**SEPARATION
      AND DISTRIBUTION AGREEMENT**




**by
      and among**




**ENTERTAINMENT
      SUBCO AB, INC.,**




**ALLIANCE
      DISTRIBUTION HOLDINGS S.ÀR.L,**




**4414608
      CANADA INC.,**




**3217920
      NOVA SCOTIA COMPANY,**




**4437497
      CANADA INC.,**




**4437641
      CANADA INC.,**




**CW
      MEDIA HOLDINGS INC.,**




**ALLIANCE
      ATLANTIS EQUICAP CORPORATION,**




**4414641
      CANADA INC.,**




**and**




**CW
      MEDIA INC.**









**Dated
      as of August 15, 2007**







**TABLE
      OF CONTENTS**




**Page**




ARTICLE
                IDEFINITIONS
                AND
                INTERPRETATIONSection
                1.1.
            General
            2Section
                1.2.
            References;
                Interpretation
            38Section
                1.3.
            Schedules
                and Exhibits
            38ARTICLE
                IITHE
                SEPARATIONSection
                2.1.
            General
            40Section
                2.2.
            Transfer
                of Assets
            41Section
                2.3.
            Assumption
                and Satisfaction of Liabilities; Litigation
            43Section
                2.4.
            Intercompany
                Accounts and Arrangements
            44Section
                2.5.
            Limitation
                of Liability
            44Section
                2.6.
            Transfers
                Not Effected On or Prior to the Effective Time; Transfers Deemed
                Effective
                as of the Effective Time
            45Section
                2.7.
            Conveyancing
                and Assumption Instruments
            47Section
                2.8.
            Further
                Assurances
            47Section
                2.9.
            Novation
                of Liabilities
            48Section
                2.10.
            Guarantees;
                Letters of Credit
            49Section
                2.11.
            Tax
                Liabilities
            50Section
                2.12.
            Disclaimer
                of Representations and Warranties
            51Section
                2.13.
            Effectiveness
                of Transfers
            52ARTICLE
                IIICERTAIN
                ACTIONS AT OR PRIOR TO THE TRANSFERSSection
                3.1.
            Resignations
            52Section
                3.2.
            Ancillary
                Agreements
            52ARTICLE
                IVCERTAIN
                COVENANTSSection
                4.1.
            No
                Solicit
            52Section
                4.2.
            Corporate
                Names and Other Parties’ Trademarks
            53


**Page**





Section
                4.3.
            Auditors
                and Audits; Annual and Quarterly Financial Statements and
                Accounting
            53Section
                4.4.
            Administration
                of Separation Expenses
            54Section
                4.5.
            Cooperation
            55Section
                4.6.
            Tax
                Step-Up
            55ARTICLE
                VEMPLOYEE
                MATTERSSection
                5.1.
            General
            55Section
                5.2.
            Savings
                Plans
            57Section
                5.3.
            Health
                and Welfare Plans
            58Section
                5.4.
            Continuation
                of Employment
            58Section
                5.5.
            Individual
                Employee Agreements
            59Section
                5.6.
            Post-Effective
                Time Bonus Awards
            59Section
                5.7.
            Severance
                Benefits
            59Section
                5.8.
            Vacation
            59Section
                5.9.
            COBRA/HIPPA
            59ARTICLE
                VIINDEMNIFICATIONSection
                6.1.
            Release
                of Pre-Transfer Claims
            60Section
                6.2.
            Indemnification
            62Section
                6.3.
            Procedures
                for Indemnification
            62Section
                6.4.
            Cooperation
                in Defense and Settlement
            64Section
                6.5.
            Indemnification
                Payments
            65Section
                6.6.
            Contribution
            65Section
                6.7.
            Indemnification
                Obligations Net of Insurance Proceeds and Other Amounts
            65Section
                6.8.
            Additional
                Matters; Survival of Indemnities
            68ARTICLE
                VIICONFIDENTIALITY;
                ACCESS TO INFORMATIONSection
                7.1.
            Corporate
                Information Repository
            68Section
                7.2.
            Access
                to Information
            68Section
                7.3.
            Disposition
                of Information
            68Section
                7.4.
            Witness
                Services
            70Section
                7.5.
            Reimbursement;
                Other Matters
            70Section
                7.6.
            Confidentiality
            70Section
                7.7.
            Privileged
                Matters
            71


**Page**





Section
                7.8.
            Ownership
                of Information
            73Section
                7.9.
            Other
                Agreements
            73ARTICLE
                VIIIDISPUTE
                RESOLUTIONSection
                8.1.
            Negotiation
            74Section
                8.2.
            Arbitration
            74Section
                8.3.
            Waiver
                of Time-Based Defenses
            75Section
                8.4.
            Continuity
                of Service and Performance
            75Section
                8.5.
            Costs
            75ARTICLE
                IXINSURANCESection
                9.1.
            Policies
                and Rights Included Within Assets
            75Section
                9.2.
            Claims
                Made Tail Policies
            76Section
                9.3.
            Occurrence
                Based Policies
            76Section
                9.4.
            Administration;
                Other Matters
            77Section
                9.5.
            Cooperation
            78ARTICLE
                XMISCELLANEOUSSection
                10.1.
            Complete
                Agreement; Construction
            79Section
                10.2.
            Counterparts
            79Section
                10.3.
            Survival
                of Agreements
            79Section
                10.4.
            Expenses
            79Section
                10.5.
            Notices
            79Section
                10.6.
            Waivers
            81Section
                10.7.
            Amendments
            81Section
                10.8.
            Assignment
            81Section
                10.9.
            Successors
                and Assigns
            82Section
                10.10.
            Certain
                Termination and Amendment Rights
            82Section
                10.11.
            Payment
                Terms
            82Section
                10.12.
            No
                Circumvention
            83Section
                10.13.
            Subsidiaries
            83Section
                10.14.
            Third-Party
                Beneficiaries
            
            83Section
                10.15.
            Title
                and Headings
            
            83Section
                10.16.
            Exhibits
                and Schedules
            
            83Section
                10.17.
            Governing
                Law
            
            83  **Page**





Section
                10.18.
            Consent
                to Jurisdiction
            83Section
                10.19.
            Specific
                Performance
            84Section
                10.20.
            Bulk
                Sales Laws
            84Section
                10.21.
            Severability
            84Section
                10.22.
            Force
                Majeure
            84Section
                10.23.
            Interpretation
            85Section
                10.24.
            No
                Duplication; No Double Recovery
            85










**SEPARATION
      AND DISTRIBUTION AGREEMENT**




SEPARATION
      AND DISTRIBUTION AGREEMENT (this “Agreement”), dated as of August 15,
      2007 (the “Closing Date”, by and among Entertainment Subco AB, Inc.
      (“Entertainment”), Alliance Distribution Holdings S.àr.l
      (“International”), 4414608 Canada Inc. (“Movie”), 3217920 Nova
      Scotia Company (“Movie Finco”),CW Media Holdings Inc. (“STV”),
      4437497 Canada Inc. (“Production”), 4437641 Canada Inc.
      (“Propinquity”), Alliance Atlantis Equicap Corporation
      (“ShelterCo”), 4414641 Canada Inc. (“CanCo”), CW Media Inc., a
      wholly owned subsidiary of CanCo and those parties listed on Schedule 1
      (the “Additional Parties”) (“CW Media”, and together with
      Entertainment, International, Movie, Movie Finco, Production, Propinquity,
      STV,
      ShelterCo, CW Media and the Additional Parties, the “Parties” and each, a
“Party”).




**W
      I T N E S S E T H:**




WHEREAS,
      on August 15, 2007, AA Acquisition Corp. (“AcquireCo”) acquired (the
“Acquisition”) all of the shares in the capital of Alliance Atlantis
      Communications Inc., a corporation existing under the laws of Canada (the
“Predecessor”),  pursuant to and on the terms and conditions
      set forth in that certain Arrangement Agreement, dated as of January 10, 2007
      (as amended), by and between AcquireCo and the Predecessor (the “Arrangement
      Agreement”);




WHEREAS,
      certain restructuring transactions (the “Restructuring”) in connection
      with the Predecessor have taken place and certain other restructuring
      transactions will take place, all as set forth in steps 33 to 68.02, 111 to
      134.1 and 135.2 to 135.4 of the Steps Memorandum attached as Exhibit A hereto
      (the “Steps Memo”) and pursuant to the applicable Ancillary
      Agreements;




WHEREAS,
      as part of the Restructuring, AcquireCo has been amalgamated with the
      Predecessor and certain other corporations to continue as CW Media;




WHEREAS,
      immediately following the Acquisition and the Restructuring, CW Media, acting
      through its direct and indirect Subsidiaries, will continue to conduct a number
      of businesses, including (i) the Entertainment Business, (ii) the International
      Distribution Business, (iii) the Movie Distribution Business, (iv) the
      Production Business (as defined herein), (v) the Propinquity Business, (vi)
      the
      Specialty Television Business, and (vii) the Shelter Business (each, a
“Business”, and together, the “Businesses”);




WHEREAS,
      the Board of Directors of CW Media has determined that it is appropriate,
      desirable and in the best interests of CW Media and its shareholder to separate
      the operations of CW Media into seven separate companies as set forth in the
      Steps Memo, including the New Entities, each of which shall own and conduct,
      directly or indirectly, its Corresponding Business;




WHEREAS,
      in order to effect such separation, the Board of Directors of CW Media has
      determined that it is appropriate, desirable and in the best interests of CW
      Media and its shareholder to enter into a series of transactions as set forth
      in
      steps 136, 137, 139 to 144, 145 to 148 and 153 to 161 of the Steps Memo and
      pursuant to the applicable Ancillary Agreements, whereby one or more members
      of
      each Group will, collectively, own all of such Group’s




1


Corresponding
      Assets and assume (or retain) all of such Group’s Corresponding Liabilities, and
      the STV Group will own all of the equity and debt interests in CanCo and will
      indirectly own all of the equity and debt interests in CW Media (such
      transactions, as they may be amended or modified from time to time,
      collectively, the “Plan of Separation”);




WHEREAS,
      each of the Parties has determined that it is necessary and desirable, prior
      to
      the Effective Time (as defined herein), to allocate and transfer to the
      applicable Group those Assets, and to allocate and assign to the applicable
      Party or its Group responsibility for those Liabilities, in respect of the
      activities of the Corresponding Businesses of such Group and to allocate among
      the Groups those Assets and Liabilities in respect of other businesses and
      activities of CW Media and its current and former Subsidiaries;




WHEREAS,
      each of the Parties has determined that it is necessary and desirable to set
      forth the principal corporate transactions required to effect the Plan of
      Separation and to set forth other agreements that will govern certain other
      matters following the Effective Time.




NOW,
      THEREFORE, in consideration of the foregoing and the mutual agreements,
      provisions and covenants contained in this Agreement, the Parties hereby agree
      as follows:




**ARTICLE
      I**









**DEFINITIONS
      AND INTERPRETATION**




Section
      1.1.                                General.  As
      used in this Agreement, the following terms shall have the following
      meanings:




(1)           “AA
      Benefit Plans” have the meaning set forth in Schedule
      5.1(b).




(2)           “AA
      DPSP” shall have the meaning set forth in Schedule
      5.1(b).




(3)           “AA
      Group RRSP” shall have the meaning set forth in Schedule
      5.1(b).




(4)           “AA
      Plans” shall have the meaning set forth in Section 5.1(b).




(5)           “AA
      Savings Plan” shall have the meaning set forth in Schedule
      5.1(b).




(6)           “AcquireCo”
      shall have the meaning set forth in the recitals.  References to
      AcquireCo in this Agreement may also be read as references to CW Media, as
      successor to AcquireCo by amalgamation.




(7)           “Action”
      shall mean any demand, action, claim, suit, countersuit, arbitration, inquiry,
      subpoena, proceeding or investigation by or before any Governmental Entity
      or
      any arbitration or mediation tribunal.




(8)           “Additional
      Parties” shall have the meaning set forth in the preamble.




2


(9)           “Affiliate”
      shall mean, when used with respect to a specified Person, a Person that directly
      or indirectly, through one or more intermediaries, controls, is controlled
      by,
      or is under common control with such specified Person.  For the
      purposes of this definition, “control”, when used with respect to any specified
      Person, shall mean the possession, directly or indirectly, of the power to
      direct or cause the direction of the management and policies of such Person,
      whether through the ownership of voting securities or other interests, by
      Contract or otherwise.  It is expressly agreed that no Party or member
      of any Group shall be deemed to be an Affiliate of another Party or member
      of
      such other Party’s Group by reason of having one or more directors or officers
      in common.




(10)           “Agreement
      Disputes” shall have the meaning set forth in Section 8.1.




(11)           “Ancillary
      Agreements” shall mean all of the written Contracts, instruments,
      assignments or other arrangements (other than this Agreement) entered into
      in
      connection with the transactions contemplated hereby, including those listed
      on
Schedule 1.1(11).




(12)           “Arrangement
      Agreement” shall have the meaning set forth in the recitals.




(13)           “Assets”
      shall mean assets, properties, claims and rights (including goodwill), wherever
      located (including in the possession of vendors or other third parties or
      elsewhere), of every kind, character and description, whether real, personal
      or
      mixed, tangible, intangible or contingent, in each case whether or not recorded
      or reflected or required to be recorded or reflected on the Records or financial
      statements of any Person, including the following:




(i)           all
      accounting and other legal and business books, records, ledgers and files
      whether printed, electronic or written;




(ii)           all
      apparatuses, computers and other electronic data processing and communications
      equipment, fixtures, machinery, equipment, furniture, office equipment,
      automobiles, trucks, aircraft and other transportation equipment, special and
      general tools, test devices, prototypes and models and other tangible personal
      property;




(iii)           all
      inventories of products, goods, materials, parts, raw materials and
      supplies;




(iv)           all
      interests in real property of whatever nature, including easements, whether
      as
      owner, mortgagee or holder of a Security Interest in real property, lessor,
      sublessor, lessee, sublessee or otherwise;




(v)           all
      interests in any shares or other equity interests of any Subsidiary or any
      other
      Person, all bonds, notes, debentures or other securities issued by any
      Subsidiary or any other Person, all loans, advances or other extensions of
      credit or capital contributions to any Subsidiary or any other Person and all
      other investments in securities of any Person;




3


(vi)           all
      license Contracts, leases of personal property, open purchase orders for raw
      materials, supplies, parts or services, unfilled orders for the manufacture
      and
      sale of products and other Contracts or commitments;




(vii)           the
      benefit of all deposits, letters of credit and performance and surety
      bonds;




(viii)                      all
      written (including in electronic form) technical information, data,
      specifications, research and development information, engineering drawings
      and
      specifications, operating and maintenance manuals, and materials and analyses
      prepared by consultants and other third parties;




(ix)           all
      Intellectual Property;




(x)           all
      Software;




(xi)           all
      cost information, sales and pricing data, customer prospect lists, supplier
      records, customer and supplier lists, customer and vendor data, correspondence
      and lists, product data and literature, artwork, design, development and
      business process files and data, vendor and customer drawings, specifications,
      quality records and reports and other books, records, studies, surveys, reports,
      plans and documents;




(xii)           all
      prepaid expenses, trade accounts and other accounts and notes
      receivables;




(xiii)                      all
      rights under Contracts, all claims or rights against any Person, choses in
      action or similar rights, whether accrued or contingent;




(xiv)                      all
      rights under insurance policies and all rights in the nature of insurance,
      indemnification or contribution;




(xv)           all
      licenses, permits, approvals and authorizations which have been issued by any
      Governmental Entity;




(xvi)                      all
      cash or cash equivalents, bank accounts, lock boxes and other deposit
      arrangements;




(xvii)                      all
      interest rate, currency, commodity or other swap, collar, cap or other hedging
      or similar Contracts or arrangements; and




(xviii)                      all
      Policies.




(14)           “Assume”
      shall have the meaning set forth in Section
      2.3 and “Assumption” shall have a corresponding
      meaning.




(15)           “Business”
      shall have the meaning set forth in the recitals.




4


(16)           “Business
      Day” means any day that is not a Saturday, a Sunday or any other day on
      which banks are required or authorized by Law to be closed in the City of
      Toronto, the City of Winnipeg or the City of New York.




(17)           “Business
      Entity” shall mean any corporation, partnership, limited liability company
      or other entity which may legally hold title to Assets.




(18)           “Cash”
      means cash or cash equivalents as determined in accordance with Canadian
      generally accepted accounting principles.




(18A)                      “Closing
      Agenda” means the Work Plan and Closing Agenda dated August 15, 2007 setting
      out the documents to be tabled or exchanged in connection with the transactions
      contemplated by the Steps Memo.




(19)           “Closing
      Date” shall have the meaning set forth in the preamble.




(20)           “Code”
      shall mean the United States Internal Revenue Code of 1986, as
      amended.




(21)           “Confidential
      Information” shall mean all Information, data or material, including (i)
      earnings reports and forecasts, (ii) macro-economic reports and forecasts,
      (iii)
      business plans, (iv) general market evaluations and surveys and (v) financing
      and credit-related information, (vi) specifications, ideas and concepts for
      products and services, (vii) quality assurance policies, procedures and
      specifications, (viii) customer information, (ix) Software, (x) training
      materials and information and (xi) all other know-how, methodology, procedures,
      techniques and trade secrets related to design, development and operational
      processes, in each case concerning a Party and/or its Subsidiaries which, prior
      to or following the Effective Time, has been disclosed by a Party or its
      Subsidiaries to another Party or its Subsidiaries, in written, oral (including
      by recording), electronic, or visual form to, or otherwise has come into the
      possession of, the other, including pursuant to the access provisions of Section 7.1 or Section
      7.2 or any other provision of this
      Agreement (except to the extent that such information can be shown to have
      been
      (i) in the public domain through no fault of such Party or its Subsidiaries
      or
      (ii) lawfully acquired from other sources by such Party or its Subsidiaries
      to
      which it was furnished; provided, however, in the case of clause
      (ii) that, to the furnished Party’s knowledge, such sources did not provide such
      information in breach of any confidentiality obligations).




(22)           “Consents”
      shall mean any consents, waivers or approvals from, or notification requirements
      to, any Person other than a Governmental Entity.




(23)           “Continuing
      Arrangements” shall mean those arrangements set forth on Schedule
      1.1(23).




(24)           “Contract”
      shall mean any agreement, contract, obligation, indenture, instrument, lease,
      promise, arrangement, commitment or undertaking (whether written or oral and
      whether express or implied) other than a Plan.




(25)           “Conveyancing
      and Assumption Instruments” shall mean, collectively, the various Contracts
      and other documents entered into to effect the Transfer of Assets and
      the




5


Assumption
      of Liabilities in the manner contemplated by this Agreement and the Plan of
      Separation, or otherwise relating to, arising out of or resulting from the
      transactions contemplated by this Agreement, which shall be, as applicable,
      in
      substantially the forms as the applicable Parties thereto reasonably
      agree.




(26)           “Corporate
      Division” shall mean (i) the business and operations of the “Corporate and
      Other” segment of CW Media as described in the Predecessor’s Annual Information
      Form dated March 5, 2007 for the fiscal year ended December 31, 2006, as filed
      with Canadian securities regulatory authorities, (ii) any other business
      conducted primarily through Assets of CW Media prior to the Effective Time
      that
      are not Corresponding Assets of any Group and (iii) any corporate or services
      functions for the shared benefit of any or all of the Businesses (and/or
      Groups), including Human Resources, Payroll, Procurement, Facilities, Financial
      Accounting and Management, Information Technology Services, Security,
      Telecommunications, Accounts Payable, Treasury, Tax, Risk Management,
      Compliance, Legal, Public and Regulatory Affairs, Investor Relations, Corporate
      Communications, Internal Corporate Communications, Visual Communications, and
      Media Services, to the extent that they are such shared functions.




(27)           “Corporate
      Information” shall mean any Information relating to the Corporate Division
      prior to the Closing Date.




(28)           “Corporate
      Information Repository” shall mean the archives of Corporate Information, in
      electronic and paper based form, as applicable.




(29)           “Corporate
      Retention and Severance Liabilities” shall mean all Liabilities in respect
      of (i) bonuses accrued for the period in the Predecessor’s financial year up to
      and including the Closing Date for the employees listed in Schedule 1.1(29), (ii) the written retention agreements between
      the Predecessor and its Subsidiaries and any such employees, and (iii) the
      termination or alleged termination of any such employees that occurs prior
      to or
      as a result of or in connection with or following the consummation of the
      transactions contemplated by this Agreement, including any amounts required
      to
      be paid (including any payroll or other Taxes), and the costs of providing
      benefits and bonuses, including bonuses accrued up to the date of termination,
      under any applicable severance, separation, redundancy, termination or similar
      plan, program, practice, contract, agreement, law or regulation (such benefits
      to include any medical or other welfare benefits, outplacement benefits or
      any
      other benefits under a Plan, accrued vacation and Taxes).




(30)           “Corresponding
      Assets” shall mean (i) with respect to Entertainment or the Entertainment
      Group, the Entertainment Assets, (ii) with respect to International or the
      International Group, the International Distribution Assets, (iii) with respect
      to Movie or the Movie Group, the Movie Distribution Assets, (iv) with respect
      to
      Production or the Production Group, the Production Assets, (v) with respect
      to
      Propinquity or the Propinquity Group, the Propinquity Assets, (vi) with respect
      to STV or the STV Group, the Specialty Television Assets, and (vii) with respect
      to ShelterCo or the Shelter Group, the Sheltered Assets.




(31)           “Corresponding
      Benefit Plans” shall have the meaning set forth in Section 5.3(a).




6


(32)           “Corresponding
      Business” shall mean (i) with respect to Entertainment or the Entertainment
      Group, the Entertainment Business, (ii) with respect to International or the
      International Group, the International Distribution Business, (iii) with respect
      to Movie or the Movie Group, the Movie Distribution Business, (iv) with respect
      to Production or the Production Group, the Production Business, (v) with respect
      to Propinquity or the Propinquity Group, the Propinquity Business, (vi) with
      respect to STV or the STV Group, the Specialty Television Business, and (vii)
      with respect to ShelterCo or the Shelter Group, the Shelter
      Business.




(33)           “Corresponding
      DPSP” shall have the meaning set forth in Section 5.2(a).




(34)           “Corresponding
      Employees” shall mean (i) with respect to Entertainment or the Entertainment
      Group, the Entertainment Employees, (ii) with respect to International or the
      International Group, the International Employees, (iii) with respect to Movie
      or
      the Movie Group, the Movie Employees, (iv) with respect to Production or the
      Production Group, the Production Employees, (v) with respect to Propinquity
      or
      the Propinquity Group, the Propinquity Employees, and (vi) with respect to
      STV
      or the STV Group, the STV Employees.




(35)           “Corresponding
      Former Employees” shall mean (i) with respect to Entertainment or the
      Entertainment Group, the Former Entertainment Employees, (ii) with respect
      to
      International or the International Group, the Former International Employees,
      (iii) with respect to Movie or the Movie Group, the Former Movie Employees,
      (iv)
      with respect to Production or the Production Group, the Former Production
      Employees, (v) with respect to Propinquity or the Propinquity Group, the Former
      Propinquity Employees, and (vi) with respect to STV or the STV Group, the Former
      STV Employees.




(36)           “Corresponding
      Group” shall mean (i) with respect to the Entertainment Business, the
      Entertainment Group, (ii) with respect to the International Distribution
      Business, the International Group, (iii) with respect to the Movie Distribution
      Business, the Movie Group, (iv) with respect to the Production Business, the
      Production Group, (v) with respect to the Propinquity Business, the Propinquity
      Group, (vi) with respect to the Specialty Television Business, the STV Group
      and
      (vii) with respect to the Shelter Business, the Shelter Group.




(37)           “Corresponding
      Group RRSP” shall have the meaning set forth in Section 5.2(b).




(38)           “Corresponding
      Indemnitee” shall mean, with respect to any New Entity (or its Group), each
      member of such New Entity’s Group and each of their Affiliates and each member
      of such Group’s and their respective Affiliates’ respective directors, officers,
      employees and agents and each of the heirs, executors, successors and assigns
      of
      any of the foregoing.




(39)           “Corresponding
      Liabilities” shall mean (i) with respect to Entertainment or the
      Entertainment Group, the Entertainment Liabilities, (ii) with respect to
      International or the International Group, the International Distribution
      Liabilities, (iii) with respect to Movie or the Movie Group, the Movie
      Distribution Liabilities, (iv) with respect to Production or the Production
      Group, the Production Liabilities, (v) with respect to Propinquity or the
      Propinquity Group, the Propinquity Liabilities, (vi) with respect to STV or
      the
      STV Group, the Specialty




7


Television
      Liabilities, and (vii) with respect to ShelterCo or the Shelter Group, the
      Sheltered Liabilities.




(40)           “Corresponding
      Savings Plan” shall have the meaning set forth in Section 5.2(b).




(41)           “Corresponding
      Shared Policies” shall mean, with respect to any New Entity (or its Group),
      all Policies, current or past, that relate to the Corresponding Business of
      such
      New Entity, other than Policies that are Corresponding Assets of such New
      Entity.




(42)           “CW
      Media” shall have the meaning set forth in the preamble and for the
      avoidance of doubt shall include, where applicable, AcquireCo and other
      predecessors to CW Media.




(43)           “D&O
      Tail Policies” shall have the meaning set forth in Section 9.2(a).




(44)           “Dispute
      Notice” shall have the meaning set forth in Section 8.1.




(45)           “DPSP”
      shall mean a “deferred profit sharing plan” (as defined in the *Income Tax
      Act* (Canada)).




(46)           “Effective
      Time” shall mean the time that is immediately after the completion of the
      transaction described in Step 161 in the Steps Memo.




(47)           “Employee
      Agreements” shall have the meaning set forth in Section 5.4.




(48)           “Entertainment”
      shall have the meaning set forth in the preamble.




(49)           “Entertainment
      Assets” shall mean:




(i)           the
      ownership interests in all Business Entities in the Entertainment
      Group;




(ii)           all
      Entertainment Contracts, any rights or claims arising thereunder, and any other
      rights or claims or contingent rights or claims primarily relating to or arising
      from any Entertainment Asset or the Entertainment Business;




(iii)           subject
      to Article IX, any rights of any member of
      the Entertainment Group under any Policies, including any rights thereunder
      arising after the Closing Date in respect of any Policies that are occurrence
      policies;




(iv)           any
      and all Assets owned or held immediately prior to the commencement of the
      implementation of the Plan of Separation by CW Media or any of its Subsidiaries
      (including, prior to the Effective Time, by any Group) (A) that comprise or
      comprised or relate or related primarily to the Entertainment Business or (B)
      that comprise or comprised the




8


Corporate
      Division and either (x) are or were more related to the Entertainment Business
      than the other Businesses, or (y) for which the Entertainment Business has
      or
      had principal use or responsibility;




(v)           the
      Assets set forth on Schedule 1.1(49)(v)
      and
      any and all Assets that are expressly contemplated by this Agreement or any
      Ancillary Agreement as Assets which have been or are to be Transferred to
      Entertainment or any other member of the Entertainment Group;




(vi)           any
      and all furnishings and office equipment located at a physical site of which
      the
      ownership or leasehold interest is being Transferred to Entertainment or a
      Subsidiary of Entertainment; provided, that personal computers shall be
      Transferred to the Party or Subsidiary of the Party that, following the
      Effective Time, employs the applicable employee who, prior to the Effective
      Time, used such personal computer; and




(vii)           any
      Cash owned by any member of the Entertainment Group that is not a wholly-owned
      Subsidiary of Entertainment.




Notwithstanding
      the foregoing, the Entertainment Assets shall not include (i) any Cash, except
      as provided in clause (vi) of this Section 1.1(49), or (ii)
      any Assets that are
      expressly contemplated by this Agreement or any Ancillary Agreement (or the
      Schedules hereto or thereto) as Assets to be retained by or Transferred to
      any
      member of a Group other than the Entertainment Group.




In
      the
      event of any inconsistency or conflict which may arise in the application or
      interpretation of any of the foregoing provisions, for the purpose of
      determining what is and is not an Entertainment Asset, any item explicitly
      included on a Schedule referred to in this Section
      1.1(49) shall take priority over any provision of the text
      hereof.




(50)           “Entertainment
      Business” shall mean (i) the business of producing and distributing the
“CSI” television programming conducted primarily through the members of the
      Entertainment Group prior to the Effective Time and (ii) the businesses and
      operations of Business Entities acquired or established by or for the
      Entertainment Group or any of its Subsidiaries after the date of this
      Agreement.




(51)           “Entertainment
      Contracts” shall mean the following Contracts to which CW Media or any of
      its Affiliates is a party or by which it or any of its Affiliates or any of
      their respective Assets is bound, whether or not in writing, except for any
      such
      Contract or part thereof (i) that is expressly contemplated not to be
      Transferred by any member of any Group other than the Entertainment Group to
      the
      Entertainment Group or (ii) that is expressly contemplated to be Transferred
      to
      (or remain with) any member of any Group other than the Entertainment Group,
      in
      each case, pursuant to any provision of this Agreement or any Ancillary
      Agreement:




(i)           any
      Contract entered into in the name of, or expressly on behalf of, any division,
      business unit or member of the Entertainment Group;




9


(ii)           any
      Contract that relates primarily to the Entertainment Business;




(iii)           any
      Contract or part thereof, that is otherwise expressly contemplated pursuant
      to
      this Agreement (including pursuant to Section
      2.2(c)) or any of the Ancillary Agreements to be assigned to any
      member of the Entertainment Group;




(iv)           any
      guarantee, indemnity, representation or warranty of or in favour of any member
      of the Entertainment Group; and




(v)           the
      Contracts listed on Schedule 1.1(51).




(52)           “Entertainment
      Employee” shall mean an active employee or an employee on vacation or on a
      leave of absence (including under the *Canada Labour Code*, the
*Employment Standards Act* (Ontario) or other applicable legislation) who
      is employed by, is to be employed effective immediately after the Effective
      Time
      (regardless of whether such employee accepts employment) by or will be employed
      by Entertainment or any member of the Entertainment Group, or otherwise
      primarily provides or provided services for the Entertainment Business,
      including those employees of the Predecessor and its Subsidiaries listed on
      Schedule 1.1(52).  For the
      avoidance of doubt, Entertainment Employee shall include such employees who,
      as
      of the Closing Date, are receiving short-term or long-term disability benefits
      or workers’ compensation benefits and, unless otherwise specified herein, any
      Former Entertainment Employees but shall not, during the term of the Transition
      Services Agreement, include the employees listed in Exhibit B to the Transition
      Services Agreement.




(53)           “Entertainment
      Group” shall mean Entertainment together with each Person that is a
      Subsidiary of Entertainment after the Effective Time, and shall include those
      entities identified as such on Schedule 1.1(53).




(54)           “Entertainment
      Liabilities” shall mean:




(i)           any
      and all Liabilities, including Liabilities for Taxes, that are expressly
      contemplated by this Agreement or any Ancillary Agreement (or the Schedules
      hereto or thereto, including Schedule 1.1(54)(i)
      and
      Schedule 2.11 hereto) as Liabilities to be Assumed by any member of the
      Entertainment Group, and all obligations and Liabilities expressly Assumed
      by
      any member of the Entertainment Group under this Agreement or any of the
      Ancillary Agreements;




(ii)           any
      and all Liabilities, including Liabilities for Taxes, that relate or related
      primarily to:




(a)           the
      operation or conduct of the Entertainment Business (including the use of any
      and
      all Trademarks in association with the operation or conduct of the Entertainment
      Business), as conducted at any time prior to, on or after the Effective Time
      (including any Liability relating to, arising out of or resulting from any
      act
      or failure to act by any director, officer, employee, agent or representative
      with respect to the




10


Entertainment
      Business and guarantees or indemnities of or in favour of the Entertainment
      Business or a member of the Entertainment Group);




(b)           the
      operation or conduct of any business conducted by any member of the
      Entertainment Group at any time after the Effective Time (including any
      Liability relating to, arising out of or resulting from any act or failure
      to
      act by any director, officer, employee, agent or representative with respect
      to
      the Entertainment Business); or




(c)           any
      Entertainment Employee or any Former Entertainment Employee (other than a
      Corresponding Employee or a Corresponding Former Employee of a Group other
      than
      the Entertainment Group) in respect of the period prior to, on or after the
      Effective Time;




(iii)           any
      and all Liabilities of the Corporate Division that either (x) are or were more
      related to the Entertainment Business than any other Business, or (y) for which
      the Entertainment Business has or had principal use or
      responsibility;




(iv)           any
      Liabilities relating to, arising out of or resulting from any indebtedness
      (including debt securities and asset-backed debt) of any member of the
      Entertainment Group or indebtedness (regardless of the issuer of such
      indebtedness) primarily relating to the Entertainment Business or any
      indebtedness (regardless of the issuer of such indebtedness) secured primarily
      by any of the Entertainment Assets (including any Liabilities relating to,
      arising out of or resulting from a claim by a holder of any such indebtedness,
      in its capacity as such);




(v)           those
      Separation Expenses allocated to the Entertainment Group in accordance with
      Schedule 1.1(123);




(vi)           such
      percentage of the Residual Liabilities that, together with the percentages
      of
      Residual Liabilities forming part of the International Distribution Liabilities,
      the Movie Distribution Liabilities, the Production Liabilities and the
      Propinquity Liabilities, equals 50%;




(vii)           those
      Corporate Retention and Severance Liabilities and Executive Retention and
      Severance Liabilities allocated to the Entertainment Group in accordance with
      Schedule 1.1(123);




(viii)                      all
      Liabilities of CW Media or any of its Subsidiaries (which Subsidiaries were
      Subsidiaries of CW Media immediately prior to the commencement of the Plan
      of
      Separation) relating to, arising out of or resulting from any Action with
      respect to the Plan of Separation made or brought by any third party against
      any
      Party or any member of any Party’s respective Group (which, for the avoidance of
      doubt, excludes any Action by a Party or member of such Party’s Group, on the
      one hand, against




11


another
      Party or member of such other Party’s Group, on the other hand) and primarily
      relating to the Entertainment Business;




(ix)           all
      Liabilities arising under or relating to any Entertainment
      Contracts;




(x)           all
      Liabilities for Taxes that are classified as and deemed to be Entertainment
      Liabilities in Schedule 2.11.




Notwithstanding
      anything to the contrary herein, the Entertainment Liabilities shall not
      include:




(x)
            any
                Liabilities that are expressly contemplated by this Agreement or
                any
                Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities
                to
                be retained or Assumed by any member of a Group other than the
                Entertainment Group or for which any such Party is liable pursuant
                to this
                Agreement or such Ancillary Agreement;
                and




(y)
            any
                Contracts expressly Assumed by any member of a Group other than the
                Entertainment Group under this Agreement or any of the Ancillary
                Agreements.




(55)           “Executive
      Retention and Severance Liabilities” shall mean all Liabilities in respect
      of (i) bonuses accrued for the period in the Predecessor’s financial year up to
      and including the Closing Date for the employees listed in Schedule 1.1(55), (ii) the written retention agreements between
      the Predecessor and any such employees, and (iii) the termination or alleged
      termination of any such employees that occurs prior to or as a result of or
      in
      connection with or following the consummation of the transactions contemplated
      by this Agreement, including any amounts required to be paid (including any
      payroll or other Taxes), and the costs of providing benefits and bonuses,
      including bonuses accrued up to the date of termination, under any applicable
      severance, separation, redundancy, termination or similar plan, program,
      practice, contract, agreement, law or regulation (such benefits to include
      any
      medical or other welfare benefits, outplacement benefits or any other benefits
      under a Plan, accrued vacation and Taxes).




(56)           “Force
      Majeure” shall mean, with respect to a Party, an event beyond the control of
      such Party (or any Person acting on its behalf), which by its nature could
      not
      have been foreseen by such Party (or such Person), or, if it could have been
      foreseen, was unavoidable, and includes acts of God, storms, floods, riots,
      pandemics, fires, sabotage, civil commotion or civil unrest, interference by
      civil or military authorities, acts of war (declared or undeclared) or armed
      hostilities or other national or international calamity or one or more acts
      of
      terrorism or failure of energy sources or distribution facilities.




(57)           “Former
      Entertainment Employee” shall mean any former employee of the Entertainment
      Group or the Predecessor and its Subsidiaries who primarily provided services
      to
      the Entertainment Business in the month prior to the former employee’s
      termination of employment.




12


(58)           “Former
      International Employee” shall mean any former employee of the International
      Distribution Group or the Predecessor and its Subsidiaries who primarily
      provided services to the Entertainment Business in the month prior to the former
      employee’s termination of employment.




(59)           “Former
      Movie Employee” shall mean any former employee of the Movie Distribution
      Group or the Predecessor and its Subsidiaries who primarily provided services
      to
      the Movie Distribution Business in the month prior to the former employee’s
      termination of employment.




(60)           “Former
      Production Employee” shall mean any former employee of the Production Group
      or the Predecessor and its Subsidiaries who primarily provided services to
      the
      Production Business in the month prior to the former employee’s termination of
      employment.




(61)           “Former
      Propinquity Employee” shall mean any former employee of the Propinquity
      Group or the Predecessor and its Subsidiaries who primarily provided services
      to
      the Propinquity Business in the month prior to the former employee’s termination
      of employment.




(62)           “Former
      STV Employee” shall mean any former employee of the STV Group or the
      Predecessor and its Subsidiaries who primarily provided services to the
      Specialty Television Business in the month prior to the former employee’s
      termination of employment.




(63)           “Governmental
      Approvals” shall mean any notices or reports to be submitted to, or other
      filings to be made with, or any consents, registrations, approvals, permits
      or
      authorizations to be obtained from, any Governmental Entity.




(64)           “Governmental
      Entity” shall mean any nation or government, any state, province,
      municipality or other political subdivision thereof and any entity, body,
      agency, commission, department, board, bureau or court, whether domestic,
      foreign or multinational, exercising executive, legislative, judicial,
      regulatory or administrative functions of or pertaining to government and any
      executive official thereof.




(65)           “Group”
      shall mean any of the Entertainment Group, the International Group, the Movie
      Group, the Production Group, the Propinquity Group, the STV Group, or the
      Shelter Group, as the context requires.




(66)           “Guaranty
      Release” shall have the meaning set forth in Section 2.10(b).




(67)           “Income
      Taxes” shall mean any federal, provincial, municipal or foreign taxes (i)
      based upon, measured by or calculated with respect to net income, income as
      specially defined, earnings, profits or selected items of income, earnings
      or
      profits (including capital gains taxes and minimum taxes), or (ii) based upon,
      measured by or calculated with respect to multiple bases (including corporate
      franchise taxes) if one or more of the bases on which such taxes may be based,
      measured by or calculated with respect to, is described in (i), in each case
      together with any interest, penalties or additions to such taxes.




(68)           “Indemnifiable
      Loss” and “Indemnifiable Losses” shall mean any and all damages,
      losses, deficiencies, Liabilities, obligations, penalties, judgments,
      settlements, claims,




13


Taxes,
      payments, fines, interest, assessments, reassessments, costs and expenses
      (including the costs and expenses of any and all Actions and demands,
      assessments, reassessments, judgments, settlements and compromises relating
      thereto and the reasonable costs and expenses of attorneys’, accountants’,
      consultants’ and other professionals’ fees and expenses incurred in the
      investigation or defense thereof or the enforcement of rights hereunder),
      excluding special, consequential, indirect, punitive damages (other than
      special, consequential, indirect and/or punitive damages awarded to any third
      party against an indemnified party.




(69)           “Indemnifying
      Party” shall have the meaning set forth in Section 6.3(b).




(70)           “Indemnitee”
      shall mean any Corresponding Indemnitee of any New Entity.




(71)           “Indemnity
      Payment” shall have the meaning set forth in Section 6.7(a).




(72)           “Information”
      shall mean information, whether or not patentable or copyrightable, in written,
      oral, electronic or other tangible or intangible forms, stored in any medium,
      including studies, reports, records, books, contracts, instruments, surveys,
      discoveries, ideas, concepts, know-how, techniques, designs, specifications,
      drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data,
      computer data, disks, diskettes, tapes, computer programs or other software,
      marketing plans, customer names, communications by or to attorneys (including
      attorney-client privileged communications), memos and other materials prepared
      by attorneys or under their direction (including attorney work product),
      communications and materials otherwise related to or made or prepared in
      connection with or in preparation for any legal proceeding, and other technical,
      financial, employee or business information or data.




(73)           “Insurance
      Proceeds” shall mean those monies (i) received by an insured from an
      insurance carrier or (ii) paid by an insurance carrier on behalf of an insured,
      in either case net of any applicable premium adjustment, retrospectively-rated
      premium, deductible, retention, or cost of reserve paid or held by or for the
      benefit of such insured.




(74)           “Insured
      Claims” shall mean those Liabilities that, individually or in the aggregate,
      are covered within the terms and conditions of any of the Shared Policies,
      whether or not subject to deductibles, co-insurance, uncollectibility or
      retrospectively-rated premium adjustments.




(75)           “Intellectual
      Property” shall mean all intellectual property and industrial property
      rights of any kind or nature, including all Canadian, U.S. and foreign (i)
      patents, patent applications, patent disclosures, and all related continuations,
      continuations-in-part, divisionals, reissues, re-examinations, substitutions
      and
      extensions thereof, (ii) Trademarks, (iii) copyrights and copyrightable subject
      matter, (iv) rights of publicity, (v) moral rights and rights of attribution
      and
      integrity, (vi) rights in Software, (vii) trade secrets and all other
      confidential information, know-how, inventions, proprietary processes, formulae,
      models and methodologies, (viii) rights of privacy and rights to personal
      information, (ix) telephone numbers and Internet protocol addresses, (x) all
      rights in the foregoing and in other similar intangible assets, (ix)
      all




14


applications
      and registrations for the foregoing and (xii) all rights and remedies against
      past, present, and future infringement, misappropriation, or other violation
      of
      the foregoing.




(76)           “Intermediate
      Transfers” shall have the meaning set forth in Section 2.2(a)(ii).




(77)           “International”
      shall have the meaning set forth in the preamble.




(78)           “International
      Distribution Assets” shall mean:




(i)           the
      ownership interests in all Business Entities in the International
      Group;




(ii)           all
      International Distribution Contracts, any rights or claims arising thereunder,
      and any other rights or claims or contingent rights or claims primarily relating
      to or arising from any International Distribution Asset or the International
      Distribution Business;




(iii)           subject
      to Article IX, any rights of any member of
      the International Group under any Policies, including any rights thereunder
      arising after the Closing Date in respect of any Policies that are occurrence
      policies;




(iv)           any
      and all Assets owned or held immediately prior to the commencement of the
      implementation of the Plan of Separation by CW Media or any of its Subsidiaries
      (including, prior to the Effective Time, by any Group) (A) that comprise or
      comprised or relate or related primarily to the International Distribution
      Business or (B) that comprise or comprised the Corporate Division and either
      (x)
      are or were more related to the International Distribution Business than any
      other Business, or (y) for which the International Distribution Business has
      or
      had principal use or responsibility;




(v)           the
      Assets set forth on Schedule 1.1(78)(v)
      and
      any and all Assets that are expressly contemplated by this Agreement or any
      Ancillary Agreement as Assets which have been or are to be Transferred to
      International or any other member of the International Group;




(vi)           any
      and all furnishings and office equipment located at a physical site of which
      the
      ownership or leasehold interest is being Transferred to International or a
      Subsidiary of International; provided, that personal computers shall be
      Transferred to the Party or Subsidiary of the Party that, following the
      Effective Time, employs the applicable employee who, prior to the Effective
      Time, used such personal computer; and




(vii)           any
      Cash owned by any member of the International Group that is not a wholly-owned
      Subsidiary of International.




15


Notwithstanding
      the foregoing, the International Distribution Assets shall not include (i)
      any
      Cash, except as provided in clause (vii) of this Section 1.1(78), or any
      Assets that are
      expressly contemplated by this Agreement or any Ancillary Agreement (or the
      Schedules hereto or thereto) as Assets to be retained by or Transferred to
      any
      member of a Group other than the International Group.




In
      the
      event of any inconsistency or conflict which may arise in the application or
      interpretation of any of the foregoing provisions, for the purpose of
      determining what is and is not a International Distribution Asset, any item
      explicitly included on a Schedule referred to in this Section 1.1(78) shall take priority over any
      provision of the text hereof.




(79)           “International
      Distribution Business” shall mean (i) the business of the international
      (i.e., non-Canadian) distribution of the programs and films of the Canadian
      film
      library of the Predecessor (and its Subsidiaries immediately prior to the
      Effective Time) conducted primarily through the members of International Group
      prior to the Effective Time and (ii) the businesses and operations of Business
      Entities acquired or established by or for International or any of its
      Subsidiaries after the date of this Agreement.




(80)           “International
      Distribution Contracts” shall mean the following Contracts to which CW Media
      or any of its Affiliates is a party or by which it or any of its Affiliates
      or
      any of their respective Assets is bound, whether or not in writing, except
      for
      any such Contract or part thereof (i) that is expressly contemplated not to
      be
      Transferred by any member of a Group other than the International Group to
      the
      International Group or (ii) that is expressly contemplated to be Transferred
      to
      (or remain with) any member of a Group other than the International Group,
      in
      each case, pursuant to any provision of this Agreement or any Ancillary
      Agreement:




(i)           any
      Contract entered into in the name of, or expressly on behalf of, any division,
      business unit or member of the International Group;




(ii)           any
      Contract that relates primarily to the International Distribution
      Business;




(iii)           any
      Contract or part thereof, that is otherwise expressly contemplated pursuant
      to
      this Agreement (including pursuant to Section
      2.2(c)) or any of the Ancillary Agreements to be assigned to any
      member of the International Group;




(iv)           any
      guarantee, indemnity, representation or warranty of or in favour of any member
      of the International Group; and




(v)           the
      Contracts listed on Schedule 1.1(65).




(81)           “International
      Distribution Liabilities” shall mean:




(i)           any
      and all Liabilities, including Liabilities for Taxes, that are expressly
      contemplated by this Agreement or any Ancillary Agreement (or




16


the
      Schedules hereto or thereto, including Schedule 1.1(81)(i)
      and
      Schedule 2.11 hereto) as Liabilities to be Assumed by any member of the
      International Group, and all obligations and Liabilities expressly Assumed
      by
      any member of the International Group under this Agreement or any of the
      Ancillary Agreements;




(ii)           any
      and all Liabilities, including Liabilities for Taxes, that relate or related
      primarily to:




(a)           the
      operation or conduct of the International Distribution Business (including
      the
      use of any and all Trademarks in association with the operation or conduct
      of
      the International Distribution Business), as conducted at any time prior to,
      on
      or after the Effective Time (including any Liability relating to, arising out
      of
      or resulting from any act or failure to act by any director, officer, employee,
      agent or representative with respect to the International Distribution Business
      and guarantees or indemnities of or in favour of the International Distribution
      Business or a member of the International Group);




(b)           the
      operation or conduct of any business conducted by any member of the
      International Group at any time after the Effective Time (including any
      Liability relating to, arising out of or resulting from any act or failure
      to
      act by any director, officer, employee, agent or representative with respect
      to
      the International Distribution Business); or




(c)           any
      International Employee or any Former International Employee (other than a
      Corresponding Employee or a Corresponding Former Employee of a Group other
      than
      the International Group) in respect of the period prior to, on or after the
      Effective Time;




(iii)           any
      and all Liabilities of the Corporate Division that either (x) are or were more
      related to the International Distribution Business than any other Business,
      or
      (y) for which the International Distribution Business has or had principal
      use
      or responsibility;




(iv)           any
      Liabilities relating to, arising out of or resulting from any indebtedness
      (including debt securities and asset-backed debt) of any member of the
      International Group or indebtedness (regardless of the issuer of such
      indebtedness) primarily relating to the International Distribution Business
      or
      any indebtedness (regardless of the issuer of such indebtedness) secured
      primarily by any of the International Distribution Assets (including any
      Liabilities relating to, arising out of or resulting from a claim by a holder
      of
      any such indebtedness, in its capacity as such);




(v)           such
      percentage of the Residual Liabilities that, together with the percentages
      of
      Residual Liabilities forming part of the Entertainment




17


Liabilities,
      the Movie Distribution Liabilities, the Production Liabilities and the
      Propinquity Liabilities, equals 50%;




(vi)           all
      Liabilities of CW Media or any of its Subsidiaries (which Subsidiaries were
      Subsidiaries of CW Media immediately prior to the commencement of the
      implementation of the Plan of Separation) relating to, arising out of or
      resulting from any Action with respect to the Plan of Separation made or brought
      by any third party against any Party or any member of any Party’s respective
      Group (which, for the avoidance of doubt, excludes any Action by a Party or
      member of such Party’s Group, on the one hand, against another Party or member
      of such other Party’s Group, on the other hand) and primarily relating to the
      International Distribution Business;




(vii)           all
      Liabilities arising under or relating to any International Distribution
      Contracts; and




(viii)                      all
      Liabilities for Taxes that are classified as and deemed to be International
      Distribution Liabilities in Schedule 2.11.




Notwithstanding
      anything to the contrary herein, the International Distribution Liabilities
      shall not include:




(x)
            any
                Liabilities that are expressly contemplated by this Agreement or
                any
                Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities
                to
                be retained or Assumed by any member of a Group other than the
                International Group or for which any member of such Group is liable
                pursuant to this Agreement or such Ancillary Agreement;
                and




(y)
            any
                Contracts expressly Assumed by any member of a Group other than the
                International Group under this Agreement or any of the Ancillary
                Agreements.




(82)           “International
      Employee” shall mean an active employee or an employee on vacation or on a
      leave of absence (including under the *Canada Labour Code*, the
*Employment Standards Act* (Ontario) or other applicable legislation) who
      is employed by, is to be employed effective immediately after the Effective
      Time
      (regardless of whether such employee accepts employment) by or will be employed
      by International or any member of the International Group or otherwise primarily
      provides or provided services for the International Distribution Business,
      including those employees of the Predecessor and its Subsidiaries listed in
      Schedule 1.1(82).  For the
      avoidance of doubt, International Employee shall include such employees who,
      as
      of the Closing Date, are receiving short-term or long-term disability benefits
      or workers’ compensation benefits and, unless otherwise specified herein, any
      Former International Employees but shall not, during the term of the Transition
      Services Agreement, include the employees listed in Exhibit B to the Transition
      Services Agreement.




18


(83)           “International
      Group” shall mean International together with each Person that is a
      Subsidiary of International after the Effective Time, and shall include those
      entities identified as such on Schedule 1.1(83).




(84)           “Law”
      shall mean any Canadian, U.S. or other federal, national, supranational, state,
      provincial, local or similar statute, law, ordinance, regulation, rule, code,
      order, requirement or rule of law (including common law).




(85)           “Liabilities”
      shall mean any and all debts, liabilities, costs, expenses and obligations,
      whether accrued or fixed, absolute or contingent, matured or unmatured, reserved
      or unreserved, or determined or determinable, including those arising under
      any
      Law, claim, demand, Action, whether asserted or unasserted, or order, writ,
      judgment, injunction, decree, stipulation, determination or award entered by
      or
      with any Governmental Entity and those arising under any Contract or any fines,
      damages or equitable relief which may be imposed and including all costs and
      expenses related thereto.




(86)           “Liable
      Party” shall have the meaning set forth in Section 2.9(b).




(87)           “Movie”
      shall have the meaning set forth in the preamble.




(88)           “Movie
      and Entertainment Plans” shall have the meaning set forth in Section 5.1(c).




(89)           “Movie
      Distribution Assets” shall mean:




(i)           the
      ownership interests in all Business Entities in the Movie Group;




(ii)           all
      Movie Distribution Contracts, any rights or claims arising thereunder, and
      any
      other rights or claims or contingent rights or claims primarily relating to
      or
      arising from any Movie Distribution Asset or the Movie Distribution
      Business;




(iii)           subject
      to Article IX, any rights of any member of
      the Movie Group under any Policies, including any rights thereunder arising
      after the Closing Date in respect of any Policies that are occurrence
      policies;




(iv)           any
      and all Assets owned or held immediately prior to the commencement of the
      implementation of the Plan of Separation by CW Media or any of its Subsidiaries
      (including, prior to the Effective Time, by any Group) (A) that comprise or
      comprised or relate or related primarily to the Movie Distribution Business
      or
      (B) that comprise or comprised the Corporate Division and either (x) are or
      were
      more related to the Movie Distribution Business than any other Business, or
      (y)
      for which the Movie Distribution Business has or had principal use or
      responsibility;




(v)           the
      Assets set forth on Schedule 1.1(89)(v)
      and
      any and all Assets that are expressly contemplated by this Agreement or any
      Ancillary




19


Agreement
      as Assets which have been or are to be Transferred to Movie or any other member
      of the Movie Group;




(vi)           any
      and all furnishings and office equipment located at a physical site of which
      the
      ownership or leasehold interest is being Transferred to Movie or a Subsidiary
      of
      Movie; provided, that personal computers shall be Transferred to the
      Party, or Subsidiary of the Party that, following the Effective Time, employs
      the applicable employee who, prior to the Effective Time, used such personal
      computer; and




(vii)           any
      Cash owned by any member of the Movie Group that is not a wholly-owned
      Subsidiary of Movie.




Notwithstanding
      the foregoing, the Movie Distribution Assets shall not include (i) any Cash,
      except as provided in clause (vii) of Section
      1.1(89), or (ii) any Assets that are
      expressly contemplated by this Agreement or any Ancillary Agreement (or the
      Schedules hereto or thereto) as Assets to be retained by or Transferred to
      any
      member of a Group other than the Movie Group.




In
      the
      event of any inconsistency or conflict which may arise in the application or
      interpretation of any of the foregoing provisions, for the purpose of
      determining what is and is not a Movie Distribution Asset, any item explicitly
      included on a Schedule referred to in this Section 1.1(89) shall take priority over any
      provision of
      the text hereof.




(90)           “Movie
      Distribution Business” shall mean (i) the business of motion picture
      distribution in Canada conducted primarily through the members of Movie Group
      prior to the Effective Time and (ii) the businesses and operations of Business
      Entities acquired or established by or for Movie or any of its Subsidiaries
      after the date of this Agreement.




(91)           “Movie
      Distribution Contracts” shall mean the following Contracts to which CW Media
      or any of its Affiliates is a party or by which it or any of its Affiliates
      or
      any of their respective Assets is bound, whether or not in writing, except
      for
      any such Contract or part thereof (i) that is expressly contemplated not to
      be
      Transferred by any member of a Group other than the Movie Group to the Movie
      Group or (ii) that is expressly contemplated to be Transferred to (or remain
      with) any member of a Group other than the Movie Group, in each case, pursuant
      to any provision of this Agreement or any Ancillary Agreement:




(i)           any
      Contract entered into in the name of, or expressly on behalf of, any division,
      business unit or member of the Movie Group;




(ii)           any
      Contract that relates primarily to the Movie Distribution Business;




(iii)           any
      Contract or part thereof, that is otherwise expressly contemplated pursuant
      to
      this Agreement (including pursuant to Section
      2.2(c)) or any of the Ancillary Agreements to be assigned to any
      member of the Movie Group;




20


(iv)           any
      guarantee, indemnity, representation or warranty of or in favour of any member
      of the Movie Group; and




(v)           the
      Contracts listed on Schedule 1.1(91).




(92)           “Movie
      Distribution Liabilities” shall mean:




(i)           any
      and all Liabilities, including Liabilities for Taxes, that are expressly
      contemplated by this Agreement or any Ancillary Agreement (or the Schedules
      hereto or thereto, including Schedule 1.1(92)(i)
      and
Schedule 2.11 hereto) as Liabilities to be Assumed by any member of the
      Movie Group, and all obligations and Liabilities expressly Assumed by any member
      of the Movie Group under this Agreement or any of the Ancillary
      Agreements;




(ii)           any
      and all Liabilities, including Liabilities for Taxes, that relate or related
      primarily to:




(a)           the
      operation or conduct of the Movie Distribution Business (including the use
      of
      any and all Trademarks in association with the operation or conduct of the
      Movie
      Distribution Business), as conducted at any time prior to, on or after the
      Effective Time (including any Liability relating to, arising out of or resulting
      from any act or failure to act by any director, officer, employee, agent or
      representative with respect to the Movie Distribution Business and guarantees
      or
      indemnities of or in favour of the Movie Distribution Business or a member
      of
      the Movie Group);




(b)           the
      operation or conduct of any business conducted by any member of the Movie Group
      at any time after the Effective Time (including any Liability relating to,
      arising out of or resulting from any act or failure to act by any director,
      officer, employee, agent or representative with respect to the Movie
      Distribution Business); or




(c)           any
      Movie Employee or any Former Movie Employee (other than a Corresponding Employee
      or a Corresponding Former Employee of a Group other than the Movie Group) in
      respect of the period prior to, on or after the Effective Time;




(iii)           any
      and all Liabilities of the Corporate Division that either (x) are or were more
      related to the Movie Distribution Business than any other Business, or (y)
      for
      which the Movie Distribution Business has or had principal use or
      responsibility;




(iv)           any
      Liabilities relating to, arising out of or resulting from any indebtedness
      (including debt securities and asset-backed debt) of any member of the Movie
      Group or indebtedness (regardless of the issuer of such indebtedness) primarily
      relating to the Movie Distribution Business




21


or
      any
      indebtedness (regardless of the issuer of such indebtedness) secured primarily
      by any of the Movie Distribution Assets (including any Liabilities relating
      to,
      arising out of or resulting from a claim by a holder of any such indebtedness,
      in its capacity as such);




(v)           such
      percentage of the Residual Liabilities that, together with the percentages
      of
      Residual Liabilities forming part of the Entertainment Liabilities, the
      International Distribution Liabilities, the Production Liabilities and the
      Propinquity Liabilities, equals 50%;




(vi)           all
      Liabilities of CW Media or any of its Subsidiaries (which Subsidiaries were
      Subsidiaries of CW Media immediately prior to the commencement of the
      implementation of the Plan of Separation) relating to, arising out of or
      resulting from any Action with respect to the Plan of Separation made or brought
      by any third party against any Party or any member of any Party’s respective
      Group (which, for the avoidance of doubt, excludes any Action by a Party or
      member of such Party’s Group, on the one hand, against another Party or member
      of such other Party’s Group, on the other hand) and primarily relating to the
      Movie Distribution Business;




(vii)           all
      Liabilities arising under or relating to any Movie Distribution Contracts;
      and




(viii)                      all
      Liabilities for Taxes that are classified as and deemed to be Movie Distribution
      Liabilities in Schedule 2.11.




Notwithstanding
      anything to the contrary herein, the Movie Distribution Liabilities shall not
      include:




(x)
            any
                Liabilities that are expressly contemplated by this Agreement or
                any
                Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities
                to
                be retained or Assumed by any member of a Group other than the Movie
                Group
                or for which any member of such Group is liable pursuant to this
                Agreement
                or such Ancillary Agreement; and




(y)
            any
                Contracts expressly Assumed by any member of a Group other than the
                Movie
                Group under this Agreement or any of the Ancillary
                Agreements.




(93)           “Movie
      Employee” shall mean an active employee or an employee on vacation or on a
      leave of absence (including under the *Canada Labour Code*, the
*Employment Standards Act* (Ontario) or other applicable legislation) who
      is employed by, is to be employed effective immediately after the Effective
      Time
      (regardless of whether such employee accepts employment) by or will be employed
      by Movie or any member of the Movie Group or otherwise primarily provides or
      provided services for the Movie Distribution Business, including those employees
      of the Predecessor and its Subsidiaries listed in Schedule 1.1(93).  For the avoidance of doubt,
      Movie Employee shall include such employees who, as of the Closing Date,
      are




22


receiving
      short-term or long-term disability benefits or workers’ compensation benefits
      and, unless otherwise specified herein, any Former Movie Employees but shall
      not, during the term of the Transition Services Agreement, include the employees
      listed in Exhibit B to the Transition Services Agreement.




(94)           “Movie
      Group” shall mean Movie together with each Person that is a Subsidiary of
      Movie after the Effective Time, and shall include those entities identified
      as
      such on Schedule 1.1(94).




(95)           “New
      Entity” shall mean any of Entertainment, International, Movie, Production,
      Propinquity, STV or ShelterCo.




(96)           “Non-Liable
      Party” shall have the meaning set forth in Section 2.9(a).




(97)           “Other
      Party Marks” shall have the meaning set forth in Section 4.2(a).




(98)           “Person”
      shall mean any natural person, firm, individual, corporation, business trust,
      joint venture, association, company, limited liability company, unlimited
      liability company, partnership or other organization or entity, whether
      incorporated or unincorporated, or any Governmental Entity.




(99)           “Party”
      or “Parties” shall have the meaning set forth in the
      preamble.




(100)                      “Plan”
      means any employee benefit plan, program, policy, practices, undertaking,
      agreement or other arrangement under which benefits are to be provided or
      payments are to be made to any current or former employee, service provider,
      Person working on contract, officer or director (or any beneficiary, dependent
      or spouse of any such Person) that is sponsored or maintained by any Person,
      whether funded or unfunded, insured or uninsured, to which any Person
      contributes or is obligated to contribute or to which any Person has, or will
      have, any Liability or contingent Liability, whether or not written, including
      any employee welfare benefit plan within the meaning of Section 3(1) of ERISA,
      any employee pension benefit plan within the meaning of Section 3(2) of ERISA
      (whether or not such plan is subject to ERISA) and any bonus, incentive,
      deferred compensation, vacation, stock purchase, stock option, severance,
      employment, change of control or fringe benefit plan, program, agreement or
      policy, other than in each case statutory benefit plans.




(101)                      “Plan
      of Separation” shall have the meaning set forth in the
      recitals.




(102)                      “Policies”
      shall mean insurance policies and insurance Contracts of any kind (other than
      life and benefits policies or Contracts and policies or Contracts in respect
      of
      a Plan), including primary, excess and umbrella policies, comprehensive general
      liability policies, director and officer liability, fiduciary liability,
      automobile, aircraft, property and casualty, short-term and long-term
      disability, and employee dishonesty insurance policies, bonds and self-insurance
      and captive insurance company arrangements, together with the rights, benefits
      and privileges thereunder.




(103)                      “Predecessor”
      shall have the meaning set forth in the recitals.




23


(104)                      “Prime
      Rate” shall have the meaning set forth in Section 10.11(a).




(105)                      “Production”
      shall have the meaning set forth in the preamble.




(106)                      “Production
      Assets” shall mean:




(i)           the
      ownership interests in all Business Entities in the Production
      Group;




(ii)           all
      Production Contracts, any rights or claims arising thereunder, and any other
      rights or claims or contingent rights or claims primarily relating to or arising
      from any Production Asset or the Production Business;




(iii)           subject
      to Article IX, any rights of any member of
      the Production Group under any Policies, including any rights thereunder arising
      after the Closing Date in respect of any Policies that are occurrence
      policies;




(iv)           any
      and all Assets owned or held immediately prior to the commencement of the
      implementation of the Plan of Separation by CW Media or any of its Subsidiaries
      (including, prior to the Effective Time, by any Group) (A) that comprise or
      comprised or relate or related primarily to the Production Business or (B)
      that
      comprise or comprised the Corporate Division and either (x) are or were more
      related to the Production Business than the other Businesses, or (y) for which
      the Production Business has or had principal use or responsibility;




(v)           the
      Assets set forth on Schedule 1.1(106)(v)
      and any and all Assets that are expressly contemplated by this Agreement or
      any
      Ancillary Agreement as Assets which have been or are to be Transferred to
      Production or any other member of the Production Group;




(vi)           any
      and all furnishings and office equipment located at a physical site of which
      the
      ownership or leasehold interest is being Transferred to Production or a
      Subsidiary of Production; provided, that personal computers shall be
      Transferred to the Party or Subsidiary of the Party that, following the
      Effective Time, employs the applicable employee who, prior to the Effective
      Time, used such personal computer; and




(vii)           any
      Cash owned by any member of the Production Group that is not a wholly-owned
      Subsidiary of Production.




Notwithstanding
      the foregoing, the Production Assets shall not include (i) any Cash, except
      as
      provided in clause (vii) of this Section
      1.1(106), or (ii) any Assets that are
      expressly contemplated by this Agreement or any Ancillary Agreement (or the
      Schedules hereto or thereto) as Assets to be retained by or Transferred to
      any
      member of a Group other than the Production Group.




24


In
      the
      event of any inconsistency or conflict which may arise in the application or
      interpretation of any of the foregoing provisions, for the purpose of
      determining what is and is not an Production Asset, any item explicitly included
      on a Schedule referred to in this Section 1.1(106) (shall take priority over any
      provision
      of the text hereof.




(107)                      “Production
      Business” shall mean (i) the business of holding the rights to the programs
      and films of the Canadian film library of the Predecessor (and its Subsidiaries
      immediately prior to the  Effective Time) conducted primarily through
      the members of the Production Group prior to the Effective Time and (ii) the
      businesses and operations of Business Entities acquired or established by or
      for
      Production or any of its Subsidiaries after the date of this
      Agreement.




(108)                      “Production
      Contracts” shall mean the following Contracts to which CW Media or any of
      its Affiliates is a party or by which it or any of its Affiliates or any of
      their respective Assets is bound, whether or not in writing, except for any
      such
      Contract or part thereof (i) that is expressly contemplated not to be
      Transferred by any member of any Group other than the Production Group to the
      Production Group or (ii) that is expressly contemplated to be Transferred to
      (or
      remain with) any member of any Group other than the Production Group, in each
      case, pursuant to any provision of this Agreement or any Ancillary
      Agreement:




(i)           any
      Contract entered into in the name of, or expressly on behalf of, any division,
      business unit or member of the Production Group;




(ii)           any
      Contract that relates primarily to the Production Business;




(iii)           any
      Contract or part thereof, that is otherwise expressly contemplated pursuant
      to
      this Agreement (including pursuant to Section
      2.2(c)) or any of the Ancillary Agreements to be assigned to any
      member of the Production Group;




(iv)           any
      guarantee, indemnity, representation or warranty of or in favour of any member
      of the Production Group; and




(v)           the
      Contracts listed on Schedule 1.1(108).




(109)                      “Production
      Employee” shall mean an active employee or an employee on vacation or on a
      leave of absence (including under the *Canada Labour Code*, the
*Employment Standards Act* (Ontario) or other applicable legislation) who
      is employed by, is to be employed effective immediately after the Effective
      Time
      (regardless of whether such employee accepts employment) by or will be employed
      by Production or any member of the Production Group or otherwise primarily
      provides or provided services for the Production Business, including those
      employees of the Predecessor and its Subsidiaries listed in Schedule
      1.1(109).  For the avoidance
      of doubt, Production Employee shall include such employees who, as of the
      Closing Date, are receiving short-term or long-term disability benefits or
      workers’ compensation benefits and, unless otherwise specified herein, any
      Former Production Employees.




25


(110)                      “Production
      Group” shall mean Production  together with each Person that is a
      Subsidiary of Production after the Effective Time, and shall include those
      entities identified as such on Schedule 1.1(110).




(111)                      “Production
      Liabilities” shall mean:




(i)           any
      and all Liabilities, including Liabilities for Taxes, that are expressly
      contemplated by this Agreement or any Ancillary Agreement (or the Schedules
      hereto or thereto, including Schedule 1.1(111)(i)
      and Schedule 2.11 hereto) as Liabilities to be Assumed by any member of
      the Production Group, and all obligations and Liabilities expressly Assumed
      by
      any member of the Production Group under this Agreement or any of the Ancillary
      Agreements;




(ii)           any
      and all Liabilities, including Liabilities for Taxes, that relate or related
      primarily to:




(a)           the
      operation or conduct of the Production Business (including the use of any and
      all Trademarks in association with the operation or conduct of the Production
      Business), as conducted at any time prior to, on or after the Effective Time
      (including any Liability relating to, arising out of or resulting from any
      act
      or failure to act by any director, officer, employee, agent or representative
      with respect to the Production Business and guarantees or indemnities of or
      in
      favour of the Production Business or a member of the Production
      Group);




(b)           the
      operation or conduct of any business conducted by any member of the Production
      Group at any time after the Effective Time (including any Liability relating
      to,
      arising out of or resulting from any act or failure to act by any director,
      officer, employee, agent or representative with respect to the Production
      Business); or




(c)           any
      Production Employee or any Former Production Employee (other than a
      Corresponding Employee or a Corresponding Former Employee of a Group other
      than
      the Production Group) in respect of the period prior to, on or after the
      Effective Time;




(iii)           any
      and all Liabilities of the Corporate Division that either (x) are or were more
      related to the Production Business than any other Business, or (y) for which
      the
      Production Business has or had principal use or responsibility;




(iv)           any
      Liabilities relating to, arising out of or resulting from any indebtedness
      (including debt securities and asset-backed debt) of any member of the
      Production Group or indebtedness (regardless of the issuer of such indebtedness)
      primarily relating to the Production Business or any indebtedness (regardless
      of
      the issuer of such indebtedness) secured primarily by any of the Production
      Assets (including any Liabilities




26


relating
      to, arising out of or resulting from a claim by a holder of any such
      indebtedness, in its capacity as such);




(v)           such
      percentage of the Residual Liabilities that, together with the percentages
      of
      Residual Liabilities forming part of the Entertainment Liabilities, the
      International Distribution Liabilities, the Movie Distribution Liabilities
      and
      the Propinquity Liabilities, equals 50%;;




(vi)           all
      Liabilities of CW Media or any of its Subsidiaries (which Subsidiaries were
      Subsidiaries of CW Media immediately prior to the commencement of the Plan
      of
      Separation) relating to, arising out of or resulting from any Action with
      respect to the Plan of Separation made or brought by any third party against
      any
      Party or any member of any Party’s respective Group (which, for the avoidance of
      doubt, excludes any Action by a Party or member of such Party’s Group, on the
      one hand, against another Party or member of such other Party’s Group, on the
      other hand) and primarily relating to the Production Business;




(vii)           all
      Liabilities arising under or relating to any Production Contracts;
      and




(viii)                      all
      Liabilities for Taxes that are classified as and deemed to be Production
      Liabilities in Schedule 2.11.




Notwithstanding
      anything to the contrary herein, the Production Liabilities shall not
      include:




(x)
            any
                Liabilities that are expressly contemplated by this Agreement or
                any
                Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities
                to
                be retained or Assumed by any member of a Group other than the Production
                Group or for which any such Party is liable pursuant to this Agreement
                or
                such Ancillary Agreement; and




(y)
            any
                Contracts expressly Assumed by any member of a Group other than the
                Production Group under this Agreement or any of the Ancillary
                Agreements.




(112)                      “Propinquity”
      shall have the meaning set forth in the preamble.




(113)                      “Propinquity
      Assets” shall mean:




(i)           the
      ownership interests in all Business Entities in the Propinquity
      Group;




(ii)           all
      Propinquity Contracts, any rights or claims arising thereunder, and any other
      rights or claims or contingent rights or claims primarily relating to or arising
      from any Propinquity Asset or the Propinquity Business;




27


(iii)           subject
      to Article IX, any rights of any member of
      the Propinquity Group under any Policies, including any rights thereunder
      arising after the Closing Date in respect of any Policies that are occurrence
      policies;




(iv)           any
      and all Assets owned or held immediately prior to the Effective Time by CW
      Media
      or any of its Subsidiaries (including, prior to commencement of the
      implementation of the Plan of Separation, by any Group) (A) that comprise or
      comprised or relate or related primarily to the Propinquity Business or (B)
      that
      comprise or comprised the Corporate Division and either (x) are or were more
      related to the Propinquity Business than the other Businesses, or (y) for which
      the Propinquity Business has or had principal use or
      responsibility;




(v)           the
      Assets set forth on Schedule 1.1(113)(v)
      and any and all Assets that are expressly contemplated by this Agreement or
      any
      Ancillary Agreement as Assets which have been or are to be Transferred to
      Propinquity or any other member of the Propinquity Group; and




(vi)           any
      and all furnishings and office equipment located at a physical site of which
      the
      ownership or leasehold interest is being Transferred to Propinquity or a
      Subsidiary of Propinquity; provided, that personal computers shall be
      Transferred to the Party or Subsidiary of the Party that, following the
      Effective Time, employs the applicable employee who, prior to the Effective
      Time, used such personal computer; and




(vii)           any
      Cash owned by any member of the Propinquity Group that is not a wholly-owned
      Subsidiary of Propinquity.




Notwithstanding
      the foregoing, the Propinquity Assets shall not include (i) any Cash, except
      as
      provided in clause (vii) of this Section
      1.1(113), or (ii) any Assets that are
      expressly contemplated by this Agreement or any Ancillary Agreement (or the
      Schedules hereto or thereto) as Assets to be retained by or Transferred to
      any
      member of a Group other than the Propinquity Group.




In
      the
      event of any inconsistency or conflict which may arise in the application or
      interpretation of any of the foregoing provisions, for the purpose of
      determining what is and is not an Propinquity Asset, any item explicitly
      included on a Schedule referred to in this Section 1.1(113)shall take priority over any
      provision of
      the text hereof.




(114)                      “Propinquity
      Business” shall mean (i) the business of holding the Canadian music
      publishing rights of the Predecessor (and its Subsidiaries immediately prior
      to
      the Effective Time), which are administered by Sony/ATV, conducted primarily
      through the members of the Propinquity Group prior to the Effective Time and
      (ii) the businesses and operations of Business Entities acquired or established
      by or for Propinquity or any of its Subsidiaries after the date of this
      Agreement.




(115)                      “Propinquity
      Contracts” shall mean the following Contracts to which CW Media or any of
      its Affiliates is a party or by which it or any of its Affiliates or any of
      their




28


respective
      Assets is bound, whether or not in writing, except for any such Contract or
      part
      thereof (i) that is expressly contemplated not to be Transferred by any member
      of any Group other than the Propinquity Group to the Propinquity Group or (ii)
      that is expressly contemplated to be Transferred to (or remain with) any member
      of any Group other than the Propinquity Group, in each case, pursuant to any
      provision of this Agreement or any Ancillary Agreement:




(i)           any
      Contract entered into in the name of, or expressly on behalf of, any division,
      business unit or member of the Propinquity Group;




(ii)           any
      Contract that relates primarily to the Propinquity Business;




(iii)           any
      Contract or part thereof, that is otherwise expressly contemplated pursuant
      to
      this Agreement (including pursuant to Section
      2.2(c)) or any of the Ancillary Agreements to be assigned to any
      member of the Propinquity Group;




(iv)           any
      guarantee, indemnity, representation or warranty of or in favour of any member
      of the Propinquity Group; and




(v)           the
      Contracts listed on Schedule 1.1(115).




(116)                      “Propinquity
      Employee” shall mean an active employee or an employee on vacation or on a
      leave of absence (including under the *Canada Labour Code*, the
*Employment Standards Act* (Ontario) or other applicable legislation) who
      is employed by, is to be employed effective immediately after the Effective
      Time
      (regardless of whether such employee accepts employment) by or will be employed
      by Propinquity or any member of the Propinquity Group or otherwise primarily
      provides or provided services for the Propinquity Business, including those
      employees of the Predecessor and its Subsidiaries listed in Schedule
      1.1(116).  For the avoidance
      of doubt, Propinquity Employee shall include such employees who, as of the
      Closing Date, are receiving short-term or long-term disability benefits or
      workers’ compensation benefits and, unless otherwise specified herein, any
      Former Propinquity Employees.




(117)                      “Propinquity
      Group” shall mean Propinquity together with each Person that is a Subsidiary
      of Propinquity after the Effective Time, and shall include those entities
      identified as such on Schedule 1.1(117).




(118)                      “Propinquity
      Liabilities” shall mean:




(i)           any
      and all Liabilities, including Liabilities for Taxes, that are expressly
      contemplated by this Agreement or any Ancillary Agreement (or the Schedules
      hereto or thereto, including Schedule 1.1(118)(i)
      and Schedule 2.11 hereto) as Liabilities to be Assumed by any member of
      the Propinquity Group, and all obligations and Liabilities expressly Assumed
      by
      any member of the Propinquity Group under this Agreement or any of the Ancillary
      Agreements;




29


(ii)           any
      and all Liabilities, including Liabilities for Taxes, that relate or related
      primarily to:




(a)           the
      operation or conduct of the Propinquity Business (including the use of any
      and
      all Trademarks in association with the operation or conduct of the Propinquity
      Business), as conducted at any time prior to, on or after the Effective Time
      (including any Liability relating to, arising out of or resulting from any
      act
      or failure to act by any director, officer, employee, agent or representative
      with respect to the Propinquity Business and guarantees or indemnities of or
      in
      favour of the Propinquity Business or a member of the Propinquity
      Group);




(b)           the
      operation or conduct of any business conducted by any member of the Propinquity
      Group at any time after the Effective Time (including any Liability relating
      to,
      arising out of or resulting from any act or failure to act by any director,
      officer, employee, agent or representative with respect to the Propinquity
      Business); or




(c)           any
      Propinquity Employee or any Former Propinquity Employee (other than a
      Corresponding Employee or a Corresponding Former Employee of a Group other
      than
      the Propinquity Group) in respect of the period prior to, on or after the
      Effective Time;




(iii)           any
      and all Liabilities of the Corporate Division that either (x) are or were more
      related to the Propinquity Business than any other Business, or (y) for which
      the Propinquity Business has or had principal use or
      responsibility;




(iv)           any
      Liabilities relating to, arising out of or resulting from any indebtedness
      (including debt securities and asset-backed debt) of any member of the
      Propinquity Group or indebtedness (regardless of the issuer of such
      indebtedness) primarily relating to the Propinquity Business or any indebtedness
      (regardless of the issuer of such indebtedness) secured primarily by any of
      the
      Propinquity Assets (including any Liabilities relating to, arising out of or
      resulting from a claim by a holder of any such indebtedness, in its capacity
      as
      such);




(v)           such
      percentage of the Residual Liabilities that, together with the percentages
      of
      Residual Liabilities forming part of the Entertainment Liabilities, the
      International Distribution Liabilities, the Movie Distribution Liabilities
      and
      the Production Liabilities, equals 50%;




(vi)           all
      Liabilities of CW Media or any of its Subsidiaries (which Subsidiaries were
      Subsidiaries of CW Media immediately prior to the commencement of the Plan
      of
      Separation) relating to, arising out of or resulting from any Action with
      respect to the Plan of Separation made or brought by any third party against
      any
      Party or any member of any Party’s




30


respective
      Group (which, for the avoidance of doubt, excludes any Action by a Party or
      member of such Party’s Group, on the one hand, against another Party or member
      of such other Party’s Group, on the other hand) and primarily relating to the
      Propinquity Business;




(vii)           all
      Liabilities arising under or relating to any Propinquity Contracts;
      and




(viii)                      all
      Liabilities for Taxes that are classified as and deemed to be Propinquity
      Liabilities in Schedule 2.11.




Notwithstanding
      anything to the contrary herein, the Propinquity Liabilities shall not
      include:




(x)
            any
                Liabilities that are expressly contemplated by this Agreement or
                any
                Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities
                to
                be retained or Assumed by any member of a Group other than the Propinquity
                Group or for which any such Party is liable pursuant to this Agreement
                or
                such Ancillary Agreement; and




(y)
            any
                Contracts expressly Assumed by any member of a Group other than the
                Propinquity Group under this Agreement or any of the Ancillary
                Agreements.




(119)                      “Records”
      shall mean any Contracts, documents, books, records, ledgers or files, whether
      printed, electronic or written.




(120)                      “Residual
      Liabilities” shall mean any Liabilities of the Predecessor and its
      Subsidiaries that are not Entertainment Liabilities, International Distribution
      Liabilities, Movie Distribution Liabilities, Production Liabilities, Propinquity
      Liabilities, Sheltered Liabilities or Specialty Television Liabilities,
      including:




(i)           any
      of the Liabilities set forth on Schedule 1.1(120)(i);




(ii)           any
      and all Liabilities of CW Media or any of its Subsidiaries (which Subsidiaries
      were Subsidiaries of CW Media immediately prior to the Effective Time) relating
      to, arising out of or resulting from any Action with respect to the Plan of
      Separation made or brought by any third party or Governmental Agency against
      any
      Party or any member of any Party’s respective Group (which, for the avoidance of
      doubt, excludes any Action by a Party or member of such Party’s Group, on the
      one hand, against another Party or member of such other Party’s Group, on the
      other hand), other than Liabilities relating to Taxes;




(iii)           any
      and all Liabilities relating to, arising out of or resulting from any (x) claims
      for indemnification by any current or former directors, officers or employees
      of
      CW Media or any of its current or former Subsidiaries, in their capacities
      as
      such, or (y) claims for breach of




31


fiduciary
      duties brought against any current or former directors, officers or employees
      of
      CW Media or any of its current or former Subsidiaries, in their capacities
      as
      such, in each case, relating to any acts, omissions or events on or prior to
      the
      Effective Time;




(iv)           any
      and all costs or expenses actually incurred by any Party (or their respective
      Groups) in connection with obtaining Consents or Governmental Approvals or
      fulfilling conditions required to consummate a deferred Transfer or Assumption,
      as required by Section 2.6; and




(v)           any
      Liabilities for Taxes that are classified as and deemed to be Residual
      Liabilities in Schedule 2.11;




except,
      in the case of each of clauses (ii), (iii) and (iv) above, for any Liability
      that is otherwise specified to be a Corresponding Liability of any Group
      (ignoring for purposes of this clause any references to Residual Liabilities
      in
      the definitions of such terms), as the case may be, or otherwise specifically
      allocated to any Party or Parties under this Agreement or any Ancillary
      Agreement and, for the avoidance of doubt, except for the Corporate Retention
      and Severance Liabilities and the Executive Retention and Severance
      Liabilities.




(121)                      “Restricted
      Person” shall have the meaning set forth in Section 4.1.




(122)                      “Security
      Interest” shall mean any mortgage, security interest, pledge, lien, charge,
      claim, option, right to acquire, voting or other restriction, right-of-way,
      covenant, condition, easement, encroachment, restriction on transfer, or other
      encumbrance of any nature whatsoever, excluding restrictions on transfer under
      securities Laws.




(123)                      “Separation
      Expenses” shall mean the fees, costs and expenses (including third party
      fees, costs and expenses and employment-related costs and expenses) set forth
      on
Schedule 1.1(123) incurred by any of
      the Parties on a non-recurring basis directly as a result of the Acquisition
      and
      the Plan of Separation.




(124)                      “Separation
      Transfers” shall have the meaning set forth in Section 2.2(a)(iii).




(125)                      “Shared
      Contract” shall have the meaning set forth in Section 2.2(c)(i).




(126)                      “Shared
      Policies” shall mean, without duplication, all Corresponding Shared Policies
      of any New Entity.




(127)                      “Shelter
      Business” shall mean the business operated by the Shelter
      Group.




(128)                      “Shelter
      Group” shall mean ShelterCo together with each Person that is a Subsidiary
      of ShelterCo after the Effective Time, and shall include those entities
      identified as such on Schedule 1.1(128).




(129)                      “Shelter
      Transfer” shall have the meaning set forth in Section 2.2(a)(iv).




32


(130)                      “ShelterCo”
      shall have the meaning set forth in the preamble.




(131)                      “Sheltered
      Assets” shall mean the ownership interests in all Business Entities in the
      Shelter Group and all Assets held immediately prior to the Effective Time by
      any
      such Business Entity.  Notwithstanding the foregoing, the Sheltered
      Assets shall not include any Assets that are expressly contemplated by this
      Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as
      Assets to be retained by or Transferred to any member of any Group other than
      the Shelter Group.




(132)                      “Sheltered
      Liabilities” shall mean all Liabilities, including Liabilities for Taxes,
      held immediately prior to the Effective Time by any Business Entity in the
      Shelter Group and all Liabilities for Taxes that are classified as and deemed
      to
      be Sheltered Liabilities in Schedule 2.11.  Notwithstanding the
      foregoing, the Sheltered Liabilities shall not include any Liabilities that
      are
      expressly contemplated by this Agreement or any Ancillary Agreement (or the
      Schedules hereto or thereto) as Liabilities to be retained by or Assumed by
      any
      member of any Group other than the Shelter Group or for which any such Party
      is
      liable pursuant to this Agreement or such Ancillary Agreement other than
      guarantees or indemnities of or in favour of the Shelter Business or
      a  member of the Shelter Group that are retained or Assumed by a
      member of another Group.




(133)                      “Software”
      shall mean all computer programs (whether in source code, object code, or other
      form), algorithms, databases, compilations and data, and technology supporting
      the foregoing, and all documentation, including flowcharts and other logic
      and
      design diagrams, technical, functional and other specifications, and user and
      training materials related to any of the foregoing.




(134)                      “Specialty
      Television Assets” shall mean all Assets of CW Media or its Subsidiaries
      other than the Corresponding Assets of any Group other than the STV Group,
      including:




(i)           the
      ownership interests in CW Media and all Business Entities in the STV
      Group;




(ii)           all
      Specialty Television Contracts, any rights or claims arising thereunder, and
      any
      other rights or claims or contingent rights or claims primarily relating to
      or
      arising from any Specialty Television Asset or the Specialty Television
      Business;




(iii)           subject
      to Article IX, any rights of any member of
      the STV Group under any Policies, including any rights thereunder arising after
      the STV Closing Date in respect of any Policies that are occurrence
      policies;




(iv)           any
      and all Assets owned or held immediately prior to the commencement of the
      implementation of the Plan of Separation by CW Media or any of its Subsidiaries
      (including, prior to the Closing Date, by any Group) (A) that comprise or
      comprised or relate or related primarily to the Specialty Television Business
      or
      (B) that comprise or comprised the Corporate Division and either (x) are or
      were
      more related to the Specialty




33


Television
      Business than any other Business, or (y) for which the Specialty Television
      Business has or had principal use or responsibility;




(v)           the
      Assets set forth on Schedule 1.1(134)(vi)
      and any
      and all Assets that are expressly contemplated by this Agreement or any
      Ancillary Agreement as Assets which have been or are to be Transferred to STV
      or
      any other member of the STV Group;




(vi)           any
      and all furnishings and office equipment located at a physical site of which
      the
      ownership or leasehold interest is being Transferred to STV or a subsidiary
      of
      STV; provided, that personal computers shall be Transferred to the Party
      or Subsidiary of the Party that, following the Effective Time, employs the
      applicable employee who, prior to the Effective Time, used such personal
      computer; and




(vii)           all
      Cash owned by any member of the STV Group that is not a wholly-owned Subsidiary
      of STV.




Notwithstanding
      the foregoing, the Specialty Television Assets shall not include (i) any Cash,
      except as provided in clause (vii) of this
Section 1.1(134);
      or (ii) any Assets
      that are expressly contemplated by this Agreement or any Ancillary Agreement
      (or
      the Schedules hereto or thereto) as Assets to be retained by or Transferred
      to
      any member of a Group other than the STV Group.




In
      the
      event of any inconsistency or conflict which may arise in the application or
      interpretation of any of the foregoing provisions, for the purpose of
      determining what is and is not a Specialty Television Asset, any item explicitly
      included on a Schedule referred to in this Section 1.1(134) shall take priority over any
      provision of
      the text hereof.




(135)                      “Specialty
      Television Business” shall mean (i) the business of owning and operating
      specialty television broadcasting channels, including those businesses regulated
      by the Canadian Radio-television and Telecommunications Commission, conducted
      primarily through the members of the STV Group prior to the Effective Time
      and
      (ii) the businesses and operations of Business Entities acquired or established
      by or for STV or any of its Subsidiaries after the date of this
      Agreement.




(136)                      “Specialty
      Television Contracts” shall mean the following Contracts to which CW Media
      or any of its Affiliates is a party or by which it or any of its Affiliates
      or
      any of their respective Assets is bound, whether or not in writing, except
      for
      any such Contract or part thereof (i) that is expressly contemplated not to
      be
      Transferred by any member of any Group other than the STV Group to the STV
      Group
      or (ii) that is expressly contemplated to be Transferred to (or remain with)
      any
      member of any Group other than the STV Group, pursuant to any provision of
      this
      Agreement or any Ancillary Agreement:




(i)           any
      Contract entered into in the name of, or expressly on behalf of, any division,
      business unit or member of the STV Group;




34


(ii)           any
      Contract that relates primarily to the Specialty Television
      Business;




(iii)           any
      Contract or part thereof, that is otherwise expressly contemplated pursuant
      to
      this Agreement (including pursuant to Section
      2.2(c)) or any of the Ancillary Agreements to be assigned to any
      member of the STV Group;




(iv)           any
      guarantee, indemnity, representation or warranty of or in favour of any member
      of the STV Group; and




(v)           the
      Contracts listed on Schedule 1.1(136).




(137)                      “Specialty
      Television Liabilities” shall mean:




(i)           any
      and all Liabilities, including Liabilities for Taxes, that are expressly
      contemplated by this Agreement or any Ancillary Agreement (or the Schedules
      hereto or thereto, including Schedule 1.1(137)(i)
      or
Schedule 2.11 hereto) as Liabilities to be Assumed by any member of the
      STV Group, and all obligations and Liabilities expressly Assumed by any member
      of the STV Group under this Agreement or any of the Ancillary
      Agreements;




(ii)           any
      and all Liabilities, including Liabilities for Taxes, that relate or related
      primarily to:




(a)           the
      operation or conduct of the Specialty Television Business (including the use
      of
      any and all Trademarks in association with the operating or conduct of the
      Specialty Television Business), as conducted at any time prior to, on or after
      the Effective Time (including any Liability relating to, arising out of or
      resulting from any act or failure to act by any director, officer, employee,
      agent or representative with respect to the Specialty Television Business and
      guarantees or indemnities of or in favour of the STV Business or a member of
      the
      STV Group);




(b)           the
      operation or conduct of any business conducted by any member of the STV Group
      at
      any time after the Effective Time (including any Liability relating to, arising
      out of or resulting from any act or failure to act by any director, officer,
      employee, agent or representative with respect to the Specialty Television
      Business); or




(c)           any
      STV Employee or any Former STV Employee (other than a Corresponding Employee
      or
      a Corresponding Former Employee of a Group other than the STV Group) in respect
      of the period prior to, on or after the Effective Time;




(iii)           any
      and all Liabilities of the Corporate Division that either (x) are or were more
      related to the Specialty Television Business than any other




35


Business,
      or (y) for which the Specialty Television Business has or had principal use
      or
      responsibility;




(iv)           any
      Liabilities relating to, arising out of or resulting from any indebtedness
      (including debt securities and asset-backed debt) of any member of the STV
      Group
      or indebtedness (regardless of the issuer of such indebtedness) primarily
      relating to the Specialty Television Business or any indebtedness (regardless
      of
      the issuer of such indebtedness) secured primarily by any of the Specialty
      Television Assets (including any Liabilities relating to, arising out of or
      resulting from a claim by a holder of any such indebtedness, in its capacity
      as
      such);




(v)           those
      Separation Expenses allocated to the STV Group in accordance with Schedule
      1.1(123);




(vi)           50%
      of the Residual Liabilities;




(vii)           those
      Corporate Retention and Severance Liabilities and Executive Retention and
      Severance Liabilities allocated to the STV Group in accordance with Schedule
      1.1(123);




(viii)                      all
      Liabilities of CW Media or any of its Subsidiaries (which Subsidiaries were
      Subsidiaries of CW Media immediately prior to the commencement of the Plan
      of
      Separation) relating to, arising out of or resulting from any Action with
      respect to the Plan of Separation made or brought by any third party against
      any
      Party or any member of any Party’s respective Group (which, for the avoidance of
      doubt, excludes any Action by a Party or member of such Party’s Group, on the
      one hand, against another Party or member of such other Party’s Group, on the
      other hand) and primarily relating to the Specialty Television
      Business;




(ix)           all
      Liabilities arising under or relating to any Specialty Television Contracts;
      and




(x)           all
      Liabilities for Taxes that are classified as and deemed to be Specialty
      Television Liabilities in Schedule 2.11.




Notwithstanding
      anything to the contrary herein, the Specialty Television Liabilities shall
      not
      include:




(x)
            any
                Liabilities that are expressly contemplated by this Agreement or
                any
                Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities
                to
                be retained or Assumed by any member of any Group other than the
                STV Group
                or for which any such Group is liable pursuant to this Agreement
                or such
                Ancillary Agreement; and




(y)
            any
                Contracts expressly Assumed by any member of any Group other than
                the STV
                Group under this Agreement or any of the Ancillary
                Agreements.




36


(138)
            “Specialty
                Television Transfer” shall have the meaning set forth in Section
                2.2(a)(i).




(139)                      “STV”
      shall have the meaning set forth in the preamble.




(140)                      “STV
      Employee” shall mean an active employee or an employee on vacation or on a
      leave of absence (including under the *Canada Labour Code*, the
*Employment Standards Act* (Ontario) or other applicable legislation) who
      is employed by, is to be employed effective immediately after the Effective
      Time
      (regardless of whether such employee accepts employment) by or will be employed
      by STV or any member of the STV Group or otherwise primarily provides or
      provided services for the Specialty Television Business, including those
      employees of the Predecessor and its Subsidiaries listed in Schedule
      1.1(140).  For the avoidance
      of doubt, STV Employee shall include, during the term of the Transition Services
      Agreement, the employees listed in Exhibit B to the Transition Services
      Agreement and shall include such employees who, as of the Closing Date, are
      receiving short-term or long-term disability benefits or workers’ compensation
      benefits and, unless otherwise specified herein, any Former STV
      Employees.




(141)                      “STV
      Group” shall mean STV together with each Person that is a Subsidiary of STV
      after the Effective Time, and shall include those entities identified as such
      on
Schedule 1.1(141).




(142)                      “Steps
      Memo” shall have the meaning set forth in the recitals.




(143)                      “Subsidiary”
      shall mean with respect to any Person (i) a corporation, fifty percent (50%)
      or
      more of the voting or capital stock of which is, as of the time in question,
      directly or indirectly owned by such Person and (ii) any other partnership,
      joint venture, association, joint stock company, trust, unincorporated
      organization or other entity in which such Person, directly or indirectly,
      owns
      fifty percent (50%) or more of the equity economic interest thereof or has
      the
      power to elect or direct the election of fifty percent (50%) or more of the
      members of the governing body of such entity or otherwise has control over
      such
      entity (e.g., as the managing partner of a partnership).




(144)                      “Taxes”
      shall mean all taxes, duties, fees, premiums, assessments, imposts, levies
      and
      other charges of any kind whatsoever imposed by any Governmental Entity or
      payable under any Laws, together with all interest, penalties, fines, additions
      to tax or other additional amounts imposed in respect thereof, including those
      levied on, or measured by, or referred to as gross receipts, capital,
      alternative, net worth, transfer, land transfer, sales, goods and services,
      harmonized sales, use, value-added, excise, stamp, withholding, business,
      franchising, property, employer health, payroll, employment, health, social
      services, education and social security taxes, Income Taxes, all surtaxes,
      all
      customs duties and import and export taxes, all license, franchise and
      registration fees and all employment insurance, health insurance, workers’
compensation and Canada, Québec and other government pension plan premiums or
      contributions.




(145)                      “Tax
      Contest” shall mean any proceeding, investigation, audit, reassessment,
      objection, appeal or claim now pending, threatened or which may arise in
      the




37


future
      in
      connection with Taxes that are disputed by the taxpayer and which may result
      in
      a Liability.




(146)                      “Tax
      Return” shall mean all returns, reports, declarations, elections, notices,
      filings, forms,  information returns, statements and other documents
      (whether in tangible, electronic or other form) and including any amendments,
      schedules, attachments, supplements, appendices and exhibits thereto, made,
      prepared, filed or required to be made, prepared or filed in respect of
      Taxes.




(147)                      “Tax
      Step-Up” means the increase in the cost of non-depreciable capital property
      under paragraphs 88(1)(c) and (d) of the *Income Tax Act* (Canada)
      available to AcquireCo and its successors on (i) the amalgamation referred
      to in
      Step 120 in the Steps Memo (in respect of non-depreciable capital property
      owned
      by the Predecessor), (ii) the amalgamation referred to in Step 129 in the Steps
      Memo (in respect of non-depreciable capital property owned by Alliance Atlantis
      Productions Ltd.) or (iii) on the amalgamation referred to in Step 134 in the
      Steps Memo (in respect of non-depreciable capital property owned by Alliance
      Atlantis Broadcasting Inc.).




(148)                      “Third-Party
      Claim” shall have the meaning set forth in Section 6.3(b).




(149)                      “Third-Party
      Proceeds” shall have the meaning set forth in Section 6.7(a).




(150)                      “Trademarks”
      shall mean all Canadian, U.S. and foreign trade-marks or service marks (whether
      or not registered), corporate names, trade names, domain names, logos, slogans,
      designs, trade dress and other similar designations of source or origin,
      together with the goodwill symbolized by any of the foregoing.




(151)                      “Transfer”
      shall have the meaning set forth in Section
      2.2(a)(i).




(152)                      “Transition
      Date” shall have the meaning set forth in Section 5.3(a).




(153)                      “Transition
      Services Agreement” means the transition services agreement dated as of the
      date of this Agreement between CW Media, certain members of the Movie Group
      and
      certain other parties.




(154)                      “Unallocated
      Expenses” means those fees, costs and expenses designated as Unallocated
      Expenses in accordance with Schedule 1.1(123).




(155)                      “2007
      Internal Control Audit and Management Assessments” shall have the meaning
      set forth in Section 4.3(a).




Section
      1.2.                                References;
      Interpretation.  References in this Agreement to any gender
      include references to all genders, and references to the singular include
      references to the plural and vice versa.  Unless the context otherwise
      requires, the words “include”, “includes” and “including” when used in this
      Agreement shall be deemed to be followed by the phrase “without
      limitation”.  Unless the context otherwise requires, references in
      this Agreement to Articles, Sections, Annexes, Exhibits




38


and
      Schedules shall be deemed references to Articles and Sections of, and Annexes,
      Exhibits and Schedules to this Agreement.  Unless the context
      otherwise requires, the words “hereof”, “hereby” and “herein” and words of
      similar meaning when used in this Agreement refer to this Agreement in its
      entirety and not to any particular Article, Section or provision of this
      Agreement.




Section
      1.3.                                Schedules
      and Exhibits.  The schedules and exhibits to this Agreement,
      listed below, are an integral part of this Agreement:




**Schedule**
            **Description**1
            Additional
                Parties1.1(11)
            Ancillary
                Agreements1.1(23)
            Continuing
                Arrangements1.1(29)
            Corporate
                Retention and Severance Liabilities1.1(49)(v)
            Entertainment
                Assets1.1(51)
            Entertainment
                Contracts1.1(52)
            Entertainment
                Employees1.1(53)
            Entertainment
                Entities1.1(54)(i)
            Entertainment
                Liabilities1.1(55)
            Executive
                Retention and Severance Liabilities1.1(78)(v)
            International
                Assets1.1(80)(v)
            International
                Contracts1.1(81)(i)
            International
                Liabilities1.1(82)
            International
                Employees1.1(83)
            International
                Entities1.1(89)(v)
            Movie
                Distribution Assets1.1(91)
            Movie
                Contracts1.1(92)(i)
            Movie
                Liabilities1.1(93)
            Movie
                Employees1.1(94)
            Movie
                Entities1.1(106)(v)
            Production
                Assets1.1(108)
            Production
                Contracts1.1(109)
            Production
                Employees1.1(110)
            Production
                Entities1.1(111)(i)
            Production
                Liabilities


39





1.1(113)(v)
            Propinquity
                Assets1.1(115)
            Propinquity
                Contracts1.1(116)
            Propinquity
                Employees1.1(117)
            Propinquity
                Entities1.1(118)(i)
            Propinquity
                Liabilities1.1(120)(i)
            Residual
                Liabilities1.1(123)
            Separation
                Expenses1.1(128)
            Shelter
                Entities1.1(132)
            Shelter
                Contracts and Liabilities1.1(134)(v)
            Specialty
                Television Assets1.1(136)
            Specialty
                Television Contracts1.1(137)(i)
            Specialty
                Television Liabilities1.1(140)
            Specialty
                Television Employees1.1(141)
            Specialty
                Television Entities2.5
            Terminated
                Inter-Corporate Contracts and Arrangements2.11
            Allocation
                of Tax Liabilities5.1(b)
            AA
                Plans5.1(c)
            Movie
                and Entertainment Plans





**Exhibit**
            **Description**A
            Steps
                Memo dated August 15, 2007





**ARTICLE
      II**









**THE
      SEPARATION**




Section
      2.1.                                General.  Subject
      to the terms and conditions of this Agreement, the Parties shall consummate,
      and
      shall cause their respective Affiliates to consummate, the transactions
      contemplated hereby and by the Ancillary Agreements.  It is the intent
      of the Parties that after consummation of the transactions contemplated hereby
      and by the Ancillary Agreements in the order contemplated by and otherwise
      in
      accordance with the Steps Memo, subject to Section
      2.6, members of each Group




40


will
      conduct such Group’s Corresponding Business, own or hold all of CW Media’s and
      its Subsidiaries’ right, title and interest in and to such Group’s Corresponding
      Assets and Assume directly or indirectly (or retain) such Group’s Corresponding
      Liabilities.




**Section
      2.2.**                                **Transfer
      of Assets**.




(a)           On
      or prior to the Effective Time and to the extent not already completed, the
      Parties shall (and shall cause their respective Affiliates to) take all actions
      necessary or advisable to (i) effect the transactions set forth in steps 135
      to
      161 of the Steps Memo and (ii) enter into the associated applicable Ancillary
      Agreements listed under the heading “Post-Restructuring Agreements” on the
      Closing Agenda and consummate the transactions contemplated thereby (but, for
      the avoidance of doubt, shall not oblige STV to exercise any of the put rights
      referred to in step 138 and steps 161.1 to 161.4 of the Steps
      Memo).  In particular, and without limiting the
      foregoing:




(i)           CW
      Media shall directly or indirectly transfer, contribute, assign and convey
      or
      cause to be transferred, contributed, assigned and conveyed (“Transfer”)
      to CW Media or a member of the STV Group that is a Subsidiary of CW Media all
      of
      CW Media’s and its Subsidiaries’ right, title and interest in and to the
      Specialty Television Assets to the extent not already held by a member of the
      STV Group (the “Specialty Television Transfer”).  The Specialty
      Television Transfer may be made in a single Transfer or a series of Transfers,
      provided that following such Transfer or series of Transfers, CW Media directly
      or indirectly owns all of the Specialty Television Assets.




(ii)           CW
      Media shall directly or indirectly Transfer to CanCo all of CW Media’s and its
      Subsidiaries’ right, title and interest in and to the Corresponding Assets of
      each Group other than the STV Group and the Shelter Group to the extent not
      already held by a member of a Group (other than the STV Group and the Shelter
      Group), in accordance with, and for the consideration provided for under
      (including assumption of certain Liabilities), the applicable Ancillary
      Agreements listed under the heading “Post-Restructuring Agreements —
Intermediate Transfers” on the Closing Agenda (the “Intermediate
      Transfers”).  The Intermediate Transfers may be made in a single
      Transfer or a series of Transfers that reaches the same result.




(iii)           Following
      the Intermediate Transfers, CanCo shall directly or indirectly Transfer to
      each
      Group, other than the STV Group and the Shelter Group, all of CanCo’s and its
      Subsidiaries’ right, title and interest in and to the Corresponding Assets of
      such Group to the extent not already held by a member of a Group (other than
      the
      STV Group and the Shelter Group), in accordance with, and for the consideration
      provided for under (including assumption of certain Liabilities), the applicable
      Ancillary Agreements listed under the heading “Post-Restructuring Agreements
—




41


Separation
      Transfers” on the Closing Agenda (together with the Intermediate Transfers, the
“Separation Transfers”).  The Separation Transfers may be made
      in a single Transfer or a series of Transfers that reaches the same
      result.




(iv)           CW
      Media shall, directly or indirectly, Transfer to ShelterCo all of CW Media’s and
      its Subsidiaries’ right, title and interest in and to the Sheltered Assets to
      the extent not already held by a member of the Shelter Group (the “Shelter
      Transfer”).  The Shelter Transfer may be made in a single Transfer
      or a series of Transfers, provided that following such Transfer or series of
      Transfers, ShelterCo directly or indirectly owns all of the Sheltered
      Assets.




(b)           Unless
      otherwise agreed to by the Parties or as otherwise set forth in an Ancillary
      Agreement, each Party shall be entitled to designate the Business Entity within
      such Party’s respective Group to which any Assets are to be Transferred pursuant
      to this Section 2.2 or Section
      2.6.




(c)           Treatment
      of Shared Contracts.  Without limiting the generality of the
      obligations set forth in Sections 2.2(a) and 2.2(b):




(i)           Unless
      the Parties otherwise agree or the benefits of any Contract described in
Section 2.2(c)(i) are expressly conveyed to the applicable Party (or its
      Group) pursuant to an Ancillary Agreement, (A) any Contract at least one of
      the
      parties to which is a third party (that is, other than the Predecessor or any
      of
      its Subsidiaries) that is a Corresponding Asset of a Group but inures in part
      to
      the benefit or burden of any member of any other Group, as the case may be,
      (each, a “Shared Contract”), shall be assigned in part to the applicable
      member(s) of the applicable Groups, if so assignable and to be assigned as
      provided in Section 2.2(a), or appropriately
      amended so that each of the Parties or the members of their respective Groups
      shall be entitled to the rights and benefits, and shall Assume the related
      portion of any Liabilities, inuring to their Corresponding Businesses;
provided, however, that (x) in no event shall any member of any
      Group be required to assign (or amend) any Shared Contract in its entirety
      or to
      assign a portion of any Shared Contract (including any Policy) which is not
      assignable (or cannot be amended) by its terms (including any terms imposing
      consents or conditions on an assignment where such consents or conditions have
      not been obtained or fulfilled), (y) if any Shared Contract cannot be so
      partially assigned by its terms or otherwise, or cannot be amended or if such
      assignment or amendment would impair the benefit the parties thereto derive
      from
      such Shared Contract, the Parties shall, and shall cause each of their
      respective Subsidiaries to, take such other reasonable and permissible actions
      to cause a member of each Group to receive the benefit of that portion of each
      Shared Contract that relates to the Corresponding Business of such




42


Group,
      as
      the case may be (in each case, to the extent so related) as if such Shared
      Contract had been assigned to (or amended to allow) a member of the applicable
      Group pursuant to this Section 2.2  and to bear the burden of
      the corresponding Liabilities (including any Liabilities that may arise by
      reason of such arrangement) as if such Liabilities had been Assumed by a member
      of the applicable Group pursuant to Section 2.3 and (z) no such
      assignment or amendment shall be undertaken if such assignment or amendment
      could adversely affect the Tax Step-Up.




(ii)           Each
      of the Parties shall, and shall cause the members of its Group to, (A) treat
      for
      purposes of all Taxes the portion of each Shared Contract inuring to its
      Corresponding Business as Assets owned by, and/or Liabilities of, as applicable,
      such Party or such members of its Group, as applicable, not later than the
      Effective Time and (B) neither report nor take any position with respect to
      Taxes (on a Tax Return or otherwise) inconsistent with such treatment (unless
      required by a change in applicable Tax Law or good faith resolution of a Tax
      Contest relating to Taxes).




Nothing
      in this Section 2.2(c) shall require any member of any Group to make any
      material payment (except to the extent advanced, Assumed or agreed in advance
      to
      be reimbursed by any member of the other Group), incur any material obligation
      or grant any material concession for the benefit of any member of any other
      Group in order to effect any assignment, amendment or other transaction
      contemplated by this Section 2.2(c).





Section
      2.3.                                Assumption
      and Satisfaction of Liabilities; Litigation.




(a)           Except
      as otherwise expressly set forth in any Ancillary Agreement, from and after
      the
      Effective Time, to the extent not already completed, each Party shall, or shall
      cause a member of its respective Group to, accept, assume (or, as applicable,
      retain) and perform, discharge and fulfill, in accordance with their respective
      terms (“Assume”) all of its Corresponding Liabilities, in each case,
      regardless of (A) when or where such Liabilities arose or arise, (B) whether
      the
      facts upon which they are based occurred prior to, on or subsequent to the
      Effective Time, (C) where or against whom such Liabilities are asserted or
      determined and (D) regardless of whether arising from or alleged to arise from
      negligence, recklessness, violation of Law, fraud or misrepresentation by any
      member of any Group, as the case may be, or any of their past or present
      respective directors, officers, employees, agents, Subsidiaries or
      Affiliates.




(b)           If
      any New Entity that is not assigned the responsibility for assuming and
      controlling the defense of an Action pursuant to the Schedules to this Agreement
      but has Liability or indemnification obligations arising out of such Action,
      (i)
      such New Entity shall have the right to employ separate counsel and to
      participate in the defense, compromise, or settlement thereof, at its own
      expense; (ii) in any event, such New Entity shall cooperate with the defending
      party in such defense and make available to the defending party all witnesses,
      pertinent Information, materials and information in such New Entity’s possession
      or under such New Entity’s control relating thereto as are reasonably required
      by the defending party; and (iii)




43


neither
      the defending party nor such New Entity may settle, compromise or consent to
      entry of any judgment with respect to such Action without the consent of the
      other, which consent shall not be unreasonably withheld, conditioned or
      delayed.




Section
      2.4.                                Intercompany
      Accounts and Arrangements.




(a)           Subject
      to the terms of the Ancillary Agreements, all intercompany receivables,
      payables, loans and accounts, if any, between any member of one Group, on the
      one hand, and any member of another Group, on the other hand:




(i)           which
      exist and are reflected in the accounting records of the relevant Parties as
      of
      the Effective Time and which were generated in the ordinary course of business
      consistent with past practice after June 30, 2007, shall remain outstanding
      and
      be settled in the ordinary course in accordance with the terms applicable
      thereto; and




(ii)           which
      exist at the Effective Time, other than those described in clause (i) of this
Section 2.4(a), and that are not settled as part of
      the transactions described or referred to in the Steps Memo, if any, shall
      be
      forgiven.




(b)           As
      between any two Parties (and the members of their respective Groups) all
      payments and reimbursements received after the Effective Time by any Party
      (or
      member of its Group) that relate to a Corresponding Business, a Corresponding
      Asset  or a Corresponding Liability of another Party (or member of its
      Group) shall be held by such Party in trust for the use and benefit of the
      Party
      (or member of its Group) entitled thereto (at the expense of the Party or member
      of its Group entitled thereto) and, promptly upon receipt by such Party (or
      member of its Group) of any such payment or reimbursement, such Party shall
      pay
      (or cause the applicable member of its Group to pay) over to the applicable
      Party (or member of its Group) the amount of such payment or
      reimbursement.




Section
      2.5.                                Limitation
      of Liability.




(a)           No
      Party (or member of its Group) shall have any Liability to any other Party
      (or
      member of its Group) arising from or relating to any inaccuracy in any
      information exchanged or provided pursuant to this Agreement which is an
      estimate or forecast, or which is based upon an estimate or
      forecast.




(b)           Subject
      to Section 2.5(c), no Party (or member of
      its Group) shall be liable to any other Party (or member of its Group) based
      upon, arising out of or resulting from any Contract, arrangement, course of
      dealing or understanding existing on or prior to the Effective Time between
      a
      Party (or a member of its Group) and any other Party or Parties (or members
      of
      their Group or Groups) and each Party (or member of its Group) hereby terminates
      any and all Contracts, arrangements, course of dealings or understandings
      between or among it and any other Party (or member of its Group) effective
      as of
      the Effective Time, including the Contracts




44


set
      forth
      on Schedule 2.5, and any Liability thereunder, whether or not in writing,
      is hereby irrevocably cancelled, released and waived.  No such
      terminated Contract, arrangement, course of dealing or understanding (including
      any provision thereof which purports to survive termination) shall be of any
      further force or effect after the Effective Time.




(c)           The
      provisions of Section 2.5(b) shall not apply
      to any of the following Contracts, arrangements, course of dealings or
      understandings (or to any of the provisions thereof):




(i)           this
      Agreement (including intercompany receivables, payables loans and accounts,
      which shall be dealt with in accordance with Section
      2.4), any Ancillary Agreement, any Continuing Arrangements or any
      Contract entered into in connection herewith or in order to consummate the
      transactions contemplated hereby or thereby or by the Plan of
      Separation;




(ii)           any
      agreements, arrangements, commitments or understandings to which any Person
      other than the Parties and their respective Affiliates is a party (it being
      understood that to the extent that the rights and obligations of the Parties
      and
      the members of their respective Groups under any such Contracts constitute
      Corresponding Assets or Corresponding Liabilities of any Group, such Contracts
      shall be assigned or retained pursuant to Article
      II); and




(iii)           any
      agreements, arrangements, commitments or understandings to which any
      non-wholly-owned Subsidiary of AcquireCo or any New Entity is a
      party.




Section
      2.6.                                Transfers
      Not Effected On or Prior to the Effective Time; Transfers Deemed Effective
      as of
      the Effective Time.




(a)           To
      the extent that any Transfers contemplated by this Article II shall not have been consummated on
      or prior to the Effective Time, the Parties shall cooperate to effect such
      Transfers as promptly following the Effective Time as shall be practicable,
      provided that no such Transfer shall be made if such Transfer could adversely
      affect the Tax Step-Up.  Nothing herein shall be deemed to require the
      Transfer of any Assets or the Assumption of any Liabilities which by their
      terms
      or operation of Law cannot be Transferred; provided, however, that
      the Parties and their respective Subsidiaries shall cooperate and use
      commercially reasonable efforts to seek to obtain any necessary Consents or
      Governmental Approvals and to satisfy any necessary conditions for the Transfer
      of all Assets and Assumption of all Liabilities contemplated to be Transferred
      and Assumed pursuant to this Article
      II.  In the event that any such Transfer of Assets or
      Assumption of Liabilities has not been consummated, from and after the Effective
      Time (i) the Party retaining or a member of whose Group has retained such Asset
      shall thereafter hold or cause to be held such Asset for the use and benefit
      of
      the Party or the




45


member
      of
      its Group entitled thereto (at the expense of the Person entitled thereto)
      and
      (ii) the Party intended or the member of whose Group is intended to Assume
      such
      Liability shall, or shall cause the applicable member of its Group to, pay
      or
      reimburse the Party or the member of its Group retaining such Liability for
      all
      amounts paid or incurred in connection with the retention of such
      Liability.  In addition, the Party or the member of its Group
      retaining such Asset or Liability shall, insofar as reasonably possible and
      to
      the extent permitted by applicable Law, treat or cause to be treated such Asset
      or Liability in the ordinary course of business in accordance with past practice
      and take such other actions as may be reasonably requested by the Party or
      the
      member of its Group to which such Asset is to be Transferred or by the Party
      or
      the member of its Group Assuming such Liability (at the expense of the
      requesting Party) in order to place such Party or the member of its Group,
      insofar as reasonably possible, in the same position as if such Asset or
      Liability had been Transferred or Assumed as contemplated hereby and so that
      all
      the benefits and burdens relating to such Asset or Liability, including
      possession, use, risk of loss, potential for gain, and dominion, control and
      command over such Asset or Liability, are to inure from and after the Effective
      Time to the member or members of the Group entitled to the receipt of such
      Asset
      or required to Assume such Liability.  In furtherance of the
      foregoing, the Parties agree that, as of the Effective Time, each Party and
      its
      Group shall be deemed to have acquired complete and sole beneficial ownership
      over all of the Assets, together with all rights, powers and privileges incident
      thereto, and shall be deemed to have Assumed in accordance with the terms of
      this Agreement all of the Liabilities, and all duties, obligations and
      responsibilities incident thereto, which such Party and its Group is entitled
      to
      acquire or required to Assume pursuant to the terms of this
      Agreement.




(b)           If
      and when the Consents, Governmental Approvals and/or conditions, the absence
      or
      non-satisfaction of which caused the deferral of Transfer of any Asset or
      deferral of the Assumption of any Liability pursuant to Section 2.6(a), are obtained or satisfied, the
      Transfer, assignment, Assumption or novation of the applicable Asset or
      Liability shall be effected in accordance with and subject to the terms of
      this
      Agreement and/or the applicable Ancillary Agreement, provided that no such
      Transfer shall be made if such Transfer could adversely affect the Tax
      Step-Up.




(c)           If
      any Party or any member of its Group owns any Asset that was owned by (or was
      obtained by such Party or any member of its Group pursuant to a right owned
      by)
      CW Media or its Subsidiaries immediately prior to the Effective Time, that,
      although not Transferred pursuant to this Agreement, is agreed by the owner
      of
      such Asset and another Party or a member of its Group in their reasonable,
      good
      faith judgment to be an Asset that more properly belongs to the other Party’s
      Group, or an Asset that is necessary for the operation of the Corresponding
      Business of such Group, as each was operated prior to the Effective Time, then
      the owner of such Asset shall, as applicable, (i) Transfer any such Asset to
      the
      Party or a member of its Group identified as the appropriate transferee and
      following such Transfer, such Asset shall be a Corresponding Asset of the
      transferee’s Group, or (ii) grant such mutually agreeable rights with respect to
      such Asset to permit such continued use, subject to, and consistent with this
      Agreement, including with respect to Assumption of associated Liabilities,
      provided that no action referred to in clause (i) or (ii) of this Section 2.6(c) shall be taken if such action
      could adversely affect the Tax Step-Up.




46


(d)           After
      the Effective Time, each Party and its Group may receive mail, packages and
      other communications properly belonging to another Party or its
      Group.  Accordingly, at all times after the Effective Time, each Party
      authorizes the other applicable Party and its Group to receive and open all
      mail, packages and other communications received by such other Party or its
      Group and not unambiguously intended for such Party, any member of such Party’s
      Group or any of their officers or directors, and to the extent that they do
      not
      relate to the business of the receiving Party or its Group, the receiving Party
      shall promptly deliver such mail, packages or other communications (or, in
      case
      the same relate to both businesses, copies thereof) to the other Party as
      provided for in Section 10.5.  The
      provisions of this Section 2.6(d) are not
      intended to, and shall not, be deemed to constitute an authorization by any
      Party or its Group to permit the other to accept service of process on its
      behalf and no Party is or shall be deemed to be the agent of any other Party
      for
      service of process purposes.




(e)           Each
      Party shall, and shall cause the members of its respective Group to, (i) treat
      for all Income Tax purposes (A) the deferred Assets as assets having been
      Transferred to and owned by the Party or members of its Group entitled to such
      Assets not later than the Effective Time and (B) the deferred Liabilities as
      liabilities having been Assumed and owed by the Person intended to be subject
      to
      such Liabilities not later than the Effective Time and (ii) neither report
      nor
      take any Tax position (on a Tax Return or otherwise) inconsistent with such
      treatment (unless required by a change in applicable Tax Law or good faith
      resolution of a Tax Contest relating to Taxes).




Section
      2.7.                                Conveyancing
      and Assumption Instruments.  In connection with, and in
      furtherance of, the Transfers of Assets and the acceptance and Assumptions
      of
      Liabilities contemplated by this Agreement, to the extent any such Transfer
      or
      Assumption is not reflected in or provided for under an Ancillary Agreement
      listed on Schedule 1.9, the Parties shall execute or cause to be
      executed, by the appropriate entities, Conveyancing and Assumption Instruments
      as and when necessary to evidence the valid and effective Assumption by the
      applicable Party or the applicable member of its Group of its Assumed
      Liabilities and the valid Transfer to the applicable Party or member of such
      Party’s Group of all right, title and interest in and to its accepted Assets, in
      substantially the form contemplated hereby for Transfers and Assumptions to
      be
      effected pursuant to Ontario Laws or the Laws of such other jurisdiction as
      are
      appropriate for a given Transfer, in such other form as the Parties shall
      reasonably agree, including the Transfer of real property with deeds as may
      be
      appropriate, provided that no such action shall be taken if such action could
      adversely affect the Tax Step-Up.  The Transfer of capital stock shall
      be effected by means of executed stock powers and notation on the stock record
      books of the corporation or other legal entities involved, or by such other
      means as may be required in the relevant jurisdiction to Transfer title to
      stock
      and, only to the extent required by applicable Law, by notation on public
      registries.




Section
      2.8.                                Further
      Assurances.




(a)           In
      addition to and without limiting the actions specifically provided for elsewhere
      in this Agreement, including Section 2.6,
      each of the Parties shall cooperate with each




47


other
      and
      use (and will cause their respective Subsidiaries and other Group members to
      use) commercially reasonable efforts, on and after the Effective Time, to take,
      or to cause to be taken, all actions, and to do, or to cause to be done, all
      things reasonably necessary on its part under applicable Law or contractual
      obligations to consummate and make effective the transactions contemplated
      by
      this Agreement and the Ancillary Agreements, provided that no such action shall
      be taken or thing done if such action or thing could adversely affect the Tax
      Step-Up.




(b)           Without
      limiting the foregoing, and subject to Section
      2.6, on and after the Effective Time, each Party shall cooperate with
      the other Parties, and without any further consideration, but at the expense
      of
      the requesting Party from and after the Effective Time, to execute and deliver,
      or use commercially reasonable efforts to cause to be executed and delivered,
      all Contracts, indentures and other instruments, including instruments of
      Transfer, and to make all filings with Governmental Entities, and to obtain
      all
      Consents and/or Governmental Approvals, and any required permits or licenses,
      and to take all such other actions as such Party may reasonably be requested
      to
      take by any other Party or member of its Group from time to time, consistent
      with the terms of this Agreement and the Ancillary Agreements, in order to
      effectuate the provisions and purposes of this Agreement and the Ancillary
      Agreements and the Transfers of the applicable Assets and the assignment and
      Assumption of the applicable Liabilities and the other transactions contemplated
      hereby and thereby.  Without limiting the foregoing, each Party will,
      at the reasonable request, cost and expense of any other Party, take such other
      actions as may be reasonably necessary to vest in such other Party or member
      of
      its Group good and marketable title to the Assets allocated to such Party under
      this Agreement or any of the Ancillary Agreements, free and clear of any
      Security Interest, if and to the extent it is practicable to do
      so.  Notwithstanding the provisions of this Section 2.8(b), no action shall be taken or
      thing done if such action or thing could adversely affect the Tax
      Step-Up.




Section
      2.9.                                Novation
      of Liabilities.




(a)           Each
      Party, at the request of another Party, shall use its commercially reasonable
      efforts to obtain, or to cause to be obtained, any Consent, substitution or
      amendment required to novate or assign all obligations under Contracts, licenses
      and other obligations or Liabilities for which a member of such Party’s Group
      and a member of another Party’s Group are jointly or severally liable and that
      do not constitute Liabilities of such requesting Party as provided in this
      Agreement (such requesting Party, the “Non-Liable Party”), or to obtain
      in writing the unconditional release of all parties to such arrangements (other
      than any member of the Group who Assumed or retained such Liability as set
      forth
      in this Agreement), so that, in any such case, the members of the applicable
      Group will be solely responsible for such Liabilities; provided,
however, that no Party shall be obligated to pay any consideration
      therefor to any third party from whom any such Consent, substitution or
      amendment is requested (unless such Party is fully reimbursed by the Non-Liable
      Party).




(b)           If
      the Parties are unable to obtain, or to cause to be obtained, any such required
      Consent, release, substitution or amendment, the Non-Liable Party or a member
      of
      such Non-Liable Party’s Group shall continue to be bound by such Contract,
      license or other obligation that does not constitute a Liability of such
      Non-Liable Party and, unless not permitted




48


by
      Law or
      the terms thereof, as agent or subcontractor for such Party, the Party who,
      or
      whose Group member, was intended to Assume or retain such Liability as set
      forth
      in this Agreement (the “Liable Party”) shall, or shall cause a member of
      its Group to, directly pay, perform and discharge fully all the obligations
      or
      other Liabilities of such Non-Liable Party or member of such Non-Liable Party’s
      Group thereunder from and after the Effective Time.  The Liable Party
      shall indemnify (in accordance with the provisions of Article VI) each Non-Liable Party and each
      member of such Non-Liable Party’s Group and hold each of them harmless against
      any Liabilities (other than Liabilities of such Non-Liable Party or such
      Non-Liable Party’s Group) arising in connection therewith; provided, that
      the Liable Party shall have no obligation to indemnify any Non-Liable Party
      or
      any member of such Non-Liable Party’s Group with respect to any matter to the
      extent caused by any knowing violation of Law, fraud or misrepresentation in
      connection therewith in which such Non-Liable Party or any member of such
      Non-Liable Party’s Group has engaged.  The Non-Liable Party shall,
      without further consideration, promptly pay and remit, or cause to be promptly
      paid or remitted, to the Liable Party or to another member of the Liable Party’s
      Group, all money, rights and other consideration received by it or any member
      of
      its Group in respect of such performance by the Liable Party or any member
      of
      such Liable Party’s Group (unless any such consideration is an Asset of such
      Non-Liable Party pursuant to this Agreement).  If and when any such
      Consent, release, substitution or amendment shall be obtained or such agreement,
      lease, license or other rights or obligations shall otherwise become assignable
      or able to be novated, the Non-Liable Party shall promptly Transfer or cause
      to
      be Transferred all rights, obligations and other Liabilities thereunder of
      any
      member of such Non-Liable Party’s Group to the Liable Party or to another member
      of the Liable Party’s Group without payment of any further consideration and the
      Liable Party, or another member of such Liable Party’s Group, without the
      payment of any further consideration, shall Assume such rights and Liabilities,
      provided that no such Transfer shall be made if such Transfer could adversely
      affect the Tax Step-Up.




Section
      2.10.                                Guarantees;
      Letters of Credit.




(a)           As
      soon as reasonably practicable after the Effective Time, each Party shall (with
      the reasonable cooperation of the other applicable Parties) use its commercially
      reasonable efforts (which shall include offering to provide equivalent
      guarantees, indemnities or letters of credit) to have any member of any Group
      other than such Party’s Group removed as guarantor or indemnitor of or obligor
      for (or provide for a replacement letter of credit with respect to existing
      letters of credit) any Corresponding Liability of such Party’s Group, including
      in respect of those guarantees, indemnities and letters of credit set forth
      on
Schedule 2.10(a)(i), to the extent that they relate primarily to
      Corresponding Liabilities of such Party’s Group.




(b)           To
      the extent required to obtain a release from a guaranty or indemnity (a
“Guaranty Release”) of any Party or a member of such Party’s Group, the
      other Parties (and the members of their respective Groups) in respect of which
      such guaranty or indemnity is or relates primarily to a Corresponding Liability
      shall execute a guaranty or indemnity agreement in the form of the existing
      guaranty or indemnity, except to the extent that such existing guaranty or
      indemnity contains representations, covenants or other terms or provisions
      either (A) with which such other Parties, as the case may be, would be
      reasonably unable to comply or (B) which would be reasonably expected to be
      breached.




49


(c)           If
      any Party is unable to obtain, or to cause to be obtained, any such required
      removal or replacement as set forth in clauses (a) and (b) of this Section 2.10, (i) the Party which is (or whose
      Group member is) the relevant beneficiary shall indemnify and hold harmless
      the
      guarantor or obligor for any Indemnifiable Loss arising from or relating thereto
      (in accordance with the provisions of Article
      VI) and shall or shall cause one of its Subsidiaries, as agent or
      subcontractor for such guarantor or obligor to pay, perform and discharge fully
      all the obligations or other Liabilities of such guarantor or obligor thereunder
      and (ii) each Party agrees not to renew or extend the term of, increase its
      obligations under, or Transfer to a third party, any loan, guarantee, lease,
      contract or other obligation for which another Party or a member of such other
      Party’s Group is or may be liable unless all obligations of such other Party and
      the other members of such other Party’s Group with respect thereto are thereupon
      terminated by documentation reasonably satisfactory in form and substance to
      such other Party; provided, however, with respect to leases, in
      the event a Guaranty Release is not obtained and such Party wishes to extend
      the
      term of such guaranteed lease, then such Party shall have the option of
      extending the term if it provides such security as is reasonably satisfactory
      to
      the guarantor under such guaranteed lease.




Section
      2.11.                                Tax
      Liabilities .




(a)           The
      Parties agree to allocate Liabilities related to Taxes in the manner set forth
      in Schedule 2.11.  If there is any inconsistency between the
      provisions of Schedule 2.11 and the provisions of the rest of this
      Agreement or any Ancillary Agreement with respect to matters related to Taxes,
      Schedule 2.11 shall control.




(b)           With
      respect to any Tax Return filed by any member of a Group (the “­Filing
      Group" after the Closing Date that reflects or reports transactions or
      events that give rise to Liabilities for Taxes that the Filing Group intends
      to
      claim are Liabilities for Taxes for which another Group (the “Responsible
      Group”) is responsible hereunder, the position taken in such Tax Return with
      respect to such Liability will be determined in consultation with the
      Responsible Group and the Tax Return shall be presented to such Group for review
      and comment at least 30 days in advance of the date on which it intends to
      file
      the Tax Return or such lesser number of days as is practical in the
      circumstances.  If the Responsible Group objects to the position
      proposed to be taken by the Filing Group, then such parties will negotiate
      in
      good faith to determine the position to be taken; provided, however that if
      the
      Responsible Group provides an opinion of Tax counsel (nationally recognized
      in
      the relevant jurisdiction) to the effect that there is a reasonable basis for
      such position in law or administrative practice, then such position shall be
      taken in the Tax Return provided that such filing position is not prejudicial
      to
      other tax filing positions taken by the Filing Group.  If the Filing
      Group agrees to amend its proposed filing position, the Responsible Group shall
      acknowledge it is responsible for Liabilities for Taxes arising from such
      amended position. Except as provided herein, all other Tax Returns shall be
      prepared solely by the party liable for the filing of such Tax Return by
      applicable law.  Failure to comply with the provisions of this Section
      2.11(b) shall not relieve the Responsible Group for Liability for Taxes for
      which it is responsible.




50


(c)           Anything
      in this Agreement to the contrary notwithstanding, where any refund of Taxes
      would be a Corresponding Asset of a Group (the “Claiming Group”), such
      Group shall have the right to initiate any claim for a refund of such
      Taxes.  The Group that would otherwise receive the refund (the
“Other Group”) shall reasonably co-operate in all respects in such
      application including filing amended Tax Returns, provided that such application
      does not prejudice the tax position of the Other Group.  The Claiming
      Group shall reimburse the Other Group for any reasonable costs or expenses
      incurred by the Other Group in providing such co-operation.




(d)           Canco
      and its subsidiaries will make US tax elections, including under Section 338
      and
      7701 of the Internal Revenue Code of 1986, as amended, with respect to the
      acquisition of the Predecessor as directed by Entertainment provided that such
      elections do not have an adverse effect on CW Investments Co. or its
      subsidiaries.




Section
      2.12.                                Disclaimer
      of Representations and Warranties.  EACH OF THE PARTIES (ON BEHALF
      OF ITSELF AND EACH MEMBER OF ITS GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT
      AS
      EXPRESSLY SET FORTH HEREIN, IN ANY ANCILLARY AGREEMENT OR IN ANY CONTINUING
      ARRANGEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER
      AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, ANY ANCILLARY AGREEMENTS
      OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS,
      BUSINESSES, INFORMATION OR LIABILITIES CONTRIBUTED, TRANSFERRED OR ASSUMED
      AS
      CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR GOVERNMENTAL APPROVALS
      REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM
      ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH
      PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM
      COUNTERCLAIM WITH RESPECT TO ANY ACTION OR OTHER ASSET, INCLUDING ACCOUNTS
      RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY CONTRIBUTION,
      ASSIGNMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY
      TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING
      HEREOF OR THEREOF.  EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN
      ANY ANCILLARY AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS,”
“WHERE IS” BASIS (AND, IN THE CASE OF ANY REAL PROPERTY, BY MEANS OF A QUITCLAIM
      OR SIMILAR FORM DEED OR CONVEYANCE) AND THE RESPECTIVE TRANSFEREES SHALL BEAR
      THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE SHALL PROVE TO BE
      INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD TITLE, FREE AND CLEAR OF ANY
      SECURITY INTEREST AND (II) ANY NECESSARY CONSENTS OR GOVERNMENTAL APPROVALS
      ARE
      NOT OBTAINED OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED
      WITH.




51


Section
      2.13.                                Effectiveness
      of Transfers.  The Specialty Television Transfer, the Intermediate
      Transfers, the Separation Transfers and the Shelter Transfer shall be deemed
      to
      occur in the order specified in the Steps Memo.




**ARTICLE
      III**









**CERTAIN
      ACTIONS AT OR PRIOR TO THE TRANSFERS**




Section
      3.1.                                Resignations.  After
      the effective time of the Plan of Arrangement, the Parties shall take all
      necessary steps to cause all of the employees of CW Media and any employees
      of
      its Affiliates to resign, effective as of the Closing Date, from all positions
      as officers or directors of any member of each Group in which they serve
      (excluding any Corresponding Employees of such Group) and such employees will
      be
      replaced as of the Closing Date with officers and directors designated by the
      members of such Group.




Section
      3.2.                                Ancillary
      Agreements.  On or prior to the Effective Time, each of the
      Parties shall enter into, and/or (where applicable) shall cause a member or
      members of their respective Group to enter into, the Ancillary Agreements to
      which each is a party and any other Contracts reasonably necessary or
      appropriate in connection with the transactions contemplated hereby and thereby.




**ARTICLE
      IV**









**CERTAIN
      COVENANTS**




Section
      4.1.                                No
      Solicit.  For and during the twenty-four (24) month period
      following the Effective Time, none of the New Entities nor any member of their
      respective Groups (or any director, officer, employee, agent or other
      representative of any such person acting on behalf of such person) will, without
      the prior written consent of the other applicable Party, either directly or
      indirectly, on their own behalf or in the service or on behalf of others,
      solicit, aid, induce or encourage any Restricted Person (as defined below)
      of
      any other Party’s respective Group to leave his or her employment;
provided, however, that nothing in this Section 4.1 shall be deemed to prohibit
      any
      general solicitation for employment through advertisements and search firms
      not
      specifically directed at employees of such other applicable Party;
provided, that the applicable Party shall not encourage or advise such
      firm to approach any such employee.  “Restricted Person” means
      any person employed by any Party or any of its Subsidiaries (or any other member
      of its Group) as of the Effective Time.




52


Section
      4.2.                                Corporate
      Names and Other Parties’ Trademarks.  Except as otherwise
      specifically provided for in Section 4.2(b)
      or Section 4.2(c) or as otherwise permitted
      under any Ancillary Agreement:




(a)           Subject
      to Section 4.2(b), as soon as a Party ceases
      to be an Affiliate of any other Party, such Party and the members of its Group
      shall cease to (i) make any use of any Trademarks that consist of or include
      (A)
      the Trademarks of such other Party or its Group or (B)




any
      Trademarks related primarily thereto including any Trademarks confusingly
      similar thereto or dilutive thereof (with respect to each Party, such Trademarks
      of the other Party and members of the other Party’s Group, the “Other Party
      Marks”), and (ii) hold themselves out as having any affiliation with any
      such other Party or members of its Group (except as permitted pursuant to the
      terms of any Continuing Arrangement).




(b)           As
      soon as reasonably practicable after a Party ceases to be an Affiliate of any
      other Party, but in any event within six (6) months thereafter, such Party
      and
      the members of its Group shall cease to make any use of any corporate names
      or
      trade names that consist of or include the Other Party Marks.  Any use
      by any of the Parties or any of their Subsidiaries or Affiliates of any of
      the
      Other Party Marks as permitted in this Section 4.2
      is subject to their compliance with the quality control requirements and
      guidelines in effect for the Other Party Marks as of the Effective
      Time.




(c)           Notwithstanding
      the foregoing requirements of Section
      4.2(b), if any Party or any member of a Party’s Group exercised good
      faith efforts to comply with Section 4.2(b)
      but is unable, due to regulatory or other circumstance beyond its control,
      to
      effect a corporate name change or to cancel a trade name in compliance with
      applicable Law such that an Other Party Mark remains in such Party’s or its
      Group member’s corporate name or trade name, then the relevant Party or its
      Group member will not be deemed to be in breach hereof if it continues to
      exercise good faith efforts to effectuate such name change or name cancellation
      and does effectuate such name change or name cancellation within nine (9) months
      after ceasing to be an Affiliate of the owner of such Other Party Mark, and,
      in
      such circumstances, such Party or Group member may continue to include in its
      assets and other materials references to the Other Party Mark that is in such
      Party’s or Group member’s corporate name or trade name which includes references
      to “Alliance Atlantis” as applicable, but only to the extent necessary to
      identify such Party or Group member and only until such Party’s or Group
      member’s corporate name or trade name can be changed to remove and eliminate
      such references or cancelled as the case may be.




Section
      4.3.                                Auditors
      and Audits; Annual and Quarterly Financial Statements and
      Accounting.  Each Party agrees that for one year following the
      Effective Time (and with the consent of the other applicable Party, which
      consent shall not be unreasonably withheld, conditioned or delayed, during
      any
      period of time after such one year period reasonably requested by such
      requesting Party so long as there is a reasonable business purpose for such
      request) and in any event solely with respect to the preparation and audit
      of
      each of the Party’s financial statements for the year ended December 31, 2007,
      the printing,




53


filing
      and public dissemination of such financial statements, the audit of each Party’s
      internal control over financial reporting and management’s assessment thereof
      and management’s assessment of each Party’s disclosure controls and procedures,
      if required, in each case made as of December 31, 2007; provided, that in
      the event that any Party changes its auditors within two (2) years of the
      Effective Time, then such Party may request reasonable access on the terms
      set
      forth in this Section 4.4 for a period of up
      to ninety (90) days from such change; provided, further, that,
      notwithstanding the foregoing, access of the type described in this Section 4.4 shall be afforded by and to each of
      the Parties hereto (from time to time following the Effective Time), as
      applicable, to the extent reasonably necessary to respond (and for the limited
      purpose of responding) to any written request or official comment from a
      Governmental Entity:




(a)           Annual
      Financial Statements.  Each Party shall provide or provide access
      to the other Party on a timely basis all information reasonably required to
      meet
      its schedule for the preparation, printing, filing, and public dissemination
      of
      its annual financial statements and for the assessment of the disclosure
      controls and procedures, internal control over financial reporting and auditing
      standards as such other Party reasonably requires to comply with applicable
      Canadian and United States securities disclosure laws (the “2007 Internal
      Control Audit and Management Assessments”).  Without limiting the
      generality of the foregoing, each Party will provide all required financial
      and
      other Information with respect to itself and its Subsidiaries to its auditors
      in
      a sufficient and reasonable time and in sufficient detail to permit its auditors
      to take all steps and perform all reviews necessary to provide sufficient
      assistance to each other Party’s auditors with respect to information to be
      included or contained in such other Party’s annual financial statements and to
      permit such other Party’s auditors and management to complete the 2007 Internal
      Control Audit and Management Assessments, if required.




(b)           Access
      to Personnel and Records.  Each Party shall authorize its
      respective auditors to make reasonably available to each other Party’s auditors
      both the personnel who performed or are performing the annual audits of such
      audited Party and work papers related to the annual audits of such audited
      Party, in all cases within a reasonable time prior to such audited Party’s
      auditors’ opinion date, so that the other Parties’ auditors are able to perform
      the procedures that they reasonably consider necessary to take responsibility
      for the work of such audited Party’s auditors as it relates to their auditors’
report on such other Party’s financial statements, all within sufficient time to
      enable such other Party to meet its timetable for the printing, filing and
      public dissemination of its annual financial statements.  Each such
      audited Party shall make reasonably available to such other Parties’ auditors
      and management its personnel and Records in a reasonable time prior to such
      other Parties’ auditors’ opinion date and other Parties’ management’s assessment
      date so that such other Parties’ auditors and other Parties’ management are able
      to perform the procedures they reasonably require to conduct the 2007 Internal
      Control Audit and Management Assessments.




Section
      4.4.                                Administration
      of Separation Expenses.  Each New Entity shall be jointly
      responsible for administering and managing matters relating to the payment
      of
      the Separation Expenses to the extent that such New Entity or any member of
      its
      Group is responsible under this Agreement for the payment or satisfaction of
      such Separation Expenses, and any decisions with respect to such administration
      or management shall require the consent of each such New Entity to the extent
      that they affect such New Entity or any member of its Group.




54


Section
      4.5.                                Cooperation.  From
      the Effective Time until 180 days thereafter, the Parties shall, and shall
      cause
      each of their respective Affiliates and employees to (i) provide reasonable
      cooperation and assistance to each other Party in connection with the completion
      of the Plan of Separation, (ii) provide knowledge transfer regarding its
      applicable Business or the historical business of the Predecessor and its
      Subsidiaries and (iii) assist each Party in the orderly and efficient transition
      in becoming an independent company, in each case at no additional cost to the
      Party requesting such assistance other than for the actual out-of-pocket costs
      (which shall not include the costs of salaries and benefits of employees of
      the
      cooperating and assisting Party or any pro rata portion of overhead or other
      costs of employing such employees which would have been incurred by such
      employees’ employer regardless of the employees’ service with respect to the
      foregoing) incurred by any cooperating and assisting Party, if
      applicable.  The cooperation and assistance provided for in this Section 4.5 shall not be required to the extent
      that such cooperation and assistance would result in an undue burden on the
      cooperating and assisting Party or would unreasonably interfere with any of
      its
      employees’ normal functions and duties.  In furtherance of, and
      without limiting, the foregoing, each Party shall make reasonably available
      those employees with particular knowledge of any function or service of which
      another Party was not allocated the employees involved in such function or
      service in connection with the Plan of Separation (including, employee benefits
      functions, risk management, etc.).




Section
      4.6.                                Tax
      Step-Up.  After the Effective Time, each Party covenants and
      agrees that it and each of its Affiliates shall not take any action or enter
      into any transaction if the taking of such action or the entering into of such
      transaction would preclude the application of the Tax Step-Up to any
      non-depreciable capital property of the Predecessor, Alliance Atlantis
      Broadcasting Inc. or Alliance Atlantis Productions Ltd.




**ARTICLE
      V**









**EMPLOYEE
      MATTERS**




Section
      5.1.                                General.




(a)           Employment
      Liabilities.  Without limiting the generality of any other
      provisions of this Agreement, as of the Effective Time, except as expressly
      provided in this Agreement and the Transition Services Agreement, each New
      Entity shall Assume or retain and hereby agrees to pay, perform, fulfill and
      discharge, in due course in full all Liabilities with respect to the employment
      or termination of employment of all of its Corresponding Employees and their
      respective dependents and beneficiaries.




(b)           AA
      Plans.  Except as otherwise provided in this Article V, Movie, International, Entertainment,
      Production, Propinquity and ShelterCo shall not Assume any obligations under
      or
      Liabilities with respect to, and they shall not receive any right or interest
      in
      the Assets of, any of the Plans which are sponsored or maintained by CW Media
      and STV or




55


their
      Affiliates (excluding Movie, Entertainment, International, Production,
      Propinquity and ShelterCo and their respective Subsidiaries), including the
      Plans set forth on Schedule 5.1(b) (“AA Plans”) other than the
      Movie and Entertainment Plans.  Each of CW Media and STV shall assume
      or retain, or cause their respective Subsidiaries to assume or retain, as the
      case may be, sponsorship of, and all obligations with respect to, each AA
      Plan.  Notwithstanding the foregoing provisions of this Section 5.1(b), (i) if there are any
      Liabilities relating to Entertainment Employees (or their eligible spouses,
      beneficiaries and dependants) in respect of their participation in or
      entitlement under an AA Plan which are in addition to or in excess of the Assets
      held by CW Media or STV in respect of such Persons under an AA Plan,
      Entertainment shall Assume all such Liabilities; (ii) if there are any
      Liabilities relating to International Employees (or their eligible spouses,
      beneficiaries and dependants) in respect of their participation in or
      entitlement under an AA Plan which are in addition to or in excess of the Assets
      held by CW Media or STV in respect of such Persons under an AA Plan,
      International shall Assume all such Liabilities; (iii) if there are any
      Liabilities relating to Movie Employees (or their eligible spouses,
      beneficiaries and dependants) in respect of their participation in or
      entitlement under an AA Plan which are in addition to or in excess of the Assets
      held by CW Media or STV in respect of such Persons under an AA Plan, Movie
      shall
      Assume all such Liabilities; (iv) if there are any Liabilities relating to
      Production Employees (or their eligible spouses, beneficiaries and dependants)
      in respect of their participation in or entitlement under an AA Plan which
      are
      in addition to or in excess of the Assets held by CW Media or STV in respect
      of
      such Persons under an AA Plan, Production shall Assume all such Liabilities;
      and
      (v) if there are any Liabilities relating to Propinquity Employees (or their
      eligible spouses, beneficiaries and dependants) in respect of their
      participation in or entitlement under an AA Plan which are in addition to or
      in
      excess of the Assets held by CW Media or STV in respect of such Persons under
      an
      AA Plan, Propinquity shall Assume all such Liabilities.




(c)           Movie
      and Entertainment Plans.  CW Media and the STV Group shall not
      Assume or retain any obligations under or Liabilities with respect to, and
      they
      shall not receive any right or interest in the Assets of, any of the Plans
      which
      are sponsored or maintained primarily for Movie Employees, Production Employees,
      Propinquity Employees, International Employees or Entertainment Employees
      (“Movie and Entertainment Plans”, including the Plans set forth on
Schedule 5.1(c)).  Each of Movie, Entertainment, Production,
      Propinquity and International shall Assume or retain, or cause their respective
      Subsidiaries to Assume or retain, as the case may be, sponsorship of, and all
      obligations with respect to, each Movie and Entertainment
      Plan.  Notwithstanding the foregoing provisions of this Section 5.1(c), if there are any Liabilities
      relating to STV Employees (or their eligible spouses, beneficiaries and
      dependants) in respect of their participation in or entitlement under a Movie
      and Entertainment Plan which are in addition to or in excess of the Assets
      held
      by Movie, Entertainment, International, Production and Propinquity in respect
      of
      such Persons under a Movie and Entertainment Plan, STV shall Assume or retain
      such Liabilities.




(d)           Participation
      in AA Plans.  All Movie Employees, Entertainment Employees,
      Production Employees, Propinquity Employees and International Employees (and
      their eligible spouses, beneficiaries and dependents) will cease, effective
      as
      of the Effective Time, to actively participate in and accrue benefits under
      each
      of the AA Plans.  CW Media and STV and their respective Subsidiaries
      shall take all necessary actions to effect such cessation of




56


active
      participation of Movie Employees, Entertainment Employees, Production Employees,
      Propinquity Employees and International Employees (and their eligible spouses,
      beneficiaries and dependents) under the AA Plans.




(e)           Participation
      in Movie and Entertainment Plans.  All STV Employees (and their
      eligible spouses, beneficiaries and dependents) will cease, effective as of
      the
      Effective Time, to actively participate in and accrue benefits under each of
      the
      Movie and Entertainment Plans.  Entertainment, International, Movie,
      Production and Propinquity and their respective Subsidiaries shall take all
      necessary actions to effect such cessation of active participation of STV
      Employees (and their eligible spouses, beneficiaries and dependents) under
      the
      Movie and Entertainment Plans.




Section
      5.2.                                Savings
      Plans.




(a)           DPSPs.  Effective
      as at the Effective Time, each New Entity shall establish or cause to be
      established a DPSP for its Corresponding Employees who participated in the
      AA
      DPSP prior to the Effective Time (each, a “Corresponding DPSP”) and
      Corresponding Employees shall cease to actively participate in and accrue
      benefits under the AA DPSP.  As soon as practicable after the
      Effective Time, CW Media shall cause the individual account balances of
      Corresponding Employees held under the AA DPSP to be transferred from the AA
      DPSP to the applicable Corresponding DPSP.  Each New Entity shall
      provide the same investment options under the Corresponding DPSP as the options
      offered under the AA DPSP immediately prior to the Effective
      Time.  The individual account balances of Corresponding Employees held
      under the AA DPSP shall be transferred in-kind from the AA DPSP to the
      Corresponding DPSP, unless otherwise agreed by CW Media and the Corresponding
      Business.  Upon such transfer, the relevant New Entity, the relevant
      Corresponding Business and the relevant Corresponding DPSP shall Assume all
      Liabilities with respect to all amounts transferred from the AA DPSP to such
      Corresponding DPSP in respect of the relevant Corresponding Employees and each
      of CW Media, its Affiliates (for the avoidance of doubt, other than such
      Corresponding Business) and the AA DPSP shall be relieved of all such
      Liabilities.




(b)           Group
      RRSPs.  Effective as at the Effective Time, each New Entity shall
      assume or cause to be assumed sponsorship of the portion of the AA Group RRSP
      that relates to its Corresponding Employees (each such portion
      a  “Corresponding Group RRSP”; the Corresponding DPSP and
      Corresponding Group RRSP established by each New Entity shall be referred to
      as
      the “Corresponding Savings Plan” in respect of such New Entity and its
      Group).  More specifically, at the Effective Time CW Media shall
      resign as agent of the Corresponding Employees of each of the New Entities
      and
      its Group under the AA Group RRSP and each New Entity and its Corresponding
      Business shall takes all steps necessary to be appointed as the agent of its
      Corresponding Employees under its Corresponding Group RRSP as at the Effective
      Time.  Upon such assumption of sponsorship, each New Entity and its
      Corresponding Business and its Corresponding Group RRSP shall Assume all
      Liabilities with respect to all amounts transferred from the AA Group RRSP
      to
      such Corresponding Group RRSP in respect of the Corresponding Employees of
      such
      New Entity and its Group and each of CW Media, its Affiliates (for the avoidance
      of doubt, other than such Corresponding Business) and the AA Group RRSP shall
      be
      relieved of all such Liabilities.




57


(c)           Records.  CW
      Media shall provide or cause to be provided to each Corresponding Business
      copies of personnel and other records of CW Media and its Subsidiaries with
      respect to its Corresponding Employees (including records of any agent or
      representative), pertaining to the AA Savings Plan as the Corresponding Business
      may reasonably request in order to administer its Corresponding Savings
      Plan.




Section
      5.3.                                Health
      and Welfare Plans.




(a)           Corresponding
      Benefit Plans.  Effective as of the Effective Time, each New
      Entity shall establish or cause to be established or otherwise provide or cause
      to be provided non-pension benefit plans (the “Corresponding Benefit
      Plans”) to provide non-pension benefits on and after the Effective Time for
      its Corresponding Employees (and their eligible spouses, beneficiaries and
      dependants) who participated in the AA Benefits Plans prior to the Effective
      Time.  Each New Entity shall waive or cause to be waived any
      pre-existing medical condition or other restriction that would prevent immediate
      and full participation of any Corresponding Employee in its Corresponding
      Benefit Plans.  For the avoidance of doubt, Corresponding Employees
      who are on short-term disability or long-term disability as at the Effective
      Time shall be enrolled in and receive benefits under the Corresponding Benefit
      Plans for the Group to which they are Corresponding Employees, on and after
      the
      Effective Time.




(b)           Claims.  Claims
      incurred by the Corresponding Employees (and their eligible spouses,
      beneficiaries and dependants) prior to the Effective Time shall be payable
      under
      the terms of the AA Benefit Plans, and claims incurred by the Corresponding
      Employees (and their eligible spouses, beneficiaries and dependants) on and
      after the Effective Time shall be payable under the terms of the Corresponding
      Benefit Plans established or provided in respect of such Corresponding
      Employees.  For purposes of the foregoing in relation to claims under
      the AA Benefit Plans or any Corresponding Benefit Plans, a claim shall be deemed
      to have been incurred on the date on which the event giving rise to such claim
      occurred and, in particular: (i) with respect to a death or dismemberment claim,
      shall be deemed to be the date of the death or dismemberment; (ii) with respect
      to an extended health care claim including dental and medical treatments, shall
      be deemed to be the date of the treatment; and (iii) with respect to a
      prescription drug or vision care claim, shall be deemed to be the date that
      the
      prescription was filled.




(c)           Adjustment.  If
      it is determined following the Effective Time that there are any surpluses,
      deficits, experiences gains or experience losses in respect of the AA Benefit
      Plans as at the Effective Time, any such surpluses, deficits, experiences gains
      or experience losses, as applicable, shall be shared by the New Entities
      proportionately on a per employee basis.




Section
      5.4.                                Continuation
      of Employment.  To the extent that a New Entity and the members of
      its Group are not already employing any of their Corresponding Employees, such
      New Entity shall continue, or shall cause the members of its Corresponding
      Group
      to continue, the employment of any such Corresponding Employees on terms and
      conditions which are substantially comparable in the aggregate to those
      currently available to such Corresponding Employees.




58


Section
      5.5.                                Individual
      Employee Agreements.  Each New Entity and its Corresponding Group
      shall Assume or retain exclusive responsibility for all individual employment,
      retention, termination, severance and other similar agreements (collectively,
      “Employee Agreements”) in respect of any of its Corresponding
      Employees.  As at the Effective Time, each New Entity shall Assume all
      Employee Agreements in respect of its Corresponding Employees.  Each
      of CW Media and the New Entities will cooperate to take all reasonable steps
      and
      fulfill all of their respective obligations under applicable Law, including
      obtaining any prior approvals or consents, or engaging in any prior discussions
      or consultations, on a timely basis, in connection with the Transfer and
      Assumption of all Liabilities relating to such Employee Agreements.




Section
      5.6.                                Post-Effective
      Time Bonus Awards.  Each New Entity shall Assume or retain or
      cause to be Assumed or retained all Liabilities for all bonus awards that
      are




payable
      to its Corresponding Employees for the performance periods that end at and
      after
      the Effective Time.




Section
      5.7.                                Severance
      Benefits.  Each New Entity shall Assume or retain or cause to be
      Assumed or retained all Liabilities in respect of the termination or alleged
      termination of any of its Corresponding  Employees (excluding any
      employees listed on Schedule 1.1(29)
      and Schedule 1.1(55)) that
      occurs prior to or as a result of or in connection with or following the
      consummation of the transactions contemplated by this Agreement, including
      any
      amounts required to be paid (including any payroll or other taxes), and the
      costs of providing benefits and bonuses, including bonuses accrued up to the
      date of termination, under any applicable severance, separation, redundancy,
      termination or similar plan, program, practice, contract, agreement, law or
      regulation (such benefits to include any medical or other welfare benefits,
      outplacement benefits or any other benefits under a Plan, accrued vacation
      and
      taxes).




Section
      5.8.                                Vacation.  Each
      New Entity shall Assume or retain or cause to be Assumed or retained all
      Liabilities with respect to the accrued, unused vacation of any of its
      Corresponding Employees.




Section
      5.9.                                COBRA/HIPPA.  Effective
      at the Effective Time, the Movie Group and the Entertainment Group shall be
      responsible for administering compliance with the health care continuation
      requirements of COBRA, the certificate of creditable coverage requirements
      of
      HIPAA, and the corresponding provisions of the Movie and Entertainment Plans
      with respect to Movie Employees and Entertainment Employees and their covered
      dependents who incur a COBRA qualifying event or loss of coverage under the
      Movie and Entertainment Plans at any time.




59


**ARTICLE
      VI**









**INDEMNIFICATION**




Section
      6.1.                                Release
      of Pre-Transfer Claims.




(a)           Except
      (i) as provided in Section 6.1(b), (ii) as
      may be otherwise expressly provided in this Agreement, any Ancillary Agreement
      or any Continuing Arrangements and (iii) for any matter for which any Party
      is
      entitled to indemnification or contribution pursuant to this Article VI, each Party, for itself and each
      member of its respective Group, their respective Affiliates and all Persons
      who
      at any time prior to the Effective Time were directors, officers, agents or
      employees of any member of the their Group (in their respective capacities
      as
      such), in each case, together with their respective heirs, executors,
      administrators, successors and assigns, do hereby remise, release and forever
      discharge the other Parties and the other members of such other Parties’ Groups,
      their respective Affiliates and all Persons who at any time prior to the
      Effective Time were shareholders, directors, officers, agents or employees
      of
      any member of such other Parties (in their respective capacities as such),
      in
      each case, together with their respective heirs, executors, administrators,
      successors and assigns, from any and all Liabilities whatsoever, whether at
      Law
      or in equity (including any right of contribution), whether arising under any
      Contract, by operation of Law or otherwise, existing or arising from any acts
      or
      events occurring or failing to occur or alleged to have occurred or to have
      failed to occur or any conditions existing or alleged to have existed on or
      before the Effective Time, other than in connection with the Plan of Separation
      and any of the other transactions contemplated hereunder and under the Ancillary
      Agreements.




(b)           For
      the avoidance of doubt, nothing contained in Section
      6.1(a) shall impair or otherwise affect any right of any Party, and as
      applicable, a member of the Party’s Group to enforce this Agreement, any
      Ancillary Agreement, any Continuing Arrangements or any agreements,
      arrangements, commitments or understandings contemplated in this Agreement,
      any
      Ancillary Agreement or any Continuing Arrangements to continue in effect after
      the Effective Time.  In addition, nothing contained in Section 6.1(a)shall release any person
      from:




(i)           any
      Liability Assumed, Transferred or allocated to a Party or a member of such
      Party’s Group pursuant to or contemplated by, or any other Liability of any
      member of such Group under, this Agreement or any Ancillary Agreement including,
      with respect to any New Entity, a Corresponding Liability of such New
      Entity;




(ii)           any
      Liability for the sale, lease, construction or receipt of goods, property or
      services purchased, obtained or used in the ordinary course of business by
      a
      member of one Group from a member of any other Group prior to the Effective
      Time;




60


(iii)           any
      Liability for unpaid amounts for products or services or refunds owing on
      products or services due on a value-received basis for work done by a member
      of
      one Group at the request or on behalf of a member of another Group;




(iv)           any
      Liability provided in or resulting from any other Contract or understanding
      that
      is entered into after the Effective Time between any Party (and/or a member
      of
      such Party’s Group), on the one hand, and any other Party or Parties (and/or a
      member of such Party’s Group or Parties’ Groups), on the other
      hand;




(v)           any
      Liability with respect to any Continuing Arrangements; or




(vi)           any
      Liability that the Parties may have with respect to indemnification or
      contribution pursuant to this Agreement or otherwise for claims brought against
      the Parties by third Persons, which Liability shall be governed by the
      provisions of this Article VI and, if
      applicable, the appropriate provisions of the Ancillary Agreements.




In
      addition, nothing contained in Section
      6.1(a) shall release CW Media from indemnifying any director, officer or
      employee of any New Entity who was a director, officer or employee of CW Media
      or any of its Affiliates on or prior to the Effective Time or the Closing Date,
      as the case may be, to the extent such director, officer or employee is or
      becomes a named defendant in any Action with respect to which he or she was
      entitled to such indemnification pursuant to then existing
      obligations.




(c)           Each
      Party shall not, and shall not permit any member of its Group to, make, any
      claim or demand, or commence any Action asserting any claim or demand, including
      any claim of contribution or any indemnification, against any other Party or
      any
      member of any other Party’s Group, or any other Person released pursuant to Section 6.1(a), with respect to any Liabilities
      released pursuant to Section
      6.1(a).




It
      is the
      intent of each Party, by virtue of the provisions of this Section 6.1, to provide for a full and complete
      release and discharge of all Liabilities existing or arising from all acts
      and
      events occurring or failing to occur or alleged to have occurred or to have
      failed to occur and all conditions existing or alleged to have existed on or
      before the Effective Time, whether known or unknown, between or among any Party
      (and/or a member of such Party’s Group), on the one hand, and any other Party or
      Parties (and/or a member of such Party’s Group or Parties’ Groups), on the other
      hand (including any contractual agreements or arrangements existing or alleged
      to exist between or among any such members on or before the Effective Time),
      except as specifically set forth in Section
      6.1(a) and Section
      6.1(b).  At any time, at the reasonable request of any other
      Party, each Party shall cause each member of its respective Group and, to the
      extent practicable, each other Person on whose behalf it released Liabilities
      pursuant to this Section 6.1 to execute and
      deliver releases reflecting the provisions hereof.




61


Section
      6.2.                                Indemnification.  Except
      as otherwise specifically set forth in any provision of this Agreement, each
      Party shall and shall cause the other members of its Group to indemnify, defend
      and hold harmless the Corresponding Indemnitees of other Groups from and against
      any and all Indemnifiable Losses of such Corresponding Indemnitees arising
      out
      of, by reason of or otherwise in connection with (a) the Corresponding
      Liabilities of such Party and of any member of its Group and (b) any breach
      by
      such Party or any member of its Group of any provision of this Agreement or
      any
      Ancillary Agreement unless such Ancillary Agreement expressly provides for
      separate and exclusive indemnification therein, in which case any such
      indemnification claims shall be made thereunder.  Notwithstanding
      anything to the contrary herein, (a) each member of each of the Movie Group
      and
      the Production Group shall be jointly and severally responsible for the
      indemnification obligations of each member of each such Group under this Section 6.2 and (b) each member of each
      of the Entertainment Group, the Propinquity Group and the International Group
      shall be jointly and severally responsible for the indemnification obligations
      of each member of each such Group under this Section
      6.2.




Section
      6.3.                                Procedures
      for Indemnification.




(a)           An
      Indemnitee shall give the Indemnifying Party notice of any matter that an
      Indemnitee has determined has given or is reasonably likely to give rise to
      a
      right of indemnification under this Agreement (other than a Third-Party Claim
      which shall be governed by Section 6.3(b)),
      within thirty (30) days of such determination, stating the amount of the
      Indemnifiable Loss claimed, if known, and method of computation thereof, and
      containing a reference to the provisions of this Agreement in respect of which
      such right of indemnification is claimed by such Indemnitee or arises;
provided, however, that the failure to provide such notice shall
      not release the Indemnifying Party from any of its obligations except and solely
      to the extent the Indemnifying Party shall have been actually prejudiced as
      a
      result of such failure.




(b)           If
      a claim or demand is made against an Indemnitee by any Person who is not a
      party
      to this Agreement or an Affiliate of a party to this Agreement or an Indemnitee
      is the subject of an audit or other review by a Governmental Entity related
      to
      its Taxes under which it is reasonably likely that the Governmental Entity
      will
      take a position which would give rise to a Liability for Taxes (a
“Third-Party Claim”) as to which such Indemnitee is or may be entitled to
      indemnification pursuant to this Agreement, such Indemnitee shall notify the
      Party which is or may be required pursuant to this Article VI or pursuant to any Ancillary
      Agreement to make such indemnification (the “Indemnifying Party”) in
      writing, and in reasonable detail, of the Third-Party Claim promptly (and in
      any
      event within thirty (30) days) after receipt by such Indemnitee of written
      notice of the Third-Party Claim; provided, however, that the
      failure to provide notice of any such Third-Party Claim pursuant to this
      sentence shall not release the Indemnifying Party from any of its obligations
      except and solely to the extent the Indemnifying Party shall have been actually
      prejudiced as a result of such failure.  Thereafter, the Indemnitee
      shall deliver to the Indemnifying Party, promptly (and in any event within
      five
      (5) Business Days) after the Indemnitee’s receipt thereof, copies of all notices
      and documents (including court papers) received by the Indemnitee relating
      to
      the Third-Party Claim.




62


(c)           An
      Indemnifying Party shall be entitled (but shall not be required) to assume
      and
      control the defense of any Third-Party Claim, at such Indemnifying Party’s own
      cost and expense and by such Indemnifying Party’s own counsel, if it gives
      notice of its intention to do so to the applicable Indemnitees within thirty
      (30) days of the receipt of such notice from such Indemnitees.  After
      notice from an Indemnifying Party to an Indemnitee of its election to assume
      the
      defense of a Third-Party Claim, such Indemnitee shall have the right to employ
      separate counsel and to participate in the defense, compromise, or settlement
      thereof, at its own expense and, in any event, shall cooperate with the
      Indemnifying Party in such defense and make available to the Indemnifying Party,
      at the Indemnifying Party’s expense, all witnesses, pertinent Information,
      materials and information in such Indemnitee’s possession or under such
      Indemnitee’s control relating thereto as are reasonably required by the
      Indemnifying Party; provided, however, that in the event of an
      actual or potential conflict of interest between the Indemnifying Party and
      the
      applicable Indemnitee(s), if the Indemnifying Party has elected to assume the
      defense of the Third-Party Claim, such Indemnitee(s) shall be entitled to
      retain, at the Indemnifying Party’s reasonable cost and expense, separate
      counsel as required by the applicable rules of professional conduct with respect
      to such matter; provided, further, that if the Indemnifying Party
      has elected to assume the defense of the Third-Party Claim but has specified,
      and continues to assert, any reservations or exceptions in such notice, then,
      in
      any such case, the reasonable fees and expenses of one separate counsel for
      all
      Indemnitees shall be borne by the Indemnifying Party.




(d)           If
      an Indemnifying Party elects not to assume responsibility for defending a
      Third-Party Claim, or fails to notify an Indemnitee of its election as provided
      in Section 6.3(c), such Indemnitee may
      defend such Third-Party Claim at the reasonable cost and expense of the
      Indemnifying Party.  If the Indemnitee is conducting the defense
      against any such Third-Party Claim, the Indemnifying Party shall cooperate
      with
      the Indemnitee in such defense and make available to the Indemnitee, at the
      Indemnifying Party’s expense, all witnesses, pertinent Information, material and
      information in such Indemnifying Party’s possession or under such Indemnifying
      Party’s control relating thereto as are reasonably required by the
      Indemnitee.




(e)           Subject
      to Section 6.3(j), unless the Indemnifying
      Party has failed to assume the defense of the Third-Party Claim in accordance
      with the terms of this Agreement, no Indemnitee may settle or compromise any
      Third-Party Claim without the consent of the Indemnifying Party, which consent
      shall not be unreasonably withheld, conditioned or delayed.




(f)           In
      the case of a Third-Party Claim, no Indemnifying Party shall consent to entry
      of
      any judgment or enter into any settlement of the Third-Party Claim without
      the
      consent of the Indemnitee if the effect thereof is to permit any injunction,
      declaratory judgment, other order or other non-monetary relief to be entered,
      directly or indirectly, against any Indemnitee or if such judgment or settlement
      does not absolutely, forever and unconditionally release the Indemnitee from
      any
      further claims arising out of the allegations underlying the Third-Party
      Claim.




(g)           In
      the case of any claim or demand made by or Action brought or initiated by a
      Party or a member of its Group that is related primarily to or arises out of
      any
      Business other than the Corresponding Business of such Party, such Party shall
      promptly notify the




63


Corresponding
      Group of such Business of such claim, demand or Action and such notified party
      shall be entitled (but shall not be required) to assume and control the
      prosecution of such claim, demand or Action, at such party’s own cost and
      expense and by such party’s own counsel, if it gives notice of its intention to
      do so to the notifying party by the later of thirty (30) days of receiving
      notice of such claim, demand or Action and thirty (30) days from the Closing
      Date.  If such notified party elects not to assume responsibility for
      prosecuting such a claim, demand or Action, such notifying party shall prosecute
      such claim, demand or Action at the cost and expense of such notified party
      (such costs and expenses to be paid with thirty (30) days of the presentation
      of
      an invoice therefor).




(h)           Absent
      fraud or willful misconduct by an Indemnifying Party and except as otherwise
      expressly agreed to in any other agreement among the Parties or any of their
      Affiliates, the indemnification provisions of this Article VI shall be the sole and exclusive
      remedy of an Indemnitee for any monetary or compensatory damages or losses
      resulting from any breach of this Agreement and each Indemnitee expressly waives
      and relinquishes any and all rights, claims or remedies such Person may have
      with respect to the foregoing other than under this Article VI against any Indemnifying
      Party.




(i)           In
      the case of a Third Party Claim made in connection with a Tax Contest involving
      an Indemnitee such that the Indemnitee is required by Law to make a payment
      to
      any Person (a “Third Party” for the purposes of this paragraph) with respect to
      such Third Party Claim before the completion of settlement negotiations or
      related legal proceedings or in connection with an objection to any reassessment
      of Taxes, the Indemnitee may make such payment and the Indemnifying Party shall,
      forthwith after demand by the Indemnitee, reimburse the Indemnitee for any
      such
      payment.  If the amount of any Liability under the Third Party Claim
      in respect of which such a payment was made, as finally determined, is less
      than
      the amount that was paid by the Indemnifying Party to the Indemnitee, the
      Indemnitee shall, forthwith after receipt of the difference from the Third
      Party, pay such difference to the Indemnifying Party, together with, for greater
      certainty, any refund interest received by the Indemnitee from the Third Party,
      less any Taxes payable in respect of such refund interest, including any
      withholding taxes.




(j)           If
      an Indemnifying Party has elected to assume responsibility for defending a
      Third-Party Claim made in connection with a Tax Contest involving an Indemnitee
      and such Indemnitee subsequently determines that it would be in the best
      interests of such Indemnitee to settle such Tax Contest in whole or in part,
      such Tax Contest may be so settled, in whole or in part, without the consent
      of
      the Indemnifying Party, provided that such Indemnitee provides the Indemnifying
      Party with a release of the Indemnifying Party’s obligations with respect to
      such Third Party Claim to the extent of such settlement.




Section
      6.4.                                Cooperation
      in Defense and Settlement.




(a)           With
      respect to any Third-Party Claim that implicates two or more Parties in a
      material fashion due to the allocation of Liabilities, responsibilities for
      management of defense and related indemnities pursuant to this Agreement or
      any
      of the Ancillary Agreements, the applicable Parties agree to use reasonable
      best
      efforts to cooperate fully and maintain a joint




64


defense
      (in a manner that will preserve for both Parties the attorney-client privilege,
      joint defense or other privilege with respect thereto).  The Party
      that is not responsible for managing the defense of such Third-Party Claims
      shall, upon reasonable request, be consulted with respect to significant matters
      relating thereto and may, if necessary or helpful, retain counsel to assist
      in
      the defense of such claims.




(b)           Each
      of the New Entities agrees that at all times from and after the Effective Time,
      if an Action is commenced by a third party (or any member of such Party’s
      respective Group) with respect to which one or more named Parties (or any member
      of such Party’s respective Group) is a nominal defendant and/or such Action is
      otherwise not a Liability allocated to such named Party under this Agreement
      or
      any Ancillary Agreement, then the other Party or Parties shall use commercially
      reasonable efforts to cause such nominal defendant to be removed from such
      Action.




Section
      6.5.                                Indemnification
      Payments.  Indemnification required by this Article VI shall be made by payments of the
      amount thereof during the course of the investigation or defense, as and when
      bills are received or an Indemnifiable Loss or Liability incurred or as
      otherwise required under Section
      6.3(i).




Section
      6.6.                                Contribution.




(a)           If
      the indemnification provided for in Section
      6.2 is unavailable to, or insufficient to hold harmless an Indemnitee
      under this Agreement or any Ancillary Agreement in respect of any Liabilities
      referred to herein or therein, then each Indemnifying Party shall contribute
      to
      the amount paid or payable by such Indemnitee as a result of such Liabilities
      in
      such proportion as is appropriate to reflect the relative fault of the
      Indemnifying Party and the Indemnitee in connection with the actions or
      omissions that resulted in Liabilities as well as any other relevant equitable
      considerations.




(b)           The
      Parties agree that it would not be just and equitable if contribution pursuant
      to this Section 6.6 were determined by a pro
      rata allocation or by any other method of allocation that does not take account
      of the equitable considerations referred to in Section 6.6(a).  The amount paid or
      payable by an Indemnitee as a result of the Liabilities referred to in Section 6.6(a) shall be deemed to include,
      subject to the limitations set forth above, any legal or other fees or expenses
      reasonably incurred by such Indemnitee in connection with investigating any
      claim or defending any Action.  No Person guilty of fraud or
      fraudulent misrepresentation shall be entitled to contribution from any Person
      who was not guilty of such fraud or fraudulent misrepresentation.




Section
      6.7.                                Indemnification
      Obligations Net of Insurance Proceeds and Other Amounts.




(a)           Any
      Indemnifiable Loss subject to indemnification or contribution pursuant to this
      Article VI, will be calculated (i) net of
      Insurance Proceeds that actually reduce




65


the
      amount of the Indemnifiable Loss and (ii) net of any proceeds received by the
      Indemnitee from any third party for indemnification for such Liability that
      actually reduce the amount of the Indemnifiable Loss (“Third-Party
      Proceeds”).  Accordingly, the amount which any Indemnifying Party
      is required to pay pursuant to this Article
      VI to any Indemnitee pursuant to this Article VI will be reduced by any Insurance
      Proceeds or Third-Party Proceeds theretofore actually recovered by or on behalf
      of the Indemnitee in respect of the related Indemnifiable Loss.  If an
      Indemnitee receives a payment required by this Agreement from an Indemnifying
      Party in respect of any Indemnifiable Loss (an “Indemnity Payment”) and
      subsequently receives Insurance Proceeds or Third-Party Proceeds, then the
      Indemnitee will pay to the Indemnifying Party an amount equal to the excess
      of
      the Indemnity Payment received over the amount of the Indemnity Payment that
      would have been due if the Insurance Proceeds or Third-Party Proceeds had been
      received, realized or recovered before the Indemnity Payment was
      made.




(b)           An
      insurer who would otherwise be obligated to pay any claim shall not be relieved
      of the responsibility with respect thereto or, solely by virtue of the
      indemnification and contributions provisions hereof, have any subrogation rights
      with respect thereto.  The Indemnitee shall use commercially
      reasonable efforts to seek to collect or recover any third-party Insurance
      Proceeds and any Third-Party Proceeds (other than Insurance Proceeds under
      an
      arrangement where future premiums are adjusted to reflect prior claims in excess
      of prior premiums) to which the Indemnified Party is entitled in connection
      with
      any Indemnifiable Loss for which the Indemnified Party seeks contribution or
      indemnification pursuant to this Article VI;
provided, that the Indemnitee’s inability to collect or recover
      any such
      Insurance Proceeds or Third-Party Proceeds shall not limit the Indemnifying
      Party’s obligations hereunder.




(c)           In
      respect of the receipt of an Indemnity Payment, the Indemnitee agrees to make
      and file, on a timely basis, an election under subsection 12(2.2), 13(7.4)
      or
      53(2.1) of the




*Income
      Tax Act* (Canada) and any corresponding provisions of any provincial taxing
      statutes, to the extent applicable, to reduce the cost or capital cost of
      property or the amount of the reimbursed outlay or expense, as applicable,
      by
      the amount of the Indemnity Payment.




(d)           If
      an Indemnity Payment is made by an Indemnifying Party to an Indemnitee in
      respect of a claim made in connection with an Indemnifiable Loss (referred
      to in
      this Section 6.7(d) as the “Claim Amount”)
      and the incurring of such Claim Amount by the Indemnitee constitutes an outlay
      or expense which is deductible in whole or in part in computing the income
      of
      the Indemnitee for income tax purposes, then the Indemnity Payment shall be
      adjusted with retroactive effect in accordance with the following
      rules:




(i)           if,
      taking into account an election made pursuant to Section 6.7(c), the Indemnity Payment is
      required to be included in computing the income of the Indemnitee for income
      tax
      purposes to the same extent that the Claim Amount is deductible in computing
      the
      income of the Indemnitee, then no adjustment shall be required to be made to
      the
      Indemnity Payment;




66


(ii)           if,
      taking into account an election made pursuant to Section 6.7(c), the Indemnity Payment is not
      required to be included in computing the income of the Indemnitee for income
      tax
      purposes or is required to be included in computing such income to a lesser
      extent than the Claim Amount is deductible in computing the income of the
      Indemnitee, then the Indemnitee shall, within a reasonable time after the
      expiration of all limitation periods during which a reassessment may be made
      or
      an appeal filed in respect of an income tax assessment recognizing or giving
      effect to the deduction, pay to the Indemnifying Party an amount equal to the
      benefit available to the Indemnified Party resulting from the deduction in
      computing income; and




(iii)           if,
      taking into account an election made pursuant to Section 6.7(c), the Indemnity Payment is
      required to be included in computing the income of the Indemnitee for income
      tax
      purposes to a greater extent than the Claim Amount is deductible in computing
      the income of the Indemnified Party, then the Indemnifying Party shall pay
      to
      the Indemnitee an additional amount such that the total net amount received
      by
      the Indemnitee, after deducting the amount of income taxes payable by the
      Indemnitee on such total amount, calculated without regard to any deductions,
      offsets, credits or other benefits available to and claimed or deducted by
      the
      Indemnitee in computing its income, taxable income or tax, equals the net cost
      to the Indemnitee of the Claim Amount.




(e)           If
      an Indemnity Payment is made by an Indemnifying Party to an Indemnitee in
      respect of a Claim Amount and the incurring of such Claim Amount by the
      Indemnitee does not constitute an outlay or expense which is deductible in
      whole
      or in part in computing the income of the Indemnitee for income tax purposes,
      then the Indemnity Payment shall be adjusted with retroactive effect in
      accordance with the following rules:




(i)           if,
      taking into account an election made pursuant to Section 6.7(c), the Indemnity Payment is not
      required to be included in computing the income of the Indemnitee for income
      tax
      purposes, then no adjustment shall be required to be made to the Indemnity
      Payment; and




(ii)           if,
      taking into account an election made pursuant to Section 6.7(c), the Indemnity Payment is
      required to be included in computing the income of the Indemnitee for income
      tax
      purposes, then the Indemnifying Party shall pay to the Indemnified Party such
      additional amounts such that the total net amount received by the Indemnitee,
      after deducting the amount of income taxes payable by the Indemnitee on such
      total amount, calculated without regard to any deductions, offsets, credits
      or
      other benefits available to and claimed or deducted by the Indemnitee in
      computing its income, taxable income or tax, equals the net cost to the
      Indemnitee of the Claim Amount.




67


Section
      6.8.                                Additional
      Matters; Survival of Indemnities.




(a)           The
      indemnity and contribution agreements contained in this Article VI shall remain operative and in full
      force and effect, regardless of (i) any investigation made by or on behalf
      of
      any Indemnitee; (ii) the knowledge by the Indemnitee of Indemnifiable Losses
      for
      which it might be entitled to indemnification or contribution hereunder; and
      (iii) any termination of this Agreement.




(b)           The
      rights and obligations of each Party and their respective Indemnitees under
      this
Article VI shall survive the sale or other
      Transfer by any Party or its respective Subsidiaries of any Assets or businesses
      or the assignment by it of any Liabilities.




**ARTICLE
      VII**









**CONFIDENTIALITY;
      ACCESS TO INFORMATION**




Section
      7.1.                                Corporate
      Information Repository.




(a)           CW
      Media shall cause the creation of, shall maintain, and shall provide access
      to
      the Corporate Information Repository.




(b)           Each
      of the New Entities other than STV shall identify and provide to STV, solely
      for
      inclusion in the Corporate Information Repository, and STV shall include, any
      Corporate Information in its possession, custody or control that does not relate
      solely to (i) it, any member of its Group, the conduct of its Business or any
      liability for which it is solely responsible pursuant to this Agreement, or
      (ii)
      any Ancillary Agreement to which it or a member of its Group is a
      Party.  STV shall use commercially reasonable efforts to place into
      the Corporate Information Repository any Corporate Information in its
      possession, custody or control that does not relate solely to STV, any member
      of
      the STV Group or the conduct of the Specialty Television
      Business.  Such Corporate Information includes Information contained
      on personal computers, shared storage devices, office paper files, and off-site
      file storage sites.




Section
      7.2.                                Access
      to Information.  (i)  Other than in circumstances in
      which indemnification is sought pursuant to Article
      VI (in which event the provisions of such Article will govern), from
      and
      after the Effective Time, each of the Parties shall on reasonable notice afford
      to each other and their respective authorized accountants, counsel and other
      designated representatives reasonable access during normal business hours,
      subject to applicable privacy laws and appropriate restrictions for classified,
      privileged or confidential information and to preserve the completeness and
      integrity of the Information, to the personnel, properties, and Information
      of
      such Party and its Subsidiaries (including the Corporate Information Repository)
      insofar as such access is reasonably required by the other Party and relates
      to
      (x) such other Party or the conduct of its




68


business
      prior to the Effective Time or (y) any Ancillary Agreement to which each of
      the
      Parties requesting such access and the Party requested to grant such access
      are
      Parties.  Nothing in this Section
      7.2 shall require any Party to violate any agreement with any third
      party regarding the confidentiality of confidential and proprietary information
      relating to that third party or its business; provided, however,
      that in the event that a Party is required to disclose any such information,
      such Party shall use commercially reasonable efforts to seek to obtain such
      third party Consent to the disclosure of such information.  With
      respect to access to Information contained in the Corporate Information
      Repository, the Parties agree and acknowledge that such access (including any
      searches for specific Information in the Corporate Information Repository,
      and
      the making of copies thereof), may be conducted directly by a Party’s employees
      or its designees subject to appropriate confidentiality obligations,
provided that STV, in its capacity as operator of the Corporation
      Information Repository, shall take reasonable and prudent measures in connection
      with such access and related activities to preserve the integrity and
      confidentiality of the Corporate Information Repository and the Information
      contained therein.




(b)           Each
      Party agrees that it shall preserve and keep, or cause to be preserved and
      kept,
      all original books and records in respect of the Corporate Division in the
      possession of such Party or members of its Group for a period of ten (10) years
      from the Closing Date.  Following such ten (10) year period, before
      any Party or members of their respective Groups shall dispose of any of such
      books and records, such Party shall give at least 90 days’ prior written notice
      of such intention to dispose to the other Parties, and the other Parties shall
      be given an opportunity, at their cost and expense, to remove and retain all
      or
      any part of such books and records as they may elect.




(c)           Any
      Information provided by or on behalf of or made available by or on behalf of
      any
      other Party hereto pursuant to this Article
      VII shall be on an “as is,” “where is” basis and no Party is making any
      representation or warranty with respect to such Information or the completeness
      thereof.




Section
      7.3.                                Disposition
      of Information.




(a)           Each
      Party acknowledges that Information in its or in a member of its Group’s
      possession, custody or control as of the Effective Time may include Information
      owned by another Party or a member of another Party’s Group and not related to
      (i) it or its Business or (ii) any Ancillary Agreement to which it or any member
      of its Group is a Party.




(b)           Notwithstanding
      such possession, custody or control, such Information shall remain the property
      of such other Party or member of such other Party’s Group.  Each Party
      agrees, subject to legal holds and other legal requirements and obligations,
      (i)
      that any such Information is to be treated as Confidential Information of the
      Party or Parties to which it relates and handled in accordance with Section 7.6 (except that such Information will
      not be used for any purpose) and (ii) to use commercially reasonable efforts
      within a reasonable time to (1) purge such Information from its databases,
      files
      and other systems and not retain any copy of such Information (including, if
      applicable, by transferring such Information to the Party to which such
      Information belongs), or (2) if such purging is not practicable, to encrypt
      or
      otherwise make unreadable or inaccessible such Information.




69


Section
      7.4.                                Witness
      Services.  At all times from and after the Effective Time, each of
      the New Entities shall use its commercially reasonable efforts to make available
      to the others, upon reasonable written request, its and any member of its
      Group’s officers, directors, employees and agents as witnesses to the extent
      that (i) such Persons may reasonably be required to testify in connection with
      the prosecution or defense of any Action or Tax Contest in which the requesting
      Party may from time to time be involved (except for claims, demands or Actions
      or Tax Contest between members of each Group) and (ii) there is no conflict
      in
      the Action between the requesting Party and such New Entity or its Group, as
      applicable.  A Party providing, or whose Group is providing, a witness
      to another Party under this Section 7.4
      shall be entitled to receive from the recipient of such services, upon the
      presentation of invoices therefor, payments for such amounts, relating to
      disbursements and other out-of-pocket expenses (which shall not include the
      costs of salaries and benefits of employees who are witnesses or any pro rata
      portion of overhead or other costs of employing such employees which would
      have
      been incurred by such employees’ employer regardless of the employees’ service
      as witnesses), as may be reasonably incurred and properly paid under applicable
      Law.




Section
      7.5.                                Reimbursement;
      Other Matters.  Except to the extent otherwise contemplated by
      this Agreement or any Ancillary Agreement, a Party providing, or whose Group
      is
      providing, Information or access to Information to another Party under this
Article VII shall be entitled to receive from
      the recipient, upon the presentation of invoices therefor, payments for such
      amounts, relating to supplies, disbursements and other out-of-pocket expenses,
      as may be reasonably incurred in providing such Information or access to such
      Information.




Section
      7.6.                                Confidentiality.




(a)           Notwithstanding
      any termination of this Agreement, for a period of five (5) years from the
      Effective Time the Parties shall hold, and shall cause each of their respective
      Subsidiaries to hold, and shall each cause their respective officers, employees,
      agents, consultants and advisors to hold, in strict confidence, and not to
      disclose or release or use, without the prior written consent of the other
      Parties, any and all Confidential Information (as defined herein) concerning
      any
      other Party or the other Party’s Group; provided, that the Parties may
      disclose, or may permit disclosure of, Confidential Information (i) to their
      respective auditors, attorneys, financial advisors, bankers and other
      appropriate consultants and advisors who have a need to know such information
      and are informed of their obligation to hold such information confidential
      to
      the same extent as is applicable to the Parties and in respect of whose failure
      to comply with such obligations, the applicable Party will be responsible,
      (ii)
      if the Parties or any of their respective Subsidiaries are required or compelled
      to disclose any such Confidential Information by judicial or administrative
      process or by other requirements of Law or stock exchange rule, (iii) as
      required in connection with any legal or other proceeding by one Party against
      any other Party, (iv) as necessary in order to permit a Party to prepare and
      disclose its financial statements, Tax Returns or other required disclosures;
      (v) if and to the extent such Confidential Information has at the time become
      public knowledge other than by act or omission of the disclosing Party; (vi)
      if
      and to the extent the disclosing Party has at the time received such
      Confidential Information from a third party that the disclosing Party reasonably
      believes not to




70


have
      any
      confidentiality obligations to the Party to whom the Confidential Information
      relates; or (vii) if such Confidential Information is independently developed
      by
      the disclosing Party without reference to or reliance on any Confidential
      Information.  Notwithstanding the foregoing, in the event that any
      demand or request for disclosure of Confidential Information is made pursuant
      to
      clause (ii) above, each Party, as applicable, shall promptly notify the other
      of
      the existence of such request or demand and shall provide the other a reasonable
      opportunity to seek an appropriate protective order or other remedy, which
      such
      Parties will cooperate in obtaining.  In the event that such
      appropriate protective order or other remedy is not obtained, the Party whose
      Confidential Information is required to be disclosed shall or shall cause the
      other applicable Party or Parties to furnish, or cause to be furnished, only
      that portion of the Confidential Information that is legally required to be
      disclosed and shall take commercially reasonable steps to ensure that
      confidential treatment is accorded such information.




(b)           Notwithstanding
      anything to the contrary set forth herein, Confidential Information of any
      Party
      rightfully in the possession of and used by any other Party in the operation
      of
      its Business as of the Effective Time may continue to be used by such Party
      in
      possession of the Confidential Information in and only in the operation of
      the
      Corresponding Business of such Party; provided, that such use is not
      competitive in nature to any such other Parties, and may be used only so long
      as
      the Confidential Information is maintained in confidence and not disclosed
      in
      violation of Section 7.6(a) , except that
      Confidential Information may be disclosed to third parties other than those
      listed in Section 7.6(a), provided
      that such disclosure to such other third parties and any associated use of
      such
      information must be pursuant to a written agreement containing confidentiality
      obligations at least as protective of the Parties rights to Confidential
      Information as those contained in this Agreement.  Such continued
      right to use may not be transferred (directly or indirectly) to any third party
      without the prior written consent of the applicable Party.




(c)           Each
      of the New Entities acknowledges that it and the other members of its Group
      may
      have in their possession confidential or proprietary information of third
      parties that was received under confidentiality or non-disclosure agreements
      with such third party while part of the Predecessor and its
      Subsidiaries.  Each of the New Entities will hold, and will cause the
      other members of its Group and their respective representatives to hold, in
      strict confidence the confidential and proprietary information of third parties
      to which they or any other member of their Group have access, in accordance
      with
      the terms of any agreements entered into prior to the Effective Time between
      one
      or more of the Predecessor and its Subsidiaries (whether acting through, on
      behalf of, or in connection with, the separated Businesses) and such third
      parties to the extent that such New Entity or any member of its Group is aware
      of such terms of such agreements.




Section
      7.7.                                Privileged
      Matters.




(a)           The
      Parties recognize that legal and other professional services that have been
      and
      will be provided prior to the Effective Time have been and will be rendered
      for
      the collective benefit of each of the Predecessor and its Subsidiaries and
      the
      Groups, and that each of




71


the
      Predecessor and its Subsidiaries and the Groups should be deemed to be the
      client with respect to such pre-separation services for the purposes of
      asserting all privileges which may be asserted under applicable
      Law.




(b)           The
      Parties recognize that legal and other professional services will be provided
      following the Effective Time which will be rendered solely for the benefit
      of
      one of CW Media and the New Entities.  With respect to such
      post-separation services, the Parties agree that each New Entity shall be
      entitled, in perpetuity, to control the assertion or waiver of all privileges
      in
      connection with privileged information which relates solely to the Corresponding
      Business of such New Entity or to the subject matter of any claims constituting
      Corresponding Liabilities of such New Entity, now pending or which may be
      asserted in the future by such New Entity or a third party, in each case
      regardless of which of CW Media or the New Entities has possession or control
      of
      the privileged information.




(c)           The
      Parties agree that they shall have a shared privilege, with equal right to
      assert or waive, subject to the restrictions in this Section 7.7, with respect to all privileges not
      allocated pursuant to the terms of Section
      7.7(b).  All privileges relating to any Actions or other
      matters which involve two or more of the New Entities in respect of which two
      or
      more of such Parties retain any responsibility or Liability under this
      Agreement, shall be subject to a shared privilege among them.




(d)           No
      Party may waive any privilege which could be asserted under any applicable
      Law,
      and in which any other Party has a shared privilege, without the consent of
      the
      other Party, which shall not be unreasonably withheld, conditioned or delayed,
      or as provided in Section 7.7(e) or Section
      7.7(f) below.  Consent shall
      be in writing, or shall be deemed to be granted unless written objection is
      made
      within twenty (20) days after notice upon the other Party requesting such
      consent.




(e)           In
      the event of any litigation or dispute between or among any of the Parties,
      or
      any members of their respective Groups, either such Party may waive a privilege
      in which the other Party or member of such Group has a shared privilege, without
      obtaining the consent of the other Party; provided, that such waiver of a
      shared privilege shall be effective only as to the use of information with
      respect to the litigation or dispute between the relevant Parties and/or the
      applicable members of their respective Groups, and shall not operate as a waiver
      of the shared privilege with respect to third parties.




(f)           If
      a dispute arises between or among the Parties or their respective Subsidiaries
      regarding whether a privilege should be waived to protect or advance the
      interest of any Party, each Party agrees that it shall negotiate in good faith,
      shall endeavor to minimize any prejudice to the rights of the other Parties,
      and
      shall not unreasonably withhold consent to any request for waiver by another
      Party.  Each Party specifically agrees that it will not withhold
      consent to waiver for any purpose except to protect its own legitimate
      interests.




(g)           Upon
      receipt by any Party or by any Subsidiary thereof of any subpoena, discovery
      or
      other request which arguably calls for the production or disclosure of
      information subject to a shared privilege or as to which another Party has
      the
      sole right hereunder to assert a




72


privilege,
      or if any Party obtains knowledge that any of its or any of its Subsidiaries’
current or former directors, officers, agents or employees have received any
      subpoena, discovery or other requests which arguably calls for the production
      or
      disclosure of such privileged information, such Party shall promptly notify
      the
      other Party or Parties of the existence of the request and shall provide the
      other Party or Parties a reasonable opportunity to review the information and
      to
      assert any rights it or they may have under this Section 7.7 or otherwise to prevent the
      production or disclosure of such privileged information.




(h)           The
      transfer of all Information pursuant to this Agreement is made in reliance
      on
      the agreement of the Parties as set forth in Section
      7.6 and Section 7.7, to maintain the
      confidentiality of privileged information and to assert and maintain all
      applicable privileges.  The access to information being granted
      pursuant to Section 6.3, Section
      7.1 and Section 7.2 hereof, the agreement to provide
      witnesses and individuals pursuant to Section
      6.3 and Section 7.4 hereof, the
      furnishing of notices and documents and other cooperative efforts contemplated
      by Section 6.3 hereof, and the transfer of
      privileged information between and among the Parties and their respective
      Subsidiaries pursuant to this Agreement shall not be deemed a waiver of any
      privilege that has been or may be asserted under this Agreement or
      otherwise.




Section
      7.8.                                Ownership
      of Information.  Any information owned by one Party or any of its
      Subsidiaries that is provided to a requesting Party pursuant to this Article VII shall be deemed to remain the
      property of the providing Party.  Unless specifically set forth
      herein, nothing contained in this Agreement shall be construed as granting
      or
      conferring rights of license or otherwise in any such information.




Section
      7.9.                                Other
      Agreements.  The rights and obligations granted under this Article VII are subject to any specific
      limitations, qualifications or additional provisions on the sharing, exchange
      or
      confidential treatment of information set forth in any Ancillary
      Agreement.




73


**ARTICLE
      VIII**









**DISPUTE
      RESOLUTION**




Section
      8.1.                                Negotiation.  In
      the event of a controversy, dispute or claim arising out of, in connection
      with,
      or in relation to the interpretation, performance, nonperformance, validity
      or
      breach of this Agreement or otherwise arising out of, or in any way related
      to
      this Agreement or the transactions contemplated hereby, including any claim
      based upon contract, tort, statute or constitution (but excluding any
      controversy, dispute or claim arising out of any Contract relating to the use
      or
      lease of real property if any third party is a necessary party to such
      controversy, dispute or claim) (collectively, “Agreement Disputes”), the
      Party asserting the Agreement Dispute shall deliver to the other Party or
      Parties a written notice of such Agreement Dispute (“Dispute
      Notice”).  Following receipt of the Dispute Notice, the general
      counsels of the relevant Parties and/or such other executive officer designated
      by the relevant Party shall negotiate for a reasonable period of time to settle
      such Agreement Dispute; provided, that such reasonable period shall not,
      unless otherwise agreed by the relevant Parties in writing, exceed thirty (30)
      days from the time of receipt of the Dispute Notice.




Section
      8.2.                                Arbitration.  If
      the Agreement Dispute has not been resolved for any reason after thirty (30)
      days have elapsed from the receipt by a Party of a Dispute Notice, such
      Agreement Dispute shall be referred to and determined by arbitration before
      a
      single arbitrator to be administered by ADR Chambers Inc., based in the City
      of
      Toronto, in accordance with its Arbitration Rules and the Ontario
*International Commercial Arbitration Act*, R.S.O. 1990 c. I.9 (the
“Arbitration Act”).  The seat of the arbitration shall be
      Ontario and hearings shall be conducted in the City of Toronto.  A
      Party to the arbitration (the “Appellant”) may appeal an award on a
      question of law or a question of mixed fact and law by delivering a written
      notice of appeal (“Notice of Appeal”) to the party opposite (the
“Appeal Respondent”) within ten (10) days of receipt of the
      award.  With the Notice of Appeal, the Appellant shall name three
      persons whom the Appellant is prepared to nominate as appeal arbitrators, each
      of such persons to be a former appellate judge of the Ontario Court of Appeal
      or
      the Supreme Court of Canada (an “Appeal Arbitrator”).  Within
      seven (7) days of the receipt of the Notice of Appeal, the Appeal Respondent
      shall by written notice to the Appellant select one or more of the three (3)
      persons named by the Appellant or provide the Appellant with a list of three
      (3)
      persons who are Appeal Arbitrators.  Within seven (7) days of receipt
      of the Appeal Respondent’s list, by written notice to the Appeal Respondent, the
      Appellant shall select one or more of such persons and/or provide a further
      list
      of three Appeal Arbitrators.  The Parties shall continue to exchange
      lists of three (3) Appeal Arbitrators in this fashion until three (3) Appeal
      Arbitrators are selected.  If the parties are unable to agree upon
      three (3) Appeal Arbitrators within twenty (20) days of the receipt by the
      Appeal Respondent of the Notice of Appeal, each party shall appoint one (1)
      Appeal Arbitrator, and the two (2) Appeal Arbitrators thus appointed shall
      appoint a third Appeal Arbitrator.  Where the two (2) Appeal
      Arbitrators fail to agree on the third Appeal Arbitrator within ten (10) days
      of
      their appointment, either Party may provide copies of the exchanged lists to
      ADR
      Chambers Inc. which shall appoint the third Appeal Arbitrator.  Where
      an appeal is taken, the award of the Appeal




74


Arbitrators
      shall be final and binding upon the Parties and there shall be no further right
      of appeal.  The award of the Appeal Arbitrators shall be an arbitral
      award under the Arbitration Act.  Arbitration in accordance with the
      provisions of this Section 8.2 shall be the
      sole dispute resolution mechanism in respect of any Agreement Dispute except
      it
      is not incompatible with this arbitration agreement for any Party to request,
      before or during the arbitral proceedings, from a competent court any interim,
      provisional or conservatory relief and for the court to grant such
      relief.  The Parties undertake as a general principle to keep
      confidential all information concerning the existence of the arbitration, all
      awards or appeals in the arbitration, all materials in the proceedings created
      or used for the purpose of the arbitration, and all materials and information
      produced during the arbitration and not in the public domain (“Confidential
      Arbitration Information”) save and to the extent that disclosure may be
      required of a Party by legal duty, to protect or pursue a legal right or to
      enforce or set aside an award in a *bona fide* Action before a competent
      court.  Each Party shall obtain and deposit with the arbitrator a
      signed confidentiality undertaking from its legal counsel, independent experts
      and consultants regarding the Confidential Arbitration Information.




Section
      8.3.                                Waiver
      of Time-Based Defenses.  The relevant Parties shall not assert the
      defenses of statute of limitations and laches arising during the period
      beginning after the date of receipt of the Dispute Notice, and any contractual
      time period or deadline under this Agreement or any Ancillary Agreement to
      which
      such Agreement Dispute relates occurring after the Dispute Notice is received
      shall not be deemed to have passed until such Agreement Dispute has been
      resolved.




Section
      8.4.                                Continuity
      of Service and Performance.  Unless otherwise agreed in writing,
      the Parties will continue to provide service and honor all other commitments
      under this Agreement and each Ancillary Agreement during the course of dispute
      resolution pursuant to the provisions of this Article VIII with respect to all matters not
      subject to such dispute resolution.




Section
      8.5.                                Costs.  Except
      as otherwise may be provided in any Ancillary Agreement, the costs of any
      mediation or arbitration pursuant to this Article
      VIII shall be borne by the Party or Parties in such proportion as the
      arbitrator determines based on the facts and circumstances.




**ARTICLE
      IX**









**INSURANCE**




Section
      9.1.                                Policies
      and Rights Included Within Assets.  With respect to any New
      Entity, the Corresponding Assets of such New Entity shall include any and all
      rights of an insured Party under each of the Corresponding Shared Policies
      of
      such New Entity, subject to the terms of such Corresponding Shared Policies
      and
      any limitations or obligations of such New Entity contemplated by this Article IX, specifically including rights of
      indemnity and the right to be




75


defended
      by or at the expense of the insurer, with respect to all alleged wrongful acts,
      claims, suits, actions, proceedings, injuries, losses, liabilities, damages
      and
      expenses incurred or claimed to have been incurred prior to the Closing Date
      by
      any Party in or in connection with the conduct of the Corresponding Business
      of
      such New Entity or, to the extent any claim is made against such New Entity
      or
      any member of its Group, the conduct of other Businesses, and which alleged
      wrongful acts, claims, suits, actions, proceedings, injuries, losses,
      liabilities, damages and expenses may arise out of an insured or insurable
      occurrence or wrongful act under one or more of such Corresponding Shared
      Policies; provided, however, that nothing in this Section 9.1 shall be deemed to constitute
      (or
      to reflect) an assignment of such Corresponding Shared Policies, or any of
      them,
      to such New Entity.




Section
      9.2.                                Claims
      Made Tail Policies.




(a)           CW
      Media shall purchase Directors and Officers Liability Insurance Policies from
      reputable and financially sound carriers expiring six years from the Effective
      Time and providing at least the same coverage and amount and containing terms
      and conditions that are no less favourable to the covered persons in respect
      of
      claims or events that existed or occurred at or prior to the Effective Time
      under the current policies of directors’ and officers’ liability insurance
      maintained prior to the Effective Time by CW Media and its Subsidiaries
      (“D&O Tail Policies”); provided, that CW Media shall not be
      obligated to pay aggregate premiums for any 12-month period in excess of 200%
      of
      the amount paid by CW Media for coverage for the most recently completed
      calendar year, and shall instead reduce the amount of coverage only to the
      extent necessary to reduce aggregate annual premiums to this maximum
      amount.  Such D&O Tail Policies shall cover the New Entities and
      the insured persons thereof.  Premiums actually paid by CW Media in
      respect of D&O Tail Policies shall be treated as Separation Expenses and
      dealt with in accordance with Schedule 1.1(123).  CW Media shall provide each New
      Entity with copies of the D&O Tail Policies within a reasonable time after
      the Policies are issued.




(b)           To
      the extent that CW Media is unable to obtain the D&O Tail Policies, then,
      with respect to claims based on wrongful acts on or before the Effective Time,
      CW Media shall use commercially reasonable efforts to secure alternative
      insurance arrangements on the applicable standalone insurance policies for
      each
      New Entity to provide benefits on terms and conditions (including policy limits)
      in favour of such New Entity and the insured persons thereof no less favourable
      than the benefits (including policy limits) that were to be afforded by the
      D&O Tail Policies.  With respect to such alternative insurance
      arrangements, CW Media, and each New Entity shall be responsible for premiums
      actually paid by CW Media and the New Entities collectively under their
      applicable standalone insurance policies in the same proportion that such New
      Entity is responsible for the Residual Liabilities hereunder.  CW
      Media shall not under any circumstances purchase any such alternative coverage
      containing an exclusion for claims based on wrongful acts up to and including
      the Closing Date to the extent such exclusion would preclude coverage for any
      New Entity other than STV and/or the insured persons thereof, but would not
      preclude coverage for CW Media, STV and/or the insured persons
      thereof.




Section
      9.3.                                Occurrence
      Based Policies.  With respect to the Shared Policies owned by a
      Party (or any member of




76


its
      Group) of automobile liability, general liability and other occurrence-based
      insurance, for claims that occur prior to the Closing Date, such Party will
      continue to provide the other Parties with access to such Shared Policies and
      shall reasonably cooperate with such other Parties and take commercially
      reasonable actions as may be necessary or advisable to assist such other Parties
      in submitting such claims to which such Shared Policies are responsive;
provided, that such other Parties shall be responsible for any
      deductibles or co-payments legally due and owing relating to such
      claims.  Notwithstanding anything in the preceding sentence, no Party
      shall be required to maintain any Shared Policy beyond its current
      terms.




Section
      9.4.                                Administration;
      Other Matters.




(a)           Administration.  Except
      as otherwise provided in Section 9.3 hereof,
      from and after the Effective Time, with respect to any Shared Policies owned
      by
      a Party (or any member of its Group), such Party shall be responsible for the
      following administrative functions: (i) the accounting for premiums,
      retrospectively-rated premiums, defense costs, indemnity payments, deductibles
      and retentions, as appropriate, under the terms and conditions of each of the
      Shared Policies, (ii) the reporting to excess insurance carriers of any losses
      or claims which may cause the per-occurrence, per claim or aggregate limits
      of
      any Shared Policy to be exceeded, (iii) the distribution of Insurance Proceeds
      as contemplated by this Agreement and (iv) the processing of claims made under
      the Shared Policies, including the reporting of claims to the insurance
      carriers, management and defense of claims and providing for appropriate
      releases upon settlement of claims, with respect to Corresponding Liabilities
      of
      each Group; provided, that the retention of such responsibilities by such
      Party is in no way intended to limit, inhibit or preclude any right to insurance
      coverage for any Insured Claim of a named insured under such Policies as
      contemplated by the terms of this Agreement; provided, further,
      that such Party’s retention of the administrative responsibilities for the
      Shared Policies shall not relieve the Party submitting any Insured Claim of
      the
      primary responsibility for reporting such Insured Claim accurately, completely
      and in a timely manner or of such Party’s authority to settle any such Insured
      Claim within any period permitted or required by the relevant Policy; and
provided, further, that each Party and its Group shall bear the
      costs of such administration in the same proportion as such Party and its Group
      bears responsibility for Residual Liabilities, except that such Party and its
      Group shall not be responsible for such costs from and after (i) such time
      as
      such Party’s Group no longer receives any benefits under such Shared Policy,
      (ii) such Shared Policy is terminated or (iii) such Party has elected, after
      giving reasonable notice, that such Party’s Group shall no longer receive any
      benefits from such Shared Policy.  Each Party may discharge its
      administrative responsibilities under this Section
      9.4 by contracting for the provision of services by independent
      parties.  Each of the applicable Parties shall pay any costs relating
      to defending its respective Insured Claims under Shared Policies to the extent
      such costs including defense, out-of-pocket expenses, and pro rata allocations
      of direct and indirect costs of employees or agents of the administrative Party
      related to the administration responsibilities under this Section 9.4(a) are not covered under such
      Policies.  Each of the Parties shall be responsible for obtaining or
      reviewing the appropriateness of releases upon settlement of its respective
      Insured Claims under Shared Policies.




(b)           Policy
      Limitations.  All claims made by any Party under any Shared Policy
      must be made in good faith and not for the purpose of avoiding the application
      or effect of




77


any
      limitations or restrictions of such Shared Policy.  Except as set
      forth in this Section 9.4, CW Media and the
      New Entities shall not be liable to one another for claims not reimbursed by
      insurers for any reason not within the control of such New Entity, including
      coinsurance provisions, deductibles, quota share deductibles, self-insured
      retentions, bankruptcy or insolvency of an insurance carrier, Shared Policy
      limitations or restrictions, any coverage disputes, any failure to timely claim
      by CW Media or a New Entity or any defect in such claim or its
      processing.  It is expressly understood that the foregoing shall not
      limit any Party’s liability to any other Party for indemnification pursuant to
Article VI.




(c)           Allocation
      of Insurance Proceeds.  Except as otherwise provided in Section 9.3, Insurance Proceeds received with
      respect to claims, costs and expenses under any Shared Policy shall be paid
      to
      or on behalf of the Party that owns such Shared Policy, which shall thereafter
      pay the Insurance Proceeds, as appropriate, to each New Entity with respect
      to
      its Corresponding Liabilities.  Payment of the allocable portions of
      indemnity costs of Insurance Proceeds resulting from such Policies will be
      made
      to the appropriate Party upon receipt from the insurance carrier.  In
      the event that the aggregate limits on any Shared Policies are exceeded by
      the
      aggregate of outstanding Insured Claims by two or more of the relevant Parties,
      such Parties agree to allocate the Insurance Proceeds received thereunder based
      upon their respective percentage of the total of their bona fide claims which
      were covered under such Shared Policy, and the Parties shall make such payments
      to each other as required to effect this allocation.  Each of the
      Parties shall take all commercially reasonable steps to recover from all other
      responsible parties in respect of an Insured Claim to the extent coverage limits
      under a Shared Policy have been exceeded or would be exceeded as a result of
      such Insured Claim.




(d)           Allocation
      of Aggregate Deductibles.  In the event that two or more Parties
      have bona fide claims under any Shared Policy for which an aggregate deductible
      is payable, the Parties agree that the aggregate amount of the deductible paid
      shall be borne by the Parties in the same proportion which the Insurance
      Proceeds received by each such Party bears to the total Insurance Proceeds
      received under the applicable Shared Policy, and the Parties shall make such
      payments to each other as required to effect this allocation.




(e)           Effective
      as of the Closing Date, each New Entity shall be responsible for the full amount
      of the deductible for their respective general liability and automobile
      liability claims.




Section
      9.5.                                Cooperation.  The
      Parties agree to use their commercially reasonable efforts to cooperate with
      respect to the various insurance matters contemplated by this Agreement,
      including with respect to joint defense arrangement in the absence of any actual
      or potential conflict of interest.




78


**ARTICLE
      X**









**MISCELLANEOUS**




Section
      10.1.                                Complete
      Agreement; Construction.  This Agreement, including the Exhibits
      and Schedules, and the Ancillary Agreements and Continuing Arrangements shall
      constitute the entire agreement between the Parties with respect to the subject
      matter hereof and shall supersede all previous negotiations, commitments and
      writings with respect to such subject matter.  In the event of any
      inconsistency between this Agreement and any Schedule hereto, the Schedule
      shall
      prevail.  In the event and to the extent that there shall be a
      conflict between the provisions of this Agreement and the provisions of any
      Ancillary Agreement or Continuing Arrangement, such Ancillary Agreement or
      Continuing Arrangement shall control; provided, that with respect to any
      Conveyancing and Assumption Instrument (including any contribution agreement,
      asset or stock transfer agreement, asset or stock purchase agreement or any
      similar agreement entered into in order to effectuate the Plan of Separation),
      this Agreement shall control unless it is specifically stated in such
      Conveyancing and Assumption Instrument that it controls over this
      Agreement.




Section
      10.2.                                Counterparts.  This
      Agreement may be executed in more than one counterparts including, in respect
      of
      the Additional Parties, one or more counterparts of Schedule 1, all of which
      shall be considered one and the same agreement, and shall become effective
      when
      one or more such counterparts have been signed by each of the Parties and
      delivered to the other Parties.




Section
      10.3.                                Survival
      of Agreements.  Except as otherwise contemplated by this Agreement
      or any Ancillary Agreement, all covenants and agreements of the Parties
      contained in this Agreement and each Ancillary Agreement shall survive the
      Effective Time and remain in full force and effect in accordance with their
      applicable terms.




Section
      10.4.                                Expenses.  Except
      as otherwise provided (i) in this Agreement (including with respect to
      Separation Expenses) or (ii) in any Ancillary Agreement, each Party shall bear
      its own out-of-pocket fees and expenses and internal fees, costs and expenses
      incurred or to be incurred by such Party or member of such Party’s Group, and
      shall reimburse any other Party to the extent such Party has paid such costs
      and
      expenses on behalf of the responsible Party).




Section
      10.5.                                Notices.  In
      this Section 10.5, a reference:




(1)           To
      “CanWest” means in care of:




CanWest
      MediaWorks Inc.




31st
      Floor, 201 Portage Avenue




79


CanWest
      Global Place




Winnipeg,
      MB  R3B 3L7




Attention:                                General
      Counsel




Fax:                      (204)
      947-9841




E-mail:                      rleipsic@canwest.com




with
      a
      copy (which shall not constitute Notice) to:




Osler,
      Hoskin & Harcourt LLP




Box
      50,
      One First Canadian Place




Toronto,
      ON  M5X 1B8




Attention:                                Linda
      Robinson




Fax:           (416)
      862-6666




E-mail:                      lrobinson@osler.com:




(2)           To
      “GSCP” means in care of:




GS
      Capital Partners AA Investment LLC




85
      Broad
      Street




New
      York,
      NY 10004




U.S.A.




Attention:                                Gerry
      Cardinale




Fax
      No.:                      212-357-5505




E-mail:                      gerry.cardinale@gs.com




with
      a
      copy (which shall not constitute Notice) to:




GS
      Capital Partners VI, L.P.




One
      New
      York Plaza




38th
      Floor




New
      York,
      NY 10004




U.S.A.




Attention:                                Ben
      Adler




Fax
      No.:                      212-482-3820




Email:                                ben.adler@gs.com




(3)           To
      “Edgestone” means in care of:




80


Edgestone
      Capital Partners, Inc.




The
      Exchange Tower




130
      King
      Street West




Suite
      600, Box 187




Toronto,
      ON   M5X 1A6




Attention:                                Sandra
      Cowan




Fax
      No.:                      (416)
      860-9838




Email:




All
      notices, requests, claims, demands and other communications under this Agreement
      and, to the extent applicable and unless otherwise provided therein, under
      each
      of the Ancillary Agreements shall be in writing and shall be given or made
      (and
      shall be deemed to have been duly given or made upon receipt) by delivery in
      person, by overnight courier service, by facsimile with receipt confirmed
      (followed by delivery of an original via overnight courier service) or by
      registered or certified mail (postage prepaid) to the respective Parties at
      the
      following addresses (or at such other address for a Party as shall be specified
      in a notice given in accordance with this Section
      10.5):


To
      CW
      Media:  to CanWest and to GSCP




To
      any
      member of Entertainment Group:  to GSCP




To
      any
      member of International Group:  to GSCP




To
      any
      member of Movie Group:  to GSCP and to Edgestone




To
      any
      member of Production Group:  to GSCP and to Edgestone




To
      any
      member of Propinquity Group:  to GSCP and to Edgestone




To
      any
      member of Shelter Group:  to CanWest and to GSCP




To
      any
      member of STV Group:  to CanWest and to GSCP




Section
      10.6.                                Waivers.  The
      failure of any Party to require strict performance by any other Party of any
      provision in this Agreement will not waive or diminish that Party’s right to
      demand strict performance thereafter of that or any other provision
      hereof.




Section
      10.7.                                Amendments.  Subject
      to the terms of Section 10.10 hereof, this
      Agreement may not be modified or amended except by an agreement in writing
      signed by each of the Parties.




Section
      10.8.                                Assignment.  Except
      as otherwise provided for in this Agreement, this Agreement shall not be
      assignable, in whole or in part, by any Party without the prior written consent
      of the other Parties, and any attempt to assign any rights or obligations
      arising under this Agreement without such consent shall be void;
provided, that (i) a Party may assign this Agreement to an Affiliate of
      such Party




81


and
      (ii)
      a Party may assign this Agreement in connection with a merger transaction in
      which such Party is not the surviving entity or the sale by such Party of all
      or
      substantially all of its Assets; provided, that the surviving entity of
      such merger or the transferee of such Assets shall agree in writing, reasonably
      satisfactory to each of the New Entities, to be bound by the terms of this
      Agreement as if named as a “Party” hereto; and provided further, that any
      such permitted assignment shall not release the assignor from its obligations
      under this Agreement.




Section
      10.9.                                Successors
      and Assigns.  The provisions of this Agreement and the obligations
      and rights hereunder shall be binding upon, inure to the benefit of and be
      enforceable by (and against) the Parties and their respective successors and
      permitted transferees and assigns.




Section
      10.10.                                Certain
      Termination and Amendment Rights.  This Agreement may not be
      terminated except by an agreement in writing signed by each New
      Entity.  Notwithstanding the foregoing, this Agreement may be
      terminated or amended only as among any Parties that remain Affiliates, so
      long
      as such amendment does not adversely affect any Party that is no longer an
      Affiliate, in which case, only with the consent of such Party.




Section
      10.11.                                Payment
      Terms.  (ii)  Except as expressly provided to the
      contrary in this Agreement or in any Ancillary Agreement, any amount to be
      paid
      or reimbursed by any Party (and/or a member of such Party’s Group), on the one
      hand, to any other Party or Parties (and/or a member of such Party’s Group or
      Parties’ Groups), on the other hand, under this Agreement, shall be paid or
      reimbursed at least five (5) days prior to the date such amount is due by the
      payee Party to the applicable third-party creditor with respect to such
      Liability (or if there is no third-party creditor with respect to the relevant
      Liability, within thirty (30) days after presentation of an invoice or written
      demand therefore setting forth, or accompanied by, reasonable documentation
      or
      other reasonable explanation supporting such amount).  To the extent
      that the payor Party does not pay such amounts to the payee Party when such
      payments are due (as described in the preceding sentence above), interest shall
      accrue on such amounts owed at a rate per annum from time to time equal to
      the
      annual rate of interest used by Bank of Nova Scotia as its reference rate of
      interest for Canadian dollar denominated demand loans to commercial customers
      in
      Canada and referred to by such bank as its “prime rate” (the “Prime
      Rate”), calculated for the actual number of days elapsed from the date such
      payment is due to the payee Party.  With respect to amounts received
      by the payee Party for payment to a third party, the payee Party shall, upon
      receipt, deposit such amounts into an interest bearing bank account and the
      interest accruing on such amounts shall be held for the benefit of the payor
      Party and paid to the payor Party following payment by the payee Party to the
      third party of the amounts owed.




(b)           In
      the event of a dispute or disagreement with respect to all or a portion of
      any
      amounts requested by any Party (and/or a member of such Party’s Group) as being
      payable, the payor Party shall be entitled to withhold payment for any disputed
      portion of such amounts; provided, that in the event that following the
      resolution of such dispute it is determined that the payor Party (and/or a
      member of the payor Party’s Group) was responsible for all or a portion of the
      amount withheld by the payor Party, the payor Party shall repay (or cause to
      be
      repaid) such




82


amounts
      to the payee Party, which amounts shall bear interest at a rate per annum from
      time to time equal to the Prime Rate, calculated for the actual number of days
      elapsed, accrued from the date on which such payment was withheld by the payor
      Party.




Section
      10.12.                                No
      Circumvention.  The Parties agree not to directly or indirectly
      take any actions, act in concert with any Person who takes an action, or cause
      or allow any member of any such Party’s Group to take any actions (including the
      failure to take a reasonable action) such that the resulting effect is to
      materially undermine the effectiveness of any of the provisions of this
      Agreement or any Ancillary Agreement (including adversely affecting the rights
      or ability of any Party to successfully pursue indemnification, contribution
      or
      payment pursuant to Article
      VI).




Section
      10.13.                                Subsidiaries.  Each
      of the Parties shall cause to be performed, and hereby guarantees the
      performance of, all actions, agreements and obligations set forth herein to
      be
      performed by any Subsidiary of such Party or by any entity that becomes a
      Subsidiary of such Party on and after the Closing Date and shall cause such
      Subsidiary to enter into such agreements (including becoming a direct party
      to
      this Agreement where to do so would not violate Law or cause such Subsidiary
      to
      be in default of any other agreements) or take such actions as are necessary
      to
      fulfill the purposes of this Agreement, provided that, for the avoidance
      of doubt, no Party shall be responsible for the performance of any Subsidiary
      which is a member of a different Group than such Party.




Section
      10.14.                                Third-Party
      Beneficiaries.  Except (i) as provided in Article VI relating to Indemnitees and for
      the
      release under Section 6.1 of any Person
      provided therein, (ii) as provided in Section
      9.2 relating to insured persons and (iii) as specifically provided in
      any Ancillary Agreement, this Agreement is solely for the benefit of the Parties
      and should not be deemed to confer upon third parties any remedy, claim,
      liability, reimbursement, claim of action or other right in excess of those
      existing without reference to this Agreement.




Section
      10.15.                                Title
      and Headings.  Titles and headings to sections herein are inserted
      for the convenience of reference only and are not intended to be a part of
      or to
      affect the meaning or interpretation of this Agreement.




Section
      10.16.                                Exhibits
      and Schedules.  The Exhibits and Schedules shall be construed with
      and as an integral part of this Agreement to the same extent as if the same
      had
      been set forth verbatim herein.




Section
      10.17.                                Governing
      Law.  This Agreement shall be governed by and construed in
      accordance with the internal Laws, and not the Laws governing conflicts of
      Laws,
      of the Province of Ontario and the laws of Canada applicable
      therein.




Section
      10.18.                                Consent
      to Jurisdiction.  Subject to the provisions of Article VIII hereof, each of the Parties
      irrevocably submits to the exclusive jurisdiction of courts of the Province
      of
      Ontario, for the




83


purposes
      of any suit, action or other proceeding to compel arbitration or for provisional
      relief in aid of arbitration in accordance with Article VIII or to prevent irreparable harm,
      and to the non-exclusive jurisdiction of the courts of the Province of Ontario
      for the enforcement of any award issued thereunder.  Each of the
      Parties further agrees that service of any process, summons, notice or document
      by registered mail to such Party’s respective address set forth above shall be
      effective service of process for any action, suit or proceeding in the courts
      of
      the Province of Ontario with respect to any matters to which it has submitted
      to
      jurisdiction in this Section
      10.18.  Each of the Parties irrevocably and unconditionally
      waives any objection to the laying of venue of any action, suit or proceeding
      arising out of this Agreement or the transactions contemplated hereby in the
      courts of the Province of Ontario, and hereby further irrevocably and
      unconditionally waives and agrees not to plead or claim in any such court that
      any such action, suit or proceeding brought in any such court has been brought
      in an inconvenient forum.




Section
      10.19.                                Specific
      Performance.  The Parties agree that irreparable damage would
      occur in the event that the provisions of this Agreement were not performed
      in
      accordance with their specific terms.  Accordingly, it is hereby
      agreed that the Parties shall be entitled to an injunction or injunctions to
      enforce specifically the terms and provisions hereof in any court of Canada,
      the
      United States or any province or state having jurisdiction, this being in
      addition to any other remedy to which they are entitled at law or in
      equity.




Section
      10.20.                                Bulk
      Sales Laws.  In respect of the transactions contemplated by this
      Agreement, none of the Parties shall require any of the other Parties to comply,
      or to assist with compliance, with the requirements of the *Bulk Sales
      Act* (Ontario) or section 6 of the *Retail Sales Tax Act* (Ontario)
      or any equivalent or corresponding provisions under any other applicable
      Laws.




Section
      10.21.                                Severability.  In
      the event any one or more of the provisions contained in this Agreement should
      be held invalid, illegal or unenforceable in any respect, the validity, legality
      and enforceability of the remaining provisions contained herein and therein
      shall not in any way be affected or impaired thereby.  The Parties
      shall endeavor in good faith negotiations to replace the invalid, illegal or
      unenforceable provisions with valid provisions, the economic effect of which
      comes as close as possible to that of the invalid, illegal or unenforceable
      provisions.




Section
      10.22.                                Force
      Majeure.  No Party (or any Person acting on its behalf) shall have
      any liability or responsibility for failure to fulfill any obligation (other
      than a payment obligation) under this Agreement or, unless otherwise expressly
      provided therein, any Ancillary Agreement, so long as and to the extent to
      which
      the fulfillment of such obligation is prevented, frustrated, hindered or delayed
      as a consequence of circumstances of Force Majeure.  A Party claiming
      the benefit of this provision shall, as soon as reasonably practicable after
      the
      occurrence of any such event:  (a) notify the other applicable Parties
      of the nature and extent of any such Force Majeure condition and (b) use due
      diligence to remove any such causes and resume performance under this Agreement
      as soon as feasible.




84


Section
      10.23.                                Interpretation.  The
      Parties have participated jointly in the negotiation and drafting of this
      Agreement.  This Agreement shall be construed without regard to any
      presumption or rule requiring construction or interpretation against the Party
      drafting or causing any instrument to be drafted.




Section
      10.24.                                No
      Duplication; No Double Recovery.  Nothing in this Agreement is
      intended to confer to or impose upon any Party a duplicative right, entitlement,
      obligation or recovery with respect to any matter arising out of the same facts
      and circumstances.




85


IN
      WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed,
      both below and on Schedule 1, as of the day and year first above
      written.









ENTERTAINMENT
      SUBCO AB, INC.







By:   "Gerry
      Cardinale"


Name: 
      Gerry Cardinale


Title: 
      Managing Director






ALLIANCE
      DISTRIBUTION HOLDINGS S.ÀR.L









By     "John
      Bowman"


Name: 
      John Bowman


Title: 
      Managing Director








4414608
      CANADA INC.







By: 
      "Gerry Cardinale" Name: 
        Gerry Cardinale


Title: 
      Managiing Director




3217920
      NOVA SCOTIA COMPANY









By: 
      "Sumit Raipal"


Name: 
      Sumit Rajpal


Title: 
      Vice President






4437497
      CANADA INC.






By:    "Sumit
      Raipal"


Name: 
      Sumit Rajpal


Title: 
      Vice President










86









4437641 CANADA INC.




By:   "Gerry
      Cardinale"


Name: 
      Gerry Cardinale


Title: 
      Managing Director






CW
      MEDIA
      HOLDINGS INC.







By: 
      "Riva Richard"


Name: 
      Riva Richard


Title: 
      Secretary







By:  "Richard
      Leipsic"


Name: 
        Richard Leipsic
 Title: 
        Vice President












ALLIANCE
      ATLANTIS
      EQUICAP CORPORATION







By: 
      "Karen Beckles"


Name: 
      Karen Beckles


Title: 
      Vice President - Finance






4414641
      CANADA INC.




By: 
        "Riva Richard"
 
 Name: 
        Riva Richard
 Title: 
        Secretary
 
  By:  "Richard
        Leipsic"
 Name: 
          Richard Leipsic
 Title: 
          Vice President










CW
      MEDIA
      INC.




By: 
        "Riva Richard"
 
 Name: 
        Riva Richard
 Title: 
        Secretary
 
  By:  "Richard
        Leipsic"
 Name: 
          Richard Leipsic
 Title: 
          Vice President
















87