CONFIDENTIAL – NON-BINDING DISCUSSION DOCUMENT Embassy Row Discussion Document March 26, 2008

1 NON-BINDING DISCUSSION DOCUMENT This document summarizes, at a high level, the general terms of a potential acquisition by Sony Pictures Television Inc. (“SPT” or “Sony”) of Embassy Row LLC. (“Embassy Row” or “ER”). This document is for discussion purposes only and is nonbinding. For the avoidance of doubt, this document does not purport to cover or address all matters that would need to be agreed upon in connection with a binding agreement between the parties. CONFIDENTIAL – NON-BINDING DISCUSSION DOCUMENT

2 Areas of Agreement Both parties agree on the following deal parameters $25MM at close Up-to $50MM of additional consideration ($75MM total consideration) –$15MM of earn-outs assuming business performs as expected –$35MM of upside participation Davies will enter an employment contract with a mutually agreed extension mechanism CONFIDENTIAL – NON-BINDING DISCUSSION DOCUMENT

3 Sony Deal Considerations Sony should recoup its initial $25MM investment before paying earn-outs –This requires us to cover deal amortization each year of roughly $4.4MM, allowing us to be EBIT positive Embassy Row business plan should be achieved in order for Davies to earn $40MM of total consideration ($25MM up-front + $15MM earn-outs) Davies should participate in upside when ER performs above plan We need to reach agreement on how Power of 10 is treated in EBITDA / earn-out thresholds –SPT’s previous EBITDA targets included Power of 10 format and syndication, raising earn-out thresholds –Davies forecast included only EP fees and Chargebacks on Power of 10 –Deal structure will be cleaner if we only include “Acquired EBITDA” for Power of 10 EBITDA (i.e., EP Fees and Chargebacks) CONFIDENTIAL – NON-BINDING DISCUSSION DOCUMENT

4 Embassy Row’s Last Counter-proposal is not Economically Viable for Sony Michael Davies would receive $75MM in compensation with very low growth, he would achieve $65MM in compensation without growing the business at all This analysis excludes any post-term participation

5 Revised Embassy Row Forecasts If Embassy Row achieves its revised forecast, Sony can pay up-to $15MM of earn-outs while covering deal amortization and achieving EBIT profitability Additional earn-outs would be tied to exceeding forecast

6 $25.0MM up-front payment Up to $50.0 MM of potential earn-outs tied to exceeding EBITDA thresholds –EBITDA targets include Power of 10 EP Fees and Chargebacks, exclude Power of 10 format and syndication profits –Tier 1 (First $15.0MM) – Fully earned when EBITDA forecasts are reached; prorated between a floor and EBITDA targets –Tier 2 (Next $35MM) – Above EBITDA forecasts; Davies receives 40% of EBITDA up to a total cap of $35MM Revised Sony Proposal

7 Comparison of Previous and Current Sony Offers

8 Other Issues for Discussion Diplomatic structure First look on SPT library formats Employment contract renewal mechanism CONFIDENTIAL – NON-BINDING DISCUSSION DOCUMENT

9 APPENDIX

10 $25.0MM up-front payment Up to $50.0 MM of potential earn-outs tied to exceeding EBITDA thresholds and generating recurring profits –EBITDA targets included all Power of 10 profits (including format and syndication profits) –Tier 1 (First $15.0MM) – Once ER hits threshold EBITDA Davies receives 50% of incremental EBITDA up to a cap –Tier 2 (Next $35MM) – Once Tier 1 earn-outs are achieved, if ER has generated a minimum amount of format profits in each year, Davies receives 40% of incremental EBITDA up to a cap. If minimum format profits are not achieved, Davies earns 15% of incremental EBITDA up to a cap Previous Sony Proposal

11 Embassy Row’s Last Counter Proposal $25.0MM initial consideration Earn-Out based on a multiple of “Profits”* as defined below, for applicable FY (4/1 – 3/31): FY% of Profits*Multiple Payment Date (a)2008 (b) % of average of 2008 & 20097April 2010 (c)201025%7April 2011 (d)201150%7April 2012 (e) % of average profits for , less Advance and amounts already paid under (b) – (d), with a floor payment of an additional $15 million (on top of Advance) and a cap of $75 million (inclusive of Advance). 7April 2013 *“Profits” defined under GAAP, prepared consistently with ER business plan of [date], and declared in audited and certified statement. "EBITDA" means, for any period, net income (or net losses) of ER determined exclusive of any extraordinary fees and expenses, plus (i) all interest expense in respect of ER's debt, (ii) the total expense of ER for depreciation and amortization, and (iii) provisions for all taxes of ER for such period, in each case calculated in accordance with GAAP. CONFIDENTIAL – NON-BINDING DISCUSSION DOCUMENT

12 ER Fiscal Year Projections 75%25% In order to fiscalize the calendar year figures for a year ending March 31st, SPT takes 9 months of the previous calendar year (75%) and 3 months of the current calendar year (25%)

13 Earn-out Target Estimates Notes: (1)Davies’ own calendar year forecast through Calendar 2011; grown 15% per year after; converted to fiscal years ending March 31 FY09FY10FY11FY12FY13 Davies Targets (Fiscalized) (1) $5.5$6.8$8.1$9.2$10.5 Power of 10: Format and First Run Total$6.4$11.1$15.4$20.1$26.7 Earn-out TargetN/A$10.0$12.0$15.0$20.0 Difference in Earn-out Target (EBITDA Levels) may be tied to differing views of Power of 10 profitability levels