the
                    proposed sale price thereof and (ii) offer to NBCU the right
                 to acquire all of such Subject Securities at the proposed
            purchase price and upon the terms and subject to the
               conditions of the proposed transfer as set forth in the
                   First Offer Notice (the "First Offer"), provided, that, the
                First Offer must be accepted on an all or nothing basis.
               NBCU, or a third party designated by NBCU, shall have a
                 right, for a period of twenty (20) days after delivery of
                  the First Offer Notice (the "Acceptance Period") to accept
                    the First Offer at the purchase price and upon the terms and
                  subject to the conditions as set forth in the First Offer.
                Upon acceptance of the First Offer during the Acceptance
                    Period, subject to the receipt of any necessary FCC or other
                    regulatory approvals, NBCU or its designee shall have thirty
           (30) days from the acceptance of the First Offer to
          consummate the transaction to purchase the Subject
                    Securities. If NBCU or its designee shall fail to accept, or
              shall reject in writing, the First Offer, then CLP may
                   transfer the Subject Securities at a price and on terms not
                  more favorable to the purchaser thereof than the price and
                  terms stated in the First Offer Notice, at any time within
                one hundred eighty (180) days from the expiration of the
                  Acceptance Period; provided, that, CLP shall, upon receipt
                  of a bona fide offer (the "Last Offer") from a third party
                   with respect to the Subject Securities, promptly deliver to
                   NBCU a written notice (the "Last Look Notice"), which shall
                 identify such third party making the Last Offer and state
                   the proposed offer price thereof, the form of consideration
            proposed to be paid and all other material terms and

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                    conditions of the Last Offer, and NBCU or its designee shall
                   have a right, for a period of 10 business days upon receipt
                  of the Last Look Notice (the "Last Acceptance Period"), to
                offer to purchase the Subject Securities at the proposed
                    offer price and upon the terms and subject to the conditions
                  of the proposed offer as set forth in the Last Offer. Upon
               acceptance of the Last Offer during the Last Acceptance
                Period, NBCU or its designee shall have thirty (30) days
               from the acceptance of the Last Offer to consummate the
                    transaction to purchase the Subject Securities. The Right of
                  First Offer and Last Offer will terminate upon the earlier
                    of (i) the termination or expiration of the NBCU Option I or
                 NBCU Option II, (ii) the transfer of the NBCU Option I or
                NBCU Option II to a third party, other than any party or
                   parties acting as a part of a group with NBCU, or (iii) the
                 transfer by NBCU to one or more third parties, other than
                   any party or parties acting as a part of a group with NBCU,
                   of securities representing, in the aggregate, more than 10%
                   of the total voting power of the Company on a fully diluted
           basis immediately following the consummation of the
                Transaction; provided, that, if NBCU transfers to one or
                  more third parties, other than any party or parties acting
                   as a part of a group with NBCU, securities representing, in
                 the aggregate, in excess of 5%, but not more than 10%, of
                the total voting power of the Company on a fully diluted
           basis immediately following the consummation of the
                   Transaction, NBCU shall have the Right of First Offer only.
                  The Right of First Offer and Last Offer shall not bind any
            transferee of the Subject Security who acquires such
                 securities from CLP after compliance with this paragraph.
              For the avoidance of doubt, CLP may pledge the Subject
                    Securities without being subject to the Right of First Offer
                   and Last Offer so long as the Right of First Offer and Last
                 Offer shall apply to any transfer of such pledged Subject
Securities by the pledgee thereof.      

             b.   Notwithstanding the foregoing, for any transaction with an
              aggregate total of $5,000,000 or less, but in no event
                   exceeding an aggregate total of $75,000,000 in any calendar
                  year (as measured by face amount of Subject Securities and
              assuming a value of $0.75 per share for Class A Common
           Stock), CLP may seek to transfer any of its Subject
                   Securities at any time subject to the following conditions:
                   CLP shall deliver to NBCU a written notice (the "De Minimis
                   First Offer Notice"), which shall (i) state CLP's intention
                to seek to transfer Subject Securities, the amount to be
                 transferred, and the proposed sale price thereof and (ii)
              offer to NBCU the right to acquire all of such Subject
                    Securities at the proposed purchase price and upon the terms
                 and subject to the conditions of the proposed transfer as
               set forth in the De Minimis First Offer Notice (the "De
                   Minimis First Offer"), provided, that, the De Minimis First
                   Offer must be accepted on an all or nothing basis. NBCU, or
                   a third party designated by NBCU, shall have a right, for a
                 period of five (5) business days after delivery of the De
              Minimis First Offer Notice (the "De Minimis Acceptance
            Period") to accept the De Minimis First Offer at the
purchase price and upon the             

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                  terms and subject to the conditions as set forth in the De
                    Minimis First Offer. Upon acceptance of the De Minimis First
                  Offer during the De Minimis Acceptance Period, NBCU or its
                   designee shall have thirty (30) days from the acceptance of
                   the De Minimis First Offer to consummate the transaction to
                purchase the Subject Securities. If NBCU or its designee
                shall fail to accept, or shall reject in writing, the De
              Minimis First Offer, then CLP may transfer the Subject
                    Securities at a price and on terms not more favorable to the
                   purchaser thereof than the price and terms stated in the De
                  Minimis First Offer Notice, at any time within ninety (90)
             days from the expiration of the De Minimis Acceptance
           Period. For the avoidance of doubt, CLP will not be
             obligated to provide NBCU with a Last Look Notice for
                  Subject Securities that were subject to a De Minimis First
Offer Notice.                           

D.    Subsequent Transactions.                                            
-----------------------                                       

1.   Delisting                                              
---------                                         

             a.   If possible, based on the number of shares outstanding and
                 the number of record holders of Class A Common Stock, the
                    Company shall delist and deregister the Class A Common Stock
                  following the consummation of the Company Tender Offer and
the Newco Tender Offer.                 

2.   Merger                                                 
------                                            

            a.   If not all outstanding shares of Class A Common Stock are
                 tendered in the Company Tender Offer and the Newco Tender
                  Offer, the remaining shares of Class A Common Stock (other
                than the shares owned by CLP) will be acquired through a
           long-form merger under Delaware law. In the merger,
                    outstanding employee options and restricted stock units will
                   be rolled over into new securities of the surviving entity.
                    The Transaction will be conditioned upon the approval by the
  current Board of the terms of such merger.

3.   New Board                                              
---------                                         

               a.   As promptly as practicable following the closing of the Call
                  Right, the members of the Board will resign and Newco will
elect new members to the Board.         

4.   Increase of Authorized Shares                          
-----------------------------                     

    a.   In connection with the Transaction, the Company's
                    certificate of incorporation will be amended to increase the
                   number of authorized shares of Class A, Class B and Class C
                 Common Stock to allow for the issuance of such stock upon
                  the conversion of Series A Convertible Preferred, Series B
                 Convertible Preferred and Series C Convertible Preferred.

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E.    Fees and Expenses                                                   
-----------------                                             

         1.   If the Board does not approve the Transaction or the Transaction
             does not close, each of the parties will be responsible for its
own expenses.                                     

       2.   If the Transaction closes, the Company will pay the reasonable
     fees and expenses incurred by all of the parties to the
Transaction.                                      

F.    Due Diligence                                                       
-------------                                                 

     1.   The Company will provide CLP and its representatives with an
              opportunity to (i) meet with the Chief Executive Officer and the
              Chief Financial Officer of the Company to further understand the
              Company's current business plan and forecast for 2007, including
       access to internal financial models and (ii) conduct tax,
          accounting and legal due diligence of the Company, which CLP
            expects would be completed not more than two weeks after being
provided access by the Company.                   

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                                                                      Schedule A

Term Sheet for the Subordinated Debt
------------------------------------

Issuer             ION.                                                         

Initial Holders    CLP and the former holders of 14-1/4% Junior Exchangeable    
             Preferred Stock and 9-3/4% Convertible Preferred Stock.

Ranking            Junior to the First Priority Term Loans due 2012, the First  
                  Priority Senior Secured Floating Rate Notes due 2012 and the
                 Second Priority Senior Secured Floating Rate Notes due 2013
            (the "Senior Debt Securities") and pari passu with the
Convertible Subordinated Debt.            

Maturity           July 2013.                                                   

Interest           12% annual simple interest coupon, payable quarterly in      
                arrears, in cash or additional Subordinated Debt, at ION's
option.                                   

Call Protection    Subordinated Debt shall not be callable prior to maturity.   

Conversion         Subordinated Debt shall not be convertible.                  

Transferability    Subordinated Debt shall be freely transferable, subject to   
applicable securities laws.               

Other Terms        The indenture shall contain customary covenants and events of
                  default provisions to be negotiated by the parties and shall
           be consistent with the indentures for the Senior Debt
Securities.                               

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                                                                      Schedule B

Term Sheet for the Convertible Subordinated Debt
------------------------------------------------

Issuer                   ION.                                                   

Initial Holder           CLP and NBCU.                                          

Ranking                  Junior to the Senior Debt Securities and pari passu    
with the Subordinated Debt.   

Maturity                 July 2013.                                             

Interest                 8% annual simple interest coupon, payable quarterly in 
                         arrears, in cash or additional Convertible Subordinated
Debt, at ION's option.        

Call Protection          Convertible Subordinated Debt shall not be callable    
prior to maturity.            

Optional                 Convertible Subordinated Debt shall be convertible at  
Conversion               any time, at the holder's option, into shares of Class 
                         A Common Stock at a conversion price of $0.75 per share
of Class A Common Stock.      

Mandatory                Convertible Subordinated Debt shall be converted into  
Conversion               shares into shares of Class A Common Stock, or, in the 
                       case of Convertible Subordinated Debt issued to NBCU,
                     at NBCU's option, an equal number of Class C Common
                         Stock, upon the earliest of: (i) in the event shares of
                     Class A Common Stock are traded on a national stock
              exchange, the trading price for fifteen (15)
                     consecutive trading days of Class A Common Stock on
                     such exchange is equal to or greater than $0.75 per
                      share, increasing at a rate per annum of 8% from the
                       issuance of Convertible Subordinated Debt through the
                        date of conversion (the "Mandatory Conversion Price"),
                        (ii) the issuance by ION of Class A Common Stock at an
                    issue price per share equal to or greater than the
              Mandatory Conversion Price with an aggregate
                    consideration of no less than $100,000,000 in such
                       issuance, or (iii) a nationally recognized investment
                     bank chosen by the Company pursuant to Board action
                     values a share of Class A Common Stock at an amount
                   equal to or greater than the Mandatory Conversion
Price.                        

Adjustments              The conversion prices shall be subject to customary    
to Conversion            adjustments for stock splits, dividends,               
Price                    recapitalizations, below market issues and similar     
events.                       

Registration Rights      The holders of Convertible Subordinated Debt shall     
                      enter into a registration rights agreement with ION,
                         pursuant to which the holders shall have demand rights,
                      and piggyback rights and other customary terms to be
                        negotiated by the parties in the event of a conversion
                      of Convertible Subordinated Debt into Class A Common
Stock.                        

Transferability          Convertible Subordinated Debt shall be freely          
                         transferable, subject to applicable securities laws and
                        in the case of Convertible Subordinated Debt issued to
                    CLP, the NBCU Right of First Offer and Last Offer.

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                                                                      Schedule B

Other Terms              The indenture shall contain customary covenants and    
                      events of default provisions to be negotiated by the
                        parties and shall be consistent with the indentures of
             the Senior Debt Securities. The Convertible
                    Subordinated Debt shall include customary minority
              protections for the benefit of NBCU and CLP.

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                                                                      Schedule C

 Term Sheet for the Series A Convertible Preferred Stock
 -------------------------------------------------------

Issuer                   ION.                                                   

Initial Holder           CLP.                                                   

Ranking                  The Series A-1 Convertible Preferred Stock and the A-2 
                        Convertible Preferred Stock (collectively, the "Series
                        A Convertible Preferred") will be junior to the Senior
                Debt Securities, the Subordinated Debt and the
                       Convertible Subordinated Debt, senior to the Series B
                 Convertible Preferred, the Series C Convertible
                         Preferred and the 9-3/4% Preferred, and pari passu with
the 14-1/4% Preferred.        

Maturity                 August 2013.                                           

Liquidation              The liquidation preference for each share of Series A  
Preference               Convertible Preferred shall be the greater of (i)      
                   $10,000 per share plus any accumulated and unpaid
                         dividends from the issue date through and including the
                       date of liquidation and (ii) the aggregate amount per
                         share payable upon liquidation to the holders of shares
                     of Class A Common Stock multiplied by the number of
                         shares of Class A Common Stock into which each share of
                      Series A Convertible Preferred would be convertible.

Dividend                 As and if declared by the Board, the greater of        
                     (determined on a cumulative basis from the issuance
                        date of the Series A Convertible Preferred to the date
                        of such determination), (x) 8% annual simple dividend,
                      payable quarterly in arrears, in cash, which amounts
                      shall accrue to the extent not paid in cash, and (y)
                   the aggregate dividends per share paid on Class A
                     Common Stock, multiplied by the number of shares of
                        Class A Common Stock into which each share of Series A
             Convertible Preferred would be convertible.

Call Protection          Series A Convertible Preferred shall not be callable   
prior to maturity.            

Optional Conversion      Series A Convertible Preferred shall be convertible at 
                       any time, at the holder's option, into Class A Common
                         Stock at a conversion price of $0.75 per share of Class
A Common Stock.               

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                                                                      Schedule C

Mandatory Conversion     The outstanding shares of Series A Convertible         
                     Preferred shall be converted into shares of Class A
                     Common Stock upon the earliest of: (i) in the event
                         shares of Class A Common Stock are traded on a national
                    stock exchange, the trading price for fifteen (15)
                     consecutive trading days of Class A Common Stock on
                     such exchange is equal to or greater than $0.75 per
                      share, increasing at a rate per annum of 8% from the
                       date of the closing of the exchange offer through the
                        date of conversion (the "Mandatory Conversion Price"),
                        (ii) the issuance by ION of Class A Common Stock at an
                    issue price per share equal to or greater than the
              Mandatory Conversion Price with an aggregate
                    consideration of no less than $100,000,000 in such
                       issuance, or (iii) a nationally recognized investment
                     bank chosen by the Company pursuant to Board action
                     values a share of Class A Common Stock at an amount
                   equal to or greater than the Mandatory Conversion
Price.                        

Adjustments to           The conversion prices shall be subject to customary    
Conversion Price         adjustments for stock splits, dividends,               
                    recapitalizations, below market issues and similar
events.                       

Voting                   Holders of shares of Series A Convertible Preferred    
         shall not be entitled to voting rights.

Registration Rights      The holders of Series A Convertible Preferred shall    
                      enter into a registration rights agreement with ION,
                         pursuant to which the holders shall have demand rights,
                      and piggyback rights and other customary terms to be
                        negotiated by the parties in the event of a conversion
                       of Series A Convertible Preferred into Class A Common
Stock.                        

Transferability          Series A Convertible Preferred shall be freely         
                         transferable, subject to applicable securities laws and
               the NBCU Right of First Offer and Last Offer.

Other Terms              Except as outlined in this term sheet, the other rights
                        and provisions of Series A Convertible Preferred shall
                      be substantially similar to the Series B Convertible
                        Preferred and the Series A Convertible Preferred shall
                        include customary minority protections for the benefit
of CLP.                       

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                                                                      Schedule D

 Term Sheet for the Series B Convertible Preferred Stock
 -------------------------------------------------------

Issuer                   ION.                                                   

Initial Holder           NBCU.                                                  

Ranking                  Junior to the Senior Debt Securities, the Subordinated 
                       Debt, the Convertible Subordinated Debt, the Series A
                      Convertible Preferred, the 14-1/4% Preferred and the
              9-3/4% Preferred, but senior to the Series C
Convertible Preferred.        

Maturity                 August 2013.                                           

Liquidation              The liquidation preference for each share of Series B  
Preference               Convertible Preferred shall be the greater of (i)      
                   $10,000 per share plus any accumulated and unpaid
                         dividends from the issue date through and including the
                       date of liquidation and (ii) the aggregate amount per
                         share payable upon liquidation to the holders of shares
                     of Class A Common Stock multiplied by the number of
                         shares of Class A Common Stock into which each share of
                      Series B Convertible Preferred would be convertible.

Dividend                 As and if declared by the Board, the greater of        
                     (determined on a cumulative basis from the issuance
                        date of the Series B Convertible Preferred to the date
                        of such determination), (x) 8% annual simple dividend,
                      payable quarterly in arrears, in cash, which amounts
                      shall accrue to the extent not paid in cash, and (y)
                   the aggregate dividends per share paid on Class A
                     Common Stock, multiplied by the number of shares of
                        Class A Common Stock into which each share of Series B
             Convertible Preferred would be convertible.

Call Protection          Series B Convertible Preferred shall not be callable   
prior to maturity.            

Optional                 Series B Convertible Preferred shall be convertible at 
Conversion               any time, at the holder's option, into Class A Common  
                         Stock at a conversion price of $0.75 per share of Class
A Common Stock.               

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                                                                      Schedule D

Mandatory                The outstanding shares of Series B Convertible         
Conversion               Preferred shall be converted into shares of Class A    
                        Common Stock, or, at NBCU's option, an equal number of
                       shares of Class C Common Stock, upon the earliest of:
                     (i) in the event shares of Class A Common Stock are
                        traded on a national stock exchange, the trading price
                      for fifteen (15) consecutive trading days of Class A
                      Common Stock on such exchange is equal to or greater
                         than $0.75 per share, increasing at a rate per annum of
                       8% from the date of the closing of the exchange offer
                through the date of conversion (the "Mandatory
                         Conversion Price"), (ii) the issuance by ION of Class A
                      Common Stock at an issue price per share equal to or
                     greater than the Mandatory Conversion Price with an
                         aggregate consideration of no less than $100,000,000 in
                 such issuance, or (iii) a nationally recognized
                         investment bank chosen by the Company pursuant to Board
                     action values a share of Class A Common Stock at an
               amount equal to or greater than the Mandatory
Conversion Price.             

Adjustments to           The conversion prices shall be subject to customary    
Conversion Price         adjustments for stock splits, dividends,               
                    recapitalizations, below market issues and similar
events.                       

Voting                   Holders of shares of Series B Convertible Preferred    
         shall not be entitled to voting rights.

Registration Rights      The holders of Series B Convertible Preferred shall    
                      enter into a registration rights agreement with ION,
                         pursuant to which the holders shall have demand rights,
                      and piggyback rights and other customary terms to be
                        negotiated by the parties in the event of a conversion
                       of Series B Convertible Preferred into Class A Common
Stock.                        

Transferability          Series B Convertible Preferred shall be freely         
                      transferable, subject to applicable securities laws.

Other Terms              Except as outlined in this term sheet, the other rights
                      and provisions of the Series B Convertible Preferred
                shall be substantially similar to the Series A
                    Convertible Preferred and the Series B Convertible
                        Preferred shall include customary minority protections
for the benefit of NBCU.      

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                                                                      Schedule E

 Term Sheet for the Series C Convertible Preferred Stock
 -------------------------------------------------------

Issuer                   ION.                                                   

Holder                   CLP and NBCU.                                          

Ranking                  Junior to the Senior Debt Securities, the Subordinated 
                       Debt, the Convertible Subordinated Debt, the Series A
                   Convertible Preferred, the 14-1/4% Preferred, the
               9-3/4% Preferred and the Series B Convertible
Preferred.                    

Maturity                 September 2013.                                        

Liquidation              The liquidation preference for each share of Series C  
Preference               Convertible Preferred shall be the greater of (i)      
                   $10,000 per share plus any accumulated and unpaid
                         dividends from the issue date through and including the
                       date of liquidation and (ii) the aggregate amount per
                         share payable upon liquidation to the holders of shares
                     of Class A Common Stock multiplied by the number of
                         shares of Class A Common Stock into which each share of
                      Series C Convertible Preferred would be convertible.

Dividend                 As and if declared by the Board, the greater of        
                     (determined on a cumulative basis from the issuance
                        date of the Series C Convertible Preferred to the date
                        of such determination), (x) 8% annual simple dividend,
                      payable quarterly in arrears, in cash, which amounts
                      shall accrue to the extent not paid in cash, and (y)
                   the aggregate dividends per share paid on Class A
                     Common Stock, multiplied by the number of shares of
                        Class A Common Stock into which each share of Series C
             Convertible Preferred would be convertible.

Call Protection          Series C Convertible Preferred shall not be callable   
prior to maturity.            

Optional                 Series C Convertible Preferred shall be convertible at 
Conversion               any time, at the holder's option, into Class A Common  
                         Stock at a conversion price of $0.75 per share of Class
A Common Stock.               

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                                                                      Schedule E

Mandatory                The outstanding shares of Series C Convertible         
Conversion               Preferred shall be converted into shares of Class A    
                      Common Stock or, in the case of Series C Convertible
                      Preferred issued to NBCU, at NBCU's option, an equal
                    number of shares of Class C Common Stock, upon the
                        earliest of: (i) in the event shares of Class A Common
                    Stock are traded on a national stock exchange, the
                         trading price for fifteen (15) consecutive trading days
                         of Class A Common Stock on such exchange is equal to or
                        greater than $0.75 per share, increasing at a rate per
                 annum of 8% from the date of the closing of the
                    exchange offer through the date of conversion (the
                         "Mandatory Conversion Price"), (ii) the issuance by ION
                     of Class A Common Stock at an issue price per share
                         equal to or greater than the Mandatory Conversion Price
                 with an aggregate consideration of no less than
                      $100,000,000 in such issuance, or (iii) a nationally
                  recognized investment bank chosen by the Company
                    pursuant to Board action values a share of Class A
                        Common Stock at an amount equal to or greater than the
Mandatory Conversion Price.   

Adjustments to           The conversion prices shall be subject to customary    
Conversion Price         adjustments for stock splits, dividends,               
                    recapitalizations, below market issues and similar
events.                       

Voting                   Holders of shares of Series C Convertible Preferred    
         shall not be entitled to voting rights.

Registration Rights      The holders of Series C Convertible Preferred shall    
                      enter into a registration rights agreement with ION,
                         pursuant to which the holders shall have demand rights,
                      and piggyback rights and other customary terms to be
                        negotiated by the parties in the event of a conversion
                       of Series C Convertible Preferred into Class A Common
Stock.                        

Transferability          Series C Convertible Preferred shall be freely         
                     transferable, subject to compliance with securities
                        laws and in the case of Series C Convertible Preferred
                       issued to CLP, the NBCU Right of First Offer and Last
Offer.                        

Other Terms              The Series C Convertible Preferred shall include       
                        customary minority protections for the benefit of NBCU
and CLP.                      

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                                                                      Schedule F

 Term Sheet for the Series D Non-Convertible Preferred Stock
 -----------------------------------------------------------

Issuer                   ION.                                                   

Holder                   NBCU.                                                  

Ranking                  Junior to the Senior Debt Securities, the Subordinated 
                       Debt, the Convertible Subordinated Debt, the Series A
                   Convertible Preferred, the 14-1/4% Preferred, the
                      9-3/4% Preferred, the Series B Convertible Preferred
                   but senior to the Series C Convertible Preferred.

Maturity                 August 2013.                                           

Liquidation              The liquidation preference for each share of Series D  
Preference               Non-Convertible Preferred shall be the greater of      
                   $10,000 per share plus any accumulated and unpaid
                         dividends from the issue date through and including the
date of liquidation.          

Dividend                 As and if declared by the Board, 8% annual simple      
                dividend payable quarterly in arrears in cash.

Call Protection          Series D Non-Convertible Preferred shall not be        
callable prior to maturity.   

Conversion               Series D Non-Convertible Preferred shall not be        
convertible at any time.      

Voting                   Holders of shares of Series D Non-Convertible Preferred
         shall not be entitled to voting rights.

Registration Rights      The holders of Series D Non-Convertible Preferred shall
                      enter into a registration rights agreement with ION,
                         pursuant to which the holders shall have demand rights,
                  piggyback rights and other customary terms to be
negotiated by the parties.    

Transferability          Series D Non-Convertible Preferred shall be freely     
                      transferable, subject to applicable securities laws.

Other Terms              Except as outlined in this term sheet, the other rights
                and provisions of the Series D Non-Convertible
                        Preferred shall be substantially similar to the Series
          B Convertible Preferred and the Series D
                   Non-Convertible Preferred shall include customary
              minority protections for the benefit of CLP.

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                                                                      Schedule G

 Exhibit 1. Composition of Subordinated Debt, Convertible Subordinated Debt,
14-1/4% Preferred, 9-3/4% Preferred, Series A Convertible Preferred, and
Series B Convertible Preferred, Subject to the Exchange Offer and the 
Preliminary Transactions

[See attached spreadsheet]

Exhibit 2. Transfer of Convertible Subordinated Debt from NBCU to CLP,
Subject to the Exchange Offer and the Preliminary Transactions

[See attached spreadsheet]

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                                   Schedule G(1)

                                                        [Enlarge/Download Table]


--------------------------- -------------------------------------------------------------------------------------------------------
       % Exchanged                                                     Subordinated Debt                                           
--------------------------- -------------------------------------------------------------------------------------------------------
   14.25%         9.75%                  CIG              CIG                              14.25%            9.75%                 
  Preferred     Preferred             Tender         Exchange              NBCU         Preferred        Preferred        Subtotal 
-------------- ------------ ----------------- ---------------- ----------------- ----------------- ---------------- ---------------
                                                                                                                                   
     0%            0%            $61,114,757     $114,948,971      $365,000,000                $0               $0    $541,063,728 
     10%           10%           $61,114,757     $106,581,289      $340,182,185       $33,267,644       $7,311,018    $548,456,892 
     20%           20%           $61,114,757      $96,453,265      $309,074,377       $66,535,288      $14,457,744    $547,635,430 
     30%           30%           $61,114,757      $86,361,166      $278,094,936       $99,802,932      $21,440,176    $546,813,967 
     40%           40%           $61,114,757      $76,304,992      $247,243,862      $133,070,576      $28,258,317    $545,992,504 
     50%           50%           $61,114,757      $66,284,744      $216,521,156      $166,338,220      $34,912,165    $545,171,042 
     60%           60%           $61,114,757      $56,300,421      $185,926,817      $199,605,863      $41,401,720    $544,349,579 
     70%           70%           $61,114,757      $46,352,024      $155,460,845      $232,873,507      $47,726,983    $543,528,116 
     80%           80%           $61,114,757      $36,439,552      $125,123,240      $266,141,151      $53,887,953    $542,706,653 
     90%           90%           $61,114,757               $0                $0      $299,408,795      $59,884,631    $420,408,183 
    100%          100%           $61,114,757               $0                $0      $332,676,439      $65,717,016    $459,508,212 
-------------- ------------ ----------------- ---------------- ----------------- ----------------- ---------------- ---------------

                                                        [Enlarge/Download Table]

--------------------------- ---------------------------------------------------------------------------------------
       % Exchanged                                             Preferred Stock                                     
--------------------------- ---------------------------------------------------------------------------------------
   14.25%         9.75%               14.25%            9.75%               CIG              NBCU                  
  Preferred     Preferred          Preferred        Preferred          Series A          Series B         Subtotal 
-------------- ------------ ----------------- ---------------- ----------------- ----------------- ----------------
                                                                                                                   
     0%            0%           $475,252,056     $164,292,539                $0                $0     $639,544,595 
     10%           10%          $427,726,850     $147,863,285        $7,256,571       $25,928,927     $608,775,633 
     20%           20%          $380,201,645     $131,434,031       $16,273,484       $58,147,846     $586,057,006 
     30%           30%          $332,676,439     $115,004,777       $25,254,472       $90,238,397     $563,174,086 
     40%           40%          $285,151,234      $98,575,523       $34,199,534      $122,200,582     $540,126,873 
     50%           50%          $237,626,028      $82,146,270       $43,108,671      $154,034,399     $516,915,368 
     60%           60%          $190,100,822      $65,717,016       $51,981,883      $185,739,850     $493,539,571 
     70%           70%          $142,575,617      $49,287,762       $60,819,169      $217,316,933     $469,999,481 
     80%           80%           $95,050,411      $32,858,508       $69,620,530      $248,765,649     $446,295,098 
     90%           90%           $47,525,206      $16,429,254      $104,948,971      $375,000,000     $543,903,431 
    100%          100%                    $0               $0      $104,948,971      $375,000,000     $479,948,971 
-------------- ------------ ----------------- ---------------- ----------------- ----------------- ----------------

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                                                        [Enlarge/Download Table]

                                                   Schedule G(2)                                                                   
---------------------------- ----------------------------------------- ----------------------------------------- ------------------
        % Exchanged                       Mechanical                                      Economic                 Consideration   
---------------------------- -------------------------------------- --------------------------------------------                   
    14.25%         9.75%        CIG Convertible   NBCU Convertible         CIG Convertible     NBCU Convertible   Transferred From 
  Preferred      Preferred    Subordinated Debt  Subordinated Debt       Subordinated Debt    Subordinated Debt        NBCU to CIG 
--------------- ------------ ------------------- ------------------ ----------------------- -------------------- ------------------
                                                                                                                                   
      0%            0%             $104,948,971       $375,000,000            $114,948,971         $365,000,000        $10,000,000 
     10%            10%             $97,692,400       $349,071,073            $106,581,289         $340,182,185         $8,888,889 
     20%            20%             $88,675,487       $316,852,154             $96,453,265         $309,074,377         $7,777,778 
     30%            30%             $79,694,499       $284,761,603             $86,361,166         $278,094,936         $6,666,667 
     40%            40%             $70,749,437       $252,799,418             $76,304,992         $247,243,862         $5,555,556 
     50%            50%             $61,840,300       $220,965,601             $66,284,744         $216,521,156         $4,444,444 
     60%            60%             $52,967,088       $189,260,150             $56,300,421         $185,926,817         $3,333,333 
     70%            70%             $44,129,802       $157,683,067             $46,352,024         $155,460,845         $2,222,222 
     80%            80%             $35,328,441       $126,234,351             $36,439,552         $125,123,240         $1,111,111 
     90%            90%                      $0                 $0                      $0                   $0                 $0 
     100%          100%                      $0                 $0                      $0                   $0                 $0 
--------------- ------------ ------------------- ------------------ ----------------------- -------------------- ------------------

        N.B. - To the extent the amount of subordinated debt received by CLP
   under the CIG Tender section of this Schedule G(1) is less than
         $61,114,757, CLP will be entitled to modify the exchange ratio of its
          preferred instruments into convertible subordinated debt such that the
    incremental capacity in the basket represented by the difference
        between the $61,114,757 and the amount of subordinated debt received
        by CLP is filled by the Citadel convertible preferred. Any amount of
        incremental convertible subordinated debt received by CLP under this
   provision would reduce the amount of Series A-1 preferred stock
otherwise deliverable to CLP in the Transaction.            

                                                                      Schedule H

Term Sheet for the NBCU Option I
--------------------------------

Issuer                   Newco.                                                 

Holder                   NBCU.                                                  

NBCU Option I            NBCU and Newco shall enter into a call agreement       
                       providing for the grant by Newco to NBCU of an option
                       (the "NBCU Option I") to acquire 15,455,062 shares of
                      Class A Common Stock and 8,311,639 shares of Class B
Common Stock.                 

Exercise Price           The exercise price of the NBCU Option I shall be $0.40 
                       per share of Class A Common Stock and $0.40 per share
           of Class B Common Stock, payable in cash.

Option Period            The NBCU Option I shall be exercisable at any time     
                         during the five-year period beginning on the earlier of
                  the business day following (i) the six (6) month
                        anniversary of the Call Closing and (ii) the Delisting
                        Date (as such date may be extended, the "NBCU Option I
Period").                     

                 The NBCU Option I shall be renewable by NBCU in
                         five-year increments, provided, that, the CLP Put Right
                        and NBCU Call Right shall automatically be extended to
        be co-terminus with the NBCU Option I.

Option Exercise          The holder may not exercise the NBCU Option I prior to 
                         the later of the business day following (i) the six (6)
                        month anniversary of the date of the grant of the NBCU
                       Option I and (ii) the receipt of FCC approval and any
                        other required Governmental approvals (the "Restricted
                  Period"). After the expiration of the Restricted
                      Period, the holder may exercise the NBCU Option I at
                        any time during the NBCU Option I Period by delivering
                   a notice of exercise to Newco (the "NBCU Option I
Exercise Notice").            

Option Closing           The closing of the purchase and sale of the shares     
                        after the delivery of an NBCU Option I Exercise Notice
                  shall occur as promptly as practicable after the
                        delivery of the NBCU Option I Exercise Notice, subject
                      to the receipt of all requisite third party consents
                       and governmental approvals, including approval of the
                       FCC, provided, that, no option exercise will be valid
                      if the closing has not occurred within eighteen (18)
                    months following the delivery of the NBCU Option I
Exercise Notice.              

Transferability          After expiration of the Restricted Period, the NBCU    
                   Option I shall be freely transferable, subject to
                    applicable FCC and securities laws and the CLP Put
                    Right. The NBCU Option I shall not be transferable
during the Restricted Period. 

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                                                                      Schedule H

Transferability of       CLP may only transfer the shares of Class A Common     
Underlying Shares        Stock and Class B Common Stock underlying the NBCU     
                 Option I in their entirety in connection with a
                        transfer of all of the Subject Securities owned by CLP
                 or its affiliates at the time of such transfer;
                         provided, however, if shares of Class A Common Stock or
                       Class B Common Stock underlying the NBCU Option I are
                       transferred, such shares shall remain subject to NBCU
Option I.                     

Adjustments to           The exercise price of the NBCU Option I shall be       
Exercise Price           subject to customary adjustments for stock splits,     
                  dividends, recapitalizations and similar events.

Representations,         The NBCU Option I Call Agreement shall contain         
Warranties and           customary representations, warranties and covenants to 
Covenants                be negotiated by the parties.                          

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                                                                      Schedule I

 Term Sheet for the NBCU Option II
 ---------------------------------

Issuer                   ION.                                                   

Holder                   NBCU.                                                  

NBCU Option II           NBCU and ION shall enter into a call agreement         
                        providing for the grant by ION to NBCU of an option to
                        acquire 26,688,361 shares of Class B Common Stock (the
"NBCU Option II").            

Exercise Price           The exercise price of the NBCU Option II shall be $0.50
                     per share of Class B Common Stock, payable in cash.

Option Period            The NBCU Option II shall be exercisable at any time    
                      during the five-year period beginning on the date of
                     the Call Closing (as such date may be extended, the
"NBCU Option II Period").     

                    The NBCU Option II shall be renewable in five-year
                      increments, provided, that, (i) the NBCU Option I is
                        also being renewed and (ii) the CLP Put Right and NBCU
                  Call Right shall automatically be extended to be
      co-terminus with the NBCU Option II.

Option Exercise          The holder may exercise, subject to FCC regulations and
                     any other required Governmental approvals, the NBCU
                        Option II at any time during the NBCU Option II Option
                       Period by delivering a notice of exercise to ION (the
    "NBCU Option II Exercise Notice").

Option Closing           The closing of the purchase and sale of the shares     
                        underlying the NBCU Option II after the delivery of an
                        NBCU Option II Exercise Notice shall occur as promptly
                         as practicable after the delivery of the NBCU Option II
                Exercise Notice, subject to the receipt of all
                 requisite third party consents and governmental
                     approvals, including approval of the FCC, provided,
                       that, no option exercise will be valid if the closing
                        has not occurred within eighteen (18) months following
                     the delivery of the NBCU Option II Exercise Notice.

Transferability          The NBCU Option II shall be freely transferable,       
                       subject to applicable FCC and securities laws and the
CLP Put Right.                

Adjustments to           The exercise price of the NBCU Option II shall be      
Exercise Price           subject to customary adjustments for stock splits,     
                  dividends, recapitalizations and similar events.

Reservation for          At all times during the NBCU Option II Period, ION     
Issuance                 shall maintain a sufficient number of authorized but   
                     unissued shares of Class B Common Stock so that ION
                         shareholder approval is not required in connection with
     the exercise of the NBCU Option II.

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                                                                      Schedule I

Representations,         The NBCU Option II Call Agreement shall contain        
Warranties               customary representations, warranties and covenants to 
and Covenants            be negotiated by the parties.                          

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                                                                      Schedule J

Term Sheet for the CLP Put Right and the NBCU Call Right
--------------------------------------------------------

Term                     The CLP Put Right and the NBCU Call Right will be      
                      effective as long as NBCU Option I or NBCU Option II
continues to be outstanding.  

CLP Put Right            Upon the occurrence of the Trigger Event, subject to   
                       receipt of any required FCC approval, Newco will have
                   the right for 30 days thereafter to put (the "Put
                      Exercise Period") to NBCU all of its (i) Convertible
                         Subordinated Debt, (ii) Series A Convertible Preferred,
                         (iii) Series C Convertible Preferred, (iv) Warrants and
                    (v) Class A Common Stock issued upon conversion or
                exercise of any of the foregoing securities or
                      currently held by CLP or its affiliates, (excluding,
                      for the avoidance of doubt, shares of Class A Common
                       Stock included in the Call Shares) (collectively, the
                      "Subject Securities") in an amount not to exceed the
               amount of the Subject Securities owned by CLP
                       immediately following consummation of the Transaction
(the "Maximum Amount").       

NBCU Call Right          After the Trigger Event, if CLP has not exercised the  
                         CLP Put Right during the Put Exercise Period, NBCU will
                        have the right for 30 days after the conclusion of the
                       Put Exercise Period (the "Call Right Period") to call
all of the Subject Securities.

Renewable                If CLP does not exercise the CLP Put Right during the  
                         Put Exercise Period and NBCU does not exercise the NBCU
                  Call Right during the Call Right Period, the Put
                        Exercise Period and Call Exercise Period will renew on
                         each of the first five (5) anniversaries of the Trigger
Event.                        

Purchase Price           Upon consummation of the CLP Put Right, following      
                  receipt of all necessary FCC or other regulatory
                       approvals, NBCU will pay CLP (or its transferee) cash
               equal to the fair market value of the Subject
                   Securities. Upon exercise of the NBCU Call Right,
                 following receipt of all necessary FCC or other
                 regulatory approvals, NBCU will pay CLP (or its
                   transferee), cash equal to the greater of (x) the
                    accreted amount of the Subject Securities (with no
                        value attributed to the common stock currently held by
                         CLP) plus the conversion price attributed to any common
                      stock obtained by CLP upon conversion or exercise of
                      Subject Securities) and (y) the fair market value of
                        the Subject Securities. The parties will in good faith
                       seek to agree at the time of the put/call on the fair
                  market value of the Subject Securities and if an
                         agreement cannot be reached, the fair market value will
                   be determined by an independent investment banker
                      acceptable to the parties. Fair market value will be
                      determined as of the date of the exercise of the CLP
                      Put Right or the NBCU Call Right, as applicable, and
                       shall accrue interest at LIBOR plus one-hundred (100)
                        basis points as of the date of the exercise of the CLP
                  Put Right or the NBCU Call Right, as applicable,
                       through the closing of the CLP Put Right or NBCU Call
Right.                        

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                                                                      Schedule J

Transferability          If CLP transfers any of its Subject Securities to a    
                    non-affiliated party (after compliance with NBCU's
                       Right of First Offer and Last Offer), such securities
                        shall no longer be subject to the CLP Put Right or the
                    NBCU Call Right. In the event CLP transfers all or
                      substantially all of its Subject Securities, CLP may
                       transfer the CLP Put Right to the transferee, subject
                         to the transferee being subject to the NBCU Call Right.
                     Any transferee will be prohibited from putting more
                        than the Maximum Amount of securities to NBCU. For the
                    avoidance of doubt, CLP may only transfer the Call
                        Shares in their entirety in connection with a transfer
                      of all of the Subject Securities owned by CLP or its
                      affiliates at the time of such transfer and the Call
                       Shares shall always be subject to NBCU Control Option
I.                            

Other Terms              The CLP Put Right and the NBCU Call Right shall contain
                  customary terms to be negotiated by the parties.

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                                                                      Schedule K

 Term Sheet for the Warrants
 ---------------------------

Issuer                   ION.                                                   

Holder                   Newco.                                                 

Term                     Seven years beginning on the issuance date (the        
"Warrant Period").            

Underlying               100,000,000 shares of Class A Common Stock.            
Securities                                                                      

Warrant Exercise         The holder(s) of the Warrants may exercise the Warrants
                         in whole or in part at any time prior to the expiration
of the Warrant Period.        

Exercise Price           $0.75 per share, which must be paid by the holder in   
cash and not on a net basis.  

Adjustments to           The exercise price of the Warrants and number of shares
Exercise Price           underlying the Warrants shall be subject to customary  
          adjustments for stock splits, dividends,
       recapitalizations and similar events.

Transferability          The Warrants shall be freely transferable, subject to  
                        applicable securities laws and the NBCU Right of First
Offer and Last Offer.         

Other Terms              The Warrants shall contain customary terms to be       
                       negotiated by the parties and shall include customary
              minority protections for the benefit of CLP.

30

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘SC 13D/A’ Filing		Date		First		Last			Other Filings
		12/31/07		8					8-K
		6/15/07		5					8-K,  SC TO-I/A
		5/6/07		4
Filed on:		1/18/07							8-K
		1/17/07		1		2			3,  8-K
		1/16/07		2
		12/31/06		8		9			10-K
		9/30/06		2		9			10-Q,  13F-NT
		5/15/06		2		8
		11/7/05		1		6			3,  4,  8-K
									List all Filings