PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT WORK PRODUCT Operating Model September 2010 WORK IN PROGRESS

Proposed Operating Model Operating Parameters by Function: page 1 PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT WORK PRODUCT WORK IN PROGRESS

page 2 PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT WORK PRODUCT WORK IN PROGRESS New Release Physical Considerations If Newco handles sales and marketing for any of the above, Newco may have to handle as a class of trade (not customer by customer) and may have to handle both partners the same way (with regard to revenue share vs. wholesale, windowing, output, etc.) or potentially “Chinese wall” teams for each partner The definition of “class of trade” may also require further legal discussion If one class of trade is handled by Newco and another is not, need to review complexities created in windowing and wholesale pricing between various physical models and physical vs. digital models Class of TradePossible Models Complexity of Deal Brick-and-mortar RetailWholesaleLow Brick-and-mortar RentailRev share vs. WholesaleMedium Output vs. Non-output SubscriptionRev shareHigh Window vs. non-Window Output vs. Non-output KioskCopy Depth vs. WholesaleHigh Window vs. non-Window Output vs. Non-output

Operating Model page 3 PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT WORK PRODUCT WORK IN PROGRESS Studio Partner #1 Studio Partner #2 Newco Customers Third Party Distributor(s) (outside Newco, services and distributor independently determined/negotiated by studio but potential for synergies) Returns Processing Returns New Release (Physical and Digital) Catalog - digital Catalog (Physical Only) Pricing, Terms & Conditions Sales and Marketing Invoicing, Cash Collections, Potential Consolidated Distribution, VMI Potential Other Studio’s

Newco Assumptions: –50 / 50 J.V.:Non-profit Overhead costs split 50/50 All product costs passed as actuals –Performance Metrics will be developed Financial: Performance vs Budget Operational: Returns, Freight, Inventory Turns, Merchandising Incentive plan based on performance vs Budget’s (Financial and Operational) Pro’s & Con’s –Pro’s Allows partner studios to independently maintain strategic control on New Release, Digital and VOD –Windows, Wholesale Pricing and Testing Customer Centric May position partner studios to migrate New Release IF deemed the right path to proceed in the future Minimal systems investment (3 rd party distributor currently performs function) –Allows for 3 rd party distributor to take on other customers Independently to create greater efficiencies –Partner studios can “sunset” operational systems –Con’s More complicated model (logistically) –Each partner studio separately coordinating logistics on digital and physical catalog programs with Newco –Deep Catalog SVOD Maintaining New Release decreases OH savings: Could be viewed as “half pregnant” page 4 PRIVILEGED AND CONFIDENTIAL ATTORNEY CLIENT WORK PRODUCT WORK IN PROGRESS Assumptions and Observation