CONFIDENTIAL Lotte Entertainment Korea Distribution Partnership [Date]

CONFIDENTIAL

Lotte Entertainment

Korea Distribution Partnership

[Date]

Executive Summary

• SPE has been approached by Korea’s Lotte Entertainment to distribute SPE films in Korea and Vietnam

– Seeking theatrical rights in Korea and Vietnam, video rights in Korea only

– SPE would retain all TV rights

• While Korea is a growth market, significant competitive barriers exist

– Majority of market is controlled by large, vertical monopolies

– Local film quotas have led to a strong local film production market, with Korean films often accounting for 50% or more of the box office in a given year

• The terms offered by Lotte represent an opportunity to secure a guaranteed profit stream in Korea at or above historical averages

– Potentially attractive economics for theatrical and video rights

– Many SPE titles are not theatrically released. Additional releases and box office from SPE titles could drive value in TV market, which is retained by SPE

• Opportunities may exist with other Korean distributors, such as CJ

Lotte Entertainment Overview

• The Lotte Group is a large platform of consumer oriented businesses

– One of Korea’s largest conglomerates, with 2009E group revenues of $42B+

– Multiple brands across shopping, tourism, restaurants, and theme parks

• Lotte Entertainment is one of Korea’s largest exhibitors…

– 2nd largest exhibitor, with a 23% share of screens in Korea (all digital multiplexes)

• 54 sites / 411 screens in Korea (projected to grow to 68 sites / 514 screens in 2010)

• 3 sites / 17 screens in Vietnam

• …and a fast-growing, top tier distributor

– 3 of the top 10 films in 2009

– Market share increased from 8.4% in 2008 to 20% in 1H 2009

– Experienced in distributing Hollywood titles, with successful releases of Terminator: Salvation, The Golden Compass and Journey to the Center of the Earth (3D)

SPE Economics in KoreaSPE Korea Performance FY07 - FY10 by Slate Year($M)

FY 2007 Slate FY 2008 Slate

Title Korea BOKorea

Theat. NetKorea Video

netVietnam

Theat. Net Total Title Korea BOKorea


netVietnam

Theat. Net Total

RV na - 0.0 - 0.0 SPIDER-MAN 3 34.1 12.6 0.4 - 13.0

DA VINCI CODE, THE 21.9 7.3 0.5 - 7.7 VACANCY 0.0 (0.0) 0.0 0.0 0.0

CLICK 2.4 (0.2) 0.1 - (0.0) SUPERBAD na - 0.0 - 0.0

MONSTER HOUSE 7.8 2.0 0.2 - 2.3 30 DAYS OF NIGHT na - - - -

TALLADEGA NIGHTS na - 0.0 - 0.0 THIS CHRISTMAS na - - - -

COVENANT, THE 0.0 (0.0) 0.0 0.0 0.0 WALK HARD: THE DEWEY COX STORY na - - - -

GRIDIRON GANG na - 0.0 - 0.0 FIRST SUNDAY na - (0.0) - (0.0)

ALL THE KING'S MEN 0.0 (0.0) 0.0 - (0.0) VANTAGE POINT 7.0 1.6 0.1 (0.0) 1.6

MARIE ANTOINETTE 0.1 0.0 0.0 - 0.1 21 0.7 0.1 0.0 - 0.1

RUNNING WITH SCISSORS (TS) na - - - - PERFECT STRANGER 0.0 (0.0) - - (0.0)

STRANGER THAN FICTION na - 0.0 - 0.0 SURF'S UP 1.9 (0.7) - - (0.7)

CLICK 2.4 (0.2) 0.1 - (0.0) WATER HORSE 0.6 0.1 - - 0.1

PURSUIT OF HAPPYNESS, THE 4.0 0.7 0.2 - 0.8

GHOST RIDER 2.6 0.1 0.2 0.1 0.3

REIGN OVER ME 0.0 (0.0) 0.0 - 0.0

CASINO ROYALE 7.2 0.8 0.5 0.0 1.4

OPEN SEASON 1.9 (0.9) - 0.0 (0.9)

Annual Theatrical & Video Contribution 11.2 Annual Theatrical & Video Contribution 14.1 Korea Office OH (1.0) Korea Office OH (1.0) Net Korea Contribution 10.2 Net Korea Contribution 13.1

FY 2009 Slate FY 2010 Slate*

Title Korea BOKorea


netVietnam

Theat. Net Total Title Korea BOKorea


netVietnam

Theat. Net Total

PROM NIGHT na - 0.0 0.0 0.0 OBSESSED na - 0.0 - 0.0

MADE OF HONOR 0.1 (0.2) 0.0 - (0.1) ANGELS & DEMONS 10.2 2.2 - 0.1 2.2

YOU DON'T MESS WITH THE ZOHAN na - 0.0 - 0.0 TAKING OF PELHAM 1 2 3, THE 1.9 (0.6) - 0.0 (0.6)

HANCOCK 18.0 5.1 0.1 0.0 5.2 YEAR ONE na - 0.0 - 0.0

STEP BROTHERS na - 0.0 - 0.0 UGLY TRUTH, THE 2.0 0.0 - 0.1 0.1

PINEAPPLE EXPRESS na - 0.0 - 0.0 JULIE & JULIA 0.2 0.0 - - 0.0

THE HOUSE BUNNY na - 0.0 - 0.0 ZOMBIELAND na - - - -

NICK AND NORAH'S INFINITE PLAYLIST na - 0.0 - 0.0 STEPFATHER na - - - -

LAKEVIEW TERRACE na - 0.0 - 0.0 MICHAEL JACKSON'S THIS IS IT 0.8 (0.3) - (0.0) (0.4)

QUARANTINE na - 0.0 - 0.0 2012 33.8 11.6 0.2 0.3 12.1

SEVEN POUNDS 1.0 (0.4) 0.0 - (0.4) ARMORED na - - - -

NOT EASILY BROKEN na - - - - DID YOU HEAR ABOUT THE MORGANS? 2.7 0.5 - 0.0 0.5

PAUL BLART: MALL COP na - 0.0 - 0.0 LEGION 0.0 (0.0) - 0.1 0.0

UNDERWORLD: RISE OF THE LYCANS 0.2 0.0 - - 0.0 DEAR JOHN na - - - -

INTERNATIONAL, THE 1.0 (0.5) - - (0.5) BOUNTY HUNTER 3.1 0.7 - - 0.7

FIRED UP na - - - - DISTRICT 9 5.4 1.4 - - 1.4

QUANTUM OF SOLACE 10.1 2.4 - - 2.4 CLOUDY WITH A CHANCE OF MEATBALLS4.6 0.7 - - 0.7

Annual Theatrical & Video Contribution 6.5 Annual Theatrical & Video Contribution 16.9 Korea Office OH (1.0) Korea Office OH (1.0) Net Korea Contribution 5.5 Net Korea Contribution 15.9

*FY10 unreleased titles included at greenlight/budget estimates for Korea.

Proposed Terms of Output Deal

Studio: Sony Pictures Entertainment (all labels)

Distributor: Lotte Entertainment

Term / Fee: 5 Years / $12M per year

Titles: • SPE must submit all titles under all labels to Lotte, with a minimum of 23 titles per year

• Lotte must distribute a minimum of 15 titles per year

Rights / Territory:

• Theatrical, and home video in South Korea

• Theatrical rights in Vietnam

•[Internet rights – IPTV, Internet VOD and Internet Streaming – were initially requested but we believe can be eliminated from the deal]

First Look: • SPE would get “first look” at any Lotte Korean product for purposes of English Language remake

Items for Discussion

• Additional terms to request

– Higher annual license fee and upside participation

– Restructure to allow for upfront payment recognizable in year (either “bonus” or “buy-out” payment)

– Reasonable / narrow definition of Home Entertainment avoid risk to TV revenues

– Subset of films they must take (eg, number of puts or triggers for automatic acceptance)

– Ability to license/sub-distribute any rejected films, or non-theatrical product

• Other items

– Explore alternative partnerships in parallel with Lotte conversations

• TV has relationship with CJ, Korea’s largest distributor

• CJ has recently done an all-markets deal with Paramount and is rumored to be interested in further Studio deals

– Determine accounting treatment

• Ability to recognize advance in FY11

• Methodology for allocating license fees across titles

Next Steps

• Senior management agree to proceed or pass

• Assuming interest:

– Confirm key terms to include in counter

– Alert David Bishop, Steve Mosko, and Keith LeGoy that we plan to engage formally

– Express interest to Lotte and provide counter

– Initiate discussions with CJ

CONFIDENTIAL Lotte Entertainment Korea Distribution Partnership [Date]

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