Draft, Non Binding, for Discussion Purposes Only

DRAFT, NON BINDING, FOR DISCUSSION PURPOSES ONLY

LondonTV Entertainment Programming Schedule and Creative Services Term Sheet

1.Parties

1.1.Channel Operator: LondonTV City6 Limited (“Channel Operator”) with its principal place of business at Unit 704, Capital Tower, 91 Waterloo Road, London SE1 8RT[LondonTV: please INSERT COMPANY ADDRESS]

1.2.Programmer: Entertainment Networks (UK)Ltd(“Programmer”) with its principal place of business at 25 Golden Square, London W1F 9LU

2.Service

2.1.The Programmershall program up to [10] hours of the daily broadcast schedule on the System with fully cleared entertainment related programmingcomprising an agreed mixture of Features, MOW’s and TV series based on a minimum of [450] commercial hours of programming from an agreed library each year throughout the term. The Programmer shall also provide creative services for the entertainment related programming to be aired on the System at the Channel Operator’s discretion including up to [10 promos per month[RJH1]] and related on-air elements required [details TBC] (collectively “the Service”).

3.System

3.1.The Service shall be made available as part of the Free to Air channel known as LondonTV and broadcast in the Territoryon Freeview, Sky, [Freesatand Virgin, BT Vision, and and on other broadcast TV platforms in the UK[RJH2]].We can agree to discuss streaming of the linear feed via web TV but would be subject to content protection review and understanding of the proposed commercial model

4.Territory

4.1.Freeview - Greater London Area[RJH3]

4.2.Sky, [Freesat,and Virgin, BT Vision] and other broadcast TV platforms – UK and Northern Ireland[RJH4][rights/distribution TBC]

5.Rights

5.1.Programmer grants Channel Operator the non-exclusive right to carry the Service on the System in the Territory during the Term. The parties shall agree the basis on which programming comprised in the Service may be made available to other L-DTPS licensees, so as to collaborate on maximising the opportunities for both parties across the UK’s local TV broadcasters, and to avoid undermining the value of the Service to the Channel Operator. We can agree to discuss this in good faith but can’t commit at this stage as we have no visibility of what the proposed commercial and technical model would look like.

6.Term

6.1.The agreement shall be conditional on the Channel Operator being awarded the L-DTPS licence for London (“Licence”) and shall run from [1 July 2013]the date of its launching the LondonTV channel, expected to be approximately 9 months after the Licence award (“Launch Date”). The initial term will be 5 years and will run to [30 June 2018]from the Launch Date (“Initial Term”). After the Initial Term the Programmerand the Channel Operator [RJH5]shall have the option to extend the Initial Term for a further 2 years under the same terms and conditions provided herein by providing written notice to Channel Operatorthe other party no later than 60 days prior to the expiration of the Initial Term. As used herein, “Term” shall mean the Initial Term together with any renewal thereof. Notwithstanding the fact that the Term does not commence until [1 July 2013]the Launch Date, this Agreement shall be effective, and the respective rights and obligations of the parties shall be of full force and effect on the date hereof. We should reinstate the +2 year extension at our option for now.

7.Fee

7.1.The annual fees shall be as follows:

7.1.1Annual fee of £2.5MM per year with an annual 10% inflation for years 3-5[RJH6].Propose 5% inflation increase as a compromise

7.1.2From 1 July 2015 2 years after the Launch Date (“Revenue Share Date”) the Programmer shall also receive [XX]% share of net advertising revenues based on the sale by Dolphin of 30 second equivalent commercial impacts across the Service on the System in the Territory (as measured by BARB), after deduction of advertising sales and media agency commissions and VAT or related sales tax.

7.1.3The Programmer shall be granted 10 minutes per day of commercial airtime (with no less than 1 minute per hour subject to a maximum of an average of 30 seconds per hour during peak time) during the parts of the schedule programmed by the Programmer as part of the Service for the purpose of promoting other channels or services operated by the Programmer.

8.Call Option

8.1.The Channel Operator shall grant the Programmer a call option to acquire, subject to its having received consent from Ofcom and/or any other appropriate regulatory or governmental body, up to 20% of the fully diluted equity in Channel Operator subject to a maximum equating to the fully diluted percentage equity held by the largest single shareholder at the time the option is exercised (the “Call Option”). Consideration for the equity granted on exercise of the call option shall be payable at the Programmer’s option by means of a reduction in the advertising revenue share fees as set in 7.1.2. The Programmer shall have the right to exercise the Call Option at any time during the term after 1 July 2015 on the Revenue Share Date or thereafter by written agreement[SPE7] with the Channel Operator at other times (together “Option Dates”) by submitting written notification at least 90 days prior to the relevant Option Date to the Channel Operator.

8.2.The exercise price for the Call Option shall be agreed between the parties.

9.Material delivery

9.1.The launch date will be [1 July 2013] or a later date if mutually agreed between the parties (“First Broadcast Day”).[RJH8]

9.2.9.1.The Programmer shall deliver the program schedule and program and creative service materials to the Channel Operator (or designated play-out facility) as directed by the Channel Operator at least 30 days prior to TX

9.3.9.2.All reasonable costs of delivering the materials to the Channel Operator, and of transmission of the channel signals from Channel Operator’s facilities on the System, shall be borne by Channel Operator.

[RJH1]In my notes I wrote 10 per week, but in any event this should increase with the amount of programming to be supplied

[RJH2]This begs a question. It has always been our intention to stream the channel on the web, as well as provide selcted programmes on demand. While the on demand programmes would obviously exclude the programming provided by Sony as part of the Service, we need to think about the implications of streaming the entire channel, bearing in mind this is quite a long term agreement.

[RJH3]OK with this, provioded we’re clear that it includes anywhere reached from the Crystal Palace mast and its normal repeaters to give full coverage of the intneded area.

[RJH4]I think UK includes Northern Ireland but, if not, Northern Ireland should be included in my amendment to 3.1 as well

[RJH5]I don’t understand why this should be a one-way option. If a mutual option is unacceptable, then we would propose to delete the option altogther, and replace it with a good faith intention on the part of both parties to negotiate an extension prior to the end of the initial term.

[RJH6]I do not recall this inflator being mentioned prior to our last meeting, and it is thefefore not in our business plan and cannot now be incorporated without undermining both our licence application (which included the business plan) and our investor discussions. Your revenue share is your uplift after year 2.

[SPE7]Could this affect our right to exercise the option or is this just an admin point?

[RJH8]The launch date is now defined above