CONFIDENTIAL Music Publishing Overview July 2010

page 1 Music Publishing: Market Update Based on Banker Input The market for music publishing acquisitions is less robust than in recent years with multiples on strategic deals at roughly 9-10x –Bug Music is seeking 10.8x - 12x; but several strategics (Sony/ATV, Warner Music, and Universal Music Group) are reported to have bid only 9-9.6x before dropping out of the auction process Deals with restrictions on use of copyrights and deals with financial buyers that have decreasing access to bank debt could be as low as 5-6x However, providing seller financing and focusing on tax-driven buyers may allow SPE to achieve our goals and approach a multiple of 7-8x Structure needs to allow SPE to achieve its goals -SPE retains all controls for a defined period (e.g., 10 years), key protections thereafter, and continued access to music indefinitely -Recognize a gain by transferring copyrights -Keep Sony/ATV in place as administrator Target financial buyers with appetite for a highly structured deal -Financial buyers with significant NOLs and/or tax shelters by amortizing assets with a stepped-up basis are buying more net cash flow than strategics, effectively increasing the multiple paid -SPE would offer seller financing to increase returns and price paid; deal structure may be 25% equity, 25% bank debt and 50% seller financing Situation Summary

page 2 Implication for Value LBO driven by IRR of 20-25% IRR With seller financing, implies a high-side multiple of roughly 7.5x Value Method Gain Range $40 – $50MM (after 25 – 30% estimated amortization plus deal expenses) Valuation Range $65 - $75MM $10MM on average last four years (after 25% participations) -SPE average NPS of $14MM -Exclude roughly $0.5MM for co-financed films -Exclude roughly $3.5MM for 25% participations NPS to be Sold

page 3 Next Steps Further analyze the following -Accounting impact of proposed structure (i.e., confirm, seller financing and other structural elements do not create problems with gain recognition) -Necessary Sony Corporate approvals for seller financing -Copyrights and associated revenue to be excluded from a transaction -Likely amortization rate on gain -Average participation percentage to be excluded -SPE’s basis in the asset, if any, and impact on buyer’s tax position Revisit and agree to engage bankers (requires $100K retainer before success fees) and outside counsel August – Prepare for sale -Counsel to diligence copyrights -Bankers to assist with financial analysis (e.g. revenues by property type, vintage analysis, forecast) September – Go-to-market