CONFIDENTIAL MEMORANDUM OF UNDERSTANDING

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President, Telepictures

EVP, AOL

15 August 05

16 August 05

“Brand Website”: collectively refers to the External Website and the Custom Website.

“External Website”: a robust broadband entertainment and entertainment news related destination website located at the domain described below and may be accessed by the general Internet public.

“Custom Website”: a website located within the ▇▇▇.▇▇▇ domain that is substantially the same as the External Website, except that Custom Website will include AOL navigational elements (i.e., AOL header and footer), and will be accessed from the AOL Service, the AIM Service, ▇▇▇.▇▇▇, Netscape, and any other website or service owned or controlled by AOL (collectively, the “AOL Network”). Other than the AOL navigational elements, in all other material respects the experience of consumers who visit the External Website and of consumers who visit the Custom Website will be substantially the same.

Domains: The External Website will be initially located at a domain selected by the MC that references the Brand. The Custom Website will be initially located within the ▇▇▇.▇▇▇ domain and will reference the Brand.

MediaMetrix Measurements: AOL will request that the MediaMetrix measurements (e.g., unique visitors) for both the External Website and the Custom Website be rolled-up and consolidated into a “Network” in the

MediaMetrix reports as a custom entity, such as in, but not limited to, the reports currently marked as “Media Sets – With Duplication”. AOL will use commercially reasonable efforts to have MediaMetrix provide the measurements as described above.

Specifications: The specifications and schedules, features, content, elements, look and feel, and branding (the “Specifications”) for the initial Brand Website are specified in Schedule 1. The Specifications for the Brand Website may be revised from time to time by the MC.

TP Provided Content: Entertainment-related audio-visual content owned and provided by TP to the JV for use in the Service, including any such content that is repurposed or otherwise modified specifically for use in the Service, but excluding any such content that constitutes JV Produced Content (as defined below).

JV Produced Content: Original content produced by the JV, or on behalf of the JV by another party, for use in the Service, including live and animated content (e.g., live webcasts, interviews, shorts, other filmed or animated programs, etc.) and online content (e.g., screensavers, wallpapers, downloads, etc.).

Third Party Content: Content acquired or licensed from third parties, as selected and approved by the MC, for use in the Service.

Approvals: The JV, with assistance from TP, shall be responsible for obtaining all necessary approvals, consents and other clearances (collectively, “Approvals”) related to the TP Provided Content, JV Produced Content and Third Party Content (collectively, the “Content”), except for any TP Provided Content for which TP has already obtained Approvals for specific uses prior to such content being provided to the JV for such uses (the “Pre-Cleared TP Provided Content”).

Pre-Cleared TP Provided Content: TP Provided Content will be Pre-Cleared TP Provided Content only for those specific uses for which TP has obtained Approvals, i.e., such Approvals are use-specific. For all non-approved uses, such TP Provided Content will not be Pre-Cleared TP Provided Content. In determining whether any TP Provided Content is Pre-Cleared TP Provided Content for a specific use, the practices, procedures and policies of TP for Approvals will be followed.

Costs and Expenses:

Non-Reimbursable Expenses: TP Provided Content is part of the TP Contribution and will not be a Reimbursable Expense (as defined in Section 7.4), except that the costs and expenses incurred in digitizing any TP Provided Content provided initially to the JV after the start of the JV will be a Reimbursable Expense. If TP uses any TP Provided Content outside of the JV, TP will separately digitize such content and any digitization costs

Reimbursable Expenses: The following are Reimbursable Expenses: (i) costs and expenses related to the production, acquisition or licensing of JV Produced Content or Third Party Content; (ii) costs and expenses incurred in connection with obtaining any necessary Approvals relating to any of the Content (other than the Pre-Cleared TP Provided Content) provided initially to the JV; and (iii) participations and any other related third party payments (e.g., licensing fees, etc.) payable in connection with the use of the Content in the Service.

Ownership and Licenses: Ownership of the Content and licenses relating thereto are provided for in Section 11.

Removal of Content: Each of TP and AOL shall have the right to request the removal of, and the JV will so remove as soon as reasonably practicable, any allegedly infringing, defamatory, libelous, slanderous, damaging, obscene, indecent, illegal, or offensive Content from the Brand Website.

AOL Provided Technology: Content management systems, publishing systems, design templates and associated source files, AIM presence, and any other technology made available by AOL to the JV for use in the Service, but excluding any AOL technology that constitutes JV Developed Technology (as defined below).

JV Developed Technology: Technology developed by the JV, or on behalf of the JV by another party, for use in the Service, including any technology developed by AOL specifically for use in the Service.

Third Party Technology: Technology acquired or licensed from third parties, as selected and approved by the MC, for use in the Service.

Approvals: The JV, with assistance from AOL, shall be responsible for obtaining all necessary Approvals related to the JV Developed Technology and Third Party Technology, and AOL will be responsible for obtaining all necessary Approvals related to the AOL Provided Technology.

Costs and Expenses:

Non-Reimbursable Expenses: AOL Provided Technology (including any costs and expenses related to approvals and clearances) is part of the AOL Contribution and will not be a Reimbursable Expense.

Reimbursable Expenses: The following will be Reimbursable Expenses: (i) costs and expenses related to the production, acquisition or licensing of JV Developed Technology or Third

Ownership and Licenses: Ownership of the Technology and licenses relating thereto are provided for in Section 11.

Product Development: Design and development of the Brand Website.

Hosting and Streaming: Procuring and maintaining the production equipment for the Brand Website, purchasing domains, and procuring and maintaining the transmission of Brand Website information to the Internet.

Advertising Sales and Operations: Selling of all advertising and sponsorships in connection with the Brand Website, and fulfilling and serving all sold advertising and sponsorships, in each case as more fully described in Section 9.

Reports: To the extent consistent with AOL’s generally-applicable internal policies and normal business practices, providing to the JV monthly reports, presentations, projections, updates and other relevant information relating to (i) the Carriage Plan (as defined herein), (ii) the sales of advertisements and sponsorships handled by AOL for the Branded Website (including revenue information), (iii) traffic information, unique visitors, page views, impressions; and other related or similar information and data, (iv) information related to the performance reviews set forth in Section 10, and (v) any other related materials that the MC may request or require, including any information relating to changes to ▇▇▇.▇▇▇ or its strategies or policies that may have a material impact on the Branded Website, the Brand or the Service.

Costs and Expenses: To the extent that the costs and expenses incurred in connection with Product Development, Hosting and Streaming, and Advertising Sales and Operations are consistent with the Annual Budget and Business Plan, such costs and expenses will be Reimbursable Expenses.

Brand References within ▇▇▇.▇▇▇: AOL will reference the Brand within ▇▇▇.▇▇▇ where technically and aesthetically feasible. Such Brand references may include the use of Brand logos, trademarks or other intellectual property.

Placement within the Celebrity News Section of ▇▇▇.▇▇▇: Content from the Custom Site will be prominently featured in the Celebrity News main page of ▇▇▇.▇▇▇. Such promotions will rotate through the placements on the Celebrity News main page in accordance with, and will be considered part of, the Carriage Plan. For clarification, AOL is not obligated to provide links to the Celebrity News main page or to have a Celebrity News main page.

Preferred Relationship. During the first two (2) years after the launch of the Brand Website, AOL and TP will not materially enhance or develop a Celebrity News Website within ▇▇▇.▇▇▇ or the AOL Service (including ▇▇▇▇▇▇▇.▇▇▇ in the case of TP or the entertainment news section of ▇▇▇.▇▇▇ in the case of AOL) that materially impairs the profitability or competitiveness of the Brand Website. “Celebrity News Website” shall mean any website featuring, as its primary offering and purpose, the distribution of video celebrity news content and shall specifically not include any general, sports, political, music or other news focused websites or services.

Membership: Five (5) members, of which two (2) are from AOL, two (2) are from TP and the fifth is the GM (as defined below). Initially, the ME (as defined below) will not be a member of the MC, but either Party may later request that the ME be added to the MC, and if such a request is made by a Party, the MC will take the necessary actions to add the ME as a member of the MC.

Proxies: Each of the two (2) AOL MG members and two (2) TP MC members may delegate and appoint a proxy. AOL or TP, as the case may be, will promptly inform the MC of any such proxy appointment.

Voting: The unanimous vote of the two (2) AOL MC members and two (2) TP MC members is required for the approval of any matters as set forth below or elsewhere in this Term Sheet. The GM and, if later added to the MC, the ME, will be non-voting members of the MC. All matters to be decided or otherwise handled by the MC shall be done so in a timely manner.

Responsibilities:

Changing the composition of the MC or the vote required for decisions of the MC.

Making and approving any modifications to the Specifications set forth in Schedule 1.

Preparing and approving the Annual Budget and Business Plan, all other reports, presentations and projections, all updates or modifications to the Annual Budget and Business Plan, and any other matters that TP and/or AOL (and/or the MC) may request or require.

Supervising and managing the programming, Content and Technology of the Service, including the Brand Website.

Supervising and managing all branding, marketing and promotions for the Service, including the Brand Website (excluding (i) the AOL Promotions (as defined below) and (ii) the sale of advertisements and sponsorships handled by AOL), including developing and implementing related strategies and policies.

Coordinating with AOL the AOL Promotions, including the make-up of the Carriage Plan (as defined below) and any material changes thereto, and the sale of advertisements and sponsorships handled by AOL for the Brand Website.

Supervising and managing the day-to-day operations of the JV and the Service.

Hiring, firing, reviewing and supervising the GM, the ME and the Operations Staff.

Negotiating, approving and entering into contractual relationships with third parties consistent with the practices, procedures and policies of TP and AOL.

Handling all other operational and financial matters relating to the JV and the Service.

Developing and implementing strategies and policies for the JV and the Service, including formation of a separate corporate entity for the JV (and related matters), distribution in other media and platforms, addition of other revenue streams, etc.

Developing and implementing strategies and policies relating to the usage of any JV Produced Content and any JV Developed Technology outside of the Service and the JV.

Establishing the terms of service and privacy policies of the Brand Website, which terms of service and privacy policies will be consistent with the requirements of Time Warner Inc. (“TWX”), AOL and/or TP, as applicable.

Coordinating matters and issues among the JV, AOL and TP.

Handling all other matters relating to the JV and the Service and such other matters, duties and responsibilities as AOL and TP may mutually agree.

Delegation: The MC may approve the delegation of any or all of its responsibilities to the GM, ME and/or Operations Staff.

Meetings: The MC will meet at regular intervals (and not less than quarterly) and at such other times as necessary to conduct, supervise and manage the business of the JV and the Service. Meetings of the MC shall be held at such location as determined by the MC. MC members may participate in meetings of the MC by telephone, video conference or other electronic means, as well as in person.

Quorum: A quorum of at least two (2) TP MC members and two (2) AOL MC members must be present (in person or by their proxies) to conduct business at any MC meeting and no MC meeting shall be held at which a quorum is not present: provided, however, that if any MC meeting is adjourned for lack of a quorum, then such MC meeting will be reconvened (the “Reconvened MC Meeting”) on a date not less than fourteen (14) days and not more than forty-five (45) days after the MC meeting that was adjourned for lack of a quorum (or such shorter period as is reasonably required or available under the circumstances), with notice sent to all MC members advising them of the date and time of such Reconvened MC Meeting.

Voting or Quorum Impasses: If the MC is at an impasse because:

Senior Executive Discussions: If either of the above occurs, then such unresolved matter may be submitted to the Chairman and CEO of Warner Bros. and the Chairman and CEO of AOL for further discussions. If the unresolved matter cannot be resolved by these senior executives within a reasonable amount of time, then either party may terminate this Term Sheet and the JV.

Appointment: Appointed and approved by the MC.

Responsibilities: The duties and responsibilities of the GM will be determined by the MC, and will include the day-to-day management and supervision of the business and operations of the JV and the Service and such other duties and responsibilities as may be granted or be delegated to the GM by the MC. All duties and responsibilities delegated to the GM by the MC will be clearly defined and may be set forth in writing at the MC’s discretion.

Compensation: The compensation of the GM, including any bonuses, will be determined, and may be changed from time to time, by the MC consistent with the Annual Budget and Business Plan. The compensation of the GM will be a Reimbursable Expense.

Review by the MC: The MC will review the performance of the GM from time to time and make any modifications to the duties, responsibilities and compensation of the GM as appropriate based on such reviews.

Termination of the GM: If either AOL or TP requests the GM be terminated, the MC shall so terminate the GM after the Parties consult with each other about such termination.

Appointment: Appointed and approved by the MC.

Responsibilities: The duties and responsibilities of the ME will be determined by the MC, and will include the day-to-day management and supervision of the business and operations of the Content and the Service and such other duties and responsibilities as may be granted or be delegated to the ME by the MC. All duties and responsibilities delegated to the ME by the MC will be clearly defined and may be set forth in writing at the MC’s discretion.

Compensation: The compensation of the ME, including any bonuses, will be determined, and may be changed from time to time, by the MC consistent with the Annual Budget and Business Plan. The compensation of the ME will be a Reimbursable Expense.

Review by the MC: The MC will review the performance of the ME from time to time and make any modifications to the duties, responsibilities and compensation of the ME as appropriate based on such reviews.

Termination of the ME: If either AOL or TP requests the ME be terminated, the MC shall so terminate the ME after the Parties consult with each other about such termination.

Positions: The number, responsibilities, compensation and termination of the Operations Staff to be determined by the MC. The compensation of the Operations Staff will be a Reimbursable Expense.

Initial Operations Staff: The initial Operations Staff positions are set forth in Schedule 2, which Schedule 2 is subject to review and modification by the MC.

Review by the MC: The MC will review the performance of the each Operations Staff member from time to time and make any modifications to the duties, responsibilities and compensation of such Operations Staff member as appropriate based on such reviews.

Initial Budget and Business Plan: The initial 2005 Annual Budget and the initial Business Plan are attached as Schedule 3.

Annual Budget: The Annual Budget will be prepared and/or revised annually by the GM and Operations Staff, in accordance with the guidelines and parameters set by the MC, and the final or revised Annual Budget will be approved by the MC. The approved Annual Budget for 2005 is included in the attached Schedule 3.

Business Plan: The Business Plan will be prepared and/or revised annually by the GM and Operations Staff, in accordance with the guidelines and parameters set by the MC, and the final or revised Business Plan will be approved by the MC.

Deviations from Annual Budget and Business Plan. Deviations of 10% or more to any one category of expenditures in the Annual Budget, or in the aggregate above the overall Annual Budget, and/or material deviations to the Business Plan, must be approved by the MC.

Reports, Projections, Updates: The MC (or, if delegated by the MC, the GM, ME and/or the Operations Staff) will prepare monthly reports, presentations, projections, updates to the budgets and business plans, and any other related materials that the MC may request or require.

AOL Contribution:

AOL Provided Technology.

AOL Promotions.

Product Development, Hosting and Streaming, and Advertising Sales and Operations (but only to the extent any such costs and expenses are not the responsibility of the JV as provided for in Annual Budget and Business Plan).

Costs and expenses related to the AOL Contribution will be the sole responsibility of AOL and will not be a Reimbursable Expense.

TP Contribution:

TP Provided Content.

TP Provided Content digitized prior to the start of the JV (TP Provided Content digitized for use initially in the Service after the start of the JV will be a Reimbursable Expense).

Costs and expenses related to the TP Contribution will be the sole responsibility of TP and will not be a Reimbursable Expense.

Total Revenues: Total Revenues will include (i) all monies actually received from sales of advertisements, sponsorships and/or other similar revenue streams for the Brand Website plus (ii) any monies actually received from any Additional Brand Services approved by the MC plus (iii) any monies actually received from any other activities directly attributed to the Service approved by the MC (e.g., online searches, sale of merchandising, etc,).

50/50 Share of Total Revenues: Subject to Section 10.2, Total Revenues will be initially collected by either AOL or TP, and, after being first applied against Reimbursable Expenses, any excess Total Revenues after such reimbursement will be shared 50/50 between AOL and TP, in each case on a quarterly basis pursuant to the mechanics set forth in Section 7.5.

Reimbursable Expenses: All costs and expenses and all other liabilities directly related to the JV (including any liabilities relating to litigation or other third party claims, but excluding the indemnities in Section 16) will be initially incurred and paid by either AOL or TP, in each case consistent with the Annual Budget and Business Plan, or as otherwise approved by the MC, and such costs, expenses and liabilities will be reimbursed to AOL or TP, as the case may be, on a quarterly basis pursuant to the mechanics set forth in Section 7.5.

AOL Expenses: AOL’s Reimbursable Expenses will include the costs and expenses of AOL described in Sections 2.2, 2.3, 2.4 and 6, but exclude the costs and expenses related to the AOL Contribution described in Section 7.2 and the AOL indemnity described in Section 16.1.

TP Expenses: TP’s Reimbursable Expenses will include the costs and expenses of TP described in Section 2.2 and 6, but exclude the costs and expenses related to the TP Contribution as described in Section 7.2 and the TP indemnity described in Section 16.2.

Reimbursement of Reimbursable Expenses: AOL’s Reimbursable Expenses and TP’s Reimbursable Expenses shall be reimbursed to AOL

Mechanics:

General: All revenues and expenses recorded by each of AOL and TP in connection with the JV and the Service will be separately recorded in their respective books and records, and all revenue and expense sharing will be settled in cash as described in this Section 7.5, in each case in accordance with the accounting and financial requirements established by TWX.

Net Cash payments: All cash payments made pursuant to this Term Sheet in connection with the reimbursement of Reimbursable Expenses from Total Revenues and the sharing of any excess Total Revenues after reimbursement of Reimbursable Expenses will be made quarterly on a net cash basis.

Schedule 4: The mechanics for reimbursement of Reimbursable Expenses from Total Revenues and the sharing of any excess Total Revenues after reimbursement of Reimbursable Expenses are set forth on Schedule 4 attached hereto.

Books and Records: Each of AOL and TP will maintain separate books and records accounting for the revenues and expenses associated with the JV, the Brand Website, and the Service. The GM, ME and/or the Operating Staff will maintain appropriate records and financial information consistent with this Term Sheet.

Subject to Sections 8.2 and 10.2, AOL will promote the Content from the Custom Website in ▇▇▇.▇▇▇ and the rest of the AOL Network (the “AOL Promotions”) in accordance with the carriage plan attached as Schedule 5, as such carriage plan may be modified or changed from time to time (the “Carriage Plan”).

The AOL Promotions will rotate through the promotional assets set forth in the Carriage Plan. Subject to Section 8.2, AOL reserves the right to exchange certain promotional assets set forth in the Carriage Plan with other promotional assets of equivalent value.

Notwithstanding anything herein to the contrary, AOL reserves the right to redesign or modify the organization, structure, “look and feel,” navigation and other elements of the AOL Network at any time. In the event such modifications materially and adversely affect any particular AOL Promotions listed within the Carriage Plan, AOL, subject to Section 8.2, will provide alternative promotional assets of equivalent value.

Step 1: Brand Website Performance: The Brand Website must have achieved at least 75% of Projected Unique Visitors and 75% of Projected Page Views for such quarter. If the Brand Website satisfies the requirements of this first step, then this process proceeds to Step 2. If the requirements of this first step are not satisfied, then this process stops.

Step 2: Ad Sales Revenue Performance: AOL must have achieved at least 75% of Pro-Rated Ad Impression Revenues plus Pro-Rated Video Stream Revenues for such quarter. If the requirements of this second step are not satisfied, then this process proceeds to Step 3.

Step 3: Ad Sales Make-Good: AOL shall cure and make-good any quarterly revenue shortfall from Step 2 in the next two (2) consecutive quarters. The Actual Ad Impression Revenues plus Actual Video Stream Revenues for such three (3) consecutive quarter period (shortfall quarter plus 2 make-good quarters) shall be equal to or greater than 75% of Pro-Rated Ad Impression Revenues plus Pro-Rated Video Stream Revenues for the same period. If the requirements of this third step are not satisfied, then this process proceeds to Step 4.

Step 4: Transfer of Ad Sales: TP has the option, but not the obligation, to request that AOL transfer the selling of all advertising and sponsorships for the Brand Website, the fulfilling and serving all sold advertising and sponsorships, and any other related activities, to another entity or group within TWX. If TP elects to exercise such option and make such transfer request, then this process proceeds to Step 5.

Step 5: AOL Option to Repurchase Unsold Inventory:

AOL has the option, but not the obligation, to repurchase the unsold advertisement and sponsorship inventory (the “Unsold Inventory”) for the year following the quarter being measured (the “Repurchase Year”).

At the end of the Repurchase Year, if the requirements of Step 3 are not satisfied, then AOL has the option, but not the obligation, to repurchase the Unsold inventory for the following year (the “Second Repurchase Year”).

AOL may exercise each of the above options only once during the life of the JV in the manner described above.

All Unsold Inventory shall be repurchased by AOL at the rate of $0.75 to the dollar.

If AOL later sells the Unsold Inventory for an aggregate amount that would be in excess of the Unsold inventory being priced at $0.75 to the dollar, then AOL shall pay to TP 40% of such excess and retain the remaining 60% of such excess.

If (i) AOL elects not to repurchase the Unsold Inventory, or (ii) after the Second Repurchase Year the requirements of Step 3 are not satisfied, then the MC will review its options to improve the performance of the advertising sales process and mutually agree to any changes or revisions.

Examples: See Schedule 6 attached hereto.

Defined Terms:

Actual Ad Impression Revenues: the actual ad impression revenues delivered for the period being measured.

Actual Ad Impressions: the actual ad impressions delivered for the period being measured.

Actual Video Stream Revenues: the actual video stream revenues delivered for the period being measured.

Actual Video Streams: the actual video streams delivered for the period being measured.

Projected Ad Impression Revenues: the projected ad impression revenues for the period being measured as set forth the Business Plan.

Projected Ad Impressions: the projected ad impressions for the period being measured as set forth in the Business Plan.

Projected Page Views: the projected page views for the period being measured as set forth in the Business Plan.

Projected Unique Visitors: the projected unique visitors for the period being measured as set forth in the Business Plan.

Projected Video Stream Revenues: the projected video stream revenues for the period being measured as set forth in the Business Plan.

Projected Video Streams: the projected video streams for the period being measured as set forth in the Business Plan.

Pro-Rated Ad Impression Revenues: The product of Projected Ad Impression Revenues multiplied by the lesser of: (i) the result of Actual Ad Impressions divided by Projected Ad Impressions or (ii) one.

Pro-Rated Video Stream Revenues: The product of Projected Video Stream Revenues multiplied by the lesser of: (i) the result of Actual Video Streams divided by Projected Video Streams or (ii) one.

Promotions: If AOL does not deliver the promotions set forth in the Carriage Plan for any given quarter, then AOL shall cure and make-good on such shortfall in the following quarter. If AOL fails to make-good on any shortfall of 25% or more, then AOL’s share of revenues will be reduced in an amount proportionate to such shortfall and TP’s share of revenues will be adjusted upwards accordingly (e.g., if the shortfall is 35%, then AOL’s 50% share of Revenues is reduced by 35%, so that AOL’s share of Revenues will then be 32.5%, and TP’s 50% share of Revenues will increase to 67.5%). If AOL fails to make-good on any shortfall of less than 25%, then AOL shall cure and make-good on such shortfall in subsequent quarters.

Content: If TP does not provide the JV with sufficient content to produce at least an average of thirty (30) weekly video features for any given quarter, then TP shall cure and make-good on such shortfall in the following quarter. If TP fails to make-good on any shortfall of 25% or more, then TP’s share of revenues will be reduced in an amount proportionate to such shortfall and AOL’s share of revenues will be adjusted upwards accordingly (e.g., if the shortfall is 30%, then TP’s 50% share of Revenues is reduced by 30%, so that TP’s share of Revenues will then be 35%, and AOL’s 50% share of Revenues will increase to 65%). If TP fails to make-good on any shortfall of less than 25%, then TP shall cure and make-good on such shortfall in subsequent quarters.

Subject to Section 11.4, all Technology (other than Third Party Technology) will be owned by AOL; provided, however, that after the term of this Term Sheet, AOL may only exploit the JV Developed Technology after entering into a participation agreement or other financial arrangement to be negotiated in good faith between AOL and TP.

AOL will license the Technology to the JV for the duration of the Term (and any renewals thereof) and a portion of AOL’s share of Total Revenues will be payment of the licensing fee for such license.

Subject to Section 11.4, all Content (other than Third Party Content) will be owned by TP; provided, however, that after the term of this Term Sheet, TP may only exploit the JV Produced Content after entering into a participation agreement or other financial arrangement to be negotiated in good faith between AOL and TP.

TP will license the Content to the JV for the duration of the Term (and any renewals thereof) and a portion of TP’s share of Total Revenues will be payment of the licensing fee for such license.

Content and Technology: No Transfer (as defined herein) or termination of this Term Sheet will change the ownership of the Technology or the Content without the written approval of the owner of the Technology or the Content, as the case may be: provided, however, that, notwithstanding the foregoing (except for a Transfer to Newco under Section 11.5 below), after the termination of this Term Sheet and the JV, unless one Party has acquired the rights of the other Party under this Term Sheet pursuant to a Mutually Acceptable Disposition (as defined below), TP may only exploit the JV Produced Content after entering into a participation agreement or other financial arrangement to be negotiated in good faith between AOL and TP, and AOL may only exploit the JV Developed Technology after entering into a participation agreement or other financial arrangement to be negotiated in good faith between AOL and TP.

JV Property: The Parties agree and acknowledge that neither Party shall have the right to use or exploit any JV Property after the termination of this Term Sheet and the JV, except as permitted pursuant to a mutually acceptable disposition of the JV and its assets and liabilities that will be

Section 12,1 Termination: If a Party desires to terminate this Term Sheet and the JV pursuant to Section 12.1, then the terminating Party shall have the right to acquire and purchase all of the non-terminating Party’s interests pursuant to a Mutually Accepted Disposition.

Section 12.2, 12.3, 12.4 or 12.5 Termination: If a Party desires to terminate this Term Sheet and the JV pursuant to Section 12.2, 12.3, 12.4 or 12.5, then AOL and TP shall negotiate in good faith a Mutually Acceptable Disposition.

General Manager

Creative

Editor-in-chief

Supervising Producer

Production Manager

Controller/Accountant

Senior Designer

Production Artist/Multimedia

Segment Producers

Clip Clearance/Librarian

Technology/Software Engineer

HTML Publisher

Jr. Encoding Producer

Quality Control

Business Development

Director

Marketing/Publicity

Director

Administrative Support

Administrative Assistant

Office Manager/AA

Total Positions

Revenue:

Streaming Ads

Banner Ads

Total Revenue

Expenses:

LightningCast Rev Share

Advertising COGS

Total Cost of Revenues

Payroll

Equipment

Original Productions

Wire Services and Feeds

Other

G&A

Total Production Expenses

Network

Software Development

Publicity

Marketing

Total Expenses

OIBDA

OIBDA Margin

Less: Dep & Amt

Operating Income/(Loss)

Taxes

EBIA

Dep & Amt

Capital Expenditures

Cash Flow

Headcount

Calculate the “Reimbursable Amount” as follows:

Reimbursable Amount = 50% multiplied by the sum of (ATR – TTR + TRE – ARE).