Metro-Goldwyn-Mayer Studios Inc. and certain of its affiliates (collectively, the "Debtors") are sending you this disclosure statement (the "Disclosure Statement") because you may be a creditor entitled to vote on the Joint Prepackaged Plan of Reorganization of Metro-Goldwyn-Mayer Studios Inc. and certain of its Affiliates (the "Plan"). This solicitation (the "Solicitation") of votes is being conducted to obtain sufficient acceptances of the Plan prior to the filing of voluntary cases under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code"). If sufficient votes to obtain confirmation of the Plan are received and certain other conditions are met, the Debtors intend to file voluntary cases under chapter 11 of the Bankruptcy Code to implement the Plan. Because no chapter 11 cases have yet been commenced, this Disclosure Statement has not been approved by any Bankruptcy Court as containing "adequate information" within the meaning of section 1125(a) of the Bankruptcy Code. Following the commencement of their chapter 11 cases, the Debtors expect to seek promptly an order of the Bankruptcy Court (1) approving (a) this Disclosure Statement as having contained "adequate information" and (b) the Solicitation as having been in compliance with Section 1125(b) of the Bankruptcy Code, and (2) confirming the Plan described herein. DISCLOSURE STATEMENT DATED OCTOBER 7, 2010 PREPETITION SOLICITATION OF VOTES WITH RESPECT TO JOINT PREPACKAGED PLAN OF REORGANIZATION OF METRO-GOLDWYN-MAYER STUDIOS INC. AND CERTAIN OF ITS AFFILIATES SPECIAL NOTICE REGARDING FEDERAL AND STATE SECURITIES LAWS Neither this Disclosure Statement nor the Plan has been filed with or reviewed by the Bankruptcy Court, and the securities to be issued on or after the Effective Date (as defined below) are not the subject of a registration statement filed with the United States Securities and Exchange Commission (the "SEC") under the United States Securities Act of 1933, as amended (the "Securities Act"), or any securities regulatory authority of any state under any state securities law ("Blue Sky Law"). The Debtors are relying on section 4(2) of the Securities Act and similar provisions of state securities law, as well as, to the extent applicable, the exemption from the Securities Act and equivalent state law registration requirements provided by section 1145(a)(1) of the Bankruptcy Code, to exempt from registration under the Securities Act and Blue Sky Law the offer and sale of new securities in connection with the Solicitation and the Plan. Each holder of a Credit Agreement Claim (as defined in the Plan) or authorized signatory for the beneficial owner of a Credit Agreement Claim will be required to certify on its Ballot whether such holder or beneficial owner is an Accredited Investor, as that term is defined by Rule 501 of Regulation D of the Securities Act. The Plan has not been approved or disapproved by the SEC or any state securities commission and neither the SEC nor any state securities commission has passed upon the accuracy or adequacy of the information contained herein. Any representation to the contrary is a criminal offense. Neither the Solicitation nor this Disclosure Statement constitutes an offer to sell, or the solicitation of an offer to buy securities in any state or jurisdiction in which such offer or solicitation is not authorized. This Disclosure Statement and the information set forth herein are confidential. This Disclosure Statement contains material non-public information concerning the Debtors, their subsidiaries, and their respective securities. Each recipient hereby acknowledges that it (a) is aware that the federal securities laws of the United States prohibit any person who has material non-public information about a company, which is obtained from the company or its representatives, from purchasing or selling securities of such company or from communicating the information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities and (b) is familiar with the United States Securities Exchange Act of 1934, as amended (the "Securities Exchange Act"), and the rules and regulations promulgated thereunder, and agrees that it will not use or communicate to any person, under circumstances where it is reasonably likely that such person is likely to use or cause any person to use, any confidential information in contravention of the Securities Exchange Act or any of its rules and regulations, including Rule 10b-5. THE VOTING DEADLINE TO ACCEPT OR REJECT THE JOINT PREPACKAGED PLAN OF REORGANIZATION OF METRO-GOLDWYN-MAYER STUDIOS INC. AND CERTAIN OF ITS AFFILIATES IS 5:00 P.M. PREVAILING EASTERN TIME ON OCTOBER 22, 2010, UNLESS EXTENDED BY THE DEBTORS (THE "VOTING DEADLINE"). THE RECORD DATE FOR DETERMINING WHETHER A HOLDER OF AN IMPAIRED CLAIM IS ENTITLED TO VOTE ON THE PLAN IS OCTOBER 4, 2010 (THE "VOTING RECORD DATE"). THE DEBTORS ARE FURNISHING THIS DISCLOSURE STATEMENT TO EACH MEMBER OF AN IMPAIRED CLASS UNDER THE JOINT PREPACKAGED PLAN OF REORGANIZATION OF METRO- GOLDWYN-MAYER STUDIOS INC. AND CERTAIN OF ITS AFFILIATES. THIS DISCLOSURE STATEMENT IS TO BE USED BY EACH RECIPIENT SOLELY IN CONNECTION WITH HIS, HER, OR ITS EVALUATION OF THE PLAN, AND USE OF THIS DISCLOSURE STATEMENT FOR ANY OTHER PURPOSE IS NOT AUTHORIZED. WITHOUT THE PRIOR WRITTEN CONSENT OF THE DEBTORS, THIS DISCLOSURE STATEMENT MAY NOT BE REPRODUCED OR PROVIDED TO OTHERS (OTHER THAN THOSE ADVISORS OF ANY RECIPIENT OF THIS DISCLOSURE STATEMENT WHO MAY REVIEW THE INFORMATION CONTAINED HEREIN TO ASSIST SUCH RECIPIENT IN HIS, HER, OR ITS EVALUATION OF THE PLAN). Prepared by: Klee, Tuchin, Bognanoff & Stern LLP Skadden, Arps, Slate, Meagher & Flom LLP 1999 Avenue of the Stars Four Times Square Thirty-Ninth Floor New York, New York 10036 Los Angeles, California 90067 (212) 735-3000 (310) 407-4000 Jay M. Goffman Kenneth N. Klee Michael L. Tuchin 300 South Grand Avenue Suite 3400 Proposed Counsel for Debtors and Los Angeles, California 90071 Debtors in Possession (213) 687-5000 Nick P. Saggese Rick C. Madden Glenn S. Walter INTRODUCTION AND DISCLAIMER Metro-Goldwyn-Mayer Studios Inc. ("MGM Studios") and its affiliated Debtors1 (collectively, together with their non-Debtor affiliates the "Company" or "MGM") submit this Disclosure Statement to certain holders of claims against the Debtors in connection with the Solicitation of acceptances of the proposed Joint Prepackaged Plan of Reorganization of Metro-Goldwyn-Mayer Studios Inc. and Certain of Its Affiliates, dated as of October 7, 2010 (a copy of which is annexed hereto as Appendix A). The Debtors are soliciting such acceptances from holders of secured obligations under the Credit Agreement.2 Under the Plan, the Debtors propose to restructure their financial affairs, including the obligations owed under the Credit Agreement. To effectuate the restructuring of such obligations, assuming the requisite votes are obtained on the Plan, the Debtors will file for bankruptcy relief (and will concurrently or shortly thereafter file the Plan) and will seek the necessary relief from the Bankruptcy Court to continue, in the ordinary course of business, to pay their employees, trade vendors, and certain other creditors in full and on time. In furtherance of their restructuring, the Debtors have entered into (or will be entering into) the Transaction Documents, which include the Investment Agreement, the Stockholders Agreement, and the Registration Rights Agreement. Together, the Plan and the Transactions Documents provide, inter alia, for (i) existing equity in Reorganized Holdings to be cancelled, (ii) claims under the Credit Agreement to be converted into approximately 95.3% of the equity in Reorganized Holdings, (iii) the contribution by Spyglass Entertainment Holdings, LLC ("Spyglass") of certain assets to the Reorganized Company in exchange for 0.52% of the equity in Reorganized Holdings, and (iv) the merger of Cypress Entertainment Group, Inc. ("Cypress") and Garoge, Inc. ("Garoge") with and into a special purpose direct limited liability company subsidiary of Reorganized Holdings, with the Debtor affiliate as the surviving entity and the C/G Stockholders receiving approximately 4.17% of the equity in Reorganized Holdings. The Debtors are furnishing this Disclosure Statement to all holders of Credit Agreement Claims to enable such claimholders to vote to accept or reject the Plan. The Disclosure Statement is to be used by holders of Credit Agreement Claims solely in connection with their evaluation of the Plan. Use of this Disclosure Statement for any other purpose is not authorized. This Disclosure Statement may not be reproduced or provided to anyone other than advisors to the recipient without the prior written consent of the Debtors. The Debtors intend to use any and all Ballots (as defined herein) accepting the Plan that were received pursuant to the Solicitation and not subsequently withdrawn prior to the Voting Deadline (as defined herein) to seek confirmation of the Plan. Votes in favor of the Plan may also be used by the Debtors as acceptances to any modifications to the Plan provided such modifications do not materially and adversely affect the treatment of Credit Agreement Claims. See Section IX.D — "Feasibility of the Plan and Best Interests of Creditors – Confirmation Without Acceptance of All Impaired Classes: The 'Cramdown' Alternative." This Disclosure Statement describes certain aspects of the Plan, the Company's operations, the restructuring of the Company's financial affairs, the disposition of the Company's obligations with respect to the Credit Agreement, the Company's post-restructuring management and other related matters. FOR A COMPLETE UNDERSTANDING OF THE PLAN, YOU SHOULD READ THIS DISCLOSURE STATEMENT, THE PLAN, AND THE APPENDICES AND EXHIBITS THERETO IN THEIR ENTIRETY. IN THE EVENT OF ANY INCONSISTENCY BETWEEN THE PLAN AND THIS DISCLOSURE STATEMENT, THE TERMS OF THE PLAN ARE CONTROLLING. THE DEBTORS HAVE NOT COMMENCED CASES UNDER CHAPTER 11 OF THE BANKRUPTCY CODE AT THIS TIME.