amendno2arrngeagrmnt.htm


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    AMENDMENT
      NO. 2 TO ARRANGEMENT AGREEMENT dated July
      30, 2007,

     

    BETWEEN:

     

    AA
      ACQUISITION CORP., a corporation existing under the laws of Canada
      (hereinafter referred to as “Acquireco”),

     

    -
      and
      -

     

    ALLIANCE
      ATLANTIS COMMUNICATIONS INC., a corporation existing under the laws of
      Canada (hereinafter referred to as the
“Corporation”),

     

    WHEREAS
      Acquireco (formerly 6681859 Canada Inc.) and the Corporation are parties to
      an
      Arrangement Agreement dated January 10, 2007 as amended on February 26, 2007
      (the “Arrangement Agreement”);

     

    AND
      WHEREAS the parties wish to further amend the Arrangement Agreement in
      the manner set out in this amendment (the “Amendment No.2”) in
      accordance with Section 7.5 of the Arrangement Agreement;

     

    THIS
      AGREEMENT WITNESSES THAT, in consideration of the respective covenants
      and agreements herein contained and other good and valuable consideration (the
      receipt and sufficiency of which are hereby acknowledged), and intending to
      be
      legally bound hereby, Acquireco and the Corporation hereby agree as
      follows:

     

    
      	
              1.1

            	
              Interpretation

            


    

     

    All
      capitalized terms used in this Amendment No.2 that are not otherwise defined
      herein shall have the  meaning given to them in the Arrangement
      Agreement.

     

    
      	
              1.2

            	
              Amendments
                to the Arrangement
                Agreement

            


    

     

    
      	
               

            	
              (a)

            	
              Section
                1.1 of the Arrangement Agreement is hereby amended by deleting the
                existing definitions of "Closing Date", "Effective Time"
                and  “Outside Date” and substituting therefor the
                following:

            


    

     

    "Closing
      Date" means August 15, 2007 unless otherwise agreed in writing by
      Acquireco and the Corporation, provided that each of the conditions set forth
      in
      Article 6 shall have been satisfied or waived on or by the Closing
      Date;";

     

    "Effective
      Time" means the time of issue on the Effective Date of the certificate
      of arrangement issued by the Director under the CBCA;" and

     

    “Outside
      Date” means August 15, 2007 unless otherwise agreed in writing by
      Acquireco and the Corporation;”.

     

    
      	
               

            	
              (b)

            	
              Section
                5.2(a)(vii)(C) of the Arrangement Agreement is hereby amended by
                deleting
                the second paragraph of section 5.2(a)(vii)(C) and substituting therefor
                the following:

            


    

     


    
      
        
        

      

      
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              “For
                purposes of this Agreement, "Marketing Period" shall mean
                the period terminating on August 15, 2007.”.

            


    

     

    


     

    
      	
               

            	
              (c)

            	
              Section
                1.1 of the Plan of Arrangement is hereby amended by deleting the
                existing
                definition of "Effective Time" and substituting therefor the
                following:

            


    

     

    "Effective
      Time" means the time of issue on the Effective Date of the certificate
      of arrangement issued by the Director under the CBCA;".

     

    
      	
              1.3

            	
              Financial
                Information

            


    

     

    Acquireco
      hereby acknowledges and agrees that no further financial statements or Offering
      Documents are required to be provided by the Corporation.  At the
      request of Acquireco, the Corporation will correct any inaccurate information
      previously provided by it.  The Corporation will provide any
      supplemental financial information (other than financial statements or Offering
      Documents) reasonably requested by Acquireco provided that the Corporation
      will
      not be required to provide any additional financial information due to "stale
      dating" of information previously provided.

     

    
      	
              1.4

            	
              Amending
                Order

            


    

     

    The
      Corporation shall use all commercially reasonable efforts to obtain an order
      of
      the Court prior to the Closing Date amending the Final Order and the Plan of
      Arrangement in a manner satisfactory to Acquireco and the Corporation, each
      acting reasonably, and reflecting the intention of this Amendment No.2 (the
      “Amending Order”).

     

    
      	
              1.5

            	
              Representations
                and Warranties of the
                Corporation

            


    

     

    The
      Corporation represents and warrants to and in favour of Acquireco as follows
      and
      acknowledges that Acquireco is relying upon such representations and warranties
      in connection with entering into this Amendment and completing the
      Arrangement:

     

    
      	
               

            	
              (a)

            	
              Authority
                and No Violation.

            


    

     

    
      	
               

            	
              (i)

            	
              The
                Corporation has the requisite corporate power and capacity to execute
                and
                deliver this Amendment No.2 and to perform its obligations
                hereunder.  The execution, delivery and performance of this
                Amendment No.2 by the Corporation has been duly authorized by its
                Board of
                Directors and no other corporate proceedings on its part are necessary
                to
                authorize the execution, delivery and performance of this Amendment
                No.2.

            


    

     

    
      	
               

            	
              (ii)

            	
              This
                Amendment No.2 has been duly executed and delivered by the Corporation
                and
                constitutes its legal, valid and binding obligation, enforceable
                against
                it in accordance with its terms, subject to bankruptcy, insolvency
                and
                other Laws affecting creditors’ rights generally and to general principles
                of equity.

            


    

     


    
      
        
        

      

      
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              (iii)

            	
              The
                execution and delivery of this Amendment No.2 by the Corporation
                does not,
                and the performance of this Amendment No.2 by the Corporation will
                not:

            


    

     

    
      	
               

            	
              A.

            	
              conflict
                with or violate the Articles of Incorporation or Bylaws or equivalent
                organizational documents of the Corporation or any of its
                subsidiaries;

            


    

     

    
      	
               

            	
              B.

            	
              assuming
                that all consents, approvals, authorizations and other actions described
                in section 3.1(d)(v) of the Arrangement Agreement have been obtained
                and
                all filings and obligations described in section 3.1(d)(v) have been
                made,
                conflict with or violate any Law applicable to the Corporation or
                any of
                its subsidiaries or by which any property or asset of the Corporation
                or
                any of its subsidiaries is bound;
                or

            


    

     

    
      	
               

            	
              C.

            	
              except
                as set forth in section 3.1(d)(iv) of the Disclosure Letter, result
                in any
                breach of, or constitute a default (or an event which, with notice
                or
                lapse of time or both, would become a default) under, or give to
                others
                any right of termination, amendment, acceleration or cancellation
                of, or
                create, give rise to or change any rights or obligations of any Person
                under, or result in the creation of a Lien on any property or asset
                of the
                Corporation or any of its subsidiaries pursuant to any note, bond,
                mortgage, indenture, contract, agreement, lease, license, permit,
                franchise or other instrument or obligation to which the Corporation
                or
                any of its Material Subsidiaries is a party or by which the Corporation
                or
                any of its Material Subsidiaries or any property or asset of the
                Corporation or any of its Material Subsidiaries is
                bound;

            


    

     

    except,
      with respect to clauses (B) and (C), for any such events or occurrences that
      could not reasonably be expected to have, individually or in the aggregate,
      a
      Material Adverse Effect.

     

    
      	
               

            	
              (iv)

            	
              Except
                for the Amending Order, no consent, approval, license, permit, order
                or
                authorization of, or registration, declaration or filing with, or
                permit
                from, any Governmental Entity is required to be obtained or made
                by or
                with respect to the Corporation or any of its subsidiaries in connection
                with the execution, delivery and performance of this Amendment
                No.2.

            


    

     

    
      	
              1.6

            	
              Representations
                and Warranties of
                Acquireco

            


    

     

    Acquireco
      represents and warrants to and in favour of the Corporation as follows and
      acknowledges that the Corporation is relying upon such representations and
      warranties in connection with entering into this Amendment No.2 and completing
      the Arrangement:

     


    
      
        
        

      

      
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    (a)           Authority
      and No Violation.

     

    
      	
               

            	
              (i)

            	
              It
                has the requisite power and capacity to execute, deliver and perform
                its
                obligations hereunder. The execution, delivery and performance of
                this
                Amendment No.2 by it has been duly authorized and no other proceedings
                on
                its part are necessary to authorize the execution, delivery and
                performance of this Amendment No.2.

            


    

     

    
      	
               

            	
              (ii)

            	
              This
                Amendment No.2 has been duly executed and delivered by it and constitutes
                its legal, valid and binding obligation, enforceable against it in
                accordance with its terms, subject to bankruptcy, insolvency and
                other
                similar laws affecting creditors’ rights generally and to general
                principles of equity.

            


    

     

    
      	
               

            	
              (iii)

            	
              The
                execution, delivery and performance by it of this Amendment No.2
                will
                not:

            


    

     

    
      	
               

            	
              A.

            	
              result
                in a violation or breach of, require any consent to be obtained under
                or
                give rise to any termination rights or payment obligation under any
                provision of:

            


    

     

    
      	
               

            	
              1.

            	
              its
                Articles or Bylaws (or other constating
                documents);

            


    

     

    
      	
               

            	
              2.

            	
              any
                resolution of its board of directors (or any committee thereof) or
                of its
                shareholders;

            


    

     

    
      	
               

            	
              3.

            	
              any
                applicable Laws; or

            


    

     

    
      	
               

            	
              4.

            	
              any
                material Contract to which it or its subsidiaries is a party or by
                which
                any of them is bound or their respective properties or assets are
                bound;
                or

            


    

     

    
      	
               

            	
              B.

            	
              give
                rise to any right of termination or acceleration of indebtedness,
                or cause
                any of its third party indebtedness to come due before its stated
                maturity
                or cause any available credit to cease to be available where such
                event
                would materially impair its ability to complete or materially prevent
                it
                from completing the Arrangement.

            


    

     

    
      	
               

            	
              (iv)

            	
              Except
                for the Amending Order, no consent, approval, order or authorization
                of,
                or declaration or filing with, any Governmental Entity or other Person
                is
                required to be obtained by it in connection with the execution, delivery
                or performance of this Amendment
                No.2.

            


    

     


    
      
        
        

      

      
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              1.7

            	
              Survival

            


    

     

    For
      greater certainty, the representations and warranties of each of the Corporation
      and Acquireco contained herein shall survive the execution and delivery of
      this
      Amendment No.2 and shall terminate on the earlier of the termination of the
      Arrangement Agreement, as amended by this Amendment No.2, in accordance with
      the
      provisions thereof and the Effective Time.

     

    
      	
              1.8

            	
              Governing
                Law

            


    

     

    This
      Amendment No.2 shall be governed by and construed in accordance with the Laws
      of
      the Province of Ontario and the Laws of Canada applicable
      therein.  Each of the parties hereby irrevocably attorns and submits
      to the non-exclusive jurisdiction of the courts of the Province of Ontario
      with
      respect to any matter arising under this Amendment No.2.

     

    
      	
              1.9

            	
              Counterparts

            


    

     

    This
      Amendment No.2 may be executed in two or more counterparts, each of which shall
      be deemed to be an original but all of which together shall constitute one
      and
      the same instrument.

     

    
      	
              1.10

            	
              Continued
                Effect of Arrangement
                Agreement

            


    

     

    The
      Arrangement Agreement, as amended by this Amendment No.2, shall continue in
      full
      force and effect.

     

    


     

    REMAINDER
      OF THIS PAGE INTENTIONALLY LEFT BLANK

     


    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, Acquireco and the Corporation have caused this
      Amendment No.2 to be executed as of the date first written above by their
      respective officers thereunto duly authorized.

     

    
      	 	 	
              AA
                ACQUISITION CORP.

            
	
              By:

            	
              "Richard
                Leipsic"

            
	 	
              Name:  Richard
                Leipsic

            
	 	
              Title:    Vice-President

            
	 	 	 	 
	 	 	
              By:

            	
              "Riva
                Richard"

            
	 	 	 	
              Name:  Riva
                Richard

            
	 	 	 	
              Title:    Secretary

            


    

     

    


     

     

    


     

    
      	 	 	
              ALLIANCE
                ATLANTIS COMMUNICATIONS INC.

            
	
              By:

            	
              "Michael
                MacMillan"

            
	 	
              Name:
                Michael MacMillan

            
	 	
              Title:  Executive
                Chairman

            
	 	 	 	 
	 	 	
              By:

            	
              "Phyllis
                Yaffe"

            
	 	 	 	
              Name:  Phyllis
                Yaffe

            
	 	 	 	
              Title:     Chief
                Executive Officer

            
	 	 	 	 


    


    
      
        
        

      

      
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