UKDFG UK DIGITAL FUNDING GROUP securing a digital future for UK cinemas

1. UKDFGUK DIGITAL FUNDING GROUPsecuring a digital future for UK cinemas Strategy and Current Status: Europa Distribution Conference Estoril November 2009

2. Background • Major circuits in UK currently involved in own discussions with distribution to help fund digital changeover • Approx 1000 independent screens unsure of appropriate strategy for themselves • Following a ‘digital cinema roadshow’ held by CEA and UKFC, expressions of interest in forming a joint funding group from approx 600 independent screens of all types • Group CEO appointed in October 2009

3. Strategy: feasibility study period • Commence negotiations with studios and other possible funders and providers e.g. Third party Integrators • Commence discussions with equipment manufacturers and service providers • Decide upon appropriate legal structure and constitution of the group • Investigate sources of capital finance and financial guarantees

4. Current Status • All US studios visited. Overall response is very positive and all are willing to discuss funding agreements directly with the Group • Currently meeting with THI’s to assess level of interest in working with the Group and providing either ‘turnkey’ services or a hybrid solution • Also investigating sources of capital and guarantees with both public and commercial bodies

5. Time frames • Feasibility study period ends early 2010 • Legal structure formed early 2010 • Negotiations with possible funding entities continue through 2010 • Finance and guarantees in place late 2010 • Contracts agreed with funding entities third/fourth quarter • Roll-out commences late 2010 through 2011